PTC Reports Fiscal 2003 Second Quarter Results -- Correction Notice
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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.

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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 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 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

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.

                  (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

  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

                              (in thousands)

                                                 March 29,  September 30,
                                                      2003           2002


  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


  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

                              (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

Note 1: These unaudited consolidated financial statements for the three and six months ended March 30, 2002 reflect the restatement of maintenance revenues as previously reported in our 2002 Annual Report on Form 10-K filed with the Securities and Exchange Commission on January 28, 2003.

   Investor Relations Contact:   Public Relations Contact:
   Meredith Mendola              Roberta Carlton
   781-370-6151                  781-370-5479
Email Contact              
Email Contact

CONTACT: Investor Relations: Meredith Mendola, +1-781-370-6151,
Email Contact; or Public Relations: Roberta Carlton, +1-781-370-5479,
Email Contact, both of PTC

Web site: