Aspen Technology Announces Financial Results for the Fourth Quarter and Full Fiscal Year 2007 and First Quarter Fiscal 2008; Announces Selected Preliminary Financial Results for Third Quarter Fiscal 2008.* Files Fiscal 2007 10-K and First Quarter Fiscal 2008 10-Q with SEC * Completes Previously Announced Restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of Prior Period Results * Announces license bookings of $63 million for the quarter ending March 31, 2008, an increase of 31% on a year-over-year basis BURLINGTON, 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. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : AZPN.PK), a leading provider of software and services to the process industries, today announced that it has filed its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ending June 30, 2007, including the previously announced restatement of prior period results. In addition, the company has filed its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the first quarter of fiscal 2008, ending September 30, 2007. Brad Miller Brad Miller can refer to any of several people:
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. , Chief Executive Officer of AspenTech, said "While the finance department has been focused on completing our financial statement filings, the company's customer facing operations have continued to execute at a high level. Following a record fiscal 2007 performance, the company has generated year-over-year license bookings growth of 25% during the first nine months of fiscal 2008, including 31% year-over-year growth during the third quarter." Fusco added, "The company ended the third fiscal quarter with a strong financial position highlighted by $137 million in cash, an increase from $132 million at December 31, 2007 and net of $12 million used during the third quarter to retire our previously existing Key Bank secured borrowing facility. We continue to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the company's long-term fundamental outlook based on our industry leading domain expertise, unique suite of aspenONE solutions and solid demand in our core markets." Fourth Quarter Fiscal 2007 Financial Results For the fourth quarter ended June 30, 2007, AspenTech reported total revenue of $101.4 million, an increase of 27% from the fourth quarter of the prior fiscal year, and above the company's original guidance of $85 million to $89 million. Within total revenue, license revenue was $68.0 million, an increase of 52%, and services revenue was $33.4 million, a decrease of 4%, compared to the fourth quarter of fiscal 2006, respectively. AspenTech's income from operations, 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 $24.0 million in the fourth quarter of fiscal 2007, exceeding the mid-point of the company's original guidance of approximately $16 million and representing an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 23.7%. This compares to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $7.7 million in the fourth quarter of fiscal 2006, which represented an operating margin of 9.7%. GAAP 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. in the fourth quarter of fiscal 2007 included $3.1 million of non-cash stock-based compensation, $1.3 million of non-cash amortization of intangibles associated with previous acquisitions, $1.0 million in restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. due to the company's continued office consolidations, and $0.8 million in incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. auditing and professional fees associated with bringing the company's financial statements current - the combination of which reduced the company's operating margin by approximately 6 percentage points. These items reduced the prior year's operating margin by approximately 8 percentage points. Net income was $17.9 million in the fourth quarter of fiscal 2007. This represented a significant increase compared to net income of $3.9 million in the same period of fiscal 2006. 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. discounts and dividends totaled $3.9 million in the fourth quarter of fiscal 2006 and zero in the fourth quarter of fiscal 2007, resulting in net income applicable to common shareholders of $17.9 million and $52 thousand in the fourth quarter of fiscal 2007 and 2006, respectively. Net income per share applicable to common shareholders was $0.19 for the quarter ended June 30, 2007, a significant increase compared to $0.00 in the same period of fiscal 2006. Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. weighted shares outstanding were 93.3 million in the fourth quarter of fiscal 2007, an increase compared to 58.6 million in the same period of fiscal 2006 due to the conversion of preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. to common shares in December 2006 and January 2007. The above mentioned stock-based compensation, amortization of intangibles associated with previous acquisitions, restructuring charges, and incremental professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. fees had a net, negative impact of $6.2 million in the quarter ended June 30, 2007, or $0.07 per share, and $6.0 million in the quarter ended June 30, 2006, or $0.10 per share. Fiscal Year 2007 Financial Results For the fiscal year ended June 30, 2007, AspenTech reported total revenue of $341.0 million, an increase of 16% from fiscal 2006. Within total revenue, license revenue was $199.8 million, an increase of 30%, and services revenue was $141.3 million, an increase compared to $140.7 million, in fiscal 2006, respectively. AspenTech's income from operations, determined in accordance with GAAP, was $55.4 million in fiscal 2007, representing an operating margin of 16.2%. This compares to operating income of $18.8 million in fiscal 2006, which represented an operating margin of 6.4%. GAAP operating expenses in fiscal 2007 included $11.1 million of non-cash stock-based compensation, $6.5 million of non-cash amortization of intangibles associated with previous acquisitions, $4.6 million in restructuring charges due to the company's continued office consolidations, and $0.8 million in incremental auditing and professional fees associated with bringing the company's financial statements current - the combination of which reduced the company's operating margin by approximately 7 percentage points. These items reduced the prior fiscal year's operating margin by approximately 7 percentage points. Net income applicable to common shareholders was $38.2 million in fiscal 2007, which was net of $7.3 million in preferred stock discounts and dividends. This represented a significant increase compared to a loss attributable to common shareholders of $8.9 million in fiscal 2006, which was net of $15.4 million in preferred stock discounts and dividends. Net income per diluted share applicable to common shareholders was $0.50 for the fiscal year ended June 30, 2007, a significant increase from a loss per share of $0.20 in fiscal 2006. Weighted shares outstanding were 91.9 million in fiscal 2007, an increase compared to 44.6 million in fiscal 2006 due to the conversion of preferred shares to common shares in December 2006 and January 2007. The above mentioned stock-based compensation, amortization of intangibles associated with previous acquisitions, restructuring charges and incremental professional services fees had a net, negative impact of $23.0 million in the year ended June 30, 2007 and $20.8 million in fiscal 2006. AspenTech had cash and cash equivalents of $132.3 million at June 30, 2007, an increase of approximately $31.5 million from $100.8 million at the end of March 31, 2007. First Quarter Fiscal 2008 Financial Results For the quarter ended September 30, 2007, AspenTech reported total revenue of $64.8 million, compared to $64.2 million in the first quarter of fiscal 2007. Within total revenue, license revenue was $31.1 million, an increase of 11%, and services revenue was $33.7 million, a decrease of 6%, compared to the first quarter of fiscal 2007, respectively. AspenTech's loss from operations, determined in accordance with GAAP, was $8.4 million in the first quarter of fiscal 2008. This compares to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $17 thousand in the first quarter of fiscal 2007. GAAP operating expenses in the first quarter of fiscal 2008 included $2.5 million of non-cash stock-based compensation, $7.2 million in restructuring charges due to the previously announced move of the company's headquarters, and $1.5 million in incremental professional services fees associated with completing the financial restatement. In the first quarter of fiscal 2007, the company's GAAP operating expenses included $1.7 million in non-cash stock-based compensation, $1.9 million in amortization in intangibles and $1.4 million in restructuring charges. Net loss applicable to common shareholders was $9.0 million in the first quarter of fiscal 2008 compared to net loss applicable to common shareholders of $5.3 million in the same period in fiscal 2007. Net loss per share applicable to common shareholders was $0.10 for the quarter ended September 31, 2007, which was consistent with the first quarter of fiscal 2007. Weighted shares outstanding were 89.0 million in the first quarter of fiscal 2008, an increase compared to 52.8 million in the first quarter of fiscal 2007 due to the conversion of preferred shares to common shares in December 2006 and January 2007. The above mentioned stock-based compensation, amortization of intangibles associated with previous acquisitions, restructuring charges, and incremental professional services fees had a net, negative impact of $0.13 per share in the quarter ended September 30, 2007 as compared to a net, negative impact of $0.09 per share in the quarter ended September 30, 2006. AspenTech had cash and cash equivalents of $129.5 million at September 30, 2007, a decrease of approximately $2.8 million from $132.3 million at the end of June 30, 2007. Summary of Restatement Effects of Prior Period Financial Results The company's Annual Report on Form 10-K for fiscal 2007 included the restatement of its financial statements for fiscal years ended June 30, 2006 and 2005, in addition to the first three quarters of the year ended June 30, 2007. On June 11, 2007, the company announced that it had identified errors related to the accounting for sales of installment receivables. In particular, it was determined that certain sales of installments receivable did not meet criteria for true sale accounting on an ongoing basis. As a result, two new balance sheet accounts were created - Collateralized Receivables and the related Secured Borrowing liability. The restated consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. as of June 30, 2006 includes the recording of $211.3 million in collateralized receivables, the related recording of $182.4 million in secured borrowings, and the elimination of $19.0 million in retained interest Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. in sold receivables. As previously stated, the company views this newly reported liability as self funding, with collections of collateralized receivables servicing the liability. The company does not believe that this accounting conclusion alters its arrangements with its customers, and it has not changed its economic relationship with the financial institutions. The summary impact to income/loss from operations related to the restatement of installments receivable, in addition to correcting other errors in the company's previously reported financial statements, was as follows: * Income from operations improved from $28.1 million as previously reported to $31.4 million as restated for the nine months ended March 31, 2007; * Income from operations in fiscal 2006 was $18.8 million both as previously reported and as restated; * Loss from operations in fiscal 2005 improved from a previously reported operating loss of $70.0 million to a restated operating loss of $59.0 million. On February 11, 2008, the company announced it had identified errors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its historical accounting for income taxes for certain international tax obligations, primarily arising from transactions among consolidated subsidiaries or from revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of foreign currencies. As a result, the company increased tax provisions for these potential obligations in the applicable period in the amounts of $4.1 million for the nine months ended March 31, 2007, $3.2 million for the year ended June 30, 2006, $6.8 million for the year ended June 30, 2005, and $4.6 million as of June 30, 2004. The summary impact on net income or loss as a result of the restatement was: * Net income for the nine months ended March 31, 2007 as restated was $27.6 million, a decrease from $31.9 million as previously reported; * Net income for fiscal 2006 as restated was $6.5 million, a decrease from $12.8 million as previously reported; * Net loss for fiscal 2005 as restated was $69.1 million, an improvement from $73.6 million as previously reported. In addition, in the calculation and disclosure of deferred tax balances, errors were identified for the book or tax accounting treatment for certain items. These errors resulted in the incorrect disclosure of components of the company's deferred taxes and the related offsetting valuation allowance within the income tax footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." . Accordingly, the deferred tax balances included in the income tax footnote and the offsetting valuation allowance has been restated as of June 30, 2006. As these net deferred tax assets had a full valuation allowance, the adjustments to deferred tax assets had no net impact on the company's consolidated balance sheet or statements of operations. Ending cash balances were not affected as a result of the restatement; however, the presentation of the cash flow statement was restated. The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the sale of installments receivable were previously classified in cash flows from operations and have been restated as cash flows from financing activities. Payments made on secured borrowings are now similarly classified as cash flows from financing activities. Annual collections relating to installments receivable that were previously transferred to a financing institution are recognized as cash flows from operations. The company did not previously recognize these collections within its cash flow statement following the transfer of the installments receivable to the financing institution. Investors can find additional details on all income statement and balance sheet results, on a "previously reported" and "as restated" basis, in the company's Annual Report on Form 10-K for the year ended June 30, 2007. About AspenTech AspenTech is a leading provider of award-winning process optimization Process optimization is the practice of making changes or adjustments to a process, to get results. Optimization is the use of specific techniques to determine the most cost effective and efficient solution to a problem or design for a process. software and services. AspenTech's integrated aspenONE[TM] solutions enable manufacturers to reduce costs, increase capacity, and optimize optimize - optimisation operational performance end-to-end throughout the engineering, plant operations, and supply chain management processes. For more information, visit www.aspentech.com. (c) 2008 Aspen Technology, Inc. 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. All rights reserved. All other trademarks are property of their respective owners. Forward Looking Statements This press release may contain 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; AspenTech may incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. substantial damages and expenses as the result of pending and future 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 government investigations, including securities litigation based on the restatements of the company's financial statements as well as any future action associated with a determination that the company has failed to comply with its existing consent decree A settlement of a lawsuit or criminal case in which a person or company agrees to take specific actions without admitting fault or guilt for the situation that led to the lawsuit. A consent decree is a settlement that is contained in a court order. with the Federal Trade Commission; 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. ; risks associated with AspenTech's delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. from The Nasdaq Stock Exchange and the trading of AspenTech's common stock over the counter; 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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