Exhibit 99.1
AMERICAN SOFTWARE REPORTS THIRD QUARTER
OF FISCAL YEAR 2007 RESULTS
NET EARNINGS INCREASE 26% FOR THE QUARTER DRIVEN BY 16% GROWTH IN LICENSE FEE
REVENUE WHEN COMPARED TO THE PRIOR YEAR
ATLANTA (March 6, 2007) American Software, Inc. (Nasdaq: AMSWA) today reported
financial results for the third quarter of fiscal year 2007. These results mark
24 consecutive quarters of profitability for the Company.
Key third quarter financial highlights include:
o Total revenues for the quarter ended January 31, 2007 were $21.5
million, an increase of 5% over the third quarter of fiscal 2006;
o Software license fees for the quarter ended January 31, 2007 were $5.7
million, an increase of 16% over the third quarter of fiscal 2006;
o Services and other revenues for the quarter ended January 31, 2007
were $8.6 million; a decrease of 6% over the third quarter of fiscal
2006;
o Maintenance revenues for the quarter ended January 31, 2007 were $7.2
million, an increase of 14% over the third quarter of fiscal 2006; and
o Operating earnings for the quarter ended January 31, 2007 were $3.0
million, an increase of 40% over the third quarter of fiscal 2006.
GAAP net earnings were approximately $2.5 million or $0.10 per fully
diluted share for the third quarter of fiscal 2007 compared to $2.0 million or
$0.08 per fully diluted share for the same period last year. Adjusted net
earnings for the quarter ended January 31, 2007, which excludes stock option
compensation expense and acquisition related amortization of intangibles, were
$2.8 million or $0.11 per fully diluted share, compared to $2.1 million or $0.08
per fully diluted share for the same period last year, which excludes
acquisition related amortization of intangibles.
Total revenues for the nine months ended January 31, 2007 were $61.9
million or a 10% increase compared to $56.2 million for the comparable period
last year. Software license fees for the nine month period were $14.4 million or
an 8% increase compared to $13.4 million during the same period last year.
Services and other revenues were $27.1 million or a 9% increase compared to
$24.9 million in the same period last year. Maintenance revenues were $20.3
million or a 14% increase compared to $17.9 million in
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American Software Third Quarter of Fiscal Year 2007 Results Page 2
the same period last year. For the nine months ended January 31, 2007, the
Company reported operating earnings of approximately $6.4 million, a 38%
increase compared to operating income of $4.6 million for the same period last
year. GAAP net earnings were approximately $5.6 million or $0.22 per fully
diluted share for the nine months ended January 31, 2007 compared to $3.8
million or $0.15 per fully diluted share for the same period last year. Adjusted
net earnings year to date as of January 31, 2007, which excludes stock option
compensation expense and acquisition related amortization of intangibles, were
$6.5 million or $0.25 earnings per fully diluted share compared to $4.3 million
or $0.17 earnings per fully diluted share for the same period last year, which
excludes acquisition related amortization of intangibles and a write-down of
minority investment.
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 $70.0 million and no debt as of January
31, 2007. This is an increase in cash and investments of approximately $11.4
million compared to January 31, 2006 and a sequential increase of approximately
$4.7 million compared to October 31, 2006.
"We are pleased with American Software's strong performance for the
third quarter of fiscal 2007, delivering 26% growth in net earnings driven by a
16% increase in license fee growth," noted James C. Edenfield, president and CEO
of American Software. "With 24 consecutive quarters of profitability and
positive cash flow combined with our steady growth, American Software is well
positioned to support and expand our global customer base with innovative
enterprise application solutions and deep supply chain management expertise."
ADDITIONAL HIGHLIGHTS FOR THE THIRD QUARTER OF FISCAL YEAR 2007 INCLUDE:
CUSTOMERS:
o Notable new and existing customers placing orders with the Company in
the third quarter include: 3M Australia, Argo Tea, Barilla America, BJ
Services, Caremark, Clement Pappas & Co., Day-Timers, Inc., Dassult
Falcon Jet, Dick's Sporting Goods, EK Success Limited, Everlast
Worldwide, Goody's Family Clothing, John Paul Richards, Lion Brand
Yarn, NB Coatings, Newell/Rubbermaid, Sandoz Pty Ltd., Smithfield
Foods, Tyco Fire and Safety, Waterpik Technologies, Yellow River,
Yurman Designs, XMA Ltd., and Zotos International.
American Software Third Quarter of Fiscal Year 2007 Results Page 3
o During the quarter, software license agreements were signed with
customers located in 11 countries including: Australia, Canada,
Germany, Italy, Japan, Spain, Sweden, Venezuela, the United Arab
Emirates, the United Kingdom, and the United States.
o Logility customer, Brown Shoe Company received an Outstanding
Achievement award for supply chain excellence from Consumer Goods
Technology magazine.
o Logility announced the dates for Connections 2007: Supply Chain Power
Plays conference to be held March 21-23, 2007 at the InterContinental
Buckhead Hotel in Atlanta, GA. The annual event give attendees the
opportunity to network and share ideas with fellow supply chain
professionals, learn how to leverage and maintain best practices
within supply chain management and hear from industry experts and
peers.
o Logility continued its thought leadership initiative with the Supply
Chain Power Hour webcast, "Sunny Skies Ahead: Improve Forecast
Accuracy." The webcast featured the latest insight on improving
forecast accuracy to drive revenue and improve customer service.
o Logility customer Remy International joined Logility in an Institute
of Business Forecasting (IBF) webcast, "Remy International Jump Starts
Inventory Management." The webcast focused on how companies can
improve forecast accuracy and reduce excess inventory.
o New Generation Computing Inc. (NGC), a wholly owned subsidiary of the
Company, announced that Yellow River, a private-label women's wear
apparel company, has selected NGC to provide an end-to-end, integrated
apparel software solution. Yellow River wanted more control of its
processes, as well as greater transparency and visibility; the company
also required closer collaboration with overseas offices and vendors
in order to ensure fast, accurate deliveries to its customers. After
reviewing products from the industry's leading vendors, Yellow River
selected NGC's SQL Series Suite, which includes e-PDM software for
PLM, e-SPS(R) software for Global Sourcing, and RedHorse(R) software
for Enterprise Resource Planning (ERP).
o NGC announced that Trade Masters LLC has selected NGC's RedHorse ERP
software to help the company manage its rapidly growing furniture
import business. RedHorse will provide Trade Masters with a
comprehensive business management solution that includes order
management, import/production, accounting, inventory management and
exception reporting. As a current NGC customer, Trade Masters
successfully adapted an earlier NGC solution to run its case goods
importing business. However, with a growth rate of 40 to 50 percent
annually, Trade Masters' business has greatly increased in complexity,
with tighter deadlines, more SKUs and a need for closer communication
with overseas suppliers.
o Coffee Bean, Inc. purchased NGC's e-PDM software for Product Lifecycle
Management (PLM). Coffee Bean credits NGC's e-PDM software as a key
factor in helping the company make a successful transition from
captive manufacturing to outsourcing 70 percent of its production in
China and Thailand, with an office in Hong Kong.
PRODUCTS AND TECHNOLOGY:
o Demand Management, Inc. introduced Demand Solutions Pipeline, a
demand-driven application that provides secure, encrypted access to
supply chain data anywhere, anytime. The Web-enabled Pipeline presents
product information in an intuitive tree-and-branch representation
using plain-language terms, not cryptic item numbers. Users can review
entire product families or any other desired category by history,
forecast, customer forecast, budget or capacity. Information can by
organized by business unit, market segment or sales category,
depending on the needs of the individual user.
o Logility received top rankings from the readers of Consumer Goods
Technology magazine. For the seventh consecutive year, Logility scored
among the top five vendors for both supply chain planning and supply
chain execution in 2007. Logility also received high rankings for
Customer Experience, which is based on the reader's experience
implementing and using the software.
American Software Third Quarter of Fiscal Year 2007 Results Page 4
o Food Logistics magazine named Logility to the FL100, the magazine's
annual listing of the top 100 technology suppliers to the food
industry. Companies included in the list are selected based on the
input of Food Logistics readers, industry analysts and consultants.
This is the third consecutive year that Logility has been named to the
FL 100 which was first introduced in 2004.
o American Software announced that it has joined the IBM ISV Advantage
Initiative as a Premier Business Partner. Membership is by invitation
only, and is available to select midmarket independent software
vendors (ISV's) who adopt open architecture using IBM middleware
technologies on IBM eServer hardware. The ISV Advantage Initiative is
a program designed to provide ISVs with technical and marketing
support to help meet the specific information technology needs of
small and medium business (SMB) companies. Companies are seeking
solutions that help them better integrate processes and applications
internally and externally and allow them to quickly respond to
changing market opportunities on demand.
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, BP (British Petroleum), 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.
American Software Third Quarter of Fiscal Year 2007 Results Page 5
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 Third Quarter of Fiscal Year 2007 Results Page 6
AMERICAN SOFTWARE, INC.
Consolidated Statements of Operations Information
(In thousands, except per share data)
(Unaudited)
Third Quarter Ended Nine Months Ended
January 31, January 31,
------------------------------------ ------------------------------------
Pct Pct
2007 2006 Chg. 2007 2006 Chg.
---------- ---------- ---------- ---------- ---------- ----------
Revenues:
License $ 5,726 $ 4,952 16% $ 14,432 $ 13,385 8%
Services & other 8,577 9,110 (6)% 27,120 24,911 9%
Maintenance 7,175 6,306 14% 20,332 17,872 14%
---------- ---------- ---------- ---------- ---------- ----------
Total Revenues 21,478 20,368 5% 61,884 56,168 10%
---------- ---------- ---------- ---------- ---------- ----------
Cost of Revenues:
License 1,415 747 89% 4,474 2,830 58%
Services & other 6,022 7,110 (15)% 18,965 18,603 2%
Maintenance 1,823 1,769 3% 5,391 4,976 8%
---------- ---------- ---------- ---------- ---------- ----------
Total Cost of Revenues 9,260 9,626 (4)% 28,830 26,409 9%
---------- ---------- ---------- ---------- ---------- ----------
Gross Margin 12,218 10,742 14% 33,054 29,759 11%
---------- ---------- ---------- ---------- ---------- ----------
Operating expenses:
Research and development 2,408 2,280 6% 7,036 6,626 6%
Less: capitalized development (495) (537) (8)% (1,678) (1,771) (5)%
Sales and marketing 3,560 3,675 (3)% 10,600 10,311 3%
General and administrative 3,694 3,117 19% 10,430 9,685 8%
Acquisition related amortization of intangibles 88 88 0% 263 263 0%
---------- ---------- ---------- ---------- ---------- ----------
Total Operating Expenses 9,255 8,623 7% 26,651 25,114 6%
---------- ---------- ---------- ---------- ---------- ----------
Operating Earnings 2,963 2,119 40% 6,403 4,645 38%
---------- ---------- ---------- ---------- ---------- ----------
Interest Income & Other, Net 1,423 1,371 4% 3,494 2,689 30%
---------- ---------- ---------- ---------- ---------- ----------
Earnings Before Income Taxes and Minority Interest 4,386 3,490 26% 9,897 7,334 35%
Income Tax Expense (1,635) (1,277) 28% (3,813) (2,759) 38%
Minority Interest Expense (248) (226) 10% (513) (745) nm
---------- ---------- ---------- ---------- ---------- ----------
Net Earnings $ 2,503 $ 1,987 26% $ 5,571 $ 3,830 45%
========== ========== ========== ========== ========== ==========
Earnings per common share:
Basic: $ 0.10 $ 0.08 25% $ 0.23 $ 0.16 44%
========== ========== ========== ========== ========== ==========
Diluted: $ 0.10 $ 0.08 25% $ 0.22 $ 0.15 47%
========== ========== ========== ========== ========== ==========
Weighted average number of common shares outstanding:
Basic 24,676 24,088 24,573 24,017
Diluted 25,859 25,349 25,693 25,229
Reconciliation of Adjusted Net Earnings:
Net Earnings $ 2,503 $ 1,987 $ 5,571 $ 3,830
Acquisition related amortization of intangibles(1) 88 88 263 263
Write-down of minority investment(1) - - - 160
Stock option expense (1) 194 - 635 -
---------- ---------- ---------- ---------- ---------- ----------
Adjusted Net Earnings $ 2,785 $ 2,075 34% $ 6,469 $ 4,253 52%
========== ========== ========== ========== ========== ==========
Adjusted Net Earnings per Diluted Share $ 0.11 $ 0.08 38% $ 0.25 $ 0.17 47%
========== ========== ========== ========== ========== ==========
nm- not meaningful
(1) - Not income tax affected
American Software Third Quarter of Fiscal Year 2007 Results Page 7
AMERICAN SOFTWARE, INC.
Selected Balance Sheet Information
(In thousands)
(Unaudited)
January 31,
-------------------------
2007 2006
----------- -----------
Cash and Short & Long-term investments $ 69,918 $ 58,511
Accounts Receivable:
Billed 12,415 12,734
Unbilled 3,730 3,937
----------- -----------
Total Accounts Receivable,net 16,145 16,671
Prepaids & Other 2,591 3,009
PP&E,net 7,201 7,789
Capitalized Software, net 6,233 6,857
Goodwill 11,211 11,120
Other Intangibles 1,602 2,016
Non-current Assets 278 1,565
----------- -----------
Total Assets $ 115,179 $ 107,538
=========== ===========
Accounts Payable $ 1,093 $ 845
Other Current Liabilities 7,880 7,447
Dividend Payable 1,979 1,694
Deferred Income Tax Liability 462 76
Deferred Revenues 16,055 14,754
----------- -----------
Current Liabilities 27,469 24,816
Deferred Income Tax Liability 1,845 377
Minority Interest 4,748 3,904
Shareholders' Equity 81,117 78,441
----------- -----------
Total Liabilities & Shareholders' Equity $ 115,179 $ 107,538
=========== ===========
SOURCE American Software, Inc.
-0- 03/06/2007
/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)