<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Quarter ended December 31, 1997.
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number:
ASPEN TECHNOLOGY, INC.
(exact name of registrant as specified in its charter)
Massachusetts 04-2739697
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Ten Canal Park, Cambridge, Massachusetts, 02141
(Address of principal executive office and zip code)
Registrant's telephone number, including area code: (617) 949-1000
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
----- -----
As of December 31, 1997, there were 21,186,110 shares of the Registrant's common
stock (par value $.10 per share) outstanding.
<PAGE> 2
ASPEN TECHNOLOGY, INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets
as of December 31, 1997 and June 30, 1997 3
Consolidated Condensed Statements of
Income for the Three and Six Month Periods
Ended December 31, 1997 and 1996 4
Consolidated Condensed Statements of Cash Flows
for the Six Month Periods Ended
December 31, 1997 and 1996 5
Notes to Consolidated Condensed Financial Statements 6 - 9
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 10 - 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
2
<PAGE> 3
<TABLE>
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited and in thousands)
<CAPTION>
12/31/97 6/30/97
-------- -------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 15,524 $ 16,091
Short-term investments 13,154 15,843
Accounts receivable, net 65,200 56,624
Current portion of long-term
installments receivable, net 20,592 19,063
Prepaid expenses and other current assets 9,477 7,403
-------- --------
Total current assets 123,947 115,024
Long-term installments receivable, net 33,243 30,963
Equipment and leasehold
improvements, at cost 57,891 47,338
Accumulated depreciation (24,711) (19,904)
-------- --------
33,180 27,434
Computer software development
costs, net 4,529 3,058
Intangible assets, net 11,605 12,768
Other assets 3,413 3,017
-------- --------
$209,917 $192,264
======== ========
CURRENT LIABILITIES:
Current portion of long-term debt $ 290 $ 288
Accounts payable and accrued expenses 23,321 23,284
Unearned revenue 4,738 4,294
Deferred revenue 16,440 14,372
Deferred income taxes 2,725 1,775
-------- --------
Total current liabilities 47,514 44,013
Long-term debt, less current maturities 1,624 462
Deferred revenue, less current portion 10,612 9,441
Other liabilities 948 942
Deferred income taxes 8,088 5,965
STOCKHOLDERS' EQUITY:
Common stock 2,090 2,036
Additional paid-in capital 131,527 127,578
Retained earnings 8,283 2,588
Cumulative translation adjustment (283) (255)
Unrealized gain (loss) on investments 15 (4)
Treasury stock, at cost (501) (502)
-------- --------
Total Stockholders' Equity 141,131 131,441
-------- --------
$209,917 $192,264
======== ========
</TABLE>
3
<PAGE> 4
<TABLE>
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(unaudited)
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31, December 31, December 31,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Software licenses $31,445 $23,928 53,228 $40,059
Maintenance and other services 25,028 20,273 47,532 39,010
------- ------- -------- -------
Total revenues 56,473 44,201 100,760 79,069
------- ------- -------- -------
EXPENSES:
Cost of software licenses 1,562 1,268 2,825 2,084
Cost of maintenance and other services 14,531 11,984 27,700 23,113
Selling and marketing 16,977 12,953 31,322 24,239
Research and development 9,596 7,141 19,027 14,105
General and administrative 4,540 3,959 8,703 7,680
Charge for in-process research and
development and one-time acquisition costs - 8,664 509 8,664
------- ------- -------- -------
Total costs and expenses 47,206 45,969 90,086 79,885
------- ------- -------- -------
Income (loss) from operations 9,267 (1,768) 10,674 (816)
Other expense, net (95) (88) (162) (110)
Interest income, net 1,277 1,236 2,656 2,581
------- ------- -------- -------
Income (loss) before provision for
income taxes 10,449 (620) 13,168 1,655
Provision for income taxes 3,762 1,341 4,741 2,206
------- ------- -------- -------
Net income (loss) $ 6,687 $(1,961) $ 8,427 $ (551)
======= ======= ======== =======
Diluted earnings per share $ 0.31 $ (0.10) $ 0.39 $ (0.03)
======= ======= ======== =======
Weighted average shares outstanding-diluted 21,909 19,529 21,767 19,387
======= ======= ======== =======
Basic earnings per share $ 0.32 $ (0.10) $ 0.41 $ (0.03)
======= ======= ======== =======
Weighted average shares outstanding-basic 20,644 19,529 20,499 19,387
======= ======= ======== =======
</TABLE>
4
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<TABLE>
ASPEN TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
<CAPTION>
SIX MONTHS ENDED
12/31/97 12/31/96
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 8,427 $ (551)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities (net of acquisition related activity disclosed below):
Depreciation and amortization 5,739 4,884
Charge for in-process research and development - 8,664
Deferred income taxes 3,073 -
(Increase) in accounts receivable (7,723) (6,096)
(Increase) in installments receivable (3,809) (149)
(Increase) in prepaid expenses
and other current assets (1,495) (1,737)
(Decrease) in accounts payable
and accrued expenses (2,584) (3,136)
Increase (decrease) in unearned revenue 862 (4,127)
Increase in deferred revenue 2,267 2,763
------- -------
Net cash provided by operating activities 4,757 515
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment and leasehold
improvements (7,975) (9,148)
Sale of investment securities 2,708 13,044
Increase in other long-term assets (268) (427)
Increase in computer software development costs (1,905) (854)
Increase (decrease) in other long-term liabilities 5 (2,289)
Cash used in the purchase of business, net of cash acquired (591) (5,307)
------- -------
Net cash used in investing activities (8,026) (4,981)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock under employee stock purchase plans 1,830 381
Exercise of stock options 1,698 1,381
Payments of long-term debt and capital lease obligations (798) (293)
------- -------
Net cash provided by financing activities 2,730 1,469
------- -------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH (28) 233
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS (567) (2,764)
CASH AND CASH EQUIVALENTS, beginning of period 16,091 9,005
------- -------
CASH AND CASH EQUIVALENTS, end of period $15,524 $ 6,241
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS RELATED TO ACQUISITIONS:
During the six months ended December 31, 1997, the Company
acquired certain companies in poolings-of-interests
transactions as described in Note 4
These acquisitions are summarized as follows-
Book value of assets acquired, excluding cash $ 3,717 $ -
Liabilities assumed 5,136 $ -
Book value of equity (1,419) $ -
------- -------
$ 3,717 $ -
======= =======
During the six months ended December 31, 1996, the Company
acquired certain companies in purchase transactions
These acquisitions are summarized as follows-
Fair value of assets acquired, excluding cash $ - $15,982
Issuance of common stock related to acquisitions $ - (6,496)
Payments in connection with the acquisitions, net of cash acquired $ - (5,307)
-------- -------
Liabilities assumed $ - $ 4,179
======== =======
</TABLE>
5
<PAGE> 6
ASPEN TECHNOLOGY, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(UNAUDITED)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying consolidated condensed
financial statements have been prepared in conformity with generally
accepted accounting principles and include all adjustments, consisting only
of normal recurring adjustments, necessary for a fair presentation. The
results of operations for the three and six months period ended December
31, 1997 are not necessarily indicative of the results to be expected for
the full year. It is suggested that these interim consolidated condensed
financial statements be read in conjunction with the audited consolidated
financial statements for the year ended June 30, 1997, which are contained
in the Company's Form 10-K, as previously filed with the Securities and
Exchange Commission.
2. ACCOUNTING POLICIES
(a) Revenue Recognition
The Company recognizes revenue from software licenses upon the shipment of
its products, pursuant to a signed noncancelable license agreement. In the
case of license renewals, revenue is recognized upon execution of the
renewal license agreement. The Company has no significant vendor
obligations or collectibility risk associated with its product sales. The
Company recognizes revenue from postcontract customer support ratably over
the period of the postcontract arrangement. The Company accounts for
insignificant vendor obligations by deferring a portion of the revenue and
recognizing it either ratably as the obligations are fulfilled or when the
related services are performed. If significant application development
services are performed in connection with the purchase of a license, the
license fees are recognized as the application development services are
performed.
Service revenues from fixed-price contracts are recognized on the
percentage-of-completion method, measured by the percentage of costs
(primarily labor) incurred to date as compared to the estimated total costs
(primarily labor) for each contract. When a loss is anticipated on a
contract, the full amount thereof is provided currently. Service revenues
from time and expense contracts and consulting and training revenue are
recognized as the related services are performed.
6
<PAGE> 7
Services that have been performed but for which billings have not been made
are recorded as unbilled services, and billings that have been recorded
before the services have been performed are recorded as unearned revenue in
the accompanying consolidated balance sheets.
Installments receivable represent the present value of future payments
related to the financing of noncancelable term license agreements that
provide for payment in installments over a one- to five-year period. A
portion of the revenue from each installment agreement is recognized as
interest income in the accompanying consolidated condensed statements of
income loss. The interest rates in effect for the three and six months
ended December 31, 1996 were 11% and 8.5% and for the three and six months
ended December 31, 1997 was 8.5%.
(b) Computer Software Development Costs
In compliance with Statement of Financial Accounting Standards (SFAS) No.
86, "Accounting for the Costs of Computer Software to be Sold, Leased or
Otherwise Marketed", certain computer software development costs are
capitalized in the accompanying consolidated condensed balance sheets.
Capitalization of computer software development costs begins upon the
establishment of technological feasibility and ends upon market
introduction. Amortization of capitalized computer software development
costs is included in cost of revenues and is provided on a
product-by-product basis at the greater of the amount computed using (a)
the ratio of current gross revenues for a product to the total of current
and anticipated future gross revenues or (b) the straight-line method over
the remaining estimated economic life of the product, not to exceed three
years. Total amortization expense charged to operations in the three and
six month periods ended December 31, 1997 were $266,000 and $434,000 as
compared to $203,000 and $460,000 for the three and six month periods ended
December 31, 1996.
(c) Net Income Per Share
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings Per Share (SFAS 128).
This Statement establishes standards for computing and presenting earnings
per share and applies to entities with publicly traded common stock or
potential common stock. SFAS 128 is effective for financial statements for
both interim and annual periods ending after December 15, 1997. Basic
earnings per share is calculated by dividing net income (loss) by the
weighted average number of common shares outstanding for the period.
Diluted earnings per share reflects the dilution of potentially dilutive
securities, primarily stock options, based on the treasury stock method. As
required, the Company has adopted SFAS 128 effective for the quarter ending
December 31, 1997 and has restated all prior periods.
7
<PAGE> 8
Basic and dilutive weighted average shares as required by SFAS No. 128 are as
follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31, December 31, December 31,
1997 1996 1997 1996
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Basic weighted average shares outstanding 20,644 19,529 20,499 19,387
Weighted average common equivalent shares 1,265 - 1,268 -
------ ------ ------ ------
Diluted weighted average shares outstanding 21,909 19,529 21,767 19,387
------ ------ ------ ------
</TABLE>
The following securities were not included in computing dilutive earnings per
share because their effect would be anti-dilutive:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31, December 31, December 31,
1997 1996 1997 1996
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Anti-dilutive common equivalent shares - 1,483 - 1,409
-- ----- -- -----
</TABLE>
(d) Investments
The Company accounts for its investments in accordance with SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities". Under SFAS
No. 115, securities purchased to be held for indefinite periods of time, and not
intended at the time of purchase to be held until maturity, are classified as
available-for-sale securities. Securities classified as available-for-sale are
required to be recorded at market value in the financial statements. Unrealized
gains and losses have been accounted for as a separate component of
stockholders' equity. Investments held as of December 31, 1997 consist of
$2,671,000 in money market accounts and $10,483,000 in bonds.
8
<PAGE> 9
3. SALE OF INSTALLMENTS RECEIVABLE
The Company sold, with limited recourse, certain of its installment
contracts to two financial institutions for approximately $17.4 million and
$27.0 million during the three and six month periods ended December 31,
1997. The financial institutions have partial recourse to the Company only
upon non-payment by the customer under the installments receivable. The
amount of recourse is determined pursuant to the provisions of the
Company's contracts with the financial institutions and varies depending
upon whether the customers under the installment contracts are foreign or
domestic entities. Collections of these receivables reduce the Company's
recourse obligations, as defined.
At December 31, 1997, the balance of the uncollected principal portion of
all contracts sold was $83.3 million. The Company's potential recourse
obligation related to these contracts is approximately $5.6 million. In
addition, the Company is obligated to pay additional costs to the financial
institutions in the event of default by the customer.
4. ACQUISITIONS
(a) Special Analysis and Simulation Technologies ("SAST")
On August 28, 1997, the Company acquired 100% of the outstanding shares of
common stock of SAST, a global leader in dynamic simulation and operator
training services and applications. The Company exchanged 288,330 shares of
its common stock valued at approximately $10.2 million and paid
approximately $841,000 in cash for all outstanding shares of SAST common
stock. The acquisition has been accounted for as a pooling of interests.
This transaction is immaterial to the Company's financial position and
results of operations, and accordingly the historical financial statements
have not been restated.
(b) NeuralWare, Inc.
On August 27, 1997 the Company acquired 100% of the outstanding shares of
common stock of NeuralWare, Inc., a leading provider of neural net
technology. The Company exchanged 26,502 shares of its common stock for all
outstanding shares of NeuralWare, Inc. common stock. The acquisition has
been accounted for as a pooling of interests. This transaction is
immaterial to the Company's financial position and results of operation,
and accordingly the historical financial statements have not been restated.
5. SHAREHOLDERS RIGHTS PLAN
On October 9, 1997, the Board of Directors voted to adopt a Shareholders
Rights Plan (the Plan). The Plan gives certain shareholders the right to
purchase additional shares, at a specified price, under certain
circumstances.
9
<PAGE> 10
ASPEN TECHNOLOGY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS
RESULTS OF OPERATIONS
Revenues are derived from software licenses and maintenance and other services.
Total revenues for the three and six months ended December 31, 1997 were $56.5
and $100.8 million respectively, an increase of 27.8% and 27.4% from $44.2 and
$79.1 million in the comparable periods of fiscal 1997. Software license
revenues represented 55.7% of total revenues for the three months ended December
31, 1997, as compared to 54.1% in the comparable period of fiscal 1997. Revenues
from software licenses for the three and six months ended December 31, 1997 were
$31.4 and $53.2 million respectively, an increase of 31.4% and 32.9% from $23.9
and $40.1 million in the comparable periods of fiscal 1997. The growth in
software license revenues was attributable to software license renewals covering
existing users, the expansion of existing customer relationships through
licenses covering additional users, additional software products, and, to a
lesser extent, to the addition of new customers.
Total revenues from customers outside the United States were $28.3 and $49.1
million or 50.2% and 48.7% of total revenues for the three and six months ended
December 31, 1997 respectively, as compared to $24.3 and $45.3 million or 55.0%
and 57.3% of total revenues for the comparable periods in fiscal year 1997. The
geographical mix of license revenues can vary from quarter to quarter; however
for fiscal year 1998, the overall mix of revenues from customers outside the
United States is expected to be relatively consistent with the prior year.
Revenues from maintenance and other services consists of consulting services,
post contract support on software licenses, training and sales of documentation.
Since the acquisitions of DMCC and Setpoint (January and February 1996), the
Company has continued to generate a significant amount of consulting revenues
from services for the analysis, design, and automation of process engineering
plants. As a result, revenues from maintenance and other services for the three
and six months ended December 31, 1997 was $25.0 and $47.5 million respectively,
an increase of 23.5% and 21.9% from $20.3 and $39.0 million in the comparable
periods in fiscal 1997. This increase reflects a continued focus during fiscal
year 1998 on providing high value added consulting and training services to
existing customers.
Neither the Company's joint venture and similar activities, nor any discounting
or similar activities has historically had a material effect on the Company's
revenues.
10
<PAGE> 11
Cost of software licenses consists of royalties, amortization of previously
capitalized software costs, costs related to the delivery of software (including
disk duplication and third party software costs), printing of manuals and
packaging. Cost of software licenses for the three and six months ended December
31, 1997 was $1.6 and $2.8 million respectively, an increase of 23.2% and 35.6%
from $1.3 and $2.1 million in the comparable periods of fiscal 1997. Cost of
software licenses as a percentage of revenues from software licenses was 5.0%
and 5.3% for the three and six months ended December 31, 1997 as compared to
5.3%and 5.2% for the three and six months ended December 31, 1996. The increase
in costs is primarily due to the increase in software license revenues.
Cost of maintenance and other services consists of the cost of execution of
application consulting services, technical support expenses, the cost of
training services and the cost of manuals sold separately. Cost of maintenance
and other services for the three and six months ended December 31, 1997 was
$14.5 and $27.7 million respectively, an increase of 21.3% and 19.9% from $12.0
and $23.1 million in the comparable periods in fiscal year 1997. Cost of
maintenance and other services as a percentage of services revenue was 58.1% and
58.3% in the three and six months ended December 31, 1997 and 59.1% and 59.3% in
the comparable period of fiscal year 1997. This percentage decrease reflected
improved efficiency in the execution of the implementation services projects.
Selling and marketing expenses for the three and six months ended December 31,
1997 were $17.0 and $31.3 million, an increase of 31.1% and 29.2% from $13.0 and
$24.2 million in the comparable periods in fiscal year 1997. As a percentage of
revenues, selling and marketing expenses were 30.1% and 31.1% respectively for
the three and six months ended December 31, 1997 as compared to 29.3% and 30.7%
for the comparable periods in fiscal 1997. The Company continues to invest in
sales personnel and regional sales offices to improve the Company's geographic
proximity to its customers, to maximize the penetration of existing accounts and
to add new customers.
Research and development expenses consist primarily of personnel and outside
consultancy costs required to conduct the Company's product development efforts.
Capitalized research and development costs are amortized over three years.
Research and development expenses during the three and six months ended December
31, 1997 were $9.6 and $19.0 million respectively, an increase of 34.4% and
34.9% from $7.1 and $14.1 million in the comparable periods of fiscal 1997. The
increase in costs reflects continued investment in the development of the
Company's core modeling products and a common software architecture encompassing
the Company's expanded family of software products. The Company capitalized 9.5%
of its total research and development costs during the three months ended
December 31, 1997 as compared to 7.1% in the comparable period of fiscal year
1997.
General and administrative expenses consist primarily of salaries of
administrative, executive, financial and legal personnel, outside professional
fees, and amortization of certain intangibles. General and administrative
expenses for the three and six months ended December 31, 1997 were $4.5 and $8.7
million, an increase of 14.7% and 13.3% from $4.0 and $7.7 million in the
comparable periods of fiscal year 1997. The dollar increase principally
reflected the growth in the scale and scope of the Company's operations.
11
<PAGE> 12
Interest income is generated from the sale of software pursuant to installment
contracts for off-line modeling software and the investment of excess cash in
short-term and long-term investments. Under these contracts, the Company offers
customers the option to make annual payments for its term licenses instead of a
single license fee payment at the beginning of the license term. A substantial
majority of the off-line modeling customers elect to license these products
through installment contracts. The Company believes this election is made
principally because the customers prefer to pay for the Company's off-line
modeling products out of their operating budgets, rather than out of their
capital budgets. Included in the annual payments is an implicit interest charge
based upon the interest rate established by the Company at the time of the
license. The Company sells a portion of the installment contracts to unrelated
financial institutions. The interest earned by the Company on the installment
contract portfolio in any one year is the result of the implicit interest
established by the Company on installment contracts and the size of the contract
portfolio. Interest income was $1.3 and $2.7 million for the three and six
months ended December 31, 1997 as comparable to $1.3 and $2.7 million for the
comparable periods in fiscal 1997.
Interest expense is generated from interest charged on the Company's bank line
of credit, subordinated notes payable and capital lease obligations. Interest
expense for the three and six months ended December 31, 1997 was $0.05 and $0.1
million as compared to $0.03 and $0.1 million in the comparable periods of
fiscal year 1997.
The effective tax rate decreased for the three and six months ended December 31,
1997 to 36.0% of pretax income from 38.0% for the comparable periods of fiscal
year 1997. This decrease is primarily due to utilization of various tax credits
and carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended December 31, 1997, the Company's cash and cash
equivalents balance decreased by $0.6 million. Operations provided $4.8 million
of cash during this period primarily related to net income offset in part by
increases in accounts and installments receivable and decreases in accounts
payable and accrued expenses.
In recent years, the Company has had arrangements to sell long-term contracts to
two financial institutions, General Electric Capital Corporation ("GECC") and
Sanwa Business Credit Corporation (SBCC"). During the six months ended December
31, 1997, installment contracts increased to $53.8 million, net of $27.0 million
of installment contracts sold to GECC and SBCC. The Company's arrangements with
the two financial institutions provide for the sale of installment contracts up
to certain limits and with certain recourse obligations. At December 31, 1997,
the balance of the uncollected principal portion of the contracts sold to these
two financial institutions was $83.3 million, for which the Company has a
partial recourse obligation of approximately $5.6 million. The availability
under these arrangements will increase as the financial institutions receive
payment on installment contracts previously sold.
12
<PAGE> 13
The Company maintains a $30.0 million bank line of credit, expiring December 31,
1998, that provides for borrowings of specified percentages of eligible accounts
receivable and eligible current installment contracts. Advances under the line
of credit bear interest at a rate equal to the bank's prime rate (8.5% at
December 31, 1997) plus a specified margin or, at the Company's option, a rate
equal to a defined LIBOR (5.7% at December 31, 1997) plus a specified margin.
The line of credit agreement requires the Company to provide the bank with
certain periodic financial reports and to comply with certain financial tests,
including maintenance of minimum levels of consolidated net income before taxes
and of the ratio of current assets to current liabilities.
Management has initiated a Company-wide program to prepare the Company's
computer systems and applications as well as the Company's product offerings for
the year 2000. The Company expects to incur internal staff costs as well as
consulting and other expenses related to system enhancements for the year 2000.
A significant number of the Company's product offerings are currently year 2000
compliant. The Company believes the total costs to be incurred for all year 2000
related projects will not have a material impact on the future results from
operations.
13
<PAGE> 14
ASPEN TECHNOLOGY, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending material proceedings.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
14
<PAGE> 15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASPEN TECHNOLOGY, INC.
Date: February 12, 1998 by: /s/ Mary A. Palermo
----------------------------------
Mary A. Palermo
Executive Vice President
Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1997 INCLUDED IN THE COMPANY'S
FORM 10-K FOR SUCH PERIOD AND THE CONDENSED FINANCIAL STATEMENTS AS OF DECEMBER
31, 1997 INCLUDED IN THE COMPANY'S FORM 10-Q FOR SUCH PERIOD AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 15,524
<SECURITIES> 13,154
<RECEIVABLES> 65,200
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 123,947
<PP&E> 57,891
<DEPRECIATION> (24,711)
<TOTAL-ASSETS> 209,917
<CURRENT-LIABILITIES> 47,514
<BONDS> 0
0
0
<COMMON> 2,090
<OTHER-SE> 139,041
<TOTAL-LIABILITY-AND-EQUITY> 209,917
<SALES> 31,445
<TOTAL-REVENUES> 56,473
<CGS> 1,562
<TOTAL-COSTS> 16,093
<OTHER-EXPENSES> 9,596
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
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