Ansoft Corporation Third Quarter Earnings Increase More Than 50%.PITTSBURGH Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. -- Ansoft Ansoft Corporation (Nasdaq: ANST) is an Electronic Design Automation (EDA) vendor. The company was founded in 1984 and is headquartered in Pittsburgh, Pennsylvania, United States. Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ANST ANST Association of Neuropsychology Students in Training ANST After Negative Skin Test ) today announced financial results for its third quarter of fiscal 2006 ended January January: see month. 31, 2006. Revenue for the third quarter totaled $19.7 million, an increase of 13% compared to $17.4 million reported in the previous fiscal year's third quarter. On a non-GAAP basis, net income for the third quarter was $4.5 million, or $0.35 per 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. share, representing a 52% increase when compared to non-GAAP net income of $3.0 million, or $0.23 per diluted share in the previous fiscal year's third quarter. On a generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis, net income for the third quarter was $4.3 million, or $0.33 per diluted share, compared to GAAP net income of $2.8 million, or $0.21 per diluted share in the previous fiscal year's third quarter. Non-GAAP financial measures exclude the impact of acquisition-related amortization. A reconciliation of these amounts to the appropriate GAAP amounts, for the three months ended January 31, 2006 and 2005 is included with this press release. "We had an excellent quarter with more than 50% growth in earnings," said Nicholas Nicholas, Russian grand duke Nicholas (Nikolai Nikolayevich) (nyĭkəlī` nyĭkəlī`əvĭch), 1856–1929, Russian grand duke and army officer; first cousin of Czar Alexander III and grandson of Czar Csendes, Ansoft's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "For the fourth quarter, we expect record revenues and record earnings." Ansoft is a leading developer of high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" electronic design automation (EDA (1) (Electronic Design Automation) Using the computer to design, lay out, verify and simulate the performance of electronic circuits on a chip or printed circuit board. ) software. Engineers use Ansoft software to design state-of-the-art electronic products, such as cellular phones, internet access See how to access the Internet. devices, broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). networking components and systems, integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. (ICs), printed circuit boards (PCBs), automotive electronic systems and power electronics. Ansoft markets its products worldwide through its own direct sales force and has comprehensive customer-support and training offices throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Asia and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .
This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. including those related to revenue and earnings growth for the current fiscal year that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially, including, but not necessarily limited to, management's ability to forecast revenues and control expenses and the amount, timing and structure of software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. . For further information regarding risks and uncertainties associated with Ansoft's business, please refer to the "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" section of Ansoft's SEC filings, including, but not limited to, its annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and quarterly reports on Form 10-Q Form 10-Q See 10-Q. , copies of which may be obtained at Ansoft's website at www.ansoft.com/about/investor/index.cfm. All information in this release is as of February February: see month. 14, 2006. Ansoft undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
ANSOFT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three months ended Nine months ended
January 31, January 31,
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue
License $11,251 $10,182 $27,194 $25,012
Service and other 8,404 7,198 25,279 20,992
--------- --------- --------- ---------
Total revenue 19,655 17,380 52,473 46,004
Costs of revenue
License 135 141 368 363
Service and other 368 355 1,019 1,015
--------- --------- --------- ---------
Total cost of revenue 503 496 1,387 1,378
Gross profit 19,152 16,884 51,086 44,626
Operating Expenses
Sales and marketing 8,013 7,424 22,477 22,522
Research and development 4,188 4,204 12,377 12,230
General and administrative 1,122 1,199 3,692 3,592
Amortization 370 415 1,108 1,208
--------- --------- --------- ---------
Total operating expenses 13,693 13,242 39,654 39,552
--------- --------- --------- ---------
Income from operations 5,459 3,642 11,432 5,074
Net realized gain (loss) on
sale of securities - - (2) 732
Other income, net 269 374 749 975
--------- --------- --------- ---------
Income before income taxes 5,728 4,016 12,179 6,781
Income tax expense 1,468 1,232 2,655 2,076
--------- --------- --------- ---------
Net income $4,260 $2,784 $9,524 $4,705
========= ========= ========= =========
Net income per share
Basic $0.36 $0.24 $0.80 $0.41
========= ========= ========= =========
Diluted $0.33 $0.21 $0.73 $0.35
========= ========= ========= =========
Weighted average shares used in calculation
Basic 11,849 11,490 11,852 11,574
========= ========= ========= =========
Diluted 12,957 13,390 12,961 13,342
========= ========= ========= =========
ANSOFT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(unaudited)
January 31, April 30,
2006 2005
------------ ----------
Assets
Current assets
Cash and cash equivalents $10,498 $11,910
Accounts receivable, net of allowance for
doubtful accounts of $525 and $425,
respectively 12,660 17,388
Deferred income taxes 566 229
Prepaid expenses and other assets 1,780 1,148
------------ ----------
Total current assets 25,504 30,675
Equipment and furniture, net of accumulated
depreciation of $7,764 and $6,961,
respectively 2,696 2,811
Marketable securities 31,365 28,496
Other assets 128 146
Deferred income taxes 5,733 6,177
Goodwill 1,239 1,239
Other intangible assets, net 2,800 3,877
------------ ----------
Total assets $69,465 $73,421
============ ==========
Liabilities and stockholders' equity
Current liabilities
Accounts payable $500 $231
Accrued payroll 1,429 2,290
Other accrued expenses 2,522 3,076
Current portion of deferred revenue 15,114 17,500
------------ ----------
Total current liabilities 19,565 23,097
Long-term portion of deferred revenue 1,189 1,039
------------ ----------
Total liabilities 20,754 24,136
Stockholders' equity
Preferred stock, par value $0.01 per share;
1,000 shares authorized, no shares outstanding - -
Common stock, par value $0.01 per share; 25,000
shares authorized; issued 14,194 and 13,901
shares, respectively and outstanding 11,833
and 12,083, respectively 142 140
Additional paid-in capital 75,596 70,410
Treasury stock, 2,361 and 1,818 shares,
respectively (36,119) (21,762)
Accumulated other comprehensive loss, net (1,267) (338)
Retained earnings 10,359 835
------------ ----------
Total stockholders' equity 48,711 49,285
------------ ----------
Total liabilities and stockholders' equity $69,465 $73,421
============ ==========
ANSOFT CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(In thousands, except per share amounts)
(unaudited)
Pursuant to the requirement of Regulation G, the Company has provided a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. These measures differ from GAAP in that they exclude acquisition-related amortization. The Company has provided this measurement in addition to GAAP financial results because it believes the non-GAAP financial measure provides useful information to investors in that it provides additional insight into our core operations and a consistent basis for comparison between quarters not influenced by certain non-cash items. The Company does not acquire businesses on a predictable cycle. As a result, management has difficulty comparing the Company's profitability as measured by net income on a period to period basis unless it excludes acquisition-related amortization because it may appear in one period but not in the comparable period. Further, management finds it useful to exclude non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. in order to more readily correlate the Company's operating activities with the Company's ability to generate cash from operations and more accurately predict liquidity requirements. Finally, this same financial measure is used by management to track the Company's performance relative to externally communicated financial targets and to competitors' operating results. The additional non-GAAP financial information presented should be considered in conjunction with, and not as a substitute for, the financial information presented 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 GAAP.
Three months ended
January 31,
--------------------
2006 2005
---------- ---------
GAAP net income $4,260 $2,784
Amortization of intangibles (1) 229 257
---------- ---------
Non-GAAP net income $4,489 $3,041
========== =========
Non-GAAP net income per diluted common share $0.35 $0.23
========== =========
Weighted average diluted shares used in
calculation 12,957 13,390
========== =========
(1) Amortization expense net of a 38% tax rate.
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