UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K/A
Amendment
No. 2
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported)
August
13, 2009
Autodesk,
Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
000-14338
|
94-2819853
|
||
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer
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):
|
r
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
r
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
r
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
r
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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EXPLANATORY
NOTE
This
Amendment No. 2 to Form 8-K (the “Amendment”) is being filed to amend Item
9.01 of the Current Report on Form 8-K filed by Autodesk, Inc. (the “Company”)
on August 13, 2009, as amended on August 17, 2009 (the “Original Filing”).
This amendment corrects the “Deferred Maintenance Revenue Balance” line item in
the “QTR 1” column of the Fiscal Year 2010 Other Supplemental Financial
Information sheets from $458 million to $469 million (note that overall deferred
revenue balance of $534 million for the quarter ended April 30, 2009 is correct
and did not change in the Amendment). In all other respects, the information
contained in the Original Filing, as amended, remains unchanged and is
being provided in the Amendment for convenience only.
Item 2.02.
Results of Operations and Financial Condition.
On August
13, 2009, Autodesk, Inc. (“Autodesk” or the “Company”) issued a press release
and prepared remarks reporting financial results for the second quarter ended
July 31, 2009. The press release and prepared remarks are furnished
herewith as Exhibit 99.1 and Exhibit 99.2, respectively, and are
incorporated herein by reference.
These
exhibits shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
Non-GAAP Financial
Measures
To
supplement Autodesk’s consolidated financial statements presented on a GAAP
basis, the press release and prepared remarks furnished herewith as
Exhibit 99.1 and Exhibit 99.2, respectively, provide investors with
certain non-GAAP measures, including but not limited to historical non-GAAP net
earnings and historical and future non-GAAP net earnings per diluted share. For
our internal budgeting and resource allocation process, Autodesk’s management
uses these non-GAAP measures that do not include: (a) the stock-based
compensation impact of SFAS 123R, (b) amortization of purchased
intangibles and purchases of technology, including in-process research and
development, (c) goodwill impairment, (d) establishment of a valuation
allowance on certain net deferred tax assets, (e) restructuring charges and
(f) the income tax effects on the difference between GAAP and non-GAAP
costs and expenses. Autodesk’s management uses these non-GAAP
measures in making operating decisions because we believe the measures provide
meaningful supplemental information regarding Autodesk’s earning potential. In
addition, these non-GAAP financial measures facilitate comparisons to our and
our competitors’ historical results and 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-based compensation under SFAS 123R. 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.
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 and technologies. The amortization of purchased intangibles
varies depending on the level of acquisition activity, and management finds it
useful to exclude these variable charges to assess the appropriate level of
various operating expenses to assist in budgeting, planning and forecasting
future periods.
C. Goodwill impairment. This is
a non-cash charge to write-down goodwill to fair value when there was an
indication that the asset was impaired. As explained above, 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.
D. Establishment of a valuation
allowance on certain net deferred tax assets. This is a non-cash charge
to record a valuation allowance on certain deferred tax assets. As explained
above, management finds it useful to exclude certain non-cash charges to assess
the appropriate level of various expenses to assist in budgeting, planning and
forecasting future periods.
E. Restructuring charges. These
expenses are associated with realigning our business strategies based on current
economic conditions. In connection with these restructuring actions, we
recognize costs related to termination benefits for former employees whose
positions were eliminated, and the closure of facilities and cancelation of
certain contracts. We exclude these charges because these expenses are not
reflective of ongoing operating results in the current period.
F. Income tax effects. The
income tax effects that are excluded from the non-GAAP measures relate to the
tax impact on the difference between GAAP and non-GAAP costs and expenses,
primarily due to differences in the timing of when income tax benefits are
recognized for stock compensation and purchased intangibles for GAAP and
non-GAAP measures.
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 measures in our earnings release and prepared
remarks. 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 and prepared remarks.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press
release dated as of August 13, 2009, entitled “Autodesk Reports Second
Quarter fiscal 2010 Financial
Results.”
|
|
99.2
|
Prepared
Remarks dated as of August 13,
2009.
|
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/ Mark J.
Hawkins
|
|
|
Mark
J. Hawkins
Executive
Vice President and Chief Financial
Officer
|
||
Date: August
27, 2009
EXHIBIT
INDEX
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press
release dated as of August 13, 2009, entitled “Autodesk Reports Second
Quarter fiscal 2010 Financial
Results.”
|
|
99.2
|
Prepared
Remarks dated as of August 13,
2009.
|
|
Investors:
|
David
Gennarelli,david.gennarelli@autodesk.com
, 415-507-6033
|
|
Press:
|
Pam Pollace, pam.pollace@autodesk.com , 415-547-2441 |
| Michael Cabot, michael.cabot@autodesk.com , 415-547-2439 | |
SAN RAFAEL, Calif., August 13,
2009-- Autodesk, Inc.
(NASDAQ: ADSK) today reported financial results for the second quarter of fiscal
2010.
|
·
|
Revenue
was $415 million, a decrease of three percent sequentially and 33 percent
compared to the second quarter of fiscal
2009.
|
|
·
|
GAAP
diluted earnings per share were $0.05, compared to a GAAP diluted loss per
share of $0.14 in the first quarter of fiscal 2010 and GAAP diluted
earnings per share of $0.39 in the second quarter of fiscal
2009.
|
|
·
|
Non-GAAP
diluted earnings per share were $0.24, compared to $0.18 per diluted share
in the first quarter of fiscal 2010 and $0.56 per diluted share in the
second quarter of fiscal 2009. A reconciliation of the GAAP and
non-GAAP results is provided in the tables within this press
release.
|
“Revenue
results for the quarter were in-line with our expectations and continue to
reflect a challenging global business environment," said Carl Bass , Autodesk
president and CEO. “We are pleased with the progress we’ve made to
increase our efficiency and reduce our overall cost structure and as a result,
we increased our profitability on a sequential basis.”
Operational
Overview
By
geography, revenue in the Americas decreased 21 percent compared to the second
quarter of fiscal 2009, to $159 million. Americas revenue declined
two percent sequentially. EMEA revenue was $157 million, a decrease
of 41 percent over the second quarter of fiscal 2009 as reported, and 32 percent
on a constant currency basis. EMEA revenue declined six percent sequentially as
reported. Revenue in Asia Pacific was $99 million, a decrease of 34
percent over the second quarter of fiscal 2009 as reported and 35 percent on a
constant currency basis. Revenue from Asia Pacific increased three
percent sequentially as reported. Revenue from emerging economies was
$63 million, a decrease of 45 percent compared to the second quarter of fiscal
2009, and a six percent sequential increase as reported. Revenue from
emerging economies represented 15 percent of total revenue.
Combined
revenue from Autodesk's model-based 3D design solutions was $124 million, a
decrease of 25 percent compared to the second quarter of fiscal 2009 and a two
percent sequential increase. Revenue from 2D horizontal and vertical
products was $194 million, a decrease of 38 percent compared to the second
quarter of fiscal 2009 and six percent sequentially. Combined revenue from
AutoCAD and AutoCAD LT declined 39 percent compared to the second quarter last
year and seven percent sequentially.
Autodesk
posted quarterly sequential revenue growth in several areas including emerging
economies, revenue from our manufacturing business segment, revenue in Asia
Pacific, revenue from our model-based 3D design solutions and revenue from 3D
animation software. Autodesk has more than $1 billion in cash and
investments and no debt.
“The
current business environment and general business visibility remain
challenging,” continued Bass. “However, we are encouraged by
sequential revenue growth we posted in several areas and are beginning to
see some positive indicators in our business.”
Business
Outlook
The
following statements are forward-looking statements that are based on current
expectations and which involve risks and uncertainties some of which are set
forth below.
Third
Quarter Fiscal 2010
Net
revenue for the third quarter of fiscal 2010 is expected to be in the range of
$400 million and $420 million. GAAP earnings per diluted share are expected to
be in the range of $0.04 and $0.09. Non-GAAP earnings per diluted share are
expected to be in the range of $0.18 and $0.23 and exclude $0.07 related to
stock-based compensation expense, $0.05 for the amortization of acquisition
related intangibles, and restructuring related charges of $0.02.
Update
on Spend Reduction Initiatives
Based on
the progress the company made in the first half of fiscal 2010 with its expense
reduction initiatives, Autodesk now anticipates nearly $300 million in pre-tax
cost savings in fiscal 2010 as compared to fiscal 2009.
Earnings
Conference Call and Webcast
Autodesk
will host its second quarter conference call today at 5:00 p.m. EDT. The live
broadcast can be accessed at http://www.autodesk.com/investors. Supplemental
financial information and prepared remarks for the conference call will be
posted to the investor relations section of our website simultaneously with this
press release.
2
NOTE: The prepared remarks
will not be read on the conference call. The conference call will
include only brief remarks followed by questions and answers.
A replay
of the broadcast will be available at 7:00 pm EDT at
http://www.autodesk.com/investors. This replay will be maintained on our website
for at least twelve months.
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 regarding anticipated market and economic trends, cost
savings, timing of certain charges and other statements regarding our expected
strategies, market position, performance and results. Other factors
that could cause actual results to differ materially include the
following: general market, economic and business conditions, our
performance in particular geographies, including emerging economies, the
financial and business condition of our reseller and distribution channels,
fluctuation in foreign currency exchange rates, failure to achieve planned cost
reductions and productivity increases, slowing momentum in maintenance revenues,
failure to achieve sufficient sell-through in our channels for new or existing
products, pricing pressure, failure to achieve continued migration from 2D
products to 3D products, difficulties encountered in integrating new or acquired
businesses and technologies, the inability to identify and realize the
anticipated benefits of acquisitions, unexpected fluctuations in our tax rate,
the timing and degree of expected investments in growth opportunities, changes
in the timing of product releases and retirements, failure of key new
applications to achieve anticipated levels of customer
acceptance, failure to achieve continued success in technology
advancements, interruptions or terminations in the business of Autodesk
consultants, and any unanticipated impact of accounting for
acquisitions.
Further
information on potential factors that could affect the financial results of
Autodesk are included in Autodesk’s reports on Form 10-K for the year ended
January 31, 2009 and Form 10-Q for the quarter ended April 30, 2009, which are
on file with the U.S. 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.
About
Autodesk
Autodesk, Inc. is a
world leader in 2D and 3D design software
for the manufacturing, construction, and media and entertainment markets. Since
its introduction of AutoCAD software 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 built. 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
www.autodesk.com.
Autodesk,AutoCAD
and AutoCAD LT, are registered trademarks or trademarks of Autodesk, Inc.,
and/or its subsidiaries and/or affiliates in the USA and/or other countries. All
other brand names, product names, or trademarks belong to their respective
holders. Autodesk reserves the right to alter product offerings and
specifications at any time without notice, and is not responsible for
typographical or graphical errors that may appear in this document.
©
2009 Autodesk, Inc. All rights reserved.
3
Autodesk,
Inc.
Consolidated
Statements of Operations
(In
millions, except per share data)
|
Three Months
Ended
|
Six Months
Ended
|
|||||||||||||||
|
July 31,
|
July 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
Net
revenue:
|
||||||||||||||||
|
License and
other
|
$ | 231.0 | $ | 440.2 | $ | 474.6 | $ | 872.4 | ||||||||
|
Maintenance
|
183.9 | 179.3 | 366.1 | 345.9 | ||||||||||||
|
Total net
revenue
|
414.9 | 619.5 | 840.7 | 1,218.3 | ||||||||||||
|
Cost of license and other
revenue
|
47.1 | 57.6 | 96.6 | 113.6 | ||||||||||||
|
Cost of maintenance
revenue
|
3.0 | 2.1 | 5.8 | 4.1 | ||||||||||||
|
Total cost of
revenue
|
50.1 | 59.7 | 102.4 | 117.7 | ||||||||||||
|
Gross
profit
|
364.8 | 559.8 | 738.3 | 1,100.6 | ||||||||||||
|
Operating
Expenses:
|
||||||||||||||||
|
Marketing and
sales
|
176.4 | 230.2 | 360.3 | 455.7 | ||||||||||||
|
Research and
development
|
109.8 | 154.8 | 231.4 | 300.4 | ||||||||||||
|
General and
administrative
|
49.5 | 56.0 | 99.5 | 105.8 | ||||||||||||
|
Impairment of
goodwill
|
- | - | 21.0 | - | ||||||||||||
|
Restructuring
charges
|
26.4 | - | 42.9 | - | ||||||||||||
|
Total operating
expenses
|
362.1 | 441.0 | 755.1 | 861.9 | ||||||||||||
|
Income (loss) from
operations
|
2.7 | 118.8 | (16.8 | ) | 238.7 | |||||||||||
|
Interest and other income,
net
|
10.7 | 6.3 | 10.7 | 13.2 | ||||||||||||
|
Income (loss) before income
taxes
|
13.4 | 125.1 | (6.1 | ) | 251.9 | |||||||||||
|
Provision for income
taxes
|
(2.9 | ) | (35.3 | ) | (15.6 | ) | (67.5 | ) | ||||||||
|
Net income
(loss)
|
$ | 10.5 | $ | 89.8 | $ | (21.7 | ) | $ | 184.4 | |||||||
|
Basic net income (loss) per
share
|
$ | 0.05 | $ | 0.40 | $ | (0.09 | ) | $ | 0.82 | |||||||
|
Diluted net income (loss) per
share
|
$ | 0.05 | $ | 0.39 | $ | (0.09 | ) | $ | 0.80 | |||||||
|
Shares used in computing
basic
|
||||||||||||||||
|
net income (loss) per
share
|
228.9 | 224.2 | 228.0 | 225.2 | ||||||||||||
|
Shares used in computing
diluted
|
||||||||||||||||
|
net income (loss) per
share
|
232.3 | 231.1 | 228.0 | 232.1 | ||||||||||||
4
Autodesk,
Inc.
Condensed
Consolidated Balance Sheets
(In
millions)
|
July 31,
|
January 31,
|
|||||||
|
2009
|
2009
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS:
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 668.5 | $ | 917.6 | ||||
|
Marketable
securities
|
267.9 | 63.5 | ||||||
|
Accounts receivable,
net
|
223.9 | 316.5 | ||||||
|
Deferred income
taxes
|
48.3 | 31.1 | ||||||
|
Prepaid expenses and other current
assets
|
58.7 | 59.3 | ||||||
|
Total current
assets
|
1,267.3 | 1,388.0 | ||||||
|
Marketable
securities
|
92.3 | 7.6 | ||||||
|
Computer equipment, software,
furniture and leasehold improvements, net
|
118.3 | 120.6 | ||||||
|
Purchased technologies,
net
|
96.7 | 113.3 | ||||||
|
Goodwill
|
525.5 | 542.5 | ||||||
|
Long term deferred income taxes,
net
|
92.7 | 125.7 | ||||||
|
Other
assets
|
118.3 | 123.0 | ||||||
| $ | 2,311.1 | $ | 2,420.7 | |||||
|
LIABILITIES AND STOCKHOLDERS'
EQUITY:
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 56.7 | $ | 62.4 | ||||
|
Accrued
compensation
|
88.4 | 124.3 | ||||||
|
Accrued income
taxes
|
17.9 | 16.7 | ||||||
|
Deferred
revenue
|
424.4 | 438.8 | ||||||
|
Borrowings under line of
credit
|
- | 52.1 | ||||||
|
Other accrued
liabilities
|
74.3 | 105.8 | ||||||
|
Total current
liabilities
|
661.7 | 800.1 | ||||||
|
Deferred
revenue
|
77.5 | 113.3 | ||||||
|
Long term income taxes
payable
|
122.5 | 116.9 | ||||||
|
Long term deferred income
taxes
|
- | 22.7 | ||||||
|
Other
liabilities
|
64.3 | 57.0 | ||||||
|
Commitments and
contingencies
|
||||||||
|
Stockholders'
equity:
|
||||||||
|
Preferred
stock
|
- | - | ||||||
|
Common stock and additional
paid-in capital
|
1,166.6 | 1,080.4 | ||||||
|
Accumulated other comprehensive
loss
|
(1.4 | ) | (11.2 | ) | ||||
|
Retained
earnings
|
219.9 | 241.5 | ||||||
|
Total stockholders'
equity
|
1,385.1 | 1,310.7 | ||||||
| $ | 2,311.1 | $ | 2,420.7 | |||||
5
Autodesk,
Inc.
Condensed
Consolidated Statements of Cash Flows
(In
millions)
|
Six Months
Ended
|
||||||||
|
July 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
(Unaudited)
|
||||||||
|
Operating
Activities
|
||||||||
|
Net income
(loss)
|
$ | (21.7 | ) | $ | 184.4 | |||
|
Adjustments to reconcile net
income (loss) to net cash provided by operating
activities:
|
||||||||
|
Depreciation and
amortization
|
55.5 | 39.1 | ||||||
|
Stock-based compensation
expense
|
44.4 | 48.4 | ||||||
|
Impairment of
goodwill
|
21.0 | - | ||||||
|
Restructuring related charges,
net
|
42.9 | - | ||||||
|
Gain on disposition of
assets
|
(2.3 | ) | - | |||||
|
Charge for acquired in-process
research and development
|
- | 16.8 | ||||||
|
Changes in operating assets and
liabilities, net of business
combinations
|
(65.3 | ) | 111.6 | |||||
|
Net cash provided by operating
activities
|
74.5 | 400.3 | ||||||
|
Investing
Activities
|
||||||||
|
Purchases of marketable
securities
|
(298.2 | ) | (5.6 | ) | ||||
|
Sales of marketable
securities
|
1.4 | 4.7 | ||||||
|
Maturities of marketable
securities
|
14.3 | - | ||||||
|
Capital
expenditures
|
(24.3 | ) | (39.9 | ) | ||||
|
Purchase of equity
investment
|
(10.0 | ) | - | |||||
|
Business combinations, net of cash
acquired
|
- | (263.9 | ) | |||||
|
Net cash used in investing
activities
|
(316.8 | ) | (304.7 | ) | ||||
|
Financing
activities
|
||||||||
|
Draws on line of
credit
|
2.2 | 690.0 | ||||||
|
Repayments of line of
credit
|
(54.3 | ) | (570.0 | ) | ||||
|
Proceeds from issuance of common
stock, net of issuance costs
|
44.1 | 50.1 | ||||||
|
Repurchases of common
stock
|
- | (256.6 | ) | |||||
|
Net cash used in financing
activities
|
(8.0 | ) | (86.5 | ) | ||||
|
Effect of exchange rate changes on
cash and cash equivalents
|
1.2 | 2.6 | ||||||
|
Net increase (decrease) in cash
and cash equivalents
|
(249.1 | ) | 11.7 | |||||
|
Cash and cash equivalents at
beginning of fiscal year
|
917.6 | 917.9 | ||||||
|
Cash and cash equivalents at end
of period
|
$ | 668.5 | $ | 929.6 | ||||
6
Autodesk,
Inc.
Reconciliation
of GAAP financial measures to non-GAAP financial measures
(In
millions, except per share data)
To
supplement our consolidated financial statements presented on a GAAP basis,
Autodesk provides investors with certain non-GAAP measures including non-GAAP
net income, non-GAAP net income per share, non-GAAP cost of license and other
revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income
from operations, non-GAAP interest and other income, net and non-GAAP provision
for income taxes. These non-GAAP financial measures are adjusted to
exclude certain costs, expenses, gains and losses, including stock-based
compensation expense, amortization of purchased intangibles,
in-process research and development expenses, restructuring
charges, goodwill impairment, establishment of a valuation allowance on certain
deferred tax assets and related income tax expenses. See our
reconciliation of GAAP financial measures to non-GAAP financial measures
herein. We believe these exclusions are appropriate to enhance an
overall understanding of our past financial performance and also our prospects
for the future, as well as to facilitate comparisons with our historical
operating results. These adjustments to our GAAP results are made
with the intent of providing both management and investors a more complete
understanding of Autodesk's underlying operational results and trends and our
marketplace performance. For example, the non-GAAP results are an
indication of our baseline performance before gains, losses or other charges
that are considered by management to be outside our core operating
results. In addition, these non-GAAP financial measures are
among the
primary indicators management uses as a basis for our planning and forecasting
of 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. 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. The presentation of this additional
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. Investors should
review the reconciliation of the non-GAAP financial measures to their most
directly comparable GAAP financial measures as provided in the tables
accompanying this press release.
The
following table shows Autodesk's non-GAAP results reconciled to GAAP results
included in this release.
|
Three Months
Ended
|
Six Months
Ended
|
|||||||||||||||
|
July 31,
|
July 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
GAAP cost of license and other
revenue
|
$ | 47.1 | $ | 57.6 | $ | 96.6 | $ | 113.6 | ||||||||
|
SFAS 123R stock-based compensation
expense
|
(0.7 | ) | (1.1 | ) | (1.3 | ) | (2.1 | ) | ||||||||
|
Amortization of developed
technology
|
(8.3 | ) | (5.3 | ) | (16.6 | ) | (8.8 | ) | ||||||||
|
Non-GAAP cost of license and other
revenue
|
$ | 38.1 | $ | 51.2 | $ | 78.7 | $ | 102.7 | ||||||||
|
GAAP gross
margin
|
$ | 364.8 | $ | 559.8 | $ | 738.3 | $ | 1,100.6 | ||||||||
|
SFAS 123R stock-based compensation
expense
|
0.7 | 1.1 | 1.3 | 2.1 | ||||||||||||
|
Amortization of developed
technology
|
8.3 | 5.3 | 16.6 | 8.8 | ||||||||||||
|
Non-GAAP gross
margin
|
$ | 373.8 | $ | 566.2 | $ | 756.2 | $ | 1,111.5 | ||||||||
|
GAAP marketing and
sales
|
$ | 176.4 | $ | 230.2 | $ | 360.3 | $ | 455.7 | ||||||||
|
SFAS 123R stock-based compensation
expense
|
(9.5 | ) | (10.0 | ) | (19.0 | ) | (20.5 | ) | ||||||||
|
Non-GAAP marketing and
sales
|
$ | 166.9 | $ | 220.2 | $ | 341.3 | $ | 435.2 | ||||||||
|
GAAP research and
development
|
$ | 109.8 | $ | 154.8 | $ | 231.4 | $ | 300.4 | ||||||||
|
SFAS 123R stock-based compensation
expense
|
(7.0 | ) | (7.7 | ) | (14.2 | ) | (16.1 | ) | ||||||||
|
In-process research and
development
|
- | (16.8 | ) | - | (16.8 | ) | ||||||||||
|
Non-GAAP research and
development
|
$ | 102.8 | $ | 130.3 | $ | 217.2 | $ | 267.5 | ||||||||
|
GAAP general and
administrative
|
$ | 49.5 | $ | 56.0 | $ | 99.5 | $ | 105.8 | ||||||||
|
SFAS 123R stock-based compensation
expense
|
(4.0 | ) | (4.4 | ) | (9.9 | ) | (9.7 | ) | ||||||||
|
Amortization of customer
relationships and trademarks
|
(6.7 | ) | (6.4 | ) | (13.1 | ) | (9.3 | ) | ||||||||
|
Non-GAAP general and
administrative
|
$ | 38.8 | $ | 45.2 | $ | 76.5 | $ | 86.8 | ||||||||
7
|
GAAP impairment of
goodwill
|
$ | - | $ | - | $ | 21.0 | $ | - | ||||||||
|
Impairment of
goodwill
|
- | - | (21.0 | ) | - | |||||||||||
|
Non-GAAP impairment of
goodwill
|
$ | - | $ | - | $ | - | $ | - | ||||||||
|
GAAP restructuring
charges
|
$ | 26.4 | $ | - | $ | 42.9 | $ | - | ||||||||
|
Restructuring
charges
|
(26.4 | ) | - | (42.9 | ) | - | ||||||||||
|
Non-GAAP restructuring
charges
|
$ | - | $ | - | $ | - | $ | - | ||||||||
|
GAAP operating
expenses
|
$ | 362.1 | $ | 441.0 | $ | 755.1 | $ | 861.9 | ||||||||
|
SFAS 123R stock-based compensation
expense
|
(20.5 | ) | (22.1 | ) | (43.1 | ) | (46.3 | ) | ||||||||
|
Amortization of customer
relationships and trademarks
|
(6.7 | ) | (6.4 | ) | (13.1 | ) | (9.3 | ) | ||||||||
|
In-process research and
development
|
- | (16.8 | ) | - | (16.8 | ) | ||||||||||
|
Impairment of
goodwill
|
- | - | (21.0 | ) | - | |||||||||||
|
Restructuring
charges
|
(26.4 | ) | - | (42.9 | ) | - | ||||||||||
|
Non-GAAP operating
expenses
|
$ | 308.5 | $ | 395.7 | $ | 635.0 | $ | 789.5 | ||||||||
|
GAAP income (loss) from
operations
|
$ | 2.7 | $ | 118.8 | $ | (16.8 | ) | $ | 238.7 | |||||||
|
SFAS 123R stock-based compensation
expense
|
21.2 | 23.2 | 44.4 | 48.4 | ||||||||||||
|
Amortization of developed
technology
|
8.3 | 5.3 | 16.6 | 8.8 | ||||||||||||
|
Amortization of customer
relationships and trademarks
|
6.7 | 6.4 | 13.1 | 9.3 | ||||||||||||
|
In-process research and
development
|
- | 16.8 | - | 16.8 | ||||||||||||
|
Impairment of
goodwill
|
- | - | 21.0 | - | ||||||||||||
|
Restructuring
charges
|
26.4 | - | 42.9 | - | ||||||||||||
|
Non-GAAP income from
operations
|
$ | 65.3 | $ | 170.5 | $ | 121.2 | $ | 322.0 | ||||||||
|
GAAP provision for income
taxes
|
$ | (2.9 | ) | $ | (35.3 | ) | $ | (15.6 | ) | $ | (67.5 | ) | ||||
|
Establishment of valuation
allowance on deferred tax
assets
|
- | - | 21.0 | - | ||||||||||||
|
Income tax effect on difference
between GAAP and non- GAAP total costs and expenses at
a normalized rate
|
(16.4 | ) | (11.2 | ) | (38.7 | ) | (20.3 | ) | ||||||||
|
Non-GAAP provision for income
tax
|
$ | (19.3 | ) | $ | (46.5 | ) | $ | (33.3 | ) | $ | (87.8 | ) | ||||
|
GAAP net income
(loss)
|
$ | 10.5 | $ | 89.8 | $ | (21.7 | ) | $ | 184.4 | |||||||
|
SFAS 123R stock-based compensation
expense
|
21.2 | 23.2 | 44.4 | 48.4 | ||||||||||||
|
Amortization of developed
technology
|
8.3 | 5.3 | 16.6 | 8.8 | ||||||||||||
|
Amortization of customer
relationships and trademarks
|
6.7 | 6.4 | 13.1 | 9.3 | ||||||||||||
|
In-process research and
development
|
- | 16.8 | - | 16.8 | ||||||||||||
|
Impairment of
goodwill
|
- | - | 21.0 | - | ||||||||||||
|
Restructuring
charges
|
26.4 | - | 42.9 | - | ||||||||||||
|
Establishment of valuation
allowance on deferred tax
assets
|
- | - | 21.0 | - | ||||||||||||
|
Income tax effect on difference
between GAAP and non- GAAP total costs and expenses at
a normalized rate
|
(16.4 | ) | (11.2 | ) | (38.7 | ) | (20.3 | ) | ||||||||
|
Non-GAAP net
income
|
$ | 56.7 | $ | 130.3 | $ | 98.6 | $ | 247.4 | ||||||||
|
GAAP diluted net income (loss) per
share
|
$ | 0.05 | $ | 0.39 | $ | (0.09 | ) | $ | 0.80 | |||||||
|
SFAS 123R stock-based compensation
expense
|
0.09 | 0.10 | 0.19 | 0.21 | ||||||||||||
|
Amortization of developed
technology
|
0.03 | 0.02 | 0.07 | 0.03 | ||||||||||||
|
Amortization of customer
relationships and trademarks
|
0.03 | 0.03 | 0.06 | 0.04 | ||||||||||||
|
In-process research and
development
|
- | 0.07 | - | 0.07 | ||||||||||||
|
Impairment of
goodwill
|
- | - | 0.09 | - | ||||||||||||
|
Restructuring
charges
|
0.11 | - | 0.18 | - | ||||||||||||
|
Establishment of valuation
allowance on deferred tax
assets
|
- | - | 0.09 | - | ||||||||||||
|
Income tax effect on difference
between GAAP and non- GAAP total costs and expenses at
a normalized rate
|
(0.07 | ) | (0.05 | ) | (0.17 | ) | (0.09 | ) | ||||||||
|
Non-GAAP diluted net income per
share
|
$ | 0.24 | $ | 0.56 | $ | 0.42 | $ | 1.06 | ||||||||
|
GAAP diluted shares used in per
share calculation
|
232.3 | 231.1 | 228.0 | 232.1 | ||||||||||||
|
Impact of SFAS 123R on diluted
shares
|
0.8 | 0.8 | 0.5 | 0.5 | ||||||||||||
|
Shares included in non-GAAP net
income per share, but excluded from GAAP net loss
per share as they would have been
anti-dilutive
|
- | - | 3.1 | - | ||||||||||||
|
Non-GAAP diluted shares used in
per share calculation
|
233.1 | 231.9 | 231.6 | 232.6 |
8
|
Other
Supplemental Financial Information (1)
|
||||||||||||||||||||
|
Fiscal Year
2010
|
QTR 1
|
QTR 2
|
QTR 3
|
QTR 4
|
YTD 2010
|
|||||||||||||||
|
Financial Statistics ($ in
millions, except per share data):
|
||||||||||||||||||||
|
Total net
revenue
|
$ | 426 | $ | 415 | $ | 841 | ||||||||||||||
|
License and other
revenue
|
$ | 244 | $ | 231 | $ | 475 | ||||||||||||||
|
Maintenance
revenue
|
$ | 182 | $ | 184 | $ | 366 | ||||||||||||||
|
GAAP Gross
Margin
|
88 | % | 88 | % | 88 | % | ||||||||||||||
|
Non-GAAP Gross Margin
(2)(3)
|
90 | % | 90 | % | 90 | % | ||||||||||||||
|
GAAP Operating
Expenses
|
$ | 393 | $ | 362 | $ | 755 | ||||||||||||||
|
GAAP Operating
Margin
|
-5 | % | 1 | % | -2 | % | ||||||||||||||
|
GAAP Net Income
(Loss)
|
$ | (32 | ) | $ | 10 | $ | (22 | ) | ||||||||||||
|
GAAP Diluted Net Income (Loss) Per
Share
|
$ | (0.14 | ) | $ | 0.05 | $ | (0.09 | ) | ||||||||||||
|
Non-GAAP Operating
Expenses (2)(4)
|
$ | 327 | $ | 308 | $ | 635 | ||||||||||||||
|
Non-GAAP Operating
Margin (2)(5)
|
13 | % | 16 | % | 14 | % | ||||||||||||||
|
Non-GAAP Net
Income (2)(6)
|
$ | 42 | $ | 57 | $ | 99 | ||||||||||||||
|
Non-GAAP Diluted Net Income Per
Share (2)(7)
|
$ | 0.18 | $ | 0.24 | $ | 0.42 | ||||||||||||||
|
Total Cash and Marketable
Securities
|
$ | 966 | $ | 1,029 | $ | 1,029 | ||||||||||||||
|
Days Sales
Outstanding
|
49 | 49 | 49 | |||||||||||||||||
|
Capital
Expenditures
|
$ | 14 | $ | 11 | $ | 24 | ||||||||||||||
|
Cash from
Operations
|
$ | 27 | $ | 47 | $ | 74 | ||||||||||||||
|
GAAP Depreciation and
Amortization
|
$ | 27 | $ | 28 | $ | 55 | ||||||||||||||
|
Deferred Maintenance Revenue
Balance
|
$ | 469 | $ | 444 | $ | 444 | ||||||||||||||
|
Revenue by Geography (in
millions):
|
||||||||||||||||||||
|
Americas
|
$ | 163 | $ | 159 | $ | 323 | ||||||||||||||
|
Europe
|
$ | 167 | $ | 157 | $ | 324 | ||||||||||||||
|
Asia/Pacific
|
$ | 96 | $ | 99 | $ | 194 | ||||||||||||||
|
Revenue by Segment (in
millions):
|
||||||||||||||||||||
|
Platform Solutions and Emerging
Business
|
$ | 156 | $ | 145 | $ | 301 | ||||||||||||||
|
Architecture, Engineering and
Construction
|
$ | 128 | $ | 125 | $ | 253 | ||||||||||||||
|
Manufacturing
|
$ | 94 | $ | 98 | $ | 192 | ||||||||||||||
|
Media and
Entertainment
|
$ | 48 | $ | 47 | $ | 95 | ||||||||||||||
|
Other
|
$ | - | $ | - | $ | - | ||||||||||||||
|
Other Revenue
Statistics:
|
||||||||||||||||||||
|
% of Total Rev from AutoCAD and
AutoCAD LT
|
33 | % | 32 | % | 32 | % | ||||||||||||||
|
% of Total Rev from 3D design
products
|
29 | % | 30 | % | 29 | % | ||||||||||||||
|
% of Total Rev from Emerging
Economies
|
14 | % | 15 | % | 15 | % | ||||||||||||||
|
Upgrade Revenue (in
millions)
|
$ | 43 | $ | 26 | $ | 70 | ||||||||||||||
|
Favorable (Unfavorable) Impact of
U.S. Dollar Translation Relative to Foreign Currencies Compared to Comparable
Prior Year Period (in millions):
|
||||||||||||||||||||
|
FX Impact on Total Net
Revenue
|
$ | (31 | ) | $ | (24 | ) | $ | (55 | ) | |||||||||||
|
FX Impact on Total Operating
Expenses
|
$ | 22 | $ | 14 | $ | 35 | ||||||||||||||
|
FX Impact on Total Net Income
(Loss)
|
$ | (9 | ) | $ | (10 | ) | $ | (20 | ) | |||||||||||
|
Gross Margin by Segment (in
millions):
|
||||||||||||||||||||
|
Platform Solutions and Emerging
Business
|
$ | 146 | $ | 136 | $ | 282 | ||||||||||||||
|
Architecture, Engineering and
Construction
|
$ | 116 | $ | 113 | $ | 229 | ||||||||||||||
|
Manufacturing
|
$ | 86 | $ | 89 | $ | 175 | ||||||||||||||
|
Media and
Entertainment
|
$ | 34 | $ | 36 | $ | 70 | ||||||||||||||
|
Unallocated
amounts
|
$ | (9 | ) | $ | (9 | ) | $ | (18 | ) | |||||||||||
|
Common Stock
Statistics:
|
||||||||||||||||||||
|
GAAP Shares
Outstanding
|
228,219,000 | 229,666,000 | 229,666,000 | |||||||||||||||||
|
GAAP Diluted Weighted Average
Shares Outstanding
|
227,080,000 | 232,286,000 | 227,990,000 | |||||||||||||||||
|
Shares
Repurchased
|
- | - | - | |||||||||||||||||
|
Maintenance Installed
Base*
|
1,719,000 | 2,299,000 | 2,299,000 | |||||||||||||||||
|
*
|
The
second quarter of fiscal 2010 maintenance installed base includes
a
one-time adjustment of 581,000 educational seats for users migrated to a
standard
educational maintenance plan. These users were not previously
captured
in our maintenance installed
base.
|
9
(1)
Totals may not agree with the sum of the components due to
rounding.
(2) To
supplement our consolidated financial statements presented on a GAAP basis,
Autodesk provides investors with certain non-GAAP measures including non-GAAP
net income, non-GAAP net income per share, non-GAAP cost of license and other
revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income
from operations, non-GAAP interest and other income, net and non-GAAP provision
for income taxes. These non-GAAP financial measures are adjusted to
exclude certain costs, expenses, gains and losses, including stock-based
compensation expense, amortization of purchased intangibles, goodwill
impairment, restructuring charges, establishment of a valuation allowance on
certain deferred tax assets and related income tax expenses. See our
reconciliation of GAAP financial measures to non-GAAP financial measures
herein. We believe these exclusions are appropriate to enhance an
overall understanding of our past financial performance and also our prospects
for the future, as well as to facilitate comparisons with our historical
operating results. These adjustments to our GAAP results are made
with the intent of providing both management and investors a more complete
understanding of Autodesk's underlying operational results and trends and our
marketplace performance. For example, the non-GAAP results are an
indication of our baseline performance before gains, losses or other charges
that are considered by management to be outside our core operating
results. In addition, these non-GAAP financial measures are among the
primary indicators management uses as a basis for our planning and forecasting
of 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. 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. The presentation of this additional
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. Investors should
review the reconciliation of the non-GAAP financial measures to their most
directly comparable GAAP financial measures as provided in the tables
accompanying this press release.
|
Fiscal Year
2010
|
QTR 1
|
QTR 2
|
QTR 3
|
QTR 4
|
YTD 2010
|
|||||||||||||||
|
(3) GAAP Gross
Margin
|
88 | % | 88 | % | 88 | % | ||||||||||||||
|
Stock-based compensation
expense
|
0 | % | 0 | % | 0 | % | ||||||||||||||
|
Amortization of developed
technology
|
2 | % | 2 | % | 2 | % | ||||||||||||||
|
Non-GAAP Gross
Margin
|
90 | % | 90 | % | 90 | % | ||||||||||||||
|
(4) GAAP Operating
Expenses
|
$ | 393 | $ | 362 | $ | 755 | ||||||||||||||
|
Stock-based compensation
expense
|
(22 | ) | (21 | ) | (43 | ) | ||||||||||||||
|
Amortization of customer
relationships and trademarks
|
(6 | ) | (7 | ) | (13 | ) | ||||||||||||||
|
Restructuring
charges
|
(17 | ) | (26 | ) | (43 | ) | ||||||||||||||
|
Impairment of
goodwill
|
(21 | ) | - | (21 | ) | |||||||||||||||
|
Non-GAAP Operating
Expenses
|
$ | 327 | $ | 308 | $ | 635 | ||||||||||||||
|
(5) GAAP Operating
Margin
|
-5 | % | 1 | % | -2 | % | ||||||||||||||
|
Stock-based compensation
expense
|
5 | % | 5 | % | 5 | % | ||||||||||||||
|
Amortization of developed
technology
|
2 | % | 2 | % | 2 | % | ||||||||||||||
|
Amortization of customer
relationships and trademarks
|
2 | % | 2 | % | 2 | % | ||||||||||||||
|
Restructuring
charges
|
4 | % | 6 | % | 5 | % | ||||||||||||||
|
Impairment of
goodwill
|
5 | % | 0 | % | 2 | % | ||||||||||||||
|
Non-GAAP Operating
Margin
|
13 | % | 16 | % | 14 | % | ||||||||||||||
|
(6) GAAP Net Income
(Loss)
|
$ | (32 | ) | $ | 10 | $ | (22 | ) | ||||||||||||
|
Stock-based compensation
expense
|
23 | 21 | 44 | |||||||||||||||||
|
Amortization of developed
technology
|
8 | 8 | 16 | |||||||||||||||||
|
Amortization of customer
relationships and trademarks
|
6 | 7 | 13 | |||||||||||||||||
|
Impairment of
goodwill
|
21 | - | 21 | |||||||||||||||||
|
Restructuring
charges
|
17 | 26 | 43 | |||||||||||||||||
|
Establishment of valuation
allowance on deferred tax assets
|
21 | - | 21 | |||||||||||||||||
|
Income tax effect on difference
between GAAP and non-GAAP total costs and expenses at a
normalized rate
|
(22 | ) | (16 | ) | (38 | ) | ||||||||||||||
|
Non-GAAP Net
Income
|
$ | 42 | $ | 56 | $ | 98 | ||||||||||||||
|
(7) GAAP Diluted Net Income (Loss)
Per Share
|
$ | (0.14 | ) | $ | 0.05 | $ | (0.09 | ) | ||||||||||||
|
Stock-based compensation
expense
|
0.10 | 0.09 | 0.19 | |||||||||||||||||
|
Amortization of developed
technology
|
0.04 | 0.03 | 0.07 | |||||||||||||||||
|
Amortization of customer
relationships and trademarks
|
0.03 | 0.03 | 0.06 | |||||||||||||||||
|
Impairment of
goodwill
|
0.09 | - | 0.09 | |||||||||||||||||
|
Restructuring
charges
|
0.07 | 0.11 | 0.18 | |||||||||||||||||
|
Establishment of valuation
allowance on deferred tax assets
|
0.09 | - | 0.09 | |||||||||||||||||
|
Income tax effect on difference
between GAAP and non-GAAP total costs and expenses at a
normalized rate
|
(0.10 | ) | (0.07 | ) | (0.17 | ) | ||||||||||||||
|
Non-GAAP
Diluted Net Income Per Share
|
$ | 0.18 | $ | 0.24 | $ | 0.42 | ||||||||||||||
10
AUTODESK, INC.
(ADSK)
FISCAL SECOND QUARTER 2010 EARNINGS
ANNOUNCEMENT
August 13, 2009
PREPARED REMARKS
Autodesk
is posting a copy of these prepared remarks in combination with its press
release to its investor website. These prepared remarks are offered
to provide shareholders and analysts with additional time and detail for
analyzing our results in advance of our quarterly conference call. As previously
scheduled, the conference call will begin today, August 13, 2009 at 2:00 pm PT
(5:00 pm ET) and will include only brief comments followed by questions and
answers. These prepared remarks will not be read on the call.
To access
the live broadcast of the question and answer session, please visit the Investor
Relations section of Autodesk’s Website at www.autodesk.com/investor
.. A complete reconciliation between GAAP and non-GAAP results is
provided in the tables following these prepared remarks.
2Q
Fiscal 2010 Overview
We are
pleased that we delivered revenue results as anticipated and encouraged that the
sequential decline in revenue is smaller than our previous two
quarters. We also made strong progress reducing expenses leading to
improved sequential profitability.
|
|
Revenue was $415 million, a decrease of
3 percent sequentially and 33 percent compared to the second quarter of
fiscal 2009.
|
|
|
Operating
expenses were lower than anticipated as the company continued to reduce
expenses and improve efficiency.
|
|
|
GAAP
diluted earnings per share were $0.05, compared to GAAP diluted earnings
per share of $0.39 in the second quarter last fiscal year and a GAAP
diluted loss per share of $0.14 in the first quarter of fiscal
2010.
|
|
|
Non-GAAP
diluted earnings per share were $0.24, compared to $0.56 in the second
quarter of fiscal 2009 and $0.18 in the first quarter of fiscal
2010.
|
Global
economic conditions in Autodesk’s core markets were largely a continuation of
what we experienced in the first quarter of fiscal 2010. However, as
we exited the second quarter our business was less volatile relative to what we
experienced in late fiscal 2009 and earlier this fiscal year. While still
challenging, Autodesk global demand is showing signs of
stabilizing.
Despite
the challenging conditions, there were several encouraging data points in our
results including the continued success we are achieving in our government
business, which grew both sequentially and year-over-year. We remain
optimistic about our ability to further penetrate this market as we believe that
only a small portion of worldwide stimulus dollars allocated for infrastructure
projects have been spent to date. As we move forward in this area, we
are working with our government partners to raise the profile of Autodesk as a
mission critical provider.
Sales of
our model-based 3D design solutions posted small sequential growth in the second
quarter led by sales of our Inventor, Moldflow, and Revit
products. We believe that customers will continue to migrate to our
model-based 3D design solutions as they look to design innovation as a means to
create competitive advantage through product differentiation.
Over the
prior two quarters, revenue from emerging economies was impacted more
significantly than revenue from developed countries. In a positive
development, revenue from emerging economies increased 6 percent sequentially,
led by low double-digit sequential growth in the emerging economies of Asia
Pacific. Going forward, we believe revenue from emerging economies
will continue to be more volatile than revenue from developed
economies.
Turning
to expenses, we made good progress on our expense reduction
plan. GAAP operating expenses declined 18 percent, or $79 million,
compared to the second quarter last year and 8 percent
sequentially. Non-GAAP operating expenses declined by approximately
$87 million or 22 percent, compared to the second quarter last year and 6
percent sequentially.
Because
of the expense reductions we have already realized in the first half of fiscal
2010, we now believe we will surpass our initial plan of reducing our pre-tax
spend by $250 million in fiscal 2010 as compared to fiscal
2009. Based on what Autodesk expects to spend in the fiscal third
quarter, we now anticipate we will be able to deliver nearly $300 million in
pre-tax cost savings in fiscal 2010, as compared to fiscal 2009.
2
Autodesk
is a global business with approximately 69% of our business generated outside
the U.S. Overall, the current global business environment and our
business visibility remain challenging while stabilizing
somewhat. Recent reports on broader economic indicators have been
mixed. It remains unclear whether a sustainable global recovery is
underway, however, we are beginning to see some positive indicators in our
business.
With a
deep and diversified product portfolio, we are confident that we are well
positioned to participate in the global economy’s eventual
recovery. With over $1 billion in cash and investments and no debt,
Autodesk’s financial condition remains solid.
Revenue
Analysis
|
(in
millions)
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
Total net
revenue
|
$ | 620 | $ | 607 | $ | 490 | $ | 426 | $ | 415 | ||||||||||
|
License and other
revenue
|
$ | 440 | $ | 421 | $ | 310 | $ | 244 | $ | 231 | ||||||||||
|
Maintenance
revenue
|
$ | 180 | $ | 186 | $ | 180 | $ | 182 | $ | 184 |
Total net
revenue for the second quarter was $415 million, a decrease of 33 percent
compared to the second quarter last year and 29 percent at constant
currency. Total net revenue decreased 3 percent sequentially.
License
and other revenue was $231 million, a decrease of 48 percent compared to the
second quarter last year due primarily to a 46 percent year-over-year decline in
new seat license revenue. License and other revenue declined 5
percent sequentially.
Maintenance
revenue was $184 million, an increase of 3 percent compared to the second
quarter of last year and 1 percent sequentially. Maintenance billings
declined 11 percent year-over-year and 2 percent sequentially. The
year-over-year decline in billings is less than we experienced in the first
quarter of fiscal 2010. Maintenance billings continue to decline due
to a decrease in renewal rates as well as fewer new seats
sold. Renewal rates have been impacted as customers have reduced
their work force resulting in fewer seats to renew.
3
Without a
meaningful near-term increase in maintenance billings, the year-over-year
decline in maintenance billings will create downward pressure on maintenance
revenue over the next four quarters as most maintenance agreements are 12 month
contracts, which are recognized ratably over four quarters.
Revenue
by Geography
|
Revenue by Geography (in
millions)
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
Americas
|
$ | 203 | $ | 216 | $ | 172 | $ | 163 | $ | 159 | ||||||||||
|
EMEA
|
$ | 267 | $ | 258 | $ | 219 | $ | 167 | $ | 157 | ||||||||||
|
Asia Pacific
|
$ | 150 | $ | 133 | $ | 99 | $ | 96 | $ | 99 | ||||||||||
|
Emerging
Economies
|
$ | 114 | $ | 114 | $ | 80 | $ | 59 | $ | 63 | ||||||||||
|
Emerging as a percentage of
Total Revenue
|
18 | % | 19 | % | 16 | % | 14 | % | 15 | % |
Revenue
in the Americas declined 21 percent compared to the second quarter last year and
2 percent sequentially. Revenue in the U.S. posted a small sequential
decline while both Canada and Brazil grew sequentially.
EMEA
revenue decreased 41 percent year-over-year as reported and 32 percent at
constant currency. EMEA revenue declined 6%
sequentially.
Compared
to the second quarter of last year, revenue from Asia Pacific decreased 34
percent as reported and 35 percent at constant currency. Revenue from
Asia Pacific increased 3 percent sequentially. Sequential growth was
seen in both developed and emerging economies with strong sequential growth
posted in South Korea, Australia, and China.
Similar to last quarter, the greatest
geographic year-over-year revenue decline was in emerging economies, which
declined 45 percent compared to the second quarter of last
year. However, we are encouraged that revenue fr om emerging economies increased 6
percent sequentially with the strongest sequential growth coming from our Asia
Pacific region.
4
Revenue
by Product Type
|
3D Products as a % of Total
Revenue
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
Model-based 3D Design
Solutions
|
||||||||||||||||||||
|
Revenue
%
|
26 | % | 27 | % | 29 | % | 29 | % | 30 | % |
Revenue
from our model-based 3D design solutions decreased 25 percent compared to second
quarter last year, to $124 million. Revenue from model-based 3D
design solutions increased 2 percent sequentially driven by growth of Inventor,
Moldflow, and Revit products.
Our 2D
and 2D horizontal products continue to be impacted more severely in this
recession relative to our model-based 3D design solutions. Combined
revenue from 2D horizontal and 2D vertical products decreased 38 percent
compared to the second quarter of fiscal 2009 and 6 percent sequentially, to
$194 million.
Revenue
by Business Segment
|
Revenue by Segment (in
millions)
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
Platform
Solutions and Emerging Business
|
$ | 237 | $ | 239 | $ | 172 | $ | 156 | $ | 145 | ||||||||||
|
Architecture,
Engineering and Construction
|
$ | 176 | $ | 164 | $ | 146 | $ | 128 | $ | 125 | ||||||||||
|
Manufacturing
|
$ | 131 | $ | 124 | $ | 115 | $ | 94 | $ | 98 | ||||||||||
|
Media and
Entertainment
|
$ | 69 | $ | 73 | $ | 53 | $ | 48 | $ | 47 | ||||||||||
|
Other
|
$ | 6 | $ | 7 | $ | 4 | $ | - | $ | - |
Revenue
from Platform Solutions decreased 39 percent compared to the second quarter last
year and 7 percent sequentially to $145 million due to declines in sales of
AutoCAD and AutoCAD LT products. Combined revenue from these products
declined 39 percent as compared to the second quarter last year and 7 percent
sequentially.
Revenue
from our AEC segment decreased 29 percent compared to the second quarter last
year and 3 percent sequentially to $125 million. Revenue from our
Revit family of products decreased 30 percent compared to the second quarter
last year and increased 2 percent sequentially.
5
Revenue
from our Manufacturing segment decreased 25 percent compared to the second
quarter last year and increased 4 percent sequentially to $98
million. Revenue from our Inventor family of products decreased 30
percent compared to the second quarter last year and increased 7 percent
sequentially.
Revenue
from our Media and Entertainment segment was $47 million, a decrease of 32
percent compared to the second quarter last year and 2 percent
sequentially. Revenue from animation products including 3dsMax and
Maya decreased 20 percent compared to the second quarter last year and increased
9 percent sequentially. Revenue from Advanced Systems declined 47
percent compared to the second quarter last year and 17 percent
sequentially.
Margins
and EPS Review
|
Gross
Margin
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
Gross Margin -
GAAP
|
90 | % | 91 | % | 90 | % | 88 | % | 88 | % | ||||||||||
|
Gross Margin -
Non-GAAP
|
91 | % | 93 | % | 92 | % | 90 | % | 90 | % |
|
Operating Expenses (in
millions)
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
Operating Expenses -
GAAP
|
$ | 441 | $ | 415 | $ | 575 | $ | 393 | $ | 362 | ||||||||||
|
Operating Expenses -
Non-GAAP
|
$ | 396 | $ | 385 | $ | 372 | $ | 327 | $ | 308 |
|
Earnings Per
Share
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
Diluted Net Income (Loss) Per
Share - GAAP
|
$ | 0.39 | $ | 0.45 | $ | (0.47 | ) | $ | (0.14 | ) | $ | 0.05 | ||||||||
|
Diluted Net Income Per Share -
Non-GAAP
|
$ | 0.56 | $ | 0.56 | $ | 0.31 | $ | 0.18 | $ | 0.24 |
GAAP gross margins in the second quarter were 88%. Non-GAAP gross margins in the second quarter were 90 percent. Historically, gross margins have trended higher in our fiscal second quarter compared to our fiscal first quarter. Our second quarter gross margins were flat sequentially and were impacted by a combination of fixed costs that did not decrease with lower revenue, as well as non-recurring items.
GAAP
operating margin was 1 percent. Our non-GAAP operating margin in the
second quarter decreased compared to the second quarter last year primarily due
to the year-over-year drop in revenue. Non-GAAP operating margins
rose 3 percentage points on a sequential basis to 16 percent, driven by reduced
operating expenses.
6
The
effective tax rate for our second quarter was 22 percent for our GAAP results
and 25 percent for our non-GAAP results.
Earnings
per diluted share for the second quarter were $0.05 GAAP and $0.24
non-GAAP.
A
complete reconciliation between GAAP and non-GAAP results is provided in the
tables following these prepared remarks.
Foreign
Exchange Impact
|
Favorable (Unfavorable) Impact
of U.S. Dollar
|
||||||||||||||||||||
|
Translation Relative to Foreign
Currencies
|
||||||||||||||||||||
|
Compared to Comparable Prior
Year Period
|
||||||||||||||||||||
|
(in
millions)
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
FX Impact on Total Net
Revenue
|
$ | 42 | $ | 18 | $ | (19 | ) | $ | (31 | ) | $ | (24 | ) | |||||||
|
FX Impact on Operating
Expenses
|
$ | (11 | ) | $ | (3 | ) | $ | 17 | $ | 22 | $ | 14 | ||||||||
|
FX Impact on Operating Income
(Loss)
|
$ | 31 | $ | 15 | $ | (2 | ) | $ | (9 | ) | $ | (10 | ) | |||||||
Compared
to the second quarter of last year, the impact of foreign currency exchange
rates in the second quarter was $24 million unfavorable on revenue and $14
million favorable on expenses.
Compared
to the first quarter, the foreign currency impact was $9 million favorable on
revenue and $7 million unfavorable on expenses.
7
Balance
Sheet Items and Cash Review
|
Financial Statistics (in
millions)
|
2Q 2009 | 3Q 2009 | 4Q 2009 | 1Q 2010 | 2Q 2010 | |||||||||||||||
|
Total Cash and Marketable
Securities
|
$ | 970 | $ | 941 | $ | 989 | $ | 966 | $ | 1,029 | ||||||||||
|
Days Sales
Outstanding
|
48 | 44 | 59 | 49 | 49 | |||||||||||||||
|
Capital
Expenditures
|
$ | 26 | $ | 19 | $ | 19 | $ | 14 | $ | 11 | ||||||||||
|
Cash Flow from Operating
Activities
|
$ | 215 | $ | 107 | $ | 86 | $ | 27 | $ | 47 | ||||||||||
|
Depreciation and
Amortization
|
$ | 22 | $ | 25 | $ | 27 | $ | 27 | $ | 28 | ||||||||||
|
Deferred
Revenue
|
$ | 563 | $ | 499 | $ | 552 | $ | 534 | $ | 502 |
Total
cash and investments at the end of the second quarter were over $1
billion.
Cash flow
from operating activities during the second quarter was $47
million. Cash flow from operating activities was significantly lower
than the second quarter last year, but did improve sequentially primarily due to
increased profitability.
Shippable
backlog at the end of the second quarter decreased by $7 million sequentially to
$16 million.
Deferred
revenue decreased 11 percent compared to the second quarter last year and 6
percent sequentially to $502 million. The decrease is primarily due
to the reduction in maintenance billings.
Total
backlog at the end of the second quarter, including deferred revenue and
shippable backlog orders was $518 million, a decrease of $73 million compared to
the second quarter last year.
Channel
inventory at the end of the second quarter declined sequentially in weeks and in
absolute dollars. At the end of the second quarter channel inventory
was approximately three weeks.
DSO was
49 days in the second quarter, flat sequentially and slightly higher
year-over-year.
8
Business
Outlook
Our
guidance is based on our current expectations and the information we have
available today, including currency exchange rates.
|
3Q FY10 Guidance
Metrics
|
Q3 FY10 (ending October
31)
|
|
Revenue (in
millions)
|
$ 400 to
$420
|
|
EPS -
GAAP
|
$ 0.04 to
$0.09
|
|
EPS -
Non-GAAP
|
$ 0.18 to
$0.23
|
For the
third quarter, we expect revenue to be in the range of $400 million to $420
million. GAAP earnings per diluted share are expected to be in the
range of $0.04 and $0.09. Non-GAAP earnings per diluted share are
expected to be in the range of $0.18 and $0.23, excluding $0.07 related to
stock-based compensation expense, $0.05 for amortization of acquisition related
intangibles, and $0.02 for restructuring related charges.
Safe
Harbor Statement
These
prepared remarks contain forward-looking statements that involve risks and
uncertainties, including statements in the paragraphs under “Business Outlook”,
statements regarding anticipated market and economic trends, cost savings,
timing of certain charges, revenue performance (including by geography and
product), market position and other statements regarding our expected
strategies, performance and results. Other factors that could cause
actual results to differ materially include the following: general
market, economic and business conditions, our performance in particular
geographies, including emerging economies, the financial and business condition
of our reseller and distribution channels, fluctuation in foreign currency
exchange rates, failure to achieve planned cost reductions and productivity
increases, slowing momentum in maintenance revenues, failure to achieve
sufficient sell-through in our channels for new or existing products, pricing
pressure, failure to achieve continued migration from 2D products to 3D
products, difficulties encountered in integrating new or acquired businesses and
technologies, the inability to identify and realize the anticipated benefits of
acquisitions, unexpected fluctuations in our tax rate, the timing and degree of
expected investments in growth opportunities, changes in the timing of product
releases and retirements, failure of key new applications to achieve anticipated
levels of customer acceptance, failure to achieve continued success
in technology advancements, interruptions or terminations in the business of
Autodesk consultants, and any unanticipated impact of accounting for
acquisitions.
9
Further
information on potential factors that could affect the financial results of
Autodesk are included in Autodesk’s reports on Form 10-K for the year ended
January 31, 2009 and Form 10-Q for the quarter ended April 30, 2009, which are
on file with the U.S. 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.
2009
Autodesk, Inc. All rights reserved.
#
# #
10
|
|
| Fiscal Year 2010 |
QTR1
|
QTR2
|
QTR3
|
QTR4
|
YTD
2010
|
|||||||||||||||
|
Financial Statistics ($ in
millions, except per share data):
|
||||||||||||||||||||
|
Total net
revenue
|
$ | 426 | $ | 415 | $ | 841 | ||||||||||||||
|
License
and other revenue
|
$ | 244 | $ | 231 | $ | 475 | ||||||||||||||
|
Maintenance
revenue
|
$ | 182 | $ | 184 | $ | 366 | ||||||||||||||
|
GAAP Gross
Margin
|
88 | % | 88 | % | 88 | % | ||||||||||||||
|
Non-GAAP Gross Margin
(1)(2)
|
90 | % | 90 | % | 90 | % | ||||||||||||||
|
GAAP Operating
Expenses
|
$ | 393 | $ | 362 | $ | 755 | ||||||||||||||
|
GAAP Operating
Margin
|
-5 | % | 1 | % | -2 | % | ||||||||||||||
|
GAAP Net Income
(Loss)
|
$ | (32 | ) | $ | 10 | $ | (22 | ) | ||||||||||||
|
GAAP Diluted Net Income (Loss)
Per Share
|
$ | (0.14 | ) | $ | 0.05 | $ | (0.09 | ) | ||||||||||||
|
Non-GAAP Operating
Expenses (1)(3)
|
$ | 327 | $ | 308 | $ | 635 | ||||||||||||||
|
Non-GAAP Operating
Margin (1)(4)
|
13 | % | 16 | % | 14 | % | ||||||||||||||
|
Non-GAAP Net
Income (1)(5)
|
$ | 42 | $ | 57 | $ | 99 | ||||||||||||||
|
Non-GAAP Diluted Net Income Per
Share (1)(6)
|
$ | 0.18 | $ | 0.24 | $ | 0.42 | ||||||||||||||
|
Total Cash and Marketable
Securities
|
$ | 966 | $ | 1,029 | $ | 1,029 | ||||||||||||||
|
Days Sales
Outstanding
|
49 | 49 | 49 | |||||||||||||||||
|
Capital
Expenditures
|
$ | 14 | $ | 11 | $ | 24 | ||||||||||||||
|
Cash from
Operations
|
$ | 27 | $ | 47 | $ | 74 | ||||||||||||||
|
GAAP Depreciation and
Amortization
|
$ | 27 | $ | 28 | $ | 55 | ||||||||||||||
|
Deferred Maintenance Revenue
Balance
|
$ | 469 | $ | 444 | $ | 444 | ||||||||||||||
|
Revenue by Geography (in
millions):
|
||||||||||||||||||||
|
Americas
|
$ | 163 | $ | 159 | $ | 323 | ||||||||||||||
|
Europe
|
$ | 167 | $ | 157 | $ | 324 | ||||||||||||||
|
Asia/Pacific
|
$ | 96 | $ | 99 | $ | 194 | ||||||||||||||
|
Revenue by Segment (in
millions):
|
||||||||||||||||||||
|
Platform Solutions and Emerging
Business
|
$ | 156 | $ | 145 | $ | 301 | ||||||||||||||
|
Architecture, Engineering and
Construction
|
$ | 128 | $ | 125 | $ | 253 | ||||||||||||||
|
Manufacturing
|
$ | 94 | $ | 98 | $ | 192 | ||||||||||||||
|
Media and
Entertainment
|
$ | 48 | $ | 47 | $ | 95 | ||||||||||||||
|
Other
|
$ | - | $ | - | $ | - | ||||||||||||||
|
Other Revenue
Statistics:
|
||||||||||||||||||||
|
% of Total Rev from AutoCAD and
AutoCAD LT
|
33 | % | 32 | % | 32 | % | ||||||||||||||
|
% of Total Rev from 3D design
products
|
29 | % | 30 | % | 29 | % | ||||||||||||||
|
% of Total Rev from Emerging
Economies
|
14 | % | 15 | % | 15 | % | ||||||||||||||
|
Upgrade Revenue (in
millions)
|
$ | 43 | $ | 26 | $ | 70 | ||||||||||||||
|
Favorable (Unfavorable) Impact
of U.S. Dollar Translation
Relative to Foreign Currencies Compared to
Comparable
Prior Year Period (in
millions):
|
|
|
||||||||||||||||||
|
FX Impact on Total Net
Revenue
|
$ | (31 | ) | $ | (24 | ) | $ | (55 | ) | |||||||||||
|
FX Impact on Total Operating
Expenses
|
$ | 22 | $ | 14 | $ | 35 | ||||||||||||||
|
FX Impact on Total Net Income
(Loss)
|
$ | (9 | ) | $ | (10 | ) | $ | (20 | ) | |||||||||||
|
Gross Margin by Segment (in
millions):
|
||||||||||||||||||||
|
Platform Solutions and Emerging
Business
|
$ | 146 | $ | 136 | $ | 282 | ||||||||||||||
|
Architecture, Engineering and
Construction
|
$ | 116 | $ | 113 | $ | 229 | ||||||||||||||
|
Manufacturing
|
$ | 86 | $ | 89 | $ | 175 | ||||||||||||||
|
Media and
Entertainment
|
$ | 34 | $ | 36 | $ | 70 | ||||||||||||||
|
Unallocated
amounts
|
$ | (9 | ) | $ | (9 | ) | $ | (18 | ) | |||||||||||
|
Common Stock
Statistics:
|
||||||||||||||||||||
|
GAAP Shares
Outstanding
|
228,219,000 | 229,666,000 | 229,666,000 | |||||||||||||||||
|
GAAP Fully Diluted Weighted
Average Shares Outstanding
|
227,080,000 | 232,286,000 | 227,990,000 | |||||||||||||||||
|
Shares
Repurchased
|
- | - | - | |||||||||||||||||
|
Installed Base
Statistics:
|
||||||||||||||||||||
|
Maintenance Installed Base
*
|
1,719,000 | 2,299,000 | 2,299,000 | |||||||||||||||||
* The second quarter of fiscal 2010
maintenance installed base includes a one-time adjustment of 581,000 educational
seats for users migrated to a standard educational maintenance
plan. These users were not previously captured in our maintenance
installed base.
11
|
|
Note: Totals may not agree with
the sum of the components due to rounding.
(1) To supplement our consolidated
financial statements presented on a GAAP basis, Autodesk provides investors with
certain non-GAAP measures including non-GAAP net income, non-GAAP net income per
share, non-GAAP cost of license and other revenue, non-GAAP gross margin,
non-GAAP operating expenses, non-GAAP income from operations, non-GAAP interest
and other income, net and non-GAAP provision for income taxes. These
non-GAAP financial measures are adjusted to exclude certain costs, expenses,
gains and losses, including stock-based compensation expense, restructuring
charges, amortization of purchased intangibles, goodwill impairment,
establishment of a valuation allowance on certain deferred tax assets and
related income tax expenses. See our reconciliation of GAAP financial
measures to non-GAAP financial measures herein. We believe these
exclusions are appropriate to enhance an overall understanding of our past
financial performance and also our
prospects for the future, as well as to facilitate comparisons with our
historical operating results. These adjustments to our GAAP results
are made with the intent of providing both management and investors a more
complete understanding of Autodesk's underlying operational results and trends
and our marketplace performance. For example, the non-GAAP results
are an indication of our baseline performance before gains, losses or other
charges that are considered by management to be outside our core operating
results. In addition, these non-GAAP financial measures are among the
primary indicators management uses as a basis for our planning and forecasting
of 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. 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. The presentation of this additional
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. Investors should
review the reconciliation of the non-GAAP financial measures to their most
directly comparable GAAP financial measures as provided in the tables
accompanying Autodesk's press release.
| Fiscal Year 2010 |
QTR1
|
QTR2
|
QTR3
|
QTR4
|
YTD
2010
|
|||||||||||||||
|
(2) GAAP Gross
Margin
|
88 | % | 88 | % | 88 | % | ||||||||||||||
|
Stock-based
compensation expense
|
0 | % | 0 | % | 0 | % | ||||||||||||||
|
Amortization
of developed technology
|
2 | % | 2 | % | 2 | % | ||||||||||||||
|
Non-GAAP
Gross Margin
|
90 | % | 90 | % | 90 | % | ||||||||||||||
|
(3) GAAP Operating
Expenses
|
$ | 393 | $ | 362 | $ | 755 | ||||||||||||||
|
Stock-based
compensation expense
|
(22 | ) | (21 | ) | (43 | ) | ||||||||||||||
|
Amortization
of customer relationships and trademarks
|
(6 | ) | (7 | ) | (13 | ) | ||||||||||||||
|
Restructuring
charges
|
(17 | ) | (26 | ) | (43 | ) | ||||||||||||||
|
Impairment
of goodwill
|
(21 | ) | - | (21 | ) | |||||||||||||||
|
Non-GAAP
Operating Expenses
|
$ | 327 | $ | 308 | $ | 635 | ||||||||||||||
|
(4) GAAP Operating
Margin
|
-5 | % | 1 | % | -2 | % | ||||||||||||||
|
Stock-based
compensation expense
|
5 | % | 5 | % | 5 | % | ||||||||||||||
|
Amortization
of developed technology
|
2 | % | 2 | % | 2 | % | ||||||||||||||
|
Amortization
of customer relationships and trademarks
|
2 | % | 2 | % | 2 | % | ||||||||||||||
|
Restructuring
charges
|
4 | % | 6 | % | 5 | % | ||||||||||||||
|
Impairment
of goodwill
|
5 | % | 0 | % | 2 | % | ||||||||||||||
|
Non-GAAP
Operating Margin
|
13 | % | 16 | % | 14 | % | ||||||||||||||
|
(5) GAAP Net Income
(Loss)
|
$ | (32 | ) | $ | 10 | $ | (22 | ) | ||||||||||||
|
Stock-based
compensation expense
|
23 | 21 | 44 | |||||||||||||||||
|
Amortization
of developed technology
|
8 | 8 | 16 | |||||||||||||||||
|
Amortization
of customer relationships and trademarks
|
6 | 7 | 13 | |||||||||||||||||
|
Establishment
of valuation allowance on deferred tax assets
|
21 | - | 21 | |||||||||||||||||
|
Impairment
of goodwill
|
21 | - | 21 | |||||||||||||||||
|
Restructuring
charges
|
17 | 26 | 43 | |||||||||||||||||
|
Income
tax effect on difference between GAAP and
non-GAAP total costs and expenses at a
normalized rate
|
(22 | ) | (16 | ) | (38 | ) | ||||||||||||||
|
Non-GAAP
Net Income
|
$ | 42 | $ | 56 | $ | 98 | ||||||||||||||
|
(6) GAAP Diluted Net Income
(Loss) Per Share
|
$ | (0.14 | ) | $ | 0.05 | $ | (0.09 | ) | ||||||||||||
|
Stock-based
compensation expense
|
0.10 | 0.09 | 0.19 | |||||||||||||||||
|
Amortization
of developed technology
|
0.04 | 0.03 | 0.07 | |||||||||||||||||
|
Amortization
of customer relationships and trademarks
|
0.03 | 0.03 | 0.06 | |||||||||||||||||
|
Establishment
of valuation allowance on deferred tax assets
|
0.09 | - | 0.09 | |||||||||||||||||
|
Impairment
of goodwill
|
0.09 | - | 0.09 | |||||||||||||||||
|
Restructuring
charges
|
0.07 | 0.11 | 0.18 | |||||||||||||||||
|
Income
tax effect on difference between GAAP and
non-GAAP total costs and expenses at a
normalized rate
|
(0.10 | ) | (0.07 | ) | (0.17 | ) | ||||||||||||||
|
Non-GAAP
Diluted Net Income Per Share
|
$ | 0.18 | $ | 0.24 | $ | 0.42 | ||||||||||||||
12
|
|
|
Fiscal
Year 2009
|
QTR
1
|
QTR
2
|
QTR
3
|
QTR
4
|
YTD
2009
|
|||||||||||||||
|
Financial Statistics ($ in
millions, except per share data):
|
||||||||||||||||||||
|
Total net
revenue
|
$ | 599 | $ | 620 | $ | 607 | $ | 490 | $ | 2,315 | ||||||||||
|
License
and other revenue
|
$ | 432 | $ | 440 | $ | 421 | $ | 310 | $ | 1,603 | ||||||||||
|
Maintenance
revenue
|
$ | 167 | $ | 180 | $ | 186 | $ | 180 | $ | 712 | ||||||||||
|
GAAP Gross
Margin
|
90 | % | 90 | % | 91 | % | 90 | % | 91 | % | ||||||||||
|
Non-GAAP Gross Margin
(1)(2)
|
91 | % | 91 | % | 93 | % | 92 | % | 92 | % | ||||||||||
|
GAAP Operating
Expenses
|
$ | 421 | $ | 441 | $ | 415 | $ | 575 | $ | 1,852 | ||||||||||
|
GAAP Operating
Margin
|
20 | % | 19 | % | 23 | % | -27 | % | 11 | % | ||||||||||
|
GAAP Net Income
(Loss)
|
$ | 95 | $ | 90 | $ | 104 | $ | (105 | ) | $ | 184 | |||||||||
|
GAAP Diluted Net Income (Loss)
Per Share
|
$ | 0.41 | $ | 0.39 | $ | 0.45 | $ | (0.47 | ) | $ | 0.80 | |||||||||
|
Non-GAAP Operating
Expenses (1)(3)
|
$ | 394 | $ | 396 | $ | 385 | $ | 372 | $ | 1,546 | ||||||||||
|
Non-GAAP Operating
Margin (1)(4)
|
25 | % | 28 | % | 29 | % | 16 | % | 25 | % | ||||||||||
|
Non-GAAP Net
Income (1)(5)
|
$ | 117 | $ | 130 | $ | 130 | $ | 70 | $ | 448 | ||||||||||
|
Non-GAAP Diluted Net Income Per
Share (1)(6)
|
$ | 0.50 | $ | 0.56 | $ | 0.56 | $ | 0.31 | $ | 1.95 | ||||||||||
|
Total Cash and Marketable
Securities
|
$ | 950 | $ | 970 | $ | 941 | $ | 989 | $ | 989 | ||||||||||
|
Days Sales
Outstanding
|
51 | 48 | 44 | 59 | 59 | |||||||||||||||
|
Capital
Expenditures
|
$ | 14 | $ | 26 | $ | 19 | $ | 19 | $ | 78 | ||||||||||
|
Cash from
Operations
|
$ | 185 | $ | 215 | $ | 107 | $ | 86 | $ | 594 | ||||||||||
|
GAAP Depreciation and
Amortization
|
$ | 17 | $ | 22 | $ | 25 | $ | 27 | $ | 92 | ||||||||||
|
Deferred Maintenance Revenue
Balance
|
$ | 474 | $ | 488 | $ | 433 | $ | 475 | $ | 475 | ||||||||||
|
Revenue by Geography (in
millions):
|
||||||||||||||||||||
|
Americas
|
$ | 191 | $ | 203 | $ | 216 | $ | 172 | $ | 782 | ||||||||||
|
Europe
|
$ | 259 | $ | 267 | $ | 258 | $ | 219 | $ | 1,003 | ||||||||||
|
Asia/Pacific
|
$ | 149 | $ | 150 | $ | 133 | $ | 99 | $ | 530 | ||||||||||
|
Revenue by Segment (in
millions):
|
||||||||||||||||||||
|
Platform Solutions and Emerging
Business
|
$ | 253 | $ | 237 | $ | 239 | $ | 172 | $ | 901 | ||||||||||
|
Architecture, Engineering and
Construction
|
$ | 155 | $ | 176 | $ | 164 | $ | 146 | $ | 641 | ||||||||||
|
Manufacturing
|
$ | 119 | $ | 131 | $ | 124 | $ | 115 | $ | 489 | ||||||||||
|
Media and
Entertainment
|
$ | 67 | $ | 69 | $ | 73 | $ | 53 | $ | 262 | ||||||||||
|
Other
|
$ | 5 | $ | 6 | $ | 7 | $ | 4 | $ | 22 | ||||||||||
|
Other Revenue
Statistics:
|
||||||||||||||||||||
|
% of Total Rev from AutoCAD and
AutoCAD LT
|
41 | % | 35 | % | 35 | % | 32 | % | 36 | % | ||||||||||
|
% of Total Rev from 3D design
products
|
24 | % | 26 | % | 27 | % | 29 | % | 27 | % | ||||||||||
|
% of Total Rev from Emerging
Economies
|
17 | % | 18 | % | 19 | % | 16 | % | 18 | % | ||||||||||
|
Upgrade Revenue (in
millions)
|
$ | 61 | $ | 58 | $ | 41 | $ | 34 | $ | 194 | ||||||||||
|
Favorable (Unfavorable) Impact
of U.S. Dollar Translation
Relative to Foreign
Currencies Compared to Comparable
Prior Year Period (in millions):
|
|
|
||||||||||||||||||
|
FX Impact on Total Net
Revenue
|
$ | 41 | $ | 42 | $ | 18 | $ | (19 | ) | $ | 82 | |||||||||
|
FX Impact on Total Operating
Expenses
|
$ | (14 | ) | $ | (11 | ) | $ | (3 | ) | $ | 17 | $ | (11 | ) | ||||||
|
FX Impact on Total Net Income
(Loss)
|
$ | 27 | $ | 31 | $ | 15 | $ | (2 | ) | $ | 71 | |||||||||
|
Gross Margin by Segment (in
millions):
|
||||||||||||||||||||
|
Platform Solutions and Emerging
Business
|
$ | 240 | $ | 226 | $ | 231 | $ | 164 | $ | 861 | ||||||||||
|
Architecture, Engineering and
Construction
|
$ | 143 | $ | 162 | $ | 152 | $ | 135 | $ | 592 | ||||||||||
|
Manufacturing
|
$ | 110 | $ | 122 | $ | 117 | $ | 108 | $ | 457 | ||||||||||
|
Media and
Entertainment
|
$ | 49 | $ | 52 | $ | 57 | $ | 40 | $ | 198 | ||||||||||
|
Unallocated
amounts
|
$ | (1 | ) | $ | (2 | ) | $ | (3 | ) | $ | (6 | ) | $ | (12 | ) | |||||
|
Common Stock
Statistics:
|
||||||||||||||||||||
|
GAAP Shares
Outstanding
|
223,616,000 | 224,528,000 | 226,248,000 | 226,354,000 | 226,354,000 | |||||||||||||||
|
GAAP Fully Diluted Weighted
Average Shares Outstanding
|
232,607,000 | 231,078,000 | 230,364,000 | 226,299,000 | 230,068,000 | |||||||||||||||
|
Shares
Repurchased
|
8,001,000 | - | - | - | 8,001,000 | |||||||||||||||
|
Installed Base
Statistics:
|
||||||||||||||||||||
|
Maintenance Installed
Base
|
1,587,000 | 1,644,000 | 1,696,000 | 1,704,000 | 1,704,000 | |||||||||||||||
13
|
|
Note: Totals may not agree with
the sum of the components due to rounding.
(1) To supplement our consolidated
financial statements presented on a GAAP basis, Autodesk provides investors with
certain non-GAAP measures including non-GAAP net income, non-GAAP net income per
share, non-GAAP cost of license and other revenue, non-GAAP gross margin,
non-GAAP operating expenses, non-GAAP income from operations, non-GAAP interest
and other income, net and non-GAAP provision for income taxes. These
non-GAAP financial measures are adjusted to exclude certain costs, expenses,
gains and losses, including stock-based compensation expense, employee tax
reimbursements related to our stock option review, in-process research and
development expenses, restructuring charges, amortization of purchased
intangibles, asset impairment and related income tax expenses. See
our reconciliation of GAAP financial measures to non-GAAP financial measures
herein. We believe these exclusions are appropriate to enhance an overall
understanding of our past financial performance and also our prospects for the
future, as well as to facilitate comparisons with our historical operating
results. These adjustments to our GAAP results are made with the
intent of providing both management and investors a more complete understanding
of Autodesk's underlying operational results and trends and our marketplace
performance. For example, the non-GAAP results are an indication of
our baseline performance before gains, losses or other charges that are
considered by management to be outside our core operating results. In
addition, these non-GAAP financial measures are among the primary indicators
management uses as a basis for our planning and forecasting of 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. 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. The presentation of this additional
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. Investors should
review the reconciliation of the non-GAAP financial measures to their most
directly comparable GAAP financial measures as provided in the tables
accompanying Autodesk's press release.
|
Fiscal
Year 2009
|
QTR
1
|
QTR
2
|
QTR
3
|
QTR
4
|
YTD
2009
|
|||||||||||||||
|
(2) GAAP Gross
Margin
|
90 | % | 90 | % | 91 | % | 90 | % | 91 | % | ||||||||||
|
Stock-based
compensation expense
|
0 | % | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||||
|
Amortization
of developed technology
|
1 | % | 1 | % | 2 | % | 2 | % | 1 | % | ||||||||||
|
Non-GAAP
Gross Margin
|
91 | % | 91 | % | 93 | % | 92 | % | 92 | % | ||||||||||
|
(3) GAAP Operating
Expenses
|
$ | 421 | $ | 441 | $ | 415 | $ | 575 | $ | 1,852 | ||||||||||
|
Stock-based
compensation expense
|
(24 | ) | (22 | ) | (21 | ) | (18 | ) | (87 | ) | ||||||||||
|
Amortization
of customer relationships and trademarks
|
(3 | ) | (6 | ) | (7 | ) | (7 | ) | (24 | ) | ||||||||||
|
In-process
research and development
|
- | (17 | ) | (1 | ) | (9 | ) | (27 | ) | |||||||||||
|
Restructuring
charges
|
- | - | - | (40 | ) | (40 | ) | |||||||||||||
|
Impairment
of goodwill and intangibles
|
- | - | - | (129 | ) | (129 | ) | |||||||||||||
|
Non-GAAP
Operating Expenses
|
$ | 394 | $ | 396 | $ | 385 | $ | 372 | $ | 1,546 | ||||||||||
|
(4) GAAP Operating
Margin
|
20 | % | 19 | % | 23 | % | -27 | % | 11 | % | ||||||||||
|
Stock-based
compensation expense
|
4 | % | 4 | % | 4 | % | 4 | % | 4 | % | ||||||||||
|
Amortization
of developed technology
|
1 | % | 1 | % | 1 | % | 2 | % | 1 | % | ||||||||||
|
Amortization
of customer relationships and trademarks
|
0 | % | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||
|
In-process
research and development
|
0 | % | 3 | % | 0 | % | 2 | % | 1 | % | ||||||||||
|
Restructuring
charges
|
0 | % | 0 | % | 0 | % | 8 | % | 2 | % | ||||||||||
|
Impairment
of goodwill and intangibles
|
0 | % | 0 | % | 0 | % | 26 | % | 6 | % | ||||||||||
|
Non-GAAP
Operating Margin
|
25 | % | 28 | % | 29 | % | 16 | % | 25 | % | ||||||||||
|
(5) GAAP Net Income
(Loss)
|
$ | 95 | $ | 90 | $ | 104 | $ | (105 | ) | $ | 184 | |||||||||
|
Stock-based
compensation expense
|
25 | 23 | 23 | 19 | 90 | |||||||||||||||
|
Amortization
of developed technology
|
4 | 5 | 6 | 8 | 23 | |||||||||||||||
|
Amortization
of customer relationships and trademarks
|
3 | 6 | 7 | 7 | 24 | |||||||||||||||
|
In-process
research and development
|
- | 17 | 1 | 9 | 27 | |||||||||||||||
|
Impairment
of goodwill and intangibles
|
- | - | - | 129 | 129 | |||||||||||||||
|
Restructuring
charges
|
- | - | - | 40 | 40 | |||||||||||||||
|
Income
tax effect on difference between GAAP and non-GAAP total costs and expenses at a
normalized rate
|
(9 | ) | (11 | ) | (12 | ) | (36 | ) | (68 | ) | ||||||||||
|
Non-GAAP
Net Income
|
$ | 117 | $ | 130 | $ | 130 | $ | 70 | $ | 448 | ||||||||||
|
(6) GAAP Diluted Net Income
(Loss) Per Share
|
$ | 0.41 | $ | 0.39 | $ | 0.45 | $ | (0.47 | ) | $ | 0.80 | |||||||||
|
Stock-based
compensation expense
|
0.11 | 0.10 | 0.10 | 0.08 | 0.39 | |||||||||||||||
|
Amortization
of developed technology
|
0.01 | 0.02 | 0.03 | 0.04 | 0.10 | |||||||||||||||
|
Amortization
of customer relationships and trademarks
|
0.01 | 0.03 | 0.03 | 0.03 | 0.10 | |||||||||||||||
|
In-process
research and development
|
- | 0.07 | - | 0.04 | 0.12 | |||||||||||||||
|
Impairment
of goodwill and intangibles
|
- | - | - | 0.56 | 0.56 | |||||||||||||||
|
Restructuring
charges
|
- | - | - | 0.18 | 0.18 | |||||||||||||||
|
Income
tax effect on difference between GAAP and non-GAAP total costs and expenses at a
normalized rate
|
(0.04 | ) | (0.05 | ) | (0.05 | ) | (0.15 | ) | (0.30 | ) | ||||||||||
|
Non-GAAP
Diluted Net Income Per Share
|
$ | 0.50 | $ | 0.56 | $ | 0.56 | $ | 0.31 | $ | 1.95 | ||||||||||
14