American Software, Inc. (AMSWA) has reported 80.86 percent plunge in profit for the quarter ended Oct. 31, 2016. The company has earned $0.41 million, or $0.01 a share in the quarter, compared with $2.15 million, or $0.07 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $0.89 million, or $0.03 a share compared with $2.45 million or $0.08 a share, a year ago.
Revenue during the quarter dropped 10.06 percent to $26.15 million from $29.07 million in the previous year period. Gross margin for the quarter contracted 147 basis points over the previous year period to 49.77 percent. Total expenses were 97.29 percent of quarterly revenues, up from 88.55 percent for the same period last year. That has resulted in a contraction of 874 basis points in operating margin to 2.71 percent.
Operating income for the quarter was $0.71 million, compared with $3.33 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $2.73 million compared with $5.14 million in the prior year period. At the same time, adjusted EBITDA margin contracted 727 basis points in the quarter to 10.43 percent from 17.70 percent in the last year period.
"The second quarter results were below our expectations. However, we remain optimistic about our overall fiscal year 2017 performance," stated Mike Edenfield, president and chief executive officer of American Software. "We continued to see more customers leveraging our cloud services and SaaS offerings to accelerate their deployments and enhance their operations. And, we are pleased to report a significant 42% increase in Cloud Services ACV when compared to the same period in the prior year."
Operating cash flow improves significantly
American Software, Inc. has generated cash of $9.64 million from operating activities during the first half, up 120.88 percent or $5.27 million, when compared with the last year period.
The company has spent $6.38 million cash to meet investing activities during the first six months as against cash outgo of $2.23 million in the last year period.
The company has spent $4.09 million cash to carry out financing activities during the first six months as against cash outgo of $5.26 million in the last year period.
Cash and cash equivalents stood at $48.17 million as on Oct. 31, 2016, up 16.01 percent or $6.65 million from $41.52 million on Oct. 31, 2015.
Working capital increases
American Software, Inc. has recorded an increase in the working capital over the last year. It stood at $53.80 million as at Oct. 31, 2016, up 9.91 percent or $4.85 million from $48.95 million on Oct. 31, 2015. Current ratio was at 2.53 as on Oct. 31, 2016, up from 2.41 on Oct. 31, 2015.
Days sales outstanding went up to 57 days for the quarter compared with 56 days for the same period last year.
At the same time, days payable outstanding went up to 8 days for the quarter from 6 for the same period last year.
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