(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

OR

o

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 incorporation or organization)

(IRS Employer 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)

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   o

Indicate by a check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes   x

No   o

The number of shares of the Registrant’s Common Stock, par value $.01 per share, outstanding as of May 9, 2003 was 14,812,263 shares.

Page No.

PART I.

UNAUDITED FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets – March 31, 2003 and December 31, 2002

3

Condensed Consolidated Statements of Income – Three Months Ended March 31, 2003 and 2002

4

Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2003 and 2002

5

Notes to Condensed Consolidated Financial Statements

6-10

Independent Accountants’ Report

11

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

12-18

Item 3.

Quantitative and Qualitative Disclosures Regarding Market Risk

19

Item 4.

Controls and Procedures

20

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

21

Item 2.

Changes in Securities

21

Item 4.

Submission of Matters to a Vote of Security Holders

21

Item 6.

Exhibits and Reports Filed on Form 8-K

22

SIGNATURES

23

CERTIFICATIONS

24-25

EXHIBIT INDEX

26

March 31,
2003

Dec. 31,
2002

ASSETS

Current assets:

Cash and cash equivalents

$

36,849

$

46,198

Short-term investments

14,944

14,934

Accounts receivable, less allowance for doubtful accounts of $2,377 and $1,560, respectively

18,878

15,875

Other current assets

15,751

13,737

Deferred income taxes

2,570

1,747

Total current assets

88,992

92,491

Long-term investment

486

486

Property and equipment, net

5,953

4,302

Capitalized software costs, net

949

971

Goodwill

30,212

18,615

Other intangibles, net

16,169

5,098

Deferred income taxes

4,572

5,038

Total assets

$

147,333

$

127,001

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

1,133

$

627

Accrued bonuses

1,895

2,941

Other accrued expenses and liabilities

10,193

5,645

Deferred revenue

36,672

26,395

Total current liabilities

49,893

35,608

Stockholders’ equity:

Preferred stock, $.01 par value, 2,000,000 shares authorized

—  

—  

Common stock, $.01 par value; 50,000,000 shares authorized; 16,584,758 shares issued

166

166

Additional paid-in capital

41,453

41,416

Less treasury stock, at cost: 1,882,099 and 2,014,999 shares, respectively

(28,998

)

(30,337

)

Retained earnings

83,667

79,388

Accumulated other comprehensive income

1,152

760

Total stockholders’ equity

97,440

91,393

Total liabilities and stockholders’ equity

$

147,333

$

127,001

Three months ended

March 31,
2003

March 31,
2002

Revenue:

Software licenses

$

12,442

$

11,330

Maintenance and service

12,158

9,935

Total revenue

24,600

21,265

Cost of sales:

Software licenses

1,179

1,037

Maintenance and service

2,894

1,814

Total cost of sales

4,073

2,851

Gross profit

20,527

18,414

Operating expenses:

Selling and marketing

5,512

5,161

Research and development

5,656

4,819

Amortization

748

599

General and administrative

2,644

2,330

Total operating expenses

14,560

12,909

Operating income

5,967

5,505

Other income

534

171

Income before income tax provision

6,501

5,676

Income tax provision

2,222

1,788

Net income

$

4,279

$

3,888

Earnings per share - basic:

Basic earnings per share

$

0.29

$

0.27

Weighted average shares – basic

14,627

14,588

Earnings per share - diluted:

Diluted earnings per share

$

0.27

$

0.25

Weighted average shares – diluted

15,584

15,843

Three months ended

March 31,
2003

March 31,
2002

Cash flows from operating activities:

Net income

$

4,279

$

3,888

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

1,379

1,146

Deferred income tax provision

(74

)

72

Provision for bad debts

152

49

Changes in operating assets and liabilities:

Accounts receivable

1,808

2,246

Other current assets

(1,011

)

65

Accounts payable, accrued expenses and liabilities

(558

)

(5,967

)

Deferred revenue

5,493

1,390

Net cash provided by operating activities

11,468

2,889

Cash flows from investing activities:

Capital expenditures

(640

)

(645

)

Capitalization of internally developed software costs

(103

)

—  

Purchases of short-term investments

(4,985

)

(6,976

)

Maturities of short-term investments

4,975

35

Acquisition of CFX, net of cash acquired

(21,489

)

—  

Other acquisition payments

—  

(3,436

)

Purchase of long-term investment

—  

(600

)

Cash used in investing activities

(22,242

)

(11,622

)

Cash flows from financing activities:

Proceeds from issuance of common stock under Employee Stock Purchase Plan

187

136

Purchase of treasury stock

—  

(3,317

)

Proceeds from exercise of stock options

1,189

2,061

Net cash provided by (used in) financing activities

1,376

(1,120

)

Effect of exchange rate changes on cash

49

(235

)

Net decrease in cash and cash equivalents

(9,349

)

(10,088

)

Cash and cash equivalents, beginning of period

46,198

28,545