falsedesktopAMSWA2020-10-31000162828020017098{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☐\tAccelerated Filer\t☒\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "Classes\tOutstanding at December 1 2020\nClass A Common Stock $.10 par value\t30764645 Shares\nClass B Common Stock $.10 par value\t1821587 Shares\n", "q10k_tbl_2": "Page No\t\t\nPart I-Financial Information\t\t\nItem 1.\tFinancial Statements (Unaudited)\t\n\tCondensed Consolidated Balance Sheets as of October 31 2020 and April 30 2020\t3\n\tCondensed Consolidated Statements of Operations for the Three and Six Months ended October 31 2020 and 2019\t4\n\tCondensed Consolidated Statements of Shareholders' Equity for the Three and Six Months ended October 31 2020 and 2019\t5\n\tCondensed Consolidated Statements of Cash Flows for the Six Months ended October 31 2020 and 2019\t6\n\tNotes to Condensed Consolidated Financial Statements - Unaudited\t7\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t22\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t37\nItem 4.\tControls and Procedures\t38\nPart II-Other Information\t\t\nItem 1.\tLegal Proceedings\t39\nItem 1A.\tRisk Factors\t39\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t39\nItem 3.\tDefaults Upon Senior Securities\t39\nItem 4.\tMine Safety Disclosures\t39\nItem 5.\tOther Information\t39\nItem 6.\tExhibits\t39\nSignatures\t\t40\n", "q10k_tbl_3": "\tOctober 31 2020\tApril 30 2020\nASSETS\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t81786\t79814\nInvestments\t12357\t14161\nTrade accounts receivable less allowance for doubtful accounts of $372 at October 31 2020 and $264 at April 30 2020:\t\t\nBilled\t18499\t22582\nUnbilled\t2499\t2425\nPrepaid expenses and other current assets\t6673\t6684\nTotal current assets\t121814\t125666\nInvestments-noncurrent\t472\t701\nProperty and equipment net of accumulated depreciation of $30269 at October 31 2020 and $29959 at April 30 2020\t3225\t3373\nCapitalized software net of accumulated amortization of $36871 at October 31 2020 and $34611 at April 30 2020\t6473\t8362\nGoodwill\t25888\t25888\nOther intangibles net of accumulated amortization of $12867 at October 31 2020 and $12243 at April 30 2020\t509\t1132\nLease right of use assets\t1813\t2053\nDeferred sales commissions-noncurrent\t1909\t2177\nOther assets\t1899\t1941\nTotal assets\t164002\t171293\nLIABILITIES AND SHAREHOLDERS' EQUITY\t\t\nCurrent liabilities:\t\t\nAccounts payable\t1640\t1643\nAccrued compensation and related costs\t3139\t6635\nDividends payable\t3576\t3547\nOperating lease obligations\t797\t763\nOther current liabilities\t790\t643\nDeferred revenue\t31206\t34227\nTotal current liabilities\t41148\t47458\nDeferred income taxes\t2553\t2897\nLong-term operating lease obligations\t1137\t1424\nOther long-term liabilities\t111\t92\nTotal liabilities\t44949\t51871\nShareholders' equity:\t\t\nCommon stock:\t\t\nClass A $.10 par value. Authorized 50000000 shares: 35277846 (30689214 net) shares issued and outstanding respectively at October 31 2020 and 35000649 (30412017 net) shares issued and outstanding respectively at April 30 2020\t3528\t3500\nClass B $.10 par value. Authorized 10000000 shares: 1821587 shares issued and outstanding at October 31 2020 and April 30 2020; convertible into Class A Common Shares on a one-for-one basis\t182\t182\nAdditional paid-in capital\t154335\t150312\nRetained deficit\t(13433)\t(9013)\nClass A treasury stock 4588632 shares at October 31 2020 and April 30 2020 at cost\t(25559)\t(25559)\nTotal shareholders' equity\t119053\t119422\nCommitments and contingencies\t\t\nTotal liabilities and shareholders' equity\t164002\t171293\n", "q10k_tbl_4": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nRevenues:\t\t\t\t\nSubscription fees\t6966\t5492\t13329\t9950\nLicense\t450\t1046\t1237\t2824\nProfessional services and other\t10242\t10826\t20056\t20963\nMaintenance\t10223\t10846\t20537\t21856\nTotal revenues\t27881\t28210\t55159\t55593\nCost of revenues:\t\t\t\t\nSubscription fees\t2946\t2610\t5705\t4735\nLicense\t553\t1007\t1228\t2387\nProfessional services and other\t7624\t7543\t15454\t14948\nMaintenance\t1941\t1864\t3714\t3715\nTotal cost of revenues\t13064\t13024\t26101\t25785\nGross margin\t14817\t15186\t29058\t29808\nResearch and development\t4337\t4209\t8432\t7537\nSales and marketing\t5429\t5148\t10173\t10727\nGeneral and administrative\t4367\t4908\t8831\t9729\nAmortization of acquisition-related intangibles\t53\t78\t106\t175\nTotal operating expenses\t14186\t14343\t27542\t28168\nOperating income\t631\t843\t1516\t1640\nOther income:\t\t\t\t\nInterest income\t97\t400\t223\t875\nOther net\t(139)\t312\t1067\t362\nEarnings before income taxes\t589\t1555\t2806\t2877\nIncome tax (benefit)/expense\t(103)\t(204)\t80\t(34)\nNet earnings\t692\t1759\t2726\t2911\nEarnings per common share (a):\t\t\t\t\nBasic\t0.02\t0.06\t0.08\t0.09\nDiluted\t0.02\t0.05\t0.08\t0.09\nCash dividends declared per common share\t0.11\t0.11\t0.22\t0.22\nShares used in the calculation of earnings per common share:\t\t\t\t\nBasic\t32489\t31609\t32414\t31440\nDiluted\t32896\t32310\t32919\t32066\n", "q10k_tbl_5": "\tCommon stock\t\t\t\tAdditional paid-in capital\tRetained deficit\tTreasury stock\tTotal shareholders' equity\n\tClass A\t\tClass B\t\nFor the Three Months Ended October 31 2019\tShares\tAmount\tShares\tAmount\nBalance at July 31 2019\t34131239\t3413\t1821587\t182\t140195\t(4028)\t(25559)\t114203\nProceeds from stock options exercised\t499443\t50\t0\t0\t4856\t0\t0\t4906\nStock-based compensation\t0\t0\t0\t0\t503\t0\t0\t503\nNet earnings\t0\t0\t0\t0\t0\t1759\t0\t1759\nDividends declared*\t0\t0\t0\t0\t0\t(3505)\t0\t(3505)\nBalance at October 31 2019\t34630682\t3463\t1821587\t182\t145554\t(5774)\t(25559)\t117866\nFor the Three Months Ended October 31 2020\t\t\t\t\t\t\t\t\nBalance at July 31 2020\t35231396\t3523\t1821587\t182\t153218\t(10550)\t(25559)\t120814\nProceeds from stock options exercised\t46450\t5\t0\t0\t466\t0\t0\t471\nStock-based compensation\t0\t0\t0\t0\t651\t0\t0\t651\nNet earnings\t0\t0\t0\t0\t0\t692\t0\t692\nDividends declared*\t0\t0\t0\t0\t0\t(3575)\t0\t(3575)\nBalance at October 31 2020\t35277846\t3528\t1821587\t182\t154335\t(13433)\t(25559)\t119053\n", "q10k_tbl_6": "\tCommon stock\t\t\t\tAdditional paid-in capital\tRetained deficit\tTreasury stock\tTotal shareholders' equity\n\tClass A\t\tClass B\t\nFor the Six Months Ended October 31 2019\tShares\tAmount\tShares\tAmount\nBalance at April 30 2019\t33979739\t3398\t1821587\t182\t138315\t(1729)\t(25559)\t114607\nProceeds from stock options exercised\t650943\t65\t0\t0\t6293\t0\t0\t6358\nStock-based compensation\t0\t0\t0\t0\t946\t0\t0\t946\nNet earnings\t0\t0\t0\t0\t0\t2911\t0\t2911\nDividends declared*\t0\t0\t0\t0\t0\t(6956)\t0\t(6956)\nBalance at October 31 2019\t34630682\t3463\t1821587\t182\t145554\t(5774)\t(25559)\t117866\nFor the Six Months Ended October 31 2020\t\t\t\t\t\t\t\t\nBalance at April 30 2020\t35000649\t3500\t1821587\t182\t150312\t(9013)\t(25559)\t119422\nProceeds from stock options exercised\t277197\t28\t0\t0\t2825\t0\t0\t2853\nStock-based compensation\t0\t0\t0\t0\t1198\t0\t0\t1198\nNet earnings\t0\t0\t0\t0\t0\t2726\t0\t2726\nDividends declared*\t0\t0\t0\t0\t0\t(7146)\t0\t(7146)\nBalance at October 31 2020\t35277846\t3528\t1821587\t182\t154335\t(13433)\t(25559)\t119053\n", "q10k_tbl_7": "\tSix Months Ended October 31\t\n\t2020\t2019\nCash flows from operating activities:\t\t\nNet earnings\t2726\t2911\nAdjustments to reconcile net earnings to net cash provided by operating activities:\t\t\nDepreciation and amortization\t3194\t4428\nStock-based compensation expense\t1198\t946\nNet gain on investments\t(803)\t(356)\nDeferred income taxes\t(344)\t(131)\nChanges in operating assets and liabilities:\t\t\nPurchases of trading securities\t(285)\t(21412)\nProceeds from maturities and sales of trading securities\t3119\t16975\nAccounts receivable net\t4009\t2180\nPrepaid expenses and other assets\t322\t(1160)\nAccounts payable and other liabilities\t(3344)\t389\nDeferred revenue\t(3021)\t(720)\nNet cash provided by operating activities\t6771\t4050\nCash flows from investing activities:\t\t\nCapitalized computer software development costs\t(371)\t(1890)\nPurchases of property and equipment net of disposals\t(163)\t(238)\nNet cash used in investing activities\t(534)\t(2128)\nCash flows from financing activities:\t\t\nProceeds from exercise of stock options\t2853\t6358\nDividends paid\t(7118)\t(6884)\nNet cash used in financing activities\t(4265)\t(526)\nNet change in cash and cash equivalents\t1972\t1396\nCash and cash equivalents at beginning of period\t79814\t61288\nCash and cash equivalents at end of period\t81786\t62684\nSupplemental disclosure of cash flow information:\t\t\nCash paid during the period for:\t\t\nIncome taxes net of refunds\t205\t260\nSupplemental disclosures of noncash operating investing and financing activities:\t\t\nAccrual of dividends payable\t3576\t3505\n", "q10k_tbl_8": "\tOctober 31 2020\tApril 30 2020\n(in thousands)\t\nDeferred revenue current\t31206\t34227\nDeferred revenue long-term\t0\t0\nTotal deferred revenue\t31206\t34227\n", "q10k_tbl_9": "\tThree Months Ended October 31\t\t\t\tSix Months Ended October 31\t\t\n2020\t\t2019\t\t2020\t\t2019\n(in thousands)\t\t\t\t(in thousands)\t\t\nRevenues:\t\t\t\t\t\t\t\nDomestic\t23659\t\t22763\t\t46799\t\t44174\nInternational\t4222\t\t5447\t\t8360\t\t11419\n\t27881\t\t28210\t\t55159\t\t55593\n", "q10k_tbl_10": "\tOctober 31 2020\nAssets\t\nRight of use assets\t1813\nLiabilities\t\nCurrent lease liabilities\t797\nLong-term lease liabilities\t1137\nTotal liabilities\t1934\n", "q10k_tbl_11": "\tThree Months Ended October 31 2020\tSix Months Ended October 31 2020\nLease cost\t\t\nOperating lease cost\t197\t391\nShort-term lease cost\t161\t319\nVariable lease cost\t76\t145\nTotal lease cost\t434\t855\n", "q10k_tbl_12": "FY2021\t407\nFY2022\t711\nFY2023\t486\nFY2024\t361\nFY2025\t20\nThereafter\t0\nTotal operating lease payments\t1985\nLess imputed interest\t(51)\nTotal operating lease liabilities\t1934\n", "q10k_tbl_13": "FY2021\t93\nFY2022\t149\nFY2023\t96\nFY2024\t98\nFY2025\t100\nThereafter\t50\nTotal\t586\n", "q10k_tbl_14": "\tThree Months Ended October 31 2020\t\t\t\tSix Months Ended October 31 2020\t\t\nClass A Common Shares\t\tClass B Common Shares\t\tClass A Common Shares\t\tClass B Common Shares\nDistributed earnings\t0.11\t\t0.11\t\t0.22\t\t0.22\nUndistributed losses\t(0.09)\t\t(0.09)\t\t(0.14)\t\t(0.14)\nTotal\t0.02\t\t0.02\t\t0.08\t\t0.08\nDistributed earnings\t3375\t\t201\t\t6745\t\t402\nUndistributed losses\t(2722)\t\t(162)\t\t(4172)\t\t(249)\nTotal\t653\t\t39\t\t2573\t\t153\nBasic weighted average common shares outstanding\t30667\t\t1822\t\t30592\t\t1822\n", "q10k_tbl_15": "\tThree Months Ended October 31 2019\t\t\t\tSix Months Ended October 31 2019\t\t\nClass A Common Shares\t\tClass B Common Shares\t\tClass A Common Shares\t\tClass B Common Shares\nDistributed earnings\t0.11\t\t0.11\t\t0.22\t\t0.22\nUndistributed losses\t(0.05)\t\t(0.05)\t\t(0.13)\t\t(0.13)\nTotal\t0.06\t\t0.06\t\t0.09\t\t0.09\nDistributed earnings\t3303\t\t202\t\t6552\t\t403\nUndistributed losses\t(1645)\t\t(101)\t\t(3810)\t\t(234)\nTotal\t1658\t\t101\t\t2742\t\t169\nBasic weighted average common shares outstanding\t29787\t\t1822\t\t29618\t\t1822\n", "q10k_tbl_16": "\tUndistributed & Distributed Earnings to Class A Common Shares\tClass A Common Shares\tEPS*\nPer Basic\t653\t30667\t0.02\nCommon Stock Equivalents\t0\t407\t0\n\t653\t31074\t0.02\nClass B Common Share Conversion\t39\t1822\t0\nDiluted EPS for Class A Common Shares\t692\t32896\t0.02\n", "q10k_tbl_17": "\tUndistributed & Distributed Earnings to Class A Common Shares\tClass A Common Shares\tEPS*\nPer Basic\t2573\t30592\t0.08\nCommon Stock Equivalents\t0\t505\t0\n\t2573\t31097\t0.08\nClass B Common Share Conversion\t153\t1822\t0\nDiluted EPS for Class A Common Shares\t2726\t32919\t0.08\n", "q10k_tbl_18": "\tUndistributed & Distributed Earnings to Class A Common Shares\tClass A Common Shares\tEPS*\nPer Basic\t1658\t29787\t0.06\nCommon Stock Equivalents\t0\t701\t0\n\t1658\t30488\t0.05\nClass B Common Share Conversion\t101\t1822\t0\nDiluted EPS for Class A Common Shares\t1759\t32310\t0.05\n", "q10k_tbl_19": "\tUndistributed & Distributed Earnings to Class A Common Shares\tClass A Common Shares\tEPS*\nPer Basic\t2742\t29618\t0.09\nCommon Stock Equivalents\t0\t626\t0\n\t2742\t30244\t0.09\nClass B Common Share Conversion\t169\t1822\t0\nDiluted EPS for Class A Common Shares\t2911\t32066\t0.09\n", "q10k_tbl_20": "\tUndistributed & Distributed Earnings to Class B Common Shares\tClass B Common Shares\tEPS*\nPer Basic\t153\t1822\t0.08\nReallocation of undistributed earnings/losses from Class A Common Shares to Class B Common Shares\t4\t0\t0\nDiluted EPS for Class B Common Shares\t157\t1822\t0.09\n", "q10k_tbl_21": "\tUndistributed & Distributed Earnings to Class B Common Shares\tClass B Common Shares\tEPS*\nPer Basic\t101\t1822\t0.06\nReallocation of undistributed earnings/losses from Class A Common Shares to Class B Common Shares\t3\t0\t0\nDiluted EPS for Class B Common Shares\t104\t1822\t0.06\n", "q10k_tbl_22": "\tUndistributed & Distributed Earnings to Class B Common Shares\tClass B Common Shares\tEPS*\nPer Basic\t169\t1822\t0.09\nReallocation of undistributed earnings/losses from Class A Common Shares to Class B Common Shares\t6\t0\t0\nDiluted EPS for Class B Common Shares\t175\t1822\t0.10\n", "q10k_tbl_23": "\tOctober 31 2020\t\t\t\n\tQuoted Prices in Active Markets for Identical Assets (Level 1)\tSignificant Other Observable Inputs (Level 2)\tSignificant Unobservable Inputs (Level 3)\tBalance\nCash equivalents\t74902\t0\t0\t74902\nMarketable securities\t11725\t1104\t0\t12829\nTotal\t86627\t1104\t0\t87731\n", "q10k_tbl_24": "\tApril 30 2020\t\t\t\n\tQuoted Prices in Active Markets for Identical Assets (Level 1)\tSignificant Other Observable Inputs (Level 2)\tSignificant Unobservable Inputs (Level 3)\tBalance\nCash equivalents\t75256\t0\t0\t75256\nMarketable securities\t11758\t3104\t0\t14862\nTotal\t87014\t3104\t0\t90118\n", "q10k_tbl_25": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nRevenues:\t\t\t\t\nSupply Chain Management\t22297\t23487\t44033\t45834\nIT Consulting\t5033\t4158\t10059\t8536\nOther\t551\t565\t1067\t1223\n\t27881\t28210\t55159\t55593\nOperating income (loss):\t\t\t\t\nSupply Chain Management\t3983\t4360\t8087\t8211\nIT Consulting\t103\t(12)\t209\t166\nOther\t(3455)\t(3505)\t(6780)\t(6737)\n\t631\t843\t1516\t1640\nCapital expenditures:\t\t\t\t\nSupply Chain Management\t45\t44\t84\t75\nIT Consulting\t0\t0\t0\t0\nOther\t0\t84\t79\t163\n\t45\t128\t163\t238\nCapitalized software:\t\t\t\t\nSupply Chain Management\t126\t605\t371\t1890\nIT Consulting\t0\t0\t0\t0\nOther\t0\t0\t0\t0\n\t126\t605\t371\t1890\nDepreciation and amortization:\t\t\t\t\nSupply Chain Management\t1415\t2089\t3001\t4241\nIT Consulting\t0\t1\t1\t3\nOther\t99\t93\t192\t184\n\t1514\t2183\t3194\t4428\nEarnings (loss) before income taxes:\t\t\t\t\nSupply Chain Management\t3845\t4480\t8220\t8516\nIT Consulting\t103\t(12)\t207\t166\nOther\t(3359)\t(2913)\t(5621)\t(5805)\n\t589\t1555\t2806\t2877\n", "q10k_tbl_26": "\tThree Months Ended October 31\t\t\n\tPercentage of Total Revenues\t\tPct. Change in Dollars\n\t2020\t2019\t2020 vs. 2019\nRevenues:\t\t\t\nSubscription fees\t25%\t19%\t27%\nLicense\t2%\t4%\t(57)%\nProfessional services and other\t37%\t38%\t(5)%\nMaintenance\t36%\t39%\t(6)%\nTotal revenues\t100%\t100%\t(1)%\nCost of revenues:\t\t\t\nSubscription fees\t11%\t9%\t13%\nLicense\t2%\t4%\t(45)%\nProfessional services and other\t27%\t26%\t1%\nMaintenance\t7%\t7%\t4%\nTotal cost of revenues\t47%\t46%\t-%\nGross margin\t53%\t54%\t(2)%\nResearch and development\t16%\t15%\t3%\nSales and marketing\t19%\t18%\t5%\nGeneral and administrative\t16%\t17%\t(11)%\nAmortization of acquisition-related intangibles\t-%\t-%\t(32)%\nTotal operating expenses\t51%\t50%\t(1)%\nOperating income\t2%\t4%\t(25)%\nOther income:\t\t\t\nInterest income\t-%\t1%\t(76)%\nOther net\t-%\t1%\tnm\nEarnings before income taxes\t2%\t6%\t(62)%\nIncome tax expense\t-%\t(1)%\t(50)%\nNet earnings\t2%\t7%\t(61)%\n", "q10k_tbl_27": "\tSix Months Ended October 31\t\t\n\tPercentage of Total Revenues\t\tPct. Change in Dollars\n\t2020\t2019\t2020 vs. 2019\nRevenues:\t\t\t\nSubscription fees\t24%\t18%\t34%\nLicense\t2%\t5%\t(56)%\nProfessional services and other\t36%\t38%\t(4)%\nMaintenance\t38%\t39%\t(6)%\nTotal revenues\t100%\t100%\t(1)%\nCost of revenues:\t\t\t\nSubscription fees\t10%\t9%\t20%\nLicense\t2%\t4%\t(49)%\nProfessional services and other\t28%\t26%\t3%\nMaintenance\t7%\t7%\t-%\nTotal cost of revenues\t47%\t46%\t1%\nGross margin\t53%\t54%\t(3)%\nResearch and development\t15%\t14%\t12%\nSales and marketing\t18%\t19%\t(5)%\nGeneral and administrative\t16%\t18%\t(9)%\nAmortization of acquisition-related intangibles\t-%\t-%\t(39)%\nTotal operating expenses\t49%\t51%\t(2)%\nOperating income\t4%\t3%\t(8)%\nOther income:\t\t\t\nInterest income\t-%\t1%\t(75)%\nOther net\t2%\t1%\tnm\nEarnings before income taxes\t6%\t5%\t(2)%\nIncome tax expense\t-%\t-%\tnm\nNet earnings\t6%\t5%\t(6)%\n", "q10k_tbl_28": "\tThree Months Ended October 31\t\t\t\t\n\t\t\t\t% of Total Revenue\t\n\t2020\t2019\t% Change\t2020\t2019\n\t(in thousands)\t\t\t\t\nSubscription fees\t6966\t5492\t27%\t25%\t19%\nLicense\t450\t1046\t(57)%\t2%\t4%\nProfessional services and other\t10242\t10826\t(5)%\t37%\t38%\nMaintenance\t10223\t10846\t(6)%\t36%\t39%\nTotal revenues\t27881\t28210\t(1)%\t100%\t100%\n", "q10k_tbl_29": "\tSix Months Ended October 31\t\t\t\t\n\t\t\t\t% of Total Revenue\t\n\t2020\t2019\t% Change\t2020\t2019\n\t(in thousands)\t\t\t\t\nSubscription fees\t13329\t9950\t34%\t24%\t18%\nLicense\t1237\t2824\t(56)%\t2%\t5%\nProfessional services and other\t20056\t20963\t(4)%\t36%\t38%\nMaintenance\t20537\t21856\t(6)%\t38%\t39%\nTotal revenues\t55159\t55593\t(1)%\t100%\t100%\n", "q10k_tbl_30": "\tThree Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nSupply Chain Management\t6966\t5492\t27%\nTotal subscription fees revenues\t6966\t5492\t27%\n", "q10k_tbl_31": "\tSix Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nSupply Chain Management\t13329\t9950\t34%\nTotal subscription fees revenues\t13329\t9950\t34%\n", "q10k_tbl_32": "\tThree Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nSupply Chain Management\t434\t1017\t(57)%\nOther\t16\t29\t(45)%\nTotal license revenues\t450\t1046\t(57)%\n", "q10k_tbl_33": "\tSix Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nSupply Chain Management\t1221\t2724\t(55)%\nOther\t16\t100\t(84)%\nTotal license revenues\t1237\t2824\t(56)%\n", "q10k_tbl_34": "\tThree Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nSupply Chain Management\t4981\t6440\t(23)%\nIT Consulting\t5033\t4158\t21%\nOther\t228\t228\t-%\nTotal professional services and other revenues\t10242\t10826\t(5)%\n", "q10k_tbl_35": "\tSix Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nSupply Chain Management\t9556\t11932\t(20)%\nIT Consulting\t10059\t8536\t18%\nOther\t441\t495\t(11)%\nTotal professional services and other revenues\t20056\t20963\t(4)%\n", "q10k_tbl_36": "\tThree Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nSupply Chain Management\t9916\t10537\t(6)%\nOther\t307\t309\t(1)%\nTotal maintenance revenues\t10223\t10846\t(6)%\n", "q10k_tbl_37": "\tSix Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nSupply Chain Management\t19927\t21228\t(6)%\nOther\t610\t628\t(3)%\nTotal maintenance revenues\t20537\t21856\t(6)%\n", "q10k_tbl_38": "\tThree Months Ended October 31\t\t\t\tSix Months Ended October 31\t\t\t\n\t2020\t%\t2019\t%\t2020\t%\t2019\t%\nGross margin on subscription fees\t4020\t58%\t2882\t53%\t7624\t57%\t5215\t52%\nGross margin on license fees\t(103)\t(23)%\t39\t4%\t9\t1%\t437\t16%\nGross margin on professional services and other\t2618\t26%\t3283\t30%\t4602\t23%\t6015\t29%\nGross margin on maintenance\t8282\t81%\t8982\t83%\t16823\t82%\t18141\t83%\nTotal gross margin\t14817\t53%\t15186\t54%\t29058\t53%\t29808\t54%\n", "q10k_tbl_39": "\tThree Months Ended October 31\t\t\t\tSix Months Ended October 31\t\t\t\n\t2020\t2019\t% of Revenues\t\t2020\t2019\t% of Revenues\t\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\t\t\t\t\nResearch and development\t4337\t4209\t16%\t15%\t8432\t7537\t15%\t14%\nSales and marketing\t5429\t5148\t19%\t18%\t10173\t10727\t18%\t19%\nGeneral and administrative\t4367\t4908\t16%\t17%\t8831\t9729\t16%\t18%\nAmortization of acquisition-related intangible assets\t53\t78\t-%\t-%\t106\t175\t-%\t-%\nOther income net\t(42)\t712\t-%\tnm\t1290\t1237\t2%\t2%\nIncome tax expense/(benefit)\t(103)\t(204)\t-%\tnm\t80\t(34)\t-%\tnm\n", "q10k_tbl_40": "\tThree Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nTotal capitalized computer software development costs\t126\t605\t(79)%\nPercentage of gross product research and development costs\t3%\t13%\t\nTotal research and development expense\t4337\t4209\t3%\nPercentage of total revenues\t16%\t15%\t\nTotal gross product research and development expense and capitalized computer software development costs\t4463\t4814\t(7)%\nPercentage of total revenues\t16%\t17%\t\nTotal amortization of capitalized computer software development costs *\t1042\t1650\t(37)%\n", "q10k_tbl_41": "\tSix Months Ended October 31\t\t\n\t2020\t2019\t% Change\n\t(in thousands)\t\t\nTotal capitalized computer software development costs\t371\t1890\t(80)%\nPercentage of gross product research and development costs\t4%\t20%\t\nTotal research and development expense\t8432\t7537\t12%\nPercentage of total revenues\t15%\t14%\t\nTotal gross product research and development expense and capitalized computer software development costs\t8803\t9427\t(7)%\nPercentage of total revenues\t16%\t17%\t\nTotal amortization of capitalized computer software development costs *\t2260\t3137\t(28)%\n", "q10k_tbl_42": "\tThree Months Ended October 31\t\t\tSix Months Ended October 31\t\t\n\t2020\t2019\t% Change\t2020\t2019\t% Change\n\t(in thousands)\t\t\t(in thousands)\t\t\nSupply Chain Management\t3983\t4360\t(9)%\t8087\t8211\t(2)%\nIT Consulting\t103\t(12)\tnm\t209\t166\t26%\nOther*\t(3455)\t(3505)\t(1)%\t(6780)\t(6737)\t1%\nTotal Operating Income\t631\t843\t(25)%\t1516\t1640\t(8)%\n", "q10k_tbl_43": "\tSix Months Ended October 31\t\n\t2020\t2019\nNet cash provided by operating activities\t6771\t4050\nNet cash used in investing activities\t(534)\t(2128)\nNet cash used in financing activities\t(4265)\t(526)\nNet change in cash and cash equivalents\t1972\t1396\n", "q10k_tbl_44": "\tAs of October 31 (in thousands)\t\n\t2020\t2019\nCash and cash equivalents\t81786\t62684\nShort and long-term investments\t12829\t31987\nTotal cash and short and long-term investments\t94615\t94671\nNet (decrease)/increase in total cash and investments (six months ended October 31)\t(61)\t6189\n", "q10k_tbl_45": "Exhibit 3.1\tAmended and Restated Articles of Incorporation and amendments thereto. (1) (P)\nExhibit 3.2\tAmended and Restated By-Laws dated May 18 2009. (2)\nExhibits 31.1-31.2.\tRule 13a-14(a)/15d-14(a) Certifications\nExhibit 32.1.\tSection 906 Certifications\nExhibit 101.INS\tXBRL Instance Document.\nExhibit 101.SCH\tXBRL Taxonomy Extension Schema Document.\nExhibit 101.CAL\tXBRL Taxonomy Extension Calculation Linkbase Document.\nExhibit 101.DEF\tXBRL Taxonomy Extension Definition Linkbase Document.\nExhibit 101.LAB\tXBRL Taxonomy Extension Label Linkbase Document.\nExhibit 101.PRE\tXBRL Taxonomy Extension Presentation Linkbase Document.\n"}{"bs": "q10k_tbl_3", "is": "q10k_tbl_4", "cf": "q10k_tbl_7"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number: 0-12456
_________________
AMERICAN SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
_________________
Georgia
58-1098795
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification Number)
470 East Paces Ferry Road, N.E.
Atlanta
Georgia
30305
(Address of principal executive offices)
(Zip Code)
(404) 261-4381
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock
AMSWA
NASDAQ Global Select Market
_________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, an emerging growth company or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “emerging growth company” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated Filer
☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the exchange act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Trade accounts receivable, less allowance for doubtful accounts of $372 at October 31, 2020 and $264 at April 30, 2020:
Billed
18,499
22,582
Unbilled
2,499
2,425
Prepaid expenses and other current assets
6,673
6,684
Total current assets
121,814
125,666
Investments—noncurrent
472
701
Property and equipment, net of accumulated depreciation of $30,269 at October 31, 2020 and $29,959 at April 30, 2020
3,225
3,373
Capitalized software, net of accumulated amortization of $36,871 at October 31, 2020 and $34,611 at April 30, 2020
6,473
8,362
Goodwill
25,888
25,888
Other intangibles, net of accumulated amortization of $12,867 at October 31, 2020 and $12,243 at April 30, 2020
509
1,132
Lease right of use assets
1,813
2,053
Deferred sales commissions—noncurrent
1,909
2,177
Other assets
1,899
1,941
Total assets
$
164,002
$
171,293
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
1,640
$
1,643
Accrued compensation and related costs
3,139
6,635
Dividends payable
3,576
3,547
Operating lease obligations
797
763
Other current liabilities
790
643
Deferred revenue
31,206
34,227
Total current liabilities
41,148
47,458
Deferred income taxes
2,553
2,897
Long-term operating lease obligations
1,137
1,424
Other long-term liabilities
111
92
Total liabilities
44,949
51,871
Shareholders’ equity:
Common stock:
Class A, $.10 par value. Authorized 50,000,000 shares: 35,277,846 (30,689,214, net) shares issued and outstanding respectively at October 31, 2020 and 35,000,649 (30,412,017, net) shares issued and outstanding respectively at April 30, 2020
3,528
3,500
Class B, $.10 par value. Authorized 10,000,000 shares: 1,821,587 shares issued and outstanding at October 31, 2020 and April 30, 2020; convertible into Class A Common Shares on a one-for-one basis
182
182
Additional paid-in capital
154,335
150,312
Retained deficit
(13,433)
(9,013)
Class A treasury stock, 4,588,632 shares at October 31, 2020 and April 30, 2020, at cost
(25,559)
(25,559)
Total shareholders’ equity
119,053
119,422
Commitments and contingencies
Total liabilities and shareholders’ equity
$
164,002
$
171,293
See accompanying notes to condensed consolidated financial statements—unaudited.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Three Months Ended October 31,
Six Months Ended October 31,
2020
2019
2020
2019
Revenues:
Subscription fees
$
6,966
$
5,492
$
13,329
$
9,950
License
450
1,046
1,237
2,824
Professional services and other
10,242
10,826
20,056
20,963
Maintenance
10,223
10,846
20,537
21,856
Total revenues
27,881
28,210
55,159
55,593
Cost of revenues:
Subscription fees
2,946
2,610
5,705
4,735
License
553
1,007
1,228
2,387
Professional services and other
7,624
7,543
15,454
14,948
Maintenance
1,941
1,864
3,714
3,715
Total cost of revenues
13,064
13,024
26,101
25,785
Gross margin
14,817
15,186
29,058
29,808
Research and development
4,337
4,209
8,432
7,537
Sales and marketing
5,429
5,148
10,173
10,727
General and administrative
4,367
4,908
8,831
9,729
Amortization of acquisition-related intangibles
53
78
106
175
Total operating expenses
14,186
14,343
27,542
28,168
Operating income
631
843
1,516
1,640
Other income:
Interest income
97
400
223
875
Other, net
(139)
312
1,067
362
Earnings before income taxes
589
1,555
2,806
2,877
Income tax (benefit)/expense
(103)
(204)
80
(34)
Net earnings
$
692
$
1,759
$
2,726
$
2,911
Earnings per common share (a):
Basic
$
0.02
$
0.06
$
0.08
$
0.09
Diluted
$
0.02
$
0.05
$
0.08
$
0.09
Cash dividends declared per common share
$
0.11
$
0.11
$
0.22
$
0.22
Shares used in the calculation of earnings per common share:
Basic
32,489
31,609
32,414
31,440
Diluted
32,896
32,310
32,919
32,066
______________
(a)Basic per share amounts are the same for Class A and Class B shares. Diluted per share amounts for Class A shares are shown above. Diluted earnings per share for Class B shares under the two-class method are $0.02 and $0.06 for the three months ended October 31, 2020 and 2019 and $0.09 and $0.10 for the six months ended October 31, 2020 and 2019. See Note E to the Condensed Consolidated Financial Statements.
See accompanying notes to condensed consolidated financial statements—unaudited.
Notes to Condensed Consolidated Financial Statements—Unaudited
October 31, 2020
A. Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete consolidated financial statements. In the opinion of our management, these Condensed Consolidated Financial Statements contain all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position at October 31, 2020, results of operations for the three and six months ended October 31, 2020 and 2019, consolidated statements of shareholders’ equity for the three and six months ended October 31, 2020 and 2019 and cash flows for the six months ended October 31, 2020 and 2019. The Company’s results for the three and six months ended October 31, 2020 are not necessarily indicative of the results expected for the full year. You should read these statements in conjunction with our audited consolidated financial statements and management’s discussion and analysis and results of operations included in our Annual Report on Form 10-K (the “Annual Report”) for the fiscal year ended April 30, 2020. The terms “fiscal 2021” and “fiscal 2020” refer to our fiscal years ending April 30, 2021 and 2020, respectively.
The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Note 1 in the Notes to the Consolidated Financial Statements for fiscal 2020 contained in the Annual Report describes the significant accounting policies that we have used in preparing our consolidated financial statements. On an ongoing basis, we evaluate our estimates, including, but not limited to, those related to revenue/reserves and allowances. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results could differ materially from these estimates under different assumptions or conditions.
Principles of Consolidation
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of American Software, Inc. (“American Software”) and its wholly-owned subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.
Recent Accounting Pronouncements
In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017–04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill to eliminate Step 2 from the goodwill impairment test. In addition, it eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. ASU 2017–04 is effective for the Company’s fiscal year beginning May 1, 2020. The new guidance is required to be applied on a prospective basis. The adoption of ASU 2017–04 did not have a material impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (A Consensus of the FASB Emerging Issues Task Force). ASU 2018-15 provides additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract. The new guidance amends the definition of a hosting arrangement and requires a customer in a hosting arrangement that is a service contract to capitalize certain implementation costs following the internal use software capitalization criteria within Accounting Standards Codification ("ASC") Subtopic 350-40.
We adopted ASU 2018-15 on May 1, 2020, applying the guidance prospectively, and the adoption of this standard did not have an impact on our consolidated financial statements. Historically we have not capitalized implementation costs associated with cloud computing arrangements that are service contracts following the guidance in Subtopic 350-40, but we will do so pursuant to the clarifications provided in the new guidance on a go forward basis.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. ASU No. 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. This guidance is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted.
On May 1, 2020, we adopted ASU 2016-13 using the modified retrospective method applied for all financial assets measured at amortized cost. In estimating the allowance for credit losses, we considered the age of the accounts receivable, our historical write-offs, and the historical creditworthiness of the customer, among other factors. Should any of these factors change, the estimates made by us will also change accordingly, which could affect the level of our future allowances. We also analyzed future expected credit losses given ever present changes to future risks in projected economic conditions and future risks of customer collection. The net impact of the adoption of ASU 2016-13 was immaterial on our consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes and changes in tax laws or rates, as well as clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 will be effective for the Company beginning May 1, 2021 and would require us to recognize a cumulative effect adjustment to the opening balance of reinvested earnings, if applicable. We do not expect our adoption of this guidance to have a material impact on our consolidated financial statements.
B. Revenue Recognition
We recognize revenue when we transfer control of the promised goods or services to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We derive our revenue from software licenses; maintenance services; consulting, implementation and training services; and Software-as-a-Service (“SaaS”), which includes a subscription to our software as well as maintenance, hosting and managed services.
The Company determines revenue recognition through the following steps:
Step 1 – Identification of the Contract with the Customer
Step 2 – Identification of Promised Goods and Services and Evaluation of Whether the Promised Goods and Services are Distinct Performance Obligations
Step 3 – Determination of the Transaction Price
Step 4 – Allocation of the Transaction Price to Distinct Performance Obligations
Step 5 – Attribution of Revenue for Each Distinct Performance Obligation
Nature of Products and Services
Subscription Fees. Subscription fees include SaaS revenues for the right to use the software for a limited period of time in an environment hosted by the Company or by a third party. The customer accesses and uses the software on an as-needed basis over the Internet or via a dedicated line; however, the customer has no right to take delivery of the software without incurring a significant penalty. The underlying arrangements typically include a single fee for the service that is billed monthly, quarterly or annually. The Company’s SaaS solutions represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Revenue from a SaaS solution is generally recognized ratably over the term of the arrangement.
Licenses. Our perpetual and term software licenses provide the customer with a right to use the software as it exists at the time of purchase. We recognize revenue for distinct software licenses once the license period has begun and we have made the software available to the customer.
Our software licenses are sold with maintenance under which we provide customers with telephone consulting, product updates on a when and if available basis, and releases of new versions of products previously purchased by the customer, as well as error reporting and correction services.
Professional Services and Other. Our services revenue consists of fees generated from consulting, implementation and training services, including reimbursements of out-pocket expenses in connection with our services. Services are typically
optional to our customers, and are distinct from our software. Fees for our services are separately priced and are generally billed on an hourly basis, and revenue is recognized over time as the services are performed. We believe the output method of hours worked provides the best depiction of the transfer of our services since the customer is receiving the benefit from our services as the work is performed. The total amount of expense reimbursement included in professional services and other revenue was approximately $12,000 and $16,000 for the three and six months ended October 31, 2020, respectively, and approximately $0.5 million and $0.9 million for the three and six months ended October 31, 2019, respectively.
Maintenance. Revenue is derived from maintenance under which we provide customers with telephone consulting, product updates on a when and if available basis, and releases of new versions of products previously purchased by the customer, as well as error reporting and correction services. Maintenance for licenses is renewable, generally on an annual basis, at the option of the customer. Maintenance terms typically range from one to three years. Revenue related to maintenance is generally paid in advance and recognized ratably over the term of the agreement since the Company is standing ready to provide a series of maintenance services that are substantially the same each period over the term; therefore, time is the best measure of progress.
Indirect Channel Revenue. We record revenues from sales made through the indirect sales channels on a gross basis, because we control the goods or services and act as the principal in the transaction. In reaching this determination, we evaluated sales through our indirect channel on a case-by-case basis and considered a number of factors including indicators of control such as the party having the primary responsibility to provide specified goods or services and the party having discretion in establishing prices.
Sales Taxes. We account for sales taxes collected from customers on a net basis.
Significant Judgments. Many of our contracts include multiple performance obligations. Our products and services generally do not require a significant amount of integration or interdependency; therefore, our products and services are generally not combined. We allocate the transaction price for each contract to each performance obligation based on the relative standalone selling price ("SSP") for each performance obligation within each contract.
We use judgment in determining the SSP for products and services. For substantially all performance obligations except on-premise licenses, we are able to establish SSP based on the observable prices of products or services sold separately to similar customers in comparable circumstances. We typically establish an SSP range for our products and services which is reassessed on a periodic basis or when facts and circumstances change. Our on-premise licenses historically have not been sold on a standalone basis, as the vast majority of all customers elect to purchase on-premise license maintenance and support contracts at the time of an on-premise license purchase. We are unable to establish the SSP for our on-premise licenses based on observable prices, as the same products are sold for a broad range of prices (that is, the selling price is highly variable) and a representative SSP is not discernible from past transactions or other observable evidence. As a result, the SSP for an on-premise license included in a contract with multiple performance obligations is determined by applying a residual approach, whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs, with any residual amount of transaction price allocated to on-premise license revenues. Maintenance and support contracts are generally priced as a percentage of the net fees paid by the customer to access the on-premise license.
Contract Balances. Timing of invoicing to customers may differ from timing of revenue recognition and these timing differences result in unbilled accounts receivables or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. Fees for our software licenses are generally due within 30 days of contract execution. We have an established history of collecting under the terms of our software license contracts without providing refunds or concessions to our customers. SaaS solutions and maintenance are typically billed in advance on a monthly, quarterly, or annual basis. Services are typically billed as performed. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts generally do not include significant financing component. The primary purpose of our invoicing terms is to provide customers with predictable ways to purchase our software and services, not to provide or receive financing. Additionally, we are applying the practical expedient to exclude any financing component from consideration for any contracts with payment terms of one year or less since we rarely offer terms extending beyond one year. The consideration in our customer contracts is fixed.
We have an unconditional right to consideration for all goods and services transferred to our customers. That unconditional right to consideration is reflected in billed and unbilled accounts receivable in the accompanying consolidated balance sheets in accordance with ASC Topic 606.
Deferred revenue consists of amounts collected prior to having completed the performance of maintenance, SaaS, hosting, and managed services. We typically invoice customers for cloud subscription and support fees in advance on a monthly, quarterly or annual basis, with payment due at the start of the cloud subscription or support term. During the three months ended October 31, 2020, we recognized $14.6 million of revenue that was included in the deferred revenue balance as
of July 31, 2020. During the six months ended October 31, 2020, we recognized $25 million of revenue that was included in the deferred revenue balance as of April 30, 2020.
October 31, 2020
April 30, 2020
(in thousands)
Deferred revenue, current
31,206
34,227
Deferred revenue, long-term
—
—
Total deferred revenue
$
31,206
$
34,227
Remaining Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under Topic 606. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer. The Company identifies and tracks the performance obligations at contract inception so that the Company can monitor and account for the performance obligations over the life of the contract. Remaining performance obligations represent the transaction price of orders for which products have not been delivered or services have not been performed. As of October 31, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $78.0 million. The Company expects to recognize revenue on approximately two-thirds of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter.
Disaggregated Revenue. The Company disaggregates revenue from contracts with customers by geography, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
The Company’s revenue by geography is as follows:
Three Months Ended October 31,
Six Months Ended October 31,
2020
2019
2020
2019
(in thousands)
(in thousands)
Revenues:
Domestic
$
23,659
$
22,763
$
46,799
$
44,174
International
4,222
5,447
8,360
11,419
$
27,881
$
28,210
$
55,159
$
55,593
Contract Costs. The Company capitalizes the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, a sales commission). The Company capitalizes the costs incurred to fulfill a contract only if those costs meet all of the following criteria:
a. The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify.
b. The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future.
c. The costs are expected to be recovered.
Certain sales commissions incurred by the Company were determined to be incremental costs to obtain the related contracts, which are deferred and amortized ratably over the economic benefit period. These deferred commission costs are classified as current or non-current based on the timing of when the Company expects to recognize the expense. The current and non-current portions of deferred commissions are included in prepaid expenses and other current assets and deferred sales commissions—noncurrent, respectively, in the Company’s Condensed Consolidated Balance Sheets. Total deferred commissions at October 31, 2020 and April 30, 2020 were $3.1 million and $3.5 million, respectively. Amortization of sales
commissions was $0.5 million and $0.9 million for the three and six months ended October 31, 2020, respectively, which is included in "Sales and marketing" expense in the accompanying Condensed Consolidated Statements of Operations. No impairment losses were recognized during the periods.
C. Leases
The Company’s operating leases are primarily related to facility leases for administration and sales. The operating leases have terms ranging from three to five years. While each of the leases includes renewal options, the Company has only included the base lease term in its calculation of lease assets and liabilities. The Company does not have any finance leases.
Balance sheet information related to operating leases is as follows (in thousands):
October 31, 2020
Assets
Right of use assets
$
1,813
Liabilities
Current lease liabilities
797
Long-term lease liabilities
1,137
Total liabilities
$
1,934
Lease cost information related to operating leases is as follows (in thousands):
Three Months Ended October 31, 2020
Six Months Ended October 31, 2020
Lease cost
Operating lease cost
$
197
$
391
Short-term lease cost
161
319
Variable lease cost
76
145
Total lease cost
$
434
$
855
Lease costs are primarily included in "Sales and marketing" and "General and administrative" expenses in the Company’s Condensed Consolidated Statements of Operations.
The impact of the Company's leases on Condensed Consolidated Statement of Cash Flows is presented in the operating activities section, which mainly consisted of cash paid for operating lease liabilities of approximately $0.9 million during the six months ended October 31, 2020. On October 6, 2020, the Company extended the lease between Haymac LLC, and Logility, Inc., for an additional three years for the office building located in Massachusetts now ending on December 31, 2023.
Weighted average information associated with the measurement of the Company’s remaining operating lease obligations is as follows:
The following table summarizes the maturity of the Company’s operating lease liabilities as of October 31, 2020 (in thousands):
FY2021
$
407
FY2022
711
FY2023
486
FY2024
361
FY2025
20
Thereafter
—
Total operating lease payments
$
1,985
Less imputed interest
(51)
Total operating lease liabilities
$
1,934
The Company leases to other tenants a portion of its headquarters building that it owns in Atlanta, Georgia. The leases expire at various dates through October 2025. Lease income is included in "Other, net" in the Company’s Condensed Consolidated Statements of Operations and totaled approximately $79,000 and $150,000 for the three and six months ended October 31, 2020, respectively. Lease payments to be received as of October 31, 2020 are as follows (in thousands):
FY2021
$
93
FY2022
149
FY2023
96
FY2024
98
FY2025
100
Thereafter
50
Total
$
586
D. Declaration of Dividend Payable
On August 19, 2020, our Board of Directors declared a quarterly cash dividend of $0.11 per share of our Class A and Class B common stock. The cash dividend is payable on December 4, 2020 to Class A and Class B shareholders of record at the close of business on November 20, 2020.
E. Earnings Per Common Share
The Company has two classes of common stock. Class B common shares are convertible into Class A common shares at any time, on a one-for-one basis. Under the Company’s Articles of Incorporation, if dividends are declared, holders of Class A common shares shall receive a $0.05 dividend per share prior to the Class B common shares receiving any dividend and holders of Class A common shares shall receive a dividend at least equal to Class B common shares dividends on a per share basis. As a result, the Company has computed the earnings per share in compliance with the Earnings Per Share Topic of the FASB ASC, which requires companies that have multiple classes of equity securities to use the “two-class” method in computing earnings per share.
For the Company’s basic earnings per share calculation, the Company uses the “two-class” method. Basic earnings per share are calculated by dividing net earnings attributable to each class of common stock by the weighted average number of shares outstanding. All undistributed earnings are allocated evenly between Class A and B common shares in the earnings per share calculation to the extent that earnings equal or exceed $0.05 per share. This allocation is based on management’s judgment after considering the dividend rights of the two-classes of common stock, the control of the Class B shareholders and the convertibility rights of the Class B shares to Class A shares. If Class B shares convert to Class A shares during the period, the distributed net earnings for Class B shares is calculated using the weighted average common shares outstanding during the period.
Diluted earnings per share is calculated similarly to basic earnings per share, except that the calculation includes the dilutive effect of the assumed exercise of options issuable under the Company’s stock incentive plans. For the Company’s diluted earnings per share calculation for Class A shares, the Company uses the “if-converted” method. This calculation
assumes that all Class B common shares are converted into Class A common shares and, as a result, assumes there are no holders of Class B common shares to participate in undistributed earnings.
For the Company’s diluted earnings per share calculation for Class B shares, the Company uses the “two-class” method. This calculation does not assume that all Class B common shares are converted into Class A common shares. In addition, this method assumes the dilutive effect of Class A stock options were converted to Class A shares and the undistributed earnings are allocated evenly to both Class A and B shares including Class A shares issued pursuant to those converted stock options. This allocation is based on management’s judgment after considering the dividend rights of the two-classes of common stock, the control of the Class B shareholders and the convertibility rights of the Class B shares into Class A shares.
The following tables set forth the computation of basic earnings per common share and diluted earnings per common share (in thousands except for per share amounts):