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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-20853
ANSYS, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 04 -3219960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
275 Technology Drive, Canonsburg, PA 15317
(Address of principal executive offices) (Zip Code)
724-746-3304
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None None
(Title of each class) (Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value per share
(Title of class)
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X] No [ ]
Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of the registrant's knowledge, in definitive proxy or information statements
incorporated by reference in PART III of this Form 10-K, or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of the Common Stock on
March 22, 1999 as reported on the Nasdaq National Market, was approximately
$56,376,523. Shares of Common Stock held by each officer and director and by
each person who owns 5% or more of the outstanding Common Stock have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.
The number of shares of the Registrant's Common Stock, par value $.01 per share,
outstanding as of March 22, 1999 was 16,405,692 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the fiscal year ended December
31, 1998 are incorporated by reference into Parts I, II and IV. Portions of the
Proxy Statement for the Registrant's 1999 Annual Meeting of Stockholders to be
held on May 5, 1999 are incorporated by reference into Part III.
Important Factors Regarding Future Results
Information provided by ANSYS, Inc. ("the Company), including information
contained in this Annual Report on Form 10-K, or by its spokespersons may from
time to time contain forward-looking statements concerning such matters as
projected financial performance, market and industry segment growth, product
development and commercialization, acquisitions or other aspects of future
operations. Such statements, made pursuant to the safe harbor established by
the securities laws, are based on the assumptions and expectations of the
Company's management at the time such statements are made. The Company cautions
investors that its performance (and, therefore, any forward-looking statement)
is subject to risks and uncertainties. Various important factors, including but
not limited to those discussed herein, may cause the Company's future results to
differ materially from those projected in any forward-looking statement.
Important information about the basis for those assumptions is contained in
"Important Factors Regarding Future Results" included in Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
incorporated by reference to pages 10 through 19 of the Company's 1998 Annual
Report to Stockholders. All information presented is as of December 31, 1998
unless otherwise indicated.
PART I
ITEM 1: BUSINESS
ANSYS, Inc. develops, markets and supports software solutions for design
analysis and optimization. Engineering analysts and design engineers use the
Company's software to accelerate product time to market, reduce production
costs, improve engineering processes and optimize product quality and safety for
a variety of manufactured products. The ANSYS(R) product family features open,
flexible architecture that permits easy integration and collaboration within
customers' enterprise-wide engineering systems.
Since its founding in 1970 as Swanson Analysis Systems, Inc. ("Swanson
Analysis"), the Company has become a technology leader in the market for
computer-aided engineering ("CAE") analysis software. The Company has long-
standing relationships with customers in many industries, including automotive,
aerospace, consumer goods and electronics. Using the Company's products,
engineers can construct computer models of structures, compounds, components or
systems to simulate performance conditions and physical responses to varying
levels of stress, pressure, temperature and velocity. This helps reduce the time
and expense of physical prototyping and testing.
The Company's product line ranges from ANSYS/Multiphysics, a sophisticated
multi-disciplinary CAE tool for engineering analysts, to its DesignSpace(R)
products, innovative computer-aided design ("CAD")-integrated design
optimization products for design engineers. The Company's individual design and
analysis software programs, all of which are included in the ANSYS/Multiphysics
program, are available as subsets or standalone products. The Company's
multiphysics products, and maintenance sold in connection with those products,
comprise the core of its business and accounted for a substantial portion of the
Company's revenue in 1998, 1997 and 1996. The Company's CAD integration
products provide design optimization tools for use directly within a particular
CAD product. CAD integration products are accessed from the graphical user
interface of, and operate directly on the geometry produced within, the CAD
product. The output from these programs may be read into any of the products in
the ANSYS product family. The Company's product family features a unified
database, a wide range of analysis functionality, a consistent, easy-to-use
graphical user interface, support for multiple hardware platforms and operating
systems (including Windows 95, Windows NT and UNIX), effective user
customization tools and integration with leading CAD systems. The Company's
products are developed using the Company's ISO 9001-certified quality system.
The Company markets its products principally through its global network of 35
independent regional ANSYS Support Distributors ("ASDs"), which have 67 offices
in 26 countries.
PRODUCT DEVELOPMENT
The Company makes significant investments in research and development and
emphasizes accelerated new product releases. The Company's product development
strategy centers on ongoing development and innovation of new technologies to
increase productivity and provide solutions that customers can integrate into
enterprise-wide
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engineering systems. The Company's product development efforts focus on
extensions of the ANSYS product family with new functional modules, further
integration with CAD products and the development of new products based on
object-oriented technology. The Company's products run on the most widely used
engineering computing platforms and operating systems, including Windows 95,
Windows NT and most UNIX workstations, as well as on supercomputers such as the
Cray.
During 1998, the Company achieved the following with respect to major product
development activities and releases:
. The release of ANSYS 5.5, a new and enhanced version of the Company's
flagship multiphysics product, and all component products. Major
enhancements in this release include lower and higher order flexible-to-
flexible contact; increased solution power for highly nonlinear structural
analysis; new turbulence models for computational fluid dynamics; nonlinear
harmonic analysis for electromagnetic applications; and topological
optimization.
. ANSYS/ProFEA and ANSYS Connection for Pro/ENGINEER enhancement releases were
available subsequent to Parametric Technology Corporation's ("Parametric
Technology") release of its new versions of Pro/ENGINEER. These products
enable users to access Pro/ENGINEER geometry directly from ANSYS products.
. The release of commercial versions of DesignSpace 4.0. These products are
developed using a C++ object-oriented product development environment . The
current release of the DesignSpace products provides expanded functionality
to associatively support geometry created in Mechanical Desktop, SolidWorks
and Unigraphics, and support solid models created in any ACIS or Parasolid
modeling CAD program. The software allows engineers to quickly and easily
simulate design performance and provides tighter integration between design
and analysis, as well as enhanced solving capabilities.
The Company's total research and development expense was $11.6 million, $11.0
million and $9.8 million in 1998, 1997 and 1996 or 20.6%, 21.8% and 20.8% of
total revenue, respectively. As of December 31, 1998, the Company's product
development staff consisted of 106 full time employees, most of whom hold
advanced degrees and have industry experience in engineering, mathematics,
computer science or related disciplines.
The Company uses multi-functional teams to develop its products and develops
them simultaneously on multiple platforms to reduce subsequent porting costs. In
addition to developing source code, these teams create and perform highly
automated software verification tests; develop on-line documentation and help
for the products; implement development enhancement tools, software
configuration management and product licensing processes; and conduct regression
tests of ANSYS products for all supported platforms.
PRODUCT QUALITY
During 1998, the Company continued to maintain ISO 9001 certification for its
quality system. This standard applies to all of the Company's commercial
software products and covers all product-related activities, from establishing
product requirements to customer service practices and procedures.
In accordance with the ISO 9001 certification for its quality system, the
Company's employees perform all product development and support tasks according
to predefined quality plans, procedures and work instructions. These plans
define for each project the methods to be used, the responsibilities of project
participants and the quality objectives to be met. To ensure that the Company
meets or surpasses the IS0 9001 standards, the Company establishes quality plans
for all products and services, subjects product designs to multiple levels of
testing and verification, and selects development subcontractors in accordance
with processes established under the Company's quality system.
3
SALES AND MARKETING
The Company distributes its multiphysics products and services primarily through
its global ASD network. This network provides the Company with a cost-effective,
highly specialized channel of distribution and technical support. Approximately
82% of the Company's revenue in 1998 was derived through the ASDs.
At December 31, 1998, the ASD network consisted of 35 independent distributors
in 67 locations in 26 countries, including 16 in North America, 8 in Europe and
11 throughout the Asia-Pacific region and the remainder of the world. The ASDs
sell ANSYS and DesignSpace products to new customers, expand installations
within the existing customer base, offer training and consulting services and
provide the first line of ANSYS technical support. The Company's ASD
certification process helps to ensure that each ASD has the ongoing capacity to
adequately represent the Company's product line and provide an acceptable level
of training, consultation and support.
The Company also has a sales management infrastructure in place to work with the
ASDs to develop a more enterprise-wide focused sales approach, to implement a
worldwide major account strategy and to provide additional support in strategic
locations through the presence of direct sales offices. As of December 31,
1998, the Company's sales management organization consisted of a North American
Vice President of Sales, supported by four Regional Sales Directors and four
Major Account Representatives; an International Vice President of Sales and a
Regional Sales Director; and a European Managing Director supported by three
Regional Sales Directors and one Strategic Account Manager.
During 1998, the Company continued to expand its direct global sales
infrastructure through the establishment of additional regional sales offices in
Houston, Texas; Minneapolis, Minnesota; New England and China. The Company also
continued to invest in its previously established strategic sales offices in the
United Kingdom, Michigan and Japan. In total, these offices employ 26 persons
who are responsible for the implementation of sales and marketing initiatives
and administration in those geographic areas designed to support the Company's
overall revenue growth and market share expansion strategies.
During fiscal 1998, the Company also continued to expand the reseller channel
for both its ANSYS and DesignSpace products. This channel compliments the ASD
network by establishing a broader user base for the Company's products and
services. As of December 31, 1998, the Company had signed agreements with 172
resellers. All resellers are required to meet the Company's standards for sales
and customer support by ensuring they have appropriately trained marketing and
technical personnel.
The Company's products have an installed base of approximately 53,000 seats at
commercial sites and approximately 97,000 seats at university sites worldwide.
The Company's products are utilized by organizations ranging in size from small
consulting firms to the world's largest industrial companies. No single
customer accounted for more than 1.4% of the Company's revenue in fiscal 1998.
Information with respect to foreign and domestic revenue may be found in Note 15
to the Consolidated Financial Statements and the section entitled " Management's
Discussion and Analysis of Financial Condition and Results of Operations" of the
Annual Report to Stockholders for the year ended December 31,1998 ("1998 Annual
Report to Stockholders"), which financial statements are included in Exhibit
13.1 to this Annual Report on Form 10-K and incorporated herein by reference.
Additionally, countries in the Asia-Pacific region, including Japan, have
experienced weaknesses in their currency, banking and equity markets throughout
most of 1998. To the extent that such trends continue, these economic
weaknesses could adversely affect consumer demand for the Company's products and
ultimately the Company's financial position or results of operations.
STRATEGIC ALLIANCES AND MARKETING RELATIONSHIPS
The Company has established and continues to pursue strategic alliances with
advanced technology suppliers and marketing relationships with hardware vendors,
specialized application developers and CAD providers. The Company believes these
relationships allow it to accelerate the incorporation of advanced technology
into the ANSYS product family, gain access to important new markets, expand the
Company's sales channel, develop specialized product applications and provide
direct integration with leading CAD systems.
4
One such example is the Company's software license agreement with Livermore
Software Corporation under which Livermore has provided LS/DYNA software for
explicit dynamics solutions used in applications such as crash test simulation
in the automotive and other industries. Under this arrangement, Livermore
assists in the integration of the LS/DYNA software with the Company's pre- and
postprocessing capabilities and provides updates and problem resolution in
return for a share of revenue from sales of ANSYS/LS-DYNA.
The Company has technical and marketing relationships with leading CAD vendors,
such as Parametric Technology, Autodesk, Computervision, Intergraph,
EDS/Unigraphics, SolidWorks and Dassault Systemes, to provide direct links
between the vendors' CAD packages. These links facilitate the transfer of
electronic data models between the CAD system and ANSYS products. During 1998,
the Company also entered into a joint marketing and development agreement with
Tanner EDA, a leader in PC-based design software for MicroElectro Mechanical
Systems, aimed at accelerating the growth of microsystem product design to
deliver a new generation of design and analysis capabilities.
The Company has established relationships with leading suppliers of computer
hardware, including Hewlett-Packard, Compaq, Silicon Graphics/Cray, Sun
Microsystems, Intergraph, IBM, Dell and Intel. The relationships typically
provide the Company with joint marketing and advertising, Internet links with
the hardware partner's home page and reduced equipment costs.
The Company's Enhanced Solution Provider Program actively encourages specialized
developers of niche software solutions to use ANSYS as a development platform
for their applications. Examples of companies using the products include COMET
Acoustics, which uses ANSYS/PrepPost/TM/ to run its acoustic solver for the
automobile industry; AC Technologies, which provides an interface to ANSYS in
connection with its plastic injection mold flow analysis product; Materials
Engineering Research Laboratory, Ltd., which offers a bundled product consisting
of their FLEXPAC solver, and ANSYS/PrepPost/TM/ that enables users to make
fatigue calculations an integral part of their design process for a wide range
of elastomeric components. In most cases, the sale of the Enhanced Solution
Providers' products is accompanied by the sale of an ANSYS product.
COMPETITION
The CAD, CAE and computer-aided manufacturing ("CAM") markets are intensely
competitive. In the traditional CAE market, the Company's primary competitors
include MacNeal-Schwendler Corporation, Hibbitt, Karlsson and Sorensen, Inc. and
MARC Analysis Research Corporation. The Company also faces competition from
smaller vendors of specialized analysis applications in fields such as
computational fluid dynamics. In addition, certain integrated CAD suppliers such
as Parametric Technology, Structural Dynamics Research Corporation and Dassault
Systemes provide varying levels of design analysis and optimization and
verification capabilities as part of their product offerings.
The entrance of new competitors would likely intensify competition in all or a
portion of the overall CAD, CAE and CAM markets. Some of the Company's current
and possible future competitors have greater financial, technical, marketing and
other resources than the Company, and some have well-established relationships
with current and potential customers of the Company. It is also possible that
alliances among competitors may emerge and rapidly acquire significant market
share or that competition will increase as a result of software industry
consolidation. Increased competition may result in price reductions, reduced
profitability and loss of market share, any of which would materially adversely
affect the Company's business, financial condition and results of operations.
The Company believes that the principal competitive factors affecting its market
include ease of use; flexibility; quality; ease of integration into CAD systems;
file compatibility across computer platforms; range of supported computer
platforms; performance; price and cost of ownership; customer service and
support; company reputation and financial viability; and effectiveness of sales
and marketing efforts. Although the Company believes that it currently competes
effectively with respect to such factors, there can be no assurance that the
Company will be able to maintain its competitive position against current and
potential competitors. There also can be no assurance that CAD software
companies will not develop their own analysis software, acquire analysis
software from companies other than the Company or otherwise discontinue their
relationships with the Company. If any of these events occur, the Company's
business, financial condition and results of operations could be materially
adversely affected.
5
PROPRIETARY RIGHTS AND LICENSES
The Company regards its software as proprietary and relies on a combination of
trade secret, copyright and trademark laws, license agreements, nondisclosure
and other contractual provisions, and technical measures to protect its
proprietary rights in its products. The Company distributes its ANSYS software
under software license agreements that grant customers nonexclusive licenses for
the use of the Company's products, which are typically nontransferable. Although
the Company distributes its products primarily through the ASDs, licenses of the
Company's products are directly between the Company and end users. Use of the
licensed software is usually restricted to the customer's internal operations on
designated computers at specified sites unless the customer obtains a site
license for its use of the software. Software and hardware security measures are
also employed to prevent unauthorized use of the Company's software, and the
licensed software is subject to terms and conditions prohibiting unauthorized
reproduction of the software. Customers may either purchase a paid-up perpetual
license of the technology with the right to purchase annually ongoing
maintenance, support and updates, or may lease the product on an annual basis
for a fee which includes the license, maintenance, support and upgrades.
For certain software such as DesignSpace and ANSYS/ED, the Company primarily
relies on "shrink-wrapped" licenses that are not signed by licensees. The
enforceability of these types of agreements under the laws of certain
jurisdictions is uncertain.
The Company also seeks to protect the source code of its software as a trade
secret and as unpublished copyrighted work. The Company has obtained a federal
trademark protection for ANSYS and DesignSpace. The Company has also obtained
trademark registrations of ANSYS and DesignSpace in a number of foreign
countries and is in the process of seeking such registration in other foreign
countries.
Most employees of the Company have signed a Covenant Agreement under which they
have agreed not to disclose trade secrets or confidential information, or to
engage in or become connected with any business which is competitive with the
Company anywhere in the world while employed by the Company (and in some cases
for specified periods thereafter), and that any products or technology created
by them during their term of employment is the property of the Company. In
addition, the Company requires all ASDs to enter into agreements not to disclose
the Company's trade secrets and other proprietary information.
Despite these precautions, there can be no assurance that misappropriation of
the Company's technology will not occur. Further, there can be no assurance that
copyright and trade secret protection will be available for the Company's
products in certain countries, or that restrictions on competition will be
enforceable.
The software development industry is characterized by rapid technological
change. Therefore, the Company believes that factors such as the technological
and creative skills of its personnel, new product developments, frequent product
enhancements, name recognition and reliable product maintenance are more
important to establishing and maintaining a technology leadership position than
the various legal protections of its technology which may be available.
The Company is not aware that any of its products infringe upon the proprietary
rights of third parties. There can be no assurance, however, that third parties
will not claim in the future such infringement by the Company or its licensors
or licensees with respect to current or future products. The Company expects
that software product developers will increasingly be subject to such claims as
the number of products and competitors in the Company's market segment grow and
the functionality of products in different market segments overlaps. Any such
claims, with or without merit, could be time-consuming, result in costly
litigation, cause product shipment delays or require the Company to enter into
royalty or licensing agreements. Such royalty or licensing agreements, if
required, may not be available on terms acceptable to the Company.
BACKLOG
The Company generally ships its products within 30 days after acceptance of an
order and execution of a software license agreement. Accordingly, the Company
does not believe that its backlog at any particular point in time is indicative
of future sales levels.
6
EMPLOYEES
As of December 31, 1998, the Company had 260 full time employees. At that date,
there were also approximately five contract personnel and co-op students
providing ongoing development services and technical support. The Company
believes that its relationship with its employees is good.
ITEM 2: PROPERTIES
The Company's executive offices and those related to product development,
marketing, production and administration are located in a 107,000 square foot
office facility in Canonsburg, Pennsylvania, which is leased for an annual rent
of approximately $1,227,000. The Company also leases office space in various
locations throughout the world. ANSYS's subsidiaries lease office space for
their operations. The Company owns substantially all equipment used in its
facilities. Management believes that its facilities allow for sufficient space
to support not only its present needs, but also allow for expansion and growth
as the business may require in the foreseeable future.
ITEM 3: LEGAL PROCEEDINGS
The Company is subject to various legal proceedings from time to time that arise
in the ordinary course of business activities. Each of these matters is subject
to various uncertainties, and it is possible that these matters may be resolved
unfavorably to the Company.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal year 1998.
PART II
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this Item is incorporated by reference to page 35
and the section captioned "Corporate Information" appearing in the Company's
1998 Annual Report to Stockholders.
ITEM 6: SELECTED FINANCIAL DATA
The information required by this Item is incorporated by reference to page 1 of
the Company's 1998 Annual Report to Stockholders.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item is incorporated by reference to pages 10
through 19 of the Company's 1998 Annual Report to Stockholders, including the
Important Factors Regarding Future Results.
7
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated by reference to pages 20
through 34 of the Company's 1998 Annual Report to Stockholders.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning the Company's directors and executive officers
required by this Item is incorporated by reference to the Company's 1999 Proxy
Statement and is set forth under "Information Regarding Directors" and
"Information Regarding Executive Officers" therein.
ITEM 11: EXECUTIVE COMPENSATION
The information required by this Item is incorporated by reference to the
Company's 1999 Proxy Statement and is set forth under "Executive Compensation"
therein.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated by reference to the
Company's 1999 Proxy Statement and is set forth under "Principal and Management
Stockholders" therein.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated by reference to the
Company's 1999 Proxy Statement and is set forth under "Certain Transactions"
therein.
PART IV
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents Filed as Part of this Annual Report on Form 10-K:
1. Financial Statements: The following Consolidated Financial Statements of
ANSYS, Inc. and Report of PricewaterhouseCoopers LLP, Independent
Accountants, are incorporated by reference to pages 20 through 33 of the
Registrant's 1998 Annual Report to Stockholders:
- Report of PricewaterhouseCoopers LLP, Independent Accountants
- Consolidated Balance Sheets as of December 31, 1998 and 1997
- Consolidated Statements of Income for the years ended
December 31, 1998, 1997 and 1996
- Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997 and 1996
- Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1998, 1997 and 1996
- Notes to Consolidated Financial Statements
8
2. Financial Statement Schedules: The following financial statement schedule
for ANSYS, Inc. is filed on page 13 of this Annual Report and should be
read in conjunction with the Consolidated Financial Statements of ANSYS,
Inc.
Schedule II - Valuation and Qualifying Accounts
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the Consolidated Financial Statements or Notes
thereto.
3. Exhibits:
The Exhibits listed on the accompanying Exhibit Index immediately following
the financial statement schedules are filed as part of, or incorporated by
reference into, this Annual Report.
(b) Reports on Form 8-K:
The Registrant did not file any reports on Form 8-K during the last quarter of
the period covered by this Annual Report.
(c) Exhibits
The Company hereby files as part of this Annual Report on Form 10-K the Exhibits
listed in the attached Exhibit Index on page 11 of this Annual Report.
(d) Financial Statement Schedules
The Company hereby files as part of this Annual Report on Form 10-K the
financial statement schedule listed in Item 14 (a) 2 as set forth above.
9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ANSYS, Inc.
Date: March 22, 1999 By: /s/ Peter J. Smith
------------------------------
Peter J. Smith
Chairman, President and Chief
Executive Officer
Date: March 22, 1999 By: /s/ Maria T. Shields
-------------------------------
Maria T. Shields
Chief Financial Officer,
Vice President, Finance
and Administration
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Peter J. Smith, his or her attorney-in-fact, with
the power of substitution, for such person in any and all capacities, to sign
any amendments to this Report on Form 10-K, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said attorney-in-
fact, or substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated below.
Signature Title Date
- --------- ----- ----
/s/ Peter J. Smith Chairman of the Board of Directors, March 22, 1999
- ---------------------------------------- President and Chief Executive Officer
Peter J. Smith (Principal Executive Officer)
/s/ Maria T. Shields Chief Financial Officer, Vice President, March 22, 1999
- ---------------------------------------- Finance and Administration; (Principal
Maria T. Shields Financial Officer and Accounting Officer)
/s/ Dr. John A. Swanson Chief Technologist and Director March 22, 1999
- ----------------------------------------
Dr. John A. Swanson
/s/ Jacqueline C. Morby Director March 22, 1999
- ----------------------------------------
Jacqueline C. Morby
/s/ Roger B. Kafker Director March 22, 1999
- ----------------------------------------
Roger B. Kafker
/s/ Gary B. Eichhorn Director March 22, 1999
- ----------------------------------------
Gary B. Eichhorn
/s/ Roger J. Heinen, Jr. Director March 22, 1999
- ----------------------------------------
Roger J. Heinen, Jr.
/s/ John F. Smith Director March 22, 1999
- ----------------------------------------
John F. Smith
10
EXHIBIT INDEX
-------------
Exhibit No. Exhibit
- ----------- -------
3.1 Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1996 and incorporated
herein by reference).
3.2 By-laws of the Company (filed as Exhibit 3.3 to the Company's Registration Statement on
Form S-1 (File No. 333-4278) and incorporated herein by reference).
10.1 1994 Stock Option and Grant Plan, as amended (filed as Exhibit 10.1 to the Company's
Registration Statement on Form S-1 (File No. 333-4278) and incorporated herein by
reference). *
10.2 1996 Stock Option and Grant Plan, as amended (filed as Exhibit 10.1 to the Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1996 and incorporated herein by
reference). *
10.3 1996 Employee Stock Purchase Plan, as amended (filed as Exhibit 10.2 to the Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30, 1996 and incorporated herein by
reference). *
10.4 Investment Agreement among SAS Holdings, Inc., the Present Investors (as defined), Peter
J. Smith and the Parametric Investors (as defined) dated July 8, 1994, as amended (filed
as Exhibit 10.6 to the Company's Registration Statement on Form S-1 (File No. 333-4278)
and incorporated herein by reference).
10.5 Employment Agreement among the Registrant, a subsidiary of the Registrant and Dr. John A.
Swanson dated February 7, 1994 (filed as Exhibit 10.7 to the Company's Registration
Statement on Form S-1 (File No. 333-4278) and incorporated herein by reference). *
10.6 Incentive Stock Option Agreement between the Registrant and Dr. John A. Swanson dated
March 14, 1994, as amended (filed as Exhibit 10.8 to the Company's Registration Statement
on Form S-1 (File No. 333-4278) and incorporated herein by reference). *
10.7 Agreement Regarding Inventions, Confidentiality and Competitive Activities between the
Registrant, subsidiaries of the Registrant and Dr. John A. Swanson dated February 7, 1994
(filed as Exhibit 10.9 to the Company's Registration Statement on Form S-1 (File No.
333-4278) and incorporated herein by reference). *
10.8 Employment Agreement between a subsidiary of the Registrant and Peter J. Smith dated as
of March 28, 1994 (filed as Exhibit 10.10 to the Company's Registration Statement on Form
S-1 (File No. 333-4278) and incorporated herein by reference). *
10.9 Restricted Stock Agreement between the Registrant and Peter J. Smith dated July 12, 1994
(filed as Exhibit 10.11 to the Company's Registration Statement on Form S-1 (File No.
333-4278) and incorporated herein by reference). *
- --------------------------
* Indicates management contract or compensatory plan, contract or
arrangement.
11
10.10 Pledge Agreement between the Registrant and Peter J. Smith dated July 12, 1994 (filed as
Exhibit 10.12 to the Company's Registration Statement on Form S-1 (File No. 333-4278) and
incorporated herein by reference). *
10.11 Letter Agreement between a subsidiary of the Registrant and Peter J. Smith dated July 12,
1994 (filed as Exhibit 10.13 to the Company's Registration Statement on Form S-1 (File
No. 333-4278) and incorporated herein by reference). *
10.12 Promissory Note between the Registrant and Peter J. Smith dated July 12, 1994, as amended
(filed as Exhibit 10.14 to the Company's Registration Statement on Form S-1 (File No.
333-4278) and incorporated herein by reference). *
10.13 Restricted Stock Agreement between the Registrant and Peter J. Smith dated February 29,
1996, as amended. (filed as Exhibit 10.14 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 and incorporated herein by reference). *
10.14 Incentive Option Agreement between the Registrant and Peter J. Smith dated February 29,
1996, as amended. (filed as Exhibit 10.15 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 and incorporated herein by reference). *
10.15 Key-Man Executive Life Insurance Policies for Peter J. Smith and Dr. John A. Swanson
(filed as Exhibit 10.17 to the Company's Registration Statement on Form S-1 (File No.
333-4278) and incorporated herein by reference).
10.16 Lease between National Build to Suit Washington County, L.L.C. and the Registrant for the
Southpointe property (filed as Exhibit 10.19 to the Company's Registration Statement on
Form S-1 (File No. 333-4278) and incorporated herein by reference).
10.17 Registrant's Pension Plan and Trust, as amended (filed as Exhibit 10.20 to the Company's
Registration Statement on Form S-1 (File No. 333-4278) and incorporated herein by
reference). *
10.18 Form of Director Indemnification Agreement (filed as Exhibit 10.21 to the Company's
Registration Statement on Form S-1 (File No. 333-4278) and incorporated herein by
reference). *
13 Annual Report to Stockholders for the fiscal year ended December 31, 1998 (which is not
deemed to be "filed" except to the extent that portions thereof are expressly
incorporated by reference in this Annual Report on Form 10-K); filed herewith.
21 Subsidiaries of the Registrant; filed herewith.
23.1 Report of PricewaterhouseCoopers LLP; filed herewith.
23.2 Consent of PricewaterhouseCoopers LLP; filed herewith.
23.3 Consent of PricewaterhouseCoopers LLP for Form 11-K; filed herewith.
24.1 Powers of Attorney. Contained in page 10 of this Annual Report on Form 10-K and
incorporated herein by reference.
27.1 Financial Data Schedule; filed herewith.
99 1996 Employee Stock Purchase Plan Annual Report on Form 11-K.
- ---------------------------
* Indicates management contract or compensatory plan, contract or
arrangement.
12
SCHEDULE II
ANSYS, INC.
Valuation and Qualifying Accounts
Balance at Deductions - Balance
Beginning Additions - Returns and at End
Description of Year Provisions Write-Offs of Year
- ----------------------------------------------------------------------------------------------------------------------
Year ended December 31, 1998 $2,080,000 $1,309,000 $1,489,000 $1,900,000
Allowance for doubtful
accounts
Year ended December 31, 1997 $ 950,000 $1,435,000 $ 305,000 $2,080,000
Allowance for doubtful
accounts
Year ended December 31, 1996 $ 700,000 $ 560,000 $ 310,000 $ 950,000
Allowance for doubtful
accounts
13