PTC Announces Q4 and FY'13 Results; Provides Q1 and FY'14 Outlook; Initiates New Long-Term Target Non-GAAP Operating Margin of 28-30%
Highlights
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Q4 Results:
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Non-GAAP revenue of
$345 million , up 6% year over year (up 6% on a constant currency basis) -
Non-GAAP EPS of
$0.59 , up 19% year over year (up 20% on a constant currency basis) - Non-GAAP operating margin of 27.4%, up 300 basis points year over year (up approximately 310 basis points on a constant currency basis)
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GAAP revenue of
$345 million , GAAP operating margin of 14.2% and GAAP EPS of$0.47 , including an$18 million restructuring charge -
Q4 revenue contribution from acquired businesses including
Servigistics (acquired onOctober 2, 2012 ), Enigma (acquired onJuly 11, 2013 ) and NetIDEAS (acquired onSeptember 5, 2013 ) was$27 million on both a GAAP and non-GAAP basis.
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Non-GAAP revenue of
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FY'13 Results:
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Non-GAAP revenue of
$1,297 million , up 3% year over year (up 5% on a constant currency basis) -
Non-GAAP EPS of
$1.81 , up 20% year over year (up 24% on a constant currency basis) - Non-GAAP operating margin of 22.1%, up 247 basis points year over year (up approximately 285 basis points on a constant currency basis)
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GAAP revenue of
$1,294 million , GAAP EPS of$1.19 , and GAAP operating margin of 9.8%.
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Non-GAAP revenue of
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Q1 Guidance:
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Revenue of
$310 to$320 million and non-GAAP EPS of$0.41 to$0.46 -
License revenue of
$70 to$80 million -
GAAP EPS of
$0.23 to$0.28 -
Assumes
$1.35 USD / EURO and98 YEN / USD
-
Revenue of
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FY'14 Guidance:
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Revenue of
$1,325 to$1,340 million and non-GAAP EPS of$2.00 to$2.10 -
License revenue of
$350 to$365 million - Non-GAAP operating margin of approximately 25%
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GAAP EPS of
$1.28 to$1.38 and GAAP operating margin of approximately 18% -
Assumes
$1.35 USD / EURO and98 YEN / USD
-
Revenue of
The Q4 and FY'13 non-GAAP revenue and non-GAAP EPS results exclude a
Results Commentary
Heppelmann added, "We saw improvement in year-over-year performance
within our CAD license business; however, performance in our extended
PLM business was muted by the softer macroeconomic environment, most
noticeably in the
Outlook Commentary
"We remain excited about our long-term growth opportunity based on the strength of our pipeline, competitive wins in our core markets, and an expanding set of impact solutions that address key customer challenges. We remain committed to driving margin expansion and now expect to achieve our 25% non-GAAP operating margin target in FY'14, a year earlier than we had previously communicated. We are now establishing a new long-term non-GAAP operating margin target range of 28% to 30% by FY'17," said Heppelmann.
Glidden added, "For Q1'14, we are providing guidance of
The Q1 guidance assumes
Glidden continued, "Based on our robust sales pipeline and increasing
customer adoption of our broader solution set, but uncertain timing of
global economic recovery, we are targeting revenue of
The FY'14 targets assume a non-GAAP tax rate of 25%, a GAAP tax rate of
30% and 122 million diluted shares outstanding. The FY'14 non-GAAP
guidance excludes
Ticker Symbol Change to PTC
PTC will change its NASDAQ ticker symbol to "PTC" effective at the start
of trading on
Q4 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: |
Thursday, November 7th, 2013 at |
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Dial-in: | 1-800-857-5592 or 1-773-799-3757 | ||
Call Leader: |
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Passcode: PTC | |||
Webcast: | |||
Replay: |
The audio replay of this event will be archived for public replay
until |
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Dial-in: 800-839-2204 Passcode: 5689 | |||
To access the replay via webcast, please visit www.ptc.com/for/investors.htm. |
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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 2014 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 or adopt
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 support growth rates that we expect, which
could result in a different mix of revenue between license, service and
support and could impact our EPS results, the possibility that we may be
unable to improve services margins as we expect, the possibility that we
may be unable to improve sales productivity as we expect, the
possibility that our CAD and SLM businesses may not continue to expand,
the possibility that resource constraints and personnel reductions could
adversely affect our revenue, and the possibility that remedial actions
relating to our previously announced investigation in
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 | Twelve Months Ended | |||||||||||||||||||||
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||
License | $ | 105,432 | $ | 100,698 | $ | 344,209 | $ | 348,394 | ||||||||||||||
Service | 72,269 | 69,138 | 294,653 | 295,342 | ||||||||||||||||||
Support | 167,144 | 155,459 | 654,679 | 611,943 | ||||||||||||||||||
Total revenue | 344,845 | 325,295 | 1,293,541 | 1,255,679 | ||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||||
Cost of license revenue (1) | 8,270 | 7,478 | 33,004 | 30,595 | ||||||||||||||||||
Cost of service revenue (1) | 62,871 | 61,978 | 258,954 | 265,483 | ||||||||||||||||||
Cost of support revenue (1) | 20,388 | 18,383 | 81,081 | 76,050 | ||||||||||||||||||
Total cost of revenue | 91,529 | 87,839 | 373,039 | 372,128 | ||||||||||||||||||
Gross margin | 253,316 | 237,456 | 920,502 | 883,551 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Sales and marketing (1) | 90,734 | 94,350 | 360,640 | 377,796 | ||||||||||||||||||
Research and development (1) | 55,127 | 52,131 | 221,918 | 214,960 | ||||||||||||||||||
General and administrative (1) | 33,910 | 28,511 | 131,937 | 117,468 | ||||||||||||||||||
Amortization of acquired intangible assets | 6,691 | 4,859 | 26,486 | 20,303 | ||||||||||||||||||
Restructuring charges | 17,848 | - | 52,197 | 24,928 | ||||||||||||||||||
Total operating expenses | 204,310 | 179,851 | 793,178 | 755,455 | ||||||||||||||||||
Operating income | 49,006 | 57,605 | 127,324 | 128,096 | ||||||||||||||||||
Other income (expense), net | (599 | ) | (1,446 | ) | (1,090 | ) | (7,360 | ) | ||||||||||||||
Income before income taxes | 48,407 | 56,159 | 126,234 | 120,736 | ||||||||||||||||||
(Benefit) provision for income taxes | (8,059 | ) | 140,144 | (17,535 | ) | 156,134 | ||||||||||||||||
Net income (loss) | $ | 56,466 | $ | (83,985 | ) | $ | 143,769 | $ | (35,398 | ) | ||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||
Basic | $ | 0.47 | $ | (0.71 | ) | $ | 1.20 | $ | (0.30 | ) | ||||||||||||
Weighted average shares outstanding | 119,020 | 119,048 | 119,473 | 118,705 | ||||||||||||||||||
Diluted | $ | 0.47 | $ | (0.71 | ) | $ | 1.19 | $ | (0.30 | ) | ||||||||||||
Weighted average shares outstanding | 121,267 | 119,048 | 121,240 | 118,705 | ||||||||||||||||||
(1) | The amounts in the tables above include stock-based compensation as follows: | |||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Cost of license revenue | $ | 4 | $ | 6 | $ | 21 | $ | 22 | ||||||||||||||
Cost of service revenue | 1,730 | 1,447 | 6,134 | 5,682 | ||||||||||||||||||
Cost of support revenue | 941 | 735 | 3,324 | 3,234 | ||||||||||||||||||
Sales and marketing | 3,340 | 3,441 | 11,326 | 13,809 | ||||||||||||||||||
Research and development | 2,115 | 2,086 | 8,590 | 8,761 | ||||||||||||||||||
General and administrative | 5,777 | 4,185 | 19,392 | 19,797 | ||||||||||||||||||
Total stock-based compensation | $ | 13,907 | $ | 11,900 | $ | 48,787 | $ | 51,305 | ||||||||||||||
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NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED) |
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(in thousands, except per share data) |
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Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
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2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
GAAP revenue | $ | 344,845 | $ | 325,295 | $ | 1,293,541 | $ | 1,255,679 | |||||||||||||||
Fair value of acquired company's | |||||||||||||||||||||||
deferred maintenance revenue | 287 | - | 3,035 | 2,485 | |||||||||||||||||||
Non-GAAP revenue | $ | 345,132 | $ | 325,295 | $ | 1,296,576 | $ | 1,258,164 | |||||||||||||||
GAAP gross margin | $ | 253,316 | $ | 237,456 | $ | 920,502 | $ | 883,551 | |||||||||||||||
Fair value of acquired company's | |||||||||||||||||||||||
deferred maintenance revenue | 287 | - | 3,035 | 2,485 | |||||||||||||||||||
Stock-based compensation | 2,675 | 2,188 | 9,479 | 8,938 | |||||||||||||||||||
Amortization of acquired intangible assets | |||||||||||||||||||||||
included in cost of revenue | 4,721 | 3,852 | 18,586 | 15,819 | |||||||||||||||||||
Non-GAAP gross margin | $ | 260,999 | $ | 243,496 | $ | 951,602 | $ | 910,793 | |||||||||||||||
GAAP operating income | $ | 49,006 | $ | 57,605 | $ | 127,324 | $ | 128,096 | |||||||||||||||
Fair value of acquired company's | |||||||||||||||||||||||
deferred maintenance revenue | 287 | - | 3,035 | 2,485 | |||||||||||||||||||
Stock-based compensation | 13,907 | 11,900 | 48,787 | 51,305 | |||||||||||||||||||
Amortization of acquired intangible assets | |||||||||||||||||||||||
included in cost of revenue | 4,721 | 3,852 | 18,586 | 15,819 | |||||||||||||||||||
Amortization of acquired intangible assets | 6,691 | 4,859 | 26,486 | 20,303 | |||||||||||||||||||
Acquisition-related charges included in | |||||||||||||||||||||||
general and administrative expenses | 2,246 | 1,321 | 9,855 | 3,833 | |||||||||||||||||||
Restructuring charges | 17,848 | - | 52,197 | 24,928 | |||||||||||||||||||
Non-GAAP operating income (2) | $ | 94,706 | $ | 79,537 | $ | 286,270 | $ | 246,769 | |||||||||||||||
GAAP net income (loss) | $ | 56,466 | $ | (83,985 | ) | $ | 143,769 | $ | (35,398 | ) | |||||||||||||
Fair value of acquired company's | |||||||||||||||||||||||
deferred maintenance revenue | 287 | - | 3,035 | 2,485 | |||||||||||||||||||
Stock-based compensation | 13,907 | 11,900 | 48,787 | 51,305 | |||||||||||||||||||
Amortization of acquired intangible assets | |||||||||||||||||||||||
included in cost of revenue | 4,721 | 3,852 | 18,586 | 15,819 | |||||||||||||||||||
Amortization of acquired intangible assets | 6,691 | 4,859 | 26,486 | 20,303 | |||||||||||||||||||
Acquisition-related charges included in | |||||||||||||||||||||||
general and administrative expenses | 2,246 | 1,321 | 9,855 | 3,833 | |||||||||||||||||||
Restructuring charges | 17,848 | - | 52,197 | 24,928 | |||||||||||||||||||
Non-operating one-time (gains) losses (3) | (594 | ) | - | (5,717 | ) | 761 | |||||||||||||||||
Income tax adjustments (4) | (29,990 | ) | 122,255 | (77,834 | ) | 98,827 | |||||||||||||||||
Non-GAAP net income | $ | 71,582 | $ | 60,202 | $ | 219,164 | $ | 182,863 | |||||||||||||||
GAAP diluted earnings (loss) per share | $ | 0.47 | $ | (0.71 | ) | $ | 1.19 | $ | (0.30 | ) | |||||||||||||
Fair value of deferred maintenance revenue | - | - | 0.03 | 0.02 | |||||||||||||||||||
Stock-based compensation | 0.11 | 0.10 | 0.40 | 0.42 | |||||||||||||||||||
Amortization of acquired intangibles | 0.09 | 0.07 | 0.37 | 0.30 | |||||||||||||||||||
Acquisition-related charges | 0.02 | 0.01 | 0.08 | 0.03 | |||||||||||||||||||
Restructuring charges | 0.15 | - | 0.43 | 0.21 | |||||||||||||||||||
Non-operating one-time (gains) losses (3) | - | - | (0.05 | ) | 0.01 | ||||||||||||||||||
Income tax adjustments (4) | (0.25 | ) | 1.01 | (0.64 | ) | 0.82 | |||||||||||||||||
Non-GAAP diluted earnings per share | $ | 0.59 | $ | 0.50 | $ | 1.81 | $ | 1.51 | |||||||||||||||
GAAP diluted weighted average shares outstanding | 121,267 | 119,048 | 121,240 | 118,705 | |||||||||||||||||||
Dilutive effect of stock based compensation plans | - | 2,227 | - | 2,293 | |||||||||||||||||||
Non-GAAP diluted weighted average shares outstanding | 121,267 | 121,275 | 121,240 | 120,998 | |||||||||||||||||||
(2) | Operating margin impact of non-GAAP adjustments: | ||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
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2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
GAAP operating margin | 14.2 | % | 17.7 | % | 9.8 | % | 10.2 | % | |||||||||||||||
Fair value of deferred maintenance revenue | 0.1 | % | 0.0 | % | 0.2 | % | 0.2 | % | |||||||||||||||
Stock-based compensation | 4.0 | % | 3.7 | % | 3.8 | % | 4.1 | % | |||||||||||||||
Amortization of acquired intangibles | 3.3 | % | 2.7 | % | 3.5 | % | 2.9 | % | |||||||||||||||
Acquisition-related charges | 0.7 | % | 0.4 | % | 0.8 | % | 0.3 | % | |||||||||||||||
Restructuring charges | 5.2 | % | 0.0 | % | 4.0 | % | 2.0 | % | |||||||||||||||
Non-GAAP operating margin | 27.4 | % | 24.5 | % | 22.1 | % | 19.6 | % | |||||||||||||||
(3) |
The fourth quarter of 2013 includes a gain on investment of |
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(4) |
Reflects the tax effects of non-GAAP adjustments for the three and
twelve months ended |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
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2013 | 2012 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 241,913 | $ | 489,543 | ||||
Accounts receivable, net | 229,106 | 217,370 | ||||||
Property and equipment, net | 64,652 | 63,466 | ||||||
Goodwill and acquired intangible assets, net | 1,042,216 | 796,232 | ||||||
Other assets | 238,386 | 225,023 | ||||||
Total assets | $ | 1,816,273 | $ | 1,791,634 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Deferred revenue | $ | 336,913 | $ | 327,529 | ||||
Borrowings under credit facility | 258,125 | 370,000 | ||||||
Other liabilities | 294,755 | 296,846 | ||||||
Stockholders' equity | 926,480 | 797,259 | ||||||
Total liabilities and stockholders' equity | $ | 1,816,273 | $ | 1,791,634 | ||||
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||
Net income (loss) | $ | 56,466 | $ | (83,985 | ) | $ | 143,769 | $ | (35,398 | ) | ||||||||||||
Stock-based compensation | 13,907 | 11,900 | 48,787 | 51,305 | ||||||||||||||||||
Depreciation and amortization | 19,119 | 16,319 | 76,551 | 66,471 | ||||||||||||||||||
Accounts receivable | (18,566 | ) | (9,473 | ) | 17,308 | 32,309 | ||||||||||||||||
Accounts payable and accruals (5) | 14,732 | (1,281 | ) | 6,208 | (7,573 | ) | ||||||||||||||||
Deferred revenue | (36,224 | ) | (37,866 | ) | 6,727 | 14,362 | ||||||||||||||||
Income taxes | (14,576 | ) | 128,872 | (54,925 | ) | 100,761 | ||||||||||||||||
Excess tax benefits from stock-based awards | (163 | ) | (871 | ) | (334 | ) | (1,324 | ) | ||||||||||||||
Other | 8,966 | (2,684 | ) | (19,408 | ) | (2,938 | ) | |||||||||||||||
Net cash provided by operating activities (6) | 43,661 | 20,931 | 224,683 | 217,975 | ||||||||||||||||||
Capital expenditures | (10,200 | ) | (8,907 | ) | (29,328 | ) | (31,413 | ) | ||||||||||||||
Acquisitions of businesses, net of cash acquired (7) | (25,026 | ) | 950 | (245,843 | ) | (220 | ) | |||||||||||||||
Proceeds (payments) on debt, net | (10,000 | ) | 230,000 | (111,875 | ) | 170,000 | ||||||||||||||||
Proceeds from issuance of common stock | 1,472 | 5,895 | 4,884 | 21,210 | ||||||||||||||||||
Payments of withholding taxes in connection with | ||||||||||||||||||||||
vesting of stock-based awards | (22 | ) | (74 | ) | (14,996 | ) | (20,967 | ) | ||||||||||||||
Repurchases of common stock | (19,959 | ) | - | (74,871 | ) | (34,953 | ) | |||||||||||||||
Excess tax benefits from stock-based awards | 163 | 871 | 334 | 1,324 | ||||||||||||||||||
Other financing and investing activities | 721 | (1,951 | ) | 721 | (1,951 | ) | ||||||||||||||||
Foreign exchange impact on cash | 4,072 | 3,781 | (1,339 | ) | 660 | |||||||||||||||||
Net change in cash and cash equivalents | (15,118 | ) | 251,496 | (247,630 | ) | 321,665 | ||||||||||||||||
Cash and cash equivalents, beginning of period | 257,031 | 238,047 | 489,543 | 167,878 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 241,913 | $ | 489,543 | $ | 241,913 | $ | 489,543 | ||||||||||||||
(5) | Includes accounts payable, accrued expenses, and accrued compensation and benefits | |||||||||||||||||||||
(6) |
The three and twelve months ended |
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(7) |
We completed two acqusition in the fourth quarter for |
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PTC Investor Relations
jhillier@ptc.com
Source: PTC
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