-- Total reported revenue increased 1% to $25.3 million from $25.1 million in the fourth quarter of 2001; -- An overall gross profit margin of 88% and an operating margin, excluding total amortization, of 39%; -- Fourth quarter adjusted earnings per share, excluding the impact of acquisition-related amortization, of $0.43 compared to $0.38 in the fourth quarter of 2001; and reported GAAP earnings per share of $0.41 compared to $0.33 in the fourth quarter of 2001; and -- Cash flows from operations of $6.1 million in the fourth quarter of 2002. For the year ended December 31, 2002, ANSYS's financial results reflect: -- Total reported revenue increased 7% to $91.0 million from $84.8 million in 2001; -- An overall gross profit margin of 87% and an operating margin, excluding total amortization, of 32%; -- Adjusted earnings per share, excluding the impact of acquisition- related amortization, for the full year of 2002 of $1.29 compared with $1.11 in 2001; and reported GAAP earnings per share of $1.22 for the full year of 2002 compared with $0.89 for 2001; and -- Cash flows from operations of $22.1 million in 2002.
As previously mentioned, ANSYS reported revenue for the three- and twelve- month periods ended December 31, 2002 of $25.3 million and $91.0 million, respectively. In 2001, the Company modified its revenue recognition policy for annual software lease licenses to comply with Technical Practice Aid 5100.53 "Fair Value of PCS in a Short-Term Time-Based License and Software Revenue Recognition," issued by the American Institute of Certified Public Accountants. Had this revenue recognition policy modification been initially made in January 2002, revenue for the three- and twelve-month periods ended December 31, 2002 would have been approximately $25.0 million and $87.2 million, respectively. Beginning in 2003, this modification will no longer impact the comparability of the Company's reported revenue.
In 2002, the Company repurchased 504,900 shares of its common stock; 1.1 million shares remain authorized under ANSYS's buyback program.
Fourth Quarter 2002 and Year Ended December 31, 2002 Reported GAAP Results:
ANSYS reported net income for the quarter ended December 31, 2002 of $6.3 million, or $0.41 diluted earnings per share, based on 15.4 million weighted average common shares outstanding. For the quarter ended December 31, 2001, ANSYS reported net income of $5.1 million, or $0.33 diluted earnings per share, based on 15.7 million weighted average common shares outstanding. For the year ended December 31, 2002, ANSYS reported net income of $19.0 million, or $1.22 diluted earnings per share, based on 15.6 million weighted average common shares outstanding. For the year ended December 31, 2001, ANSYS reported net income of $13.7 million, or $0.89 diluted earnings per share, based on 15.4 million weighted average common shares outstanding.
Jim Cashman, ANSYS President and CEO, stated, "We believe that our solid fourth quarter and fiscal year 2002 results continue to reflect ANSYS's strength in the marketplace, despite the challenges of difficult economic conditions affecting the software industry. Although these economic elements are beyond our control, ANSYS continues to focus on long-term growth combined with disciplined expense control to maintain earnings during times of increased unpredictability in our customers' buying patterns."
Cashman further commented, "Looking into 2003, we see continued opportunity to increase shareholder value through our adherence to our strategic plan. This plan includes investing our resources to extend our core product and service offerings, strengthening and expanding our distribution channels and completing strategic acquisitions when opportunities arise. Our balance sheet strengthened in 2002 to end the year with $61.1 million in cash and short-term investments and no debt. ANSYS remains committed to delivering superior value to our customers which, in turn, we believe will increase shareholder value over the long run."
Consistent with the strategic plan, this morning the Company announced it has entered into a definitive agreement to acquire the outstanding common shares of the CFX Business (CFX) from AEA Technology plc (LONDON: AAT) for approximately $21 million in cash. CFX is a leading provider of fluid mechanics simulation software that develops, markets and supports computational fluid dynamics software products and services for customers to measure and regulate the flow of fluids during industrial processes. With over 4,000 active users, CFX has sales, support and consulting offices around the world. When completed, the combination of CFX's technology with ANSYS's existing strength in solid mechanics will allow ANSYS to simulate more of its customers' products and the environments surrounding them. Please refer to the ANSYS press release "ANSYS to Acquire CFX, A Leading Provider of Computational Fluid Dynamics Simulation Software and Services."
Additionally, during the fourth quarter ANSYS unveiled FEMXplorer, its first product featuring the implementation of CADOE variational technology acquired in late 2001. Another new product announced in the fourth quarter was AI*NASTRAN, an alternative NASTRAN product developed through a strategic OEM partnership with Schaeffer Automated Simulation.
As previously announced, ANSYS will hold a conference call at 10:30 A.M. Eastern Time on February 4, 2003 to discuss fourth quarter results and the proposed CFX acquisition, as well as to provide guidance regarding 2003 business prospects. The dial in number is 800-857-7001 and the passcode is "ANSYS". A replay will be available until February 6, 2003 by dialing 800-756-9736. The conference call will be webcast live and can be accessed, along with other financial information, on ANSYS' website, located at http://www.ansys.com/.
Some matters discussed in this news release constitute forward-looking statements under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These forward-looking statements include statements with respect to our future growth prospects, technology innovation and development of key strategic partnerships, our strength in the marketplace despite difficult economic conditions, our ability to maintain earnings through expense control despite increased unpredictability in our customer's buying patterns, our ability to increase shareholder value through by focusing on extending our core product and service offerings, strengthening and expanding our distribution channels and completing strategic acquisitions.
All forward-looking statements in this press release are subject to risks and uncertainties, such as the risk of a general economic downturn in one or more of ANSYS' primary geographic markets, the risk that ANSYS has overestimated its ability to maintain growth and profitability and control costs in the current economic environment, the risk that ANSYS' sales will be adversely impacted at a later stage in the current economic downturn, uncertainties regarding the demand for ANSYS' products and services in future periods, the risk that ANSYS has overestimated the strength of the demand among its customers for its products in an unstable economy, risks of problems arising from customer contract cancellations, uncertainties regarding customer acceptance of new products, the risk that ongoing pressure on customer spending will not allow investment in sales, technology innovation and development of key strategic partnerships, the risk that the Company will not be able to steer through subdued business conditions caused by persistent global economic sluggishness, the risk that ANSYS' strategic plan will not increase shareholder value over the long run, the risk that ANSYS' operating results will be adversely affected by possible delays in developing, completing, or shipping new or enhanced products, the risk that changes in the price of our common stock or the existence of competing uses for available cash will affect our willingness to continue the stock repurchase program, uncertainties regarding fluctuations in quarterly results, including uncertainties regarding the timing of orders from significant customers and regional economies, and other factors that are detailed from time to time in reports filed by ANSYS, Inc. with the Securities and Exchange Commission, including ANSYS, Inc.'s 2001 Annual Report and Form 10-K and the most recent quarterly report on Form 10-Q.
ANSYS, Inc. is committed to providing the most open and flexible analysis solutions to meet customer requirements for engineering software in today's competitive marketplace. ANSYS, Inc. partners with leading design software suppliers to develop state-of-the-art CAD-integrated products. ANSYS and its global network of ANSYS Support Distributors provide sales, support and training for customers. Information about ANSYS, Inc. and its products can be found on the Worldwide Web at http://www.ansys.com/.
Note to editors: ANSYS, ANSYS*EMAX, AI*NASTRAN, ANSYS*Environment, CADOE and DesignSpace are Trademarks or registered Trademarks of subsidiaries of ANSYS, Inc. located in the United States or other countries. All other trademarks and registered trademarks are the property of their respective owners.
ANSYS, INC. AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except per share data) (Unaudited) Three months ended Twelve months ended December 31, December 31, December 31, December 31, 2002 2001 2002 2001 Revenue: Software licenses $14,052 $14,381 $48,177 $45,318 Maintenance and service 11,215 10,692 42,834 39,518 Total revenue 25,267 25,073 91,011 84,836 Cost of sales: Software licenses 1,041 1,241 3,897 4,726 Maintenance and service 2,038 1,792 7,863 6,627 Total cost of sales 3,079 3,033 11,760 11,353 Gross profit 22,188 22,040 79,251 73,483 Operating expenses: Selling and marketing 4,997 5,310 20,089 19,726 Research and development 4,693 4,322 19,605 16,893 Amortization 565 1,347 2,289 5,271 General and administrative 2,632 3,399 10,194 13,045 Total operating expenses 12,887 14,378 52,177 54,935 Operating income 9,301 7,662 27,074 18,548 Other income (expense) (215) (160) 311 1,434 Income before income tax provision 9,086 7,502 27,385 19,982 Income tax provision 2,817 2,404 8,426 6,290 Net income $6,269 $5,098 $18,959 $ 13,692 Net income per basic common share: Basic earnings per share $0.43 $0.35 $1.30 $0.94 Weighted average shares - basic 14,557 14,427 14,598 14,554 Net income per diluted common share: Diluted earnings per share $0.41 $0.33 $1.22 $0.89 Weighted average shares - diluted 15,374 15,693 15,594 15,438 Net income before acquisition- related amortization: $6,552 $5,972 $20,091 $17,144 Adjusted diluted earnings per share $0.43 $0.38 $1.29 $1.11 ANSYS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands) December 31, December 31, 2002 2001 (Unaudited) (Unaudited) ASSETS: Cash & short-term investments $61,132 $53,448 Accounts receivable, net 15,875 15,352 Other assets 49,424 48,962 Total assets $126,431 $117,762 LIABILITIES & STOCKHOLDERS' EQUITY: Current liabilities $35,238 $43,369 Stockholders' equity 91,193 74,393 Total liabilities & stockholders' equity $126,431 $117,762
CONTACT: Mark A. Dozzo of ANSYS, Inc. - Treasurer, +1-724-514-1782
Web site: http://www.ansys.com/