Commentary: MCAD/MCAE Industry View - A June 2011 Update
by Dr. Russ Henke
Henke Associates
Introduction:
This June 2011 issue of the MCAD/MCAE Industry Commentary recounts the financial performances of a
selected group-of-five MCAD/PLM/MCAE vendors (G5) for the nominal
First Quarter of calendar 2011.
In the very first MCAD Industry Commentary published in May 2003 in MCADCafé.com, then-recent yearly and quarterly financial performances of a selected group of public Mechanical Computer Aided Design (MCAD) and Mechanical Computer Aided Engineering (MCAE) vendor companies were analyzed and compared. Expectations of future financial performances of these same entities were documented.
The May 2003 MCAD Commentary was followed by thirty-one (31) quarterly updates in MCADCafé.com, one for each subsequent calendar quarter. URL's on all past articles are available. The entities initially covered were
ANSYS, Autodesk, Dassault Systèmes, UGS PLM, ESI Group, Moldflow, MSC.Software, PTC and Tecnomatix.
As a result of the acquisition of Tecnomatix by UGS that closed April 1, 2005, Tecnomatix was eliminated from coverage thereafter as a separate entity.
On May 7, 2007 UGS announced the close of its acquisition by Siemens AG effective May 4, 2007. Thereafter, the business went to market as UGS PLM Software (and later as Siemens PLM Software), a global division of the Siemens Automation and Drives (A&D) Group. Over the years UGS itself had bounced back and forth between being a public company and a private company under different ownerships. Regrettably, we have been able to gain very little insight into UGS' financial performance itself from public Siemens' corporate reports after the Siemens acquisition. Occasionally we will include
Siemens PLM Software news items that bear on the industry as a whole.
Then on June 25, 2008 Autodesk completed its acquisition of Moldflow Corporation, so thereafter Moldflow was eliminated here from separate coverage.
On July 07, 2009 MSC.Software announced that it had entered into a definitive agreement with affiliates of Symphony Technology Group (STG) under which a company controlled by STG would acquire all of MSC's outstanding shares in a one-step cash merger transaction. This acquisition of MSC.Software by STG was finally consummated on October 14, 2009. No financial results for MSC.Software were published for Q3 2009, and none since. Unless and until such data are subsequently made available, MSC.Software has been dropped from financial reporting coverage herein, although occasionally
MSC.Software news items that bear on the industry as a whole will be mentioned.
Henke Associates recognizes that some MCAD/PLM/MCAE vendors have expanded their offerings into the world of “multi-physics” by moving beyond pure MCAD into other disciplines, such as fluid dynamics and electronic analysis (e.g. ANSYS). This Commentary will also report on these new areas as appropriate. (The EDA WEEKLY article posted on EDACafe.com on July 19, 2010, entitled, “ANSYS turns 40!” dealt with ANSYS multi-physics, and it is available in the EDACafe.com EDA WEEKLY archives).
This thirty-third (33RD) MCAD/MCAE Industry article in the sequel recounts mainly the financial performances of the remaining group-of-five (G5) MCAD/PLM/MCAE entities for the nominal first quarter of calendar 2011:
The timing of the posting date of the MCAD/MCAE Commentary each quarter is driven by the release date of quarterly financials of the last G5 vendor reporting.
Again this quarter it was Autodesk, which released its nominal Q1 2011 results on May 19, 2011.
Enjoy!
G5 MCAD/MCAE Vendors' Financials in Q1 2011
Measured in $US except where indicated, Table 1 below reveals that the combined total revenue of the G5 was US$1564.3 million in Nominal Q1 2011, down less than 3% from the $1610.8 million total in the just prior, traditionally strong Q4 of the previous year, and a robust 18.2% above the total year-over-year figure of $1323.6 million for Q1 2010.
Indeed, the G5’s US$1564.3 million for nominal Q1 2011 was $132.5 million above the average quarter for the 2010 year ($1431.8 million). All each quarter of 2011 has to be is $52.5 million each larger than the equivalent quarters in 2010, for the full year 2011 revenue total to eclipse the G5’s revenue total of 2008, a feat which both 2009 and 2010 failed to accomplish.
Table 1
further reveals that every member of the G5 experienced an excellent Q1 2011 relative to the previous year’s counterpart, with each vendor scoring at least a double digit year-over-year (YOY) percentage increase in revenues, led by
Dassault’s
31.3% increase measured in Euros. In fact, both
Autodesk
and
PTC
posted more revenue in Q1 2011 than they did in their seasonally-strong sequential 2010 Q4’s:
Turning to
earnings in
Table 2 below, while the total earnings for the G4 in Q1 2011 did not eclipse the sequential total in Q4 2010, the G4 Q1 figure was only off by some $13 million of doing so. Individually, both Autodesk and PTC did do it! The G4 in Q1 2011 achieved a ROS of 14.37% vs. 14.49% in Q4 2010, a remarkable performance for the first quarter of a year.
The G4 total for Q1 2011 also delivered a huge increase of $87.4 million in absolute net income vs. the year ago Q1 2010.
Individual G5 Vendors' Q1 2011 Performances
On May 5, 2011
ANSYS, Inc. (NASDAQ: ANSS) announced over-performance against its guidance in both revenue and diluted earnings per share for the first quarter of 2011. Total revenue increased by 16.1% over the first quarter of 2010. GAAP net income and diluted earnings per share increased 30.5% and 28.6%, respectively, over the first quarter of 2010. The growth in the first quarter was spread across all major geographic regions and among a broad array of industries.
Highlights
- Revenue of $158.0 million
- GAAP diluted earnings per share of $0.45
- Record operating cash flows of $84.9 million, +42% v Q1
- GAAP operating profit margin of 39.4%
"ANSYS' first quarter results are an excellent start to 2011 and represent early momentum from the focus and investments in 2010," commented
Jim Cashman, ANSYS President and CEO. "During the first quarter of 2011, all major metrics of the business showed continued improvement, highlighted by revenues and earnings that were above our guidance, a record deferred revenue balance of $236.4 million, and all time high cash flows from operations."
"We also saw improvement in the UK and North America markets over last quarter and, most notably, our Japan team delivered a very strong contribution to our first quarter results. We are extremely proud of their continued dedication and ongoing efforts in the face of such extraordinary circumstances. Supporting our Japanese employees and customers as they focus on rebuilding will be a new and important priority as we look into the remainder of 2011. Despite the various political turmoil and macroeconomic concerns, our diversified global reach, our resilient business model and our technological leadership continue to drive customer engagements. With the growing need for energy efficiency, stricter environmental and regulatory mandates, and ever-increasing consumer expectations, our customers are increasingly using simulation to enable innovation and value creation. These increasing business pressures, coupled with the dedication and efforts of our global team, have continued to enable us to deliver on our commitments," stated Mr. Cashman.
