PARIS—(BUSINESS WIRE)—October 29, 2008— Regulatory News:
Dassault Systèmes (DS) (Paris:DSY) (NASDAQ:DASTY) reported U.S. GAAP unaudited financial results for the third quarter and nine months ended September 30, 2008. These results have been reviewed by the Company’s Board of Directors.
Third Quarter 2008 Summary Financial Highlights
- Q3 GAAP software revenue up 12% and GAAP total revenue up 10%, both in constant currencies
- Q3 non-GAAP software revenue up 12% and non-GAAP total revenue up 10%, both in constant currencies
- Q3 GAAP EPS up 38% to €0.36; Q3 non-GAAP EPS up 26% to €0.49;
- 2008 non-GAAP Objectives: Continuing to target software revenue growth objective of 12% in constant currencies; Raising EPS objective.
Third Quarter 2008 Financial Summary |
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(unaudited) |
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In millions of Euros, except per share data | U.S. GAAP | Non-GAAP | ||||||||||
Growth | Growth in cc* | Growth | Growth in cc* | |||||||||
Q3 Total Revenue | 318.3 | 6% | 10% | 319.7 | 6% | 10% | ||||||
Q3 Software Revenue | 276.5 | 8% | 12% | 277.9 | 8% | 12% | ||||||
Q3 EPS | 0.36 | 38% | 0.49 | 26% | ||||||||
Q3 Operating Margin | 16.7% | 23.7% | ||||||||||
* In constant currencies. |
Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, commented, “Dassault Systèmes software revenue growth of 12% in constant currencies during the quarter reflected the increasing momentum of our strategy of diversification into new industries. Further, we saw particular strength coming from our collaboration and simulation software offerings in both the PLM and Mainstream 3D markets. Thanks to our brands and applications strategy, the strengthening of our sales channels, particularly in the mid-market, and growth in our customer base, we were able to deliver third quarter revenue at the high end of our objectives notwithstanding the economic crisis which started to impact our operations early September.
“Based upon our year-to-date performance and fourth quarter outlook, Dassault Systèmes is positioned for solid growth in software revenue and earnings for 2008 reflecting the valuable and measurable benefits our software applications bring to an increasingly diverse group of customers throughout the world. Our goal remains the same – to be a strategic partner to all our customers, in order to help them enhance their products and product innovation processes.”
Third Quarter 2008 Financial Highlights
- GAAP and non-GAAP total revenue increased 10% in constant currencies.
- By geographic region and in constant currencies, total GAAP revenue in Europe was up 12% (non-GAAP up 11%), the Americas increased 15% (non-GAAP up 16%), and Asia increased 1% (non-GAAP flat) on lower results in Japan. Revenue grew above 25% in constant currencies in the faster growing markets comprised primarily of China, India, Brazil, Eastern Europe and Russia.
- GAAP and non-GAAP software revenue increased 12% in constant currencies. Non-GAAP software revenue growth of 12% reflected non-GAAP recurring software revenue growth of 18% and new licenses revenue growth of 1% (all figures in constant currencies). Recurring software revenue accounted for 67% of total software revenue in the quarter.
- GAAP and non-GAAP PLM software revenue increased 11% in constant currencies. In non-GAAP, ENOVIA software revenue increased 19% in constant currencies, SIMULIA software revenue was up double-digits in constant currencies and CATIA software revenue increased 9% in constant currencies.
- Mid-market PLM growth was healthy reflecting the Company’s continued progress in the transformation and expansion of its PLM mid-market sales channel.
- GAAP Mainstream 3D software revenue increased 14% in constant currencies. Non-GAAP Mainstream 3D software revenue increased 13% in constant currencies on growth in SolidWorks installed base recurring revenue and sales of SolidWorks design, product data management and analysis software.
- DS consulting services revenue delivered double-digit revenue growth in constant currencies and operating margin improvement in the third quarter. In total, Services and other revenue, representing 13% of total revenue, was flat in constant currencies during the third quarter, principally reflecting the effect of winding down certain historical channel management activities.
- GAAP operating margin was 16.7%. Non-GAAP operating margin expanded to 23.7%, up from 22.5% in the year-ago quarter on non-GAAP operating income growth of 12%.
- Financial revenue and other improved in the third quarter in relation to both the second quarter and the year-ago third quarter. Specifically, financial revenue and other increased to €9.9 million in the third quarter, up from €1.7 million in the year-ago period. Third quarter 2008 financial revenue and other was principally comprised of net interest income of €3.4 million and net exchange gains of €6.3 million.
- GAAP earnings per diluted share increased 38% to €0.36. Non-GAAP earnings per diluted share increased 26% to €0.49 primarily reflecting an increase in non-GAAP operating income of 12% as well as a strong increase in financial revenue and other principally due to end-of-period foreign currency translation impacts.
- New business activity by industry included, among others:
- Consumer Packaged Goods: Procter & Gamble in the Americas;
- High Tech: Panasonic and Toshiba in Asia; L-3 Communications in the Americas;
- Business Services: TUV Rheinland in Europe and American Bureau of Shipping in the Americas;
- Industrial Machinery: Komatsu and Sanyo Machine Works in Asia and Stara S.A. in the Americas;
- Automotive and Aerospace: EDAG and Piaggio Aero in Europe.
Cash flow and other financial highlights
Net operating cash flow in the 2008 third quarter increased to €67.5 million compared to €62.9 million in the year-ago quarter. Cash and short-term investments totaled €829.6 million and long-term debt totaled €200.8 million at September 30, 2008.
Nine Months 2008 Summary Financial Highlights
- YTD 2008 GAAP software revenue up 15% and GAAP total revenue up 12%, both in constant currencies; YTD 2008 GAAP EPS up 25% to €1.06
- YTD 2008 non-GAAP software revenue up 14% and non-GAAP total revenue up 11%, both in constant currencies; YTD 2008 non-GAAP EPS up 13% to €1.36
- YTD 2008 net operating cash flow up 9% to €261.6 million
Nine Months 2008 Financial Summary |
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(unaudited) |
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In millions of Euros, except per share data | U.S. GAAP | Non-GAAP | ||||||||||
Growth | Growth in cc* | Growth | Growth in cc* | |||||||||
YTD Total Revenue | 951.9 | 6% | 12% | 953.8 | 5% | 11% | ||||||
YTD Software Revenue | 823.6 | 9% | 15% | 825.5 | 8% | 14% | ||||||
YTD EPS | 1.06 | 25% | 1.36 | 13% | ||||||||
YTD Operating Margin | 17.9% | 23.9% | ||||||||||
* In constant currencies. |
Key Business and Corporate Highlights
In a separate press release issued today, DS announced that Procter & Gamble Company (P&G), the world’s largest consumer goods company, has chosen to implement DS’s ENOVIA solution as its enterprise-wide PLM backbone. P&G will leverage Dassault Systèmes’ portfolio to create a global platform to support product development. P&G also uses 3DVIA, SIMULIA, DELMIA and SolidWorks solutions from Dassault Systèmes.
In September, DS held its ENOVIA Customer Conference for the Asia Pacific region in Tokyo, Japan with more than 500 of the region’s leading executives attending. Featured customers included Toshiba in E&E Nikon in semiconductor; Larsen & Toubro in Power, Process & Petroleum/Shipbuilding and Pacific Brands in apparel.
DS SolidWorks introduced SolidWorks® 2009 which delivers dramatic speed increase plus more than 260 customer-driven enhancements. This new software release offers significant performance improvements, continues to focus on ease of use and is designed to extend the gap between SolidWorks software and other software products in the 3D Mainstream market. Among other enhancements, SolidWorks 2009 includes: SpeedPak, a new approach to large assembly handling that dramatically reduces the amount of computer memory needed, while maintaining full graphic detail and associativity; and, Simulation Advisor, which helps users analyze their designs for hidden flaws, guiding them through every stage of the simulation.
DS SolidWorks also announced SolidWorks Enterprise PDM 2009. The new version of the product data management solution introduces deeper integration with SolidWorks® 3D CAD software, expanded bill of material (BOM) functionality, and Item-Centric product data management.
DS announced the availability of its PLM portfolio, Version 5 Release 19, for its CATIA, DELMIA, SIMULIA, ENOVIA and 3DVIA brands. V5R19 enhancements are focused on expanding PLM deeper into production cycles, accelerating PLM adoption for mid-size companies, broadening IP lifecycle management and further integrating PLM within the enterprise ecosystem.
DS introduced Isight for Abaqus, a new product from SIMULIA that leverages technology from recently acquired Engineous Software. Isight for Abaqus is an add-on product for Abaqus FEA software that provides design exploration and optimization technology, enabling designers and engineers using Abaqus to perform rapid trade-off studies of real-world behavior and accelerate product development.
In mid-September, DS announced 3DVIA Shape 2.0, the latest release of its free 3D modeling software featuring an all new and expanded 3D remix capability, which enables users to complete 3D scenes using models contributed by other users on the 3DVIA.com content library.
DS recently announced the completion of its new “green” global headquarters, “Dassault Systèmes Campus,” with employees moving to the campus starting early November. Dassault Systèmes Campus has earned the French HQE (High Quality Environment) label.
Other Corporate Information
On October 16, 2008, Dassault Systèmes’ voluntary delisting from Nasdaq was completed. Dassault Systèmes has filed a Form 15F with the SEC to deregister and terminate its reporting obligations under the Exchange Act. The deregistration will become effective 90 days after the filing of the Form 15F. The Company does not plan to publish a Form 20-F for the fiscal year ended December 31, 2008.
Dassault Systèmes continues to maintain its American Depository Receipt (ADR) program, which will enable investors to retain their ADRs and facilitate trading on the U.S. Over-The-Counter (OTC) market.
Dassault Systèmes will continue to publish its financial reports, statements and press releases in English as well as information for investors on its website ( www.3ds.com) pursuant to section 12g3-2(b) of the U.S. Securities Exchange Act.
The Company intends to continue reporting and publishing quarterly unaudited financial information in U.S. GAAP for the fourth quarter 2008 reporting period in addition to reporting and filing IFRS quarterly financial information as required by the French securities regulation. Starting with fiscal year 2009, DS will solely report and publish its financial information in accordance with IFRS.
IFRS Financial Information
Dassault Systèmes expects to issue a press release on October 30, 2008 summarizing its financial results under IFRS for the three- and nine-month periods ended September 30, 2008. This press release, which will be available in both French and English, will also be posted to the Company’s website.
The tables on page 13 of this press release set 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, “Our third quarter financial performance came in well in line with our objectives, in fact, at the high end with software revenue up 12% in constant currencies and earnings per share rising 26%, demonstrating the inherent earnings leverage of our business model.
“Turning to our outlook, we expect 2008 to be a year of strong, organic software growth for DS. We have factored into our fourth quarter and full year outlook the signs of weakening we saw in September due to the economic crisis. However, thanks to our diversification strategy, sales channels expansion, recurring revenue model and year-to-date results, we continue to target a non-GAAP software revenue growth objective of 12% in constant currencies. Additionally, we are increasing our 2008 non-GAAP EPS objective range to €2.15 to €2.20 from €2.10 to €2.17 previously. Our fourth quarter objective assumes a US dollar to euro exchange rate of $1.45 per €1.00, reflecting the fact that the US dollar continues to be very volatile at this point in time.”
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:
- Fourth quarter 2008 non-GAAP total revenue objective of about €385 to €395 million and non-GAAP EPS of about €0.79 to €0.84;
- 2008 non-GAAP software revenue growth objective of about 12% growth in constant currencies from 12-13%; 2008 non-GAAP total revenue growth objective of about 9% in constant currencies from 9-10%;
- 2008 reported non-GAAP revenue range of about €1.340 to €1.350 billion from €1.320 to €1.330 billion;
- 2008 non-GAAP operating margin improvement objective of 50 to 100 basis points (up to about 27%) from 80 to 130 basis points;
- 2008 non-GAAP EPS objective of about €2.15 to €2.20 per diluted share from €2.10 to €2.17 per diluted share;
- Objectives based upon exchange rate assumptions for the 2008 fourth quarter of US$1.45 per €1.00 and JPY 145 per €1.00 and 2008 full year exchange rate assumptions of US$1.50 per €1.00 and JPY 157 per €1.00;
The non-GAAP objectives set forth above do not take into account the following accounting elements: deferred revenue write-downs estimated at approximately €4 million for 2008; stock-based compensation expense estimated at approximately €21 million for 2008 and amortization of acquired intangibles estimated at approximately €45 million for 2008. 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, which totaled €6 million in the third quarter and €8.5 million year-to-date. These estimates also do not include any new stock option or share grants, or any new acquisitions or restructurings completed after October 29, 2008.
Webcast and conference call information
Dassault Systèmes will host a webcast and a conference call today, Wednesday, October 29, 2008. Management will host a webcast at 8:30 AM London time/9:30 AM CET time and will then host a conference call at 2:00 PM London time/3:00 PM CET/ 10:00 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 Systèmes’ Investor Relations at 33.1.40.99.69.24.
Forward-looking information
Statements herein that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding our non-GAAP financial performance objectives, are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended).
Such forward-looking statements are based on our management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to a range of factors. In preparing such forward-looking statements, we have in particular assumed an average U.S. dollar to euro exchange rate of US$1.45 per €1.00 and an average Japanese yen to euro exchange rate of JPY145 to €1.00 for the 2008 fourth quarter and an average U.S. dollar to euro exchange rate of US$1.50 per €1.00 and an average Japanese yen to euro exchange rate of JPY157 to €1.00 for the full year 2008; however, currency values fluctuate, and our results of operations may be significantly affected by changes in exchange rates. We have also assumed that there will be no substantial decline in general levels of corporate spending on information technology although we have tried to factor in the potential impact of the current global financial crisis on our fourth quarter objectives, and that our increased responsibility for both indirect and direct PLM sales channels, and the resulting commercial and management challenges, will not prevent us from maintaining growth in revenues or cause us to incur substantial unanticipated costs and inefficiencies. Our actual results or performance may also be materially negatively affected by the current global financial crisis, difficulties or adverse changes affecting our partners or our relationships with our partners, including our longstanding, strategic partner, IBM; new product developments and technological changes; errors or defects in our products; growth in market share by our competitors; and the realization of any risks related to the integration of any newly acquired company and internal reorganizations. Unfavorable changes in any of the above or other factors described in the Company’s SEC reports, including the Form 20-F for the year ended December 31, 2007, which was filed with the SEC on April 4, 2008, could materially affect the Company’s financial position or results of operations.
Non-GAAP financial information
Readers are cautioned that the supplemental non-GAAP information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-GAAP financial information may not be comparable to similarly titled non-GAAP measures used by other companies. Further specific limitations for individual non-GAAP measures, and the reasons for presenting non-GAAP financial information, are set forth in the Company’s annual report for the year ended December 31, 2007 on Form 20-F filed with the SEC on April 4, 2008 and in the paragraph below.
In addition to the individual non-GAAP measures described in our most recent Form 20-F, our unaudited U.S. GAAP 2008 quarterly financial statements may reflect other operating income and expense, net comprised of income and expenses related to the relocation of the Company’s corporate headquarters and restructuring expenses. In our supplemental non-GAAP financial information, we exclude other operating income and expense effects because of their infrequent or non-recurring nature. As a result, we believe that our supplemental non-GAAP financial information helps investors better understand the current trends in our operating performance. However, other operating income and expense, net are components of our income and expenses for 2008 and by excluding them the supplemental non-GAAP financial information understates the net impact to our net income in 2008. Other operating income and expense, net are generally not recurring, and we do not expect to incur other operating income and expense, net as part of our normal business on a regular basis.
To compensate for these limitations, the supplemental non-GAAP financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.
The tables on pages 11 and 12 of this press release set forth our supplemental non-GAAP figures for revenue, operating income, operating margin, net income and diluted earnings per share, which exclude the effect of adjusting the carrying value of acquired companies’ deferred revenue, the expenses for the amortization of acquired intangible assets and stock-based compensation expense (in each case, as explained in our Form 20-F), as well as other operating income and expense, net (as explained above). The tables also set forth the most comparable GAAP financial measure and a reconciliation of the GAAP and non-GAAP information.
Information in constant currencies
When the Company believes it would be helpful for understanding trends in its business, the Company provides percentage increases or decreases in its revenue (in both U.S. GAAP and on a non-GAAP basis) to eliminate the effect of changes in currency values, particularly the U.S. dollar and the Japanese yen, relative to the euro. When trend information is expressed herein "in constant currencies", the results of the "current" period have first been recalculated using the average exchange rates of the comparable period in the preceding year, and then compared with the results of the comparable period in the preceding year.
About Dassault Systèmes:
As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 100,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes 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 Systèmes 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 Systèmes’ shares are listed on Euronext Paris (#13065, DSY.PA) and Dassault Systèmes’ ADRs may be traded on the U.S. Over-The-Counter (OTC) market (DASTY). For more information, visit http://www.3ds.com
CATIA, DELMIA, ENOVIA, SIMULIA, SolidWorks and 3DVIA are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries.
DASSAULT SYSTEMES |
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. GAAP) |
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(in millions of Euro, except per share data, unaudited) |
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Three months ended | Nine months ended | |||||||
Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | |||||
2008 | 2007 | 2008 | 2007 | |||||
New licenses revenue | 90.5 | 92.8 | 292.4 | 284.8 | ||||
Periodic licenses, maintenance and product development revenue | 186.0 | 163.1 | 531.2 | 470.2 | ||||
Software revenue | 276.5 | 255.9 | 823.6 | 755.0 | ||||
Services and other revenue | 41.8 | 43.2 | 128.3 | 140.7 | ||||
Total Revenue | € 318.3 | € 299.1 | € 951.9 | € 895.7 | ||||
Cost of software revenue (excluding amortization of acquired intangibles) | 14.3 | 16.0 | 41.7 | 41.8 | ||||
Cost of services and other revenue | 37.6 | 38.4 | 112.1 | 117.1 | ||||
Research and development | 78.1 | 76.3 | 228.4 | 228.3 | ||||
Marketing and sales | 91.3 | 83.5 | 279.0 | 254.9 | ||||
General and administrative | 26.5 | 24.4 | 78.5 | 70.4 | ||||
Amortization of acquired intangibles | 11.4 | 13.6 | 32.9 | 35.4 | ||||
Other operating income and expense, net | 6.0 | 0.0 | 8.5 | 0.0 | ||||
Total Operating Expenses | € 265.2 | € 252.2 | € 781.1 | € 747.9 | ||||
Operating Income | € 53.1 | € 46.9 | € 170.8 | € 147.8 | ||||
Financial revenue and other, net | 9.9 | 1.7 | 10.1 | 8.0 | ||||
Income before income taxes | 63.0 | 48.6 | 180.9 | 155.8 | ||||
Income tax expense | (19.6) | (17.4) | (54.3) | (53.7) | ||||
Minority interest | (0.1) | (0.1) | (0.2) | (0.2) | ||||
Net Income | € 43.3 | € 31.1 | € 126.4 | € 101.9 | ||||
Basic net income per share | 0.37 | 0.27 | 1.08 | 0.88 | ||||
Diluted net income per share | € 0.36 | € 0.26 | € 1.06 | € 0.85 | ||||
Basic weighted average shares outstanding (in millions) | 117.9 | 116.8 | 117.5 | 116.3 | ||||
Diluted weighted average shares outstanding (in millions) | 119.9 | 120.4 | 119.5 | 119.5 | ||||
U.S. GAAP revenue variation as reported and in constant currencies |
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Three months ended Sept. 30, 2008 | Nine months ended Sept. 30, 2008 | |||||||
Variation* | Variation in cc** | Variation* | Variation in cc** | |||||
GAAP Revenue | 6% | 10% | 6% | 12% | ||||
GAAP Revenue by activity | ||||||||
Software Revenue | 8% | 12% | 9% | 15% | ||||
Services and other Revenue | (3%) | 0% | (9%) | (4%) | ||||
GAAP Software Revenue by segment | ||||||||
PLM software revenue | 8% | 11% | 9% | 14% | ||||
of which CATIA software revenue | 6% | 9% | 11% | 17% | ||||
of which ENOVIA software revenue | 16% | 22% | 7% | 13% | ||||
Mainstream 3D software revenue | 9% | 14% | 9% | 13% | ||||
GAAP Revenue by geography | ||||||||
Americas | 6% | 15% | 2% | 15% | ||||
Europe | 12% | 12% | 12% | 12% | ||||
Asia | (2%) | 1% | 2% | 7% | ||||
* Variation compared to the same period in the prior year. ** In constant currencies. |
DASSAULT SYSTEMES |
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CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. GAAP) |
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(in millions of Euro, unaudited) |
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Sept. 30, | Dec. 31, | |||
2008 | 2007 | |||
ASSETS | ||||
Cash and short-term investments | 829.6 | 626.6 | ||
Accounts receivable, net | 265.1 | 320.0 | ||
Other assets | 1,069.5 | 1,004.5 | ||
Total Assets | € 2,164.2 | € 1,951.1 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Long-term debt | 200.8 | 202.9 | ||
Other liabilities | 651.9 | 552.4 | ||
Shareholders' equity | 1,311.5 | 1,195.8 | ||
Total Liabilities and Shareholders' equity | € 2,164.2 | € 1,951.1 |
DASSAULT SYSTEMES |
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CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (U.S. GAAP) |
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(in millions of Euro, unaudited) |
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Three months ended | Nine months ended | |||||||||||
Sept. 30, 2008 | Sept. 30, 2007 | Variation | Sept. 30, 2008 | Sept. 30, 2007 | Variation | |||||||
Net Income | 43.3 | 31.1 | 12.2 | 126.4 | 101.9 | 24.5 | ||||||
Depreciation and Amortization of Property, Plant & Equipment | 5.5 | 7.3 | (1.8) | 17.0 | 19.8 | (2.8) | ||||||
Amortization of intangible assets | 12.6 | 12.2 | 0.4 | 36.2 | 37.1 | (0.9) | ||||||
Other Non Cash P&L Items | 0.1 | 1.4 | (1.3) | 0.2 | (4.2) | 4.4 | ||||||
Changes in working capital | 6.0 | 10.9 | (4.9) | 81.8 | 85.5 | (3.7) | ||||||
Net Cash provided by operating activities | 67.5 | 62.9 | 4.6 | 261.6 | 240.1 | 21.5 | ||||||
Acquisition of assets and equity, net of cash acquired | (42.1) | (30.4) | (11.7) | (66.7) | (90.3) | 23.6 | ||||||
Sale of assets and equity | 0.4 | 0.1 | 0.3 | 36.6 | 0.1 | 36.5 | ||||||
Loans and others | (0.3) | 0.2 | (0.5) | (0.3) | (0.5) | 0.2 | ||||||
Net Cash provided by (used in) investing activities | (42.0) | (30.1) | (11.9) | (30.4) | (90.7) | 60.3 | ||||||
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 | 19.5 | 10.1 | 9.4 | 42.8 | 37.9 | 4.9 | ||||||
Cash dividend paid | 0.0 | 0.0 | 0.0 | (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) | 19.5 | 10.1 | 9.4 | (45.9) | (13.3) | (32.6) | ||||||
Effect of exchange rate changes on
treasury (2) |
44.9 | (16.4) | 61.3 | 17.7 | (24.2) | 41.9 | ||||||
Increase in treasury (2) | 89.9 | 26.5 | 63.4 | 203.0 | 111.9 | 91.1 | ||||||
Treasury (2) at beginning of period | 739.7 | 544.6 | 626.6 | 459.2 | ||||||||
Treasury (2) at end of period | 829.6 | 571.1 | 829.6 | 571.1 | ||||||||
(1) Excluding changes in short-term investments. |
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(2) Treasury includes cash, cash equivalents and short-term investments. |
DASSAULT SYSTEMES
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
U.S. GAAP – NON-GAAP RECONCILIATION
(in millions of Euro, except per share data, unaudited)
Readers are cautioned that the supplemental non-GAAP information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-GAAP financial information may not be comparable to similarly titled non-GAAP measures used by other companies. Further specific limitations for individual non-GAAP measures, and the reasons for presenting non-GAAP financial information, are set forth in today’s press release with respect to other operating income and expense, net and in the Company’s annual report for the year ended December 31, 2007 on Form 20-F filed with the SEC on April 4, 2008 for the other non-GAAP financial measures. To compensate for these limitations, the supplemental non-GAAP financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.
In millions of Euros, except per share data and percentages | Three months ended Sept. 30, | Variation | ||||||||||||||
2008 |
Adjustment |
2008 | 2007 |
Adjustment |
2007 | U.S. GAAP |
Non-GAAP |
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U.S. GAAP |
(1) |
non-GAAP | U.S. GAAP |
(1) |
non-GAAP |
(2) |
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Total Revenue | € 318.3 | 1.4 | € 319.7 | € 299.1 | 2.2 | € 301.3 | 6% | 6% | ||||||||
Total Revenue breakdown by activity | ||||||||||||||||
Software revenue | 276.5 | 1.4 | 277.9 | 255.9 | 2.2 | 258.1 | 8% | 8% | ||||||||
New Licenses | 90.5 | 92.8 | (2%) | |||||||||||||
Product Development | 1.3 | 1.6 | -- | |||||||||||||
Periodic Licenses and Maintenance | 184.7 | 1.4 | 186.1 | 161.5 | 2.2 | 163.7 | 14% | 14% | ||||||||
Recurring portion of Software revenue | 67% | 67% | 63% | 63% | ||||||||||||
Services and other revenue | 41.8 | 43.2 | (3%) | |||||||||||||
Total Software Revenue breakdown by segment | ||||||||||||||||
PLM software revenue | 208.9 | 1.4 | 210.3 | 193.9 | 1.9 | 195.8 | 8% | 7% | ||||||||
of which CATIA software revenue | 122.5 | 116.0 | 0.9 | 116.9 | 6% | 5% | ||||||||||
of which ENOVIA software revenue | 43.8 | 37.7 | 1.0 | 38.7 | 16% | 13% | ||||||||||
Mainstream 3D software revenue | 67.6 | 62.0 | 0.3 | 62.3 | 9% | 9% | ||||||||||
Total Revenue breakdown by geography | ||||||||||||||||
Americas | 101.4 | 1.3 | 102.7 | 96.1 | 0.9 | 97.0 | 6% | 6% | ||||||||
Europe | 146.1 | 0.1 | 146.2 | 130.9 | 1.0 | 131.9 | 12% | 11% | ||||||||
Asia | 70.8 | 72.1 | 0.3 | 72.4 | (2%) | (2%) | ||||||||||
Total Operating Expenses | € 265.2 | (21.4) | € 243.8 | € 252.2 | (18.7) | € 233.5 | 5% | 4% | ||||||||
Stock-based compensation expense | 4.0 | (4.0) | - | 5.1 | (5.1) | - | -- | -- | ||||||||
Amortization of acquired intangibles | 11.4 | (11.4) | - | 13.6 | (13.6) | - | -- | -- | ||||||||
Other operating income and expense, net | 6.0 | (6.0) | - | 0.0 | -- | -- | ||||||||||
Operating Income | € 53.1 | 22.8 | € 75.9 | € 46.9 | 20.9 | € 67.8 | 13% | 12% | ||||||||
Operating Margin | 16.7% | 23.7% | 15.7% | 22.5% | ||||||||||||
Income before Income Taxes | 63.0 | 22.8 | 85.8 | 48.6 | 20.9 | 69.5 | 30% | 23% | ||||||||
Income tax expense | (19.6) | (7.4) | (27.0) | (17.4) | (5.3) | (22.7) | -- | -- | ||||||||
Income tax effect of adjustments above | 7.4 | (7.4) | - | 5.3 | (5.3) | - | -- | -- | ||||||||
Minority interest | (0.1) | (0.1) | -- | |||||||||||||
Net Income | € 43.3 | 15.4 | € 58.7 | € 31.1 | 15.6 | € 46.7 | 39% | 26% | ||||||||
Diluted Net Income Per Share (3) | € 0.36 | 0.13 | € 0.49 | € 0.26 | 0.13 | € 0.39 | 38% | 26% |
(1) In the reconciliation schedule above, (i) all non-GAAP adjustments to GAAP revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-GAAP adjustments to operating expense data reflect the exclusion of the amortization of acquired intangibles, other operating income and expense, net and stock-based compensation expense (as detailed below); and (iii) all non-GAAP adjustments to GAAP net income data reflect the combined effect of these non-GAAP adjustments.
Three months ended Sept. 30, | ||||||||||||
In millions of Euros | 2008 U.S. GAAP | 2008 | 2007 U.S. GAAP | 2007 | ||||||||
Adjustment | non-GAAP | Adjustment | non-GAAP | |||||||||
Cost of services and other revenue | 37.6 | 38.4 | (0.2) | 38.2 | ||||||||
Research and development | 78.1 | (2.3) | 75.8 | 76.3 | (3.0) | 73.3 | ||||||
Marketing and sales | 91.3 | (0.8) | 90.5 | 83.5 | (1.0) | 82.5 | ||||||
General and administrative | 26.5 | (0.9) | 25.6 | 24.4 | (0.9) | 23.5 | ||||||
Total stock-based compensation expense | (4.0) | (5.1) |
(2) The non-GAAP percentage increase (decrease) compares non-GAAP measures for the two different periods. In the event there is a non-GAAP adjustment to the relevant measure for only one of the periods under comparison, the non-GAAP increase (decrease) compares the non-GAAP measure to the relevant GAAP measure.
(3) Based on a weighted average 119.9 million diluted shares for Q3 2008 and 120.4 million diluted shares for Q3 2007.
DASSAULT SYSTEMES
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
U.S. GAAP – NON-GAAP RECONCILIATION
(in millions of Euro, except per share data, unaudited)
Readers are cautioned that the supplemental non-GAAP information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-GAAP financial information may not be comparable to similarly titled non-GAAP measures used by other companies. Further specific limitations for individual non-GAAP measures, and the reasons for presenting non-GAAP financial information, are set forth in today’s press release with respect to other operating income and expense, net and in the Company’s annual report for the year ended December 31, 2007 on Form 20-F filed with the SEC on April 4, 2008 for the other non-GAAP financial measures. To compensate for these limitations, the supplemental non-GAAP financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.
In millions of Euros, except per share data and percentages | Nine months ended Sept. 30, | Variation | ||||||||||||||
2008 |
Adjustment |
2008 | 2007 |
Adjustment |
2007 | U.S. GAAP |
Non-GAAP |
|||||||||
U.S. GAAP |
(1) |
non-GAAP | U.S. GAAP |
(1) |
non-GAAP |
(2) |
||||||||||
Total Revenue | € 951.9 | 1.9 | € 953.8 | € 895.7 | 9.1 | € 904.8 | 6% | 5% | ||||||||
Total Revenue breakdown by activity | ||||||||||||||||
Software revenue | 823.6 | 1.9 | 825.5 | 755.0 | 9.1 | 764.1 | 9% | 8% | ||||||||
New Licenses | 292.4 | 284.8 | 3% | |||||||||||||
Product Development | 1.4 | 4.2 | -- | |||||||||||||
Periodic Licenses and Maintenance | 529.8 | 1.9 | 531.7 | 466.0 | 9.1 | 475.1 | 14% | 12% | ||||||||
Recurring portion of Software revenue | 64% | 64% | 62% | 62% | ||||||||||||
Services and other revenue | 128.3 | 140.7 | (9%) | |||||||||||||
Total Software Revenue breakdown by segment | ||||||||||||||||
PLM software revenue | 622.4 | 1.9 | 624.3 | 569.7 | 6.4 | 576.1 | 9% | 8% | ||||||||
of which CATIA software revenue | 371.5 | 0.3 | 371.8 | 333.2 | 1.1 | 334.3 | 11% | 11% | ||||||||
of which ENOVIA software revenue | 125.2 | 0.2 | 125.4 | 116.6 | 5.3 | 121.9 | 7% | 3% | ||||||||
Mainstream 3D software revenue | 201.2 | 185.3 | 2.7 | 188.0 | 9% | 7% | ||||||||||
Total Revenue breakdown by geography | ||||||||||||||||
Americas | 291.2 | 1.5 | 292.7 | 285.8 | 4.3 | 290.1 | 2% | 1% | ||||||||
Europe | 441.9 | 0.3 | 442.2 | 394.5 | 3.6 | 398.1 | 12% | 11% | ||||||||
Asia | 218.8 | 0.1 | 218.9 | 215.4 | 1.2 | 216.6 | 2% | 1% | ||||||||
Total Operating Expenses | € 781.1 | (55.2) | € 725.9 | € 747.9 | (48.2) | € 699.7 | 4% | 4% | ||||||||
Stock-based compensation expense | 13.8 | (13.8) | - | 12.8 | (12.8) | - | -- | -- | ||||||||
Amortization of acquired intangibles | 32.9 | (32.9) | - | 35.4 | (35.4) | - | -- | -- | ||||||||
Other operating income and expense, net | 8.5 | (8.5) | - | 0.0 | -- | -- | ||||||||||
Operating Income | € 170.8 | 57.1 | € 227.9 | € 147.8 | 57.3 | € 205.1 | 16% | 11% | ||||||||
Operating Margin | 17.9% | 23.9% | 16.5% | 22.7% | ||||||||||||
Income before Income Taxes | 180.9 | 57.1 | 238.0 | 155.8 | 57.3 | 213.1 | 16% | 12% | ||||||||
Income tax expense | (54.3) | (21.1) | (75.4) | (53.7) | (16.2) | (69.9) | -- | -- | ||||||||
Income tax effect of adjustments above | 21.1 | (21.1) | - | 16.2 | (16.2) | - | -- | -- | ||||||||
Minority interest | (0.2) | (0.2) | -- | |||||||||||||
Net Income | € 126.4 | 36.0 | € 162.4 | € 101.9 | 41.1 | € 143.0 | 24% | 14% | ||||||||
Diluted Net Income Per Share (3) | € 1.06 | 0.30 | € 1.36 | € 0.85 | 0.35 | € 1.20 | 25% | 13% |
(1) In the reconciliation schedule above, (i) all non-GAAP adjustments to GAAP revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-GAAP adjustments to operating expense data reflect the exclusion of the amortization of acquired intangibles, other operating income and expense, net, and stock-based compensation expense (as detailed below); and (iii) all non-GAAP adjustments to GAAP net income data reflect the combined effect of these non-GAAP adjustments.
Nine months ended Sept. 30, | ||||||||||||
In millions of Euros | 2008 U.S. GAAP | 2008 | 2007 U.S. GAAP | 2007 | ||||||||
Adjustment | non-GAAP | Adjustment | non-GAAP | |||||||||
Cost of services and other revenue | 112.1 | (0.4) | 111.7 | 117.1 | (0.5) | 116.6 | ||||||
Research and development | 228.4 | (8.0) | 220.4 | 228.3 | (7.4) | 220.9 | ||||||
Marketing and sales | 279.0 | (2.7) | 276.3 | 254.9 | (2.6) | 252.3 | ||||||
General and administrative | 78.5 | (2.7) | 75.8 | 70.4 | (2.3) | 68.1 | ||||||
Total stock-based compensation expense | (13.8) | (12.8) |
(2) The non-GAAP percentage increase (decrease) compares non-GAAP measures for the two different periods. In the event there is a non-GAAP adjustment to the relevant measure for only one of the periods under comparison, the non-GAAP increase (decrease) compares the non-GAAP measure to the relevant GAAP measure.
(3) Based on a weighted average 119.5 million diluted shares for YTD 2008 and 119.5 million diluted shares for YTD 2007.
DASSAULT SYSTEMES |
||||||||||||
U.S. GAAP – IFRS SUMMARY RECONCILIATION |
||||||||||||
(in millions of Euro, except per share data, unaudited) |
||||||||||||
In millions of Euros | Three months ended Sept. 30, | |||||||||||
2008 | Adjustment | 2008 | 2007 | Adjustment | 2007 | |||||||
U.S. GAAP | IFRS | U.S. GAAP | IFRS | |||||||||
Total Revenue |
€ 318.3 |
€ 0.0 | € 318.3 | € 299.1 | € 0.0 | € 299.1 | ||||||
Operating Income |
€ 53.1 |
€ 1.4 | € 54.5 | € 46.9 | € 3.9 | € 50.8 | ||||||
Amortization of acquired intangibles | (11.4) | 1.6 | (9.8) | (13.6) | 3.9 | (9.7) | ||||||
Other operating income and expense, net* | (6.0) | (0.2) | (6.2) | 0.0 | 0.0 | 0.0 | ||||||
Net Income | € 43.3 | € 0.9 | € 44.2 | € 31.1 | € 3.1 | € 34.2 | ||||||
Amortization of acquired intangibles | (11.4) | 1.6 | (9.8) | (13.6) | 3.9 | (9.7) | ||||||
Other operating income and expense, net* | (6.0) | (0.2) | (6.2) | 0.0 | 0.0 | 0.0 | ||||||
Income tax Expense | (19.6) | (0.5) | (20.1) | (17.4) | (0.8) | (18.2) | ||||||
Shareholders' equity | € 1,311.5 | (€ 61.4) | € 1,250.1 | € 1,149.7 | (€ 82.5) | € 1,067.2 | ||||||
In millions of Euros | Nine months ended Sept. 30, | |||||||||||
2008 | Adjustment | 2008 | 2007 | Adjustment | 2007 | |||||||
U.S. GAAP | IFRS | U.S. GAAP | IFRS | |||||||||
Total Revenue | € 951.9 | € 0.0 | € 951.9 | € 895.7 | € 0.0 | € 895.7 | ||||||
Operating Income | € 170.8 | € 21.5 | € 192.3 | € 147.8 | € 9.7 | € 157.5 | ||||||
Amortization of acquired intangibles | (32.9) | 4.5 | (28.4) | (35.4) | 9.7 | (25.7) | ||||||
Other operating income and expense, net* | (8.5) | 17.0 | 8.5 | 0.0 | 0.0 | 0.0 | ||||||
Net Income | € 126.4 | € 18.0 | € 144.4 | € 101.9 | € 6.8 | € 108.7 | ||||||
Amortization of acquired intangibles | (32.9) | 4.5 | (28.4) | (35.4) | 9.7 | (25.7) | ||||||
Other operating income and expense, net* | (8.5) | 17.0 | 8.5 | 0.0 | 0.0 | 0.0 | ||||||
Income tax Expense | (54.3) | (3.5) | (57.8) | (53.7) | (2.9) | (56.6) | ||||||
Shareholders' equity | € 1,311.5 | (€ 61.4) | € 1,250.1 | € 1,149.7 | (€ 82.5) | € 1,067.2 | ||||||
* Under U.S. GAAP the Company will recognize the gain on sale of real estate in connection with the relocation of its corporate headquarters in the 2008 fourth quarter. Under IFRS the gain on sales was recognized in the 2008 second quarter. |
DASSAULT SYSTEMES
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
Non-GAAP – Adjusted IFRS SUMMARY RECONCILIATION
(in millions of Euro, except per share data, unaudited)
Readers are cautioned that the supplemental non-GAAP and adjusted IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP or IFRS measurements. Also, our supplemental non-GAAP and adjusted IFRS financial information may not be comparable to similarly titled non-GAAP and adjusted IFRS measures used by other companies. Further specific limitations for individual non-GAAP and adjusted IFRS measures, and the reasons for presenting non-GAAP and adjusted IFRS financial information, are set forth in today’s press release with respect to other operating income and expense, net and in the Company’s annual report for the year ended December 31, 2007 on Form 20-F filed with the SEC on April 4, 2008 and in the Document de Référence filed with the AMF on April 4, 2008 for the other non-GAAP and adjusted IFRS financial measures. To compensate for these limitations, the supplemental non-GAAP and adjusted IFRS financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP and IFRS.
NON-GAAP BASIS |
||||||||||||
In millions of Euros | Three months ended Sept. 30, | |||||||||||
2008 | Adjustment | 2008 | 2007 | Adjustment | 2007 | |||||||
non-GAAP | IFRS adjusted | non-GAAP | IFRS adjusted | |||||||||
Total Revenue | € 319.7 | € 0.0 | € 319.7 | € 301.3 | € 0.0 | € 301.3 | ||||||
Operating Income | € 75.9 | € 0.0 | € 75.9 | € 67.8 | € 0.0 | € 67.8 | ||||||
Net Income | € 58.7 | € 0.0 | € 58.7 | € 46.7 | € 0.0 | € 46.7 | ||||||
In millions of Euros | Nine months ended Sept. 30, | |||||||||||
2008 | Adjustment | 2008 | 2007 | Adjustment | 2007 | |||||||
non-GAAP | IFRS adjusted | non-GAAP | IFRS adjusted | |||||||||
Total Revenue | € 953.8 | € 0.0 | € 953.8 | € 904.8 | € 0.0 | € 904.8 | ||||||
Operating Income | € 227.9 | € 0.0 | € 227.9 | € 205.1 | € 0.0 | € 205.1 | ||||||
Net Income | € 162.4 | € 0.0 | € 162.4 | € 143.0 | € 0.0 | € 143.0 |
DASSAULT SYSTEMES
NON-GAAP KEY FIGURES
(in millions of Euro, except per share data, headcount and exchange rates, unaudited)
Non-GAAP key figures exclude the effects of adjusting the carrying value of acquired companies’ deferred revenue, amortization of acquired intangible assets, stock-based compensation expense and other operating income and expense, net.
Comparable U.S. GAAP financial information and a reconciliation of the GAAP and non-GAAP measures are set forth in the preceding tables.
KEY FIGURES | ||||||||||||||||
Non-GAAP | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
Sept. 30, 2008 | Sept. 30, 2007 | Variation | Variation in cc* | Sept. 30, 2008 | Sept. 30, 2007 | Variation | Variation in cc* | |||||||||
Non-GAAP Revenue | € 319.7 | € 301.3 | 6% | 10% | € 953.8 | € 904.8 | 5% | 11% | ||||||||
Non-GAAP Revenue breakdown by activity | ||||||||||||||||
Software Revenue | 277.9 | 258.1 | 8% | 12% | 825.5 | 764.1 | 8% | 14% | ||||||||
of which New Licenses Revenue | 90.5 | 92.8 | (2%) | 1% | 292.4 | 284.8 | 3% | 8% | ||||||||
of which Periodic Licenses, Maintenance and
Product Development Revenue |
187.4 | 165.3 | 13% | 17% | 533.1 | 479.3 | 11% | 17% | ||||||||
Services and other Revenue | 41.8 | 43.2 | (3%) | 0% | 128.3 | 140.7 | (9%) | (4%) | ||||||||
Non-GAAP Software Revenue breakdown by segment | ||||||||||||||||
PLM software Revenue | 210.3 | 195.8 | 7% | 11% | 624.3 | 576.1 | 8% | 14% | ||||||||
of which CATIA software Revenue | 122.5 | 116.9 | 5% | 9% | 371.8 | 334.3 | 11% | 17% | ||||||||
of which ENOVIA software Revenue | 43.8 | 38.7 | 13% | 19% | 125.4 | 121.9 | 3% | 10% | ||||||||
Mainstream 3D software Revenue | 67.6 | 62.3 | 9% | 13% | 201.2 | 188.0 | 7% | 14% | ||||||||
Non-GAAP Revenue breakdown by geography | ||||||||||||||||
Americas | 102.7 | 97.0 | 6% | 16% | 292.7 | 290.1 | 1% | 14% | ||||||||
Europe | 146.2 | 131.9 | 11% | 11% | 442.2 | 398.1 | 11% | 11% | ||||||||
Asia | 70.8 | 72.4 | (2%) | 0% | 218.9 | 216.6 | 1% | 6% | ||||||||
Non-GAAP Operating Income | € 75.9 | € 67.8 | 12% | € 227.9 | € 205.1 | 11% | ||||||||||
Non-GAAP Operating Margin | 23.7% | 22.5% | 23.9% | 22.7% | ||||||||||||
Non-GAAP Net Income | 58.7 | 46.7 | 26% | 162.4 | 143.0 | 14% | ||||||||||
Non-GAAP Diluted Net Income Per Share | € 0.49 | € 0.39 | 26% | € 1.36 | € 1.20 | 13% | ||||||||||
Closing headcount | 7,825 | 7,255 | 8% | |||||||||||||
Average Rate USD per Euro | 1.50 | 1.37 | 9% | 1.52 | 1.34 | 13% | ||||||||||
Average Rate JPY per Euro | 161.8 | 161.9 | (0%) | 161.0 | 160.4 | 0% | ||||||||||
* In constant currencies. |
Contact: Dassault Systemes: Valerie Agathon/Beatrix Martinez 33.1.40.99.69.24 or Financial Dynamics: Juliet Clarke/Haya Chelhot/Erwan Gouraud 44.20.7831.3113 or Laurence Borbalan/Eloi Perrin-Aussedat Florence de Montmarin 33.1.47.03.68.10