Ansoft Corporation Revenue Increases Nearly 20%

Share Name	Share Symbol	Market	Type
Ansoft Corp (MM)	NASDAQ:ANST	NASDAQ	Common Stock

Ansoft (NASDAQ:ANST)
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Ansoft Corporation (NASDAQ: ANST) today announced financial results for its fourth quarter of fiscal 2008 ended April 30, 2008. Information Dissemination PLEASE NOTE: In light of the press release issued on March 31, 2008, announcing the signing of a definitive agreement relating to the acquisition of Ansoft Corporation by ANSYS Inc., there will be no conference call to discuss the results of the fourth fiscal quarter of 2008. Results for the Fourth Quarter and Fiscal Year 2008 Revenue for the fourth quarter totaled $33.9 million, an increase of 19%, compared to $28.6 million reported in the previous fiscal year's fourth quarter. On a non-GAAP basis, net income for the fourth quarter was $10.7 million, or $0.43 per diluted share, compared to net income of $8.7 million, or $0.33 per diluted share in the previous fiscal year�s fourth quarter, representing a 30% increase in diluted earnings per share. Non-GAAP net income excludes merger-related expenses, net of taxes, stock-based compensation, net of taxes, and amortization of intangibles from acquisitions, net of taxes. See �Discussion of Non-GAAP Financial Measures� below for further information. On a GAAP basis, net income for the fourth quarter was $8.5 million, or $0.34 per diluted share, compared to GAAP net income of $7.9 million, or $0.30 per diluted share in the previous fiscal year's fourth quarter. Current quarter results include $1.7 million, or $0.07 per diluted share in merger-related expenses. �We experienced revenue growth in both domestic and international markets and in both product lines,� said Nicholas Csendes, Ansoft�s president and CEO. �We are pleased to have had such a strong finish to our fiscal year with nearly 20% growth in revenue during the fourth quarter.� Csendes noted, �On March 31, 2008, we announced that Ansoft and ANSYS had signed a definitive agreement for ANSYS to acquire Ansoft. We believe there are strong synergies between the two companies and are very excited about the combination. In light of the proposed transaction, we will not be providing guidance for future periods.� Revenue for the fiscal year totaled $103.4 million, an increase of 16% compared to $89.1 million reported in the previous fiscal year. On a non-GAAP basis, net income for the fiscal year was $27.6 million, or $1.09 per diluted share, compared to net income of $23.1 million, or $0.88 per diluted share in the previous fiscal year, representing a 24% increase in diluted earnings per share. Results for the previous fiscal year include a tax benefit of $0.9 million, or $0.03 per diluted share, for the U.S. Research and Development Tax Credit enacted retroactive by Congress in December 2006 that relates to credits earned in fiscal year 2006. On a GAAP basis, net income for the fiscal year was $24.1 million, or $0.95 per diluted share, compared to GAAP net income of $20.2 million, or $0.77 per diluted share in the previous fiscal year. Current year results include $1.7 million, or $0.07 per diluted share in merger-related expenses. Results for the previous fiscal year include a tax benefit of $0.9 million, or $0.03 per diluted share for the U.S. Research and Development Tax Credit enacted retroactive by Congress in December 2006 that relates to credits earned in fiscal year 2006. Discussion of Non-GAAP Financial Measures We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business and in making operating decisions. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the continuing operations of our business. By continuing operations, we mean the ongoing revenue and expenses of the business excluding certain items that render comparisons with prior periods or analysis of ongoing operating trends more difficult, such as expenses not directly related to the actual cash costs of development, sale, delivery or support of our products and services. Consistent with this approach, we believe that providing the non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view our financial results in the way management views the operating results. We further believe that providing this information allows investors to not only better understand our financial performance but, more importantly, to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. While management uses these non-GAAP financial measures as a tool to enhance their understanding of certain aspects of our financial performance, management does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Further, investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, some of the adjustments to our GAAP financial measures reflect the inclusion or exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future. In addition, other companies, including other companies in our industry, may calculate non-GAAP net income (loss)�differently than we do, limiting its usefulness as a comparative tool. Management compensates for these limitations by providing specific information regarding the GAAP amounts included and excluded from the non-GAAP financial measures. In addition, management evaluates the non-GAAP financial measures together with the most directly comparable GAAP financial information. A detailed explanation of each of the adjustments to the non-GAAP financial measures we use is described below. This press release also contains a reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure. Amortization of intangibles from acquisitions and its related tax impact. We incur amortization expense related to various acquisitions we have made over the years. Management excludes these expenses and their related tax impact for the purpose of calculating non-GAAP net income and non-GAAP diluted earnings per share when it evaluates our continuing operational performance because these costs are fixed at the time of an acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by management after the acquisition. Accordingly, management does not consider these expenses for purposes of evaluating our performance during the applicable time period after the acquisition, and it excludes such expenses when making decisions to allocate resources. We believe that providing this non-GAAP financial measure is useful to investors because it allows investors to evaluate the effectiveness of the methodology and information used by management in its financial and operational decision-making. Stock-based compensation expense and its related tax impact. We incur expense related to stock-based compensation included in our GAAP presentation of sales and marketing expense, research and development expense and general and administrative expense. Although stock-based compensation is an expense and viewed as a form of compensation, management excludes these expenses for the purpose of calculating non-GAAP net income and non-GAAP diluted earnings per share when it evaluates our continuing operational performance. Specifically, we exclude stock-based compensation during our annual budgeting process. The annual budgeting process is the primary mechanism whereby we allocate resources to various initiatives and operational requirements. Additionally, the annual review by the board of directors during which it compares our historical business model and profitability as it relates to the planned business model and profitability for the forthcoming year excludes the impact of stock-based compensation. We believe that providing this non-GAAP financial measure is useful to investors because it allows investors to evaluate our operating results and the effectiveness of the methodology used by management to review our operating results. Further, we believe that excluding stock-based compensation expense allows for a more accurate comparison of our financial results to previous periods during which our equity compensation programs were not required to be reflected in our statements of operations. Merger-related expenses and its related tax impact. We incurred professional fees related to our pending merger with ANSYS, Inc during the fourth quarter of the current fiscal year. Management excluded these expenses and their related tax impact for the purpose of calculating non-GAAP net income and non-GAAP diluted earnings per share when it evaluated our continuing operational performance because these costs are specific to the pending merger and not our ongoing operations. We believe that providing this non-GAAP financial measure is useful to investors because it allows investors to evaluate the effectiveness of the methodology and information used by management in its financial and operational decision-making. Pursuant to the requirements of Regulation G, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures as listed below: � � � � GAAP Reporting Measure � � Non-GAAP Reporting Measure � Net Income Non-GAAP Net Income Diluted Earnings Per Share Non-GAAP Diluted Earnings Per Share About Ansoft Corporation Ansoft is a leading developer of high-performance electronic design automation (EDA) software. Engineers use Ansoft software to achieve first-pass system success when designing mobile communication and Internet-access devices, broadband networking components and systems, integrated circuits (ICs), printed circuit boards (PCBs) and electromechanical systems. 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. Important Additional Information to be Filed with the SEC In connection with the proposed acquisition of Ansoft by ANSYS, Inc., ANSYS filed with the SEC a registration statement on Form S-4 (Registration No. 333-150435), which includes a preliminary prospectus/proxy statement of ANSYS and Ansoft and other relevant materials in connection with the proposed transaction. This material is not a substitute for the prospectus/proxy statement regarding the proposed transaction. Investors and security holders of ANSYS and Ansoft are urged to read the preliminary prospectus/proxy statement and the other relevant material and the final prospectus/proxy statement when they become available because they contain important information about ANSYS, Ansoft and the proposed transaction. The prospectus/proxy statement and other relevant materials, and any and all documents filed by ANSYS or Ansoft with the SEC, may be obtained free of charge at the SEC�s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by ANSYS by directing a written request to ANSYS, Inc., Southpointe, 275 Technology Drive, Canonsburg, Pennsylvania 15317, Attention: Investor Relations. Investors and security holders may obtain free copies of the documents filed with the SEC by Ansoft by directing a written request to Ansoft Corporation, 225 West Station Square Drive, Suite 200, Pittsburgh, PA 15219, Attention: Investor Relations. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROSPECTUS/PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Participants in the Solicitation ANSYS, Ansoft and their respective executive officers, directors and trustees may be deemed to be participants in the solicitation of proxies from the security holders of Ansoft in connection with the proposed transaction. Information about the executive officers and directors of ANSYS and their ownership of ANSYS common stock is set forth in the proxy statement for ANSYS� 2008 Annual Meeting of Stockholders, which was filed with the SEC on April 3, 2008. Information about the executive officers and directors of Ansoft and their ownership of Ansoft common stock is set forth in the proxy statement for Ansoft�s 2007 Annual Meeting of Stockholders, which was filed with the SEC on July 26, 2007. Investors and security holders may obtain additional information regarding the direct and indirect interests of ANSYS, Ansoft and their respective executive officers, directors and trustees in the proposed transaction by reading the prospectus/proxy statement referred to above. Safe Harbor and Forward-Looking Statements Pursuant to the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, Ansoft notes that any statements contained in this press release that are not historical facts are forward-looking statements. Such forward-looking statements include, but are not limited to, statements by Ansoft�s president and CEO, statements regarding Ansoft's or management's intentions, hopes, beliefs, expectations, projections, plans for the future and estimates and statements regarding the proposed acquisition of Ansoft by ANSYS, Inc. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include the risk of failing to obtain any regulatory or stockholder approvals or satisfy other conditions to the acquisition of Ansoft by ANSYS; the risk that the businesses of ANSYS and Ansoft may not be combined successfully or that such combination may take longer or cost more to accomplish than expected; the risk that the proposed transaction will not close or that closing will be delayed; the risk that Ansoft�s business will suffer due to uncertainty related to the transaction; the risk that Ansoft�s sales cycle may lengthen due to uncertainty related to the proposed transaction; the risk that Ansoft�s management will be distracted due to the proposed transaction; the risk that Ansoft will continue to incur significant expenses related to the proposed merger prior to its closing that must be paid even if the merger is not completed; as well as other risks and uncertainties that are detailed from time to time in reports filed by Ansoft with the Securities and Exchange Commission. For further information regarding risks and uncertainties associated with Ansoft�s business, please refer to Ansoft�s public reports filed with the SEC, including, but not limited to, its annual report on Form 10-K for the fiscal year ended April 30, 2007, 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, as well as the prospectus/proxy statement referred to above. All information in this release is as of May 29, 2008. Ansoft undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in Ansoft�s expectations. ANSOFT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (unaudited) � � Three months endedApril 30, Fiscal year endedApril 30, 2008 � 2007 2008 � 2007 Revenue License $ 22,668 $ 18,756 $ 59,744 $ 51,026 Service and other � 11,251 � 9,823 � 43,610 � 38,113 Total revenue 33,919 28,579 103,354 89,139 Costs of revenue License 222 182 681 607 Service and other � 605 � 494 � 1,913 � 1,590 Total cost of revenue 827 676 2,594 2,197 Gross profit 33,092 27,903 100,760 86,942 Operating Expenses Sales and marketing 12,041 10,146 37,795 33,792 Research and development 5,180 5,090 19,453 19,662 General and administrative 1,241 1,597 5,336 5,672 Merger-related expenses 1,728 - 1,728 - Amortization � 295 � 290 � 1,170 � 1,272 Total operating expenses � 20,485 � 17,123 � 65,482 � 60,398 Income from operations 12,607 10,780 35,278 26,544 Other income, net � 1,486 � 668 � 3,820 � 2,636 Income before income taxes 14,093 11,448 39,098 29,180 Income tax expense � 5,589 � 3,514 � 14,983 � 8,936 Net income $ 8,504 $ 7,934 $ 24,115 $ 20,244 Net income per share Basic $ 0.36 $ 0.33 $ 1.03 $ 0.86 Diluted $ 0.34 $ 0.30 $ 0.95 $ 0.77 Weighted average shares used in calculation Basic � 23,307 � 23,804 � 23,415 � 23,650 Diluted � 25,037 � 26,233 � 25,346 � 26,182 ANSOFT CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) (unaudited) � � April 30, April 30, 2008 2007 � Assets Current assets Cash and cash equivalents $ 46,012 $ 49,356 Accounts receivable, net of allowance for doubtful accounts of $1,331 and $973, respectively 34,690 24,994 Deferred income taxes 1,292 1,441 Prepaid expenses and other current assets � 2,418 � � 2,566 � Total current assets 84,412 78,357 � Equipment and furniture, net of accumulated depreciation of $8,015 and $7,019, respectively � 2,366 2,514 Marketable securities 29,210 22,383 Other assets 197 155 Deferred income taxes 4,452 5,352 Goodwill 1,239 1,239 Other intangible assets, net � - � � 1,170 � Total assets $ 121,876 � $ 111,170 � � Liabilities and stockholders' equity Current liabilities Accounts payable $ 787 $ 626 Accrued payroll 4,360 3,380 Accrued income taxes 890 603 Other accrued expenses 6,466 4,130 Current portion of deferred revenue � 33,739 � � 26,244 � Total current liabilities 46,242 34,983 Accrued income taxes 3,007 - Long-term portion of deferred revenue � 1,225 � � 1,404 � Total liabilities 50,474 36,387 � 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 30,240 and 29,258 shares, respectively and outstanding 23,489 and 23,956, respectively 302 293 Additional paid-in capital 96,217 85,754 Treasury stock, 6,751 and 5,302 shares, respectively (88,188 ) (49,176 ) Accumulated other comprehensive income (loss), net 80 (964 ) Retained earnings � 62,991 � � 38,876 � Total stockholders' equity � 71,402 � � 74,783 � Total liabilities and stockholders' equity $ 121,876 � $ 111,170 � ANSOFT CORPORATION RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (In thousands, except per share amounts) (unaudited) � � Three months ended April 30, Fiscal year ended April 30, 2008 � 2007 2008 � 2007 GAAP net income $ 8,504 $ 7,934 $ 24,115 $ 20,244 Merger-related expenses, net of tax (1) 1,728 - 1,728 - Stock-based compensation expense, net of tax (2) 242 563 993 2,040 Amortization of intangibles from acquisitions, net of tax (3) � 197 � 196 � 782 � 847 Non-GAAP net income $ 10,671 $ 8,693 $ 27,618 $ 23,131 Non-GAAP net income per diluted common share $ 0.43 $ 0.33 $ 1.09 $ 0.88 Weighted average diluted shares used in calculation � 25,037 � 26,233 � 25,346 � 26,182 � (1) Merger-related expenses are generally not deductible for tax. (2) A portion of outstanding options are incentive stock options. A tax benefit is recorded when a disqualifying disposition event has occurred. (3) A portion of amortization expense is not deductible for tax.

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ANST Ansoft Corp (MM)