LENDER BRIEFING – Q3 2011 November 22, 2011 1. Safe Harbor Statement 2 The Risk Factors contained in the Company’s latest annual report on file with the.
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LENDER BRIEFING – Q3 2011
November 22, 2011
1
2
Safe Harbor Statement
The Risk Factors contained in the Company’s latest annual report on file with the U.S.
Securities and Exchange Commission are incorporated herein by reference
Please treat all informationnot publicly disclosed as
Company Confidential
Company Confidential
©2011 Aspect Software, Inc. All rights reserved.
Meeting Agenda
3
Q3’11 Financial Performance
Investor Questions & Answers
Company Confidential
©2011 Aspect Software, Inc. All rights reserved.
Q3’11 in Review
4
Q3’10 Pro Forma Revenue was $129.9M Q3’11 revenue results were above Q3’10
Total revenue of $135.1M exceeded Q3’10 by $5.2M or 4%
Product revenue of $34.3M exceeded Q3’10 by $2.5M or 8% Americas exceeded Q3’10 by $3.5M or 23% LATAM exceeded Q3’10 by $0.6M or 25% EA was below Q3’10 by $0.3M or 4% APAC was below Q3’10 by $1.3M or 17%
Professional Services revenue of $25.1M exceeded Q3’10 by $1.8M or 8% Americas exceeded Q3’10 by $1.0M or 11% LATAM was below Q3’10 by $0.4M or 52% EA exceeded Q3’10 by $0.4M or 9% APAC exceeded Q3’10 by $0.2M or 15% MPS exceeded Q3’10 by $0.6M or 8%
Maintenance revenue of $75.7M exceeded Q3’10 by $0.9M or 1% Americas exceeded Q3’10 by $0.2M LATAM exceeded Q3’10 by $0.8M or 41% EA exceeded Q3’10 by $0.1M or 1% APAC was below Q3’10 by $0.2M or 4%
Pro Forma EBITDA of $45.9M (34% of revenue) exceeded prior year by $1.7M or 4%, primarily due to increased revenue, partially offset by increased operating costs.
Cash Collections were below Q3’10 Collected $122.3M vs. Q3’10 of $134.4M (9% below Q3’10) Ending cash balance of $137.3M vs. Q3’10 Pro Forma of $73.1M Free cash flow of $6.9M vs. Q3’10 of $25.5M
©2011 Aspect Software, Inc. All rights reserved.
Note: Q3’10 includes Corsidian on a Pro Forma basis for revenue and EBITDA.
Consolidated P&L – Q3’11 ($’s in millions)
5Company Confidential
©2011 Aspect Software, Inc. All rights reserved.
Q3'11 Q3'10 Q3'11 B/(W) Q3'10Actual Actual Amt %
Product Revenue 34.3$ 31.8$ 2.5$ 7.9%Services Revenue 25.0 23.3 1.8 7.7%Maintenance Revenue 75.7 74.8 0.9 1.2% Total Revenue1 135.1 129.9 5.2 4.0%
Product Gross Profit 26.5 23.5 3.0 12.6%Services Gross Profit 5.0 4.4 0.5 12.2%Maintenance Gross Profit 53.6 54.0 (0.3) (0.6%)Amortization of Intangibles (3.5) (3.7) 0.2 5.6% Total Gross Profit 81.6 78.2 3.4 4.4%
Product Gross Profit % 77.1% 73.8% 3.3 pts 4.4%Services Gross Profit % 19.9% 19.1% 0.8 pts 4.2%Maintenance Gross Profit % 70.9% 72.2% (1.3) pts (1.8%) Total Gross Profit % (w/o Amort) 63.0% 63.1% (0.1) pts (0.1%)
Operating Expenses:R&D 9.8 11.4 1.5 13.4%Sales & Marketing 23.0 21.1 (2.0) (9.3%)G&A 8.7 9.8 1.0 10.6%Other G&A2 7.3 6.6 (0.7) (10.1%)
Total Operating Expenses 48.9 48.9 (0.1) (0.1%)
Income from Operations 32.7$ 29.4$ 3.3$ 11.4%% of Total Revenue 24.2% 22.6% 1.6 pts 7.1%
Interest Expense 15.8 16.3 0.5 3.0%Other (Income) / Expense (0.2) 2.9 3.0 (105.7%) Income Before Taxes 17.1 10.2 6.9 67.2%Provision for Income Taxes 4.9 5.5 0.6 10.5% Net Income 12.2$ 4.7$ 7.4$ 157.4%
Consolidated & Pro Forma EBITDA:Operating Profit 32.7$ 29.4$ 3.3$ 11.4%Depreciation Expense 2.1 2.3 (0.1) (5.6%)Amortization Expense 11.2 11.1 0.2 1.6%Sponsor Management Fees 0.5 0.5 (0.0) (0.0%)IRS Audit - - - Legal Entity Rationalization 0.2 0.3 (0.1) (20.8%)SOX Compliance 0.1 0.1 (0.0) (33.3%)Debt Related Fees3 0.1 0.0 0.0 9.1%Foreign W/H Tax3 0.1 0.2 (0.1) (40.9%)Interest Income 0.1 0.0 0.0 143.9%Non Cash Compensation 0.2 0.2 (0.0) (19.8%)Consolidated EBITDA 47.3$ 44.1$ 3.2$ 7.3%
% of Total Revenue 35.0% 33.9% 1.1 pts 3.2%
Employee Profit Sharing (2.5) - (2.5) Legal Settlements 0.1 0.1 0.1 65.6%Ireland Transition costs - - - Restructuring (0.1) - (0.1) Deal Transaction Costs 1.0 - 1.0 Pro Forma EBITDA 45.9$ 44.2$ 1.7$ 3.9%
% of Total Revenue 34.0% 34.0% (0.0) pts (0.1%)
Note: Q3'10 includes Corsidian on a Pro Forma Basis. Corsidian COGS included in Product COGS and OPEX included in Sales & Marketing.1Pro Forma Revenue, excludes purchase accounting related to Quilogy & Corsidian acquisitions.2Q3'11 Bad Debt expense w as a credit of $0.6m compared to Q3'10 credit of $1.2m.3Included in Other G&A.
Investor Questions & Answers
Finance Appendix
Pro Forma EBITDA as a % of Revenue($’s in millions)
$127.5
$135.1 $135.1$129.9
$140.0
$122.9$130.1
$45.9$46.1 $44.2$46.8
$43.2$38.9
$50.9
34.0%35.4%
31.6%34.0%
36.4%33.9% 34.7%
$0
$25
$50
$75
$100
$125
$150
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'110%
10%
20%
30%
40%
50%
60%
Pro Forma Revenue Pro Forma EBITDA % of Revenue
8©2011 Aspect Software, Inc. All rights reserved.
Note: Q1’10 includes MPS/Quilogy pre-acquisition revenue of $0.6m. FY’10 and Q1-Q2’11 includes Corsidian pre-acquisition revenue.
Revenue by Type and Theatre($’s in millions)
9Company Confidential
©2011 Aspect Software, Inc. All rights reserved.
FY 2010 FY2011 Year-over-YearQ1'10 Q2'10 Q3'10 FY'10 YTD Q1'11 Q2'11 Q3'11 FY'11 YTD
ProductAMER 12.7$ 19.3$ 14.9$ 46.8$ 12.4$ 17.1$ 18.3$ 47.8$ 1.3$ 7% 3.5$ 23% 1.0$ 2%LATAM 1.6 3.1 2.5 7.2 1.8 2.1 3.1 7.0 0.9 44% 0.6 25% (0.2) (2%)EA 6.6 3.9 7.0 17.5 8.4 8.1 6.8 23.3 (1.4) (17%) (0.3) (4%) 5.8 33%APAC 4.9 3.6 7.3 15.9 4.8 5.6 6.1 16.4 0.5 9% (1.3) (17%) 0.5 3%
Total 25.8$ 29.9$ 31.7$ 87.4$ 27.4$ 32.9$ 34.2$ 94.5$ 1.4$ 4% 2.5$ 8% 7.1$ 8%
ServicesAMER 8.6$ 8.6$ 9.2$ 26.5$ 9.4$ 11.0$ 10.2$ 30.6$ (0.8)$ (7%) 1.0$ 11% 4.2$ 16%LATAM 0.7 1.3 0.7 2.7 0.6 0.4 0.3 1.3 (0.0) (13%) (0.4) (52%) (1.4) (51%)EA 4.0 3.9 4.1 12.1 4.1 4.1 4.5 12.7 0.4 10% 0.4 9% 0.6 5%APAC 1.4 1.4 1.4 4.2 1.3 1.5 1.6 4.4 0.2 12% 0.2 15% 0.2 4%
Total 14.8$ 15.1$ 15.5$ 45.4$ 15.3$ 17.0$ 16.7$ 49.0$ (0.3)$ (2%) 1.2$ 8% 3.6$ 8%
MaintenanceAMER 51.1$ 52.3$ 51.2$ 154.5$ 53.2$ 52.2$ 51.4$ 156.7$ (0.8)$ (2%) 0.2$ 0% 2.2$ 1%LATAM 1.8 2.6 1.9 6.3 2.7 2.7 2.7 8.1 (0.0) (1%) 0.8 41% 1.9 29%EA 18.2 17.2 16.9 52.3 17.1 17.3 17.0 51.4 (0.3) (2%) 0.1 1% (0.8) (2%)APAC 3.4 4.2 4.8 12.4 4.4 4.7 4.6 13.6 (0.0) (1%) (0.2) (4%) 1.2 10%
Total 74.5$ 76.2$ 74.8$ 225.5$ 77.3$ 76.9$ 75.7$ 229.9$ (1.2)$ (2%) 0.9$ 1% 4.4$ 2%
TotalAMER 72.4$ 80.1$ 75.3$ 227.8$ 74.9$ 80.3$ 80.0$ 235.1$ (0.3)$ (0%) 4.7$ 6% 7.3$ 3%LATAM 4.1 7.0 5.1 16.2 5.1 5.3 6.1 16.5 0.9 16% 1.0 20% 0.3 2%EA 28.8 25.0 28.0 81.8 29.6 29.5 28.2 87.4 (1.3) (4%) 0.2 1% 5.5 7%APAC 9.8 9.1 13.6 32.6 10.4 11.7 12.3 34.5 0.6 5% (1.3) (9%) 1.9 6%
S/T 115.1$ 121.3$ 122.0$ 358.3$ 120.0$ 126.7$ 126.6$ 373.4$ (0.1)$ (0%) 4.6$ 4% 15.1$ 4%
MPS 7.8 8.8 7.9 24.5 7.4 8.4 8.4 24.2 0.1 1% 0.6 7% (0.3) (1%)
Pro Forma Revenue 122.9$ 130.1$ 129.9$ 382.8$ 127.5$ 135.1$ 135.1$ 397.7$ (0.0)$ (0%) 5.2$ 4% 14.8$ 4%
Note: Q1'10 MPS includes pre-acquistion revenue of $0.6M.LATAM Q1'10-Q2'11 and AOP includes Corsidian on a Pro Forma Basis for Revenue.
Sequential Qtr Year-over-YearQ3'11 vs. Q2'11 Q3'11 vs. Q3'10 Year to Date
New Customer Product Revenue($’s in millions)
10
$1.4$1.6 $1.7
$1.4
$0.8
$2.0
$1.6
$2.2 $2.3
$1.8
$0.2
$0.5$0.1 $0.4
$0.3
$0.2
$0.2
$0.4
$0.2
$0.3$0.1
$1.5
$0.3
$0.2
$0.3
2223
17 17
2120 20
2223
18
22
$2.4
$2.1$2.2
$1.8
$2.2
$1.9
$1.0
$1.6
$2.4
$2.0$2.2
$0
$1
$2
$3
$4
Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
0
4
8
12
16
20
24
co
un
t
Unified IP Workforce Optimization Signature/Other New Customers
Q3’09 YTD New Customers 63
$5.9M
Q3’10 YTD New Customers 57
$4.8M
Company Confidential
©2011 Aspect Software, Inc. All rights reserved.
Q3’11 YTD New Customers 62
$7.0M
Note: Q1’09 - Q2’11 excludes Corsidian on a Pro Forma Basis for Revenue.
Annualized Quarterly Revenue Per Employee ($’s in thousands)
11
Q1 Q2 Q3 Q4
$305
$266 $272
$290$297$288 $287
$315
$292 $299 $294
$311$316$323
$309
$0
$50
$100
$150
$200
$250
$300
$350
2008 2009 2010 2011
Notes: (1) Headcount calculation represents 4:1 reduction to reflect India employees given cost differential compared to US(2) 2008 and 2009 exclude Quilogy(3) Q1’10 includes MPS stub period ($0.6m). 2008-Q2’11 excludes Corsidian on a Pro Forma Basis.
Company Confidential
©2011 Aspect Software, Inc. All rights reserved.
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