Subscription Fee Growth of 8% and Adjusted
EBITDA Margin was 16% of revenue from Continuing Operations in
Q2
American Software, Inc. (NASDAQ: AMSWA) today reported
preliminary financial results for the second quarter of fiscal year
2024. During the quarter we divested our information technology
consulting firm, The Proven Method and its results are included in
discontinuing operations.
Key Second Quarter Financial Highlights from Continuing Operations:
- Subscription fees were $13.4 million for the quarter ended
October 31, 2023, an 8% increase compared to $12.3 million for the
same period last year.
- Total revenues for the quarter ended October 31, 2023 decreased
6% to $25.7 million, compared to $27.3 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 $21.5 million or 84% of total revenues in the
quarter ended October 31, 2023 compared to $21.2 million or 78% of
total revenues in the same period of the prior year.
- Maintenance revenues for the quarter ended October 31, 2023
decreased 8% to $8.1 million compared to $8.8 million for the same
period last year.
- Professional services and other revenues for the quarter ended
October 31, 2023 decreased 26% to $4.0 million for the quarter
ended October 31, 2023 compared to $5.4 million for the same period
last year. The decline was primarily driven by lower project work
and outsourcing of some services to partners.
- Software license revenues were $0.2 million for the quarter
ended October 31, 2023 compared to $0.7 million in the same period
last year.
- Operating earnings for the quarter ended October 31, 2023 were
$1.2 million compared to $2.6 million for the same period last
year.
- GAAP net earnings from continuing operations for the quarter
ended October 31, 2023 were $0.6 million or $0.02 per fully diluted
share compared to $1.9 million or $0.06 per fully diluted share for
the same period last year.
- Adjusted net earnings from continuing operations for the
quarter ended October 31, 2023, which excludes non-cash stock-based
compensation expense and amortization of acquisition-related
intangibles, were $2.9 million or $0.08 per fully diluted share
compared to $3.2 million or $0.09 per fully diluted share for the
same period last year.
- EBITDA from continuing operations was $2.5 million for the
quarter ended October 31, 2023 compared to $3.4 million for the
same period last year.
- Adjusted EBITDA from continuing operations was $4.1 million for
the quarter ended October 31, 2023 compared to $4.7 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 2024 Year to Date Financial Highlights
from Continuing Operations:
- Subscription fees were $27.1 million for the six months ended
October 31, 2023, a 11% increase compared to $24.4 million for the
same period last year, while Software license revenues were $0.5
million compared to $1.0 million for the same period last
year.
- Total revenues for the six months ended October 31, 2023
decreased 5% to $51.6 million compared to $54.1 million for the
same period last year.
- Recurring revenue streams for Maintenance and Cloud Services
were $43.4 million and $42.1 million or 84% and 78% of total
revenues for the six-month periods ended October 31, 2023 and 2022,
respectively.
- Maintenance revenues for the six months ended October 31, 2023
were $16.3 million, an 8% decrease compared to $17.7 million for
the same period last year.
- Professional services and other revenues for the six months
ended October 31, 2023 decreased 30% to $7.7 million compared to
$10.9 million for the same period last year. The decline was
primarily driven by lower project work and outsourcing of some
services to partners.
- For the six months ended October 31, 2023, the Company reported
continuing operating earnings of approximately $2.6 million
compared to $4.9 million for the same period last year.
- GAAP net earnings from continuing operations were approximately
$3.2 million or $0.09 per fully diluted share for the six months
ended October 31, 2023, a 17% decrease compared to $3.9 million or
$0.11 per fully diluted share for the same period last year.
- Adjusted net earnings from continuing operations for the six
months ended October 31, 2023, which exclude stock-based
compensation expense and amortization of acquisition-related
intangibles, increased 6% to $6.7 million or $0.19 per fully
diluted share, compared to $6.3 million or $0.18 per fully diluted
share for the same period last year.
- EBITDA from continuing operations decreased by 29% to $4.6
million for the six months ended October 31, 2023 compared to $6.5
million for the same period last year.
- Adjusted EBITDA from continuing operations decreased 15% to
$7.8 million for the six months ended October 31, 2023 compared to
$9.1 million for the six months ended October 31, 2022. 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 2024 highlights:
Clients & Channels
- Notable new and existing customers placing orders with the
Company in the second quarter include: Black Rifle Coffee Company,
Ferguson Enterprises, LLC, Hostess Brands, LLC., Johnson Brothers
Liquor Company, Peet’s Coffee, Inc., Premier Farnell UK Limited,
Reynolds Consumer Products LLC, Sandvick Mining and Construction
Tools AB.
- During the quarter, SaaS subscription and software license
agreements were signed with customers located in the following
eight countries: Australia, Belgium, Brazil, France, Sweden, the
Netherlands, the United Kingdom and the United States.
Company & Technology
- On September 5th, Logility closed the acquisition of Garvis
B.V., a visionary SaaS startup that combines large language models
(ChatGPT) with AI-native demand forecasting. DemandAI+ is the only
offering available that combines advanced AI-driven demand
planning, demand sensing, and causal forecasting with generative AI
in a single solution elevating the planning capabilities across the
supply chain. Analysts cite a 20 – 24% improvement in forecast
accuracy for clients who adopt DemandAI+.
- In September, the Company announced the divestment of its
information technology consulting firm, The Proven Method to
Marathon TS, Inc., an IT professional services firm. The sale
closed on September 18, 2023.
- During the quarter the Company implemented a stock buyback
program and purchased 430,576 shares at an average price of $11.20
per share.
- InventoryAI+, a powerful new offering optimizing inventory with
advanced AI and machine learning to enable clients to lower costs
while improving service was released. Building on existing
capabilities, Inventory AI+ empowers planners to resolve issues in
real-time and achieve higher levels of supply chain
performance.
- In September, two Logility clients, Rebecca Springett of Croda
and Rita Fisher of Reynolds, were recognized as winners in Supply
& Demand Chain Executive’s 2023 Women in Supply Chain. This
award honors female supply chain leaders whose accomplishments,
mentorship, and examples set a foundation for women in all levels
of a company’s supply chain network.
- Logility’s planning solutions and clients were recognized in
the following publications:
- Sourcing Innovation “Logility “Starboard”: The Real-Time
What-If Supply Chain Network modeler that Every Sourcing
Professional Should Have”
- Total Retail: “How Network Optimization Creates Dynamic CPG
Supply Chains”
- SupplyChainBrain: “Applying AI to Supply Chain Network
Design”
The overall financial condition of the Company remains strong,
with cash and investments of approximately $83.9 million. During
the second quarter of fiscal year 2024, the Company paid
shareholder dividends of approximately $3.8 million.
“Our company transformation continued in the second quarter with
several key events such as the acquisition of AI-native demand
forecasting pioneer Garvis, the divestitures of two non-core
businesses, information technology consulting firm, The Proven
Method and Transportation Rating Solutions and implemented a stock
buyback program,” said Allan Dow, CEO and President of American
Software. “Supply chain planning is entering a significant
transformation with advancements in technology, generational shifts
of the workforce, and the significant speed of market charges and
disruptions. We have positioned the company to concentrate on
delivering modern, breakthrough technology to the supply chain
industry. Our guidance for fiscal 2024 has been updated to reflect
these transactions.”
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 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 (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)
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2023
2022
Pct Chg.
2023
2022
Pct Chg.
Revenues from continuing operations: Subscription fees
$
13,358
$
12,326
8
%
$
27,122
$
24,388
11
%
License fees
229
688
(67
%)
518
1,008
(49
%)
Professional services & other
4,003
5,435
(26
%)
7,689
10,929
(30
%)
Maintenance
8,100
8,830
(8
%)
16,263
17,735
(8
%)
Total Revenues
25,690
27,279
(6
%)
51,592
54,060
(5
%)
Cost of Revenues from continuing operations:
Subscription services
4,607
4,059
14
%
8,824
7,677
15
%
License fees
93
94
(1
%)
165
183
(10
%)
Professional services & other
2,856
3,490
(18
%)
5,915
7,184
(18
%)
Maintenance
1,733
1,577
10
%
3,428
3,150
9
%
Total Cost of Revenues
9,289
9,220
1
%
18,332
18,194
1
%
Gross Margin
16,401
18,059
(9
%)
33,260
35,866
(7
%)
Operating expenses from continuing operations: Research and
development
4,269
4,364
(2
%)
8,518
8,818
(3
%)
Sales and marketing
5,313
5,229
2
%
11,046
10,630
4
%
General and administrative
5,461
5,884
(7
%)
10,921
11,469
(5
%)
Amortization of acquisition-related intangibles
129
32
303
%
154
56
175
%
Total Operating Expenses
15,172
15,509
(2
%)
30,639
30,973
(1
%)
Operating Earnings from continuing operations
1,229
2,550
(52
%)
2,621
4,893
(46
%)
Interest (Loss) Income & Other, Net
(577
)
(145
)
298
%
1,310
(26
)
nm
Earnings from continuing operations Before Income Taxes
652
2,405
(73
%)
3,931
4,867
(19
%)
Income Tax Expense
31
489
(94
%)
696
975
(29
%)
Net Earnings from continuing operations
$
621
$
1,916
(68
%)
$
3,235
$
3,892
(17
%)
Earnings from discontinuing operations, Net of Income Taxes
(1)
$
1,742
$
189
822
%
$
1,876
$
278
575
%
Net Earnings
$
2,363
$
2,105
12
%
$
5,111
#
$
4,170
23
%
Earnings per common share from continuing operations:
(2) Basic
$
0.02
$
0.06
(67
%)
$
0.09
$
0.12
(25
%)
Diluted
$
0.02
$
0.06
(67
%)
$
0.09
$
0.11
(18
%)
Earnings per common share from discontinuing operations:
(2) Basic
$
0.05
$
-
0
%
$
0.05
$
0.01
400
%
Diluted
$
0.05
$
-
0
%
$
0.05
$
0.01
400
%
Earnings per common share: (2) Basic
$
0.07
$
0.06
17
%
$
0.14
$
0.13
8
%
Diluted
$
0.07
$
0.06
17
%
$
0.14
$
0.12
17
%
Weighted average number of common shares outstanding:
Basic
34,071
33,720
34,113
33,688
Diluted
34,094
34,072
34,127
34,040
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,
2023
2022
Pct Chg.
2023
2022
Pct Chg.
NON-GAAP Operating Earnings: Operating Earnings from
continuing operations (GAAP Basis)
$
1,229
$
2,550
(52
%)
$
2,621
$
4,893
(46
%)
Amortization of acquisition-related intangibles
795
270
194
%
1,027
369
178
%
Stock-based compensation
1,580
1,335
18
%
3,125
2,633
19
%
NON-GAAP Operating Earnings from continuing operations:
3,604
4,155
(13
%)
6,773
7,895
(14
%)
Non-GAAP Operating Earnings from continuing operations,
as a % of revenue
14
%
15
%
13
%
15
%
Second Quarter Ended Six Months Ended
October 31, October 31,
2023
2022
Pct Chg.
2023
2022
Pct Chg. NON-GAAP EBITDA: Net Earnings from
continuing operations (GAAP Basis)
$
621
$
1,916
(68
%)
$
3,235
$
3,892
(17
%)
Income Tax Expense
31
489
(94
%)
696
975
(29
%)
Interest (Loss) Income & Other, Net
577
145
298
%
(1,310
)
26
nm Amortization of intangibles
899
532
69
%
1,270
1,088
17
%
Depreciation
378
301
26
%
738
513
44
%
EBITDA from continuing operations (earnings before interest,
taxes, depreciation and amortization)
2,506
3,383
(26
%)
4,629
6,494
(29
%)
Stock-based compensation
1,580
1,335
18
%
3,125
2,633
19
%
Adjusted EBITDA from continuing operations
$
4,086
$
4,718
(13
%)
$
7,754
$
9,127
(15
%)
EBITDA from continuing operations, as a percentage of
revenues
10
%
12
%
9
%
12
%
Adjusted EBITDA, from continuing operations, as a
percentage of revenues
16
%
17
%
15
%
17
%
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2023
2022
Pct Chg.
2023
2022
Pct Chg.
NON-GAAP EARNINGS PER SHARE: Net Earnings from continuing
operations (GAAP Basis)
$
621
$
1,916
(68
%)
$
3,235
$
3,892
(17
%)
Amortization of acquisition-related intangibles (3)
757
213
255
%
846
293
189
%
Stock-based compensation (3)
1,505
1,053
43
%
2,572
2,079
24
%
Adjusted Net Earnings from continuing operations
$
2,883
$
3,182
(9
%)
$
6,653
$
6,264
6
%
Adjusted non-GAAP diluted earnings per share from
continuing operations
$
0.08
$
0.09
(11
%)
$
0.19
$
0.18
6
%
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2023
2022
Pct Chg.
2023
2022
Pct Chg.
NON-GAAP Earnings Per Share Net Earnings (GAAP Basis)
from continuing operations
$
0.02
$
0.06
(67
%)
$
0.09
$
0.11
(18
%)
Amortization of acquisition-related intangibles (3)
0.02
-
-
$
0.02
0.01
100
%
Stock-based compensation (3)
$
0.04
0.03
33
%
$
0.08
0.06
33
%
Adjusted Net Earnings from continuing operations
$
0.08
$
0.09
(11
%)
$
0.19
$
0.18
6
%
Second Quarter Ended
Six Months Ended
October 31,
October 31,
2023
2022
Pct Chg.
2023
2022
Pct Chg.
Amortization of acquisition-related intangibles Cost of
Subscription Services
$
666
$
238
180
%
$
874
$
313
179
%
Operating expenses
129
32
303
%
154
56
175
%
Total amortization of acquisition-related intangibles
$
795
$
270
194
%
$
1,028
$
369
179
%
Stock-based compensation Cost of revenues
$
83
$
67
24
%
$
161
$
108
49
%
Research and development
166
143
16
%
339
292
16
%
Sales and marketing
381
198
92
%
728
416
75
%
General and administrative
950
927
2
%
1,897
1,817
4
%
Total stock-based compensation
$
1,580
$
1,335
18
%
$
3,125
$
2,633
19
%
(1) For more information, please see note related to
discontinuing operations in the Company’s unaudited condensed
consolidated financial statements to be filed on or about December
1, 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 $0.02 and $0.09 for the three
and six months ended October 31, 2023, respectively. Continuing
diluted per share for Class B shares under the two-class method are
$0.06 and $0.11 for the three and six months ended October 31,
2022, 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
October 31, 2023
Six Months Ended
October 31, 2023
Three Months Ended
October 31, 2022
Six Months Ended
October 31, 2022
Continuing Operations
4.7
%
17.7
%
20.3
%
20.0
%
Discontinuing Operations
21.0
%
21.1
%
21.6
%
28.2
%
Total
17.2
%
19.0
%
20.4
%
20.6
%
nm- not meaningful
AMERICAN SOFTWARE,
INC.
Consolidated Balance Sheet
Information
(In thousands)
(Unaudited)
October 31,
April 30,
2023
2023
Cash and Cash Equivalents
$
62,971
$
90,059
Short-term Investments
20,917
23,451
Accounts Receivable: Billed
20,630
23,476
Unbilled
929
1,569
Total Accounts Receivable, net
21,559
25,045
Prepaids & Other
7,785
7,831
Current Assets from discontinuing operations
-
3,603
Total Current Assets
113,232
149,989
Investments - Non-current
-
486
PP&E, net
6,228
6,444
Capitalized Software, net
149
391
Goodwill
46,417
29,558
Other Intangibles, net
11,915
2,143
Other Non-current Assets
5,740
6,609
Total Assets
$
183,681
$
195,620
Accounts Payable
$
1,080
$
2,131
Accrued Compensation and Related costs
2,845
4,077
Dividend Payable
3,757
3,756
Other Current Liabilities
2,984
3,638
Deferred Revenues - Current
38,310
43,124
Current liabilities of discontinued operations
-
318
Current Liabilities
48,976
57,044
Other Long-term Liabilities
255
288
Total Liabilities
49,231
57,332
Shareholders' Equity
134,450
138,288
Total Liabilities & Shareholders' Equity
$
183,681
$
195,620
AMERICAN SOFTWARE,
INC.
Condensed Consolidated
Cashflow Information
(In thousands)
(Unaudited)
Six Months Ended
October 31,
2023
2022
Net cash provided by (used in) operating activities of continuing
operations
$
6,406
$
(11,822
)
Cash provided by operating activities of discontinued operations
1,618
561
Net cash used in operating activities
8,024
(11,261
)
Purchases of property and equipment, net of disposals
(386
)
(2,706
)
Purchase of business, net of cash acquired
(25,108
)
(6,500
)
Net cash used in investing activities of continuing operations
(25,494
)
(9,206
)
Net cash provided by investing activities of discontinued
operations
1,826
-
Net cash used in investing activities
(23,668
)
(9,206
)
Dividends paid
(7,514
)
(7,406
)
Purchases of common stock
(4,813
)
-
Proceeds from exercise of stock options
246
1,145
Net cash used in financing activities of continuing operations
(12,081
)
(6,261
)
Net Cash used in financing activities of discontinued operations
-
-
Net cash used in financing activities
(12,081
)
(6,261
)
Net change in cash and cash equivalents
(27,725
)
(26,728
)
Cash and cash equivalents at beginning of period
90,696
110,690
Cash and cash equivalents at end of period
$
62,971
$
83,962
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version on businesswire.com: https://www.businesswire.com/news/home/20231116829665/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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Von Mai 2023 bis Mai 2024