Aspen Technology Reports Ten Percent Sequential Increase in License Revenues
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Aug. 7, 2003--Company meets operational targets for third consecutive quarter
Aspen Technology, Inc. (NASDAQ: AZPN) today reported financial results for its fourth quarter and fiscal year ended June 30, 2003.
Total revenues for the fourth quarter were $82.8 million, with software license revenues totaling $38.5 million, and services revenue totaling $44.2 million. On a Generally Accepted Accounting Principles (GAAP) basis, AspenTech reported a net loss to common shareholders of $18.2 million, or $0.47 per share.
The GAAP net loss reflects $18.5 million of restructuring charges, approximately half of which relates to adjustments in accruals for facility costs. In addition, approximately $6 million of the charge relates to accruals for the company's upcoming Federal Trade Commission (FTC) litigation. The company issued a separate announcement today in which it responded to a formal complaint by the FTC challenging its acquisition of Hyprotech, which was completed in May 2002.
On a pro forma basis, AspenTech posted net income of $2.7 million, or $0.07 per share. This represents the third consecutive quarter of growth in pro forma earnings per share. Pro forma results exclude the restructuring and other charges and $2.4 million in preferred stock dividend and discount accretion.
"Our fourth quarter sequential license growth was driven by a substantial increase in contribution from our manufacturing/supply chain solutions, which exceeded our expectations for the first time in fiscal 2003," said David McQuillin, President and CEO of AspenTech. "Our performance was well balanced by geography and end-user market--a testament to improved sales force productivity. We believe this validates our actions over the past year to streamline our operations and enhance our organizational leadership.
"I am very proud of the dramatic turnaround the company has made over the past nine months, improving operational performance in the midst of a very difficult environment for enterprise software providers. The best evidence of this improvement was the signing of a definitive agreement with Advent International for a $100 million private equity financing, which is subject to shareholder approval. We believe these financial resources will help us to show year-on-year improvement in earnings and cash flow in fiscal 2004."
During the fourth fiscal quarter, AspenTech signed significant license transactions with Sinopec, Sasol, Huntsman Corp., Valero, Eli Lilly, Citgo, Celanese Chemicals and Cargill.
The company will be holding a conference call and webcast to discuss its financial results, business outlook, and related corporate and financial matters at 4:45 p.m. eastern time on Thursday, August 7, 2003. 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 the next twelve months and will also be available for forty-eight hours via telephone, beginning at 8:00 p.m. eastern time on August 7, 2003, by dialing 719-457-0820 and entering in confirmation code: 346887.
Pro Forma Results
AspenTech reports pro forma financial results, which exclude certain non-operational, non-cash and other specified charges that management generally does not consider in evaluating the Company's ongoing operations. These results are provided as a complement to results provided in accordance with accounting principles generally accepted in the United States (known as "GAAP"). Management believes this pro forma measure helps indicate underlying trends in the Company's business, and uses this pro forma measure to establish budgets and operational goals that are communicated internally and externally, to manage the Company's business and to evaluate its performance. A reconciliation of pro forma to GAAP is included in the attached condensed consolidated financial statements.
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, including 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 through to the delivery of the 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, Southern Company, TXU Energy and Unilever. For more information, visit www.aspentech.com.
The fifth and sixth 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; the FTC's investigation of AspenTech's acquisition of Hyprotech; fluctuations in AspenTech's quarterly operating results; AspenTech's dependence on customers in the cyclical chemicals, petrochemicals and petroleum industries; AspenTech's ability to raise additional capital as required; AspenTech's ability to integrate the operations of acquired companies; intense competition; AspenTech's need to develop and market products successfully; reliance on relationships with 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.
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
--------- --------- ---------- ---------
REVENUES:
Software licenses $38,549 $37,363 $139,859 $133,913
Services 44,220 46,588 182,862 186,691
--------- --------- ---------- ---------
Total revenues 82,769 83,951 322,721 320,604
--------- --------- ---------- ---------
EXPENSES:
Cost of software licenses 4,179 3,167 13,916 11,830
Cost of services 26,292 29,600 106,868 119,972
Selling and marketing 25,243 30,629 105,883 115,225
Research and development 15,617 19,045 65,086 74,458
General and administrative 9,044 10,638 36,681 34,258
Restructuring and other
charges 18,533 13,941 155,877 16,083
Charge for in-process
research and development - 14,900 - 14,900
--------- --------- ---------- ---------
Total costs and expenses 98,908 121,920 484,311 386,726
--------- --------- ---------- ---------
Income (loss) from
operations (16,139) (37,969) (161,590) (66,122)
Other income (expense), net 154 (386) (596) (893)
Write-off of investment - (8,923) - (8,923)
Interest income, net 155 177 1,353 1,177
--------- --------- ---------- ---------
Income (loss) before
provision for (benefit
from) income taxes (15,830) (47,101) (160,833) (74,761)
Provision for (benefit
from) income taxes - 10,702 - 2,404
--------- --------- ---------- ---------
Net income (loss) (15,830) (57,803) (160,833) (77,165)
Accretion of preferred
stock discount and
dividend (2,372) (2,161) (9,184) (6,301)
--------- --------- ---------- ---------
Net income (loss)
applicable to common
stockholders $(18,202) $(59,964) $(170,017) $(83,466)
========= ========= ========== =========
Basic and diluted net
income (loss) per share
applicable to common
stockholders $(0.47) $(1.60) $(4.42) $(2.58)
========= ========= ========== =========
Weighted average shares
outstanding - basic and
diluted 39,026 37,438 38,476 32,308
========= ========= ========== =========
Pro Forma before Restructuring and other charges, Charge for in-
process research and development, Write-off of investment, Valuation
on deferred tax asset, and Preferred stock discount and dividend
accretion:
Net income (loss) $2,703 $(11,740) $(4,956) $(37,259)
========= ========= ========== =========
Diluted earnings (loss)
per share $0.07 $(0.31) $(0.13) $(1.15)
========= ========= ========== =========
Weighted average shares
outstanding - diluted 41,051 37,438 38,476 32,308
========= ========= ========== =========
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,
2003 2002 2003 2002
--------- --------- ---------- ---------
Net income (loss) $(18,202) $(59,964) $(170,017) $(83,466)
Adjustments to net loss:
Restructuring and other
charges 18,533 13,941 155,877 16,083
Charge for in-process
research and development - 14,900 - 14,900
Write-off of investment - 8,923 - 8,923
Valuation on deferred tax
asset - 8,299 - -
Preferred stock discount
and dividend accretion 2,372 2,161 9,184 6,301
--------- --------- ---------- ---------
Pro forma net income (loss) $2,703 $(11,740) $(4,956) $(37,259)
========= ========= ========== =========
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
June 30, June 30,
2003 2002
--------- ---------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $51,567 $52,120
Accounts receivable, net 77,725 95,418
Unbilled services 15,279 30,569
Current portion of long-term installments
receivable, net 34,720 40,404
Deferred tax asset 2,929 2,929
Prepaid expenses and other current assets 11,581 18,699
--------- ---------
Total current assets 193,801 240,139
--------- ---------
Long-term installments receivable, net 73,377 68,318
Equipment and leasehold improvements, net 31,158 50,803
Computer software development costs, net 17,728 13,810
Intangible assets, net 41,279 125,363
Purchased intellectual property, net 1,861 27,626
Deferred tax asset 15,576 15,576
Other assets 5,445 6,708
--------- ---------
Total assets $380,225 $548,343
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $3,849 $5,334
Amount owed to Accenture 2,667 11,100
Accounts payable and accrued expenses 83,839 87,978
Unearned revenue 20,492 20,983
Deferred revenue 37,266 38,624
--------- ---------
Total current liabilities 148,113 164,019
--------- ---------
Long-term debt, less current maturities 89,911 92,135
Obligation subject to common stock settlement 5,495 1,810
Deferred revenue, less current portion 9,815 9,548
Deferred tax liability 13,258 15,003
Other liabilities 16,009 12,040
--------- ---------
Preferred stock 57,537 -
Total stockholders' equity 40,087 253,788
--------- ---------
Total liabilities and stockholders' equity $380,225 $548,343
========= =========
CONTACT:
Aspen Technology, Inc.
For Investors:
Joshua Young, 617-949-1274
joshua.young@aspentech.com
For Media:
Peter Watt
+44 1223 819-752
peter.watt@aspentech.com