Aspen Technology Reports Solid Engineering Business Performance, Lower Expenses in First Quarter Fiscal 2003
Company Expects Breakeven Operations in Current Period, Profit in March Quarter
Aspen Technology, Inc. (Nasdaq: AZPN) today reported financial results for its first quarter ending September 30, 2002.(Photo: http://www.newscom.com/cgi-bin/prnh/20000811/ASPENLOGO )
Total revenues for the first quarter were $77.3 million, with license revenues totaling $29.7 million and services revenues totaling $47.6 million. The company reported a net loss of $10.7 million, or $0.28 per share. The company's first quarter net loss applicable to common stockholders was $13.0 million, or $0.34 per share, after accounting for the accretion of the preferred stock discount and dividend.
"Our new organization, which is focused around our two major product lines, has helped to streamline our operations and will set the foundation for improved efficiency in the coming quarters," said David McQuillin, President and CEO of AspenTech. "We achieved our expense reduction targets across the company, cutting spending to $88 million in the first quarter. Our Engineering business hit our revenue targets and was profitable in the quarter. However, our Manufacturing/Supply Chain business fell short and did not meet our expectations. While we saw solid results from our foundation products, demand for our integrated, enterprise products continued to be weak.
"As a result, we are realigning our expenses within the Manufacturing/Supply Chain business to focus on near-term opportunities. These actions are intended to restore the Manufacturing/Supply Chain business, and AspenTech as a whole, to profitability in the third quarter of fiscal 2003. Since we will only achieve a partial quarter of benefits in the current quarter, our target is to break even for the three months ending December 31, 2002."
For the second quarter, AspenTech expects expenses, including cost of revenues, will total approximately $80-82 million, approximately 19% below fourth quarter fiscal 2002 levels if Hyprotech were included for a full quarter. Based on its recently implemented reductions, the company expects its number of employees will total approximately 1,750 at December 31, 2002, down from approximately 2,150 at September 30, 2002.
"We are looking forward to AspenWorld, our global process industry conference that kicks off next week, as this gathering of customers and prospects has traditionally been an important catalyst for our software sales. I am excited about the solutions we will be showcasing and the opportunities to enhance key customer relationships," added McQuillin.
During the first quarter of fiscal 2003, AspenTech signed nine license transactions of approximately $1 million or more, up from three in the first quarter of fiscal 2002. The company signed substantial license agreements in the quarter with Aventis, Conoco, Jacobs Engineering, Praxair and SINOPEC.
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, October 24, 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 October 24, 2002, by dialing 719-457- 0820 and entering in confirmation code 643085.
About AspenTech
Aspen Technology, Inc. is a leading supplier of enterprise software 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 manufacturing/supply chain solutions allow companies to run their plants and supply chains more profitably, from customer demand, to production in the plant, to the delivery of finished products. 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.
The headline and the fourth and fifth paragraphs of this press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For this purpose, any statement using the term "will," "should," "could," "anticipates," "believes" or a comparable term is a forward-looking statement. Actual results may vary significantly from AspenTech's expectations based on a number of risks and uncertainties, 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 need to hire additional qualified personnel and its dependence on key current 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 and registration statements 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 and the Aspen logo are trademarks of Aspen Technology, Inc., Cambridge, Mass.
Contacts:
For Media:
Peter Watt
Aspen Technology, Inc.
+44 (0) 1223 819 752
For Media:
Carin Warner
Warner Communications
(978) 526-1960
carin@warnerpr.com
For Investors:
Joshua Young
Aspen Technology, Inc.
(617) 949-1274
joshua.young@aspentech.com
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(Dollars in thousands)
September 30, June 30,
2002 2002
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $47,894 $52,120
Accounts receivable and unbilled
services, net 102,609 125,987
Current portion of long-term
installments receivable, net 41,869 40,404
Deferred tax asset 2,929 2,929
Prepaid expenses and other current
assets 18,268 18,699
Total current assets 213,569 240,139
Long-term installments receivable, net 68,496 68,318
Equipment and leasehold improvements,
net 49,244 50,803
Computer software development costs,
net 16,640 13,810
Intangible assets, net 122,869 125,363
Purchased intellectual property, net 26,147 27,626
Deferred tax asset 15,576 15,576
Other assets 7,380 6,708
Total assets $519,921 $548,343
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $4,983 $5,334
Amount owed to Accenture 10,150 11,100
Accounts payable and accrued expenses 78,709 94,987
Unearned revenue 18,130 20,983
Deferred revenue 39,257 38,624
Total current liabilities 151,229 171,028
Long-term debt, less current maturities 91,016 92,135
Obligation subject to common stock
settlement 3,278 1,810
Deferred revenue, less current portion 7,332 9,548
Deferred tax liability 14,404 15,003
Other liabilities 4,450 5,031
Total stockholders' equity 248,212 253,788
Total liabilities and stockholders'
equity $519,921 $548,343
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
Three Months Ended
September 30, September 30,
2002 2001
REVENUES:
Software licenses $29,646 $19,231
Services 47,604 46,960
Total revenues 77,250 66,191
EXPENSES:
Cost of software licenses 3,335 2,444
Cost of services 28,008 30,142
Selling and marketing 29,154 26,624
Research and development 17,745 17,999
General and administrative 9,821 7,422
Restructuring charge - 2,642
Total costs and expenses 88,063 87,273
Income (loss) from operations (10,813) (21,082)
Other income (expense), net (501) (184)
Interest income, net 581 753
Income (loss) before provision for
(benefit from) income taxes (10,733) (20,513)
Provision for (benefit from) income
taxes - (6,154)
Net income (loss) (10,733) (14,359)
Accretion of preferred stock
discount and dividend (2,234) -
Net income (loss) applicable to
common stockholders $(12,967) $(14,359)
Basic and diluted earnings (loss)
per share:
Net income (loss) per share $(0.28) $(0.45)
Accretion of preferred stock
discount and dividend (0.06) -
Net income (loss) per share
applicable to common stockholders $(0.34) $(0.45)
Weighted average shares outstanding
- basic and diluted 37,994 31,760
Pro Forma before Restructuring
Charge and Preferred Stock
Discount and Dividend Accretion:
Net income (loss) $(10,733) $(12,510)
Diluted earnings (loss) per share $(0.28) $(0.39)
Supplemental information - Reconciliation of net income (loss) to pro
forma net income (loss)
Three Months Ended
September 30, September 30,
2002 2001
Net income (loss) $(12,967) $(14,359)
Adjustments to net loss:
Restructuring charge, net of
tax effect - 1,849
Preferred stock discount and
dividend accretion 2,234 -
Pro forma net income (loss) $(10,733) $(12,510)
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SOURCE Aspen Technology, Inc.
CONTACT:
Media: Peter Watt of Aspen Technology, Inc., +44 (0) 1223 819
752, or Carin Warner of Warner Communications, +1-978-526-1960,
carin@warnerpr.com; or Investors: Joshua Young of Aspen Technology, Inc.,
+1-617-949-1274, joshua.young@aspentech.com
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