Pro Forma Earnings Per Share FF 1.42
Suresnes, France, October 24, 1996--Dassault Systèmes S.A. (Nasdaq: DASTY), a leading developer of computer aided design (CAD), computer aided manufacturing (CAM), and computer aided engineering (CAE) software products under the family name CATIA-CADAM Solutions, announced a 35.3% increase in third quarter net income.
Total revenues for the third quarter ended September 30, 1996 were FF 337.3 million, up 28.7% from third quarter 1995 total revenues of FF 262.1 million. Software revenues were FF 296.9 million for the quarter, a 32.0% increase over the third quarter of 1995. Sales from services and other revenue were FF 40.4 million, up 8.9% from the comparable year-ago period.
For the third quarter of 1996, operating income totaled FF 103.9 million, an increase of 39.5% over third quarter 1995 operating income of FF 74.5 million. Financial and other revenue for the third quarter of 1996 was FF 20.3 million, reflecting FF 16.3 million of interest earned on cash and short-term investments, and a net foreign exchange gain of FF 4.0 million.
Net income for the third quarter of 1996 rose 35.3% to FF 72.9 million, up from FF 53.9 million for the third quarter of 1995. Pro forma earnings per share were FF 1.42 in the 1996 third quarter, a 47.9% increase over pro forma earnings per share of FF 0.96 earned in the comparable period last year. Pro forma earnings reflect both an exceptional dividend of FF 488.2 million and a 5:1 stock split effected prior to Dassault Systèmes’ initial public offering.
Mr. Charles Edelstenne, Chairman and Chief Executive Officer of Dassault Systèmes S.A., commented, "We believe that we are continuing to grow faster than the overall CAD/CAM market, reflecting market share gains, particularly in the automotive sector. Our strategy to penetrate small accounts with less than 10 seats has proven successful, with such sales representing 50% of third quarter units. We experienced strong revenue growth across all geographic regions and are pleased to see our increasing investment in marketing and sales produce positive results in the United States, where sales increased 25% over the 1995 third quarter. Overall, Dassault Systèmes had a very strong quarter, particularly in light of our normal seasonal patterns."
Bernard Charlès, President of Dassault Systèmes S.A., added, "We have made significant improvements in our product development area, including our expansion of CATIA-CADAM Solutions with Release 1.7. This new release outperforms existing products in the marketplace with the most complete process-oriented system of its kind, encompassing a total of 99 products and is available on Sun Microsystems platform. This version permits increased performance, productivity and quality. It redefines standards for collaborative engineering through network computing while introducing the possibility of significant evolution in this domain. Further, Release 1.7 offers improved user interface, demonstrates compatibility of new architecture, specifically our object-oriented technology with existing technology, and is designed as an open, scaleable system with built-in industry standards (STEP) ".
"We recently announced that Dassault Systèmes will provide Daewoo with 2,000 seats of CATIA-CADAM Version 4 for its global research, development and integrated manufacturing operations over the next three years. Daewoo’s selection confirms the attractiveness of our CATIA-CADAM Solutions for the automotive industry, where we provide solutions covering a wide range of processes from powertrain to body shell."
For the nine months ended September 30, 1996, revenues increased 25.6% to FF 959.1 million, compared to FF 763.8 million for the same period a year earlier. Net income increased over 78.6% to FF 209.7 million in the 1996 period from FF 117.4 million and pro forma earnings per share increased 95.5% to FF 3.95 from FF 2.02 in the 1995 period.
Initial fee revenue grew 61% to FF 174.0 million, compared to FF 108.4 million in the 1995 period. Approximately 30% of new installed seats were leased during the quarter, up from 21% in the 1995 third quarter. 1996 year-to-date leased seats represented 28% of the 12,263 new seats, compared to 22% of the 9,052 1995 year-to-date new installed seats. New workstation seats sold in the quarter totaled 4,975, compared to 3,309 in the year-ago quarter. At the end of the third quarter, the Company had 94,830 total seats worldwide.
Dassault Systèmes historically has experienced a seasonal decline in revenue in the second and third quarters of each fiscal year, due primarily to capital budgeting cycles of customers and to European holiday patterns. As a result, the Company’s second and third quarter unit sales, software revenue, total revenue, operating income and net income have generally been lower than in the first and fourth quarters. The Company noted, however, that it experienced an unusually high level of sales in August of 1996, based upon historical comparisons.
The Company continued its strong investment in research and development in the third quarter. Research and development expenses in the recent quarter totaled FF 131.7 million, representing an increase of approximately 19.4%, compared to FF 110.3 in the 1995 third quarter. Research and development expenses were 39.1% of total revenues in the current quarter, compared to 42.1% in the 1995 third quarter.