Aspen Technology Announces Financial Results for the Fourth Quarter and Fiscal Year 2008

Files Annual Report on Form 10-K for Fiscal Year 2008
BURLINGTON, Mass.--(Business Wire)--
Aspen Technology, Inc. (OTC: AZPN.PK), a leading provider of software and
services to the process industries, today announced financial results for the
fourth quarter and fiscal year 2008, ended June 30, 2008.

Mark Fusco, Chief Executive Officer of AspenTech, said "The company delivered a
strong operational performance in fiscal 2008, highlighted by annual license
bookings growth of over 15% and record cash flows from operations." Fusco added,
"We are pleased to achieve another milestone related to bringing the company`s
financial statements current. We have now completed our first audit process and
Annual Report on Form 10-K with KPMG, and we are executing against plans to
finish our fiscal 2009 reports as quickly as possible."

Income Statement for Fourth Quarter of Fiscal 2008

For the fourth quarter ended June 30, 2008, AspenTech reported total revenue of
$98.3 million, a decrease of 3% compared to the fourth quarter of fiscal 2007.
Within total revenue, license revenue was $59.7 million, a decrease of 12%, and
services revenue was $38.6 million, an increase of 15%, both compared to the
fourth quarter of fiscal 2007.

During the fourth quarter of fiscal 2008, the company entered into three
contracts with a net present value totaling $12.5 million that did not meet all
of the criteria for revenue recognition as of the end of the quarter. There was
not a comparable impact on the prior year period. As previously disclosed,
license bookings were approximately $70 million in the fourth quarter of fiscal
2008, up slightly compared to the fourth quarter of fiscal 2007.

AspenTech's income from operations, determined in accordance with generally
accepted accounting principles (GAAP), was $21.1 million in the fourth quarter
of fiscal 2008, representing an operating margin of 21.4%, compared to $24.0
million in the fourth quarter of fiscal 2007.

Net income was $20.7 million for the fourth quarter of fiscal 2008, compared to
$17.9 million for the fourth quarter of fiscal 2007. Diluted income per share
attributable to common shareholders was $0.22 for the quarter ended June 30,
2008, three cents better than the fourth quarter of fiscal 2007.

Income Statement for the Full Year Fiscal 2008

For the fiscal year ended June 30, 2008, AspenTech reported total revenue of
$311.6 million, a decrease of 9% compared to fiscal 2007. Within total revenue,
license revenue was $168.4 million, a decrease of 16%, and services revenue was
$143.2 million, an increase of 1%, both compared to the full fiscal year 2007.

During fiscal 2008, the company entered into seven contracts with a net present
value totaling approximately $57.5 million that did not meet all of the criteria
for revenue recognition as of the end of the fiscal year. There was no
comparable impact on the prior fiscal year period.

AspenTech's income from operations, determined in accordance with generally
accepted accounting principles (GAAP), was $18.6 million for fiscal 2008,
representing an operating margin of 6%, compared to $55.4 million for fiscal
2007.

Net income was $24.9 million for fiscal 2008, compared to $45.5 million for
fiscal 2007. Diluted income per share attributable to common shareholders was
$0.27 for fiscal 2008, compared to $0.50 for fiscal 2007.

Balance Sheet and Cash Flow

The company`s cash balance at the end of fiscal 2008 was approximately $134
million, an increase compared to approximately $132 million at the end of fiscal
2007. Cash flow from operations was $70.8 million during fiscal 2008, offset by
cash used in investing activities of $9.8 million and cash used in financing
activities of $59.8 million.

Total company-owned accounts and installments receivable balances were $221.2
million at the end of fiscal 2008, an increase of $131.1 million from $90.0
million at the end of fiscal 2007. The company`s secured borrowings balance at
the end of fiscal 2008 was $147.2 million, a reduction of $58.9 million from
$206.1 million at the end of fiscal 2007.

The company`s total deferred revenue balance at June 30, 2008, was $106.9
million, an increase of 59% compared to the end of fiscal 2007.

Conference Call and Webcast

AspenTech will host a conference call and webcast tomorrow, July 1, 2009, at
8:30 am (Eastern Time) to discuss the Company's fourth quarter 2008 financial
results and related corporate and financial matters. The live dial-in number is
(877) 239-3024, conference ID code 17469720. 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 17469720 through July 8, 2009.

About AspenTech

AspenTech is a leading supplier of software that optimizes process manufacturing
- including oil and gas, petroleum, chemicals, pharmaceuticals 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.

© 2009 Aspen Technology, Inc. AspenTech, aspenONE, the Aspen leaf logo and the 7
Best Practices of Engineering Excellence are trademarks of Aspen Technology,
Inc. All rights reserved. All other trademarks are property of their respective
owners.

Forward Looking Statements

This press release may 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: fluctuations
in AspenTech`s quarterly revenues, operating results and cash flow; difficulty
in predicting quarterly revenue levels and operating results due to AspenTech`s
lengthy sales cycle; economic downturn in the highly cyclical oil and gas,
chemicals, petrochemicals and petroleum industries from which AspenTech derives
a majority of its total revenues; substantial damages and expenses AspenTech
might incur as the result of securities and derivative litigation and government
investigations based on AspenTech`s restatement of its consolidated financial
statements due to AspenTech`s prior software accounting practices; a
determination that AspenTech has failed to comply with its existing consent
decree with the Federal Trade Commission; failure to remedy effectively material
weaknesses identified by AspenTech in its internal control over financial
reporting; risks associated with the delisting of AspenTech`s common stock from
The NASDAQ Stock Market; failure to manage international operations effectively,
or failure to address the challenges associated with transacting business
internationally; competition from software offered by current competitors and
new market entrants, as well as from internally developed solutions; failure to
develop new software products or enhance existing products and services; new
accounting standards or interpretations of existing accounting standards that
could adversely affect AspenTech`s operating results; failure to develop or
maintain strategic alliance relationships; failure to raise capital when needed;
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.

ASPEN TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except per share data)

Three Months Ended Year Ended
June 30, 2008 June 30, 2007 2008 2007

Revenues:
Software licenses $ 59,688 $ 67,883 $ 168,404 $ 199,761
Service and other 38,624 33,487 143,209 141,268
Total revenues 98,312 101,370 311,613 341,029
Cost of revenues:
Cost of software licenses 4,675 4,159 15,916 14,588
Cost of service and other 17,253 17,862 69,077 72,426
Amortization of technology related intangible assets - 1,340 - 6,546
Total cost of revenues 21,928 23,361 84,993 93,560
Gross profit 76,384 78,009 226,620 247,469
Operating costs:
Selling and marketing 28,736 26,554 99,682 93,387
Research and development 11,326 11,364 45,179 42,703
General and administrative 15,232 14,983 54,565 51,010
Restructuring charges (5 ) 1,002 8,623 4,634
(Gain) loss on sales and disposals of assets 21 98 (66 ) 332
Total operating costs 55,310 54,001 207,983 192,066
Income from operations 21,074 24,008 18,637 55,403
Interest income 5,702 5,802 23,784 21,909
Interest expense (4,045 ) (4,618 ) (17,783 ) (18,613 )
Other income (expense), net (1,460 ) (3,605 ) 3,386 (734 )
Income before provision for taxes 21,271 21,587 28,024 57,965
Provision for income taxes (613 ) (3,650 ) (3,078 ) (12,447 )
Net income 20,658 17,937 24,946 45,518
Accretion of preferred stock discount and dividends - - - (7,290 )
Net income (loss) applicable to common stockholders $ 20,658 $ 17,937 $ 24,946 $ 38,228
Earnings (loss) per common share:
Basic $ 0.23 $ 0.20 $ 0.28 $ 0.54
Diluted $ 0.22 $ 0.19 $ 0.27 $ 0.50
Weighted average shares outstanding:
Basic 89,998 88,472 89,640 70,879
Diluted 94,162 93,299 94,092 91,869

Supplemental information -
Stock-based compensation costs included in the Statements of Operations

Quarters Ended Years Ended
June 30, June 30,
Recorded as expense: 2008 2007 2008 2007
Cost of service and other $ 221 $ 408 $ 1,254 $ 1,522
Selling and marketing 657 859 3,345 3,424
Research and development 223 609 1,411 1,915
General and administrative 1,129 1,207 4,590 4,201
Total stock-based compensation $ 2,230 $ 3,083 $ 10,600 $ 11,062

ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)

June 30,
2008 2007
(In Thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents $ 134,048 $ 132,267
Accounts receivable, net 86,870 47,200
Current portion of installments receivable, net 51,762 14,214
Current portion of collateralized receivables, net 43,186 104,473
Unbilled services 3,459 10,641
Prepaid expenses and other current assets 11,710 10,163
Deferred tax assets 2,305 -
Total current assets 333,340 318,958
Non-current installments receivable, net 82,528 28,613
Non-current collateralized receivables, net 92,163 140,603
Property, equipment and leasehold improvements, net 11,799 6,535
Computer software development costs 5,443 11,104
Other intangible assets, net 615 585
Goodwill 19,019 19,112
Other non-current assets 9,719 3,387
554,626 528,897

LIABILITIES AND STOCKHOLDERS` EQUITY
Current liabilities:
Current portion of secured borrowing 47,816 101,826
Current portion of term debt - 193
Accounts payable 6,586 5,833
Accrued expenses 61,746 67,068
Income taxes payable 13,877 28,674
Deferred revenue 86,551 62,345
Current deferred tax liability 457 -
Total current liabilities 217,033 265,939
Long-term secured borrowing 99,391 104,324
Deferred revenue 20,354 4,761
Other non-current liabilities 45,035 16,667
Commitments and contingencies (Notes 11, 12 and 13)
Series D redeemable convertible preferred stock, $0.10 par value-
Authorized- 3,636 shares in 2008 and 2007
Issued and outstanding- none in 2008 or 2007 - -
Stockholders` equity:
Common stock, $0.10 par value- Authorized-120,000,000 shares
Issued- 90,235,526 shares in 2008 and 89,133,494 shares in 2007
Outstanding- 90,002,062 shares in 2008 and 88,900,030 shares in 2007 9,024 8,913
Additional paid-in capital 493,088 480,671
Accumulated deficit (336,517 ) (361,463 )
Accumulated other comprehensive income 7,731 9,598
Treasury stock, at cost-233,464 shares of common stock in 2008 and 2007 (513 ) (513 )
Total stockholders` equity 172,813 137,206
$ 554,626 $ 528,897

Media Contact:
AspenTech
David Grip, +1-781-221-5273
david.grip@aspentech.com
or
Investor Contact:
ICR
Kori Doherty, +1-617-956-6730
kdoherty@icrinc.com

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