Subscription Fees Increased 64%, Cloud
Services Annual Contract Value Increased 53% and Operating Earnings
Increased 57% for the Quarter
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the fourth quarter and for fiscal
year 2020.
Key Fourth quarter financial highlights:
- Subscription fees were $6.3 million for the quarter ended April
30, 2020, a 64% increase compared to $3.8 million for the same
period last year, while Software license fee revenues were $1.1
million, a 37% decrease compared to $1.7 million for the same
period last year, reflecting our continued transition to the
Software as a Service (SaaS) engagement model.
- Cloud Services Annual Contract Value (ACV) increased
approximately 53% to $26.4 million as of the quarter ended April
30, 2020 compared to $17.3 million as of the same period of the
prior year.
- Total revenues for the quarter ended April 30, 2020 increased
11% to $29.3 million, compared to $26.3 million for the same period
of the prior year.
- Recurring revenue streams for Maintenance and Cloud Services
were 57% of total revenues in the quarter ended April 30, 2020
compared to 56% in the same period of the prior year.
- Maintenance revenues for the quarter ended April 30, 2020
decreased 4% to $10.4 million compared to $10.8 million for the
same period last year.
- Professional services and other revenues for the quarter ended
April 30, 2020 increased 16% to $11.5 million compared to $9.9
million for the same period last year.
- Operating earnings for the quarter ended April 30, 2020
increased 57% to $1.6 million compared to $1.0 million for the same
period last year.
- GAAP net earnings for the quarter ended April 30, 2020
decreased 71% to $0.5 million or $0.02 per fully diluted share
compared to $1.9 million or $0.06 per fully diluted share for the
same period last year.
- Adjusted net earnings for the quarter ended April 30, 2020,
which excludes non-cash stock-based compensation expense and
amortization of acquisition-related intangibles, were $1.3 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.
- EBITDA increased by 10% to $3.4 million for the quarter ended
April 30, 2020 compared to $3.1 million for the same period last
year.
- Adjusted EBITDA increased by 11% to $3.9 million for the
quarter ended April 30, 2020 compared to $3.5 million for the same
period last year. 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.
Key fiscal year 2020 financial highlights:
- Subscription fees were $22.0 million for the twelve months
ended April 30, 2020, a 57% increase compared to $14.0 million for
the same period last year.
- Software license revenues were $7.6 million, a 6% increase
compared to $7.1 million for the same period last year.
- Total revenues for the twelve months ended April 30, 2020
increased 6% to $115.5 million compared to $108.7 million for the
same period last year.
- Recurring revenue streams of Maintenance and Cloud Services
were 56% of total revenues for the twelve-month period ended April
30, 2020 compared to 55% in the same period of the prior year.
- Maintenance revenues for the twelve months ended April 30, 2020
were $43.1 million, a 5% decrease compared to $45.4 million for the
same period last year.
- Professional services and other revenues for the twelve months
ended April 30, 2020 increased 1% to $42.8 million compared to
$42.2 million for the same period last year.
- Operating earnings for the twelve months ended April 30, 2020
increased 15% to approximately $6.0 million compared to $5.3
million for the same period last year.
- GAAP net earnings were approximately $6.7 million or $0.21 per
fully diluted share for the twelve months ended April 30, 2020, a
1% decrease compared to $6.8 million or $0.22 per fully diluted
share for the same period last year.
- Adjusted net earnings for the twelve months ended April 30,
2020, which exclude stock-based compensation expense and
amortization of acquisition-related intangibles, decreased 6% to
$9.9 million or $0.31 per fully diluted share, compared to $10.5
million or $0.33 per fully diluted share for the same period last
year.
- EBITDA increased by 9% to $14.1 million for the twelve months
ended April 30, 2020 compared to $13.0 million for the same period
last year.
- Adjusted EBITDA increased 10% to $16.2 million for the twelve
months ended April 30, 2020 compared to $14.8 million for the same
period last year. 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.
The overall financial condition of the Company remains strong,
with cash and investments of approximately $94.7 million, an
increase of over $6.2 million when compared to April 30, 2019, and
no debt as of April 30, 2020. During the fourth quarter of fiscal
2020, the Company paid shareholder dividends of approximately $3.5
million.
“We are pleased with our fourth quarter and overall fiscal 2020
performance. In the midst of the economic slowdown resulting from
the pandemic and a rapid shift to a virtual work environment, we
continued to perform with a strong contract close rate driving 64%
growth in Subscription Fees and 16% growth in our professional
services revenue. These key performance indicators continue to
underscore our successful transition to a cloud-first company,”
said Allan Dow, CEO and president of American Software. “Recurring
revenue represented 57% and 56% of fourth quarter and fiscal year
total revenues, which is a reflection of the longer-term commitment
of our customers to our platform and services. With our cloud-first
strategy firmly in place, we expect the percentage of recurring
revenue to continue to trend higher in the future.”
“Our cloud-based digital platform provides customers with
decision support capabilities to achieve an agile, resilient and
higher velocity supply chain,” stated Dow. “We believe customers
that take advantage of our advancements in artificial intelligence
(AI), machine learning (ML) and advanced analytics to improve their
supply chain performance will be better positioned to sense and
respond to unforeseen challenges and opportunities that may impact
their profitable growth.”
Additional highlights for the fourth quarter and fiscal 2020
include:
Customers & Channels
- Notable new and existing customers placing orders with the
Company in the fourth quarter include: Bio-Medical Devices
International, Inc., Cooper Lighting LLC, Croda Europe Limited,
Delta Apparel, Inc., HollyFrontier Corporation, Hunter Boot Ltd.,
Ismed Inc., Lacoste Operations, Taylor Farms, Thermo Fisher
Scientific, Inc. and Tillamook County Creamery Association
- During the quarter, SaaS subscription and/or software license
agreements were signed with customers located in the following 5
countries: Canada, France, Mexico, United Kingdom, and United
States.
- Logility, Inc., a wholly owned subsidiary of the Company,
announced a live webcast featuring its customer Husqvarna Group.
The event, Husqvarna Group: Digital Supply Chain Transformation,
described how a supply chain transformation powered by Logility
Digital Supply Chain Planning Platform accelerates decision making
through the ability to harnesses new insights, automate routine
processes and augment human talent.
Company and Technology
- To help customers during the COVID-19 pandemic, Logility
announced all online education courses through Logility University
were available free of charge. The Logility University curriculum
provides customers the opportunity to accelerate their digital
supply chain planning teams’ expertise through two levels of
education and certification.
- Logility announced during the quarter the Company was
positioned as a Leader in the IDC MarketScape: Worldwide Supply
Chain Inventory Optimization 2019 Vendor Assessment. The IDC
MarketScape is a quantitative and qualitative assessment of the
characteristics that explain a vendor’s success in the supply chain
inventory optimization (IO) space and helps assess current and
anticipated performance in the marketplace.
- Also, in the quarter, Logility announced IDC positioned the
Company as a Leader in the IDC MarketScape: Worldwide Supply Chain
Sales and Operations Planning 2019 Vendor Assessment. According to
the report, “Logility is known for having a proven implementation
methodology, deep domain expertise, outstanding solution usability,
and a continuous innovation process that enables customers to solve
new challenges as it grows.”
- Allan Dow, CEO and president, Mark Balte, executive vice
president of research and development and Henry Canitz, director of
product marketing were each named as 2020 Provider Pros to Know by
industry publication Supply & Demand Chain Executive. In
addition, Bill Harrison, president, Demand Management, Inc., a
subsidiary of Logility, Inc., along with New Generation Computing’s
Mark Burstein, president and chief strategy officer, Fred Isenberg,
president of consulting services and Roger Mayerson, vice president
of vendor and product compliance solutions, were named 2020
Provider Pros to Know. Each is recognized for their commitment to
helping shape the digital future of supply chain. The Pros to Know
Awards recognize supply chain executives that are leading
initiatives to help prepare supply chains for the significant
challenges of today’s business climate.
- During the quarter, Logility announced Allan Dow was named a
2020 Food Logistics Champion: Rock Stars of the Supply Chain. This
award recognizes influential individuals in the industry whose
achievements, hard work and vision have shaped new levels of
efficiency, productivity and innovation throughout the global food
supply chain.
About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA),
delivers innovative AI-powered supply chain management and advanced
retail planning platforms. Logility, Inc., a wholly-owned
subsidiary of American Software, is accelerating digital supply
chain optimization and advanced retail planning from product
concept to customer availability and 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 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. New Generation Computing,
Inc., a wholly-owned subsidiary of American Software, powers the
digital supply chain to enable brand owners and retailers to
maximize revenue and profit by accelerating lead times,
streamlining product development, and optimizing sourcing and
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
existing customer 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 income & other, net, income tax expense
and non-cash stock-based compensation expense.
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 Securities and Exchange Commission (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 SEC. 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 of Logility,
Inc.; and New Generation Computing®, is a registered trademark 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)
Fourth Quarter Ended
Twelve Months Ended
April 30,
April 30,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
Revenues:
Subscription fees
$
6,281
$
3,830
64
%
$
22,033
$
14,026
57
%
License fees
1,063
1,694
(37
%)
7,582
7,126
6
%
Professional services & other
11,503
9,914
16
%
42,774
42,154
1
%
Maintenance
10,426
10,833
(4
%)
43,077
45,400
(5
%)
Total Revenues
29,273
26,271
11
%
115,466
108,706
6
%
Cost of Revenues:
Subscription services
2,780
2,013
38
%
9,491
5,759
65
%
License fees
829
1,125
(26
%)
4,798
6,430
(25
%)
Professional services & other
7,983
6,937
15
%
30,695
31,421
(2
%)
Maintenance
1,773
1,914
(7
%)
7,324
8,356
(12
%)
Total Cost of Revenues
13,365
11,989
11
%
52,308
51,966
1
%
Gross Margin
15,908
14,282
11
%
63,158
56,740
11
%
Operating expenses:
Research and development
4,431
5,060
(12
%)
18,518
19,039
(3
%)
Less: capitalized development
(473
)
(1,800
)
(74
%)
(3,170
)
(5,961
)
(47
%)
Sales and marketing
5,712
5,809
(2
%)
21,958
20,992
5
%
General and administrative
4,532
4,103
10
%
19,422
17,006
14
%
Provision for doubtful accounts
64
-
-
97
-
-
Amortization of acquisition-related
intangibles
53
97
(45
%)
285
388
(27
%)
Total Operating Expenses
14,319
13,269
8
%
57,110
51,464
11
%
Operating Earnings
1,589
1,013
57
%
6,048
5,276
15
%
Interest (Expense)/Income & Other,
Net
(1,465
)
1,275
nm
750
2,365
(68
%)
Earnings Before Income Taxes
124
2,288
(95
%)
6,798
7,641
(11
%)
Income Tax (Benefit)/Expense
(421
)
414
nm
56
838
(93
%)
Net Earnings
$
545
$
1,874
(71
%)
$
6,742
$
6,803
(1
%)
Earnings per common share: (1)
Basic
$
0.02
$
0.06
(67
%)
$
0.21
$
0.22
(5
%)
Diluted
$
0.02
$
0.06
(67
%)
$
0.21
$
0.22
(5
%)
Weighted average number of common
shares outstanding:
Basic
32,165
31,144
31,747
30,950
Diluted
32,688
31,452
32,367
31,378
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,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP Operating Earnings:
Operating Income (GAAP Basis)
$
1,589
$
1,013
57
%
$
6,048
$
5,276
15
%
Amortization of acquisition-related
intangibles
311
597
(48
%)
1,600
2,387
(33
%)
Stock-based compensation
517
445
16
%
2,027
1,751
16
%
NON-GAAP Operating Earnings:
2,417
2,055
18
%
9,675
9,414
3
%
Non-GAAP Operating Earnings, as a % of
revenue
8
%
8
%
8
%
9
%
Fourth Quarter Ended
Twelve Months Ended
April 30,
April 30,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP EBITDA:
Net Earnings (GAAP Basis)
$
545
$
1,874
(71
%)
$
6,742
$
6,803
(1
%)
Income Tax (Benefit)/Expense
(421
)
414
nm
56
838
(93
%)
Interest (Expense)/Income & Other,
Net
1,465
(1,275
)
nm
(750
)
(2,365
)
(68
%)
Amortization of intangibles
1,637
1,831
(11
%)
7,471
7,015
7
%
Depreciation
156
217
(28
%)
632
704
(10
%)
EBITDA (earnings before interest,
taxes, depreciation and amortization)
3,382
3,061
10
%
14,151
12,995
9
%
Stock-based compensation
517
445
16
%
2,027
1,751
16
%
Adjusted EBITDA
$
3,899
$
3,506
11
%
$
16,178
$
14,746
10
%
EBITDA, as a percentage of
revenues
12
%
12
%
12
%
12
%
Adjusted EBITDA, as a percentage of
revenues
13
%
13
%
14
%
14
%
Fourth Quarter Ended
Twelve Months Ended
April 30,
April 30,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP EARNINGS PER SHARE:
Net Earnings (GAAP Basis)
$
545
$
1,874
(71
%)
$
6,742
$
6,803
(1
%)
Amortization of acquisition-related
intangibles (2)
267
490
(46
%)
1,385
2,125
(35
%)
Stock-based compensation (2)
443
365
21
%
1,752
1,561
12
%
Adjusted Net Earnings
$
1,255
$
2,729
(54
%)
$
9,879
$
10,489
(6
%)
Adjusted non-GAAP diluted earnings per
share
$
0.04
$
0.09
(56
%)
$
0.31
$
0.33
(6
%)
Fourth Quarter Ended
Twelve Months Ended
April 30,
April 30,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP Earnings Per Share
Net Earnings (GAAP Basis)
$
0.02
$
0.06
(67
%)
$
0.21
$
0.22
(5
%)
Amortization of acquisition-related
intangibles (2)
0.01
0.02
(50
%)
0.05
0.06
(17
%)
Stock-based compensation (2)
0.01
0.01
0
%
0.05
0.05
0
%
Adjusted Net Earnings
0.04
$
0.09
(56
%)
0.31
$
0.33
(6
%)
Fourth Quarter Ended
Twelve Months Ended
April 30,
April 30,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
Amortization of acquisition-related
intangibles
Cost of license
$
258
$
500
(48
%)
$
1,316
$
2,000
(34
%)
Operating expenses
53
97
(45
%)
284
387
(27
%)
Total amortization of
acquisition-related intangibles
$
311
$
597
(48
%)
$
1,600
$
2,387
(33
%)
Stock-based compensation
Cost of revenues
$
43
$
28
54
%
$
137
$
124
10
%
Research and development
41
33
24
%
158
131
21
%
Sales and marketing
51
75
(32
%)
311
264
18
%
General and administrative
382
309
24
%
1,421
1,232
15
%
Total stock-based compensation
$
517
$
445
16
%
$
2,027
$
1,751
16
%
(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 $0.02 and $0.22 for the three and
twelve months ended April 30, 2020, respectively. Diluted per share
for Class B shares under the two-class method are $0.06 and $0.22
for the three and twelve months ended April 30, 2019,
respectively.
(2) - Tax affected using the effective tax
rate excluding a discrete item related to excess tax benefit for
stock options for the three and twelve month periods ended April
30, 2020 of 14.3% and 13.5%, respectively and 17.9% and 14.0% three
and twelve month periods ended April 30, 2019, respectively.
nm- not meaningful
AMERICAN SOFTWARE,
INC.
Consolidated Balance Sheet
Information
(In thousands)
(Unaudited)
April 30,
April 30,
2020
2019
Cash and Cash Equivalents
$
79,814
$
61,288
Short-term Investments
14,161
24,710
Accounts Receivable:
Billed
22,582
18,819
Unbilled
2,425
1,475
Total Accounts Receivable, net
25,007
20,294
Prepaids & Other
6,684
6,210
Current Assets
125,666
112,502
Investments - Non-current
701
2,484
PP&E, net
3,373
3,585
Capitalized Software, net
8,362
11,063
Goodwill
25,888
25,888
Other Intangibles, net
1,132
2,732
Deferred Sales Commissions -
Non-current
2,177
1,546
Lease Right of Use Assets
2,053
-
Other Non-current Assets
1,941
1,510
Total Assets
$
171,293
$
161,310
Accounts Payable
$
1,643
$
2,448
Accrued Compensation and Related costs
6,160
2,561
Dividend Payable
3,547
3,434
Operating Lease Obligation - Current
763
-
Other Current Liabilities
643
1,375
Deferred Revenues - Current
34,227
33,283
Current Liabilities
46,983
43,101
Operating Lease Obligation -
Non-current
1,424
-
Deferred Tax Liability - Non-current
2,897
3,514
Other Long-term Liabilities
92
88
Long-term Liabilities
4,413
3,602
Total Liabilities
51,396
46,703
Shareholders' Equity
119,897
114,607
Total Liabilities & Shareholders'
Equity
$
171,293
$
161,310
AMERICAN SOFTWARE,
INC.
Condensed Consolidated
Cashflow Information
(In thousands)
(Unaudited)
Twelve Months Ended
April 30,
2020
2019
Net cash provided by operating
activities
$
25,506
$
23,930
Capitalized computer software development
costs
(3,170
)
(5,961
)
Purchases of property and equipment, net
of disposals
(420
)
(1,252
)
Net cash used in investing
activities
(3,590
)
(7,213
)
Dividends paid
(13,938
)
(13,590
)
Proceeds from exercise of stock
options
10,548
5,367
Net cash used in financing
activities
(3,390
)
(8,223
)
Net change in cash and cash
equivalents
18,526
8,494
Cash and cash equivalents at beginning of
period
61,288
52,794
Cash and cash equivalents at end of
period
$
79,814
$
61,288
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200618005782/en/
Financial Information Press Contact: Vincent C. Klinges Chief
Financial Officer American Software, Inc. (404) 264-5477
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