Dassault Systèmes reports 37% increase in 1997 total revenue and 42% increase in net income per share excluding one-time after-tax acquisitions costs of FF 556 million
Dassault Systèmes S.A. (Nasdaq: DASTY; Bourse de Paris), a worldwide leading software developer of CAD/CAM/CAE/PDM (computer aided design/manufacturing/engineering/product data management) products, today announced financial results for the fourth quarter and year ended December 31, 1997.
For the 1997 fourth quarter, total revenue increased 36% to FF 614.8 million, compared to fourth quarter 1996 total revenue of FF 453.0 million. Total software revenue increased 41% to FF 524.3 million in the 1997 fourth quarter, up from FF 373.3 million in the year-ago period. Recurring software revenue represented 40% of total software revenue. New CATIA-CADAM workstation seats shipped in the quarter totaled 7,224, and new SolidWorks seats shipped totaled 2,725. Service and other revenue totaled FF 90.5 million, and represented 15% of total revenue.
As previously announced, Dassault Systèmes completed the acquisition of SolidWorks Corporation on July 25, 1997 and Deneb on December 30, 1997. The acquisition of SolidWorks Corporation was accounted for as a pooling-of-interests under U.S. GAAP. Accordingly, Dassault Systèmes’ fourth quarter and full year 1997 financial results include SolidWorks. In addition, all 1996 financial results have been restated to include SolidWorks.
The acquisition of Deneb was accounted for as a purchase under U.S. GAAP. In connection with the closings of these acquisitions, Dassault Systèmes incurred one-time costs in 1997 totaling FF 555.7 million after tax, or FF 5.13 per share, of which FF 533.9 million, or FF 4.92 per share (US$90.5 or US$0.83 per share) relates to the Deneb acquisition. All financial information discussed in the press release is excluding the one-time acquisition costs, except as noted.
For the year ended December 31, 1997, total revenue increased 37% to FF 1,962.9 million, compared to FF 1,431.6 million in 1996. Software revenue in 1997 increased 39% to FF 1,695.2 million, up from FF 1,220.6 million in the prior year. Operating income (before one-time costs) rose 78% to FF 765.9 million in 1997, compared to FF 429.4 million in 1996. Net income (before one-time costs) increased 48% in 1997 to FF 462.1 million, compared to FF 311.9 million in 1996. On a per share basis, net income (before one-time costs) rose 42% to FF 4.25 in 1997, compared to FF 2.99 in 1996. With the inclusion of FF 5.13 per share of after-tax acquisition costs, the Company reported a net loss of FF 0.87 per share for the year.
Charles Edelstenne, Dassault Systèmes’ Chairman and Chief Executive Officer, commented: "The fourth quarter was one of very solid performance for the Company and caps off a strong year. Growth in Europe and Asia was particularly strong in the fourth quarter, with revenue increasing 33%, and 65%, respectively. Further, our financial flexibility and resources are very high as reflected in the strength of our balance sheet."
Bernard Charlès, President of Dassault Systèmes, commented: "During the fourth quarter we achieved some key wins in the Fabrication and Assembly sector. New customers include Schuler, AD Tranz and Jacob Mueller Frick. We believe these successes reflect the investments we have made in new products for the Fabrication and Assembly market. SolidWorks had very good results in the quarter, with several significant wins. In addition, SolidWorks results clearly show that the company is building a base of repeat customers, thereby generating recurring revenues".
"Overall, Dassault Systèmes made significant progress in 1997 in expanding our market reach and in developing our vision of a digital enterprise. We are continuing to reinvest in research and development to enhance further our technological leadership in the coming years. The Company closed out the year with over 900 professionals in research and development. Further, we believe that our recent acquisition of Deneb, a leader in providing digital manufacturing solutions, will accelerate the execution of our vision of a digital enterprise."
In the 1997 fourth quarter net income per share (before one-time acquisition costs) totaled FF 1.23 and reflected a significantly higher effective tax rate. During the fourth quarter of 1997, the French statutory tax rate was increased to 41.7%, up from 36.7%. In addition, the tax rate change was retroactive to the first quarter of 1997. As a result, income tax expense in the 1997 fourth quarter totaled FF 136.6 million, or 48.1% of pre-tax income (before one-time costs), compared to 38.7% of pre-tax income in the 1996 fourth quarter. With the inclusion of FF 4.79 per share of after-tax acquisition costs, the Company reported a net loss of FF 3.56 per share in the 1997 fourth quarter.
Thibault de Tersant, Executive Vice President of Dassault Systèmes, commented: "License activity and revenue growth were very good in 1997. CATIA-CADAM licenses sold in 1997 totaled 22,485 and new SolidWorks licenses totaled 8,800. Operating income rose 78%, reflecting growth in revenues and margin expansion. SolidWorks contributed US$27 million (FF 158 million) in revenue in 1997, exceeding our US$25 million target."
Financial and other revenue totaled FF 10.3 million in the 1997 fourth quarter, compared to FF 20.1 million in the fourth quarter of 1996. In the 1997 fourth quarter, the Company had net foreign exchange losses of FF 2.6 million and interest income of FF 12.9 million, compared to a net foreign exchange gain of FF 2.1 million, FF 2.8 million of other revenue and interest income of FF 15.2 million in the year-ago period.