Dassault Systemes Reports Third Quarter Financial Results with Software Revenue up 17%, Total Revenue up 14% and EPS up 14%.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 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 third quarter and nine months ended September September: see month. 30, 2005. 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. 213.8 million, up 14% as reported and in constant currencies --Software revenue EUR 183.3 million, up 17% as reported and in constant currencies --Process-centric revenue EUR 170.4 million, up 11% as reported and 12% in constant currencies --PDM revenue EUR 26.5 million, up 12% as reported and in constant currencies, with 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 software end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. revenue up 33% --SolidWorks revenue EUR 43.4 million, up 24% as reported (up 24% in U.S. dollars) --EPS EUR 0.32 on U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. EUR 0.32 excluding acquisition costs, up 14% --Providing initial 2006 financial objectives Bernard Charles Bernard Charles is the CEO of Dassault Systemes. References
The period beginning at the start of the calendar year up to the current date. progress in the Americas A·mer·i·cas , the See America. region, where we are successfully further expanding our market presence and increasing our market share. Our record performance in the Americas in 2005 to-date reflects contributions across all our software applications and market segments, reflecting strong customer demand for our PLM solutions and the effectiveness of our partnership with 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) . More specifically, building upon strong growth of 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. V5, our total PLM software sales rose 28% in the Americas year-to-date. Our performance in V5 PLM was also mirrored in the Mainstream market with 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). , where software revenues increased 26% in the Americas during this same time-period. "DS is on track in 2005 to deliver another year of accelerating revenue growth based upon our year-to-date performance and fourth quarter outlook. Looking to 2006 we believe DS is well-positioned to sustain the dynamics of strong revenue and earnings growth as we continue to penetrate and enlarge TO ENLARGE. To extend; as, to enlarge a rule to plead, is to extend the time during which a defendant may plead. To enlarge, means also to set at liberty; as, the prisoner was enlarged on giving bail. 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 markets." Third Quarter Financial Results Revenue Total revenue increased 14% as reported and in constant currencies to EUR 213.8 million in the third quarter of 2005, up from EUR 188.0 million in the year-ago quarter. Strong growth in software revenue drove the year-over-year increase in total revenue. Total software revenue represented 86% of total revenue with service revenue accounting for the remaining 14% of total revenue in the third quarter of 2005. Total software revenue increased 17% (as reported and in constant currencies) to EUR 183.3 million in the third quarter of 2005, on strong growth across the Company's software applications. In the third quarter of 2004 total software revenue was EUR 156.7 million. 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. licenses revenue represented 52% of total software revenue in the third quarter of 2005. New CATIA and SolidWorks seats licensed in the third quarter of 2005 increased 12% to 15,717 seats, compared to 14,002 seats in the year-ago period, with pricing up 3% for CATIA and up 4% in U.S. dollars for SolidWorks. Service and other revenue decreased 3% as reported and 2% in constant currencies to EUR 30.5 million in the third quarter of 2005, compared to EUR 31.3 million in the third quarter of 2004, solely due to customer deferrals related to the execution of several consulting contracts 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). . The Company noted that its CMP CMP (cytidine monophosphate): see cytosine. (1) (CMP Media LLC, Manhasset, NY, www.cmp.com) Part of United Business Media, CMP is a leading integrated media company that offers a wide variety of publications and services in the information activity, the Channel Management Provider model, focused on PLM opportunities in the small- and medium-sized Me´di`um-sized` a. 1. Having a medium size; as, a medium-sized man s>. Adj. 1. medium-sized - intermediate in size medium-size, moderate-size, moderate-sized business (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. ) market, was well on track in the quarter. Looking at total revenue by geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. regions, the Americas represented 35% of total revenue, Asia was 25% and Europe accounted for 40% of total revenue in the third quarter of 2005. In the Americas, total revenue increased 23% as reported and in constant currencies on strong year-over-year growth in software revenue among the Company's major brands. Similarly, in Asia, total revenue increased 23% as reported and 24% in constant currencies year over year, with good contributions from all major brands. In Europe, following a very strong first half performance, total revenue increased 2% year over year, largely reflecting lower than anticipated service revenue as noted above. Process-centric revenue increased 11% as reported and 12% in constant currencies in the third quarter of 2005 largely reflecting strong software growth across design, digital manufacturing and PDM applications. In the third quarter of 2005, Process-centric revenue, including PDM revenue, totaled EUR 170.4 million, compared to EUR 153.0 million in the third quarter of 2004. PDM revenue increased 12% as reported and in constant currencies to EUR 26.5 million, compared to EUR 23.7 million in the year-ago period, on strong growth in software revenue. PDM software end-user revenue increased 33% in the 2005 third quarter, compared to the year-ago period. For the 2005 third quarter, CATIA licenses increased 7% year over year to 7,712. In the Mainstream market, SolidWorks revenue increased 24% (24% in U.S. dollars) to EUR 43.4 million in the third quarter of 2005, up from EUR 35.0 million in the year-ago quarter. SolidWorks seats licensed increased 18% to 8,005 licenses. 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 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 increased 14% to EUR 0.32 in the third quarter of 2005, compared to earnings per diluted share of EUR 0.28 in the third quarter of 2004. Earnings per diluted share excluding acquisition costs increased 14% to EUR 0.32 in the third quarter of 2005, compared to earnings per diluted share excluding acquisition costs of EUR 0.28 in the year-ago period. In the third quarter of 2005 operating income increased 10% to EUR 50.5 million (23.6% operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: ), compared to EUR 46.1 million in the year-ago quarter (24.5% operating margin). Operating income excluding acquisition costs increased 10% to EUR 50.8 million in the recently completed quarter, compared to EUR 46.3 million in the third quarter of 2004. The operating margin excluding acquisition costs was 23.8% in the third quarter of 2005, coming in above DS's objective on a higher level of software revenue. In the year-ago quarter, the operating margin excluding acquisition costs was 24.6%. Nine-month Financial Highlights --Total revenue EUR 630.3 million, up 13% as reported and up 15% in constant currencies --Software revenue EUR 531.4 million, up 14% as reported and up 16% in constant currencies --Process-centric revenue EUR 425.6 million, up 10% as reported and up 12% in constant currencies --PDM revenue EUR 74.8 million, up 13% as reported and up 15% in constant currencies, with software end-user revenue up 26% --SolidWorks revenue EUR 129.9 million, up 24% as reported (up 28% in U.S. dollars) --EPS EUR 0.91 on U.S. GAAP basis --EPS excluding acquisition costs up 10% to EUR 0.92 Strategy, Technology and Partnerships Bernard Charles stated, "We completed the acquisition of 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. in early October October: see month. . I am pleased to report that the closing process went very smoothly. In fact, at the time of the completion of the acquisition, our new organization was ready to hit the ground running, with our simulation The mathematical representation of the interaction of real-world objects. See scientific application and simulator. Simulation A broad collection of methods used to study and analyze the behavior and performance of actual or theoretical systems. teams at both ABAQUS and CATIA working together." DS completed the acquisition of ABAQUS Inc., the established leader in advanced finite element analysis Finite element analysis (FEA) is a computer simulation technique used in engineering analysis. It uses a numerical technique called the finite element method (FEM). There are many finite element software packages, both free and proprietary. software on October 4, 2005. The all-cash purchase price was US$413 million, before cash balances and tax benefits. ABAQUS, a wholly-owned subsidiary of DS, employs about 500 people worldwide, with its headquarters located in Providence Providence, city (1990 pop. 160,728), state capital and seat of Providence co., NE R.I., a port at the head of Providence Bay; founded by Roger Williams 1636, inc. as a city 1832. , RI, USA, and R&D centers in Providence and in Suresnes Suresnes (sürĕn`), city (1990 pop. 36,950), Hauts-de-Seine dept., N central France, a residential and industrial suburb of Paris. Its manufactures include automobiles, aeronautic equipment, and pharmaceuticals. , France. ABAQUS has 29 offices for technical support, sales and services, plus a network of distributors in emerging markets. In a separate press release issued today, ABAQUS announces that BMW BMW in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. Group has adopted ABAQUS software as the basis for all its vehicle crashworthiness Crashworthiness is the ability of a structure to protect its occupants during an impact. This is commonly tested when investigating the safety of vehicles. Depending on the nature of the impact and the vehicle involved, different criteria are used to determine the simulation. The decision comes after an intensive four-year technical collaboration Working together on a project. See collaborative software. during which the two companies worked together to advance ABAQUS software to meet BMW's requirements on accuracy and robustness. In a separate press release also issued today, DS announces that Spirit AeroSystems Spirit AeroSystems, Inc. ("Spirit" NYSE: SPR), based in Wichita, Kansas, is the world's largest first-tier aerostructures manufacturer. The company builds several important pieces of Boeing aircraft, including the fuselage of the 737, portions of the 787 fuselage, and the , the world's largest independent supplier of structures for commercial aircraft, will use CATIA V5 for design, 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 for product data management, and DELMIA DELMIA Digital Enterprise Lean Manufacturing Interactive Application for digital manufacturing simulation. During the quarter DS announced that 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. Corporation, the global aerospace and defense company, had reached a key milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. in the development of the U.S. Navy's first digitally designed and produced aircraft carrier, the CVN-21. As part of this project, Northrop Grumman Newport News Newport News, independent city (1990 pop. 170,045), SE Va., on the Virginia peninsula, at the mouth of the James River, off Hampton Roads, near Norfolk; inc. 1896. has rolled out a 1,700 user implementation of CATIA and a 2,000 user implementation of ENOVIA. In addition, Northrop Grumman Newport News is also planning a migration to DS V5 solutions. Working closely with the education community around the world, SolidWorks was pleased to have been selected by the Norwegian Norwegian associated in some way with Norway. Norwegian buhund, Norwegian sheepdog a medium-sized (26-40 lb), spitz-type dog with a short, dense coat in wheaten, black, red or sable, sometimes with black markings on the face, ears Education System, who will purchase up to 30,000 licenses of SolidWorks software as part of its program to strengthen the country's manufacturing industry. It is anticipated that more than 60,000 high school and junior high school students will learn 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. skills as SolidWorks becomes the most widely taught CAD software in the Nordic region. SolidWorks recently announced that its DWGgateway(TM) data translation tool now offers the ability to publish AutoCAD A full-featured CAD program from Autodesk that runs on PCs, Macs and Unix workstations. AutoCAD is a de facto standard with numerous add-ons available for enhanced functionality. Originally developed for CP/M machines in the early 1980s, AutoCAD was one of the first CAD programs for designs in the popular Adobe adobe (ədō`bē): see rammed earth. adobe Handmade sun-dried bricks formed from a mixture of heavy clay and straw found in arid regions. Portable Document Format (file format) Portable Document Format - (PDF) The native file format for Adobe Systems' Acrobat. PDF is the file format for representing documents in a manner that is independent of the original application software, hardware, and operating system used to create those documents. (PDF (Portable Document Format) The de facto standard for document publishing from Adobe. On the Web, there are countless brochures, data sheets, white papers and technical manuals in the PDF format. ). This new capability makes it easy for design engineers to share designs with anyone, regardless of whether the recipient One who receives. The person to whom an e-mail message is sent is the recipient. (communications) recipient - One who receives; receiver. E.g. "No recipient of the e-mail message will know about the other addressees who were listed in the BCC header." has AutoCAD software. The DWGgateway tool enables any AutoCAD software user to open and edit To make a change to existing data. See update. (application) edit - Use of some kind of editor program to modify a document. Also used to refer to the modification itself, e.g. "my last edit only made things worse". any DWG (filename extension) dwg - The filename extension for Autodesk drawing files. http://faqs.org/faqs/graphics/fileformats-faq/part3/. file. In this way, the DWGgateway software tool fosters open collaboration and saves users the time and money of unnecessarily implementing new products. DS and Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. announced that as part of their strategic alliance, they will make V5 PLM available for Microsoft(R) Windows(R) XP Professional x64 Edition Refers to 64-bit versions of Windows operating systems. See x64. , including versions of CATIA V5, DELMIA V5, ENOVIA V5 and SMARTEAM. These versions will take advantage of the full power of the Windows 64-bit architecture to enable customers to create, analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. and manage very large assemblies and complex products, such as entire automobiles No invention has so transformed the landscape of the United States as the automobile, and no other country has so thoroughly adopted the automobile as its favorite means of transportation. or aircraft. This capability considerably reduces product development cycles by accelerating design and enhancing design reviews, product optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. and decision support. DS and IBM have teamed up to integrate IBM Lotus Notes Lotus Notes is a client-server, collaborative application owned by IBM Software Group. IBM defines the software as an "integrated desktop client option for accessing business e-mail, calendars and applications on [an] IBM Lotus Domino server."[1]. and DS 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. technology, which will be delivered with the next release version of 3D XML Player fully supporting Lotus Notes Messaging and groupware software from IBM Lotus that was introduced in 1989 for OS/2 and later expanded to Windows, Mac, Unix, NetWare, AS/400 and S/390. Notes provides e-mail, document sharing, workflow, group discussions and calendaring and scheduling. . The 3D XML Player for Lotus Notes gives users outside the engineering department the ability to enhance collaboration and joint decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from by sharing product and business information with other knowledge workers from their desktops, through the traditional Lotus Notes interface. DS and IBM recently signed an agreement in services around Product Lifecycle Management designed to help customers accelerate their business transformations, of which PLM is a key component. Clients will benefit from the combination of IBM's consulting and project management skills and DS software technology and technical expertise. This agreement, between IBM Global Service Business Consulting Group and DS Services, reinforces the nearly 25-year, strategic partnership between DS and IBM. DS recently achieved a new milestone in its Component Application Architecture Version 5 (CAA Caa See CCC. V5) Software Community Program. The program now includes more than 360 applications to be delivered in Version 5 Release 16 of DS' PLM portfolio. The CAA V5 open software development platform enables customers, partners and independent software companies to design leading-edge applications that seamlessly complement DS' PLM portfolio. In August, Virtools This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. (TM), a company acquired by DS earlier this year, announced the availability of Virtools Software Suite 3.5. Virtools Software Suite 3.5, a set of comprehensive software development solutions for building highly interactive 3D content, is the result of extensive client and partner feedback. Virtools Software Suite 3.5 addresses development and production needs for Virtools' target customers in the industrial, game development and multimedia markets. Business Outlook Thibault de Tersant, Executive Vice President and CFO See Chief Financial Officer. , stated, "Business opportunities are good. There is strong demand for our software applications and we see this continuing. As a result, we are comfortable with our revenue growth outlook for 2005 and are raising our 2005 EPS objective, as we did in the first and second quarters of this year. "We are adjusting our revenue objective for 2005 to reflect the inclusion of ABAQUS following the completion of this acquisition in early October. Our new objective for 2005, before the deferred revenue write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. , is to grow total revenue about 17-18% in constant currencies, with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. EUR 20 million or two points of growth coming from the inclusion of ABAQUS. Therefore, we are essentially reconfirming our previous revenue growth objective of 15-16% which we set at the end of the second quarter. "We are increasing our EPS growth objective to 15-16% from 12-13%, reflecting better performance in the third quarter and the inclusion of ABAQUS going forward. This objective is given excluding acquisition costs and before the deferred revenue write-down. "Specifically, our objectives as well as key data for the fourth quarter and year are listed below: --Fourth quarter total revenue of about EUR 300-305 million, with ABAQUS estimated revenue contribution of about EUR 20 million before the deferred revenue write-down; --Fourth quarter EPS excluding acquisition costs of about EUR 0.64-0.66, with ABAQUS estimated contribution of EUR 0.01 before the deferred revenue write-down; --2005 total revenue of about EUR 930-935 million, with ABAQUS estimated revenue contribution of about EUR 20 million before deferred revenue write-down, compared to the previous objective of EUR 910-915 million; --2005 EPS objective, excluding acquisition costs and before deferred revenue write-down, about EUR 1.56-1.58, representing 15-16% growth, compared to our previous EPS objective, excluding acquisition costs, of EUR 1.52-1.53, representing 12-13% year-over-year-growth; --2005 operating margin of about 28.5-29% excluding acquisition costs and deferred revenue write-down (0.2% 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. estimated from ABAQUS before deferred revenue write-down), compared to our previous objective of about 29% for 2005; --Estimated deferred revenue write-down of about EUR 10 million for the 2005 fourth quarter; --No change to our currency exchange rate assumptions of US$1.25 to 1 euro; "As has been our practice, we are providing our preliminary financial objectives for 2006. Our 2006 constant currency revenue growth objective is about 17-18%, including 7 points of growth from ABAQUS, before the deferred revenue write-down. This leads to a total revenue range for 2006 of about EUR 1.105-1.115 billion, before an estimated EUR 8-9 million deferred revenue write-down, assuming a US$1.25 per euro exchange rate. Looking at profitability in 2006, our goals are to deliver a stable operating margin and a similar level of earnings growth in comparison to 2005, before acquisition costs, deferred revenue write-down and share-based compensation." Endnotes: 1. All comparative figures are given on a year-over-year basis unless specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. otherwise. 2. All financial information is unaudited and reported 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. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (U.S. GAAP). 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 excluding acquisition costs (acquisition costs are primarily comprised of technology amortization in addition to other acquisition-related costs). In addition, certain other financial information, in particular, the Company's financial objectives presented in the Outlook section of this press release, is also not presented in conformity with U.S. GAAP, in particular the presentation of revenue before deferred revenue write-down, and operating income, operating margin and earnings per share excluding acquisition costs (acquisition costs are primarily comprised of technology amortization in addition to other acquisition-related costs) and before the deferred revenue write-down and share-based compensation. 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 non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .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 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 the Company's progress and outlook because it provides a better gauge gauge In manufacturing and engineering, a device used to determine whether a dimension is larger or smaller than a reference standard. A snap gauge, for example, is formed like the letter C, with outer “go” and inner “not go” jaws, and is used to 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 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. , whose reporting currency Reporting Currency The currency used in published reports and financial documents. Notes: All annual and quarterly reports state the currency in which their results are listed. 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, Tuesday Tuesday: see week. , October 25, 2005 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: a) 2005 revenue growth objective in constant currencies, excluding deferred revenue write-down; the calculation of a revenue range, before deferred revenue write-down; 2005 operating margin objective excluding acquisition costs and before deferred revenue write-down and a 2005 EPS objective excluding acquisition costs and before deferred revenue write-down; b) fourth quarter 2005 revenue before deferred revenue write-down and fourth quarter EPS excluding acquisition costs and before deferred revenue write-down; c) 2006 revenue growth objective in constant currencies before deferred revenue write-down, 2006 operating margin outlook excluding acquisition costs and before deferred revenue and share-based payments, and our 2006 EPS growth outlook excluding acquisition costs and before deferred revenue write-down and share-based payments; and d) ABAQUS estimated 2005 fourth quarter revenue and EPS contribution before deferred revenue write-down, ABAQUS estimated contribution to our 2006 revenue growth objective before deferred revenue write-down and ABAQUS estimated deferred revenue write-down for the fourth quarter 2005 and full year 2006 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 “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. 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; 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 integration of ABAQUS, following the completion of its acquisition in early October, 2005. 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, 2004, which was filed with the SEC on June June: see month. 28, 2005, could materially affect the Company's financial position or results of operations. About Dassault Systemes As world leader in 3D and PLM (Product Lifecycle Management) solutions, the Dassault Systemes group brings value to more than 80,000 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 (Spatial Having to do with space. Contrast with "temporal," which deals with time. - ACIS(R)). 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.
3Q05 3Q04 Variation
--------- --------- ----------
Process-Centric excluding PDM 143.9 129.3 11%
PDM 26.5 23.7 12%
Design-Centric 43.4 35.0 24%
Revenue 213.8 188.0 14%
Americas 74.7 60.6 23%
Europe 85.0 83.4 2%
Asia 54.1 44.0 23%
Operating Income (1) 50.8 46.3 10%
Operating Margin (1) 23.8% 24.6%
Net Income (1) 38.0 32.3 18%
EPS (1) 0.32 0.28 14%
Closing Headcount 5,114 4,363 17%
Average Rate USD per Euros 1.22 1.22 0%
Average Rate JPY per Euros 135.6 134.4 1%
(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.
YTD05 YTD04 Variation
--------- --------- ----------
Process-Centric excluding PDM 425.6 386.0 10%
PDM 74.8 66.1 13%
Design-Centric 129.9 104.6 24%
Revenue 630.3 556.7 13%
Americas 200.6 162.3 24%
Europe 280.4 251.4 12%
Asia 149.3 143.0 4%
Operating Income (1) 151.4 142.8 6%
Operating Margin (1) 24.0% 25.7%
Net Income (1) 107.2 97.4 10%
EPS (1) 0.92 0.84 10%
Average Rate USD per Euros 1.26 1.23 3%
Average Rate JPY per Euros 136.0 133.5 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, 2005 30, 2004 30, 2005 30, 2004
------------ ------------ ----------- -----------
New licenses
revenue 85.8 68.5 241.4 202.4
Recurring licenses
and product
development
revenue 97.5 88.2 290.0 262.1
------------ ------------ ----------- -----------
Software revenue 183.3 156.7 531.4 464.5
Service and other
revenue 30.5 31.3 98.9 92.2
------------ ------------ ----------- -----------
Total Revenue EUR 213.8 EUR 188.0 EUR 630.3 EUR 556.7
Software 5.9 5.2 18.5 15.0
Service and other 26.9 25.3 82.3 75.9
------------ ------------ ----------- -----------
Total Cost of
Revenue EUR 32.8 EUR 30.5 EUR 100.8 EUR 90.9
Gross Profit EUR 181.0 EUR 157.5 EUR 529.5 EUR 465.8
Research and
Development 62.0 55.1 179.9 162.6
Marketing and Sales 54.1 44.8 156.5 125.8
General
Administration 14.1 11.3 41.7 34.6
Acquisition Costs 0.3 0.2 1.1 1.3
------------ ------------ ----------- -----------
Total Research,
Selling,
Administration and
Acquisition
expenses EUR 130.5 EUR 111.4 EUR 379.2 EUR 324.3
============ ============ =========== ===========
Operating
Income (1) EUR 50.5 EUR 46.1 EUR 150.3 EUR 141.5
Financial revenue
and Other 6.9 2.7 12.7 6.9
------------ ------------ ----------- -----------
Income before income
taxes 57.4 48.8 163.0 148.4
Income tax expense (19.6) (16.5) (56.5) (52.1)
------------ ------------ ----------- -----------
Net Income (1) EUR 37.8 EUR 32.3 EUR 106.5 EUR 96.3
============ ============ =========== ===========
Basic net income per
share EUR 0.33 EUR 0.29 EUR 0.94 EUR 0.85
============ ============ =========== ===========
Diluted net income
per share (1) EUR 0.32 EUR 0.28 EUR 0.91 EUR 0.83
============ ============ =========== ===========
Basic weighted
average shares
outstanding (in
millions) 114.1 113.2 113.8 113.2
============ ============ =========== ===========
Diluted weighted
average shares
outstanding (in
millions) 118.0 116.2 117.1 116.0
(1) Excluding acquisition costs, operating income, net income and
diluted EPS would have been as follows:
Operating Income EUR 50.8 EUR 46.3 EUR 151.4 EUR 142.8
============ ============ =========== ===========
Net Income EUR 38.0 EUR 32.3 EUR 107.2 EUR 97.4
============ ============ =========== ===========
Diluted net income
per share EUR 0.32 EUR 0.28 EUR 0.92 EUR 0.84
============ ============ =========== ===========
Supplemental Disclosures Regarding Non-U.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, 2005. In particular, the table presents operating income, operating margin and earnings per share excluding 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 for comparing operating performance of the Company to other companies in the industry. Since these measures of performance are not calculated in accordance 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 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 30, September 30, Variation
2005 2004
---------------- --------------- ---------
New licenses revenue 85.8 68.5 25.3%
Recurring licenses and
product development
revenue 97.5 88.2 10.5%
---------------- ---------------
Software revenue 183.3 156.7 17.0%
Service and other revenue 30.5 31.3 (2.6)%
---------------- ---------------
Total Revenue EUR 213.8 EUR 188.0 13.7%
Software 5.9 5.2 13.5%
Service and other 26.9 25.3 6.3%
---------------- ---------------
Total Cost of Revenue EUR 32.8 EUR 30.5 7.5%
Gross Profit EUR 181.0 EUR 157.5 14.9%
Research and Development 62.0 55.1 12.5%
Marketing and Sales 54.1 44.8 20.8%
General Administration 14.1 11.3 24.8%
---------------- ---------------
Total Research, Selling,
Administration EUR 130.2 EUR 111.2 17.1%
================ ===============
Operating Income EUR 50.8 EUR 46.3 9.7%
Financial revenue and Other 6.9 2.7 155.6%
---------------- ---------------
Income before income taxes 57.7 49.0 17.8%
Income tax expense (19.7) (16.7)
---------------- ---------------
Net Income EUR 38.0 EUR 32.3 17.6%
================ ===============
Diluted net income per
share EUR 0.32 EUR 0.28 14.3%
================ ===============
Diluted weighted average
shares outstanding (in
millions) 118.0 116.2
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, 2005 September 30, 2004
---------------------------- ---------------------------
Ac- Excluding Ac- Excluding
Reported quisi- Acqui- Reported quisi- Acqui-
Amount tion sition Amount tion sition
Costs Costs Costs Costs
--------- ------- --------- --------- ------- ---------
New licenses
revenue 85.8 85.8 68.5 68.5
Recurring
licenses and
product
develop-ment
revenue 97.5 97.5 88.2 88.2
--------- --------- --------- ---------
Software
revenue 183.3 183.3 156.7 156.7
Service and
other revenue 30.5 30.5 31.3 31.3
--------- --------- --------- ---------
Total
Revenue EUR 213.8 EUR 213.8 EUR 188.0 EUR 188.0
Software 5.9 5.9 5.2 5.2
Service and
other 26.9 26.9 25.3 25.3
--------- --------- --------- ---------
Total Cost
of Revenue EUR 32.8 EUR 32.8 EUR 30.5 EUR 30.5
Gross
Profit EUR 181.0 EUR 181.0 EUR 157.5 EUR 157.5
Research and
Develop-ment 62.0 62.0 55.1 55.1
Marketing and
Sales 54.1 54.1 44.8 44.8
General
Admini-
stration 14.1 14.1 11.3 11.3
Acquisition
Costs 0.3 (0.3) - 0.2 (0.2) -
--------- --------- --------- ---------
Total
Research,
Selling,
Admini-
stration EUR 130.5 EUR 130.2 EUR 111.4 EUR 111.2
========= ========= ========= =========
Operating
Income EUR 50.5 EUR 50.8 EUR 46.1 EUR 46.3
Financial
revenue and
Other 6.9 6.9 2.7 2.7
--------- --------- --------- ---------
Income before
income taxes 57.4 57.7 48.8 49.0
Income tax
expense (19.6) (0.1) (19.7) (16.5) (0.2) (16.7)
--------- --------- --------- ---------
Net Income EUR 37.8 EUR 38.0 EUR 32.3 EUR 32.3
========= ========= ========= =========
Diluted net
income per
share EUR 0.32 EUR 0.32 EUR 0.28 EUR 0.28
========= ========= ========= =========
Diluted
weighted
average
shares out-
standing (in
millions) 118.0 118.0 116.2 116.2
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 30, September 30,
2005 2004 Variation
---------------- --------------- ---------
New licenses revenue 241.4 202.4 19.3%
Recurring licenses and
product development
revenue 290.0 262.1 10.6%
---------------- ---------------
Software revenue 531.4 464.5 14.4%
Service and other revenue 98.9 92.2 7.3%
---------------- ---------------
Total Revenue EUR 630.3 EUR 556.7 13.2%
Software 18.5 15.0 23.3%
Service and other 82.3 75.9 8.4%
---------------- ---------------
Total Cost of Revenue EUR 100.8 EUR 90.9 10.9%
Gross Profit EUR 529.5 EUR 465.8 13.7%
Research and Development 179.9 162.6 10.6%
Marketing and Sales 156.5 125.8 24.4%
General Administration 41.7 34.6 20.5%
---------------- ---------------
Total Research, Selling,
Administration EUR 378.1 EUR 323.0 17.1%
================ ===============
Operating Income EUR 151.4 EUR 142.8 6.0%
Financial revenue and Other 12.7 6.9 84.1%
---------------- ---------------
Income before income taxes 164.1 149.7 9.6%
Income tax expense (56.9) (52.3)
---------------- ---------------
Net Income EUR 107.2 EUR 97.4 10.1%
================ ===============
Diluted net income per
share EUR 0.92 EUR 0.84 9.5%
================ ===============
Diluted weighted average
shares outstanding (in
millions) 117.1 116.0
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, 2005 September 30, 2004
--------------------------- ---------------------------
Excluding Ex-
Reported Acqui- Acqui- Reported Acqui- cluding
Amount sition sition Amount sition Acqui-
Costs Costs Costs sition
Costs
--------- ------- --------- --------- ------- ---------
New licenses
revenue 241.4 241.4 202.4 202.4
Recurring
licenses and
product
development
revenue 290.0 290.0 262.1 262.1
Software
revenue 531.4 531.4 464.5 464.5
Service and
other revenue 98.9 98.9 92.2 92.2
--------- --------- --------- ---------
Total
Revenue EUR 630.3 EUR 630.3 EUR 556.7 EUR 556.7
Software 18.5 18.5 15.0 15.0
Service and
other 82.3 82.3 75.9 75.9
--------- --------- --------- ---------
Total Cost
of Revenue EUR 100.8 EUR 100.8 EUR 90.9 EUR 90.9
Gross
Profit EUR 529.5 EUR 529.5 EUR 465.8 EUR 465.8
Research and
Development 179.9 179.9 162.6 162.6
Marketing and
Sales 156.5 156.5 125.8 125.8
General
Adminis-
tration 41.7 41.7 34.6 34.6
Acquisition
Costs 1.1 (1.1) - 1.3 (1.3) -
--------- --------- --------- ---------
Total
Research,
Selling,
Adminis-
tration EUR 379.2 EUR 378.1 EUR 324.3 EUR 323.0
========= ========= ========= =========
Operating
Income EUR 150.3 EUR 151.4 EUR 141.5 EUR 142.8
Financial
revenue and
Other 12.7 12.7 6.9 6.9
--------- --------- --------- ---------
Income before
income taxes 163.0 164.1 148.4 149.7
Income tax
expense (56.5) (0.4) (56.9) (52.1) (0.2) (52.3)
--------- --------- --------- ---------
Net
Income EUR 106.5 EUR 107.2 EUR 96.3 EUR 97.4
========= ========= ========= =========
Diluted net
income per
share EUR 0.91 EUR 0.92 EUR 0.83 EUR 0.84
========= ========= ========= =========
Diluted
weighted
average
shares
outstanding
(in millions) 117.1 117.1 116.0 116.0
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions of Euro)
September 30, December 31,
2005 2004
-------------- --------------
ASSETS
Cash and short-term investments 651.4 552.8
Accounts receivable, net 188.7 237.8
Other assets 418.2 308.6
-------------- --------------
Total assets EUR 1,258.3 EUR 1,099.2
LIABILITIES
AND SHAREHOLDERS' EQUITY
Total liabilities 370.6 340.0
Shareholders' equity 887.7 759.2
-------------- --------------
Total liabilities and shareholders' EUR 1,258.3 EUR 1,099.2
equity
DASSAULT SYSTEMES
CONDENSED CASH FLOW STATEMENT
(in millions of Euro)
Three Months ended Nine Months ended
September September Vari- September September Vari-
30, 2005 30, 2004 ation 30, 2005 30, 2004 ation
--------- --------- ------ --------- --------- ------
Net Profit 37.8 32.3 5.5 106.5 96.3 10.2
Changes in
working capital
and non-cash
P&L items 3.4 (2.6) 6.0 53.3 74.4 (21.1)
--------- --------- ------ --------- --------- ------
Net Cash
provided by
operating
activities 41.2 29.7 11.5 159.8 170.7 (10.9)
Acquisition and
sale of assets (6.9) (7.1) 0.2 (22.2) (17.2) (5.0)
ST invest-ments (7.0) 1.5 (8.5) (13.4) 5.5 (18.9)
Acquisition net
of cash (1.4) (1.7) 0.3 (24.4) (2.8) (21.6)
Loans (1.0) 0.0 (1.0) (1.9) (4.7) 2.8
--------- --------- ------ --------- --------- ------
Net Cash
provided used
in investing
activities (16.3) (7.3) (9.0) (61.9) (19.2) (42.7)
Share repurchase
and proceeds
from stocks
options
exercise, net (12.3) (13.7) 1.4 3.1 (1.4) 4.5
Dividend 0.0 0.0 0.0 (43.1) (38.4) (4.7)
--------- --------- ------ --------- --------- ------
Net Cash
provided used
in financing
activities (12.3) (13.7) 1.4 (40.0) (39.8) (0.2)
Effect of
exchange rate
changes on cash (0.8) (0.4) (0.4) 25.3 4.8 20.5
========= ========= ====== ========= ========= ======
Increase
(Decrease) in
cash & cash
equivalents 11.8 8.3 3.5 83.2 116.5 (33.3)
Cash and cash
equivalents at
beginning of
period 612.5 527.8 84.7 541.1 419.6 121.5
Cash and cash
equivalents at
end of period 624.3 536.1 88.2 624.3 536.1 88.2
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