<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 July 31, 1998
-------------
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
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LOGILITY, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2281338
- ------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
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 September 4, 1998
-------------------------- --------------------------------
Common Stock, no par value 13,481,700 Shares
<PAGE>
LOGILITY, INC.
Form 10-Q
Quarter Ended July 31, 1998
Index
Page
Number
------
Part I Financial Information
Item 1. Financial Statements
Condensed Balance Sheets (Unaudited)
July 31, 1998 and April 30, 1998 3
Condensed Statements of Operations (Unaudited)
Three Months Ended July 31, 1998 and 1997 4
Condensed Statements of Cash Flows (Unaudited)
Three Months Ended July 31, 1998 and 1997 5
Notes to Condensed Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Part II Other Information 15-17
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LOGILITY, INC.
Condensed Balance Sheets (Unaudited)
(in thousands, except share data)
<TABLE>
<CAPTION>
July 31, April 30,
1998 1998
--------- ---------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,767 $ 1,006
Investments 25,841 29,559
Trade accounts receivable, less allowance for doubtful
accounts of $398 and $421 at July 31, 1998 and April 30, 1998:
Billed 6,959 7,754
Unbilled 2,365 3,040
Prepaid expenses and other current assets 827 731
------- -------
Total current assets 37,759 42,090
Furniture and equipment, less accumulated depreciation 1,789 1,583
Intangible assets, less accumulated amortization 6,680 6,865
Other assets, net 1,385 292
------- -------
$47,613 $50,830
======= =======
Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable 2,099 1,144
Accrued compensation and related costs 1,510 1,436
Deferred revenues 4,748 4,157
Other current liabilities 2,304 2,347
------- -------
Total current liabilities 10,661 9,084
Deferred income taxes 2,509 2,509
------- -------
Total liabilities 13,170 11,593
------- -------
Shareholders' equity:
Preferred stock: 2,000,000 shares authorized; no shares issued - -
Common stock, no par value; 20,000,000 shares authorized;
13,830,000 shares issued at July 31, 1998
and April 30, 1998 - -
Additional paid-in capital 43,187 43,187
Treasury stock, at cost 338,300 shares and 205,300 shares at
July 31, 1998 and April 30, 1998 (3,256) (1,882)
Accumulated deficit (5,488) (2,068)
------- -------
Total shareholders' equity 34,443 39,237
------- -------
Commitments and contingencies $47,613 $50,830
======= =======
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
LOGILITY, INC.
Condensed Statements of Operations (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
July 31,
----------------------
1998 1997
------- -------
<S> <C> <C>
Revenues:
License fees $ 2,545 $ 4,347
Maintenance 1,978 1,895
Services 1,999 1,506
------- -------
Total revenues 6,522 7,748
------- -------
Cost of revenues:
License fees 1,433 1,231
Maintenance 509 353
Services 853 695
------- -------
Total cost of revenues 2,795 2,279
------- -------
Gross margin 3,727 5,469
------- -------
Operating expenses:
Research and development 3,240 1,821
Less: Capitalized development (1,191) (616)
Sales and marketing 4,202 3,430
General and administrative 1,300 610
------- -------
Total operating expenses 7,551 5,245
------- -------
Operating income (loss) (3,824) 224
Other income, net 404 -
------- -------
Income (loss) before income taxes (3,420) 224
Income taxes - -
------- -------
Net income (loss) $(3,420) $ 224
======= =======
Net income (loss) per common share $ (0.25) $ 0.02
======= =======
Weighted average common shares
outstanding & common stock equivalents 13,563 11,300
======= =======
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
LOGILITY, INC.
Condensed Statements of Cash Flows (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
July 31,
---------------------
1998 1997
------- ------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(3,420) $ 224
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 1,204 1,059
(Increase) decrease in assets:
Accounts receivable 1,470 (723)
Other assets (93) (98)
Increase (decrease) in liabilities:
Accounts payable, accrued costs and other 985 (553)
Deferred revenues 591 955
------- ------
Net cash provided by operating activities 737 864
------- ------
Cash flows from investing activities:
Additions to capitalized computer software development costs (1,191) (616)
Additions to purchased computer software costs (16) (34)
Sales of short-term investments 3,718 -
Minority investment in business (763) -
Purchases of furniture and equipment (351) (204)
------- ------
Net cash provided by (used in) investing activities 1,397 (854)
------- ------
Cash flows from financing activities:
Deferred income taxes resulting from Tax Sharing Agreement - (111)
Distributions to American Software, Inc. - (231)
Repurchases of common stock (1,373) -
------- ------
Net cash used in financing activities (1,373) (342)
------- ------
Net change in cash 761 (332)
Cash and cash equivalents at beginning of period 1,006 732
------- ------
Cash and cash equivalents at end of period $ 1,767 $ 400
======= ======
</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 of Logility, Inc. (the
"Company"), 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
Company's Form 10-K, as filed with the SEC on July 28, 1998. 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 84% 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 $400,000.
C. PURCHASE OF MINORITY INTEREST
Effective July 31, 1998, the Company finalized the purchase of a 10% minority
interest in INSIGHT, a leading provider of optimization technology for supply
chain modeling and logistics systems. This investment will be accounted for
on the cost basis.
D. NET EARNINGS (LOSS) PER SHARE OF COMMON STOCK
On January 31, 1998, the Company adopted Statement of Financial Accounting
Standards No. 128, Earnings Per Share ("SFAS No. 128"), which prescribes the
calculation methodology and financial reporting requirements for basic and
diluted earnings per share. Basic earnings (loss) per common share available
to common shareholders are based on the weighted average number of common
shares outstanding. Diluted earnings per common share available to common
shareholders are based on the weighted average number of common shares
outstanding and dilutive potential common shares, such as dilutive stock
options. All prior period net earnings (loss) data presented in these
condensed financial statements have been restated to conform to the
provisions of SFAS No. 128.
6
<PAGE>
E. RECENT ACCOUNTING PRONOUNCEMENT
Revenue Recognition
On May 1, 1998, the Company adopted Statement of Position 97-2, Software
Revenue Recognition, issued by the Accounting Standards Executive Committee
in October 1997, effective for financial statements for fiscal years
beginning after December 15, 1997. The implementation of this statement has
not had a material impact on the Company's unaudited condensed financial
statements.
7
<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.
The Company previously 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. Also 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 and fulfillment of
acceptance terms, provided 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.
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 three months ended July 31, 1998 and 1997:
<TABLE>
<CAPTION>
Percentage of Pct. Change
Total Revenues in Dollars
---------------------------------- -----------------
1998 1997 1998 vs 1997
--------------- --------------- -----------------
<S> <C> <C> <C>
Revenues:
License fees 39% 56% (41)%
Maintenance 30 24 4
Services 31 20 33
--- --- ---
Total revenues 100 100 (16)
--- --- ---
Cost of revenues:
License fees 22 16 16
Maintenance 8 5 44
Services 13 9 23
--- --- ---
Total cost of revenues 43 29 23
--- --- ---
Gross margin 57 71 (32)
--- --- ---
Operating expenses:
Research and development (net) 31 16 70
Sales and marketing 64 44 23
General and administrative 20 8 113
--- --- ---
Total operating expenses 115 68 44
--- --- ---
Operating income (loss) (58) 3 nm
Other income, net 6 - nm
--- --- ---
Operating income (loss) before income taxes (52) 3 nm
Income taxes - - -
--- --- ---
Net income (loss) (52) 3% nm
=== === ===
</TABLE>
nm--not meaningful
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION (CONTINUED)
THREE MONTHS ENDED JULY 31, 1998 AND 1997:
- ------------------------------------------
REVENUES:
The Company's total revenues decreased 16% to $6.5 million from $7.7 million for
the comparable quarter a year ago. This decrease was largely due to a reduction
in the Company's product sales, partially offset by increases in implementation
and training services. International revenues represented approximately 17% of
total revenues in the quarter ended July 31, 1998 compared to approximately 7% a
year ago. This increase was due to increased effectiveness of the Company's
international sales channels, combined with a decrease in domestic revenues.
LICENSES. License fee revenues decreased significantly from a year ago in the
quarter ended July 31, 1998, primarily as a result of lower than expected sales
by the Company's direct sales force, coupled with an increasingly competitive
market for the Company's products. The direct sales channel provided
approximately 43% of the license fee revenues for this quarter compared to
approximately 40% in the comparable quarter a year ago. The Company's indirect
sales channel is principally through American Software.
MAINTENANCE. Maintenance revenues increased 4% to $2.0 million from a year ago,
due to an increase in the installed base of customers. Maintenance revenues
have a direct relationship to current and historic license fee revenues, since
license fees are the source of new maintenance customers.
SERVICES. Services revenues increased 33% to $2.0 million from a year ago as a
result of the increased utilization of the Company's implementation and training
services, which is a result of the prior growth in the Company's customer base.
GROSS MARGIN:
Total gross margin in the quarter ended July 31, 1998 was 57% compared to 71% a
year ago. This decrease was largely due to a decreased level of license fees,
which fell to 39% of total revenues, down from 56% a year ago. The gross margin
on license fees fell to 44% from 72% a year ago, while gross margin on
maintenance revenues decreased slightly to 74% compared to 81% a year ago. The
decrease in gross margin on license fees is primarily due to the large amount of
amortization expense on capitalized software contained within cost of license
fees. This expense is relatively fixed and accordingly had a negative impact on
gross margin as the level of license fees decreased. The decrease in gross
margin on maintenance revenue is due to an increase in accounts receivable
provisions for the quarter ended July 31, 1998. The gross margin on services
revenues increased slightly to 57% compared to 54% 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
----------------------------------------------
July 31, Percent July 31,
1998 Change 1997
-------- ------- --------
<S> <C> <C> <C>
Gross product development costs $ 3,240 78% $ 1,821
Percentage of total revenues 50% 24%
Less: Capitalized development (1,191) 93% (616)
Percentage of gross prod. dev. costs 37% 34%
------- -- -------
Product development expenses $ 2,049 70% $ 1,205
Percentage of total revenues 31% 16%
</TABLE>
Gross product development costs increased 78% in the quarter ended July 31, 1998
compared to a year ago as a result of the Company's continued investment in new
product development. Capitalized development increased as well, growing 93% from
a year ago, while the rate of capitalized development as a percentage of gross
product development costs increased slightly to 37% from 34% a year ago.
Product development expenses, as a percentage of total revenues, increased to
31% from 16% a year ago, due to the decrease in total revenues as well as
increased investment in new product development.
SALES AND MARKETING. Sales and marketing expenses rose 23% from a year ago. As
a percentage of total revenues, sales and marketing expenses were 64% for the
quarter ended July 31, 1998 compared to 44% for the quarter ended July 31, 1997.
This increase was due to a decrease in overall revenues, as well as increased
sales and marketing expenditures.
The mix of revenues generated between the direct and indirect (mainly American
Software) sales channels also contributed to the increase in the cost of sales
and marketing as a percentage of total revenues. For sales generated from the
indirect sales channels, the Company generally incurs sales commissions which
are substantially higher than those incurred by the Company's direct channel.
For the quarter ended July 31, 1998, increased sales and marketing expenditures
were due to the increased proportion of international revenue produced by one of
the Company's indirect sales channels, which carries a commission rate of 50%.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased 113%
to approximately $1.3 million from a year ago, mainly as a result of the
Company's growth in employees and the resulting growth in administrative costs.
For the three months ended July 31, 1998, the average number of employees was
approximately 215, compared to approximately 180 for the three months ended July
31, 1997.
OTHER INCOME:
Other income is comprised of investment earnings from the net proceeds of the
Company's initial public offering. The Company's investments are generally
short term in nature. For the quarter ended July 31, 1998, these investments
generated a yield of approximately 5.5%.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION (CONTINUED)
INCOME TAXES:
In accordance with FASB Statement No. 109, "Accounting for Income Taxes", the
Company is required to apply a separate company approach in calculating its
income tax provision. For the quarter ended July 31, 1997, the Company did not
record any income taxes as a result of the operating losses incurred since the
Company's inception. The Company entered into a Tax Sharing Agreement with
American Software, Inc. on January 23, 1997 that does not allow the Company to
utilize its Net Operating Loss Carryforwards. As a result of this agreement,
the Company did not record an income tax benefit from the losses generated for
the quarter ended July 31, 1998.
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 $737,000 in
the three months ended July 31, 1998, and provided cash of approximately
$864,000 in the same period of the prior year. The cash provided by operations
during the three months ended July 31, 1998, was primarily attributable to non-
cash depreciation and amortization expense of $1.2 million, a decrease in
accounts receivable of approximately $1.5 million, an increase in accounts
payable, accrued costs and other current liabilities of $985,000, and an
increase in deferred revenues of $591,000. This was partially offset by a net
loss of $3.4 million. The cash provided by operations during the same period of
the prior year was attributed to net income of $224,000, non-cash depreciation
and amortization expense of $1.1 million, and an increase in deferred revenues
of $955,000. This was partially offset by an increase in accounts receivable of
$723,000 and a decrease in accounts payable of $553,000.
Cash provided by (used in) investing activities was approximately $1.4 million
and ($854,000) for the three months ended July 31, 1998 and 1997, respectively.
The majority of cash for the three months ended July 31, 1998 was provided by
the sale of short-term investments. Cash used in investing activities consisted
primarily of $1.2 million in capitalized software development costs, and
$763,000 for the purchase of a minority interest in a business. For the three
months ended July 31, 1997, cash used in investing activities consisted
primarily of $616,000 in additions to capitalized software development costs,
and $204,000 in purchases of furniture and equipment.
Cash used in financing activities totaled approximately $1.4 million and
$342,000 for the three months ended July 31, 1998 and 1997, respectively.
Approximately $1.4 million was used for the repurchase of the Company's common
stock for the three month period ended July 31, 1998. For the three months
ended July 31, 1997, $231,000 was used for distributions to American Software,
Inc., and $111,000 was used for deferred income taxes resulting from the Tax
Sharing Agreement.
Days Sales Outstanding in accounts receivable were 130 days as of July 31, 1998,
compared to 86 days as of July 31,1997.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION (CONTINUED)
The Company's current ratio on July 31, 1998 was 3.54 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.
On December 15, 1997, Logility, Inc.'s Board of Directors approved a resolution
authorizing the Company to repurchase up to 350,000 shares of the Company's
common stock through open market purchases at prevailing market prices. The
timing of any repurchases would depend on market conditions, the market price of
Logility's common stock and management's assessment of the Company's liquidity
and cash flow needs. During the quarter ended July 31, 1998, pursuant to this
resolution, the Company repurchased 133,000 shares of common stock at a
cost of approximately $1.4 million. As of July 31, 1998, the Company had
purchased a cumulative total of 338,300 shares at a cost of $3.3 million.
YEAR 2000 COMPLIANCE
Based on management's assessment, the Company believes that the current versions
of its software products are Year 2000 compliant. However, the Company believes
some of its customers may be running earlier versions of the Company's products
that are not Year 2000 compliant, and the Company has been encouraging such
customers to migrate to current product versions. Moreover, the Company's
products are generally integrated into other systems involving complex software
products developed by other vendors. Year 2000 problems inherent in a
customer's other software programs might significantly limit that customer's
ability to utilize the Company's products.
The Company may in the future be subject to claims based on Year 2000 problems
in its own, as well as in others' products, and issues arising from the
integration of multiple products within an overall system. Although the Company
has not been a party to any litigation involving its products or services
related to Year 2000 compliance issues, there can be no assurance that the
Company will not in the future be required to defend its products or services in
such proceedings, or otherwise address claims based on Year 2000 issues. The
costs of defending and resolving Year 2000-related disputes, and any liability
of the Company for Year 2000-related damages, including consequential damages,
could have a material adverse effect on the Company's business, operating
results, and financial condition.
The Company utilizes third-party vendor equipment, telecommunication products
and software products that may or may not be Year 2000 compliant. Although the
Company is currently taking steps to address the impact, if any, of the Year
2000 compliance issue surrounding such third-party products, failure of any
critical technology components to be Year 2000 compliant may have an adverse
impact on business operations or require the Company to incur unanticipated
expenses to remedy any problems.
The Company believes that Year 2000 issues may affect the purchasing decisions
of customers and potential customers of the Company's products. Many businesses
are expending significant resources on projects to make their current hardware
and software systems Year 2000 compliant. Such expenditures may result in
reduced funding for projects to purchase software products such as those offered
by the Company. Potential customers may also choose to defer purchasing Year
2000 compliant products until they believe it is absolutely necessary, thus
resulting in potentially stalled market sales within the industry. Any of the
foregoing could have a material adverse effect on the Company's business,
operating results and financial condition.
13
<PAGE>
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
affect the future performance of the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
14
<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.
15
<PAGE>
(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:
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 369,000
Printing and engraving expenses 129,000
Miscellaneous 30,000
----------
Total $3,532,000
==========
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 $964,000 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 $33,152,000.
(vii) From October 6, 1997 to July 31, 1998, approximately
$3.5 million was used for capitalized software
development expense, approximately $3.3 million was
used for repurchase of the Company's stock,
approximately $1.1 million was used for purchase of
furniture and equipment, and $763,000 was used for the
purchase of a minority interest in a business. The
balance of the offering proceeds, approximately $24.5
million, 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.
16
<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 July
31, 1998.
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 September 11, 1998 /s/J. Michael Edenfield
------------------ -----------------------
J. Michael Edenfield
President, Chief Executive Officer
DATE September 11, 1998 /s/James M. Modak
------------------ -----------------
James M. Modak
Chief Financial Officer and Sr. VP
17
<PAGE>
EXHIBIT 11
LOGILITY, INC.
Statement re: Computation of Per Share Earnings (Loss)
(In thousands, except per share amounts)
Three Months Ended
July 31,
--------------------
1998 1997
------- -------
Common Stock:
Weighted average common
shares outstanding 13,563 11,300
Dilutive effect of outstanding
stock options * - -
------- -------
Total 13,563 11,300
------- -------
Net earnings (loss) $(3,420) $ 224
======= =======
Earnings (loss) per common
and common equivalent share $ (0.25) $ 0.02
======= =======
* Stock options are not included in the three months ended July 31, 1998
calculation due to the anti-dilution to the net loss.
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> APR-30-1998 APR-30-1998
<PERIOD-START> MAY-01-1998 MAY-01-1997
<PERIOD-END> JUL-31-1998 APR-30-1998
<CASH> 1,767 1,006
<SECURITIES> 25,841 29,559
<RECEIVABLES> 9,722 11,215
<ALLOWANCES> 398 421
<INVENTORY> 0 0
<CURRENT-ASSETS> 37,759 42,090
<PP&E> 2,779 2,430
<DEPRECIATION> 990 846
<TOTAL-ASSETS> 47,613 50,830
<CURRENT-LIABILITIES> 10,661 9,084
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 34,443 39,237
<TOTAL-LIABILITY-AND-EQUITY> 47,613 50,830
<SALES> 0 0
<TOTAL-REVENUES> 6,522 34,622
<CGS> 0 0
<TOTAL-COSTS> 2,795 10,564
<OTHER-EXPENSES> 7,551 22,379
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (3,420) 2,582
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (3,420) 2,582
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (3,420) 2,582
<EPS-PRIMARY> (.25) .20
<EPS-DILUTED> 0 0
</TABLE>
