Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2008

June 30, 2009
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Files Annual Report on Form 10-K for Fiscal Year 2008

BURLINGTON, Mass.--(BUSINESS WIRE)--Jun. 30, 2009-- Aspen Technology, Inc. (OTC: AZPN.PK), a leading provider of software and services to the process industries, today announced financial results for the fourth quarter and fiscal year 2008, ended June 30, 2008.

Mark Fusco, Chief Executive Officer of AspenTech, said “The company delivered a strong operational performance in fiscal 2008, highlighted by annual license bookings growth of over 15% and record cash flows from operations.” Fusco added, “We are pleased to achieve another milestone related to bringing the company’s financial statements current. We have now completed our first audit process and Annual Report on Form 10-K with KPMG, and we are executing against plans to finish our fiscal 2009 reports as quickly as possible.”

Income Statement for Fourth Quarter of Fiscal 2008

For the fourth quarter ended June 30, 2008, AspenTech reported total revenue of $98.3 million, a decrease of 3% compared to the fourth quarter of fiscal 2007. Within total revenue, license revenue was $59.7 million, a decrease of 12%, and services revenue was $38.6 million, an increase of 15%, both compared to the fourth quarter of fiscal 2007.

During the fourth quarter of fiscal 2008, the company entered into three contracts with a net present value totaling $12.5 million that did not meet all of the criteria for revenue recognition as of the end of the quarter. There was not a comparable impact on the prior year period. As previously disclosed, license bookings were approximately $70 million in the fourth quarter of fiscal 2008, up slightly compared to the fourth quarter of fiscal 2007.

AspenTech's income from operations, determined in accordance with generally accepted accounting principles (GAAP), was $21.1 million in the fourth quarter of fiscal 2008, representing an operating margin of 21.4%, compared to $24.0 million in the fourth quarter of fiscal 2007.

Net income was $20.7 million for the fourth quarter of fiscal 2008, compared to $17.9 million for the fourth quarter of fiscal 2007. Diluted income per share attributable to common shareholders was $0.22 for the quarter ended June 30, 2008, three cents better than the fourth quarter of fiscal 2007.

Income Statement for the Full Year Fiscal 2008

For the fiscal year ended June 30, 2008, AspenTech reported total revenue of $311.6 million, a decrease of 9% compared to fiscal 2007. Within total revenue, license revenue was $168.4 million, a decrease of 16%, and services revenue was $143.2 million, an increase of 1%, both compared to the full fiscal year 2007.

During fiscal 2008, the company entered into seven contracts with a net present value totaling approximately $57.5 million that did not meet all of the criteria for revenue recognition as of the end of the fiscal year. There was no comparable impact on the prior fiscal year period.

AspenTech's income from operations, determined in accordance with generally accepted accounting principles (GAAP), was $18.6 million for fiscal 2008, representing an operating margin of 6%, compared to $55.4 million for fiscal 2007.

Net income was $24.9 million for fiscal 2008, compared to $45.5 million for fiscal 2007. Diluted income per share attributable to common shareholders was $0.27 for fiscal 2008, compared to $0.50 for fiscal 2007.

Balance Sheet and Cash Flow

The company’s cash balance at the end of fiscal 2008 was approximately $134 million, an increase compared to approximately $132 million at the end of fiscal 2007. Cash flow from operations was $70.8 million during fiscal 2008, offset by cash used in investing activities of $9.8 million and cash used in financing activities of $59.8 million.

Total company-owned accounts and installments receivable balances were $221.2 million at the end of fiscal 2008, an increase of $131.1 million from $90.0 million at the end of fiscal 2007. The company’s secured borrowings balance at the end of fiscal 2008 was $147.2 million, a reduction of $58.9 million from $206.1 million at the end of fiscal 2007.

The company’s total deferred revenue balance at June 30, 2008, was $106.9 million, an increase of 59% compared to the end of fiscal 2007.

Conference Call and Webcast

AspenTech will host a conference call and webcast tomorrow, July 1, 2009, at 8:30 am (Eastern Time) to discuss the Company's fourth quarter 2008 financial results and related corporate and financial matters. The live dial-in number is (877) 239-3024, conference ID code 17469720. Interested parties may also listen to a live webcast of the call by logging on to the Investor Relations section of AspenTech’s website, http://www.aspentech.com/corporate/investor.cfm, and clicking on the “webcast” link. A replay of the call will be archived on AspenTech’s website and will also be available via telephone at (800) 642-1687 or (706) 645-9291, conference ID code 17469720 through July 8, 2009.

About AspenTech

AspenTech is a leading supplier of software that optimizes process manufacturing – including oil and gas, petroleum, chemicals, pharmaceuticals and other industries that manufacture and produce products from a chemical process. With integrated aspenONE solutions, process manufacturers can implement best practices for optimizing their engineering, manufacturing and supply chain operations. As a result, AspenTech customers are better able to increase capacity, improve margins, reduce costs and become more energy efficient. To see how the world’s leading process manufacturers rely on AspenTech to achieve their operational excellence goals, visit www.aspentech.com.

© 2009 Aspen Technology, Inc. AspenTech, aspenONE, the Aspen leaf logo and the 7 Best Practices of Engineering Excellence are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.

Forward Looking Statements

This press release may contain forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may vary significantly from AspenTech’s expectations based on a number of risks and uncertainties, including, without limitation: fluctuations in AspenTech’s quarterly revenues, operating results and cash flow; difficulty in predicting quarterly revenue levels and operating results due to AspenTech’s lengthy sales cycle; economic downturn in the highly cyclical oil and gas, chemicals, petrochemicals and petroleum industries from which AspenTech derives a majority of its total revenues; substantial damages and expenses AspenTech might incur as the result of securities and derivative litigation and government investigations based on AspenTech’s restatement of its consolidated financial statements due to AspenTech’s prior software accounting practices; a determination that AspenTech has failed to comply with its existing consent decree with the Federal Trade Commission; failure to remedy effectively material weaknesses identified by AspenTech in its internal control over financial reporting; risks associated with the delisting of AspenTech’s common stock from The NASDAQ Stock Market; failure to manage international operations effectively, or failure to address the challenges associated with transacting business internationally; competition from software offered by current competitors and new market entrants, as well as from internally developed solutions; failure to develop new software products or enhance existing products and services; new accounting standards or interpretations of existing accounting standards that could adversely affect AspenTech’s operating results; failure to develop or maintain strategic alliance relationships; failure to raise capital when needed; 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. AspenTech expressly disclaims any current intention to update forward-looking statements after the date of this press release.

ASPEN TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except per share data)
                 
                 
    Three Months Ended   Year Ended
    June 30, 2008   June 30, 2007   2008   2007
                 
Revenues:                
Software licenses   $ 59,688     $ 67,883     $ 168,404     $ 199,761  
Service and other     38,624       33,487       143,209       141,268  
Total revenues     98,312       101,370       311,613       341,029  
Cost of revenues:                
Cost of software licenses     4,675       4,159       15,916       14,588  
Cost of service and other     17,253       17,862       69,077       72,426  
Amortization of technology related intangible assets     -       1,340       -       6,546  
Total cost of revenues     21,928       23,361       84,993       93,560  
Gross profit     76,384       78,009       226,620       247,469  
Operating costs:                
Selling and marketing     28,736       26,554       99,682       93,387  
Research and development     11,326       11,364       45,179       42,703  
General and administrative     15,232       14,983       54,565       51,010  
Restructuring charges     (5 )     1,002       8,623       4,634  
(Gain) loss on sales and disposals of assets     21       98       (66 )     332  
Total operating costs     55,310       54,001       207,983       192,066  
Income from operations     21,074       24,008       18,637       55,403  
Interest income     5,702       5,802       23,784       21,909  
Interest expense     (4,045 )     (4,618 )     (17,783 )     (18,613 )
Other income (expense), net     (1,460 )     (3,605 )     3,386       (734 )
Income before provision for taxes     21,271       21,587       28,024       57,965  
Provision for income taxes     (613 )     (3,650 )     (3,078 )     (12,447 )
Net income     20,658       17,937       24,946       45,518  
Accretion of preferred stock discount and dividends     -       -       -       (7,290 )
Net income (loss) applicable to common stockholders   $ 20,658     $ 17,937     $ 24,946     $ 38,228  
Earnings (loss) per common share:                
Basic   $ 0.23     $ 0.20     $ 0.28     $ 0.54  
Diluted   $ 0.22     $ 0.19     $ 0.27     $ 0.50  
Weighted average shares outstanding:                
Basic     89,998       88,472       89,640       70,879  
Diluted     94,162       93,299       94,092       91,869  
                                 
                                 
Supplemental information –
Stock-based compensation costs included in the Statements of Operations
             
             
     

Quarters Ended

     Years Ended
      June 30,     June 30,
Recorded as expense:     2008     2007     2008     2007
Cost of service and other     $ 221     $ 408     $ 1,254     $ 1,522
Selling and marketing       657       859       3,345       3,424
Research and development       223       609       1,411       1,915
General and administrative       1,129       1,207       4,590       4,201
Total stock-based compensation     $ 2,230     $ 3,083     $ 10,600     $ 11,062
                                 
                                 
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
       
       
      June 30,
      2008     2007
      (In Thousands, except per share data)
ASSETS            
Current assets:            
Cash and cash equivalents     $ 134,048       $ 132,267  
Accounts receivable, net       86,870         47,200  
Current portion of installments receivable, net       51,762         14,214  
Current portion of collateralized receivables, net       43,186         104,473  
Unbilled services       3,459         10,641  
Prepaid expenses and other current assets       11,710         10,163  
Deferred tax assets       2,305         -  
Total current assets       333,340         318,958  
Non-current installments receivable, net       82,528         28,613  
Non-current collateralized receivables, net       92,163         140,603  
Property, equipment and leasehold improvements, net       11,799         6,535  
Computer software development costs       5,443         11,104  
Other intangible assets, net       615         585  
Goodwill       19,019         19,112  
Other non-current assets       9,719         3,387  
        554,626         528,897  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current liabilities:            
Current portion of secured borrowing       47,816         101,826  
Current portion of term debt       -         193  
Accounts payable       6,586         5,833  
Accrued expenses       61,746         67,068  
Income taxes payable       13,877         28,674  
Deferred revenue       86,551         62,345  
Current deferred tax liability       457         -  
Total current liabilities       217,033         265,939  
Long-term secured borrowing       99,391         104,324  
Deferred revenue       20,354         4,761  
Other non-current liabilities       45,035         16,667  
Commitments and contingencies (Notes 11, 12 and 13)            
Series D redeemable convertible preferred stock, $0.10 par value—            
Authorized— 3,636 shares in 2008 and 2007            
Issued and outstanding— none in 2008 or 2007       -         -  
Stockholders’ equity:            
Common stock, $0.10 par value— Authorized—120,000,000 shares            
Issued— 90,235,526 shares in 2008 and 89,133,494 shares in 2007            
Outstanding— 90,002,062 shares in 2008 and 88,900,030 shares in 2007       9,024         8,913  
Additional paid-in capital       493,088         480,671  
Accumulated deficit       (336,517 )       (361,463 )
Accumulated other comprehensive income       7,731         9,598  
Treasury stock, at cost—233,464 shares of common stock in 2008 and 2007       (513 )       (513 )
Total stockholders’ equity       172,813         137,206  
      $ 554,626       $ 528,897  

 

 

Source: Aspen Technology, Inc.

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