Cloud Services Annual Contract Value
Increases 123% for the Quarter
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the second quarter of fiscal year
2018.
Key Second quarter financial highlights:
- Cloud Services Annual Contract Value
(ACV) increased approximately 123% to $9.9 million as of the
quarter ended October 31, 2017 compared to $4.4 million as of the
same period of the prior year. ACV consists of
software-as-a-service (SaaS) of $7.2 million, a 210% increase when
compared to approximately $2.3 million for the same period last
year, and other cloud services of $2.7 million, a 29% increase when
compared to $2.1 million for the same period last year.
- Total revenues for the quarter ended
October 31, 2017 were $26.3 million, an increase of 1% over the
comparable period last year.
- Recurring revenue streams of
Maintenance and Cloud Services were 49% of total revenues in the
quarter ended October 31, 2017 compared to 45% in the same period
of the prior year.
- Maintenance revenues for the quarter
ended October 31, 2017 increased 2% to $10.8 million compared to
$10.7 million for the same period last year.
- Software license revenues for the
quarter ended October 31, 2017 were $2.4 million, a decrease of 22%
compared to the same period last year.
- Services and other revenues for the
quarter ended October 31, 2017 increased 6% to $13.0 million
compared to $12.3 million for the same period last year.
- Operating earnings for the quarter
ended October 31, 2017 increased 358% to $3.2 million compared to
$0.7 million the same period last year.
- GAAP net earnings for the quarter ended
October 31, 2017 increased 502% to $2.5 million or $0.08 per fully
diluted share compared to $0.4 million or $0.01 per fully diluted
share for the same period last year.
- Adjusted net earnings for the quarter
ended October 31, 2017, which excludes non-cash stock-based
compensation expense and amortization of acquisition-related
intangibles, were $3.0 million or $0.10 per fully diluted share
compared to $0.9 million or $0.03 per fully diluted share for the
same period last year, which excluded non-cash stock-based
compensation expense and amortization of acquisition-related
intangibles.
- EBITDA increased by 95% to $4.6 million
for the quarter ended October 31, 2017 compared to $2.3 million for
the quarter ended October 31, 2016.
- Adjusted EBITDA increased 85% to $5.0
million for the quarter ended October 31, 2017 compared to $2.7
million for the quarter ended October 31, 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 2018 year to date financial highlights:
- Total revenues for the six months ended
October 31, 2017 decreased by 1% to $53.2 million compared to $53.6
million the same period last year.
- Recurring revenue streams of
Maintenance and Cloud Services were 48% of total revenues for the
six month period ended October 31, 2017 compared to 43% in the same
period of the prior year.
- Maintenance revenues for the six months
ended October 31, 2017 were $21.7 million, a 2% increase compared
to $21.2 million the same period last year.
- Software license fees for the six month
period ended October 31, 2017 decreased by 17% to $6.5 million
compared to $7.8 million the same period last year.
- Services and other revenues for the six
months ended October 31, 2017 increased 2% to $25.1 million
compared to $24.6 million the same period last year.
- For the six months ended October 31,
2017, the Company reported operating earnings of approximately $6.9
million compared to $2.4 million for the same period last year, a
191% increase over the same period last year.
- GAAP net earnings were approximately
$5.2 million or $0.17 per fully diluted share for the six months
ended October 31, 2017, a 148% increase compared to $2.1 million or
$0.07 per fully diluted share for the same period last year.
- EBITDA increased by 77% to $9.6 million
for the six months ended October 31, 2017 compared to $5.4 million
for the same period last year.
- Adjusted net earnings for the six
months ended October 31, 2017, which excludes stock-based
compensation expense and amortization of acquisition-related
intangibles increased 112% to $6.2 million or $0.20 per fully
diluted share, compared to $2.9 million or $0.10 per fully diluted
share for the same period last year, which also excluded
stock-based compensation expenses and acquisition-related
amortization of intangibles.
- Adjusted EBITDA increased 68% to $10.4
million for the six months ended October 31, 2017 compared to $6.2
million for the six months ended October 31, 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 overall financial condition of the Company remains strong,
with cash and investments of approximately $91.0 million and no
debt as of October 31, 2017. We increased cash and investments by
$18.7 million from the same period last year. During the second
quarter, the Company paid approximately $3.3 million in shareholder
dividends.
“We are pleased with our second quarter fiscal year 2018 results
which reflect our continued progress on our strategic plan to
transition from a perpetual licensing to a software-as-a-service
(SaaS) engagement model for our Logility Voyager Solutions, Demand
Solutions and NGC Andromeda platforms,” said Allan Dow, president
of American Software. “Consistent with the previous two quarters,
the trend towards SaaS subscriptions as a preferred engagement
method for new customers is accelerating and is positively
highlighted by our 210% growth in SaaS subscription revenue. This
transition to SaaS is a positive trend for our customers maximizing
the value from our solutions and increases the predictability of
revenue and EBITDA for our future financial performance.”
“Earlier this week, we announced Logility’s acquisition of Halo
Business Intelligence to accelerate and extend our rollout of
advanced analytics, machine learning and artificial intelligence as
a part of our entire solution portfolio,” continued Dow. “We will
leverage the data science and analytics expertise from Halo to
allow customers to quickly identify and visualize new insights and
the need to take action which can reduce costs, improve customer
service and drive more profitable growth for their businesses.”
Additional highlights for the second quarter of fiscal 2018
include:
Customers & Channels
- Notable new and existing customers
placing orders with the Company in the second quarter include:
Bericap Holding, Canada Goose, Crown Bolt, Delta Apparel, Ficosota
Ltd., Gardner-White Furniture, Haggar Clothing Co., New Era Cap
Co., Randa, and Scott Specialties.
- During the quarter, software license
and/or SaaS subscription agreements were signed with customers
located in the following 14 countries: Australia, Belgium,
Bulgaria, Canada, Finland, Germany, Ireland, Mexico, Netherlands,
South Africa, Sweden, United Kingdom, United States, and
Uruguay.
- Logility, a wholly-owned subsidiary of
the Company, announced Hunkem�ller, a ladies fashion retailer with
more than 800 stores in 23 countries, selected Logility Voyager
Solutions™ to support its
growing omni-channel operations. Logility will help the
retailer improve full price sell-through, increase net margin
performance, and automate its allocation and replenishment
process.
- Demand Management, Inc., a wholly-owned
subsidiary of Logility, announced that Handi-Craft Company, the
manufacturer and distributor of Dr. Brown’s Natural Flow baby
bottles, chose Demand Solutions DSX SaaS to support its supply
chain planning transformation. The addition of Demand Solutions DSX
SaaS will help Handi-Craft manage their rapid growth and better
prepare for both planned and unplanned events across its
operations.
- Demand Management announced Manufacture
de Panneaux Bois du Sud (MPBS), a leading paper and forest products
company, is live on the Demand Solutions DSX supply chain planning
platform. To support its growth, MPBS turned to Demand Management
to minimize its manual, spreadsheet-based processes and enable
employees to focus on more strategic activities aligned with
corporate goals.
- Demand Management announced that Joanna
George, senior manager of global demand planning and processes at
Siemens Healthineers, was honored with the 2016 Ventana Research
Business Technology Leadership Award in Service and Supply Chain
Excellence. The award was in recognition of Siemens Healthineers’
successful implementation of Demand Management’s supply chain
planning solution to improve forecast accuracy, lower inventory and
improve cash flow.
- NGC Software, a wholly-owned subsidiary
of the Company, announced that Byer California, the creators
of on-trend, affordable clothes for young women, implemented NGC’s
PLM. Byer California has improved workflow and standardized product
development with NGC’s solution, providing complete visibility and
control from concept to delivery.
- Logility invited attendees of the IBF
Business Planning, Forecasting & S&OP Conference to attend
the session, Walking on a Planning Journey: LaCrosse
Footwear’s Road to Forecasting Maturity. The
conference took place October 24 – 27, 2017 in Orlando,
FL.
- Logility announced its participation in
four thought leadership sessions at the CSCMP 2017 EDGE Conference
& Exhibition. Highlights of the sessions include Sensient
Technologies discussing the importance of visibility as well as
Vitalize presenting on the supply chain challenges of being a
pure-play online retailer. The four-day global event took place in
Atlanta, GA, September 24 – 27, 2017.
Company & Technology
- Logility announced the company was
named a leader in Gartner’s 2017 Magic Quadrant for Retail
Assortment Management Applications. Logility Voyager Solutions’
advanced retail planning and optimization platform helps retailers
deliver a unified retail commerce experience by breaking down silos
to automate merchandise, assortment, allocation, and
replenishment.
- Logility and Demand Management were
both selected as a SupplyChainBrain 100 Great Supply
Chain Partner. This marked the 12th selection for Logility. The
award is based on a poll in which supply chain professionals were
asked to identify software solution and service providers that made
a significant impact on their company’s efficiency, customer
service and overall supply chain performance.
- Logility hosted the webcast, How
to Drive Value and Optimize Inventory Investments, which featured
Sean Willems, Ph.D., chief scientist, Logility and Haslam Chair in
Supply Chain Analytics, University of Tennessee, and Karin Bursa,
executive vice president, Logility. The event, sponsored by
Logility and CSCMP Supply Chain Quarterly, took place Wednesday,
September 13, 2017 at 11:00 a.m. ET and is available on demand from
the Logility website library.
- Supply & Demand Chain Executive
Magazine named Logility, Demand Management, and NGC Software
to its 2017 listing of the Supply & Demand Chain Executive 100.
The 2017 Supply & Demand Chain Executive 100 spotlights the
industry’s most successful and transformational projects that
deliver value to enterprises across a range of supply chain
functions. These supply chain projects offer a forward-looking
perspective for the industry on new opportunities designed to drive
operational success.
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, quality, and
compliance 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.
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 income & other, net, and
income tax expense. 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. A reconciliation of these
non-GAAP financial measures to their nearest U.S. GAAP measure
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 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)
Second Quarter Ended Six Months Ended
October 31, October 31, 2017 2016
Pct Chg. 2017 2016 Pct Chg. Revenues:
License $ 2,449 $ 3,140 (22 %) $ 6,464 $ 7,767 (17 %) Services
& other 13,049 12,349 6 % 25,091 24,570 2 % Maintenance
10,839 10,657 2 % 21,667
21,242 2 % Total Revenues 26,337 26,146
1 % 53,222 53,579 (1 %)
Cost of Revenues: License 1,848 1,606 15 % 3,355 3,429 (2 %)
Services & other 8,195 9,044 (9 %) 16,122 18,097 (11 %)
Maintenance 2,288 2,478 (8 %)
4,515 5,239 (14 %) Total Cost of Revenues
12,331 13,128 (6 %) 23,992
26,765 (10 %) Gross Margin 14,006
13,018 8 % 29,230 26,814
9 % Operating expenses: Research and development 3,976 4,138
(4 %) 7,768 7,874 (1 %) Less: capitalized development (1,333 ) (969
) 38 % (2,617 ) (1,605 ) 63 % Sales and marketing 4,437 5,202 (15
%) 9,670 10,672 (9 %) General and administrative 3,616 3,671 (1 %)
7,131 7,182 (1 %) Provision for doubtful accounts - 19 (100 %) 24
19 26 % Amortization of acquisition-related intangibles 68 249 (73
%) 391 317 23 %
Total Operating Expenses 10,764 12,310
(13 %) 22,367 24,459 (9 %) Operating
Earnings 3,242 708 358 % 6,863
2,355 191 % Interest Income & Other, Net
676 (167 ) nm 1,275
493 159 % Earnings Before Income Taxes 3,918 541 624
% 8,138 2,848 186 % Income Tax Expense 1,438
129 1015 % 2,933 748 292 % Net
Earnings $ 2,480 $ 412 502 % $ 5,205 $ 2,100
148 %
Earnings per common share: (1) Basic $ 0.08
$ 0.01 700 % $ 0.17 $ 0.07 143 %
Diluted $ 0.08 $ 0.01 700 % $ 0.17 $ 0.07
143 %
Weighted average number of common shares
outstanding: Basic 29,906 29,135 29,788 29,037 Diluted 30,229
29,548 30,110 29,398 nm- not meaningful
AMERICAN SOFTWARE, INC. NON-GAAP
MEASURES OF PERFORMANCE (In thousands, except per share
data, unaudited) Second
Quarter Ended Six Months Ended October 31,
October 31, 2017 2016 Pct
Chg. 2017 2016 Pct Chg.
NON-GAAP EBITDA: Net Earnings (GAAP Basis) $ 2,480 $
412 502 % $ 5,205 $ 2,100 148 % Income Tax Expense 1,438 129 1015 %
2,933 748 292 % Interest Income & Other, Net (676 ) 167 nm
(1,275 ) (493 ) 159 % Amortization of intangibles 1,201 1,393 (14
%) 2,466 2,605 (5 %) Depreciation 120 244
(51 %) 239 438 (45 %)
EBITDA
(earnings before interest, taxes, depreciation and
amortization) 4,563 2,345 95 %
9,568 5,398 77 % Stock-based
compensation 477 381 25 % 793
778 2 %
Adjusted EBITDA $ 5,040
$ 2,726 85 % $ 10,361 $ 6,176 68 %
EBITDA, as a percentage of
revenues
17 % 9 % 18 % 10 %
Adjusted EBITDA, as a percentage of
revenues
19 % 10 % 19 % 12 %
Second Quarter Ended Six Months Ended October
31, October 31, 2017 2016 Pct Chg.
2017 2016 Pct Chg. NON-GAAP EARNINGS PER
SHARE: Net Earnings (GAAP Basis) $ 2,480 $ 412 502 % $
5,205 $ 2,100 148 % Amortization of acquisition-related intangibles
(2) 196 190 3 % 450 234 92 % Stock-based compensation (2)
302 290 4 % 508 574
(11 %) Adjusted Net Earnings $ 2,978 $ 892 234
% $ 6,163 $ 2,908 112 % Adjusted non-GAAP
diluted earnings per share $ 0.10 $ 0.03 233 % $ 0.20
$ 0.10 100 % (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 $0.08 and $0.17 for the three
and six months ended October 31, 2017, respectively. Diluted per
share for Class B shares under the two-class method are $0.01 and
$0.07 for the three and six months ended October 31, 2016,
respectively. (2) - Tax affected using the effective tax
rate for the three and six months period ended October 31, 2017 and
2016. nm- not meaningful
AMERICAN SOFTWARE, INC. Consolidated
Balance Sheet Information (In thousands)
(Unaudited) October 31,
April 30, 2017 2017 Cash
and Cash Equivalents $ 61,242 $ 66,001 Short-term Investments
19,221 19,332 Accounts Receivable: Billed 14,126 17,060 Unbilled
2,502 2,811 Total Accounts Receivable, net 16,628
19,871 Prepaids & Other 5,708 4,322 Current
Assets 102,799 109,526 Investments - Non-current 10,552
4,455 PP&E, net 2,027 2,055 Capitalized Software, net
9,469 8,614 Goodwill 19,549 19,549 Other Intangibles, net 2,695
3,399 Other Non-current Assets 1,547 1,176 Total
Assets $ 148,638 $ 148,774 Accounts Payable $ 1,326 $ 1,541
Accrued Compensation and Related costs 3,706 3,329 Dividend Payable
3,313 3,259 Other Current Liabilities 2,277 5,171 Deferred Revenues
- Current 27,291 29,437 Current Liabilities 37,913
42,737 Deferred Revenues - Non-current 651 214 Deferred Tax
Liability - Non-current 2,755 1,994 Other Long-term Liabilities
74 79 Long-term Liabilities 3,480 2,287
Total Liabilities 41,393 45,024 Shareholders' Equity 107,245
103,750 Total Liabilities & Shareholders' Equity
$ 148,638 $ 148,774
AMERICAN
SOFTWARE, INC. Condensed Consolidated Cashflow
Information (In thousands) (Unaudited)
Six Months Ended October
31, 2017 2016 Net cash provided by
operating activities $ 520 $ 9,635 Capitalized computer
software development costs (2,617 ) (1,606 ) Purchases of property
and equipment, net of disposals (212 ) (329 ) Purchase of business,
net of cash acquired - (4,441 )
Net cash used in
investing activities (2,829 ) (6,376 ) Dividends paid
(6,529 ) (6,097 ) Payment for accrued acquisition consideration -
(200 ) Proceeds from exercise of stock options 4,079 2,203
Net cash used in financing activities (2,450 ) (4,094
) Net change in cash and cash equivalents (4,759 ) (835 )
Cash and cash equivalents at beginning of period 66,001 49,004
Cash and cash equivalents at end of period $
61,242 $ 48,169
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version on businesswire.com: http://www.businesswire.com/news/home/20171130006001/en/
American Software, Inc.Vincent C. Klinges, 404-264-5477Chief
Financial Officer
American Software (NASDAQ:AMSWA)
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