Dassault Systèmes S.A. (Nasdaq: DASTY), 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 second quarter and six months ended June 30, 1997. In the 1997 second quarter, net income per share increased 60% to FF 1.50, compared to FF 0.94 pro forma net income per share in the second quarter of 1996. For the 1997 six-month period net income per share totaled FF 3.76 per share, representing an increase of 48% over pro forma net income per share of FF 2.53 in the corresponding 1996 period.
Total revenue for the second quarter ended June 30, 1997 was FF 379.1 million, an increase of 30% compared to second quarter 1996 total revenue of FF 291.2 million. Software revenue increased 30% to FF 312.5 million in the second quarter. Recurring software revenue represented 49% of total software revenue in the current quarter. Service and other revenue totaled FF 66.6 million, representing a 31% increase over the year-ago quarter.
New workstation seats shipped increased 46% during the 1997 second quarter. Of the total 4,210 seats shipped, approximately 23% were leased. At June 30, 1997, Dassault Systèmes had 100,000 seats installed on a worldwide basis. Driven by particularly strong sales in the United States, workstation license revenue rose 45% during the second quarter of 1997, compared to the corresponding period in 1996.
Charles Edelstenne, Dassault Systèmes Chairman and Chief Executive Officer, commented, "Dassault Systèmes produced very strong results, both for this quarter and for the first half of 1997, led by all-around excellent performance. The higher level of license activity and software revenue reflects the favorable response by customers to our products, as well as the additional investments made in enhancing our marketing and distribution network."
Bernard Charlès, President of Dassault Systèmes added, "We introduced CATIA-CADAM Solutions Version 4 Release 1.8 on time. With a product portfolio of 107 products, including eight new products, we continue to move forward our process-centric strategy. This release, which has received a good response from our customers, offers them unmatched competitive capabilities in Solid Design, Shape Design & Styling, and optimization. In addition, with the highest level of performance, reliability and compatibility of any release to date, Version 4 Release 1.8 demonstrates service–readiness for operations."
"We made several key process improvements with the introduction of Release 1.8 that we believe will be very important to designers in the automotive, consumer, and fabrication and assembly industries. We introduced a new CATIA-ALIAS Interoperability product. It delivers efficient and high quality interchange of data between CATIA and Alias, resulting in styling process productivity enhancements while facilitating easier collaborative design between the stylist and the engineer. The new function within our solid modeling product dramatically accelerates the development of detail design as it permits concurrent solid modeling on the same component. We have also introduced Generative Shape Modeling, a new product for use in the automotive and consumer goods surface design area. This product is based upon our next generation modeling technology, called Generative Modeling, which helps to capture and reuse design specifications."
Financial and other revenue totaled FF 14.6 million in the 1997 second quarter, compared to FF 33.3 million in the second quarter of 1996. The decrease of FF 18.7 million in the current quarter is primarily attributable to a lower net foreign exchange gain.
Thibault de Tersant, Executive Vice President of Dassault Systèmes commented, "The acquisition of SolidWorks is proceeding on schedule and we expect to complete the transaction shortly. SolidWorks’ business is progressing very nicely." In connection with the closing of the acquisition, the Company will incur a one-time pre-tax charge that it currently expects to range from approximately FF 30 million to FF 36 million in the third quarter of 1997.
The Company’s statement concerning the amount of the one-time pre-tax charge is a forward-looking statement that involves a number of risks and uncertainties. The actual pre-tax charge incurred by the Company could differ from this estimate.
The effective tax rate in the 1997 second quarter was 41.2%, compared to 38.2% in the first quarter of 1997. The increase in the effective tax rate primarily reflects the inability of the Company to utilize certain U.S. tax credits. Mr. De Tersant stated, "The current French statutory tax rate of 36.7% is under review and may be increased to approximately 41.6%. We estimate that if such a change were instituted, the Company’s effective tax rate would be approximately 43%."
The Company’s estimation that the French statutory tax rate may be increased to 41.6% is based on currently available information. There can be no assurance, however, that the French statutory tax rate, if modified, and the Company’s effective tax rate will not be increased to a rate of greater than 41.6% and 43%, respectively.
Dassault Systèmes also announced that a cash dividend distribution of FF 1.70 per share was approved at its Annual Meeting of Shareholders in June 1997. The payment date for the dividend was July 18, 1997.