American Software Inc (NASDAQ:AMSWA) Q4 2019 Earnings Conference Call Transcript

Jun 19, 2019 • 05:00 pm ET

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American Software Inc (NASDAQ:AMSWA) Q4 2019 Earnings Conference Call Transcript

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Presentation
Executive
Vincent Klinges

compared to $10.9 million. Our combined recurring revenue streams of maintenance and cloud services were 56% of total revenues for the current quarter, and that's up from 46% in the same period last year.

Looking at some of our overall costs, our gross margin was 54% for the current quarter that compares to 56% in the same period last year. The license fee margin was 34% for the current quarter, that compares to 46% in the same period last year, that's due to lower license fees and the relatively fixed expense, cost of amortization of cap software, amortization of intangible, that is non-cash.

Our subscription fees margin decreased to 47% compared to 60% in the same period last year, and that's primarily due to a true-up allocation of a non-cash amortization of cap software, which was $1.1 million of the total $2 million of costs due to the overall increase of subscription revenue. So the gross margin without the non-cash cap software allocation would have been 77%.

Our services margin decreased to 30% compared to 39% in the last -- in the same period last year, and that's due to timing of implementation projects. Our maintenance margin increased to 82% for the current quarter, and that compares to 78% in the same period last year.

So looking at operating expenses, our gross R&D expenses were 19% of total revenues for the current period compared to 16% in the same period last year, and that's due to increased development efforts. As a percentage of revenues, our sales and marketing expenses were 22% of revenues for the current quarter compared to 19% in the same period last year, and that's primarily due to expenses related to our customer conference, which was held in March for approximately $600,000 this year.

G&A expenses were 16% of total revenues for the current and prior year quarter. So our operating income decreased 59% to $1 million for the current quarter compared to $2.5 million in the same quarter last year.

Adjusted EBITDA, which excludes stock-based compensation, decreased 23% to $3.5 million this quarter -- current quarter compared to $4.5 million in the same period last year. So our GAAP net income increased 48% to $1.9 million or earnings per diluted share of $0.06 for the current quarter compared to net income of $1.3 million or $0.04 earnings per diluted share. Our adjusted net income was $2.7 million or adjusted -- earnings per diluted share of $0.09 for the fourth quarter compared to net income of $2 million or $0.06 earnings per share. And these adjusted numbers exclude the amortization of intangibles related to acquisitions and stock-based compensation expense.

International revenues this quarter increased to 22% of total revenues, and that compares to 17% in the prior year quarter.

So taking a look at the full year fiscal '19 compared to the same period last year, our total revenues decreased 4% to $108.7 million compared to $112.7 million over the same period last year. Subscription fees were