Logility Reports Second Quarter of Fiscal Year 2005 Results

Logility Reports Second Quarter of Fiscal Year 2005 Results

ATLANTA, Nov. 29 /PRNewswire-FirstCall/ -- Logility, Inc. (NASDAQ:LGTY), a leading supplier of collaborative solutions to optimize the supply chain, today announced financial results for the second quarter of fiscal year 2005.

On September 30, 2004, Logility purchased certain assets and the distribution channel of privately-held Demand Management, Inc. a St. Louis- based provider of supply chain planning systems marketed under the Demand Solutions brand, for approximately $9.5 million in cash less a working capital adjustment. The second quarter 2005 results include Demand Management's results for the month of October 2004.

The second quarter total revenues were $4.8 million, including software license fees of $656,000, compared to total revenues of $5.2 million and $1.2 million of software license fees in the same period last year. Services and other revenues were $1.1 million, compared to $1.3 million in the same period last year. Maintenance revenues were $3.0 million, compared to $2.7 million in the same period last year. For the second quarter, the Company reported an operating loss of $544,000 compared to operating income of $157,000 for the same quarter last year and a net loss of $528,000 or loss per share of $0.04, compared to a net income of $221,000 or earnings per share (diluted) of $0.02 for the same quarter in the prior year. Second quarter 2005 financial results included one month of operations following our September 30, 2004 acquisition of Demand Management, which accounted for approximately $287,000 of Logility's net loss primarily due to non-cash items.

Total revenues for the six months ended October 31, 2004 were $10.3 million compared to $10.5 million for the same period last year. Software license fees for the six months ended October 31, 2004 were $2.1 million compared to $2.3 million for the same period last year. Services and other revenues were $2.4 million compared to $2.7 million for the same period last year. Maintenance revenues were $5.8 million compared to $5.5 million for the same period last year. For the six months ended October 31, 2004, the Company reported a net loss of $151,000, or loss per share of $.01 compared to a net income of approximately $591,000 or earnings per share (diluted) of $.04 for the same period in the prior year.

The overall financial condition of the Company remains strong with cash and investments of approximately $21.0 million as of October 31, 2004. During the quarter, Logility purchased approximately 124,000 of its shares on the open market under the current stock buyback program at a cost of approximately $602,000. There are approximately 541,000 shares remaining to purchase under the current authorization of shares.

"The highlight of the quarter was the acquisition of Demand Management. With this acquisition of Demand Management, we see tremendous potential to increase the intrinsic value of Logility by leveraging our supply chain knowledge and extending our reach into an under-served market segment of SMB companies," said J. Michael Edenfield, Logility president and Chief Executive Officer. "This move gives us access to a large, satisfied customer base and provides an immediate opportunity to expand our worldwide sales and implementation resources. We believe Logility is the only vendor that can meet the supply chain planning needs of the SMB market as well as serve the more complex requirements of large and Fortune 1000 businesses."

The acquisition is expected to be accretive to Logility's earnings and cash flow within the next 12 months, and is expected to contribute approximately $10 million in annual revenue, with 50% as a recurring component.

The acquisition provides more than 800 active customers in the growing small and midsize business (SMB) market, which brings the Logility customer base to approximately 1,100 and gives Logility what is believed to be the largest installed base of supply chain planning customers among application software vendors. Logility will continue to sell Demand Solutions as a separate product line to the SMB market through Demand Management's existing value-added reseller distribution network, which currently serves customers in more than 70 countries. Logility will also continue to offer the Logility Voyager Solutions(TM) suite to its traditional target market of upper-midsize to Fortune 1000 companies with distributive-intensive supply chains.

Some of the unique assets that Logility acquires through this transaction include:

-- Distribution Channel. Demand Management has a worldwide value-added
reseller (VAR) network of 23 organizations with 67 sales,
implementation and support resources. This network will continue to
sell Demand Solutions products, and Logility plans to introduce
components of the Logility Voyager Solutions suite into appropriate
areas of this proven distribution channel.
-- Customer Base. Demand Management has approximately 800 active
customers in over 70 countries in consumer goods, food and beverage,
apparel, life sciences, service parts and retail industries. The VAR
channel and Demand Management subsidiary of Logility will continue to
support these loyal Demand Solutions customers.
-- Technology. The Demand Solution products are designed for SMB
companies and include supply chain forecasting, demand planning,
inventory planning and replenishment planning. The Demand Solution
Stores product enables store-level forecast modeling and replenishment
capabilities for retailers.

Highlights for the second fiscal quarter of 2005 include:

Strategic Acquisition
-- Logility acquired certain assets and the distribution channel of
privately-held Demand Management, Inc., a St. Louis-based provider of
supply chain planning systems marketed under the Demand Solutions(R)
brand, for $9.5 million in cash. The acquisition significantly
strengthens Logility's supply chain planning market position for small
and midsize businesses, extends the company's worldwide distribution
channel and increases the Logility customer base to over 1100.

Customers
-- Notable new and existing customers placing orders with Logility in the
second quarter include Continental Tires North America, Hunter Fan,
JRH Biosciences, Land O' Frost, Lindt & Sprungli and Tyco Safety
Products.
-- Aspen Pet Products, a private manufacturer and distributor of high
quality pet care products, implemented Logility Voyager Solutions(TM)
in less than five months for improved inventory management, forecast
accuracy and collaboration.
-- Representatives of Smead Corporation, a leading manufacturer and
distributor of paper filing supplies and records management software
and long-time Logility customer, spoke at the 2004 Consumer Goods
Technology Conference in Orlando, Fla. Additional Logility customers
speaking at the event included VF Corporation, Cannondale Bicycle
Corporation and Lindt & Sprungli.
-- Logility hosted another Supply Chain Power Hour webcast, "Service
Parts Smarts: Profit-driven Strategies for Service Parts Supply
Chains," on September 9. The webcast featured speakers from AMR
Research, Remy International and Logility, and addressed the
challenges faced by aftermarket service parts manufacturers, whose
service organizations can contribute 20-30% of total revenues and as
much as 40% of profits.
-- During the summer and fall of 2004, Demand Solutions users in the
Northeast U.S. had the opportunity to participate in the 13th annual
DS Northeast User Conference as well as a series of local "Town
Meetings." One hundred forty-two DS users representing 65 companies
participated in these regional activities.

Products and Technology
-- Logility announced the dates for the Connections 2005: Catch the Wave-
Supply Chain ROI customer conference to be held March 16-18, 2005, in
Atlanta, GA., at the InterContinental Hotel in Buckhead. The event
will give attendees exposure to best practices from industry peers,
insight from leading supply chain experts and guidance for preparing
their businesses for the next wave of demand-driven supply chain
improvements.
-- Start Magazine selected Logility for a 2004 Technology & Business
Vision Award, which honors leading-edge solution providers whose
hardware or software products have helped transform the manufacturing
industry; and Software Magazine named Logility to its Software 500
list of the world's foremost software and services providers.
-- Logility announced a business alliance with Adjoined Consulting, an
industry-focused, full-service management consulting, technology and
outsourcing firm. The partnership offers companies operational best
practices hosting and consulting services for Logility Voyager
Solutions, including collaborative demand, inventory and replenishment
planning, global sourcing, and transportation and warehouse
management.
-- Demand Management, Inc., a wholly owned subsidiary of Logility, re-
christened its flagship software suite from Demand Solutions to DS
One. The decision to rename the company's applications to DS One
emphasizes the power and flexibility of the software to deliver
essential functionality for the broad-based collaborative needs in
today's demand driven supply chains.

About Logility


With more than 1,100 customers worldwide, Logility is the leading provider of collaborative supply chain planning solutions that help small, medium, large and Fortune 1000 companies realize substantial bottom-line results in record time. Logility Voyager Solutions feature performance monitoring capabilities in a single Internet-based framework and provide supply chain visibility; demand, inventory and replenishment planning; supply and global sourcing optimization; transportation planning and execution; and warehouse management. Logility customers include Bissell, Huhtamaki UK, Katun Corporation, McCain Foods, Mill's Pride, Pernod Ricard, Rand McNally, Sigma Aldrich, and VF Corporation. Logility is a majority owned subsidiary of American Software (NASDAQ:AMSWA). For more information about Logility, call 1-800-762-5207 or visit http://www.logility.com/ .

Forward-Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties. There are a number of factors that could cause actual results to differ materially from those anticipated by statements made herein. These factors include, but are not limited to, changes in general economic conditions, technology and the market for the Company's products and services including economic conditions within the e-commerce markets; the timely availability and market acceptance of these products and services; the effect of competitive products and pricing; the uncertainty of the viability and effectiveness of strategic alliances; and the irregular pattern of the Company's revenues. For further information about risks the Company could experience as well as other information, please refer to the Company's Form 10-K for the year ended April 30, 2004 and other reports and documents subsequently filed with the Securities and Exchange Commission. For more information, contact Vincent C. Klinges, Chief Financial Officer, Logility, Inc., 470 East Paces Ferry Rd., Atlanta, GA 30305, (404) 261-9777. FAX: (404) 264-5206; INTERNET: http://www.logility.com/ or E-mail: askLogility@logility.com .

Logility Voyager Solutions is a trademark of Logility. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.

LOGILITY, INC.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

Second Quarter Ended Six Months Ended
October 31, October 31,
Pct Pct
2004 2003 Chg. 2004 2003 Chg.
Revenues:
License $656 $1,174 (44%) $2,070 $2,285 (9%)
Services & other 1,148 1,281 (10%) 2,408 2,735 (12%)
Maintenance 3,027 2,712 12% 5,784 5,509 5%
Total Revenues 4,831 5,167 (7%) 10,262 10,529 (3%)

Cost of Revenues:
License 840 1,013 (17%) 1,700 1,969 (14%)
Services & other 588 667 (12%) 1,250 1,367 (9%)
Maintenance 632 459 38% 1,072 902 19%
Total Cost of Revenues 2,060 2,139 (4%) 4,022 4,238 (5%)
Gross Margin 2,771 3,028 (8%) 6,240 6,291 (1%)
Operating expenses:
Research and development 1,404 1,395 1% 2,735 2,760 (1%)
Less: capitalized development (711) (849) (16%) (1,381) (1,651) (16%)
Sales and marketing 1,779 1,599 11% 3,636 3,220 13%
General and administrative 805 726 11% 1,490 1,481 1%
Acquisition related
amortization of intangibles 38 - nm 38 - nm

Total operating expenses 3,315 2,871 15% 6,518 5,810 12%
Operating income (loss) (544) 157 nm (278) 481 nm
Other income 16 64 (75%) 127 110 15%
Income (loss) before income
taxes (528) 221 nm (151) 591 nm
Income taxes - - - - - -
Net Income (loss) $(528) $221 nm $(151) $591 nm
Earnings(loss) per common
share - Basic $(0.04) $0.02 nm $(0.01) $0.05 nm
Earnings(loss) per common
share - Diluted $(0.04) $0.02 nm $(0.01) $0.04 nm

Weighted average common shares
Basic 13,013 13,105 13,052 13,119
Diluted 13,013 13,317 13,052 13,322
nm- not meaningful


Consolidated Balance Sheet Information
(in thousands)
(Unaudited)
October 31,
2004 2003
Cash and Short & Long term investments $20,996 $27,748
Accounts Receivable:
Billed 4,096 2,510
Unbilled 505 672
Total Accounts Receivable, net 4,601 3,182
Prepaids & Other Current Assets 1,877 372
Non-current Assets 15,540 7,926
Total Assets $43,014 $39,228

Accounts Payable $470 $197
Other Current Liabilities 5,469 3,640
Deferred Revenues 5,695 4,213
Shareholders' Equity 31,380 31,178
Total Liabilities & Shareholders' Equity $43,014 $39,228



Source: Logility, Inc.

CONTACT: Vincent C. Klinges, Chief Financial Officer Logility, Inc.,
+1-404-264-5477

Web site: http://www.logility.com/

Company News On-Call: http://www.prnewswire.com/comp/120967.html


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