PTC Reports Fiscal 2002 Third Quarter Results

Third Quarter Revenue and EPS In Line With Company Targets

NEEDHAM, Mass. - July 16 - PTC (Nasdaq: PMTC), the product development company(TM), today reported revenue totaling $182.5 million for the third quarter ended June 29, 2002, compared with $230.7 million for the same period last year. Pro forma net loss, excluding non-recurring charges and the amortization of intangible assets, was $5.8 million, or $0.02 per diluted share, compared to pro forma net income of $6.7 million, or $0.03 per diluted share, for the year-ago period.

Including non-recurring charges and the amortization of intangible assets, the net loss for the third quarter was $24.6 million, or $0.09 per diluted share, compared to a net loss of $2.7 million, or $0.01 per diluted share, for the same period last year. During the quarter, the Company recorded non-recurring charges of $18.4 million related to previously announced actions to reduce its cost structure.

"Despite a continued weak IT spending environment, we met the third quarter targets we set in April," said C. Richard Harrison, president and chief executive officer. "Solid execution of our cost reduction programs and consistent focus on our key initiatives will position us for enhanced earnings potential once the economy improves. This quarter, cash and investments increased sequentially to $203.9 million."

Operating Highlights

Total Windchill(R) revenue in the third quarter was $46.7 million, up sequentially from $40.0 million. Windchill sales included orders from Boston Scientific, Guidant Corporation and Tokyo Electron. The Company's total design solutions revenue for the third quarter was $135.8 million, compared to $145.0 million last quarter. Design solutions sales included orders from BAE Systems, DCN and Kyocera Mita Corporation.

Highlights from the quarter include:

• PTC/USER World Event -- PTC/USER, an independent organization of PTC customers who serve to educate the PTC user community and act as a unified voice to PTC, held its annual World Conference in Atlanta in June.
  
  The conference drew over 1300 users, an increase in attendance over the 2001 conference. The user group also held regional conferences in Europe in May and Japan last week, which were attended by 600 and 420 users respectively.
  
• Pro/ENGINEER(R) Wildfire(TM) introduction -- Pro/ENGINEER Wildfire was introduced to over 7,500 customers and prospects during an online event held on June 18, 2002 and archived at http://www.ptc.com, as well as at each of the PTC/User conferences. Pro/ENGINEER Wildfire represents PTC's most significant release of Pro/ENGINEER, combining new advances in both personal and process productivity in an easier-to-use, web-connected, more powerful platform. To date, customers have provided unprecedented positive feedback on the product.
  
• Partner Programs -- PTC continues to gain traction in its various alliance programs as systems integrators, value added resellers and software and hardware partners strengthen their commitment to PLM. PTC's systems integrator partners continue to have a positive impact on Windchill sales. PTC now has over 650 premier partner consultants technically trained. Our value added resellers have been improving their performance with a strong commitment from PTC to develop the channel and help it succeed.
  
• Restructuring -- In April, PTC announced a workforce reduction of approximately 300 people to be completed by the end of fiscal 2002. Severance and excess facility costs associated with PTC's cost reduction initiatives resulted in a non-recurring charge in the quarter of $18.4 million. PTC expects to receive the full benefit of the cost reductions in the quarter beginning October 1, 2002.

"We continue to be enthused about the market potential for product lifecycle management solutions and our leadership position in this emerging space," concluded Harrison. "During this challenging economic climate, we are maturing all of our major corporate initiatives: delivering our Product First message, driving technology openness and interoperability, strengthening partner programs, improving customer satisfaction, while reducing our cost structure. As we enter the new fiscal year in October, our financial model will support break-even operating profitability at $180 million in revenue per quarter, and can be highly leveraged at increased revenue levels once IT spending resumes."

The Company will provide detailed financial information and an outlook update on its third quarter results conference call and live webcast on July 16 at 10 a.m. ET. To access the live webcast, please visit http://www.ptc.com/for/investors.htm. A replay of the call will be available until 5:00 p.m. ET on July 19, 2002. To access the replay by phone, dial 402-280-9991. To access the replay via Webcast, please visit http://www.ptc.com/for/investors.htm. The unaudited consolidated statement of income and condensed consolidated balance sheet for the third 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. The company services more than 33,000 customers worldwide. 

http://www.ptc.com 

 

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