Cloud Services Annual Contract Value
Increases 71%
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the first quarter for fiscal year
2019.
Key First quarter financial highlights:
- Cloud Services Annual Contract Value
(ACV) increased approximately 71% to $13.2 million as of the
quarter ended July 31, 2018 compared to $7.7 million as of the same
period of the prior year. ACV consists of Software-as-a-Service
(SaaS) of $10.4 million, a 93% increase when compared to
approximately $5.4 million for the same period last year, and other
cloud services of $2.8 million, a 20% increase when compared to
$2.3 million for the same period last year.
- Subscription fees were $3.2 million for
the quarter ended July 31, 2018, a 96% increase compared to $1.6
million for the same period last year, while Software license
revenues were $1.7 million, a 58% decrease compared to $4.0 million
for the same period last year, reflecting our continued transition
to the SaaS engagement model.
- Total revenues for the quarter ended
July 31, 2018 were $27.4 million, an increase of 2% over the
comparable period last year.
- Recurring revenue streams of
Maintenance and Cloud Services were 54% of total revenues in the
quarter ended July 31, 2018 compared to 46% in the same period of
the prior year.
- Maintenance revenues for the quarter
ended July 31, 2018 increased 6% to $11.5 million compared to $10.8
million for the same period last year.
- Professional services and other
revenues for the quarter ended July 31, 2018 increased 6% to $11.0
million compared to $10.4 million for the same period last
year.
- Operating earnings for the quarter
ended July 31, 2018 decreased 83% to $0.6 million compared to $3.6
million for the same period last year.
- GAAP net earnings for the quarter ended
July 31, 2018 decreased 49% to $1.4 million or $0.04 per fully
diluted share compared to $2.7 million or $0.09 per fully diluted
share for the same period last year.
- Adjusted net earnings for the quarter
ended July 31, 2018, which excludes non-cash stock-based
compensation expense and amortization of acquisition-related
intangibles, were $2.2 million or $0.07 per fully diluted share
compared to $3.1 million or $0.10 per fully diluted share for the
same period last year.
- EBITDA decreased by 52% to $2.4 million
for the quarter ended July 31, 2018 compared to $5.0 million for
the same period last year which was impacted by Subscription
Services being preferred over a perpetual licensing model.
- Adjusted EBITDA decreased by 47% to
$2.8 million for the quarter ended July 31, 2018 compared to $5.3
million for the quarter ended July 31, 2017. Adjusted EBITDA
represents GAAP net earnings adjusted for amortization of
intangibles, depreciation, interest income & other, net, income
tax (benefit)/expense and non-cash stock-based compensation
expense.
The overall financial condition of the Company remains strong,
with cash and investments of approximately $87.4 million and no
debt as of July 31, 2018. During the first quarter of fiscal 2019,
the Company paid shareholder dividends of approximately $3.4
million.
“Our first quarter fiscal year 2019 results reinforce our
continued momentum towards Software-as-a-Service (SaaS)
subscriptions as the preferred customer engagement method which is
highlighted by our 71% increase in Cloud Services Annual Contract
Value (ACV), fueled by a 93% increase in SaaS subscriptions,” said
Allan Dow, president of American Software. “Last week, both
Logility and Demand Management were recognized as Leaders in the
2018 Gartner Magic Quadrant for Supply Chain Planning System of
Record. We believe this recognition highlights our long-standing
leadership in developing innovative solutions that help companies
of all sizes mitigate risk, increase profitability and optimize
their digital supply chains.”
“Our continuing investments in innovative software and services
to power the digital supply chain are helping our customers reach
new levels of productivity,” continued Dow. “Digitization drives a
new wave of supply chain productivity which is more intelligent,
responsive, scalable and collaborative, helping our customers gain
new insights and make better decisions faster.”
Additional highlights for the first quarter of fiscal 2019
include:
Customers & Channels
- Notable new and existing customers
placing orders with the Company in the first quarter include:
Dragon Crowd Garment, Gerber Childrenswear, Husqvarna,
International Vitamin, Lagardere Travel Retail Pacific, Mega Labs,
Mix Limited, Robinson Manufacturing, Taylor Farms, and
Thibiant.
- During the quarter, SaaS subscription
and/or software license agreements were signed with customers
located in the following nine countries: Australia, Finland,
Mexico, New Zealand, Panama, Sweden, United Kingdom, United States,
and Uruguay.
- Logility Inc., a wholly-owned
subsidiary of the Company, announced Griffith Foods, a global
provider of food ingredients, is expanding its use of Logility
Voyager Solutions™ to more regions around the world. Since
deploying Logility in North America, Griffith Foods has achieved
significant benefits including improved forecast visibility across
the organization, better inventory alignment and increased customer
service levels.
- New Generation Computing, Inc. (NGC), a
wholly-owned subsidiary of the Company, announced Rhone, a premier
men's active wear and lifestyle brand, selected NGC’s Andromeda
Cloud Platform® to help expand its line with greater efficiency and
speed as the company continues its exponential growth.
- Logility invited supply chain
professionals to the webcast, “Visibility: A Key Result of
Inventory Optimization,” which discussed how Sensient Colors
leveraged Logility Voyager Solutions as the planning platform for
its supply chain transformation and improved forecast accuracy,
expanded inventory visibility and increased customer service
levels.
- Logility congratulated the 2018 members
of The Gartner Supply Chain Top 25 and is proud to serve many of
these leading supply chain organizations. The winners were
announced at the Gartner Supply Chain Executive Conference on
May 17, 2018.
- Logility invited attendees of the 2018
Gartner Supply Chain Executive Conference to attend the
session, “Husqvarna Group Goes Digital with Global Supply
Chain Transformation” as well as the
roundtable, “Multi-Echelon Inventory Optimization Meets Sales
& Operations Planning.”
- Logility invited attendees of ASCI 2018
to attend the session, “How Sales & Operations Planning
Fits into the Ever-Changing Supply Chain,” led by Andrew Hill,
head of supply planning, Brightstar Australia. The session, which
took place in Sydney on May 24, 2018, highlighted how Brightstar
Australia is able to transform diverse information from across the
organization into a central resource to fuel supply chain
improvements.
- Logility invited attendees of the APICS
Best of the Best S&OP Conference to attend the
session, “Best-Laid Plans: Scenario Planning and Mitigating
Risk within the S&OP Process,” led by Berry
Global. The session shared recommendations on how to increase
visibility, model multiple scenarios and evaluate the business
impact based on both volumetric and financial measures.
Company and Technology
- Logility shared the results of a survey
of more than 1,000 supply chain leaders highlighting the priorities
and challenges companies face as they embrace advanced analytics,
Big Data and machine learning. Additional insights were discussed
during the live APICS webcast, “Accelerate Supply Chain
Performance Using Advanced Analytics.”
- During the quarter, Demand Management,
Inc., a wholly-owned subsidiary of Logility, and NGC announced they
each had been named one of the Top 100 Logistics IT Providers by
Inbound Logistics Magazine. This is the seventh year Demand
Management has received this award and the ninth year NGC has been
recognized.
- Demand Management and NGC were also
named recipients of the Supply & Demand Chain
Executive SDCE 100 Award. This is the tenth consecutive year
Demand Management has received this award and the eighth
consecutive year NGC has been recognized.
About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA),
named one of the 100 Most Trustworthy Companies in America by
Forbes Magazine, 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. Demand
Management 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,
Leatherman Tool Group and SweetWater Brewing. New Generation
Computing, Inc.®, a wholly-owned subsidiary of American
Software, is a leading provider of cloud-based supply chain and
product lifecycle management solutions for brands, 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, and Swatfame. 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), 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 income & other, net, and
income tax (benefit)/expense. Adjusted EBITDA represents GAAP net
earnings adjusted for amortization of intangibles, depreciation,
interest 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
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) 264-5298.
American Software® is a registered trademark of American
Software, Inc. Logility® is a registered trademark and Logility
Voyager Solutions™ is a trademark of Logility; Demand Solutions® is
a registered trademark of Demand Management, Inc.; and New
Generation Computing® and Andromeda Cloud Platform® 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, 2018 2017 Pct Chg.
Revenues: License fees $ 1,702 $ 4,015 (58 %) Subscription fees
3,168 1,619 96 % Professional services & other 11,008 10,424 6
% Maintenance 11,521 10,828 6 % Total
Revenues 27,399 26,886 2 % Cost
of Revenues: License fees 1,714 1,507 14 % Subscription services
1,068 681 57 % Professional services & other 8,667 7,246 20 %
Maintenance 2,198 2,227 (1 %) Total
Cost of Revenues 13,647 11,661 17 %
Gross Margin 13,752 15,225 (10 %)
Operating expenses: Research and development 4,559 3,794 20 % Less:
capitalized development (884 ) (1,287 ) (31 %) Sales and marketing
5,180 5,233 (1 %) General and administrative 4,193 3,515 19 %
Provision for doubtful accounts - 24 nm Amortization of
acquisition-related intangibles 97 324 (70 %)
Total Operating Expenses 13,145 11,603
13 % Operating Earnings 607 3,622
(83 %) Interest Income & Other, Net 753
599 26 % Earnings Before Income Taxes 1,360 4,221 (68
%) Income Tax (Benefit)/Expense (25 ) 1,496
(102 %) Net Earnings $ 1,385 $ 2,725 (49 %)
Earnings per common share: (1) Basic $ 0.05 $ 0.09
(44 %) Diluted $ 0.04 $ 0.09 (56 %)
Weighted average number of common shares outstanding: Basic
30,725 29,671 Diluted 31,343 29,989 nm- not meaningful
AMERICAN SOFTWARE, INC. NON-GAAP MEASURES
OF PERFORMANCE (In thousands, except per share data,
unaudited) First Quarter
Ended July 31, 2018 2017
Pct Chg. NON-GAAP EBITDA: Net Earnings (GAAP
Basis) $ 1,385 $ 2,725 (49 %) Income Tax (Benefit)/ Expense (25
) 1,496 nm Interest Income & Other, Net (753 ) (599 ) 26 %
Amortization of intangibles 1,650 1,265 30 % Depreciation
148 120 23 %
EBITDA (earnings before
interest, taxes, depreciation and amortization) 2,405
5,007 (52 %) Stock-based compensation
398 316 26 %
Adjusted EBITDA $
2,803 $ 5,323 (47 %)
EBITDA, as a
percentage of revenues 9 % 19 %
Adjusted EBITDA, as a percentage of revenues 10 %
20 %
First Quarter Ended July
31, 2018 2017 Pct Chg. NON-GAAP
EARNINGS PER SHARE: Net Earnings (GAAP Basis) $ 1,385 $
2,725 (49 %) Amortization of acquisition-related intangibles (2)
488 209 133 % Stock-based compensation (2) 326
204 60 % Adjusted Net Earnings $ 2,199 $ 3,138
(30 %) Adjusted non-GAAP diluted earnings per share $ 0.07
$ 0.10 (30 %) (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 $0.05 and $0.09 for
the three months ended July 31, 2018 and 2017, respectively.
(2) - Tax affected using the effective tax rate for the three month
periods ended July 31, 2018 and 2017. nm- not meaningful
AMERICAN SOFTWARE, INC. Consolidated Balance Sheet
Information (In thousands) (Unaudited)
July 31, April 30, 2018 2018
Cash and Cash Equivalents $ 54,855 $ 52,794 Short-term
Investments 29,992 26,121 Accounts Receivable: Billed 13,683 18,643
Unbilled 3,544 3,375 Total Accounts Receivable, net
17,227 22,018 Prepaids & Other 6,433 6,592
Current Assets 108,507 107,525 Investments - Non-current
2,509 8,893 PP&E, net 3,600 3,034 Capitalized Software,
net 9,559 9,728 Goodwill 25,888 25,888 Other Intangibles, net 4,523
5,120 Other Non-current Assets 3,822 2,777 Total
Assets $ 158,408 $ 162,965 Accounts Payable $ 2,166 $ 1,974
Accrued Compensation and Related costs 2,305 6,310 Dividend Payable
3,400 3,367 Other Current Liabilities 925 1,246 Deferred Revenues -
Current 29,518 33,226 Current Liabilities 38,314
46,123 Deferred Revenues - Non-current - 147 Deferred Tax
Liability - Non-current 3,222 2,615 Other Long-term Liabilities
1,485 1,496 Long-term Liabilities 4,707 4,258
Total Liabilities 43,021 50,381 Shareholders' Equity
115,387 112,584 Total Liabilities & Shareholders'
Equity $ 158,408 $ 162,965
AMERICAN
SOFTWARE, INC. Condensed Consolidated Cashflow
Information (In thousands) (Unaudited)
Three Months Ended
July 31, 2018 2017 Net cash provided
by operating activities $ 4,361 $ 4,015 Capitalized
computer software development costs (884 ) (1,287 ) Purchases of
property and equipment, net of disposals (714 ) (133 )
Net cash used in investing activities (1,598 ) (1,420
) Dividends paid (3,368 ) (3,259 ) Proceeds from exercise of
stock options 2,666 890
Net cash used in financing
activities (702 ) (2,369 ) Net change in cash and cash
equivalents 2,061 226 Cash and cash equivalents at beginning of
period 52,794 66,001
Cash and cash equivalents at
end of period $ 54,855 $ 66,227
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American Software, Inc.Vincent C. Klinges, 404-264-5477Chief
Financial Officer
American Software (NASDAQ:AMSWA)
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