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 2004 First Quarter Results
- Company Achieves Operating Profit, Excluding Restructuring Charges;
Net Loss Narrows 30% Sequentially -
NEEDHAM, Mass., January 21, 2004 - PTC (Nasdaq: PMTC), the product development
company(TM), today reported revenue totaling $156.8 million for the first
quarter ended January 3, 2004, compared with $172.0 million for the same period
last year. Revenue declined 4% sequentially, from $163.7 million in the fourth
quarter of fiscal 2003.
Net loss for the first quarter was $26.5 million, or $0.10 per share, compared
to a net loss of $11.4 million, or $0.04 per share, for the year-ago period. On
a sequential basis, net loss declined 30% from $38.0 million, or $0.14 per
share, in the fourth quarter of 2003. Operating loss was $21.1 million in the
first quarter of 2004, compared to $9.7 million in the year-ago period, and
$31.9 million in the fourth quarter of 2003. The first quarter net and operating
losses include restructuring charges of $21.6 million, while there were no
restructuring charges in the year-ago period, and there were $15.8 million of
restructuring charges in the fourth quarter of 2003. Cash and investments were
$190.1 million at the end of the first quarter.
"This quarter, we removed more than $20 million from our expense structure, and
reached an important milestone in our plan to return to profitability by
achieving an operating profit, excluding restructuring charges," said C. Richard
Harrison, president and chief executive officer. "We accomplished this earlier
than expected through strong execution of the cost reduction program we
announced in 2003. With about 80 percent of this reduction program complete, we
have gained significant operating leverage in our business."
Total design solutions revenue for the first quarter was $113.9 million, which
was down 4% from the fourth quarter. Design solutions license revenue was $29.8
million, compared with $33.8 million in the fourth quarter. Although there was a
decline in revenue from product upgrades and new high-end seats, PTC's low-end
seat sales continued to grow, as a result of improved channel performance.
Additionally, PTC's existing customers continue to show strong adoption of
Pro/ENGINEER Wildfire; an estimated 37% of Pro/ENGINEER customers have migrated
to the new version.
Total Windchill revenue in the first quarter was $42.9 million, which was down
6% from the fourth quarter. Windchill license revenue was $13.7 million,
compared with $16.1 million in the prior quarter. Windchill Link solutions
license revenue represented 36% of overall Windchill license revenue, due in
part to lower revenue from upgrades to the Flex 3C package that includes both
Pro/ENGINEER Wildfire and Windchill Link solutions.
"During the quarter, we won several important, competitive deals that underscore
PTC's leadership position in the PLM space," continued Harrison. "By
transforming our product and service offerings into an integral product
development system that is easier to use and implement, we have significantly
improved our ability to help customers create value through product development
initiatives."
In the first quarter, PTC received orders from leading manufacturing
organizations such as Airbus Industrie, Boeing, Bosch, Boston Scientific, Deere
& Co., Hino Motors, Itochu Techno-Science Corporation, Nypro Inc., the U.S.
Army, and Volkswagen. Additionally, orders from our reseller channel resulted in
$13.4 million in license revenue during the quarter, a 45% sequential increase.
Second Quarter 2004 Financial Outlook
PTC's revenue forecast for the second quarter of fiscal 2004 is between $150
million and $160 million. As a result of the continued execution of PTC's cost
reduction plan, the Company expects to incur a restructuring charge of
approximately $15 million in the second quarter. Net loss per share is expected
to be between $0.05 and $0.09.
The Company will provide detailed financial information and an outlook update on
its first quarter results conference call and live webcast on January 21, 2004
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 888-455-5419 (in the U.S.) or +1-630-395-0030 (international).
Please use passcode PTC. A replay of the call will be available until 5:00 p.m.
ET on January 26, 2004. To access the replay via webcast, please visit
www.ptc.com/for/investors.htm. To access the replay by phone, please dial
402-220-0205.
The Company's unaudited consolidated statements of operations, the unaudited
condensed consolidated balance sheets, and the unaudited condensed consolidated
statements of cash flows for the first 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 customers' understanding of the benefits of our PLM solutions,
including return on investment, ease of use, and value creation; the acceptance
of Pro/ENGINEER Wildfire and our Windchill Link Solutions, both as stand-alone
products and as an integral product development system; our ability to
efficiently manage our sales channels, including utilizing a diverse group of
geographically dispersed resellers by effectively coordinating joint activities
(including sales, marketing, implementation, support and customer service); the
effective execution of our cost reduction initiatives while minimizing
organization disruption and achieving revenue targets; 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 STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended
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January 3, December 28,
2004 2002
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Revenue:
License $ 43,517 $ 51,477
Service 113,293 120,490
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Total revenue 156,810 171,967
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Costs and expenses:
Cost of license revenue 2,127 2,645
Cost of service revenue 50,020 48,630
Sales and marketing 58,185 81,443
Research and development 29,579 31,900
General and administrative 14,960 15,523
Amortization of other
intangible assets 1,409 1,481
Restructuring charge 21,620 -
---------------------------------------------------
Total costs and expenses 177,900 181,622
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Operating loss (21,090) (9,655)
Other income (expense), net (490) (565)
---------------------------------------------------
Loss before income taxes (21,580) (10,220)
Provision for income taxes 4,957 1,170
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Net loss $ (26,537) $ (11,390)
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Loss per share:
Basic $ (0.10) $ (0.04)
Diluted $ (0.10) $ (0.04)
Weighted average shares
outstanding 266,422 262,584
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
January 3, September 30,
2004 2003
-----------------------------------------
ASSETS
Cash and investments $ 190,055 $ 205,312
Accounts receivable, net 138,529 140,151
Property and equipment, net 67,807 73,563
Goodwill and other intangibles, net 51,289 51,851
Other assets 116,002 106,813
-----------------------------------------
Total assets $ 563,682 $ 577,690
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenue $ 183,563 $ 173,015
Other liabilities 210,104 209,517
Stockholders' equity 170,015 195,158
-----------------------------------------
Total liabilities and stockholders'
equity $ 563,682 $ 577,690
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PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
-----------------------------------------
January 3, December 28,
2004 2002
-----------------------------------------
Cash flows from operating activities:
Net loss $ (26,537) $ (11,390)
Depreciation and amortization 9,562 10,835
Other 962 10,030
-----------------------------------------
Net operating cash flow (16,013) 9,475
Capital expenditures (2,896) (4,843)
Other investing and financing activities 341 21
Foreign exchange impact on cash 3,311 214
-----------------------------------------
Net change in cash and investments (15,257) 4,867
Cash and investments, beginning
of period 205,312 210,414
-----------------------------------------
Cash and investments, end of period $ 190,055 $ 215,281
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