PTC Reports Fiscal 2003 Second Quarter Results -- Correction Notice

/PRNewswire/ -- In the news release, PTC Reports Fiscal 2003 Second Quarter Results, issued earlier today by PTC, over PR Newswire, we are advised by the company that the second paragraph, first sentence, should read "Total design solutions revenue for the second quarter was $128.5 million, which was flat sequentially" rather than "Total design solutions revenue for the first quarter was $128.5 million, which was flat sequentially", also the third paragraph, first sentence should read "Total Windchill revenue in the second quarter was $42.5 million, down 2% sequentially" rather than "Total Windchill revenue in the first quarter was $42.5 million, down 2% sequentially" as originally issued inadvertently. Complete, corrected release to follow:

              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.

(Photo: http://www.newscom.com/cgi-bin/prnh/20000821/NEM002LOGO )

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.

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 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


 


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