Aspen Technology Reports Ten Percent Sequential Increase in License Revenues.Business Editors CAMBRIDGE, Mass.--(BUSINESS WIRE)--Aug. 7, 2003 Company meets operational targets for third consecutive quarter 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 fourth quarter and fiscal year ended June 30, 2003. Total revenues for the fourth quarter were $82.8 million, with software license revenues totaling $38.5 million, and services revenue totaling $44.2 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 $18.2 million, or $0.47 per share. The GAAP net loss reflects $18.5 million of 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. , approximately half of which relates to adjustments in accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for facility costs. In addition, approximately $6 million of the charge relates to accruals for the company's upcoming Federal Trade Commission (FTC FTC See Federal Trade Commission (FTC). ) 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. . The company issued a separate announcement today in which it responded to a formal complaint by the FTC challenging its acquisition of Hyprotech, which was completed in May 2002. 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 $2.7 million, or $0.07 per share. This represents the third consecutive quarter of growth in 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. Pro forma results exclude the 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 charges and $2.4 million in 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 . "Our fourth quarter sequential license growth was driven by a substantial increase in contribution from our manufacturing/supply chain solutions, which exceeded our expectations for the first time in fiscal 2003," 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. "Our performance was well balanced by geography and end-user market--a testament to improved sales force productivity. We believe this validates our actions over the past year to streamline our operations and enhance our organizational leadership. "I am very proud of the dramatic turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. the company has made over the past nine months, improving operational performance in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of a very difficult environment for enterprise software providers. The best evidence of this improvement was the signing of a definitive agreement with Advent International Advent International - a long-established and leading global private equity investor Background Advent was founded in 1984 by Peter Brooke and Clint Harris to focus on international private equity investing. for a $100 million private equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. , which is subject to shareholder approval. We believe these financial resources will help us to show year-on-year improvement in earnings and cash flow in fiscal 2004." During the fourth fiscal quarter, AspenTech signed significant license transactions with Sinopec, Sasol, Huntsman Corp., Valero, Eli Lilly Eli Lilly can refer to:
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 Thursday, August 7, 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 August 7, 2003, by dialing 719-457-0820 and entering in confirmation code: 346887. 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 optimize - optimisation 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
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 and sixth paragraphs 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 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. logo are trademarks of Aspen Technology, Inc., Cambridge, Mass.
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
--------- --------- ---------- ---------
REVENUES:
Software licenses $38,549 $37,363 $139,859 $133,913
Services 44,220 46,588 182,862 186,691
--------- --------- ---------- ---------
Total revenues 82,769 83,951 322,721 320,604
--------- --------- ---------- ---------
EXPENSES:
Cost of software licenses 4,179 3,167 13,916 11,830
Cost of services 26,292 29,600 106,868 119,972
Selling and marketing 25,243 30,629 105,883 115,225
Research and development 15,617 19,045 65,086 74,458
General and administrative 9,044 10,638 36,681 34,258
Restructuring and other
charges 18,533 13,941 155,877 16,083
Charge for in-process
research and development - 14,900 - 14,900
--------- --------- ---------- ---------
Total costs and expenses 98,908 121,920 484,311 386,726
--------- --------- ---------- ---------
Income (loss) from
operations (16,139) (37,969) (161,590) (66,122)
Other income (expense), net 154 (386) (596) (893)
Write-off of investment - (8,923) - (8,923)
Interest income, net 155 177 1,353 1,177
--------- --------- ---------- ---------
Income (loss) before
provision for (benefit
from) income taxes (15,830) (47,101) (160,833) (74,761)
Provision for (benefit
from) income taxes - 10,702 - 2,404
--------- --------- ---------- ---------
Net income (loss) (15,830) (57,803) (160,833) (77,165)
Accretion of preferred
stock discount and
dividend (2,372) (2,161) (9,184) (6,301)
--------- --------- ---------- ---------
Net income (loss)
applicable to common
stockholders $(18,202) $(59,964) $(170,017) $(83,466)
========= ========= ========== =========
Basic and diluted net
income (loss) per share
applicable to common
stockholders $(0.47) $(1.60) $(4.42) $(2.58)
========= ========= ========== =========
Weighted average shares
outstanding - basic and
diluted 39,026 37,438 38,476 32,308
========= ========= ========== =========
Pro Forma before Restructuring and other charges, Charge for in-
process research and development, Write-off of investment, Valuation
on deferred tax asset, and Preferred stock discount and dividend
accretion:
Net income (loss) $2,703 $(11,740) $(4,956) $(37,259)
========= ========= ========== =========
Diluted earnings (loss)
per share $0.07 $(0.31) $(0.13) $(1.15)
========= ========= ========== =========
Weighted average shares
outstanding - diluted 41,051 37,438 38,476 32,308
========= ========= ========== =========
Supplemental information - Reconciliation of net income (loss) to
pro forma net income (loss)
Three Months Ended Twelve Months Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
--------- --------- ---------- ---------
Net income (loss) $(18,202) $(59,964) $(170,017) $(83,466)
Adjustments to net loss:
Restructuring and other
charges 18,533 13,941 155,877 16,083
Charge for in-process
research and development - 14,900 - 14,900
Write-off of investment - 8,923 - 8,923
Valuation on deferred tax
asset - 8,299 - -
Preferred stock discount
and dividend accretion 2,372 2,161 9,184 6,301
--------- --------- ---------- ---------
Pro forma net income (loss) $2,703 $(11,740) $(4,956) $(37,259)
========= ========= ========== =========
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
June 30, June 30,
2003 2002
--------- ---------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $51,567 $52,120
Accounts receivable, net 77,725 95,418
Unbilled services 15,279 30,569
Current portion of long-term installments
receivable, net 34,720 40,404
Deferred tax asset 2,929 2,929
Prepaid expenses and other current assets 11,581 18,699
--------- ---------
Total current assets 193,801 240,139
--------- ---------
Long-term installments receivable, net 73,377 68,318
Equipment and leasehold improvements, net 31,158 50,803
Computer software development costs, net 17,728 13,810
Intangible assets, net 41,279 125,363
Purchased intellectual property, net 1,861 27,626
Deferred tax asset 15,576 15,576
Other assets 5,445 6,708
--------- ---------
Total assets $380,225 $548,343
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $3,849 $5,334
Amount owed to Accenture 2,667 11,100
Accounts payable and accrued expenses 83,839 87,978
Unearned revenue 20,492 20,983
Deferred revenue 37,266 38,624
--------- ---------
Total current liabilities 148,113 164,019
--------- ---------
Long-term debt, less current maturities 89,911 92,135
Obligation subject to common stock settlement 5,495 1,810
Deferred revenue, less current portion 9,815 9,548
Deferred tax liability 13,258 15,003
Other liabilities 16,009 12,040
--------- ---------
Preferred stock 57,537 -
Total stockholders' equity 40,087 253,788
--------- ---------
Total liabilities and stockholders' equity $380,225 $548,343
========= =========
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