Aspen Technology Announces Financial Results for Third Quarter Fiscal Year 2007
CAMBRIDGE, Mass.--(BUSINESS WIRE)--May 9, 2007--Aspen Technology, Inc. (Nasdaq: AZPN), a leading provider of software and services to the process industries, today announced financial results for its third quarter of fiscal 2007, ended March 31, 2007.
Mark Fusco, President and CEO of AspenTech, stated, "We are pleased with the company's performance in the third quarter, which was highlighted by revenue and profitability that were at or above the high-end of our guidance. The underlying drivers to our revenue continue to be strong and balanced, including new customer wins and expanded usage and renewal activity with existing customers." Fusco added, "The energy, chemicals and E&C markets that we serve remain strong, and companies in these verticals are increasing their investments in systems that help to optimize their operations. AspenTech is benefiting from these positive industry fundamentals due to our industry leading domain expertise, unique breadth and depth of our aspenONE product suite, and focus on delivering a significant ROI for each of our customers."
For the quarter ended March 31, 2007, AspenTech reported total revenue of $80.3 million, an increase of 4% from the third quarter of the prior fiscal year. Within total revenue, license revenue was $43.6 million, an increase of 3%, and services revenue was $36.7 million, an increase of 6%, compared to the third quarter of fiscal 2006, respectively. As previously disclosed, the comparable third quarter of fiscal 2006 was unusually strong due to the positive impact of large deals.
AspenTech's income from operations, determined in accordance with generally accepted accounting principles (GAAP), was $7.7 million in the third quarter of fiscal 2007, representing an operating margin of 10%. This compares to operating income of $7.9 million in the third quarter of fiscal 2006, which also represented an operating margin of 10%.
GAAP operating expenses in the third quarter of fiscal 2007 included $3.2 million of non-cash stock-based compensation, $1.6 million of non-cash amortization of intangibles associated with previous acquisitions, $1.6 million in restructuring charges due to the company's continued office consolidations, and a $0.7 million loss on sales of assets - the combination of which reduced the company's operating margin by approximately 9 percentage points. These items reduced the prior year's operating margin by approximately 7 percentage points.
Net income applicable to common shareholders was $8.6 million in the third quarter of fiscal 2007, including the impact of $146,000 in preferred stock dividends and discount. This represents an increase of over 200% compared to net income applicable to common shareholders of $2.7 million in the same period last year, which included the impact of $3.9 million in preferred stock dividends and discount. As previously disclosed, the company's Series D-1 and D-2 preferred shares converted to common stock in December 2006 and January 2007, respectively.
Net income per share applicable to common shareholders was $0.10 for the quarter ended March 31, 2007, an increase of 100% compared to $0.05 in the same period last year. Weighted shares outstanding were 91.6 million in the third quarter of fiscal 2007, an increase compared to 55.5 million in the same period last year due to the previously mentioned conversion of preferred shares to common shares. The above mentioned stock-based compensation, amortization of intangibles associated with previous acquisitions, loss on sales of assets and restructuring charges, in addition to a $0.6 million non-cash foreign exchange loss on inter-company balances offset by the benefit of approximately $1.2 million of interest income associated with the accretion of retained interest in sold receivables, had a net, negative impact of $0.07 per share in the quarter ended March 31, 2007. In the prior year period, the combination of these items had a net, negative impact of $0.07 per share.
AspenTech had cash and cash equivalents of $100.8 million at March 31, 2007, an increase of approximately $8 million from $92.5 million at the end of the previous quarter. The increase in cash was primarily the result of positive cash flow from operations of approximately $12.8 million, offset by the cash payment of approximately $6.6 million in consideration for the accumulated preferred dividends associated with the conversion of the company's Series D-2 preferred stock.
Conference Call and Webcast
AspenTech will host a conference call and webcast today, May 9, at 8:30 pm (EST) to discuss the company's financial results, business outlook, and related corporate and financial matters. The live dial-in number is (877) 239-3024, conference ID code 5774680. 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 5774680 through May 16, 2007.
About AspenTech
AspenTech is a recognized expert and leading provider of award-winning process optimization software and services. AspenTech's integrated aspenONE(TM) solutions enable manufacturers to reduce costs, increase capacity, and optimize operational performance end-to-end throughout the engineering, plant operations, and supply chain management processes, resulting in millions of dollars in cost savings. For more information, visit www.aspentech.com.
(C) 2007 Aspen Technology, Inc. AspenTech(R), aspenONE(TM) and the Aspen leaf logo are registered trademarks of Aspen Technology, Inc. All rights reserved.
ASPEN TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except per share data)
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
2007 2006 2007 2006
--------- --------- ---------- ----------
(Unaudited)
REVENUES:
Software licenses $ 43,608 $ 42,392 $ 132,550 $ 108,299
Service and other 36,682 34,737 108,477 105,285
--------- --------- ---------- ----------
Total revenues 80,290 77,129 241,027 213,584
--------- --------- ---------- ----------
COST OF REVENUES:
Cost of software licenses 3,571 4,518 10,429 12,637
Cost of service and other 18,620 18,542 54,711 53,847
Amortization of technology
related intangible assets 1,632 2,162 5,206 6,396
--------- --------- ---------- ----------
Total cost of revenues 23,823 25,222 70,346 72,880
--------- --------- ---------- ----------
Gross profit 56,467 51,907 170,681 140,704
OPERATING COSTS:
Selling and marketing 23,505 21,615 66,833 61,132
Research and development 12,120 12,005 31,339 34,014
General and administrative 10,857 9,791 34,522 30,361
Restructuring charges 1,597 534 3,632 3,728
Loss on sales and
disposals of assets 695 103 6,270 480
--------- --------- ---------- ----------
Total operating costs 48,774 44,048 142,596 129,715
--------- --------- ---------- ----------
Income from operations 7,693 7,859 28,085 10,989
Interest income, net 2,478 1,057 6,065 2,627
Other income (expense),
net (130) 793 2,419 (1,693)
--------- --------- ---------- ----------
Income before income tax
provision 10,041 9,709 36,569 11,923
Income tax provision (1,322) (3,095) (4,652) (4,797)
--------- --------- ---------- ----------
Net income 8,719 6,614 31,917 7,126
Accretion of preferred
stock discount and
dividend (146) (3,888) (7,290) (11,509)
--------- --------- ---------- ----------
Income (loss) applicable
to common shareholders $ 8,573 $ 2,726 $ 24,627 $ (4,383)
========= ========= ========== ==========
EARNINGS PER SHARE:
Income (loss) per share
applicable to common
shareholders - Basic $ 0.10 $ 0.06 $ 0.38 $ (0.10)
========= ========= ========== ==========
Income (loss) per share
applicable to common
shareholders - Diluted $ 0.10 $ 0.05 $ 0.35 $ (0.10)
========= ========= ========== ==========
Weighted average shares
outstanding - Basic 86,228 44,561 65,211 43,843
========= ========= ========== ==========
Weighted average shares
outstanding - Diluted 91,614 55,497 90,647 43,843
========= ========= ========== ==========
Supplemental information -
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
2007 2006 (1) 2007 2006 (1)
--------- --------- --------- ---------
(Unaudited)
Stock-based compensation costs
included in the Statements of
Operations
Cost of service and other $ 451 $ 604 $ 1,114 $ 1,338
Selling and marketing 919 835 2,565 2,063
Research and development 716 403 1,306 967
General and administrative 1,155 796 2,994 2,618
--------- --------- --------- ---------
Total stock-based
compensation $ 3,241 $ 2,638 $ 7,979 $ 6,986
========= ========= ========= =========
(1) Fiscal 2006 amounts also include withholding tax charges
recorded during the stock option restatement.
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
March 31, June 30,
2007 2006
--------- ---------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $100,836 $ 86,272
Accounts receivable, net 48,207 49,163
Unbilled services 11,681 8,518
Current portion of long-term installments
receivable, net 9,324 12,123
Prepaid expenses and other current assets 9,192 9,179
--------- ---------
Total current assets 179,240 165,255
--------- ---------
Long-term installments receivable, net 19,777 35,681
Retained interest in sold receivables 30,348 19,010
Equipment and leasehold improvements, net 6,228 8,674
Computer software development costs, net 12,580 15,456
Intangible assets, net 19,365 24,911
Deferred tax assets 3,277 3,097
Other assets 2,189 2,552
--------- ---------
Total assets $273,004 $274,636
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 254 $ 247
Accounts payable and accrued expenses 75,104 82,329
Deferred revenue 60,458 57,936
--------- ---------
Total current liabilities 135,816 140,512
--------- ---------
Long-term debt, less current maturities - 149
Deferred revenue, less current portion 2,050 2,609
Other liabilities 16,652 20,446
Redeemable preferred stock - 125,475
Total stockholders' equity (deficit) 118,486 (14,555)
--------- ---------
Total liabilities and stockholders' equity
(deficit) $273,004 $274,636
========= =========
CONTACT:
Media:
Aspen Technology, Inc.
Elisa Logan, 617-949-1398
elisa.logan@aspentech.com
or
Investors:
Integrated Corporate Relations
Kori Doherty, 617-956-6730
kdoherty@icrinc.com
SOURCE:
Aspen Technology, Inc.