CIMdata PLM Industry Summary Online Archive

31 October 2012

Financial News

PTC Announces Solid Q4 EPS Results, Initiates Q1 and FY’13 Targets

PTC reported results for its fourth fiscal quarter and year ended September 30, 2012.

Highlights

  • Q4 Results:
    • Non-GAAP revenue of $325 million, down 5% year over year (flat on a constant currency basis)
    • Non-GAAP EPS of $0.50, up 6% year over year (up 13% on a constant currency basis)
    • Non-GAAP operating margin of 24.5%, up 180 basis points year over year (up 220 basis points on a constant currency basis)
    • GAAP operating margin of 17.7% and GAAP EPS of $(0.71), in part reflecting a $124 million non-cash charge to the income tax provision to establish a valuation allowance against deferred tax assets in the U.S.
  • FY’12 Results:
    • Non-GAAP revenue of $1,258 million, up 8% year over year (up 10% on a constant currency basis)
    • Non-GAAP EPS of $1.51, up 20% year over year (up 24% on a constant currency basis)
    • Non-GAAP operating margin of 19.6%, up 190 basis points year over year (up 210 basis points on a constant currency basis)
    • GAAP revenue of $1,256 million, GAAP EPS of $(0.30) and GAAP operating margin of 10.2%
  • Q1 Guidance:
    • Non-GAAP revenue of $315 to $325 million and non-GAAP EPS of $0.30 to $0.35
    • License revenue of $75 to $85 million
    • GAAP revenue of $313 to $323 million and GAAP EPS of $0.36 to $0.40, including $16 million of restructuring charges associated with cost actions initiated in Q1’13
    • Assumes $1.30 USD / EURO
  • FY’13 Targets:
    • Non-GAAP revenue of $1,360 to $1,380 million; non-GAAP EPS of $1.70 to $1.80
    • Non-GAAP operating margin of approximately 21.5%
    • GAAP revenue of approximately $1,356 to $1,376 million and GAAP EPS of $1.10 to $1.20; GAAP operating margin of approximately 12.5%
    • Assumes $1.30 USD / EURO

The Q4 non-GAAP operating margin and non-GAAP EPS results exclude $11.9 million of stock-based compensation expense, $8.7 million of acquisition-related intangible asset amortization, $1.3 million of acquisition-related expense and $122.3 million of income tax adjustments reflecting in large part a charge to the income tax provision to establish a valuation allowance against deferred tax assets in the U.S. The Q4 non-GAAP EPS results include a tax rate of 23% and 121 million diluted shares outstanding. The Q4 GAAP EPS results include a tax rate of 250% and 119 million shares outstanding.

Results Commentary

James Heppelmann, president and chief executive officer, commented, “Customer demand for our solutions increased in the fourth quarter in the Americas and Pacific Rim, but results in Europe and Japan were impacted by more cautious buying behavior from customers in those regions. Our license revenue of $100.7 million was down 6% year over year on a constant currency basis, at the lower end of our guidance range, reflecting pressure on larger license transactions due to soft economic conditions in the global manufacturing industry. Despite the weak macroeconomic environment, PTC continued to drive margin expansion and earnings growth with Q4 non-GAAP EPS at the high end of our guidance range.”

Heppelmann added, “Our PLM market momentum was evident in Q4 as we delivered record quarterly revenue in the Americas as customers continued to deepen their relationships with PTC. Market adoption of our Creo® next-generation CAD solutions is benefiting from our 2.0 release delivered this past spring and we anticipate continued momentum in FY’13. The pipeline for SLM again expanded in Q4 and with the addition of complementary SLM solutions from Servigistics, we are excited about our unique positioning in the growing after-market service market.”

“We had 35 large deals (recognized license + services revenue of more than $1 million) in Q4’12, driven primarily by activity in the Americas, where the number of large deals increased 90% year over year. For FY’12 large deal activity was approximately flat year-over-year, however the mix of large deal revenue was skewed more heavily toward Services, reflecting strong Enterprise implementation activity and a lower level of large license transactions. During the quarter we recognized revenue from leading organizations such as CooperStandard, L.L. Bean, Pratt & Whitney Rocketdyne, Knorr Bremse, KHS, Stryker, and the United States Army.”

Jeff Glidden, chief financial officer, commented, “From a profitability standpoint we had another solid quarter; we delivered $0.50 non-GAAP EPS and achieved a 24.5% non-GAAP operating margin. For the full year, our non-GAAP EPS increased 20% year over year to $1.51 and we achieved a non-GAAP operating margin of 19.6%, up 190 basis points year over year. We ended Q4 with $490 million of cash, up from $238 million at the end of Q3, reflecting in part $230 million in proceeds drawn from our credit facility to finance the Servigistics acquisition (which was paid when the acquisition closed on October 2, 2012) and $20 million in operating cash flow. For FY’12 we had a solid year from a cash flow perspective, generating $217 million or $1.80 per share in operating cash flow.” In Q4, GAAP EPS was a loss of $0.71 reflecting a $124 million non-cash charge to the income tax provision to establish a valuation allowance against deferred U.S. tax assets. Q4 GAAP operating margin was 17.7%.

“Given our mix of revenue and expenses, historical profitability by region, and revenue and profitability outlook for FY’13, we are establishing a valuation allowance against our deferred tax assets in the U.S. This resulted in a non-cash $124 million GAAP charge in Q4,” Glidden concluded.

Q4 Earnings Conference Call and Webcast

Prepared remarks for the conference call have been posted to the investor relations section of their website. The prepared remarks will not be read live; the call will be primarily Q&A.

What:

 

 

PTC Fiscal Q4 Conference Call and Webcast

When:

Thursday, November 1st, 2012 at 8:30am (ET)

Dial-in:

1-800-857-5592 or 1-773-799-3757

Call Leader: James Heppelmann

Passcode: PTC

Webcast:

www.ptc.com/for/investors.htm

Replay:

The audio replay of this event will be archived for public replay until 4:00 pm (CT) on November 11, 2012 at 1-800-568-0480 Passcode: 5689. To access the replay via webcast, please visit www.ptc.com/for/investors.htm.

FY’13 Investor Day

Management will host its FY’13 Investor Day in New York City on Thursday, November 8, 2012 from 10:00am to 3:00pm (ET). This event will be held at the NASDAQ MarketSite in Times Square.

What:

 

 

PTC FY’13 Investor Day

When:

Thursday, November 8th, 2012 from 10:00am to 3:00pm (ET)

Register:

Contact Kristen Whoriskey at 781-370-5689 or kwhoriskey@ptc.com

Webcast:

www.ptc.com/for/investors.htm

Replay:

The audio replay of this event will be archived for public replay until November 18, 2012 at www.ptc.com/for/investors.htm.

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