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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported)
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March 24, 2017
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PTC Inc.
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(Exact
Name of Registrant as Specified in Its Charter)
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Massachusetts
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(State
or Other Jurisdiction of Incorporation)
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0-18059
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04-2866152
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(Commission
File Number)
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(IRS
Employer Identification No.)
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140 Kendrick Street
Needham, Massachusetts
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02494-2714
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(781) 370-5000
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(Registrant’s
Telephone Number, Including Area Code)
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(Former
Name or Former Address, if Changed Since Last Report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Section
1 – Registrant’s Business and Operations
Item
1.01
Entry
into a Material Definitive Agreement.
On
March 24, 2017, PTC Inc. entered into Amendment No. 5 (the
“Amendment”) to the Credit Agreement dated as of
November 4, 2015 by and among PTC Inc., JP Morgan Chase Bank,
N.A., as Administrative Agent, and the lenders party thereto (the
“Credit Agreement”). The Amendment reduces
the revolving loan commitment under the Credit Agreement to
$600 million from $900 million, reduces the foreign currency
borrowing sublimit to $350 million from $500 million, and
increases the permitted total leverage ratio to 4.50 to 1.00 from
4.00 to 1.00. The amendment also amends the definition of
Consolidated EBITDA used within our financial covenant ratios,
including the total leverage ratio, to accommodate our business
model transition, and makes certain other administrative changes to
the Credit Agreement. Giving effect to the Amendment, we could have
borrowed $230 million under the Credit Agreement as of the
beginning of our second quarter that ends April 1, 2017. The
financial ratios under the Credit Agreement are calculated as of
the end of each fiscal quarter; accordingly, the amount that we can
borrow under the Credit Agreement may change from quarter to
quarter depending on our financial results for the quarter and
amounts borrowed or repaid during the quarter.
This
amendment is expected to provide us with additional liquidity
during our subscription transition, including if our subscription
transition accelerates, that we expect will enable us to resume
repurchases of our common stock in the second half of our fiscal
year ending September 30, 2017. The reduction in the loan
commitment reduces the commitment fees we are required to pay by
$900,000 a year for unused capacity we were unlikely to be able to
use due to our subscription transition. We repaid net
$20 million under the credit facility this
quarter.
The
above description of the Amendment is qualified in its entirety by
reference to the full text of the Amendment, a copy of which is
filed as Exhibit 10 hereto.
Forward Looking Statements
Statements
in this Current Report on Form 8-K that are not historic
facts, including statements about the expected effect of the
Amendment on our liquidity during our subscription transition and
our resumption of repurchases of our common stock, are forward
looking statements that involve risks and uncertainties that could
cause actual results to differ materially from those projected.
These risks include: the macroeconomic and/or global manufacturing
climates may not improve or may deteriorate; customers may not
purchase our solutions when or at the rates we expect; foreign
currency exchange rates may vary from our expectations and thereby
affect our reported revenue and expense; the mix of revenue between
license & subscription solutions, support and professional
services could be different than we expect, which could impact our
EPS results; our customers may purchase more of our solutions as
subscriptions than we expect, which would adversely affect
near-term revenue, operating margins, and EPS; and we may be unable
to generate sufficient operating cash flow to return 40% of free
cash flow to shareholders and other uses of cash or our credit
facility limits could preclude share repurchases. 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 most recent Annual Report on Form 10-K and Quarterly
Report on Form 10-Q.
Section
9 – Financial Statements and Exhibits
Item
9.01
Financial
Statements and Exhibits.
(d) Exhibits
10
Amendment No. 5
dated March 24, 2017 to Credit Agreement dated as of
November 4, 2015 by and among PTC Inc., JP Morgan Chase Bank,
N.A., as Administrative Agent, and the lenders party
thereto.
SIGNATURES
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 hereunto duly authorized.
PTC
Inc.
Date:
March 30, 2017
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By:
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/s/Andrew
Miller
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Andrew
Miller
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Chief
Financial Officer
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