Dassault Systemes Reports Solid Third Quarter Performance and Reconfirms 2004 Financial Objectives.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; 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, reported financial results for the third quarter and nine months ended September September: see month. 30, 2004. Third Quarter Financial and Business Highlights --Total 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. 188.0 million, up 7% as reported and up 10% in constant currencies --EPS EUR 0.28 (up 17%) on U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis --EPS up 12% to EUR 0.28 excluding acquisition costs --Software revenue EUR 156.7 million, up 3% as reported and up 6% in constant currencies --PDM revenue up 11% as reported and up 14% in constant currencies --Design-centric revenue up 16% as reported (up 26% in U.S. dollars) --Reconfirming 2004 and initiating preliminary 2005 financial objectives --DS and RAND Worldwide announce European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. SMB (1) (Small to Medium-sized Business) Also called "SME" (small to medium-sized enterprise), it refers to companies that are larger than the small office/home office (SOHO), but not huge. initiatives "The third quarter was a period of significant accomplishments across our businesses with major wins in our target industries, the introduction of our latest V5 PLM releases and solid financial results. I believe Dassault Systemes is well positioned to deliver strong financial results for 2004 based upon our solid performance through the third quarter of this year and our fourth quarter outlook," commented Bernard Charles Bernard Charles is the CEO of Dassault Systemes. References
Revenue Total revenue in the 2004 third quarter increased 7% to EUR 188.0 million as reported and increased 10% in constant currencies compared to the third quarter of 2003 where total revenue was EUR 176.3 million. The growth in total revenue reflected increases in both software and service revenue. In the third quarter of 2004 software revenue, representing 83% of total revenue, increased 3% to EUR 156.7 million and increased 6% in constant currencies. Recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. software revenue represented 55% of total software revenue in the third quarter of 2004. New 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 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). seats licensed in the third quarter of 2004 increased 4% to 14,002 seats, compared to 13,478 seats in the year-ago quarter. CATIA seats licensed decreased 4% as anticipated. SolidWorks licenses increased 14% compared to the year-ago quarter. Service revenue increased sharply in the third quarter of 2004 with service revenue rising 30% to EUR 31.3 million and increasing 34% in constant currencies compared to the year-ago quarter. Similar to the second quarter, the strong increase in service revenue was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to an increase in PLM projects already underway with customers. Process-centric revenue, including 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 (Product Data Management) revenue, totaled EUR 153.0 million in the third quarter of 2004, compared to EUR 146.0 million in the year-ago quarter. Process-centric revenue increased 5% as reported and 8% in constant currencies in comparison to the third quarter of 2003. PDM revenue increased 11% as reported and 14% in constant currencies in comparison to the year-ago quarter. PDM revenues totaled EUR 23.7 million in the third quarter of 2004 and represented 13% of total revenue. In the Design-centric segment, SolidWorks' revenue increased 16% as reported (26% if reported in U.S. dollars) to EUR 35.0 million in the third quarter of 2004, compared to EUR 30.3 million in the year-ago period. SolidWorks' had a very large number of wins in the third quarter, with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two-thirds of the wins representing decisions to migrate from 2D drafting tools. Among its newest customers is F.L. Smidth of Denmark Denmark (dĕn`märk), Dan. Danmark, officially Kingdom of Denmark, kingdom (2005 est. pop. 5,432,000), 16,629 sq mi (43,069 sq km), N Europe. , who will be licensing 200 seats of SolidWorks software. 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, 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. and Financial Position Thibault de Tersant, Executive Vice President and CFO See Chief Financial Officer. of Dassault Systemes, commented, "Our third quarter came in on target for revenue, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and earnings. We were particularly pleased with the level of earnings growth, continuing the positive trend of the last four quarters." Operating income increased 8% to EUR 46.1 million in the third quarter of 2004 (24.5% operating margin), compared to EUR 42.6 million in the year-ago quarter (24.2% operating margin). Operating income before acquisition costs increased 5% to EUR 46.3 million in the third quarter of 2004, compared to EUR 44.0 million in the year-ago quarter. The operating margin before acquisition costs declined slightly to 24.6% in the third quarter of 2004, compared to the third quarter of 2003 where the operating margin was 25.0% before acquisition costs. Earnings per share increased 17% to EUR 0.28 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 in the third quarter of 2004, compared to EUR 0.24 per diluted share in the year-ago quarter. Earnings per share before acquisition costs increased 12% to EUR 0.28 per diluted share in the third quarter of 2004, compared to EUR 0.25 per diluted share in the third quarter of 2003. The strong increases in earnings per share, as reported and before acquisition costs, primarily reflected growth in revenue, operating income and financial revenue. Net income increased 19% to EUR 32.3 million in the third quarter of 2004, compared to EUR 27.1 million in the year-ago period. Net income before acquisition costs increased 15% to EUR 32.3 million in the third quarter of 2004, compared to EUR 28.2 million in the third quarter of 2003. The Company's financial position remained very strong, with 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 totaling EUR 551.4 million at September 30, 2004. Net cash provided by operations was EUR 29.7 million for the third quarter of 2004. Nine Months Financial Highlights --Total revenue EUR 556.7 million, up 6% as reported and up 9% in constant currencies --EPS EUR 0.83 (up 22%) on U.S. GAAP basis --EPS up 18% to EUR 0.84 excluding acquisition costs --Software revenue EUR 464.5 million, up 3% as reported and up 7% in constant currencies --Process-centric revenue EUR 452.1 million, up 4% as reported and up 7% in constant currencies --PDM revenue EUR 66.1 million, up 12% as reported and up 16% in constant currencies --Design-centric revenue EUR 104.6 million, up 14% as reported (up 25% in U.S. dollars) Strategy, Technology and Partnerships "During the quarter we had several strategic wins, including Siemens (Siemens AG, Munich, Germany, www.siemens.com) A leading European electrical and electronics firm founded in 1847. Siemens has more than 430,000 employees in nearly 200 countries, and more than 50,000 professionals are engaged in research and development. ICM ICM Intercom ICM Integrated Crop Management ICM International Congress of Mathematicians ICM Information Classification and Management ICM Intelligent Contact Management (Cisco) ICM International Creative Management in consumer electronics, Northrop Grumman Northrop Grumman Corporation (NYSE: NOC) is an aerospace and defense conglomerate that is the result of the 1994 purchase of Grumman by Northrop. The company is the third largest defense contractor for the U.S. in shipbuilding and Hydro-Quebec in the hydroelectric power hydroelectric power: see power, electric; water power. hydroelectric power Electricity produced from generators driven by water turbines that convert the energy in falling or fast-flowing water to mechanical energy. industry that clearly confirm the competitive strengths of our PLM software as we pursue our diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. into new industries. We introduced Version 5, Release 14 for Product Lifecycle Management, bringing advanced collaboration Working together on a project. See collaborative software. functionalities and further strengthening of our product offer. From a channel perspective, we have worked hard over the last year with our partners to better address the small and medium-size Adj. 1. medium-size - intermediate in size medium-sized, moderate-size, moderate-sized sized - having a specified size business market opportunity (SMB market See SMB. ) in the Americas A·mer·i·cas , the See America. , in particular. We were, therefore, pleased by the 32% revenue growth in constant currencies delivered in the Americas this quarter. We now want to use the same approach to further enhance our PLM SMB business 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). and, in
connection with this plan, we have signed a letter of intent with RAND
Worldwide. SolidWorks, providing significant leadership in the
design-centric market, had outstanding results in the third quarter,
delivering revenue growth of 26% in U.S. dollars, demonstrating our
success in converting 2D users to our 3D software solutions,"
commented Bernard Charles, President and Chief Executive Officer of
Dassault Systemes.In a separate press release issued today, Dassault Systemes and Rand A Technology Corporation, operating as RAND Worldwide, announced their intentions to reorganize re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. their strategic European partnership for sales of Product Lifecycle Management solutions. In connection with this decision, Dassault Systemes will acquire RAND Worldwide's subsidiaries in the United Kingdom, Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. , 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 Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. , plus the subsidiary Rand Technologies C.I.S., Inc., which serves Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). and will also increase its ownership of RAND 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. , Inc. (Rand Americas), to 70% from 60%, for an aggregate purchase price of approximately EUR 32 million. Proceeds from the transaction would eliminate RAND Worldwide's current outstanding debt with Dassault Systemes. Northrop Grumman, one of the world's largest defense and aerospace companies, has selected DS' PLM solutions, including CATIA V5 and ENOVIA Lifecycle Applications to design, build and manage 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. Navy's advanced, 21st-century surface combatant A ship constructed and armed for combat use with the capability to conduct operations in multiple maritime roles against air, surface and subsurface threats, and land targets. program, the DD(X). Hydro-Quebec, the largest company in Quebec's energy sector, has selected DS' PLM solutions, including CATIA V5 and SMARTEAM, for the design of its hydroelectric projects. Hydro-Quebec is the first owner-operator An owner-operator is a type of business owner, who typically works and runs their own business. An owner-operator will usually be responsible for day-to-day operations, such as inventory, finances, labor control, etc. in the hydroelectric industry to use digital technology for the design and development of projects including dams, plant facilities and energy distribution infrastructures. Siemens ICM, one of the world's largest manufacturers of GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. mobile and cordless phones A wireless telephone that transmits to and receives signals from a base station within a range of a few hundred feet. Cordless phones are for local use and cannot travel long distances as can cellphones and satellite phones. See DECT and multihandset cordless. , has selected Dassault Systemes PLM solutions as its mechanical design platform for production of its cordless cord·less adj. Having no cord, usually using batteries as a source of power: a cordless telephone. cord and mobile phone products. Siemens will implement CATIA V5, for 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. product design, and SMARTEAM, for collaborative product data management. AREVA Areva (Euronext: CEI) is a French public multinational industrial conglomerate that deals in energy, especially in nuclear power. It was created on 3 September, 2001, by the merger of CEA Industrie, Framatome and Cogema (now Areva NC). , through Framatome ANP ANP atrial natriuretic peptide. ANP atrial natriuretic peptide. ANP Atrial natriuretic peptide, see there , its joint subsidiary with Siemens, has selected Dassault Systemes PLM solutions, including CATIA and SMARTEAM, for all of its units in France and abroad. F.L. Smidth of Denmark, the world's leading supplier of cement cement, binding material used in construction and engineering, often called hydraulic cement, typically made by heating a mixture of limestone and clay until it almost fuses and then grinding it to a fine powder. production technology, has selected SolidWorks software as its 3D mechanical design standard in order to increase the company's engineering efficiency and productivity in designing cement-making equipment and plants. F. L. Smidth, a long-time 2D software user, is implementing 200 licenses of SolidWorks software. Dassault Systemes released Version released version - release 5 Release 14 (V5R14) of its Product Lifecycle Management portfolio, comprised of CATIA 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. , ENOVIA and SMARTEAM for product data and lifecycle management, collaboration, and decision support and DELMIA DELMIA Digital Enterprise Lean Manufacturing Interactive Application Product Lifecycle Management solution for digital development of factory and production processes. --The new release "Imagine and Work as a Global Team" introduces breakthrough technologies for industrial design and improved collaborative product development. For example, a new Workpackage Exchange product enables companies across the value chain to exchange detailed product definitions, promote concurrent At the same time. It implies that multiple processes are taking place simultaneously. See concurrent operation. relational See relational algebra, relational calculus, relational database, relational query and relational operator. design, and protect corporate intellectual property. --A revolutionary new CATIA Imagine and Shape product extends V5 PLM to industrial designers by enabling them to explore product ideas more rapidly, while permitting last-minute last minute n. The period just before a significant or concluding moment such as a deadline, due date, or scheduled event: always waits until the last minute to do his holiday shopping. styling modifications for greater product success. --A new web-based 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 (Lifecycle Applications) navigator See Netscape Navigator, Netscape and Norton Navigator. Navigator - Netscape Navigator provides role-specific access to PLM information throughout the enterprise. Engineers and non-engineers alike can 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. product, process, and resource information they require to perform their jobs. --DELMIA V5R14 offers an efficient collaborative workspace A collaborative workspace or shared workspace is an inter-connected environment in which all the participants in dispersed locations can access and interact with each other just as inside a single entity. within the manufacturing community. Dassault Systemes introduced 3D XML XML in full Extensible Markup Language. Markup language developed to be a simplified and more structural version of SGML. It incorporates features of HTML (e.g., hypertext linking), but is designed to overcome some of HTML's limitations. for PLM (Extensible Markup Language See XML. (language, text) Extensible Markup Language - (XML) An initiative from the W3C defining an "extremely simple" dialect of SGML suitable for use on the World-Wide Web. http://w3.org/XML/. for Product Lifecycle Management), a universal, lightweight Use in English The word lightweight is conserderd one of the most insulting words in the English language. Is is the only word in the English language is every part of speech at the same time. One lightweight of note is Jason. XML-based format that enables users to capture and share live, accurate 3D data quickly and easily. 3D XML compresses highly complex data, with file sizes up to 99 percent smaller than those of existing formats. The new format will greatly enhance collaboration around 3D information. Dassault Systemes has incorporated the 3D XML format in its entire line of products - CATIA, DELMIA, ENOVIA, SMARTEAM, SolidWorks and Spatial Having to do with space. Contrast with "temporal," which deals with time. - and will incorporate it into further releases of its solutions. 3D XML leverages and extends Lattice (theory) lattice - A partially ordered set in which all finite subsets have a least upper bound and greatest lower bound. This definition has been standard at least since the 1930s and probably since Dedekind worked on lattice theory in the 19th century; though he may not Technology's XVL XVL Extensible Virtual Language solutions and expertise as part of a partnership announced in July July: see month. . Business Outlook "We are reconfirming our 2004 objectives for revenue growth of about 9% in constant currencies and EPS growth of about 16% in constant currencies before acquisition costs. Our operating margin before acquisition costs is likely to be equivalent to or slightly better than our 2003 operating margin of 29.0%, based upon our revenue outlook for the fourth quarter, investment plans and key currency exchange rate assumptions. For the purposes of calculating reported revenue and EPS objectives, we continue to maintain our assumption of a U.S. dollar to Euro exchange rate of $1.25 per EUR 1.00 leading to full year objectives of about EUR 795 million for reported revenue, and EPS of about EUR 1.35 before acquisition costs. "We are initiating our preliminary 2005 financial objectives at this time. We believe the Company is positioned to accelerate revenue growth in constant currencies. Our initial financial objectives are based upon a stable global economic environment, the continuation continuation - continuation passing style of interest we see in our target markets for our software products and solutions as well as the completion of the new agreement with RAND Worldwide. More specifically, our preliminary financial objectives are for revenue growth of approximately 11% to 12% in constant currencies, accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by a stable operating margin in comparison to 2004. Accordingly, our revenue objective is approximately EUR 875-885 million based upon the same exchange rate assumptions as for the 2004 fourth quarter," commented Thibault de Tersant.
Major Press Release Highlights
October 13, 2004 Dassault Systemes Unveils 3D XML for Product
Lifecycle Management.
----------------------------------------------------------------------
October 13, 2004 Siemens ICM Selects PLM Solutions from Dassault
Systemes and IBM.
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October 13, 2004 AREVA Selects Dassault Systemes and IBM PLM
Solutions for Development of its Industrial
Equipment.
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October 12, 2004 Dassault Systemes and Alma Establish CAA V5
Partnership.
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October 12, 2004 Dassault Systemes and CIMPA Announce CAA V5
Software Partnership Agreement.
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October 12, 2004 Magestic Systems Joins Dassault Systemes CAA V5
Software Partner Community.
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October 11, 2004 Dassault Systemes Teams with Volvo IT to Deploy
ENOVIA V5 at Volvo Penta.
----------------------------------------------------------------------
October 11, 2004 Dassault Systemes and Fakespace Establish CAA
V5 Software Partnership.
----------------------------------------------------------------------
September 28, 2004 Dassault Systemes and IBM Announce Version 5
Release 14 of their Product Lifecycle
Management Portfolio.
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September 28, 2004 Delmia Corp. Announces Version 5 Release 14 of
its Digital Manufacturing Solutions.
----------------------------------------------------------------------
September 7, 2004 SolidWorks Opens New Office in Brazil to Serve
Fast-Growing Market for 3D Mechanical Design
Software.
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August 2, 2004 Daratech Study Names Delmia Corp. as Market
Leader in Digital Manufacturing Process
Management.
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Endnotes:
1. All comparative figures are given on a year-over-year basis unless
specified otherwise.
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
operating income, operating margin and earnings per share before
acquisition costs (acquisition costs are primarily comprised of
technology amortization in addition to other acquisition- related
costs). 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-U.S. 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 DS' results with other companies, including competitors,
whose reporting currency may be different from DS. Constant
currency revenue growth, as calculated by the Company, may not be
comparable to similarly titled measures employed by other
companies.
Conference call information The Company will host a teleconference call today, Tuesday Tuesday: see week. , October October: see month. 26, 2004 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 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 the Company's objectives for 2004 revenue growth in constant currencies, 2004 reported revenue growth, 2004 operating margin growth objective before acquisition costs, 2004 EPS objective before acquisitions costs and preliminary 2005 revenue objective in constant currencies and 2005 operating margin objective 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, (ii) reduced corporate spending on IT infrastructure 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 (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) , (iv) new product developments and technological changes, and (v) errors or defects in our products. 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 December: see month. 31, 2003, which was filed with the SEC on June June: see month. 30, 2004, 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 70,000 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. Its offering includes integrated PLM solutions for product development (CATIA(R), DELMIA(R), ENOVIA(R), SMARTEAM(R)), mainstream product design tools (SolidWorks(R)), and 3D components (ACIS(R)) from Spatial Corp Spatial Corporation was founded in 1986, and had one main product: ACIS, the first commercially available 3D modeling kernel. Through subsequent years, Spatial added products to its portfolio that enabled ISVs mostly in the CAD/CAM industries, to build applications. . 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
NON-U.S. GAAP KEY FIGURES
3rd QUARTER
in millions of Euro, except per share data, headcount and exchange
rates.
3Q04 3Q03 Variation
------ ------ ---------
Process-Centric excluding PDM 129.3 124.6 4%
PDM 23.7 21.4 11%
Design-Centric 35.0 30.3 16%
Revenue 188.0 176.3 7%
Americas 60.6 49.9 21%
Europe 83.4 79.2 5%
Asia 44.0 47.2 (7%)
Operating Income (1) 46.3 44.0 5%
Operating Margin (1) 24.6% 25.0%
Net Income (1) 32.3 28.2 15%
EPS (1) 0.28 0.25 12%
Closing Headcount 4,363 4,063 7%
Average Rate USD per Euros 1.22 1.12 9%
Average Rate JPY per Euros 134 132 2%
(1) Excluding acquisition costs. For U.S. GAAP figures, please refer
to reconciliation tables
NINE MONTHS ENDED
in millions of Euro, except per share data, headcount and exchange
rates.
YTD04 YTD03 Variation
------ ------ ---------
Process-Centric excluding PDM 386.0 376.0 3%
PDM 66.1 59.0 12%
Design-Centric 104.6 92.0 14%
Revenue 556.7 527.0 6%
Americas 162.3 152.5 6%
Europe 251.4 239.0 5%
Asia 143.0 135.5 6%
Operating Income (1) 142.8 127.8 12%
Operating Margin (1) 25.7% 24.3%
Net Income (1) 97.4 81.7 19%
EPS (1) 0.84 0.71 18%
Average Rate USD per Euros 1.23 1.11 10%
Average Rate JPY per Euros 134 131 2%
(1) Excluding acquisition costs. 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 Nine Months Ended
September September September September
30, 2004 30, 2003 30, 2004 30, 2003
------------- ------------ ------------- -----------
Software 156.7 152.2 464.5 449.1
Service and Other 31.3 24.1 92.2 77.9
------------- ------------ ------------- -----------
Total Revenue EUR 188.0 EUR 176.3 EUR 556.7 EUR 527.0
Software 5.2 5.1 15.0 16.5
Service and Other 25.3 19.4 75.9 65.9
------------- ------------ ------------- -----------
Total Cost
of Revenue EUR 30.5 EUR 24.5 EUR 90.9 EUR 82.4
Gross Profit EUR 157.5 EUR 151.8 EUR 465.8 EUR 444.6
Research and
Development 55.1 53.6 162.6 159.8
Marketing and
Sales 44.8 41.4 125.8 121.1
General
Administration 11.3 12.8 34.6 35.9
Acquisition Costs 0.2 1.4 1.3 4.9
------------- ------------ ------------- -----------
Total Research,
Selling,
Administration
and Acquisition
expenses EUR 111.4 EUR 109.2 EUR 324.3 EUR 321.7
============= ============ ============= ===========
Operating
Income (1) EUR 46.1 EUR 42.6 EUR 141.5 EUR 122.9
Financial revenue
and Other 2.7 1.0 6.9 2.6
------------- ------------ ------------- -----------
Income before
income taxes 48.8 43.6 148.4 125.5
Income tax expense (16.5) (16.5) (52.1) (47.9)
------------- ------------ ------------- -----------
Net Income (1) EUR 32.3 EUR 27.1 EUR 96.3 EUR 77.6
============= ============ ============= ===========
Basic net income
per share EUR 0.29 EUR 0.24 EUR 0.85 EUR 0.69
============= ============ ============= ===========
Diluted net income
per share (1) EUR 0.28 EUR 0.24 EUR 0.83 EUR 0.68
============= ============ ============= ===========
Basic weighted
average shares
outstanding (in
millions) 113.2 112.9 113.2 113.1
============= ============ ============= ===========
Diluted weighted
average shares
outstanding (in
millions) 116.2 114.8 116.0 114.3
(1) Excluding acquisition costs, operating income and net income
would have been as follows:
Operating Income EUR 46.3 EUR 44.0 EUR 142.8 EUR 127.8
============= ============ ============= ===========
Net Income EUR 32.3 EUR 28.2 EUR 97.4 EUR 81.7
============= ============ ============= ===========
Diluted net
income per
share EUR 0.28 EUR 0.25 EUR 0.84 EUR 0.71
============= ============ ============= ===========
Supplemental Disclosures Regarding Non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. GAAP Financial Information: Excluding Acquisition Costs 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 acquisition costs for the three months and nine months ended September 30, 2004. In particular, the table presents operating income, operating margin and earnings per share before acquisition costs (acquisition costs are primarily comprised of technology amortization in addition to other acquisition-related costs). The Company uses these non-U.S. 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-U.S. 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 acquisition costs, 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 the 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, operating income, operating margin and earnings per share including acquisition costs, 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-U.S. GAAP CONSOLIDATED STATEMENT OF INCOME DATA
PERCENTAGE VARIANCE
(EXCLUDING ACQUISITION COSTS)
(in millions of Euro, except per share data)
Three Months Ended
September September
30, 2004 30, 2003 Variation
------------- ------------ ---------
Software 156.7 152.2 3.0%
Service and Other 31.3 24.1 29.9%
------------- ------------
Total Revenue EUR 188.0 EUR 176.3 6.6%
Software 5.2 5.1 2.0%
Service and Other 25.3 19.4 30.4%
------------- ------------
Total Cost of Revenue EUR 30.5 EUR 24.5 24.5%
Gross Profit EUR 157.5 EUR 151.8 3.8%
Research and Development 55.1 53.6 2.8%
Marketing and Sales 44.8 41.4 8.2%
General Administration 11.3 12.8 (11.7%)
------------- ------------
Total Research, Selling,
Administration EUR 111.2 EUR 107.8 3.2%
============= ============
Operating Income EUR 46.3 EUR 44.0 5.2%
Financial revenue and Other 2.7 1.0 170.0%
------------- ------------
Income before income taxes 49.0 45.0 8.9%
Income tax expense (16.7) (16.8) N/S
------------- ------------
Net Income EUR 32.3 EUR 28.2 14.5%
============= ============
Diluted net income per share EUR 0.28 EUR 0.25 12.0%
============= ============
Diluted weighted average shares
outstanding (in millions) 116.2 114.8
DASSAULT SYSTEMES
CONSOLIDATED STATEMENT OF INCOME DATA
RECONCILIATIONS NON-U.S. GAAP / U.S. GAAP
(in millions of Euro, except per share data)
Three Months Ended
September 30, 2004
--------------------------------
Excluding
Reported Acquisition Acquisition
Amount Costs Costs
----------------------------------------
Software 156.7 156.7
Service and Other 31.3 31.3
------------- ---------------
Total Revenue EUR 188.0 EUR 188.0
Software 5.2 5.2
Service and Other 25.3 25.3
------------- ---------------
Total Cost of Revenue EUR 30.5 EUR 30.5
Gross Profit EUR 157.5 EUR 157.5
Research and Development 55.1 55.1
Marketing and Sales 44.8 44.8
General Administration 11.3 11.3
Acquisition Costs 0.2 (0.2) -
------------- ---------------
Total Research, Selling,
Administration EUR 111.4 EUR 111.2
============= ===============
Operating Income EUR 46.1 EUR 46.3
Financial revenue and Other 2.7 2.7
------------- ---------------
Income before income taxes 48.8 49.0
Income tax expense (16.5) (0.2) (16.7)
------------- ---------------
Net Income EUR 32.3 EUR 32.3
============= ===============
Diluted net income per share EUR 0.28 EUR 0.28
============= ===============
Diluted weighted average
shares outstanding (in
millions) 116.2 116.2
September 30, 2003
---------------------------
Excluding
Reported Acquisition Acquisition
Amount Costs Costs
----------------------------------------
Software 152.2 152.2
Service and Other 24.1 24.1
------------- ---------------
Total Revenue EUR 176.3 EUR 176.3
Software 5.1 5.1
Service and Other 19.4 19.4
------------- ---------------
Total Cost of Revenue EUR 24.5 EUR 24.5
Gross Profit EUR 151.8 EUR 151.8
Research and Development 53.6 53.6
Marketing and Sales 41.4 41.4
General Administration 12.8 12.8
Acquisition Costs 1.4 (1.4) -
------------- ---------------
Total Research, Selling,
Administration EUR 109.2 EUR 107.8
============= ===============
Operating Income EUR 42.6 EUR 44.0
Financial revenue and Other 1.0 1.0
------------- ---------------
Income before income taxes 43.6 45.0
Income tax expense (16.5) (0.3) (16.8)
------------- ---------------
Net Income EUR 27.1 EUR 28.2
============= ===============
Diluted net income per share EUR 0.24 EUR 0.25
============= ===============
Diluted weighted average
shares outstanding (in
millions) 114.8 114.8
DASSAULT SYSTEMES
NON-U.S. GAAP CONSOLIDATED STATEMENT OF INCOME DATA
PERCENTAGE VARIANCE
(EXCLUDING ACQUISITION COSTS)
(in millions of Euro, except per share data)
Nine Months Ended
September September
30, 2004 30, 2003 Variation
------------- ------------ ---------
Software 464.5 449.1 3.4%
Service and Other 92.2 77.9 18.4%
------------- ------------
Total Revenue EUR 556.7 EUR 527.0 5.6%
Software 15.0 16.5 (9.1%)
Service and Other 75.9 65.9 15.2%
------------- ------------
Total Cost of Revenue EUR 90.9 EUR 82.4 10.3%
Gross Profit EUR 465.8 EUR 444.6 4.8%
Research and Development 162.6 159.8 1.8%
Marketing and Sales 125.8 121.1 3.9%
General Administration 34.6 35.9 (3.6%)
------------- ------------
Total Research, Selling,
Administration EUR 323.0 EUR 316.8 2.0%
============= ============
Operating Income EUR 142.8 EUR 127.8 11.7%
Financial revenue and Other 6.9 2.6 165.4%
------------- ------------
Income before income taxes 149.7 130.4 14.8%
Income tax expense (52.3) (48.7) N/S
------------- ------------
Net Income EUR 97.4 EUR 81.7 19.2%
============= ============
Diluted net income per share EUR 0.84 EUR 0.71 18.3%
============= ============
Diluted weighted average shares
outstanding (in millions) 116.0 114.3
DASSAULT SYSTEMES
CONSOLIDATED STATEMENT OF INCOME DATA
RECONCILIATIONS NON-U.S. GAAP / U.S. GAAP
(in millions of Euro, except per share data)
Nine Months Ended
September 30, 2004
------------------
Reported Acquisition Excluding
Amount Costs Acquisition
Costs
----------------------------------------
Software 464.5 464.5
Service and Other 92.2 92.2
------------- ---------------
Total Revenue EUR 556.7 EUR 556.7
Software 15.0 15.0
Service and Other 75.9 75.9
------------- ---------------
Total Cost of Revenue EUR 90.9 EUR 90.9
Gross Profit EUR 465.8 EUR 465.8
Research and Development 162.6 162.6
Marketing and Sales 125.8 125.8
General Administration 34.6 34.6
Acquisition Costs 1.3 (1.3) -
------------- ---------------
Total Research, Selling,
Administration EUR 324.3 EUR 323.0
============= ===============
Operating Income EUR 141.5 EUR 142.8
Financial revenue and Other 6.9 6.9
------------- ---------------
Income before income taxes 148.4 149.7
Income tax expense (52.1) (0.2) (52.3)
------------- ---------------
Net Income EUR 96.3 EUR 97.4
============= ===============
Diluted net income per share EUR 0.83 EUR 0.84
============= ===============
Diluted weighted average
shares outstanding (in
millions) 116.0 116.0
September 30, 2003
------------------
Reported Acquisition Excluding
Amount Costs Acquisition
Costs
----------------------------------------
Software 449.1 449.1
Service and Other 77.9 77.9
------------- ---------------
Total Revenue EUR 527.0 EUR 527.0
Software 16.5 16.5
Service and Other 65.9 65.9
------------- ---------------
Total Cost of Revenue EUR 82.4 EUR 82.4
Gross Profit EUR 444.6 EUR 444.6
Research and Development 159.8 159.8
Marketing and Sales 121.1 121.1
General Administration 35.9 35.9
Acquisition Costs 4.9 (4.9) -
------------- ---------------
Total Research, Selling,
Administration EUR 321.7 EUR 316.8
============= ===============
Operating Income EUR 122.9 EUR 127.8
Financial revenue and Other 2.6 2.6
------------- ---------------
Income before income taxes 125.5 130.4
Income tax expense (47.9) (0.8) (48.7)
------------- ---------------
Net Income EUR 77.6 EUR 81.7
============= ===============
Diluted net income per share EUR 0.68 EUR 0.71
============= ===============
Diluted weighted average
shares outstanding (in
millions) 114.3 114.3
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions of Euro)
September 30, 2004 December 31, 2003
--------------------------------------
ASSETS
Cash and short-term investments 551.4 439.7
Accounts receivable, net 165.4 227.6
Other assets 326.4 297.2
--------------------------------------
Total assets EUR 1,043.2 EUR 964.5
LIABILITIES AND SHAREHOLDERS' EQUITY
Total liabilities 321.5 306.8
Shareholders' equity 721.7 657.7
--------------------------------------
Total liabilities and EUR 1,043.2 EUR 964.5
shareholders' equity
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