Cloud Services Annual Contract Value
Increases 59% for the Quarter
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the fourth quarter and fiscal
2017.
Key fourth quarter financial highlights:
- Cloud Services Annual Contract Value
(ACV) increased approximately 59% to $6.1 million as of the quarter
ended April 30, 2017 compared to $3.8 million as of the same period
of the prior year. The ACV is comprised of software-as-a-service
(SaaS) ACV of $3.8 million, a 100% increase when compared to
approximately $1.9 million as of the same period last year, and
other cloud services ACV of $2.3 million, a 21% increase when
compared to $1.9 million as of the same period last year.
- Total revenues for the quarter ended
April 30, 2017 were $26.3 million, a decrease of 9% over the
comparable period last year.
- Software license revenues for the
quarter ended April 30, 2017 were $3.9 million, a decrease of 41%
compared to the same period last year.
- Services and other revenues for the
quarter ended April 30, 2017 were $11.9 million compared to $12.0
million for the same period last year.
- Maintenance revenues for the quarter
ended April 30, 2017 increased 2% to $10.5 million compared to
$10.3 million for the same period last year.
- Operating earnings for the quarter
ended April 30, 2017 decreased 23% to $3.0 million compared to $3.9
million the same period last year.
- GAAP net earnings for the quarter ended
April 30, 2017 increased to $10.3 million or $0.34 per fully
diluted share compared to $3.4 million or $0.12 per fully diluted
share for the same period last year.
- Adjusted net earnings for the quarter
ended April 30, 2017, which excludes non-cash stock-based
compensation expense, amortization of acquisition-related
intangibles, a discrete tax adjustment and the proceeds from the
sale of real estate were $2.7 million or $0.09 per fully diluted
share compared to $3.3 million or $0.11 per fully diluted share for
the same period last year, which excluded non-cash stock-based
compensation expense, amortization of acquisition-related
intangibles and discrete tax adjustments.
- EBITDA decreased by 13% to $4.6 million
for the quarter ended April 30, 2017 compared to $5.3 million for
the quarter ended April 30, 2016.
- Adjusted EBITDA decreased 14% to $4.9
million for the quarter ended April 30, 2017 compared to $5.7
million for the quarter ended April 30, 2016. 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.
Key fiscal 2017 financial highlights:
- Total revenues for the twelve months
ended April 30, 2017 decreased 7% to $106.3 million compared to
$113.9 million the same period last year.
- Software license fees for the twelve
months ended April 30, 2017 decreased 29% to $15.6 million compared
to $22.0 million the same period last year.
- Services and other revenues for the
twelve months ended April 30, 2017 decreased 5% to $48.3 million
compared to $51.1 million the same period last year.
- Maintenance revenues for the twelve
months ended April 30, 2017 increased 4% to $42.4 million compared
to $40.7 million the same period last year.
- For the twelve months ended April 30,
2017, the Company reported operating earnings of approximately $7.8
million compared to $13.5 million for the same period last year, a
43% decrease over the same period last year.
- GAAP net earnings were approximately
$14.6 million or $0.49 per fully diluted share for the twelve
months ended April 30, 2017, a 43% increase compared to $10.2
million or $0.35 per fully diluted share for the same period last
year.
- Adjusted net earnings for the twelve
months ended April 30, 2017, which excludes stock-based
compensation expense, amortization of acquisition-related
intangibles, a discrete tax adjustment and the proceeds from the
sale of real estate decreased 23% to $8.0 million or $0.27 per
fully diluted share, compared to $10.5 million or $0.36 per fully
diluted share for the same period last year, which also excluded
stock-based compensation expenses, acquisition-related amortization
of intangibles and discrete tax adjustments.
- Adjusted EBITDA decreased 24% to $15.8
million for the twelve months ended April 30, 2017 compared to
$20.7 million for the twelve months ended April 30, 2016. 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.
The Company is including ACV, 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 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. A reconciliation of these
non-GAAP financial measures to their nearest U.S. GAAP measure
appears in the accompanying financial tables.
The overall financial condition of the Company remains strong,
with cash and investments of approximately $89.8 million and no
debt as of April 30, 2017. During fiscal year 2017, the overall
cash and investments balance increased by $11.9 million when
compared to April 30, 2016 and the Company paid approximately $12.5
million in shareholder dividends.
In the fourth quarter, the Company divested excess real estate,
amounting to approximately 40% of our land holdings, for
approximately $13.4 million and recorded an after-tax gain of
approximately $7.9 million.
“We saw improving market conditions for supply chain and
planning investments during the fourth quarter of fiscal year 2017
which included an increase in customers selecting SaaS
subscriptions as a preferred engagement model. As a result of more
customers leveraging our SaaS and Cloud Services offerings, we are
pleased to report a significant 59% increase in Cloud Services
Annual Contract Value (ACV) when compared to the same quarter in
the prior year,” said Allan Dow, president of American
Software.
“As we continue our thoughtful and measured transition from a
perpetual licensing to a SaaS subscription engagement model, we
continue to offer customers the choice to select the option that
aligns with their strategic goals. The SaaS approach delivers our
portfolio of cloud-architected solutions with a subscription
agreement that includes access, platform management and ongoing
maintenance services,” continued Dow. “During this transition, we
expect our perpetual license fee revenue recognition will continue
to fluctuate quarter-to-quarter. However, as SaaS subscriptions
become the platform of choice, the Company will gain better
visibility of future revenue flow and continued growth in ACV.”
“During fiscal year 2017, we welcomed 34 new customers, signed
agreements with customers in 18 countries, continued our aggressive
investment in research and development, and expanded our global
presence,” stated Dow. “Fiscal year 2018 is off to a great start
and we remain optimistic about our growth plans despite the
continued global macro-economic sluggishness which impacted fiscal
year 2017 and may introduce additional uncertainty into future
revenue streams.”
Additional highlights for the fourth quarter of fiscal 2017
include:
Customers & Channels
- Notable new and existing customers
placing orders with the Company in the fourth quarter include: Aden
+ Anais, Ashley Furniture, Assa Abloy, Blommer Chocolate Company,
Berry Global, Bloomers, Briggs & Stratton, Cycles Lambert,
Capral, e.l.f. Cosmetics, Intertape Polymer Group, It Works!
Marketing, Jockey International, Kolmar Laboratories, Mega Labs
S.A., Royce Too, Shiseido Americas, and Steinhoff Asia Pacific
Limited.
- During the quarter, software license
and/or SaaS subscription agreements were signed with customers
located in the following 13 countries: Australia, Belgium, Canada,
Denmark, Finland, Ireland, Mexico, Norway, Sweden, Switzerland, the
United Kingdom, the United States and Uruguay.
- Logility Inc., a wholly-owned
subsidiary of the Company, announced The ALDO Group, a global
creator and operator of footwear and accessory brands, deployed
Logility Voyager Solutions™ as the foundation for the company’s
sales and operations planning (S&OP) and supply chain
transformation initiative to better serve its customers across
multiple channels.
- Logility announced Infineum
International Limited, a world leader in the formulation,
manufacture and marketing of additives for the fuel and lubricant
industry, selected Logility Voyager Solutions to optimize the
inventory and shipment aspects of its supply chain to increase
operational efficiencies and improve customer service.
- Logility announced that Vista Outdoor
received the “2017 Sailing to New Heights with Logility” award.
Presented at the Logility Connections 2017 conference, the award
highlighted Vista Outdoor for its supply chain transformation and
implementation of a robust S&OP process.
- Logility announced the recipients of
the Logility “2017 SAILS Leadership Award. ChemPoint, Glen Raven
Custom Fabrics, LaCrosse Footwear and Sensient Colors were
recognized for driving supply chain excellence through the use of
Logility Voyager Solutions.
Company & Technology
- NGC Software, a wholly-owned subsidiary
of the Company, announced the release and general availability of
its next-generation Andromeda cloud platform for fashion retailers
and brand owners. Andromeda powers the Connected
Enterprise by bringing together all departments –
Merchandising, Product Development, Sourcing, Compliance,
Purchasing, Production, Quality, Logistics, Marketing and Sales –
in a single cloud-based solution that connects vendors, suppliers
and other providers.
- NGC Software announced the release and
general availability of its Andromeda Vendor
Compliance cloud solution for fashion retailers and brand
owners. With the use of Andromeda Vendor Compliance, retailers and
brand owners can ensure Corporate Social Responsibility (CSR)
compliance by streamlining vendor management.
- Logility invited retail planning and
supply chain professionals to the webcast, Delivering the
Omni-Channel Promise. This event discussed the results of a recent
Merchandise Planning market research study, including practical
ideas and opportunities for retailers to achieve a holistic
omni-channel strategy.
- Logility held its customer
conference, Connections 2017: Playmakers at the
Omni Atlanta Hotel at CNN Center, 13 – 15 March 2017. The all-star
lineup of speakers featured a keynote presentation from Gartner, as
well as several Logility customers including AdvancePierre, ALDO,
Ashley Furniture, Brightstar, Chempoint, Daltile, Ferguson, Hostess
Brands, Kelly-Moore Paints, Lacrosse Footwear, L’Oreal, Niagara,
Sensient, SPANX, Vitalize and Vista Outdoor.
- Logility announced Food
Logistics magazine selected Logility for the
13th consecutive year for inclusion in its annual FL100, a
recognition of the top 100 technology providers for the food and
beverage industry. Logility was recognized for its proven track
record of helping companies reduce their supply chain costs, drive
enhanced visibility and boost their supply chain efficiency.
- Logility announced the company was
named the leader in customer satisfaction for supply chain planning
by the readers of Consumer Goods Technology magazine.
This honor is part of Logility’s recognition for the 17th
consecutive year as a recipient of the Consumer Goods
Technology Readers’ Choice Award.
- Logility announced three of its
executive leadership team were named Supply & Demand Chain
Executive 2017 Provider Pros to Know. Allan Dow, president,
Don Thomas, executive vice president of customer service, and Mark
Balte, executive vice president of research and development.
Additionally, Demand Management, Inc., a wholly-owned subsidiary of
Logility, announced Bill Harrison, president, was named a 2017
Provider Pros to Know. All were recognized for their contributions
towards helping businesses turn their complex supply chain
challenges into opportunities that drive tangible results.
About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA) provides
demand-driven supply chain management and enterprise software
solutions, backed by more than 40 years of industry experience,
that drive value for companies regardless of market conditions.
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 realize substantial
bottom-line results in record time. Logility Voyager Solutions™ is
a complete supply chain and retail optimization solution suite that
features an advanced analytics architecture and provides 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; and transportation planning and management.
Logility customers include Abercrombie & Fitch, Big Lots,
Parker Hannifin, 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 solutions for manufacturers and distributors designed
to increase forecast accuracy, improve customer service levels, and
reduce overall inventory to maximize profits and lower costs.
Demand Solutions DSX offers demand planning, collaborative
forecasting, inventory planning, production planning and
scheduling, S&OP and IBP. Demand Management serves customers
such as Siemens Healthcare, AutomationDirect.com, and Newfoundland
Labrador Liquor Corporation. New Generation Computing®
(NGC®), a wholly-owned subsidiary of American Software, is a
leading provider of PLM, supply chain management, ERP, and shop
floor control software and services for brand owners, retailers and
consumer products companies. NGC customers include A|X Armani
Exchange, Billabong, Carter’s, Destination XL, Hugo Boss, Jos. A.
Bank, Marchon Eyewear, Spanx, Swatfame and many others. For more
information about American Software, named one of the 100 Most
Trustworthy Companies in America by Forbes Magazine, please visit
www.amsoftware.com, call (800) 726-2946 or email:
ask@amsoftware.com.
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 or fax: (404) 237-8868.
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 NGC and New
Generation Computing are registered trademarks of New Generation
Computing, Inc. Other products mentioned in this document are
registered, trademarked or service marked by their respective
owners.
AMERICAN SOFTWARE, INC. Consolidated Statements of
Operations Information (In thousands, except per share data,
unaudited)
Fourth Quarter Ended
Twelve Months Ended April 30, April 30,
2017 2016 Pct Chg. 2017 2016
Pct Chg. Revenues: License $ 3,858 $ 6,556 (41 %) $ 15,584 $
22,043 (29 %) Services & other 11,928 11,990 (1 %) 48,313
51,099 (5 %) Maintenance 10,480 10,320
2 % 42,389 40,747 4 % Total Revenues
26,266 28,866 (9 %) 106,286
113,889 (7 %) Cost of Revenues: License
2,053 1,914 7 % 7,563 7,688 (2 %) Services & other 7,655 8,545
(10 %) 33,814 37,100 (9 %) Maintenance 2,218
2,568 (14 %) 9,707 9,441 3 %
Total Cost of Revenues 11,926 13,027 (8
%) 51,084 54,229 (6 %) Gross Margin
14,340 15,839 (9 %) 55,202
59,660 (7 %) Operating expenses: Research and
development 3,800 3,636 5 % 15,613 14,494 8 % Less: capitalized
development (1,253 ) (564 ) 122 % (3,724 ) (3,246 ) 15 % Sales and
marketing 4,980 6,197 (20 %) 20,287 22,164 (8 %) General and
administrative 3,498 2,642 32 % 14,180 12,449 14 % Provision for
doubtful accounts 20 - 0 % 39 - 0 % Amortization of
acquisition-related intangibles 339 68 399 % 1,041 272 283 %
Total Operating Expenses
11,384 11,979 (5 %) 47,436
46,133 3 % Operating Earnings 2,956
3,860 (23 %) 7,766 13,527
(43 %) Interest Income & Other, Net 12,331
932 1223 % 13,849 1,173 1081 %
Earnings Before Income Taxes 15,287 4,792 219 % 21,615 14,700 47 %
Income Tax Expense 5,009 1,386 261 %
6,994 4,458 57 % Net Earnings $ 10,278
$ 3,406 202 % $ 14,621 $ 10,242 43 %
Earnings per common share: (1) Basic $ 0.35 $ 0.12
192 % $ 0.50 $ 0.36 39 % Diluted $ 0.34
$ 0.12 183 % $ 0.49 $ 0.35 40 %
Weighted average number of common shares outstanding: Basic
29,533 28,858 29,232 28,727 Diluted 29,845 29,063 29,567 29,005
nm - not meaningful
AMERICAN SOFTWARE, INC. NON-GAAP MEASURES
OF PERFORMANCE (In thousands, except per share data,
unaudited)
Fourth Quarter Ended
Twelve Months Ended April 30, April 30,
2017 2016 Pct Chg. 2017 2016
Pct Chg. NON-GAAP EBITDA: Net Earnings (GAAP
Basis) $ 10,278 $ 3,406 202 % $ 14,621 $ 10,242 43 % Income Tax
Expense 5,009 1,386 261 % 6,994 4,458 57 % Interest (Income)
Expense & Other, Net (12,331 ) (932 )
nm
(13,849 ) (1,173 ) 1081 % Amortization of intangibles 1,456 1,207
21 % 5,909 4,811 23 % Depreciation 140 193
(27 %) 731 807 (9 %)
EBITDA
(earnings before interest, taxes, depreciation and
amortization) 4,552 5,260 (13 %)
14,406 19,145 (25 %) Stock-based
compensation 317 404 (22 %)
1,428 1,593 (10 %)
Adjusted EBITDA $
4,869 $ 5,664 (14 %) $ 15,834 $ 20,738
(24 %)
EBITDA , as a percentage of
revenues 17 % 18 % 14 % 17 %
Adjusted EBITDA , as a percentage of
revenues 19 % 20 % 15 % 18 %
Fourth Quarter Ended Twelve Months Ended April
30, April 30, 2017 2016 Pct Chg.
2017 2016 Pct Chg. NON-GAAP EARNINGS PER
SHARE: Net Earnings (GAAP Basis) $ 10,278 $ 3,406 202 %
$ 14,621 $ 10,242 43 % Discrete Tax Adjustments - - nm - (182 ) nm
GA R&D Tax Credit (2)(3) (89 ) (436 ) (80 %) (294 ) (871 ) (66
%) Gain from Sale of Building(2) (7,918 ) - nm (7,961 ) - nm
Amortization of acquisition-related intangibles (2) 228 48 375 %
704 190 271 % Stock-based compensation (2) 213
271 (21 %) 965 1,110 (13 %)
Adjusted Net Earnings $ 2,712 $ 3,289 (18 %) $ 8,035
$ 10,489 (23 %) Adjusted non-GAAP diluted
earnings per share $ 0.09 $ 0.11 (18 %) $ 0.27
$ 0.36 (25 %) (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 $0.34 and $0.49 for the three
and twelve months ended April 30, 2017, respectively. Diluted per
share for Class B shares under the two-class method are $0.12 and
$0.36 for the three and twelve months ended April 30, 2016,
respectively. (2) - Tax affected using the effective tax
rate for the three and twelve months period ended April 30, 2017
and 2016. (3) - The GA R&D tax credit is recorded to
General & Administration expense.
nm - not meaningful
AMERICAN SOFTWARE, INC. Consolidated
Balance Sheet Information (In thousands)
(Unaudited) April 30,
April 30, 2017 2016 Cash and
Cash Equivalents $ 66,001 $ 49,004 Short-term Investments 19,332
20,957 Accounts Receivable: Billed 17,060 17,104 Unbilled
2,811 3,444 Total Accounts Receivable, net 19,871 20,548
Prepaids & Other 4,322 3,586 Current Assets
109,526 94,095 Investments - Non-current 4,455 7,924
PP&E, net 2,055 3,396 Capitalized Software, net 8,614 9,140
Goodwill 19,549 18,749 Other Intangibles, net 3,399 1,858 Other
Non-current Assets 1,176 1,562 Total Assets $ 148,774
$ 136,724 Accounts Payable $ 1,541 $ 1,280 Accrued
Compensation and Related costs 3,329 4,349 Dividend Payable 3,259
2,887 Other Current Liabilities 5,171 2,779 Deferred Revenues -
Current 29,437 27,999 Current Liabilities 42,737
39,294 Deferred Revenues - Non-current 214 612 Deferred Tax
Liability - Non-current 1,994 1,319 Other Long-term Liabilities
79 605 Long-term Liabilities 2,287 2,536
Total Liabilities 45,024 41,830
Shareholders’ Equity
103,750 94,894
Total Liabilities & Shareholders’
Equity
$ 148,774 $ 136,724
AMERICAN SOFTWARE, INC.
Condensed Consolidated Cashflow Information (In
thousands) (Unaudited)
Twelve Months Ended April 30, 2017 2016
Net cash provided by operating activities $ 19,780 $
18,291 Capitalized computer software development costs
(3,724 ) (3,246 ) Purchases of property and equipment, net of
disposals (731 ) (655 ) Purchase of business, net of cash acquired
(4,441 ) -
Proceeds from disposal of fixed assets
13,134 -
Net cash provided by (used in) investing
activities 4,238 (3,901 ) Dividends paid (12,539 )
(11,478 ) Payment for accrued acquisition consideration (200 ) (200
) Repurchase of common stock - (181 ) Proceeds from exercise of
stock options 5,718 1,818
Net cash used in
financing activities (7,021 ) (10,041 ) Net change in
cash and cash equivalents 16,997 4,349 Cash and cash equivalents at
beginning of period 49,004 44,655
Cash and cash
equivalents at end of period $ 66,001 $ 49,004
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American Software, Inc.Vincent C. Klinges, 404-264-5477Chief
Financial Officer
American Software (NASDAQ:AMSWA)
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