American Software Reports Preliminary Fourth Quarter and Fiscal Year 2007 Results
Operating Earnings Increase 166% for the Fourth Quarter Driven by 48% Growth in License Fee Revenue when Compared to the Prior Year
Key fourth quarter financial highlights include:
- Total revenues for the quarter ended April 30, 2007 were $22.5 million, an increase of 10% over the fourth quarter of fiscal 2006;
- Software license fees for the quarter ended April 30, 2007 were $6.6 million, an increase of 48% over the fourth quarter of fiscal 2006;
- Services and other revenues for the quarter ended April 30, 2007 were $9.1 million; a decrease of 7% over the fourth quarter of fiscal 2006;
- Maintenance revenues for the quarter ended April 30, 2007 were $6.7 million, an increase of 8% over the fourth quarter of fiscal 2006; and
- Operating earnings for the quarter ended April 30, 2007 were $3.6 million, an increase of 166% over the fourth quarter of fiscal 2006.
GAAP net earnings were approximately $2.9 million or $0.11 per fully diluted share for the fourth quarter of fiscal 2007 compared to $1.2 million or $0.05 per fully diluted share for the same period last year. Adjusted net earnings for the quarter ended April 30, 2007, which excludes stock option compensation expense and acquisition-related amortization of intangibles, were $3.1 million or $0.12 per fully diluted share, compared to $1.4 million or $0.05 per fully diluted share for the same period last year, which excludes acquisition-related amortization of intangibles.
Key fiscal year financial highlights include:
- Total revenues for the year ended April 30, 2007 were $84.4 million or a 10% increase compared to $76.6 million for last year;
- Software license fees for the year ended April 30, 2007 were $21.1 million or an 18% increase compared to $17.9 million during last year;
- Services and other revenues for the year ended April 30, 2007 were $36.3 million or a 5% increase compared to $34.7 million last year;
- Maintenance revenues for the year ended April 30, 2007 were $27.0 million or a 12% increase compared to $24.1 million in fiscal year 2006; and
- Operating earnings for the year ended April 30, 2007 were $10.0 million, a 67% increase compared to operating income of $6.0 million for last year.
GAAP net earnings were approximately $8.4 million or $0.33 per fully diluted share for the year ended April 30, 2007 compared to $5.0 million or $0.20 per fully diluted share for last year. Adjusted net earnings for the year ended April 30, 2007, which excludes stock option compensation expense and acquisition related amortization of intangibles, were $9.6 million or $0.37 earnings per fully diluted share compared to $5.7 million or $0.23 earnings per fully diluted share for 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 $72.8 million and no debt as of April 30, 2007. This is an increase in cash and investments of approximately $10.1 million compared to April 30, 2006 and an increase of approximately $2.9 million compared to January 31, 2007.
“We are pleased with American Software’s strong performance for the fourth quarter of fiscal 2007, delivering 166% growth in operating earnings driven by a 48% increase in license fee growth,” noted James C. Edenfield, president and CEO of American Software. “This extends our track record of profitability and positive cash flow from operations to 25 consecutive quarters”
“We will continue to leverage our financial strength and organizational stability to reinvest in the Company to better serve our customers and deliver innovative solutions that provide faster, more flexible access to global supply chain and enterprise information. Additionally, we expect to continue providing a tangible benefit to our shareholders with a quarterly dividend.”
Highlights for the fourth quarter and fiscal year 2007 include:
- During the year, the Company signed a record 121 new customers and extended its relationship with an impressive number of existing customers. Software license agreements were signed with both new and existing customers located in 26 countries.
- Notable new and existing customers placing orders with the Company in the fourth quarter include: 3M South Africa, Arla Foods, Armour Eckrich, Caremark International, Continental Mills, Cooper Industries, Etude et Production Schlumberger, Joseph Banks Clothier, Inc., Kazoo, Inc., Lance, Inc., Maidenform, Inc., North American Lighting, Reliable Automatic Sprinkler, Siemens Medical Solutions, Targus, The Stanley Works, Verizon Wireless, VF Intimates, Wacoal, and Warnaco.
- The Logility Connections 2007: Supply Chain Power Plays conference was held in Atlanta, GA on March 21-23. The conference offered attendees the opportunity to hear best practices from industry peers, learn valuable tips for maximizing return on investment, and gain insight from leading supply chain experts that will provide them with a competitive advantage by improving supply chain visibility and agility.
- Logility customer Nutra Manufacturing received the 2007 Sailing to New Heights with Logility Award for supply chain excellence. The award, the highest honor given annually to a Logility customer, was presented to Nutra for their success in improving manufacturing planning processes. With the support of Logility Voyager Manufacturing Planning, Nutra gained service level improvements and an inventory reduction of 13%, equivalent to 16% improvement in inventory turns and millions in savings.
- The 2007 Logility Leadership Awards were presented to Logility customers, Associated Grocers of Florida, A. O. Smith Water Products Company, Brown Shoe Company and Cole-Parmer Instrument, at the Connections 2007 conference. The annual award program recognizes a select group of companies who have been the most innovative in their efforts to develop and implement collaborative supply chain processes that significantly improve operational performance through the deployment of Logility Voyager Solutions™.
- New Generation Computing Inc. (NGC), a wholly-owned subsidiary of the Company, announced that Goody’s Family Clothing, a leading retailer of moderately priced apparel, has chosen NGC’s e-PLM and e-SPS software for an end-to-end global sourcing and PLM solution. “We were impressed with the maturity and features of e-SPS and e-PLM, and we found that NGC’s PLM component was very strong,” said Joe Geist, director of IT systems, Goody’s Family Clothing. “With e-SPS and e-PLM, Goody’s will be able to streamline our processes and improve coordination between our offices and overseas vendors, with complete visibility of a style through the product lifecycle.”
Products and Technology:
- Logility continued to provide thought leadership to the manufacturing community with the Spring installment of its Supply Chain Power Hour Webcast series, “Close the Gap Between Supply and Demand.” The webcast provided participants with the latest insight on building a collaborative sales and operations planning (S&OP) process to continuously balance dynamic demand, supply, distribution and financial plans to achieve corporate objectives. Beth Enslow, senior vice president enterprise research and supply chain practice leader, AberdeenGroup, also provided an update on the latest S&OP research from AberdeenGroup.
- Logility was named a 2007 Top 100 Logistics IT Provider by Inbound Logistics magazine for a record 10th consecutive year. The selection process included comparison of more than 500 logistics IT providers and their ability to deliver solutions to meet the diverse needs of the Inbound Logistics’ readers.
- New Generation Computing Inc. (NGC) announced that a new executive dashboard module for the company’s RedHorse apparel ERP solution. RedHorse, a comprehensive Enterprise Resource Planning system designed especially for the apparel and sewn products industries, is part of NGC’s SQL Series suite of end-to-end solutions, which also includes e-SPS® software for global sourcing and visibility and e-PLM for product lifecycle management. Built on the Microsoft® .NET framework, the RedHorse dashboard provides a visual window into critical business data contained in RedHorse. At a glance, executives can view real-time data and track key performance indicators (KPIs) in sales, profits, inventory, accounts receivable, accounts payable, and many other areas of interest. Users can use the system-supplied metrics or easily create metrics of their own to help better measure and manage their business.
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™ 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. e-mail: firstname.lastname@example.org.
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.
Chief Financial Officer