Subscription Fees Increase 41% for the
Quarter and Cloud Services Annual Contract Value Increases
54%
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the first quarter of fiscal year
2020.
Key first quarter financial highlights:
- Subscription fees were $4.5 million for the quarter ended July
31, 2019, a 41% increase compared to $3.2 million for the same
period last year, while software license revenues were $1.8
million, a 4% increase compared to $1.7 million for the same period
last year, reflecting our continued transition to the SaaS
engagement model.
- Cloud Services Annual Contract Value (ACV) increased
approximately 54% to $20.3 million as of the quarter ended July 31,
2019 compared to $13.2 million as of the same period of the prior
year.
- Total revenues for the quarters ended July 31, 2019 and 2018
were $27.4 million for both periods.
- Recurring revenue streams for Maintenance and Subscription
Cloud Services were 56% of total revenues in the quarter ended July
31, 2019 compared to 54% in the same period of the prior year.
- Maintenance revenues for the quarter ended July 31, 2019
decreased 4% to $11.0 million compared to $11.5 million for the
same period last year.
- Professional services and other revenues for the quarter ended
July 31, 2019 were $10.1 million, an 8% decrease when compared to
$11.0 million for the same period last year.
- Operating earnings for the quarter ended July 31, 2019
increased 31% to $0.8 million compared to $0.6 million for the same
period last year.
- GAAP net earnings for the quarter ended July 31, 2019 decreased
17% to $1.2 million or $0.04 per fully diluted share compared to
$1.4 million or $0.04 per fully diluted share for the same period
last year.
- Adjusted net earnings for the quarter ended July 31, 2019,
which exclude non-cash stock-based compensation expense and
amortization of acquisition-related intangibles, were $2.1 million
or $0.06 per fully diluted share compared to $2.2 million or $0.07
per fully diluted share for the same period last year.
- EBITDA increased by 26% to $3.0 million for the quarter ended
July 31, 2019 compared to $2.4 million for the same period last
year.
- Adjusted EBITDA increased by 24% to $3.5 million for the
quarter ended July 31, 2019 compared to $2.8 million for the
quarter ended July 31, 2018. Adjusted EBITDA represents GAAP net
earnings adjusted for amortization of intangibles, depreciation,
interest income & other, net, income tax expense and non-cash
stock-based compensation expense.
The overall financial condition of the Company remains strong,
with cash and investments of approximately $88.0 million and no
debt as of July 31, 2019. During the first quarter of fiscal 2020,
the Company paid shareholder dividends of approximately $3.4
million.
“We are pleased with our 41% growth in Subscription Fees and 54%
increase in Cloud Services ACV as these key performance indicators
continue to underscore our successful transition to a cloud-first
company,” said Allan Dow, president of American Software.
“Additionally, our recurring revenue streams of Maintenance and
Subscription Cloud Services represented 56% of first quarter total
revenues, giving our business and shareholders increased visibility
with respect to future revenue. In addition to welcoming 16 new
customers to our solution platform, we also expanded our footprint
with a number of existing customers to help them better address the
increasingly competitive labor market with new automation
advantages, increased visibility, greater operational efficiency
and more confident decision-making.”
“With a turbulent global economy impacted by ever-evolving trade
talks, our portfolio of innovative supply chain optimization and
retail planning solutions drive tangible benefits for our customer
and positions our Company well for a strong fiscal year 2020,”
continued Dow. “Artificial intelligence (AI) and machine learning
(ML) are powering the ability for our solutions to further
automate, accelerate and streamline business planning. It is an
exciting time to be in the digital supply chain innovation business
and we remain optimistic about the opportunities ahead.”
Additional highlights for the first quarter of fiscal 2020
include:
Customers and Channels
- Notable new and existing customers placing orders with the
Company in the first quarter include: Assa Abloy New Zealand, Blue
Buffalo, BWAY Corporation, Charter Manufacturing Company, Conduit
del Ecuador, Dole Fresh Vegetables, Mega Labs, Monin, The Ames
Companies, Weissman Theatrical Supplies, William Carter Company,
and Zagg.
- During the quarter, SaaS subscription and/or software license
agreements were signed with customers located in the following nine
countries: Belgium, Canada, Ecuador, Finland, France, New Zealand,
Panama, United States and Uruguay.
- Logility, Inc., a wholly owned subsidiary of the Company,
announced that Dixon Valve and Coupling Company, LLC, a leader in
the hose coupling industry, deployed Logility Voyager Solutions™.
Dixon Valve uses the Logility platform to power its global sales
and operations planning processes, balance service levels and cost
across its highly complex product portfolio, and drive greater
collaboration between internal and external groups.
- Demand Management, Inc. (DMI), announced Brian Moynihan,
director of sales and operations planning at Blommer Chocolate, was
named a 2019 Food Logistics Champions: Rock Star of the Supply
Chain. This was the second consecutive year a DMI nominee has
received this award recognizing influential individuals who have
helped shape the global food supply chain.
- DMI announced Violeta d.o.o, a leading Central European
producer of hygiene products, selected Demand Solutions® as its new
supply chain planning platform. Violeta chose Demand Solutions to
help support its rapid growth and improve sales and production
planning for three factories and 15 locations across the
region.
- During the quarter, Logility invited attendees of the Gartner
Supply Chain Executive Conference 2019 in Barcelona, Spain to
attend the session “On the Road to Digital Global Supply Chain
Transformation with Husqvarna Group.” In the session, Husqvarna
Group highlighted how the company has transformed its global supply
chain into a unified digital platform by applying supply chain
planning best practices to support change, innovation and
growth.
- Logility hosted a live webcast featuring Hunkem�ller, Logility
and Columbus Consulting to explore how leading retailers are
turning to advanced analytics and automation to improve customer
satisfaction, margins and profitability.
Company and Technology
- Logility announced the company is positioned as a Leader with
the highest Ability to Execute of all evaluated vendors in the 2019
Gartner Magic Quadrant for Sales and Operations Planning Systems of
Differentiation. Logility is also a Leader in the 2018 Gartner
Magic Quadrant for Supply Chain Planning System of Record.
- Logility, DMI and New Generation Computing, Inc. (NGC Software)
were each honored as 2019 Inbound Logistics Top 100 Logistics IT
Providers. This marked the 22nd consecutive year Logility has
received this recognition, the 10th consecutive year for NGC
Software, and the eighth year for DMI.
- NGC Software announced it received Supply and Demand Chain
Executive’s 2019 SDCE 100 Award for the ninth consecutive year.
This year, NGC Software was recognized for its work with Jockey
International Inc., and their implementation of NGC’s Andromeda
PLM® to manage workflows in a global, collaborative environment to
increase speed to market and more effectively manage lead
times.
- Logility’s Allan Dow, president, Karin Bursa, executive vice
president, Josh Stephens, vice president, global services, and
Henry Canitz, director of product marketing, were each named by
Supply & Demand Chain Executive as 2019 Provider Pros to Know.
Each is recognized for their commitment to helping shape the future
of supply chain.
About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA),
delivers innovative demand-driven supply chain management and
advanced retail planning platforms backed by more than 45 years of
industry expertise. Logility, Inc., a wholly-owned subsidiary of
American Software, is a leading provider of collaborative supply
chain optimization and advanced retail planning solutions that help
medium, large and Fortune 500 companies transform their supply
chain operations to gain a competitive advantage. Recognized for
its high-touch approach to customer service, rapid implementations
and industry-leading return on investment (ROI), Logility customers
include Big Lots, Husqvarna Group, Parker Hannifin, Sonoco
Products, Red Wing Shoe Company, Verizon Wireless and VF
Corporation. Demand Management, Inc., a wholly-owned subsidiary of
Logility, delivers affordable, easy-to-use Software-as-a-Service
(SaaS) supply chain planning solutions designed to increase
forecast accuracy, improve customer service and reduce inventory to
maximize profits and lower costs. DMI serves customers such as
Siemens Healthcare, AutomationDirect.com and Newfoundland Labrador
Liquor Corporation. Halo Business Intelligence, a division of
Logility, is an advanced analytics software provider leveraging an
innovative blend of artificial intelligence and machine learning
technology to drive greater supply chain performance. Halo
customers include Aaron’s and Leatherman Tool Group. New Generation
Computing, Inc., a wholly-owned subsidiary of American Software,
powers the digital supply chain with the Andromeda Cloud Platform®,
enabling brand owners and retailers to maximize revenue and profit
by accelerating lead times, streamlining product development and
supply chain management, and optimizing distribution. NGC customers
include Brooks Brothers, Carter’s, Destination XL, Fanatics, Foot
Locker, Jockey International, Lacoste and Spanx. The comprehensive
American Software supply chain and retail planning portfolio
includes advanced analytics, supply chain visibility, demand,
inventory and replenishment planning, Sales and Operations Planning
(S&OP), Integrated Business Planning (IBP), supply and
inventory optimization, manufacturing planning and scheduling,
retail merchandise and assortment planning and allocation, product
lifecycle management (PLM), sourcing management ,and vendor quality
and compliance. For more information about American Software,
please visit www.amsoftware.com, call (800) 726-2946 or email:
ask@amsoftware.com.
Operating and Non-GAAP Financial Measures
The Company includes operating measures (ACV) and other non-GAAP
financial measures (EBITDA, adjusted EBITDA, adjusted net earnings
and adjusted net earnings per share) in the summary financial
information provided with this press release as supplemental
information relating to its operating results. This financial
information is not in accordance with, or an alternative for,
GAAP-compliant financial information and may be different from the
operating or non-GAAP financial information used by other
companies. The Company believes that this presentation of ACV,
EBITDA, adjusted EBITDA, adjusted net earnings and adjusted net
earnings per share provides useful information to investors
regarding certain additional financial and business trends relating
to its financial condition and results of operations. ACV is a
forward-looking operating measure used by management to better
understand cloud services (SaaS and other related cloud services)
revenue trends within the Company’s business, as it reflects the
Company’s current estimate of revenue to be generated under the
existing client contracts in the forward 12-month period. EBITDA
represents GAAP net earnings adjusted for amortization of
intangibles, depreciation, interest (expense)/income & other,
net, and income tax (benefit)/expense. Adjusted EBITDA represents
GAAP net earnings adjusted for amortization of intangibles,
depreciation, interest (expense)/income & other, net, income
tax (benefit)/expense and non-cash stock-based compensation
expense. A reconciliation of these non-GAAP financial measures to
their nearest U.S. GAAP measures appears in the accompanying
financial tables.
Forward Looking Statements
This press release contains forward-looking statements that are
subject to substantial risks and uncertainties. There are a number
of factors that could cause actual results to differ materially
from those anticipated by statements made herein. These factors
include, but are not limited to, changes in general economic
conditions, technology and the market for the Company's products
and services, including economic conditions within the e-commerce
markets; the timely availability and market acceptance of these
products and services; the Company’s ability to satisfy in a timely
manner all SEC required filings and the requirements of Section 404
of the Sarbanes-Oxley Act of 2002 and the rules and regulations
adopted under that Section; the challenges and risks associated
with integration of acquired product lines and companies; the
effect of competitive products and pricing; the uncertainty of the
viability and effectiveness of strategic alliances; and the
irregular pattern of the Company's revenues. For further
information about risks the Company could experience as well as
other information, please refer to the Company's current Form 10-K
and other reports and documents subsequently filed with the
Securities and Exchange Commission. For more information, contact:
Vincent C. Klinges, Chief Financial Officer, American Software,
Inc., (404) 264-5477, invest@amsoftware.com or Kevin Liu, Investor
Relations, (626) 657-0013.
American Software® is a registered trademark of American
Software, Inc.; Logility® is a registered trademark and Logility
Voyager Solutions™ is a trademark of Logility, Inc.; Demand
Solutions® is a registered trademark of Demand Management, Inc.;
and New Generation Computing®, Andromeda Cloud Platform®, and
Andromeda PLM® are registered trademarks of New Generation
Computing, Inc. Other products mentioned in this document are
registered marks, trademarks or service marks of their respective
owners.
AMERICAN SOFTWARE,
INC.
Consolidated Statements of
Operations Information
(In thousands, except per
share data, unaudited)
First Quarter Ended
July 31,
2019
2018
Pct Chg.
Revenues:
License fees
$ 1,778
$ 1,702
4%
Subscription fees
4,458
3,168
41%
Professional services & other
10,137
11,008
(8%)
Maintenance
11,010
11,521
(4%)
Total Revenues
27,383
27,399
0%
Cost of Revenues:
License fees
1,380
1,714
(19%)
Subscription services
2,125
1,068
99%
Professional services & other
7,405
8,667
(15%)
Maintenance
1,851
2,198
(16%)
Total Cost of Revenues
12,761
13,647
(6%)
Gross Margin
14,622
13,752
6%
Operating expenses:
Research and development
4,613
4,559
1%
Less: capitalized development
(1,285)
(884)
45%
Sales and marketing
5,579
5,180
8%
General and administrative
4,788
4,193
14%
Provision for doubtful accounts
33
-
nm
Amortization of acquisition-related
intangibles
97
97
0%
Total Operating Expenses
13,825
13,145
5%
Operating Earnings
797
607
31%
Interest Income & Other, Net
525
753
(30%)
Earnings Before Income Taxes
1,322
1,360
(3%)
Income Tax Expense/ (Benefit)
170
(25)
nm
Net Earnings
$ 1,152
$ 1,385
(17%)
Earnings per common share: (1)
Basic
$ 0.04
$ 0.05
(20%)
Diluted
$ 0.04
$ 0.04
0%
Weighted average number of common
shares outstanding:
Basic
31,270
30,725
Diluted
31,951
31,343
nm- not meaningful
AMERICAN SOFTWARE,
INC.
NON-GAAP MEASURES OF
PERFORMANCE
(In thousands, except per
share data, unaudited)
First Quarter Ended
July 31,
2019
2018
Pct Chg.
NON-GAAP Operating Earnings:
Operating Earnings (GAAP Basis)
$ 797
$ 607
31%
Amortization of acquisition-related
intangibles
598
597
0%
Stock-based compensation
442
398
11%
NON-GAAP Operating Earnings:
1,837
1,602
15%
Non-GAAP Operating Earnings, as a % of
revenue
7%
6%
First Quarter Ended
July 31,
2019
2018
Pct Chg.
NON-GAAP EBITDA:
Net Earnings (GAAP Basis)
$ 1,152
$ 1,385
(17%)
Income Tax Expense/(Benefit)
170
(25)
nm
Interest Income & Other, Net
(525)
(753)
(30%)
Amortization of intangibles
2,085
1,650
26%
Depreciation
160
148
8%
EBITDA (earnings before interest,
taxes, depreciation and amortization)
3,042
2,405
26%
Stock-based compensation
442
398
11%
Adjusted EBITDA
$ 3,484
$ 2,803
24%
EBITDA, as a percentage of
revenues
11%
9%
Adjusted EBITDA, as a percentage of
revenues
13%
10%
First Quarter Ended
July 31,
2019
2018
Pct Chg.
NON-GAAP EARNINGS PER SHARE:
Net Earnings (GAAP Basis)
$ 1,152
$ 1,385
(17%)
Amortization of acquisition-related
intangibles (2)
520
488
7%
Stock-based compensation (2)
385
326
18%
Adjusted Net Earnings
$ 2,057
$ 2,199
(6%)
Adjusted non-GAAP diluted earnings per
share
$ 0.06
$ 0.07
(14%)
First Quarter Ended
July 31,
2019
2018
Pct Chg.
NON-GAAP Earnings Per Share
Net Earnings (GAAP Basis)
$ 0.04
$ 0.04
0%
Amortization of acquisition-related
intangibles (2)
$ 0.01
0.02
(50%)
Stock-based compensation (2)
$ 0.01
0.01
0%
Adjusted Net Earnings
$ 0.06
$ 0.07
(14%)
First Quarter Ended
July 31,
2019
2018
Pct Chg.
Amortization of acquisition-related
intangibles
Cost of license
$ 501
$ 500
0%
Operating expenses
97
97
0%
Total amortization of
acquisition-related intangibles
$ 598
$ 597
0%
Stock-based compensation
Cost of revenues
$ 30
$ 28
7%
Research and development
33
30
10%
Sales and marketing
76
52
46%
General and administrative
303
288
5%
Total stock-based compensation
$ 442
$ 398
11%
(1) - Basic per share amounts are the same
for Class A and Class B shares. Diluted per share amounts for Class
A shares are shown above. Diluted per share for Class B shares
under the two-class method are $0.04 and $0.05 for the three months
ended July 31, 2019 and 2018, respectively.
(2) - Tax affected using the effective tax
rate for the three month periods ended July 31, 2019 and 2018.
nm- not meaningful
AMERICAN SOFTWARE,
INC.
Consolidated Balance Sheet
Information
(In thousands)
(Unaudited)
July 31,
April 30,
2019
2019
Cash and Cash Equivalents
$
62,722
$
61,288
Short-term Investments
23,591
24,710
Accounts Receivable:
Billed
17,471
18,819
Unbilled
3,030
1,475
Total Accounts Receivable, net
20,501
20,294
Prepaids & Other
5,772
6,210
Current Assets
112,586
112,502
Investments - Non-current
1,679
2,484
PP&E, net
3,534
3,585
Capitalized Software, net
10,862
11,063
Goodwill
25,888
25,888
Other Intangibles, net
2,134
2,732
Deferred Sales Commissions -
Non-current
2,009
1,546
Lease Right of Use Assets
2,587
-
Other Non-current Assets
1,655
1,510
Total Assets
$
162,934
$
161,310
Accounts Payable
$
1,173
$
2,448
Accrued Compensation and Related costs
3,364
2,561
Dividend Payable
3,450
3,434
Operating Lease Obligation - Current
769
-
Other Current Liabilities
1,869
1,375
Deferred Revenues - Current
32,704
33,283
Current Liabilities
43,329
43,101
Operating Lease Obligation -
Non-current
1,957
-
Deferred Tax Liability - Non-current
3,357
3,514
Other Long-term Liabilities
88
88
Long-term Liabilities
5,402
3,602
Total Liabilities
48,731
46,703
Shareholders' Equity
114,203
114,607
Total Liabilities & Shareholders'
Equity
$
162,934
$
161,310
AMERICAN SOFTWARE,
INC.
Condensed Consolidated
Cashflow Information
(In thousands)
(Unaudited)
Three Months Ended
July 31,
2019
2018
Net cash provided by operating
activities
$
4,811
$
4,361
Capitalized computer software development
costs
(1,285
)
(884
)
Purchases of property and equipment, net
of disposals
(110
)
(714
)
Net cash used in investing
activities
(1,395
)
(1,598
)
Dividends paid
(3,434
)
(3,368
)
Proceeds from exercise of stock
options
1,452
2,666
Net cash used in financing
activities
(1,982
)
(702
)
Net change in cash and cash
equivalents
1,434
2,061
Cash and cash equivalents at beginning of
period
61,288
52,794
Cash and cash equivalents at end of
period
$
62,722
$
54,855
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190828005398/en/
Vincent C. Klinges Chief Financial Officer American Software,
Inc. (404) 264-5477
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