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ANSYS, a global innovator of simulation software and technologies designed to optimize product development processes, today announced second quarter 2005 results. ANSYS' second quarter GAAP results include: -- Total revenue of $37.7 million, as compared to $32.0 million in the second quarter of 2004; total revenue of $75.3 million in the first six months of 2005 as compared to $63.3 million for the six months ended June 30, 2004; -- Net income of $9.8 million, as compared to $7.6 million in the second quarter of 2004; net income of $19.5 million in the first six months of 2005 as compared to $14.7 million for the first six months of 2004; -- An operating profit margin of 35.4% as compared to 33.4% for the second quarter of 2004; an operating profit margin of 35.5% as compared to 32.6% for the first six months of 2004; -- Diluted earnings per share of $0.29, as compared to $0.23 for the second quarter of 2004; diluted earnings per share of $0.58 through June 30, 2005 as compared to $0.45 for the first six months of 2004; -- Cash flows from operations of $17.6 million for the second quarter of 2005 and $32.9 million for the first six months of 2005; and -- Cash and short-term investment balances totaling $163.4 million as of June 30, 2005. Excluding acquisition-related amortization, ANSYS' second quarter adjusted (non-GAAP) results include: -- An adjusted operating profit margin of 38.4% as compared to 36.1% for the second quarter of 2004; an adjusted operating profit margin of 38.5% as compared to 35.4% for the first six months of 2004; and -- Adjusted diluted earnings per share of $0.31 as compared to $0.25 for the second quarter of 2004; and adjusted diluted earnings per share of $0.62 compared to $0.48 for the six-month period ended June 30, 2004. ANSYS President and CEO, Jim Cashman commented, "We are pleased to announce another quarter of solid financial results driven by a combination of double-digit revenue growth in all major geographies and continued strength in our core business." Mr. Cashman continued, "Overall we are encouraged by what we have been able to deliver in the first half of this year and remain optimistic about our long-term business prospects. We believe that our performance underscores our commitment to remaining customer focused and operationally disciplined to drive results across multiple fronts. During the quarter, we also repurchased approximately 92,000 shares of common stock in the open market, as we believe this is a good use of capital and will enhance long-term shareholder value." Mr. Cashman concluded, "During this quarter, we continued to demonstrate success and progress against our overall business plan as was evidenced by the recent major releases of new and enhanced software products and the expansion of customer and partner relationships. The repeat recognition of FORTUNE and Business 2.0 is gratifying and a credit to the entire ANSYS team - including dedicated employees, a network of valued partners and a loyal customer base - who have helped us create a successful foundation to achieve leading-edge technological and operational excellence as we continue to position ANSYS as a preeminent global innovator of simulation software." Recent highlights for the Company include the following: -- Announced ANSYS 10.0, which offers major advances in performance, ease-of-use, interoperability and coupled physics technology, building upon the significant advances delivered with ANSYS 9.0 and taking full advantage of the ANSYS Workbench infrastructure for integrated CAE. -- Announced partnership with RoboBat, a leading supplier of analytical and CAD software solutions for the structural engineer, to offer integration of RoboBat's Engineering System Open Platform software with ANSYS Workbench technology which expands users' access to structural engineering applications and increases their productivity. -- Advanced its AUTODYN(R) software, developed by Century Dynamics, Inc. (a subsidiary of ANSYS, Inc.), Version 6.0 which brings increased fluid structure interaction capabilities for fast, transient dynamics of solids, fluids, gases and their interactions. -- Selected as official computational fluid dynamics supplier to Emirates Team New Zealand, the sailing team who won the America's Cup from 1995 to 2003 and is seeking to recapture victory in 2007. -- Named to FORTUNE Small Business magazine's annual list of the "100 Fastest-Growing Small Companies in America" for second consecutive year. -- Recognized for the fourth consecutive year in Business 2.0's Annual "B2 100" Ranking of Fastest-Growing Technology Companies. -- Presented fourth annual 2005 College Design Engineering Award to a University of Washington team of engineering students as part of its continuing support of engineering education. The adjusted results highlighted above, and the adjusted estimates for 2005 discussed below, represent non-GAAP (Generally Accepted Accounting Principles) financial measures. A reconciliation of these measures to the appropriate GAAP measures, for the three months and six months ended June 30, is included in the condensed financial information included in this release. Adjustments to Reported GAAP Financial Results -- Acquisition-Related Amortization: As previously announced, the Company completed its acquisition of Century Dynamics, Inc. in January 2005. In previous years, the Company also acquired CFX, CADOE S.A. and ICEM CFD Engineering. These acquisitions have all been accounted for as purchases, resulting in the recording of a significant amount of identifiable intangible assets. ANSYS is providing, and has historically provided, its current quarter GAAP results as well as financial results that have been adjusted for the impact of acquisition-related amortization. The Company believes that these non-GAAP measures supplement its consolidated GAAP financial statements as they provide a consistent basis for comparison between quarters that are not influenced by certain non-cash items and are therefore useful to investors in helping them to better understand the Company's operating results. In certain instances, such as when intangibles are acquired through business acquisitions or become fully amortized, amortization expense associated with acquired intangibles also makes period-to-period comparisons difficult because amortization expense may appear in one period but not in the comparable period. Management uses these non-GAAP financial measures internally to evaluate the Company's business performance; however, these measures are not intended to supersede or replace the GAAP results. Management's 2005 Outlook Based upon our first half results and our current visibility into revenues and expenditures for the remainder of 2005, the Company currently projects that full year revenue will grow in the 13 to 15% range and that 2005 diluted earnings per share, adjusted to exclude acquisition-related amortization, will be in the range of $1.23 to $1.25. The Company's current outlook relative to a GAAP diluted earnings per share estimate will be in the range of $1.15 to $1.17. The preceding estimates do not reflect expenses associated with employee stock options. The Company expects to begin recording stock option expense effective January 1, 2006 in accordance with recent guidance issued by the Securities and Exchange Commission.