Subscription Fees Increased 27%, Cloud
Services Annual Contract Value Increased 32% for the
Quarter
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the second quarter of fiscal year
2021.
Key Second Quarter Financial Highlights:
- Subscription fees were $7.0 million for the quarter ended
October 31, 2020, a 27% increase compared to $5.5 million for the
same period last year, while Software license revenues were $0.5
million, a 57% decrease compared to $1.0 million for the same
period last year, reflecting our continued transition to the
Software as a Service (SaaS) engagement model.
- Cloud Services Annual Contract Value (ACV) increased
approximately 32% to $29.6 million as of the quarter ended October
31, 2020 compared to $22.4 million as of the same period of the
prior year.
- Total revenues for the quarter ended October 31, 2020 decreased
1% to $27.9 million, compared to $28.2 million for the same period
of the prior year.
- Recurring revenue streams for Maintenance and Cloud Services
were 62% of total revenues in the quarter ended October 31, 2020
compared to 58% in the same period of the prior year.
- Maintenance revenues for the quarter ended October 31, 2020
decreased 6% to $10.2 million compared to $10.8 million for the
same period last year.
- Professional services and other revenues for the quarter ended
October 31, 2020 decreased 5% to $10.2 million compared to $10.8
million for the same period last year.
- Operating earnings for the quarter ended October 31, 2020
decreased 25% to $0.6 million compared to $0.8 million for the same
period last year.
- GAAP net earnings for the quarter ended October 31, 2020
decreased 61% to $0.7 million or $0.02 per fully diluted share
compared to $1.8 million or $0.05 per fully diluted share for the
same period last year.
- Adjusted net earnings for the quarter ended October 31, 2020,
which excludes non-cash stock-based compensation expense and
amortization of acquisition-related intangibles, decreased 39% to
$1.5 million or $0.05 per fully diluted share compared to $2.5
million or $0.08 per fully diluted share for the same period last
year.
- EBITDA decreased by 29% to $2.1 million for the quarter ended
October 31, 2020 compared to $3.0 million for the same period last
year.
- Adjusted EBITDA decreased by 21% to $2.8 million for the
quarter ended October 31, 2020 compared to $3.5 million for the
same period last year. Adjusted EBITDA represents GAAP net earnings
adjusted for amortization of intangibles, depreciation, interest
(expense)/income & other, net, income tax (benefit)/expense and
non-cash stock-based compensation expense.
Key Fiscal 2021 Year To Date Financial Highlights:
- Subscription fees were $13.3 million for the six months ended
October 31, 2020, a 34% increase compared to $10.0 million for the
same period last year, while Software license revenues were $1.2
million, a 56% decrease compared to $2.8 million for the same
period last year, reflecting our continued transition to the SaaS
engagement model.
- Total revenues for the six months ended October 31, 2020
decreased 1% to $55.2 million compared to $55.6 million for the
same period last year.
- Recurring revenue streams for Maintenance and Cloud Services
were 61% of total revenues for the six-month period ended October
31, 2020 compared to 57% in the same period of the prior year.
- Maintenance revenues for the six months ended October 31, 2020
were $20.5 million, a 6% decrease compared to $21.9 million for the
same period last year.
- Professional services and other revenues for the six months
ended October 31, 2020 decreased 4% to $20.1 million compared to
$21.0 million for the same period last year.
- For the six months ended October 31, 2020, the Company reported
operating earnings of approximately $1.5 million compared to $1.6
million for the same period last year, an 8% decrease.
- GAAP net earnings were approximately $2.7 million or $0.08 per
fully diluted share for the six months ended October 31, 2020, a 6%
decrease compared to $2.9 million or $0.09 per fully diluted share
for the same period last year.
- Adjusted net earnings for the six months ended October 31,
2020, which exclude stock-based compensation expense and
amortization of acquisition-related intangibles, decreased 5% to
$4.3 million or $0.13 per fully diluted share, compared to $4.5
million or $0.14 per fully diluted share for the same period last
year.
- EBITDA decreased by 22% to $4.7 million for the six months
ended October 31, 2020 compared to $6.1 million for the same period
last year.
- Adjusted EBITDA decreased 16% to $5.9 million for the six
months ended October 31, 2020 compared to $7.0 million for the six
months ended October 31, 2019. Adjusted EBITDA represents GAAP net
earnings adjusted for amortization of intangibles, depreciation,
interest income & other, net, income tax (benefit)/expense and
non-cash stock-based compensation.
The overall financial condition of the Company remains strong,
with cash and investments of approximately $94.6 million and no
debt as of October 31, 2020. During the second quarter of fiscal
2021, the Company paid shareholder dividends of approximately $3.6
million.
“Second quarter fiscal 2021 saw continued adoption of our cloud
services offerings with a 27% growth in Subscription Fees and 32%
increase in Annual Contract Value with strong customer retention
rates,” said Allan Dow, CEO and president of American Software.
“Our pipeline has grown considerably as companies turn to our
cloud-based supply chain solutions to support their digital
transformation initiatives and drive resilience across the
enterprise. We are confident that this will translate into further
business momentum in the latter half of fiscal 2021 and
beyond.”
“During the quarter we hosted Disruption RX, a virtual supply
chain summit, which showcased thought-provoking and transformative
supply chain strategies that helped some of the world’s most iconic
brands turn recent challenges brought on by the pandemic into
opportunities for growth and differentiation,” Dow continued.
“Nearly 500 supply chain professionals from 50 countries attended
the two-day summit where we celebrated the rise of women in the
supply chain, hosted panels on building the resilient enterprise
and explored how the right digital platform can drive success in
the midst of unforeseen risks.”
Additional highlights for the second quarter of fiscal 2021
include:
Customers & Channels
- Notable new and existing customers placing orders with the
Company in the second quarter include: Border Bros, Bellamy’s
Organic, Dole Fresh Vegetables, FAM Brands, Hitachi Rail STS USA,
Inc., Husqvarna, Lacoste, New Chapter, Inc., Otter Products, LLC,
Reynolds Consumer Products, LLC, Sport Obermeyer, Strategic
Partners, Tetrosyl Group Limited UK and The Legends Brands.
- During the quarter, SaaS subscription and/or software license
agreements were signed with customers located in the following 9
countries: Australia, Canada, France, Ireland, Mexico, New Zealand,
Sweden, United Kingdom and United States.
- Logility, Inc., a wholly owned subsidiary of the Company,
congratulated Greg Dahlstrom, vice president, operations and supply
chain, Bodybuilding.com, and Pravin Rangachari, senior vice
president, planning and analytics, Haggar Clothing Company, for
their recognition as Consumer Goods Technology 2020 Visionaries.
Industry publication Consumer Goods Technology’s annual Visionaries
report profiles a select group of inspirational executives in the
consumer goods sector who are driving change within their
organizations.
- Logility, Demand Management, Inc., a wholly owned subsidiary of
Logility, and New Generation Computing, Inc. (NGC), a wholly-owned
subsidiary of the Company, each congratulated its customers who
were selected by the editors of Supply & Demand Chain Executive
as recipients of the first annual Women in Supply Chain award.
Logility recognized Karen Smith, vice president, global supply
chain operations, Kontoor Brands. Demand Management recognized
Joanna George, director, global demand planning & processes,
Siemens Healthineers, and Andrea Gauntlett, director of supply
chain at T-Y Groupe – Linen Holdings, LLC. NGC recognized Jenny
Sim, vice president, global sourcing, Foot Locker. The Women in
Supply Chain award honors female supply chain leaders and
executives whose accomplishments, mentorship and examples set a
foundation for women at all levels of a company’s supply chain
network.
- Logility invited attendees of the CSCMP EDGE 2020 Live! Virtual
Conference to join two sessions featuring its customers. Chris
Hooker, The Kraft Heinz Company, led the session “Pushing the
Efficient Inventory Frontier at The Kraft Heinz Company” and Tom
Parr and Steve Bilinski, Dixon, hosted the session “Dixon
Transforms Their Supply Chain to Weather Supply Chain
Disruptions.”
- NGC announced Weissman, a premier designer of dancewear and
costumes, is implementing its supply chain management, product
lifecycle management, vendor compliance and quality control
solutions. NGC will provide the foundation for Weissman’s strategic
digital supply chain transformation to help drive future growth and
success.
Company and Technology
- In the quarter, Logility was recognized as a leader in the G2
Summer 2020 Grid® Report for Supply Chain Planning. G2 Crowd rates
products and vendors based on reviews gathered from its user
community, as well as data aggregated from online sources and
social networks.
- Demand Management announced that Supply & Demand Chain
Executive selected the company to receive the SDCE 100 Award for
2020. The SDCE 100 spotlights successful and innovative projects
that deliver bottom-line value to small, medium and large
enterprises across the range of supply chain functions.
- Logility announced Anna Palmer, director of global customer
success, was named by the editors of Supply & Demand Chain
Executive as a recipient of the inaugural 2020 Women in Supply
Chain Award. Anna was recognized for her achievements in helping
drive supply chain success at Logility’s customers.
- During the quarter, Logility and Demand Management were
recognized as Great Supply Chain Partners by SupplyChainBrain. This
is the fifteenth year Logility was recognized and Demand
Management’s twelfth year. Each year SupplyChainBrain surveys
hundreds of supply chain professionals, asking them to nominate
software providers who have delivered innovative solutions to help
them optimally manage and even transform their supply chains for
more profitable performance.
- Logility hosted the session, “Using Machine Learning to
Optimize Inventory Levels and Extract New Insights” at the CSCMP
Edge 2020 Live! Virtual Conference. The virtual session, led by
Mike Curtin, senior vice president, and Jonathan Doller, business
consultant, explored how innovations in machine learning help drive
new insights across the supply chain.
About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA),
through its operating entities delivers an innovative technical
platform with AI-powered capabilities for supply chain management
and advanced retail planning that is accelerating digital supply
chain optimization from product concept to customer availability.
Logility, Inc. is helping large enterprise 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 and Red Wing Shoe Company. Demand
Management, Inc. delivers affordable, easy-to-use 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. powers the digital
supply chain to enable apparel 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 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, retail
merchandise and assortment planning and allocation, product
lifecycle management (PLM), sourcing management, vendor quality and
compliance, and product traceability. For more information about
American Software, please visit www.amsoftware.com, call (404)
364-7615 or email kliu@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 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; 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 SEC. For more information, contact:
Vincent C. Klinges, Chief Financial Officer, American Software,
Inc., (404) 264-5477 or fax: (404) 264-5298.
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,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
Revenues:
Subscription fees
$
6,966
$
5,492
27
%
$
13,329
$
9,950
34
%
License fees
450
1,046
(57
%)
1,237
2,824
(56
%)
Professional services & other
10,242
10,826
(5
%)
20,056
20,963
(4
%)
Maintenance
10,223
10,846
(6
%)
20,537
21,856
(6
%)
Total Revenues
27,881
28,210
(1
%)
55,159
55,593
(1
%)
Cost of Revenues:
Subscription services
2,946
2,610
13
%
5,705
4,735
20
%
License fees
553
1,007
(45
%)
1,228
2,387
(49
%)
Professional services & other
7,624
7,543
1
%
15,454
14,948
3
%
Maintenance
1,941
1,864
4
%
3,714
3,715
0
%
Total Cost of Revenues
13,064
13,024
0
%
26,101
25,785
1
%
Gross Margin
14,817
15,186
(2
%)
29,058
29,808
(3
%)
Operating expenses:
Research and development
4,463
4,814
(7
%)
8,803
9,427
(7
%)
Less: capitalized development
(126
)
(605
)
(79
%)
(371
)
(1,890
)
(80
%)
Sales and marketing
5,429
5,148
5
%
10,173
10,727
(5
%)
General and administrative
4,367
4,908
(11
%)
8,831
9,696
(9
%)
Provision for doubtful accounts
-
-
-
-
33
-
Amortization of acquisition-related
intangibles
53
78
(32
%)
106
175
(39
%)
Total Operating Expenses
14,186
14,343
(1
%)
27,542
28,168
(2
%)
Operating Earnings
631
843
(25
%)
1,516
1,640
(8
%)
Interest (Expense)/Income & Other,
Net
(42
)
712
nm
1,290
1,237
4
%
Earnings Before Income Taxes
589
1,555
(62
%)
2,806
2,877
(2
%)
Income Tax (Benefit)/Expense
(103
)
(204
)
(50
%)
80
(34
)
nm
Net Earnings
$
692
$
1,759
(61
%)
$
2,726
$
2,911
(6
%)
Earnings per common share: (1)
Basic
$
0.02
$
0.06
(67
%)
$
0.08
$
0.09
(11
%)
Diluted
$
0.02
$
0.05
(60
%)
$
0.08
$
0.09
(11
%)
Weighted average number of common
shares outstanding:
Basic
32,489
31,609
32,414
31,440
Diluted
32,896
32,310
32,919
32,066
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,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP Operating Earnings:
Operating Income (GAAP Basis)
$
631
$
843
(25
%)
$
1,516
$
1,640
(8
%)
Amortization of acquisition-related
intangibles
311
377
(18
%)
622
974
(36
%)
Stock-based compensation
652
503
30
%
1,198
946
27
%
NON-GAAP Operating Earnings:
1,594
1,723
(7
%)
3,336
3,560
(6
%)
Non-GAAP Operating Earnings, as a % of
revenue
6
%
6
%
6
%
6
%
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP EBITDA:
Net Earnings (GAAP Basis)
$
692
$
1,759
(61
%)
$
2,726
$
2,911
(6
%)
Income Tax (Benefit)/Expense
(103
)
(204
)
(50
%)
80
(34
)
nm
Interest (Expense)/Income & Other,
Net
42
(712
)
(106
%)
(1,290
)
(1,237
)
4
%
Amortization of intangibles
1,353
2,026
(33
%)
2,883
4,111
(30
%)
Depreciation
161
157
3
%
311
318
(2
%)
EBITDA (earnings before interest,
taxes, depreciation and amortization)
2,145
3,026
(29
%)
4,710
6,069
(22
%)
Stock-based compensation
652
503
30
%
1,198
946
27
%
Adjusted EBITDA
$
2,797
$
3,529
(21
%)
$
5,908
$
7,015
(16
%)
EBITDA, as a percentage of
revenues
8
%
11
%
9
%
11
%
Adjusted EBITDA, as a percentage of
revenues
10
%
13
%
11
%
13
%
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP EARNINGS PER SHARE:
Net Earnings (GAAP Basis)
$
692
$
1,759
(61
%)
$
2,726
$
2,911
(6
%)
Amortization of acquisition-related
intangibles (2)
272
326
(17
%)
545
825
(34
%)
Stock-based compensation (2)
570
436
31
%
1,048
802
31
%
Adjusted Net Earnings
$
1,534
$
2,521
(39
%)
$
4,319
$
4,538
(5
%)
Adjusted non-GAAP diluted earnings per
share
$
0.05
$
0.08
(38
%)
$
0.13
$
0.14
(7
%)
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
NON-GAAP Earnings Per Share
Net Earnings (GAAP Basis)
$
0.02
$
0.05
(60
%)
$
0.08
$
0.09
(11
%)
Amortization of acquisition-related
intangibles (2)
0.01
0.01
0
%
0.02
0.03
(33
%)
Stock-based compensation (2)
0.02
0.01
100
%
0.03
0.02
50
%
Adjusted Net Earnings
0.05
$
0.07
(29
%)
0.13
$
0.14
(7
%)
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2020
2019
Pct Chg.
2020
2019
Pct Chg.
Amortization of acquisition-related
intangibles
Cost of license
$
258
$
299
(14
%)
$
516
$
799
(35
%)
Operating expenses
53
78
(32
%)
106
175
(39
%)
Total amortization of
acquisition-related intangibles
$
311
$
377
(18
%)
$
622
$
974
(36
%)
Stock-based compensation
Cost of revenues
$
23
$
21
10
%
$
66
$
51
29
%
Research and development
49
40
23
%
74
73
1
%
Sales and marketing
87
82
6
%
153
158
(3
%)
General and administrative
493
360
37
%
905
664
36
%
Total stock-based compensation
$
652
$
503
30
%
$
1,198
$
946
27
%
(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 $0.02 and $0.09 for the three and
six months ended October 31, 2020, respectively. Diluted per share
for Class B shares under the two-class method are $0.06 and $0.09
for the three and six months ended October 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 six month periods ended October 31,
2020 of 12.5% and 13.2% and 15.20% three and six month periods
ended October 31, 2019, respectively.
nm- not meaningful
AMERICAN SOFTWARE,
INC.
Consolidated Balance Sheet
Information
(In thousands)
(Unaudited)
October 31,
April 30,
2020
2020
Cash and Cash Equivalents
$
81,786
$
79,814
Short-term Investments
12,357
14,161
Accounts Receivable:
Billed
18,499
22,582
Unbilled
2,499
2,425
Total Accounts Receivable, net
20,998
25,007
Prepaids & Other
6,673
6,684
Current Assets
121,814
125,666
Investments - Non-current
472
701
PP&E, net
3,225
3,373
Capitalized Software, net
6,473
8,362
Goodwill
25,888
25,888
Other Intangibles, net
509
1,132
Deferred Sales Commissions -
Non-current
1,909
2,177
Lease Right of Use Assets
1,813
2,053
Other Non-current Assets
1,899
1,941
Total Assets
$
164,002
$
171,293
Accounts Payable
$
1,640
$
1,643
Accrued Compensation and Related costs
3,139
6,635
Dividend Payable
3,576
3,547
Operating Lease Obligation - Current
797
763
Other Current Liabilities
790
643
Deferred Revenues - Current
31,206
34,227
Current Liabilities
41,148
47,458
Operating Lease Obligation -
Non-current
1,137
1,424
Deferred Tax Liability - Non-current
2,553
2,897
Other Long-term Liabilities
111
92
Long-term Liabilities
3,801
4,413
Total Liabilities
44,949
51,871
Shareholders' Equity
119,053
119,422
Total Liabilities & Shareholders'
Equity
$
164,002
$
171,293
AMERICAN SOFTWARE,
INC.
Condensed Consolidated
Cashflow Information
(In thousands)
(Unaudited)
Six Months Ended
October 31,
2020
2019
Net cash provided by operating
activities
$
6,771
$
4,050
Capitalized computer software development
costs
(371
)
(1,890
)
Purchases of property and equipment, net
of disposals
(163
)
(238
)
Net cash used in investing
activities
(534
)
(2,128
)
Dividends paid
(7,118
)
(6,884
)
Proceeds from exercise of stock
options
2,853
6,358
Net cash used in financing
activities
(4,265
)
(526
)
Net change in cash and cash
equivalents
1,972
1,396
Cash and cash equivalents at beginning of
period
79,814
61,288
Cash and cash equivalents at end of
period
$
81,786
$
62,684
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201119006118/en/
Vincent C. Klinges Chief Financial Officer American Software,
Inc. (404) 264-5477
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