Subscription Fee Growth of 14% and Adjusted
EBITDA Margin of 13% in Q1
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the first quarter of fiscal year
2024.
Key first Quarter Financial Highlights:
- Subscription fees were $13.8 million for the quarter ended July
31, 2023, a 14% increase compared to $12.1 million for the same
period last year.
- Total revenues for the quarter ended July 31, 2023 decreased 7%
to $29.2 million, compared to $31.3 million for the same period of
the prior year, principally due to a decline in services and
maintenance fee revenue.
- Recurring revenue streams for Maintenance and Cloud
Subscriptions were $21.9 million or 75% of total revenues in the
quarter ended July 31, 2023 compared to $21.0 million or 67% of
total revenues in the same period of the prior year.
- Maintenance revenues for the quarter ended July 31, 2023
decreased 8% to $8.2 million compared to $8.9 million for the same
period last year.
- Professional services and other revenues for the quarter ended
July 31, 2023 decreased 31% to $7.0 million for the quarter ended
July 31, 2023 compared to $10.0 million for the same period last
year. The decline was primarily driven by a 28% decrease in
non-core project revenue in our IT Consulting business unit and a
33% decrease to $3.5 million in professional services revenues,
when compared to $5.2 million in the same period last year in our
Supply Chain business due to lower project work and outsourcing of
some services to partners.
- Software license revenues were $0.3 million for the quarter
ended July 31, 2023 compared to $0.3 million in the same period
last year.
- Operating earnings for the quarter ended July 31, 2023 were
$1.6 million compared to $2.6 million for the same period last
year.
- GAAP net earnings for the quarter ended July 31, 2023 were $2.8
million or $0.08 per fully diluted share compared to $2.1 million
or $0.06 per fully diluted share for the same period last
year.
- Adjusted net earnings for the quarter ended July 31, 2023,
which excludes non-cash stock-based compensation expense and
amortization of acquisition-related intangibles, were $4.2 million
or $0.12 per fully diluted share compared to $3.3 million or $0.10
per fully diluted share for the same period last year.
- EBITDA was $2.3 million for the quarter ended July 31, 2023
compared to $3.3 million for the same period last year.
- Adjusted EBITDA was $3.9 million for the quarter ended July 31,
2023 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 First Quarter of Fiscal Year 2024 highlights:
Clients & Channels
- Notable new and existing customers placing orders with the
Company in the first quarter include: Canada Goose, Inc., Hasbro,
Inc. Mitsubishi Electric Trane HVAC US, Inc., Niagara Bottling,
Inc., Pharmacare, Inc., Terex, Inc. and Under Armor, Inc.
- During the quarter, SaaS subscription and software license
agreements were signed with customers located in the following six
countries: Australia, Brazil, France, the Netherlands, the United
Kingdom and the United States.
Company & Technology
- In May, Logility introduced new functionality to advance our
SaaS Capabilities with Enhancements to Supply Chain ESG Management.
With the growth of Environmental, Social, and Governance (ESG)
initiatives each year, more companies are beginning to track the
impact of their supply chain ecosystem. Ensuring vendors and
suppliers also make a responsible impact is vital to corporate
success. This release introduces the ability to optimize network
design for Scope 3 emissions, new supplier scorecards, and product
traceability and compliance features, as well as offer better risk
avoidance and management, which allows clients to balance
sustainability with profitability.
- In July, Logility announced that it has successfully completed
its fifth annual System and Organization Controls (SOC) 2 Type II
audit for the period from March 2022 to February 2023. The audit
report validates that Logility’s cloud-based solution meets
Logility’s standards for security and reliability and is one part
of our larger program to ensure and enhance our security posture
continually.
The overall financial condition of the Company remains strong,
with cash and investments of approximately $115.3 million. During
the first quarter of fiscal year 2024, the Company paid shareholder
dividends of approximately $3.7 million.
“Amid ongoing economic uncertainty, we delivered results
consistent with our expectations and remain on track to achieve our
initial outlook for FY ‘24,” said Allan Dow, CEO and President of
American Software. “As we believe our stock is significantly
undervalued, we plan to opportunistically repurchase shares against
our existing buyback authorization. We are also undertaking several
strategic actions that we believe will create significant value for
our shareholders.”
Fiscal Year 2024 Financial Outlook
- Total revenues of $120.0 million to $126.0 million, including
total recurring revenues of $88.0 million to $92.0 million.
- Adjusted EBITDA of $19.0 million to $21.0 million.
About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA),
through its operating entity Logility delivers an innovative
AI-powered 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 Environment, Social and
Governance (ESG) and Network Optimization aligned with Integrated
Business Planning.
Serving clients such as Big Lots, Bunzl Australasia, Carter’s,
Destination XL, Glen Raven, Hostess, Husqvarna Group, Jockey
International, Johnson Controls, Parker Hannifin, Red Wing Shoe
Company, Spanx and Taylor Farms; 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.. 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
American Software, Inc. (“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 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 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)
First Quarter Ended
July 31,
2023
2022
Pct Chg.
Revenues: Subscription fees
$
13,764
$
12,062
14
%
License fees
289
320
(10
%)
Professional services & other
6,952
10,009
(31
%)
Maintenance
8,163
8,905
(8
%)
Total Revenues
29,168
31,296
(7
%)
Cost of Revenues: Subscription services
4,217
3,618
17
%
License fees
72
89
(19
%)
Professional services & other
5,608
7,304
(23
%)
Maintenance
1,695
1,573
8
%
Total Cost of Revenues
11,592
12,584
(8
%)
Gross Margin
17,576
18,712
(6
%)
Operating expenses: Research and development
4,249
4,454
(5
%)
Sales and marketing
6,148
5,912
4
%
General and administrative
5,587
5,765
(3
%)
Amortization of acquisition-related intangibles
25
24
4
%
Total Operating Expenses
16,009
16,155
(1
%)
Operating Earnings
1,567
2,557
(39
%)
Interest Income & Other, Net
1,887
119
1486
%
Earnings Before Income Taxes
3,454
2,676
29
%
Income Tax Expense
706
543
30
%
Net Earnings
$
2,748
$
2,133
29
%
Earnings per common share: (1) Basic
$
0.08
$
0.06
33
%
Diluted
$
0.08
$
0.06
33
%
Weighted average number of common shares outstanding:
Basic
34,155
33,656
Diluted
34,160
34,007
nm- not meaningful
AMERICAN SOFTWARE, INC.
NON-GAAP MEASURES OF PERFORMANCE (In thousands, except
per share data, unaudited)
First Quarter Ended
July 31,
2023
2022
Pct Chg.
NON-GAAP Operating Earnings: Operating Earnings (GAAP
Basis)
$
1,567
$
2,557
(39
%)
Amortization of acquisition-related intangibles
233
99
135
%
Stock-based compensation
1,553
1,306
19
%
NON-GAAP Operating Earnings:
3,353
3,962
(15
%)
Non-GAAP Operating Earnings, as a % of revenue
11
%
13
%
First Quarter Ended
July 31,
2023
2022
Pct Chg.
NON-GAAP EBITDA: Net Earnings (GAAP Basis)
$
2,748
$
2,133
29
%
Income Tax Expense
706
543
30
%
Interest Income & Other, Net
(1,887
)
(119
)
1486
%
Amortization of intangibles
371
556
(33
%)
Depreciation
360
212
70
%
EBITDA (earnings before interest, taxes, depreciation and
amortization)
2,298
3,325
(31
%)
Stock-based compensation
1,553
1,306
19
%
Adjusted EBITDA
$
3,851
$
4,631
(17
%)
EBITDA, as a percentage of revenues
8
%
11
%
Adjusted EBITDA, as a percentage of revenues
13
%
15
%
First Quarter Ended
July 31,
2023
2022
Pct Chg.
NON-GAAP EARNINGS PER SHARE: Net Earnings (GAAP
Basis)
$
2,748
$
2,133
29
%
Amortization of acquisition-related intangibles (2)
185
79
134
%
Stock-based compensation (2)
1,236
1,041
19
%
Adjusted Net Earnings
$
4,169
$
3,253
28
%
Adjusted non-GAAP diluted earnings per share
$
0.12
$
0.10
20
%
First Quarter Ended
July 31,
2023
2022
Pct Chg.
NON-GAAP Earnings Per Share Net Earnings (GAAP Basis)
$
0.08
$
0.06
33
%
Amortization of acquisition-related intangibles (2)
-
-
-
Stock-based compensation (2)
$
0.04
0.04
0
%
Adjusted Net Earnings
$
0.12
$
0.10
20
%
First Quarter Ended
July 31,
2023
2022
Pct Chg.
Amortization of acquisition-related intangibles Cost of
Subscription Services
$
208
$
75
-
Operating expenses
25
24
4
%
Total amortization of acquisition-related intangibles
$
233
$
99
135
%
Stock-based compensation Cost of revenues
$
78
$
41
90
%
Research and development
173
149
16
%
Sales and marketing
347
218
59
%
General and administrative
955
898
6
%
Total stock-based compensation
$
1,553
$
1,306
19
%
(1) - Basic per share amounts are the same for Class
A and Class B shares. Diluted per share amounts for Class A and
Class B shares under the two-class method are $0.08 and $0.06 for
the three months ended July 31, 2023 and 2022, respectively.
(2) - Tax affected using the effective tax rate excluding a
discrete item related to excess tax benefit for stock options for
the three month period ended July 31, 2023 of 20.4%. Tax affected
using the effective tax rate excluding a discrete item related to
excess tax benefit for stock options for the three month period
ended July 31, 2022 of 20.3%. nm- not meaningful
AMERICAN
SOFTWARE, INC. Consolidated Balance Sheet Information
(In thousands) (Unaudited)
July 31,
April 30,
2023
2023
Cash and Cash Equivalents
$
93,887
$
90,696
Short-term Investments
20,957
23,451
Accounts Receivable: Billed
21,220
25,405
Unbilled
2,817
2,604
Total Accounts Receivable, net
24,037
28,009
Prepaids & Other
5,825
7,833
Current Assets
144,706
149,989
Investments - Non-current
485
486
PP&E, net
6,551
6,444
Capitalized Software, net
253
391
Goodwill
29,558
29,558
Other Intangibles, net
1,910
2,143
Other Non-current Assets
7,120
6,609
Total Assets
$
190,583
$
195,620
Accounts Payable
$
1,532
$
2,142
Accrued Compensation and Related costs
2,461
4,268
Dividend Payable
3,758
3,756
Other Current Liabilities
2,639
2,708
Deferred Revenues - Current
39,797
43,124
Current Liabilities
50,187
55,998
Other Long-term Liabilities
271
288
Total Liabilities
50,458
56,286
Shareholders' Equity
140,125
139,334
Total Liabilities & Shareholders' Equity
$
190,583
$
195,620
AMERICAN SOFTWARE,
INC.
Condensed Consolidated Cashflow Information (In
thousands) (Unaudited)
Three Months Ended
July 31,
2023
2022
Net cash provided by operating activities
$
7,168
$
(1,518
)
Purchases of property and equipment, net of disposals
(467
)
(1,572
)
Purchase of business, net of cash acquired
-
(6,500
)
Net cash used in investing activities
(467
)
(8,072
)
Dividends paid
(3,756
)
(3,693
)
Proceeds from exercise of stock options
246
471
Net cash used in financing activities
(3,510
)
(3,222
)
Net change in cash and cash equivalents
3,191
(12,812
)
Cash and cash equivalents at beginning of period
90,696
110,690
Cash and cash equivalents at end of period
$
93,887
$
97,878
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230824576813/en/
Financial Information Press Contact: Vincent C. Klinges Chief
Financial Officer American Software, Inc. (404) 264-5477
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