10-QPeriod: Q3 FY2003

Autodesk, Inc. Quarterly Report for Q3 Ended Oct 31, 2002

Filed December 11, 2002For Securities:ADSK

Summary

Autodesk, Inc. reported a net loss of $3.9 million ($0.03 per diluted share) for the third quarter of fiscal year 2003, a reversal from a net income of $21.5 million ($0.19 per diluted share) in the same period last year. This shift is largely attributed to increased restructuring and other charges, which totaled $13.3 million in the current quarter, compared to $7.3 million in the prior year period. The company also experienced a decline in net revenues, which fell to $188.7 million from $216.4 million year-over-year, impacted by weak economic conditions across all major regions and a slowdown in the media, advertising, and entertainment sectors affecting the Discreet Segment. Despite the top-line decline and current quarter loss, Autodesk's financial position remains stable with $134.6 million in cash and cash equivalents and $95.0 million in marketable securities as of October 31, 2002. The company is undergoing significant restructuring, including the termination of 400 employees and office closures, aimed at reducing operating expenses and redirecting resources. Management expects these restructuring efforts to yield net quarterly savings of $3.1 million starting in fiscal year 2004. Investors should monitor the impact of ongoing economic weakness and the successful execution of the restructuring plan on future revenue growth and profitability.

Key Highlights

  • 1Reported a net loss of $3.9 million for Q3 FY2003, compared to a net income of $21.5 million in Q3 FY2002.
  • 2Net revenues decreased by 12.8% to $188.7 million in Q3 FY2003, primarily due to weak global economic conditions.
  • 3Significant restructuring charges of $13.3 million were recognized in Q3 FY2003, impacting profitability.
  • 4The Discreet Segment experienced a revenue decline, reflecting a slowdown in media, advertising, and entertainment sectors.
  • 5The company has $134.6 million in cash and cash equivalents and $95.0 million in marketable securities as of October 31, 2002.
  • 6A new restructuring plan involving 400 employee terminations and office closures was approved, expected to generate $3.1 million in quarterly savings from FY2004.
  • 7Adoption of SFAS 142 led to the discontinuation of goodwill amortization, significantly reducing related expenses.

Frequently Asked Questions

The primary drivers for the net loss of $3.9 million in the third quarter of fiscal year 2003, compared to a net income of $21.5 million in the prior year, were increased restructuring and other charges ($13.3 million vs. $7.3 million) and a general decline in net revenues ($188.7 million vs. $216.4 million) due to weak economic conditions.

Autodesk has implemented a new restructuring plan approved by its Board of Directors, which includes the termination of approximately 400 employees and the closure of several international and domestic offices. This plan is designed to reduce operating expenses and is projected to yield net quarterly savings of $3.1 million, beginning in fiscal year 2004.

As of October 31, 2002, Autodesk maintained a stable liquidity position with $134.6 million in cash and cash equivalents and $95.0 million in marketable securities. Additionally, the company had $129.0 million in accounts receivable and a $75.0 million line of credit available.

The adoption of SFAS 142, which requires that goodwill not be amortized but tested for impairment, has significantly reduced amortization expenses. For the nine months ended October 31, 2002, amortization of goodwill and purchased intangibles was $0.3 million, a substantial decrease from $15.7 million in the same period last year. This change has a positive impact on reported net income.