Adjusted EBITDA Margin of 16% on
Subscription Fee Growth of 19%
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the second quarter of fiscal year
2023.
Key Second Quarter Financial Highlights:
- Subscription fees were $12.3 million for the quarter ended
October 31, 2022, a 19% increase compared to $10.4 million for the
same period last year, and software license revenues were $0.7
million compared to $0.8 million for the same period last
year.
- Total revenues for the quarter ended October 31, 2022 increased
1% to $31.4 million, compared to $31.2 million for the same period
of the prior year.
- Recurring revenue streams for Maintenance and Cloud
Subscriptions were $21.2 million or 67% of total revenues in the
quarter ended October 31, 2022 compared to $19.6 million or 63% in
the same period of the prior year.
- Maintenance revenues for the quarter ended October 31, 2022
decreased 5% to $8.8 million compared to $9.3 million for the same
period last year reflecting the shift to cloud revenue as a client
preference.
- Professional services and other revenues for the quarter ended
October 31, 2022 decreased 11% to $9.6 million compared to $10.8
million for the same period last year. For the Supply Chain
business, professional services revenues for the quarter ended
October 31, 2022 decreased by 1% to $5.2 million when compared to
$5.3 million in the same period prior year.
- Operating earnings for the quarter ended October 31, 2022
increased 3% to $2.8 million compared to $2.7 million for the same
period last year.
- GAAP net earnings for the quarter ended October 31, 2022
decreased 37% to $2.1 million or $0.06 per fully diluted share
compared to $3.3 million or $0.10 per fully diluted share for the
same period last year.
- Adjusted net earnings for the quarter ended October 31, 2022,
which excludes non-cash stock-based compensation expense and
amortization of acquisition-related intangibles, decreased 21% to
$3.3 million or $0.10 per fully diluted share compared to $4.2
million or $0.12 per fully diluted share for the same period last
year.
- EBITDA decreased by 3% to $3.6 million for the quarter ended
October 31, 2022 compared to $3.7 million for the same period last
year.
- Adjusted EBITDA increased by 4% to $4.9 million for the quarter
ended October 31, 2022 compared to $4.8 million for the same period
last year. Adjusted EBITDA represents GAAP net earnings adjusted
for amortization of intangibles, depreciation, interest
(loss)/income & other, net, income tax expense and non-cash
stock-based compensation expense.
Key Fiscal 2023 Year to Date Financial Highlights:
- Subscription fees were $24.4 million for the six months ended
October 31, 2022, a 21% increase compared to $20.1 million for the
same period last year, while Software license revenues were $1.0
million compared to $1.3 million for the same period last
year.
- Total revenues for the six months ended October 31, 2022
increased 4% to $62.7 million compared to $60.5 million for the
same period last year.
- Recurring revenue streams for Maintenance and Cloud Services
were $42.1 million and $38.9 million or 67% and 64% of total
revenues for the six-month periods ended October 31, 2022 and 2021,
respectively.
- Maintenance revenues for the six months ended October 31, 2022
were $17.7 million, a 5% decrease compared to $18.7 million for the
same period last year.
- Professional services and other revenues for the six months
ended October 31, 2022 decreased 3% to $19.6 million compared to
$20.3 million for the same period last year.
- For the six months ended October 31, 2022, the Company reported
operating earnings of approximately $5.3 million compared to $4.5
million for the same period last year, a 19% increase.
- GAAP net earnings were approximately $4.2 million or $0.12 per
fully diluted share for the six months ended October 31, 2022, a
33% decrease compared to $6.3 million or $0.18 per fully diluted
share for the same period last year.
- Adjusted net earnings for the six months ended October 31,
2022, which exclude stock-based compensation expense and
amortization of acquisition-related intangibles, decreased 16% to
$6.6 million or $0.19 per fully diluted share, compared to $7.8
million or $0.23 per fully diluted share for the same period last
year.
- EBITDA increased by 4% to $6.9 million for the six months ended
October 31, 2022 compared to $6.6 million for the same period last
year.
- Adjusted EBITDA increased 13% to $9.6 million for the six
months ended October 31, 2022 compared to $8.4 million for the six
months ended October 31, 2021. Adjusted EBITDA represents GAAP net
earnings adjusted for amortization of intangibles, depreciation,
interest (loss)/income & other, net, income tax expense and
non-cash stock-based compensation.
Key Second Quarter of Fiscal Year 2023 highlights:
Clients & Channels
- Notable new and existing customers placing orders with the
Company in the second quarter include: Fastenal Company, Grand
& Toy Ltd., Great Lakes Cheese Company, Inc., Herbalife
Nutrition, Jackson Family Enterprises, Inc., Niagara Bottling,
LLC., Ralph Lauren Inc., WEG Industries, and Workwear Outfitters
LLC.
- During the quarter, SaaS subscription and/or software license
agreements were signed with customers located in the following six
countries: Australia, Brazil, Canada, India, the United Kingdom,
and the United States.
- With its partner ecosystem continuing to play an important role
in the company’s growth strategy, Logility formalized partnership
agreements with Parker Avery and Wipro Ltd.
- Logility celebrated Supply & Demand Chain Executive’s 2022
Women in Supply Chain Award, as it saw leaders at its clients ORBIS
Corporation and Polymer Group take home the distinction.
Company & Technology
- The 2022 Gartner Critical Capabilities for Supply Chain
Planning Solutions positioned Logility above average in 13 of 15
use cases, placing the Company among the top three evaluated
vendors in this competitive market.
- In September, Logility was named a Leader in four IDC
MarketScapes for Supply Chain Planning Solutions. In these reports,
IDC assesses the capabilities and business strategies of key
vendors with broad competencies in each category.
- In October, Logility received the Gartner Peer Insights
Customers’ Choice distinction for Supply Chain Planning Solutions.
The designation recognizes vendor software products most value by
IT Enterprise professionals, based on high customer ratings.
- In recognition of its work with iNova Pharmaceuticals, Logility
was recognized as one of SupplyChainBrain’s 2022 100 Great Supply
Chain Partners, now for sixteen years running.
- Logility bolstered its leadership team with the appointment of
Tricia Brenn as Executive Vice President of Talent, and Kevin
McInturff was promoted to Chief Technology Officer during the
quarter.
The overall financial condition of the Company remains strong,
with cash and investments of approximately $106.8 million. During
the second quarter of fiscal year 2023, the Company paid
shareholder dividends of approximately $3.7 million.
“We were pleased to see our adjusted EBITDA margin expand
sequentially and year-over-year to nearly 16% despite delayed
project starts that impacted our revenue in Q2,” said Allan Dow,
CEO and President of American Software. “Although we are adjusting
our revenue guidance lower to account for these delays, we are
increasing our adjusted EBITDA expectations to reflect the strong
performance to date and a more measured pace of investment amid the
current global economic environment.”
Fiscal Year 2023 Financial Outlook
- Total revenues of $125.5 million to $127.5 million, including
total recurring revenues of $85.5 million to $87.5 million.
- Adjusted EBITDA of $18.0 million to $20.0 million.
About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA),
through its operating entity Logility delivers an innovative
technical platform that enables enterprises to accelerate their
digital supply chain transformation from product concept to client
availability via the Logility® Digital Supply Chain Platform, a
single platform spanning Product, Demand, Inventory, Supply,
Sourcing, Deploy, Corporate Responsibility (ESG) and Network
Optimization aligned with Integrated Business Planning.
Serving clients such as Big Lots, Carter’s, Destination XL,
Hostess, Husqvarna Group, Jockey International, Johnson Controls,
Parker Hannifin, Red Wing Shoe Company, Spanx, Trident Seafoods
Corporation, and WEG; our solutions are marketed and sold through a
direct sales team as well as an indirect global value-added
reseller (“VAR”) distribution network.
Fueled by supply chain master data, allowing for the automation
of critical business processes through the application of
artificial intelligence and machine learning algorithms to a
variety of internal and external data streams, the comprehensive
Logility portfolio delivered in the cloud 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, network design
and optimization (NDO), retail merchandise and assortment planning
and allocation, product lifecycle management (PLM), sourcing
management, vendor quality and compliance, and product
traceability. For more information about Logility, please visit
www.logility.com. Logility is a wholly-owned subsidiary and
operating entity for American Software, Inc. (NASDAQ: AMSWA). You
can learn more about American Software at www.amsoftware.com, or by
calling (404) 364-7615 or emailing kliu@amsoftware.com.
Operating and Non-GAAP Financial Measures
The Company includes 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
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. EBITDA
represents GAAP net earnings adjusted for amortization of
intangibles, depreciation, interest (loss)/income & other, net,
and income tax expense. Adjusted EBITDA represents GAAP net
earnings adjusted for amortization of intangibles, depreciation,
interest (loss)/income & other, net, income tax
expense/(benefit) 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 or performance to differ
materially from what is anticipated by statements made herein.
These factors include, but are not limited to, continuing U.S. and
global economic uncertainty and the timing and degree of business
recovery; the irregular pattern of the Company’s revenues;
dependence on particular market segments or customers; competitive
pressures; market acceptance of the Company’s products and
services; technological complexity; undetected software errors;
potential product liability or warranty claims; risks associated
with new product development; the challenges and risks associated
with integration of acquired product lines, companies and services;
uncertainty about the viability and effectiveness of strategic
alliances; 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; 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 SEC. For more information, contact:
Kevin Liu, American Software, Inc., (626) 657-0013 or email
kliu@amsoftware.com.
Logility® is a registered trademark of Logility, 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,
2022
2021
Pct Chg.
2022
2021
Pct Chg.
Revenues: Subscription fees
$
12,326
$
10,361
19
%
$
24,388
$
20,149
21
%
License fees
688
805
(15
%)
1,008
1,297
(22
%)
Professional services & other
9,594
10,779
(11
%)
19,603
20,308
(3
%)
Maintenance
8,830
9,266
(5
%)
17,735
18,728
(5
%)
Total Revenues
31,438
31,211
1
%
62,734
60,482
4
%
Cost of Revenues: Subscription services
4,059
3,404
19
%
7,677
6,628
16
%
License fees
94
198
(53
%)
183
357
(49
%)
Professional services & other
6,847
7,477
(8
%)
14,151
14,487
(2
%)
Maintenance
1,577
1,746
(10
%)
3,150
3,720
(15
%)
Total Cost of Revenues
12,577
12,825
(2
%)
25,161
25,192
0
%
Gross Margin
18,861
18,386
3
%
37,573
35,290
6
%
Operating expenses: Research and development
4,364
4,278
2
%
8,818
8,702
1
%
Sales and marketing
5,697
5,892
(3
%)
11,609
12,012
(3
%)
General and administrative
6,001
5,476
10
%
11,766
10,010
18
%
Amortization of acquisition-related intangibles
32
53
(40
%)
56
106
(47
%)
Total Operating Expenses
16,094
15,699
3
%
32,249
30,830
5
%
Operating Earnings
2,767
2,687
3
%
5,324
4,460
19
%
Interest (Loss)/Income & Other, Net
(145
)
930
nm
(26
)
1,367
nm Earnings Before Income Taxes
2,622
3,617
(28
%)
5,298
5,827
(9
%)
Income Tax Expense/(Benefit)
541
303
79
%
1,084
(434
)
nm Net Earnings
$
2,081
$
3,314
(37
%)
$
4,214
$
6,261
(33
%)
Earnings per common share: (1) Basic
$
0.06
$
0.10
(40
%)
$
0.12
$
0.19
(37
%)
Diluted
$
0.06
$
0.10
(40
%)
$
0.12
$
0.18
(33
%)
Weighted average number of common shares outstanding:
Basic
33,720
33,336
33,688
33,195
Diluted
34,072
34,684
34,040
34,448
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,
2022
2021
Pct Chg.
2022
2021
Pct Chg.
NON-GAAP Operating Earnings: Operating Earnings (GAAP
Basis)
$
2,767
$
2,687
3
%
$
5,324
$
4,460
19
%
Amortization of acquisition-related intangibles
270
53
409
%
369
106
248
%
Stock-based compensation
1,343
1,042
29
%
2,649
1,817
46
%
NON-GAAP Operating Earnings:
4,380
3,782
16
%
8,342
6,383
31
%
Non-GAAP Operating Earnings, as a % of revenue
14
%
12
%
13
%
11
%
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2022
2021
Pct Chg.
2022
2021
Pct Chg.
NON-GAAP EBITDA: Net Earnings (GAAP Basis)
$
2,081
$
3,314
(37
%)
$
4,214
$
6,261
(33
%)
Income Tax Expense/(Benefit)
541
303
79
%
1,084
(434
)
nm Interest (Loss)/Income & Other, Net
145
(930
)
nm
26
(1,367
)
nm Amortization of intangibles
532
860
(38
%)
1,088
1,816
(40
%)
Depreciation
301
179
68
%
513
353
45
%
EBITDA (earnings before interest, taxes, depreciation and
amortization)
3,600
3,726
(3
%)
6,925
6,629
4
%
Stock-based compensation
1,343
1,042
29
%
2,649
1,817
46
%
Adjusted EBITDA
$
4,943
$
4,768
4
%
$
9,574
$
8,446
13
%
EBITDA, as a percentage of revenues
11
%
12
%
11
%
11
%
Adjusted EBITDA, as a percentage of revenues
16
%
15
%
15
%
14
%
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2022
2021
Pct Chg.
2022
2021
Pct Chg.
NON-GAAP EARNINGS PER SHARE: Net Earnings (GAAP
Basis)
$
2,081
$
3,314
(37
%)
$
4,214
$
6,261
(33
%)
Amortization of acquisition-related intangibles (2)
209
43
386
%
288
85
239
%
Stock-based compensation (2)
1,041
836
25
%
2,066
1,456
42
%
Adjusted Net Earnings
$
3,331
$
4,193
(21
%)
$
6,568
$
7,802
(16
%)
Adjusted non-GAAP diluted earnings per share
$
0.10
$
0.12
(17
%)
$
0.19
$
0.23
(17
%)
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2022
2021
Pct Chg.
2022
2021
Pct Chg.
NON-GAAP Earnings Per Share Net Earnings (GAAP Basis)
$
0.06
$
0.10
(40
%)
$
0.12
$
0.18
(33
%)
Amortization of acquisition-related intangibles (2)
0.01
-
-
0.01
-
-
Stock-based compensation (2)
0.03
0.02
50
%
0.06
0.05
20
%
Adjusted Net Earnings
0.10
$
0.12
(17
%)
0.19
$
0.23
(17
%)
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2022
2021
Pct Chg.
2022
2021
Pct Chg.
Amortization of acquisition-related intangibles Cost of
Subscription Services
$
238
$
-
-
$
313
$
-
-
Operating expenses
32
53
(40
%)
56
106
(47
%)
Total amortization of acquisition-related intangibles
$
270
$
53
409
%
$
369
$
106
248
%
Stock-based compensation Cost of revenues
$
67
$
68
(1
%)
$
108
$
129
(16
%)
Research and development
143
99
44
%
292
167
75
%
Sales and marketing
198
174
14
%
416
317
31
%
General and administrative
935
701
33
%
1,833
1,204
52
%
Total stock-based compensation
$
1,343
$
1,042
29
%
$
2,649
$
1,817
46
%
(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 $0.12 for the three and six months ended
October 31, 2022, respectively. Diluted per share for Class B
shares under the two-class method are $0.10 and $0.19 for the three
and six months ended October 31, 2021, 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
six month periods ended October 31, 2022 of 22.5% and 22.0% and
19.8% for the three and six month periods ended October 31, 2021,
respectively. nm- not meaningful
AMERICAN SOFTWARE, INC.
Consolidated Balance Sheet Information (In thousands)
(Unaudited)
October 31,
April 30,
2022
2022
Cash and Cash Equivalents
$
83,962
$
110,690
Short-term Investments
22,805
16,826
Accounts Receivable: Billed
24,127
20,619
Unbilled
2,690
2,989
Total Accounts Receivable, net
26,817
23,608
Prepaids & Other
5,384
5,067
Current Assets
138,968
156,191
PP&E, net
5,847
3,654
Capitalized Software, net
867
1,586
Goodwill
29,558
25,888
Other Intangibles, net
2,609
147
Deferred Sales Commissions - Non-current
1,702
2,050
Lease Right of Use Assets
646
935
Other Non-current Assets
2,815
2,384
Total Assets
$
183,012
$
192,835
Accounts Payable
$
2,485
$
2,506
Accrued Compensation and Related costs
3,723
6,918
Dividend Payable
3,711
3,700
Operating Lease Obligation - Current
441
541
Other Current Liabilities
2,361
1,871
Deferred Revenues - Current
36,008
41,953
Current Liabilities
48,729
57,489
Operating Lease Obligation - Non-current
250
461
Deferred Tax Liability - Non-current
-
1,772
Other Long-term Liabilities
465
137
Long-term Liabilities
715
2,370
Total Liabilities
49,444
59,859
Shareholders' Equity
133,568
132,976
Total Liabilities & Shareholders' Equity
$
183,012
$
192,835
AMERICAN SOFTWARE, INC. Condensed Consolidated Cashflow
Information (In thousands) (Unaudited)
Six Months Ended
October 31,
2022
2021
Net cash provided by operating activities
$
(11,261
)
$
7,712
Purchases of property and equipment, net of disposals
(2,706
)
(615
)
Purchase of business, net of cash acquired
(6,500
)
-
Net cash used in investing activities
(9,206
)
(615
)
Dividends paid
(7,406
)
(7,268
)
Proceeds from exercise of stock options
1,145
5,714
Net cash used in financing activities
(6,261
)
(1,554
)
Net change in cash and cash equivalents
(26,728
)
5,543
Cash and cash equivalents at beginning of period
110,690
88,658
Cash and cash equivalents at end of period
$
83,962
$
94,201
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221117006058/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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