<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For The Quarterly Period Ended July 31, 2000
[ ] 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 000-27874
ANSOFT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 72-1001909
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
Four Station Square, Suite 200
Pittsburgh, Pennsylvania 15219-1119
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 261-3200
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 [ ]
The number of shares of the registrant's Common Stock outstanding as of the
close of business on September 14, 2000 was 11,922,517.
<PAGE> 2
ANSOFT CORPORATION
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - July 31, 2000 and April 30, 2000 1
Consolidated Statements of Operations - Three months ended
July 31, 2000 and 1999 2
Consolidated Statements of Cash Flows - Three months ended
July 31, 2000 and 1999 3
Notes to the Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 11
</TABLE>
<PAGE> 3
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANSOFT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
(unaudited)
July 31, April 30,
2000 2000
----------- ---------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 4,730 $ 2,594
Marketable securities 18,894 17,722
Accounts receivable 8,326 10,550
Deferred income taxes 312 312
Prepaid expenses and other assets 925 941
-------- --------
Total current assets 33,187 32,119
Equipment and furniture 4,894 4,989
Marketable securities 3,855 3,920
Other assets 310 310
Deferred taxes - non current 2,974 2,886
Intangible assets 8,761 9,386
-------- --------
Total assets $ 53,981 $ 53,610
======== ========
Liabilities and stockholders' equity
Current liabilities
Line of credit $ 9,149 $ 9,194
Accounts payable and accrued expenses 780 1,383
Deferred revenue 4,033 3,883
-------- --------
Total current liabilities 13,962 14,460
Other liabilities 93 103
-------- --------
Total liabilities 14,055 14,563
Stockholders' equity
Preferred stock -- --
Common stock 118 117
Additional paid-in capital 52,277 51,956
Treasury stock (1,131) (1,131)
Other accumulated comprehensive income (loss) (2,694) (3,487)
Accumulated deficit (8,644) (8,408)
-------- --------
Total stockholders' equity 39,926 39,047
Total liabilities and stockholders' equity $ 53,981 $ 53,610
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
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ANSOFT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three months ended July 31,
2000 1999
-------- --------
<S> <C> <C>
Revenues
License $ 6,744 $ 5,304
Service and other 1,962 1,607
-------- --------
Total revenue 8,706 6,911
Costs and expenses
Sales and marketing 5,241 4,592
Research and development 2,764 2,378
General and administrative 847 807
Amortization 625 642
-------- --------
Total costs and expenses 9,477 8,419
-------- --------
Income (loss) from operations (771) (1,508)
Other income, net 434 390
-------- --------
Income (loss) before income taxes (337) (1,118)
Income tax benefit 101 225
-------- --------
Net income (loss) $ (236) $ (893)
======== ========
Basic net income (loss) per share $ (0.02) $ (0.08)
======== ========
Diluted net income (loss) per share $ (0.02) $ (0.08)
======== ========
Weighted average shares used in calculation
Basic 11,645 11,383
======== ========
Diluted 11,645 11,383
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
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ANSOFT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Three months ended July 31,
2000 1999
------- -------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ (236) $ (893)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation 300 220
Amortization 625 642
Deferred taxes (88) (225)
Changes in assets and liabilities
Accounts receivable 2,224 1,234
Prepaid expenses and other assets 16 (25)
Other long-term assets and liabilities (10) 158
Accounts payable and accrued expenses (600) (350)
Deferred revenue 150 (70)
------- -------
Net cash provided by (used in) operating activities 2,381 691
------- -------
Cash flows from investing activities
Purchases of plant and equipment (205) (264)
Investment in acquired businesses -- (375)
Purchases of marketable securities (361) (766)
------- -------
Net cash provided by (used in) investing activities (566) (1,405)
------- -------
Cash flows from financing activities
Proceeds from line of credit, net (45) 1,042
Purchase of treasury stock -- (140)
Proceeds from the issuance of common stock, net 322 19
------- -------
Net cash provided by (used in) financing activities 277 921
Effect of exchange rate 44 (39)
------- -------
Net increase (decrease) in cash and cash equivalents 2,136 168
Cash and cash equivalents at beginning of period 2,594 2,489
------- -------
Cash and cash equivalents at end of period $ 4,730 $ 2,657
======= =======
Supplemental disclosures of cash flow information
Cash paid for interest $ 128 $ 88
======= =======
Cash paid for income taxes $ 45 $ --
======= =======
</TABLE>
See accompanying notes to the consolidated financial statements.
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ANSOFT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) Basis of Presentation
The unaudited consolidated financial statements include the accounts of Ansoft
and its majority owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of financial position and results of operations have been made.
Operating results for interim periods are not necessarily indicative of results
which may be expected for a full year. The information included in this Form
10-Q should be read in conjunction with Management's Discussion and Analysis of
Financial Condition and Results of Operations and the fiscal year ended April
30, 2000 consolidated financial statements and notes thereto included in
Ansoft's annual report on Form 10-K filed with the Commission.
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses and disclosure of contingent assets and liabilities. The
estimates and assumptions used in the accompanying consolidated financial
statements are based on management's evaluation of the relevant facts and
circumstances as of the date of the consolidated financial statements. Actual
results may differ from those estimates.
(2) Comprehensive income (loss)
"Comprehensive income (loss)" includes foreign currency translation gains and
losses and other unrealized gains and losses. A summary of comprehensive income
(loss) follows:
<TABLE>
<CAPTION>
Three Months Ended July 31,
2000 1999
------- -------
<S> <C> <C>
Net income (loss) $ (236) $ (893)
Unrealized gain (loss) on marketable securities 749 (230)
Foreign currency translation adjustments 44 (39)
------- -------
Comprehensive income (loss) $ 557 $(1,162)
======= =======
</TABLE>
(3) Net income (loss) per share
"Basic earnings (loss) per share" is calculated based upon the weighted average
number of common shares actually outstanding, and "diluted earnings per share"
is calculated based upon the weighted average number of common shares
outstanding and other potential common shares if they are dilutive. The
following is a reconciliation of the numerators and denominators of the basic
and diluted EPS computations for the periods presented:
<TABLE>
<CAPTION>
Income Per share
(loss) Shares amount
------ ------ ---------
<S> <C> <C> <C>
Three months ended July 31, 2000
Basic net income (loss) per share $(236) 11,645 $(0.02)
===== ====== ======
Effect of dilutive securities:
Stock options -- -- --
----- ------ ------
Diluted net income (loss) per share $(236) 11,645 $(0.02)
===== ====== ======
Three months ended July 31, 1999
Basic net income (loss) per share $(893) 11,383 $(0.08)
===== ====== ======
Effect of dilutive securities:
Stock options -- -- --
----- ------ ------
Diluted net income (loss) per share $(893) 11,383 $(0.08)
===== ====== ======
</TABLE>
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(4) Altra Broadband, Inc.
On July 17, 2000, Ansoft announced its formation of a new subsidiary named Altra
Broadband, Inc., or Altra to pursue the development of critical intellectual
property and products for broadband wireless and optical communications. The
financial statements and financial information in this Quarterly Report on Form
10-Q include the results of Altra. The full impact of Altra on Ansoft's
business, operating results, and financial condition cannot be predicted at this
time. However, certain incremental expenses, primarily in research and
development, are expected to be incurred in future periods.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains certain forward-looking statements that involve
substantial risks and uncertainties. When used in this Form 10-Q, the words
"anticipate," "plan," "believe," "estimate," "expect" and similar expressions as
they relate to Ansoft or its management are intended to identify such
forward-looking statements. Ansoft's actual results, performance or achievements
could differ materially from the results expressed in, or implied by, these
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed in "Risk Factors" section included in
Ansoft's report on Form 10-K for the fiscal year ended April 30, 2000.
Overview
Ansoft Corporation ("Ansoft" or the "Company") is a leading developer of
electronic design automation ("EDA") software used in high technology products
and industries. Ansoft's software is used by electrical engineers in the design
of state of the art technology products, such as cellular phones, internet
networking, satellite communications systems, computer chips and circuit boards,
and electronic sensors and motors. Engineers use our software to maximize
product performance, eliminate physical prototypes, and to reduce
time-to-market.
License revenue consists principally of revenue from the licensing of Ansoft's
software and is generally recognized when the software has been shipped and
there are no significant remaining obligations. Service revenue consists of
maintenance fees for providing system updates, user documentation and technical
support for software products, and is recognized ratably over the term of the
maintenance agreement. Other revenue consists primarily of revenue earned on
development contracts with government-sponsored entities. Revenue under these
arrangements is recognized as the service is performed.
Effective December 23, 1999, Ansoft completed the acquisition of Pacific Numerix
("PNC"). The cost of this acquisition has been allocated on the basis of the
estimated fair value of the assets acquired and the liabilities assumed. The
acquisition was accounted for as a purchase, and their financial results have
been included in the accompanying consolidated financial statements since the
date of acquisition.
On July 17, 2000, Ansoft announced its formation of a new subsidiary named Altra
Broadband, Inc., ("Altra") to pursue the development of critical intellectual
property and products for broadband wireless and optical communications. The
financial statements and financial information in this Quarterly Report on Form
10-Q include the results of Altra. The full impact of Altra on Ansoft's
business, operating results, and financial condition cannot be predicted at this
time. However, certain incremental expenses, primarily in research and
development, are expected to be incurred in future periods.
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Results of Operations
The following table sets forth the percentage of total revenue of each item in
Ansoft's consolidated statements of operations:
<TABLE>
<CAPTION>
Three months ended July 31,
2000 1999
---- ----
<S> <C> <C>
Revenues:
License 77% 77%
Service and other 23 23
---- ----
Total revenue 100 100
Costs and expenses:
Sales and marketing 60 66
Research and development 32 34
General and administrative 10 12
Amortization 7 9
---- ----
Total costs and expenses 109 122
---- ----
Income (loss) from
operations (9) (22)
Other income 5 6
---- ----
Income (loss) before income
taxes (4) (16)
Income taxes 1 3
---- ----
Net income (loss) (3)% (13)%
==== ====
</TABLE>
Comparison of the Three Months Ended July 31, 2000 and 1999
Revenue. Total revenue in the three-month period ended July 31, 2000 increased
26% to $8.7 million from $6.9 million in the comparable period of the preceding
fiscal year. License revenue during the three-month period ended July 31, 2000
increased 27% to $6.7 million from $5.3 million during the comparable period in
the prior fiscal year. The increase is primarily attributable to strong demand
from Asia customers. Service and other revenue in the three-month period ended
July 31, 2000 increased by 22% due to the continued growth of the installed base
of customers under annual maintenance agreements.
International revenue accounted for 56% and 52% of the Company's total product
revenue in the three-month period ended July 31, 2000 and 1999, respectively.
Sales and marketing expenses. Sales and marketing expenses consist of salaries,
commissions paid to internal sales and marketing personnel and international
distributors, promotional costs and related operating expenses. Sales and
marketing expenses increased by 14% to $5.2 million in the three-month period
ended July 31, 2000, as compared to $4.6 million in the same period in the
previous fiscal year. The increase is attributable to an increase in the
Company's sales levels, in addition to increased marketing efforts such as
advertising in trade publications and participation in industry trade shows.
Sales and marketing expenses represented 60% and 66% of total revenue in the
three-month period ended July 31, 2000 and 1999, respectively. Ansoft expects
that sales and marketing expenses will decrease as a percentage of revenue
although increase in absolute dollars in future periods.
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Research and development expenses. Research and development expenses include all
costs associated with the development of new products and enhancements to
existing products. Research and development expenses for the three-month period
ended July 31, 2000 increased 16% to $2.8 million, as compared to $2.4 million
for the same period in the previous fiscal year. The increase is primarily due
to increased software research and development efforts. Research and development
expenses represented 32% and 34% of total revenue in the three-month period
ended July 31, 2000 and 1999, respectively. Ansoft anticipates that research and
development expenses will increase in absolute dollars in future periods as
Altra increases its efforts to develop critical intellectual property and
products for broadband wireless and optical communications.
General and administrative expenses. General and administrative expenses for the
three-month period ended July 31, 2000 increased 5% to $847,000, as compared to
$807,000 for the same period in the previous fiscal year. The increase is due to
additional costs required to support the increase in operations. General and
administrative expenses represented 10% and 12% of total revenue in the
three-month period ended July 31, 2000 and 1999, respectively. The Company
anticipates that general and administrative expenses will increase in absolute
dollars in future periods.
Amortization expense. Amortization expense for the three-month period ended July
31, 2000 decreased to $625,000, as compared to $642,000 for the same period in
the previous fiscal year. The decrease is due to certain intangible assets
acquired being fully amortized as of April 30, 2000.
Other income. Other income for the three-month period ended July 31, 2000 was
$434,000, an increase from the $390,000 reported for the same period in the
previous fiscal year. The increase is due to the increased net investment
balance.
Income taxes. In the three-month period ended July 31, 2000, the Company
recorded a tax benefit of $101,000, resulting from the recognition of deferred
tax assets in accordance with the Financial Accounting Standards Board's SFAS
No. 109, "Accounting for Income Taxes." Ansoft's net deferred tax asset of $3.3
million as of July 31, 2000, consists primarily of the benefit of net operating
loss carryforwards for federal income tax purposes, which are available to
offset future taxable income, and expire in increments beginning in April 2004,
through April 2019. Valuation allowances are established when necessary to
reduce deferred tax assets to the amounts expected to be realized.
Liquidity and Capital Resources
As of July 31, 2000, Ansoft had $4.7 million in cash and cash equivalents and
working capital of $19.2 million. Net cash provided by operating activities was
$2.4 million and $691,000 in the three months ended July 31, 2000 and 1999,
respectively. Net cash used in investing activities was $566,000 and $1.4
million in the three months ended July 31, 2000 and 1999, respectively. Net cash
provided by financing activities was $277,000 and $921,000 in the three months
ended July 31, 2000 and 1999, respectively.
Ansoft has available a $10.0 million secured line of credit from a domestic
financial institution at an interest rate equal to LIBOR plus an applicable
margin rate. The line of credit is secured by the marketable securities held
with the institution. As of July 31, 2000, $9.1 million was the outstanding
balance on the line of credit and the weighted average interest rate was 4.61%.
Ansoft believes that the available funds together with cash generated from
operations will be sufficient to meet its anticipated cash needs for working
capital and capital expenditures for at least the foreseeable future.
Thereafter, if cash generated from operations is insufficient to satisfy the
Company's liquidity requirements, Ansoft may seek additional funds through
equity or debt financing. There can be no assurance that additional financing
will be available or that, if available, such financing will be on terms
favorable to Ansoft.
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Quantitative and Qualitative Disclosure about Market Risk
There have been no material changes in reported market risks faced by the
Company since April 30, 2000.
Additional Risk Factors that may affect Future Results
Our Future Operating Results Are Uncertain.
Ansoft has incurred net losses in fiscal 2000, 1999, and 1997. There can be no
assurance that Ansoft's revenue and net income will grow or be sustained in
future periods or that Ansoft will be profitable in any future period. Future
operating results will depend on many factors, including the degree and the rate
of growth of the markets in which Ansoft competes and the accompanying demand
for Ansoft's products, the level of product and price competition, the ability
of Ansoft to develop and market new products and to control costs, the ability
of Ansoft to expand its direct sales force and the ability of Ansoft to attract
and retain key personnel.
Our Quarterly Operating Results Are Difficult To Predict.
We are unable to accurately forecast our future revenues primarily because of
the emerging nature of the market in which we compete. Our revenues and
operating results generally depend on the size, timing and structure of
significant licenses. These factors have historically been, and are likely to
continue to be, difficult to forecast. In addition, our current and future
expense levels are based largely on our operating plans and estimates of future
revenues and are, to an extent, fixed. We may be unable to adjust spending
sufficiently or quickly enough to compensate for any unexpected revenue
shortfall. Accordingly, any significant shortfall in revenues in relation to our
planned expenditures would seriously harm our business, financial condition and
results of operations. Such shortfalls in our revenue or operating results from
levels expected by public market analysts and investors could seriously harm the
trading price of our common stock. Additionally, we may not learn of such
revenue shortfalls, earnings shortfalls or other failure to meet market
expectations until late in a fiscal quarter, which could result in an even more
immediate and serious harm to the trading price of our common stock. Our
quarterly operating results have varied, and it is anticipated that our
quarterly operating results will vary, substantially from period to period
depending on various factors, many of which are outside our control. Due to the
foregoing factors, we cannot predict with any significant degree of certainty
our quarterly revenue and operating results. Further, we believe that
period-to-period comparisons of our operating results are not necessarily a
meaningful indication of future performance.
Our Stock Price Is Extremely Volatile.
The trading price of our common stock has fluctuated significantly in the past,
and the trading price of our common stock is likely to be highly volatile and
could be subject to wide fluctuations in price in response to such factors as:
- Actual or anticipated fluctuations in our operating results;
- Announcements of technological innovations and new products by us or our
competitors;
- New contractual relationships with strategic partners by us or our
competitors;
- Proposed acquisitions by us or our competitors; and
- Financial results that fail to meet public market analyst expectations of
performance.
In addition, the stock market in general, The Nasdaq National Market and the
market for technology companies in particular has experienced extreme price and
volume fluctuations that have often been unrelated or disproportionate to the
operating performance of such companies. These broad market and industry factors
may seriously harm the market price of our common stock in future periods.
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Businesses We Acquire May Not Perform As Projected.
We have acquired or merged with a number of companies in recent years, including
the acquisitions of: Pacific Numerix Corporation, Compact Software, Inc., the
Electronic Business Unit of MacNeal Schwendler Company and Boulder Microwave
Technologies, and as part of our efforts to increase revenue and expand our
product and services offerings we may acquire additional companies. In addition
to direct costs, acquisitions pose a number of risks, including potential
dilution of earnings per share, delays and other problems of integrating the
acquired products and employees into our business, the failure to realize
expected synergies or cost savings, the failure of acquired products to achieve
projected sales, the drain on management time for acquisition-related
activities, possible adverse effects on customer buying patterns due to
uncertainties resulting from an acquisition, and assumption of unknown
liabilities. The foregoing factors could seriously harm our business, financial
condition and results of operations.
We May Lose Competitive Advantages If Our Proprietary Rights Are Inadequately
Protected.
Ansoft's success depends, in part, upon its proprietary technology. We rely on a
combination of patents, trade secrets, copyrights, trademarks and contractual
commitments to protect our proprietary rights in our software products. We
generally enter into confidentiality or license agreements with our employees,
distributors and customers, and limit access to and distribution of our
software, documentation and other proprietary information. Despite these
precautions, a third party may still copy or otherwise obtain and use our
products or technology without authorization, or develop similar technology
independently. In addition, effective patent, copyright and trade secret
protection may be unavailable or limited in certain foreign countries. It is
possible that we may fail to adequately protect our proprietary rights. This
would seriously harm Ansoft's business, operating results and financial
condition.
We May Be Unable To Attract And Retain The Key Management And Technical
Personnel That We Need To Succeed.
Ansoft's future operating results depend in large part upon the continued
services of its key technical and management personnel. Ansoft does not have
employment contracts with any executive officer. Ansoft's future success will
also depend in large part on its ability to continue to attract and retain
highly skilled technical, marketing and management personnel. The competition
for such personnel, as well as for qualified EDA engineers, is intense. If
Ansoft is unable to attract, hire and retain qualified personnel in the future,
the development of new products and the management of Ansoft's increasingly
complex business would be impaired. This could seriously harm Ansoft's business,
operating results and financial condition.
We Depend On International Sales for a Significant Percentage Of Our Revenue.
International revenue, principally from Asian customers, accounted for
approximately 48% and 52% of our total revenue in the years ended April 30, 2000
and 1999, respectively. We expect that international license and service revenue
will continue to account for a significant portion of our total revenue for the
foreseeable future. Our international business activities are subject to a
variety of potential risks, including:
- The impact of recessionary environments in foreign economies;
- Longer receivables collection periods and greater difficulty in accounts
receivable collection;
- Difficulties in staffing and managing foreign operations;
- Political and economic instability;
- Unexpected changes in regulatory requirements;
- Reduced protection of intellectual property rights in some countries; and
- Tariffs and other trade barriers.
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Currency exchange fluctuations in countries in which we license our products
could also seriously harm our business, financial condition and results of
operations by resulting in pricing that is not competitive with products priced
in local currencies. Furthermore, we may not be able to continue to generally
price our products and services internationally in U.S. dollars because of
changing sovereign restrictions on importation and exportation of foreign
currencies as well as other practical considerations. In addition, the laws of
certain countries do not protect our products and intellectual property rights
to the same extent, as do the laws of the United States. Moreover, it is
possible that we may fail to sustain or increase revenue derived from
international licensing and service or that the foregoing factors will seriously
harm our future international license and service revenue, and, consequently,
seriously harm our business, financial condition and results of operations.
We Need To Successfully Manage Our Expanding Operations.
Ansoft has experienced rapid growth in recent years which has placed and could
continue to place a significant strain on the its managerial and other
resources. Revenues have grown from $6.2 million in fiscal 1995 to $33.5 million
in fiscal year 2000, and the number of employees has grown from 69 in April 1996
to 230 as of May 31, 2000. Ansoft's ability to manage growth effectively will
require it to continue to improve its operational and financial systems, hire
and train new employees and add additional space, both domestically and
internationally. Ansoft may not be successful in addressing such risks, and the
failure to do so would seriously harm Ansoft's business, financial condition and
results of operations.
We Depend On The Growth Of The Communications Semiconductor And Electronics
Industries.
Ansoft is dependent upon the communications and semiconductor industry and, more
generally, the electronics industry. These industries are characterized by rapid
technological change, short product life cycles, fluctuations in manufacturing
capacity and pricing and gross margin pressures. Segments of these industries
have from time to time experienced significant economic downturns characterized
by decreased product demand, production over-capacity, price erosion, work
slowdowns and layoffs. While these industries have experienced an extended
period of significant economic growth over the past few years, such economic
growth may not continue, and if it does not, any downturn could be especially
severe on Ansoft. During such downturns, the number of new integrated circuit
design projects often decreases. Because acquisitions of new licenses from
Ansoft are largely dependent upon the commencement of new design projects, any
slowdown in these industries could seriously harm Ansoft's business, financial
condition and results of operations.
We Are Controlled By Our Principal Stockholders And Management Which May Limit
Your Ability To Influence Stockholder Matters.
Our executive officers, directors and principal stockholders own approximately
49% of the outstanding shares of Ansoft common stock. As a result, they have the
ability to effectively control us and direct our affairs, including the election
of directors and approval of significant corporate transactions. This
concentration of ownership also may have the effect of delaying, deferring or
preventing a change in control of our company and may make some transactions
more difficult or impossible without the support of these stockholders. The
interests of these stockholders may conflict with those of other stockholders.
Anti-Takeover Provisions in Ansoft's Certificate Of Incorporation, Bylaws, And
Under Delaware Law Could Prevent An Acquisition.
We have adopted a number of provisions that could have anti-takeover effects.
The Board of Directors has the authority to issue up to 1,000,000 shares of
Preferred Stock without any further vote or action by Ansoft's stockholders.
This and other provisions of Ansoft's Certificate of Incorporation, Bylaws and
Delaware Law may have the effect of deterring hostile takeovers or delaying or
preventing changes in control or management, including transactions in which the
stockholders of Ansoft might otherwise receive a premium for their shares over
then current market prices.
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PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits filed as part of this Quarterly Report on Form 10-Q are listed
below and are incorporated herein by reference:
Exhibit No.
27.1 Financial Data Schedule.
(b) No reports on Form 8-K during the period from May 1, 2000 to July 31, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date September 14, 2000
ANSOFT CORPORATION
By: /s/ Nicholas Csendes
--------------------------------------------
Nicholas Csendes
President and Chief Executive Officer
By: /s/ Anthony L. Ryan
--------------------------------------------
Anthony L. Ryan
Chief Financial Officer
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