Exhibit 99.1
FOR IMMEDIATE RELEASE
Financial Information Press Contact:
Vincent C. Klinges
Chief Financial Officer
American Software, Inc.
(404) 264-5477
AMERICAN SOFTWARE REPORTS SECOND QUARTER
OF FISCAL YEAR 2007 RESULTS
Net Earnings Increase 122% for the Quarter
ATLANTA (December7, 2006) American Software, Inc. (NASDAQ: AMSWA) today reported
financial results for the second quarter of fiscal year 2007,achieving 23
consecutive quarters of profitability. Keysecond quarter financial highlights
include:
o Total revenues for the quarter ended October 31, 2006 were $20.2
million, an increase of 6% over the second quarter of fiscal 2006;
o Software license fees for the quarter ended October 31, 2006 were $4.3
million, a decrease of 13% over the second quarter of fiscal 2006;
o Services and other revenues for the second quarter ended October 31,
2006 were $9.3 million;an increase of 14% over the second quarter of
fiscal 2006;
o Maintenance revenues for the quarter ended October 31, 2006 were$6.6
million, an increase of 11% over the second quarter of fiscal 2006;and
o Operating earnings for the quarter ended October 31, 2006 were $1.8
million, a decrease of 2% over the second quarter of fiscal 2006.
GAAP net earnings were approximately $1.8 million or $0.07 per fully
diluted share for the second quarter of fiscal 2007 compared to $819,000or
$0.03per fully diluted share for the same period last year. Adjusted net
earningsfor the quarter ended October 31, 2006, which excludesstock option
compensation expenseand acquisition related amortization of intangibles,were
$2.1 million or $0.08 per fully diluted share, compared to $1.1 million or $0.04
per fully diluted share for the same period last year, which excludesacquisition
related amortization of intangibles and a write-down of minority investment.
Total revenues for the six months ended October 31, 2006 were $40.4
million or a 13% increase compared to $35.8 million for the comparable period
last year. Software license fees for the six month period were $8.7 million or a
3% increase compared to $8.4 million during the same period last year. Services
and other revenues were $18.5 million or a 17% increase compared to $15.8
million in the same period last year. Maintenance revenues were $13.2 million or
a 14% increase compared to $11.6 million in the same period last year. For the
six months ended October 31, 2006, the Company reported operating earnings of
approximately $3.4 million, a 36% increase compared to operating income of $2.5
million for
--more--
the same period last year. GAAP net earnings were approximately $3.1 million or
$0.12 per fully diluted share for the six months ended October 31, 2006 compared
to $1.8 million or $0.07 per fully diluted share for the same period last year.
Adjusted net earnings year to date as of October 31, 2006,which excludesstock
option compensation expenseand acquisition related amortization of
intangibles,were $3.7 million or $0.14 earnings per fully diluted share compared
to $2.2 million or $0.09 earnings per fully diluted share for the same period
last year,which excludesacquisition related amortization of intangibles and a
write-down of minority investment.
American Software Second Quarter of Fiscal Year 2007 Results Page 2
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 $65.2 million and no debt as of October
31, 2006. This is an increase in cash and investments of approximately $8.0
million compared to October 31,2005 and a sequential increase of approximately
$1.3 million compared to April 30, 2006.
"American Software posted a strong performance for the second quarter
of fiscal 2007. We delivered an impressive 122% growth in net earnings and
extended the Company's track record of profitability and positive cash flow from
operations to 23 consecutive quarters,"stated James C. Edenfield, president and
CEO of American Software. "While license fees did not meet our growth target, we
expect stronger license fee performance during the second half of our fiscal
year."
ADDITIONAL HIGHLIGHTS FOR THE SECOND QUARTER OF FISCAL YEAR 2007 INCLUDE:
CUSTOMERS:
o Notable new and existing customers placing orders with the Company in
the second quarter include: American Racing Equipment, Anvil
International, BCBG Inc., Boots the Chemists, East African Breweries
Ltd., Everlast Worldwide, Ferrero, Evy of California, FerreroAustralia
PTY, Groupe SEB Holdings, Handgards, Home Depot Mexico, Kemira OyJ,
Mizuno USA, Snyders of Hanover, Procter & Gamble Asia Pte Ltd., Safeway
Inc., The Heat Group PTY, Thomson Learning, Tyco Healthcare and Wet
Seal, Inc.
o During the quarter, software license agreements were signed with
customers located in 14 countries including; Argentina, Australia,
Belgium, Canada, China, Denmark, Germany, Mexico, New Zealand,
Nicaragua, Singapore, South Africa, the United Kingdom, and the United
States.
--more--
o Logility customer, Shaw Industries Group, Inc. received the prestigious
2006 Technology & Business Award for excellence in the Consumer Goods
industry from Start-IT Magazine. The award honors manufacturers that
have helped their businesses succeed by overcoming a challenge or
solving critical business issues through the use of leading-edge
technology.
o Logility received outstanding customer satisfaction and loyalty ratings
in a recent survey conducted by Porter Research. In overall customer
satisfaction, Logility scored 100% which was higher than Porter's
Benchmark Satisfaction Metric of 91%. Logility customers also rated the
overall Logility relationship as 100% positive compared to Porter's
Benchmark Referenceable Metric of 86%. Based on the Porter Model for
Customer Loyalty, Logility customers appeared to be the most satisfied
with the customer service they get from Logility.
o Logility continued its thought leadership initiative during a recent
Supply Chain Power Hour: "Inventory Management: Tee Off Supply Chain
Success." The webcast featured speakers from the AberdeenGroup and
Logility.
American Software Second Quarter of Fiscal Year 2007 Results Page 3
o New Generation Computing Inc. (NGC), a wholly owned subsidiary of the
Company, announced that Evy of California, a leading girls apparel
brand, has chosen NGC's SQL Series software suite to manage all facets
of Evy's business, from apparel design to sourcing and order
fulfillment. Evy has grown rapidly in recent years through the addition
of new divisions and the expansion of its retail customer base, all
while transforming from a domestic manufacturer to a global importer.
Evy's homegrown software could no longer keep up with the demands of a
complex, fast-paced business -- and NGC(R) software provided a
flexible, integrated and cost-effective solution.
o NGC announced that its e-SPS solution for global apparel sourcing and
product lifecycle management (PLM) has helped Casual Male, the largest
retailer of big and tall men's apparel, receive recognition from RIS
News with a 2006 Fusion Award in the Supply Chain category.
o American Software announced that Boots the Chemist selected the
Company's e-Forms and Host-Access products for collaboration with their
vendors and suppliers over the Internet.
PRODUCTS AND TECHNOLOGY:
o Baseline magazine ranked Logility in the Top 25 of its "50
Fastest-Growing Software Companies" list. The magazine identifies the
50 companies that have experienced the quickest near-term growth out of
a list of 304 publicly held software companies and then ranks them
based on year-to-year revenue growth from 2004 to 2005, or the closest
12-month periods within a quarter.
o Logility was named one of Start-IT magazine's Hottest Companies of
2006. Chosen by Start-IT editors, the technology providers named to the
Hottest Companies list target the manufacturing industry and have shown
good financial results, important client wins, and significant events
and accomplishments during the past year that help set the company
apart from the competition.
o Software magazine included Logility in the "Software 500," a list of
the world's foremost software and services providers. Additionally,
Logility was featured in the list of Top 10 Software Companies
($30-$100 million in revenue) with the highest revenue growth in 2006.
o NGC announced major enhancements to its industry-leading products, used
by hundreds of customers around the world. NGC featured the 2006
releases of its RedHorse(R), e-PDM and e-SPS(R) solutions at Material
World New York, Sept. 26 - 28. Together these products comprise NGC's
SQL Series, the industry's only end-to-end suite of solutions for the
apparel and sewn goods industries.
--more--
American Software Second Quarter of Fiscal Year 2007 Results Page 4
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, 2006 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, Demand
Solutions is a registered trademark of Demand Management, 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 Second Quarter of Fiscal Year 2007 Results Page 5
AMERICAN SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION
(In thousands, except per share data)
(Unaudited)
SECOND QUARTER ENDED SIX MONTHS ENDED
OCTOBER 31, OCTOBER 31,
---------------------------------- --------------------------------
PCT PCT
2006 2005 CHG. 2006 2005 CHG.
-------- -------- -------- -------- -------- --------
Revenues:
License $ 4,333 $ 4,989 (13)% $ 8,706 $ 8,433 3%
Services & other 9,280 8,114 14% 18,543 15,801 17%
Maintenance 6,612 5,931 11% 13,157 11,566 14%
-------- -------- -------- -------- -------- --------
Total Revenues 20,225 19,034 6% 40,406 35,800 13%
-------- -------- -------- -------- -------- --------
Cost of Revenues:
License 1,605 1,008 59% 3,059 2,083 47%
Services & other 6,300 5,964 6% 12,944 11,493 13%
Maintenance 1,791 1,639 9% 3,568 3,207 11%
-------- -------- -------- -------- -------- --------
Total Cost of Revenues 9,696 8,611 13% 19,571 16,783 17%
-------- -------- -------- -------- -------- --------
Gross Margin 10,529 10,423 1% 20,835 19,017 10%
-------- -------- -------- -------- -------- --------
Operating expenses:
Research and development 2,313 2,218 4% 4,628 4,346 6%
Less: capitalized development (587) (617) (5)% (1,183) (1,234) (4)%
Sales and marketing 3,523 3,524 0% 7,040 6,636 6%
General and administrative 3,427 3,413 0% 6,735 6,568 3%
Acquisition related amortization of intangibles 87 88 (1)% 175 175 0%
-------- -------- -------- -------- -------- --------
Total Operating Expenses 8,763 8,626 2% 17,395 16,491 5%
-------- -------- -------- -------- -------- --------
Operating Earnings 1,766 1,797 (2)% 3,440 2,526 36%
-------- -------- -------- -------- -------- --------
Interest Income & Other, Net 1,466 201 629% 2,071 1,318 57%
-------- -------- -------- -------- -------- --------
Earnings Before Income Taxes and Minority Interest 3,232 1,998 62% 5,511 3,844 43%
Income Tax Expense (1,273) (758) 68% (2,178) (1,482) 47%
Minority Interest Expense (138) (421) (67)% (265) (519) nm
-------- -------- -------- -------- -------- --------
Net Earnings $ 1,821 $ 819 122% $ 3,068 $ 1,843 66%
======== ======== ======== ======== ======== ========
EARNINGS PER COMMON SHARE:
Basic: $ 0.07 $ 0.03 133% $ 0.13 $ 0.08 63%
======== ======== ======== ======== ======== ========
Diluted: $ 0.07 $ 0.03 133% $ 0.12 $ 0.07 71%
======== ======== ======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic 24,534 23,992 24,529 23,981
Diluted 25,645 25,167 25,628 24,921
RECONCILIATION OF ADJUSTED NET EARNINGS:
Net Earnings $ 1,821 $ 819 $ 3,068 $ 1,843
Acquisition related amortization of intangibles 87 88 175 175
Write-down of minority investment - 160 - 160
Stock option expense 217 - 442 -
-------- -------- -------- -------- -------- --------
Adjusted Net Earnings $ 2,125 $ 1,067 99% $ 3,685 $ 2,178 69%
======== ======== ======== ======== ======== ========
Adjusted Net Earnings per Diluted Share $ 0.08 $ 0.04 100% $ 0.14 $ 0.09 56%
======== ======== ======== ======== ======== ========
nm- not meaningful
American Software Second Quarter of Fiscal Year 2007 Results Page 6
AMERICAN SOFTWARE, INC.
SELECTED BALANCE SHEET INFORMATION
(In thousands)
(Unaudited)
OCTOBER 31,
---------------------
2006 2005
--------- ---------
Cash and Short & Long-term investments $ 65,212 $ 57,172
Accounts Receivable:
Billed 12,972 8,479
Unbilled 4,502 4,019
--------- ---------
Total Accounts Receivable,net 17,474 12,498
Prepaids & Other 2,909 2,642
PP&E,net 7,362 7,737
Capitalized Software, net 6,373 6,597
Goodwill 11,211 11,120
Other Intangibles 1,732 2,126
Deferred Income Tax Asset- long-term - 394
Non-current Assets 295 1,505
--------- ---------
Total Assets $ 112,568 $ 101,791
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Accounts Payable $ 1,109 $ 887
Other Current Liabilities 6,423 5,124
Dividend Payable 1,967 1,680
Deferred Income Tax Liability -Short Term 174 294
Deferred Revenues 17,321 13,430
--------- ---------
Current Liabilities 26,994 21,415
Deferred Income Tax Liability -Long Term 1,384 -
Minority Interest 4,467 3,339
Shareholders' Equity 79,723 77,037
--------- ---------
Total Liabilities & Shareholders' Equity $ 112,568 $ 101,791
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