16
UNITED STATES-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-20853
ANSYS, Inc.
(exact name of registrant as specified in its charter)
DELAWARE 04-3219960
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
275 Technology Drive, Canonsburg, PA 15317
(Address of principal executive offices) (Zip Code)
724-746-3304
(Registrant's telephone number, including area code)
Indicate by a check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past
90 days.
Yes X No
---- ----
The number of shares of the Registrant's Common Stock,
par value $.01 per share, outstanding as of August 4,
2000 was 15,172,814 shares.
ANSYS, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I. FINANCIAL INFORMATION ---------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - 3
June 30, 2000 and December 31, 1999
Condensed Consolidated Statements of 4
Income - Three and Six Months Ended
June 30, 2000 and June 30, 1999
Condensed Consolidated Statements of 5
Cash Flows - Six Months Ended June 30,
2000 and June 30, 1999
Notes to Condensed Consolidated 6
Financial Statements
Review Report of Independent 7
Accountants
Item 2. Management's Discussion and Analysis of 8-14
Financial Condition and Results of
Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 4. Submission of Matters to a Vote of
Security Holders 15
Item 6. Exhibits and Reports Filed on Form 8-K 16
SIGNATURES 17
EXHIBIT INDEX 18
Trademarks used in this Form 10-Q: ANSYS(r) and DesignSpace(r) are
registered trademarks of SAS IP, Inc., a wholly-owned subsidiary
of ANSYS, Inc.
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements:
ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
June 30, Dec. 31,
2000 1999
----------- -------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 23,873 $ 10,401
Short-term investments 34,706 46,731
Accounts receivable, less allowance for
doubtful accounts of $1,750 in 2000 and
$1,700 in 1999 9,510 10,518
Other current assets 3,128 2,929
Deferred income taxes 477 336
--------- ---------
Total current assets 71,694 70,915
Securities available for sale - 182
Long-term investment 375 -
Property and equipment, net 4,390 3,529
Capitalized software costs, net 501 676
Goodwill, net 463 428
Other intangibles, net 1,464 1,518
Deferred income taxes 6,456 6,643
----------- ---------
Total assets $ 85,343 $ 83,891
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 89 $ 222
Accrued bonuses 1,559 2,882
Other accrued expenses and liabilities 4,062 3,750
Customer prepayments 131 140
Deferred revenue 13,819 11,266
----------- ---------
Total current liabilities 19,660 18,260
Stockholders' equity:
Preferred stock, $.01 par value,
2,000,000 shares authorized - -
Common stock, $.01 par value; 50,000,000
shares authorized; 16,584,758 shares
issued in both 2000 and 1999 166 166
Additional paid-in capital 37,462 37,543
Less treasury stock, at cost: 1,022,128
shares held in 2000 and 339,358 shares
held in 1999 (10,951) (2,375)
Retained earnings 39,006 30,427
Accumulated other comprehensive income - 120
Note receivable from stockholder - (250)
----------- ---------
Total stockholders' equity 65,683 65,631
----------- ---------
Total liabilities and stockholders' equity $85,343 $83,891
=========== =========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ANSYS, INC. AND SUBIDARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
<TABLE>
Three months ended Six months ended
---------- --------- -------- --------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- --------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Software licenses $ 9,409 $ 8,982 $ 19,916 $ 19,019
Maintenance and service 6,844 6,412 13,717 12,243
---------- --------- -------- --------
Total revenue 16,253 15,394 33,633 31,262
Cost of sales:
Software licenses 997 922 2,091 1,770
Maintenance and service 797 727 1,706 1,504
--------- --------- -------- --------
Total cost of sales 1,794 1,649 3,797 3,274
--------- --------- -------- --------
Gross profit 14,459 13,745 29,836 27,988
Operating expenses:
Selling and marketing 4,023 4,084 7,858 7,647
Research and development 3,203 3,189 6,614 6,634
Amortization 191 181 399 401
General and administrative 2,253 2,408 4,942 4,849
--------- --------- -------- --------
Total operating expenses 9,670 9,862 19,813 19,531
--------- --------- -------- --------
Operating income 4,789 3,883 10,023 8,457
Other income 895 602 1,892 1,152
--------- --------- -------- --------
Income before income tax 5,684 4,485 11,915 9,609
provision
Income tax provision 1,592 942 3,336 2,349
--------- --------- -------- --------
Net income 4,092 3,543 8,579 7,260
========== ========= ======== ========
Net income per basic common
share:
Basic earnings per share $ 0.26 $ 0.22 $ 0.54 $ 0.45
Weighted average shares -
basic 15,815 16,366 16,034 16,321
---------- ---------- --------- --------
Net income per diluted common
share:
Diluted earnings per share $ 0.25 $ 0.21 $ 0.52 $ 0.43
Weighted average shares -
diluted 16,272 16,805 16,546 16,753
---------- ---------- --------- --------
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ANSYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Six months ended
June 30, June 30,
2000 1999
--------- ---------
Cash flows from operating activities:
Net income $ 8,579 $ 7,260
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,472 1,402
Deferred income tax provision 108 586
Provision for bad debts 99 125
Change in operating assets and liabilities:
Accounts receivable 909 616
Other current assets (199) (1,652)
Accounts payable, accrued expenses and
liabilities and customer prepayments (1,153) (1,096)
Deferred revenue 2,553 2,471
-------- --------
Net cash provided by operating activities 12,368 9,712
-------- --------
Cash flows from investing activities:
Capital expenditures (1,939) (1,176)
Capitalization of internally developed
software costs - (332)
Repayment of stockholder loan 250 -
Acquisition payments (200) -
Purchase of short-term investments (6,000) (4,295)
Maturities of short-term investments 18,025 6,711
Puchase of long-term investment (375) -
-------- --------
Net cash provided by investing activities 9,761 908
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock
under Employee Stock Purchase Plan 74 76
Proceeds from issuance of treasury stock - 9
Purchase of treasury stock (9,851) (6)
Proceeds from exercise of stock options 1,120 380
-------- --------
Net cash (used in) provided by financing
activities (8,657) 459
-------- --------
Net increase in cash and cash equivalents 13,472 11,079
cash equivalents
Cash and cash equivalents, beginning of period 10,401 6,589
-------- --------
Cash and cash equivalents, end of period $ 23,873 $ 17,668
======== ========
Supplemental disclosures of cash flow
Information:
Cash paid during the period for:
Income taxes $ 3,324 $ 3,479
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ANSYS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements included herein have been prepared by ANSYS, Inc. (the
"Company") in accordance with generally accepted accounting
principles for interim financial information for commercial and
industrial companies and the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. The financial statements as of and for
the three and six months ended June 30, 2000 should be read in
conjunction with the Company's consolidated financial statements
(and notes thereto) included in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999.
Accordingly, the accompanying statements do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments considered necessary for a
fair presentation of the financial statements have been included,
and all adjustments are of a normal and recurring nature.
Operating results for the three months and six months ended June
30, 2000 are not necessarily indicative of the results that may
be expected for the year ending December 31, 2000.
2. ACCUMULATED OTHER COMPREHENSIVE INCOME
As of December 31, 1999, accumulated other comprehensive income,
as reflected on the condensed consolidated balance sheet, was
comprised of unrealized gains on securities available for sale.
REVIEW REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
ANSYS, Inc. and Subsidiaries:
We have reviewed the accompanying condensed consolidated balance
sheet of ANSYS, Inc. and Subsidiaries as of June 30, 2000, and
the related condensed consolidated statements of income for each
of the three-month and six-month periods ended June 30, 2000 and
June 30, 1999 and the condensed consolidated statements of cash flows for
the six-month periods ended June 30, 2000 and 1999. These
financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying condensed
consolidated interim financial statements for them to be in
conformity with generally accepted accounting principles.
We previously audited in accordance with auditing standards
generally accepted in the United States, the consolidated balance
sheet as of December 31, 1999 and the related consolidated
statements of income, stockholders' equity and of cash flows
for the year then ended (not presented herein), and in our report
dated January 27, 2000, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1999, is fairly stated in all
material respects in relation to the consolidated balance sheet
from which it has been derived.
/s/ PricewaterhouseCoopers LLP
-----------------------------
Pittsburgh, Pennsylvania
July 18, 2000
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ANSYS, Inc. (the "Company") is a leading international supplier
of analysis and engineering software for optimizing the design of
new products. The Company is committed to providing the most
open and flexible analysis solutions to suit customer
requirements for engineering software in today's competitive
marketplace. In addition, the Company partners with leading
design software suppliers to develop state-of-the-art computer-
aided design ("CAD") integrated products. Sales, support and
training for customers are provided primarily through the
Company's global network of independent ANSYS Support
Distributors ("ASDs"). The Company distributes and supports its
ANSYS(r) and DesignSpace(r) product lines through its ASDs, certain
direct sales offices, as well as a network of independent
distributors and dealers. The following discussion should be read
in conjunction with the attached unaudited condensed consolidated
financial statements and notes thereto for the three-month and
six-month periods ended June 30, 2000 and June 30, 1999 and with
the Company's audited financial statements and notes thereto for
the fiscal year ended December 31, 1999.
This Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, including statements
below concerning future trends related to paid-up and lease
license revenue, expectations of sales growth in the Company's
DesignSpace and ANSYS/Professional products, the Company's
intentions related to continued investments in sales and
marketing and research and development, plans related to future
capital spending, the sufficiency of existing cash and cash
equivalent balances to meet future working capital and capital
expenditure requirements and comments regarding the effective tax
rate in future quarters, as well as statements which contain such
words as "anticipates", "intends", "believes", "plans" and other
similar expressions. The Company's actual results could differ
materially from those set forth in forward-looking statements.
Certain factors that might cause such a difference include risks
and uncertainties detailed in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
section in the 1999 Annual Report to Shareholders and in "Certain
Factors Regarding Future Results" included herein as Exhibit 99
to this Form 10-Q.
Results of Operations
Three Months Ended June 30, 2000 Compared to Three Months Ended
June 30, 1999
Revenue. The Company's total revenue increased 5.6% in the 2000
quarter to $16.3 million from $15.4 million in the 1999 quarter.
The increase primarily resulted from increased paid-up license
revenue associated with new sales of paid-up licenses. Higher
maintenance and service revenue, primarily from maintenance
contracts sold in association with increased paid-up license
sales in the current and recent quarters, also contributed to the
increase.
Software license revenue increased 4.8% in the 2000 quarter to
$9.4 million from $9.0 million in the 1999 quarter, resulting
primarily from increased sales of paid-up licenses. Revenue from
the sale of paid-up licenses increased 22.0% to $7.5 million from
$6.1 million in the prior year quarter. The Company anticipates
that revenue from sales of paid-up licenses will increase as
sales of its DesignSpace and ANSYS/Professional products grow.
These products are priced at much lower price points compared to
the traditional high-end product offerings and are sold primarily
as paid-up licenses.
The increase in sales of paid-up licenses was partially offset by
a $484,000 reduction in monthly lease license revenue and a
$440,000 reduction in noncancellable annual lease license
revenue. The decrease in monthly lease license revenue is
consistent with recent quarterly trends and resulted from
existing monthly leases being renewed as noncancellable annual
leases or converted to paid-up licenses. The Company believes
that the reduction in lease license revenue on a quarterly
comparison basis will continue throughout the remainder of 2000.
The decrease in noncancellable annual lease license revenue was
principally attributable to the conversion of existing
noncancellable annual leases to paid-up licenses in both the
current and recent quarters. The Company believes that a 1999
increase in its annual lease price was a primary economic factor
in influencing certain noncancellable annual lease conversions.
Maintenance and service revenue increased 6.7% in the 2000
quarter to $6.8 million from $6.4 million in the 1999 quarter.
The increase was a result of maintenance contracts sold in
association with the paid-up license sales discussed above.
Of the Company's total revenue for the 2000 quarter,
approximately 55.5% and 44.5%, respectively, were attributable to
international and domestic sales, as compared to 57.9% and 42.1%,
respectively, in the 1999 quarter.
Cost of Sales and Gross Profit. The Company's total cost of
sales increased 8.8% to $1.8 million, or 11.0% of total revenue
for the 2000 quarter, from $1.6 million, or 10.7% of total
revenue for the 1999 quarter. The increase in the 2000 quarter
was principally attributable to higher salaries and related
expenses associated with increased headcount to support the
growth in license and service sales.
As a result of the foregoing, the Company's gross profit
increased 5.2% to $14.5 million in the 2000 quarter from $13.7
million in the 1999 quarter.
Selling and Marketing. Total selling and marketing expenses
decreased from $4.1 million, or 26.5% of total revenue in the
1999 quarter, to $4.0 million, or 24.8% of total revenue in the
2000 quarter. The decrease primarily resulted from a reduction
in support fees paid to third parties in the current year
quarter. The Company anticipates that it will continue to make
significant investments in its global sales and marketing
organization to strengthen its competitive position, to enhance
major account sales activities and to support its worldwide sales
channels and marketing strategies.
Research and Development. Research and development expenses
remained stable at $3.2 million for both the 2000 and 1999
quarters, or 19.7% and 20.7% of total revenue in each respective
quarter. The Company has traditionally invested significant
resources in research and development activities and intends to
continue to make significant investments throughout the remainder
of 2000.
Amortization. Amortization expense remained flat at $191,000 and
$181,000 for the second quarters of 2000 and 1999, respectively.
General and Administrative. General and administrative expenses
decreased from $2.4 million, or 15.6% of total revenue in the
1999 quarter, to $2.3 million, or 13.9% of total revenue in the
2000 quarter. The change was primarily the result of decreased
legal fees and consulting costs in the current year quarter.
Other Income. Other income increased 48.7% to $895,000 for the
2000 quarter as compared to $602,000 for the 1999 quarter. This
increase was attributable to both higher interest-bearing cash
and short-term investment balances, as well as an increasing
interest rate environment as compared to the prior year quarter.
Income Tax Provision. The Company's effective rate of taxation
was 28.0% for the 2000 quarter as compared to 21.0% for the 1999
quarter. The effective rate in 1999 was lower due to a one-time
tax benefit related to an amended prior year tax return. These
rates are lower than the federal and state combined statutory
rate as a result of the utilization of a foreign sales
corporation, as well as the generation of research and
experimentation credits.
Net Income. The Company's net income in the 2000 quarter was
$4.1 million as compared to $3.5 million in the 1999 quarter.
Diluted earnings per share increased to $.25 in the 2000 quarter
as compared to $.21 in the 1999 quarter as a result of the
increase in net income. The weighted average shares used in
computing net income per diluted common share were 16.3 million
in the 2000 quarter and 16.8 million in the 1999 quarter.
Six Months Ended June 30, 2000 Compared to Six Months
Ended June 30, 1999
Revenue. The Company's total revenue increased 7.6% for the 2000
six months to $33.6 million from $31.3 million for the 1999 six
months. The increase was attributable primarily to an increase
in revenue from paid-up licenses associated with increased sales
of new paid-up licenses and, to a lesser extent, the conversion
of existing leases to paid-up licenses. Higher maintenance and
service revenue, resulting primarily from maintenance contracts
sold in association with increased paid-up license sales, also
contributed to the increase.
Software license revenue totaled $19.9 million for the 2000 six
months as compared to $19.0 million for the 1999 six months, an
increase of 4.7%. The increase resulted principally from an
increase in sales of paid-up licenses. Revenue from the sale of
paid-up licenses increased 24.6% for the 2000 six-month period to
$14.3 million from $11.5 million in the comparable prior year
period. The Company anticipates that revenue from sales of paid-
up licenses will increase as sales of its DesignSpace and
ANSYS/Professional products grow. These products are priced at
much lower price points compared to the traditional high-end
product offerings and are sold primarily as paid-up licenses.
The increase in sales of paid-up licenses was partially offset by
a $1.1 million decrease in noncancellable annual lease license
revenue and an $849,000 reduction in monthly lease license
revenue for the 2000 six-month period as compared to the
comparable 1999 period. The decrease in noncancellable annual
lease license revenue was principally attributable to the
conversion of existing noncancellable annual leases to paid-up
licenses in both the current and recent periods. The Company
believes that a 1999 increase in its annual lease price was a
primary economic factor in influencing certain noncancellable
annual lease conversions. The reduction in monthly lease license
revenue resulted from existing monthly leases being renewed as
noncancellable annual leases or converted to paid-up licenses.
Maintenance and service revenue increased 12.0% in the 2000 six-
month period to $13.7 million from $12.2 million in the
comparable 1999 period. The increase was primarily the result of
maintenance contracts sold in association with the paid-up
license sales discussed above.
Of the Company's total revenue for the 2000 six months,
approximately 56.1% and 43.9%, respectively, were attributable to
international and domestic sales, as compared to 56.9% and 43.1%,
respectively, for the 1999 six months.
Cost of Sales and Gross Profit. The Company's total cost of
sales increased 16.0% to $3.8 million, or 11.3% of total revenue
for the 2000 six months, from $3.3 million, or 10.5% of total
revenue for the 1999 six months. The increase in the 2000 period
was principally attributable to higher salaries and related
expenses associated with increased headcount to support the
growth in license and service sales, as well as increased royalty
costs.
As a result of the foregoing, the Company's gross profit
increased 6.6% to $29.8 million for the 2000 six months from
$28.0 million for the 1999 six months.
Selling and Marketing. Selling and marketing expenses increased
2.8% for the six months ended June 30, 2000 to $7.9 million, or
23.4% of total revenue, from $7.6 million, or 24.5% of total
revenue for the comparable 1999 period. The increase was
primarily the result of higher salaries and related expenses
associated with the hiring of key personnel to bolster the
Company's sales and marketing capabilities. These costs were
partially offset by a reduction in technical support fees and
commissions paid to third parties.
Research and Development. Research and development costs remained
consistent at $6.6 million in each of the 2000 and 1999 six-month
periods, or 19.7% and 21.2% of total revenue in each respective period.
Amortization. Amortization expense remained comparable at
$399,000 and $401,000 in the respective 2000 and 1999 six-month
periods.
General and Administrative. General and administrative expenses
increased 1.9% for the 2000 six months to $4.9 million, or 14.7%
of total revenue, from $4.8 million, or 15.5% of total revenue
for the 1999 six months. The increase was primarily the result
of increased litigation costs in the first quarter related to the
expiration of an ASD distribution agreement.
Other Income. Other income increased 64.2% to $1.9 million in
the 2000 six-month period as compared to $1.2 million in the 1999
six-month period. This increase was attributable to higher
interest-bearing cash and short-term investment balances, an
increasing interest rate environment as compared to the
comparable prior year period and a $151,000 one-time gain related
to the sale of investment securities in the first quarter of
2000.
Income Tax Provision. The Company's effective rate of taxation
was 28.0% for the six months ended June 30, 2000, as compared to
24.4% for the comparable 1999 period. The 1999 rate was
favorably impacted by a one-time tax benefit related to an
amended prior year tax return. These percentages are less than
the federal and state combined statutory rate as a result of the
utilization of a foreign sales corporation, as well as the
generation of research and experimentation credits.
Net Income. The Company's net income in the first six months of
2000 totaled $8.6 million as compared to net income of $7.3
million in the first six months of 1999. As a result of the
increase in net income, diluted earnings per share increased to
$0.52 in the 2000 six months as compared to diluted earnings per
share of $0.43 in the 1999 six months. The weighted average
shares used in computing net income per diluted common share
totaled 16.5 million and 16.8 million in the 2000 and 1999 six-
month periods, respectively.
Liquidity and Capital Resources
As of June 30, 2000, the Company had cash, cash equivalents and
short-term investments totaling $58.6 million and working capital
of $52.0 million, as compared to cash, cash equivalents and short-
term investments of $57.1 million and working capital of $52.7
million at December 31, 1999. The short-term investments are
generally investment grade and liquid-type, which allows the
Company to minimize interest rate risk and to facilitate
liquidity in the event an immediate cash need arises.
The Company's operating activities provided cash of $12.4 million
for the six months ended June 30, 2000 and $9.7 million for the
six months ended June 30, 1999. The increase in the Company's
cash flow from operations for the 2000 six-month period as
compared to the comparable 1999 period was a result of increased
earnings and improved accounts receivable collections. Net cash
generated by operating activities provided sufficient resources
to fund increased headcount and capital needs, as well as to
sustain share repurchase activity under the Company's announced
share repurchase program.
Net cash provided by investing activities totaled $9.8 million
for the six months ended June 30, 2000 and $908,000 for the six
months ended June 30, 1999. The cash provided in the 2000 and
1999 six-month periods resulted primarily from maturities of
short-term investments and was partially offset by purchases of
short-term investments and capital expenditures. The Company
currently plans additional capital spending of approximately $1.0
million throughout the remainder of 2000; however, the level of
spending will be dependent upon various factors, including growth
of the business and general economic conditions.
Financing activities used net cash of $8.7 million for the six
months ended June 30, 2000 and provided cash of $459,000 for the
comparable 1999 period. In 2000, cash outlays related to the
Company's share repurchase program were partially offset by
proceeds from the issuance of common stock under employee stock
purchase and option plans. In the 1999 quarter, cash provided
from financing activities related to proceeds from the issuance
of common stock under employee stock purchase and option plans.
The Company believes that existing cash and cash equivalent
balances together with cash generated from operations will be
sufficient to meet the Company's working capital and capital
expenditure requirements, as well as cash required for the
Company's share repurchase program through the remainder of 2000.
The Company's cash requirements in the future may also be
financed through additional equity or debt financings. There can
be no assurance that such financings can be obtained on favorable
terms, if at all.
Conversion to the Euro
On January 1, 1999, eleven of the member countries of the
European Union established fixed conversion rates between their
existing currencies and one common currency, the euro. The
legacy currencies will remain legal currency in the participating
countries during a transition period through January 1, 2002.
Beginning on this date, new euro-denominated currency will be
issued and the legacy currencies will be withdrawn from
circulation.
The Company is currently in the process of identifying and
addressing issues that may result from the euro conversion such
as changes to information systems to accommodate euro-denominated
transactions, long-term competitive implications and the exposure
to market risk with respect to financial instruments. Although
the Company's assessment of the impact of the euro conversion is
not yet complete, it currently does not believe that the
conversion will have a material adverse impact on its financial
position or results of operations.
Recently Issued Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities,"
which defines derivatives, requires that all derivatives be
carried at fair value and provides for hedge accounting when
certain conditions are met. The Standard was effective for all
fiscal quarters of fiscal years beginning after June 15, 1999.
In June 1999, the FASB delayed the effective date of this
Statement for one year through the issuance of Statement No. 137,
"Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of SFAS No. 133 and an Amendment
of SFAS No. 133." The Company implemented Statement No. 133
during the quarter ended March 31, 2000. The adoption of this
Statement did not have a material effect on the Company's
consolidated financial statements.
In March 2000, the Financial Accounting Standards Board issued
FASB Interpretation No. 44, "Accounting for Certain Transactions
Involving Stock Compensation." This Interpretation clarifies
such issues as: (a) the definition of employee for purposes of
applying APB Opinion No. 25, (b) the criteria for determining
whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequence of various modifications to the terms of a
previously fixed stock option or award, and (d) the accounting
for an exchange of stock compensation awards in a business
combination. This Interpretation is effective July 1, 2000, but
certain conclusions in this Interpretation cover specific
events that occur after either December 15, 1998, or January 12,
2000. To the extent that this Interpretation covers events
occurring during the period after December 15, 1998, or January
12, 2000, but before the effective date of July 1, 2000, the
effects of applying this Interpretation are recognized on a
prospective basis from July 1, 2000. The adoption of this Interpretation
is not expected to have a material impact on the Company's financial
position or results of operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is subject to various legal proceedings
from time to time that arise in the ordinary course of
business activities. Each of these matters is subject
to various uncertainties, and it is possible that these
matters may be resolved unfavorably to the Company.
Item 2. Changes in Securities
(c) The following information is furnished in
connection with securities sold by the Registrant
during the period covered by this Form 10-Q which
were not registered under the Securities Act. The
transactions constitute sales of the Registrant's
Common Stock, par value $.01 per share, upon the
exercise of vested options issued pursuant to the
Company's 1994 Stock Option and Grant Plan, issued in
reliance upon the exemption from registration under
Rule 701 promulgated under the Securities Act and
issued prior to the Registrant becoming subject to the
reporting requirements of Section 13 or 15(d) of the
Exchange Act of 1934, as amended.
Number of Number of Aggregate
Month/Year Shares Employees Exercise Price
April 2000 4,000 1 $1,600.00
May 2000 13,500 3 $103,150.00
June 2000 2,000 1 $800.00
Item 3. Defaults upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders of the Company
held on May 2, 2000, the stockholders of the Company
elected Peter J. Smith as a Class I Director of the
Company to hold office until the 2003 Annual Meeting of
Stockholders and until such Director's successor is
duly elected and qualified. The votes were as follows:
Votes For: 13,329,211
Votes Withheld: 2,041,457
Item 5. Other information
Not Applicable.
Item 6. Exhibits and Reports Filed on Form 8-K
(a) Exhibits.
15 Independent Accountants' Letter Regarding
Unaudited Financial Information
27.1 Financial Data Schedule
99 Certain Factors Regarding Future Results
(b) Reports on Form 8-K.
Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ANSYS, Inc.
Date: August 9, 2000 By: /s/ James E. Cashman, III
James E. Cashman, III
President and Chief
Executive Officer
Date: August 9, 2000 By: /s/ Maria T. Shields
Maria T. Shields
Chief Financial Officer
Item 6.
EXHIBIT INDEX
-----------------
Exhibit
No.
15 Independent Accountants' Letter
Regarding Unaudited Financial
Information
27.1 Financial Data Schedule
99 Certain Factors Regarding Future
Results
