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In the first MCAD Industry Commentary published May 2003 in MCADCafé.com, then-recent yearly and quarterly financial performances of a selected group of public Mechanical Computer Aided Design (MCAD) companies were analyzed and compared. Expectations of future financial performances of these same MCAD entities were documented. The May 2003 MCAD Commentary was followed by eight quarterly updates in MCADCafé.com, one for each subsequent calendar quarter. URL's on all past articles are available. The entities covered are ANSYS, Autodesk, Dassault Systèmes, UGS PLM, ESI Group, Moldflow, MSC.Software, PTC and Tecnomatix. The current article in the sequel recounts the financial performances for the nominal fourth quarter of calendar 2004 as well as for the full year 2005. In the past we have published a separate report on Autodesk as that company's fiscal quarters are approximately one month later than the other companies. This quarter UGS reported its results just one week before Autodesk, allowing the authors of this February 2005 issue of the MCAD Commentary to include actual results for Autodesk for its quarter ending January 31, 2005. Thus there will be no need this time for an Autodesk MCADCafé supplement. Recent MCAD & PLM News Highlights On January 4, 2005 UGS announced a definitive agreement to acquire all of the outstanding equity of Tecnomatix Technologies Ltd., a provider of Manufacturing Process Management (MPM) software solutions for the automotive, electronics, aerospace and other manufacturing and processing industries, for approximately $228 million in cash. Tecnomatix had revenues of $100 million in 2004. On February 16, 2005 UGS announced that it had engaged with its banks to amend and restate the company's existing US$625 million Revolving and Term Loan Facilities to provide for an additional US$225 million Term Loan Borrowings. In February UGS announced three separate strategic alliances with HP, Capgemini and Autodesk. On February 11, 2005 MSC.Software announced that former SDRC executive William Weyand has become MSC's new CEO. On February 18, Autodesk signed a definitive agreement to acquire COMPASS Systems GmbH for ~13 million euros. COMPASS is said to be a leader in the European data management market. MCAD Vendors' Financial Performances in Q4 2004 As a group, the 9 MCAD vendors had combined revenues of $1.23 billion in the fourth quarter, a 15% increase from the $1.07 billion in the fourth quarter of 2003 and an 18% rise over the $1.04 billion in the just-prior quarter. (Table 1). All of the vendors created year-over-year growth. Compared to the same quarter a year ago, Moldflow and ESI Group had the largest percentage increase with 53% and 31%, respectively. Autodesk and ANSYS also had strong year-over-year quarters with 21% and 17% growth, respectively. (MSC.Software is excluded pending resolution of its financial restatement issues). On a sequential quarterly basis, Dassault Systemes was the revenue growth leader with 36% in U.S. dollars. ANSYS, Autodesk, Moldflow and UGS had growth rates in the high teens. With virtually flat sequential revenue revenues, PTC brought up the rear.
Figure 1 below provides a bar graph showing the revenue trend for each covered vendor, for the periods mentioned in Table 1.  Figure 1 - Quarterly Revenue of MCAD Vendors
(Millions; U.S. $)  Figure 2 - Relative Sizes by "Q4" Revenue
(Excludes MSC.Software) For the quarter Autodesk was the revenue leader with 30% of the total for the group. Dassault Systemes was #2 by a whisker over UGS. (As always, it needs to be pointed out that unlike the other vendors in this report, Autodesk enjoys a minor percentage of its revenue outside of the MCAD space. Autodesk does not break out its mechanical contribution. Also, both Autodesk and Dassault Systemes sell mostly through third parties, while UGS sells mostly direct).
As a group, the MCAD vendors had earnings of $230 million in the fourth quarter, a 33% increase over earnings in the same quarter a year ago and an 18% increase over the just-prior quarter. (Table 2). The largest year-over-year change was PTC which improved from a net loss of $2.7 million to a net profit of $19 million, a $22 million positive swing. PTC's year ago period included $22 million in restructuring charges. On a sequential basis Dassault Systemes and UGS had large gains of $39 million and $22 million, or 86% and 72%, respectively. Autodesk was down slightly and PTC dropped $23 million in earnings. In the prior quarter, PTC earnings included a one-time benefit to the company's tax provision of $18.9 million due to a favorable resolution of prior-year tax audits with the IRS. This makes direct operating comparison difficult. Details on Individual Vendor 4Q 2004 Performances On February 15, 2005 ANSYS, Inc. announced its results for the fourth quarter and the year ended December 31, 2004. Total revenue in the quarter was $39 million, a 17% increase from the same quarter a year ago and a 20% rise sequentially. License revenue of $22 million accounted for 57% of total revenue. License revenue was down 8% year-over-year and up 33% from the prior quarter. Maintenance and Service revenue was $17 million, an increase of almost 3% from the same period a year earlier and an increase of 7% sequentially. Net income for the quarter was $12 million, a 70% year-over-year increase and a 61% increase over the prior quarter. The 2004 earnings include a one-time tax benefit in the fourth quarter related to the successful resolution of outstanding governmental income tax audits for the years 2001, 2002 and 2003. This benefit had the effect of increasing net income by approximately $1.1 million. On January 5, 2005 ANSYS announced that it has acquired Century Dynamics, Inc., a provider of simulation software for solving linear, nonlinear, explicit and multi-body hydro-dynamics problems. The up-front purchase price of $5 million will be paid in cash. In addition, the agreement provides for future payments contingent upon the attainment of certain performance criteria. "We are constantly looking to strengthen our product offering so that we can address a larger percentage of the overall simulation needs of a virtual product development process," said Mike Wheeler, vice president and general manager of the Mechanical Business Unit at ANSYS. "Our immediate goal with Century Dynamics is to begin technology-sharing projects and have products embedded into the ANSYS(R) Workbench(TM) later this year." On February 22, 2005 Autodesk announced the results for its fourth quarter and the year ended January 31, 2005. Total revenue for the quarter was $356 million, a 21% increase over the $295 million in the fourth quarter of 2003 and a 19% increase from the $300 million in the prior quarter. License revenue accounted for 85% of total revenue and was up 16% year-over-year and 20% sequentially. Maintenance revenue accounted for 15% of total revenue and was up 58% year-over-year and 15% sequentially.
The Platform segment which accounts for about 50% of revenue includes AutoCAD and AutoCAD LT products that service multiple markets. Other segments are Building, Infrastructure and Discreet. The Manufacturing segment (which includes the Inventor product lines) grew 28% year-over-year and 19% from the prior quarter. A "guesstimate" of MCAD revenue would be about $140 million for the quarter.
The Americas accounted for 38.5% of total revenue in the quarter, Europe 39.4% and AP 22%. Europe and AP contributed significant revenue improvements both sequentially and year-over-year. Net income for the quarter was $66 million, a 14% rise from $58 million in the same quarter a year ago but down 11% from the just-prior quarter. "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." On November 18, 2004 the Autodesk Board of Directors declared a 2-for-1 stock split to take effect December 6, 2004. The BoD also authorized a $0.015 per share cash dividend for the third quarter. As previously announced, Autodesk will cease paying dividends beyond the end of its fiscal year. As mentioned in MCAD News Highlights above, on February 18, 2005 Autodesk announced an agreement to acquire all assets of COMPASS systems GmbH, a European-based developer of the COMPASS family of data management solutions, for €13 million. COMPASS is said to be a leader in the European data management market, and COMPASS customers number more than 20,000 users in 1,800 manufacturing companies. Autodesk plans to continue offering the COMPASS solution in key European markets and supporting COMPASS customers, while leveraging COMPASS systems' experience in its continuing development of Autodesk's data management solution, featuring Autodesk Productstream. On February 9, 2005 Dassault Systemes reported the results for its fourth quarter and the fiscal year ending December 31, 2004. Total revenue was €240 million, up 5% from the €228 million in the same quarter a year ago and up 28% sequentially (consistent with Dassault's historically large fourth quarters). In terms of constant currency, revenue was up 9%, at the high end of its revenue target. Dassault's Design Centric segment (SolidWorks) had a strong quarter, up about 20% sequentially and year-over-year (up ~33% in US dollars). PDM revenue was flat year-over-year but up 50% sequentially. The high end Process Centric segment was up slightly (2%) from last year but up 30% sequentially. The Americas accounted for 29% of total revenue, Europe 46% and Asia 25%. Revenue was up about 8% in the Americas, 5% in Europe and 5% in Asia in terms of both sequential growth and year-over-growth. On a constant currency basis the Americas increased 18%. CATIA units were up 3% in the quarter and 2% for the entire year. SolidWorks units were up 26% for the quarter and up 18% for the entire year. CATIA average selling price was down 3% sequentially and year-over-year but slightly up excluding currency exchange impact. SolidWorks ASP was up 10%. Net income for the fourth quarter was €60.1 million, a 4% increase over the €57 million in the same quarter a year earlier and a whopping 86% increase over the €33 million in the third quarter. President and Chief Executive Officer Bernard Charles commented, "Dassault Systhmes met all its financial objectives for the full year 2004. We extended our market leadership in 2004, delivering strong revenue growth of 16% in U.S. dollars. All geographic regions contributed to the growth, led by excellent results in the Americas. Our successes in both 3D and PLM during 2004 demonstrated the widespread interest in our solutions across a broad range of industries and companies of all sizes." On December 14, 2004 ESI Group announced the results for the third quarter, the period ended October 31, 2004. Total revenue for the quarter was €11.5 million, a 21% increase (24% at constant currency exchange rates) from the €9.5 million in the same quarter a year earlier and essentially flat compared to the prior quarter. The license revenue of €8 million accounted for 69% of total revenue. License revenue was up 26% year-over-year (+15% at constant exchange rates) but down 6.4% sequentially. Service revenue grew 10% year-over-year and 19% sequentially. In terms of US dollars revenue was $15 million, a 32% increase from the same period a year ago and a 7% increase from the prior quarter. The firm did not provide earnings data for the quarter. During the quarter the company signed two new significant financed research projects from Air Force Research Laboratory in the USA regarding Vibro-Acoustics, and a new project with the European Economic Community linked with innovative products EASi-Process and PAM-COMPOSER, which will last several years. At the end of November 2004 ESI-Group announced the inauguration of ESI Software India private limited, a wholly owned subsidiary in Bangalore, to be involved in the development of software products for virtual simulation. Alain de Rouvray, ESI Group's Chairman and CEO, commented, "The growth momentum and the successful integration of the acquired companies are reflected in the steady increase in global license sales. In the third quarter, mature PAM products continued to sell better while acquired products, such as Vasci and Procast/Calcom, turned in steady growth. The Service business began turning around on the back of technical studies. America posted a particularly strong performance with 43% global growth in the first 9 months (55% in volume), followed by 24% for Asia and 9% for Europe. These combined performances reflect successful efforts to break into new sectors (defense, electronuclear and microelectronics industries) and stronger positions at strategic customers." On January 27, 2005 Moldflow Corporation announced the results for its second fiscal quarter of 2005, the period ending December 25, 2004. Total revenue for the quarter was $16.2 million, a 53% increase from $10.6 million in the same period a year ago and up 16% from $14 million in the prior quarter. The increases in terms of constant currency were 47% and 13%, respectively. Product revenue at $9.6 million accounted for 59% of total revenue, an increase of 87% year-over-year and up 21% sequentially. Service revenue accounted for 41% of total revenue and increased 21% year-over-year and 11% sequentially. Revenue from the Design Analysis Solutions segment totaled $12.2 million, representing 75% of total revenue and an increase of 32% over the same quarter of the prior year. Revenue from the Manufacturing Solutions segment totaled $4.1 million, contributing 25% of total revenue and an increase 192% year-over-year On a regional basis, revenue in Europe represented 38% of total revenue for the second quarter of fiscal 2005, while revenue in the Americas and Asia Pacific regions represented 32% and 30% of total revenue, respectively. In total, approximately 86 new customers were added during the quarter. On January 4, 2005 MSC.Software Corp. announced that the New York Stock Exchange has informed the Company that the Exchange has been reviewing the Company's continued listing status and monitoring the Company because of the Company's failure to file its Annual Report on Form 10-K for the year ended December 31, 2003. On February 8, 2005, the New York Stock Exchange informed MSC.Software Corporation that because of the delay in the filing of its annual report for the fiscal year ended December 31, 2003, the Company is not in compliance with the Exchange's reporting requirements and that the Exchange will suspend trading in the Company's stock on the Exchange before the opening of the market on March 11, 2005. After the suspension, the Company anticipates that its stock will trade on the Over-The-Counter Pink Sheets. The Exchange also stated that trading could be suspended earlier if there is a material adverse development. On February 11, 2005 MSC.Software Board of Directors announced the appointment of William J. Weyand as its new Chief Executive Officer and Chairman of the Board of Directors. He succeeds Frank Perna who will be retiring. Mr. Weyand had been a Director of the company. Previously Mr. Weyand served as Chairman and CEO of Structural Dynamics Research Corporation from 1997 to 2001 when EDS acquired that firm and merged it with UGS. He left SDRC upon the completion of its sale to EDS for almost $1 billion in 2001. In 2003, Mr. Weyand served as Vice Chairman and CEO of Pavilion Technology, a ten-year-old worldwide software company in Advanced Process Control Solutions. On February 16, 2005 MSC.Software announced as it had assembled certain financial data from the previous quarter and for the fourth quarter and year ended December 31, 2004. The press release stated that "As previously disclosed, MSC.Software will restate its financial statements for the periods subsequent to December 31, 2000. Since the Company is unable to quantify the exact impact of the restatement on its financial results at this time, the Company can only give limited information regarding its fourth quarter and year end results." The information provided described operating expenses, cash and total cash flow from operations, gross accounts receivables and DSOs. No information was given revenue or net income. On the same day, MSC.Software announced a summary of the Audit Committee's Independent Review. The independent review found evidence that information was withheld from, and inaccurate or misleading information was provided to, the Company's independent public auditors in connection with the accounting treatment of stock options of a departing employee of a foreign subsidiary and revenue recognition with respect to software contracts in Korea. The independent review raised concerns regarding the timing of the recognition of revenues, the completeness of the documentation required to recognize revenue, the implementation of appropriate cut-off procedures at the end of accounting periods and other failures to comply with generally accepted accounting principles. The Company also intends to make certain non-revenue adjustments as part of the restatement process which were outlined. MSC.Software's new CEO William Weyand noted that the Company has revised its organizational structure, created an internal audit function, strengthened document control and data entry processes, instituted training worldwide and implemented and will continue to implement other changes to its internal controls and procedures to rectify deficiencies observed by the Audit Committee review and otherwise to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. On January 19, 2005 PTC announced the results for its first fiscal quarter of 2005, the period ending January 1, 2005. Total revenue for the quarter was $169.2 million, up 8% (3% in terms of constant currency) from $156.8 million for the same period last year but essentially flat from the prior quarter. This was slightly above the range forecasted last quarter. License revenue of $47 million or 28% of total revenue and service/maintenance revenue of $122 million or 72% of total revenue were both up 8% year-over-year. Sequentially license revenue was down nearly 10% but service and maintenance revenue was up 3.5%. Total revenue for PTC Design Solutions in the first quarter was $123.0 million, up 8% from the first quarter of 2004. Design Solutions license revenue of $32.5 million grew 9% year-over-year. Total revenue for Collaboration and Control solutions in the first quarter was $46.2 million, up 8% from the first quarter of 2004. Collaboration and Control solutions license revenue of $14.4 million grew 5% year-over-year. Windchill Link solutions license revenue grew 32% year-over-year and represented 50% of overall Collaboration and Control solutions license revenue. The value added reseller channel delivered $33.2 million in total revenue during the quarter, a 9% year-over-year increase and 20% of total revenue.
MCAD accounted for 73% of total revenue and Windchill 27%, consistent with earlier quarters. Some 86% of license revenue was from existing customers. North America accounted for 34% of total revenue, Europe 40% and AP 26%. Europe had double digit growth both sequentially and year-over-year. North America and AP had modest growth year-over-year but declined sequentially. In terms of constant currencies, both grew 4%. The average selling price of MCAD seats at $7,000 was down 17% from the last few quarters. This was due to fact that the majority of MCAD seats sold were entry level Pro/E. Seat volume at 4,600 was up 30%. Similarly, the ASP of Windchill at $1,485 was down by almost the same percentage. Net income for the quarter was $19.2 million compared with a net loss of $26.5 million in the year-ago period. The year-ago period net income included restructuring charges of $21.6 million. Net income from the prior quarter was $42 million, which included a $18.9 million income tax refund. "Our performance in the first quarter was strong by all measures," said C. Richard Harrison, president and chief executive officer. "After significantly improving our profitability during the past year, we are working to accelerate growth. We will leverage our more productive distribution model, our highly differentiated software solutions, and our roadmap for customers to easily adopt full PLM functionality. Customer satisfaction is at an all-time high, and our growing list of new customers reflects the competitiveness of our offerings in the marketplace." On January 4, 2005 Tecnomatix Technologies Ltd, an Israeli firm, announced that it has entered into a definitive agreement for all of its outstanding equity to be acquired by UGS. Under the agreement shareholders will receive $17.00 per share in cash for each Tecnomatix share they own. This represents a premium of 39% to Tecnomatix's average closing price over the last 60 trading days. The transaction implies a total equity value of $227.7 million. The transaction has received the unanimous support of Tecnomatix's Board of Directors and, subject to the receipt of required regulatory approvals, is expected to be completed by the end of the first quarter 2005. Harel Beit-On, chairman of Tecnomatix, said, "From an innovative vision only five years ago to over 300 productive enterprise deployments today, the Tecnomatix MPM offering has become the chosen path to manufacturing excellence at the world's leading automotive, aerospace and electronics manufacturers. Through this marriage of best-in-class MPM solutions and UGS' leading enterprise PLM expertise, Tecnomatix customers and manufacturers around the world will realize even greater business value and product introduction success." Then on February 15, 2004, Tecnomatix Technologies Ltd announced the results for its fourth quarter and the full year ended December 31, 2004. Total revenue for the quarter was $27.1 million, a 7.5% increase from the $25.2 million a year earlier and a 6% rise from the $25.5 million in the just-prior quarter. License revenue of $11 million accounted for 40% of total revenue. License revenue was down 9% year-over-year and down 1% sequentially. Service revenue at $16 million accounted for 60% of total revenue. Service revenue was up 22% year-over-year and 12% sequentially. Net income for the quarter was $1.2 million, a significant improvement over the loss of $4.4 million in same quarter a year ago which included special charges for impairment, in-process R&D and acquisition costs. It was also a 113% increase over the $585 thousand in the prior quarter. On February 8, 2005 UGS announced its results for the fourth quarter and the year ended December 31, 2004. Total revenue for the quarter was $294 million, an 11% increase. Total cPDM revenue was up 39% and cPDM software revenue was up 38%. Operating income grew 10% year-over-year. Sixty-four enterprise contracts were signed in the quarter with total contract value of more than US$1 million each. "Today marks a major milestone for UGS in many ways. We are the first company in the new PLM industry to report reaching the $1 billion mark in revenue, and we continue to increase our market share and profitably grow while always focusing on our customers' success as our number one priority," said Tony Affuso, chairman, CEO and president of UGS. "Combined with our strong fourth quarter and full year 2004 performance, these announcements underscore both an industry and a company on the move," Affuso said. "UGS' customer commitment remains our most critical attribute. UGS' new alliances highlight our independence and that leading systems integrators see the strong opportunity in the dynamic PLM market. The appointment of Dave Shork emphasizes our readiness to take the company to an even stronger market position and completes our senior leadership team. UGS jumps into 2005 with confidence in our ability to move to the next level of market leadership." On February 8, 2005 UGS and HP announced a strategic alliance intended to provide customers a one-stop shop of enterprise level PLM solutions. In this five-year commitment, HP and UGS will invest in joint sales, product development, marketing, and services delivery. As part of HP Services, the HP Consulting and Integration team will be available to provide customers with the IT consulting, systems integration and the rapid technology implementation needed to develop and deploy reliable solutions. It was said that he alliance will also combine thought leadership in product development and enterprise systems, certification of HP services resources on UGS software products, joint technology roadmaps for migration planning and development of integrated PLM solutions for multiple industries. Also on February 8, 2005 UGS and Capgemini U.S. LLC announced an alliance to offer jointly enterprise level industry-leading PLM solutions. Capgemini and UGS will work collaboratively on joint marketing, business development, sales engagements, solution delivery and operations to help maximize the impact of PLM based solutions. These alliances were among the first major agreements with systems integrators announced by UGS since the company launched independent operations in May 2004. On February 14, 2005 UGS and Autodesk announced a strategic alliance to enable complex product and process information to be widely and quickly shared, without the obstacle of format incompatibility. As part of the alliance, Autodesk, the design software company with the world's largest engineering user base, will become a member of UGS' JT Open Program, a global initiative to support JT, while UGS, a leading global provider of product lifecycle management (PLM) software and services, will join the Autodesk Developer Network and become a DWF Developer partner. On February 23, 2005, Mentor Graphics Corporation, a provider of electrical systems design solutions, and UGS announced that they have signed a joint cooperation agreement to deliver tight interoperability between their products, which provide solutions to meet the emerging needs of complex electromechanical platforms such as automobiles, airplanes and trains. For up-to-date information on the EDA Industry, and comparisons of MCAD to EDA, click on the February 2005 EDA Industry Commentary. MCAD Vendor Stock Performances The combined stock quarterly and year-over-year performances of the 7 publicly-traded companies (UGS is now a private company) was well above the performance of the major stock indices. (Tables 10 & 11 and Figure 4). Total and average growth percentages were over 5 times the growth percentages of the stock indices. No MCAD vendor stock price declined. Autodesk led the pack with 210% year-over-year growth. ANSYS, MSC.Software and Moldflow had very strong growth of 62%, 40% and 30%, respectively. On a sequential basis, the firms outpaced the stock indices by a factor of 3. Autodesk grew over 50% and PTC grew nearly 50%. Moldflow, Tecnomatix and ANSYS also had a strong performance with 34%, 32% and 29% quarter-over-quarter growth.
(Note: UGS is no longer publicly traded)
 Figure 4 - Stock Prices of MCAD Vendors
Guidance for Next Quarter
(ESI-Group, MSC.Software and UGS data unavailable) Table 12 provides the available forecast data for the next quarter, compared to past actual revenue data for each vendor. Detailed Guidance from MCAD Vendors ANSYS projects that full year 2005 GAAP diluted earnings per share in the range of $1.00 to $1.06 and pro forma earnings in the range of $1.15 to $1.18. ANSYS has not yet completed the purchase accounting for its most recent acquisition of Century Dynamics, Inc. which may affect this estimate. ANSYS expects revenue for the year to grow 11% to 13%. Autodesk net revenues for the first quarter of fiscal 2006 are currently expected to be in the range of $335 million to $345 million, down 5% compared to the $356 million in the quarter just completed but up 14% from the same period a year earlier. GAAP earnings per diluted share are currently expected to be in the range of $0.26 to $0.28. Net revenues for the second quarter of fiscal 2006 are currently expected to be in the range of $330 million to $340 million. GAAP earnings per diluted share are currently expected to be in the range of $0.21 to $0.23. 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. "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." In its financial release Dassault Systems stated that, "Regarding 2005, we are reconfirming our preliminary financial objectives of revenue growth of 11 to 12 percent in constant currencies and a stable operating margin excluding acquisition costs and stock-based compensation expense. Based upon an assumed exchange rate of 130 this leads to revenue from 865 to 875 million euros for the year. For first quarter, our revenue growth objective is about 9 to 12 percent in constant currencies or about 190 to 195 million euros." This is a lowering from previous estimates due to further weakening of the dollar. Dassault is forecasting a 19% drop from the seasonally strong fourth quarter just completed. ESI Group did not provide a forecast. Moldflow expects revenue for the third fiscal quarter of 2005 to be between $16.5 million and $17.2 million. This is 4% higher than the just completed quarter and a 27% rise compared to a year ago. For the full fiscal year, Moldflow expects revenue between $64 million and $66 million. MSC.Software did not provide a revenue or earnings forecast but did describe its pipeline which is some indicator of their future business.
PTC's revenue forecast for the second quarter of fiscal 2005 is between $170 million and $175 million. This compares with the $169 million in the quarter just completed and $157 million in the same quarter a year ago. Total costs and expenses (operating expenses) are expected to be approximately $150 million versus $146 million last quarter. The Company expects earnings per share on a GAAP basis to be between $0.06 and $0.08. Tecnomatix, expecting its acquisition by UGS to complete during the next quarter, did not offer any guidance. UGS provided no forecast. Results for Calendar 2004 vs 2003
As Table 13 shows, for calendar 2004 the combined eight MCAD vendors (MSC.Software did not report) had revenues of $4.28 billion, an impressive 17% increase over 2003. All vendors registered year-over-year increases. On a percentage growth basis Moldflow was the leader at 48%, followed by Autodesk at 30% and ESI Group at 27%. ANSYS, Dassault, Tecnomatix and UGS had growth percentages in the high teens.  Figure 5 - MCAD Vendor Relative Revenue
Autodesk had the largest percentage of combined reported revenues with UGS and Dassault Systemes fighting it out for #2. (Figure 5). The top three vendors accounted for 86% of combined revenues. See caveats presented earlier on revenue comparisons.
Table 14 shows that as a group, the MCAD vendors had $670 million in earnings, well more than double their earnings for 2003 (143% year-over-year growth). The largest swing was PTC, which went from a net loss of $113 million in 2003 to a net profit of $80 million in 2004. accounting for half of the combined difference. On a percentage growth basis, Moldflow, Autodesk and ANSYS were the biggest gainers, with 600%+, 84% and 62% respectively. Calendar Detail 2004 vs. 2003 for Individual Vendors Total ANSYS revenue for 2004 was $135 million, an 18.5% increase form the $134 million in 2003. License revenue of $71 million was up 22% and Maintenance & Service revenue was up 47%. Net income for 2004 was $34.5 million, a 62% increase from the $21.3 million in 2003. Autodesk revenue for 2004 was $1.23 billion, a 30% increase over the $952 million in 2003. Net income was $221 million, an 84% improvement over the $120 million in 2003. Dassault Systemes' total revenue for 2004 was €797 million, well above the original objective of €765 million and up 6% (9% in constant currencies) relative to 2003. Software revenue of €671 million was up 4% (8% in constant currencies). PDM revenue reached the €100 million milestone with growth of 8% (11% in constant currencies). In US dollars total revenue was $987 million. Net income for 2004 was €156 million, up 16% from €140 million in 2003. In US dollars, net income was $194 million. For calendar 2004 ESI Group had total revenue of €57 million, a 15% increase relative to the €50 million in 2003. License revenue of €44.6 million was up 23% while service revenue of €12.5 million was down 6%. Net loss for the first half of F2004/5 was €3.2 million. For calendar 2004 Moldflow's total revenue was $58.8 million, a 49% increase over the $39.5 million in calendar 2003. Net income for 2004 was $5 million, more than 6X Moldflow's net income in 2003. MSC.Software results for the year were not available. Prior year results are also under review. For calendar 2004 PTC delivered revenue of $672 million, a 2.4% increase over the $656 million in 2003. MCAD revenue of $490 million accounted for 73% of total revenue, an increase of 1.2%. Windchill revenue of $46 million accounted for 27% of total revenue, an increase of 5.7%. Net income for calendar 2004 was $80 million compared to a loss of $113 million in 2003. PTC posted profits in every quarter in 2004 vs. posting losses in every quarter in 2003. For the full year 2004, Tecnomatix revenues were $100.6 million, a 16% increase compared to revenues of $86.3 million for the full year 2003. License revenue of $40.5 million was up 12% and service revenue of $60 million was up 20%. Net income for the full year 2004 was $2.5 million compared to a net loss of $10.3 million for the full year 2003 (which included $9.3 million in special charges). For calendar 2004 UGS total revenue was $1.019 billion, a 14% increase over 2003. Software revenue growth was 10%, cPDM total revenue growth was 35% and cPDM software revenue growth was 25%. Operating income increased 37% over 2003 and EBITDA at $258 million was up 16%. Net income for the year excluding purchase accounting was $132 million, a 27% increase over the $104 million in 2003. According to GAAP maintenance revenue should be reduced $10.2 million in Q2, $16 million in Q3, $14 million in Q4 and $4.6 million in 1Q05 due to the acquisition by a group of venture capitalists. There was also an In-process R&D charge of $51 million in Q2.
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Comments? Feedback? Tell us what you think about this topic, or share any additional information you may have on the subject! Submit your comments to: MCADCafe-Editor@ibsystems.com. About the Authors Since 1996, Dr. Russell F. Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. During his corporate career, Henke operated sequentially on "both sides" of MCAD and EDA, as a user and as a vendor. He's a veteran corporate executive from Cincinnati Milacron, SDRC, Schlumberger Applicon, Gould Electronics, ATP, and Mentor Graphics. Henke is a Fellow of the Society of Manufacturing Engineers (SME) and served on the SME International Board of Directors. He is also a member of the IEEE and a Fellow of ASME International. An affiliate of the HENKE ASSOCIATES team since 2001, LA-based Dr. John R. (Jack) Horgan co-authored this article. Jack's career included executive positions at Applicon, Aries Technology, CADAM, and MicroCadam as well as a stint at IBM. Since May 2003 the authors have now published a total of twenty-seven (27) articles on MCAD, PLM, EDA and Electronics IP on IBSystems' MCADCafé and EDACafé Further information on HENKE ASSOCIATES, and URL's for past Commentaries, are available at http://www.henkeassociates.net. |
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