Business Wire | Jun 8, 2021 04:05PM EDT

American Software Reports Fourth Quarter and Fiscal Year 2021 Results

Jun. 08, 2021

ATLANTA--(BUSINESS WIRE)--Jun. 08, 2021--American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the fourth quarter and fiscal year 2021.

Key Fourth Quarter Financial Highlights:

* Subscription fees were $8.1 million for the quarter ended April 30, 2021, a 28% increase compared to $6.3 million for the same period last year, and Software license revenues were $1.2 million, a 15% increase compared to $1.1 million for the same period last year. * Cloud Services Annual Contract Value (ACV) increased approximately 45% to $38.3 million for the quarter ended April 30, 2021 compared to $26.4 million during the same period of the prior year. * Total revenues for the quarter ended April 30, 2021 decreased 2% to $28.6 million, compared to $29.3 million for the same period of the prior year. * Recurring revenue streams for Maintenance and Cloud Subscriptions were 60% of total revenues in the quarter ended April 30, 2021 compared to 57% in the same period of the prior year. * Maintenance revenues for the quarter ended April 30, 2021 decreased 12% to $9.2 million compared to $10.4 million for the same period last year. * Professional services and other revenues for the quarter ended April 30, 2021 decreased 13% to $10.1 million compared to $11.5 million for the same period last year. * Operating earnings for the quarter ended April 30, 2021 increased 20% to $1.9 million compared to $1.6 million for the same period last year. * GAAP net earnings for the quarter ended April 30, 2021 increased 460% to $3.1 million or $0.09 per fully diluted share compared to $0.5 million or $0.02 per fully diluted share for the same period last year. * Adjusted net earnings for the quarter ended April 30, 2021, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, increased 185% to $3.6 million or $0.11 per fully diluted share compared to $1.3 million or $0.04 per fully diluted share for the same period last year. * EBITDA decreased by 9% to $3.1 million for the quarter ended April 30, 2021 compared to $3.4 million for the same period last year. * Adjusted EBITDA decreased by 4% to $3.7 million for the quarter ended April 30, 2021 compared to $3.9 million for the same period last year. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income (expense) & other, net, income tax expense (benefit) and non-cash stock-based compensation expense.

Key Fiscal Year 2021 Financial Highlights:

* Subscription fees were $28.9 million for the twelve months ended April 30, 2021, a 31% increase compared to $22.0 million for the same period last year, while Software license revenues were $3.0 million, a 61% decrease compared to $7.6 million for the same period last year, reflecting our continued transition to the SaaS engagement model. * Total revenues for the twelve months ended April 30,2021 decreased 4% to $111.4 million compared to $115.5 million for the same period last year. * Recurring revenue streams for Maintenance and Cloud Services were 62% of total revenues for the twelve-month period ended April 30, 2021 compared to 56% in the same period of the prior year. * Maintenance revenues for the twelve months ended April 30, 2021 were $39.9 million, a 7% decrease compared to $43.1 million for the same period last year. * Professional services and other revenues for the twelve months ended April 30, 2021 decreased 7% to $39.6 million compared to $42.8 million for the same period last year. * For the twelve months ended April 30, 2021, the Company reported operating earnings of approximately $4.4 million compared to $6.0 million for the same period last year, a 28% decrease. * GAAP net earnings were approximately $8.1 million or $0.24 per fully diluted share for the twelve months ended April 30, 2021, a 20% increase compared to $6.7 million or $0.21 per fully diluted share for the same period last year. * Adjusted net earnings for the twelve months ended April 30, 2021, which excludes stock-based compensation expense and amortization of acquisition-related intangibles, increased 9% to $10.8 million or $0.33 per fully diluted share, compared to $9.9 million or $0.31 per fully diluted share for the same period last year. * EBITDA decreased by 30% to $10.0 million for the twelve months ended April 30, 2021 compared to $14.1 million for the same period last year. * Adjusted EBITDA decreased 23% to $12.5 million for the twelve months ended April 30, 2021 compared to $16.2 million for the twelve months ended April 30, 2020. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income (expense) & other, net, income tax expense (benefit) and non-cash stock-based compensation.

The overall financial condition of the Company remains strong, with cash and investments of approximately $104.7 million, an increase of approximately $10.0 million when compared to April 30, 2020, and no debt as of April 30, 2021. During the fourth quarter of fiscal year 2021, the Company paid shareholder dividends of approximately $3.6 million.

"We are pleased with our fourth quarter and overall fiscal year 2021 performance. In the midst of the economic uncertainty resulting from the pandemic, we exited the year on a strong note with both net new Cloud Services ACV and total bookings more than doubling our prior highs for a quarter," said Allan Dow, CEO and president of American Software. "Our performance reflects increasing adoption of cloud-based supply chain transformation solutions and our backlog as measured by our Remaining Performance Obligations (RPO) increased 51% to $116 million in the fourth quarter when compared to last year, which demonstrates the longer-term commitment of our customers to our platform and services. Our pipeline remains robust as we enter our fiscal year 2022 as the current spotlight on supply chain disruption continues to fuel interest in supply chain transformation initiatives."

"This past year also heightened the importance of a resilient, agile enterprise that champions corporate social responsibility and sustainability," continued Dow. "Our commitment to enabling our customers to create sustainable supply chains that improve lives and the world we live in is at the core of our brand promise. During the last year, our customers entrusted us to provide innovation and services as they faced significant challenges because of the pandemic. We delivered solutions at a record pace, and innovation that has been recognized as industry leading."

Key fourth quarter and fiscal year 2021 highlights:

Customers & Channels

* Notable new and existing customers placing orders with the Company in the fourth quarter include: Ashley Furniture Industries, LLC, Black Rifle Coffee Company LLC, Emerson Professional Tools, LLC, Global Resources International, Inc., GOJO Industries, Inc., Hasbro, Inc., Hostess Brands, LLC, Hybrid Promotions LLC, Insmed Incorporated, Kyjen Company, LLC (DBA Outward Hound), La La Land Creative Company LLC, Lacoste Operations, Next Level Apparel, OFS Fitel, LLC, Peet's Coffee, Inc., Petrobras Distribuidor S.A, Premier Farnell UK Limited, Reynolds Consumer Products Company, Rhone Apparel, Inc., Rituals Cosmetics Enterprise B.V., SPARC Group LLC, Under Armour, Inc. and Vitalus Nutrition, Inc. * During the quarter, SaaS subscription and/or software license agreements were signed with customers located in the following 9 countries/territories: Brazil, Canada, France, Mexico, Netherlands, Puerto Rico, Sweden, United Kingdom, and United States. * Logility, Inc., and Demand Management, Inc., each a subsidiary of the Company, congratulated Clark Mitchell, vice president of demand planning at Kontoor Brands, Inc., Joanna George, director of demand planning, Siemens Healthineers, and the TenCate Geosynthetics Americas team on the selection to the 2021 Supply & Demand Chain Executive Pros to Know.

Company and Technology

* Logility and Demand Management announced Allan Dow, Anna Palmer, Fred Isenberg, Mark Burstein, Roger Mayerson, and Bill Harrison were named as 2021 Pros to Know by industry publication Supply & Demand Chain Executive. Each is recognized for their commitment to helping shape the digital future of supply chain. * Logility announced its positioning as a Leader in the 2021 Gartner Magic Quadrant for Supply Chain Planning Solutions, demonstrating that leading companies around the world entrust the Logility(r) Digital Supply Chain Platform to deliver better business outcomes through a digital, sustainable supply chain that powers their resilient enterprises. * In the quarter, Logility invited attendees to part two of the webcast series, Deliver Better Business Outcomes - Managing Supply Variability, featuring Lora Cecere, founder, Supply Chain Insights. This event explored how to build a more resilient supply chain to quickly respond to shifts in today's dynamic market. * Logility and New Generation Computing, Inc. (NGC), a wholly owned subsidiary of American Software, announced the availability of a digital traceability solution which allows brand owners and retailers to document the chain of custody from component origin to importer of record. During the quarter, United States Customs and Border Protection announced a region-wide withhold release order on cotton products and tomato products produced in China's Xinjiang Uyghur Autonomous Region. This new solution ensures that companies can prove their imports are free from prohibited materials. * Logility announced the company won IDC's SaaS CSAT Award for Supply Chain Management Customer Satisfaction. Logility scored significantly higher than its peers' average in areas such as low total cost of ownership (TCO), user experience, high availability, industry specialization, out-of-the-box availability, and availability of training. The announcement highlights Logility's relentless passion to deliver the highest level of customer service and to ensure its customers around the world can rely on the supply chain innovations the company brings to the market.

About American Software, Inc.

Atlanta-based American Software, Inc. (NASDAQ: AMSWA), through its operating entities, delivers an innovative technical platform with AI-powered capabilities for supply chain management and advanced retail planning that is accelerating digital supply chain optimization from product concept to customer availability. Logility, Inc. is helping large enterprise 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 and Red Wing Shoe Company. Demand Management, Inc. delivers affordable, easy-to-use 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. New Generation Computing, Inc. powers the digital supply chain to enable apparel brand owners and retailers to maximize revenue and profit by accelerating lead times, streamlining product development, and optimizing sourcing and 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 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, retail merchandise and assortment planning and allocation, product lifecycle management (PLM), sourcing management, vendor quality and compliance, and product traceability. For more information about American Software, please visit www.amsoftware.com, call (404) 364-7615 or email kliu@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 existing customer contracts in the forward 12-month period. EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income (expense) & other, net, and income tax expense (benefit). Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income (expense) & other, net, income tax expense (benefit) 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.

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,

2021 2020 Pct 2021 2020 Pct Chg. Chg.

Revenues:

Subscription fees $ 8,062 $ 6,281 28 % $ 28,877 $ 22,033 31 %

License fees 1,226 1,063 15 % 2,993 7,582 (61 %)

Professional services 10,065 11,503 (13 %) 39,616 42,774 (7 %) & other

Maintenance 9,213 10,426 (12 %) 39,922 43,077 (7 %)

Total Revenues 28,566 29,273 (2 %) 111,408 115,466 (4 %)

Cost of Revenues:

Subscription services 3,117 2,780 12 % 11,884 9,491 25 %

License fees 405 829 (51 %) 1,921 4,798 (60 %)

Professional services 6,461 7,983 (19 %) 29,093 30,695 (5 %) & other

Maintenance 1,922 1,773 8 % 7,530 7,324 3 %

Total Cost of 11,905 13,365 (11 %) 50,428 52,308 (4 %) Revenues

Gross Margin 16,661 15,908 5 % 60,980 63,158 (3 %)

Operating expenses:

Research and 4,306 4,431 (3 %) 17,584 18,518 (5 %) development

Less: capitalized (16 ) (473 ) (97 %) (620 ) (3,170 ) (80 %) development

Sales and marketing 5,102 5,712 (11 %) 20,304 21,958 (8 %)

General and 5,306 4,532 17 % 19,139 19,422 (1 %) administrative

Provision for doubtful - 64 - - 97 - accounts

Amortization of acquisition-related 53 53 0 % 212 285 (26 %) intangibles

Total Operating 14,751 14,319 3 % 56,619 57,110 (1 %) Expenses

Operating Earnings 1,910 1,589 20 % 4,361 6,048 (28 %)

Interest Income(Expense) 1,765 (1,465 ) nm 4,487 750 498 %& Other, Net

Earnings Before Income 3,675 124 2864 % 8,848 6,798 30 %Taxes

Income Tax Expense/ 623 (421 ) nm 759 56 1255 %(Benefit)

Net Earnings $ 3,052 $ 545 460 % $ 8,089 $ 6,742 20 %

Earnings per commonshare: (1)

Basic $ 0.09 $ 0.02 350 % $ 0.25 $ 0.21 19 %

Diluted $ 0.09 $ 0.02 350 % $ 0.24 $ 0.21 14 %

Weighted average numberof common sharesoutstanding:

Basic 32,788 32,165 32,559 31,747

Diluted 33,685 32,688 33,169 32,367

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,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

NON-GAAP OperatingEarnings:

Operating Earnings $ 1,910 $ 1,589 20 % $ 4,361 $ 6,048 (28 %)(GAAP Basis)

Amortization of acquisition-related 53 311 (83 %) 772 1,600 (52 %) intangibles

Stock-based 645 517 25 % 2,546 2,027 26 % compensation

NON-GAAP Operating 2,608 2,417 8 % 7,679 9,675 (21 %)Earnings:

Non-GAAP OperatingEarnings, as a % of 9 % 8 % 7 % 8 %revenue

Fourth Quarter Ended Twelve Months Ended

April 30, April 30,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

NON-GAAP EBITDA:

Net Earnings (GAAP $ 3,052 $ 545 460 % $ 8,089 $ 6,742 20 %Basis)

Income Tax Expense/ 623 (421 ) nm 759 56 1255 % (Benefit)

Interest Income (Expense) & Other, (1,765 ) 1,465 nm (4,487 ) (750 ) 498 % Net

Amortization of 1,011 1,637 (38 %) 4,987 7,471 (33 %) intangibles

Depreciation 158 156 1 % 623 632 (1 %)

EBITDA (earningsbefore interest, 3,079 3,382 (9 %) 9,971 14,151 (30 %)taxes, depreciationand amortization)

Stock-based 645 517 25 % 2,546 2,027 26 % compensation

Adjusted EBITDA $ 3,724 $ 3,899 (4 %) $ 12,517 $ 16,178 (23 %)

EBITDA, as apercentage of 11 % 12 % 9 % 12 %revenues

Adjusted EBITDA, asa percentage of 13 % 13 % 11 % 14 %revenues

Fourth Quarter Ended Twelve Months Ended

April 30, April 30,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

NON-GAAP EARNINGSPER SHARE:

Net Earnings (GAAP $ 3,052 $ 545 460 % $ 8,089 $ 6,742 20 %Basis)

Amortization of acquisition-related 40 267 (85 %) 631 1,385 (54 %) intangibles (2)

Stock-based 490 443 11 % 2,079 1,752 19 % compensation (2)

Adjusted Net $ 3,582 $ 1,255 185 % $ 10,799 $ 9,879 9 %Earnings

Adjusted non-GAAPdiluted earnings per $ 0.11 $ 0.04 175 % $ 0.33 $ 0.31 6 %share

Fourth Quarter Ended Twelve Months Ended

April 30, April 30,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

NON-GAAP EarningsPer Share

Net Earnings (GAAP $ 0.09 $ 0.02 350 % $ 0.24 $ 0.21 14 %Basis)

Amortization of acquisition-related - 0.01 nm 0.02 0.05 (60 %) intangibles (2)

Stock-based 0.02 0.01 100 % 0.07 0.05 40 % compensation (2)

Adjusted Net 0.11 $ 0.04 175 % 0.33 $ 0.31 6 %Earnings

Fourth Quarter Ended Twelve Months Ended

April 30, April 30,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

Amortization ofacquisition-relatedintangibles

Cost of license $ - $ 258 (100 %) $ 560 $ 1,315 (57 %)

Operating expenses 53 53 0 % 212 285 (26 %)

Total amortizationof $ 53 $ 311 (83 %) $ 772 $ 1,600 (52 %)acquisition-relatedintangibles

Stock-basedcompensation

Cost of revenues $ 37 $ 43 (14 %) $ 140 $ 137 2 %

Research and 52 41 27 % 182 158 15 % development

Sales and marketing 46 51 (10 %) 303 311 (3 %)

General and 510 382 34 % 1,921 1,421 35 % administrative

Total stock-based $ 645 $ 517 25 % $ 2,546 $ 2,027 26 %compensation

(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 sharefor Class B shares under the two-class method are $0.09 and $0.25 for the threeand twelve months ended April 30, 2021, respectively. Diluted per share forClass B shares under the two-class method are $0.02 and $0.22 for the three andtwelve months ended April 30, 2020, respectively.

(2) - Tax affected using the effective tax rate excluding a discrete itemrelated to excess tax benefit for stock options for the three and twelve monthperiods ended April 30, 2021 of 24.0% and 18.3% and 14.3% and 13.5% for thethree and twelve month periods ended April 30, 2020, respectively.

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AMERICAN SOFTWARE, INC.Consolidated Balance Sheet Information

(In thousands)

(Unaudited)

April 30, April 30,

2021 2020



Cash and Cash Equivalents $ 88,658 $ 79,814

Short-term Investments 16,006 14,161

Accounts Receivable:

Billed 24,438 22,582

Unbilled 2,201 2,425

Total Accounts Receivable, net 26,639 25,007

Prepaids & Other 5,320 6,684

Current Assets 136,623 125,666



Investments - Non-current - 701



PP&E, net 3,428 3,373

Capitalized Software, net 4,767 8,362

Goodwill 25,888 25,888

Other Intangibles, net 360 1,132

Deferred Sales Commissions - Non-current 2,474 2,177

Lease Right of Use Assets 1,454 2,053

Other Non-current Assets 2,163 1,941

Total Assets $ 177,157 $ 171,293



Accounts Payable $ 1,732 $ 1,643

Accrued Compensation and Related costs 6,129 6,635

Dividend Payable 3,615 3,547

Operating Lease Obligation - Current 739 763

Other Current Liabilities 1,307 643

Deferred Revenues - Current 37,142 34,227

Current Liabilities 50,664 47,458



Operating Lease Obligation - Non-current 821 1,424

Deferred Tax Liability - Non-current 2,627 2,897

Other Long-term Liabilities 654 92

Long-term Liabilities 4,102 4,413



Total Liabilities 54,766 51,871



Shareholders' Equity 122,391 119,422



Total Liabilities & Shareholders' Equity $ 177,157 $ 171,293





AMERICAN SOFTWARE, INC.

Condensed Consolidated Cashflow Information

(In thousands)

(Unaudited)



Twelve Months Ended

April 30,

2021 2020



Net cash provided by operating activities $ 17,756 $ 25,982



Capitalized computer software development costs (620 ) (3,170 )

Purchases of property and equipment, net of (678 ) (420 ) disposals

Net cash used in investing activities (1,298 ) (3,590 )



Dividends paid (14,311 ) (13,938 )

Proceeds from exercise of stock options 6,697 10,072



Net cash used in financing activities (7,614 ) (3,866 )



Net change in cash and cash equivalents 8,844 18,526

Cash and cash equivalents at beginning of period 79,814 61,288



Cash and cash equivalents at end of period $ 88,658 $ 79,814

View source version on businesswire.com: https://www.businesswire.com/news/home/20210608006057/en/

CONTACT: Financial Information Press Contact: Vincent C. Klinges Chief Financial Officer American Software, Inc. (404) 264-5477