Aspen Technology Reports Third Quarter Fiscal 2002 Financial Results
Company Implements Strategic and Tactical Programs Intended to Deliver Sustained ProfitabilityAspen Technology, Inc. (Nasdaq: AZPN) today reported financial results for its fiscal 2002 third quarter ended March 31, 2002.
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Total revenues for the third quarter were $83.5 million, with license revenues totaling $37.4 million and services revenues totaling $46.1 million. For the quarter ending March 31, 2002, the company reported an operating loss of $6.9 million, resulting in a pro forma loss of $0.15 per diluted share. The pro forma number excludes the dilution of preferred stock discount and dividend.
"We are one hundred percent committed to doing whatever it takes to restore AspenTech to sustained profitability," said Larry Evans, Chairman and CEO. "Due to the current economic environment, we have taken difficult, but necessary, short-term actions that should enable us to make money in the current quarter. Our fourth quarter is seasonally our strongest and we possess a robust pipeline of sales opportunities that we believe will close by the end of June.
"In addition, we have implemented a number of strategic and tactical programs that we believe will enhance our profitability longer-term. In recent months, we have significantly strengthened our balance sheet and expanded our partner relationship with Accenture to deliver enterprise-wide software solutions. Our product offering, competitive position and the value we deliver to our customers have never been stronger. Given these factors, we feel confident that in a moderate economic expansion our revenue and earnings growth will provide investors attractive returns."
AspenTech also announced today it is taking a series of actions intended to restore the company to profitability in the current quarter and thereafter. The company will organize itself around two primary lines of business, engineering software and operations software, which includes manufacturing and supply chain software. This realignment of responsibilities will enable the company to implement expense cuts that it believes will reduce total spending for the first quarter of fiscal 2003 to approximately $81 million or 10 percent from its current quarterly run rate. These actions will result in a ten percent reduction in the company's worldwide headcount, which numbered approximately 1,950 at March 31, 2002.
In addition, AspenTech will substantially lower its fourth quarter 2002 expenses by implementing a mandatory furlough program, making temporary salary cuts for managerial employees, instituting a hiring freeze, and substantially curtailing discretionary spending. AspenTech expects these actions will reduce its quarterly expenses, including cost of revenues, to approximately $83 to $85 million for the fourth quarter of 2002, compared with revenue it believes will be approximately $86 to $88 million. For fiscal year 2003, the company now expects revenues to range between $355 and $365 million, with total expenses of approximately $335 to $340 million.
AspenTech signed nine license transactions in the third quarter of approximately $1 million or greater. As previously announced, the most significant transaction of the quarter was a deal with ExxonMobil for components of AspenTech's manufacturing and supply chain solutions. The company also signed large license agreements with BP Oil, Fluor Daniel, Sanofi Synthelabo and Sunoco. Among AspenTech's product offerings, the company's engineering solutions again delivered a strong performance, and supply chain solutions also made a solid contribution. Demand from AspenTech's core vertical markets was robust, with the greatest contribution coming from petroleum, followed by chemicals.
On a Generally Accepted Accounting Principles (GAAP) basis, the company reported a loss of ($0.17) in the quarter, with the preferred stock dividend and discount accretion accounting for approximately ($0.02). The company also implemented a new FASB accounting rule that requires companies to include the gross amount of reimbursable expenses in revenues and cost of revenues, rather than netting these amounts in the statement of operations. The accounting change resulted in approximately a $4.0 million increase to services revenue and a $4.0 million increase to cost of services revenue for the quarter ended March 31, 2002. Furthermore, similar adjustments to include reimbursable expenses in both revenues and cost of revenues have been done for all periods presented.
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, April 25, 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 for forty-eight hours via telephone, beginning at 8:00 p.m. EST on April 25, 2002, by dialing 719-457-0820 and entering in confirmation code 213749.
Aspen Technology, Inc. is the leading supplier of integrated software and solutions to the $6 trillion process industries. The company's Aspen ProfitAdvantage(TM) solution enables companies to identify and maximize profit opportunities throughout their entire value chain -- from the supply of raw materials, through the production of goods, to the delivery of final products to customers. The Aspen ProfitAdvantage solution encompasses engineering, manufacturing, supply chain and e-business collaboration technologies, providing the tools that enable manufacturers to design, optimize and execute business processes in real time. Over 1,200 leading process companies already rely on AspenTech's 20 years of process industry experience to increase revenues, reduce costs and improve capital efficiency. AspenTech's customers include: Air Liquide, AstraZeneca, Bayer, BASF, BP, Chevron, Dow Chemical, DuPont, Equistar, Exxon Mobil, GlaxoSmithKline, Merck, Mitsubishi Chemical, and Unilever. For more information, visit http://www.aspentech.com.
Paragraphs 3,4,5 and 6 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 STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) Three Months Ended Nine Months Ended March 31, March 31, March 31, March 31, 2002 2001 2002 2001 REVENUES: Software licenses $37,380 $34,224 $96,550 $107,436 Services 46,086 46,092 140,102 131,503 Total revenues 83,466 80,316 236,652 238,939 EXPENSES: Cost of software licenses 3,165 3,141 8,663 8,705 Cost of services 29,969 29,588 90,372 83,900 Selling and marketing 29,521 29,340 84,597 81,762 Research and development 19,585 18,590 55,413 50,150 General and administrative 8,678 8,289 23,620 22,454 Restructuring charges (500) - 2,142 - Charge for in-process research and development - - - 7,615 Total costs and expenses 90,418 88,948 264,807 254,586 Income (loss) from operations (6,952) (8,632) (28,155) (15,647) Other income (expense), net (152) (99) (505) 19 Write-off of investment - - - (5,000) Interest income, net 103 1,052 999 3,921 Income (loss) before provision for (benefit from) income taxes (7,001) (7,679) (27,661) (16,707) Provision for (benefit from) income taxes (2,100) (2,304) (8,305) (5,012) Net income (loss) (4,901) (5,375) (19,356) (11,695) Accretion of preferred stock discount and dividend (602) - (602) - Net income (loss) applicable to common stockholders $(5,503) $(5,375) $(19,958) $(11,695) Basic and diluted earnings (loss) per share: Net income (loss) per share $(0.15) $(0.18) $(0.61) $(0.39) Accretion of preferred stock discount and dividend (0.02) - (0.02) - Net income (loss) per share applicable to common stockholders (1) $(0.17) $(0.18) $(0.63) $(0.39) Weighted average shares outstanding - basic and diluted 31,948 30,186 31,768 29,729 Pro Forma before In Process R&D, Write-off of Investment, Amortization of Goodwill, Restructuring Charge, Preferred Stock Discount and Dividend Accretion, and including Accenture Shares: Net income (loss) $(5,853) $(4,953) $(18,459) $(1,799) Diluted earnings (loss) per share $(0.18) $(0.16) $(0.58) $(0.06) Weighted average shares outstanding - proforma 32,623 30,186 31,990 29,729 NOTE: (1) The three months and nine months ending March 31, 2001 include $600K and $1.5 million of amortization of goodwill respectively, while 2002 results do not include any amortization of goodwill to comply with FASB 142 ASPEN TECHNOLOGY, INC. CONSOLIDATED CONDENSED BALANCE SHEET (Dollars in thousands) Proforma March 31, March 31, June 30, 2002 2002 2001 ASSETS Current assets: Cash, cash equivalents and short- term investments $117,798 $117,798 $67,638 Accounts receivable and unbilled services, net 113,540 113,540 116,389 Current portion of long-term installments receivable, net 22,865 22,865 31,094 Deferred tax asset 3,252 3,252 3,252 Prepaid expenses and other current assets 21,304 21,304 17,591 Total current assets 278,759 278,759 235,964 Long-term installments receivable, net 32,343 32,343 43,428 Equipment and leasehold improvements, net 44,666 44,666 43,276 Computer software development costs, net 10,514 10,514 8,539 Intangible assets, net 40,470 40,470 43,964 Purchased intellectual property, net 29,600 29,600 - Deferred tax asset 18,509 18,509 15,686 Other assets 14,885 14,885 15,737 Total assets $469,746 $469,746 $406,594 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $3,063 $3,063 $2,539 Obligation subject to common stock settlement 29,600 - - Accounts payable and accrued expenses 46,619 46,619 62,959 Unearned revenue 21,308 21,308 18,711 Deferred revenue 29,050 29,050 24,341 Total current liabilities 129,640 100,040 108,550 Long-term debt, less current maturities 91,497 90,939 88,149 Deferred revenue, less current portion 4,983 4,983 8,190 Other liabilities 635 635 635 Total stockholders' equity 242,991 273,149 201,070 Total liabilities and stockholders' equity $469,746 $469,746 $406,594 Contacts: For Media: Peter Watt Aspen Technology, Inc. +44 (0) 1223 819 752 Carin Warner Warner Communications (978) 526-1960 firstname.lastname@example.org For Investors: Joshua Young Aspen Technology, Inc. (617) 949-1274 email@example.com MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X76361466SOURCE Aspen Technology, Inc.
CONTACT: For Media: Peter Watt of Aspen Technology, Inc., +44 (0) 1223 819 752; or Carin Warner of Warner Communications, +1-978-526-1960, firstname.lastname@example.org; or For Investors: Joshua Young of Aspen Technology, Inc., +1-617-949-1274, email@example.com /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20000811/ASPENLOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, 888-776-6555 or 212-782-2840 URL: http://www.aspentech.com http://www.prnewswire.com
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