Logility Reports Preliminary Third Quarter of Fiscal Year 2008 Results

ATLANTA, March 4 /PRNewswire-FirstCall/ -- Logility, Inc. NASDAQ: LGTY, a leading supplier of collaborative solutions to optimize the supply chain, today announced financial results for the third quarter of fiscal year 2008, achieving 11 consecutive quarters of profitability.

    Key third quarter financial highlights include:
    -- Total revenues for the quarter ended January 31, 2008 were
       $9.9 million, a decrease of 12% over the third quarter of fiscal 2007;

    -- Software license fees for the quarter ended January 31, 2008 were
       $2.3 million, a decrease of 40% over the third quarter of fiscal 2007;

    -- Services and other revenues for the quarter ended January 31, 2008 were
       $1.9 million, an increase of 9% over the third quarter of fiscal 2007;

    -- Maintenance revenues for the quarter ended January 31, 2008 were
       $5.7 million, an increase of 1% over the third quarter of fiscal 2007;
       and

    -- Operating earnings for the quarter ended January 31, 2008 were
       approximately $0.7 million, a decrease of 75% compared to operating
       earnings for the third quarter of fiscal 2007; operating earnings for
       the third quarter ended January 31, 2008 included a non-cash write-down
       of capitalized software development costs of $1.2 million.

GAAP net earnings were $835,000 or $0.06 earnings per fully diluted share for the third quarter of fiscal 2008 compared to net earnings of $2.0 million or $0.15 earnings per fully diluted share for the third quarter of fiscal 2007. Adjusted net earnings, which exclude stock option compensation expense, acquisition-related amortization of intangibles expense and write-down of capitalized software costs, for the quarter ended January 31, 2008 were $1.8 million or $0.13 earnings per fully diluted share compared to adjusted net earnings of $2.1 million or $0.16 earnings per fully diluted share for the same period last year.

Total revenues for the nine months ended January 31, 2008 were $33.0 million or a 7% increase compared to the comparable period last year. Software license fees for the nine months were $10.4 million or a 1% decrease compared to the same period last year. Services and other revenues were $6.0 million or a 25% increase compared to the same period last year. Maintenance revenues were $16.6 million or a 7% increase compared to the same period last year. For the nine months ended January 31, 2008, the Company reported operating earnings of approximately $5.9 million, a 9% increase compared to operating earnings of $5.4 million for the same period last year; operating earnings for the nine months ended January 31, 2008 included a non-cash write-down of capitalized software development costs of $1.2 million.

GAAP net earnings were approximately $4.4 million or $0.33 per fully diluted share for the nine months ended January 31, 2008 compared to net earnings of $4.0 million or $0.30 per fully diluted share for the same period last year. Adjusted net earnings, which for the current period exclude stock option compensation expense, acquisition-related amortization of intangibles expense, a non-cash tax valuation adjustment, and write-down of capitalized software costs, for the nine months ended January 31, 2008 were $5.7 million or $0.42 earnings per fully diluted share compared to net earnings of $4.4 million or $0.33 earnings per fully diluted share the same period last year, which exclude stock option compensation expense and acquisition related amortization of intangibles expense.

The Company is including adjusted net earnings and adjusted net earnings per share in the summary financial information provided with this press release as supplemental information relating to its operating results. This financial information is not in accordance with, or an alternative for, GAAP and may be different from non-GAAP net earnings and non-GAAP per share measures used by other companies. The Company believes that this presentation of adjusted net earnings and adjusted net earnings per share provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations.

The overall financial condition of the Company remains strong, with cash and investments of approximately $41.4 million as of January 31, 2008. This is approximately a $1.7 million sequential increase in cash and investments compared to October 31, 2007 and approximately a $9.5 million increase compared to January 31, 2007.

"While disappointed in our software license revenue for the quarter, our other financial metrics posted solid results and our overall business remains healthy," noted Mike Edenfield, Logility president and CEO. "With our large, satisfied customer base and significant recurring revenues, we remain optimistic about our opportunities in 2008."

"The increased discipline and efficiency that Demand Solutions and Logility Voyager Solutions provide gives manufacturing, wholesale, retail and logistics organizations the opportunity to significantly improve cash flow and gain greater financial flexibility," continued Edenfield. "Logility's supply chain solutions help effectively synchronize global market demand with supply and distribution to enable a competitive advantage."

    Highlights for the third quarter of fiscal 2008 include:

    Customers:
    -- Notable new and existing customers placing orders with the Company in
       the third quarter include: Arch Chemicals, Bob's Furniture, GST
       Autoleather, Huhtamaki LTD, Johnson Diversey Japan, PPG Industries
       Europe, Puma, Unilever UK Ltd., and Yurman Design.

    -- During the quarter, software license agreements were signed with
       customers located in 14 countries including: Australia, Canada, China,
       Ireland, Italy, Japan, Norway, Pakistan, Singapore, South Africa,
       Sweden, Switzerland, the United Kingdom, and the United States.

    -- Logility announced that Verizon Wireless, the leader in delivering
       wireless communication innovations to the mass market, has selected
       Logility Voyager Solutions(TM) to strengthen its supply chain by
       improving inventory, demand and sales and operations planning.

    -- Logility announced Intertape Polymer Group's success implementing
       Logility Voyager Solutions which has helped Intertape Polymer Group
       quickly gain visibility and flexibility in its supply chain. As a
       result of the implementation, Intertape Polymer Group has increased
       demand visibility, created a more proactive supply chain and refined
       its inventory and replenishment planning processes.

    -- Logility customer A.O. Smith Water Products was featured in
       AberdeenGroup's "Demand Management in Discrete Industries" benchmark
       report for its success in building a lean manufacturing initiative that
       focuses on better demand management which has led to reduced inventory,
       more proactive response to demand fluctuations, improved customer
       service and increased collaboration through an a streamlined sales and
       operations planning process.

    -- Logility announced Connections 2008: Saddle Up for Supply Chain Success
       to be held May 14-16 in San Antonio, TX. The conference will give
       customers and attendees the opportunity to network and share ideas with
       fellow supply chain professionals, and gain the latest insight from
       industry experts and peers on how to leverage best practices for global
       supply chain success.


    Logility Products and Technology:
    -- Demand Management, Inc. (DMI), a wholly-owned subsidiary of the
       Company, announced integration of the Demand Solutions(R) planning
       suite with Microsoft Dynamics(TM) GP and Microsoft Dynamics NAV. The
       integration is in response to significant overlap among Demand
       Solutions and Microsoft Dynamics GP and Microsoft Dynamics' NAV
       customer profiles. Demand Management, Inc. also announced plans to
       adopt Microsoft's next generation technology platform, including
       Microsoft SQL Server 2008, Microsoft Vista Ribbon Technology and .NET
       3.0/3.5, for all future Demand Solutions product offerings. Demand
       Management and Microsoft share existing and potential customers in
       small and midsize enterprises.

    -- Food Logistics magazine named both Logility and Demand Management,
       Logility's wholly-owned subsidiary, to the FL100, an annual listing of
       the Top 100 technology suppliers to the food industry. The FL100
       consists of technology and solution providers that are helping food,
       beverage and consumer packaged goods companies to transform their
       supply chains and gain a competitive supply chain advantage. Logility
       was honored to be recognized in the FL100 for the fourth consecutive
       year. The FL100 is printed as the cover story for the November/December
       2007 issue of Food Logistics and is featured on the
       www.foodlogistics.com website.

    -- Logility received multiple Readers' Choice Awards for the eighth
       consecutive year by Consumer Goods Technology magazine. Logility was
       ranked as a top three solution provider for supply chain planning and
       supply chain execution and also ranked number two for customer
       experience in both categories by Consumer Goods Technology readers.

About Logility

With more than 1,250 customers worldwide, Logility is a 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; sales and operations planning; supply and global sourcing optimization; transportation planning and execution; and warehouse management. Demand Solutions provide forecasting, demand planning and point-of-sale analysis for maximizing profits in manufacturing, distribution and retail operations. Logility customers include Avery Dennison Corporation, Brown Shoe Company, BP (British Petroleum), Hyundai Motor America, Leviton Manufacturing Company, McCain Foods, Pernod Ricard, Remington Products Company, Sigma Aldrich, Under Armour Performance Apparel 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 challenges and risks associated with integration of acquired product lines and companies; 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, 2007 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: www.logility.com or E-mail: askLogility@logility.com.

Logility is a registered trademark and Logility Voyager Solutions is a trademark of Logility. Demand Solutions is a registered trademark of Demand Management, Inc., a wholly-owned subsidiary of Logility, Inc. Other products mentioned in this document are registered, trademarked or service marked by their respective owners.

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

                                Third Quarter Ended      Nine Months Ended
                                    January 31,             January 31,
                                                 Pct                     Pct
                                2008     2007    Chg.   2008     2007    Chg.
    Revenues:
      License                   $2,333   $3,900  (40%) $10,409  $10,544   (1%)
      Services & other           1,933    1,773    9%    5,985    4,775   25%
      Maintenance                5,665    5,623    1%   16,636   15,589    7%
        Total Revenues           9,931   11,296  (12%)  33,030   30,908    7%

    Cost of Revenues:
      License                    1,364    1,318    3%    4,518    4,192    8%
      Services & other             853      879   (3%)   2,898    2,570   13%
      Maintenance                1,261    1,229    3%    3,609    3,675   (2%)
      Write-down of
       capitalized software
       development costs         1,196      -      nm    1,196      -      nm
        Total Cost of Revenues   4,674    3,426   36%   12,221   10,437   17%
    Gross Margin                 5,257    7,870  (33%)  20,809   20,471    2%
    Operating expenses:
      Research and development   1,719    1,868   (8%)   5,544    5,391    3%
      Less: capitalized
       development                (480)    (495)  (3%)  (1,635)  (1,678)  (3%)
      Sales and marketing        2,402    2,378    1%    7,279    7,310    0%
      General and
       administrative              853    1,381  (38%)   3,484    3,821   (9%)
      Acquisition related
       amortization of
       intangibles                  88       88    0%      263      263    0%

        Total Operating
         Expenses                4,582    5,220  (12%)  14,935   15,107   (1%)
    Operating Earnings             675    2,650  (75%)   5,874    5,364   10%
      Interest Income & Other,
       Net                         538      456   18%    1,451    1,226   18%
    Earnings Before Income
     Taxes                       1,213    3,106  (61%)   7,325    6,590   11%
         Income Tax Expense        378    1,111  (66%)   2,971    2,559   16%
    Net Earnings                  $835   $1,995  (58%)  $4,354   $4,031    8%
    Earnings per common share:
               Basic             $0.06    $0.15  (60%)   $0.34    $0.31   10%
               Diluted           $0.06    $0.15  (60%)   $0.33    $0.30   10%

    Weighted Average Number of
     Common Shares:
        Basic                   12,964   12,898         12,950   12,897
        Diluted                 13,336   13,220         13,372   13,247

    Reconciliation of Adjusted
     Net Earnings:
    Net Earnings                  $835   $1,995         $4,354   $4,031
    Acquisition related
     amortization of
     intangibles(1)                 61       57            156      161
    Stock-based compensation
     (1)                            69       55            165      177
    Write-down of capitalized
     software development
     costs (1)                     823      -              710      -
    Tax valuation adjustment
     (non-cash)                    -        -              283      -
    Adjusted net earnings       $1,788   $2,107  (15%)  $5,668   $4,369   30%

    Adjusted Net Earnings per
     Share - Diluted             $0.13    $0.16  (19%)   $0.42    $0.33   27%

    (1) - Tax affected
    nm- not meaningful



                                LOGILITY, INC.
                    Consolidated Balance Sheet Information
                                (in thousands)
                                 (Unaudited)

                               January 31,   April 30,
                                  2008         2007

    Cash and Short-term
     investments                 $41,372     $32,316
    Accounts Receivable:
      Billed                       6,308       7,764
      Unbilled                       977       1,412
    Total Accounts Receivable,
     net                           7,285       9,176
    Deferred Tax Assets              486       1,361
    Due from ASI                     -         1,167
    Prepaids & Other Current
     Assets                        2,409       1,995
         Current Assets           51,552      46,015

    PP&E, net                        453         436
    Capitalized Software, net      4,595       6,042
    Goodwill                       5,809       5,809
    Other Intangibles, net           965       1,288
    Non-current Assets                61          67
         Total Assets            $63,435     $59,657

    Accounts Payable                $398        $275
    Other Current Liabilities      2,898       5,680
    Due to ASI                     1,633         -
    Deferred Revenues             11,329      11,350
        Current Liabilities       16,258      17,305

    Deferred Tax Liability         1,792       1,940
    Shareholders' Equity          45,385      40,412

         Total Liabilities &
          Shareholders' Equity   $63,435     $59,657

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