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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
February 27, 2007
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AUTODESK, INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-14338 94-2819853
- ------------------------------- ------------ -------------------
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
111 McInnis Parkway
San Rafael, California 94903
(Address of principal executive offices, including zip code)
(415) 507-5000
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On February 27, 2007, Autodesk, Inc. issued a press release reporting selected
financial results for the three months and fiscal year ended January 31, 2007.
The press release is furnished herewith as Exhibit 99.1 and is incorporated
herein by reference.
Non-GAAP Financial Measures
- ---------------------------
To supplement Autodesk's consolidated financial statements presented on a GAAP
basis, the press release furnished herewith as Exhibit 99.1 provides investors
with certain non-GAAP measures, including future non-GAAP operating margins. For
our internal budgeting and resource allocation process, Autodesk's management
uses future non-GAAP operating margins that does not include: (a) the
stock-based compensation impact of SFAS 123R, (b) amortization of purchased
intangibles and purchases of incomplete technology that result in an in-process
research and development expense and (c) certain payments to employees for tax
issues arising from Autodesk's voluntary stock option review. Autodesk's
management uses future non-GAAP operating margins in making operating decisions
because we believe the measures provide meaningful supplemental information
regarding Autodesk's operational potential. In addition, this non-GAAP financial
measure facilitates comparisons to competitors' operating guidance.
As described above, Autodesk excludes the following items from its non-GAAP
measures:
A. Stock compensation impact of SFAS 123R. These expenses consist of
expenses for employee stock options and employee stock purchases under SFAS
123(R). Autodesk excludes stock-based compensation expenses from our non-GAAP
measures primarily because they are non-cash expenses and management finds it
useful to exclude certain non-cash charges to assess the appropriate level of
various operating expenses to assist in budgeting, planning and forecasting
future periods. Further, as Autodesk applies SFAS 123R, we believe that it is
useful to investors to understand the impact of the application of SFAS 123R to
our results of operations.
B. Amortization of purchased intangibles and in-process research and
development expenses. Autodesk incurs amortization of acquisition-related
purchased intangible assets and charges related to in-process research and
development, primarily in connection with its acquisition of certain businesses,
such as Alias in January 2006. The amortization of purchased intangibles from a
business combination is generally a non-cash expense and management finds it
useful to exclude certain non-cash charges to assess the appropriate level of
various operating expenses to assist in budgeting, planning and forecasting
future periods.
C. Reimbursement to employees for tax issues arising from the stock option
review. This expense consists of anticipated payments that may be made to our
employees relating to tax payments they may incur as a result of our voluntary
stock option review. Autodesk excludes these payments from our non-GAAP measures
primarily because it is a non-recurring item and management finds it useful to
exclude certain non-cash charges to assess the appropriate level of various
operating expenses to assist in budgeting, planning and forecasting future
periods.
There are limitations in using non-GAAP financial measures because the non-GAAP
financial measures are not prepared in accordance with generally accepted
accounting principles and may be different from non-GAAP financial measures used
by other companies. In addition, the non-GAAP financial measures are limited in
value because they exclude certain items that may have a material impact upon
our reported financial results. Management compensates for these limitations by
analyzing current and future results on a GAAP basis as well as a non-GAAP basis
and also by providing GAAP operating margin in our earnings release when
accessible. The presentation of non-GAAP financial information is not meant to
be considered in isolation or as a substitute for the directly comparable
financial measures prepared in accordance with generally accepted accounting
principles in the United States. The non-GAAP financial measures are meant to
supplement, and be viewed in conjunction with, GAAP financial measures.
Investors should review the information regarding non-GAAP financial measures
provided in our press release.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
EXHIBIT NO. DESCRIPTION
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99.1 Press release dated as of February 27, 2007, entitled "Autodesk
Reports Record Revenues of $497 Million."
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 hereunto duly authorized.
AUTODESK, INC.
By: /s/ ALFRED J. CASTINO
--------------------------------
Alfred J. Castino
Senior Vice President and
Chief Financial Officer
Date: February 27, 2007
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------
99.1 Press release dated as of February 27, 2007, entitled "Autodesk
Reports Record Revenues of $497 Million."
Exhibit 99.1
AUTODESK REPORTS RECORD REVENUES OF $497 MILLION
SAN RAFAEL, Calif., Feb. 27 /PRNewswire-FirstCall/ -- Autodesk, Inc.
(Nasdaq: ADSK) today reported record quarterly revenues of $497 million, an
increase of 19 percent over the fourth quarter of fiscal 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050415/SFF034LOGO )
"We are pleased to finish another year of outstanding execution and revenue
growth," said Carl Bass, Autodesk president and CEO. "In fiscal 2007, we
delivered revenues of $1.84 billion, nearly double the level of three years ago.
Our fourth quarter growth was driven by strong performance from emerging
economies, our subscription program and, most significantly, record revenues
from our model-based 3D products. Looking to fiscal 2008, we expect Autodesk to
continue to focus on delivering industry-leading 3D design software solutions
that help our customers be more productive, improve quality and foster greater
innovation."
Operational Highlights
Autodesk's performance was driven by robust increases in revenue from
model-based 3D products, maintenance revenue from subscription, and revenue in
the emerging economies. In addition, revenues from crossgrades -- customers
moving from one product to another -- and new seats showed strong growth.
The Company's model-based 3D products, Inventor, Revit and Civil 3D,
continue to increase their market penetration. Combined revenues from these
model-based design products increased 40 percent over the fourth quarter of
fiscal 2006 to a record $121 million or 24 percent of total revenues in the
quarter. In total, Autodesk shipped more than 47,000 commercial seats of 3D in
the quarter including 23,000 seats of Revit, over 15,000 seats of Inventor and
nearly 9,000 seats of Civil 3D.
Once again, emerging economies contributed robust growth in revenues.
Revenues from the emerging economies in Asia Pacific, Eastern Europe, the Middle
East and Latin America increased 44 percent over the fourth quarter of fiscal
2006 to $75 million and represented 15 percent of total revenues in the fourth
quarter.
Maintenance revenues from subscription increased 53 percent compared to the
fourth quarter of fiscal 2006 to $123 million or 25 percent of total revenues.
Continued strength in subscription attach rates and renewal rates drove a $53
million sequential increase in deferred maintenance revenue from subscription.
Total upgrade revenues increased slightly compared to the fourth quarter of
fiscal 2006 driven by a 45 percent increase in crossgrade revenue.
Revenues from new seats increased by 15 percent compared to the fourth
quarter of last year. Revenues from new seats of Revit and Civil 3D increased 95
percent and 26 percent, respectively, compared to the fourth quarter of fiscal
2006. Revenues from new seats of AutoCAD Mechanical and Inventor Professional
increased by 68 percent and 62 percent, respectively, compared to the fourth
quarter of last year. Revenues from new seats of flame increased by over 100
percent compared to the fourth quarter of fiscal 2006.
OTHER FINANCIAL HIGHLIGHTS
* Cash, cash equivalents and marketable securities increased by $181
million sequentially to $778 million as of January 31, 2007.
* Total backlog was $415 million as of January 31, 2007, including $398
million of deferred revenues. Deferred maintenance revenues from
subscription increased $53 million sequentially to $328 million. In
addition, there was $17 million of unshipped product orders, or
shippable backlog, at quarter end.
* Channel inventory decreased sequentially and was below the normal
range of three to four weeks.
* As a result of strong subscription bookings in the quarter, DSO's
increased to 55 days.
* Capital expenditures were $10 million.
* As a result of the voluntary review of the Company's historical stock
option granting practices and the related accounting, the Company did
not issue or repurchase any shares during the quarter.
* There were approximately 231 million total shares outstanding and 244
million diluted shares outstanding in the fourth quarter.
* Revenues in the Americas increased 15 percent over the fourth quarter
of fiscal 2006 to $203 million.
* Revenues in EMEA increased 26 percent over the fourth quarter of
fiscal 2006 to $189 million.
* Revenues in Asia Pacific increased 18 percent over the fourth quarter
of fiscal 2006 to $105 million. Revenues in Japan decreased three
percent compared to last year. Excluding Japan, revenues in Asia
Pacific increased 34 percent compared to last year.
* In the fourth quarter of fiscal 2007, spending on total costs and
expenses -- which include cost of license and other revenue, cost of
maintenance revenues, marketing and sales, research and development,
and general and administrative -- increased by $5 million
sequentially.
* Spending related to the voluntary stock option review included $3
million in legal, tax and accounting fees.
* Interest and other income decreased by $2 million sequentially to $4
million.
Fiscal 2007 Full Year Review
Revenues for fiscal 2007 increased 21 percent over fiscal 2006 to $1.84
billion, driven by strength in revenues from model-based 3D products, new seat
revenue, maintenance revenue from subscription, and revenue in the emerging
economies. Combined revenues from the Company's model-based 3D products
increased 41 percent over fiscal 2006 to a record $399 million. In total,
Autodesk shipped nearly 150,000 commercial seats of 3D including nearly 70,000
seats of Revit, nearly 48,000 seats of Inventor and nearly 31,000 seats of Civil
3D.
Revenue from the emerging economies in Asia Pacific, Eastern Europe, the
Middle East and Latin America increased 39 percent over fiscal 2006 to $258
million.
Revenue from new seats increased 19 percent over fiscal 2006. Maintenance
revenue from subscription increased 53 percent in fiscal 2007 to $424 million.
Because Autodesk has not yet filed its second and third quarter fiscal 2007
financial statements, several adjustments have been made to the financial
results of the second and third quarters of fiscal 2007. Events that occurred
subsequent to these quarters provided additional information which differed from
the estimates that were originally provided. The changes result in a decrease in
our after-tax GAAP expenses for the second quarter of $13.6 million and an
increase in our GAAP expenses for the third quarter of $2.6 million. On a
Non-GAAP basis, these adjustments decreased our after-tax spending for the
second and third quarters of fiscal 2007 by $2.9 million and $0.7 million,
respectively. Please refer to the table below for a reconciliation of the
Non-GAAP to GAAP results.
Reconciliation of GAAP Subsequent Event Adjustments to Non-GAAP Subsequent
Event Adjustments
Q2 Q3
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Amounts in millions, net of tax
GAAP adjustments $ 13.6 $ (2.6)
Settlement-based reversal of legal accrual (9.9) (2.3)
Tax benefit and rate true-up (0.8) (0.4)
SFAS 123R termination-related
modifications -- 6.0
Non-GAAP adjustments $ 2.9 $ 0.7
Business Outlook
The following statements are forward-looking statements which are based on
current expectations and which involve risks and uncertainties some of which are
set forth below. As a result of the voluntary stock option review, the Company
is not providing EPS guidance at this time. Additionally, because accounting
related to the restatement of its financial statements is being finalized as a
result of the voluntary stock option review, as described below, the Company is
not able to provide GAAP operating margins for fiscal 2008 at this time.
First Quarter Fiscal 2008
Net revenues for the first quarter of fiscal 2008 are expected to be in the
range of $490 million to $500 million. Non-GAAP operating margins for the first
quarter of fiscal 2008 are expected to be in the range of 25.5 to 26.3 percent.
Non-GAAP operating margins do not include SFAS 123R stock-based compensation
expenses, which the Company is currently unable to determine but believes will
be significant, amortization of acquisition related intangibles of approximately
$4 million, and reimbursement to employees for tax issues arising from the stock
option review, which the Company is currently unable to estimate but believes to
be significant. Company estimates include approximately $4 million in the first
quarter of fiscal 2008 for legal, tax and accounting fees related to the
voluntary stock option review period.
Second Quarter Fiscal 2008
Net revenues for the second quarter of fiscal 2008 are expected to be in
the range of $505 million to $515 million. Non-GAAP operating margins for the
second quarter of fiscal 2008 are expected to be in the range of 25.5 to 26.3
percent. Non-GAAP operating margins do not include SFAS 123R stock-based
compensation expenses, which the Company is currently unable to determine but
believes will be significant, amortization of acquisition related intangibles of
approximately $4 million, and reimbursement to employees for tax issues arising
from the stock option review, which the Company is currently unable to estimate
but believes to be significant.
Full Year Fiscal 2008
For fiscal year 2008, net revenues are expected to be between $2.075
billion and $2.125 billion.
Not taking into account SFAS 123R stock-based compensation expenses, which
the Company is currently unable to determine but believes will be significant,
amortization of acquisition related intangibles of approximately $16 million,
and reimbursement to employees for tax issues arising from the stock option
review, which the Company is currently unable to estimate but believe to be
significant, non-GAAP operating margins for fiscal year 2008 are expected to be
in the range of 27 to 27.5 percent. In addition, the Company now expects its
fiscal 2008 tax rate to be between 25 and 26 percent.
Stock Option Review
In a separate announcement, the Company today announced that the Audit
Committee of Autodesk's Board of Directors has completed its voluntary review of
the Company's stock option grant practices. As a result of the findings of the
voluntary review, the Board of Directors has concluded that the consolidated
balance sheets as of January 31, 2002, 2003, 2004, 2005 and 2006, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the fiscal years ended January 31, 2003, 2004, 2005 and 2006 should
no longer be relied upon. As a result, the Company expects to restate its
previously-issued financial statements for fiscal years 2003 through 2006, to
make adjustments related to accounting for stock-based compensation expense. The
Company currently estimates that the pre-tax, non-cash charges to be incurred
are in the range of $38 million to $45 million for stock-based compensation
expense over the 18 year period of the review. Approximately $23 million to $26
million of the restated amounts will apply to income statement for fiscal years
2003 through 2006, and the remainder, which is applicable to prior fiscal years,
will be recorded as a charge to be retained earnings as of January 31, 2002. The
adjustment for the first quarter of fiscal 2007 will be recorded in the second
quarter of fiscal 2007 due to its insignificance. Ernst & Young, LLP has not yet
completed its procedures with regard to the Company's restated financial
statements. More information is available in the press release and Form 8-K
filed today, February 27, 2007.
Safe Harbor Statement
This press release contains forward-looking statements that involve risks
and uncertainties, including statements in the paragraphs under "Business
Outlook" above, statements in the paragraphs under "Stock Option Review" above,
statements regarding anticipated market trends and other statements regarding
our expected performance. Factors relating to the voluntary stock option review
described above that could cause actual results to differ materially include,
but are not limited to: the discovery of additional information relevant to the
review, any additional conclusions of the Audit Committee (and the timing of
such conclusions) concerning matters relating to the Company's stock option
grants and the impact of the review on the amount and timing of previously
awarded stock-based compensation and other additional expenses to be recorded,
the timing of review and conclusions of the Company's independent registered
public accounting firm regarding the Company's stock option grants and related
accounting adjustments to the Company's financial statements for certain
periods, the application of accounting or tax principles in an unanticipated
manner, an unanticipated delay in the preparation and filing of the Company's
required reports with the SEC or an inability to meet the requirements of the
NASDAQ Global Select Market for continued listing of its shares. The stock
option grant practices under review and related matters have led and could also
lead to potential claims and proceedings relating to such matters, including
shareholder or employee litigation and action by the SEC and/or other regulatory
agencies, and negative tax or other implications for the Company resulting from
any accounting adjustments or other factors.
Other factors that could cause actual results to differ materially include
the following: general market and business conditions, expenses, resulting from
the voluntary stock option review, our performance in particular geographies,
fluctuations in our tax rate, the timing and degree of expected investments in
growth opportunities, slowing momentum in maintenance or subscription revenues,
changes in the timing of product releases and retirements, failure of key new
applications to achieve anticipated levels of customer acceptance, difficulties
encountered in integrating new or acquired businesses and technologies, failure
to achieve sufficient sell-through in our channels for new or existing products,
pricing pressure, fluctuation in foreign currency exchange rates, failure to
achieve continued cost reductions and productivity increases, failure to achieve
continued migration from 2D products to 3D products, failure to achieve
continued success in technology advancements, the financial and business
condition of our reseller and distribution channels, interruptions or
terminations in the business of the Company's consultants or third party
developers, and unanticipated impact of accounting for technology acquisitions.
Further information on potential factors that could affect the financial
results of Autodesk are included in the Company's reports on Form 10-K for the
year ended January 31, 2006 and Form 10-Q for the quarter ended April 30, 2006
which are on file with the Securities and Exchange Commission. Autodesk does not
assume any obligation to update the forward-looking statements provided to
reflect events that occur or circumstances that exist after the date on which
they were made.
Earnings Conference Call and Webcast
Autodesk will host its fourth quarter conference call today at 5:00 p.m.
EST. The live announcement may be accessed at www.autodesk.com/investors or by
dialing 866-203-2528 or 617-213-8847 (passcode: 10432828). An audio webcast or
podcast of the call will be available at 7:00 pm EST at
www.autodesk.com/investors. This replay will be maintained on our website for at
least twelve months. An audio replay will also be available for one month
beginning at 7:00 pm EST by dialing 888-286-8010 or 617-801-6888 (passcode:
43703753).
About Autodesk
Autodesk, Inc. is the world leader in 2D and 3D design software for the
manufacturing, building and construction, and media and entertainment markets.
Since its introduction of AutoCAD in 1982, Autodesk has developed the broadest
portfolio of state-of-the-art digital prototyping solutions to help customers
experience their ideas before they are real. Fortune 1000 companies rely on
Autodesk for the tools to visualize, simulate and analyze real-world performance
early in the design process to save time and money, enhance quality and foster
innovation. For additional information about Autodesk, visit
http://www.autodesk.com/.
Note: AutoCAD, Autodesk, Civil 3D, Inventor, flame, and Revit are
registered trademarks or trademarks of Autodesk, Inc., in the USA and/or other
countries. All other brand names, product names or trademarks belong to their
respective holders.
Investors: Sue Pirri, sue.pirri@autodesk.com, 415-507-6467
John Clancy, john.clancy@autodesk.com, 415-507-6373
Press: Caroline Kawashima, caroline.kawashima@autodesk.com,
415-547-2498
Autodesk
Fiscal Year 2007 QTR 1 QTR 2 QTR 3 QTR 4 YTD2007
- ----------------------------------------------- ------------- ------------- ------------- ------------- -------------
Financial Statistics (in millions):
Total net revenues $ 436 $ 450 $ 457 $ 497 $ 1,840
License and other revenues $ 349 $ 346 $ 346 $ 375 $ 1,416
Maintenance revenues $ 87 $ 104 $ 111 $ 123 $ 424
Total Cash and Marketable Securities $ 386 $ 468 $ 597 $ 778 $ 778
Days Sales Outstanding 58 52 51 55 55
Capital Expenditures $ 11 $ 7 $ 7 $ 10 $ 35
GAAP Depreciation and Amortization $ 13 $ 14 $ 13 $ 14 $ 53
Revenue by Geography (in millions):
Americas $ 170 $ 168 $ 194 $ 203 $ 735
Europe $ 164 $ 174 $ 160 $ 189 $ 687
Asia/Pacific $ 101 $ 108 $ 103 $ 105 $ 418
Revenue by Division (in millions):
Design Solutions Segment $ 387 $ 389 $ 390 $ 430 $ 1,595
Platform Technology Division and other $ 207 $ 201 $ 197 $ 201 $ 806
Manufacturing Solutions Division $ 75 $ 76 $ 85 $ 98 $ 333
Building Solutions Division $ 53 $ 57 $ 58 $ 74 $ 242
Infrastructure Solutions Division $ 51 $ 55 $ 50 $ 57 $ 214
Media and Entertainment Segment $ 47 $ 59 $ 64 $ 65 $ 234
Other Revenue Statistics:
% of Total Rev from AutoCAD, AutoCAD
upgrades and AutoCAD LT 44% 41% 38% 37% 40%
% of Total Rev from 3D design products 20% 20% 22% 24% 22%
% of Total Rev from Emerging Economies 12% 13% 15% 15% 14%
Upgrade Revenue (in millions) $ 75 $ 49 $ 51 $ 78 $ 253
Deferred Maintenance Revenue (in millions):
Deferred Maintenance Revenue Balance $ 252 $ 264 $ 275 $ 328 $ 328
Favorable (Unfavorable)
Impact of U.S. Dollar
Translation Relative
to Foreign Currencies
Compared to Comparable
Prior Year Period (in millions):
Total Net Revenues $ (19) $ (2) $ 6 $ 16 $ 1
Common Stock Statistics:
Shares Outstanding 231,296,000 230,523,000 230,919,000 231,166,000 230,741,000
Fully Diluted Shares Outstanding 244,698,000 243,119,000 242,029,000 243,861,000 243,172,000
Shares Repurchased 1,700,000 2,498,000 -- -- 4,198,000
Installed Base Statistics:
AutoCAD
Total
AutoCAD-based
Installed Base 3,928,000 3,987,000 4,056,000 4,114,000 4,114,000
Stand-alone AutoCAD 2,758,000
AutoCAD Mechanical 200,000
AutoCAD Map 245,000
Architectural Desktop 494,000
Land Desktop 79,000
AutoCAD LT Installed Base 3,335,000
Total Inventor Installed Base 578,000 610,000 643,000 676,000 676,000
Total Subscription Installed Base 990,000 1,086,000 1,163,000 1,232,000 1,232,000
SOURCE Autodesk, Inc.
-0- 02/27/2007
/CONTACT: investors, Sue Pirri, +1-415-507-6467, or
sue.pirri@autodesk.com, or John Clancy, +1-415-507-6373, or
john.clancy@autodesk.com, or press, Caroline Kawashima,
+1-415-547-2498, or caroline.kawashima@autodesk.com, all of Autodesk, Inc./
/Photo: http://www.newscom.com/cgi-bin/prnh/20050415/SFF034LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com/
/Web site: http://www.autodesk.com/
(ADSK)