American Software, Inc. (NASDAQ: AMSWA) today reported preliminary
financial results for the first quarter of fiscal 2014. The Company has
delivered 50 consecutive quarters of profitability.
Key first quarter financial metrics:
-
Total revenues for the quarter ended July 31, 2013 were $23.3 million,
a decrease of 10% over the comparable period last year.
-
Software license fee revenues for the quarter ended July 31, 2013 were
$3.2 million, a decrease of 37% over the same period last year.
-
Services and other revenues for the quarter ended July 31, 2013 were
$11.2 million compared to $12.5 million for the same period last year,
a decrease of 10%.
-
Maintenance revenues for the quarter ended July 31, 2013 were $8.9
million compared to $8.3 million, an increase of 6% over the same
period last year.
-
Operating earnings for the quarter ended July 31, 2013 were $2.4
million, a decrease of 36% compared to the same period last year.
-
GAAP net earnings for the quarter ended July 31, 2013 were $1.6
million or $0.06 per fully diluted share, a decrease of 34% over the
same period last year.
-
Adjusted net earnings for the quarter ended July 31, 2013, which
excludes stock-based compensation expense and amortization of
acquisition-related intangibles, were $1.9 million or $0.07 per fully
diluted share compared to $2.7 million or $0.10 per fully diluted
share for the same period last year, which also excluded stock-based
compensation expense and amortization of acquisition-related
intangibles.
-
Adjusted EBITDA was $3.8 million for the quarter ended July 31, 2013
compared to $5.2 million for the quarter ended July 31, 2012. Adjusted
EBITDA represents GAAP net earnings adjusted for amortization of
intangibles, depreciation, interest income & other, net, income tax
expense, stock-based compensation, and other significant non-routine
operating and non-operating income and expense items, if applicable.
The Company is including 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 non-GAAP net earnings and non-GAAP per share
measures used by other companies. The Company believes that this
presentation of 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.
The overall financial condition of the Company remains strong, with no
debt and with cash and investments of approximately $70.6 million as of
July 31, 2013. The Company increased cash and investments by
approximately $4.3 million when compared to July 31, 2012.
“First quarter license revenue was below our expectations,” stated Mike
Edenfield, president and CEO of American Software. “The global economic
outlook appears to be undermining business confidence and the ability to
commit capital to improve their supply chains. During the quarter,
several larger opportunities were delayed and pushed out into the
future. However, some of these have recently started negotiations with
the Company.
“Amidst these unpredictable market conditions it’s important for
companies to increase visibility and become more flexible. The automated
supply chain management solutions in our software portfolio enable
companies to better plan and re-plan, react faster, and adapt in ways
they never have before,” continued Edenfield. “With improved visibility
into real-time supply conditions and collaboration within their
businesses as well as with customers and suppliers, companies are
boosting operational efficiency and managing inventory investments with
greater precision and a keen focus on customer service.”
Additional highlights for the first quarter of fiscal 2014 include:
Customers & Channels
-
Notable new and existing customers placing orders with the Company in
the first quarter include: AGC Glass Products Company, Balkamp,
Brightstar, Dolce Vita Footwear, Eveready Battery Company, Grainger
Colombia, Hexcel Corporation, MEGlobal International FZE, Reliable
Automatic Sprinkler, and Rocky Brands.
-
During the quarter, software license agreements were signed with
customers located in the following 11 countries: Australia, Brazil,
Canada, China, Colombia, Japan, New Zealand, Sweden, the United Arab
Emirates, the United Kingdom and the United States.
-
NGC® Software, a wholly-owned subsidiary of the Company,
announced during the quarter that Cary Francis Group, a merchandising,
marketing support and fulfillment company, implemented NGC’s Extended
PLM software as an integrated solution for product lifecycle
management, global sourcing/supply chain management, and CPSIA
compliance.
-
Logility, a wholly-owned subsidiary of the Company, congratulated its
customers Craft Brew Alliance, PartyLite and Sonoco Products on being
named recipients of Manufacturing Executive’s 2013 Manufacturing
Leadership 100 Award. Craft Brew Alliance and PartyLite’s winning
projects in the Global Value Chain category highlighted each company’s
successful programs to optimize their supply chains through the use of
Logility Voyager Solutions™. Sonoco Products was recognized in the
Operational Excellence category for its use of Voyager Solutions to
improve its production, supply, demand, and S&OP processes to reduce
costs and enhance agility.
-
Logility recognized the 25 recipients of the annual Gartner Supply
Chain Top 25. In its ninth year, the 2013 Gartner Research Supply
Chain Top 25 recognized 9 Logility customers for their innovation and
ability to develop and execute advanced supply chain principles. In
all, nearly 40 percent of the Top 25 rely on Logility Voyager
Solutions™ and Demand Solutions® to power their supply chain success.
Company & Technology
-
Logility announced its ability to dramatically increase the speed and
simplicity of supply chain to ERP integration. Through its work with
AdapChain, Logility has reduced the cost and complexity associated
with integration of our best-of-breed supply chain management software
with enterprise resource planning (ERP) systems such as those from
SAP, Oracle, Infor, and others. Logility’s template-based approach
allows high-performance integrations to be completed in 30 to 60 days,
at much lower risk and overall cost.
-
Logility Cloud Services, a comprehensive deployment portfolio,
provides a flexible menu of services to accelerate the benefits of
supply chain initiatives. Building on more than 10 years of cloud
deployment experience, Logility’s customers are able to tap into the
industry-leading and award-winning capabilities of Logility Voyager
Solutions™ either as a Software-as-a-Service (SaaS), Hosted or
On-Premise deployment.
-
Demand Management, Inc., a wholly-owned subsidiary of Logility,
announced the availability of the Demand Solutions®
platform as a software as a service (SaaS) offering. This cloud-based
release includes all the same functionality as the on-premise Demand
Solutions platform, but is hosted remotely and available on a
subscription basis.
-
Demand Management, Inc. announced the availability of business
intelligence (BI) functionality within its Demand Solutions DSX
platform. The solution now incorporates native BI into its data tables
allowing users the ability to mine and share data efficiently across
the supply chain.
-
During the first quarter, Demand Management Inc. launched the addition
of sophisticated workflow technology to its Demand Solutions DSX
supply chain planning suite. The new functionality enables customers
to fully configure workflow by user and role.
-
Demand Management Inc. added Social™ Supply Chain and Social™ S&OP
capabilities to its Demand Solutions DSX supply chain planning
platform. This inventive use of social media technology is designed to
help increasingly global manufacturers and distributors connect in
real time to reduce cycle times and accelerate sales and operations
planning.
-
Demand Management unveiled a Predictive Lead Time module for the
Demand Solutions DSX platform. This feature offers users an advanced
degree of precision in inventory planning which takes into account
seasonal variables and enables better risk management visibility.
-
Demand Management, Inc. was named to the prestigious Top 100 Great
Supply Chain Partner list by SupplyChainBrain. This is the company’s
eighth time appearing on the list. Customers nominated the company for
its significant impact on their efficiency, service and overall supply
chain performance.
-
Logility was recognized as one of the top workplaces in Atlanta for
the third consecutive year. The recognition is based on an Atlanta
Journal-Constitution survey completed by employees of the Atlanta-area.
-
The editors of Supply & Demand Chain Executive named Logility, Demand
Management and New Generation Computing to the 2013 Supply & Demand
Chain Executive 100. The award highlights the "100 Great Supply Chain
Projects" of the past year and marked the 11th year Logility has been
honored and fifth year Demand Management has been recognized for
enabling extraordinary supply chain initiatives.
-
Logility, Demand Management and New Generation Computing were each
recognized by Inbound Logistics as 2013 Top 100 Logistics IT
Providers. This marks the 16th consecutive year Logility
has been recognized and highlights each company’s ability to enable
logistics excellence through innovative supply chain management
solutions.
About American Software, Inc.
Atlanta-based American Software (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 solutions to optimize the supply chain. Logility Voyager
Solutions™ is a complete supply chain management solution suite that
features a performance monitoring architecture and provides supply chain
visibility; demand, inventory and replenishment planning; sales and
operations planning (S&OP); supply and inventory optimization;
manufacturing planning and scheduling; transportation planning and
management; and warehouse management. Logility customers include Fender
Musical Instruments, Hewlett-Packard, Parker Hannifin, Sigma-Aldrich,
Verizon Wireless, and VF Corporation. Demand Management, Inc., a
wholly-owned subsidiary of Logility, delivers supply chain solutions to
small and midsized manufacturers, distributors and retailers. Demand
Management’s Demand Solutions® suite is widely deployed and
globally recognized for forecasting, demand planning and point-of-sale
analysis. Demand Management serves customers such as Avery Dennison
Corporation and Lonely Planet. New Generation Computing®
(NGC®), a wholly-owned subsidiary of
American Software, is a leading provider of PLM, supply chain
management, ERP and product testing software and services for brand
owners, retailers and consumer products companies. NGC customers include
A|X Armani Exchange, Aeropostale, Billabong, Carter’s, Casual Male, Hugo
Boss, Jos. A. Bank, FGL Group, Spanx, Athletica, Marchon Eyewear, and
Swatfame. For more information about American Software, 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, continuing U.S. and global economic uncertainty, the
timing and degree of business recovery, unpredictability and the
irregular pattern of future revenues, dependence on particular market
segments or customers, competitive pressures, delays, product liability
and warranty claims and other risks associated with new product
development, undetected software errors, market acceptance of the
Company’s products, technological complexity, the challenges and risks
associated with integration of acquired product lines, companies and
services, as well as a number of other risk factors that could affect
the Company’s future performance. 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)
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Ended
|
|
|
|
|
July 31,
|
|
|
|
|
2013
|
|
2012
|
|
Pct Chg.
|
Revenues:
|
|
|
|
|
|
|
|
License
|
$
|
3,218
|
|
|
$
|
5,082
|
|
|
(37
|
%)
|
|
Services & other
|
|
11,228
|
|
|
|
12,495
|
|
|
(10
|
%)
|
|
Maintenance
|
|
8,872
|
|
|
|
8,337
|
|
|
6
|
%
|
|
|
Total Revenues
|
|
23,318
|
|
|
|
25,914
|
|
|
(10
|
%)
|
|
|
|
|
|
|
|
|
|
Cost of Revenues:
|
|
|
|
|
|
|
|
License
|
|
1,161
|
|
|
|
1,369
|
|
|
(15
|
%)
|
|
Services & other
|
|
8,040
|
|
|
|
8,623
|
|
|
(7
|
%)
|
|
Maintenance
|
|
1,962
|
|
|
|
1,912
|
|
|
3
|
%
|
|
|
Total Cost of Revenues
|
|
11,163
|
|
|
|
11,904
|
|
|
(6
|
%)
|
Gross Margin
|
|
12,155
|
|
|
|
14,010
|
|
|
(13
|
%)
|
Operating expenses:
|
|
|
|
|
|
|
|
Research and development
|
|
2,817
|
|
|
|
2,969
|
|
|
(5
|
%)
|
|
Less: capitalized development
|
|
(717
|
)
|
|
|
(863
|
)
|
|
(17
|
%)
|
|
Sales and marketing
|
|
4,394
|
|
|
|
4,821
|
|
|
(9
|
%)
|
|
General and administrative
|
|
3,153
|
|
|
|
3,110
|
|
|
1
|
%
|
|
Provision for doubtful accounts
|
|
-
|
|
|
|
127
|
|
|
nm
|
|
Amortization of acquisition-related intangibles
|
|
125
|
|
|
|
125
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
9,772
|
|
|
|
10,289
|
|
|
(5
|
%)
|
Operating Earnings
|
|
2,383
|
|
|
|
3,721
|
|
|
(36
|
%)
|
|
Interest Income & Other, Net
|
|
44
|
|
|
|
273
|
|
|
(84
|
%)
|
Earnings Before Income Taxes
|
|
2,427
|
|
|
|
3,994
|
|
|
(39
|
%)
|
Income Tax Expense
|
|
834
|
|
|
|
1,572
|
|
|
(47
|
%)
|
Net Earnings
|
$
|
1,593
|
|
|
$
|
2,422
|
|
|
(34
|
%)
|
Earnings per common share: (1)
|
|
|
|
|
|
|
|
Basic
|
$
|
0.06
|
|
|
$
|
0.09
|
|
|
(33
|
%)
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.09
|
|
|
(33
|
%)
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
27,363
|
|
|
|
27,072
|
|
|
|
|
|
|
Diluted
|
|
27,815
|
|
|
|
27,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nm- not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERICAN SOFTWARE, INC.
|
NON-GAAP MEASURES OF PERFORMANCE
|
(In thousands, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Ended
|
|
|
|
|
July 31,
|
|
|
|
|
2013
|
|
2012
|
|
Pct Chg.
|
NON-GAAP EARNINGS PER SHARE:
|
|
|
|
|
|
|
Net Earnings (GAAP Basis)
|
$
|
1,593
|
|
|
$
|
2,422
|
|
|
(34
|
%)
|
|
Income tax expense
|
|
834
|
|
|
|
1,572
|
|
|
(47
|
%)
|
|
Interest Income & Other, Net
|
|
(44
|
)
|
|
|
(273
|
)
|
|
(84
|
%)
|
|
Amortization of intangibles
|
|
768
|
|
|
|
769
|
|
|
0
|
%
|
|
Depreciation
|
|
261
|
|
|
|
274
|
|
|
(5
|
%)
|
EBITDA (earnings before interest, taxes, depreciation and
amortization)
|
|
3,412
|
|
|
|
4,764
|
|
|
(28
|
%)
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
338
|
|
|
|
391
|
|
|
(14
|
%)
|
Adjusted EBITDA
|
$
|
3,750
|
|
|
$
|
5,155
|
|
|
(27
|
%)
|
|
|
|
|
|
|
|
|
|
EBITDA, as a percentage of revenues
|
|
15
|
%
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA, as a percentage of revenues
|
|
16
|
%
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Ended
|
|
|
|
July 31,
|
|
|
|
|
2013
|
|
2012
|
|
Pct Chg.
|
NON-GAAP EARNINGS PER SHARE:
|
|
|
|
|
|
|
Net Earnings (GAAP Basis)
|
$
|
1,593
|
|
|
$
|
2,422
|
|
|
(34
|
%)
|
|
Amortization of acquisition-related intangibles (2)
|
|
82
|
|
|
|
76
|
|
|
8
|
%
|
|
Stock-based compensation (2)
|
|
222
|
|
|
|
237
|
|
|
(6
|
%)
|
Adjusted Net Earnings
|
$
|
1,897
|
|
|
$
|
2,735
|
|
|
(31
|
%)
|
|
|
|
|
|
|
|
|
|
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 $0.06 and $0.09 for the three months ended July 31, 2013
and 2012.
|
|
(2) - Tax affected using the effective tax rate for the three months
period ended July 31, 2013 and 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERICAN SOFTWARE, INC.
|
Consolidated Balance Sheet Information
|
(In thousands)
|
(Unaudited)
|
|
|
|
July 31,
|
|
April 30,
|
|
|
|
|
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Short-term Investments
|
$
|
63,457
|
|
|
$
|
59,766
|
|
|
|
|
Accounts Receivable:
|
|
|
|
|
|
|
|
Billed
|
|
10,621
|
|
|
|
13,179
|
|
|
|
|
|
Unbilled
|
|
2,616
|
|
|
|
3,741
|
|
|
|
|
Total Accounts Receivable, net
|
|
13,237
|
|
|
|
16,920
|
|
|
|
|
Prepaids & Other
|
|
2,846
|
|
|
|
3,162
|
|
|
|
|
Current Assets
|
|
79,540
|
|
|
|
79,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments - Non-current
|
|
7,103
|
|
|
|
6,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PP&E, net
|
|
4,255
|
|
|
|
4,482
|
|
|
|
|
Capitalized Software, net
|
|
8,800
|
|
|
|
8,708
|
|
|
|
|
Goodwill
|
|
12,601
|
|
|
|
12,601
|
|
|
|
|
Other Intangibles, net
|
|
544
|
|
|
|
687
|
|
|
|
|
Other Non-current Assets
|
|
86
|
|
|
|
86
|
|
|
|
|
Total Assets
|
$
|
112,929
|
|
|
$
|
113,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable
|
$
|
963
|
|
|
$
|
1,207
|
|
|
|
|
Accrued Compensation and Related costs
|
|
2,258
|
|
|
|
2,961
|
|
|
|
|
Other Current Liabilities
|
|
3,226
|
|
|
|
2,969
|
|
|
|
|
Deferred Tax Liability - Current
|
|
112
|
|
|
|
332
|
|
|
|
|
Deferred Revenues
|
|
19,606
|
|
|
|
21,291
|
|
|
|
|
|
|
Current Liabilities
|
|
26,165
|
|
|
|
28,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Liability - Long term
|
|
1,092
|
|
|
|
1,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity
|
|
85,672
|
|
|
|
83,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities & Shareholders' Equity
|
$
|
112,929
|
|
|
$
|
113,070
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