American Software Reports Second Quarter of Fiscal Year 2023 Results

ATLANTA--(BUSINESS WIRE)--November 17, 2022--American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the second quarter of fiscal year 2023.

Key Second Quarter Financial Highlights:

• Subscription fees were $12.3 million for the quarter ended October 31, 2022, a 19% increase compared to $10.4 million for the same period last year, and software license revenues were $0.7 million compared to $0.8 million for the same period last year.
• Total revenues for the quarter ended October 31, 2022 increased 1% to $31.4 million, compared to $31.2 million for the same period of the prior year.
• Recurring revenue streams for Maintenance and Cloud Subscriptions were $21.2 million or 67% of total revenues in the quarter ended October 31, 2022 compared to $19.6 million or 63% in the same period of the prior year.
• Maintenance revenues for the quarter ended October 31, 2022 decreased 5% to $8.8 million compared to $9.3 million for the same period last year reflecting the shift to cloud revenue as a client preference.
• Professional services and other revenues for the quarter ended October 31, 2022 decreased 11% to $9.6 million compared to $10.8 million for the same period last year. For the Supply Chain business, professional services revenues for the quarter ended October 31, 2022 decreased by 1% to $5.2 million when compared to $5.3 million in the same period prior year.
• Operating earnings for the quarter ended October 31, 2022 increased 3% to $2.8 million compared to $2.7 million for the same period last year.
• GAAP net earnings for the quarter ended October 31, 2022 decreased 37% to $2.1 million or $0.06 per fully diluted share compared to $3.3 million or $0.10 per fully diluted share for the same period last year.
• Adjusted net earnings for the quarter ended October 31, 2022, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, decreased 21% to $3.3 million or $0.10 per fully diluted share compared to $4.2 million or $0.12 per fully diluted share for the same period last year.
• EBITDA decreased by 3% to $3.6 million for the quarter ended October 31, 2022 compared to $3.7 million for the same period last year.
• Adjusted EBITDA increased by 4% to $4.9 million for the quarter ended October 31, 2022 compared to $4.8 million for the same period last year. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (loss)/income & other, net, income tax expense and non-cash stock-based compensation expense.

Key Fiscal 2023 Year to Date Financial Highlights:

• Subscription fees were $24.4 million for the six months ended October 31, 2022, a 21% increase compared to $20.1 million for the same period last year, while Software license revenues were $1.0 million compared to $1.3 million for the same period last year.
• Total revenues for the six months ended October 31, 2022 increased 4% to $62.7 million compared to $60.5 million for the same period last year.
• Recurring revenue streams for Maintenance and Cloud Services were $42.1 million and $38.9 million or 67% and 64% of total revenues for the six-month periods ended October 31, 2022 and 2021, respectively.
• Maintenance revenues for the six months ended October 31, 2022 were $17.7 million, a 5% decrease compared to $18.7 million for the same period last year.
• Professional services and other revenues for the six months ended October 31, 2022 decreased 3% to $19.6 million compared to $20.3 million for the same period last year.
• For the six months ended October 31, 2022, the Company reported operating earnings of approximately $5.3 million compared to $4.5 million for the same period last year, a 19% increase.
• GAAP net earnings were approximately $4.2 million or $0.12 per fully diluted share for the six months ended October 31, 2022, a 33% decrease compared to $6.3 million or $0.18 per fully diluted share for the same period last year.
• Adjusted net earnings for the six months ended October 31, 2022, which exclude stock-based compensation expense and amortization of acquisition-related intangibles, decreased 16% to $6.6 million or $0.19 per fully diluted share, compared to $7.8 million or $0.23 per fully diluted share for the same period last year.
• EBITDA increased by 4% to $6.9 million for the six months ended October 31, 2022 compared to $6.6 million for the same period last year.
• Adjusted EBITDA increased 13% to $9.6 million for the six months ended October 31, 2022 compared to $8.4 million for the six months ended October 31, 2021. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (loss)/income & other, net, income tax expense and non-cash stock-based compensation.

Key Second Quarter of Fiscal Year 2023 highlights:

Clients & Channels

• Notable new and existing customers placing orders with the Company in the second quarter include: Fastenal Company, Grand & Toy Ltd., Great Lakes Cheese Company, Inc., Herbalife Nutrition, Jackson Family Enterprises, Inc., Niagara Bottling, LLC., Ralph Lauren Inc., WEG Industries, and Workwear Outfitters LLC.
• During the quarter, SaaS subscription and/or software license agreements were signed with customers located in the following six countries: Australia, Brazil, Canada, India, the United Kingdom, and the United States.
• With its partner ecosystem continuing to play an important role in the company’s growth strategy, Logility formalized partnership agreements with Parker Avery and Wipro Ltd.
• Logility celebrated Supply & Demand Chain Executive’s 2022 Women in Supply Chain Award, as it saw leaders at its clients ORBIS Corporation and Polymer Group take home the distinction.

Company & Technology

• The 2022 Gartner Critical Capabilities for Supply Chain Planning Solutions positioned Logility above average in 13 of 15 use cases, placing the Company among the top three evaluated vendors in this competitive market.
• In September, Logility was named a Leader in four IDC MarketScapes for Supply Chain Planning Solutions. In these reports, IDC assesses the capabilities and business strategies of key vendors with broad competencies in each category.
• In October, Logility received the Gartner Peer Insights Customers’ Choice distinction for Supply Chain Planning Solutions. The designation recognizes vendor software products most value by IT Enterprise professionals, based on high customer ratings.
• In recognition of its work with iNova Pharmaceuticals, Logility was recognized as one of SupplyChainBrain’s 2022 100 Great Supply Chain Partners, now for sixteen years running.
• Logility bolstered its leadership team with the appointment of Tricia Brenn as Executive Vice President of Talent, and Kevin McInturff was promoted to Chief Technology Officer during the quarter.

The overall financial condition of the Company remains strong, with cash and investments of approximately $106.8 million. During the second quarter of fiscal year 2023, the Company paid shareholder dividends of approximately $3.7 million.

“We were pleased to see our adjusted EBITDA margin expand sequentially and year-over-year to nearly 16% despite delayed project starts that impacted our revenue in Q2,” said Allan Dow, CEO and President of American Software. “Although we are adjusting our revenue guidance lower to account for these delays, we are increasing our adjusted EBITDA expectations to reflect the strong performance to date and a more measured pace of investment amid the current global economic environment.”

Fiscal Year 2023 Financial Outlook

• Total revenues of $125.5 million to $127.5 million, including total recurring revenues of $85.5 million to $87.5 million.
• Adjusted EBITDA of $18.0 million to $20.0 million.

About American Software, Inc.

Atlanta-based American Software, Inc. (NASDAQ: AMSWA), through its operating entity Logility delivers an innovative technical platform that enables enterprises to accelerate their digital supply chain transformation from product concept to client availability via the Logility® Digital Supply Chain Platform, a single platform spanning Product, Demand, Inventory, Supply, Sourcing, Deploy, Corporate Responsibility (ESG) and Network Optimization aligned with Integrated Business Planning.

Serving clients such as Big Lots, Carter’s, Destination XL, Hostess, Husqvarna Group, Jockey International, Johnson Controls, Parker Hannifin, Red Wing Shoe Company, Spanx, Trident Seafoods Corporation, and WEG; our solutions are marketed and sold through a direct sales team as well as an indirect global value-added reseller (“VAR”) distribution network.

Fueled by supply chain master data, allowing for the automation of critical business processes through the application of artificial intelligence and machine learning algorithms to a variety of internal and external data streams, the comprehensive Logility 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, network design and optimization (NDO), retail merchandise and assortment planning and allocation, product lifecycle management (PLM), sourcing management, vendor quality and compliance, and product traceability. For more information about Logility, please visit www.logility.com. Logility is a wholly-owned subsidiary and operating entity for American Software, Inc. (NASDAQ: AMSWA). You can learn more about American Software at www.amsoftware.com, or by calling (404) 364-7615 or emailing kliu@amsoftware.com.

Operating and Non-GAAP Financial Measures

The Company includes 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 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. EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (loss)/income & other, net, and income tax expense. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (loss)/income & 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.

Logility® is a registered trademark of Logility, Inc. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.