PLM software provider Parametric Technologies Corp. (PTC) today announced an expansion of its share repurchase program and other investment initiatives, reflecting continued business confidence despite the widespread economic malaise dragging down sales at many enterprise software vendors.
PTC’s board of directors has increased the company’s share repurchase authorisation from $50 million to $100 million, the company said.
“The decision to expand our share repurchase program reflects the confidence of both management and our board of directors in the long-term opportunity for PTC," said the company’s President and CEO Dick Harrison in a statement.
Acquisitions may be on the cards
PTC also indicated that the company is in a position to make acquisitions in 2009.
Harrison said the company will continue to repay the $89 million balance on its revolving credit facility, while investing in “certain strategic initiatives.”
When the PLM stalwart announced its fourth quarter results in October, officials denied speculation that the company was seeking a buyer, as originally reported by the Financial Times in September.
Revenue for PTC’s fiscal fourth quarter, which ended Sept. 30, grew 12%. The company had net income of $36.5 million on sales of $299.5 million in the quarter, up from $30.6 million on $266.6 million in sales in the prior-year period. For the full year, PTC netted $79.7 million on revenue of $1.07 billion —. the first time in nearly 10 years PTC has reached $1 billion in sales.
At the end of its fourth quarter, PTC’s diluted weighted average shares outstanding were 118.8 million, and the company had $257 million in cash and equivalents and an additional $141 million available under its revolving credit facility, officials said.
As of Nov. 25, PTC has spent $8.6 million on approximately 586,000 shares under the current $50 million authorisation.
PTC may invest in more markets
Commenting on PTC’s bullish position, Ken Amann, director of research at PLM analyst firm CIMdata Inc., told Manufacturing Executive that while PLM providers in general are benefiting from manufacturers’ continued investment in PLM technology, PTC in particular keeps customers happy by consistently improving its product mix and depth and breadth of functionality.
“New capabilities they’ve rolled out over the past year have been well received, and they continue to develop their ability to compete for large enterprise engagements with companies like Siemens,” he said.
Amann expects that manufacturers will continue to invest in PLM throughout 2009, although potentially at a slower rate than they have this year. However the economy shakes out, he said, PTC will remain competitive. He predicts that the company will make two or three acquisitions in 2009 in order to continue to build its technological capabilities and broaden its footprint.
“There are certain areas they might consider investing in, including publishing, simulation and analysis, and digital manufacturing,” Amann said.