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8-K - FORM 8-K - PTC INC. | form8-kq12017earnings.htm |
EX-99.2 - PREPARED REMARKS - PTC INC. | a20170117q117preparedrema.htm |
PTC Announces First Quarter FY’17 Results
Strong Start to FY’17 with Bookings and Subscription Bookings
Mix Both Exceeding the High End of Guidance
NEEDHAM, MA, January 18, 2017 - PTC
(NASDAQ: PTC) today reported financial
results for the first quarter ended December 31,
2016.
Overview
First quarter FY’17 GAAP revenue was $286 million; non-GAAP
revenue was $287 million. We recorded a GAAP net loss of $9 million
or $0.08 per share; non-GAAP net income was $31 million or $0.26
per share.
“Despite foreign currency headwinds, bookings of $90 million
and subscription bookings mix of 65% demonstrate a continuation of
the momentum we have been building over the past year,” said
James Heppelmann, President and CEO, PTC. “In particular, we
are very pleased with the first quarter results of our IoT
business, which continued to capitalize on our technology and
market leadership to deliver bookings well above our expectations.
Continued improvements in focus and execution drove solid
performance in our Solutions business, led by CAD bookings growth
in the double-digits.”
Heppelmann added, “Note that there were significant changes
in foreign currencies since we provided guidance in October 2016.
Despite these currency headwinds, we are maintaining our
FY’17 bookings guidance due to the Q1’17 over
performance, and we are reducing revenue and EPS guidance by less
than the estimated currency impact.”
Heppelmann continued, “We remain focused on creating
significant long-term value for our customers and shareholders
through our transition to a subscription business model. It is
important to note that a higher subscription mix relative to
guidance for the current quarter negatively impacts near-term
reported revenue and earnings, as we will record a greater
proportion of our revenue on a ratable basis.”
Operating and Financial Overview
Q1’17 operating and financial highlights are set forth below.
For additional details, please refer to the prepared remarks and
financial data tables that have been posted to the Investor
Relations section of our website at investor.ptc.com. Information
about our bookings and other reporting measures is provided on page
4.
o
Q1’17
license and subscription bookings were $90 million, up 31% YoY, and
above the high end of the guidance range of $70 million to $80
million. Changes in foreign currencies, since guidance was provided
in October 2016, had a negative $2 million impact on reported
bookings. Bookings results were driven by strong performance in
IoT, including one IoT mega deal (>$5m in bookings) and one IoT
large deal (>$1m in bookings), as well as solid execution within
our Solutions business, led by low-teens constant currency bookings
growth in CAD.
o
Q1’17
subscription annualized contract value (ACV) was $29 million, up
177% YoY and above our guidance range of $19 million to $22
million.
o
Q1’17
subscription bookings were 65% of total bookings, above our
guidance assumption of 55% and up from 28% in Q1’16. For
Q1’17, we estimate that this higher-than-guidance mix of
subscription in the quarter, while positive in the long-term,
reduced both GAAP and non-GAAP revenue by approximately $9 million
and reduced non-GAAP EPS by approximately $0.08 as compared to our
guidance, and reduced non-GAAP EPS by approximately $0.27 as
compared to Q1’16 subscription mix.
o
Strong
subscription results contributed to a significant increase in our
total deferred revenue – billed plus unbilled, which
increased year over year by $248 million, or 43%, to $825 million
as of the end of Q1’17.
o
Q1’17
GAAP software revenue was approximately $240 million and non-GAAP
software revenue was approximately $241 million. These results
reflect a higher mix of subscription than last year, and were both
down approximately 0.5% year over year and 1% year over year in
constant currency. We estimate that the higher mix of subscription
than last year reduced both GAAP and non-GAAP Q1’17 software
revenue by approximately $34 million or 14%.
o
Annualized
recurring revenue (ARR) was approximately $819 million for
Q1’17, an increase of 9% year-over-year.
o
Q1’17
GAAP operating expenses were approximately $200 million; non-GAAP
operating expenses were approximately $170 million.
o
Q1’17
GAAP operating margin was 2% and non-GAAP operating margin was 15%,
which compares to Q1’16 GAAP operating margin of (5%) and
non-GAAP operating margin of 21%. We estimate that the higher mix
of subscription in Q1’17 reduced non-GAAP operating margin by
approximately 260 basis points as compared to guidance mix, and
reduced non-GAAP operating margin by approximately 900 basis points
as compared to the Q1’16 subscription mix.
o
For
Q1’17, we recorded a GAAP income tax expense of $3 million,
or $0.02 per share; non-GAAP income tax expense was $2 million, or
$0.02 per share. The GAAP tax rate for the quarter was (41%) and
the non-GAAP tax rate for the quarter was 8%.
o
Cash
flow used by operations for Q1’17 was ($48) million, and free
cash flow was ($55) million, both of which include cash payments
for restructuring of $16 million.
o
We
ended the quarter with total cash, cash equivalents, and marketable
securities of $223 million and total debt,net of deferred issuance
costs, of $728 million.
Workforce Realignment
In October 2015, reflecting a realignment of resources toward
higher growth opportunities and our commitment to operating margin
improvement, we announced a plan to repurpose or eliminate
approximately 8% of worldwide positions and to consolidate select
facilities, which would incur a then expected restructuring charge
of $40 million to $50 million. As announced in October 2016, we
increased the scope of our realignment, which raised our estimate
to approximately $75 million to $80 million (and to approximately
13% of our September 30, 2015 worldwide headcount). As of December
31, 2016, we were materially complete with those actions and had
incurred total restructuring charges of approximately $83 million,
above the high end of our estimate due to some incremental
efficiencies which were identified during the quarter. Of that
amount, $37 million was recorded in Q1’16, $5 million in
Q2’16, $3 million in Q3’16, $32 million in Q4’16 and $6
million in Q1’17. Substantially all of the charges are
attributable to termination benefits.
FY’17 Business Outlook
For the second quarter ending April 1, 2017 and for fiscal year
2017, the company expects:
In millions except per share amounts
|
|
|
|
|
Operating Measures(1)
|
Q2’17
Low
|
Q2’17
High
|
FY’17
Low
|
FY’17
High
|
|
|
|
|
|
Subscription ACV
|
$24
|
$27
|
$130
|
$136
|
License and Subscription Bookings
|
$80
|
$90
|
$400
|
$420
|
Subscription % of Bookings
|
60%
|
60%
|
65%
|
65%
|
(1)
An explanation of the metrics included
in this table is provided below.
|
||||
Financial Measures
|
Q2’17
Low
|
Q2’17
High
|
FY’17
Low
|
FY’17
High
|
Subscription Revenue
|
$64
|
$64
|
$262
|
$267
|
Support Revenue
|
140
|
140
|
578
|
578
|
Perpetual License Revenue
|
31
|
36
|
140
|
150
|
Total Software Revenue(2)
|
235
|
240
|
980
|
995
|
Professional Services Revenue
|
45
|
45
|
185
|
185
|
Total Revenue(2)
|
$280
|
$285
|
$1,165
|
$1,180
|
|
|
|
|
|
Operating Expense (GAAP)
|
$184
|
$188
|
$768
|
$778
|
Operating Expense (Non-GAAP)
|
161
|
166
|
670
|
680
|
Operating Margin (GAAP)
|
4%
|
5%
|
5%
|
6%
|
Operating Margin (Non-GAAP)
|
16%
|
17%
|
17%
|
18%
|
Tax Rate (GAAP)
|
35%
|
35%
|
60%
|
60%
|
Tax Rate (Non-GAAP)
|
10%
|
8%
|
10%
|
8%
|
Shares Outstanding
|
117
|
117
|
117
|
117
|
EPS (GAAP)
|
$0.01
|
$0.04
|
$0.06
|
$0.09
|
EPS (Non-GAAP) (2)
|
$0.26
|
$0.31
|
$1.20
|
$1.30
|
Free Cash Flow
|
|
|
$127
|
$137
|
Adjusted Free Cash Flow(3)
|
|
|
$170
|
$180
|
(2) We estimate that, on an
annual basis, every 1% change in subscription mix will impact
annual revenue by $4 million, and annual non-GAAP EPS by $0.03. We
cannot estimate the effect on GAAP EPS due to the number of unknown
items, including tax items, included in GAAP
EPS.
(3) Adjusted Free Cash Flow is
net cash provided by (used in) operating activities less capital
expenditures, excluding restructuring payments of approximately $40
million and legal payments of approximately $3
million.
The
Q2’17 and full year FY’17 non-GAAP operating margin and
non-GAAP EPS guidance exclude the estimated items outlined in the
table below, as well as any tax effects and discrete tax items
(which are not known or reflected).
In millions
|
|
Q2’17
|
|
FY’17
|
|
|
|
|
|
Effect of acquisition accounting on fair value of acquired deferred
revenue
|
|
$ 1
|
|
$ 3
|
Restructuring charges
|
|
-
|
|
6
|
Intangible asset amortization expense
|
|
14
|
|
57
|
Stock-based compensation expense
|
|
17
|
|
71
|
Total Estimated Pre-Tax GAAP adjustments
|
|
$ 33
|
|
$ 138
|
PTC’s First Quarter FY’17 Results Conference Call,
Prepared Remarks and Financial Data Tables
Prepared remarks for the conference call and financial data tables
have been posted to the Investor Relations section of our website
at ptc.com. The Company will host a management presentation to
discuss results at 5:00 pm ET on Wednesday, January 18, 2017. To
access the live webcast, please visit PTC’s Investor
Relations website at investor.ptc.com at least 15 minutes before
the scheduled start time to download any necessary audio or plug-in
software. To participate in the live conference call, dial
800-857-5592 or 773-799-3757 and provide the passcode PTC. The call
will be recorded and a replay will be available for 10 days
following the call by dialing 866-508-6487 and entering the pass
code 3015. The archived webcast will also be available on
PTC’s Investor
Relations website.
Bookings Metrics
We offer both perpetual and subscription licensing options to our
customers, as well as monthly software rentals for certain
products. Given the difference in revenue recognition between the
sale of a perpetual software license (revenue is recognized at the
time of sale) and a subscription (revenue is deferred and
recognized ratably over the subscription term), we use bookings for
internal planning, forecasting and reporting of new license and
cloud services transactions. In order to normalize between
perpetual and subscription licenses, we define subscription
bookings as the subscription annualized contract value
(subscription ACV) of new subscription bookings multiplied by a
conversion factor of 2. We arrived at the conversion factor of 2 by
considering a number of variables including pricing, support,
length of term, and renewal rates. We define subscription ACV as
the total value of a new subscription booking divided by the term
of the contract (in days) multiplied by 365. If the term of the
subscription contract is less than a year, the ACV is equal to the
total contract value.
License and subscription bookings equal subscription bookings (as
described above) plus perpetual license bookings plus any monthly
software rental bookings during the period. Total ACV equals
subscription ACV (as described above) plus the annualized value of
incremental monthly software rental bookings during the
period.
Because subscription bookings is a metric we use to approximate the
value of subscription sales if sold as perpetual licenses, it does
not represent the actual revenue that will be recognized with
respect to subscription sales or that would be recognized if the
sales were perpetual licenses, nor does the annualized value of
monthly software rental bookings represent the value of any such
booking.
Annualized Recurring Revenue (ARR)
We currently offer our solutions on premise, as a cloud service,
and as SaaS offerings. Our on-premise solutions can be licensed
either as perpetual with annual support contracts or through a
subscription, which is a combination of license and support.
Beginning in FY’16, we launched a number of initiatives
designed to incentivize more of our customers to purchase our
solutions on a subscription basis. If successful, these initiatives
will cause an increasing percentage of our revenue to come from
subscriptions, which is expected to grow our recurring software
revenue.
To help investors understand and assess the success of this
expected revenue transition, we are providing an Annualized
Recurring Revenue operating measure. Annualized Recurring Revenue
(ARR) for a given quarter is calculated by dividing the portion of
non-GAAP software revenue attributable to subscription and support
for the quarter by the number of days in the quarter and
multiplying by 365. ARR should be viewed independently of revenue
and deferred revenue as it is an operating measure and is not
intended to be combined with or to replace either of those items.
ARR is not a forecast of future revenue, which can be impacted by
contract expiration and renewal rates, and does not include revenue
reported as perpetual license or professional services revenue in
our consolidated statement of income. Subscription and support
revenue and ARR disclosed in a quarter can be impacted by multiple
factors,
including but not limited to (1) the timing of the start of a
contract or a renewal, including the impact of on-time renewals,
support win-backs, and support conversions, which may vary by
quarter, (2) the ramping of committed monthly payments under a
subscription agreement over time, and (3) multiple other
contractual factors with the customer including other elements sold
with the subscription or support contract, and these elements can
result in variability in disclosed ARR.
Navigate Allocation
In FY’16, we launched Navigate, a ThingWorx-based IoT
solution for PLM. In FY’17, revenue and bookings for Navigate
are being allocated 50% to Solutions and 50% to IoT. FY’16
reported amounts have been reclassified to conform with the current
presentation. The impact of the reclassification on FY’16
revenue was immaterial.
Constant Currency Change Metric
Year-over-year changes in revenue and bookings on a constant
currency basis compare reported results excluding the effect of any
hedging converted into U.S. dollars based on the corresponding
prior year’s foreign currency exchange rates to reported
results for the comparable prior year period.
Important Information about Non-GAAP References
PTC
provides non-GAAP supplemental information to its financial
results. We use these non-GAAP measures, and we believe that they
assist our investors, to make period-to-period comparisons of our
operational performance because they provide a view of our
operating results without items that are not, in our view,
indicative of our operating results. We believe that these non-GAAP
measures help illustrate underlying trends in our business, and we
use the measures to establish budgets and operational goals,
communicated internally and externally, for managing our business
and evaluating our performance. We believe that providing non-GAAP
measures affords investors a view of our operating results that may
be more easily compared to the results of peer companies. In
addition, compensation of our executives is based in part on the
performance of our business based on these non-GAAP measures.
However, non-GAAP information should not be construed as an
alternative to GAAP information as the items excluded from the
non-GAAP measures often have a material impact on PTC’s
financial results and such items often recur. Management uses, and
investors should consider, non-GAAP measures in conjunction with
our GAAP results.
Non-GAAP
revenue, non-GAAP operating expenses, non-GAAP operating margin,
non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income
and non-GAAP EPS exclude the effect of the following
items:
●
Fair value of acquired
deferred revenue is a
purchase accounting adjustment recorded to reduce acquired deferred
revenue to the fair value of the remaining obligation, so our GAAP
revenue after an acquisition does not reflect the full amount of
revenue that would have been reported if the acquired deferred
revenue was not written down to fair value. We believe excluding
these adjustments to revenue from these contracts (and associated
costs in fair value adjustment to
deferred services cost) is
useful to investors as an additional means to assess revenue trends
of our business.
●
Stock-based
compensation is a non-cash
expense relating to stock-based awards issued to executive
officers, employees and outside directors and to our employee stock
purchase plan. We exclude this expense as it is a non-cash expense
and we assess our internal operations excluding this expense and
believe it facilitates comparisons to the performance of other
companies in our industry.
●
Amortization of acquired
intangible assets is a
non-cash expense that is impacted by the timing and magnitude of
our acquisitions. We believe the assessment of our
operations
excluding these costs is relevant to our
assessment of internal operations and comparisons to the
performance of other companies in our industry.
●
Acquisition-related charges
included in general and administrative costs are direct costs of potential and completed
acquisitions and expenses related to acquisition integration
activities, including transaction fees, due diligence costs,
severance and professional fees. In addition, subsequent
adjustments to our initial estimated amount of contingent
consideration associated with specific acquisitions are included
within acquisition-related charges. These costs are not considered
part of our normal operations as the occurrence and amount will
vary depending on the timing and size of
acquisitions.
●
Restructuring
charges include excess
facility restructuring charges and severance costs resulting from
reductions of personnel driven by modifications to our business
strategy and not considered part of our normal operations. These
costs may vary in size based on our restructuring
plan.
●
Non-operating credit facility
refinancing costs are
non-operating charges we record as a result of the refinancing of
our credit facility. We assess our internal operations excluding
these costs and believe it facilitates comparisons to the
performance of other companies in our industry.
●
Income tax adjustments
include the tax impact of the items
above and assumes that we are profitable on a non-GAAP basis in the
U.S. and one foreign jurisdiction, and eliminates the effect of the
valuation allowance recorded against our net deferred tax assets in
those jurisdictions. Additionally, we exclude other material tax
items that we view as non-ordinary course.
PTC also provides
information on “free cash flow” and “adjusted
free cash flow” to enable investors to assess our ability to
generate cash without incurring additional external financings and
to evaluate our performance against our announced long term goal of
returning approximately 40% of our free cash flow to shareholders
via stock repurchases. Free cash flow is net cash provided by (used
in) operating activities less capital expenditures; adjusted free
cash flow is free cash flow excluding restructuring payments and
certain identified non-ordinary course payments. Free cash flow and
adjusted free cash flow are not measures of cash available for
discretionary expenditures.
Forward-Looking
Statements
Statements in this press release that are not historic facts,
including statements about our second quarter and full fiscal 2017
targets and other future financial and growth expectations, and
anticipated tax rates, are forward-looking statements that involve
risks and uncertainties that could cause actual results to differ
materially from those projected. These risks include: the
macroeconomic and/or global manufacturing climates may not improve
or may deteriorate; customers may not purchase our solutions when
or at the rates we expect; our businesses, including our Internet
of Things (IoT) business, may not expand and/or generate the
revenue we expect; foreign currency exchange rates may vary from
our expectations and thereby affect our reported revenue and
expense; the mix of revenue between license & subscription
solutions, support and professional services could be different
than we expect, which could impact our EPS results; our customers
may purchase more of our solutions as subscriptions than we expect,
which would adversely affect near-term revenue, operating margins,
and EPS; customers may not purchase subscriptions at the rate we
expect, which could impact our ability to achieve expected
subscription bookings and delay our exit from the subscription
trough; sales of our solutions as subscriptions may not have the
longer-term effect on revenue that we expect; our workforce
realignment may not achieve the expense savings we expect and may
adversely affect our operations; we may be unable to generate
sufficient operating cash flow to return 40% of free cash flow to
shareholders and other uses of cash or our credit facility limits
could preclude share repurchases; and any repatriation of cash held
outside the U.S., which constitutes a significant portion of our
cash, could be subject to significant taxes. In addition, our
assumptions concerning our future GAAP and non-GAAP effective
income tax rates are based
on estimates and other factors that could change, including the
geographic mix of our revenue, expenses and profits and loans and
cash repatriations from foreign subsidiaries. Other risks and
uncertainties that could cause actual results to differ materially
from those projected are detailed from time to time in reports we
file with the Securities and Exchange Commission, including our
most recent Annual Report on Form 10-K.
PTC and the PTC logo are trademarks or registered trademarks of PTC
Inc. or its subsidiaries in the United States and in other
countries.
About PTC (NASDAQ: PTC)
PTC has the most robust Internet of Things technology in the world.
In 1986 we revolutionized digital 3D design, and in 1998 were first
to market with Internet-based PLM. Now our leading IoT and AR
platform and field-proven solutions bring together the physical and
digital worlds to reinvent the way you create, operate, and service
products. With PTC, global manufacturers and an ecosystem of
partners and developers can capitalize on the promise of the IoT
today and drive the future of innovation.
PTC.com @PTC Blogs
PTC Investor Relations Contacts
Tim Fox, 781-370-5961
tifox@ptc.com
Jason Howard, 781-370-5087
jahoward@ptc.com
PTC
Inc.
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
(in
thousands, except per share data)
|
Three Months Ended
|
|
|
December 31,
|
January 2,
|
|
2016
|
2016
|
|
|
|
Revenue: |
|
|
Subscription
|
$54,362
|
$22,176
|
Support
|
151,478
|
171,756
|
Total
recurring software
|
205,840
|
193,932
|
Perpetual
license
|
34,379
|
47,763
|
Total
software
|
240,219
|
241,695
|
Professional
services
|
46,108
|
49,322
|
Total
revenue
|
286,327
|
291,017
|
|
|
|
Cost
of revenue:
|
|
|
Cost of software revenue
(1)
|
42,947
|
36,814
|
Cost of professional services
revenue(1)
|
39,168
|
43,333
|
Total
cost of revenue
|
82,115
|
80,147
|
|
|
|
Gross
margin
|
204,212
|
210,870
|
|
|
|
Operating
expenses:
|
|
|
Sales and marketing
(1)
|
90,690
|
82,429
|
Research and development
(1)
|
57,914
|
57,669
|
General and administrative
(1)
|
36,695
|
38,567
|
Amortization
of acquired intangible assets
|
8,067
|
8,350
|
Restructuring
charges
|
6,285
|
37,147
|
Total
operating expenses
|
199,651
|
224,162
|
|
|
|
Operating
income (loss)
|
4,561
|
(13,292)
|
Other
expense, net
|
(11,064)
|
(6,253)
|
Income
(loss) before income taxes
|
(6,503)
|
(19,545)
|
Provision
(benefit) for income taxes
|
2,638
|
4,347
|
Net
income (loss)
|
$(9,141)
|
$(23,892)
|
|
|
|
Earnings
(loss) per share:
|
|
|
Basic
|
$(0.08)
|
$(0.21)
|
Weighted
average shares outstanding
|
115,290
|
114,151
|
|
|
|
Diluted
|
$(0.08)
|
$(0.21)
|
Weighted
average shares outstanding
|
115,290
|
114,151
|
(1)
The amounts in the tables above include stock-based compensation as
follows:
|
Three Months Ended
|
|
|
December 31,
|
January 2,
|
|
2016
|
2016
|
Cost
of software revenue
|
$1,437
|
$1,905
|
Cost
of professional services revenue
|
1,457
|
1,451
|
Sales
and marketing
|
3,621
|
4,282
|
Research
and development
|
2,997
|
2,513
|
General
and administrative
|
8,476
|
13,038
|
Total
stock-based compensation
|
$17,988
|
$23,189
|
PTC Inc.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(UNAUDITED)
(in thousands, except per share data)
|
Three Months Ended
|
|
|
December 31,
|
January 2,
|
|
2016
|
2016
|
|
|
|
GAAP
revenue
|
$286,327
|
$291,017
|
Fair
value adjustment of acquired deferred subscription
revenue
|
646
|
188
|
Fair
value adjustment of acquired deferred services revenue
|
268
|
309
|
Non-GAAP
revenue
|
$287,241
|
$291,514
|
|
|
|
GAAP
gross margin
|
$204,212
|
$210,870
|
Fair
value adjustment of acquired deferred revenue
|
914
|
497
|
Fair
value adjustment to deferred services cost
|
(113)
|
(132)
|
Stock-based
compensation
|
2,894
|
3,356
|
Amortization
of acquired intangible assets included in cost of software
revenue
|
6,388
|
5,127
|
Non-GAAP
gross margin
|
$214,295
|
$219,718
|
|
|
|
GAAP
operating income (loss)
|
$4,561
|
$(13,292)
|
Fair
value adjustment of acquired deferred revenue
|
914
|
497
|
Fair
value adjustment to deferred services cost
|
(113)
|
(132)
|
Stock-based
compensation
|
17,988
|
23,189
|
Amortization
of acquired intangible assets included in cost of software
revenue
|
6,388
|
5,127
|
Amortization
of acquired intangible assets
|
8,067
|
8,350
|
Acquisition-related
charges included in general and administrative costs
|
169
|
1,207
|
Restructuring
charges
|
6,285
|
37,147
|
Non-GAAP operating income
(1)
|
$44,259
|
$62,093
|
|
|
|
GAAP
net income (loss)
|
$(9,141)
|
$(23,892)
|
Fair
value adjustment of acquired deferred revenue
|
914
|
497
|
Fair
value adjustment to deferred services cost
|
(113)
|
(132)
|
Stock-based
compensation
|
17,988
|
23,189
|
Amortization
of acquired intangible assets included in cost of software
revenue
|
6,388
|
5,127
|
Amortization
of acquired intangible assets
|
8,067
|
8,350
|
Acquisition-related
charges included in general and administrative costs
|
169
|
1,207
|
Restructuring
charges
|
6,285
|
37,147
|
Non-operating
credit facility refinancing costs
|
-
|
2,359
|
Income tax adjustments
(2)
|
148
|
4,930
|
Non-GAAP
net income
|
$30,705
|
$58,782
|
|
|
|
GAAP
diluted earnings (loss) per share
|
$(0.08)
|
$(0.21)
|
Fair
value of acquired deferred revenue
|
0.01
|
-
|
Stock-based
compensation
|
0.15
|
0.20
|
Amortization
of acquired intangibles
|
0.12
|
0.12
|
Acquisition-related
charges
|
-
|
0.01
|
Restructuring
charges
|
0.05
|
0.32
|
Non-operating
credit facility refinancing costs
|
-
|
0.02
|
Income
tax adjustments
|
-
|
0.04
|
Non-GAAP
diluted earnings per share
|
$0.26
|
$0.51
|
|
|
|
GAAP
diluted weighted average shares outstanding
|
115,290
|
114,151
|
Dilutive
effect of stock based compensation plans
|
1,735
|
1,088
|
Non-GAAP
diluted weighted average shares outstanding
|
117,025
|
115,239
|
(1)
Operating margin impact of non-GAAP adjustments:
|
Three Months Ended
|
|
|
December 31,
|
January 2,
|
|
2016
|
2016
|
GAAP
operating margin
|
1.6%
|
-4.6%
|
Fair
value of acquired deferred revenue
|
0.3%
|
0.2%
|
Fair
value adjustment to deferred services cost
|
0.0%
|
0.0%
|
Stock-based
compensation
|
6.3%
|
8.0%
|
Amortization
of acquired intangibles
|
5.0%
|
4.6%
|
Acquisition-related
charges
|
0.1%
|
0.4%
|
Restructuring
charges
|
2.2%
|
12.8%
|
Non-GAAP
operating margin
|
15.4%
|
21.3%
|
(2)
We have recorded a full valuation allowance against our U.S. net
deferred tax assets and a valuation allowance against net deferred
tax assets in certain foreign jurisdictions. As we are profitable
on a non-GAAP basis, the 2017 and 2016 non-GAAP tax provisions are
being calculated assuming there is no valuation allowance. Income
tax adjustments for the three months ended January 2, 2016 reflect
the tax effects of non-GAAP adjustments which are calculated by
applying the applicable tax rate by jurisdiction to the non-GAAP
adjustments listed above. Additionally, our non-GAAP tax provision
for the three months ended January 2, 2016 excludes a $1.6 million
tax provision related to a legal settlement accrual. Beginning in
the second quarter of 2016, we changed our methodology to adopt a
method that is more reflective of our full year expected non-GAAP
tax rate. For the three months ended December 31, 2016, our
non-GAAP tax provision is based on our annual expected non-GAAP tax
rate applied to our year-to-date non-GAAP earnings.
PTC Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
|
December 31,
|
September 30,
|
|
2016
|
2016
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash
and cash equivalents
|
$173,367
|
$277,935
|
Marketable
securities
|
49,834
|
49,616
|
Accounts
receivable, net
|
132,853
|
161,357
|
Property
and equipment, net
|
65,885
|
67,113
|
Goodwill
and acquired intangible assets, net
|
1,453,219
|
1,480,118
|
Other
assets
|
317,946
|
305,405
|
|
|
|
Total
assets
|
$2,193,104
|
$2,341,544
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Deferred
revenue
|
$375,029
|
$413,657
|
Debt,
net of deferred issuance costs
|
727,925
|
747,416
|
Other
liabilities
|
271,185
|
337,805
|
Stockholders'
equity
|
818,965
|
842,666
|
|
|
|
Total
liabilities and stockholders' equity
|
$2,193,104
|
$2,341,544
|
PTC Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
|
Three Months Ended
|
|
|
December 31,
|
January 2,
|
|
2016
|
2016
|
|
|
|
Cash
flows from operating activities:
|
|
|
Net
income (loss)
|
$(9,141)
|
$(23,892)
|
Stock-based
compensation
|
17,988
|
23,189
|
Depreciation
and amortization
|
21,454
|
20,613
|
Accounts
receivable
|
21,184
|
35,219
|
Accounts
payable and accruals
|
(53,608)
|
10,375
|
Deferred
revenue
|
(11,726)
|
1,262
|
Income
taxes
|
(6,096)
|
(3,355)
|
Excess
tax benefits from stock-based awards
|
(102)
|
(56)
|
Other
|
(27,931)
|
(2,101)
|
Net
cash (used) provided by operating activities
|
(47,978)
|
61,254
|
|
|
|
Capital
expenditures
|
(7,100)
|
(4,185)
|
Acquisitions of businesses, net
of cash acquired (4)
|
-
|
(64,780)
|
Proceeds
(payments) on debt, net
|
(20,000)
|
50,000
|
Proceeds
from issuance of common stock
|
-
|
1
|
Payments
of withholding taxes in connection with
|
|
|
vesting
of stock-based awards
|
(18,623)
|
(14,833)
|
Excess
tax benefits from stock-based awards
|
102
|
56
|
Other
financing & investing activities
|
(1,209)
|
(2,300)
|
Foreign
exchange impact on cash
|
(9,760)
|
(1,833)
|
|
|
|
Net
change in cash and cash equivalents
|
(104,568)
|
23,380
|
Cash
and cash equivalents, beginning of period
|
277,935
|
273,417
|
Cash
and cash equivalents, end of period
|
$173,367
|
$296,797
|
(4)
We acquired Vuforia on November 3, 2015 for $65 million (net of
cash acquired).