Autodesk Fiscal 2005 Revenues Increase 30 Percent
SAN RAFAEL, Calif., Feb 22, 2005 /PRNewswire-FirstCall via COMTEX/ -- Autodesk Inc. (Nasdaq: ADSK) today announced financial results for its fourth fiscal quarter ended January 31, 2005. For the fourth quarter, Autodesk reported net revenues of $356 million, a 21 percent increase over $295 million reported in the fourth quarter of the prior year.
Fourth quarter net income increased to $66 million on a GAAP basis, compared to $58 million in the prior year. GAAP EPS was $0.26 per diluted share compared to $0.24 in the prior year. Fourth quarter GAAP net income included a $12 million pre-tax restructuring charge. In the fourth quarter of the prior year, GAAP net income included a tax benefit of $7 million and a $3 million pre-tax restructuring charge. Excluding these items, pro-forma net income for the fourth quarter was $75 million, compared to $53 million in the prior year. Pro-forma EPS per diluted share was $0.30 in the fourth quarter, and $0.22 in the fourth quarter of the prior year.
"Autodesk executed flawlessly again this quarter," said Carol Bartz, Autodesk chairman and CEO. "We had an outstanding year, exceeding all of our financial projections. Our results demonstrate that our strategies are working, our product portfolio is strong, and our customers are satisfied."
Autodesk's performance was driven by strong growth in revenues from new seats and subscriptions, increasing penetration of its 3D products, and continued improvement in productivity and efficiency.
Fourth quarter revenues from new commercial seats increased 46 percent over the prior year, as customers continued to respond to the innovation, quality, easy implementation, ease of use and quick ROI of Autodesk products. Revenues from new commercial seats of AutoCAD(R) increased 56 percent over the prior year.
Full year combined revenues from subscriptions and upgrades increased 26 percent over fiscal 2004. Consistent with company strategy, subscription revenues, which are labeled as maintenance on the financial statements, grew faster than upgrades, increasing 54% over last year. Upgrade revenues increased 12 percent over fiscal 2004. Combined revenues from subscriptions and upgrades continue to represent approximately one-third of total annual revenues.
The company's 3D products continue to increase their market share. In the fourth quarter of fiscal 2005, revenues from Autodesk Inventor(R)Series, Autodesk Inventor Professional, Autodesk Revit(R), Autodesk AutoCAD Revit Series, Autodesk Map(R) 3D and Autodesk Civil 3D(TM), increased 49 percent over the prior year. For the fourth consecutive year, the Inventor product line was the world's best selling mechanical design software.
Autodesk continued to demonstrate progress in improving its profitability. Fourth quarter GAAP operating margins increased 2 percentage points over the prior year to 22 percent. Pro-forma operating margins increased 4 percentage points over the prior year to 25 percent.
"We are very optimistic about the coming year and therefore are raising our guidance," said Bartz. "In March, we will launch the strongest product portfolio in the company's history, including significant new releases of all of our major products. Our 3D products continue to increase penetration and market awareness of our lifecycle management solutions is growing. We remain firmly committed to continuous improvements in productivity. I have never been more enthusiastic about Autodesk's opportunities."
Full Year Fiscal Review
Fiscal 2005 revenues increased 30 percent over last year to $1.234 billion. Net income for fiscal 2005 increased to $222 million on a GAAP basis, compared to $120 million last year. GAAP EPS was $0.90 per diluted share compared to $0.52 for fiscal 2004. GAAP net income includes tax benefits totaling $24 million, as well as pre-tax restructuring charges of $27 million. Fiscal 2004 GAAP net income included tax benefits totaling $27 million and a $3 million pre-tax restructuring charge. Excluding these items, pro-forma net income for fiscal 2005 was $218 million and $96 million in the prior year. Pro-forma EPS per diluted share was $0.88 in fiscal 2005 and $0.42 in the prior year. Once again, GAAP net income was higher than pro-forma.
A reconciliation of the above non-GAAP net income and EPS amounts to the corresponding GAAP net income and EPS amounts is provided at the end of this press release.
Business Outlook
The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties some of which are set forth below.
First Quarter Fiscal 2006
Net revenues for the first quarter of fiscal 2006 are currently expected to be in the range of $335 million to $345 million. GAAP earnings per diluted share are currently expected to be in the range of $0.26 to $0.28.
Second Quarter Fiscal 2006
Net revenues for the second quarter of fiscal 2006 are currently expected to be in the range of $330 million to $340 million. Operating expenses are expected to increase in the second quarter due to increasing investments in growth initiatives. GAAP earnings per diluted share are currently expected to be in the range of $0.21 to $0.23.
Full Year Fiscal 2006
For fiscal year 2006, net revenues are currently expected to be in the range of $1,360 million to $1,410 million. GAAP earnings per diluted share are currently expected to be in the range of $1.05 to $1.10. Guidance for fiscal year 2006 does not take into account the impact of expected required stock option expensing.
All fiscal 2006 EPS guidance ranges are based on the new 20 percent estimated effective tax rate. The company believes its effective tax rate will revert back to the historical effective tax rate of approximately 24 percent in fiscal year 2007.
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including statements in the paragraphs under "Business Outlook" above, statements regarding our expected effective tax rate and other statements regarding our anticipated performance. Factors that could cause actual results to differ materially include the following: general market and business conditions, changes in accounting rules, particularly related to stock option expensing, failure to achieve sufficient sell-through in our channels for new or existing products, failure of key new applications to achieve anticipated levels of customer acceptance, pricing pressure, failure to achieve anticipated cost reductions and productivity increases, delays in the release of new products and services, failure to achieve continued success in technology advancements, changes in foreign currency exchange rates, failure to successfully integrate new or acquired businesses, the financial and business condition of our reseller and distribution channels, renegotiation or termination of royalty or intellectual property arrangements, failure to achieve continued migration from 2D products to 3D products, failure to grow lifecycle management or collaboration products, and unanticipated impact of accounting for technology acquisitions.
Further information on potential factors that could affect the financial results of Autodesk are included in the company's report on Form 10-K for the year ended January 31, 2004, and Form 10-Q for the quarter ended October 31, 2004, which are on file with the Securities and Exchange Commission.
Autodesk will host its fourth quarter earnings announcement today at 5:00 p.m. Eastern Time. The live announcement may be accessed at 800-291-9234 (passcode: 25553104). An audio webcast will also be available beginning at 5:00 p.m. Eastern Time at www.autodesk.com/investor. A replay of this webcast will be maintained on our website for at least twelve months.
About Autodesk
Autodesk, Inc. is wholly focused on ensuring that great ideas are turned into reality. With more than six million users, Autodesk is the world's leading software and services company for the building, manufacturing, infrastructure, digital media, and wireless data services fields. Autodesk's solutions help customers create, manage, and share their data and digital assets more effectively. As a result, customers turn ideas into competitive advantage by becoming more productive, streamlining project efficiency, and maximizing profits.
Founded in 1982, Autodesk is headquartered in San Rafael, California. For additional information about Autodesk, please visit www.autodesk.com.
NOTE: Autodesk, AutoCAD, Autodesk Inventor, Autodesk Map, Civil 3D and Revit are either trademarks or registered trademarks of Autodesk, Inc., in the United States and/or other countries. All other brand names, product names, or trademarks belong to their respective holders.
Investors:
Sue Pirri, sue.pirri@autodesk.com, 415-507-6467
John Clancy, john.clancy@autodesk.com 415-507-6373
Press:
Nicole Pack, nicole.pack@autodesk.com, 415-507-6282
Autodesk, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Year Ended
January 31, January 31,
2005 2004 2005 2004
(Unaudited) (Unaudited) (Audited)
Net revenues:
License and other $303,704 $262,119 $1,057,108 $836,737
Maintenance 52,451 33,191 176,659 114,906
Total net revenues 356,155 295,310 1,233,767 951,643
Costs and expenses:
Cost of license and other
revenues 39,561 32,535 152,446 132,727
Cost of maintenance revenues 4,400 4,696 16,997 15,401
Marketing and sales 134,435 115,652 461,932 393,234
Research and development 63,239 55,102 239,404 209,349
General and administrative 24,559 26,393 101,415 91,512
Restructuring 11,811 3,183 26,700 3,183
Total costs and expenses 278,005 237,561 998,894 845,406
Income from operations 78,150 57,749 234,873 106,237
Interest and other income, net 4,059 8,812 11,455 16,959
Income before income taxes 82,209 66,561 246,328 123,196
Provision for income taxes (16,441) (8,961) (24,820) (2,880)
Net income $65,768 $57,600 $221,508 $120,316
Basic net income per share $0.29 $0.26 $0.98 $0.54
Diluted net income per share $0.26 $0.24 $0.90 $0.52
Shares used in computing basic
net income per share 227,821 222,929 227,036 222,993
Shares used in computing diluted
net income per share 252,674 239,674 246,977 231,304
Autodesk, Inc.
Pro Forma Consolidated Statements of Income
(See pro forma adjustments listed in the tables below)
(In thousands, except per share data)
Three Months Ended Year Ended
January 31, January 31,
2005 2004 2005 2004
(Unaudited) (Unaudited)
Net revenues:
License and other $303,704 $262,119 $1,057,108 $836,737
Maintenance 52,451 33,191 176,659 114,906
Total net revenues 356,155 295,310 1,233,767 951,643
Costs and expenses:
Cost of license and other
revenues 39,561 32,535 152,446 132,727
Cost of maintenance revenues 4,400 4,696 16,997 15,401
Marketing and sales 134,435 115,652 461,932 393,234
Research and development 63,239 55,102 239,404 209,349
General and administrative 24,559 26,393 101,415 91,512
Total costs and expenses 266,194 234,378 972,194 842,223
Income from operations 89,961 60,932 261,573 109,420
Interest and other income, net 4,059 8,812 11,455 16,959
Income before income taxes 94,020 69,744 273,028 126,379
Provision for income taxes (18,804) (16,739) (54,606) (30,332)
Pro forma net income $75,216 $53,005 $218,422 $96,047
Basic pro forma net income per
share $0.33 $0.24 $0.96 $0.43
Diluted pro forma net income per
share $0.30 $0.22 $0.88 $0.42
Shares used in computing basic
pro forma net income per
share 227,821 222,929 227,036 222,993
Shares used in computing diluted
pro forma net income per
share 252,674 239,674 246,977 231,304
Three Months Ended Year Ended
January 31, January 31,
2005 2004 2005 2004
(Unaudited) (Unaudited)
A reconciliation between operating
expenses on a GAAP basis and
pro forma operating expenses is
as follows:
GAAP costs and expenses $278,005 $237,561 $998,894 $845,406
Restructuring (11,811) (3,183) (26,700) (3,183)
Pro forma costs and expenses $266,194 $234,378 $972,194 $842,223
A reconciliation between income
from operations on a GAAP basis
and pro forma income from operations
is as follows:
GAAP income from operations $78,150 $57,749 $234,873 $106,237
Restructuring 11,811 3,183 26,700 3,183
Pro forma income from operations $89,961 $60,932 $261,573 $109,420
A reconciliation between provision
for income taxes on a GAAP basis
and pro forma provision for
income taxes is as follows:
GAAP provision for income taxes $(16,441) $(8,961) $(24,820) $(2,880)
Income tax effect on restructuring
at the normalized rate (2,363) (765) (5,341) (765)
Dividends received deduction
benefit for prior fiscal years -- -- (15,540) --
Non-recurring tax benefit -- (7,013) (8,905) (26,687)
Pro forma provision for income
taxes $(18,804) $(16,739) $(54,606) $(30,332)
A reconciliation between net
income on a GAAP basis and
pro forma net income is as
follows:
GAAP net income $65,768 $57,600 $221,508 $120,316
Restructuring 11,811 3,183 26,700 3,183
Income tax effect on restructuring
at the normalized rate (2,363) (765) (5,341) (765)
Dividends received deduction
benefit for prior fiscal years -- -- (15,540) --
Non-recurring tax benefit -- (7,013) (8,905) (26,687)
Pro forma net income $75,216 $53,005 $218,422 $96,047
A reconciliation between diluted
net income per share on a GAAP
basis and diluted pro forma
net income per share is as follows:
GAAP diluted net income per share $0.26 $0.24 $0.90 $0.52
Restructuring $0.05 $0.01 $0.11 $0.02
Income tax effect on restructuring
at the normalized rate $(0.01) $ -- $(0.02) $ --
Dividends received deduction
benefit for prior fiscal years $ -- $ -- $(0.07) $ --
Non-recurring tax benefit $ -- $(0.03) $(0.04) (0.12)
Pro forma diluted net income per
share $0.30 $0.22 $0.88 $0.42
To supplement our consolidated financial statements presented on a GAAP basis, Autodesk uses pro forma measures of operating results, net income and net income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, the pro forma results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted pro forma results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States.
Autodesk, Inc.
Consolidated Balance Sheets
(In thousands)
January 31, January 31,
2005 2004
(Unaudited) (Audited)
ASSETS:
Current assets:
Cash and cash equivalents $517,654 $282,249
Marketable securities 15,038 81,275
Accounts receivable, net 196,827 166,816
Inventories 12,545 17,365
Deferred income taxes 14,250 25,410
Prepaid expenses and other current
assets 25,483 24,137
Total current assets 781,797 597,252
Marketable securities -- 165,976
Computer equipment, software,
furniture and leasehold
improvements, at cost:
Computer equipment, software and
furniture 191,656 206,319
Leasehold improvements 32,586 34,526
Less accumulated depreciation (154,676) (174,371)
Net 69,566 66,474
Purchased technologies and
capitalized software, net 9,319 19,378
Goodwill 166,628 160,094
Deferred income taxes, net 105,061 --
Other assets 9,833 7,986
$1,142,204 $1,017,160
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $46,234 $52,307
Accrued compensation 144,145 92,830
Accrued income taxes 41,549 50,695
Deferred revenues 178,701 127,276
Other accrued liabilities 66,839 61,814
Total current liabilities 477,468 384,922
Deferred income taxes, net -- 7,849
Deferred revenues 15,528 --
Other liabilities 1,130 2,746
Stockholders' equity:
Preferred stock -- --
Common stock and additional paid-in
capital 625,225 473,673
Accumulated other comprehensive
loss (2,843) (4,754)
Deferred compensation (269) (451)
Retained earnings 25,965 153,175
Total stockholders' equity 648,078 621,643
$1,142,204 $1,017,160
Autodesk, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
January 31, January 31,
2005 2004
(Unaudited) (Audited)
Operating Activities
Net income $221,508 $120,316
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 51,949 50,292
Stock compensation expense 3,909 1,775
Net loss on fixed asset
disposals 556 --
Write-downs of cost method
investments -- 596
Tax benefits from employee
stock plans 116,856 --
Restructuring related charges,
net 9,212 3,183
Changes in operating assets
and liabilities (30,858) 43,921
Net cash provided by operating
activities 373,132 220,083
Investing Activities
Net (purchases) sales and
maturities of available-for-sale
marketable securities 230,674 (24,039)
Capital and other expenditures (40,835) (25,852)
Business combinations, net of cash
acquired (11,750) (5,150)
Other investing activities (2,449) (3,951)
Net cash provided by (used in)
investing activities 175,640 (58,992)
Financing activities
Proceeds from issuance of common
stock, net of issuance costs 242,225 115,401
Repurchases of common stock (546,408) (178,463)
Dividends paid (13,566) (13,408)
Net cash used in financing activities (317,749) (76,470)
Effect of exchange rate changes on
cash and cash equivalents 4,382 11,251
Net increase in cash and cash
equivalents 235,405 95,872
Cash and cash equivalents at
beginning of year 282,249 186,377
Cash and cash equivalents at end of
year $517,654 $282,249
Supplemental cash flow information:
Net cash paid (received) during the
year for income taxes $16,517 $(19,329)
Fiscal Year 2005 QTR 1 QTR 2 QTR 3 QTR 4 YTD2005
Financial Statistics
(in millions):
Total net revenues $297.9 $279.6 $300.2 $356.2 $1,233.8
License and other
revenues $260.5 $238.5 $254.5 $303.7 $1,057.1
Maintenance revenues $37.4 $41.1 $45.7 $52.5 $176.7
Gross Margin 86% 86% 86% 88% 86%
GAAP Operating Expenses $202.5 $190.0 $202.9 $234.0 $829.5
GAAP Operating Margin 18% 18% 18% 22% 19%
GAAP Net Income $42.5 $39.2 $74.1 $65.8 $221.5
GAAP Net Income
Per Share (diluted) (6) $0.18 $0.16 $0.30 $0.26 $0.90
Pro Forma Operating
Expenses (1) (2) $194.2 $186.3 $ 200.0 $ 222.2 $802.7
Pro Forma Operating
Margin (1) (3) 21% 19% 19% 25% 21%
Pro Forma Net
Income (1) (4) $51.3 $44.2 $47.7 $75.2 $218.4
Pro Forma Net
Income Per Share
(diluted) (1) (5) (6) $0.22 $0.18 $0.19 $0.30 $0.88
Total Cash and Marketable
Securities $519.4 $571.7 $518.0 $532.7 $532.7
Days Sales Outstanding 43 51 50 50 50
Capital Expenditures $5.9 $9.9 $13.5 $11.5 $40.8
Cash from Operations $55.2 $83.5 $90.8 $143.7 $373.1
GAAP Depreciation and
Amortization $12.5 $12.9 $13.2 $13.4 $52.0
Revenue by Geography
(in millions):
Americas $121.5 $115.1 $137.0 $137.3 $510.9
Europe $108.8 $98.9 $95.8 $140.2 $443.7
Asia/Pacific $67.6 $65.6 $67.4 $78.7 $279.2
Revenue by Division
(in millions):
Design Solutions Segment $261.6 $243.8 $257.9 $314.0 $1,077.3
Manufacturing
Solutions Division $44.8 $44.2 $50.4 $60.1 $199.5
Infrastructure
Solutions Division $33.5 $31.4 $33.0 $40.3 $138.3
Building Solutions
Group $27.2 $28.8 $29.1 $39.3 $124.3
Platform Technology
Group and other $156.1 $139.4 $145.4 $174.3 $615.2
Discreet Segment $36.1 $35.3 $41.6 $41.0 $154.1
Upgrade Revenue
(in millions):
Upgrade Revenue $66.2 $46.4 $55.8 $92.9 $261.3
Deferred Maintenance
Revenue (in millions):
Deferred Maintenance
Revenue Balance $96.7 $107.1 $113.0 $140.8 $140.8
Operating Income (Loss)
by Segment (in millions):
Design Solutions $124.2 $106.5 $115.8 $148.6 $495.2
Discreet $1.8 $5.2 $5.4 $9.0 $21.4
Unallocated amounts $(72.5) $(62.3) $(67.4) $(79.5) $(281.7)
Headcount:
Headcount 3,409 3,443 3,437 3,477 3,477
Common Stock Statistics (6):
Stock Outstanding
Pro Forma EPS
Calcula-
tion -
diluted 238,565,000 250,607,000 248,045,000 252,674,000 246,977,000
Stock
Repur-
chased 10,365,200 3,319,600 8,032,200 4,199,800 25,916,800
Installed
Base
Statistics:
AutoCAD
Total AutoCAD-
based
Installed
Base* 3,469,400 3,514,600 3,571,800 3,618,000 3,618,000
Stand-alone
AutoCAD 2,490,000
AutoCAD Mechanical 149,400
AutoCAD Map 203,700
Architectural Desktop 383,900
Land Desktop 109,900
*Includes
prior period
adjustment of
approximately
28,000 seats
AutoCAD LT
Installed Base 2,677,900
Total
Inventor
Installed
Base 306,600 349,500 388,800 422,900 422,900
(1) To supplement our consolidated financial statements presented on a GAAP
basis, Autodesk uses pro forma measures of operating results, net
income and net income per share, which are adjusted to exclude certain
costs, expenses, gains and losses we believe appropriate to enhance an
overall understanding of our past financial performance and also our
prospects for the future. These adjustments to our GAAP results are
made with the intent of providing both management and investors a more
complete understanding of Autodesk's underlying operational results and
trends and our marketplace performance. For example, the pro forma
results are an indication of our baseline performance before gains,
losses or other charges that are considered by management to be outside
of our core operating results.
In addition, these adjusted pro forma results are among the primary
indicators management uses as a basis for our planning and forecasting
of future periods. The presentation of this additional information is
not meant to be considered in isolation or as a substitute for net
income or diluted net income per share prepared in accordance with
generally accepted accounting principles in the United States.
(2) GAAP Operating
Expenses $202.5 $ 190.0 $ 202.9 $ 234.0 $829.5
Restructuring $(8.3) $(3.7) $(2.9) $(11.8) $(26.7)
Pro Forma Operating
Expenses $194.2 $ 186.3 $ 200.0 $ 222.2 $802.7
(3) GAAP Operating
Margin 18% 18% 18% 22% 19%
Restructuring 3% 1% 1% 3% 2%
Pro Forma
Operating Margin 21% 19% 19% 25% 21%
(4) GAAP Net
Income $42.505 $39.165 $74.070 $65.768 $221.508
Restructuring $8.250 $ 3.717 $ 2.922 $11.811 $ 26.700
Income tax effect
on restructuring (7) $(1.650) $(0.744) $(0.584) $(2.363) $(5.341)
Dividends Received
Deduction benefit
for current
fiscal year (7) $2.244 $ 2.054 $(4.298) $ -- $ --
Dividends Received
Deduction benefit
for prior
fiscal years (7) $ -- $ -- $(15.540) $ -- $(15.540)
Non-recurring
tax benefit $ -- $ -- $(8.905) $ -- $(8.905)
Pro Forma
Net Income $51.349 $44.192 $47.665 $75.216 $218.422
Income tax effect
on
restructuring (7) $(0.007) $(0.003) $(0.002) $(0.009) $(0.022)
Dividends Received
Deduction benefit
for current
fiscal year (7) $0.009 $ 0.008 $(0.017) $ -- $ --
Dividends Received
Deduction benefit
for prior
fiscal years (7) $ -- $ -- $(0.064) $ -- $(0.063)
Non-recurring
tax benefit $ -- $ -- $(0.036) $ -- $(0.036)
Pro Forma Net Income
Per Share
(diluted) (6) $0.215 $ 0.176 $ 0.192 $ 0.298 $0.884
(6) On November 16, 2004 the Board of Directors authorized a two-for-one
stock split in the form of a stock dividend to stockholders of record
as of December 6, 2004. Historical common stock statistics and per
share amounts have been restated to reflect the effect of the stock
split.
(7) In the third quarter of fiscal 2005, Autodesk determined that its
consolidated fiscal year effective income tax rate declined from 24%
to 20%. For purposes of comparison, we have assumed the new estimated
effective income tax rate of 20% in calculating our pro forma net
income and pro forma earnings per share for each individual quarter of
fiscal 2005.
SOURCE Autodesk Inc.
investors, Sue Pirri, sue.pirri@autodesk.com, or +1-415-507-6467, or John Clancy, john.clancy@autodesk.com, or +1-415-507-6373, or press, Nicole Pack, nicole.pack@autodesk.com, or +1-415-507-6282, all of Autodesk Inc.