AspenTech Logo

News Release

View printer-friendly version
<< Back

Aspen Technology Reports Third Quarter Fiscal 2002 Financial Results

CAMBRIDGE, Mass., Apr 25, 2002 /PRNewswire-FirstCall via COMTEX/ --

Company Implements Strategic and Tactical Programs Intended to Deliver Sustained Profitability

Aspen Technology, Inc. (Nasdaq: AZPN) today reported financial results for its fiscal 2002 third quarter ended March 31, 2002.

(Photo: )

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: 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.

About AspenTech

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

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.
                (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
      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

      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
      (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.
                            (Dollars in thousands)

                                          March 31,   March 31,   June 30,
                                             2002        2002        2001
    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

    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


     For Media:
     Peter Watt
     Aspen Technology, Inc.
     +44 (0) 1223 819 752

     Carin Warner
     Warner Communications
     (978) 526-1960

     For Investors:
     Joshua Young
     Aspen Technology, Inc.
     (617) 949-1274

                    MAKE YOUR OPINION COUNT -  Click Here
SOURCE 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,; or For Investors: Joshua Young of Aspen
                  Technology, Inc., +1-617-949-1274,
                  /Photo:  NewsCom:
                  AP Archive:
                  PRN Photo Desk, 888-776-6555 or 212-782-2840

Copyright (C) 2002 PR Newswire.  All rights reserved.