Board of Directors Approve $40 Million Share Repurchase Program
Burlington, Mass -
Aspen Technology, Inc. (NASDAQ: AZPN), a leading provider of software and services to the process industries, today announced financial results for its first quarter of fiscal 2011, ended September 30, 2010.
Mark Fusco, Chief Executive Officer of AspenTech, said, “The solid business momentum exiting fiscal 2010 continued into fiscal 2011. While the first quarter is typically a seasonally weaker quarter, new and expanded adoption of our aspenONE product suites drove an approximate 1.5% sequential increase in the license portion of our total contract value. We believe the company is on track toward achieving its full year objective of upper single digit to double digit growth in this metric, building on our three year CAGR of double digit growth.”
“We also delivered a significant year-over-year improvement in free cash flow and believe that we are well positioned to achieve our full year target of free cash flow in the mid-$50 million range. With over $1.2 billion in total contract value and best-in-class renewal rates, we are confident in the long-term scalability of our cash flow,” added Fusco. “In addition, we are pleased to announce that our Board of Directors approved a share repurchase program for up to $40 million, which is consistent with our intention to use our growing cash flow and strong balance sheet in ways that maximize shareholder value.”
Fusco concluded, “We are pleased to have completed the secondary offering of Advent International’s shares during the first quarter, after which their ownership position was reduced from over 30% to less than 10% of AspenTech’s common shares. We believe the increased diversification of AspenTech’s shareholder base is a long-term positive for the company and its shareholders.”
First Quarter Business Highlights
- Total contract value, including the value of bundled maintenance, grew approximately 2.5% sequentially during the first quarter, while the license portion of total contract value grew approximately 1.5% sequentially.
- Bookings were approximately $74 million for the first quarter, compared to approximately $39 million in the first quarter of fiscal 2010. Within bookings, new and expanded adoption drove the above mentioned sequential increase in the license portion of total contract value, and solid renewal activity contributed the remainder of total bookings.
- The value of future cash collections associated with the company’s subscription and multi-year term contracts was $653 million at the end of the first quarter, an increase from $625 million at the end of last quarter and $465 million at the end of the first quarter of fiscal 2010.
- The company closed 19 bookings of over $1 million during the first quarter, compared to 9 in the first quarter of fiscal 2010, and 34 bookings between $250,000 and $1 million, compared to 23 in the first quarter of fiscal 2010.
- Average deal size for bookings over $100,000 was approximately $806,000 in the first quarter, compared to approximately $561,000 in the first quarter of fiscal 2010.
Summary of First Quarter Financial Results
AspenTech’s total revenue of $43.1 million increased 8% from $39.8 million in the first quarter of the prior year.
- Subscription revenue includes all revenue associated with the company’s aspenONE subscription offering. Subscription revenue was $9.7 million in the first quarter of fiscal 2011, an increase from $0.03 million in the first quarter of fiscal 2010. Subscription revenue is recognized over the course of the multi-year agreement, and recognition begins when the first payment is due, which is typically 30 days after the contract is signed.
- Software revenue includes all non-subscription-based license revenue, including term-based contracts for point products as well as perpetual licenses. Software revenue was $9.3 million in the first quarter of fiscal 2011, compared to $11.1 million in the year ago period.
- Services & other revenue, which includes professional services, maintenance and other revenue, was $24.1 million in the first quarter of fiscal 2011, compared to $28.7 million in the year ago period.
For the quarter ended September 30, 2010, AspenTech reported a loss from operations of $19.7 million due primarily to the ratable revenue recognition associated with the company’s aspenONE subscription offering. For the quarter ended September 30, 2009, the company reported a loss from operations of $24.8 million.
Net loss was $15.5 million for the first quarter of fiscal 2011, leading to net loss per basic and diluted share of $0.17, compared to net loss per diluted share of $0.23 in the same period last fiscal year.
Non-GAAP loss from operations, which adds back stock-based compensation expense and restructuring charges, was $16.9 million for the first quarter of fiscal 2011, compared to a non-GAAP loss from operations of $22.6 million in the same period last fiscal year. Non-GAAP net loss was $12.8 million, or ($0.14) per share, for the first quarter of fiscal 2011, compared to a non-GAAP net loss of $19.0 million, or ($0.21) per share, in the same period last fiscal year. A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release.
AspenTech had a cash balance of $123.2 million at September 30, 2010, a decrease of $1.8 million from the end of the prior quarter. The company generated $6.4 million in cash flows from operations and invested $0.8 million in capital expenditures, leading to free cash flow of $5.6 million for the three months ended September 30, 2010. The company continued to reduce its secured borrowings balance, which was $71.2 million at the end of the first quarter, down $4.9 million compared to $76.1 million at the end of the fourth quarter of fiscal 2010.
Board of Directors Approve $40 Million Share Repurchase Program
AspenTech also announced today that the Board of Directors approved a share repurchase program for up to $40 million. The timing and amount of any shares repurchased will be determined by AspenTech based on its evaluation of market conditions and other factors. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when AspenTech might otherwise be precluded from doing so under applicable insider trading laws and regulations. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with AspenTech’s equity incentive plans and for other corporate purposes.
Conference Call and Webcast
AspenTech will host a conference call and webcast today, November 2, at 8:00 a.m. (Eastern Time), to discuss the company's financial results for the first quarter fiscal year 2011 as well as the company’s business outlook. The live dial-in number is (877) 245-0126, conference ID code 20170114. Interested parties may also listen to a live webcast of the call by logging on to the Investor Relations section of AspenTech’s website, http://www.aspentech.com/corporate/investor.cfm, and clicking on the “webcast” link. A replay of the call will be archived on AspenTech’s website and will also be available via telephone at (800) 642-1687 or (706) 645-9291, conference ID code 20170114 through November 9, 2010.
AspenTech is a leading global provider of mission-critical process optimization software solutions, which are designed to manage and optimize plant and process design, operational performance, and supply chain planning. Our aspenONE® software and related services have been developed specifically for companies in the process industries, including energy, chemicals, pharmaceuticals, and engineering and construction. Customers use our solutions to improve their competitiveness and profitability by increasing throughput and productivity, reducing operating costs, enhancing capital efficiency, and decreasing working capital requirements. To see how the world’s leading process manufacturers rely on AspenTech to achieve their operational excellence goals, visit www.aspentech.com.
© 2010 Aspen Technology, Inc. AspenTech, aspenONE and the Aspen leaf logo are trademarks of Aspen Technology, Inc. All rights reserved. All other trademarks are property of their respective owners.
The second and third paragraphs of this press release contain 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: customers’ failure to adopt the aspenONE subscription offering at the rate expected by AspenTech; AspenTech’s failure to realize the anticipated financial (including cash flow) and operational benefits of the aspenONE subscription offering; unforeseen difficulties or uncertainties in the application of accounting standards; weaknesses in our 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.
Source: Aspen Technology, Inc.