Business Wire | Nov 18, 2021 04:05PM EST

American Software Reports Second Quarter of Fiscal Year 2022 Results

Nov. 18, 2021

ATLANTA--(BUSINESS WIRE)--Nov. 18, 2021--American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the second quarter of fiscal year 2022.

Key Second Quarter Financial Highlights:

* Subscription fees were $10.4 million for the quarter ended October 31, 2021, a 49% increase compared to $7.0 million for the same period last year and software license revenues were up slightly to $0.8 million compared to $0.5 million for the same period last year. * Cloud Services Annual Contract Value (ACV) increased approximately 44% to $42.5 million for the quarter ended October 31, 2021 compared to $29.6 million during the same period of the prior year. * Total revenues for the quarter ended October 31, 2021 increased 12% to $31.2 million, compared to $27.9 million for the same period of the prior year. * Recurring revenue streams for Maintenance and Cloud Subscriptions were 63% of total revenues in the quarter ended October 31, 2021 compared to 62% in the same period of the prior year. * Maintenance revenues for the quarter ended October 31, 2021 decreased 9% to $9.3 million compared to $10.2 million for the same period last year. * Professional services and other revenues for the quarter ended October 31, 2021 increased 5% to $10.8 million compared to $10.2 million for the same period last year. For the Supply Chain business, professional services revenues for the quarter ended October 31, 2021 increased by 6% to $5.3 million when compared to $5.0 million in the same period prior year. * Operating earnings for the quarter ended October 31, 2021 increased 326% to $2.7 million compared to $0.6 million for the same period last year. * GAAP net earnings for the quarter ended October 31, 2021 increased 379% to $3.3 million or $0.10 per fully diluted share compared to $0.7 million or $0.02 per fully diluted share for the same period last year. * Adjusted net earnings for the quarter ended October 31, 2021, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, increased 173% to $4.2 million or $0.12 per fully diluted share compared to $1.5 million or $0.05 per fully diluted share for the same period last year. * EBITDA increased by 74% to $3.7 million for the quarter ended October 31, 2021 compared to $2.1 million for the same period last year. * Adjusted EBITDA increased by 70% to $4.8 million for the quarter ended October 31, 2021 compared to $2.8 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 2022 Year to Date Financial Highlights:

* Subscription fees were $20.1 million for the six months ended October 31, 2021, a 51% increase compared to $13.3 million for the same period last year, while Software license revenues were $1.3 million compared to $1.2 million for the same period last year, reflecting our conversion to the SaaS engagement model. * Total revenues for the six months ended October 31, 2021 increased 10% to $60.5 million compared to $55.2 million for the same period last year. * Recurring revenue streams for Maintenance and Cloud Services were 64% of total revenues for the six-month period ended October 31, 2021 compared to 61% in the same period of the prior year. * Maintenance revenues for the six months ended October 31, 2021 were $18.7 million, a 9% decrease compared to $20.5 million for the same period last year. * Professional services and other revenues for the six months ended October 31, 2021 increased 1% to $20.3 million compared to $20.1 million for the same period last year. * For the six months ended October 31, 2021, the Company reported operating earnings of approximately $4.5 million compared to $1.5 million for the same period last year, a 194% increase. * GAAP net earnings were approximately $6.3 million or $0.18 per fully diluted share for the six months ended October 31, 2021, a 130% increase compared to $2.7 million or $0.08 per fully diluted share for the same period last year. * Adjusted net earnings for the six months ended October 31, 2021, which exclude stock-based compensation expense and amortization of acquisition-related intangibles, increased 81% to $7.8 million or $0.23 per fully diluted share, compared to $4.3 million or $0.13 per fully diluted share for the same period last year. * EBITDA increased by 41% to $6.6 million for the six months ended October 31, 2021 compared to $4.7 million for the same period last year. * Adjusted EBITDA increased 43% to $8.4 million for the six months ended October 31, 2021 compared to $5.9 million for the six months ended October 31, 2020. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax (benefit)/expense and non-cash stock-based compensation.

The overall financial condition of the Company remains strong, with cash and investments of approximately $111.3 million, an increase of approximately $16.7 million when compared to October 31, 2020, and no debt as of October 31, 2021. During the second quarter of fiscal year 2022, the Company paid shareholder dividends of approximately $3.7 million.

"Our second quarter of fiscal year 2022 is off to a solid start with two consecutive quarters of double-digit growth in our Supply Chain Management segment and a 44% increase in Cloud Services ACV when compared to the same period last year," said Allan Dow, CEO and president of American Software. "Our backlog as measured by our Remaining Performance Obligations (RPO) increased 58% to $123 million in the second quarter when compared to last year, reflecting a new record for the company. As we head into our seasonally stronger second half, we expect to build upon our momentum as we execute against our growing pipeline and as enterprises increasingly adopt cloud-based supply chain transformation solutions."

"This past quarter also emphasized that sustainability initiatives are becoming increasingly influential to consumers and, consequently, businesses. Many companies are evaluating their social and environmental initiatives and are finding that a majority of their impact can be traced back to their supply chain practices," continued Dow. "This is driving companies of all sizes to lean on technology to measure their emissions and identify opportunities for improvement. We believe the future of supply chain sustainability is rooted in transparency, traceability and automation."

Key Second quarter of fiscal year 2022 highlights:

Customers & Channels

* Notable new and existing customers placing orders with the Company in the second quarter include: Diversey, Inc., Gerdau Ameristeel US, Inc., Griffith Foods Worldwide, Inc., Lacoste Operations, Lindsay Corporation, Sauer Brands, Inc, Stichd B.V., Whitebridge Pet Brands, LLC. * During the quarter, SaaS subscription and/or software license agreements were signed with customers located in the following 6 countries: Belgium, Canada, France, Mexico, New Zealand, and United States. * Logility, Inc. and Demand Management, Inc., wholly owned subsidiaries of the Company, were recognized as SupplyChainBrain's 2021 100 Great Supply Chain Partners. The recognized companies are a select group of companies whose customers recognize them for providing outstanding solutions and services. * During the quarter, Logility announced its ranking as the highest in the Digital Planning Use Case in the 2021 Gartner "Critical Capabilities for Supply Chain Planning Solutions" report. Logility's Digital Supply Chain Platform offers support for a broad range of supply chain planning requirements, from sales and operations planning (S&OP) through manufacturing. * Also during the quarter, Logility and Demand Management congratulated their customers who were recognized as Supply & Demand Chain Executive's 2021 Women in Supply Chain. Customers recognized were Mandy McCain of Berry Global, Katherine Storer of Berlin Packaging, Stephanie Francis of ChemPoint, Michelle Wielemaker of Capral Australia and Mariam Belghith of Laboratories Philadelphia in Sfax, Tunisia (laboratories SIMED).

Company and Technology

* During the quarter, Logility announced its partnership with PricewaterhouseCoopers (PwC) to bring the latest innovation in supply chain technology and services to strengthen its local Brazilian market presence and enable digital transformation. * Logility announced the partnership with Visus LLC to support analytics customers and their digital transformation journeys. The partnership leverages digital solutions using web and mobile technology to help drive value. * Logility also announced its latest software release which supports corporate social responsibility and supply chain traceability goals. Logility 21.02 powers technology to ensure sustainable, ethical practices that support brand integrity and corporate responsibility. * Also during the quarter, Logility announced the partnership with ArcherGrey to strengthen consulting and technology solutions for its customers. The partnership will support the evolving needs of customers in a rapidly changing supply chain environment.

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. Customers of New Generation Computing, Inc. which are now serviced by Logility and Demand Management, include Brooks Brothers, Carter's, Destination XL, 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 (626) 657-0013 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 (benefit)/expense. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax (benefit)/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(r) 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)

Second Quarter Ended Six Months Ended

October 31, October 31,

2021 2020 Pct 2021 2020 Pct Chg. Chg.

Revenues:

Subscription fees $ 10,361 $ 6,966 49 % $ 20,149 $ 13,329 51 %

License fees 805 450 79 % 1,297 1,237 5 %

Professional 10,779 10,242 5 % 20,308 20,056 1 % services & other

Maintenance 9,266 10,223 (9 %) 18,728 20,537 (9 %)

Total Revenues 31,211 27,881 12 % 60,482 55,159 10 %

Cost of Revenues:

Subscription 3,404 2,946 16 % 6,628 5,705 16 % services

License fees 198 553 (64 %) 357 1,228 (71 %)

Professional 7,477 7,624 (2 %) 14,487 15,454 (6 %) services & other

Maintenance 1,746 1,941 (10 %) 3,720 3,714 0 %

Total Cost of 12,825 13,064 (2 %) 25,192 26,101 (3 %) Revenues

Gross Margin 18,386 14,817 24 % 35,290 29,058 21 %

Operating expenses:

Research and 4,278 4,463 (4 %) 8,702 8,803 (1 %) development

Less: capitalized - (126 ) (100 %) - (371 ) (100 %) development

Sales and marketing 5,892 5,429 9 % 12,012 10,173 18 %

General and 5,476 4,367 25 % 10,010 8,831 13 % administrative

Amortization of acquisition-related 53 53 0 % 106 106 0 % intangibles

Total Operating 15,699 14,186 11 % 30,830 27,542 12 % Expenses

Operating Earnings 2,687 631 326 % 4,460 1,516 194 %

Interest Income/(Expense) & Other, 930 (42 ) nm 1,367 1,290 6 %Net

Earnings Before 3,617 589 514 % 5,827 2,806 108 %Income Taxes

Income Tax Expense/ 303 (103 ) nm (434 ) 80 nm (Benefit)

Net Earnings $ 3,314 $ 692 379 % $ 6,261 $ 2,726 130 %

Earnings per commonshare: (1)

Basic $ 0.10 $ 0.02 400 % $ 0.19 $ 0.08 138 %

Diluted $ 0.10 $ 0.02 400 % $ 0.18 $ 0.08 125 %

Weighted averagenumber of commonshares outstanding:

Basic 33,336 32,489 33,195 32,414

Diluted 34,684 32,896 34,448 32,919

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AMERICAN SOFTWARE, INC.

NON-GAAP MEASURES OF PERFORMANCE

(In thousands, except per share data, unaudited)

Second Quarter Ended Six Months Ended

October 31, October 31,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

NON-GAAP OperatingEarnings:

Operating Earnings $ 2,687 $ 631 326 % $ 4,460 $ 1,516 194 %(GAAP Basis)

Amortization of acquisition-related 53 311 (83 %) 106 622 (83 %) intangibles

Stock-based 1,042 652 60 % 1,817 1,198 52 % compensation

NON-GAAP Operating 3,782 1,594 137 % 6,383 3,336 91 %Earnings:

Non-GAAP OperatingEarnings, as a % of 12 % 6 % 11 % 6 %revenue

Second Quarter Ended Six Months Ended

October 31, October 31,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

NON-GAAP EBITDA:

Net Earnings (GAAP $ 3,314 $ 692 379 % $ 6,261 $ 2,726 130 %Basis)

Income Tax Expense/ 303 (103 ) nm (434 ) 80 nm (Benefit)

Interest Income/ (Expense) & Other, (930 ) 42 nm (1,367 ) (1,290 ) 6 % Net

Amortization of 860 1,353 (36 %) 1,816 2,883 (37 %) intangibles

Depreciation 179 161 11 % 353 311 14 %

EBITDA (earningsbefore interest, 3,726 2,145 74 % 6,629 4,710 41 %taxes, depreciationand amortization)

Stock-based 1,042 652 60 % 1,817 1,198 52 % compensation

Adjusted EBITDA $ 4,768 $ 2,797 70 % $ 8,446 $ 5,908 43 %

EBITDA, as apercentage of 12 % 8 % 11 % 9 %revenues

Adjusted EBITDA, asa percentage of 15 % 10 % 14 % 11 %revenues

Second Quarter Ended Six Months Ended

October 31, October 31,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

NON-GAAP EARNINGSPER SHARE:

Net Earnings (GAAP $ 3,314 $ 692 379 % $ 6,261 $ 2,726 130 %Basis)

Amortization of acquisition-related 43 272 (84 %) 85 545 (84 %) intangibles (2)

Stock-based 836 570 47 % 1,456 1,048 39 % compensation (2)

Adjusted Net $ 4,193 $ 1,534 173 % $ 7,802 $ 4,319 81 %Earnings

Adjusted non-GAAPdiluted earnings per $ 0.12 $ 0.05 140 % $ 0.23 $ 0.13 77 %share

Second Quarter Ended Six Months Ended

October 31, October 31,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

NON-GAAP EarningsPer Share

Net Earnings (GAAP $ 0.10 $ 0.02 400 % $ 0.18 $ 0.08 125 %Basis)

Amortization of acquisition-related - 0.01 (100 %) - 0.02 (100 %) intangibles (2)

Stock-based 0.02 0.02 0 % 0.05 0.03 67 % compensation (2)

Adjusted Net 0.12 $ 0.05 140 % 0.23 $ 0.13 77 %Earnings

Second Quarter Ended Six Months Ended

October 31, October 31,

2021 2020 Pct Chg. 2021 2020 Pct Chg.

Amortization ofacquisition-relatedintangibles

Cost of license $ - $ 258 (100 %) $ - $ 516 (100 %)

Operating expenses 53 53 0 % 106 106 0 %

Total amortizationof $ 53 $ 311 (83 %) $ 106 $ 622 (83 %)acquisition-relatedintangibles

Stock-basedcompensation

Cost of revenues $ 68 $ 23 196 % $ 129 $ 66 95 %

Research and 99 49 102 % 167 74 126 % development

Sales and marketing 174 87 100 % 317 153 107 %

General and 701 493 42 % 1,204 905 33 % administrative

Total stock-based $ 1,042 $ 652 60 % $ 1,817 $ 1,198 52 %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 $0.10 and $0.19 for the threeand six months ended October 31, 2021, respectively. Diluted per share forClass B shares under the two-class method are $0.02 and $0.09 for the three andsix months ended October 31, 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 six monthperiods ended October 31, 2021 of 19.8% and 12.5% for the three and six monthperiods ended October 31, 2020, respectively.

nm- not meaningfulAMERICAN SOFTWARE, INC.

Consolidated Balance Sheet Information

(In thousands)

(Unaudited)

October 31, April 30,

2021 2021



Cash and Cash Equivalents $ 94,201 $ 88,658

Short-term Investments 17,163 16,006

Accounts Receivable:

Billed 19,662 24,438

Unbilled 2,475 2,201

Total Accounts Receivable, net 22,137 26,639

Prepaids & Other 7,375 5,320

Current Assets 140,876 136,623

PP&E, net 3,689 3,428

Capitalized Software, net 3,057 4,767

Goodwill 25,888 25,888

Other Intangibles, net 254 360

Deferred Sales Commissions - Non-current 2,256 2,474

Lease Right of Use Assets 1,249 1,454

Other Non-current Assets 2,339 2,163

Total Assets $ 179,608 $ 177,157

Accounts Payable $ 1,994 $ 1,732

Accrued Compensation and Related costs 4,281 6,129

Dividend Payable 3,676 3,615

Operating Lease Obligation - Current 665 739

Other Current Liabilities 611 1,307

Deferred Revenues - Current 35,968 37,142

Current Liabilities 47,195 50,664

Operating Lease Obligation - Non-current 669 821

Deferred Tax Liability - Non-current 2,527 2,627

Other Long-term Liabilities 370 654

Long-term Liabilities 3,566 4,102

Total Liabilities 50,761 54,766

Shareholders' Equity 128,847 122,391



Total Liabilities & Shareholders' Equity $ 179,608 $ 177,157

AMERICAN SOFTWARE, INC.

Condensed Consolidated Cashflow Information

(In thousands)

(Unaudited)



Second Quarter Ended

October 31,

2021 2020



Net cash provided by operating activities $ 7,712 $ 6,771



Capitalized computer software development costs - (371 )

Purchases of property and equipment, net of (615 ) (163 ) disposals



Net cash used in investing activities (615 ) (534 )



Dividends paid (7,268 ) (7,118 )

Proceeds from exercise of stock options 5,714 2,853



Net cash used in financing activities (1,554 ) (4,265 )



Net change in cash and cash equivalents 5,543 1,972

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



Cash and cash equivalents at end of period $ 94,201 $ 81,786

View source version on businesswire.com: https://www.businesswire.com/news/home/20211118006228/en/

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