Leading Global Provider of Supply Chain Management
Transcript of Leading Global Provider of Supply Chain Management
© 2021 American Software, Inc. All rights reserved. | Proprietary & Confidential
Leading Global Provider of Supply Chain Management Solutions
Allan DowCEO
September 2020
Vincent KlingesCFO
NASDAQ: AMSWA
© 2021 American Software, Inc. All rights reserved. | Proprietary & Confidential
Forward Looking Statements
This presentation may include statements that may constitute “forward-looking statements,” including estimates offuture business prospects or financial results and statements containing the words “believe,” “expect,” or similarexpressions. Any forward-looking statements herein are made pursuant to the safe harbor provision of the PrivateSecurities Litigation Reform Act of 1995. There are many factors that could cause actual results of American Softwareto differ materially from those anticipated by forward-looking statements made herein. These factors includecontinuing economic uncertainty, the timing and degree of business recovery, unpredictability and the irregularpattern of future revenues, competitive pressures, delays and other risks associated with new product development,the unpredictability of the effectiveness and duration of third-party marketing agreements, undetected softwareerrors, and risks associated with market acceptance of the Company’s products and services as well as a number ofother risk factors that could affect the future performance of the Company. Please refer to a discussion of thesefactors and others in the Company's most recent Annual Report on Form 10-K and in its Quarterly Reports on Form10-Q and other reports and documents subsequently filed with the Securities and Exchange Commission. For moreinformation about risks the Company could face as well as other information, contact Vincent C. Klinges, ChiefFinancial Officer, American Software, Inc., 470 East Paces Ferry Rd., Atlanta, GA 30305, (800) 726-2946 or (404) 264-5477. FAX: (404) 264-5206 INTERNET: www.amsoftware.com or E-mail: [email protected].
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Supply Chain Software Overview
50+ Years as a Best-of-Breed Provider of Supply Chain and Retail Optimization Solutions
900+ Customers in over 80 Countries Attracted byVertically Oriented Solutions and Functional Depth
Multi-Brand Strategy Addresses Needs of Global 1000, Enterprise and SMB Companies
Proven Results and Track Record of Innovation
Strong Financial Position
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Supply Chain Management Growth
Market Forecast Through 2024
The Supply Chain Management (SCM) Software market exceeded $15 billion in total revenue in 2019 and is expected to exceed $24 billion by 2024.
This represents a CAGR of 10% through 2024.
Our Specialty
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Transition to SaaS continues to drive the majority of growth into 2021 The move to SaaS is
driving companies to purchase new solutions which will lead to process modernization and expanding the selected vendor’s footprint
Process Change Drives Growth in SC Software
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“[Logility] has invested in its digital planning capability over the last couple of years as it modernizes its capabilities, particularly in advanced analytics and machine learning.”
Magic Quadrant for Supply Chain Planning Solutions
CHALLENGERS LEADERS
NICHE PLAYERS VISIONARIES
“[Logility’s] innovation strategy is above average. This is driven by above-average scores for vision for AI, vision for data sources/management, and vision for speed and scalability.”
Recognized Leader: 2021 Gartner Magic Quadrant for Supply Chain Planning Solutions
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Digital Supply Chain Platform & Industry Verticals
SCM Customer Base
Apparel and Footwear
12%
Food andBeverage
14%
OtherConsumerGoods
16%
TotalConsumerProducts42%
Life Sciences6%
Service/Aftermarket
6%Chemical/Process
10%
WholesaleDistribution 9%
Retail
13%
Durable Goods
14%
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Diversified Customer BaseConsumer Goods
Service & Aftermarket
Durable Goods
Life Sciences
Electronics Retail
Personal Care
Home Furnishings
Food & Beverage
Softgoods &Apparel
Process Chemicals
WholesaleDistribution
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Investing in the Future
$80+60MGross R&D Investment5 Years past / 3 Years Ahead
32 + 26%Staff Growth 5 Years past / 3 Years Ahead
19Consistent Years of Profitability
$108MCash & Investments
$3.2BDebt
RESEARCH
INNOVATION
CO-INNOVATION
ZERORevenue to Date
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Sustainability MissionCreating sustainable supply chains that improve peoples lives and the world we live in.
Economic
Accelerating and Improving decision making
More effective deployment of inventory
Efficient utilization of assets
Higher fulfillment and customer satisfaction
Environmental
Reduced energy consumption and carbon footprint
Improvements in effluent & waste
Traceability & recovery of products
Higher recyclable content
Efficient use of raw materials
Higher utilization of return and restore
Social
Ensuring adherence to proper labor, safety & security standards
Upholding the standards of fair trade and social equality
Enriching lives across the globe through better delivery & availability of products
Automating the routine & mundane tasks and freeing supply chain communities for more rewarding roles
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Financial Summary
NASDAQ: AMSWA
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Revenue Contributions
Revenue by Segment ($MMs)Three Business Segments
12
82%
16%2%
Supply Chain Management IT Solutions ERP
22.3 23.5 25.6
23.6 21.7 22.3 22.6 23.6 24.3
4.4 4.2
4.5 5.0
5.0 5.0 4.5 4.4 4.5 0.7 0.6
0.5 0.7
0.5 0.6 0.5 0.5 0.5 27.4 28.2 30.6
29.3 27.3 27.9 27.7 28.6 29.3
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
ERP
TPM
SCM
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Transition to the Cloud Annual Contract Value (ACV)
+49% Y-o-Y
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1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22Total ACV 2.9 3.1 3.3 3.8 4.0 4.4 4.9 6.1 7.7 9.9 10.9 12.7 13.2 14.5 16.1 17.3 20.2 22.4 25.5 26.4 27.6 29.6 31.6 38.3 40.9% of revenue 3% 3% 3% 3% 4% 4% 4% 6% 7% 9% 10% 11% 12% 13% 14% 16% 19% 21% 23% 23% 24% 26% 28% 34% 36%
27.6
40.9
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
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Rising Mix of Recurring Revenue
Quarterly Revenue in $MMs
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12.4 12.9 13.8 13.5 14.7 15.0 15.1 14.7 15.5 16.3 16.6 16.7 16.7 17.2 17.7 17.3 19.3
15.4 14.8
18.6 17.8 12.7 13.1 11.9 11.6
11.9 11.9
14.0 12.6 10.6 10.7 10.0 11.3
10.0
27.8 27.7
32.4 31.4
27.4 28.0 27.0
26.3 27.4
28.2
30.6 29.3
27.3 27.9 27.7 28.6
29.3
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
Non Recurring
Recurring
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Growing Subscription Revenue Stream
Subscription & Maintenance Revenue in $MMs
% of revenue
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10.8 10.8 11.2 10.9 11.5 11.6 11.4 10.8 11.0 10.8 10.8 10.4 10.3 10.2 10.2 9.2 9.5
1.6 2.0 2.6 2.6
3.2 3.3 3.7 3.8
4.5 5.5 5.8 6.3 6.4 7.0 7.5 8.1
9.8
12.4 12.9
13.8 13.5
14.7 15.0 15.1 14.7
15.5 16.3 16.6 16.7 16.7
17.2 17.7 17.3
19.3
46% 49% 46% 46%54% 53% 56% 56% 56% 58% 54% 57% 61% 62% 64% 60%
66%
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
Subscription
Maintenance
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Gross Margin ExpansionGross Profit in $MMs Non-GAAP Subscription Gross Margin*
*Non-GAAP subscription gross profit and gross margin excludes amortization of capitalized software
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3.1
4.0 4.3 4.5 4.6
4.9 5.3
5.6
7.4 69.5%
73.5% 73.9%71.6% 71.7% 70.9%
70.7% 69.8%75.4%
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
Non-GAAP Subscription Gross Profit Non-GAAP Subscription Gross Margin
9.2 9.0 9.0 8.7 8.5 8.3 8.3 7.3 7.5
2.3 2.9 3.8 3.5 3.6 4.0 4.4 4.9
6.6
3.1 3.3 4.7
3.8 2.1 2.5 2.6 4.4
2.9 14.6 15.2
17.4 15.9
14.2 14.8 15.3 16.7 16.9
53.4% 53.8%57.0%
54.3%52.2% 53.1%
55.1%58.3% 57.7%
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
Subscription Gross Profit License & Services Gross Profit
Total Gross Profit Gross margin
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Sustained Profitability Amidst Cloud TransitionAdjusted EBITDA in $MMs
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5.3 5.0
6.1
4.5
2.8
3.9
4.6
3.5 3.5 3.5
5.3
3.9
3.1 2.8 2.9
3.7 3.7
19.8% 19.1% 20.3%
15.5%
10.2%
13.8%16.9%
13.3% 12.7% 12.5%
17.2%
13.3%11.4%
10.0% 10.4%13.0% 12.6%
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
Adjusted EBITDA Adjusted EBITDA Margin
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Improved Visibility from Backlog Growth
In 1Q 2022RPO was +63% y/y
Short-term +25% y/yLong-term +116% y/y
Remaining Performance Obligation (RPO) in $MMs
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45 45 50 46 44 43 44 53 55
27 30 30
31 31 35 36
62 67
72 76 80 77 75 78 80
116 122
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
Short-term RPO Long-term RPO
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Current Valuation Metrics
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AMSWA Stock Price at 10/04/21 24.35$ Market Capitalization (Fully Diluted) 826,597$ Enterprise Value (Fully Diluted) 718,463$ Cash and Investments per share at 7/31/21: 3.19$ Current Dividend Yield: 1.81%Price/ Sales (TTM) 7.29Price/ Book (TTM) 6.53Enterprise Value/Revenue 7/31/21 (ttm): 6.34Enterprise Value/ EBITDA 7/31/21(ttm): 69.70
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Investment Highlights
Supply Chain Software Leader
Multi-Brand Strategy
Innovative Technology SaaS Transition
Strong Financial Position Disciplined Capital Allocation
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