Welcome!

News Feed Item

PTC Announces New Capital Allocation Strategy

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.”

Business Outlook

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)
 
Dial-in: 1-800-857-5592 or 1-773-799-3757

Call Leader: James Heppelmann

Passcode: PTC

 
Webcast:

www.ptc.com/for/investors.htm

 
Replay:

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.

Forward-Looking Statements

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.

About PTC

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.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, discussed the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filterin...
IoT generates lots of temporal data. But how do you unlock its value? You need to discover patterns that are repeatable in vast quantities of data, understand their meaning, and implement scalable monitoring across multiple data streams in order to monetize the discoveries and insights. Motif discovery and deep learning platforms are emerging to visualize sensor data, to search for patterns and to build application that can monitor real time streams efficiently. In his session at @ThingsExpo, ...
Enterprise networks are complex. Moreover, they were designed and deployed to meet a specific set of business requirements at a specific point in time. But, the adoption of cloud services, new business applications and intensifying security policies, among other factors, require IT organizations to continuously deploy configuration changes. Therefore, enterprises are looking for better ways to automate the management of their networks while still leveraging existing capabilities, optimizing perf...
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Early adopters of IoT viewed it mainly as a different term for machine-to-machine connectivity or M2M. This is understandable since a prerequisite for any IoT solution is the ability to collect and aggregate device data, which is most often presented in a dashboard. The problem is that viewing data in a dashboard requires a human to interpret the results and take manual action, which doesn’t scale to the needs of IoT.
When building large, cloud-based applications that operate at a high scale, it’s important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. “Fly two mistakes high” is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Lee...
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
Much of IT terminology is often misused and misapplied. Modernization and transformation are two such terms. They are often used interchangeably even though they mean different things and have very different connotations. Indeed, it is somewhat safe to assume that in IT any transformative effort is likely to also have a modernizing effect, and thus, we can see these as levels of improvement efforts. However, many businesses are being led to believe if they don’t transform now they risk becoming ...
"We provide DevOps solutions. We also partner with some key players in the DevOps space and we use the technology that we partner with to engineer custom solutions for different organizations," stated Himanshu Chhetri, CTO of Addteq, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
What does it look like when you have access to cloud infrastructure and platform under the same roof? Let’s talk about the different layers of Technology as a Service: who cares, what runs where, and how does it all fit together. In his session at 18th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, an IBM company, spoke about the picture being painted by IBM Cloud and how the tools being crafted can help fill the gaps in your IT infrastructure.
CenturyLink has announced that application server solutions from GENBAND are now available as part of CenturyLink’s Networx contracts. The General Services Administration (GSA)’s Networx program includes the largest telecommunications contract vehicles ever awarded by the federal government. CenturyLink recently secured an extension through spring 2020 of its offerings available to federal government agencies via GSA’s Networx Universal and Enterprise contracts. GENBAND’s EXPERiUS™ Application...
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...