Business Wire

American Software Reports Third Quarter of Fiscal Year 2022 Results

Double-Digit Revenue Growth Driven by Continued Strong Growth in Subscription Fees

ATLANTA–(BUSINESS WIRE)–American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the third quarter of fiscal year 2022.

Key Third Quarter Financial Highlights:

  • Subscription fees were $10.9 million for the quarter ended January 31, 2022, a 45% increase compared to $7.5 million for the same period last year and software license revenues were up 87% to $1.0 million compared to $0.5 million for the same period last year.
  • Cloud Services Annual Contract Value (ACV) increased approximately 43% to $45.3 million for the quarter ended January 31, 2022 compared to $31.6 million during the same period of the prior year.
  • Total revenues for the quarter ended January 31, 2022 increased 17% to $32.4 million, compared to $27.7 million for the same period of the prior year.
  • Recurring revenue streams for Maintenance and Cloud Subscriptions were 62% of total revenues in the quarter ended January 31, 2022 compared to 64% in the same period of the prior year.
  • Maintenance revenues for the quarter ended January 31, 2022 decreased 10% to $9.1 million compared to $10.2 million for the same period last year.
  • Professional services and other revenues for the quarter ended January 31, 2022 increased 21% to $11.4 million compared to $9.5 million for the same period last year. For the Supply Chain business, professional services revenues for the quarter ended January 31, 2022 increased by 13% to $5.4 million when compared to $4.8 million in the same period prior year.
  • Operating earnings for the quarter ended January 31, 2022 increased 246% to $3.2 million compared to $0.9 million for the same period last year.
  • GAAP net earnings for the quarter ended January 31, 2022 increased 27% to $2.9 million or $0.09 per fully diluted share compared to $2.3 million or $0.07 per fully diluted share for the same period last year.
  • Adjusted net earnings for the quarter ended January 31, 2022, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, increased 28% to $3.8 million or $0.11 per fully diluted share compared to $3.0 million or $0.09 per fully diluted share for the same period last year.
  • EBITDA increased by 94% to $4.2 million for the quarter ended January 31, 2022 compared to $2.2 million for the same period last year.
  • Adjusted EBITDA increased by 85% to $5.3 million for the quarter ended January 31, 2022 compared to $2.9 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/(benefit) and non-cash stock-based compensation expense.

Key Fiscal 2022 Year to Date Financial Highlights:

  • Subscription fees were $31.0 million for the nine months ended January 31, 2022, a 49% increase compared to $20.8 million for the same period last year, while Software license revenues increased 30% to $2.3 million compared to $1.8 million for the same period last year.
  • Total revenues for the nine months ended January 31, 2022 increased 12% to $92.9 million compared to $82.8 million for the same period last year.
  • Recurring revenue streams for Maintenance and Cloud Services were 63% of total revenues for the nine-month period ended January 31, 2022 compared to 62% in the same period of the prior year.
  • Maintenance revenues for the nine months ended January 31, 2022 were $27.9 million, a 9% decrease compared to $30.7 million for the same period last year.
  • Professional services and other revenues for the nine months ended January 31, 2022 increased 7% to $31.8 million compared to $29.6 million for the same period last year.
  • For the nine months ended January 31, 2022, the Company reported operating earnings of approximately $7.7 million compared to $2.5 million for the same period last year, a 214% increase.
  • GAAP net earnings were approximately $9.2 million or $0.27 per fully diluted share for the nine months ended January 31, 2022, an 83% increase compared to $5.0 million or $0.15 per fully diluted share for the same period last year.
  • Adjusted net earnings for the nine months ended January 31, 2022, which exclude stock-based compensation expense and amortization of acquisition-related intangibles, increased 60% to $11.6 million or $0.34 per fully diluted share, compared to $7.3 million or $0.22 per fully diluted share for the same period last year.
  • EBITDA increased by 58% to $10.9 million for the nine months ended January 31, 2022 compared to $6.9 million for the same period last year.
  • Adjusted EBITDA increased 57% to $13.8 million for the nine months ended January 31, 2022 compared to $8.8 million for the nine months ended January 31, 2021. 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 $114.8 million, an increase of approximately $14.0 million when compared to January 31, 2021. During the third quarter of fiscal year 2022, the Company paid shareholder dividends of approximately $3.7 million.

“Our revenue growth accelerated to 17% in the third quarter of fiscal year 2022 and our Cloud Services ACV increased 43% increase 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 61% to $129 million in the third quarter when compared to last year, reflecting a new record for the company. As we head into our final quarter of fiscal 2022, we expect to build upon our momentum as we execute against our growing pipeline and position the company for strong growth in fiscal 2023 and beyond.”

“This past quarter also heightened the importance of transparency and the continued adoption of AI and ML to enable sustainable and socially responsible businesses. It’s becoming ever more necessary for companies to prove the sustainability of their practices through increased diligence around corporate responsibility, traceability and honesty with customers about the origins of goods and services,” continued Dow. “Because of this, I believe the adoption of AI and ML is going to continue to accelerate and enable companies to truly optimize operations and achieve sustainability long-term. These methods help companies take massive data sets and turn them into digestible, actionable insights for their supply chain practices. We believe the future of supply chain sustainability is rooted in transparency and automation that is enabled by a committed technology partner.”

Key Third Quarter of Fiscal Year 2022 highlights:

Customers & Channels

  • Notable new and existing customers placing orders with the Company in the third quarter include: Celanese Ltd., CQMS Razer Pty. Ltd., Empresa Siderurgica del Peru SAA, Intertape Polymer Corp., Mustad Netherlands B.V., Reynolds Consumer Product LLC, and Seco Tools AB.
  • During the quarter, SaaS subscription and/or software license agreements were signed with customers located in the following 10 countries: Australia, Canada, Ireland, Mexico, Netherlands, New Zealand, Peru, Sweden, United Kingdom and United States.
  • Logility, Inc. and Demand Management, Inc., wholly owned subsidiaries of the Company, were recognized among Food Logistics’ 2021 Top Software and Technology Providers. This marks Logility’s seventeenth year and Demand Management’s thirteenth year of recognition. The annual FL100+ Top Software and Technology Providers honors leading software and technology providers that ensure a safe, efficient, and reliable global food and beverage supply chain.
  • During the quarter, Logility was ranked in the 2022 RIS Software LeaderBoard as a leader in eighteen categories, and in the top ten of many of the referenced categories. Logility was recognized for helping retail customers by delivering innovative technology and offering exceptional support as they faced unparalleled challenges in the past two years.
  • Also, during the quarter, Logility announced its recognition in Retail Today’s Retail CIO Radar 2022. This is a list of the most innovative and transformative retail technology solution providers. Based on Logility’s innovative and transformative capabilities, track record, competency, leadership in the industry, market share, competitive landscape, and more, a panel of industry experts, analysts and Retail Today editorial board selected Logility.

Company and Technology

  • During the quarter, Demand Management announced a strategic partnership with Royal Cyber, a leading IT consultancy and solutions provider. The partnership enables organizations to gain value by leveraging the benefits of Demand Management’s digital supply chain platform, along with Royal Cyber’s efficient and robust customer service.
  • Logility also announced a partnership with Planalytics to identify, quantify and apply weather-driven demand calculations to business planning and forecasting. The partnership enables Logility customers to layer in Planalytics’ predictive demand metrics to better understand impacts across their customer base and proactively capitalize on sales opportunities created by favorable weather while mitigating risks when demand is negatively impacted.
  • Logility announced a commitment to help food and beverage, consumer packaged goods and durables, process manufacturing and fashion brands to gain greater visibility, traceability and compliance within their supply chains. Logility is committed to doing so through the corporate responsibility solution within the Logility® Digital Supply Chain Platform that was launched earlier in the year. The solution helps businesses track the social compliance and environmental status of suppliers.

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 & 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® 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)

 

Third Quarter Ended

 

Nine Months Ended

January 31,

 

January 31,

 

2022

 

 

2021

 

 

Pct Chg.

 

 

2022

 

 

 

2021

 

 

Pct Chg.

Revenues:

Subscription fees

$

10,856

$

7,486

 

45

%

$

31,005

 

$

20,815

 

49

%

License fees

 

992

 

530

 

87

%

 

2,289

 

 

1,767

 

30

%

Professional services & other

 

11,443

 

9,495

 

21

%

 

31,751

 

 

29,551

 

7

%

Maintenance

 

9,131

 

10,172

 

(10

%)

 

27,859

 

 

30,709

 

(9

%)

Total Revenues

 

32,422

 

27,683

 

17

%

 

92,904

 

 

82,842

 

12

%

 

Cost of Revenues:

Subscription services

 

3,431

 

3,062

 

12

%

 

10,059

 

 

8,767

 

15

%

License fees

 

240

 

288

 

(17

%)

 

597

 

 

1,516

 

(61

%)

Professional services & other

 

8,012

 

7,178

 

12

%

 

22,499

 

 

22,632

 

(1

%)

Maintenance

 

1,789

 

1,894

 

(6

%)

 

5,509

 

 

5,608

 

(2

%)

Total Cost of Revenues

 

13,472

 

12,422

 

8

%

 

38,664

 

 

38,523

 

0

%

Gross Margin

 

18,950

 

15,261

 

24

%

 

54,240

 

 

44,319

 

22

%

Operating expenses:

Research and development

 

4,602

 

4,475

 

3

%

 

13,304

 

 

13,278

 

0

%

Less: capitalized development

 

 

(233

)

(100

%)

 

 

 

(604

)

(100

%)

Sales and marketing

 

5,222

 

5,029

 

4

%

 

17,234

 

 

15,202

 

13

%

General and administrative

 

5,834

 

5,002

 

17

%

 

15,844

 

 

13,833

 

15

%

Amortization of acquisition-related intangibles

 

53

 

53

 

0

%

 

159

 

 

159

 

0

%

 

Total Operating Expenses

 

15,711

 

14,326

 

10

%

 

46,541

 

 

41,868

 

11

%

Operating Earnings

 

3,239

 

935

 

246

%

 

7,699

 

 

2,451

 

214

%

Interest Income & Other, Net

 

92

 

1,432

 

(94

%)

 

1,459

 

 

2,722

 

(46

%)

Earnings Before Income Taxes

 

3,331

 

2,367

 

41

%

 

9,158

 

 

5,173

 

77

%

Income Tax Expense/(Benefit)

 

391

 

56

 

598

%

 

(43

)

 

136

 

nm

Net Earnings

$

2,940

$

2,311

 

27

%

$

9,201

 

$

5,037

 

83

%

Earnings per common share: (1)

Basic

$

0.09

$

0.07

 

29

%

$

0.28

 

$

0.16

 

75

%

Diluted

$

0.09

$

0.07

 

29

%

$

0.27

 

$

0.15

 

80

%

 

Weighted average number of common shares outstanding:

Basic

 

33,490

 

32,628

 

 

33,293

 

 

32,485

 

Diluted

 

34,578

 

33,293

 

 

34,325

 

 

33,107

 

 

nm- not meaningful

AMERICAN SOFTWARE, INC.

NON-GAAP MEASURES OF PERFORMANCE

(In thousands, except per share data, unaudited)

 

Third Quarter Ended

 

Nine Months Ended

January 31,

 

January 31,

 

2022

 

 

 

2021

 

 

Pct Chg.

 

 

2022

 

 

 

2021

 

 

Pct Chg.

NON-GAAP Operating Earnings:

Operating Earnings (GAAP Basis)

$

3,239

 

$

935

 

246

%

$

7,699

 

$

2,451

 

214

%

Amortization of acquisition-related intangibles

 

53

 

 

96

 

(45

%)

 

159

 

 

718

 

(78

%)

Stock-based compensation

 

1,093

 

 

703

 

55

%

 

2,910

 

 

1,901

 

53

%

NON-GAAP Operating Earnings:

 

4,385

 

 

1,734

 

153

%

 

10,768

 

 

5,070

 

112

%

 

Non-GAAP Operating Earnings, as a % of revenue

 

14

%

 

6

%

 

12

%

 

6

%

 
 

Third Quarter Ended

 

Nine Months Ended

January 31,

 

January 31,

 

2022

 

 

 

2021

 

 

Pct Chg.

 

 

2022

 

 

 

2021

 

 

Pct Chg.

NON-GAAP EBITDA:

Net Earnings (GAAP Basis)

$

2,940

 

$

2,311

 

27

%

$

9,201

 

$

5,037

 

83

%

Income Tax Expense/(Benefit)

 

391

 

 

56

 

598

%

 

(43

)

 

136

 

(132

%)

Interest Income & Other, Net

 

(92

)

 

(1,432

)

(94

%)

 

(1,459

)

 

(2,722

)

(46

%)

Amortization of intangibles

 

810

 

 

1,093

 

(26

%)

 

2,626

 

 

3,976

 

(34

%)

Depreciation

 

191

 

 

154

 

24

%

 

544

 

 

465

 

17

%

EBITDA (earnings before interest, taxes, depreciation and amortization)

 

4,240

 

 

2,182

 

94

%

 

10,869

 

 

6,892

 

58

%

 

Stock-based compensation

 

1,093

 

 

703

 

55

%

 

2,910

 

 

1,901

 

53

%

Adjusted EBITDA

$

5,333

 

$

2,885

 

85

%

$

13,779

 

$

8,793

 

57

%

 

EBITDA, as a percentage of revenues

 

13

%

 

8

%

 

12

%

 

8

%

 

Adjusted EBITDA, as a percentage of revenues

 

16

%

 

10

%

 

15

%

 

11

%

 
 

Third Quarter Ended

 

Nine Months Ended

January 31,

 

January 31,

 

2022

 

 

 

2021

 

 

Pct Chg.

 

 

2022

 

 

 

2021

 

 

Pct Chg.

NON-GAAP EARNINGS PER SHARE:

Net Earnings (GAAP Basis)

$

2,940

 

$

2,311

 

27

%

$

9,201

 

$

5,037

 

83

%

Amortization of acquisition-related intangibles (2)

 

41

 

 

80

 

(49

%)

 

126

 

 

617

 

(80

%)

Stock-based compensation (2)

 

848

 

 

589

 

44

%

 

2,304

 

 

1,631

 

41

%

Adjusted Net Earnings

$

3,829

 

$

2,980

 

28

%

$

11,631

 

$

7,285

 

60

%

 

Adjusted non-GAAP diluted earnings per share

$

0.11

 

$

0.09

 

22

%

$

0.34

 

$

0.22

 

55

%

 

Third Quarter Ended

 

Nine Months Ended

January 31,

 

January 31,

 

2022

 

 

 

2021

 

 

Pct Chg.

 

 

2022

 

 

 

2021

 

 

Pct Chg.

NON-GAAP Earnings Per Share

Net Earnings (GAAP Basis)

$

0.09

 

$

0.07

 

29

%

$

0.27

 

$

0.15

 

80

%

Amortization of acquisition-related intangibles (2)

 

 

 

 

 

 

 

 

0.02

 

(100

%)

Stock-based compensation (2)

 

0.02

 

 

0.02

 

0

%

 

0.07

 

 

0.05

 

40

%

Adjusted Net Earnings

 

0.11

 

$

0.09

 

22

%

 

0.34

 

$

0.22

 

55

%

 
 

Third Quarter Ended

 

Nine Months Ended

January 31,

 

January 31,

 

2022

 

 

 

2021

 

 

Pct Chg.

 

 

2022

 

 

 

2021

 

 

Pct Chg.

Amortization of acquisition-related intangibles

Cost of license

$

 

$

43

 

(100

%)

$

 

$

559

 

(100

%)

Operating expenses

 

53

 

 

53

 

0

%

 

159

 

 

159

 

0

%

Total amortization of acquisition-related intangibles

$

53

 

$

96

 

(45

%)

$

159

 

$

718

 

(78

%)

 

Stock-based compensation

Cost of revenues

$

59

 

$

37

 

59

%

$

188

 

$

103

 

83

%

Research and development

 

106

 

 

56

 

89

%

 

273

 

 

130

 

110

%

Sales and marketing

 

145

 

 

104

 

39

%

 

462

 

 

257

 

80

%

General and administrative

 

783

 

 

506

 

55

%

 

1,987

 

 

1,411

 

41

%

Total stock-based compensation

$

1,093

 

$

703

 

55

%

$

2,910

 

$

1,901

 

53

%

 

(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 $0.09 and $0.28 for the three and nine months ended January 31, 2022, respectively. Diluted per share for Class B shares under the two-class method are $0.07 and $0.16 for the three and nine months ended January 31, 2021, respectively.

(2) – Tax affected using the effective tax rate excluding a discrete item related to excess tax benefit for stock options for the three and nine month periods ended January 31, 2022 of 22.4% and 20.8% and for the three and nine month periods ended January 31, 2021, 16.2% and 14.2%, respectively.

nm- not meaningful

AMERICAN SOFTWARE, INC.

Consolidated Balance Sheet Information

(In thousands)

(Unaudited)

January 31,

 

April 30,

 

2022

 

2021

 

 

 

Cash and Cash Equivalents

$

98,355

$

88,658

 

Short-term Investments

 

16,463

 

16,006

 

Accounts Receivable:

 

Billed

 

24,164

 

24,438

 

Unbilled

 

3,255

 

2,201

 

Total Accounts Receivable, net

 

27,419

 

26,639

 

Prepaids & Other

 

6,474

 

5,320

 

Current Assets

 

148,711

 

136,623

 

 

PP&E, net

 

3,720

 

3,428

 

Capitalized Software, net

 

2,301

 

4,767

 

Goodwill

 

25,888

 

25,888

 

Other Intangibles, net

 

201

 

360

 

Deferred Sales Commissions – Non-current

 

2,122

 

2,474

 

Lease Right of Use Assets

 

1,093

 

1,454

 

Other Non-current Assets

 

2,014

 

2,163

 

Total Assets

$

186,050

$

177,157

 

 

Accounts Payable

$

3,158

$

1,732

 

Accrued Compensation and Related costs

 

5,242

 

6,129

 

Dividend Payable

 

3,689

 

3,615

 

Operating Lease Obligation – Current

 

604

 

739

 

Other Current Liabilities

 

1,123

 

1,307

 

Deferred Revenues – Current

 

38,095

 

37,142

 

Current Liabilities

 

51,911

 

50,664

 

 

Operating Lease Obligation – Non-current

 

566

 

821

 

Deferred Tax Liability – Non-current

 

2,460

 

2,627

 

Other Long-term Liabilities

 

234

 

654

 

Long-term Liabilities

 

3,260

 

4,102

 

 

Total Liabilities

 

55,171

 

54,766

 

 

Shareholders’ Equity

 

130,879

 

122,391

 

 

 

 

Total Liabilities & Shareholders’ Equity

$

186,050

$

177,157

 

AMERICAN SOFTWARE, INC.

Condensed Consolidated Cashflow Information

(In thousands)

(Unaudited)

 

Nine Months Ended

 

January 31,

 

 

2022

 

 

 

2021

 

 

 

Net cash provided by operating activities

$

14,000

 

$

13,933

 

 

 

Capitalized computer software development costs

 

 

 

(604

)

 

Purchases of property and equipment, net of disposals

 

(751

)

 

(461

)

 

 

Net cash used in investing activities

 

(751

)

 

(1,065

)

 

 

Dividends paid

 

(10,957

)

 

(10,696

)

 

Proceeds from exercise of stock options

 

7,405

 

 

4,735

 

 

 

Net cash used in financing activities

 

(3,552

)

 

(5,961

)

 

 

Net change in cash and cash equivalents

 

9,697

 

 

6,907

 

 

Cash and cash equivalents at beginning of period

 

88,658

 

 

79,814

 

 

 

Cash and cash equivalents at end of period

$

98,355

 

$

86,721

 

 

 

 

Contacts

Vincent C. Klinges

Chief Financial Officer

American Software, Inc.

(404) 264-5477

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