10-Q

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 September 30, 2014

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 0-5734

AGILYSYS, INC.

(Exact name of registrant as specified in its charter)

Ohio	34-0907152
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
425 Walnut Street, Suite 1800, Cincinnati, Ohio	45202
(Address of principal executive offices)	(ZIP Code)
(770) 810-7800
(Registrant’s telephone number, including area code)
N/A
(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 by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨		Accelerated filer	x
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of Common Shares of the registrant outstanding as of October 31, 2014 was 22,814,241.

AGILYSYS, INC.

Index

Part I. Financial Information
	Item 1	Financial Statements	3
		Condensed Consolidated Balance Sheets (Unaudited) – September 30, 2014 and March 31, 2014	3
		Condensed Consolidated Statements of Operations (Unaudited) - Three and Six Months Ended September 30, 2014 and 2013	4
		Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)- Three and Six Months Ended September 30, 2014 and 2013	5
		Condensed Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended September 30, 2014 and 2013	6
		Notes to Condensed Consolidated Financial Statements (Unaudited)	7
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	37
	Item 4	Controls and Procedures	37
Part II. Other Information
	Item 1	Legal Proceedings	38
	Item 1A	Risk Factors	38
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38
	Item 3	Defaults Upon Senior Securities	38
	Item 4	Mine Safety Disclosures	38
	Item 5	Other Information	38
	Item 6	Exhibits	38
Signatures

2

AGILYSYS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)	September 30, 2014			March 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	67,168		$	99,566
Marketable securities	10,077			—
Accounts receivable, net of allowances of $838 and $1,101, respectively	23,519			23,615
Inventories	720			481
Prepaid expenses	2,901			3,300
Other current assets	585			2,892
Total current assets	104,970			129,854
Property and equipment, net	13,670			12,251
Goodwill	19,622			17,158
Intangible assets, net	9,985			10,626
Software development costs, net	24,498			17,221
Other non-current assets	3,851			3,785
Total assets	$	176,596		$	190,895
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	10,144		$	11,073
Deferred revenue	17,295			22,795
Accrued liabilities	9,555			14,232
Capital lease obligations, current	141			43
Total current liabilities	37,135			48,143
Deferred income taxes, non-current	3,444			3,422
Capital lease obligations, non-current	170			292
Other non-current liabilities	5,190			6,165
Commitments and contingencies (see Note 9)
Shareholders' equity:
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 22,814,241 and 22,467,970 shares outstanding at September 30, 2014 and March 31, 2014, respectively	9,482			9,482
Treasury shares, 8,792,590 and 9,138,861 at September 30, 2014 and March 31, 2014, respectively	(2,638		)	(2,741		)
Capital in excess of stated value	(12,363		)	(13,409		)
Retained earnings	136,319			139,675
Accumulated other comprehensive loss	(143		)	(134		)
Total shareholders' equity	130,657			132,873
Total liabilities and shareholders' equity	$	176,596		$	190,895

See accompanying notes to condensed consolidated financial statements.

3

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended						Six months ended
	September 30,						September 30,
(In thousands, except per share data)	2014			2013			2014			2013
Net revenue:
Products	$	7,649		$	8,585		$	13,701		$	16,091
Support, maintenance and subscription services	13,775			12,881			27,594			25,755
Professional services	4,894			3,380			8,769			6,700
Total net revenue	26,318			24,846			50,064			48,546
Cost of goods sold:
Products	3,502			3,285			7,001			6,908
Support, maintenance and subscription services	2,961			2,578			6,091			4,847
Professional services	3,186			2,395			5,629			4,566
Total net cost of goods sold	9,649			8,258			18,721			16,321
Gross profit	16,669			16,588			31,343			32,225
	63.3		%	66.8		%	62.6		%	66.4		%
Operating expenses:
Product development	6,191			6,714			12,056			12,946
Sales and marketing	3,825			4,068			7,710			7,035
General and administrative	6,079			5,065			11,196			9,694
Depreciation of fixed assets	532			513			1,146			994
Amortization of intangibles	594			794			2,377			1,588
Asset impairments and related charges	—			18			—			18
Restructuring, severance and other charges	448			562			818			617
Legal settlements	54			—			203			—
Operating loss	(1,054		)	(1,146		)	(4,163		)	(667		)
Other (income) expenses:
Interest income	(21		)	(20		)	(74		)	(33		)
Interest expense	14			45			27			106
Other (income) expense, net	(1		)	39			(46		)	11
Loss before income taxes	(1,046		)	(1,210		)	(4,070		)	(751		)
Income tax expense (benefit)	81			100			(714		)	(230		)
Loss from continuing operations	(1,127		)	(1,310		)	(3,356		)	(521		)
Income from discontinued operations, net of taxes	—			21,762			—			22,289
Net (loss) income	$	(1,127	)	$	20,452		$	(3,356	)	$	21,768
Weighted average shares outstanding - basic	22,340			22,125			22,332			22,075
Net (loss) income per share - basic:
Loss per share from continuing operations	$	(0.05	)	$	(0.06	)	$	(0.15	)	$	(0.02	)
Income per share from discontinued operations	—			0.98			—			1.01
Net (loss) income per share	$	(0.05	)	$	0.92		$	(0.15	)	$	0.99
Weighted average shares outstanding - diluted	22,340			22,125			22,332			22,075
Net (loss) income per share - diluted:
Loss per share from continuing operations	$	(0.05	)	$	(0.06	)	$	(0.15	)	$	(0.02	)
Income per share from discontinued operations	—			0.98			—			1.01
Net (loss) income per share	$	(0.05	)	$	0.92		$	(0.15	)	$	0.99

See accompanying notes to condensed consolidated financial statements.

4

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	Three months ended					Six months ended
	September 30,					September 30,
(In thousands)	2014			2013		2014			2013
Net (loss) income	$	(1,127	)	$	20,452	$	(3,356	)	$	21,768
Other comprehensive (loss) income, net of tax:
Unrealized foreign currency translation adjustments	(1		)	133		(4		)	184
Unrealized loss on sale of securities	(1		)	—		(5		)	—
Total comprehensive (loss) income	$	(1,129	)	$	20,585	$	(3,365	)	$	21,952

See accompanying notes to condensed consolidated financial statements.

5

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months ended
(In thousands)	September 30,
	2014			2013
Operating activities
Net (loss) income	$	(3,356	)	$	21,768
Less: Income from discontinued operations	—			22,289
Loss from continuing operations	(3,356		)	(521		)
Adjustments to reconcile loss from continuing operations to net cash used in operating activities
Restructuring, severance and other charges	818			617
Payments for restructuring, severance and other charges	(823		)	(896		)
Legal settlements	203			—
Payments for legal settlements	(1,714		)	(87		)
Asset impairments and related charges	—			18
Depreciation	1,146			994
Amortization	2,987			1,576
Share-based compensation	1,067			882
Excess tax benefit from equity awards	—			(139		)
Changes in operating assets and liabilities:
Accounts receivable	104			(1,572		)
Inventories	(237		)	214
Prepaid expense	400			(333		)
Accounts payable	(1,432		)	(1,032		)
Deferred revenue	(5,503		)	(5,133		)
Accrued liabilities	(2,255		)	(2,055		)
Income taxes payable	(892		)	(539		)
Other changes, net	(17		)	339
Net cash used in operating activities from continuing operations	(9,504		)	(7,667		)
Net cash used in operating activities from discontinued operations	—			(1,011		)
Net cash used in operating activities	(9,504		)	(8,678		)
Investing activities
Capital expenditures	(3,036		)	(2,425		)
Capitalized software development costs	(7,974		)	(4,853		)
Proceeds from sale of business units	282			36,054
Proceeds from company-owned life insurance policies, net	1,969			(4		)
Cash paid for acquisition, net	(3,750		)	(1,750		)
Return of investment in marketable securities	119			—
Investments in marketable securities	(10,240		)	—
Net cash (used) provided in investing activities from continuing operations	(22,630		)	27,022
Net cash (used) provided in investing activities from discontinued operations	—			(154		)
Net cash (used) provided in investing activities	(22,630		)	26,868
Financing activities
Repurchase of common shares to satisfy employee tax withholding	(373		)	(777		)
Exercise of employee stock options	102			64
Excess tax benefit from equity awards	—			139
Principal payments under long-term obligations	(23		)	(38		)
Net cash used in financing activities from continuing operations	(294		)	(612		)
Net cash used in financing activities from discontinued operations	—			(80		)
Net cash used in financing activities	(294		)	(692		)
Effect of exchange rate changes on cash	30			3
Cash flows used in continuing operations	(32,398		)	18,746
Cash flows used in discontinued operations	—			(1,245		)
Net (decrease) increase in cash and cash equivalents	(32,398		)	17,501
Cash and cash equivalents at beginning of period	99,566			82,931
Cash and cash equivalents at end of period	$	67,168		$	100,432
Less cash presented in current assets of discontinued operations on balance sheet	—			678
Cash and cash equivalents at end of period - continuing operations	$	67,168		$	99,754

See accompanying notes to condensed consolidated financial statements.

6

AGILYSYS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Table amounts in thousands, except per share data)

1. Nature of Operations and Financial Statement Presentation

Nature of Operations

Agilysys is a leading developer and marketer of proprietary enterprise software, services and solutions to the hospitality industry. We specialize in market-leading point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document management and mobile and wireless solutions that are designed to streamline operations, improve efficiency and enhance the guest experience. Agilysys serves four major market sectors: Gaming, both corporate and tribal; Hotels, Resorts and Cruise; Foodservice Management; and Restaurants, Universities, Stadia and Healthcare. A significant portion of our consolidated revenue is derived from contract support, maintenance and subscription services.

Agilysys operates extensively throughout North America, Europe and Asia, with corporate services located in Alpharetta, GA, and offices in Singapore, Hong Kong and Malaysia. Agilysys is comprised of a single operating segment and operates as a pure play software-driven solutions provider to the hospitality industry.

The sales of our RSG business and UK entity each represented a disposal of a component of an entity. As such, the operating results of RSG and the UK entity have been reported as a component of discontinued operations in the Condensed Consolidated Statement of Operations for the three and six months endedSeptember 30, 2013 and the Condensed Consolidated Statement of Cash Flows for the six months endedSeptember 30, 2013.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include our accounts consolidated with our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Our fiscal year ends on March 31st. References to a particular year refer to the fiscal year ending in March of that year. For example, fiscal 2014 refers to the fiscal year ending March 31, 2014.

Our unaudited interim financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information, the instructions to the Quarterly Report on Form 10-Q (Quarterly Report) under the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10-01 of Regulation S-X under the Exchange Act. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements.

The Condensed Consolidated Balance Sheet as of September 30, 2014, as well as the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive (Loss) Income for three and six months endedSeptember 30, 2014 and 2013, and the Condensed Consolidated Statements of Cash Flow for the six months ended September 30, 2014 and 2013, are unaudited. However, these financial statements have been prepared on the same basis as those in the audited annual financial statements. In the opinion of management, all adjustments of a recurring nature necessary to fairly present the results of operations, financial position, and cash flows have been made. Further, we have evaluated all significant events occurring subsequent to the date of the Condensed Consolidated Financial Statements and through the filing of this Quarterly Report.

These unaudited interim financial statements should be read together with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended March 31, 2014, filed with the Securities and Exchange Commission (SEC) on June 4, 2014.

7

2. Summary of Significant Accounting Policies

A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended March 31, 2014, included in our Annual Report on Form 10-K. Except as described below, there have been no material changes to our significant accounting policies and estimates from those disclosed therein.

Marketable Securities

Marketable securities can consist of certificates of deposits, commercial paper, corporate bonds and other investments with established commercial banking institutions with readily determinable fair values and stated maturities of greater than three months.  We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such designation at each balance sheet date.  Our marketable securities are classified as available for sale and have original maturity dates from 90 to 365 days.

Adopted and Recently Issued Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements - Going Concern, which provides guidance on disclosure of uncertainties about an entity’s ability to continue as a going concern. This is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or related disclosures.

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which provides guidance requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2015. We are currently evaluating the impact that the adoption of ASU 2014-12 will have on our consolidated financial statements or related disclosures.

In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which converges the FASB and the International Accounting Standards Board standard on revenue recognition. Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2016. We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements or related disclosures.

In April 2014, FASB issued ASU No. 2014-08, Presentation of Financial Statements and Property, Plant and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which requires only disposals representing a strategic shift in operations that have a major effect on operations and financial results to be presented as discontinued operations. The guidance also requires expanded financial disclosures about discontinued operations and significant disposals that do not qualify as discontinued operations. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2014. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or related disclosures.

In July 2013, FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 clarifies guidance and eliminates diversity in practice on the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This new guidance is effective on a prospective basis for fiscal years and interim reporting periods within those years, beginning after December 15, 2013. We adopted the provisions of ASU 2013-11 beginning April 1, 2014. The adoption of the ASU did not have any impact on our financial statements.

Management continually evaluates the potential impact, if any, of all recent accounting pronouncements on our consolidated financial statements or related disclosures and, if significant, makes the appropriate disclosures required by such new accounting pronouncements.

8

3. Acquisitions

Purchase of assets from Dining Ventures - Fiscal 2015

On July 3, 2014 Agilysys purchased certain assets from Dining Ventures, Inc. The acquired assets are the base for our rGuest Seat product, a dining reservations and table management application. The purchase consideration consisted of approximately $3.8 million and was funded with cash on hand. Management concluded that this acquisition was not a material acquisition under the provisions of ASC 805, Business Combinations (ASC 805). The results derived from this purchased asset have been included in our Condensed Consolidated Financial Statements from the date of acquisition and did not have a material impact on our condensed consolidated financial statements or related disclosures. 

The following is a summary of the fair values of the assets acquired in the acquisition:

(In thousands)
Goodwill	$	2,464
Developed technology	1,286
Total assets acquired	$	3,750

The goodwill of approximately $2.5 million arising from the acquisition consists largely of synergies expected from combining the developed technology of Dining Ventures with Agilysys' operations. The goodwill from this acquisition is deductible for tax purposes over a period of 15 years.

The following is a summary of the intangible asset acquired and the weighted-average useful life over which it will be amortized.

			Weighted-average
	Purchased assets		useful life
Developed technology	$	1,286	5 years

The developed technology acquired from Dining Ventures was determined to be an internal use asset and is therefore carried in fixed assets on the balance sheet and amortized in operating expenses.

Purchase of TimeManagement Corporation - Fiscal 2014

On June 10, 2013, Agilysys purchased certain assets and assumed certain liabilities of TimeManagement Corporation (TMC), a privately-owned Minneapolis-based technology provider with solutions that streamline workforce management environments for hospitality operators. This technology based acquisition is consistent with the core value we provide to the industry and integrates with our point-of-sale, inventory and procurement systems, including InfoGenesis™ point of sale system and Eatec® inventory and procurement solution. The purchase consideration consisted of $1.8 million in cash paid and $1.8 million of contingent consideration and is still assessed at the same value. The fair value of the contingent consideration was estimated to be $1.8 million at the date of acquisition and is expected to be paid out over the next 5 years and payments could vary based on actual revenue during that time. The fair value of the contingent consideration was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain milestones would be achieved. The acquisition was funded with cash on hand. Management concluded that this acquisition was not a material acquisition under the provisions of ASC 805, Business Combinations. The operations of the purchased business have been included in our Condensed Consolidated Financial Statements from the date of acquisition and did not have a material impact on our condensed consolidated financial statements or related disclosures.

9

The following is a summary of the fair values of the assets acquired and liabilities assumed from the acquisition:

(In thousands)
Current assets	$	327
Property and equipment	88
Goodwill	3,444
Developed technology	605
Total assets acquired	4,464
Total liabilities assumed (all current)	914
Net assets acquired	$	3,550

The goodwill of approximately $3.4 million arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of Agilysys and TMC. The goodwill from this acquisition is deductible for tax purposes over a period of 15 years.

The following is a summary of the intangible asset acquired and the weighted-average useful life over which it will be amortized.

			Weighted-average
	Purchased assets		useful life
Developed technology	$	605	5 years

The developed technology acquired from TMC was determined to be an asset held for sale and is therefore carried in intangible assets on the balance sheet and amortized in cost of goods sold.

10

4. Discontinued Operations

UK Entity - Fiscal 2014

In March 2014, we completed the sale of our UK entity to Verteda Limited (Verteda), a U.K. based company, for total consideration of approximately $0.6 million, comprised of $0.7 million in cash and a receivable due to Agilysys from Verteda of $0.8 million, net of cash on hand of $0.9 million. We received $0.3 million in cash during the first half of fiscal 2015, resulting in a remaining receivable of $0.5 million. We expect to receive the remainder of this balance within fiscal 2015. In connection with the sale, we have entered into a multi-year distribution agreement whereby Verteda will distribute certain Agilysys products within the U.K. We will continue to manage all property management system accounts as well as key global accounts in the EMEA market.

Sale of Assets of RSG - Fiscal 2014

In July 2013, we completed the sale of our RSG business to Kyrus Solutions, Inc. (Kyrus), an affiliate of Clearlake Capital Group, L.P., for total consideration of approximately $37.6 million in cash, including a working capital adjustment of $3.1 million. Upon the close of the transaction, the aggregate purchase price was reduced by fees of approximately $1.6 million for transaction related costs, resulting in net proceeds received of approximately $36.0 million. In addition to the purchase agreement, we entered into a transition services agreement (TSA) with Kyrus, under which we provided certain transitional administrative and support services to Kyrus through January 31, 2014.

The sales of our RSG business and UK entity each represented a disposal of a component of an entity. As such, the operating results of RSG and the UK entity have been reported as a component of discontinued operations in the Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows for the three months endedSeptember 30, 2013. In addition, the assets and liabilities of RSG and the UK entity have been classified as discontinued operations in our Condensed Consolidated Balance Sheet as of September 30, 2013.

Components of Results of Discontinued Operations

Income from discontinued operations was comprised of the following:

	Three months ended			Six months ended
	September 30,			September 30,
(In thousands)		2013			2013
Discontinued operations:
Net revenue		$	1,733		$	26,848
Income from operations		36			781
Other expense, net		44			(9		)
Gain on sale		23,135			23,135
Income before tax from discontinued operations		23,215			23,907
Income tax expense		1,453			1,618
Income from discontinued operations		$	21,762		$	22,289

Income tax expense recorded during the three months and six months ended September 30, 2013 is due to intra-period tax allocation rules associated with discontinued operations.

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5. Restructuring Charges

We recognize restructuring charges when a plan that materially changes the scope of our business or the manner in which that business is conducted is adopted and communicated to the impacted parties, and the expenses have been incurred or are reasonably estimable.

Fiscal 2015 Restructuring Activity

In the second quarter of fiscal 2015, we implemented restructuring actions to better align product development, sales and marketing and general and administrative functions with our company strategy and to reduce operating costs. To date, we have recorded $0.2 million in restructuring charges related to the fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of September 30, 2014, we had a remaining liability of approximately $0.2 million recorded for the fiscal 2015 restructuring activity.

Fiscal 2014 Restructuring Activity

In the first quarter of fiscal 2014, we announced restructuring actions to better align corporate functions and to reduce operating costs, following the sale of RSG. In addition, in the fourth quarter of fiscal 2014, we initiated a restructuring plan to maximize sales effectiveness and more closely align sales and marketing efforts for targeted vertical growth, new product launches, and marketing alliances, and to shift development resources to the next generation products. To date, we have recorded $1.6 million in restructuring charges related to the fiscal 2014 restructuring activity, of which $1.2 million was recorded in fiscal 2014. We recorded approximately $0.4 million in restructuring charges during the first quarter of fiscal 2015, comprised of severance and other employee related benefits. As of September 30, 2014, we had a remaining liability of approximately $0.1 million recorded for the fiscal 2014 restructuring activity.

Following is a reconciliation of the beginning and ending balances of the restructuring liability:

	Balance at							Balance at
	March 31,							September 30,
(In thousands)	2014		Provision		Payments			2014
Fiscal 2015 Restructuring Plan:
Severance and employment costs	$	—	$	178	$	—		$	178
Fiscal 2014 Restructuring Plan:
Severance and employment costs	$	534	$	370	$	(823	)	$	81
Total restructuring costs	$	534	$	548	$	(823	)	$	259

The remaining severance and other employment costs of approximately $0.3 million will be paid in fiscal 2015.

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6. Intangible Assets and Software Development Costs

The following table summarizes our intangible assets and software development costs:

	September 30, 2014									March 31, 2014
	Gross						Net			Gross						Net
	carrying			Accumulated			carrying			carrying			Accumulated			carrying
(In thousands)	amount			amortization			amount			amount			amortization			amount
Amortized intangible assets:
Customer relationships	$	10,775		$	(10,530	)	$	245		$	10,775		$	(10,080	)	$	695
Non-competition agreements	2,700			(2,604		)	96			2,700			(2,473		)	227
Developed technology	10,660			(10,216		)	444			10,660			(10,156		)	504
Patented technology	80			(80		)	—			80			(80		)	—
	24,215			(23,430		)	785			24,215			(22,789		)	1,426
Unamortized intangible assets:
Trade names	10,100			N/A			10,100			10,100			N/A			10,100
Accumulated impairment	(900		)	N/A			(900		)	(900		)	N/A			(900		)
	9,200			N/A			9,200			9,200			N/A			9,200
Total intangible assets	$	33,415		$	(23,430	)	$	9,985		$	33,415		$	(22,789	)	$	10,626
Software development costs	$	15,561		$	(820	)	$	14,741		$	14,587		$	(270	)	$	14,317
Project expenditures not yet in use	19,250			—			19,250			12,397			—			12,397
Accumulated impairment	(9,493		)	N/A			(9,493		)	(9,493		)	N/A			(9,493		)
Total software development costs	$	25,318		$	(820	)	$	24,498		$	17,491		$	(270	)	$	17,221

The following table summarizes our remaining estimated amortization expense relating to in service intangible assets and software development costs.

	Estimated
	Amortization
(In thousands)	Expense
Fiscal year ending March 31,
2015	$	1,003
2016	1,335
2017	1,335
2018	1,335
2019	959
2020	65
Total	$	6,032

Amortization expense relating to intangible assets was $0.3 million for the three months ended September 30,2014, and 2013, and $0.6 million for the six months endedSeptember 30, 2014 and 2013. Amortization expense relating to developed technology software intangible assets was $0.3 million for the three months ended September 30,2014, and $0.6 million and $0.1 million for the six months endedSeptember 30, 2014 and 2013, respectively. Amortization expense for acquired and internally developed intangibles that are related to products held for sale is included in Products cost of goods sold and amortization expense for acquired and internally developed intangibles that are related to internal use assets is included in operating expenses as amortization of intangibles.

Capitalized software development costs that are internally developed are carried on our balance sheet at net realizable value, net of accumulated amortization. We capitalized approximately $3.9 million and $2.9 million during the three

13

months ended September 30,2014 and 2013, respectively, and $7.8 million and $5.8 million during the six months endedSeptember 30, 2014 and 2013, respectively.

7. Additional Balance Sheet Information

Additional information related to the Condensed Consolidated Balance Sheets is as follows:

(In thousands)	September 30, 2014		March 31, 2014
Accrued liabilities:
Salaries, wages, and related benefits	$	5,775	$	8,308
Other taxes payable	1,181		1,122
Accrued legal settlements	70		1,630
Restructuring liabilities	259		534
Professional fees	808		674
Software license fees	—		500
Deferred rent	353		477
Contingent consideration	180		127
Other	929		860
Total	$	9,555	$	14,232
Other non-current liabilities:
Uncertain tax positions	$	1,533	$	2,440
Deferred rent	1,742		1,755
Contingent consideration	1,557		1,612
Other	358		358
Total	$	5,190	$	6,165

8. Income Taxes

The following table compares our income tax benefit and effective tax rates for the three and six months endedSeptember 30, 2014 and 2013:

	Three months ended						Six months ended
	September 30,						September 30,
(Dollars in thousands)	2014			2013			2014			2013
Income tax expense (benefit)	$	81		$	100		$	(714	)	$	(230	)
Effective tax rate	(7.7		)%	(8.3		)%	17.5		%	30.6		%

For the three and six months endedSeptember 30, 2014, the effective tax rate was different than the statutory rate due primarily to the decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, and other U.S. permanent book to tax differences.

For the three and six months endedSeptember 30, 2013, the effective tax rate was different than the statutory rate due primarily to the intra-period tax allocation rules associated with the discontinued operations. Other items affecting the rate include a decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, and other U.S. permanent book to tax differences.

We have recorded a valuation allowance offsetting substantially all of our deferred tax assets. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. Because of our losses in prior periods, management believes that it is more-likely-than-not that we will not realize the benefits of these deductible differences.

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9. Commitments and Contingencies

Agilysys is the subject of various threatened or pending legal actions and contingencies in the normal course of conducting its business. We provide for costs related to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on our future results of operations and liquidity cannot be predicted because any such effect depends on future results of operations and the amount or timing of the resolution of such matters. While it is not possible to predict with certainty, management believes that the ultimate resolution of such individual or aggregated matters will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

On April 6, 2012, Ameranth, Inc. filed a complaint against us for patent infringement in the United States District Court for the Southern District of California. The complaint alleges, among other things, that point-of-sale and property management and other hospitality information technology products, software, components and/or systems sold by us infringe three patents owned by Ameranth purporting to cover generation and synchronization of menus, including restaurant menus, event tickets, and other products across fixed, wireless and/or internet platforms as well as synchronization of hospitality information and hospitality software applications across fixed, wireless and internet platforms. The complaint seeks monetary damages, injunctive relief, costs and attorneys' fees. At this time, we are not able to predict the outcome of this lawsuit, or any possible monetary exposure associated with the lawsuit.  However, we dispute the allegations of wrongdoing and are vigorously defending ourselves in this matter. The litigation is currently stayed pending a covered business method review by the United States Patent and Trademark Office of a subset of the patents alleged to be infringed by Agilysys. The covered business method review was instituted on March 26, 2014, and must be completed within one year of institution, except that the time to complete the review may be extended by up to six months for good cause.

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10. (Loss) Earnings per Share

The following data shows the amounts used in computing (loss) earnings per share and the effect on income and the weighted average number of shares of dilutive potential common shares.

	Three months ended						Six months ended
	September 30,						September 30,
(In thousands, except per share data)	2014			2013			2014			2013
Numerator:
Loss from continuing operations	$	(1,127	)	$	(1,310	)	$	(3,356	)	$	(521	)
Income from discontinued operations	—			21,762			—			22,289
Net (loss) income	$	(1,127	)	$	20,452		$	(3,356	)	$	21,768
Denominator:
Weighted average shares outstanding - basic	22,340			22,125			22,332			22,075
Weighted average shares outstanding - diluted	22,340			22,125			22,332			22,075
(Loss) earnings per share - basic:
Loss per share from continuing operations	$	(0.05	)	$	(0.06	)	$	(0.15	)	$	(0.02	)
Income per share from discontinued operations	—			0.98			—			1.01
Net (loss) income per share	$	(0.05	)	$	0.92		$	(0.15	)	$	0.99
(Loss) earnings per share - diluted:
Loss per share from continuing operations	$	(0.05	)	$	(0.06	)	$	(0.15	)	$	(0.02	)
Income per share from discontinued operations	$	—		$	0.98		$	—		$	1.01
Net (loss) income per share	$	(0.05	)	$	0.92		$	(0.15	)	$	0.99
Anti-dilutive stock options, SSARs, restricted shares and performance shares	1,467			1,406			1,316			1,502

Basic earnings (loss) per share is computed as net income available to common shareholders divided by the weighted average basic shares outstanding. The outstanding shares used to calculate the weighted average basic shares excludes 470,956 and 283,596 of restricted shares and performance shares at September 30, 2014 and 2013, respectively, as these shares were issued but were not vested and, therefore, not considered outstanding for purposes of computing basic earnings per share at the balance sheet dates.

Diluted earnings (loss) per share includes the effect of all potentially dilutive securities on earnings per share. We have stock options, stock-settled appreciation rights (SSARs), unvested restricted shares and unvested performance shares that are potentially dilutive securities. When a loss is reported, the denominator of diluted earnings per share cannot be adjusted for the dilutive impact of share-based compensation awards because doing so would be anti-dilutive. Therefore, for the three months ended September 30, 2014, basic weighted-average shares outstanding were used in calculating the diluted net loss per share.

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11. Share-based Compensation

We may grant non-qualified stock options, incentive stock options, stock-settled stock appreciation rights, restricted shares, and restricted share units for up to 3.0 million common shares under our 2011 Stock Incentive Plan (the 2011 Plan). The maximum number of shares subject to stock options or SSARs that may be granted to an individual in a calendar year is 800,000 shares, and the maximum number of shares subject to restricted shares or restricted share units that may be granted to an individual in a calendar year is 400,000 shares. The maximum aggregate number of restricted shares or restricted share units that may be granted under the 2011 Plan is 1.0 million.

We have a shareholder-approved 2006 Stock Incentive Plan (the 2006 Plan) and a 2000 Stock Incentive Plan that still have vested awards outstanding. Awards are no longer being granted from these incentive plans.

We may distribute authorized but unissued shares or treasury shares to satisfy share option and appreciation right exercises or restricted share and performance share awards.

We record compensation expense related to stock options, SSARs, restricted shares, and performance shares granted to certain employees and non-employee directors based on the fair value of the awards on the grant date. The fair value of restricted share and performance share awards is based on the closing price of our common shares on the grant date. The fair value of stock option and SSARs awards is estimated on the grant date using the Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of our common shares.

The following table summarizes the share-based compensation expense for options, SSARs, restricted and performance awards included in the Condensed Consolidated Statements of Operations:

	Three months ended				Six months ended
	September 30,				September 30,
(In thousands)	2014		2013		2014		2013
Product development	$	242	$	215	$	409	$	356
Sales and marketing	12		37		32		50
General and administrative	448		265		626		476
Total share-based compensation expense	702		517		1,067		882

Stock Options

The following table summarizes the activity during the six months endedSeptember 30, 2014 for stock options awarded under the 2006 Plan and the 2000 Stock Incentive Plan:

	Number of Options		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
(In thousands, except share and per share data)			(per share)		(in years)
Outstanding at April 1, 2014	627,500		$	15.26
Granted	—		—
Exercised	(15,000	)	13.76
Cancelled/expired	(30,000	)	13.11
Outstanding and exercisable at September 30, 2014	582,500		$	15.41	1.6	$	—

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A total of 8,065 shares, net of 6,935 shares withheld to cover the applicable exercise price of the award, were issued from treasury shares to settle stock options exercised during the first six months of fiscal 2015.

Stock-Settled Stock Appreciation Rights

SSARs are rights granted to an employee to receive value equal to the difference in the price of our common shares on the date of the grant and on the date of exercise. This value is settled in common shares of Agilysys.

The following table summarizes the activity during the six months endedSeptember 30, 2014 for SSARs awarded under the 2011 Plan:

	Number of Rights		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
(In thousands, except share and per share data)			(per right)		(in years)
Outstanding at April 1, 2014	320,236		$	9.05
Granted	113,900		14.43
Exercised	(16,078	)	7.75
Forfeited	(10,668	)	7.46
Expired	—		—
Outstanding at September 30, 2014	407,390		$	10.64	5.3	$	806
Exercisable at September 30, 2014	179,078		$	8.54	4.4	$	590

As of September 30, 2014, total unrecognized stock based compensation expense related to non-vested SSARs was $1.1 million, which is expected to be recognized over a weighted-average vesting period of 2.0 years.

A total of 5,463 shares, net of 1,446 shares withheld to cover the employee’s minimum applicable income taxes, were issued from treasury shares to settle SSARs exercised during the six months endedSeptember 30, 2014. The shares withheld were returned to treasury shares.

Restricted Shares

We granted shares to certain of our Directors, executives and key employees under the 2011 Plan, the vesting of which is service-based. The following table summarizes the activity during the six months endedSeptember 30, 2014 for restricted shares awarded under the 2011 Plan:

	Number of Shares		Weighted- Average Grant- Date Fair Value
			(per share)
Outstanding at April 1, 2014	139,501		$	10.72
Granted	344,443		13.90
Vested	(16,840	)	8.64
Forfeited	(13,876	)	13.15
Outstanding at September 30, 2014	453,228		$	13.13

The weighted-average grant date fair value of the restricted shares is determined based upon the closing price of our common shares on the grant date. As of September 30, 2014, total unrecognized stock based compensation expense related to non-vested restricted stock was $4.8 million, which is expected to be recognized over a weighted-average vesting period of 2.4 years.

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Performance Shares

The following table summarizes the activity during the six months endedSeptember 30, 2014 for performance shares awarded under the 2011 Plan:

	Number of Shares	Weighted- Average Grant- Date Fair Value
		(per share)
Outstanding at April 1, 2014	17,728	$	8.64
Granted	—	—
Outstanding at September 30, 2014	17,728	$	8.64

The weighted-average grant date fair value of the performance shares is determined based upon the closing price of our common shares on the grant date and assumed that performance goals would be met at target. As of September 30, 2014, total unrecognized stock based compensation expense related to non-vested performance shares was $0.1 million, which is expected to be recognized over a weighted-average vesting period of 0.3 years.

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12. Fair Value Measurements

We estimate the fair value of financial instruments using available market information and generally accepted valuation methodologies. We assess the inputs used to measure fair value using a three-tier hierarchy. The hierarchy indicates the extent to which pricing inputs used in measuring fair value are observable in the market. Level 1 inputs include unadjusted quoted prices for identical assets or liabilities and are the most observable. Level 2 inputs include unadjusted quoted prices for similar assets and liabilities that are either directly or indirectly observable, or other observable inputs such as interest rates, foreign currency exchange rates, commodity rates, and yield curves. Level 3 inputs are not observable in the market and include our own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the tables below.

There were no significant transfers between Levels 1, 2, and 3 during the six months endedSeptember 30, 2014 and 2013.

Our cash equivalents consist of highly liquid investments with original maturity dates of three months or less and can include certificates of deposit, commercial paper, treasury bills, money market funds and other investments. The fair value of our marketable securities, comprised of commercial paper, corporate bonds and certificates of deposit, was determined using a market approach, based on prices and other relevant information generated by market transactions involving similar assets, and therefore, is classified within Level 2 of the fair value hierarchy. Our marketable securities consist of investments with original maturity dates of 90 to 365 days and are classified as available for sale.

The following data summarizes our cash equivalents and marketable securities:

	September 30, 2014
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable
(In thousands)	cost basis		gains		losses		value		equivalents		securities
Level 2:
Commercial paper	$	2,999	$	—	$	—	$	2,999	$	2,999	$	—
Certificates of deposit	5,006		—		—		5,006		—		5,006
Corporate bonds	5,076		—		5		5,071		—		5,071
Total	$	13,081	$	—	$	5	$	13,076	$	2,999	$	10,077

	March 31, 2014
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable
(In thousands)	cost basis		gains		losses		value		equivalents		securities
Level 2:
Commercial paper	$	19,993	$	—	$	—	$	19,993	$	19,993	$	—
Certificates of deposit	9,006		—		—		9,006		9,006		—
Total	$	28,999	$	—	$	—	$	28,999	$	28,999	$	—

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:

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	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	September 30, 2014		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — non-current	$	2,419	$	—	$	—	$	2,419
Liabilities:
Contingent consideration — current	$	180	$	—	$	—	$	180
Contingent consideration — non-current	1,557		—		—		1,557

	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	March 31, 2014		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — current	$	1,989	$	—	$	—	$	1,989
Corporate-owned life insurance — non-current	2,371		—		—		2,371
Liabilities:
Contingent consideration — current	$	127	$	—	$	—	$	127
Contingent consideration — non-current	1,612		—		—		1,612

The recorded value of the corporate-owned life insurance policies is adjusted to the cash surrender value of the policies obtained from the third party life insurance providers, which are not observable in the market, and therefore, are classified within Level 3 of the fair value hierarchy. Changes in the cash surrender value of these policies are recorded within “Other expenses (income), net” in the Condensed Consolidated Statements of Operations.

The fair value of the contingent consideration was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain milestones would be achieved.

The following table presents a summary of changes in the fair value of the Level 3 assets:

	Six months ended
	September 30,
(In thousands)	2014			2013
Corporate-owned life insurance:
Balance on April 1	$	4,360		$	3,673
Unrealized gain relating to instruments held at reporting date	28			30
Purchases, sales, issuances and settlements, net	20			—
Proceeds from corporate-owned life insurance policy	(1,989		)	—
Balance on September 30	$	2,419		$	3,703

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The following tables present a summary of changes in the fair value of the Level 3 liabilities:

Level 3 assets and liabilities
Six months ended September 30, 2014
(In thousands)	Contingent consideration
Balance at April 1, 2014	$	1,739
Foreign currency translation adjustments	—
Amortization	—
Provisions	—
Purchases	—
Activity, payments and other charges (net)	(2		)
Balance at September 30, 2014	$	1,737

Level 3 assets and liabilities
Six months ended September 30, 2013
(In thousands)	Contingent consideration
Balance at April 1, 2013	$	—
Foreign currency translation adjustments	—
Amortization	—
Provisions	—
Purchases	—
Activity, payments and other charges (net)	1,800
Balance at September 30, 2013	$	1,800

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

In “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”), management explains the general financial condition and results of operations for Agilysys and subsidiaries including:

—    what factors affect our business;

—    what our earnings and costs were;

—    why those earnings and costs were different from the year before;

—    where the earnings came from;

—    how our financial condition was affected; and

—    where the cash will come from to fund future operations.

The MD&A analyzes changes in specific line items in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows and provides information that managementbelieves is important to assessing and understanding our consolidated financial condition and results of operations. This Quarterly Report on Form 10-Q updates information included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed with the Securities and Exchange Commission (SEC). This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes that appear in Item 1 of this Quarterly Report as well as our Annual Report for the year ended March 31, 2014. Information provided in the MD&A may includeforward-looking statements that involve risks and uncertainties. Many factors couldcause actual results to be materially different from those contained in the forward-lookingstatements. See “Forward-Looking Information” on page 37 of this Quarterly Report and Item 1A “Risk Factors”in Part I of our Annual Report for the fiscal year ended March 31, 2014 for additional informationconcerning these items. Management believes that this information, discussion, and disclosure is important in making decisions about investing in Agilysys.

Overview

Agilysys is a leading developer and marketer of proprietary enterprise software, services and solutions to the hospitality industry. We specialize in market-leading point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document management and mobile and wireless solutions that are designed to streamline operations, improve efficiency and enhance the guest experience. Agilysys serves four major market sectors: Gaming, both corporate and tribal; Hotels, Resorts and Cruise; Foodservice Management; and Restaurants, Universities, Stadia and Healthcare. A significant portion of our consolidated revenue is derived from contract support, maintenance and subscription services.

Agilysys operates extensively throughout North America, Europe and Asia, with corporate services located in Alpharetta, Georgia, and offices in Singapore, Hong Kong and Malaysia.

The primary objective of our ongoing strategic planning process is to create shareholder value by targeting accretive growth opportunities, by strengthening our competitive position within the highest value technology solutions we provide to the technology differentiated end markets we service. The plan builds on our existing strengths and targets industry leading growth and peer beating financial and operating results driven by new technology trends and market opportunities. Industry leading growth and peer beating financial and operational results will be achieved through tighter coupling and management of operating expenses of the business and sharpening the focus of our investments to concentrate on growth opportunities with the highest return by seeking the highest margin revenue opportunities in the markets in which we compete.

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Our strategic plan specifically focuses on:

• Transforming the guest experience by improving quality of service through technology.

• Enabling lasting connections with our customers and our customers with their guests through the entire guest lifecycle.

• Enabling lasting connections with our customers and our team through differentiated customer service and customer driven development.

• Industry led innovation, capitalizing on our intellectual property and emerging technology trends.

Revenue - Defined

As required by the SEC, we separately present revenue earned as products revenue, support, maintenance and subscription services revenue or professional services revenue in our Condensed Consolidated Statements of Operations. In addition to the SEC requirements, we may, at times, also refer to revenue as defined below. The terminology, definitions, and applications of terms we use to describe our revenue may be different from those used by other companies and caution should be used when comparing these financial measures to those of other companies. We use the following terms to describe revenue:

Revenue - We present revenue net of sales returns and allowances.

Products revenue - Revenue earned from the sales of hardware equipment and proprietary and remarketed software.

Support, maintenance and subscription services revenue - Revenue earned from the sale of proprietary and remarketed ongoing support, maintenance and subscription or hosting services.

Professional services revenue - Revenue earned from the delivery of implementation, integration and installation services for proprietary and remarketed products.

Matters Affecting Comparability

On July 1, 2013, we completed the sale of RSG to Kyrus Solutions, Inc., an affiliate of Clearlake Capital Group, L.P. For financial reporting purposes, RSG’s operating results for fiscal 2014 through the completion of the sale were classified within discontinued operations.

On March 31, 2014, we completed the sale of our UK entity to Verteda Limited, a U.K. based company. For financial reporting purposes, the UK entity operating results for all periods presented were classified within discontinued operations.

Accordingly, the discussion and analysis presented below, reflects the continuing business of Agilysys.

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Results of Operations

Second Fiscal Quarter 2015 Compared to Second Fiscal Quarter 2014

Net Revenue and Operating Loss

The following table presents our consolidated revenue and operating results for continuing operations for the three months ended September 30, 2014 and 2013:

	Three months ended
	September 30,						Increase (decrease)
(Dollars in thousands)	2014			2013			$			%
Net revenue:
Products	$	7,649		$	8,585		$	(936	)	(10.9	)%
Support, maintenance and subscription services	13,775			12,881			894			6.9	%
Professional services	4,894			3,380			1,514			44.8	%
Total net revenue	26,318			24,846			1,472			5.9	%
Cost of goods sold:
Products	3,502			3,285			217			6.6	%
Support, maintenance and subscription services	2,961			2,578			383			14.9	%
Professional services	3,186			2,395			791			33.0	%
Total net cost of goods sold	9,649			8,258			1,391			16.8	%
Gross profit	16,669			16,588			81			0.5	%
Gross profit margin	63.3		%	66.8		%
Operating expenses:
Product development	6,191			6,714			(523		)	(7.8	)%
Sales and marketing	3,825			4,068			(243		)	(6.0	)%
General and administrative	6,079			5,065			1,014			20.0	%
Depreciation of fixed assets	532			513			19			3.7	%
Amortization of intangibles	594			794			(200		)	(25.2	)%
Asset impairments and related charges	—			18			(18		)	nm
Restructuring, severance and other charges	448			562			(114		)	nm
Legal settlements	54			—			54			nm
Operating loss	$	(1,054	)	$	(1,146	)	$	92		nm
Operating loss percentage	(4.0		)%	(4.6		)%

nm - not meaningful

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The following table presents the percentage relationship of our Condensed Consolidated Statement of Operations line items to our consolidated net revenues for the periods presented:

	Three months ended
	September 30,
	2014		2013
Net revenue:
Products	29.1	%	34.6	%
Support, maintenance and subscription services	52.3		51.8
Professional services	18.6		13.6
Total	100.0		100.0
Cost of goods sold:
Products	13.3		13.2
Support, maintenance and subscription services	11.3		10.4
Professional services	12.1		9.6
Total	36.7		33.2
Gross profit	63.3		66.8
Operating expenses:
Product development	23.5		27.0
Sales and marketing	14.5		16.4
General and administrative	23.1		20.4
Depreciation of fixed assets	2.0		2.1
Amortization of intangibles	2.3		3.2
Asset impairments and related charges	—		0.1
Restructuring, severance and other charges	1.7		2.3
Legal settlements	0.2		—
Operating (loss) income	(4.0	)%	(4.6	)%

Net revenue.  Total net revenue increased 5.9% during the second quarter of fiscal 2015 compared to the second quarter of fiscal 2014. Products revenue decreased $0.9 million, or 10.9%, primarily as a result of a reduction in product sales in the second quarter of fiscal 2015 due to the continued ramp up time associated with our planned transition within our sales force and our strategic initiatives to drive more recurring revenue. Support, maintenance and subscription services revenue increased $0.9 million, or 6.9%, as a result of continued focus on selling subscription based hosting revenue which saw a 13.5% increase over the same period a year ago, and ongoing support from our growing proprietary product sales. Professional services revenue increased $1.5 million or 44.8% due to timing of customer installations including two large services projects with significant effort in the second quarter of fiscal 2015 that resulted in approximately $1.0 million of revenue.

Gross profit and gross profit margin.  Our total gross profit increased $0.1 million, or 0.5%, for the second quarter of fiscal 2015 and total gross profit margin decreased 350 basis points to 63.3%. Products gross profit decreased $1.2 million and gross profit margin decreased 750 basis points to 54.2% mainly as a result of lower sales of higher margin proprietary software sales in the second quarter of fiscal 2015 as compared to the second quarter of fiscal 2014. Also impacting gross profit margin was $0.3 million of incremental amortization expense of software products that were recently placed into service. Support, maintenance and subscription services gross profit increased $0.5 million while gross margin decreased 150 basis points to 78.5% due to a change in the mix of labor resources needed for maintenance of our products. Professional services gross margin increased $0.7 million and gross profit margin increased 580 basis points to 34.9% as a result of more efficient use of labor required to meet the needs of timing of customer installations, including the two large service projects mentioned above.

26

Operating expenses

Operating expenses, excluding the charges for legal settlements and restructuring, severance and other charges, increased $0.1 million, or 0.3%, in the second quarter of fiscal 2015 compared with the second quarter of fiscal 2014.

Product development.  Product development includes all expenses associated with research and development. Product development decreased $0.5 million, or 7.8% in the second quarter of fiscal 2015 compared with the second quarter of fiscal 2014. Although we have increased our gross investment in the product development team, a larger percentage of that team's time is being used for development of our future generation products and are being capitalized than in the prior year. These research and development costs are capitalized as software development costs for future use. We capitalized approximately $3.9 million and $2.9 million during the three months ended September 30, 2014 and 2013, respectively. In addition, we saw increased efforts in the second quarter of fiscal 2015 for customer specific engagements which resulted in certain headcount costs being included in cost of goods sold, which also contributed to the lower product development expense in the period.

Sales and marketing.  Sales and marketing decreased $0.2 million, or 6.0%, in the second quarter of fiscal 2015 compared with the second quarter of fiscal 2014. The decrease is due mainly to the timing of our sales and marketing reorganization as we continue to try to better align and ramp our sales force to better serve our customers and our longer term strategy.

General and administrative.  General and administrative increased $1.0 million, or 20.0%, in the second quarter of fiscal 2015 compared with the second quarter of fiscal 2014 as a result of increased cost surrounding the ongoing effort to streamline and rationalize our back-office processes, including the cost of resources involved in an enterprise resource planning system (ERP) replacement project.

Depreciation of fixed assets.  Depreciation of fixed assets increased less than $0.1 million, or 3.7%, in the second quarter of fiscal 2015 compared with the second quarter of fiscal 2014 due to the timing of asset acquisitions.

Amortization of intangibles.  Amortization of intangibles decreased $0.2 million or 25.2% in the second quarter of fiscal 2015 compared with the second quarter of fiscal 2014 partially due to reduced expense related to our previous ERP system which was fully amortized by the start of the second quarter of fiscal 2015 once replaced.

Restructuring, severance and other charges. In the second quarter of fiscal 2015, we implemented restructuring actions to better align product development, sales and marketing and general and administrative functions and to reduce operating costs and recorded $0.2 million in restructuring charges related to the fiscal 2015 restructuring activity, comprised of severance and other employee related benefits.

In the second quarter of fiscal 2014, we announced restructuring actions to better align corporate functions and to reduce operating costs, following the sale of RSG. In addition, in the fourth quarter we initiated a restructuring plan to maximize sales effectiveness and more closely align sales and marketing efforts for targeted vertical growth, new product launches, and marketing alliances, and to shift development resources to the next generation products. To date, we have recorded $1.6 million in restructuring charges related to the fiscal 2014 restructuring activity, of which $1.2 million was recorded in fiscal 2014. We recorded approximately $0.4 million in restructuring charges during the first quarter of fiscal 2015, comprised of severance and other employee related benefits.

As of September 30, 2014, we had a remaining liability of approximately $0.2 million recorded for the fiscal 2015 restructuring activity and $0.1 million recorded for the fiscal 2014 restructuring activity. We do not anticipate any significant additional restructuring charges related to these actions. Our restructuring actions are discussed further in Note 5, Restructuring Charges.

Legal settlements. During the second quarter of fiscal 2015, we recorded $0.1 million in legal settlements to finalize legal settlements originally estimated and recorded in the first quarter of fiscal 2015.

27

Other (Income) Expenses

	Three months ended
	September 30,						(Unfavorable) favorable
(Dollars in thousands)	2014			2013			$		%
Other (income) expenses:
Interest income	$	(21	)	$	(20	)	$	1	5.0	%
Interest expense	14			45			31		68.9	%
Other (income) expense, net	(1		)	39			40		102.6	%
Total other expense (income), net	$	(8	)	$	64		$	72	112.5	%

Interest income. Interest income consists of interest earned on investments in certificates of deposit, commercial paper and corporate bonds.

Interest expense. Interest expense consists of costs associated with capital leases and loans on corporate-owned life insurance policies. Interest expense decreased in the second quarter of fiscal 2015 compared to the second quarter of fiscal 2014 due to non-renewal of certain capital leases.

Income Taxes

	Three months ended
	September 30,						(Unfavorable) favorable
(Dollars in thousands)	2014			2013			$		%
Income tax expense	$	81		$	100		$	19	nm
Effective tax rate	(7.7		)%	(8.3		)%

nm - not meaningful

For the second quarter of fiscal 2015, the effective tax rate was different than the statutory rate due primarily to the decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, and other U.S. permanent book to tax differences.

For the second quarter of fiscal 2014, the effective tax rate was different than the statutory rate due primarily to the intra-period tax allocation rules associated with the discontinued operations. Other items affecting the rate include decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, and other U.S. permanent book to tax differences.

Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next 12 months a reduction in unrecognized tax benefits may occur in the range of zero to $0.1 million of tax and zero to $0.1 million of interest based on the outcome of tax examinations and as a result of the expiration of various statutes of limitations. We are routinely audited; due to the ongoing nature of current examinations in multiple jurisdictions, other changes could occur in the amount of gross unrecognized tax benefits during the next 12 months which cannot be estimated at this time.

We have recorded a valuation allowance offsetting substantially all of our deferred tax assets. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. Because of our losses in prior periods, management believes that it is more-likely-than-not that we will not realize the benefits of these deductible differences.

28

First Half Fiscal 2015 Compared to First Half Fiscal 2014

Net Revenue and Operating Loss

The following table presents our consolidated revenue and operating results for continuing operations for the six months ended September 30, 2014 and 2013:

	Six months ended
	September 30,						Increase (decrease)
(Dollars in thousands)	2014			2013			$			%
Net revenue:
Products	$	13,701		$	16,091		$	(2,390	)	(14.9	)%
Support, maintenance and subscription services	27,594			25,755			1,839			7.1	%
Professional services	8,769			6,700			2,069			30.9	%
Total net revenue	50,064			48,546			1,518			3.1	%
Cost of goods sold:
Products	7,001			6,908			93			1.3	%
Support, maintenance and subscription services	6,091			4,847			1,244			25.7	%
Professional services	5,629			4,566			1,063			23.3	%
Total net cost of goods sold	18,721			16,321			2,400			14.7	%
Gross profit	31,343			32,225			(882		)	(2.7	)%
Gross profit margin	62.6		%	66.4		%
Operating expenses:
Product development	12,056			12,946			(890		)	(6.9	)%
Sales and marketing	7,710			7,035			675			9.6	%
General and administrative	11,196			9,694			1,502			15.5	%
Depreciation of fixed assets	1,146			994			152			15.3	%
Amortization of intangibles	2,377			1,588			789			49.7	%
Asset impairments and related charges	—			18			(18		)	nm
Restructuring, severance and other charges	818			617			201			nm
Legal settlements	203			—			203			nm
Operating loss	$	(4,163	)	$	(667	)	$	(3,496	)	nm
Operating loss percentage	(8.3		)%	(1.4		)%

nm - not meaningful

29

The following table presents the percentage relationship of our Condensed Consolidated Statement of Operations line items to our consolidated net revenues for the periods presented:

	Six months ended
	September 30,
	2014		2013
Net revenue:
Products	27.4	%	33.1	%
Support, maintenance and subscription services	55.1		53.1
Professional services	17.5		13.8
Total	100.0		100.0
Cost of goods sold:
Products	14.0		14.2
Support, maintenance and subscription services	12.2		10.0
Professional services	11.2		9.4
Total	37.4		33.6
Gross profit	62.6		66.4
Operating expenses:
Product development	24.1		26.7
Sales and marketing	15.4		14.5
General and administrative	22.4		20.0
Depreciation of fixed assets	2.3		2.0
Amortization of intangibles	4.7		3.3
Asset impairments and related charges	—		—
Restructuring, severance and other charges	1.6		1.3
Legal settlements	0.4		—
Operating (loss) income	(8.3	)%	(1.4	)%

Net revenue.  Total net revenue increased $1.5 million or 3.1% during the first half of fiscal 2015 compared to the first half of fiscal 2014. Products revenue decreased $2.4 million, or 14.9%, primarily as a result of a reduction in product sales in the first half of fiscal 2015, due to the continued ramp up time associated with our planned transition within our sales force and our strategic initiatives to drive more recurring revenue. Support, maintenance and subscription services revenue increased $1.8 million, or 7.1%, as a result of continued focus on selling subscription based hosting revenue, which was an increase of 10.8% year over year, and ongoing support from our growing product sales. Professional services revenue increased $2.1 million or 30.9% due to timing of customer installations including two large services projects with significant effort in the first half of fiscal 2015 that resulted in approximately $1.5 million of revenue.

Gross profit and gross profit margin.  Our total gross profit decreased $0.9 million, or 2.7%, for the first half of fiscal 2015 and total gross profit margin decreased 380 basis points to 62.6%. Products gross profit decreased $2.5 million and gross profit margin decreased 820 basis points to 48.9% mainly as a result of lower sales of higher margin proprietary software sales which made up a smaller portion of total product sales in the first half of fiscal 2015 as compared to the first half of fiscal 2014. Also impacting gross profit margin was $0.6 million of incremental amortization expense of software products that were recently placed into service. Support, maintenance and subscription services gross profit increased $0.6 million while gross margin decreased 330 basis points to 77.9% due to a change in the mix of labor resources needed for maintenance of our products. Professional services gross margin increased $1.0 million and gross profit margin increased 390 basis points to 35.8% as a result of more efficient use of labor required to meet the needs of timing of customer installations, including the two large service projects mentioned above.

Operating expenses

Operating expenses, excluding the charges for legal settlements and restructuring, severance and other charges, increased $2.2 million, or 6.8%, in the first half of fiscal 2015 compared with the first half of fiscal 2014.

30

Product development.  Product development includes all expenses associated with research and development. Product development decreased $0.9 million, or 6.9% in the first half of fiscal 2015 compared with the first half of fiscal 2014. Although we have increased our investment in the product development team, a larger percentage of that team's time is being used for customer specific engagements and are therefore included in cost of goods sold or for development of our future generation products and are being capitalized. Certain research and development costs are capitalized as software development costs for future use. We capitalized approximately $7.8 million and $5.8 million during the six months ended September 30, 2014 and 2013, respectively.

Sales and marketing.  Sales and marketing increased $0.7 million, or 9.6%, in the first half of fiscal 2015 compared with the first half of fiscal 2014. The increase is due mainly to increased marketing activities surrounding the launch of our next generation product rGuest™ partially offset with the timing of our sales and marketing reorganization as we continue to try to better align and ramp our sales force to better serve our customers.

General and administrative.  General and administrative increased $1.5 million, or 15.5%, in the first half of fiscal 2015 compared with the first half of fiscal 2014 as a result of increased cost surrounding the ongoing effort to streamline and rationalize our back-office processes, including the cost of resources involved in an enterprise resource planning system (ERP) replacement project.

Depreciation of fixed assets.  Depreciation of fixed assets increased $0.2 million, or 15.3%, in the first half of fiscal 2015 compared with the first half of fiscal 2014 due to the timing of asset acquisitions.

Amortization of intangibles.  Amortization of intangibles increased $0.8 million, or 49.7%, in the first half of fiscal 2015 compared with the first half of fiscal 2014. In October 2013, we initiated an internal ERP replacement project and determined that amortization for our existing ERP system should be accelerated. We recorded approximately $0.9 million in the first half of fiscal 2015 of additional amortization in connection with this acceleration. The existing ERP system was fully amortized as of June 30, 2014.

Restructuring, severance and other charges. In the second quarter of fiscal 2015, we implemented restructuring actions to better align product development, sales and marketing and general and administrative functions and to reduce operating costs and recorded $0.2 million in restructuring charges related to the fiscal 2015 restructuring activity, comprised of severance and other employee related benefits.

In the first half of fiscal 2014, we announced restructuring actions to better align corporate functions and to reduce operating costs, following the sale of RSG. In addition, in the fourth quarter we initiated a restructuring plan to maximize sales effectiveness and more closely align sales and marketing efforts for targeted vertical growth, new product launches, and marketing alliances, and to shift development resources to the next generation products. To date, we have recorded $1.6 million in restructuring charges related to the fiscal 2014 restructuring activity, of which $1.2 million was recorded in fiscal 2014. We recorded approximately $0.4 million in restructuring charges during the first quarter of fiscal 2015, comprised of severance and other employee related benefits.

As of September 30, 2014, we had a remaining liability of approximately $0.2 million recorded for the fiscal 2015 restructuring activity and $0.1 million recorded for the fiscal 2014 restructuring activity. We do not anticipate any significant additional restructuring charges related to these actions. Our restructuring actions are discussed further in Note 5, Restructuring Charges.

Legal settlements. During the first half of fiscal 2015, we recorded $0.2 million in legal settlements to finalize legal disputes originally estimated and recorded in the current fiscal year.

31

Other (Income) Expenses

	Six months ended
	September 30,						(Unfavorable) favorable
(Dollars in thousands)	2014			2013			$		%
Other (income) expenses:
Interest income	(74		)	(33		)	$	41	124.2	%
Interest expense	27			106			79		74.5	%
Other (income) expense, net	(46		)	11			57		518.2	%
Total other expense (income), net	$	(93	)	$	84		$	177	210.7	%

Interest income. Interest income consists of interest earned on investments in certificates of deposit, commercial paper and corporate bonds. The increase in interest income in the first half of fiscal 2015 compared to the first half quarter of 2014 is due to increased investment in commercial paper and corporate bonds that yielded higher interest rates on our investments.

Interest expense. Interest expense consists of costs associated with capital leases and loans on corporate-owned life insurance policies. Interest expense decreased in the first half of fiscal 2015 compared to the first half of fiscal 2014 due to non-renewal of certain capital leases.

Income Taxes

	Six months ended
	September 30,						(Unfavorable) favorable
(Dollars in thousands)	2014			2013			$		%
Income tax benefit	$	(714	)	$	(230	)	$	484	nm
Effective tax rate	17.5		%	30.6		%

nm - not meaningful

For the first half of fiscal 2015, the effective tax rate was different than the statutory rate due primarily to the decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, and other U.S. permanent book to tax differences.

For the first half of fiscal 2014, the effective tax rate was different than the statutory rate due primarily to the intra-period tax allocation rules associated with the discontinued operations. Other items affecting the rate include decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, and other U.S. permanent book to tax differences.

Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next 12 months a reduction in unrecognized tax benefits may occur in the range of zero to $0.1 million of tax and zero to $0.1 million of interest based on the outcome of tax examinations and as a result of the expiration of various statutes of limitations. We are routinely audited; due to the ongoing nature of current examinations in multiple jurisdictions, other changes could occur in the amount of gross unrecognized tax benefits during the next 12 months which cannot be estimated at this time.

We have recorded a valuation allowance offsetting substantially all of our deferred tax assets. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. Because of our losses in prior periods, management believes that it is more-likely-than-not that we will not realize the benefits of these deductible differences.

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Acquisitions

Purchase of assets from Dining Ventures - Fiscal 2015

On July 3, 2014 Agilysys purchased certain assets from Dining Ventures, Inc. The acquired assets are the base for our rGuest Seat product, a dining reservations and table management application. The purchase consideration consisted of approximately $3.8 million and was funded with cash on hand.  Management concluded that this acquisition was not a material acquisition under the provisions of ASC 805. The results derived from this purchased asset have been included in our Condensed Consolidated Financial Statements from the date of acquisition and did not have a material impact on our condensed consolidated financial statements or related disclosures.

The following is a summary of the fair values of the assets acquired in the acquisition:

(In thousands)
Goodwill	$	2,464
Developed technology	1,286
Total assets acquired	$	3,750

The goodwill of approximately $2.5 million arising from the acquisition consists largely of synergies expected from combining the developed technology of Dining Ventures with Agilysys' operations. The goodwill from this acquisition is deductible for tax purposes over a period of 15 years.

The following is a summary of the intangible asset acquired and the weighted-average useful life over which it will be amortized.

			Weighted-average
	Purchased assets		useful life
Developed technology	$	1,286	5 years

The developed technology acquired from Dining Ventures was determined to be an internal use asset and is therefore carried in fixed assets on the balance sheet and amortized in operating expenses.

Purchase of TimeManagement Corporation - Fiscal 2014

On June 10, 2013, Agilysys purchased certain assets and assumed certain liabilities of TimeManagement Corporation (TMC), a privately-owned Minneapolis-based technology provider with solutions that streamline workforce management environments for hospitality operators. This technology based acquisition is consistent with the core value we provide to the industry and integrates with our point-of-sale, inventory and procurement systems, including InfoGenesis™ point of sale system and Eatec® inventory and procurement solution. The purchase consideration consisted of $1.8 million in cash paid and $1.8 million of contingent consideration and is still assessed at the same value. The fair value of the contingent consideration was estimated to be $1.8 million at the date of acquisition and is expected to be paid out over the next 5 years and payments could vary based on actual revenue during that time. The fair value of the contingent consideration

was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain milestones would be achieved. The acquisition was funded with cash on hand. Management concluded that this acquisition was not a material acquisition under the provisions of ASC 805, Business Combinations. The operations of the purchased business have been included in our Condensed Consolidated Financial Statements from the date of acquisition and did not have a material impact on our condensed consolidated financial statements or related disclosures.

The following is a summary of the fair values of the assets acquired and liabilities assumed from the acquisition:

33

(In thousands)
Current assets	$	327
Property and equipment	88
Goodwill	3,444
Developed technology	605
Total assets acquired	4,464
Total liabilities assumed (all current)	914
Net assets acquired	$	3,550

The goodwill of approximately $3.4 million arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of Agilysys and TMC. The goodwill from this acquisition is deductible for tax purposes over a period of 15 years.

The following is a summary of the intangible asset acquired and the weighted-average useful life over which it will be amortized.

			Weighted-average
	Purchased assets		useful life
Developed technology	$	605	5 years

The developed technology acquired from TMC was determined to be an asset held for sale and is therefore carried in intangible assets on the balance sheet and amortized in cost of goods sold.

34

Discontinued Operations

UK Entity - Fiscal 2014

In March 2014, we completed the sale of our UK entity to Verteda Limited (Verteda), a U.K. based company, for total consideration of approximately $0.6 million, comprised of $0.7 million in cash and a receivable due to Agilysys from Verteda of $0.8 million, net of cash on hand of $0.9 million. We received $0.3 million in cash during the first half of fiscal 2015, resulting in a remaining receivable of $0.5 million. We expect to receive the remainder of this balance within fiscal 2015. In connection with the sale, we have entered into a multi-year distribution agreement whereby Verteda will distribute certain Agilysys products within the U.K. We will continue to manage all property management system accounts as well as key global accounts in the EMEA market.

Sale of Assets of RSG - Fiscal 2014

On July 1, 2013, we completed the sale of our RSG business to, Kyrus, an affiliate of Clearlake Capital Group, L.P., for total consideration of approximately $37.6 million in cash, including a final working capital adjustment of $3.1 million. Upon the close of the transaction, the aggregate purchase price was reduced by fees of approximately $1.6 million for transaction related costs, resulting in net proceeds received of approximately $36.0 million. In addition to the purchase agreement, we entered into a transition services agreement (TSA) with Kyrus, under which we provided certain transitional administrative and support services to Kyrus through January 31, 2014.

The sales of our RSG business and UK entity each represented a disposal of a component of an entity. As such, the operating results of RSG and the UK entity have been reported as a component of discontinued operations in the Condensed Consolidated Statement of Operations for the three and six months endedSeptember 30, 2013 and in the Condensed Consolidated Statement of Cash Flows for the six months endedSeptember 30, 2013. In addition, the assets and liabilities of RSG and the UK entity have been classified as discontinued operations in our Condensed Consolidated Balance Sheet as of September 30, 2013.

Income from discontinued operations was comprised of the following:

	Three months ended		Six months ended
(In thousands)	September 30, 2013		September 30, 2013
Discontinued operations:
Net revenue	$	1,733	$	26,848
Income from operations	36		781
Other expense, net	44		(9		)
Gain on sale	23,135		23,135
Income before tax from discontinued operations	23,215		23,907
Income tax expense	1,453		1,618
Income from discontinued operations	$	21,762	$	22,289

Liquidity and Capital Resources

Overview

Our operating cash requirements consist primarily of working capital needs, operating expenses, capital expenditures, and payments of principal and interest on indebtedness outstanding, which primarily consists of lease and rental obligations at September 30, 2014. We believe that cash flow from operating activities, cash on hand of $67.2 million and marketable securities of $10.1 million as of September 30, 2014 and access to capital markets will provide adequate funds to meet our short- and long-term liquidity requirements in the next 12 months.

35

As of September 30, 2014 and March 31, 2014, our total debt was approximately $0.3 million, comprised of capital lease obligations in both periods.

At September 30, 2014, 100% of our cash and cash equivalents were deposited in bank accounts or invested in highly liquid investments with original maturities of three months or less, including investments in certificates of deposit, commercial paper, treasury bills, money market funds and other investments. Our marketable securities are deposited in certificates of deposit and corporate bonds with original maturities of 90-365 days. We maintain approximately 91% of our cash, cash equivalents and marketable securities in the United States. Therefore, we believe that credit risk is limited with respect to our cash, cash equivalents, and marketable securities balances.

Cash Flow

	Six months ended
	September 30,
(In thousands)	2014			2013
Net cash used in continuing operations:
Operating activities	$	(9,504	)	$	(7,667	)
Investing activities	(22,630		)	27,022
Financing activities	(294		)	(612		)
Effect of exchange rate changes on cash	30			3
Cash flows used in continuing operations	(32,398		)	18,746
Cash flows used in discontinued operations	—			(1,245		)
Net (decrease) increase in cash and cash equivalents	$	(32,398	)	$	17,501

Cash flow used in operating activities from continuing operations.  Cash flows used in operating activities were $9.5 million in the first six months of fiscal 2015. The use of cash was mostly attributable to our operating loss in the first half of $3.4 million, $1.7 million in legal settlement payments, $1.4 million for working capital movements related to the timing of payments to vendors, $5.5 million from deferred revenue for support services performed during the period and $2.3 million of annual bonus payments.

Cash flows used in operating activities were $7.7 million in the first half of fiscal 2014. The use of cash included $2.0 million annual bonus payments, $5.1 million from deferred revenue for support services performed during the period and $0.9 million in restructuring, severance and other charges.

Cash flow used in investing activities from continuing operations. In fiscal 2015, the $22.6 million in cash used in investing activities was primarily comprised of $10.2 million used for the purchase of marketable securities, $3.8 million for acquisition of developed technology for our rGuest Seat product, $3.0 million used for the new ERP replacement project and purchase of property and equipment and $8.0 million for the development of proprietary software. This was partially offset by $2.0 million in proceeds received from a company owned life insurance policy.

In fiscal 2014, the $27.0 million in cash provided by investing activities was primarily comprised of $36.0 million net proceed from the sale of RSG, offset by $1.8 million paid for the acquisition of TMx, $2.4 million used for the enhancement of internal use software and purchase of property and equipment and $4.9 million for the development of proprietary software.

Cash flow used in financing activities from continuing operations.  During the first six months of fiscal 2015, the $0.3 million used in financing activities was primarily comprised of the repurchase of shares to satisfy employee tax withholding and to cover the price of the options, and payments on capital lease obligations.

During the first half of fiscal 2014, the $0.6 million used in financing activities was primarily comprised of the repurchase of shares to satisfy employee tax withholding and to cover the price of the options, and payments on capital lease obligations.

36

Contractual Obligations

As of September 30, 2014, there were no other significant changes to our contractual obligations as presented in our Annual Report for the year ended March 31, 2014.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Critical Accounting Policies

A detailed description of our significant accounting policies is included in our Annual Report for the year ended March 31, 2014. There have been no material changes in our significant accounting policies and estimates since March 31, 2014 except as noted in Note 2, Summary of Significant Accounting Policies.

Forward-Looking Information

This Quarterly Report and other publicly available documents, including the documents incorporated herein and therein by reference, contain, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. These statements are based on management’s current expectations, intentions, or beliefs and are subject to a number of factors, assumptions, and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impact the business include the risk factors set forth in Item 1A of our Annual Report for the fiscal year ended March 31, 2014. We undertake no obligation to update any such factor or to publicly announce the results of any revisions to any forward-looking statements contained herein whether as a result of new information, future events, or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk affecting us, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in our Annual Report for the fiscal year ended March 31, 2014. There have been no material changes in our market risk exposures since March 31, 2014.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision of and with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), management evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report. Based on that evaluation, the CEO and CFO concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

Change in Internal Control over Financial Reporting

None.

PART II. OTHER INFORMATION

37

Item 1.     Legal Proceedings

None.

Item 1A. Risk Factors

There have been no material changes in the risk factors included in our Annual Report for the fiscal year ended March 31, 2014 that may materially affect our business, results of operations, or financial condition.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.    Defaults Upon Senior Securities

None.

Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.    Other Information

None.

Item 6.    Exhibits

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

101 The following materials from our quarterly report on Form 10-Q for the quarter ended September 30, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at September 30, 2014 and March 31, 2014, (ii) Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2014 and 2013, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended September 30, 2014 and 2013, (iv) Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2014 and 2013, and (v) Notes to Condensed Consolidated Financial Statements for the three and six months ended September 30, 2014.

38

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.

AGILYSYS, INC.

Date:	November 6, 2014	/s/Janine K. Seebeck
		Janine K. Seebeck
		Senior Vice President, Chief Financial Officer and Treasurer
		(Principal Accounting Officer and Duly Authorized Officer)

39

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, James H. Dennedy, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Agilysys, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 6, 2014

By:	/s/ James H. Dennedy
	James H. Dennedy
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

I, Janine K. Seebeck, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Agilysys, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 6, 2014

By:	/s/ Janine K. Seebeck
	Janine K. Seebeck
	Senior Vice President, Chief Financial Officer,
	and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION

I, James H. Dennedy, President and Chief Executive Officer of Agilysys, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2014 (the “Report”) fully complies (1) with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 6, 2014

By:	/s/ James H. Dennedy
	James H. Dennedy
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

I, Janine K. Seebeck, Senior Vice President, Chief Financial Officer and Treasurer of Agilysys, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2014 (the “Report”) fully complies (1) with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 6, 2014

By:	/s/ Janine K. Seebeck
	Janine K. Seebeck
	Senior Vice President, Chief Financial Officer,
	and Treasurer

XML

Additional Balance Sheet Information (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Other non-current assets:
Total	$ 3,851	$ 3,785
Accrued liabilities:
Salaries, wages, and related benefits	5,775	8,308
Other taxes payable	1,181	1,122
Accrued legal settlements	70	1,630
Restructuring liabilities	259	534
Professional fees	808	674
Software license fees	0	500
Deferred rent	353	477
Contingent consideration — current	180	127
Other	929	860
Total	9,555	14,232
Other non-current liabilities:
Uncertain tax positions	1,533	2,440
Deferred rent	1,742	1,755
Contingent consideration — non-current	1,557	1,612
Other	358	358
Total	$ 5,190	$ 6,165

XML

Share-based Compensation (Details Textual) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2014
Stock Based Compensation (Textual) [Abstract]
Maximum number of shares subject to stock options and restricted shares	1,000,000
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Treasury Stock Reissued	8,065
Shares Paid for Option Price for Share Based Compensation	6,935
Stock Based Compensation (Textual) [Abstract]
Stock option granted		0
Restricted Stock [Member]
Stock Based Compensation (Textual) [Abstract]
Unrecognized stock based compensation expense related to non-vested restricted stock	$ 4.8	$ 4.8
Weighted-average vesting period	2 years 4 months 24 days
Stock Settled Stock Appreciation Rights (SSARS) [Member]
Stock Based Compensation (Textual) [Abstract]
Shares withheld to cover the employee's minimum applicable income taxes	1,446
Unrecognized stock based compensation expense related to non-vested SSARs	1.1	1.1
Weighted-average vesting period	2 years
Total treasury shares to settle SSARs	5,463
Performance Shares [Member]
Stock Based Compensation (Textual) [Abstract]
Unrecognized stock based compensation expense related to non-vested restricted stock	$ 0.1	$ 0.1
Weighted-average vesting period	3 months 18 days
2011 Stock Incentive Plan [Member]
Stock Based Compensation (Textual) [Abstract]
Shares authorized under 2011 Stock incentive plan	3,000,000	3,000,000
2011 Stock Incentive Plan [Member] | Stock Options [Member]
Stock Based Compensation (Textual) [Abstract]
Maximum number of shares subject to stock options and restricted shares	800,000
2011 Stock Incentive Plan [Member] | Restricted Shares and Restricted Share Units [Member]
Stock Based Compensation (Textual) [Abstract]
Maximum number of shares subject to stock options and restricted shares	400,000

XML

Share-based Compensation (Details 3) (Restricted Stock [Member], USD $)	6 Months Ended
	Sep. 30, 2014
Restricted Stock [Member]
Activity Related to Restricted Shares Awarded by the Company
Number of shares Outstanding at Beginning of Period	139,501
Weighted Average Grant-Date Fair Value Outstanding at Beginning of Period	$ 10.72
Granted, Number of Shares	344,443
Granted, Weighted Average Grant Date Fair value	$ 13.90
Vested, Number of shares	(16,840)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	$ 8.64
Forfeited, Number of Shares	(13,876)
Forfeited, Weighted Average Grant Date Fair Value	$ 13.15
Number of shares Outstanding at End of Period	453,228
Weighted Average Grant-Date Fair Value Outstanding at End of Period	$ 13.13

XML

Discontinued Operations (Details Textual) (USD $)	0 Months Ended	6 Months Ended		0 Months Ended	3 Months Ended
	Jul. 02, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014 UK Entity [Member]	Sep. 30, 2014 UK Entity [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Aggregate Purchase Price	$ 37,600,000			$ 700,000
Discontinued Operations and Disposal Group, Note Due From				800,000	500,000
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents				900,000	300,000
Transaction fees	1,600,000
Proceeds from sale of business units	$ 36,000,000	$ 282,000	$ 36,054,000	$ 600,000

XML

Income Taxes (Tables)

6 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Effective tax rates from continuing operations

The following table compares our income tax benefit and effective tax rates for the three and six months endedSeptember 30, 2014 and 2013:

	Three months ended						Six months ended
	September 30,						September 30,
(Dollars in thousands)	2014			2013			2014			2013
Income tax expense (benefit)	$	81		$	100		$	(714	)	$	(230	)
Effective tax rate	(7.7		)%	(8.3		)%	17.5		%	30.6		%

XML

Fair Value Measurements (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Proceeds from corporate-owned life insurance policy	$ (1,969)	$ 4
Cash Surrender Value [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	4,360	3,673
Unrealized gain relating to instruments held at reporting date	28	30
Purchases, sales, issuances and settlements, net	20	0
Proceeds from corporate-owned life insurance policy	(1,989)	0
Balance at end of period	$ 2,419	$ 3,703

XML

(Loss) Earnings per Share (Details Textual)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Incremental Common Shares Attributable to Restricted Shares	470,956	283,596

XML

Intangible Assets - Schedule of Future Amortization Expense (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of fiscal 2015	$ 1,003
2016	1,335
2017	1,335
2018	1,335
2019	959
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	65
Net carrying amount	$ 6,032

XML

Fair Value Measurements Cash, Cash Equivalents and Marketable Securities (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2014	Mar. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
CashCashEquivalentsAndShortTermInvestmentsAmortizedCost	$ 13,081	$ 28,999
CashCashEquivalentsAndShortTermInvestmentsUnrealizedLosses	5
Cash, Cash Equivalents, and Short-term Investments	13,076	28,999
Cash Equivalents, at Carrying Value	2,999	28,999
Available-for-sale Securities, Current	10,077
Fair Value, Inputs, Level 2 [Member] | Certificates of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
CashCashEquivalentsAndShortTermInvestmentsAmortizedCost		9,006
Cash, Cash Equivalents, and Short-term Investments		9,006
Cash Equivalents, at Carrying Value	0	9,006
Fair Value, Inputs, Level 2 [Member] | Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
CashCashEquivalentsAndShortTermInvestmentsAmortizedCost	2,999	19,993
Cash, Cash Equivalents, and Short-term Investments	2,999	19,993
Cash Equivalents, at Carrying Value	2,999	19,993
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Schedule of Available-for-sale Securities [Line Items]
CashCashEquivalentsAndShortTermInvestmentsAmortizedCost	5,076
CashCashEquivalentsAndShortTermInvestmentsUnrealizedLosses	5
Cash, Cash Equivalents, and Short-term Investments	5,071
Available-for-sale Securities, Current	5,071
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	5,006
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member] | Certificates of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
CashCashEquivalentsAndShortTermInvestmentsAmortizedCost	5,006
Cash, Cash Equivalents, and Short-term Investments	$ 5,006

XML

Share-based Compensation (Details 4) (Performance Shares [Member], USD $)	6 Months Ended
	Sep. 30, 2014
Performance Shares [Member]
Performance shares awarded by the Company
Number of shares Outstanding at Beginning of Period	17,728
Weighted Average Grant-Date Fair Value Outstanding at Beginning of Period	$ 8.64
Granted, Number of Shares	0
Granted, Weighted Average Grant Date Fair value	$ 0.00
Number of shares Outstanding at End of Period	17,728
Weighted Average Grant-Date Fair Value Outstanding at End of Period	$ 8.64

XML

Acquisitions

6 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Acquisitions

3. Acquisitions

Purchase of assets from Dining Ventures - Fiscal 2015

On July 3, 2014 Agilysys purchased certain assets from Dining Ventures, Inc. The acquired assets are the base for our rGuest Seat product, a dining reservations and table management application. The purchase consideration consisted of approximately $3.8 million and was funded with cash on hand. Management concluded that this acquisition was not a material acquisition under the provisions of ASC 805, Business Combinations (ASC 805). The results derived from this purchased asset have been included in our Condensed Consolidated Financial Statements from the date of acquisition and did not have a material impact on our condensed consolidated financial statements or related disclosures. 

The following is a summary of the fair values of the assets acquired in the acquisition:

(In thousands)
Goodwill	$	2,464
Developed technology	1,286
Total assets acquired	$	3,750

The goodwill of approximately $2.5 million arising from the acquisition consists largely of synergies expected from combining the developed technology of Dining Ventures with Agilysys' operations. The goodwill from this acquisition is deductible for tax purposes over a period of 15 years.

The following is a summary of the intangible asset acquired and the weighted-average useful life over which it will be amortized.

			Weighted-average
	Purchased assets		useful life
Developed technology	$	1,286	5 years

The developed technology acquired from Dining Ventures was determined to be an internal use asset and is therefore carried in fixed assets on the balance sheet and amortized in operating expenses.

Purchase of TimeManagement Corporation - Fiscal 2014

On June 10, 2013, Agilysys purchased certain assets and assumed certain liabilities of TimeManagement Corporation (TMC), a privately-owned Minneapolis-based technology provider with solutions that streamline workforce management environments for hospitality operators. This technology based acquisition is consistent with the core value we provide to the industry and integrates with our point-of-sale, inventory and procurement systems, including InfoGenesis™ point of sale system and Eatec® inventory and procurement solution. The purchase consideration consisted of $1.8 million in cash paid and $1.8 million of contingent consideration and is still assessed at the same value. The fair value of the contingent consideration was estimated to be $1.8 million at the date of acquisition and is expected to be paid out over the next 5 years and payments could vary based on actual revenue during that time. The fair value of the contingent consideration was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain milestones would be achieved. The acquisition was funded with cash on hand. Management concluded that this acquisition was not a material acquisition under the provisions of ASC 805, Business Combinations. The operations of the purchased business have been included in our Condensed Consolidated Financial Statements from the date of acquisition and did not have a material impact on our condensed consolidated financial statements or related disclosures.

The following is a summary of the fair values of the assets acquired and liabilities assumed from the acquisition:

(In thousands)
Current assets	$	327
Property and equipment	88
Goodwill	3,444
Developed technology	605
Total assets acquired	4,464
Total liabilities assumed (all current)	914
Net assets acquired	$	3,550

The goodwill of approximately $3.4 million arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of Agilysys and TMC. The goodwill from this acquisition is deductible for tax purposes over a period of 15 years.

The following is a summary of the intangible asset acquired and the weighted-average useful life over which it will be amortized.

			Weighted-average
	Purchased assets		useful life
Developed technology	$	605	5 years

The developed technology acquired from TMC was determined to be an asset held for sale and is therefore carried in intangible assets on the balance sheet and amortized in cost of goods sold.

XML

Share-based Compensation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation	$ 702	$ 517	$ 1,067	$ 882
Product development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Summary of share-based compensation expense for options	242	215	409	356
Selling and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Summary of share-based compensation expense for options	12	37	32	50
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Summary of share-based compensation expense for options	$ 448	$ 265	$ 626	$ 476

XML

Fair Value Measurements Cash, cash equivalents and marketable securities (Tables)

6 Months Ended

Sep. 30, 2014

Cash, cash equivalents and marketable securities [Abstract]

Cash, Cash Equivalents, and Short-term Investments [Text Block]

Our cash equivalents consist of highly liquid investments with original maturity dates of three months or less and can include certificates of deposit, commercial paper, treasury bills, money market funds and other investments. The fair value of our marketable securities, comprised of commercial paper, corporate bonds and certificates of deposit, was determined using a market approach, based on prices and other relevant information generated by market transactions involving similar assets, and therefore, is classified within Level 2 of the fair value hierarchy. Our marketable securities consist of investments with original maturity dates of 90 to 365 days and are classified as available for sale.

The following data summarizes our cash equivalents and marketable securities:

	September 30, 2014
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable
(In thousands)	cost basis		gains		losses		value		equivalents		securities
Level 2:
Commercial paper	$	2,999	$	—	$	—	$	2,999	$	2,999	$	—
Certificates of deposit	5,006		—		—		5,006		—		5,006
Corporate bonds	5,076		—		5		5,071		—		5,071
Total	$	13,081	$	—	$	5	$	13,076	$	2,999	$	10,077

	March 31, 2014
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable
(In thousands)	cost basis		gains		losses		value		equivalents		securities
Level 2:
Commercial paper	$	19,993	$	—	$	—	$	19,993	$	19,993	$	—
Certificates of deposit	9,006		—		—		9,006		9,006		—
Total	$	28,999	$	—	$	—	$	28,999	$	28,999	$	—

Cash, cash equivalents and marketable securities [Table Text Block]

The following data summarizes our cash equivalents and marketable securities:

	September 30, 2014
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable
(In thousands)	cost basis		gains		losses		value		equivalents		securities
Level 2:
Commercial paper	$	2,999	$	—	$	—	$	2,999	$	2,999	$	—
Certificates of deposit	5,006		—		—		5,006		—		5,006
Corporate bonds	5,076		—		5		5,071		—		5,071
Total	$	13,081	$	—	$	5	$	13,076	$	2,999	$	10,077

	March 31, 2014
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable
(In thousands)	cost basis		gains		losses		value		equivalents		securities
Level 2:
Commercial paper	$	19,993	$	—	$	—	$	19,993	$	19,993	$	—
Certificates of deposit	9,006		—		—		9,006		9,006		—
Total	$	28,999	$	—	$	—	$	28,999	$	28,999	$	—

XML

Fair Value Measurements (Tables)

6 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Assets and liabilities measured at fair value on a recurring basis

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	September 30, 2014		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — non-current	$	2,419	$	—	$	—	$	2,419
Liabilities:
Contingent consideration — current	$	180	$	—	$	—	$	180
Contingent consideration — non-current	1,557		—		—		1,557

	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	March 31, 2014		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — current	$	1,989	$	—	$	—	$	1,989
Corporate-owned life insurance — non-current	2,371		—		—		2,371
Liabilities:
Contingent consideration — current	$	127	$	—	$	—	$	127
Contingent consideration — non-current	1,612		—		—		1,612

Summary of changes in the fair value of the Level 3 assets and liabilities Corporate-owned life insurance

The following table presents a summary of changes in the fair value of the Level 3 assets:

	Six months ended
	September 30,
(In thousands)	2014			2013
Corporate-owned life insurance:
Balance on April 1	$	4,360		$	3,673
Unrealized gain relating to instruments held at reporting date	28			30
Purchases, sales, issuances and settlements, net	20			—
Proceeds from corporate-owned life insurance policy	(1,989		)	—
Balance on September 30	$	2,419		$	3,703

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following tables present a summary of changes in the fair value of the Level 3 liabilities:

Level 3 assets and liabilities
Six months ended September 30, 2014
(In thousands)	Contingent consideration
Balance at April 1, 2014	$	1,739
Foreign currency translation adjustments	—
Amortization	—
Provisions	—
Purchases	—
Activity, payments and other charges (net)	(2		)
Balance at September 30, 2014	$	1,737

Level 3 assets and liabilities
Six months ended September 30, 2013
(In thousands)	Contingent consideration
Balance at April 1, 2013	$	—
Foreign currency translation adjustments	—
Amortization	—
Provisions	—
Purchases	—
Activity, payments and other charges (net)	1,800
Balance at September 30, 2013	$	1,800

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Share-based Compensation (Details 1) (Stock Options [Member], USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2014
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at Beginning of Period, Number of Options		627,500
Outstanding at Beginning of Period, Weighted Average Exercise Price		$ 15.26
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted		0
Share-based Compensation Arrangements by Share Based Payment Award Non Option Equity Instruments Grants in Period Weighted Average Exercise Price		$ 0.00
Exercised, Number of Options		(15,000)
Exercised, Weighted-Average Exercise Price		$ 13.76
Cancelled/expired, Number of options		(30,000)
Cancelled/Expired, Weighted-Average Exercise Price		$ 13.11
Outstanding and exercisable at End of Period, Number of Options	582,500	582,500
Outstanding and exercisable at End of Period, Weighted Average Exercise Price	$ 15.41	$ 15.41
Remaining Contractual Term, Outstanding and exercisable at End of Period	1 year 7 months 10 days
Aggregate Intrinsic Value, Outstanding and exercisable at End of Period	$ 0	$ 0

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Acquisitions (Details) (USD $) In Thousands, unless otherwise specified			0 Months Ended		0 Months Ended
	Sep. 30, 2014	Mar. 31, 2014	Jul. 03, 2014 Dining Ventures, Inc. [Member]	Jul. 03, 2014 Dining Ventures, Inc. [Member]	Jun. 10, 2014 TimeManagement Corporation [Member]	Jun. 10, 2013 TimeManagement Corporation [Member]
Business Acquisition [Line Items]
Current assets						$ 327
Property and equipment						88
Goodwill	19,622	17,158		2,464		3,444
Developed technology				1,286		605
Total assets acquired				3,750		4,464
Total liabilities assumed (all current)						914
Net assets acquired						$ 3,550
Acquired finite-lived intangible assets, weighted average useful life			5 years		5 years

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Acquisitions (Details Textual) (USD $)	6 Months Ended			0 Months Ended		0 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014	Jul. 03, 2014 Dining Ventures, Inc. [Member]	Jul. 03, 2014 Dining Ventures, Inc. [Member]	Jun. 10, 2014 TimeManagement Corporation [Member]	Jun. 10, 2013 TimeManagement Corporation [Member]
Business Acquisition [Line Items]
Cash paid for acquisiton	$ 3,750,000	$ 1,750,000				$ 1,800,000
Business acquisition, contingent consideration, potential cash payment							1,800,000
Business combination, contingent consideration arrangements, period						5 years
Goodwill	$ 19,622,000		$ 17,158,000		$ 2,464,000		$ 3,444,000
Business acquisition, goodwill, expected tax deductible period				15 years		15 years

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Summary of Significant Accounting Policies

6 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended March 31, 2014, included in our Annual Report on Form 10-K. Except as described below, there have been no material changes to our significant accounting policies and estimates from those disclosed therein.

Marketable Securities

Marketable securities can consist of certificates of deposits, commercial paper, corporate bonds and other investments with established commercial banking institutions with readily determinable fair values and stated maturities of greater than three months.  We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such designation at each balance sheet date.  Our marketable securities are classified as available for sale and have original maturity dates from 90 to 365 days.

Adopted and Recently Issued Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements - Going Concern, which provides guidance on disclosure of uncertainties about an entity’s ability to continue as a going concern. This is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or related disclosures.

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which provides guidance requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2015. We are currently evaluating the impact that the adoption of ASU 2014-12 will have on our consolidated financial statements or related disclosures.

In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which converges the FASB and the International Accounting Standards Board standard on revenue recognition. Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2016. We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements or related disclosures.

In April 2014, FASB issued ASU No. 2014-08, Presentation of Financial Statements and Property, Plant and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which requires only disposals representing a strategic shift in operations that have a major effect on operations and financial results to be presented as discontinued operations. The guidance also requires expanded financial disclosures about discontinued operations and significant disposals that do not qualify as discontinued operations. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2014. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or related disclosures.

In July 2013, FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 clarifies guidance and eliminates diversity in practice on the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This new guidance is effective on a prospective basis for fiscal years and interim reporting periods within those years, beginning after December 15, 2013. We adopted the provisions of ASU 2013-11 beginning April 1, 2014. The adoption of the ASU did not have any impact on our financial statements.

Management continually evaluates the potential impact, if any, of all recent accounting pronouncements on our consolidated financial statements or related disclosures and, if significant, makes the appropriate disclosures required by such new accounting pronouncements.

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Discontinued Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income from discontinued operations
Net revenue		$ 1,733		$ 26,848
Income from operations		36		781
Other expense, net		44		(9)
Gain on sale		23,135		23,135
Income before tax from discontinued operations		23,215		23,907
Income tax expense		1,453		1,618
Income from discontinued operations	$ 0	$ 21,762	$ 0	$ 22,289

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Effective tax rates from continuing operations
Income tax expense (benefit)	$ 81	$ 100	$ (714)	$ (230)
Effective tax rate	(7.70%)	(8.30%)	17.50%	30.60%

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Current assets:
Cash and cash equivalents	$ 67,168	$ 99,566
Marketable securities	10,077	0
Accounts receivable, net of allowances of $838 and $1,101, respectively	23,519	23,615
Inventories	720	481
Prepaid expenses	2,901	3,300
Other current assets	585	2,892
Total current assets	104,970	129,854
Property and equipment, net	13,670	12,251
Goodwill	19,622	17,158
Intangible assets, net	9,985	10,626
Software development costs, net	24,498	17,221
Other non-current assets	3,851	3,785
Total assets	176,596	190,895
Current liabilities:
Accounts payable	10,144	11,073
Deferred revenue	17,295	22,795
Accrued liabilities	9,555	14,232
Capital lease obligations, current	141	43
Total current liabilities	37,135	48,143
Deferred income taxes, non-current	3,444	3,422
Capital lease obligations, non-current	170	292
Other non-current liabilities	5,190	6,165
Commitments and contingencies (see Note 9)
Shareholders' equity:
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 22,814,241 and 22,467,970 shares outstanding at September 30, 2014 and March 31, 2014, respectively	9,482	9,482
Treasury shares, 8,792,590 and 9,138,861 at September 30, 2014 and March 31, 2014, respectively	(2,638)	(2,741)
Capital in excess of stated value	(12,363)	(13,409)
Retained earnings	136,319	139,675
Accumulated other comprehensive loss	(143)	(134)
Total shareholders' equity	130,657	132,873
Total liabilities and shareholders' equity	$ 176,596	$ 190,895

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Share-based Compensation (Details 2) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Non Option Equity Instruments Expirations In Period Weighted Average Exercise Price	$ 0.00
Stock Settled Stock Appreciation Rights (SSARS) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Rights Outstanding at Beginning of Period		320,236
Weighted Average Exercise Price Outstanding at Beginning of Period		$ 9.05
Number of Rights Granted,	113,900
Weighted Average Exercise Price Granted,	$ 14.43
Number of Rights Exercised	(16,078)
Weighted Average Exercise Price Exercised	$ 7.75
Number of Rights, Forfeited	(10,668)
Weighted Average Exercise Price, Forfeited	$ 7.46
Number of Rights Outstanding at End of Period	407,390	320,236
Weighted Average Exercise Price Outstanding at End of Period	$ 10.64	$ 9.05
Remaining Contractual Term Outstanding at End of Period	5 years 3 months 11 days
Aggregate Intrinsic Value Outstanding at End of Period	$ 806
Number of Rights Exercisable at End of Period	179,078
Weighted Average Exercise Price Exercisable at End of Period	$ 8.54
Remaining Contractual Term Exercisable at End of Period	4 years 5 months 5 days
Aggregate Intrinsic Value Exercisable at End of Period	$ 590
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period	0

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Operating activities
Net (loss) income	$ (3,356)	$ 21,768
Less: Income from discontinued operations	0	(22,289)
Loss from continuing operations	(3,356)	(521)
Adjustments to reconcile loss from continuing operations to net cash used in operating activities
Restructuring, severance and other charges	818	617
Payments for restructuring, severance and other charges	(823)	(896)
Legal settlements	203	0
Payments for legal settlements	(1,714)	(87)
Asset impairments and related charges	0	18
Depreciation	1,146	994
Amortization	2,987	1,576
Share-based compensation	1,067	882
Excess Tax Benefit from Share-based Compensation, Operating Activities	0	139
Changes in operating assets and liabilities:
Accounts receivable	104	(1,572)
Inventories	(237)	214
Prepaid expense	400	(333)
Accounts payable	(1,432)	(1,032)
Deferred revenue	(5,503)	(5,133)
Accrued liabilities	2,255	2,055
Income taxes payable	892	539
Other changes, net	17	(339)
Net cash used in operating activities from continuing operations	(9,504)	(7,667)
Net cash used in operating activities from discontinued operations	0	(1,011)
Net cash used in operating activities	(9,504)	(8,678)
Investing activities
Capital expenditures	(3,036)	(2,425)
Payments for Capitalized Software Development	(7,974)	(4,853)
Proceeds from sale of business units	282	36,054
Proceeds from company-owned life insurance policies, net	1,969	(4)
Cash paid for acquisition, net	(3,750)	(1,750)
Proceeds from Sale and Maturity of Marketable Securities	119	0
Investments in marketable securities	(10,240)	0
Net cash (used) provided in investing activities from continuing operations	(22,630)	27,022
Net cash (used) provided in investing activities from discontinued operations	0	(154)
Net cash (used) provided in investing activities	(22,630)	26,868
Financing activities
Repurchase of common shares to satisfy employee tax withholding	(373)	(777)
Proceeds from Stock Options Exercised	102	64
Excess Tax Benefit from Share-based Compensation, Financing Activities	0	139
Principal payments under long-term obligations	(23)	(38)
Net cash used in financing activities from continuing operations	(294)	(612)
Net cash used in financing activities from discontinued operations	0	(80)
Net cash used in financing activities	(294)	(692)
Effect of exchange rate changes on cash	30	3
Cash flows used in continuing operations	(32,398)	18,746
Cash flows used in discontinued operations	0	(1,245)
Net (decrease) increase in cash and cash equivalents	(32,398)	17,501
Cash and cash equivalents at beginning of period	99,566	82,931
Cash and cash equivalents at end of period	67,168	100,432
Less cash presented in current assets of discontinued operations on balance sheet	0	678
Cash and cash equivalents at end of period - continuing operations	$ 67,168	$ 99,754

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Restructuring and Related Charges (Details Textual) (USD $)	3 Months Ended	12 Months Ended	15 Months Ended
	Sep. 30, 2014	Mar. 31, 2014	Jun. 30, 2014
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 259,000	$ 534,000
Restructuring Charges (Textual) [Abstract]
Restructuring Reserve, Current	259,000	534,000
Severance and Employment Costs [Member]
Restructuring Charges (Textual) [Abstract]
Restructuring and Related Cost, Expected Future Payment, Year Two	200,000
Restructuring Plan Fiscal Two Zero One Four [Member]
Restructuring Charges (Textual) [Abstract]
Restructuring charges	400,000	1,200,000	1,600,000
Restructuring Reserve, Current	100,000
Restructuring Plan Fiscal Two Zero One Four [Member] | Severance and Employment Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 81,000	$ 534,000

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Restructuring and Related Charges (Tables)

6 Months Ended

Sep. 30, 2014

Restructuring Charges [Abstract]

Reconciliation of the beginning and ending balances of the company's restructuring liabilities

Following is a reconciliation of the beginning and ending balances of the restructuring liability:

	Balance at							Balance at
	March 31,							September 30,
(In thousands)	2014		Provision		Payments			2014
Fiscal 2015 Restructuring Plan:
Severance and employment costs	$	—	$	178	$	—		$	178
Fiscal 2014 Restructuring Plan:
Severance and employment costs	$	534	$	370	$	(823	)	$	81
Total restructuring costs	$	534	$	548	$	(823	)	$	259

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Intangible Assets - Schedule of Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Amortized intangible assets:
Gross carrying amount	$ 24,215	$ 24,215
Accumulated amortization	(23,430)	(22,789)
Net carrying amount	785	1,426
Unamortized intangible assets:
Accumulated impairment	(900)	(900)
Carrying amount	9,200	9,200
Finite Lived Software Development Costs [Abstract]
Finite Lived Software Development Costs Accumulated Impairment	(9,493)	(9,493)
Finite Lived Software Development Costs Gross	25,318	17,491
Finite Lived Software Development Costs Accumulated Amortization	(820)	(270)
Finite Lived Software Development Costs Net	24,498	17,221
Total intangible assets, gross carrying amount	33,415	33,415
Intangible Assets, Net (Excluding Goodwill)	9,985	10,626
Trade names [Member]
Unamortized intangible assets:
Carrying amount, excluding accumulated impairment	10,100	10,100
Customer relationships [Member]
Amortized intangible assets:
Gross carrying amount, excluding accumulated impairment	10,775	10,775
Accumulated amortization, excluding accumulated impairment	(10,530)	(10,080)
Net carrying amount, excluding accumulated impairment	245	695
Non-competition agreements [Member]
Amortized intangible assets:
Gross carrying amount, excluding accumulated impairment	2,700	2,700
Accumulated amortization, excluding accumulated impairment	(2,604)	(2,473)
Net carrying amount, excluding accumulated impairment	96	227
Developed technology [Member]
Amortized intangible assets:
Gross carrying amount, excluding accumulated impairment	10,660	10,660
Accumulated amortization, excluding accumulated impairment	(10,216)	(10,156)
Net carrying amount, excluding accumulated impairment	444	504
Patented Technology [Member]
Amortized intangible assets:
Gross carrying amount, excluding accumulated impairment	80	80
Accumulated amortization, excluding accumulated impairment	(80)	(80)
Net carrying amount, excluding accumulated impairment	0	0
Software Development Costs [Member]
Finite Lived Software Development Costs [Abstract]
Finite Lived Software Development Costs Gross Excluding Accumulated Impairment	15,561	14,587
Finite Lived Software Development Costs Accumulated Amortization Excluding Accumulated Impairment	(820)	(270)
Finite Lived Software Development Costs, Net Excluding, Accumulated Impairment	14,741	14,317
Project Expenditures Not Yet In Use [Member]
Finite Lived Software Development Costs [Abstract]
Finite Lived Software Development Costs Gross Excluding Accumulated Impairment	19,250	12,397
Finite Lived Software Development Costs Accumulated Amortization Excluding Accumulated Impairment	0	0
Finite Lived Software Development Costs, Net Excluding, Accumulated Impairment	$ 19,250	$ 12,397

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Additional Balance Sheet Information (Tables)

6 Months Ended

Sep. 30, 2014

Balance Sheet Related Disclosures [Abstract]

Additional information related to the Company's Condensed Consolidated Balance Sheets

Additional information related to the Condensed Consolidated Balance Sheets is as follows:

(In thousands)	September 30, 2014		March 31, 2014
Accrued liabilities:
Salaries, wages, and related benefits	$	5,775	$	8,308
Other taxes payable	1,181		1,122
Accrued legal settlements	70		1,630
Restructuring liabilities	259		534
Professional fees	808		674
Software license fees	—		500
Deferred rent	353		477
Contingent consideration	180		127
Other	929		860
Total	$	9,555	$	14,232
Other non-current liabilities:
Uncertain tax positions	$	1,533	$	2,440
Deferred rent	1,742		1,755
Contingent consideration	1,557		1,612
Other	358		358
Total	$	5,190	$	6,165

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Nature of Operations and Financial Statement Presentation

6 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Financial Statement Presentation

Nature of Operations and Financial Statement Presentation

Nature of Operations

Agilysys is a leading developer and marketer of proprietary enterprise software, services and solutions to the hospitality industry. We specialize in market-leading point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document management and mobile and wireless solutions that are designed to streamline operations, improve efficiency and enhance the guest experience. Agilysys serves four major market sectors: Gaming, both corporate and tribal; Hotels, Resorts and Cruise; Foodservice Management; and Restaurants, Universities, Stadia and Healthcare. A significant portion of our consolidated revenue is derived from contract support, maintenance and subscription services.

Agilysys operates extensively throughout North America, Europe and Asia, with corporate services located in Alpharetta, GA, and offices in Singapore, Hong Kong and Malaysia. Agilysys is comprised of a single operating segment and operates as a pure play software-driven solutions provider to the hospitality industry.

The sales of our RSG business and UK entity each represented a disposal of a component of an entity. As such, the operating results of RSG and the UK entity have been reported as a component of discontinued operations in the Condensed Consolidated Statement of Operations for the three and six months endedSeptember 30, 2013 and the Condensed Consolidated Statement of Cash Flows for the six months endedSeptember 30, 2013.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include our accounts consolidated with our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Our fiscal year ends on March 31st. References to a particular year refer to the fiscal year ending in March of that year. For example, fiscal 2014 refers to the fiscal year ending March 31, 2014.

Our unaudited interim financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information, the instructions to the Quarterly Report on Form 10-Q (Quarterly Report) under the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10-01 of Regulation S-X under the Exchange Act. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements.

The Condensed Consolidated Balance Sheet as of September 30, 2014, as well as the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive (Loss) Income for three and six months endedSeptember 30, 2014 and 2013, and the Condensed Consolidated Statements of Cash Flow for the six months ended September 30, 2014 and 2013, are unaudited. However, these financial statements have been prepared on the same basis as those in the audited annual financial statements. In the opinion of management, all adjustments of a recurring nature necessary to fairly present the results of operations, financial position, and cash flows have been made. Further, we have evaluated all significant events occurring subsequent to the date of the Condensed Consolidated Financial Statements and through the filing of this Quarterly Report.

These unaudited interim financial statements should be read together with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended March 31, 2014, filed with the Securities and Exchange Commission (SEC) on June 4, 2014.

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Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 838	$ 1,101
Common stock, stated value	$ 0.30	$ 0.30
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	31,606,831	31,606,831
Common stock, shares outstanding	22,814,241	22,467,970
Treasury shares	8,792,590	9,138,861

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Share-based Compensation

6 Months Ended

Sep. 30, 2014

Share-based Compensation [Abstract]

Share-based Compensation

Share-based Compensation

We may grant non-qualified stock options, incentive stock options, stock-settled stock appreciation rights, restricted shares, and restricted share units for up to 3.0 million common shares under our 2011 Stock Incentive Plan (the 2011 Plan). The maximum number of shares subject to stock options or SSARs that may be granted to an individual in a calendar year is 800,000 shares, and the maximum number of shares subject to restricted shares or restricted share units that may be granted to an individual in a calendar year is 400,000 shares. The maximum aggregate number of restricted shares or restricted share units that may be granted under the 2011 Plan is 1.0 million.

We have a shareholder-approved 2006 Stock Incentive Plan (the 2006 Plan) and a 2000 Stock Incentive Plan that still have vested awards outstanding. Awards are no longer being granted from these incentive plans.

We may distribute authorized but unissued shares or treasury shares to satisfy share option and appreciation right exercises or restricted share and performance share awards.

We record compensation expense related to stock options, SSARs, restricted shares, and performance shares granted to certain employees and non-employee directors based on the fair value of the awards on the grant date. The fair value of restricted share and performance share awards is based on the closing price of our common shares on the grant date. The fair value of stock option and SSARs awards is estimated on the grant date using the Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of our common shares.

The following table summarizes the share-based compensation expense for options, SSARs, restricted and performance awards included in the Condensed Consolidated Statements of Operations:

	Three months ended				Six months ended
	September 30,				September 30,
(In thousands)	2014		2013		2014		2013
Product development	$	242	$	215	$	409	$	356
Sales and marketing	12		37		32		50
General and administrative	448		265		626		476
Total share-based compensation expense	702		517		1,067		882

Stock Options

The following table summarizes the activity during the six months endedSeptember 30, 2014 for stock options awarded under the 2006 Plan and the 2000 Stock Incentive Plan:

	Number of Options		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
(In thousands, except share and per share data)			(per share)		(in years)
Outstanding at April 1, 2014	627,500		$	15.26
Granted	—		—
Exercised	(15,000	)	13.76
Cancelled/expired	(30,000	)	13.11
Outstanding and exercisable at September 30, 2014	582,500		$	15.41	1.6	$	—

A total of 8,065 shares, net of 6,935 shares withheld to cover the applicable exercise price of the award, were issued from treasury shares to settle stock options exercised during the first six months of fiscal 2015.

Stock-Settled Stock Appreciation Rights

SSARs are rights granted to an employee to receive value equal to the difference in the price of our common shares on the date of the grant and on the date of exercise. This value is settled in common shares of Agilysys.

The following table summarizes the activity during the six months endedSeptember 30, 2014 for SSARs awarded under the 2011 Plan:

	Number of Rights		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
(In thousands, except share and per share data)			(per right)		(in years)
Outstanding at April 1, 2014	320,236		$	9.05
Granted	113,900		14.43
Exercised	(16,078	)	7.75
Forfeited	(10,668	)	7.46
Expired	—		—
Outstanding at September 30, 2014	407,390		$	10.64	5.3	$	806
Exercisable at September 30, 2014	179,078		$	8.54	4.4	$	590

As of September 30, 2014, total unrecognized stock based compensation expense related to non-vested SSARs was $1.1 million, which is expected to be recognized over a weighted-average vesting period of 2.0 years.

A total of 5,463 shares, net of 1,446 shares withheld to cover the employee’s minimum applicable income taxes, were issued from treasury shares to settle SSARs exercised during the six months endedSeptember 30, 2014. The shares withheld were returned to treasury shares.

Restricted Shares

We granted shares to certain of our Directors, executives and key employees under the 2011 Plan, the vesting of which is service-based. The following table summarizes the activity during the six months endedSeptember 30, 2014 for restricted shares awarded under the 2011 Plan:

	Number of Shares		Weighted- Average Grant- Date Fair Value
			(per share)
Outstanding at April 1, 2014	139,501		$	10.72
Granted	344,443		13.90
Vested	(16,840	)	8.64
Forfeited	(13,876	)	13.15
Outstanding at September 30, 2014	453,228		$	13.13

The weighted-average grant date fair value of the restricted shares is determined based upon the closing price of our common shares on the grant date. As of September 30, 2014, total unrecognized stock based compensation expense related to non-vested restricted stock was $4.8 million, which is expected to be recognized over a weighted-average vesting period of 2.4 years.

Performance Shares

The following table summarizes the activity during the six months endedSeptember 30, 2014 for performance shares awarded under the 2011 Plan:

	Number of Shares	Weighted- Average Grant- Date Fair Value
		(per share)
Outstanding at April 1, 2014	17,728	$	8.64
Granted	—	—
Outstanding at September 30, 2014	17,728	$	8.64

The weighted-average grant date fair value of the performance shares is determined based upon the closing price of our common shares on the grant date and assumed that performance goals would be met at target. As of September 30, 2014, total unrecognized stock based compensation expense related to non-vested performance shares was $0.1 million, which is expected to be recognized over a weighted-average vesting period of 0.3 years.

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Document and Entity Information	6 Months Ended
	Sep. 30, 2014	Oct. 31, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	AGILYSYS INC
Entity Central Index Key	0000078749
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		22,814,241

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Fair Value Measurements

6 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We estimate the fair value of financial instruments using available market information and generally accepted valuation methodologies. We assess the inputs used to measure fair value using a three-tier hierarchy. The hierarchy indicates the extent to which pricing inputs used in measuring fair value are observable in the market. Level 1 inputs include unadjusted quoted prices for identical assets or liabilities and are the most observable. Level 2 inputs include unadjusted quoted prices for similar assets and liabilities that are either directly or indirectly observable, or other observable inputs such as interest rates, foreign currency exchange rates, commodity rates, and yield curves. Level 3 inputs are not observable in the market and include our own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the tables below.

There were no significant transfers between Levels 1, 2, and 3 during the six months endedSeptember 30, 2014 and 2013.

Our cash equivalents consist of highly liquid investments with original maturity dates of three months or less and can include certificates of deposit, commercial paper, treasury bills, money market funds and other investments. The fair value of our marketable securities, comprised of commercial paper, corporate bonds and certificates of deposit, was determined using a market approach, based on prices and other relevant information generated by market transactions involving similar assets, and therefore, is classified within Level 2 of the fair value hierarchy. Our marketable securities consist of investments with original maturity dates of 90 to 365 days and are classified as available for sale.

The following data summarizes our cash equivalents and marketable securities:

	September 30, 2014
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable
(In thousands)	cost basis		gains		losses		value		equivalents		securities
Level 2:
Commercial paper	$	2,999	$	—	$	—	$	2,999	$	2,999	$	—
Certificates of deposit	5,006		—		—		5,006		—		5,006
Corporate bonds	5,076		—		5		5,071		—		5,071
Total	$	13,081	$	—	$	5	$	13,076	$	2,999	$	10,077

	March 31, 2014
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable
(In thousands)	cost basis		gains		losses		value		equivalents		securities
Level 2:
Commercial paper	$	19,993	$	—	$	—	$	19,993	$	19,993	$	—
Certificates of deposit	9,006		—		—		9,006		9,006		—
Total	$	28,999	$	—	$	—	$	28,999	$	28,999	$	—

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	September 30, 2014		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — non-current	$	2,419	$	—	$	—	$	2,419
Liabilities:
Contingent consideration — current	$	180	$	—	$	—	$	180
Contingent consideration — non-current	1,557		—		—		1,557

	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	March 31, 2014		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — current	$	1,989	$	—	$	—	$	1,989
Corporate-owned life insurance — non-current	2,371		—		—		2,371
Liabilities:
Contingent consideration — current	$	127	$	—	$	—	$	127
Contingent consideration — non-current	1,612		—		—		1,612

The recorded value of the corporate-owned life insurance policies is adjusted to the cash surrender value of the policies obtained from the third party life insurance providers, which are not observable in the market, and therefore, are classified within Level 3 of the fair value hierarchy. Changes in the cash surrender value of these policies are recorded within “Other expenses (income), net” in the Condensed Consolidated Statements of Operations.

The fair value of the contingent consideration was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain milestones would be achieved.

The following table presents a summary of changes in the fair value of the Level 3 assets:

	Six months ended
	September 30,
(In thousands)	2014			2013
Corporate-owned life insurance:
Balance on April 1	$	4,360		$	3,673
Unrealized gain relating to instruments held at reporting date	28			30
Purchases, sales, issuances and settlements, net	20			—
Proceeds from corporate-owned life insurance policy	(1,989		)	—
Balance on September 30	$	2,419		$	3,703

The following tables present a summary of changes in the fair value of the Level 3 liabilities:

Level 3 assets and liabilities
Six months ended September 30, 2014
(In thousands)	Contingent consideration
Balance at April 1, 2014	$	1,739
Foreign currency translation adjustments	—
Amortization	—
Provisions	—
Purchases	—
Activity, payments and other charges (net)	(2		)
Balance at September 30, 2014	$	1,737

Level 3 assets and liabilities
Six months ended September 30, 2013
(In thousands)	Contingent consideration
Balance at April 1, 2013	$	—
Foreign currency translation adjustments	—
Amortization	—
Provisions	—
Purchases	—
Activity, payments and other charges (net)	1,800
Balance at September 30, 2013	$	1,800

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net revenue:
Products	$ 7,649	$ 8,585	$ 13,701	$ 16,091
Support, maintenance and subscription services	13,775	12,881	27,594	25,755
Professional services	4,894	3,380	8,769	6,700
Total net revenue	26,318	24,846	50,064	48,546
Cost of goods sold:
Products	3,502	3,285	7,001	6,908
Support, maintenance and subscription services	2,961	2,578	6,091	4,847
Professional services	3,186	2,395	5,629	4,566
Total net cost of goods sold	9,649	8,258	18,721	16,321
Gross profit	16,669	16,588	31,343	32,225
Gross Profit Ratio	63.30%	66.80%	62.60%	66.40%
Operating expenses:
Product development	6,191	6,714	12,056	12,946
Sales and marketing	3,825	4,068	7,710	7,035
General and administrative	6,079	5,065	11,196	9,694
Depreciation of fixed assets	532	513	1,146	994
Amortization of intangibles	594	794	2,377	1,588
Asset impairments and related charges	0	18	0	18
Restructuring, severance and other charges	448	562	818	617
Legal settlements	54	0	203	0
Operating loss	(1,054)	(1,146)	(4,163)	(667)
Other (income) expenses:
Interest income	(21)	(20)	(74)	(33)
Interest expense	14	45	27	106
Other (income) expense, net	(1)	39	(46)	11
Loss before income taxes	(1,046)	(1,210)	(4,070)	(751)
Income tax expense (benefit)	81	100	(714)	(230)
Loss from continuing operations	(1,127)	(1,310)	(3,356)	(521)
Income from discontinued operations, net of taxes	0	21,762	0	22,289
Net (loss) income	$ (1,127)	$ 20,452	$ (3,356)	$ 21,768
Weighted Average Number of Shares Outstanding, Basic	22,340	22,125
Weighted average shares outstanding:
Loss per share from continuing operations	$ (0.05)	$ (0.06)	$ (0.15)	$ (0.02)
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic Share	$ 0.00	$ 0.98	$ 0.00	$ 1.01
Earnings Per Share, Basic	$ (0.05)	$ 0.92	$ (0.15)	$ 0.99
Weighted Average Number of Shares Outstanding, Diluted	22,340	22,125	22,332	22,075
Weighted Average Number of Shares Outstanding Diluted [Abstract]
Income (Loss) from Continuing Operations, Per Diluted Share	$ (0.05)	$ (0.06)	$ (0.15)	$ (0.02)
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Diluted Share	$ 0.00	$ 0.98	$ 0.00	$ 1.01
Earnings Per Share, Diluted	$ (0.05)	$ 0.92	$ (0.15)	$ 0.99

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Intangible Assets

6 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets and Software Development Costs

The following table summarizes our intangible assets and software development costs:

	September 30, 2014									March 31, 2014
	Gross						Net			Gross						Net
	carrying			Accumulated			carrying			carrying			Accumulated			carrying
(In thousands)	amount			amortization			amount			amount			amortization			amount
Amortized intangible assets:
Customer relationships	$	10,775		$	(10,530	)	$	245		$	10,775		$	(10,080	)	$	695
Non-competition agreements	2,700			(2,604		)	96			2,700			(2,473		)	227
Developed technology	10,660			(10,216		)	444			10,660			(10,156		)	504
Patented technology	80			(80		)	—			80			(80		)	—
	24,215			(23,430		)	785			24,215			(22,789		)	1,426
Unamortized intangible assets:
Trade names	10,100			N/A			10,100			10,100			N/A			10,100
Accumulated impairment	(900		)	N/A			(900		)	(900		)	N/A			(900		)
	9,200			N/A			9,200			9,200			N/A			9,200
Total intangible assets	$	33,415		$	(23,430	)	$	9,985		$	33,415		$	(22,789	)	$	10,626
Software development costs	$	15,561		$	(820	)	$	14,741		$	14,587		$	(270	)	$	14,317
Project expenditures not yet in use	19,250			—			19,250			12,397			—			12,397
Accumulated impairment	(9,493		)	N/A			(9,493		)	(9,493		)	N/A			(9,493		)
Total software development costs	$	25,318		$	(820	)	$	24,498		$	17,491		$	(270	)	$	17,221

The following table summarizes our remaining estimated amortization expense relating to in service intangible assets and software development costs.

	Estimated
	Amortization
(In thousands)	Expense
Fiscal year ending March 31,
2015	$	1,003
2016	1,335
2017	1,335
2018	1,335
2019	959
2020	65
Total	$	6,032

Amortization expense relating to intangible assets was $0.3 million for the three months ended September 30,2014, and 2013, and $0.6 million for the six months endedSeptember 30, 2014 and 2013. Amortization expense relating to developed technology software intangible assets was $0.3 million for the three months ended September 30,2014, and $0.6 million and $0.1 million for the six months endedSeptember 30, 2014 and 2013, respectively. Amortization expense for acquired and internally developed intangibles that are related to products held for sale is included in Products cost of goods sold and amortization expense for acquired and internally developed intangibles that are related to internal use assets is included in operating expenses as amortization of intangibles.

Capitalized software development costs that are internally developed are carried on our balance sheet at net realizable value, net of accumulated amortization. We capitalized approximately $3.9 million and $2.9 million during the three months ended September 30,2014 and 2013, respectively, and $7.8 million and $5.8 million during the six months endedSeptember 30, 2014 and 2013, respectively.

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Restructuring and Related Charges

6 Months Ended

Sep. 30, 2014

Restructuring Charges [Abstract]

Restructuring and Related Charges

Restructuring Charges

We recognize restructuring charges when a plan that materially changes the scope of our business or the manner in which that business is conducted is adopted and communicated to the impacted parties, and the expenses have been incurred or are reasonably estimable.

Fiscal 2015 Restructuring Activity

In the second quarter of fiscal 2015, we implemented restructuring actions to better align product development, sales and marketing and general and administrative functions with our company strategy and to reduce operating costs. To date, we have recorded $0.2 million in restructuring charges related to the fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of September 30, 2014, we had a remaining liability of approximately $0.2 million recorded for the fiscal 2015 restructuring activity.

Fiscal 2014 Restructuring Activity

In the first quarter of fiscal 2014, we announced restructuring actions to better align corporate functions and to reduce operating costs, following the sale of RSG. In addition, in the fourth quarter of fiscal 2014, we initiated a restructuring plan to maximize sales effectiveness and more closely align sales and marketing efforts for targeted vertical growth, new product launches, and marketing alliances, and to shift development resources to the next generation products. To date, we have recorded $1.6 million in restructuring charges related to the fiscal 2014 restructuring activity, of which $1.2 million was recorded in fiscal 2014. We recorded approximately $0.4 million in restructuring charges during the first quarter of fiscal 2015, comprised of severance and other employee related benefits. As of September 30, 2014, we had a remaining liability of approximately $0.1 million recorded for the fiscal 2014 restructuring activity.

Following is a reconciliation of the beginning and ending balances of the restructuring liability:

	Balance at							Balance at
	March 31,							September 30,
(In thousands)	2014		Provision		Payments			2014
Fiscal 2015 Restructuring Plan:
Severance and employment costs	$	—	$	178	$	—		$	178
Fiscal 2014 Restructuring Plan:
Severance and employment costs	$	534	$	370	$	(823	)	$	81
Total restructuring costs	$	534	$	548	$	(823	)	$	259

The remaining severance and other employment costs of approximately $0.3 million will be paid in fiscal 2015.

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Intangible Assets (Tables)

6 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

The following table summarizes our intangible assets and software development costs:

	September 30, 2014									March 31, 2014
	Gross						Net			Gross						Net
	carrying			Accumulated			carrying			carrying			Accumulated			carrying
(In thousands)	amount			amortization			amount			amount			amortization			amount
Amortized intangible assets:
Customer relationships	$	10,775		$	(10,530	)	$	245		$	10,775		$	(10,080	)	$	695
Non-competition agreements	2,700			(2,604		)	96			2,700			(2,473		)	227
Developed technology	10,660			(10,216		)	444			10,660			(10,156		)	504
Patented technology	80			(80		)	—			80			(80		)	—
	24,215			(23,430		)	785			24,215			(22,789		)	1,426
Unamortized intangible assets:
Trade names	10,100			N/A			10,100			10,100			N/A			10,100
Accumulated impairment	(900		)	N/A			(900		)	(900		)	N/A			(900		)
	9,200			N/A			9,200			9,200			N/A			9,200
Total intangible assets	$	33,415		$	(23,430	)	$	9,985		$	33,415		$	(22,789	)	$	10,626
Software development costs	$	15,561		$	(820	)	$	14,741		$	14,587		$	(270	)	$	14,317
Project expenditures not yet in use	19,250			—			19,250			12,397			—			12,397
Accumulated impairment	(9,493		)	N/A			(9,493		)	(9,493		)	N/A			(9,493		)
Total software development costs	$	25,318		$	(820	)	$	24,498		$	17,491		$	(270	)	$	17,221

Schedule of remaining estimated amortization expense

The following table summarizes our remaining estimated amortization expense relating to in service intangible assets and software development costs.

	Estimated
	Amortization
(In thousands)	Expense
Fiscal year ending March 31,
2015	$	1,003
2016	1,335
2017	1,335
2018	1,335
2019	959
2020	65
Total	$	6,032

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Marketable Securities

Marketable Securities

Marketable securities can consist of certificates of deposits, commercial paper, corporate bonds and other investments with established commercial banking institutions with readily determinable fair values and stated maturities of greater than three months.  We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such designation at each balance sheet date.  Our marketable securities are classified as available for sale and have original maturity dates from 90 to 365 days.

Adopted and Recently Issued Accounting Pronouncements

Adopted and Recently Issued Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements - Going Concern, which provides guidance on disclosure of uncertainties about an entity’s ability to continue as a going concern. This is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or related disclosures.

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which provides guidance requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2015. We are currently evaluating the impact that the adoption of ASU 2014-12 will have on our consolidated financial statements or related disclosures.

In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which converges the FASB and the International Accounting Standards Board standard on revenue recognition. Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2016. We are currently evaluating the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements or related disclosures.

In April 2014, FASB issued ASU No. 2014-08, Presentation of Financial Statements and Property, Plant and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which requires only disposals representing a strategic shift in operations that have a major effect on operations and financial results to be presented as discontinued operations. The guidance also requires expanded financial disclosures about discontinued operations and significant disposals that do not qualify as discontinued operations. This is effective for the fiscal years and interim reporting periods beginning after December 15, 2014. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or related disclosures.

In July 2013, FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 clarifies guidance and eliminates diversity in practice on the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This new guidance is effective on a prospective basis for fiscal years and interim reporting periods within those years, beginning after December 15, 2013. We adopted the provisions of ASU 2013-11 beginning April 1, 2014. The adoption of the ASU did not have any impact on our financial statements.

Management continually evaluates the potential impact, if any, of all recent accounting pronouncements on our consolidated financial statements or related disclosures and, if significant, makes the appropriate disclosures required by such new accounting pronouncements.

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Commitments and Contingencies

6 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

Agilysys is the subject of various threatened or pending legal actions and contingencies in the normal course of conducting its business. We provide for costs related to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on our future results of operations and liquidity cannot be predicted because any such effect depends on future results of operations and the amount or timing of the resolution of such matters. While it is not possible to predict with certainty, management believes that the ultimate resolution of such individual or aggregated matters will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

On April 6, 2012, Ameranth, Inc. filed a complaint against us for patent infringement in the United States District Court for the Southern District of California. The complaint alleges, among other things, that point-of-sale and property management and other hospitality information technology products, software, components and/or systems sold by us infringe three patents owned by Ameranth purporting to cover generation and synchronization of menus, including restaurant menus, event tickets, and other products across fixed, wireless and/or internet platforms as well as synchronization of hospitality information and hospitality software applications across fixed, wireless and internet platforms. The complaint seeks monetary damages, injunctive relief, costs and attorneys' fees. At this time, we are not able to predict the outcome of this lawsuit, or any possible monetary exposure associated with the lawsuit.  However, we dispute the allegations of wrongdoing and are vigorously defending ourselves in this matter. The litigation is currently stayed pending a covered business method review by the United States Patent and Trademark Office of a subset of the patents alleged to be infringed by Agilysys. The covered business method review was instituted on March 26, 2014, and must be completed within one year of institution, except that the time to complete the review may be extended by up to six months for good cause.

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Additional Balance Sheet Information

6 Months Ended

Sep. 30, 2014

Balance Sheet Related Disclosures [Abstract]

Additional Balance Sheet Information

Additional Balance Sheet Information

Additional information related to the Condensed Consolidated Balance Sheets is as follows:

(In thousands)	September 30, 2014		March 31, 2014
Accrued liabilities:
Salaries, wages, and related benefits	$	5,775	$	8,308
Other taxes payable	1,181		1,122
Accrued legal settlements	70		1,630
Restructuring liabilities	259		534
Professional fees	808		674
Software license fees	—		500
Deferred rent	353		477
Contingent consideration	180		127
Other	929		860
Total	$	9,555	$	14,232
Other non-current liabilities:
Uncertain tax positions	$	1,533	$	2,440
Deferred rent	1,742		1,755
Contingent consideration	1,557		1,612
Other	358		358
Total	$	5,190	$	6,165

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Income Taxes

6 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table compares our income tax benefit and effective tax rates for the three and six months endedSeptember 30, 2014 and 2013:

	Three months ended						Six months ended
	September 30,						September 30,
(Dollars in thousands)	2014			2013			2014			2013
Income tax expense (benefit)	$	81		$	100		$	(714	)	$	(230	)
Effective tax rate	(7.7		)%	(8.3		)%	17.5		%	30.6		%

For the three and six months endedSeptember 30, 2014, the effective tax rate was different than the statutory rate due primarily to the decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, and other U.S. permanent book to tax differences.

For the three and six months endedSeptember 30, 2013, the effective tax rate was different than the statutory rate due primarily to the intra-period tax allocation rules associated with the discontinued operations. Other items affecting the rate include a decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, and other U.S. permanent book to tax differences.

We have recorded a valuation allowance offsetting substantially all of our deferred tax assets. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. Because of our losses in prior periods, management believes that it is more-likely-than-not that we will not realize the benefits of these deductible differences.

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(Loss) Earnings Per Share

6 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

(Loss) Earnings per Share

The following data shows the amounts used in computing (loss) earnings per share and the effect on income and the weighted average number of shares of dilutive potential common shares.

	Three months ended						Six months ended
	September 30,						September 30,
(In thousands, except per share data)	2014			2013			2014			2013
Numerator:
Loss from continuing operations	$	(1,127	)	$	(1,310	)	$	(3,356	)	$	(521	)
Income from discontinued operations	—			21,762			—			22,289
Net (loss) income	$	(1,127	)	$	20,452		$	(3,356	)	$	21,768
Denominator:
Weighted average shares outstanding - basic	22,340			22,125			22,332			22,075
Weighted average shares outstanding - diluted	22,340			22,125			22,332			22,075
(Loss) earnings per share - basic:
Loss per share from continuing operations	$	(0.05	)	$	(0.06	)	$	(0.15	)	$	(0.02	)
Income per share from discontinued operations	—			0.98			—			1.01
Net (loss) income per share	$	(0.05	)	$	0.92		$	(0.15	)	$	0.99
(Loss) earnings per share - diluted:
Loss per share from continuing operations	$	(0.05	)	$	(0.06	)	$	(0.15	)	$	(0.02	)
Income per share from discontinued operations	$	—		$	0.98		$	—		$	1.01
Net (loss) income per share	$	(0.05	)	$	0.92		$	(0.15	)	$	0.99
Anti-dilutive stock options, SSARs, restricted shares and performance shares	1,467			1,406			1,316			1,502

Basic earnings (loss) per share is computed as net income available to common shareholders divided by the weighted average basic shares outstanding. The outstanding shares used to calculate the weighted average basic shares excludes 470,956 and 283,596 of restricted shares and performance shares at September 30, 2014 and 2013, respectively, as these shares were issued but were not vested and, therefore, not considered outstanding for purposes of computing basic earnings per share at the balance sheet dates.

Diluted earnings (loss) per share includes the effect of all potentially dilutive securities on earnings per share. We have stock options, stock-settled appreciation rights (SSARs), unvested restricted shares and unvested performance shares that are potentially dilutive securities. When a loss is reported, the denominator of diluted earnings per share cannot be adjusted for the dilutive impact of share-based compensation awards because doing so would be anti-dilutive. Therefore, for the three months ended September 30, 2014, basic weighted-average shares outstanding were used in calculating the diluted net loss per share.

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Restructuring and Related Charges (Details) (USD $)	6 Months Ended
	Sep. 30, 2014
Restructuring Reserve [Roll Forward]
Balance at March 31, 2013	$ 534,000
Provision	548,000
Payments for restructuring, severance and other charges	(823,000)
Balance at December 31, 2013	259,000
Severance and employment costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Future Payment, Year Two	200,000
Severance and employment costs [Member] | Restructuring Plan Fiscal Two Zero One Five [Member]
Restructuring Reserve [Roll Forward]
Balance at March 31, 2013	0
Provision	178,000
Payments for restructuring, severance and other charges	0
Balance at December 31, 2013	178,000
Severance and employment costs [Member] | Restructuring Plan Fiscal Two Zero One Four [Member]
Restructuring Reserve [Roll Forward]
Balance at March 31, 2013	534,000
Provision	370,000
Payments for restructuring, severance and other charges	(823,000)
Balance at December 31, 2013	$ 81,000

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Fair Value Measurements (Details 2) (Contingent Consideration [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2014	Mar. 31, 2014
Contingent Consideration [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		$ 0	$ 1,737	$ 1,739
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Foreign Currency Translation Adjustments	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Amortization of Intangibles	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Provisions	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Activity, Payments, Other Charges	(1,800)	(2)
Balance at end of period	$ 1,800	$ 1,800	$ 1,737	$ 1,739

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Discontinued Operations (Tables)

6 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Income from discontinued operations

Income from discontinued operations was comprised of the following:

	Three months ended			Six months ended
	September 30,			September 30,
(In thousands)		2013			2013
Discontinued operations:
Net revenue		$	1,733		$	26,848
Income from operations		36			781
Other expense, net		44			(9		)
Gain on sale		23,135			23,135
Income before tax from discontinued operations		23,215			23,907
Income tax expense		1,453			1,618
Income from discontinued operations		$	21,762		$	22,289

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(Loss) Earnings per Share (Tables)

6 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Computing (loss) earnings per share and the effect on income and the weighted average number of dilutive potential common shares

The following data shows the amounts used in computing (loss) earnings per share and the effect on income and the weighted average number of shares of dilutive potential common shares.

	Three months ended						Six months ended
	September 30,						September 30,
(In thousands, except per share data)	2014			2013			2014			2013
Numerator:
Loss from continuing operations	$	(1,127	)	$	(1,310	)	$	(3,356	)	$	(521	)
Income from discontinued operations	—			21,762			—			22,289
Net (loss) income	$	(1,127	)	$	20,452		$	(3,356	)	$	21,768
Denominator:
Weighted average shares outstanding - basic	22,340			22,125			22,332			22,075
Weighted average shares outstanding - diluted	22,340			22,125			22,332			22,075
(Loss) earnings per share - basic:
Loss per share from continuing operations	$	(0.05	)	$	(0.06	)	$	(0.15	)	$	(0.02	)
Income per share from discontinued operations	—			0.98			—			1.01
Net (loss) income per share	$	(0.05	)	$	0.92		$	(0.15	)	$	0.99
(Loss) earnings per share - diluted:
Loss per share from continuing operations	$	(0.05	)	$	(0.06	)	$	(0.15	)	$	(0.02	)
Income per share from discontinued operations	$	—		$	0.98		$	—		$	1.01
Net (loss) income per share	$	(0.05	)	$	0.92		$	(0.15	)	$	0.99
Anti-dilutive stock options, SSARs, restricted shares and performance shares	1,467			1,406			1,316			1,502

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Mar. 31, 2014
Liabilities:
Contingent consideration — current	$ 180	$ 127
Contingent consideration — non-current	1,557	1,612
Recorded Value [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Corporate-owned life insurance — current		1,989
Corporate-owned life insurance — non-current	2,419	2,371
Liabilities:
Contingent consideration — current	180	127
Contingent consideration — non-current	1,557	1,612
Active markets for identical assets or liabilities (Level 1) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Corporate-owned life insurance — non-current	0	0
Liabilities:
Contingent consideration — current	0
Contingent consideration — non-current	0
Quoted prices in similar instruments and observable inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Corporate-owned life insurance — non-current	0	0
Liabilities:
Contingent consideration — current	0
Contingent consideration — non-current	0
Active markets for unobservable inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Corporate-owned life insurance — current		1,989
Corporate-owned life insurance — non-current	2,419	2,371
Liabilities:
Contingent consideration — current	180	127
Contingent consideration — non-current	$ 1,557	$ 1,612

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(Loss) Earnings per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Numerator [Abstract]
Loss from continuing operations	$ (1,127)	$ (1,310)	$ (3,356)	$ (521)
Income from discontinued operations, net of taxes	0	21,762	0	22,289
Net (loss) income	$ (1,127)	$ 20,452	$ (3,356)	$ 21,768
Denominator [Abstract]
Weighted average shares outstanding - basic	22,340	22,125
Weighted Average Number of Shares Outstanding, Basic and Diluted			22,332	22,075
Weighted average shares outstanding - diluted	22,340	22,125	22,332	22,075
Earnings Per Share, Basic [Abstract]
Loss per share from continuing operations	$ (0.05)	$ (0.06)	$ (0.15)	$ (0.02)
Income (Loss) from Continuing Operations, Per Basic and Diluted Share			$ (0.15)	$ (0.02)
Income per share from discontinued operations	$ 0.00	$ 0.98	$ 0.00	$ 1.01
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic and Diluted Share			$ 0.00
Net (loss) income per share	$ (0.05)	$ 0.92	$ (0.15)	$ 0.99
Earnings Per Share, Basic and Diluted			$ (0.15)	$ 0.99
Earnings Per Share, Diluted [Abstract]
Loss per share from continuing operations	$ (0.05)	$ (0.06)	$ (0.15)	$ (0.02)
Income per share from discontinued operations	$ 0.00	$ 0.98	$ 0.00	$ 1.01
Net (loss) income per share	$ (0.05)	$ 0.92	$ (0.15)	$ 0.99
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,467	1,406	1,316	1,502

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Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (1,127)	$ 20,452	$ (3,356)	$ 21,768
Other comprehensive (loss) income, net of tax:
Unrealized foreign currency translation adjustments	(1)	133	(4)	184
Unrealized loss on sale of securities	(1)	0	(5)	0
Total comprehensive (loss) income	$ (1,129)	$ 20,585	$ (3,365)	$ 21,952

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Discontinued Operations

6 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

UK Entity - Fiscal 2014

In March 2014, we completed the sale of our UK entity to Verteda Limited (Verteda), a U.K. based company, for total consideration of approximately $0.6 million, comprised of $0.7 million in cash and a receivable due to Agilysys from Verteda of $0.8 million, net of cash on hand of $0.9 million. We received $0.3 million in cash during the first half of fiscal 2015, resulting in a remaining receivable of $0.5 million. We expect to receive the remainder of this balance within fiscal 2015. In connection with the sale, we have entered into a multi-year distribution agreement whereby Verteda will distribute certain Agilysys products within the U.K. We will continue to manage all property management system accounts as well as key global accounts in the EMEA market.

Sale of Assets of RSG - Fiscal 2014

In July 2013, we completed the sale of our RSG business to Kyrus Solutions, Inc. (Kyrus), an affiliate of Clearlake Capital Group, L.P., for total consideration of approximately $37.6 million in cash, including a working capital adjustment of $3.1 million. Upon the close of the transaction, the aggregate purchase price was reduced by fees of approximately $1.6 million for transaction related costs, resulting in net proceeds received of approximately $36.0 million. In addition to the purchase agreement, we entered into a transition services agreement (TSA) with Kyrus, under which we provided certain transitional administrative and support services to Kyrus through January 31, 2014.

The sales of our RSG business and UK entity each represented a disposal of a component of an entity. As such, the operating results of RSG and the UK entity have been reported as a component of discontinued operations in the Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows for the three months endedSeptember 30, 2013. In addition, the assets and liabilities of RSG and the UK entity have been classified as discontinued operations in our Condensed Consolidated Balance Sheet as of September 30, 2013.

Components of Results of Discontinued Operations

Income from discontinued operations was comprised of the following:

	Three months ended			Six months ended
	September 30,			September 30,
(In thousands)		2013			2013
Discontinued operations:
Net revenue		$	1,733		$	26,848
Income from operations		36			781
Other expense, net		44			(9		)
Gain on sale		23,135			23,135
Income before tax from discontinued operations		23,215			23,907
Income tax expense		1,453			1,618
Income from discontinued operations		$	21,762		$	22,289

Income tax expense recorded during the three months and six months ended September 30, 2013 is due to intra-period tax allocation rules associated with discontinued operations.

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Share-based Compensation (Tables)

6 Months Ended

Sep. 30, 2014

Share-based Compensation [Abstract]

Summary of share-based compensation expense for options

The following table summarizes the share-based compensation expense for options, SSARs, restricted and performance awards included in the Condensed Consolidated Statements of Operations:

	Three months ended				Six months ended
	September 30,				September 30,
(In thousands)	2014		2013		2014		2013
Product development	$	242	$	215	$	409	$	356
Sales and marketing	12		37		32		50
General and administrative	448		265		626		476
Total share-based compensation expense	702		517		1,067		882

Activity related stock options award

The following table summarizes the activity during the six months endedSeptember 30, 2014 for stock options awarded under the 2006 Plan and the 2000 Stock Incentive Plan:

	Number of Options		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
(In thousands, except share and per share data)			(per share)		(in years)
Outstanding at April 1, 2014	627,500		$	15.26
Granted	—		—
Exercised	(15,000	)	13.76
Cancelled/expired	(30,000	)	13.11
Outstanding and exercisable at September 30, 2014	582,500		$	15.41	1.6	$	—

Activity related SSARs award

The following table summarizes the activity during the six months endedSeptember 30, 2014 for SSARs awarded under the 2011 Plan:

	Number of Rights		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
(In thousands, except share and per share data)			(per right)		(in years)
Outstanding at April 1, 2014	320,236		$	9.05
Granted	113,900		14.43
Exercised	(16,078	)	7.75
Forfeited	(10,668	)	7.46
Expired	—		—
Outstanding at September 30, 2014	407,390		$	10.64	5.3	$	806
Exercisable at September 30, 2014	179,078		$	8.54	4.4	$	590

Activity related to restricted shares awarded by the Company

The following table summarizes the activity during the six months endedSeptember 30, 2014 for restricted shares awarded under the 2011 Plan:

	Number of Shares		Weighted- Average Grant- Date Fair Value
			(per share)
Outstanding at April 1, 2014	139,501		$	10.72
Granted	344,443		13.90
Vested	(16,840	)	8.64
Forfeited	(13,876	)	13.15
Outstanding at September 30, 2014	453,228		$	13.13

Performance shares awarded by the Company

The following table summarizes the activity during the six months endedSeptember 30, 2014 for performance shares awarded under the 2011 Plan:

	Number of Shares	Weighted- Average Grant- Date Fair Value
		(per share)
Outstanding at April 1, 2014	17,728	$	8.64
Granted	—	—
Outstanding at September 30, 2014	17,728	$	8.64

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Intangible Assets (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Software development costs, net	$ 24,498,000		$ 24,498,000		$ 17,221,000
Capitalized Software Development Costs	3,900,000	2,900,000	7,800,000	5,800,000
Amortization of intangible assets, excluding amortization of internal use software	300,000	300,000	600,000	600,000
Finite-lived intangible assets, net	785,000		785,000		1,426,000
Developed Technology Internal [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of software development	$ 300,000		$ 600,000	$ 100,000

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Acquisitions (Tables)

6 Months Ended

Sep. 30, 2014

Dining Ventures, Inc. [Member]

Business Acquisition [Line Items]

Fair Value of Assets Acquired and Liabilities Assumed

The following is a summary of the fair values of the assets acquired in the acquisition:

(In thousands)
Goodwill	$	2,464
Developed technology	1,286
Total assets acquired	$	3,750

Finite-Lived Intangible Assets Acquired

The following is a summary of the intangible asset acquired and the weighted-average useful life over which it will be amortized.

			Weighted-average
	Purchased assets		useful life
Developed technology	$	1,286	5 years

TimeManagement Corporation [Member]

Business Acquisition [Line Items]

Fair Value of Assets Acquired and Liabilities Assumed

The following is a summary of the fair values of the assets acquired and liabilities assumed from the acquisition:

(In thousands)
Current assets	$	327
Property and equipment	88
Goodwill	3,444
Developed technology	605
Total assets acquired	4,464
Total liabilities assumed (all current)	914
Net assets acquired	$	3,550

Finite-Lived Intangible Assets Acquired

The following is a summary of the intangible asset acquired and the weighted-average useful life over which it will be amortized.

			Weighted-average
	Purchased assets		useful life
Developed technology	$	605	5 years