Aspen Technology Announces Financial Results for the Second Quarter Fiscal 2011
BURLINGTON, Mass., Feb 08, 2011 (BUSINESS WIRE) -- Aspen Technology, Inc. (NASDAQ: AZPN), a leading provider of software and services to the process industries, today announced financial results for its second quarter of fiscal 2011, ended December 31, 2010.
Mark Fusco, Chief Executive Officer of AspenTech, said, "The company's solid performance was well-balanced across our key verticals, products and geographies during the second quarter. The license portion of AspenTech's total contract value grew by approximately 3.5% sequentially, leading to year-to-date growth of over 5.0% from the end of fiscal 2010. We are currently ahead of last year's pace of growth and believe that AspenTech is well positioned to achieve our full year goal of upper single digit to double digit growth for the full year. We believe the growth of the license portion of our total contract value is the most meaningful metric for analyzing AspenTech's underlying growth during our multi-year revenue model transition."
"The company continues to execute well with respect to expense controls and working capital management, which is contributing to a positive impact on our cash flow. Another strong performance in the second quarter contributed to the generation of approximately $19 million in free cash flow during the first six months of fiscal 2011, a significant increase from approximately $3 million in the comparable period last fiscal year. We believe that AspenTech remains well positioned to deliver against our longer-term goal of free cash flow in the mid-$90 million range during fiscal 2013," Fusco concluded.
Second Quarter Business Highlights
- Total contract value, including the value of bundled maintenance, grew approximately 4.5% sequentially during the second quarter, while the license portion of total contract value grew approximately 3.5% sequentially.
- Bookings were approximately $86 million for the second quarter, leading to bookings of approximately $160 million for the first half of fiscal 2011. Within bookings, new and expanded adoption drove the above mentioned sequential increase in the license portion of total contract value, and solid renewal activity contributed the remainder of total bookings.
- The value of future cash collections associated with the company's subscription and multi-year term contracts was $688 million at the end of the second quarter, an increase from $653 million at the end of last quarter and $511 million at the end of the second quarter of fiscal 2010.
- The company closed 24 bookings of over $1 million during the second quarter, compared to 18 in the second quarter of fiscal 2010, and 54 bookings between $250,000 and $1 million, compared to 57 in the second quarter of fiscal 2010.
- Average deal size for bookings over $100,000 was approximately $653,000 in the second quarter, compared to approximately $778,000 in the second quarter of fiscal 2010.
Summary of Second Quarter Financial Results
AspenTech's total revenue of $49.8 million increased 17% from $42.7 million in the second quarter of the prior year.
- Subscription revenue includes all revenue associated with the company's aspenONE subscription offering. Subscription revenue was $11.8 million in the second quarter of fiscal 2011, an increase from $1.2 million in the second 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 $13.5 million in the second quarter of fiscal 2011, compared to $9.0 million in the year ago period.
- Services & other revenue, which includes professional services, maintenance and other revenue, was $24.5 million in the second quarter of fiscal 2011, compared to $32.5 million in the year ago period.
For the quarter ended December 31, 2010, AspenTech reported a loss from operations of $9.3 million due primarily to the ratable revenue recognition associated with the company's aspenONE subscription offering. For the quarter ended December 31, 2009, the company reported a loss from operations of $29.3 million.
Net loss was $10.3 million for the quarter ended December 31, 2010, leading to net loss per basic and diluted share of $0.11, compared to net loss per diluted share of $0.34 in the same period last fiscal year.
Non-GAAP loss from operations, which adds back stock-based compensation expense and restructuring charges, was $6.9 million for the second quarter of fiscal 2011, compared to a non-GAAP loss from operations of $19.7 million in the same period last fiscal year. Non-GAAP net loss was $8.0 million, or ($0.09) per share, for the second quarter of fiscal 2011, compared to a non-GAAP net loss of $21.4 million, or ($0.24) per share, in the same period last fiscal year. A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release.
AspenTech had a cash balance of $131.6 million at December 31, 2010, an increase of $8.5 million from the end of the prior quarter. The company generated $14.8 million in cash flows from operations and invested $1.5 million in capital expenditures, leading to free cash flow of $13.3 million for the three months ended December 31, 2010. The company continued to reduce its secured borrowings balance, which was $66.8 million at the end of the second quarter, down $4.4 million compared to $71.2 million at the end of the first quarter of fiscal 2011.
Conference Call and Webcast
AspenTech will host a conference call and webcast today, February 8, 2011, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the second quarter fiscal year 2011 as well as the company's business outlook. The live dial-in number is (877) 245-0126, conference ID code 37267908. 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 37267908 through February 15, 2011.
About AspenTech
AspenTech is a leading global provider of mission-critical process optimization software solutions, which are designed to manage and optimize plant and process design, operational performance, and supply chain planning. Our aspenONE(R) software and related services have been developed specifically for companies in the process industries, including energy, chemicals, pharmaceuticals, and engineering and construction. Customers use our solutions to improve their competitiveness and profitability by increasing throughput and productivity, reducing operating costs, enhancing capital efficiency, and decreasing working capital requirements. To see how the world's leading process manufacturers rely on AspenTech to achieve their operational excellence goals, visit http://www.aspentech.com.
© 2011 Aspen Technology, Inc. AspenTech, aspenONE, the Aspen leaf logo, OPTIMIZE, 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
The second and third paragraphs of this press release 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: customers' failure to adopt the aspenONE subscription offering at the rate expected by AspenTech; AspenTech's failure to realize the anticipated financial (including cash flow) and operational benefits of the aspenONE subscription offering; 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.
| ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited and in thousands, except share data) | ||||||||
| December 31, | June 30, | |||||||
| 2010 | 2010 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 131,642 | $ | 124,945 | ||||
| Accounts receivable, net | 28,708 | 31,738 | ||||||
| Current portion of installments receivable, net | 45,292 | 51,729 | ||||||
| Current portion of collateralized receivables | 19,584 | 25,675 | ||||||
| Unbilled services | 1,225 | 1,860 | ||||||
| Prepaid expenses and other current assets | 6,072 | 5,236 | ||||||
| Prepaid income taxes | 332 | 7,468 | ||||||
| Deferred tax assets | 1,681 | 1,632 | ||||||
| Total current assets | 234,536 | 250,283 | ||||||
| Non-current installments receivable, net | 65,636 | 76,869 | ||||||
| Non-current collateralized receivables | 22,053 | 25,755 | ||||||
| Property, equipment and leasehold improvements, net | 7,693 | 8,057 | ||||||
| Computer software development costs, net | 2,028 | 2,367 | ||||||
| Goodwill | 18,161 | 17,361 | ||||||
| Non-current deferred tax assets | 11,746 | 11,597 | ||||||
| Other non-current assets | 2,786 | 2,424 | ||||||
| Total assets | $ | 364,639 | $ | 394,713 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of secured borrowing | $ | 23,817 | $ | 30,424 | ||||
| Accounts payable | 6,259 | 6,092 | ||||||
| Accrued expenses and other current liabilities | 32,275 | 49,890 | ||||||
| Income taxes payable | 2,005 | 1,161 | ||||||
| Deferred revenue | 71,775 | 67,852 | ||||||
| Current deferred tax liability | 434 | 398 | ||||||
| Total current liabilities | 136,565 | 155,817 | ||||||
| Long-term secured borrowing | 42,946 | 45,711 | ||||||
| Long-term deferred revenue | 30,684 | 19,427 | ||||||
| Non-current deferred tax liability | 953 | 956 | ||||||
| Other non-current liabilities | 31,315 | 31,832 | ||||||
| Commitments and contingencies | ||||||||
| Series D redeemable convertible preferred stock, $0.10 par value-- | ||||||||
| Authorized-- 3,636 shares at December 31, 2010 and June 30, 2010 | ||||||||
| Issued and outstanding-- none at December 31, 2010 and June 30, 2010 | ||||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.10 par value-- Authorized--210,000,000 shares | ||||||||
| Issued-- 93,784,765 shares at December 31, 2010 and 92,668,280 shares at June 30, 2010 | ||||||||
| Outstanding-- 93,455,071 shares at December 31, 2010 and 92,434,816 shares at June 30, 2010 | 9,378 | 9,267 | ||||||
| Additional paid-in capital | 523,082 | 515,729 | ||||||
| Accumulated deficit | (416,775 | ) | (391,038 | ) | ||||
| Accumulated other comprehensive income | 8,246 | 7,525 | ||||||
| Treasury stock, at cost-- 329,694 shares of common stock at December 31, 2010 and 233,464 at June 30, 2010 | (1,755 | ) | (513 | ) | ||||
| Total stockholders' equity | 122,176 | 140,970 | ||||||
| Total liabilities and stockholders' equity | $ | 364,639 | $ | 394,713 | ||||
| ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Unaudited and in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenue: | ||||||||||||||||
| Subscription | $ | 11,847 | $ | 1,214 | $ | 21,503 | $ | 1,239 | ||||||||
| Software | 13,486 | 8,976 | 22,797 | 20,058 | ||||||||||||
| Total subscription and software | 25,333 | 10,190 | 44,300 | 21,297 | ||||||||||||
| Services and other | 24,475 | 32,496 | 48,608 | 61,185 | ||||||||||||
| Total revenue | 49,808 | 42,686 | 92,908 | 82,482 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Subscription and software | 1,972 | 1,677 | 4,094 | 3,450 | ||||||||||||
| Services and other | 11,583 | 14,792 | 22,709 | 30,488 | ||||||||||||
| Total cost of revenue | 13,555 | 16,469 | 26,803 | 33,938 | ||||||||||||
| Gross profit | 36,253 | 26,217 | 66,105 | 48,544 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and marketing | 19,954 | 23,757 | 40,305 | 44,309 | ||||||||||||
| Research and development | 12,096 | 12,515 | 24,671 | 23,409 | ||||||||||||
| General and administrative | 13,425 | 19,228 | 29,982 | 34,642 | ||||||||||||
| Restructuring charges | 78 | 32 | 155 | 303 | ||||||||||||
| Total operating expenses | 45,553 | 55,532 | 95,113 | 102,663 | ||||||||||||
| Loss from operations | (9,300 | ) | (29,315 | ) | (29,008 | ) | (54,119 | ) | ||||||||
| Interest income | 3,534 | 5,083 | 7,236 | 10,532 | ||||||||||||
| Interest expense | (1,653 | ) | (2,480 | ) | (2,897 | ) | (4,891 | ) | ||||||||
| Other income, net | (735 | ) | (222 | ) | 1,929 | 2,047 | ||||||||||
| Loss before income taxes | (8,154 | ) | (26,934 | ) | (22,740 | ) | (46,431 | ) | ||||||||
| Provision for income taxes | 2,115 | 3,723 | 2,997 | 5,288 | ||||||||||||
| Net loss | $ | (10,269 | ) | $ | (30,657 | ) | $ | (25,737 | ) | $ | (51,719 | ) | ||||
| Loss per common share: | ||||||||||||||||
| Basic | $ | (0.11 | ) | $ | (0.34 | ) | $ | (0.28 | ) | $ | (0.57 | ) | ||||
| Diluted | $ | (0.11 | ) | $ | (0.34 | ) | $ | (0.28 | ) | $ | (0.57 | ) | ||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 93,252 | 91,002 | 92,968 | 90,538 | ||||||||||||
| Diluted | 93,252 | 91,002 | 92,968 | 90,538 | ||||||||||||
| ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (Unaudited and in thousands) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net loss | $ | (10,269 | ) | $ | (30,657 | ) | $ | (25,737 | ) | $ | (51,719 | ) | |||||
| Adjustments to reconcile net loss to net cash provided by
operating activities: |
|||||||||||||||||
| Depreciation and amortization | 1,239 | 1,755 | 2,600 | 3,729 | |||||||||||||
| Net foreign currency (gain) loss | 531 | (147 | ) | (1,648 | ) | (126 | ) | ||||||||||
| Stock-based compensation | 2,345 | 9,625 | 5,042 | 11,532 | |||||||||||||
| Loss on the disposal of assets | 415 | 4 | 415 | 43 | |||||||||||||
| Deferred income taxes | 28 | (25 | ) | 74 | 41 | ||||||||||||
| Provision for bad debts | (620 | ) | (293 | ) | 97 | (75 | ) | ||||||||||
| Changes in assets and liabilities: | |||||||||||||||||
| Accounts receivable | (2,232 | ) | 1,241 | 3,009 | 14,467 | ||||||||||||
| Unbilled services | 917 | 974 | 630 | (1,565 | ) | ||||||||||||
| Prepaid expenses, other assets and prepaid income taxes | 1,354 | 2,463 | 6,145 | 2,963 | |||||||||||||
| Installments and collateralized receivables | 18,238 | 24,925 | 30,139 | 38,202 | |||||||||||||
| Income taxes payable | 500 | 2,253 | 708 | 1,437 | |||||||||||||
| Accounts payable, accrued expenses and other liabilities | 1,342 | 636 | (15,304 | ) | (8,421 | ) | |||||||||||
| Deferred revenue | 1,037 | (2,835 | ) | 15,043 | (5,862 | ) | |||||||||||
| Net cash provided by operating activities | 14,825 | 9,919 | 21,213 | 4,646 | |||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Purchase of property, equipment and leasehold improvements | (1,288 | ) | (719 | ) | (1,876 | ) | (1,592 | ) | |||||||||
| Capitalized computer software development costs | (204 | ) | 5 | (380 | ) | (265 | ) | ||||||||||
| Net cash used in investing activities | (1,492 | ) | (714 | ) | (2,256 | ) | (1,857 | ) | |||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Exercise of stock options | 3,283 | 3,652 | 3,420 | 3,652 | |||||||||||||
| Proceeds from secured borrowings | 576 | - | 2,500 | - | |||||||||||||
| Repayment of secured borrowings | (6,900 | ) | (10,459 | ) | (16,241 | ) | (16,365 | ) | |||||||||
| Repurchases of common stock | (1,242 | ) | - | (1,242 | ) | - | |||||||||||
| Payment of tax withholding obligations related to restricted stock | (202 | ) | (2,601 | ) | (998 | ) | (2,694 | ) | |||||||||
| Net cash used in financing activities | (4,485 | ) | (9,408 | ) | (12,561 | ) | (15,407 | ) | |||||||||
| Effects of exchange rate changes on cash and cash equivalents | (367 | ) | 675 | 301 | (158 | ) | |||||||||||
| Increase (decrease) in cash and cash equivalents | 8,481 | 472 | 6,697 | (12,776 | ) | ||||||||||||
| Cash and cash equivalents, beginning of period | 123,161 | 108,965 | 124,945 | 122,213 | |||||||||||||
| Cash and cash equivalents, end of period | $ | 131,642 | $ | 109,437 | $ | 131,642 | $ | 109,437 | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||||||||
| Interest paid | $ | 1,490 | $ | 2,479 | $ | 3,071 | $ | 4,894 | |||||||||
| Income tax (refund) paid, net | 1,535 | 1,651 | (4,961 | ) | 4,629 | ||||||||||||
| ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES | ||||||||||||||||
| GAAP Results Reconciled to Non-GAAP Results | ||||||||||||||||
| The following table reflects selected Aspen Technology GAAP results reconciled to non-GAAP results.
(Unaudited and in thousands) |
||||||||||||||||
| Three Months Ended
December 31, |
Six Months Ended
December 31, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
|
Total expenses |
||||||||||||||||
| GAAP total expenses (a) | $ | 59,108 | $ | 72,001 | $ | 121,916 | $ | 136,601 | ||||||||
| Less: | ||||||||||||||||
| Stock-based compensation (b) | (2,345 | ) | (9,625 | ) | (5,042 | ) | (11,532 | ) | ||||||||
| Restructuring charges | (78 | ) | (32 | ) | (155 | ) | (303 | ) | ||||||||
| Non-GAAP total expenses | $ | 56,685 | $ | 62,344 | $ | 116,719 | $ | 124,766 | ||||||||
|
Loss from operations |
||||||||||||||||
| GAAP loss from operations | $ | (9,300 | ) | $ | (29,315 | ) | $ | (29,008 | ) | $ | (54,119 | ) | ||||
| Plus: | ||||||||||||||||
| Stock-based compensation (b) | 2,345 | 9,625 | 5,042 | 11,532 | ||||||||||||
| Restructuring charges | 78 | 32 | 155 | 303 | ||||||||||||
| Non-GAAP loss from operations | $ | (6,877 | ) | $ | (19,658 | ) | $ | (23,811 | ) | $ | (42,284 | ) | ||||
|
Net loss |
||||||||||||||||
| GAAP net loss | $ | (10,269 | ) | $ | (30,657 | ) | $ | (25,737 | ) | $ | (51,719 | ) | ||||
| Plus: | ||||||||||||||||
| Stock-based compensation (b) | 2,345 | 9,625 | 5,042 | 11,532 | ||||||||||||
| Restructuring charges | 78 | 32 | 155 | 303 | ||||||||||||
| Less: | ||||||||||||||||
| Income tax effect on Non-GAAP items | (118 | ) | (439 | ) | (208 | ) | (541 | ) | ||||||||
| Non-GAAP net loss | $ | (7,964 | ) | $ | (21,439 | ) | $ | (20,748 | ) | $ | (40,425 | ) | ||||
|
Diluted loss per share |
||||||||||||||||
| GAAP diluted loss per share | $ | (0.11 | ) | $ | (0.34 | ) | $ | (0.28 | ) | $ | (0.57 | ) | ||||
| Plus: | ||||||||||||||||
| Stock-based compensation (b) | 0.03 | 0.11 | 0.05 | 0.13 | ||||||||||||
| Restructuring charges | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| Less: | ||||||||||||||||
| Income tax effect on Non-GAAP items | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.01 | ) | ||||||||
| Non-GAAP diluted loss per share | $ | (0.09 | ) | $ | (0.24 | ) | $ | (0.22 | ) | $ | (0.45 | ) | ||||
| Shares used in computing diluted loss per share | 93,252 | 91,002 | 92,968 | 90,538 | ||||||||||||
| (a) GAAP total expenses | ||||||||||||||||
|
Three Months Ended |
Six Months Ended, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Total costs of revenue | $ | 13,555 | $ | 16,469 | $ | 26,803 | $ | 33,938 | ||||||||
| Total operating expenses | 45,553 | 55,532 | 95,113 | 102,663 | ||||||||||||
| GAAP total expenses | $ | 59,108 | $ | 72,001 | $ | 121,916 | $ | 136,601 | ||||||||
| (b) Stock-based compensation expense was as follows: | ||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Cost of service and other | $ | 233 | $ | 734 | $ | 486 | $ | 957 | ||||||||
| Selling and marketing | 907 | 3,559 | 1,803 | 4,329 | ||||||||||||
| Research and development | 287 | 1,250 | 576 | 1,391 | ||||||||||||
| General and administrative | 918 | 4,082 | 2,177 | 4,855 | ||||||||||||
| Total stock-based compensation | $ | 2,345 | $ | 9,625 | $ | 5,042 | $ | 11,532 | ||||||||
SOURCE: Aspen Technology, Inc.
Media Contact
AspenTech
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or
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