(PARAMETRIC)(PMTC) Parametric Technology Announces Financial Results For Its
Third Quarter of Fiscal 1998
(Business Wire; 07/16/98)
Business/Technology Editors
WALTHAM, Mass.--(BUSINESS WIRE)--July 16, 1998--Parametric Technology
Corporation (NASDAQ:PMTC), a global provider of product development and
enterprise information management software solutions, today reported its
third quarter results for the period ending July 4, 1998.
Parametric Technology's total software revenue for the third quarter was
$245.0 million, compared with $249.3 million for the same period last year.
Pro forma net income, which excludes the write-off of purchased in-process
research and development discussed below, was $44.2 million, or $0.16 per
share, compared with pro forma net income of $40.5 million, or $0.15 per
share, for the third quarter of fiscal 1997.
During the third quarter of fiscal 1998, Parametric Technology completed
its acquisition of ICEM Technologies for a purchase price of approximately
$40 million and took a one-time charge of $29.0 million as a write-off of
in- process R&D. Net income for the third quarter, including the write-off,
was $15.2 million, or $0.05 per share, compared with $38.6 million, or
$0.14 per share, for the same period last year.
All earnings per share amounts represent diluted earnings per share. These
amounts also reflect a two-for-one stock dividend, effective March 6, 1998.
"As we indicated in our public announcement on July 1st, we are clearly
disappointed in these results which we now believe are attributable to
several factors," said Steven C. Walske, chairman and chief executive
officer of Parametric Technology.
"During the third quarter, we undertook two major initiatives involving our
sales force: the introduction of our new Windchill(TM) enterprise product
data management technology and a shift in focus to providing increased
support and attention to our major accounts. We undertook both initiatives
because they present long-term opportunities to enhance revenue. Evidence
that they were negatively impacting current sales activity did not emerge
until very late in the quarter, in part because PTC's generation of license
revenue is typically back-end loaded in any given quarter.
"In this case, the unanticipated impact of the sales force initiatives was
compounded by end-of-quarter delays in closing several large deals that
involved the introduction of Windchill enterprise solutions. In addition,
on the external side, we continued to experience weakness in the
Asia/Pacific region. Taken together, these factors all contribute to our
cautious business outlook for the balance of fiscal 1998 and at least the
first half of fiscal 1999."
Walske added, "While we have no intention of downplaying our disappointing
results or our cautious near-term outlook, there were several positive
developments to mention from the quarter:
--PTC formally shipped its new Windchill family of Web-based enterprise
information management solutions, and received numerous orders for software
from early adopters, including the Airbus Consortium, BMW Rolls-Royce,
Compaq, Groupe Schneider, John Deere, Lockheed Martin and Sun Microsystems.
-- PTC continued to strengthen its business relationships with key
customers that have long associations with Computervision products and
services, as evidenced by orders received during the quarter from Airbus,
Rolls- Royce plc and the Rover Group; and
--PTC completed its acquisition of ICEM Technologies, a German-based
developer of advanced surfacing and reverse engineering software tools used
by body and styling engineers in the automotive and aerospace industries."
Walske concluded: "Going forward, PTC's primary challenge is to re-
accelerate growth in its core business while at the same time transitioning
to a new role as an enterprise and engineering solutions provider. Our
larger objective is the integration of our data management and engineering
software technologies to provide customers with a complete product
definition that is fully leveragable throughout all facets of their
enterprise. Our ability to achieve this goal will enable us to address
bigger, faster growing markets and it represents a major potential catalyst
for PTC's future growth."
Separately, Walske noted: "Unfortunately, it is common practice to file a
class action lawsuit when there is a decline in stock price whether or not
there is any basis for the action. Parametric Technology believes that the
class action lawsuits filed against it are entirely without merit and the
company intends to defend itself vigorously."
Parametric Technology Corporation is one of the world's largest independent
software companies and a leading supplier of software tools used to
automate the mechanical development of a product from its conceptual design
through production. Worldwide, more than 21,000 companies employ PTC's
integrated software technologies to reduce time to market, improve
engineering processes, and optimize product quality. Parametric
Technology's growth strategy emphasizes technological leadership,
aggressive price/performance, hardware independence, worldwide
distribution, and extensive customer support.
CONTACT: Parametric Technology Corp.
John W. Hudson, 781/398-5561
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