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Autodesk Annual Report (Amendment), Year Ended Jan 31, 1996

Filing Date
Filed March 3, 1997
Period End
January 31, 1996
Security
ADSK
In the record · 2016–202610-K1110-Q328-K113

ADSK filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 113 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Mar ’16Mar ’16
  2. Deal closed8-K · Dec ’18Dec ’18
  3. Leadership change8-K · May ’21May ’21
  4. Leadership change8-K · Jun ’25Jun ’25

01—Abstract

Summary

Summary of the 10-K/A filed March 3, 1997. Cited figures are marked; the original filing is the authoritative source.

Autodesk's 10-K covers fiscal year 1996, ended January 31, 1996.

Net revenues rose 17.5% to $534.2 milliona, and net income rose 55.1% to $87.8 million, or $1.76 per share. Income from operations grew 20.1% to $129.0 million. Results were lifted by record AutoCAD seat sales of 233,000 (up 15%) and a 32% rise in non-AutoCAD product sales, with Europe up 33%, Asia/Pacific up 23%, and the Americas up only 3%.

Fiscal 1995 results included a $25.5 millionb VMI litigation charge, so the year-over-year profit comparison is flattered by that one-time item. The main risk in the filing is AutoCAD Release 13. Performance and quality problems drove product returns to $51.2 million, or 9% of revenue, up from $28.6 million in fiscal 1995.

Returns were 12%c of revenue in the fourth quarter. AutoCAD and its updates still make up about 80% of revenue, so the company remains concentrated in one product family. Management says returns should fall in absolute dollars in fiscal 1997, but the filing gives no firm guidance.

Autodesk also repurchased about $108 milliond of stock and paid $11.2 million in dividends, and it began a push into new markets such as mechanical CAD, 3D animation (3D Studio MAX), GIS, and data management. Balance sheet strength remains solid. Cash, equivalents, and marketable securities total $272.4 million, working capital is $203.5 million, and stockholders' equity is $342.3 million.

Against that, the company has a pending $25.5 million VMI trade-secret judgment on appeal, with $28.0 million of securities restricted as collateral. Management believes the ultimate outcome will not be materially adverse.

02—Key points

Key Highlights

  1. Net revenues grew 17.5% to $534.2 million, with growth in every geography and the strongest gain in Europe (+33%).
  2. Net income rose 55.1% to $87.8 million ($1.76 per share), but fiscal 1995 included a ~$26 million pre-tax VMI litigation charge, so underlying earnings growth was about 20%.
  3. AutoCAD Release 13 quality and performance issues drove product returns to $51.2 million (9% of revenue), versus $28.6 million (6%) in fiscal 1995, and returns peaked at 12% of revenue in Q4.
  4. AutoCAD and its updates still account for roughly 80% of revenue, and the installed base is approaching 1.5 million seats, showing both the franchise's strength and its concentration risk.
  5. Operating return on net revenues improved to 16.4% from 12.5%, and cash, equivalents, and marketable securities of $272.4 million exceed the $108 million spent on share repurchases during the year.
  6. New growth initiatives include Autodesk Mechanical Desktop, 3D Studio MAX (Kinetix division), AutoCAD Map (GIS), and data management products, with the stock symbol changed from ACAD to ADSK.
  7. Pending VMI trade-secret appeal: a $25.5 million judgment is accrued, $28.0 million of long-term securities is restricted as collateral, and management views the outcome as not materially adverse.

03—Questions

Frequently Asked Questions

  1. How much of Autodesk's revenue depends on AutoCAD?

    Sales of AutoCAD and AutoCAD updates were approximately 80% of revenue in fiscal 1996 and 1995, down from about 85% in fiscal 1994. The company is working to diversify, but AutoCAD remains its core franchise, and any problems with it would materially affect results.

  2. Why did product returns increase so sharply in fiscal 1996?

    Returns rose to $51.2 million (9% of revenue) because of performance, compatibility, and interoperability problems with the initial AutoCAD Release 13 versions, followed by corrective releases that customers did not fully accept. Returns were 79% AutoCAD products. Management expects returns to decline in absolute dollars in fiscal 1997, but future returns will still depend on update cycles and software quality.

  3. Did the net income increase reflect real operating improvement?

    Partly. Reported net income rose 55.1%, but fiscal 1995 was depressed by a roughly $26 million pre-tax litigation charge. Excluding that charge, earnings grew about 20%, which is closer to the underlying trend. Operating income rose 20.1% to $129.0 million, supporting that view.

  4. What are the main legal and financial risks for investors?

    The main legal risk is the Vermont Microsystems trade-secret case: a $25.5 million judgment is accrued, and the appeal is pending before the Second Circuit. The company holds $28.0 million of restricted securities as collateral. Management believes the claims are without merit and that the outcome will not be materially adverse, but an unfavorable ruling could affect future results or cash flows in a given period. The company has no borrowings under its $40 million credit line.

  5. How strong is Autodesk's balance sheet and capital return program?

    At January 31, 1996, cash, equivalents, and marketable securities totaled $272.4 million, working capital was $203.5 million, and stockholders' equity was $342.3 million. The company repurchased about $108 million of stock, paid $11.2 million in dividends ($0.24 per share), and expects existing resources to meet fiscal 1997 cash needs.

04—Continue

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