Supply chain management software vendor Logility yesterday said its sales, license fees, services revenue, and net earnings all fell during its most recent fiscal quarter, a trend the company attributed to the current economic slowdown.
Logility reported total revenue for its fourth quarter, ended April 30, of $11.9 million (€7.7 million), down 8% from $12.9 million (€8.3 million) in the fourth quarter last year. Logility’s software license revenue for the quarter plunged 27% to $4.1 million (€2.6 million), while revenue from services was down 11% to $1.8 million (€1.2 million).
Logility President and CEO Mike Edenfield blamed Logility’s poor fourth-quarter performance on what he called “economic uncertainty.” “Customers are slower to pull the trigger or they don’t pull the trigger at all” on software purchases, Edenfield said in remarks to financial analysts. The company’s customer base is overwhelmingly U.S.-based. Edenfield said many of Logility’s potential customers wonder how long-lasting or harmful energy price increases and other factors will be to their businesses. “And that causes a lot of people to hesitate before making a decision,” he said.
Once manufacturers understand the long-term impacts on their businesses from energy and other cost increases, Edenfield said, they may be willing to invest in Logility’s software, which aims to make supply chains operate more efficiently. Logility’s order pipeline is about the same size as it was in the third quarter of this year, he said.
Logility’s net earnings for the quarter were $1.7 million (€1.1 million), down 15% year over year from $2 million (€1.3 million).
The company’s poor fourth-quarter performance pulled down its full-year results. For the year, the company reported $44.9 million (€28.9 million) in revenue, up 3% compared with fiscal 2007. Logility’s software license revenue for the year, at $14.6 million (€9.4 million), was down 10%, while its services revenue, at $7.8 million (€5 million), rose 14%. Logility’s maintenance revenue for the year rose 9% to $22.5 million (€14.5 million).
The company’s net earnings for fiscal 2008 were up 1% to $6 million (€3.9 million).
In the fourth quarter, Logility was able to keep its operating expenses level with year-prior expenses. While its research and development spending (down 13%) and general and administrative spending (down 24%) fell, sales and marketing expenses rose 24%.
Despite the fourth-quarter performance, Logility reported that its cash on hand improved. At the end of the fiscal year, Logility had $42.7 million (€27.5 million) in cash and short-term investments, up $1.4 million (€0.9 million) over its third-quarter total and up $10.4 (€6.7 million) over fiscal 2007.
Logility also reported that during the quarter it repurchased 114,421 of its common shares for $787,000 (€506,000). The stock repurchases served to increase the percentage of Logility owned by American Software to 88% from 87%.