Ohio | 000-5734 | 34-0907152 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer Identification No.) | ||
of incorporation) |
425 Walnut Street, Suite 1800 Cincinnati, Ohio | 45202 | |
(Address of principal executive offices) | (ZIP Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition; and | |
Item 7.01 | Regulation FD Disclosure |
Item 9.01 | Financial Statements and Exhibits |
Exhibit Number | Description | |
99.1 | Press release issued by Agilysys, Inc. dated August 3, 2016, announcing its results for the first quarter and period ended June 30, 2016. |
AGILYSYS, INC. | |||
By: | /s/ Janine K. Seebeck | ||
Janine K. Seebeck | |||
Senior Vice President, Chief Financial Officer, | |||
and Treasurer |
Exhibit Number | Description | |
99.1 | Press release issued by Agilysys, Inc. dated August 3, 2016, announcing its results for the first quarter and period ended June 30, 2016. |
• | Total net revenue was $31.0 million, compared to total net revenue of $27.5 million in the comparable prior-year period. |
• | Recurring revenues (which are comprised of support, maintenance and subscription services) were $14.9 million, or 48% of total net revenue, compared to $14.9 million, or 54% of total net revenue, for the same period in fiscal 2016. SaaS revenues for the first quarter increased 31% year over year and comprised 20% of total recurring revenues, compared to 16% of total recurring revenues in the first quarter of fiscal 2016. |
• | Gross margin was 52.3% in the fiscal 2017 first quarter, compared to 59.7% in the prior-year period. The fiscal 2017 first quarter gross margin reflects the previously disclosed impact of the amortization of software development costs as the Company’s rGuest® Stay property management solution achieved general availability. |
• | Net loss in the fiscal 2017 first quarter was $(2.3) million, or $(0.10) per diluted share, compared to a net loss of $(0.2) million, or $(0.01) per diluted share, in the prior-year period. |
• | Adjusted EBITDA (non-GAAP) was $0.4 million, compared to Adjusted EBITDA of $1.2 million in the same period last year (see reconciliation below). |
• | Full year revenue of approximately $132 - $136 million compared to fiscal 2016 revenue of $120 million. |
• | Gross margin for fiscal 2017 is expected to be in the low-50% range, which reflects the impact of higher cost of goods sold related to the recent general availability of rGuest Stay for limited and select service hotels and chains and a continued mix shift in revenue towards more subscription based sales. |
• | Adjusted EBITDA is expected to double in fiscal 2017, compared to fiscal 2016 Adjusted EBITDA of $4.3 million. |
(In thousands, except per share data) | Three Months Ended June 30, | |||||||
2016 | 2015 | |||||||
Net revenue: | ||||||||
Products | $ | 9,520 | $ | 8,811 | ||||
Support, maintenance and subscription services | 14,948 | 14,899 | ||||||
Professional services | 6,485 | 3,781 | ||||||
Total net revenue | 30,953 | 27,491 | ||||||
Cost of goods sold: | ||||||||
Products (inclusive of developed technology amortization) | 6,532 | 4,922 | ||||||
Support, maintenance and subscription services | 3,856 | 3,495 | ||||||
Professional services | 4,374 | 2,675 | ||||||
Total cost of goods sold | 14,762 | 11,092 | ||||||
Gross profit | 16,191 | 16,399 | ||||||
Gross profit margin | 52.3 | % | 59.7 | % | ||||
Operating expenses: | ||||||||
Product development | 6,855 | 6,268 | ||||||
Sales and marketing | 5,634 | 4,461 | ||||||
General and administrative | 4,873 | 5,177 | ||||||
Depreciation of fixed assets | 598 | 518 | ||||||
Amortization of intangibles | 336 | 298 | ||||||
Restructuring, severance and other charges | 89 | (46 | ) | |||||
Operating loss | (2,194 | ) | (277 | ) | ||||
Other (income) expense: | ||||||||
Interest income | (33 | ) | (44 | ) | ||||
Interest expense | 4 | 8 | ||||||
Other expense (income), net | 90 | (32 | ) | |||||
Loss before taxes | (2,255 | ) | (209 | ) | ||||
Income tax expense (benefit) | 42 | (24 | ) | |||||
Net loss | $ | (2,297 | ) | $ | (185 | ) | ||
Weighted average shares outstanding | 22,599 | 22,220 | ||||||
Loss per share - basic and diluted: | ||||||||
Loss per share | $ | (0.10 | ) | $ | (0.01 | ) |
(In thousands, except share data) | June 30, 2016 | March 31, 2016 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 55,312 | $ | 60,608 | |||
Accounts receivable, net of allowance for doubtful accounts of $507 and $617, respectively | 17,312 | 22,017 | |||||
Inventories | 2,280 | 2,692 | |||||
Prepaid expenses and other current assets | 8,930 | 10,184 | |||||
Total current assets | 83,834 | 95,501 | |||||
Property and equipment, net | 13,976 | 14,197 | |||||
Goodwill | 19,622 | 19,622 | |||||
Intangible assets, net | 8,565 | 8,576 | |||||
Software development costs, net | 46,253 | 44,215 | |||||
Other non-current assets | 2,876 | 3,046 | |||||
Total assets | $ | 175,126 | $ | 185,157 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 7,501 | $ | 7,761 | |||
Deferred revenue | 28,781 | 33,241 | |||||
Accrued liabilities | 9,690 | 12,980 | |||||
Capital lease obligations, current | 122 | 118 | |||||
Total current liabilities | 46,094 | 54,100 | |||||
Deferred income taxes, non-current | 3,139 | 3,075 | |||||
Capital lease obligations, non-current | 194 | 215 | |||||
Other non-current liabilities | 4,230 | 4,294 | |||||
Shareholders' equity: | |||||||
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 22,939,102 and 22,942,586 shares outstanding at June 30, 2016 and March 31, 2016, respectively | 9,482 | 9,482 | |||||
Treasury shares, 8,667,729 and 8,664,245at June 30, 2016 and March 31, 2016, respectively | (2,601 | ) | (2,600 | ) | |||
Capital in excess of stated value | (7,343 | ) | (7,645 | ) | |||
Retained earnings | 122,116 | 124,413 | |||||
Accumulated other comprehensive loss | (185 | ) | (177 | ) | |||
Total shareholders' equity | 121,469 | 123,473 | |||||
Total liabilities and shareholders' equity | $ | 175,126 | $ | 185,157 | |||
Three Months Ended | |||||||
(In thousands) | June 30, | ||||||
2016 | 2015 | ||||||
Operating activities | |||||||
Net loss | $ | (2,297 | ) | $ | (185 | ) | |
Adjustments to reconcile loss from operations to net cash used in operating activities | |||||||
Net restructuring, severance and other charges | (389 | ) | (308 | ) | |||
Net legal settlements | (100 | ) | — | ||||
Depreciation | 598 | 518 | |||||
Amortization | 336 | 297 | |||||
Amortization of developed technology | 1,266 | 256 | |||||
Deferred income taxes | 64 | 40 | |||||
Stock based compensation | 346 | 404 | |||||
Change in cash surrender value of company owned life insurance policies | (5 | ) | — | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 4,700 | 6,245 | |||||
Inventories | 413 | 121 | |||||
Prepaid expense | 816 | 160 | |||||
Accounts payable | (408 | ) | (6,543 | ) | |||
Deferred revenue | (3,812 | ) | (1,395 | ) | |||
Accrued liabilities | (2,391 | ) | (1,397 | ) | |||
Income taxes payable | (42 | ) | 7 | ||||
Other changes, net | (114 | ) | (85 | ) | |||
Net cash used in operating activities | (1,019 | ) | (1,865 | ) | |||
Investing activities | |||||||
Capital expenditures | (410 | ) | (1,212 | ) | |||
Capitalized software development costs | (3,278 | ) | (5,572 | ) | |||
Additional (investments in) proceeds from corporate-owned life insurance policies | (1 | ) | (21 | ) | |||
Net cash used in investing activities | (3,689 | ) | (6,805 | ) | |||
Financing activities | |||||||
Payments to settle contingent consideration arising from business acquisition | (197 | ) | — | ||||
Repurchase of common shares to satisfy employee tax withholding | (346 | ) | (412 | ) | |||
Principal payments under long-term obligations | (24 | ) | (10 | ) | |||
Net cash used in financing activities | (567 | ) | (422 | ) | |||
Effect of exchange rate changes on cash | (21 | ) | 59 | ||||
Net decrease in cash and cash equivalents | (5,296 | ) | (9,033 | ) | |||
Cash and cash equivalents at beginning of period | 60,608 | 75,067 | |||||
Cash and cash equivalents at end of period | $ | 55,312 | $ | 66,034 | |||
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES: | |||||||
Accrued capital expenditures | $ | 343 | $ | 78 | |||
Accrued capitalized software development costs | 985 | 2,738 |
Three Months Ended | |||||||
(In thousands) | June 30, | ||||||
2016 | 2015 | ||||||
Operating activities: | |||||||
Net cash used in operating activities | $ | (1,019 | ) | $ | (1,865 | ) | |
Non-recurring cash items: | |||||||
Payments for restructuring, severance and other charges | 389 | 262 | |||||
Payments for legal settlements | 100 | — | |||||
Adjusted cash used in operating activities (a) | $ | (530 | ) | $ | (1,603 | ) | |
(a) Non-GAAP financial measure |
(In thousands) | Three Months Ended | |||||||
June 30, | ||||||||
2016 | 2015 | |||||||
Net loss | $ | (2,297 | ) | $ | (185 | ) | ||
Income tax expense (benefit) | 42 | (24 | ) | |||||
Loss before taxes | (2,255 | ) | (209 | ) | ||||
Depreciation of fixed assets | 598 | 518 | ||||||
Amortization of intangibles | 336 | 298 | ||||||
Amortization of developed technology | 1,266 | 256 | ||||||
Interest income | (29 | ) | (36 | ) | ||||
EBITDA (b) | (84 | ) | 827 | |||||
Share-based compensation | 346 | 404 | ||||||
Restructuring, severance and other charges | 89 | (46 | ) | |||||
Other non-operating expense (income) | 90 | (32 | ) | |||||
Adjusted EBITDA (a) | $ | 441 | $ | 1,153 | ||||
(a) Adjusted EBITDA, a non-GAAP financial measure, is defined as income before income taxes, interest expense (net of interest income), depreciation and amortization (including amortization of developed technology), and excluding charges relating to i) legal settlements, ii) restructuring, severance, and other charges, iii) asset write-offs and other fair value adjustments, iv) share-based compensation, and v) other non-operating (income) expense | ||||||||
(b) EBITDA is defined as net income before income taxes, interest expense, depreciation and amortization | ||||||||
3
M9 060 :V ';]$ V%((H6P,#4U0G^$E #-TH0GG!T6Y&2)I$/K- #>!$"KS 7
MIP O=[8Y%7%0Q[<"!QD1:2M@S;>U_!"U=S&5+?$ C8!PM: #+D"N!G$-;+ !
M%D (%F$,:IB_!/$+-H(M+V$!?<"FRD $%B"@!_$-AE5VQQL1T3 %&^#'SL4+
M2? AU"?YV!8>D8"0V*$K!@*_U1 A) N>W1!Q+@!=)4$.@@!H'A (?PJ%XV#V.;!&TY
M$;3P?5?J$RZ0EA/!=#O]'2%@O.TQ'(<2 A5@.,4W(ELQTP=!:\8HC/9 "7OH
M'YJQ D6@C@ D"0B@!