American Software Reports Preliminary Fourth Quarter and Fiscal Year 2019 Results

Subscription Fees Increase 47% for the Quarter and Cloud Services
Annual Contract Value Increases 36%

ATLANTA–(BUSINESS WIRE)–American Software, Inc. (NASDAQ: AMSWA) today reported preliminary
financial results for the fourth quarter and for fiscal year 2019.


Key fourth quarter financial highlights:


Subscription fees were $3.8 million for the quarter ended April 30,
2019, a 47% increase compared to $2.6 million for the same period last
year, while software license revenues were $1.7 million, a 42%
decrease compared to $2.9 million for the same period last year,
reflecting our continued transition to the SaaS engagement model.


Cloud Services Annual Contract Value (ACV) increased approximately 36%
to $17.3 million as of the quarter ended April 30, 2019 compared to
$12.7 million as of the same period of the prior year.


Total revenues for the quarter ended April 30, 2019 were $26.3
million, a decrease of 11% over the comparable period last year.


Recurring revenue streams for Maintenance and Subscription Cloud
Services were 56% of total revenues in the quarter ended April 30,
2019 compared to 46% in the same period of the prior year.


Maintenance revenues for the quarter ended April 30, 2019 decreased 1%
to $10.8 million compared to $10.9 million for the same period last
year.


Professional services and other revenues for the quarter ended April
30, 2019 were $9.9 million compared to $12.9 million for the same
period last year.


Operating earnings for the quarter ended April 30, 2019 decreased 59%
to $1.0 million compared to $2.5 million for the same period last year.


GAAP net earnings for the quarter ended April 30, 2019 increased 48%
to $1.9 million or $0.06 per fully diluted share compared to $1.3
million or $0.04 per fully diluted share for the same period last year.


Adjusted net earnings for the quarter ended April 30, 2019, which
exclude non-cash stock-based compensation expense and amortization of
acquisition-related intangibles, were $2.7 million or $0.09 per fully
diluted share compared to $2.0 million or $0.06 per fully diluted
share for the same period last year.


EBITDA decreased by 27% to $3.1 million for the quarter ended April
30, 2019 compared to $4.2 million for the same period last year.


Adjusted EBITDA decreased by 23% to $3.5 million for the quarter ended
April 30, 2019 compared to $4.5 million for the quarter ended April
30, 2018. Adjusted EBITDA represents GAAP net earnings adjusted for
amortization of intangibles, depreciation, interest (expense)/income &
other, net, income tax expense and non-cash stock-based compensation
expense.


Key fiscal year 2019 financial highlights:


Subscription fees were $14.0 million for the twelve months ended April
30, 2019, a 58% increase compared to $8.9 million for the same period
last year, while software license revenues were $7.1 million, a 54%
decrease compared to $15.3 million for the same period last year,
reflecting our continued transition to the SaaS engagement model.


Total revenues for the twelve months ended April 30, 2019 decreased by
4% to $108.7 million compared to $112.7 million for the same period
last year.


Recurring revenue streams of Maintenance and Subscription Cloud
Services were 55% of total revenues for the twelve month period ended
April 30, 2019 compared to 47% in the same period of the prior year.


Maintenance revenues for the twelve months ended April 30, 2019 were
$45.4 million, a 4% increase compared to $43.8 million for the same
period last year.


Professional services and other revenues for the twelve months ended
April 30, 2019 decreased 6% to $42.2 million compared to $44.7 million
for the same period last year.


For the twelve months ended April 30, 2019, the Company reported
operating earnings of approximately $5.3 million compared to $13.5
million for the same period last year, a 61% decrease.


GAAP net earnings were approximately $6.8 million or $0.22 per fully
diluted share for the twelve months ended April 30, 2019, a 44%
decrease compared to $12.1 million or $0.40 per fully diluted share
for the same period last year.


Adjusted net earnings for the twelve months ended April 30, 2019,
which exclude stock-based compensation expense, amortization of
acquisition-related intangibles and a discrete tax benefit adjustment
related to the Tax Cuts and Jobs Act of 2017, decreased 22% to $10.5
million or $0.33 per fully diluted share, compared to $13.5 million or
$0.44 per fully diluted share for the same period last year.


EBITDA decreased by 34% to $13.0 million for the twelve months ended
April 30, 2019 compared to $19.6 million for the same period last year.


Adjusted EBITDA decreased 30% to $14.8 million for the twelve months
ended April 30, 2019 compared to $21.0 million for the twelve months
ended April 30, 2018. 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.


The overall financial condition of the Company remains strong, with cash
and investments of approximately $88.5 million and no debt as of April
30, 2019. During the fourth quarter of fiscal 2019, the Company paid
shareholder dividends of approximately $3.4 million.


“We are pleased with our 58% growth in Subscription Fees and 36%
increase in Cloud Services Annual Contract Value (ACV) as these key
performance indicators continue to underscore our measured transition to
a cloud-first business model for the 2019 fiscal year,” said Allan Dow,
president of American Software. “Additionally, our recurring revenue
streams of Maintenance and Subscription Cloud Services represented 56%
of fourth quarter Total Revenues, giving our business and shareholders
increased visibility and stability with respect to future revenue. While
we remain encouraged by our progress towards higher recurring revenues,
we experienced longer sales cycles throughout the year and especially in
the fourth quarter. As we look forward to fiscal year 2020, we believe
our investments in product innovations, go-to-market coverage, and
advanced analytics should enable us to build upon our performance in
fiscal year 2019.”


“We are driving differentiated innovation across our portfolio and
continue to be recognized as a leader in the supply chain solutions
marketplace. In fact, Gartner positioned two of our brands in the May
2019 Magic Quadrant for Sales and Operations Planning Systems of
Differentiation. Logility was recognized with the highest overall
position for Ability to Execute in the Leader quadrant and Demand
Management was prominently ranked in the Challenger quadrant,” stated
Dow. “Artificial Intelligence and machine learning are powering the
ability for our solutions to further automate, accelerate and streamline
supply chain planning. These innovations will help our customers better
address the increasingly competitive labor market with new automation
advantages, increased visibility, greater operational efficiency and
more confident decision-making. It is an exciting time to be in the
supply chain innovation business and we are optimistic about the
opportunities ahead.”


Additional highlights for the fourth quarter and fiscal 2019 include:


Customers and Channels


Notable new and existing customers placing orders with the Company in
the fourth quarter include: Bericap, Cement Australia, Dismatec S.A.,
Helzberg’s Diamond Shops, Lacoste, Living Proof, Marco Pharma
International, Oatly, Quicksilver Scientific, Red Wing Shoe Company,
Sandvik, Sleep Country, Tencate Geosynthetics, Tyler Union, and
Violeta.


During the quarter, SaaS subscription and/or software license
agreements were signed with customers located in the following 12
countries: Australia, Belgium, Bolivia, Bosnia and Herzegovina,
Canada, France, Germany, Mexico, New Zealand, Sweden, United States
and Uruguay.


Logility, Inc., a wholly owned subsidiary of the Company, announced
Tillamook County Creamery Association has received the prestigious
2019 Velocity Award. Presented at the 2019 Velocity Conference, the
award highlights a company that has demonstrated exceptional
innovation in its effort to implement a digital supply chain
initiative that significantly improves operations and creates a
platform for growth.


Logility also recognized the recipients of the 2019 Accelerator Awards
presented to Follett Corporation, Jockey International, Inc., Leupold
& Stevens, Siemens Healthineers, and Smithfield Foods, Inc. for
leading transformative digital supply chain initiatives that resulted
in significant business impact through the innovative use of people,
process, technology and data.


Logility congratulated Elaine Videau, Tillamook County Creamery
Association, and Jay Schmidt, Leupold & Stevens, on their selection to
the 2019 Supply & Demand Chain Executive Practitioner Pros to Know.
Ms. Videau and Mr. Schmidt were two of 27 professionals honored this
year for their commitment to transformative supply chain solutions and
processes.


Demand Management, Inc., a wholly-owned subsidiary of Logility,
announced that Kale Aero, a leading provider of structural components,
assemblies, and kits to the aerospace industry, chose Demand Solutions®
manufacturing as its new scheduling platform. Kale Aero’s Demand
Solutions implementation will support the growing company’s operations
in Istanbul, Turkey.


New Generation Computing, Inc. (NGC), a wholly-owned subsidiary of the
Company, announced that Quality Worldwide, a full-service apparel
design and manufacturing company, is implementing its Andromeda Cloud
Platform®. Quality Worldwide selected the Andromeda Cloud
Platform, including PLM, SCM and Quality Control, as well as NGC’s ERP
solution, to deliver an even higher level of service and support for
its customers, who include many of the retail and fashion industry’s
best-known brands.


NGC announced that California Manufacturing Company selected the
Andromeda Cloud Platform. California Manufacturing Company will
implement the NGC Andromeda PLM® and Andromeda SCM®
solutions for both the Canyon Guide Outfitters and Dakota Grizzly
brands, providing the company with an integrated, seamless solution
for all its lines of business.


NGC announced that Rip Curl, a Torquay, Australia based designer,
manufacturer and retailer of high-tech surfing sportswear and a broad
spectrum of accompanying products, will replace its legacy PLM system
with Andromeda PLM. Following a comprehensive market evaluation, Rip
Curl selected NGC’s cloud-based Andromeda PLM solution based on the
platform’s robust planning functionality, strong vendor interaction
capabilities, and efficient data management and entry.


Company and Technology


During the quarter, the Company hosted the 2019 Velocity Conference
with keynote presenters including Amber Salley, research director,
Gartner, and Sean Willems, Ph.D., Haslam Chair in Supply Chain
Analytics, University of Tennessee. The global customer conference
drew a record audience and featured 80 breakout and training sessions
to help supply chain leaders leverage best practices and new
technology innovations to drive greater speed, precision and value for
their companies.


Logility announced Logility Voyager Pulse Wise, an autonomous engine
that continuously senses, analyzes and updates demand planning
parameters in real-time to help ensure the supply chain operates at
peak performance. Artificial intelligence analyzes future demand
signals and actual performance to proactively react to changes that
may impact forecast accuracy. This innovative approach to creating a
more precise supply chain plan has been shown to increase forecast
accuracy by 20 to 50 percent.


Logility highlighted several enhancements to the Logility Voyager
Solutions platform that leverage valuable applications of artificial
intelligence (AI) and machine learning to boost supply chain
performance. A few of the AI and machine learning features announced
include Voyager Pulse Wise, Voyager Order Promising, Optimization
Orchestration, Advanced Demand Simulation, Inventory Optimization and
Inspiration Board.


Logility launched the Logility Evergreen Upgrade Service to help
customers overcome IT obstacles and take advantage of the latest
innovations offered with the Logility Voyager Solutions platform.
Through Logility’s new service, companies will gain a better grasp of
the margin, revenue and cost improvements available to them as well as
intangible benefits including improved employee satisfaction, enhanced
brand equity and customer loyalty.


During the quarter, Logility announced Mac McGary joined the company
as the executive vice president of Global Sales. McGary was most
recently president of Sweetbridge Alliance and has held various sales
and operational leadership positions in both young and mature
enterprise software companies focused on the supply chain, including
executive vice president of global sales at GT Nexus and vice
president of Industrial and High Tech Markets at QAD.


Halo, a division of Logility, Inc., announced the release of Halo
Demand Sensing, an innovative solution that leverages AI and multiple
data streams to create an accurate sense-and-respond forecast to
increase margins and optimize inventory deployment. Halo Demand
Sensing builds on traditional approaches to accelerate decision-making
for improved service levels, reduced inventory investment and
increased profitability across retail, consumer goods, consumer
electronics, and food and beverage industries.


Logility and Demand Management both announced during the quarter that
industry publication Food Logistics named each company to its
2018 FL100+ Top Software and Technology Provider list. This marks the
15th consecutive year Logility has received this recognition and the
tenth time Demand Management has received the award for helping many
of the world’s leading food and beverage companies overcome their
complex supply chain challenges.


Demand Management announced the general availability of its new
SaaS-based Manufacturing Optimization solution designed to identify
the most effective use of a company’s production resources given
business objectives and network constraints. Bridging the gap between
demand planning and production scheduling, Demand Solutions
Manufacturing Optimization combines short-term detailed scheduling
with longer range capacity planning and modeling to simultaneously
solve multiple, complex constraints and model the real-world
environment.


Demand Management announced that its president, Bill Harrison, was
named a Provider Pro to Know by industry publication Supply &
Demand Chain Executive for the eleventh consecutive year and NGC
announced that three of its executives, Mark Burstein, president sales
and development, Fred Isenberg, president consulting services, and
Roger Mayerson, vice president business solutions, were recognized.
The Pros to Know Award recognizes supply chain executives that are
leading initiatives to help prepare their customers’ or their
companies’ supply chains for the significant challenges of today’s
business climate.


NGC announced it would showcase how its Andromeda Cloud Platform is
driving digital transformation at the 2019 Velocity Conference. In
addition, the company highlighted several sessions led by leading
apparel manufacturers and retailers.


About American Software, Inc.


Atlanta-based American Software, Inc. (NASDAQ: AMSWA), named one
of the 100 Most Trustworthy Companies in America by Forbes Magazine,
delivers innovative demand-driven supply chain management and advanced
retail planning platforms backed by more than 45 years of industry
expertise. Logility, Inc., a wholly-owned subsidiary of American
Software, is a leading provider of collaborative supply chain
optimization and advanced retail planning solutions that help medium,
large and Fortune 500 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, Red Wing Shoe Company, Verizon
Wireless and VF Corporation. Demand Management, Inc., a wholly-owned
subsidiary of Logility, delivers affordable, easy-to-use
Software-as-a-Service (SaaS) 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. Halo Business Intelligence, a
division of Logility, is an advanced analytics software provider
leveraging an innovative blend of artificial intelligence and machine
learning technology to drive greater supply chain performance. Halo
customers include Aaron’s, Leatherman Tool Group and SweetWater Brewing.
New Generation Computing, Inc., a wholly-owned subsidiary of American
Software, powers the digital supply chain with the Andromeda Cloud
Platform®, enabling brand owners and retailers to maximize
revenue and profit by accelerating lead times, streamlining product
development and supply chain management, and optimizing
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 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), and vendor quality and compliance. For more
information about American Software, please visit www.amsoftware.com,
call (800) 726-2946 or email: ask@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 the existing client contracts in the
forward 12-month period. EBITDA represents GAAP net earnings adjusted
for amortization of intangibles, depreciation, interest (expense)/income
& other, net, and income tax (benefit)/expense. 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. A
reconciliation of these non-GAAP financial measures to their nearest
U.S. GAAP measures appears in the accompanying financial tables.


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 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 Securities and
Exchange Commission. For more information, contact: Vincent C. Klinges,
Chief Financial Officer, American Software, Inc., (404) 264-5477, invest@amsoftware.com
or Kevin Liu, Investor Relations, (626) 657-0013.


American Software® is a registered trademark of American
Software, Inc.; Logility® is a registered trademark and
Logility Voyager Solutionsand Logility Voyager Pulse Wise are
trademarks of Logility, Inc.; Demand Solutions® is a
registered trademark of Demand Management, Inc.; and New Generation
Computing®, Andromeda Cloud Platform®,Andromeda
PLM® and Andromeda SCM® are registered trademarks
of New Generation Computing, Inc. Other products mentioned in this
document are registered marks, trademarks or service marks of their
respective owners.


 


AMERICAN SOFTWARE, INC.


Consolidated Statements of Operations Information


(In thousands, except per share data, unaudited)




 


 




 


 




 


 




 


 




 


 




 


 










Fourth Quarter Ended






Twelve Months Ended








April 30,






April 30,








2019






2018






Pct Chg.






2019






2018






Pct Chg.


Revenues:






































License fees






$


1,694






$


2,925






(42%)






$


7,126






$


15,344






(54%)


Subscription fees








3,830








2,611






47%








14,026








8,855






58%


Professional services & other








9,914








12,889






(23%)








42,154








44,663






(6%)


Maintenance






 


10,833






 


10,938






(1%)






 


45,400






 


43,841






4%


Total Revenues






 


26,271






 


29,363






(11%)






 


108,706






 


112,703






(4%)






































 


Cost of Revenues:






































License fees








1,125








1,569






(28%)








6,430








6,261






3%


Subscription services








2,013








1,038






94%








5,759








3,817






51%


Professional services & other








6,937








7,923






(12%)








31,421








30,596






3%


Maintenance






 


1,914






 


2,407






(20%)






 


8,356






 


9,326






(10%)


Total Cost of Revenues






 


11,989






 


12,937






(7%)






 


51,966






 


50,000






4%


Gross Margin






 


14,282






 


16,426






(13%)






 


56,740






 


62,703






(10%)


Operating expenses:






































Research and development








5,060








4,779






6%








19,039








16,681






14%


Less: capitalized development








(1,800)








(1,152)






56%








(5,961)








(4,804)






24%


Sales and marketing








5,809








5,603






4%








20,992








20,658






2%


General and administrative








4,103








4,639






(12%)








17,006








16,033






6%


Provision for doubtful accounts








–








–






–








–








24






nm


Amortization of acquisition-related intangibles








97








94






3%








388








580






(33%)








 






 






 






 






 






 


Total Operating Expenses






 


13,269






 


13,963






(5%)






 


51,464






 


49,172






5%


Operating Earnings






 


1,013






 


2,463






(59%)






 


5,276






 


13,531






(61%)


Interest Income & Other, Net






 


1,275






 


(665)






nm






 


2,365






 


2,184






8%


Earnings Before Income Taxes








2,288








1,798






27%








7,641








15,715






(51%)


Income Tax Expense






 


414






 


530






(22%)






 


838






 


3,662






(77%)


Net Earnings






$


1,874






$


1,268






48%






$


6,803






$


12,053






(44%)


Earnings per common share: (1)






































Basic






$


0.06






$


0.04






50%






$


0.22






$


0.40






(45%)


Diluted






$


0.06






$


0.04






50%






$


0.22






$


0.40






(45%)






































 


Weighted average number of common shares outstanding:






































Basic








31,144








30,514














30,950








30,080








Diluted








31,452








30,989














31,378








30,472












































 


nm- not meaningful


 


Contacts

Vincent C. KlingesChief Financial OfficerAmerican Software,
Inc.(404) 264-5477

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