Aspen Technology's GAAP Loss of $0.05 Narrows in Fiscal Third Quarter.Business Editors/High-Tech Writers CAMBRIDGE, Mass.--(BUSINESS WIRE)--April 29, 2003 Pro Forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per share triples sequentially to $0.06, excluding one-time charges Aspen Technology Aspen Technology (NASDAQ: AZPN) provides software and professional services to the manufacturing and process industries which allows companies to model, manage, and control their operations. AspenTech was founded in 1981 by MIT professor Dr. , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AZPN) today reported financial results for its fiscal 2003 third quarter and the nine months ending March 31, 2003. Total revenues for the third quarter were $79.7 million, with license revenues totaling $34.9 million, and services revenue of $44.8 million. On a Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis, AspenTech reported a net loss to common shareholders of $2.0 million, or $0.05 per share, significantly better than the loss of $136.9 million in the second quarter of fiscal 2003, which reflected a $135.2 million restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other charge related to goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. , asset write-downs, headcount reductions, and related facilities consolidation. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, AspenTech posted net income of $2.4 million, or $0.06 per share, a substantial improvement over pro forma net income of $643,000, or $0.02 in the second quarter of fiscal 2003. Pro forma results in both periods exclude $2.3 million of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividend and discount accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the . In addition, pro forma net income excludes restructuring and other charges, which in the third quarter totaled $2.1 million for anticipated professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. fees related to the previously announced Federal Trade Commission investigation. "I am pleased to have met our financial objectives again this quarter, particularly in a difficult macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. environment," said David McQuillin, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of AspenTech. "We hit our license revenue target, further reduced our operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , and significantly improved pro forma profitability. This sequential improvement is solid evidence that the actions we took last autumn to streamline both our organization and our product focus are having a positive effect on our execution, which is enabling us to operate profitably. "In terms of the key operational highlights, the geographic composition of our license revenue was well-balanced and our Engineering product line exceeded its objectives. We continue to see steady demand for our Manufacturing/Supply Chain solutions, although primarily for individual Foundation technologies. From an end-user perspective, the petroleum refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar and oil and gas sectors were again important contributors in the third quarter, as integrated refiners sought to optimize their asset productivity and upstream divisions launched large engineering projects. Major customers continue to express their confidence in our solutions for Enterprise Operations Management Operations management is an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. , which provide proven, rapid, and substantial returns on investment, enabling customers to consistently improve their profitability." During the third fiscal quarter, AspenTech signed significant license transactions with Air Liquide
The company will be holding a conference call and webcast to discuss its financial results, business outlook, and related corporate and financial matters at 4:45 p.m. eastern time on Tuesday, April 29, 2003. Interested parties may listen to a live webcast of the call by logging on to AspenTech's website: http://www.aspentech.com and clicking on the "Webcast" link under the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the site. A replay of the call will be archived on AspenTech's website for the next twelve months and will also be available for forty-eight hours via telephone, beginning at 8:00 p.m. eastern time on April 29, 2003, by dialing 719-457-0820 and entering in confirmation code: 146166. Pro Forma Results AspenTech reports pro forma financial results, which exclude certain non-operational, non-cash and other specified charges that management generally does not consider in evaluating the Company's ongoing operations. These results are provided as a complement to results provided in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (known as "GAAP"). Management believes this pro forma measure helps indicate underlying trends in the Company's business, and uses this pro forma measure to establish budgets and operational goals that are communicated internally and externally, to manage the Company's business and to evaluate its performance. A reconciliation of pro forma to GAAP is included in the attached condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . About AspenTech Aspen Technology, Inc. is a leading supplier of enterprise software to the process industries, enabling its customers to increase their margins and optimize their business performance. AspenTech's engineering solutions, including Hyprotech's technologies, help companies design and improve their plants and processes, maximizing returns throughout their operational life. AspenTech's manufacturing/supply chain solutions allow companies to run their plants and supply chains more profitably, from customer demand through to the delivery of the finished products. Over 1,200 leading companies rely on AspenTech's software every day to drive improvements across their most important engineering and operational processes. AspenTech's customers include: Air Liquide, AstraZeneca, Bayer, BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida , BP, ChevronTexaco, Dow Chemical, DuPont, ExxonMobil, GlaxoSmithKline, Lyondell Equistar, Merck, Mitsubishi Chemical, Shell, Southern Company, TXU TXU Texas Utilities (Electric and Gas Company) TXU Transmitter Unit Energy and Unilever. For more information, visit www.aspentech.com. The fifth paragraph of this press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. For this purpose, any statement using the term "will," "should," "could," "anticipates," "believes" or a comparable term is a forward-looking statement. Actual results may vary significantly from AspenTech's expectations based on a number of risks and uncertainties, including: AspenTech's lengthy sales cycle which makes it difficult to predict quarterly operating results; the FTC's investigation of AspenTech's acquisition of Hyprotech; fluctuations in AspenTech's quarterly operating results; AspenTech's dependence on customers in the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. chemicals, petrochemicals and petroleum industries; AspenTech's ability to raise additional capital as required; AspenTech's ability to integrate the operations of acquired companies; intense competition; AspenTech's need to develop and market products successfully; reliance on relationships with strategic partners; and other risk factors described from time to time in AspenTech's periodic reports and registration statements filed with the Securities and Exchange Commission. AspenTech cannot guarantee any future results, levels of activity, performance, or achievements. Moreover, neither AspenTech nor anyone else assumes responsibility for the accuracy and completeness of any forward-looking statements. AspenTech undertakes no obligation to update any of the forward-looking statements after the date of this press release. AspenTech, Aspen aspen, in botany aspen: see willow. Aspen, city, United States Aspen (ăs`pən), city (1990 pop. 5,049), alt. 7,850 ft (2,390 m), seat of Pitkin co., S central Colo. ProfitAdvantage, Plantelligence, and the Aspen logo are trademarks of Aspen Technology, Inc., Cambridge, Mass.
ASPEN TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
2003 2002 2003 2002
REVENUES:
Software licenses $34,883 $37,380 $101,310 $96,550
Services 44,846 46,086 138,642 140,102
Total revenues 79,729 83,466 239,952 236,652
EXPENSES:
Cost of software
licenses 2,891 3,165 9,737 8,663
Cost of services 25,745 29,969 80,576 90,372
Selling and marketing 24,455 29,521 80,640 84,597
Research and development 15,727 19,585 49,469 55,413
General and
administrative 8,893 8,678 27,637 23,620
Restructuring and other
charges 2,100 (500) 137,344 2,142
Total costs and expenses 79,811 90,418 385,403 264,807
Income (loss) from
operations (82) (6,952) (145,451) (28,155)
Other income (expense),
net 64 (152) (750) (505)
Interest income, net 349 103 1,198 999
Income (loss) before
provision for (benefit
from) income taxes 331 (7,001) (145,003) (27,661)
Provision for (benefit
from) income taxes - (2,100) - (8,299)
Net income (loss) 331 (4,901) (145,003) (19,362)
Accretion of preferred
stock discount and
dividend (2,291) (4,140) (6,812) (4,140)
Net income (loss)
applicable to common
stockholders $(1,960) $(9,041) $(151,815) $(23,502)
Basic and diluted net
income (loss) per share
applicable to common
stockholders $(0.05) $(0.28) $(3.96) $(0.74)
Weighted average shares
outstanding - basic and
diluted 38,795 31,948 38,295 31,768
Pro Forma before Restructuring and other charges, and Preferred stock
discount and dividend accretion:
Net income (loss) $2,431 $(5,251) $(7,659) $(17,863)
Diluted earnings (loss)
per share $0.06 $(0.16) $(0.20) $(0.56)
Weighted average shares
outstanding - diluted 40,938 31,948 38,295 31,768
Supplemental information - Reconciliation of net income (loss) to pro
forma net income (loss)
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
2003 2002 2003 2002
Net income (loss) $(1,960) $(9,041) $(151,815) $(23,502)
Adjustments to net
loss:
Restructuring and
other charges, net
of tax effect 2,100 (350) 137,344 1,499
Preferred stock
discount and
dividend accretion 2,291 4,140 6,812 4,140
Pro forma net
income (loss) $2,431 $(5,251) $(7,659) $(17,863)
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands)
March 31, June 30,
2003 2002
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $53,414 $52,120
Accounts receivable and unbilled services, net 96,535 125,987
Current portion of long-term installments
receivable, net 29,114 40,404
Deferred tax asset 2,929 2,929
Prepaid expenses and other current assets 14,494 18,699
Total current assets 196,486 240,139
Long-term installments receivable, net 68,829 68,318
Equipment and leasehold improvements, net 35,522 50,803
Computer software development costs, net 15,885 13,810
Intangible assets, net 43,481 125,363
Purchased intellectual property, net 2,002 27,626
Deferred tax asset 15,576 15,576
Other assets 5,867 6,708
Total assets $383,648 $548,343
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $4,954 $5,334
Amount owed to Accenture 5,333 11,100
Accounts payable and accrued expenses 75,619 94,987
Unearned revenue 18,429 20,983
Deferred revenue 38,887 38,624
Total current liabilities 143,222 171,028
Long-term debt, less current maturities 90,334 92,135
Obligation subject to common stock settlement 5,006 1,810
Deferred revenue, less current portion 12,426 9,548
Deferred tax liability 14,496 15,003
Other liabilities 3,086 5,031
Total stockholders' equity 115,078 253,788
Total liabilities and stockholders' equity $383,648 $548,343
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