Aspen Technology, Inc. (NASDAQ: AZPN), a leading provider of
software and services to the process industries, today announced
financial results for its fourth quarter and fiscal year ended June
30, 2016.
“AspenTech reported a solid fourth quarter and fiscal year
2016,” said Antonio Pietri, President and Chief Executive Officer
of AspenTech. “We saw strong demand among our owner-operator
customers during the quarter, including a significant upsell and a
large renewal with two of the top oil and chemicals companies in
the world. These transactions show the value we deliver for
customers and our ability to generate growth in a challenging
economic environment.”
Pietri added, “Our scalable business model and disciplined
approach to investing for growth while prudently managing expenses
delivered another year of solid profitability and free cash flow.
Our balance sheet and cash flow are strategic assets that we are
leveraging to invest in areas that drive growth in the business and
to fund our share repurchase program to deliver significant value
to our shareholders.”
Fourth Quarter and Fiscal Year 2016 Business
Highlights
- Annual spend, which the company defines
as the annualized value of all term license and maintenance
contracts at the end of the quarter, was $441 million at the end of
fiscal 2016, an increase of 2.5% from March 31, 2016 and 5.3% from
the end of fiscal 2015.
- GAAP operating margin was 43.1% in the
fourth quarter of fiscal 2016, compared to 41.1% in the fourth
quarter of fiscal 2015. Non-GAAP operating margin was 46.1% in the
fourth quarter of fiscal 2016, compared to 44.2% in the fourth
quarter of fiscal 2015.
- GAAP operating margin was 44.8% for
fiscal year 2016, compared to 40.8% for fiscal year 2015. Non-GAAP
operating margin was 49.3% for fiscal year 2016, compared to 45.1%
for fiscal year 2015.
- AspenTech repurchased nearly 2.0
million shares of our common stock for $75.0 million in the fourth
quarter of fiscal 2016.
- AspenTech repurchased nearly 4.8
million shares of common stock for $180.0 million in fiscal year
2016.
Summary of Fourth Quarter Fiscal Year 2016 Financial
Results
AspenTech’s total revenue of $113.7 million decreased 0.4% from
$114.2 million in the fourth quarter of the prior fiscal year.
- Subscription and software
revenue was $106.7 million in the fourth quarter of fiscal
2016, an increase from $105.6 million in the fourth quarter of
fiscal 2015.
- Services and other revenue was
$7.0 million in the fourth quarter of fiscal 2016, a decrease from
$8.5 million in the fourth quarter of fiscal 2015.
For the quarter ended June 30, 2016, AspenTech reported income
from operations of $49.0 million, compared to income from
operations of $46.9 million for the quarter ended June 30,
2015.
Net income was $33.3 million for the quarter ended June 30,
2016, leading to net income per share of $0.41, compared to net
income per share of $0.36 in the same period last fiscal year.
Non-GAAP income from operations, which adds back stock-based
compensation expense, amortization of intangibles associated with
acquisitions, acquisition-related costs and non-capitalized
acquired technology, was $52.4 million for the fourth quarter of
fiscal 2016, compared to non-GAAP income from operations of $50.5
million in the same period last fiscal year. Non-GAAP net income
was $35.5 million, or $0.44 per share, for the fourth quarter of
fiscal 2016, compared to non-GAAP net income of $33.1 million, or
$0.39 per share, in the same period last fiscal year.
AspenTech had cash and marketable securities of $321.3 million
at June 30, 2016, compared to $105.9 million at the end of the
prior quarter.
During the fourth quarter, the company generated $44.8 million
in cash flow from operations and $47.5 million in free cash
flow.
Summary of Fiscal Year 2016 Financial Results
AspenTech’s total revenue of $472.3 million increased 7.3% from
$440.4 million for fiscal year 2015.
- Subscription and software
revenue was $440.4 million, an increase from $405.6 million for
fiscal year 2015.
- Services and other revenue was
$31.9 million, compared to $34.8 million for fiscal year 2015.
For the fiscal year ended June 30, 2016, AspenTech reported
income from operations of $211.4 million, an improvement from
income from operations of $179.8 million for fiscal year 2015.
Net income was $140.0 million for the fiscal year ended June 30,
2016, leading to net income per share of $1.68, compared to net
income per share of $1.33 for fiscal year 2015.
Non-GAAP income from operations was $232.7 million for fiscal
year 2016, an improvement compared to non-GAAP income from
operations of $198.4 million for fiscal year 2015. Non-GAAP net
income was $155.8 million, or $1.87 per share, for fiscal year
2016, an improvement compared to non-GAAP net income of $130.3
million, or $1.46 per share, for fiscal year 2015.
For the fiscal year ended June 30, 2016, the company generated
$153.7 million in cash flow from operations and $165.1 million in
free cash flow.
Use of Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures” under
the rules of the U.S. Securities and Exchange Commission. Non-GAAP
financial measures are not based on a comprehensive set of
accounting rules or principles. This non-GAAP information
supplements, and is not intended to represent a measure of
performance in accordance with, disclosures required by generally
accepted accounting principles, or GAAP. Non-GAAP financial
measures should be considered in addition to, not as a substitute
for or superior to, financial measures determined in accordance
with GAAP. A reconciliation of GAAP to non-GAAP results is included
in the financial tables included in this press release.
Management considers both GAAP and non-GAAP financial results in
managing AspenTech’s business. As the result of adoption of new
licensing models, management believes that a number of AspenTech’s
performance indicators based on GAAP, including revenue, gross
profit, operating income and net income, should be viewed in
conjunction with certain non-GAAP and other business measures in
assessing AspenTech’s performance, growth and financial condition.
Accordingly, management utilizes a number of non-GAAP and other
business metrics, including the non-GAAP metrics set forth in this
press release, to track AspenTech’s business performance. None of
these non-GAAP metrics should be considered as an alternative to
any measure of financial performance calculated in accordance with
GAAP.
Conference Call and WebcastAspenTech will host a
conference call and webcast today, August 11, 2016, at 4:30 p.m.
(Eastern Time), to discuss the company's financial results for the
fourth quarter and fiscal year 2016 as well as the company’s
business outlook.
The live dial-in number is (866) 604-6127 or (443) 961-0460,
conference ID code 56375102. 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
(855) 859-2056 or (404) 537-3406, conference ID code 56375102,
through September 11, 2016.
About AspenTech
AspenTech is a leading supplier of software that optimizes
process manufacturing – for energy, chemicals, engineering and
construction, and other industries that manufacture and produce
products from a chemical process. With integrated aspenONE
solutions, process manufacturers can implement best practices for
optimizing their engineering, manufacturing and supply chain
operations. As a result, AspenTech customers are better able to
increase capacity, improve margins, reduce costs and become more
energy efficient. To see how the world’s leading process
manufacturers rely on AspenTech to achieve their operational
excellence goals, visit www.aspentech.com.
Forward-Looking Statements
The third 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 increase usage and product
adoption of aspenONE offerings, and failure to continue to provide
innovative, market-leading solutions; demand for, or usage of,
aspenONE software declines for any reason, including declines due
to adverse changes in the process industries; unfavorable economic
and market conditions or a lessening demand in the market for
process optimization software; 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 obligation to update
forward-looking statements after the date of this press
release.
© 2016 Aspen Technology, Inc. AspenTech, aspenONE and the Aspen
leaf logo are registered trademarks of Aspen Technology, Inc. All
rights reserved. All other trademarks are property of their
respective owners.
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited in thousands, except per share data)
Three
Months Ended Twelve Months Ended June 30, June
30, 2016 2015 2016 2015
Revenue: Subscription and software $ 106,701 $ 105,638 $
440,408 $ 405,640 Services and other 6,979
8,548 31,936 34,761 Total
revenue 113,680 114,186 472,344
440,401
Cost of revenue: Subscription
and software 4,901 5,352 20,376 21,165 Services and other
6,830 7,269 28,235 28,411
Total cost of revenue 11,731 12,621
48,611 49,576 Gross profit
101,949 101,565 423,733
390,825
Operating expenses: Selling and
marketing 24,832 25,137 91,536 92,736 Research and development
16,754 17,036 67,152 69,584 General and administrative
11,391 12,486 53,664
48,713 Total operating expenses 52,977
54,659 212,352 211,033 Income
from operations 48,972 46,906 211,381 179,792 Interest income 198
98 441 487 Interest expense (868 ) (22 ) (1,212 ) (30 ) Other
income (expense), net 1,976 (1,132 ) 29
(778 ) Income before provision for income taxes
50,278 45,850 210,639 179,471 Provision for income taxes
16,952 15,044 70,688
61,064 Net income $ 33,326 $ 30,806 $ 139,951
$ 118,407
Net income per common share: Basic $
0.41 $ 0.36 $ 1.69 $ 1.34 Diluted $ 0.41 $ 0.36 $ 1.68 $ 1.33
Weighted average shares outstanding: Basic 81,282 85,056
82,892 88,398 Diluted 81,599 85,585 83,309 89,016
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited in
thousands, except per share data)
June 30, June 30,
2016 2015 ASSETS Current assets: Cash
and cash equivalents $ 318,336 $ 156,249 Short-term marketable
securities 3,006 59,197 Accounts receivable, net 20,476 30,721
Prepaid expenses and other current assets 13,948 10,752 Prepaid
income taxes 5,557 542 Current deferred tax assets —
6,169 Total current assets 361,323 263,630 Long-term
marketable securities — 3,047 Property, equipment and leasehold
improvements, net 15,825 18,039 Computer software development
costs, net 720 1,026 Goodwill 23,438 17,360 Intangible assets, net
5,000 147 Non-current deferred tax assets 12,236 10,444 Other
non-current assets 1,196 1,668 Total
assets $ 419,738 $ 315,361
LIABILITIES AND
STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $
3,559 $ 5,240 Accrued expenses and other current liabilities 36,105
38,483 Income taxes payable 439 1,775 Borrowings under credit
agreement 140,000 — Current deferred revenue 252,520
250,968 Total current liabilities 432,623 296,466
Non-current deferred revenue 29,558 37,919 Other non-current
liabilities 32,591 29,522 Commitments and contingencies Series D
redeemable convertible preferred stock, $0.10 par
value—Authorized—3,636 shares as of June 30, 2016 and 2015
Issued and outstanding—none as of June 30,
2016 and 2015
— — Stockholders’ deficit: Common stock, $0.10 par
value—Authorized—210,000,000 shares
Issued—102,031,960 shares at June 30, 2016
and 101,607,520 shares at June 30, 2015
Outstanding—80,177,950 shares at June 30,
2016 and 84,504,202 shares at June 30, 2015
10,203 10,161 Additional paid-in capital 659,287 641,883
Accumulated deficit (5,676 ) (145,627 ) Accumulated other
comprehensive income 2,651 6,470 Treasury stock, at cost—21,854,010
shares of common stock at June 30, 2016 and 17,103,318 shares at
June 30, 2015 (741,499 ) (561,433 ) Total
stockholders’ deficit (75,034 ) (48,546 ) Total
liabilities and stockholders' deficit $ 419,738 $ 315,361
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited in thousands)
Three
Months Ended Twelve Months Ended June 30, June
30, 2016 2015 2016 2015 Cash
flows from operating activities: Net income $ 33,326 $ 30,806 $
139,951 $ 118,407 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
1,542 1,600 6,061 6,216 Net foreign currency (gains) losses (5,087
) 1,163 (3,666 ) (1,552 ) Stock-based compensation 3,414 3,462
15,727 14,584 Deferred income taxes 1,804 (1,205 ) 2,499 20,112
Provision for bad debts 86 (42 ) 260 (513 ) Tax benefits from
stock-based compensation 330 15,181 2,208 37,024 Excess tax
benefits from stock-based compensation (330 ) (15,181 ) (2,208 )
(37,024 ) Other non-cash operating activities 64 218 321 1,619
Changes in assets and liabilities: Accounts receivable 869
(2,493 ) 9,382 8,028 Unbilled services (507 ) 41 — 526 Prepaid
expenses, prepaid income taxes, and other assets (9,084 ) (692 )
(7,681 ) 4,070 Installment receivables 39 (1,186 ) 1,575 (364 )
Accounts payable, accrued expenses, and other liabilities 1,094
7,131 (4,489 ) 5,933 Deferred revenue 17,289
14,765 (6,196 ) 14,919 Net cash
provided by operating activities 44,849 53,568
153,744 191,985
Cash flows
from investing activities: Purchases of marketable securities —
— — (50,065 ) Maturities of marketable securities 6,008 18,612
58,973 85,535 Purchases of property, equipment and leasehold
improvements (953 ) (1,731 ) (3,483 ) (7,645 ) Acquisition related
deposits 255,067 — — — Payments for business acquisitions (8,000 )
— (8,000 ) — Capitalized computer software development costs
(269 ) (44 ) (269 ) (359 ) Net cash provided
by investing activities 251,853 16,837
47,221 27,466
Cash flows from
financing activities: Exercises of stock options 1,062 2,616
3,924 4,662 Repurchases of common stock (75,476 ) (74,368 )
(178,604 ) (297,246 ) Payments of tax withholding obligations
related to restricted stock (1,076 ) (1,825 ) (4,480 ) (5,699 )
Excess tax benefits from stock-based compensation 330 15,181 2,208
37,024 Proceeds from credit agreement — — 140,000 — Payments of
credit agreement issuance costs (120 ) —
(1,707 ) — Net cash used in financing
activities (75,280 ) (58,396 ) (38,659 ) (261,259 ) Effect of
exchange rate changes on cash and cash equivalents 4
278 (219 ) (1,469 ) Increase (decrease)
in cash and cash equivalents 221,426 12,287 162,087 (43,277 ) Cash
and cash equivalents, beginning of period 96,910
143,962 156,249 199,526
Cash and cash equivalents, end of period $ 318,336 $
156,249 $ 318,336 $ 156,249
Supplemental disclosure of cash flow information: Income taxes
paid, net $ 17,416 $ 779 $ 69,028 $ 3,712 Interest paid 963 30 963
30
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESReconciliation of GAAP to Non-GAAP Results of
Operations and Cash FlowsThe following tables reflect a
reconciliation of selected Aspen Technology GAAP to Non-GAAPresults
of operations and cash flows.(Unaudited in thousands, except per
share data)
Three Months Ended June
30,
Twelve Months Ended June
30,
2016 2015 2016
2015
Total
expenses
GAAP total expenses (a) $ 64,708 $ 67,280 $ 260,963 $ 260,609 Less:
Stock-based compensation (b) (3,414 ) (3,462 ) (15,727 ) (14,584 )
Non-capitalized acquired technology (e) — — (250 ) (3,277 )
Amortization of purchased technology intangibles — (113 ) (147 )
(748 ) Acquisition bid costs (f) — — (5,213 ) —
Non-GAAP total expenses $ 61,294
$ 63,705 $ 239,626
$ 242,000
Income from
operations
GAAP income from operations $ 48,972 $ 46,906 $ 211,381 $ 179,792
Plus: Stock-based compensation (b) 3,414 3,462 15,727 14,584
Non-capitalized acquired technology (e) — — 250 3,277 Amortization
of purchased technology intangibles — 113 147 748 Acquisition bid
costs (f) — — 5,213 —
Non-GAAP income
from operations $ 52,386 $
50,481 $ 232,718 $
198,401
Net
income
GAAP net income $ 33,326 $ 30,806 $ 139,951 $ 118,407 Plus:
Stock-based compensation (b) 3,414 3,462 15,727 14,584
Non-capitalized acquired technology (e) — — 250 3,277 Amortization
of purchased technology intangibles — 113 147 748 Acquisition bid
costs (f) — — 8,649 — Less: Income tax effect on Non-GAAP items (c)
(1,229 ) (1,287 ) (8,918 ) (6,699 )
Non-GAAP net income $ 35,511 $
33,094 $ 155,806 $
130,317
Diluted income
per share
GAAP diluted income per share $ 0.41 $ 0.36 $ 1.68 $ 1.33 Plus:
Stock-based compensation (b) 0.04 0.04 0.19 0.16 Non-capitalized
acquired technology (e) — — — 0.04 Amortization of purchased
technology intangibles — — — 0.01 Acquisition bid costs (f) — —
0.10 — Less: Income tax effect on Non-GAAP items (c) (0.02 ) (0.02
) (0.11 ) (0.08 )
Non-GAAP diluted income
per share $ 0.44 $ 0.39
$ 1.87 $ 1.46
Shares used in computing Non-GAAP diluted income per share 81,599
85,585 83,309 89,016
ASPEN TECHNOLOGY, INC. AND
SUBSIDIARIESReconciliation of GAAP to Non-GAAP Results of
Operations and Cash FlowsThe following tables reflect a
reconciliation of selected Aspen Technology GAAP to Non-GAAPresults
of operations and cash flows.(Unaudited in thousands, except per
share data)
Three Months Ended June
30,
Twelve Months Ended June
30,
2016 2015 2016
2015
Free Cash
Flow
GAAP cash flow from operating activities $ 44,849 $ 53,568 $
153,744 $ 191,985 Purchase of property, equipment and
leasehold improvements (953 ) (1,731 ) (3,483 ) (7,645 )
Capitalized computer software development costs (269 ) (44 ) (269 )
(359 ) Non-capitalized acquired technology (e) — — 1,250 2,621
Litigation related payments 960 — 3,040 — Acquisition bid costs (f)
2,581 — 8,649 — Excess tax benefits from stock-based compensation
(d) 330 15,181 2,208 37,024
Free Cash
Flow $ 47,498 $ 66,974
$ 165,139 $ 223,626
(a) GAAP total expenses
Three Months Ended June
30,
Twelve Months Ended June
30,
2016 2015 2016 2015 Total costs of
revenue $ 11,731 $ 12,621 $ 48,611 $ 49,576 Total operating
expenses 52,977 54,659 212,352
211,033 GAAP total expenses $ 64,708 $
67,280 $ 260,963 $ 260,609 (b)
Stock-based compensation expense was as follows:
Three Months Ended June
30,
Twelve Months Ended June
30,
2016 2015 2016 2015 Cost of services
and other $ 341 $ 337 $ 1,390 $ 1,351 Selling and marketing 804 774
4,351 3,056 Research and development 880 958 3,423 3,881 General
and administrative 1,389 1,393
6,563 6,296 Total stock-based compensation $
3,414 $ 3,462 $ 15,727 $ 14,584
(c) The income tax effect on non-GAAP items for the three and
twelve months ended June 30, 2016 and 2015 is calculated utilizing
the Company's estimated federal and state tax rate of 36%.
(d) Excess tax benefits from stock-based compensation are
included in non-GAAP cash flows from operating activities and free
cash flow to be consistent with the treatment of other tax
benefits. Refer to the Company's Form 10-K for the period ended
June 30, 2016 for additional details.
(e) During the year ended June 30, 2016,
we acquired certain technology for $0.3 million. At the time we
acquired the technology, the project did not meet the accounting
definition of having reached technological feasibility, and
therefore the cost of the acquired technology was expensed as a
research and development expense during the year ended June 30,
2016. During the year ended June 30, 2016, we have excluded the
payments of $1.3 million for the non-capitalized acquired
technology (including a $1 million final payment related to
non-capitalized acquired technology from fiscal year 2014) from
free cash flow to be consistent with the treatment of other
transactions where the acquired assets were capitalized. There were
no such activities for the three months ended June 30, 2016.
(f) During the twelve months ended June 30, 2016, we
incurred $8.6 million of operating expenses related to the bid to
acquire KBC Advanced Technologies plc., of which $3.4 million of
foreign exchange losses and fees were recognized as a component of
other income (expense), net. There were no such activities for the
three months ended June 30, 2016. During the three and twelve
months ended June 30, 2016, we excluded payments of $2.6 million
and $8.6 million, respectively, for the acquisition bid. Refer to
the Company's Form 10-K for the period ended June 30, 2016 for
additional details.
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version on businesswire.com: http://www.businesswire.com/news/home/20160811006111/en/
Media ContactAspenTechDavid Grip, +1
781-221-5273david.grip@aspentech.comorInvestor
ContactICRBrian Denyeau, +1
646-277-1251brian.denyeau@icrinc.com
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