Exhibit 99.1
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Agilysys Amends Unaudited Fiscal 2010 Third-Quarter
and Nine-Month Results
CLEVELAND—February 8, 2010—Agilysys, Inc.(Nasdaq: AGYS), a leading provider of innovative IT solutions, today announced that it has amended its unaudited financial results for the fiscal 2010 third quarter and nine months ended December 31, 2009, which were previously published in a press release on February 3, 2010.
Revenues, gross profit, and operating income were revised lower for both the fiscal 2010 third quarter and nine months ended Dec. 31, 2009 periods by $1.4 million due to remarketed services in the Technology Solutions Group business. Revenue was adjusted to $219.0 million from $220.4 million for the third quarter and $504.6 million from $506.0 million for the nine-month fiscal 2010 period. Operating income was adjusted to $8.5 million from $9.9 million for the quarter and break-even from $1.4 million for the nine-months.
Net income from continuing operations was adjusted by $1.3 million to $13.6 million from $14.9 million for the quarter and $4.0 million from $5.3 million for the nine-month period. Diluted earnings per share for the quarter were $0.59, and $0.18 for the nine-months. Complete financial statements are included at the end of this press release and in the Company’s form 10-Q filed this morning with the SEC.
Forward-Looking Language
This release contains certain management expectations, which may constitute forward-looking information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Reform Act of 1995. Forward-looking information speaks only as to the date of this presentation and may be identified by use of words such as “may,” “will,” “believes,” “anticipates,” “plans,” “expects,” “estimates,” “projects,” “targets,” “forecasts,” “continues,” “seeks,” or the negative of those terms or similar expressions. Many important factors could cause actual results to be materially different from those in forward-looking information including, without limitation, competitive factors, disruption of supplies, changes in market conditions, pending or future claims or litigation, or technology advances. No assurances can be provided as to the outcome of cost reductions, business strategies, future financial results, unanticipated downturns to our relationships with customers, and macroeconomic demand for IT products and services, unanticipated difficulties integrating acquisitions, new laws and government regulations, interest rate changes, and unanticipated deterioration in economic and financial conditions in the United States and around the world or the consequences if the shareholders either approve or fail to approve the proposed Control Share Acquisition by MAK Capital announced on November 20, 2009. We do not undertake to update or revise any forward-looking information even if events make it clear that any projected results, actions, or impact, express or implied, will not be realized.
Other potential risks and uncertainties that may cause actual results to be materially different from those in forward-looking information are described in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC), under Item 1A, “Risk Factors.” Copies are available from the SEC or the Agilysys website.
Use of Non-GAAP Financial Information
To supplement the unaudited condensed consolidated financial statements presented in accordance with U.S. GAAP in this release, certain non-GAAP financial measures as defined by the SEC rules are used. Management believes that such information can enhance investors’ understanding of the Company’s
AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM
ongoing operations and is a measure used in the Company’s debt agreement. The non-GAAP measures included in this release have been reconciled to the comparable GAAP measures within an accompanying table, shown on the last page of this release.
About Agilysys, Inc.
Agilysys is a leading provider of innovative IT solutions to corporate and public-sector customers, with special expertise in select markets, including retail and hospitality. The company uses technology — including hardware, software and services — to help customers resolve their most complicated IT needs. The company possesses expertise in enterprise architecture and high availability, infrastructure optimization, storage and resource management, identity management and business continuity; and provides industry-specific software, services and expertise to the retail and hospitality markets. Headquartered in Cleveland, Agilysys operates extensively throughout North America, with additional sales and support offices in the United Kingdom, Singapore and Hong Kong.
News releases and other information on Agilysys are available on the Internet at: www.agilysys.com.
—FINANCIAL RESULTS FOLLOW—
Investor Contact:
Curtis Stout
Vice President and Treasurer
Agilysys, Inc.
440-519-8635
curtis.stout@agilysys.com
Vice President and Treasurer
Agilysys, Inc.
440-519-8635
curtis.stout@agilysys.com
Media Contact:
Maureen Morreale
Senior Communications Manager
Agilysys, Inc.
440-519-8161
maureen.morreale@agilysys.com
Senior Communications Manager
Agilysys, Inc.
440-519-8161
maureen.morreale@agilysys.com
AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM
AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(In thousands, except share and per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Net sales: | ||||||||||||||||
Products | $ | 185,509 | $ | 169,260 | $ | 416,743 | $ | 430,692 | ||||||||
Services | 33,490 | 54,816 | 87,857 | 144,573 | ||||||||||||
Total net sales | 218,999 | 224,076 | 504,600 | 575,265 | ||||||||||||
Cost of goods sold: | ||||||||||||||||
Products | 156,067 | 146,952 | 340,986 | 359,119 | ||||||||||||
Services | 12,956 | 18,102 | 37,914 | 59,994 | ||||||||||||
Total cost of goods sold | 169,023 | 165,054 | 378,900 | 419,113 | ||||||||||||
Gross margin | 49,976 | 59,022 | 125,700 | 156,152 | ||||||||||||
Selling, general and administrative expenses | 40,542 | 47,556 | 124,686 | 155,391 | ||||||||||||
Asset impairment charges | 238 | — | 238 | 145,643 | ||||||||||||
Restructuring charges | 677 | 13,357 | 745 | 36,930 | ||||||||||||
Operating income (loss) | 8,519 | (1,891 | ) | 31 | (181,812 | ) | ||||||||||
Other (income) expense : | ||||||||||||||||
Other (income) expense, net | (4,921 | ) | 1,175 | (5,311 | ) | 695 | ||||||||||
Interest income | — | (59 | ) | (9 | ) | (521 | ) | |||||||||
Interest expense | 246 | 638 | 673 | 1,090 | ||||||||||||
Income (loss) before income taxes | 13,194 | (3,645 | ) | 4,678 | (183,076 | ) | ||||||||||
Income tax (benefit) expense | (410 | ) | (1,402 | ) | 593 | (15,481 | ) | |||||||||
Income (loss) from continuing operations | 13,604 | (2,243 | ) | 4,085 | (167,595 | ) | ||||||||||
Income (loss) from discontinued operations | 3 | (1,477 | ) | (38 | ) | (2,751 | ) | |||||||||
Net income (loss) | $ | 13,607 | $ | (3,720 | ) | $ | 4,047 | $ | (170,346 | ) | ||||||
Income (loss) per share – basic | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.60 | $ | (0.10 | ) | $ | 0.18 | $ | (7.42 | ) | ||||||
Loss from discontinued operations | 0.00 | (0.07 | ) | (0.00 | ) | (0.12 | ) | |||||||||
Net income (loss) | $ | 0.60 | $ | (0.17 | ) | $ | 0.18 | $ | (7.54 | ) | ||||||
Income (loss) per share – diluted | ||||||||||||||||
Income (loss) from continuing operations | $ | 0.59 | $ | (0.10 | ) | $ | 0.18 | $ | (7.42 | ) | ||||||
Loss from discontinued operations | 0.00 | (0.07 | ) | (0.00 | ) | (0.12 | ) | |||||||||
Net income (loss) | $ | 0.59 | $ | (0.17 | ) | $ | 0.18 | $ | (7.54 | ) | ||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 22,624,622 | 22,603,641 | 22,625,866 | 22,580,726 | ||||||||||||
Diluted | 23,170,992 | 22,603,641 | 23,010,272 | 22,580,726 | ||||||||||||
Cash dividends per share | $ | — | $ | 0.03 | $ | 0.06 | $ | 0.09 |
AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM
AGILYSYS, INC.
BUSINESS SEGMENT INFORMATION (Unaudited)
BUSINESS SEGMENT INFORMATION (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(In thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Hospitality (HSG) | ||||||||||||||||
Total revenue | $ | 23,329 | $ | 27,911 | $ | 63,715 | $ | 76,153 | ||||||||
Elimination of intersegment revenue | (833 | ) | — | (1,890 | ) | (82 | ) | |||||||||
Revenue from external customers | $ | 22,496 | $ | 27,911 | $ | 61,825 | $ | 76,071 | ||||||||
Gross margin | $ | 14,312 | $ | 15,074 | $ | 38,089 | $ | 43,920 | ||||||||
63.6 | % | 54.0 | % | 61.6 | % | 57.7 | % | |||||||||
Depreciation and amortization | $ | 1,081 | $ | 1,551 | $ | 3,308 | $ | 4,737 | ||||||||
Operating income (loss) | 4,108 | 3,166 | 6,203 | (105,598 | ) | |||||||||||
Adjusted EBITDA | $ | 5,189 | $ | 4,717 | $ | 9,511 | $ | (100,861 | ) | |||||||
Asset Impairment | $ | 90 | $ | — | $ | 90 | $ | 110,851 | ||||||||
Retail (RSG) | ||||||||||||||||
Total revenue | $ | 37,753 | $ | 34,793 | $ | 85,696 | $ | 102,497 | ||||||||
Elimination of intersegment revenue | (43 | ) | (3 | ) | (63 | ) | (319 | ) | ||||||||
Revenue from external customers | $ | 37,710 | $ | 34,790 | $ | 85,633 | $ | 102,178 | ||||||||
Gross margin | $ | 7,416 | $ | 8,937 | $ | 17,486 | $ | 23,431 | ||||||||
19.7 | % | 25.7 | % | 20.4 | % | 22.9 | % | |||||||||
Depreciation and amortization | $ | 49 | $ | 16 | $ | 143 | $ | 157 | ||||||||
Operating income (loss) | 2,925 | 4,229 | 5,688 | (16,085 | ) | |||||||||||
Adjusted EBITDA | $ | 2,974 | $ | 4,245 | $ | 5,831 | $ | (15,928 | ) | |||||||
Asset Impairment | $ | — | $ | — | $ | — | $ | 24,910 | ||||||||
Technology (TSG) | ||||||||||||||||
Total revenue | $ | 161,072 | $ | 161,451 | $ | 359,465 | $ | 400,199 | ||||||||
Elimination of intersegment revenue | (2,279 | ) | (76 | ) | (2,323 | ) | (3,183 | ) | ||||||||
Revenue from external customers | $ | 158,793 | $ | 161,375 | $ | 357,142 | $ | 397,016 | ||||||||
Gross margin | $ | 28,248 | $ | 33,765 | $ | 70,887 | $ | 85,210 | ||||||||
17.8 | % | 20.9 | % | 19.8 | % | 21.5 | % | |||||||||
Depreciation and amortization | $ | 811 | $ | 4,067 | $ | 5,579 | $ | 12,547 | ||||||||
Operating income (loss) | 8,295 | 11,817 | 12,081 | (14,496 | ) | |||||||||||
Adjusted EBITDA | $ | 9,106 | $ | 15,884 | $ | 17,660 | $ | (1,949 | ) | |||||||
Asset Impairment | $ | — | $ | — | $ | — | $ | 9,882 | ||||||||
Restructuring charge | $ | — | $ | — | $ | — | $ | 23,573 |
AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM
AGILYSYS, INC.
BUSINESS SEGMENT INFORMATION (Unaudited)
BUSINESS SEGMENT INFORMATION (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(In thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Corporate / Other | ||||||||||||||||
Gross margin | $ | — | $ | 1,246 | $ | (762 | ) | $ | 3,591 | |||||||
Depreciation and amortization (a) | $ | 1,201 | $ | 1,048 | $ | 3,610 | $ | 3,200 | ||||||||
Operating loss | (6,809 | ) | (21,103 | ) | (23,941 | ) | (45,633 | ) | ||||||||
Adjusted EBITDA | $ | (5,608 | ) | $ | (20,055 | ) | $ | (20,331 | ) | $ | (42,433 | ) | ||||
Asset Impairment | $ | 148 | $ | — | $ | 148 | $ | — | ||||||||
Restructuring charge | $ | 677 | $ | 13,357 | $ | 745 | $ | 13,357 | ||||||||
Consolidated | ||||||||||||||||
Total revenue | $ | 222,154 | $ | 224,155 | $ | 508,876 | $ | 578,849 | ||||||||
Elimination of intersegment revenue | (3,155 | ) | (79 | ) | (4,276 | ) | (3,584 | ) | ||||||||
Revenue from external customers | $ | 218,999 | $ | 224,076 | $ | 504,600 | $ | 575,265 | ||||||||
Gross margin | $ | 49,976 | $ | 59,022 | $ | 125,700 | $ | 156,152 | ||||||||
22.8 | % | 26.3 | % | 24.9 | % | 27.1 | % | |||||||||
Depreciation and amortization (a) | $ | 3,142 | $ | 6,682 | $ | 12,640 | $ | 20,641 | ||||||||
Operating income (loss) | 8,519 | (1,891 | ) | 31 | (181,812 | ) | ||||||||||
Adjusted EBITDA | $ | 11,661 | $ | 4,791 | $ | 12,671 | $ | (161,171 | ) | |||||||
Asset Impairment | $ | 238 | $ | — | $ | 238 | $ | 145,643 | ||||||||
Restructuring charge | $ | 677 | $ | 13,357 | $ | 745 | $ | 36,930 |
(a) | Does not include the amortization of deferred financing fees totaling $126 and $471 for the three months ended Dec. 31, 2009 and 2008, respectively, and $346 and $584 for the nine months ended Dec. 31, 2009 and 2008, respectively, which related to the Corporate and Other segment. |
AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM
AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
December 31, | March 31, | |||||||
(In thousands, except share data) | 2009 | 2009 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 24,435 | $ | 36,244 | ||||
Accounts receivable, net | 182,566 | 151,944 | ||||||
Inventories, net | 25,138 | 27,216 | ||||||
Deferred income taxes — current, net | 4,930 | 6,836 | ||||||
Prepaid expenses and other current assets | 7,782 | 4,564 | ||||||
Income taxes receivable | 6,171 | 3,871 | ||||||
Assets of discontinued operations – current | 282 | 1,075 | ||||||
Total current assets | 251,304 | 231,750 | ||||||
Goodwill | 50,612 | 50,382 | ||||||
Intangible assets, net | 32,717 | 36,659 | ||||||
Deferred income taxes — non-current, net | — | 511 | ||||||
Other non-current assets | 18,243 | 29,008 | ||||||
Assets of discontinued operations – non-current | — | 56 | ||||||
Property and equipment, net | 27,067 | 26,070 | ||||||
Total assets | $ | 379,943 | $ | 374,436 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 122,699 | $ | 28,042 | ||||
Floor plan financing | — | 74,159 | ||||||
Deferred revenue | 14,397 | 18,709 | ||||||
Accrued liabilities | 23,902 | 37,807 | ||||||
Long-term debt — current | 199 | 238 | ||||||
Liabilities of discontinued operations — current | 569 | 1,176 | ||||||
Total current liabilities | 161,766 | 160,131 | ||||||
Deferred income taxes — non-current, net | 260 | — | ||||||
Other non-current liabilities | 19,428 | 21,588 | ||||||
Shareholders’ equity: | ||||||||
Common shares, without par value, at $0.30 stated value; authorized 80,000,000 shares; 31,606,831 shares issued and 23,031,119 shares outstanding at December 31, 2009 | 9,370 | 9,366 | ||||||
Treasury stock (8,510,712 and 8,896,778 shares at December 31, 2009 and March 31, 2009, respectively) | (2,670 | ) | (2,670 | ) | ||||
Capital in excess of stated value | (9,298 | ) | (11,036 | ) | ||||
Retained earnings | 202,634 | 199,947 | ||||||
Accumulated other comprehensive loss | (1,547 | ) | (2,890 | ) | ||||
Total shareholders’ equity | 198,489 | 192,717 | ||||||
Total liabilities and shareholders’ equity | $ | 379,943 | $ | 374,436 | ||||
AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM
AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended | ||||||||
December 31, | ||||||||
(In thousands) | 2009 | 2008 | ||||||
Operating activities: | ||||||||
Net income (loss) | $ | 4,047 | $ | (170,346 | ) | |||
Add: Loss from discontinued operations | 38 | 2,751 | ||||||
Income (loss) from continuing operations | 4,085 | (167,595 | ) | |||||
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities (net of effects from business acquisitions): | ||||||||
Impairment of property and equipment | 238 | — | ||||||
Impairment of investment in The Reserve Fund’s Primary Fund | — | 1,087 | ||||||
Impairment of goodwill and intangible assets | — | 166,223 | ||||||
Gain on redemption of cost basis investment | — | (56 | ) | |||||
Gain on investment in The Reserve Fund’s Primary Fund | (2,505 | ) | — | |||||
Loss on the sale of securities | 91 | — | ||||||
Depreciation | 2,859 | 2,863 | ||||||
Amortization | 10,127 | 18,362 | ||||||
Deferred income taxes | 2,724 | (20,087 | ) | |||||
Stock based compensation | 1,709 | 825 | ||||||
Changes in working capital: | ||||||||
Accounts receivable | (30,622 | ) | (4,849 | ) | ||||
Inventories | 2,078 | (31 | ) | |||||
Accounts payable | 95,024 | (90,739 | ) | |||||
Accrued and other liabilities | (20,442 | ) | (29,404 | ) | ||||
Income taxes (receivable) payable | (5,322 | ) | 1,359 | |||||
Other changes, net | 12 | (823 | ) | |||||
Other non-cash adjustments | (1,128 | ) | 701 | |||||
Total adjustments | 54,843 | 45,431 | ||||||
Net cash provided by (used for) operating activities | 58,928 | (122,164 | ) | |||||
Investing activities: | ||||||||
Proceeds from (claim on) The Reserve Fund’s Primary Fund | 2,337 | (7,657 | ) | |||||
Proceeds from the redemption of cost basis investment | — | 9,513 | ||||||
Proceeds from borrowings against company-owned life insurance policies | 12,500 | — | ||||||
Change in cash surrender value of company owned life insurance policies | (159 | ) | (155 | ) | ||||
Acquisition of businesses, net of cash acquired | — | (2,381 | ) | |||||
Purchase of property and equipment | (9,672 | ) | (4,335 | ) | ||||
Net cash provided by (used for) investing activities | 5,006 | (5,015 | ) | |||||
Financing activities: | ||||||||
Floor plan financing agreement, net | (74,159 | ) | 131,323 | |||||
Proceeds from borrowings under credit facility | 5,000 | — | ||||||
Principal payments under credit facility | (5,000 | ) | — | |||||
Principal payment under long term obligations | (258 | ) | (71 | ) | ||||
Issuance of common shares | 33 | — | ||||||
Debt financing costs | (1,520 | ) | — | |||||
Dividends paid | (1,360 | ) | (2,038 | ) | ||||
Net cash (used for) provided by financing activities | (77,264 | ) | 129,214 | |||||
Effect of exchange rate changes on cash | 1,317 | (69 | ) | |||||
Cash flows (used for) provided by continuing operations | (12,013 | ) | 1,966 | |||||
Cash flows of discontinued operations: | ||||||||
Operating cash flows | 204 | 510 | ||||||
Investing cash flows | — | — | ||||||
Net (decrease) increase in cash | (11,809 | ) | 2,476 | |||||
Cash at beginning of period | 36,244 | 69,935 | ||||||
Cash at end of period | $ | 24,435 | $ | 72,411 | ||||
AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM
AGILYSYS, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (Unaudited)
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(In thousands) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Net income (loss) | $ | 13,607 | $ | (3,720 | ) | $ | 4,047 | $ | (170,346 | ) | ||||||
Plus: | ||||||||||||||||
Interest expense, net | 246 | 579 | 664 | 569 | ||||||||||||
Other income, net | (4,921 | ) | 1,175 | (5,311 | ) | 695 | ||||||||||
Income tax (benefit) expense | (410 | ) | (1,402 | ) | 593 | (15,481 | ) | |||||||||
Depreciation and amortization expense (a) | 3,142 | 6,682 | 12,640 | 20,641 | ||||||||||||
(Income) loss from discontinued operations, net of tax | (3 | ) | 1,477 | 38 | 2,751 | |||||||||||
Adjusted EBITDA | 11,661 | 4,791 | 12,671 | (161,171 | ) | |||||||||||
Asset impairment charges | 238 | — | 238 | 145,643 | ||||||||||||
Restructuring charges | 677 | 13,357 | 745 | 36,930 | ||||||||||||
Adjusted EBITDA excluding asset impairment and restructuring charges | $ | 12,576 | $ | 18,148 | $ | 13,654 | $ | 21,402 | ||||||||
(a) | Depreciation and amortization expense excludes amortization of deferred finance costs, totaling $126 and $471 for the three months ended Dec. 31, 2009 and 2008, respectively, and $346 and $584 for the nine months ended Dec. 31, 2009 and 2008, respectively, as such costs are already included in interest expense, net. |
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AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM