- Revenue Grows 5% Sequentially; Company Returns to Profitability -
NEEDHAM, Mass., April 21 /PRNewswire-FirstCall/-- PTC (Nasdaq: PMTC), the
product development company(TM), today reported revenue totaling $164.7
million for the second quarter ended April 3, 2004, compared with $171.0
million for the same period last year. Revenue grew 5% sequentially, from
$156.8 million in the first quarter of fiscal 2004.
The Company achieved net income for the second quarter of $3.2 million, or
$0.01 per share, compared with a net loss of $15.2 million, or a loss of $0.06
per share, in the year-ago period. On a sequential basis, net income improved
from a net loss of $26.5 million, or a loss of $0.10 per share, in the first
quarter of 2004. The second quarter net income includes restructuring charges
of $16.7 million as well as a one-time benefit to cost of service of $5.0
million, while there were no restructuring charges in the year-ago period, and
there were $21.6 million of restructuring charges in the first quarter of
2004. Cash and investments were $221.7 million at the end of the second
quarter, compared with $190.1 million at the end of the first quarter.
"Our second quarter results demonstrate substantial progress in the
execution of our business strategy," said C. Richard Harrison, president and
chief executive officer. "Midway through fiscal 2004, we are ahead of
schedule on our two most important financial goals for the year: returning to
profitability and achieving sequential revenue growth. With an improving
customer spending environment and almost all of our restructuring activities
behind us, we are well positioned to deliver additional earnings growth in the
second half of the year."
Design Solutions
Total design solutions revenue for the second quarter was $123.0 million,
which was up 8% from the first quarter. Design solutions license revenue was
$38.0 million, up 28% from $29.8 million in the first quarter. The sequential
revenue improvement was due to stronger sales of new Pro/ENGINEER licenses by
direct and indirect channels, as well as an improvement in maintenance revenue
for the second quarter in a row.
During the quarter, PTC reached its goal for customer adoption of
Pro/ENGINEER Wildfire; within its first year of availability, an estimated 52%
of existing Pro/ENGINEER customers have migrated to the new version. PTC has
also announced the availability of Pro/ENGINEER Wildfire 2.0, which delivers
new capabilities in 3D drawings, improved interoperability with other CAD
systems, and an extension of Pro/ENGINEER's simple user interface to several
Pro/ENGINEER modules. This product launch will help PTC build on the initial
success of Pro/ENGINEER Wildfire by aiding customer adoption and facilitating
channel growth.
Collaboration and Control Solutions
Total Windchill revenue in the second quarter was $41.7 million, which was
down 3% from the first quarter. Windchill license revenue was $12.9 million,
compared with $13.7 million in the prior quarter. Windchill Link solutions
license revenue grew 32% sequentially and represented 56% of overall Windchill
license revenue.
Subsequent to the quarter, PTC announced the acquisition of OHIO Design
Automation, a leading maker of collaboration solutions for electronics design.
This acquisition will allow PTC to better serve the high technology and
electronics industries by enabling the dynamic management of design
information from leading electronics design automation vendors such as
Cadence, Mentor Graphics and Zuken. PTC has begun to integrate OHIO-DA's
technology into the Windchill product line and expects to provide integrated
product functionality within six to nine months. In addition, PTC will
continue to offer the technology on a stand-alone basis.
"We are making our product lifecycle management vision a reality for
manufacturing companies," continued Harrison. "Growth of the PLM market
requires all PLM vendors to make their solutions easier to use and easier to
adopt. PTC is at the leading edge of this movement with our highly
differentiated product development system. We continue to make the customer
value proposition for PLM solutions more compelling through our commitment to
research and development and service enhancements. This is demonstrated by
the launch of Pro/ENGINEER Wildfire 2.0 and Windchill 7.0, as well as our
recent acquisition of OHIO Design Automation."
In the second quarter, PTC received orders from leading manufacturing
organizations such as Boeing Company, Itochu Techno-Science Corporation, KHS
Maschinen-und Anlagenbau AG, KTM Sportmotorcycle AG, Motorola, Omron Company,
Sanyo Electric Co., SMS Demag AG, Toyota Motor Corporation and Volvo Group.
Additionally, orders from our reseller channel resulted in $14.2 million in
license revenue during the quarter, a 6% sequential increase.
Third Quarter 2004 Financial Outlook
PTC's revenue forecast for the third quarter of fiscal 2004 is between
$160 million and $170 million. PTC expects to complete its cost reduction
plan during the third quarter, and as a result, will incur a restructuring
charge of approximately $5 million for the quarter. Total operating expense,
including this restructuring charge, is expected to be approximately $150
million. The Company expects earnings per share on a GAAP basis to be between
$0.02 and $0.06.
The Company will provide detailed financial information and an outlook
update on its second quarter results conference call and live webcast on April
21, 2004 at 10 a.m. ET. This earnings press release and accompanying
financial and operating statistics will be accessible prior to the conference
call and webcast on the Company's web site at http://www.ptc.com/for/investors.htm.
In addition, the live webcast may be accessed at the same Web address. To
access the live call, please dial 888-730-9134 (in the U.S.) or +1-630-395-
0024 (international). Please use passcode PTC. A replay of the call will be
available until 5:00 p.m. ET on April 26, 2004. To access the replay via
webcast, please visit http://www.ptc.com/for/investors.htm. To access the replay by
phone, please dial 402-220-4148.
The Company's unaudited consolidated statements of operations, the
unaudited condensed consolidated balance sheets, and the unaudited condensed
consolidated statements of cash flows for the second quarter are attached.
About PTC
PTC (Nasdaq: PMTC) develops, markets, and supports software solutions that
help manufacturers win with superior products. PTC is the world's largest
software company with a total commitment to product development and product
lifecycle management (PLM). The Company services more than 35,000 customers
worldwide. Further information on PTC is available at http://www.ptc.com.
Except for the historical information contained herein, matters discussed
in this news release may constitute forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from those projected. These include: the growth of the PLM market and our
ability to facilitate our customers' understanding of the benefits of our PLM
solutions and differentiated product development system offering, including
return on investment, ease of use, and value creation; the acceptance by both
customers and resellers of Pro/ENGINEER Wildfire and our Windchill Link
Solutions, both as stand-alone products and as an integral product development
system; our ability to efficiently manage our sales channels, including
utilizing a diverse group of geographically dispersed resellers by effectively
coordinating joint activities (including sales, marketing, implementation,
support and customer service); the effective execution of our cost reduction
initiatives while minimizing organization disruption and achieving revenue
targets; the successful integration of OHIO Design Automation operations and
technology into PTC operations and technology; and continued improvement in
the IT spending environment which recently has been weak and has impacted the
overall demand for software and related services; as well as other risks and
uncertainties detailed from time to time in reports filed by PTC with the
Securities and Exchange Commission, including the Company's most recent
reports on Form 10-K and 10-Q.
PTC, The Product Development Company, Pro/ENGINEER, Wildfire, Windchill,
and all PTC product names and logos are trademarks or registered trademarks of
Parametric Technology Corporation or its subsidiaries in the United States and
in other countries. All other companies and products referenced herein have
trademarks or registered trademarks of their respective holders.
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Six Months Ended
April 3, March 29, April 3, March 29,
2004 2003 2004 2003
Revenue:
License $ 50,971 $ 55,284 $ 94,488 $106,761
Service 113,737 115,742 227,030 236,232
Total revenue 164,708 171,026 321,518 342,993
Costs and expenses:
Cost of license
revenue 1,914 1,978 4,041 4,623
Cost of service
revenue 38,656 50,694 88,676 99,324
Sales and marketing 57,132 77,629 115,317 159,072
Research and
development 26,780 31,942 56,359 63,842
General and
administrative 14,364 16,654 29,324 32,177
Amortization of
other intangible
assets 1,336 1,460 2,745 2,941
Restructuring charge 16,680 - 38,300 -
Total costs and
expenses 156,862 180,357 334,762 361,979
Operating income (loss) 7,846 (9,331) (13,244) (18,986)
Other income
(expense), net 177 (887) (313) (1,452)
Income (loss)
before income taxes 8,023 (10,218) (13,557) (20,438)
Provision for
income taxes 4,852 4,951 9,809 6,121
Net income (loss) $3,171 $(15,169) $(23,366) $(26,559)
Income (loss) per share:
Basic $0.01 $(0.06) $(0.09) $(0.10)
Weighted average
shares
outstanding 267,515 263,796 266,895 263,193
Diluted $0.01 (0.06) $(0.09) $(0.10)
Weighted average
shares
outstanding 273,601 263,796 266,895 263,193
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
April 3, September 30,
2004 2003
ASSETS
Cash and investments $221,665 $205,312
Accounts receivable, net 154,827 140,151
Property and equipment, net 62,541 73,563
Goodwill and other intangibles, net 49,838 51,851
Other assets 116,801 106,813
Total assets $605,672 $577,690
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenue $214,082 $173,015
Other liabilities 212,285 209,517
Stockholders' equity 179,305 195,158
Total liabilities and stockholders' equity $605,672 $577,690
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Three Months Ended Six Months Ended
April 3, March 29, April 3, March 29,
2004 2003 2004 2003
Cash flows from
operating activities:
Net income (loss) $3,171 $(15,169) $(23,366) $(26,559)
Depreciation and
amortization 9,180 10,400 18,742 21,235
Other 18,834 80 19,796 8,418
Net cash provided
(used) by operating
activities 31,185 (4,689) 15,172 3,094
Capital expenditures (2,796) (8,442) (5,692) (13,285)
Other investing and
financing activities 4,430 3,852 4,771 3,873
Foreign exchange
impact on cash (1,209) (465) 2,102 1,441
Net change in cash
and investments 31,610 (9,744) 16,353 (4,877)
Cash and investments,
beginning of period 190,055 215,281 205,312 210,414
Cash and investments,
end of period $221,665 $205,537 $221,665 $205,537
Investor Relations Contact:
Meredith Mendola
781-370-6151
mmendola@ptc.com
Public Relations Contact:
Maria Battaglia
781-370-5245
mbattaglia@ptc.com
SOURCE PTC
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Related links:
http://www.ptc.com
CONTACT:
Investor Relations, Meredith Mendola,
+1-781-370-6151, mmendola@ptc.com, or Public Relations, Maria
Battaglia, +1-781-370-5245, mbattaglia@ptc.com, both of PTC
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