SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K dated July 27, 2006
Commission File No. 0-28578
DASSAULT SYSTEMES S.A.
(Name of Registrant)
9, Quai Marcel Dassault, B.P. 310, 92156 Suresnes Cedex, France
---------------------------------------------------------------
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F
Form 20-F X Form 40-F __
---
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1):
Yes __ No X
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Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7):
Yes __ No X
---
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934:
Yes __ No X
---
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule
12g3-2(b): 82-___________
ENCLOSURES:
Dassault Systemes S.A. is furnishing under cover of Form 6-K a press release
dated July 27, 2006, reporting financial results for the second quarter and
six months ended June 30, 2006.
[DASSAULT SYSTEMES logo]
Dassault Systemes Reports Excellent Second
Quarter With Revenue, Operating Margin and EPS
Above Targets
Paris, France, July 27, 2006 - Dassault Systemes (DS) (Nasdaq: DASTY; Euronext
Paris: #13065, DSY.PA), a world leader in 3D and Product Lifecycle Management
(PLM) solutions, reported financial results for the second quarter and six
months ended June 30, 2006.
Second Quarter Highlights
o GAAP total revenue up 29% to (euro)280.0 million; GAAP software revenue
up 32% to (euro)238.0 million; GAAP EPS of (euro)0.25
o Non-GAAP total revenue up 32% to (euro)286.0 million (up 33% in constant
currencies);
o Non-GAAP software revenue up 35% to (euro)244.0 million, (up 36% in
constant currencies); excluding ABAQUS and MatrixOne, Non-GAAP software
revenue up 16% (17% in constant currencies)
o Non-GAAP EPS up 12% to (euro)0.37 on operating margin of 24.5%
o MatrixOne achieves break-even in first period following acquisition
o Non-GAAP PLM revenue up 35% (36% in constant currencies)
o DS raises 2006 EPS and constant currency revenue growth objectives;
reconfirms 2006 operating margin objective
Bernard Charles, Dassault Systemes President and Chief Executive Officer,
commented, "DS had a great second quarter, with revenue, earnings and operating
margin coming in above our objectives. Software revenue increased 36% in
constant currencies on broad-based strength, with CATIA results providing a
solid foundation. The strong performance of our sales organization and partners,
including IBM, business partners and the SolidWorks channel, contributed to this
excellent quarter.
"We continue to see good dynamics for our business in Asia, where revenues
increased 49% in constant currencies for the second quarter. In particular, the
level of interest in PLM remains high in Asia and we see this continuing as
evidenced by record attendance at our major user conferences in Japan and China
in July.
"In summary, DS is very well positioned for growth in 2006 and the coming years
as the leading provider in PLM, which is mission critical for product
development performance and innovation. We have continued to gain market share
in the first half of 2006 and with our recent acquisitions of both ABAQUS and
MatrixOne we are further expanding our addressable market. Working together with
our customers and partners, we expect to continue to extend the value PLM brings
to multiple industries."
Thibault de Tersant, Executive Vice President and CFO of Dassault Systemes,
commented, "MatrixOne is delivering on all of our acquisition objectives.
MatrixOne's performance exceeded our targets and it is already at break-even in
its first period of operation as a part of Dassault Systemes. And our plans to
achieve cost savings are solidly on track."
1
Second Quarter Financial Results
Dassault Systemes completed the acquisition of ABAQUS, Inc. in October, 2005 and
MatrixOne Inc. in May, 2006 and has accounted for these acquisitions pursuant to
U.S. GAAP (hereinafter GAAP) purchase accounting rules. Certain supplementary
information is provided in this press release which is not in conformity with
GAAP. See tables for a reconciliation of 2006 and 2005 second quarter and six
month GAAP and Non-GAAP financial data.
Revenue
GAAP Revenue Discussion
-----------------------
Revenue growth reflected broad-based strength across DS software applications.
GAAP total revenue increased 29% to (euro)280.0 million for the 2006 second
quarter, compared to (euro)217.3 million in the year-ago quarter. GAAP software
revenue increased 32% to (euro)238.0 million in the recently completed quarter.
Service and other revenue increased 15% to (euro)42.0 million in the 2006 second
quarter, compared to (euro)36.4 million in the 2005 second quarter.
Non-GAAP Revenue Discussion
---------------------------
In the 2006 second quarter, total revenue increased 32% to (euro)286.0 million
and increased 33% in constant currencies compared to the year-ago period on
strong growth in software revenue. Software revenue in the 2006 second quarter
increased 35% to (euro)244.0 million and increased 36% in constant currencies.
Excluding ABAQUS and MatrixOne, software revenue increased 17% in constant
currencies on broad strength. In the 2005 second quarter, software revenue was
(euro)180.9 million. Software and service revenue represented 85% and 15%
respectively of Non-GAAP total revenue in the 2006 second quarter. New CATIA and
SolidWorks seats licensed increased 15% to 20,485 seats in the 2006 second
quarter, compared to 17,755 in the year-ago period.
For the 2006 second quarter, PLM revenue increased 35% to (euro)229.9 million,
and increased 36% in constant currencies, up from (euro)170.7 million in the
year-ago quarter. ENOVIA revenue increased 88% and 90% in constant currencies,
and excluding MatrixOne, ENOVIA revenue grew 19% in constant currencies.
Underlying the strong growth of PLM was CATIA, with a good level of activity. In
particular, CATIA seats licensed increased 12% to 9,100 in the 2006 second
quarter.
ABAQUS had a solid quarter with revenue of (euro)23.2 million and MatrixOne's
revenue totaled (euro)17.8 million, both before the impact of the deferred
revenue write-downs required under GAAP purchase accounting treatment. ABAQUS
and MatrixOne software applications are included in PLM results.
SolidWorks revenue increased 20% to (euro)56.1 million and increased 22% in
constant currencies in the recently completed quarter, compared to (euro)46.6
million in the 2005 second quarter. SolidWorks seats licensed increased 19% to
11,385 licenses for the second quarter.
2
From a regional perspective, 2006 second quarter revenue in Europe increased
35%, in the Americas it increased 20% (19% in constant currencies) and in Asia,
revenue increased 42% (49% in constant currencies).
Operating Income and Margin and EPS
GAAP earnings per diluted share decreased 22% to (euro)0.25 in the 2006 second
quarter, compared to (euro)0.32 in the year-ago period. GAAP operating income
decreased 9% to (euro)49.7 million (17.8% operating margin) in the 2006 second
quarter, compared to (euro)54.7 million in the 2005 second quarter (25.2%
operating margin).
Non-GAAP earnings per diluted share increased 12% to (euro)0.37 in the 2006
second quarter, up from (euro)0.33 in the 2005 second quarter. Non-GAAP
operating income increased 27% to (euro)70.2 million in the 2006 second quarter,
compared to (euro)55.2 million in the year-ago quarter. The Non-GAAP operating
margin was 24.5% in the 2006 second quarter, ahead of the Company's stated
objective. This was a solid performance compared to the Non-GAAP operating
margin of 25.4% in the year-ago quarter, given the dilution from recent
acquisitions.
Other financial highlights
Net operating cash flow was (euro)63.7 million and (euro)164.9 million for the
second quarter and six months ended June 30, 2006, respectively. At June 30,
2006, cash and short-term investments totaled (euro)473.5 million and long-term
debt was (euro)202.9 million. In May 2006, DS finalized the acquisition of
MatrixOne Inc. for an all cash purchase price of $410 million in aggregate,
before reflecting a cash balance of US$93 million and estimated tax benefits.
Second quarter customer highlights included, among others:
o In a separate press release today, DS is announcing that Airbus is
standardizing product development processes on CATIA and ENOVIA VPLM for
all new programs.
o In a separate press release today, DS is announcing that Ford Motor
Company has extended its multi-year contract, which designates CATIA V5
as the global design and engineering standard for all new vehicle and
powertrain systems development.
o New PLM wins and reorders included Legrand in E&E (electrical and
electronics), Viking in Consumer goods, Mecasonic and Tokyu Car in F&A,
the Quai Branly Museum, Keylex in Automotive and Kaji Metal in Aerospace.
o ENOVIA MatrixOne closed 18 transactions in the Semiconductor sector,
including significant orders from Qualcomm and Agere, and expanded its
presence in the apparel sector with Luxottica and Quiksilver.
o SolidWorks wins included Fuji Xerox Co. in E&E in Japan, and in F&A,
Comact Equipment in Canada, Hoffman Enclosures in the United States,
Knipex in Germany and Metal Saur in Brazil.
3
DS completed the acquisition of MatrixOne ahead of schedule and introduced its
PLM Collaborative Environment Portfolio.
On May 11, 2006, DS announced the completion of the acquisition of MatrixOne
Inc. and the introduction of its new PLM Collaborative Environment portfolio
under the ENOVIA brand name.
o ENOVIA VPLM - 3D Collaborative Virtual Product Lifecycle Management of
highly complex product, resource and manufacturing processes in medium
and large extended enterprises.
o ENOVIA MatrixOne - Collaborative Product Development business processes
for enterprises across a wide range of industries, and including
Synchronicity for semiconductor design data management.
o ENOVIA SmarTeam - Collaborative Product Data Management for small and
mid-sized enterprises, engineering departments of larger organizations,
and across supply chains.
Cash dividend approved by shareholders at Annual Shareholders' Meeting
At the Annual Shareholders' Meeting held on June 14, 2006, DS' shareholders
approved the payment of an annual cash dividend equivalent to (euro)0.42 per
share, representing (euro)48 million in the aggregate, for the fiscal year ended
December 31, 2005.
Strategy, Technology, Customers and Partnerships
In June, DS unveiled its V5 SOA strategy, demonstrating the Company's commitment
to extend the benefits of PLM solutions to new markets as well as new types of
users and communities. V5 SOA is the cornerstone for DS and its partners to
deliver fully collaborative PLM services on demand. V5 SOA is the technical
foundation for DS' PLM brands and partners' solutions moving forward, designed
to bridge the gap between PLM solutions and existing enterprise middleware.
DS introduced ENOVIA 3D Live beta version, the first 3D Collaborative
Intelligence solution, exploiting DS V5 SOA architecture for online
applications. Via an intuitive interface, ENOVIA 3D Live enables any individual
to instantly search and navigate any PLM information, regardless of location,
source or format.
SolidWorks unveiled SolidWorks 2007, powered by revolutionary "SWIFT(TM)"
technology. In addition to more than 200 new features, this latest version of
the leading 3D CAD software introduces SolidWorks Intelligent Feature Technology
("SWIFT(TM)"), which for the first time puts expert-level techniques for 3D
CAD's most challenging design operations in the hands of every user.
ENOVIA MatrixOne announced the latest updates to the MatrixOne Medical Device
Accelerator. The MatrixOne MDA manages Quality System Regulation/ISO-regulated
design processes, projects, documents and data, and is the only medical
device-tailored solution built on an enterprise-class PLM platform that has been
proven effective at the industry's top three device manufacturers.
4
First Half 2006 Financial Summary
o GAAP total revenue of (euro)532.1 million, up 28% as reported for first
half
o Non-GAAP total revenue of (euro)542.0 million, up 30% and 29% in constant
currencies
o Non-GAAP revenue excluding ABAQUS and MatrixOne up 14% in constant
currencies
o GAAP software revenue of (euro)451.1 million, up 30%
o Non-GAAP software revenue of (euro)461.0 million, up 32% and 31% in
constant currencies
o Non-GAAP software revenue excluding ABAQUS and MatrixOne up 17% and up
16% in constant currencies
o GAAP EPS of (euro)0.51; Non-GAAP EPS up 20% to (euro)0.71 with operating
margin of 24.1%
Business Outlook
Thibault de Tersant, Executive Vice President and CFO, stated, "Business
activity was strong in the second quarter and we continue to see stronger
activity for the second half despite some potential signs of softening of the
economic environment globally. Therefore, on a constant currency basis, we are
raising our 2006 revenue growth objective to about 27-28%, compared to our
previous assumption of 25-26%, reflecting higher expected activity of about
(euro)15 million for the full year, including the second quarter
overachievement. At the same time, we are reconfirming our operating margin
objective and increasing our EPS objective slightly.
"Due to the volatile currency environment, we believe it is prudent to update
our exchange rate assumptions for the US dollar and Japanese yen. The higher
activity level expected for the full year and more conservative currency
assumptions largely offset each other on a reported revenue basis."
o Third quarter Non-GAAP total revenue of about (euro)280-285 million,
Non-GAAP EPS of about (euro)0.33-0.34 and Non-GAAP operating margin of
about 22.0%;
o 2006 Non-GAAP total revenue objective of about (euro)1.175-1.185 billion,
representing 27-28% growth in constant currencies ;
o 2006 Non-GAAP operating margin of about 27.0%;
o 2006 Non-GAAP EPS of about (euro)1.77-1.79; +11-13% growth;
o Objectives based upon US$1.30 (previously US$1.25) per (euro)1.00 and JPY
145 (previously JPY 140) per (euro)1.00 exchange rate assumptions for the
third and fourth quarters of 2006.
5
Endnotes:
1. All comparative figures are given on a year-over-year basis unless
specified otherwise. All EPS figures refer to fully diluted earnings per
share, unless otherwise noted.
2. All financial information is unaudited and reported in accordance with
U.S. generally accepted accounting principles (U.S. GAAP). Additional
financial information is also presented that is not in conformity with
U.S. GAAP, in particular the presentation of revenue before deferred
revenue write-downs, and operating income, operating margin and earnings
per share before deferred revenue write-downs and excluding acquisition
costs (acquisition costs are primarily comprised of technology and other
acquired intangible assets amortization in addition to other
acquisition-related costs) and share-based compensation expenses. The
Company believes this information, which is not in conformity with U.S.
GAAP, is helpful supplemental information in order to better understand
its past and future performance. In addition, the Company's management
uses this information in its planning. This information provided by the
Company may not be comparable to similarly titled measures employed by
other companies. The Company has provided in the tables to this press
release and on its website http://www.3ds.com/corporate/investors/
reconciliations between U.S. GAAP and Non-GAAP figures.
3. The Company uses constant currency revenue growth to evaluate its
financial performance in comparison to prior periods and as a measure of
expected growth in planning and setting objectives for future periods.
The Company believes this measure is an important indicator of the
Company's progress and outlook because it provides a better gauge of the
level of change in the business activity as it eliminates any changes
arising from currency fluctuations. The Company believes the presentation
of this measure is relevant and useful for investors because it allows
investors to view revenue growth in a manner similar to the method used
by the Company's management, helps improve investors' ability to
understand the Company's revenue growth, and makes it easier to compare
the Company's results with other companies, including competitors, whose
reporting currency may be different from Dassault Systemes. Constant
currency revenue growth, as calculated by the Company, may not be
comparable to similarly titled measures employed by other companies.
Conference call information
Dassault Systemes will host a teleconference call today, Thursday, July 27, 2006
at 3:00 PM CET/2:00 PM London/9:00 AM New York. The conference call will be
available via the Internet by accessing http://www.3ds.com/corporate/investors/.
Please go to the website at least fifteen minutes prior to the call to register,
download and install any necessary audio software. The webcast teleconference
will be archived for 30 days. Financial information to be discussed in the call
will be available on the Company's website prior to commencement of the
teleconference at http://www.3ds.com/corporate/investors/. Additional investor
information can be accessed at http://www.3ds.com/corporate/investors/ or by
calling Dassault Systemes' Investor Relations at 33.1.40.99.69.24.
Statements above that are not historical facts but express expectations or
objectives for the future, including but not limited to statements regarding
our: a) 2006 revenue growth objective in constant currencies, calculation of a
2006 revenue range, 2006 operating margin outlook and 2006 EPS growth objective,
all such figures before deferred revenue write-downs and excluding acquisition
costs and share-based payments as applicable; and b) third quarter 2006 revenue
objective range, EPS objective and operating margin outlook, all three figures
before deferred revenue write-downs and excluding acquisition costs and
share-based payments, as applicable are forward-looking statements (within the
meaning of Section 21E of the 1934 Securities Exchange Act, as amended). Such
forward-looking statements are based on management's current views and
assumptions and involve known and unknown risks and uncertainties. Actual
results or performances may differ materially from those in such statements due
to, among other factors: (i) currency fluctuations, particularly the value of
the U.S. dollar or Japanese yen with respect to the euro; (ii) reduced corporate
spending on information technology as a result of changing economic or business
conditions that could negatively affect market demand for our products and
services; (iii) difficulties or adverse changes affecting our partners or our
relationships with our partners, including our longstanding, strategic partner,
IBM; (iv) new product developments and technological changes; (v) errors or
defects in our products; (vi) growth in market share by our competitors; and
(vii) the realization of any risks related to the integrations of ABAQUS and
MatrixOne or any other newly acquired company and internal reorganizations.
Unfavorable changes in any of the above or other factors described in the
Company's SEC reports, including the Form 20-F for the year ended December 31,
2005, which was filed with the SEC on June 30, 2006, could materially affect the
Company's financial position or results of operations.
###
6
About Dassault Systemes
As world leader in 3D and Product Lifecycle Management (PLM) solutions, the
Dassault Systemes group brings value to more than 90,000 customers in 80
countries. A pioneer in the 3D software market since 1981, Dassault Systemes
develops and markets PLM application software and services that support
industrial processes and provide a 3D vision of the entire life cycle of
products from conception to maintenance. The Dassault Systemes portfolio
consists of CATIA for designing the virtual product - SolidWorks for 3D
mechanical design - DELMIA for virtual production - SIMULIA for virtual testing
and ENOVIA for global collaborative lifecycle management, including ENOVIA VPLM,
ENOVIA MatrixOne and ENOVIA SmarTeam. Dassault Systemes is listed on the Nasdaq
(DASTY) and Euronext Paris (#13065, DSY.PA) stock exchanges. For more
information, visit: http://www.3ds.com
CATIA, DELMIA, ENOVIA, SIMULIA and SolidWorks are registered trademarks of
Dassault Systemes or its subsidiaries in the US and/or other countries.
(Tables to follow)
CONTACTS:
Dassault Systemes: Financial Dynamics:
Valerie Agathon/Geraldine Nithart-Riva Harriet Keen / Haya Chelhot
33.1.40.99.69.24 44.20.7831.3113
Laurence Desmarais
Nelly Dimey
33.1.47.03.68.10
7
DASSAULT SYSTEMES
NON-GAAP KEY FIGURES
Non-GAAP data exclude the effect of adjusting the carrying value of acquired
companies' deferred revenue, amortization of acquired intangible assets and
share-based compensation expenses.
2nd QUARTER
-----------
in millions of Euro, except per share data, headcount and exchange rates.
2Q06 2Q05 Variation
---------------------- ------------------------ ---------------------------
PLM excluding ENOVIA 182.0 145.2 25%
ENOVIA 47.9 25.5 88%
SolidWorks 56.1 46.6 20%
Revenue 286.0 217.3 32%
Americas 84.2 70.4 20%
Europe 137.2 101.5 35%
Asia 64.6 45.4 42%
Operating Income 70.2 55.2 27%
Operating Margin 24.5% 25.4%
Net Income 43.4 38.1 14%
EPS 0.37 0.33 12%
Closing headcount 6,623 4,944 34%
Average Rate USD per Euro 1.26 1.26 0%
Average Rate JPY per Euro 143.8 135.5 6%
For U.S. GAAP figures please refer to reconciliation tables.
HALF YEAR
---------
in millions of Euro, except per share data, headcount and exchange rates.
1H06 1H05 Variation
---------------------- ------------------------ ---------------------------
PLM excluding ENOVIA 359.4 281.7 28%
ENOVIA 74.2 48.3 54%
SolidWorks 108.4 86.5 25%
Revenue 542.0 416.5 30%
Americas 161.4 125.9 28%
Europe 250.4 195.4 28%
Asia 130.2 95.2 37%
Operating Income 130.7 100.6 30%
Operating Margin 24.1% 24.2%
Net Income 84.1 69.2 22%
EPS 0.71 0.59 20%
Average Rate USD per Euro 1.23 1.29 (4%)
Average Rate JPY per Euro 142.2 136.2 4%
For U.S. GAAP figures please refer to reconciliation tables.
8
DASSAULT SYSTEMES
CONSOLIDATED STATEMENT OF INCOME
DATA PREPARED IN ACCORDANCE WITH U.S. GAAP
(in millions of Euro, except per share data)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
----------------- ----------------- ---------------- -----------------
New licenses revenue 114.1 81.9 203.2 155.6
Recurring licenses and product 123.9 99.0 247.9 192.5
development revenue
----------------- ----------------- ---------------- -----------------
Software revenue 238.0 180.9 451.1 348.1
Service and other revenue 42.0 36.4 81.0 68.4
----------------- ----------------- ---------------- -----------------
Total Revenue (1) (euro) 280.0 (euro) 217.3 (euro) 532.1 (euro) 416.5
Software 12.2 6.6 23.1 12.6
Service and other 36.1 27.3 67.8 55.4
----------------- ----------------- ---------------- -----------------
Total Cost of Revenue (euro) 48.3 (euro) 33.9 (euro) 90.9 (euro) 68.0
Gross Profit (euro) 231.7 euro) 183.4 (euro) 441.2 (euro) 348.5
Research and Development 75.3 60.4 147.8 117.9
Marketing and Sales 73.2 53.3 138.7 102.4
General and Administrative 21.3 14.5 38.4 27.6
Amortization of acquired intangibles 12.2 0.5 19.4 0.8
----------------- ----------------- ---------------- -----------------
Total Research, Selling, Administrative (euro) 182.0 (euro) 128.7 (euro) 344.3 (euro) 248.7
and Acquisition expenses
================= ================= ================ =================
Operating Income (1) (euro) 49.7 (euro) 54.7 (euro) 96.9 (euro) 99.8
Financial revenue and Other (4.0) 3.7 (2.4) 5.8
----------------- ----------------- ---------------- -----------------
Income before income taxes 45.7 58.4 94.5 105.6
Income tax expense (16.3) (20.6) (33.8) (36.9)
----------------- ----------------- ---------------- -----------------
Net Income (1) (euro) 29.4 (euro) 37.8 (euro) 60.7 (euro) 68.7
================= ================= ================ =================
Basic net income per share (euro) 0.26 (euro) 0.34 (euro) 0.53 (euro) 0.61
================= ================= ================ =================
Diluted net income per share (1) (euro) 0.25 (euro) 0.32 (euro) 0.51 (euro) 0.59
================= ================= ================ =================
Basic weighted average shares 115.1 113.7 115.0 113.6
outstanding (in millions)
================= ================= ================ =================
Diluted weighted average shares 118.6 116.9 119.2 116.6
outstanding (in millions)
(1) Non-GAAP total revenue, operating income, net income and diluted EPS would have been as follows:
Total Revenue (euro) 286.0 (euro) 217.3 (euro) 542.0 (euro) 416.5
================= ===========================================================
Operating Income (euro) 70.2 (euro) 55.2 (euro) 130.7 (euro) 100.6
================= ===========================================================
Net Income (euro) 43.4 (euro) 38.1 (euro) 84.1 (euro) 69.2
================= ===========================================================
Diluted net income per share (euro) 0.37 (euro) 0.33 (euro) 0.71 (euro) 0.59
================= ===========================================================
9
Supplemental Disclosures Regarding Non-GAAP Financial Information: Excluding the
effect of adjusting the carrying value of acquired companies' deferred revenue,
amortization of acquired intangible assets and share-based compensation
expenses.
The following table sets forth the Company's Consolidated Statement of Income
Data excluding amortization of acquired intangible assets, the effect of
adjusting the carrying value of acquired companies' deferred revenue, and
share-based compensation expenses for the three months and six months ended June
30, 2006. In particular, the table presents revenue, operating income, operating
margin and earnings per share excluding the effect of adjusting the carrying
value of acquired companies' deferred revenue, amortization of acquired
intangible assets (amortization of acquired intangible assets are primarily
comprised of technology amortization in addition to other acquisition-related
amortization), and share-based compensation expenses.
The Company uses these Non-GAAP measures, among other things, to evaluate the
Company's operating performance and for planning and setting objectives for
future periods. The Company believes these Non-GAAP measures are useful to
investors because they provide an alternative method for measuring the operating
performance of the Company's business by isolating the effect of adjusting the
carrying value of acquired companies' deferred revenue, amortization of acquired
intangible assets, and share-based compensation expenses, which do not impact
the underlying business. In addition, these measures are among the primary
measures used externally by analysts for purposes of valuation and for comparing
operating performance of the Company to other companies in the industry.
Since these measures of performance are not calculated in accordance with U.S.
GAAP, they should not be considered in isolation of, or as a substitute for U.S.
GAAP revenue, operating income, operating margin and earnings per share, as an
indicator of operating performance.
10
DASSAULT SYSTEMES
NON-GAAP CONSOLIDATED STATEMENT OF INCOME
(in millions of Euro, except per share data)
Non-GAAP data exclude the effect of adjusting the carrying value of acquired
companies' deferred revenue, amortization of acquired intangible assets, and
share-based compensation expenses.
Three Months ended
June 30, June 30, Variation
2006 2005
---------------------- --------------------- ---------------
New licenses revenue 114.1 81.9 39.3%
Recurring licenses and product development 129.9 99.0 31.2%
revenue
---------------------- ---------------------
Software revenue 244.0 180.9 34.9%
Service and other revenue 42.0 36.4 15.4%
---------------------- ---------------------
Total Revenue (euro) 286.0 (euro) 217.3 31.6%
Software 12.2 6.6 84.8%
Service and other 35.9 27.3 31.5%
---------------------- ---------------------
Total Cost of Revenue (euro) 48.1 (euro) 33.9 41.9%
Gross Profit (euro) 237.9 (euro) 183.4 29.7%
Research and Development 73.9 60.4 22.4%
Marketing and Sales 72.9 53.3 36.8%
General and Administrative 20.9 14.5 44.1%
---------------------- ---------------------
Total Research, Selling, Administrative. (euro) 167.7 (euro) 128.2 30.8%
====================== =====================
Operating Income (euro) 70.2 (euro) 55.2 27.2%
Financial revenue and Other (4.0) 3.7
---------------------- ---------------------
Income before income taxes 66.2 58.9 12.4%
Income tax expense (22.8) (20.8)
---------------------- ---------------------
Net Income (euro) 43.4 (euro) 38.1 13.9%
====================== =====================
Diluted net income per share (euro) 0.37 (euro) 0.33 12.1%
====================== =====================
Diluted weighted average shares 118.6 116.9
outstanding (in millions)
11
DASSAULT SYSTEMES
CONSOLIDATED STATEMENT OF INCOME
RECONCILIATIONS NON-GAAP / U.S. GAAP
(in millions of Euro, except per share data)
Three Months ended
June 30, 2006 June 30, 2005
------------------------------------------ ------------------------------------------
U.S. GAAP Adjustments Non-GAAP U.S. GAAP Adjustments Non-GAAP
(1) (1)
-------------- ------------- ------------- ------------- -------------- -------------
New licenses revenue 114.1 114.1 81.9 81.9
Recurring licenses and product 123.9 6.0 129.9 99.0 99.0
development revenue
-------------- ------------- ------------- -------------
Software revenue 238.0 244.0 180.9 180.9
Service and other revenue 42.0 42.0 36.4 36.4
-------------- ------------- ------------- -------------
Total Revenue (euro) 280.0 (euro) 286.0 (euro) 217.3 (euro) 217.3
Software 12.2 12.2 6.6 6.6
Service and other 36.1 (0.2) 35.9 27.3 27.3
-------------- ------------- ------------- -------------
Total Cost of Revenue (euro) 48.3 (euro) 48.1 (euro) 33.9 (euro) 33.9
Gross Profit (euro) 231.7 (euro) 237.9 (euro) 183.4 (euro) 183.4
Research and Development 75.3 (1.4) 73.9 60.4 60.4
Marketing and Sales 73.2 (0.3) 72.9 53.3 53.3
General and Administrative 21.3 (0.4) 20.9 14.5 14.5
Amortization of acquired 12.2 (12.2) - 0.5 (0.5) -
intangibles
-------------- ------------- ------------- -------------
Total Research, Selling, (euro) 182.0 (euro) 167.7 (euro) 128.7 (euro) 128.2
Administrative and Acquisition
expenses
============== ============= ============= =============
Operating Income (euro) 49.7 (euro) 70.2 (euro) 54.7 (euro) 55.2
Financial revenue and Other (4.0) (4.0) 3.7 3.7
-------------- ------------- ------------- -------------
Income before income taxes 45.7 66.2 58.4 58.9
Income tax expense (16.3) (6.5) (22.8) (20.6) (0.2) (20.8)
-------------- ------------- ------------- -------------
Net Income (euro) 29.4 (euro) 43.4 (euro) 37.8 (euro) 38.1
============== ============= ============= =============
Diluted net income per share (euro) 0.25 (euro) 0.37 (euro) 0.32 (euro) 0.33
============== ============= ============= =============
Diluted weighted average shares 118.6 118.6 116.9 116.9
outstanding (in millions)
(1) Adjustments include the effect of adjusting the carrying value of acquired
companies' deferred revenue, amortization of acquired intangible assets and
share-based compensation expenses.
12
DASSAULT SYSTEMES
NON-GAAP CONSOLIDATED STATEMENT OF INCOME
(in millions of Euro, except per share data)
Non-GAAP data exclude the effect of adjusting the carrying value of acquired
companies' deferred revenue, amortization of acquired intangible assets, and
share-based compensation expenses.
Six Months ended
June 30, June 30, Variation
2006 2005
---------------------- --------------------- ---------------
New licenses revenue 203.2 155.6 30.6%
Recurring licenses and product development 257.8 192.5 33.9%
revenue
---------------------- ---------------------
Software revenue 461.0 348.1 32.4%
Service and other revenue 81.0 68.4 18.4%
---------------------- ---------------------
Total Revenue (euro) 542.0 (euro) 416.5 30.1%
Software 23.1 12.6 83.3%
Service and other 67.3 55.4 21.5%
---------------------- ---------------------
Total Cost of Revenue (euro) 90.4 (euro) 68.0 32.9%
Gross Profit (euro) 451.6 (euro) 348.5 29.6%
Research and Development 144.9 117.9 22.9%
Marketing and Sales 138.1 102.4 34.9%
General and Administrative 37.9 27.6 37.3%
---------------------- ---------------------
Total Research, Selling, Administrative (euro) 320.9 (euro) 247.9 29.4%
====================== =====================
Operating Income (euro) 130.7 (euro) 100.6 29.9%
Financial revenue and Other (2.4) 5.8
---------------------- ---------------------
Income before income taxes 128.3 106.4 20.6%
Income tax expense (44.2) (37.2)
---------------------- ---------------------
Net Income (euro) 84.1 (euro) 69.2 21.5%
====================== =====================
Diluted net income per share (euro) 0.71 (euro) 0.59 20.3%
====================== =====================
Diluted weighted average shares 119.2 116.6
outstanding (in millions)
13
DASSAULT SYSTEMES
CONSOLIDATED STATEMENT OF INCOME
RECONCILIATIONS NON-GAAP / U.S. GAAP
(in millions of Euro, except per share data)
Six Months ended
June 30, 2006 June 30, 2005
------------------------------------------ ------------------------------------------
U.S. GAAP Adjustments Non-GAAP U.S. GAAP Adjustments Non-GAAP
(1) (1)
-------------- ------------- ------------- ------------- ------------- --------------
New licenses revenue 203.2 203.2 155.6 155.6
Recurring licenses and product 247.9 9.9 257.8 192.5 192.5
development revenue
-------------- ------------- ------------- --------------
Software revenue 451.1 461.0 348.1 348.1
Service and other revenue 81.0 81.0 68.4 68.4
-------------- ------------- ------------- --------------
Total Revenue (euro) 532.1 (euro) 542.0 (euro) 416.5 (euro) 416.5
Software 23.1 23.1 12.6 12.6
Service and other 67.8 (0.5) 67.3 55.4 55.4
-------------- ------------- ------------- --------------
Total Cost of Revenue (euro) 90.9 (euro) 90.4 (euro) 68.0 (euro) 68.0
Gross Profit (euro) 441.2 (euro) 451.6 (euro) 348.5 (euro) 348.5
Research and Development 147.8 (2.9) 144.9 117.9 117.9
Marketing and Sales 138.7 (0.6) 138.1 102.4 102.4
General and Administrative 38.4 (0.5) 37.9 27.6 27.6
Amortization of acquired 19.4 (19.4) - 0.8 (0.8) -
intangibles
-------------- ------------- ------------- --------------
Total Research, Selling, (euro) 344.3 (euro) 320.9 (euro) 248.7 (euro) 247.9
Administrative and Acquisition
expenses
============== ============= ============= ==============
Operating Income (euro) 96.9 (euro) 130.7 (euro) 99.8 (euro) 100.6
Financial revenue and Other (2.4) (2.4) 5.8 5.8
-------------- ------------- ------------- --------------
Income before income taxes 94.5 128.3 105.6 106.4
Income tax expense (33.8) (10.4) (44.2) (36.9) (0.3) (37.2)
-------------- ------------- ------------- --------------
Net Income (euro) 60.7 (euro) 84.1 (euro) 68.7 (euro) 69.2
============== ============= ============= ==============
Diluted net income per share (euro) 0.51 (euro) 0.71 (euro) 0.59 (euro) 0.59
============== ============= ============= ==============
Diluted weighted average shares 119.2 119.2 116.6 116.6
outstanding (in millions)
(1) Adjustments include the effect of adjusting the carrying value of
acquired companies' deferred revenue, amortization of acquired intangible
assets and share-based compensation expenses.
14
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions of Euro)
June 30, 2006 December 31, 2005
--------------------------- --------------------------
ASSETS
Cash and short-term investments 473.5 379.9
Accounts receivable, net 249.5 287.8
Other assets 1,041.6 745.6
--------------------------- --------------------------
Total assets (euro) 1,764.6 (euro) 1,413.3
LIABILITIES
AND SHAREHOLDERS' EQUITY
Long-term debt 202.9 1.5
Other liabilities 566.8 425.7
Shareholders' equity 994.9 986.1
--------------------------- --------------------------
Total liabilities and shareholders' equity (euro) 1,764.6 (euro) 1,413.3
15
DASSAULT SYSTEMES
CONDENSED CASH FLOW STATEMENT
(in millions of Euro)
Three months ended Six months ended
June 30, 2006 June 30, 2005 Variation June 30, 2006 June 30, 2005 Variation
---------------- ---------------- --------------- ---------------- --------------- ------------
Net Profit 29.4 37.8 (8.4) 60.7 68.7 (8.0)
Changes in working
capital and non-cash 34.3 (9.9) 44.2 104.2 49.7 54.5
P&L items
---------------- ---------------- --------------- ---------------- --------------- ------------
Net Cash provided by 63.7 27.9 35.8 164.9 118.4 46.5
operating activities
Acquisition and sale of (6.0) (8.6) 2.6 (13.9) (15.3) 1.4
assets
Acquisitions net of cash (261.9) (18.6) (243.3) (263.4) (23.0) (240.4)
Loans and others 0.0 (0.6) 0.6 1.8 (0.9) 2.7
---------------- ---------------- --------------- ---------------- --------------- ------------
Net Cash provided by
(used in) investing (267.9) (27.8) (240.1) (275.5) (39.2) (236.3)
activities
Borrowing 0.0 0.0 0.0 200.0 0.0 200.0
Share repurchase and
proceeds from stock
option exercise, net 6.6 5.2 1.4 22.7 15.4 7.3
Reimbursement of lease (0.4) 0.0 (0.4) (0.9) 0.0 (0.9)
commitments
Dividend 0.0 (43.1) 43.1 0.0 (43.1) 43.1
---------------- ---------------- --------------- ---------------- --------------- ------------
Net Cash provided by
(used in) financing 6.2 (37.9) 44.1 221.8 (27.7) 249.5
activities (1)
Effect of exchange rate (12.5) 17.5 (30.0) (17.6) 28.0 (45.6)
changes on treasury (2)
================ ================ =============== ================ =============== ============
Increase (Decrease) in (210.5) (20.3) (190.2) 93.6 79.5 14.1
treasury (2)
Treasury (2) at 684.0 652.6 379.9 552.8
beginning of period
Treasury (2) at end of 473.5 632.3 473.5 632.3
period
(1) Excluding changes in short-term investments.
(2) Treasury includes cash, cash equivalents and short-term investments.
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DASSAULT SYSTEMES S.A.
Date: July 27, 2006 By: /s/ Thibault de Tersant
Name: Thibault de Tersant
Title: Executive Vice President,
Finance and Administration