Dassault Systemes Outperforms PLM Market with Solid First Quarter.Business Editors/High-Tech Writers PARIS--(BUSINESS WIRE)--April 24, 2003 -- Financial Results Above Market Expectations With Revenue EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 169.4 Million, Operating Margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: 20.5% and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. EUR 0.20 -- Before Acquisition Costs, Operating Margin 21.7% and EPS EUR 0.21 -- 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 Business Continues to Outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. PDM Market, With Revenue Up 17% -- On a Constant Exchange Rate Basis, Total Revenue Increased 1% -- DS Sets 8% EPS Growth Objective For 2003 or 7% Before Acquisition Costs; Reconfirms 2003 Revenue Objective 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. (DS) (Nasdaq: DASTY; Euronext Paris Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the London Stock Exchange. : #13065, DSY DSY Drum Storage Yard PA), a worldwide leading software developer of 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. management (PLM (Product Life cycle Management) A comprehensive information system that coordinates all aspects of a product from initial concept to its eventual retirement. Sometimes called the "digital backbone" of a product, it includes the requirements phase, analysis and design ) solutions, today reported financial results for the first quarter ended March 31, 2003. All financial information is unaudited and reported in accordance with U.S. 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 (U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Additional financial information, specifically noted as such, is also presented that is not in conformity with U.S. GAAP, with the presentation of 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. , operating margin and earnings per share before acquisition costs (primarily technology amortization and other related costs). All comparative figures are given on a year over year basis unless specified otherwise. FINANCIAL HIGHLIGHTS First Quarter Total revenue in the 2003 first quarter was EUR 169.4 million. On a U.S. GAAP basis net income was EUR 22.3 million or EUR 0.20 per share in the 2003 first quarter compared to EUR 25.3 million or EUR 0.21 per share in the first quarter of 2002, representing a per share decrease of 5%. Net income excluding acquisition costs was EUR 24.2 million or EUR 0.21 per share in the 2003 first quarter, a 13% decrease on a per share basis compared to EUR 28.5 million or EUR 0.24 per share in the 2002 first quarter. As anticipated, in comparison to the first quarter of 2002 total revenue decreased 7%, or increased by 1% on a constant currency basis. Software revenue was EUR 145.1 million in the 2003 first quarter and represented 86% of total revenue. In comparison to the year-ago quarter, software revenue decreased 9%, or 1% on a constant currency basis. 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 continued to be an important component of software revenue and represented 55% of total software revenue in the 2003 first quarter, compared to 49% in the 2002 first quarter. Seats licensed in the quarter totaled 12,917 with 6,874 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. and 6,043 SolidWorks seats. Services and other revenue increased 5% to EUR 24.3 million and represented 14% of total revenue. This growth in services revenue primarily reflected the increase in the number of PLM projects during the quarter. Process-centric revenue, including PDM revenue, totaled EUR 138.9 million in the 2003 first quarter, decreasing 7% compared to EUR 149.8 million in the year-ago quarter. On a stand-alone basis, PDM revenue increased 17% to EUR 17.3 million in the 2003 first quarter, compared to EUR 14.8 million in the year-ago quarter and accounted for 10% of total revenue in the 2003 first quarter. PDM end-user software revenue totaled EUR 25.6 million in the 2003 first quarter. Design-centric revenue totaled EUR 30.5 million in the 2003 first quarter, a decrease of 7% compared with the year-ago period but in U.S. dollars design-centric revenue increased significantly, growing 15% year over year. The Company had a strong financial position with cash and short-term investments totaling EUR 459.6 million and no bank debt at March 31, 2003. Charles Edelstenne, Chairman of DS, stated, "In a difficult business environment, DS achieved results in line with its financial objectives. I believe we are well positioned to outperform the market in 2003 as we continue to focus on delivering solid financial results." Bernard Charles Bernard Charles is the CEO of Dassault Systemes. References
"In a few days, we will be formally introducing our newest set of releases for the Product Lifecycle Management market, with our Version 5 Release 11 for CATIA, ENOVIA, SMARTEAM and DELMIA DELMIA Digital Enterprise Lean Manufacturing Interactive Application . Our V5R11 PLM portfolio delivers an unmatched degree of product realism and leading-edge solutions to address real-world industry needs of our customers." Thibault de Tersant, Executive Vice President and CFO See Chief Financial Officer. , commented, "Our financial results for the first quarter exceeded expectations for revenue, operating margin and earnings per share. Revenue came in at the high end of our objective, reflecting improved performance in the U.S. and at SolidWorks. Our continued focus on managing our costs as well as better than expected revenues contributed to the stronger than anticipated earnings and operating margin performance. "Looking ahead, we continue to be cautious about the economy. For the second quarter, we believe a revenue objective of EUR 180-EUR 185 million is appropriate. We are reconfirming our revenue objective for the full year, with total revenue expected to be similar to or slightly higher than the EUR 774 million reported in 2002 and we are initiating a U.S. GAAP EPS objective for the year of approximately EUR 1.18 or 8% growth in EPS compared to 2002 U.S. GAAP EPS of EUR 1.09. Before acquisition costs, our EPS objective for the year is EUR 1.25, a 7% increase over 2002. We believe that our operating margin in 2003 could see an improvement of up to one percentage point over the operating margin achieved in 2002. In constant currencies we are reconfirming our revenue growth objective of approximately 7%. These objectives continue to assume a U.S. dollar to Euro exchange rate of $1.10 per EUR 1.00 as we outlined in our 2002 year-end press release." The Company has repurchased approximately 1.4 million shares under its share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program announced in the Company's year-end press release of February 6, 2003. At the request of the French regulatory commission (COB), DS plans to make available on its website a press release stating DS French GAAP 2002 financial results, including a reconciliation of French GAAP to U.S. GAAP. 2002 revenue was EUR 774 million under French GAAP and U.S. GAAP. French GAAP 2002 EPS was EUR 0.18 lower than U.S. GAAP EPS, with the variance primarily accounted for by the different rules regarding goodwill amortization. BUSINESS HIGHLIGHTS Bertrandt AG, a leading engineering services provider for the automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. , signed a PLM solutions contract with DS. Bertrandt selected ENOVIA Life Cycle Applications V5 for product data management to integrate it with the company's existing CATIA V5 solutions in order to standardize stan·dard·ize v. 1. To cause to conform to a standard. 2. To evaluate by comparing with a standard. its entire product development platform. Daewoo Heavy Industries & Machinery Limited (DHIM), a leading company in the machinery industry of Korea providing first-class products and services in construction equipment, industry vehicles, machine tools, factory automation systems, diesel engines, and defense systems, signed a PLM solutions contract. The newly acquired PLM solutions will help DHIM enhance product development and consolidate collaboration environments with CATIA V5 and ENOVIA LCA LCA Life Cycle Assessment LCA Saint Lucia (ISO Country code) LCA Life Cycle Analysis LCA Linux.conf.au (Australian Linux conference) LCA Labor Condition Application LCA Light Combat Aircraft software developed by DS. PLM technologies will enable DHIM to maximize efficiencies surrounding the development of products such as forklifts and passenger car engines, and exploit the collaboration features afforded by PLM solutions. Nilfisk-Advance, one of the world's leading suppliers of cleaning equipment, signed a contract for the expansion and consolidation of the company's PLM platform. Nilfisk-Advance development teams will benefit from faster product design and improved collaboration with software developed by DS, including CATIA V5 for collaborative product development Collaborative Product Development (Collaborative Product Design) (CPD) is a business strategy, work process and collection of software applications that facilitates different organizations to work together on the development of a product. , and ENOVIA Portal and SMARTEAM for collaborative lifecycle management. ENAER, Chile's national aeronautical aer·o·nau·tic also aer·o·nau·ti·cal adj. Of or relating to aeronautics. aer  o·nau company, signed a PLM
solutions contract, including both CATIA and SMARTEAM. These software
solutions will enable ENAER to standardize its entire product
development platform, while realizing significant cost reductions.Vanderlande Industries of the Netherlands selected SMARTEAM as its enterprise PLM solution. Vanderlande Industries is a leading provider of advanced material handling and supply chain systems for distribution centers, airport baggage handling operations, sorting centers for express parcel services, and the manufacturing industry. DS and ESI (Edge Side Includes) A markup language for Web pages that enables elements of a Web page to be dynamically assembled in servers distributed throughout the Internet. Group (Euronext Paris: #6584) signed a CAA Caa See CCC. V5 (Component Application Architecture) strategic development agreement under which ESI Group will develop and sell its next generation solutions for Virtual Prototyping, Manufacturing and Environment using V5 middleware Software that functions as a conversion or translation layer. It is also a consolidator and integrator. Custom-programmed middleware solutions have been developed for decades to enable one application to communicate with another that either runs on a different platform or comes from a . As a result of this partnership, ESI Group will first focus on delivering within V5, multi-physics realistic simulation solutions for crashworthiness Crashworthiness is the ability of a structure to protect its occupants during an impact. This is commonly tested when investigating the safety of vehicles. Depending on the nature of the impact and the vehicle involved, different criteria are used to determine the and stamping processes. ESI Group is a world-leading provider of digital simulation software Simulation software is based on the process of imitating a real phenomenon with a set of mathematical formulas. It is, essentially, a program that allows the user to observe an operation through simulation without actually running the program. for prototype and manufacturing process engineering that takes into account the physics of materials critical for crash, safety, vibro-acoustics, stamping, casting, welding welding, process for joining separate pieces of metal in a continuous metallic bond. Cold-pressure welding is accomplished by the application of high pressure at room temperature; forge welding (forging) is done by means of hammering, with the addition of heat. , flow and electromagnetics simulation. Under the terms of the agreement, ESI Group joins DS Software Community Program as a CAA V5 Gold Software Partner. DS and Immersion Corporation Immersion Corporation of San Jose, California, is a developer of haptic technology. The company was founded in 1993.[1] Immersion's technology is employed in automotive, entertainment, medical training, mobility, personal computing, and three-dimensional (Nasdaq: IMMR IMMR Internal Memory Map Register ) signed an agreement under which Immersion immersion /im·mer·sion/ (i-mer´zhun) 1. the plunging of a body into a liquid. 2. the use of the microscope with the object and object glass both covered with a liquid. will develop a new hand-interaction software suite based on the CAA V5 development platform. The suite, VirtualHand(R) for V5, will enable CATIA and ENOVIA DMU (Digital MockUp) The combination of geometry data from multiple CAD systems rendered and manipulated as a sub-assembly, assembly and/or product. DMU - Data Management Unit Data Manipulation Unit Data Multiplexer Unit V5 users to manipulate and feel a 3D digital mockup Digital MockUp or DMU is a technology that allows product design engineers to replace physical prototypes with virtual ones, using 3D computer graphics techniques. It is also frequently referred to as Digital Prototyping or Virtual Prototyping. in a natural way using their hands. For the first time ever, V5 users will experience realistic force feedback with their entire hand while touching or grasping grasping a similar equine neurosis to windsucking; the horse grasps a fixed object with its teeth, but does not swallow air. a 3D digital part. This innovative way of physically interacting with a 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. enables designers to evaluate the ergonomics ergonomics, the engineering science concerned with the physical and psychological relationship between machines and the people who use them. The ergonomicist takes an empirical approach to the study of human-machine interactions. of an automobile, an aircraft and other complex industrial machinery more intuitively and cost-effectively. Werner Co., the world's leading ladder manufacturer and distributor, will use SolidWorks 3D CAD and SMARTEAM PDM software to dramatically shorten its design cycle time. SolidWorks' powerful modeling capabilities and intuitive user interface will enable Werner Co. to increase product development and quickly migrate from static 2D drawings to 3D solid models. The ability to visualize products in 3D will help Werner Co. troubleshoot potential design flaws, reducing the number of expensive prototypes it builds, and speeding products to customers. Hinterkopf Company, a pioneer in employing automation to streamline production of aluminum cans, and aluminum and plastic tubes, will use SolidWorks 3D CAD software to design the automatic production lines that make everything from plastic toothpaste toothpaste, n See dentifrice. tubes to aluminum aerosol aerosol (âr`əsōl,–sŏl): see colloid. aerosol System of tiny liquid or solid particles evenly distributed in a finely divided state through a gas, usually air. cans used around the world. The company has purchased 30 licenses of SolidWorks software to accelerate product design time, reduce production errors, and fine-tune large assemblies so it can deliver machinery faster than with other CAD packages. It is also using SMARTEAM PDM software to manage all of the design data it generates and COSMOSMotion to analyze those product designs in operation. The Holland Group, the world's largest vehicle connection system manufacturer, has made SolidWorks software its standard for 3D CAD. The Holland Group purchased 28 licenses of SolidWorks to quickly turn out new product designs and match them to their customers' unique tractor and trailer designs. The University of Ottawa ADDITIONAL HIGHLIGHTS SolidWorks 2003 software has been selected by readers of NASA Tech Briefs NASA Tech Briefs is a magazine published by the National Aeronautics and Space Agency of the United States. This magazine is available, in either print form or electronically as PDF files, for free. , the United States' largest circulating cir·cu·late v. cir·cu·lat·ed, cir·cu·lat·ing, cir·cu·lates v.intr. 1. To move in or flow through a circle or circuit: blood circulating through the body. 2. engineering magazine, as Product of the Year for 2002. It is the second time NASA Tech Briefs magazine readers have honored SolidWorks with the award since the company's software was introduced in 1995. SolidWorks is the only company to have received this prestigious award twice. It was announced recently that CIMdata, a PLM Consulting and research firm, completed an ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). study of DELMIA solutions, indicating that companies using DELMIA digital manufacturing solutions are achieving or exceeding their initial objectives and anticipated benefits. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the study, organizations adopting digital manufacturing technologies can expect annual returns of five to ten times their annual investment. The study is based upon information obtained from DELMIA customers in the automotive, aerospace and shipbuilding industries Noun 1. shipbuilding industry - an industry that builds ships industry - the people or companies engaged in a particular kind of commercial enterprise; "each industry has its own trade publications" shipbuilder - a business that builds and repairs ships in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Europe and Asia. Conference call information: The Company will host a teleconference call today at 4:00 PM CET/3:00 PM London/ 10:00 AM New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . The conference call will be available via the Internet by accessing www.3ds.com. A replay of the conference call will be available until May 1, 2003 via the Internet by accessing www.3ds.com. Statements above that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding the Company's objectives for 2003 second quarter revenue, 2003 revenue on a reported basis and 2003 revenue growth in constant currencies, 2003 operating margin trends and 2003 EPS, are 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. (within the meaning of Section 27A of the Securities Act of 1933, as amended). Such forward-looking statements are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to, among other factors: (i) currency fluctuations, (ii) global economic conditions, (iii) market demand for our products and services, (iv) new product developments and technological changes, and (v), our ability to recruit and retain skilled personnel. Unfavorable changes in any of the above or other factors described in the Company's SEC reports, including the Form 20F for the year ended December 31, 2001, which was filed with the SEC on June 20, 2002, could materially affect the Company's financial position or results of operations. ABOUT DASSAULT SYSTEMES As world leader in PLM (Product Lifecycle Management) solutions, the Dassault Systemes group brings value to more than 60,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systemes develops and markets PLM application software and services that support industrial processes and provide a 3D vision of the entire life cycle of products from conception to retirement. Dassault Systemes offering includes PLM integrated solutions for product development (CATIA, ENOVIA, DELMIA, SMARTEAM), 3D solutions (SolidWorks), and 3D components (SPATIAL). Dassault Systemes is listed on the Nasdaq (DASTY) and Euronext Paris (#13065, DSY.PA) stock exchanges. For more information, visit http://www.3ds.com. DASSAULT SYSTEMES KEY FIGURES (in millions of Euro, except per share data) 1st QUARTER
1Q03 1Q02 Percentage
_________________ Variance
_________________
Process-Centric excluding PDM (10)%
revenue 121.6 135.0
Design-Centric revenue 30.5 32.7 (7) %
PDM revenue 17.3 14.8 17%
Revenue 169.4 182.5 (7)%
AMERICAS 51.0 53.9 (5%)
EUROPE 78.4 88.1 (11%)
ASIA 40.0 40.5 (1%)
Operating Income(1) 36.8 42.7 (14)%
Operating Margin (1) 21.7% 23.4%
Net Income (1) 24.2 28.5 (15%)
EPS (1) 0.21 0.24 (13%)
Closing Headcount 3,994 3,855 4%
(1) Excluding acquisition costs DASSAULT SYSTEMES CONSOLIDATED STATEMENTS OF INCOME DATA (in millions of Euro, except per share data) Three Months Ended
March 31, 2003 March 31, 2002
------------------------------------
Revenue
Software 145.1 159.3
Services and Other 24.3 23.2
------------------------------------
Total Revenue EUR 169.4 EUR 182.5
Cost of Revenue
Software 5.8 6.9
Services and Other 21.9 20.8
------------------------------------
Total Cost of Revenue EUR 27.7 EUR 27.7
Gross Profit EUR 141.7 EUR 154.8
Research, Selling, Administrative
and Acquisition expenses
Research and Development 53.6 57.2
Marketing and Sales 39.6 42.4
General and Administrative 11.7 12.5
Acquisition Costs 2.1 3.9
------------------------------------
Total Research, Selling,
Administrative and Acquisition EUR 107.0 EUR 116.0
expenses
====================================
Operating Income EUR 34.7 EUR 38.8
Financial revenue and Other 2.0 4.6
Income before income taxes 36.7 43.4
Income tax expense (14.4) (18.1)
------------------------------------
Net Income EUR 22.3 EUR 25.3
====================================
Basic net income per share (1) EUR 0.20 EUR 0.22
====================================
Diluted net income per share (1) EUR 0.20 EUR 0.21
====================================
Basic weighted average shares
outstanding
(in millions) 113.5 114.0
====================================
Diluted weighted average shares
outstanding (in millions) 114.0 118.1
====================================
(1) Excluding acquisition costs, operating income and net income would have been as follows:
Operating Income EUR 36.8 EUR 42.7
===============================
Net Income EUR 24.2 EUR 28.5
===============================
Diluted net income per share EUR 0.21 EUR 0.24
===============================
DASSAULT SYSTEMES CONSOLIDATED STATEMENT OF INCOME DATA PERCENTAGE VARIANCE (EXCLUDING ACQUISITION COSTS) (in millions of Euro, except per share data) Excluding acquisition costs, the consolidated statements of income data would have been as follows: Three Months Ended
March 31, March 31, Variation
2003 2002 %
-------------------------------------
Revenue
Software 145.1 159.3 (8.9%)
Services and Other 24.3 23.2 4.7%
--------------------------
Total Revenue EUR 169.4 EUR 182.5 (7.2%)
Cost of Revenue
Software 5.8 6.9 (15.9%)
Services and Other 21.9 20.8 5.3%
--------------------------
Total Cost of Revenue EUR 27.7 EUR 27.7 0.0%
Gross Profit EUR 141.7 EUR 154.8 (8.5%)
Research, Selling, Administrative
Research and Development 53.6 57.2 (6.3)%
Marketing and Sales 39.6 42.4 (6.6%)
General and Administrative 11.7 12.5 (6.4)%
--------------------------
Total Research, Selling, EUR 104.9 EUR 112.1 (6.4%)
Administrative
=====================================
Operating Income EUR 36.8 EUR 42.7 (13.8%)
Financial revenue and Other 2.0 4.6 (56.5%)
Income before income taxes 38.8 47.3 (18.0%)
Income tax expense (14.6) (18.8) N/S
Net Income EUR 24.2 EUR 28.5 (15.1%)
=====================================
Diluted net income per share EUR 0.21 EUR 0.24 (12.5%)
=====================================
Diluted weighted average shares
outstanding (in millions) 114.0 118.1
DASSAULT SYSTEMES CONDENSED con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. CONSOLIDATED BALANCE SHEETS consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (in millions of Euro)
March 31, 2003 December 31, 2002
----------------------------------
ASSETS
Cash and short-term investments 459.6 388.4
Accounts receivable, net 139.7 229.5
Other assets 301.8 302.3
----------------------------------
Total assets EUR 901.1 EUR 920.2
LIABILITIES
AND SHAREHOLDERS' EQUITY
Total liabilities 286.2 291.9
Shareholders' equity 614.9 628.3
----------------------------------
Total liabilities and
shareholders' equity EUR 901.1 EUR 920.2
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