Sunday, September 18, 2011

Ansys ( Nasdaq - ANSS ) -- Apache Acquisition Reinforces Momentum

Ansys (ANSS $54.00) appears on track to produce excellent on target Q3 results.  More than two thirds of revenue is reoccurring so visibility was high going into the quarter.  The Apache acquisition, which was completed on August 1st, will lift Q3 revenues by $3-$4 million, putting them in the $75-$80 million range.  Apache's annualized revenue run rate currently is around $50 million.  That company was preparing to go public when Ansys swooped in with a premium all cash offer.  Apache probably won't contribute to earnings much in 2011 but its technology -- simulating systems on a chip -- promises to become a major contributor over the next several years.  Meantime, new orders have remained solid despite the worldwide economic slowdown.  A deeper contraction might impact business in the future.  For now, though, customers continue to generate high rates of return on Ansys's technology.  Demand is broadly diversified both geographically and by industry.  Direct competition exists in spots but nobody provides the range Ansys delivers.  As product development becomes increasingly complex and interconnected that competitive edge is likely to expand even further.  Our estimates are unchanged.

( Click on Table to Enlarge )

No comments:

Post a Comment