NEEDHAM, Mass., April 16, 2002 – PTC (Nasdaq: PMTC), the product development company(TM), today reported revenue totaling $185.0 million for the second quarter ended March 30, 2002, compared with $246.5 million for the same period last year. Pro forma net loss, excluding non-recurring charges and the amortization of intangible assets, was $6.0 million, or $0.02 per diluted share, compared to pro forma net income of $24.4 million, or $0.09 per diluted share, for the year-ago period.
Including non-recurring charges and the amortization of intangible assets, the net loss for the second quarter was $15.3 million, or $0.06 per diluted share, compared to net income of $7.1 million, or $0.03 per diluted share, for the same period last year.
"As we previously announced, PTC's second quarter revenue was weaker than originally anticipated largely due to continued softness in spending behavior in the global manufacturing sector," said C. Richard Harrison, president and chief executive officer. "The impact of this economic environment has been difficult to predict. Windchill® license revenue was particularly impacted by delays in orders at the end of the quarter, despite an increase in customer activity. We feel confident about the long-term outlook for Windchill; we have won several important competitive benchmarks this quarter that should translate into revenue as our manufacturing customers begin to spend again."
Operating Highlights
Total Windchill revenue in the second quarter was $40.0 million, compared to $56.2 million a year ago. PTC received significant second quarter orders for Windchill from customers such as Bose Corporation, Los Alamos National Laboratory, and Weatherford International.
The Company's total design solutions revenue for the second quarter was $145.0 million, compared to $190.3 million a year ago. Design solutions sales included orders from LG Electronics, Lockheed Martin, and Mitsubishi Heavy Industries.
PTC continued to add regional systems integrators to complement our existing network of premier global integrators. New systems integrators were added in Korea, Taiwan and the People's Republic of China. PTC now has active relationships with 56 systems integrator partners and has over 600 premier partner consultants technically trained.
During the quarter, PTC added a new Quick Start deployment option for Windchill with Windchill® PDMLink™, which helps manufacturers control product information, product development processes, and facilitate Web-based enterprise-wide information access.
Additionally, PTC launched Pro/DESKTOP®, our lightweight design solution that enables rapid and efficient capture of product design ideas through intelligent, feature-based drafting technology. Built on Granite™ One, the modeling kernel behind Pro/ENGINEER, Pro/DESKTOP fortifies PTC's Pro/ENGINEER® product line, which now has price points and functionality that appeal to the entire spectrum of 3D users.
"We stand by the product lifecycle management (PLM) vision we outlined at our analyst day and webcast on February 12," concluded Harrison. "However, based on the current economic climate, we expect revenue to approximate $180 million for each of the remaining two quarters in the fiscal year, which will result in a further reduction to our cost structure."
The Company will provide detailed financial information and an outlook update on its second quarter results conference call and live webcast on April 16 at 10 a.m. ET. To access the live webcast, please visit www.ptc.com/for/investors.htm. A replay of the call will be available until 5:00 p.m. ET on April 19, 2002. To access the replay by phone, dial 402-220-4184. To access the replay via Webcast, please visit www.ptc.com/for/investors.htm.
The unaudited consolidated statement of income and condensed consolidated balance sheet for the second 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. The company services more than 33,000 customers worldwide. Further information on PTC is available at http://www.ptc.com.
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Six Months Ended
March 30, March 31, March 30, March 31,
2002 2001 2002 2001
Revenue:
License $57,007 $107,420 $121,350 $208,720
Service 128,008 139,053 263,542 273,658
Total revenue 185,015 246,473 384,892 482,378
Costs and expenses:
Cost of license revenue 4,047 3,138 8,411 6,945
Cost of service revenue 51,865 63,142 103,466 124,189
Sales and marketing 84,588 93,156 169,099 185,589
Research and
development 35,572 37,265 70,261 73,074
General and
administrative 16,833 16,715 32,203 34,084
Amortization of
goodwill and other
intangible assets 9,034 9,512 18,199 18,951
Nonrecurring charges -- 6,145 6,089 6,145
Total costs and
expenses 201,939 229,073 407,728 448,977
Operating
income (loss) (16,924) 17,400 (22,836) 33,401
Write-down of
investments -- (8,681) -- (8,681)
Other income
(expense), net (952) 1,311 (697) 2,567
Income (loss) before
income taxes (17,876) 10,030 (23,533) 27,287
Provision for
(benefit from)
income taxes (2,591) 2,909 (5,299) 7,912
Net income (loss) $(15,285) $ 7,121 $(18,234) $19,375
Earnings (loss)
per share:
Basic $ (0.06) $0.03 $ (0.07) $0.07
Diluted $ (0.06) $0.03 $ (0.07) $0.07
Weighted average
shares and dilutive
equivalent shares
outstanding 260,529 270,558 260,440 270,532
PARAMETRIC TECHNOLOGY CORPORATION
PRO FORMA RESULTS
(in thousands, except per share data)
Excluding the amortization
of goodwill and other
intangible assets,
nonrecurring charges
and write-down of
investments:
Operating income
(loss) $(7,890) $33,057 $ 1,452 $58,497
Net income (loss) $(5,995) $24,401 $795 $43,355
Net income (loss)
per share - diluted $ (0.02) $0.09 $-- $0.16
Weighted average
shares and dilutive
equivalent shares
outstanding 260,529 270,558 262,516 270,532
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 30, September 30,
2002 2001
ASSETS
Cash and investments $196,255 $249,098
Accounts receivable, net 161,075 185,444
Other assets 382,794 363,296
Total assets $740,124 $797,838
LIABILITIES AND STOCKHOLDERS' EQUITY
Total liabilities $359,928 $398,136
Stockholders' equity 380,196 399,702
Total liabilities and stockholders' equity $740,124 $797,838
Investor Relations Contact: Public Relations Contact:
Tom Barth Roberta Carlton
781-370-5889 781-370-5479
tbarth@ptc.com rcarlton@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 success of our product development, integration and distribution initiatives; our ability to realize revenue from the larger, strategic business opportunities we are pursuing as well as from our point solutions; the growth of the PLM market and acceptance of the Windchill enterprise solutions, which have a longer sales cycle than our other products; our ability to compete successfully in the MCAD industry and stabilize our MCAD license revenue; the success of our Pro/DESKTOP product line in complementing our other MCAD offerings; the success of our partnering and customer satisfaction initiatives; the success of our Windchill integrated solutions strategy initiatives and our efforts to differentiate our MCAD offerings by targeting synergies with Windchill; the success of our cost reduction initiatives; and the effects of a weakening economy which may impact 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, Pro/DESKTOP, Windchill, Windchill PDMLink 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.
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