Aspen Technology Reports Fourth Quarter and Fiscal Year 2002 Financial Results
Company anticipates operating profit in quarter ending December 2002Aspen Technology, Inc. (Nasdaq: AZPN) today reported financial results for its fourth quarter and fiscal year ended June 30, 2002.
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Total revenues for the fourth quarter were $84.0 million, with license revenues totaling $37.4 million and services revenues totaling $46.6 million. For the quarter ending June 30, 2002, the company reported a pro forma net loss of $11.7 million, or $0.34 per share. The pro forma loss excludes restructuring charges, the charges for in-process R&D, the write-down of certain equity investments, the reduction in value of the deferred tax asset, and the dilutive impact from the accretion of the preferred stock discount and dividend. On a Generally Accepted Accounting Principles (GAAP) basis, the company reported a fourth quarter loss of $60.0 million, or $1.72 per share.
For the full fiscal year ending June 30, 2002, AspenTech recorded total revenues of $320.6 million, compared with $326.9 million reported in fiscal 2001. In fiscal 2002, the company recorded a pro forma net loss of $37.3 million, or $1.14 per share, excluding restructuring charges, the charges for in-process R&D, the write-down of certain equity investments, the reduction in value of the deferred tax asset, and the dilutive impact from the accretion of the preferred stock discount and dividend. On a Generally Accepted Accounting Principles (GAAP) basis, the company reported a loss of $83.5 million, or $2.56 per share for fiscal year 2002.
"We have taken aggressive actions intended to return us to operating profitability and positive cash flow by the end of this calendar year," said Larry Evans, Chairman and CEO. "In the near-term, we have cut expenses to breakeven at quarterly revenue of $88 million. We have also sharpened our focus on two core product lines: Engineering and Supply Chain Manufacturing. This streamlined approach will enable us to better match revenue and spending until the IT spending environment strengthens, while maintaining our key customer support and development activities.
"We have also made significant changes in our sales and product development leadership and improved our organizational efficiency. We believe this will add more predictability to our financial results, while allowing us to develop and market our solutions more rapidly and efficiently. AspenTech's reputation for technical excellence and process industry expertise has never been stronger, and in the year ahead we are committed to delivering financial results that reflect this valuable industry leadership."
For the first quarter of fiscal 2003, which ends September 30, 2002, AspenTech expects total expenses, including cost of revenues, will total approximately $88 million, compared with total revenues of approximately $84 million. This expense run rate represents a reduction of approximately 14 percent, or $14 million, from fourth quarter fiscal 2002 spending levels, adjusted to include a full quarter of Hyprotech expenses and excluding restructuring and other charges. These anticipated reductions will result from the mandatory furlough program, temporary salary cuts, hiring freeze, and discretionary spending controls recently implemented in July, as well as headcount reductions and other actions taken in the fourth quarter that will fully take effect in the September quarter. For the second fiscal quarter of fiscal 2003, AspenTech believes it will record total revenues of approximately $92 million, with total expenses of approximately $88 million. For fiscal year 2003, the company expects revenues to range between $380 and $385 million, with total expenses of approximately $361 million.
During the fourth quarter of fiscal 2002, AspenTech signed 11 license transactions of approximately $1 million or greater. The company signed substantial license agreements with BASF, Celanese, Degussa, Muller, PPG Industries and Philips Petroleum.
As previously announced, the company will be holding a conference call to discuss its financial results, business outlook, and related corporate and financial matters at 4:45 p.m. EST on Thursday, August 15, 2002. Interested parties may listen to a live Webcast of the call by logging on to AspenTech's website: http://www.aspentech.com and clicking on the "Webcast" link under the Investor Relations section of the site. A replay of the call will be archived on AspenTech's website for ten days and will also be available via telephone beginning at 8:00 p.m. EST on August 15, 2002, by dialing 719-457-0820 and entering in confirmation code 150110.
Aspen Technology, Inc. is a leading supplier of enterprise software and services to the process industries, enabling its customers to increase their margins and optimize their business performance. AspenTech's engineering solutions, incorporating Hyprotech's technologies, help companies design and improve their plants and processes, maximizing returns throughout their operational life. AspenTech's supply chain manufacturing solutions allow companies to run their plants and supply chain more profitably, from customer demand through to the delivery of the finished product. Over 1,200 leading companies rely on AspenTech's software every day to drive improvements across their most important engineering and operational processes. AspenTech's customers include: Air Liquide, AstraZeneca, Bayer, BASF, BP, ChevronTexaco, Dow Chemical, DuPont, ExxonMobil, GlaxoSmithKline, Lyondell Equistar, Merck, Mitsubishi Chemical, Shell and Unilever. For more information, visit www.aspentech.com.
Paragraphs, 4, 5, 6 and 7 of this press release contain forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve factors that may cause AspenTech's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward- looking statements. Specifically, by way of example and without limitation, some of the statements in the third, fourth, fifth and sixth paragraphs are forward-looking statements and their achievement is subject to a number of factors including: AspenTech's lengthy sales cycle which makes it difficult to predict quarterly operating results; fluctuations in AspenTech's quarterly operating results; AspenTech's dependence on customers in the cyclical chemicals, petrochemicals and petroleum industries; AspenTech's dependence on key employees; intense competition; AspenTech's dependence on systems integrators and other strategic partners; and other risk factors described from time to time in AspenTech's periodic reports filed with the Securities and Exchange Commission. AspenTech cannot guarantee any future results, levels of activity, performance, or achievements. Moreover, neither AspenTech nor anyone else assumes responsibility for the accuracy and completeness of any forward-looking statements. AspenTech undertakes no obligation to update any of the forward-looking statements after the date of this press release.
AspenTech, Aspen ProfitAdvantage, Plantelligence, and the Aspen logo are trademarks of Aspen Technology, Inc., Cambridge, Mass.
ASPEN TECHNOLOGY, INC. CONSOLIDATED CONDENSED BALANCE SHEET (Dollars in thousands) June 30, June 30, 2002 2001 ASSETS Current assets: Cash, cash equivalents and short-term investments $52,120 $67,638 Accounts receivable and unbilled services, net 125,987 116,389 Current portion of long-term installments receivable, net 40,404 31,094 Deferred tax asset 2,929 3,252 Prepaid expenses and other current assets 18,699 17,591 Total current assets 240,139 235,964 Long-term installments receivable, net 68,318 43,428 Equipment and leasehold improvements, net 50,803 43,276 Computer software development costs, net 13,810 8,539 Intangible assets, net 125,363 43,964 Purchased intellectual property, net 27,626 - Deferred tax asset 15,576 15,686 Other assets 6,708 15,737 Total assets $548,343 $406,594 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $5,334 $2,539 Obligation subject to common stock settlement 11,100 - Accounts payable and accrued expenses 94,987 62,959 Unearned revenue 20,983 18,711 Deferred revenue 38,624 24,341 Total current liabilities 171,028 108,550 Long-term debt, less current maturities 92,135 88,149 Obligation subject to common stock settlement 1,810 - Deferred revenue, less current portion 9,548 8,190 Deferred tax liability 15,003 - Other liabilities 5,031 635 Total stockholders' equity 253,788 201,070 Total liabilities and stockholders' equity $548,343 $406,594 ASPEN TECHNOLOGY, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) Three Months Ended Twelve Months Ended June 30, June 30, June 30, June 30, 2002 2001 2002 2001 REVENUES: Software licenses $37,363 $40,012 $133,913 $147,448 Services 46,589 47,973 186,691 179,476 Total revenues 83,952 87,985 320,604 326,924 EXPENSES: Cost of software licenses 3,167 3,151 11,830 11,856 Cost of services 29,600 30,695 119,972 114,595 Selling and marketing 30,629 31,846 115,225 113,608 Research and development 19,045 18,763 74,458 68,913 General and administrative 10,638 8,189 34,258 30,643 Restructuring charges 13,941 6,969 16,083 6,969 Charges for in-process research and development 14,900 2,300 14,900 9,915 Total costs and expenses 121,920 101,913 386,726 356,499 Income (loss) from operations (37,968) (13,928) (66,122) (29,575) Other income (expense), net (388) 650 (893) 669 Write-off of investment (8,923) - (8,923) (5,000) Interest income, net 178 878 1,177 4,799 Income (loss) before provision for (benefit from) income taxes (47,101) (12,400) (74,761) (29,107) Provision for (benefit from) income taxes 10,703 (3,720) 2,404 (8,732) Net income (loss) (57,804) (8,680) (77,165) (20,375) Accretion of preferred stock discount and dividend (1) (2,161) - (6,301) - Net income (loss) applicable to common stockholders $(59,965) $(8,680) $(83,466) $(20,375) Basic and diluted earnings (loss) per share: Net income (loss) per share $(1.66) $(0.28) $(2.37) $(0.68) Accretion of preferred stock discount and dividend (0.06) - (0.19) - Net income (loss) per share applicable to common stockholders (2) $(1.72) $(0.28) $(2.56) $(0.68) Weighted average shares outstanding - basic and diluted 34,829 30,572 32,625 29,941 Pro Forma before Charges for In Process R&D, Write-off of Investments, Amortization of Goodwill, Restructuring Charges, Preferred Stock Discount and Dividend Accretion, and Valuation on Deferred Tax Asset: Net income (loss) $(11,741) $1,232 $(37,259) $3,633 Diluted earnings (loss) per share $(0.34) $0.04 $(1.14) $0.12 (1) The twelve months ending June 30, 2002 include a preferred stock dividend of $3.5 million that was incurred during the quarter ended March 31, 2002, primarily due to a beneficial conversion feature embedded in the Series B preferred stock. This dividend was not included in our March 31, 2002 financial results. (2) The three months and twelve months ending June 30, 2001 include $0.6 million and $2.1 million of amortization of goodwill respectively, while 2002 results do not include any amortization of goodwill to comply with FASB 142. Supplemental information - Reconciliation of net income (loss) to pro forma net income (loss) Three Months Ended Twelve Months Ended June 30, June 30, June 30, June 30, 2002 2001 2002 2001 Net income (loss) $(59,965) $(8,680) $(83,466) $(20,375) Adjustments to net loss: Write-off of acquired in-process research and development 14,900 2,300 14,900 9,915 Write-off of investment 8,923 - 8,923 5,000 Amortization of goodwill - 643 - 2,124 Restructuring charge 13,941 6,969 16,083 6,969 Preferred stock discount and dividend accretion 2,161 - 6,301 - Valuation of deferred tax asset 8,299 - - - Pro forma net income (loss) $(11,741) $1,232 $(37,259) $3,633 Contacts: For Media: Peter Watt Aspen Technology, Inc. +44 (0) 1223 819 752 For Media: Carin Warner Warner Communications (978) 526-1960 email@example.com For Investors: Joshua Young Aspen Technology, Inc. (617) 949-1274 firstname.lastname@example.orgSOURCE Aspen Technology, Inc.
Media, Peter Watt of Aspen Technology, Inc., +44 (0) 1223 819
752, or Carin Warner of Warner Communications, +1-978-526-1960,
email@example.com; or Investors, Joshua Young of Aspen Technology, Inc.,
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