DASSAULT SYSTÈMES S.A. REPORTS 44% INCREASE IN TOTAL REVENUE FOR THE THIRD QUARTER
Net income per share increases 41% to FF 0.99 on no change in statutory tax rate and includes one-time, after-tax acquisition charge of FF 0.22 per share
All per share figures reflect 2-for-1 stock split effected October 14, 1997
Suresnes, France, October 21, 1997--Dassault Systèmes S.A. (Nasdaq: DASTY; Bourse de Paris), a leading developer of mechanical CAD/CAM/CAE/PDM-II software products under the family name CATIA-CADAM and VPM solutions, today announced financial results for the third quarter and nine months ended September 30, 1997.
As previously announced, Dassault Systèmes completed the acquisition of SolidWorks Corporation on July 25, 1997. The acquisition was accounted for as a pooling-of-interests under U.S. GAAP. Accordingly, third quarter and year-to-date 1997 financial results have been restated to include SolidWorks Corporation’s results from July 1 and January 1, respectively. 1996 financial results have not been restated. In connection with the closing, the Company incurred a one-time charge of FF 34 million, or FF 24 million after tax, which was included in general and administration expenses.
Total revenue for the third quarter ended September 30, 1997 was FF 485.2 million, an increase of 44% compared to third quarter 1996 total revenue of FF 337.3 million. Total software revenue increased 45% to FF 429.1 million in the 1997 third quarter. Recurring software revenue represented 42% of total software revenue in the current quarter. New CATIA-CADAM workstation seats shipped in the quarter totaled 5,502, and new SolidWorks seats shipped totaled 2,486. Service and other revenue totaled FF 56.1 million, representing a 39% increase over the year-ago quarter.
Charles Edelstenne, Dassault Systèmes’ Chairman and Chief Executive Officer, commented, "The third quarter was one of considerable achievements for Dassault Systèmes. With the completion of the SolidWorks acquisition, we are now very well positioned to provide mechanical design automation solutions to both the digital mock-up, process-centric market and the mainstream design-centric market. From a financial perspective, our performance was very strong in the third quarter driven by increasing penetration of the U.S. and Asia. And finally, we have further diversified our shareholder base with the recently completed secondary common stock offering."
Bernard Charles, President of Dassault Systèmes, stated, "We were very excited to have introduced our CATweb Navigator earlier this month. CATweb Navigator is a new step forward to provide a graphic window on digital product mock-up and related information. Anyone, anywhere in our customers’ virtual enterprises can take advantage of the network computing and Internet revolution. The CATweb product line, based on JAVA technology, offers a cost-effective solution to connect everyone to the product information pipeline. CATweb Navigator is the first product in our new CATIA Network Computing Solution product line dedicated to the Web environment."
"We are on schedule to introduce CATIA Version 4 Release 1.9 in November 1997. Building upon the generative design approach we initiated in Release 1.8, Release 1.9 will enhance the complete product set to expand competitiveness on design, styling, optimization, PDM integration, and manufacturing domains."
"SolidWorks had a very good quarter. SolidWorks 97Plus, introduced in July, continues the competitive edge SolidWorks has developed in providing the mainstream market with the best tools at the right price. From a revenue standpoint, its results exceeded our expectations. Unit growth was very solid. Moreover, SolidWorks met with good success in penetrating both small and mid-sized accounts."
Net income per share increased 41% to FF 0.99 in the 1997 third quarter and included a one-time, after-tax charge of FF 0.22 per share in connection with the completion of the acquisition of SolidWorks Corporation. In the 1996 third quarter net income per share was FF 0.70.
Thibault de Tersant, Executive Vice President of Dassault Systèmes, commented, "The current French statutory tax rate of 36.7% is still under review and is likely to be increased to approximately 41.7%. While no vote has been taken at this time, the decision would be retroactive to 1997." The Company estimates that if such a change had been instituted in the 1997 third quarter, retroactive to the 1997 first quarter, an additional income tax expense would have been recorded, leading to an effective tax rate of approximately 43%, compared to 38.9% in the 1997 nine-month period. Thus, net income per share would have been FF 0.81, or FF 1.03 before the one-time after-tax acquisition charge for SolidWorks.
Financial and other revenue totaled FF 6.3 million in the 1997 third quarter, compared to FF 20.3 million in the third quarter of 1996. In the 1997 third quarter, the Company had net foreign exchange losses of FF 5.6 million, compared to net foreign gains of FF 3.6 million in the year-ago period.
For the 1997 nine-month period, total revenue increased 41% to FF 1,348.2 million and net income increased 44% to FF 301.6 million, compared to total revenue of FF 959.1 million and net income of FF 209.7 million in the 1996 period. Software revenue increased 42% in the 1997 nine-month period, with CATIA-CADAM workstation unit sales increasing 24%. On a per share basis, net income increased 40% to FF 2.82 up from FF 2.01 in the year-ago period. 1997 year-to-date net income and net income per share include the one-time after-tax acquisition-related charge of FF 22.4 million or FF 0.22 per share.
The Company’s statement concerning the current French statutory tax rate is a forward-looking statement that involves a number of risks and uncertainties. The French statutory tax rate could differ from this estimate.