PTC Reports Fiscal 2003 Second Quarter Results -- Revenue and EPS in line with Preliminary Results --
NEEDHAM, Mass., April 16 /PRNewswire-FirstCall/ -- PTC (NASDAQ: PMTC), the product development company(TM), today reported revenue totaling $171.0 million for the second quarter ended March 29, 2003, compared with $179.9 million for the same period last year. Net loss for the second quarter was $15.2 million, or $0.06 per diluted share, compared to net loss of $18.5 million, or $0.07 per diluted share, for the year-ago period. The second quarter 2003 revenue and EPS were in line with PTC's financial update on April 3, 2003.
Total design solutions revenue for the second quarter was $128.5 million, which was flat sequentially. Design solutions license revenue was up 12% sequentially at $40.1 million, a result of stronger sales in North America and Asia. Design solutions license revenue from our VAR channel increased 23% year-over-year and 8% sequentially. Design solutions sales included orders from Harris Corporation, Inventec Corporation and Toyota Motor Corporation.
Total Windchill revenue in the second quarter was $42.5 million, down 2% sequentially. Windchill license revenue declined 4% sequentially at $15.2 million. Windchill Link solutions continued to contribute an increasing percentage of overall Windchill license revenue, consistent with our strategy to emphasize pre-configured, integrated solutions that drive rapid return-on- investment for customers. Windchill Link solutions license revenue grew 49% sequentially and represented 62% of overall Windchill license revenue. Windchill sales included orders from British Telecom, United Defense Limited Partnership Armament Systems Division and Unisys Corporation.
"As we have stated in the past, our ability to deliver industry-leading products coupled with our domain expertise in product development is a key source of competitive advantage," said C. Richard Harrison, president and chief executive officer of PTC. "We reached a significant milestone this quarter by creating an unrivaled core offering called the product development system. This powerful combination of Pro/ENGINEER Wildfire and the Windchill Link solutions is already generating excitement with customers and we believe this offering will help position PTC for future growth. Nonetheless, near- term revenue growth at PTC is somewhat dependent on improved economic outlook and customer spending. As a result, we expect our revenue to be approximately $170 million for the third quarter of fiscal 2003."
As previously announced, PTC has begun cost reduction efforts. As the company enters its next fiscal year in October 2003, PTC expects to have reduced its operating cost structure to approximately $160 million per quarter. Achieving this reduction to our operating cost structure will result in an aggregate restructuring charge of $25 million to $35 million to be taken as the reductions are made.
The Company will provide detailed financial information and an outlook update on its second quarter results conference call and live webcast on April 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 http://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 877-917-3410 (in the U.S.), and +1-712-257- 3640 (international). Please use passcode PTC. A replay of the call will be available until 5:00 p.m. ET on April 21, 2003. To access the replay via Webcast, please visit http://www.ptc.com/for/investors.htm. To access the replay by phone, please dial 402-998-1030.
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 second quarter are attached.
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 success of our product development and integration initiatives; the success of our distribution initiatives, including our VAR channel program; the growth of the PLM market and acceptance of our Windchill software and solutions; our ability to compete successfully in the MCAD industry and stabilize our MCAD license revenue; the acceptance of Pro/ENGINEER Wildfire and our Windchill Link Solutions, both as stand-alone products and as an integrated product development system; the execution of our cost reduction initiatives; 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 Six Months Ended March 29, March 30, March 29, March 30, 2003 2002 2003 2002 Restated Restated Note 1 Note 1 Revenue: License $ 55,284 $ 57,007 $106,761 $121,350 Service 115,742 122,906 236,232 253,982 Total revenue 171,026 179,913 342,993 375,332 Costs and expenses: Cost of license revenue 1,978 4,047 4,623 8,411 Cost of service revenue 50,694 51,865 99,324 103,466 Sales and marketing 77,629 84,588 159,072 169,099 Research and development 31,942 35,572 63,842 70,261 General and administrative 16,654 16,833 32,177 32,203 Amortization of goodwill and other intangible assets 1,460 9,034 2,941 18,199 Restructuring charge - - - 6,089 Total costs and expenses 180,357 201,939 361,979 407,728 Operating loss (9,331) (22,026) (18,986) (32,396) Other expense, net (887) (952) (1,452) (697) Loss before income taxes (10,218) (22,978) (20,438) (33,093) Provision for (benefit from) income taxes 4,951 (4,510) 6,121 (8,585) Net loss $(15,169) $(18,468) $(26,559) $(24,508) Loss per share: Basic $(0.06) $(0.07) $(0.10) $(0.09) Diluted $(0.06) $(0.07) $(0.10) $(0.09) Weighted average shares outstanding 263,796 260,529 263,193 260,440 PARAMETRIC TECHNOLOGY CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) March 29, September 30, 2003 2002 ASSETS Cash and investments $205,537 $210,414 Accounts receivable, net 161,849 157,522 Property and equipment, net 81,253 86,535 Goodwill and other intangibles, net 52,245 54,303 Other assets 145,786 166,185 Total assets $646,670 $674,959 LIABILITIES AND STOCKHOLDERS' EQUITY Total liabilities $181,249 $187,728 Deferred revenue 198,650 197,303 Stockholders' equity 266,771 289,928 Total liabilities and stockholders' equity $646,670 $674,959 PARAMETRIC TECHNOLOGY CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) Three Months Ended Six Months Ended March 29, March 30, March 29, March 30, 2003 2002 2003 2002 Restated Restated Note 1 Note 1 Cash flows from operating activities: Net loss $(15,169) $(18,468) $(26,559) $(24,508) Depreciation and amortization 10,400 18,301 21,235 36,643 Changes in assets and liabilities 1,202 (25,198) 11,232 (43,059) Net operating cash flow (3,567) (25,365) 5,908 (30,924) Capital expenditures (8,442) (9,747) (13,285) (20,253) Net financing activities 3,905 4,646 3,905 (83) Foreign exchange and other (1,640) (999) (1,405) (1,583) Net change in cash and investments (9,744) (31,465) (4,877) (52,843) Cash and investments, beginning of period 215,281 227,720 210,414 249,098 Cash and investments, end of period $205,537 $196,255 $205,537 $196,255