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American Software Reports Preliminary Fourth Quarter and Fiscal Year 2012 Results

16:05 EDT Thursday, June 21, 2012

ATLANTA (Business Wire) -- American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the fourth quarter and fiscal 2012, delivering a 45% increase in license fee revenues, a 20% increase in total revenues and a 76% increase in GAAP operating earnings in fiscal year 2012 when compared to last year. For the fourth quarter, total revenues increased 11% and GAAP operating earnings increased 26% when compared to the same period last year. The Company has achieved 45 consecutive quarters of profitability and has distributed dividends to shareholders 35 consecutive quarters.

Key fourth quarter financial highlights:

  • Total revenues for the quarter ended April 30, 2012 were $27.9 million, an increase of 11% over the comparable period last year.
  • Software license fee revenues for the quarter ended April 30, 2012 were $7.3 million, a decrease of 9% over the same period last year.
  • Services and other revenues for the quarter ended April 30, 2012 were $12.3 million compared to $9.6 million for the same period last year, an increase of 29%.
  • Maintenance revenues for the quarter ended April 30, 2012 were $8.4 million compared to $7.6 million, an increase of 9% over the same period last year.
  • Operating earnings for the quarter ended April 30, 2012 were $4.6 million, an increase of 26% compared to the same period last year.
  • GAAP net earnings for the quarter ended April 30, 2012 were $3.5 million or $0.13 per fully diluted share, an increase of 26% over the fourth quarter of fiscal 2011.
  • Adjusted net earnings for the quarter ended April 30, 2012, which excludes stock-based compensation expense and amortization of acquisition-related intangibles, were $3.8 million or $0.14 per fully diluted share, an increase of 27% compared to $3.0 million or $0.11 per fully diluted share for the same period last year, which also excluded stock-based compensation expense and amortization of acquisition-related intangibles.
  • Adjusted EBITDA increased 20% to $6.0 million in the quarter ended April 30, 2012, from $5.0 million in the quarter ended April 30, 2011. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income, income tax expense, stock-based compensation, and other significant non-routine operating and non-operating income and expense items, if applicable.

Key fiscal 2012 year financial highlights:

  • Total revenues for the twelve months ended April 30, 2012 were $102.6 million, a 20% increase over the comparable period last year.
  • Software license fees for the twelve-month period were $27.8 million, a 45% increase compared to the same period last year.
  • Services and other revenues were $42.4 million, a 15% increase compared to the same period last year.
  • Maintenance revenues were $32.4 million, a 10% increase over the comparable period last year.
  • For the twelve months ended April 30, 2012, the Company reported operating earnings of approximately $16.2 million, a 76% increase over the same period last year.
  • GAAP net earnings were approximately $11.3 million or $0.42 per fully diluted share for the twelve months ended April 30, 2012, a 54% increase compared to $7.4 million or $0.28 per fully diluted share for the same period last year.
  • Adjusted net earnings for the twelve months ended April 30, 2012, which excludes stock-based compensation expenses and amortization of acquisition-related intangibles, were $12.5 million or $0.46 per fully diluted share, a 46% increase compared to $8.6 million or $0.33 per fully diluted share for the same period last year, which excluded stock-based compensation expenses, amortization of acquisition-related intangibles and severance expenses.
  • Adjusted EBITDA increased 52% to $21.8 million for the twelve months ended April 30, 2012, from $14.3 million for the twelve months ended April 30, 2011. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income, income tax expense, stock-based compensation, and other significant non-routine operating and non-operating income and expense items, if applicable.

The Company is including 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 non-GAAP net earnings and non-GAAP per share measures used by other companies. The Company believes that this presentation of 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.

The overall financial condition of the Company remains strong, with no debt and with cash and investments of approximately $66.9 million as of April 30, 2012. During the fourth quarter, the Company increased cash and investments by approximately $5.3 million from the preceding quarter and by approximately $11.5 million when compared to April 30, 2011 while the Company paid approximately $9.6 million in shareholder dividends during the fiscal year 2012.

“We are pleased with our operating results in fiscal year 2012. The Company achieved double-digit growth in all three revenue streams. We leveraged our 45% growth in license fee revenues to deliver an impressive 76% growth in operating earnings while continuing to aggressively invest in our business,” stated James C. Edenfield, president and CEO of American Software. “Logility, our wholly-owned subsidiary, increased international revenues to 21% of total revenues for fiscal year 2012. We continue to be well positioned to serve the market with a global network of more than 50 distribution partners along with our direct sales and support team. Today, more than 1,250 companies in over 75 countries leverage Logility's market leading supply chain solutions to lower costs and boost customer service.”

“For fiscal year 2012, we welcomed 86 new customers, signed license agreements with customers in 22 countries and continued our aggressive investment in research and development,” continued Edenfield. “With 45 consecutive quarters of profitability combined with consistent growth in our global customer base, American Software is well positioned with a robust portfolio of innovative enterprise application solutions and deep supply chain management expertise.”

“Our sustained profitability has allowed the Company to provide a tangible benefit to our shareholders with a quarterly dividend for more than eight years,” said Edenfield. “On May 16, 2012 our Board of Directors authorized the Company's next quarterly dividend of $0.09 per common share, which is payable on September 7, 2012 to shareholders of record at the close of business on August 17, 2012.”

Additional highlights for the fourth quarter of fiscal 2012 include:

Customers

  • Notable new and existing customers placing orders with the Company in the fourth quarter include: Alberto Makali, Art Van Furniture, Brightstar, Brownells, Coating Excellence International, Denso, Ferguson Enterprises, GWA Bathrooms & Kitchens, iHealth, Marquez Brothers International, and Twin Disc.
  • During the quarter, software license agreements were signed with customers located in the following 11 countries: Australia, Belgium, Canada, Germany, Mexico, Netherlands, Singapore, Sweden, South Africa, the United Kingdom, and the United States.
  • Logility, a wholly-owned subsidiary of the Company, and American Italian Pasta Company jointly presented at the 2012 Spring SCOPE Conference in Chicago. The two companies explored how the largest pasta producer in North America approached and implemented its successful Sales and Operations Planning (S&OP) process through the use of Logility Voyager Solutions™ and the results the leading pasta company achieved including better forecast accuracy, lower inventory investments, and better customer service.
  • The editors of Supply & Demand Chain Executive named Logility customers Lee Dame, vice president, global supply chain, CooperVision, and Michael Martin, manager, global supply chain strategy, Stanley Black & Decker, 2012 Supply Chain Practitioner Pros to Know. Dame and Martin, two of the 35 individuals honored in the magazine's 12th annual listing, were recognized for leading initiatives that helped prepare their businesses' for the supply chain opportunities and challenges ahead.
  • Manufacturing Executive magazine named American Italian Pasta Company, CooperVision and Stanley Black & Decker as recipients of the 2012 Manufacturing Leadership 100 award. The recognition highlights each company's successful programs to revamp and optimize their supply chains through the use of Logility Voyager Solutions™.
  • New Generation Computing® (NGC®), a wholly-owned subsidiary of the Company, announced GTM Sportswear, a manufacturer of embellished team sportswear, selected its PLM and supply chain management solutions to improve forecast accuracy, and inventory and raw materials management.

Company & Technology

  • Logility was recognized as one of Atlanta's Top Workplaces by the Atlanta Journal-Constitution. The nomination and voting process was employee led and is the second consecutive year Logility employees have voted the company a Top Workplace.
  • AberdeenGroup, a leading industry research firm, published its findings on the benefits of utilizing multi-echelon inventory optimization (MEIO) software. The report, sponsored by Logility, also included two case studies of companies using Logility Voyager Inventory Optimization to improve service levels and right-size inventory investments to meet both strategic and operational goals for their respective global operations.
  • Supply & Demand Chain Executive honored Mike Edenfield, president and CEO, Logility as 2012 Supply & Demand Chain Executive Pros to Know. The award recognizes supply chain leaders who have made a significant impact on the industry and helped prepare businesses for the supply chain opportunities and challenges ahead.
  • Demand Management, a wholly-owned subsidiary of Logility, sponsored and participated in the Microsoft Dynamics Industry Summit held in February 2012. As Microsoft evolves its Dynamics business to serve the specific business needs of vertical markets, Demand Solutions® has been selected as a key member of the distribution and manufacturing sectors.
  • Demand Management participated in Convergence 2012, the global, annual customer event for Microsoft Dynamics (AX, GP, NAV, SL and CRM). During the April 2012 conference and exposition, Demand Management executives met with senior managers of the Microsoft Dynamics team to further our joint sales efforts for the Demand Solutions brand of market leading supply chain solutions. Demand Management was also featured as the ISV Spotlight company in the AX User Group (AXUG) Magazine distributed at the Convergence Conference.
  • Supply & Demand Chain Executive honored Bill Harrison, president, Demand Management as 2012 Supply & Demand Chain Executive Pros to Know. The award recognizes supply chain leaders who have made a significant impact on the industry and helped prepare businesses for the supply chain opportunities and challenges ahead.

About American Software, Inc.

Atlanta-based American Software (NASDAQ: AMSWA) provides demand-driven supply chain management and enterprise software solutions, backed by more than 40 years of industry experience, that drive value for companies regardless of market conditions. Logility, Inc., a wholly-owned subsidiary of American Software, is a leading provider of collaborative solutions to optimize the supply chain. Logility Voyager Solutions™ is a complete supply chain management solution suite that features a performance monitoring architecture and provides supply chain visibility; demand, inventory and replenishment planning; sales and operations planning (S&OP); supply and inventory optimization; manufacturing planning and scheduling; transportation planning and management; and warehouse management. Logility customers include Fender Musical Instruments, Hewlett-Packard, McCain Foods, Parker Hannifin, Sigma-Aldrich, Verizon Wireless, and VF Corporation. Demand Management, Inc., a wholly-owned subsidiary of Logility, delivers supply chain solutions to small and midsized manufacturers, distributors and retailers. Demand Management's Demand Solutions® suite is widely deployed and globally recognized for forecasting, demand planning and point-of-sale analysis. Demand Management serves customers such as Avery Dennison Corporation, Lonely Planet and Trek Bicycle. New Generation Computing® (NGC®), a wholly-owned subsidiary of American Software, is a leading provider of PLM, supply chain management, ERP and product testing software and services for brand owners, retailers and consumer products companies. NGC customers include A|X Armani Exchange, Aeropostale, Billabong, Carter's, Casual Male, Hugo Boss, Jos. A. Bank, Lakeshore Learning, Lululemon Athletica, Marchon Eyewear, and Swatfame. For more information about American Software, please visit www.amsoftware.com, call (800) 726-2946 or email: ask@amsoftware.com.

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, continuing U.S. and global economic uncertainty, the timing and degree of business recovery, unpredictability and the irregular pattern of future revenues, dependence on particular market segments or customers, competitive pressures, delays, product liability and warranty claims and other risks associated with new product development, undetected software errors, market acceptance of the Company's products, technological complexity, the challenges and risks associated with integration of acquired product lines, companies and services, 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 Form 10-K for the fiscal year ended April 30, 2011 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 or fax: (404) 237-8868.

Logility is a registered trademark and Logility Voyager Solutions is a trademark of Logility, Inc., Demand Solutions is a registered trademark of Demand Management, Inc., and NGC and New Generation Computing, Inc. are registered trademarks of New Generation Computing. 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,  
2012 2011

Pct Chg.

2012 2011 Pct Chg.  
Revenues:
License $ 7,287 $ 7,983 (9 %) $ 27,826 $ 19,240 45 %
Services & other 12,289 9,551 29 % 42,380 36,960 15 %
Maintenance   8,356     7,640   9 %   32,430     29,389   10 %
Total Revenues   27,932     25,174   11 %   102,636     85,589   20 %
 
Cost of Revenues:
License 1,673 2,076 (19 %) 7,142 5,828 23 %
Services & other 8,719 7,375 18 % 31,101 27,205 14 %
Maintenance   2,073     1,860   11 %   7,597     7,152   6 %
Total Cost of Revenues   12,465     11,311   10 %   45,840     40,185   14 %
Gross Margin   15,467     13,863   12 %   56,796     45,404   25 %
Operating expenses:
Research and development 3,024 2,561 18 % 10,957 9,953 10 %
Less: capitalized development (777 ) (780 ) 0 % (2,731 ) (2,565 ) 6 %
Sales and marketing 5,160 4,939 4 % 18,797 15,720 20 %
General and administrative 3,344 3,263 2 % 12,832 12,028 7 %
Provision for doubtful accounts 21 130 (84 %) 238 172 38 %
Amortization of acquisition-related intangibles 131 134 (2 %) 535 684 (22 %)
Severance expenses - - - - 219

nm

             
Total Operating Expenses   10,903     10,247   6 %   40,628     36,211   12 %
Operating Earnings   4,564     3,616   26 %   16,168     9,193   76 %
Interest Income & Other, Net   529     597   (11 %)   1,103     1,941   (43 %)
Earnings Before Income Taxes 5,093 4,213 21 % 17,271 11,134 55 %
Income Tax Expense   1,612     1,460   10 %   5,928     3,770   57 %
Net Earnings $ 3,481   $ 2,753   26 % $ 11,343   $ 7,364   54 %
Earnings per common share: (1)
Basic $ 0.13   $ 0.11   18 % $ 0.43   $ 0.29   48 %
Diluted $ 0.13   $ 0.10   30 % $ 0.42   $ 0.28   50 %
 
Weighted average number of common shares outstanding:
Basic 26,905 25,958 26,455 25,751
Diluted 27,504 26,515 27,098 26,183
 
 
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,
2012 2011

Pct Chg.

2012 2011 Pct Chg.  
NON-GAAP EARNINGS PER SHARE:
Net Earnings (GAAP Basis) $ 3,481 $ 2,753 26 % $ 11,343 $ 7,364 54 %
Income tax expense 1,612 1,460 10 % 5,928 3,770 57 %
Interest Income & Other, Net (529 ) (597 ) (11 %) (1,103 ) (1,941 ) (43 %)
Amortization of intangibles 775 791 (2 %) 3,119 2,689 16 %
Depreciation   279     306   (9 %)   1,183     1,233   (4 %)
EBITDA (earnings before interest, taxes, depreciation and amortization)   5,618     4,713   19 %   20,470     13,115   56 %
Severance expenses - - - - 219 nm
Stock-based compensation   355     256   39 %   1,287     985   31 %
Adjusted EBITDA $ 5,973   $ 4,969   20 % $ 21,757   $ 14,319   52 %
       
EBITDA , as a percentage of revenue   20 %   19 %   20 %   15 %
       
Adjusted EBITDA , as a percentage of revenue   21 %   20 %   21 %   17 %
 
 
Fourth Quarter Ended Twelve Months Ended  
April 30, April 30,
2012 2011 Pct Chg. 2012 2011 Pct Chg.  
NON-GAAP EARNINGS PER SHARE:
Net Earnings (GAAP Basis) $ 3,481 $ 2,753 26 % $ 11,343 $ 7,364 54 %
Amortization of acquisition-related intangibles (2) 90 88 2 % 351 452 (22 %)
Stock-based compensation (2) 241 165 46 % 845 637 33 %
Severance expenses (2)   -     -   -     -     134   nm
Adjusted Net Earnings $ 3,812   $ 3,006   27 % $ 12,539   $ 8,587   46 %
 
Adjusted non-GAAP diluted earnings per share $ 0.14   $ 0.11   27 % $ 0.46   $ 0.33   39 %
 
(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 $0.13 and $0.43 for the three and twelve months ended April 30, 2012, respectively. Diluted per share for Class B shares under the two-class method are $0.11 and $0.29 for the three and twelve months ended April 30, 2011, respectively.
 
(2) - Tax affected using the effective tax rate for the three and twelve months period ended April 30, 2012 and 2011.
 
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American SOFTWARE, INC.
Consolidated Balance Sheet Information
(In thousands)
(Unaudited)
 
April 30, April 30,
2012 2011
 
Cash and Short-term Investments $ 59,362 $ 44,567
Accounts Receivable:
Billed 15,205 14,409
Unbilled   4,607     4,151  
Total Accounts Receivable, net 19,812 18,560
Prepaids & Other 3,184 2,918
Deferred Tax Asset   34     77  
Current Assets 82,392 66,122
 
Investments - Non-current 7,508 10,844
 
PP&E, net 4,912 5,723
Capitalized Software, net 7,791 7,562
Goodwill 12,601 12,601
Other Intangibles, net 1,263 1,880
Other Non-current Assets   86     100  
Total Assets $ 116,553   $ 104,832  
 
Accounts Payable $ 1,042 $ 1,011
Accrued Compensation and Related costs 5,169 4,245
Dividend Payable 2,433 2,345
Other Current Liabilities 4,198 4,493
Deferred Revenues   19,441     17,307  
Current Liabilities 32,283 29,401
 
Deferred Tax Liability - Long term 1,240 1,375
 
Shareholders' Equity 83,030 74,056
   
Total Liabilities & Shareholders' Equity $ 116,553   $ 104,832  

American Software, Inc.
Vincent C. Klinges, 404-264-5477
Chief Financial Officer




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