Subscription Fee Growth of 9% and Adjusted
EBITDA Margin was 16% of revenue from Continuing Operations in
Q3
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the third quarter of fiscal year
2024. During the second quarter of fiscal year 2024 we divested our
non-core information technology staffing firm, The Proven Method
and its results are included in discontinuing operations.
Key Third Quarter Financial Highlights from Continuing Operations:
- Subscription fees were $14.1 million for the quarter ended
January 31, 2024, a 9% increase compared to $13.0 million for the
same period last year.
- Total revenues for the quarter ended January 31, 2024 decreased
7% to $25.5 million, compared to $27.4 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 $21.8 million or 86% of total revenues in the
quarter ended January 31, 2024 compared to $21.7 million or 79% of
total revenues in the same period of the prior year.
- Maintenance revenues for the quarter ended January 31, 2024
decreased 11% to $7.7 million compared to $8.6 million for the same
period last year partially due to the divestiture of the
Transportation group in November, 2023.
- Professional services and other revenues for the quarter ended
January 31, 2024 decreased 28% to $3.4 million for the quarter
ended January 31, 2024 compared to $4.8 million for the same period
last year. The decline was primarily driven by lower than expected
seasonally adjusted project work and outsourcing of some services
to systems integrators and other service providers.
- Software license revenues were $0.3 million for the quarter
ended January 31, 2024 compared to $1.0 million in the same period
last year, continuing the focus on cloud services sales.
- Operating earnings for the quarter ended January 31, 2024 were
$0.8 million compared to $2.7 million for the same period last
year.
- GAAP net earnings from continuing operations for the quarter
ended January 31, 2024 were $4.2 million or $0.12 per fully diluted
share compared to $3.2 million or $0.09 per fully diluted share for
the same period last year.
- Adjusted net earnings from continuing operations for the
quarter ended January 31, 2024, which excludes non-cash stock-based
compensation expense and amortization of acquisition-related
intangibles, were $6.3 million or $0.19 per fully diluted share
compared to $4.4 million or $0.13 per fully diluted share for the
same period last year.
- EBITDA from continuing operations was $2.4 million for the
quarter ended January 31, 2024 compared to $3.5 million for the
same period last year.
- Adjusted EBITDA from continuing operations was $4.0 million for
the quarter ended January 31, 2024 compared to $4.8 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 2024 Year to Date Financial Highlights
from Continuing Operations:
- Subscription fees were $41.2 million for the nine months ended
January 31, 2024, a 10% increase compared to $37.4 million for the
same period last year, while Software license revenues were $0.8
million compared to $2.0 million for the same period last
year.
- Total revenues for the nine months ended January 31, 2024
decreased 5% to $77.1 million compared to $81.5 million for the
same period last year.
- Recurring revenue streams for Maintenance and Cloud Services
were $65.2 million and $63.8 million or 85% and 78% of total
revenues for the nine-month periods ended January 31, 2024 and
2023, respectively.
- Maintenance revenues for the nine months ended January 31, 2024
were $24.0 million, a 9% decrease compared to $26.4 million for the
same period last year.
- Professional services and other revenues for the nine months
ended January 31, 2024 decreased 29% to $11.1 million compared to
$15.7 million for the same period last year. The decline was
primarily driven by lower project work and outsourcing of some
services to systems integrators and other service providers s.
- For the nine months ended January 31, 2024, the Company
reported continuing operating earnings of approximately $3.4
million compared to $7.6 million for the same period last
year.
- GAAP net earnings from continuing operations were approximately
$7.4 million or $0.22 per fully diluted share for the nine months
ended January 31, 2024, a 5% increase compared to $7.1 million or
$0.21 per fully diluted share for the same period last year.
- Adjusted net earnings from continuing operations for the nine
months ended January 31, 2024, which exclude stock-based
compensation expense and amortization of acquisition-related
intangibles, increased 25% to $13.3 million or $0.39 per fully
diluted share, compared to $10.6 million or $0.31 per fully diluted
share for the same period last year.
- EBITDA from continuing operations decreased by 29% to $7.1
million for the nine months ended January 31, 2024 compared to
$10.0 million for the same period last year.
- Adjusted EBITDA from continuing operations decreased 15% to
$11.8 million for the nine months ended January 31, 2024 compared
to $14.0 million for the nine months ended January 31, 2023.
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.
Key Third Quarter of Fiscal Year 2024 highlights:
Clients & Channels
- Notable new and existing customers placing orders with the
Company in the third quarter include: Aaron’s LLC, Herbalife Inc.,
INCOFE, S.A.S., Kontoor Brands, Omega Pharma International NV,
Richardson Sports, Inc., Sigma-Aldrich Corporation and Williams
Scotsman, Inc.
- During the quarter, SaaS subscription and software license
agreements were signed with customers located in the following
countries: Australia, Belgium, France, Sweden, Switzerland, the
United Kingdom, the United States and Uruguay.
Company & Technology
- Logility’s planning solutions and employees were recognized in
the following publications:
- Allan Dow, president, Logility, Inc. was quoted in the 2024
Supply Chain Predictions published by Inbound Logistics saying
“2024 will be about AI implementation. By optimizing network flows,
manufacturers can better utilize their resources, optimize margins,
and drive long-term profit growth.”
- Lisa Henriott, SVP Product Marketing, joined Tyler Fusser of
Supply Chain Connect to discuss the inventory management challenges
companies face today and how Logility’s inventory optimization
capabilities allow companies to analyze trade-offs at different
inventory levels, including finished goods, work in process, or raw
materials.
- Both IT in the Supply Chain and READ Magazine highlighted how
Logility maximizes production efficiencies with advanced scheduling
capabilities in its Manufacturing Optimization solution.
- In November, Logility announced the extension of its
Manufacturing Optimization solution to maximize production
efficiencies with advanced scheduling capabilities. Utilizing
Industry 4.0 technologies such as artificial intelligence (AI),
machine learning (ML) and automation to continuously sense,
analyze, and update activity in digital supply chains to help
ensure clients gain the highest utilization possible of equipment
and resources.
- Also in November, Logility was a sponsor at the Gartner Supply
Chain Planning Summit North America where they showcased their
AI-first planning platform to summit attendees and analysts.
- In December, Logility released new capabilities to its Digital
Supply Chain Platform to leverage artificial intelligence (AI),
machine learning (ML), and automation to deepen inventory,
manufacturing, and ESG capabilities. New platform capabilities
include: InventoryAI+ Dashboard, Probabilistic Inventory Planning
with Automated Inventory Policies, and Cloud-Configuration and
Onboarding in Manufacturing Optimization. Their Vendor Management:
Corporate Responsibility capabilities now include Cancel Compliance
Form and Legal Compliance Violation features to foster transparency
and aid efficient compliance monitoring for all clients.
- In January, Logility announced capabilities to advance supplier
management, and support transparent supply chain practices for
apparel and soft goods companies. These capabilities allow
companies to elevate visibility into vendor and supplier
relationships:
- Vendor Compliance Dashboard: Track supplier sustainability
performance and progress easily.
- Faster Supplier Onboarding: Streamlined evaluation with
improved certificate management.
- Reduce Product Risk: Identify at-risk purchase orders and
restricted suppliers efficiently.
- Enhanced Communication: Cancel compliance forms with clear
notifications to all parties.
- Track Legal Violations: Record and modify legal details for
better compliance monitoring.
The overall financial condition of the Company remains strong,
with cash and investments of approximately $78.3 million. During
the third quarter of fiscal year 2024, the Company paid shareholder
dividends of approximately $3.8 million and purchased approximately
516k American Software Class A shares for $5.4mm under the
authorized stock buyback program which we completed this quarter
for a total of approximately 946k shares for $10.2 million or an
average price of $10.83 per share.
“We delivered solid third quarter results and remain on track to
achieve our guidance for fiscal 2024, which is unchanged from the
prior quarter,” said Allan Dow, CEO and President of American
Software. “Since the start of the new calendar year, we have seen
an increase in activity with both existing and prospective
customers progressing initiatives to adopt our AI-first supply
chain planning solutions. The strength of our pipeline and greater
customer engagement leaves us poised for a strong finish to our
fiscal 2024.”
Fiscal Year 2024 Financial Outlook from Continuing
Operations:
- Total revenues of $100.0 million to $104.0 million, including
total recurring revenues of $85.0 million to $88.0 million.
- Adjusted EBITDA of $14.5 million to $16.0 million.
About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA),
through its operating entity Logility, delivers optimized demand,
inventory, manufacturing, and supply planning tools – helping to
provide executives the confidence and control to increase margins
and service levels, while delivering sustainable supply chains.
Serving clients such as Big Lots, Carter’s, Destination XL,
Hostess, Husqvarna Group, Jockey International, Johnson Controls,
Parker Hannifin, Red Wing Shoe Company, Spanx, Dole Fresh
Vegetables, Inc., and Fender Musical Instrument Co, our solutions
are marketed and sold through a direct sales team as well as an
independent global value-added reseller distribution network.
Logility’s planning platform leverages Generative AI, advanced
AI-driven algorithms, and machine learning. Our engineered approach
drives team alignment for over 650 clients in 80 countries with
prioritized, value-focused outcomes. For more information about
Logility, please visit www.logility.com. Logility is a wholly-owned
subsidiary and operating entity of American Software, Inc. (NASDAQ:
AMSWA). You can learn more about American Software at
www.amsoftware.com or by calling (404) 364-7615 or email
kliu@amsoftware.ocom.
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 (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 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)
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2024
2023
Pct Chg.
2024
2023
Pct Chg.
Revenues from continuing operations: Subscription fees
$
14,114
$
13,003
9
%
$
41,235
$
37,391
10
%
License fees
277
1,017
(73
%)
795
2,025
(61
%)
Professional services & other
3,418
4,758
(28
%)
11,107
15,687
(29
%)
Maintenance
7,727
8,649
(11
%)
23,990
26,384
(9
%)
Total Revenues
25,536
27,427
(7
%)
77,127
81,487
(5
%)
Cost of Revenues from continuing operations:
Subscription services
4,944
4,005
23
%
13,768
11,682
18
%
License fees
3
358
(99
%)
168
541
(69
%)
Professional services & other
2,694
3,498
(23
%)
8,610
10,682
(19
%)
Maintenance
1,449
1,607
(10
%)
4,877
4,757
3
%
Total Cost of Revenues
9,090
9,468
(4
%)
27,423
27,662
(1
%)
Gross Margin
16,446
17,959
(8
%)
49,704
53,825
(8
%)
Operating expenses from continuing operations: Research and
development
4,546
4,402
3
%
13,064
13,220
(1
%)
Sales and marketing
5,039
4,904
3
%
16,083
15,537
4
%
General and administrative
5,853
5,883
(1
%)
16,775
17,350
(3
%)
Amortization of acquisition-related intangibles
193
25
672
%
346
81
327
%
Total Operating Expenses
15,631
15,214
3
%
46,268
46,188
0
%
Operating Earnings from continuing operations
815
2,745
(70
%)
3,436
7,637
(55
%)
Interest Income & Other, Net
4,417
1,334
231
%
5,726
1,308
338
%
Earnings from continuing operations Before Income Taxes
5,232
4,079
28
%
9,162
8,945
2
%
Income Tax Expense
1,080
907
19
%
1,775
1,882
(6
%)
Net Earnings from continuing operations
$
4,152
$
3,172
31
%
$
7,387
$
7,063
5
%
(Loss)/Earnings from discontinuing operations, Net of Income
Taxes (1)
$
(64
)
$
45
nm
$
1,812
$
323
461
%
Net Earnings
$
4,088
$
3,217
27
%
$
9,199
#
$
7,386
25
%
Earnings per common share from continuing operations:
(2) Basic
$
0.12
$
0.09
33
%
$
0.22
$
0.21
5
%
Diluted
$
0.12
$
0.09
33
%
$
0.22
$
0.21
5
%
Earnings per common share from discontinuing operations:
(2) Basic
$
-
$
-
-
$
0.05
$
0.01
400
%
Diluted
$
-
$
-
-
$
0.05
$
0.01
400
%
Earnings per common share: (2) Basic
$
0.12
$
0.09
33
%
$
0.27
$
0.22
23
%
Diluted
$
0.12
$
0.09
33
%
$
0.27
$
0.22
23
%
Weighted average number of common shares outstanding:
Basic
33,292
33,759
33,842
33,711
Diluted
33,337
33,965
33,866
34,006
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,
2024
2023
Pct Chg.
2024
2023
Pct Chg.
NON-GAAP Operating Earnings: Operating Earnings from
continuing operations (GAAP Basis)
$
815
$
2,745
(70
%)
$
3,436
$
7,637
(55
%)
Amortization of acquisition-related intangibles
1,168
233
401
%
2,195
602
265
%
Stock-based compensation
1,586
1,294
23
%
4,720
3,935
20
%
NON-GAAP Operating Earnings from continuing operations:
3,569
4,272
(16
%)
10,351
12,174
(15
%)
Non-GAAP Operating Earnings from continuing operations,
as a % of revenue
14
%
16
%
13
%
15
%
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2024
2023
Pct Chg.
2024
2023
Pct Chg.
NON-GAAP EBITDA: Net Earnings from continuing operations
(GAAP Basis)
$
4,152
$
3,172
31
%
$
7,387
$
7,063
5
%
Income Tax Expense
1,080
907
19
%
1,775
1,882
(6
%)
Interest Income & Other, Net
(4,417
)
(1,334
)
231
%
(5,726
)
(1,308
)
338
%
Amortization of intangibles
1,257
495
154
%
2,527
1,583
60
%
Depreciation
377
292
29
%
1,114
805
38
%
EBITDA from continuing operations (earnings before interest,
taxes, depreciation and amortization)
2,449
3,532
(31
%)
7,077
10,025
(29
%)
Stock-based compensation
1,586
1,294
23
%
4,720
3,935
20
%
Adjusted EBITDA from continuing operations
$
4,035
$
4,826
(16
%)
$
11,797
$
13,960
(15
%)
EBITDA from continuing operations, as a percentage of
revenues
10
%
13
%
9
%
12
%
Adjusted EBITDA, from continuing operations, as a
percentage of revenues
16
%
18
%
15
%
17
%
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2024
2023
Pct Chg.
2024
2023
Pct Chg.
NON-GAAP Earnings Per Share Net Earnings from continuing
operations (GAAP Basis)
$
4,152
$
3,172
31
%
$
7,387
$
7,063
5
%
Amortization of acquisition-related intangibles (3)
927
181
412
%
1,870
473
295
%
Stock-based compensation (3)
1,259
1,006
25
%
4,002
3,107
29
%
Adjusted Net Earnings from continuing operations
$
6,338
$
4,359
45
%
$
13,259
$
10,643
25
%
Adjusted non-GAAP diluted earnings per share from
continuing operations
$
0.19
$
0.13
46
%
$
0.39
$
0.31
26
%
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2024
2023
Pct Chg.
2024
2023
Pct Chg.
NON-GAAP Earnings Per Share Net Earnings from continuing
operations (GAAP Basis)
$
0.12
$
0.09
33
%
$
0.22
$
0.21
5
%
Amortization of acquisition-related intangibles (3)
0.03
0.01
-
$
0.05
0.01
400
%
Stock-based compensation (3)
$
0.04
0.03
33
%
$
0.12
0.09
33
%
Adjusted Net Earnings from continuing operations
$
0.19
$
0.13
46
%
$
0.39
$
0.31
26
%
Third Quarter Ended
Nine Months Ended
January 31,
January 31,
2024
2023
Pct Chg.
2024
2023
Pct Chg.
Amortization of acquisition-related intangibles Cost of
Subscription Services
$
975
$
208
369
%
$
1,849
$
521
255
%
Operating expenses
193
25
672
%
347
81
328
%
Total amortization of acquisition-related intangibles
$
1,168
$
233
401
%
$
2,196
$
602
265
%
Stock-based compensation Cost of revenues
$
90
$
70
29
%
$
251
$
178
41
%
Research and development
174
145
20
%
513
437
17
%
Sales and marketing
312
152
105
%
1,040
568
83
%
General and administrative
1,010
927
9
%
2,916
2,752
6
%
Total stock-based compensation
$
1,586
$
1,294
23
%
$
4,720
$
3,935
20
%
(1) For more information, please see note F related to
discontinuing operations in the Company’s unaudited condensed
consolidated financial statements filed on December 11, 2023. (2) -
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. Continuing operations diluted per share for Class B shares
under the two-class method are $0.12 and $0.22 for the three and
nine months ended Janaury 31, 2024, respectively. Continuing
diluted per share for Class B shares under the two-class method are
$0.09 and $0.21 for the three and nine months ended Janaury 31,
2023, respectively. (3) -Continuing and discontinuing operations
are tax affected using the effective tax rate excluding a discrete
item related to excess tax benefit for stock options in the
following table.
Three Months
Ended
Janaury 31, 2024
Three Months
Ended
Janaury 31, 2023
Nine Months
Ended
January 31, 2023
Nine Months
Ended
January 31, 2024
Continuing Operations
20.6
%
22.2
%
21.0
%
19.4
%
Discontinuing Operations
nm
0.0
%
0.0
%
23.9
%
Consolidated Operations
21.9
%
22.1
%
21.2
%
20.3
%
nm- not meaningful
AMERICAN SOFTWARE,
INC.
Consolidated Balance Sheet
Information
(In thousands)
(Unaudited)
January 31,
April 30,
2024
2023
Cash and Cash Equivalents
$
55,854
$
90,059
Short-term Investments
22,454
23,451
Accounts Receivable:
Billed
22,796
23,476
Unbilled
1,343
1,569
Total Accounts Receivable,
net
24,139
25,045
Prepaid expenses and other
current assets
6,973
7,831
Current Assets from discontinuing
operations
-
3,603
Total Current Assets
109,420
149,989
PP&E, net
5,897
6,444
Capitalized Software, net
59
391
Goodwill
46,393
29,558
Other Intangibles, net
10,948
2,143
Other Non-current Assets
6,311
6,609
Total Assets
$
179,028
$
195,620
Accounts Payable
$
1,086
$
2,131
Accrued Compensation and Related
costs
2,516
4,077
Dividend Payable
3,654
3,756
Other Current Liabilities
3,275
3,638
Current liabilities of
discontinued operations
-
318
Current Liabilities
47,685
57,044
Other Long-term Liabilities
249
288
Total Liabilities
47,934
57,332
Shareholders' Equity
131,094
138,288
Total Liabilities &
Shareholders' Equity
$
179,028
$
195,620
AMERICAN SOFTWARE, INC. Condensed Consolidated
Cashflow Information (In thousands) (Unaudited)
Nine Months Ended
January 31,
2024
2023
Net cash provided by (used in)
operating activities of continuing operations
$
7,837
$
(11,574
)
Cash provided by operating
activities of discontinued operations
1,554
1,108
Net cash provided by/(used in)
operating activities
9,391
(10,466
)
Purchases of property and
equipment, net of disposals
(460
)
(3,655
)
Purchase of business, net of cash
acquired
(25,041
)
(6,500
)
Proceeds from sale of
business
660
-
Net cash used in investing
activities of continuing operations
(24,841
)
(10,155
)
Net cash provided by investing
activities of discontinued operations
1,825
-
Net cash used in investing
activities
(23,016
)
(10,155
)
Dividends paid
(11,272
)
(11,117
)
Purchases of common stock
(10,235
)
-
Proceeds from exercise of stock
options
290
1,654
Net cash used in financing
activities of continuing operations
(21,217
)
(9,463
)
Net Cash used in financing
activities of discontinued operations
-
-
Net cash used in financing
activities
(21,217
)
(9,463
)
Net change in cash and cash
equivalents
(34,842
)
(30,084
)
Cash and cash equivalents at
beginning of period
90,696
110,690
Cash and cash equivalents at
end of period
$
55,854
$
80,606
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240222872067/en/
Vincent C. Klinges Chief Financial Officer American Software,
Inc. (404) 264-5477
American Software (NASDAQ:AMSWA)
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