Autodesk 2000 Annual Report Download - page 15

14 FY 00 Autodesk, Inc.
Production and Suppliers
Production of Autodesk’s software products involves
duplication of the software media and the printing
of user manuals.The purchase of media and the trans-
fer of the software programs onto media for distribu-
tion to customers are performed by Autodesk and
by licensed subcontractors. Media for Autodesk’s
products include CD-ROMs and disks, which are
available from multiple sources. User manuals for
Autodesk’s products and packaging materials are pro-
duced to Autodesk specifications by outside sources.
Domestic production is performed in leased facilities
operated by Autodesk.Some product assembly is also
performed by independent third-party contractors.
International production is performed by independ-
ent third-party contractors in Ireland and Singapore.
To date, Autodesk has not experienced any material
difficulties or delays in the production of its software
and documentation.
The Discreet Division has historically relied on third-
party vendors to manufacture and supply all of the
hardware components used in its systems. Manufac-
turing consists of assembly (including disk array assem-
bly), testing, and value added systems integration.
The Discreet Division’s flame*, effect*, inferno*, fire*,
smoke* and frost* software currently run on worksta-
tions manufactured by SGI. There are significant risks
associated with this reliance on SGI and the Discreet
Division may be impacted by the timing of the devel-
opment and release of products by SGI. In addition,
there may be unforeseen difficulties associated with
adapting the Discreet Division’s products to future SGI
products.Moreover, although Autodesk has no reason
to believe that the Discreet Division will be unable to
obtain sufficient quantities of SGI workstations on a
timely basis,the Discreet Division may not continue to
be able to procure such workstations in sufficient
quantities on a timely basis.
The Discreet Division is also dependent on SGI as the
sole source for video I/O cards used in the systems.
The Discreet Division generally purchases sole source
or other components pursuant to purchase orders
placed from time to time in the ordinary course of
business and has no written agreements or guaranteed
supply arrangements with its sole source suppliers.
Employees
As of January 31, 2000, Autodesk had 3,024 full-time
employees. Autodesk’s future success is dependent
in part on the ability to attract, retain and motivate
highly qualified technical and management person-
nel, for whom competition is intense.
Item 2. Properties
Autodesk’s executive offices and the principal offices
for product development, domestic marketing and
sales,and production are located in leased office space
in northern California. Autodesk also leases office
space in various locations throughout the U.S.for local
sales, development and technical support personnel.
Autodesk’s foreign subsidiaries lease office space for
their operations.
Autodesk believes that its existing facilities and offices
are adequate to meet its requirements for the fore-
seeable future.
Item 3. Legal Proceedings
Autodesk is a party to various legal proceedings aris-
ing from the normal course of business activities. In
management’s opinion, resolution of these matters
is not expected to have a material adverse impact on
Autodesk’s consolidated results of operations or its
financial position.However,depending on the amount
and timing, an unfavorable resolution of a matter
could materially affect Autodesk’s future results of
operations or cash flows in a particular period.
In March 2000, a purported class action lawsuit was
filed against Autodesk and some of its officers, alleg-
ing violations of the Securities Exchange Act of 1934.
The plaintiffs seek to act on behalf of purchasers of
Autodesk common stock during the period between
September 14, 1998 and May 4, 1999. Autodesk
believes that it has meritorious defenses to the com-
plaint and intends to vigorously defend the action.