<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1997
---------------------
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: 0-23057
--------------
LOGILITY, INC.
-------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2281338
------------------ ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
470 East Paces Ferry Road, N.E., Atlanta, Georgia 30305
- ------------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(404) 261-9777
------------------------------------------------
(Registrant's telephone number, including area code)
None
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal
year, if changed since last report)
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 X No
------- -------
Indicate the number of shares outstanding of the issuer's common stock, as of
the latest practicable date.
Class Outstanding at December 11, 1997
- ------------------------------ ----------------------------------
Common Stock, no par value 13,830,000 Shares
<PAGE>
LOGILITY, INC.
Form 10-Q
Quarter Ended October 31, 1997
Index
<TABLE>
<CAPTION>
Page
Number
--------
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Condensed Balance Sheets (Unaudited)
October 31, 1997 and April 30, 1997 3
Condensed Statements of Operations (Unaudited)
Three and Six Months Ended October 31, 1997 and 1996 4
Condensed Statements of Cash Flows (Unaudited)
Six Months Ended October 31, 1997 and October 31, 1996 5
Notes to Condensed Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-15
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
Part II - Other Information 16
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
LOGILITY, INC.
Condensed Balance Sheets (Unaudited)
(in thousands)
October 31, April 30,
1997 1997
----------- ---------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $31,038 $ 732
Trade accounts receivable, less allowance for doubtful
accounts of $421 at October 31, 1997 and
April 30, 1997:
Billed 5,942 3,843
Unbilled 3,438 2,737
Prepaid expenses and other current assets 158 147
------- -------
Total current assets 40,576 7,459
Furniture and equipment, less accumulated depreciation 1,181 876
Intangible assets, less accumulated amortization 7,171 7,732
Other assets, net 300 300
------- -------
$49,228 $16,367
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 2,685 1,266
Accrued compensation and related costs 1,080 1,305
Deferred revenues 4,544 3,886
Other current liabilities 2,336 445
------- -------
Total current liabilities 10,645 6,902
Deferred income taxes 2,687 2,797
------- -------
Total liabilities 13,332 9,699
------- -------
Shareholders' equity:
Preferred stock: 2,000,000 shares authorized; no shares issued - -
Common stock, no par value; 20,000,000 shares authorized;
13,500,000 and 11,300,500 shares issued and outstanding
as of October 31, 1997 and April 30, 1997, respectively - -
Additional paid-in capital 38,809 7,919
Divisional equity - 1,871
Accumulated deficit (2,913) (3,122)
------- -------
Total shareholders' equity 35,896 6,668
Commitments and contingencies
-------- -------
$49,228 $16,367
======== =======
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
Item 1. Financial Statements (continued)
<TABLE>
<CAPTION>
LOGILITY, INC.
Condensed Statements of Operations (Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
October 31, October 31,
-------------------------------- -----------------------------
1997 1996 1997 1996
------------- ------------- ---------- -------------
Revenues:
<S> <C> <C> <C> <C>
License fees $ 5,360 $ 1,724 $ 9,707 $ 4,411
Maintenance 1,745 1,208 3,557 2,353
Services 1,896 957 3,485 1,917
-------------- ------------- ------------ ------------
Total revenues 9,001 3,889 16,749 8,681
-------------- ------------- ------------ ------------
Cost of revenues:
License fees 1,344 907 2,575 1,761
Maintenance 390 291 743 539
Services 881 463 1,576 925
-------------- ------------- ------------ ------------
Total cost of revenues 2,615 1,661 4,894 3,225
-------------- ------------- ------------ ------------
Gross margin 6,386 2,228 11,855 5,456
-------------- ------------- ------------ ------------
Operating expenses:
Research and development 2,230 1,400 4,051 2,992
Less: Capitalized development (812) (573) (1,428) (1,471)
Sales and marketing 3,242 2,373 6,672 4,876
General and administrative 828 572 1,438 1,100
-------------- ------------- ------------ ------------
Total operating expenses 5,488 3,772 10,733 7,497
-------------- ------------- ------------ ------------
Operating income (loss) 898 (1,544) 1,122 (2,041)
Other income, net 63 - 63 -
-------------- ------------- ------------ ------------
Operating income (loss) before
income taxes 961 (1,544) 1,185 (2,041)
Income taxes - - - -
-------------- ------------- ------------ ------------
Net income (loss) $ 961 $(1,544) $ 1,185 $(2,041)
============== ============= ============ ============
Net income (loss) per common share $ $0.08 $ (0.14) $ 0.10 $ (0.18)
============== ============= ============ ============
Weighted average common shares
outstanding & common stock equivalents 11,902 11,300 11,601 11,300
============== ============= ============ ============
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
Item 1. Financial Statements (continued)
<TABLE>
<CAPTION>
LOGILITY, INC.
Condensed Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended
October 31,
---------------------------------------
1997 1996
---------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,185 $(2,041)
Adjustments to reconcile net income (loss) to net cash
Provided by operating activities:
Depreciation and amortization 2,190 1,491
(Increase) decrease in assets:
Accounts receivable (2,799) 69
Other assets (12) -
Increase (decrease) in liabilities:
Accounts payable, accrued costs and other 2,585 (158)
Deferred revenues 658 728
------- -------
Net cash provided by operating activities 3,807 89
------- -------
Cash flows from investing activities:
Additions to capitalized computer software development costs (1,428) (1,471)
Additions to purchased computer software costs (57) (13)
Purchases of furniture and equipment (450) (155)
------- -------
Net cash used in investing activities (1,935) (1,639)
------- -------
Cash flows from financing activities:
Deferred income taxes resulting from Tax Sharing Agreement (110) 67
Contributions from American Software, Inc. - 1,598
Dividends paid to American Software, Inc. (231) -
Proceeds, net, from issuance of common stock 28,775 -
------- -------
Net cash provided by financing activities 28,434 1,665
------- -------
Net change in cash 30,306 115
Cash and cash equivalents at beginning of period 732 13
------- -------
Cash and cash equivalents at end of period $31,038 $ 128
======= =======
</TABLE>
See accompanying notes to condensed financial statements.
5
<PAGE>
Item 1. Financial Statements (continued)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
A. Basis of Presentation
The accompanying condensed financial statements are unaudited. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). The financial
information presented in the condensed financial statements reflects all
normal recurring adjustments which are, in the opinion of management,
necessary for a fair presentation of the periods indicated. These financial
statements should be read in conjunction with the final prospectus, as filed
with the SEC on October 7, 1997 (Registration No. 33-33385), in conjunction
with the Company's initial public offering. The interim results reflected in
the condensed financial statements are not necessarily indicative of the
results to be expected for the full year.
The Company is approximately an 81% owned subsidiary of American Software,
Inc. (American Software), a publicly held applications software provider of
enterprise resource planning solutions (NASDAQ-AMSWA).
B. Completion of Initial Public Offering
On October 10, 1997, the Company successfully completed its initial public
offering of common stock. The Company sold 2.2 million shares of Common Stock
in the initial public offering for approximately $31.9 million less issuance
costs of $3.1 million.
On November 6, 1997, the Company sold 330,000 shares of Common Stock as part
of the underwriters' over-allotment from the initial public offering for $4.8
million less issuance costs of approximately $335,000.
6
<PAGE>
LOGILITY, INC.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
OVERVIEW
Logility, Inc. ("Logility" or the "Company") develops, markets and supports
software applications that optimize the operating efficiencies of manufacturers,
suppliers, distributors, retailers and other organizations along the "value
chain." The value chain refers to the complex network of relationships that
organizations maintain with trading partners to source, manufacture and deliver
products to the customer. The Company's solution, Logility Value Chain
Solutions, consists of an integrated client-server software suite that provides
advanced collaborative planning and integrated logistics capabilities that are
designed to reduce inventory costs, improve forecast accuracy, decrease order
cycle times, optimize production scheduling, streamline logistics operations,
reduce transportation costs and improve customer service. The Company markets
its solution world-wide, primarily to large enterprises that require a
comprehensive planning and execution solution. Sales are made through a
dedicated sales force and through relationships with third-party vendors
(including American Software) and service providers.
Until recently, the Company conducted its business and operations as three
separate business units of American Software: a supply chain planning software
group, a warehouse management software group and a transportation management
software group. Effective January 1997, American Software transferred
substantially all of the business, operations (including research and
development), assets and associated liabilities of its Supply Chain Planning
division to the Company. Effective August 1997, American Software transferred
to the Company the WarehousePRO software and substantially all associated
operations, assets and liabilities. Effective August 1997, American Software's
wholly-owned subsidiary, Distribution Sciences, Inc., was merged into the
Company, transferring its business, operations, assets and liabilities,
including the Transportation Planning and Transportation Management software, to
the Company. The Company's condensed financial statements included herein
present the combined assets, liabilities and results of operations for the three
business units for all periods.
The Company's revenues are derived primarily from three sources: software
licenses, maintenance and services. Software licenses generally are based upon
the number of modules, servers, users and/or sites licensed. License fee
revenues are recognized at the time of product delivery, provided no significant
future obligation exists and collection is deemed probable. Maintenance
agreements typically are for a one- to three-year term and usually are entered
into at the time of the initial product license. Maintenance revenues are
recognized ratably over the term of the maintenance agreement. Services
revenues consist primarily of fees from software implementation, training,
consulting and customization services and are recognized as the services are
rendered.
7
<PAGE>
Item 2. Management's Discussion (continued)
The following table sets forth certain revenue and expense items as a percentage
of total revenues and the percentage increases in those items for the three
months ended October 31, 1997 and 1996:
<TABLE>
<CAPTION>
Percentage of Pct. Change
Total Revenues in Dollars
-------------------- ------------
1997 1996 1997 vs 1996
------ ------ ------------
<S> <C> <C>
Revenues:
License fees 60% 44 % 211%
Maintenance 19 31 44
Services 21 25 98
----- ----- ----
Total revenues 100 100 131
----- ----- ----
Cost of revenues:
License fees 15 23 48
Maintenance 4 8 34
Services 10 12 90
----- ----- ----
Total cost of revenues 29 43 57
----- ----- ----
Gross margin 71 57 187
----- ----- ----
Operating expenses:
Research and development 25 36 59
Less: Capitalized development nm nm 42
Sales and marketing 36 61 37
General and administrative 9 15 45
----- ----- ----
Total operating expenses 61 97 45
----- ----- ----
Operating income (loss) 10 (40) nm
Other income, net 1 - nm
----- ----- ----
Operating income (loss) before income taxes 11 (40) nm
Income taxes - - -
----- ----- ----
Net income (loss) 11% (40)% nm
===== ===== ====
nm--not meaningful
</TABLE>
8
<PAGE>
Item 2. Management's Discussion (continued)
The following table sets forth certain revenue and expense items as a percentage
of total revenues and the percentage increases or decreases in those items for
the six months ended October 31, 1997 and 1996:
<TABLE>
<CAPTION>
Percentage of Pct. Change
Total Revenues in Dollars
----------------------------- --------------
1997 1996 1997 vs 1996
----------- ----------- --------------
<S> <C> <C> <C>
Revenues:
License fees 58% 51 % 120 %
Maintenance 21 27 51
Services 21 22 82
--- --- ---
Total revenues 100 100 93
--- --- ---
Cost of revenues:
License fees 15 20 46
Maintenance 5 6 38
Services 9 11 70
--- --- ---
Total cost of revenues 29 37 52
--- --- ---
Gross margin 71 63 117
--- --- ---
Operating expenses:
Research and development 24 34 35
Less: Capitalized development nm nm (3)
Sales and marketing 40 56 37
General and administrative 9 13 31
--- --- ---
Total operating expenses 64 86 43
--- --- ---
Operating income (loss) 7 (23) nm
Other income, net - - nm
--- --- ---
Operating income (loss) before income taxes 7 (23) nm
Income taxes - - -
--- --- ---
Net income (loss) 7% (23)% nm
=== === ===
nm--not meaningful
</TABLE>
9
<PAGE>
Item 2. Management's Discussion (continued)
THREE MONTHS ENDED OCTOBER 31, 1997 AND 1996:
- ---------------------------------------------
REVENUES
The Company's total revenues increased 131% to $9.0 million from $3.9 million
for the comparable quarter a year ago. This increase was largely due to the
significant rise in the Company's product sales. International revenues
represented approximately 4% of total revenues in the quarter ended October 31,
1997 compared to 12% a year ago. This decrease was largely due to the
substantial growth of domestic revenues as well as the relative immaturity of
the Company's international sales channel.
LICENSES. License fee revenues grew significantly from a year ago in the
quarter ended October 31, 1997, primarily as a result of successful sales
efforts on the part of the Company's direct sales force. The direct sales
channel provided approximately 70% of the license fee revenues for this quarter
compared to approximately 40% in the prior quarter ended July 31, 1997 and 40%
in the comparable quarter a year ago. The Company's indirect sales channel is
principally through American Software.
MAINTENANCE. Maintenance revenues increased 44% to $1.7 million from a year
ago, due to an increase in the installed base of customers. Maintenance
revenues are a direct relationship to license fee revenues, since license fees
are the source of new maintenance customers.
SERVICES. Services revenues increased 98% to $1.9 million from a year ago as a
result of the increased utilization of the Company's implementation and training
services, which was a result of the growth in the Company's customer base.
GROSS MARGIN:
Total gross margin in the quarter ended October 31, 1997 was 71% compared to 57%
a year ago. This increase was largely due to (a) increased contributions of
license fees, which rose to 60% of total revenues, up from 44% a year ago, and
(b) the expanded margin from license fee revenues, which grew to nearly 75% from
47% a year ago. The expanded margin was attributable to the significant rise in
license fee revenues which, because of a relatively high fixed license fees cost
component, resulted in a higher incremental gross margin. The gross margin on
maintenance revenues increased slightly to 78% compared to 76% a year ago. The
gross margin on services revenues increased slightly to 54% compared to 52% in
the same period a year ago.
10
<PAGE>
Item 2. Management's Discussion (continued)
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT. Gross product development costs include all non-
capitalized and capitalized software development costs. A breakdown of the
research and development costs is as follows:
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------
October 31, Percent October 31,
1997 Change 1996
---------- --------- ----------
<S> <C> <C> <C>
Gross product development costs $2,230 59% $1,400
Percentage of total revenues 25 % 36 %
Less: Capitalized development (812) 42% (573)
Percentage of gross prod. dev. costs 36 % 41 %
------ --- ------
Product development expenses $1,418 71% $ 827
Percentage of total revenues 16 % 21 %
</TABLE>
Gross product development costs increased 59% in the quarter ended October 31,
1997 compared to a year ago as a result of the Company's continued investment in
new product development. Capitalized development increased as well, growing 42%
from a year ago, while the rate of capitalized development decreased to 36% from
41% a year ago. Product development expenses, as a percentage of total revenues,
decreased to 16% from 21% a year ago, mainly due to the substantial increase in
total revenues.
SALES AND MARKETING. Sales and marketing expenses rose 37% from a year ago as a
result of increased license fees and an increased sales force. As a percentage
of total revenues, sales and marketing expenses were 36% for the quarter ended
October 31, 1997 compared to 61% for the quarter ended October 31, 1996. An
increase in the productivity of the Company's sales force, which was formed
approximately one year ago to focus exclusively on the Company's products, was
the primary result of this decrease. Previously, the Company shared its sales
force with American Software.
The mix of revenues generated between the direct and indirect (mainly American
Software) sales channels also contributed to the decrease in the cost of sales
and marketing as a percentage of total revenues. For sales generated from the
direct sales force, the Company generally incurs sales commissions which are
substantially lower than those charged by the indirect channel. As a result,
when the Company increased its revenues generated from its direct sales force,
as it did in the quarter ended October 31, 1997, the Company achieved expense
leverage.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased 45%
to approximately $828,000 from a year ago mainly as a result of the Company's
growth in employees and the resulting growth in administrative costs. During
the quarter ended October 31, 1997, the average number of employees was 190, an
increase of approximately 25% from a year ago.
OTHER INCOME
Other income is comprised of investment earnings from the net proceeds of the
Company's initial public offering.
11
<PAGE>
Item 2. Management's Discussion (continued)
INCOME TAXES
In accordance with FASB # 109 "Accounting for Income Taxes", the Company was
required to apply a separate company approach in calculating its income tax
provision. As a result, the Company was able to utilize Net Operating Loss
Carryforwards previously generated, thereby resulting in no income tax expense.
The Company's Tax Sharing Agreement with American Software, Inc. does not allow
the Company to utilize its Net Operating Loss Carryforwards therefore, the
Company recorded income taxes owed to American Software of approximately
$500,000 as a dividend in shareholders' equity.
SIX MONTHS ENDED OCTOBER 31, 1997 AND 1996:
- -------------------------------------------
REVENUES:
For the six months ended October 31, 1997, the Company's total revenues
increased 93% to $16.7 million from $8.7 million in the same period of the prior
year. This increase was largely due to the significant rise in the Company's
product sales. International revenues represented approximately 5% of total
revenues for the six months ended October 31, 1997, compared to 11% in the prior
year period. This decrease was largely due to the substantial growth of domestic
revenues as well as the relative immaturity of the Company's international sales
channel.
LICENSES. License fee revenues for the six months ended October 31, 1997 grew
significantly from the same period a year ago, primarily as a result of
successful sales efforts on the part of the Company's direct sales force. The
direct sales channel provided approximately 56% of the license fee revenues for
the six months ended October 31, 1997, compared to approximately 31% in the same
period of the prior year. The Company's indirect sales channel is principally
through American Software.
MAINTENANCE. Maintenance revenues for the six months ended October 31, 1997,
increased 51% to $3.6 million from the prior year period, due to an increase in
the installed base of customers.
SERVICES. Services revenues for the six months ended October 31, 1997,
increased 82% to $3.5 million from the prior year period, as a result of the
increased utilization of the Company's implementation and training services,
which was a result of the growth in the Company's customer base.
GROSS MARGIN:
Total gross margin for the six months ended October 31, 1997, was 71% compared
to 63% in the prior year period. This increase was largely due to (a) increased
contributions of license fees, which rose to 58% of total revenues, up from 51%
a year ago in the same period, and (b) the expanded margin from license fee
revenues, which grew to nearly 73% from 60% a year ago in the same period. The
expanded margin was attributable to the significant rise in license fee revenues
which, because of a relatively high fixed license fees cost component, resulted
in a higher incremental gross margin. The gross margin on maintenance revenues
increased slightly to 79% compared to 77% in the prior year period. The gross
margin on services revenues increased slightly to 55% compared to 52% in the
same period a year ago.
12
<PAGE>
Item 2. Management's Discussion (continued)
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT. Gross product development costs include all non-
capitalized and capitalized software development costs. A breakdown of the
research and development costs is as follows:
<TABLE>
<CAPTION>
Six Months Ended
------------------------------------
October 31, Percent October 31,
1997 Change 1996
----------- ------- -----------
<S> <C> <C> <C>
Gross product development costs $ 4,051 35 % $ 2,992
Percentage of total revenues 24 % 34 %
Less: Capitalized development (1,428) (3)% (1,471)
Percentage of gross prod. dev. costs 35 % 49 %
------- ---- -------
Product development expenses $ 2,623 72 % $ 1,521
Percentage of total revenues 16 % 18 %
</TABLE>
Gross product development costs for the six months ended October 31, 1997,
increased 35% from the prior year period as a result of the Company's continued
investment in new product development. Capitalized development decreased 3% from
a year ago, while the rate of capitalized development decreased to 35% from 49%
in the same period a year ago. Product development expenses, as a percentage of
total revenues, decreased to 16% from 18% a year ago, mainly due to the
substantial increase in total revenues.
SALES AND MARKETING. For the six months ended October 31, 1997, sales and
marketing expenses rose 37% from the same period of the prior year as a result
of increased license fees and an increased sales force. As a percentage of
total revenues, sales and marketing expenses were 40% compared to 56% for the
same period a year ago. An increase in the productivity of the Company's sales
force, which was formed approximately one year ago to focus exclusively on the
Company's products, was the primary result of this decrease. Previously, the
Company shared its sales force with American Software.
The mix of revenues generated between the direct and indirect (mainly American
Software) sales channels also contributed to the decrease in the cost of sales
and marketing as a percentage of total revenues. For sales generated from the
direct sales force, the Company generally incurs sales commissions which are
substantially lower than those charged by the indirect channel. As a result,
when the Company increased its revenues generated from its direct sales force,
as it did for the six months ended October 31, 1997, the Company achieved
expense leverage.
GENERAL AND ADMINISTRATIVE. General and administrative expenses for the six
months ended October 31, 1997, increased 31% to approximately $1.4 million from
the same period a year ago, mainly as a result of the Company's growth in
employees and the resulting growth in administrative costs. During the six
months ended October 31, 1997, the average number of employees was 185, an
increase of 20% during the same period of the prior year.
13
<PAGE>
Item 2. Management's Discussion (continued)
OTHER INCOME
Other income is comprised of investment earnings from the net proceeds of the
Company's initial public offering.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
On October 10, 1997, the Company completed its initial public offering, in which
the Company received net proceeds of approximately $28.8 million after deducting
underwriting discounts and offering expenses. The balance of the net proceeds
will be utilized for research and development, sales and marketing, working
capital and other general corporate purposes and possible acquisitions.
The Company's operating activities provided cash of approximately $3.8 million
in the six months ended October 31, 1997 and approximately $89,000 in the same
period of the prior year. The cash provided by operations during the six months
ended October 31, 1997 was primarily attributable to net income of $1.2 million,
non-cash depreciation and amortization expense of $2.2 million, an increase in
deferred revenues of approximately $658,000 and an increase in accounts payable,
accrued costs and other current liabilities of $2.6 million, which were
partially offset by an increase in accounts receivable of $2.8 million. The
cash provided by operations during the same period of the prior year was
attributed to non-cash depreciation and amortization expense of $1.5 million, an
increase in deferred revenues of approximately $728,000 and a decrease in
accounts receivable of approximately $69,000. This was partially offset by a net
loss from operations of $2.0 million and a decrease in accounts payable of
approximately $158,000.
Cash used in investing activities was approximately $1.9 million and $1.6
million for the six months ended October 31, 1997 and 1996, respectively. The
majority of the cash was used for computer software development costs.
Cash provided by financing activities for the six months ended October 31, 1997
was approximately $28.4 million due primarily to the net proceeds received from
the issuance of common stock in the initial public offering.
Days Sales Outstanding in accounts receivable were 83 days as of October 31,
1997, compared to 98 days as of April 30,1997.
The Company's current ratio on October 31, 1997 was nearly 4 to 1 and the
Company has no long-term debt. The Company believes that its sources of
liquidity and capital resources will be sufficient to satisfy its cash
requirements for at least the next twelve months. To the extent that such
amounts are insufficient to finance the Company's capital requirements, the
Company will be required to raise additional funds through equity or debt
financing. The Company does not currently have a bank line of credit. No
assurance can be given that bank lines of credit or other financing will be
available on terms acceptable to the Company. If available, such financing may
result in further dilution to the Company's shareholders and higher interest
expense.
14
<PAGE>
Item 2. Management's Discussion (continued)
FORWARD-LOOKING STATEMENTS
It should be noted that this discussion contains forward-looking statements,
which are subject to substantial risks and uncertainties. There are a number of
factors which could cause actual results to differ materially from those
anticipated by statements made herein. The timing of releases of the Company's
software products can be affected by client needs, marketplace demands and
technological advances. Development plans frequently change, and it is
difficult to predict with accuracy the release dates for products in
development. In addition, other factors include changes in general economic
conditions, the growth rate of the market for the Company's products and
services, the timely availability and market acceptance of these products and
services, the effect of competitive products and pricing, and the irregular
pattern of revenues, as well as a number of other risk factors which could
effect the future performance of the Company.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
15
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- ------- -----------------
Not applicable
Item 2. Changes in Securities and Use of Proceeds
- ------- -----------------------------------------
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The Company is furnishing the following information with respect to
the use of proceeds from its initial public offering of common
stock, no par value per share.
(1) The effective date of the Registration Statement filed on
Form S-1 for the offering and the commission file number
were October 6, 1997 and 333-33385, respectively.
(2) The offering commenced on October 7, 1997.
(3) Not applicable
(4) (i) The offering terminated on November 6, 1997, after all
the shares, including the over-allotment shares, were
sold.
(ii) The managing underwriters for the offering were
NationsBanc Montgomery Securities, Inc., Cowen &
Company, Interstate/Johnson Lane Corporation and
Hampshire Securities Corporation.
(iii) The Company registered shares of the Company's common
stock, no par value per share, in the offering.
(iv) All of the 2,530,000 million shares of common stock
registered for the accounts of the Company were sold in
the offering. The aggregate offering price of the
shares registered and sold for the account for the
Company was approximately $36,685,000.
16
<PAGE>
PART II - Other Information (continued)
(v) From October 6, 1997 to November 6, 1997, the
approximate expenses incurred by the Company in
connection with the issuance and distribution of the
common stock were as follows:
<TABLE>
<S> <C> <C>
Underwriting discount $2,568,000
SEC registration fee 10,000
NASD filing fee 4,000
Nasdaq National Market listing fee 49,000
Blue Sky fees and expenses 10,000
Transfer Agent and Registrar fees 5,000
Accounting fees and expenses 358,000
Legal fees and expenses 297,000
Printing and engraving expenses 129,000
Miscellaneous 30,000
----------
Total $3,460,000
==========
</TABLE>
Payment of such expenses were to Persons other than
directors, officers, general partners of the Company or
their associates, Persons owning 10% or more of the
equity securities of the Company or affiliates of the
Company.
Approximately $892,000 of the above expenses (excluding
the underwriting discount) incurred will be recorded as
offering expenses netted against the proceeds.
(vi) The net offering proceeds to the Company after expenses
were approximately $33,225,000.
(vii) From October 6, 1997 to October 31, 1997,
approximately $1,000,000 of the offering proceeds were
actually used for working capital purposes. The balance
of the offering proceeds, approximately $32,225,000 was
invested in short-term investments with an average
maturity of less than 90 days.
Substantially all of such offering proceeds uses
consisted of payments to Persons other than directors,
officers, general partners of the Company or their
associates, persons owning 10% or more of the equity
securities of the Company or affiliates of the Company.
(viii) Not applicable.
17
<PAGE>
PART II - Other Information (continued)
Item 3. Defaults Upon Senior Securities
- ------- -------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
- ------- ---------------------------------------------------
Not applicable
Item 5. Other Information
- ------- -----------------
Not applicable
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibit 11 - Statement re: Computation of Per Share Earnings
(Loss).
(b) No report on Form 8-K was filed during the quarter ended October
31, 1997.
18
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LOGILITY, INC.
DATE December 12, 1997 /s/ J. Michael Edenfield
----------------------- --------------------------------------------
J. Michael Edenfield
President, Chief Executive Officer
DATE December 12, 1997 /s/ James M. Modak
----------------------- --------------------------------------------
James M. Modak
Chief Financial Officer and Sr. VP
19
<PAGE>
EXHIBIT 11
<TABLE>
<CAPTION>
LOGILITY, INC.
Statement re: Computation of Per Share Earnings (Loss)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
October 31, October 31,
--------------------- -----------------
1997 1996 1997 1996
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Common Stock:
Weighted average common
shares outstanding 11,891 11,300 11,596 11,300
Dilutive effect of outstanding
stock options 11 - 5 -
------- ------- ------- -------
Total 11,902 11,300 11,601 11,300
------- ------- ------- -------
Net earnings (loss) $ 961 $(1,544) $ 1,185 $(2,041)
======= ======= ======= =======
Earnings (loss) per common
and common equivalent share $ 0.08 $ (0.14) $ 0.10 $ (0.18)
======= ======= ======= =======
</TABLE>
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Logility,
Inc. and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> OCT-31-1997
<CASH> 31,038
<SECURITIES> 0
<RECEIVABLES> 9,801
<ALLOWANCES> 421
<INVENTORY> 0
<CURRENT-ASSETS> 40,576
<PP&E> 1,742
<DEPRECIATION> 561
<TOTAL-ASSETS> 49,228
<CURRENT-LIABILITIES> 10,645
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 35,896
<TOTAL-LIABILITY-AND-EQUITY> 49,228
<SALES> 9,707
<TOTAL-REVENUES> 16,749
<CGS> 2,575
<TOTAL-COSTS> 4,894
<OTHER-EXPENSES> 10,733
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,185
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,185
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,185
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
