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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230608005695/en/
Vincent C. Klinges Chief Financial Officer American Software,
Inc. (404) 264-5477
American Software (NASDAQ:AMSWA)
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