Aspen Technology Announces Financial Results for First-Quarter 2006.CAMBRIDGE Cambridge, city, Canada Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent. , Mass. -- 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: AZPN), a leading provider of software and services to the process industries, today announced its financial results for its fiscal 2006 first quarter, ended September September: see month. 30, 2005. For the quarter ended September 30, 2005, AspenTech reported total revenue of $60.1 million. Within total revenue, software license revenue was $24.4 million and services revenue was $35.7 million. For the quarter ended September 30, 2005, AspenTech's loss from operations and net loss applicable to common shareholders, determined 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 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). ), was ($4.0) million and ($8.9) million, respectively. This compares to a GAAP loss from operations of ($30.7) million and net loss applicable to common shareholders of ($33.6) million in the same period last year. GAAP loss per share applicable to common shareholders was ($0.21) for the quarter ended September 30, 2005, compared with a loss of ($0.80) in the same period last year. For the quarter ended September 30, 2005, 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 income from operations and net income, which exclude items covered in the attached non-GAAP reconciliation table, were $2.6 million and $1.5 million, respectively. This represented an improvement when compared with pro forma losses of ($4.3) million and ($3.7) million in the same period last year, respectively. 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 were $0.02 for the quarter ended September 30, 2005, compared to a pro forma loss per share of ($0.04) in the prior year period. A reconciliation of GAAP to pro forma results has been provided in the financial statement tables included in the press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures." Mark Fusco Mark Fusco (born March 12, 1961 in Burlington, Massachusetts) is a retired ice hockey player. Fusco won the Hobey Baker Award in 1983. He would also be a member of the American 1984 Winter Olympics ice hockey team. , 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, stated "We were pleased that our efforts to improve the operational efficiency of the Company enabled us to deliver profitability, on a pro-forma basis. In the past three quarters, we have improved our services margins, eliminated our convertible debt, and created an infrastructure that we believe can deliver improved performance over the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. ." Fusco added, "Our total revenue was flat compared to the prior year, excluding the operator training services business we divested as part of the FTC FTC See Federal Trade Commission (FTC). settlement. With our infrastructure priorities addressed, management's focus is squarely square·ly adv. 1. Mathematics At right angles: sawed the beam squarely. 2. In a square shape. 3. on restoring top line growth during FY06 and beyond." Other Quarterly Highlights: --Services gross margins increased by 9% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen to 52%, the highest quarterly services margin since the Company went public in Fiscal 1995. This was the result of improved services revenue and utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be , combined with a lower cost base. --Pro forma forma, adj/n minor elements between the members of a botanical species. total costs and expenses came in at $57.4 million in the quarter, a reduction of 19% on a sequential One after the other in some consecutive order such as by name or number. basis and 15% on a year-over-year basis. --The energy industry represented the highest percentage of the Company's revenue, while the chemicals industry also made a solid contribution, delivering seven of the top ten deals closed during the quarter. Conference Call and Webcast AspenTech will host a conference call and webcast today, November November: see month. 8, 2005, at 4:45 pm (EST EST electroshock therapy. EST abbr. electroshock therapy ) to discuss the Company's financial results, business outlook, and related corporate and financial matters. The live dial in number is: 877-239-3024. Interested parties may also 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 and will also be available via telephone at: 800-642-1687, confirmation code 1991434 for four days, beginning at 8:00 pm EST on November 8, 2005. Non-GAAP Results AspenTech reports non-GAAP financial results, which exclude certain non-operational, non-cash and other specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. 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 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 non-GAAP financial results, to GAAP financial results, 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. provides industry-leading software and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. that help process companies improve efficiency and profitability by enabling them to model, manage and control their operations. The new generation of integrated aspenONE(TM) solutions are aligned with the key industry business processes, providing manufacturers the capabilities they need to optimize optimize - optimisation operational performance, make real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. decisions and synchronize See synchronization. the plant and supply chain. Over 1,500 leading companies already rely on AspenTech's software, including Bayer, BASD BASD Bethlehem Area School District (Pennsylvania) BASD Business Action for Sustainable Development BASD Basic Active Service Date BASD Bellefonte Area School District (Bellefonte, Pennsylvania) , BP, Chevron Corporation “CVX” redirects here. For the United States Navy future aircraft carrier program, see United States Navy CVN-21 program. Chevron Corporation (NYSE: CVX) is one of the world's largest global energy companies. , DuPont Dupont, DuPont, Du Pont, or du Pont may refer to: Companies
This press release may include certain "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. Actual results may vary significantly from AspenTech's expectations based on a number of risks and uncertainties, including, without limitation: AspenTech's plan to improve operational performance may not be implemented effectively; AspenTech has identified material weaknesses in its internal controls with respect to software license revenue recognition and other matters, that, if not remedied effectively, could result in material misstatements; risks around securities litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and investigations; AspenTech's lengthy sales cycle makes it difficult to predict quarterly operating results; 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; the possibility of new accounting standards or the interpretation of existing accounting standards affecting our financial results; AspenTech's ability to raise additional capital as required; intense competition; AspenTech's need to develop and market products successfully; reliance on relationships with strategic partners; challenges associated with international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. ; 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. AspenTech, aspenONE, and the 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. leaf logo are trademarks of Aspen Technology, Inc., Cambridge, Mass.
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended
September 30, September 30,
2005 2004
-------------- -------------
(Unaudited)
REVENUES:
Software licenses $24,317 $ 25,273
Service and other 35,736 37,997
--------- ---------
Total revenues 60,053 63,270
--------- ---------
COST OF REVENUES:
Cost of software licenses 3,782 3,941
Cost of service and other 17,244 22,108
Amortization of technology related
intangible assets 1,782 1,774
--------- ---------
Total cost of revenues 22,808 27,823
--------- ---------
Gross profit 37,245 35,447
OPERATING COSTS:
Selling and marketing (includes a
reversal of a sales tax exposure accrual
of $700 in the three months ended
September 30, 2005) (1) 18,647 22,375
Research and development 10,134 12,183
General and administrative (includes
litigation costs of $1,900 and $3,465
for the three months ended September 30,
2005 and 2004, respectively) (1) 10,185 10,427
Restructuring charges and FTC legal
costs 2,199 21,508
Loss (gain) on sales and disposals of
assets 61 (362)
--------- ---------
Total operating costs 41,226 66,131
--------- ---------
Income (loss) from operations (3,981) (30,684)
Other income (expense), net (663) (393)
Interest income (expense), net 151 654
--------- ---------
Income (loss) before provision for
income taxes (4,493) (30,423)
Income tax (provision) benefit (640) 340
--------- ---------
Net income (loss) (5,133) (30,083)
Accretion of preferred stock discount
and dividend (3,778) (3,528)
--------- ---------
Net income (loss) applicable to common
shareholders $(8,911) $(33,611)
========= =========
EARNINGS PER SHARE:
Net income (loss) per share applicable
to common shareholders -
Basic and Diluted $ (0.21) $ (0.80)
========= =========
Weighted average shares outstanding -
Basic and Diluted 43,237 41,796
========= =========
PRO FORMA (NON-GAAP) EARNINGS PER SHARE:
Pro forma (non-GAAP) net income excludes Accretion of preferred
stock discount and dividend, Amortization of technology related
intangible assets, Stock-based compensation costs, Litigation
costs, Restructuring charges and FTC legal costs, and Gain on sale
of the AXSYS product line. Pro forma (non-GAAP) weighted average
shares outstanding assumes the conversion of the Series D
preferred stock to common stock.
Net income (loss) $ 1,489 $ (3,670)
========= =========
Diluted net income (loss) per share $ 0.02 $ (0.04)
========= =========
Weighted average shares outstanding -
diluted 87,550 86,590
========= =========
(1) This parenthetical reference will not be presented in our Form
10-Q.
Supplemental information -
Three Months Ended
September 30, September 30,
2005 2004
------------- -------------
(Unaudited)
Stock-based compensation costs included in the Statement of Operations
Effective July 1, 2005, AspenTech adopted SFAS 123R, "Share-Based
Payment," and uses the modified prospective method to value its
share-based payments. Accordingly, for the three months ended
September 30, 2005, stock-based compensation was accounted for
under SFAS 123R while for the three months ended September 30,
2004, stock-based compensation was accounted for under APB 25,
"Accounting for Stock Issued to Employees," as permitted by SFAS
123. The amounts in the attached Statement of Operations include
stock-based compensation as follows:
Cost of service and other $ 230 $ -
Selling and marketing 408 -
Research and development 162 -
General and administrative 641 -
--------- ---------
Total stock-based compensation $ 1,441 $ -
========= =========
Reconciliation of total expenses to pro
forma (non-GAAP) total expenses
Total expenses (cost of revenues and
operating costs) $64,034 $ 93,954
Amortization of technology related
intangible assets (1,782) (1,774)
Stock-based compensation (1,441) -
Litigation costs, included in General
and Administrative costs (1,900) (3,465)
Sales-tax reserve accrual included in
Selling and Marketing costs 700 -
Restructuring charges and FTC legal
costs (2,199) (21,508)
Gain on sale of AXSYS product line,
included in loss (gain) on sales and
disposals of assets - 334
--------- ---------
Pro forma (non-GAAP) total expenses (cost
of revenues and operating costs) $57,412 $ 67,541
========= =========
Reconciliation of Income (loss) from
operations to pro forma (non-GAAP) Income
(loss) from operations
Income (loss) from operations $(3,981) $(30,684)
Adjustments to income (loss) from
operations
Net effect of adjustments to cost of
revenues and operating costs 6,622 26,413
--------- ---------
Pro forma (non-GAAP) Income (loss) from
operations $ 2,641 $ (4,271)
========= =========
Reconciliation of Net income (loss) to pro
forma (non-GAAP) Net income (loss)
Net income (loss) applicable to common
stockholders $(8,911) $(33,611)
Adjustments to net income (loss)
applicable to common stockholders
Net effect of adjustments to cost of
revenues and operating costs 6,622 26,413
Preferred stock discount and dividend
accretion 3,778 3,528
--------- ---------
Pro forma (non-GAAP) net income (loss) $ 1,489 $ (3,670)
========= =========
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
September 30, June 30,
2005 2005
------------- --------
ASSETS (Unaudited)
Current assets:
Cash, cash equivalents and short-term
investments $ 47,700 $ 68,149
Accounts receivable, net 45,139 52,254
Unbilled services 11,200 9,826
Current portion of long-term installments
receivable, net 5,903 5,355
Deferred tax asset 702 692
Prepaid expenses and other current assets 12,376 11,483
--------- ---------
Total current assets 123,020 147,759
--------- ---------
Long-term installments receivable, net 21,911 19,425
Retained interest in sold receivables 16,917 16,667
Equipment and leasehold improvements, net 9,829 11,388
Computer software development costs, net 17,307 17,411
Intangible assets, net 25,093 26,852
Purchased intellectual property, net 589 730
Deferred tax asset 1,392 1,354
Other assets 2,604 2,656
--------- ---------
Total assets $218,662 $244,242
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 775 $ 1,042
Accounts payable and accrued expenses 66,087 84,407
Unearned revenue 23,379 23,480
Deferred revenue 30,936 34,854
--------- ---------
Total current liabilities 121,177 143,783
--------- ---------
Long-term debt, less current maturities 287 338
Deferred revenue, less current portion 1,663 2,093
Deferred tax liability 2,781 2,760
Other liabilities 23,161 23,143
Redeemable preferred stock 124,988 121,210
Total stockholders' equity (deficit) (55,395) (49,085)
--------- ---------
Total liabilities and stockholders' equity
(deficit) $218,662 $244,242
========= =========
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