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 period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 0-16230
STRUCTURAL DYNAMICS RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 31-0733928
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2000 Eastman Drive, Milford, Ohio 45150
(Address of principal executive offices)
(Zip Code)
(513) 576-2400
(Registrant's telephone number, including area code)
Indicate by 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 [ ]
As of October 31, 1996 there were 33,186,800 shares of
the Registrant's Common Stock without par value issued and outstanding.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
(in thousands, except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
Revenue:
Software licenses $38,675 $33,371 $108,502 $ 91,532
Software maintenance and 33,102 22,376 94,993 64,027
services
Total revenue 71,777 55,747 203,495 155,559
Cost of revenue:
Cost of licenses 6,560 8,758 19,313 18,704
Cost of maintenance and 15,815 9,060 43,302 28,010
services
Total cost of 22,375 17,818 62,615 46,714
revenue
Gross profit 49,402 37,929 140,880 108,845
Operating expenses:
Selling and marketing 27,565 24,224 79,854 68,616
Research and development 8,514 4,991 22,795 15,713
General and administrative 3,787 3,353 12,062 10,311
Total operating 39,866 32,568 114,711 94,640
expenses
Operating income 9,536 5,361 26,169 14,205
Equity in earnings (losses) (630) 2,144 (89) (858)
of affiliates
Acquisition costs -- -- (1,102) --
Other income, net 1,309 110 2,017 1,383
Income before income taxes 10,215 7,615 26,995 14,730
Income tax expense 1,836 1,726 5,653 5,325
Net income $ 8,379 $ 5,889 $ 21,342 $ 9,405
Earnings per share:
Primary $ .24 $ .18 $ .61 $ .30
Fully diluted .24 .18 .61 .29
Common and common
equivalent shares:
Primary 34,706 32,517 34,760 31,080
Fully diluted 34,948 33,176 34,760 32,605
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(in thousands)
September 30, December 31,
1996 1995
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 69,762 $ 61,848
Short-term investments 18,035 15,731
Trade accounts receivable, net 49,880 57,927
Other accounts receivable 5,181 10,236
Prepaid expenses 6,170 6,283
Total current assets 149,028 152,025
Long-term investments 11,446 4,465
Property and equipment, at cost:
Computer and other equipment 47,039 40,164
Office furniture and equipment 13,561 11,762
Leasehold improvements 4,539 4,125
65,139 56,051
Less accumulated depreciation and 46,598 41,530
amortization
Net property and equipment 18,541 14,521
Computer software construction 27,816 30,568
costs, net
Other assets 4,998 2,805
Total assets $211,829 $204,384
See accompanying notes to consolidated financial statements.
<PAGE>
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(in thousands, except per share data)
September December
30, 31,
1996 1995
Liabilities and Shareholders' Equity (unaudit
ed)
Current liabilities:
Accounts payable $ 6,527 $ 10,602
Current portion of long-term debt -- 1,136
Accrued expenses 35,429 32,826
Accrued litigation settlement and 10,234 28,600
related costs
Accrued income taxes 4,011 6,396
Deferred revenues 33,713 34,777
Total current liabilities 89,914 114,337
Long-term debt -- 512
Long-term liabilities 8,208 8,163
Shareholders' equity:
Common stock, stated value $.0069
per share Authorized 100,000 shares;
outstanding shares - 33,147 and
31,625, net of 1,555 and 1,510
shares in treasury 227 220
Capital in excess of stated value 84,293 73,512
Retained earnings 29,163 7,821
Foreign currency translation 76 --
adjustment
Unrealized holding loss on (52) (181)
investments
Total shareholders' equity 113,707 81,372
Total liabilities and $211,829 $204,384
shareholders' equity
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1996 1995
Net cash provided by operating $ 23,048 $15,568
activities
Cash flows from investing activities:
(Purchases) sales of investments, net (9,156) 3,945
Additions to property and equipment, net (9,832) (2,266)
Additions to computer software (5,662) (5,718)
construction costs
Investment in and advances to joint 300 (3,193)
ventures
Acquisition of SDRC GmbH -- 1,152
Proceeds from sale of certain assets -- 542
Net cash used in investing (24,350) (5,538)
activities
Cash flows from financing activities:
Stock issued under employee benefit 13,406 9,206
plans
Debt repaid, net (1,648) (212)
Purchases of treasury stock (1,382) (999)
Payment for CAMAX dissenter's rights (1,236) --
Net cash provided by financing 9,140 7,995
activities
Effect of exchange rate changes on cash 76 (7)
Increase in cash and cash equivalents 7,914 18,018
Cash and cash equivalents:
Beginning of period 61,848 24,133
End of period $ 69,762 $42,151
See accompanying notes to consolidated financial statements.
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(in thousands)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. As permitted by the rules of the
Securities and Exchange Commission applicable to quarterly reports
on Form 10-Q, these notes are condensed and do not contain all
disclosures required by generally accepted accounting principles. In
the opinion of management, these financial statements contain all
adjustments (consisting of only normal recurring adjustments,
unless otherwise noted) necessary to present fairly the Company's
financial position, results of operations and cash flows as of the
dates and for the periods indicated.
While the Company believes that the disclosures are adequate to make
the information not misleading, these financial statements should
be read in conjunction with the Consolidated Financial Statements
and related notes included in the Company's Annual Report on Form
10-K/A for the year ended December 31, 1995.
(2) Acquisition of CAMAX Manufacturing Technologies, Inc.
The Company completed the acquisition of CAMAX Manufacturing
Technologies, Inc. (CAMAX), a privately held computer-aided
manufacturing company headquartered in Minneapolis, Minnesota
in June, 1996. The acquisition has been accounted for as a pooling
of interests wherein all historical financial information of the
Company has been restated to include the results of CAMAX for all
periods presented. In exchange for 100 percent ownership of CAMAX
common stock, SDRC issued approximately 1,000 shares of SDRC Common
Stock and paid approximately $1,200 to a CAMAX shareholder who
validly exercised dissenter's rights. The aggregate value was
approximately $30,000 at the time of valuation. Acquisition charges
of $1,102 were recorded in the second quarter of 1996.
(3) Computer Software Construction Costs
Beginning in the first quarter of 1996, the Company began amortizing
the software construction costs related to new releases of its I-DEAS
Master Series product over a three year period based upon an evaluation
of the estimated future economic life of the product.
(4) Foreign Currency Translation
The functional currency of the foreign software operations has been
changed to the operations' local currency from the U.S. dollar based
upon changes in the Company's operating and economic environment.
Recently the Company's European operations have become more autonomous
due to improved profitability of the subsidiaries and have generated
sufficient cash flows from operations to support their operating and
capital needs. Utilization of local European resources have been
expanded due to the local European customer demand of implementation,
support and customization of the Company's software products.
In addition, a European product development staff has been
established. For 1996, the translation gains and losses, which were
not material, were not included in determining net income but were
accumulated in a separate component of shareholders' equity.
(5) Taxes
The provision for income taxes reflects taxes currently payable. Based
on the Company's historical tax position and estimates of taxable
income for the next four years, a valuation allowance is provided
against deferred tax assets when the Company believes it is more likely
than not that the deferred tax assets will not be realized. These
factors cause the effective tax rate to differ from the expected
statutory rate.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Structural Dynamics Research Corporation is a leading international
supplier of mechanical design automation (MDA) software, product data
management (PDM) software and related services. The Company provides
software and related services to manufacturers to optimize product
performance and reduce cost, while streamlining the product development
process from concept through manufacturing.
Results of Operations (in thousands)
Certain statements in this Form 10-Q are forward looking statements
that involve risks and uncertainties, including the timely availability
and acceptance of new products, the impact of competitive products and
pricing, the management of growth, and the other risks detailed from
time to time in the Company's Securities and Exchange Commission
reports. The Company's results could differ from those results
described herein. Forward looking information should be evaluated
in the context of these and other factors some of which are described
in more detail in Factors That May Affect Future Results.
Revenue
The Company's consolidated net revenue increased 31% to $203,495 for
the nine months ended September 30, 1996 as compared to
$155,559 for the nine months ended September 30, 1995. Quarterly
revenue increased 29% to $71,777 for the three months ended September
30, 1996 as compared to $55,747 for the three months ended September
30, 1995. For the nine months ended September 30, 1996,
revenue from the Company's MDA software product, I-DEAS Master Series
(TM), increased 33% and PDM revenue increased 42% as compared to the
1995 comparable periods.
Software license revenue increased 19% to $108,502 for the nine months
ended September 30, 1996 as compared to $91,532 for the nine months
ended September 30, 1995. Quarterly software license revenue increased
16% to $38,675 for the three months ended September 30, 1996
as compared to $33,371 for the three months ended September 30,
1995. Software license growth is due to continued acceptance of the
I-DEAS Master Series product enhancements and demand for the PDM
product. I-DEAS (TM) license revenue for the third quarter of 1996
has increased 64%. In the third quarter of 1996, the Company
released I-DEAS Master Series 4 software. I-DEAS 4 features new
customer-driven technology which further extends I-DEAS
ability to design complex, 3D parts and products. License revenue
for the nine month period ended September 30, 1996 also included
revenue generated by SDRC GmbH, the wholly owned German subsidiary
which has been consolidated since acquisition of SDRC's former
joint venture partner's interest in the third quarter of 1995.
Software maintenance and services revenue increased 48% to $94,993 for
the nine months ended September 30, 1996 as compared
to $64,027 for the nine months ended September 30, 1995.
Quarterly software service revenue increased 48% to $33,102 for the
three months ended September 30, 1996 as compared to $22,376 for the
three months ended September 30, 1995. A significant portion of the
increase in maintenance revenue was due to the increase in the
Company's installed customer base of products and the Company's
continued efforts to obtain maintenance contract renewals from its
customers. Software services revenue growth was positively
impacted by revenue generated from a large contract from one of the
Company's major automotive customers as well as an overall increase
in the level of I-DEAS and Product Data Management implementation
projects.
For the nine month period ended September 30, 1996 and 1995, revenue
in North America accounted for 49% and 46%, Europe 24% and 28% and
Asia-Pacific 27% and 26%, respectively, of consolidated revenues.
The Company expects the international market to continue to account
for a significant portion of total revenue.
Expenses
Cost of revenue consists principally of the staff and related costs
associated with the generation and support of software service revenue,
amortization of capitalized software construction costs, royalty fees
paid to third parties under licensing agreements and the cost
of distributing software products. Cost of revenue increased 34%
to $62,615 for the nine months ended September 30, 1996 as compared
to $46,714 for the nine months ended September 30, 1995. Quarterly
cost of revenue increased 26% to $22,375 for the three months
ended September 30, 1996 as compared to $17,818 for the three months
ended September 30, 1995. Cost of revenue represented 31% of revenue
for the nine months ended September 30, 1996 as compared to 30%
for the comparable 1995 period.
Cost of licenses increased 3% to $19,313 for the nine months ended
September 30, 1996 as compared to $18,704 for the nine months ended
September 30, 1995. Quarterly cost of licenses decreased 25% to $6,560
for the three months ended September 30, 1996 as compared to $8,758 for
the three months ended September 30, 1995. Cost of licenses
represented 17% and 18% of revenue for the three and nine months ended
September 30, 1996, respectively, and 26% and 20% for the comparable
1995 periods. Cost of license revenue as a percent of revenue
decreased in 1996 from 1995 due to a change in revenue mix which
included a higher percentage of I-DEAS licenses in 1996 than 1995.
In 1995 cost of licenses was impacted by author fees paid to the
Company's joint venture investee which related to a large PDM order
recorded in the third quarter. Also, beginning in the first quarter
of 1996, the Company began amortizing the software construction costs
related to new releases of its I-DEAS Master Series product over a
three year period (as compared to a five year period for prior
releases) based upon an evaluation of the estimated future economic
life of the product.
Cost of maintenance and services in 1996 increased 55% to $43,302 for
the nine months ended September 30, 1996 as compared
to $28,010 for the nine months ended September 30, 1995. Quarterly
cost of maintenance and services increased 75% to $15,815 for the
three months ended September 30, 1996 as compared to $9,060 for the
three months ended September 30, 1995. The associated revenue
increased 48% for both the nine and three months ended September
30, 1996. The dollar increase in cost of maintenance and services
is primarily due to staff and related expenses incurred in order to
satisfy the growing customer demand for software services. For the
three and nine month period ended September 30, 1996, cost of
maintenance and services has increased at a greater rate than the
increase in associated revenue. The cost of hiring and training new
service professionals to meet the growing demands for software
services may continue to decrease service gross margins.
Selling and marketing expenses consist of the costs associated with the
world-wide sales and marketing staff, advertising and product
localization. These expenses increased 16% for the nine months ended
September 30, 1996 as compared to the nine months ended September 30,
1995. Selling and marketing expenses decreased as a percentage
of revenue to 38% and 39% for the three and nine months ended
September 30, 1996 as compared to 43% and 44% for the comparable 1995
periods. The dollar increase in selling and marketing expenses was due
primarily to an increase in staff and associated expenses to meet
the growing customer demand for the Company's products and services.
The expense increase also includes the additional sales and support
staff dedicated to a large automotive initiative begun in 1996.
Included in the costs for the nine month period ended September 30,
1996 are the staff costs from SDRC GmbH. The Company expects to
continue the growth and effectiveness of its worldwide sales and
marketing staff.
Research and development expenses consist of expenses for the
development of software products which cannot be capitalized
in accordance with Statement of Financial Accounting Standards No.
86. These expenses increased 45% for the nine months ended September
30, 1996 as compared to the nine months ended September 30, 1995.
Research and development expenses represented 12% and 11% of revenue
for the three and nine months ended September 30, 1996 as compared
to 9% and 10% for the comparable 1995 periods. The increase in the
dollar amount was due primarily to an increase in development staff
and associated expenses which includes the development staff added as
a result of the acquisition of SDRC GmbH. The dollar amount of
software construction costs capitalized for the nine month period
ended September 30, 1996 is approximately the same when compared to
the comparable period ended September 30, 1995. In 1996, the year
to date amortization expense has exceeded the capitalization of
software construction costs, thereby reducing the capitalized
software construction asset by approximately $2,800. To increase
the penetration into the automotive and other industries, the
Company expects to continue to expand the development efforts
balancing the additional investment with improved efficiency and
opportunities for future revenue.
Expenses (continued)
General and administrative expenses consist of costs associated with
the corporate, finance, legal, human resource and administrative
staffs. These expenses increased 17% to $12,062 for the nine months
ended September 30, 1996 as compared to $10,311 for the nine months
ended September 30, 1995. Quarterly general and administrative expenses
increased 13% to $3,787 for the three months ended September 30, 1996
as compared to $3,353 for the three months ended September 30, 1995.
General and administrative expenses represent 6% of revenue for the
nine months ended September 30, 1996 and 7% for the nine months ended
September 30, 1995. The increase in the dollar amount of general and
administrative expenses was due to an increase in corporate
administrative staff and related expenses incurred to support the
Company's growth including an investment in the worldwide management
information system.
Other Income
For the nine month period ended September 30, 1996 equity in earnings
of affiliates represented the Company's share of operating results
of its joint venture investee Metaphase Technology, Inc. (Metaphase).
For the nine month period ended September 30, 1995 equity in losses
of affiliates represented the Company's share of operating results
for Metaphase and SDRC GmbH.
In the third quarter of 1995, the Company's share of income from the
Metaphase joint venture was approximately $1,981 which was primarily
due to royalty income associated with a major customer contract. Also,
in the third quarter of 1995, the Company purchased the remaining 49.9%
interest of SDRC GmbH, previously a joint venture company with Siemens
Nixdorf Informationssysteme AG. As of the acquisition date, 100%
of the operating results of SDRC GmbH are included in the
consolidated financial statements. Prior to the acquisition of the
remaining 49.9% interest, the Company accounted for its 50.1% interest
under the equity method.
Other income, net consists principally of interest income and foreign
currency gains and losses. For the three and nine months ending
September 30, 1996 interest income has increased approximately $450 and
$1,400, respectively, as compared to 1995 due to increased interest
earned from higher interest rates on higher cash and short term
investment balances. For the three months ending September 30, 1995,
the interest income was partially offset by foreign currency losses and
a loss on the sale of certain engineering consulting assets in the
United Kingdom. For the nine months ending September 30, 1996, the
increase in interest income has been partially offset by a charge
of $950 for the settlement of the derivative lawsuit recorded in
the second quarter of 1996.
Taxes
The provision for income taxes reflects taxes currently payable.
Deferred tax benefits relating to temporary differences have been
offset by a valuation allowance due to doubt as to their ultimate
realization. These factors cause the effective tax rate to differ from
the expected statutory rate.
Factors That May Affect Future Results
Forward looking statements and the Company's results are subject
to certain risks and uncertainties, including those discussed below,
that could cause actual results to differ from those disclosed. Any
risk and uncertainty posed by competitive, technological or
financial factors could have an immediate and significant adverse
effect on the trading price of the Company's stock in any given
period.
Future quarterly results could be impacted by factors such as customer
order delays, a slower growth rate in the market, increased competition
or adverse changes in general economic conditions in any of the
countries in which the Company does business. The loss of a major
customer or a reduction in orders from a major customer could have
a significant impact to the results of operations in any
particular quarter. Historically, a significant portion of the
Company's revenue is generated from shipments in the last month
of a quarter. In addition, higher volumes of orders have been
experienced in the second and fourth quarter. The concentration of
orders makes projections of quarterly financial results difficult.
If customers delay their orders or a disruption in the Company's
distribution occurs, quarterly results of operations in any particular
quarter may be negatively impacted. A significant portion of the
Company's revenue is from the international market. As a result, the
Company's financial results could be impacted by weakened general
economic conditions, differing technological advances or
preferences, volatile foreign exchange rates and government trade
restrictions in any country in which the Company does business.
The Company relies on distributors, representatives and value added
resellers to market its products. The Company's revenue in any
particular quarter may be negatively impacted by a lower than
anticipated performance of any significant distributor, representative
or value added reseller.
Factors That May Affect Future Results (continued)
The Company's success is dependent on its ability to continue
to develop, enhance and market new products to meet its
customers' sophisticated needs in a timely manner and which are
consistent with current technological developments. The Company's
success also depends in part on its ability to attract and retain
technical and other key employees who are in great demand, to protect
the intellectual property rights of its products and to continue key
relationships with third party authors. As development cycles
become shorter, product quality, performance, reliability, ease of
use, functionality, breadth and integration may be impacted.
Therefore, customer acceptance of new products cannot be assured.
The CAD/CAE/CAM software industry is highly competitive. The
entire industry may experience pricing and margin pressure which as
a result could adversely affect the Company's operating results and
financial position.
In addition, the Company's expense levels are based, in part, on its
future revenue expectations. The Company continues to increase its
operating expense levels to meet the growing customer demand for the
Company's products and services. If revenue is below expectations,
operating results could be adversely and materially affected. Net
income may be disproportionately affected by an unexpected reduction
in revenue because the Company's expense levels are generally committed
in advance and a relatively small portion of the Company's expenses
vary with revenue.
Future results could also be impacted by the integration of the Company
and CAMAX Manufacturing Technologies, Inc. (see Note 2 to the
Consolidated Financial Statements). In addition, the Company is in the
process of upgrading its world-wide information management system.
Such a major undertaking could cause significant disruption as a result
of unexpected delays in the implementation of this project. There can
be no assurance that the project will be completed within the projected
time frame and budget.
The trading price of the Company's stock, like other software and
technology stocks, is subject to significant volatility due to factors
impacting the overall market which are unrelated to the Company's
performance. The historical results of operations and financial
position of the Company are not necessarily indicative of future
financial performance. If revenues or earnings fail to meet securities
analysts' expectations, there could be an immediate and significant
adverse impact on the trading price of the Company stock.
While the Company believes that the disclosures are adequate to make
the information not misleading, these financial statements should
be read in conjunction with the Consolidated Financial Statements
and related notes included in the Company's Annual Report on Form
10-K/A for the year ended December 31, 1995.
The Company has not experienced a material adverse impact of such risks
or uncertainties and does not anticipate such an impact. However,
no assurance can be given that such risks and uncertainties will
not affect the Company's future results of operations or its
financial position.
Liquidity and Capital Resources
At September 30, 1996, the Company had cash and investments of $99,243
as compared to $82,044 at December 31, 1995. The increase in cash and
investments from December 31, 1995 is primarily due to proceeds from
results of operations and the exercise of employee stock options
partially offset by capital expenditures to accommodate the increased
headcount. The Company's working capital was $59,114 at September 30,
1996. In addition, the Company has an unused, unsecured bank line
of credit of $15,000. The Company has no current commitments for
material capital expenditures. These existing sources of liquidity
and funds anticipated to be generated from operations are expected
to provide adequate cash to fund the Company's projected needs for the
foreseeable future.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company had previously reported that it was a party
to shareholders' derivative litigation captioned In Re:
Structural Dynamics Research Corporation Derivative Litigation,
United States District Court, Southern District of Ohio, Consolidated
Master File No. C-1-94-650. The Company paid the plaintiffs'
counsel fees of approximately $900,000 and $50,000 for their
out-of-pocket expenses in full settlement of the matter. The
parties' agreement was approved by the United States District Court on
July 19, 1996.
Item 6. Exhibits and Reports on Form 8-K.
(A) Exhibits filed as part of this report:
11.1 Calculation of Primary Earnings Per Common Share
11.2 Calculation of Fully Diluted Earnings Per Common
Share
(B) A Form 8-K was filed on July 3, 1996 pertaining to the
acquisition of CAMAX Manufacturing Technologies, Inc. Financial
statements of the business acquired and proforma financial
information was incorporated by reference from the Structural
Dynamics Research Corporation's Registration Statement on Form S-
4, Registration No. 333-907, effective on May 28, 1996.
The information furnished in this report has not been audited.
It reflects all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods reported. The results are not necessarily
indicative of results of operations to be expected for the full
fiscal year.
SIGNATURE
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.
STRUCTURAL DYNAMICS RESEARCH
CORPORATION
Date: November 12, 1996 By: /s/ Jeffrey J. Vorholt
Jeffrey J. Vorholt,
Vice President,
Chief Financial Officer and
Treasurer
*Pursuant to the last sentence
of General Instruction G to Form
10-Q, Mr. Jeffrey J. Vorholt has
executed this Quarterly Report on
Form 10-Q both on behalf of the
registrant and in his capacity as
its principal financial
and accounting officer.
EXHIBIT 11.1
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Calculation of Primary Earnings Per Common Share
(in thousands, except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
PRIMARY
Average shares outstanding 33,104 31,203 32,685 30,765
Net effect of dilutive stock
options after 1,602 1,314 2,075 315
application of the
treasury stock method
Total 34,706 32,517 34,760 31,080
Net income $ 8,379 $ 5,889 $21,342 $ 9,405
Net income per share $ .24 $ .18 $ .61 $ .30
Exhibit 11(b)
STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
Calculation of Fully Diluted Earnings Per Common Share
(in thousands, except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
FULLY DILUTED
Average shares outstanding 33,104 31,203 32,685 30,765
Net effect of dilutive stock
options after application
of the treasury stock
method 1,844 1,973 2,075 1,840
Total 34,948 33,176 34,760 32,605
Net income $ 8,379 $ 5,889 $21,342 $ 9,405
Net income per share $ .24 $ .18 $ .61 $ .29
