The EDA & MCAD/MCAE Almanac: Q2 2011

“With respect to second half growth comparisons, let me remind you that our 2010 third quarter revenue was well above our historic seasonal revenue trend. For the 2011 third quarter and second half, our objectives incorporate a sequential revenue outlook range in line with historic patterns. Secondly, with respect to recurring revenue, we had an important level of maintenance recoveries in the 2010 second half, as we outlined last year, which were one-time in nature.”

“Overall, we are well positioned going into the second half of the year, and despite the uncertainty of the global economic environment, we have increased confidence in our 2011 financial objectives thanks to our second quarter results.”

The Company’s current objectives* are as follows:

  • Third quarter 2011 non-IFRS* total revenue objective of about €405 to €415 million, non-IFRS operating margin of about 27% and non-IFRS EPS of about €0.60 to €0.65;
  • Upgrading 2011 non-IFRS revenue growth objective range to 11% to 12% in constant currencies; (increasing the reported revenue range to €1.70 to €1.72 billion from €1.67 to €1.70 billion previously);
  • Reconfirming 2011 non-IFRS operating margin slightly in excess of 29%;
  • Upgrading 2011 non-IFRS EPS range to €2.69 to €2.80 from €2.64 to €2.75 previously; representing growth of about 8% to 12% from 6% to 10%, previously;
  • Objectives are based upon exchange rate assumptions for the 2011 second half of US$1.45 per €1.00 and JPY120 per €1.00 and a full year average of US$1.43 per €1.00 and JPY117 per €1.00.

*The Company’s objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below:

The non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2011 currency exchange rates above: deferred revenue write-downs estimated at approximately €1 million for 2011; share-based compensation expense estimated at approximately €15 million for 2011 and amortization of acquired intangibles estimated at approximately €82 million for 2011. The objectives outlined above do not include any impact from other operating income and expense, net principally comprised of acquisition, integration, restructuring and relocation expenses and certain one-time gains in financial revenue and other, net. These estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after July 28, 2011.

Dassault Systèmes self description

As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 130,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes applications provide a 3D vision of the entire lifecycle of products from conception to maintenance to recycling. The Dassault Systèmes portfolio consists of CATIA for designing the virtual product - SolidWorks for 3D mechanical design - DELMIA for virtual production - SIMULIA for virtual testing - ENOVIA for global collaborative lifecycle management, EXALEAD for search-based applications and 3DVIA for online 3D lifelike experiences. For more information, visit http://www.3ds.com.

CATIA, DELMIA, ENOVIA, EXALEAD, SIMULIA, SolidWorks and 3D VIA are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries.

 



 

 

 

On March 14, 2011 the ESI GROUP (Compartment C of NYSE Euronext Paris) reported financial results for its 2010/2011 fiscal year, the period ending January 31, 2011. The chart below was presented first:

It has been the practice of the writer of the MCAD/MCAE Commentary to call the ESI Group’s “Quarter N”, as our nominal “Quarter N+1”. Thus the ESI Group’s fiscal Q4 ending January 31, 2011 was our nominal Q1 2011 for consistent reporting purposes.

By using the annual sales figure of 59 million euros from the above ESI chart reported on March 14, 2011, and subtracting the three previous quarterly revenue amounts, we calculated the nominal Q1 2011 figure for the just-prior June 2011 issue of the MCAD/MCAE Commentary as 34.9 million euros.


Likewise, the report from ESI for its first quarter of 2011/12 published on June 15, 2011 will become our nominal Q2 2011 here for consistent reporting purposes.

 

The ESI Group Headlines for Nominal Q2 2011

  • Sales were up 8.8% over nominal Q2 2010 to €17.3 million, CORRESPONDING TO $US 24.912 MILLION, using the same fx rate as Dassault of 1.44.
  • Further robust organic growth
  • High rate of repeat business for Licenses remained at 81%
  • Substantial increase in Licenses New Business
  • Strong growth in Services activity  

Alain de Rouvray, ESI Group’s Chairman and CEO, comments: “ESI Group enjoyed a good first quarter of 2011/12 (nominal Q2 2011), keeping up the trend of growth seen last fiscal year. The Licenses business achieved strong increase in New Business, while also maintaining a high rate of repeat business.”

“The Services business also showed a vigorous growth. We are pleased with this first quarter (nominal Q2 2011) achievement, which is traditionally weak and not very representative of the full year, and are confident about delivering a robust performance in the full fiscal year.”

Nominal Financial year 2011:

NOTE WELL: The inherent seasonal nature of ESI Group’s Licenses business is traditionally reflected by the majority of full-year revenues being recognized in the fourth quarter of the year.

Sales for nominal Q2 2011 totaled €17.3 million, up +8.8% in actual terms or +7.7% by volume (at constant exchange rates) relative to nominal Q2 2010. The change in the sales breakdown by region shows growth in Europe and the Americas, with a slight drop in sales in Asia due to the renewal of major contracts being put back to the next quarter. Europe therefore accounted for 39% of quarter’s sales, the Americas for 20% and Asia for 41%.

License sales came to €11.6 million, up +5.5% in actual terms or +4.0% by volume. The rate of repeat business remained high at 81% of License sales compared with 80% in the corresponding nominal quarter of 2010. Licenses New Business saw strong growth of +24% thanks to new clients and the sale of new products at existing clients, particularly in Asia and Europe.

In keeping with the trend observed in nominal Q1 2011, the Services business achieved robust growth of +16.1% in actual terms or +15.9% by volume to €5.7 million. Services therefore accounted for 33% of the current quarter’s sales compared with 31% last year.

ESI self description

ESI is a pioneer and world-leading player in virtual prototyping that take into account the physics of materials. ESI has developed an extensive suite of coherent, industry-oriented applications to realistically simulate a product’s behaviour during testing, to fine-tune manufacturing processes in accordance with desired product performance, and to evaluate the environment’s impact on product performance. This offer represents a unique collaborative and open environment for Simulation-Based Design, enabling virtual prototypes to be improved in a continuous and collaborative manner while eliminating the need for physical prototypes during product development. Present in over 30 countries, ESI employs over 800 high-level specialists throughout its worldwide network. ESI Group is listed on compartment C of NYSE Euronext Paris. For further information, go to www.esi-group.com.

 

 





 

 

On July 26, 2011 PTC (NASDAQ: PMTC ) reported results for its third fiscal quarter ended July 2, 2011. This is nominal Q2 2011 for our EDA WEEKLY reporting purposes.

Highlights

  • Nominal Q2 Results:

o    GAAP revenue of $291.783 million and GAAP EPS of $0.13, vs. $242.998 million and $0.09 EPS in nominal Q2 2010. Revenue up 20.08% YOY.

o    Guidance 3 months ago was nominal Q2 2011 range of revenue between $275 to $285 million, and GAAP EPS range of $0.16 to $0.20.

o    Nominal Q2 2011 Net Income of $15.526 million vs. $10.718 Million, up 44.86% year over year.

o    Revenue contribution from MKS Inc, which PTC acquired on May 31, 2011 was $6.0 million on a GAAP basis

o    GAAP operating margin of 8.4% 

o    Relative to nominal Q2 guidance ($275 - $285 million) currency fluctuations negatively impacted revenue by $0.5 million.

  • Nominal Q3 Guidance:

o    GAAP revenue of $318 to $328 million and GAAP EPS of $0.25 to $0.29

o    Assumes $1.45 USD / EURO

  • FY'11 Targets:

o    GAAP revenue of $1,147 to $1,157 million and GAAP EPS of $0.63 to $0.67

 The Q3 GAAP guidance includes a tax rate of 15% and 121 million diluted shares outstanding.

Nominal Q2 2011 Results Commentary

James Heppelmann, president and chief executive officer, commented, "PTC had a strong nominal Q2, with organic revenue of $285.8 million exceeding the high-end of our guidance. Our organic license revenue of $79.4 million was up 18% on a year-over-year basis, an increase from the 15% growth we experienced in nominal Q1 '11. The momentum in our Desktop business continued with 41% year-over-year organic license growth. This was our 6th consecutive quarter of year-over-year improvement in Desktop license revenue and in our Channel business. We were pleased to see the strength of our Enterprise business increase, with organic license revenue up 40% sequentially and note that our year-over-year organic Enterprise license revenue growth reflects the very strong quarter we had in nominal Q2' 10. We also continue to see robust adoption of our PLM solutions, as is reflected in our 22% and 21% year-over-year increases in organic maintenance and services revenue, respectively. Importantly, we continue to experience the dilutive impact of strong Desktop revenue on our Enterprise sales capacity, and as we highlighted at our recent investor event in June, will begin to ramp sales capacity in response to the broadening demand for PTC's products. Overall, we delivered 20% total revenue growth compared to the year ago period." On a constant currency basis, total revenue growth and license revenue growth were both 13% compared to nominal Q2 '10.

"Our momentum in the PLM market continued with the addition of 2 new strategically important 'domino' accounts during nominal Q2," Heppelmann continued. "Since 2009, we have won 27 domino accounts and we continue to expect to win a cumulative total of 30 domino accounts by the end of FY'11. Dominoes represent the largest of many competitive displacement opportunities, and we believe they demonstrate that PTC is gaining share and becoming recognized as the industry leader for both our technology and product development process expertise."

Heppelmann added, "We had 27 large deals (license + services revenue of more than $1 million) in nominal Q2 '11, compared to 24 last quarter and 14 in nominal Q2 '10. We believe this is an indicator of the strength of our pipeline for business opportunities with new and existing customers. During the quarter we recognized revenue from leading organizations such as BAE Systems, ESPRIT Europe GMBH, Force Protection, Jabil, Poclain Hydraulics, Robert Bosch, Sears, the US Department of Energy and Weatherford International."

Jeff Glidden , chief financial officer, commented , "From a profitability standpoint we had a very strong quarter. We delivered $48 million in cash flow from operations during the quarter, and we ended nominal Q2 with $261 million of cash, including $16 million from MKS, flat with the end of nominal Q1. As expected, we resumed our stock buyback program with a total of $40 million in stock repurchased during the quarter."

Outlook Commentary

"With the launch of Windchill 10.0 this spring and Creo 1.0 in June, we have had an exciting year from a product portfolio perspective," said Heppelmann. "In addition, the acquisition of MKS adds important breadth and depth to our already robust product portfolio, and further extends PTC's long-term growth opportunity. Given the market momentum we are experiencing and the extent of our technology leadership position, we remain confident in our ability to achieve our longer-term goal of 20% non-GAAP EPS CAGR through 2014. Based on the market momentum we are seeing, the strength of our pipeline and investment to increase sales capacity, we continue to be excited about our FY'12 growth opportunity. We will provide formal FY'12 guidance when we issue our nominal Q3 results in October."

"For nominal Q3, the GAAP revenue target is $318 to $328 million and the GAAP EPS target is $0.25 to $0.29”.

Other Important Information

We have identified payments by certain business partners in China that raise questions of compliance with laws, including the Foreign Corrupt Practices Act, and/or compliance with the Company's business policies. We are conducting an internal investigation and have voluntarily disclosed this matter to the United States Department of Justice and the Securities and Exchange Commission. Based on the findings to date, we do not believe that these matters will have a material adverse effect on our results of operations or financial condition.

PTC self description

PTC (NASDAQ: PMTC) provides discrete manufacturers with software and services to meet the globalization, time-to-market and operational efficiency objectives of product development. Using the company's PLM and CAD and related solutions, organizations in the Industrial, High-Tech, Aerospace/Defense, Automotive, Retail/Consumer and Life Sciences industries are able to support key business objectives such as reducing costs and shortening lead times while creating innovative products that meet customer needs and comply with industry regulations.

 

 



Stock Prices and Market Caps

No doubt that keen readers of this September 19, 2011 issue of the EDA WEEKLY have already noticed the sets of two 3-month stock price  graphs following the individual presentations of each vendor’s nominal Q2 2011 financials (for each of the G5 EDA vendors as well as for each of the G5 MCAD/MCAE vendors).

As an example, we repeat here the two stock curves for The MCAD/MCAE vendor Parametric Technology Corporation (PTC), whose NASDAQ symbol is PMTC:

 

 



Notice how the value of the PMTC stock traded in the narrow region around $22 to $23 till about mid July 2011, before starting a slight slope downward. Indeed, the green line in the second graph, representing the entire NASDAQ Composite, stayed above 0% even longer before starting down. It wasn’t long before any drift downward from normal valuation impacts was overtaken and accelerated in late July as the right-wing in the US Congress began its dangerous game of brinksmanship over refusing to raise the US debt ceiling. While the debt ceiling was eventually raised, it was at a dear price with respect to future government spending.

The negative antics in Congress arguably started a series of oscillations in the stock markets of the US and elsewhere from which at press time the markets have shown no signs of recovering. Additional bad news, such as the S&P lowering its credit rating of the US Government to AA+ from AAA, and no net new US jobs in August, have kept the downward pressure on the markets, and of course on the stocks of the EDA and MCAD/MCAE vendors reported on in this issue of the EDA WEEKLY. From the graphs in the foregoing that ended on September 02, 2011, all ten of the vendors possessed lower stock prices than at the beginning of June, although 4 of the 10 stocks ended the period with a percentage loss slightly less that the respective index on which each trades (Synopsys, ANSYS, Dassault, and ESI Group).

To add some precision to the information yielded by the aforementioned stock graphs alone, the writer has constructed Table 5 below. For the ten vendors discussed in this issue of the EDA WEEKLY, each vendor’s stock price on or about the beginning of the three month period (more precisely June 7, 2011) is listed , followed by the maximum price achieved during the 3-month period and the date on which it occurred, followed likewise for the lowest price/date, then the price at the end (September 6, 2001), then the ending price as a percentage of the maximum price, the ending price as a percentage of the beginning price, and finally the Market Cap for each vendor on Sept 6, 2011.

For example, Cadence stock stood at $10.44 at the close of trading on June 7, reached a peak price per share of $10.72 about a month later on July 7, sank to a minimum price of $8.12 per share on August 18, and ended on Sept 6 at $8.79 per share. The end price of $8.79 per share of Cadence stock was only 82% of its maximum value of $10.72 reached only two moths earlier; and, the end price of $8.79 was only 84.3% of the price the period started with on June 7 of $10.44. With a Market Capitalization of $2.37 billion on September 6, the worth of Cadence measured by Market Capitalization alone was down by $445,000 over the three months’ elapsed period (assuming the number of shares outstanding on June 7 and on September 6 was the same).

Some vendors did worse than others, of course (Magma, SpringSoft and even Autodesk lost a third of their value measured by Market Capitalization, assuming the number of shares remained the same). While it too lost value, ANSYS did better than the others, giving up only 4% of its Market Cap during the period. If one looks for the least decline in Market Cap percentage from its maximum value during the period, however, Synopsys suffered the least reduction of 7.5%.

Time available before the press deadline does not permit further mining and/or verification of the information in Table 5.


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  • Baitron May 21, 2013
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  • Mike Bradley September 19, 2011
    Reviewed by 'Mike B'

    > "compared to the negative effects of the right wing’s ridiculous opposition in late-July–early-August to raising the US debt ceiling"
    Regardless of my political views, statements like this in an EDA/Semiconductor business report is unprofessional. This is a subjective statement tucked inside a paragraph of facts, with the purpose of making this opinion look like fact.

    Edited by ibsystems on 10/13/11 04:53 PM.



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  • Re: The EDA & MCAD/MCAE Almanac: Q2 2011 October 24, 2011
    Reviewed by 'dlj0811'

    Really helpful!


     


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