Schnitger Corporation Hot Topics 2010 Edition

SG&I to IGS -- Intergraph to create new subsidiary

Tue, 7 Sep 2010 09:21:00 -0400

In the blizzard of information that came out of Intergraph’s user group meeting last week was the announcement that the company will create an independent subsidiary to handle Intergraph’s classified business for the US government, Intergraph Government Solutions Corporation (IGS). According to the information Hexagon has released about Intergraph, 82% of the Security, Government & Infrastructure division’s revenue came from government/defense/public safety customers -- about $372 million in 2009. It’s not clear how much of this comes under the heading of “classified business”, but IGS could be quite a substantial undertaking.

Why, you may ask? Because Hexagon is a Swedish company and foreign owners cannot be involved in projects for U.S. security agencies. According to All Points Blog, IGS will include all of the company’s classified work, and will be controlled by a “special proxy board consisting of three or more outside and fully independent directors who hold security clearances with the U.S. government. These directors are required to be independent of Intergraph and Hexagon with no prior affiliation to either party and likewise must be approved by the U.S. Defense Security Service (DSS). We have identified these Directors and submitted them for approval as part of our comprehensive DSS filing. All of the proposed Directors are well known, high profile people that have extensive experience and relationships within the U.S. government, Department of Defense or the U.S. intelligence community. Upon closing, we will immediately announce the names of the board members. Jack Pellicci will lead this group and report to this board.”

(This alphabet soup is likely to be confusing. Intergraph currently has a Safety, Government and Infrastructure division -- SG&I -- and has had an Intergraph Solutions Group -- ISG -- at various points. Are there no other letters in their alphabet?)

SGI 1 year later

Thu, 2 Sep 2010 07:54:22 -0400

Schnitger Corp. doesn’t normally cover the financial releases of hardware companies but this one is special: SGI announced financial results on August 31 for its first full year under Rackable’s ownership. (If you recall, Rackable bought SGI and promptly changed the name of the whole company back to SGI.)

How did it go? Mezza mezza is how my Italian friends would put it: so-so. On the plus side,
• SGI met its goal of non-GAAP revenue of $500 million (reported non‐GAAP revenue of $525 million, GAAP revenue of $404 million)
• SGI also met the goal of non-GAAP gross margins in the mid-to-high 20% range (reported non‐GAAP gross margin of 27%, GAAP gross margin of 22%)
• the company says it has completed the integration of SGI and Rackable, and “established a solid foundation for the business”.
• generated $8 million in cash from operations; and
• the company remains debt-free.

But the down side is not insubstantial as the company reported a net loss of $88.5 million for the year on a GAAP basis; $25 million non-GAAP.

During the earnings conference call, CEO Mark Barrenechea said that SGI is “winning within process and discrete manufacturers as they introduce new products or improve existing ones” at companies such as Skoda, Audi, Sikorsky, and Boeing. Mr. Barrenechea reiterated SGI’s longstanding commitment to innovation: “At the core is our focus on technical computing, best-of-breed integrated compute, storage and networking, and approach to open systems and software and agility. In FY '10, we stayed focused and delivered according to our compute and storage roadmap and strategy... Our cloud-inspired products have all been refreshed with the latest Intel and AMD technologies and optimized to offer the maximum performance per dollar, per watt, per square foot.”

For fiscal 2011, the company has offered the following guidance: non-GAAP revenue between $550 million and $575 million, gross margins between 27% and 30%, operating expenses between $165 million to $171 million, and EPS break-even.

It would appear that SGI survived a rough economy, integrated a sizable merger and another acquisition, produced new products and entered new accounts in fiscal 2010 -- not bad. It has targeted 12% non-GAAP revenue growth for FY2011. Doable? Investors seem to think so, and I certainly hope so.

Intergraph CEO to step down

Wed, 1 Sep 2010 08:24:28 -0400

Intergraph is holding its user conference this week in Las Vegas -- rescheduled from May when flooding in Nashville cancelled so many events -- and, by all reports, it’s going well.

All Points Blog, from Directions Magazine, is covering the event and reported that Intergraph CEO
Halsey Wise will step down at the close of acquisition by Hexagon. Division presidents, John Graham of Security, Government & Infrastructure and Gerhard Sallinger of Process, Power and Offshore, will remain with the company and report to Hexagon CEO Ola Rollén.

During his presentation, CEO Rollén reiterated his intention to tightly integrate his acquisitions “at the code level”. This has always made sense for the GIS brands -- integrating Geomedia (one of Intergraph’s GIS brands) with ERDAS’ imaging solutions will strengthen both offerings. But the most interesting part of All Points’ coverage is that Mr. Rollén cautioned everyone "not to think like a geospatial geek" because he sees geospatial as one of many technologies in Hexagon’s portfolio that can be combined with others. No plans have been announced, but we can envision solutions for smart grids, security monitoring and, in the process and power domain, smart monitoring of process plants. Intergraph’s PDS and SmartPlant plant design solutions have long been integrated with Leica’s point cloud technology but could now benefit from plant monitoring solutions enabled by Hexagon’s sensor technology.

All Points also reported that Intergraph CEO Halsey Wise said that all of the approvals necessary from U.S. and European security exchanges had been received, and that it is now seeking government approval. The transaction is expected to close on October 1.

Hexagon itself issued a press release giving a more cautious timeline, saying that “financial consolidation is estimated to take place in the fourth quarter of 2010.” It also “reiterate[d] Hexagon's intentions of continuous commitment and investment in Intergraph's vision, solutions, customers and employees... [and] confirms Hexagon's intent to support Intergraph's product roadmap and to further invest in research and development.”

We’ll have to see what this really means. Will the efforts to integrate “at the code level” detract from or be added to the R&D plans already in place at PP&M and SG&I? From the SG&I perspective, integration with ERDAS will enable it to more readily compete against ESRI. But for PP&M, integration with sensor technology will benefit its owner/operator clients; but what about the EPCs who rely on its design tools?

News bits

Sat, 21 Aug 2010 18:22:47 -0400

Sorry, guys -- it’s been crazy. There’s a lot going on the in the greater PLM universe and I wish I had time to offer a cogent analysis each happening, but I don’t. Rather than leave you hanging, here are several of the things I found most compelling last week:

• MSC.Software has been announcing new or expanded partnerships over the last few months. Perhaps the most significant came last week: MSC has teamed with ACUSIM Software to directly couple AcuSolve with MD Nastran for fluid-structure interaction (FSI) simulations. MSC’s OpenFSI Interface connects the two solvers; no intermediary steps are needed, which speeds the solution and improves accuracy. This announcement follows hard on the heels of the announcement that MSC and HBM nCode agreed to release an new version of MSC Fatigue that will include the most recent updates to nCode’s DesignLife product. Both of these announcements make evident the “new MSC”: willing to partner and participate more readily with the greater CAE community.

• Blue Ridge Numerics, makers of CFdesign, doesn’t offer much information about the company and its performance. But something good is clearly going on: the company announced recently that it has shown “year over year growth of more than 40% in the UK and European markets” so far in 2010. Blue Ridge clearly sees this trend continuing, as it has expanded teams serving select European markets. CFD is hot right now as compute power becomes more affordable and the products become more usable by non-experts -- I’m not aware of any unique adoption patterns in Europe, but it is possible that CFDesign is taking share.

• Flomerics is a tiny, tiny part of Mentor Graphics these days and Mentor doesn’t usually say anything about it during earnings calls. But on Thursday, CEO Wally Rhimes said that the company has “experienced strong performance from the acquisitions we made a year or two ago, especially Flomerics and LogicVision, both of which have substantially exceeded our expectations, and both of which have expanded their business with significant new customers.” It wasn’t clear from subsequent comments whether this success refers to revenue from Flomerics products or from the cross-selling opportunities Flormerics customers provide for the rest of Mentor’s product sets. Mentor also acquired Valor, and that also seems to be performing well.

• On a completely different topic, Bentley Systems released major additions to its OpenPlant product last week -- and all users of design software should take notice. Bentley OpenPlant is based on the ISO 15926 data model; it sounds horribly geeky but is HUGE in the plant design community and may ultimately serve as a model to enable users of other types of design software to address interoperability. Released for broad distribution this week are Bentley OpenPlant Modeler V8i, 3D plant modeling software based on the ISO 15926 data model; Bentley OpenPlant ModelServer V8 that manages both files and components; and Bentley OpenPlant Isometrics Manager V8i, an isometrics generation product that incorporates intelligence from 3D plant models. Bentley OpenPlant PowerPID was released earlier this year for intelligent process and instrumentation diagram creation. Much more coming on this when I have time -- but the previews I saw at Bentley’s user conference in May (and the customer reaction) were terrific.

More soon ....

Rand and Avatech merge in reverse

Tue, 17 Aug 2010 20:06:33 -0400

Surprise! Rand Worldwide and Avatech Solution announced on Tuesday that the companies have been combined in a reverse merger. A reverse merger is often known as a “reverse IPO” because the acquisition of a public company by a private one avoids the costly process of going public. As a result of this deal, the combined company intends to call itself Rand Worldwide and will seek to trade on the OTC under a new symbol.

The new company has named Marc Dulude (CEO of Rand) as the chief executive officer of the combined company, and Larry Rychlak (President and CFO of Avatech) as the president and chief financial officer. George Davis, (CEO of Avatech), will remain on the board of the combined company.

The combined company is Autodesks’s largest global reseller, covering the US, Canada, Singapore, Malaysia, and Australia. All Autodesk-related services and sales in the new company will be combined under the IMAGINiT Technologies brand. The new Rand will continue Rand’s sales and support of PTC, Dassault Systèmes, and Autonomy products.

Commented Mr. Dulude in the press material about the merger: “With little geographic overlap between the businesses today, the combination of Rand Worldwide and Avatech allows us to leverage the full range of selling and technical resources of each of the companies to enhance the service delivered to our clients. We believe that clients in all of the geographies we serve will reap the benefits of the very deep bench of technical service capabilities that will result from combining the two companies. Also, the ability to deliver the additional products and solutions that each company has to its respective customer bases represents an attractive cross selling opportunity.”

According to Tuesday’s press release, Rand and Avatech had revenue of about $82 million over the last 12 months. As far as I can tell, the combined company will have 51,400,844 shares outstanding; at Tuesday’s closing price of $.75, this values the combined company at about $38 million. But I could be wrong -- the transaction is really complicated. The companies have submitted an 8-K fling (here) to the US SEC that explain the deal -- I’ll update if necessary when I’ve read through all of it.

Those with long memories may recall that Rand was a public company trading on the Toronto Stock. In its heyday in the 1990s and early 2000s, countless small and regional VARs pitched their businesses at Rand as an exit strategy -- many of those entrepreneurs wanted out. Rand expanded too quickly; that, combined with a deteriorating relationship with PTC, caused the company to run into hard times in the mid-2000s. In 2007 the company was acquired and taken private by Ampersand Ventures. Ampersand had already been an active investor CAD/CAM/CAE/PLM companies, investing in Moldflow and Eigner (which was bought by Agile, now part of Oracle).

The combination of Rand and Avatech makes sense. Ampersand needs an exit, and a reverse merger will enable it to sell shares without an expensive and time-consuming IPO. Being a reseller is tough in the best economic times; in uncertain times these companies are the most vulnerable in all of PLM. By combining forces (under strong management) the new Rand should be able to weather whatever is coming.

Delcam revenue up 12% so far in 2010

Mon, 16 Aug 2010 08:10:05 -0400

Delcam plc, the UK-based CAM supplier, reported results today that indicate that it saw a strong recovery in demand for its products during the first half of 2010. Total revenue was up 12% to £18.1 million -- a new high in 6-month revenue for Delcam. According to a statement by Chairman Peter Miles, “[t]hese encouraging results reflect recovery across all our major territories globally and were supported by our decision to maintain investment in product development and marketing during the downturn in order to gain commercial advantage.”

The revenue increase was primarily due to growth in software license sales, which were up 30% for the period to £9 million. Maintenance revenue was £6.3 million, up 9% from the first half of last year. Services revenue declined 16% to £2 million.

The company reports that license revenue was up in all of its major markets, with the most significant increases in Asia and South America, where license revenue rose by 48% and 50% respectively. Total revenue in Europe was up 4% to £10 million, in 16% in the Americas to £4.3 million and up 27% in Asia to £3.9 million.

Delcam also said that adoption of its products by the healthcare market, a newer market for the company, were encouraging. In the only other bit of verticals news, Delcam reported that its Tooling Services Division, which mainly does projects for the aerospace industry, saw “reduced demand for its services”.

The company offered cautious guidance for the rest of 2010, citing ongoing uncertainty about the “strength and durability of the recovery, and over the potential impact of reduced government spending in some countries. Reflecting this uncertainty, many companies are continuing to postpone their investments in capital equipment and the associated software purchases.” Even so, the company “remain[s] optimistic that the improving trend will continue and if this remains the case, we would expect trading results for the year to 31 December 2010 to show a significant improvement on results for 2009.” London City analysts expect total revenue for 2010 to be around £35.55 million pounds, up slightly from after Delcam’s March announcement, an increase of about 11%. Shareholders are happy at today’s news, sending the stock up 2% to a 52-week high.

Autodesk beats expectations - by a lot

Fri, 13 Aug 2010 08:38:56 -0400

Autodesk reported second quarter result that were far better than many had expected, sending the shares up 4% in after-hours trading on Wall Street. The company reported revenue of $473 million for the quarter ended July 31 2010, an increase of 14% over last year and approximately flat sequentially, as the company did not repeat the upgrade promotion that led to $15 million in one-time revenue in Q1. The main growth drivers were new license sales (up 22% y/y), 46% growth in revenue from commercial new licenses, and sales in Europe (up 20% y/y), which offset weak maintenance and upgrade revenue.

The details:

• License and other revenue was $281 million, an increase of 22% y/y and flat sequentially.
Maintenance revenue was $192 million, up 4% y/y and a decrease of 1% sequentially. But the company reports that Maintenance billings increased 6%, and that maintenance renewal rates are up both sequentially and y/y, to pre-downturn levels.

• For the first time in several quarters, Autodesk reported y/y growth in all geographies. Revenue from EMEA was $189 million, up 20% y/y but down 5% from Q1.

• Revenue from the Americas was $168 million, an increase of 6% y/y and 4% sequentially to the highest level in 2 years. The company highlighted its government business in the US, though it didn’t say what exactly it is selling to the Air Force: Mr. Bass said that “During the quarter, we signed a contract with the United States Air Force that has an initial value of approximately $5 million, most of which was recognized in the second quarter. We have the opportunity to significantly expand this relationship going forward, and this win illustrates the strong traction we are gaining with government agencies.” Asked to comment on the general economy and Autodesk’s prospects, Autodesk CEO Carl Bass said, “We see steady improvement. The recovery is not linear; it’s full of fits and starts. I think there is a pretty sizable disconnect between the people I talk to who are running businesses and what you read on Wall Street. People are continuing to make investments and they realize that even in this economic environment, there’s plenty of opportunity.”

• Revenue from Asia Pacific was $116 million, up 17% y/y and up 1% from Q1. Revenue from emerging economies was $71 million, an increase of 13% y/y and 5% sequentially to represented 15% of total revenue in Q2.

• The Platform Solutions and Emerging Business segment reported revenue of $177 million, up 19% y/y but down 3% sequentially. Revenue from AutoCAD and AutoCAD LT grew 25 % y/y even as revenue from AutoCAD-based vertical products such as AutoCAD Architecture and AutoCAD Mechanical increased 14% y/y.

• AEC revenue was $133 million, an increase of 8% y/y but a decrease of 3% from Q1. Growth came from Revit, where revenue was up 20% y/y.

• Manufacturing revenue was $113 million, up 18% y/y and up 4% sequentially, with revenue from Inventor products up 16% y/y. When asked about the prospects for Inventor, Mr. Bass said, “In many ways, we’ve exceeded the capability of the older high-cost products. What differs is the way we bring that to market and one of the ways we remedy that is through more direct sales, more consulting services, some provided by us, some provided by our partners, but certainly for the large accounts, a more direct relationship is what is required for people to base their entire engineering process on our products.” This may not be as revolutionary as it sounds: Around 20% of Autodesk revenue already is direct, since mega-companies are hard to serve through channel partners. What is new is the idea of a new go-to-market strategy focused on direct selling. It will be interesting to see how Autodesk implements such a two-pronged approach.

• The company reports that revenue from its model-based design products (Inventor, Revit, Civil3d, etc.) remains at 29% of total revenue -- which makes it $138 million in Q2, up 14% y/y; the growth was led by Inventor and Revit.

• Revenue from the Media and Entertainment business was $50 million, up 6% from the second quarter last year and up 8% sequentially.

• The company also offered Q3 guidance. It expects revenue for Q3 to be in the range of $450 million to $475 million, which would be an 8% to 14% increase over last year and flat to a 5% sequential decline in what has historically been its weakest quarter of the year.

There were a couple of unusual moments during the call -- there always are. Analysts seemed a bit upset that Autodesk had performed better in Europe than it had anticipated, meaning their (the analysts’) forecasts were proven wrong. Mr. Bass and CFO Mark Hawkins defended their guidance for Q2 saying that they look at the economy as it is when they make their forecasts -- the uncertainty they saw during Q1 led them to the forecasts for Q2. When pressed on whether the company’s Q3 forecast was likely to be as conservative, CFO Hawkins said “I think you should take our guidance at face value. That’s the guidance that we have and it’s our best comprehension of everything that’s going on in the world, whether it’s foreign exchange or investments that we’re making ...”

Later in the call, Mr. Bass addressed the channel checks carried out by brokerage firms that I wrote about earlier in the week. An analyst on the call asked Autodesk to comment on the resellers’ perception that end-user companies are hiring, but that those workers are using seats under maintenance -- meaning the reseller isn’t seeing any new license sales as a result of the hiring. Mr. Bass calmly let loose: “I’ve often said that resellers think there is some circuitous route that uses you guys to deliver messages to us. A lot of times I think what you hear for having bought them a bottle of wine or $100 check is not exactly what they’re seeing in their business.” Mr. Bass then pointed out that the 46% increase in revenue from commercial new licenses had to be coming, at least in part, from resellers.

The call was unfortunately short on the kind of details I care about. Analysts should have asked why Autodesk’s performance in Europe was so weak when Germany boosted growth in the Euro zone to its fastest pace in four years during Q2. Are India and China still standouts in Asia? Which manufacturing verticals are adopting Inventor? How are Moldflow and Algor doing? ... But in any case, Autodesk reported great results for Q2 and seems to have its business well in had, whether the analysts agree or not.

Autodesk Q2: My $.02

Tue, 10 Aug 2010 10:11:47 -0400

A lot has hit the media in the last few days about what exactly Autodesk will report on Thursday, when it makes public its Q2 2011 results. Its share price has gone up and gone down on the “news”, much of which has been correct, but some ... not so much:

• Autodesk’s Q2 ended around July 31; this one month shift from “normal” means that companies following a traditional June 30 end for the quarter tend to scoop its results.

• Two Autodesk resellers are cited as recently reporting results that foreshadow what Autodesk will be announcing on Thursday: Mensch und Machine (MuM) in Europe and Avatech in the US. It’s true that Mensch und Machine (MuM) reported in late July; their results showed that their Distribution business was up between 5% and 10% in the June quarter.

• Avatech is mentioned as providing recent results that give a view to the North American market. Not so. Avatech last reported in early May on results for its March quarter. So much has happened since then that this should be considered “old news”: Autodesk reported once and adjusted its forecast once since Avatech’s report; its own comments should carry more weight.

• There’s also the question of how relevant data from any particular reseller is. MuM accounts for perhaps 1/4 of Autodesk’s sales in EMEA; EMEA is roughly 40% of total revenue. At best, then, MuM accounts for 10% of indirect revenue or perhaps 8% of total revenue. MuM is also going through a massive transformation of its business; who can say what effect this had on its Distribution results? Do we really want to base our opinions about a billion dollar company on such a tiny proportion of its revenue?

• To gauge broader market sentiment, brokers do what they call “channel checks”, paying an outside firm to canvas a number of resellers to gauge recent results, inventories, sales cycles, optimism/pessimism and so on. These lead the brokerage firms to announce (with much fanfare) that they are changing their rating on a stock to buy or hold or whatever, and drive the share price up or down on no actual news from the company. Piper Jaffray said that its channel check, apparently only with US resellers, “points to domestic stability, which likely will lead to a slight upside surprise in Q2”. Jeffries also did a channel check, which showed that "[r]esellers in North America are slightly more optimistic about growth at (3 percent quarter-over-quarter), while their international counterparts expect a (2 percent sequential) growth in the quarter.” These results have the benefit of being recent; they have the potential downfall of representing even smaller portions of total revenue.

• Autodesk said on May 19, 2010 that it believed Q2 revenue would be between $435 million and $460 million, which would have been a 6% sequential decline but an 8% increase from last year. At the time, Autodesk CFO Mark Hawkins said that this forecast was based on “a fair amount of uncertainty in Europe” and the fact that the company would not have the $15 million one-time benefit from the upgrade pricing introduced in Q1.

• But things change and Autodesk nudged upward the bottom end of its guidance during its Investor Day in late June. Said CEO Carl Bass, “We are pleased with global demand levels, including EMEA. As a result, the company is raising the bottom end of its second quarter business outlook. Revenue is now expected to be between $445 million and $460 million.”

It worries me that investors are led to believe that they are being offered the latest, most accurate and representative information when that is clearly not the case. I plan to tune in to Autodesk’s earnings call at 5PM ET on Thursday to hear directly from them how their business fared in the July quarter. If you are an investor, drop me an email via the Comment button: how do you weight the various sources of information available to you?

Note: As the Disclosure says, no one at Schnitger Corp. owns shares in any of the companies mentioned here.

ANSYS reports good Q2, sees volatility ahead

Thu, 5 Aug 2010 10:45:31 -0400

ANSYS reported Q2 results today that met the company’s earlier forecasts but foreshadowed a coming slowdown. Total revenue for Q2 was $137.8 million, up 12.9% from $122.0 million a year ago and up 15% for the year-to-date -- showing the same slowing that was reported by DS and PTC last week.

ANSYS continues to mix GAAP for 2010 with non-GAAP results for 2009, making a real comparison difficult. The difference in 2009s GAAP and non-GAAP results for the year to date is about $2.2 million (and is defined as “revenue not reported during the period as a result of the purchase accounting adjustment associated with accounting for deferred revenue in business combinations” in a footnote in the earnings release) -- so less than 1% of revenue in the first six months of 2010. Let’s pretend that GAAP and non-GAAP for 2009 are the same. In that case,

Looking at revenue components,
• software revenue was up 12% to $81.7 million
• maintenance and services combined were up 15% to $56 million. Within these two categories,
• the lease business continues to struggle, with revenue essentially flat at $45 million in Q2
• paid-up license sales remained strong, with revenue up 30% to $37 million
• services revenue continued to decline, down 14% to $4 million.

The company reported that its renewal rate held at over 90%, and that the high end products continue to lead sales.

ANSYS reports signing 8 seven-figure deals in Q2 (up from 4 a year ago), of which the majority of revenue was deferred to future periods. CEO Jim Cashman said that these are typically expansions in existing accounts, where the benefits of ANSYS’ product are proven.

Business was good around the word in Q2 but appears to be slowing in North America and Europe and accelerating in ANSYS’ General International Area (predominantly Asia):

• the geographic star in Q2 as the General International Area led by Japan, up 22% in Q2 to $22 million
• revenue from North America was up nearly 9% to $48 million
• revenue from Europe was up over 3% to $47 million, led by solid growth in Germany and in other countries but pulled down by a 10% decline in the United Kingdom. Mr. Cashman said that the decline in the UK was due to currency effects but also to the change in government and the new austerity measures it has imposed.

The channel mix changed slightly in Q2, as more resellers become certified on new products and as the Asia economy picks up. In Q2, the channel represented 28% of sales, up from 25% in Q1 2010.

Ansoft is seeing a good recovery, contributing to ANSYS’ growth and momentum in Asia.

In answer to a question about R&D expenses in Q2 (up 7% from last year), CFO Maria Shields said that it was actually lower than ANSYS’ plan, since it was tough to find qualified people for its job openings. Send in those resumes!

ANSYS tightened but didn’t really change guidance for the remainder of the year. For the third quarter, ANSYS expects total revenue in the range of $137 million to $142.0 million and for the year, revenue of between $565 million and $580 million -- an increase of $5 million in the bottom end of the range. Investors clearly expected a better outlook, with the share price down 6% during the earnings call.

Hexagon reports Intergraph deal on track

Thu, 5 Aug 2010 08:48:23 -0400

Hexagon announced earnings results today that show it is progressing nicely in its present business: Q2 revenue was up 16% due to a pick up in the pace of recovery in its NAFTA and EU regions. (An aside: it’s nice to see recognition that the US is not the only market in North America!)

The company also provided an update on its acquisition of Intergraph: papers have been filed with all relevant antitrust authorities and, assuming they approve, the deal is expected to close in Q4. Hexagon CEO Ola Rollen said that he expects to hear within the next month or so if there are any issues that could delay the closing.

As far as I could tell, there were only Scandinavian analysts on the earnings call -- a new crowd for me. They tended to ask questions that focused on how a company from a non-dominant country can capture market share in the US and emerging markets. It was quite interesting and I’m looking forward to learning more about Hexagon and its approach to its target markets. I was a bit surprised that there was only one question on Intergraph (in a ~15 minute Q&A session) -- and this focused on the timing of the share offer that comes after the closing, not on the underlying strategy for the deal or for the business after closing.