United States
Washington, D.C. 20549
FOR ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended March 31, 2004 | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
COMMISSION FILE NO. 0-5734
OHIO (State or other jurisdiction of incorporation or organization) | 34-0907152 (I.R.S. employer identification no.) | |
6065 Parkland Boulevard Mayfield Heights, Ohio (Address of principal executive offices) | 44124 (Zip code) |
Registrant’s telephone number, including area code: (440) 720-8500
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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 Annual Report or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
The aggregate market value of Common Shares held by non-affiliates as of September 30, 2003 (the last business day of the registrant’s most recently completed second fiscal quarter) was $232,969,542 computed on the basis of the last reported sale price per share ($8.77) of such shares on the NASDAQ National Market.
As of May 3, 2004, the Registrant had the following number of Common Shares outstanding: 32,177,722
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s definitive Proxy Statement to be used in connection with its Annual Meeting of Shareholders to be held on July 28, 2004 are incorporated by reference into Part III of this Form 10-K.
Except as otherwise stated, the information contained in this Annual Report on Form 10-K is as of March 31, 2004.
AGILYSYS, INC.
TABLE OF CONTENTS
Page | ||||||
PART I | ||||||
ITEM 1. | Business | 1 | ||||
ITEM 2. | Properties | 4 | ||||
ITEM 3. | Legal Proceedings | 5 | ||||
ITEM 4. | Submission of Matters to a Vote of Security Holders | 5 | ||||
PART II | ||||||
ITEM 5. | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 7 | ||||
ITEM 6. | Selected Consolidated Financial and Operating Data | 8 | ||||
ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 9 | ||||
ITEM 7A. | Quantitative and Qualitative Disclosures about Market Risk | 20 | ||||
ITEM 8. | Financial Statements and Supplementary Data | 20 | ||||
ITEM 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 20 | ||||
ITEM 9A. | Controls and Procedures | 20 | ||||
PART III | ||||||
ITEM 10. | Directors and Executive Officers of the Registrant | 20 | ||||
ITEM 11. | Executive Compensation | 21 | ||||
ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | 21 | ||||
ITEM 13. | Certain Relationships and Related Transactions | 21 | ||||
ITEM 14. | Principal Accountant Fees and Services | 21 | ||||
PART IV | ||||||
ITEM 15. | Exhibits, Financial Statement Schedules and Reports on Form 8-K | 21 | ||||
SIGNATURES | 23 |
Item 1. Business
Overview
History and significant events
Industry
Products and services distributed and sources of supply
Inventory
Customers
Uneven sales patterns and seasonality
Backlog
Competition
Growth through acquisitions
Employees
Distribution
Access to information
Item 2. Properties
Type of | Approximate | Leased or | ||||||||||
Location | Facility | Square Footage | Owned | |||||||||
Solon, Ohio | Distribution | 224,600 | Leased | |||||||||
Solon, Ohio | Office Facility | 102,500 | Owned | |||||||||
Twinsburg, Ohio | Distribution | 106,000 | Owned | |||||||||
As a result of the Company’s divestiture of its Industrial Electronics Division in 2003, the distribution facility in Twinsburg, Ohio was vacant and available for sale at March 31, 2004. This facility was sold in April 2004 for $2.9 million, which approximated book value.
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 4A. Executive Officers of the Registrant
Name | Age | Current Position | Other Positions | |||||
Arthur Rhein | 58 | Chairman of the Board, President and Chief Executive Officer of the Company since April 30, 2003. | President and Chief Executive Officer of the Company from April 2002 to April 2003. Prior to 2000 to March 31, 2002, President and Chief Operating Officer. | |||||
Robert J. Bailey | 47 | Executive Vice President since May 2002. | Prior to 2000 to May 2002, Senior Vice President, Marketing of the Company’s Computer Systems Division. | |||||
Steven M. Billick | 48 | Executive Vice President, Treasurer and Chief Financial Officer since May 2003. | Executive Vice President and Chief Financial Officer since May 2002. From April 2000 to May 2002, Senior Vice President and Chief Financial Officer. Prior to 2000 to April 2000, Business Consultant for Management Consulting Services. | |||||
Peter J. Coleman | 49 | Executive Vice President since May 2002. | Prior to 2000 to May 2002, Senior Vice President, Sales of the Company’s Computer Systems Division. | |||||
Martin F. Ellis | 39 | Executive Vice President, Corporate Development and Investor Relations since July 2003. | Prior to 2000 to June 2003, Senior Vice President, Principal, and Head of Corporate Finance for Stern Stewart & Co. | |||||
Edward J. Gaio | 50 | Vice President and Controller of the Company since April 2001. | From January 2000 to April 2001, Controller. From prior to 1999 to 2000, Director of Finance and Planning of the Company’s Industrial Electronics Division. | |||||
James L. Sage | 49 | Executive Vice President, Chief Information Officer since May 2002. | From May 2001 to May 2002, Senior Vice President and Chief Information Officer. From April 2000 to May 2001, Vice President and Chief Information Officer. Prior to 2000 to April 2000, Vice President, Information Systems. | |||||
Richard A. Sayers II | 53 | Executive Vice President, Chief Human Resources Officer since May 2002. | From April 2000 to May 2002, Senior Vice President, Corporate Services. Prior to 2000 to April 2000, Senior Vice President, Human Resources. | |||||
Kathryn K. Vanderwist | 44 | Vice President, General Counsel and Assistant Secretary since April 2001. | From April 2000 to April 2001, General Counsel and Assistant Secretary. From July 1999 to March 2000, Corporate Counsel. From 1998 to July 1999, Litigation Attorney for Nestle USA, Inc. | |||||
Lawrence N. Schultz | 56 | Secretary of the Company since 1999. | Prior to 2000 to present, Partner of the law firm of Calfee, Halter & Griswold LLP. (1) | |||||
(1) | The law firm of Calfee, Halter & Griswold LLP serves as counsel to the Company. |
Item 5. | Market for registrant’s common equity, related shareholder matters, and issuer purchases of equity securities |
Year Ended March 31, 2004 | ||||||||||||||||||||
First | Second | Third | Fourth | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||
Dividends declared per Common Share | $0.03 | $0.03 | $0.03 | $0.03 | $0.12 | |||||||||||||||
Price range per Common Share | $7.31-$10.41 | $8.25-$9.97 | $9.16-$11.50 | $11.18-$13.81 | $7.31-$13.81 | |||||||||||||||
Closing Price on last day of period | $8.45 | $8.77 | $11.15 | $11.79 | $11.79 | |||||||||||||||
Year Ended March 31, 2003 | ||||||||||||||||||||
First | Second | Third | Fourth | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||
Dividends declared per Common Share | $0.03 | $0.03 | $0.03 | $0.03 | $0.12 | |||||||||||||||
Price range per Common Share | $10.01-$15.50 | $7.20-$11.60 | $5.40-$10.13 | $7.15-$11.84 | $5.40-$15.50 | |||||||||||||||
Closing Price on last day of period | $10.39 | $7.24 | $9.18 | $8.44 | $8.44 | |||||||||||||||
As of May 3, 2004, there were 32,177,722 Common Shares (including 3,589,940 subscribed Common Shares) of Agilysys, Inc. outstanding, and there were 2,539 shareholders of record. The closing price of the Common Shares on May 3, 2004, was $12.00.
Item 6. | Selected consolidated financial and operating data |
For the Year Ended March 31 | ||||||||||||||||||||||
(Dollars in Thousands, Except Per Share Data) | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||
Operating Results | ||||||||||||||||||||||
Continuing Operations (a)(b) | ||||||||||||||||||||||
Net sales | $ | 1,403,216 | $ | 1,171,631 | $ | 1,294,322 | $ | 1,431,838 | $ | 1,219,489 | ||||||||||||
Income (loss) before income taxes (c)(d)(e) | 26,708 | (31,484 | ) | 4,944 | (15,724 | ) | 11,753 | |||||||||||||||
Provision (benefit) for income taxes | 9,684 | (11,739 | ) | 1,618 | (3,713 | ) | 6,854 | |||||||||||||||
Income (loss) from continuing operations (c)(d)(e) | $ | 11,524 | $ | (26,060 | ) | $ | (2,911 | ) | $ | (18,316 | ) | $ | (1,305 | ) | ||||||||
(Loss) Income from Discontinued Operations, net of taxes (a) | $ | (2,861 | ) | $ | 18,777 | $ | (4,136 | ) | $ | 52,892 | $ | 41,450 | ||||||||||
Cumulative Effect of Change in Accounting Principle, net of tax (f) | — | (34,795 | ) | — | — | — | ||||||||||||||||
Net Income (Loss) (a)(b)(c)(d)(e)(f) | $ | 8,663 | $ | (42,078 | ) | $ | (7,047 | ) | $ | 34,576 | $ | 40,145 | ||||||||||
Per Share Data | ||||||||||||||||||||||
Income (Loss) from Continuing Operations (a)(b)(c)(d)(e) | ||||||||||||||||||||||
Basic | $ | 0.42 | $ | (0.96 | ) | $ | (0.11 | ) | $ | (0.68 | ) | $ | (0.05 | ) | ||||||||
Diluted | $ | 0.41 | $ | (0.96 | ) | $ | (0.11 | ) | $ | (0.68 | ) | $ | (0.05 | ) | ||||||||
Cash Dividends Per Share | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.12 | ||||||||||||
Book Value Per Share (g) | $ | 11.14 | $ | 10.88 | $ | 12.56 | $ | 13.18 | $ | 12.20 | ||||||||||||
Price Range of Common Shares | ||||||||||||||||||||||
High | $ | 13.81 | $ | 15.50 | $ | 14.94 | $ | 16.13 | $ | 18.75 | ||||||||||||
Low | $ | 7.31 | $ | 5.40 | $ | 7.40 | $ | 9.13 | $ | 6.50 | ||||||||||||
Financial Position | ||||||||||||||||||||||
Total Assets | $ | 759,662 | $ | 773,883 | $ | 916,937 | $ | 1,183,610 | $ | 1,113,835 | ||||||||||||
Long-Term Debt | 59,503 | 130,995 | 179,000 | 390,999 | 320,205 | |||||||||||||||||
Mandatorily Redeemable Convertible Trust Preferred Securities | 125,425 | 143,675 | 143,675 | 143,750 | 143,750 | |||||||||||||||||
Shareholders’ Equity | $ | 308,990 | $ | 298,550 | $ | 340,697 | $ | 354,257 | $ | 324,065 | ||||||||||||
Weighted Average Shares Outstanding | ||||||||||||||||||||||
Basic | 27,744 | 27,292 | 27,040 | 26,793 | 26,409 | |||||||||||||||||
Diluted | 27,956 | 27,292 | 27,040 | 26,793 | 26,409 | |||||||||||||||||
Other Comparative Data | ||||||||||||||||||||||
Average total number of employees (a) | 1,365 | 1,126 | 1,253 | 1,314 | 1,325 | |||||||||||||||||
Sales per employee (a) | $ | 1,028 | $ | 1,041 | $ | 1,033 | $ | 1,090 | $ | 920 | ||||||||||||
Gross margin percent of sales (a) | 12.9% | 12.7% | 13.2% | 12.4% | 14.6% | |||||||||||||||||
Operating expense percent of sales (a)(b)(c) | 10.3% | 13.4% | 12.0% | 12.4% | 12.8% | |||||||||||||||||
Net income (loss) percent of sales (a)(b)(c)(d)(e)(f) | 0.6% | (3.6)% | (0.5)% | 2.4% | 3.3% | |||||||||||||||||
(a) | The sale of the Company’s Industrial Electronics Division (“IED”) and the related discontinuation of the operations of Aprisa, Inc. in February 2003 represent a disposal of a “component of an entity” as defined in Statement of Financial Accounting Standard (“SFAS”) No. 144, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of.” Accordingly, 2000 through 2002 have been restated to reflect the results of operations of IED and Aprisa, Inc. as discontinued operations, and to exclude employees that were related to these businesses. (See Note 4 to the Consolidated Financial Statements contained in Part IV hereof.) | |
(b) | In 2004, the Company included the results of operations of both Kyrus Corporation and Inter-American Data, Inc. from their respective dates of origination. | |
(c) | In fiscal 2004, the Company recorded a restructuring charge of $2.5 million ($1.6 million, after tax) for facility closures, change in Company name, and other costs associated with the fiscal 2003 reorganization. In March 2003, the Company recorded a restructuring charge of $20.7 million ($13.0 million, after tax) for the impairment of facilities and other assets and for severance costs incurred in connection with downsizing the Company’s corporate structure. In fiscal 2001, the Company recognized a non-cash write-down of $14.2 million ($10.8 million, after tax) for the abandonment of certain information technology system assets. | |
(d) | In March 2003, the Company recognized an impairment charge of $14.6 million ($9.2 million, after tax) on an available-for-sale investment. | |
(e) | In 2004 and 2003, the Company repurchased certain of its 9.5% Senior Notes, which resulted in a pre-tax charge of $8.5 million ($5.4 million, after tax) and $1.2 million ($0.7 million, after tax), respectively, associated with the premium paid and the write-off of related financing costs. | |
(f) | On April 1, 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which requires that amortization of goodwill be replaced with period tests for goodwill impairment. The adoption of SFAS No. 142 resulted in a charge of $34.8 million, net of tax, which was recorded as a cumulative effect of a change in accounting principle. (See Note 6 to the Consolidated Financial Statements contained in Part IV hereof.) | |
(g) | Book value per share is determined by dividing shareholders’ equity by shares outstanding less subscribed-for shares and restricted shares. |
Item 7. Management’s discussion and analysis of financial condition and results of operations
Executive level overview
Critical accounting policies
Hardware
Software
Services
Results of operations
Fiscal year 2004 compared with fiscal year 2003
Net sales and operating income
Fiscal | Fiscal | Increase (Decrease) | ||||||||||||||||
(Dollars in Thousands) | 2004 | 2003 | $ | % | ||||||||||||||
Net Sales | $ | 1,403,216 | $ | 1,171,631 | $ | 231,585 | 19.8% | |||||||||||
Cost of Goods Sold | 1,222,314 | 1,022,378 | 199,936 | 19.6% | ||||||||||||||
Gross Margin | 180,902 | 149,253 | 31,649 | 21.2% | ||||||||||||||
Gross Margin Percentage | 12.9 | % | 12.7 | % | ||||||||||||||
Operating Expenses | ||||||||||||||||||
Selling, General and Administrative Expenses | 141,868 | 135,899 | 5,969 | 4.4% | ||||||||||||||
Restructuring Charges | 2,516 | 20,697 | (18,181 | ) | (87.8)% | |||||||||||||
Operating Income (Loss) | $ | 36,518 | $ | (7,343 | ) | $ | 43,861 | |||||||||||
Operating Income (Loss) Percentage | 2.6 | % | (0.6 | %) | ||||||||||||||
Net sales
Gross margin
Selling, general and administrative expenses
Restructuring charges
Other income and expense
Favorable | ||||||||||||||
Fiscal | Fiscal | (Unfavorable) | ||||||||||||
(Dollars in Thousands) | 2004 | 2003 | $ | |||||||||||
Other (Income) Expense | ||||||||||||||
Other Income, net | $ | (6,687 | ) | $ | (966 | ) | $ | 5,721 | ||||||
Investment Impairment | — | 14,600 | 14,600 | |||||||||||
Interest Expense, net | 8,636 | 9,343 | 707 | |||||||||||
Loss on Retirement of Debt | 7,861 | 1,164 | (6,697 | ) | ||||||||||
Total Other (Income) Expense, net | $ | 9,810 | $ | 24,141 | $ | 14,331 | ||||||||
Income taxes
Fiscal year 2003 compared with fiscal year 2002
Net Sales and Operating Income
Fiscal | Fiscal | Increase (Decrease) | ||||||||||||||||
(Dollars in Thousands) | 2003 | 2002 | $ | % | ||||||||||||||
Net Sales | $ | 1,171,631 | $ | 1,294,322 | $ | (122,691 | ) | (9.5 | )% | |||||||||
Cost of Goods Sold | 1,022,378 | 1,123,839 | (101,461 | ) | (9.0 | )% | ||||||||||||
Gross Margin | 149,253 | 170,483 | (21,230 | ) | (12.5 | )% | ||||||||||||
Gross Margin Percentage | 12.7 | % | 13.2 | % | ||||||||||||||
Operating Expenses | ||||||||||||||||||
Selling, General and Administrative Expenses | 135,899 | 154,682 | (18,783 | ) | (12.1 | )% | ||||||||||||
Restructuring Charges | 20,697 | 473 | 20,224 | 4,275.7 | % | |||||||||||||
Operating Income (Loss) | $ | (7,343 | ) | $ | 15,328 | $ | (22,671 | ) | ||||||||||
Operating Income (Loss) Percentage | (0.6 | )% | 1.2 | % | ||||||||||||||
Net sales
Gross margin
Selling, general and administrative expenses
Restructuring charges
Other income and expense
Favorable | ||||||||||||||
Fiscal | Fiscal | (Unfavorable) | ||||||||||||
(Dollars in Thousands) | 2003 | 2002 | $ | |||||||||||
Other (Income) Expense | ||||||||||||||
Other Income, net | $ | (966 | ) | $ | (873 | ) | $ | 93 | ||||||
Investment Impairment | 14,600 | — | (14,600 | ) | ||||||||||
Interest Expense, net | 9,343 | 11,257 | 1,914 | |||||||||||
Loss on Retirement of Debt | 1,164 | — | (1,164 | ) | ||||||||||
Total Other (Income) Expense, net | $ | 24,141 | $ | 10,384 | $ | (13,757 | ) | |||||||
Income taxes
Discontinued operations
Year Ended March 31 | ||||||||||||||||||
(Dollars in Thousands) | 2004 | 2003 | ||||||||||||||||
(Loss) gain on sale of net assets | $ | (298 | ) | $ | 58,047 | |||||||||||||
Transaction costs | — | (4,527 | ) | |||||||||||||||
Net gain on sale | $ | (298 | ) | $ | 53,520 | |||||||||||||
Restructuring charges | ||||||||||||||||||
Severance costs | — | (5,913 | ) | |||||||||||||||
Facilities | (1,075 | ) | (5,028 | ) | ||||||||||||||
Asset impairment | (1,825 | ) | (17,435 | ) | ||||||||||||||
Other | — | (274 | ) | |||||||||||||||
Total restructuring charges | (2,900 | ) | (28,650 | ) | ||||||||||||||
Facilities maintenance costs | (2,383 | ) | — | |||||||||||||||
(Loss) income before taxes of IED and Aprisa | — | 3,197 | ||||||||||||||||
(Loss) income from discontinued operations, before tax of $2.7 million and $9.3 million in 2004 and 2003, respectively | $ | (5,581 | ) | $ | 28,067 | |||||||||||||
Cumulative effect of change in accounting principle — goodwill
Liquidity and capital resources
Increase | |||||||||||||
Fiscal | Fiscal | (Decrease) | |||||||||||
(Dollars in Thousands) | 2004 | 2003 | $ | ||||||||||
Net cash (used in) provided by continuing operations: | |||||||||||||
Operating activities | $ | (21,962 | ) | $ | 63,326 | $ | (85,288) | ||||||
Investing activities | (52,118 | ) | 219,634 | (271,752) | |||||||||
Financing activities | (100,041 | ) | (50,794 | ) | (49,247) | ||||||||
Cash flows (used in) provided by continuing operations | (174,121 | ) | 232,166 | (406,287) | |||||||||
Net cash provided by discontinued operations | 5,481 | 64,977 | (59,496) | ||||||||||
Net (decrease) increase in cash and cash equivalents | $ | (168,640 | ) | $ | 297,143 | $ | (465,783) | ||||||
Cash and cash flows
Source | ||||||||||||
Fiscal | Fiscal | (Use) | ||||||||||
2004 | 2003 | $ | ||||||||||
Current assets, excluding cash and discontinued assets | $ | 358,997 | $ | 225,974 | $ | (133,023 | ) | |||||
Current liabilities, excluding discontinued operations | 247,162 | 163,303 | 83,859 | |||||||||
Off-balance sheet arrangements
Contractual obligations
Payments due by Fiscal Year | |||||||||||||||||||||
More | |||||||||||||||||||||
Less than | 2-3 | 4-5 | than | ||||||||||||||||||
Contractual Obligations | Total | 1 Year | Years | Years | 5 Years | ||||||||||||||||
9.5% Senior Notes | $ | 59,388 | $ | — | $ | 59,388 | $ | — | $ | — | |||||||||||
Convertible Trust Preferred Securities | 125,425 | — | — | — | 125,425 | ||||||||||||||||
Capital Leases | 419 | 307 | 112 | — | — | ||||||||||||||||
Operating Leases | 47,995 | 8,144 | 11,534 | 8,096 | 20,221 | ||||||||||||||||
Total Contractual Obligations | $ | 233,227 | $ | 8,451 | $ | 71,034 | $ | 8,096 | $ | 145,646 | |||||||||||
Risk control and effects of foreign currency and inflation
Forward-looking information
Item 7A. Quantitative and qualitative disclosures about market risk
Item 8. Financial statements and supplementary data
Item 9. Changes in and disagreements with accountants on accounting and financial disclosure
Item 9A. Controls and procedures
Evaluation of disclosure controls and procedures
Changes in internal controls
part III
Item 10. Directors and executive officers of the registrant
Item 11. Executive compensation
Item 12. Security ownership of certain beneficial owners and management and related shareholder matters
Item 13. Certain relationships and related transactions
Item 14. Principal accountant fees and services
part IV
Item 15. Exhibits, financial statement schedules and reports on Form 8-K
Report of Independent Auditors | |
Report of Management | |
Consolidated Statements of Operations for the years ended March 31, 2004, 2003 and 2002 | |
Consolidated Balance Sheets as of March 31, 2004 and 2003 | |
Consolidated Statements of Shareholders’ Equity for the years ended March 31, 2004, 2003 and 2002 | |
Consolidated Statements of Cash Flows for the years ended March 31, 2004, 2003 and 2002 | |
Notes to Consolidated Financial Statements | |
Schedule II — Valuation and Qualifying Accounts for the years ended March 31, 2004, 2003 and 2002 |
Date | Item # | Subject | ||
January 16, 2004 | Item 9 | Press release announcing an update to the Company’s previously issued fiscal 2004 full-year guidance. (Furnished) | ||
February 2, 2004 | Items 12 and 7 | Press release announcing the Company’s fiscal 2004 third-quarter results. (Filed) | ||
February 2, 2004 | Items 5 and 7 | Press release announcing that the Company had signed a definitive agreement to acquire Inter-American Data, Inc. (Filed) | ||
February 19, 2004 | Items 5 and 7 | Press release announcing the Company’s acquisition of Inter-American Data, Inc. (Filed) |
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 Cleveland, State of Ohio, on June 11, 2004.
AGILYSYS, INC. |
By: | /s/ ARTHUR RHEIN |
Arthur Rhein | |
Chairman, 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 as of June 11, 2004.
Signature | Title | |||
/s/ ARTHUR RHEIN Arthur Rhein | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | |||
/s/ STEVEN M. BILLICK Steven M. Billick | Executive Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) | |||
/s/ JAMES L. BAYMAN James L. Bayman | Director | |||
/s/ CHARLES F. CHRIST Charles F. Christ | Director | |||
/s/ THOMAS A. COMMES Thomas A. Commes | Director | |||
/s/ HOWARD V. KNICELY Howard V. Knicely | Director | |||
/s/ KEITH M. KOLERUS Keith M. Kolerus | Director | |||
/s/ ROBERT A. LAUER Robert A. Lauer | Director | |||
/s/ ROBERT G. MCCREARY, III Robert G. McCreary, III | Director | |||
/s/ THOMAS C. SULLIVAN Thomas C. Sullivan | Director |
AGILYSYS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page | ||||
Report of Independent Registered Public Accounting Firm | 25 | |||
Report of Management | 26 | |||
Consolidated Statements of Operations for the years ended March 31, 2004, 2003 and 2002 | 27 | |||
Consolidated Balance Sheets as of March 31, 2004 and 2003 | 28 | |||
Consolidated Statements of Shareholders’ Equity for the years ended March 31, 2004, 2003 and 2002 | 29 | |||
Consolidated Statements of Cash Flows for the years ended March 31, 2004, 2003 and 2002 | 30 | |||
Notes to Consolidated Financial Statements | 31 | |||
Schedule II — Valuation and Qualifying Accounts for the years ended March 31, 2004, 2003 and 2002 | 54 |
Shareholders and the Board of Directors of
We have audited the accompanying Consolidated Balance Sheets of Agilysys, Inc. and Subsidiaries as of March 31, 2004 and 2003, and the related Consolidated Statements of Operations, Shareholders’ Equity and Cash Flows for each of the three years in the period ended March 31, 2004. Our audits also included the financial statement schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
/S/ ERNST AND YOUNG LLP
Cleveland, Ohio
The consolidated financial statements of Agilysys, Inc. have been prepared by the Company, which is responsible for their integrity and objectivity. These statements have been prepared in accordance with U.S. generally accepted accounting principles and include amounts that are based on informed judgments and estimates. The Company also prepared the other information in the annual report and is responsible for its accuracy and consistency with the consolidated financial statements.
/s/ ARTHUR RHEIN | |
Arthur Rhein | |
Chairman, President and Chief Executive Officer | |
/s/ STEVEN M. BILLICK | |
Steven M. Billick | |
Executive Vice President, Treasurer and | |
Chief Financial Officer |
Agilysys, Inc. and Subsidiaries
Year Ended March 31 | ||||||||||||||
(Dollars In Thousands, Except Share and Per Share Data) | 2004 | 2003 | 2002 | |||||||||||
Net Sales | $ | 1,403,216 | $ | 1,171,631 | $ | 1,294,322 | ||||||||
Cost of Goods Sold | 1,222,314 | 1,022,378 | 1,123,839 | |||||||||||
Gross margin | 180,902 | 149,253 | 170,483 | |||||||||||
Operating Expenses | ||||||||||||||
Selling, general and administrative expenses | 141,868 | 135,899 | 154,682 | |||||||||||
Restructuring charges | 2,516 | 20,697 | 473 | |||||||||||
Operating Income (Loss) | 36,518 | (7,343 | ) | 15,328 | ||||||||||
Other (Income) Expense | ||||||||||||||
Other income, net | (6,687 | ) | (966 | ) | (873 | ) | ||||||||
Investment impairment | — | 14,600 | — | |||||||||||
Interest expense, net | 8,636 | 9,343 | 11,257 | |||||||||||
Loss on retirement of debt | 7,861 | 1,164 | — | |||||||||||
Income (Loss) Before Income Taxes | 26,708 | (31,484 | ) | 4,944 | ||||||||||
Provision (benefit) for income taxes | 9,684 | (11,739 | ) | 1,618 | ||||||||||
17,024 | (19,745 | ) | 3,326 | |||||||||||
Distributions on Mandatorily Redeemable Convertible Trust Preferred Securities, net of tax | 5,500 | 6,315 | 6,237 | |||||||||||
Income (Loss) from Continuing Operations | $ | 11,524 | $ | (26,060 | ) | $ | (2,911 | ) | ||||||
(Loss) Income from Discontinued Operations, net of taxes (See Note 4) | (2,861 | ) | 18,777 | (4,136 | ) | |||||||||
Income (Loss) Before Cumulative Effect of Change in Accounting Principle | $ | 8,663 | $ | (7,283 | ) | $ | (7,047 | ) | ||||||
Cumulative Effect of Change in Accounting Principle, net of $1,900 Tax Benefit | — | (34,795 | ) | — | ||||||||||
Net Income (Loss) | $ | 8,663 | $ | (42,078 | ) | $ | (7,047 | ) | ||||||
Earnings per Share — Basic | ||||||||||||||
Income (Loss) from Continuing Operations | $ | 0.42 | $ | (0.96 | ) | $ | (0.11 | ) | ||||||
(Loss) Income from Discontinued Operations | (0.10 | ) | 0.69 | (0.15 | ) | |||||||||
Income (Loss) Before Cumulative Effect of Change in Accounting Principle | $ | 0.32 | $ | (0.27 | ) | $ | (0.26 | ) | ||||||
Cumulative Effect of Change in Accounting Principle | — | (1.27 | ) | — | ||||||||||
Net Income (Loss) | $ | 0.32 | $ | (1.54 | ) | $ | (0.26 | ) | ||||||
Weighted Average Shares Outstanding — Basic | 27,743,769 | 27,291,683 | 27,040,171 | |||||||||||
Earnings per Share — Diluted | ||||||||||||||
Income (Loss) from Continuing Operations | $ | 0.41 | $ | (0.96 | ) | $ | (0.11 | ) | ||||||
(Loss) Income from Discontinued Operations | (0.10 | ) | 0.69 | (0.15 | ) | |||||||||
Income (Loss) Before Cumulative Effect of Change in Accounting Principle | $ | 0.31 | $ | (0.27 | ) | $ | (0.26 | ) | ||||||
Cumulative Effect of Change in Accounting Principle | — | (1.27 | ) | — | ||||||||||
Net Income (Loss) | $ | 0.31 | $ | (1.54 | ) | $ | (0.26 | ) | ||||||
Weighted Average Shares Outstanding — Diluted | 27,955,865 | 27,291,683 | 27,040,171 |
See accompanying Notes to Consolidated Financial Statements.
Agilysys, Inc. and Subsidiaries
March 31 | |||||||||||
(Dollars In Thousands) | 2004 | 2003 | |||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | 149,903 | $ | 318,543 | |||||||
Accounts receivable, net of allowance of $3,829 in 2004 and $2,969 in 2003 | 295,272 | 170,708 | |||||||||
Inventories, net | 52,236 | 48,285 | |||||||||
Deferred income taxes | 9,255 | 6,244 | |||||||||
Prepaid expenses | 2,234 | 737 | |||||||||
Assets of discontinued operations | 5,451 | 43,367 | |||||||||
Total Current Assets | 514,351 | 587,884 | |||||||||
Investments and Other Assets | |||||||||||
Goodwill | 179,975 | 117,545 | |||||||||
Investments in affiliated companies | 18,819 | 19,592 | |||||||||
Other assets | 11,396 | 10,625 | |||||||||
Property and Equipment, at Cost | |||||||||||
Land | 480 | 480 | |||||||||
Buildings | 5,542 | 5,542 | |||||||||
Furniture and equipment | 56,486 | 54,825 | |||||||||
Software | 31,845 | 29,952 | |||||||||
Leasehold improvements | 14,551 | 14,507 | |||||||||
108,904 | 105,306 | ||||||||||
Less accumulated depreciation and amortization | 73,783 | 67,069 | |||||||||
Property and Equipment, net | 35,121 | 38,237 | |||||||||
Total Assets | $ | 759,662 | $ | 773,883 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current Liabilities | |||||||||||
Accounts payable | $ | 208,115 | $ | 139,185 | |||||||
Accrued liabilities | 39,047 | 24,118 | |||||||||
Liabilities of discontinued operations | 4,006 | 20,910 | |||||||||
Total Current Liabilities | 251,168 | 184,213 | |||||||||
Long-Term Debt | 59,503 | 130,995 | |||||||||
Deferred Income Taxes | 4,426 | 7,000 | |||||||||
Other Long-Term Liabilities | 10,150 | 9,450 | |||||||||
Mandatorily Redeemable Convertible Trust Preferred Securities | 125,425 | 143,675 | |||||||||
SHAREHOLDERS’ EQUITY | |||||||||||
Serial preferred shares, without par value; authorized 5,000,000; issued and outstanding — none | — | — | |||||||||
Common shares, without par value, at $0.30 stated value: authorized 80,000,000 shares; 32,115,614 and 32,056,950 shares outstanding in 2004 and 2003, respectively, including 3,589,940, subscribed-for shares in 2004 and 2003 and 53,273 shares in treasury in 2004 | 9,553 | 9,535 | |||||||||
Capital in excess of stated value | 126,070 | 113,655 | |||||||||
Retained earnings | 219,594 | 214,448 | |||||||||
Unearned employee benefits | (42,325 | ) | (30,299 | ) | |||||||
Unearned compensation on restricted stock | (2,499 | ) | (4,575 | ) | |||||||
Accumulated other comprehensive loss | (1,403 | ) | (4,214 | ) | |||||||
Total Shareholders’ Equity | 308,990 | 298,550 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 759,662 | $ | 773,883 | |||||||
See accompanying Notes to Consolidated Financial Statements.
Agilysys, Inc. and Subsidiaries
Stated | Capital in | Unearned | Accumulated | ||||||||||||||||||||||||||||||
value of | excess of | Unearned | compensation | other | |||||||||||||||||||||||||||||
Common | common | stated | Retained | employee | on restricted | comprehensive | |||||||||||||||||||||||||||
(Dollars and Shares in Thousands) | shares | shares | value | earnings | benefits | stock | income (loss) | Total | |||||||||||||||||||||||||
Balance at April 1, 2001 | 31,668 | $ | 9,419 | $ | 125,595 | $ | 270,246 | $ | (49,688 | ) | $ | (5,280 | ) | $ | 3,965 | $ | 354,257 | ||||||||||||||||
Net loss | — | — | — | (7,047 | ) | — | — | — | (7,047 | ) | |||||||||||||||||||||||
Cumulative effect of change in accounting for derivatives and hedging, net of $0.1 million tax benefit | — | — | — | — | — | — | (218 | ) | (218 | ) | |||||||||||||||||||||||
Current period cash flow hedging activity, net of $0.6 million tax benefit | — | — | — | — | — | — | (889 | ) | (889 | ) | |||||||||||||||||||||||
Reclassification of hedging activity into earnings, net of $0.7 million tax | — | — | — | — | — | — | 1,107 | 1,107 | |||||||||||||||||||||||||
Unrealized translation adjustment | — | — | — | — | — | — | (1,188 | ) | (1,188 | ) | |||||||||||||||||||||||
Unrealized loss on securities, net of $3.8 million tax benefit | — | — | — | — | — | — | (5,936 | ) | (5,936 | ) | |||||||||||||||||||||||
Total comprehensive loss | — | — | — | — | — | — | $ | (14,171 | ) | ||||||||||||||||||||||||
Shares transferred from trust | — | — | (149 | ) | — | 1,268 | — | — | 1,119 | ||||||||||||||||||||||||
Value change in subscribed-for shares | — | — | 7,695 | — | (7,695 | ) | — | — | — | ||||||||||||||||||||||||
Cash dividends ($0.12 per share) | — | — | — | (3,323 | ) | — | — | — | (3,323 | ) | |||||||||||||||||||||||
Shares issued upon exercise of stock options | 109 | 32 | 543 | — | — | — | — | 575 | |||||||||||||||||||||||||
Tax benefit related to exercise of stock options | — | — | 174 | — | — | — | — | 174 | |||||||||||||||||||||||||
Converted Trust preferred securities | 5 | 1 | 74 | — | — | — | — | 75 | |||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | 1,991 | — | 1,991 | |||||||||||||||||||||||||
Balance at March 31, 2002 | 31,782 | 9,452 | 133,932 | 259,876 | (56,115 | ) | (3,289 | ) | (3,159 | ) | 340,697 | ||||||||||||||||||||||
Net loss | — | — | — | (42,078 | ) | — | — | — | (42,078 | ) | |||||||||||||||||||||||
Unrealized translation adjustment | — | — | — | — | — | — | (100 | ) | (100 | ) | |||||||||||||||||||||||
Unrealized loss on securities, net of $6.1 million tax benefit | — | — | — | — | — | — | (10,968 | ) | (10,968 | ) | |||||||||||||||||||||||
Reclassification of unrealized losses into earnings, net of $5.4 million tax | — | — | — | — | — | — | 10,013 | 10,013 | |||||||||||||||||||||||||
Total comprehensive loss | — | — | — | — | — | — | $ | (43,133 | ) | ||||||||||||||||||||||||
Shares transferred from trust | (376 | ) | (113 | ) | (3,085 | ) | — | 3,198 | — | — | — | ||||||||||||||||||||||
Value change in subscribed-for shares | — | — | (22,618 | ) | — | 22,618 | — | — | — | ||||||||||||||||||||||||
Cash dividends ($0.12 per share) | — | — | — | (3,350 | ) | — | — | — | (3,350 | ) | |||||||||||||||||||||||
Shares issued upon exercise of stock options | 275 | 83 | 2,068 | — | — | — | — | 2,151 | |||||||||||||||||||||||||
Tax benefit related to exercise of stock options | — | — | 273 | — | — | — | — | 273 | |||||||||||||||||||||||||
Restricted stock awards | 376 | 113 | 3,085 | — | — | (3,198 | ) | — | — | ||||||||||||||||||||||||
Amortization of unearned Compensation | — | — | — | — | — | 1,912 | — | 1,912 | |||||||||||||||||||||||||
Balance at March 31, 2003 | 32,057 | 9,535 | 113,655 | 214,448 | (30,299 | ) | (4,575 | ) | (4,214 | ) | 298,550 | ||||||||||||||||||||||
Net income | — | — | — | 8,663 | — | — | — | 8,663 | |||||||||||||||||||||||||
Unrealized translation adjustment | — | — | — | — | — | — | 2,811 | 2,811 | |||||||||||||||||||||||||
Unrealized gain on securities, net of $1.0 million tax expense | 1,894 | 1,894 | |||||||||||||||||||||||||||||||
Reclassification of unrealized gains into earnings, net of $1.0 million tax | — | — | — | — | — | — | (1,894 | ) | (1,894 | ) | |||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | $ | 11,474 | |||||||||||||||||||||||||
Value change in subscribed-for shares | — | — | 12,026 | — | (12,026 | ) | — | — | — | ||||||||||||||||||||||||
Cash dividends ($0.12 per share) | — | — | — | (3,517 | ) | — | — | — | (3,517 | ) | |||||||||||||||||||||||
Shares issued upon exercise of stock options | 112 | 34 | 835 | — | — | — | — | 869 | |||||||||||||||||||||||||
Tax benefit related to exercise of stock options | — | — | 18 | — | — | — | — | 18 | |||||||||||||||||||||||||
Repurchase of Common Stock | (53 | ) | (16 | ) | (464 | ) | — | — | — | — | (480 | ) | |||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | 2,076 | — | 2,076 | |||||||||||||||||||||||||
Balance at March 31, 2004 | 32,116 | $ | 9,553 | $ | 126,070 | $ | 219,594 | $ | (42,325 | ) | $ | (2,499 | ) | $ | (1,403 | ) | $ | 308,990 | |||||||||||||||
See accompanying Notes to Consolidated Financial Statements.
Agilysys, Inc. and Subsidiaries
Year Ended March 31 | |||||||||||||||||
(Dollars in Thousands) | 2004 | 2003 | 2002 | ||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||
Net income (loss) | $ | 8,663 | $ | (42,078 | ) | $ | (7,047 | ) | |||||||||
Loss (income) from discontinued operation | 2,861 | (18,777 | ) | 4,136 | |||||||||||||
Cumulative effect of change in accounting principle | — | 34,795 | — | ||||||||||||||
Income (loss) from continuing operations | 11,524 | (26,060 | ) | (2,911 | ) | ||||||||||||
Adjustments to reconcile income (loss) from continuing operations to net cash (used by) provided by operating activities (net of effects from business acquisitions) | |||||||||||||||||
Investment impairment | — | 14,600 | 750 | ||||||||||||||
Gain on sale of property and equipment | (59 | ) | — | — | |||||||||||||
Gain on sale of marketable securities | (906 | ) | — | — | |||||||||||||
Gain on purchase of Convertible Preferred Securities | (734 | ) | — | — | |||||||||||||
Loss on buyback of Senior Notes | 8,595 | 1,788 | — | ||||||||||||||
Depreciation | 4,617 | 8,829 | 8,426 | ||||||||||||||
Amortization | 5,329 | 7,994 | 15,279 | ||||||||||||||
Deferred income taxes | 284 | (5,545 | ) | (1,115 | ) | ||||||||||||
Changes in working capital, excluding effect of discontinued operations | |||||||||||||||||
Accounts receivable | (93,895 | ) | 37,036 | 52,142 | |||||||||||||
Inventories | 2,762 | 25,860 | 40,156 | ||||||||||||||
Accounts payable | 44,526 | 1,941 | (8,096 | ) | |||||||||||||
Accrued liabilities | (4,163 | ) | (6,098 | ) | 2,619 | ||||||||||||
Other working capital | (515 | ) | 1,607 | (557 | ) | ||||||||||||
Other | 673 | 1,374 | 935 | ||||||||||||||
Total adjustments | (33,486 | ) | 89,386 | 110,539 | |||||||||||||
Net cash (used by) provided by operating activities | (21,962 | ) | 63,326 | 107,628 | |||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||
Additions to property and equipment | (1,555 | ) | (8,404 | ) | (5,837 | ) | |||||||||||
Proceeds from sale of Industrial Electronics Division | 12,670 | 226,649 | — | ||||||||||||||
Acquisition of businesses, less cash acquired | (66,653 | ) | |||||||||||||||
Investments in affiliated companies | — | — | (951 | ) | |||||||||||||
Proceeds from sale of marketable securities | 3,309 | — | — | ||||||||||||||
Proceeds from sale of property and equipment | 111 | 1,389 | — | ||||||||||||||
Net cash (used for) provided by investing activities | (52,118 | ) | 219,634 | (6,788 | ) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||
Revolving credit borrowings | — | 7,780 | 664,950 | ||||||||||||||
Revolving credit payments | — | (7,780 | ) | (905,890 | ) | ||||||||||||
Accounts receivable securitization financing borrowings | — | 17,600 | 248,290 | ||||||||||||||
Accounts receivable securitization financing payments | — | (46,600 | ) | (219,290 | ) | ||||||||||||
Buyback of 9.5% Senior Notes | (79,800 | ) | (19,942 | ) | — | ||||||||||||
Buyback of convertible preferred securities | (16,973 | ) | — | — | |||||||||||||
Principal payments under long-term obligations | (140 | ) | (22 | ) | (189 | ) | |||||||||||
Debt financing costs paid | — | (631 | ) | (666 | ) | ||||||||||||
Issuance of common shares under company stock option plan | 869 | 2,151 | 575 | ||||||||||||||
Repurchase of common stock | (480 | ) | — | — | |||||||||||||
Dividends paid | (3,517 | ) | (3,350 | ) | (3,323 | ) | |||||||||||
Net cash used for financing activities | (100,041 | ) | (50,794 | ) | (215,543 | ) | |||||||||||
Cash flows (used for) provided by continuing operations | (174,121 | ) | 232,166 | (114,703 | ) | ||||||||||||
Cash flows provided by discontinued operations | 5,481 | 64,977 | 94,722 | ||||||||||||||
Net (decrease) increase in cash and cash equivalents | (168,640 | ) | 297,143 | (19,981 | ) | ||||||||||||
Cash and cash equivalents at beginning of year | 318,543 | 21,400 | 41,381 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 149,903 | $ | 318,543 | $ | 21,400 | |||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||||
Cash payments for interest | $ | 19,659 | $ | 15,145 | $ | 22,975 | |||||||||||
Cash payments for income taxes | $ | 2,658 | $ | 3,614 | $ | 2,392 | |||||||||||
Distributions on Convertible Trust Preferred Securities | $ | 8,466 | $ | 12,123 | $ | 9,703 | |||||||||||
Change in value of available-for-sale securities, net of tax | $ | — | $ | (955 | ) | $ | (5,936 | ) |
See accompanying Notes to Consolidated Financial Statements.
Agilysys, Inc. and Subsidiaries
1
Operations — Agilysys, Inc. and its subsidiaries (the “Company” or “Agilysys”) distributes and resells a broad range of enterprise computer systems products, including servers, storage, software and services. These products are sold to resellers and commercial end-users. The Company has operations in North America and strategic investments in the United States and Europe.
Hardware
Software
Services
2004 | 2003 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
(Dollars in Thousands) | Amount | Value | Amount | Value | |||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 149,903 | $ | 149,903 | $ | 318,543 | $ | 318,543 | |||||||||
Accounts receivable | 295,272 | 295,272 | 170,708 | 170,708 | |||||||||||||
Marketable securities | — | — | 2,403 | 2,403 | |||||||||||||
Liabilities: | |||||||||||||||||
Accounts payable | 208,115 | 208,115 | 139,185 | 139,185 | |||||||||||||
9.5% Senior Notes | (59,388 | ) | (65,500 | ) | (130,963 | ) | (137,200 | ) | |||||||||
Mandatorily Redeemable Convertible Trust Preferred Securities | (125,425 | ) | (123,500 | ) | (143,675 | ) | (133,600 | ) | |||||||||
(In Thousands, Except Per Share Data) | 2004 | 2003 | 2002 | ||||||||||
Net income (loss), as reported | $ | 8,663 | $ | (42,078 | ) | $ | (7,047 | ) | |||||
Compensation expense as determined under SFAS 123, net of related tax effects | (3,564 | ) | (3,365 | ) | (4,030 | ) | |||||||
Pro forma net income (loss) | $ | 5,099 | $ | (45,443 | ) | $ | (11,077 | ) | |||||
Basic, as reported | $ | 0.32 | $ | (1.54 | ) | $ | (0.26 | ) | |||||
Diluted, as reported | 0.31 | (1.54 | ) | (0.26 | ) | ||||||||
Basic, pro forma | $ | .19 | $ | (1.67 | ) | $ | (0.41 | ) | |||||
Diluted, pro forma | .18 | (1.67 | ) | (0.41 | ) | ||||||||
2004 | 2003 | 2002 | ||||
Dividend yield | 1.0% | 1.0% | 1.0% | |||
Expected volatility | 48.4% | 48.4% | 48.6% | |||
Risk-free interest rate | 3.33% | 3.81% | 5.28% | |||
Expected life | 6 years | 6 years | 8 years | |||
Weighted average fair value of options granted | $3.84 | $6.94 | $7.04 | |||
2
On September 12, 2003, the shareholders of Pioneer-Standard Electronics, Inc. approved an amendment to the Company’s Amended Articles of Incorporation to change the Company’s name to Agilysys, Inc. The name change became effective on September 15, 2003. Prior to September 16, 2003, Agilysys, Inc. traded on the National Association of Securities Dealers and Automated Quotations (“NASDAQ”) Stock Market as Pioneer-Standard Electronics, Inc. under the symbol “PIOS.” On September 16, 2003, Agilysys, Inc. began trading on the NASDAQ Stock Market under the symbol “AGYS.”
3
In accordance with SFAS No. 141, “Business Combinations,” the Company allocates the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over those fair values is recorded as goodwill. In accordance with SFAS 142, “Goodwill and Other Intangible Assets,” goodwill is no longer amortized but is reviewed annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The following two acquisitions were made in 2004.
Inter-American Data
Kyrus Corporation
4
On February 28, 2003, the Company completed the sale of substantially all of the assets and liabilities of its Industrial Electronics Division (“IED”), which distributed semiconductors, interconnect, passive and electromechanical components, power supplies and embedded computer products in North America and Germany. In addition, as of the sale date, the Company announced its strategic transformation to focus solely on its enterprise computer systems business. Cash proceeds from the sale of IED were $240 million, with $13 million collected in 2004 and $227 million collected in 2003. The assets sold consisted primarily of accounts receivable and
(Dollars in Thousands) | |||||
Loss on sale of net assets | $ | 298 | |||
Costs associated with maintaining facilities of discontinued operations | 2,383 | ||||
Costs to exit facilities | 1,075 | ||||
Write-down of carrying amount of long-lived assets | 1,825 | ||||
Loss from discontinued operations, before income tax | $ | 5,581 | |||
(Dollars in Thousands) | 2004 | 2003 | |||||||
Cash | $ | — | $ | 12 | |||||
Accounts receivable | 518 | 30,515 | |||||||
Inventories | 174 | 769 | |||||||
Other | 1,286 | 6,384 | |||||||
Property and equipment, net | 3,473 | 5,687 | |||||||
Assets of discontinued operations | $ | 5,451 | $ | 43,367 | |||||
Accounts payable | $ | 67 | $ | 4,132 | |||||
Accrued liabilities | 3,939 | 21,995 | |||||||
Liabilities of discontinued operations | $ | 4,006 | $ | 26,127 | |||||
5
Discontinued Operations
Severance | Asset | |||||||||||||||||||
(Dollars in Thousands) | Costs | Facilities | Impairment | Inventory | Total | |||||||||||||||
Balance at April 1, 2002 | $ | 1,414 | $ | 1,909 | $ | — | $ | 7,600 | $ | 10,923 | ||||||||||
Disposal of inventory | — | — | — | (7,600 | ) | (7,600 | ) | |||||||||||||
Provision | 333 | — | — | — | 333 | |||||||||||||||
Payments | (1,418 | ) | (564 | ) | — | — | (1,982 | ) | ||||||||||||
Adjustments | (205 | ) | (201 | ) | — | — | (406 | ) | ||||||||||||
Balance of discontinued reserves prior to sale | $ | 124 | $ | 1,144 | $ | — | $ | — | $ | 1,268 | ||||||||||
2003 restructuring charges | 5,913 | 5,028 | 17,435 | 274 | 28,650 | |||||||||||||||
Severance costs not funded by the Company | 3,491 | — | — | — | 3,491 | |||||||||||||||
Adjustments | 48 | 155 | — | — | 203 | |||||||||||||||
Payments | (2,244 | ) | (542 | ) | — | — | (2,786 | ) | ||||||||||||
Disposal of assets | — | — | (17,435 | ) | — | (17,435 | ) | |||||||||||||
Balance at March 31, 2003 | $ | 7,332 | $ | 5,785 | $ | — | $ | 274 | $ | 13,391 | ||||||||||
Payments | (7,308 | ) | (3,232 | ) | — | (219 | ) | (10,759 | ) | |||||||||||
Additions | — | 545 | — | — | 545 | |||||||||||||||
Accretion of lease obligations | — | 162 | — | — | 162 | |||||||||||||||
Balance at March 31, 2004 | $ | 24 | $ | 3,260 | $ | — | $ | 55 | $ | 3,339 | ||||||||||
During 2004, the reserve was increased by $0.5 million for certain exit costs on leased properties meeting the qualifications for expense during the year. The leased properties were part of the discontinued operations; however, the Company did not cease complete use of the properties until the current year.
Continuing Operations
Severance & | ||||||||||||||||||||
Other Employee | Asset | |||||||||||||||||||
(Dollars in Thousands) | Costs | Facilities | Impairment | Inventory | Total | |||||||||||||||
Balance at April 1, 2002 | $ | 473 | $ | — | $ | — | $ | 1,000 | $ | 1,473 | ||||||||||
Disposal of inventory | — | — | — | (1,000 | ) | (1,000 | ) | |||||||||||||
Payments | (473 | ) | — | — | — | (473 | ) | |||||||||||||
Balance of reserves prior to 2003 restructuring | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
2003 restructuring charges | 5,909 | 6,135 | 8,653 | — | 20,697 | |||||||||||||||
Reclassifications | — | 103 | — | — | 103 | |||||||||||||||
Payments | (178 | ) | (141 | ) | — | — | (319 | ) | ||||||||||||
Disposal of assets | — | — | (8,653 | ) | — | (8,653 | ) | |||||||||||||
Balance at March 31, 2003 | $ | 5,731 | $ | 6,097 | $ | — | $ | — | $ | 11,828 | ||||||||||
2004 restructuring charges | — | 2,066 | — | — | 2,066 | |||||||||||||||
Payments | (5,706 | ) | (2,819 | ) | — | — | (8,525 | ) | ||||||||||||
Accretion of lease obligations | — | 450 | — | — | 450 | |||||||||||||||
Balance at March 31, 2004 | $ | 25 | $ | 5,794 | $ | — | $ | — | $ | 5,819 | ||||||||||
Of the remaining $5.8 million reserve at March 31, 2004, approximately $0.8 million is expected to be paid during 2005 for severance costs and facilities obligations. Severance costs and facilities obligations are expected to continue to 2005 and 2017, respectively.
6
On April 1, 2002, the Company adopted SFAS No. 142. This Statement, among other things, eliminates the amortization of goodwill and other intangibles that have indefinite lives but requires annual tests for determining impairment of those assets. Effective April 1, 2002, the Company discontinued amortization of its goodwill in accordance with SFAS No. 142.
Year Ended March 31 | |||||||||||||
(Dollars in Thousands, Except Per Share Data) | 2004 | 2003 | 2002 | ||||||||||
Income (Loss) from Continuing Operations, as reported | $ | 11,524 | $ | (26,060 | ) | $ | (2,911 | ) | |||||
Add: Goodwill amortization, net of tax | — | — | 3,117 | ||||||||||
Income (Loss) from Continuing Operations, pro forma | $ | 11,524 | $ | (26,060 | ) | $ | 206 | ||||||
Net Income (Loss), as reported | $ | 8,663 | $ | (42,078 | ) | $ | (7,047 | ) | |||||
Add: Goodwill amortization, net of tax | — | — | 3,117 | ||||||||||
Net Income (Loss), pro forma | $ | 8,663 | $ | (42,078 | ) | $ | (3,930 | ) | |||||
Earnings per Share — Basic | |||||||||||||
Income (Loss) from Continuing Operations, as reported | $ | 0.42 | $ | (0.96 | ) | $ | (0.11 | ) | |||||
Add: Goodwill amortization, net of tax | — | — | 0.12 | ||||||||||
Income (Loss) from Continuing Operations, pro forma | $ | 0.42 | $ | (0.96 | ) | $ | 0.01 | ||||||
Net Income (Loss), as reported | $ | 0.32 | $ | (1.54 | ) | $ | (0.26 | ) | |||||
Add: Goodwill amortization, net of tax | — | — | 0.12 | ||||||||||
Net Income (Loss), pro forma | $ | 0.32 | $ | (1.54 | ) | $ | (0.14 | ) | |||||
Earnings per Share — Diluted | |||||||||||||
Income (Loss) from Continuing Operations, as reported | $ | 0.41 | $ | (0.96 | ) | $ | (0.11 | ) | |||||
Add: Goodwill amortization, net of tax | — | — | 0.12 | ||||||||||
Income (loss) from Continuing Operations, pro forma | $ | 0.41 | $ | (0.96 | ) | $ | 0.01 | ||||||
Net Income (Loss), as reported | $ | 0.31 | $ | (1.54 | ) | $ | (0.26 | ) | |||||
Add: Goodwill amortization, net of tax | — | — | 0.12 | ||||||||||
Net Income (Loss), pro forma | $ | 0.31 | $ | (1.54 | ) | $ | (0.14 | ) | |||||
As discussed in Note 3, the Company made two business acquisitions in 2004. The excess of the cost of the acquisitions over the sum of the amounts assigned to the assets acquired and liabilities assumed has been recognized as goodwill.
(Dollars in Thousands) | 2004 | 2003 | |||||||
Beginning of year | $ | 117,545 | $ | 117,462 | |||||
Goodwill acquired during the year — Kyrus | 29,023 | — | |||||||
Goodwill acquired during the year — IAD | 34,380 | — | |||||||
Goodwill adjustment — Kyrus (see Note 3) | (2,466 | ) | — | ||||||
Goodwill adjustment — IAD (see Note 3) | 1,362 | — | |||||||
Impact of foreign currency translation | 131 | 83 | |||||||
End of year | $ | 179,975 | $ | 117,545 | |||||
The Company performed its annual goodwill impairment test using a measurement date of February 1, 2004 and 2003. The Company’s reporting unit is consistent with its reportable segment, as explained in Note 1. The Company concluded that the fair value of its reporting unit exceeded the carrying value, including goodwill. As such, step two of the goodwill impairment test, as prescribed by SFAS No. 142, was not necessary and no impairment loss was recognized.
7
At March 31, 2004 and 2003, “Investments in Affiliated Companies” consisted of the following:
(Dollars in Thousands) | 2004 | 2003 | ||||||
Magirus AG | $ | 13,771 | $ | 12,141 | ||||
Eurodis Electron PLC | — | 2,403 | ||||||
Other non-marketable equity securities | 5,048 | 5,048 | ||||||
$ | 18,819 | $ | 19,592 | |||||
Magirus AG
Eurodis Electron PLC
Other Non-Marketable Equity Securities
8
Capital Leases
(In Thousands) | Amount | ||||
Year Ended | |||||
2005 | $ | 307 | |||
2006 | 112 | ||||
2007 | — | ||||
2008 | — | ||||
2009 | — | ||||
Total minimum lease payments | 419 | ||||
Less: Amount representing interest | (20 | ) | |||
Present value of net minimum lease payments | $ | 399 | |||
Interest rates on capitalized leases vary from 5.04% to 12.0% and are imputed based on the lower of the Company’s incremental borrowing rate at the inception of each lease or the lessor’s implicit rate of return.
Operating Leases
Continuing | Discontinued | ||||||||
(In Thousands) | Operations | Operations | |||||||
Year ending March 31: | |||||||||
2005 | $ | 6,868 | $ | 1,276 | |||||
2006 | 5,848 | 899 | |||||||
2007 | 4,212 | 575 | |||||||
2008 | 3,865 | 405 | |||||||
2009 | 3,460 | 365 | |||||||
Thereafter | 19,724 | 497 | |||||||
Total future minimum rental payments | $ | 43,977 | $ | 4,017 | |||||
Rental expense for all non-cancelable operating leases amounted to $7.0 million, $11.8 million and $11.5 million for 2004, 2003 and 2002, respectively.
9
The following is a summary of long-term obligations at March 31, 2004 and 2003:
(In Thousands) | 2004 | 2003 | ||||||
Senior Notes, due August 2006 | $ | 59,388 | �� | $ | 130,963 | |||
Capital lease obligations | 399 | 37 | ||||||
59,787 | 131,000 | |||||||
Less current maturities of long-term obligations | 284 | 5 | ||||||
$ | 59,503 | $ | 130,995 | |||||
The Company’s debt outstanding as of March 31, 2004 primarily consists of approximately $59.4 million principal amount of 9.5% Senior Notes (the “Notes”) due August 2006. Interest is payable semi-annually. The indenture under which the Notes were issued limits the creation of liens, sale and leaseback transactions, consolidations, mergers and transfers of all or substantially all of the Company’s assets, and indebtedness of the Company’s restricted subsidiaries. The Notes are subject to mandatory repurchase by the Company at the option of the holders in the event of a change in control of the Company. The fair value of the Notes was $65.5 million and $137.2 million at March 31, 2004 and 2003, respectively.
10
The components of Income (Loss) Before Income Taxes from Continuing Operations and Provision for Income Taxes for Continuing Operations for the years ended March 31 are as follows:
(Dollars in Thousands) | 2004 | 2003 | 2002 | |||||||||||
Income (loss) before income taxes | ||||||||||||||
Domestic | $ | 27,257 | $ | (29,381 | ) | $ | 3,180 | |||||||
Foreign | (549 | ) | (2,103 | ) | 1,764 | |||||||||
Income (loss) before income taxes | $ | 26,708 | $ | (31,484 | ) | $ | 4,944 | |||||||
Provision (benefit) for income taxes | ||||||||||||||
Current | ||||||||||||||
Federal | $ | 7,886 | $ | (3,510 | ) | $ | 4,104 | |||||||
State and local | 60 | 131 | (65 | ) | ||||||||||
Foreign | 127 | 180 | — | |||||||||||
Total current | $ | 8,073 | $ | (3,199 | ) | $ | 4,039 | |||||||
Deferred | ||||||||||||||
Federal | $ | 856 | $ | (6,949 | ) | $ | (2,018 | ) | ||||||
State and local | 992 | (380 | ) | (403 | ) | |||||||||
Foreign | (237 | ) | (1,211 | ) | — | |||||||||
Total deferred | 1,611 | (8,540 | ) | (2,421 | ) | |||||||||
Provision (benefit) for income taxes | $ | 9,684 | $ | (11,739 | ) | $ | 1,618 | |||||||
A reconciliation of the federal statutory rate to the Company’s effective income tax rate for continuing operations for the years ended March 31 follows:
2004 | 2003 | 2002 | ||||||||||
Statutory rate | 35.0 | % | (35.0 | %) | 35.0 | % | ||||||
Benefit for state taxes | (1.3 | ) | (6.5 | ) | (29.5 | ) | ||||||
Change in valuation allowance | 3.9 | 3.6 | 12.5 | |||||||||
Settlement of Income Tax Audits | (2.4 | ) | — | — | ||||||||
Foreign rate differential | 0.3 | (0.9 | ) | 3.6 | ||||||||
Meals & entertainment | 1.6 | 0.7 | 6.0 | |||||||||
Non-deductible goodwill | — | — | 6.9 | |||||||||
Equity investment and other, net | (0.8 | ) | 0.8 | (1.8 | ) | |||||||
Effective rate | 36.3 | % | (37.3 | %) | 32.7 | % | ||||||
(Dollars in Thousands) | 2004 | 2003 | |||||||
Deferred tax assets: | |||||||||
Capitalized inventory costs | $ | 257 | $ | 296 | |||||
Accrued liabilities | 1,615 | 1,584 | |||||||
Allowance for doubtful accounts | 1,415 | 1,040 | |||||||
Inventory valuation reserve | 3,581 | 1,579 | |||||||
Restructuring reserve | 2,212 | 2,955 | |||||||
Federal domestic net operating losses | 8,841 | — | |||||||
Foreign net operating losses | 1,370 | 1,237 | |||||||
Property and equipment | 1,181 | 808 | |||||||
Investment impairment | — | 4,998 | |||||||
State net operating losses | 5,524 | 4,275 | |||||||
Other | 461 | 188 | |||||||
26,457 | 18,960 | ||||||||
Less valuation allowance | (5,524 | ) | (4,275 | ) | |||||
Total net deferred tax assets | $ | 20,933 | $ | 14,685 | |||||
Deferred tax liabilities: | |||||||||
Deferred Revenue | $ | 331 | $ | — | |||||
Software amortization | 3,044 | 4,100 | |||||||
Goodwill amortization | 12,460 | 9,598 | |||||||
Other | 270 | 107 | |||||||
Total deferred tax liabilities | 16,105 | 13,805 | |||||||
Net deferred tax assets (liabilities)(1) | $ | 4,828 | $ | 880 | |||||
Long term deferred tax assets of approximately $1.6 million are included in “Other Assets” in the accompanying Consolidated Balance Sheet at March 31, 2003.
At March 31, 2004, the Company had $25.3 million of federal net operating loss carryforwards that expire, if unused, through 2024 and $4.7 million of foreign net operating loss carryforwards that expire, if unused, in years 2007 through 2011. At March 31, 2004, the Company had $192.5 million of state net operating loss carryforwards that expire, if unused, in years 2008 through 2019. A valuation allowance of $5.5 million has been recognized to offset the state deferred tax assets related to those carryforwards.
11
The Company maintains various profit-sharing and 401(k) plans for all employees meeting certain service requirements. Generally, the plans allow eligible employees to contribute a portion of their compensation, with the Company matching a percentage thereof. The Company may also make contributions each year for the benefit of all eligible employees under the plans. Total profit sharing and Company matching contributions were $2.2 million, $2.3 million and $2.2 million for 2004, 2003 and 2002, respectively.
12
The Company is the subject of various threatened or pending legal actions and contingencies in the normal course of conducting its business. The Company provides 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 the Company’s 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 matters will not have a material adverse effect on the consolidated financial position or results of operations of the Company.
13
In March and April 1998, Pioneer-Standard Financial Trust (the “Pioneer-Standard Trust”) issued 2,875,000 shares relating to $143.7 million of 6.75% Mandatorily Redeemable Convertible Trust Preferred Securities (the “Trust preferred securities”). The Pioneer-Standard Trust, a statutory business trust, is a wholly owned consolidated subsidiary of the Company, with its sole asset being $148.2 million aggregate principal amount of 6.75% Junior Convertible Subordinated Debentures due March 31, 2028 (the “Trust Debentures”).
14
Capital Stock — Holders of Common Shares are entitled to one vote for each share held of record on all matters to be submitted to a vote of the shareholders. At March 31, 2004 and 2003, there were no shares of Preferred Stock outstanding.
(Dollars In Thousands, Except Share and Per Share Data) | 2004 | 2003 | ||||||
Common Shares at stated value (3,589,940 @ $0.30 in 2004 and 2003) | $ | 1,077 | $ | 1,077 | ||||
Capital in excess of stated value (3,589,940 shares in 2004 and 2003) | 41,248 | 29,222 | ||||||
Unearned employee benefits (3,589,940 shares @ $11.79 in 2004 and 3,589,940 shares @ $8.44 in 2003) | (42,325 | ) | (30,299 | ) | ||||
Net effect on Shareholders’ Equity | $ | — | $ | — | ||||
Shareholder Rights Plan — On April 27, 1999, the Company’s Board of Directors approved a new Shareholder Rights Plan, which became effective upon expiration of the existing plan on May 10, 1999. A dividend of one Right per Common Share was distributed to shareholders of record as of May 10, 1999. Each Right, upon the occurrence of certain events, entitles the holder to buy from the Company one-tenth of a Common Share at a price of $4.00, or $40.00 per whole share, subject to adjustment. The Rights may be exercised only if a person or group acquires 20% or more of the Company’s Common Shares, or announces a tender offer for at least 20% of the Company’s Common Shares. Each Right will entitle its holder (other than such acquiring person or members of such acquiring group) to purchase, at the Right’s then-current exercise price, a number of the Company’s Common Shares having a market value of twice the Right’s then-exercise price. The Rights trade with the Company’s Common Shares until the Rights become exercisable.
15
The following table sets forth the computation of basic and diluted earnings (loss) per share:
For the year ended March 31 | ||||||||||||||
(Dollars In Thousands, Except Per Share Data) | 2004 | 2003 | 2002 | |||||||||||
Weighted average number of shares | ||||||||||||||
Basic | 27,744 | 27,292 | 27,040 | |||||||||||
Common Shares issuable upon conversion of Trust preferred securities | — | — | — | |||||||||||
Common equivalent shares | 212 | — | — | |||||||||||
Diluted | 27,956 | 27,292 | 27,040 | |||||||||||
Income (Loss) from Continuing Operations | $ | 11,524 | $ | (26,060 | ) | $ | (2,911 | ) | ||||||
(Loss) Income from Discontinued Operations, net of taxes (See Note 4) | (2,861 | ) | 18,777 | (4,136 | ) | |||||||||
Income (Loss) Before Cumulative Effect of Change in Accounting Principle | 8,663 | (7,283 | ) | (7,047 | ) | |||||||||
Cumulative Effect of Change in Accounting Principle, net of $1.9 million tax benefit | — | (34,795 | ) | — | ||||||||||
Net income (loss) on which basic and diluted earnings (loss) per share is calculated | $ | 8,663 | $ | (42,078 | ) | $ | (7,047 | ) | ||||||
Earnings (Loss) per share — Basic | ||||||||||||||
Income (Loss) from Continuing Operations | $ | 0.42 | $ | (0.96 | ) | $ | (0.11 | ) | ||||||
(Loss) Income from Discontinued Operations | (0.10 | ) | 0.69 | (0.15 | ) | |||||||||
Income (Loss) Before Cumulative Effect of Change in Accounting Principle | 0.32 | (0.27 | ) | (0.26 | ) | |||||||||
Cumulative Effect of Change in Accounting Principle | — | (1.27 | ) | — | ||||||||||
Net Income (Loss) | $ | 0.32 | $ | (1.54 | ) | $ | (0.26 | ) | ||||||
Earnings (Loss) per share — Diluted | ||||||||||||||
Income (Loss) from Continuing Operations | $ | 0.41 | $ | (0.96 | ) | $ | (0.11 | ) | ||||||
(Loss) Income from Discontinued Operations | (0.10 | ) | 0.69 | (0.15 | ) | |||||||||
Income (Loss) Before Cumulative Effect of Change in Accounting Principle | 0.31 | (0.27 | ) | (0.26 | ) | |||||||||
Cumulative Effect of Change in Accounting Principle | — | (1.27 | ) | — | ||||||||||
Net Income (Loss) | $ | 0.31 | $ | (1.54 | ) | $ | (0.26 | ) | ||||||
Diluted earnings per share is computed by sequencing each issue or series of issues of potential common shares from the most dilutive to the least dilutive. Diluted earnings per share is determined as the lowest earnings per incremental share in the sequence of potential common shares.
16
Stock Options — The Company has stock plans, which provide for the granting of restricted stock and options to employees and directors to purchase its Common Shares. These plans provide for nonqualified and incentive stock options. Stock options are granted to employees at an exercise price equal to the fair market value of the
Company’s Common Shares at the date of grant. Options expire 10 years from the date of grant. Vesting periods are established by the Compensation Committee of the Board of Directors and vary.
2004 | 2003 | 2002 | ||||||||||||||||||||||
No. of | Wtd. Avg. | No. of | Wtd. Avg. | No. of | Wtd. Avg. | |||||||||||||||||||
Shares | Exercise | Shares | Exercise | Shares | Exercise | |||||||||||||||||||
Under Option | Price | Under Option | Price | Under Option | Price | |||||||||||||||||||
Balance at April 1 | 3,464,832 | $ | 12.64 | 3,861,534 | $ | 12.00 | 3,137,821 | $ | 11.54 | |||||||||||||||
Options granted | 295,900 | 7.93 | 874,000 | 14.29 | 947,500 | 12.91 | ||||||||||||||||||
Options exercised | (111,937 | ) | 7.76 | (275,274 | ) | 8.12 | (108,499 | ) | 6.25 | |||||||||||||||
Options cancelled/expired | (328,235 | ) | 12.96 | (616,014 | ) | 12.85 | (18,354 | ) | 11.63 | |||||||||||||||
Options forfeited | (14,365 | ) | 14.09 | (379,414 | ) | 13.17 | (96,934 | ) | 12.39 | |||||||||||||||
Balance at March 31 | 3,306,195 | $ | 12.35 | 3,464,832 | $ | 12.23 | 3,861,534 | $ | 12.00 | |||||||||||||||
Options Exercisable at March 31 | 2,336,059 | $ | 12.51 | 2,063,592 | $ | 12.07 | 2,020,508 | $ | 11.36 | |||||||||||||||
Available for Grant at March 31 | 65,125 | 310,825 | 1,076,211 | |||||||||||||||||||||
March 31, 2004 | ||||||||||||||||||||
Options Outstanding | ||||||||||||||||||||
Wtd. Avg. | Options Exercisable | |||||||||||||||||||
Wtd. Avg. | Remaining | Wtd. Avg. | ||||||||||||||||||
Number of | Exercise | Contractual Life | Number of | Exercise | ||||||||||||||||
Exercise Price Range | Options | Price | (in years) | Options | Price | |||||||||||||||
$ 5.50 - $ 8.00 | 216,900 | $ | 7.65 | 9 | 12,834 | $ | 7.01 | |||||||||||||
$ 8.00 - $10.50 | 516,300 | 8.75 | 6 | 397,600 | 8.79 | |||||||||||||||
$10.50 - $13.00 | 554,995 | 12.16 | 3.3 | 511,975 | 12.16 | |||||||||||||||
$13.00 - $15.50 | 2,018,000 | 13.83 | 6.9 | 1,413,650 | 13.73 | |||||||||||||||
3,306,195 | $ | 12.35 | 2,336,059 | $ | 12.51 | |||||||||||||||
Restricted Stock — During 2003, restricted stock awards for 375,800 shares of the Company’s common stock were granted at a market value of $8.51 per share to certain officers under the 2000 Stock Incentive Plan. These shares are subject to certain terms and conditions and cliff-vest over a three-year period. Restrictions lapse three years after the date of the award. Unvested shares are restricted as to disposition and subject to forfeiture under certain circumstances. The cost of these awards, determined as the market value of the shares at the date of grant, is being amortized over the restriction periods.
2004 | 2003 | 2002 | ||||||||||
Restricted shares at beginning of year | 783,511 | 648,978 | 686,388 | |||||||||
Awarded during the year | — | 375,800 | — | |||||||||
Vested | (203,856 | ) | (241,267 | ) | (37,410 | ) | ||||||
Cancelled | — | — | — | |||||||||
Restricted shares at end of year | 579,655 | 783,511 | 648,978 | |||||||||
17
Year Ended March 31, 2004 | |||||||||||||||||||||
First | Second | Third | Fourth | Year | |||||||||||||||||
(Dollars in Thousands, Except Per Share Data) | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||
Net sales | $ | 279,593 | $ | 292,683 | $ | 459,363 | $ | 371,577 | $ | 1,403,216 | |||||||||||
Gross margin | 34,927 | 34,714 | 59,426 | 51,835 | 180,902 | ||||||||||||||||
Income (loss) from continuing operations | (708 | ) | (3,046 | ) | 9,120 | 6,158 | 11,524 | ||||||||||||||
Income (loss) from discontinued operations | (749 | ) | (333 | ) | (458 | ) | (1,321 | ) | (2,861 | ) | |||||||||||
Net income (loss) | $ | (1,457 | ) | $ | (3,379 | ) | $ | 8,662 | $ | 4,837 | $ | 8,663 | |||||||||
Per share data: | |||||||||||||||||||||
Basic | |||||||||||||||||||||
Income (loss) from continuing operations | $ | (0.02 | ) | $ | (0.11 | ) | $ | 0.33 | $ | 0.22 | $ | 0.42 | |||||||||
Income (loss) from discontinued operations | (0.03 | ) | (0.01 | ) | (0.02 | ) | (0.05 | ) | (0.10 | ) | |||||||||||
Net income (loss) | $ | (0.05 | ) | $ | (0.12 | ) | $ | 0.31 | $ | 0.17 | $ | 0.32 | |||||||||
Diluted | |||||||||||||||||||||
Income (loss) from continuing operations | $ | (0.02 | ) | $ | (0.11 | ) | $ | 0.29 | $ | 0.21 | $ | 0.41 | |||||||||
Income (loss) from discontinued operations | (0.03 | ) | (0.01 | ) | (0.01 | ) | (0.04 | ) | (0.10 | ) | |||||||||||
Net income (loss) | $ | (0.05 | ) | $ | (0.12 | ) | $ | 0.28 | $ | 0.17 | $ | 0.31 | |||||||||
Because quarterly reporting of per share data stands on its own, the sum of per share amounts for the four quarters in the fiscal year will not necessarily equal annual per share amounts. SFAS No. 128 prohibits retroactive adjustment of quarterly per share amounts so that the sum of those amounts equals amounts for the full year.
Included in the results of the fourth quarter of 2004 is a $5.0 million ($3.2 million, after tax) favorable litigation settlement.
Year Ended March 31, 2003 | ||||||||||||||||||||
First | Second | Third | Fourth | Year | ||||||||||||||||
(Dollars in Thousands, Except Per Share Data) | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||
Net sales | $ | 273,191 | $ | 260,663 | $ | 376,438 | $ | 261,339 | $ | 1,171,631 | ||||||||||
Gross margin | 34,785 | 34,981 | 45,022 | 34,465 | 149,253 | |||||||||||||||
Income (loss) from continuing operations | (1,467 | ) | (2,054 | ) | 2,321 | (24,860 | ) | (26,060 | ) | |||||||||||
Income (loss) from discontinued operations | 2,297 | 2,696 | (426 | ) | 14,210 | 18,777 | ||||||||||||||
Income (loss) before cumulative effect of change in accounting principle | 830 | 642 | 1,895 | (10,650 | ) | (7,283 | ) | |||||||||||||
Cumulative effect of change in accounting principle | (34,795 | ) | — | — | — | (34,795 | ) | |||||||||||||
Net income (loss) | $ | (33,965 | ) | $ | 642 | $ | 1,895 | $ | (10,650 | ) | $ | (42,078 | ) | |||||||
Year Ended March 31, 2003 | ||||||||||||||||||||||
First | Second | Third | Fourth | Year | ||||||||||||||||||
(Dollars in Thousands, Except Per Share Data) | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||
Per share data: | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Income (loss) from continuing operations | $ | (0.05 | ) | $ | (0.08 | ) | $ | 0.09 | $ | (0.91 | ) | $ | (0.96 | ) | ||||||||
Income (loss) from discontinued operations | 0.08 | 0.10 | (0.02 | ) | 0.52 | 0.69 | ||||||||||||||||
Income (loss) before cumulative effect of change in accounting principle | 0.03 | 0.02 | 0.07 | (0.39 | ) | (0.27 | ) | |||||||||||||||
Cumulative effect of change in accounting principle | (1.28 | ) | — | — | — | (1.27 | ) | |||||||||||||||
Net income (loss) | $ | (1.25 | ) | $ | 0.02 | $ | 0.07 | $ | (0.39 | ) | $ | (1.54 | ) | |||||||||
Diluted | ||||||||||||||||||||||
Income (loss) from continuing operations | $ | (0.05 | ) | $ | (0.08 | ) | $ | 0.08 | $ | (0.91 | ) | $ | (0.96 | ) | ||||||||
Income (loss) from discontinued operations | 0.08 | 0.10 | (0.01 | ) | 0.52 | 0.69 | ||||||||||||||||
Income (loss) before cumulative effect of change in accounting principle | 0.03 | 0.02 | 0.07 | (0.39 | ) | (0.27 | ) | |||||||||||||||
Cumulative effect of change in accounting principle | (1.28 | ) | — | — | — | (1.27 | ) | |||||||||||||||
Net income (loss) | $ | (1.25 | ) | $ | 0.02 | $ | 0.07 | $ | (0.39 | ) | $ | (1.54 | ) | |||||||||
Because quarterly reporting of per share data stands on its own, the sum of per share amounts for the four quarters in the fiscal year will not necessarily equal annual per share amounts. SFAS No. 128 prohibits retroactive adjustment of quarterly per share amounts so that the sum of those amounts equals amounts for the full year.
Agilysys, Inc.
(Dollars in Thousands) | ||||||||||||||||
Balance at | Charged to | Deductions — | ||||||||||||||
Beginning of | Cost and | Net Write-Offs/ | Balance at | |||||||||||||
Description | Period | Expenses | Payments | End of Period | ||||||||||||
2004 | ||||||||||||||||
Allowance for doubtful accounts | $ | 2,969 | $ | 3,364 | $ | (2,504 | ) | $ | 3,829 | |||||||
Inventory valuation reserve | $ | 4,525 | $ | 5,930 | $ | (4,295 | ) | $ | 6,160 | |||||||
Restructuring reserves | $ | 11,828 | $ | 2,516 | $ | (8,525 | ) | $ | 5,819 | |||||||
2003 | ||||||||||||||||
Allowance for doubtful accounts | $ | 3,156 | $ | 3,709 | $ | (3,896 | ) | $ | 2,969 | |||||||
Inventory valuation reserve | $ | 5,097 | $ | 3,224 | $ | (3,796 | ) | $ | 4,525 | |||||||
Restructuring reserves | $ | 1,473 | $ | 20,697 | $ | (10,342 | ) | $ | 11,828 | |||||||
2002 | ||||||||||||||||
Allowance for doubtful accounts | $ | 1,904 | $ | 9,154 | $ | (7,902 | ) | $ | 3,156 | |||||||
Inventory valuation reserve | $ | 3,850 | $ | 3,536 | $ | (2,289 | ) | $ | 5,097 | |||||||
Restructuring reserves | $ | — | $ | 1,473 | $ | — | $ | 1,473 | ||||||||
Agilysys, Inc.
Exhibit No. | Description | |
3(a) | Amended Articles of Incorporation of Pioneer-Standard Electronics, Inc., which is incorporated by reference to Exhibit 2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, as amended on March 18, 1998 (File No. 0-5734). | |
3(b) | Amended Code of Regulations, as amended, of Pioneer-Standard Electronics, Inc., which is incorporated by reference to Exhibit 3(b) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1997 (File No. 0-5734). | |
4(a) | Rights Agreement, dated as of April 27, 1999, by and between the Company and National City Bank, which is incorporated herein by reference to Exhibit 1 to the Company’s Registration Statement on Form 8-A (File No. 0-5734). | |
4(b) | Indenture, dated as of August 1, 1996, by and between the Company and Star Bank, N.A., as Trustee, which is incorporated herein by reference to Exhibit 4(g) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1997 (File No. 0-5734). | |
4(c) | Share Subscription Agreement and Trust, effective July 2, 1996, by and between the Company and Wachovia Bank of North Carolina, N.A., which is incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-3 (Reg. No. 333-07665). | |
4(d) | Certificate of Trust of Pioneer-Standard Financial Trust, dated March 23, 1998, which is incorporated herein by reference to Exhibit 4(l) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1998 (File No. 0-5734). | |
4(e) | Amended and Restated Trust Agreement among Pioneer-Standard Electronics, Inc., as Depositor, Wilmington Trust Company, as Property Trustee and Delaware Trustee, and the Administrative Trustees named therein, dated as of March 23, 1998, which is incorporated herein by reference to Exhibit 4(m) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1998 (File No. 0-5734). | |
4(f) | Junior Subordinated Indenture, dated March 23, 1998, between the Company and Wilmington Trust, as trustee, which is incorporated herein by reference to Exhibit 4(n) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1998 (File No. 0-5734). | |
4(g) | First Supplemental Indenture, dated March 23, 1998, between the Company and Wilmington Trust, as trustee, which is incorporated herein by reference to Exhibit 4(o) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1998 (File No. 0-5734). | |
4(h) | Form of 6 3/4% Convertible Preferred Securities (Included in Exhibit 4(m)), which is incorporated herein by reference to Exhibit 4(p) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1998 (File No. 0-5734). |
Exhibit No. | Description | |
4(i) | Form of Series A 6 3/4% Junior Convertible Subordinated Debentures (Included in Exhibit 4(o)), which is incorporated herein by reference to Exhibit 4(q) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1998 (File No. 0-5734). | |
4(j) | Guarantee Agreement, dated March 23, 1998, between the Company and Wilmington Trust, as guarantee trustee, which is incorporated herein by reference to Exhibit 4(r) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1998 (File No. 0-5734). | |
*10(a) | Amended and Restated Employment Agreement, dated April 27, 1999, by and between the Company and John V. Goodger, which is incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 0-5734). | |
*10(b) | The Company’s 1982 Incentive Stock Option Plan, as amended, which is incorporated by reference to Exhibit 3(e) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1997 (File No. 0-5734). | |
*10(c) | The Company’s Amended and Restated 1991 Stock Option Plan, which is incorporated herein by reference to Exhibit 4.1 to the Company’s Form S-8 Registration Statement (Reg. No. 33-53329). | |
*10(d) | The Company’s Amended 1995 Stock Option Plan for Outside Directors, which is incorporated herein by reference to Exhibit 99.1 to the Company’s Form S-8 Registration Statement (Reg. No. 333-07143). | |
*10(e) | Pioneer-Standard Electronics, Inc. 1999 Stock Option Plan for Outside Directors, which is incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 0-5734). | |
*10(f) | Pioneer-Standard Electronics, Inc. 1999 Restricted Stock Plan, which is incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 0-5734). | |
*10(g) | Pioneer-Standard Electronics, Inc. Supplemental Executive Retirement Plan, which is incorporated herein by reference to Exhibit 10(o) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2000 (File No. 0-5734). | |
*10(h) | Pioneer-Standard Electronics, Inc. Benefit Equalization Plan, which is incorporated herein by reference to Exhibit 10(p) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2000 (File No. 0-5734). | |
*10(i) | Form of Option Agreement between Pioneer-Standard Electronics, Inc. and the optionees under the Pioneer-Standard Electronics, Inc. 1999 Stock Option Plan for Outside Directors, which is incorporated herein by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 0-5734). | |
*10(j) | Employment agreement, effective April 24, 2000, between Pioneer-Standard Electronics, Inc. and Steven M. Billick, which is incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 0-5734). |
Exhibit No. | Description | |
*10(k) | Five-Year Credit Agreement, dated as of September 15, 2000, among Pioneer-Standard Electronics, Inc., the Foreign Subsidiary Borrowers, the Lenders, and Bank One, Michigan as Agent, Banc One Capital Markets, Inc. as Lead Arranger and Sole Book Runner, KeyBank National Association as Syndication Agent, and ABN AMRO Bank, N.V., as Documentation Agent, which is incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 0-5734). | |
10(l) | 364-Day Credit Agreement, dated as of September 15, 2000, among Pioneer-Standard Electronics, Inc., the Lenders, Bank One, Michigan as Agent, Banc One Capital Markets, Inc. as Lead Arranger and Sole Book Runner, KeyBank National Association, as Syndication Agent, and ABN AMRO Bank, N.V., as Documentation Agent, which is incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 0-5734). | |
*10(m) | Pioneer-Standard Electronics, Inc. Senior Executive Disability Plan, effective April 1, 2000, which is incorporated herein by reference to Exhibit 10(v) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2001 (File No. 0-5734). | |
*10(n) | Non-Competition Agreement, dated as of February 25, 2000, between Pioneer-Standard Electronics, Inc. and Robert J. Bailey, which is incorporated herein by reference to Exhibit 10(w) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2001 (File No. 0-5734). | |
*10(o) | Change of Control Agreement, dated as of February 25, 2000, between Pioneer-Standard Electronics, Inc. and Robert J. Bailey, which is incorporated herein by reference to Exhibit 10(x) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2001 (File No. 0-5734). | |
*10(p) | Non-Competition Agreement, dated as of February 25, 2000, between Pioneer-Standard Electronics, Inc. and Peter J. Coleman, which is incorporated herein by reference to Exhibit 10(y) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2001 (File No. 0-5734). | |
*10(q) | Change of Control Agreement, dated as of February 25, 2000, between Pioneer-Standard Electronics, Inc. and Peter J. Coleman, which is incorporated herein by reference to Exhibit 10(z) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2001 (File No. 0-5734). | |
10(r) | Receivables Purchase Agreement, dated as of October 19, 2001, among Pioneer-Standard Electronics Funding Corporation, as the Seller, Pioneer-Standard Electronics, Inc., as the Servicer, Falcon Asset Securitization Corporation and Three Rivers Funding Corporation, as Conduits, Bank One, NA and Mellon Bank, N.A., as Managing Agents and the Committed purchasers from time to time parties hereto and Bank One, NA as Collateral Agent, which is incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2001 (File No. 0-5734). |
Exhibit No. | Description | |
10(s) | Receivables Sales Agreement, dated as of October 19, 2001, among Pioneer-Standard Electronics, Inc., Pioneer-Standard Minnesota, Inc., Pioneer-Standard Illinois, Inc. and Pioneer-Standard Electronics, Ltd., as Originators and Pioneer-Standard Funding Corporation, as Buyer, which is incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2001 (File No. 0-5734). | |
10(t) | Amendment No. 1 to Receivables Purchase Agreement, dated as of January 29, 2002, by and among Pioneer-Standard Funding Corporation, as Seller, Pioneer-Standard Electronics, Inc. as Servicer, Falcon Asset Securitization Corporation and Three Rivers Funding Corporation, as Conduits, certain Committed Purchasers, Bank One, NA and Mellon Bank, N.A. as Managing Agents, and Bank One, as Collateral Agent, which is incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2001 (File No. 0-5734). | |
10(u) | Third Amendment to Five-Year Credit Agreement, dated as of January 29, 2002, by and among Pioneer-Standard Electronics, Inc., the Foreign Subsidiary Borrowers, the various lenders and Bank One, Michigan as Agent, which is incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2001 (File No. 0-5734). | |
*10(v) | 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 the Company’s Annual Report on Form 10-K for the year ended March 31, 2002 (File No. 0-5734). | |
10(w) | Fourth Amendment to Five-Year Credit Agreement, dated as of May 6, 2002, by and among Pioneer-Standard Electronics, Inc., the Foreign Subsidiary Borrowers, the various lenders and Bank One, Michigan as LC Issuer and Agent, which is incorporated herein by reference to Exhibit 10(y) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2002 (File No. 0-5734). | |
*10(x) | Amended and Restated Employment agreement, effective April 1, 2002, between Pioneer-Standard Electronics, Inc. and James L. Bayman which is incorporated herein by reference to Exhibit 10(z) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2002 (File No. 0-5734). | |
*10(y) | Employment agreement, effective April 1, 2002, between Pioneer-Standard Electronics, Inc. and Arthur Rhein which is incorporated herein by reference to Exhibit 10(aa) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2002 (File No. 0-5734). | |
10(z) | Fifth Amendment to Five-Year Credit Agreement, Dated as of December 20, 2002, by and among Pioneer-Standard Electronics, Inc., the Foreign Subsidiary Borrowers, the various lenders and Bank One, N.A., as successor by merger to Bank One, Michigan as LC Issuer and as Agent, which is incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2002 (File No. 0-5734). |
Exhibit No. | Description | |
10(aa) | Purchase Agreement dated as of January 13, 2003 by and between Arrow Electronics, Inc., Arrow Europe GmbH, Arrow Electronics Canada Ltd., and Pioneer-Standard Electronics, Inc., Pioneer-Standard Illinois, Inc., Pioneer-Standard Minnesota, Inc., Pioneer-Standard Electronics, Ltd., Pioneer-Standard Canada Inc, which is incorporated herein by reference to Exhibit 2.1 to the Company’s Form 8-K, filed March 17, 2003 (File No. 0-5734). | |
10(bb) | Three Year Credit Agreement among Pioneer-Standard Electronics, Inc., as Borrower, various financial institutions, as Lenders, Key Corporate Capital, Inc., as Lead Arranger, Book Runner and Administrative Agent, U.S. Bank National Association, as Syndication Agent, and Harris Trust and Savings Bank, as Documentation Agent dated as of April 16, 2003. | |
*10(cc) | Amended and Restated Employment Agreement between Pioneer-Standard Electronics, Inc. and Arthur Rhein, effective April 1, 2003. | |
*10(dd) | Amendment No. 1 to Employment Agreement, between Pioneer-Standard Electronics, Inc. and Steven M. Billick, effective April 1, 2002. | |
*10(ee) | Amendment No. 1 to Change of Control Agreement and Non-Competition Agreement, dated as of January 30, 2003, between Pioneer-Standard Electronics, Inc. and Robert J. Bailey. | |
*10(ff) | Amendment No. 1 to Change of Control Agreement and Non-Competition Agreement, dated as of January 30, 2003, between Pioneer-Standard Electronics, Inc. and Peter J. Coleman. | |
*10(gg) | Employment Agreement dated June��30, 2003 between Martin F. Ellis and Pioneer-Standard Electronics (n/k/a Agilysys, Inc.). | |
*10(hh) | Change of Control Agreement dated June 30, 2003 by and between Martin F. Ellis and Pioneer-Standard Electronics (n/k/a Agilysys, Inc.). | |
21 | Subsidiaries of the Registrant. | |
23 | Consent of Ernst & Young LLP, 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. | |
99(a) | Certificate of Insurance Policy, effective November 1, 1997, between Chubb Group of Insurance Companies and Pioneer-Standard Electronics, Inc., which is incorporated herein by reference to Exhibit 99(a) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1998 (File No. 0-5734). |
Exhibit No. | Description | |
99(b) | Forms of Amended and Restated Indemnification Agreement entered into by and between the Company and each of its Directors and Executive Officers, which are incorporated herein by reference to Exhibit 99(b) to the Company’s Annual Report on Form 10-K for the year ended March 31, 1994 (File No. 0-5734). |
* Denotes a management contract or compensatory plan or arrangement.