INSERTING and REPLACING Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2010

September 2, 2010

BURLINGTON, Mass., Sep 02, 2010 (BUSINESS WIRE) --

In the Condensed Consolidated Statements of Operations table, insert two columns for the Three Months Ended June 30, 2010 and 2009.


The corrected release reads:


Aspen Technology, Inc. (NASDAQ: AZPN), a leading provider of software and services to the process industries, today announced financial results for its fourth quarter and fiscal year 2010, ended June 30, 2010.

Mark Fusco, Chief Executive Officer of AspenTech, said, "The fourth quarter was a strong finish to our fiscal year. The combination of customers moving to our new aspenONE licensing model and new and expanded usage drove record quarterly and annual product related bookings that were well above our expectations. Most important, strong growth in our customer relationships during the fourth quarter contributed to double digit full year growth in the license portion of our total contract value during fiscal 2010. This reflects the underlying growth of our business, and we are optimistic that AspenTech is well positioned to continue growing its over a billion dollar total contract value in fiscal 2011 and beyond."

Fusco added, "In addition to validating market acceptance of our new aspenONE licensing model during fiscal 2010, we also made significant progress putting in place the foundation to grow the company's subscription cash flow model. We have not sold receivables to raise cash in nearly three years and we have steadily increased the portion of our business where customers have elected annual payment terms over the course of our multi-year contracts. We believe continued execution of this strategy will lead to strong growth in our free cash flow beginning in fiscal 2011."

Fourth Quarter Business Highlights


  • Total contract value at the end of fiscal 2010 was approximately $1.2 billion, an increase of approximately 17% compared to the end of fiscal 2009. Approximately 10 percentage points of the growth in total contract value during fiscal 2010 was driven by increased license fees, with approximately 7 percentage points of the year-over-year growth related to including maintenance with the company's new aspenONE licensing model, which was launched at the beginning of fiscal 2010.
  • Record product related bookings were approximately $138 million for the fourth quarter, leading to record full year product related bookings of approximately $366 million.
  • Billings backlog was $389 million at the end of the fourth quarter, an increase from $270 million at the end of last quarter and $101 million at the end of fiscal 2009.
  • The value of contractually committed, future cash collections associated with the company's subscription and multi-year term contracts was $625 million at the end of the fourth quarter, an increase from $537 million at the end of last quarter and $466 million at the end of fiscal 2009.
  • The company closed 20 product related bookings of over $1 million during the fourth quarter, and 50 product related bookings between $250,000 and $1 million.
  • Average deal size for product related bookings over $100,000 was $1.1 million in the fourth quarter.


Summary of Fourth Quarter Financial Results

AspenTech's total revenue of $38.2 million decreased from $71.3 million in the fourth 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 $5.9 million in the fourth quarter of fiscal 2010, an increase from $4.0 million last quarter. 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 $8.1 million in the fourth quarter of fiscal 2010, compared to $41.6 million in the year ago period. In fiscal year 2010, software revenue related to term contracts is generally recognized over the contract term as payments become due. In prior fiscal year periods, the company recognized term license revenue predominantly on an up-front basis, and the majority of license bookings were recognized as license revenue in the same period.
  • Services & other revenue, which includes professional services, maintenance and other revenue, was $24.2 million in the fourth quarter of fiscal 2010, a decrease compared to $29.6 million in the year ago period.


For the quarter ended June 30, 2010, AspenTech reported a loss from operations of $35.6 million due primarily to the ratable revenue recognition associated with the company's new aspenONE licensing model. For the quarter ended June 30, 2009, the company reported income from operations of $2.3 million. Net loss was $34.0 million for the fourth quarter of fiscal 2010, leading to net loss per basic and diluted share of $0.37, compared to net income per diluted share of $0.11 in the same period last year.

AspenTech had a cash balance of $124.9 million at June 30, 2010, an increase of $5.9 million from the end of the prior quarter. The company did not sell any installments receivable to raise cash during the fourth quarter of fiscal 2010 and it continued to reduce its secured borrowings balance, which was $76.1 million at the end of the quarter, down $11.3 million compared to $87.4 million at the end of the third quarter of fiscal 2010.

Conference Call and Webcast

AspenTech will host a conference call and webcast today, September 2, at 8:00 a.m. (Eastern Time), to discuss the company's financial results for the fourth quarter and fiscal year 2010 as well as the company's business outlook. The live dial-in number is (877) 245-0126, conference ID code 97523083. 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 97523083 through September 9, 2010.

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

© 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.

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. 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; 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; 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.

    Three Months Ended          
    June 30,     Year Ended June 30,
      2010       2009         2010       2009  
    (In thousands, except per share data)
Subscription   $ 5,873     $ -       $ 11,071     $ -  
Software     8,148       41,612         42,920       179,591  
Total subscription and software     14,021       41,612         53,991       179,591  
Services and other     24,223       29,643         112,353       131,989  
Total revenue     38,244       71,255         166,344       311,580  
Cost of revenue:                  
Subscription and software     1,550       3,822         6,437       12,409  
Services and other     15,948       16,272         59,673       63,411  
Total cost of revenues     17,498       20,094         66,110       75,820  
Gross profit     20,746       51,161         100,234       235,760  
Operating expenses:                  
Selling and marketing (1)     27,426       21,607         97,002       84,126  
Research and development (1)     12,100       11,471         48,228       46,375  
General and administrative (1)     15,956       15,333         63,246       58,256  
Restructuring charges     868       421         1,128       2,446  
Impairment of goodwill and intangible assets     -       -         -       623  
Total operating expenses     56,350       48,832         209,604       191,826  
(Loss) income from operations     (35,604 )     2,329         (109,370 )     43,934  
Interest income     4,208       5,652         19,324       22,698  
Interest expense     (1,730 )     (2,689 )       (8,455 )     (10,516 )
Other (expense) income, net     (2,310 )     2,145         (2,407 )     (1,824 )
(Loss) income before provision for taxes     (35,436 )     7,437         (100,908 )     54,292  
Provision for income taxes     1,464       2,777         (6,537 )     (1,368 )
Net (loss) income   $ (33,972 )   $ 10,214       $ (107,445 )   $ 52,924  
(Loss) earnings per common share:                  
Basic   $ (0.37 )   $ 0.11       $ (1.18 )   $ 0.59  
Diluted   $ (0.37 )   $ 0.11       $ (1.18 )   $ 0.57  
Weighted average shares outstanding:                  
Basic     92,222       90,087         91,247       90,053  
Diluted     92,222       92,384         91,247       92,578  
(1) Certain costs previously recorded as selling and marketing expense in fiscal 2009 have been reclassified to research and development expense and general and administrative expense.
    June 30,
    2010   2009
    (In Thousands, except per share data)
Current assets:        
Cash and cash equivalents   $ 124,945     $ 122,213  
Accounts receivable, net     31,738       49,882  
Current portion of installments receivable, net     51,729       64,531  
Current portion of collateralized receivables, net     25,675       38,695  
Unbilled services     1,860       298  
Prepaid expenses and other current assets     5,236       9,413  
Prepaid income taxes     7,468       13,159  
Deferred tax assets     1,632       3,795  
Total current assets     250,283       301,986  
Non-current installments receivable, net     76,869       113,390  
Non-current collateralized receivables, net     25,755       57,671  
Property, equipment and leasehold improvements, net     8,057       9,604  
Computer software development costs     2,367       3,918  
Goodwill     17,361       16,686  
Non-current deferred tax assets     11,597       10,788  
Other non-current assets     2,424       1,933  
Total assets   $ 394,713     $ 515,976  
Current liabilities:        
Current portion of secured borrowing   $ 30,424     $ 83,885  
Accounts payable     6,092       5,135  
Accrued expenses     49,890       47,882  
Income taxes payable     1,161       1,888  
Deferred revenue     67,852       62,801  
Current deferred tax liability     398       2,481  
Total current liabilities     155,817       204,072  
Long-term secured borrowing     45,711       28,211  
Deferred revenue     19,427       16,070  
Non-current deferred tax liability     956       2,354  
Other non-current liabilities     31,832       35,859  
Commitments and contingencies:        
Series D redeemable convertible preferred stock, $0.10 par value--        
Authorized-- 3,636 shares in 2010 and 2009        
Issued and outstanding-- none in 2010 or 2009     -       -  
Stockholders' equity:        
Common stock, $0.10 par value-- Authorized--210,000,000 shares        
Issued-- 92,668,280 shares in 2010 and 90,326,513 shares in 2009        
Outstanding-- 92,434,816 shares in 2010 and 90,093,049 shares in 2009     9,267       9,033  
Additional paid-in capital     515,729       497,478  
Accumulated deficit     (391,038 )     (283,593 )
Accumulated other comprehensive income     7,525       7,005  
Treasury stock, at cost--233,464 shares of common stock in 2010 and 2009     (513 )     (513 )
Total stockholders' equity     140,970       229,410  
Total liabilities and stockholders' equity   $ 394,713     $ 515,976  

SOURCE: Aspen Technology, Inc.

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