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SOUTHPOINTE, Pa. -- ANSYS Inc. (NASDAQ:ANSS) , a global innovator of simulation software and technologies aimed at optimizing customers' product development processes, today announced first quarter 2003 results. ANSYS' first quarter GAAP results include: -- Total revenue of $24.6 million, as compared to $21.3 million in the first quarter of 2002; -- Diluted earnings per share of $0.27 as compared to $0.25 for the first quarter of 2002; and -- Cash flows from operations of $11.5 million. Excluding the adverse impact on reported software license revenue of purchase accounting adjustments related to the Company's February 2003 acquisition of CFX and acquisition-related amortization (see discussion below), ANSYS' first quarter adjusted (non-GAAP) results include: -- Total adjusted revenue of $25.1 million, as compared to $21.3 million in the first quarter of 2002; -- An overall adjusted operating profit margin, excluding total amortization, of 29% as compared to 29% for the first quarter of 2002; and -- Adjusted diluted earnings per share of $0.32 compared to $0.26 in the first quarter of 2002. The adjusted results highlighted above represent non-GAAP (Generally Accepted Accounting Principles) financial measures. A reconciliation of these measures to the appropriate GAAP measures is included in the condensed financial statements included in this release. Adjustments to Reported GAAP Financial Results: -- Purchase Accounting Adjustment for Acquired Deferred Revenue: As announced February 26, 2003, ANSYS acquired CFX for approximately $21 million in cash. In accordance with the fair value provisions of EITF 01-3 "Accounting in a Business Combination for Deferred Revenue of an Acquiree," acquired deferred software license revenue of approximately $4.8 million was recorded on the opening balance sheet, which was approximately $3.4 million lower than the historical carrying value. Although this purchase accounting requirement will have no impact on the Company's business or cash flow, it will adversely impact the Company's reported GAAP software license revenue for the first twelve months post-acquisition. In order to provide investors with financial information that will facilitate comparison of both historical and future results, the Company will provide adjusted financial information, which excludes the impact of the purchase accounting adjustment, through this twelve-month period. -- Acquisition-Related Amortization: As previously discussed, the Company completed its recent acquisition of CFX in February 2003. Prior to that, the Company also acquired CADOE S.A. and ICEM CFD Engineering in November 2001 and August 2000, respectively. These acquisitions have all been accounted for as purchases, resulting in the recording of a significant amount of goodwill and identifiable intangible assets. As a result of the amortization associated with intangible assets related to these acquisitions, ANSYS' quarterly and year-to-date financial results are not comparable with prior periods. To enable investors and other interested parties to compare 2003 financial results to historical and future periods, ANSYS is providing its 2003 first quarter reported GAAP results as well as financial results that have been adjusted for the impact of the items described above. First Quarter 2003 and First Quarter 2002 Reported GAAP Results: ANSYS reported net income for the first quarter of $4.3 million, or $0.27 diluted earnings per share, based on 15.6 million weighted average common shares outstanding. For the quarter ended March 31, 2002, ANSYS reported net income of $3.9 million, or $0.25 diluted earnings per share, based on 15.8 million weighted average common shares outstanding. Cash and short-term investments at March 31 were $51.8 million and ANSYS remains debt free. Jim Cashman, ANSYS President and CEO, stated, "Despite continued macroeconomic challenges and a tenuous global environment, ANSYS started 2003 with a number of positive highlights that we believe add strength and breadth to the foundation of our long-term business. These include a continuation of our record of solid margins, positive cash flow from operations and positive earnings for shareholders. Also, during the quarter, we finalized a significant acquisition with the addition of CFX. We are confident of the benefits that CFX adds to our engineering and physics solutions and are excited about this unique opportunity to gain access to new customers and enter new markets." Cashman further commented, "We remain optimistic about our business prospects over the long term; however, in the near term we will continue to operate our business conservatively as current customer buying patterns remain less predictable and are very susceptible to global economic uncertainties. We believe that our market opportunity is substantial and that ANSYS is well positioned to address it with a combination of our commitment to maintain a strong technological leadership, a consistent software platform with a suite of products that meet customers' needs at each level of the computer-aided engineering development process and a solid financial model that allows us to continue to invest in growing our business."