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 2012, ended June 30, 2012.

Mark Fusco, Chief Executive Officer of AspenTech, said, “The fourth quarter was a strong finish to a great year for AspenTech.  The company exceeded its fiscal 2012 guidance for each of its key financial metrics, including growth in total license contract value, free cash flow and expense management.  Our aspenONE® subscription software offering continues to gain traction in the market and we have a significant opportunity to drive increased product adoption and usage levels over the long term.”

Fourth Quarter and Fiscal Year 2012 and Recent Business Highlights

• The license portion of total contract value was $1.46 billion at the end of fiscal 2012, which increased 4.6% sequentially and 14.5% compared to the end of fiscal 2011.     

• Total contract value, including the value of bundled maintenance, was $1.68 billion at the end of fiscal 2012, which increased 5.4% sequentially and 17.7% compared to the end of fiscal 2011.

• Annual spend, which the company defines as the annualized value of all term license and maintenance revenue contracts at the end of the quarter, was approximately $304 million at the end of fiscal 2012, which increased 4.4% sequentially and 12.7% compared to the end of fiscal 2011.

Summary of Fourth Quarter Fiscal Year 2012 Financial Results

AspenTech’s total revenue of $64.0 million increased 22% from $52.6 million in the fourth quarter of the prior year. 

• Subscription and software revenue was $45.8 million in the fourth quarter of fiscal 2012, an increase from $28.7 million in the fourth quarter of fiscal 2011. 
• Services & other revenue was $18.2 million in the fourth quarter of fiscal 2012, compared to $23.9 million in the fourth quarter of fiscal 2011. 

For the quarter ended June 30, 2012, AspenTech reported a loss from operations of $3.6 million, compared to a loss from operations of $18.3 million for the quarter ended June 30, 2011. 

Net loss was $5.4 million for the quarter ended June 30, 2012, leading to a net loss per share of ($0.06), compared to a net income per share of $0.43 in the same period last fiscal year.  The company’s net income for the fourth quarter of fiscal year 2011 was positively impacted by a $57.3 million net tax benefit primarily related to a valuation reversal against our deferred tax assets. 

Non-GAAP loss from operations, which adds back stock-based compensation expense, restructuring charges and amortization of intangibles associated with acquisitions, was $0.9 million for the fourth quarter of fiscal 2012, compared to a non-GAAP loss from operations of $16.1 million in the same period last fiscal year.  Non-GAAP net loss was $3.5 million, or ($0.04) per share, for the fourth quarter of fiscal 2012, compared to a non-GAAP net loss of $19.0 million, or ($0.20) 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 $165.2 million at June 30, 2012, a decrease of $17.3 million from the end of the prior quarter after using $14.0 million in cash to repurchase shares of common stock and reducing secured borrowings by $22.6 million.  During the fourth quarter, the company generated $21.7 million in cash flow from operations and $18.6 million in free cash flow after taking into consideration $3.1 million in capital expenditures and capitalized software.  For the twelve months ended June 30, 2012, the company generated $104.6 million in cash flow from operations and $100 million in free cash flow after taking into consideration $4.8 million in capitalized expenditures and capitalized software.      

Summary of Fiscal Year 2012 Financial Results

AspenTech’s total revenue of $243.1 million increased 23% from $198.2 million for fiscal year 2011. 

• Subscription and software revenue was $166.7 million, an increase from $103.7 million for fiscal year 2011. 
• Services & other revenue was $76.4 million, compared to $94.5 million for fiscal year 2011. 

For the fiscal year ended June 30, 2012, AspenTech reported a loss from operations of $15.0 million, an improvement from a loss from operations of $54.6 million for fiscal year 2011.   

Net loss was $13.8 million for the fiscal year ended June 30, 2012, leading to net loss per diluted share of ($0.15), compared to net income per basic and diluted share of $0.11 for fiscal year 2011.  The company’s net income for fiscal year 2011 was positively impacted by a $54 million net tax benefit primarily related to a valuation reversal against our deferred tax assets. 

Non-GAAP loss from operations, which adds back stock-based compensation expense, restructuring charges and amortization of intangibles associated with acquisitions, was $2.8 million for fiscal year 2012, an improvement compared to a non-GAAP loss from operations of $45.1 million for fiscal year 2011.  Non-GAAP net loss was $5.2 million, or ($0.06) per share, for fiscal year 2012, an improvement compared to a non-GAAP net loss of $43.5 million, or ($0.45) per share, for fiscal year 2011.  A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release.

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, for the next few years, a number of AspenTech’s performance indicators based on GAAP, including revenue, gross profit, operating income (loss) and net income (loss), will be of limited value in assessing AspenTech’s performance, growth and financial condition. Accordingly, management instead is focusing on certain 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 Webcast

AspenTech will host a conference call and webcast today, August 21, 2012, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the fourth quarter and fiscal year 2012 as well as the company’s business outlook. 

The live dial-in number is (877) 245-0126, conference ID code 15108160. 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 15108160, through August 28, 2012.

About AspenTech

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. AspenTech’s aspenONE software and related services have been developed specifically for companies in the process industries, including the energy, chemicals and engineering and construction industries. Customers use AspenTech’s 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.

© 2012 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.

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.