global provider of supply chain management and enterprise ... · supply chain management and...

Global Provider of Supply Chain Management and Enterprise Software Solutions

NASDAQ: AMSWA

July 2018

Allan Dow Vincent Klinges

President Chief Financial Officer

Copyright © 2018. American Software

Forward Looking Statements

This presentation may include statements that may constitute “forward-looking statements,” including

estimates of future business prospects or financial results and statements containing the words

“believe,” “expect,” or similar expressions. Any forward-looking statements herein are made pursuant

to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. There are many

factors that could cause actual results of American Software to differ materially from those

anticipated by forward-looking statements made herein. These factors include continuing economic

uncertainty, the timing and degree of business recovery, unpredictability and the irregular pattern 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 software errors, and risks associated with market acceptance of the

Company’s products and services as well as a number of other risk factors that could affect the future

performance of the Company. Please refer to a discussion of these factors and others in the Company's

most recent Annual Report on Form 10-K and in its Quarterly Reports on Form 10-Q and other reports

and documents subsequently filed with the Securities and Exchange Commission. For more information

about risks the Company could face as well as other information, contact Vincent C. Klinges, Chief

Financial 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].


Investment Highlights

Supply Chain

Software Applications

Large, Diversified

Customer BaseApproximately 1,350 customers

in over 80 Countries

Rapid Deployment

and Significant ROI

for Customers

Direct and Indirect

Global Sales Channels

Shareholder ValueDividend Yield of 2.91%

Over 14 Consecutive Years of Dividend Payments to Shareholders

Financial Strength to Invest, Compete and Win

Over 17 years of Profitability

Substantial Recurring Revenues

Strong Balance Sheet with $87.8M in Cash &

Investments as of 4/30/18 and No Debt


Revenue Contributions ($000’s)

82%

16%

2%

Three Business Segments

Supply Chain Management IT Solutions ERP

Trailing 12 months 4/30/18 (Q4’FY18):

SCM - Logility $91,614

IT Solutions $18,460

ERP $ 2,630

Total $112,704


Supply Chain ManagementCollaboration, Workflow, Exception Alerts & Notification

Product Life CycleSupply Chain

Planning

Sourcing &

Compliance

Supply Chain

ExecutionRetail Planning

• Line Plans

• Tech Packs and Data

Management

• Product Design

• Costing

• Sample Management

• Demand Planning

• Inventory Optimization

• Production and

Distribution Planning

• Sales and Operations

Planning and

Integrated Business

Planning

• Service Parts Planning

• Strategic Network

Design

• Supply Chain

Performance

Management/Analytics

• Spending Analysis

• Strategic Sourcing

• Supply Base

Management

• Supply Profiles and

Score Cards

• Vendor Onboarding

• CSR and GMP Audits

• Compliance Packets

• Distributed Order

Management

• Warehouse

Management System

• Transportation

Management System

• Global Trade

Management

• Quality Management &

Audits

• Regulatory Document

Management

• Merchandise Planning

• Channel Projections

• Assortment Planning

• Size & Pack

Optimization

• Allocation

Replenishment

Supply Chain Optimization and Retail Planning Framework


Supply Chain Management Growth

Market Forecast 2016 to 2022

The Supply Chain Management (SCM)

market will exceed $15 billion in total

software revenue by 2019 and reach

nearly $20 billion by 2022.

This represents a CAGR of 9.7%

through 2022.


Transition to Cloud Revenue

FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY17 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY18 Q1 FY18 Q2 FY18 Q3 FY18 Q4

Total 2,947 3,112 3,325 3,838 4,012 4,433 4,873 6,093 7,706 9,901 10,934 12,659

% of Revenue 3% 3% 3% 3% 4% 4% 5% 6% 7% 9.40% 9.08% 10.78%

$2,947 $3,112 $3,325$3,838 $4,012

$4,433$4,873

$6,093

$7,706

$9,901

$10,934

$12,659

3% 3%3%

3%4%

4%5%

6%

7%

9.40%9.08%

10.78%

0%

2%

4%

6%

8%

10%

12%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

US$

Annual Contract Value (ACV), (,000)

Cloud ServicesAnnual Contract Value (ACV) (,000)

Total

% of Revenue

108%

Increase


Logility Overview and

Track Record of Innovation

40+ Years as a Global Provider of Supply Chain and

Retail Optimization Solutions

Over 1,350 Customers in more than 80 Countries

Industry Focused and Functional Depth

Multi Brand Strategy:

Purpose built solutions to meet customer needsOnly SCM solution provider to serve Global 1000, large, medium and small companies

Excellent Customer Service, Experienced

Development, Implementation and Support Teams


Solution Overview & Industry Verticals

Logility Customer Base

Consumer

Goods

Process/Chemical

Aftermarket

Service Parts

Wholesale

Distribution

Retail

Life Sciences

45%

16%

15%

9%

8%

7%

Award Winning

InnovationSolving Today’s Challenges and Harnessing

Tomorrow’s Opportunities


Diversified Customer Base

Consumer GoodsSoftgoods/

Apparel

Durable Goods/

Service Parts Retail Life Sciences Process/Chemical


Customer Success Proof Points

Accelerated S&OP process by 25%, improved in-stock rates by +14% and increased fill rates by 7%

Achieved 80% Automated Replenishment to gain precision and accelerate merchandise sell through

Simplified new product launch process and automatically mapped regional demand forecasts into a national view for a network of 650 beer distributors

Reduced Inventory by 17% across a global distribution network

Reduced Inventory by 27% while improving customer service fill rates by 8-10%


Gartner Magic QuadrantSales & Operations Planning System of Differentiation

Tim Payne, Research Vice President

S&OP Magic Quadrant, May 2017

“Logility’s vision for multi-enterprise

planning and leveraging a strong planning

system of record with respond planning

capability is above average.”

Overall customer satisfaction is above

average for both Logility and Demand

Solutions brands

AB

ILIT

YT

O E

XE

CU

TE

COMPLETENESS OF VISION As of May 2017

Source: Gartner


Logility fully provides all RAMA

capabilities and leverages 12

advanced analytics types extensively

throughout its application suite

Logility has an extensive

implementation footprint, and its

references indicated the highest

propensity to select and use it again

Gartner Magic QuadrantRetail Assortment Management Applications (RAMA)

AB

ILIT

YT

O E

XE

CU

TE

COMPLETENESS OF VISION As of September 2017

Source: Gartner

Bob Hetu, Research Director, Retail

RAMA Magic Quadrant, Sept 2017


Top 7 User Wants in Supply Chain Systems

Improve supply chain visibility and transparency

Enhance decision making with business intelligence (BI) and analytics

Advance the maturity of S&OP / Integrated Business Planning processes

Optimize asset and inventory

Segment, collaborate with and service customers

Redesign the supply chain / network

Enhance visibility into manufacturing capabilities to match supply /

demand

Source: 2016 Gartner User Wants and Needs Survey


Transformation is Coming

48%CEOs that expect their

supply-chain-intensive industries

to be substantially or

unrecognizably transformed

by 2020

2016 CEO Survey: Implications for CSCOs

Gartner, June 2016

Accelerating Planning Technology Evolution


Forces Redefining Planning Processes

Big Data and

AnalyticsSocial Media Cloud and

Pervasive

Access

Talent Speed


Creating the Connected Enterprise

Connect disparate systems landscape

Synchronize global operations

Tackle large data volumes

Streamline Master Data Management

Leverage Artificial Intelligence to

boost data quality and integrity

Accelerate adoption

Leverage available Talent pools


Concept to Customer within One Supply Chain Platform

Operational Plan Scenario Analysis Digital Twin

Voyager, Andromeda, DSX, Halo

Integrated Business Planning

Industry Practices

Inventory Optimization

Vendor Compliance

Product Life Cycle Management

Demand Optimization

Manufacturing Optimization

Quality Control

Prescriptive Implementation

Supply Optimization

Retail Optimization

Supply Chain Management

Integration

as a Service

Digital

Supply Chain

Advanced

AnalyticsCollaborative

Control Tower

Optimization

& Scenarios


Automating Planning and Decision Support

General

Information

Use of historical data

Specific

Information

Statistical Forecasting

Advisory

Guidance

Automated Alerts (Planning Systems, Production Equipment)

Opt-In

Automation

Try Multiple Forecasting Models and recommend the best fit

Automation

that can be

Over-ridden

Automatic Reorder points for replenishment

Non-optional

Automation

Take responsibility for

this task and don’t let me

or anyone else interfere

Source: Gartner 2017


Comprehensive Analytics Platform

Flexibility and Analytic Power:

1. Supply Chain MDM: Connect to, blend,

store and manage data from

heterogeneous applications and

database source

2. Advanced Analytics: Visualization,

reporting and analytics for business

managers

3. Cognitive Planning: Modeling and

Simulation, Machine Learning,

Artificial Intelligence, rich data

sources

Specialized,

Vertical Data

Syndicat

ed Market

Data

Enterprise

Systems

Big Data &

Unstructured

Data


Sentiment Analysis

1. Create base Demand forecast

2. Scrape Sentiment From Twitter or other Big Data Sources

3. Analyze Sentiment using proprietary libraries:

• NTLK (python)

• Sentiment 140,

• others

4. Add Sentiment Signal to Forecast

Topic Location Date Sentiment

#beer Alaska May 2016 Positive

#beer California June 2016 Negative

#beer Alaska July 2016 Positive

#beer California Aug 2016 Negative

Desired Output :

Sentiment by location and time.


Natural Language Processing

Simple #cruises Coronet has the best lines of all day cruisers. [positive]

#cars Tesla builds the best vehicles. [positive]

#shopping There were lots of people at Macy’s. [neutral]

#trains I dislike train travel. [negative]

More Complicated

Budweiser tastes better than Heineken. (Two brand names, identifying target of attitude is difficult).

I do not dislike Pale Ale. (Negation handling)

omgg igm sO wastd (Newly minted terms/ spelling errors can be highly attitudinal but volatile in polarity and often out of known vocabulary.)

Dissing wine is not really my thing. (Negation handling, inverted word order)

I’d really, truly love this kind of beverage! (Possibly sarcastic)


Sentiment Enhanced Forecast

Topic Location Date Sentiment

Kegs Atlanta Mar 2016 0.2

Kegs Atlanta Apr 2016 -0.5

Kegs Atlanta May 2016 0.6

Kegs Atlanta June 2016 -0.2

Sentiment By Location

Positive

Negative

Neutral

Ma

r

Ap

r

Ma

y

Jun

Sentiment By Time Sentiment Analyser

A. Base

forecast

B. Project To

New Product

C. Add

Sentiment

Signal


Recent Strategic Acquisitions

Inventory Optimization, March 2010

Advanced Planning & Scheduling, August 2012

Retail Optimization Solutions, May 2014

Enterprise Integration, August 2016

Advanced Analytics and Artificial Intelligence (AI), November 2017


Acquisition Candidate Criteria

Synergistic with Logility’s core competencies

Proven success in new market segments

Productive sales channel

Expand international presence

Relatively high recurring revenue mix

Accretive transaction


American Software Financial Metrics at Q4 FY18

Profitable for over 17 consecutive years

Quarterly Dividend Increased to $0.11 cents in FY17 with a yield of

2.91%

International Revenue was 19% of ASI and 26% of Logility in FY18

Metric At 4/30/18

Cash & Investments $87.8 million ($2.88 per share)

EBITDA $19.6 million (TTM)

Debt/Equity Ratio No Debt

Days Sales Outstanding 68


Revenue and Earnings: Last 5 Years

$0

$20

$40

$60

$80

$100

FY14 FY15 FY16 FY17 FY18

$73 $75

$87 $84$92

$25 $25 $24$20 $18

$2 $2 $3 $3 $3

$101 $103$114

$106

$113

SCM TPM ERP

Revenue by Business

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0


$57$52

$60$55

$63

57%51%

52%52%

56%

Gross Profit & Margin

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0


$15

$9

$14

$8

$14

14%

9%

12%

7%

12%

Operating Profit and Margin

$0

$10

$20

$30

$40

$50

$60


$36$39

$41 $42 $44$44$46

$48$44 $45

$20$17

$22

$16 $15

$101 $103$114

$106 $113

Revenue by Type

Maintenance Services & Other License Fees


Revenue and Earnings: Last 5 Quarters

$0

$5

$10

$15

$20

$25

$30

$35

4Q17 1Q18 2Q18 3Q18 4Q18

$21 $22 $21

$25$24

$4 $4 $5 $5 $5

$1 $1 $1 $1 $1

$26$27 $26

$30 $29

SCM TPM ERP

Revenue by Business

$0.0

$4.0

$8.0

$12.0

$16.0

4Q17 1Q18 2Q18 3Q18 4Q18

$14$15 $14

$17 $16

55%

57%

53%

57% 56%

Gross Profit & Margin

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

4Q17 1Q18 2Q18 3Q18 4Q18

$3.0

$3.6 $3.2

$4.2

$2.511% 13% 12%

14%

8%

Operating Profit and Margin

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

4Q17 1Q18 2Q18 3Q18 4Q18

$10 $11 $11 $11 $11$12 $12

$13 $13

$16

$4 $4

$2

$6

$3

$26 $27 $26 $30

$29Revenue by Type

Maintenance Services & Other License Fees


Current Valuation Metrics

AMSWA Stock Price at 7/25/18: 15.11$

Market Capitalization (Fully Diluted) 460,507$

Enterprise Value (Fully Diluted) 372,699$

Cash and Investments per share at 4/30/18: 2.88$

Current Dividend Yield: 2.91%

Trailing P/E Ratio 38.20

Price/ Sales (TTM) 4.09

Price/ Book (TTM) 4.09

Enterprise Value/Revenue 4/30/18 (ttm): 3.31

Enterprise Value/ EBITDA 4/30/18(ttm): 19.05

Thank You!NASDAQ: AMSWA

www.amsoftware.com

www.logility.com

www.demandsolutions.com

www.ngcsoftware.com

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