Ansoft (NASDAQ:ANST)
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Ansoft Corporation (NASDAQ:ANST) today announced
financial results for its fourth quarter of fiscal 2006 ended April
30, 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 fourth quarter totaled $24.7 million, an increase
of 14% compared to $21.7 million reported in the previous fiscal
year's fourth quarter. On a generally accepted accounting principles
(GAAP) basis, net income for the fourth quarter was $8.3 million, or
$0.32 per diluted share, representing a 75% increase when compared to
GAAP net income of $4.7 million, or $0.18 per diluted share in the
previous fiscal year's fourth quarter. Results for the 2006 fourth
quarter included a $1.0 million, or $0.04 per share, income tax
benefit associated with the reversal of the Company's remaining
valuation allowance for certain U.S. Federal net deferred tax assets.
Revenue for the fiscal year totaled $77.2 million, compared to
$67.7 million reported in the previous fiscal year. On a generally
accepted accounting principles (GAAP) basis, net income for the fiscal
year was $17.8 million, or $0.69 per diluted share, representing an
89% increase when compared to GAAP net income of $9.4 million, or
$0.36 per diluted share in the previous fiscal year. Results for the
current fiscal year include $2.4 million, or $0.09 per share, of
income tax benefit for a federal tax credit claim and refund related
to foreign taxes previously paid and $1.0 million, or $0.04 per share,
of income tax benefit associated with the reversal of the Company's
remaining valuation allowance for certain U.S. Federal net deferred
tax assets.
In addition to using GAAP results in evaluating the Company's
business, management believes it is useful to measure results using a
non-GAAP measure of net income, which excludes amortization of
intangible assets and the related tax benefit. A reconciliation of the
non-GAAP amounts to the appropriate GAAP amounts, for the three months
and for the years ended April 30, 2006 and 2005 is included with this
press release. The additional non-GAAP financial information presented
should be considered in conjunction with, and not as a substitute for,
or superior to, the financial information presented in accordance with
GAAP.
On a non-GAAP basis, net income for the fourth quarter was $8.5
million, or $0.33 per diluted share, representing a 72% increase when
compared to non-GAAP net income of $4.9 million, or $0.19 per diluted
share in the previous fiscal year's fourth quarter.
On a non-GAAP basis, net income for the fiscal year was $18.7
million, or $0.72 per diluted share, representing an 80% increase when
compared to non-GAAP net income of $10.4 million, or $0.40 per diluted
share, in the previous fiscal year.
"We are pleased to report record revenue and earnings for the
fourth quarter," said Nicholas Csendes, Ansoft's President and CEO.
"For the next fiscal year, 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 May 23, 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 April 30, Fiscal Year ended April 30,
2006 2005 2006 2005
-------------- ------------- ------------- -------------
Revenue
License $15,655 $14,310 $42,849 $39,322
Service and
other 9,083 7,356 34,362 28,348
-------------- ------------- ------------- -------------
Total revenue 24,738 21,666 77,211 67,670
Costs of
revenue
License 167 142 535 505
Service and
other 401 334 1,420 1,349
-------------- ------------- ------------- -------------
Total cost of
revenue 568 476 1,955 1,854
Gross profit 24,170 21,190 75,256 65,816
Operating
Expenses
Sales and
marketing 9,029 8,586 31,506 31,108
Research and
development 4,639 4,671 17,016 16,901
General and
adminis-
trative 1,368 1,269 5,060 4,861
Amortization 359 344 1,467 1,552
-------------- ------------- ------------- -------------
Total
operating
expenses 15,395 14,870 55,049 54,422
-------------- ------------- ------------- -------------
Income from
operations 8,775 6,320 20,207 11,394
Net realized
gain (loss)
on sale of
securities - - (2) 732
Other income,
net 648 499 1,397 1,474
-------------- ------------- ------------- -------------
Income before
income taxes 9,423 6,819 21,602 13,600
Income tax
expense 1,150 2,083 3,805 4,159
-------------- ------------- ------------- -------------
Net income $8,273 $4,736 $17,797 $9,441
============== ============= ============= =============
Net income per
share
Basic $0.35 $0.20 $0.75 $0.41
============== ============= ============= =============
Diluted $0.32 $0.18 $0.69 $0.36
============== ============= ============= =============
Weighted average shares used
in calculation
Basic 23,685 23,732 23,694 23,242
============== ============= ============= =============
Diluted 25,811 26,128 25,851 25,892
============== ============= ============= =============
ANSOFT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
April 30, April 30,
2006 2005
---------- ----------
Assets
Current assets
Cash and cash equivalents $16,456 $11,910
Accounts receivable, net of allowance for
doubtful accounts of $545 and $425, respectively 20,264 17,388
Deferred income taxes 164 229
Prepaid expenses and other assets 1,938 1,148
---------- ----------
Total current assets 38,822 30,675
Equipment and furniture, net of accumulated
depreciation of $6,249 and $6,961, respectively 2,599 2,811
Marketable securities 33,621 28,496
Other assets 131 146
Deferred income taxes 6,226 6,177
Goodwill 1,239 1,239
Other intangible assets, net 2,442 3,877
---------- ----------
Total assets $85,080 $73,421
========== ==========
Liabilities and stockholders' equity
Current liabilities
Accounts payable $274 $231
Accrued payroll 3,027 2,290
Other accrued expenses 4,537 3,076
Current portion of deferred revenue 19,893 17,500
---------- ----------
Total current liabilities 27,731 23,097
Long-term portion of deferred revenue 1,088 1,039
---------- ----------
Total liabilities 28,819 24,136
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 28,576 and 27,802
shares, respectively and outstanding 23,764 and
24,166, respectively 286 280
Additional paid-in capital 76,795 70,270
Treasury stock, 4,812 and 3,636 shares,
respectively (37,913) (21,762)
Accumulated other comprehensive loss, net (1,539) (338)
Retained earnings 18,632 835
---------- ----------
Total stockholders' equity 56,261 49,285
---------- ----------
Total liabilities and stockholders' equity $85,080 $73,421
========== ==========
ANSOFT CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(In thousands, except per share amounts)
(unaudited)
Pursuant to the requirement of Regulation G, the Company has provided
a reconciliation of the non-GAAP financial measure to the most
directly comparable GAAP financial measure. These measures differ from
GAAP in that they exclude acquisition-related amortization.
Management uses this non-GAAP financial measure for internal
managerial purposes, when publicly providing its business outlook, and
as a means to evaluate period-to-period comparisons. The Company has
provided this non-GAAP financial measurement in addition to GAAP
financial results because it believes the non-GAAP financial measure
provides useful information to investors in that it provides
additional insight into our core software and service business
operations and a consistent basis for comparison between quarters not
influenced by certain non-cash items that are not used by management
when evaluating the Company's operating expenses (such as research and
development, sales and marketing, and general and administrative
expenses). The additional non-GAAP financial information presented
should be considered in conjunction with, and not as a substitute for,
or superior to, the financial information presented in accordance with
GAAP.
The Company does not acquire businesses on a predictable cycle. As a
result, management has difficulty comparing the Company's
profitability as measured by net income on a period to period basis
unless it excludes acquisition-related amortization because it may
appear in one period but not in the comparable period. Further,
management finds it useful to exclude non-cash charges in order to
more readily correlate the Company's operating activities with the
Company's ability to generate cash from operations and more accurately
predict liquidity requirements and the operational strength of the
Company. Finally, this same financial measure is used by management to
track the Company's performance relative to both internally and
externally communicated financial targets. The Company discloses this
information to the public to enable investors to more easily assess
the company's performance on the same basis applied by management and
to ease comparison on both a GAAP and non-GAAP basis among its
principal competitors that separately identify acquisition-related
amortization.
A limitation associated with this non-GAAP measure is that it does not
reflect the periodic costs of certain capitalized intangible assets
used in generating revenues in the Company's business. Management
evaluates the costs of such intangible assets in accordance with SFAS
no. 141 "Business Combinations" which requires allocating the purchase
price in a business combination between intangible and tangible assets
based on the purchase method of accounting.
Three months ended Fiscal year ended
April 30, April 30,
------------------ -----------------
2006 2005 2006 2005
--------- -------- -------- --------
GAAP net income $8,273 4,736 $17,797 $9,441
Amortization of intangibles (1) 223 213 910 962
--------- -------- -------- --------
Non-GAAP net income $8,496 $4,949 $18,707 $10,403
========= ======== ======== ========
Non-GAAP net income per diluted
common share $0.33 $0.19 $0.72 $0.40
========= ======== ======== ========
Weighted average diluted shares
used in calculation 25,811 26,128 25,851 25,892
========= ======== ======== ========
(1) Amortization expense net of a 38% tax rate.
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