PTC Announces Solid Q4 EPS Results, Initiates Q1 and FY'13 Targets
Highlights
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Q4 Results:
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Non-GAAP revenue of
$325 million , down 5% year over year (flat on a constant currency basis) -
Non-GAAP EPS of
$0.50 , up 6% year over year (up 13% on a constant currency basis) - Non-GAAP operating margin of 24.5%, up 180 basis points year over year (up 220 basis points on a constant currency basis)
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GAAP operating margin of 17.7% and GAAP EPS of
$(0.71) , in part reflecting a$124 million non-cash charge to the income tax provision to establish a valuation allowance against deferred tax assets in the U.S.
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Non-GAAP revenue of
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FY'12 Results:
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Non-GAAP revenue of
$1,258 million , up 8% year over year (up 10% on a constant currency basis) -
Non-GAAP EPS of
$1.51 , up 20% year over year (up 24% on a constant currency basis) - Non-GAAP operating margin of 19.6%, up 190 basis points year over year (up 210 basis points on a constant currency basis)
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GAAP revenue of
$1,256 million , GAAP EPS of$(0.30) and GAAP operating margin of 10.2%
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Non-GAAP revenue of
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Q1 Guidance:
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Non-GAAP revenue of
$315 to $325 million and non-GAAP EPS of$0.30 to$0.35 -
License revenue of
$75 to $85 million -
GAAP revenue of
$313 to $323 million and GAAP EPS of$0.36 to$0.40 , including$16 million of restructuring charges associated with cost actions initiated in Q1'13 -
Assumes
$1.30 USD / EURO
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Non-GAAP revenue of
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FY'13 Targets:
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Non-GAAP revenue of
$1,360 to$1,380 million ; non-GAAP EPS of$1.70 to $1.80 - Non-GAAP operating margin of approximately 21.5%
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GAAP revenue of approximately
$1,356 to$1,376 million and GAAP EPS of$1.10 to $1.20 ; GAAP operating margin of approximately 12.5% -
Assumes
$1.30 USD / EURO
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Non-GAAP revenue of
The Q4 non-GAAP operating margin and non-GAAP EPS results exclude
Results Commentary
Heppelmann added, "Our PLM market momentum was evident in Q4 as we
delivered record quarterly revenue in the
"We had 35 large deals (recognized license + services revenue of more
than
"Given our mix of revenue and expenses, historical profitability by
region, and revenue and profitability outlook for FY'13, we are
establishing a valuation allowance against our deferred tax assets in
the U.S. This resulted in a non-cash
Outlook Commentary
"We continue to be excited about our long-term growth opportunity based on the strength of our pipeline, our increased sales capacity, market acceptance of our products in core markets, as well as the significant interest we are seeing in our broader solution areas. Given the slowdown in the global manufacturing industry and uncertainty about the near-term economy, we believe it is prudent to provide a guidance range that reflects moderated revenue growth for FY'13," said Heppelmann. "Importantly, we remain committed to driving operating margin expansion and achieving our goal of 25% to 27% non-GAAP operating margin in FY'15."
Glidden added, "For Q1'13, we are providing guidance of
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 23%, a GAAP tax rate of
5% and 122 million diluted shares outstanding. The FY'13 non-GAAP
targets exclude approximately
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.
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Call Leader: Passcode: PTC |
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Webcast: | |||
Replay: |
The audio replay of this event will be archived for public replay
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FY'13 Investor Day
Management will host its FY'13 Investor Day in
What: | PTC FY'13 Investor Day | ||
When: |
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Webcast: | |||
Replay: |
The audio replay of this event will be archived for public replay
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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, 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 (www.ptc.com)
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 PLM and CAD and related solutions, organizations in the Industrial, High-Tech, Aerospace/Defense, Automotive, Retail/Consumer and Life Sciences industries are able to support key business objectives such as reducing costs and shortening lead times while creating innovative products that meet customer needs and comply with industry regulations.
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UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
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September 30, | ||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Revenue: | |||||||||||||||||||||
License | $ | 100,698 | $ | 111,002 | $ | 348,394 | $ | 342,121 | |||||||||||||
Service | 224,597 | 228,423 | 907,285 | 824,828 | |||||||||||||||||
Total revenue | 325,295 | 339,425 | 1,255,679 | 1,166,949 | |||||||||||||||||
Cost of revenue: | |||||||||||||||||||||
Cost of license revenue (1) | 7,478 | 8,663 | 30,595 | 28,792 | |||||||||||||||||
Cost of service revenue (1) | 80,361 | 89,864 | 341,533 | 327,976 | |||||||||||||||||
Total cost of revenue | 87,839 | 98,527 | 372,128 | 356,768 | |||||||||||||||||
Gross margin | 237,456 | 240,898 | 883,551 | 810,181 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Sales and marketing (1) | 94,350 | 98,261 | 377,796 | 353,051 | |||||||||||||||||
Research and development (1) | 52,131 | 55,730 | 214,960 | 211,406 | |||||||||||||||||
General and administrative (1) | 28,511 | 30,213 | 117,468 | 110,291 | |||||||||||||||||
Amortization of acquired intangible assets | 4,859 | 5,446 | 20,303 | 18,319 | |||||||||||||||||
Restructuring charges | - | - | 24,928 | - | |||||||||||||||||
Total operating expenses | 179,851 | 189,650 | 755,455 | 693,067 | |||||||||||||||||
Operating income | 57,605 | 51,248 | 128,096 | 117,114 | |||||||||||||||||
Other expense, net | (1,446 | ) | (3,587 | ) | (7,360 | ) | (12,566 | ) | |||||||||||||
Income before income taxes | 56,159 | 47,661 | 120,736 | 104,548 | |||||||||||||||||
Provision for income taxes | 140,144 | 10,040 | 156,134 | 19,124 | |||||||||||||||||
Net income (loss) | $ | (83,985 | ) | $ | 37,621 | $ | (35,398 | ) | $ | 85,424 | |||||||||||
Earnings (loss) per share: | |||||||||||||||||||||
Basic | $ | (0.71 | ) | $ | 0.32 | $ | (0.30 | ) | $ | 0.73 | |||||||||||
Weighted average shares outstanding | 119,048 | 117,095 | 118,705 | 117,579 | |||||||||||||||||
Diluted | $ | (0.71 | ) | $ | 0.31 | $ | (0.30 | ) | $ | 0.71 | |||||||||||
Weighted average shares outstanding | 119,048 | 120,091 | 118,705 | 120,974 | |||||||||||||||||
(1)The amounts in the tables above include stock-based compensation as follows: | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
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September 30, | ||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Cost of license revenue | $ | 6 | $ | 5 | $ | 22 | $ | 15 | |||||||||||||
Cost of service revenue | 2,182 | 2,155 | 8,916 | 7,732 | |||||||||||||||||
Sales and marketing | 3,441 | 3,587 | 13,809 | 11,428 | |||||||||||||||||
Research and development | 2,086 | 2,395 | 8,761 | 8,547 | |||||||||||||||||
General and administrative | 4,185 | 4,802 | 19,797 | 17,680 | |||||||||||||||||
Total stock-based compensation | $ | 11,900 | $ | 12,944 | $ | 51,305 | $ | 45,402 | |||||||||||||
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NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED) | |||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
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September 30, | ||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
GAAP revenue | $ | 325,295 | $ | 339,425 | $ | 1,255,679 | $ | 1,166,949 | |||||||||||||
Fair value of acquired MKS deferred maintenance revenue |
- | 1,913 | 2,485 | 2,606 | |||||||||||||||||
Non-GAAP revenue | $ | 325,295 | $ | 341,338 | $ | 1,258,164 | $ | 1,169,555 | |||||||||||||
GAAP gross margin | $ | 237,456 | $ | 240,898 | $ | 883,551 | $ | 810,181 | |||||||||||||
Fair value of acquired MKS deferred maintenance revenue |
- | 1,913 | 2,485 | 2,606 | |||||||||||||||||
Stock-based compensation | 2,188 | 2,160 | 8,938 | 7,747 | |||||||||||||||||
Amortization of acquired intangible assets included in cost of license revenue |
3,852 | 4,796 | 15,819 | 15,393 | |||||||||||||||||
Non-GAAP gross margin | $ | 243,496 | $ | 249,767 | $ | 910,793 | $ | 835,927 | |||||||||||||
GAAP operating income | $ | 57,605 | $ | 51,248 | $ | 128,096 | $ | 117,114 | |||||||||||||
Fair value of acquired MKS deferred maintenance revenue |
- | 1,913 | 2,485 | 2,606 | |||||||||||||||||
Stock-based compensation | 11,900 | 12,944 | 51,305 | 45,402 | |||||||||||||||||
Amortization of acquired intangible assets included in cost of license revenue |
3,852 | 4,796 | 15,819 | 15,393 | |||||||||||||||||
Amortization of acquired intangible assets | 4,859 | 5,446 | 20,303 | 18,319 | |||||||||||||||||
Acquisition-related charges included in general and administrative expenses |
1,321 | 1,112 | 3,833 | 7,761 | |||||||||||||||||
Restructuring charges | - | - | 24,928 | - | |||||||||||||||||
Non-GAAP operating income (2) | $ | 79,537 | $ | 77,459 | $ | 246,769 | $ | 206,595 | |||||||||||||
GAAP net income (loss) | $ | (83,985 | ) | $ | 37,621 | $ | (35,398 | ) | $ | 85,424 | |||||||||||
Fair value of acquired MKS deferred maintenance revenue |
- | 1,913 | 2,485 | 2,606 | |||||||||||||||||
Stock-based compensation | 11,900 | 12,944 | 51,305 | 45,402 | |||||||||||||||||
Amortization of acquired intangible assets included in cost of license revenue |
3,852 | 4,796 | 15,819 | 15,393 | |||||||||||||||||
Amortization of acquired intangible assets | 4,859 | 5,446 | 20,303 | 18,319 | |||||||||||||||||
Acquisition-related charges included in general and administrative expenses |
1,321 | 1,112 | 3,833 | 7,761 | |||||||||||||||||
Restructuring charges | - | - | 24,928 | - | |||||||||||||||||
Non-operating foreign currency transaction losses (3) | - | - | 761 | 5,107 | |||||||||||||||||
Income tax adjustments (4) | 122,255 | (7,662 | ) | 98,827 | (27,846 | ) | |||||||||||||||
Non-GAAP net income | $ | 60,202 | $ | 56,170 | $ | 182,863 | $ | 152,166 | |||||||||||||
GAAP diluted earnings (loss) per share | $ | (0.71 | ) | $ | 0.31 | $ | (0.30 | ) | $ | 0.71 | |||||||||||
Stock-based compensation | 0.10 | 0.11 | 0.42 | 0.38 | |||||||||||||||||
Amortization of acquired intangibles | 0.07 | 0.09 | 0.30 | 0.28 | |||||||||||||||||
Acquisition-related charge | 0.01 | 0.01 | 0.03 | 0.06 | |||||||||||||||||
Restructuring charges | - | - | 0.21 | - | |||||||||||||||||
Income tax adjustments | 1.01 | (0.06 | ) | 0.82 | (0.23 | ) | |||||||||||||||
Non-operating foreign currency transaction losses | - | - | 0.01 | 0.04 | |||||||||||||||||
All other items identified above | - | 0.01 | 0.02 | 0.02 | |||||||||||||||||
Non-GAAP diluted earnings per share | $ | 0.50 | $ | 0.47 | $ | 1.51 | $ | 1.26 | |||||||||||||
GAAP diluted weighted average shares outstanding | 119,048 | 120,091 | 118,705 | 120,974 | |||||||||||||||||
Dilutive effect of stock based compensation plans | 2,227 | - | 2,293 | - | |||||||||||||||||
Non-GAAP diluted weighted average shares outstanding | 121,275 | 120,091 | 120,998 | 120,974 | |||||||||||||||||
(2)Operating margin impact of non-GAAP adjustments: | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
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2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
GAAP operating margin | 17.7 | % | 15.1 | % | 10.2 | % | 10.0 | % | |||||||||||||
Fair value of deferred maintenance revenue | 0.0 | % | 0.6 | % | 0.2 | % | 0.2 | % | |||||||||||||
Stock-based compensation | 3.7 | % | 3.8 | % | 4.1 | % | 3.9 | % | |||||||||||||
Amortization of acquired intangibles | 2.7 | % | 3.0 | % | 2.9 | % | 2.9 | % | |||||||||||||
Acquisition-related charges | 0.4 | % | 0.3 | % | 0.3 | % | 0.7 | % | |||||||||||||
Restructuring charges | 0.0 | % | 0.0 | % | 2.0 | % | 0.0 | % | |||||||||||||
Non-GAAP operating margin | 24.5 | % | 22.7 | % | 19.6 | % | 17.7 | % |
(3) |
In the first quarter of 2012 we recorded |
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(4) |
Reflects the tax effects of non-GAAP adjustments for the fourth
quarter and full year of 2012 and 2011, 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,
net, of |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(in thousands) | |||||||||
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September 30, | ||||||||
2012 | 2011 | ||||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | 489,543 | $ | 167,878 | |||||
Accounts receivable, net | 217,370 | 230,220 | |||||||
Property and equipment, net | 63,466 | 62,569 | |||||||
Goodwill and acquired intangible assets, net | 796,232 | 835,411 | |||||||
Other assets | 209,765 | 333,604 | |||||||
Total assets | $ | 1,776,376 | $ | 1,629,682 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Deferred revenue | $ | 327,529 | $ | 294,324 | |||||
Borrowings under revolving credit facility | 370,000 | 200,000 | |||||||
Other liabilities | 281,588 | 312,668 | |||||||
Stockholders' equity | 797,259 | 822,690 | |||||||
Total liabilities and stockholders' equity | $ | 1,776,376 | $ | 1,629,682 | |||||
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
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September 30, | ||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net income (loss) | $ | (83,985 | ) | $ | 37,621 | $ | (35,398 | ) | $ | 85,424 | |||||||||||
Stock-based compensation | 11,900 | 12,944 | 51,305 | 45,402 | |||||||||||||||||
Depreciation and amortization | 16,319 | 17,847 | 66,471 | 62,394 | |||||||||||||||||
Accounts receivable | (9,473 | ) | (50,393 | ) | 32,309 | (32,334 | ) | ||||||||||||||
Accounts payable and accruals (5) | (1,390 | ) | 7,908 | (7,682 | ) | (3,846 | ) | ||||||||||||||
Deferred revenue | (37,866 | ) | (28,630 | ) | 14,362 | 8,195 | |||||||||||||||
Litigation settlement | - | - | - | (52,129 | ) | ||||||||||||||||
Income taxes | 129,962 | 1,723 | 101,851 | (16,132 | ) | ||||||||||||||||
Excess tax benefits from stock-based awards | (1,644 | ) | (3,091 | ) | (2,097 | ) | (5,398 | ) | |||||||||||||
Other | (3,665 | ) | 4,098 | (3,919 | ) | (12,878 | ) | ||||||||||||||
Net cash provided by operating activities (6) | 20,158 | 27 | 217,202 | 78,698 | |||||||||||||||||
Capital expenditures | (8,907 | ) | (9,522 | ) | (31,413 | ) | (27,817 | ) | |||||||||||||
Acquisitions of businesses, net of cash acquired (7) | 950 | (14,873 | ) | (220 | ) | (280,026 | ) | ||||||||||||||
Proceeds (payments) on debt, net (8) | 230,000 | (50,000 | ) | 170,000 | 200,000 | ||||||||||||||||
Proceeds from issuance of common stock | 5,895 | 2,495 | 21,210 | 24,756 | |||||||||||||||||
Payments of withholding taxes in connection with vesting of stock-based awards |
(74 | ) | (468 | ) | (20,967 | ) | (22,520 | ) | |||||||||||||
Repurchases of common stock | - | (14,974 | ) | (34,953 | ) | (54,921 | ) | ||||||||||||||
Excess tax benefits from stock-based awards | 1,644 | 3,091 | 2,097 | 5,398 | |||||||||||||||||
Other investing and financing activities | (1,951 | ) | (2,293 | ) | (1,951 | ) | (2,293 | ) | |||||||||||||
Foreign exchange impact on cash | 3,781 | (6,356 | ) | 660 | 6,350 | ||||||||||||||||
Net change in cash and cash equivalents | 251,496 | (92,873 | ) | 321,665 | (72,375 | ) | |||||||||||||||
Cash and cash equivalents, beginning of period | 238,047 | 260,751 | 167,878 | 240,253 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 489,543 | $ | 167,878 | $ | 489,543 | $ | 167,878 |
(5) |
Includes accounts payable, accrued expenses, and accrued compensation and benefits. |
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(6) |
The cash flow from operations for the three months and year ended
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(7) |
We acquired MKS on |
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(8) |
We borrowed |
Investor Contact:
PTC Investor Relations
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or
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Contact:
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Source: PTC
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