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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:
Key fiscal year 2019 financial highlights:
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
Company and Technology
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 Solutions™and 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. Klinges
Chief Financial Officer
American Software,
Inc.
(404) 264-5477
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