Good afternoon, and welcome to American Software's Third Quarter Fiscal 2013 Conference Call. To begin, I would like to remind you that this conference call may contain forward-looking statements, including statements regarding, among other things, our business strategy and growth strategy.

Any such forward-looking statements speak only as of this date. These forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties, some of which cannot be predicted or quantified and are beyond our control.

Future developments and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.

There are a number of factors, which could cause actual results to differ materially from those anticipated by statements made on this call. Such factors include, but are not limited to, changes and uncertainty in general economic conditions, the growth rate of the market for our products and services, the timely availability and market acceptance of these products and services, the effect of competitive products and pricing and other competitive pressures and the irregular and unpredictable pattern of revenues.

In light of these risks and uncertainties, there can be no assurance that the forward-looking information will prove to be accurate.

At this time, I'd like to turn the call over to Mike Edenfield, CEO of Logility and COO of American Software.

Thanks, Vince. Good afternoon, everyone, and thank you for participating on the call.

I have some comments on the fiscal 2013 third quarter results. Vince will review the details on the financial results for the quarter and year-to-date, and then we'll take the questions.

American Software was profitable for the 48th consecutive quarter. Our revenues were $23.1 million, which was a decrease of 9% compared to third quarter last year.

Revenues declined due to an unexpected drop in services revenues, as well as lower license fees, which we attribute to economic uncertainty and the marketplace would seem to be extending our sales cycles. Our net earnings were $2.1 million, a decrease of 17% from last year.

We had 21 new customer signed license agreements in the third quarter compared to 15 new customers in the second quarter. The customers from 14 countries have license agreements with the company in the quarter.

Those countries include Australia, Canada, Colombia, Finland, France, Germany, India, Italy, Japan, the Netherlands, Norway, Sweden, the United Arab Emirates and the United States. The notable new and existing customers include Boise Paper, Brooks Sports, Denso Europe, IPD Industrial Products, Integra Healthcare, Kelly-Moore Paint Company, Mark Anthony Brands, Masonite, Massimo Zanetti Beverage USA, Nichiha Corporation, Revised Clothing, Seagate Technology, Seco Tools and Sunovion Pharmaceuticals.

We continue to be encouraged by the number of new customers licensed in our products, as new customers are source of future maintenance and implementation services revenue as well as being good prospects for additional product sales. So as we look to the fourth quarter and the remainder of fiscal 2013, we have the deals in the pipeline to grow our licensee fees.

And we must have a better close rate and environment than in recent quarters.

I will turn the call over to Vince for a more detailed review of our financial results.

Thanks, Mike. Comparing the third quarter of fiscal '13 to the same period last year, as Mike indicated, our overall revenues decreased 9% to $23.1 million compared to $25.4 million in the same quarter last year.

This is primarily due to license fees, which decreased 28% to $4.9 million compared to $6.8 million for the same period last year. Services and other revenues decreased 7% to $9.6 million for the current quarter and that compares to $10.3 million for the same period last year.

Services revenues decreased 17% at our ERP unit and 13% at our IT Consulting unit due to timing of project work, and this was partly offset by 11% increase at Logility. We expect these services revenues to increase sequentially in Q4 based on the pickup of project activity.

Maintenance revenues increased 3% to $8.6 million compared to $8.3 million, primarily due to increased licensees in prior quarters.

Taking a look at our cost, our overall gross margin was 52% for the current quarter, and that compares to 53% for the same quarter last year. Our license fee margin was 64% for the current period compared to 68% for the same period last year, and that's down primarily due to lower license fees.

Our service margins were 23% for the current and prior year quarter. Our maintenance margin was 60% -- excuse me, 78% for the current quarter and that's up from 77% in the same period last year.

Looking at operating expenses, our gross R&D expenses were 13% of total revenues for the current quarter compared to 11% in the prior year quarter, and that's due to increased investment in several R&D projects at Logility. As a percentage of revenue, sales and marketing expenses were 21% of revenues for the current quarter compared to 18% for the same period last year, and that's primarily due to increased headcount.

Our G&A expenses were 11% of total revenues for the current quarter, and that compares to 14% in the same period last year. Operating income was 23 -- excuse me, $2.3 million for this quarter compared to $3.3 million for the same quarter a year ago.

Adjusted EBITDA, which excludes stock-based compensation, was $3.7 million for this quarter compared to $4.7 million the same period last year. So our GAAP net income was $2.1 million or earnings per diluted share of $0.08 for this quarter compared to net income of $2.6 million or $0.10 earnings per diluted share for the same period last year.

Adjusted net income was $2.5 million or adjusted earnings per diluted share of $0.09 for the third quarter, and that compares to net income of $2.9 million or adjusted diluted earnings per share of $0.11 for the same period last year. And these adjusted numbers exclude amortization of intangible expenses related to acquisitions and stock-based compensation expense.

International revenues this quarter were 11% of total revenues and for the current and same prior year quarters. Looking at the year-to-date numbers, 9 months ended January 31, 2013, compared to the same period last year, overall revenues increased 1% to $75.3 million compared to $74.7 million.

Our license fees year-to-date are $15.5 million compared to $20.5 million for the same period last year. Services revenues increased 14% to $34.4 million year-to-date compared to $30.1 million last year.

Our maintenance revenues also increased 5% to $25.4 million compared to $24.1 million last year.

Looking at cost for the 9-month period, overall gross margin was 54% compared to 55% same period last year. Our license fee margin decreased to 70% from 73% last year, again, due to lower license fees.

Our services margins were up to 30% compared to 26% for the year-to-date basis. And that's because of increased services revenues and improved utilization and project billing rate.

Maintenance margins were 77% for both the current year-to-date and same period last year.

Looking at operating expenses on a year-to-date basis, our gross R&D expenses were 12% of revenues for the 9-month period compared to 11% the same period last year, and that's due to increased R&D investments. As a percentage of total revenues, our sales and marketing expenses were 19% for the current period compared to 18% the same period last year that's due to increased headcount.

G&A expenses were 12% of revenues compared to 13% for the same period last year.

Our operating income year-to-date was $10.2 million compared to operating income of $11.6 million last year. Adjusted EBITDA year-to-date was $14.5 million compared to $15.8 million for the same period last year.

Our GAAP net income was $7.3 million year-to-date or $0.27 earnings per diluted share compared to net income of $7.9 million or $0.29 earnings per diluted share. Adjusted income year-to-date was $8.3 million or earnings per diluted share of $0.30 compared to net income of $8.7 million earnings per diluted share of $0.32 for the same period last year.

International revenues year-to-date were approximately 14% of total revenues compared to 16% the same period last year.

Looking at the balance sheet, the company's financial position remains strong with cash and investments of approximately $57.6 million at the end of January 31, 2013, with no debt. During the third quarter, the company paid approximately $10.6 million in dividends and repurchased approximately 65,000 shares of its common stock for approximately $505,000 under its authorized stock repurchase program.

The stock repurchase program has a remaining balance of 1.1 million shares left.

Other aspects of the balance sheet, our billed accounts receivable at the end of January 31, 2013, was $14.3 million, unbilled was $4.6 million for a total of $18.9 million. Deferred revenues are $19.8 million and shareholder equity is $79.4 million.

Our current ratio increased to 2.9 as of January 31, 2013, compared to the same quarter last year of 2.6. Our day sales outstanding as of January 31, 2013, was approximately 75 days versus 68 days, and that was due primarily to a delay at one of our large receivables, which was subsequently collected after the end of the quarter.

At this time, I'd to turn the call over to any questions.

Mike, could you tell us the inventory optimization -- the large inventory optimization deals that you closed last year, are they fully implemented now? Has that been completed?

Are they up and running? And are those customers referenceable?

Yes, probably the largest project we did is definitely up and running. As a matter of fact, they had to supply our team out and had salutatory dinner for us.

And they're very good reference.

Okay, great. And did you do any I/O deals in this quarter?

We didn't do any large ones this quarter.

Okay, and can you give us a sense for maybe what the ASP was like versus last year?

The ASP this quarter was the lowest we've had in 2 or 3 years.

Okay. And so it sounds like you may be comfortable with the pipeline, can you give us some detail about what the pipeline looks like in terms of components?

I mean, did you have a large deals in the pipeline? And any thoughts on what you might do to improve close rates here?

We have a couple of nice-sized opportunities that one -- were selected. It's just going -- it's just a very large company that's going through a number of sign-offs.

We had hoped to get that one last quarter but we -- they're just moving much, much slower than they could be. And so we've got bigger opportunities.

We have -- quite frankly, I think we have more opportunities in the short-term pipeline for the quarter we're in right now. So things just seem to be taking longer.

I don't know if it's the uncertainty with the sequester or what have it. But it's just not like it was last year in terms of deals moving along at a timely manner and getting done.

They're moving slower and not as many of them are getting done. That said, I was very pleased with our quarterly forecast at the start of the quarter and how many deals and the size of the deals.

Okay. Have your win rates also declined?

Or it's just strictly the sale cycle is getting longer?

It's more of lengthening of the sale cycle.

Okay. And I'll ask one more quick one, and then I'll jump back in the queue.

The -- I know the Logility service revenue was up year-over-year, but it looks like it pretty substantial declined sequentially, is that Logility service revenue a good run rate going forward?

Yes. Well actually, we had a -- the third quarter is a seasonal issue for us.

And usually, we're down maybe 10%, 15% from what the run rate -- and all other things equal from the run rate the prior quarter. But this year, it hit us a little harder the way the holidays were, where you might have a full week dealers billing because of Christmas and New Year's, the way the holidays landed in the middle of 2 different weeks.

And we lost a big chunk there. So we're going to rebound, and I think the run rate will be higher than what we had.

In terms of some of the comments on the services side, you talked about things not coming in as expected. Was that purely the seasonal factors you mentioned earlier?

Or did you actually see customers either defer or cancel services engagements altogether?

No, it was the seasonal -- seasonality.

Okay. And then in the press release you mentioned you guys continue to want to expand the sales force here.

I guess, given the current deal cycles that you're seeing, at what pace should we expect incremental sales capacity to be brought on?

Well, we added -- for the Voyager line, which is our direct channel primarily, we added about 40% last year. And we're still carrying those folks.

We -- we're still investing in them, and I think they can be productive, particularly if the market improves. We've also made some additional investments in the Demand Solutions sales channel by hiring managers to focus on certain regions of the world and help our VARs sell.

And that is something that -- we studied some other companies in the past that had very good indirect channels and consulted actually with the people who had worked there and how they did it. And I think that's an investment we'll make, and it's going to take a while.

But I believe in the long run, it will help us there as well.

And I know, historically, SmartOps had been an SAP partner anyway, so maybe the acquisition there doesn't really change things, but curious on your thoughts how that impacts the competitive landscape and then whether that presents you guys with opportunities to pick up any additional sales folks with good experience in the space.

Well, we've already interviewed one before we knew about the acquisition. He said they weren't doing very well there.

I think what it does is it gives us a free ride outside of the SAP world. SmartOps was trying to sell outside of SAP as well.

But they'll be -- they will not be in that market I don't think, I think that they focus on totally selling to SAP customers.

And then just a couple of housekeeping questions, Vince. I heard the growth for Logility services, I was wondering if you have the supply chain growth for the maintenance on license pieces?

Yes. The maintenance was about 4% [ph] for the supply chain, year-over-year.

And the license fees went down 23% year-over-year.

Yes. Mike, what percentage of the Voyager reps have been on board more than a year?

Yes. I would say about 70%, maybe 8%.

Thank you for participating on the call and your support of American Software. We look forward to our next earnings call.