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Aspen Technology Announces Financial Results for the First-Quarter Fiscal Year 2010

Filing of 10-Q brings company current with SEC filing requirements
Reports its first quarter under the new aspenONE subscription-based licensing model




Aspen Technology, Inc. (OTC: AZPN.PK), a leading provider of software and services to the process industries, today announced its financial results for its first quarter of fiscal 2010, ended September 30, 2009.


Mark Fusco, Chief Executive Officer of AspenTech, said, "We are very pleased to have completed the process of bringing the company's financial statements current. As a result of our progress, we are continuing with our plan to begin the process of seeking a relisting of our common stock on a major U.S. stock exchange during the first calendar quarter of 2010."

Fusco added, "The first quarter of fiscal 2010 was a milestone for the company as we launched our new aspenONE licensing model. As previously discussed, while our customers have entered into multi-year term contracts for many years, the ratable revenue recognition associated with the new licensing model will initially result in significantly lower reported revenue and large operating losses, as a much smaller portion of the company's license bookings are recognized on an up-front basis. From a long-term perspective, we expect our financial performance to ultimately exceed that which would have been possible under our previous commercial model. During and after this multi-year transition process, we remain focused on increasing our total calculated term license contract value, which was more than $1.1 billion at the end of the first quarter on a gross basis."

For the quarter ended September 30, 2009, AspenTech reported total revenue of $39.8 million, a decrease compared to $86.4 million in the first quarter of the prior year due primarily to the ratable revenue recognition characteristics associated with the company's new aspenONE licensing model. With the launch of and focus on the company's new aspenONE licensing model, AspenTech has expanded the number of revenue categories that it will report, as follows:


  • Subscription revenue includes all revenue associated with the company's new aspenONE licensing model. Subscription revenue was approximately $25,000 in the first quarter of fiscal 2010. The new aspenONE licensing model was launched during the quarter and associated revenue is recognized on a daily basis over the course of the multi-year contract. Subscription revenue recognition begins when the first payment is due, which is typically 30 days after the contractual agreement is signed. The majority of the first quarter subscription bookings were closed in the final month of the quarter and the associated revenue will begin to be recognized in the second quarter of fiscal 2010.
  • Software revenue includes all non-subscription-based license revenue, including term-based contracts for specifically defined sets of products or point products as well as perpetual licenses. Software revenue was $11.1 million in the first quarter of fiscal 2010, compared to $49.6 million in the year ago period when license bookings were predominantly recognized on an up-front basis. The year ago period also benefitted from a net $15M of software revenue related to prior period license bookings.
  • Services & other revenue includes professional services, maintenance and other revenue, and is reported on a similar basis as compared to prior reporting periods. Services and other revenue was $28.7 million in the first quarter of fiscal 2010, a decrease compared to $36.8 million in the year ago period. The year-over-year decline consisted mainly of professional services and training revenue, a result of the more challenging economic environment compared to the year ago period.


For the quarter ended September 30, 2009, AspenTech reported a loss from operations of $24.8 million due primarily to the ratable revenue recognition treatment associated with the company's new aspenONE licensing model. For the quarter ended September 30, 2008, the company reported income from operations of $18.3 million. Net loss was $21.1 million in the first quarter of fiscal 2010, leading to net loss per diluted share of $0.23, compared to net income per diluted share of $0.12 in the same period last year.

AspenTech had a cash balance as of September 30, 2009 of $109 million, which compared to $122 million at the end of the fourth quarter of fiscal 2009. The company did not sell any installments receivable to raise cash during the first quarter of fiscal 2010 and it continued to reduce its secured borrowings balance, which was $108.8 million at the end of the quarter, down $3.3 million compared to the end of the fourth quarter of fiscal 2009.

Conference Call and Webcast

AspenTech will host a conference call and webcast today, December 21, at 8:00 a.m. (Eastern Time), to discuss the Company's financial results for the first quarter of fiscal 2010. The live dial-in number is (877) 245-0126, conference ID code 47703559. Interested parties may also listen to a live webcast of the call by logging on to the Investor Relations section of AspenTech's website,, 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 47703559 through December 28, 2009.

About AspenTech

AspenTech is a leading supplier of software that optimizes process manufacturing - for energy, chemicals, pharmaceuticals, engineering and construction, 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

© 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, including statements relating to the anticipated benefits of AspenTech's new subscription-based licensing model and the timing of the relisting of the stock on a national exchange. Actual results may vary significantly from AspenTech's expectations based on a number of risks and uncertainties, including, without limitation: customers' failure to adopt the new commercial model at the rate expected by AspenTech or at all; AspenTech's failure to realize the anticipated financial and operational benefits of the new commercial model; unanticipated distractions or delays affecting AspenTech or its independent accountants in connection with the review of operating results for the second quarter of fiscal 2010, ended December 31, 2009; unforeseen difficulties or uncertainties in the application of accounting standards; weaknesses in our internal controls, including our controls over the recognition of license revenue; 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.



(in thousands except per share data)
    September 30,
    2009   2008
    (In thousands, except per share data)
Subscription   $ 25     $ -  
Software     11,082       49,637  
Total subscription and software     11,107       49,637  
Services and other     28,689       36,769  
Total revenues     39,796       86,406  
Cost of revenues:        
Cost of subscription and software     1,773       2,647  
Cost of service and other     15,696       16,519  
Total cost of revenues     17,469       19,166  
Gross profit     22,327       67,240  
Operating costs:        
Selling and marketing     20,552       22,125  
Research and development     10,894       12,652  
General and administrative     15,414       14,115  
Restructuring charges     271       34  
Loss (gain) on sales and disposals of assets     -       4  
Total operating costs     47,131       48,930  
(Loss) income from operations     (24,804 )     18,310  
Interest income     5,449       5,915  
Interest expense     (2,411 )     (2,854 )
Other (expense) income, net     2,269       (3,581 )
Income before provision for taxes     (19,497 )     17,790  
Provision for income taxes     (1,565 )     (6,137 )
Net income     (21,062 )     11,653  
Net income applicable to common stockholders   $ (21,062 )   $ 11,653  
Earnings per common share:        
Basic   $ (0.23 )   $ 0.13  
Diluted   $ (0.23 )   $ 0.12  
Weighted average shares outstanding:        
Basic     90,107       90,019  
Diluted     90,107       94,005  


(in thousands)
    September 30,   June 30,
    2009   2009
    (In Thousands, except per share data)
Current assets:        
Cash and cash equivalents   $ 108,965     $ 122,213  
Accounts receivable, net     36,568       49,882  
Current portion of installments receivable, net     60,306       64,531  
Current portion of collateralized receivables, net     40,135       38,695  
Unbilled services     2,829       298  
Prepaid expenses and other current assets     8,511       9,413  
Prepaid income taxes    


Deferred tax assets     3,842       3,795  
Total current assets    


Non-current installments receivable, net     109,427       113,390  
Non-current collateralized receivables, net     52,845       57,671  
Property, equipment and leasehold improvements, net     9,445       9,604  
Computer software development costs     3,265       3,918  
Goodwill     17,459       16,686  
Non-current deferred tax assets     10,724       10,788  
Other non-current assets     1,941       1,933  


Current liabilities:        
Current portion of secured borrowing   $ 82,648     $ 83,885  
Accounts payable     5,463       5,135  
Accrued expenses     38,387       47,882  
Income taxes payable    


Deferred revenue     60,182       62,801  
Current deferred tax liability     2,508       2,481  
Total current liabilities    


Long-term secured borrowing     26,173       28,211  
Deferred revenue     15,562       16,070  
Non-current deferred tax liability     2,360       2,354  
Other non-current liabilities     33,653       35,859  

Commitments and contingencies


Stockholders' equity:


Series D redeemable convertible preferred stock, $0.10 par value-- Authorized-- 3,636 shares as of September 30, 2009 and June 30, 2009


Issued and outstanding-- none as of September 30, 2009 and June 30, 2009

    -       -  

Common stock, $0.10 par value-- Authorized--120,000,000 shares


Issued-- 90,346,815 shares as of September 30, 2009 and 90,326,513 shares as of June 30, 2009

Outstanding-- 90,113,351 shares as of September 30, 2009 and 90,093,049 shares as of June 30, 2009     9,035       9,033  
Additional paid-in capital     499,260       497,478  
Accumulated deficit     (304,655 )     (283,593 )
Accumulated other comprehensive income     8,604       7,005  

Treasury stock, at cost--233,464 shares of common stock as of September 30, 2009 and June 30, 2009

    (513 )     (513 )
Total stockholders' equity     211,731       229,410  


    $ 515,976  

SOURCE: Aspen Technology, Inc.

David Grip, +1-781-221-5273 (Media)
Kori Doherty, +1-617-956-6730 (Investors)