EXHIBIT 99.1
AMERICAN SOFTWARE REPORTS THIRD QUARTER FISCAL YEAR 2006 RESULTS
OPERATING EARNINGS INCREASE 298% DRIVEN BY LICENSE FEES GROWTH OF 32%
ATLANTA, March 6 /PRNewswire-FirstCall/ -- American Software, Inc. (Nasdaq:
AMSWA) today reported financial results for the third quarter of fiscal year
2006, achieving 20 consecutive quarters of profitability.
Key financial highlights for American Software include:
- Software license fees for the quarter ended January 31, 2006 were $5.0
million, an increase of 32% over the third quarter of fiscal 2005;
- Services and other revenues for the quarter ended January 31, 2006 were
$9.1 million, an increase of 7% over the third quarter of fiscal 2005;
- Maintenance revenues for the quarter ended January 31, 2006 were $6.3
million, an increase of 25% over the third quarter of fiscal 2005;
- Total revenues for the quarter ended January 31, 2006 were $20.4 million,
an increase of 17% over the third quarter of fiscal 2005; and
- Operating earnings for the quarter ended January 31, 2006 were $2.1
million, an increase of 298% over the third quarter of fiscal 2005.
GAAP net earnings were approximately $2.0 million or $0.08 per fully diluted
share for the third quarter of fiscal 2006 compared to $50,000 or negligible
earnings per fully diluted share for the same period last year. Adjusted net
earnings for the quarter ended January 31, 2006, which excludes acquisition
related intangibles costs, were $2.1 million or $0.08 per fully diluted share
compared to $129,000 or $0.01 per fully diluted share for the same period last
year.
Total revenues for the nine months ended January 31, 2006 were $56.2
million, a 22% increase compared to $45.9 million for the comparable period last
year. Software license fees for the nine month period were $13.4 million, a 51%
increase compared to $8.9 million during the same period last year. Services and
other revenues were $24.9 million, a 9% increase compared to $23.0 million in
the same period last year. Maintenance revenues were $17.9 million, a 27%
increase compared to $14.1 million in the same period last year. For the nine
months ended January 31, 2006, the Company reported operating earnings of
approximately $4.6 million, a 144% increase compared to operating earnings of
$1.9 million for the same period last year. GAAP net earnings were approximately
$3.8 million or $0.15 per fully diluted share for the nine months ended January
31, 2006 compared to $2.7 million or $0.11 per fully diluted share for the same
period last year. Adjusted net earnings year to date as of January 31, 2006,
which exclude acquisition related intangibles costs, write-down of a minority
investment and minority interest related to a tax benefit, were $4.5 million or
$0.18 earnings per fully diluted share, compared to $2.9 million or $0.12
earnings per fully diluted share for the same period last year.
The nine-month fiscal 2005 financial data included only the months of
October 2004 through January 2005 for revenue and expenses from the Demand
Management, Inc. subsidiary acquired by Logility, the Company's 88% owned
subsidiary, on September 30, 2004, whereas the entire nine-month period 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.
The overall financial condition of the Company remains strong, with cash and
investments of approximately $58.5 million and no debt as of January 31, 2006,
an increase of $1.3 million compared to October 31, 2005 and an increase of $1.6
million compared to January 31, 2005.
"American Software delivered an impressive 298% growth in operating earnings
for the third quarter and marked our 20th consecutive quarter of profitability
and positive cash flow," stated James C. Edenfield, president and CEO of
American Software. "Our 32% increase in license fees and 25% growth in
maintenance revenues, compared to the same quarter a year ago, underscore
American Software's commitment to deliver innovative solutions that provide our
customers with faster access to better information. We will continue to use our
financial strength to reinvest in the Company and expect to provide a tangible
benefit to our shareholders with a quarterly dividend."
Additional highlights for the third quarter of fiscal year 2006 include:
Customers
- Notable new and existing customers placing orders with American
Software, Inc. in the third quarter include: A.O. Smith, Blair
Corporation, Caremark, Casual Male, Dawn Foods, Fabricas de Calzado
Andrea, Games Workshop Ltd., Herbalife International, Infantino,
Klaussner Furniture Corporation, Pfizer, Plumbers Supplies of
Australia, Remy International, School Specialty, Tyco Safety Products,
Umbra Ltd., West Pharmaceutical, and VWR International.
- Software license agreements were signed with customers located in 10
countries: Australia, Belgium, Canada, El Salvador, Germany, Malaysia,
Mexico, New Zealand, the United Kingdom, as well as the United States.
- Logility announced that Hughes Supply, a leading distributor of
construction, repair and maintenance-related products, selected Logility
Voyager Solutions to manage its distribution-centric supply chain,
improve visibility, and enable the organization to evolve into a more
demand-driven enterprise.
- Consumer Goods Technology magazine recognized Logility customers as
industry leaders in the Consumer Goods Registry which defines the top
revenue performers across Food, Beverage, Apparel, Packaged Goods, and
other verticals. Eight of the top 25 companies recognized were Logility
customers.
- According to the Consumer Goods Technology Top 100 Registry published by
Consumer Goods Technology magazine, the Demand Solutions forecasting and
demand planning software from Demand Management, Inc. is used by
one-third of the largest CPG companies. Demand Solutions is used by four
out of the top 20 food companies and four of the top 20 footwear/apparel
brand owners. In the healthcare/pharmacy and housewares/appliances
categories, Demand Solutions claims half of all major producers as
current customers.
- Logility announced the details of Connections 2006: Your Ticket to Supply
Chain Success conference to be held March 15-17, 2006 in Nashville, TN.
Scheduled speakers include representatives from AMR Research, Associated
Grocers of Florida, Malt-O-Meal, Remy International, Shaw Industries,
Sony, Standard Motor Products, VWR International, Logility and others.
- New Generation Computing Inc. (NGC), a wholly owned subsidiary of the
Company announced that Blair Corporation has selected NGC's internet-
based sourcing and production system, e-SPS, to help streamline its
global sourcing and production of apparel and home furnishings. Blair
will install the software at its Warren, PA headquarters. e-SPS will
enable the company's global sourcing team to improve efficiencies and
gain visibility in the production lifecycle in real time via the
Internet.
- New Generation Computing Inc. announced that Wilsons The Leather Experts
Inc. ("Wilsons Leather") has selected NGC's product lifecycle management
(PLM) technology e-PDM, Internet Product Development Manager. Wilsons
Leather implemented NGC's e-SPS, internet-based sourcing and production
system, in 2002. Wilsons Leather recently installed the software at its
Minneapolis, MN headquarters. e-PDM will help Wilsons Leather to develop
products efficiently and quickly. e-PDM expands upon traditional product
data management software and offers merchandising, design, product
development, sourcing and manufacturing professionals the advanced tools
needed to better manage the entire product lifecycle.
- A.O. Smith Water Products Company, a leading manufacturer and marketer of
residential and commercial water heaters and hydronic boilers, selected
American Software's AsIrecall solution for the 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.
Products and Technology:
- Logility was named a SAP(R) Business One Partner to provide supply chain
solutions for the small and midsize business market in the United States.
Logility will integrate its Demand Solutions application suite with SAP
Business One to drive supply chain improvements for small and midsize
businesses (SMB). Demand Solutions will extend the core business
automation capabilities of SAP Business One and provide critical supply
chain expertise to help customers predict future demand and make informed
decisions to optimize inventory turns, customer service levels and
profitability.
- Food Logistics magazine recognized Logility in the FL 100, an annual
listing of the Top 100 technology suppliers to the food industry, for the
second consecutive year.
- Logility provided supply chain thought leadership during a recent Supply
Chain Power Hour webcast "S&OP: What's Hot this Winter." The webcast
featured speakers from AMR Research and Logility, who discussed the
latest S&OP trends and innovations.
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 88% 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)
Third Quarter Ended Nine Months Ended
January 31, January 31,
--------------------------------- ---------------------------------
Pct Pct
2006 2005 Chg. 2006 2005 Chg.
--------- --------- --------- --------- --------- ---------
Revenues:
License $ 4,952 $ 3,760 32% $ 13,385 $ 8,864 51%
Services & other 9,110 8,541 7% 24,911 22,957 9%
Maintenance 6,306 5,061 25% 17,872 14,123 27%
Total Revenues 20,368 17,362 17% 56,168 45,944 22%
Cost of Revenues:
License 747 1,366 (45)% 2,830 3,161 (10)%
Services & other 7,110 6,019 18% 18,602 16,072 16%
Maintenance 1,769 1,705 4% 4,976 4,205 18%
Total Cost of Revenues 9,626 9,090 6% 26,408 23,438 13%
Gross Margin 10,742 8,272 30% 29,760 22,506 32%
Operating expenses:
Research and development 2,280 2,023 13% 6,627 5,685 17%
Less: capitalized
development (537) (703) (24)% (1,771) (2,084) (15)%
Sales and marketing 3,675 3,275 12% 10,311 9,061 14%
General and administrative 3,117 3,066 2% 9,685 7,820 24%
Acquisition related
amortization of intangibles 88 79 11% 263 117 125%
Total operating expenses 8,623 7,740 11% 25,115 20,599 22%
Operating earnings 2,119 532 298% 4,645 1,907 144%
Interest income & Other,
net 1,371 832 65% 2,689 2,068 30%
Earnings before income taxes
and minority interest 3,490 1,364 156% 7,334 3,975 85%
Income tax provision 1,277 1,337 (4)% 2,759 1,337 106%
Minority interest (226) 23 nm (745) 43 nm
Net Earnings $ 1,987 $ 50 nm $ 3,830 $ 2,681 43%
Earnings per common share:
Basic: $ 0.08 $ - nm $ 0.16 $ 0.11 45%
Diluted: $ 0.08 $ - nm $ 0.15 $ 0.11 36%
Weighted average number of
common shares outstanding:
Basic 24,088 23,781 24,017 23,679
Diluted 25,349 25,189 25,229 25,094
Reconciliation of Adjusted
Net Income:
Net Earnings $ 1,987 $ 50 $ 3,830 $ 2,681
Acquisition related
amortization of intangibles 88 79 263 117
Writedown of minority
investment - - 160 100
Minority interest - Logility
Tax Benefit - - 270 -
Adjusted Net Earnings $ 2,075 $ 129 $ 4,523 $ 2,898
Adjusted Net Earnings per
Diluted Share $ 0.08 $ 0.01 $ 0.18 $ 0.12
nm- not meaningful
Selected Balance Sheet Items
(in thousands)
(Unaudited)
January 31,
-----------------------
2006 2005
---------- ----------
Cash and Short & Long term investments $ 58,511 $ 56,909
Accounts Receivable:
Billed 12,734 11,220
Unbilled 3,937 2,881
Total Accounts Receivable, net 16,671 14,101
Prepaids & Other 3,010 2,779
PP&E, net 7,789 7,675
Capitalized Software, net 6,857 7,310
Goodwill 11,120 10,505
Other Intangibles 2,016 2,250
Non-current Assets 1,565 3,780
Total Assets $ 107,539 $ 105,309
Accounts Payable $ 845 $ 1,374
Other Current Liabilities 7,448 6,366
Dividend Payable 1,694 1,670
Deferred Income Tax Liability 453 -
Deferred Revenues 14,754 13,345
Minority Interest 3,904 4,010
Shareholders' Equity 78,441 78,544
Total Liabilities & Shareholders' Equity $ 107,539 $ 105,309
SOURCE American Software, Inc.
-0- 03/06/2006
/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, Inc.
ST: Georgia
IN: CPR MLM
SU: ERN