Subscription Fees Increased 57%, Cloud
Services Annual Contract Value Increased 58% and License Fees
Increased 115% for the Quarter
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the third quarter of fiscal year
2020.
Key Third quarter financial highlights:
- Subscription fees were $5.8 million for the quarter ended
January 31, 2020, a 57% increase compared to $3.7 million for the
same period last year.
- Software license fee revenues were $3.7 million, a 115%
increase compared to $1.7 million for the same period last
year.
- Cloud Services Annual Contract Value (ACV) increased
approximately 58% to $25.5 million as of the quarter ended January
31, 2020 compared to $16.1 million as of the same period of the
prior year.
- Total revenues for the quarter ended January 31, 2020 were
$30.6 million, an increase of 13% over the comparable period last
year.
- Recurring revenue streams for Maintenance and Cloud Services
were 54% of total revenues in the quarter ended January 31, 2020
compared to 56% in the same period of the prior year.
- Maintenance revenues for the quarter ended January 31, 2020
decreased 5% to $10.8 million compared to $11.4 million for the
same period last year.
- Professional services and other revenues for the quarter ended
January 31, 2020 increased 1% to $10.3 million compared to $10.2
million for the same period last year.
- Operating earnings for the quarter ended January 31, 2020
increased 32% to $2.8 million compared to $2.1 million for the same
period last year.
- GAAP net earnings for the quarter ended January 31, 2020
increased 43% to $3.3 million or $0.10 per fully diluted share
compared to $2.3 million or $0.07 per fully diluted share for the
same period last year.
- Adjusted net earnings for the quarter ended January 31, 2020,
which excludes non-cash stock-based compensation expense and
amortization of acquisition-related intangibles, were $4.0 million
or $0.12 per fully diluted share compared to $3.2 million or $0.10
per fully diluted share for the same period last year.
- EBITDA increased by 15% to $4.7 million for the quarter ended
January 31, 2020 compared to $4.1 million for the same period last
year.
- Adjusted EBITDA increased by 16% to $5.3 million for the
quarter ended January 31, 2020 compared to $4.6 million for the
same period last year. 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 2020 year to date financial highlights:
- Subscription fees were $15.8 million for the nine months ended
January 31, 2020, a 54% increase compared to $10.2 million for the
same period last year.
- Software license revenues were $6.5 million, a 20% increase
compared to $5.4 million for the same period last year.
- Total revenues for the nine months ended January 31, 2020
increased 5% to $86.2 million compared to $82.4 million for the
same period last year.
- Recurring revenue streams of Maintenance and Cloud Services
were 56% of total revenues for the nine-month period ended January
31, 2020 compared to 54% in the same period of the prior year.
- Maintenance revenues for the nine months ended January 31, 2020
were $32.7 million, a 6% decrease compared to $34.6 million for the
same period last year.
- Professional services and other revenues for the nine months
ended January 31, 2020 decreased 3% to $31.3 million compared to
$32.2 million for the same period last year.
- Operating earnings for the nine months ended January 31, 2020
increased 5% to approximately $4.5 million compared to $4.3 million
for the same period last year.
- GAAP net earnings were approximately $6.2 million or $0.19 per
fully diluted share for the nine months ended January 31, 2020, a
26% increase compared to $4.9 million or $0.16 per fully diluted
share for the same period last year.
- Adjusted net earnings for the nine months ended January 31,
2020, which exclude stock-based compensation expense and
amortization of acquisition-related intangibles, increased 11% to
$8.6 million or $0.27 per fully diluted share, compared to $7.8
million or $0.25 per fully diluted share for the same period last
year.
- EBITDA increased by 8% to $10.8 million for the nine months
ended January 31, 2020 compared to $9.9 million for the same period
last year.
- Adjusted EBITDA increased 9% to $12.3 million for the nine
months ended January 31, 2020 compared to $11.2 million for the
same period last year. 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 $96.3 million, an
increase of over $12 million when compared to January 31, 2019, and
no debt as of January 31, 2020. During the third quarter of fiscal
2020, the Company paid shareholder dividends of approximately $3.5
million.
“Overall, we had a very good third quarter and are pleased with
our performance year to date. During the third quarter, we saw a
marked improvement in our close rate driving a 57% growth in
Subscription Fees and 58% growth in Cloud Services ACV. These key
performance indicators continue to underscore our successful
transition to a cloud-first company,” said Allan Dow, president of
American Software. “During the quarter, we also closed a few
sizable perpetual license fee transactions with customers who had a
preference for capital investments over subscription-based
operating expenses. In total, we welcomed 11 new customers and
completed subscription or license fee transactions in 11
countries.”
“Our recurring revenue streams of Maintenance and Subscription
Cloud Services represented 54% and 56% of third quarter and year to
date total revenues, respectively. We expect the percentage of
recurring revenue to continue trending higher in the future, giving
our business and shareholders increased visibility with respect to
future revenue performance,” continued Dow.
“Our cloud-based platform provides customers with the increased
visibility and accuracy necessary to automate critical planning
functions, gain new insights and make better and faster decisions
across operational, tactical and strategic horizons,” stated Dow.
“We believe customers that take advantage of our advancements in
artificial intelligence (AI), machine learning (ML) and advanced
supply chain analytics to improve their operating performance from
product concept to customer availability will be better positioned
to overcome the growing supply chain talent shortage that may
impact their profitable growth and ability to respond to rapidly
changing market conditions or unanticipated supply chain
disruptions.”
Additional highlights for the third quarter of fiscal 2020
include:
Customers & Channels
- Notable new and existing customers placing orders with the
Company in the third quarter include: Americo Group, Berlin
Packaging, Cargill, Central Garden & Pet Company, Clarios,
Hunkem�ller International, Hybrid Promotions, Intertape Polymer,
Johnson Brothers Liquor, Marlow Foods, Mayoreo Ferreteria y
Acabados S.A., Open Systems, Pattonair, Rodan & Fields, Taylor
Farms, Tencate Geosynthetics, TechStyle Fashion Group, and
Weissman’s Theatrical Supplies.
- During the quarter, SaaS subscription and/or software license
agreements were signed with customers located in the following 11
countries: Australia, Canada, Costa Rica, France, Mexico,
Netherlands, New Zealand, Spain, Tunisia, United Kingdom, and
United States.
- Logility, Inc., a wholly owned subsidiary of the Company,
announced Hunkem�ller International, a ladies lingerie and clothing
manufacturer with more than 7,000 employees and 900 stores across
20 geographies, is able to optimize inventory performance, automate
allocation and replenishment planning processes, and free up time
for the planning team to focus on value-adding analysis and higher
impact decision-making opportunities with the Logility Digital
Planning Platform.
- New Generation Computing, Inc. (NGC), a wholly owned subsidiary
of the Company, announced that Jerry Leigh of California, Inc., a
global clothing manufacturer and brand management company, will
leverage our cloud platform to streamline product development and
accelerate lead times.
- During the quarter, NGC announced that renowned fashion
designer Nicole Miller is upgrading to our cloud based PLM solution
to support business initiatives to streamline product development
workflow and gain better visibility across the Nicole Miller supply
chain as the company expands the brand into new markets and more
categories.
- Logility hosted a webcast on the hot topic of Supply Chain
Talent in the Digital Age, featuring Karen Smith of Kontoor Brands,
a Logility customer, Scott W. Luton, Supply Chain Now Radio, Sean
Willems, University of Tennessee, and Karin Bursa, Logility. The
live event on December 4th explored how organizations can attract
and retain skilled supply chain talent and the programs to help
drive professional growth and supply chain performance in the
digital age.
Company and Technology
- At NRF 2020: Retail’s Big Show, Logility highlighted the
company’s leadership in the always-on retail revolution. By
harnessing traditionally disparate data sources and real-time
market signals to remove risk and deliver a synchronized plan from
product concept to customer availability, the Logility Digital
Planning Platform helps retailers automate routine processes and
augment valuable talent resources by transforming retail planning
and execution.
- Also at NRF 2020: Retail’s Big Show, Logility announced the
availability of enhanced new product introduction capabilities to
help retailers and brand owners harness insights to accelerate
decision making and strategically plan, design, source, allocate
and replenish merchandise to improve the likelihood of full-price
sell-through.
- Logility and NGC were both honored by industry publication RIS
News in the annual 2020 RIS Software LeaderBoard. Logility received
nine #1 rankings and NGC received seven #1 rankings. In its 19th
year, the RIS Software LeaderBoard identifies vendors who offer
powerful, flexible and reliable enterprise solutions to retailers
and receive high customer satisfaction rankings through an end-user
survey.
- During the quarter, Logility announced industry publication
Food Logistics named the company to the 2019 FL100+ Top Software
and Technology Provider list. This marks the 16th consecutive year
Logility has received this recognition for the ability to boost
food and beverage industry supply chain performance.
- Logility announced its continued support of The Empty Stocking
Fund, an organization that helps bring holiday cheer to more than
40,000 children living in poverty across nine Atlanta area
counties. Continuing its annual sponsor-a-child tradition with
employee and company contributions, Logility was able to fill the
stockings of 1,700 children during the 2019 holiday season.
Logility employees also volunteered at Santa’s Village to
personally help select the perfect gifts for children.
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 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.
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 of Logility,
Inc.; Demand Solutions® is a registered trademark of Demand
Management, 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)
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
Revenues:
Subscription fees
$
5,802
$
3,687
57
%
$
15,752
$
10,196
54
%
License fees
3,695
1,718
115
%
6,519
5,432
20
%
Professional services & other
10,308
10,176
1
%
31,271
32,240
(3
%)
Maintenance
10,795
11,422
(5
%)
32,651
34,567
(6
%)
Total Revenues
30,600
27,003
13
%
86,193
82,435
5
%
Cost of Revenues:
Subscription services
1,976
1,389
42
%
6,711
3,746
79
%
License fees
1,582
1,831
(14
%)
3,969
5,305
(25
%)
Professional services & other
7,764
7,714
1
%
22,712
24,484
(7
%)
Maintenance
1,836
2,030
(10
%)
5,551
6,442
(14
%)
Total Cost of Revenues
13,158
12,964
1
%
38,943
39,977
(3
%)
Gross Margin
17,442
14,039
24
%
47,250
42,458
11
%
Operating expenses:
Research and development
4,659
4,884
(5
%)
14,087
13,980
1
%
Less: capitalized development
(806
)
(2,073
)
(61
%)
(2,697
)
(4,162
)
(35
%)
Sales and marketing
5,519
4,699
17
%
16,246
15,183
7
%
General and administrative
5,194
4,302
21
%
14,890
12,903
15
%
Provision for doubtful accounts
-
-
-
33
-
nm
Amortization of acquisition-related
intangibles
57
97
(41
%)
232
291
(20
%)
Total Operating Expenses
14,623
11,909
23
%
42,791
38,195
12
%
Operating Earnings
2,819
2,130
32
%
4,459
4,263
5
%
Interest Income & Other, Net
978
527
86
%
2,215
1,090
103
%
Earnings Before Income Taxes
3,797
2,657
43
%
6,674
5,353
25
%
Income Tax Expense
511
356
44
%
477
424
13
%
Net Earnings
$
3,286
$
2,301
43
%
$
6,197
$
4,929
26
%
Earnings per common share: (1)
Basic
$
0.10
$
0.07
43
%
$
0.20
$
0.16
25
%
Diluted
$
0.10
$
0.07
43
%
$
0.19
$
0.16
19
%
Weighted average number of common
shares outstanding:
Basic
31,955
31,010
31,611
30,887
Diluted
32,668
31,183
32,260
31,351
nm- not meaningful
AMERICAN SOFTWARE,
INC.
NON-GAAP MEASURES OF
PERFORMANCE
(In thousands, except per
share data, unaudited)
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP Operating Earnings:
Operating Income (GAAP Basis)
$
2,819
$
2,130
32
%
$
4,459
$
4,263
5
%
Amortization of acquisition-related
intangibles
315
597
(47
%)
1,289
1,791
(28
%)
Stock-based compensation
564
466
21
%
1,509
1,308
15
%
NON-GAAP Operating Earnings:
3,698
3,193
16
%
7,257
7,362
(1
%)
Non-GAAP Operating Earnings, as a % of
revenue
12
%
12
%
8
%
9
%
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP EBITDA:
Net Earnings (GAAP Basis)
$
3,286
$
2,301
43
%
$
6,197
$
4,929
26
%
Income Tax Expense
511
356
44
%
477
424
13
%
Interest Income & Other, Net
(978
)
(527
)
86
%
(2,215
)
(1,090
)
103
%
Amortization of intangibles
1,723
1,792
(4
%)
5,834
5,184
13
%
Depreciation
159
168
(5
%)
476
487
(2
%)
EBITDA (earnings before interest,
taxes, depreciation and amortization)
4,701
4,090
15
%
10,769
9,934
8
%
Stock-based compensation
564
466
21
%
1,509
1,308
15
%
Adjusted EBITDA
$
5,265
$
4,556
16
%
$
12,278
$
11,242
9
%
EBITDA, as a percentage of
revenues
15
%
15
%
12
%
12
%
Adjusted EBITDA, as a percentage of
revenues
17
%
17
%
14
%
14
%
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP EARNINGS PER SHARE:
Net Earnings (GAAP Basis)
$
3,286
$
2,301
43
%
$
6,197
$
4,929
26
%
Amortization of acquisition-related
intangibles (2)
273
519
(47
%)
1,119
1,649
(32
%)
Stock-based compensation (2)
488
405
20
%
1,309
1,204
9
%
Adjusted Net Earnings
$
4,047
$
3,225
25
%
$
8,625
$
7,782
11
%
Adjusted non-GAAP diluted earnings per
share
$
0.12
$
0.10
20
%
$
0.27
$
0.25
8
%
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP Earnings Per Share
Net Earnings (GAAP Basis)
$
0.10
$
0.07
43
%
$
0.19
$
0.16
19
%
Amortization of acquisition-related
intangibles (2)
0.01
0.02
(50
%)
0.04
0.05
(20
%)
Stock-based compensation (2)
0.01
0.01
0
%
0.04
0.04
0
%
Adjusted Net Earnings
0.12
$
0.10
20
%
0.27
$
0.25
8
%
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
Amortization of acquisition-related
intangibles
Cost of license
$
258
$
500
(48
%)
$
1,057
$
1,500
(30
%)
Operating expenses
57
97
(41
%)
232
291
(20
%)
Total amortization of
acquisition-related intangibles
$
315
$
597
(47
%)
$
1,289
$
1,791
(28
%)
Stock-based compensation
Cost of revenues
$
43
$
35
23
%
$
94
$
96
(2
%)
Research and development
44
35
26
%
117
98
19
%
Sales and marketing
102
71
44
%
260
189
38
%
General and administrative
375
325
15
%
1,038
925
12
%
Total stock-based compensation
$
564
$
466
21
%
$
1,509
$
1,308
15
%
(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 $0.10 and $0.20 for the three and
nine months ended January 31, 2020, respectively. Diluted per share
for Class B shares under the two-class method are $0.07 and $0.16
for the three and nine months ended Janaury 31, 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 nine month periods ended January
31, 2020 and 2019.
nm- not meaningful
AMERICAN SOFTWARE,
INC.
Consolidated Balance Sheet
Information
(In thousands)
(Unaudited)
January 31,
April 30,
2020
2019
Cash and Cash Equivalents
$
68,809
$
61,288
Short-term Investments
27,478
24,710
Accounts Receivable:
Billed
21,202
18,819
Unbilled
2,436
1,475
Total Accounts Receivable, net
23,638
20,294
Prepaids & Other
6,576
6,210
Current Assets
126,501
112,502
Investments - Non-current
-
2,484
PP&E, net
3,447
3,585
Capitalized Software, net
9,215
11,063
Goodwill
25,888
25,888
Other Intangibles, net
1,444
2,732
Deferred Sales Commissions -
Non-current
2,231
1,546
Lease Right of Use Assets
2,228
-
Other Non-current Assets
1,738
1,510
Total Assets
$
172,692
$
161,310
Accounts Payable
$
1,772
$
2,448
Accrued Compensation and Related costs
6,006
2,561
Dividend Payable
3,522
3,434
Operating Lease Obligation - Current
770
-
Other Current Liabilities
1,520
1,375
Deferred Revenues - Current
34,419
33,283
Current Liabilities
48,009
43,101
Operating Lease Obligation -
Non-current
1,596
-
Deferred Tax Liability - Non-current
3,322
3,514
Other Long-term Liabilities
93
88
Long-term Liabilities
5,011
3,602
Total Liabilities
53,020
46,703
Shareholders' Equity
119,672
114,607
Total Liabilities & Shareholders'
Equity
$
172,692
$
161,310
AMERICAN SOFTWARE,
INC.
Condensed Consolidated
Cashflow Information
(In thousands)
(Unaudited)
Nine Months Ended
January 31,
2020
2019
Net cash provided by operating
activities
$
13,112
$
13,608
Capitalized computer software development
costs
(2,697
)
(4,162
)
Purchases of property and equipment, net
of disposals
(339
)
(1,014
)
Net cash used in investing
activities
(3,036
)
(5,176
)
Dividends paid
(10,392
)
(10,172
)
Proceeds from exercise of stock
options
7,837
4,004
Net cash used in financing
activities
(2,555
)
(6,168
)
Net change in cash and cash
equivalents
7,521
2,264
Cash and cash equivalents at beginning of
period
61,288
52,794
Cash and cash equivalents at end of
period
$
68,809
$
55,058
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200220005826/en/
Financial Information Press Contact: Vincent C. Klinges Chief
Financial Officer American Software, Inc. (404) 264-5477
American Software (NASDAQ:AMSWA)
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American Software (NASDAQ:AMSWA)
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From Apr 2023 to Apr 2024