☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
04-3219960
|
|||
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|||
2600 ANSYS Drive,
|
Canonsburg,
|
PA
|
|
|
15317
|
(Address of Principal Executive Offices)
|
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(Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
|
||||
Title of each class
|
Trading Symbol(s)
|
Name of exchange on which registered
|
||
Common Stock, $0.01 par value per share
|
ANSS
|
Nasdaq Stock Market LLC
|
||
|
|
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(Nasdaq Global Select Market)
|
|
Securities registered pursuant to section 12(g) of the Act:
|
||||
None
|
||||
(Title of class)
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
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Non-accelerated filer
|
☐
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Smaller reporting company
|
☐
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Emerging growth company
|
☐
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|
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PART I
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||
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Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
PART II
|
||
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
||
PART III
|
||
|
|
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Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
||
PART IV
|
||
|
|
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Item 15.
|
||
Item 16.
|
||
|
|
|
•
|
Our intentions regarding our hybrid sales and distribution model.
|
•
|
Our intentions related to investments in research and development, particularly as it relates to expanding the ease of use and capabilities of our broad portfolio of simulation software products.
|
•
|
Our expectations regarding the accelerated development of new and innovative products to the marketplace while lowering design and engineering costs for customers as a result of our acquisitions.
|
•
|
Our statements regarding the impact of global economic conditions.
|
•
|
Our expectations regarding the outcome of our service tax audit cases.
|
•
|
Our belief that, in most geographical locations, our facilities allow for sufficient space to support present and future foreseeable needs, including such expansion and growth as the business may require.
|
•
|
Our expectation that we can renew existing facility leases as they expire or find alternative facilities without difficulty, as needed.
|
•
|
Our assessment of the ultimate liabilities arising from various investigations, claims and legal proceedings.
|
•
|
Our statements regarding the strength of the features, functionality and integrated multiphysics capabilities of our software products.
|
•
|
Our belief that our overall performance is best measured by fiscal-year results rather than by quarterly results.
|
•
|
Our estimates regarding the expected impact on reported revenue related to the acquisition accounting treatment of deferred revenue.
|
•
|
Our expectation that we will continue to make targeted investments in our global sales and marketing organizations and our global business infrastructure to enhance and support our revenue-generating activities.
|
•
|
Our intention to repatriate previously taxed earnings in excess of working capital needs and to reinvest all other earnings of our non-U.S. subsidiaries.
|
•
|
Our plans related to future capital spending.
|
•
|
The sufficiency of existing cash and cash equivalent balances to meet future working capital and capital expenditure requirements.
|
•
|
Our belief that the best uses of our excess cash are to invest in the business, make payments on outstanding debt balances and repurchase stock in order to both offset dilution and return capital, in excess of our requirements, to stockholders with the goal of increasing stockholder value.
|
•
|
Our intentions related to investments in complementary companies, products, services and technologies.
|
•
|
Our expectation that changes in currency exchange rates will affect our financial position, results of operations and cash flows.
|
•
|
Our expectations regarding future claims related to indemnification obligations.
|
•
|
Our estimates regarding future stock-based compensation.
|
•
|
Our expectations regarding the impacts of new accounting guidance.
|
•
|
Our assessment of our ability to realize deferred tax assets.
|
•
|
Our performance expectations related to our partnerships and strategic alliances.
|
•
|
Our expectations regarding acquisitions and integrating such acquired companies to realize the benefits of cost reductions and other synergies relating thereto.
|
•
|
Our statements regarding market opportunity, including the size and growth of addressable markets.
|
ITEM 1.
|
BUSINESS
|
•
|
In January 2020, we released Ansys 2020 R1, which streamlines product development lifecycles and helps boost product performance with enhancements to the interfaces, functionality and power of our simulation solvers. Among these advances is Ansys Minerva, a knowledge management application platform that delivers an integrated suite of Ansys tools, fusing simulation and optimization to product lifecycle processes across any enterprise. Minerva spurs collaboration within global engineering teams and increases data sharing to innovate product designs and reduce development costs. From improving product development with Ansys Minerva to running complex simulations with substantially streamlined workflows with Ansys Fluent to optimizing electromagnetic design processes with Ansys HFSS, Ansys 2020 R1 helps enable companies to pioneer innovations and create cost-effective designs.
|
•
|
In September 2019, we released Ansys 2019 R3, which strengthens our autonomous vehicles (AV) solutions with the addition of Ansys Autonomy. Ansys Autonomy enables engineers to develop safer AV through advanced closed-loop scenario simulation, automated driving and control software development, functional safety analysis, and sensor, camera, lidar, and radar simulation. Among a number of other enhancements to our product portfolio, Ansys 2019 R3 also includes the SPEOS Road Library for Sensors Simulation, a comprehensive, retro-reflecting materials database, as well as updates to Ansys HFSS SBR+ that provide greater accuracy in predicting radar cross sections of large targets with curvatures.
|
•
|
In June 2019, we released Ansys 2019 R2, which accelerates, streamlines and simplifies the product life cycle through new functionalities. With the new functionalities, including new materials capabilities for structural analysis following the acquisition of Granta Design Limited (Granta Design), our simulation solutions accelerate collaboration, validation and verification, creating a reliable digital thread throughout operations. The release also includes a revolutionary Ansys Mechanical™ user experience, simplified simulation of complex electronics and a new Ansys FluentTM workflow that significantly speeds meshing of dirty geometries.
|
|
Balance at December 31, 2019
|
||||||||||
(in thousands)
|
Total
|
|
Current
|
|
Long-Term
|
||||||
Deferred revenue
|
$
|
365,274
|
|
|
$
|
351,353
|
|
|
$
|
13,921
|
|
Backlog
|
505,469
|
|
|
218,398
|
|
|
287,071
|
|
|||
Total
|
$
|
870,743
|
|
|
$
|
569,751
|
|
|
$
|
300,992
|
|
Date of Closing
|
|
Company
|
|
Details
|
November 1, 2019
|
|
LST
|
|
LST, the premier provider of explicit dynamics and other advanced finite element analysis technology, empowers our customers to solve a new class of engineering challenges, including developing safer automobiles, aircraft and trains while reducing or even eliminating the need for costly physical testing.
|
November 1, 2019
|
|
Dynardo
|
|
Dynardo, a leading provider of multidisciplinary analysis and optimization technology, gives our customers access to a full suite of process integration and robust design tools — empowering users to identify optimal product designs faster and more economically.
|
May 1, 2019
|
|
DfR Solutions
|
|
DfR Solutions' electronics reliability technology, combined with our existing comprehensive multiphysics portfolio, gives our customers a complete designer-level solution to analyze for electronics failure earlier in the design cycle.
|
February 4, 2019
|
|
Helic
|
|
Helic, the industry-leading provider of electromagnetic crosstalk solutions for systems on chips, combined with our flagship electromagnetic and semiconductor solvers, provides a comprehensive solution for on-chip, 3D integrated circuit and chip-package-system electromagnetics and noise analysis.
|
February 1, 2019
|
|
Granta Design
|
|
Granta Design, the premier provider of materials information technology, expands our portfolio into this important area, giving customers access to materials intelligence, including data that is critical to successful simulations.
|
Date of Closing
|
|
Company
|
|
Details
|
November 15, 2017
|
|
3DSIM
|
|
3DSIM, a developer of premier additive manufacturing technology, gives us a complete additive manufacturing simulation workflow solution. 3DSIM's software solutions empower manufacturers, designers, materials scientists and engineers to achieve their objectives through simulation-driven innovation rather than physical trial and error.
|
July 5, 2017
|
|
Computational Engineering International, Inc.
(CEI Inc.)
|
|
CEI Inc., the developer of EnSight, aids engineers and scientists in their ability to analyze, visualize and communicate large simulation data sets in clear, higher-resolution outputs.
|
March 10, 2017
|
|
CLK Design Automation (CLK-DA)
|
|
CLK-DA offers fast transistor simulation technology that complements our semiconductor product portfolio.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
make it more difficult for us to satisfy our debt obligations and other ongoing business obligations, which may result in defaults;
|
•
|
result in an event of default if we fail to comply with the financial and other covenants contained in the agreement governing our debt, which could result in all of our debt becoming immediately due and payable or require us to negotiate an amendment to financial or other covenants that could cause us to incur additional fees and expenses;
|
•
|
limit our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;
|
•
|
reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;
|
•
|
increase our vulnerability to the impact of adverse economic and industry conditions;
|
•
|
expose us to the risk of increased interest rates as certain of our borrowings, including borrowings under the credit facility, are at variable rates of interest;
|
•
|
limit our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industries in which we operate, and the overall economy;
|
•
|
place us at a competitive disadvantage compared to other, less leveraged competitors; and
|
•
|
increase our cost of borrowing.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
As of December 31,
|
||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
ANSYS, Inc.
|
$100
|
|
$113
|
|
$113
|
|
$180
|
|
$174
|
|
$314
|
Nasdaq Composite
|
$100
|
|
$107
|
|
$116
|
|
$151
|
|
$147
|
|
$200
|
S&P 500 Stock Index
|
$100
|
|
$101
|
|
$114
|
|
$138
|
|
$132
|
|
$174
|
New Peer Group(1)
|
$100
|
|
$103
|
|
$119
|
|
$169
|
|
$193
|
|
$273
|
Old Peer Group
|
$100
|
|
$103
|
|
$128
|
|
$187
|
|
$214
|
|
$305
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2019(1)
|
|
2018(2)
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Total revenue
|
|
$
|
1,515,892
|
|
|
$
|
1,293,636
|
|
|
$
|
1,095,250
|
|
|
$
|
988,465
|
|
|
$
|
942,753
|
|
Operating income
|
|
515,040
|
|
|
476,574
|
|
|
390,728
|
|
|
376,242
|
|
|
353,679
|
|
|||||
Net income
|
|
451,295
|
|
|
419,375
|
|
|
259,251
|
|
|
265,636
|
|
|
252,521
|
|
|||||
Earnings per share – basic
|
|
$
|
5.36
|
|
|
$
|
4.99
|
|
|
$
|
3.05
|
|
|
$
|
3.05
|
|
|
$
|
2.82
|
|
Weighted average shares – basic
|
|
84,259
|
|
|
83,973
|
|
|
84,988
|
|
|
87,227
|
|
|
89,561
|
|
|||||
Earnings per share – diluted
|
|
$
|
5.25
|
|
|
$
|
4.88
|
|
|
$
|
2.98
|
|
|
$
|
2.99
|
|
|
$
|
2.76
|
|
Weighted average shares – diluted
|
|
85,925
|
|
|
85,913
|
|
|
86,854
|
|
|
88,969
|
|
|
91,502
|
|
|||||
Total assets
|
|
$
|
4,838,887
|
|
|
$
|
3,265,964
|
|
|
$
|
2,941,623
|
|
|
$
|
2,800,526
|
|
|
$
|
2,729,904
|
|
Working capital
|
|
860,340
|
|
|
786,410
|
|
|
661,713
|
|
|
630,301
|
|
|
592,280
|
|
|||||
Long-term liabilities
|
|
690,368
|
|
|
91,650
|
|
|
87,239
|
|
|
53,021
|
|
|
51,331
|
|
|||||
Stockholders' equity
|
|
3,453,379
|
|
|
2,649,547
|
|
|
2,245,831
|
|
|
2,208,405
|
|
|
2,194,427
|
|
|||||
Cash provided by operating activities(3)
|
|
499,936
|
|
|
484,988
|
|
|
427,660
|
|
|
365,980
|
|
|
375,699
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year Ended December 31, 2019
|
||||
|
GAAP
|
|
Non-GAAP
|
||
Revenue
|
17.2
|
%
|
|
17.3
|
%
|
Operating income
|
8.1
|
%
|
|
12.0
|
%
|
Diluted earnings per share
|
7.6
|
%
|
|
10.0
|
%
|
|
Year Ended December 31, 2019
|
|
Americas
|
25.4
|
%
|
Europe, Middle East and Africa (EMEA)
|
13.8
|
%
|
Asia-Pacific
|
15.6
|
%
|
Total
|
19.0
|
%
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Software licenses
|
|
$
|
699,630
|
|
|
$
|
576,717
|
|
|
$
|
624,964
|
|
Maintenance and service
|
|
816,262
|
|
|
716,919
|
|
|
470,286
|
|
|||
Total revenue
|
|
1,515,892
|
|
|
1,293,636
|
|
|
1,095,250
|
|
|||
Cost of sales:
|
|
|
|
|
|
|
||||||
Software licenses
|
|
23,944
|
|
|
18,619
|
|
|
34,421
|
|
|||
Amortization
|
|
21,710
|
|
|
27,034
|
|
|
36,794
|
|
|||
Maintenance and service
|
|
120,619
|
|
|
110,232
|
|
|
78,949
|
|
|||
Total cost of sales
|
|
166,273
|
|
|
155,885
|
|
|
150,164
|
|
|||
Gross profit
|
|
1,349,619
|
|
|
1,137,751
|
|
|
945,086
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
|
521,200
|
|
|
413,580
|
|
|
338,640
|
|
|||
Research and development
|
|
298,210
|
|
|
233,802
|
|
|
202,746
|
|
|||
Amortization
|
|
15,169
|
|
|
13,795
|
|
|
12,972
|
|
|||
Total operating expenses
|
|
834,579
|
|
|
661,177
|
|
|
554,358
|
|
|||
Operating income
|
|
515,040
|
|
|
476,574
|
|
|
390,728
|
|
|||
Interest income
|
|
12,796
|
|
|
11,419
|
|
|
6,962
|
|
|||
Interest expense
|
|
(3,461
|
)
|
|
(59
|
)
|
|
(86
|
)
|
|||
Other expense, net
|
|
(1,792
|
)
|
|
(849
|
)
|
|
(1,910
|
)
|
|||
Income before income tax provision
|
|
522,583
|
|
|
487,085
|
|
|
395,694
|
|
|||
Income tax provision
|
|
71,288
|
|
|
67,710
|
|
|
136,443
|
|
|||
Net income
|
|
$
|
451,295
|
|
|
$
|
419,375
|
|
|
$
|
259,251
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||
(in thousands, except percentages)
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|
Constant Currency %
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Lease licenses
|
$
|
406,043
|
|
|
$
|
275,619
|
|
|
$
|
130,424
|
|
|
47.3
|
|
|
49.4
|
|
Perpetual licenses
|
293,587
|
|
|
301,098
|
|
|
(7,511
|
)
|
|
(2.5
|
)
|
|
(1.1
|
)
|
|||
Software licenses
|
699,630
|
|
|
576,717
|
|
|
122,913
|
|
|
21.3
|
|
|
23.1
|
|
|||
Maintenance
|
760,574
|
|
|
676,883
|
|
|
83,691
|
|
|
12.4
|
|
|
14.3
|
|
|||
Service
|
55,688
|
|
|
40,036
|
|
|
15,652
|
|
|
39.1
|
|
|
41.5
|
|
|||
Maintenance and service
|
816,262
|
|
|
716,919
|
|
|
99,343
|
|
|
13.9
|
|
|
15.8
|
|
|||
Total revenue
|
$
|
1,515,892
|
|
|
$
|
1,293,636
|
|
|
$
|
222,256
|
|
|
17.2
|
|
|
19.0
|
|
(in thousands)
|
Year Ended December 31, 2019
|
||
Euro
|
$
|
(17,361
|
)
|
South Korean Won
|
(5,097
|
)
|
|
British Pound
|
(1,881
|
)
|
|
Japanese Yen
|
1,791
|
|
|
Other
|
(1,460
|
)
|
|
Total
|
$
|
(24,008
|
)
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||
2019
|
|
2018
|
|
Change
|
||||||||||||||
(in thousands, except percentages)
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
|||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Software licenses
|
$
|
23,944
|
|
|
1.6
|
|
$
|
18,619
|
|
|
1.4
|
|
$
|
5,325
|
|
|
28.6
|
|
Amortization
|
21,710
|
|
|
1.4
|
|
27,034
|
|
|
2.1
|
|
(5,324
|
)
|
|
(19.7
|
)
|
|||
Maintenance and service
|
120,619
|
|
|
8.0
|
|
110,232
|
|
|
8.5
|
|
10,387
|
|
|
9.4
|
|
|||
Total cost of sales
|
166,273
|
|
|
11.0
|
|
155,885
|
|
|
12.1
|
|
10,388
|
|
|
6.7
|
|
|||
Gross profit
|
$
|
1,349,619
|
|
|
89.0
|
|
$
|
1,137,751
|
|
|
87.9
|
|
$
|
211,868
|
|
|
18.6
|
|
•
|
Increased salaries of $4.0 million.
|
•
|
Increased stock-based compensation of $3.3 million.
|
•
|
Increased consulting costs of $1.7 million.
|
•
|
Increased IT maintenance and software hosting costs of $1.3 million.
|
•
|
Decreased costs related to foreign exchange translation of $2.0 million due to a stronger U.S. Dollar.
|
|
Year Ended December 31,
|
|
|
|
|
||||||||||||
2019
|
|
2018
|
|
Change
|
|||||||||||||
(in thousands, except percentages)
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
$
|
521,200
|
|
|
34.4
|
|
$
|
413,580
|
|
|
32.0
|
|
$
|
107,620
|
|
|
26.0
|
Research and development
|
298,210
|
|
|
19.7
|
|
233,802
|
|
|
18.1
|
|
64,408
|
|
|
27.5
|
|||
Amortization
|
15,169
|
|
|
1.0
|
|
13,795
|
|
|
1.1
|
|
1,374
|
|
|
10.0
|
|||
Total operating expenses
|
$
|
834,579
|
|
|
55.1
|
|
$
|
661,177
|
|
|
51.1
|
|
$
|
173,402
|
|
|
26.2
|
•
|
Increased salaries, incentive compensation and other headcount-related costs of $63.7 million.
|
•
|
Increased stock-based compensation of $13.5 million.
|
•
|
Increased business travel of $6.5 million.
|
•
|
Increased marketing expenses of $5.4 million.
|
•
|
Increased professional fees of $4.5 million.
|
•
|
Increased consulting costs of $4.2 million.
|
•
|
Decreased costs related to foreign exchange translation of $7.1 million due to a stronger U.S. Dollar.
|
•
|
Increased salaries, incentive compensation and other headcount-related costs of $41.1 million.
|
•
|
Increased stock-based compensation of $16.0 million.
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Foreign currency losses, net
|
$
|
(2,510
|
)
|
|
$
|
(3,058
|
)
|
Investment gains, net
|
333
|
|
|
2,204
|
|
||
Other
|
385
|
|
|
5
|
|
||
Total other expense, net
|
$
|
(1,792
|
)
|
|
$
|
(849
|
)
|
|
Year Ended December 31,
|
||||||
(in thousands, except percentages)
|
2019
|
|
2018
|
||||
Income before income tax provision
|
$
|
522,583
|
|
|
$
|
487,085
|
|
Income tax provision
|
$
|
71,288
|
|
|
$
|
67,710
|
|
Effective tax rate
|
13.6
|
%
|
|
13.9
|
%
|
|
Year Ended December 31,
|
||||||
(in thousands, except per share data)
|
2019
|
|
2018
|
||||
Net income
|
$
|
451,295
|
|
|
$
|
419,375
|
|
Diluted earnings per share
|
$
|
5.25
|
|
|
$
|
4.88
|
|
Weighted average shares outstanding - diluted
|
85,925
|
|
|
85,913
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||
(in thousands, except percentages)
|
2018
(ASC 606) |
|
2017
(ASC 605) |
|
Amount
|
|
%
|
|
Constant Currency %
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Lease licenses
|
$
|
275,619
|
|
|
$
|
376,886
|
|
|
$
|
(101,267
|
)
|
|
(26.9
|
)
|
|
(27.4
|
)
|
Perpetual licenses
|
301,098
|
|
|
248,078
|
|
|
53,020
|
|
|
21.4
|
|
|
20.2
|
|
|||
Software licenses
|
576,717
|
|
|
624,964
|
|
|
(48,247
|
)
|
|
(7.7
|
)
|
|
(8.5
|
)
|
|||
Maintenance
|
676,883
|
|
|
440,428
|
|
|
236,455
|
|
|
53.7
|
|
|
51.6
|
|
|||
Service
|
40,036
|
|
|
29,858
|
|
|
10,178
|
|
|
34.1
|
|
|
33.1
|
|
|||
Maintenance and service
|
716,919
|
|
|
470,286
|
|
|
246,633
|
|
|
52.4
|
|
|
50.4
|
|
|||
Total revenue
|
$
|
1,293,636
|
|
|
$
|
1,095,250
|
|
|
$
|
198,386
|
|
|
18.1
|
|
|
16.8
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||
(in thousands, except percentages)
|
2018
(ASC 605) |
|
2017
(ASC 605) |
|
Amount
|
|
%
|
|
Constant Currency %
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Lease licenses
|
$
|
421,268
|
|
|
$
|
376,886
|
|
|
$
|
44,382
|
|
|
11.8
|
|
10.7
|
Perpetual licenses
|
255,578
|
|
|
248,078
|
|
|
7,500
|
|
|
3.0
|
|
2.0
|
|||
Software licenses
|
676,846
|
|
|
624,964
|
|
|
51,882
|
|
|
8.3
|
|
7.2
|
|||
Maintenance
|
499,510
|
|
|
440,428
|
|
|
59,082
|
|
|
13.4
|
|
11.6
|
|||
Service
|
40,113
|
|
|
29,858
|
|
|
10,255
|
|
|
34.3
|
|
33.4
|
|||
Maintenance and service
|
539,623
|
|
|
470,286
|
|
|
69,337
|
|
|
14.7
|
|
13.0
|
|||
Total revenue
|
$
|
1,216,469
|
|
|
$
|
1,095,250
|
|
|
$
|
121,219
|
|
|
11.1
|
|
9.7
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||
2018
|
|
2017
|
|
Change
|
||||||||||||||
(in thousands, except percentages)
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
|||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Software licenses
|
$
|
18,619
|
|
|
1.4
|
|
$
|
34,421
|
|
|
3.1
|
|
$
|
(15,802
|
)
|
|
(45.9
|
)
|
Amortization
|
27,034
|
|
|
2.1
|
|
36,794
|
|
|
3.4
|
|
(9,760
|
)
|
|
(26.5
|
)
|
|||
Maintenance and service
|
110,232
|
|
|
8.5
|
|
78,949
|
|
|
7.2
|
|
31,283
|
|
|
39.6
|
|
|||
Total cost of sales
|
155,885
|
|
|
12.1
|
|
150,164
|
|
|
13.7
|
|
5,721
|
|
|
3.8
|
|
|||
Gross profit
|
$
|
1,137,751
|
|
|
87.9
|
|
$
|
945,086
|
|
|
86.3
|
|
$
|
192,665
|
|
|
20.4
|
|
•
|
Reclassification of $18.2 million of cost of sales, previously reflected within software licenses, to maintenance and service due to the adoption of ASC 606 in 2018.
|
•
|
OPTIS-related software license expenses of $1.6 million for the period from the acquisition date (May 2, 2018) through December 31, 2018.
|
•
|
Reclassification of $18.2 million of cost of sales, previously reflected within software licenses, to maintenance and service due to the adoption of ASC 606 in 2018.
|
•
|
Increased third-party technical support of $5.5 million.
|
•
|
OPTIS-related maintenance and service expenses of $2.8 million for the period from the acquisition date (May 2, 2018) through December 31, 2018.
|
•
|
Increased salaries of $2.1 million.
|
|
Year Ended December 31,
|
|
|
|
|
||||||||||||
2018
|
|
2017
|
|
Change
|
|||||||||||||
(in thousands, except percentages)
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
$
|
413,580
|
|
|
32.0
|
|
$
|
338,640
|
|
|
30.9
|
|
$
|
74,940
|
|
|
22.1
|
Research and development
|
233,802
|
|
|
18.1
|
|
202,746
|
|
|
18.5
|
|
31,056
|
|
|
15.3
|
|||
Amortization
|
13,795
|
|
|
1.1
|
|
12,972
|
|
|
1.2
|
|
823
|
|
|
6.3
|
|||
Total operating expenses
|
$
|
661,177
|
|
|
51.1
|
|
$
|
554,358
|
|
|
50.6
|
|
$
|
106,819
|
|
|
19.3
|
•
|
Increased salaries, incentive compensation and other headcount-related costs of $35.2 million.
|
•
|
Increased stock-based compensation of $15.3 million.
|
•
|
OPTIS-related selling, general and administrative expenses of $13.8 million for the period from the acquisition date (May 2, 2018) through December 31, 2018.
|
•
|
Increased business travel of $3.9 million.
|
•
|
Increased severance expenses of $3.7 million.
|
•
|
Decreased consulting costs of $7.1 million.
|
•
|
Increased salaries, incentive compensation and other headcount-related costs of $15.2 million.
|
•
|
Increased stock-based compensation of $11.6 million.
|
•
|
OPTIS-related research and development expenses of $5.9 million for the period from the acquisition date (May 2, 2018) through December 31, 2018.
|
•
|
Increased IT maintenance and software hosting costs of $1.5 million.
|
•
|
Restructuring costs of $6.8 million related to 2017 workforce realignment activities that did not reoccur in 2018.
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Foreign currency losses, net
|
$
|
(3,058
|
)
|
|
$
|
(1,935
|
)
|
Investment gains, net
|
2,204
|
|
|
24
|
|
||
Other
|
5
|
|
|
1
|
|
||
Total other expense, net
|
$
|
(849
|
)
|
|
$
|
(1,910
|
)
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except percentages)
|
2018
(ASC 606) |
|
2018
(ASC 605) |
|
2017
(ASC 605) |
||||||
Income before income tax provision
|
$
|
487,085
|
|
|
$
|
409,918
|
|
|
$
|
395,694
|
|
Income tax provision
|
$
|
67,710
|
|
|
$
|
53,067
|
|
|
$
|
136,443
|
|
Effective tax rate
|
13.9
|
%
|
|
12.9
|
%
|
|
34.5
|
%
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2018
(ASC 606)
|
|
2018
(ASC 605)
|
|
2017
(ASC 605)
|
||||||
Net income
|
$
|
419,375
|
|
|
$
|
356,851
|
|
|
$
|
259,251
|
|
Diluted earnings per share
|
$
|
4.88
|
|
|
$
|
4.15
|
|
|
$
|
2.98
|
|
Weighted average shares outstanding - diluted
|
85,913
|
|
|
85,913
|
|
|
86,854
|
|
|
ASC 606
|
||||||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
(in thousands, except percentages and per share data)
|
GAAP Results
|
|
Adjustments
|
|
Non-GAAP
Results |
|
GAAP Results
|
|
Adjustments
|
|
Non-GAAP
Results |
||||||||||||
Total revenue
|
$
|
1,515,892
|
|
|
$
|
12,514
|
|
(1)
|
$
|
1,528,406
|
|
|
$
|
1,293,636
|
|
|
$
|
9,442
|
|
(4)
|
$
|
1,303,078
|
|
Operating income
|
515,040
|
|
|
177,093
|
|
(2)
|
692,133
|
|
|
476,574
|
|
|
141,442
|
|
(5)
|
618,016
|
|
||||||
Operating profit margin
|
34.0
|
%
|
|
|
|
45.3
|
%
|
|
36.8
|
%
|
|
|
|
47.4
|
%
|
||||||||
Net income
|
$
|
451,295
|
|
|
$
|
113,702
|
|
(3)
|
$
|
564,997
|
|
|
$
|
419,375
|
|
|
$
|
94,510
|
|
(6)
|
$
|
513,885
|
|
Earnings per share – diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
$
|
5.25
|
|
|
|
|
$
|
6.58
|
|
|
$
|
4.88
|
|
|
|
|
$
|
5.98
|
|
||||
Weighted average shares
|
85,925
|
|
|
|
|
85,925
|
|
|
85,913
|
|
|
|
|
85,913
|
|
(1)
|
Amount represents the revenue not reported during the period as a result of the acquisition accounting adjustment associated with the accounting for deferred revenue in business combinations.
|
(2)
|
Amount represents $116.2 million of stock-based compensation expense, $4.9 million of excess payroll taxes related to stock-based awards, $36.9 million of amortization expense associated with intangible assets acquired in business combinations, $6.6 million of transaction expenses related to business combinations and the $12.5 million adjustment to revenue as reflected in (1) above.
|
(3)
|
Amount represents the impact of the adjustments to operating income referred to in (2) above, decreased for the related income tax impact of $61.2 million, adjustments related to the transition tax associated with the Tax Cuts and Jobs Act of $1.8 million, and rabbi trust income of $0.4 million.
|
(4)
|
Amount represents the revenue not reported during the period as a result of the acquisition accounting adjustment associated with the accounting for deferred revenue in business combinations.
|
(5)
|
Amount represents $83.3 million of stock-based compensation expense, $4.3 million of excess payroll taxes related to stock-based awards, $40.8 million of amortization expense associated with intangible assets acquired in business combinations, $3.5 million of transaction expenses related to business combinations and the $9.4 million adjustment to revenue as reflected in (4) above.
|
(6)
|
Amount represents the impact of the adjustments to operating income referred to in (5) above, decreased for the related income tax impact of $47.9 million and increased for a measurement-period adjustment related to the Tax Cuts and Jobs Act of $0.9 million and rabbi trust expense of $0.1 million.
|
|
ASC 605
|
||||||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
(in thousands, except percentages and per share data)
|
GAAP Results
|
|
Adjustments
|
|
Non-GAAP
Results
|
|
GAAP Results
|
|
Adjustments
|
|
Non-GAAP
Results
|
||||||||||||
Total revenue
|
$
|
1,216,469
|
|
|
$
|
15,583
|
|
(1)
|
$
|
1,232,052
|
|
|
$
|
1,095,250
|
|
|
$
|
2,856
|
|
(4)
|
$
|
1,098,106
|
|
Operating income
|
399,407
|
|
|
147,583
|
|
(2)
|
546,990
|
|
|
390,728
|
|
|
118,567
|
|
(5)
|
509,295
|
|
||||||
Operating profit margin
|
32.8
|
%
|
|
|
|
44.4
|
%
|
|
35.7
|
%
|
|
|
|
46.4
|
%
|
||||||||
Net income
|
$
|
356,851
|
|
|
$
|
98,832
|
|
(3)
|
$
|
455,683
|
|
|
$
|
259,251
|
|
|
$
|
88,663
|
|
(6)
|
$
|
347,914
|
|
Earnings per share – diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share
|
$
|
4.15
|
|
|
|
|
$
|
5.30
|
|
|
$
|
2.98
|
|
|
|
|
$
|
4.01
|
|
||||
Weighted average shares
|
85,913
|
|
|
|
|
85,913
|
|
|
86,854
|
|
|
|
|
86,854
|
|
(1)
|
Amount represents the revenue not reported during the period as a result of the acquisition accounting adjustment associated with the accounting for deferred revenue in business combinations.
|
(2)
|
Amount represents $83.3 million of stock-based compensation expense, $4.3 million of excess payroll taxes related to stock-based awards, $40.8 million of amortization expense associated with intangible assets acquired in business combinations, $3.5 million of transaction expenses related to business combinations and the $15.6 million adjustment to revenue as reflected in (1) above.
|
(3)
|
Amount represents the impact of the adjustments to operating income referred to in (2) above, decreased for the related income tax impact of $49.7 million and increased for a measurement-period adjustment related to the Tax Cuts and Jobs Act of $0.9 million and rabbi trust expense of $0.1 million.
|
(4)
|
Amount represents the revenue not reported during the period as a result of the acquisition accounting adjustment associated with the accounting for deferred revenue in business combinations.
|
(5)
|
Amount represents $53.2 million of stock-based compensation expense, $49.8 million of amortization expense associated with intangible assets acquired in business combinations, $11.7 million of restructuring charges, $1.1 million of transaction expenses related to business combinations and the $2.9 million adjustment to revenue as reflected in (4) above.
|
(6)
|
Amount represents the impact of the adjustments to operating income referred to in (5) above, decreased for the related income tax impact of $52.5 million, excluding the impact of the Tax Cuts and Jobs Act, and rabbi trust income of $0.1 million, and increased for total net impacts of the Tax Cuts and Jobs Act of $22.7 million.
|
|
|
As of December 31,
|
|
Change
|
||||||||||
(in thousands, except percentages)
|
|
2019
|
|
2018
|
|
Amount
|
|
%
|
||||||
Cash, cash equivalents and short-term investments
|
|
$
|
872,382
|
|
|
$
|
777,364
|
|
|
$
|
95,018
|
|
|
12.2
|
Working capital
|
|
$
|
860,340
|
|
|
$
|
786,410
|
|
|
$
|
73,930
|
|
|
9.4
|
|
As of December 31,
|
||||||||||
(in thousands, except percentages)
|
2019
|
|
% of Total
|
|
2018
|
|
% of Total
|
||||
Domestic
|
$
|
626,433
|
|
|
71.8
|
|
$
|
616,249
|
|
|
79.3
|
Foreign
|
245,949
|
|
|
28.2
|
|
161,115
|
|
|
20.7
|
||
Total
|
$
|
872,382
|
|
|
|
|
$
|
777,364
|
|
|
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||
Net cash provided by operating activities
|
|
$
|
499,936
|
|
|
$
|
484,988
|
|
|
$
|
427,660
|
|
|
$
|
14,948
|
|
|
$
|
57,328
|
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||
Net cash used in investing activities
|
|
$
|
(833,548
|
)
|
|
$
|
(312,231
|
)
|
|
$
|
(94,665
|
)
|
|
$
|
(521,317
|
)
|
|
$
|
(217,566
|
)
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||
Net cash provided by (used in) financing activities
|
|
$
|
429,409
|
|
|
$
|
(262,675
|
)
|
|
$
|
(294,651
|
)
|
|
$
|
692,084
|
|
|
$
|
31,976
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2019
|
|
2018
|
|
2017
|
||||||
Number of shares repurchased
|
330
|
|
|
1,674
|
|
|
2,750
|
|
|||
Average price paid per share
|
$
|
179.41
|
|
|
$
|
161.12
|
|
|
$
|
122.20
|
|
Total cost
|
$
|
59,116
|
|
|
$
|
269,801
|
|
|
$
|
336,042
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
|
Total
|
|
Within 1 year
|
|
2 – 3 years
|
|
4 – 5 years
|
|
After 5 years
|
||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Principal payments(1)
|
|
$
|
500,000
|
|
|
$
|
—
|
|
|
$
|
25,000
|
|
|
$
|
475,000
|
|
|
$
|
—
|
|
Interest payments(2)
|
|
70,488
|
|
|
17,372
|
|
|
29,400
|
|
|
23,716
|
|
|
—
|
|
|||||
Global headquarters operating lease(3)
|
|
45,199
|
|
|
4,464
|
|
|
8,928
|
|
|
8,944
|
|
|
22,863
|
|
|||||
Other operating leases(4)
|
|
83,566
|
|
|
17,153
|
|
|
27,127
|
|
|
15,990
|
|
|
23,296
|
|
|||||
Unconditional purchase obligations(5)
|
|
71,382
|
|
|
37,183
|
|
|
24,723
|
|
|
9,476
|
|
|
—
|
|
|||||
Obligations related to uncertain tax positions, including interest and penalties(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other long-term obligations(7)
|
|
44,767
|
|
|
22,776
|
|
|
10,568
|
|
|
2,856
|
|
|
8,567
|
|
|||||
Total contractual obligations
|
|
$
|
815,402
|
|
|
$
|
98,948
|
|
|
$
|
125,746
|
|
|
$
|
535,982
|
|
|
$
|
54,726
|
|
(1)
|
We repaid $75.0 million of the unsecured term loan in January 2020 prior to its scheduled maturity date. As such, the payment is reflected as current on our consolidated balance sheet but not in the table above.
|
(2)
|
Interest on the long-term debt is estimated using the interest rate as of December 31, 2019, as the interest rate is variable. For additional information, see Note 10 to the consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K. The interest payments reflected in the table above have not been reduced for the effect of the $75.0 million principal payment discussed in (1) above.
|
(3)
|
We previously entered into a lease agreement for 186,000 square feet of rentable space located in an office facility in Canonsburg, Pennsylvania, which serves as our headquarters. The term of the lease is 183 months, beginning on October 1, 2014 and expiring on December 31, 2029. We have a one-time right to terminate the lease on December 31, 2025 by providing the landlord with at least 18 months' prior written notice of such termination.
|
(4)
|
Other operating leases primarily include noncancellable lease commitments for our other domestic and international offices as well as certain operating equipment.
|
(5)
|
Unconditional purchase obligations primarily include royalties and software licenses and services, which are unrecorded as of December 31, 2019.
|
(6)
|
We have $64.4 million of unrecognized tax benefits, including estimated interest and penalties, that have been recorded as liabilities in accordance with income tax accounting guidance for which we are uncertain as to if or when such amounts may be settled. As a result, such amounts are excluded from the table above.
|
(7)
|
Other long-term obligations primarily include third-party commissions of $28.3 million; post-employment benefits, including pension obligations, of $12.7 million for certain foreign locations; and office space restoration of $3.1 million. These amounts include the related current portions when applicable.
|
|
Year Ended December 31,
|
||||
Assumptions used in Monte Carlo lattice pricing model
|
2019
|
|
2018
|
|
2017
|
Risk-free interest rate
|
2.5%
|
|
2.4%
|
|
1.5%
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
Expected volatility—Ansys stock price
|
23%
|
|
21%
|
|
19%
|
Expected volatility—Nasdaq Composite Index
|
16%
|
|
15%
|
|
15%
|
Expected term
|
2.8 years
|
|
2.8 years
|
|
2.8 years
|
Correlation factor
|
0.71
|
|
0.65
|
|
0.70
|
Weighted average fair value per share
|
$238.99
|
|
$191.76
|
|
$120.94
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
(in thousands)
|
Year Ended December 31, 2019
|
||
Euro
|
$
|
(17,361
|
)
|
South Korean Won
|
(5,097
|
)
|
|
British Pound
|
(1,881
|
)
|
|
Japanese Yen
|
1,791
|
|
|
Other
|
(1,460
|
)
|
|
Total
|
$
|
(24,008
|
)
|
|
Period End Exchange Rates
|
||||||||||
As of
|
GBP/USD
|
|
EUR/USD
|
|
USD/JPY
|
|
USD/KRW
|
||||
December 31, 2016
|
1.234
|
|
|
1.051
|
|
|
116.918
|
|
|
1,208.313
|
|
December 31, 2017
|
1.351
|
|
|
1.200
|
|
|
112.701
|
|
|
1,068.376
|
|
December 31, 2018
|
1.276
|
|
|
1.147
|
|
|
109.589
|
|
|
1,115.325
|
|
December 31, 2019
|
1.326
|
|
|
1.121
|
|
|
108.637
|
|
|
1,156.069
|
|
|
Average Exchange Rates
|
||||||||||
Year Ended
|
GBP/USD
|
|
EUR/USD
|
|
USD/JPY
|
|
USD/KRW
|
||||
December 31, 2017
|
1.289
|
|
|
1.130
|
|
|
112.139
|
|
|
1,130.945
|
|
December 31, 2018
|
1.335
|
|
|
1.181
|
|
|
110.405
|
|
|
1,100.786
|
|
December 31, 2019
|
1.277
|
|
|
1.119
|
|
|
109.033
|
|
|
1,165.479
|
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
Fiscal Quarter Ended
|
||||||||||||||
(in thousands, except per share data)
|
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
||||||||
Revenue
|
|
$
|
486,228
|
|
|
$
|
343,899
|
|
|
$
|
368,635
|
|
|
$
|
317,130
|
|
Gross profit
|
|
436,632
|
|
|
302,534
|
|
|
328,138
|
|
|
282,315
|
|
||||
Operating income
|
|
185,716
|
|
|
105,047
|
|
|
128,628
|
|
|
95,649
|
|
||||
Net income
|
|
165,852
|
|
|
89,463
|
|
|
109,750
|
|
|
86,230
|
|
||||
Earnings per share – basic
|
|
$
|
1.95
|
|
|
$
|
1.06
|
|
|
$
|
1.31
|
|
|
$
|
1.03
|
|
Earnings per share – diluted
|
|
$
|
1.91
|
|
|
$
|
1.04
|
|
|
$
|
1.28
|
|
|
$
|
1.01
|
|
|
|
Fiscal Quarter Ended
|
||||||||||||||
(in thousands, except per share data)
|
|
December 31,
2018 |
|
September 30,
2018 |
|
June 30,
2018 |
|
March 31,
2018 |
||||||||
Revenue
|
|
$
|
415,432
|
|
|
$
|
289,418
|
|
|
$
|
305,913
|
|
|
$
|
282,873
|
|
Gross profit
|
|
375,343
|
|
|
253,110
|
|
|
265,463
|
|
|
243,835
|
|
||||
Operating income
|
|
179,936
|
|
|
93,024
|
|
|
108,553
|
|
|
95,061
|
|
||||
Net income
|
|
153,163
|
|
|
89,336
|
|
|
92,596
|
|
|
84,280
|
|
||||
Earnings per share – basic
|
|
$
|
1.83
|
|
|
$
|
1.06
|
|
|
$
|
1.10
|
|
|
$
|
1.00
|
|
Earnings per share – diluted
|
|
$
|
1.79
|
|
|
$
|
1.04
|
|
|
$
|
1.08
|
|
|
$
|
0.98
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS
|
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Plan Category
|
|
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights(1)
|
|
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(excluding securities
reflected in column
(a))
|
||||
Equity Compensation Plans Approved by Security Holders
|
|
|
|
|
|
|
||||
1996 Stock Option and Grant Plan
|
|
2,617,302(2)
|
|
|
$
|
69.69
|
|
|
4,064,783(3)
|
|
1996 Employee Stock Purchase Plan
|
|
(4)
|
|
(5)
|
|
191,960
|
|
|||
Equity Compensation Plans Not Approved by Security Holders(6)
|
|
|
|
|
|
|
||||
Ansoft Corporation 2006 Stock Incentive Plan
|
|
18,650
|
|
|
$
|
48.97
|
|
|
—
|
|
Apache Design Solutions, Inc. 2001 Stock/Option Issuance Plan
|
|
31,031
|
|
|
$
|
21.27
|
|
|
—
|
|
SpaceClaim Corporation 2005 Stock Incentive Plan
|
|
1,253
|
|
|
$
|
23.41
|
|
|
—
|
|
Gear Design Solutions, Inc. Stock Incentive Plan
|
|
3,740
|
|
|
$
|
12.26
|
|
|
—
|
|
Total
|
|
2,671,976
|
|
|
|
|
4,256,743
|
|
(1)
|
The weighted average exercise price does not take into account the shares for outstanding restricted stock units or deferred stock awards, which have no exercise price.
|
(2)
|
Includes 1,617,974 shares for outstanding restricted stock units for employees, 929,559 shares for outstanding stock options, 9,688 shares for outstanding restricted stock units for non-employee directors and 60,081 shares for deferred stock awards for non-employee directors. Restricted stock units with a performance or market condition are included based on target performance, unless performance is otherwise known.
|
(3)
|
The number of securities remaining available for future issuance assumes maximum attainment for awards with a performance condition or a market condition.
|
(4)
|
The number of shares issuable with respect to the current offering period is not determinable until the end of the period.
|
(5)
|
The per share purchase price of shares issuable with respect to the current offering period is not determinable until the end of the period.
|
(6)
|
We no longer issue awards under equity compensation plans not approved by security holders.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
Documents Filed as Part of this Annual Report on Form 10-K:
|
1.
|
Financial Statements: The following consolidated financial statements and reports are filed as part of this report:
|
-
|
||
-
|
||
-
|
||
-
|
||
-
|
||
-
|
||
-
|
||
-
|
2.
|
Financial Statement Schedule: The following financial statement schedule is filed as part of this report and should be read in conjunction with the consolidated financial statements.
|
3.
|
Exhibits: The exhibits listed in the accompanying Exhibit Index immediately following the financial statement schedule are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K.
|
(b)
|
Exhibits:
|
(c)
|
Financial Statement Schedule:
|
/s/ AJEI S. GOPAL
|
|
/s/ MARIA T. SHIELDS
|
Ajei S. Gopal
|
|
Maria T. Shields
|
President and Chief Executive Officer
|
|
Chief Financial Officer
|
February 27, 2020
|
|
February 27, 2020
|
•
|
We tested the effectiveness of controls over TBL revenue, including those over the determination of the estimated standalone selling price of the Company’s licenses and services, as well as the allocation of this standalone selling price within the arrangement.
|
•
|
We evaluated the pricing relationship between PCS and perpetual licenses on the net licensing fee of the arrangement, as well as the Company’s renewal rate of PCS sales on perpetual licenses through those arrangements selected for testing that contained both elements as a consideration point of the value relationship between the term software license and PCS when a customer purchases a bundled TBL.
|
•
|
We evaluated the estimated economic life of the Company’s software through observable data points.
|
•
|
Through our current and historical audit procedures, we confirmed that the term software license portion and PCS portion of an arrangement are not sold separately from one another.
|
•
|
We selected a sample of arrangements and performed the following:
|
–
|
Compared the list price of the TBL to the consideration received from the customer and recalculated the discount from list price for each arrangement
|
–
|
Evaluated whether management appropriately calculated the estimated standalone selling price for the TBL
|
–
|
Tested management’s identification of distinct performance obligations
|
–
|
Tested the mathematical accuracy of revenue recognized at a point in time or over time based upon the identification of TBLs within the arrangement
|
•
|
We tested the effectiveness of controls over the valuation of the developed software and core technologies intangible asset, including management’s controls over the selection of the royalty rate, forecasts of future revenue growth, and selection of the discount rate.
|
•
|
We assessed the reasonableness of management’s forecasts of future revenue growth by comparing the projections to historical results and certain industry data.
|
•
|
We selected a sample of historical revenue transactions included within the valuation model and evaluated the appropriate recognition of revenue within the relevant period.
|
•
|
With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) royalty rate, and (3) discount rate by:
|
–
|
Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation
|
–
|
Evaluating the selected royalty rate against market data of comparable licensing agreements, as well as historical licensing agreements
|
–
|
Developing a range of independent estimates and comparing those to the discount rate selected by management
|
/s/ Deloitte & Touche LLP
|
Pittsburgh, Pennsylvania
|
February 27, 2020
|
We have served as the Company's auditor since 2002.
|
/s/ Deloitte & Touche LLP
|
Pittsburgh, Pennsylvania
|
February 27, 2020
|
|
December 31,
|
||||||
(in thousands, except share and per share data)
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
872,094
|
|
|
$
|
777,139
|
|
Short-term investments
|
288
|
|
|
225
|
|
||
Accounts receivable, less allowance for doubtful accounts of $8,700 and $8,000, respectively
|
433,479
|
|
|
317,700
|
|
||
Other receivables and current assets
|
249,619
|
|
|
216,113
|
|
||
Total current assets
|
1,555,480
|
|
|
1,311,177
|
|
||
Long-term assets:
|
|
|
|
||||
Property and equipment, net
|
83,636
|
|
|
61,655
|
|
||
Operating lease right-of-use assets
|
105,671
|
|
|
—
|
|
||
Goodwill
|
2,413,280
|
|
|
1,572,455
|
|
||
Other intangible assets, net
|
476,711
|
|
|
211,272
|
|
||
Other long-term assets
|
180,032
|
|
|
82,775
|
|
||
Deferred income taxes
|
24,077
|
|
|
26,630
|
|
||
Total long-term assets
|
3,283,407
|
|
|
1,954,787
|
|
||
Total assets
|
$
|
4,838,887
|
|
|
$
|
3,265,964
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
14,298
|
|
|
$
|
7,953
|
|
Accrued bonuses and commissions
|
101,546
|
|
|
79,945
|
|
||
Accrued income taxes
|
9,996
|
|
|
8,726
|
|
||
Current portion of long-term debt
|
75,000
|
|
|
—
|
|
||
Other accrued expenses and liabilities
|
142,947
|
|
|
99,559
|
|
||
Deferred revenue
|
351,353
|
|
|
328,584
|
|
||
Total current liabilities
|
695,140
|
|
|
524,767
|
|
||
Long-term liabilities:
|
|
|
|
||||
Deferred income taxes
|
78,643
|
|
|
30,077
|
|
||
Long-term operating lease liabilities
|
91,768
|
|
|
—
|
|
||
Long-term debt
|
423,531
|
|
|
—
|
|
||
Other long-term liabilities
|
96,426
|
|
|
61,573
|
|
||
Total long-term liabilities
|
690,368
|
|
|
91,650
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $.01 par value; 2,000,000 shares authorized; zero shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value; 300,000,000 shares authorized; 94,627,585 and 93,236,023 shares issued, respectively
|
946
|
|
|
932
|
|
||
Additional paid-in capital
|
1,188,939
|
|
|
867,462
|
|
||
Retained earnings
|
3,370,706
|
|
|
2,919,411
|
|
||
Treasury stock, at cost: 8,893,177 and 9,601,670 shares, respectively
|
(1,041,831
|
)
|
|
(1,075,879
|
)
|
||
Accumulated other comprehensive loss
|
(65,381
|
)
|
|
(62,379
|
)
|
||
Total stockholders' equity
|
3,453,379
|
|
|
2,649,547
|
|
||
Total liabilities and stockholders' equity
|
$
|
4,838,887
|
|
|
$
|
3,265,964
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Software licenses
|
$
|
699,630
|
|
|
$
|
576,717
|
|
|
$
|
624,964
|
|
Maintenance and service
|
816,262
|
|
|
716,919
|
|
|
470,286
|
|
|||
Total revenue
|
1,515,892
|
|
|
1,293,636
|
|
|
1,095,250
|
|
|||
Cost of sales:
|
|
|
|
|
|
||||||
Software licenses
|
23,944
|
|
|
18,619
|
|
|
34,421
|
|
|||
Amortization
|
21,710
|
|
|
27,034
|
|
|
36,794
|
|
|||
Maintenance and service
|
120,619
|
|
|
110,232
|
|
|
78,949
|
|
|||
Total cost of sales
|
166,273
|
|
|
155,885
|
|
|
150,164
|
|
|||
Gross profit
|
1,349,619
|
|
|
1,137,751
|
|
|
945,086
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
521,200
|
|
|
413,580
|
|
|
338,640
|
|
|||
Research and development
|
298,210
|
|
|
233,802
|
|
|
202,746
|
|
|||
Amortization
|
15,169
|
|
|
13,795
|
|
|
12,972
|
|
|||
Total operating expenses
|
834,579
|
|
|
661,177
|
|
|
554,358
|
|
|||
Operating income
|
515,040
|
|
|
476,574
|
|
|
390,728
|
|
|||
Interest income
|
12,796
|
|
|
11,419
|
|
|
6,962
|
|
|||
Interest expense
|
(3,461
|
)
|
|
(59
|
)
|
|
(86
|
)
|
|||
Other expense, net
|
(1,792
|
)
|
|
(849
|
)
|
|
(1,910
|
)
|
|||
Income before income tax provision
|
522,583
|
|
|
487,085
|
|
|
395,694
|
|
|||
Income tax provision
|
71,288
|
|
|
67,710
|
|
|
136,443
|
|
|||
Net income
|
$
|
451,295
|
|
|
$
|
419,375
|
|
|
$
|
259,251
|
|
Earnings per share – basic:
|
|
|
|
|
|
||||||
Earnings per share
|
$
|
5.36
|
|
|
$
|
4.99
|
|
|
$
|
3.05
|
|
Weighted average shares
|
84,259
|
|
|
83,973
|
|
|
84,988
|
|
|||
Earnings per share – diluted:
|
|
|
|
|
|
||||||
Earnings per share
|
$
|
5.25
|
|
|
$
|
4.88
|
|
|
$
|
2.98
|
|
Weighted average shares
|
85,925
|
|
|
85,913
|
|
|
86,854
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
451,295
|
|
|
$
|
419,375
|
|
|
$
|
259,251
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(3,002
|
)
|
|
(24,535
|
)
|
|
19,808
|
|
|||
Comprehensive income
|
$
|
448,293
|
|
|
$
|
394,840
|
|
|
$
|
279,059
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
451,295
|
|
|
$
|
419,375
|
|
|
$
|
259,251
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
60,516
|
|
|
59,255
|
|
|
67,678
|
|
|||
Operating lease right-of-use assets amortization
|
18,459
|
|
|
—
|
|
|
—
|
|
|||
Deferred income tax benefit
|
(14,511
|
)
|
|
(33,675
|
)
|
|
(2,693
|
)
|
|||
Provision for bad debts
|
2,928
|
|
|
1,577
|
|
|
1,474
|
|
|||
Stock-based compensation expense
|
116,190
|
|
|
83,346
|
|
|
53,154
|
|
|||
Other
|
2,778
|
|
|
410
|
|
|
21
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(154,403
|
)
|
|
(74,455
|
)
|
|
(14,406
|
)
|
|||
Other receivables and current assets
|
(26,182
|
)
|
|
(30,241
|
)
|
|
(18,498
|
)
|
|||
Other long-term assets
|
(5,622
|
)
|
|
1,839
|
|
|
(435
|
)
|
|||
Accounts payable, accrued expenses and current liabilities
|
38,543
|
|
|
19,920
|
|
|
27,045
|
|
|||
Accrued income taxes
|
575
|
|
|
1,086
|
|
|
1,215
|
|
|||
Deferred revenue
|
17,245
|
|
|
56,213
|
|
|
20,648
|
|
|||
Other long-term liabilities
|
(7,875
|
)
|
|
(19,662
|
)
|
|
33,206
|
|
|||
Net cash provided by operating activities
|
499,936
|
|
|
484,988
|
|
|
427,660
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisitions, net of cash acquired
|
(787,196
|
)
|
|
(283,026
|
)
|
|
(63,885
|
)
|
|||
Capital expenditures
|
(44,940
|
)
|
|
(21,762
|
)
|
|
(19,149
|
)
|
|||
Other investing activities
|
(1,412
|
)
|
|
(7,443
|
)
|
|
(11,631
|
)
|
|||
Net cash used in investing activities
|
(833,548
|
)
|
|
(312,231
|
)
|
|
(94,665
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from long-term debt
|
500,000
|
|
|
—
|
|
|
—
|
|
|||
Purchase of treasury stock
|
(59,116
|
)
|
|
(269,801
|
)
|
|
(336,042
|
)
|
|||
Restricted stock withholding taxes paid in lieu of issued shares
|
(42,431
|
)
|
|
(28,879
|
)
|
|
(11,112
|
)
|
|||
Proceeds from shares issued for stock-based compensation
|
34,093
|
|
|
41,019
|
|
|
52,503
|
|
|||
Other financing activities
|
(3,137
|
)
|
|
(5,014
|
)
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
429,409
|
|
|
(262,675
|
)
|
|
(294,651
|
)
|
|||
Effect of exchange rate fluctuations on cash and cash equivalents
|
(842
|
)
|
|
(14,444
|
)
|
|
20,678
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
94,955
|
|
|
(104,362
|
)
|
|
59,022
|
|
|||
Cash and cash equivalents, beginning of period
|
777,139
|
|
|
881,501
|
|
|
822,479
|
|
|||
Cash and cash equivalents, end of period
|
$
|
872,094
|
|
|
$
|
777,139
|
|
|
$
|
881,501
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
86,770
|
|
|
$
|
87,244
|
|
|
$
|
116,389
|
|
Interest paid
|
$
|
787
|
|
|
$
|
114
|
|
|
$
|
199
|
|
Fair value of common stock issued as consideration in connection with acquisitions
|
$
|
307,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive (Loss)/Income
|
|
Total
Stockholders'
Equity
|
|||||||||||||||||
(in thousands)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||
Balance, January 1, 2017
|
93,236
|
|
$
|
932
|
|
|
$
|
883,010
|
|
|
$
|
2,057,665
|
|
|
7,548
|
|
|
$
|
(675,550
|
)
|
|
$
|
(57,652
|
)
|
|
$
|
2,208,405
|
|
Treasury shares acquired
|
|
|
|
|
|
|
|
|
2,750
|
|
|
(336,042
|
)
|
|
|
|
(336,042
|
)
|
||||||||||
Stock-based compensation activity
|
|
|
|
|
|
(9,653
|
)
|
|
|
|
(1,254
|
)
|
|
104,062
|
|
|
|
|
94,409
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
19,808
|
|
|
19,808
|
|
|||||||||||
Net income for the year
|
|
|
|
|
|
|
259,251
|
|
|
|
|
|
|
|
|
259,251
|
|
|||||||||||
Balance, December 31, 2017
|
93,236
|
|
932
|
|
|
873,357
|
|
|
2,316,916
|
|
|
9,044
|
|
|
(907,530
|
)
|
|
(37,844
|
)
|
|
2,245,831
|
|
||||||
Cumulative effect of the ASC 606 adoption
|
|
|
|
|
|
|
183,120
|
|
|
|
|
|
|
|
|
183,120
|
|
|||||||||||
Treasury shares acquired
|
|
|
|
|
|
|
|
|
1,674
|
|
|
(269,801
|
)
|
|
|
|
(269,801
|
)
|
||||||||||
Stock-based compensation activity
|
|
|
|
|
|
(5,895
|
)
|
|
|
|
(1,116
|
)
|
|
101,452
|
|
|
|
|
95,557
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(24,535
|
)
|
|
(24,535
|
)
|
|||||||||||
Net income for the year
|
|
|
|
|
|
|
419,375
|
|
|
|
|
|
|
|
|
419,375
|
|
|||||||||||
Balance, December 31, 2018
|
93,236
|
|
932
|
|
|
867,462
|
|
|
2,919,411
|
|
|
9,602
|
|
|
(1,075,879
|
)
|
|
(62,379
|
)
|
|
2,649,547
|
|
||||||
Acquisition of Livermore Software Technology, LLC
|
1,392
|
|
14
|
|
|
307,159
|
|
|
|
|
|
|
|
|
|
|
307,173
|
|
||||||||||
Treasury shares acquired
|
|
|
|
|
|
|
|
|
330
|
|
|
(59,116
|
)
|
|
|
|
(59,116
|
)
|
||||||||||
Stock-based compensation activity
|
|
|
|
|
|
14,318
|
|
|
|
|
(1,039
|
)
|
|
93,164
|
|
|
|
|
107,482
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,002
|
)
|
|
(3,002
|
)
|
|||||||||||
Net income for the year
|
|
|
|
|
|
|
451,295
|
|
|
|
|
|
|
|
|
451,295
|
|
|||||||||||
Balance, December 31, 2019
|
94,628
|
|
$
|
946
|
|
|
$
|
1,188,939
|
|
|
$
|
3,370,706
|
|
|
8,893
|
|
|
$
|
(1,041,831
|
)
|
|
$
|
(65,381
|
)
|
|
$
|
3,453,379
|
|
1.
|
Organization
|
2.
|
Accounting Policies
|
•
|
Allowances for doubtful accounts receivable
|
•
|
Income tax accruals, including those related to the Tax Cuts and Jobs Act
|
•
|
Uncertain tax positions
|
•
|
Tax valuation reserves
|
•
|
Fair value of stock-based compensation and probabilities of performance award attainment
|
•
|
Contract revenue
|
•
|
Standalone selling prices of our products and services
|
•
|
Acquired deferred revenue
|
•
|
Useful lives for depreciation and amortization
|
•
|
Valuations of goodwill and other intangible assets
|
•
|
Deferred compensation
|
•
|
Loss contingencies
|
•
|
Operating lease assets and liabilities
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
(in thousands, except percentages)
|
Amount
|
|
% of Total
|
|
Amount
|
|
% of Total
|
||||
Cash accounts
|
$
|
549,639
|
|
|
63.0
|
|
$
|
331,084
|
|
|
42.6
|
Money market funds
|
322,455
|
|
|
37.0
|
|
446,055
|
|
|
57.4
|
||
Total
|
$
|
872,094
|
|
|
|
|
$
|
777,139
|
|
|
|
|
|
Year Ended December 31,
|
|||||||
(as a % of revenue)
|
|
2019
|
|
2018
|
|
2017
|
|||
Revenue from channel partners
|
|
23
|
%
|
|
22
|
%
|
|
25
|
%
|
Largest channel partner
|
|
4
|
%
|
|
4
|
%
|
|
5
|
%
|
2nd largest channel partner
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
As of December 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Cash and cash equivalents held domestically
|
$
|
626,433
|
|
|
$
|
616,249
|
|
Cash and cash equivalents held by foreign subsidiaries
|
245,661
|
|
|
160,890
|
|
||
Cash and cash equivalents held in excess of deposit insurance, foreign and domestic
|
855,721
|
|
|
754,163
|
|
||
Largest balance of cash and cash equivalents held with one financial institution, foreign and domestic
|
330,551
|
|
|
452,166
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
|
$
|
451,295
|
|
|
$
|
419,375
|
|
|
$
|
259,251
|
|
Weighted average shares outstanding – basic
|
|
84,259
|
|
|
83,973
|
|
|
84,988
|
|
|||
Dilutive effect of stock plans
|
|
1,666
|
|
|
1,940
|
|
|
1,866
|
|
|||
Weighted average shares outstanding – diluted
|
|
85,925
|
|
|
85,913
|
|
|
86,854
|
|
|||
Basic earnings per share
|
|
$
|
5.36
|
|
|
$
|
4.99
|
|
|
$
|
3.05
|
|
Diluted earnings per share
|
|
$
|
5.25
|
|
|
$
|
4.88
|
|
|
$
|
2.98
|
|
Anti-dilutive shares
|
|
14
|
|
|
7
|
|
|
84
|
|
3.
|
Revenue from Contracts with Customers
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2019
(ASC 606) |
|
2018
(ASC 606) |
|
2017
(ASC 605) |
||||||
Revenue:
|
|
|
|
|
|
||||||
Lease licenses
|
$
|
406,043
|
|
|
$
|
275,619
|
|
|
$
|
376,886
|
|
Perpetual licenses
|
293,587
|
|
|
301,098
|
|
|
248,078
|
|
|||
Software licenses
|
699,630
|
|
|
576,717
|
|
|
624,964
|
|
|||
Maintenance
|
760,574
|
|
|
676,883
|
|
|
440,428
|
|
|||
Service
|
55,688
|
|
|
40,036
|
|
|
29,858
|
|
|||
Maintenance and service
|
816,262
|
|
|
716,919
|
|
|
470,286
|
|
|||
Total revenue
|
$
|
1,515,892
|
|
|
$
|
1,293,636
|
|
|
$
|
1,095,250
|
|
|
|
|
|
|
|
||||||
Direct revenue, as a percentage of total revenue
|
77.1
|
%
|
|
77.6
|
%
|
|
75.2
|
%
|
|||
Indirect revenue, as a percentage of total revenue
|
22.9
|
%
|
|
22.4
|
%
|
|
24.8
|
%
|
(in thousands)
|
2019
|
|
2018
|
||||
Beginning balance – January 1
|
$
|
343,174
|
|
|
$
|
299,730
|
|
Acquired deferred revenue
|
6,880
|
|
|
2,470
|
|
||
Deferral of revenue
|
1,532,549
|
|
|
1,339,964
|
|
||
Recognition of deferred revenue
|
(1,515,892
|
)
|
|
(1,293,636
|
)
|
||
Currency translation
|
(1,437
|
)
|
|
(5,354
|
)
|
||
Ending balance – December 31
|
$
|
365,274
|
|
|
$
|
343,174
|
|
(in thousands)
|
|
||
Next 12 months
|
$
|
569,751
|
|
Months 13-24
|
177,364
|
|
|
Months 25-36
|
93,097
|
|
|
Thereafter
|
30,531
|
|
|
Total revenue allocated to remaining performance obligations
|
$
|
870,743
|
|
4.
|
Acquisitions
|
(in thousands)
|
LST
|
|
Granta Design
|
|
Other Acquisitions
|
|
Total
|
||||||||
Cash
|
$
|
470,623
|
|
|
$
|
208,736
|
|
|
$
|
136,232
|
|
|
$
|
815,591
|
|
Ansys common stock
|
307,173
|
|
|
—
|
|
|
—
|
|
|
307,173
|
|
||||
Total consideration transferred at fair value
|
$
|
777,796
|
|
|
$
|
208,736
|
|
|
$
|
136,232
|
|
|
$
|
1,122,764
|
|
(in thousands)
|
LST
|
|
Granta Design
|
|
Other Acquisitions
|
|
Total
|
||||||||
Cash
|
$
|
8,520
|
|
|
$
|
13,644
|
|
|
$
|
6,231
|
|
|
$
|
28,395
|
|
Accounts receivable and other tangible assets
|
20,568
|
|
|
6,941
|
|
|
10,746
|
|
|
38,255
|
|
||||
Developed software and core technologies (10-year weighted-average life)
|
167,700
|
|
|
32,445
|
|
|
25,018
|
|
|
225,163
|
|
||||
Customer lists (15-year weighted-average life)
|
25,900
|
|
|
20,016
|
|
|
15,743
|
|
|
61,659
|
|
||||
Trade names (10-year weighted-average life)
|
10,600
|
|
|
4,579
|
|
|
2,051
|
|
|
17,230
|
|
||||
Indemnification asset
|
34,039
|
|
|
—
|
|
|
—
|
|
|
34,039
|
|
||||
Accounts payable and other liabilities
|
(3,721
|
)
|
|
(6,714
|
)
|
|
(6,425
|
)
|
|
(16,860
|
)
|
||||
Deferred revenue
|
(3,565
|
)
|
|
(1,426
|
)
|
|
(1,889
|
)
|
|
(6,880
|
)
|
||||
Uncertain tax positions
|
(34,039
|
)
|
|
—
|
|
|
(257
|
)
|
|
(34,296
|
)
|
||||
Net deferred tax liabilities
|
(47,596
|
)
|
|
(9,822
|
)
|
|
(8,294
|
)
|
|
(65,712
|
)
|
||||
Total identifiable net assets
|
$
|
178,406
|
|
|
$
|
59,663
|
|
|
$
|
42,924
|
|
|
$
|
280,993
|
|
Goodwill
|
$
|
599,390
|
|
|
$
|
149,073
|
|
|
$
|
93,308
|
|
|
$
|
841,771
|
|
Intangible Asset
|
|
Valuation Method
|
|
LST Assumptions
|
|
Granta Design Assumptions
|
Developed software and core technologies
|
|
Relief-from-royalty
|
|
Royalty rate: 50%
Discount rate: 10%
|
|
Royalty rate: 8% - 10%
Discount rate: 12.5%
|
Trade names
|
|
Relief-from-royalty
|
|
Royalty rate: 2%
Discount rate: 10%
|
|
Royalty rate: 2%
Discount rate: 14%
|
Customer lists
|
|
Multi-period excess earnings
|
|
Attrition rate: 10%
Discount rate: 11%
|
|
Attrition rate: 10%
Discount rate: 12.5%
|
(in thousands)
|
Year Ended December 31, 2019
|
||
Revenue
|
$
|
44,079
|
|
Operating income
|
$
|
6,733
|
|
(in thousands)
|
OPTIS
|
||
Cash
|
$
|
290,983
|
|
(in thousands)
|
OPTIS
|
||
Cash
|
$
|
7,957
|
|
Accounts receivable and other tangible assets
|
15,910
|
|
|
Developed software and core technologies (10-year weighted-average life)
|
47,597
|
|
|
Customer lists (12-year life)
|
41,303
|
|
|
Trade names (9-year weighted-average life)
|
10,749
|
|
|
Accounts payable and other liabilities
|
(11,941
|
)
|
|
Deferred revenue
|
(2,470
|
)
|
|
Net deferred tax liabilities
|
(23,438
|
)
|
|
Total identifiable net assets
|
$
|
85,667
|
|
Goodwill
|
$
|
205,316
|
|
(in thousands)
|
Year Ended December 31, 2018
|
||
Revenue
|
$
|
18,532
|
|
Operating loss
|
$
|
(5,462
|
)
|
Date of Closing
|
|
Company
|
|
Details
|
November 15, 2017
|
|
3DSIM
|
|
3DSIM, a developer of premier additive manufacturing technology, gives us a complete additive manufacturing simulation workflow solution. 3DSIM's software solutions empower manufacturers, designers, materials scientists and engineers to achieve their objectives through simulation-driven innovation rather than physical trial and error.
|
July 5, 2017
|
|
Computational Engineering International, Inc.
(CEI Inc.)
|
|
CEI Inc., the developer of EnSight, aids engineers and scientists in their ability to analyze, visualize and communicate large simulation data sets in clear, higher-resolution outputs.
|
March 10, 2017
|
|
CLK Design Automation (CLK-DA)
|
|
CLK-DA offers fast transistor simulation technology that complements our semiconductor product portfolio.
|
5.
|
Other Receivables and Current Assets and Other Accrued Expenses and Liabilities
|
|
December 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Receivables related to unrecognized revenue
|
$
|
177,679
|
|
|
$
|
167,144
|
|
Income taxes receivable, including overpayments and refunds
|
26,672
|
|
|
13,709
|
|
||
Prepaid expenses and other current assets
|
45,268
|
|
|
35,260
|
|
||
Total other receivables and current assets
|
$
|
249,619
|
|
|
$
|
216,113
|
|
|
|
|
|
||||
Consumption, sales and VAT tax liabilities
|
$
|
36,398
|
|
|
$
|
24,192
|
|
Accrued expenses and other current liabilities
|
106,549
|
|
|
75,367
|
|
||
Total other accrued expenses and liabilities
|
$
|
142,947
|
|
|
$
|
99,559
|
|
6.
|
Property and Equipment
|
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
Estimated Useful Lives
|
|
2019
|
|
2018
|
||||
Equipment
|
|
1-15 years
|
|
$
|
105,428
|
|
|
$
|
92,409
|
|
Computer software
|
|
1-5 years
|
|
33,878
|
|
|
35,053
|
|
||
Buildings and improvements
|
|
5-40 years
|
|
38,095
|
|
|
27,352
|
|
||
Leasehold improvements
|
|
1-17 years
|
|
19,876
|
|
|
15,782
|
|
||
Furniture
|
|
1-13 years
|
|
12,766
|
|
|
10,846
|
|
||
Land
|
|
|
|
2,696
|
|
|
1,759
|
|
||
Property and equipment, gross
|
|
|
|
212,739
|
|
|
183,201
|
|
||
Less: Accumulated depreciation
|
|
|
|
(129,103
|
)
|
|
(121,546
|
)
|
||
Property and equipment, net
|
|
|
|
$
|
83,636
|
|
|
$
|
61,655
|
|
7.
|
Goodwill and Intangible Assets
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
(in thousands)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Developed software and core technologies
|
$
|
635,063
|
|
|
$
|
(332,622
|
)
|
|
$
|
410,680
|
|
|
$
|
(314,730
|
)
|
Customer lists and contract backlog
|
269,629
|
|
|
(132,596
|
)
|
|
209,031
|
|
|
(117,614
|
)
|
||||
Trade names
|
154,259
|
|
|
(117,379
|
)
|
|
137,225
|
|
|
(113,677
|
)
|
||||
Total
|
$
|
1,058,951
|
|
|
$
|
(582,597
|
)
|
|
$
|
756,936
|
|
|
$
|
(546,021
|
)
|
Indefinite-lived intangible asset:
|
|
|
|
|
|
|
|
||||||||
Trade name
|
$
|
357
|
|
|
|
|
$
|
357
|
|
|
|
(in thousands)
|
2019
|
|
2018
|
||||
Beginning balance - January 1
|
$
|
1,572,455
|
|
|
$
|
1,378,553
|
|
Acquisitions and adjustments(1)
|
842,588
|
|
|
204,381
|
|
||
Currency translation
|
(1,763
|
)
|
|
(10,479
|
)
|
||
Ending balance - December 31
|
$
|
2,413,280
|
|
|
$
|
1,572,455
|
|
8.
|
Fair Value Measurement
|
•
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
•
|
Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or
|
•
|
Level 3: unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.
|
|
|
|
Fair Value Measurements at Reporting Date Using:
|
||||||||||||
(in thousands)
|
December 31, 2019
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
322,455
|
|
|
$
|
322,455
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
$
|
288
|
|
|
$
|
—
|
|
|
$
|
288
|
|
|
$
|
—
|
|
Deferred compensation plan investments
|
$
|
1,110
|
|
|
$
|
1,110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
9.
|
Leases
|
(in thousands)
|
|
||
2019
|
$
|
16,354
|
|
2020
|
12,469
|
|
|
2021
|
10,177
|
|
|
2022
|
8,523
|
|
|
2023
|
6,809
|
|
|
Thereafter
|
14,267
|
|
|
Total
|
$
|
68,599
|
|
10.
|
Debt
|
11.
|
Income Taxes
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
|
$
|
448,271
|
|
|
$
|
455,478
|
|
|
$
|
344,447
|
|
Foreign
|
|
74,312
|
|
|
31,607
|
|
|
51,247
|
|
|||
Total
|
|
$
|
522,583
|
|
|
$
|
487,085
|
|
|
$
|
395,694
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Federal statutory tax rate
|
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
|
1.5
|
|
|
1.5
|
|
|
1.1
|
|
Foreign rate differential
|
|
0.8
|
|
|
0.8
|
|
|
0.1
|
|
Uncertain tax positions
|
|
(0.2
|
)
|
|
0.5
|
|
|
0.3
|
|
U.S. tax reform enactment
|
|
(0.4
|
)
|
|
0.2
|
|
|
4.5
|
|
Valuation allowance release
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
Domestic production activity benefit
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
Benefit from entity structuring activities
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
Research and development credits
|
|
(2.2
|
)
|
|
(2.3
|
)
|
|
(1.4
|
)
|
Stock-based compensation
|
|
(3.1
|
)
|
|
(3.3
|
)
|
|
(3.1
|
)
|
Foreign-derived intangible income deduction
|
|
(3.8
|
)
|
|
(3.9
|
)
|
|
—
|
|
Other
|
|
1.3
|
|
|
0.8
|
|
|
0.6
|
|
|
|
13.6
|
%
|
|
13.9
|
%
|
|
34.5
|
%
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
35,044
|
|
|
$
|
39,290
|
|
Operating lease liabilities
|
|
26,628
|
|
|
—
|
|
||
Stock-based compensation
|
|
24,254
|
|
|
20,464
|
|
||
Uncertain tax positions
|
|
19,227
|
|
|
17,823
|
|
||
Employee benefits
|
|
9,392
|
|
|
15,048
|
|
||
Research and development credits
|
|
5,865
|
|
|
5,951
|
|
||
Other
|
|
6,309
|
|
|
4,121
|
|
||
Valuation allowance
|
|
(17,524
|
)
|
|
(21,676
|
)
|
||
Total deferred tax assets
|
|
109,195
|
|
|
81,021
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Other intangible assets
|
|
(99,193
|
)
|
|
(38,787
|
)
|
||
Operating lease right-of-use assets
|
|
(25,648
|
)
|
|
—
|
|
||
Accounting method change
|
|
(21,396
|
)
|
|
(31,626
|
)
|
||
Deferred revenue
|
|
(13,744
|
)
|
|
(12,021
|
)
|
||
Property and equipment
|
|
(3,780
|
)
|
|
(2,034
|
)
|
||
Total deferred tax liabilities
|
|
(163,761
|
)
|
|
(84,468
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(54,566
|
)
|
|
$
|
(3,447
|
)
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Unrecognized tax benefit as of January 1
|
|
$
|
22,827
|
|
|
$
|
19,657
|
|
|
$
|
15,209
|
|
Gross increases—acquisitions
|
|
26,914
|
|
|
—
|
|
|
—
|
|
|||
Gross increases—tax positions in prior period
|
|
207
|
|
|
1,229
|
|
|
905
|
|
|||
Gross decreases—tax positions in prior period
|
|
(1,743
|
)
|
|
(376
|
)
|
|
(765
|
)
|
|||
Gross increases—tax positions in current period
|
|
3,563
|
|
|
4,014
|
|
|
3,757
|
|
|||
Reductions due to a lapse of the applicable statute of limitations
|
|
(2,230
|
)
|
|
(994
|
)
|
|
(847
|
)
|
|||
Changes due to currency fluctuation
|
|
(453
|
)
|
|
(703
|
)
|
|
1,414
|
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||
Unrecognized tax benefit as of December 31
|
|
$
|
49,085
|
|
|
$
|
22,827
|
|
|
$
|
19,657
|
|
12.
|
Pension and Profit-Sharing Plans
|
13.
|
Non-Compete and Employment Agreements
|
14.
|
Stock-Based Compensation
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share amounts)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of sales:
|
|
|
|
|
|
|
||||||
Software licenses
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
969
|
|
Maintenance and service
|
|
8,494
|
|
|
5,224
|
|
|
2,533
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
|
60,639
|
|
|
47,099
|
|
|
30,817
|
|
|||
Research and development
|
|
47,057
|
|
|
31,023
|
|
|
18,835
|
|
|||
Stock-based compensation expense before taxes
|
|
116,190
|
|
|
83,346
|
|
|
53,154
|
|
|||
Related income tax benefits
|
|
(47,454
|
)
|
|
(34,518
|
)
|
|
(20,503
|
)
|
|||
Stock-based compensation expense, net of taxes
|
|
$
|
68,736
|
|
|
$
|
48,828
|
|
|
$
|
32,651
|
|
Net impact on earnings per share:
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
(0.82
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.38
|
)
|
Diluted earnings per share
|
|
$
|
(0.80
|
)
|
|
$
|
(0.57
|
)
|
|
$
|
(0.38
|
)
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(options in thousands)
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|||||||||
Outstanding, beginning of year
|
|
1,484
|
|
|
$
|
62.80
|
|
|
2,170
|
|
|
$
|
59.17
|
|
|
3,136
|
|
|
$
|
56.37
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Exercised
|
|
(495
|
)
|
|
$
|
53.53
|
|
|
(679
|
)
|
|
$
|
50.92
|
|
|
(956
|
)
|
|
$
|
49.78
|
|
Forfeited
|
|
(5
|
)
|
|
$
|
64.21
|
|
|
(7
|
)
|
|
$
|
86.28
|
|
|
(10
|
)
|
|
$
|
80.92
|
|
Outstanding, end of year
|
|
984
|
|
|
$
|
67.49
|
|
|
1,484
|
|
|
$
|
62.80
|
|
|
2,170
|
|
|
$
|
59.17
|
|
Vested and Exercisable, end of year
|
|
924
|
|
|
$
|
65.71
|
|
|
1,347
|
|
|
$
|
59.69
|
|
|
1,930
|
|
|
$
|
55.11
|
|
Nonvested
|
|
60
|
|
|
$
|
94.77
|
|
|
137
|
|
|
$
|
93.44
|
|
|
240
|
|
|
$
|
91.71
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted Average Remaining Contractual Term (in years)
|
|
|
|
|
|
|
||||||
Outstanding
|
|
3.18
|
|
|
3.55
|
|
|
4.10
|
|
|||
Vested and Exercisable
|
|
2.95
|
|
|
3.14
|
|
|
3.57
|
|
|||
Nonvested
|
|
6.71
|
|
|
7.60
|
|
|
8.30
|
|
|||
Aggregate Intrinsic Value (in thousands)
|
|
|
|
|
|
|
||||||
Exercised
|
|
$
|
72,098
|
|
|
$
|
78,648
|
|
|
$
|
58,472
|
|
Outstanding
|
|
$
|
186,926
|
|
|
$
|
118,908
|
|
|
$
|
191,895
|
|
Vested and Exercisable
|
|
$
|
177,111
|
|
|
$
|
112,133
|
|
|
$
|
178,456
|
|
Nonvested
|
|
$
|
9,815
|
|
|
$
|
6,775
|
|
|
$
|
13,439
|
|
Compensation Expense - Stock Options (in thousands)
|
|
$
|
1,709
|
|
|
$
|
2,006
|
|
|
$
|
2,948
|
|
(options in thousands)
|
|
Options Outstanding
|
|
Options Exercisable
|
|
Options Unvested
|
|||||||||||||||||||||
Range of Exercise Prices
|
|
Options
|
|
Weighted-
Average Remaining Contractual Life (years) |
|
Weighted-
Average Exercise Price |
|
Options
|
|
Weighted-
Average
Remaining
Contractual
Life (years)
|
|
Weighted-
Average Exercise Price |
|
Options
|
|
Weighted-
Average
Remaining
Contractual
Life (years)
|
|
Weighted-
Average
Exercise
Price
|
|||||||||
$11.99 - $48.97
|
|
181
|
|
|
1.01
|
|
$
|
43.29
|
|
|
181
|
|
|
1.01
|
|
$
|
43.29
|
|
|
—
|
|
|
0.00
|
|
$
|
—
|
|
$58.67
|
|
267
|
|
|
1.87
|
|
$
|
58.67
|
|
|
267
|
|
|
1.87
|
|
$
|
58.67
|
|
|
—
|
|
|
0.00
|
|
$
|
—
|
|
$67.44
|
|
280
|
|
|
2.87
|
|
$
|
67.44
|
|
|
280
|
|
|
2.87
|
|
$
|
67.44
|
|
|
—
|
|
|
0.00
|
|
$
|
—
|
|
$76.31 - $95.09
|
|
256
|
|
|
6.44
|
|
$
|
93.89
|
|
|
196
|
|
|
6.36
|
|
$
|
93.62
|
|
|
60
|
|
|
6.71
|
|
$
|
94.77
|
|
Award
|
Vesting Period
|
Vesting Condition
|
Restricted stock units with a market and service condition
|
Three years
|
Our performance measured by total stockholder return relative to the Nasdaq Composite Index for the measurement period and subject to continued employment through the vesting period.
|
Restricted stock units with an operating performance and service condition
|
Three years
|
Operating performance metrics as defined at the beginning of the performance cycle.
|
Restricted stock units with a service condition only
|
Three or four years
|
Continued employment through the yearly vesting period.
|
|
Year Ended December 31,
|
||||
Assumptions used in Monte Carlo lattice pricing model
|
2019
|
|
2018
|
|
2017
|
Risk-free interest rate
|
2.5%
|
|
2.4%
|
|
1.5%
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
Expected volatility—Ansys stock price
|
23%
|
|
21%
|
|
19%
|
Expected volatility—Nasdaq Composite Index
|
16%
|
|
15%
|
|
15%
|
Expected term
|
2.8 years
|
|
2.8 years
|
|
2.8 years
|
Correlation factor
|
0.71
|
|
0.65
|
|
0.70
|
Weighted average fair value per share
|
$238.99
|
|
$191.76
|
|
$120.94
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(RSUs in thousands)
|
|
RSUs
|
|
Weighted-
Average
Grant Date Fair Value
|
|
RSUs
|
|
Weighted-
Average
Grant Date Fair Value
|
|
RSUs
|
|
Weighted-
Average
Grant Date Fair Value
|
|||||||||
Nonvested, beginning of year
|
|
1,522
|
|
|
$
|
129.96
|
|
|
1,361
|
|
|
$
|
100.66
|
|
|
906
|
|
|
$
|
86.45
|
|
Granted(1)
|
|
843
|
|
|
$
|
192.37
|
|
|
681
|
|
|
$
|
163.67
|
|
|
866
|
|
|
$
|
109.67
|
|
Performance adjustment(2)
|
|
74
|
|
|
$
|
167.87
|
|
|
76
|
|
|
$
|
151.52
|
|
|
35
|
|
|
$
|
98.29
|
|
Vested
|
|
(704
|
)
|
|
$
|
125.84
|
|
|
(524
|
)
|
|
$
|
101.38
|
|
|
(341
|
)
|
|
$
|
88.58
|
|
Forfeited
|
|
(117
|
)
|
|
$
|
140.43
|
|
|
(72
|
)
|
|
$
|
125.29
|
|
|
(105
|
)
|
|
$
|
90.80
|
|
Nonvested, end of year
|
|
1,618
|
|
|
$
|
165.26
|
|
|
1,522
|
|
|
$
|
129.96
|
|
|
1,361
|
|
|
$
|
100.66
|
|
|
Year Ended December 31, 2019
|
|||||||
|
Diversified
|
|
Undiversified
|
|
Total
|
|||
Deferred Awards Outstanding, beginning of year
|
12,250
|
|
|
120,449
|
|
|
132,699
|
|
Shares Diversified
|
13,348
|
|
|
(13,348
|
)
|
|
—
|
|
Shares Issued Upon Retirement
|
(20,000
|
)
|
|
(47,020
|
)
|
|
(67,020
|
)
|
Deferred Awards Outstanding, end of year
|
5,598
|
|
|
60,081
|
|
|
65,679
|
|
15.
|
Stock Repurchase Program
|
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2019
|
|
2018
|
|
2017
|
||||||
Number of shares repurchased
|
330
|
|
|
1,674
|
|
|
2,750
|
|
|||
Average price paid per share
|
$
|
179.41
|
|
|
$
|
161.12
|
|
|
$
|
122.20
|
|
Total cost
|
$
|
59,116
|
|
|
$
|
269,801
|
|
|
$
|
336,042
|
|
16.
|
Royalty Agreements
|
17.
|
Geographic Information
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2019
(ASC 606) |
|
2018
(ASC 606) |
|
2017
(ASC 605) |
||||||
United States
|
$
|
637,916
|
|
|
$
|
506,335
|
|
|
$
|
417,343
|
|
Japan
|
162,154
|
|
|
145,951
|
|
|
126,097
|
|
|||
Germany
|
158,809
|
|
|
140,506
|
|
|
108,211
|
|
|||
South Korea
|
90,082
|
|
|
72,724
|
|
|
63,011
|
|
|||
France
|
68,551
|
|
|
67,657
|
|
|
53,672
|
|
|||
China
|
64,725
|
|
|
57,567
|
|
|
54,415
|
|
|||
Other EMEA
|
211,193
|
|
|
193,317
|
|
|
166,472
|
|
|||
Other international
|
122,462
|
|
|
109,579
|
|
|
106,029
|
|
|||
Total revenue
|
$
|
1,515,892
|
|
|
$
|
1,293,636
|
|
|
$
|
1,095,250
|
|
|
December 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
United States
|
$
|
59,473
|
|
|
$
|
46,605
|
|
India
|
5,660
|
|
|
4,176
|
|
||
Germany
|
4,237
|
|
|
2,158
|
|
||
United Kingdom
|
4,194
|
|
|
1,238
|
|
||
Other EMEA
|
5,532
|
|
|
3,724
|
|
||
Other international
|
4,540
|
|
|
3,754
|
|
||
Total property and equipment, net
|
$
|
83,636
|
|
|
$
|
61,655
|
|
18.
|
Unconditional Purchase Obligations
|
19.
|
Restructuring
|
(in thousands)
|
Gross
|
|
Net of Tax
|
||||
Q4 2016
|
$
|
3,419
|
|
|
$
|
2,355
|
|
Q1 2017
|
9,273
|
|
|
6,176
|
|
||
Q2 2017
|
2,000
|
|
|
1,435
|
|
||
Q3 2017
|
466
|
|
|
331
|
|
||
Total restructuring charges
|
$
|
15,158
|
|
|
$
|
10,297
|
|
20.
|
Contingencies and Commitments
|
(in thousands)
Description
|
|
Balance at
Beginning
of Year
|
|
Additions:
Charges to Costs
and Expenses
|
|
Deductions:
Returns and
Write-Offs
|
|
Balance at
End
of Year
|
||||||||
Year ended December 31, 2019
Allowance for doubtful accounts |
|
$
|
8,000
|
|
|
$
|
2,928
|
|
|
$
|
2,228
|
|
|
$
|
8,700
|
|
Year ended December 31, 2018
Allowance for doubtful accounts |
|
$
|
6,800
|
|
|
$
|
1,577
|
|
|
$
|
377
|
|
|
$
|
8,000
|
|
Year ended December 31, 2017
Allowance for doubtful accounts |
|
$
|
5,700
|
|
|
$
|
1,474
|
|
|
$
|
374
|
|
|
$
|
6,800
|
|
Exhibit No.
|
|
Exhibit
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
24.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
*
|
Indicates management contract or compensatory plan, contract or arrangement.
|
|
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
|
ANSYS, Inc.
|
||
|
|
|
|
||
Date:
|
February 27, 2020
|
|
By:
|
|
/s/ AJEI S. GOPAL
|
|
|
|
|
|
|
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Ajei S. Gopal
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
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February 27, 2020
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By:
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/s/ MARIA T. SHIELDS
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Maria T. Shields
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Chief Financial Officer
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(Principal Financial Officer and Principal Accounting Officer)
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Signature
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Title
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Date
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/s/ AJEI S. GOPAL
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President and Chief Executive Officer
(Principal Executive Officer)
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February 27, 2020
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Ajei S. Gopal
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/s/ MARIA T. SHIELDS
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Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
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February 27, 2020
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Maria T. Shields
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/s/ NICOLE ANASENES
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Director
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February 27, 2020
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Nicole Anasenes
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/s/ GLENDA M. DORCHAK
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Director
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February 27, 2020
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Glenda M. Dorchak
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/s/ GUY E. DUBOIS
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Director
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February 27, 2020
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Guy E. Dubois
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/s/ DR. ALEC D. GALLIMORE
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Director
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February 27, 2020
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Dr. Alec D. Gallimore
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/s/ RONALD W. HOVSEPIAN
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Chairman of the Board of Directors
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February 27, 2020
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Ronald W. Hovsepian
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/s/ BARBARA V. SCHERER
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Director
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February 27, 2020
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Barbara V. Scherer
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(a)
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the holders of the Common Stock shall have the exclusive right to vote for the election of Directors and on all other matters requiring stockholder action, each share being entitled to one vote;
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(b)
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dividends may be declared and paid or set apart for payment upon the Common Stock out of any assets or funds of the Corporation legally available for the payment of dividends, but only when and as declared by the Board of Directors or any authorized committee thereof; and
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(c)
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upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the net assets of the Corporation shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests.
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(a)
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The distinctive serial designation and the number of shares constituting such series;
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(b)
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The dividend rates or the amount of dividends to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date or dates, the payment date or dates for dividends, and the participating and other rights, if any, with respect to dividends;
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(c)
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The voting powers, full or limited, if any, of the shares of such series;
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(d)
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Whether the shares of such series shall be redeemable and, if so, the price or prices at which, and the terms and conditions on which, such shares may be redeemed;
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(e)
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The amount or amounts payable upon the shares of such series and any preferences applicable thereto in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation;
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(f)
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Whether the shares of such series shall be entitled to the benefit of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and if so entitled, the amount of such fund and the manner of its application, including the price or prices at which such shares may be redeemed or purchased through the application of such fund;
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(g)
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Whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation and, if so convertible or exchangeable, the conversion price or prices, or the rate or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange;
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(h)
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The price or other consideration for which the shares of such series shall be issued;
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(i)
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Whether the shares of such series which are redeemed or converted shall have the status of authorized but unissued shares of Preferred Stock (or series thereof) and whether such shares may be reissued as shares of the same or any other class or series of stock; and
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(j)
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Such other powers, preferences, rights, qualifications, limitations and restrictions thereof as the Board of Directors or any authorized committee thereof may deem advisable.
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•
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the title or designation of the series;
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•
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the number of shares in the series;
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•
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the dividend rate and whether dividends will be cumulative;
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•
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the voting rights, if any, of the holders of the series;
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•
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the terms, if any, on which the series may or will be redeemed;
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•
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the preference, if any, to which holders of the series will be entitled upon our liquidation, dissolution or winding up;
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•
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any sinking or retirement fund provisions of the shares;
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•
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the right, if any, of holders of the shares to convert or exchange them into, or for, another class of our stock or securities;
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•
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the purchase price of the shares;
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•
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the status of shares upon redemption or conversion; and
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•
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any other powers, preferences, rights, qualifications, limitations and restrictions as the Board of Directors or any authorized committee thereof may deem advisable.
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•
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prior to the time that the person became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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•
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for the purpose of determining the number of shares outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) the corporation’s officers and directors and (ii) employee stock
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•
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at or subsequent to the time the business combination is approved by the corporation’s board of directors and authorized at an annual or special meeting of its stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of its outstanding voting stock that is not owned by the interested stockholder.
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4.
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Additional Limitation.
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Dated:
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By:
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Incremental Number of
Restricted Stock Units Vested |
Vest Date
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%%SHARES_PERIOD1,’999,999,999’%-%
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33%
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%%VEST_DATE_PERIOD1,’Month DD, YYYY’%-%
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%%SHARES_PERIOD2,’999,999,999’%-%
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33%
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%%VEST_DATE_PERIOD2,’Month DD, YYYY’%-%
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%%SHARES_PERIOD3,’999,999,999’%-%
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34%
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%%VEST_DATE_PERIOD3,’Month DD, YYYY’%-%
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Incremental Number of
Restricted Stock Units Vested |
Vest Date
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%%SHARES_PERIOD1,’999,999,999’%-%
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33%
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%%VEST_DATE_PERIOD1,’Month DD, YYYY’%-%
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%%SHARES_PERIOD2,’999,999,999’%-%
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33%
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%%VEST_DATE_PERIOD2,’Month DD, YYYY’%-%
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%%SHARES_PERIOD3,’999,999,999’%-%
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34%
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%%VEST_DATE_PERIOD3,’Month DD, YYYY’%-%
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(a)
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“Award” means a grant to a Participant hereunder. From and after a Change in Control, any references to an Award shall mean the fixed number of Restricted Stock Units eligible to be earned by a Participant, as determined by the Committee pursuant to Section 6 hereof.
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(b)
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“Award Notice” means a notice or agreement provided to a Participant that sets forth the terms, conditions and limitations of the Participant’s participation in this Plan, including, without limitation, the Participant’s Target Award.
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(c)
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“Board” means the Board of Directors of the Company.
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(d)
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“Cause” means, and shall be limited to a determination by the Company that the Participant’s employment shall be terminated as a result of any one or more of the following events:
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(e)
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“Change in Control” means any of the following:
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(f)
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“Change in Control Date” means with respect to each Change in Control Performance Measurement Period, the last day of the month immediately preceding the effective date of the Change in Control.
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(g)
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“Change in Control Performance Measurement Period” means the Performance Measurement Period that is shortened by the Committee such that such period shall be deemed to have concluded as of the Change in Control Date.
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(h)
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“Change in Control Terminating Event” means during the 18-month period following the occurrence of a Change in Control, any of the following events: (i) termination by the Company of the Participant’s employment for any reason other than for Cause, death or disability; or (ii) the termination by the Participant of his or her employment with the Company for Good Reason. Notwithstanding the foregoing, a Change in Control Terminating Event shall not be deemed to have occurred herein solely as a result of the Participant being an employee of any direct or indirect successor to the business or assets of the Company.
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(i)
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“Closing Index Value” means the Performance Measurement Index Value as of the last day of the Performance Measurement Period.
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(j)
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“Closing Stock Price” means the Stock Price as of the last day of the Performance Measurement Period.
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(k)
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“Code” means Internal Revenue Code of 1986, as amended.
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(l)
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“Committee” means the Compensation Committee of the Board.
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(m)
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“Effective Date” means as of January 1, 2018.
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(n)
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“Good Reason” means that the Participant has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events:
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(o)
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“Good Reason Process” means:
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(p)
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“Initial Index Value” means, the Performance Measurement Index Value as of January 1 of the first calendar year in any Performance Measurement Period.
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(q)
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“Initial Stock Price” means the Stock Price as of January 1 of the first calendar year in any Performance Measurement Period.
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(r)
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“Participant” means an executive or employee of the Company selected by the Committee to participate in the Plan.
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(s)
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“Performance Measurement Index” means the NASDAQ Composite Index (^IXIC), or, in the event such index is discontinued or its methodology significantly changed, a comparable index selected by the Committee in good faith.
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(t)
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“Performance Measurement Index Value” means, with respect to any date, the average value of the Performance Measurement Index for the ten consecutive trading days immediately preceding such date.
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(u)
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“Performance Measurement Period” means a three-year period commencing on January 1 and ending on the third December 31 thereafter. There shall be overlapping Performance Measurement Periods. The first Performance Measurement Period under the Plan will commence on January 1, 2018 and subsequent Performance Measurement Periods will commence on each January 1 thereafter while the Plan is effective.
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(v)
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“Performance Multiplier” means the percentage between 0% and 200% by which the applicable portion of the Target Award is multiplied to determine the number of credited Restricted Stock Units for the Performance Measurement Period.
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(w)
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“Restricted Stock Units” means the stock units of the Company to be settled in shares of Stock.
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(x)
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“Stock” means the Company’s common stock, par value $0.01 per share.
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(y)
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“Stock Price” means, as of a particular date, the average closing price of one share of Stock for the ten consecutive trading days ending on, and including, such date; provided however, that in the event of a Change in Control of the Company, the Stock Price shall equal the fair market value, as determined by the Committee in its discretion, of the total consideration paid or payable in the transaction resulting in the Change in Control for one share of Stock.
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(z)
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“Target Award” means the target number of Restricted Stock Units that comprise a Participant’s Award for each Performance Measurement Period, as set forth in the Participant’s Award Notice.
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(aa)
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“Total Shareholder Return” means, with respect to a Performance Measurement Period, the total percentage return per share, achieved by the Stock assuming contemporaneous reinvestment in the Stock of all dividends and other distributions (excluding dividends and distributions paid in the form of additional shares of Stock) at the closing price of one share of Stock on the date such dividend or other distribution was paid, based on the Initial Stock Price, and the Closing Stock Price for the last day of the applicable Performance Measurement Period.
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(a)
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Amendment and Termination. The Company reserves the right to amend or terminate the Plan at any time in its discretion without the consent of any Participants, but no such amendment shall adversely affect the rights of the Participants with regard to outstanding Awards. In the event the Plan is terminated, the Company shall determine the Awards payable to Participants based on the Total Shareholder Return relative to the Performance Measurement Index for each Performance Measurement Period ending on the date of Plan termination. The Awards for each Performance Measurement Period shall be further prorated to reflect the shortened Performance Measurement Period.
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(b)
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No Contract for Continuing Services. This Plan shall not be construed as creating any contract for continued services between the Company or any of its subsidiaries and any Participant and nothing herein contained shall give any Participant the right to be retained as an employee or consultant of the Company or any of its subsidiaries.
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(c)
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No Transfers. A Participant’s rights in an interest under the Plan may not be assigned or transferred.
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(d)
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Unfunded Plan. The Plan shall be unfunded and shall not create (or be construed to create) a trust or separate fund. Likewise, the Plan shall not establish any fiduciary relationship between the Company or any of subsidiaries or affiliates and any Participant. To the extent that any Participant holds any rights by virtue of an Award under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company or any of its subsidiaries.
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(e)
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Governing Law. The Plan and each Award Notice awarded under the Plan shall be construed in accordance with and governed the laws of the State of Delaware, without regard to principles of conflict of laws of such state.
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(f)
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Tax Withholding. Any issuance of shares of Stock to a Participant shall be subject to tax withholding. The minimum tax withholding obligation shall be satisfied through a net issuance of shares. The Company shall withhold from shares of Stock to be issued to the Participant a number of shares of Stock with an aggregate fair market value that would satisfy the minimum withholding amount due.
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(g)
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Construction. Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.
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(h)
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Headings. The Section headings and Section numbers are included solely for ease of reference. If there is any conflict between such headings or numbers and the text of this Plan, the text shall control.
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(i)
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Effect on Other Plans. Nothing in this Plan shall be construed to limit the rights of Participants under the Company’s or its subsidiaries’ benefit plans, programs or policies.
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(j)
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Effective Date. The Plan shall be effective as of the Effective Date.
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(a)
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All payments and benefits described in this Plan are intended to constitute a short term deferral for purposes of Section 409A of the Internal Revenue Code of 1986, as amended. To the extent that any payment or benefit described in this Plan constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Participant’s termination of employment, then such payments or benefits shall be payable only upon the Participant’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A‑1(h).
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(b)
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The parties intend that this Plan will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Plan is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Plan may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in
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(c)
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The Company makes no representation or warranty and shall have no liability to the Participant or any other person if any provisions of this Plan are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.
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(a)
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“Award” means a grant to a Participant hereunder. From and after a Change in Control, any references to an Award shall mean the fixed number of Restricted Stock Units eligible to be earned by a Participant, as determined by the Committee pursuant to Section 6 hereof.
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(b)
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“Award Notice” means a notice or agreement provided to a Participant that sets forth the terms, conditions and limitations of the Participant’s participation in this Plan, including, without limitation, the Participant’s Target Award.
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(c)
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“Board” means the Board of Directors of the Company.
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(d)
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“Cause” means, and shall be limited to a determination by the Company that the Participant’s employment shall be terminated as a result of any one or more of the following events:
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(e)
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“Change in Control” means any of the following:
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(f)
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“Change in Control Date” means with respect to each Change in Control Performance Measurement Period, the last day of the month immediately preceding the effective date of the Change in Control.
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(g)
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“Change in Control Performance Measurement Period” means the Performance Measurement Period that is shortened by the Committee such that such period shall be deemed to have concluded as of the Change in Control Date.
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(h)
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“Change in Control Terminating Event” means during the 18-month period following the occurrence of a Change in Control, any of the following events: (i) termination by the Company of the Participant’s employment for any reason other than for Cause, death or disability; or (ii) the termination by the Participant of his or her employment with the Company for Good Reason. Notwithstanding the foregoing, a Change in Control Terminating Event shall not be deemed to have occurred herein solely as a result of the Participant being an employee of any direct or indirect successor to the business or assets of the Company.
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(i)
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“Closing Index Value” means the Performance Measurement Index Value as of the last day of the Performance Measurement Period.
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(j)
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“Closing Stock Price” means the Stock Price as of the last day of the Performance Measurement Period.
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(k)
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“Code” means Internal Revenue Code of 1986, as amended.
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(l)
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“Committee” means the Compensation Committee of the Board.
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(m)
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“Effective Date” means as of January 1, 2019.
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(n)
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“Good Reason” means that the Participant has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events:
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(o)
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“Good Reason Process” means:
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(p)
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“Initial Index Value” means, the Performance Measurement Index Value as of January 1 of the first calendar year in any Performance Measurement Period.
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(q)
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“Initial Stock Price” means the Stock Price as of January 1 of the first calendar year in any Performance Measurement Period.
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(r)
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“Participant” means an executive or employee of the Company selected by the Committee to participate in the Plan.
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(s)
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“Performance Measurement Index” means the NASDAQ Composite Index (^IXIC), or, in the event such index is discontinued or its methodology significantly changed, a comparable index selected by the Committee in good faith.
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(t)
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“Performance Measurement Index Value” means, with respect to any date, the average value of the Performance Measurement Index for the ten consecutive trading days immediately preceding such date.
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(u)
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“Performance Measurement Period” means a three-year period commencing on January 1 and ending on the third December 31 thereafter. There shall be overlapping Performance Measurement Periods. The first Performance Measurement Period under the Plan will commence on January 1, 2019 and subsequent Performance Measurement Periods will commence on each January 1 thereafter while the Plan is effective.
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(v)
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“Performance Multiplier” means the percentage between 0% and 200% by which the applicable portion of the Target Award is multiplied to determine the number of credited Restricted Stock Units for the Performance Measurement Period.
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(w)
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“Restricted Stock Units” means the stock units of the Company to be settled in shares of Stock.
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(x)
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“Stock” means the Company’s common stock, par value $0.01 per share.
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(y)
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“Stock Price” means, as of a particular date, the average closing price of one share of Stock for the ten consecutive trading days ending on, and including, such date; provided however, that in the event of a Change in Control of the Company, the Stock Price shall equal the fair market value, as determined by the Committee in its discretion, of the total consideration paid or payable in the transaction resulting in the Change in Control for one share of Stock.
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(z)
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“Target Award” means the target number of Restricted Stock Units that comprise a Participant’s Award for each Performance Measurement Period, as set forth in the Participant’s Award Notice.
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(aa)
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“Total Shareholder Return” means, with respect to a Performance Measurement Period, the total percentage return per share, achieved by the Stock assuming contemporaneous reinvestment in the Stock of all dividends and other distributions (excluding dividends and distributions paid in the form of additional shares of Stock) at the closing price of one share of Stock on the date such dividend or other distribution was paid, based on the Initial Stock Price, and the Closing Stock Price for the last day of the applicable Performance Measurement Period.
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(a)
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Amendment and Termination. The Company reserves the right to amend or terminate the Plan at any time in its discretion without the consent of any Participants, but no such amendment shall adversely affect the rights of the Participants with regard to outstanding Awards. In the event the Plan is terminated, the Company shall determine the Awards payable to Participants based on the Total Shareholder Return relative to the Performance Measurement Index for each Performance Measurement Period ending on the date of Plan termination. The Awards for each Performance Measurement Period shall be further prorated to reflect the shortened Performance Measurement Period.
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(b)
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No Contract for Continuing Services. This Plan shall not be construed as creating any contract for continued services between the Company or any of its subsidiaries and any Participant and nothing herein contained shall give any Participant the right to be retained as an employee or consultant of the Company or any of its subsidiaries.
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(c)
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No Transfers. A Participant’s rights in an interest under the Plan may not be assigned or transferred.
|
(d)
|
Unfunded Plan. The Plan shall be unfunded and shall not create (or be construed to create) a trust or separate fund. Likewise, the Plan shall not establish any fiduciary relationship between the Company or any of subsidiaries or affiliates and any Participant. To the extent that any Participant holds any rights by virtue of an Award under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company or any of its subsidiaries.
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(e)
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Governing Law. The Plan and each Award Notice awarded under the Plan shall be construed in accordance with and governed the laws of the State of Delaware, without regard to principles of conflict of laws of such state.
|
(f)
|
Tax Withholding. Any issuance of shares of Stock to a Participant shall be subject to tax withholding. The minimum tax withholding obligation shall be satisfied through a net issuance of shares. The Company shall withhold from shares of Stock to be issued to the Participant a number of shares of Stock with an aggregate fair market value that would satisfy the minimum withholding amount due.
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(g)
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Construction. Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.
|
(h)
|
Headings. The Section headings and Section numbers are included solely for ease of reference. If there is any conflict between such headings or numbers and the text of this Plan, the text shall control.
|
(i)
|
Effect on Other Plans. Nothing in this Plan shall be construed to limit the rights of Participants under the Company’s or its subsidiaries’ benefit plans, programs or policies.
|
(j)
|
Effective Date. The Plan shall be effective as of the Effective Date.
|
(a)
|
All payments and benefits described in this Plan are intended to constitute a short term deferral for purposes of Section 409A of the Internal Revenue Code of 1986, as amended. To the extent that any payment or benefit described in this Plan constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Participant’s termination of employment, then such payments or benefits shall be payable only upon the Participant’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A‑1(h).
|
(b)
|
The parties intend that this Plan will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Plan is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Plan may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in
|
(c)
|
The Company makes no representation or warranty and shall have no liability to the Participant or any other person if any provisions of this Plan are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.
|
Subsidiaries of the Registrant as of December 31, 2019
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Jurisdiction of Incorporation
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DYNARDO Austria GmbH
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Austria
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Fluent China Holdings Limited
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Barbados
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ANSYS Belgium S.A.
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Belgium
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Livermore Software Technology, LLC
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California
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ANSYS Canada Limited
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Canada
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2011767 Ontario, Inc.
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Canada
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Helic, Inc.
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Delaware
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ANSYS France SAS
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France
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OPTIS SAS
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France
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ANSYS Germany GmbH
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Germany
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DYNARDO (Dynamic Software and Engineering) GmbH
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Germany
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ANSYS HELLAS SINGLE MEMBER S.A.
|
Greece
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OPTIS Hong Kong
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Hong Kong
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ANSYS Software Private Limited
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India
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ANSYS Ireland Ltd.
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Ireland
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ANSYS Software, Ltd.
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Israel
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ANSYS Italia, S.r.l
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Italy
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ANSYS Japan K.K.
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Japan
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OPTIS Japan K.K.
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Japan
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ANSYS Luxembourg Holding Company S.à.r.l.
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Luxembourg
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|
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ANSYS Luxembourg S.à.r.l.
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Luxembourg
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Computational Engineering International, Inc.
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North Carolina
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Fluent Software (Shanghai) Co., Limited
|
People's Republic of China
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ANSYS-Fluent (Shanghai) Engineering Software Trading Co., Ltd.
|
People's Republic of China
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Apache Science and Technology (Shanghai) Co. Ltd.
|
People's Republic of China
|
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Apache Design Solutions Chengdu, Inc.
|
People's Republic of China
|
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OPTIS CN Limited
|
People's Republic of China
|
|
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ANSYS Poland Z.o.o.
|
Poland
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|
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ANSYS OOO
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Russia
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|
|
ANSYS Singapore Pte. Ltd.
|
Singapore
|
|
|
ANSYS Korea LLC
|
South Korea
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|
|
OPTIS KOREA Co., Ltd.
|
South Korea
|
|
|
ANSYS Iberia, S.L.
|
Spain
|
|
|
ANSYS Sweden AB
|
Sweden
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|
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ANSYS Switzerland GmbH
|
Switzerland
|
|
|
OPTIS World SA
|
Switzerland
|
|
|
Taiwan ANSYS Technologies Co.
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Taiwan
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ANSYS UK Limited
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United Kingdom
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Granta Design Limited
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United Kingdom
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OPTIS Pristine Limited
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United Kingdom
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1.
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I have reviewed this annual report on Form 10-K of ANSYS, Inc. (“Ansys”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Ansys as of, and for, the periods presented in this report;
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4.
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Ansys’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Ansys and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Ansys, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of Ansys’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in Ansys’ internal control over financial reporting that occurred during Ansys’ most recent fiscal quarter (Ansys’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Ansys’ internal control over financial reporting; and
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5.
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Ansys’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Ansys’ auditors and the audit committee of Ansys’ board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Ansys’ ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in Ansys’ internal control over financial reporting.
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Date:
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February 27, 2020
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/s/ Ajei S. Gopal
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Ajei S. Gopal
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President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of ANSYS, Inc. (“Ansys”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Ansys as of, and for, the periods presented in this report;
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4.
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Ansys’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Ansys and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Ansys, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of Ansys’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in Ansys’ internal control over financial reporting that occurred during Ansys’ most recent fiscal quarter (Ansys’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Ansys’ internal control over financial reporting; and
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5.
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Ansys’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Ansys’ auditors and the audit committee of Ansys’ board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Ansys’ ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in Ansys’ internal control over financial reporting.
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Date:
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February 27, 2020
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/s/ Maria T. Shields
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Maria T. Shields
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Chief Financial Officer
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(1)
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The Report fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Ajei S. Gopal
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Ajei S. Gopal
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President and Chief Executive Officer
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February 27, 2020
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(1)
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The Report fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Maria T. Shields
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Maria T. Shields
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Chief Financial Officer
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February 27, 2020
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