10-QPeriod: Q1 FY2003

Autodesk, Inc. Quarterly Report for Q1 Ended Apr 30, 2002

Filed May 28, 2002For Securities:ADSK

Summary

Autodesk, Inc. reported first-quarter fiscal year 2003 results that show a decrease in net revenues to $229.3 million from $245.7 million in the prior year period, largely influenced by weak economic conditions in the Asia/Pacific region and a slowdown in the media, advertising, and entertainment sectors impacting the Discreet Segment. The Design Solutions Segment saw a slight revenue decrease, with growth in Geographic Information Systems and Building Industry products offset by declines in Manufacturing and Platform Technology. Despite the revenue decline, the company's financial position remains solid, with substantial cash and marketable securities. Significant restructuring charges were also noted, primarily related to office closures as part of an effort to reduce operating expenses.

Key Highlights

  • 1Net revenues decreased by 6.7% to $229.3 million for the first quarter of fiscal year 2003 compared to $245.7 million in the prior year quarter.
  • 2The Discreet Segment experienced a significant revenue decline of 27.8% year-over-year, impacted by a slowdown in the media, advertising, and entertainment sectors.
  • 3The Design Solutions Segment revenue slightly decreased by 1.4% year-over-year, with mixed performance across its divisions.
  • 4Operating income decreased substantially from $36.6 million to $21.2 million, reflecting lower revenues and increased cost of revenues as a percentage of net revenues.
  • 5The company incurred $1.5 million in restructuring charges related to European office closures during the quarter.
  • 6Autodesk completed the acquisition of Revit Technology Corporation, which was effective April 1, 2002, resulting in significant goodwill and purchased technology additions on the balance sheet.
  • 7Cash flow from operating activities declined to $15.2 million from $43.1 million in the prior year period.

Frequently Asked Questions

The revenue decline was primarily driven by weak economic conditions in the Asia/Pacific region and a slowdown in the media, advertising, and entertainment sectors which negatively impacted the Discreet Segment. Additionally, the strength of the U.S. dollar relative to international currencies had a negative impact on reported international revenues.

The acquisition of Revit, effective April 1, 2002, contributed $133.5 million to cash used in investing activities. It also resulted in significant increases in 'Purchased technologies and capitalized software, net' and 'Goodwill, net' on the balance sheet. The associated fair value of granted stock options was added to the purchase consideration and recognized as deferred compensation.

Autodesk incurred $1.5 million in restructuring charges during the first quarter of fiscal year 2003, related to the closure of certain European offices. These charges are part of a larger restructuring plan approved in fiscal year 2002, aimed at reducing operating expense levels and involved losses on operating leases and write-offs of leasehold improvements and equipment.

Cash and cash equivalents decreased by $14.6 million to $122.2 million at April 30, 2002, from $136.8 million at January 31, 2002. This decrease was primarily due to cash used in investing activities, including the acquisition of Revit and capital expenditures, partially offset by net cash provided by financing activities, mainly from stock issuances.