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Ansys Inc. has a market cap of $3.96 billion; its shares were traded at around $43.815 with a P/E ratio of 25.5 and P/S ratio of 7.6. 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, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations: The Company’s financial position includes $390.3 million in cash and short-term investments, and working capital of $287.7 million as of March 31, 2010. In connection with the acquisition of Ansoft Corporation (“Ansoft”) on July 31, 2008, the Company borrowed $355.0 million. As of March 31, 2010 and December 31, 2009, remaining outstanding borrowings totaled $205.1 million and $225.1 million, respectively.
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 March 31, 2009 was $500,000 for lease license revenue and $4.6 million for maintenance revenue; there was no meaningful impact for the three months ended March 31, 2010.
Interest Income: Interest income for the quarter ended March 31, 2010 was $368,000 as compared to $569,000 during the quarter ended March 31, 2009. Interest income decreased as a result of a decline in interest rates in the 2010 period as compared to the 2009 period, partially offset by additional interest income associated with an increase in invested cash balances.
Other Expense, net: The Company recorded other expense of $507,000 during the quarter ended March 31, 2010 as compared to other expense of $488,000 during the quarter ended March 31, 2009. The net change was primarily the result of foreign currency transaction gains and losses. As the Company’s presence in foreign locations continues to expand, the Company will have increased exposure to volatility of foreign exchange rates for the foreseeable future.
Income Tax Provision: The Company recorded income tax expense of $15.6 million and had income before income taxes of $47.9 million for the quarter ended March 31, 2010. This represents an effective tax rate of 32.5% in the first quarter of 2010. During the quarter ended March 31, 2009, the Company recorded income tax expense of $10.5 million and had income before income taxes of $31.6 million. The Company’s effective tax rate was 33.3% in the first quarter of 2009. The Company’s 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.
Net Income: The Company’s net income in the first quarter of 2010 was $32.4 million as compared to net income of $21.1 million in the first quarter of 2009. Diluted earnings per share was $0.35 in the first quarter of 2010 and $0.23 in the first quarter of 2009. The weighted average shares used in computing diluted earnings per share were 92.8 million in the first quarter of 2010 and 92.2 million in the first quarter of 2009.
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