Technology Posts First-Quarter Loss but Beats Estimates
S. McVey - October
recently announced a shortfall in earnings for the period ended September 30,
1999, although it exceeded analysts' expectations. Total revenues for the company
were $53 million, of which $21.5 million were derived from software licenses
and the remainder from services and support. Net loss for the quarter was $4.1
million, or $0.11 per share. CEO Larry Evans attributes the loss to industry
pressures and consolidation within its target markets.
in TEC's note, "Aspentech:
Searching for Definition in 2000", Aspen's restructuring efforts continue
to weigh on its sales organization, resulting in poor revenue growth in 1Q00.
Revenues were slightly better than originally expected, however, and the company's
SCM (supply chain management) business is owed much of the credit. In addition,
operating expenses dropped sharply due to restructuring efforts that involved
cutting its staff by about 12 percent, closing offices, and rationalizing non-core
products. The first quarter following a fiscal year-end is traditionally the
weakest quarter for Aspen. Provided that it achieves further customer support
for its supply chain management applications and that it can effectively manage
its leaner organization, Aspen should be able to avoid serious losses over the
next several quarters.
Users in the
process industries should capitalize on the vendor's eagerness to win new contracts
by asking for price breaks on license fees and/or maintenance. Aspen MIMI should
still be a strong contender for companies in chemicals, petroleum, pharmaceuticals,
or semiconductor seeking to augment an existing DCS (Distributed Control System)
or SCADA (Supervisory Control and Data Acquisition) system with SCM, but who
have not yet implemented ERP. For companies in complex manufacturing industries
(high tech, semiconductor), MIMI may be a reasonable fit if complex business
processes require custom modeling.