| Presentation and Summary of Significant Accounting Policies | (1)
Presentation and Summary of Significant Accounting
Policies
(a)
Basis of Presentation
Founded in
1970 and headquartered in Atlanta, Georgia, American Software, Inc.
and its subsidiaries (collectively, the “Company”) are
engaged in the development, marketing, and support activities of a
broad range of computer business application software products. The
Company’s operations are principally in the computer software
industry, and its products and services are used by customers
within the United States and certain international markets. We
provide our software solutions through three major business
segments, which are further broken down into a total of four major
product and service groups. The three business segments are
(1) Supply Chain Management (SCM), (2) Enterprise
Resource Planning (ERP), and (3) Information Technology (IT)
Consulting.
•
The SCM segment consists of our subsidiary, Logility, Inc. (see
Note 9), which provides collaborative supply chain solutions to
streamline and optimize the production, distribution and management
of products between trading partners and Demand Management, Inc.
(“DMI”), a wholly-owned subsidiary of
Logility.
•
The ERP segment consists of (1) American Software USA,
Inc., which provides purchasing and materials management, customer
order processing, financial, e-commerce, Flow Manufacturing and
traditional manufacturing solutions, and (2) New Generation
Computing (NGC), which provides industry specific business software
to both retailers and manufacturers primarily in the apparel, sewn
products and furniture industries.
•
The IT Consulting segment consists of The Proven Method, Inc.,
an IT staffing and consulting services firm.
(b)
Principles of Consolidation
The
consolidated financial statements include the accounts of American
Software, Inc. and its wholly-owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in
consolidation.
(c)
Revenue Recognition and Deferred Revenue
The Company
recognizes revenue predominately in accordance with the Software
Revenue Recognition Topic of the Financial Accounting Standards
Board’s (FASB) Accounting Standards Codification.
License.
Maintenance.
Services. ,
Subscription
and other recurring revenues include fees for access rights to
software solutions that are offered under a subscription-based
delivery model where the users have the right to take possession of
the software. Under this model, the software applications are
hosted by the Company or by a third party and the customer accesses
and uses the software on an as-needed basis over the Internet or
via a dedicated line. The underlying arrangements typically
(i) include a single fee for the service that is billed
monthly, quarterly or annually, (ii) cover a period from 36 to
60 months and (iii) provides the customer with an option
to take delivery of the software at any time during or after the
subscription term. In addition, subscription and other recurring
revenues include subscription-based software license revenues where
the customer has taken physical possession of the software for a
defined period of time. Subscription revenues are recognized
ratably over the subscription term because the Company is unable to
establish VSOE and separate the various elements, beginning on the
commencement date of each contract. As of April 30, 2015,
revenue recorded under this accounting treatment has not been
significant.
Indirect Channel Revenue.
Deferred Revenue.
Sales
Taxes. .
Unbilled Accounts Receivable.
(d)
Cost of Revenues
Cost of
revenues for licenses includes amortization of capitalized computer
software development costs, salaries and benefits and value-added
reseller (VAR) commissions. Costs for maintenance and services
revenues include the cost of personnel to conduct implementations,
customer support and consulting, and other personnel-related
expenses as well as agent commission expenses related to
maintenance revenues generated by the indirect channel. Commission
costs for maintenance are deferred and amortized over the related
maintenance term.
(e)
Cash Equivalents
Cash
equivalents of $43.0 million and $51.6 million at April 30,
2015 and 2014, respectively, consist of overnight repurchase
agreements and money market deposit accounts. The Company considers
all such investments with original maturities of three months or
less to be cash equivalents for purposes of the consolidated
statements of cash flows.
(f)
Concentrations of Credit Risk
Financial
instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash and cash
equivalents, short- and long-term investments and accounts
receivable. The Company maintains cash and cash equivalents and
short- and long-term investments with various financial
institutions. The Company’s sales are primarily to companies
located in North America and Europe. The Company performs periodic
credit evaluations of its customers’ financial condition and
does not require collateral. Accounts receivable are due
principally from companies under stated contract terms.
(g)
Returns and Allowances
The Company
has not experienced significant returns or warranty claims to date
and, as a result, the allowance for the cost of returns and product
warranty claims at April 30, 2015 or 2014 is not
significant.
The Company
records an allowance for doubtful accounts based on the historical
experience of write-offs and a detailed assessment of accounts
receivable. The total amounts of expense/(recovery) to operations
were approximately $178,000, $(56,000), and $216,000 for 2015,
2014, and 2013, respectively, which are included in general and
administrative expenses in the accompanying consolidated statements
of operations. In estimating the allowance for doubtful accounts,
management considers the age of the accounts receivable, the
Company’s historical write-offs, and the credit worthiness of
the customer, among other factors. Should any of these factors
change, the estimates made by management will also change
accordingly, which could affect the level of the Company’s
future provision for doubtful accounts. Uncollectible accounts are
written off when it is determined that the specific balance is not
collectible.
(h)
Investments
Investments
consist of commercial paper, corporate bonds, government
securities, certificates of deposits and marketable equity
securities. The Company accounts for its investments in accordance
with the Investments—Debt and Equity Securities Topic of the
FASB Accounting Standards Codification. The Company has classified
its investment portfolio as “trading.”
“Trading” securities are bought and held principally
for the purpose of selling them in the near term and are recorded
at fair value. Unrealized gains and losses on trading securities
are included in the determination of net earnings. For the purposes
of computing realized gains and losses, cost is identified on a
specific identification basis. Investments with maturities less
than one year as of the balance sheet date are classified as
short-term investments and those that mature greater than one year
are classified as long-term investments.
(i)
Furniture, Equipment, and Purchased Computer
Software
Furniture,
equipment and purchased computer software are recorded at cost,
less accumulated depreciation and amortization. Depreciation of
buildings, computer equipment, purchased computer software, office
furniture and equipment is calculated using the straight-line
method based upon the estimated useful lives of the assets (three
years for computer equipment and software, seven years for office
furniture and equipment and thirty years for buildings). Leasehold
improvements are amortized using the straight-line method over the
estimated useful lives of the assets or the related lease term,
whichever is shorter. Depreciation and amortization expense on
buildings, furniture, equipment and purchased computer software was
$1,193,000, $1,056,000, and $1,076,000 in 2015, 2014 and 2013,
respectively.
(j)
Capitalized Computer Software Development Costs
The Company
capitalizes certain computer software development costs in
accordance with the FASB Accounting Standards Codification Costs of
Software to be Sold, Leased or Marketed Topic. Costs incurred
internally to create a computer software product or to develop an
enhancement to an existing product are charged to expense when
incurred as research and development expense until technological
feasibility for the respective product is established. Thereafter,
all software development costs are capitalized and reported at the
lower of unamortized cost or net realizable value. Capitalization
ceases when the product or enhancement is available for general
release to customers. The Company makes ongoing evaluations of the
recoverability of its capitalized software projects by comparing
the net amount capitalized for each product to the estimated net
realizable value of the product. If such evaluations indicate that
the unamortized software development costs exceed the net
realizable value, the Company writes off the amount by which the
unamortized software development costs exceed net realizable value.
Capitalized computer software development costs are being amortized
ratably on a straight-line basis over three years. Amortization of
capitalized computer software development costs is included in the
cost of license revenues in the consolidated statements of
operations.
Total
Expenditures and Amortization.
Years ended
April 30,
2015 2014 2013
(in
thousands)
Total capitalized
computer software development costs $ 2,747 $ 2,949 $ 3,418
Total research and
development expense 11,088 9,074 8,882
Total research and
development expense and capitalized computer software-development
costs $ 13,835 $ 12,023 $ 12,300
Total amortization of
capitalized computer software development costs $ 3,663 $ 925 $ 2,501
Capitalized
computer software development costs consist of the following at
April 30, 2015 and 2014 (in thousands):
2015 2014
Capitalized computer
software development costs $ 22,067 $ 19,321
Accumulated
amortization (12,252 ) (8,589 )
$ 9,815 $ 10,732
Of the
Company’s capitalized software projects that are currently
completed and being amortized, the Company expects amortization
expense for the next three years to be as follows (in
thousands):
2016 $ 3,893
2017 3,593
2018 229
$ 7,715
(k)
Acquisition-Related Intangible Assets (exclusive of
Logility’s treasury stock repurchases)
Acquisition-related intangible assets are stated at historical
cost and include acquired software and certain other intangible
assets with definite lives. The intangible assets are being
amortized over a period ranging from two to six years. For
2015, total amortization expense related to acquisition-related
intangible assets was approximately $970,000, with $394,000
included in operating expense and $576,000 included in cost of
license fees in the accompanying consolidated statements of
operations. For 2014, total amortization expense related to
acquisition-related intangible assets was approximately $561,000,
with $472,000 included in operating expense and $88,000 included in
cost of license fees in the accompanying consolidated statements of
operations. Total amortization expense related to
acquisition-related intangible assets was approximately $501,000
for 2013 and is included in operating expense in the accompanying
consolidated statements of operations.
Acquisition-Related Intangible Assets consist of the following
at April 30, 2015 and 2014 (in thousands):
2015 2014
Current
technology $ 3,342 $ 1,842
Customer
relationships 2,190 790
Non-Compete 290 —
Trademarks 76 76
5,898 2,708
Accumulated
amortization (3,150 ) (2,180 )
$ 2,748 $ 528
The Company
expects amortization expense for the next five years to be as
follows based on intangible assets as of April 30, 2015 (in
thousands):
2016 $ 890
2017 890
2018 254
2019 175
2020 175
Thereafter 364
$ 2,748
(l)
Goodwill and Other Intangibles
Goodwill
represents the excess of costs over fair value of assets of
businesses acquired. Goodwill and intangible assets acquired in a
purchase business combination and determined to have an indefinite
useful life are not amortized, but instead are tested for
impairment at least annually in accordance with the
Intangibles-Goodwill and Other Topic of the FASB Accounting
Standards Codification. The Company evaluates the carrying value of
goodwill annually and between annual evaluations if events occur or
circumstances change that would more likely than not reduce the
fair value of the reporting unit below its carrying amount. Such
circumstances could include, but are not limited to, (1) a
significant adverse change in legal factors or in business climate,
(2) unanticipated competition, or (3) an adverse action
or assessment by a regulator.
When
evaluating whether the goodwill is impaired, the Company compares
the fair value of the reporting unit to which the goodwill is
assigned to its carrying amount, including goodwill. The Company
identifies the reporting unit on a basis that is similar to its
method for identifying operating segments as defined by the Segment
Reporting Topic of the FASB Accounting Standards Codification. If
the carrying amount of a reporting unit exceeds its fair value,
then the amount of the impairment loss must be measured. This
evaluation is applied annually on each impairment testing date
(April 30) unless there is a triggering event present during an
interim period. The Company used the Income and Market approaches
to test for goodwill impairment as of the Valuation Date. The
methodology utilized to implement the Income approach was the
discounted cash flow (DCF) methodology. The methodologies utilized
to implement the Market approach were the comparable company
methodology (CCM) and the comparable transaction methodology (CTM).
The valuation approaches we utilize in determining the fair value
for each reporting unit were weighted 50%, 15%, and 35%, for the
DCF, CTM, and CCM, respectively. In order to determine the proper
weight given to each approach, the Company considers the
methodologies utilized to implement each approach and the overall
and industry-specific economic conditions and assumptions, which
could affect the quality of the underlying data supporting each
analysis.
The Company
considers the following valuation factors in connection with
performing annual impairment testing:
•
The nature of the business or entity, the risks to which it is
subject, and its historical patterns of growth;
•
The general economic outlook, the position of the industry in
the existing economy, and the position of the business or entity
within its industry;
•
The book value and general financial condition of the business
or entity;
•
The earnings history and earnings capacity of the business or
entity;
•
The dividend-paying capacity of the business or
entity;
•
The market prices of stocks of businesses engaged in related
activities, where such stocks are traded on an exchange or
over-the-counter;
•
Any recent sales of the common stock of the business and the
size of the block of stock to be valued;
•
The existence of undervalued tangible and intangible assets;
and
•
Other special factors and circumstances of the business or
entity that can be judged as important to the overall
value.
As noted
above, the DCF methodology was given the most weight. The material
assumptions utilized within this methodology were the long-term
growth rate, weighted average cost of capital, financial
projections, projected debt free cash flow and tax rate. The
assumptions used by the Company have not changed materially from
the prior year. In the event of impairment, the loss would be
calculated by comparing the implied fair value of reporting unit
goodwill to its carrying amount. In calculating the implied fair
value of goodwill, the fair value of the reporting unit is
allocated to all of the other assets and liabilities of that unit
based on their fair values. The excess of the fair value of a
reporting unit over the amount assigned to its other assets and
liabilities is the implied fair value of goodwill. The Company
performed its periodic review of this goodwill for impairment as of
April 30, 2015 and did not identify any goodwill impairment as
a result of the review.
The Company
applied the simplified goodwill impairment test for the fiscal
years ended April 30, 2014 and 2013, that permits companies to
perform a qualitative assessment based on economic, industry and
company-specific factors as the initial step in the annual goodwill
impairment test for all or selected reporting units. Based on the
results of the qualitative assessment, companies are only required
to perform Step 1 of the annual impairment test for a reporting
unit if the company concludes that it is not more likely than not
that the unit’s fair value is less than its carrying amount.
To the extent the Company concludes it is more likely than not that
a reporting unit’s estimated fair value is less than its
carrying amount, the two-step approach is applied. The first step
would require a comparison of each reporting unit’s fair
value to the respective carrying value. If the carrying value
exceeds the fair value, a second step is performed to measure the
amount of impairment loss, if any. The Company did not identify any
macroeconomic or industry conditions as of April 30, 2014 and
2013, that would indicate the fair value of the reporting units
were more likely than not to be less than their respective carrying
values. If circumstances change or events occur to indicate it is
more likely than not that the fair value of any reporting units
have fallen below their carrying value, the Company would test such
reporting unit for impairment.
Intangible
assets with estimable useful lives are required to be amortized
over their respective estimated useful lives to their estimated
residual values, and reviewed for impairment in accordance with the
Property, Plant, and Equipment Topic of the FASB Accounting
Standards Codification.
Goodwill
consisted of the following by segment (in
thousands):
Enterprise Resource Supply Chain IT Total
Balance at April 30,
2013 $ 1,812 $ 10,789 $ — $ 12,601
Goodwill related to the
Taylor Manufacturing Systems, USA, LLC Acquisition — 1,218 — 1,218
Balance at April 30,
2014 1,812 12,007 $ — 13,819
Goodwill related to the
MID Retail, Inc. Acquisition — 4,930 — 4,930
Balance at April 30,
2015 $ 1,812 $ 16,937 $ — $ 18,749
* Goodwill related to New
Generation Computing, Inc.
** Goodwill related to
Logility, Inc., Demand Management, Inc. and their
acquisitions
Intangible
Assets (including Acquisition-Related Intangible Assets) consisted
of the following by segment (in thousands):
Enterprise Resource Supply Chain IT Total
Balance at April 30,
2013 $ — $ 687 $ — $ 687
Intangibles related to
the Taylor Manufacturing Systems, USA, LLC Acquisition — 472 — 472
Amortization
expense — (625 ) — (625 )
Balance at April 30,
2014 — 534 — 534
Intangibles related to
the MID Retail, Inc. Acquisition — 3,190 — 3,190
Amortization
expense — (976 ) — (976 )
Balance at April 30,
2015 $ — $ 2,748 $ — $ 2,748
Goodwill and
intangible assets include the effects of applying purchase
accounting resulting from Logility’s stock repurchases in
prior years. Total amortization expense related to Logility Stock
Buy-back Step Acquisition and purchased software was approximately
$6,000, $64,000 and $75,000 for 2015, 2014 and 2013, respectively.
For purposes of the disclosure above, amounts related to the
buyback of Logility stock are presented as a component of the SCM
segment.
Intangible
assets related to Logility Stock Buy-back Step Acquisition and
purchased software consist of the following (in
thousands):
2015 2014
Distribution
Channel $ 75 $ 75
Customer
Relationships 477 477
Trademarks 155 155
707 707
Accumulated
amortization (707 ) (701 )
$ — $ 6
(m)
Income Taxes
The Company
accounts for income taxes using the asset and liability method.
Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(n) Use
of Estimates
The
preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, and disclosures of contingent assets and
liabilities, at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. On an ongoing basis, we evaluate our estimates, including,
but not limited to those related to collectability, bad debts,
capitalized software costs, goodwill, intangible asset impairment,
income taxes, allocation of fair values in acquisitions and
contingencies. We base our estimates on historical experience and
on various other assumptions that we believe to be reasonable under
the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Our actual results
could differ materially from these estimates under different
assumptions or conditions.
(o)
Stock Compensation Plans
The Company
has four stock-based employee compensation plans under which
options to purchase common stock of the Company were outstanding as
of April 30, 2015. Those plans are described more fully in
Note 7. In addition to two American Software plans, effective
July 9, 2009, the Company adopted the Logility, Inc. 1997
Stock Plan and Logility, Inc. 2007 Stock Plan as equity plans of
the Company in conjunction with the Company’s acquisition of
the shares of Logility common stock it did not previously
own.
The Company
recorded stock option compensation cost of approximately
$1,530,000, $1,509,000 and $1,476,000 and related income tax
benefits of approximately $542,000, $496,000 and $436,000 for the
years ended April 30, 2015, 2014 and 2013, respectively.
Stock-based compensation expense on current year grants is recorded
on a straight-line basis over the vesting period for the entire
award directly to additional paid-in capital.
Cash flows
resulting from the tax benefits generated by tax deductions in
excess of the compensation cost recognized for those options
(excess tax benefits) are classified as financing cash flows.
During the years ended April 30, 2015, 2014 and 2013, the
Company realized tax benefits from stock options generated in
previous and current periods resulting in approximately $384,000,
$611,000 and $131,000 of gross excess tax benefits which are
included as a component of cash flows from financing activities in
the accompanying 2015, 2014 and 2013 consolidated statements of
cash flows, respectively.
(p)
Impairment of Long-Lived Assets
The Company
reviews long-lived assets, such as property, plant, and equipment,
and purchased intangibles subject to amortization, for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the
carrying amount of an asset to estimated undiscounted future cash
flows expected to be generated by the asset. If the carrying amount
of an asset exceeds its estimated future cash flows, an impairment
charge is recognized by the amount by which the carrying amount of
the asset exceeds the fair value of the asset. Assets to be
disposed of by sale would be separately presented in the balance
sheet and reported at the lower of the carrying amount or fair
value less costs to sell, and are no longer depreciated. The assets
and liabilities of a group classified as held for sale would be
presented separately in the appropriate asset and liability
sections of the balance sheet.
(q)
Comprehensive Income
The
Comprehensive Income Topic of the FASB Accounting Standards
Codification establishes standards for reporting and presentation
of comprehensive income and its components in a full set of
financial statements.
The Company
did not have any other comprehensive income items for 2015, 2014,
or 2013.
(r)
Earnings per Common Share
The Company
has two classes of common stock of which Class B common shares are
convertible into Class A common shares at any time, on a
one-for-one basis. Under the Company’s Articles of
Incorporation, if dividends are declared, holders of Class A
common shares shall receive a $.05 dividend per share prior to the
Class B common shares receiving any dividend and holders of
Class A common shares shall receive a dividend at least equal
to Class B common shares dividends on a per share basis. As a
result, the Company has computed the earnings per share in
compliance with the Earnings Per Share Topic of the FASB Accounting
Standards Codification, which requires companies that have multiple
classes of equity securities to use the “two-class”
method in computing earnings per share.
For the
Company’s basic earnings per share calculation, the Company
uses the “two-class” method. Basic earnings per share
are calculated by dividing net earnings attributable to each class
of common stock by the weighted average number of shares
outstanding. All undistributed earnings are allocated evenly
between Class A and B common shares in the earnings per share
calculation to the extent that earnings equal or exceed $.05 per
share. This allocation is based on management’s judgment
after considering the dividend rights of the two-classes of common
stock, the control of the Class B shareholders and the
convertibility rights of the Class B shares to Class A shares.
If Class B shares convert to Class A shares during the period,
the distributed net earnings for Class B shares is calculated using
the weighted average common shares outstanding during the
period.
Diluted
earnings per share is calculated similarly to basic earnings per
share, except that the calculation includes the dilutive effect of
the assumed exercise of options issuable under the Company’s
stock incentive plans. For the Company’s diluted earnings per
share calculation for Class A shares, the Company uses the
“if-converted” method. This calculation assumes that
all Class B common shares are converted into Class A
common shares and, as a result, assumes there are no holders of
Class B common shares to participate in undistributed
earnings.
For the
Company’s diluted earnings per share calculation for Class B
shares, the Company uses the “two-class” method. This
calculation does not assume that all Class B common shares are
converted into Class A common shares. In addition, this method
assumes the dilutive effect of Class A stock options were
converted to Class A shares and the undistributed earnings are
allocated evenly to both Class A and B shares including
Class A shares issued pursuant to those converted stock
options. This allocation is based on management’s judgment
after considering the dividend rights of the two-classes of common
stock, the control of the Class B shareholders and the
convertibility rights of the Class B shares into Class A
shares.
The following
tables set forth the computation of basic earnings per common share
and diluted earnings per common share (in thousands except for per
share amounts), See Note 7 for total stock options outstanding and
potentially dilutive:
Basic
earnings per common share:
Year Ended Year Ended Year Ended
Class
A Class
B Class
A Class
B Class
A Class
B
Distributed
earnings $ 0.40 $ 0.40 $ 0.30 $ 0.30 $ 0.48 $ 0.48
Undistributed
earnings/(loss) (0.11 ) (0.11 ) 0.07 0.07 (0.10 ) (0.10 )
Total $ 0.29 $ 0.29 $ 0.37 $ 0.37 $ 0.38 $ 0.38
Distributed
earnings $ 10,301 $ 1,035 $ 7,584 $ 776 $ 11,796 $ 1,242
Undistributed
earnings/(loss) (2,914 ) (294 ) 1,786 185 (2,377 ) (250 )
Total $ 7,387 $ 741 $ 9,370 $ 961 $ 9,419 $ 992
Basic weighted average
common shares 25,696 2,587 25,049 2,587 24,586 2,587
Diluted
EPS for Class A common shares using the If-Converted
Method
Year Ended
April 30, 2015
Undistributed and Class A EPS*
Per basic $ 7,387 25,696 $ 0.29
Common stock
equivalents — 331
7,387 26,027 0.28
Class B
conversion 741 2,587
Diluted EPS for
Class A $ 8,128 28,614 $ 0.28
Year Ended
April 30, 2014
Undistributed and Class A EPS*
Per basic $ 9,370 25,049 $ 0.37
Common stock
equivalents — 475
9,370 25,524 0.37
Class B
conversion 961 2,587
Diluted EPS for
Class A $ 10,331 28,111 $ 0.37
Year Ended
April 30, 2013
Undistributed and Class A EPS*
Per basic $ 9,419 24,586 $ 0.38
Common stock
equivalents — 456
9,419 25,042 0.38
Class B
conversion 992 2,587
Diluted EPS for
Class A $ 10,411 27,629 $ 0.38
Diluted
EPS for Class B common shares using the Two-Class
Method
Year Ended
April 30, 2015
Undistributed
and Class B EPS*
Per basic $ 741 2,587 $ 0.29
Reallocation of
undistributed earnings from Class A shares to Class B
shares 4 —
Diluted EPS for Class
B $ 745 2,587 $ 0.29
Year Ended
April 30, 2014
Undistributed
and Class B EPS*
Per basic $ 961 2,587 $ 0.37
Reallocation of
undistributed earnings from Class A shares to Class B
shares (3 ) —
Diluted EPS for Class
B $ 958 2,587 $ 0.37
Year Ended
April 30, 2013
Undistributed and Class B EPS*
Per basic $ 992 2,587 $ 0.38
Reallocation of
undistributed earnings from Class A shares to Class B
shares 4 —
Diluted EPS for Class
B $ 996 2,587 $ 0.38
* Amounts adjusted for
rounding
(s)
Advertising
All
advertising costs are expensed as incurred. Advertising expenses,
which are included within sales and marketing expenses, were $2.1
million, $2.2 million and $2.0 million in fiscal 2015, 2014 and
2013, respectively.
(t)
Guarantees and Indemnifications
The Company
accounts for guarantees in accordance with the Guarantee Topic of
the FASB Accounting Standards Codification .
The Company
warrants to its customers that its software products will perform
in all material respects in accordance with the standard published
specifications in effect at the time of delivery of the licensed
products to the customer generally for 90 days after delivery
of the licensed products. Additionally, the Company warrants to its
customers that services will be performed consistent with generally
accepted industry standards or specific service levels through
completion of the agreed upon services. If necessary, the Company
will provide for the estimated cost of product and service
warranties based on specific warranty claims and claim history.
However, the Company has not incurred significant recurring expense
under product or service warranties. Accordingly, the Company has
no liabilities recorded for these agreements as of April 30,
2015 or 2014.
(u)
Industry Segments
The Company
operates and manages its business in three reportable segments. See
Note 9 of the Consolidated Financial Statements. |
