10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended March 31, 2015
or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For 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	45,202
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (770) 810-7800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Shares, without par value	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ¨     No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ¨     No þ

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 þ  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 ¨ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

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 þNon-accelerated filer ¨Smaller reporting company ¨

(Do not check if a smaller reporting company)

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

The aggregate market value of Common Shares held by non-affiliates as of June 30, 2014 was $208,096,430.

As of May 29, 2015, 22,770,057 shares of the registrant's common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement to be used in connection with its 2015 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.

AGILYSYS, INC.

Annual Report on Form 10-K

Year Ended March 31, 2015

Table of Contents

		Page
	PART I	4
ITEM 1.	Business	4
ITEM 1A.	Risk Factors	12
ITEM 1B.	Unresolved Staff Comments	17
ITEM 2.	Properties	17
ITEM 3.	Legal Proceedings	17
ITEM 4.	Mine Safety Disclosures	17
	PART II	18
ITEM 5.	Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	18
ITEM 6.	Selected Financial Data	20
ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	39
ITEM 8.	Financial Statements and Supplementary Data	40
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	72
ITEM 9A.	Controls and Procedures	72
ITEM 9B.	Other Information	73
	PART III	73
ITEM 10.	Directors, Executive Officers and Corporate Governance	73
ITEM 11.	Executive Compensation	73
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	73
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	73
ITEM 14.	Principal Accountant Fees and Services	73
	PART IV	74
ITEM 15.	Exhibits and Financial Statements	74
SIGNATURES		75

2

Forward Looking Information

This Annual 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 this Annual Report. 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.

3

Part I

Item 1. Business.

Overview

Agilysys is a leading technology company that provides innovative software for point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document management and mobile and wireless solutions and services to the hospitality industry. Our solutions and services allow property managers to better connect, interact and transact with their customers and enhance their customer relationships by streamlining operations, improving efficiency, increasing guest recruitment and wallet share, and enhancing the overall guest experience. We serve 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.

We operate throughout North America, Europe and Asia, with corporate services located in Alpharetta, GA, and offices in Singapore, Hong Kong and Malaysia.

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 the Condensed Consolidated Statement of Cash Flows for the twelve months ended March 31, 2014 and 2013.

Our principal executive offices are located at 425 Walnut Street, Suite 1800, Cincinnati, Ohio, 45202 and our corporate services are located at 1000 Windward Concourse, Suite 250, Alpharetta, Georgia, 30005.

Reference herein to any particular year or quarter refers to periods within our fiscal year ended March 31. For example, fiscal 2015 refers to the fiscal year ended March 31, 2015.

History and Significant Events

Organized in 1963 as Pioneer-Standard Electronics, Inc., an Ohio corporation, we began operations as a distributor of electronic components and, later, enterprise computer solutions. Exiting the former in fiscal 2003 with the sale of our Industrial Electronic Division, we used the proceeds to reduce debt, fund growth of our enterprise solutions business and acquire businesses focused on higher-margin and more specialized solutions for the hospitality and retail industries. At the same time, we changed our name to Agilysys, Inc.

In fiscal 2004, we acquired Kyrus Corporation and became the leading provider of IBM retail solutions and services in the supermarket, chain drug, general retail, and hospitality segments. In that same year, the acquisition of Inter-American Data, Inc. allowed us to become the leading developer and provider of technology solutions for property and inventory management in the casino and resort industries.

In calendar 2007, we divested KeyLink Systems and exited the enterprise computer distribution business. We used the proceeds from that sale to return cash to shareholders and fund a number of acquisitions that broadened our solutions and capabilities portfolios. We acquired InfoGenesis and Visual One Systems Corp. in calendar 2007, significantly expanding our specialized offerings to the hospitality industry through enterprise-class, POS and software solutions tailored for a variety of applications in cruise, golf, spa, gaming, lodging, resort, and catering. These offerings feature highly intuitive, secure and robust solutions, easily scalable across multiple departments or property locations. In fiscal 2008, we began reporting three primary operating segments: Hospitality Solutions Group (HSG), Retail Solutions Group (RSG) and Technology Solutions Group (TSG).

In fiscal 2012, we sold our TSG segment and restructured our business model to focus on higher-margin, profitable growth opportunities in the hospitality and retail sectors. We also reduced our real-estate footprint and lowered overhead costs by relocating corporate services from Solon, Ohio to Alpharetta, Georgia, thus moving our senior management team closer to our operating units.

On June 10, 2013, we acquired the assets of TimeManagement Corporation, a privately-owned Minneapolis-based provider of enterprise-wide software and service solutions that streamline workforce management environments for hospitality operators.

4

On July 1, 2013, we completed the sale of our RSG business to Kyrus Solutions, Inc. (Kyrus), an affiliate of Clearlake Capital Group, L.P. Following completion of the transaction, our business focused exclusively on hospitality solutions and the growth opportunities in the hospitality market.

On March 31, 2014, we completed the sale of our United Kingdom business entity (UK entity) to Verteda Limited (Verteda), led by the Company’s former European management team. In connection with the sale, we have entered into a multi-year distribution agreement, whereby Verteda distributes certain Agilysys products within the U.K. marketplace. We continue to manage all property management system accounts as well as key global accounts in the EMEA market.

Today, we are focused on providing state-of-the-art, end-to-end solutions that enhance guest experiences and allow our customers to promote their respective brands. We help our customers win the guest recruitment battle and, in turn, grow revenue, reduce costs and increase efficiency. This is accomplished by developing and deploying intuitive solutions that increase speed and accuracy, thereby enabling more effective management, intelligent upselling, reduced shrinkage, improved brand recognition and better control of the customer relationship. Our strategy is to increase the proportion of revenue we derive from ongoing support and maintenance agreements, software as a subscription services, cloud applications and professional services.

Products, Support and Professional Services

We are a leading developer and marketer of software enabled solutions and services to the hospitality industry, including: hardware and software products; support, maintenance and subscription services; and, professional services. Areas of specialization are POS, property management, inventory and procurement, workforce management, and mobile and wireless solutions designed to streamline operations, improve efficiency and enhance the guest experience.

We present revenue and costs of goods sold in three categories:

• Products (hardware and software)

• Support, maintenance and subscription services

• Professional services

Total revenue from continuing operations for these three specific areas is as follows:

	Year ended March 31,
(In thousands)	2015		2014		2013
Products	$	31,846	$	34,629	$	31,030
Support, maintenance and subscription services	56,013		53,169		49,110
Professional services	15,655		13,463		13,868
Total	$	103,514	$	101,261	$	94,008

Products:

The hospitality industry has long been focused on operating an end-to-end business, but the technology vendors that serviced the industry have been focused on product-centric solutions that make use of a high number of software modules and operating silos. We have evolved our approach to the industry to an integrated "platform" centric solutions for Lodging, Food & Beverage and Payments applications that looks to leverage the entire business, by investing in the development of an web services oriented architecture enterprise platform. Our rGuest™ platform is aimed at transitioning our product and services offerings to better address the needs of hospitality operators as they focus on building better connections with guests, pre-, during and post-visit. The rGuest platform facilitates an end-to-end solution that helps our customers improve guest services, increase top-line performance and reduce operating costs, which leads to opportunities for higher profitability. Our next-generation of products and services are aimed at helping hospitality operators recruit customers into their facilities, increase their wallet share from each customer and improve the overall guest experience from the initial customer touch point through the post-visit experience.

Our proprietary product suite is comprised of:

5

The rGuest platform underlies our industry leading hospitality solutions that are being introduced to operators of all sizes and with varying needs. The rGuest platform is designed to run as a Software as a Service (“SaaS”)-based platform on the public cloud, private cloud, on-premise, or in a hybrid configuration where the infrastructure may be above premise but the data resides on premise. rGuest’s architecture seamlessly functions as well for a multi-property customer as it does for a single property.

The rGuest enterprise platform helps operators more efficiently manage their business and grow their sales by:

• Identifying and tracking guest profile and behavior so that it may be used to create effective loyalty programs and the right promotions and offers to ensure the best guest experience while ensuring the property extracts the maximum wallet share from each customer;

• Enabling historical analysis of data;

• Allowing for real-time management through mobile and web interfaces for immediate remediation of business and guest related issues;

• Creating a framework for core services for the delivery of business applications faster with the critical benefit of having fewer moving parts to manage;

• Ensuring that all new rGuest modules will be written on top of the rGuest platform to create a common look/feel, functions and usage paradigms and reduce the overhead of managing and learning multiple systems, and,

• Providing for easy integration with other hospitality management systems;

• Incorporating key infrastructure design elements such as global and multi-language support, regulatory compliance and security, including authentication, authorization, encryption, tokenization, handling of payment & PII information and overall application data and user security.

Our rGuest product suite is designed to maximize the insight and value available in “big data” by:

• Identifying the right data and determining how to best use it;

• Empowering users to be capable of both working with new technologies and of interpreting the data to find meaningful business insights;

• Creating data access and connectivity across the majority of customer touch points;

• Providing an IT platform that can adapt to changes in the landscape in an efficient manner;

• Working across functions organizational challenges and finding ways of collaborating across functions and businesses; and,

• Implementing the highest levels of security to ensure data protection

The rGuest platform currently includes the following in-market solutions:

Currently available in limited release, rGuest Stay is a guest-centric property management system that will help operators create a superior guest experience. Easy to learn and use, it’s built for the way operators want to run your business. rGuest Stay gathers everything operators need to manage critical property operations in one place-including reservations, front desk, guest services, housekeeping, and more. The net result is increased staff productivity, reduced operational cost and improved guest satisfaction.

rGuest Stay offers:

• Group room block management

• Room inventory

• Flexible rate management

• Reservations, including interfaces that accept reservations from online travel agencies and the hotel’s own website

• Guest service management, including check-in, check-out and in-house experience management

• Upselling and upgrades of reservations during check-in

• Guest, company and travel agent profile management

• Folio management and charge routing

• Housekeeping

• Accounts receivable

• Integrated credit card processing using tokenization and validated Point-to-Point Encryption (P2PE) technology

6

rGuest Seat is a guest centric table, reservation and wait list management solution that helps restaurants increase revenue by retaining repeat customers and providing a superior guest experience. Online dining reservations enable restaurants to increase bookings by allowing diners to reserve a table through the restaurant’s website or mobile app. Wait list management optimizes the restaurant’s use of tables and resources, helping staff estimate wait times more accurately and avoiding lost or dissatisfied customers.

rGuest Seat offers:

• Streamlined online reservations increase guest bookings without tying staff up on the phone

• Wait list automation to accurately predict wait times and meet guest expectations

• Two way text communications with waiting guests

• Toggle between restaurants within peer group to get a complete view of the reservation or wait list status

• Accessibility of guest data based on their previous dining experiences to provide a much high level of guest service

• Library of reconfigurable reports can be accessed in real time or received through email at a scheduled delivery time

• Integrated POS automatically updates the status of the guest experience and imports valuable data about the guest

• Real-time table status visibility to minimize table turn times and keep restaurant operations and reservations running smoothly

rGuest Pay is our innovative payments gateway. rGuest Pay protects guests’ financial data and reduces risk by leveraging point-to-point encryption (P2PE) and tokenization with every credit card transaction. rGuest Pay Gateway leverages one of the first payment gateways in the world to receive official PCI-P2PE validation, allowing us to offer PCI cost and scope reduction that other providers cannot. These security benefits are built on top of a full-featured, enterprise-grade gateway that offers broad support for U.S. credit card processors and a wide variety of payment device options for every use-case, including countertop, pay-at-table, EMV, mobile tablet, and signature capture scenarios.

rGuest Pay offers:

• A full suite of credit card processing services

• Industry-leading payment security through tokenization and P2PE

• Future-proofed hardware capable of supporting EMV and NFC transactions

• Integration with 3rd Party application through a simple-to-use API

• Consolidated transaction reporting

• Comprehensive payment processor support

rGuest Analyze is a platform-based subscription data analysis service focused on the needs of the hospitality industry. It is a full business intelligence solution that is delivered through the cloud (SaaS). rGuest Analyze collects data from Agilysys point of sale and property management solutions and helps food & beverage and property operators gain critical insight into business operations and performance. Out-of-the-box analysis helps hospitality operators manage costs, minimize loss due to fraud, boost item sales, increase server productivity, occupancy, room revenue, and other profit enhancing capabilities.

rGuest Analyze offers:

• Cross-enterprise and centralized reporting across sites, venues and profit centers

• Slice-and-dice reporting without the need for IT/DBA resources immediately drives insight into food & beverage as well as lodging operations

• Out-of-the-box customizable reports provide insight into sales, revenue, server/cashier activity, discounts, tenders, ADR, RevPAR, and Occupancy

• Easy to learn, web-based reporting tool with simple drag-and-drop capabilities for fast data exploration and report generation

• Design, publish and disseminate executive level dashboards as easily as creating a word document with both web and mobile views

Going forward, Agilysys plans to introduce additional modules for the rGuest platform, including rGuest Buy.

7

As we move forward with a focus on selling the rGuest platform and modules, we are committed to providing our customers an upgrade and/or migration path from previously purchased Agilysys products to the new rGuest application.

Agilysys’ additional in market offerings for property management, point-of-sale, inventory procurement, workforce management, document management and activity booking product and services include:

Property Management Systems (“PMS”)

•

Agilysys Lodging Management System® (LMS) is web-enabled and runs 24/7 to automate every aspect of hotel operations in properties of 1,000 rooms or more. Its foundation expands to incorporate modules for sales and catering, activities scheduling, attraction ticketing and more.

•

Agilysys Visual One™ PMS is installed in hotels ranging from 50-1,500 rooms. For complex resorts that require an enterprise-wide system, Visual One provides an integrated solution with interfaces to leading global distribution systems (GDSs) and our other products.

• Agilysys Insight™ Mobile Manager is a mobile dashboard application that enables hotel managers to quickly view key property information - including arrivals and departures, VIPs, total guests, housekeeping, revenue and groups - from a mobile device. It is supported by iPad®, iPad mini and iPhone® mobile devices and integrates fully with the Agilysys LMS property management solution.

Point-of Sale

•

Agilysys InfoGenesis®™ POS is award-winning point-of-sale software that combines powerful reporting and configuration capabilities in the back office with a fast, intuitive and easy-to-use terminal application. The flexible system is easy to set up, and its scalable architecture enables customers to add workstations without having to build out expensive infrastructure. The system's detailed and high-quality reporting capabilities give insight into sales data and guest purchasing trends. Other features include packages and prix fixe menus, signature capture and multi-language capability. InfoGenesis POS is available as an on-premise solution or through a subscription service.

•

Agilysys InfoGenesis Flex is a mobility solution that offers full POS functionality on a Windows tablet, such as the Dell Venue 8 Pro. It provides a sleek, modern alternative to traditional POS installations and can be used as a slim fixed terminal or as a convertible simply by removing the tablet from its base.

•

Agilysys InfoGenesis®™ Mobile is a mobile POS solution that seamlessly integrates with Agilysys InfoGenesis POS software. The application is reliable and easy to learn, with a user interface that's simple to use and configure. Users can tap, drag or swipe using an intuitive multi-touch interface to create and tender checks. Orders are automatically sent to the kitchen, enabling faster service and increased table turns. InfoGenesis Mobile is a flexible, cost-effective tool that helps service teams become more efficient and productive. Simplified ordering and faster guest service provides a competitive edge in a crowded marketplace.

•

Agilysys MPOS is a handheld point-of-sale solution that integrates with InfoGenesis POS to enable guest service in any location.

•

Agilysys eMenu is an online ordering application that enables our customers to capitalize on the popularity of Web and kiosk ordering while maintaining their existing company brand and workflow.

•

Agilysys eCash takes traditional cashless payment and stored value card capabilities and integrates them directly with InfoGenesis POS, increasing consumers' payment options.

8

InfoGenesis POS, eMenu and eCash are available through traditional software licensing or via subscription.

Inventory and Procurement

•

Agilysys Eatec® provides core purchasing, inventory, recipe, forecasting, production and sales analysis functions and is unique in offering catering, restaurant, buffet management and nutrition modules in a single web-enabled solution.

•

Agilysys EatecTouch is an optional software applet that operates on any MicroSoft®Windows®-based POS terminal, providing users with access to the Eatec application from any terminal location.

•

Agilysys EatecPocket is a Microsoft Windows Mobile compatible application designed to work on a handheld wireless device, enabling users to perform inventory transactions. The software incorporates barcode scanner functionality for mobile updates of the database.

•

Agilysys Stratton Warren System (SWS) integrates with all leading financial and POS software products. The software manages the entire procurement process via e-commerce, from business development to the management of enterprise-wide backend systems and daily operations.

•

Agilysys SWS Direct is an add-on module for SWS that provides a convenient, efficient and intuitive shopping cart experience to SWS users. SWS Direct streamlines operations, provides enhanced bidding and request for pricing services, and offers supplier registration tools and self-service maintenance capabilities.

Eatec and Stratton Warren System solutions are available through traditional software licensing or via subscription.

Workforce Management

•

The Agilysys Workforce Management Solution™ (WMx®™) is a comprehensive enterprise-level labor management solution that helps hospitality organizations improve the efficiency and productivity of their workforce. WMx offers tools for performance-based scheduling, dynamic labor forecasting, embedded workflow for employee hiring, employee self-service, multiple time capture solutions and seamless integration to numerous POS, PMS, inventory and payroll systems.

Document Management

•

Agilysys DataMagine™ is a U.S.-patented imaging module and archiving solution that allows users to securely capture and retrieve documents and system-generated information. DataMagine integrates with all of our products, adding functionality and increasing benefit to customers.

Activities

•

Agilysys GolfPro is a module that offers golf property managers complete pro shop management with tee time scheduling, member profile/billing, tournament management and Web and e-mail access bundled into one solution.

•

Agilysys Spa Management software covers all aspects of running a spa business, from scheduling guests for services to managing staff schedules. The software also integrates with our PMS solutions.

9

•

Agilysys LMS ARTS® interfaces with hotel guest data, allowing reservationists to pre-plan activities when booking a guest's room. The application also places canceled activities back into inventory for resale, resulting in optimum property utilization and profitability.

•

Agilysys Visual One Activities software streamlines the management of all of the amenities and activities a property has to offer. Staff can easily schedule and personalize reservations for guests; activities then appear on itinerary/confirmations.

Products revenue also includes remarketed hardware and proprietary and remarketed software that is deployed as an integral component of the solutions we provide.

Support, Maintenance and Subscription Services: Contracted technical support, maintenance and subscription services are a significant portion of our consolidated revenue and typically generate higher profit margins than products revenue. Growth has been driven by a strategic focus on developing and promoting these offerings while market demand for maintenance services and updates that enhance reliability, as well as the desire for flexibility in purchasing options, continue to reinforce this trend. Our commitment to exceptional service has enabled us to become a trusted partner with customers who wish to optimize the level of service they provide to their guests and maximize commerce opportunities both on- and off-premise.

Professional Services: We have industry-leading expertise in designing, implementing, integrating and installing customized solutions into both legacy and newly created platforms. For existing enterprises, we seamlessly integrate new systems and for start-ups and fast-growing customers, we become a partner that can manage large-scale rollouts and tight construction schedules. Our extensive experience ranges from staging equipment to phased rollouts as well as training staff in a manner that saves our customers time and money.

Representative Agilysys clients include:

AVI Foodsystems, Inc.	Copper Mountain	Resorts World Bimini
Banner Health	The Cosmopolitan of Las Vegas	Rosen Hotels & Resorts
Benchmarc Restaurants	CSU Fullerton Auxiliary Services Corporation	Royal Caribbean International
Black Rock Resort	Farmers Restaurant Group	Royal Lahaina Resort
Boyd Gaming Corporation	Golden Nugget Lake Charles	Sands Casino Resort Bethlehem
BR Guest Hospitality	Harbor Winds Hotel	SAVOR
The Breakers Palm Beach	Hialeah Park	The Sea Pines Resort
The Broadmoor's Ranch at Emerald Valley	Ho-Chunk Gaming	Spooky Nook Sports
Caesars Entertainment	Malana Hotels & Suites	Sugar Factory
Cal Dining at UC Berkeley	Maryland Live! Casino	SUNY Cobleskill
Camanche Nation of Oklahoma	Norwegian Cruise Line	The Venetian Resort Hotel Casino
Camelback Lodge & Waterpark	Oxford Casino	University of Akron
Compass Group North America	Palm Garden Hotel	Vail Resorts
Casa Ybel Resort	Pinehurst Resort	Valley View Casino & Hotel
Cask & Barrel	Pinnacle Entertainment	Vanderbilt University
Casino del Sol	Prairie Band Casino & Resort	Yale University

Industry and Markets

We offer specific solutions for customers of varying sizes across four major market sectors: Gaming, both corporate and tribal; Hotels, Resorts and Cruise; Foodservice Management; and Restaurants, Universities, Stadia and Healthcare.

The hospitality industry encompasses a wide variety of market sectors and customers. We operate throughout North America, Europe and Asia, with corporate services located in Alpharetta, GA, and offices in Singapore, Hong Kong and Malaysia. Sales to customers outside of the United States represent approximately 5% of total sales.

10

The hospitality industry is highly fragmented and composed by a number of defined markets including lodging, casinos, cruise ships, resorts and spas, franchise operators, restaurant chains, stadiums, and arenas, among others. For example, in the lodging segment, no single hotel brand accounts for more than 4% of all hotel rooms in the United States. According to Smith Travel Research, the U.S. lodging industry generated approximately $133 billion in room revenue in calendar 2014, with an average of approximately 64.4% of approximately 4.9 million available rooms occupied. This compares with 62.3% in 2013 and eclipses the prior market-cycle peak occupancy rate of 63.1% in 2006. Travelers booked a record 1.2 billion U.S. room nights in 2014, up approximately 4% from 2013.

The hospitality business is sensitive to the strength of domestic and global economic and credit conditions. Business and destination resort travel are highly correlated with the economic conditions in their respective markets. Competition is intense for consumer spending, and hospitality industry participants are seeking ways to increase their visibility and appeal as well as enhance the experience of their guests. Our products and solutions are meant to leverage the opportunity these challenges create by providing our customers with higher degree of guest connectivity and added engagement tools that will enable them to capitalize on their brand equity better and more profitably manage their operations, and grow their business. In addition to bespoke product solutions that are designed and customized to meet unique facility or multi-facility needs, we also provide an array of support and subscription options geared towards maintaining systems and professional services for implementation and rollouts.

We have a significant customer base in the commercial casino and gaming sector. According to the American Gaming Association, over 30% of the U.S. adult population visited a casino at least once in 2012. Amenities in contemporary casinos extend well beyond gaming to include a variety of entertainment and leisure options as well as modern convention centers and meeting facilities to attract the corporate market. International gaming markets are growing rapidly both in size and new jurisdictions. Asian gaming markets continue to generate robust growth. Gross gaming revenue in Macau exceeds that of the Las Vegas Strip, with a number of the current and planned properties in the region operated by U.S.-based companies. As the market share leader in providing PMS systems to casinos on the Las Vegas Strip, we are well positioned to benefit from these strong and long-standing relationships as our customer base expands into international markets. Additionally, as gaming operators migrate toward cashless operations and digital track-and-log of unique guest behavior, we are able to provide the requisite technologies and expertise to satisfy their needs.

We also have expertise in serving the unique needs of Cruise ship operators. Guests and potential customers are expecting an experience that reflects their unique tastes, preferences and travel habits and cruise operators have seen the need to adequately support the increasing level of personalization and detail required to capture the highest level of guest satisfaction. Our products and services can best help them to deliver on this critical part of their business. According to the Cruise Lines International Association and Cruise Market Watch, cruise lines continued the growth trends of recent years in 2014. The worldwide cruise ship fleet currently stands at 298 ships and the current order book, covering 2015-2020, includes 55 new builds. The industry carried over 21.5 million passengers in 2014, up from nearly 21 million passengers in 2013.

Customers

Our customers include large, medium-sized and boutique companies, and divisions or departments of large corporations in the hospitality industry. We concentrate on serving the needs of customers in a range of customer-focused settings where brand differentiation is important, particularly in the lodging, casino, destination resort, cruise line, foodservice industries where competition for guest recruitment is intense. Our current customer base is highly fragmented, with no single customer representing more than 10% of consolidated revenue from continuing operations.

Seasonality

We have traditionally experienced seasonal revenue weakness during our fiscal first quarter ending June 30. Additionally, the timing of large one-time orders, such as those associated with significant remarketed product sales around large customer refresh cycles or significant volume rollouts, occasionally creates volatility in our quarterly results.

Competition

Our solutions face a highly competitive market. Competition exists with respect to developing and maintaining relationships with customers, pricing for products and solutions, and customer support and service.

We compete with other full-service providers that sell and service bundled POS and PMS solutions comprised of hardware, software, support and services. These companies, some of which are much larger than we are, include MICROS Systems, Inc., NCR, Par Technology and Infor. We also compete with software companies like IDeaS Revenue Solutions, POSitouch, Northwind and Xpient Solutions. In addition, we compete with PMS systems that are designed and maintained in-house by large hotel chains.

11

Environmental Matters

We believe we are in compliance in all material respects with all applicable environmental laws. Presently, we do not anticipate that such compliance will have a material effect on capital expenditures, earnings or competitive position with respect to any of our operations.

Employees

As of May 22, 2015, we had 504 employees. We are not a party to any collective bargaining agreements, have had no strikes or work stoppages and consider our employee relations to be good.

Access to Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports are available free of charge through our corporate website, http://www.agilysys.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (SEC). The information posted on our website is not incorporated into this Annual Report on Form 10-K (Annual Report). Reports, proxy and information statements, and other information regarding issuers that file electronically, are maintained on the SEC website, http://www.sec.gov.

Item 1A.  Risk Factors.

Risks Relating to Our Business

Our future success will depend on our ability to develop new products, product upgrades and services that achieve market acceptance.

Our business is characterized by rapid and continual changes in technology and evolving industry standards. We believe that in order to remain competitive in the future we will need to continue to develop new products, product upgrades and services, requiring the investment of significant financial resources. If we fail to accurately anticipate our customer's needs and technological trends, or are otherwise unable to complete the development of a product or product upgrade on a timely basis, we will be unable to introduce new products or product upgrades into the market on a timely basis, if at all, and our business and operating results would be materially and adversely affected.

The development process for most new products and product upgrades is complicated, involves a significant commitment of time and resources and is subject to a number of risks and challenges including:

• Managing the length of the development cycle for new products and product enhancements, which has frequently been longer than we originally expected;

• Adapting to emerging and evolving industry standards and to technological developments by our competitors and customers; and

• Extending the operation of our products and services to new and evolving platforms, operating systems and hardware products, such as mobile devices.

If we are not successful in managing these risks and challenges, or if our new products, product upgrades, and services are not technologically competitive or do not achieve market acceptance, our business and operating results could be adversely affected.

Continuing challenging global economic conditions could adversely affect our business and financial results.

Global economic conditions continue to be challenging. Our revenue and profitability depend significantly on general economic conditions and the level of capital available to our customers. Our business trends and revenue growth continue to be affected by the challenging economic climate. These difficult economic conditions and the uncertainty about future economic conditions may adversely affect our customers' level of spending, ability to obtain financing for purchases, ability to make timely payments to us and adoption of new technologies, which could require us to increase our allowance for doubtful accounts, negatively impact our days sales outstanding, lead to increased price competition and adversely affect our results of operations.

We face extensive competition in the markets in which we operate, and our failure to compete effectively could result in price reductions and/or decreased demand for our products and services.

12

Several companies offer products and services similar to ours. The rapid rate of technological change in the hospitality market makes it likely we will face competition from new products designed by companies not currently competing with us. We believe our competitive ability depends on our product offerings, our experience in the hospitality industry, our product development and systems integration capability, and our customer service organization. There is no assurance, however, that we will be able to compete effectively in the hospitality technology market in the future.

We compete for customers based on several factors, including price. In some cases, we may have to reduce our pricing to obtain business. If we are not able to maintain favorable pricing for our products and services, our profit margin and our profitability could suffer.

If we fail to meet our customers' performance expectations, our reputation may be harmed, and we may be exposed to legal liability.

Our ability to attract and retain customers depends to a large extent on our relationships with our customers and our reputation for high quality professional services and integrity. As a result, if a customer is not satisfied with our services or solutions, our reputation may be damaged. Moreover, if we fail to meet our clients' performance expectations, we may lose clients and be subject to legal liability, particularly if such failure adversely impacts our clients' businesses.

In addition, many of our projects are critical to the operations of our customers' businesses. While our contracts typically include provisions designed to limit our exposure to legal claims relating to our products and services, these provisions may not adequately protect us or may not be enforceable in all cases. The general liability insurance coverage that we maintain, including coverage for errors and omissions, is subject to important exclusions and limitations. We cannot be certain that this coverage will continue to be available on reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. A successful assertion of one or more large claims against us that exceeds our available insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our profitability.

Actual or perceived security vulnerabilities in our software products may result in reduced sales or liabilities.

Our software may be used in connection with processing sensitive data (e.g., credit card numbers). It may be possible for the data to be compromised if our customer does not maintain appropriate security procedures. In those instances, the customer may attempt to seek damages from us. While we believe that all of our current software complies with applicable industry security requirements and that we take appropriate security measures to reduce the possibility of breach through our support and other systems, we cannot assure that our customers' systems will not be breached, or that all unauthorized access can be prevented. If a customer, or other person, seeks redress from us as a result of a security breach, our business could be adversely affected.

Our cloud-based solutions present execution and competitive risks.

Our solutions offered in the cloud accessible via the web without hardware installation or software downloads present new and difficult technology challenges. These offerings depend on integration of third-party hardware, software and cloud hosting vendors working together with our products. As a result, we may be subject to claims if customers experience service disruptions, breaches or other quality issues related to our cloud-based solutions.

Cloud-based platform and software applications presents increased security risks.

As we expand our cloud-based platform and software hosting capabilities, including our rGuest products, and offer more of our software applications to our customers on a cloud-based basis, our responsibility for data and system security with respect to data held in our hosting centers increases significantly. While we believe that our current platform, software applications and data centers comply with applicable laws and industry security requirements, and while we believe that we use appropriate security measures to reduce the possibility of unauthorized access or misuse of data in the data centers, we cannot provide absolute assurance that our cloud-based applications will not be breached, or that all unauthorized access can be prevented. If a security breach were to occur, a customer, regulatory agency, or other person could seek redress from us, which could adversely affect our business.

We may not be able to enforce or protect our intellectual property rights.

We rely on a combination of copyright, patent, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. We cannot be certain that the steps we have taken will prevent unauthorized use of our technology. Any failure to protect our intellectual property rights would diminish or eliminate the competitive advantages that we derive from our proprietary technology.

13

We may be subject to claims of infringement of third-party intellectual property rights.

While we do not believe that our products and services infringe any patents or other intellectual property rights, from time to time, we receive claims that we have infringed the intellectual property rights of others. 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 alleging that point-of-sale and property management and other hospitality information technology products sold by us infringe three patents owned by Ameranth.

This lawsuit and any other such claim, with or without merit, could result in costly litigation and distract management from day-to-day operations. If we are found liable, we could be obligated to pay significant damages or enter into license agreements.

We are subject to litigation, which may be costly.

As a company that does business with many customers, employees and suppliers, we are subject to litigation. The results of such litigation are difficult to predict, and we may incur significant legal expenses if any such claim were filed. While we generally take steps to reduce the likelihood that disputes will result in litigation, litigation is very commonplace and could have an adverse effect on our business.

Our dependence on certain strategic partners makes us vulnerable to the extent we rely on them.

We rely on a concentrated number of vendors for the majority of our hardware and for certain software and related services needs. We do not have long term agreements with many of these vendors. If we can no longer obtain these hardware, software or services needs from our major suppliers due to mergers, acquisitions or consolidation within the marketplace, material changes in their partner programs, their refusal to continue to supply to us on reasonable terms or at all, and we cannot find suitable replacement suppliers, it may have a material adverse impact on our future operating results and gross margins.

If we acquire new businesses, we may not be able to successfully integrate themor attain the anticipated benefits.

As part of our operating history and growth strategy, we have acquired other businesses. In the future, we may continue to seek acquisitions. We can provide no assurance that we will be able to identify and acquire targeted businesses or obtain financing for such acquisitions on satisfactory terms. The process of integrating acquired businesses into our operations may result in unforeseen difficulties and may require a disproportionate amount of resources and management attention. If integration of our acquired businesses is not successful, we may not realize the potential benefits of an acquisition or suffer other adverse effects.

If we fail to retain key employees, our business may be harmed.

Our success depends on the skill, experience and dedication of our employees. If we are unable to retain and attract sufficiently experienced and capable personnel, especially in product development, sales and management, our business and financial results may suffer. For example, if we are unable to retain and attract a sufficient number of skilled technical personnel, our ability to develop high quality products and provide high quality customer service may be impaired. Experienced and capable personnel in the technology industry remain in high demand, and there is continual competition for their talents. When talented employees leave, we may have difficulty replacing them, and our business may suffer. There can be no assurance that we will be able to successfully retain and attract the personnel that we need.

We may incur goodwill, intangible asset and capitalized software development impairment charges that adversely affect our operating results.

We review our goodwill, intangible assets and capitalized software development costs for impairment on at least an annual basis. During the fourth quarter of fiscal 2015, we recorded $2.0 million in asset impairment charges related to an indefinite lived purchased trade name that was determined to be finite life and the determination that certain capitalized software development costs would no longer yield significant future cash flows. Our future operating results and the market price of our common stock could be materially adversely affected if we are required to further write down the carrying value of goodwill, intangible assets or capitalized software development in the future.

If we fail to maintain an effective system of internal controls, we may not be able to detect fraud, which could have a material adverse effect on our business.

While we believe our internal control over financial reporting is effective, a controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that control issues and instances of fraud, if any, within our company have been detected.

14

We have encountered risks associated with maintaining large cash balances.

While we have attempted to invest our cash balances in investments generally considered to be relatively safe, we nevertheless confront credit and liquidity risks. Bank failures could result in reduced liquidity or the actual loss of money held in deposit accounts in excess of federally insured amounts, if any.

We may have exposure to greater than anticipated tax liabilities.

Some of our products and services may be subject to sales taxes in states where we have not collected and remitted such taxes from our customers. We have reserves for certain state sales tax contingencies based on the likelihood of obligation. These contingencies are included in “Accrued liabilities” in our Consolidated Balance Sheets. We believe we have appropriately accrued for these contingencies. In the event that actual results differ from these reserves, we may need to make adjustments, which could materially impact our financial condition and results of operations.

Our business may be impacted by the recent bankruptcy filing of Caesars Entertainment Operating Company, Inc.

On January 12, 2015, an involuntary bankruptcy petition was filed against Caesars Entertainment Operating Company, Inc. (Caesars) under Chapter 11 of the U.S. Bankruptcy Code. On January 15, 2015, Caesars and certain of its affiliates filed a voluntary bankruptcy petition under Chapter 11. Those cases have been consolidated in the United States Bankruptcy Court for the Northern District of Illinois. At March 31, 2015, our accounts receivables owing by Caesars and its affiliates who have filed a bankruptcy petition totaled approximately $3.2 million, including both pre- and post-petition claims.  The total amount owed as of March 31, 2015 represents approximately 13% of our outstanding accounts receivable as of March 31, 2015. As of May 26, 2015, we filed a proof of claim with the Bankruptcy Court identifying approximately $0.7 million of pre-petition claims still outstanding. Caesars entertainment properties have continued to operate in the ordinary course following the bankruptcy filing, and we have continued to do business with Caesars in the ordinary course. Our business with Caesars is subject to a number of risks, including our ability to collect outstanding accounts receivable, as well as the risks that Caesars’ bankruptcy restructuring may not be successful, or that Caesars ceases normal operations or seeks to renegotiate its existing obligations through bankruptcy protection or otherwise.

Risks Relating to the Industries We Serve

Our business depends to a significant degree on the hospitality industry and a weakening could adversely affect our business and results of operations.

Because our customer base is concentrated in the hospitality industry, our business is largely dependent on the health of that industry. Our sales are dependent in large part on the health of the hospitality industry, which in turn is dependent on the domestic and international economy.  Instabilities or downturns in the hospitality industry could disproportionately impact our revenue, as clients may exit the industry or delay, cancel or reduce planned expenditures for our products. A general downturn in the hospitality industry could disproportionately impact our revenue, as clients may exit the industry or delay, cancel or reduce planned expenditures for our products.

Higher oil and gas prices worldwide could have a material adverse impact on the hospitality industry, and indirectly, on our business.

Material increases in oil and gas prices tend to reduce discretionary spending by consumers, such as on travel and dining, as well as on retail spending generally. Reductions in discretionary spending by consumers adversely affect our customers and, indirectly, our business. Moreover, increases in oil and gas prices also directly adversely affect our customer base in other ways. For example, oil and gas price increases can result in higher ingredient and food costs for our restaurant customers.

Consolidation in the hospitality industry could adversely affect our business.

Customers that we serve may seek to achieve economies of scale and other synergies by combining with or acquiring other companies. The hospitality industry has experienced recent consolidations, including the hotel and casino sectors of the industry. Although recent consolidations in the hospitality industry have not materially adversely affected our business, there is no assurance that future consolidations will not have such affect. For example, if one of our current customers merges or consolidates with a company that relies on another provider's products or services, it could decide to reduce or cease its purchases of products or services from us, which could have an adverse effect our business.

15

Risks Relating to Our Stock

Our stock has been volatile and we expect that it will continue to be volatile.

Our stock price has been volatile, and we expect it will continue to be volatile. For example, during the year ended March 31, 2015, the trading price of our common stock ranged from a high of $15.02 to a low of $9.39. The volatility of our stock price may be due to factors other than those specific to our business, such as economic news or other events generally affecting the trading markets. Additionally, our ownership base has been and may continue to be concentrated in a few shareholders, which could increase the volatility of our common share price over time.

Our largest shareholder, MAK Capital, currently holds approximately 31% of our common shares, which could impact corporate policy and strategy, and MAK Capital's interests may differ from those of other shareholders.

Pursuant to the approval by shareholders of a control share acquisition proposal, MAK Capital holds approximately 31% of our outstanding common shares. As a significant shareholder whose responses could potentially affect the interests of Agilysys and the other shareholders, our Board may consider MAK Capital's potential response to a particular decision of the Board in considering the range of possible corporate policies and strategies in the future, potentially influencing corporate policy and strategic planning.

MAK entered into a Voting Trust Agreement with Computershare, as trustee, which provides that, for both strategic and other transactions requiring at least two-thirds of the voting power to approve, the trustee will vote a certain percentage of MAK Capital's shares in favor of, against, or abstaining from voting in the same proportion as all other shares voted by shareholders (including MAK Capital's shares not being voted by the trustee). If the Voting Trust Agreement, as amended, that MAK entered into with Computershare were to terminate for any reason, MAK Capital would have a level of control that would highly influence the approval or disapproval of transactions requiring under Ohio law the approval of two-thirds of the outstanding common shares, such as a business combination, or majority share acquisition involving the issuance of common shares entitling the holders to exercise one-sixth or more of the voting power of our common shares, each of which requires approval by two-thirds of the outstanding common shares. MAK Capital might also be able to initiate or substantially assist any such transaction. Even with the limitations on MAK Capital's voting power imposed by the Voting Trust Agreement, as amended, it would be more difficult for the other shareholders to approve such a transaction if MAK Capital opposed it, and MAK Capital's interests may differ from those of other shareholders.

16

Item 1B.  Unresolved Staff Comments.

None.

Item 2.  Properties.

Our corporate services are located in Alpharetta, Georgia where we lease approximately 23,000 square feet of office space. In addition, we lease approximately 34,000 square feet of office space in Las Vegas, Nevada and 10,895 square feet of office space in Bellevue, Washington. Our major leases contain renewal options for periods of up to 10 years. We believe that our current facilities and office space are sufficient to meet our needs and do not anticipate any difficulty securing additional space as needed.

Item 3.  Legal Proceedings.

We are involved in legal actions that arise in the ordinary course of business. It is the opinion of management that the resolution of any current pending litigation will not have a material adverse effect on our financial position or results of operations.

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.

On July 9, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Northern District of California alleging violations of federal and state wage and hour laws, rules and regulations pertaining primarily to pay for missed meals and rest periods and failure to reimburse business expenses.  On May 19 2014, the court approved a settlement of the lawsuit pursuant to which we paid a gross settlement in the amount of approximately $1.5 million, which was included in "Accrued Liabilities" on our Consolidated Balance Sheets, and the lawsuit was dismissed.

Item 4. Mine Safety Disclosures.

Not applicable.

17

Part II

Item 5.  Market for Registrant's Common Equity,Related Shareholder Matters and IssuerPurchases of Equity Securities.

Our common shares, without par value, are traded on the NASDAQ Stock Market LLC under the symbol “AGYS”. The high and low sales prices for the common shares for each quarter during the past two fiscal years are presented in the table below.

2015	High		Low
Fourth quarter	$	12.54	$	9.39
Third quarter	$	12.74	$	10.35
Second quarter	$	14.52	$	11.58
First quarter	$	15.02	$	11.89
2014	High		Low
Fourth quarter	$	15.50	$	12.00
Third quarter	$	14.06	$	10.74
Second quarter	$	12.65	$	10.84
First quarter	$	14.24	$	9.83

The closing price of the common shares on May 28, 2015, was $9.67 per share. There were 1,787 active shareholders of record.

We did not pay dividends in fiscal 2015 or 2014 and are unlikely to do so in the foreseeable future. The current policy of the Board of Directors is to retain any available earnings for use in the operations of our business.

18

Shareholder Return Performance Presentation

The following chart compares the value of $100 invested in our common shares, including reinvestment of dividends, with a similar investment in the Russell 2000 Index (the “Russell 2000”) and with the companies listed in the SIC Code 7373-Computer Integrated Systems Design for the period March 31, 2010 through March 31, 2015. The stock price performance in this graph is not necessarily indicative of the future performance of our common shares.

Comparison of 5 Year Cumulative Total Return

INDEXED RETURNS
			Fiscal Years Ended March 31,
	Base Period
Company Name / Index	2010		2011		2012		2013		2014		2015
Agilysys, Inc.	$	100.00	$	51.39	$	80.48	$	88.99	$	119.96	$	88.09
Russell 2000	$	100.00	$	125.79	$	125.56	$	146.03	$	182.39	$	197.37
Peer Group	$	100.00	$	110.81	$	103.16	$	127.54	$	170.82	$	200.76

This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, of the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

19

Item 6.  Selected Financial Data.

The following selected consolidated financial and operating data was derived from our audited consolidated financial statements and the current and prior period operating results of our UK entity, RSG and TSG have been classified within discontinued operations for all periods presented as discussed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The selected financial data should be read in conjunction with the Consolidated Financial Statements and Notes thereto, and Item 7 contained in Part II of this Annual Report.

	Year ended March 31,
(In thousands, except per share data)	2015			2014			2013			2012			2011
Operating results
Net revenue	$	103,514		$	101,261		$	94,008		$	82,051		$	88,085
Gross profit	60,081			64,040			57,619			49,626			51,484
Operating loss	(12,467		)	(6,188		)	(9,307		)	(45,840		)	(21,989		)
Loss from continuing operations, net of taxes	(11,497		)	(2,895		)	(6,214		)	(37,493		)	(23,558		)
Income (loss) from discontinued operations, net of taxes	—			19,992			4,916			14,710			(31,917		)
Net (loss) income	$	(11,497	)	$	17,097		$	(1,298	)	$	(22,783	)	$	(55,475	)
Per share data (1)
Basic and diluted
Loss from continuing operations	$	(0.51	)	$	(0.13	)	$	(0.28	)	$	(1.67	)	$	(1.03	)
Income (loss) from discontinued operations	—			0.90			0.22			0.65			(1.41		)
Net (loss) income	$	(0.51	)	$	0.77		$	(0.06	)	$	(1.02	)	$	(2.44	)
Weighted-average shares outstanding - basic and diluted	22,338			22,135			21,880			22,432			22,785
Balance sheet data at year end
Cash and cash equivalents	$	75,067		$	99,566		$	82,444		$	95,511		$	73,202
Working capital	54,407			81,711			72,122			76,286			83,005
Total assets (2)	181,525			190,895			197,498			204,464			312,398
Total debt	189			335			86			384			1,211
Total shareholders’ equity	124,188			132,873			113,856			114,438			148,104

(1) 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. In addition, when a loss from continuing operations is reported, adjusting the denominator of diluted earnings per share would also be anti-dilutive to the loss per share, even if the entity has net income after adjusting for a discontinued operation. Therefore, for all periods presented, basic weighted-average shares outstanding were used in calculating the diluted net loss per share.

(2) The decrease in assets from fiscal 2011 to 2012 is due to the sale of TSG.

20

Item 7. Managements’ 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 Consolidated Statements of Operations and 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 discussion should be read in conjunction with the Consolidated Financial Statements and related Notes that appear in Item 15 of this Annual Report titled, "Financial Statements and Supplementary Data." 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 3 of this Annual Report and Item 1A “Risk Factors”in Part I of this Annual Report 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 technology company that provides innovative software for point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document management and mobile and wireless solutions and services to the hospitality industry. Our solutions and services allow property managers to better connect, interact and transact with their customers and enhance their customer relationships by streamlining operations, improving efficiency, increasing guest recruitment and wallet share, and enhancing the overall 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.

Following the divestiture of the Technology Solutions Group (TSG) in August 2011, the Retail Solutions Group (RSG) in July 2013 and our United Kingdom business entity (UK entity) in March 2014, Agilysys operates as one operating segment and as a pure play software-driven solutions provider to the hospitality industry. The sale of TSG, RSG and the UK entity each represented the disposal of a component of an entity. As such, the operating results of TSG, RSG and the UK entity have been reported as a component of discontinued operations in the Consolidated Financial Statements for the periods presented (see Note 4).

Our top priority is increasing shareholder value by improving operating and financial performance and profitability growing the business through superior products and services. To that end, we expect to invest a certain portion of our cash on hand to develop and market new software products, to fund enhancements to existing software products, to expand our customer breadth, both vertically and geographically, and to make select acquisitions.

The primary objective of our ongoing strategic planning process is to create shareholder value by exploiting growth opportunities and strengthening our competitive position within the specific technology solutions and in the 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.

Our strategic plan specifically focuses on:

•    Strong customer focus, with clear and realistic service commitments.

• Growing sales of our proprietary offerings: products, support, maintenance and subscription services and professional services.

•    Diversifying our customer base across industries and geographies.

21

•    Capitalizing on our intellectual property and emerging technology trends.

22

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 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 August 1, 2011, we completed the sale of TSG to OnX Enterprise Solutions Limited and its subsidiary OnX Acquisition LLC (together OnX). For financial reporting purposes, TSG’s operating results for all periods presented were classified within discontinued operations.

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

On March 31, 2014, we completed the sale of our UK entity to Verteda Limited (Verteda), a U.K. based company. In connection with the sale, we have entered into a multi-year distribution agreement, whereby Verteda will distribute certain of our products within the U.K. marketplace. We will continue to manage all property management system accounts as well as key global accounts in the EMEA market. For financial reporting purposes, the UK entity operating results for all period presented were classified within discontinued operations.

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

23

Results of Operations

Fiscal 2015 Compared with Fiscal 2014

Net Revenue and Operating Loss

The following table presents our consolidated revenue and operating results for the fiscal years ended March 31, 2015 and 2014:

	Year ended March 31,						Increase (decrease)
(Dollars in thousands)	2015			2014			$			%
Net revenue:
Products	$	31,846		$	34,629		$	(2,783	)	(8.0	)%
Support, maintenance and subscription services	56,013			53,169			2,844			5.3	%
Professional services	15,655			13,463			2,192			16.3	%
Total net revenue	103,514			101,261			2,253			2.2	%
Cost of goods sold:
Products, inclusive of developed technology amortization	18,732			17,027			1,705			10.0	%
Support, maintenance and subscription services	12,461			10,786			1,675			15.5	%
Professional services	12,240			9,408			2,832			30.1	%
Total cost of goods sold	43,433			37,221			6,212			16.7	%
Gross profit	60,081			64,040			(3,959		)	(6.2	)%
Gross profit margin	58.0		%	63.2		%
Operating expenses:
Product development	25,316			25,212			104			0.4	%
Sales and marketing	16,357			14,059			2,298			16.3	%
General and administrative	21,668			20,750			918			4.4	%
Depreciation of fixed assets	2,225			2,074			151			7.3	%
Amortization of intangibles	3,461			6,414			(2,953		)	(46.0	)%
Asset write-offs and other fair value adjustments	1,836			327			1,509			nm
Restructuring, severance, and other charges	1,482			1,392			90			nm
Legal settlements	203			—			203			100.0	%
Operating loss	$	(12,467	)	$	(6,188	)	$	(6,279	)	101.5	%
Operating loss percentage	(12.0		)%	(6.1		)%

nm - not meaningful

24

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

	Year ended March 31,
	2015		2014
Net revenue:
Products	30.8	%	34.2	%
Support, maintenance and subscription services	54.1		52.5
Professional services	15.1		13.3
Total net revenue	100.0		100.0
Cost of goods sold:
Products, inclusive of developed technology amortization	18.1		16.8
Support, maintenance and subscription services	12.0		10.7
Professional services	11.9		9.3
Total net cost of goods sold	42.0		36.8
Gross profit	58.0		63.2
Operating expenses:
Product development	24.5		24.9
Sales and marketing	15.8		13.9
General and administrative	20.9		20.5
Depreciation of fixed assets	2.1		2.0
Amortization of intangibles	3.3		6.3
Asset write-offs and other fair value adjustments	1.8		0.3
Restructuring, severance and other charges	1.4		1.4
Legal settlements	0.2		—
Operating loss	(12.0	)%	(6.1	)%

Net revenue.  Total revenue increased $2.3 million, or 2.2%, in fiscal 2015 compared to fiscal 2014. Products revenue decreased $2.8 million, or 8.0%, primarily as a result of a slowing in product sales in line with our strategic initiatives to emphasize subscription based service revenue and new logo business. Support, maintenance and subscription services revenue increased $2.8 million, or 5.3%, as a result of continued focus on selling hosted perpetual and subscription based service revenue which was an increase of 11.3% year over year, and ongoing support from our proprietary product sales. Hosted perpetual and subscription based service revenue comprised 8% of total recurring revenues in 2015 compared to 7% in 2014. Professional services revenue increased $2.2 million, or 16.3%, due to the timing of customer installations including two large service projects during fiscal 2015 that resulted in approximately $1.9 million in revenue.

Gross profit and gross profit margin. Our total gross profit decreased $4.0 million, or 6.2%, in fiscal 2015 and total gross profit margin decreased 520 basis points to 58.0%. Products gross profit decreased $4.5 million and gross profit margin decreased 960 basis points to 41.2% mainly as a result of lower sales of higher margin proprietary software sales which made up a smaller portion of total product sales during fiscal 2015 as compared to fiscal 2014. Also impacting gross profit margin was $1.0 million in incremental amortization expense of software products that were recently placed into service. Support, maintenance and subscription services gross profit increased $1.2 million and gross profit margin decreased 190 basis points to 77.8% due to a change in the mix of labor resources needed for maintenance of our products. Professional services gross profit decreased $0.6 million and gross profit margin decreased 830 basis points to 21.8% as a result of higher cost of labor required in the third and fourth quarter to meet a customer commitment.

Operating expenses

Operating expenses, excluding the charges for asset write-offs and other fair value adjustments, legal settlements and restructuring, severance and other charges, increased $0.5, or 0.7%, in fiscal 2015 compared with fiscal 2014.

Product development.  Product development includes all expenses associated with research and development. Product development remained consistent during fiscal 2015 as compared to fiscal 2014. Increases in labor costs as we continue investing in engineering resources to help achieve our planned milestones were offset by the increased capitalization year over year as certain research and

25

development costs are capitalized as software development costs upon achieving specific milestones in the development life-cycle. We capitalized approximately $17.6 million and $13.7 million during fiscal 2015 and 2014, respectively.

Sales and marketing.  Sales and marketing increased $2.3 million, or 16.3%, in fiscal 2015 compared with fiscal 2014. The increase is due mainly to the timing of our sales reorganization as we continue to align and ramp our sales force to better serve our customers and our long term strategy and increased marketing activities surrounding the launch of our next generation product rGuest™.

General and administrative.  General and administrative increased $0.9 million, or 4.4%, in fiscal 2015 compared to fiscal 2014. as a result of $1.5 million of increased spend during the first half of fiscal 2015 surrounding the ongoing effort to streamline and rationalize our back-office processes, including the cost of resources involved in an ERP replacement project. This was offset by $0.6 million related to certain software licenses fees incurred in the third quarter of fiscal 2014 that did not recur in the current fiscal year.

Depreciation of fixed assets.  Depreciation of fixed assets increased $0.2 million, or 7.3%, in fiscal 2015 as compared to fiscal 2014 due to the timing of asset purchases.

Amortization of intangibles.  Amortization of intangibles decreased $3.0 million, or 46.0%, in fiscal 2015 as compared to fiscal 2014. In October 2013, we initiated an internal ERP replacement project and determined that amortization of our existing ERP system should be accelerated resulting in $3.2 million of additional amortization expense in fiscal 2014.

Asset write-offs and other fair value adjustments. Asset write-offs and other fair value adjustments increased $1.5 million in fiscal 2015 as compared to fiscal 2014. The net change was driven by the following factors:

• Internal use asset write-off. During the fourth quarter of fiscal 2015, a shift in customer preference for next generation offerings with more features and compatibility as compared to our Elevate™ POS hosted subscription solution, resulted in a write-off in the amount of $1.5 million. In fiscal 2014, we wrote off approximately $0.3 million related to certain internal use software in connection with the ERP system replacement project.

• Intangible write-off (Developed Technology and Trade Name). As of March 31, 2015, determined that the remaining net book value of our InfoGenesis Mobile (IG Mobile) software exceeded its net realizable value resulting in an impairment charge of $1.4 million. This was driven primarily by customer preference for InfoGenesis Flex (IG Flex), another one of our InfoGenesis POS mobility solutions. In addition, during the fourth quarter of fiscal 2015, certain restructuring activities incurred to better align product development, sales and marketing and general and administrative functions impacted the expected remaining useful life of the products under the Eatec® trade name. The trade name was determined to have a finite life and subsequently written down to its fair value to be amortized over five years. The fair value of this trade name was calculated based on future cash flows over the remaining useful life resulting in an impairment charge of $0.6 million as of March 31, 2015.

• Contingent consideration fair value adjustment. The fiscal 2015 write-offs were offset by a gain of $1.6 million recorded in fiscal 2015 to adjust the carrying value of the TimeManagement Corporate (TMC) contingent consideration to fair value. This adjustment was recorded as a result of a decrease in expected revenues associated with the contingent consideration.

Restructuring, severance and other charges. In the fourth quarter of fiscal 2015, we announced additional restructuring actions designed to continue the effort 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 $0.5 million in restructuring charges related to the Q4 fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of March 31, 2015, we had a remaining liability of approximately $0.5 million recorded for the Q4 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 and to reduce operating costs and recorded $0.2 million in restructuring charges during the first half of fiscal 2015, comprised of severance and other employee related benefits. As of March 31, 2015, there was no remaining liability related to the Q2 fiscal 2015 activity.

In fiscal 2014, following the sale of RSG, we recorded restructuring charges for severance and related employee benefits for a restructuring plan of approximately $0.7 million in order to better align corporate functions with our HSG operating unit and to reduce costs. We also initiated a sales and marketing restructuring plan in order to maximize sales effectiveness and more closely align sales and marketing efforts for targeted vertical growth, new product launches, and marketing alliances. We recorded restructuring charges for severance and related employee benefits of approximately $0.6 million related to the sales and marketing restructuring. During fiscal 2015, we recorded an additional $0.4 million related to the 2014 restructuring activity. As of March 31, 2015, there was no remaining liability related to the fiscal 2014 restructuring.

26

Our restructuring actions are discussed further in Note 5, Restructuring Charges.

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

Other (Income) Expenses

	Year ended March 31,						(Unfavorable) favorable
(Dollars in thousands)	2015			2014			$			%
Other (income) expenses:
Interest income	$	(110	)	$	(123	)	$	(13	)	nm
Interest expense	48			184			136			73.9	%
Other expense (income), net	146			(863		)	(1,009		)	nm
Total other expense (income), net	$	84		$	(802	)	$	(886	)	nm

nm - not meaningful

Interest income.  Interest income remained relatively consistent during fiscal 2015 as compared to fiscal 2014.

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

Other income, net.  Other income decreased in fiscal 2015 compared to fiscal 2014 primarily due to the gain on the redemption of a company owned life insurance policy of approximately $0.6 million in 2014. This was offset by the impact of foreign currency movement against the US dollar.

Income Taxes

	Year ended March 31,						(Unfavorable) favorable
(Dollars in thousands)	2015			2014			$			%
Income tax benefit	$	(1,054	)	$	(2,491	)	$	(1,437	)	nm
Effective tax rate	8.4		%	46.2		%

nm - not meaningful

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

For 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, the expiration of statute of limitations for unrecognized tax positions and recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance. Other items affecting the rate include state taxes 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 less than $0.1 million as a result of the expiration of various statutes of limitations. We are routinely audited and the outcome of tax examinations could also result in a reduction in unrecognized tax benefits. Other changes could occur in the amount of gross unrecognized tax benefits during the next 12 months which cannot be estimated at this time.

27

Fiscal 2014 Compared to Fiscal 2013

Net Revenue and Operating Loss

The following table presents our consolidated revenue and operating results for the fiscal years ended March 31, 2014 and 2013:

	Year ended March 31,						Increase (decrease)
(Dollars in thousands)	2014			2013			$			%
Net revenue:
Products	$	34,629		$	31,030		$	3,599		11.6	%
Support, maintenance and subscription services	53,169			49,110			4,059			8.3	%
Professional services	13,463			13,868			(405		)	(2.9	)%
Total net revenue	101,261			94,008			7,253			7.7	%
Cost of goods sold:
Products, inclusive of developed technology amortization	17,027			17,109			(82		)	(0.5	)%
Support, maintenance and subscription services	10,786			10,326			460			4.5	%
Professional services	9,408			8,954			454			5.1	%
Total cost of goods sold	37,221			36,389			832			2.3	%
Gross profit	64,040			57,619			6,421			11.1	%
Gross profit margin	63.2		%	61.3		%
Operating expenses:
Product development	25,212			23,892			1,320			5.5	%
Sales and marketing	14,059			13,350			709			5.3	%
General and administrative	20,750			20,984			(234		)	(1.1	)%
Depreciation of fixed assets	2,074			2,137			(63		)	(2.9	)%
Amortization of intangibles	6,414			3,284			3,130			95.3	%
Asset write-offs and other fair value adjustments	327			120			207			nm
Restructuring, severance, and other charges	1,392			1,495			(103		)	(6.9	)%
Legal settlements	—			1,664			(1,664		)	nm
Operating loss	$	(6,188	)	$	(9,307	)	$	3,119		(33.5	)%
Operating loss percentage	(6.1		)%	(9.9		)%

nm - not meaningful

28

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

	Year ended March 31,
	2014		2013
Net revenue:
Products	34.2	%	33.0	%
Support, maintenance and subscription services	52.5		52.2
Professional services	13.3		14.8
Total net revenue	100.0		100.0
Cost of goods sold:
Products, inclusive of developed technology amortization	16.8		18.2
Support, maintenance and subscription services	10.7		11.0
Professional services	9.3		9.5
Total cost of goods sold	36.8		38.7
Gross profit	63.2		61.3
Operating expenses:
Product development	24.9		25.4
Sales and marketing	13.9		14.2
General and administrative	20.5		22.3
Depreciation of fixed assets	2.0		2.3
Amortization of intangibles	6.3		3.5
Asset write-offs and other fair value adjustments	0.3		0.1
Restructuring, severance, and other charges	1.4		1.6
Legal settlements	—		1.8
Operating loss	(6.1	)%	(9.9	)%

Net revenue.  Total revenue increased $7.3 million, or 7.7%, in fiscal 2014 compared to fiscal 2013. Products revenue increased $3.6 million, or 11.6%, as a result of continued organic growth in our proprietary software licenses and remarketed product revenue. Support, maintenance and subscription services revenue increased $4.1 million, or 8.3%, as a result of continued focus on selling subscription based hosting revenue, and ongoing support from our growing proprietary product sales. This is offset by a reduction in remarketed support revenue due to a strategic change in one of our third party providers that lowered our costs and the costs to our customers in fiscal 2014. Professional services revenue remained relatively flat.

Gross profit and gross profit margin. Our total gross profit increased $6.4 million, or 11.1%, in fiscal 2014 and total gross profit margin increased 190 basis points to 63.2%. Products gross profit increased $3.7 million and gross profit margin increased 600 basis points to 50.8% mainly as a result of certain developed technology amortization reaching its useful life during fiscal 2013 and the continued focus on higher margin proprietary software sales which made up a larger portion of total product sales in fiscal 2014 compared to fiscal 2013. Developed technology amortization was $0.3 million and $0.8 million in fiscals 2014 and 2013, respectively. Support, maintenance and subscription services gross profit increased $3.6 million and gross profit margin increased 70 basis points to 79.7% due to economies of scale. Professional services gross profit decreased $0.9 million and gross profit margin decreased 530 basis points to 30.1% as a result of higher cost of labor required to meet the needs of certain customer installations.

Operating expenses

Operating expenses, excluding the charges for asset write-offs and other fair value adjustments, legal settlements and restructuring, severance and other charges, increased $4.9 million, or 7.6%, in fiscal 2014 compared with fiscal 2013.

Product development.  Product development increased $1.3 million, or 5.5% in fiscal 2014 compared with fiscal 2013. This increase is driven by the continued investment in internal and third party resources to enhance the existing products as well as the early stage development of our future platforms. Certain research and development costs are capitalized as software development costs for future use. We capitalized approximately $13.7 million and $4.9 million during fiscal 2014 and 2013, respectively.

Sales and marketing.  Sales and marketing increased $0.7 million, or 5.3%, in fiscal 2014 compared with fiscal 2013. The increase is due to continued investment in domestic sales resources and incremental incentive compensation expense incurred in fiscal 2014 to finalize fiscal 2013 compensation plans.

29

General and administrative.  General and administrative decreased $0.2 million, or 1.1%, in fiscal 2014 compared to fiscal 2013. This is a result of initiatives implemented with the sale of RSG, which resulted in lower employee related costs and certain efficiencies in back-office processes, offset by certain software license fees incurred in the third quarter of fiscal 2014 that are not expected to recur.

Depreciation of fixed assets.  Depreciation of fixed assets was relatively flat for fiscal 2014 compared to fiscal 2013.

Amortization of intangibles.  In October 2013, we initiated an internal enterprise resource planning (ERP) system replacement project and determined that amortization for our existing ERP system should be accelerated. We recorded approximately $3.2 million in fiscal 2014 of additional amortization in connection with this acceleration. The existing ERP system will be fully amortized as of June 30, 2014. Excluding the accelerated portion, amortization of intangibles remained relatively flat.

Asset write-off and other fair value adjustments. During the third quarter of fiscal 2014, in connection with the ERP system replacement project, we determined that certain internal use developed software would not be continued. As a result, we wrote off the entire asset in the amount of $0.3. During fiscal 2013, we recorded $0.1 million of additional write-offs from the fiscal 2012 related to other developed technologies.

Legal settlements. During the fourth quarter of fiscal 2013, we recorded $1.7 million in legal settlements related to pending lawsuits.

Restructuring, severance and other charges. In fiscal 2014, following the sale of RSG, we recorded restructuring charges for severance and related employee benefits for a restructuring plan of approximately $0.7 million in order to better align corporate functions with our HSG operating unit and to reduce costs. We also initiated a sales and marketing restructuring plan in order to maximize sales effectiveness and more closely align sales and marketing efforts for targeted vertical growth, new product launches, and marketing alliances. We recorded restructuring charges for severance and related employee benefits of approximately $0.6 million related to the sales and marketing restructuring.

In fiscal 2013, we recorded additional expense of $1.1 million for severance and benefits related to the fiscal 2012 restructuring activity. In addition, we recorded $0.3 million in severance costs during the second quarter of fiscal 2013.

Our restructuring activities are expected to be completed in the first half of fiscal 2015 and should total less the $1.0 million. Our restructuring actions are discussed further in Note 5, Restructuring Charges.

Other (Income) Expenses

	Year ended March 31,						(Unfavorable) favorable
(Dollars in thousands)	2014			2013			$		%
Other (income) expenses
Interest income	$	(123	)	$	(13	)	$	110	nm
Interest expense	184			266			82		30.8	%
Other expense (income), net	(863		)	(228		)	635		nm
Total other (income) expense, net	$	(802	)	$	25		$	827	nm

nm - not meaningful

Interest income.  Interest income increased during fiscal 2014 compared to fiscal 2013 as a result of higher interest earned in fiscal 2014 from our interest bearing cash accounts and interest received from the redemption of a company owned life insurance policy.

Interest expense. Interest expense consists of costs associated with capital leases and loans on corporate-owned life insurance policies. Interest expense decreased in fiscal 2014 compared to fiscal 2013 due to expiration and non-renewal of certain capital leases.

Other income, net.  Other income increased in fiscal 2014 compared to fiscal 2013 primarily due to the gain on the redemption of a company owned life insurance policy of approximately $0.6 million.

30

Income Taxes

	Year ended March 31,						(Unfavorable) favorable
(Dollars in thousands)	2014			2013			$			%
Income tax benefit	$	(2,491	)	$	(3,118	)	$	(627	)	nm
Effective tax rate	46.2		%	33.4		%

nm - not meaningful

For fiscal 2014 and 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 and recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance. Other items affecting the rate include a decrease in unrecognized tax benefits attributable to the expiration of statute of limitations, foreign and state taxes and other U.S. permanent book to tax differences.

Acquisitions

Purchase of assets from Dining Ventures - Fiscal 2015

On July 3, 2014 we 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. 

Purchase of TimeManagement Corporation - Fiscal 2014

On June 10, 2013, we 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. 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 five years. 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. As of March 31, 2015, we recorded a gain of $1.6 million to adjust the carrying value of the TMC contingent consideration to fair value. This adjustment was recorded as a result of a decrease in expected revenues associated with the contingent consideration. The gain was recorded within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

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 Consolidated Financial Statements from the date of acquisition and did not have a material impact on our Consolidated Financial Statements or related disclosures.

Additional information regarding the acquisitions are provided in Note 3 to the Consolidated Financial Statements titled, Acquisitions.

31

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 us from Verteda of $0.8 million, net of cash on hand of $0.9 million. During fiscal 2015 we received full payment of the amount due to us from Verteda. In connection with the sale, we have entered into a multi-year distribution agreement whereby Verteda will distribute certain of our 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. The sale of our UK entity represented a disposal of a component of an entity. As such, the operating results of the UK entity have been reported as a component of discontinued operations in the Consolidated Statements of Operations for the periods presented. In addition, the assets and liabilities of the UK entity are classified as discontinued operations in our Consolidated Balance Sheets for the periods presented.

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 with Kyrus, under which we provided certain transitional administrative and support services to Kyrus through January 31, 2014. The sale of RSG represented a disposal of a component of an entity. As such, the operating results of RSG have been reported as a component of discontinued operations in the Consolidated Statements of Operations for the periods presented.

Additional information regarding the discontinued operations are provided in Note 4 to the Consolidated Financial Statements titled, Discontinued Operations.

Restructuring and Related 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. In addition, we assess the property and equipment associated with the related facilities for impairment. The remaining useful lives of property and equipment associated with the related operations are re-evaluated based on the respective restructuring plan, resulting in the acceleration of depreciation and amortization of certain assets.

Fiscal 2015 Restructuring Activity

Q2 - 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 Q2 fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of March 31, 2015, there was no further liability for the Q2 fiscal 2015 restructuring activity.

Q4 - In the fourth quarter of fiscal 2015, we announced additional restructuring actions designed to continue the effort 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 $0.5 million in restructuring charges related to the Q4 fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of March 31, 2015, we had a remaining liability of approximately $0.5 million recorded for the Q4 fiscal 2015 restructuring activity.

Fiscal 2014 Restructuring Activity

Q1 - 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. These restructuring activities were completed in fiscal 2014. We recorded $0.7 million in restructuring charges during fiscal 2014, comprised of severance and other employee related benefits. As of March 31, 2014, there was no further liability for the Q1 fiscal 2014 restructuring activity.

Q4 - 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. We recorded approximately $0.6 million in restructuring charges during fiscal 2014, comprised of severance and other employee related benefits. As of March 31, 2014, we had a remaining liability of approximately $0.5 million recorded for the Q4 fiscal 2014 restructuring activity.

32

Fiscal 2012 Restructuring Activity

In the first quarter of fiscal 2012, we announced restructuring actions, including the relocation of our corporate services from Solon, Ohio to Alpharetta, Georgia, designed to better align those services with our operating units and reduce costs following the sale of TSG. These restructuring actions were mostly completed by March 31, 2012 and impacted approximately 130 employees. To date, we have recorded $12.1 million in restructuring charges. These charges were primarily comprised of severance and related benefits. As of March 31, 2015, there was no further liability for fiscal 2012 restructuring activity.

Additional information regarding restructuring charges is provided in Note 5 to the Consolidated Financial Statements titled, Restructuring Charges.

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 March 31, 2015. We believe that cash flow from operating activities, cash on hand of $75.1 million as of March 31, 2015, and access to capital markets will provide adequate funds to meet our short-and long-term liquidity requirements.

As of March 31, 2015 and March 31, 2014, our total debt was approximately $0.2 million and $0.3 million, respectively, comprised of capital lease obligations in both periods.

At March 31, 2015, 100% of our cash and cash equivalents were deposited in bank accounts or invested in highly liquid investments with original maturity from date of acquisition of three months or less, including investments in commercial paper, of which 88% is located in the United States. Therefore, we believe that credit risk is limited with respect to our cash and cash equivalents balances.

Cash Flow

	Year ended March 31,
(In thousands)	2015			2014			2013
Net cash (used in) provided by continuing operations:
Operating activities	$	(2,186	)	$	1,384		$	(13,050	)
Investing activities	(21,632		)	17,724			(2,199		)
Financing activities	(401		)	(883		)	(500		)
Effect of exchange rate changes on cash	(280		)	(44		)	(21		)
Cash flows (used in) provided by continuing operations	(24,499		)	18,181			(15,770		)
Cash flows (used in) provided by discontinued operations	—			(1,546		)	1,114
Net (decrease) increase in cash and cash equivalents	$	(24,499	)	$	16,635		$	(14,656	)

Cash flow (used in) provided by operating activities from continuing operations. Cash flows used in operating activities were $2.2 million in fiscal 2015. This was mainly the result of our net loss after adding back certain non-cash items, including $2.2 million of depreciation, $4.8 million in amortization, and $1.8 million of asset write-offs and other fair value adjustments, offset by an overall net use in other operating assets and liabilities of $0.8 million. Change in operating assets and liabilities was driven primarily by increases in accounts receivable and prepaids of $2.5 million, offset by increase in accounts payable and accrued expenses of $1.7 million.

Cash flows provided by operating activities were $1.4 million in fiscal 2014.  This was mainly the result of our income after adding back certain non-cash items, including $10.9 million in depreciation, amortization which includes $3.2 million of accelerated amortization for the sun setting of our current ERP system, and stock-based compensation. This is offset by a $7.8 million increase in accounts receivable and a $2.7 million impact of the tax provision on taxes payable.

Cash flows used in operating activities were $13.1 million in fiscal 2013.  The use of cash included $11.2 million of non-recurring payments; $4.5 million for BEP and SERP payments and $6.7 million in restructuring, severance and other charges. Also contributing to the use of cash is the decrease in deferred revenue of $5.1 million and a $3.0 million impact of the tax provision on taxes payable.  This is offset by the increase in adjustments to net loss of $9.5 million related to legal settlements, depreciation and amortization and stock based compensation.  Additional offsets to the use of cash include an increase in accounts payable of $1.6 million related to the purchase of products to support the large remarketed product sales.

33

Cash flow provided by (used in) investing activities from continuing operations. Cash flows used in investing activities in fiscal 2015 were $21.6 million. This is primarily attributed to $15.8 million of capitalized software development costs, $4.7 million of fixed asset purchases, $3.8 million for the acquisition of developed technology for our rGuest Seat product, offset by $2.0 million and $0.8 million for proceeds from company owned life insurance policies and sale of the UK business unit, respectively.

In fiscal 2014, the $17.7 million in cash flows provided by investing activities were primarily comprised of $35.8 million net proceeds from the sale of RSG and our UK entity, offset by $1.8 million paid for the acquisition of TMC, $12.2 million was used for the development of proprietary software and $4.0 million for the enhancement of internal use software and the purchase of property and equipment.

In fiscal 2013, the $2.2 million in cash used in investing activities was primarily comprised of $3.9 million used for the development of proprietary software and $2.5 million used for the purchase of property and equipment, offset by $4.3 million in funds from the sale of marketable securities (Rabbi Trust).  The funds from the Rabbi Trust were used to settle employee benefit obligations.

Cash flow used in financing activities from continuing operations.  In fiscal 2015, the $0.4 million cash flows used in financing activities were primarily comprised of the repurchase of shares to satisfy employee tax withholding and exercise costs related to equity awards and payments of capital lease obligations.

In fiscal 2014, the $0.9 million cash flows used in financing activities were primarily comprised of the repurchase of shares to satisfy employee tax withholding and exercise costs related to equity awards and payments of capital lease obligations.

In fiscal 2013, the $0.5 million used in financing activities was primarily comprised of payments on capital lease obligations and the repurchase of shares to satisfy employee tax withholding related to equity awards.

Investments

Investments in Corporate-Owned Life Insurance Policies and Marketable Securities

Our invests in corporate-owned life insurance policies and marketable securities primarily to satisfy future obligations of certain employee benefit plans. Our investment in corporate-owned life insurance policies was recorded at their cash surrender value, which approximates fair value, at the balance sheet date. During fiscal 2015, we received cash proceeds of $2.0 million related to the death benefit due to us on redemption of one of these policies.  The cash surrender value of $2.5 million for the remaining policies were held in “Other non-current assets” at the balance sheet date. In additions, certain of these corporate-owned life insurance policies are endorsement split-dollar life insurance arrangements. We entered into a separate agreement with each of the former executives covered by these arrangements whereby we split a portion of the policy benefits with the former executive's designated beneficiary.

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.

34

Contractual Obligations

The following table provides aggregate information regarding our contractual obligations as of March 31, 2015.

(In thousands)	Total		2016		2017-2018		2019-2020		Thereafter
Operating leases (1)	$	11,973	$	2,285	$	4,057	$	3,032	$	2,599
Contingent consideration	112		8		16		16		72
Restructuring liabilities	450		450		—		—		—
Capital leases	196		147		49		—		—
Asset retirement obligation	435		35		150		—		250
Total contractual obligations (2)	$	13,166	$	2,925	$	4,272	$	3,048	$	2,921

(1)

Operating lease obligations are presented net of contractually binding sub-lease arrangements. Additional information regarding our operating lease obligations is contained in Note 13, Commitments and Contingencies.

(2)

At March 31, 2015, we had a $1.8 million liability reserve for unrecognized income tax positions which is not reflected in the table above.  The timing of potential cash outflows related to the unrecognized tax positions is not reasonably determinable and therefore, is not scheduled. Substantially all of this reserve is included in Other non-current liabilities.   Additional information regarding unrecognized tax positions is provided in Note 11 to the Consolidated Financial Statements titled, Income Taxes.

We believe that cash on hand, funds from continuing operations, and access to capital markets will provide adequate funds to finance capital spending and working capital needs and to service our obligations and other commitments arising during the foreseeable future.

Critical Accounting Policies

MD&A is based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses and related disclosure of contingent assets and liabilities. We regularly evaluate our estimates, including those related to bad debts, inventories, investments, intangible assets, income taxes, restructuring, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Our most significant accounting policies relate to the sale, purchase, and promotion of our products and services. The policies discussed below are considered by management to be critical to an understanding of our Consolidated Financial Statements because their application places the most significant demands on management's judgment, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain. Specific risks for these critical accounting policies are described in the following paragraphs.

For all of these policies, management cautions that future events rarely develop exactly as forecasted, and the best estimates routinely require adjustment.

Revenue recognition.  We derive revenue from the sale of products (i.e., server, storage, and point of sale hardware, and software), support, maintenance and subscription services and professional services. Revenue is recorded in the period in which the goods are delivered or services are rendered and when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price to the customer is fixed or determinable, and collection is reasonably assured. We reduce revenue for estimated discounts, sales incentives, estimated customer returns, and other allowances. Discounts are offered based on the volume of products and services purchased by customers. Shipping and handling fees billed to customers are recognized as revenue and the related costs are recognized in cost of goods sold. Revenue is recorded net of any applicable taxes collected and remitted to governmental agencies.

We frequently enter into multiple-element arrangements with customers including hardware, software, professional consulting services and maintenance support services. For arrangements involving multiple deliverables, when deliverables include software and non-software products and services, we evaluate and separate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (a) the delivered item has value to the customer on a stand-alone basis; and (b) if the

35

contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in our control.

Consideration is allocated to each unit of accounting based on the unit's relative selling prices. In such circumstances, we use a hierarchy to determine the selling price to be used for allocating revenue to each deliverable: (i) vendor-specific objective evidence of selling price (VSOE), (ii) third-party evidence of selling price (TPE), and (iii) best estimate of selling price (BESP). VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable. VSOE is established for our software maintenance services and we use TPE or BESP to establish selling prices for our non-software related services. BESP is primarily used for elements that are not consistently priced within a narrow range or TPE is not available. We determine BESP for a deliverable by considering multiple factors including product class, geography, average discount, and management's historical pricing practices. Amounts allocated to the delivered hardware and software elements are recognized at the time of sale provided the other conditions for revenue recognition have been met. Amounts allocated to the undelivered maintenance and other services elements are recognized as the services are provided or on a straight-line basis over the service period. In certain instances, customer acceptance is required prior to the passage of title and risk of loss of the delivered products. In such cases, revenue is not recognized until the customer acceptance is obtained. Delivery and acceptance generally occur in the same reporting period.

In situations where our solutions contain software that is more than incidental, revenue related to the software and software-related elements is recognized in accordance with authoritative guidance on software revenue recognition. For the software and software-related elements of such transactions, revenue is allocated based on the relative fair value of each element, and fair value is determined by VSOE. If we cannot objectively determine the fair value of any undelivered element included in such multiple-element arrangements, we defer revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements. When the fair value of a delivered element has not been established, but fair value exists for the undelivered elements, we use the residual method to recognize revenue. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue.

Revenue recognition for complex contractual arrangements, especially those with multiple elements, requires a significant level of judgment and is based upon a review of specific contracts, past experience, the selling price of undelivered elements when sold separately, creditworthiness of customers, international laws and other factors. Changes in judgments about these factors could impact the timing and amount of revenue recognized between periods.

Revenue for hardware sales is recognized when the product is shipped to the customer and when obligations that affect the customer's final acceptance of the arrangement have been fulfilled. A majority of our hardware sales involves shipment directly from its suppliers to the end-user customers. In these transactions, we are responsible for negotiating price both with the supplier and the customer, payment to the supplier, establishing payment terms and product returns with the customer, and we bear the credit risk if the customer does not pay for the goods. As the principal contact with the customer, we recognize revenue and cost of goods sold when we are notified by the supplier that the product has been shipped. In certain limited instances, as shipping terms dictate, revenue is recognized upon receipt at the point of destination or upon installation at the customer site.

We offer proprietary software as well as remarketed software for sale to our customers. We offer our customers the right to license the software under a variety of models. Our customers can license our software under a perpetual model for an upfront fee or a subscription model. For subscription arrangements, we allow customers the right to use software, receive unspecified products as well as unspecified upgrades and enhancements and entitle the customer to receive hosting services for a specified term.  The subscription revenue is generally recognized ratably over the term of the arrangement, typically three to five years.  Revenue from subscription service arrangements is included in Support, maintenance and subscription services in the Consolidated Statements of Operations. A majority of our software sales do not require significant production, modification, or customization at the time of shipment (physically or electronically) to the customer. Substantially all of our software license arrangements do not include acceptance provisions. As such, revenue from both proprietary and remarketed software sales is typically recognized when the software has been shipped. For software delivered electronically, delivery is considered to have occurred when the customer either takes possession of the software via downloading or has been provided with the requisite codes that allow for immediate access to the software based on the U.S. Eastern time zone time stamp.

We also offer proprietary and third-party services to our customers. Proprietary services generally include: consulting, installation, integration and training. Many of our software arrangements include consulting services sold separately under consulting engagement contracts. When the arrangements qualify as service transactions, consulting revenue from these arrangements are accounted for separately from the software revenue. The significant factors considered in determining whether the revenue should be accounted for separately include the nature of the services (i.e., consideration of whether the services are essential to the functionality of the software), degree of risk, availability of services from other vendors, timing of payments, and the impact of milestones or other customer acceptance criteria on revenue realization. If there is significant uncertainty about the project completion or receipt of payment for consulting services, the revenue is deferred until the uncertainty is resolved.

36

For certain long-term proprietary service contracts with fixed or “not to exceed” fee arrangements, we estimate proportional performance using the hours incurred as a percentage of total estimated hours to complete the project consistent with the percentage-of-completion method of accounting. Accordingly, revenue for these contracts is recognized based on the proportion of the work performed on the contract. If there is no sufficient basis to measure progress toward completion, the revenue is recognized when final customer acceptance is received. Adjustments to contract price and estimated service hours are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. The aggregate of collections on uncompleted contracts in excess of related revenue is shown as a current liability.

If an arrangement does not qualify for separate accounting of the software and consulting services, then the software revenue is recognized together with the consulting services using the percentage-of-completion or completed contract method of accounting. Contract accounting is applied to arrangements that include: milestones or customer-specific acceptance criteria that may affect the collection of revenue, significant modification or customization of the software, or provisions that tie the payment for the software to the performance of consulting services.

We also offer proprietary and third-party support to our customers. Support generally includes: support and maintenance of software and hardware products and subscription services. Revenue relating to proprietary support services is recognized evenly over the coverage period of the underlying agreement within support, maintenance and subscription revenue. In instances where we offer third-party support contracts to our customer, and the supplier is determined to be the primary obligor in the transaction, we report revenue at the time of the sale, only in the amount of the “commission” (equal to the selling price less the cost of sale) received rather than reporting revenue in the full amount of the selling price with separate reporting of the cost of sale.

Allowance for Doubtful Accounts.  We maintain allowances for doubtful accounts for estimated losses resulting from the inability or unwillingness of our customers to make required payments. These allowances are based on both recent trends of certain customers estimated to be a greater credit risk, as well as historical trends of the entire customer pool. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. To mitigate this credit risk we perform periodic credit evaluations of our customers.

Inventories. Inventories are stated at the lower of cost or market, net of related reserves. The cost of inventory is computed using a weighted-average costing method. Our inventory is monitored to ensure appropriate valuation. Adjustments of inventories to lower of cost or market, if necessary, are based upon contractual provisions governing turnover and assumptions about future demand and market conditions. If assumptions about future demand change and/or actual market conditions are less favorable than those projected by management, additional adjustments to inventory valuations may be required. We provide a reserve for obsolescence, which is calculated based on several factors including an analysis of historical sales of products and the age of the inventory. Actual amounts could be different from those estimated.

Income Taxes. Income tax expense includes U.S. and foreign income taxes and is based on reported income before income taxes. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities are determined based on the enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or realized.

We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies.

We recorded a valuation allowance of $76.4 million as of March 31, 2015 and $73.0 million as of March 31, 2014, related to substantially all of our deferred income tax assets in jurisdictions where there is uncertainty as to the ultimate realization of a benefit from those assets. In the event that we determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the tax valuation allowance would decrease tax expense in the period such determination was made.

We recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from uncertain tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet this threshold. Interest related to uncertain tax positions is recognized as part of the provision for income taxes and is accrued beginning in the period that such interest would be applicable under relevant tax law until such time that the related tax benefits are recognized. Our income taxes are described further in Note 11 to Consolidated Financial Statements titled, Income Taxes.

37

Goodwill and Other Indefinite-Lived Intangible Assets.  Goodwill represents the excess purchase price paid over the fair value of the net assets of acquired companies. Goodwill is subject to impairment testing at least annually, unless it is determined after a qualitative assessment that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount. Goodwill is measured for impairment on an annual basis, or in interim periods if indicators of potential impairment exist. The Company is also required to compare the fair values of other indefinite-lived intangible assets to their carrying amounts at least annually, or when current events and circumstances require an interim assessment. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized.

For fiscal 2015 and 2014, we conducted a qualitative assessment (Step Zero Analysis) to determine whether it would be necessary to perform step one of the two-step goodwill impairment test. It was determined based on the Step Zero Analysis that it is more likely than not that the fair value exceeded the carrying amount as of February 1, 2015. Additional information regarding our goodwill and impairment analyses is provided in Note 7, Goodwill and Intangible Assets.

We had two indefinite-lived intangible assets relating to purchased trade names. During the fourth quarter of fiscal 2015, one of the two trade names was determined to have a finite life and subsequently written down to its fair value to be amortized over five years. The remaining indefinite-lived intangible asset is not amortized; rather, it is tested for impairment at least annually by comparing the carrying amount of the asset with the fair value. An impairment loss is recognized if the carrying amount is greater than fair value. The income approach using “the relief from royalty method” was used to value the trade names as of February 1, 2015. Additional information regarding our intangible assets and impairment analyses is provided in Note 7, Goodwill and Intangible Assets.

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. Our restructuring reserves principally include estimates related to employee separation costs and the consolidation and impairment of facilities that will no longer be used in continuing operations. Actual amounts could be different from those estimated. Facility reserves are calculated using a present value of future minimum lease payments, offset by an estimate for future sublease income provided by external brokers. Present value is calculated using a credit-adjusted risk-free rate with a maturity equivalent to the lease term. Our restructuring charges are described further in Note 5 to Consolidated Financial Statements titled, Restructuring Charges.

Share-Based Compensation. We have a stock incentive plan under which we may grant non-qualified stock options, incentive stock options, stock-settled stock appreciation rights, time-vested restricted shares, restricted share units, performance-vested restricted shares, and performance shares. Shares issued pursuant to awards under this plan may be made out of treasury or authorized but unissued shares.

We record compensation expense related to stock options, stock-settled stock appreciation rights, 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 stock-settled appreciation right 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. Additional information regarding the assumptions used to value share-based compensation awards is provided in Note 15 to the accompanying Consolidated Financial Statements titled, Share-Based Compensation.

Capitalized Software Development Costs.  We capitalize certain costs related to the development of computer software. Capitalization of these costs begins when a detail program design or working model has been produced as evidenced by the completion of design, planning, coding and testing, such that the product meets its design specifications and has thereby established technological feasibility. Capitalization of these costs ends when the resulting product is available for general release to the public. Amortization of the capitalized software is classified within products cost of goods sold in the Consolidated Statements of Operations. For each capitalized software product, the annual amortization is equal to the greater of: (i) the amount computed using the ratio that the software product’s current fiscal year gross revenue bears to the total current fiscal year and anticipated future gross revenues for that product or (ii) the amount computed based on straight-line method over the remaining estimated economic life of the product, which is a range between three and eight years. The amount by which unamortized software costs exceeds the net realizable value, if any, is recognized as a charge to income in the period it is determined. We capitalized approximately $17.2 million, $13.7 million and $4.9 million during fiscal 2015, 2014 and 2013, respectively. Amortization of non-acquired developed capitalized software was $1.2 million, $0.2 million and $0.1 million during fiscal 2015, 2014 and 2013, respectively.

Adopted and Recently Issued Accounting Pronouncements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which converges the FASB and the International Accounting Standards Board standard on revenue

38

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. In April 2015, the FASB voted for a one-year deferral of the effective date of the new revenue recognition standard. Transition to the new guidance may be done using either a full or modified retrospective method. 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. The adoption of the ASU did not have any impact on our financial statements.

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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We have assets, liabilities, and cash flows in foreign currencies creating foreign exchange risk. We sell products and services internationally and enter into transactions denominated in foreign currencies. As a result, we are subject to the variability that arises from exchange rate movements. For the fiscal years 2015, 2014 and 2013, revenue from international operations was 5%, 5% and 6%, respectively of total revenue. The effects of foreign currency on operating results did not have a material impact on our results of operations for the 2015, 2014 and 2013 fiscal years. At March 31, 2015, a hypothetical 10% weakening of the U.S. dollar would not materially affect our financial statements.

We believe that inflation has had a nominal effect on our results of operations in fiscal years 2015, 2014 and 2013 and do not expect inflation to be a significant factor in fiscal 2015.

39

Item 8.  Financial Statements and SupplementaryData.

Agilysys, Inc. and Subsidiaries

ANNUAL REPORT ON FORM 10-K

Year Ended March 31, 2015

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP	41
Consolidated Balance Sheets as of March 31, 2015 and 2014	42
Consolidated Statements of Operations for the years ended March 31, 2015, 2014, and 2013	43
Consolidated Statements of Comprehensive Loss for the years ended March 31, 2015, 2014, and 2013	44
Consolidated Statements of Cash Flows for the years ended March 31, 2015, 2015 and 2013	45
Consolidated Statements of Shareholders' Equity for the years ended March 31, 2015, 2014, and 2013	46
Notes to Consolidated Financial Statements	47
Schedule II - Valuation and Qualifying Accounts for the years ended March 31, 2015, 2014, and 2013	72

40

Report of Independent Registered Public Accounting Firm

ToBoard of Directors and Shareholders

of Agilysys, Inc. and Subsidiaries:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, comprehensive income (loss), cash flows and shareholders' equity listed in the accompanying index present fairly, in all material respects, the financial position of Agilysys, Inc. and its subsidiaries at March 31, 2015 and March 31, 2014, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2015 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia    

June 5, 2015

41

AGILYSYS, INC.

CONSOLIDATED BALANCE SHEETS

	As of March 31,
(In thousands, except share data)	2015			2014
ASSETS
Cash and cash equivalents	$	75,067		$	99,566
Accounts receivable, net of allowance for doubtful accounts of $888 and $1,101, respectively	25,481			23,615
Inventories	641			481
Prepaid expenses	3,820			3,300
Other current assets	8			2,892
Total current assets	105,017			129,854
Property and equipment, net	11,929			12,251
Goodwill	19,622			17,158
Intangible assets, net	9,006			10,626
Software development costs, net	31,818			17,221
Other non-current assets	4,133			3,785
Total assets	$	181,525		$	190,895
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	16,586		$	11,073
Deferred revenue	23,881			22,795
Accrued liabilities	10,001			14,232
Capital lease obligations, current	142			43
Total current liabilities	50,610			48,143
Deferred income taxes, non-current	3,053			3,422
Capital lease obligations, non-current	47			292
Other non-current liabilities	3,627			6,165
Commitments and contingencies (see Note 13)
Shareholders' equity:
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 22,789,355 and 22,467,970 shares outstanding at March 31, 2015 and 2014, respectively	9,482			9,482
Treasury shares, 8,817,477 and 9,138,861 at March 31, 2015 and 2014, respectively	(2,646		)	(2,741		)
Capital in excess of stated value	(10,675		)	(13,409		)
Retained earnings	128,178			139,675
Accumulated other comprehensive loss	(151		)	(134		)
Total shareholders' equity	124,188			132,873
Total liabilities and shareholders' equity	$	181,525		$	190,895

See accompanying notes to consolidated financial statements.

42

AGILYSYS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year ended March 31,
(In thousands, except per share data)	2015			2014			2013
Net revenue:
Products	$	31,846		$	34,629		$	31,030
Support, maintenance and subscription services	56,013			53,169			49,110
Professional services	15,655			13,463			13,868
Total net revenue	103,514			101,261			94,008
Cost of goods sold:
Products, inclusive of developed technology amortization	18,732			17,027			17,109
Support, maintenance and subscription services	12,461			10,786			10,326
Professional services	12,240			9,408			8,954
Total cost of goods sold	43,433			37,221			36,389
Gross profit	60,081			64,040			57,619
Gross profit margin	58.0		%	63.2		%	61.3		%
Operating expenses:
Product development	25,316			25,212			23,892
Sales and marketing	16,357			14,059			13,350
General and administrative	21,668			20,750			20,984
Depreciation of fixed assets	2,225			2,074			2,137
Amortization of intangibles	3,461			6,414			3,284
Asset write-offs and other fair value adjustments	1,836			327			120
Restructuring, severance, and other charges	1,482			1,392			1,495
Legal settlements	203			—			1,664
Operating loss	(12,467		)	(6,188		)	(9,307		)
Other (income) expenses:
Interest income	(110		)	(123		)	(13		)
Interest expense	48			184			266
Other expense (income), net	146			(863		)	(228		)
Loss before income taxes	(12,551		)	(5,386		)	(9,332		)
Income tax benefit	(1,054		)	(2,491		)	(3,118		)
Loss from continuing operations	(11,497		)	(2,895		)	(6,214		)
Income from discontinued operations, net of taxes	—			19,992			4,916
Net (loss) income	$	(11,497	)	$	17,097		$	(1,298	)
Weighted average shares outstanding - basic and diluted	22,338			22,135			21,880
Net (loss) income per share - basic and diluted:
Loss from continuing operations	$	(0.51	)	$	(0.13	)	$	(0.28	)
Income from discontinued operations	—			0.90			0.22
Net (loss) income per share	$	(0.51	)	$	0.77		$	(0.06	)

See accompanying notes to consolidated financial statements.

43

AGILYSYS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Year ended March 31,
(In thousands)		2015			2014		2013
Net (loss) income		$	(11,497	)	$	17,097	$	(1,298	)
Other comprehensive (loss) income, net of tax:
Unrealized foreign currency translation adjustments		(9		)	220		(1,126		)
Reclassification of foreign currency translation adjustments included in net income (loss)					745		—
Unrealized loss on sale of securities		(8		)	—		(4		)
Total comprehensive (loss) income		$	(11,514	)	$	18,062	$	(2,428	)

See accompanying notes to consolidated financial statements.

44

AGILYSYS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)	Year ended March 31,
	2015			2014			2013
Operating activities
Net income (loss)	$	(11,497	)	$	17,097		$	(1,298	)
Less: Income from discontinued operations	—			19,992			4,916
Loss from continuing operations	(11,497		)	(2,895		)	(6,214		)
Adjustments to reconcile loss from continuing operations to net cash used in operating activities:
Restructuring, severance and other charges	1,482			1,392			1,495
Payments for restructuring, severance and other charges	(1,348		)	(1,741		)	(6,673		)
Legal settlements	203			—			1,664
Payments for legal settlements	(1,714		)	(110		)	—
Asset write-offs	3,454			327			120
Depreciation	2,225			2,074			2,137
Amortization	4,755			6,726			4,089
Share-based compensation	3,140			2,119			1,638
Contingent consideration adjustment	(1,619		)	—			—
Deferred income taxes	(371		)	(178		)	(244		)
Change in cash surrender value of company owned life insurance policies	(57		)	(600		)	(107		)
Excess tax benefit from equity awards	(14		)	(37		)	—
Changes in operating assets and liabilities:
Accounts receivable	(1,935		)	(7,846		)	(741		)
Inventories	(171		)	380			426
Prepaid expense	(526		)	(498		)	(801		)
Accounts payable	5,528			1,073			1,595
Deferred revenue	1,146			2,784			(5,046		)
Accrued liabilities	(3,868		)	1,624			(3,170		)
Income taxes receivable	(823		)	(2,702		)	(2,960		)
Other changes, net	(176		)	(508		)	(258		)
Net cash provided by (used in) operating activities from continuing operations	(2,186		)	1,384			(13,050		)
Net cash (used in) provided by operating activities from discontinued operations	—			(1,311		)	2,345
Net cash provided by (used in) operating activities	(2,186		)	73			(10,705		)
Investing activities
Proceeds from sale of business units	809			35,846			—
Cash paid for acquisitions, net	(3,750		)	(1,812		)	—
Investment in marketable securities	(10,240		)	—			—
Proceeds from sale of marketable securities	10,107			—			4,347
Capital expenditures	(4,650		)	(4,023		)	(2,532		)
Capitalized software development costs	(15,813		)	(12,200		)	(3,906		)
Additional (investments in) proceeds from corporate-owned life insurance policies	1,905			(87		)	(108		)
Net cash provided by (used in) investing activities from continuing operations	(21,632		)	17,724			(2,199		)
Net cash used in investing activities from discontinued operations	—			(155		)	(854		)
Net cash provided by (used in) investing activities	(21,632		)	17,569			(3,053		)
Financing activities
Principal payments under long-term obligations	(144		)	(177		)	(289		)
Exercise of employee stock options	102			169			67
Repurchase of common shares to satisfy employee tax withholding and option price	(373		)	(912		)	(278		)
Excess tax benefit from equity awards	14			37			—
Net cash used in financing activities from continuing operations	(401		)	(883		)	(500		)
Net cash used in financing activities from discontinued operations	—			(80		)	(377		)
Net cash used in financing activities	(401		)	(963		)	(877		)
Effect of exchange rate changes on cash	(280		)	(44		)	(21		)
Cash flows provided by (used in) continuing operations	(24,499		)	18,181			(15,770		)
Cash flows (used in) provided by discontinued operations	—			(1,546		)	1,114
Net increase (decrease) in cash and cash equivalents	(24,499		)	16,635			(14,656		)
Cash and cash equivalents at beginning of period	99,566			82,931			97,587
Cash and cash equivalents at end of period	$	75,067		$	99,566		$	82,931
Less cash presented in current assets of discontinued operations on balance sheet	—			—			487
Cash and cash equivalents at end of period - continuing operations	$	75,067		$	99,566		$	82,444

See accompanying notes to consolidated financial statements.

45

AGILYSYS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

									Capital in						Accumulated
	Common Shares								excess of						other
	Issued			In Treasury					stated			Retained			comprehensive
(In thousands, except share data)	Shares	Stated value		Shares		Stated value			value			earnings			loss			Total
Balance at March 31, 2012	31,607	$	9,482	(9,731	)	$	(2,919	)	$	(16,032	)	$	123,876		$	31		$	114,438
Non-cash share based compensation expense	—	—		—		—			2,057			—			—			2,057
Restricted shares issued	—	—		203		61			(61		)	—			—			—
Shares issued upon exercise of stock options and SSARs	—	—		108		32			35			—			—			67
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares	—	—		(42	)	(12		)	(266		)	—			—			(278		)
Net loss	—	—		—		—			—			(1,298		)	—			(1,298		)
Unrealized translation adjustment	—	—		—		—			—			—			(1,126		)	(1,126		)
Unrealized loss on securities	—	—		—		—			—			—			(4		)	(4		)
Balance at March 31, 2013	31,607	$	9,482	(9,462	)	$	(2,838	)	$	(14,267	)	$	122,578		$	(1,099	)	$	113,856
Non-cash share based compensation expense	—	—		—		—			1,931			—			—			1,931
Restricted shares issued	—	—		138		41			(41		)	—			—			—
Shares issued upon exercise of stock options and SSARs	—	—		814		244			(73		)	—			—			171
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares	—	—		(629	)	(188		)	(996		)	—			—			(1,184		)
Excess tax benefit from equity awards	—	—		—		—			37			—			—			37
Net income	—	—		—		—			—			17,097			'			17,097
Unrealized translation adjustment	—	—		—		—			—			—			220			220
Reclassification of foreign currency translation adjustment included in net income	—	—		—		—			—			—			745			745
Balance at March 31, 2014	31,607	$	9,482	(9,139	)	$	(2,741	)	$	(13,409	)	$	139,675		$	(134	)	$	132,873
Non-cash share based compensation expense	—	—		—		—			3,140			—			—			3,140
Restricted shares issued, net	—	—		342		102			(102		)	—			—			—
Shares issued upon exercise of stock options and SSARs	—	—		21		5			97			—			—			102
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares	—	—		(41	)	(12		)	(415		)	—			—			(427		)
Excess tax benefit from equity awards	—	—		—		—			14			—			—			14
Net income	—	—		—		—			—			(11,497		)	—			(11,497		)
Unrealized translation adjustments	—	—		—		—			—			—			(9		)	(9		)
Unrealized loss on securities	—	—		—		—			—			—			(8		)	(8		)
Balance at March 31, 2015	31,607	$	9,482	(8,817	)	$	(2,646	)	$	(10,675	)	$	128,178		$	(151	)	$	124,188

See accompanying notes to consolidated financial statements.

46

Agilysys, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Table amounts in thousands, except per share data)

1. Nature of Operations

Agilysys is a leading technology company that provides innovative software for point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document management and mobile and wireless solutions and services to the hospitality industry. Our solutions and services allow property managers to better connect, interact and transact with their customers and enhance their customer relationships by streamlining operations, improving efficiency, increasing guest recruitment and wallet share, and enhancing the overall guest experience. We serve 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.

We operate throughout North America, Europe and Asia, with corporate services located in Alpharetta, GA, and offices in Singapore, Hong Kong and Malaysia.

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 the Condensed Consolidated Statement of Cash Flows for the twelve months ended March 31, 2014 and 2013.

Reference herein to any particular year or quarter refers to periods within the fiscal year ended March 31. For example, fiscal 2015 refers to the fiscal year ended March 31, 2015.

2. Summary of Significant Accounting Policies

Principles of consolidation.  The consolidated financial statements include the accounts of Agilysys, Inc. and subsidiaries. Investments in affiliated companies are accounted for by the equity or cost method, as appropriate. All inter-company accounts have been eliminated. Unless otherwise indicated, amounts in Notes to Consolidated Financial Statements refer to continuing operations.

Use of estimates.  Preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Cash and cash equivalents. We consider all highly liquid investments purchased with an original maturity from date of acquisition of three months or less to be cash equivalents. Other highly liquid investments considered cash equivalents with no established maturity date are fully redeemable on demand (without penalty) with settlement of principal and accrued interest on the following business day after instruction to redeem. Such investments are readily convertible to cash with no penalty and can include certificates of deposit, commercial paper, treasury bills, money market funds and other investments.

Allowance for doubtful accounts.  We maintain allowances for doubtful accounts for estimated losses resulting from the inability or unwillingness of our customers to make required payments. These allowances are based on both recent trends of certain customers estimated to be a greater credit risk as well as historic trends of the entire customer pool. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. To mitigate this credit risk we perform periodic credit evaluations of our customers.

Inventories.  Our inventories are comprised of finished goods. Inventories are stated at the lower of cost or market, net of related reserves. The cost of inventory is computed using a weighted-average method. Our inventory is monitored to ensure appropriate valuation. Adjustments of inventories to the lower of cost or market, if necessary, are based upon contractual provisions such as turnover and assumptions about future demand and market conditions. If assumptions about future demand change and/or actual market conditions are less favorable than those projected by management, additional adjustments to inventory valuations may be required. We provide a reserve for obsolescence, which is calculated based on several factors, including an analysis of historical sales of products and the age of the inventory. Actual amounts could be different from those estimated.

Goodwill and Other Indefinite-Lived Intangible Assets.  Goodwill represents the excess purchase price paid over the fair value of the net assets of acquired companies. Goodwill is subject to impairment testing at least annually, unless it is determined after a qualitative assessment that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount. Goodwill is

47

measured for impairment on an annual basis, or in interim periods if indicators of potential impairment exist. The Company is also required to compare the fair values of other indefinite-lived intangible assets to their carrying amounts at least annually, or when current events and circumstances require an interim assessment. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized.

For fiscal 2015 and 2014, we conducted a qualitative assessment (Step Zero Analysis) to determine whether it would be necessary to perform step one of the two-step goodwill impairment test. It was determined based on the Step Zero Analysis that it is more likely than not that the fair value exceeded the carrying amount as of February 1, 2015. Additional information regarding our goodwill and impairment analyses is provided in Note 7, Goodwill and Intangible Assets.

We had two indefinite-lived intangible assets relating to purchased trade names. During the fourth quarter of fiscal 2015, one of the two trade names was determined to have a finite life and subsequently written down to its fair value to be amortized over five years. The remaining indefinite-lived intangible asset is not amortized; rather, it is tested for impairment at least annually by comparing the carrying amount of the asset with the fair value. An impairment loss is recognized if the carrying amount is greater than fair value. The income approach using “the relief from royalty method” was used to value the trade names as of February 1, 2015. Additional information regarding our intangible assets and impairment analyses is provided in Note 7, Goodwill and Intangible Assets.

Intangible assets.  Purchased intangible assets with finite lives are primarily amortized using the straight-line method over the estimated economic lives of the assets. Purchased intangible assets relating to customer relationships are amortized using an accelerated or straight-line method, which reflects the period the asset is expected to contribute to the future cash flows. Our finite-lived intangible assets are amortized over periods between two and eight years. Customer relationships are amortized over estimated useful lives between two and seven years; non-competition agreements are amortized over estimated useful lives between two and eight years; developed technology is amortized over estimated useful lives between three and eight years; supplier relationships are amortized over estimated useful lives between two and eight years.

Long-lived assets.  Property and equipment are recorded at cost. Major renewals and improvements are capitalized. Minor replacements, maintenance, repairs, and reengineering costs are expensed as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized.

Depreciation and amortization are provided in amounts sufficient to amortize the cost of the assets, including assets recorded under capital leases, which make up less than one percent of total assets, over their estimated useful lives using the straight-line method. The estimated useful lives for depreciation and amortization are as follows: buildings and building improvements - 7 to 30 years; furniture - 7 to 10 years; equipment - 3 to 10 years; software - 3 to 10 years; and leasehold improvements over the shorter of the economic life or the lease term. Internal use software costs are expensed or capitalized depending on the project stage. Amounts capitalized are amortized over the estimated useful lives of the software, ranging from 3 to 10 years, beginning with the project's completion. Capitalized project expenditures are not depreciated until the underlying project is completed.

We evaluate the recoverability of our long-lived assets whenever changes in circumstances or events may indicate that the carrying amounts may not be recoverable. An impairment loss is recognized in the event the carrying value of the assets exceeds the future undiscounted cash flows attributable to such assets.

Foreign currency translation.  The financial statements of our foreign operations are translated into U.S. dollars for financial reporting purposes. The assets and liabilities of foreign operations whose functional currencies are not in U.S. dollars are translated at the period-end exchange rates, while revenue and expenses are translated at weighted-average exchange rates during the fiscal year. The cumulative translation effects are reflected as a component of “Accumulated other comprehensive loss” within shareholders' equity in the Consolidated Balance Sheets. Gains and losses on monetary transactions denominated in other than the functional currency of an operation are reflected within “Other (income) expenses, net” in the Consolidated Statements of Operations. Foreign currency gains and losses from changes in exchange rates have not been material to our consolidated operating results.

Revenue recognition.   We derive revenue from the sale of products (i.e., server, storage, and point of sale hardware, and software), support, maintenance and subscription services and professional services. Revenue is recorded in the period in which the goods are delivered or services are rendered and when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price to the customer is fixed or determinable, and collection is reasonably assured. We reduce revenue for estimated discounts, sales incentives, estimated customer returns, and other allowances. Discounts are offered based on the volume of products and services purchased by customers. Shipping and handling fees billed to customers are recognized as revenue and the related costs are recognized in cost of goods sold. Revenue is recorded net of any applicable taxes collected and remitted to governmental agencies.

We frequently enter into multiple-element arrangements with customers including hardware, software, professional consulting services and maintenance support services. For arrangements involving multiple deliverables, when deliverables include software and non-

48

software products and services, we evaluate and separate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (a) the delivered item has value to the customer on a stand-alone basis; and (b) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in our control.

Consideration is allocated to each unit of accounting based on the unit's relative selling prices. In such circumstances, we use a hierarchy to determine the selling price to be used for allocating revenue to each deliverable: (i) vendor-specific objective evidence of selling price (VSOE), (ii) third-party evidence of selling price (TPE), and (iii) best estimate of selling price (BESP). VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable. VSOE is established for our software maintenance services and we use TPE or BESP to establish selling prices for our non-software related services. BESP is primarily used for elements that are not consistently priced within a narrow range or TPE is not available. We determine BESP for a deliverable by considering multiple factors including product class, geography, average discount, and management's historical pricing practices. Amounts allocated to the delivered hardware and software elements are recognized at the time of sale provided the other conditions for revenue recognition have been met. Amounts allocated to the undelivered maintenance and other services elements are recognized as the services are provided or on a straight-line basis over the service period. In certain instances, customer acceptance is required prior to the passage of title and risk of loss of the delivered products. In such cases, revenue is not recognized until the customer acceptance is obtained. Delivery and acceptance generally occur in the same reporting period.

In situations where our solutions contain software that is more than incidental, revenue related to the software and software-related elements is recognized in accordance with authoritative guidance on software revenue recognition. For the software and software-related elements of such transactions, revenue is allocated based on the relative fair value of each element, and fair value is determined by VSOE. If we cannot objectively determine the fair value of any undelivered element included in such multiple-element arrangements, we defer revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements. When the fair value of a delivered element has not been established, but fair value exists for the undelivered elements, we use the residual method to recognize revenue. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue.

Revenue recognition for complex contractual arrangements, especially those with multiple elements, requires a significant level of judgment and is based upon a review of specific contracts, past experience, the selling price of undelivered elements when sold separately, creditworthiness of customers, international laws and other factors. Changes in judgments about these factors could impact the timing and amount of revenue recognized between periods.

Revenue for hardware sales is recognized when the product is shipped to the customer and when obligations that affect the customer's final acceptance of the arrangement have been fulfilled. A majority of our hardware sales involves shipment directly from its suppliers to the end-user customers. In these transactions, we are responsible for negotiating price both with the supplier and the customer, payment to the supplier, establishing payment terms and product returns with the customer, and we bear the credit risk if the customer does not pay for the goods. As the principal contact with the customer, we recognize revenue and cost of goods sold when we are notified by the supplier that the product has been shipped. In certain limited instances, as shipping terms dictate, revenue is recognized upon receipt at the point of destination or upon installation at the customer site.

We offer proprietary software as well as remarketed software for sale to our customers. We offer our customers the right to license the software under a variety of models. Our customers can license our software under a perpetual model for an upfront fee or a subscription model. For subscription arrangements, we allow customers the right to use software, receive unspecified products as well as unspecified upgrades and enhancements and entitle the customer to receive hosting services for a specified term.  The subscription revenue is generally recognized ratably over the term of the arrangement, typically three to five years.  Revenue from subscription service arrangements is included in Support, maintenance and subscription services in the Consolidated Statements of Operations. A majority of our software sales do not require significant production, modification, or customization at the time of shipment (physically or electronically) to the customer. Substantially all of our software license arrangements do not include acceptance provisions. As such, revenue from both proprietary and remarketed software sales is typically recognized when the software has been shipped. For software delivered electronically, delivery is considered to have occurred when the customer either takes possession of the software via downloading or has been provided with the requisite codes that allow for immediate access to the software based on the U.S. Eastern time zone time stamp.

We also offer proprietary and third-party services to our customers. Proprietary services generally include: consulting, installation, integration and training. Many of our software arrangements include consulting services sold separately under consulting engagement contracts. When the arrangements qualify as service transactions, consulting revenue from these arrangements are accounted for separately from the software revenue. The significant factors considered in determining whether the revenue should be accounted for separately include the nature of the services (i.e., consideration of whether the services are essential to the functionality of the software), degree of risk, availability of services from other vendors, timing of payments, and the impact of milestones or other

49

customer acceptance criteria on revenue realization. If there is significant uncertainty about the project completion or receipt of payment for consulting services, the revenue is deferred until the uncertainty is resolved.

For certain long-term proprietary service contracts with fixed or “not to exceed” fee arrangements, we estimate proportional performance using the hours incurred as a percentage of total estimated hours to complete the project consistent with the percentage-of-completion method of accounting. Accordingly, revenue for these contracts is recognized based on the proportion of the work performed on the contract. If there is no sufficient basis to measure progress toward completion, the revenue is recognized when final customer acceptance is received. Adjustments to contract price and estimated service hours are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. The aggregate of collections on uncompleted contracts in excess of related revenue is shown as a current liability

If an arrangement does not qualify for separate accounting of the software and consulting services, then the software revenue is recognized together with the consulting services using the percentage-of-completion or completed contract method of accounting. Contract accounting is applied to arrangements that include: milestones or customer-specific acceptance criteria that may affect the collection of revenue, significant modification or customization of the software, or provisions that tie the payment for the software to the performance of consulting services.

We also offer proprietary and third-party support to our customers. Support generally includes: support and maintenance of software and hardware products and subscription services. Revenue relating to proprietary support services is recognized evenly over the coverage period of the underlying agreement within support, maintenance and subscription revenue. In instances where we offer third-party support contracts to our customer, and the supplier is determined to be the primary obligor in the transaction, we report revenue at the time of the sale, only in the amount of the “commission” (equal to the selling price less the cost of sale) received rather than reporting revenue in the full amount of the selling price with separate reporting of the cost of sale.

Comprehensive (loss) income. Comprehensive (loss) income is the total of net (loss) income, as currently reported under GAAP, plus other comprehensive (loss) income. Other comprehensive (loss) income considers the effects of additional transactions and economic events that are not required to be recorded in determining net (loss) income, but rather are reported as a separate statement of comprehensive (loss) income.

Fair value measurements. We measure the fair value of financial assets and liabilities on a recurring or non-recurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. In determining fair value of financial assets and liabilities, we use various valuation techniques. Additional information regarding fair value measurements is provided in Note 16, Fair Value Measurements.

Investments in corporate-owned life insurance policies and marketable securities. Agilysys invests in corporate-owned life insurance policies and has historically invested in marketable securities primarily to satisfy future obligations of our employee benefit plans, including a benefit equalization plan (“BEP”) and supplemental executive retirement plan (“SERP”). Certain of these corporate-owned life insurance policies were held in a Rabbi Trust and were classified within “Other non-current assets” in the Consolidated Balance Sheets. Our investment in corporate-owned life insurance policies were recorded at their cash surrender value, which approximates fair value, at the balance sheet date. All obligations related to our employee benefit plans, BEP and SERP, were fulfilled in April 2012 with funds held in the Rabbi Trust.

Certain of these corporate-owned life insurance policies are endorsement split-dollar life insurance arrangements. We entered into a non-cancelable separate agreement with each of the former executives covered by these arrangements whereby we must maintain the life insurance policy for the specified amount and split a portion of the policy benefits with the former executive's designated beneficiary.

Additional information regarding the investments in corporate-owned life insurance policies and marketable securities is provided in Note 12, Employee Benefit Plans.

Income Taxes.  Income tax expense includes U.S. and foreign income taxes and is based on reported income before income taxes. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities are determined based on the enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or realized.

We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical

50

taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies.

We recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from uncertain tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet this threshold. Interest related to uncertain tax positions is recognized as part of the provision for income taxes and is accrued beginning in the period that such interest would be applicable under relevant tax law until such time that the related tax benefits are recognized. Our income taxes are described further in Note 11, Income Taxes.

Changes to Prior Period Presentation. In the first quarter of fiscal 2014, as a result of increased visibility into our services organization, certain costs previously classified in product development expenses were recorded in cost of goods sold to more properly reflect the nature of these expenses. The portion of these expenses that was erroneously recorded in previous periods was immaterial to the overall financial statements. Prior period presentation has been modified to conform to the current presentation.

Correction of Error.  During the first quarter of fiscal 2013, we recorded out-of-period adjustments to increase revenues, restructuring, severance and other charges and asset write-offs and other fair value adjustments by $0.3 million, $0.7 million and $0.2 million, respectively. The net impact of the adjustments increased our operating loss by $0.6 million, or $(0.03) per share, and represents a correction of error. In fiscal 2012, we erroneously omitted certain revenue transactions, the costs associated with certain terminated individuals and certain third party development costs for our previously impaired developed technology. Management performed an evaluation under Staff Accounting Bulletin No. 108 and concluded the effect of the adjustment was immaterial to prior year’s financial statements as well as the full-year fiscal 2013 financial statements.

Capitalized Software Development Costs.  The capitalization of software development cost for external use begins when a product’s technological feasibility has been established. Capitalization ends when the resulting product is available for general market release. Amortization of the capitalized software is classified within products cost of goods sold in the Consolidated Statements of Operations. For each capitalized software product, the annual amortization is equal to the greater of: (i) the amount computed using the ratio that the software product’s current fiscal year gross revenue bears to the total current fiscal year and anticipated future gross revenues for that product or (ii) the amount computed based on straight-line method over the remaining estimated economic life of the product, which is a range between three and eight years. The amount by which unamortized software costs exceeds the net realizable value, if any, is recognized as a charge to income in the period it is determined. We capitalized approximately $17.2 million, $13.7 million and $4.9 million during fiscal 2015, 2014 and 2013, respectively. Amortization of non-acquired developed capitalized software was $1.2 million, $0.2 million and $0.1 million during fiscal 2015, 2014 and 2013, respectively.

Adopted and Recently Issued Accounting Pronouncements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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. In April 2015, the FASB voted for a one-year deferral of the effective date of the new revenue recognition standard. Transition to the new guidance may be done using either a full or modified retrospective method. 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. The adoption of the ASU did not have any impact on our financial statements.

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.

51

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.

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 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. 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 five years. 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. As of March 31, 2015, we recorded a gain of $1.6 million to adjust the carrying value of the TMC contingent consideration to fair value. This adjustment was recorded as a result of a decrease in expected revenues associated with the contingent consideration. The gain was recorded within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

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 Consolidated Financial Statements from the date of acquisition and did not have a material impact on our Consolidated Financial Statements or related disclosures.

52

The following is a summary of the estimated 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 fifteen 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 software to be sold, leased, or otherwise marketed, and is therefore carried in intangible assets on the balance sheet and is amortized on a straight-line basis as Products cost of goods sold within the Consolidated Statements of Operations.

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. During fiscal 2015 we received full payment of the amount due to Agilysys from Verteda. 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. The sale of our UK entity represented a disposal of a component of an entity. As such, the operating results of the UK entity have been reported as a component of discontinued operations in the Consolidated Statements of Operations for the periods presented. In addition, the assets and liabilities of the UK entity are classified as discontinued operations in our Consolidated Balance Sheets for the periods presented.

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 with Kyrus, under which we provided certain transitional administrative and support services to Kyrus through January 31, 2014. The sale of RSG represented a disposal of a component of an entity. As such, the operating results of RSG have been reported as a component of discontinued operations in the Consolidated Statements of Operations for the periods presented.

53

Components of Results of Discontinued Operations

For fiscal 2014 and 2013, the income from discontinued operations was comprised of the following:

	Year ended March 31,
(In thousands)	2014			2013
Discontinued operations:
Net revenue	$	28,950		$	143,261
Income from operations	249			$	8,196
Other expense, net	(266		)	(447		)
Gain on sale	21,933			—
Income on sale	21,916			7,749
Income tax expense	1,924			2,833
Income from discontinued operations	$	19,992		$	4,916

The gain on sale included in "Income from discontinued operations" in fiscal 2014 includes a reclassification of foreign currency translation adjustments of $0.7 million, net of taxes as a result of the sale of the UK entity.

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. In addition, we assess the property and equipment associated with the related facilities for impairment. The remaining useful lives of property and equipment associated with the related operations are re-evaluated based on the respective restructuring plan, resulting in the acceleration of depreciation and amortization of certain assets.

Fiscal 2015 Restructuring Activity

Q2 - 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 Q2 fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of March 31, 2015, there was no further liability for the Q2 fiscal 2015 restructuring activity.

Q4 - In the fourth quarter of fiscal 2015, we announced additional restructuring actions designed to continue the effort 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 $0.5 million in restructuring charges related to the Q4 fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of March 31, 2015, we had a remaining liability of approximately $0.5 million recorded for the Q4 fiscal 2015 restructuring activity.

Fiscal 2014 Restructuring Activity

Q1 - 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. These restructuring activities were completed in fiscal 2014. We recorded $0.7 million in restructuring charges during fiscal 2014, comprised of severance and other employee related benefits. As of March 31, 2014, there was no further liability for the Q1 fiscal 2014 restructuring activity.

Q4 - 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. We recorded approximately $0.6 million in restructuring charges during fiscal 2014, comprised of severance and other employee related benefits. As of March 31, 2014, we had a remaining liability of approximately $0.5 million recorded for the Q4 fiscal 2014 restructuring activity.

Fiscal 2012 Restructuring Activity

In the first quarter of fiscal 2012, we announced restructuring actions, including the relocation of our corporate services from Solon, Ohio to Alpharetta, Georgia, designed to better align those services with our operating units and reduce costs following the sale of TSG. These restructuring actions were mostly completed by March 31, 2012 and impacted approximately 130 employees. To date, we

54

have recorded $12.1 million in restructuring charges. These charges were primarily comprised of severance and related benefits. As of March 31, 2015, there was no further liability for fiscal 2012 restructuring activity.

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

	Balance at								Balance at
	March 31,								March 31,
(In thousands)	2014		Provision			Payments			2015
Fiscal 2015 Restructuring Plan:
Severance and employment costs	$	—	$	628		$	(178	)	$	450
Fiscal 2014 Restructuring Plan:
Severance and employment costs	534		368			(902		)	—
Total restructuring costs	534		996			(1,080		)	450
	Balance at								Balance at
	March 31,								March 31,
(In thousands)	2013		Provision			Payments			2014
Fiscal 2014 Restructuring Plan:
Severance and employment costs	—		1,257			(723		)	534
Fiscal 2012 Restructuring Plan:
Severance and employment costs	348		—			(348		)	—
Fiscal 2009 Restructuring Plan:
Facilities costs	236		32			(268		)	—
Total restructuring costs	584		1,289			(1,339		)	534
	Balance at								Balance at
	March 31,					Payments and			March 31,
(In thousands)	2012		Provision			Settlements			2013
Fiscal 2012 Restructuring Plan:
Severance and employment costs	$	5,257	$	1,146		$	(6,055	)	$	348
Facilities costs	297		(57		)	(240		)	—
Fiscal 2009 Restructuring Plan:
Severance and employment costs	—		—			—			—
Facilities costs	495		(2		)	(257		)	236
Total restructuring costs	$	6,049	$	1,087		$	(6,552	)	$	584

The remaining severance and other employment costs of approximately $0.45 million will be paid in fiscal 2016.

6. Property and Equipment, Net

Property and equipment at March 31, 2015 and 2014 is as follows:

	Year ended March 31,
(In thousands)	2015			2014
Furniture and equipment	$	8,241		$	8,849
Software	8,196			16,982
Leasehold improvements	4,773			4,836
Project expenditures not yet in use	866			2,749
	22,076			33,416
Accumulated depreciation and amortization	(10,147		)	(21,165		)
Property and equipment, net	$	11,929		$	12,251

55

Total depreciation expense on property and equipment was $2.2 million, $2.1 million, and $2.1 million during fiscal 2015, 2014 and 2013, respectively.

Total amortization expense on capitalized internal-use software was $2.5 million, $5.3 million and $2.1 million during fiscal 2015, 2014, and 2013, respectively. In fiscal 2014, we initiated an internal enterprise resource planning (ERP) system replacement project and determined that amortization for our existing ERP system should be accelerated. We recorded approximately $3.2 million in fiscal 2014 of additional amortization in connection with this acceleration. The existing ERP system was fully amortized as of June 30, 2014.

During the fourth quarter of fiscal 2015, a shift in customer preference for next generation offerings with more features and compatibility as compared to our Elevate™ POS hosted subscription solution, resulted in a write-off in the amount of $1.5 million. In fiscal 2014, we wrote off approximately $0.3 million related to certain internal use software in connection with the ERP system replacement project. These charges are classified within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

Assets under capital leases are included in property and equipment categories above. Total assets under capital leases at March 31, 2015 and 2014 are as follows:

	Year ended March 31,
(In thousands)	2015			2014
Capital leases	$	499		$	817
Less accumulated depreciation	(213		)	(692		)
Assets under capital lease, net	$	286		$	125

7. Goodwill, Intangible Assets and Software Development Costs

Agilysys allocates the cost of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the cost over the fair value of the identified net assets acquired is recorded as goodwill.

Goodwill

Agilysys tests goodwill for impairment at the reporting unit level upon identification of impairment indicators, or at least annually. A reporting unit is the operating segment or one level below the operating segment (depending on whether certain criteria are met). Goodwill was allocated to our reporting units that are anticipated to benefit from the synergies of the business combinations generating the underlying goodwill. Agilysys has one operating segment.

We conducted our annual qualitative assessment (Step Zero Analysis) test on February 1, 2015 and 2014 to determine whether it would be necessary to perform the two-step goodwill impairment test. Among other things, we considered the i) excess in fair value of the reporting unit over its carrying amount from the most recent step one calculation, ii) macroeconomic conditions, iii) industry and market trends, and iv) overall financial performance. It was determined based on the Step Zero Analysis that it is more likely than not that the fair value of the operations exceeded its carrying amount.

The changes in the carrying amount of goodwill for the years ended March 31, 2015 and 2014 are as follows:

(In thousands)
Balance at March 31, 2013	$	14,128
Acquisitions	3,444
Impact of foreign currency translation	196
Allocation of goodwill to UK entity	(610		)
Balance at March 31, 2014	17,158
Acquisitions	2,464
Balance at March 31, 2015	$	19,622

56

Intangible Assets and Software Development Costs

The following table summarizes our intangible assets at March 31, 2015, and 2014:

	2015									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		$	(10,775	)	$	—		$	10,775	$	(10,080	)	$	695
Non-competition agreements	2,700			(2,700		)	—			2,700		(2,473		)	227
Developed technology	10,660			(10,277		)	383			10,660		(10,156		)	504
Trade names	230			(7		)	223			—		—			—
Patented technology	80			(80		)	—			80		(80		)	—
	24,445			(23,839		)	606			24,215		(22,789		)	1,426
Unamortized intangible assets:
Trade names	9,200			N/A			9,200			9,200		N/A			9,200
Accumulated impairment	(570		)	N/A			(570		)	—		N/A			—
Finite life reclassification	(230		)	N/A			(230		)	—		N/A			—
	8,400			N/A			8,400			9,200		N/A			9,200
Total intangible assets	$	32,845		$	(23,839	)	$	9,006		$	33,415	$	(22,789	)	$	10,626
Software development costs	$	6,359		$	(1,443	)	$	4,916		$	5,094	$	(270	)	$	4,824
Project expenditures not yet in use	28,293			—			28,293			12,397		—			12,397
Accumulated impairment	(1,391		)	N/A			(1,391		)	—		N/A			—
Total software development costs	$	33,261		$	(1,443	)	$	31,818		$	17,491	$	(270	)	$	17,221

Indefinite-lived intangible assets, comprised of two purchased trade names InfoGenesis™ and Eatec®, are tested for impairment upon identification of impairment indicators, or at least annually. An impairment loss is recognized if the carrying amount is greater than fair value. The income approach using "the relief from royalty method" was used to value the trade names as of February 1, 2015 and 2014. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. This approach is dependent on a number of factors, including estimates of future cash flows, royalty rates, discount rates and other variables.

During the fourth quarter of fiscal 2015, certain restructuring activities incurred to better align product development, sales and marketing and general and administrative functions impacted the expected remaining useful life of the products under the Eatec® trade name. The trade name was determined to have a finite life and subsequently written down to its fair value to be amortized over five years. The fair value of this trade name was calculated based on future cash flows over the remaining useful life resulting in an impairment charge of $0.6 million as of March 31, 2015. This charge is classified within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations. The InfoGenesis™ indefinite-lived purchased trade name was tested for impairment as of February 1, 2015 and 2014, resulting in a fair value exceeding the carrying amount each year.

At each balance sheet date, the unamortized capitalized software development costs for external use is compared to the net realizable value of that product. The amount by which unamortized software costs exceeds the net realizable value, if any, is recognized as a charge to income in the period it is determined. As of March 31, 2015, we determined that the remaining net book value of our InfoGenesis Mobile (IG Mobile) software exceeded its net realizable value resulting in an impairment charge of $1.4 million. This charge is classified within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

57

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

	Estimated
	Amortization
(In thousands)	Expense
Fiscal year ending March 31,
2016	$	1,068
2017	1,067
2018	1,067
2019	844
2020	85
Total	$	4,131

Amortization expense related to software development costs related to assets to be sold, leased, or otherwise marketed was $1.3 million, $0.3 million and $0.8 million for the fiscal years ended March 31, 2015, 2014 and 2013, respectively. These charges are included as Products cost of goods sold within the Consolidated Statements of Operations. Amortization expense relating to other definite-lived intangible assets was $0.9 million, $1.2 million, and $1.2 million for the fiscal years ended March 31, 2015, 2014 and 2013, respectively. These charges are classified as operating expenses within the Consolidated Statements of Operations.

Capitalized software development costs are carried on our balance sheet at net realizable value, net of accumulated amortization. We capitalized approximately $17.2 million, $13.7 million and $4.9 million during fiscal 2015, 2014 and 2013, respectively.

8. Financing Arrangements

The following is a summary of long-term obligations at March 31, 2015, and 2014:

(In thousands)	2015			2014
Capital lease obligations	$	189		$	335
Less: current maturities	(142		)	(43		)
Long -term capital lease obligations	$	47		$	292

Capital Leases

Agilysys leases certain equipment under capital leases expiring in various years through fiscal 2018. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are depreciated over the shorter of their related lease terms or their estimated productive lives. Assets recorded under capital leases were $0.5 million and $0.8 million, as of March 31, 2015 and 2014, respectively. Accumulated depreciation related to assets recorded under capital leases was $0.2 million and $0.7 million as of March 31, 2015 and 2014, respectively. Depreciation of assets under capital leases is included in depreciation expense.

Minimum future lease payments under capital leases as of March 31, 2015, are as follows:

(In thousands)	Amount
Fiscal year ending March 31,
2016	$	147
2017	30
2018	19
Total minimum lease payments	$	196
Less: amount representing interest	(7		)
Present value of minimum lease payments	$	189

Interest rates on capitalized leases vary from 2.6% to 10.1% and are imputed based on the lower of our incremental borrowing rate at the inception of each lease or the lessor's implicit rate of return.

58

9. Supplemental Disclosures of Cash Flow Information

Additional information related to the Consolidated Statements of Cash Flows is as follows:

	Year ended March 31,
(In thousands)	2015		2014	2013
Cash (received) payments for interest, net	(62	)	110	252
Cash payments from income tax, net	19		485	9
Acquisition of property and equipment under lease obligations	—		410	41

10. Additional Balance Sheet Information

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

	Year ended March 31,
(In thousands)	2015		2014
Accrued liabilities:
Salaries, wages, and related benefits	$	6,768	$	8,308
Other taxes payable	952		1,122
Accrued legal settlements	70		1,630
Restructuring liabilities	450		534
Severance liabilities	199		—
Professional fees	504		674
Software license fees	—		500
Deferred rent	279		477
Contingent consideration	8		127
Other	771		860
Total	$	10,001	$	14,232
Other non-current liabilities:
Income taxes payable/uncertain tax positions	$	1,499	$	2,440
Deferred rent	1,666		1,755
Contingent consideration	104		1,612
Other	358		358
Total	$	3,627	$	6,165

Accounts Receivable, net

Accounts receivable, net of allowance for doubtful accounts was $25.5 million and $23.6 million as of March 31, 2015 and March 31, 2014, respectively. The related allowance for doubtful accounts was $0.9 million and $1.1 million as of March 31, 2015 and March 31, 2014, respectively. On January 12, 2015, an involuntary bankruptcy petition was filed against Caesars Entertainment Operating Company, Inc. (Caesars) under Chapter 11 of the U.S. Bankruptcy Code. On January 15, 2015, Caesars and certain of its affiliates filed a voluntary bankruptcy petition under Chapter 11. Those cases have been consolidated in the United States Bankruptcy Court for the Northern District of Illinois. At March 31, 2015, our accounts receivables owing by Caesars and its affiliates who have filed a bankruptcy petition totaled approximately $3.2 million, including both pre- and post-petition claims.  The total amount owed represents approximately 13% of our outstanding accounts receivable as of March 31, 2015. As of May 26, 2015, we filed a proof of claim with the Bankruptcy Court identifying approximately $0.7 million of pre-petition claims still outstanding. Caesars entertainment properties have continued to operate in the ordinary course following the bankruptcy filing, and we have continued to do business with Caesars in the ordinary course.

59

11. Income Taxes

For the year ended March 31, income from continuing operations before income taxes consisted of the following:

(In thousands)	2015			2014			2013
Loss before income taxes
United States	$	(12,697	)	$	(5,475	)	$	(9,594	)
Foreign	146			89			262
Total loss from continuing operations before income taxes	$	(12,551	)	$	(5,386	)	$	(9,332	)

For the year ended March 31, income tax (benefit) expense consisted of the following:

(In thousands)	2015			2014			2013
Income tax (benefit) expense
Current:
Federal	$	25		$	(2,206	)	$	(3,002	)
State and local	(798		)	(161		)	28
Foreign	90			55			100
Deferred:
Federal	(206		)	(161		)	—
State and local	(141		)	(20		)	(252		)
Foreign	(24		)	2			8
Total income tax benefit	$	(1,054	)	$	(2,491	)	$	(3,118	)

The following table presents the principal components of the difference between the effective tax rate for continuing operations to the U.S. federal statutory income tax rate for the years ended March 31:

(In thousands)	2015			2014			2013
Income tax benefit at the statutory rate of 35%	$	(4,405	)	$	(2,103	)	$	(3,266	)
(Benefit) provision for state taxes	(172		)	(106		)	(14		)
Impact of foreign operations	11			14			(48		)
Indefinite life assets	—			47			(251		)
Officer life insurance	(20		)	(28		)	(75		)
Change in valuation allowance	4,241			(76		)	627
Change in liability for unrecognized tax benefits	(857		)	(561		)	(230		)
Meals and entertainment	102			113			114
Other	46			209			25
Total income tax benefit	$	(1,054	)	$	(2,491	)	$	(3,118	)

Our tax provision includes a provision for income taxes in certain foreign jurisdictions where subsidiaries are profitable, but only a minimal benefit is reflected related to U.S. and certain foreign tax losses due to the uncertainty of the ultimate realization of future benefits from these losses. The 2015 tax benefit primarily results from the expiration of statute of limitations for unrecognized tax positions and the recognition of a valuation allowance on the Eatec purchased trade name deferred tax liability that was converted from an indefinite life to a finite life. The 2015 tax benefit differs from the statutory rate primarily due to the recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, a decrease in unrecognized tax benefits attributable to expiration of statute of limitations, state taxes and other U.S. permanent book to tax differences.

The 2014 and 2013 tax benefit differs from the statutory rate primarily due to the intra-period tax allocation rules associated with the discontinued operations and recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance. Other items affecting the rate include a decrease in unrecognized tax benefits attributable to expiration of statute of limitations, state taxes and other U.S. permanent book to tax differences.

60

Deferred tax assets and liabilities as of March 31, are as follows:

(In thousands)	2015			2014
Deferred tax assets:
Accrued liabilities	$	3,961		$	3,884
Allowance for doubtful accounts	297			408
Inventory valuation reserve	24			14
Restructuring reserve	—			54
Federal losses and credit carryforwards	58,992			55,231
Foreign net operating losses	326			330
State losses and credit carryforwards	10,162			10,706
Deferred compensation	—			70
Deferred revenue	146			61
Goodwill and other intangible assets	3,129			3,611
Other	340			514
	77,377			74,883
Less: valuation allowance	(76,420		)	(73,014		)
Total	957			1,869
Deferred tax liabilities:
Property and equipment & software amortization	(690		)	(1,560		)
Indefinite-lived goodwill & intangible assets	(3,324		)	(3,622		)
Other	34			(81		)
Total	(3,980		)	(5,263		)
Total deferred tax liabilities	$	(3,023	)	$	(3,394	)

At March 31, 2015, we had $170.3 million of a federal net operating loss carryforward that expires, if unused, in fiscal years 2031 to 2035. Included in this net operating loss is $4.2 million of tax deductions in excess of recorded windfall tax benefits associated with stock-based compensation. Upon realization of the U.S. federal net operating losses, we will recognize a windfall tax benefit as an increase to additional paid-in capital. Our Hong Kong subsidiary has $0.3 million of net operating loss carryforwards that can be carried forward indefinitely. At March 31, 2015 we also had $143.7 million of state net operating loss carryforwards that expire, if unused, in fiscal years 2016 through 2035.

We recorded valuation allowances related to certain deferred income tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets. At March 31, 2015, the total valuation allowance against deferred tax assets of $76.4 million was comprised of a valuation allowance of $76.1 million for federal and state deferred tax assets, and a valuation allowance of $0.3 million associated with deferred tax assets in Hong Kong. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. 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. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected taxable income, and tax planning strategies in making this assessment. In order to fully realize the deferred tax assets, we will need to generate future taxable income before the expiration of the deferred tax assets governed by the tax code. 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.

The undistributed earnings of our foreign subsidiaries are not subject to U.S. federal and state income taxes unless such earnings are distributed in the form of dividends or otherwise to the extent of current and accumulated earnings and profits. The undistributed earnings of foreign subsidiaries are permanently reinvested and totaled $0.7 million and $1.8 million as of March 31, 2015 and 2014, respectively. We made the determination of permanent reinvestment on the basis of sufficient evidence that demonstrates we will invest the undistributed earnings overseas indefinitely for use in working capital, as well as foreign acquisitions and expansion. The determination of the amount of the unrecognized deferred U.S. income tax liability related to the undistributed earnings is not practicable.

We use the with-and-without approach for ordering tax benefits derived from the share-based payment awards. Using the with-and-without approach, actual income taxes payable for the period are compared to the amount of tax payable that would have been

61

incurred absent the deduction for employee share-based payments in excess of the amount of compensation cost recognized for financial reporting. As a result of this approach, tax net operating loss carryforwards not generated from share-based payments in excess of cost recognized for financial reporting are considered utilized before the current period's share-based deduction. We did not recognize any tax benefits during 2015 for stock-based compensation. We recognized less than $0.1 million of excess tax benefits during 2014. We did not recognize any tax benefits during 2013 for stock-based compensation.

We recorded a liability for unrecognized tax positions. The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the years ended March 31:

(In thousands)	2015			2014			2013
Balance at April 1	$	2,568		$	4,248		$	2,873
Additions:
Relating to positions taken during current year	—			—			1,624
Relating to positions taken during prior year	—			—			—
Reductions:
Relating to tax settlements	—			—			—
Relating to positions taken during prior year	(204		)	(1,238		)	—
Relating to lapse in statute	(609		)	(442		)	(249		)
Balance at March 31	$	1,755		$	2,568		$	4,248

As of March 31, 2015, we had a liability of $1.8 million related to uncertain tax positions, the recognition of which would affect our effective income tax rate.

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 as a result of the expiration of various statutes of limitations. We are routinely audited and the outcome of tax examinations could also result in a reduction in unrecognized tax benefits. 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 recognize interest accrued on any unrecognized tax benefits as a component of income tax expense. Penalties are recognized as a component of general and administrative expenses. We recognized interest and penalty benefit of $0.3 million, benefit of $0.2 million and expense of $0.1 million for the years ended March 31, 2015, 2014 and 2013, respectively. As of March 31, 2015 and 2014, we had approximately $0.8 million and $1.1 million of interest and penalties accrued, respectively.

In the U.S. we file consolidated federal and state income tax returns where statutes of limitations generally range from three to five years. Although we have resolved examinations with the IRS through tax year ended March 31, 2010, U.S. federal tax years are open from 2006 forward due to attribute carryforwards. The statute of limitations is open from fiscal year 2002 forward in certain state jurisdictions. We also file income tax returns in international jurisdictions where statutes of limitations generally range from three to seven years. Years beginning after 2007 are open for examination by certain foreign taxing authorities.

12. Employee Benefit Plans

401(k) Plan

We maintain 401(k) plans for employees meeting certain service requirements. Generally, the plans allow eligible employees to contribute a portion of their compensation, and we match $1.00 for every $1.00 on the first 1% of the employee's pre-tax contributions and $0.50 for every $0.50 up to the next 5% of the employee's pre-tax contributions. We may also make discretionary contributions each year for the benefit of all eligible employees under the plans. Agilysys matching contributions were $1.3 million, $1.2 million, and $1.1 million in fiscal 2015, 2014, and 2013, respectively.

Endorsement Split-Dollar Life Insurance

Agilysys provides certain former executives with life insurance benefits through endorsement split-dollar life insurance arrangements. We entered into a separate agreement with each of the former executives covered by these arrangements whereby we must maintain the life insurance policy for the specified amount and split a portion of the policy benefits with the former executive's designated beneficiary. In fiscal 2014, we increased the cash surrender value of one of these policies by $0.5 million due to the anticipated

62

redemption and recorded the benefit in "Other (income) expenses, net” in the accompanying Consolidated Statements of Operations. In the first quarter of fiscal 2015, this policy was redeemed for $2.0 million.

The expense related to these benefit obligations is based on estimates developed by management by evaluating actuarial information and including assumptions with respect to discount rates and mortality. The expense associated with these benefits was classified within “General, and administrative” in our Consolidated Statements of Operations. The related liability, which was $0.2 million at March 31, 2015 and 2014, respectively, was recorded within “Other non-current liabilities” in our Consolidated Balance Sheets. The aggregate cash surrender value of the underlying corporate-owned split-dollar life insurance contracts, which were classified within “Other non-current assets” in our Consolidated Balance Sheets, was $2.5 million (net of policy loans of $0.6 million) at March 31, 2015. The aggregate cash surrender value of the underlying corporate-owned split-dollar life insurance contracts which were classified within "Other current assets" and "Other non-current assets” in our Consolidated Balance Sheets was $2.0 million and $2.4 million (net of policy loans of $0.2 million) at March 31, 2014.

Changes in the cash surrender value of these policies related to gains and losses incurred on these investments are classified within “Other (income) expenses, net” in the accompanying Consolidated Statements of Operations. We recorded a gain of $0.1 million dollars in fiscal 2015, a gain of $0.6 million in fiscal 2014 and a gain of $0.1 million in fiscal 2013 related to the corporate-owned life insurance policies.

13. Commitments and Contingencies

Operating Leases

We lease certain facilities and equipment under non-cancelable operating leases which expire at various dates through fiscal 2022 and require us to pay a portion of the related operating expenses such as maintenance, property taxes, and insurance. Certain facilities and equipment leases contain renewal options for periods up to ten years. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. Certain facilities leases have free or escalating rent payment provisions. Rent expense under such leases is recognized on a straight-line basis over the lease term.

The following is a schedule by year of future minimum rental payments required under operating leases, excluding the related operating expenses, which have initial or remaining non-cancelable lease terms in excess of a year as of March 31, 2015:

(In thousands)	Amount
Fiscal year ending March 31,
2016	$	2,285
2017	2,054
2018	2,003
2019	1,540
2020	1,492
Thereafter	2,599
Total minimum lease payments	$	11,973

Rental expense for all non-cancelable operating leases amounted to $2.5 million, $2.5 million, and $2.4 million for fiscal 2015, 2014, and 2013, respectively.

Asset Retirement Obligations

An asset retirement obligation liability represents the estimated costs to bring certain office buildings that we lease back to their original condition after the termination of the lease. In instances where our lease agreements either contain make-whole provisions or subject us to remediation costs, we establish an asset retirement obligation liability with a corresponding leasehold improvement asset. The asset retirement obligation is included in “Accrued liabilities” and “Other non-current liabilities” in the Consolidated Balance Sheets. As of March 31, 2015, the current and long-term portion of the asset retirement obligation liability was $35,000 and $0.4 million, respectively. As of March 31, 2014, the current and long-term portion of the asset retirement obligation was $25,200 and $0.4 million, respectively.

63

Legal 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.

On July 9, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Northern District of California alleging violations of federal and state wage and hour laws, rules and regulations pertaining primarily to pay for missed meals and rest periods and failure to reimburse business expenses.  On May 19 2014, the court approved a settlement of the lawsuit pursuant to which we paid a gross settlement in the amount of approximately $1.5 million, which was included in "Accrued Liabilities" on our Consolidated Balance Sheets, and the lawsuit was dismissed.

14. (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.

	Year ended March 31,
(In thousands, except per share data)	2015			2014			2013
Numerator:
Loss from continuing operations - basic and diluted	$	(11,497	)	$	(2,895	)	$	(6,214	)
Income from discontinued operations - basic and diluted	—			19,992			4,916
Net (loss) income - basic and diluted	$	(11,497	)	$	17,097		$	(1,298	)
Denominator:
Weighted average shares outstanding - basic and diluted	22,338			22,135			21,880
(Loss) earnings per share - basic and diluted:
Loss from continuing operations	$	(0.51	)	$	(0.13	)	$	(0.28	)
Income from discontinued operations	—			0.90			0.22
Net (loss) income per share	$	(0.51	)	$	0.77		$	(0.06	)
Anti-dilutive stock options, SSARs, restricted shares and performance shares	1,382			1,806			1,781

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, 322,086, 155,777 and 139,767 of restricted shares and performance shares at March 31, 2015, 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-

64

based compensation awards because doing so would be anti-dilutive. In addition, when a loss from continuing operations is reported, adjusting the denominator of diluted earnings per share would also be anti-dilutive to the loss per share, even if the entity has net income after adjusting for a discontinued operation. Therefore, for all periods presented, basic weighted-average shares outstanding were used in calculating the diluted net loss per share.

15. 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.

For stock options and SSARs, the exercise price must be set at least equal to the closing market price of our common shares on the date of grant. The maximum term of stock option and SSAR awards is seven years from the date of grant. Stock option and SSARs awards vest over a period established by the Compensation Committee of the Board of Directors. SSARs may be granted in conjunction with, or independently from, a stock option granted under the 2011 Plan. SSARs granted in connection with a stock option are exercisable only to the extent that the stock option to which it relates is exercisable and the SSARs terminate upon the termination or exercise of the related stock option.

Restricted shares and restricted share units, whether time-vested or performance-based, may be issued at no cost or at a purchase price that may be below their fair market value, but are subject to forfeiture and restrictions on their sale or other transfer. Performance-based awards may be conditioned upon the attainment of specified performance objectives and other conditions, restrictions, and contingencies. Restricted shares and restricted share units have the right to receive dividends, or dividend equivalents in the case of restricted share units, if any, subject to the same forfeiture provisions that apply to the underlying awards. Subject to certain exceptions set forth in the 2011 Plan, for awards to employees, no performance-based restricted shares or restricted share units shall be based on a restriction period of less than one year, and any time-based restricted shares or restricted share units shall have a minimum restriction period of three years.

We have a shareholder-approved 2006 Stock Incentive Plan ("the 2006 Plan”), as well as, a 2000 Stock Option Plan for Outside Directors 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, stock-settled stock appreciation rights, 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 stock-settled appreciation right 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.

We recognized less than $0.1 million of excess tax benefits related to the exercise of stock options and SSARs in fiscal 2014. As discussed in Note 11, Income Taxes, in fiscal 2013 and 2012, we were in a net operating loss position for U.S. federal income taxes. Therefore, we did not recognize and will not recognize an income tax benefit related to stock options or SSARs exercised until that tax benefit can be realized.

The following table summarizes the share-based compensation expense for options, SSARs, restricted and performance awards included in the Consolidated Statements of Operations for fiscal 2015, 2014 and 2013:

	Year ended March 31,
(In thousands)	2015		2014		2013
Product development	$	1,168	$	700	$	475
Sales and marketing	135		90		65
General and administrative	1,837		1,329		1,098
Total share-based compensation expense	$	3,140	$	2,119	$	1,638

65

Stock Options

The following table summarizes the activity during fiscal 2015 for stock options awarded under the 2006 Plan:

(In thousands, except share and per share data)	Number of Options		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
			(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 March 31, 2015	582,500		$	15.41	1.1	$	—

The following table presents additional information related to stock option activity during the fiscal years ended March 31, 2015, 2014 and 2013:

(In thousands)	2015		2014		2013
Proceeds from stock options exercised	$	102	$	169	$	67
Total intrinsic value of stock options exercised	$	4	$	1,402	$	382

All stock options are vested and we do not have any remaining unrecognized stock based compensation expense related to stock options.

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 fiscal 2015.

Stock-Settled Stock Appreciation Rights

Stock-Settled 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.

We use a Black-Scholes-Merton option pricing model to estimate the fair value of SSARs. The following table summarizes the principal assumptions utilized in valuing SSARs granted in fiscal 2015, 2014 and 2013:

	2015	2014	2013
Risk-free interest rate	1.52%	1.05%-1.39%	0.67%-0.89%
Expected life (in years)	5	5	5
Expected volatility	82.56%	80.78%-80.93%	81.03%-83.77%
Weighted average grant date fair value	$7.23	$7.96	$4.92

The risk-free interest rate is based on the yield of a zero coupon U.S. Treasury bond whose maturity period approximates the expected life of the SSARs. The expected life is estimated using historical data representing the period of time the awards are expected to be outstanding. The estimated fair value of the SSARs granted, less expected forfeitures, is recognized over the vesting period of the awards utilizing the graded vesting method. Under this method, the compensation cost related to unvested amounts begins to be recognized as of the grant date.

66

The following table summarizes the activity during fiscal 2015 for SSARs awarded under the 2011 Plan and the 2006 Plan:

(In thousands, except share and per share data)	Number of Rights		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
			(per right)		(in years)
Outstanding at April 1, 2014	320,236		$	9.05
Granted	115,020		14.41
Exercised	(16,078	)	7.75
Forfeited	(11,835	)	7.46
Cancelled/expired	(13,333	)	7.46
Outstanding at March 31, 2015	394,010		$	10.76	4.8	$	388
Exercisable at March 31, 2015	286,849		$	9.63	4.3	$	388
Vested and expected to vest at March 31, 2015	375,666		$	10.61	4.8	$	388

The following table presents additional information related to SSARs activity during fiscal 2015, 2014 and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	792	$	611	$	595
Total intrinsic value of SSARs exercised	$	96	$	2,131	$	373
Total fair value of SSARs vesting	$	779	$	636	$	778

As of March 31, 2015, total unrecognized stock based compensation expense related to non-vested SSARs was $0.6 million, which is expected to be recognized over a weighted-average vesting period of 1.7 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 twelve months endedMarch 31, 2015. 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 twelve months endedMarch 31, 2015 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	360,321		13.79
Vested	(154,900	)	11.68
Forfeited	(22,836	)	13.3
Outstanding at March 31, 2015	322,086		$	13.49

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. During the fiscal 2015, a total of 123,983 shares, net of 31,805 shares were withheld from the vested restricted shares to cover the employee's minimum applicable income taxes, were issued from treasury. The shares withheld were returned to treasury shares.

67

The following table presents additional information related to restricted stock activity during fiscal years 2015, 2014, and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	2,348	$	1,486	$	989
Total fair value of restricted share vesting	$	1,572	$	1,579	$	1,099

As of March 31, 2015, total unrecognized stock based compensation expense related to non-vested restricted stock was $3.4 million, which is expected to be recognized over a weighted-average vesting period of 2.1 years. We do not include restricted stock in the calculation of earnings per share until the shares are vested.

Performance Shares

In fiscal 2013, we granted shares to certain of our key employees under the 2011 Plan, the vesting of which is contingent upon meeting various company-wide performance goals within a two-year period.

The following table summarizes the activity during fiscal 2015 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	—		—
Vested	(17,728	)	$	8.64
Outstanding at March 31, 2015	—		$	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.

The following table presents additional information related to performance share activity during the fiscal 2015, 2014, and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	77	$	22	$	54
Total fair value of performance share vesting	$	174	$	—	—

Once attainment of the performance goals becomes probable, compensation expense related to performance share awards is recognized over the vesting period based upon the closing market price of our common shares on the grant date.

Compensation expense related to performance share awards is recognized ratably over the vesting period based upon the closing market price of our common shares on the grant date. As of March 31, 2015, there is no remaining unrecognized stock based compensation expense related to non-vested performance shares.

16. 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 twelve months endedMarch 31, 2015.

68

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)	March 31, 2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — non-current	2,493		—		—		2,493
Liabilities:
Contingent consideration — current	$	8	$	—	$	—	$	8
Contingent consideration — non-current	104		—		—		104

	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:
Investments	$	28,999	$	—	$	28,999	$	—
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 fair value of investments, comprised of commercial paper 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.

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 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.

69

The following table presents a summary of changes in the fair value of the corporate-owned life insurance Level 3 asset for the fiscal years ended March 31, 2015 and 2014:

	Level 3 assets and liabilities
(In thousands)	2015			2014
Corporate-owned life insurance:
Balance on April 1	$	4,360		$	3,673
Realized gains	57			—
Unrealized gain relating to instruments held at reporting date	65			600
Purchases, sales, issuances and settlements, net	(1,989		)	87
Balance on March 31	$	2,493		$	4,360

The inputs used to value our contingent consideration and employee benefit plan obligations are not observable in the market and therefore, these amounts are classified within Level 3 in the fair value hierarchy.

The following table presents a summary of changes in the fair value of the contingent consideration Level 3 liability for fiscal years ended March 31, 2015 and 2014:

	Level 3 assets and liabilities
(In thousands)	2015			2014
Contingent consideration:
Balance on April 1	$	1,739		$	—
Activity, payments and other charges (net)	(9		)	1,739
Fair value adjustment	(1,618		)	—
Balance on March 31	$	112		$	1,739

The fair value of the contingent consideration related to the TMC acquisition was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain revenue milestones would be achieved. As of March 31, 2015, due to a decrease in expected revenues associated with the contingent consideration, we recorded a gain of $1.6 million within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

17. Quarterly Results (Unaudited)

Because quarterly reporting of per share data is used independently for each reporting period, the sum of per share amounts for the four quarters in the fiscal year will not necessarily equal annual per share amounts. GAAPprohibits retroactive adjustment of quarterly per share amounts so that the sum of those amounts equals amounts for the full year.

We have traditionally experienced seasonal revenue weakness during our fiscal first quarter ending June 30. Additionally, the timing of large one-time orders, such as those associated with significant remarketed product sales around large customer refresh cycles or significant volume rollouts, occasionally creates volatility in our quarterly results.

70

	Year ended March 31, 2015
	First			Second			Third			Fourth			Year
(In thousands except per share data)	quarter			quarter			quarter			Quarter
Net revenue	$	23,746		$	26,318		$	24,742		$	28,708		$	103,514
Gross profit	14,674			16,669			14,129			14,610			60,081
Asset write-offs and other fair value adjustments	—			—			—			1,836			1,836
Restructuring, severance and other charges	370			448			95			569			1,482
Legal settlements	$	149		$	54		$	—		$	—		203
Loss from continuing operations	(2,229		)	(1,127		)	(2,715		)	(5,426		)	(11,497		)
Net (loss) income	$	(2,229	)	$	(1,127	)	$	(2,715	)	$	(5,426	)	$	(11,497	)
Per share data-basic and diluted
Loss from continuing operations	$	(0.1	)	$	(0.05	)	$	(0.12	)	$	(0.24	)	$	(0.51	)
Income (loss) from discontinued operations	—			—			—			—			—
Net (loss) income	$	(0.1	)	$	(0.05	)	$	(0.12	)	$	(0.24	)	$	(0.51	)

	Year ended March 31, 2014
	First		Second			Third			Fourth			Year
(In thousands except per share data)	quarter		quarter			quarter			Quarter
Net revenue	$	23,700	$	24,846		$	24,965		$	27,750		$	101,261
Gross profit	15,637		16,588			15,155			16,660			64,040
Asset write-offs and other fair value adjustments	—		18			309			—			327
Restructuring, severance and other charges	55		562			206			569			1,392
Income (loss) from continuing operations	$	789	$	(1,310	)	$	(1,711	)	$	(663	)	$	(2,895	)
Income (loss) from discontinued operations, net of taxes	527		21,763			(952		)	(1,346		)	19,992
Net income (loss)	$	1,316	$	20,453		$	(2,663	)	$	(2,009	)	$	17,097
Per share data-basic:
Income (loss) from continuing operations	$	0.04	$	(0.06	)	$	(0.08	)	$	(0.03	)	$	(0.13	)
Income (loss) from discontinued operations	0.02		0.98			(0.04		)	(0.06		)	0.90
Net income (loss)	$	0.06	$	0.92		$	(0.12	)	$	(0.09	)	$	0.77
Per share data-diluted:
Income (loss) from continuing operations	$	0.04	$	(0.06	)	$	(0.08	)	$	(0.03	)	$	(0.13	)
Income (loss) from discontinued operations	0.02		0.98			(0.04		)	(0.06		)	0.90
Net income (loss)	$	0.06	$	0.92		$	(0.12	)	$	(0.09	)	$	0.77

71

18. Subsequent Event

None.

Schedule II - Valuation and Qualifying Accounts Years ended March 31,2015, 2014 and 2013

	Balance at		Charged to					Balance at
	beginning of		costs and					end of
(In thousands)	year		expenses		Deductions			year
2015
Deferred tax valuation allowance	$	73,014	$	3,406	$	—		$	76,420
Allowance for doubtful accounts	$	1,101	$	1,219	$	(1,432	)	$	888
2014
Deferred tax valuation allowance	$	73,595	$	—	$	(581	)	$	73,014
Allowance for doubtful accounts	$	720	$	453	$	(72	)	$	1,101
2013
Deferred tax valuation allowance	$	77,904	$	—	$	(4,309	)	$	73,595
Allowance for doubtful accounts	$	353	$	392	$	(25	)	$	720

Item 9.  Change in and Disagreements WithAccountants on Accounting and FinancialDisclosures.

None.

Item 9A.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the CEO and CFO concluded that our disclosure controls and procedures as of the end of the period covered by this report are effective to ensure that information required to be disclosed by us in reports filed under the Exchange Act of 1934 is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow for timely decisions regarding required disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management's Report on Internal Control Over Financial Reporting

The management of Agilysys, under the supervision of the CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision of our CEO and CFO, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2015 based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on that evaluation, management concluded that Agilysys maintained effective internal control over financial reporting as of March 31, 2015.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, issued their report regarding Agilysys' internal control over financial reporting as of March 31, 2015, which is included elsewhere in this annual report.

Change in Internal Control over Financial Reporting

No changes in our internal control over financial reporting occurred during the last quarter of fiscal 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

72

Item 9B.    Other Information

None.

Part III

Item 10.  Directors, Executive Officers andCorporate Governance.

Information required by this Item as to the Directors of Agilysys, Executive Officers, the Audit Committee, Agilysys' Code of Business Conduct, and the procedures by which shareholders may recommend nominations appearing under the headings “Election of Directors,” “Executive Officers” and “Corporate Governance” in our Proxy Statement to be used in connection with Agilysys' 2015 Annual Meeting of Shareholders (the “2015 Proxy Statement”) is incorporated herein by reference. Information with respect to compliance with Section 16(a) of the Securities Exchange Act of 1934 by our Directors, executive officers, and holders of more than five percent of Agilysys' equity securities will be set forth in the 2015 Proxy Statement under the heading “Section 16 (a) Beneficial Ownership Reporting Compliance.”

We adopted a Code of Business Conduct that applies to all Directors and employees of Agilysys, including the Chief Executive Officer and Chief Financial Officer. The Code is available on our website at http://www.agilysys.com.

Item 11.  Executive Compensation.

The information required by this Item is set forth in our 2015 Proxy Statement under the headings, “Executive Compensation,” “Director Compensation,” “Compensation Committee Report,” and “Corporate Governance,” which is incorporated herein by reference.

Item 12.  Security Ownership of CertainBeneficial Owners and Management and RelatedShareholder Matters.

The information required by this Item is set forth in our 2015 Proxy Statement under the headings “Beneficial Ownership of Common Shares,” and “Equity Compensation Plan Information,” which information is incorporated herein by reference.

Item 13.  Certain Relationships and RelatedTransactions, and DirectorIndependence.

The information required by this item is set forth in our 2015 Proxy Statement under the headings “Corporate Governance” and “Related Person Transactions,” which information is incorporated herein by reference.

Item 14.  Principal Accountant Fees andServices.

The information required by this Item is set forth in our 2015 Proxy Statement under the heading “Ratification of Appointment of Independent Registered Public Accounting Firm,” which information is incorporated herein by reference.

73

PART IV

Item 15.  Exhibits and Financial StatementSchedules.

(a)(1) Financial statements.  The following consolidated financial statements are included herein and are incorporated by reference in Part II, Item 8 of this Annual Report:

Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of March 31, 2015 and 2014

Consolidated Statements of Operations for the years ended March 31, 2015, 2014, and 2013

Consolidated Statements of Comprehensive Loss for the years ended March 31, 2015, 2014, and 2013

Consolidated Statements of Cash Flows for the years ended March 31, 2015, 2014, and 2013

Consolidated Statements of Shareholders' Equity for the years ended March 31, 2015, 2014, and 2013

Notes to Consolidated Financial Statements

(a)(2) Financial statement schedule.  The following financial statement schedule is included herein and is incorporated by reference in Part II, Item 8 of this Annual Report:

Schedule II - Valuation and Qualifying Accounts

All other schedules have been omitted since they are not applicable or the required information is included in the consolidated financial statements or notes thereto.

(a)(3) Exhibits.  Exhibits included herein and those incorporated by reference are listed in the Exhibit Index of this Annual Report.

74

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Agilysys, Inc. has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cincinnati, State of Ohio, on June 5, 2015.

AGILYSYS, INC.

/s/  James H. Dennedy

James H. Dennedy

President, Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated as of June 5, 2015.

Signature	Title
/s/ James H. Dennedy	President, Chief Executive Officer and Director
James H. Dennedy	(Principal Executive Officer)
/s/ Janine K. Seebeck	Senior Vice President, Chief Financial Officer,
Janine K. Seebeck	and Treasurer
	(Principal Financial Officer)
/s/ Keith M. Kolerus	Chairman and Director
Keith M. Kolerus
/s/ Max Carnecchia	Director
Max Carnecchia
/s/ Gerald C. Jones	Director
Gerald C. Jones
/s/ Michael A. Kaufmann	Director
Michael A. Kaufmann
/s/ John Mutch	Director
John Mutch
/s/ Peter F. Sinisgalli	Director
Peter F. Sinisgalli

75

Agilysys, Inc.

Exhibit Index

Exhibit No.	Description
3(a)	Amended Articles of Incorporation of Agilysys, Inc., which is incorporated by reference to Exhibit 3(a) to Agilysys, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (File No. 000-05734).
3(b)	Amended Code of Regulations of Agilysys, Inc., which is incorporated by reference to Exhibit 3(ii) to Agilysys, Inc.'s Current Report on Form 8-K filed January 31, 2012 (File No. 000-05734).
*10(a)	The Company's Annual Incentive Plan, which is incorporated herein by reference to Exhibit 10(b) to Agilysys, Inc.'s Definitive Proxy Statement on Schedule 14A filed June 28, 2011 (File No. 000-05734).
*10(b)	Pioneer-Standard Electronics, Inc. Supplemental Executive Retirement Plan, which is incorporated herein by reference to Exhibit 10(o) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 2000 (File No. 000-05734).
*10(c)	Pioneer-Standard Electronics, Inc. Benefit Equalization Plan, which is incorporated herein by reference to Exhibit 10(p) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 2000 (File No. 000-05734).
*10(d)	Amendment to the Pioneer-Standard Electronics, Inc. Supplemental Executive Retirement Plan dated January 29, 2002, which is incorporated herein by reference to Exhibit 10(x) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 2002 (File No. 000-05734).
*10(e)	Forms of Amended and Restated Indemnification Agreement entered into by and between Agilysys, Inc. and each of its Directors and Executive Officers, which are incorporated herein by reference to Exhibit 99(b) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 1994 (File No. 000-05734).
*10(f)	Agilysys, Inc. 2006 Stock Incentive Plan, as Amended and Restated Effective May 20, 2010, which is incorporated herein by reference to Exhibit 10(mm) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 2010 (File No. 000-05734).
*10(g)	Agilysys, Inc. 2011 Stock Incentive Plan, which is incorporated herein by reference to Exhibit 10(a) to Agilysys, Inc.'s Definitive Proxy Statement on Schedule 14A filed June 28, 2011 (File No. 000-05734).
*10(h)	Form of Stock Appreciation Right Agreement, which is incorporated herein by reference to Exhibit 10(pp) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 2010 (File No. 000-05734).
*10(i)	Form of Directors Restricted Stock Award Agreement, which is incorporated herein by reference to Exhibit 10(qq) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 2010 (File No. 000-05734).
*10(j)	Form of Restricted Stock Award Agreement, which is incorporated herein by reference to Exhibit 10(c) to Agilysys, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 000-05734).
10(k)	Stock and Asset Purchase Agreement among Agilysys Inc., Agilysys Technology Solutions Group, LLC, OnX Acquisition LLC and OnX Enterprise Solutions Limited, dated as of May 28, 2011, which is incorporated herein by reference to Exhibit 2.1 to Agilysys, Inc.'s Current Report on Form 8-K filed May 31, 2011 (File No. 000-05734).
*10(l)	Amendment to the Agilysys, Inc. Supplemental Executive Retirement Plan, effective March 25, 2011, which is incorporated by reference to Exhibit 10(cc) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 2011 (File No. 000-05734).
*10(m)	Amendment to the Agilysys, Inc. Benefits Equalization Plan, effective March 31, 2011, which is incorporated by reference to Exhibit 10(dd) to Agilysys, Inc.'s Annual Report on Form 10-K for the year ended March 31, 2011 (File No. 000-05734).
*10(n)	Form of Executive Employment Agreement, which is incorporated herein by reference to Exhibit 10.1 to Agilysys, Inc.'s Current Report on Form 18-k filed July 23, 2014 (File No. 000-05734).
10(o)	Asset Purchase Agreement by and between Agilysys, Inc. and Kyrus Solutions, Inc., dated May 31, 2013, which is incorporated by reference to Exhibit 1.01 to Agilysys, Inc.'s Current Report on Form 8-K filed June 4, 2013 (File No. 000-05734).
**21	Subsidiaries of the Registrant.
**23.1	Consent of Independent Registered Public Accounting Firm.
**31.1	Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
**31.2	Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
**32.1	Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
**32.2	Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

76

101	The following materials from our annual report on Form 10-K for the year ended March 31, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2014 and 2013, (ii) Consolidated Statements of Operations for the twelve months ended March 31, 2014, 2013 and 2012, (iii) Consolidated Statements of Comprehensive Income (Loss) for the twelve months ended March 31, 2014, 2013 and 2012, (iv) Consolidated Statements of Cash Flows for the twelve months ended March 31, 2014, 2013 and 2012, and (v) Notes to the Consolidated Financial Statements for the twelve months ended March 31, 2014.
*	Denotes a management contract or compensatory plan or arrangement.
**	Filed herewith

77

EX-21

Exhibit 21

SUBSIDIARIES OF AGILYSYS, INC.

Subsidiaries of Agilysys, Inc.	State or jurisdiction of organization or incorporation
Agilysys NV, LLC	Delaware
Agilysys China Holdings Ltd.	Hong Kong
Agilysys HK Limited	Hong Kong
Agilysys MC Limited	Macau
Agilysys Hospitality Solutions (Shanghai) Co., Ltd.	People’s Republic of China
Agilysys Singapore Pte. Ltd.	Singapore
Agilysys Philippines, Inc.	Philippines

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on FormS‑8 (Nos. 333-143994, 333-64164, 33-106267, 333-40750 and 333-175909) of Agilysys, Inc. of our reportdated June 5, 2015 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10‑K.

/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia

June 5, 2015

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, James H. Dennedy, certify that:

1. I have reviewed this Annual Report on Form 10-K 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: June 5, 2015

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 Annual Report on Form 10-K 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: June 5, 2015

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 Annual Report on Form 10-K of the Company for the annual period ended March 31, 2015 (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: June 5, 2015

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 Annual Report on Form 10-K of the Company for the annual period ended March 31, 2015 (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: June 5, 2015

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

XML

Share-based Compensation (Tables)

12 Months Ended

Mar. 31, 2015

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 Consolidated Statements of Operations for fiscal 2015, 2014 and 2013:

	Year ended March 31,
(In thousands)	2015		2014		2013
Product development	$	1,168	$	700	$	475
Sales and marketing	135		90		65
General and administrative	1,837		1,329		1,098
Total share-based compensation expense	$	3,140	$	2,119	$	1,638

Activity related stock options award

The following table summarizes the activity during fiscal 2015 for stock options awarded under the 2006 Plan:

(In thousands, except share and per share data)	Number of Options		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
			(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 March 31, 2015	582,500		$	15.41	1.1	$	—

Schedule additional information related to stock option activity

The following table presents additional information related to stock option activity during the fiscal years ended March 31, 2015, 2014 and 2013:

(In thousands)	2015		2014		2013
Proceeds from stock options exercised	$	102	$	169	$	67
Total intrinsic value of stock options exercised	$	4	$	1,402	$	382

Schedule of principal assumptions utilized in valuing SSARs

The following table summarizes the principal assumptions utilized in valuing SSARs granted in fiscal 2015, 2014 and 2013:

	2015	2014	2013
Risk-free interest rate	1.52%	1.05%-1.39%	0.67%-0.89%
Expected life (in years)	5	5	5
Expected volatility	82.56%	80.78%-80.93%	81.03%-83.77%
Weighted average grant date fair value	$7.23	$7.96	$4.92

Activity related SSARs award

The following table summarizes the activity during fiscal 2015 for SSARs awarded under the 2011 Plan and the 2006 Plan:

(In thousands, except share and per share data)	Number of Rights		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
			(per right)		(in years)
Outstanding at April 1, 2014	320,236		$	9.05
Granted	115,020		14.41
Exercised	(16,078	)	7.75
Forfeited	(11,835	)	7.46
Cancelled/expired	(13,333	)	7.46
Outstanding at March 31, 2015	394,010		$	10.76	4.8	$	388
Exercisable at March 31, 2015	286,849		$	9.63	4.3	$	388
Vested and expected to vest at March 31, 2015	375,666		$	10.61	4.8	$	388

The following table presents additional information related to SSARs activity during fiscal 2015, 2014 and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	792	$	611	$	595
Total intrinsic value of SSARs exercised	$	96	$	2,131	$	373
Total fair value of SSARs vesting	$	779	$	636	$	778

Activity related to restricted shares awarded by the Company

The following table presents additional information related to restricted stock activity during fiscal years 2015, 2014, and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	2,348	$	1,486	$	989
Total fair value of restricted share vesting	$	1,572	$	1,579	$	1,099

The following table summarizes the activity during the twelve months endedMarch 31, 2015 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	360,321		13.79
Vested	(154,900	)	11.68
Forfeited	(22,836	)	13.3
Outstanding at March 31, 2015	322,086		$	13.49

Performance shares awarded by the Company

The following table summarizes the activity during fiscal 2015 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	—		—
Vested	(17,728	)	$	8.64
Outstanding at March 31, 2015	—		$	8.64

Schedule of additional information related to performance share activity

The following table presents additional information related to performance share activity during the fiscal 2015, 2014, and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	77	$	22	$	54
Total fair value of performance share vesting	$	174	$	—	—

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Amortized intangible assets:
Indefinite-Lived Intangible Assets, Accumulated Impairment	$ (570)	$ 0	$ 0
Indefinite-Lived Intangible Assets (Excluding Goodwill)	8,400	9,200	9,200
Intangible Assets, Gross (Excluding Goodwill)	32,845	33,415
Finite Lived Software Development Costs Accumulated Impairment	1,391		0
Gross carrying amount	24,445	0
Finite Lived Software Development Costs Accumulated Amortization	1,443		(270)
Finite Lived Software Development Costs Net	31,818		17,221
Finite Lived Software Development Costs Gross	33,261		17,491
Accumulated amortization	(23,839)	(22,789)	(22,789)
Net carrying amount	606	1,426
Total intangible assets, net carrying amount	9,006	10,626	10,626
Trade Names [Member]
Amortized intangible assets:
Indefinite-Lived Intangible Assets (Excluding Goodwill), Excluding Accumulated Impairment	9,200	9,200	9,200
Customer relationships [Member]
Amortized intangible assets:
Gross carrying amount, excluding accumulated impairment	10,775	10,775
Accumulated amortization, excluding accumulated impairment	(10,775)	(10,080)
Net carrying amount, excluding accumulated impairment	0	695
Non-competition agreements [Member]
Amortized intangible assets:
Gross carrying amount, excluding accumulated impairment	2,700	2,700
Accumulated amortization, excluding accumulated impairment	(2,700)	(2,473)
Net carrying amount, excluding accumulated impairment	0	227
Developed technology [Member]
Amortized intangible assets:
Gross carrying amount, excluding accumulated impairment	10,660	10,660
Accumulated amortization, excluding accumulated impairment	(10,277)	(10,156)
Net carrying amount, excluding accumulated impairment	383	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]
Amortized intangible assets:
Finite Lived Software Development Costs Accumulated Amortization Excluding Accumulated Impairment	1,443		(270)
Finite Lived Software Development Costs, Net Excluding, Accumulated Impairment	4,916		4,824
Finite Lived Software Development Costs Gross Excluding Accumulated Impairment	6,359		5,094
Project Expenditures Not Yet In Use [Member]
Amortized intangible assets:
Finite Lived Software Development Costs Accumulated Amortization Excluding Accumulated Impairment	0		0
Finite Lived Software Development Costs, Net Excluding, Accumulated Impairment	28,293		12,397
Finite Lived Software Development Costs Gross Excluding Accumulated Impairment	$ 28,293		$ 12,397

XML

Restructuring Charges (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 534	$ 584	$ 6,049
Restructuring Charges	(996)	(1,289)	(1,087)
Payments for restructuring, severance and other charges	(1,080)	(1,339)	(6,552)
Ending Balance	450	534	584
Restructuring Plan Fiscal Two Zero One Four [Member] | Severance and employment costs [Member]
Restructuring Reserve [Roll Forward]
Restructuring Charges	(628)
Payments for restructuring, severance and other charges	(178)
Ending Balance	450
Fiscal 2012 Restructuring Plan [Member] | Severance and employment costs [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance	534	348
Restructuring Charges	(368)	(1,257)	(1,146)
Payments for restructuring, severance and other charges	(902)	(723)	(6,055)
Ending Balance	0	534	348
Fiscal 2012 Restructuring Plan [Member] | Facilities costs [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance		0
Restructuring Charges		32	57
Payments for restructuring, severance and other charges		(268)	(240)
Ending Balance			0
Fiscal 2009 Restructuring Plan [Member] | Severance and employment costs [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			0
Restructuring Charges			0
Payments for restructuring, severance and other charges			0
Ending Balance			0
Fiscal 2009 Restructuring Plan [Member] | Facilities costs [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance		236	495
Restructuring Charges		0	2
Payments for restructuring, severance and other charges		(348)	(257)
Ending Balance		$ 0	$ 236

XML

Commitments and Contingencies - Future Minimum Rental Payments Required Under Operating Leases (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2015	$ 2,285
2016	2,054
2017	2,003
2018	1,540
2019	1,492
Thereafter	2,599
Total minimum lease payments	$ 11,973

XML

Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2015	$ 1,068
2016	1,067
2017	1,067
2018	844
2019	85
Total	$ 4,131

XML

Share-based Compensation - Additional Information Related to SSARs (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 3,140	$ 2,119	$ 1,638
Stock Settled Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	792	611	595
Total intrinsic value of SSARs exercised	96	2,131	373
Total fair value of SSARs vesting	$ 779	$ 636	$ 778

XML

Discontinued Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Discontinued operations:
Income from operations					$ 249	$ 8,196
Other expense, net					(266)	(447)
Gain on sale					21,933	0
Income on sale					21,916	7,749
Income tax expense					1,924	2,833
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest	1,346	952	(21,763)	(527)	0	(19,992)	(4,916)
Net revenue					$ 28,950	$ 143,261

XML

Financing Arrangements (Tables)

12 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Summary of long-term obligations

The following is a summary of long-term obligations at March 31, 2015, and 2014:

(In thousands)	2015			2014
Capital lease obligations	$	189		$	335
Less: current maturities	(142		)	(43		)
Long -term capital lease obligations	$	47		$	292

Schedule of future lease payments under capital leases

Minimum future lease payments under capital leases as of March 31, 2015, are as follows:

(In thousands)	Amount
Fiscal year ending March 31,
2016	$	147
2017	30
2018	19
Total minimum lease payments	$	196
Less: amount representing interest	(7		)
Present value of minimum lease payments	$	189

XML

Share-based Compensation - Restricted Shares Rollforward (Details) (Restricted Stock [Member], USD $)	12 Months Ended
	Mar. 31, 2015
Restricted Stock [Member]
Activity Related to Restricted Shares Awarded by the Company
Number of Shares, Outstanding at beginning of period	139,501
Number of Shares, Granted	360,321
Number of Shares, Vested	(154,900)
Number of Shares, Forefeited	(22,836)
Number of Shares, Outstanding at end of period	322,086
Weighted Average Grant-Date Fair Value, Outstanding at beginning of period	$ 10.72
Weighted Average Grant Date Fair Value, Granted	$ 13.79
Weighted Average Grant Date Fair Value, Vested	$ 11.68
Weighted Average Grant Date Fair Value, Forefeited	$ 13.30
Weighted Average Grant-Date Fair Value, Outstanding at end of period	$ 13.49

XML

Share-based Compensation - Schedule of Share-based Compensation Expense (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 3,140	$ 2,119	$ 1,638
Product development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	1,168	700	475
Selling and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	135	90	65
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 1,837	$ 1,329	$ 1,098

XML

Financing Arrangements - Summary of Long-Term Obligations (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Debt Disclosure [Abstract]
Capital lease obligations	$ 189	$ 335
Less: current maturities	(142)	(43)
Long -term capital lease obligations	$ 47	$ 292

XML

Share-based Compensation - Principal Assumptions Utilized in Valuing SSARs Granted (Details) (Stock Settled Stock Appreciation Rights [Member], USD $)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Stock Settled Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate, minimum	1.05%	0.67%	0.83%
Risk-free interest rate, maximum	1.39%	0.89%	2.09%
Expected volatility, minimum	80.78%	81.03%	80.75%
Expected volatility, maximum	80.93%	83.77%	82.20%
Weighted average grant date fair value (in dollars per share)	$ 7.96	$ 4.92	$ 7.23

XML

Quarterly Results (Unaudited) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
Net revenue	$ 28,708	$ 24,742	$ 26,318	$ 23,746	$ 27,750	$ 24,965	$ 24,846	$ 23,700	$ 103,514	$ 101,261	$ 94,008
Gross profit	14,610	14,129	16,669	14,674	16,660	15,155	16,588	15,637	60,081	64,040	57,619
Asset impairments and related charges	1,836	0	0	0	0		18	0	3,454	327	120
Increase (Decrease) in Fair Value Adjustments on Other Assets (Liabilities) Carried at Fair Value under Fair Value Option									1,836	327	120
Restructuring, severance and other charges	569	95	448	370	569	206	562	55	1,482	1,392	1,495
Loss from continuing operations	(5,426)	(2,715)	(1,127)	(2,229)	(663)	(1,711)	(1,310)	789	(11,497)	(2,895)	(6,214)
Income from discontinued operations, net of taxes					(1,346)	(952)	21,763	527	0	19,992	4,916
Net income (loss)	$ (5,426)	$ (2,715)	$ (1,127)	$ (2,229)	$ (2,009)	$ (2,663)	$ 20,453	$ 1,316	$ (11,497)	$ 17,097	$ (1,298)
Income (Loss) from Continuing Operations, Per Basic Share	$ (0.24)	$ (0.12)	$ (0.05)	$ (0.10)					$ (0.51)
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic Share	$ 0.00	$ 0.00	$ 0.00	$ 0.00					$ 0.00
Net (loss) income per share - basic (in dollars per share)	$ (0.24)	$ (0.12)	$ (0.05)	$ (0.10)					$ (0.51)
Loss from continuing operations (in dollars per share)					$ (0.03)	$ (0.08)	$ (0.06)	$ 0.04	$ (0.51)	$ (0.13)	$ (0.28)
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic and Diluted Share					$ 0.06	$ 0.04	$ (0.98)	$ (0.02)	$ 0.00	$ (0.90)	$ (0.22)
Earnings Per Share, Basic and Diluted									$ (0.51)	$ 0.77	$ (0.06)

XML

Share-based Compensation - Performance Shares Rollforward (Details) (Performance Shares [Member], USD $)	12 Months Ended
	Mar. 31, 2015
Performance Shares [Member]
Performance shares awarded by the Company
Number of Shares, Outstanding at beginning of period	17,728
Number of Shares, Granted	0
Number of Shares, Outstanding at end of period	0
Weighted Average Grant-Date Fair Value, Outstanding at beginning of period	$ 8.64
Weighted Average Grant Date Fair Value, Granted	$ 0.00
Weighted Average Grant-Date Fair Value, Outstanding at end of period	$ 8.64

XML

Schedule II - Valuation and Qualifying Accounts (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Allowance for Doubtful Accounts [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of year	$ 1,101	$ 720	$ 353
Charged to costs and expenses	1,219	453	392
Deductions	(1,432)	(72)	(25)
Balance at end of year	888	1,101	720
Deferred Tax Valuation Allowance [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of year	73,014	73,595	77,904
Charged to costs and expenses	3,406	0	0
Deductions	0	(581)	(4,309)
Balance at end of year	$ 76,420	$ 73,014	$ 73,595

XML

Share-based Compensation - SSARs Rollforward (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period	(13,333)
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price	$ 7.46
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
Number of Rights, Granted	115,020
Number of Rights, Exercised	(16,078)
Number of Rights, Forfeited	(11,835)
Number of Rights, Outstanding at end of period	394,010
Number of Rights, Exercisable at end of period	286,849
Weighted Average Exercise Price, Outstanding at beginning of period	$ 9.05
Weighted Average Exercise Price, Granted	$ 14.41
Weighted Average Exercise Price, Exercised	$ 7.75
Weighted Average Exercise Price, Forfeited	$ 7.46
Weighted Average Exercise Price, Outstanding at end of period	$ 10.76
Weighted Average Exercise Price, Exercisable at end of period	$ 9.63
Remaining Contractual Term, Outstanding	4 years 9 months
Remaining Contractual Term, Exercisable	4 years 4 months
Aggregate Intrinsic Value, Outstanding at end of period	$ 388
Aggregate Intrinsic Value, Exercisable at end of period	388
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	375,666
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price	$ 10.61
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	4 years 9 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	$ 388

XML

Commitments and Contingencies (Details Textual) (USD $)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013	Jun. 06, 2013
Commitments and Contingencies Disclosure [Abstract]
Operating leases, renewal option period (for periods up to 10 years)	10 years
Operating leases, rental expense	$ 2,500,000	$ 2,500,000	$ 2,400,000
Asset retirement obligation, current	35,000	0
Asset retirement obligation, noncurrent	400,000	400,000
Wage and Hour Putative Class Action Lawsuit [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Loss contingency, proposed settlement amount				$ 1,500,000

XML

Subsequent Event

12 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

Subsequent Event

Subsequent Event

None.

XML

Property and Equipment, Net - Schedule of Property and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 22,076	$ 33,416
Accumulated depreciation and amortization	(10,147)	(21,165)
Property and equipment, net	11,929	12,251
Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	8,241	8,849
Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	8,196	16,982
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	4,773	4,836
Project expenditures not yet in use [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 866	$ 2,749

XML

Nature of Operations (Details)	12 Months Ended
	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of business operating segments	1

XML

Share-based Compensation - Additional Information Related to Stock Options (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from stock options exercised	$ 102	$ 169	$ 67
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from stock options exercised	102	169	67
Total intrinsic value of stock options exercised	$ 4	$ 1,402	$ 382

XML

Commitments and Contingencies (Tables)

12 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum rental payments required under operating leases

The following is a schedule by year of future minimum rental payments required under operating leases, excluding the related operating expenses, which have initial or remaining non-cancelable lease terms in excess of a year as of March 31, 2015:

(In thousands)	Amount
Fiscal year ending March 31,
2016	$	2,285
2017	2,054
2018	2,003
2019	1,540
2020	1,492
Thereafter	2,599
Total minimum lease payments	$	11,973

XML

Property and Equipment, Net (Details Textual) (USD $)	3 Months Ended							12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Property, Plant and Equipment [Line Items]
Depreciation, including accelerated depreciation related to restructuring reserve								$ 2,200,000	$ 2,100,000	$ 2,100,000
Asset Impairment Charges	1,836,000	0	0	0	0	18,000	0	3,454,000	327,000	120,000
Purchased for Internal-Use Software [Member]
Property, Plant and Equipment [Line Items]
Amortization of capitalized software								2,500,000	5,300,000	2,100,000
Other Depreciation and Amortization								$ 3,200,000

XML

Income Taxes (Details Textual) (USD $)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Operating Loss Carryforwards [Line Items]
Valuation allowance	$ 76,400,000	$ 73,014,000
Undistributed earnings of foreign subsidiaries	700,000	1,800,000
Significant change in unrecognized tax benefits reasonably possible, lower end	0
Significant change in unrecognized tax benefits reasonably possible, upper end	100,000
Interest and penalty expense (benefit), (less than $.1 million for year ended March 31, 2012)	300,000	200,000	100,000
Interest and penalties accrued	800,000	1,100,000
Federal and State Deferred Tax Assets [Member]
Operating Loss Carryforwards [Line Items]
Valuation allowance	76,100,000
Deferred Tax Assets in Hong Kong [Member]
Operating Loss Carryforwards [Line Items]
Valuation allowance	300,000
Federal [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	170,300,000
Operating loss carryforwards, excess income tax benefit related to share-based compensation	4,200,000
Foreign Tax Authority [Member] | Hong Kong [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	300,000
State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 143,700,000

XML

Additional Balance Sheet Information (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Accrued liabilities:
Salaries, wages, and related benefits	$ 6,768	$ 8,308
Other taxes payable	952	1,122
Accrued legal settlements	70	1,630
Restructuring liabilities	450	534
Professional fees	199	0
Software license fees	504	674
Deferred rent	0	500
Contingent consideration	279	477
Income taxes payable	8	127
Other	771	860
Total	10,001	14,232
Other non-current liabilities:
Income taxes payable/uncertain tax positions	1,499	2,440
Deferred rent	1,666	1,755
Contingent consideration	104	1,612
Other	358	358
Total	$ 3,627	$ 6,165

XML

Discontinued Operations Textual (Details) (USD $)	12 Months Ended			0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Reclassification of foreign currency translation adjustments included in net income (loss)		$ 745,000	$ 0
Proceeds from sale of business units	809,000	35,846,000	0
EMEA Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Reclassification of foreign currency translation adjustments included in net income (loss)	(700,000)
Aggregate Purchase Price				700,000
Discontinued Operations and Disposal Group, Note Due From				800,000
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents	900,000			900,000
Proceeds from sale of business units				$ 600,000

XML

Summary of Significant Accounting Policies

12 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Principles of consolidation.  The consolidated financial statements include the accounts of Agilysys, Inc. and subsidiaries. Investments in affiliated companies are accounted for by the equity or cost method, as appropriate. All inter-company accounts have been eliminated. Unless otherwise indicated, amounts in Notes to Consolidated Financial Statements refer to continuing operations.

Use of estimates.  Preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Cash and cash equivalents. We consider all highly liquid investments purchased with an original maturity from date of acquisition of three months or less to be cash equivalents. Other highly liquid investments considered cash equivalents with no established maturity date are fully redeemable on demand (without penalty) with settlement of principal and accrued interest on the following business day after instruction to redeem. Such investments are readily convertible to cash with no penalty and can include certificates of deposit, commercial paper, treasury bills, money market funds and other investments.

Allowance for doubtful accounts.  We maintain allowances for doubtful accounts for estimated losses resulting from the inability or unwillingness of our customers to make required payments. These allowances are based on both recent trends of certain customers estimated to be a greater credit risk as well as historic trends of the entire customer pool. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. To mitigate this credit risk we perform periodic credit evaluations of our customers.

Inventories.  Our inventories are comprised of finished goods. Inventories are stated at the lower of cost or market, net of related reserves. The cost of inventory is computed using a weighted-average method. Our inventory is monitored to ensure appropriate valuation. Adjustments of inventories to the lower of cost or market, if necessary, are based upon contractual provisions such as turnover and assumptions about future demand and market conditions. If assumptions about future demand change and/or actual market conditions are less favorable than those projected by management, additional adjustments to inventory valuations may be required. We provide a reserve for obsolescence, which is calculated based on several factors, including an analysis of historical sales of products and the age of the inventory. Actual amounts could be different from those estimated.

Goodwill and Other Indefinite-Lived Intangible Assets.  Goodwill represents the excess purchase price paid over the fair value of the net assets of acquired companies. Goodwill is subject to impairment testing at least annually, unless it is determined after a qualitative assessment that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount. Goodwill is measured for impairment on an annual basis, or in interim periods if indicators of potential impairment exist. The Company is also required to compare the fair values of other indefinite-lived intangible assets to their carrying amounts at least annually, or when current events and circumstances require an interim assessment. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized.

For fiscal 2015 and 2014, we conducted a qualitative assessment (Step Zero Analysis) to determine whether it would be necessary to perform step one of the two-step goodwill impairment test. It was determined based on the Step Zero Analysis that it is more likely than not that the fair value exceeded the carrying amount as of February 1, 2015. Additional information regarding our goodwill and impairment analyses is provided in Note 7, Goodwill and Intangible Assets.

We had two indefinite-lived intangible assets relating to purchased trade names. During the fourth quarter of fiscal 2015, one of the two trade names was determined to have a finite life and subsequently written down to its fair value to be amortized over five years. The remaining indefinite-lived intangible asset is not amortized; rather, it is tested for impairment at least annually by comparing the carrying amount of the asset with the fair value. An impairment loss is recognized if the carrying amount is greater than fair value. The income approach using “the relief from royalty method” was used to value the trade names as of February 1, 2015. Additional information regarding our intangible assets and impairment analyses is provided in Note 7, Goodwill and Intangible Assets.

Intangible assets.  Purchased intangible assets with finite lives are primarily amortized using the straight-line method over the estimated economic lives of the assets. Purchased intangible assets relating to customer relationships are amortized using an accelerated or straight-line method, which reflects the period the asset is expected to contribute to the future cash flows. Our finite-lived intangible assets are amortized over periods between two and eight years. Customer relationships are amortized over estimated useful lives between two and seven years; non-competition agreements are amortized over estimated useful lives between two and eight years; developed technology is amortized over estimated useful lives between three and eight years; supplier relationships are amortized over estimated useful lives between two and eight years.

Long-lived assets.  Property and equipment are recorded at cost. Major renewals and improvements are capitalized. Minor replacements, maintenance, repairs, and reengineering costs are expensed as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized.

Depreciation and amortization are provided in amounts sufficient to amortize the cost of the assets, including assets recorded under capital leases, which make up less than one percent of total assets, over their estimated useful lives using the straight-line method. The estimated useful lives for depreciation and amortization are as follows: buildings and building improvements - 7 to 30 years; furniture - 7 to 10 years; equipment - 3 to 10 years; software - 3 to 10 years; and leasehold improvements over the shorter of the economic life or the lease term. Internal use software costs are expensed or capitalized depending on the project stage. Amounts capitalized are amortized over the estimated useful lives of the software, ranging from 3 to 10 years, beginning with the project's completion. Capitalized project expenditures are not depreciated until the underlying project is completed.

We evaluate the recoverability of our long-lived assets whenever changes in circumstances or events may indicate that the carrying amounts may not be recoverable. An impairment loss is recognized in the event the carrying value of the assets exceeds the future undiscounted cash flows attributable to such assets.

Foreign currency translation.  The financial statements of our foreign operations are translated into U.S. dollars for financial reporting purposes. The assets and liabilities of foreign operations whose functional currencies are not in U.S. dollars are translated at the period-end exchange rates, while revenue and expenses are translated at weighted-average exchange rates during the fiscal year. The cumulative translation effects are reflected as a component of “Accumulated other comprehensive loss” within shareholders' equity in the Consolidated Balance Sheets. Gains and losses on monetary transactions denominated in other than the functional currency of an operation are reflected within “Other (income) expenses, net” in the Consolidated Statements of Operations. Foreign currency gains and losses from changes in exchange rates have not been material to our consolidated operating results.

Revenue recognition.   We derive revenue from the sale of products (i.e., server, storage, and point of sale hardware, and software), support, maintenance and subscription services and professional services. Revenue is recorded in the period in which the goods are delivered or services are rendered and when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price to the customer is fixed or determinable, and collection is reasonably assured. We reduce revenue for estimated discounts, sales incentives, estimated customer returns, and other allowances. Discounts are offered based on the volume of products and services purchased by customers. Shipping and handling fees billed to customers are recognized as revenue and the related costs are recognized in cost of goods sold. Revenue is recorded net of any applicable taxes collected and remitted to governmental agencies.

We frequently enter into multiple-element arrangements with customers including hardware, software, professional consulting services and maintenance support services. For arrangements involving multiple deliverables, when deliverables include software and non-software products and services, we evaluate and separate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (a) the delivered item has value to the customer on a stand-alone basis; and (b) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in our control.

Consideration is allocated to each unit of accounting based on the unit's relative selling prices. In such circumstances, we use a hierarchy to determine the selling price to be used for allocating revenue to each deliverable: (i) vendor-specific objective evidence of selling price (VSOE), (ii) third-party evidence of selling price (TPE), and (iii) best estimate of selling price (BESP). VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable. VSOE is established for our software maintenance services and we use TPE or BESP to establish selling prices for our non-software related services. BESP is primarily used for elements that are not consistently priced within a narrow range or TPE is not available. We determine BESP for a deliverable by considering multiple factors including product class, geography, average discount, and management's historical pricing practices. Amounts allocated to the delivered hardware and software elements are recognized at the time of sale provided the other conditions for revenue recognition have been met. Amounts allocated to the undelivered maintenance and other services elements are recognized as the services are provided or on a straight-line basis over the service period. In certain instances, customer acceptance is required prior to the passage of title and risk of loss of the delivered products. In such cases, revenue is not recognized until the customer acceptance is obtained. Delivery and acceptance generally occur in the same reporting period.

In situations where our solutions contain software that is more than incidental, revenue related to the software and software-related elements is recognized in accordance with authoritative guidance on software revenue recognition. For the software and software-related elements of such transactions, revenue is allocated based on the relative fair value of each element, and fair value is determined by VSOE. If we cannot objectively determine the fair value of any undelivered element included in such multiple-element arrangements, we defer revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements. When the fair value of a delivered element has not been established, but fair value exists for the undelivered elements, we use the residual method to recognize revenue. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue.

Revenue recognition for complex contractual arrangements, especially those with multiple elements, requires a significant level of judgment and is based upon a review of specific contracts, past experience, the selling price of undelivered elements when sold separately, creditworthiness of customers, international laws and other factors. Changes in judgments about these factors could impact the timing and amount of revenue recognized between periods.

Revenue for hardware sales is recognized when the product is shipped to the customer and when obligations that affect the customer's final acceptance of the arrangement have been fulfilled. A majority of our hardware sales involves shipment directly from its suppliers to the end-user customers. In these transactions, we are responsible for negotiating price both with the supplier and the customer, payment to the supplier, establishing payment terms and product returns with the customer, and we bear the credit risk if the customer does not pay for the goods. As the principal contact with the customer, we recognize revenue and cost of goods sold when we are notified by the supplier that the product has been shipped. In certain limited instances, as shipping terms dictate, revenue is recognized upon receipt at the point of destination or upon installation at the customer site.

We offer proprietary software as well as remarketed software for sale to our customers. We offer our customers the right to license the software under a variety of models. Our customers can license our software under a perpetual model for an upfront fee or a subscription model. For subscription arrangements, we allow customers the right to use software, receive unspecified products as well as unspecified upgrades and enhancements and entitle the customer to receive hosting services for a specified term.  The subscription revenue is generally recognized ratably over the term of the arrangement, typically three to five years.  Revenue from subscription service arrangements is included in Support, maintenance and subscription services in the Consolidated Statements of Operations. A majority of our software sales do not require significant production, modification, or customization at the time of shipment (physically or electronically) to the customer. Substantially all of our software license arrangements do not include acceptance provisions. As such, revenue from both proprietary and remarketed software sales is typically recognized when the software has been shipped. For software delivered electronically, delivery is considered to have occurred when the customer either takes possession of the software via downloading or has been provided with the requisite codes that allow for immediate access to the software based on the U.S. Eastern time zone time stamp.

We also offer proprietary and third-party services to our customers. Proprietary services generally include: consulting, installation, integration and training. Many of our software arrangements include consulting services sold separately under consulting engagement contracts. When the arrangements qualify as service transactions, consulting revenue from these arrangements are accounted for separately from the software revenue. The significant factors considered in determining whether the revenue should be accounted for separately include the nature of the services (i.e., consideration of whether the services are essential to the functionality of the software), degree of risk, availability of services from other vendors, timing of payments, and the impact of milestones or other customer acceptance criteria on revenue realization. If there is significant uncertainty about the project completion or receipt of payment for consulting services, the revenue is deferred until the uncertainty is resolved.

For certain long-term proprietary service contracts with fixed or “not to exceed” fee arrangements, we estimate proportional performance using the hours incurred as a percentage of total estimated hours to complete the project consistent with the percentage-of-completion method of accounting. Accordingly, revenue for these contracts is recognized based on the proportion of the work performed on the contract. If there is no sufficient basis to measure progress toward completion, the revenue is recognized when final customer acceptance is received. Adjustments to contract price and estimated service hours are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. The aggregate of collections on uncompleted contracts in excess of related revenue is shown as a current liability

If an arrangement does not qualify for separate accounting of the software and consulting services, then the software revenue is recognized together with the consulting services using the percentage-of-completion or completed contract method of accounting. Contract accounting is applied to arrangements that include: milestones or customer-specific acceptance criteria that may affect the collection of revenue, significant modification or customization of the software, or provisions that tie the payment for the software to the performance of consulting services.

We also offer proprietary and third-party support to our customers. Support generally includes: support and maintenance of software and hardware products and subscription services. Revenue relating to proprietary support services is recognized evenly over the coverage period of the underlying agreement within support, maintenance and subscription revenue. In instances where we offer third-party support contracts to our customer, and the supplier is determined to be the primary obligor in the transaction, we report revenue at the time of the sale, only in the amount of the “commission” (equal to the selling price less the cost of sale) received rather than reporting revenue in the full amount of the selling price with separate reporting of the cost of sale.

Comprehensive (loss) income. Comprehensive (loss) income is the total of net (loss) income, as currently reported under GAAP, plus other comprehensive (loss) income. Other comprehensive (loss) income considers the effects of additional transactions and economic events that are not required to be recorded in determining net (loss) income, but rather are reported as a separate statement of comprehensive (loss) income.

Fair value measurements. We measure the fair value of financial assets and liabilities on a recurring or non-recurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. In determining fair value of financial assets and liabilities, we use various valuation techniques. Additional information regarding fair value measurements is provided in Note 16, Fair Value Measurements.

Investments in corporate-owned life insurance policies and marketable securities. Agilysys invests in corporate-owned life insurance policies and has historically invested in marketable securities primarily to satisfy future obligations of our employee benefit plans, including a benefit equalization plan (“BEP”) and supplemental executive retirement plan (“SERP”). Certain of these corporate-owned life insurance policies were held in a Rabbi Trust and were classified within “Other non-current assets” in the Consolidated Balance Sheets. Our investment in corporate-owned life insurance policies were recorded at their cash surrender value, which approximates fair value, at the balance sheet date. All obligations related to our employee benefit plans, BEP and SERP, were fulfilled in April 2012 with funds held in the Rabbi Trust.

Certain of these corporate-owned life insurance policies are endorsement split-dollar life insurance arrangements. We entered into a non-cancelable separate agreement with each of the former executives covered by these arrangements whereby we must maintain the life insurance policy for the specified amount and split a portion of the policy benefits with the former executive's designated beneficiary.

Additional information regarding the investments in corporate-owned life insurance policies and marketable securities is provided in Note 12, Employee Benefit Plans.

Income Taxes.  Income tax expense includes U.S. and foreign income taxes and is based on reported income before income taxes. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities are determined based on the enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or realized.

We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies.

We recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from uncertain tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet this threshold. Interest related to uncertain tax positions is recognized as part of the provision for income taxes and is accrued beginning in the period that such interest would be applicable under relevant tax law until such time that the related tax benefits are recognized. Our income taxes are described further in Note 11, Income Taxes.

Changes to Prior Period Presentation. In the first quarter of fiscal 2014, as a result of increased visibility into our services organization, certain costs previously classified in product development expenses were recorded in cost of goods sold to more properly reflect the nature of these expenses. The portion of these expenses that was erroneously recorded in previous periods was immaterial to the overall financial statements. Prior period presentation has been modified to conform to the current presentation.

Correction of Error.  During the first quarter of fiscal 2013, we recorded out-of-period adjustments to increase revenues, restructuring, severance and other charges and asset write-offs and other fair value adjustments by $0.3 million, $0.7 million and $0.2 million, respectively. The net impact of the adjustments increased our operating loss by $0.6 million, or $(0.03) per share, and represents a correction of error. In fiscal 2012, we erroneously omitted certain revenue transactions, the costs associated with certain terminated individuals and certain third party development costs for our previously impaired developed technology. Management performed an evaluation under Staff Accounting Bulletin No. 108 and concluded the effect of the adjustment was immaterial to prior year’s financial statements as well as the full-year fiscal 2013 financial statements.

Capitalized Software Development Costs.  The capitalization of software development cost for external use begins when a product’s technological feasibility has been established. Capitalization ends when the resulting product is available for general market release. Amortization of the capitalized software is classified within products cost of goods sold in the Consolidated Statements of Operations. For each capitalized software product, the annual amortization is equal to the greater of: (i) the amount computed using the ratio that the software product’s current fiscal year gross revenue bears to the total current fiscal year and anticipated future gross revenues for that product or (ii) the amount computed based on straight-line method over the remaining estimated economic life of the product, which is a range between three and eight years. The amount by which unamortized software costs exceeds the net realizable value, if any, is recognized as a charge to income in the period it is determined. We capitalized approximately $17.2 million, $13.7 million and $4.9 million during fiscal 2015, 2014 and 2013, respectively. Amortization of non-acquired developed capitalized software was $1.2 million, $0.2 million and $0.1 million during fiscal 2015, 2014 and 2013, respectively.

Adopted and Recently Issued Accounting Pronouncements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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. In April 2015, the FASB voted for a one-year deferral of the effective date of the new revenue recognition standard. Transition to the new guidance may be done using either a full or modified retrospective method. 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. The adoption of the ASU did not have any impact on our financial statements.

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.

XML

Income Taxes - Schedule of Income From Continuing Operations Before Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Loss before income taxes
United States	$ (12,697)	$ (5,475)	$ (9,594)
Foreign	146	89	262
Loss before income taxes	$ (12,551)	$ (5,386)	$ (9,332)

XML

Summary of Significant Accounting Policies (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Significant Accounting Policies [Line Items]
Capitalized Computer Software, Additions	$ 17.2	$ 13.7	$ 4.9
Minimum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	2 years
Maximum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	8 years
Building and building improvements [Member] | Minimum [Member]
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	7 years
Building and building improvements [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	30 years
Furniture [Member] | Minimum [Member]
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	7 years
Furniture [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	10 years
Equipment [Member] | Minimum [Member]
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	3 years
Equipment [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	10 years
Internally-Developed Software and Purchased for Internal-Use Software [Member] | Minimum [Member]
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	3 years
Internally-Developed Software and Purchased for Internal-Use Software [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life	10 years
Internally-Developed Software [Member]
Significant Accounting Policies [Line Items]
Amortization of capitalized software	$ 1.2	$ 0.2	$ 0.1
Customer relationships [Member] | Minimum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	2 years
Customer relationships [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	7 years
Non-competition agreements [Member] | Minimum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	2 years
Non-competition agreements [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	8 years
Developed technology [Member] | Minimum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	3 years
Developed technology [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	8 years
Supplier relationships [Member] | Minimum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	2 years
Supplier relationships [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Finite-lived intangible asset, useful life	8 years

XML

Discontinued Operations (Tables)

12 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Income from discontinued operations

For fiscal 2014 and 2013, the income from discontinued operations was comprised of the following:

	Year ended March 31,
(In thousands)	2014			2013
Discontinued operations:
Net revenue	$	28,950		$	143,261
Income from operations	249			$	8,196
Other expense, net	(266		)	(447		)
Gain on sale	21,933			—
Income on sale	21,916			7,749
Income tax expense	1,924			2,833
Income from discontinued operations	$	19,992		$	4,916

XML

Acquisitions (Tables)

12 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The following is a summary of the estimated 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

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

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 software to be sold, leased, or otherwise marketed, and is therefore carried in intangible assets on the balance sheet and is amortized on a straight-line basis as Products cost of goods sold within the Consolidated Statements of Operations.

XML

Goodwill and Intangible Assets (Details Textual) (USD $)	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Goodwill [Line Items]
Number of business operating segments	1
Amortization of intangible assets, excluding amortization of internal use software	$ 900,000	$ 1,200,000	$ 1,200,000
Amortization of intangible assets	3,461,000	6,414,000	3,284,000
Capitalized Computer Software, Additions	17,200,000	13,700,000	4,900,000
Developed technology [Member]
Goodwill [Line Items]
Amortization of intangible assets	$ 1,300,000	$ 300,000	$ 800,000

XML

Acquisitions Acquisitions (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jun. 10, 2013
Business Acquisition [Line Items]
Goodwill	19,622	$ 17,158
TimeManagement Corporation [Member]
Business Acquisition [Line Items]
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
Weighted Average Useful Life	5 years

XML

Restructuring Charges (Tables)

12 Months Ended

Mar. 31, 2015

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,								March 31,
(In thousands)	2014		Provision			Payments			2015
Fiscal 2015 Restructuring Plan:
Severance and employment costs	$	—	$	628		$	(178	)	$	450
Fiscal 2014 Restructuring Plan:
Severance and employment costs	534		368			(902		)	—
Total restructuring costs	534		996			(1,080		)	450
	Balance at								Balance at
	March 31,								March 31,
(In thousands)	2013		Provision			Payments			2014
Fiscal 2014 Restructuring Plan:
Severance and employment costs	—		1,257			(723		)	534
Fiscal 2012 Restructuring Plan:
Severance and employment costs	348		—			(348		)	—
Fiscal 2009 Restructuring Plan:
Facilities costs	236		32			(268		)	—
Total restructuring costs	584		1,289			(1,339		)	534
	Balance at								Balance at
	March 31,					Payments and			March 31,
(In thousands)	2012		Provision			Settlements			2013
Fiscal 2012 Restructuring Plan:
Severance and employment costs	$	5,257	$	1,146		$	(6,055	)	$	348
Facilities costs	297		(57		)	(240		)	—
Fiscal 2009 Restructuring Plan:
Severance and employment costs	—		—			—			—
Facilities costs	495		(2		)	(257		)	236
Total restructuring costs	$	6,049	$	1,087		$	(6,552	)	$	584

XML

Property and Equipment, Net (Tables)

12 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Property and equipment at March 31, 2015 and 2014 is as follows:

	Year ended March 31,
(In thousands)	2015			2014
Furniture and equipment	$	8,241		$	8,849
Software	8,196			16,982
Leasehold improvements	4,773			4,836
Project expenditures not yet in use	866			2,749
	22,076			33,416
Accumulated depreciation and amortization	(10,147		)	(21,165		)
Property and equipment, net	$	11,929		$	12,251

Schedule of capital leased assets

Total assets under capital leases at March 31, 2015 and 2014 are as follows:

	Year ended March 31,
(In thousands)	2015			2014
Capital leases	$	499		$	817
Less accumulated depreciation	(213		)	(692		)
Assets under capital lease, net	$	286		$	125

XML

Nature of Operations

12 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations

Agilysys is a leading technology company that provides innovative software for point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document management and mobile and wireless solutions and services to the hospitality industry. Our solutions and services allow property managers to better connect, interact and transact with their customers and enhance their customer relationships by streamlining operations, improving efficiency, increasing guest recruitment and wallet share, and enhancing the overall guest experience. We serve 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.

We operate throughout North America, Europe and Asia, with corporate services located in Alpharetta, GA, and offices in Singapore, Hong Kong and Malaysia.

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 the Condensed Consolidated Statement of Cash Flows for the twelve months ended March 31, 2014 and 2013.

Reference herein to any particular year or quarter refers to periods within the fiscal year ended March 31. For example, fiscal 2015 refers to the fiscal year ended March 31, 2015.

XML

Goodwill and Intangible Assets (Tables)

12 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The changes in the carrying amount of goodwill for the years ended March 31, 2015 and 2014 are as follows:

(In thousands)
Balance at March 31, 2013	$	14,128
Acquisitions	3,444
Impact of foreign currency translation	196
Allocation of goodwill to UK entity	(610		)
Balance at March 31, 2014	17,158
Acquisitions	2,464
Balance at March 31, 2015	$	19,622

Schedule of intangible assets

The following table summarizes our intangible assets at March 31, 2015, and 2014:

	2015									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		$	(10,775	)	$	—		$	10,775	$	(10,080	)	$	695
Non-competition agreements	2,700			(2,700		)	—			2,700		(2,473		)	227
Developed technology	10,660			(10,277		)	383			10,660		(10,156		)	504
Trade names	230			(7		)	223			—		—			—
Patented technology	80			(80		)	—			80		(80		)	—
	24,445			(23,839		)	606			24,215		(22,789		)	1,426
Unamortized intangible assets:
Trade names	9,200			N/A			9,200			9,200		N/A			9,200
Accumulated impairment	(570		)	N/A			(570		)	—		N/A			—
Finite life reclassification	(230		)	N/A			(230		)	—		N/A			—
	8,400			N/A			8,400			9,200		N/A			9,200
Total intangible assets	$	32,845		$	(23,839	)	$	9,006		$	33,415	$	(22,789	)	$	10,626
Software development costs	$	6,359		$	(1,443	)	$	4,916		$	5,094	$	(270	)	$	4,824
Project expenditures not yet in use	28,293			—			28,293			12,397		—			12,397
Accumulated impairment	(1,391		)	N/A			(1,391		)	—		N/A			—
Total software development costs	$	33,261		$	(1,443	)	$	31,818		$	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.

	Estimated
	Amortization
(In thousands)	Expense
Fiscal year ending March 31,
2016	$	1,068
2017	1,067
2018	1,067
2019	844
2020	85
Total	$	4,131

XML

Share-based Compensation (Details Textual) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2015
Stock Options [Member]
Stock Based Compensation (Textual) [Abstract]
Shares issued from treasury shares, net of shares withheld to cover applicable exercise price of award and to cover employee's minimum applicable income taxes (in shares)	8,065
Shares withheld to cover applicable exercise price of award (in shares)	6,935
Stock Settled Stock Appreciation Rights (SSARS) [Member]
Stock Based Compensation (Textual) [Abstract]
Shares issued from treasury shares, net of shares withheld to cover applicable exercise price of award and to cover employee's minimum applicable income taxes (in shares)	5,463
Shares withheld to cover the employee's minimum applicable income taxes (in shares)	1,446
Unrecognized stock based compensation expense related to non-vested shares	0.6
Weighted-average vesting period	1 year 8 months 2 days
Restricted Stock [Member]
Stock Based Compensation (Textual) [Abstract]
Shares issued from treasury shares, net of shares withheld to cover applicable exercise price of award and to cover employee's minimum applicable income taxes (in shares)	123,983
Shares withheld to cover the employee's minimum applicable income taxes (in shares)	31,805
Unrecognized stock based compensation expense related to non-vested shares	3.4
Weighted-average vesting period	2 years 1 month
2011 Stock Incentive Plan [Member]
Stock Based Compensation (Textual) [Abstract]
Shares authorized (in shares)	3,000,000
2011 Stock Incentive Plan [Member] | Stock Options [Member]
Stock Based Compensation (Textual) [Abstract]
Maximum number of shares that may be granted to an individual in a calendar year (in shares)	800,000
2011 Stock Incentive Plan [Member] | Stock Settled Stock Appreciation Rights (SSARS) [Member]
Stock Based Compensation (Textual) [Abstract]
Maximum number of shares that may be granted to an individual in a calendar year (in shares)	800,000
2011 Stock Incentive Plan [Member] | Restricted Shares and Restricted Share Units [Member]
Stock Based Compensation (Textual) [Abstract]
Maximum number of shares that may be granted to an individual in a calendar year (in shares)	400,000
Maximum aggregate number of shares that may be granted to an individual (in shares)	1,000,000

XML

Fair Value Measurements (Tables)

12 Months Ended

Mar. 31, 2015

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)	March 31, 2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — non-current	2,493		—		—		2,493
Liabilities:
Contingent consideration — current	$	8	$	—	$	—	$	8
Contingent consideration — non-current	104		—		—		104

	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:
Investments	$	28,999	$	—	$	28,999	$	—
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 corporate-owned life insurance Level 3 asset for the fiscal years ended March 31, 2015 and 2014:

	Level 3 assets and liabilities
(In thousands)	2015			2014
Corporate-owned life insurance:
Balance on April 1	$	4,360		$	3,673
Realized gains	57			—
Unrealized gain relating to instruments held at reporting date	65			600
Purchases, sales, issuances and settlements, net	(1,989		)	87
Balance on March 31	$	2,493		$	4,360

Summary of changes in the fair value of the Level 3 assets and liabilities

The following table presents a summary of changes in the fair value of the contingent consideration Level 3 liability for fiscal years ended March 31, 2015 and 2014:

	Level 3 assets and liabilities
(In thousands)	2015			2014
Contingent consideration:
Balance on April 1	$	1,739		$	—
Activity, payments and other charges (net)	(9		)	1,739
Fair value adjustment	(1,618		)	—
Balance on March 31	$	112		$	1,739

The fair value of the contingent consideration related to the TMC acquisition was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain revenue milestones would be achieved. As of March 31, 2015, due to a decrease in expected revenues associated with the contingent consideration, we recorded a gain of $1.6 million within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

XML

Goodwill and Intangible Assets - Schedule of Goodwill (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 19,622	$ 17,158
Acquisitions	3,444
Allocation of goodwill to UK entity	(610)
Goodwill, ending balance	$ 19,622	$ 17,158

XML

(Loss) Earnings per Share - Amounts Used in Computing (Loss) Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Numerator:
Loss from continuing operations - basic and diluted	$ (5,426)	$ (2,715)	$ (1,127)	$ (2,229)	$ (663)	$ (1,711)	$ (1,310)	$ 789	$ (11,497)	$ (2,895)	$ (6,214)
Income (loss) from discontinued operations - basic and diluted					(1,346)	(952)	21,763	527	0	19,992	4,916
Net income (loss)	$ (5,426)	$ (2,715)	$ (1,127)	$ (2,229)	$ (2,009)	$ (2,663)	$ 20,453	$ 1,316	$ (11,497)	$ 17,097	$ (1,298)
Denominator:
Weighted average shares outstanding - basic and diluted (in shares)									22,338,000	22,135,000	21,880,000
(Loss) earnings per share - basic and diluted:
Loss from continuing operations (in dollars per share)					$ (0.03)	$ (0.08)	$ (0.06)	$ 0.04	$ (0.51)	$ (0.13)	$ (0.28)
Income (loss) from discontinued operations (in dollars per share)					$ (0.06)	$ (0.04)	$ 0.98	$ 0.02	$ 0.00	$ 0.90	$ 0.22
Net loss per share (in dollars per share)									$ (0.51)	$ 0.77	$ (0.06)
Anti-dilutive stock options, SSARs, restricted shares and performance shares									1,382,000	1,806,000	1,781,000
Outstanding weighted average basic shares, number of excluded restricted shares and performance shares									322,086	155,777	139,767

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Current assets:
Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations	$ 75,067	$ 99,566
Cash and cash equivalents	75,067	99,566
Accounts receivable, net of allowances of $1,101 and $721, respectively	25,481	23,615
Inventories	641	481
Prepaid expenses	3,820	3,300
Other current assets	8	2,892
Total current assets	105,017	129,854
Property and equipment, net	11,929	12,251
Goodwill	19,622	17,158
Intangible assets, net	9,006	10,626
Capitalized software development, net	31,818	17,221
Other non-current assets	4,133	3,785
Total assets	181,525	190,895
Current liabilities:
Accounts payable	16,586	11,073
Deferred revenue	23,881	22,795
Accrued liabilities	10,001	14,232
Capital lease obligations, current	142	43
Total current liabilities	50,610	48,143
Deferred income taxes, non-current	3,053	3,422
Capital lease obligations, non-current	47	292
Other non-current liabilities	3,627	6,165
Commitments and contingencies (see Note 13)
Shareholders' equity:
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 22,467,970 and 22,145,195 shares outstanding at March 31, 2014 and 2013, respectively	9,482	9,482
Treasury shares, 9,138,861 and 9,460,916 at March 31, 2014 and 2013, respectively	(2,646)	(2,741)
Capital in excess of stated value	(10,675)	(13,409)
Retained earnings	128,178	139,675
Accumulated other comprehensive loss	(151)	(134)
Total shareholders' equity	124,188	132,873
Total liabilities and shareholders' equity	$ 181,525	$ 190,895

XML

Acquisitions Acquisitions (Details Textual) (USD $)	12 Months Ended			0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013	Jun. 10, 2013
Business Acquisition [Line Items]
Business Acquisition, Purchase Price Allocation, Goodwill Amount	$ 19,622,000	$ 17,158,000
Cash paid for acquisiton	3,750,000	(1,812,000)	0
TimeManagement Corporation [Member]
Business Acquisition [Line Items]
Business Acquisition, Purchase Price Allocation, Goodwill Amount				3,444,000
Cash paid for acquisiton				1,800,000
Business Acquisition, Contingent Consideration, Potential Cash Payment				$ 1,800,000
Business Acquisition, Goodwill, Expected Tax Deductible Period				15 years
Business Combination, Contingent Consideration Arrangements, Period				5 years

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Operating activities
Net income (loss)	$ (11,497)	$ 17,097	$ (1,298)
Less: Income from discontinued operations	0	(19,992)	(4,916)
Loss from continuing operations	(11,497)	(2,895)	(6,214)
Adjustments to reconcile loss from continuing operations to net cash used in operating activities:
Restructuring, severance and other charges	1,482	1,392	1,495
Payments for restructuring, severance and other charges	(1,348)	(1,741)	(6,673)
Litigation Settlement, Expense	203	0	1,664
Payments for legal settlements	(1,714)	(110)	0
Asset impairments and related charges	3,454	327	120
Depreciation	2,225	2,074	2,137
Amortization	4,755	6,726	4,089
Share-based compensation	3,140	2,119	1,638
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	(1,619)	0	0
Deferred income taxes	(371)	(178)	(244)
Change in cash surrender value of company owned life insurance policies	(57)	(600)	(107)
Excess tax benefit from equity awards	(14)	(37)	0
Changes in operating assets and liabilities:
Accounts receivable	(1,935)	(7,846)	(741)
Inventories	(171)	380	426
Prepaid expense	(526)	(498)	(801)
Accounts payable	5,528	1,073	1,595
Deferred revenue	1,146	2,784	(5,046)
Accrued liabilities	(3,868)	1,624	(3,170)
Income taxes receivable	(823)	(2,702)	(2,960)
Other changes, net	(176)	(508)	(258)
Net cash provided by (used in) operating activities from continuing operations	(2,186)	1,384	(13,050)
Net cash (used in) provided by operating activities from discontinued operations	0	1,311	(2,345)
Net cash provided by (used in) operating activities	(2,186)	73	(10,705)
Proceeds from sale of business units	809	35,846	0
Cash paid for acquisitions, net	(3,750)	1,812	0
Payments to Acquire Marketable Securities	(10,240)	0	0
Proceeds from sale of marketable securities	10,107	0	4,347
Capital expenditures	(4,650)	(4,023)	(2,532)
Capitalized software development costs	(15,813)	(12,200)	(3,906)
Additional (investments in) proceeds from corporate-owned life insurance policies	1,905	(87)	(108)
Net cash provided by (used in) investing activities from continuing operations	(21,632)	17,724	(2,199)
Net cash used in investing activities from discontinued operations	0	(155)	(854)
Net cash provided by (used in) investing activities	(21,632)	17,569	(3,053)
Financing activities
Principal payments under long-term obligations	(144)	(177)	(289)
Exercise of employee stock options	102	169	67
Repurchase of common shares to satisfy employee tax withholding and option price	(373)	(912)	(278)
Excess tax benefit from equity awards	14	37	0
Net cash used in financing activities from continuing operations	(401)	(883)	(500)
Net cash used in financing activities from discontinued operations	0	(80)	(377)
Net cash used in financing activities	(401)	(963)	(877)
Effect of exchange rate changes on cash	(280)	(44)	(21)
Cash flows provided by (used in) continuing operations	(24,499)	18,181	(15,770)
Cash flows (used in) provided by discontinued operations	0	(1,546)	1,114
Net increase (decrease) in cash and cash equivalents	(24,499)	16,635	(14,656)
Cash and cash equivalents at beginning of period	99,566	82,931	97,587
Cash and cash equivalents at end of period	75,067	99,566	82,931
Less cash presented in current assets of discontinued operations on balance sheet	0	0	487
Cash and cash equivalents at end of period - continuing operations	$ 75,067	$ 99,566	$ 82,444

XML

Financing Arrangements (Details Textual) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Line of Credit Facility [Line Items]
Capital Leased Assets, Number of Units	$ 500	$ 800
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Property, Plant, and Equipment Other, Accumulated Depreciation	$ 200	$ 700
Minimum [Member]
Line of Credit Facility [Line Items]
Interest rate on capital lease	2.60%
Maximum [Member]
Line of Credit Facility [Line Items]
Interest rate on capital lease	10.10%

XML

Additional Balance Sheet Information (Tables)

12 Months Ended

Mar. 31, 2015

Balance Sheet Related Disclosures [Abstract]

Additional information related to the Company's Consolidated Balance Sheets

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

	Year ended March 31,
(In thousands)	2015		2014
Accrued liabilities:
Salaries, wages, and related benefits	$	6,768	$	8,308
Other taxes payable	952		1,122
Accrued legal settlements	70		1,630
Restructuring liabilities	450		534
Severance liabilities	199		—
Professional fees	504		674
Software license fees	—		500
Deferred rent	279		477
Contingent consideration	8		127
Other	771		860
Total	$	10,001	$	14,232
Other non-current liabilities:
Income taxes payable/uncertain tax positions	$	1,499	$	2,440
Deferred rent	1,666		1,755
Contingent consideration	104		1,612
Other	358		358
Total	$	3,627	$	6,165

XML

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)	Mar. 31, 2015	Mar. 31, 2014
Deferred tax assets:
Accrued liabilities	$ 3,961,000	$ 3,884,000
Allowance for doubtful accounts	297,000	408,000
Inventory valuation reserve	24,000	14,000
Restructuring reserve	0	54,000
Federal losses and credit carryforwards	58,992,000	55,231,000
Foreign net operating losses	326,000	330,000
State losses and credit carryforwards	10,162,000	10,706,000
Deferred compensation	0	70,000
Deferred revenue	146,000	61,000
Goodwill and other intangible assets	3,129,000	3,611,000
Other	340,000	514,000
Deferred tax assets, gross	77,377,000	74,883,000
Deferred Tax Assets, Valuation Allowance, Current	76,420,000
Less: valuation allowance	76,400,000	73,014,000
Total	957,000	1,869,000
Deferred tax liabilities:
Property and equipment & software amortization	(690,000)	(1,560,000)
Indefinite-lived goodwill & intangible assets	(3,324,000)	(3,622,000)
Deferred Tax Liabilities, Other	34,000	(81,000)
Total	(3,980,000)	(5,263,000)
Total deferred tax liabilities	(3,023,000)	(3,394,000)
Undistributed Earnings of Foreign Subsidiaries	$ 700,000	$ 1,800,000

XML

Share-based Compensation

12 Months Ended

Mar. 31, 2015

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.

For stock options and SSARs, the exercise price must be set at least equal to the closing market price of our common shares on the date of grant. The maximum term of stock option and SSAR awards is seven years from the date of grant. Stock option and SSARs awards vest over a period established by the Compensation Committee of the Board of Directors. SSARs may be granted in conjunction with, or independently from, a stock option granted under the 2011 Plan. SSARs granted in connection with a stock option are exercisable only to the extent that the stock option to which it relates is exercisable and the SSARs terminate upon the termination or exercise of the related stock option.

Restricted shares and restricted share units, whether time-vested or performance-based, may be issued at no cost or at a purchase price that may be below their fair market value, but are subject to forfeiture and restrictions on their sale or other transfer. Performance-based awards may be conditioned upon the attainment of specified performance objectives and other conditions, restrictions, and contingencies. Restricted shares and restricted share units have the right to receive dividends, or dividend equivalents in the case of restricted share units, if any, subject to the same forfeiture provisions that apply to the underlying awards. Subject to certain exceptions set forth in the 2011 Plan, for awards to employees, no performance-based restricted shares or restricted share units shall be based on a restriction period of less than one year, and any time-based restricted shares or restricted share units shall have a minimum restriction period of three years.

We have a shareholder-approved 2006 Stock Incentive Plan ("the 2006 Plan”), as well as, a 2000 Stock Option Plan for Outside Directors 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, stock-settled stock appreciation rights, 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 stock-settled appreciation right 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.

We recognized less than $0.1 million of excess tax benefits related to the exercise of stock options and SSARs in fiscal 2014. As discussed in Note 11, Income Taxes, in fiscal 2013 and 2012, we were in a net operating loss position for U.S. federal income taxes. Therefore, we did not recognize and will not recognize an income tax benefit related to stock options or SSARs exercised until that tax benefit can be realized.

The following table summarizes the share-based compensation expense for options, SSARs, restricted and performance awards included in the Consolidated Statements of Operations for fiscal 2015, 2014 and 2013:

	Year ended March 31,
(In thousands)	2015		2014		2013
Product development	$	1,168	$	700	$	475
Sales and marketing	135		90		65
General and administrative	1,837		1,329		1,098
Total share-based compensation expense	$	3,140	$	2,119	$	1,638

Stock Options

The following table summarizes the activity during fiscal 2015 for stock options awarded under the 2006 Plan:

(In thousands, except share and per share data)	Number of Options		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
			(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 March 31, 2015	582,500		$	15.41	1.1	$	—

The following table presents additional information related to stock option activity during the fiscal years ended March 31, 2015, 2014 and 2013:

(In thousands)	2015		2014		2013
Proceeds from stock options exercised	$	102	$	169	$	67
Total intrinsic value of stock options exercised	$	4	$	1,402	$	382

All stock options are vested and we do not have any remaining unrecognized stock based compensation expense related to stock options.

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 fiscal 2015.

Stock-Settled Stock Appreciation Rights

Stock-Settled 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.

We use a Black-Scholes-Merton option pricing model to estimate the fair value of SSARs. The following table summarizes the principal assumptions utilized in valuing SSARs granted in fiscal 2015, 2014 and 2013:

	2015	2014	2013
Risk-free interest rate	1.52%	1.05%-1.39%	0.67%-0.89%
Expected life (in years)	5	5	5
Expected volatility	82.56%	80.78%-80.93%	81.03%-83.77%
Weighted average grant date fair value	$7.23	$7.96	$4.92

The risk-free interest rate is based on the yield of a zero coupon U.S. Treasury bond whose maturity period approximates the expected life of the SSARs. The expected life is estimated using historical data representing the period of time the awards are expected to be outstanding. The estimated fair value of the SSARs granted, less expected forfeitures, is recognized over the vesting period of the awards utilizing the graded vesting method. Under this method, the compensation cost related to unvested amounts begins to be recognized as of the grant date.

The following table summarizes the activity during fiscal 2015 for SSARs awarded under the 2011 Plan and the 2006 Plan:

(In thousands, except share and per share data)	Number of Rights		Weighted- Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
			(per right)		(in years)
Outstanding at April 1, 2014	320,236		$	9.05
Granted	115,020		14.41
Exercised	(16,078	)	7.75
Forfeited	(11,835	)	7.46
Cancelled/expired	(13,333	)	7.46
Outstanding at March 31, 2015	394,010		$	10.76	4.8	$	388
Exercisable at March 31, 2015	286,849		$	9.63	4.3	$	388
Vested and expected to vest at March 31, 2015	375,666		$	10.61	4.8	$	388

The following table presents additional information related to SSARs activity during fiscal 2015, 2014 and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	792	$	611	$	595
Total intrinsic value of SSARs exercised	$	96	$	2,131	$	373
Total fair value of SSARs vesting	$	779	$	636	$	778

As of March 31, 2015, total unrecognized stock based compensation expense related to non-vested SSARs was $0.6 million, which is expected to be recognized over a weighted-average vesting period of 1.7 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 twelve months endedMarch 31, 2015. 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 twelve months endedMarch 31, 2015 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	360,321		13.79
Vested	(154,900	)	11.68
Forfeited	(22,836	)	13.3
Outstanding at March 31, 2015	322,086		$	13.49

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. During the fiscal 2015, a total of 123,983 shares, net of 31,805 shares were withheld from the vested restricted shares to cover the employee's minimum applicable income taxes, were issued from treasury. The shares withheld were returned to treasury shares.

The following table presents additional information related to restricted stock activity during fiscal years 2015, 2014, and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	2,348	$	1,486	$	989
Total fair value of restricted share vesting	$	1,572	$	1,579	$	1,099

As of March 31, 2015, total unrecognized stock based compensation expense related to non-vested restricted stock was $3.4 million, which is expected to be recognized over a weighted-average vesting period of 2.1 years. We do not include restricted stock in the calculation of earnings per share until the shares are vested.

Performance Shares

In fiscal 2013, we granted shares to certain of our key employees under the 2011 Plan, the vesting of which is contingent upon meeting various company-wide performance goals within a two-year period.

The following table summarizes the activity during fiscal 2015 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	—		—
Vested	(17,728	)	$	8.64
Outstanding at March 31, 2015	—		$	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.

The following table presents additional information related to performance share activity during the fiscal 2015, 2014, and 2013:

(In thousands)	2015		2014		2013
Compensation expense	$	77	$	22	$	54
Total fair value of performance share vesting	$	174	$	—	—

Once attainment of the performance goals becomes probable, compensation expense related to performance share awards is recognized over the vesting period based upon the closing market price of our common shares on the grant date.

Compensation expense related to performance share awards is recognized ratably over the vesting period based upon the closing market price of our common shares on the grant date. As of March 31, 2015, there is no remaining unrecognized stock based compensation expense related to non-vested performance shares.

XML

Income Taxes (Tables)

12 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of income from continuing operations before income taxes

For the year ended March 31, income from continuing operations before income taxes consisted of the following:

(In thousands)	2015			2014			2013
Loss before income taxes
United States	$	(12,697	)	$	(5,475	)	$	(9,594	)
Foreign	146			89			262
Total loss from continuing operations before income taxes	$	(12,551	)	$	(5,386	)	$	(9,332	)

Schedule of income tax (benefit) expense

For the year ended March 31, income tax (benefit) expense consisted of the following:

(In thousands)	2015			2014			2013
Income tax (benefit) expense
Current:
Federal	$	25		$	(2,206	)	$	(3,002	)
State and local	(798		)	(161		)	28
Foreign	90			55			100
Deferred:
Federal	(206		)	(161		)	—
State and local	(141		)	(20		)	(252		)
Foreign	(24		)	2			8
Total income tax benefit	$	(1,054	)	$	(2,491	)	$	(3,118	)

Schedule of effective income tax rate reconciliation

The following table presents the principal components of the difference between the effective tax rate for continuing operations to the U.S. federal statutory income tax rate for the years ended March 31:

(In thousands)	2015			2014			2013
Income tax benefit at the statutory rate of 35%	$	(4,405	)	$	(2,103	)	$	(3,266	)
(Benefit) provision for state taxes	(172		)	(106		)	(14		)
Impact of foreign operations	11			14			(48		)
Indefinite life assets	—			47			(251		)
Officer life insurance	(20		)	(28		)	(75		)
Change in valuation allowance	4,241			(76		)	627
Change in liability for unrecognized tax benefits	(857		)	(561		)	(230		)
Meals and entertainment	102			113			114
Other	46			209			25
Total income tax benefit	$	(1,054	)	$	(2,491	)	$	(3,118	)

Schedule of deferred tax assets and liabilities

Deferred tax assets and liabilities as of March 31, are as follows:

(In thousands)	2015			2014
Deferred tax assets:
Accrued liabilities	$	3,961		$	3,884
Allowance for doubtful accounts	297			408
Inventory valuation reserve	24			14
Restructuring reserve	—			54
Federal losses and credit carryforwards	58,992			55,231
Foreign net operating losses	326			330
State losses and credit carryforwards	10,162			10,706
Deferred compensation	—			70
Deferred revenue	146			61
Goodwill and other intangible assets	3,129			3,611
Other	340			514
	77,377			74,883
Less: valuation allowance	(76,420		)	(73,014		)
Total	957			1,869
Deferred tax liabilities:
Property and equipment & software amortization	(690		)	(1,560		)
Indefinite-lived goodwill & intangible assets	(3,324		)	(3,622		)
Other	34			(81		)
Total	(3,980		)	(5,263		)
Total deferred tax liabilities	$	(3,023	)	$	(3,394	)

Schedule of unrecognized tax benefits rollforward

We recorded a liability for unrecognized tax positions. The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the years ended March 31:

(In thousands)	2015			2014			2013
Balance at April 1	$	2,568		$	4,248		$	2,873
Additions:
Relating to positions taken during current year	—			—			1,624
Relating to positions taken during prior year	—			—			—
Reductions:
Relating to tax settlements	—			—			—
Relating to positions taken during prior year	(204		)	(1,238		)	—
Relating to lapse in statute	(609		)	(442		)	(249		)
Balance at March 31	$	1,755		$	2,568		$	4,248

XML

Quarterly Results (Unaudited)

12 Months Ended

Mar. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (Unaudited)

Quarterly Results (Unaudited)

Because quarterly reporting of per share data is used independently for each reporting period, the sum of per share amounts for the four quarters in the fiscal year will not necessarily equal annual per share amounts. GAAPprohibits retroactive adjustment of quarterly per share amounts so that the sum of those amounts equals amounts for the full year.

We have traditionally experienced seasonal revenue weakness during our fiscal first quarter ending June 30. Additionally, the timing of large one-time orders, such as those associated with significant remarketed product sales around large customer refresh cycles or significant volume rollouts, occasionally creates volatility in our quarterly results.

	Year ended March 31, 2015
	First			Second			Third			Fourth			Year
(In thousands except per share data)	quarter			quarter			quarter			Quarter
Net revenue	$	23,746		$	26,318		$	24,742		$	28,708		$	103,514
Gross profit	14,674			16,669			14,129			14,610			60,081
Asset write-offs and other fair value adjustments	—			—			—			1,836			1,836
Restructuring, severance and other charges	370			448			95			569			1,482
Legal settlements	$	149		$	54		$	—		$	—		203
Loss from continuing operations	(2,229		)	(1,127		)	(2,715		)	(5,426		)	(11,497		)
Net (loss) income	$	(2,229	)	$	(1,127	)	$	(2,715	)	$	(5,426	)	$	(11,497	)
Per share data-basic and diluted
Loss from continuing operations	$	(0.1	)	$	(0.05	)	$	(0.12	)	$	(0.24	)	$	(0.51	)
Income (loss) from discontinued operations	—			—			—			—			—
Net (loss) income	$	(0.1	)	$	(0.05	)	$	(0.12	)	$	(0.24	)	$	(0.51	)

	Year ended March 31, 2014
	First		Second			Third			Fourth			Year
(In thousands except per share data)	quarter		quarter			quarter			Quarter
Net revenue	$	23,700	$	24,846		$	24,965		$	27,750		$	101,261
Gross profit	15,637		16,588			15,155			16,660			64,040
Asset write-offs and other fair value adjustments	—		18			309			—			327
Restructuring, severance and other charges	55		562			206			569			1,392
Income (loss) from continuing operations	$	789	$	(1,310	)	$	(1,711	)	$	(663	)	$	(2,895	)
Income (loss) from discontinued operations, net of taxes	527		21,763			(952		)	(1,346		)	19,992
Net income (loss)	$	1,316	$	20,453		$	(2,663	)	$	(2,009	)	$	17,097
Per share data-basic:
Income (loss) from continuing operations	$	0.04	$	(0.06	)	$	(0.08	)	$	(0.03	)	$	(0.13	)
Income (loss) from discontinued operations	0.02		0.98			(0.04		)	(0.06		)	0.90
Net income (loss)	$	0.06	$	0.92		$	(0.12	)	$	(0.09	)	$	0.77
Per share data-diluted:
Income (loss) from continuing operations	$	0.04	$	(0.06	)	$	(0.08	)	$	(0.03	)	$	(0.13	)
Income (loss) from discontinued operations	0.02		0.98			(0.04		)	(0.06		)	0.90
Net income (loss)	$	0.06	$	0.92		$	(0.12	)	$	(0.09	)	$	0.77

XML

Employee Benefit Plans Employee Benefit Plans - 401 (k) Plan (Details Textual) (401(k) Plan [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, matching contribution cost recognized	$ 1.3	$ 1.2	$ 1.1
100% on first 1% [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, employer matching contributions, percent of one dollar match for employee percentage match	100.00%
Defined contribution plan, employer matching contributions, percent of employee's pre-tax contributions	1.00%
50% up to next 5% [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, employer matching contributions, percent of one dollar match for employee percentage match	50.00%
Defined contribution plan, employer matching contributions, percent of employee's pre-tax contributions	5.00%

XML

Consolidated Statements of Shareholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Common stock [Member]	Treasury stock [Member]	Capital in excess of stated value [Member]	Retained earnings [Member]	Accumulated other comprehensive loss [Member]
Beginning balance at Mar. 31, 2012	$ 114,438	$ 9,482	$ (2,919)	$ (16,032)	$ 123,876	$ 31
Beginning balance (in shares) at Mar. 31, 2012		31,607	9,731
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Non-cash share based compensation expense	2,057			2,057
Restricted shares issued	0		61	(61)
Restricted shares issued (in shares)			203
Shares issued upon exercise of stock options and SSARs	67		32	35
Shares issued upon exercise of stock options and SSARs (in shares)			108
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares	(278)		(12)	(266)
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares (in shares)			(42)
Net income (loss)	(1,298)				(1,298)
Unrealized foreign currency translation adjustments	(1,126)
Reclassification of foreign currency translation adjustments included in net income (loss)	0
Unrealized translation adjustment	(1,126)					(1,126)
Unrealized loss on securities	(4)					(4)
Ending balance at Mar. 31, 2013	113,856	9,482	(2,838)	(14,267)	122,578	(1,099)
Ending balance (in shares) at Mar. 31, 2013		(31,607)	(9,462)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Non-cash share based compensation expense	1,931			1,931
Restricted shares issued	0		41	(41)
Restricted shares issued (in shares)			138
Shares issued upon exercise of stock options and SSARs	171		244	(73)
Shares issued upon exercise of stock options and SSARs (in shares)			814
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares	(1,184)		(188)	(996)
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares (in shares)			(629)
Net income (loss)	17,097				17,097
Unrealized foreign currency translation adjustments	220
Reclassification of foreign currency translation adjustments included in net income (loss)	745
Unrealized translation adjustment	220					220
Unrealized loss on securities	745					745
Ending balance at Mar. 31, 2014	132,873	9,482	(2,741)	(13,409)	139,675	(134)
Ending balance (in shares) at Mar. 31, 2014		(31,607)	(9,139)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Non-cash share based compensation expense	3,140			3,140
Restricted shares issued	0		102	(102)
Restricted shares issued (in shares)			342
Shares issued upon exercise of stock options and SSARs	102		5	97
Shares issued upon exercise of stock options and SSARs (in shares)			21
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares	(427)		(12)	(415)
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	14
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares (in shares)			(41)
Net income (loss)	(11,497)				(11,497)
Unrealized foreign currency translation adjustments	(9)					(9)
Reclassification of foreign currency translation adjustments included in net income (loss)						8
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax	8
Ending balance at Mar. 31, 2015	$ 124,188	$ 9,482	$ (2,646)	$ (10,675)	$ 128,178	$ (151)
Ending balance (in shares) at Mar. 31, 2015		(31,607)	(8,817)

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 888	$ 1,101
Common stock, no par value	$ 0	$ 0
Common stock, stated value	$ 0.3	$ 0.3
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	31,606,831	31,606,831
Common stock, shares outstanding	22,789,355	22,467,970
Treasury shares	8,817,477	9,138,861

XML

Additional Balance Sheet Information

12 Months Ended

Mar. 31, 2015

Balance Sheet Related Disclosures [Abstract]

Additional Balance Sheet Information

Additional Balance Sheet Information

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

	Year ended March 31,
(In thousands)	2015		2014
Accrued liabilities:
Salaries, wages, and related benefits	$	6,768	$	8,308
Other taxes payable	952		1,122
Accrued legal settlements	70		1,630
Restructuring liabilities	450		534
Severance liabilities	199		—
Professional fees	504		674
Software license fees	—		500
Deferred rent	279		477
Contingent consideration	8		127
Other	771		860
Total	$	10,001	$	14,232
Other non-current liabilities:
Income taxes payable/uncertain tax positions	$	1,499	$	2,440
Deferred rent	1,666		1,755
Contingent consideration	104		1,612
Other	358		358
Total	$	3,627	$	6,165

Accounts Receivable, net

Accounts receivable, net of allowance for doubtful accounts was $25.5 million and $23.6 million as of March 31, 2015 and March 31, 2014, respectively. The related allowance for doubtful accounts was $0.9 million and $1.1 million as of March 31, 2015 and March 31, 2014, respectively. On January 12, 2015, an involuntary bankruptcy petition was filed against Caesars Entertainment Operating Company, Inc. (Caesars) under Chapter 11 of the U.S. Bankruptcy Code. On January 15, 2015, Caesars and certain of its affiliates filed a voluntary bankruptcy petition under Chapter 11. Those cases have been consolidated in the United States Bankruptcy Court for the Northern District of Illinois. At March 31, 2015, our accounts receivables owing by Caesars and its affiliates who have filed a bankruptcy petition totaled approximately $3.2 million, including both pre- and post-petition claims.  The total amount owed represents approximately 13% of our outstanding accounts receivable as of March 31, 2015. As of May 26, 2015, we filed a proof of claim with the Bankruptcy Court identifying approximately $0.7 million of pre-petition claims still outstanding. Caesars entertainment properties have continued to operate in the ordinary course following the bankruptcy filing, and we have continued to do business with Caesars in the ordinary course.

XML

Document and Entity Information (USD $)	12 Months Ended
	Mar. 31, 2015	May 29, 2015	Sep. 30, 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-K
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		22,770,057
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 208,096,430

XML

Income Taxes

12 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the year ended March 31, income from continuing operations before income taxes consisted of the following:

(In thousands)	2015			2014			2013
Loss before income taxes
United States	$	(12,697	)	$	(5,475	)	$	(9,594	)
Foreign	146			89			262
Total loss from continuing operations before income taxes	$	(12,551	)	$	(5,386	)	$	(9,332	)

For the year ended March 31, income tax (benefit) expense consisted of the following:

(In thousands)	2015			2014			2013
Income tax (benefit) expense
Current:
Federal	$	25		$	(2,206	)	$	(3,002	)
State and local	(798		)	(161		)	28
Foreign	90			55			100
Deferred:
Federal	(206		)	(161		)	—
State and local	(141		)	(20		)	(252		)
Foreign	(24		)	2			8
Total income tax benefit	$	(1,054	)	$	(2,491	)	$	(3,118	)

The following table presents the principal components of the difference between the effective tax rate for continuing operations to the U.S. federal statutory income tax rate for the years ended March 31:

(In thousands)	2015			2014			2013
Income tax benefit at the statutory rate of 35%	$	(4,405	)	$	(2,103	)	$	(3,266	)
(Benefit) provision for state taxes	(172		)	(106		)	(14		)
Impact of foreign operations	11			14			(48		)
Indefinite life assets	—			47			(251		)
Officer life insurance	(20		)	(28		)	(75		)
Change in valuation allowance	4,241			(76		)	627
Change in liability for unrecognized tax benefits	(857		)	(561		)	(230		)
Meals and entertainment	102			113			114
Other	46			209			25
Total income tax benefit	$	(1,054	)	$	(2,491	)	$	(3,118	)

Our tax provision includes a provision for income taxes in certain foreign jurisdictions where subsidiaries are profitable, but only a minimal benefit is reflected related to U.S. and certain foreign tax losses due to the uncertainty of the ultimate realization of future benefits from these losses. The 2015 tax benefit primarily results from the expiration of statute of limitations for unrecognized tax positions and the recognition of a valuation allowance on the Eatec purchased trade name deferred tax liability that was converted from an indefinite life to a finite life. The 2015 tax benefit differs from the statutory rate primarily due to the recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, a decrease in unrecognized tax benefits attributable to expiration of statute of limitations, state taxes and other U.S. permanent book to tax differences.

The 2014 and 2013 tax benefit differs from the statutory rate primarily due to the intra-period tax allocation rules associated with the discontinued operations and recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance. Other items affecting the rate include a decrease in unrecognized tax benefits attributable to expiration of statute of limitations, state taxes and other U.S. permanent book to tax differences.

Deferred tax assets and liabilities as of March 31, are as follows:

(In thousands)	2015			2014
Deferred tax assets:
Accrued liabilities	$	3,961		$	3,884
Allowance for doubtful accounts	297			408
Inventory valuation reserve	24			14
Restructuring reserve	—			54
Federal losses and credit carryforwards	58,992			55,231
Foreign net operating losses	326			330
State losses and credit carryforwards	10,162			10,706
Deferred compensation	—			70
Deferred revenue	146			61
Goodwill and other intangible assets	3,129			3,611
Other	340			514
	77,377			74,883
Less: valuation allowance	(76,420		)	(73,014		)
Total	957			1,869
Deferred tax liabilities:
Property and equipment & software amortization	(690		)	(1,560		)
Indefinite-lived goodwill & intangible assets	(3,324		)	(3,622		)
Other	34			(81		)
Total	(3,980		)	(5,263		)
Total deferred tax liabilities	$	(3,023	)	$	(3,394	)

At March 31, 2015, we had $170.3 million of a federal net operating loss carryforward that expires, if unused, in fiscal years 2031 to 2035. Included in this net operating loss is $4.2 million of tax deductions in excess of recorded windfall tax benefits associated with stock-based compensation. Upon realization of the U.S. federal net operating losses, we will recognize a windfall tax benefit as an increase to additional paid-in capital. Our Hong Kong subsidiary has $0.3 million of net operating loss carryforwards that can be carried forward indefinitely. At March 31, 2015 we also had $143.7 million of state net operating loss carryforwards that expire, if unused, in fiscal years 2016 through 2035.

We recorded valuation allowances related to certain deferred income tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets. At March 31, 2015, the total valuation allowance against deferred tax assets of $76.4 million was comprised of a valuation allowance of $76.1 million for federal and state deferred tax assets, and a valuation allowance of $0.3 million associated with deferred tax assets in Hong Kong. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. 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. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected taxable income, and tax planning strategies in making this assessment. In order to fully realize the deferred tax assets, we will need to generate future taxable income before the expiration of the deferred tax assets governed by the tax code. 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.

The undistributed earnings of our foreign subsidiaries are not subject to U.S. federal and state income taxes unless such earnings are distributed in the form of dividends or otherwise to the extent of current and accumulated earnings and profits. The undistributed earnings of foreign subsidiaries are permanently reinvested and totaled $0.7 million and $1.8 million as of March 31, 2015 and 2014, respectively. We made the determination of permanent reinvestment on the basis of sufficient evidence that demonstrates we will invest the undistributed earnings overseas indefinitely for use in working capital, as well as foreign acquisitions and expansion. The determination of the amount of the unrecognized deferred U.S. income tax liability related to the undistributed earnings is not practicable.

We use the with-and-without approach for ordering tax benefits derived from the share-based payment awards. Using the with-and-without approach, actual income taxes payable for the period are compared to the amount of tax payable that would have been incurred absent the deduction for employee share-based payments in excess of the amount of compensation cost recognized for financial reporting. As a result of this approach, tax net operating loss carryforwards not generated from share-based payments in excess of cost recognized for financial reporting are considered utilized before the current period's share-based deduction. We did not recognize any tax benefits during 2015 for stock-based compensation. We recognized less than $0.1 million of excess tax benefits during 2014. We did not recognize any tax benefits during 2013 for stock-based compensation.

We recorded a liability for unrecognized tax positions. The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the years ended March 31:

(In thousands)	2015			2014			2013
Balance at April 1	$	2,568		$	4,248		$	2,873
Additions:
Relating to positions taken during current year	—			—			1,624
Relating to positions taken during prior year	—			—			—
Reductions:
Relating to tax settlements	—			—			—
Relating to positions taken during prior year	(204		)	(1,238		)	—
Relating to lapse in statute	(609		)	(442		)	(249		)
Balance at March 31	$	1,755		$	2,568		$	4,248

As of March 31, 2015, we had a liability of $1.8 million related to uncertain tax positions, the recognition of which would affect our effective income tax rate.

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 as a result of the expiration of various statutes of limitations. We are routinely audited and the outcome of tax examinations could also result in a reduction in unrecognized tax benefits. 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 recognize interest accrued on any unrecognized tax benefits as a component of income tax expense. Penalties are recognized as a component of general and administrative expenses. We recognized interest and penalty benefit of $0.3 million, benefit of $0.2 million and expense of $0.1 million for the years ended March 31, 2015, 2014 and 2013, respectively. As of March 31, 2015 and 2014, we had approximately $0.8 million and $1.1 million of interest and penalties accrued, respectively.

In the U.S. we file consolidated federal and state income tax returns where statutes of limitations generally range from three to five years. Although we have resolved examinations with the IRS through tax year ended March 31, 2010, U.S. federal tax years are open from 2006 forward due to attribute carryforwards. The statute of limitations is open from fiscal year 2002 forward in certain state jurisdictions. We also file income tax returns in international jurisdictions where statutes of limitations generally range from three to seven years. Years beginning after 2007 are open for examination by certain foreign taxing authorities.

XML

Share-based Compensation - Additional Information Related to Restricted Shares (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 3,140	$ 2,119	$ 1,638
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	2,348	1,486	989
Total fair value of restricted shares vesting	$ 1,572	$ 1,579	$ 1,099

XML

Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Net revenue:
Products	$ 31,846	$ 34,629	$ 31,030
Support, maintenance and subscription services	56,013	53,169	49,110
Professional services	15,655	13,463	13,868
Total net revenue	103,514	101,261	94,008
Cost of goods sold:
Products, inclusive of developed technology amortization	18,732	17,027	17,109
Support, maintenance and subscription services	12,461	10,786	10,326
Professional services	12,240	9,408	8,954
Total cost of goods sold	43,433	37,221	36,389
Gross profit	60,081	64,040	57,619
Gross profit margin	58.00%	63.20%	61.30%
Operating expenses:
Product development	25,316	25,212	23,892
Sales and marketing	16,357	14,059	13,350
General and administrative	21,668	20,750	20,984
Depreciation of fixed assets	2,225	2,074	2,137
Amortization of intangibles	3,461	6,414	3,284
Asset impairments and related charges	3,454	327	120
Increase (Decrease) in Fair Value Adjustments on Other Assets (Liabilities) Carried at Fair Value under Fair Value Option	1,836	327	120
Litigation Settlement, Expense	203	0	1,664
Restructuring, severance and other charges	1,482	1,392	1,495
Operating loss	(12,467)	(6,188)	(9,307)
Other (income) expenses:
Interest income	(110)	(123)	(13)
Interest expense	48	184	266
Other income, net	146	(863)	(228)
Loss before income taxes	(12,551)	(5,386)	(9,332)
Income tax benefit	(1,054)	(2,491)	(3,118)
Loss from continuing operations	(11,497)	(2,895)	(6,214)
Income from discontinued operations, net of taxes	0	19,992	4,916
Net income (loss)	$ (11,497)	$ 17,097	$ (1,298)
Weighted average shares outstanding
Weighted average shares outstanding - basic and diluted	22,338	22,135	21,880
Net (loss) income per share - basic and diluted:
Loss from continuing operations	$ (0.51)	$ (0.13)	$ (0.28)
Income from discontinued operations	$ 0.00	$ 0.90	$ 0.22
Net income (loss) per share	$ (0.51)	$ 0.77	$ (0.06)

XML

Restructuring Charges

12 Months Ended

Mar. 31, 2015

Restructuring Charges [Abstract]

Restructuring 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. In addition, we assess the property and equipment associated with the related facilities for impairment. The remaining useful lives of property and equipment associated with the related operations are re-evaluated based on the respective restructuring plan, resulting in the acceleration of depreciation and amortization of certain assets.

Fiscal 2015 Restructuring Activity

Q2 - 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 Q2 fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of March 31, 2015, there was no further liability for the Q2 fiscal 2015 restructuring activity.

Q4 - In the fourth quarter of fiscal 2015, we announced additional restructuring actions designed to continue the effort 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 $0.5 million in restructuring charges related to the Q4 fiscal 2015 restructuring activity, comprised of severance and other employee related benefits. As of March 31, 2015, we had a remaining liability of approximately $0.5 million recorded for the Q4 fiscal 2015 restructuring activity.

Fiscal 2014 Restructuring Activity

Q1 - 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. These restructuring activities were completed in fiscal 2014. We recorded $0.7 million in restructuring charges during fiscal 2014, comprised of severance and other employee related benefits. As of March 31, 2014, there was no further liability for the Q1 fiscal 2014 restructuring activity.

Q4 - 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. We recorded approximately $0.6 million in restructuring charges during fiscal 2014, comprised of severance and other employee related benefits. As of March 31, 2014, we had a remaining liability of approximately $0.5 million recorded for the Q4 fiscal 2014 restructuring activity.

Fiscal 2012 Restructuring Activity

In the first quarter of fiscal 2012, we announced restructuring actions, including the relocation of our corporate services from Solon, Ohio to Alpharetta, Georgia, designed to better align those services with our operating units and reduce costs following the sale of TSG. These restructuring actions were mostly completed by March 31, 2012 and impacted approximately 130 employees. To date, we have recorded $12.1 million in restructuring charges. These charges were primarily comprised of severance and related benefits. As of March 31, 2015, there was no further liability for fiscal 2012 restructuring activity.

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

	Balance at								Balance at
	March 31,								March 31,
(In thousands)	2014		Provision			Payments			2015
Fiscal 2015 Restructuring Plan:
Severance and employment costs	$	—	$	628		$	(178	)	$	450
Fiscal 2014 Restructuring Plan:
Severance and employment costs	534		368			(902		)	—
Total restructuring costs	534		996			(1,080		)	450
	Balance at								Balance at
	March 31,								March 31,
(In thousands)	2013		Provision			Payments			2014
Fiscal 2014 Restructuring Plan:
Severance and employment costs	—		1,257			(723		)	534
Fiscal 2012 Restructuring Plan:
Severance and employment costs	348		—			(348		)	—
Fiscal 2009 Restructuring Plan:
Facilities costs	236		32			(268		)	—
Total restructuring costs	584		1,289			(1,339		)	534
	Balance at								Balance at
	March 31,					Payments and			March 31,
(In thousands)	2012		Provision			Settlements			2013
Fiscal 2012 Restructuring Plan:
Severance and employment costs	$	5,257	$	1,146		$	(6,055	)	$	348
Facilities costs	297		(57		)	(240		)	—
Fiscal 2009 Restructuring Plan:
Severance and employment costs	—		—			—			—
Facilities costs	495		(2		)	(257		)	236
Total restructuring costs	$	6,049	$	1,087		$	(6,552	)	$	584

The remaining severance and other employment costs of approximately $0.45 million will be paid in fiscal 2016.

XML

Discontinued Operations

12 Months Ended

Mar. 31, 2015

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. During fiscal 2015 we received full payment of the amount due to Agilysys from Verteda. 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. The sale of our UK entity represented a disposal of a component of an entity. As such, the operating results of the UK entity have been reported as a component of discontinued operations in the Consolidated Statements of Operations for the periods presented. In addition, the assets and liabilities of the UK entity are classified as discontinued operations in our Consolidated Balance Sheets for the periods presented.

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 with Kyrus, under which we provided certain transitional administrative and support services to Kyrus through January 31, 2014. The sale of RSG represented a disposal of a component of an entity. As such, the operating results of RSG have been reported as a component of discontinued operations in the Consolidated Statements of Operations for the periods presented.

Components of Results of Discontinued Operations

For fiscal 2014 and 2013, the income from discontinued operations was comprised of the following:

	Year ended March 31,
(In thousands)	2014			2013
Discontinued operations:
Net revenue	$	28,950		$	143,261
Income from operations	249			$	8,196
Other expense, net	(266		)	(447		)
Gain on sale	21,933			—
Income on sale	21,916			7,749
Income tax expense	1,924			2,833
Income from discontinued operations	$	19,992		$	4,916

The gain on sale included in "Income from discontinued operations" in fiscal 2014 includes a reclassification of foreign currency translation adjustments of $0.7 million, net of taxes as a result of the sale of the UK entity.

XML

Fair Value Measurements

12 Months Ended

Mar. 31, 2015

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 twelve months endedMarch 31, 2015.

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)	March 31, 2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — non-current	2,493		—		—		2,493
Liabilities:
Contingent consideration — current	$	8	$	—	$	—	$	8
Contingent consideration — non-current	104		—		—		104

	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:
Investments	$	28,999	$	—	$	28,999	$	—
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 fair value of investments, comprised of commercial paper 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.

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 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 corporate-owned life insurance Level 3 asset for the fiscal years ended March 31, 2015 and 2014:

	Level 3 assets and liabilities
(In thousands)	2015			2014
Corporate-owned life insurance:
Balance on April 1	$	4,360		$	3,673
Realized gains	57			—
Unrealized gain relating to instruments held at reporting date	65			600
Purchases, sales, issuances and settlements, net	(1,989		)	87
Balance on March 31	$	2,493		$	4,360

The inputs used to value our contingent consideration and employee benefit plan obligations are not observable in the market and therefore, these amounts are classified within Level 3 in the fair value hierarchy.

The following table presents a summary of changes in the fair value of the contingent consideration Level 3 liability for fiscal years ended March 31, 2015 and 2014:

	Level 3 assets and liabilities
(In thousands)	2015			2014
Contingent consideration:
Balance on April 1	$	1,739		$	—
Activity, payments and other charges (net)	(9		)	1,739
Fair value adjustment	(1,618		)	—
Balance on March 31	$	112		$	1,739

The fair value of the contingent consideration related to the TMC acquisition was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain revenue milestones would be achieved. As of March 31, 2015, due to a decrease in expected revenues associated with the contingent consideration, we recorded a gain of $1.6 million within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

XML

Employee Benefit Plans

12 Months Ended

Mar. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

401(k) Plan

We maintain 401(k) plans for employees meeting certain service requirements. Generally, the plans allow eligible employees to contribute a portion of their compensation, and we match $1.00 for every $1.00 on the first 1% of the employee's pre-tax contributions and $0.50 for every $0.50 up to the next 5% of the employee's pre-tax contributions. We may also make discretionary contributions each year for the benefit of all eligible employees under the plans. Agilysys matching contributions were $1.3 million, $1.2 million, and $1.1 million in fiscal 2015, 2014, and 2013, respectively.

Endorsement Split-Dollar Life Insurance

Agilysys provides certain former executives with life insurance benefits through endorsement split-dollar life insurance arrangements. We entered into a separate agreement with each of the former executives covered by these arrangements whereby we must maintain the life insurance policy for the specified amount and split a portion of the policy benefits with the former executive's designated beneficiary. In fiscal 2014, we increased the cash surrender value of one of these policies by $0.5 million due to the anticipated redemption and recorded the benefit in "Other (income) expenses, net” in the accompanying Consolidated Statements of Operations. In the first quarter of fiscal 2015, this policy was redeemed for $2.0 million.

The expense related to these benefit obligations is based on estimates developed by management by evaluating actuarial information and including assumptions with respect to discount rates and mortality. The expense associated with these benefits was classified within “General, and administrative” in our Consolidated Statements of Operations. The related liability, which was $0.2 million at March 31, 2015 and 2014, respectively, was recorded within “Other non-current liabilities” in our Consolidated Balance Sheets. The aggregate cash surrender value of the underlying corporate-owned split-dollar life insurance contracts, which were classified within “Other non-current assets” in our Consolidated Balance Sheets, was $2.5 million (net of policy loans of $0.6 million) at March 31, 2015. The aggregate cash surrender value of the underlying corporate-owned split-dollar life insurance contracts which were classified within "Other current assets" and "Other non-current assets” in our Consolidated Balance Sheets was $2.0 million and $2.4 million (net of policy loans of $0.2 million) at March 31, 2014.

Changes in the cash surrender value of these policies related to gains and losses incurred on these investments are classified within “Other (income) expenses, net” in the accompanying Consolidated Statements of Operations. We recorded a gain of $0.1 million dollars in fiscal 2015, a gain of $0.6 million in fiscal 2014 and a gain of $0.1 million in fiscal 2013 related to the corporate-owned life insurance policies.

XML

Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Assets:
Contingent consideration — current	$ 279	$ 477
Contingent consideration — non-current	104	1,612
Recorded Value [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Corporate-owned life insurance — non-current	2,493	28,999
Contingent consideration — current	8
Contingent consideration — non-current	104
Active markets for identical assets or liabilities (Level 1) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Corporate-owned life insurance — non-current	0	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	28,999
Active markets for unobservable inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Corporate-owned life insurance — non-current	2,493
Contingent consideration — current	8
Contingent consideration — non-current	$ 104

XML

Financing Arrangements

12 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Financing Arrangements

Financing Arrangements

The following is a summary of long-term obligations at March 31, 2015, and 2014:

(In thousands)	2015			2014
Capital lease obligations	$	189		$	335
Less: current maturities	(142		)	(43		)
Long -term capital lease obligations	$	47		$	292

Capital Leases

Agilysys leases certain equipment under capital leases expiring in various years through fiscal 2018. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are depreciated over the shorter of their related lease terms or their estimated productive lives. Assets recorded under capital leases were $0.5 million and $0.8 million, as of March 31, 2015 and 2014, respectively. Accumulated depreciation related to assets recorded under capital leases was $0.2 million and $0.7 million as of March 31, 2015 and 2014, respectively. Depreciation of assets under capital leases is included in depreciation expense.

Minimum future lease payments under capital leases as of March 31, 2015, are as follows:

(In thousands)	Amount
Fiscal year ending March 31,
2016	$	147
2017	30
2018	19
Total minimum lease payments	$	196
Less: amount representing interest	(7		)
Present value of minimum lease payments	$	189

Interest rates on capitalized leases vary from 2.6% to 10.1% and are imputed based on the lower of our incremental borrowing rate at the inception of each lease or the lessor's implicit rate of return.

XML

Supplemental Disclosures of Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Supplemental Cash Flow Elements [Abstract]
Cash payments for interest	$ (62)	$ 110	$ 252
Cash payments (refunds) from income tax, net	19	485	9
Acquisition of property and equipment under lease obligations	$ 0	$ 410	$ 41

XML

Property and Equipment, Net

12 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, Net

Property and equipment at March 31, 2015 and 2014 is as follows:

	Year ended March 31,
(In thousands)	2015			2014
Furniture and equipment	$	8,241		$	8,849
Software	8,196			16,982
Leasehold improvements	4,773			4,836
Project expenditures not yet in use	866			2,749
	22,076			33,416
Accumulated depreciation and amortization	(10,147		)	(21,165		)
Property and equipment, net	$	11,929		$	12,251

Total depreciation expense on property and equipment was $2.2 million, $2.1 million, and $2.1 million during fiscal 2015, 2014 and 2013, respectively.

Total amortization expense on capitalized internal-use software was $2.5 million, $5.3 million and $2.1 million during fiscal 2015, 2014, and 2013, respectively. In fiscal 2014, we initiated an internal enterprise resource planning (ERP) system replacement project and determined that amortization for our existing ERP system should be accelerated. We recorded approximately $3.2 million in fiscal 2014 of additional amortization in connection with this acceleration. The existing ERP system was fully amortized as of June 30, 2014.

During the fourth quarter of fiscal 2015, a shift in customer preference for next generation offerings with more features and compatibility as compared to our Elevate™ POS hosted subscription solution, resulted in a write-off in the amount of $1.5 million. In fiscal 2014, we wrote off approximately $0.3 million related to certain internal use software in connection with the ERP system replacement project. These charges are classified within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

Assets under capital leases are included in property and equipment categories above. Total assets under capital leases at March 31, 2015 and 2014 are as follows:

	Year ended March 31,
(In thousands)	2015			2014
Capital leases	$	499		$	817
Less accumulated depreciation	(213		)	(692		)
Assets under capital lease, net	$	286		$	125

XML

Goodwill and Intangible Assets

12 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill, Intangible Assets and Software Development Costs

Agilysys allocates the cost of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the cost over the fair value of the identified net assets acquired is recorded as goodwill.

Goodwill

Agilysys tests goodwill for impairment at the reporting unit level upon identification of impairment indicators, or at least annually. A reporting unit is the operating segment or one level below the operating segment (depending on whether certain criteria are met). Goodwill was allocated to our reporting units that are anticipated to benefit from the synergies of the business combinations generating the underlying goodwill. Agilysys has one operating segment.

We conducted our annual qualitative assessment (Step Zero Analysis) test on February 1, 2015 and 2014 to determine whether it would be necessary to perform the two-step goodwill impairment test. Among other things, we considered the i) excess in fair value of the reporting unit over its carrying amount from the most recent step one calculation, ii) macroeconomic conditions, iii) industry and market trends, and iv) overall financial performance. It was determined based on the Step Zero Analysis that it is more likely than not that the fair value of the operations exceeded its carrying amount.

The changes in the carrying amount of goodwill for the years ended March 31, 2015 and 2014 are as follows:

(In thousands)
Balance at March 31, 2013	$	14,128
Acquisitions	3,444
Impact of foreign currency translation	196
Allocation of goodwill to UK entity	(610		)
Balance at March 31, 2014	17,158
Acquisitions	2,464
Balance at March 31, 2015	$	19,622

Intangible Assets and Software Development Costs

The following table summarizes our intangible assets at March 31, 2015, and 2014:

	2015									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		$	(10,775	)	$	—		$	10,775	$	(10,080	)	$	695
Non-competition agreements	2,700			(2,700		)	—			2,700		(2,473		)	227
Developed technology	10,660			(10,277		)	383			10,660		(10,156		)	504
Trade names	230			(7		)	223			—		—			—
Patented technology	80			(80		)	—			80		(80		)	—
	24,445			(23,839		)	606			24,215		(22,789		)	1,426
Unamortized intangible assets:
Trade names	9,200			N/A			9,200			9,200		N/A			9,200
Accumulated impairment	(570		)	N/A			(570		)	—		N/A			—
Finite life reclassification	(230		)	N/A			(230		)	—		N/A			—
	8,400			N/A			8,400			9,200		N/A			9,200
Total intangible assets	$	32,845		$	(23,839	)	$	9,006		$	33,415	$	(22,789	)	$	10,626
Software development costs	$	6,359		$	(1,443	)	$	4,916		$	5,094	$	(270	)	$	4,824
Project expenditures not yet in use	28,293			—			28,293			12,397		—			12,397
Accumulated impairment	(1,391		)	N/A			(1,391		)	—		N/A			—
Total software development costs	$	33,261		$	(1,443	)	$	31,818		$	17,491	$	(270	)	$	17,221

Indefinite-lived intangible assets, comprised of two purchased trade names InfoGenesis™ and Eatec®, are tested for impairment upon identification of impairment indicators, or at least annually. An impairment loss is recognized if the carrying amount is greater than fair value. The income approach using "the relief from royalty method" was used to value the trade names as of February 1, 2015 and 2014. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. This approach is dependent on a number of factors, including estimates of future cash flows, royalty rates, discount rates and other variables.

During the fourth quarter of fiscal 2015, certain restructuring activities incurred to better align product development, sales and marketing and general and administrative functions impacted the expected remaining useful life of the products under the Eatec® trade name. The trade name was determined to have a finite life and subsequently written down to its fair value to be amortized over five years. The fair value of this trade name was calculated based on future cash flows over the remaining useful life resulting in an impairment charge of $0.6 million as of March 31, 2015. This charge is classified within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations. The InfoGenesis™ indefinite-lived purchased trade name was tested for impairment as of February 1, 2015 and 2014, resulting in a fair value exceeding the carrying amount each year.

At each balance sheet date, the unamortized capitalized software development costs for external use is compared to the net realizable value of that product. The amount by which unamortized software costs exceeds the net realizable value, if any, is recognized as a charge to income in the period it is determined. As of March 31, 2015, we determined that the remaining net book value of our InfoGenesis Mobile (IG Mobile) software exceeded its net realizable value resulting in an impairment charge of $1.4 million. This charge is classified within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

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

	Estimated
	Amortization
(In thousands)	Expense
Fiscal year ending March 31,
2016	$	1,068
2017	1,067
2018	1,067
2019	844
2020	85
Total	$	4,131

Amortization expense related to software development costs related to assets to be sold, leased, or otherwise marketed was $1.3 million, $0.3 million and $0.8 million for the fiscal years ended March 31, 2015, 2014 and 2013, respectively. These charges are included as Products cost of goods sold within the Consolidated Statements of Operations. Amortization expense relating to other definite-lived intangible assets was $0.9 million, $1.2 million, and $1.2 million for the fiscal years ended March 31, 2015, 2014 and 2013, respectively. These charges are classified as operating expenses within the Consolidated Statements of Operations.

Capitalized software development costs are carried on our balance sheet at net realizable value, net of accumulated amortization. We capitalized approximately $17.2 million, $13.7 million and $4.9 million during fiscal 2015, 2014 and 2013, respectively.

XML

Supplemental Disclosures of Cash Flow Information

12 Months Ended

Mar. 31, 2015

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosures of Cash Flow Information

Supplemental Disclosures of Cash Flow Information

Additional information related to the Consolidated Statements of Cash Flows is as follows:

	Year ended March 31,
(In thousands)	2015		2014	2013
Cash (received) payments for interest, net	(62	)	110	252
Cash payments from income tax, net	19		485	9
Acquisition of property and equipment under lease obligations	—		410	41

XML

Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
Income tax benefit at the statutory rate of 35%	$ (4,405)	$ (2,103)	$ (3,266)
(Benefit) provision for state taxes	(172)	(106)	(14)
Impact of foreign operations	11	14	(48)
Indefinite life assets	0	47	(251)
Officer life insurance	(20)	(28)	(75)
Change in valuation allowance	4,241	(76)	627
Change in liability for unrecognized tax benefits	(857)	(561)	(230)
Meals and entertainment	102	113	114
Other	46	209	25
Total income tax benefit	$ (1,054)	$ (2,491)	$ (3,118)
Federal statutory rate	35.00%	35.00%	35.00%

XML

Fair Value Measurements - Changes in Fair Value of Level 3 Assets and Liabilities on a Recurring Basis (Details) (Corporate-owned life insurance [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Corporate-owned life insurance [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 4,360	$ 3,673
Realized gains	57	0
Unrealized gain relating to instruments held at reporting date	65	600
Purchases, sales, issuances and settlements, net	(1,989)	87
Balance at end of period	$ 2,493	$ 4,360

XML

Income Taxes - Schedule of Unrecognized Tax Benefits Rollforward (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2010
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, beginning of period	$ 2,568	$ 4,248		$ 2,873
Additions:
Relating to positions taken during current year	0	0	1,624
Relating to positions taken during prior year	0	0	0
Reductions:
Relating to tax settlements	0	0	0
Relating to positions taken during prior year	(204)	(1,238)	0
Relating to lapse in statute	(609)	(442)	(249)
Unrecognized tax benefits, end of period	$ 1,755	$ 2,568	$ 4,248	$ 2,873

XML

Income Taxes - Schedule of Income Tax (Benefit) Expense (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Current:
Federal	$ 25	$ (2,206)	$ (3,002)
State and local	(798)	(161)	28
Foreign	90	55	100
Deferred:
Federal	(206)	(161)	0
State and local	(141)	(20)	(252)
Foreign	(24)	2	8
Total income tax benefit	$ (1,054)	$ (2,491)	$ (3,118)

XML

Supplemental Disclosures of Cash Flow Information (Tables)

12 Months Ended

Mar. 31, 2015

Supplemental Cash Flow Elements [Abstract]

Schedule of supplemental cash flow information

Additional information related to the Consolidated Statements of Cash Flows is as follows:

	Year ended March 31,
(In thousands)	2015		2014	2013
Cash (received) payments for interest, net	(62	)	110	252
Cash payments from income tax, net	19		485	9
Acquisition of property and equipment under lease obligations	—		410	41

XML

Property and Equipment, Net - Schedule of Capital Leased Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Property, Plant and Equipment [Abstract]
Capital leases	$ 499	$ 817
Less accumulated depreciation	(213)	(692)
Assets under capital lease, net	$ 286	$ 125

XML

(Loss) Earnings per Share

12 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

(Loss) Earnings per Share

(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.

	Year ended March 31,
(In thousands, except per share data)	2015			2014			2013
Numerator:
Loss from continuing operations - basic and diluted	$	(11,497	)	$	(2,895	)	$	(6,214	)
Income from discontinued operations - basic and diluted	—			19,992			4,916
Net (loss) income - basic and diluted	$	(11,497	)	$	17,097		$	(1,298	)
Denominator:
Weighted average shares outstanding - basic and diluted	22,338			22,135			21,880
(Loss) earnings per share - basic and diluted:
Loss from continuing operations	$	(0.51	)	$	(0.13	)	$	(0.28	)
Income from discontinued operations	—			0.90			0.22
Net (loss) income per share	$	(0.51	)	$	0.77		$	(0.06	)
Anti-dilutive stock options, SSARs, restricted shares and performance shares	1,382			1,806			1,781

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, 322,086, 155,777 and 139,767 of restricted shares and performance shares at March 31, 2015, 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. In addition, when a loss from continuing operations is reported, adjusting the denominator of diluted earnings per share would also be anti-dilutive to the loss per share, even if the entity has net income after adjusting for a discontinued operation. Therefore, for all periods presented, basic weighted-average shares outstanding were used in calculating the diluted net loss per share.

XML

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Mar. 31, 2015

Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

Schedule II - Valuation and Qualifying Accounts Years ended March 31,2015, 2014 and 2013

	Balance at		Charged to					Balance at
	beginning of		costs and					end of
(In thousands)	year		expenses		Deductions			year
2015
Deferred tax valuation allowance	$	73,014	$	3,406	$	—		$	76,420
Allowance for doubtful accounts	$	1,101	$	1,219	$	(1,432	)	$	888
2014
Deferred tax valuation allowance	$	73,595	$	—	$	(581	)	$	73,014
Allowance for doubtful accounts	$	720	$	453	$	(72	)	$	1,101
2013
Deferred tax valuation allowance	$	77,904	$	—	$	(4,309	)	$	73,595
Allowance for doubtful accounts	$	353	$	392	$	(25	)	$	720

XML

Restructuring Charges (Details Textual) (USD $)	12 Months Ended			21 Months Ended	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013 employee	Mar. 31, 2015	Mar. 31, 2012
Restructuring Charges (Textual) [Abstract]
Number of employees impacted through restructuring actions				130
Restructuring charges	$ 996,000	$ 1,289,000	$ 1,087,000
Restructuring liabilities	450,000	534,000			450,000
Restructuring Plan Fiscal Two Zero One Four [Member]
Restructuring Charges (Textual) [Abstract]
Restructuring charges	700,000				600,000
Restructuring liabilities	500,000				500,000
Fiscal 2012 Restructuring Plan [Member]
Restructuring Charges (Textual) [Abstract]
Restructuring and related charges						$ 12,100,000

XML

Quarterly Results (Unaudited) (Tables)

12 Months Ended

Mar. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Schedule of quarterly financial information

	Year ended March 31, 2015
	First			Second			Third			Fourth			Year
(In thousands except per share data)	quarter			quarter			quarter			Quarter
Net revenue	$	23,746		$	26,318		$	24,742		$	28,708		$	103,514
Gross profit	14,674			16,669			14,129			14,610			60,081
Asset write-offs and other fair value adjustments	—			—			—			1,836			1,836
Restructuring, severance and other charges	370			448			95			569			1,482
Legal settlements	$	149		$	54		$	—		$	—		203
Loss from continuing operations	(2,229		)	(1,127		)	(2,715		)	(5,426		)	(11,497		)
Net (loss) income	$	(2,229	)	$	(1,127	)	$	(2,715	)	$	(5,426	)	$	(11,497	)
Per share data-basic and diluted
Loss from continuing operations	$	(0.1	)	$	(0.05	)	$	(0.12	)	$	(0.24	)	$	(0.51	)
Income (loss) from discontinued operations	—			—			—			—			—
Net (loss) income	$	(0.1	)	$	(0.05	)	$	(0.12	)	$	(0.24	)	$	(0.51	)

	Year ended March 31, 2014
	First		Second			Third			Fourth			Year
(In thousands except per share data)	quarter		quarter			quarter			Quarter
Net revenue	$	23,700	$	24,846		$	24,965		$	27,750		$	101,261
Gross profit	15,637		16,588			15,155			16,660			64,040
Asset write-offs and other fair value adjustments	—		18			309			—			327
Restructuring, severance and other charges	55		562			206			569			1,392
Income (loss) from continuing operations	$	789	$	(1,310	)	$	(1,711	)	$	(663	)	$	(2,895	)
Income (loss) from discontinued operations, net of taxes	527		21,763			(952		)	(1,346		)	19,992
Net income (loss)	$	1,316	$	20,453		$	(2,663	)	$	(2,009	)	$	17,097
Per share data-basic:
Income (loss) from continuing operations	$	0.04	$	(0.06	)	$	(0.08	)	$	(0.03	)	$	(0.13	)
Income (loss) from discontinued operations	0.02		0.98			(0.04		)	(0.06		)	0.90
Net income (loss)	$	0.06	$	0.92		$	(0.12	)	$	(0.09	)	$	0.77
Per share data-diluted:
Income (loss) from continuing operations	$	0.04	$	(0.06	)	$	(0.08	)	$	(0.03	)	$	(0.13	)
Income (loss) from discontinued operations	0.02		0.98			(0.04		)	(0.06		)	0.90
Net income (loss)	$	0.06	$	0.92		$	(0.12	)	$	(0.09	)	$	0.77

XML

Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (11,497)	$ 17,097	$ (1,298)
Other comprehensive income (loss), net of tax:
Unrealized foreign currency translation adjustments	(9)	220	(1,126)
Reclassification of foreign currency translation adjustments included in net income (loss)		(745)	0
Unrealized loss on sale of securities	(8)	0	(4)
Total comprehensive income (loss)	$ (11,514)	$ 18,062	$ (2,428)

XML

Acquisitions (Notes)

12 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

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 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. 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 five years. 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. As of March 31, 2015, we recorded a gain of $1.6 million to adjust the carrying value of the TMC contingent consideration to fair value. This adjustment was recorded as a result of a decrease in expected revenues associated with the contingent consideration. The gain was recorded within "Asset write-offs and other fair value adjustments" in the Consolidated Statements of Operations.

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 Consolidated Financial Statements from the date of acquisition and did not have a material impact on our Consolidated Financial Statements or related disclosures.

The following is a summary of the estimated 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 fifteen 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 software to be sold, leased, or otherwise marketed, and is therefore carried in intangible assets on the balance sheet and is amortized on a straight-line basis as Products cost of goods sold within the Consolidated Statements of Operations.

XML

Financing Arrangements - Schedule of Future Lease Payments under Capital Leases (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2015	$ 147
2016	30
2017	19
Total minimum lease payments	196
Less: amount representing interest	(7)
Present value of minimum lease payments	$ 189

XML

Share-based Compensation - Additional Information Related to Performance Shares (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 3,140	$ 2,119	$ 1,638
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	77	22	54
Total fair value of performance share vesting	$ 174	$ 0	$ 0

XML

Employee Benefit Plans Employee Benefit Plans - Endorsement Split-Dollar Life Insurance (Details Textual) (Endorsement Split-Dollar Life Insurance [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2013
Endorsement Split-Dollar Life Insurance [Member]
Defined Benefit Plan Disclosure [Line Items]
Cash Surrender Value of Life Insurance, Increase in Face Amount	$ 0.5
Amount of postretirement benefit classified in Other non-current liabilities in Consolidated Balance Sheet	0.2
Aggregate cash surrender value of underlying life insurance, net of policy loans	2.5	2.4
Policy loans	0.6	0.2
Corporate-owned life insurance policies, gain (loss) recognized and classified within Other (income) expenses, net on Consolidated Statements of Operations	$ 0.1	$ 0.6	$ 0.1

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Principles of consolidation

Principles of consolidation.  The consolidated financial statements include the accounts of Agilysys, Inc. and subsidiaries. Investments in affiliated companies are accounted for by the equity or cost method, as appropriate. All inter-company accounts have been eliminated. Unless otherwise indicated, amounts in Notes to Consolidated Financial Statements refer to continuing operations.

Use of estimates

Use of estimates.  Preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents. We consider all highly liquid investments purchased with an original maturity from date of acquisition of three months or less to be cash equivalents. Other highly liquid investments considered cash equivalents with no established maturity date are fully redeemable on demand (without penalty) with settlement of principal and accrued interest on the following business day after instruction to redeem. Such investments are readily convertible to cash with no penalty and can include certificates of deposit, commercial paper, treasury bills, money market funds and other investments.

Allowance for doubtful accounts

Allowance for doubtful accounts.  We maintain allowances for doubtful accounts for estimated losses resulting from the inability or unwillingness of our customers to make required payments. These allowances are based on both recent trends of certain customers estimated to be a greater credit risk as well as historic trends of the entire customer pool. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. To mitigate this credit risk we perform periodic credit evaluations of our customers.

Inventories

Inventories.  Our inventories are comprised of finished goods. Inventories are stated at the lower of cost or market, net of related reserves. The cost of inventory is computed using a weighted-average method. Our inventory is monitored to ensure appropriate valuation. Adjustments of inventories to the lower of cost or market, if necessary, are based upon contractual provisions such as turnover and assumptions about future demand and market conditions. If assumptions about future demand change and/or actual market conditions are less favorable than those projected by management, additional adjustments to inventory valuations may be required. We provide a reserve for obsolescence, which is calculated based on several factors, including an analysis of historical sales of products and the age of the inventory. Actual amounts could be different from those estimated.

Goodwill

Goodwill and Other Indefinite-Lived Intangible Assets.  Goodwill represents the excess purchase price paid over the fair value of the net assets of acquired companies. Goodwill is subject to impairment testing at least annually, unless it is determined after a qualitative assessment that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount. Goodwill is measured for impairment on an annual basis, or in interim periods if indicators of potential impairment exist. The Company is also required to compare the fair values of other indefinite-lived intangible assets to their carrying amounts at least annually, or when current events and circumstances require an interim assessment. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized.

For fiscal 2015 and 2014, we conducted a qualitative assessment (Step Zero Analysis) to determine whether it would be necessary to perform step one of the two-step goodwill impairment test. It was determined based on the Step Zero Analysis that it is more likely than not that the fair value exceeded the carrying amount as of February 1, 2015. Additional information regarding our goodwill and impairment analyses is provided in Note 7, Goodwill and Intangible Assets.

We had two indefinite-lived intangible assets relating to purchased trade names. During the fourth quarter of fiscal 2015, one of the two trade names was determined to have a finite life and subsequently written down to its fair value to be amortized over five years. The remaining indefinite-lived intangible asset is not amortized; rather, it is tested for impairment at least annually by comparing the carrying amount of the asset with the fair value. An impairment loss is recognized if the carrying amount is greater than fair value. The income approach using “the relief from royalty method” was used to value the trade names as of February 1, 2015. Additional information regarding our intangible assets and impairment analyses is provided in Note 7, Goodwill and Intangible Assets.

Intangible assets

Intangible assets.  Purchased intangible assets with finite lives are primarily amortized using the straight-line method over the estimated economic lives of the assets. Purchased intangible assets relating to customer relationships are amortized using an accelerated or straight-line method, which reflects the period the asset is expected to contribute to the future cash flows. Our finite-lived intangible assets are amortized over periods between two and eight years. Customer relationships are amortized over estimated useful lives between two and seven years; non-competition agreements are amortized over estimated useful lives between two and eight years; developed technology is amortized over estimated useful lives between three and eight years; supplier relationships are amortized over estimated useful lives between two and eight years.

Long-lived assets

Long-lived assets.  Property and equipment are recorded at cost. Major renewals and improvements are capitalized. Minor replacements, maintenance, repairs, and reengineering costs are expensed as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized.

Depreciation and amortization are provided in amounts sufficient to amortize the cost of the assets, including assets recorded under capital leases, which make up less than one percent of total assets, over their estimated useful lives using the straight-line method. The estimated useful lives for depreciation and amortization are as follows: buildings and building improvements - 7 to 30 years; furniture - 7 to 10 years; equipment - 3 to 10 years; software - 3 to 10 years; and leasehold improvements over the shorter of the economic life or the lease term. Internal use software costs are expensed or capitalized depending on the project stage. Amounts capitalized are amortized over the estimated useful lives of the software, ranging from 3 to 10 years, beginning with the project's completion. Capitalized project expenditures are not depreciated until the underlying project is completed.

We evaluate the recoverability of our long-lived assets whenever changes in circumstances or events may indicate that the carrying amounts may not be recoverable. An impairment loss is recognized in the event the carrying value of the assets exceeds the future undiscounted cash flows attributable to such assets.

Foreign currency translation

Foreign currency translation.  The financial statements of our foreign operations are translated into U.S. dollars for financial reporting purposes. The assets and liabilities of foreign operations whose functional currencies are not in U.S. dollars are translated at the period-end exchange rates, while revenue and expenses are translated at weighted-average exchange rates during the fiscal year. The cumulative translation effects are reflected as a component of “Accumulated other comprehensive loss” within shareholders' equity in the Consolidated Balance Sheets. Gains and losses on monetary transactions denominated in other than the functional currency of an operation are reflected within “Other (income) expenses, net” in the Consolidated Statements of Operations. Foreign currency gains and losses from changes in exchange rates have not been material to our consolidated operating results.

Revenue recognition

Revenue recognition.   We derive revenue from the sale of products (i.e., server, storage, and point of sale hardware, and software), support, maintenance and subscription services and professional services. Revenue is recorded in the period in which the goods are delivered or services are rendered and when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price to the customer is fixed or determinable, and collection is reasonably assured. We reduce revenue for estimated discounts, sales incentives, estimated customer returns, and other allowances. Discounts are offered based on the volume of products and services purchased by customers. Shipping and handling fees billed to customers are recognized as revenue and the related costs are recognized in cost of goods sold. Revenue is recorded net of any applicable taxes collected and remitted to governmental agencies.

We frequently enter into multiple-element arrangements with customers including hardware, software, professional consulting services and maintenance support services. For arrangements involving multiple deliverables, when deliverables include software and non-software products and services, we evaluate and separate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (a) the delivered item has value to the customer on a stand-alone basis; and (b) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in our control.

Consideration is allocated to each unit of accounting based on the unit's relative selling prices. In such circumstances, we use a hierarchy to determine the selling price to be used for allocating revenue to each deliverable: (i) vendor-specific objective evidence of selling price (VSOE), (ii) third-party evidence of selling price (TPE), and (iii) best estimate of selling price (BESP). VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable. VSOE is established for our software maintenance services and we use TPE or BESP to establish selling prices for our non-software related services. BESP is primarily used for elements that are not consistently priced within a narrow range or TPE is not available. We determine BESP for a deliverable by considering multiple factors including product class, geography, average discount, and management's historical pricing practices. Amounts allocated to the delivered hardware and software elements are recognized at the time of sale provided the other conditions for revenue recognition have been met. Amounts allocated to the undelivered maintenance and other services elements are recognized as the services are provided or on a straight-line basis over the service period. In certain instances, customer acceptance is required prior to the passage of title and risk of loss of the delivered products. In such cases, revenue is not recognized until the customer acceptance is obtained. Delivery and acceptance generally occur in the same reporting period.

In situations where our solutions contain software that is more than incidental, revenue related to the software and software-related elements is recognized in accordance with authoritative guidance on software revenue recognition. For the software and software-related elements of such transactions, revenue is allocated based on the relative fair value of each element, and fair value is determined by VSOE. If we cannot objectively determine the fair value of any undelivered element included in such multiple-element arrangements, we defer revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements. When the fair value of a delivered element has not been established, but fair value exists for the undelivered elements, we use the residual method to recognize revenue. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue.

Revenue recognition for complex contractual arrangements, especially those with multiple elements, requires a significant level of judgment and is based upon a review of specific contracts, past experience, the selling price of undelivered elements when sold separately, creditworthiness of customers, international laws and other factors. Changes in judgments about these factors could impact the timing and amount of revenue recognized between periods.

Revenue for hardware sales is recognized when the product is shipped to the customer and when obligations that affect the customer's final acceptance of the arrangement have been fulfilled. A majority of our hardware sales involves shipment directly from its suppliers to the end-user customers. In these transactions, we are responsible for negotiating price both with the supplier and the customer, payment to the supplier, establishing payment terms and product returns with the customer, and we bear the credit risk if the customer does not pay for the goods. As the principal contact with the customer, we recognize revenue and cost of goods sold when we are notified by the supplier that the product has been shipped. In certain limited instances, as shipping terms dictate, revenue is recognized upon receipt at the point of destination or upon installation at the customer site.

We offer proprietary software as well as remarketed software for sale to our customers. We offer our customers the right to license the software under a variety of models. Our customers can license our software under a perpetual model for an upfront fee or a subscription model. For subscription arrangements, we allow customers the right to use software, receive unspecified products as well as unspecified upgrades and enhancements and entitle the customer to receive hosting services for a specified term.  The subscription revenue is generally recognized ratably over the term of the arrangement, typically three to five years.  Revenue from subscription service arrangements is included in Support, maintenance and subscription services in the Consolidated Statements of Operations. A majority of our software sales do not require significant production, modification, or customization at the time of shipment (physically or electronically) to the customer. Substantially all of our software license arrangements do not include acceptance provisions. As such, revenue from both proprietary and remarketed software sales is typically recognized when the software has been shipped. For software delivered electronically, delivery is considered to have occurred when the customer either takes possession of the software via downloading or has been provided with the requisite codes that allow for immediate access to the software based on the U.S. Eastern time zone time stamp.

We also offer proprietary and third-party services to our customers. Proprietary services generally include: consulting, installation, integration and training. Many of our software arrangements include consulting services sold separately under consulting engagement contracts. When the arrangements qualify as service transactions, consulting revenue from these arrangements are accounted for separately from the software revenue. The significant factors considered in determining whether the revenue should be accounted for separately include the nature of the services (i.e., consideration of whether the services are essential to the functionality of the software), degree of risk, availability of services from other vendors, timing of payments, and the impact of milestones or other customer acceptance criteria on revenue realization. If there is significant uncertainty about the project completion or receipt of payment for consulting services, the revenue is deferred until the uncertainty is resolved.

For certain long-term proprietary service contracts with fixed or “not to exceed” fee arrangements, we estimate proportional performance using the hours incurred as a percentage of total estimated hours to complete the project consistent with the percentage-of-completion method of accounting. Accordingly, revenue for these contracts is recognized based on the proportion of the work performed on the contract. If there is no sufficient basis to measure progress toward completion, the revenue is recognized when final customer acceptance is received. Adjustments to contract price and estimated service hours are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. The aggregate of collections on uncompleted contracts in excess of related revenue is shown as a current liability

If an arrangement does not qualify for separate accounting of the software and consulting services, then the software revenue is recognized together with the consulting services using the percentage-of-completion or completed contract method of accounting. Contract accounting is applied to arrangements that include: milestones or customer-specific acceptance criteria that may affect the collection of revenue, significant modification or customization of the software, or provisions that tie the payment for the software to the performance of consulting services.

We also offer proprietary and third-party support to our customers. Support generally includes: support and maintenance of software and hardware products and subscription services. Revenue relating to proprietary support services is recognized evenly over the coverage period of the underlying agreement within support, maintenance and subscription revenue. In instances where we offer third-party support contracts to our customer, and the supplier is determined to be the primary obligor in the transaction, we report revenue at the time of the sale, only in the amount of the “commission” (equal to the selling price less the cost of sale) received rather than reporting revenue in the full amount of the selling price with separate reporting of the cost of sale.

Comprehensive (loss) income

Comprehensive (loss) income. Comprehensive (loss) income is the total of net (loss) income, as currently reported under GAAP, plus other comprehensive (loss) income. Other comprehensive (loss) income considers the effects of additional transactions and economic events that are not required to be recorded in determining net (loss) income, but rather are reported as a separate statement of comprehensive (loss) income.

Fair value measurements

Fair value measurements. We measure the fair value of financial assets and liabilities on a recurring or non-recurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. In determining fair value of financial assets and liabilities, we use various valuation techniques. Additional information regarding fair value measurements is provided in Note 16, Fair Value Measurements.

Investments in corporate-owned life insurance policies and marketable securities

Investments in corporate-owned life insurance policies and marketable securities. Agilysys invests in corporate-owned life insurance policies and has historically invested in marketable securities primarily to satisfy future obligations of our employee benefit plans, including a benefit equalization plan (“BEP”) and supplemental executive retirement plan (“SERP”). Certain of these corporate-owned life insurance policies were held in a Rabbi Trust and were classified within “Other non-current assets” in the Consolidated Balance Sheets. Our investment in corporate-owned life insurance policies were recorded at their cash surrender value, which approximates fair value, at the balance sheet date. All obligations related to our employee benefit plans, BEP and SERP, were fulfilled in April 2012 with funds held in the Rabbi Trust.

Certain of these corporate-owned life insurance policies are endorsement split-dollar life insurance arrangements. We entered into a non-cancelable separate agreement with each of the former executives covered by these arrangements whereby we must maintain the life insurance policy for the specified amount and split a portion of the policy benefits with the former executive's designated beneficiary.

Additional information regarding the investments in corporate-owned life insurance policies and marketable securities is provided in Note 12, Employee Benefit Plans.

Income Taxes

.

We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies.

We recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from uncertain tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet this threshold. Interest related to uncertain tax positions is recognized as part of the provision for income taxes and is accrued beginning in the period that such interest would be applicable under relevant tax law until such time that the related tax benefits are recognized. Our income taxes are described further in Note 11, Income Taxes.

Reclassification

Changes to Prior Period Presentation. In the first quarter of fiscal 2014, as a result of increased visibility into our services organization, certain costs previously classified in product development expenses were recorded in cost of goods sold to more properly reflect the nature of these expenses. The portion of these expenses that was erroneously recorded in previous periods was immaterial to the overall financial statements. Prior period presentation has been modified to conform to the current presentation.

Correction of Error

Correction of Error.  During the first quarter of fiscal 2013, we recorded out-of-period adjustments to increase revenues, restructuring, severance and other charges and asset write-offs and other fair value adjustments by $0.3 million, $0.7 million and $0.2 million, respectively. The net impact of the adjustments increased our operating loss by $0.6 million, or $(0.03) per share, and represents a correction of error. In fiscal 2012, we erroneously omitted certain revenue transactions, the costs associated with certain terminated individuals and certain third party development costs for our previously impaired developed technology. Management performed an evaluation under Staff Accounting Bulletin No. 108 and concluded the effect of the adjustment was immaterial to prior year’s financial statements as well as the full-year fiscal 2013 financial statements.

Capitalized Software Development Costs

Capitalized Software Development Costs.  The capitalization of software development cost for external use begins when a product’s technological feasibility has been established. Capitalization ends when the resulting product is available for general market release. Amortization of the capitalized software is classified within products cost of goods sold in the Consolidated Statements of Operations. For each capitalized software product, the annual amortization is equal to the greater of: (i) the amount computed using the ratio that the software product’s current fiscal year gross revenue bears to the total current fiscal year and anticipated future gross revenues for that product or (ii) the amount computed based on straight-line method over the remaining estimated economic life of the product, which is a range between three and eight years. The amount by which unamortized software costs exceeds the net realizable value, if any, is recognized as a charge to income in the period it is determined. We capitalized approximately $17.2 million, $13.7 million and $4.9 million during fiscal 2015, 2014 and 2013, respectively. Amortization of non-acquired developed capitalized software was $1.2 million, $0.2 million and $0.1 million during fiscal 2015, 2014 and 2013, respectively.

Adopted and Recently Issued Accounting Pronouncements

Adopted and Recently Issued Accounting Pronouncements.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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. In April 2015, the FASB voted for a one-year deferral of the effective date of the new revenue recognition standard. Transition to the new guidance may be done using either a full or modified retrospective method. 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. The adoption of the ASU did not have any impact on our financial statements.

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.

XML

Share-based Compensation - Stock Options Rollforward (Details) (Stock Options [Member], USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2015
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of Options, Outstanding at beginning of period	627,500
Number of Options, Granted	0
Number of Options, Exercised	(15,000)
Number of Options, Cancelled/expired	(30,000)
Number of Options, Outstanding and exercisable at end of period	582,500
Weighted Average Exercise Price, Outstanding at beginning of period	$ 15.26
Weighted Average Exercise Price, Granted	$ 0.00
Weighted-Average Exercise Price, Exercised	$ 13.76
Weighted-Average Exercise Price, Cancelled/Expired	$ 13.11
Weighted Average Exercise Price, Outstanding and exercisable at end of period	$ 15.41
Remaining Contractual Term, Outstanding and exercisable at end of period	1 year 1 month
Aggregate Intrinsic Value, Outstanding and exercisable at end of period	$ 0

XML

(Loss) Earnings per Share (Tables)

12 Months Ended

Mar. 31, 2015

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.

	Year ended March 31,
(In thousands, except per share data)	2015			2014			2013
Numerator:
Loss from continuing operations - basic and diluted	$	(11,497	)	$	(2,895	)	$	(6,214	)
Income from discontinued operations - basic and diluted	—			19,992			4,916
Net (loss) income - basic and diluted	$	(11,497	)	$	17,097		$	(1,298	)
Denominator:
Weighted average shares outstanding - basic and diluted	22,338			22,135			21,880
(Loss) earnings per share - basic and diluted:
Loss from continuing operations	$	(0.51	)	$	(0.13	)	$	(0.28	)
Income from discontinued operations	—			0.90			0.22
Net (loss) income per share	$	(0.51	)	$	0.77		$	(0.06	)
Anti-dilutive stock options, SSARs, restricted shares and performance shares	1,382			1,806			1,781

XML

Commitments and Contingencies

12 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Operating Leases

We lease certain facilities and equipment under non-cancelable operating leases which expire at various dates through fiscal 2022 and require us to pay a portion of the related operating expenses such as maintenance, property taxes, and insurance. Certain facilities and equipment leases contain renewal options for periods up to ten years. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. Certain facilities leases have free or escalating rent payment provisions. Rent expense under such leases is recognized on a straight-line basis over the lease term.

The following is a schedule by year of future minimum rental payments required under operating leases, excluding the related operating expenses, which have initial or remaining non-cancelable lease terms in excess of a year as of March 31, 2015:

(In thousands)	Amount
Fiscal year ending March 31,
2016	$	2,285
2017	2,054
2018	2,003
2019	1,540
2020	1,492
Thereafter	2,599
Total minimum lease payments	$	11,973

Rental expense for all non-cancelable operating leases amounted to $2.5 million, $2.5 million, and $2.4 million for fiscal 2015, 2014, and 2013, respectively.

Asset Retirement Obligations

An asset retirement obligation liability represents the estimated costs to bring certain office buildings that we lease back to their original condition after the termination of the lease. In instances where our lease agreements either contain make-whole provisions or subject us to remediation costs, we establish an asset retirement obligation liability with a corresponding leasehold improvement asset. The asset retirement obligation is included in “Accrued liabilities” and “Other non-current liabilities” in the Consolidated Balance Sheets. As of March 31, 2015, the current and long-term portion of the asset retirement obligation liability was $35,000 and $0.4 million, respectively. As of March 31, 2014, the current and long-term portion of the asset retirement obligation was $25,200 and $0.4 million, respectively.

Legal 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.

On July 9, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Northern District of California alleging violations of federal and state wage and hour laws, rules and regulations pertaining primarily to pay for missed meals and rest periods and failure to reimburse business expenses.  On May 19 2014, the court approved a settlement of the lawsuit pursuant to which we paid a gross settlement in the amount of approximately $1.5 million, which was included in "Accrued Liabilities" on our Consolidated Balance Sheets, and the lawsuit was dismissed.