Skip to content
AnalystLens

Autodesk Annual Report, Year Ended Jan 31, 1997

Filing Date
Filed May 1, 1997
Period End
January 31, 1997
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 filed May 1, 1997. Cited figures are marked; the original filing is the authoritative source.

Autodesk's FY1997 (fiscal year ended January 31, 1997) was a difficult year.

Net revenues fell about 7% to $496.7 milliona from $534.2 million, the first revenue decline in the company's history. The drop was driven mainly by weaker sales of AutoCAD Release 13 as it reached the end of its product cycle, a slowdown in Europe and the US dealer channel, and a roughly $17 million hit from a strong US dollar. Net income fell 53% to $41.6 million, or $0.88 per share, from $87.8 million ($1.76 per share).

Operating margin dropped from 24% to 12%, mainly because marketing and sales rose to 40% of revenue and R&D rose to 19%. The balance sheet remained solid, with cash and marketable securities of $286.3 millionb, a $13.9 million increase, and operating cash flow of $114.2 million. Management repurchased $67.3 million of stock, but stockholders' equity fell to $243.6 million because of a $64.5 million reclassification of put warrants tied to the buyback program and a foreign currency translation loss.

Management is betting on a turnaround: AutoCAD Release 14 is due in Q2 FY1998, the company is acquiring Softdesk for about 2.9 million shares, and the Softdesk deal will bring a $45c-55 million in-process R&D charge in Q1 FY1998. Investors should weigh several risks.

Revenue depends heavily on AutoCAD (about 70% of FY97 revenue), foreign sales are about 65% of revenue, and the company faces ongoing litigation, including an unreduced $14.2 milliond VMI judgment under appeal. Integrating Softdesk and delivering Release 14 without the quality problems of Release 13 are the key execution tests for FY1998.

02—Key points

Key Highlights

  1. Net revenues fell 7% to $496.7M, the first revenue decline in Autodesk's history, driven by the end-of-cycle AutoCAD Release 13 and weakness in Europe and the US dealer channel.
  2. Net income fell 53% to $41.6M ($0.88/share) from $87.8M ($1.76/share), with operating margin falling from 24% to 12%.
  3. Marketing and sales expense rose to 40% of revenue ($199.9M), and R&D rose to 19% ($93.7M), squeezing margins.
  4. Non-AutoCAD revenues grew 28%, and AutoCAD LT's installed base rose 55% to about 450,000 units, giving some diversification.
  5. Cash and marketable securities reached $286.3M, and operating cash flow was $114.2M. Stock repurchases totaled $67.3M.
  6. Stockholders' equity fell to $243.6M from $342.3M, largely due to a $64.5M put warrant reclassification and a foreign currency translation loss.
  7. The pending Softdesk merger (about 2.9M shares) will bring a $45-55M in-process R&D charge in Q1 FY1998, and AutoCAD Release 14 is due in Q2 FY1998.

03—Questions

Frequently Asked Questions

  1. Why did Autodesk's revenue and earnings decline in fiscal 1997?

    AutoCAD Release 13 reached the end of its product life cycle, and customers upgraded in fewer numbers than expected. Europe slowed, notably in Germany, and the strong US dollar reduced foreign-currency revenue by more than $17M. Marketing and sales spending also rose sharply to 40% of revenue, which cut margins.

  2. Is Autodesk still heavily dependent on AutoCAD?

    Yes. AutoCAD and its updates made up about 70% of FY97 revenue, down from about 80% a year earlier. Diversification is improving, however: non-AutoCAD revenue grew 28%, and products such as Mechanical Desktop, AutoCAD LT, AutoCAD Map, and 3D Studio MAX contributed.

  3. What is the outlook for fiscal 1998?

    Management is counting on AutoCAD Release 14, scheduled to ship in Q2 FY1998, to restore growth and win back customers. The Softdesk acquisition adds AEC market capabilities, but it will bring a $45-55M in-process R&D charge in Q1 FY1998 plus $3-4M in integration costs. Management expects R&D and G&A to rise in FY98.

  4. Is Autodesk financially sound despite the earnings drop?

    The balance sheet is strong. Cash and marketable securities total $286.3M against no bank borrowings, and the company has a $40M unused credit line. Operating cash flow was $114.2M, and days sales outstanding were the lowest in more than five years. Equity fell mainly because of the put warrant reclassification tied to the buyback, not because of operating losses.

  5. What legal risks should investors be aware of?

    The company faces a Tektronix patent infringement complaint, which management believes will not be material. The larger issue is the VMI trade secret case: a $25.5M verdict was reduced to $14.2M plus interest, but the case is still under appeal. Autodesk has posted $28M in restricted securities as collateral and has not reflected the reduction in its financial statements.

04—Continue

← View all 10-K filings