UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) |
December 3, 2015 |
AMERICAN SOFTWARE, INC. |
(Exact name of registrant as specified in its charter) |
Georgia |
0-12456 |
58-1098795 |
||
(State or other jurisdiction |
(Commission File |
(IRS Employer |
470 East Paces Ferry Road, N.E. Atlanta, Georgia |
30305 |
|
(Address of principal executive offices) |
(Zip Code) |
Registrant's telephone number, including area code | (404) 261-4381 |
Former name or former address, if changed since last report: Not applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
SECTION 2 – FINANCIAL INFORMATION
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for American Software, Inc. for the quarter ended October 31, 2015 and certain forward-looking statements, as presented in a press release on December 3, 2015. The information in this report shall be deemed incorporated by reference into any registration statement heretofore or hereafter filed under the Securities Act of 1933, as amended, except to the extent that such information is superseded by information as of a subsequent date that is included in or incorporated by reference into such registration statement. The information in this report shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.
SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
The following Exhibit is filed as part of this Report:
Exhibit No. |
Description |
|
99.1 | Press Release of American Software, Inc., December 3, 2015 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
AMERICAN SOFTWARE, INC. |
|||
|
(Registrant) |
|||
Date: | December 3, 2015 | By: |
/s/ Vincent C. Klinges |
|
Vincent C. Klinges |
||||
Chief Financial Officer |
2
Exhibit 99.1
American Software Reports Preliminary Second Quarter of Fiscal Year 2016 Results
License Fee Revenues Increase 85%, Total Revenue Increases 18% and Operating Earnings Increase 141% for the Quarter
ATLANTA--(BUSINESS WIRE)--December 3, 2015--American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the second quarter of fiscal 2016. The Company increased License Revenue by 85% and Total Revenues by 18% driving a 141% increase in Operating Earnings and an 83% increase in Net Earnings for the second quarter.
Key second quarter financial metrics:
Key fiscal 2016 year to date financial highlights:
The Company is including Annual Contract Value (ACV), EBITDA, adjusted EBITDA, 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-compliant financial information 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 Annual Contract Value (ACV), EBITDA, adjusted EBITDA, 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 Annual Contract Value (ACV) is a forward-looking operating measure used by management to better understand cloud services (SaaS and other related cloud services) revenue growth trends within the Company’s business as it reflects the Company’s current estimate of revenue to be generated under the existing client contracts in the forward 12-month period.
The overall financial condition of the Company remains strong, with cash and investments of approximately $72.1 million as of October 31, 2015. During the second quarter of fiscal 2016, the Company distributed approximately $2.9 million in shareholder dividends. On November 12, 2015, the Company’s Board of Directors declared a quarterly dividend of $0.10 per share payable to the Class A and Class B Common Shareholders of record at the close of business on February 12, 2016. The dividend will be paid on or about February 26, 2016.
“Fiscal year 2016 continues to gain momentum across all revenue streams. During the second quarter fiscal 2016, we grew license revenue by 85% and total revenues by 18% driving a 141% increase in operating earnings compared to the same period of the prior year,” said Mike Edenfield, president and CEO of American Software. “Both new and existing customers are investing to improve their supply chain performance and achieve tangible business benefits from their initiatives in the form of lower costs, better service and improved visibility across increasingly complex and global networks. We welcomed 10 new customers during the quarter and signed software agreements with customers in 10 countries.”
Additional highlights for the second quarter of fiscal 2016 include:
Customers & Channels
Company & Technology
About American Software, Inc.
Atlanta-based American Software (NASDAQ: AMSWA) provides demand-driven supply chain management and enterprise software solutions, backed by more than 40 years of industry experience, that drive value for companies regardless of market conditions. Logility, Inc., a wholly-owned subsidiary of American Software, is a leading provider of collaborative solutions to optimize the supply chain. Logility Voyager Solutions™ is a complete supply chain and retail optimization solution suite that features a performance monitoring architecture and provides supply chain visibility; demand, inventory and replenishment planning; Sales and Operations Planning (S&OP); supply and inventory optimization; manufacturing planning and scheduling; retail merchandise planning and allocation; and transportation planning and management. Logility customers include Abercrombie & Fitch, Big Lots, Parker Hannifin, Verizon Wireless, and VF Corporation. Demand Management, Inc., a wholly-owned subsidiary of Logility, delivers supply chain solutions to small and midsized manufacturers, distributors and retailers. Demand Management’s Demand Solutions® suite is widely deployed and globally recognized for forecasting, demand planning and point-of-sale analysis. Demand Management serves customers such as AutomationDirect.com, Campbell Hausfeld and Lonely Planet. New Generation Computing® (NGC®), a wholly-owned subsidiary of American Software, is a leading provider of PLM, supply chain management, ERP and product testing software and services for brand owners, retailers and consumer products companies. NGC customers include A|X Armani Exchange, Aeropostale, Billabong, Carter’s, Casual Male, Hugo Boss, Jos. A. Bank, FGL Group, Athletica, Marchon Eyewear, and Swatfame. For more information about American Software, named one of the 100 Most Trustworthy Companies in America by Forbes Magazine, please visit www.amsoftware.com, call (800) 726-2946 or email: 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 current Form 10-K 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.
Logility is a registered trademark and Logility Voyager Solutions is a trademark of Logility, Inc.; Demand Solutions is a registered trademark of Demand Management, Inc.; and NGC and New Generation Computing are registered trademarks of New Generation Computing, Inc. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.
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, | ||||||||||||||||||||||||
2015 | 2014 | Pct Chg. | 2015 | 2014 | Pct Chg. | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
License | $ | 5,563 | $ | 3,012 | 85% | $ | 10,439 | $ | 7,380 | 41% | |||||||||||||||
Services & other | 13,463 | 11,794 | 14% | 27,308 | 22,786 | 20% | |||||||||||||||||||
Maintenance | 10,044 | 9,771 | 3% | 20,181 | 19,268 | 5% | |||||||||||||||||||
Total Revenues | 29,070 | 24,577 | 18% | 57,928 | 49,434 | 17% | |||||||||||||||||||
Cost of Revenues: | |||||||||||||||||||||||||
License | 2,002 | 1,763 | 14% | 3,929 | 3,499 | 12% | |||||||||||||||||||
Services & other | 9,923 | 8,543 | 16% | 19,374 | 16,338 | 19% | |||||||||||||||||||
Maintenance | 2,248 | 2,175 | 3% | 4,411 | 4,156 | 6% | |||||||||||||||||||
Total Cost of Revenues | 14,173 | 12,481 | 14% | 27,714 | 23,993 | 16% | |||||||||||||||||||
Gross Margin | 14,897 | 12,096 | 23% | 30,214 | 25,441 | 19% | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||
Research and development | 3,589 | 3,478 | 3% | 7,155 | 6,852 | 4% | |||||||||||||||||||
Less: capitalized development | (1,173) | (668) | 76% | (1,990) | (846) | 135% | |||||||||||||||||||
Sales and marketing | 5,465 | 4,574 | 19% | 10,698 | 9,218 | 16% | |||||||||||||||||||
General and administrative | 3,620 | 3,161 | 15% | 7,067 | 6,376 | 11% | |||||||||||||||||||
Provision for doubtful accounts | 0 | 65 | na | 0 | 107 | na | |||||||||||||||||||
Amortization of acquisition-related intangibles |
68 | 107 | (36%) | 136 | 192 | (29%) | |||||||||||||||||||
Total Operating Expenses | 11,569 | 10,717 | 8% | 23,066 | 21,899 | 5% | |||||||||||||||||||
Operating Earnings | 3,328 | 1,379 | 141% | 7,148 | 3,542 | 102% | |||||||||||||||||||
Interest Income & Other, Net | 133 | 489 | (73%) | 436 | 795 | (45%) | |||||||||||||||||||
Earnings Before Income Taxes | 3,461 | 1,868 | 85% | 7,584 | 4,337 | 75% | |||||||||||||||||||
Income Tax Expense | 1,308 | 693 | 89% | 2,859 | 1,628 | 76% | |||||||||||||||||||
Net Earnings | $ | 2,153 | $ | 1,175 | 83% | $ | 4,725 | $ | 2,709 | 74% | |||||||||||||||
Earnings per common share: (1) | |||||||||||||||||||||||||
Basic | $ | 0.08 | $ | 0.04 | 100% | $ | 0.16 | $ | 0.10 | 60% | |||||||||||||||
Diluted | $ | 0.07 | $ | 0.04 | 75% | $ | 0.16 | $ | 0.09 | 78% | |||||||||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||||||||
Basic | 28,660 | 28,270 | 28,637 | 28,252 | |||||||||||||||||||||
Diluted | 28,941 | 28,586 | 28,910 | 28,595 | |||||||||||||||||||||
nm - not meaningful |
|||||||||||||||||||||||||
AMERICAN SOFTWARE, INC. | ||||||||||||||||||||||||
NON-GAAP MEASURES OF PERFORMANCE | ||||||||||||||||||||||||
(In thousands, except per share data, unaudited) | ||||||||||||||||||||||||
Second Quarter Ended | Six Months Ended | |||||||||||||||||||||||
October 31, | October 31, | |||||||||||||||||||||||
2015 | 2014 | Pct Chg. | 2015 | 2014 | Pct Chg. | |||||||||||||||||||
NON-GAAP EBITDA: | ||||||||||||||||||||||||
Net Earnings (GAAP Basis) | $ | 2,153 | $ | 1,175 | 83% | $ | 4,725 | $ | 2,709 | 74% | ||||||||||||||
Income tax expense | 1,308 | 693 | 89% | 2,859 | 1,628 | 76% | ||||||||||||||||||
Interest Income & Other, Net | (133) | (489) | (73%) | (436) | (795) | (45%) | ||||||||||||||||||
Amortization of intangibles | 1,202 | 1,161 | 4% | 2,397 | 2,260 | 6% | ||||||||||||||||||
Depreciation | 205 | 295 | (31%) | 421 | 579 | (27%) | ||||||||||||||||||
EBITDA (earnings before interest, taxes, depreciation and amortization) | 4,735 | 2,835 | 67% | 9,966 | 6,381 | 56% | ||||||||||||||||||
Stock-based compensation | 410 | 390 | 5% | 808 | 794 | 2% | ||||||||||||||||||
Adjusted EBITDA | $ | 5,145 | $ | 3,225 | 60% | $ | 10,774 | $ | 7,175 | 50% | ||||||||||||||
EBITDA, as a percentage of revenues |
16% | 12% | 17% | 13% | ||||||||||||||||||||
Adjusted EBITDA, as a percentage of revenues |
18% | 13% | 19% | 15% | ||||||||||||||||||||
Second Quarter Ended | Six Months Ended | |||||||||||||||||||||||
October 31, | October 31, | |||||||||||||||||||||||
2015 | 2014 | Pct Chg. | 2015 | 2014 | Pct Chg. | |||||||||||||||||||
NON-GAAP EARNINGS PER SHARE: | ||||||||||||||||||||||||
Net Earnings (GAAP Basis) | $ | 2,153 | $ | 1,175 | 83% | $ | 4,725 | $ | 2,709 | 74% | ||||||||||||||
Mid Retail Loss (2) | - | 377 | nm | - | 562 | nm | ||||||||||||||||||
Amortization of acquisition-related intangibles (2) | 42 | 25 | 68% | 85 | 50 | 70% | ||||||||||||||||||
Stock-based compensation (2) | 255 | 245 | 4% | 503 | 496 | 1% | ||||||||||||||||||
Adjusted Net Earnings | $ | 2,450 | $ | 1,822 | 34% | $ | 5,313 | $ | 3,817 | 39% | ||||||||||||||
Adjusted non-GAAP diluted earnings per share | $ | 0.08 | $ | 0.06 | 33% | $ | 0.18 | $ | 0.13 | 38% |
(1) - Basic per share amounts are the same for Class A and Class B shares. Diluted per share amounts for Class A shares are shown above. Diluted per share for Class B shares under the two-class method are $0.08 and $0.16 for the three and six months ended October 31, 2015, respectively. Diluted per share for Class B shares under the two-class method are $0.04 and $0.10 for the three and six months ended October 31, 2014, respectively. |
(2) - Tax affected using the effective tax rate for the three and six months period ended October 31, 2015 and 2014. |
nm - not meaningful |
AMERICAN SOFTWARE, INC. | ||||||||||
Consolidated Balance Sheet Information | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
October 31, | April 30, | |||||||||
2015 | 2015 | |||||||||
Cash and Cash Equivalents | $ | 41,522 | $ | 44,655 | ||||||
Short-term Investments | 19,473 | 17,584 | ||||||||
Accounts Receivable: | ||||||||||
Billed | 14,550 | 16,018 | ||||||||
Unbilled | 3,745 | 3,585 | ||||||||
Total Accounts Receivable, net | 18,295 | 19,603 | ||||||||
Prepaids & Other | 4,422 | 3,748 | ||||||||
Current Assets | 83,712 | 85,590 | ||||||||
Investments - Non-current | 11,143 | 13,156 | ||||||||
PP&E, net | 3,368 | 3,548 | ||||||||
Capitalized Software, net | 9,853 | 9,815 | ||||||||
Goodwill | 18,749 | 18,749 | ||||||||
Other Intangibles, net | 2,303 | 2,748 | ||||||||
Other Non-current Assets | 655 | 660 | ||||||||
Total Assets | $ | 129,783 | $ | 134,266 | ||||||
Accounts Payable | $ | 883 | $ | 920 | ||||||
Accrued Compensation and Related costs | 3,486 | 3,048 | ||||||||
Dividend Payable | 2,869 | 2,861 | ||||||||
Other Current Liabilities | 2,363 | 3,274 | ||||||||
Deferred Tax Liability - Current | 693 | 636 | ||||||||
Deferred Revenues - Current | 24,466 | 28,511 | ||||||||
Current Liabilities | 34,760 | 39,250 | ||||||||
Deferred Revenues - Non-current | 329 | 290 | ||||||||
Deferred Tax Liability - Non-current | 700 | 995 | ||||||||
Other Long-term Liabilities | 605 | 805 | ||||||||
Long-term Liabilities | 1,634 | 2,090 | ||||||||
Total Liabilities | 36,394 | 41,340 | ||||||||
Shareholders' Equity | 93,389 | 92,926 | ||||||||
Total Liabilities & Shareholders' Equity | $ | 129,783 | $ | 134,266 | ||||||
AMERICAN SOFTWARE, INC. | ||||||||||
Condensed Consolidated Cashflow Information | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Six Months Ended | ||||||||||
October 31, | ||||||||||
2015 | 2014 | |||||||||
Net cash provided by (used in) operating activities | $ | 4,362 | $ | (262) | ||||||
Capitalized computer software development costs | (1,990) | (846) | ||||||||
Purchases of property and equipment, net of disposals | (241) | (232) | ||||||||
Purchase of business, net of cash acquired | - | (7,909) | ||||||||
Net cash used in investing activities | (2,231) | (8,987) | ||||||||
Dividends paid | (5,724) | (5,648) | ||||||||
Repurchase of common stock | (70) | (780) | ||||||||
Payment for accrued acquisition consideration | (200) | (200) | ||||||||
Excess tax benefits from stock based compensation | 21 | 78 | ||||||||
Proceeds from exercise of stock options | 709 | 597 | ||||||||
Net cash used in financing activities | (5,264) | (5,953) | ||||||||
Net change in cash and cash equivalents | (3,133) | (15,202) | ||||||||
Cash and cash equivalents at beginning of period | 44,655 | 55,803 | ||||||||
Cash and cash equivalents at end of period | $ | 41,522 | $ | 40,601 |
CONTACT:
American Software, Inc.
Vincent C. Klinges, 404-264-5477
Chief
Financial Officer