PTC Announces Q1 Results Issues Q2 Guidance and Full Fiscal Year 2009 Targets
NEEDHAM, Mass.--(BUSINESS WIRE)--
Highlights
- Q1 Results: Revenue of $240.4 millionand non-GAAP EPS of $0.15 o GAAP EPS of $0.04
- Q2 Guidance: Revenue of
$220 to $230 million and non-GAAP EPS of$0.04 to$0.10 o GAAP EPS loss of$0.10 to $0.19 o Includes$15 to $20 million
restructuring charge to reduce operating expenses - FY 2009 Targets: Revenue of
$960 million with non-GAAP EPS of$0.90 o GAAP EPS of$0.43 to $0.49 o 20% non-GAAP operating margin for H2'09
The Q1 non-GAAP results exclude
Computer-Based Training Product Reclassification
Beginning in FY2009, PTC is reclassifying its computer-based training
product related sales previously recorded as Services revenue to License
and Maintenance revenue to better align with how these training products
are sold to customers. This will not affect total revenue, operating
margin or net income. However, the reclassification will result in a
shift of approximately
Q1 Results & Outlook
unfavorable currency impact. Our total revenue was up 2% on a constant
currency basis, reflecting the growth of our maintenance and services
businesses as well as 2 months of additional revenue contribution from
CoCreate, which we acquired on
"Our pipeline for new business opportunities remains strong," continued
Harrison. "We are, however, experiencing lengthening lead times and
reduced spending on large deals and our reseller channel is also being
impacted by softening end-market demand. Recognizing that the margin for
error is greater than it has historically been due to the uncertainties
of the current environment, we are currently expecting FY'09 revenue of
approximately
Harrison added, "Our technology is winning in significant competitive benchmarks and we remain very optimistic about the long-term opportunity for PTC. We intend to continue to make strategic investments we believe are critical to gaining market share and improving operating profitability over the longer-term, including improving the breadth and competitiveness of our product portfolio, expanding our reseller channel and developing an ecosystem of strategic services partners."
Moses concluded, "We are well positioned to weather this economic storm
with
The Q2 guidance assumes a non-GAAP tax rate of 25% and a GAAP tax
provision of 30%, which is a benefit on a loss before tax that includes
a one-time tax benefit of approximately
The FY'09 guidance assumes a non-GAAP tax rate of 25% and a GAAP tax
benefit rate of 30%. The FY'09 non-GAAP guidance excludes approximately
to
Q1 Earnings Conference Call and Webcast
NOTE: Supplemental financial and operating metric information and
prepared remarks for the conference call will be posted to the investor
relations section of our website simultaneous to the press release after
the market closes on
When:
Dial-in: 1-888-566-8560 or 1-517-623-4768
Call Leader:
Webcast: http://www.ptc.com/for/investors.htm
Replay: The audio replay of this event will be archived for
public replay until
Important Information About Non-GAAP References
PTC provides non-GAAP supplemental information to its financial results. Non-GAAP operating expenses, margin and EPS exclude stock-based compensation expense, amortization of acquired intangible assets, acquired in-process research and development expenses, restructuring charges, and the related tax effects of the preceding items and any one-time tax items, such as valuation allowance reversals. PTC provides this non-GAAP information to facilitate period-to-period comparisons of its operational performance by adjusting for certain non-cash and certain episodic expenses. We believe that providing non-GAAP measures affords investors a view of our operating results that may be more easily compared to peer companies. PTC management also uses this and other non-GAAP financial information to evaluate, manage and plan our business because the information provides additional insight into ongoing financial performance. In addition, compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. However, non-GAAP information should not be construed as an alternative to GAAP information as the items excluded from the non-GAAP measures often have a material impact on PTC's financial results. Management uses, and investors should use, non-GAAP measures in conjunction with our GAAP results.
About PTC
PTC (Nasdaq: PMTC) provides discrete manufacturers with software and services to meet the globalization, time-to-market and operational efficiency objectives of product development. Using the company's CAD, and content and process management solutions, organizations in the Industrial, High-Tech, Aerospace and Defense, Automotive, Consumer and Medical industries are able to support key business objectives and create innovative products that meet both customer needs and comply with industry regulations. For more information on PTC, please visit www.ptc.com.
Statements in this news release that are not historic facts,
including statements about our fiscal 2009 expectations, financial
targets, anticipated tax rates and cash flows, the expected impact of
our planned strategic investments on our future success, the expected
effect of our operating expense reduction efforts on future results, and
our ability to successfully generate cash at the level we expect, 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 our customers may further
reduce, defer or forego investment in our solutions in the current
economic climate, the possibility that we will experience a shortfall in
revenue that causes us to decrease or eliminate planned strategic
investments in our business or to defer or forego repurchases of our
stock or repayment of our outstanding debt, the possibility that our
efforts to reduce our operating expenses may not have the effects we
expect and could harm our operations, and the possibility that we may be
unable to draw from our revolving credit facility when or to the extent
we decide to do so. In addition, our assumptions concerning our
future GAAP and non-GAAP effective income tax rates are based on
estimates and other factors that could change, including the geographic
mix of our revenue, expenses (including restructuring charges) and
profits and loans and cash repatriations from foreign subsidiaries.
Other risks and uncertainties that could cause actual results to differ
materially from those projected are detailed from time to time in
reports we file with the
PTC,
PARAMETRIC TECHNOLOGY CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended January 3, December 29, 2009 2007 Revenue: License $ 50,502 $ 70,975 Service 189,889 170,267 Total revenue 240,391 241,242 Costs and expenses: Cost of license revenue(1) 7,584 4,805 Cost of service revenue(1) 75,741 70,980 Sales and marketing(1) 79,862 71,028 Research and development(1) 48,361 41,548 General and administrative(1) 21,437 23,551 Amortization of acquired intangible assets 3,868 2,893 In-process research and development -- 1,887 Restructuring charges -- 9,685 Total costs and expenses 236,853 226,377 Operating income 3,538 14,865 Other income (expense), net (1,071 ) 1,606 Income before income taxes 2,467 16,471 Provision for (benefit from) income taxes (2,192 ) 6,591 Net income $ 4,659 $ 9,880 Earnings per share: Basic $ 0.04 $ 0.09 Weighted average shares outstanding 114,555 113,680 Diluted $ 0.04 $ 0.08 Weighted average shares outstanding 117,356 118,087
(1) The amounts in the tables above include stock-based compensation as follows:
Three Months Ended
January 3, December 29,
2009 2007
Cost of license revenue $ 14 $ --
Cost of service revenue 2,255 2,347
Sales and marketing 2,908 2,867
Research and development 2,258 2,270
General and administrative 3,096 3,119
Total stock-based compensation $ 10,531 $ 10,603
PARAMETRIC TECHNOLOGY CORPORATION NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED) (in thousands, except per share data) Three Months Ended January 3, December 29, 2009 2007 GAAP revenue $ 240,391 $ 241,242 Fair value adjustment of acquired CoCreate deferred -- 1,237 maintenance revenue Non-GAAP revenue $ 240,391 $ 242,479 GAAP operating income $ 3,538 $ 14,865 Fair value adjustment of acquired CoCreate deferred -- 1,237 maintenance revenue Stock-based compensation 10,531 10,603 Amortization of acquired intangible assets 4,668 2,954 included in cost of license revenue Amortization of acquired intangible assets 8 17 included in cost of service revenue Amortization of acquired intangible assets 3,868 2,893 In-process research and development -- 1,887 Restructuring charge -- 9,685 Non-GAAP operating income $ 22,613 $ 44,141 GAAP net income $ 4,659 $ 9,880 Fair value adjustment of acquired CoCreate deferred -- 1,237 maintenance revenue Stock-based compensation 10,531 10,603 Amortization of acquired intangible assets included in 4,668 2,954 cost of license revenue Amortization of acquired intangible assets included in 8 17 cost of service revenue Amortization of acquired intangible assets 3,868 2,893 In-process research and development -- 1,887 Restructuring charge -- 9,685 Income tax adjustments (1) (6,202 ) (8,076 ) Non-GAAP net income $ 17,532 $ 31,080 GAAP diluted earnings per share $ 0.04 $ 0.08 Stock-based compensation 0.09 0.09 All other items identified above 0.02 0.09 Non-GAAP diluted earnings per share $ 0.15 $ 0.26 Weighted average shares outstanding - diluted 117,356 118,087 (1) Reflects the tax effect of non-GAAP adjustments above.
PARAMETRIC TECHNOLOGY CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) January 3, September 30, 2009 2008 ASSETS Cash and cash equivalents $ 226,933 $ 256,941 Accounts receivable, net 185,007 201,509 Property and equipment, net 57,526 55,253 Goodwill and acquired intangibles, net 581,305 587,537 Other assets 251,921 248,333 Total assets $ 1,302,692 $ 1,349,573 LIABILITIES AND STOCKHOLDERS' EQUITY Deferred revenue $ 261,775 $ 258,295 Borrowings under revolving credit facility 74,036 88,505 Other liabilities 266,645 300,248 Stockholders' equity 700,236 702,525 Total liabilities and stockholders' equity $ 1,302,692 $ 1,349,573
PARAMETRIC TECHNOLOGY CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended January 3, December 29, 2009 2007 Cash flows from operating activities: Net income $ 4,659 $ 9,880 Stock-based compensation 10,531 10,603 Amortization of acquired intangible assets 8,544 5,864 Depreciation and other amortization 6,251 6,071 In-process research and development -- 1,887 Accounts receivable 23,439 38,100 Accounts payable and accruals(1) (26,033 ) (30,119 ) Deferred revenue (8,730 ) (16,417 ) Other (4,237 ) (5,314 ) Net cash provided by operating activities 14,424 20,555 Capital expenditures (8,172 ) (4,830 ) Acquisitions of businesses, net of cash acquired (2) (8,362 ) (262,285 ) Proceeds from (payments of) debt, net (13,265 ) 205,000 Repurchases of common stock (9,581 ) -- Other investing and financing activities (491 ) (6,946 ) Foreign exchange impact on cash (4,561 ) 23 Net change in cash and cash equivalents (30,008 ) (48,483 ) Cash and cash equivalents, beginning of period 256,941 263,271 Cash and cash equivalents, end of period $ 226,933 $ 214,788 (1) Includes accounts payable, accrued expenses, and accrued compensation and benefits. (2) Acquisitions of businesses: a. The quarter endedJanuary 3, 2009 includes$7 million for our acquisition of Synapsis and$1 million for a contingent purchase price earned during the quarter related to a prior acquisition. b. The quarter endedDecember 29, 2007 includes$248 million for our acquisition of CoCreate and$14 million for two other businesses, net of cash acquired.
CONTACT: PTC
Kristian Talvitie, 781-370-6151
Ktalvitie@ptc.com
Source: PTC