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 2013, ended June 30, 2013.

Mark Fusco, Chief Executive Officer of AspenTech, said, “The fourth quarter completed another very strong year for AspenTech. The company outperformed on each of its key financial metrics during fiscal 2013, highlighted by 13% total license contract value growth, 43% free cash flow growth, and better than expected profitability. We are seeing continued customer interest in our aspenONE® subscription software offering, and believe we have a significant opportunity to increase the product penetration rate and usage levels among our large base of blue chip customers.”

Fourth Quarter and Fiscal Year 2013 and Recent Business Highlights

• The license portion of total contract value was $1.65 billion at the end of fiscal 2013, which increased 4.7% sequentially and 13.0% compared to the end of fiscal 2012.     
• Total contract value, including the value of bundled maintenance, was $1.9 billion at the end of fiscal 2013, which increased 5.5% sequentially and 15.1% compared to the end of fiscal 2012.
• 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 $338 million at the end of fiscal 2013, which increased 4.9% sequentially and 11.1% compared to the end of fiscal 2012.

Summary of Fourth Quarter Fiscal Year 2013 Financial Results

AspenTech’s total revenue of $83.3 million increased 30.1% from $64.0 million in the fourth quarter of the prior year. 

• Subscription and software revenue was $65.2 million in the fourth quarter of fiscal 2013, an increase from $45.8 million in the fourth quarter of fiscal 2012. 
• Services & other revenue was $18.0 million in the fourth quarter of fiscal 2013, compared to $18.2 million in the fourth quarter of fiscal 2012. 

For the quarter ended June 30, 2013, AspenTech reported income from operations of $15.4 million, compared to a loss from operations of $3.6 million for the quarter ended June 30, 2012.  

Net income was $20.4 million for the quarter ended June 30, 2013, leading to net income per share of $0.21, compared to a net loss per share of ($0.06) in the same period last fiscal year.  

Non-GAAP income from operations, which adds back stock-based compensation expense, restructuring charges and amortization of intangibles associated with acquisitions, was $18.9 million for the fourth quarter of fiscal 2013, compared to a non-GAAP loss from operations of $0.9 million in the same period last fiscal year.  Non-GAAP net income was $22.7 million, or $0.24 per share, for the fourth quarter of fiscal 2013, compared to a non-GAAP net loss of $3.5 million, or ($0.04) per share, in the same period last fiscal year.  

For the fourth quarter of fiscal 2013, both GAAP and non-GAAP net income included a non-cash tax benefit of $9.8 million as a result of simplifying the company’s Canadian corporate structure.  

A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release. 

AspenTech had a cash and marketable securities balance of $224.8 million at June 30, 2013, an increase of $10.7 million from the end of the prior quarter.  During the fourth quarter, the company generated $33.9 million in cash flow from operations and $31.9 million in free cash flow after taking into consideration $2.1 million in capital expenditures and capitalized software.  

Summary of Fiscal Year 2013 Financial Results

AspenTech’s total revenue of $311.4 million increased 28% from $243.1 million for fiscal year 2012. 

• Subscription and software revenue was $239.7 million, an increase from $166.7 million for fiscal year 2012. 
• Services & other revenue was $71.7 million, compared to $76.4 million for fiscal year 2012. 

For the fiscal year ended June 30, 2013, AspenTech reported income from operations of $55.6 million, an improvement from a loss from operations of $15.0 million for fiscal year 2012.    

Net income was $45.3 million for the fiscal year ended June 30, 2013, leading to net income per diluted share of $0.47, compared to a net loss per basic and diluted share of ($0.15) for fiscal year 2012.  

Non-GAAP income from operations, which adds back stock-based compensation expense, restructuring charges and amortization of intangibles associated with acquisitions, was $70.9 million for fiscal year 2013, an improvement compared to a non-GAAP loss from operations of $2.8 million for fiscal year 2012.  Non-GAAP net income was $55.1 million, or $0.58 per share, for fiscal year 2013, an improvement compared to a non-GAAP net loss of $5.2 million, or ($0.06) per share, for fiscal year 2012.  A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release. 

For fiscal year 2013, both GAAP and non-GAAP net income included a non-cash tax benefit described above.

For the twelve months ended June 30, 2013, the company generated $146.6 million in cash flow from operations and $143.1 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, 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 15, 2013, at 4:30 p.m. (Eastern Time), to discuss the company's financial results for the fourth quarter and fiscal year 2013 as well as the company’s business outlook. 

The live dial-in number is (877) 245-0126 or (706) 634-5625, conference ID code 16733106. 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 16733106, through September 15, 2013.

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. 

© 2013 Aspen Technology, Inc. AspenTech, aspenONE, the Aspen leaf logo, and OPTIMIZE 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; 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.