Massachusetts
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04-2866152
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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(Do not check if a smaller
reporting company)
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Page
Number
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Part I—FINANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Part II—OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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ITEM 1.
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UNAUDITED CONDENSED FINANCIAL STATEMENTS
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March 30,
2013 |
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September 30,
2012 |
||||
ASSETS
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|
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|
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Current assets:
|
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|
||||
Cash and cash equivalents
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$
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240,809
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$
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489,543
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Accounts receivable, net of allowance for doubtful accounts of $3,442 and $3,418 at March 30, 2013 and September 30, 2012, respectively
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213,252
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|
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217,370
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Prepaid expenses
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44,129
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28,341
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Other current assets
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111,539
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121,019
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Deferred tax assets
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35,509
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22,879
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Total current assets
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645,238
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879,152
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Property and equipment, net
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62,731
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63,466
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Goodwill
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748,251
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610,347
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Acquired intangible assets, net
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278,748
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185,885
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Deferred tax assets
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17,654
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20,660
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Other assets
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32,197
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32,124
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Total assets
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$
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1,784,819
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$
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1,791,634
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||
Current liabilities:
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||||
Accounts payable, accrued expenses and other current liabilities
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$
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63,935
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$
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65,517
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Accrued compensation and benefits
|
81,183
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92,212
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Accrued income taxes
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5,203
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|
804
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Deferred tax liabilities
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567
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402
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Current portion of long term debt
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7,500
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7,500
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Deferred revenue
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340,681
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315,309
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Total current liabilities
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499,069
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481,744
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Long term debt, net of current portion
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300,625
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362,500
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Deferred tax liabilities
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45,326
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31,854
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Deferred revenue
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9,660
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12,220
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Other liabilities
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102,340
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106,057
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Total liabilities
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957,020
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994,375
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Commitments and contingencies (Note 13)
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Stockholders’ equity:
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Preferred stock, $0.01 par value; 5,000 shares authorized; none issued
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—
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—
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Common stock, $0.01 par value; 500,000 shares authorized; 119,585 and 119,553 shares issued and outstanding at March 30, 2013 and September 30, 2012, respectively
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1,196
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1,196
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Additional paid-in capital
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1,801,549
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1,822,698
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Accumulated deficit
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(901,286
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)
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(954,134
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)
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Accumulated other comprehensive loss
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(73,660
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)
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(72,501
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)
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Total stockholders’ equity
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827,799
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797,259
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|
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Total liabilities and stockholders’ equity
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$
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1,784,819
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$
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1,791,634
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Three months ended
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Six months ended
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||||||||||||
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March 30,
2013 |
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March 31,
2012 |
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March 30,
2013 |
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March 31,
2012 |
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Revenue:
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License
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$
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79,690
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$
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74,779
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$
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158,875
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$
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163,867
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Service
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73,084
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75,806
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149,844
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151,433
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||||
Support
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161,175
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150,540
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324,981
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304,101
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||||
Total revenue
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313,949
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301,125
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633,700
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619,401
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Cost of revenue:
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Cost of license revenue
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8,291
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7,824
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16,303
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15,483
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|
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Cost of service revenue
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64,550
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66,366
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133,142
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137,816
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|
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Cost of support revenue
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20,429
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19,026
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40,897
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38,136
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|
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Total cost of revenue
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93,270
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93,216
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190,342
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191,435
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Gross margin
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220,679
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207,909
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443,358
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427,966
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Operating expenses:
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Sales and marketing
|
88,059
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90,962
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181,608
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188,740
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Research and development
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55,528
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54,576
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112,957
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109,569
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|
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General and administrative
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33,398
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29,534
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69,215
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59,106
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|
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Amortization of acquired intangible assets
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6,640
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5,132
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13,263
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10,341
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|
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Restructuring charges
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15,810
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20,802
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31,212
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20,802
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Total operating expenses
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199,435
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201,006
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408,255
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388,558
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|
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Operating income
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21,244
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6,903
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35,103
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39,408
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|
||||
Interest and other (expense) income, net
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(1,867
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)
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(2,967
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)
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(3,672
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)
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(5,610
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)
|
||||
Income before income taxes
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19,377
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3,936
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|
|
31,431
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33,798
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|
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Provision (benefit) for income taxes
|
2,340
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|
367
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(21,417
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)
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|
8,106
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|
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Net income
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$
|
17,037
|
|
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$
|
3,569
|
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$
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52,848
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$
|
25,692
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Earnings per share—Basic
|
$
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0.14
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$
|
0.03
|
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$
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0.44
|
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$
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0.22
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Earnings per share—Diluted
|
$
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0.14
|
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|
$
|
0.03
|
|
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$
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0.44
|
|
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$
|
0.21
|
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Weighted average shares outstanding—Basic
|
119,518
|
|
|
119,003
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|
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119,722
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|
|
118,356
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|
||||
Weighted average shares outstanding—Diluted
|
121,071
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|
|
121,401
|
|
|
121,438
|
|
|
120,985
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Three months ended
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Six months ended
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||||||||||||
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March 30,
2013 |
|
March 31,
2012 |
|
March 30,
2013 |
|
March 31,
2012 |
||||||||
Net income
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$
|
17,037
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$
|
3,569
|
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$
|
52,848
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$
|
25,692
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Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net of tax of $0 for all periods
|
(8,540
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)
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7,849
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(3,075
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)
|
|
2,779
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|
||||
Minimum pension liability adjustment, net of tax of ($0.8) million and ($1.0) million for the second quarter and first six months of 2013, respectively, and $0.3 million for both the second quarter and first six months of 2012
|
1,885
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|
|
717
|
|
|
1,916
|
|
|
862
|
|
||||
Other comprehensive (loss) income
|
(6,655
|
)
|
|
8,566
|
|
|
(1,159
|
)
|
|
3,641
|
|
||||
Comprehensive income
|
$
|
10,382
|
|
|
$
|
12,135
|
|
|
$
|
51,689
|
|
|
$
|
29,333
|
|
|
Six months ended
|
||||||
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March 30,
2013 |
|
March 31,
2012 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
52,848
|
|
|
$
|
25,692
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
38,864
|
|
|
33,285
|
|
||
Stock-based compensation
|
23,703
|
|
|
26,074
|
|
||
Excess tax benefits from stock-based awards
|
(139
|
)
|
|
(453
|
)
|
||
Other non-cash items, net
|
138
|
|
|
211
|
|
||
Changes in operating assets and liabilities, excluding the effects of acquisitions:
|
|
|
|
||||
Accounts receivable
|
22,185
|
|
|
38,698
|
|
||
Accounts payable and accrued expenses
|
(6,111
|
)
|
|
(6,233
|
)
|
||
Accrued compensation and benefits
|
(18,631
|
)
|
|
(7,635
|
)
|
||
Deferred revenue
|
30,843
|
|
|
33,482
|
|
||
Accrued and deferred income taxes
|
(40,553
|
)
|
|
(11,901
|
)
|
||
Other current assets and prepaid expenses
|
(3,197
|
)
|
|
3,573
|
|
||
Other noncurrent assets and liabilities
|
(3,518
|
)
|
|
(1,759
|
)
|
||
Net cash provided by operating activities
|
96,432
|
|
|
133,034
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property and equipment
|
(12,426
|
)
|
|
(16,624
|
)
|
||
Acquisitions of businesses, net of cash acquired
|
(222,423
|
)
|
|
(1,170
|
)
|
||
Net cash used by investing activities
|
(234,849
|
)
|
|
(17,794
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under credit facility
|
—
|
|
|
40,000
|
|
||
Repayments of borrowings under credit facility
|
(61,875
|
)
|
|
(80,000
|
)
|
||
Repurchases of common stock
|
(34,947
|
)
|
|
(14,983
|
)
|
||
Proceeds from issuance of common stock
|
2,874
|
|
|
14,123
|
|
||
Excess tax benefits from stock-based awards
|
139
|
|
|
453
|
|
||
Payments of withholding taxes in connection with vesting of stock-based awards
|
(12,891
|
)
|
|
(19,465
|
)
|
||
Net cash used by financing activities
|
(106,700
|
)
|
|
(59,872
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(3,617
|
)
|
|
861
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(248,734
|
)
|
|
56,229
|
|
||
Cash and cash equivalents, beginning of period
|
489,543
|
|
|
167,878
|
|
||
Cash and cash equivalents, end of period
|
$
|
240,809
|
|
|
$
|
224,107
|
|
|
March 30,
2013 |
|
September 30,
2012 |
||||
|
(in thousands)
|
||||||
S&P bond rating BBB-1 and above-Tier 1
|
$
|
37,043
|
|
|
$
|
34,017
|
|
Internal Credit Assessment-Tier 2
|
3,697
|
|
|
8,446
|
|
||
Internal Credit Assessment-Tier 3
|
—
|
|
|
—
|
|
||
Total financing receivables
|
$
|
40,740
|
|
|
$
|
42,463
|
|
|
|
2013 Restructuring Charges
|
|
|
|
|
||||||||||||||
|
|
Employee Severance and Related Benefits
|
|
Facility Closures and Related Costs
|
|
Total
|
|
Historical (1)
|
|
Total
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
October 1, 2012
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,461
|
|
|
$
|
4,461
|
|
Charges to operations
|
|
29,958
|
|
|
1,461
|
|
|
31,419
|
|
|
(207
|
)
|
|
31,212
|
|
|||||
Cash disbursements
|
|
(18,948
|
)
|
|
(337
|
)
|
|
(19,285
|
)
|
|
(4,096
|
)
|
|
(23,381
|
)
|
|||||
Foreign exchange impact
|
|
(333
|
)
|
|
(15
|
)
|
|
(348
|
)
|
|
11
|
|
|
(337
|
)
|
|||||
Accrual, March 30, 2013
|
|
$
|
10,677
|
|
|
$
|
1,109
|
|
|
$
|
11,786
|
|
|
$
|
169
|
|
|
$
|
11,955
|
|
Restricted stock unit activity for the six months ended March 30, 2013
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
(Per Share)
|
|||
|
(in thousands)
|
|
|
|||
Balance of outstanding restricted stock units October 1, 2012
|
5,134
|
|
|
$
|
19.99
|
|
Granted
|
1,850
|
|
|
$
|
22.20
|
|
Vested
|
(1,911
|
)
|
|
$
|
19.06
|
|
Forfeited or not earned
|
(239
|
)
|
|
$
|
20.73
|
|
Balance of outstanding restricted stock units March 30, 2013
|
4,834
|
|
|
$
|
21.16
|
|
|
Restricted Stock Units
|
||
Grant Period
|
Performance-based (1)
|
|
Time-based (2)
|
|
|
||
|
(Number of Units in thousands)
|
||
First six months of 2013
|
422
|
|
1,428
|
(1)
|
Of these performance-based RSUs,
90,859
will be eligible to vest to the extent earned in
three
substantially equal installments on the later of November 15, 2013 and the date the Compensation Committee determines the extent to which the performance criteria have been achieved, November 15, 2014 and November 15, 2015 and
317,197
will be eligible to vest in
three
substantially equal installments on (i) the later of November 15, 2013 and the date the Compensation Committee determines the extent to which performance criteria have been achieved, (ii) the later of November 15, 2014 and the date the Compensation Committee determines the extent to which the applicable performance criteria have been achieved, and (iii) the later of November 15, 2015 and the date the Compensation Committee determines the extent to which the applicable performance criteria have been achieved; RSUs not earned for a period may be earned in subsequent periods. The remaining
14,046
will vest on the later of November 15, 2013 and the date the Compensation Committee determines the extent to which the performance criteria have been achieved.
|
(2)
|
The time-based RSUs were issued to employees, including some of our executive officers, and the Board of Directors. Of these time-based RSUs,
1,363,705
will vest in
three
substantially equal annual installments in November 2013, 2014 and 2015 and
7,681
will vest in
three
substantially equal installments in March 2014, 2015, and 2016. The remaining
56,144
will vest the earlier of the date of the 2014 Annual Meeting of Stockholders or March 15, 2014.
|
|
Three months ended
|
Six months ended
|
||||||||||||
|
March 30,
2013 |
|
March 31,
2012 |
March 30,
2013 |
|
March 31,
2012 |
||||||||
|
(in thousands)
|
(in thousands)
|
||||||||||||
Cost of license revenue
|
$
|
8
|
|
|
$
|
7
|
|
$
|
13
|
|
|
$
|
12
|
|
Cost of service revenue
|
1,420
|
|
|
1,358
|
|
3,032
|
|
|
2,921
|
|
||||
Cost of support revenue
|
835
|
|
|
813
|
|
1,661
|
|
|
1,763
|
|
||||
Sales and marketing
|
2,835
|
|
|
3,306
|
|
5,293
|
|
|
7,034
|
|
||||
Research and development
|
1,824
|
|
|
2,240
|
|
4,336
|
|
|
4,789
|
|
||||
General and administrative
|
4,888
|
|
|
4,968
|
|
9,368
|
|
|
9,555
|
|
||||
Total stock-based compensation expense
|
$
|
11,810
|
|
|
$
|
12,692
|
|
$
|
23,703
|
|
|
$
|
26,074
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
Calculation of Basic and Diluted EPS
|
March 30,
2013 |
|
March 31,
2012 |
|
March 30,
2013 |
|
March 31,
2012 |
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Net income
|
$
|
17,037
|
|
|
$
|
3,569
|
|
|
$
|
52,848
|
|
|
$
|
25,692
|
|
Weighted average shares outstanding—Basic
|
119,518
|
|
|
119,003
|
|
|
119,722
|
|
|
118,356
|
|
||||
Dilutive effect of employee stock options, restricted shares and restricted stock units
|
1,553
|
|
|
2,398
|
|
|
1,716
|
|
|
2,629
|
|
||||
Weighted average shares outstanding—Diluted
|
121,071
|
|
|
121,401
|
|
|
121,438
|
|
|
120,985
|
|
||||
Earnings per share—Basic
|
$
|
0.14
|
|
|
$
|
0.03
|
|
|
$
|
0.44
|
|
|
$
|
0.22
|
|
Earnings per share—Diluted
|
$
|
0.14
|
|
|
$
|
0.03
|
|
|
$
|
0.44
|
|
|
$
|
0.21
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
March 30, 2013
|
|
March 31, 2012
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Revenue
|
$
|
314.6
|
|
|
$
|
317.2
|
|
|
$
|
635.9
|
|
|
$
|
651.1
|
|
Net income (loss)
|
$
|
17.7
|
|
|
$
|
(0.7
|
)
|
|
$
|
26.0
|
|
|
$
|
22.9
|
|
Earnings (loss) per share—Basic
|
$
|
0.15
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.22
|
|
|
$
|
0.19
|
|
Earnings (loss) per share—Diluted
|
$
|
0.15
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.21
|
|
|
$
|
0.19
|
|
|
March 30, 2013
|
|
September 30, 2012
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Goodwill (not amortized)
|
|
|
|
|
$
|
748,251
|
|
|
|
|
|
|
$
|
610,347
|
|
||||||||
Intangible assets with finite lives (amortized) (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchased software
|
$
|
226,334
|
|
|
$
|
135,934
|
|
|
90,400
|
|
|
$
|
177,166
|
|
|
$
|
127,250
|
|
|
$
|
49,916
|
|
|
Capitalized software
|
22,877
|
|
|
22,877
|
|
|
—
|
|
|
22,877
|
|
|
22,877
|
|
|
—
|
|
||||||
Customer lists and relationships
|
289,952
|
|
|
105,473
|
|
|
184,479
|
|
|
227,097
|
|
|
93,215
|
|
|
133,882
|
|
||||||
Trademarks and trade names
|
13,257
|
|
|
9,408
|
|
|
3,849
|
|
|
11,013
|
|
|
8,967
|
|
|
2,046
|
|
||||||
Other
|
3,432
|
|
|
3,412
|
|
|
20
|
|
|
3,437
|
|
|
3,396
|
|
|
41
|
|
||||||
|
$
|
555,852
|
|
|
$
|
277,104
|
|
|
$
|
278,748
|
|
|
$
|
441,590
|
|
|
$
|
255,705
|
|
|
$
|
185,885
|
|
Total goodwill and acquired intangible assets
|
|
|
|
|
$
|
1,026,999
|
|
|
|
|
|
|
$
|
796,232
|
|
|
Software
Products
Segment
|
|
Services
Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance, September 30, 2012
|
$
|
585,469
|
|
|
$
|
24,878
|
|
|
$
|
610,347
|
|
Acquisition
|
128,638
|
|
|
12,800
|
|
|
141,438
|
|
|||
Foreign currency translation adjustments
|
(3,528
|
)
|
|
(6
|
)
|
|
(3,534
|
)
|
|||
Balance as of March 30, 2013
|
$
|
710,579
|
|
|
$
|
37,672
|
|
|
$
|
748,251
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30,
2013 |
|
March 31,
2012 |
|
March 30,
2013 |
|
March 31,
2012 |
||||||||
|
(in thousands)
|
||||||||||||||
Amortization of acquired intangible assets
|
$
|
6,640
|
|
|
$
|
5,132
|
|
|
$
|
13,263
|
|
|
$
|
10,341
|
|
Cost of license revenue
|
4,628
|
|
|
3,931
|
|
|
9,267
|
|
|
8,034
|
|
||||
Total amortization expense
|
$
|
11,268
|
|
|
$
|
9,063
|
|
|
$
|
22,530
|
|
|
$
|
18,375
|
|
•
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
•
|
Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or
|
•
|
Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
March 30,
2013 |
|
September 30,
2012 |
||||
|
(in thousands)
|
||||||
Financial assets:
|
|
|
|
||||
Cash equivalents—Level 1 (1)
|
$
|
58,855
|
|
|
$
|
231,488
|
|
Forward contracts—Level 2
|
—
|
|
|
236
|
|
||
|
$
|
58,855
|
|
|
$
|
231,724
|
|
Financial liabilities:
|
|
|
|
||||
Forward contracts—Level 2
|
$
|
289
|
|
|
$
|
—
|
|
(1)
|
Money market funds and time deposits.
|
Currency Hedged
|
March 30,
2013 |
|
September 30,
2012 |
||||
|
(in thousands)
|
||||||
Canadian Dollar / U.S. Dollar
|
$
|
45,531
|
|
|
$
|
54,133
|
|
Euro / U.S. Dollar
|
51,546
|
|
|
53,716
|
|
||
Chinese Renminbi / U.S. Dollar
|
3,394
|
|
|
3,666
|
|
||
Japanese Yen / U.S. Dollar
|
19,911
|
|
|
13,415
|
|
||
Swiss Franc / Euro
|
1,270
|
|
|
—
|
|
||
All other
|
5,914
|
|
|
8,973
|
|
||
Total
|
$
|
127,566
|
|
|
$
|
133,903
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30,
2013
|
|
March 31,
2012
|
|
March 30,
2013
|
|
March 31,
2012
|
||||||||
|
(in thousands)
|
||||||||||||||
Net losses on foreign currency exposures
|
$
|
503
|
|
|
$
|
2,373
|
|
|
$
|
988
|
|
|
$
|
4,570
|
|
Net realized and unrealized (gain) loss on forward contracts (excluding the underlying foreign currency exposure being hedged)
|
$
|
(2,894
|
)
|
|
$
|
1,666
|
|
|
$
|
(3,596
|
)
|
|
$
|
2,387
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30,
2013 |
|
March 31,
2012 |
|
March 30,
2013 |
|
March 31,
2012 |
||||||||
|
(in thousands)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Total Software Products segment revenue
|
$
|
236,580
|
|
|
$
|
221,653
|
|
|
$
|
475,869
|
|
|
$
|
458,616
|
|
Total Services segment revenue
|
77,369
|
|
|
79,472
|
|
|
157,831
|
|
|
160,785
|
|
||||
Total revenue
|
$
|
313,949
|
|
|
$
|
301,125
|
|
|
$
|
633,700
|
|
|
$
|
619,401
|
|
Operating income: (1)
|
|
|
|
|
|
|
|
||||||||
Software Products segment
|
$
|
141,536
|
|
|
$
|
134,109
|
|
|
$
|
285,127
|
|
|
$
|
286,068
|
|
Services segment
|
6,844
|
|
|
7,388
|
|
|
14,094
|
|
|
15,283
|
|
||||
Sales and marketing expenses
|
(92,965
|
)
|
|
(103,443
|
)
|
|
(193,291
|
)
|
|
(201,220
|
)
|
||||
General and administrative expenses
|
(34,171
|
)
|
|
(31,151
|
)
|
|
(70,827
|
)
|
|
(60,723
|
)
|
||||
Total operating income
|
21,244
|
|
|
6,903
|
|
|
35,103
|
|
|
39,408
|
|
||||
Other income (expense), net
|
(1,867
|
)
|
|
(2,967
|
)
|
|
(3,672
|
)
|
|
(5,610
|
)
|
||||
Income before income taxes
|
$
|
19,377
|
|
|
$
|
3,936
|
|
|
$
|
31,431
|
|
|
$
|
33,798
|
|
(1)
|
We recorded restructuring charges of
$15.8 million
and
$31.2 million
in the second quarter and first six months of 2013, respectively. Software Products included
$6.1 million
and
$11.6 million
, respectively; Services included
$4.0 million
and
$6.3 million
, respectively; sales and marketing expenses included
$4.9 million
and
$11.7 million
, respectively; and general and administrative expenses included
$0.8 million
and
$1.6 million
, respectively, of these restructuring charges. We recorded restructuring charges of
$20.8 million
in the second quarter of 2012. Software Products included
$3.4 million
; Services included
$3.3 million
; sales and marketing expenses included
$12.5 million
; and general and administrative expenses included
$1.6 million
of these restructuring charges.
|
•
|
CAD - PTC Creo
®
, including PTC Creo Parametric
TM
and PTC Creo Elements/Direct
®
, and PTC Mathcad
®
.
|
•
|
Extended PLM - our PLM solutions (primarily PTC Windchill
®
and PTC Creo View
TM
), our ALM solutions (primarily PTC Integrity
™
) and our SCM Solutions (primarily PTC Windchill FlexPLM
®
).
|
•
|
SLM - PTC Arbortext
®
and PTC Servigistics
®
products.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30,
2013 |
|
March 31,
2012 |
|
March 30,
2013 |
|
March 31,
2012 |
||||||||
|
(in thousands)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
CAD
|
$
|
136,331
|
|
|
$
|
140,049
|
|
|
$
|
268,291
|
|
|
$
|
285,182
|
|
Extended PLM
|
139,833
|
|
|
143,384
|
|
|
282,242
|
|
|
296,092
|
|
||||
SLM
|
37,785
|
|
|
17,692
|
|
|
83,167
|
|
|
38,127
|
|
||||
Total revenue
|
$
|
313,949
|
|
|
$
|
301,125
|
|
|
$
|
633,700
|
|
|
$
|
619,401
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30,
2013 |
|
March 31,
2012 |
|
March 30,
2013 |
|
March 31,
2012 |
||||||||
|
(in thousands)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Americas (1)
|
$
|
118,150
|
|
|
$
|
109,529
|
|
|
$
|
250,809
|
|
|
$
|
227,019
|
|
Europe (2)
|
118,841
|
|
|
115,780
|
|
|
238,495
|
|
|
248,955
|
|
||||
Pacific Rim
|
39,289
|
|
|
37,327
|
|
|
77,911
|
|
|
74,577
|
|
||||
Japan
|
37,669
|
|
|
38,489
|
|
|
66,485
|
|
|
68,850
|
|
||||
Total revenue
|
$
|
313,949
|
|
|
$
|
301,125
|
|
|
$
|
633,700
|
|
|
$
|
619,401
|
|
(1)
|
Includes revenue in the United States totaling
$111.7 million
and
$102.3 million
for the second quarters ended
March 30, 2013
and
March 31, 2012
, respectively, and
$228.6 million
and
$213.0 million
for the six-month periods ended
March 30, 2013
and
March 31, 2012
, respectively.
|
(2)
|
Includes revenue in Germany totaling
$39.6 million
and
$41.2 million
for the second quarters ended
March 30, 2013
and
March 31, 2012
, respectively, and
$81.7 million
and
$97.4 million
for the six-month periods ended
March 30, 2013
and
March 31, 2012
, respectively.
|
•
|
a leverage ratio, defined as consolidated funded indebtedness to consolidated trailing four quarters EBITDA, of no greater than
2.50
to
1.00
at any time; and
|
•
|
a fixed charge coverage ratio, defined as the ratio of consolidated trailing four quarters EBITDA less consolidated capital expenditures to consolidated fixed charges, of no less than
3.50
to
1.00
at any time.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
software licenses,
|
•
|
support (previously referred to as maintenance), which include technical support and software updates, and
|
•
|
services, consulting and training services, which include implementation services for our software.
|
•
|
the CAD market (computer-aided design, manufacturing and engineering (CAD, CAM and CAE) solutions),
|
•
|
the product lifecycle management (PLM) market (product data management, collaboration and related solutions),
|
•
|
the application lifecycle management (ALM) market (coordination and management of all aspects of global software development),
|
•
|
the supply chain management (SCM) market (management and optimization of the supply chain), and
|
•
|
the service lifecycle management (SLM) market (delivery and capture of product intelligence at the point of service).
|
Revenue by Solution
|
|||||||||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||
CAD
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
License
|
$37.3
|
|
$37.9
|
|
(1
|
)%
|
|
$
|
67.0
|
|
|
$
|
76.6
|
|
|
(13
|
)%
|
||
Service
|
5.7
|
|
|
7.4
|
|
|
(24
|
)%
|
|
11.7
|
|
|
15.6
|
|
|
(25
|
)%
|
||
Support
|
93.4
|
|
|
94.8
|
|
|
(1
|
)%
|
|
189.6
|
|
|
193.0
|
|
|
(2
|
)%
|
||
Total revenue
|
$136.3
|
|
$140.0
|
|
(3
|
)%
|
|
$
|
268.3
|
|
|
$
|
285.2
|
|
|
(6
|
)%
|
|
|||||||||||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
SLM
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
License
|
$
|
7.3
|
|
|
$
|
2.4
|
|
|
204
|
%
|
|
$
|
22.8
|
|
|
$
|
7.5
|
|
|
203
|
%
|
Service
|
16.0
|
|
|
8.5
|
|
|
88
|
%
|
|
32.1
|
|
|
16.7
|
|
|
92
|
%
|
||||
Support
|
14.5
|
|
|
6.8
|
|
|
114
|
%
|
|
28.3
|
|
|
13.9
|
|
|
103
|
%
|
||||
Total revenue
|
$
|
37.8
|
|
|
$
|
17.7
|
|
|
114
|
%
|
|
$
|
83.2
|
|
|
$
|
38.1
|
|
|
118
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||
Revenue as a Percentage of Total Revenue
|
March 30, 2013
|
|
March 31, 2012
|
|
March 30, 2013
|
|
March 31, 2012
|
||||
License
|
26
|
%
|
|
25
|
%
|
|
25
|
%
|
|
27
|
%
|
Service
|
23
|
%
|
|
25
|
%
|
|
24
|
%
|
|
24
|
%
|
Support
|
51
|
%
|
|
50
|
%
|
|
51
|
%
|
|
49
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
March 30, 2013
|
|
March 31, 2012
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||
License and/or service revenue greater than $1 million from individual customers in a quarter
|
$
|
57.9
|
|
|
$
|
56.4
|
|
|
$
|
119.7
|
|
|
$
|
125.2
|
|
% of total license and service revenue
|
38
|
%
|
|
37
|
%
|
|
39
|
%
|
|
40
|
%
|
|
Three months ended
|
|
Percent Change
|
|
Six months ended
|
|
Percent Change
|
||||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Actual
|
|
Constant
Currency
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Actual
|
|
Constant
Currency
|
||||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||||||||
Revenue by region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
118.2
|
|
|
$
|
109.5
|
|
|
8
|
%
|
|
8
|
%
|
|
$
|
250.8
|
|
|
$
|
227.0
|
|
|
10
|
%
|
|
10
|
%
|
Europe
|
$
|
118.8
|
|
|
$
|
115.8
|
|
|
3
|
%
|
|
1
|
%
|
|
$
|
238.5
|
|
|
$
|
249.0
|
|
|
(4
|
)%
|
|
(3
|
)%
|
Pacific Rim
|
$
|
39.3
|
|
|
$
|
37.3
|
|
|
5
|
%
|
|
5
|
%
|
|
$
|
77.9
|
|
|
$
|
74.6
|
|
|
4
|
%
|
|
4
|
%
|
Japan
|
$
|
37.7
|
|
|
$
|
38.5
|
|
|
(2
|
)%
|
|
13
|
%
|
|
$
|
66.5
|
|
|
$
|
68.9
|
|
|
(3
|
)%
|
|
6
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
March 30, 2013
|
|
March 31, 2012
|
||||
Revenue by region as a % of total revenue:
|
|
|
|
|
|
|
|
||||
Americas
|
38
|
%
|
|
36
|
%
|
|
40
|
%
|
|
37
|
%
|
Europe
|
38
|
%
|
|
38
|
%
|
|
38
|
%
|
|
40
|
%
|
Pacific Rim
|
13
|
%
|
|
12
|
%
|
|
12
|
%
|
|
12
|
%
|
Japan
|
12
|
%
|
|
13
|
%
|
|
10
|
%
|
|
11
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
Gross margin
|
$
|
220.7
|
|
|
$
|
207.9
|
|
|
6
|
%
|
|
$
|
443.4
|
|
|
$
|
428.0
|
|
|
4
|
%
|
Non-GAAP gross margin
|
228.2
|
|
|
214.8
|
|
|
6
|
%
|
|
459.5
|
|
|
443.0
|
|
|
4
|
%
|
||||
Gross margin as a % of revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
License
|
90
|
%
|
|
90
|
%
|
|
|
|
90
|
%
|
|
91
|
%
|
|
|
||||||
Service
|
12
|
%
|
|
12
|
%
|
|
|
|
11
|
%
|
|
9
|
%
|
|
|
||||||
Support
|
87
|
%
|
|
87
|
%
|
|
|
|
87
|
%
|
|
87
|
%
|
|
|
||||||
Gross margin as a % of total revenue
|
70
|
%
|
|
69
|
%
|
|
|
|
70
|
%
|
|
69
|
%
|
|
|
||||||
Non-GAAP gross margin as a % of total revenue
|
73
|
%
|
|
71
|
%
|
|
|
|
72
|
%
|
|
71
|
%
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of license revenue
|
$
|
8.3
|
|
|
$
|
7.8
|
|
|
6
|
%
|
|
$
|
16.3
|
|
|
$
|
15.5
|
|
|
5
|
%
|
Cost of service revenue
|
64.6
|
|
|
66.4
|
|
|
(3
|
)%
|
|
133.1
|
|
|
137.8
|
|
|
(3
|
)%
|
||||
Cost of support revenue
|
20.4
|
|
|
19.0
|
|
|
7
|
%
|
|
40.9
|
|
|
38.1
|
|
|
7
|
%
|
||||
Sales and marketing
|
88.1
|
|
|
91.0
|
|
|
(3
|
)%
|
|
181.6
|
|
|
188.7
|
|
|
(4
|
)%
|
||||
Research and development
|
55.5
|
|
|
54.6
|
|
|
2
|
%
|
|
113.0
|
|
|
109.6
|
|
|
3
|
%
|
||||
General and administrative
|
33.4
|
|
|
29.5
|
|
|
13
|
%
|
|
69.2
|
|
|
59.1
|
|
|
17
|
%
|
||||
Amortization of acquired intangible assets
|
6.6
|
|
|
5.1
|
|
|
29
|
%
|
|
13.3
|
|
|
10.3
|
|
|
28
|
%
|
||||
Restructuring charges
|
15.8
|
|
|
20.8
|
|
|
(24
|
)%
|
|
31.2
|
|
|
20.8
|
|
|
50
|
%
|
||||
Total costs and expenses
|
$
|
292.7
|
|
|
$
|
294.2
|
|
|
(1
|
)%
|
|
$
|
598.6
|
|
|
$
|
580.0
|
|
|
3
|
%
|
Total headcount at end of period
|
5,971
|
|
|
5,959
|
|
|
|
|
|
|
|
|
|
(1)
|
On a constant currency basis, compared to the year-ago period, total costs and expenses for the
second
quarter and first six months of 2013 were flat and increased 4%, respectively.
|
•
|
restructuring charges of $31.2 million in the first six months of 2013 compared to $20.8 million in the first six months of 2012, primarily for severance and other related costs associated with employee terminations;
|
•
|
an increase of approximately 400 employees in connection with our acquisition of Servigistics on October 2, 2012;
|
•
|
company-wide merit pay increases effective on February 1, 2012 (approximately $11 million on an annualized basis), which resulted in an increase in salary expense across all functional organizations; and
|
•
|
acquisition-related costs (included in general and administrative), which were $1.7 million and $4.2 million higher in the second quarter and first six months of 2013, respectively.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
Cost of license revenue
|
$
|
8.3
|
|
|
$
|
7.8
|
|
|
6
|
%
|
|
$
|
16.3
|
|
|
$
|
15.5
|
|
|
5
|
%
|
% of total revenue
|
3
|
%
|
|
3
|
%
|
|
|
|
3
|
%
|
|
2
|
%
|
|
|
||||||
% of total license revenue
|
10
|
%
|
|
10
|
%
|
|
|
|
10
|
%
|
|
9
|
%
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
Cost of service revenue
|
$
|
64.6
|
|
|
$
|
66.4
|
|
|
(3
|
)%
|
|
$
|
133.1
|
|
|
$
|
137.8
|
|
|
(3
|
)%
|
% of total revenue
|
21
|
%
|
|
22
|
%
|
|
|
|
21
|
%
|
|
22
|
%
|
|
|
||||||
% of total service revenue
|
88
|
%
|
|
88
|
%
|
|
|
|
89
|
%
|
|
91
|
%
|
|
|
||||||
Service headcount at end of period
|
1,434
|
|
|
1,364
|
|
|
5
|
%
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
Cost of support revenue
|
$
|
20.4
|
|
|
$
|
19.0
|
|
|
7
|
%
|
|
$
|
40.9
|
|
|
$
|
38.1
|
|
|
7
|
%
|
% of total revenue
|
7
|
%
|
|
6
|
%
|
|
|
|
6
|
%
|
|
6
|
%
|
|
|
||||||
% of total support revenue
|
13
|
%
|
|
13
|
%
|
|
|
|
13
|
%
|
|
13
|
%
|
|
|
||||||
Support headcount at end of period
|
577
|
|
|
535
|
|
|
8
|
%
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
Sales and marketing
|
$
|
88.1
|
|
|
$
|
91.0
|
|
|
(3
|
)%
|
|
$
|
181.6
|
|
|
$
|
188.7
|
|
|
(4
|
)%
|
% of total revenue
|
28
|
%
|
|
30
|
%
|
|
|
|
29
|
%
|
|
30
|
%
|
|
|
||||||
Sales and marketing headcount at end of period
|
1,425
|
|
|
1,516
|
|
|
(6
|
)%
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
Research and development
|
$
|
55.5
|
|
|
$
|
54.6
|
|
|
2
|
%
|
|
$
|
113.0
|
|
|
$
|
109.6
|
|
|
3
|
%
|
% of total revenue
|
18
|
%
|
|
18
|
%
|
|
|
|
18
|
%
|
|
18
|
%
|
|
|
||||||
Research and development headcount at end of period
|
1,934
|
|
|
1,952
|
|
|
(1
|
)%
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
General and administrative
|
$
|
33.4
|
|
|
$
|
29.5
|
|
|
13
|
%
|
|
$
|
69.2
|
|
|
$
|
59.1
|
|
|
17
|
%
|
% of total revenue
|
11
|
%
|
|
10
|
%
|
|
|
|
11
|
%
|
|
10
|
%
|
|
|
||||||
General and administrative headcount at end of period
|
590
|
|
|
579
|
|
|
2
|
%
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
|
March 30, 2013
|
|
March 31, 2012
|
|
Percent
Change
|
||||||||||
|
(Dollar amounts in millions)
|
||||||||||||||||||||
Restructuring charges
|
$
|
15.8
|
|
|
$
|
20.8
|
|
|
(24
|
)%
|
|
$
|
31.2
|
|
|
$
|
20.8
|
|
|
50
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
March 30, 2013
|
|
March 31, 2012
|
||||||||
|
(in millions)
|
||||||||||||||
Interest income
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
1.5
|
|
|
$
|
1.5
|
|
Interest expense
|
(1.9
|
)
|
|
(1.2
|
)
|
|
(3.8
|
)
|
|
(2.4
|
)
|
||||
Other (expense) income , net
|
(0.7
|
)
|
|
(2.5
|
)
|
|
(1.4
|
)
|
|
(4.7
|
)
|
||||
Total interest and other (expense) income, net
|
$
|
(1.9
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(5.6
|
)
|
|
Three months ended
|
Six months ended
|
|||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
March 30, 2013
|
|
March 31, 2012
|
||||||||
|
(Dollar amounts in millions)
|
||||||||||||||
Pre-tax income
|
$
|
19.4
|
|
|
$
|
3.9
|
|
|
$
|
31.4
|
|
|
$
|
33.8
|
|
Tax (benefit) provision
|
2.3
|
|
|
0.4
|
|
|
(21.4
|
)
|
|
8.1
|
|
||||
Effective income tax rate
|
12
|
%
|
|
9
|
%
|
|
(68
|
)%
|
|
24
|
%
|
•
|
non-GAAP revenue—GAAP revenue
|
•
|
non-GAAP gross margin—GAAP gross margin
|
•
|
non-GAAP operating income—GAAP operating income
|
•
|
non-GAAP net income—GAAP net income
|
•
|
non-GAAP operating margin—GAAP operating margin
|
•
|
non-GAAP diluted earnings per share—GAAP diluted earnings per share
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
March 30, 2013
|
|
March 31, 2012
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
GAAP revenue
|
$
|
313.9
|
|
|
$
|
301.1
|
|
|
$
|
633.7
|
|
|
$
|
619.4
|
|
Fair value of acquired deferred support revenue
|
0.7
|
|
|
0.7
|
|
|
2.2
|
|
|
2.3
|
|
||||
Non-GAAP revenue
|
$
|
314.6
|
|
|
$
|
301.9
|
|
|
$
|
635.9
|
|
|
$
|
621.7
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP gross margin
|
$
|
220.7
|
|
|
$
|
207.9
|
|
|
$
|
443.4
|
|
|
$
|
428.0
|
|
Fair value of acquired deferred support revenue
|
0.7
|
|
|
0.7
|
|
|
2.2
|
|
|
2.3
|
|
||||
Stock-based compensation
|
2.3
|
|
|
2.2
|
|
|
4.7
|
|
|
4.7
|
|
||||
Amortization of acquired intangible assets included in cost of license revenue
|
4.6
|
|
|
3.9
|
|
|
9.3
|
|
|
8.0
|
|
||||
Non-GAAP gross margin
|
$
|
228.2
|
|
|
$
|
214.8
|
|
|
$
|
459.5
|
|
|
$
|
443.0
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP operating income
|
$
|
21.2
|
|
|
$
|
6.9
|
|
|
$
|
35.1
|
|
|
$
|
39.4
|
|
Fair value of acquired deferred support revenue
|
0.7
|
|
|
0.7
|
|
|
2.2
|
|
|
2.3
|
|
||||
Stock-based compensation
|
11.8
|
|
|
12.7
|
|
|
23.7
|
|
|
26.1
|
|
||||
Amortization of acquired intangible assets included in cost of license revenue
|
4.6
|
|
|
3.9
|
|
|
9.3
|
|
|
8.0
|
|
||||
Amortization of acquired intangible assets
|
6.6
|
|
|
5.1
|
|
|
13.3
|
|
|
10.3
|
|
||||
Acquisition-related charges included in general and administrative expenses
|
2.1
|
|
|
0.4
|
|
|
6.7
|
|
|
2.5
|
|
||||
Restructuring charges
|
15.8
|
|
|
20.8
|
|
|
31.2
|
|
|
20.8
|
|
||||
Non-GAAP operating income
|
$
|
62.9
|
|
|
$
|
50.6
|
|
|
$
|
121.5
|
|
|
$
|
109.4
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income
|
$
|
17.0
|
|
|
$
|
3.6
|
|
|
$
|
52.8
|
|
|
$
|
25.7
|
|
Fair value of acquired deferred support revenue
|
0.7
|
|
|
0.7
|
|
|
2.2
|
|
|
2.3
|
|
||||
Stock-based compensation
|
11.8
|
|
|
12.7
|
|
|
23.7
|
|
|
26.1
|
|
||||
Amortization of acquired intangible assets included in cost of license revenue
|
4.6
|
|
|
3.9
|
|
|
9.3
|
|
|
8.0
|
|
||||
Amortization of acquired intangible assets
|
6.6
|
|
|
5.1
|
|
|
13.3
|
|
|
10.3
|
|
||||
Acquisition-related charges included in general and administrative expenses
|
2.1
|
|
|
0.4
|
|
|
6.7
|
|
|
2.5
|
|
||||
Restructuring charges
|
15.8
|
|
|
20.8
|
|
|
31.2
|
|
|
20.8
|
|
||||
Non-operating foreign currency transaction loss
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
Income tax adjustments
(2)
|
(9.1
|
)
|
|
(11.4
|
)
|
|
(45.5
|
)
|
|
(18.1
|
)
|
||||
Non-GAAP net income
|
$
|
49.6
|
|
|
$
|
35.9
|
|
|
$
|
93.7
|
|
|
$
|
78.4
|
|
GAAP diluted earnings per share
|
$
|
0.14
|
|
|
$
|
0.03
|
|
|
$
|
0.44
|
|
|
$
|
0.21
|
|
Fair value of acquired deferred support revenue
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
|
0.02
|
|
||||
Stock-based compensation
|
0.10
|
|
|
0.10
|
|
|
0.20
|
|
|
0.22
|
|
||||
Amortization of acquired intangible assets
|
0.09
|
|
|
0.07
|
|
|
0.19
|
|
|
0.15
|
|
||||
Acquisition-related charges
|
0.02
|
|
|
—
|
|
|
0.06
|
|
|
0.02
|
|
||||
Restructuring charges
|
0.13
|
|
|
0.17
|
|
|
0.26
|
|
|
0.18
|
|
||||
Income tax adjustments
|
(0.08
|
)
|
|
(0.09
|
)
|
|
(0.38
|
)
|
|
(0.15
|
)
|
||||
Non-GAAP diluted earnings per share
|
$
|
0.41
|
|
|
$
|
0.30
|
|
|
$
|
0.77
|
|
|
$
|
0.65
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
March 30, 2013
|
|
March 31, 2012
|
|
March 30, 2013
|
|
March 31, 2012
|
||||
GAAP operating margin
|
6.8
|
%
|
|
2.3
|
%
|
|
5.5
|
%
|
|
6.4
|
%
|
Fair value of deferred support revenue
|
0.2
|
%
|
|
0.2
|
%
|
|
0.3
|
%
|
|
0.4
|
%
|
Stock-based compensation
|
3.8
|
%
|
|
4.2
|
%
|
|
3.7
|
%
|
|
4.2
|
%
|
Amortization of acquired intangibles
|
3.6
|
%
|
|
3.0
|
%
|
|
3.6
|
%
|
|
3.0
|
%
|
Acquisition-related charges
|
0.7
|
%
|
|
0.1
|
%
|
|
1.1
|
%
|
|
0.4
|
%
|
Restructuring charges
|
5.0
|
%
|
|
6.9
|
%
|
|
4.9
|
%
|
|
3.4
|
%
|
Non-GAAP operating margin
|
20.0
|
%
|
|
16.8
|
%
|
|
19.1
|
%
|
|
17.6
|
%
|
(1)
|
In the first quarter of 2012, we recorded $0.8 million of foreign currency transaction losses related to legal entity mergers completed during the quarter.
|
(2)
|
Income tax adjustments
reflect the tax effects of non-GAAP adjustments for the second quarter and first six months of 2013 and 2012, which are calculated by applying the applicable tax rate by jurisdiction to the non-GAAP adjustments listed above, as well as one-time non-cash GAAP charges. In the fourth quarter of 2012, a valuation allowance was established against our U.S. net deferred tax assets. As the U.S. is profitable on a non-GAAP basis, the 2013 non-GAAP tax provision is being calculated assuming there is no U.S. valuation allowance and, as a result, an income tax benefit of $4.1 million and $10.3 million is included for the three and six months ended March 30, 2013, respectively. The three and six months ended March 30, 2013 exclude a tax benefit of $3.2 million related to final resolution of a long standing tax litigation and completion of a tax audit. The six months ended March 30, 2013 includes a one-time non-cash tax benefit of $32.6 million related to the release of a portion of the valuation allowance as a result of deferred tax liabilities established in accounting for the acquisition of Servigistics. The six months ended March 31, 2012 exclude one-time non-cash GAAP charges net of $1.4 million related to the impact from a reduction in the statutory tax rate in Japan on deferred tax assets from a litigation settlement.
|
|
March 30, 2013
|
|
March 31, 2012
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
240,809
|
|
|
$
|
224,107
|
|
Amounts below are for the six months ended:
|
|
|
|
||||
Cash provided by operating activities
|
$
|
96,432
|
|
|
$
|
133,034
|
|
Cash used by investing activities
|
(234,849
|
)
|
|
(17,794
|
)
|
||
Cash used by financing activities
|
(106,700
|
)
|
|
(59,872
|
)
|
|
Six Months Ended
|
||||||
|
March 30, 2013
|
|
March 31, 2012
|
||||
|
(in thousands)
|
||||||
Cash used by investing activities included the following:
|
|
|
|
||||
Acquisitions of businesses, net of cash acquired
|
$
|
(222,423
|
)
|
|
$
|
(1,170
|
)
|
Additions to property and equipment
|
(12,426
|
)
|
|
(16,624
|
)
|
||
|
$
|
(234,849
|
)
|
|
$
|
(17,794
|
)
|
|
Six Months Ended
|
||||||
|
March 30, 2013
|
|
March 31, 2012
|
||||
|
(in thousands)
|
||||||
Cash used by financing activities included the following:
|
|
|
|
||||
Net repayments of borrowings under credit facility
|
$
|
(61,875
|
)
|
|
$
|
(40,000
|
)
|
Repurchases of common stock
|
(34,947
|
)
|
|
(14,983
|
)
|
||
Payments of withholding taxes in connection with vesting of stock-based awards
|
(12,891
|
)
|
|
(19,465
|
)
|
||
Proceeds from issuance of common stock
|
2,874
|
|
|
14,123
|
|
||
Excess tax benefits from stock-based awards
|
139
|
|
|
453
|
|
||
|
$
|
(106,700
|
)
|
|
$
|
(59,872
|
)
|
•
|
a leverage ratio, defined as consolidated funded indebtedness to consolidated trailing four quarters EBITDA, of no greater than 2.50 to 1.00 at any time; and
|
•
|
a fixed charge coverage ratio, defined as the ratio of consolidated trailing four quarters EBITDA less consolidated capital expenditures to consolidated fixed charges, of no less than 3.50 to 1.00 at any time.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period (1)
|
Total Number of Shares (or Units) Purchased
|
Average Price Paid per Share (or Unit)
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
Approximate
Dollar Value of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or Programs
|
||||
December 30, 2012 - January 26, 2013
|
183,474
|
|
$
|
22.77
|
|
183,474
|
|
$80,030,986(2)
|
January 27 - February 23, 2013
|
635,700
|
|
23.56
|
|
635,700
|
|
$65,052,415(2)
|
|
February 24 - March 30, 2013
|
—
|
|
—
|
|
—
|
|
$65,052,415(2)
|
|
Total
|
819,174
|
|
$
|
23.38
|
|
819,174
|
|
$65,052,415(2)
|
ITEM 6.
|
EXHIBITS
|
|
|
|
3.1(a)
|
|
Restated Articles of Organization of PTC Inc. (formerly Parametric Technology Corporation) adopted February 4, 1993 (filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 1996 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
3.1(b)
|
|
Articles of Amendment to Restated Articles of Organization adopted February 9, 1996 (filed as Exhibit 4.1(b) to our Registration Statement on Form S-8 (Registration No. 333-01297) and incorporated herein by reference).
|
|
|
|
3.1(c)
|
|
Articles of Amendment to Restated Articles of Organization adopted February 13, 1997 (filed as Exhibit 4.1(b) to our Registration Statement on Form S-8 (Registration No. 333-22169) and incorporated herein by reference).
|
|
|
|
3.1(d)
|
|
Articles of Amendment to Restated Articles of Organization adopted February 10, 2000 (filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended April 1, 2000 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
3.1(e)
|
|
Certificate of Vote of Directors establishing Series A Junior Participating Preferred Stock (filed as Exhibit 3.1(e) to our Annual Report on Form 10-K for the fiscal year ended September 30, 2000 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
3.1(f)
|
|
Articles of Amendment to Restated Articles of Organization adopted February 28, 2006 (filed as Exhibit 3.1(f) to our Quarterly Report on Form 10-Q for the fiscal quarter ended April 1, 2006 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
3.1(g)
|
|
Articles of Amendment to Restated Articles of Organization adopted January 28, 2013 (filed as Exhibit 3.1(g) to our Quarterly Report in Form 10-Q for the fiscal quarter ended December 29, 2012 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
3.2
|
|
By-Laws, as amended and restated, of PTC Inc. (formerly Parametric Technology Corporation) (filed as Exhibit 3.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2009 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
10.1*
|
|
2000 Equity Incentive Plan (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on March 6, 2013 (File No. 0-18059) and incorporated herein by reference).
|
|
|
|
10.1.1*
|
|
Form of Restricted Stock Unit Certificate (Non-Employee Director).
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a).
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a).
|
|
|
|
32**
|
|
Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350.
|
|
|
|
101
|
|
The following materials from PTC Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 30, 2013 and September 30, 2012; (ii) Condensed Consolidated Statements of Operations for the three and six months ended March 30, 2013 and March 31, 2012; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended March 30, 2013 and March 31, 2012; (iv) Condensed Consolidated Statements of Cash Flows for the six months ended March 30, 2013 and March 31, 2012; and (v) Notes to Condensed Consolidated Financial Statements.
|
*
|
Indicates a management contract or compensatory plan or arrangement in which an executive officer or director of PTC participates.
|
**
|
Indicates that the exhibit is being furnished with this report and is not filed as a part of it.
|
PTC Inc.
|
||
|
|
|
By:
|
|
/s/ J
EFFREY
D. G
LIDDEN
|
|
|
Jeffrey D. Glidden
Executive Vice President and Chief Financial
Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 8, 2013
|
|
|
|
/S/ JAMES E. HEPPELMANN
|
|
|
|
|
|
James E. Heppelmann
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 8, 2013
|
|
|
|
/S/ JEFFREY D. GLIDDEN
|
|
|
|
|
|
Jeffrey D. Glidden
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 8, 2013
|
|
|
|
/S/ JAMES E. HEPPELMANN
|
|
|
|
|
|
James E. Heppelmann
President and Chief Executive Officer
|
|
|
|
|
|
|
Date:
|
May 8, 2013
|
|
|
|
/S/ JEFFREY D. GLIDDEN
|
|
|
|
|
|
Jeffrey D. Glidden
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|