American Software Reports Preliminary Third Quarter of Fiscal Year 2014 Results
Operating Earnings Increase 54% for the Quarter
ATLANTA (February 27, 2014) American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the third quarter of fiscal 2014. The Company has delivered 52 consecutive quarters of profitability.
Key third quarter financial metrics:
- Total revenues for the quarter ended January 31, 2014 were $24.4 million, an increase of 6% over the comparable period last year.
- Software license fee revenues for the quarter ended January 31, 2014 were $5.0 million, an increase of 2% over the same period last year.
- Services and other revenues for the quarter ended January 31, 2014 increased 6% to $10.2 million compared to $9.6 million for the same period last year.
- Maintenance revenues for the quarter ended January 31, 2014 were $9.3 million compared to $8.6 million, an increase of 8% over the same period last year.
- Operating earnings for the quarter ended January 31, 2014 were $3.5 million, an increase of 54% compared to the same period last year.
- GAAP net earnings for the quarter ended January 31, 2014 were $2.5 million or $0.09 per fully diluted share, an increase of 16% over the same period last year.
- Adjusted net earnings for the quarter ended January 31, 2014, which excludes stock–based compensation expense and amortization of acquisition–related intangibles, were $2.8 million or $0.10 per fully diluted share compared to $2.5 million or $0.09 per fully diluted share for the same period last year, which also excluded stock–based compensation expense and amortization of acquisition–related intangibles.
- Adjusted EBITDA was $4.4 million for the quarter ended January 31, 2014 compared to $3.7 million for the quarter ended January 31, 2013. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense, stock–based compensation, and other significant non–routine operating and non–operating income and expense items, if applicable.
Key fiscal 2014 year to date financial highlights:
- Total revenues for the nine months ended January 31, 2014 were $74.7 million, a 1% decrease over the comparable period last year.
- Software license fees for the nine–month period were $14.4 million, a 7% decrease compared to the same period last year. The Company booked an additional $1.1 million in the second quarter that will be recognized over an approximately three–year period.
- Services and other revenues were $33.1 million, a 4% decrease compared to the same period last year.
- Maintenance revenues were $27.2 million, a 7% increase over the comparable period last year.
- For the nine months ended January 31, 2014, the Company reported operating earnings of approximately $11.3 million, a 10% increase over the same period last year.
- GAAP net earnings were approximately $7.8 million or $0.28 per fully diluted share for the nine months ended January 31, 2014, a 6% increase compared to $7.3 million or $0.27 per fully diluted share for the same period last year.
- Adjusted net earnings for the nine months ended January 31, 2014, which excludes stock–based compensation expenses and acquisition–related amortization of intangibles, were $8.7 million or $0.31 per fully diluted share, compared to $8.3 million or $0.30 per fully diluted share for the same period last year, which also excluded stock–based compensation expenses and acquisition–related amortization of intangibles.
- Adjusted EBITDA was $14.3 million for the nine months ended January 31, 2014 compared to $14.5 million for the nine months ended January 31, 2013. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense, stock–based compensation, and other significant non–routine operating and non–operating income and expense items, if applicable.
The Company is including 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 non–GAAP net earnings and non–GAAP per share measures used by other companies. The Company believes that this presentation of 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.
The overall financial condition of the Company remains strong, with cash and investments of approximately $74.5 million as of January 31, 2014. The Company increased cash and investments by approximately $16.8 million when compared to January 31, 2013. During the third quarter, the Company paid approximately $2.8 million in dividends and announced that its Board of Directors declared a quarterly dividend of $.10 per share payable to the Class A and Class B Common Shareholders of record at the close of business on May 9, 2014. The dividend will be paid on or about May 23, 2014.
“Third quarter operating earnings increased by 54% fueled by growth in all three revenue streams including license fees, services and maintenance,” stated Mike Edenfield, president and CEO of American Software.” Although the global economic environment continues to be dynamic, companies are starting to address the volatility and complexity with more comprehensive supply chain planning capabilities that deliver increased visibility, greater accuracy and a platform for growth.”
“We believe companies are beginning to invest more strategically as they strive to better manage supply chain business processes across their increasingly complex global networks. This translates into competitive evaluations that span a broader footprint of our software and services solutions including cloud and managed services,” continued Edenfield.” We remain optimistic about the quarters ahead and continue to invest aggressively in our product portfolio and people.”
Additional highlights for the third quarter of fiscal 2014 include:
Customers & Channels
- Notable new and existing customers placing orders with the Company in the third quarter include: ASICS America, Blank Generation, Bodybuilding.com, Brightstar Corporation, Hostess, Jackson Family Wines, Party City Holdings, Signal Products, and Taylor Fresh Foods.
- During the quarter, software license agreements were signed with customers located in the following 11 countries: Australia, Canada, China, Czech Republic, Denmark, France, Ireland, Sweden, the United Arab Emirates, the United Kingdom, and the United States.
- NGC Software, a wholly–owned subsidiary of the Company, announced SRI (Summit Resource International, Inc.) is extending its relationship with the company to include NGC’s Global Enterprise Suite which includes fully integrated PLM, ERP and Logility was voted a top supply chain management solution provider in both the supply chain planning and supply chain execution categories for the 14th consecutive year by the readers of Consumer Goods Technology. The recognition, based solely on the votes of supply chain executives and practitioners at consumer goods companies, also named Logility the number one vendor in customer satisfaction for supply chain execution and the SMB market leader in supply chain planning.
- Logility also announced that industry research firm Aberdeen Group published its latest findings on the importance of Sales and Operations Planning (S&OP) in the report “S&OP: Non–Negotiable as a Process.” The research showed Best–in–Class companies turn to best–of–breed solutions like Logility Voyager Solutions to improve forecast accuracy, increase margins and gain the ability to quickly evaluate multiple business scenarios.
- Food Logistics magazine named Logility and Demand Management to the publication’s list of Top 100 Technology Providers. Logility Voyager Solutions and Demand Solutions® were highlighted for driving enhanced, end–to–end supply chain visibility and helping food and beverage companies boost supply chain efficiency. More than 165 companies submitted applications to be considered as a top technology provider to the food and beverage industries.
- NGC Software earned top 10 rankings in more than a dozen categories in the 2013 RIS News Software LeaderBoard. The LeaderBoard, now in its 13th year, is an influential guide to Best–in–Class retail technology software companies. Based entirely on retailer evaluations, the LeaderBoard ranks technology vendors based on customer satisfaction across a wide range of criteria, serving as an objective guide to help retailers find the vendors and solutions they need.
About American Software, Inc.
Atlanta–based American Software (NASDAQ: AMSWA) provides demand–driven supply chain management and enterprise software solutions, backed by more than 40 years of industry experience, that drive value for companies regardless of market conditions. Logility, Inc., a wholly–owned subsidiary of American Software, is a leading provider of collaborative solutions to optimize the supply chain. Logility Voyager Solutions™ is a complete supply chain management solution suite that features a performance monitoring architecture and provides supply chain visibility; demand, inventory and replenishment planning; sales and operations planning (S&OP); supply and inventory optimization; manufacturing planning and scheduling; transportation planning and management; and warehouse management. Logility customers include Fender Musical Instruments, Parker Hannifin, SPANX, Verizon Wireless, and VF Corporation. Demand Management, Inc., a wholly–owned subsidiary of Logility, delivers supply chain solutions to small and midsized manufacturers, distributors and retailers. Demand Management’s Demand Solutions® suite is widely deployed and globally recognized for forecasting, demand planning and point–of–sale analysis. Demand Management serves customers such as AutomationDirect.com, Campbell Hausfeld and Lonely Planet. New Generation Computing® (NGC®), a wholly–owned subsidiary of American Software, is a leading provider of PLM, supply chain management, ERP and product testing software and services for brand owners, retailers and consumer products companies. NGC customers include A|X Armani Exchange, Aeropostale, Billabong, Carter’s, Casual Male, Hugo Boss, Jos. A. Bank, FGL Group, Athletica, Marchon Eyewear, and Swatfame. For more information about American Software, please visit www.amsoftware.com, call (800) 726–2946 or email:
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, continuing U.S. and global economic uncertainty, the timing and degree of business recovery, unpredictability and the irregular pattern of future revenues, dependence on particular market segments or customers, competitive pressures, delays, product liability and warranty claims and other risks associated with new product development, undetected software errors, market acceptance of the Company’s products, technological complexity, the challenges and risks associated with integration of acquired product lines, companies and services, 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 Securities and Exchange Commission. For more information, contact: Vincent C. Klinges, Chief Financial Officer, American Software, Inc., (404) 264–5477 or fax: (404) 237–8868.
Logility is a registered trademark and Logility Voyager Solutions is a trademark of Logility, Inc., Demand Solutions is a registered trademark of Demand Management, Inc., and NGC and New Generation Computing are registered trademarks of New Generation Computing, Inc.. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.