American Software Reports Fourth Quarter
and Fiscal Year 2023 Results

 

Correcting and Replacing: Changes to the Consolidated Balance Sheet and Statements of Cash Flows to align with Form 10-K following reclassifications of certain line items.

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

 

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:

•	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 $114.1 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 Fourth Quarter and Fiscal Year 2023 Results

 

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	%