ANSYS Inc. (ANSS, Financial) filed Quarterly Report for the period ended 2010-06-30.
Ansys Inc. has a market cap of $4.22 billion; its shares were traded at around $46.58 with a P/E ratio of 25.5 and P/S ratio of 8.1. Ansys Inc. had an annual average earning growth of 24.6% over the past 10 years. GuruFocus rated Ansys Inc. the business predictability rank of 5-star.ANSS is in the portfolios of Ron Baron of Baron Funds, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors, Pioneer Investments.
The Companys financial position includes $416.6 million in cash and short-term investments, and working capital of $305.5 million as of June 30, 2010. In connection with the acquisition of Ansoft Corporation (Ansoft) on July 31, 2008, the Company borrowed $355.0 million. As of June 30, 2010, remaining outstanding borrowings totaled $170.1 million.
Acquired deferred revenue of $7.5 million was recorded on the Ansoft opening balance sheet. This amount was approximately $23.5 million lower than the historical carrying value. The impact on reported revenue for the quarter ended June 30, 2009 was $400,000 for lease license revenue and $1.8 million for maintenance revenue; there was no meaningful impact for the three months ended June 30, 2010.
Interest Income: Interest income for the quarter ended June 30, 2010 was $422,000 as compared to $360,000 during the quarter ended June 30, 2009. Interest income increased as a result of an increase in invested cash balances, partially offset by a decline in interest rates in the 2010 period as compared to the 2009 period.
Income Tax Provision: The Company recorded income tax expense of $16.2 million and had income before income taxes of $51.7 million for the quarter ended June 30, 2010. This represents an effective tax rate of 31.3% in the second quarter of 2010. During the quarter ended June 30, 2009, the Company recorded income tax expense of $10.1 million and had income before income taxes of $37.3 million. The Companys effective tax rate was 27.2% in the second quarter of 2009. The Companys income tax expense and related effective tax rates reflect tax benefits of $1.2 million and $2.0 million during the quarters ended June 30, 2010 and 2009, respectively, related to favorable settlements of various outstanding tax audits and other information that became available during the period regarding the Companys unrecognized tax benefits. The Companys 2010 effective tax rate does not reflect the benefit associated with the U.S. research and experimentation credit as this benefit was phased out for periods after December 31, 2009 and has not yet been reinstated. In addition, significant changes have been proposed to the U.S. international tax laws that could limit the U.S. deductions for expenses related to un-repatriated foreign-source income and modify the U.S. foreign tax credit. The Company cannot determine whether these proposals will be enacted into law or what, if any, changes may be made to such proposals prior to their being enacted into law. If the U.S. tax laws change in a manner that increases the Companys tax obligation, it could result in an adverse impact on the Companys net income and cash flows.
Net Income: The Companys net income in the second quarter of 2010 was $35.5 million as compared to net income of $27.1 million in the second quarter of 2009. Diluted earnings per share was $0.38 in the second quarter of 2010 and $0.30 in the second quarter of 2009. The weighted average shares used in computing diluted earnings per share were 93.1 million in the second quarter of 2010 and 91.0 million in the second quarter of 2009.
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Ansys Inc. has a market cap of $4.22 billion; its shares were traded at around $46.58 with a P/E ratio of 25.5 and P/S ratio of 8.1. Ansys Inc. had an annual average earning growth of 24.6% over the past 10 years. GuruFocus rated Ansys Inc. the business predictability rank of 5-star.ANSS is in the portfolios of Ron Baron of Baron Funds, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors, Pioneer Investments.
Highlight of Business Operations:
ANSYS, Inc.s results for the three months ended June 30, 2010 reflect a revenue increase of 12.9% as compared to the three months ended June 30, 2009, and basic and diluted earnings per share growth of 25.8% and 26.7%, respectively. The Companys results for the six months ended June 30, 2010 reflect a revenue increase of 14.9% as compared to the six months ended June 30, 2009, and basic and diluted earnings per share growth of 36.4% and 37.7%, respectively. The Company experienced higher revenues in 2010 from growth in both license and maintenance revenue. In addition, the operating results were favorably impacted by reduced interest expense, the absence in 2010 of $1.3 million in severance costs related to second quarter 2009 global workforce reductions and the absence in 2010 of $2.2 million and $7.3 million adverse impacts on revenue in the three and six months ended June 30, 2009, respectively, related to purchase accounting adjustments to deferred revenue. These favorable items were partially offset by increased operating expenses, including higher incentive compensation, stock-based compensation and third party technical support fees.The Companys financial position includes $416.6 million in cash and short-term investments, and working capital of $305.5 million as of June 30, 2010. In connection with the acquisition of Ansoft Corporation (Ansoft) on July 31, 2008, the Company borrowed $355.0 million. As of June 30, 2010, remaining outstanding borrowings totaled $170.1 million.
Acquired deferred revenue of $7.5 million was recorded on the Ansoft opening balance sheet. This amount was approximately $23.5 million lower than the historical carrying value. The impact on reported revenue for the quarter ended June 30, 2009 was $400,000 for lease license revenue and $1.8 million for maintenance revenue; there was no meaningful impact for the three months ended June 30, 2010.
Interest Income: Interest income for the quarter ended June 30, 2010 was $422,000 as compared to $360,000 during the quarter ended June 30, 2009. Interest income increased as a result of an increase in invested cash balances, partially offset by a decline in interest rates in the 2010 period as compared to the 2009 period.
Income Tax Provision: The Company recorded income tax expense of $16.2 million and had income before income taxes of $51.7 million for the quarter ended June 30, 2010. This represents an effective tax rate of 31.3% in the second quarter of 2010. During the quarter ended June 30, 2009, the Company recorded income tax expense of $10.1 million and had income before income taxes of $37.3 million. The Companys effective tax rate was 27.2% in the second quarter of 2009. The Companys income tax expense and related effective tax rates reflect tax benefits of $1.2 million and $2.0 million during the quarters ended June 30, 2010 and 2009, respectively, related to favorable settlements of various outstanding tax audits and other information that became available during the period regarding the Companys unrecognized tax benefits. The Companys 2010 effective tax rate does not reflect the benefit associated with the U.S. research and experimentation credit as this benefit was phased out for periods after December 31, 2009 and has not yet been reinstated. In addition, significant changes have been proposed to the U.S. international tax laws that could limit the U.S. deductions for expenses related to un-repatriated foreign-source income and modify the U.S. foreign tax credit. The Company cannot determine whether these proposals will be enacted into law or what, if any, changes may be made to such proposals prior to their being enacted into law. If the U.S. tax laws change in a manner that increases the Companys tax obligation, it could result in an adverse impact on the Companys net income and cash flows.
Net Income: The Companys net income in the second quarter of 2010 was $35.5 million as compared to net income of $27.1 million in the second quarter of 2009. Diluted earnings per share was $0.38 in the second quarter of 2010 and $0.30 in the second quarter of 2009. The weighted average shares used in computing diluted earnings per share were 93.1 million in the second quarter of 2010 and 91.0 million in the second quarter of 2009.
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