PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
July 4, June 28, July 4, June 28,
2009 2008 2009 2008
Revenue:
License $ 49,450 $ 79,911 $ 142,022 $ 228,748
Service 176,709 191,837 549,820 542,035
Total revenue 226,159 271,748 691,842 770,783
Costs and expenses:
Cost of license revenue(1) 7,644 8,980 22,204 20,563
Cost of service revenue(1) 66,162 76,582 214,205 221,437
Sales and marketing(1) 73,823 78,762 225,072 223,149
Research and development(1) 46,562 47,374 139,675 134,656
General and administrative(1) 19,245 20,294 58,375 64,653
Amortization of acquired intangible assets 3,827 4,044 11,510 11,252
In-process research and development 300 -- 300 1,887
Restructuring charges 6,609 3,790 16,397 15,367
Total costs and expenses 224,172 239,826 687,738 692,964
Operating income 1,987 31,922 4,104 77,819
Other expense, net (491 ) (7,110 ) (1,812 ) (5,859 )
Income before income taxes 1,496 24,812 2,292 71,960
Provision for (benefit from) income taxes (2,292 ) 10,342 (13,330 ) 28,762
Net income $ 3,788 $ 14,470 $ 15,622 $ 43,198
Earnings per share:
Basic $ 0.03 $ 0.13 $ 0.14 $ 0.38
Weighted average shares outstanding 115,194 113,491 114,843 113,661
Diluted $ 0.03 $ 0.12 $ 0.13 $ 0.37
Weighted average shares outstanding 117,074 117,363 116,691 117,565
(1) The amounts in the tables above include stock-based compensation as follows:
Three Months Ended Nine Months Ended
July 4, June 28, July 4, June 28,
2009 2008 2009 2008
Cost of license revenue $ 11 $ 12 $ 28 $ 26
Cost of service revenue 2,055 2,298 5,601 6,867
Sales and marketing 3,491 3,130 8,592 8,933
Research and development 1,986 2,322 5,810 6,929
General and administrative 3,969 3,387 8,742 9,926
Total stock-based compensation $ 11,512 $ 11,149 $ 28,773 $ 32,681
PARAMETRIC TECHNOLOGY CORPORATION
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (UNAUDITED)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
July 4, June 28, July 4, June 28,
2009 2008 2009 2008
GAAP revenue $ 226,159 $ 271,748 $ 691,842 $ 770,783
Fair value adjustment of acquired CoCreate deferred maintenance revenue -- 978 -- 3,920
Non-GAAP revenue $ 226,159 $ 272,726 $ 691,842 $ 774,703
GAAP operating income $ 1,987 $ 31,922 $ 4,104 $ 77,819
Fair value adjustment of acquired CoCreate deferred maintenance revenue -- 978 -- 3,920
Stock-based compensation 11,512 11,149 28,773 32,681
Amortization of acquired intangible assets
included in cost of license revenue 5,221 6,289 14,592 13,850
Amortization of acquired intangible assets
included in cost of service revenue -- 17 8 51
Amortization of acquired intangible assets 3,827 4,044 11,510 11,252
In-process research and development 300 -- 300 1,887
Restructuring charges 6,609 3,790 16,397 15,367
Non-GAAP operating income $ 29,456 $ 58,189 $ 75,684 $ 156,827
GAAP net income $ 3,788 $ 14,470 $ 15,622 $ 43,198
Fair value adjustment of acquired CoCreate deferred maintenance revenue -- 978 -- 3,920
Stock-based compensation 11,512 11,149 28,773 32,681
Amortization of acquired intangible assets included in cost of license revenue 5,221 6,289 14,592 13,850
Amortization of acquired intangible assets included in cost of service revenue -- 17 8 51
Amortization of acquired intangible assets 3,827 4,044 11,510 11,252
In-process research and development 300 -- 300 1,887
Restructuring charges 6,609 3,790 16,397 15,367
One-time non-cash loss included in other expense, net (2) -- 6,206 -- 6,206
Income tax adjustments (3) (8,325 ) (7,724 ) (29,244 ) (22,371 )
Non-GAAP net income $ 22,932 $ 39,219 $ 57,958 $ 106,041
GAAP diluted earnings per share $ 0.03 $ 0.12 $ 0.13 $ 0.37
Stock-based compensation 0.10 0.09 0.25 0.28
All other items identified above 0.07 0.12 0.12 0.25
Non-GAAP diluted earnings per share $ 0.20 $ 0.33 $ 0.50 $ 0.90
Weighted average shares outstanding – diluted
Non-GAAP diluted earnings per share 117,074 117,363 116,691 117,565
(2) Reflects a one-time non-cash loss from the liquidation of certain legal entities related to previous acquisitions.
(3) Reflects the tax effect of non-GAAP adjustments above, as well as the effect of a $7.6 million one-time tax benefit recorded in the second quarter of 2009 due to the recognition of deferred tax assets in a foreign jurisdiction.
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
July 4, September 30,
2009 2008
ASSETS
Cash and cash equivalents $ 231,345 $ 256,941
Accounts receivable, net 149,198 201,509
Property and equipment, net 58,560 55,253
Goodwill and acquired intangibles, net 593,280 587,537
Other assets 264,139 248,333
Total assets $ 1,296,522 $ 1,349,573
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred revenue $ 255,206 $ 258,295
Borrowings under revolving credit facility 55,286 88,505
Other liabilities 240,995 300,248
Stockholders' equity 745,035 702,525
Total liabilities and stockholders' equity $ 1,296,522 $ 1,349,573
PARAMETRIC TECHNOLOGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended Nine Months Ended
July 4, June 28, July 4, June 28,
2009 2008 2009 2008
Cash flows from operating activities:
Net income $ 3,788 $ 14,470 $ 15,622 $ 43,198
Stock-based compensation 11,512 11,149 28,773 32,681
Depreciation and amortization 15,601 16,636 45,558 43,484
Accounts receivable (9,560 ) 268 67,455 69,819
Accounts payable and accruals(4) 963 1,041 (29,986 ) (29,155 )
Deferred revenue (9,559 ) (5,411 ) (2,700 ) 16,305
In-process research and development 300 -- 300 1,887
Income taxes (18,584 ) (868 ) (53,371 ) 1,645
Other (5,814 ) 16,017 5,646 1,242
Net cash (used) provided by operating activities (11,353 ) 53,302 77,297 181,106
Capital expenditures (8,543 ) (9,785 ) (23,809 ) (20,492 )
Acquisitions of businesses, net of cash acquired (5) (24,315 ) -- (32,790 ) (261,592 )
Proceeds from (payments on) debt, net -- (53,643 ) (31,951 ) 98,999
Repurchases of common stock -- (5,288 ) (9,581 ) (27,297 )
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