FOR IMMEDIATE RELEASE Financial Information Press Contact: Vincent C. Klinges Chief Financial Officer American Software, Inc. (404) 264-5477 American Software Reports Third Quarter of Fiscal Year 2024 Results Subscription Fee Growth of 9% and Adjusted EBITDA Margin was 16% of revenue from Continuing Operations in Q3 ATLANTA (February 22, 2024) American Software, Inc. (NASDAQ: AMSWA) today reported preliminary financial results for the third quarter of fiscal year 2024. During the second quarter of fiscal year 2024 we divested our non-core information technology staffing firm, The Proven Method and its results are included in discontinuing operations. Key Third Quarter Financial Highlights from Continuing Operations: • Subscription fees were $14.1 million for the quarter ended January 31, 2024, a 9% increase compared to $13.0 million for the same period last year. • Total revenues for the quarter ended January 31, 2024 decreased 7% to $25.5 million, compared to $27.4 million for the same period of the prior year, principally due to a decline in services and maintenance fee revenue. • Recurring revenue streams for Maintenance and Cloud Subscriptions were $21.8 million or 86% of total revenues in the quarter ended January 31, 2024 compared to $21.7 million or 79% of total revenues in the same period of the prior year. • Maintenance revenues for the quarter ended January 31, 2024 decreased 11% to $7.7 million compared to $8.6 million for the same period last year partially due to the divestiture of the Transportation group in November, 2023. • Professional services and other revenues for the quarter ended January 31, 2024 decreased 28% to $3.4 million for the quarter ended January 31, 2024 compared to $4.8 million for the same period last year. The decline was primarily driven by lower than expected seasonally adjusted project work and outsourcing of some services to systems integrators and other service providers. • Software license revenues were $0.3 million for the quarter ended January 31, 2024 compared to $1.0 million in the same period last year, continuing the focus on cloud services sales.
• Operating earnings for the quarter ended January 31, 2024 were $0.8 million compared to $2.7 million for the same period last year. • GAAP net earnings from continuing operations for the quarter ended January 31, 2024 were $4.2 million or $0.12 per fully diluted share compared to $3.2 million or $0.09 per fully diluted share for the same period last year. • Adjusted net earnings from continuing operations for the quarter ended January 31, 2024, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, were $6.3 million or $0.19 per fully diluted share compared to $4.4 million or $0.13 per fully diluted share for the same period last year. • EBITDA from continuing operations was $2.4 million for the quarter ended January 31, 2024 compared to $3.5 million for the same period last year. • Adjusted EBITDA from continuing operations was $4.0 million for the quarter ended January 31, 2024 compared to $4.8 million for the same period last year. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense and non-cash stock-based compensation expense. Key Fiscal 2024 Year to Date Financial Highlights from Continuing Operations: • Subscription fees were $41.2 million for the nine months ended January 31, 2024, a 10% increase compared to $37.4 million for the same period last year, while Software license revenues were $0.8 million compared to $2.0 million for the same period last year. • Total revenues for the nine months ended January 31, 2024 decreased 5% to $77.1 million compared to $81.5 million for the same period last year. • Recurring revenue streams for Maintenance and Cloud Services were $65.2 million and $63.8 million or 85% and 78% of total revenues for the nine-month periods ended January 31, 2024 and 2023, respectively. • Maintenance revenues for the nine months ended January 31, 2024 were $24.0 million, a 9% decrease compared to $26.4 million for the same period last year. • Professional services and other revenues for the nine months ended January 31, 2024 decreased 29% to $11.1 million compared to $15.7 million for the same period last year. The decline was primarily driven by lower project work and outsourcing of some services to systems integrators and other service providers s. • For the nine months ended January 31, 2024, the Company reported continuing operating earnings of approximately $3.4 million compared to $7.6 million for the same period last year. • GAAP net earnings from continuing operations were approximately $7.4 million or $0.22 per fully diluted share for the nine months ended January 31, 2024, a 5% increase compared to $7.1 million or $0.21 per fully diluted share for the same period last year. • Adjusted net earnings from continuing operations for the nine months ended January 31, 2024, which exclude stock-based compensation expense and amortization of acquisition-related intangibles, increased 25% to $13.3 million or $0.39 per fully diluted share, compared to $10.6 million or $0.31 per fully diluted share for the same period last year.
• EBITDA from continuing operations decreased by 29% to $7.1 million for the nine months ended January 31, 2024 compared to $10.0 million for the same period last year. • Adjusted EBITDA from continuing operations decreased 15% to $11.8 million for the nine months ended January 31, 2024 compared to $14.0 million for the nine months ended January 31, 2023. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense and non-cash stock-based compensation. Key Third Quarter of Fiscal Year 2024 highlights: Clients & Channels • Notable new and existing customers placing orders with the Company in the third quarter include: Aaron’s LLC, Herbalife Inc., INCOFE, S.A.S., Kontoor Brands, Omega Pharma International NV, Richardson Sports, Inc., Sigma-Aldrich Corporation and Williams Scotsman, Inc. • During the quarter, SaaS subscription and software license agreements were signed with customers located in the following countries: Australia, Belgium, France, Sweden, Switzerland, the United Kingdom, the United States and Uruguay. Company & Technology • Logility’s planning solutions and employees were recognized in the following publications: o Allan Dow, president, Logility, Inc. was quoted in the 2024 Supply Chain Predictions published by Inbound Logistics saying “2024 will be about AI implementation. By optimizing network flows, manufacturers can better utilize their resources, optimize margins, and drive long-term profit growth.” o Lisa Henriott, SVP Product Marketing, joined Tyler Fusser of Supply Chain Connect to discuss the inventory management challenges companies face today and how Logility’s inventory optimization capabilities allow companies to analyze trade-offs at different inventory levels, including finished goods, work in process, or raw materials. o Both IT in the Supply Chain and READ Magazine highlighted how Logility maximizes production efficiencies with advanced scheduling capabilities in its Manufacturing Optimization solution. • In November, Logility announced the extension of its Manufacturing Optimization solution to maximize production efficiencies with advanced scheduling capabilities. Utilizing Industry 4.0 technologies such as artificial intelligence (AI), machine learning (ML) and automation to continuously sense, analyze, and update activity in digital supply chains to help ensure clients gain the highest utilization possible of equipment and resources. • Also in November, Logility was a sponsor at the Gartner Supply Chain Planning Summit North America where they showcased their AI-first planning platform to summit attendees and analysts.
• In December, Logility released new capabilities to its Digital Supply Chain Platform to leverage artificial intelligence (AI), machine learning (ML), and automation to deepen inventory, manufacturing, and ESG capabilities. New platform capabilities include: InventoryAI+ Dashboard, Probabilistic Inventory Planning with Automated Inventory Policies, and Cloud-Configuration and Onboarding in Manufacturing Optimization. Their Vendor Management: Corporate Responsibility capabilities now include Cancel Compliance Form and Legal Compliance Violation features to foster transparency and aid efficient compliance monitoring for all clients. • In January, Logility announced capabilities to advance supplier management, and support transparent supply chain practices for apparel and soft goods companies. These capabilities allow companies to elevate visibility into vendor and supplier relationships: o Vendor Compliance Dashboard: Track supplier sustainability performance and progress easily. o Faster Supplier Onboarding: Streamlined evaluation with improved certificate management. o Reduce Product Risk: Identify at-risk purchase orders and restricted suppliers efficiently. o Enhanced Communication: Cancel compliance forms with clear notifications to all parties. o Track Legal Violations: Record and modify legal details for better compliance monitoring. The overall financial condition of the Company remains strong, with cash and investments of approximately $78.3 million. During the third quarter of fiscal year 2024, the Company paid shareholder dividends of approximately $3.8 million and purchased approximately 516k American Software Class A shares for $5.4mm under the authorized stock buyback program which we completed this quarter for a total of approximately 946k shares for $10.2 million or an average price of $10.83 per share. “We delivered solid third quarter results and remain on track to achieve our guidance for fiscal 2024, which is unchanged from the prior quarter,” said Allan Dow, CEO and President of American Software. “Since the start of the new calendar year, we have seen an increase in activity with both existing and prospective customers progressing initiatives to adopt our AI-first supply chain planning solutions. The strength of our pipeline and greater customer engagement leaves us poised for a strong finish to our fiscal 2024.” Fiscal Year 2024 Financial Outlook from Continuing Operations: • Total revenues of $100.0 million to $104.0 million, including total recurring revenues of $85.0 million to $88.0 million. • Adjusted EBITDA of $14.5 million to $16.0 million. About American Software, Inc.
Atlanta-based American Software, Inc. (NASDAQ: AMSWA), through its operating entity Logility, delivers optimized demand, inventory, manufacturing, and supply planning tools – helping to provide executives the confidence and control to increase margins and service levels, while delivering sustainable supply chains. Serving clients such as Big Lots, Carter’s, Destination XL, Hostess, Husqvarna Group, Jockey International, Johnson Controls, Parker Hannifin, Red Wing Shoe Company, Spanx, Dole Fresh Vegetables, Inc., and Fender Musical Instrument Co, our solutions are marketed and sold through a direct sales team as well as an independent global value-added reseller distribution network. Logility’s planning platform leverages Generative AI, advanced AI-driven algorithms, and machine learning. Our engineered approach drives team alignment for over 650 clients in 80 countries with prioritized, value- focused outcomes. For more information about Logility, please visit www.logility.com. Logility is a wholly- owned subsidiary and operating entity of American Software, Inc. (NASDAQ: AMSWA). You can learn more about American Software at www.amsoftware.com or by calling (404) 364-7615 or email kliu@amsoftware.ocom. Operating and Non-GAAP Financial Measures American Software, Inc. (the “Company”) includes non-GAAP financial measures (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 operating or non-GAAP financial information used by other companies. The Company believes that this presentation of 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. EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (loss)/income & other, net, and income tax expense. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (loss)/income & other, net, income tax expense and non-cash stock- based compensation expense. 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 or performance to differ materially from what is anticipated by statements made herein. These factors include, but are not limited to, continuing U.S. and global economic uncertainty and the timing and degree of business recovery; the irregular pattern of the Company’s revenues; dependence on particular market segments or customers; competitive pressures; market acceptance of the Company’s products and services; technological complexity; undetected software errors; potential product liability or warranty claims; risks associated with new product development; the challenges and risks associated with integration of acquired product lines, companies and services; uncertainty about the viability and effectiveness of strategic alliances; the Company’s ability to satisfy in a timely manner all Securities and Exchange Commission (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; as well as a number of other risk factors that could affect the Company’s future performance. 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 SEC. For more information, contact: Kevin Liu, American Software, Inc., (626) 657-0013 or email kliu@amsoftware.com. Logility® is a registered trademark of Logility, Inc. Other products mentioned in this document are registered, trademarked or service marked by their respective owners. ###
American Software Third Quarter of Fiscal Year 2024 Results 2024 2023 Pct Chg. 2024 2023 Pct Chg. Revenues from continuing operations: Subscription fees 14,114$ 13,003$ 9% 41,235$ 37,391$ 10% License fees 277 1,017 (73%) 795 2,025 (61%) Professional services & other 3,418 4,758 (28%) 11,107 15,687 (29%) Maintenance 7,727 8,649 (11%) 23,990 26,384 (9%) Total Revenues 25,536 27,427 (7%) 77,127 81,487 (5%) Cost of Revenues from continuing operations: Subscription services 4,944 4,005 23% 13,768 11,682 18% License fees 3 358 (99%) 168 541 (69%) Professional services & other 2,694 3,498 (23%) 8,610 10,682 (19%) Maintenance 1,449 1,607 (10%) 4,877 4,757 3% Total Cost of Revenues 9,090 9,468 (4%) 27,423 27,662 (1%) Gross Margin 16,446 17,959 (8%) 49,704 53,825 (8%) Operating expenses from continuing operations: Research and development 4,546 4,402 3% 13,064 13,220 (1%) Sales and marketing 5,039 4,904 3% 16,083 15,537 4% General and administrative 5,853 5,883 (1%) 16,775 17,350 (3%) Amortization of acquisition-related intangibles 193 25 672% 346 81 327% Total Operating Expenses 15,631 15,214 3% 46,268 46,188 0% Operating Earnings from continuing operations 815 2,745 (70%) 3,436 7,637 (55%) Interest Income & Other, Net 4,417 1,334 231% 5,726 1,308 338% 5,232 4,079 28% 9,162 8,945 2% Income Tax Expense 1,080 907 19% 1,775 1,882 (6%) 4,152$ 3,172$ 31% 7,387$ 7,063$ 5% (64)$ 45$ nm 1,812$ 323$ 461% 4,088$ 3,217$ 27% 9,199$ 7,386$ 25% Earnings per common share from continuing operations: (2) Basic 0.12$ 0.09$ 33% 0.22$ 0.21$ 5% Diluted 0.12$ 0.09$ 33% 0.22$ 0.21$ 5% Earnings per common share from discontinuing operations: (2) Basic -$ -$ - 0.05$ 0.01$ 400% Diluted -$ -$ - 0.05$ 0.01$ 400% Earnings per common share: (2) Basic 0.12$ 0.09$ 33% 0.27$ 0.22$ 23% Diluted 0.12$ 0.09$ 33% 0.27$ 0.22$ 23% Weighted average number of common shares outstanding: Basic 33,292 33,759 33,842 33,711 Diluted 33,337 33,965 33,866 34,006 nm- not meaningful 2024 2023 Pct Chg. 2024 2023 Pct Chg. NON-GAAP Operating Earnings: 815$ 2,745$ (70%) 3,436$ 7,637$ (55%) Amortization of acquisition-related intangibles 1,168 233 401% 2,195 602 265% Stock-based compensation 1,586 1,294 23% 4,720 3,935 20% 3,569 4,272 (16%) 10,351 12,174 (15%) 14% 16% 13% 15% 2024 2023 Pct Chg. 2024 2023 Pct Chg. NON-GAAP EBITDA: 4,152$ 3,172$ 31% 7,387$ 7,063$ 5% Income Tax Expense 1,080 907 19% 1,775 1,882 (6%) Interest Income & Other, Net (4,417) (1,334) 231% (5,726) (1,308) 338% Amortization of intangibles 1,257 495 154% 2,527 1,583 60% Depreciation 377 292 29% 1,114 805 38% 2,449 3,532 (31%) 7,077 10,025 (29%) Stock-based compensation 1,586 1,294 23% 4,720 3,935 20% 4,035$ 4,826$ (16%) 11,797$ 13,960$ (15%) 10% 13% 9% 12% 16% 18% 15% 17% 2024 2023 Pct Chg. 2024 2023 Pct Chg. NON-GAAP Earnings Per Share 4,152$ 3,172$ 31% 7,387$ 7,063$ 5% Amortization of acquisition-related intangibles (3) 927 181 412% 1,870 473 295% Stock-based compensation (3) 1,259 1,006 25% 4,002 3,107 29% 6,338$ 4,359$ 45% 13,259$ 10,643$ 25% Adjusted non-GAAP diluted earnings per share from continuing operations 0.19$ 0.13$ 46% 0.39$ 0.31$ 26% January 31, Third Quarter Ended January 31, Earnings from continuing operations Before Income Taxes January 31, (In thousands, except per share data, unaudited) Operating Earnings from continuing operations (GAAP Basis) January 31, AMERICAN SOFTWARE, INC. Nine Months Ended January 31, Nine Months Ended NON-GAAP Operating Earnings from continuing operations: Non-GAAP Operating Earnings from continuing operations, as a % of revenue Consolidated Statements of Operations Information (In thousands, except per share data, unaudited) AMERICAN SOFTWARE, INC. NON-GAAP MEASURES OF PERFORMANCE Net Earnings from continuing operations (Loss)/Earnings from discontinuing operations, Net of Income Taxes (1) Net Earnings Third Quarter Ended January 31, Nine Months Ended Third Quarter Ended Third Quarter Ended January 31, Adjusted EBITDA, from continuing operations, as a percentage of revenues Net Earnings from continuing operations (GAAP Basis) EBITDA from continuing operations (earnings before interest, taxes, depreciation and amortization) Adjusted EBITDA from continuing operations EBITDA from continuing operations, as a percentage of revenues January 31, Nine Months Ended Adjusted Net Earnings from continuing operations Net Earnings from continuing operations (GAAP Basis)
2024 2023 Pct Chg. 2024 2023 Pct Chg. NON-GAAP Earnings Per Share 0.12$ 0.09$ 33% 0.22$ 0.21$ 5% Amortization of acquisition-related intangibles (3) 0.03 0.01 - 0.05$ 0.01 400% Stock-based compensation (3) 0.04$ 0.03 33% 0.12$ 0.09 33% 0.19$ 0.13$ 46% 0.39$ 0.31$ 26% 2024 2023 Pct Chg. 2024 2023 Pct Chg. Amortization of acquisition-related intangibles Cost of Subscription Services 975$ 208$ 369% 1,849$ 521$ 255% Operating expenses 193 25 672% 347 81 328% Total amortization of acquisition-related intangibles 1,168$ 233$ 401% 2,196$ 602$ 265% Stock-based compensation Cost of revenues 90$ 70$ 29% 251$ 178$ 41% Research and development 174 145 20% 513 437 17% Sales and marketing 312 152 105% 1,040 568 83% General and administrative 1,010 927 9% 2,916 2,752 6% Total stock-based compensation 1,586$ 1,294$ 23% 4,720$ 3,935$ 20% Three Months Ended Janaury 31, 2024 Three Months Ended Janaury 31, 2023 Nine Months Ended January 31, 2023 Nine Months Ended January 31, 2024 Continuing Operations 20.6% 22.2% 21.0% 19.4% Discontinuing Operations nm 0.0% 0.0% 23.9% Consolidated Operations 21.9% 22.1% 21.2% 20.3% nm- not meaningful January 31, April 30, 2024 2023 Cash and Cash Equivalents 55,854$ 90,059$ Short-term Investments 22,454 23,451 Accounts Receivable: Billed 22,796 23,476 Unbilled 1,343 1,569 Total Accounts Receivable, net 24,139 25,045 Prepaid expenses and other current assets 6,973 7,831 Current Assets from discontinuing operations - 3,603 Total Current Assets 109,420 149,989 Investments - Non-current - 486 PP&E, net 5,897 6,444 Capitalized Software, net 59 391 Goodwill 46,393 29,558 Other Intangibles, net 10,948 2,143 Other Non-current Assets 6,311 6,609 Total Assets 179,028$ 195,620$ Accounts Payable 1,086$ 2,131$ Accrued Compensation and Related costs 2,516 4,077 Dividend Payable 3,654 3,756 Other Current Liabilities 3,275 3,638 Deferred Revenues 37,154 43,124 Current liabilities of discontinued operations - 318 Current Liabilities 47,685 57,044 Other Long-term Liabilities 249 288 Total Liabilities 47,934 57,332 Shareholders' Equity 131,094 138,288 Total Liabilities & Shareholders' Equity 179,028$ 195,620$ 2024 2023 Net cash provided by (used in) operating activities of continuing operations 7,837$ (11,574)$ Cash provided by operating activities of discontinued operations 1,554 1,108 Net cash provided by/(used in) operating activities 9,391 (10,466) Purchases of property and equipment, net of disposals (460) (3,655) Purchase of business, net of cash acquired (25,041) (6,500) Proceeds from sale of business 660 - Net cash used in investing activities of continuing operations (24,841) (10,155) Net cash provided by investing activities of discontinued operations 1,825 - Net cash used in investing activities (23,016) (10,155) Dividends paid (11,272) (11,117) Purchases of common stock (10,235) - Proceeds from exercise of stock options 290 1,654 Net cash used in financing activities of continuing operations (21,217) (9,463) Net Cash used in financing activities of discontinued operations - - Net cash used in financing activities (21,217) (9,463) Net change in cash and cash equivalents (34,842) (30,084) Cash and cash equivalents at beginning of period 90,696 110,690 Cash and cash equivalents at end of period 55,854$ 80,606$ (3) -Continuing and discontinuing operations are tax affected using the effective tax rate excluding a discrete item related to excess tax benefit for stock options in the following table. Nine Months Ended January 31, Nine Months Ended (Unaudited) AMERICAN SOFTWARE, INC. (2) - 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. Continuing operations diluted per share for Class B shares under the two-class method are $0.12 and $0.22 for the three and nine months ended Janaury 31, 2024, respectively. Continuing diluted per share for Class B shares under the two-class method are $0.09 and $0.21 for the three and nine months ended Janaury 31, 2023, respectively. January 31, (1) For more information, please see note F related to discontinuing operations in the Company’s unaudited condensed consolidated financial statements filed on December 11, 2023. January 31, Condensed Consolidated Cashflow Information Net Earnings from continuing operations (GAAP Basis) Adjusted Net Earnings from continuing operations Third Quarter Ended January 31, Third Quarter Ended January 31, Nine Months Ended (In thousands) (Unaudited) AMERICAN SOFTWARE, INC. Consolidated Balance Sheet Information (In thousands)