|By Business Wire||
|August 4, 2014 05:00 PM EDT||
PTC (Nasdaq: PTC) today announced a new capital allocation strategy that further enhances the company’s focus on sustainable growth and shareholder value. As part of the new strategy, PTC has set a long-term goal to return approximately 40% of free cash flow to shareholders. This goal reflects PTC’s confidence in its ability to generate consistent free cash flow in the years ahead that will enable the company to continue investing in organic and inorganic growth, while enhancing the return of capital to shareholders.
As part of this strategy, PTC’s Board of Directors has authorized a new $600 million share repurchase program ending September 30, 2017. As part of this authorization, PTC expects to repurchase $125 million of its common stock by the end of fiscal 2014 using an accelerated stock repurchase (ASR) agreement. Future repurchases are expected to be carried out through open market share repurchases or privately negotiated transactions beginning in Q1’15. These share repurchases will be executed based on then-current business and market factors, so the actual return of capital in any single quarter may be significantly more or less than the long-term goal of 40% of free cash flow. PTC may use cash from operations or may borrow funds under its credit facility to make such repurchases. PTC expects to borrow $125 million under its existing credit facility for the ASR.
PTC also plans to enter into a new $1.5 billion credit facility, with a syndicate of existing and new banks. Upon closing, the new facility would replace the company’s existing $1.0 billion credit facility, which is scheduled to mature on January 30, 2019.
James Heppelmann, president and chief executive officer, commented, “This capital allocation strategy reflects our ongoing commitment at PTC to generate significant free cash flow on a consistent basis and drive value for our shareholders.”
Jeff Glidden, chief financial officer, commented, “The net effect of today’s announcement will be to increase our target non-GAAP EPS growth in FY’15 to the mid-teens, from the low to mid-teens previously, assuming a stable macroeconomic environment and no significant currency fluctuations. Repurchases in accordance with our return of capital goal are also expected to result in a declining share count in FY’16 and beyond. We continue to target total revenue growth in the low to mid single digit range, including expected revenue from Atego and Axeda and plan to provide formal FY’15 guidance in conjunction with our Q4 earnings release later this year.”
Conference Call and Webcast
PTC is hosting a 30 minute investor call and webcast to discuss its new capital allocation strategy. Following introductory comments by James Heppelmann and Jeff Glidden, we will take Q&A.
|What:||PTC Capital Allocation Strategy Conference Call and Webcast|
|When:||Tuesday August 5th, 2014 at 8:00am (ET)|
1-800-857-5592 or 1-773-799-3757
Call Leader: James Heppelmann
The audio replay of this event will be archived for public replay until 4:00 pm (CT) on August 15th, 2014.
Dial-in: 1-866-501-7040 Passcode: 7649
To access the replay via webcast, please visit www.ptc.com/for/investors.htm.
Important Information About Non-GAAP References
PTC provides non-GAAP supplemental information to its financial results. Non-GAAP EPS excludes stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, acquisition-related expenses, costs associated with terminating a U.S. pension plan, certain identified non-operating gains and losses, and the related tax effects of the preceding items and discrete tax items. We use non-GAAP measures, and we believe that non-GAAP measures 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 core operating results. We believe that t 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. Management uses, and investors should consider, non-GAAP measures in conjunction with our GAAP results.
Statements in this press release that are not historic facts, including statements about our fiscal 2015 and other financial and growth expectations, intent to repurchase shares and enter into the accelerated stock repurchase agreement and to return 40% of free cash flow to shareholders and associated expected effects, intent to enter into a new credit facility, and the acquisition of Axeda, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility that the macroeconomic climate may not improve or may deteriorate, the possibility that our revenue and cash flow may decrease if customers do not purchase or adopt our solutions when or at the rates we expect, the possibility that foreign currency exchange rates may vary from our expectations and thereby affect our reported revenue, expense and earnings, the possibility that we may not achieve the license, services or support growth rates that we expect, which could result in a different mix of revenue between license, service and support and could impact our EPS results, the possibility that our businesses, including the Atego and Axeda (once acquired) businesses, may not expand and/or generate the revenue we expect, the possibility that we may not complete the acquisition of Axeda Corporation when or as we expect, the possibility that other uses of cash may reduce the amount of shares we repurchase, the possibility that the use of cash to repurchase our shares may reduce our ability to undertake organic and inorganic growth initiatives, the possibility that existing and/or other banks will be unwilling to enter into an expanded credit facility with us, the possibility that the increased leverage we anticipate undertaking in connection with the new capital allocation strategy will constrain our ability to pursue other initiatives, the possibility that resource constraints and personnel reductions could adversely affect our revenue, and the possibility that fines and penalties may be assessed against us in connection with our previously announced investigation in China. 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 Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.
PTC, the PTC logo, Atego and all other PTC product names and logos are trademarks or registered trademarks of PTC Inc. or its subsidiaries in the United States and in other countries.
PTC (Nasdaq: PTC) enables manufacturers to achieve sustained product and service advantage. PTC’s technology solutions help customers transform the way they create, operate and service products for a smart, connected, world. Founded in 1985, PTC employs approximately 6,000 professionals serving more than 28,000 businesses in rapidly-evolving, globally distributed manufacturing industries worldwide. Get more information at www.ptc.com.
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Nov. 28, 2015 01:00 PM EST Reads: 473
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
Nov. 28, 2015 12:00 PM EST Reads: 333
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
Nov. 28, 2015 12:00 PM EST Reads: 548
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at Logz.io, explored the value of Kibana 4 for log analysis and provided a hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He examined three use cases: IT operations, business intelligence, and security and compliance. Asaf Yigal is co-founder and VP of Product at log analytics software company Logz.io. In the past, he was co-founder of social-trading platform Currensee, which...
Nov. 28, 2015 12:00 PM EST Reads: 229
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
Nov. 28, 2015 11:45 AM EST Reads: 402
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
Nov. 28, 2015 11:15 AM EST Reads: 412
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Nov. 28, 2015 11:00 AM EST Reads: 512
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Nov. 28, 2015 10:30 AM EST Reads: 311
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
Nov. 28, 2015 10:15 AM EST Reads: 249
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
Nov. 28, 2015 10:00 AM EST Reads: 193
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
Nov. 28, 2015 10:00 AM EST Reads: 397
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
Nov. 28, 2015 09:00 AM EST Reads: 182
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and t...
Nov. 28, 2015 08:45 AM EST Reads: 435
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessi...
Nov. 28, 2015 08:45 AM EST Reads: 331
As organizations shift towards IT-as-a-service models, the need for managing & protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection & E-Discovery of your data - whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise.
Nov. 28, 2015 07:45 AM EST Reads: 209