Reports EPS Of € 0.27 In Quarter
Both Revenue And Earnings In Line With Expectations
Revenue Growth For The Full Year 2001 Estimated At 20%
PARIS, FRANCE, July 24, 2001 -- Dassault Systemes (DS) (Nasdaq: DASTY; Euronext Paris: #13065, DSY PA), a worldwide leading software developer of product lifecycle management (PLM) solutions, today reported financial results for the second quarter and six months ended June 30, 2001.
Acquisition costs include goodwill and technology amortization and other related costs. All financial figures in this press release are before these acquisition costs unless otherwise noted.
Total revenue increased 21% to € 176.9 million in the second quarter of 2001, up from € 145.8 million in the 2000 second quarter. Net income totaled € 31.0 million, compared to € 29.7 million in the 2000 second quarter. Earnings per share were € 0.27, increasing 8% over the second quarter of 2000 where EPS was € 0.25.
Software license revenue, accounting for 86% of total revenue in the quarter, rose 20% to € 151.3 million, up from € 126.0 million in the second quarter of 2000. The Company continued to have a high level of recurring revenue, which represented 47% of 2001 second quarter software revenue. Service revenue increased 29% to € 25.6 million in the 2001 second quarter, compared to € 19.8 million in the year-ago quarter. 8,013 CATIA and 6,493 SolidWorks® seats were licensed in the second quarter of 2001.
For the six months ended June 30, 2001, total revenue rose 22% to € 342.0 million, compared to € 280.5 million in the 2000 first half. Net income for the first half of 2001 was € 60.9 million, compared to the year-ago period where net income totaled € 59.2 million. Earnings per share increased 4% to € 0.52, compared to € 0.50 in the first half of 2000.
Charles Edelstenne, Chairman of DS, commented, “DS had a very solid second quarter and first half performance, particularly in light of the softer economic conditions in various regions of the world. Overall, the first half of the year was a period of good progress for DS, with significant new product releases across our brands, a broadening of our customer base and a deepening of relationships with customers and partners. Certainly DS’ performance stands out, not just in our industry, but in the overall technology sector.”
Bernard Charles, President, commented, “Our financial results in the second quarter came in on target. Our strong revenue growth reflected solid contributions from all of our brands in their respective markets. Clearly, our diversification strategy by market segments and product lines is working effectively. In addition, we were pleased to see strength coming from all regions of the world. Even during a period of economic softness, manufacturers continue to place a high priority on product innovation and product value in order to enhance their competitive positioning. DS’ PLM software applications are at the heart of this effort as they help companies work in a collaborative environment to develop better products, shorten time to market and reduce manufacturing costs.
"Excluding PDM revenue, process-centric revenue, with our world- leading brand CATIA, increased 14% and our V5 adoption rate continued to build, representing 36% of total seats licensed in the quarter. Moreover, our V5 product offering has been significantly enhanced with our newest release issued in the second quarter. CATIA V5R7 provides the most comprehensive solution for collaborative design. Further validation and evidence of V5 traction is reflected in the number of software partners that have adopted V5 architecture in the PLM marketplace, including recently announced agreements with Cenit, EADS Matra Datavision, Innoveda, Metalsoft, NK-EXA and Zuken. Turning to the design-centric market, SolidWorks delivered its best quarter ever with record sales and new licenses, producing a 40% increase in revenues. It continues to solidify its number one position in the design-centric market. And our PDM business, including ENOVIA and Smart Solutions, had another strong quarter, with revenues growing 62%. ENOVIA recently celebrated its third anniversary and over this timeframe it has built the strongest product offering in its marketplace for product development and lifecycle management. Additionally, Smart Solutions had its highest quarterly revenue.”
Thibault de Tersant, Executive Vice President, stated, “We believe the Company is well-positioned for good results in the second half of this year. For the full year, we are fine-tuning our revenue and EPS objectives. This revision simply reflects a more conservative posture on our part in light of overall global economic conditions and the impact of currency fluctuations on our expenses and does not reflect any particular trends we are observing in our business. Our new revenue range before new acquisitions is € 745 million to € 750 million, compared to our earlier objective of € 750 million. In addition, recently closed SRAC and ACT acquisitions will add approximately € 12 million in 2001, bringing total revenue to an estimate of between € 757 million to € 762 million, which represents a growth of 20% compared to 2000. With respect to earnings per share, our objective for the full year is € 1.25 to € 1.28, reflecting the modest fine-tuning of revenue expectations as well as higher expenses resulting solely from the impact of currency fluctuations on our costs. Our previous objective was € 1.33 per share. Based upon our financial model, with a high level of recurring revenue and good visibility, we are very comfortable with our outlook for 2001.”
NEW PRODUCT LAUNCHES
DS launched Version 5 Release 7 of CATIA, which incorporates major improvements to its existing products and introduces 19 new products, bringing the total number of CATIA V5 products to 97. CATIA V5R7 is the most comprehensive solution for collaborative design across the entire supply chain, supporting large-scale deployments across all industries. Moreover, V5R7 is the industry's first delivery of a fully integrated electromechanical suite of design tools.
DS introduced ENOVIA Portal Solutions and Lifecycle Solutions Version 5 Release 7 and ENOVIAVPM Version 1 Release 5, extending ENOVIA's leadership position in delivering innovation-focused enterprise solutions for collaborative product development management. ENOVIA Portal extends the reach of ENOVIAVPM to enterprise users with web-centric business reporting capabilities and to CATIA V5 Windows NT users, providing access to its powerful configured DMU and data management functions. ENOVIA LifeCycle Applications (LCA) extend their product lifecycle coverage by managing requirements via the PPR hub.
ENOVIA Solutions now provide the most comprehensive collaborative PLM capabilities in the industry, enabling companies to implement and deploy best practices for innovation in an open, knowledge-based environment, linking companies, their customers and their suppliers.
DELMIA launched its open architecture solution, DELMIA Programmable Logic Controller (PLC) Verification Solution, for validating and optimizing PLC programs using 3D simulation. This enables the Controls Engineer to take advantage of the mechanical workcell simulation to validate and debug their controls programs prior to the physical workcell build completion, significantly reducing the ramp-up time of automated equipment, decreasing time to market.
SolidWorks introduced SolidWorks Utilities, a suite of 3D CAD software tools that reduces engineering design time, allowing engineers to easily, quickly and affordably compare and analyze features and geometry within 3D CAD models. These capabilities enable users to work efficiently in any collaborative product development environment that requires multiple design changes and revisions so they can get their products to market faster.
SolidWorks, Linius Technologies, NIKA, and Zeal Solutions introduced ElectronixWorks, an easy-to-use design and analysis software that is fully integrated with SolidWorks® 3D design software. ElectronixWorks addresses the growing industry demand for rapidly developed, newer and smaller products, by letting electronics manufacturers create realistic 3D CAD faster, more efficiently, and more affordably than with other CAD technologies.
More Formula One (F1) teams use CATIA and ENOVIA PLM Solutions more than any other PLM solution. 9 out of 11 competing F1 teams designed either the car's chassis and/or engine in CATIA. Toyota Motorsport, the final F1 entrant in the 2002 racing season, is developing and building its complete car, from the ground up, with CATIA and ENOVIA Solutions. Together, CATIA and ENOVIA enable engineers to make the part right the first time. Such time saving processes allow continuous performance improvement throughout the racing season.
Using advanced software from DS, Cardianove Inc. removed two years from development time in designing the world's smallest life-saving heart pump for the $2.5 billion heart transplant market. CATIA's commands were essential in the production of the design, which required a very high degree of precision to enable the lab to machine the small parts out of titanium.
By using CATIA solutions, Solo Golf, a leading maker of golf clubs, reduced new product development time by 75 percent while cutting design costs by as much as 60 percent -- producing a superior club that greatly enhances a player's accuracy and performance.
The Floyd Rose Guitar Company released a revolutionary new electric guitar designed with CATIA solutions. Working in CATIA V5R5, Rose created a digital representation of each of the guitar's hundreds of parts to precise specifications, reducing development costs and time, bringing the guitar to market several months ahead of schedule.
Stellex Monitor Aerospace, manufacturers of complex aerospace parts, structural components and assemblies, selected CATIA and SmarTeam solutions to build a PLM infrastructure to seamlessly work with their customers at a more collaborative level. Stellex anticipates being able to manufacture its products faster and more accurately, increasing the opportunity for new business.
Alenia Spazio selected ENOVIA Solutions to manage its configured digital mock-up process for the design and manufacturing of subsystems for the International Space Station. The engineering activities are performed using CATIA solutions and the contract includes ENOVIAVPM licenses supported by consulting and engineering services. Alenia Spazio's engineers will use ENOVIAVPM to manage the Crew Rescue Vehicle's virtual product development, including the CATIA models and configured DMUs.
DELMIA software enabled TWR to create a road car, the RENAULTsport V6 24 valve Clio, from a concept car in just 18 months. Such a rapid transformation would be highly unlikely without DELMIA's specialist CAD, CAM, VR and ERP tools.
McKee Foods Uses SolidWorks 3D CAD software for Its Little Debbie Snack Cakes. The snack cake manufacturer purchased 20 seats of SolidWorks to switch from 2D to 3D CAD so it could reduce design time and production errors for the machines, conveyor belts, and other automated elements in its production lines.
Spatial Corp. announced the publication of their Annual OEM Partner Fees and Variable Partner Fees on-line at www.spatial.com. The decision to publish the pricing, combined with the Partner-for-Success strategy, furthers Spatial’s goal of expanding the 3D market by allowing partners to better define, during the early stages of development, one of the largest financial variables in software–development costs. The move is an excellent demonstration of Spatial’s commitment to creating impartial and collaborative relationships with their partners that positively impact the entire development process–from the first inquiry through product shipment .
DS’ acquisition of SRAC closed in the form of a stock transaction for the amount of $22 million. SRAC became a wholly owned subsidiary of DS, operating under the SRAC name. The acquisition positions DS as the pre-eminent supplier of CAE and CAD integrated design analysis software in both the process and design-centric markets.
DS signed a definitive agreement to acquire Alliance Commerciale Technologique’s PLM consulting and services business and related assets. The acquisition is another step forward in consolidating a global PLM services force within the DS Group. The transaction also reinforces DS’ presence in the Americas and complements its existing services groups within ENOVIA, DS of America and DELMIA.
IBM is selling the SmarTeam product suite as part of its worldwide PLM portfolio. The agreement further enhances IBM and DS' presence among manufacturers and their supply chains, specifically in the fabrication & assembly, electrical & electronics, plant design and management and consumer goods industries, as well as departmental and supply chain installations in automotive, aerospace and shipbuilding industries. The agreement adds a world-class distribution and support channel to SmarTeam, enabling enhanced deployment capability and customer support worldwide.
DS and Mechanical Dynamics, Inc. signed of a Component Application Architecture (CAA) V5 development partnership. Customers will benefit from the integration of their business processes in a single environment, from concept design up to performance testing and evaluation. DS and Mechanical Dynamics now enable CATIA V5 users to take full control of the virtual prototype simulation process.
SolidWorks won UPSIDE Magazine's 2001 Hot 100 Award out of 800 contestants. SolidWorks was awarded for its innovation, leadership and performance.
Statements above that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding the Company’s objective for 2001 revenue and EPS, are forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended). Such forward-looking statements are based on 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, among other factors: (i) currency fluctuations (ii) global economic conditions, (iii) market demand for our products and services, (iv) new product developments and technological changes, and (v), our ability to recruit and retain skilled personnel. Unfavorable changes in any of the above or other factors described in the Company’s SEC reports, including the Form 20F for the year ended December 31, 2000, which was filed with the SEC on April 27, 2001, could materially affect the Company's financial position or results of operations.