Ansoft Corporation Earnings Nearly Double; Revenue Increases 17%

Ansoft Corporation (NASDAQ:ANST) today announced
financial results for its first quarter of fiscal 2007 ended July 31,
2006. All references to share and per share information, except shares
authorized, included in this press release have been adjusted to
reflect the two-for-one stock split effected in the form of a stock
dividend that was declared on March 7, 2006, and distributed on May 9,
2006.
   Revenue for the first quarter totaled $17.3 million, an increase
of 17% compared to $14.8 million reported in the previous fiscal
year's first quarter.
   On a generally accepted accounting principles (GAAP) basis, net
income for the first quarter was $2.3 million, or $0.09 per diluted
share, representing a 96% increase when compared to GAAP net income of
$1.2 million, or $0.05 per diluted share in the previous fiscal year's
first quarter.
   GAAP net income for first quarter includes employee stock-based
compensation expense of $0.6 million, or $0.02 per diluted share due
to the adoption of Statement of Financial Accounting Standards 123(R)
(SFAS 123(R)). The previous fiscal year's first quarter net income did
not include employee stock-based compensation expense related to SFAS
123(R).
   Additionally, GAAP net income for the first quarter includes
acquisition related amortization of $0.3 million, or $0.01 per diluted
share. This compares to acquisition related amortization of $0.4
million, or $0.01 per diluted share in the previous fiscal year's
first quarter.
   "We are pleased to report strong revenue and earnings growth for
the first quarter," said Nicholas Csendes, Ansoft's President and CEO.
"For the next fiscal quarter, we anticipate continued revenue growth
of around 10-15%."
   Ansoft is a leading developer of high-performance electronic
design automation (EDA) software. Engineers use Ansoft software to
design state-of-the-art electronic products, such as cellular phones,
internet access devices, broadband networking components and systems,
integrated circuits (ICs), printed circuit boards (PCBs), automotive
electronic systems and power electronics. Ansoft markets its products
worldwide through its own direct sales force and has comprehensive
customer-support and training offices throughout North America, Asia
and Europe.
   This press release contains forward-looking statements including
those related to revenue and earnings growth for the current fiscal
year that are made pursuant to the safe harbor provisions of the
Private Securities Litigation Act of 1995. These forward-looking
statements are based on current expectations and assumptions that are
subject to risks and uncertainties that could cause actual results to
differ materially, including, but not necessarily limited to,
management's ability to forecast revenues and control expenses and the
amount, timing and structure of software licenses.
   For further information regarding risks and uncertainties
associated with Ansoft's business, please refer to the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" section of Ansoft's SEC filings, including, but not
limited to, its annual report on Form 10-K and quarterly reports on
Form 10-Q, copies of which may be obtained at Ansoft's website at
www.ansoft.com/about/investor/index.cfm.
   All information in this release is as of August 24, 2006. Ansoft
undertakes no duty to update any forward-looking statement to conform
the statement to actual results or changes in the Company's
expectations.
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                          ANSOFT CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)
                              (unaudited)


                                           Three months ended July 31,
                                               2006          2005
                                           ------------- -------------
Revenue
   License                                       $8,185        $6,820
   Service and other                              9,138         7,970
                                           ------------- -------------
Total revenue                                    17,323        14,790
Costs of revenue
   License                                          120            99
   Service and other                                333           329
                                           ------------- -------------
Total cost of revenue                               453           428
Gross profit                                     16,870        14,362
Operating Expenses
   Sales and marketing                            7,478         7,143
   Research and development                       4,826         4,060
   General and administrative                     1,384         1,383
   Amortization                                     346           369
                                           ------------- -------------
Total operating expenses                         14,034        12,955
                                           ------------- -------------
Income from operations                            2,836         1,407
Net realized loss on sale of securities               -            (2)
Other income, net                                   815           340
                                           ------------- -------------
Income before income taxes                        3,651         1,745
Income tax expense                                1,362           576
                                           ------------- -------------
Net income                                       $2,289        $1,169
                                           ============= =============
Net income per share
    Basic                                         $0.10         $0.05
                                           ============= =============
    Diluted                                       $0.09         $0.05
                                           ============= =============
Weighted average shares used in calculation
   Basic                                         23,609        23,834
                                           ============= =============
   Diluted                                       26,174        25,954
                                           ============= =============


All share and per share information has been adjusted to reflect the
two-for-one stock split effected in the form of 100% stock dividend
that was declared on March 7, 2006, and distributed on May 9, 2006.


                          ANSOFT CORPORATION
                      CONSOLIDATED BALANCE SHEETS
               (In thousands, except per share amounts)
                              (unaudited)


                                                  July 31,   April 30,
                                                    2006       2006
                                                 ---------- ----------

Assets
Current assets
Cash and cash equivalents                          $16,703    $16,456
Accounts receivable, net of allowance for
 doubtful accounts of $640 and $545, respectively   11,890     20,264
Deferred income taxes                                  164        164
Prepaid expenses and other assets                    2,653      1,938
                                                 ---------- ----------
Total current assets                                31,410     38,822

Equipment and furniture, net of accumulated
 depreciation of $6,530 and $6,249, respectively     2,532      2,599
Marketable securities                               36,298     33,621
Other assets                                           140        131
Deferred income taxes                                6,344      6,226
Goodwill                                             1,239      1,239
Other intangible assets, net                         2,096      2,442
                                                 ---------- ----------
Total assets                                       $80,059    $85,080
                                                 ========== ==========

Liabilities and stockholders' equity
Current liabilities
Accounts payable                                      $189       $274
Accrued payroll                                      1,176      3,027
Accrued income taxes                                 1,526        928
Other accrued expenses                               2,890      3,609
Current portion of deferred revenue                 19,204     19,893
                                                 ---------- ----------
Total current liabilities                           24,985     27,731
Long-term portion of deferred revenue                  940      1,088
                                                 ---------- ----------
Total liabilities                                   25,925     28,819

Stockholders' equity
Preferred stock, par value $0.01 per share; 1,000
 shares authorized, no shares outstanding                -          -
Common stock, par value $0.01 per share; 50,000
 shares authorized; issued 28,672 and 28,576
 shares, respectively and outstanding 23,573 and
 23,764, respectively                                  287        286
Additional paid-in capital                          77,926     76,795
Treasury stock, 5,099 and 4,812 shares,
 respectively                                      (43,650)   (37,913)
Accumulated other comprehensive loss, net           (1,350)    (1,539)
Retained earnings                                   20,921     18,632
                                                 ---------- ----------
Total stockholders' equity                          54,134     56,261
                                                 ---------- ----------
 Total liabilities and stockholders' equity        $80,059    $85,080
                                                 ========== ==========

All share, except shares authorized, information has been adjusted to
reflect the two-for-one stock split effected in the form of 100% stock
dividend that was declared on March 7, 2006, and distributed on May 9,
2006.
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