PTC INC. 10-K Summary: Fiscal Year Ended September 30, 1996
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended September 30, 1996, for Parametric Technology Corporation (PTC). PTC develops, markets, and supports the Pro/ENGINEER family of software products, a suite of over 70 application modules for mechanical computer-aided design, manufacturing, and engineering (CAD/CAM/CAE). The company operates globally with 2,774 employees as of period end, serving industries including aerospace, automotive, and electronics. The company reported no single customer accounting for more than 10% of revenue.
Key Financial Metrics
Revenue, Profit, Cash Flow, Margins, Debt, and Liquidity: The filing text does not provide specific values for total revenue, net income, operating margins, cash flow, or total debt. These figures are incorporated by reference from the 1996 Annual Report to Stockholders (Exhibit 13.1) and are not present in the provided text.
Research and Development (R&D): R&D expenses for the fiscal year ended September 30, 1996, were $39,476,000.
Allowance for Doubtful Accounts: The balance at the end of the period was $2,910,000.
Market Capitalization: The aggregate market value of voting stock held by nonaffiliates as of October 31, 1996, was approximately $5.4 billion.
Material Changes and Acquisitions
- Acquisition of Reflex Technology: On July 10, 1996, PTC acquired project modeling and management software ("Reflex") from Greenshire License Co. NV for $32,119,000. Consideration included 113,000 shares of common stock (fair value $5,000,000), $5,000,000 payable in Q4 fiscal 1997, and $22,119,000 paid in cash during fiscal 1996.
- Acquisition of Rasna Corporation: Completed in August 1995 (pooling of interests), involving the issuance of 7,541,000 shares of common stock.
- Acquisition of CDRS: Completed in April 1995 for approximately $33,507,000 in cash.
- Accountant Change: The company changed its independent auditors from Price Waterhouse LLP to Coopers & Lybrand L.L.P. effective for the fiscal year ended September 30, 1996.
- R&D Growth: R&D expenses increased significantly from $25,591,000 in 1995 to $39,476,000 in 1996.
Guidance, Outlook, and Risks
Outlook: Management intends to continue expanding the Pro/ENGINEER product family, focusing on tools for simulating design, manufacturing, and function, as well as managing engineering data. The company plans to issue two major product releases per year.
Risks and Contingencies:
- Competition: The CAD/CAM/CAE industry is highly competitive with rapid technological advances. Competitors include Dassault/IBM (CADAM/CATIA), Computervision (CADDS), EDS (UNIGRAPHICS), Intergraph (I/EMS), and Structural Dynamics Research Corporation (I-DEAS).
- Forward-Looking Statements: The filing includes a safe harbor disclaimer noting that future results may differ materially from projections due to various risks and uncertainties.
- Intellectual Property: While the company relies on copyrights and trade secrets, there is a risk of unauthorized copying or infringement claims, particularly in foreign jurisdictions.
- Personnel: Success depends on attracting and retaining skilled technical and sales personnel in a competitive market.
Investor Verification Checklist
- Verify total revenue, net income, and cash flow figures in the 1996 Annual Report to Stockholders (Exhibit 13.1), as they are not listed in this 10-K text.
- Review the "Management's Discussion and Analysis" section in the Annual Report for detailed margin analysis and liquidity ratios.
- Confirm the integration status and financial impact of the Reflex acquisition ($32.1M) and the Rasna merger.
- Assess the impact of the 54% increase in R&D spending ($25.6M to $39.5M) on future profitability.
- Monitor the transition of audit responsibilities from Price Waterhouse to Coopers & Lybrand for any potential changes in accounting treatment.