1998 Total Revenue Increases 30% To FF 2,712 Million -Euro 413 million- and EPS Before Acquisition Costs Rises 31% TO FF 5.53 -Euro 0.84-.SURESNES Suresnes (sürĕn`), city (1990 pop. 36,950), Hauts-de-Seine dept., N central France, a residential and industrial suburb of Paris. Its manufactures include automobiles, aeronautic equipment, and pharmaceuticals. , France--(BUSINESS WIRE)--February 8, 1999--Dassault Systemes S.A. (Nasdaq: DASTY; Bourse bourse (b  rs), term applied to a European stock exchange. The first international bourse was established in Antwerp in the 16th cent. de Paris), a worldwide leading
software developer of CAD/CAM/CAE/PDM II products, today announced
financial results for the fourth quarter and year ended December December: see month. 31,
1998.As previously announced, Dassault Systemes Dassault Systemes (Dassault Systèmes S.A.) (Pronounced - Dasoh) (NASDAQ: DASTY; Euronext: 13065) is a leading company specializing in 3D and PLM (Product Lifecycle Management) software. completed the acquisition of Deneb Deneb (dĕn`ĕb), brightest star in the constellation Cygnus; Bayer designation Alpha Cygni; 1992 position R.A. 20h41.2m, Dec. +45°15'. on December 30, 1997 and IBM's ProductManager on April 1, 1998. 1997 pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results include those of SolidWorks SolidWorks is a 3D mechanical CAD (computer-aided design) program that runs on Microsoft Windows and was developed by SolidWorks Corporation - now a subsidiary of Dassault Systèmes, S. A. (Suresnes, France). , as the acquisition was accounted for as a pooling-of-interests. Fourth quarter and twelve months pooled pro forma 1997 financial results are presented for comparison purposes only and include the impact of ongoing operations of Deneb as if the acquisition had occurred on January January: see month. 1, 1997. All references in the press release to 1997 figures are pro forma, unless stated otherwise. In addition, in connection with the acquisition of Deneb and ProductManager, 1998 fourth quarter and full year financial results include estimated pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charges totaling FF 4.7 million and FF 66.3 million, respectively, related to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of in-process Research and Development from ProductManager and goodwill amortization from Deneb and ProductManager. Goodwill amortization which was previously classified as R&D is now classified as an Acquisition Cost. All financial figures in this press release are before these Acquisition Costs unless otherwise noted. Total revenue increased 27.5% to FF 822.3 million (Euro 125.4 million) in the 1998 fourth quarter, up from FF 644.9 million (Euro 98.3 million) in the 1997 fourth quarter. Software revenue was FF 713.4 million, an increase of 29% over the year-ago quarter. The Company commented that software license sales were very strong in both Europe and the Americas, growing 37% and 32%, respectively. Software revenue represented 87% of total revenue, with service revenue accounting for 13%. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. rose 29% to FF 351.6 million in the 1998 fourth quarter, up from FF 273.3 million in the year-ago quarter. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was 42.8% in the recently completed quarter, comparable to 42.4% in the 1997 fourth quarter. For the three months ended December 31, 1998, net income increased 57% to FF 224.0 million, or FF 1.97 per share (Euro 0.30), compared to FF 142.3 million or 1.26 per share (Euro 0.19) in the 1997 fourth quarter. Charles Edelstenne, Dassault Systemes' Chairman and Chief Executive Officer, stated, "1998 was a year of exceptional performance for the Company. Dassault Systemes reported record financial results, notwithstanding the difficult economic environment in Asia during the year. Both Europe and the Americas more than offset the weakness in Asia, posting substantial revenue growth." Recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. software revenue represented 36% of total software revenue in the quarter and 44% for the year. The level of recurring revenue may vary from quarter to quarter due to the seasonality of the level of software sales. New CATIA-CADAM workstation seats shipped in the quarter increased 19% to 8,601 and new SolidWorks seats shipped totaled 3,796, representing an increase of 39% in comparison to the year-ago period. Bernard Charles Bernard Charles is the CEO of Dassault Systemes. References
in full computer-aided design/computer-aided manufacturing. Integration of design and manufacturing into a system under direct control of digital computers. industry in 1998, with every area of the Company contributing to this success. As a result of this achievement Dassault Systemes increased its market share during 1998. We are very proud of this achievement, which we believe reflects our success in providing customers with the appropriate software solutions to respond to their business needs. "The fourth quarter of 1998 was very productive for the Company. RENAULT, a CATIA A family of 2D and 3D CAD programs from IBM. CATIA was one of the first CAD programs to provide 3D solid modeling. The program was developed by Dassault Systems, a French aerospace company. customer for the powertrain division, selected Dassault Systemes as its primary strategic system for future digital automotive engineering Noun 1. automotive engineering - the activity of designing and constructing automobiles automotive technology engineering, technology - the practical application of science to commerce or industry . "Recently, following an extensive benchmarking process, PSA (Professional Services Automation) An information system designed to organize, track and manage all opportunities, work, resources, costs, revenues and invoices to improve the productivity and efficiency of the workforce. Peugeot Citroen selected CATIA as its core modeling solution to assist them in the development of their digital engineering vision. With these recent decisions by RENAULT and PSA Peugeot Citroen, now all the major European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. automotive manufacturers have decided to standardize stan·dard·ize v. 1. To cause to conform to a standard. 2. To evaluate by comparing with a standard. on CATIA." Bernard Charles, President of Dassault Systemes S.A., added, "In terms of product development, 1998 has been the opportunity to 'bring together' our solutions to create the Digital Enterprise, significantly reinforcing CATIA Digital Mock-up mock·up also mock-up n. 1. A usually full-sized scale model of a structure, used for demonstration, study, or testing. 2. A layout of printed matter. and Digital Manufacturing with the Deneb solutions and introducing a revolutionary approach with ENOVIA Virtual Product Development Management. "1999 will be the year to 'leverage together' by introducing, with Version 5, a consistent architecture for all our product lines. The deployment of our digital enterprise vision for 'process-centric' customers will help them to optimize optimize - optimisation the whole product lifecycle Product lifecycle or product life cycle is the course of a product's sales and profits over time. The five stages of each product lifecycle are product development, introduction, growth, maturity and decline. and to focus on innovation. "This reinforces the need to have SolidWorks continue its effort in developing solutions to address the 'design-centric' market. I am extremely pleased with their performance in this market in 1998 with an 80% rise in revenues, and the promising start they took with SolidWorks 98 Plus." Dassault Systemes' Executive Vice President, Thibault de Tersant, said, "We enter 1999 with better visibility and believe the Company is well-positioned to continue to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, the growth of the overall CAD/CAM industry and to continue to gain market share, based on significant investments in R&D, consulting and marketing." For the year ended December 31, 1998, total revenue increased 30% to FF 2,711.6 million (Euro 413.3 million), compared to FF 2,092.4 million (Euro 319.0 million) in 1997. In 1998 operating income increased 33% to FF 1,026.5 million. Net income rose 37% to FF 628.8 million in 1998, compared to FF 457.4 million in 1997. On a per share basis, net income increased 31% to FF 5.53 (Euro 0.84 million), up from FF 4.21 in 1997 (Euro 0.64 million). New CATIA-CADAM workstation seats shipped in 1998 totaled 26,006 and new SolidWorks seats shipped totaled 13,847. Net income after acquisition-related costs was FF 584.5 million or FF 5.14 per share in 1998, compared to a net loss, after acquisition-related costs, of FF 113.4 million or FF 1.06 per share. In conjunction with the acquisition of ProductManager in April of 1998, the Company initially recorded FF 95.6 million of in-process R&D, FF 49.6 million of acquired technology and no goodwill in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with established accounting practice and an independent valuation. The Securities and Exchange Commission issued new guidance to public accounting firms regarding the valuation of in-process research and development after the Company had reported results for the second and third quarters. As a result of the new guidance by the SEC related to the valuation of in-process R&D, the Company has lowered the value of in-process R&D to FF 49 million, decreased acquired technology to FF 44.8 million and recorded goodwill of FF 51.4 million. In connection with these changes, the Company has restated its financial results for the second and third quarters of 1998. Restated first nine months earnings per share on an after-tax diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis amount to FF 3.18 per share versus FF 3.05 per share. The impact on prior quarters financial statements of reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of the goodwill amortization and the restated valuation of ProductManager in-process R&D and goodwill is displayed in a PDF file See PDF. which is available on Dassault Systemes' Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the Web-site at: http://www.dsweb.com Dassault Systemes S.A. is a leading software developer for the CAD/CAM/CAE/PDM II market -- providing users with solutions for their product development needs. CATIA-CADAM Solutions and Deneb solutions enable total simulation of the creation of a product. SolidWorks, a wholly-owned subsidiary, offers design-oriented, software solutions based on Windows. With Java-based CATWEB e-business tools, everyone can exploit engineering data over the web. ENOVIA PDM (1) (Product Data Management) An information system used to manage the data for a product as it passes from engineering to manufacturing. The data includes plans, geometric models, CAD drawings, images, NC programs as well as all related project data, notes and II Solutions deliver a new multi-CAD collaborative and innovative environment for the virtual product and process modeling and management across the extended enterprise. The Company's customer base comprises over 13,000 CATIA-CADAM and 9,500 SolidWorks customers and over 124,000 CATIA-CADAM and 26,000 SolidWorks seats. Information on Dassault Systemes is available on the Internet at: http://www.dsweb.com. -0-
DASSAULT SYSTEMES S.A.
CONSOLIDATED STATEMENTS OF INCOME DATA
(in millions of French Francs, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 1998 1997
----------- ----------- ----------- -----------
Pro-Forma Pro-Forma
Revenue:
Software revenue FF 713.4 FF 551.3 FF 2,351.6 FF 1,811.6
Service and other
revenue 108.9 93.6 360.0 280.8
Total revenue 822.3 644.9 2,711.6 2,092.4
Cost of revenue:
Software revenue 6.0 9.0 32.9 42.2
Service and other 89.7 68.2 291.5 221.5
Total cost of revenue 95.7 77.2 324.4 263.7
Gross profit 726.6 567.7 2,387.2 1,828.7
Research, selling &
administrative
expenses:
Research and
development 219.8 175.1 789.6 662.8
Marketing and
sales 116.1 85.0 417.0 268.3
General
administration 39.1 34.3 154.1 122.6
Acquisition
costs (1) 4.7 544.0 66.3 582.0
Total research,
selling &
Administrative
expenses 379.7 838.4 1,427.0 1,635.7
Operating income
(loss) 346.9 (270.7) 960.2 193.0
Financial revenue
and other 12.6 5.5 44.1 25.4
Income (loss) before
income taxes 359.5 (265.2) 1,004.3 218.4
Income tax expense (137.7) (136.5) (419.8) (331.8)
Net income
(loss) (1) FF 221.8 FF (401.7) FF 584.5 FF (113.4)
Diluted net
income (loss)
per share (1) FF 1.95 FF (3.62) FF 5.14 FF (1.06)
Basic weighted
average shares
outstanding
(in millions) 111.9 110.9 111.7 107.4
Diluted weighted
average shares
outstanding
(in millions) 113.9 113.1 113.8 108.6
Excluding Acquisitions
costs, diluted net
income per share is
as follows:
Income before
income taxes FF 364.2 FF 278.9 FF 1,070.6 FF 800.5
Income tax expense (140.2) (136.6) (441.8) (343.1)
Net income 224.0 142.3 628.8 457.4
Diluted net income
per share (1) 1.97 1.26 5.53 4.21
DASSAULT SYSTEMES S.A.
CONSOLIDATED BALANCE SHEETS
(in millions of French Francs)
December 31, December 31,
1998 1997
ASSETS
Cash and cash equivalents FF 1,532.8 FF 1,165.4
Short-term investments 41.3 63.2
Trade accounts receivable, net 823.4 723.5
Other current assets 199.7 98.7
Total current assets 2,597.2 2,050.8
------- -------
Property, plant and equipment 606.0 638.0
Accumulated depreciation (239.6) (307.2)
------- -------
Property, plant and equipment, net 366.4 330.8
Intangible assets, net 98.2 54.2
------- -------
Total assets FF 3,061.8 FF 2,435.8
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses FF 384.6 FF 309.2
Sales incentive payable and unearned revenue 400.3 443.4
Other current liabilities 285.6 172.8
------- -------
Total current liabilities 1,070.5 925.4
Long-term obligations 254.7 260.2
Shareholders' equity 1,736.6 1,250.2
------- -------
Total liabilities and shareholders' equity FF 3,061.8 FF 2,435.8
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