Exhibit 99.2
Agilysys, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements
On July 1, 2013, Agilysys, Inc. ("Agilysys") completed the sale of certain assets of its Retail Solutions Group ("RSG") business to Kyrus Solutions, Inc. (“Buyer”), an affiliate of Clearlake Capital Group, L.P., for a purchase price of $34.52 million, after a pre-closing adjustment for estimated working capital and subject to possible further adjustment based on final working capital post-closing. The sale was completed in accordance with that certain asset purchase agreement between Agilysys and Buyer, dated May 31, 2013.
The following unaudited pro forma condensed consolidated financial statements are based on the historical consolidated financial statements of Agilysys after giving effect to the RSG sale, the receipt of net proceeds from the RSG sale, and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2013 gives effect to the RSG sale and adjustments as if it occurred on the date of the balance sheet.
The unaudited pro forma condensed consolidated statements of operations for the fiscal years ended March 31, 2013, 2012 and 2011 give effect to the RSG sale and adjustments as if they had occurred on April 1, 2010 and carried forward through the latest period presented.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical audited consolidated financial statements and notes thereto included in our 2013 Annual Report.
The unaudited pro forma condensed consolidated financial statements, including the notes thereto, are not necessarily indicative of what the actual financial results would have been had the RSG sale taken place on the dates indicated and do not purport to indicate the results of future operations.
The pro forma adjustments are described in the accompanying notes and are based upon information and assumptions available at the time of filing this Form 8-K.
The unaudited condensed consolidated pro forma financial statements are prepared in accordance with Article 11 of Regulation S-X.
Agilysys, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 2013
| Sale of | |||||||||||||||
| RSG | Pro Forma | ||||||||||||||
| (In thousands, except share data) | As Reported | Business | Adjustments | Pro Forma | |||||||||||
| ASSETS | |||||||||||||||
| Current assets: | |||||||||||||||
| Cash and cash equivalents | $ | 82,931 | $ | — | $ | 32,573 | (b) | $ | 115,504 | ||||||
| Accounts receivable, net | 45,626 | 27,721 | (a) | ��� | 17,905 | ||||||||||
| Inventories | 12,239 | 11,159 | (a) | — | 1,080 | ||||||||||
| Prepaid expenses | 4,081 | 913 | (a) | — | 3,168 | ||||||||||
| Other current assets | 884 | 214 | (a) | — | 670 | ||||||||||
| Total current assets | 145,761 | 40,007 | 32,573 | 138,327 | |||||||||||
| Property and equipment, net | 15,543 | 1,689 | (a) | — | 13,854 | ||||||||||
| Goodwill | 14,128 | — | — | 14,128 | |||||||||||
| Intangible assets, net | 17,288 | 409 | (a) | — | 16,879 | ||||||||||
| Other non-current assets | 4,244 | 64 | (a) | — | 4,180 | ||||||||||
| Total assets | $ | 196,964 | $ | 42,169 | $ | 32,573 | $ | 187,368 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
| Current liabilities: | |||||||||||||||
| Accounts payable | $ | 30,177 | $ | 19,750 | (a) | $ | — | $ | 10,427 | ||||||
| Deferred revenue | 25,676 | 5,830 | (a) | — | 19,846 | ||||||||||
| Accrued and other current liabilities | 17,481 | 6,950 | (a) | 2,406 | (c) | 12,937 | |||||||||
| Capital lease obligations – current | 306 | 248 | (a) | — | 58 | ||||||||||
| Total current liabilities | 73,640 | 32,778 | 2,406 | 43,268 | |||||||||||
| Deferred income taxes – non-current | 4,002 | — | — | 4,002 | |||||||||||
| Capital lease obligations – non-current | 381 | 353 | (a) | — | 28 | ||||||||||
| Other non-current liabilities | 5,085 | 446 | (a) | — | 4,639 | ||||||||||
| Shareholders’ equity | 113,856 | — | 21,575 | (c) | 135,431 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 196,964 | $ | 33,577 | $ | 23,981 | $ | 187,368 | |||||||
See accompanying notes to these unaudited pro forma condensed consolidated financial statements.
Agilysys, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the twelve months ended March 31, 2013
| Sale of | |||||||||||||||
| RSG | Pro Forma | ||||||||||||||
| (In thousands, except per share data) | As Reported | Business | Adjustments | Pro Forma | |||||||||||
| Net revenue: | |||||||||||||||
| Products | $ | 123,798 | $ | 90,281 | (d) | $ | — | $ | 33,517 | ||||||
| Support, maintenance and subscription services | 77,145 | 28,003 | (d) | 1,094 | (e) | 50,236 | |||||||||
| Professional services | 35,197 | 20,622 | (d) | 34 | (e) | 14,609 | |||||||||
| Total net revenue | 236,140 | 138,906 | (d) | 1,128 | 98,362 | ||||||||||
| Cost of goods sold: | |||||||||||||||
| Products | 96,618 | 77,971 | (d) | — | 18,647 | ||||||||||
| Support, maintenance and subscription services | 27,760 | 18,351 | (d) | 1,094 | (e) | 10,503 | |||||||||
| Professional services | 21,592 | 14,654 | (d) | 34 | (e) | 6,972 | |||||||||
| Total cost of goods sold | 145,970 | 110,976 | (d) | 1,128 | 36,122 | ||||||||||
| Gross profit | 90,170 | 27,930 | (d) | — | 62,240 | ||||||||||
| Operating expenses: | |||||||||||||||
| Product development | 32,680 | 5,668 | (d) | — | 27,012 | ||||||||||
| Sales and marketing | 21,664 | 6,917 | (d) | — | 14,747 | ||||||||||
| General and administrative | 27,601 | 2,869 | (d) | 2,974 | (f) | 21,758 | |||||||||
| Depreciation of fixed assets | 2,674 | 518 | (d) | — | 2,156 | ||||||||||
| Amortization of intangibles | 3,382 | 98 | (d) | — | 3,284 | ||||||||||
| Asset impairment and related charges | 120 | — | — | 120 | |||||||||||
| Legal settlements | 1,664 | — | — | 1,664 | |||||||||||
| Restructuring, severance and other charges | 1,496 | 1 | (d) | — | 1,495 | ||||||||||
| Operating (loss) income | (1,111 | ) | 11,859 | (d) | (2,974 | ) | (9,996 | ) | |||||||
| Other (income) expenses : | |||||||||||||||
| Interest income | (14 | ) | — | — | (14 | ) | |||||||||
| Interest expense | 346 | — | 80 | (g) | 266 | ||||||||||
| Other expenses, net | 139 | — | 2 | (g) | 137 | ||||||||||
| (Loss) income before income taxes | (1,582 | ) | 11,859 | (d) | (3,056 | ) | (10,385 | ) | |||||||
| Income tax (benefit) expense | (284 | ) | 2,410 | (d) | 712 | (h) | (3,406 | ) | |||||||
| Net (loss) income from continuing operations | $ | (1,298 | ) | $ | 9,449 | (d) | $ | (3,768 | ) | $ | (6,979 | ) | |||
| Basic and diluted weighted average shares outstanding | 21,880 | 21,880 | |||||||||||||
| Net loss per share – basic and diluted: | |||||||||||||||
| Loss from continuing operations | $ | (0.06 | ) | $ | (0.32 | ) | |||||||||
See accompanying notes to these unaudited pro forma condensed consolidated financial statements.
Agilysys, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended March 31, 2012
| Sale of | |||||||||||||
| RSG | Pro Forma | ||||||||||||
| (In thousands, except per share data) | As Reported | Business | Adjustments | Pro Forma | |||||||||
| Net revenue: | |||||||||||||
| Products | 105,601 | 79,993 | (d) | — | 25,608 | ||||||||
| Support, maintenance and subscription services | 72,711 | 25,938 | (d) | 839 | (e) | 47,612 | |||||||
| Professional services | 30,577 | 17,422 | (d) | — | (e) | 13,155 | |||||||
| Total net revenue | 208,889 | 123,353 | (d) | 839 | 86,375 | ||||||||
| Cost of goods sold: | |||||||||||||
| Products | 83,550 | 69,097 | (d) | — | 14,453 | ||||||||
| Support, maintenance and subscription services | 25,706 | 16,203 | (d) | 839 | (e) | 10,342 | |||||||
| Professional services | 19,797 | 12,732 | (d) | — | (e) | 7,065 | |||||||
| Total cost of goods sold | 129,053 | 98,032 | (d) | 839 | 31,860 | ||||||||
| Gross profit | 79,836 | 25,321 | (d) | — | 54,515 | ||||||||
| Operating expenses: | |||||||||||||
| Product development | 30,309 | 5,820 | (d) | — | 24,489 | ||||||||
| Sales and marketing | 24,006 | 8,351 | (d) | — | 15,655 | ||||||||
| General and administrative | 32,889 | 3,496 | (d) | 1,115 | (f) | 28,278 | |||||||
| Depreciation of fixed assets | 4,602 | 627 | (d) | — | 3,975 | ||||||||
| Amortization of intangibles | 3,686 | 101 | (d) | — | 3,585 | ||||||||
| Asset impairment and related charges | 9,681 | — | — | 9,681 | |||||||||
| Restructuring, severance and other charges | 15,853 | 606 | (d) | — | 15,247 | ||||||||
| Operating (loss) income | (41,190 | ) | 6,320 | (d) | (1,115 | ) | (46,395 | ) | |||||
| Other (income) expenses : | |||||||||||||
| Interest income | (103 | ) | — | — | (103 | ) | |||||||
| Interest expense | 978 | — | 34 | (g) | 944 | ||||||||
| Other expenses, net | 181 | — | 9 | (g) | 172 | ||||||||
| (Loss) income before income taxes | (42,246 | ) | 6,320 | (d) | (1,158 | ) | (47,408 | ) | |||||
| Income tax (benefit) expense | (8,007 | ) | — | 1,892 | (h) | (9,899 | ) | ||||||
| (Loss) income from continuing operations | (34,239 | ) | 6,320 | (d) | (3,050 | ) | (37,509 | ) | |||||
| Income from discontinued operations, net of taxes | 11,456 | — | — | 11,456 | |||||||||
| Net (loss) income | (22,783 | ) | 6,320 | (d) | (3,050 | ) | (26,053 | ) | |||||
| Basic and diluted weighted average shares outstanding | 22,432 | 22,432 | |||||||||||
| Net (loss) income per share – basic and diluted: | |||||||||||||
| Loss from continuing operations | $ | (1.53 | ) | $ | (1.67 | ) | |||||||
| Income from discontinued operations | 0.51 | 0.51 | |||||||||||
| Net loss per share | (1.02 | ) | (1.16 | ) | |||||||||
Agilysys, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the year ended March 31, 2011
| Sale of | |||||||||||||
| RSG | Pro Forma | ||||||||||||
| (In thousands, except per share data) | As Reported | Business | Adjustments | Pro Forma | |||||||||
| Net revenue: | |||||||||||||
| Products | 104,769 | 69,463 | (d) | — | 35,306 | ||||||||
| Support, maintenance and subscription services | 70,729 | 26,146 | (d) | 470 | (e) | 45,053 | |||||||
| Professional services | 27,183 | 13,539 | (d) | 97 | (e) | 13,741 | |||||||
| Total net revenue | 202,681 | 109,148 | (d) | 567 | 94,100 | ||||||||
| Cost of goods sold: | |||||||||||||
| Products | 80,090 | 59,500 | (d) | — | 20,590 | ||||||||
| Support, maintenance and subscription services | 25,507 | 16,911 | (d) | 470 | (e) | 9,066 | |||||||
| Professional services | 21,445 | 11,383 | (d) | 97 | (e) | 10,159 | |||||||
| Total cost of goods sold | 127,042 | 87,794 | (d) | 567 | 39,815 | ||||||||
| Gross profit | 75,639 | 21,354 | (d) | — | 54,285 | ||||||||
| Operating expenses: | |||||||||||||
| Product development | 27,531 | 4,997 | (d) | — | 22,534 | ||||||||
| Sales and marketing | 22,212 | 7,654 | (d) | — | 14,558 | ||||||||
| General and administrative | 37,121 | 4,709 | (d) | 2,537 | (f) | 29,875 | |||||||
| Depreciation of fixed assets | 3,914 | 361 | (d) | — | 3,553 | ||||||||
| Amortization of intangibles | 5,122 | 85 | (d) | — | 5,037 | ||||||||
| Asset impairment and related charges | 959 | — | — | 959 | |||||||||
| Restructuring, severance and other charges | 405 | — | — | 405 | |||||||||
| Operating (loss) income | (21,625 | ) | 3,548 | (d) | (2,537 | ) | (22,636 | ) | |||||
| Other (income) expenses : | |||||||||||||
| Interest income | (73 | ) | — | — | (73 | ) | |||||||
| Interest expense | 1,297 | — | 16 | (g) | 1,281 | ||||||||
| Other (income) expenses, net | (2,294 | ) | — | 33 | (g) | (2,327 | ) | ||||||
| (Loss) income before income taxes | (20,555 | ) | 3,548 | (d) | (2,586 | ) | (21,517 | ) | |||||
| Income tax expense | 2,420 | — | — | 2,420 | |||||||||
| (Loss) income from continuing operations | (22,975 | ) | 3,548 | (d) | (2,586 | ) | (23,937 | ) | |||||
| Loss from discontinued operations, net of taxes | (32,500 | ) | — | — | (32,500 | ) | |||||||
| Net (loss) income | (55,475 | ) | 3,548 | (d) | (2,586 | ) | (56,437 | ) | |||||
| Basic and diluted weighted average shares outstanding | 22,785 | 22,785 | |||||||||||
| Net loss per share – basic and diluted: | |||||||||||||
| Loss from continuing operations | $ | (1.01 | ) | $ | (1.05 | ) | |||||||
| Loss from discontinued operations | (1.43 | ) | (1.43 | ) | |||||||||
| Net loss per share | (2.44 | ) | (2.48 | ) | |||||||||
Agilysys, Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2013 reflect the following adjustments
| (a) | Represents the unaudited amounts of RSG assets and liabilities which will be sold to Buyer as if the RSG sale had occurred on March 31, 2013. |
| (b) | Reflects estimated proceeds to be received at the closing of the RSG sale. The sale price of $34.52 million was reduced by approximately $1.95 million of expenses for the transaction-related costs. The unaudited condensed consolidated pro forma statements of operations do not reflect the recognition of these expenses as they are non-recurring in nature; however, these expenses will be reflected in Agilysys' historical financial statements when the RSG sale is consummated. Additionally, there is potential for a working capital adjustment. Pursuant to the asset purchase agreement, any difference in net working capital balance at the time of closing will be adjusted accordingly. |
| (c) | Reflects the excess of the estimated proceeds identified under (b) over the following: |
| The net book value of RSG net assets sold of $8.6 million at March 31, 2013, less pro forma adjustment for tax liabilities. | |
| Agilysys is in a net operating loss carry forward position which is offset by a full valuation allowance. Tax expense will be offset with a valuation allowance and no payable will be recognized. | |
The unaudited condensed consolidated pro forma statements of operations for fiscal years ended March 31, 2013, 2012, and 2011 reflect the following adjustments:
| (d) | The elimination of operating results of RSG in the unaudited statements of operations for RSG for fiscal years ended March 31, 2013, 2012 and 2011. |
| (e) | Reflects gross up of intersegment revenue and cost of goods sold that are eliminated on a consolidated basis. |
| (f) | Reflects costs associated with certain financial and information technology services to be provided on a transitional basis for up to seven months commencing immediately following the closing for the benefit of the Buyer and in accordance with the terms and subject to the conditions of the Transition Services Agreement (“TSA”). As these costs will be reimbursed by the Buyer during the transition period and not remain with Agilysys once this TSA has completed, this adjustment removes the costs associated with these services from the historical financial statements. |
| (g) | Reflects interest and other expense associated with contracts which are transferring to the Buyer in accordance with the terms of the asset purchase agreement and will not remain with Agilysys. This adjustment removes the costs from the historical financial statements. |
| (h) | Reflects the pro forma allocation of income tax expense to RSG calculated at the statutory federal rate of 35% and adjusted for permanent tax differences for fiscal years ended March 31, 2013, 2012 and 2011. The intraperiod tax allocation rules were applied to each pro forma year in calculating the allocation of income tax expense. Fiscal year ended March 31, 2011 did not require any pro forma allocation of income tax expense upon application of the intraperiod tax allocation rules. |