Exhibit 99.1
American Software Reports Second Quarter Fiscal Year 2005 Results
Company Achieves Fifteen Consecutive Quarters of Profitability,
Revenue Increases 10% Compared to Prior Year Quarter
ATLANTA, Nov. 29 /PRNewswire-FirstCall/ -- American Software, Inc.
(Nasdaq: AMSWA) today reported its financial results for the second quarter of
fiscal year 2005, marking its fifteenth consecutive quarter of profitability.
Total revenues for the second quarter were $14.9 million compared to $13.5
million the same quarter last year. Software license fees were $2.5 million
compared to $2.9 million during the same period last year. Services and other
revenues were $7.6 million for the second quarter of fiscal year 2005 compared
to $6.1 million for the same period last year. Maintenance revenues were $4.7
million compared to $4.5 million during the same period last year. Operating
income was $810,000 for the second quarter of fiscal 2005 compared to $1.6
million during the same period last year. Net income for the second quarter was
$1.5 million or earnings per share (diluted) of $0.06, compared to $2.3 million
or earnings per share (diluted) of $0.09 the same quarter last year.
Total revenues for the six months ended October 31, 2004 were $28.6 million
compared to $26.6 million for the comparable period last year. Software license
fees for the six months period were $5.1 million compared to $5.6 million during
the same period last year. Services and other revenues were $14.4 million
compared to $12.0 million in the same period last year. Maintenance revenues
were $9.1 million unchanged from same period last year. For the six months ended
October 31, 2004, the Company reported net income of approximately $2.6 million
or earnings per share (diluted) of $0.10 compared to net income of $3.4 million
or earnings per share (diluted) of $0.14.
The overall financial condition of the Company remains strong, with cash and
investments of approximately $55.0 million and zero debt as of October 31, 2004.
During the quarter, the Company paid a $.07 per share quarterly dividend of
approximately $1.7 million. The Company's 87 percent owned subsidiary, Logility,
purchased approximately 124,000 of its shares on the open market under the
current stock buyback program at a cost of approximately $602,000 during the
quarter.
"We are pleased to achieve our fifteenth consecutive quarter of
profitability. Despite the continued global economic uncertainty and general
market conditions impacting capital expenditures in the technology sector,
American Software delivered a 10% increase in revenue," stated James C.
Edenfield, president and CEO of American Software. "We are excited about
Logility's acquisition of Demand Management, a St. Louis-based provider of
supply chain planning systems marketed under the Demand Solutions brand, during
the quarter and believe that it will provide potential growth opportunities to
the company."
The Demand Management acquisition is expected to be accretive to Logility's
earnings and cash flow within the next 12 months, and is expected to contribute
approximately $10 million in annual revenue, with 50% as a recurring component.
Second quarter 2005 financial results included one month of operations of Demand
Management, which reduced the Company's net income by approximately one cent per
share.
The acquisition provides more than 800 active customers in the growing small
and midsize business (SMB) market, which brings the Logility customer base to
approximately 1,100 and gives Logility what is believed to be the largest
installed base of supply chain planning customers among application software
vendors. Logility will continue to sell Demand Solutions as a separate product
line to the SMB market through Demand Management's existing value-added reseller
distribution network, which currently serves customers in more than 70
countries. Logility will also continue to offer the Logility Voyager
Solutions(TM) suite to its traditional target market of upper-midsize to Fortune
1000 companies with distribution-intensive supply chains.
Some of the unique assets that Logility acquires through this transaction
include:
Distribution Channel. Demand Management has a worldwide value-added
reseller (VAR) network of 23 organizations with 67 sales, implementation
and support resources. This network will continue to sell Demand Solutions
products, and Logility plans to introduce components of the Logility
Voyager Solutions suite into appropriate areas of this proven distribution
channel.
Customer Base. Demand Management has approximately 800 active customers in
over 70 countries in consumer goods, food and beverage, apparel, life
sciences, service parts and retail industries. The VAR channel and Demand
Management subsidiary of Logility will continue to support these loyal
Demand Solutions customers.
Technology. The Demand Solution products are designed for SMB companies and
include supply chain forecasting, demand planning, inventory planning and
replenishment planning. The Demand Solution Stores product enables
store-level forecast modeling and replenishment capabilities for retailers.
Additional highlights for the second quarter fiscal year 2005 include:
Customers
* Notable new and existing customers placing orders in the second quarter
include 3M Australia, Afrox, Continental General Tire, Crane Nuclear
Valve, Draka Elevator, Hunter Fan, Joseph A. Banks, JRH Biosciences, Land
O' Frost, Lindt & Sprungli, Tyco Safety Products, TXU, US Can, Verizon,
and WestPoint Stevens.
* During the quarter, the Company's wholly owned subsidiary, New Generation
Computing Inc. (NGC), announced that WestPoint Stevens Inc. selected
NGC's web-based sourcing and production system, e-SPS, along with the
e-PDM product data management module to streamline global sourcing and
production. With e-SPS and e-PDM, the WestPoint Stevens sourcing
operation will be able to complete steps in the production of in-process
and finished goods as well as gain end-to-end visibility of the entire
global production process.
* NGC announced this quarter that Roka Apparel selected NGC's RedHorse
Enterprise ERP system and The Production Manager (TPM) to manage the
company's full-package operations in its cutting-and-sewing facilities in
Honduras and offices in Jacksonville, FL. The software will help
streamline multiple processes, including customer order processing,
financial accounting, cut order management, fabric and trim inventory
control as well as shop floor control, incentive payroll, operator
performance analysis and factory cost analysis.
* NGC announced this quarter that Gold Toe Brands Inc. (GTB) deployed NGC's
e-Quality to monitor and maintain quality control of its global
production of hosiery products. The software complements the existing
e-SPS modules that GTB implemented last year and provides the company
with end-to-end visibility of its global supply chain.
* US Can licensed additional modules to enhance its purchase order tracking
and web-enabled vendor collaboration solution.
* 3M Australia licensed core ERP modules to run on its upgraded IBM eServer
zSeries equipment.
* Crane Nuclear Valve licensed core ERP modules to run on its upgraded IBM
eServer iSeries equipment.
* Aspen Pet Products, a private manufacturer and distributor of high
quality pet care products, implemented Logility Voyager Solutions(TM) in
less than five months for improved inventory management, forecast
accuracy and collaboration.
* Representatives of Smead Corporation, a leading manufacturer and
distributor of paper filing supplies and records management software and
long-time Logility customer, spoke at the 2004 Consumer Goods Technology
Conference in Orlando, Fla. Additional Logility customers speaking at the
event included VF Corporation, Cannondale Bicycle Corporation and Lindt &
Sprungli.
* Logility hosted another Supply Chain Power Hour webcast, "Service Parts
Smarts: Profit-driven Strategies for Service Parts Supply Chains," on
September 9. The webcast featured speakers from AMR Research, Remy
International and Logility, and addressed the challenges faced by
aftermarket service parts manufacturers, whose service organizations can
contribute 20-30% of total revenues and as much as 40% of profits.
* During the summer and fall of 2004, Demand Solutions users in the
Northeast U.S. had the opportunity to participate in the 13th annual DS
Northeast User Conference as well as a series of local "Town Meetings."
One hundred forty-two DS users representing 65 companies participated in
these regional activities.
Products and Technology
* At its annual Midwest User Conference in Lake Geneva, Wisconsin, American
Software, Inc. announced the release of e-Process Management, a new
web-based product that allows companies to configure and model any
well-defined business process. Built on American Software's e-
Applications architecture, e-Process Management enables messaging and
alerts via e-mail among internal and external trading partners. A
business process is composed of a group of events or tasks that will be
completed sequentially. As an event is completed, a notification is
electronically passed to the entity responsible for the next event. A
delinquent event is automatically detected by the system and an
electronic alert is passed as needed. e-Process Management can help
companies improve communications, track tasks and see the status of
business processes via the Internet, and decrease cycle times. The
product can be integrated to operate with components of any ERP system or
may operate in a standalone mode.
* Logility announced the dates for the Connections 2005: Catch the Wave --
Supply Chain ROI customer conference to be held March 16-18, 2005, in
Atlanta, Ga., at the InterContinental Hotel in Buckhead. The event will
give attendees exposure to best practices from industry peers, insight
from leading supply chain experts and guidance for preparing their
businesses for the next wave of demand-driven supply chain improvement.
* Start Magazine selected Logility for a 2004 Technology & Business Vision
Award, which honors leading-edge solution providers whose hardware or
software products have helped transform the manufacturing industry; and
Software Magazine named Logility to its Software 500 list of the world's
foremost software and services providers.
* Logility announced a business alliance with Adjoined Consulting, an
industry-focused, full-service management consulting, technology and
outsourcing firm. The partnership offers companies operational best
practices hosting and consulting services for Logility Voyager Solutions,
including collaborative demand, inventory and replenishment planning,
global sourcing, and transportation and warehouse management.
* Demand Management, Inc., a wholly owned subsidiary of Logility, re-
christened its flagship software suite from Demand Solutions to DS One.
The decision to rename the company's applications to DS One emphasizes
the power and flexibility of the software to deliver essential
functionality for the broad-based collaborative needs in today's demand
driven supply chains.
About American Software, Inc.
Headquartered in Atlanta, American Software develops, markets and supports
one of the industry's most comprehensive offerings of integrated business
applications, including supply chain management, Internet commerce, financial,
warehouse management and manufacturing packages. e-Intelliprise(TM) is an
ERP/supply chain management suite, which leverages Internet connectivity and
includes multiple manufacturing methodologies. American Software owns 87% of
Logility, Inc. (Nasdaq: LGTY), a leading supplier of collaborative solutions
to optimize the supply chain. Logility is proud to serve such customers as
Bissell, Huhtamaki UK, McCain Foods, Pernod-Ricard, Sigma Aldrich, and VF
Corporation. New Generation Computing Inc. (NGC), a wholly-owned subsidiary
of American Software, is a global software company that has 25 years of
experience developing and marketing business applications for apparel
manufacturers, brand managers, retailers and importers. Headquartered in
Miami, NGC's worldwide customers include Dick's Sporting Goods, Wilsons
Leather, Kellwood, Hugo Boss, Russell Corp., Ralph Lauren Childrenswear,
Haggar Clothing Company, Maidenform, William Carter and VF Corporation. For
more information on the Company, contact: American Software, 470 East Paces
Ferry Rd., Atlanta, GA 30305; (800) 726-2946 or (404) 261-4381. FAX:
(404) 264-5206. INTERNET: http://www.amsoftware.com or E-mail:
ask@amsoftware.com
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 to differ materially from those anticipated by statements
made herein. These factors include, but are not limited to, changes in general
economic conditions, technology and the market for the Company's products and
services, including economic conditions within the e-commerce markets; the
timely availability and market acceptance of these products and services; the
effect of competitive products and pricing; the uncertainty of the viability and
effectiveness of strategic alliances; and the irregular pattern of the Company's
revenues. For further information about risks the Company could experience as
well as other information, please refer to the Company's Form 10-K for the year
ended April 30, 2004 and other reports and documents subsequently filed with the
Securities and Exchange Commission. For more information, contact: Vincent C.
Klinges, Chief Financial Officer, American Software, Inc., (404) 264-5477 or
fax: (404) 237-8868.
e-Intelliprise is a trademark of American Software, Logility is a registered
trademark and Logility Voyager Solutions is a trademark of Logility, and
REDHORSE is a trademark of New Generation Computing. Other products mentioned in
this document are registered, trademarked or service marked by their respective
owners.
AMERICAN SOFTWARE, INC.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Second Quarter Ended Six Months Ended
----------------------------------- -----------------------------------
October 31, October 31,
Pct Pct
2004 2003 Chg. 2004 2003 Chg.
--------- --------- ---------- -------- --------- ----------
Revenues:
License $ 2,547 $ 2,933 (13%) $ 5,104 $ 5,573 (8%)
Services & other 7,637 6,121 25% 14,416 11,967 20%
Maintenance 4,693 4,488 5% 9,062 9,092 0%
-------- -------- -------- -------- -------- --------
Total Revenues 14,877 13,542 10% 28,582 26,632 7%
-------- -------- -------- -------- -------- --------
Cost of Revenues:
License 892 1,133 (21%) 1,795 2,165 (17%)
Services & other 5,334 3,880 37% 10,053 7,873 28%
Maintenance 1,342 1,145 17% 2,500 2,390 5%
-------- -------- -------- -------- -------- --------
Total Cost of Revenues 7,568 6,158 23% 14,348 12,428 15%
-------- -------- -------- -------- -------- --------
Gross Margin 7,309 7,384 (1%) 14,234 14,204 0%
-------- -------- -------- -------- -------- --------
Operating expenses:
Research and development 1,850 1,939 (5%) 3,662 3,939 (7%)
Less: capitalized development (711) (873) (19%) (1,381) (1,706) (19%)
Sales and marketing 2,891 2,573 12% 5,786 5,549 4%
General and administrative 2,431 2,141 14% 4,754 4,398 8%
Acquisition related amortization of intangibles 38 -- nm 38 -- nm
-------- -------- -------- -------- -------- --------
Total operating expenses 6,499 5,780 12% 12,859 12,180 6%
-------- -------- -------- -------- -------- --------
Operating income 810 1,604 (50%) 1,375 2,024 (32%)
-------- -------- -------- -------- -------- --------
Interest income & Other, net 603 731 (18%) 1,236 1,489 (17%)
Minority interest 68 (28) nm 20 (78) nm
-------- -------- -------- -------- -------- --------
Income before income taxes 1,481 2,307 (36%) 2,631 3,435 (23%)
Income taxes/(benefit) -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net Earnings $ 1,481 $ 2,307 (36%) $ 2,631 $ 3,435 (23%)
======== ======== ======== ======== ======== ========
Earnings per common share:
Basic:
$ 0.06 $ 0.10 (40%) $ 0.11 $ 0.15 (27%)
======== ======== ======== ======== ======== ========
Diluted:
$ 0.06 $ 0.09 (33%) $ 0.10 $ 0.14 (29%)
======== ======== ======== ======== ======== ========
Weighted average common shares outstanding
Basic 23,693 22,672 23,628 22,509
Diluted 25,138 24,642 25,090 24,659
nm- not meaningful
Consolidated Balance Sheet Information
(in thousands)
(Unaudited)
October 31,
--------------------
2004 2003
------- -------
Cash and Short & Long term investments $54,975 $62,900
Accounts Receivable:
Billed 8,916 5,985
Unbilled 2,674 2,125
------- -------
Total Accounts Receivable,net 11,590 8,110
Prepaids & Other 2,835 1,809
Non-current Assets 29,101 21,513
------- -------
Total Assets $98,501 $94,332
======= =======
Accounts Payable $ 1,461 $ 1,048
Other Current Liabilities 6,487 5,612
Deferred Revenues 10,297 8,636
Minority Interest 4,022 4,101
Shareholders' Equity 76,234 74,935
------- -------
Total Liabilities & Shareholders' Equity $98,501 $94,332
======= =======
SOURCE American Software, Inc.
-0- 11/29/2004
/CONTACT: Vincent C. Klinges, Chief Financial Officer of American
Software, Inc., +1-404-264-5477/
/Company News On-Call: http://www.prnewswire.com/comp/048263.html /
/Web site: http://www.amsoftware.com /
(AMSWA LGTY)
CO: American Software, Inc.; Logility; Demand Management; New Generation
Computing Inc.; NGC
ST: Georgia
IN: CPR STW
SU: ERN