American software reports third quarter of fiscal year 2022 results
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
