[ Back ]   [ More News ]   [ Home ]
DS Reports 2008 Second Quarter Software Revenue Growth Above 15% in Constant Currencies

PARIS—(BUSINESS WIRE)—July 30, 2008— Dassault Systèmes (DS) (Paris:DSY) (NASDAQ:DASTY) reported U.S. GAAP unaudited financial results for the second quarter and six months ended June 30, 2008.

Second Quarter Summary Financial Highlights

Second Quarter 2008 Financial Summary

In millions of Euros, except per share data   U.S. GAAP   Non-GAAP
        Growth   Growth in cc*       Growth   Growth in cc*
Q2 Total Revenue   326.2   7%   13%   326.2   6%   12%
Q2 Software Revenue   278.0   10%   17%   278.0   8%   15%
Q2 EPS   0.36   16%       0.46   10%    
Q2 Operating Margin   19.8%           25.1%        

* In constant currencies.

Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, commented, Dassault Systèmes had an excellent second quarter and first half reflecting the contribution of our PLM solutions to product competitiveness and innovation. In particular, we had an excellent dynamic in software across our leading brands with new wins and additional business in many of our verticals, including automotive, aerospace, high tech, energy, apparel and life sciences among others.

We benefited from strong growth across our sales channels as we continue to focus on working closely together with our partners, improving our sales coverage and providing high value to our customers. In particular, our PLM Business Transformation channel delivered a strong performance this quarter thanks to IBM PLM as well as our direct sales force.

Second Quarter Financial Highlights

-- Recent new wins included, among others:
-- ENOVIA new wins: Nokia Siemens Networks in high tech, OKG in energy, Pacific Brands and Under Armour in apparel, Carbon Motors in automotive and Parker Hannifin in aerospace;
-- SIMULIA new wins: Cambric Corporation in business services, GN Resound in life sciences and Lenovo in high tech;
-- DELMIA new wins: Gillett Evernham Motorsports in automotive;
-- CATIA new wins: Arup in construction and Tenpaku. R Corporation in automotive;
-- SolidWorks new wins: BANSS Schlacht- und Fordertechnik and Douglas Machine in special machinery and Intertechne in energy.

Cash flow and other financial highlights

Net operating cash flow was up sharply in the 2008 second quarter to 105.7 million compared to 68.8 million in the year-ago quarter. Cash and short-term investments totaled 739.7 million and long-term debt totaled 202.0 million at June 30, 2008.

First Half 2008 Summary Financial Highlights

First Half 2008 Financial Summary

In millions of Euros, except per share data   U.S. GAAP   Non-GAAP
        Growth   Growth in cc*       Growth   Growth in cc*
H1 Total Revenue  

633.6

  6%   13%   634.1   5%   11%
H1 Software Revenue   547.1   10%   16%   547.6   8%   15%
H1 EPS   0.70   19%       0.87   7%    
H1 Operating Margin   18.6%           24.0%        

*In constant currencies.

Key Business and Corporate Highlights

DS announced today that it plans to repurchase up to 2 million shares over the second half of 2008, subject to market conditions. At the Annual Shareholders meeting on May 22, 2008, shareholders approved the resolution authorizing the Board of Directors of Dassault Systèmes to implement a new share repurchase program in order to replace the program previously authorized. During the 2008 first quarter, DS repurchased 961,986 shares under the previous authorization.

On July 21st, DS completed the previously announced acquisition of Engineous Software, a market leader in process automation, integration and optimization. The acquisition is intended to extend SIMULIAs leadership in providing Simulation Lifecycle Management solutions on the V6 IP collaboration platform.

On July 1st, DS spun off Dassault Systèmes Solutions France (DSF), its PLM sales division dedicated primarily to small and medium businesses in France, Belgium and Luxembourg, to become Keonys, a Dassault Systèmes Value Added Reseller. As part of Dassault Systèmes plan launched in 2006 to build a PLM indirect sales channel, the creation of Keonys is consistent with the continuous strengthening of this channel comprised of a network of PLM resellers in more than 60 countries.

On May 29th, DS introduced Version 6 (V6), a next generation PLM 2.0 platform and solution set. This sixth generation version was conceived in tight collaboration with industry leaders and leverages the success of DS brands and its V5 PLM. This first release of Dassault Systèmes Version 6, V6R2009, covers business processes designed to serve all of the Companys 11 target industries.

On May 20th, DS announced major advances in the new Abaqus release for SIMULIA. Abaqus 6.8 provides new and improved capabilities in core areas, including modeling and results visualization, structural analysis, composites failure, general contact, computing performance, and multiphysics.

Other Business Highlights

Other Corporate Information

On July 29, 2008, the Board of Directors of Dassault Systèmes approved the voluntary delisting of its American Depositary Shares (ADS) from Nasdaq and its voluntary deregistration with the U.S. Securities and Exchange Commission (SEC). Following the delisting of Dassault Systèmes ADS and deregistration, Dassault Systèmes shares will remain listed on Euronext.

As a result, Dassault Systèmes intends to file a Form 25 with the SEC in October 2008 to effect the delisting. The delisting will be effective ten days after this filing. Dassault Systèmes intends to file a Form 15F with the SEC to deregister and terminate its reporting obligations under the Exchange Act as soon as practicable following the effectiveness of the delisting from Nasdaq. The deregistration will become effective 90 days after the filing of the Form 15F. The Company does not plan to publish a Form 20-F for the fiscal year ended December 31, 2008.

Dassault Systèmes also intends to maintain its American Depository Receipt (ADR) program, which will enable investors to retain their ADRs and facilitate trading on the U.S. Over-The-Counter (OTC) market.

Dassault Systèmes will continue to publish its financial reports, statements and press releases in English as well as information for investors on its website ( www.3ds.com) pursuant to section 12g3-2(b) of the U.S. Securities Exchange Act.

The Company intends to continue reporting and publishing quarterly unaudited financial information in U.S. GAAP for the third and fourth quarter 2008 reporting periods in addition to reporting and filing IFRS quarterly financial information as required by the French securities regulation. Starting with fiscal year 2009, DS will solely report and publish its financial information in accordance with IFRS.

IFRS Financial Information

Dassault Systèmes expects to publish its IFRS 2008 Half Year Report on or before August 6, 2008 and will issue a press release at that time indicating that the Half Year report in French and English has been published and made available on the Companys website.

The table on page 13 of this press release sets forth a summary reconciliation of the Companys financial results as presented under U.S. GAAP to its financial results as presented under IFRS as well as a summary reconciliation of its supplemental non-GAAP financial information to its supplemental adjusted IFRS financial information.

Business Outlook

Thibault de Tersant, Senior Executive Vice President and CFO, commented, We are reconfirming our 2008 financial objectives for software revenue growth, operating margin expansion and EPS, based upon the business opportunities we see as well as the visibility provided by our financial model, and despite the economic environment.

In July we completed the spin-off of one of our internal reseller businesses, DSF, and also completed the acquisition of Engineous Software. Therefore, we are updating our full year revenue range to take into account the net 6-7 million estimated effect of these transactions, with the new mid-point of our range now at about 1.325 billion, from 1.332 billion previously.

The Companys objectives are prepared and communicated only on a non-GAAP basis and are subject to the cautionary statement set forth below. The Companys objectives are the following:

The non-GAAP objectives set forth above do not take into account the following accounting elements: deferred revenue write-downs estimated at approximately 1 million for 2008; stock-based compensation expense estimated at approximately 18 million for 2008 and amortization of acquired intangibles estimated at approximately 42 million for 2008. Those elements have not been updated yet to reflect the impact of the Engineous acquisition. In addition, the above objectives do not include any impact from other operating income and expense, net comprised of income and expenses in connection with the relocation of the Companys corporate headquarters and restructuring expenses. These estimates also do not include any new stock option or share grants, or any new acquisitions or restructurings completed after July 31, 2008.

Webcast and conference call information

Dassault Systèmes will host a webcast and a conference call today, Thursday, July 31, 2008. Management will host a webcast at 8:00 AM London time/9:00 AM CET time and will then host the conference call at 3:00 PM CET/2:00 PM London time/9:00 AM New York time. The webcast and conference call will be available via the Internet by accessing http://www.3ds.com/corporate/investors/. Please go to the website at least fifteen minutes prior to the webcast or conference call to register, download and install any necessary audio software.

The webcast and conference call will be archived for 30 days. Additional investor information can be accessed at http://www.3ds.com/corporate/investors/ or by calling Dassault Systèmes Investor Relations at 33.1.40.99.69.24.

Forward-looking information

Statements herein that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding our non-GAAP financial performance objectives, are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended).

Such forward-looking statements are based on our management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to a range of factors. In preparing such forward-looking statements, we have in particular assumed an average U.S. dollar to euro exchange rate of US$1.60 per 1.00 and an average Japanese yen to euro exchange rate of JPY160 to 1.00 for the 2008 third quarter and an average U.S. dollar to euro exchange rate of US$1.57 per 1.00 and an average Japanese yen to euro exchange rate of JPY160 to 1.00 for the full year 2008; however, currency values fluctuate, and our results of operations may be significantly affected by changes in exchange rates. We have also assumed that there will be no substantial decline in general levels of corporate spending on information technology, and that our increased responsibility for both indirect and direct PLM sales channels, and the resulting commercial and management challenges, will not prevent us from maintaining growth in revenues or cause us to incur substantial unanticipated costs and inefficiencies. Our actual results or performance may also be materially negatively affected by difficulties or adverse changes affecting our partners or our relationships with our partners, including our longstanding, strategic partner, IBM; new product developments and technological changes; errors or defects in our products; growth in market share by our competitors; and the realization of any risks related to the integration of any newly acquired company and internal reorganizations. Unfavorable changes in any of the above or other factors described in the Companys SEC reports, including the Form 20-F for the year ended December 31, 2007, which was filed with the SEC on April 4, 2008, could materially affect the Companys financial position or results of operations.

Non-GAAP financial information

Readers are cautioned that the supplemental non-GAAP information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-GAAP financial information may not be comparable to similarly titled non-GAAP measures used by other companies. Further specific limitations for individual non-GAAP measures, and the reasons for presenting non-GAAP financial information, are set forth in the Companys annual report for the year ended December 31, 2007 on Form 20-F filed with the SEC on April 4, 2008 and in the paragraph below.

In addition to the individual non-GAAP measures described in our most recent Form 20-F, our unaudited U.S. GAAP 2008 quarterly financial statements may reflect other operating income and expense, net comprised of income and expenses related to the relocation of the Companys corporate headquarters and restructuring expenses. In our supplemental non-GAAP financial information, we exclude other operating income and expense effects because of their infrequent or non-recurring nature. As a result, we believe that our supplemental non-GAAP financial information helps investors better understand the current trends in our operating performance. However, other operating income and expense, net are components of our income and expenses for 2008 and by excluding them the supplemental non-GAAP financial information understates the net impact to our net income in 2008. Other operating income and expense, net are generally not recurring, and we do not expect to incur other operating income and expense, net as part of our normal business on a regular basis.

To compensate for these limitations, the supplemental non-GAAP financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

The tables on pages 11 and 12 of this press release set forth our supplemental non-GAAP revenue, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share, which exclude the effect of adjusting the carrying value of acquired companies deferred revenue, the expenses for the amortization of acquired intangible assets and stock-based compensation expense (in each case, as explained in our Form 20-F), as well as other operating income and expense, net (as explained above). The tables also set forth the most comparable GAAP financial measure and a reconciliation of the GAAP and non-GAAP information.

Information in constant currencies

When the Company believes it would be helpful for understanding trends in its business, the Company provides percentage increases or decreases in its revenue (in both U.S. GAAP and on a non-GAAP basis) to eliminate the effect of changes in currency values, particularly the U.S. dollar and the Japanese yen, relative to the euro. When trend information is expressed herein "in constant currencies", the results of the "current" period have first been recalculated using the average exchange rates of the comparable period in the preceding year, and then compared with the results of the comparable period in the preceding year.

About Dassault Systèmes:

As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 100,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes develops and markets PLM application software and services that support industrial processes and provide a 3D vision of the entire lifecycle of products from conception to maintenance to recycling. The Dassault Systèmes portfolio consists of CATIA for designing the virtual product - SolidWorks for 3D mechanical design - DELMIA for virtual production - SIMULIA for virtual testing - ENOVIA for global collaborative lifecycle management, and 3DVIA for online 3D lifelike experiences. Dassault Systèmes is listed on the Nasdaq (DASTY) and Euronext Paris (#13065, DSY.PA) stock exchanges. For more information, visit http://www.3ds.com

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

DASSAULT SYSTEMES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. GAAP)

(in millions of Euro, except per share data, unaudited)

  Three months ended   Six months ended
June 30,   June 30,   June 30,   June 30,
    2008   2007   2008   2007
New licenses revenue 101.2 96.2 201.9 192.0
Periodic licenses, maintenance and product development revenue 176.8   157.1   345.2   307.1
Software revenue 278.0 253.3 547.1 499.1
Services and other revenue 48.2   52.4   86.5   97.5
Total Revenue 326.2 305.7 633.6 596.6
Cost of software revenue (excluding amortization of acquired intangibles) 12.8 13.1 27.4 25.8
Cost of services and other revenue 38.9 38.5 74.5 78.7
Research and development 76.6 75.5 150.3 152.0
Marketing and sales 95.2 88.3 187.7 171.4
General and administrative 25.6 24.6 52.0 46.0
Amortization of acquired intangibles 10.4 10.9 21.5 21.8
Other operating income and expense, net 2.1   0.0   2.5   0.0
Total Operating Expenses 261.6   250.9   515.9   495.7
Operating Income 64.6 54.8 117.7 100.9
Financial revenue and other, net 0.0   3.3   0.2   6.3
Income before income taxes 64.6 58.1 117.9 107.2
Income tax expense (22.0) (20.1) (34.7) (36.3)
Minority interest (0.1)   (0.1)   (0.1)   (0.1)
Net Income 42.5   37.9   83.1   70.8
Basic net income per share 0.36   0.33   0.71   0.61
Diluted net income per share 0.36   0.31   0.70   0.59
Basic weighted average shares outstanding (in millions) 116.9   116.2   117.1   116.1
Diluted weighted average shares outstanding (in millions)   118.9   119.3   119.3   119.2
 

U.S. GAAP revenue variation as reported and in constant currencies

 
                 
  Three months ended June 30, 2008   Six months ended June 30, 2008
    Variation*   Variation in cc**   Variation*   Variation in cc**
GAAP Revenue 7% 13% 6% 13%
GAAP Revenue by activity
Software Revenue 10% 17% 10% 16%
Services and other Revenue (8%) (2%) (11%) (6%)
GAAP Software Revenue by segment
PLM software revenue 11% 17% 10% 17%
of which CATIA software revenue 14% 20% 15% 22%
of which ENOVIA software revenue 7% 16% 3% 12%
Mainstream 3D software revenue 6% 14% 8% 16%
GAAP Revenue by geography
Americas 2% 19% 0% 15%
Europe 12% 12% 12% 12%
Asia   3%   10%   3%   10%

* Variation compared to the same period in the prior year. - ** In constant currencies.

DASSAULT SYSTEMES

CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. GAAP)

(in millions of Euro, unaudited)

   
June 30, December 31,
    2008   2007
 
TOTAL ASSETS
Cash and short-term investments 739.7 626.6
Accounts receivable, net 268.4 320.0
Other assets 963.5 1,004.5
Total Assets   1,971.6   1,951.1
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt 202.0 202.9
Other liabilities 605.9 552.4
Shareholders' equity 1,163.7   1,195.8
Total Liabilities and Shareholders' equity   1,971.6   1,951.1

DASSAULT SYSTEMES

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (U.S. GAAP)

(in millions of Euro, unaudited)

  Three months ended   Six months ended
    June 30, 2008   June 30, 2007   Variation   June 30, 2008   June 30, 2007   Variation
Net Income 42.5   37.9   4.6   83.1   70.8   12.3
Depreciation and Amortization of Property, Plant & Equipment 5.5 6.6 (1.1) 11.5 12.5 (1.0)
Amortization of intangible assets 11.5 12.8 (1.3) 23.6 24.9 (1.3)
Other Non Cash P&L Items 1.8 (5.6) 7.4 0.1 (5.6) 5.7
Changes in working capital 44.4   17.1   27.3   75.8   74.6   1.2
Net Cash provided by operating activities 105.7 68.8 36.9 194.1 177.2 16.9
 
Acquisition of assets and equity, net of cash (14.3) (53.2) 38.9 (24.6) (59.9) 35.3
Sale of assets and equity 0.0 0.0 0.0 36.2 0.0 36.2
Loans and others 0.2   (0.7)   0.9   0.0   (0.7)   0.7
Net Cash provided by (used in) investing activities (14.1) (53.9) 39.8 11.6 (60.6) 72.2
 
Borrowings 0.0 0.0 0.0 0.0 0.0 0.0
Share repurchase 0.0 0.0 0.0 (35.0) 0.0 (35.0)
DS Stock Option and preferred Stock Exercise 19.1 22.6 (3.5) 23.3 27.8 (4.5)
Cash dividend paid (53.7) (50.8) (2.9) (53.7) (50.8) (2.9)
Payments on capital lease obligations 0.0   0.0   0.0   0.0   (0.4)   0.4
Net Cash provided by (used in) financing activities (1) (34.6) (28.2) (6.4) (65.4) (23.4) (42.0)
 
Effect of exchange rate changes on

treasury (2)

(0.2) (4.2) 4.0 (27.2) (7.8) (19.4)
                 

 

 
Increase in treasury (2)   56.8   (17.5)   74.3   113.1   85.4   27.7
                         
Treasury (2) at beginning of period 682.9 562.1 626.6 459.2
Treasury (2) at end of period   739.7   544.6       739.7   544.6    

(1) Excluding changes in short-term investments.

(2) Treasury includes cash, cash equivalents and short-term investments.

DASSAULT SYSTEMES

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

U.S. GAAP NON-GAAP RECONCILIATION

(in millions of Euro, except per share data, unaudited)

Readers are cautioned that the supplemental non-GAAP information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-GAAP financial information may not be comparable to similarly titled non-GAAP measures used by other companies. Further specific limitations for individual non-GAAP measures, and the reasons for presenting non-GAAP financial information, are set forth in todays press release with respect to other operating income and expense, net and in the Companys annual report for the year ended December 31, 2007 on Form 20-F filed with the SEC on April 4, 2008 for the other non-GAAP financial measures. To compensate for these limitations, the supplemental non-GAAP financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

In millions of Euros, except per share data and percentages   Three months ended June 30,   Variation
2008   Adjustment (1)   2008   2007   Adjustment (1)   2007   U.S. GAAP   Non-GAAP (2)
    U.S. GAAP       non-GAAP   U.S. GAAP       non-GAAP        
Total Revenue 326.2 305.7 3.1 308.8 7% 6%
Total Revenue breakdown by activity
Software revenue 278.0 253.3 3.1 256.4 10% 8%
New Licenses 101.2 96.2 5%
Product Development (0.1) 1.0 --
Periodic Licenses and Maintenance 176.9 156.1 3.1 159.2 13% 11%
Recurring portion of Software revenue 64% 62% 62%
Services and other revenue 48.2 52.4 (8%)
Total Software Revenue breakdown by segment
PLM software revenue 211.6 190.8 2.2 193.0 11% 10%
of which CATIA software revenue 126.6 110.9 0.2 111.1 14% 14%
of which ENOVIA software revenue 43.3 40.3 2.0 42.3 7% 2%
Mainstream 3D software revenue 66.4 62.5 0.9 63.4 6% 5%
Total Revenue breakdown by geography
Americas 95.9 93.6 1.5 95.1 2% 1%
Europe 157.1 140.8 1.2 142.0 12% 11%
Asia   73.2           71.3   0.4   71.7   3%   2%
Total Operating Expenses 261.6 (17.2) 244.4 250.9 (14.3) 236.6 4% 3%
Stock-based compensation expense 4.7 (4.7) - 3.4 (3.4) - -- --
Amortization of acquired intangibles 10.4 (10.4) - 10.9 (10.9) - -- --
Other operating income and expense, net   2.1   (2.1)   -   0.0           --   --
Operating Income 64.6 17.2 81.8 54.8 17.4 72.2 18% 13%
Operating Margin 19.8% 25.1% 17.9% 23.4%
Income before Income Taxes 64.6 17.2 81.8 58.1 17.4 75.5 11% 8%
Income tax expense (22.0) (4.7) (26.7) (20.1) (5.3) (25.4) -- --
Income tax effect of adjustments above 4.7 (4.7) - 5.3 (5.3) - -- --
Minority interest (0.1) (0.1) --
Net Income 42.5 12.5 55.0 37.9 12.1 50.0 12% 10%
Diluted Net Income Per Share (3)   0.36   0.10   0.46   0.31   0.11   0.42   16%   10%

(1) In the reconciliation schedule above, (i) all non-GAAP adjustments to GAAP revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-GAAP adjustments to operating expenses data reflect the exclusion of the amortization of acquired intangibles, other operating income and expense, net and stock-based compensation expense (as detailed below); and (iii) all non-GAAP adjustments to GAAP income data reflect the combined effect of these non-GAAP adjustments.

  Three months ended June 30,
Millions of Euros   2008 U.S. GAAP  

Adjustment

 

2008 non-GAAP

  2007 U.S. GAAP  

Adjustment

 

2007 non-GAAP

Cost of services and other revenue 38.9   (0.2)   38.7   38.5   (0.2)   38.3
Research and development 76.6 (2.8) 73.8 75.5 (1.9) 73.6
Marketing and sales 95.2 (0.9) 94.3 88.3 (0.7) 87.6
General and administrative 25.6 (0.8) 24.8 24.6 (0.6) 24.0
Total stock-based compensation expense       (4.7)           (3.4)    

(2) The non-GAAP percentage increase (decrease) compares non-GAAP measures for the two different periods. In the event there is a non-GAAP adjustment to the relevant measure for only one of the periods under comparison, the non-GAAP increase (decrease) compares the non-GAAP measure to the relevant GAAP measure.

(3) Based on a weighted average 118.9 million diluted shares for Q2 2008 and 119.3 million diluted shares for Q2 2007.

DASSAULT SYSTEMES

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

U.S. GAAP NON-GAAP RECONCILIATION

(in millions of Euro, except per share data, unaudited)

Readers are cautioned that the supplemental non-GAAP information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-GAAP financial information may not be comparable to similarly titled non-GAAP measures used by other companies. Further specific limitations for individual non-GAAP measures, and the reasons for presenting non-GAAP financial information, are set forth in todays press release with respect to other operating income and expense, net and in the Companys annual report for the year ended December 31, 2007 on Form 20-F filed with the SEC on April 4, 2008 for the other non-GAAP financial measures. To compensate for these limitations, the supplemental non-GAAP financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

In millions of Euros, except per share data and percentages   Six months ended June 30,   Variation
2008   Adjustment (1)   2008   2007   Adjustment (1)   2007   U.S. GAAP   Non-GAAP (2)
    U.S. GAAP       non-GAAP   U.S. GAAP       non-GAAP        
Total Revenue 633.6 0.5 634.1 596.6 6.9 603.5 6% 5%
Total Revenue breakdown by activity
Software revenue 547.1 0.5 547.6 499.1 6.9 506.0 10% 8%
New Licenses 201.9 192.0 5%
Product Development 0.1 2.6 --
Periodic Licenses and Maintenance 345.1 0.5 345.6 304.5 6.9 311.4 13% 11%
Recurring portion of Software revenue 63% 63% 61% 62%
Services and other revenue 86.5 97.5 (11%)
Total Software Revenue breakdown by segment
PLM software revenue 413.5 0.5 414.0 375.8 4.5 380.3 10% 9%
of which CATIA software revenue 249.0 0.3 249.3 217.2 0.2 217.4 15% 15%
of which ENOVIA software revenue 81.4 0.2 81.6 78.9 4.3 83.2 3% (2%)
Mainstream 3D software revenue 133.6 123.3 2.4 125.7 8% 6%
Total Revenue breakdown by geography
Americas 189.8 0.2 190.0 189.7 3.4 193.1 0% (2%)
Europe 295.8 0.2 296.0 263.6 2.6 266.2 12% 11%
Asia   148.0   0.1   148.1   143.3   0.9   144.2   3%   3%
Total Operating Expenses 515.9 (33.8) 482.1 495.7 (29.5) 466.2 4% 3%
Stock-based compensation expense 9.8 (9.8) - 7.7 (7.7) - -- --
Amortization of acquired intangibles 21.5 (21.5) - 21.8 (21.8) - -- --
Other operating income and expense, net   2.5   (2.5)   -   0.0           --   --
Operating Income 117.7 34.3 152.0 100.9 36.4 137.3 17% 11%
Operating Margin 18.6% 24.0% 16.9% 22.8%
Income before Income Taxes 117.9 34.3 152.2 107.2 36.4 143.6 10% 6%
Income tax expense (34.7) (13.7) (48.4) (36.3) (10.9) (47.2) -- --
Income tax effect of adjustments above 13.7 (13.7) - 10.9 (10.9) - -- --
Minority interest (0.1) (0.1) --
Net Income 83.1 20.6 103.7 70.8 25.5 96.3 17% 8%
Diluted Net Income Per Share (3)   0.70   0.17   0.87   0.59   0.22   0.81   19%   7%

(1) In the reconciliation schedule above, (i) all non-GAAP adjustments to GAAP revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-GAAP adjustments to operating expenses data reflect the exclusion of the amortization of acquired intangibles, other operating income and expense, net, and stock-based compensation expense (as detailed below); and (iii) all non-GAAP adjustments to GAAP income data reflect the combined effect of these non-GAAP adjustments.

  Six months ended June 30,
Millions of Euros 2008 U.S. GAAP  

Adjustment

 

2008 non-GAAP

  2007 U.S. GAAP  

Adjustment

 

2007 non-GAAP

       

 

 

 

     

 

 

 

Cost of services and other revenue 74.5 (0.4) 74.1 78.7 (0.3) 78.4
Research and development 150.3 (5.7) 144.6 152.0 (4.4) 147.6
Marketing and sales 187.7 (1.9) 185.8 171.4 (1.6) 169.8
General and administrative 52.0 (1.8) 50.2 46.0 (1.4) 44.6
Total stock-based compensation expense       (9.8)           (7.7)    

(2) The non-GAAP percentage increase (decrease) compares non-GAAP measures for the two different periods. In the event there is a non-GAAP adjustment to the relevant measure for only one of the periods under comparison, the non-GAAP increase (decrease) compares the non-GAAP measure to the relevant GAAP measure.

(3) Based on a weighted average 119.3 million diluted shares for First Half 2008 and 119.2 million diluted shares for First Half 2007.

DASSAULT SYSTEMES

U.S.GAAP IFRS SUMMARY RECONCILIATION

(in millions of Euro, except per share data, unaudited)

In millions of Euros  

Six months ended June 30,

 

Six months ended June 30,

2008   Adjustment   2008   2007   Adjustment   2007
    U.S. GAAP       IFRS   U.S. GAAP       IFRS
Total Revenue 633.6 0.0 633.6 596.6 0.0 596.6
Net Income 83.1 17.1 100.2 70.8 3.7 74.5
Amortization of acquired intangibles ( 21.5) 2.9 ( 18.6) ( 21.8) 5.9 ( 15.9)
Other operating income and expense, net* ( 2.5) 17.2 14.7 0.0 0.0 0.0
Income tax expense ( 34.7) ( 3.0) ( 37.7) ( 36.3) ( 2.2) ( 38.5)
Shareholders' equity   1,163.7   ( 55.2)   1,108.5   1,147.1   ( 28.9)   1,118.2

* Under U.S. GAAP the Company will recognize the gain on sale of real estate in connection with the relocation of its corporate headquarters in the 2008 fourth quarter. Under IFRS the gain on sales is recognized in the 2008 second quarter.

DASSAULT SYSTEMES

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

Non-GAAP Adjusted IFRS SUMMARY RECONCILIATION

(in millions of Euro, except per share data, unaudited)

Readers are cautioned that the supplemental non-GAAP and adjusted IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP or IFRS measurements. Also, our supplemental non-GAAP and adjusted IFRS financial information may not be comparable to similarly titled non-GAAP and adjusted IFRS measures used by other companies. Further specific limitations for individual non-GAAP and adjusted IFRS measures, and the reasons for presenting non-GAAP and adjusted IFRS financial information, are set forth in todays press release with respect to other operating income and expense, net and in the Companys annual report for the year ended December 31, 2007 on Form 20-F filed with the SEC on April 4, 2008 and in the Document de Référence filed with the AMF on April 4, 2008 for the other non-GAAP and adjusted IFRS financial measures. To compensate for these limitations, the supplemental non-GAAP and adjusted IFRS financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP and IFRS.

In millions of Euros   Six months ended June 30,
2008   Adjustment   2008   2007   Adjustment   2007
    non-GAAP       IFRS adjusted   non-GAAP       IFRS adjusted
Total Revenue 634.1 0.0 634.1 603.5 0.0 603.5
Net Income 103.7 0.0 103.7 96.3 0.0 96.3

DASSAULT SYSTEMES

NON-GAAP KEY FIGURES

(in millions of Euro, except per share data, headcount and exchange rates, unaudited)

Non-GAAP key figures exclude the effects of adjusting the carrying value of acquired companies deferred revenue, amortization of acquired intangible assets, stock-based compensation expense and other operating income and expense, net.

Comparable U.S. GAAP financial information and a reconciliation of the GAAP and non-GAAP measures are set forth in the preceding tables.

  Three months ended   Six months ended
    June 30, 2008   June 30, 2007   Variation   Variation in cc*   June 30, 2008   June 30, 2007   Variation   Variation in cc*
Non-GAAP Revenue 326.2   308.8   6%   12%   634.1   603.5   5%   11%
 
Non-GAAP Revenue breakdown by activity
Software Revenue 278.0 256.4 8% 15% 547.6 506.0 8% 15%
of which New Licenses Revenue 101.2 96.2 5% 12% 201.9 192.0 5% 11%
of which Periodic Licenses, Maintenance and

Product Development Revenue

176.8 160.2 10% 17% 345.7 314.0 10% 17%
Services and other Revenue 48.2 52.4 (8%) (2%) 86.5 97.5 (11%) (6%)
 
Non-GAAP Software Revenue breakdown by segment
PLM software Revenue 211.6 193.0 10% 16% 414.0 380.3 9% 15%
of which CATIA software Revenue 126.6 111.1 14% 20% 249.3 217.4 15% 20%
of which ENOVIA software Revenue 43.3 42.3 2% 11% 81.6 83.2 (2%) 6%
Mainstream 3D software Revenue 66.4 63.4 5% 13% 133.6 125.7 6% 14%
 
Non-GAAP Revenue breakdown by geography
Americas 95.9 95.1 1% 17% 190.0 193.1 (2%) 13%
Europe 157.1 142.0 11% 11% 296.0 266.2 11% 11%
Asia   73.2   71.7   2%   9%   148.1   144.2   3%   9%
 
Non-GAAP Operating Income 81.8 72.2 13% 152.0 137.3 11%
Non-GAAP Operating Margin 25.1% 23.4% 24.0% 22.8%
Non-GAAP Net Income 55.0 50.0 10% 103.7 96.3 8%
Non-GAAP Diluted Net Income Per Share   0.46   0.42   10%       0.87   0.81   7%    
Closing headcount                   7,707   7,122   8%    
 
Average Rate USD per Euro 1.56 1.35 16% 1.53 1.33 15%
Average Rate JPY per Euro   163.4   162.8   0%       160.6   159.6   1%    

* In constant currencies.



Contact: Dassault Systemes: Valerie Agathon/Beatrix Martinez 33.1.40.99.69.24 or Financial Dynamics: Juliet Clarke/Haya Chelhot/Erwan Gouraud 44.20.7831.3113 Laurence Borbalan/Eloi Perrin-Aussedat Florence de Montmarin 33.1.47.03.68.10