SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended: July 1, 1995 Commission File Number: 0-18059
------------ ----------
PARAMETRIC TECHNOLOGY CORPORATION
---------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2866152
-------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
128 Technology Drive, Waltham, MA 02154
----------------------------------------
(Address of principal executive offices, including zip code)
(617) 398-5000
----------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
-------- --------
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
Common Stock, par value $.01 per share 58,209,126
-------------------------------------- -------------------------------
Class Outstanding at July 1, 1995
Total number of pages: 77
Exhibit Index appears on page 13
1
PARAMETRIC TECHNOLOGY CORPORATION
INDEX
-----
Page
----
Part I Financial Information
Item 1 Financial Statements
Consolidated Balance Sheet 3
July 1, 1995 and September 30, 1994
Consolidated Statement of Income 4
Three and nine months ended
July 1, 1995 and July 2, 1994
Consolidated Statement of Cash Flows 5
Nine months ended July 1, 1995 and
July 2, 1994
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
Part II Other Information
Item 5 Other Information 11
Item 6 Exhibits and Reports on Form 8-K 11
Signature 12
2
PARAMETRIC TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEET
(amounts in thousands)
ASSETS July 1, 1995 September 30, 1994
------------ ------------------
(unaudited)
Current assets:
Cash and cash equivalents $148,099 $138,622
Short-term investments 124,732 68,847
Accounts receivable, net of allowance for
doubtful accounts of $2,513 and $2,034 68,008 57,554
Other current assets 12,477 5,933
-------- --------
Total current assets 353,316 270,956
Property and equipment, net 15,911 12,822
Capitalized computer software costs, net 4,761 1,182
Other assets 24,576 2,030
-------- --------
Total assets $398,564 $286,990
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 15,151 $ 11,564
Accrued compensation 16,172 14,577
Deferred revenue 35,291 15,776
Income taxes 3,460 2,356
-------- --------
Total current liabilities 70,074 44,273
Deferred income taxes 679 638
Stockholders' equity:
Preferred stock, $.01 par value; 5,000 shares
authorized; none issued -- --
Common stock, $.01 par value; 75,000 shares authorized;
58,209 and 56,917 shares issued 582 569
Additional paid-in capital 124,529 96,736
Cumulative translation adjustments 4,116 1,099
Valuation allowance for investments 100 --
Retained earnings 198,484 143,675
-------- --------
Total stockholders' equity 327,811 242,079
-------- --------
Total liabilities and stockholders' equity $398,564 $286,990
======== ========
The accompanying notes are an integral part of
the consolidated financial statements.
3
PARAMETRIC TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(amounts in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
-------- -------- -------- --------
Revenue:
License $70,361 $49,591 $185,240 $137,832
Service 26,664 14,033 67,326 37,332
------- ------- -------- --------
Total revenue 97,025 63,624 252,566 175,164
------- ------- -------- --------
Cost of revenue:
License 255 246 912 640
Service 8,308 4,915 21,346 12,390
------- ------- -------- --------
Total cost of revenue 8,563 5,161 22,258 13,030
------- ------- -------- --------
Gross profit 88,462 58,463 230,308 162,134
------- ------- -------- --------
Operating expenses:
Sales and marketing 40,464 24,678 102,942 68,847
Research and development 5,491 3,644 14,274 10,673
General and administrative 5,132 2,880 12,917 8,437
Acquisition and related costs 19,000 -- 19,000 --
------- ------- -------- --------
Total operating expenses 70,087 31,202 149,133 87,957
------- ------- -------- --------
Operating income 18,375 27,261 81,175 74,177
Other income, net 2,598 1,173 6,312 3,001
------- ------- -------- --------
Income before income taxes 20,973 28,434 87,487 77,178
Provision for income taxes 7,802 10,634 32,678 28,865
------- ------- -------- --------
Net income $13,171 $17,800 $ 54,809 $ 48,313
======= ======= ======== ========
Net income per share $ 0.22 $ 0.30 $ 0.91 $ 0.82
====== ====== ====== ======
Weighted average number of common
and dilutive common equivalent
shares outstanding 60,748 58,727 59,963 58,752
======= ======= ======== ========
The accompanying notes are an integral part of
the consolidated financial statements.
4
PARAMETRIC TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(amounts in thousands)
(unaudited)
Nine Months Ended
------------------
July 1, 1995 July 2, 1994
------------ ------------
Cash flows from operating activities:
Net income $ 54,809 $ 48,313
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 6,143 3,627
Deferred income taxes (7,456) (488)
Charge for purchased research and
development in process 19,000 -
Changes in assets and liabilities, net
of effects from acquisition:
Increase in accounts receivable (6,857) (15,589)
Increase in other current assets (7,839) (1,581)
(Increase) decrease in other assets (1,998) 3,401
Increase in accounts payable and
accrued expenses 2,802 3,173
Increase in accrued compensation 1,104 3,213
Increase in income taxes 10,108 17,029
Increase in deferred revenue 17,914 5,883
--------- --------
Net cash provided by operating activities 87,730 66,981
--------- --------
Cash flows from investing activities:
Additions to property and equipment, net (7,293) (5,570)
Payment for acquisition of a business (34,554) -
Additions to capitalized computer
software costs (997) (762)
Proceeds from sales of short-term
investments 109,589 47,361
Purchases of short-term investments (165,374) (38,446)
--------- --------
Net cash provided (used) by investing
activities (98,629) 2,583
--------- --------
Cash flows from financing activities:
Principal payments under capital lease
obligations (33) (22)
Proceeds from employee stock option and
purchase plans 18,464 11,543
Purchase of treasury stock -- (2,952)
--------- --------
Net cash provided by financing activities 18,431 8,569
--------- --------
Effect of exchange rate changes on cash 1,945 463
--------- --------
Net increase in cash and cash equivalents 9,477 78,596
Cash and cash equivalents at beginning of
period 138,622 68,211
--------- --------
Cash and cash equivalents at end of period $ 148,099 $146,807
========= ========
The accompanying notes are an integral part of
the consolidated financial statements.
5
PARAMETRIC TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries, and have been
prepared by the Company in accordance with generally accepted accounting
principles. In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments, consisting only of
those of a normal recurring nature, necessary for a fair presentation of the
Company's financial position, results of operations and cash flows at the dates
and for the periods indicated. While the Company believes that the disclosures
presented are adequate to make the information not misleading, these financial
statements should be read in conjunction with the consolidated financial
statements and related notes included in the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1994.
The results of operations for the three-month and nine-month periods ended
July 1, 1995 are not necessarily indicative of the results expected for the full
fiscal year.
2. CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS:
Effective October 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("FAS 115"). Under this standard, the Company's
investments were classified as available-for-sale. In accordance with FAS 115,
investments classified as available-for-sale are reported at fair market value
and any unrealized gains or losses are recorded as part of stockholders' equity.
The cumulative effect of this adoption was immaterial as of October 1, 1994.
Prior period financial statements have not been restated to reflect this change
in accounting principle.
3. SUPPLEMENTAL CASH FLOW INFORMATION:
The Company made income tax payments of $33,499,000 and $11,726,000 during
the nine months ended July 1, 1995 and July 2, 1994, respectively.
4. LINE OF CREDIT:
The Company had a $5,000,000 unsecured demand line of credit with a bank,
which expired on January 31, 1995. There were no borrowings under this line
during the nine months ended July 1, 1995.
5. ACQUISITION:
On April 12, 1995, the Company acquired substantially all of the assets and
specified liabilities of the Conceptual Design and Rendering System ("CDRS")
software business operated by the Design Software Division of Evans & Sutherland
Computer Corporation for approximately $34,500,000 in cash, which was paid by
the Company from its existing cash balances. The acquisition has been accounted
for as a purchase. The purchase price has been allocated to the assets
acquired, including certain intangible assets, such as purchased computer
software and research and development in process, based on their respective fair
values. The excess of the purchase price over the estimated fair value of the
net assets acquired has been recorded as goodwill ($7,700,000), which is being
amortized on a straight-line basis over 7 years. In conjunction with the
acquisition in the third quarter, the Company recorded a non-recurring charge of
$19,000,000 ($11,900,000 net of tax benefits or $0.19 per share) related to the
write-off of purchased research and development in process. CDRS's results of
operations have been included in the consolidated results of operations since
the date of acquisition.
The following pro forma summary presents the consolidated results of
operations of the Company as if the acquisition of CDRS had occurred as of the
beginning of the periods presented, after giving effect to certain adjustments,
including amortization of goodwill and other intangibles, decreased interest
income related to cash used to finance the acquisition and related income tax
effects. The summary excludes the non-recurring charge of $19,000,000. Pro
forma results of operations
6
for the nine months ended July 1, 1995 include CDRS's results of operations for
the period from October 1, 1994 through April 11, 1995. Pro forma results of
operations for the nine months ended July 2, 1994 include CDRS's results of
operations for the nine months ended September 30, 1994. These pro forma results
are not necessarily indicative of those that would have occurred had the
acquisition taken place as of the beginning of the periods presented.
Nine months ended
-----------------------------------
July 1, 1995 July 2, 1994
(amounts in thousands, except per share data)
Revenue $254,953 $181,092
Net income $ 63,384 $ 46,866
Net income per share $ 1.06 $ 0.80
6. SUBSEQUENT EVENT:
On August 1, 1995, the Company completed its aquisition of Rasna(R)
Corporation ("Rasna"), a privately held company headquartered in San Jose,
California. Under the terms of the merger agreement, the Company issued
approximately 3,800,000 shares of its common stock to the shareholders of Rasna
and substituted approximately 500,000 Parametric Technology stock options for
existing Rasna stock options. The merger will be accounted for on a pooling-of-
interests basis. All future consolidated financial statements will be restated
for periods ending prior to the merger to include the historical results of
operations of both the Company and Rasna.
Revenue and net income of the separate companies for the nine-month periods
preceding the pooling are as follows:
Nine months ended
-----------------------------------
July 1, 1995 July 2, 1994
(amounts in thousands)
Revenue
Parametric Technology Corporation $252,566 $175,164
Rasna Corporation $ 22,500 $ 15,591
Net income
Parametric Technology Corporation $ 54,809 $ 48,313
Rasna Corporation $ 2,267 $ 1,285
The information provided above is not necessarily indicative of the results
of operations that would have occurred if the merger had been consummated at the
beginning of the periods presented, nor is it necessarily indicative of future
operating results.
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue, including license and service revenues, for the three-month and
nine-month periods ended July 1, 1995 was $97,025,000 and $252,566,000,
respectively, compared with $63,624,000 and $175,164,000 for the three-month and
nine-month periods ended July 2, 1994. These totals represent increases of 52%
for the three-month period and 44% for the nine-month period over the
corresponding periods in fiscal 1994. The increase in license revenue results
from an increase in the number of seats of software licensed for both the three-
month and nine-month periods and from a higher price realized per seat for the
three-month period. A seat of software generally consists of the Company's core
product, Pro/ENGINEER(R), together with several other software modules,
configured to serve the needs of a single concurrent user. The number of seats
of software licensed during the three-month and nine-month periods ended July 1,
1995 were approximately 3,800 and 10,500, compared with approximately 2,900 and
7,800 seats during the same periods in fiscal 1994. The increase in the number
of seats licensed was achieved due to continued market penetration of the
Company's products. The average price per seat during the three months and nine
months ended July 1, 1995 was $18,500 and $17,600, compared with an average
price of $17,100 and $17,700 for the same periods in fiscal 1994. Service
revenue is derived from the sale of software maintenance contracts and the
performance of training and consulting services. This revenue increased during
the three-month and nine-month periods ended July 1, 1995 over the corresponding
periods in fiscal 1994 as a result of the growth in the Company's installed
customer base. Revenue outside of North America accounted for 52% and 51% of
revenue for the three-month and nine-month periods ended July 1, 1995 compared
with 47% and 44% for the same periods in fiscal 1994. The Company expects that
total revenue will continue to increase throughout fiscal 1995 from continued
market penetration, and that international revenue will continue to account for
a significant portion of that total growth.
The number of worldwide employees increased 43% to 1,703 at July 1, 1995
compared with 1,193 at July 2, 1994. Employment increased significantly to
support higher revenues and international expansion, with the largest portion of
this growth occurring in the sales and marketing department and employees
associated with cost of revenue activities.
Cost of license revenue consists of the amortization of capitalized computer
software costs as well as material and overhead costs. Cost of service revenue
includes the costs associated with training, software maintenance and consulting
revenues. Combined, these expenses increased to $8,563,000 and $22,258,000 for
the three-month and nine-month periods ended July 1, 1995 from $5,161,000 and
$13,030,000 for the corresponding periods in fiscal 1994. Total cost of revenue
as a percentage of revenue increased to 9% for the three-month and nine month
periods ended July 1, 1995 from 8% and 7% in the corresponding periods in fiscal
1994. The absolute and percentage increases in total cost of revenue resulted
primarily from the growth in staffing necessary to generate increased service
revenue. Cost of service revenue, which is the largest portion of total cost of
revenue, increased 69% and 72% during the three-month and nine-month periods
ended July 1, 1995 from the corresponding periods in fiscal 1994, while the
associated revenue increased 90% and 80%.
Sales and marketing expenses increased to $40,464,000 and $102,942,000 for
the three-month and nine-month periods ended July 1, 1995 from $24,678,000 and
$68,847,000 for the corresponding periods in fiscal 1994. The increase in these
expenses was due principally to worldwide expansion of the sales force and sales
commissions associated with higher revenue. Sales and marketing expenses as a
percentage of revenue increased to 42% and 41% for the three-month and nine-
month periods ended July 1, 1995, compared with 39% for the comparable periods
in fiscal 1994. International sales and marketing expenses represented 56% and
54% of total sales and marketing expenses for the three-month and nine-month
periods ended July 1, 1995 compared with 50% and 46% for the comparable periods
in fiscal 1994. The Company expects to continue the growth of its worldwide
sales and marketing organization, reflecting the Company's commitment to expand
its global market penetration.
The Company continued to make investments in research and development,
consisting primarily of salaries, benefits and the costs of computer equipment.
Research and development expenses increased to $5,491,000 and $14,274,000 for
the three-month and nine-month periods ended July 1, 1995 from $3,644,000 and
$10,673,000 for the corresponding periods in fiscal 1994. Research and
development expenses as a percentage of revenue was 6% for the three-month and
nine-month periods ended July 1, 1995 and July 2, 1994. The absolute increase
in these expenses resulted primarily from growth in the research and development
staff.
8
Software development costs of $375,000 and $997,000 have been capitalized
during the three-month and nine-month periods ended July 1, 1995 in accordance
with Statement of Financial Accounting Standards No. 86, "Accounting for the
Costs of Computer Software to be Sold, Leased or Otherwise Marketed," compared
with $302,000 and $762,000 in the corresponding periods in fiscal 1994. The
amounts capitalized represent 6% and 7% of total research and development costs
(including capitalized amounts) for the three-month and nine-month periods in
fiscal 1995, compared with 8% and 7% during the same periods in fiscal 1994.
Capitalized computer software costs are amortized over the economic useful lives
of the related products, typically three years.
General and administrative expenses include the costs of corporate, finance,
human resources and administrative functions of the Company. These expenses
increased to $5,132,000 and $12,917,000 for the three-month and nine-month
periods ended July 1, 1995 from $2,880,000 and $8,437,000 for the corresponding
periods in fiscal 1994, while remaining the same as a percentage of revenue at
5%. The absolute increase in these expenses was primarily due to the hiring of
additional employees necessary to support the Company's worldwide growth.
The Company recorded in the third quarter a non-recurring charge of
$19,000,000 related to the write-off of purchased research and development in
process associated with the acquisition of CDRS discussed below under Liquidity
and Capital Resources.
Other income, net, primarily includes interest income and expense and foreign
currency gains and losses. Interest income increased to $7,009,000 for the
nine-month period ended July 1, 1995 compared with $3,115,000 for the
corresponding period in fiscal 1994 due primarily to higher interest-bearing
cash and short-term investment balances, which resulted from positive cash flows
from operations and proceeds from stock option exercises, and rising interest
rates. The Company recognized $360,000 in foreign currency losses for the nine-
month period ended July 1, 1995 compared with losses of $43,000 during the same
period in fiscal 1994.
The Company's effective tax rate for the nine-month period ended July 1, 1995
was 37.35%, compared with 37.4% for the same period in fiscal 1994.
LIQUIDITY AND CAPITAL RESOURCES
As of July 1, 1995, the Company had $148,099,000 of cash and cash equivalents
and $124,732,000 of short-term investments. Effective October 1, 1994, the
Company adopted the provisions of Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities"
("FAS 115"). Under this standard, the Company's investments were classified as
available-for-sale. In accordance with FAS 115, investments classified as
available-for-sale are reported at fair market value and any unrealized gains or
losses are recorded as part of stockholders' equity. The cumulative effect of
this adoption was immaterial as of October 1, 1994. Prior period financial
statements have not been restated to reflect this change in accounting
principle.
Net cash provided by operating activities, consisting primarily of net income
from operations, the non-recurring charge for purchased research and development
in process and the increase in deferred revenue, totaled $87,730,000 for the
nine-month period ended July 1, 1995 compared with $66,981,000 for the
corresponding period in fiscal 1994.
Investing activities consist primarily of purchases and sales of short-term
investments, additions to property and equipment, and acquisition of a business.
Net cash used by investing activities totaled $98,629,000 for the nine-month
period ended July 1, 1995, compared with net cash provided of $2,583,000 for the
corresponding period in fiscal 1994. Net cash provided by financing activities,
consisting primarily of proceeds from stock option exercises, was $18,431,000
and $8,569,000 for the nine months ended July 1, 1995 and July 2, 1994,
respectively.
Due to the Company's strong cash position, the Company allowed a $5,000,000
unsecured demand line of credit with a bank to expire on January 31, 1995.
There were no borrowings under this line during the nine months ended July 1,
1995.
On May 12, 1994, the Company announced that its Board of Directors had
authorized a plan that allows the repurchase of its common stock. The plan
authorizes the Company to acquire up to 3,000,000 shares of its common stock
from time to
9
time in the open market or through privately negotiated transactions. The
Company had repurchased 157,000 shares through July 1, 1995, all of which were
reissued by July 1, 1995 to satisfy stock option exercises and employee stock
purchases under Company plans. During the nine months ended July 1, 1995, the
Company did not repurchase any of its shares of common stock. The total amount
of cash required in current and future periods to repurchase the full number of
shares authorized but not repurchased would be approximately $141,400,000 based
upon the closing stock price on June 30, 1995. The Company expects to use
available cash and cash generated from operations in future fiscal periods to
fund any such repurchases.
On April 12, 1995, the Company acquired substantially all of the assets and
specified liabilities of the Conceptual Design and Rendering System ("CDRS")
software business operated by the Design Software Division of Evans & Sutherland
Computer Corporation for approximately $34,500,000 in cash, which was paid by
the Company from its existing cash balances. The acquisition has been accounted
for as a purchase. The purchase price has been allocated to the assets
acquired, including certain intangible assets, such as purchased computer
software and research and development in process, based on their respective fair
values. The excess of the purchase price over the estimated fair value of the
net assets acquired has been recorded as goodwill ($7,700,000), which is being
amortized on a straight-line basis over 7 years. In conjunction with the
acquisition in the third quarter, the Company recorded a non-recurring charge of
$19,000,000 ($11,900,000 net of tax benefits or $0.19 per share) related to the
write-off of purchased research and development in process. CDRS's results of
operations have been included in the consolidated results of operations since
the date of acquisition.
On August 1, 1995, the Company completed its aquisition of Rasna(R)
Corporation ("Rasna"), a privately held company headquartered in San Jose,
California. Under the terms of the merger agreement, the Company issued
approximately 3,800,000 shares of its common stock to the shareholders of Rasna
and substituted approximately 500,000 Parametric Technology stock options for
existing Rasna stock options. The merger will be accounted for on a pooling-of-
interests basis.
The Company believes that existing cash and short-term investment balances
together with cash generated from operations will be sufficient to meet the
Company's working capital, financing and capital expenditure requirements
through at least calendar 1995.
10
Part II - OTHER INFORMATION
Item 5: Other Information
On August 1, 1995, the Company merged with Rasna, a California corporation,
pursuant to an Agreement and Plan of Merger dated as of May 30, 1995 by and
among the Company, Rasna and the principal shareholders of Rasna (the
"Agreement"). Following the merger, the Company continued as the surviving
corporation and the separate corporate existence of Rasna ceased.
Under the terms of the Agreement, the Company issued approximately 3,800,000
shares of its common stock to the shareholders of Rasna and substituted
approximately 500,000 Parametric Technology stock options for existing Rasna
stock options. The merger will be accounted for on a pooling-of-interests
basis. The terms of the transaction resulted from arms-length negotiations
between representatives of Rasna and the Company and are more fully set forth in
the Agreement filed as Exhibit 2.1 hereto.
Rasna developed a line of integrated software products for mechanical
computer-aided engineering. The Company plans to integrate the products of
Rasna with its current and future software product lines.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
--------
2.1 Agreement and Plan of Merger dated as of May 30, 1995 among the
Company, Rasna and certain shareholders of Rasna. Pursuant to Item
601(b)(2) of Regulation S-K, the disclosure schedules referred to in
the Agreement are omitted. The Company hereby undertakes to furnish
supplementally a copy of any omitted schedule to the Commission upon
request.
10.23 Employment Agreement with Mark J. Gallagher dated as of June 30, 1995.
(b) Reports on Form 8-K
-------------------
On April 25, 1995, the Company filed a Current Report on Form 8-K announcing
the acquisition of substantially all of the assets and specified liabilities of
the CDRS software business operated by the Design Software Division of Evans &
Sutherland Computer Corporation for approximately $34,500,000 in cash. On June
23, 1995, the Company filed a Current Report on Form 8-K/A providing the
financial statements and exhibits related to the acquisition of CDRS.
On June 7, 1995, the Company filed a Current Report on Form 8-K announcing
the agreement to merge Rasna into the Company.
11
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARAMETRIC TECHNOLOGY CORPORATION
Date: August 14, 1995
by: /S/ James F. Kelliher
---------------------------------
James F. Kelliher
Vice President of Finance and
Principal Financial Officer
12
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger dated as of May 30, 1995 among
Parametric Technology Corporation, Rasna Corporation and certain
shareholders of Rasna Corporation; filed herewith.
10.23 Employment Agreement with Mark J. Gallagher dated as of June 30,
1995; filed herewith.
13