##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-K
 (Mark one)
 þ
    
    Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
 for
the fiscal year ended April 30, 2006 or
 o
    
    Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of
1934
 for the transition period from to
 Commission file number 000-27874
 ANSOFT CORPORATION
  Delaware
    
    72-1001909(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)225 West Station Square, Suite 200Pittsburgh, Pennsylvania
    
    15219-1119(Address of principal executive offices)
    
    (Zip Code)
    o þ
 o þ
 þ o
 þ
 o þ  o
 o þ




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##### 



TABLE OF CONTENTS
 Item of Form 10-K
    
    
    
    PagePart I1.
    
    Business
    
    
    31A.
    
    Risk Factors
    
    
    81B.
    
    Unresolved Staff Comments
    
    
    112.
    
    Properties
    
    
    123.
    
    Legal Proceedings
    
    
    124.
    
    Submission of Matters to a Vote of Security Holders
    
    
    12Part II5.
    
    Market for Registrants Common Equity and Related
Stockholders Matters and Issuer Purchases of Equity
Securities
    
    
    136.
    
    Selected Financial Data
    
    
    157.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    167A.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    
    248.
    
    Financial Statements
and Supplementary Data
    
    
    259.
    
    Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures
    
    
    439A.
    
    Controls and Procedures
    
    
    439B.
    
    Other Information
    
    
    46Part III10.
    
    Directors and Executive Officers of the Registrant
    
    
    4611.
    
    Executive Compensation
    
    
    4612.
    
    Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    4613.
    
    Certain
Relationships and Related Party Transactions
    
    
    4614.
    
    Principle Accounting Fees and Service
    
    
    46Part IV15.
    
    Exhibits and Financial Statement Schedules
    
    
    47Exhibit Index
    
    
    48Signatures
    
    
    49EX-3.1EX-10.9EX-31.1EX-31.2EX-32.1
  2




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PART I
  
 ITEM 1. BUSINESS
 Overview
  Industry Background
 Logic Design and Synthesis Functional Design and Analysis Physical
Design and Verification
   3




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The Ansoft Solution
  Ansoft Strategy
  Products
  Ansoft High Performance Electronics Software
 HFSS
 Nexxim® ®
 SIwave
 Q3D Extractor
 Ansoft Designer®
 4




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##### Table of Contents



Turbo Package Analyzer (TPA)
 AnsoftLinks ® ® ® ®
 Full-Wave Spice
 Optimetrics
 Ansofts Electromechanical (EM) Software
 Maxwell 3D® ® 
 SIMPLORER 
 RMxprt
 AnsoftLinks
 Optimetrics
 Research and Development
  5




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Sales and Marketing
   Customers
  Customer Service and Support
  6




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Competition
   
    
    High performance (problem complexity) and accuracy;
    
    Short run time;
    
    Ease of use;
    
    Depth and breadth of product features;
    
    High quality user support;
    
    Interoperability; and
    
    Price.
 Proprietary Rights
  Seasonal Effects
  7




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##### Table of Contents



Employees
  Other Information
  
 ITEM 1A. RISK FACTORS
 Our Future Operating Results Are Uncertain.
  Our Quarterly Operating Results Are Difficult To Predict.
   8




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Our Stock Price Is Volatile.
  
    
    Actual or anticipated fluctuations in our operating results;
    
    Announcements of technological innovations and new products by us or our competitors;
    
    New contractual relationships with strategic partners by us or our competitors;
    
    Proposed acquisitions by us or our competitors; and
    
    Financial results that fail to meet public market analyst expectations of performance.
  Businesses Or Assets We Acquire May Not Perform As Projected.
  We May Lose Competitive Advantages If Our Proprietary Rights Are Inadequately Protected.
  We May Be Unable To Attract And Retain The Key Management And Technical Personnel That We Need To
Succeed.
  9




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We Depend On International Sales for a Significant Percentage Of Our Revenue.
  
    
    The impact of recessionary environments in foreign economies;
    
    Longer receivables collection periods and greater difficulty in accounts receivable collection;
    
    Difficulties in staffing and managing foreign operations;
    
    Political and economic instability;
    
    Unexpected changes in regulatory requirements;
    
    Reduced protection of intellectual property rights in some countries; and
    
    Tariffs and other trade barriers.
  We Need To Successfully Manage Our Expanding Operations.
  We Depend On The Growth Of The Communications, Semiconductor And Electronics Industries.
  10




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We Are Controlled By Our Principal Stockholders And Management Which May Limit Your Ability To
Influence Stockholder Matters.
  Anti-Takeover Provisions in Ansofts Certificate Of Incorporation, Bylaws, And Under Delaware Law
Could Prevent An Acquisition.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  11




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ITEM 2. PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  1.
    
    The stockholders approved an amendment to the Companys Amended and Restated Certificate of
Incorporation increasing the number of authorized shares of Company stock from 25,000,000
shares of common stock to 50,000,000 shares of common stock by the votes indicated below.
 Shares in
    
    SharesFavor
    
    Withheld13,019,415
    
    
    6,495
 2.
    
    The stockholders approved the Companys 2006 Stock Incentive Plan by the votes indicated
below.
 Shares in
    
    SharesFavor
    
    Withheld6,153,084
    
    
    18,585
 12




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
  High
    
    LowFiscal year ended April 30, 20051st Quarter
    
    $
    7.64
    
    
    $
    6.132nd Quarter
    
    
    8.16
    
    
    
    6.243rd Quarter
    
    
    10.23
    
    
    
    8.184th Quarter
    
    
    14.23
    
    
    
    10.60Fiscal year ended April 30, 20061st Quarter
    
    $
    12.79
    
    
    $
    10.702nd Quarter
    
    
    16.00
    
    
    
    12.063rd Quarter
    
    
    17.75
    
    
    
    15.074th Quarter
    
    
    22.09
    
    
    
    16.93Fiscal year ended April 30, 20071st Quarter
(through June 1, 2006)
    
    $
    23.20
    
    
    $
    18.53
    13




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Number ofsecurities to beissued upon
    
    Weighted-average
    
    Number of securitiesexercise of
    
    exercise price of
    
    remaining availableoutstanding
    
    outstanding
    
    for future issuanceoptions, warrants
    
    options, warrants
    
    under equityPlan Category
    
    and rights
    
    and rights
    
    compensation plansEquity compensation plans
approved by security holders
    
    
    4,177,034
    
    
    $
    4.36
    
    
    
    1,255,000Total
    
    
    4,177,034
    
    
    $
    4.36
    
    
    
    1,255,000
 Issuer Purchases of Equity Securities
  Total number of
    
    
    Maximumshares
    
    
    number ofrepurchased as
    
    
    shares that mayTotal
    
    
    
    
    
    
    part of publicly
    
    
    yet benumber of
    
    
    Average
    
    
    announced
    
    
    repurchasedshares
    
    
    price paid
    
    
    plans or
    
    
    under the plansPeriod
    
    repurchased
    
    
    per share
    
    
    programs
    
    
    or programs (1)Feb. 1, 2006  Feb. 28, 2006
    
    
    31,000
    
    
    $
    18.06
    
    
    
    5,641,620
    
    
    
    2,358,380March 1, 2006  March 31, 2006
    
    
    32,500
    
    
    $
    19.86
    
    
    
    5,674,120
    
    
    
    2,325,880April 1, 2006  April 30, 2006
    
    
    28,000
    
    
    $
    21.02
    
    
    
    5,702,120
    
    
    
    2,297,880Total
    
    
    91,500
    
    
    $
    19.60
 
 (1)
    
    All repurchases were made pursuant to a share repurchase program publicly announced in 1998
and amended in 2002 and 2004. On March 1, 2006, the Company announced that the Board of
Directors voted to amend its existing common stock repurchase program to permit the Company to
acquire an additional 2,000,000 shares of its common stock. Unless terminated earlier by
resolution of our Board of Directors, the share repurchase program will expire when we have
repurchased all shares authorized for repurchase thereunder. Under the plan the Company is
authorized to repurchase 8,000,000 shares.  14




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ITEM 6. SELECTED FINANCIAL DATA
  Fiscal Year Ended April 30,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(in thousands, except per share data)Consolidated Statement of Operations DataRevenue:License
    
    $
    42,849
    
    
    $
    39,322
    
    
    $
    32,301
    
    
    $
    27,540
    
    
    $
    36,683Service and other
    
    
    34,362
    
    
    
    28,348
    
    
    
    22,352
    
    
    
    19,779
    
    
    
    16,752Total revenue
    
    
    77,211
    
    
    
    67,670
    
    
    
    54,653
    
    
    
    47,319
    
    
    
    53,435Cost of revenue:License
    
    
    535
    
    
    
    505
    
    
    
    702
    
    
    
    683
    
    
    
    938Service and other
    
    
    1,420
    
    
    
    1,349
    
    
    
    1,155
    
    
    
    970
    
    
    
    871Total cost of revenue
    
    
    1,955
    
    
    
    1,854
    
    
    
    1,857
    
    
    
    1,653
    
    
    
    1,809Gross profit
    
    
    75,256
    
    
    
    65,816
    
    
    
    52,796
    
    
    
    45,666
    
    
    
    51,626Operating expenses:Sales and marketing
    
    
    31,506
    
    
    
    31,108
    
    
    
    26,930
    
    
    
    24,611
    
    
    
    24,966Research and development
    
    
    17,016
    
    
    
    16,901
    
    
    
    15,690
    
    
    
    18,588
    
    
    
    17,705General and administrative
    
    
    5,060
    
    
    
    4,861
    
    
    
    4,488
    
    
    
    4,284
    
    
    
    4,555Amortization
    
    
    1,467
    
    
    
    1,552
    
    
    
    3,182
    
    
    
    3,428
    
    
    
    4,129Total operating expenses
    
    
    55,049
    
    
    
    54,422
    
    
    
    50,290
    
    
    
    50,911
    
    
    
    51,355Income (loss) from operations
    
    
    20,207
    
    
    
    11,394
    
    
    
    2,506
    
    
    
    (5,245
    )
    
    
    271Other income, net (1)
    
    
    1,395
    
    
    
    2,206
    
    
    
    904
    
    
    
    1,152
    
    
    
    1,347Income (loss) before income taxes
    
    
    21,602
    
    
    
    13,600
    
    
    
    3,410
    
    
    
    (4,093
    )
    
    
    1,618Income tax expense (benefit)
    
    
    3,805
    
    
    
    4,159
    
    
    
    854
    
    
    
    (970
    )
    
    
    404Net income (loss)
    
    $
    17,797
    
    
    $
    9,441
    
    
    $
    2,556
    
    
    $
    (3,123
    )
    
    $
    1,214Basic net income (loss) per share (2)
    
    $
    0.75
    
    
    $
    0.41
    
    
    $
    0.11
    
    
    $
    (0.13
    )
    
    $
    0.05Diluted net income (loss) per share (2)
    
    $
    0.69
    
    
    $
    0.36
    
    
    $
    0.10
    
    
    $
    (0.13
    )
    
    $
    0.04Weighted average shares outstanding  basic (2)
    
    
    23,694
    
    
    
    23,242
    
    
    
    23,344
    
    
    
    23,618
    
    
    
    23,688Weighted average shares outstanding  diluted (2)
    
    
    25,851
    
    
    
    25,892
    
    
    
    26,496
    
    
    
    23,618
    
    
    
    27,298
 
 1
    
    Includes net realized gain (loss) on the sale of marketable securities of ($2), $732,
($7), $113, and $0 and other than temporary declines on marketable securities of $0, $27,
$0, $78, $117 and $3,076 for the fiscal years ended April 30, 2006, 2005, 2004, 2003,and
2002, respectively.2
    
    All share and per share information have been adjusted to reflect the two-for-one
stock split effected in the form of a 100% stock dividend that was declared on March 7,
2006 and distributed on May 9, 2006. April 30,2006
    
    2005
    
    2004
    
    2003
    
    2002(in thousands)Consolidated Balance Sheet DataCash and cash equivalents
    
    $
    16,456
    
    
    $
    11,910
    
    
    $
    15,218
    
    
    $
    7,173
    
    
    $
    5,269Working capital
    
    
    11,091
    
    
    
    7,578
    
    
    
    10,707
    
    
    
    8,965
    
    
    
    7,497Total assets
    
    
    85,080
    
    
    
    73,421
    
    
    
    67,636
    
    
    
    63,154
    
    
    
    68,224Long term liabilities
    
    
    1,088
    
    
    
    1,039
    
    
    
    10,242
    
    
    
    10,000
    
    
    
    10,520Total stockholders equity
    
    
    56,261
    
    
    
    49,285
    
    
    
    41,686
    
    
    
    39,826
    
    
    
    43,647
 15




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
     2006
    
    2005
    
    2004High Performance Electronics
    
    
    82
    %
    
    
    81
    %
    
    
    79
    %Electromechanical
    
    
    18
    %
    
    
    19
    %
    
    
    21
    %
 Critical Accounting Policies
  
    
    Revenue Recognition
    
    Valuation of Accounts Receivable
    
    Impairment of Long-Lived Assets
 16




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
    
    Impairment of Marketable Securities Available for Sale
    
    Deferred Tax Asset Valuation Allowance
            17




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Results of Operations
 Fiscal Year Ended
    
    
    Fiscal Year EndedApril 30
    
    
    April 30Percent
    
    
    
    
    
    
    
    
    
    
    Percent(In thousands)
    
    2006
    
    
    2005
    
    
    Change
    
    
    2005
    
    
    2004
    
    
    ChangeRevenue
    
    $
    77,211
    
    
    $
    67,670
    
    
    
    14.1
    %
    
    $
    67,670
    
    
    $
    54,653
    
    
    
    23.8
    %Cost of revenue
    
    
    1,955
    
    
    
    1,854
    
    
    
    5.4
    %
    
    
    1,854
    
    
    
    1,857
    
    
    
    (0.2
    %)Gross profit
    
    
    75,256
    
    
    
    65,816
    
    
    
    14.3
    %
    
    
    65,816
    
    
    
    52,796
    
    
    
    24.7
    %Sales and marketing
    
    
    31,506
    
    
    
    31,108
    
    
    
    1.3
    %
    
    
    31,108
    
    
    
    26,930
    
    
    
    15.5
    %Research and development
    
    
    17,016
    
    
    
    16,901
    
    
    
    0.7
    %
    
    
    16,901
    
    
    
    15,690
    
    
    
    7.7
    %General and administrative
    
    
    5,060
    
    
    
    4,861
    
    
    
    4.1
    %
    
    
    4,861
    
    
    
    4,488
    
    
    
    8.3
    %Amortization
    
    
    1,467
    
    
    
    1,552
    
    
    
    (5.5
    %)
    
    
    1,552
    
    
    
    3,182
    
    
    
    (51.2
    %)Total operating expenses
    
    
    55,049
    
    
    
    54,422
    
    
    
    1.2
    %
    
    
    54,422
    
    
    
    50,290
    
    
    
    8.2
    %Income from operations
    
    
    20,207
    
    
    
    11,394
    
    
    
    77.3
    %
    
    
    11,394
    
    
    
    2,506
    
    
    
    354.7
    %Net realized gain (loss) on sale of
securities
    
    
    (2
    )
    
    
    732
    
    
    
    
    
    
    
    732
    
    
    
    (7
    )
    
    
    Other income and interest expense, net
    
    
    1,397
    
    
    
    1,474
    
    
    
    (5.2
    %)
    
    
    1,474
    
    
    
    911
    
    
    
    61.8
    %Income before income taxes
    
    
    21,602
    
    
    
    13,600
    
    
    
    58.8
    %
    
    
    13,600
    
    
    
    3,410
    
    
    
    298.8
    %Income tax expense
    
    
    3,805
    
    
    
    4,159
    
    
    
    (8.5
    %)
    
    
    4,159
    
    
    
    854
    
    
    
    387.0
    %Net income
    
    $
    17,797
    
    
    $
    9,441
    
    
    
    88.5
    %
    
    $
    9,441
    
    
    $
    2,556
    
    
    
    269.4
    %
 Year Ended April 30, 2006 compared with Year Ended April 30, 2005
 Revenue.
  18




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Cost of revenue
 Sales and marketing expenses
 Research and development expenses
 General and administrative expenses.
 Amortization expense.
 Net realized gain (loss) on sale of securities
 Other income and interest expense, net
 Income tax expense (benefit).
 19




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Year Ended April 30, 2005 compared with Year Ended April 30, 2004
 Revenue.
   Cost of revenue
 Sales and marketing expenses
 Research and development expenses
 General and administrative expenses.
 Amortization expense.
 Net realized gain (loss) on sale of securities
 20




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Other income and interest expense, net
 Income tax expense (benefit).
 Quarterly Results of Operations
  Fiscal 2006
    
    Fiscal 2005April 30,
    
    Jan. 31,
    
    Oct. 31,
    
    July 31,
    
    April 30,
    
    Jan. 31,
    
    Oct. 31,
    
    July 31,2006
    
    2006
    
    2005
    
    2005
    
    2005
    
    2005
    
    2004
    
    2004(in thousands, except per share data)Total revenue
    
    $
    24,738
    
    
    $
    19,655
    
    
    $
    18,028
    
    
    $
    14,790
    
    
    $
    21,666
    
    
    $
    17,380
    
    
    $
    15,946
    
    
    $
    12,678Income (loss) from
operations
    
    $
    8,775
    
    
    $
    5,459
    
    
    $
    4,566
    
    
    $
    1,407
    
    
    $
    6,320
    
    
    $
    3,642
    
    
    $
    2,103
    
    
    $
    (671
    )Net income
    
    $
    8,273
    
    
    $
    4,260
    
    
    $
    4,095
    
    
    $
    1,169
    
    
    $
    4,736
    
    
    $
    2,784
    
    
    $
    1,889
    
    
    $
    30Basic net income
per share
    
    $
    0.35
    
    
    $
    0.18
    
    
    $
    0.17
    
    
    $
    0.05
    
    
    $
    0.20
    
    
    $
    0.12
    
    
    $
    0.08
    
    
    $
    0.00Diluted net income
per share
    
    $
    0.32
    
    
    $
    0.16
    
    
    $
    0.16
    
    
    $
    0.05
    
    
    $
    0.18
    
    
    $
    0.10
    
    
    $
    0.07
    
    
    $
    0.00Weighted average
number of shares
outstanding basic
    
    
    23,685
    
    
    
    23,698
    
    
    
    23,588
    
    
    
    23,834
    
    
    
    23,732
    
    
    
    22,980
    
    
    
    23,134
    
    
    
    23,328 diluted
    
    
    25,811
    
    
    
    25,914
    
    
    
    25,784
    
    
    
    25,954
    
    
    
    26,128
    
    
    
    26,780
    
    
    
    26,476
    
    
    
    26,628
  Liquidity and Capital Resources
  21




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Contractual Obligations
    
    Total
    
    Less than 1 Year
    
    1-3 Years
    
    3-5 Years
    
    More than 5 YearsOperating Lease Obligations
    
    $
    4,013
    
    
    $
    1,868
    
    
    $
    1,906
    
    
    $
    239
    
    
    $
    
 Stock Repurchase Program
    Foreign Currency Fluctuations.
 22




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Effects of Inflation
  Seasonal Effects
  23




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    Fiscal year ended
    
    Fiscal year ended
    
    Fiscal year endedForeign Currency
    
    April 30, 2006
    
    April 30, 2005
    
    April 30, 2004Yen
    
    
    113.78
    
    
    
    107.75
    
    
    
    113.50Euro
    
    
    1.22
    
    
    
    1.24
    
    
    
    1.15
 24




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ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 INDEX TO FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    26Consolidated Balance Sheets as of April 30, 2006 and 2005
    
    27Consolidated Statements of Operations for the fiscal years ended April 30, 2006, 2005 and 2004
    
    28Consolidated Statements of Stockholders Equity and Comprehensive Income for the fiscal years
ended April 30, 2006, 2005 and 2004
    
    29Consolidated Statements of Cash Flows for the fiscal years ended April 30, 2006, 2005 and 2004
    
    30Notes to Consolidated Financial Statements
    
    31Financial Statement Schedule: Schedule II  Valuation and Qualifying Accounts and Reserves
    
    47
 25




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Report of Independent Registered Public Accounting Firm
 
      
 26




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##### Table of Contents



ANSOFT CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (in thousands, except per share amounts)
 April 30,
    
    
    April 30,2006
    
    
    2005AssetsCurrent assetsCash and cash equivalents
    
    $
    16,456
    
    
    $
    11,910Accounts receivable, net of allowance for doubtful
accounts of $545 and $425, respectively
    
    
    20,264
    
    
    
    17,388Deferred income taxes
    
    
    164
    
    
    
    229Prepaid expenses and other assets
    
    
    1,938
    
    
    
    1,148Total current assets
    
    
    38,822
    
    
    
    30,675Equipment and furniture, net
    
    
    2,599
    
    
    
    2,811Marketable securities
    
    
    33,621
    
    
    
    28,496Other assets
    
    
    131
    
    
    
    146Deferred income taxes
    
    
    6,226
    
    
    
    6,177Goodwill
    
    
    1,239
    
    
    
    1,239Other intangible assets, net
    
    
    2,442
    
    
    
    3,877Total assets
    
    $
    85,080
    
    
    $
    73,421Liabilities and stockholders equityCurrent liabilitiesAccounts payable
    
    $
    274
    
    
    $
    231Accrued payroll
    
    
    3,027
    
    
    
    2,290Accrued income taxes
    
    
    928
    
    
    
    415Other accrued expenses
    
    
    3,609
    
    
    
    2,661Current portion of deferred revenue
    
    
    19,893
    
    
    
    17,500Total current liabilities
    
    
    27,731
    
    
    
    23,097Long-term liabilitiesLong-term portion of deferred revenue
    
    
    1,088
    
    
    
    1,039Line of credit
    
    
    
    
    
    
    Total long-term liabilities
    
    
    1,088
    
    
    
    1,039Total liabilities
    
    
    28,819
    
    
    
    24,136Stockholders equityPreferred stock, par value $0.01 per share; 1,000
shares authorized, no shares outstanding
    
    
    
    
    
    
    Common stock, par value $0.01 per share; 50,000
shares authorized; issued 28,576 and 27,802 shares,
respectively and outstanding 23,764 and 24,166,
respectively
    
    
    286
    
    
    
    280Additional paid-in capital
    
    
    76,795
    
    
    
    70,270Treasury stock, 4,812 and 3,636 shares, respectively
    
    
    (37,913
    )
    
    
    (21,762
    )Accumulated other comprehensive income (loss)
    
    
    (1,539
    )
    
    
    (338
    )Retained earnings
    
    
    18,632
    
    
    
    835Total stockholders equity
    
    
    56,261
    
    
    
    49,285Total liabilities and stockholders equity
    
    $
    85,080
    
    
    $
    73,421
   27




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ANSOFT CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share amounts)
 Fiscal Year Ended April 30,
    
    2006
    
    
    2005
    
    
    2004Revenue:License
    
    $
    42,849
    
    
    $
    39,322
    
    
    $
    32,301Service and other
    
    
    34,362
    
    
    
    28,348
    
    
    
    22,352Total revenue
    
    
    77,211
    
    
    
    67,670
    
    
    
    54,653Cost of revenue:License revenue
    
    
    535
    
    
    
    505
    
    
    
    702Service and other
    
    
    1,420
    
    
    
    1,349
    
    
    
    1,155Total cost of revenue
    
    
    1,955
    
    
    
    1,854
    
    
    
    1,857Gross profit
    
    
    75,256
    
    
    
    65,816
    
    
    
    52,796Operating Expenses:Sales and marketing
    
    
    31,506
    
    
    
    31,108
    
    
    
    26,930Research and development
    
    
    17,016
    
    
    
    16,901
    
    
    
    15,690General and administrative
    
    
    5,060
    
    
    
    4,861
    
    
    
    4,488Amortization
    
    
    1,467
    
    
    
    1,552
    
    
    
    3,182Total operating expenses
    
    
    55,049
    
    
    
    54,422
    
    
    
    50,290Income from operations
    
    
    20,207
    
    
    
    11,394
    
    
    
    2,506Net realized gain (loss) on sale of securities
    
    
    (2
    )
    
    
    732
    
    
    
    (7
    )Other income
    
    
    1,397
    
    
    
    1,574
    
    
    
    1,145Interest expense
    
    
    
    
    
    
    (100
    )
    
    
    (234
    )Income before income taxes
    
    
    21,602
    
    
    
    13,600
    
    
    
    3,410Income taxes expense
    
    
    3,805
    
    
    
    4,159
    
    
    
    854Net income
    
    $
    17,797
    
    
    $
    9,441
    
    
    $
    2,556Basic net income per share
    
    $
    0.75
    
    
    $
    0.41
    
    
    $
    0.11Diluted net income per share
    
    $
    0.69
    
    
    $
    0.36
    
    
    $
    0.10Weighted average shares outstanding  basic
    
    
    23,694
    
    
    
    23,242
    
    
    
    23,344Weighted average shares outstanding  diluted
    
    
    25,851
    
    
    
    25,892
    
    
    
    26,496
   28




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##### Table of Contents



ANSOFT CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (in thousands)
 AccumulatedCommon
    
    
    
    
    
    
    Additional
    
    
    Treasury
    
    
    
    
    
    
    OtherComprehensive
    
    
    Stock
    
    
    
    
    
    
    Paid-in
    
    
    Stock
    
    
    
    
    
    
    Comprehensive
    
    
    AccumulatedIncome (Loss)
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Shares
    
    
    Amount
    
    
    Income (Loss)
    
    
    Surplus (Deficit)Balance, April 30, 2003
    
    
    
    
    
    
    24,592
    
    
    $
    246
    
    
    $
    55,399
    
    
    
    (1,254
    )
    
    $
    (3,954
    )
    
    $
    (703
    )
    
    $
    (11,162
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (814
    )
    
    
    (5,136
    )
    
    
    
    
    
    
    Issuance of common stock
    
    
    
    
    
    
    964
    
    
    
    12
    
    
    
    2,357
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tax effect of stock option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    677
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    2,556
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,556Foreign currency translation
    
    
    267
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    267
    
    
    
    Reclassification adjustment
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    Change in unrealized loss on marketable securities
    
    
    1,120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,120
    
    
    
    Comprehensive income
    
    $
    3,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, April 30, 2004
    
    
    
    
    
    
    25,556
    
    
    $
    258
    
    
    $
    58,433
    
    
    
    (2,068
    )
    
    $
    (9,090
    )
    
    $
    691
    
    
    $
    (8,606
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,568
    )
    
    
    (12,672
    )
    
    
    
    
    
    
    Issuance of common stock
    
    
    
    
    
    
    2,246
    
    
    
    22
    
    
    
    7,221
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tax effect of stock option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,616
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    9,441
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,441Foreign currency translation
    
    
    359
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    359
    
    
    
    Reclassification adjustment
    
    
    (705
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (705
    )
    
    
    Change in unrealized gain on marketable securities
    
    
    (683
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (683
    )
    
    
    Comprehensive income
    
    $
    8,412
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, April 30, 2005
    
    
    
    
    
    
    27,802
    
    
    $
    280
    
    
    $
    70,270
    
    
    
    (3,636
    )
    
    $
    (21,762
    )
    
    $
    (338
    )
    
    $
    835Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,176
    )
    
    
    (16,151
    )
    
    
    
    
    
    
    Issuance of common stock
    
    
    
    
    
    
    774
    
    
    
    6
    
    
    
    2,754
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tax effect of stock option exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,771
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    17,797
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,797Foreign currency translation
    
    
    (240
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (240
    )
    
    
    Change in unrealized gain on marketable securities
    
    
    (961
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (961
    )
    
    
    Comprehensive income
    
    $
    16,596
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, April 30, 2006
    
    
    
    
    
    
    28,576
    
    
    $
    286
    
    
    $
    76,795
    
    
    
    (4,812
    )
    
    $
    (37,913
    )
    
    $
    (1,539
    )
    
    $
    18,632
   29




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##### Table of Contents



ANSOFT CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 Fiscal year ended April 30,2006
    
    
    2005
    
    
    2004Cash flows from operating activitiesNet income
    
    $
    17,797
    
    
    $
    9,441
    
    
    $
    2,556Adjustments to reconcile net income to net cash provided by
operating activitiesDepreciation
    
    
    1,326
    
    
    
    1,608
    
    
    
    1,536Amortization
    
    
    1,875
    
    
    
    1,879
    
    
    
    3,322Deferred taxes
    
    
    16
    
    
    
    (905
    )
    
    
    (282
    )Non-cash charge on marketable securities
    
    
    
    
    
    
    27
    
    
    
    Loss (gain) on sale of marketable securities
    
    
    2
    
    
    
    (732
    )
    
    
    7Changes in assets and liabilities, net of effect from acquisitionsAccounts receivable
    
    
    (3,125
    )
    
    
    (6,862
    )
    
    
    3,789Prepaid expenses and other assets
    
    
    (815
    )
    
    
    (490
    )
    
    
    167Other long-term assets and liabilities, net
    
    
    (14
    )
    
    
    196
    
    
    
    53Accounts payable and accrued expenses
    
    
    6,029
    
    
    
    6,108
    
    
    
    1,566Deferred revenue
    
    
    2,879
    
    
    
    6,224
    
    
    
    1,056Net cash provided by operating activities
    
    
    25,970
    
    
    
    16,494
    
    
    
    13,770Cash flows from investing activitiesPurchases of equipment and furniture
    
    
    (1,134
    )
    
    
    (797
    )
    
    
    (1,305
    )Proceeds from the sale of marketable securities
    
    
    3,177
    
    
    
    17,531
    
    
    
    12,723Purchase of marketable securities
    
    
    (9,676
    )
    
    
    (21,537
    )
    
    
    (15,320
    )Net cash used in investing activities
    
    
    (7,633
    )
    
    
    (4,803
    )
    
    
    (3,902
    )Repayment of line of credit
    
    
    
    
    
    
    (10,000
    )
    
    
    Purchase of treasury stock
    
    
    (16,151
    )
    
    
    (12,672
    )
    
    
    (5,136
    )Proceeds from the issuance of common stock, net
    
    
    2,760
    
    
    
    7,243
    
    
    
    3,046Net cash used in financing activities
    
    
    (13,391
    )
    
    
    (15,429
    )
    
    
    (2,090
    )Effect of exchange rate changes
    
    
    (400
    )
    
    
    430
    
    
    
    267Cash and cash equivalents at beginning of year
    
    
    11,910
    
    
    
    15,218
    
    
    
    7,173Cash and cash equivalents at end of year
    
    $
    16,456
    
    
    $
    11,910
    
    
    $
    15,218Supplemental disclosures of cash flow informationCash paid (received) for income taxes
    
    $
    (695
    )
    
    $
    856
    
    
    $
    234Cash paid for interest
    
    $
    
    
    
    $
    106
    
    
    $
    99
  30




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##### Table of Contents



ANSOFT CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (in thousands, except per share amounts)
 1. Nature of Business and Summary of Significant Accounting Policies
 Nature of Business
  Principles of Consolidation and Basis of Presentation
    Use of Estimates
  Cash Equivalents
  Allowance for Doubtful Accounts
  31




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##### Table of Contents



Marketable Securities
  Equipment and Furniture
  Goodwill and Other Intangible Assets
   Impairment of Long-Lived Assets
  Revenue Recognition
   32




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##### Table of Contents



Deferred revenue
  Software Development Costs
  Income Taxes
  Net Income Per Share
  33




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##### Table of Contents



Income
    
    
    Shares
    
    
    Per share amountFiscal year ended April 30, 2006Basic net income per share
    
    $
    17,797
    
    
    
    23,694
    
    
    $
    0.75Effect of dilutive securities:Stock options
    
    
    
    
    
    
    2,157
    
    
    
    (0.06
    )Diluted net income per share
    
    $
    17,797
    
    
    
    25,851
    
    
    $
    0.69Fiscal year ended April 30, 2005Basic net income per share
    
    $
    9,441
    
    
    
    23,242
    
    
    $
    0.41Effect of dilutive securities:Stock options
    
    
    
    
    
    
    2,650
    
    
    
    (0.05
    )Diluted net income per share
    
    $
    9,441
    
    
    
    25,892
    
    
    $
    0.36Fiscal year ended April 30, 2004Basic net income per share
    
    $
    2,556
    
    
    
    23,344
    
    
    $
    0.11Effect of dilutive securities:Stock options
    
    
    
    
    
    
    3,152
    
    
    
    (0.01
    )Diluted net income per share
    
    $
    2,556
    
    
    
    26,496
    
    
    $
    0.10
 Stock-Based Compensation
   Fiscal year ended April 30,2006
    
    2005
    
    2004Risk-free rate (%)
    
    
    4.23
    
    
    
    4.02
    
    
    
    2.00Volatility (%)
    
    
    67.35
    
    
    
    70.65
    
    
    
    115.40Expected life (in years)
    
    
    6.00
    
    
    
    6.00
    
    
    
    6.00Dividend yield (%)
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00
  34




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##### Table of Contents



Fiscal year ended April 30,2006
    
    
    2005
    
    
    2004Net income, as reported
    
    $
    17,797
    
    
    $
    9,441
    
    
    $
    2,556Deduct: Total stock-based employee
compensation expense determined under fair
value based method, net of tax
    
    
    (2,037
    )
    
    
    (2,289
    )
    
    
    (2,469
    )Pro forma net income
    
    $
    15,760
    
    
    $
    7,152
    
    
    $
    87Pro forma net income per basic common share
    
    $
    0.67
    
    
    $
    0.62
    
    
    $
    0.01Pro forma net income per diluted common share
    
    $
    0.61
    
    
    $
    0.55
    
    
    $
    0.01
  Comprehensive Income
   April 30,2006
    
    
    2005Foreign currency translation gain
    
    $
    36
    
    
    $
    276Unrealized loss on available for sale securities
    
    
    (1,575
    )
    
    
    (614
    )Accumulated other comprehensive loss
    
    $
    (1,539
    )
    
    $
    (338
    )
 Foreign Currency Translation
  Fair Value of Financial Instruments
  35




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##### Table of Contents



2. Recent Accounting Pronouncements
  3. Equipment and Furniture
  April 30,2006
    
    
    2005Computers and equipment
    
    $
    6,928
    
    
    $
    7,168Furniture and fixtures
    
    
    1,048
    
    
    
    1,675Leasehold improvements
    
    
    872
    
    
    
    9298,848
    
    
    
    9,772Less allowances for depreciation and amortization
    
    
    6,249
    
    
    
    6,961$
    2,599
    
    
    $
    2,811
 4. Other Intangible Assets
  April 30,2006
    
    
    2005Customer list
    
    $
    18,488
    
    
    $
    18,488Non-compete
    
    
    2,500
    
    
    
    2,500Purchased technology
    
    
    2,230
    
    
    
    2,230Trademark
    
    
    212
    
    
    
    21223,430
    
    
    
    23,430Less allowances for amortization
    
    
    20,988
    
    
    
    19,553$
    2,442
    
    
    $
    3,877
  36




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##### Table of Contents



5. Marketable Securities
  Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Faircost
    
    
    Gain
    
    
    (loss)
    
    
    ValueApril 30, 2006Bond Funds
    
    $
    17,061
    
    
    $
    44
    
    
    $
    (868
    )
    
    $
    16,237Corporate Bonds
    
    
    18,135
    
    
    
    2
    
    
    
    (753
    )
    
    
    17,384Total marketable securities
    
    $
    35,196
    
    
    $
    46
    
    
    $
    (1,621
    )
    
    $
    33,621April 30, 2005Bond Funds
    
    $
    11,861
    
    
    $
    99
    
    
    $
    (425
    )
    
    $
    11,535Corporate Bonds
    
    
    17,249
    
    
    
    45
    
    
    
    (333
    )
    
    
    16,961Total marketable securities
    
    $
    29,110
    
    
    $
    144
    
    
    $
    (758
    )
    
    $
    28,496
    Less than 12 months
    
    
    12 months or longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesBond Funds
    
    $
    
    
    
    $
    
    
    
    $
    11,183
    
    
    $
    868
    
    
    $
    11,183
    
    
    $
    868Corporate Bonds
    
    $
    10,185
    
    
    $
    328
    
    
    $
    7,150
    
    
    $
    425
    
    
    $
    17,335
    
    
    $
    753Total
    
    $
    10,185
    
    
    $
    328
    
    
    $
    18,333
    
    
    $
    1,293
    
    
    $
    28,518
    
    
    $
    1,621
  Amortized Cost
    
    
    Fair ValueDue in one year or less
    
    
    
    
    
    
    Due after one year through five years
    
    $
    15,462
    
    
    $
    14,852Due after five years through ten years
    
    $
    2,673
    
    
    $
    2,532Due after ten years
    
    $
    
    
    
    $
    Total
    
    $
    18,135
    
    
    $
    17,384
  37




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##### Table of Contents



6. Line of Credit
    7. Leases
  Year ending April 30,2007
    
    
    1,8682008
    
    
       1,3392009
    
    
    5672010
    
    
    1392011
    
    
    100
 8. Common Stock Options
   38




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##### Table of Contents



Shares Underlying Outstanding OptionsShares

    
    Weighted-Average PriceOutstanding, April 30, 2003
    
    
    7,966
    
    

    $  3.55Granted
    
    
    158
    
    

    $  4.56Exercised
    
    
    (964
    )
    

    $  2.47Terminated
    
    
    (232
    )
    

    $  4.10Outstanding, April 30, 2004
    
    
    6,928
    
    

    $  3.71Granted
    
    
    224
    
    

    $  7.02Exercised
    
    
    (2,246
    )
    

    $  3.31Terminated
    
    
    (6
    )
    

    $  4.69Outstanding, April 30, 2005
    
    
    4,900
    
    

    $  4.03Granted
    
    
    90
    
    

    $ 13.19Exercised
    
    
    (774
    )
    

    $  3.50Terminated
    
    
    (39
    )
    

    $  8.90Outstanding, April 30, 2006
    
    
    4,177
    
    

    $  4.36
   Options Outstanding
    
    Options ExercisableWeighted-Number
    
    Average
    
    Weighted-
    
    Number
    
    Weighted-Outstanding
    
    Remaining
    
    Average
    
    Exercisable
    
    Averageat April 30,
    
    Contractual
    
    Exercise
    
    at April 30,
    
    ExerciseRange Of Exercise Prices
    
    2006
    
    Life
    
    Price
    
    2006
    
    Price$  2.37-$  3.47
    
    
    1,752
    
    
    
    4.0
    
    
    $
    2.60
    
    
    
    1,378
    
    
    $
    2.60$  3.65-$  5.45
    
    
    1,442
    
    
    
    5.3
    
    
    $
    4.51
    
    
    
    1,155
    
    
    $
    4.49$  6.23-$  8.18
    
    
    851
    
    
    
    6.3
    
    
    $
    6.53
    
    
    
    502
    
    
    $
    6.49$10.59-$15.07
    
    
    119
    
    
    
    9.1
    
    
    $
    11.44
    
    
    
    9
    
    
    $
    10.60$20.43-$22.09
    
    
    13
    
    
    
    10.0
    
    
    $
    20.69
    
    
    
    
    
    
    $
    
 9. Segment Reporting, Export Sales and Credit Risk
   2006
    
    2005
    
    2004High Performance Electronics
    
    
    82
    %
    
    
    81
    %
    
    
    79
    %Electromechanical
    
    
    18
    %
    
    
    19
    %
    
    
    21
    %
  39




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##### Table of Contents



10. Income Tax
  April 30,2006
    
    
    2005
    
    
    2004Domestic
    
    $
    20,848
    
    
    $
    12,470
    
    
    $
    1,648Foreign
    
    
    754
    
    
    
    1,130
    
    
    
    1,762Total
    
    $
    21,602
    
    
    $
    13,600
    
    
    $
    3,410
  April 30,2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    2,554
    
    
    $
    4,474
    
    
    $
    499State
    
    
    953
    
    
    
    468
    
    
    
    192Foreign
    
    
    282
    
    
    
    122
    
    
    
    445Total
    
    
    3,789
    
    
    
    5,064
    
    
    
    1,136Deferred:Federal
    
    
    87
    
    
    
    (1,291
    )
    
    
    (394
    )State
    
    
    (29
    )
    
    
    7
    
    
    
    (72
    )Foreign
    
    
    (42
    )
    
    
    379
    
    
    
    184Total
    
    
    16
    
    
    
    (905
    )
    
    
    (282
    )Total expense for income tax
    
    $
    3,805
    
    
    $
    4,159
    
    
    $
    854
 40




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##### Table of Contents



April 30,2006
    
    
    2005
    
    
    2004Income tax expense at statutory rate
    
    $
    7,561
    
    
    $
    4,623
    
    
    $
    1,159State income tax, net of federal benefit
    
    
    634
    
    
    
    503
    
    
    
    79Research and development credit
    
    
    (1,056
    )
    
    
    (1,108
    )
    
    
    (480
    )Rate differential between U.S and foreign taxes
    
    
    54
    
    
    
    174
    
    
    
    30Change in valuation allowance
    
    
    (1,131
    )
    
    
    (197
    )
    
    
    (55
    )Foreign tax credit
    
    
    (2,365
    )
    
    
    
    
    
    
    Intangible amortization
    
    
    6
    
    
    
    31
    
    
    
    74Other, net
    
    
    102
    
    
    
    133
    
    
    
    47Actual income tax expense
    
    $
    3,805
    
    
    $
    4,159
    
    
    $
    854
   Fiscal year ending April 30,2006
    
    
    2005
    
    
    2004Tax effect of stock option exercises
    
    $
    (3,771
    )
    
    $
    (4,616
    )
    
    $
    (677
    )
  April 30,2006
    
    
    2005Deferred tax assets:Net operating loss carryforward
    
    $
    434
    
    
    $
    477Capital loss carryovers
    
    
    160
    
    
    
    427Allowance for doubtful accounts
    
    
    164
    
    
    
    161Alternative minimum tax credit carryforward
    
    
    282
    
    
    
    156Research and development tax credit carryforward
    
    
    1,637
    
    
    
    2,623Intangible assets
    
    
    3,996
    
    
    
    3,992Foreign tax credit
    
    
    
    
    
    
    191Furniture and equipment
    
    
    312
    
    
    
    30Net unrealized losses on available for sale securities
    
    
    1,493
    
    
    
    1,203Total gross deferred tax assets
    
    
    8,478
    
    
    
    9,260Less valuation allowance
    
    
    (2,088
    )
    
    
    (2,854
    )Net deferred taxes
    
    
    6,390
    
    
    
    6,406
  41




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##### Table of Contents



11. Employee Benefit Plan
  12. Commitments And Contingencies
   42




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES
            43




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
      44




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##### Table of Contents



45




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##### Table of Contents



ITEM 9B. OTHER INFORMATION
  
 ITEM
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
  
 ITEM 14. PRINCIPLE ACCOUNTING FEES AND SERVICE
  46




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  PageReport of Independent Registered Public Accounting Firm
    
    
    26Consolidated Balance Sheets as of April 30, 2006 and 2005
    
    
    27Consolidated Statements of Operations for the years ended April 30, 2006, 2005 and 2004
    
    
    28Consolidated Statements of Stockholders Equity and Comprehensive Income for the years
ended April 30, 2006, 2005 and 2004
    
    
    29Consolidated Statements of Cash Flows for the years ended April 30, 2006, 2005 and 2004
    
    
    30Notes to Consolidated Financial Statements
    
    
    31
    Financial statement schedules not listed above have been omitted because they are inapplicable, are
not required under applicable provisions of Regulation S-X, or the information that would otherwise
be included in such schedules is contained in the registrants financial statements or accompanying
notes.
  
    AdditionsBalance as of
    
    (Deductions)
    
    
    
    
    
    Balance as ofthe Beginning
    
    Charged to Costs
    
    
    
    
    
    the End ofof the Period
    
    and Expenses
    
    Deductions
    
    the PeriodYear ended
April 30, 2006
Allowance for
doubtful accounts
    
    
    425
    
    
    
    143
    
    
    
    (23
    )
    
    
    545Year ended April
30, 2005 Allowance
for doubtful
accounts
    
    
    903
    
    
    
    (197
    )
    
    
    (281
    )
    
    
    425Year ended April
30, 2004 Allowance
for doubtful
accounts
    
    
    818
    
    
    
    250
    
    
    
    (165
    )
    
    
    903
 47




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation of the Company (filed herewith)3.3
    
    Bylaws of the Company (incorporated by reference from Registration Statement No. 333-1398)10.1
    
    1988 Stock Option Plan of the Company (incorporated by reference from Registration
Statement No. 333-1398)**10.2
    
    1995 Stock Option Plan of the Company (incorporated by reference from Registration
Statement No. 333-1398)**10.3
    
    Zoltan Cendes Stock Option Agreement, dated April 30, 1995 (incorporated by reference
from Registration Statement No. 333-1398)10.4
    
    Loan Agreement by and between Ansoft Corporation and PNC Bank, National Association dated
October 21, 2004 (incorporated by reference from Exhibit 99.1 to Form 8-K filed October
21, 2004)10.5
    
    Jacob K. White Stock Option Agreement dated February 1, 1996, as amended (incorporated by
reference from Registration Statement No. 333-40189)10.6
    
    John N. Whelihan Stock Option Agreement dated February 1, 1996, as amended (incorporated
by reference from Registration Statement No. 333-40189)10.7
    
    Agilent HFSS Technology and License Transfer Agreement dated May 1, 2001 (incorporated
by reference from Exhibit 10.12 of Form 10-K filed July 25, 2003)10.8
    
    Letter dated October 28, 2005 amending Loan Agreement by and between Ansoft Corporation
and PNC Bank, National Association dated October 21, 2004 (incorporated by reference from
Exhibit 10.13 of Form 10-Q filed November 18, 2005).10.9
    
    2006 Stock Incentive Plan of the Company (filed herewith) **14
    
    Code of Business Conduct-this code of ethics may be accessed at the Companys website:www.ansoft.com21.1
    
    Subsidiaries of the registrant (incorporated by reference from the Companys Annual
Report on Form 10-K for the fiscal year ended April 30, 1997)31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (filed herewith)
 
 **
    
    Incentive or stock compensation plan of the Company 48




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##### Table of Contents



SIGNATURES
  ANSOFT CORPORATIONBy
    
    /s/ Nicholas Csendes

Nicholas CsendesPresident
  Signature
    
    
    
    Title/s/ Nicholas Csendes
    
    
    
    Director, President and Chief Executive OfficerNicholas Csendes
    
    
    
    (Principal Executive Officer)/s/ Thomas A.N. Miller
    
    
    
    Chief Financial OfficerThomas A.N. Miller
    
    
    
    (Principal Financial and Accounting Officer)/s/ Zoltan J. Cendes
    
    
    
    Director, Chief Technology OfficerZoltan J. Cendes
    
    
    
    and Chairman of the Board of Directors/s/ Peter Robbins
    
    
    
    DirectorPeter Robbins/s/ Paul Quast
    
    
    
    DirectorPaul Quast/s/ John N. Whelihan
    
    
    
    DirectorJohn N. Whelihan
 49