Aspen Technology Announces Financial Results for the Second Quarter Fiscal Year 2010
Mark Fusco, Chief Executive Officer of AspenTech, said, "We are pleased with the company's performance in the second quarter, as solid transaction flow drove product-related bookings of approximately $95 million. Within product related bookings, the license portion was consistent with the year ago period. Early customer response to our new aspenONE licensing model has been very favorable, which is driving both renewal activity and expanded usage with customers across each of our target markets. As we look to the second half of our fiscal year, customer interest levels remain high and we are encouraged by the positive impact of our new aspenONE licensing model on both our competitive position and long-term market opportunity."
Fusco added, "After bringing our financial statements current with the filing of our first quarter results and subsequently filing our second quarter results in a timely manner, we have been approved to relist the company's common stock on the NASDAQ stock market effective tomorrow morning under the ticker 'AZPN'. We are excited to complete this process so that investors can focus exclusively on AspenTech's business performance, strong competitive position and market opportunity."
AspenTech's total revenue of $42.7 million decreased from $82.6 million in the second quarter of the prior year, due primarily to the ratable revenue recognition associated with the company's new aspenONE licensing model.
- Subscription revenue includes all revenue associated with the company's new aspenONE licensing model. Subscription revenue was approximately $1.2 million in the second quarter of fiscal 2010. No subscription revenue was recorded in the year ago period as the company's new aspenONE licensing model was launched during the first quarter of fiscal 2010. Subscription revenue is recognized over the course of the multi-year agreement, and recognition begins when the first payment is due, which is typically 30 days after the contract is signed.
- Software revenue includes all non-subscription-based license revenue, including term-based contracts for point products as well as perpetual licenses. Software revenue was $9.0 million in the second quarter of fiscal 2010, compared to $47.3 million in the year ago period. In fiscal year 2010, software revenue related to term contracts is recognized over the contract term, generally as payments become due. In prior fiscal year periods, the company predominantly recognized term license revenue on an up-front basis, and what was previously categorized as license revenue typically equaled license bookings. However, in the second quarter of fiscal year 2009, license revenue was approximately $17 million lower than license bookings as a result of certain license bookings not meeting the criteria for up-front revenue recognition.
- Services & other revenue, which includes professional services, maintenance and other revenue, was $32.5 million in the second quarter of fiscal 2010, a decrease compared to $35.4 million in the year ago period. The year-over-year decline was primarily a result of the more challenging economic environment compared to the year ago period. Services and other revenue was up sequentially compared to $28.7 million in the first quarter of fiscal 2010.
For the quarter ended December 31, 2009, AspenTech reported a loss from operations of $29.3 million due primarily to the ratable revenue recognition associated with the company's new aspenONE licensing model. For the quarter ended December 31, 2008, the company reported income from operations of $18.8 million. Net loss was $30.7 million in the second quarter of fiscal 2010, leading to net loss per basic and diluted share of $0.34 compared to net income per diluted share of $0.25 in the same period last year.
AspenTech had a cash balance of $109.4 million at December 31, 2009, compared to $109.0 million at the end of the first quarter of fiscal 2010. The company did not sell any installments receivable to raise cash during the second quarter of fiscal 2010 and it continued to reduce its secured borrowings balance, which was $96.5 million at the end of the quarter, down $12.3 million compared to $108.8 million at the end of the first quarter of fiscal 2010.
Other Second Quarter Business Metrics
- The company closed 18 product-related bookings of over $1 million during the second quarter, and 57 product related bookings between $250,000 and $1 million.
- Average deal size for product-related bookings over $100,000 was $778,000 in the second quarter.
Conference Call and Webcast
AspenTech will host a conference call and webcast today, February 9, at 5:00 p.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 53424224. 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 53424224 through February 16, 2010.
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 www.aspentech.com.
© 2010 Aspen Technology, Inc., AspenTech, aspenONE and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.
The second paragraph of 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. 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 AspenONE licensing model at the rate expected by AspenTech or at all; AspenTech's failure to realize the anticipated financial and operational benefits of the new AspenONE licensing model; 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.
|ASPEN TECHNOLOGY, INC.|
|CONSOLIDATED STATEMENT OF OPERATIONS|
|(in thousands, except per share data)|
|Three Months Ended||Six Months Ended|
|December 31,||December 31,|
|Total subscription and software||10,190||47,272||21,297||96,909|
|Services and other||32,496||35,355||61,185||72,124|
|Cost of revenue:|
|Subscription and software||1,677||2,877||3,450||5,524|
|Services and other||14,792||15,287||30,488||31,806|
|Total cost of revenue||16,469||18,164||33,938||37,330|
|Selling and marketing||23,757||19,988||44,309||42,113|
|Research and development||12,515||10,514||23,409||23,166|
|General and administrative||19,226||14,276||34,640||28,391|
|Loss (gain) on sales and disposals of assets||2||(1||)||2||3|
|Impairment of goodwill and intangible assets||-||623||-||623|
|Total operating costs||55,532||45,631||102,663||94,561|
|(Loss) income from operations||(29,315||)||18,832||(54,119||)||37,142|
|Other income (expense), net||(222||)||2,920||2,047||(661||)|
|(Loss) income before provision for income taxes||(26,934||)||24,964||(46,431||)||42,754|
|Provision for income taxes||(3,723||)||(2,003||)||(5,288||)||(8,140||)|
|Net (loss) income||$||(30,657||)||$||22,961||$||(51,719||)||$||34,614|
|(Loss) earnings per common share:|
|Weighted average shares outstanding:|
|ASPEN TECHNOLOGY, INC.|
|CONSOLIDATED CONDENSED BALANCE SHEET|
|December 31,||June 30,|
|Cash and cash equivalents||$||109,437||$||122,213|
|Accounts receivable, net of allowance for doubtful accounts of $3,840 and $5,809||35,507||49,882|
|Current portion of installments receivable, net of allowance for doubtful accounts of $990 and $1,015||52,405||64,531|
|Current portion of collateralized receivables, net of unamortized discount||30,874||38,695|
|Prepaid expenses and other current assets||6,075||9,413|
|Prepaid income taxes||13,593||13,159|
|Deferred tax assets||3,839||3,795|
|Total current assets||253,589||301,986|
|Non-current installments receivable, net of allowance for doubtful accounts of $1,682 and $1,663||104,144||113,390|
|Non-current collateralized receivables, net of unamortized discount||49,607||57,671|
|Property, equipment and leasehold improvements, net of accumulated depreciation of $28,703 and $27,438||9,154||9,604|
|Computer software development costs||2,560||3,918|
|Non-current deferred tax assets||10,737||10,788|
|Other non-current assets||1,854||1,933|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Current portion of secured borrowing||$||33,166||$||83,885|
|Income taxes payable||3,387||1,888|
|Current deferred tax liability||2,496||2,481|
|Total current liabilities||143,432||204,072|
|Long-term secured borrowing||63,347||28,211|
|Non-current deferred tax liability||2,362||2,354|
|Other non-current liabilities||33,065||35,859|
|Commitments and contingencies|
|Series D redeemable convertible preferred stock, $0.10 par value--|
|Authorized-- 3,636 shares as of December 31, 2009 and June 30, 2009|
|Issued and outstanding-- none as of December 31, 2009 and June 30, 2009||-||-|
|Common stock, $0.10 par value-- Authorized--210,000,000 shares|
|Issued-- 91,741,941 shares as of December 31, 2009 and 90,326,513
shares at June 30, 2009
|Outstanding-- 91,508,477 shares at December 31, 2009 and 90,093,049 shares at June 30, 2009||9,174||9,033|
|Additional paid-in capital||509,880||497,478|
|Accumulated other comprehensive income||8,481||7,005|
|Treasury stock, at cost--233,464 shares of common stock as of December 31,
2009 and June 30, 2009
|Total stockholders' equity||191,710||229,410|
SOURCE: Aspen Technology, Inc.
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