-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RUzrAefHA5mrMSkw8Id/mimfY1QzujNmy7YDsVatCcRKILIEyWzCZaN3b3Hf9MWP EY0vljRqxEu8tiJxrNCzvw== 0001157523-04-004154.txt : 20040429 0001157523-04-004154.hdr.sgml : 20040429 20040429164909 ACCESSION NUMBER: 0001157523-04-004154 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040429 ITEM INFORMATION: FILED AS OF DATE: 20040429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASPEN TECHNOLOGY INC /DE/ CENTRAL INDEX KEY: 0000929940 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 042739697 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24786 FILM NUMBER: 04765722 BUSINESS ADDRESS: STREET 1: TEN CANAL PARK CITY: CAMBRIDGE STATE: MA ZIP: 02141 BUSINESS PHONE: 6179491000 MAIL ADDRESS: STREET 1: TEN CANAL PARK CITY: CAMBRIDGE STATE: MA ZIP: 02141 8-K 1 a4628803.txt ASPEN TECHNOLOGY 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 29, 2004 ASPEN TECHNOLOGY, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 0-24786 04-2739697 - -------------------------------------------------------------------------------- (State or other juris- (Commission (IRS Employer diction of incorporation File Number) Identification No.) Ten Canal Park, Cambridge, Massachusetts 02141 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 949-1000 - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 12. Results of Operations and Financial Condition On April 29, 2004, Aspen Technology, Inc. announced its financial results for the quarter ended March 31, 2004. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: April 29, 2004 ASPEN TECHNOLOGY, INC. By: /s/ Charles F. Kane ------------------------------------------ Charles F. Kane Senior Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit No. Description - ---------- ----------- 99.1 Press release issued by Aspen Technology, Inc. on April 29, 2004. EX-99.1 2 a4628803ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Aspen Technology Reports Fourth Consecutive Quarter of Software License Revenue Growth CAMBRIDGE, Mass.--(BUSINESS WIRE)--April 29, 2004-- Company Delivers Significant Improvement in Year-over-Year Operating Margins Driven by Rebound in Spending From the Chemicals Market Aspen Technology, Inc. (NASDAQ: AZPN) today reported financial results for its fiscal 2004 third quarter and nine months ended March 31, 2004. Total revenues for the third quarter totaled $80.7 million, with software license revenues of $35.9 million and services revenues of $44.8 million. On a Generally Accepted Accounting Principles (GAAP) basis, the company reported third quarter net income of $1.5 million, or $0.03 per diluted share, compared to a net loss of $2.0 million, or ($0.05) per diluted share, in the same period last year. On a pro forma (non-GAAP) basis, excluding the preferred stock dividend and discount accretion, the company reported fiscal 2004 third quarter net income of $4.9 million, or $0.06 per diluted share. "The strength of our business in the chemicals and oil & gas industries, combined with continued operational execution, enabled us to meet or exceed our quarterly targets for revenue and net income for the sixth consecutive quarter," said David McQuillin, President and CEO of AspenTech. "We continue to see modest improvements in the global economic environment and our customer base is actively looking to invest in IT solutions that support their corporate-wide initiatives to improve operational performance. "During the past nine months, we have released nine new products, which we believe will fuel our future growth. Now, our challenge as a company is to focus on capturing the growth opportunities of these new products, as well as maximize the performance of our existing point solutions. As we build our sales pipeline for these products, we plan to reallocate organizational resources into sales and marketing activities that support our plans for profitable, sustainable growth in fiscal 2005 and beyond." Total revenues for the nine months ended March 31, 2004 were $238.1 million, with software license revenues growing by approximately seven percent year-over-year to $108.7 million and services revenue totaling $129.4 million. On a GAAP basis, the company reported net income of $6.4 million, or $0.13 per diluted share, as compared to a net loss of $151.8 million, or ($3.96) per diluted share, for the same period last year. On a pro forma (non-GAAP) basis, excluding the preferred stock dividend and discount accretion, the company reported net income of $9.3 million, or $0.12 per diluted share, compared to a pro forma (non-GAAP) loss of $7.7 million, or ($0.20) per diluted share, in the prior year. "The company has made significant strides in consistently meeting or exceeding our operational targets and improving our financial performance, as evidenced by the year-over-year increase in our operating margins," said Charles Kane, Senior Vice President & CFO. "As we seek to grow our revenues and hit our long-term operating margin goals, it is necessary to maintain our focus on operational improvement and invest in the areas of the business that will produce the greatest growth opportunities." Third Quarter Highlights AspenTech accomplished the following in the third quarter: -- Generated 6.6 percent operating margins, its highest quarterly operating margin in four years and a more than two-fold improvement from last year's third quarter. -- Lowered DSOs for billed receivables by 21 days to 67 days compared to 88 days in the third quarter of fiscal 2003. -- Pro forma (non-GAAP) net income more than doubled from the year-ago quarter. -- Paid down approximately $12 million of debt, relating to the company's outstanding convertible debentures. -- Signed significant license transactions with Eni Refining, Suncor Energy, Statoil, Mitsui Chemicals, Lubrizol, Valero Energy Corporation and L'Oreal. -- Delivered on new product development commitments with the commercial launch of the Aspen Operations Manager Suite and the roll-out of the company's first vertical market solution, Aspen Oil & Gas. -- Received prestigious awards from Frost & Sullivan and the Supply Chain Council in recognition of the company's differentiated technology and value proposition to customers. The company was also recognized by the Service and Support Professionals Association for the third year in a row for outstanding customer support. The company will hold a conference call and webcast to discuss its financial results, business outlook, and related corporate and financial matters at 5:00 p.m. eastern time on Thursday, April 29, 2004. 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 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, 2004, by dialing (800) 642-1687 and entering in confirmation code: 6816709. Pro Forma (non-GAAP) 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 with accounting principles generally accepted in the United States (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 consolidated financial statements. About AspenTech Aspen Technology, Inc. provides industry-leading software and implementation services that enable process companies to increase efficiency and profitability. AspenTech's engineering product line is used to design and improve plants and processes, maximizing returns throughout an asset's operating life. Its manufacturing/supply chain product line allows companies to increase margins in their plants and supply chains, by managing customer demand, optimizing production, and streamlining the delivery of finished products. These two offerings are combined to create solutions for enterprise operations management (EOM), integrated enterprise-wide systems that provide process manufacturers with the capability to dramatically improve their operating performance. Over 1,500 leading companies already rely on AspenTech's software, including Aventis, Bayer, BASF, BP, ChevronTexaco, Dow Chemical, DuPont, ExxonMobil, Fluor, Foster Wheeler, GlaxoSmithKline, Shell, and Total. For more information, visit www.aspentech.com. The third, fourth and sixth paragraphs of this press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act 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 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 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 Nine Months Ended March 31, March 31, March 31, March 31, 2004 2003 2004 2003 -------- -------- --------- ---------- REVENUES: Software licenses $35,914 $34,883 $108,736 $101,310 Services 44,785 44,846 129,397 138,642 -------- -------- --------- ---------- Total revenues 80,699 79,729 238,133 239,952 -------- -------- --------- ---------- EXPENSES: Cost of software licenses 3,854 2,891 11,786 9,737 Cost of services 25,345 25,745 74,223 80,576 Selling and marketing 23,818 24,455 71,281 80,640 Research and development 14,234 15,727 44,534 49,469 General and administrative(1) 8,098 8,893 25,005 27,637 Goodwill Impairment Charge - - - 74,715 Restructuring & Other One Time Charges - 2,100 2,000 62,629 -------- -------- --------- ---------- Total costs and expenses 75,349 79,811 228,829 385,403 -------- -------- --------- ---------- Income (loss) from operations 5,350 (82) 9,304 (145,451) Other income (expense), net 462 64 757 (750) Interest income, net 460 349 2,077 1,198 -------- -------- --------- ---------- Income (loss) before provision for income taxes 6,272 331 12,138 (145,003) Provision for income taxes 1,352 - 2,855 - -------- -------- --------- ---------- Net income (loss) 4,920 331 9,283 (145,003) Accretion of preferred stock discount and dividend(2) (3,400) (2,291) (2,900) (6,812) -------- -------- --------- ---------- Net income (loss) applicable to common stockholders $1,520 $(1,960) $6,383 $(151,815) ======== ======== ========= ========== EARNINGS PER SHARE: Basic net income (loss) per common share $0.04 $(0.05) $0.16 $(3.96) ======== ======== ========= ========== Diluted net income (loss) per common share $0.03 $(0.05) $0.13 $(3.96) ======== ======== ========= ========== Weighted average shares outstanding - Basic 41,049 38,795 40,326 38,295 ======== ======== ========= ========== Weighted average shares outstanding - Diluted 51,907 38,795 48,275 38,295 ======== ======== ========= ========== PRO FORMA EARNINGS PER SHARE: Pro forma net income (loss) excludes Accretion of preferred stock discount and dividend for all periods and Restructuring and other charges for the periods ended March 31, 2003, and pro forma weighted average shares outstanding assumes the conversion of the Series D preferred stock to common stock. Net income (loss) $4,920 $2,431 $9,283 $(7,659) ======== ======== ========= ========== Diluted earnings (loss) per share $0.06 $0.06 $0.12 $(0.20) ======== ======== ========= ========== Weighted average shares outstanding - diluted 88,244 40,938 78,556 38,295 ======== ======== ========= ========== (1) General and administrative costs include amortization of intangible assets of $1.9 million and $5.8 million in the three and nine months ended March 31, 2004, and $2.2 million and $8.7 million in the three and nine months ended March 31, 2003. (2) Detail of this amount is provided on the reconciliation of net income (loss) to pro forma net income (loss) 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, 2004 2003 2004 2003 --------- -------- --------- ---------- Net income (loss) applicable to common stockholders $1,520 $(1,960) $6,383 $(151,815) Adjustments to net income (loss): Restructuring and other charges - 2,100 - 137,344 Preferred stock discount and dividend accretion 3,400 2,291 9,352 6,812 Gain on conversion of Series B redeemable preferred stock - - (6,452) - --------- -------- --------- ---------- Pro forma net income (loss) $4,920 $2,431 $9,283 $(7,659) ========= ======== ========= ========== ASPEN TECHNOLOGY, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) March 31, June 30, 2004 2003 --------- --------- ASSETS Current assets: Cash, cash equivalents and short-term investments $114,387 $51,567 Accounts receivable, net 60,225 77,725 Unbilled services 18,399 15,279 Current portion of long-term installments receivable, net 20,301 34,720 Deferred tax asset 2,929 2,929 Prepaid expenses and other current assets 9,667 11,581 --------- --------- Total current assets 225,908 193,801 --------- --------- Long-term installments receivable, net 69,110 73,377 Equipment and leasehold improvements, net 23,895 31,158 Computer software development costs, net 18,998 17,728 Intangible assets, net 36,182 41,279 Purchased intellectual property, net 1,437 1,861 Deferred tax asset 13,831 13,831 Other assets 3,925 5,445 --------- --------- Total assets $393,286 $378,480 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $1,996 $3,849 Amount owed to Accenture - 8,162 Accounts payable and accrued expenses 70,949 82,094 Unearned revenue 18,714 20,492 Deferred revenue 36,007 37,266 --------- --------- Total current liabilities 127,666 151,863 --------- --------- Long-term debt, less current maturities 64,201 89,911 Deferred revenue, less current portion 6,637 9,815 Deferred tax liability 11,195 13,258 Other liabilities 8,150 16,009 --------- --------- Redeemable preferred stock 103,303 57,537 Total stockholders' equity 72,134 40,087 --------- --------- Total liabilities and stockholders' equity $393,286 $378,480 ========= ========= CONTACT: Aspen Technology, Inc. Joshua Young, 617-949-1274 joshua.young@aspentech.com -----END PRIVACY-ENHANCED MESSAGE-----