Exhibit 99.1
AMERICAN SOFTWARE REPORTS SECOND QUARTER FISCAL YEAR 2006 RESULTS
LICENSE FEES INCREASE 96% AND OPERATING EARNINGS INCREASE 121%
ATLANTA, Dec. 5 /PRNewswire-FirstCall/ -- American Software, Inc.
(Nasdaq: AMSWA) today reported financial results for the second quarter of
fiscal year 2006 marking its nineteenth consecutive quarter of profitability.
Key financial highlights for American Software include:
- Software license fees for the quarter ended October 31, 2005 were $5.0
million, an increase of 96% over the second quarter of fiscal 2005;
- Services and other revenues for the quarter ended October 31, 2005 were
$8.1 million, an increase of 6% over the second quarter of fiscal 2005;
- Maintenance revenues for the quarter ended October 31, 2005 were $5.9
million, an increase of 26% over the second quarter of fiscal 2005;
- Total revenues for the quarter ended October 31, 2005 were $19.0
million, an increase of 28% over the second quarter of fiscal 2005; and
- Operating earnings for the quarter ended October 31, 2005 were $1.8
million, an increase of 121% over the second quarter of fiscal 2005.
GAAP net earnings were $813,000 or $0.03 per fully diluted share for the
second quarter of fiscal 2006 compared to $1.5 million or $0.06 per fully
diluted share for the same period last year. Adjusted net earnings for the
quarter ended October 31, 2005, which excludes the acquisition related
intangibles costs, a write-down of a minority investment and minority interest
expense related to a tax benefit, were $1.3 million or $0.05 per fully diluted
share compared to $1.6 million or $0.06 per fully diluted share for the same
period last year.
Total revenues for the six months ended October 31, 2005 were $35.8 million
or a 25% increase compared to $28.6 million for the comparable period last year.
Software license fees for the six months period were $8.4 million or a 65%
increase compared to $5.1 million during the same period last year. Services and
other revenues were $15.8 million or a 10% increase compared to $14.4 million in
the same period last year. Maintenance revenues were $11.6 million or a 28%
increase compared to $9.1 million in the same period last year. For the six
months ended October 31, 2005, the Company reported operating earnings of
approximately $2.5 million, an 83% increase compared to operating income of $1.4
million for the same period last year. GAAP net earnings were approximately $1.8
million or $0.07 per fully diluted share for the six months ended October 31,
2005 compared to $2.6 million or $0.10 per fully diluted share for the same
period last year. Adjusted net earnings year to date as of October 31, 2005 were
$2.4 million or $0.10 earnings per fully diluted share compared to $2.8 million
or $0.11 earnings per fully diluted share for the same period last year.
The second quarter and six-month fiscal 2005 financial data included only
the month of October 2005 for revenue and expenses from the Demand Management,
Inc. subsidiary acquired by Logility, the Company's 89% owned subsidiary, on
September 30, 2004, whereas the entire three-month and six-month periods in
fiscal 2006 included revenue and expenses from Demand Management.
The Company is including 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 and may be
different from non-GAAP net earnings and non-GAAP per share measures used by
other companies. The Company believes that this presentation of 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.
"With an impressive growth in license fees of 96%, we delivered a 121%
increase in operating income for the second quarter," stated James C. Edenfield,
president and CEO of American Software. "This quarter's positive results
extended the Company's track record of profitability and positive operating cash
flow to 19 consecutive quarters. We will continue to use our financial strength
to reinvest in the Company and provide a tangible benefit to our shareholders
with a quarterly dividend."
The overall financial condition of the Company remains strong with cash and
investments of approximately $57.2 million and no debt as of October 31, 2005.
Additional highlights for the second quarter of fiscal year 2006 include:
Customers
- Notable new and existing customers placing orders in the second quarter
include: Allegheny Energy Service, A.O. Smith Water Products, A/X Armani
Exchange, Caremark, Cavendish Farms, Hooker Furniture, Hughes Supply,
Mendocino Forest Products, Murad, National Railroad Passenger
Corporation, NCED, Novar Electrical, Ruiz Food Products, Shaw Industries,
St. Michelle Wine, U.S. Facilities Management, and Wrigley Chewing Gum
Company (China) Ltd.
- During the quarter, software license agreements were signed with
customers located in seven countries including Brazil, Canada, China,
Italy, Mexico, and the United Kingdom, as well as the United States.
- Logility, the Company's 89% owned subsidiary, provided supply chain
thought leadership during a standing room only session on "Performance
Management - An Important Link in your Supply Chain" presented with
Logility customer, A.O. Smith Water Products, at the APICS 2005
International Conference and Exposition.
- Results from the most recent Logility customer satisfaction survey were
announced. The results indicated overall high approval of the Logility
customer support experience and provided insight into the key motivations
leading customer to upgrade to the latest version of Logility Voyager
Solutions(TM) including performance management, Sales and Operations
Planning, supply optimization, global sourcing and transportation
optimization.
- Logility announced Standard Motor Products' rollout of Logility Voyager
Solutions to meet new inventory management demands brought on by its
acquisition of the Engine Management Division of Dana Corporation. With
Logility, Standard Motor Products will be better able to proactively
monitor supply chain performance and automate collaboration with key
customers and suppliers.
- Aberdeen Group, a leading industry research firm, highlighted a Logility
aftermarket service parts customer in its recent "Best Practices in Sales
and Operations Planning" report. The Logility customer was selected for
their success in integrating demand planning, supply optimization and
reverse logistics. The customer uses Logility Voyager Solutions(TM) for
Demand Planning, Inventory Planning, Supply Planning and Global Sourcing
to help manage inventory levels and the challenges of their complex
global supply chain.
- Remy International received a 2005 Technology & Business award from Start
Magazine. The award honors manufacturers that have solved critical
business issues with the use of technology. Remy implemented Logility
Voyager Solutions to reduce demand volatility and improve factory
scheduling; generate a one-number forecast for its business; decrease
inventory; and streamline the sales and operations planning process.
Products and Technology:
- The Company announced the availability of AsIrecall for seamless
integration of document management. AsIrecall is fully integrated with
the Company's ERP systems enabling the storing, retrieval, viewing,
printing, faxing and e-mailing of documents and reports. Documents can be
stored in a variety of file types (TIFF, JPG, BMP, PDF, DOC, HTML) and
EDI files can be converted to documents that can be viewed.
- New Generation Computing Inc. (NGC), a wholly owned subsidiary of
American Software, announced the availability of its shop floor control
suite in simplified Chinese.
- Demand Management, Inc. a wholly owned subsidiary of Logility, Inc,
announced that Demand Solutions(R) Forecast Management and Demand
Solutions Requirements Planning are available for the Microsoft SQL
Server database, making the company's DS One forecasting platform even
more flexible.
- Logility announced Connections 2006: Your Ticket to Supply Chain Success
conference to be held March 15-16, 2006 in Nashville, Tennessee at the
Loews Vanderbilt Hotel. 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 success with
demand-driven supply chain initiatives.
- Logility held its latest Supply Chain Power Hour webcast on "Best
Practices in Sales and Operations Planning (S&OP)." The webcast helped
companies understand how S&OP best practices can help balance and
synchronize operational plans to achieve corporate objectives, stay
competitive, increase profitability, expand market share and drive
customer service excellence. Speakers participated from Logility and the
Aberdeen Group.
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 89% of
Logility, Inc. (Nasdaq: LGTY), a leading provider of collaborative supply chain
solutions that help small, medium, large and Fortune 1000 companies realize
substantial bottom-line results in record time. Logility is proud to serve such
customers as Avery Dennison Corporation, Bissell, BP (British Petroleum),
Huhtamaki UK, Hyundai Motor America, Leviton Manufacturing Company, McCain
Foods, Pernod-Ricard, Sigma Aldrich and Under Armour Performance Apparel. 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: 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
Company's ability to satisfy in a timely manner all 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; the challenges and risks associated with
integration of acquired product lines and companies; 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, 2005 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
2005 2004 Chg. 2005 2004 Chg.
---------- ---------- ---------- ---------- ---------- ----------
Revenues:
License $ 4,989 $ 2,547 96% $ 8,433 $ 5,104 65%
Services & other 8,114 7,637 6% 15,801 14,416 10%
Maintenance 5,931 4,693 26% 11,566 9,062 28%
Total Revenues 19,034 14,877 28% 35,800 28,582 25%
Cost of Revenues:
License 1,006 892 13% 2,080 1,795 16%
Services & other 5,963 5,334 12% 11,492 10,053 14%
Maintenance 1,640 1,342 22% 3,208 2,500 28%
Total Cost of Revenues 8,609 7,568 14% 16,780 14,348 17%
Gross Margin 10,425 7,309 43% 19,020 14,234 34%
Operating expenses:
Research and development 2,219 1,850 20% 4,347 3,662 19%
Less: capitalized
development (616) (711) (13)% (1,233) (1,381) (11)%
Sales and marketing 3,523 2,891 22% 6,635 5,786 15%
General and administrative 3,421 2,431 41% 6,576 4,754 38%
Acquisition related
amortization of intangibles 87 38 129% 175 38 361%
Total operating expenses 8,634 6,499 33% 16,500 12,859 28%
Operating earnings 1,791 810 121% 2,520 1,375 83%
Interest income & Other, net 201 603 (67)% 1,318 1,236 7%
Earnings before income taxes
and minority interest 1,992 1,413 41% 3,838 2,611 47%
Income tax provision 758 - nm 1,482 - nm
Minority interest (421) 68 nm (519) 20 nm
Net Earnings $ 813 $ 1,481 (45)% $ 1,837 $ 2,631 (30)%
Earnings per common share:
Basic: $ 0.03 $ 0.06 (50)% $ 0.08 $ 0.11 (27)%
Diluted: $ 0.03 $ 0.06 (50)% $ 0.07 $ 0.10 (30)%
Weighted average number of
common shares outstanding
Basic 23,992 23,693 23,628 23,628
Diluted 25,167 25,138 24,921 25,090
Reconciliation of Adjusted Net
Income:
Net Earnings $ 813 $ 1,481 $ 1,837 $ 2,631
Acquisition related
amortization of intangibles 87 38 175 38
Write-down of minority
investment 160 100 160 100
Minority interest - Logility
Tax Benefit 270 - 270 -
Adjusted Net Earnings $ 1,330 $ 1,619 $ 2,442 $ 2,769
Adjusted Net Earnings per
Diluted Share $ 0.05 $ 0.06 $ 0.10 $ 0.11
nm- not meaningful
Selected Balance Sheet Items
(in thousands)
October 31,
------------------------
2005 2004
----------- ----------
(Unaudited)
Cash and Short & Long term investments $ 57,172 $ 54,975
Accounts Receivable:
Billed 8,479 8,916
Unbilled 4,027 2,674
Total Accounts Receivable, net 12,506 11,590
Prepaids & Other 2,643 2,835
PP&E, net 7,737 7,696
Capitalized Software, net 6,754 6,966
Goodwill 10,811 10,586
Other Intangibles 2,276 2,362
Deferred Income Taxes 393 -
Non-current Assets 1,505 1,491
Total Assets $ 101,797 $ 98,501
Accounts Payable $ 887 $ 1,461
Other Current Liabilities 7,111 6,486
Deferred Revenues 13,430 10,297
Minority Interest 3,355 4,022
Shareholders' Equity 77,014 76,235
Total Liabilities & Shareholders'
Equity $ 101,797 $ 98,501
SOURCE American Software
-0- 12/05/2005
/CONTACT: Financial Information, 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)