on Record Revenue, Operating income and net income
Suresnes, France, February 11, 1997--Dassault Systèmes S.A. (Nasdaq: DASTY), a leading developer of mechanical CAD/CAM/CAE software products under the family name CATIA-CADAM Solutions, today reported results for both the fourth quarter and year ended December 31, 1996.
Dassault Systèmes reported record total revenue of FF 1.4 billion, an increase of 23%, compared to 1995 total revenue of FF 1.1 billion. Software revenue increased 22%, and service and other revenue increased 25%. Operating income for 1996 increased 34% to FF 460.9 million from FF 344.0 million in 1995. Net income rose 55% to FF 342.5 million, compared to FF 221.3 million in 1995. On a pro forma basis, 1996 net income per share increased 66% to FF 6.53 compared to FF 3.94 in 1995. Pro forma net income per share reflects an exceptional dividend of FF 488.2 million and a 5-for-1 stock split effected prior to Dassault Systèmes’ initial public offering.
Financial and other revenue in 1996 totaled FF 102.9 million, compared to FF 34.1 million in 1995. For 1996, financial and other revenue included FF 61.6 million of net interest income, a net foreign exchange gain of FF 38.5 million and other revenue of FF 2.8 million, compared to FF 56.1 million of net interest income and a net foreign exchange loss of FF 21.6 million in 1995.
New workstation seats increased 30% to 18,098 in 1996, compared to 13,902 in 1995. Leased seats represented 23% of new workstation seats licensed in 1996, compared to 21% in 1995. Workstation seat revenue increased 38% in 1996. The Company noted that recurring software revenue represented 46% of the FF 1.2 billion in software revenue reported by Dassault Systèmes in 1996. New workstation seats increased 20% to 5,835 in the fourth quarter of 1996, compared to 4,850 in the year-ago period. Workstation seat license revenue increased 27% in the fourth quarter of 1996. As of December 31, 1996, the Company had 96,630 total seats worldwide.
Mr. Charles Edelstenne, Chairman and Chief Executive Officer of Dassault Systèmes S.A., commented: "1996 was an excellent year for Dassault Systèmes. From a financial perspective, we reported record revenue, operating margins, and net income. Further, we continued to enjoy a high level of recurring software revenue as a result of the manner in which we structure our product licenses. From a market perspective, we are meeting with good success in increasing Dassault Systèmes’ penetration, particularly in the Asia Pacific market. Our progress is evident in the very strong increase in new workstation licenses in this market in 1996, with Asia Pacific posting an increase of 62%. Based upon our method of revenue recognition in this region, we also expect this progress to be reflected in a higher level of software revenue in Asia Pacific in the first quarter of 1997. 1996 was also a good year for the Company in the U.S. with software revenue experiencing the highest growth among the regions we serve. We believe this growth reflects the efforts we have made to refine as well as increase our U.S. sales and marketing focus."
For the fourth quarter ended December 31, 1996, total revenue increased 17% to FF 435.6 million, operating income increased 21% to FF 191.3 million, and net income increased 28% to FF 132.9 million. Software revenue increased 13% to FF 355.9 million. The Company noted that in comparing the level of growth in software revenue in the quarter to the year-ago period it is important to note that the 1995 fourth quarter reflected very strong seasonal patterns, whereas results over the course of 1996 are reflecting less seasonality than the Company has experienced historically. Service and other revenue was up sharply, increasing 42%. This increase reflects higher levels of customer service related to the implementation of large digital mock-up contracts. Pro forma net income per share was FF 2.58 in the 1996 fourth quarter, a 34% increase over pro forma net income per share of FF 1.93 earned in the fourth quarter of 1995.
Thibault de Tersant, Executive Vice President, commented: "As we analyze the fourth quarter, we are very excited by the results and the outlook for 1997. The level of new workstation license order activity was higher in the quarter than is reflected in both the number of new workstation licenses and software revenue reported in the period. We enter the first quarter of 1997 with a very strong order backlog."
Financial and other revenue for the fourth quarter of 1996 was FF 20.8 million, reflecting FF 15.8 million of net interest income, a net foreign exchange gain of FF 2.1 million and FF 2.9 million of other revenue. In the corresponding year-ago period, financial and other revenue totaled FF 10.5 million, of which FF 12.5 million represented net interest income and FF 1.9 million represented a net foreign exchange loss.
Bernard Charles, President of Dassault Systèmes S.A., commented: "Our investment in research and development, which grew by 14% in 1996, has been focused on making available 22 new products, improving two-thirds of our product portfolio and enhancing our support, from design to manufacturing, of specific industrial processes such as plastic parts, dies and powertrain ".
"As a result of our research and development advances, which were successful thanks to our approach of working in partnership with customers, I am pleased to announce several significant wins in the powertrain area. These wins strengthen our competitive position in the automotive industry. Specifically, we announced a new contract with Renault. Renault is a significant win for us. Secondly, we recently signed an agreement with Cosworth following a two-month evaluation period of the CATIA solid modeling functions. And, finally, I would like to mention the renewal and significant increase in the scope of our licensing agreement with Peugeot, covering powertrain, chassis and digital mock-up. This partnership underlines CATIA’s capacity to support full integration of industrial processes. We have also further improved our user interface and solid modeling performances which, coupled with the enhancement of our business partner channel, allowed us to improve significantly our presence in mid-sized and small accounts."