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American Software Reports Fourth Quarter and Fiscal Year 2023 Results

Subscription Fee Growth of 18% and Adjusted EBITDA Margin of 14% in Q4

American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the fourth quarter and fiscal year 2023.

Key Fourth Quarter Financial Highlights:

  • Subscription fees were $13.0 million for the quarter ended April 30, 2023, an 18% increase compared to $11.1 million for the same period last year.
  • Total revenues for the quarter ended April 30, 2023 decreased 14% to $29.9 million, compared to $34.6 million for the same period of the prior year, principally due to a decline in services and license fee revenue.
  • Recurring revenue streams for Maintenance and Cloud Subscriptions were $21.2 million or 71% of total revenues in the quarter ended April 30, 2023 compared to $19.8 million or 57% of total revenues in the same period of the prior year.
  • Maintenance revenues for the quarter ended April 30, 2023 decreased 7% to $8.2 million compared to $8.8 million for the same period last year reflecting the shift to cloud revenue as a client preference.
  • Professional services and other revenues for the quarter ended April 30, 2023 decreased 32% to $8.0 million compared to $11.7 million for the same period last year. The decline was primarily driven by a 43% decrease in non-core project revenue in our IT Consulting business unit. For the Supply Chain business, professional services revenues for the quarter ended April 30, 2023 decreased by 23% to $4.6 million when compared to $6.0 million in the same period last year due to lower project work and outsourcing of some services to partners.
  • Software license revenues were $0.7 million for the quarter ended April 30, 2023 compared to $3.1 million in the same period last year.
  • Operating earnings for the quarter ended April 30, 2023 were $2.3 million compared to $5.5 million for the same period last year.
  • GAAP net earnings for the quarter ended April 30, 2023 were $2.9 million or $0.08 per fully diluted share compared to $3.6 million or $0.10 per fully diluted share for the same period last year.
  • Adjusted net earnings for the quarter ended April 30, 2023, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, were $4.1 million or $0.12 per fully diluted share compared to $4.4 million or $0.13 per fully diluted share for the same period last year.
  • EBITDA was $3.0 million for the quarter ended April 30, 2023 compared to $6.4 million for the same period last year.
  • Adjusted EBITDA was $4.3 million for the quarter ended April 30, 2023 compared to $7.5 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 Fourth Quarter of Fiscal Year 2023 highlights:

Clients & Channels

  • Notable new and existing customers placing orders with the Company in the fourth quarter include: Annex Products Pty Ltd., CertainTeed LLC., DecoPac, Inc, Farmlands Cooperative Society Ltd., Heidelberg Materials US Inc., ICL, Inc., Libbey Glass LLC, Tilly’s Inc. and Yazaki, Inc.
  • During the quarter, SaaS subscription and software license agreements were signed with customers located in the following eight countries: Australia, Belgium, Mexico, New Zealand, Norway, Sweden, the United Kingdom and the United States.

Company & Technology

  • Announced in February, Allan Dow, president of Logility, Inc., and Elaine Videau, director of planning for Tillamook County Creamery Association, a farmer-owned co-op, were two winners of this year’s Food Logistics’ Rock Stars of the Supply Chain award. This annual award program recognizes influential individuals in the industry whose achievements, hard work and vision have shaped the global cold food supply chain.
  • In March, Allan Dow, president of Logility, Inc. and Marti Kirsch, EVP marketing for Logility, Inc. were announced as winners of the 2023 Pros to Know award by Supply and Demand Chain Executive. This annual award recognizes outstanding executives whose accomplishments offer a roadmap for other leaders looking to leverage their supply chain for competitive advantage.
  • In August, Logility was recognized with the Gartner Peer Insights “Voice of the Customer” award for Supply Chain Planning Solutions. This Gartner research document synthesizes Gartner Peer Insights’ customer feedback on supply chain planning solutions for a specific 18-month period to offer peer perspective.

Key Fiscal 2023 Year to Date Financial Highlights:

  • Subscription fees were $50.4 million for the twelve months ended April 30, 2023, a 20% increase compared to $42.1 million for the same period last year.
  • Total revenues for the twelve months ended April 30, 2023 were $123.7 million compared to $127.6 million for the same period last year. Excluding our non-core IT Consulting business unit, total revenues from our Supply Chain Management segment increased 2% compared to the same period last year.
  • Recurring revenue streams for Maintenance and Cloud Services were $85.0 million and $78.7 million or 69% and 62% of total revenues for the twelve-month periods ended April 30, 2023 and 2022, respectively.
  • Maintenance revenues for the twelve months ended April 30, 2023 were $34.6 million, a 6% decrease compared to $36.6 million for the same period last year.
  • Professional services and other revenues for the twelve months ended April 30, 2023 decreased 17% to $35.9 million compared to $43.5 million for the same period last year.
  • Software license revenues were $2.8 million compared to $5.4 million for the same period last year.
  • For the twelve months ended April 30, 2023, the Company reported operating earnings of approximately $10.5 million compared to $13.2 million for the same period last year.
  • GAAP net earnings were approximately $10.4 million or $0.31 per fully diluted share for the twelve months ended April 30, 2023 compared to $12.8 million or $0.37 per fully diluted share for the same period last year.
  • Adjusted net earnings for the twelve months ended April 30, 2023, which exclude stock-based compensation expense and amortization of acquisition-related intangibles were $15.2 million or $0.45 per fully diluted share, compared to $16.0 million or $0.47 per fully diluted share for the same period last year.
  • EBITDA was $13.7 million for the twelve months ended April 30, 2023 compared to $17.3 million for the same period last year.
  • Adjusted EBITDA was $18.9 million for the twelve months ended April 30, 2023 compared to $21.3 million for the twelve months ended April 30, 2022. 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 $115.5 million. During the fourth quarter of fiscal year 2023, the Company paid shareholder dividends of approximately $3.7 million.

“We endured a number of macroeconomic headwinds throughout the past year and were pleased to deliver adjusted EBITDA above our original guidance entering FY ‘23,” said Allan Dow, CEO and President of American Software. “While we have seen signs that the economic challenges facing our customers are beginning to abate, our initial outlook for FY ’24 reflects some conservatism as we manage through the current uncertainty. However, we remain confident in the long-term growth prospects of our business given the secular tailwinds from digital supply chain transformation and our platform expansion.”

Fiscal Year 2024 Financial Outlook

  • Total revenues of $120.0 million to $126.0 million, including total recurring revenues of $88.0 million to $92.0 million.
  • Adjusted EBITDA of $19.0 million to $21.0 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. (NASDAQ: AMSWA). 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

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 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 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)
 
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,

 

2023

 

2022

 

Pct Chg.

 

2023

 

2022

Pct Chg.
Revenues:
Subscription fees

$

13,021

$

11,061

 

18

%

$

50,412

$

42,066

20

%

License fees

 

727

 

3,101

 

(77

%)

 

2,752

 

5,390

(49

%)

Professional services & other

 

7,993

 

11,725

 

(32

%)

 

35,938

 

43,476

(17

%)

Maintenance

 

8,173

 

8,762

 

(7

%)

 

34,557

 

36,621

(6

%)

Total Revenues

 

29,914

 

34,649

 

(14

%)

 

123,659

 

127,553

(3

%)

 
Cost of Revenues:
Subscription services

 

4,149

 

3,324

 

25

%

 

15,831

 

13,383

18

%

License fees

 

164

 

507

 

(68

%)

 

705

 

1,104

(36

%)

Professional services & other

 

5,969

 

7,807

 

(24

%)

 

26,423

 

30,306

(13

%)

Maintenance

 

1,652

 

1,456

 

13

%

 

6,409

 

6,965

(8

%)

Total Cost of Revenues

 

11,934

 

13,094

 

(9

%)

 

49,368

 

51,758

(5

%)

Gross Margin

 

17,980

 

21,555

 

(17

%)

 

74,291

 

75,795

(2

%)

Operating expenses:
Research and development

 

4,547

 

4,296

 

6

%

 

17,767

 

17,600

1

%

Sales and marketing

 

5,250

 

5,633

 

(7

%)

 

22,184

 

22,867

(3

%)

General and administrative

 

5,888

 

6,116

 

(4

%)

 

23,684

 

21,960

8

%

Amortization of acquisition-related intangibles

 

25

 

53

 

(53

%)

 

106

 

212

(50

%)

 
Total Operating Expenses

 

15,710

 

16,098

 

(2

%)

 

63,741

 

62,639

2

%

Operating Earnings

 

2,270

 

5,457

 

(58

%)

 

10,550

 

13,156

(20

%)

Interest Income & Other, Net

 

1,028

 

(778

)

nm

 

2,336

 

681

243

%

Earnings Before Income Taxes

 

3,298

 

4,679

 

(30

%)

 

12,886

 

13,837

(7

%)

Income Tax Expense

 

431

 

1,098

 

(61

%)

 

2,465

 

1,055

134

%

Net Earnings

$

2,867

$

3,581

 

(20

%)

$

10,421

$

12,782

(18

%)

Earnings per common share: (1)
Basic

$

0.08

$

0.11

 

(27

%)

$

0.31

$

0.38

(18

%)

Diluted

$

0.08

$

0.10

 

(20

%)

$

0.31

$

0.37

(16

%)

 
Weighted average number of common shares outstanding:
Basic

 

33,916

 

33,587

 

 

33,761

 

33,365

Diluted

 

33,993

 

34,266

 

 

33,992

 

34,305

 
nm- not meaningful
AMERICAN SOFTWARE, INC.
NON-GAAP MEASURES OF PERFORMANCE
(In thousands, except per share data, unaudited)
 
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,

 

2023

 

 

2022

 

Pct Chg.

 

2023

 

 

2022

 

Pct Chg.
NON-GAAP Operating Earnings:
Operating Earnings (GAAP Basis)

$

2,270

 

$

5,457

 

(58

%)

$

10,550

 

$

13,156

 

(20

%)

Amortization of acquisition-related intangibles

 

233

 

 

53

 

340

%

 

834

 

 

212

 

293

%

Stock-based compensation

 

1,240

 

 

1,045

 

19

%

 

5,184

 

 

3,955

 

31

%

NON-GAAP Operating Earnings:

 

3,743

 

 

6,555

 

(43

%)

 

16,568

 

 

17,323

 

(4

%)

 
Non-GAAP Operating Earnings, as a % of revenue

 

13

%

 

19

%

 

13

%

 

14

%

 
 
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,

 

2023

 

 

2022

 

Pct Chg.

 

2023

 

 

2022

 

Pct Chg.
NON-GAAP EBITDA:
Net Earnings (GAAP Basis)

$

2,867

 

$

3,581

 

(20

%)

$

10,421

 

$

12,782

 

(18

%)

Income Tax Expense

 

431

 

 

1,098

 

(61

%)

 

2,465

 

 

1,055

 

134

%

Interest Income & Other, Net

 

(1,028

)

 

778

 

nm

 

(2,336

)

 

(681

)

243

%

Amortization of intangibles

 

447

 

 

768

 

(42

%)

 

2,030

 

 

3,394

 

(40

%)

Depreciation

 

324

 

 

201

 

61

%

 

1,129

 

 

745

 

52

%

EBITDA (earnings before interest, taxes, depreciation and amortization)

 

3,041

 

 

6,426

 

(53

%)

 

13,709

 

 

17,295

 

(21

%)

 
Stock-based compensation

 

1,240

 

 

1,045

 

19

%

 

5,184

 

 

3,955

 

31

%

Adjusted EBITDA

$

4,281

 

$

7,471

 

(43

%)

$

18,893

 

$

21,250

 

(11

%)

 
EBITDA, as a percentage of revenues

 

10

%

 

19

%

 

11

%

 

14

%

 
Adjusted EBITDA, as a percentage of revenues

 

14

%

 

22

%

 

15

%

 

17

%

 
 
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,

 

2023

 

 

2022

 

Pct Chg.

 

2023

 

 

2022

 

Pct Chg.
NON-GAAP EARNINGS PER SHARE:
Net Earnings (GAAP Basis)

$

2,867

 

$

3,581

 

(20

%)

$

10,421

 

$

12,782

 

(18

%)

Amortization of acquisition-related intangibles (2)

 

199

 

 

39

 

410

%

 

667

 

 

164

 

307

%

Stock-based compensation (2)

 

1,057

 

 

765

 

38

%

 

4,141

 

 

3,053

 

36

%

Adjusted Net Earnings

$

4,123

 

$

4,385

 

(6

%)

$

15,229

 

$

15,999

 

(5

%)

 
Adjusted non-GAAP diluted earnings per share

$

0.12

 

$

0.13

 

(8

%)

$

0.45

 

$

0.47

 

(4

%)

 
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,

 

2023

 

 

2022

 

Pct Chg.

 

2023

 

 

2022

 

Pct Chg.
NON-GAAP Earnings Per Share
Net Earnings (GAAP Basis)

$

0.08

 

$

0.10

 

(20

%)

$

0.31

 

$

0.37

 

(16

%)

Amortization of acquisition-related intangibles (2)

 

0.01

 

 

-

 

-

 

$

0.02

 

 

0.01

 

100

%

Stock-based compensation (2)

$

0.03

 

 

0.03

 

0

%

$

0.12

 

 

0.09

 

33

%

Adjusted Net Earnings

$

0.12

 

$

0.13

 

(8

%)

$

0.45

 

$

0.47

 

(4

%)

 
 
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,

 

2023

 

 

2022

 

Pct Chg.

 

2023

 

 

2022

 

Pct Chg.
Amortization of acquisition-related intangibles
Cost of Subscription Services

$

208

 

$

-

 

-

 

$

729

 

$

-

 

-

 

Operating expenses

 

25

 

 

53

 

(53

%)

 

106

 

 

212

 

(50

%)

Total amortization of acquisition-related intangibles

$

233

 

$

53

 

340

%

$

835

 

$

212

 

294

%

 
Stock-based compensation
Cost of revenues

$

66

 

$

58

 

14

%

$

244

 

$

246

 

(1

%)

Research and development

 

139

 

 

107

 

30

%

 

576

 

 

380

 

52

%

Sales and marketing

 

143

 

 

145

 

(1

%)

 

711

 

 

607

 

17

%

General and administrative

 

892

 

 

735

 

21

%

 

3,653

 

 

2,722

 

34

%

Total stock-based compensation

$

1,240

 

$

1,045

 

19

%

$

5,184

 

$

3,955

 

31

%

 
 
(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 $0.08 and $0.31 for the three and twelve months ended April 30, 2023, respectively. Diluted per share for Class B shares under the two-class method are $0.11 and $0.38 for the three and twelve months ended April 30, 2022, 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 twelve month periods ended April 30, 2023 of 14.8% and 20.1% and 26.8% and 22.8% for the three and twelve month periods ended April 30, 2022, respectively.
 
nm- not meaningful
AMERICAN SOFTWARE, INC.
Consolidated Balance Sheet Information
(In thousands)
(Unaudited)
April 30, April 30,

 

2023

 

 

2022

 

 
Cash and Cash Equivalents

$

91,600

 

$

110,690

 

Short-term Investments

 

23,451

 

 

16,826

 

Accounts Receivable:
Billed

 

25,405

 

 

20,619

 

Unbilled

 

2,604

 

 

2,989

 

Total Accounts Receivable, net

 

28,009

 

 

23,608

 

Prepaids & Other

 

7,081

 

 

5,067

 

Current Assets

 

150,141

 

 

156,191

 

 
Investments - Non-current

 

486

 

 

-

 

 
PP&E, net

 

6,444

 

 

3,654

 

Capitalized Software, net

 

391

 

 

1,586

 

Goodwill

 

29,558

 

 

25,888

 

Other Intangibles, net

 

2,143

 

 

147

 

Deferred Sales Commissions - Non-current

 

1,659

 

 

2,050

 

Lease Right of Use Assets

 

442

 

 

935

 

Other Non-current Assets

 

4,685

 

 

2,384

 

Total Assets

$

195,949

 

$

192,835

 

 
Accounts Payable

$

2,427

 

$

2,506

 

Accrued Compensation and Related costs

 

4,281

 

 

6,918

 

Dividend Payable

 

3,756

 

 

3,700

 

Operating Lease Obligation - Current

 

411

 

 

541

 

Other Current Liabilities

 

2,328

 

 

1,871

 

Deferred Revenues - Current

 

43,124

 

 

41,953

 

Current Liabilities

 

56,327

 

 

57,489

 

 
Operating Lease Obligation - Non-current

 

65

 

 

461

 

Deferred Tax Liability - Non-current

 

-

 

 

1,772

 

Other Long-term Liabilities

 

223

 

 

137

 

Long-term Liabilities

 

288

 

 

2,370

 

 
Total Liabilities

 

56,615

 

 

59,859

 

 
Shareholders' Equity

 

139,334

 

 

132,976

 

 
Total Liabilities & Shareholders' Equity

$

195,949

 

$

192,835

 

 
 
AMERICAN SOFTWARE, INC.
Condensed Consolidated Cashflow Information
(In thousands)
(Unaudited)
 
Twelve Months Ended
April 30,

 

2023

 

 

2022

 

 
Net cash provided by operating activities

$

524

 

$

29,020

 

 
Purchases of property and equipment, net of disposals

 

(3,922

)

 

(934

)

Purchase of business, net of cash acquired

 

(6,500

)

 

-

 

 
Net cash used in investing activities

 

(10,422

)

 

(934

)

 
Dividends paid

 

(14,833

)

 

(14,632

)

Proceeds from exercise of stock options

 

5,641

 

 

8,578

 

 
Net cash used in financing activities

 

(9,192

)

 

(6,054

)

 
Net change in cash and cash equivalents

 

(19,090

)

 

22,032

 

Cash and cash equivalents at beginning of period

 

110,690

 

 

88,658

 

 
Cash and cash equivalents at end of period

$

91,600

 

$

110,690

 

 

 

Contacts

Vincent C. Klinges

Chief Financial Officer

American Software, Inc.

(404) 264-5477

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