MCAD/MCAE Industry View – A November 2010 Update

Commentary: MCAD/MCAE Industry View - A November 2010 Update

by Dr. Russ Henke
Henke Associates


This November 2010 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 Third Quarter of calendar 2010.

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) 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 twenty-nine (29) 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. 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 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 posted on on July 19, 2010, entitled, “ANSYS turns 40!” dealt with ANSYS multi-physics, and it is available in the EDA WEEKLY archives).

This thirty-first 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 third quarter of calendar 2010:

The release of the MCAD/MCAE Commentary each quarter is driven by the release date of quarterly financials of the last G5 vendor reporting. This Quarter it was Autodesk, which released its results on November 18, 2010.

The following is divided into two (2) basic sections, the first of which discusses the “G5 financial results for the nominal Third Quarter of Calendar 2010,” and the second section covers “Recent MCAD/MCAE News Highlights.”

Near the very end of this quarter's MCAD Commentary is an Economic and Political Editorial.


G5 MCAD/MCAE Vendors' Financials in Q3 2010



Measured in $US except where indicated, Table 1 above reveals that the combined total revenue of the G5 was $1427.7 million in Nominal Q3 2010, a figure which was a mere 4.6% above the combined G5 total of $1364.8 million in sequential Q2 2010, but it was over 16% better year over year than the Q3 2009 total G5 revenue total of $1229 million. Indeed, the quarterly G5 revenue averaged only $1257 per quarter in 2009.

As a gauge of how Bush 43's second recession has impacted the MCAD industry, the G5 would have to have a Q4 2010 of $1820 million for the total revenue for the year 2010 to equal the annual revenue achieved in 2008. So it will most likely be still another year (2011) before 2008 is matched or exceeded in terms of G5 total annual revenue.

Table 1 also shows that ANSYS' revenue curve “is sloped positively, i.e. upward and to the right,” but the slope is very modest over the last three quarters. However, the Q310 revenue was 9.1% better year over year than Q309, but only PTC's Q310/Q309 percentage was lower, at 8.8 %. Note that Dassault (DS) did the heavy lifting in Q3 2010, providing Q3 2010 revenue that was 24.8% better year over year than Q3 2009, measured in US$.

Like ANSYS' three consecutive quarters of relative revenue flatness, for the first three quarters this year Autodesk's revenue (~3.4 times larger than ANSYS' revenue) is also almost flat (averaging $475 million/quarter). Still, the 9-month Autodesk 2010 YTD total of $1424.1 million in revenue is 13.2% better than the similar 9-month Autodesk period last year.

Turning to earnings in Table 2, the same four vendors whose profits ($168.2 million) were $92 million in total better year over year in Q2 2010 vs. Q2 2009, alas delivered only $146.3 million in total earnings in Q3 2010, down $21.9 million from sequential Q2 2010, and a miserly plus $15.5 million over the G4's total earnings in Q3 2009.

By going into the red some $13.22 million and delivering over $29 million fewer dollars this year in Q3 compared to last year, PTC was mostly responsible for the lion's share of the reduced total Q3 2010 G4 earnings performance, owing in part to PTC management's decision in Q310 to reward employees whose base pay had been frozen for two years.

Still, $146.3 million in earnings on revenues of $1405.46 million for the G4 reporting earnings, nevertheless yields a fairly healthy 10.41% collective ROS in Q310, though not as strong as Q2 2010's 12.6% ROS for the same G4.

Autodesk's earnings, while still very positive, fell sequentially $6.4 million in Q3 2010 vs. Q2 2010.


Individual G5 Vendors' Q3 2010 Performances

On November 04, 2010 ANSYS, Inc. (NASDAQ: ANSS) announced third calendar quarter 2010 results with total revenue of $139.8 million, up 9.1% year-over-year as compared to $128.2 million in Q3 2009, but up “only” $2.0 million or +1.4 % compared to sequential Q2 2010 revenue of $137.8 million. However, year-to-date nine-months revenue is up a respectable 12.9% to $413.7 million compared to $366.5 million for the first nine months of 2009. The revenue of $139.8 million for Q3 2010 was just above the middle of the guidance range of $137 million to $142 million provided 3 months ago.

Commenting on the Company's third quarter 2010 performance, Jim Cashman, ANSYS president & CEO stated, "Our Q3 performance reflects our resiliency despite pockets of customer confidence issues regarding the macro-environment. We continue to see healthy growth in our paid-up license and maintenance bases, as well as across our major product lines. We have a strong balance sheet, record cash flows, solid fundamentals and a disciplined team that continues to execute. Our operating performance is a testimony to our belief that engineering simulation solutions remain a high priority for our expanding customer base. The business pressures on our customers to deliver innovative, high-quality products to market with fewer resources are intense. With the upcoming release of ANSYS® 13.0, our product portfolio is robust and we believe we are well-positioned to deliver long-term value to our customers and stockholders."

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14  Next Page »


Review Article Be the first to review this article
SolidCAM - See For Yourself

Featured Video
Mechanical Engineer for Flextronics at Milpitas, California
Failure Analysis Engineer for Flextronics at Milpitas, California
Geodesign Manager for Design Workshop at Aspen, Colorado
Upcoming Events
Robotics Summit & Expo at Seaport World Trade Center 1 Seaport Lane Boston MA - Sep 24 - 25, 2020
DEVELOP 3D Live 2020 New Date November 3rd at Sheffield University ctagon and INOX Building, Durham Road Sheffield United Kingdom - Nov 3, 2020
Digital Twin 2020 - Now in November 2020 at Melbourne FL - Nov 4 - 5, 2020
Sensors Expo & Conference at McEnery Convention Center SAN JOSE CA - Nov 16 - 18, 2020
Kenesto: 30 day trial

© 2020 Internet Business Systems, Inc.
670 Aberdeen Way, Milpitas, CA 95035
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering EDACafe - Electronic Design Automation GISCafe - Geographical Information Services TechJobsCafe - Technical Jobs and Resumes ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise