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) |
August 25, 2016 |
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 July 31, 2016 and certain forward-looking statements, as presented in a press release on August 25, 2016. 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or hereafter filed under the Securities Act of 1933, as amended, except to the extent that such information is superseded by information as of a subsequent date that is included in or incorporated by reference into such registration statement.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., August 25, 2016. |
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: | August 25, 2016 | By: |
/s/ Vincent C. Klinges |
|
Vincent C. Klinges |
||||
Chief Financial Officer |
2
Exhibit 99.1
American Software Reports Preliminary First Quarter of Fiscal Year 2017 Results
ATLANTA--(BUSINESS WIRE)--August 25, 2016--American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the first quarter of fiscal 2017.
Key first quarter financial highlights:
The Company is including 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 the non-GAAP financial information used by other companies. The Company believes that this presentation of 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. ACV is a forward-looking operating measure used by management to better understand cloud services (SaaS and other related cloud services) revenue 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 $78.0 million and no debt as of July 31, 2016. We increased cash and investments by $1.2 million from the same period last year. During the first quarter, the Company paid approximately $2.9 million in dividends.
“Although first quarter results were below our expectations, it should be noted that the same period prior year results included the completion of a project with customer acceptance for approximately $1.5 million in revenue, while the costs for that project were incurred in prior periods,” stated Mike Edenfield, president and CEO of American Software. “We remain optimistic about fiscal year 2017. And, we continued to see more customers leveraging our cloud services and SaaS offerings to accelerate their deployments and enhance their operations. We are pleased to report a significant 36% increase in Cloud Services ACV when compared to the same period in the prior year.”
“Logility’s acquisition of AdapChain, announced on August 23, 2016, extends our ability to deploy our portfolio of innovative solutions more quickly and at a lower total cost of ownership than our industry peers,” said Edenfield. “This is the natural culmination of years of successful collaboration between AdapChain and Logility and enables our customers to enhance their supply chain success by transforming the complexity of enterprise-wide application integration into a quick, simple and repeatable process with systems such as SAP, Oracle, Infor, Microsoft and JDA. The AdapChain acquisition is expected to be accretive to Logility’s earnings and cash flow within the next 12 months.”
“Sales engagements continue to underscore that both new and existing customers are investing to improve their supply chain performance and achieve tangible business benefits from their planning initiatives in the form of lower costs, better service and improved visibility across increasingly complex and global networks,” continued Edenfield. “Likewise, we continue to invest in expanding our global presence to serve more companies around the world. We signed software agreements with customers in 11 countries during the first quarter of fiscal year 2017.”
Additional highlights for the first quarter of fiscal 2017 include:
Customers & Channels
Company & Technology
About American Software, Inc.
Atlanta-based American Software, Inc. (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 supply chain optimization and advanced retail planning solutions that help medium, large, and Fortune 500 companies realize substantial bottom-line results in record time. Logility Voyager Solutions™ is a complete supply chain and retail optimization solution suite that features an advanced analytics architecture and provides supply chain visibility; demand, inventory and replenishment planning; Sales and Operations Planning (S&OP); Integrated Business Planning (IBP), supply and inventory optimization; manufacturing planning and scheduling; retail merchandise and assortment 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 affordable, easy-to-use software-as-a-service (SaaS) supply chain solutions for manufacturers and distributors designed to increase forecast accuracy, improve customer service levels, and reduce overall inventory to maximize profits and lower costs. Demand Solutions DSX offers demand planning, collaborative forecasting, inventory planning, production planning and scheduling, S&OP and IBP. Demand Management serves customers such as Siemens Healthcare, AutomationDirect.com, and Newfoundland Labrador Liquor Corporation. New Generation Computing® (NGC®), a wholly-owned subsidiary of American Software, is a leading provider of PLM, supply chain management, ERP, and shop floor control software and services for brand owners, retailers and consumer products companies. NGC customers include A|X Armani Exchange, Billabong, Carter’s, Destination XL, Hugo Boss, Jos. A. Bank, Marchon Eyewear, Spanx, Swatfame, VF Corporation, and many others. 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) | |||||||||||||||
First Quarter Ended | |||||||||||||||
July 31, | |||||||||||||||
2016 | 2015 | Pct Chg. | |||||||||||||
Revenues: | |||||||||||||||
License | $ | 4,627 | $ | 4,876 | (5 | %) | |||||||||
Services & other | 12,221 | 13,845 | (12 | %) | |||||||||||
Maintenance | 10,585 | 10,137 | 4 | % | |||||||||||
Total Revenues | 27,433 | 28,858 | (5 | %) | |||||||||||
Cost of Revenues: | |||||||||||||||
License | 1,823 | 1,927 | (5 | %) | |||||||||||
Services & other | 9,053 | 9,451 | (4 | %) | |||||||||||
Maintenance | 2,761 | 2,163 | 28 | % | |||||||||||
Total Cost of Revenues | 13,637 | 13,541 | 1 | % | |||||||||||
Gross Margin | 13,796 | 15,317 | (10 | %) | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 3,736 | 3,566 | 5 | % | |||||||||||
Less: capitalized development | (636 | ) | (817 | ) | (22 | %) | |||||||||
Sales and marketing | 5,471 | 5,233 | 5 | % | |||||||||||
General and administrative | 3,511 | 3,447 | 2 | % | |||||||||||
Amortization of acquisition-related intangibles | 68 | 68 | 0 | % | |||||||||||
Total Operating Expenses | 12,150 | 11,497 | 6 | % | |||||||||||
Operating Earnings | 1,646 | 3,820 | (57 | %) | |||||||||||
Interest Income & Other, Net | 660 | 303 | 118 | % | |||||||||||
Earnings Before Income Taxes | 2,306 | 4,123 | (44 | %) | |||||||||||
Income Tax Expense | 618 | 1,552 | (60 | %) | |||||||||||
Net Earnings | $ | 1,688 | $ | 2,571 | (34 | %) | |||||||||
Earnings per common share: (1) | |||||||||||||||
Basic | $ | 0.06 | $ | 0.09 | (33 | %) | |||||||||
Diluted | $ | 0.06 | $ | 0.09 | (33 | %) | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | 28,938 | 28,614 | |||||||||||||
Diluted | 29,254 | 28,882 | |||||||||||||
nm- not meaningful | |||||||||||||||
AMERICAN SOFTWARE, INC. | |||||||||||||
NON-GAAP MEASURES OF PERFORMANCE | |||||||||||||
(In thousands, except per share data, unaudited) | |||||||||||||
First Quarter Ended | |||||||||||||
July 31, | |||||||||||||
2016 | 2015 | Pct Chg. | |||||||||||
NON-GAAP EBITDA: | |||||||||||||
Net Earnings (GAAP Basis) | $ | 1,688 | $ | 2,571 | (34 | %) | |||||||
Income Tax Expense | 618 | 1,552 | (60 | %) | |||||||||
Interest Income & Other, Net | (660 | ) | (303 | ) | 118 | % | |||||||
Amortization of intangibles | 1,212 | 1,195 | 1 | % | |||||||||
Depreciation | 195 | 216 | (10 | %) | |||||||||
EBITDA (earnings before interest, taxes, depreciation and amortization) | 3,053 | 5,231 | (42 | %) | |||||||||
Stock-based compensation | 388 | 398 | (3 | %) | |||||||||
Adjusted EBITDA | $ | 3,441 | $ | 5,629 | (39 | %) | |||||||
EBITDA , as a percentage of revenues | 11 | % | 18 | % | |||||||||
Adjusted EBITDA , as a percentage of revenues | 13 | % | 20 | % | |||||||||
First Quarter Ended | |||||||||||||
July 31, | |||||||||||||
2016 | 2015 | Pct Chg. | |||||||||||
NON-GAAP EARNINGS PER SHARE: | |||||||||||||
Net Earnings (GAAP Basis) | $ | 1,688 | $ | 2,571 | (34 | %) | |||||||
Amortization of acquisition-related intangibles (2) | 50 | 42 | 19 | % | |||||||||
Stock-based compensation (2) | 284 | 248 | 15 | % | |||||||||
Adjusted Net Earnings | $ | 2,022 | $ | 2,861 | (29 | %) | |||||||
Adjusted non-GAAP diluted earnings per share | $ | 0.07 | $ | 0.10 | (30 | %) | |||||||
(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 $0.06 and $0.09 for the three months ended July 31, 2016 and 2015, respectively. | |||||||||||||
(2) - Tax affected using the effective tax rate for the three months period ended July 31, 2016. | |||||||||||||
nm- not meaningful |
AMERICAN SOFTWARE, INC. | |||||||
Consolidated Balance Sheet Information | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
July 31, | April 30, | ||||||
2016 | 2016 | ||||||
Cash and Cash Equivalents | $ | 51,837 | $ | 49,004 | |||
Short-term Investments | 20,037 | 20,957 | |||||
Accounts Receivable: | |||||||
Billed | 13,437 | 17,104 | |||||
Unbilled | 4,583 | 3,444 | |||||
Total Accounts Receivable, net | 18,020 | 20,548 | |||||
Prepaids & Other | 3,719 | 3,586 | |||||
Current Assets | 93,613 | 94,095 | |||||
Investments - Non-current | 6,088 | 7,924 | |||||
PP&E, net | 3,345 | 3,396 | |||||
Capitalized Software, net | 8,787 | 9,140 | |||||
Goodwill | 18,749 | 18,749 | |||||
Other Intangibles, net | 1,636 | 1,858 | |||||
Other Non-current Assets | 1,147 | 1,562 | |||||
Total Assets | $ | 133,365 | $ | 136,724 | |||
Accounts Payable | $ | 1,436 | $ | 1,280 | |||
Accrued Compensation and Related costs | 2,301 | 4,349 | |||||
Dividend Payable | 3,191 | 2,887 | |||||
Other Current Liabilities | 2,891 | 2,779 | |||||
Deferred Revenues - Current | 26,401 | 27,999 | |||||
Current Liabilities | 36,220 | 39,294 | |||||
Deferred Revenues - Non-current | 512 | 612 | |||||
Deferred Tax Liability - Non-current | 1,327 | 1,319 | |||||
Other Long-term Liabilities | 57 | 605 | |||||
Long-term Liabilities | 1,896 | 2,536 | |||||
Total Liabilities | 38,116 | 41,830 | |||||
Shareholders' Equity | 95,249 | 94,894 | |||||
Total Liabilities & Shareholders' Equity | $ | 133,365 | $ | 136,724 | |||
AMERICAN SOFTWARE, INC. | ||||||||||
Condensed Consolidated Cashflow Information | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | ||||||||||
July 31, | ||||||||||
2016 | 2015 | |||||||||
Net cash provided by operating activities | $ | 5,030 | $ | 5,265 | ||||||
Capitalized computer software development costs | (636 | ) | (817 | ) | ||||||
Purchases of property and equipment, net of disposals | (144 | ) | (65 | ) | ||||||
Net cash used in investing activities | (780 | ) | (882 | ) | ||||||
Dividends paid | (2,896 | ) | (2,861 | ) | ||||||
Excess tax benefits from stock-based compensation | - | 13 | ||||||||
Proceeds from exercise of stock options | 1,479 | 256 | ||||||||
Net cash used in financing activities | (1,417 | ) | (2,592 | ) | ||||||
Net change in cash and cash equivalents | 2,833 | 1,791 | ||||||||
Cash and cash equivalents at beginning of period | 49,004 | 44,655 | ||||||||
Cash and cash equivalents at end of period | $ | 51,837 | $ | 46,446 |
CONTACT:
Financial Information Press Contact:
American Software,
Inc.
Vincent C. Klinges, 404-264-5477
Chief Financial Officer