Dassault Q2 Revenue Up 7% to 326M Euro with 42.5M Profit
 PARIS,
France, July 31, 2008 - Dassault Systems (DS) (Nasdaq: DASTY; Euronext
Paris: #13065, DSY.PA) reported U.S. GAAP unaudited financial results for
the second quarter and six months ended June 30, 2008.
Second Quarter Summary Financial Highlights
- Q2 Financial Results Above DS Objectives
- Q2 GAAP total revenue up 13% on GAAP software revenue growth of 17%,
both in constant currencies; Q2 GAAP EPS up 16% to €0.36
- Q2 non-GAAP total revenue up 12% on non-GAAP software revenue growth
of 15%, both in constant currencies; Q2 non-GAAP EPS up 10% to €0.46
- DS Reconfirms 2008 Financial Objectives
Second Quarter 2008 Financial Summary
In millions of
U.S. GAAP
Non-GAAP
Euros, except
Growth Growth Growth Growth
per share data
in cc*
in cc*
Q2 Total Revenue 326.2
7% 13% 326.2 6%
12%
Q2 Software Revenue 278.0 10% 17% 278.0
8% 15% Q2 EPS
0.36 16% - 0.46
10% -
Q2 Operating Margin 19.8% - -
25.1% - -
* In constant currencies.
Bernard Charlès, Dassault Systems President and Chief Executive
Officer, commented, “Dassault Systems had an excellent second quarter
and first half reflecting the contribution of our PLM solutions to product
competitiveness and innovation. In particular, we had an excellent dynamic
in software across our leading brands with new wins and additional business
in many of our verticals, including automotive, aerospace, high tech,
energy, apparel and life sciences among others.
“We benefited from strong growth across our sales channels as we continue
to focus on working closely together with our partners, improving our sales
coverage and providing high value to our customers. In particular, our PLM
Business Transformation channel delivered a strong performance this quarter
thanks to IBM PLM as well as our direct sales force.”
Second Quarter Financial Highlights
- GAAP total revenue increased 13% in constant currencies and non-GAAP
total revenue increased 12% in constant currencies.
- By geographic region and in constant currencies as applicable, total
GAAP revenue in Europe was up 12% (non-GAAP up 11%), the Americas was
higher by 19% (non-GAAP up 17%), and Asia increased 10% (non-GAAP up
9%).
- GAAP software revenue increased 17% in constant currencies. Non-GAAP
software revenue increased 15% on new licenses revenue growth of 12% and
non-GAAP recurring software revenue growth of 18% (all figures in
constant currencies).
- GAAP PLM software revenue increased 17% in constant currencies.
Non-GAAP PLM software revenue growth of 16% in constant currencies was
led by CATIA with non- GAAP software revenue growth of 20% in constant
currencies. ENOVIA non-GAAP software revenue increased 11% in constant
currencies. SIMULIA software revenue increased double-digits in constant
currencies in the second quarter.
- GAAP Mainstream 3D software revenue increased 14% in constant
currencies. Non- GAAP Mainstream 3D software revenue increased 13% in
constant currencies on strong growth in maintenance revenue, new
SolidWorks seat growth of 9% and growth in sales of Mainstream 3D
product data management and analysis software.
- Services and other revenue, representing 15% of total revenue,
decreased 2% in constant currencies. As noted in the first quarter,
services and other revenue growth trends during 2008 largely reflect the
winding down of historical channel management activities formerly
rendered to IBM. DS consulting revenue delivered solid growth in
constant currencies in the second quarter.
- GAAP operating margin was 19.8%. Non-GAAP operating margin expanded
to 25.1%, up from 23.4% in the year-ago quarter.
- GAAP earnings per diluted share increased 16%. Non-GAAP earnings per
diluted share increased 10% to €0.46 principally reflecting an increase
in non-GAAP operating income of 13% offset in part by a significant
reduction in financial revenue principally due to endof- period foreign
currency translation impacts.
- Recent new wins included, among others:
- ENOVIA new wins: Nokia Siemens Networks in high tech, OKG
in energy, Pacific Brands and Under Armour in apparel, Carbon Motors
in automotive and Parker Hannifin in aerospace;
- SIMULIA new wins: Cambric Corporation in business
services, GN Resound in life sciences and Lenovo in high tech;
- DELMIA new wins: Gillett Evernham Motorsports in
automotive;
- CATIA new wins: Arup in construction and Tenpaku. R
Corporation in automotive;
- SolidWorks new wins: BANSS Schlacht- und Fördertechnik
and Douglas Machine in special machinery and Intertechne in energy.
Cash flow and other financial highlights
Net operating cash flow was up sharply in the 2008 second quarter to
€105.7 million compared to €68.8 million in the year-ago quarter. Cash and
short-term investments totaled €739.7 million and long-term debt totaled
€202.0 million at June 30, 2008.
First Half 2008 Summary Financial Highlights
- First Half 2008 GAAP total revenue up 13% on GAAP software revenue
growth of 16%, both in constant currencies; First Half 2008 GAAP EPS up
19% to €0.70
- First Half 2008 non-GAAP total revenue up 11% on non-GAAP software
revenue growth of 15%, both in constant currencies; First Half 2008
non-GAAP EPS up 7% to €0.87
- First Half 2008 net operating cash flow up 10% to €194.1 million
First Half 2008 Financial Summary
In millions of
U.S. GAAP
Non-GAAP
Euros, except Growth
Growth Growth Growth
per share data
in cc*
in cc*
H1 Total Revenue 633.6 6%
13% 634.1 5% 11%
H1 Software
Revenue 547.1
10% 16% 547.6 8%
15%
H1 EPS 0.70
19% - 0.87
7% -
H1 Operating
Margin 18.6%
- - 24.0%
- -
*In constant currencies.
Key Business and Corporate Highlights
DS announced today that it plans to repurchase up to 2 million shares
over the second half of 2008, subject to market conditions. At the Annual
Shareholders meeting on May 22, 2008, shareholders approved the resolution
authorizing the Board of Directors of Dassault Systems to implement a
new share repurchase program in order to replace the program previously
authorized. During the 2008 first quarter, DS repurchased 961,986 shares
under the previous authorization.
On July 21st, DS completed the previously announced acquisition of
Engineous Software, a market leader in process automation, integration and
optimization. The acquisition is intended to extend SIMULIA’s leadership in
providing Simulation Lifecycle Management solutions on the V6 IP
collaboration platform.
On July 1st, DS spun off Dassault Systems Solutions France (DSF),
its PLM sales division dedicated primarily to small and medium businesses in
France, Belgium and Luxembourg, to become Keonys, a Dassault Systems
Value Added Reseller. As part of Dassault Systems ’ plan launched in 2006 to
build a PLM indirect sales channel, the creation of Keonys is consistent
with the continuous strengthening of this channel comprised of a network of
PLM resellers in more than 60 countries.
On May 29th, DS introduced Version 6 (V6), a next generation PLM 2.0
platform and solution set. This sixth generation version was conceived in
tight collaboration with industry leaders and leverages the success of DS
brands and its V5 PLM. This first release of Dassault Systems ’ Version 6,
V6R2009, covers business processes designed to serve all of the Company’s 11
target industries.
On May 20th, DS announced major advances in the new Abaqus release for
SIMULIA. Abaqus 6.8 provides new and improved capabilities in core areas,
including modeling and results visualization, structural analysis,
composites failure, general contact, computing performance, and multiphysics
Other Business Highlights
- On June 25th, Ford Motor Company awarded a global training program
to the DS services organization.
- On June 9-10th, DS hosted Asia’s largest PLM user conference.
- On June 4th, DS announced the availability of its new PLM solution
developed specifically for the life sciences industry. ENOVIA Life
Science Accelerator for Engineering DesignTM developed on the new DS V6
platform automates product design and regulatory deliverables for
medical device companies.
- On May 22nd, DS inaugurated its Global Virtual Campus for students
and educators – campus.3ds.com. This new community website has been
introduced to facilitate 3D and PLM software learning and exchanges to
help with the educational development of future engineers.
IFRS Financial Information
Dassault Systems expects to publish its IFRS 2008 Half Year Report
on or before August 6, 2008 and will issue a press release at that time
indicating that the Half Year report in French and English has been
published and made available on the Company’s website.
The table on page 13 of this press release sets forth a summary
reconciliation of the Company’s financial results as presented under U.S.
GAAP to its financial results as presented under IFRS as well as a summary
reconciliation of its supplemental non-GAAP financial information to its
supplemental adjusted IFRS financial information.
Business Outlook
Thibault de Tersant, Senior Executive Vice President and CFO, commented,
“We are reconfirming our 2008 financial objectives for software revenue
growth, operating margin expansion and EPS, based upon the business
opportunities we see as well as the visibility provided by our financial
model, and despite the economic environment.
“In July we completed the spin-off of one of our internal reseller
businesses, DSF, and also completed the acquisition of Engineous Software.
Therefore, we are updating our full year revenue range to take into account
the net €6-7 million estimated effect of these transactions, with the new
mid-point of our range now at about €1.325 billion, from €1.332 billion
previously.”
The Company’s objectives are prepared and communicated only on a non-GAAP
basis and are subject to the cautionary statement set forth below. The
Company’s objectives are the following:
- Third quarter 2008 non-GAAP total revenue objective of about €305 to
€315 million and non- GAAP EPS of about €0.41 to €0.44;
- 2008 non-GAAP software revenue objective reiterated at about 12% to
13% growth in constant currencies;
- 2008 non-GAAP operating margin objective reiterated at about 27% to
27.5%;
- Updating 2008 non-GAAP total revenue constant currency objective and
reported revenue range to take into account the net €6-7 million effect
of the July 2008 spin-off of DSF (€11 million revenue impact) and the
addition of Engineous Software (€4 to €5 million revenue estimate)
leading to 2008 non-GAAP revenue growth of about 9% to 10% in constant
currencies and non-GAAP revenue range of about €1.320 to €1.330 billion
from €1.325 to €1.340 billion;
- 2008 non-GAAP EPS reiterated at about €2.10 to €2.17 per diluted
share;
- Objectives based upon exchange rate assumptions for the 2008 third
quarter of US$1.60 per €1.00 and JPY 160 per €1.00 and 2008 full year
exchange rate assumptions of US$1.57 per €1.00 and JPY 160 per €1.00;
- The Company anticipates that it will provide initial objectives with
respect to its fiscal year 2009 at the time of its fourth quarter 2008
announcement which it expects to release in February 2009.
The non-GAAP objectives set forth above do not take into account the
following accounting elements: deferred revenue write-downs estimated at
approximately €1 million for 2008; stock-based compensation expense
estimated at approximately €18 million for 2008 and amortization of acquired
intangibles estimated at approximately €42 million for 2008. Those elements
have not been updated yet to reflect the impact of the Engineous
acquisition. In addition, the above objectives do not include any impact
from other operating income and expense, net comprised of income and
expenses in connection with the relocation of the Company’s corporate
headquarters and restructuring expenses. These estimates also do not include
any new stock option or share grants, or any new acquisitions or
restructurings completed after July 31, 2008.
Webcast and conference call information
Dassault Systems will host a webcast and a conference call today,
Thursday, July 31, 2008. Management will host a webcast at 8:00 AM London
time/9:00 AM CET time and will then host the conference call at 3:00 PM CET/2:00
PM London time/9:00 AM New York time. The webcast and conference call will
be available via the Internet by accessing
http://www.3ds.com/corporate/investors/. Please go to the website at
least fifteen minutes prior to the webcast or conference call to register,
download and install any necessary audio software.
The webcast and conference call will be archived for 30 days. Additional
investor information can be accessed at
http://www.3ds.com/corporate/investors/ or by calling Dassault Systems ’
Investor Relations at 33.1.40.99.69.24.
About Dassault Systems :
As a world leader in 3D and Product Lifecycle Management (PLM) solutions,
Dassault Systems brings value to more than 100,000 customers in 80
countries. A pioneer in the 3D software market since 1981, Dassault Systems
develops and markets PLM application software and services that support
industrial processes and provide a 3D vision of the entire lifecycle of
products from conception to maintenance to recycling. The Dassault Systems
portfolio consists of CATIA for designing the virtual product - SolidWorks
for 3D mechanical design - DELMIA for virtual production - SIMULIA for
virtual testing - ENOVIA for global collaborative lifecycle management, and
3DVIA for online 3D lifelike experiences. Dassault Systems is listed
on the Nasdaq (DASTY) and Euronext Paris (#13065, DSY.PA) stock exchanges.
For more information, visit
http://www.3ds.com
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. GAAP)
(in millions of Euro, except per share data, unaudited)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2008 2007
2008 2007
New licenses revenue 101.2 96.2
201.9 192.0
Periodic licenses,
maintenance and product
development revenue 176.8 157.1
345.2 307.1
Software revenue 278.0 253.3
547.1 499.1
Services and other
revenue
48.2 52.4
86.5 97.5
Total Revenue €326.2
€305.7 €633.6 €596.6
Cost of software
revenue (excluding
amortization
of acquired
intangibles)
12.8 13.1
27.4 25.8
Cost of services and
other revenue
38.9 38.5
74.5 78.7
Research and
development
76.6 75.5 150.3
152.0
Marketing and sales 95.2 88.3
187.7 171.4
General and
administrative 25.6
24.6 52.0
46.0
Amortization of
acquired intangibles 10.4 10.9
21.5 21.8
Other operating income
and expense, net 2.1
0.0 2.5
0.0
Total Operating
Expenses
€261.6 €250.9 €515.9
€495.7
Operating Income €64.6 €54.8
€117.7 €100.9
Financial revenue
and other, net
0.0 3.3
0.2 6.3
Income before income
taxes
64.6 58.1 117.9
107.2
Income tax expense (22.0) (20.1)
(34.7) (36.3)
Minority interest (0.1)
(0.1) (0.1)
(0.1)
Net Income
€42.5 €37.9 €83.1
€70.8
Basic net income per
share
0.36 0.33
0.71 0.61
Diluted net income
per share
€0.36 €0.31 €0.70
€0.59
Basic weighted
average shares
outstanding (in M) 116.9 116.2
117.1 116.1
Diluted weighted
average shares
outstanding (in M) 118.9 119.3
119.3 119.2
U.S. GAAP revenue variation
as reported and in constant currencies
Three months ended Six months ended
June 30, 2008 June 30,
2008
Variation* Variation Variation* Variation
in cc**
in cc**
GAAP Revenue
7% 13%
6% 13%
GAAP Revenue by activity
Software Revenue 10%
17% 10%
16%
Services and other
Revenue
(8%) (2%)
(11%) (6%)
GAAP Software Revenue
by segment PLM
software revenue 11%
17% 10%
17%
of which CATIA
software revenue 14%
20% 15%
22%
of which ENOVIA
software revenue 7%
16% 3%
12%
Mainstream 3D
software revenue 6%
14% 8%
16%
GAAP Revenue by geography
Americas
2% 19%
0% 15% Europe
12% 12%
12% 12%
Asia
3% 10%
3% 10%
* Variation compared to the same period in the prior year. ** In constant
currencies.
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. GAAP)
(in millions of Euro, unaudited)
June 30, December 31
2008 2007
TOTAL ASSETS
Cash and short-term investments
739.7 626.6
Accounts receivable, net
268.4 320.0
Other assets
963.5 1,004.5
Total Assets
€1,971.6 €1,951.1
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt
202.0 202.9
Other liabilities
605.9 552.4
Shareholders' equity
1,163.7 1,195.8
Total Liabilities and Shareholders'
equity
€1,971.6 €1,951.1
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (U.S. GAAP)
(in millions of Euro, unaudited)
Three months ended Six months ended
June 30 June 30 Vari. June 30 June 30 Vari
2008 2007
2008 2007
Net Income
42.5 37.9 4.6 83.1
70.8 12.3
Depreciation
and Amortization
of Property, Plant
& Equipment 5.5
6.6 (1.1) 11.5 12.5
(1.0)mortization of
intangible assets 11.5 12.8 (1.3) 23.6
24.9 (1.3) Other Non Cash
P&L Items 1.8
(5.6) 7.4 0.1 (5.6)
5.7
Changes in working
capital 44.4
17.1 27.3 75.8 74.6
1.2
Net Cash provided
by operating
activities 105.7 68.8
36.9 194.1 177.2 16.9
Acquisition of
assets and equity,
net of cash (14.3) (53.2) 38.9
(24.6) (59.9) 35.3
Sale of assets
and equity 0.0
0.0 0.0 36.2 0.0
36.2
Loans and others 0.2 (0.7) 0.9
0.0 (0.7) 0.7
Net Cash provided
by (used in)
investing
activities (14.1) (53.9) 39.8
11.6 (60.6) 72.2
Borrowings 0.0
0.0 0.0 0.0 0.0
0.0
Share repurchase 0.0 0.0 0.0
(35.0) 0.0 (35.0)
DS Stock Option
and preferred Stock
Exercise 19.1
22.6 (3.5) 23.3 27.8 (4.5)
Cash dividend paid(53.7) (50.8) (2.9) (53.7) (50.8) (2.9)
Payments on capital
lease obligations 0.0 0.0 0.0
0.0 (0.4) 0.4
Net Cash provided
by (used in) financing
activities (1) (34.6) (28.2) (6.4) (65.4) (23.4)
(42.0) Effect of
exchange rate
changes on
treasury (2) (0.2) (4.2) 4.0
(27.2) (7.8) (19.4)
Increase in
treasury (2) 56.8 (17.5) 74.3
113.1 85.4 27.7 Treasury (2) at
beginning of
period
682.9 562.1 - 626.6
459.2 -
Treasury (2) at
end of period 739.7 544.6
739.7 544.6
(1) Excluding changes in short-term investments.
(2) Treasury includes cash, cash equivalents and short-term investments.
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Source: Material used in press releases is often supplied by external
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