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Aspen Technology Announces Financial Results For The First Quarter Of Fiscal 2013

Forward-Looking Statements

The second paragraph of this press release contains 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: AspenTech’s failure to develop new software products, enhance existing products and services, or penetrate new vertical markets; demand for, or usage of, aspenONE software declines for any reason; unfavorable economic and market conditions or a lessening demand in the market for process optimization software; unforeseen difficulties or uncertainties in the application of accounting standards; weaknesses in AspenTech’s 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share data)
         
Three Months Ended
September 30,
2012 2011
Revenue:
Subscription and software $ 54,080 $ 31,910
Services and other   17,377     19,315  
Total revenue   71,457     51,225  
Cost of revenue:
Subscription and software 3,190 2,724
Services and other   9,148     11,097  
Total cost of revenue   12,338     13,821  
Gross profit   59,119     37,404  
Operating expenses:
Selling and marketing 21,591 23,446
Research and development 15,766 13,769
General and administrative 12,768 15,887
Restructuring charges   40     (73 )
Total operating expenses   50,165     53,029  
Income (loss) from operations 8,954 (15,625 )
Interest income 1,099 2,231
Interest expense (257 ) (1,092 )
Other expense, net   (277 )   (2,032 )
Income (loss) before provision for (benefit from) income taxes 9,519 (16,518 )
Provision for (benefit from) income taxes   5,106     (4,782 )
Net income (loss) $ 4,413   $ (11,736 )
Net income (loss) per common share:
Basic $ 0.05 $ (0.12 )
Diluted $ 0.05 $ (0.12 )
Weighted average shares outstanding:
Basic 93,428 94,065
Diluted 95,670 94,065
 
 
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share data)
         
September 30, June 30,
2012 2012
 
ASSETS
Current assets:
Cash and cash equivalents $ 163,363 $ 165,242
Accounts receivable, net 22,923 31,450
Current portion of installments receivable, net 27,920 33,184
Collateralized receivables 4,875 6,297
Unbilled services 1,576 1,592
Prepaid expenses and other current assets 9,979 16,219
Prepaid income taxes 132 283
Current deferred tax assets   7,199     7,196  
Total current assets   237,967     261,463  
Non-current installments receivable, net 10,042 14,046
Property, equipment and leasehold improvements, net 7,881 7,037
Computer software development costs, net 1,445 1,689
Goodwill 19,995 19,399
Non-current deferred tax assets 54,383 58,559
Other non-current assets   7,117     6,142  
Total assets $ 338,830   $ 368,335  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Secured borrowings $ 5,616 $ 10,756
Accounts payable 1,446 2,566
Accrued expenses and other current liabilities 26,774 37,989
Income taxes payable 489 598
Current deferred revenue 137,640 143,578
Current deferred tax liabilities   232     232  
Total current liabilities   172,197     195,719  
Non-current deferred revenue 42,890 43,595
Other non-current liabilities 15,545 15,429
Commitments and contingencies
Series D redeemable convertible preferred stock, $0.10 par value—
Authorized— 3,636 shares at September 30, 2012 and June 30, 2012
Issued and outstanding— none at September 30, 2012 and June 30, 2012 - -
Stockholders’ equity:
Common stock, $0.10 par value— Authorized—210,000,000 shares
Issued— 97,453,004 shares at September 30, 2012 and 96,663,580 shares at June 30, 2012
Outstanding— 93,538,774 shares at September 30, 2012 and 93,465,955 shares at June 30, 2012 9,745 9,666
Additional paid-in capital 553,855 547,546
Accumulated deficit (390,666 ) (395,079 )
Accumulated other comprehensive income 9,063 8,095
Treasury stock, at cost—3,914,230 shares of common stock at September 30, 2012 and 3,197,625 at June 30, 2012   (73,799 )   (56,636 )
Total stockholders’ equity   108,198     113,592  
Total liabilities and stockholders' equity $ 338,830   $ 368,335  
 
 
ASPEN TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
         
Three Months Ended
September 30,
2012 2011
Cash flows from operating activities:
Net income (loss) $ 4,413 $ (11,736 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 1,317 1,412
Net foreign currency (gain) loss (121 ) 1,275
Stock-based compensation 4,315 3,708
Deferred income taxes 4,222 (5,354 )
Provision for bad debts 97 150
Other non-cash operating activities 3 13
Changes in assets and liabilities:
Accounts receivable 8,895 5,594
Unbilled services 38 611
Prepaid expenses, prepaid income taxes, and other assets 4,443 1,187
Installments and collateralized receivables 11,030 8,329
Accounts payable, accrued expenses and other liabilities (13,253 ) (6,898 )
Deferred revenue   (6,938 )   6,982  
Net cash provided by operating activities   18,461     5,273  
Cash flows from investing activities:
Purchase of property, equipment and leasehold improvements (1,800 ) (386 )
Insurance proceeds 2,222 -
Purchase of technology intangibles (527 ) -
Capitalized computer software development costs   -     (200 )
Net cash used in investing activities   (105 )   (586 )
Cash flows from financing activities:
Exercise of stock options 4,048 2,232
Proceeds from secured borrowings - 1,408
Repayments of secured borrowings (5,394 ) (2,232 )
Repurchases of common stock (17,163 ) (9,172 )
Payment of tax withholding obligations related to restricted stock   (1,976 )   (1,187 )
Net cash used in financing activities (20,485 ) (8,951 )
Effects of exchange rate changes on cash and cash equivalents   250     (365 )
Decrease in cash and cash equivalents (1,879 ) (4,629 )
Cash and cash equivalents, beginning of period   165,242     149,985  
Cash and cash equivalents, end of period $ 163,363   $ 145,356  
 
Supplemental disclosure of cash flow information:
Income tax paid, net $ 1,034 $ 631
Interest paid 257 1,092
 
 
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, except per share data)

         

Three Months Ended September 30,

2012 2011

Total expenses

GAAP total expenses (a) $ 62,503 $ 66,850
Less:
Stock-based compensation (b) (4,315 ) (3,708 )
Restructuring charges (40 ) 73
Amortization of purchased intangibles (103 ) -
               
Non-GAAP total expenses       $ 58,045       $ 63,215  
 

Income (loss) from operations

GAAP income (loss) from operations $ 8,954 $ (15,625 )
Plus:
Stock-based compensation (b) 4,315 3,708
Restructuring charges 40 (73 )
Amortization of intangible assets 103 -
               
Non-GAAP income (loss) from operations       $ 13,412       $ (11,990 )
 

Net income (loss)

GAAP net income (loss) $ 4,413 $ (11,736 )
Plus:
Stock-based compensation (b) 4,315 3,708
Restructuring charges 40 (73 )
Amortization of intangible assets 103 -
Less:
Income tax effect on Non-GAAP items (c) (1,609 ) (1,068 )
               
Non-GAAP net income (loss)       $ 7,262       $ (9,169 )
 

Diluted income (loss) per share

GAAP diluted income (loss) per share $ 0.05 $ (0.12 )
Plus:
Stock-based compensation (b) 0.05 0.04
Restructuring charges - -
Amortization of intangible assets - -
Less:
Income tax effect on Non-GAAP items (c) (0.02 ) (0.01 )
               
Non-GAAP diluted income (loss) per share       $ 0.08       $ (0.09 )
 
Shares used in computing Non-GAAP diluted income (loss) per share 95,670 94,065
 
(a) GAAP total expenses

Three Months Ended September 30,

2012 2011
Total costs of revenue $ 12,338 $ 13,821
Total operating expenses   50,165     53,029  
GAAP total expenses $ 62,503 $ 66,850
 
(b) Stock-based compensation expense was as follows:

Three Months Ended September 30,

2012 2011
Cost of service and other $ 343 $ 303
Selling and marketing 977 1,170
Research and development 741 348
General and administrative   2,254     1,887  
Total stock-based compensation $ 4,315 $ 3,708
 
(c) The income tax effect on the first quarter of fiscal 2013 Non-GAAP items is calculated utilizing an estimate of our future effective tax rate.




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