Event
Summary
Aspen Technology recently reported financial results for its fourth quarter
and fiscal year ended June 30, 2000. The vendor logged a dramatic 88%
increase in license revenue in the fourth quarter, a strong indication
that its solutions for manufacturing enterprise optimization and extended
supply chain management are gaining ground among users in the process
industries. Total revenues for the fourth quarter grew 44 percent to $83.4
million from $57.8 million in the same period ending June 30, 1999. Excluding
one-time acquisition costs, the company reported net income for the quarter
of $5.7 million, or $0.18 per diluted share, compared with a net loss
of $3.4 million, or $0.12 per diluted share for the same period last year,
excluding restructuring and other charges. AspenTech restated its fiscal
1999 and 2000 results to reflect the acquisition of Petrolsoft Corporation,
which was completed during the fourth quarter and treated as a pooling-of-interests.
Figure
1.
"We
are pleased to have exceeded our goals for both growth and profitability
in the fourth quarter and fiscal year," said Larry Evans, Chairman & CEO
of AspenTech. "The rapid growth in our license revenues continued to be
driven by strong demand for our integrated Enterprise Optimization and
supply chain solutions, as process manufacturers increasingly invest in
technology to improve their manufacturing productivity and optimize their
supply chains. We are unique in the industry as the only company with
a proven integrated solution, and our domain expertise and process knowledge
enable us to deploy mission-critical solutions that other vendors cannot
provide."
Market
Impact
AspenTech's success comes in part due to its unique vision for automating
the enterprise. Where ERP vendors are busy linking manufacturing-centric
applications to higher corporate functions like financials and human resources,
Aspen has worked in the other direction, integrating supply chain optimization
for process manufacturing to "lower" functions such as process control
and operations. Aspen is alone among large vendors in its ability to do
this, as none of the others have Aspen's process manufacturing knowledge
base and expertise. Aspen was founded by chemical engineers, hires engineers
as developers and business consultants, and produces applications that
appeal to engineers.
User
Recommendations
Clearly, Aspen Technology should occupy a prominent role in enterprise
software selections for process manufacturers, especially those who produce
chemicals, pharmaceuticals, and refined oil products. For supply chain
management, Aspen is the only vendor that can offer deep functionality
for the process industries with the added capability to deliver process
simulation and control functionality and integrate them. The main caveat
is that most of Aspen's SCM applications are essentially toolkits in which
desired features can be developed, not packaged solutions that can merely
be configured. Thus, experienced resources are a must for implementations.