American Software (AMSWA) has reported 6.25 percent rise in profit for the quarter ended Jan. 31, 2017. The company has earned $2.24 million, or $0.08 a share in the quarter, compared with $2.11 million, or $0.07 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $2.71 million, or $0.09 a share compared with $1.79 million or $0.06 a share, a year ago.
Revenue during the quarter went down marginally by 2.41 percent to $26.44 million from $27.10 million in the previous year period. Gross margin for the quarter expanded 291 basis points over the previous year period to 53.13 percent. Total expenses were 90.72 percent of quarterly revenues, up from 90.71 percent for the same period last year. That has resulted in a contraction of 1 basis points in operating margin to 9.28 percent.
Operating income for the quarter was $2.46 million, compared with $2.52 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $4.79 million compared with $4.32 million in the prior year period. At the same time, adjusted EBITDA margin improved 216 basis points in the quarter to 18.11 percent from 15.95 percent in the last year period.
"As a result of more customers leveraging our SaaS and Cloud Services offerings, we are pleased to report a significant 47% increase in Cloud Services ACV when compared to the same quarter in the prior year. While this transition to SaaS is important, we continue to offer our customers the choice of both subscription and perpetual license options to support their strategic goals. Based on each customer’s choice, our license fee revenue recognition will continue to fluctuate quarter-to-quarter, but we anticipate that deployment preferences over the long-term will be dominated by SaaS subscriptions which will provide the Company with a more predictable revenue flow,” stated Mike Edenfield, president and chief executive officer of American Software. "We remain optimistic about our fourth quarter and overall fiscal year 2017 performance despite the continued global macro-economic sluggishness which has impacted fiscal year 2017 and may introduce additional uncertainty into future revenue streams."
Operating cash flow improves significantlyAmerican Software has generated cash of $19.26 million from operating activities during the nine month period, up 127.55 percent or $10.80 million, when compared with the last year period. The company has spent $7.41 million cash to meet investing activities during the nine month period as against cash outgo of $3.16 million in the last year period.
The company has spent $5.10 million cash to carry out financing activities during the nine month period as against cash outgo of $7 million in the last year period.
Cash and cash equivalents stood at $55.75 million as on Jan. 31, 2017, up 29.77 percent or $12.79 million from $42.96 million on Jan. 31, 2016.
Working capital increases
American Software has recorded an increase in the working capital over the last year. It stood at $57.87 million as at Jan. 31, 2017, up 12.01 percent or $6.21 million from $51.66 million on Jan. 31, 2016. Current ratio was at 2.43 as on Jan. 31, 2017, up from 2.34 on Jan. 31, 2016.
Days sales outstanding went down to 62 days for the quarter compared with 66 days for the same period last year.
At the same time, days payable outstanding was almost stable at 8 days for the quarter, when compared with the previous year period.
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