<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 12, 1998
PARAMETRIC TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 0-18059 04-2866152
(State or other jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
128 Technology Drive, Waltham, Massachusetts 02154
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(781) 398-5000
Total number of pages: 11
Exhibit index appears on page 4
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
----------------------------------
The Form 8-K originally filed on January 27, 1998 is being amended to
incorporate by reference the historical financial statements and related notes
for the business acquired in the Merger as well as to include pro forma
financial information of Parametric Technology Corporation ("Parametric") giving
effect to the Merger. On January 12, 1998, Parametric completed its acquisition
of Computervision Corporation ("Computervision"). The acquisition was structured
as a merger (the "Merger") of a wholly owned subsidiary of Parametric with and
into Computervision pursuant to an Agreement and Plan of Reorganization (the
"Merger Agreement") dated as of November 3, 1997. The Merger was a tax-free
reorganization and is being accounted for as a pooling of interests.
(a) Financial statements of business acquired
-----------------------------------------
The financial statements of Computervision which are required pursuant to
Rule 3-05 of Regulation S-X were previously reported in Computervision's Annual
Report on Form 10-K for the year ended December 31, 1996 (Commission File
No. 1-07760) and Computervision's Quarterly Reports on Form 10-Q, for the
quarters ended March 30, 1997, June 29, 1997 and September 28, 1997
(Commission File No. 1-07760), and are incorporated herein by reference.
(b) Pro Forma Financial Information
-------------------------------
The unaudited pro forma combined condensed financial statements appear as
Exhibit 99.2 to this Current Report on Form 8-K/A and are incorporated herein by
reference.
(c) Exhibits
--------
2.1 Agreement and Plan of Reorganization dated November 3, 1997 by and among
Parametric Technology Corporation, PTC Acquisition Corporation and
Computervision Corporation; previously filed as the same numbered exhibit
to the initial filing of this report.
23.1 Consent of Arthur Andersen LLP; filed herewith.
99.1 Press release dated January 12, 1998; previously filed as the same
numbered exhibit to the initial filing of this report.
99.2 Unaudited pro forma combined condensed financial statements; filed
herewith.
99.3 Computervision's Annual Report on Form 10-K for the year ended
December 31, 1996, and incorporated herein by reference.
99.4 Compuervisions's Quarterly Report on Form 10-Q for the quarter ended
March 30, 1997, and incorporated herein by reference.
99.5 Computervision's Quarterly Report on Form 10-Q for the quarter ended
June 29, 1997, and incorporated herein by reference.
99.6 Computervision's Quarterly Report on Form 10-Q for the quarter ended
September 28, 1997, and incorporated herein by reference.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PARAMETRIC TECHNOLOGY CORPORATION
Date: March 27, 1998 by: /s/ Edwin J. Gillis
--------------------------------
Edwin J. Gillis
Executive Vice President,
Chief Financial Officer and
Treasurer
3
<PAGE>
Exhibit Index
2.1 Agreement and Plan of Reorganization dated November 3, 1997 by and among
Parametric Technology Corporation, PTC Acquisition Corporation and
Computervision Corporation; previously filed as the same numbered exhibit
to the initial filing of this report.
23.1 Consent of Arthur Andersen LLP; filed herewith.
99.1 Press release dated January 12, 1998; previously filed as the same
numbered exhibit to the initial filing of this report.
99.2 Unaudited pro forma combined condensed financial statements; filed
herewith.
99.3 Computervision's Annual Report on Form 10-K for the year ended
December 31, 1996, and incorporated herein by reference.
99.4 Compuervisions's Quarterly Report on Form 10-Q for the quarter ended
March 30, 1997, and incorporated herein by reference.
99.5 Computervision's Quarterly Report on Form 10-Q for the quarter ended
June 29, 1997, and incorporated herein by reference.
99.6 Computervision's Quarterly Report on Form 10-Q for the quarter ended
September 28, 1997, and incorporated herein by reference.
4
<PAGE>
Exhibit 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
by reference in the Company's Form 8-K/A of our report on the financial
statements of Computervision Corporation dated March 27, 1997 (except with
respect to the matter discussed in Note 4, as to which the date is April
15, 1997 and the matters discussed in Note 15, as to which the date is
November 10, 1997) included in the current report on Form 8-K of
Computervision Corporation filed with the Commission on November 12, 1997
and to all references to our Firm included in the Form 8-K/A.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
March 26, 1998
<PAGE>
EXHIBIT 99.2
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial statements
assume a business combination between Parametric and Computervision
accounted for on a pooling of interests basis and are based on the
respective historical financial statements and the notes thereto of
Parametric, which have been previously filed, and of Computervision, which
are incorporated by reference in this Form 8-K/A. The pro forma combined
condensed balance sheet combines Parametric's September 30, 1997 audited
consolidated balance sheet with Computervision's December 31, 1997
unaudited consolidated balance sheet. The pro forma statements of income
combine Parametric's historical operating results for the fiscal years
ended September 30, 1997, 1996 and 1995 with the corresponding
Computervision historical operating results for the fiscal years ended
December 31, 1997, 1996 and 1995, respectively.
For purposes of the preparation of the unaudited pro forma combined balance
sheet, merger related, debt prepayment and consolidation and integration
expenses (which Parametric anticipates will be approximately $95 million
on a pre-tax basis) were not included.
The pro forma combined condensed financial statements are presented for
illustrative purposes only and are not necessarily indicative of the
operating results or financial position that would have been achieved if
the Merger had been consummated as of the beginning of the periods
presented, nor are they necessarily indicative of the future operating
results or financial position of the combined company. The pro forma
combined condensed financial statements do not give effect to any cost
savings which may result from the integration of Parametric's and
Computervision's operations.
These pro forma combined condensed financial statements are based on, and
should be read in conjunction with, the historical consolidated financial
statements and the related notes thereto of Parametric, which have been
previously filed, and Computervision, which are incorporated by reference
in this Form 8-K/A.
<PAGE>
Unaudited Pro Forma Combined Condensed Balance Sheet
As Of September 30, 1997
(amounts in thousands)
<TABLE>
<CAPTION>
Pro forma
Parametric -----------------------
Technology Computervision Adjustments Combined
---------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 154,228 $ 14,381 $ $ 168,609
Short-term investments 354,516 -- 354,516
Accounts receivable, net 154,777 41,244 196,021
Other current assets 27,620 22,218 49,838
---------- -------------- ----------- -----------
Total current assets 691,141 77,843 768,984
Marketable investments 45,580 -- 45,580
Property and equipment, net 47,504 9,293 56,797
Other assets 48,198 9,645 57,843
---------- -------------- ----------- -----------
Total assets $ 832,423 $ 96,781 $ $ 929,204
========== ============== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable and current portion of long-term debt $ -- $ 39,477 $ $ 39,477
Accounts payable 14,060 24,245 38,305
Accrued expenses 22,357 76,785 99,142
Accrued compensation, severance and related expenses 39,085 52,624 91,709
Deferred revenue and customer advances 81,287 32,862 114,149
Income taxes 30,369 40,263 70,632
---------- -------------- ----------- -----------
Total current liabilities 187,158 266,256 453,414
Long-term debt, less current portion -- 213,526 213,526
Other liabilities 470 55,240 55,710
Stockholders' equity (deficit):
Preferred stock -- -- --
Common stock 2,563 674 (557) 2,680
Additional paid-in capital 251,919 1,197,656 557 1,450,132
Other equity (4,803) 6,101 1,298
Retained earnings (deficit) 419,285 (1,642,672) (1,223,387)
Treasury stock, at cost (24,169) -- (24,169)
---------- -------------- ----------- -----------
Total stockholders' equity (deficit) 644,795 (438,241) -- 206,554
---------- -------------- ----------- -----------
Total liabilities and stockholders' equity (deficit) $ 832,423 $ 96,781 $ -- $ 929,204
========== ============== =========== ===========
</TABLE>
See accompanying notes to Unaudited Pro Forma Combined Condensed Financial
Statements
<PAGE>
Unaudited Pro Forma Combined Condensed Statements of Income
For the Fiscal Year Ended September 30, 1997
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Pro forma
Parametric -------------------------
Technology Computervision Adjustments Combined
---------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
Software revenue:
License $591,849 $ 72,777 $ (19,900) $ 644,726
Service 216,947 98,221 19,900 335,068
---------- --------------- ------------ -----------
Total software revenue 808,796 170,998 979,794
Other services revenue -- 82,224 82,224
---------- --------------- ------------ -----------
Total revenue 808,796 253,222 1,062,018
Cost of software revenue:
License 8,233 11,217 19,450
Service 68,259 62,878 131,137
Cost of other services revenue -- 74,807 74,807
---------- --------------- ------------ -----------
Total cost of revenue 76,492 148,902 225,394
---------- --------------- ------------ -----------
Software gross profit:
License 583,616 61,560 (19,900) 625,276
Service 148,688 35,343 19,900 203,931
---------- --------------- ------------ -----------
Total software gross profit 732,304 96,903 829,207
Other services gross profit -- 7,417 7,417
---------- --------------- ------------ -----------
Total gross profit 732,304 104,320 836,624
Software operating expenses:
Sales and marketing 313,785 75,072 388,857
Research and development 53,236 40,093 93,329
General and administrative 38,699 22,216 60,915
Non-recurring software charges -- 45,000 45,000
Other services operating expenses -- 12,188 12,188
Non-recurring other services charges -- 7,000 7,000
---------- --------------- ------------ -----------
Total operating expenses 405,720 201,569 607,289
---------- --------------- ------------ -----------
Operating income (loss):
Software 326,584 (85,478) 241,106
Other services -- (11,771) (11,771)
---------- --------------- ------------ -----------
Total operating income (loss) 326,584 (97,249) 229,335
Interest and other income (expense), net 10,625 (34,275) (23,650)
---------- --------------- ------------ -----------
Income (loss) before income taxes 337,209 (131,524) 205,685
Provision for income taxes 118,024 -- 118,024
---------- --------------- ------------ -----------
Net income (loss) $219,185 $ (131,524) $ 87,661
========== =============== ============ ===========
Net income (loss) per share - basic $ 0.86 $ (2.06) $ 0.33
========== =============== ============ ===========
Net income (loss) per share - diluted $ 0.82 $ (2.06) $ 0.32
========== =============== ============ ===========
Weighted average number of common shares outstanding 255,313 63,949 (52,873) 266,389
========== =============== ============ ===========
Weighted average number of common and dilutive
common equivalent shares outstanding 267,116 63,949 (52,873) 278,192
========== =============== ============ ===========
</TABLE>
See accompanying notes to Unaudited Pro Forma Combined Condensed Financial
Statements
<PAGE>
Unaudited Pro Forma Combined Condensed Statements of Income
For the Fiscal Year Ended September 30, 1996
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Pro forma
Parametric -------------------------
Technology Computervision Adjustments Combined
---------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
Software revenue:
License $ 448,699 $ 191,728 $ (27,000) $ 613,427
Service 151,423 111,087 27,000 289,510
---------- --------------- ------------ -----------
Total software revenue 600,122 302,815 902,937
Other services revenue -- 174,384 174,384
---------- --------------- ------------ -----------
Total revenue 600,122 477,199 1,077,321
Cost of software revenue:
License 4,642 16,382 21,024
Service 51,812 67,748 119,560
Cost of other services revenue -- 134,686 134,686
---------- --------------- ------------ -----------
Total cost of revenue 56,454 218,816 275,270
---------- --------------- ------------ -----------
Software gross profit:
License 444,057 175,346 (27,000) 592,403
Service 99,611 43,339 27,000 169,950
---------- --------------- ------------ -----------
Total software gross profit 543,668 218,685 762,353
Other services gross profit -- 39,698 39,698
---------- --------------- ------------ -----------
Total gross profit 543,668 258,383 802,051
Software operating expenses:
Sales and marketing 238,860 93,569 332,429
Research and development 39,476 40,144 79,620
General and administrative 28,557 25,896 54,453
Acquisition and related costs 32,119 3,500 35,619
Non-recurring software charges -- 11,000 11,000
Other services operating expenses -- 24,201 24,201
Non-recurring other services charges -- 5,000 5,000
---------- --------------- ------------ -----------
Total operating expenses 339,012 203,310 542,322
---------- --------------- ------------ -----------
Operating income:
Software 204,656 44,576 249,232
Other services -- 10,497 10,497
---------- --------------- ------------ -----------
Total operating income 204,656 55,073 259,729
Interest and other income (expense), net 11,501 (30,806) (19,305)
---------- --------------- ------------ -----------
Income before income taxes 216,157 24,267 240,424
Provision for income taxes 78,247 2,610 80,857
---------- --------------- ------------ -----------
Net income $ 137,910 $ 21,657 $ 159,567
========== ============== ============ ===========
Net income per share - basic $ 0.54 $ 0.34 $ 0.60
========== ============== ============ ===========
Net income per share - diluted $ 0.52 $ 0.33 $ 0.57
========== ============== ============ ===========
Weighted average number of common shares outstanding 253,100 63,287 (52,326) 264,061
========== ============== ============ ==========
Weighted average number of common and dilutive
common equivalent shares outstanding 266,422 64,784 (53,563) 277,643
========== ============== ============ ==========
</TABLE>
See accompanying notes to Unaudited Pro Forma Combined Condensed Financial
Statements
<PAGE>
Unaudited Pro Forma Combined Condensed Statements of Income
For the Fiscal Year Ended September 30, 1995
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Pro forma
Parametric -----------------------
Technology Computervision Adjustments Combined
---------- --------------- ------------ ---------
<S> <C> <C> <C> <C>
Software revenue:
License $ 288,349 $ 163,716 $ (23,800) $ 428,265
Service 105,961 122,885 23,800 252,646
---------- --------------- ------------ ---------
Total software revenue 394,310 286,601 680,911
Other services revenue -- 220,473 220,473
---------- --------------- ------------ ---------
Total revenue 394,310 507,074 901,384
Cost of software revenue:
License 3,348 17,181 20,529
Service 32,970 70,704 103,674
Cost of other services revenue -- 154,870 154,870
---------- --------------- ------------ ---------
Total cost of revenue 36,318 242,755 279,073
---------- --------------- ------------ ---------
Software gross profit:
License 285,001 146,535 (23,800) 407,736
Service 72,991 52,181 23,800 148,972
---------- --------------- ------------ ---------
Total software gross profit 357,992 198,716 556,708
Other services gross profit -- 65,603 65,603
---------- --------------- ------------ ---------
Total gross profit 357,992 264,319 622,311
Software operating expenses:
Sales and marketing 163,918 92,905 256,823
Research and development 25,591 41,533 67,124
General and administrative 20,414 20,706 41,120
Acquisition and related costs 29,438 -- 29,438
Other services operating expenses -- 28,500 28,500
---------- --------------- ------------ ---------
Total operating expenses 239,361 183,644 423,005
---------- --------------- ------------ ---------
Operating income:
Software 118,631 43,572 162,203
Other services -- 37,103 37,103
---------- --------------- ------------ ---------
Total operating income 118,631 80,675 199,306
Interest and other income (expense), net 9,029 (44,924) (35,895)
---------- --------------- ------------ ---------
Income before income taxes 127,660 35,751 163,411
Provision for income taxes 50,298 5,005 55,303
---------- --------------- ------------ ---------
Net income $ 77,362 $ 30,746 $ 108,108
========== =============== ============ =========
Net income per share - basic $ 0.31 $ 0.60 $ 0.42
========== =============== ============ =========
Net income per share - diluted $ 0.30 $ 0.58 $ 0.40
========== =============== ============ =========
Weighted average number of common shares outstanding 246,050 51,143 (42,285) 254,908
========== =============== ============ =========
Weighted average number of common and dilutive
common equivalent shares outstanding 258,091 52,591 (43,482) 267,200
========== =============== ============ =========
</TABLE>
See accompanying notes to Unaudited Pro Forma Combined Condensed Financial
Statements
<PAGE>
PARAMETRIC TECHNOLOGY CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. The unaudited pro forma combined condensed financial statements of
Parametric and Computervision give retroactive effect to the Merger, which
is being accounted for as a pooling of interests and, as a result, such
statements are presented as if the combining companies had been combined for
all periods presented.
2. The pro forma combined net income per share-basic is based on the combined
weighted average number of common shares outstanding of Parametric common
stock and Computervision common stock for each period. The pro forma
combined net income per share-diluted is based on the combined weighted
average number of common and dilutive common equivalent shares of Parametric
common stock and Computervision common stock for each period. This is based
on the exchange ratio of 0.1732 shares of Parametric common stock (adjusted
for one-for-one stock dividend referenced in Note 8 below) for each share of
Computervision common stock as described in the Merger Agreement.
3. The unaudited pro forma combined condensed financial statements combine
Parametric's financial statements for the fiscal years ended September 30,
1997, 1996 and 1995 with Computervision's financial statements for the
fiscal years ended December 31, 1997, 1996 and 1995, respectively.
4. The unaudited pro forma combined condensed financial statements include
adjustments to conform the accounting policies of Computervision with those
followed by Parametric. The right to use element of maintenance fees has
been reclassified to service revenue for all periods presented.
5. Parametric and Computervision estimate they will incur merger-related costs
of approximately $10 million, including investment advisory fees, regulatory
filing costs, legal and accounting expenses and other transaction costs. In
addition, it is expected that as a result of the merger, the combined
company will incur debt prepayment and consolidation and integration
expenses presently estimated to be approximately $85 million on a pretax
basis. All of these costs and expenses and any tax benefit relating to these
costs and expenses have not been reflected as a pro forma adjustment in the
pro forma combined condensed financial statements as of September 30, 1997.
These amounts are preliminary estimates and subject to change. Moreover,
additional unanticipated expenses may be incurred in connection with the
integration of the business of the two companies.
6. Certain financial statement balances of Computervision have been
reclassified to conform with the Parametric financial statement
presentation.
7. As discussed in the June 29, 1997 financial statements of Computervision
included with its Quarterly Report on Form 10-Q, on July 18, 1997
Computervision transferred its other services business to CVSI, Inc. and
sold a majority interest in the voting securities of CVSI, Inc. to a third
party. Assuming that the CVSI transaction was completed as of January 1,
1996, the pro forma results of the combined company are as follows:
<TABLE>
<CAPTION>
Fiscal Year Ended
September 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
Revenue $979,794 $902,937
Net income 99,432 149,070
Net income per share - basic 0.37 0.56
Net income per share - diluted 0.36 0.54
</TABLE>
8. On February 12, 1998, Parametric's Board of Directors declared a one-for-one
stock dividend on all shares of common stock, which became effective on
March 6, 1998 to all stockholders of record on February 27, 1998. These pro
forma combined condensed financial statements and related notes have been
retroactively adjusted, as appropriate, to reflect this one-for-one stock
dividend.
