PTC Reports Fiscal 2003 Third Quarter Results
Page 2
Exhibit 99.1
Investor Relations Contact: Public Relations Contact:
Meredith Mendola Joe Gavaghan
781-370-6151 781-370-5074
mmendola@ptc.com jgavaghan@ptc.com
PTC Reports Fiscal 2003 Third Quarter Results
NEEDHAM, Mass., July 16, 2003 - PTC (Nasdaq: PMTC), the product development
company(TM), today reported revenue totaling $165.2 million for the third
quarter ended June 28, 2003, compared with $178.1 million for the same period
last year. Net loss for the third quarter was $33.8 million, or $0.13 per share,
compared to net loss of $27.3 million, or $0.10 per share, for the year-ago
period. During the third quarter of 2003, PTC recorded restructuring and other
charges of $15.1 million, compared to restructuring and other charges of $18.4
million in the year-ago period. Cash and investments were $208 million at the
end of the third quarter.
Total design solutions revenue for the third quarter was $123.6 million, which
was down 4% sequentially. Design solutions license revenue was $38.0 million,
down 5% sequentially. However, the Pro/ENGINEER component of this license
revenue improved sequentially and year over year, driven by Pro/ENGINEER
Wildfire.
Total Windchill revenue in the third quarter was $41.6 million, down 2%
sequentially. Windchill license revenue was $10.6 million, compared with $15.2
million in the second quarter. This is primarily attributable to diminished
transaction size in the quarter, as the number of transactions remained stable
sequentially. Additionally, PTC sold Windchill software to a record 97 new
customers this quarter, bringing the total Windchill customer count to 1,005.
Windchill Link solutions license revenue represented 54% of overall Windchill
license revenue.
"Although we continue to face revenue challenges, customer adoption of our new
product offerings confirms that our unique approach to product lifecycle
management drives value for our customers," said C. Richard Harrison, president
and chief executive officer of PTC. "We are focused on helping manufacturing
companies improve their competitive positions by putting product development at
the heart of their businesses. Our broad and well-architected product offering,
together with our service expertise, is well-suited to this important process.
"Customers are validating the benefits of using a fully integrated product
development system," continued Harrison. "This is evidenced by the significant
growth in sales of our Flex 3C package that combines PTC's solutions for digital
product creation, collaboration and control. These customers include: Asahi
Matsushita Electric, Concurrent Technologies Corporation, Harman Becker
Automotive Systems, Harris Corporation, Hewlett Packard Company, Maxtor, Reed
Tool Company, Smith International and Xerox Corporation."
"During the quarter, we began the implementation of the cost reduction plan
announced in April," said Neil Moses, PTC's new executive vice president and
chief financial officer. "The objective of this plan is to lower PTC's quarterly
operating cost structure from $180 million to $160 million entering fiscal 2004.
In addition, we have recently committed to reducing our quarterly operating cost
structure further, to $150 million by the end of fiscal 2004. Our goal is to be
profitable in 2004, while maintaining our dedication to product quality and
customer satisfaction."
Moses concluded, "For the fourth quarter of 2003, we expect revenue to be in the
range of $160 million to $170 million and net loss per share to be in the range
of $0.10 to $0.14. This guidance includes a restructuring charge of
approximately $15 million for the quarter related to the cost reduction
initiatives outlined above."
The Company will provide detailed financial information and an outlook update on
its third quarter results conference call and live webcast on July 16, 2003 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 888-829-8668 (in the U.S.) or +1-630-395-0019 (international). Please use
passcode PTC. A replay of the call will be available until 5:00 p.m. ET on July
21, 2003. To access the replay via webcast, please visit
www.ptc.com/for/investors.htm. To access the replay by phone, please dial
402-530-7895.
The Company's unaudited consolidated statement of operations, the unaudited
condensed consolidated balance sheet, and the unaudited condensed consolidated
statement of cash flows for the third quarter are attached.
About PTC
PTC (Nasdaq: PMTC) develops, markets, and supports software solutions that help
manufacturers win with superior products. PTC is the world's largest software
company with a total commitment to product development and product lifecycle
management (PLM). The Company services more than 35,000 customers worldwide.
Further information on PTC is available at http://www.ptc.com.
Except for the historical information contained herein, matters discussed in
this news release may constitute forward-looking statements that involve risks
and uncertainties that could cause actual results to differ materially from
those projected. These include: the growth of the PLM market and our ability to
facilitate our customer's understanding of the benefits of our PLM solutions,
including return on investment and value creation; the acceptance of
Pro/ENGINEER Wildfire and our Windchill Link Solutions, both as stand-alone
products and as an integrated product development system; the effective
execution of our cost reduction initiatives while minimizing organization
disruption; and the effects of a weak IT spending environment which has impacted
the overall demand for software and related services; as well as other risks and
uncertainties detailed from time to time in reports filed by PTC with the
Securities and Exchange Commission, including the Company's most recent reports
on Form 10-K and 10-Q.
PTC, the product development company, Pro/ENGINEER, Wildfire, Windchill, and all
PTC product names and logos are trademarks or registered trademarks of
Parametric Technology Corporation or its subsidiaries in the United States 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 STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
-----------------------------------------------------------
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
-----------------------------------------------------------
Restated Restated
Note 1 Note 1
Revenue:
License $ 48,621 $ 56,215 $ 155,382 $ 177,565
Service 116,623 121,850 352,855 375,832
-----------------------------------------------------------
Total revenue 165,244 178,065 508,237 553,397
-----------------------------------------------------------
Costs and expenses:
Cost of
license revenue 2,875 4,197 7,498 12,608
Cost of service
revenue 52,420 48,615 151,744 152,081
Sales and
marketing 72,329 83,321 231,401 252,420
Research and
development 31,880 33,464 95,722 103,725
General and
administrative 17,931 17,302 50,108 49,505
Amortization of
goodwill and other
intangible assets 1,459 8,820 4,400 27,019
Restructuring and
other charges 15,134 18,392 15,134 24,481
-----------------------------------------------------------
Total costs and
expenses 194,028 214,111 556,007 621,839
-----------------------------------------------------------
Operating loss (28,784) (36,046) (47,770) (68,442)
Other expense,
net (10) (1,230) (1,462) (1,927)
-----------------------------------------------------------
Loss before income
taxes (28,794) (37,276) (49,232) (70,369)
Provision for
(benefit from)
income taxes 4,968 (9,936) 11,089 (18,521)
-----------------------------------------------------------
Net loss $(33,762) $(27,340) $ (60,321) $ (51,848)
===========================================================
Loss per share:
Basic $ (0.13) $ (0.10) $ (0.23) $ (0.20)
Diluted $ (0.13) $ (0.10) $ (0.23) $ (0.20)
Weighted
average shares
outstanding 264,487 260,825 263,625 260,581
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 28, September 30,
2003 2002
--------------------------------------------
ASSETS
Cash and investments $ 208,262 $ 210,414
Accounts receivable, net 162,146 157,522
Property and equipment, net 78,808 86,535
Goodwill and other intangibles, net 51,524 54,303
Other assets 112,328 166,185
--------------------------------------------
Total assets $ 613,068 $ 674,959
============================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Total liabilities $ 189,445 $ 187,728
Deferred revenue 190,122 197,303
Stockholders' equity 233,501 289,928
--------------------------------------------
Total liabilities and
stockholders' equity $ 613,068 $ 674,959
============================================
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Three Months Ended Nine Months Ended
------------------------------------------------------------
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
------------------------------------------------------------
Restated Restated
Note 1 Note 1
Cash flows from
operating activities:
Net loss $ (33,762) $ (27,340) $ (60,321) $ (51,848)
Depreciation
and amortization 9,931 18,045 31,166 54,688
Changes in assets
and liabilities 34,046 17,661 45,278 (25,398)
------------------------------------------------------------
Net cash provided
(used) by operating
activities 10,215 8,366 16,123 (22,558)
Capital expenditures (5,815) (7,112) (19,100) (27,365)
Other investing and
financing activities (1,122) 4 2,783 (79)
Foreign exchange and
other (553) 6,342 (1,958) 4,759
------------------------------------------------------------
Net change in
cash and investments 2,725 7,600 (2,152) (45,243)
Cash and investments,
beginning of period 205,537 196,255 210,414 249,098
------------------------------------------------------------
Cash and investments,
end of period $ 208,262 $ 203,855 $ 208,262 $ 203,855
============================================================
Note 1: These unaudited consolidated financial statements for the three and nine
months ended June 29, 2002 reflect the restatement of maintenance revenues as
previously reported in our 2002 Annual Report on Form 10-K filed with the
Securities and Exchange Commission on January 28, 2003.