Dassault Systemes Reports Excellent Second Quarter with Revenue, Operating Margin and EPS Above Targets.PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. -- 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) (Paris: DSY DSY Drum Storage Yard ), a world leader in 3D and 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, reported financial results for the second quarter and six months ended June June: see month. 30, 2006. Second Quarter Highlights --GAAP total revenue up 29% to 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. 280.0 million; GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). software revenue up 32% to EUR 238.0 million; GAAP 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. of EUR 0.25 --Non-GAAP total revenue up 32% to EUR 286.0 million (up 33% in constant currencies); --Non-GAAP software revenue up 35% to EUR 244.0 million, (up 36% in constant currencies); excluding ABAQUS Abaqus is a commercial software package for finite element analysis developed by SIMULIA, a brand of Dassault Systemes S.A. The Abaqus product suite consists of three core products: Abaqus/Standard, Abaqus/Explicit and Abaqus/CAE. and MatrixOne, Non-GAAP software revenue up 16% (17% in constant currencies) --Non-GAAP EPS up 12% to EUR 0.37 on operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 24.5% --MatrixOne achieves break-even in first period following acquisition --Non-GAAP PLM revenue up 35% (36% in constant currencies) --DS raises 2006 EPS and constant currency revenue growth objectives; reconfirms 2006 operating margin objective Bernard Charles Bernard Charles is the CEO of Dassault Systemes. References
Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased strength, with 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. results providing a solid foundation. The strong performance of our sales organization and partners, including IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , business partners and the 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). channel, contributed to this excellent quarter. "We continue to see good dynamics for our business in Asia, where revenues increased 49% in constant currencies for the second quarter. In particular, the level of interest in PLM remains high in Asia and we see this continuing as evidenced by record attendance at our major user conferences in Japan and China in July July: see month. . "In summary, DS is very well positioned for growth in 2006 and the coming years as the leading provider in PLM, which is mission critical for product development performance and innovation. We have continued to gain market share in the first half of 2006 and with our recent acquisitions of both ABAQUS and MatrixOne we are further expanding our addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market. Working together with our customers and partners, we expect to continue to extend the value PLM brings to multiple industries." Thibault de Tersant, Executive Vice President and CFO See Chief Financial Officer. of Dassault Systemes, commented, "MatrixOne is delivering on all of our acquisition objectives. MatrixOne's performance exceeded our targets and it is already at break-even in its first period of operation as a part of Dassault Systemes. And our plans to achieve cost savings are solidly on track." Second Quarter Financial Results Dassault Systemes completed the acquisition of ABAQUS, Inc ABAQUS, Inc. is an engineering simulation software (CAE) vendor. Formerly known as Hibbitt, Karlsson & Sorensen, Inc., (HKS), the company was founded in 1978 by Dr. David Hibbitt, Dr. Bengt Karlsson and Dr. . in October October: see month. , 2005 and MatrixOne Inc. in May, 2006 and has accounted for these acquisitions pursuant to U.S. GAAP (hereinafter here·in·af·ter adv. In a following part of this document, statement, or book. hereinafter Adverb Formal or law from this point on in this document, matter, or case Adv. 1. GAAP) purchase accounting rules. Certain supplementary information is provided in this press release which is not in conformity with GAAP. See tables for a reconciliation of 2006 and 2005 second quarter and six month GAAP and Non-GAAP financial data. Revenue GAAP Revenue Discussion Revenue growth reflected broad-based strength across DS software applications. GAAP total revenue increased 29% to EUR 280.0 million for the 2006 second quarter, compared to EUR 217.3 million in the year-ago quarter. GAAP software revenue increased 32% to EUR 238.0 million in the recently completed quarter. Service and other revenue increased 15% to EUR 42.0 million in the 2006 second quarter, compared to EUR 36.4 million in the 2005 second quarter. Non-GAAP Revenue Discussion In the 2006 second quarter, total revenue increased 32% to EUR 286.0 million and increased 33% in constant currencies compared to the year-ago period on strong growth in software revenue. Software revenue in the 2006 second quarter increased 35% to EUR 244.0 million and increased 36% in constant currencies. Excluding ABAQUS and MatrixOne, software revenue increased 17% in constant currencies on broad strength. In the 2005 second quarter, software revenue was EUR 180.9 million. Software and service revenue represented 85% and 15% respectively of Non-GAAP total revenue in the 2006 second quarter. New CATIA and SolidWorks seats licensed increased 15% to 20,485 seats in the 2006 second quarter, compared to 17,755 in the year-ago period. For the 2006 second quarter, PLM revenue increased 35% to EUR 229.9 million, and increased 36% in constant currencies, up from EUR 170.7 million in the year-ago quarter. ENOVIA revenue increased 88% and 90% in constant currencies, and excluding MatrixOne, ENOVIA revenue grew 19% in constant currencies. Underlying the strong growth of PLM was CATIA, with a good level of activity. In particular, CATIA seats licensed increased 12% to 9,100 in the 2006 second quarter. ABAQUS had a solid quarter with revenue of EUR 23.2 million and MatrixOne's revenue totaled EUR 17.8 million, both before the impact of the deferred revenue write-downs required under GAAP purchase accounting treatment. ABAQUS and MatrixOne software applications are included in PLM results. SolidWorks revenue increased 20% to EUR 56.1 million and increased 22% in constant currencies in the recently completed quarter, compared to EUR 46.6 million in the 2005 second quarter. SolidWorks seats licensed increased 19% to 11,385 licenses for the second quarter. From a regional perspective, 2006 second quarter revenue in 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). increased 35%, in the Americas A·mer·i·cas , theSee America. it increased 20% (19% in constant currencies) and in Asia, revenue increased 42% (49% in constant currencies). 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. and Margin and EPS GAAP earnings 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 decreased 22% to EUR 0.25 in the 2006 second quarter, compared to EUR 0.32 in the year-ago period. GAAP operating income decreased 9% to EUR 49.7 million (17.8% operating margin) in the 2006 second quarter, compared to EUR 54.7 million in the 2005 second quarter (25.2% operating margin). Non-GAAP earnings per diluted share increased 12% to EUR 0.37 in the 2006 second quarter, up from EUR 0.33 in the 2005 second quarter. Non-GAAP operating income increased 27% to EUR 70.2 million in the 2006 second quarter, compared to EUR 55.2 million in the year-ago quarter. The Non-GAAP operating margin was 24.5% in the 2006 second quarter, ahead of the Company's stated objective. This was a solid performance compared to the Non-GAAP operating margin of 25.4% in the year-ago quarter, given the dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. from recent acquisitions. Other financial highlights Net operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. was EUR 63.7 million and EUR 164.9 million for the second quarter and six months ended June 30, 2006, respectively. At June 30, 2006, cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments totaled EUR 473.5 million and long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. was EUR 202.9 million. In May 2006, DS finalized See finalization. the acquisition of MatrixOne Inc. for an all cash purchase price of $410 million in aggregate, before reflecting a cash balance of US$93 million and estimated tax Federal and state tax laws require a quarterly payment of estimated taxes due from corporations, trusts, estates, non-wage employees, and wage employees with income not subject to withholding. benefits. Second quarter customer highlights included, among others: --In a separate press release today, DS is announcing that Airbus is standardizing product development processes on CATIA and ENOVIA VPLM VPLM Virtual Product Lifecycle Management for all new programs. --In a separate press release today, DS is announcing that Ford Motor Company has extended its multi-year contract, which designates CATIA V5 as the global design and engineering standard for all new vehicle and powertrain systems development. --New PLM wins and reorders included Legrand Legrand is a surname which may refer to:
Either of two unmanned U.S. spacecraft launched by NASA in 1975. After nearly yearlong journeys, Vikings 1 and 2 entered orbits around Mars and released landers that touched down on the planet and relayed measurements of properties of its atmosphere and soil, as well in Consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and , Mecasonic and Tokyu Tokyu may refer to:
--ENOVIA MatrixOne closed 18 transactions in the Semiconductor sector, including significant orders from Qualcomm (QUALCOMM Incorporated, San Diego, CA, www.qualcomm.com) A wireless communications and software company founded in 1985 by Dr. Irwin Jacobs. Originally involved in satellite tracking and fleet management, QUALCOMM has become widely known for its CDMA technology used in cellphones and and Agere, and expanded its presence in the apparel sector with Luxottica Luxottica Group S.p.A. (ISE: IT0001479374, NYSE: LUX) is a producer and retailer of eyewear, headquartered in Agordo, Veneto, Italy.The revenue of Luxottica is 4.47 billion € Corporate background Luxottica Group S.p.A. and Quiksilver
Quiksilver, Inc., is one of the world's largest manufacturers of surfwear and other boardsport-related equipment based in Huntington Beach, California. . --SolidWorks wins included Fuji Xerox Fuji Xerox Co., Ltd. (富士ゼロックス株式会社 Co. in E&E in Japan, and in F&A, Comact Equipment in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Hoffman Enclosures 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. , Knipex Knipex is a German manufacturer of tools. They manufacture pliers, cutters, crimpers, and wire strippers. They also offer a broad program of high-voltage insulated tools. The company is a family business and was founded in 1882. in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and Metal Saur n. 1. Soil; dirt; dirty water; urine from a cowhouse. in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . DS completed the acquisition of MatrixOne ahead of schedule and introduced its PLM Collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. Environment Portfolio On May 11, 2006, DS announced the completion of the acquisition of MatrixOne Inc. and the introduction of its new PLM Collaborative Environment portfolio under the ENOVIA brand name. --ENOVIA VPLM - 3D Collaborative Virtual Product Lifecycle Management of highly complex product, resource and manufacturing processes in medium and large extended enterprises. --ENOVIA MatrixOne - 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. business processes for enterprises across a wide range of industries, and including Synchronicity synchronicity (singˈ·kr for semiconductor design data management. --ENOVIA SmarTeam - Collaborative Product Data Management for small and mid-sized enterprises, engineering departments of larger organizations, and across supply chains. Cash dividend approved by shareholders at Annual Shareholders' Meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. At the Annual Shareholders' Meeting held on June 14, 2006, DS' shareholders approved the payment of an annual cash dividend equivalent to EUR 0.42 per share, representing EUR 48 million in the aggregate, for the fiscal year ended December December: see month. 31, 2005. Strategy, Technology, Customers and Partnerships In June, DS unveiled its V5 SOA (1) (Start Of Authority) The first record in a DNS zone file. See DNS records. (2) (Service Oriented Architecture) The modularization of business functions for greater flexibility and reusability. strategy, demonstrating the Company's commitment to extend the benefits of PLM solutions to new markets as well as new types of users and communities. V5 SOA is the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to for DS and its partners to deliver fully collaborative PLM services on demand. V5 SOA is the technical foundation for DS' PLM brands and partners' solutions moving forward, designed to bridge the gap between PLM solutions and existing enterprise 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 . DS introduced ENOVIA 3D Live beta version A pre-shipping release of hardware or software that has gone through alpha test. A beta version of software is supposed to be very close to the final product, but, in practice, it is more a way of getting users to test the software in the first place under real conditions. , the first 3D Collaborative Intelligence Collaborative Intelligence, collaborative intelligence quotient. A measure of the collaborative ability of a group or entity. Knowledge derived from collaborative efforts is increasing proportionally to the reach of the world wide web, collaborative groupware like solution, exploiting DS V5 SOA architecture for online applications. Via an intuitive interface, ENOVIA 3D Live enables any individual to instantly search and navigate (1) "Surfing the Web." To move from page to page on the Web. (2) To move through the menu structure in a software application. any PLM information, regardless of location, source or format. SolidWorks unveiled SolidWorks 2007, powered by revolutionary "SWIFT(TM)" technology. In addition to more than 200 new features, this latest version of the leading 3D CAD CAD: see computer-aided design. (Computer-Aided Design) Using computers to design products. CAD systems are high-speed workstations or desktop computers with CAD software. software introduces SolidWorks Intelligent Feature Technology ("SWIFT(TM)"), which for the first time puts expert-level techniques for 3D CAD's most challenging design operations in the hands of every user. ENOVIA MatrixOne ENOVIA MatrixOne or MatrixOne is a provider of Internet business collaboration software. The company is a subsidiary of Dassault Systemes. MatrixOne specializes in Product Lifecycle Management (PLM). Most customers of MatrixOne are big Fortune 1000 companies. announced the latest updates to the MatrixOne Medical Device Accelerator accelerator: see particle accelerator. (1) A key combination such as Alt-G or Ctrl-Shift H that is used to activate a task. (2) An incubator that expects to develop the company considerably faster than normal. See incubator. . The MatrixOne MDA (1) (Monochrome Display Adapter) The first IBM PC monochrome video display standard for text. Due to its lack of graphics, MDA cards were often replaced with Hercules cards, which provided both text and graphics. See PC display modes and Hercules Graphics. manages Quality System Regulation/ISO-regulated design processes, projects, documents and data, and is the only medical device-tailored solution built on an enterprise-class PLM platform that has been proven effective at the industry's top three device manufacturers. First Half 2006 Financial Summary --GAAP total revenue of EUR 532.1 million, up 28% as reported for first half --Non-GAAP total revenue of EUR 542.0 million, up 30% and 29% in constant currencies --Non-GAAP revenue excluding ABAQUS and MatrixOne up 14% in constant currencies --GAAP software revenue of EUR 451.1 million, up 30% --Non-GAAP software revenue of EUR 461.0 million, up 32% and 31% in constant currencies --Non-GAAP software revenue excluding ABAQUS and MatrixOne up 17% and up 16% in constant currencies --GAAP EPS of EUR 0.51; Non-GAAP EPS up 20% to EUR 0.71 with operating margin of 24.1% Business Outlook Thibault de Tersant, Executive Vice President and CFO, stated, "Business activity was strong in the second quarter and we continue to see stronger activity for the second half despite some potential signs of softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. of the economic environment globally. Therefore, on a constant currency basis, we are raising our 2006 revenue growth objective to about 27-28%, compared to our previous assumption of 25-26%, reflecting higher expected activity of about EUR 15 million for the full year, including the second quarter overachievement o·ver·a·chieve intr.v. o·ver·a·chieved, o·ver·a·chiev·ing, o·ver·a·chieves To perform better or achieve more success than expected. o . At the same time, we are reconfirming our operating margin objective and increasing our EPS objective slightly. "Due to the volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. currency environment, we believe it is prudent to update our exchange rate assumptions for the US dollar and Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. . The higher activity level expected for the full year and more conservative currency assumptions largely offset each other on a reported revenue basis." --Third quarter Non-GAAP total revenue of about EUR 280-285 million, Non-GAAP EPS of about EUR 0.33-0.34 and Non-GAAP operating margin of about 22.0%; --2006 Non-GAAP total revenue objective of about EUR 1.175-1.185 billion, representing 27-28% growth in constant currencies; --2006 Non-GAAP operating margin of about 27.0%; --2006 Non-GAAP EPS of about EUR 1.77-1.79; +11-13% growth; --Objectives based upon US$1.30 (previously US$1.25) per EUR 1.00 and JPY JPY In currencies, this is the abbreviation for the Japanese Yen. 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. 145 (previously JPY 140) per EUR 1.00 exchange rate assumptions for the third and fourth quarters of 2006.
Endnotes:
1. All comparative figures are given on a year-over-year basis
unless specified otherwise. All EPS figures refer to fully diluted
earnings per share, unless otherwise noted.
2. All financial information is unaudited and reported in
accordance with U.S. generally accepted accounting principles
(U.S. GAAP). Additional financial information is also presented
that is not in conformity with U.S. GAAP, in particular the
presentation of revenue before deferred revenue write-downs, and
operating income, operating margin and earnings per share before
deferred revenue write-downs and excluding acquisition costs
(acquisition costs are primarily comprised of technology and other
acquired intangible assets amortization in addition to other
acquisition-related costs) and share-based compensation expenses.
The Company believes this information, which is not in conformity
with U.S. GAAP, is helpful supplemental information in order to
better understand its past and future performance. In addition,
the Company's management uses this information in its planning.
This information provided by the Company may not be comparable to
similarly titled measures employed by other companies. The Company
has provided in the tables to this press release and on its
website http://www.3ds.com/corporate/investors/ reconciliations
between U.S. GAAP and Non-GAAP figures.
3. The Company uses constant currency revenue growth to evaluate
its financial performance in comparison to prior periods and as a
measure of expected growth in planning and setting objectives for
future periods. The Company believes this measure is an important
indicator of the Company's progress and outlook because it
provides a better gauge of the level of change in the business
activity as it eliminates any changes arising from currency
fluctuations. The Company believes the presentation of this
measure is relevant and useful for investors because it allows
investors to view revenue growth in a manner similar to the method
used by the Company's management, helps improve investors' ability
to understand the Company's revenue growth, and makes it easier to
compare the Company's results with other companies, including
competitors, whose reporting currency may be different from
Dassault Systemes. Constant currency revenue growth, as calculated
by the Company, may not be comparable to similarly titled measures
employed by other companies.
Conference call information Dassault Systemes will host a teleconference call today, Thursday Thursday: see week. , July 27, 2006 at 3:00 PM CET/2:00 PM London/9:00 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 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 by accessing http://www.3ds.com/corporate/investors/. Please go to the website at least fifteen minutes prior to the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. The webcast teleconference will be archived for 30 days. Financial information to be discussed in the call will be available on the Company's website prior to commencement of the teleconference at http://www.3ds.com/corporate/investors/. Additional investor information can be accessed at http://www.3ds.com/corporate/investors/ or by calling Dassault Systemes' Investor Relations Investor relations The process by which the corporation communicates with its investors. at 33.1.40.99.69.24. Statements above that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding our: a) 2006 revenue growth objective in constant currencies, calculation of a 2006 revenue range, 2006 operating margin outlook and 2006 EPS growth objective, all such figures before deferred revenue write-downs and excluding acquisition costs and share-based payments as applicable; and b) third quarter 2006 revenue objective range, EPS objective and operating margin outlook, all three figures before deferred revenue write-downs and excluding acquisition costs and share-based payments, as applicable 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 21E of the 1934 Securities Exchange Act, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. ). 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, particularly the value of the U.S. dollar or Japanese yen with respect to the euro; (ii) reduced corporate spending on information technology as a result of changing economic or business conditions that could negatively affect market demand for our products and services; (iii) difficulties or adverse changes affecting our partners or our relationships with our partners, including our longstanding Adj. 1. longstanding - having existed for a long time; "a longstanding friendship"; "the longstanding conflict" long - primarily temporal sense; being or indicating a relatively great or greater than average duration or passage of time or a duration as specified; , strategic partner, IBM; (iv) new product developments and technological changes; (v) errors or defects in our products; (vi) growth in market share by our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; and (vii) the realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of any risks related to the integrations of ABAQUS and MatrixOne or any other newly acquired company and internal reorganizations. Unfavorable changes in any of the above or other factors described in the Company's SEC reports, including the Form 20-F for the year ended December 31, 2005, which was filed with the SEC on June 30, 2006, could materially affect the Company's financial position or results of operations. About Dassault Systemes As world leader in 3D and Product Lifecycle Management (PLM) solutions, the Dassault Systemes group brings value to more than 90,000 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 conception /con·cep·tion/ (kon-sep´shun) 1. an imprecise term denoting the formation of a viable zygote.concep´tive 2. concept. con·cep·tion n. 1. to maintenance. The Dassault Systemes portfolio consists of CATIA for designing the virtual product - SolidWorks for 3D mechanical design - DELMIA DELMIA Digital Enterprise Lean Manufacturing Interactive Application for virtual production - SIMULIA for virtual testing and ENOVIA for global collaborative lifecycle management, including ENOVIA VPLM, ENOVIA MatrixOne and ENOVIA SmarTeam. Dassault Systemes is listed on the Nasdaq (DASTY) and 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.PA) stock exchanges. For more information, visit: http://www.3ds.com CATIA, DELMIA, ENOVIA, SIMULIA and SolidWorks are registered trademarks of Dassault Systemes or its subsidiaries in the US and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. other countries. (Tables to follow)
DASSAULT SYSTEMES
NON-GAAP KEY FIGURES
Non-GAAP data exclude the effect of adjusting the carrying value
of acquired companies' deferred revenue, amortization of acquired
intangible assets and share-based compensation expenses.
2nd QUARTER
in millions of Euro, except per share data, headcount
and exchange rates.
2Q06 2Q05 Variation
-------------------------------------
PLM excluding ENOVIA 182.0 145.2 25%
ENOVIA 47.9 25.5 88%
SolidWorks 56.1 46.6 20%
Revenue 286.0 217.3 32%
Americas 84.2 70.4 20%
Europe 137.2 101.5 35%
Asia 64.6 45.4 42%
Operating Income 70.2 55.2 27%
Operating Margin 24.5% 25.4%
Net Income 43.4 38.1 14%
EPS 0.37 0.33 12%
Closing headcount 6,623 4,944 34%
Average Rate USD per Euro 1.26 1.26 0%
Average Rate JPY per Euro 143.8 135.5 6%
For U.S. GAAP figures please refer to reconciliation tables.
HALF YEAR
in millions of Euro, except per share data, headcount
and exchange rates.
1H06 1H05 Variation
---------------------------------
PLM excluding ENOVIA 359.4 281.7 28%
ENOVIA 74.2 48.3 54%
SolidWorks 108.4 86.5 25%
Revenue 542.0 416.5 30%
Americas 161.4 125.9 28%
Europe 250.4 195.4 28%
Asia 130.2 95.2 37%
Operating Income 130.7 100.6 30%
Operating Margin 24.1% 24.2%
Net Income 84.1 69.2 22%
EPS 0.71 0.59 20%
Average Rate USD per Euro 1.23 1.29 (4%)
Average Rate JPY per Euro 142.2 136.2 4%
For U.S. GAAP figures please refer to reconciliation tables.
DASSAULT SYSTEMES
CONSOLIDATED STATEMENT OF INCOME
DATA PREPARED IN ACCORDANCE WITH U.S. GAAP
(in millions of Euro, except per share data)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
---------- ---------- ----------- ----------
New licenses revenue 114.1 81.9 203.2 155.6
Recurring licenses and
product development
revenue 123.9 99.0 247.9 192.5
---------- ---------- ----------- ----------
Software revenue 238.0 180.9 451.1 348.1
Service and other
revenue 42.0 36.4 81.0 68.4
---------- ---------- ----------- ----------
Total Revenue (1) EUR 280.0 EUR 217.3 EUR 532.1 EUR 416.5
Software 12.2 6.6 23.1 12.6
Service and other 36.1 27.3 67.8 55.4
---------- ---------- ----------- ----------
Total Cost of Revenue EUR 48.3 EUR 33.9 EUR 90.9 EUR 68.0
Gross Profit EUR 231.7 EUR 183.4 EUR 441.2 EUR 348.5
Research and
Development 75.3 60.4 147.8 117.9
Marketing and Sales 73.2 53.3 138.7 102.4
General and
Administrative 21.3 14.5 38.4 27.6
Amortization of
acquired intangibles 12.2 0.5 19.4 0.8
---------- ---------- ----------- ----------
Total Research,
Selling,
Administrative and
Acquisition expenses EUR 182.0 EUR 128.7 EUR 344.3 EUR 248.7
========== ========== =========== ==========
Operating Income (1) EUR 49.7 EUR 54.7 EUR 96.9 EUR 99.8
Financial revenue and
Other (4.0) 3.7 (2.4) 5.8
---------- ---------- ----------- ----------
Income before income
taxes 45.7 58.4 94.5 105.6
Income tax expense (16.3) (20.6) (33.8) (36.9)
---------- ---------- ----------- ----------
Net Income (1) EUR 29.4 EUR 37.8 EUR 60.7 EUR 68.7
========== ========== =========== ==========
Basic net income per
share EUR 0.26 EUR 0.34 EUR 0.53 EUR 0.61
========== ========== =========== ==========
Diluted net income per
share (1) EUR 0.25 EUR 0.32 EUR 0.51 EUR 0.59
========== ========== =========== ==========
Basic weighted average
shares outstanding (in
millions) 115.1 113.7 115.0 113.6
========== ========== =========== ==========
Diluted weighted
average shares
outstanding (in
millions) 118.6 116.9 119.2 116.6
(1) Non-GAAP total revenue, operating income, net income and
diluted EPS would have been as follows:
Total Revenue EUR 286.0 EUR 217.3 EUR 542.0 EUR 416.5
========== =================================
Operating
Income EUR 70.2 EUR 55.2 EUR 130.7 EUR 100.6
========== =================================
Net Income EUR 43.4 EUR 38.1 EUR 84.1 EUR 69.2
========== =================================
Diluted net
income per
share EUR 0.37 EUR 0.33 EUR 0.71 EUR 0.59
========== =================================
Supplemental Disclosures Regarding Non-GAAP Financial Information: Excluding the effect of adjusting the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of acquired companies' deferred revenue, amortization of acquired intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and share-based compensation expenses. The following table sets forth the Company's Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statement of Income Data excluding amortization of acquired intangible assets, the effect of adjusting the carrying value of acquired companies' deferred revenue, and share-based compensation expenses for the three months and six months ended June 30, 2006. In particular, the table presents revenue, operating income, operating margin and earnings per share excluding the effect of adjusting the carrying value of acquired companies' deferred revenue, amortization of acquired intangible assets (amortization of acquired intangible assets are primarily comprised of technology amortization in addition to other acquisition-related amortization), and share-based compensation expenses. The Company uses these Non-GAAP measures, among other things, to evaluate the Company's operating performance and for planning and setting objectives for future periods. The Company believes these Non-GAAP measures are useful to investors because they provide an alternative method for measuring the operating performance of the Company's business by isolating i·so·late tr.v. i·so·lat·ed, i·so·lat·ing, i·so·lates 1. To set apart or cut off from others. 2. To place in quarantine. 3. the effect of adjusting the carrying value of acquired companies' deferred revenue, amortization of acquired intangible assets, and share-based compensation expenses, which do not impact the underlying business. In addition, these measures are among the primary measures used externally by analysts for purposes of valuation and for comparing operating performance of the Company to other companies in the industry. Since these measures of performance are not calculated 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 U.S. GAAP, they should not be considered in isolation of, or as a substitute for U.S. GAAP revenue, operating income, operating margin and earnings per share, as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of operating performance.
DASSAULT SYSTEMES
NON-GAAP CONSOLIDATED STATEMENT OF INCOME
(in millions of Euro, except per share data)
Non-GAAP data exclude the effect of adjusting the carrying value
of acquired companies' deferred revenue, amortization of acquired
intangible assets, and share-based compensation expenses.
Three Months Ended
June 30, 2006 June 30, 2005 Variation
--------------- --------------- ----------
New licenses revenue 114.1 81.9 39.3%
Recurring licenses and
product development
revenue 129.9 99.0 31.2%
--------------- ---------------
Software revenue 244.0 180.9 34.9%
Service and other revenue 42.0 36.4 15.4%
--------------- ---------------
Total Revenue EUR 286.0 EUR 217.3 31.6%
Software 12.2 6.6 84.8%
Service and other 35.9 27.3 31.5%
--------------- ---------------
Total Cost of Revenue EUR 48.1 EUR 33.9 41.9%
Gross Profit EUR 237.9 EUR 183.4 29.7%
Research and Development 73.9 60.4 22.4%
Marketing and Sales 72.9 53.3 36.8%
General and
Administrative 20.9 14.5 44.1%
--------------- ---------------
Total Research, Selling,
Administrative. EUR 167.7 EUR 128.2 30.8%
=============== ===============
Operating Income EUR 70.2 EUR 55.2 27.2%
Financial revenue and
Other (4.0) 3.7
--------------- ---------------
Income before income
taxes 66.2 58.9 12.4%
Income tax expense (22.8) (20.8)
--------------- ---------------
Net Income EUR 43.4 EUR 38.1 13.9%
=============== ===============
Diluted net income per
share EUR 0.37 EUR 0.33 12.1%
=============== ===============
Diluted weighted average
shares outstanding (in
millions) 118.6 116.9
DASSAULT SYSTEMES
CONSOLIDATED STATEMENT OF INCOME
RECONCILIATIONS NON-GAAP / U.S. GAAP
(in millions of Euro, except per share data)
Three Months Ended
June 30, 2006
---------------------------------------------
U.S. GAAP Adjustments (1) Non-GAAP
---------------------------------------------
New licenses revenue 114.1 114.1
Recurring licenses and
product development
revenue 123.9 6.0 129.9
--------------- ---------------
Software revenue 238.0 244.0
Service and other
revenue 42.0 42.0
--------------- ---------------
Total Revenue EUR 280.0 EUR 286.0
Software 12.2 12.2
Service and other 36.1 (0.2) 35.9
--------------- ---------------
Total Cost of Revenue EUR 48.3 EUR 48.1
Gross Profit EUR 231.7 EUR 237.9
Research and Development 75.3 (1.4) 73.9
Marketing and Sales 73.2 (0.3) 72.9
General and
Administrative 21.3 (0.4) 20.9
Amortization of acquired
intangibles 12.2 (12.2) -
--------------- ---------------
Total Research, Selling,
Administrative and EUR 182.0 EUR 167.7
Acquisition expenses
=============== ===============
Operating Income EUR 49.7 EUR 70.2
Financial revenue and
Other (4.0) (4.0)
--------------- ---------------
Income before income
taxes 45.7 66.2
Income tax expense (16.3) (6.5) (22.8)
--------------- ---------------
Net Income EUR 29.4 EUR 43.4
=============== ===============
Diluted net income per EUR 0.25 EUR 0.37
share
=============== ===============
Diluted weighted average
shares outstanding (in
millions) 118.6 118.6
June 30, 2005
---------------------------------------------
U.S. GAAP Adjustments (1) Non-GAAP
---------------------------------------------
New licenses revenue 81.9 81.9
Recurring licenses and
product development
revenue 99.0 99.0
--------------- ---------------
Software revenue 180.9 180.9
Service and other
revenue 36.4 36.4
--------------- ---------------
Total Revenue EUR 217.3 EUR 217.3
Software 6.6 6.6
Service and other 27.3 27.3
--------------- ---------------
Total Cost of Revenue EUR 33.9 EUR 33.9
Gross Profit EUR 183.4 EUR 183.4
Research and Development 60.4 60.4
Marketing and Sales 53.3 53.3
General and
Administrative 14.5 14.5
Amortization of acquired
intangibles 0.5 (0.5) -
--------------- ---------------
Total Research, Selling,
Administrative and
Acquisition expenses EUR 128.7 EUR 128.2
=============== ===============
Operating Income EUR 54.7 EUR 55.2
Financial revenue and
Other 3.7 3.7
--------------- ---------------
Income before income
taxes 58.4 58.9
Income tax expense (20.6) (0.2) (20.8)
--------------- ---------------
Net Income EUR 37.8 EUR 38.1
=============== ===============
Diluted net income per EUR 0.32 EUR 0.33
share
=============== ===============
Diluted weighted average
shares outstanding (in
millions) 116.9 116.9
(1) Adjustments include the effect of adjusting the carrying value
of acquired companies' deferred revenue, amortization of acquired
intangible assets and share-based compensation expenses.
DASSAULT SYSTEMES
NON-GAAP CONSOLIDATED STATEMENT OF INCOME
(in millions of Euro, except per share data)
Non-GAAP data exclude the effect of adjusting the carrying value
of acquired companies' deferred revenue, amortization of acquired
intangible assets, and share-based compensation expenses.
Six Months ended
June 30, 2006 June 30, 2005 Variation
--------------- --------------- ----------
New licenses revenue 203.2 155.6 30.6%
Recurring licenses and
product development
revenue 257.8 192.5 33.9%
--------------- ---------------
Software revenue 461.0 348.1 32.4%
Service and other revenue 81.0 68.4 18.4%
--------------- ---------------
Total Revenue EUR 542.0 EUR 416.5 30.1%
Software 23.1 12.6 83.3%
Service and other 67.3 55.4 21.5%
--------------- ---------------
Total Cost of Revenue EUR 90.4 EUR 68.0 32.9%
Gross Profit EUR 451.6 EUR 348.5 29.6%
Research and Development 144.9 117.9 22.9%
Marketing and Sales 138.1 102.4 34.9%
General and Administrative 37.9 27.6 37.3%
--------------- ---------------
Total Research, Selling, EUR 320.9 EUR 247.9
Administrative 29.4%
=============== ===============
Operating Income EUR 130.7 EUR 100.6 29.9%
Financial revenue and
Other (2.4) 5.8
--------------- ---------------
Income before income taxes 128.3 106.4 20.6%
Income tax expense (44.2) (37.2)
--------------- ---------------
Net Income EUR 84.1 EUR 69.2 21.5%
=============== ===============
Diluted net income per EUR 0.71 EUR 0.59
share 20.3%
=============== ===============
Diluted weighted average
shares outstanding (in
millions) 119.2 116.6
DASSAULT SYSTEMES
CONSOLIDATED STATEMENT OF INCOME
RECONCILIATIONS NON-GAAP / U.S. GAAP
(in millions of Euro, except per share data)
Six Months ended
June 30, 2006
---------------------------------------------
U.S. GAAP Adjustments (1) Non-GAAP
---------------------------------------------
New licenses revenue 203.2 203.2
Recurring licenses and
product development
revenue 247.9 9.9 257.8
--------------- ---------------
Software revenue 451.1 461.0
Service and other
revenue 81.0 81.0
--------------- ---------------
Total Revenue EUR 532.1 EUR 542.0
Software 23.1 23.1
Service and other 67.8 (0.5) 67.3
--------------- ---------------
Total Cost of Revenue EUR 90.9 EUR 90.4
Gross Profit EUR 441.2 EUR 451.6
Research and Development 147.8 (2.9) 144.9
Marketing and Sales 138.7 (0.6) 138.1
General and
Administrative 38.4 (0.5) 37.9
Amortization of acquired
intangibles 19.4 (19.4) -
--------------- ---------------
Total Research, Selling,
Administrative and
Acquisition expenses EUR 344.3 EUR 320.9
=============== ===============
Operating Income EUR 96.9 EUR 130.7
Financial revenue and
Other (2.4) (2.4)
--------------- ---------------
Income before income
taxes 94.5 128.3
Income tax expense (33.8) (10.4) (44.2)
--------------- ---------------
Net Income EUR 60.7 EUR 84.1
=============== ===============
Diluted net income per
share EUR 0.51 EUR 0.71
=============== ===============
Diluted weighted average
shares outstanding (in
millions) 119.2 119.2
June 30, 2005
---------------------------------------------
U.S. GAAP Adjustments (1) Non-GAAP
---------------------------------------------
New licenses revenue 155.6 155.6
Recurring licenses and
product development
revenue 192.5 192.5
--------------- ---------------
Software revenue 348.1 348.1
Service and other
revenue 68.4 68.4
--------------- ---------------
Total Revenue EUR 416.5 EUR 416.5
Software 12.6 12.6
Service and other 55.4 55.4
--------------- ---------------
Total Cost of Revenue EUR 68.0 EUR 68.0
Gross Profit EUR 348.5 EUR 348.5
Research and Development 117.9 117.9
Marketing and Sales 102.4 102.4
General and
Administrative 27.6 27.6
Amortization of acquired
intangibles 0.8 (0.8) -
--------------- ---------------
Total Research, Selling,
Administrative and
Acquisition expenses EUR 248.7 EUR 247.9
=============== ===============
Operating Income EUR 99.8 EUR 100.6
Financial revenue and
Other 5.8 5.8
--------------- ---------------
Income before income
taxes 105.6 106.4
Income tax expense (36.9) (0.3) (37.2)
--------------- ---------------
Net Income EUR 68.7 EUR 69.2
=============== ===============
Diluted net income per
share EUR 0.59 EUR 0.59
=============== ===============
Diluted weighted average
shares outstanding (in
millions) 116.6 116.6
(1) Adjustments include the effect of adjusting the carrying value
of acquired companies' deferred revenue, amortization of acquired
intangible assets and share-based compensation expenses.
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions of Euro)
June 30, 2006 December 31, 2005
---------------- --------------------
ASSETS
Cash and short-term investments 473.5 379.9
Accounts receivable, net 249.5 287.8
Other assets 1,041.6 745.6
---------------- --------------------
Total assets EUR 1,764.6 EUR 1,413.3
LIABILITIES
AND SHAREHOLDERS' EQUITY
Long-term debt 202.9 1.5
Other liabilities 566.8 425.7
Shareholders' equity 994.9 986.1
---------------- --------------------
Total liabilities and EUR 1,764.6 EUR 1,413.3
shareholders' equity
DASSAULT SYSTEMES
CONDENSED CASH FLOW STATEMENT
(in millions of Euro)
Three months ended Six months ended
------------------------ ------------------------
June June June June
30, 30, Variation 30, 30, Variation
2006 2005 2006 2005
------- ------ --------- ------- ------ ---------
Net Profit 29.4 37.8 (8.4) 60.7 68.7 (8.0)
Changes in working
capital and non-
cash P&L items 34.3 (9.9) 44.2 104.2 49.7 54.5
------- ------ --------- ------- ------ ---------
Net Cash provided by
operating activities 63.7 27.9 35.8 164.9 118.4 46.5
Acquisition and sale
of assets (6.0) (8.6) 2.6 (13.9) (15.3) 1.4
Acquisitions net of
cash (261.9) (18.6) (243.3) (263.4) (23.0) (240.4)
Loans and others 0.0 (0.6) 0.6 1.8 (0.9) 2.7
------- ------ --------- ------- ------ ---------
Net Cash provided by
(used in) investing
activities (267.9) (27.8) (240.1) (275.5) (39.2) (236.3)
Borrowing 0.0 0.0 0.0 200.0 0.0 200.0
Share repurchase and
proceeds from stock
option exercise, net 6.6 5.2 1.4 22.7 15.4 7.3
Reimbursement of
lease commitments (0.4) 0.0 (0.4) (0.9) 0.0 (0.9)
Dividend 0.0 (43.1) 43.1 0.0 (43.1) 43.1
------- ------ --------- ------- ------ ---------
Net Cash provided by
(used in) financing
activities (1) 6.2 (37.9) 44.1 221.8 (27.7) 249.5
Effect of exchange
rate changes on
treasury (2) (12.5) 17.5 (30.0) (17.6) 28.0 (45.6)
======= ====== ========= ======= ====== =========
Increase (Decrease)
in treasury (2) (210.5) (20.3) (190.2) 93.6 79.5 14.1
Treasury (2) at
beginning of period 684.0 652.6 379.9 552.8
Treasury (2) at end
of period 473.5 632.3 473.5 632.3
(1) Excluding changes in short-term investments.
(2) Treasury includes cash, cash equivalents and short-term
investments.
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