PTC Reports First Quarter Fiscal Year 2006 Results; Company Delivers 14% Year-Over-Year Total Revenue Growth and 25% Year-over-Year License Revenue Growth.NEEDHAM Needham (nēd`əm), town (1990 pop. 27,557), Norfolk co., E Mass., a suburb of Boston; founded 1680, set off from Dedham and inc. 1711. Although largely residential, paper products, electronic equipment, software, and other items are manufactured there. , Mass. -- PTC (PTC, Needham, MA, www.ptc.com) Long a world leader in mechanical computer-aided design, manufacturing and engineering software, PTC, through acquisitions and reorganization, has transformed itself into a leading provider of Internet-based B2B solutions for discrete manufacturers. (Nasdaq: PMTC PMTC Prevention of Mother to Child Transmission (of HIV/AIDS) PMTC Pacific Missile Test Center PMTC Professional Multimedia Test Center ), the Product Development Company(TM), today reported revenue of $192.5 million for the first fiscal quarter ended December December: see month. 31, 2005, up 14% from $169.2 million for the same period last year. The increase was driven by a combination of continued organic growth and the addition of revenue from Arbortext Arbortext is a set of XML-based publishing software published by PTC. It was originally developed and distributed by the London based Advent Publishing Systems, Ltd. under the name Advent 3B2 , which PTC acquired in July July: see month. 2005. PTC license revenue grew 25% during the quarter, reflecting stronger-than-expected software sales in both large customer accounts and the small and medium business market. "We are off to a great start to 2006," said C. Richard Harrison There are several people named Richard Harrison.
Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in two of our most important strategic initiatives and largest growth opportunities. Our Windchill 8.0 launch last June June: see month. has already resulted in increased sales of Windchill PDMLink and Pro/INTRALINK. And the small and medium business market is accelerating its adoption of our Pro/ENGINEER  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . solutions." GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income for the first quarter was $7.5 million, or $0.03 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with GAAP net income of $19.2 million, or $0.07 per diluted share, in the year-ago period. PTC adopted FAS 123(R) in the fourth quarter of fiscal year 2005, and therefore the GAAP results from the year-ago period do not include the cost of stock-based compensation in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with FAS 123(R). Non-GAAP net income, which excludes stock-based compensation cost, amortization of acquisition-related intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , in-process research and development write-offs associated with acquisitions, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , if any, and the related tax effect of these items, as well the effect of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. tax items, if any, was $18.8 million for the first quarter, or $0.07 per diluted share, compared to $19.5 million in the year-ago period, or $0.07 per diluted share. We have provided a reconciliation between GAAP and non-GAAP results in the financial tables below. Cash and cash equivalents were $167.2 million at the end of the first quarter, down from $204.4 million at the end of the fourth quarter, primarily due to seasonal compensation payments, as well as two small acquisitions completed during the quarter. Revenue Metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. Total Desktop Solutions revenue for the first quarter was $126.4 million, up 3% from the same period last year. Desktop Solutions license revenue grew 11% from the year-ago period to $36.1 million. The Desktop Solutions license revenue growth reflected increased sales of entry-level en·try-lev·el adj. Appropriate for or accessible to one who is inexperienced in a field or new to a market: an entry-level job in advertising; an entry-level computer. packages of Pro/ENGINEER as well as a significant transaction with a customer in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .Total Enterprise Solutions revenue grew 43% in the first quarter to $66.1 million. Enterprise Solutions license revenue was $22.4 million, up 55% from the year-ago period. This exceptional performance reflects significantly accelerated revenue growth from our Windchill PDMLink and Pro/INTRALINK products, as well as additional revenue from products acquired from Arbortext. In the first quarter, PTC received orders from leading organizations, including Airbus, Atlas Copco Atlas Copco is a Swedish industrial company that was founded in 1873. It manufactures industrial tooling and equipment. The Atlas Copco Group, founded already in 1873, is a global industrial group of companies headquartered in Stockholm, Sweden. , Boeing (language) BOEING - An early system on the IBM 1130. [Listed in CACM 2(5):16, May 1959]. Company, Daihatsu Motor Co. Ltd., LG Electronics Inc., Nike Nike (nī`kē), in Greek religion and mythology, goddess of victory, daughter of Pallas and Styx. Often an attendant of Zeus or Athena, she also presided over all contests, athletic as well as military. Incorporated, Owens-Illinois Owens-Illinois is a Fortune 1000 company that specializes in plastics and glass containers. It is one of the world's leading manufacturers of packaging products, holding the position of largest manufacturer of glass containers in North America, South America, Australia, New , Schneider Electric Schneider Electric (Euronext: SCHN) is a French global company. It was founded in 1836 by two brothers, Joseph and Adolphe Schneider, who took over a troubled foundry at Le Creusot. Industries, Siemens AG Siemens AG German electrical-equipment manufacturer. The first Siemens company, Siemens & Halske, was founded in Berlin in 1847 to build telegraph installations. , Stryker Corporation, and Wuchang Wuchang (w  -chäng), former city, since 1950 part of Wuhan, E Hubei prov., China, on the right bank of the Chang River at the mouth of the Han. Shipyard. PTC's reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. channel delivered $39.3 million in
total revenue during the quarter, up 18% from the year-ago period."We have begun to see strong benefits from the execution of our strategy and the investments we made in our business in 2005," continued Harrison Harrison, town (1990 pop. 13,425), Hudson co., NE N.J., an industrial suburb on the Passaic River opposite Newark; inc. 1869. The town has several foundries. Its manufactures include plastics, paperboard, and metal products. . "We expect 2006 to be an exciting year for PTC as we focus on opportunities in our existing customer base, build momentum with Arbortext solutions, and work with our partner IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) to build a pipeline of business in China and targeted accounts around the world." Second Quarter and Fiscal Year 2006 Financial Outlook PTC's revenue forecast for the second quarter of fiscal 2006 is between $195 million and $200 million. On a GAAP basis, second quarter total costs and expenses are expected to be approximately $182 million to $187 million, and earnings per share are expected to be between $0.03 and $0.05. Total non-GAAP second quarter operating costs operating costs npl → gastos mpl operacionales are expected to be approximately $170 million to $175 million. The Company expects non-GAAP second quarter earnings per share to be between $0.07 and $0.09. These non-GAAP operating cost and earnings expectations exclude the following second quarter estimated expenses: --Approximately $10 million of expense related to stock-based compensation --Approximately $2 million of acquisition-related amortization expense For the fiscal year ending September September: see month. 30, 2006, PTC reiterates its previous guidance of revenue between $805 and $815 million. On a GAAP basis, fiscal year 2006 earnings per share are expected to be between $0.18 and $0.20. The Company expects non-GAAP earnings per share to be between $0.35 and $0.37 for the fiscal year. These non-GAAP earnings expectations exclude the following full-year estimated expenses: --Approximately $40 million of expense related to stock-based compensation --Approximately $9 million of acquisition-related amortization expense PTC announced today that its Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: a two-for-five reverse stock split effective February February: see month. 28, 2006. On a post-split basis, our earnings per share outlook is adjusted as follows: --Second quarter 2006 GAAP earnings per share of $0.06 to $0.14 --Second quarter 2006 non-GAAP earnings per share of $0.16 to $0.24 --Fiscal year 2006 GAAP earnings per share of $0.44 to $0.51 --Fiscal year 2006 non-GAAP earnings per share of $0.86 to $0.94 Important Information about Non-GAAP References References by the Company to non-GAAP operating costs and non-GAAP earnings per share refer to costs and expenses or earnings per share excluding stock-based compensation cost, amortization of acquisition-related intangible assets, in-process research and development write-offs associated with acquisitions, restructuring charges, and the related tax effect of these items, as well the effect of one-time tax items, if any. GAAP requires that these costs and charges be included in costs and expenses and accordingly used to determine operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss) and earnings per share. The Company's management uses non-GAAP operating costs, and associated non-GAAP net income (which is the basis for non-GAAP earnings per share) to make operational and investment decisions, and the Company believes that they are among several useful measures for an enhanced understanding of our operating results for a number of reasons. First, excluding the stock-based compensation cost from GAAP operating income enables management and investors to perform a meaningful comparison of the Company's operating results to prior periods. In these prior periods, the Company's GAAP financial results were not required to include expense associated with stock-based compensation, and now these expenses will be distributed among the functional expense line items in the GAAP presentation. Second, although the Company undertakes analyses to ensure that its stock-based compensation grants are in line with peer companies and do not unduly dilute di·lute v. To reduce a solution or mixture in concentration, quality, strength, or purity, as by adding water. adj. Thinned or weakened by diluting. shareholders, the Company allocates these grants and measures them at the corporate level. Management excludes their financial statement effect when planning or measuring the periodic financial performance of the Company's functional organizations since the grants are episodic episodic sporadic; occurring in episodes. e. falling a paroxymal disorder described in Cavalier King Charles spaniels in which affected dogs, starting at an early age, experience episodes of extensor rigidity, possibly brought on by stress. e. in nature and unrelated to our core operating metrics. Likewise, we believe that excluding items such as in-process R&D write-offs and amortization of intangible assets associated with acquisitions, or restructuring charges that are not directly attributable to our ongoing operations and that do not generally fluctuate in correlation with periodic performance, provides investors with information that helps to compare period-over-period operating performance by highlighting the effect of the acquisitions or restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities on our results of operations. In addition, the Company's management excludes the financial statement effect of these items in creating operating budgets Noun 1. operating budget - a budget for current expenses as distinct from financial transactions or permanent improvements budget items, operating cost, operating expense, overhead - the expense of maintaining property (e.g. for the Company's functional business units and in evaluating and compensating employees due to the fact that it is difficult to forecast these expenses. Lastly, we believe that providing non-GAAP earnings per share affords investors a view of earnings that may be more easily compared to peer companies and enables investors to consider the Company's earnings on both a GAAP and non-GAAP basis in periods when the Company is engaged in acquisition activities or undertaking non-recurring activities. The Company believes these non-GAAP measures will aid investors' overall understanding of the Company's results by providing a higher degree of transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. for certain expenses, and providing a level of disclosure that will help investors understand how the Company plans and measures its own business. However, non-GAAP net income (loss) should be construed neither as an alternative to GAAP net income (loss) or earnings (loss) per share as an indicator of our operating performance nor as a substitute for cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses as a measure of liquidity because the items excluded from the non-GAAP measures often have a material impact on the Company's results of operations. Therefore, management uses, and investors should use, non-GAAP measures in conjunction with our reported GAAP results. Earnings Call Webcast The Company will provide detailed financial information and an outlook update on its first quarter fiscal year 2006 results conference call and live webcast on January January: see month. 25, 2006 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 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 1-888-566-8560 (in the U.S.) or +1-517-623-4768 (international). Please use passcode PTC. A replay of the call will be available until 5:00 p.m. ET on January 30, 2006. To access the replay via webcast, please visit www.ptc.com/for/investors.htm. To access the replay by phone, please dial 203-369-3233. The Company's unaudited consolidated statements of operations, the unaudited condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated balance sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. , and the unaudited condensed consolidated statements of cash flows for the first quarter fiscal year 2006 are below. About PTC PTC (Nasdaq: PMTC) provides leading product lifecycle Product lifecycle or product life cycle is the course of a product's sales and profits over time. The five stages of each product lifecycle are product development, introduction, growth, maturity and decline. management (PLM (Product Life cycle Management) A comprehensive information system that coordinates all aspects of a product from initial concept to its eventual retirement. Sometimes called the "digital backbone" of a product, it includes the requirements phase, analysis and design ), content management and dynamic publishing solutions to more than 40,000 companies worldwide. PTC customers include the world's most innovative companies in manufacturing, publishing, services, government and life sciences industries. PTC is included in the S&P 500 and Russell 2000 indices. For more information on PTC, please visit http://www.ptc.com. Statements in this news release that are not historical facts, including statements about our confidence and strategies and our expectations about revenue, results of operations, and market acceptance of our products, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties that could cause actual results to differ materially from those projected. Those risks and uncertainties include the following: the PLM market is relatively new and may not grow at the rate we expect; we may be unable to capture market share by differentiating our product and service offerings from those of our competitors; the growth in sales of Windchill PDMLink and Pro/INTRALINK that we have experienced following our release of Windchill 8.0 may not continue at the same rate or may decline in the future; competition within the small and medium business market is intense and we may be unable to sustain the growing adoption of our Pro/ENGINEER solutions; expanding our technology footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. and augmenting our product lines may not generate expected additional sales or revenues; we may be unable to successfully complete the acquisitions of strategic businesses and any businesses we have acquired or acquire may not generate the revenues and earnings we expected; we may be unable to successfully develop and integrate the technologies and the businesses we have acquired or may acquire in order to offer integrated solutions that complement PTC's product development system; we may be unable to undertake our strategic initiatives while controlling increases in our operating cost structure; the IT spending environment may not continue to improve or may not improve at the rate we expect; as well as other risks and uncertainties detailed from time to time in reports we file with the Securities and Exchange Commission, including our most recent report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . PTC, The Product Development Company, Pro/ENGINEER, Wildfire, Windchill, Pro/INTRALINK, Arbortext, and all PTC product names and logos are trademarks or registered trademarks of Parametric Technology Corporation |Parametric Technology Corporation]] Parametric Technology Corporation (PTC)(NASDAQ: PMTC) provides Product Lifecycle Management (PLM) engineering CAD/CAM software and content management and dynamic publishing solutions to more than 40,000 companies worldwide. or its subsidiaries in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. 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 OPERATIONS
(in thousands, except per share data)
Three Months
Ended
-----------------
December January
31, 1,
2005 2005
-------- --------
Revenue:
License $58,527 $46,929
Service 133,991 122,261
-------- --------
Total revenue 192,518 169,190
-------- --------
Costs and expenses:
Cost of license revenue(1) 3,303 1,497
Cost of service revenue(1) 58,722 46,160
Sales and marketing(1) 63,645 56,045
Research and development(1) 34,583 26,467
General and administrative(1) 19,629 15,587
Amortization of acquired intangible assets 1,358 222
-------- --------
Total costs and expenses 181,240 145,978
-------- --------
Operating income 11,278 23,212
Other income (expense), net 1,099 (487)
-------- --------
Income before income taxes 12,377 22,725
Provision for income taxes 4,861 3,566
-------- --------
Net income $7,516 $19,159
======== ========
Earnings per share - Basic and Diluted $0.03 $0.07
Weighted average shares outstanding - Basic 273,713 270,036
Weighted average shares outstanding - Diluted 281,677 279,194
(1) Effective July 3, 2005, PTC adopted FAS 123(R), "Share-Based
Payment". Accordingly, for the three months ended December 31,
2005, stock-based compensation was accounted under FAS 123(R),
while for the three months ended January 1, 2005, stock-based
compensation was accounted under APB No. 25, "Accounting for Stock
Issued to Employees." The amounts in the tables above include
stock-based compensation as follows:
Three Months
Ended
---------------
December January
31, 1,
2005 2005
---------------
Cost of license revenue $40 $-
Cost of service revenue 1,947 -
Sales and marketing 2,315 -
Research and development 2,105 109
General and administrative 3,257 -
---------------
Total stock-based compensation $9,664 $109
===============
PARAMETRIC TECHNOLOGY CORPORATION
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)
(in thousands, except per share data)
Three Months
Ended
----------------
December January
31, 1,
2005 2005
----------------
GAAP net income $7,516 $19,159
Stock-based compensation 9,664 109
Amortization of acquired intangible assets
included in cost of license revenue 772 -
Amortization of acquired intangible assets 1,358 222
Provision for income taxes (2) (558) -
----------------
Non-GAAP net income $18,752 $19,490
================
GAAP diluted earnings per share $0.03 $0.07
Stock-based compensation 0.03 -
All other items identified above 0.01 -
----------------
Non-GAAP diluted earnings per share $0.07 $0.07
================
Weighted average shares used in calculating
non-GAAP diluted net earnings per share (3) 283,939 279,194
(2) The tax effect of non-GAAP adjustments is $0.6 million and $0.0
million for the first quarter of 2006 and 2005, respectively.
(3) Weighted average shares used in calculating non-GAAP diluted
earnings per share for the first quarter of 2006 includes 2.3
million additional shares related to outstanding stock options
assumed to be repurchased under SFAS 123(R) that would not be
assumed to be repurchased under APB No. 25.
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December September
31, 30,
2005 2005
------------------
ASSETS
Cash and cash equivalents $167,152 $204,423
Accounts receivable, net 155,113 147,497
Property and equipment, net 50,543 52,551
Goodwill and acquired intangible assets, net 267,993 258,838
Other assets 131,257 123,314
------------------
Total assets $772,058 $786,623
==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenue $196,095 $200,467
Other liabilities 234,461 262,312
Stockholders' equity 341,502 323,844
------------------
Total liabilities and stockholders' equity $772,058 $786,623
==================
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months
Ended
------------------
December January
31, 1,
2005 2005
------------------
Cash flows from operating activities:
Net income $7,516 $19,159
Stock-based compensation 9,664 109
Depreciation and amortization 8,061 6,364
Other (46,810) 3,052
------------------
Net cash (used in) provided by operating activities
(4) (21,569) 28,684
Capital expenditures (3,350) (2,804)
Acquisition of businesses (10,675) -
Other investing and financing activities 738 3,045
Foreign exchange impact on cash (2,415) 10,252
------------------
Net increase (decrease) in cash and cash
equivalents (37,271) 39,177
Cash and cash equivalents, beginning of period 204,423 294,887
------------------
Cash and cash equivalents, end of period $167,152 $334,064
==================
(4) Net cash provided by operating activities for the three months
ended January 1, 2005 includes a tax refund received during the
quarter of $39.5 million. This refund was included in income taxes
receivable on the Consolidated Balance Sheet at September 30,
2004.
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