SOUTHPOINTE, Pa. -- ANSYS, Inc., a global innovator of simulation software and technologies aimed at optimizing customers' product development processes, announced third quarter 2002 results. ANSYS's third quarter results reflect: -- Total reported revenue increased 6% to $21.7 million from $20.6 million in the third quarter of 2001; -- An overall gross profit margin of 86% and an operating margin, excluding total amortization, of 29%; -- Third quarter adjusted earnings per share, excluding the impact of acquisition-related amortization, of $0.28 compared to $0.23 in the third quarter of 2001; and reported GAAP earnings per share of $0.26 compared to $0.17 in the third quarter of 2001 (in each case including the impact of a $2 million non-recurring charge in 2001, as described below); -- Cash flows from operations of $6.3 million in the third quarter of 2002. For the nine months ended September 30, 2002, ANSYS's financial results reflect: -- Total reported revenue increased 10% to $65.7 million from $59.8 million in the first nine months of 2001; -- An overall gross profit margin of 87% and an operating margin, excluding total amortization, of 30%; -- Adjusted earnings per share, excluding the impact of acquisition-related amortization, for the first nine months of 2002 of $0.86 compared with $0.73 in the first nine months of 2001; and reported GAAP earnings per share of $0.81 for the first nine months of 2002 compared with $0.56 for the first nine months of 2001 (in each case including the impact of a $2 million non-recurring charge in 2001, as described below); -- Cash flows from operations of $16.0 million in the first nine months of 2002. As previously mentioned, ANSYS reported revenue for the three- and nine- month periods ended September 30, 2002 of $21.7 million and $65.7 million, respectively. In 2001, the Company modified its revenue recognition policy for annual software lease licenses to comply with Technical Practice Aid 5100.53 "Fair Value of PCS in a Short-Term Time-Based License and Software Revenue Recognition," issued by the American Institute of Certified Public Accountants. Had this revenue recognition policy modification been initially made in January 2002, revenue for the three- and nine-month periods ended September 30, 2002 would have been approximately $21.0 million and $62.3 million, respectively. Beginning in 2003, this modification will no longer impact the comparability of the Company's reported revenue. As previously reported, the Company recorded a $2 million non-recurring charge in the third quarter of 2001 relating to a dispute with a former distributor. Absent this charge and the impact of acquisition-related amortization, adjusted earnings per share for the quarter and year-to-date periods ended September 30, 2001 were $0.31 and $0.81, respectively. Third Quarter 2002 and Nine Months Ended September 30, 2002 Reported GAAP Results: ANSYS reported net income for the quarter ended September 30, 2002 of $4.1 million, or $0.26 diluted earnings per share, based on 15.5 million weighted average common shares outstanding. For the quarter ended September 30, 2001, ANSYS reported net income of $2.7 million, or $0.17 diluted earnings per share, based on 15.6 million weighted average common shares outstanding. For the nine months ended September 30, 2002, ANSYS reported net income of $12.7 million, or $0.81 diluted earnings per share, based on 15.7 million weighted average common shares outstanding. For the nine months ended September 30, 2001, ANSYS reported net income of $8.6 million, or $0.56 diluted earnings per share, based on 15.4 million weighted average common shares outstanding. Jim Cashman, ANSYS President and CEO, stated, "The third quarter presented us with a combination of both challenges and opportunities. While we continue to face the realities of ongoing pressure on customer capital spending and prolonged sales cycles, we are also cognizant of the need to focus and invest in our top priorities - sales, technology innovation and development of key strategic partnerships. During this past quarter we made progress on a number of important fronts that we believe continue to position ANSYS for future growth as we address the expanding needs of our diverse customer base." Cashman further commented, "ANSYS continues to execute on fundamentals as the Company steers through subdued business conditions caused by persistent global economic sluggishness. We believe that we have a resilient financial model that can continue to drive profitable growth while ANSYS delivers on its promise to provide innovation in engineering simulation. During the third quarter, ANSYS repurchased 86,200 shares of our stock. These repurchases provide an attractive return to our shareholders at current market prices. Our strong cash and short-term investment balance of over $55 million positions ANSYS well for pursuing opportunities for strategic investments, as well as continued share repurchases."