The reverse stock split will be effective on February 28, 2006, when PTC's common stock will begin trading at the split-adjusted level. For a period of 20-trading days, PTC's common stock will trade on a post-split basis under the trading symbol "PMTCD". After this 20-trading day period, PTC's common stock will resume trading under the symbol "PMTC".
PTC has made significant corporate governance and equity structure improvements over the past few years, including:
-- A reduction in options overhang from 32% to less than 20%;
-- A commitment to reduce its annual equity grant burn rate to 2% of total shares outstanding;
-- A shift from stock options to restricted stock and/or restricted stock units for eligible employees;
-- A requirement that at least 50% of executive officer equity grants and all cash bonuses are tied to performance-based metrics.
"During the past year, PTC has demonstrated strong marketplace success - significant year-over-year revenue and earnings growth, solid balance sheet metrics, and growing market share," said Neil Moses, Executive Vice President and Chief Financial Officer of PTC. "When a company executes a reverse stock split from a position of strength, it can have very positive results, including increased investor interest, improved stock liquidity, and reduced administration costs. We believe it is the right time to take this additional step in improving our equity structure, which, together with the successful changes we have already made, should benefit our stockholders."
The number of shares of PTC common stock issued and outstanding will be reduced from approximately 277,500,000 shares as of January 23, 2006, to approximately 111,000,000 shares post-split. The number of shares reserved for issuance under PTC's equity compensation plans will also be reduced proportionately. No fractional shares will be issued in connection with the reverse stock split. Shareholders who would be entitled to fractional shares will receive cash payments in lieu of receiving fractional shares. PTC's transfer agent will contact stockholders of record after February 28 to arrange for the exchange of stock certificates; however, one may sell shares without having exchanged the pre-split certificate.
PTC (Nasdaq: PMTC) provides leading product lifecycle management (PLM), 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 that involve risks and uncertainties that could cause actual results to differ materially from those projected. Those risks and uncertainties include the following: the total market capitalization of PTC common stock (the aggregate value of all PTC common stock at the then market price) after the reverse stock split may not be equal to or greater than the total market capitalization before the reverse stock split, and the per share market price of PTC common stock following the reverse stock split may not equal or exceed a price in direct proportion to the reduction in the number of shares of PTC common stock outstanding before the reverse stock split (for example, based on the closing market price of PTC common stock on January 23, 2006 of $6.71 per share, the per share post-split market price of PTC common stock may not remain at or above $16.775 per share or greater); a decline in the market price of PTC common stock after the reverse stock split would represent a greater percentage decline than would occur in the absence of a reverse stock split; and the liquidity of PTC common stock could be adversely affected following the reverse stock split; 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 reports on Forms 10-K and 10-Q.
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 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.
PTC Investor Contact: Meredith Mendola, 781-370-6151 Email Contact or Media Contact: Nicole Rowe, 781-370-6369 Email Contact