PTC Announces Q1 Results, Initiates Q2 Guidance and Updates FY'13 Targets
Highlights
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Q1 Results:
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Non-GAAP revenue of
$321 million , flat year over year (up 2% on a constant currency basis) -
Non-GAAP EPS of
$0.36 , up 3% year over year (up 6% on a constant currency basis) -
Q1 revenue contribution from
Servigistics (acquired onOctober 2, 2012 ) was$27 million on a non-GAAP basis and$25 million on a GAAP basis -
GAAP revenue of
$320 million and GAAP EPS of$0.29 , including a$15 million restructuring charge and a one-time non-cash tax benefit of$33 million associated with the purchase accounting for theServigistics acquisition
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Non-GAAP revenue of
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Q2 Guidance:
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Non-GAAP revenue of
$305 to $325 million and non-GAAP EPS of$0.32 to$0.39 -
License revenue of
$70 to $85 million -
GAAP revenue of
$304 to $324 million and GAAP EPS of$0.03 to$0.10 , including$15 million of restructuring charges -
Assumes
$1.33 USD / EURO and90 YEN / USD.
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Non-GAAP revenue of
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FY'13 Targets:
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Non-GAAP revenue of
$1,340 to$1,370 million and non-GAAP EPS of$1.70 to $1.80 -
License revenue of
$360 to $380 million - Non-GAAP operating margin of approximately 21.5%
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GAAP revenue of approximately
$1,337 to$1,367 million and GAAP EPS of$0.95 to $1.05 ; GAAP operating margin of approximately 11% -
Revenue guidance assumes at least
$80 million contribution fromServigistics , including$3 million in non-GAAP revenue -
Assumes
$1.33 USD / EURO and90 YEN / USD.
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Non-GAAP revenue of
The Q1 non-GAAP revenue and non-GAAP EPS results exclude a
Results Commentary
Heppelmann added, "We continued to demonstrate our PLM market leadership
in Q1 with a competitive displacement of the legacy PLM provider at
Brazilian-based Embraer, one of the world's largest aircraft
manufacturers. Embraer chose PTC as its partner of record for its entire
global aircraft development program — commercial, executive and defense.
The selection further extends PTC's position as a leading PLM technology
solution provider for the aerospace and defense (A&D) industry. We also
had a strong quarter in our SLM business with double-digit organic
license growth, further bolstered by strong performance from the
"We had 27 large deals (recognized license + services revenue of more
than
Outlook Commentary
"We continue to be excited about our long-term growth opportunity based on the strength of our pipeline, market acceptance of our products in core markets, as well as the significant interest we are seeing in our broader solution areas. While the slowdown in the global manufacturing industry and uncertainty about the near-term economy remains a headwind for revenue growth, we remain committed to driving operating margin expansion and achieving our goal of 25% to 27% non-GAAP operating margin in FY'15," said Heppelmann.
Glidden added, "For Q2'13, we are providing guidance of
The Q2 guidance assumes
Glidden continued, "Looking to the full year FY'13, we are targeting
non-GAAP revenue of
The FY'13 targets assume a non-GAAP tax rate of 22%, a GAAP tax rate of
12% and 122 million diluted shares outstanding. The FY'13 non-GAAP
targets exclude approximately
Q1 Earnings Conference Call and Webcast
Prepared remarks for the conference call have been posted to the investor relations section of our website. The prepared remarks will not be read live; the call will be primarily Q&A.
What: |
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When: |
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Dial-in: |
1-800-857-5592 or 1-773-799-3757 |
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Webcast: | ||
Replay: |
The audio replay of this event will be archived for public replay
until |
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Important Information About Non-GAAP References
PTC provides non-GAAP supplemental information to its financial results.
Non-GAAP revenue, operating expenses, margin and EPS exclude the effect
of purchase accounting on the fair value of acquired deferred revenue of
Forward-Looking Statements
Statements in this press release that are not historic facts, including
statements about our fiscal 2013 and other future financial and growth
expectations and anticipated tax rates, are forward-looking statements
that involve risks and uncertainties that could cause actual results to
differ materially from those projected. These risks include the
possibility that the macroeconomic climate may not improve or may
deteriorate, the possibility that customers may not purchase our
solutions when or at the rates we expect and that our pipeline deals may
not convert as we expect, the possibility the foreign currency exchange
rates may vary from our expectations and thereby affect our reported
revenue and expense, the possibility that we may not achieve the
license, services or maintenance growth rates that we expect, which
could result in a different mix of revenue between license, service and
maintenance and could impact our EPS results, the possibility that new
products, including new releases of Creo and our newly expanded SLM
solutions, may not generate the revenue we expect, the possibility that
resource constraints and staff reductions could adversely affect our
revenue, the possibility that our strategic investments may not generate
the growth or revenues we expect, the possibility that the acquisition
of
PTC, the PTC logo, and all other PTC product names and logos are
trademarks or registered trademarks of
About PTC
PTC (Nasdaq: PMTC) enables manufacturers to achieve sustained product and service advantage. The company's technology solutions help customers transform the way they create and service products across the entire product lifecycle — from conception and design to sourcing and service. Founded in 1985, PTC employs nearly 6,000 professionals serving more than 27,000 businesses in rapidly-evolving, globally distributed manufacturing industries worldwide. Get more information at www.ptc.com.
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UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
(in thousands, except per share data) | ||||||||||||
Three Months Ended | ||||||||||||
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December 31, | |||||||||||
2012 | 2011 | |||||||||||
Revenue: | ||||||||||||
License | $ | 79,185 | $ | 89,088 | ||||||||
Service | 76,760 | 75,627 | ||||||||||
Support | 163,806 | 153,561 | ||||||||||
Total revenue | 319,751 | 318,276 | ||||||||||
Cost of revenue: | ||||||||||||
Cost of license revenue (1) | 8,012 | 7,659 | ||||||||||
Cost of service revenue (1) | 68,592 | 71,450 | ||||||||||
Cost of support revenue (1) | 20,468 | 19,110 | ||||||||||
Total cost of revenue | 97,072 | 98,219 | ||||||||||
Gross margin | 222,679 | 220,057 | ||||||||||
Operating expenses: | ||||||||||||
Sales and marketing (1) | 93,549 | 97,778 | ||||||||||
Research and development (1) | 57,429 | 54,993 | ||||||||||
General and administrative (1) | 35,817 | 29,572 | ||||||||||
Amortization of acquired intangible assets | 6,623 | 5,209 | ||||||||||
Restructuring charges | 15,402 | - | ||||||||||
Total operating expenses | 208,820 | 187,552 | ||||||||||
Operating income | 13,859 | 32,505 | ||||||||||
Other expense, net | (1,805 | ) | (2,643 | ) | ||||||||
Income before income taxes | 12,054 | 29,862 | ||||||||||
(Benefit) provision for income taxes | (23,757 | ) | 7,739 | |||||||||
Net income | $ | 35,811 | $ | 22,123 | ||||||||
Earnings per share: | ||||||||||||
Basic | $ | 0.30 | $ | 0.19 | ||||||||
Weighted average shares outstanding |
119,927 | 117,715 | ||||||||||
Diluted | $ | 0.29 | $ | 0.18 | ||||||||
Weighted average shares outstanding | 121,805 | 120,576 | ||||||||||
(1) The amounts in the tables above include stock-based compensation as follows: |
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Three Months Ended | ||||||||||||
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December 31, | |||||||||||
2012 | 2011 | |||||||||||
Cost of license revenue | $ | 5 | $ | 5 | ||||||||
Cost of service revenue | 1,612 | 1,563 | ||||||||||
Cost of support revenue | 826 | 950 | ||||||||||
Sales and marketing | 2,458 | 3,728 | ||||||||||
Research and development | 2,512 | 2,549 | ||||||||||
General and administrative | 4,480 | 4,587 | ||||||||||
Total stock-based compensation | $ | 11,893 | $ | 13,382 | ||||||||
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NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED) | |||||||||||||
(in thousands, except per share data) | |||||||||||||
Three Months Ended | |||||||||||||
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December 31, | ||||||||||||
2012 | 2011 | ||||||||||||
GAAP revenue | $ | 319,751 | $ | 318,276 | |||||||||
Fair value of acquired company's |
1,554 | 1,522 | |||||||||||
Non-GAAP revenue | $ | 321,305 | $ | 319,798 | |||||||||
GAAP gross margin | $ | 222,679 | $ | 220,057 | |||||||||
Fair value of acquired company's |
1,554 | 1,522 | |||||||||||
Stock-based compensation | 2,443 | 2,518 | |||||||||||
Amortization of acquired intangible assets |
4,639 | 4,103 | |||||||||||
Non-GAAP gross margin | $ | 231,315 | $ | 228,200 | |||||||||
GAAP operating income | $ | 13,859 | $ | 32,505 | |||||||||
Fair value of acquired company's |
1,554 | 1,522 | |||||||||||
Stock-based compensation | 11,893 | 13,382 | |||||||||||
Amortization of acquired intangible assets |
4,639 | 4,103 | |||||||||||
Amortization of acquired intangible assets | 6,623 | 5,209 | |||||||||||
Acquisition-related charges included in |
4,599 | 2,068 | |||||||||||
Restructuring charges | 15,402 | - | |||||||||||
Non-GAAP operating income (2) | $ | 58,569 | $ | 58,789 | |||||||||
GAAP net income | $ | 35,811 | $ | 22,123 | |||||||||
Fair value of acquired company's |
1,554 | 1,522 | |||||||||||
Stock-based compensation | 11,893 | 13,382 | |||||||||||
Amortization of acquired intangible assets |
4,639 | 4,103 | |||||||||||
Amortization of acquired intangible assets |
6,623 | 5,209 | |||||||||||
Acquisition-related charges included in |
4,599 | 2,068 | |||||||||||
Restructuring charges | 15,402 | - | |||||||||||
Non-operating foreign currency transaction losses (3) | - | 761 | |||||||||||
Income tax adjustments (4) | (36,400 | ) | (6,678 | ) | |||||||||
Non-GAAP net income | $ | 44,121 | $ | 42,490 | |||||||||
GAAP diluted earnings per share | $ | 0.29 | $ | 0.18 | |||||||||
Fair value of deferred maintenance revenue | 0.01 | 0.01 | |||||||||||
Stock-based compensation | 0.10 | 0.11 | |||||||||||
Amortization of acquired intangibles | 0.09 | 0.08 | |||||||||||
Acquisition-related charges | 0.04 | 0.02 | |||||||||||
Restructuring charges and other | 0.13 | 0.01 | |||||||||||
Income tax adjustments | (0.30 | ) | (0.06 | ) | |||||||||
Non-GAAP diluted earnings per share | $ | 0.36 | $ | 0.35 | |||||||||
(2) | Operating margin impact of non-GAAP adjustments: | ||||||||||||
Three Months Ended | |||||||||||||
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December 31, | ||||||||||||
2012 | 2011 | ||||||||||||
GAAP operating margin | 4.3 | % | 10.2 | % | |||||||||
Fair value of deferred maintenance revenue | 0.5 | % | 0.5 | % | |||||||||
Stock-based compensation | 3.7 | % | 4.2 | % | |||||||||
Amortization of acquired intangibles | 3.5 | % | 2.9 | % | |||||||||
Acquisition-related charges | 1.4 | % | 0.6 | % | |||||||||
Restructuring charges | 4.8 | % | 0.0 | % | |||||||||
Non-GAAP operating margin | 18.2 | % | 18.4 | % | |||||||||
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(3) In the first quarter of 2012 we recorded
(4) Reflects the tax effects of non-GAAP adjustments for the first
quarter of 2013 and 2012, which are calculated by applying the
applicable tax rate by jurisdiction to the non-GAAP adjustments listed
above, as well as one-time non-cash GAAP charges. In the fourth quarter
of 2012, a valuation allowance was established against our U.S. net
deferred tax assets. As the U.S. is profitable on a non-GAAP basis, the
2013 non-GAAP tax provision is being calculated assuming there is no
U.S. valuation allowance and as a result an income tax benefit of
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
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September 30, | |||||||
2012 | 2012 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 248,392 | $ | 489,543 | ||||
Accounts receivable, net | 221,687 | 217,370 | ||||||
Property and equipment, net | 66,109 | 63,466 | ||||||
Goodwill and acquired intangible assets, net | 1,048,000 | 796,232 | ||||||
Other assets | 218,458 | 225,023 | ||||||
Total assets | $ | 1,802,646 | $ | 1,791,634 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Deferred revenue | $ | 303,107 | $ | 327,529 | ||||
Borrowings under credit facility | 368,125 | 370,000 | ||||||
Other liabilities | 305,456 | 296,846 | ||||||
Stockholders' equity | 825,958 | 797,259 | ||||||
Total liabilities and stockholders' equity | $ | 1,802,646 | $ | 1,791,634 | ||||
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(in thousands) | |||||||||||
Three Months Ended | |||||||||||
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December 31, | ||||||||||
2012 | 2011 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 35,811 | $ | 22,123 | |||||||
Stock-based compensation | 11,893 | 13,382 | |||||||||
Depreciation and amortization | 19,477 | 17,026 | |||||||||
Accounts receivable | 16,142 | 13,295 | |||||||||
Accounts payable and accruals (5) | (27,958 | ) | (32,856 | ) | |||||||
Deferred revenue | (3,534 | ) | (2,075 | ) | |||||||
Income taxes | (33,779 | ) | (2,409 | ) | |||||||
Excess tax benefits from stock-based awards | (28 | ) | (150 | ) | |||||||
Other | (4,388 | ) | 8,149 | ||||||||
Net cash provided by operating activities (6) | 13,636 | 36,485 | |||||||||
Capital expenditures | (7,393 | ) | (7,570 | ) | |||||||
Acquisitions of businesses, net of cash acquired (7) | (222,423 | ) | (880 | ) | |||||||
Proceeds (payments) on debt, net | (1,875 | ) | - | ||||||||
Proceeds from issuance of common stock | 645 | 7,196 | |||||||||
Payments of withholding taxes in connection with |
(9,348 | ) | (12,661 | ) | |||||||
Repurchases of common stock | (15,792 | ) | - | ||||||||
Excess tax benefits from stock-based awards | 28 | 150 | |||||||||
Foreign exchange impact on cash | 1,371 | (3,247 | ) | ||||||||
Net change in cash and cash equivalents | (241,151 | ) | 19,473 | ||||||||
Cash and cash equivalents, beginning of period | 489,543 | 167,878 | |||||||||
Cash and cash equivalents, end of period | $ | 248,392 | $ | 187,351 | |||||||
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(5) Includes accounts payable, accrued expenses, and accrued compensation and benefits
(6) The first quarter of 2013 includes
(7) We acquired
PTC Investor Relations
tifox@ptc.com
Source: PTC
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