SEC Comment Letter for PTC (PTC) — Feb 3, 2011
PTC INC.
Date: Feb. 3, 2011 · CIK: 0000857005 · Accession: 0000000000-11-007096
AI Filing Summary & Sentiment
File numbers found in text: 000-18059
Letter
February 3, 2011 Jeffrey D. Glidden Executive Vice President and Chief Financial Officer Parametric Technology Corporation 140 Kendrick Street Needham, MA 02494 Re: Parametric Technology Corporation Form 10-K for the Fiscal Year Ended September 30, 2010 Filed November 23, 2010 File No. 000-18059
Dear Mr. Glidden: We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advi sing us when you will provide the requested response. If you do not believe our comments apply to your fact s and circumstances or do not believe an amendment is appropriate, pl ease tell us why in your response. After reviewing any amendment to your filing and the information you provide in response to these comments, we ma y have additional comments. Form 10-K for the Fiscal Year Ended September 30, 2010
Item 7. Management’s Discussion and Analys is of Financial Condition and Results of Operations, page 15 1. We note that since June 2009 you have pursu ed a “domino account strategy” and that certain filings, such as the exhibits to your current reports on Form 8-K filed on October 27, 2010 and January 26, 2011, provide de tailed discussions of the company’s achievement of this and other strategic goals. Please tell us how you considered including similarly detailed discussions in the MD&A sections of your annual and quarterly reports.
Jeffrey D. Glidden Parametric Technology Corporation February 3, 2011 Page 2 Results of Operations
Revenue, page 18
2. On page 7, you state that you expect competition to intensify, which could result in price reductions for your products and services, reduc ed margins, and loss of market share. Please tell us how you considered discussing the extent to which changes in revenues from period to period were due to changes in prices or changes in the volume of products sold and services provided. See Item 303(a)(3)(iii) of Regul ation S-K. If material, your disclosure should also discuss pricing pressure in your industry, and how this has affected prices in your industry, the pri ces you charge, and your revenues. Notes to Consolidated Financial Statements
B. Summary of Significant Accounting Policies
Revenue Recognition, page F-7
3. We note that you recognize revenue from fixed pr ice consulting services that qualify for separate accounting using th e percentage-of-completion method. Please describe the types of services being provided. Also, te ll us why you believe it is appropriate to recognize revenue using the percentage-of-co mpletion method. In this regard, please note that pursuant to ASC 605-35-15-6 the recognition of revenue pursuant to ASC 605-35 is not permitted for service arrangements. 4. We note your disclosure that vendor-specific ob jective evidence (“VSOE ”) of services is “based upon [y]our recent pricing for those services when sold separately.” Please describe, in detail, your me thodology for establishing VSOE of maintenance services. Describe the various factors th at affect your VSOE analysis including customer type and other pricing factors (e.g., geographic region, purchase volume, competitive pricing, perpetual versus term license, etc). Where VSOE is based on stated renewal rates, please tell us how you determined the renewal rates are substantive. In this regard, please provide the range of renewal rates and tell us what percentage of your customers actually renew at such rates. Where VSOE is base d on stand-alone sales, provide the volume and range of stand-alone sales used to establish VSOE.
We urge all persons who are responsible for th e accuracy and adequacy of the disclosure in the filing to be certain that the filing include s the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules requir e. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
Jeffrey D. Glidden Parametric Technology Corporation February 3, 2011 Page 3 In responding to our comments, please provi de a written statement from the company acknowledging that: • the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States.
You may contact David Edgar, Staff Accountant, at (202) 551-3459, or Christine Davis, Assistant Chief Accountant, at (202) 551-3408 if you have questi ons regarding comments on the financial statements and related matters. If you have any other questi ons, please contact Evan Jacobson, Staff Attorney, at (202) 551-3428 or Ma rk Shuman, Legal Branch Chief, at (202) 551- 3462. If you require further assistance, do not hesitate to contact me at (202) 551-3406.
Sincerely,
/s/ Patrick Gilmore
Patrick Gilmore Accounting Branch Chief
Show Raw Text
February 3, 2011
Jeffrey D. Glidden Executive Vice President and Chief Financial Officer Parametric Technology Corporation 140 Kendrick Street Needham, MA 02494
Re: Parametric Technology Corporation
Form 10-K for the Fiscal Year Ended September 30, 2010
Filed November 23, 2010 File No. 000-18059
Dear Mr. Glidden:
We have reviewed your filing and have the following comments. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response. If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
Form 10-K for the Fiscal Year Ended September 30, 2010
Item 7. Management’s Discussion and Analys is of Financial Condition and Results of
Operations, page 15
1. We note that since June 2009 you have pursu ed a “domino account strategy” and that
certain filings, such as the exhibits to your current reports on Form 8-K filed on
October 27, 2010 and January 26, 2011, provide de tailed discussions of the company’s
achievement of this and other strategic goals. Please tell us how you considered
including similarly detailed discussions in the MD&A sections of your annual and
quarterly reports.
Jeffrey D. Glidden Parametric Technology Corporation February 3, 2011 Page 2
Results of Operations
Revenue, page 18
2. On page 7, you state that you expect competition to intensify, which could result in price
reductions for your products and services, reduc ed margins, and loss of market share.
Please tell us how you considered discussing the extent to which changes in revenues
from period to period were due to changes in prices or changes in the volume of products
sold and services provided. See Item 303(a)(3)(iii) of Regul ation S-K. If material, your
disclosure should also discuss pricing pressure in your industry, and how this has affected
prices in your industry, the pri ces you charge, and your revenues.
Notes to Consolidated Financial Statements
B. Summary of Significant Accounting Policies
Revenue Recognition, page F-7
3. We note that you recognize revenue from fixed pr ice consulting services that qualify for
separate accounting using th e percentage-of-completion method. Please describe the
types of services being provided. Also, te ll us why you believe it is appropriate to
recognize revenue using the percentage-of-co mpletion method. In this regard, please
note that pursuant to ASC 605-35-15-6 the recognition of revenue pursuant to ASC 605-35 is not permitted for service arrangements.
4. We note your disclosure that vendor-specific ob jective evidence (“VSOE ”) of services is
“based upon [y]our recent pricing for those services when sold separately.” Please describe, in detail, your me thodology for establishing VSOE of maintenance services.
Describe the various factors th at affect your VSOE analysis including customer type and
other pricing factors (e.g., geographic region, purchase volume, competitive pricing, perpetual versus term license, etc). Where VSOE is based on stated renewal rates, please
tell us how you determined the renewal rates are substantive. In this regard, please
provide the range of renewal rates and tell us what percentage of your customers actually
renew at such rates. Where VSOE is base d on stand-alone sales, provide the volume and
range of stand-alone sales used to establish VSOE.
We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e. Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
Jeffrey D. Glidden Parametric Technology Corporation February 3, 2011 Page 3
In responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of the United States.
You may contact David Edgar, Staff Accountant, at (202) 551-3459, or Christine Davis,
Assistant Chief Accountant, at (202) 551-3408 if you have questi ons regarding comments on the
financial statements and related matters. If you have any other questi ons, please contact Evan
Jacobson, Staff Attorney, at (202) 551-3428 or Ma rk Shuman, Legal Branch Chief, at (202) 551-
3462. If you require further assistance, do not hesitate to contact me at (202) 551-3406.
Sincerely,
/s/ Patrick Gilmore
Patrick Gilmore Accounting Branch Chief