Exhibit 99.1
FOR IMMEDIATE RELEASE
Agilysys Announces Unaudited Fiscal 2011 Fourth-Quarter
and Full-Year Financial Results
| | • | | Consolidated Revenue Advances 5.8% in Fiscal 2011 Fourth Quarter Compared with Fiscal 2010 Fourth Quarter |
| | • | | Fiscal Year 2011 Revenue Grew 6.5% From Fiscal 2010, Led by 23% Increase in Software Sales |
| | • | | Cash on Hand at Fiscal Yearend Increases 13% to $74.4 Million |
| | • | | Corporate Headquarters to Be Relocated to Alpharetta, Ga., in Fiscal 2012 |
CLEVELAND—June 14, 2011—Agilysys, Inc.(Nasdaq: AGYS), a leading provider of innovative IT solutions, today announced unaudited financial results for the fiscal 2011 fourth quarter and full year ended March 31, 2011.
Fourth-Quarter 2011 Unaudited Results of Operations
Fourth-quarter consolidated sales increased 5.8% to $143.8 million, compared with $135.8 million in the final quarter of fiscal 2010. Net revenues grew 16.5% and 8.7% in the Company’s Hospitality Solutions Group (HSG) and Technology Solutions Group (TSG), respectively, more than offsetting a 13.6% decline in its Retail Solutions Group (RSG).
Gross margin contracted to 25.3% of sales, compared with 26.4% of sales in the fiscal 2010 fourth quarter. Margins were negatively impacted during the quarter due to lower services margins and vendor rebates.
Selling, general and administrative (SG&A) expense was $44.8 million for the quarter, an increase of $2.9 million from the prior year, primarily due to higher incentive compensation.
During the quarter, the Company conducted its annual goodwill impairment test and concluded certain goodwill and intangible assets related primarily to its TSG business segment were impaired. As a result, the Company recorded a non-cash impairment charge of $37.7 million during the fiscal 2011 fourth quarter.
The reported operating loss for the quarter, which included the impairment charge and $0.8 million in restructuring charges, was $46.9 million. Adjusted EBITDA (operating loss plus depreciation and amortization), excluding asset impairment and restructuring charges, from continuing operations was a loss of $5.1 million for the quarter, compared with a loss of $2.9 million a year ago (see table attached).
The net loss from continuing operations for the quarter was $45.0 million, or a loss of $1.97 per diluted share, compared with a net loss from continuing operations of $0.5 million, or a loss of $0.02 per diluted share, in the prior-year fourth quarter.
James Dennedy, interim president and chief executive officer, commented: “Looking ahead to fiscal 2012, we are optimistic that the decisions and actions taken subsequent to the March fiscal yearend will enhance shareholder value. After the proposed divestiture of the TSG segment is completed, Agilysys will have two industry-leading businesses that will serve as a solid platform for profitable future growth.
“A major theme of the ongoing restructuring is to tighten our cost controls and better align corporate functions with our operating businesses. To that end, today we also announced that the Board of Directors has approved a restructuring plan, as well as the relocation of the Company’s corporate functions from Solon, Ohio, to Alpharetta, Ga., during fiscal 2012.”
Fiscal 2011 Unaudited Results of Operations
Full-year revenue in fiscal 2011 increased 6.5% to $675.5 million from $634.3 million in fiscal 2010 due to improvement in customer demand and bundling more remarketed software with hardware purchases. Sales of hardware, software and services increased 4%, 23% and 7%, respectively, compared with the prior year.
Full-year gross profit declined 2.4% to $157.7 million, versus $161.5 million in fiscal 2010. Gross margin as a percentage of sales was 23.3% in fiscal 2011, compared with 25.5% last year. Gross margin was negatively impacted by lower vendor rebates and services margins.
SG&A expense increased 3.6% to $173.2 million, compared with $167.2 million in the prior fiscal year. The increase was primarily due to higher incentive compensation, Guest360TM development costs that were capitalized in fiscal 2010 and higher costs associated with the Company’s ERP implementation in fiscal 2011.
Including the aforementioned asset impairment and restructuring charges, the operating loss for the year was $54.4 million, compared with the operating loss of $6.8 million in fiscal 2010. Charges related to restructuring and asset impairment totaled $38.9 million in fiscal 2011, versus $1.1 million in the prior year. Adjusted EBITDA from continuing operations, excluding asset impairment and restructuring charges, was a loss of $1.9 million for fiscal 2011, compared with a positive $10.1 million a year ago (see table attached).
The fiscal year 2011 net loss from continuing operations was $55.5 million, or $2.44 per diluted share. This compares with net income from continuing operations of $3.6 million, or $0.15 per diluted share, last year.
Liquidity
Cash on hand grew $8.8 million during the year, reaching $74.4 million at the end of fiscal 2011 due to lower investments in working capital. The Company remains debt free, except for certain capital leases.
Business Outlook
Management indicated that, at this time, it is not prepared to provide guidance for fiscal 2012. As soon as practicable after the close of the proposed TSG transaction, the Company intends to provide estimates regarding the cost of restructuring, as well as the expected impact of the restructuring on fiscal 2012’s anticipated results.
The Company plans to file its Form 10-K with the SEC later today.
Conference Call Information
A conference call will be held today at 11:00 a.m. ET. A slide deck, which will be the basis for the review, will accompany the conference call. Both the slide deck and the conference call can be accessed via the Investor Relations section ofwww.agilysys.com. In addition, a replay of the call will be archived on the website.
Additional Information
In connection with the proposed TSG divesture, the Company will file a proxy statement with the Securities and Exchange Commission (SEC). INVESTORS ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE COMPANY. You will be
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able to obtain the proxy statement, as well as other filings containing information about the Company, free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the proxy statement and other filings made by the Company with the SEC can also be obtained, free of charge, by directing a request to Agilysys Inc., 28925 Fountain Parkway, Solon, Ohio, 44139, Attention: Treasurer.
Participants in the Solicitation
The Company and its directors and officers may be deemed to be participants in the solicitation of proxies from the Company’s shareholders with respect to the special meeting of shareholders that will be held to consider the proposed transaction. Information about the Company’s directors and executive officers and their ownership of the Company’s common stock is set forth in the proxy statement for the Company’s Annual Meeting of shareholders, which was filed with the SEC on June 25, 2010. Shareholders may obtain additional information regarding the interests of the Company and its directors and executive officers in the proposed transaction, which may be different than those of the Company’s shareholders generally, by reading the proxy statement and other relevant documents regarding the proposed transaction, when filed 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 release 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, expected benefits and outcomes from our recent ERP implementation, 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, consequences related to the concentrated ownership of our outstanding shares by MAK Capital, and unanticipated deterioration in economic and financial conditions in the United States and around the world or the consequences; uncertainties associated with the proposed sale of the Company’s TSG business to OnX Enterprise Solutions, including uncertainties related to the anticipated timing of filings and approvals relating to the transaction, the expected timing of completion of the transaction and the ability to complete the transaction. The Company does 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 presentation, 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 ongoing operations. The non-GAAP measures included in this presentation have been reconciled to the comparable GAAP measures within an accompanying table, shown on the last page of this presentation.
About Agilysys
Agilysys is a leading developer and marketer of proprietary enterprise software, services and solutions to the hospitality and retail industries. The Company specializes in market-leading point-of-sale, property management, inventory & procurement, and mobile & wireless solutions that are designed to streamline
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operations, improve efficiency and enhance the consumer’s experience. Agilysys serves casinos, resorts, hotels, foodservice venues, stadiums, cruise lines, grocery stores, convenience stores, general & specialty retail businesses, and partners. Headquartered in Cleveland, Agilysys operates extensively throughout North America, with additional sales and support offices in the United Kingdom, Singapore and Hong Kong. For more information, visit www.agilysys.com
# # #
Investor Contact:
Curtis Stout
Vice President and Treasurer
Agilysys, Inc.
440-519-8635
curtis.stout@agilysys.com
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AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| | | | | | | | | | | | | | | | |
| (In thousands, except share and per share data) | | Three Months Ended
March 31, | | | Year Ended
March 31, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | | |
Net sales: | | | | | | | | | | | | | | | | |
Products | | $ | 111,806 | | | $ | 103,709 | | | $ | 545,348 | | | $ | 512,459 | |
Services | | | 31,971 | | | | 32,139 | | | | 130,122 | | | | 121,861 | |
| | | | | | | | | | | | | | | | |
Total net sales | | | 143,777 | | | | 135,848 | | | | 675,470 | | | | 634,320 | |
Cost of goods sold: | | | | | | | | | | | | | | | | |
Products | | | 93,917 | | | | 87,787 | | | | 460,969 | | | | 421,431 | |
Services | | | 13,535 | | | | 12,234 | | | | 56,810 | | | | 51,362 | |
| | | | | | | | | | | | | | | | |
Total cost of goods sold | | | 107,452 | | | | 100,021 | | | | 517,779 | | | | 472,793 | |
| | | | | | | | | | | | | | | | |
Gross margin | | | 36,325 | | | | 35,827 | | | | 157,691 | | | | 161,527 | |
Selling, general and administrative expenses | | | 44,823 | | | | 41,907 | | | | 173,211 | | | | 167,248 | |
| | | | |
Asset impairment charges | | | 37,662 | | | | 55 | | | | 37,721 | | | | 293 | |
Restructuring charges | | | 789 | | | | 78 | | | | 1,195 | | | | 823 | |
| | | | | | | | | | | | | | | | |
Operating loss | | | (46,949 | ) | | | (6,213 | ) | | | (54,436 | ) | | | (6,837 | ) |
Other (income) expenses: | | | | | | | | | | | | | | | | |
Other income, net | | | (43 | ) | | | (213 | ) | | | (2,320 | ) | | | (6,176 | ) |
| | | | |
Interest income | | | (69 | ) | | | (4 | ) | | | (130 | ) | | | (31 | ) |
Interest expense | | | 421 | | | | 282 | | | | 1,301 | | | | 970 | |
| | | | | | | | | | | | | | | | |
Loss before income taxes | | | (47,258 | ) | | | (6,278 | ) | | | (53,287 | ) | | | (1,600 | ) |
Income tax (benefit) expense | | | (2,251 | ) | | | (5,769 | ) | | | 2,188 | | | | (5,176 | ) |
| | | | | | | | | | | | | | | | |
(Loss) income from continuing operations | | | (45,007 | ) | | | (509 | ) | | | (55,475 | ) | | | 3,576 | |
Income (loss) from discontinued operations, net of taxes | | | — | | | | 9 | | | | — | | | | (29 | ) |
| | | | | | | | | | | | | | | | |
Net (loss) income | | $ | (45,007 | ) | | $ | (500 | ) | | $ | (55,475 | ) | | $ | 3,547 | |
| | | | | | | | | | | | | | | | |
Earnings per share – basic: | | | | | | | | | | | | | | | | |
(Loss) income from continuing operations | | $ | (1.97 | ) | | $ | (0.02 | ) | | $ | (2.44 | ) | | $ | 0.16 | |
| | | | | | | | | | | | | | | | |
Net (loss) income | | $ | (1.97 | ) | | $ | (0.02 | ) | | $ | (2.44 | ) | | $ | 0.16 | |
| | | | | | | | | | | | | | | | |
Earnings per share – diluted: | | | | | | | | | | | | | | | | |
(Loss) income from continuing operations | | $ | (1.97 | ) | | $ | (0.02 | ) | | $ | (2.44 | ) | | $ | 0.15 | |
| | | | | | | | | | | | | | | | |
Net (loss) income | | $ | (1.97 | ) | | $ | (0.02 | ) | | $ | (2.44 | ) | | $ | 0.15 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 22,805,434 | | | | 22,628,788 | | | | 22,785,192 | | | | 22,626,586 | |
Diluted | | | 22,805,434 | | | | 22,628,788 | | | | 22,785,192 | | | | 23,087,742 | |
| | | | |
Cash dividends per share | | $ | — | | | $ | — | | | $ | — | | | $ | 0.06 | |
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AGILYSYS, INC.
BUSINESS SEGMENT INFORMATION
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, 2011 (Unaudited) | | | Year Ended March 31, 2011 (Unaudited) | |
| | | Reportable Segments | | | Corporate/
Other | | | | | | Reportable Segments | | | Corporate/
Other | | | | |
| (In thousands) | | HSG | | | RSG | | | TSG | | | | Consolidated | | | HSG | | | RSG | | | TSG | | | | Consolidated | |
Total revenue | | $ | 24,814 | | | $ | 22,015 | | | $ | 97,145 | | | $ | — | | | $ | 143,974 | | | $ | 92,839 | | | $ | 109,147 | | | $ | 474,052 | | | $ | — | | | $ | 676,038 | |
Elimination of intersegment revenue | | | (26 | ) | | | (171 | ) | | | — | | | | — | | | | (197 | ) | | | (92 | ) | | | (476 | ) | | | — | | | | — | | | | (568 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue from external customers | | $ | 24,788 | | | $ | 21,844 | | | $ | 97,145 | | | $ | — | | | $ | 143,777 | | | $ | 92,747 | | | $ | 108,671 | | | $ | 474,052 | | | $ | — | | | $ | 675,470 | |
| | | | | | | | | | |
Gross margin | | $ | 15,821 | | | $ | 3,958 | | | $ | 16,546 | | | $ | — | | | $ | 36,325 | | | $ | 54,669 | | | $ | 20,970 | | | $ | 82,052 | | | $ | — | | | $ | 157,691 | |
Gross marginpercentage | | | 63.8 | % | | | 18.1 | % | | | 17.0 | % | | | | | | | 25.3 | % | | | 58.9 | % | | | 19.3 | % | | | 17.3 | % | | | | | | | 23.3 | % |
| | | | | | | | | | |
Operating income (loss) | | $ | 1,622 | | | $ | (520 | ) | | $ | (41,288 | ) | | $ | (6,763 | ) | | $ | (46,949 | ) | | $ | 6,030 | | | $ | 3,369 | | | $ | (31,736 | ) | | $ | (32,099 | ) | | $ | (54,436 | ) |
| | | | | | | | | | |
Other income, net | | | — | | | | — | | | | — | | | | (43 | ) | | | (43 | ) | | | — | | | | — | | | | — | | | | (2,320 | ) | | | (2,320 | ) |
| | | | | | | | | | |
Interest expense, net | | | — | | | | — | | | | — | | | | 352 | | | | 352 | | | | — | | | | — | | | | — | | | | 1,171 | | | | 1,171 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | | $ | 1,622 | | | $ | (520 | ) | | $ | (41,288 | ) | | $ | (7,072 | ) | | $ | (47,258 | ) | | $ | 6,030 | | | $ | 3,369 | | | $ | (31,736 | ) | | $ | (30,950 | ) | | $ | (53,287 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
Capital expenditures | | $ | 1,249 | | | $ | 1 | | | $ | 45 | | | $ | 26 | | | $ | 1,321 | | | $ | 3,760 | | | $ | 623 | | | $ | 914 | | | $ | 1,694 | | | $ | 6,991 | |
| | | | | | | | | | |
Other charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization - non-cash (1) | | $ | 1,091 | | | $ | 203 | | | $ | 329 | | | $ | 1,771 | | | $ | 3,394 | | | $ | 4,297 | | | $ | 449 | | | $ | 2,881 | | | $ | 5,987 | | | $ | 13,614 | |
| | | | | | | | | | |
Asset impairment charges - non-cash | | | 900 | | | | — | | | | 36,762 | | | | — | | | | 37,662 | | | | 959 | | | | — | | | | 36,762 | | | | — | | | | 37,721 | |
Restructuring charges - cash | | | — | | | | — | | | | 790 | | | | — | | | | 790 | | | | — | | | | — | | | | 790 | | | | — | | | | 790 | |
Restructuring charges (credits) - non-cash | | | — | | | | — | | | | — | | | | (1 | ) | | | (1 | ) | | | — | | | | — | | | | — | | | | 405 | | | | 405 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,991 | | | $ | 203 | | | $ | 37,881 | | | $ | 1,770 | | | $ | 41,845 | | | $ | 5,256 | | | $ | 449 | | | $ | 40,433 | | | $ | 6,392 | | | $ | 52,530 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended March 31, 2010 (Unaudited) | | | Year Ended March 31, 2010 | |
| | | Reportable Segments | | | Corporate/
Other | | | | | | Reportable Segments | | | Corporate/
Other | | | | |
| | | HSG | | | RSG | | | TSG | | | | Consolidated | | | HSG | | | RSG | | | TSG | | | | Consolidated | |
Total revenue | | $ | 21,313 | | | $ | 25,373 | | | $ | 89,295 | | | $ | — | | | $ | 135,981 | | | $ | 83,361 | | | $ | 110,506 | | | $ | 440,887 | | | $ | — | | | $ | 634,754 | |
Elimination of intersegment revenue | | | (33 | ) | | | (91 | ) | | | (9 | ) | | | — | | | | (133 | ) | | | (206 | ) | | | (155 | ) | | | (73 | ) | | | — | | | | (434 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue from external customers | | $ | 21,280 | | | $ | 25,282 | | | $ | 89,286 | | | $ | — | | | $ | 135,848 | | | $ | 83,155 | | | $ | 110,351 | | | $ | 440,814 | | | $ | — | | | $ | 634,320 | |
| | | | | | | | | | |
Gross margin | | $ | 13,374 | | | $ | 5,840 | | | $ | 16,613 | | | $ | — | | | $ | 35,827 | | | $ | 51,463 | | | $ | 23,326 | | | $ | 87,501 | | | $ | (763 | ) | | $ | 161,527 | |
Gross margin percentage | | | 62.8 | % | | | 23.1 | % | | | 18.6 | % | | | | | | | 26.4 | % | | | 61.9 | % | | | 21.1 | % | | | 19.8 | % | | | | | | | 25.5 | % |
| | | | | | | | | | |
Operating income (loss) | | $ | 2,220 | | | $ | 737 | | | $ | (1,531 | ) | | $ | (7,639 | ) | | $ | (6,213 | ) | | $ | 7,666 | | | $ | 5,759 | | | $ | 9,407 | | | $ | (29,669 | ) | | $ | (6,837 | ) |
| | | | | | | | | | |
Other income, net | | | — | | | | — | | | | — | | | | (213 | ) | | | (213 | ) | | | — | | | | — | | | | — | | | | (6,176 | ) | | | (6,176 | ) |
| | | | | | | | | | |
Interest expense, net | | | — | | | | — | | | | — | | | | 278 | | | | 278 | | | | — | | | | — | | | | — | | | | 939 | | | | 939 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | | $ | 2,220 | | | $ | 737 | | | $ | (1,531 | ) | | $ | (7,704 | ) | | $ | (6,278 | ) | | $ | 7,666 | | | $ | 5,759 | | | $ | 9,407 | | | $ | (24,432 | ) | | $ | (1,600 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
Capital expenditures | | $ | 1,041 | | | $ | — | | | $ | 41 | | | $ | 2,552 | | | $ | 3,634 | | | $ | 4,694 | | | $ | 31 | | | $ | 103 | | | $ | 8,478 | | | $ | 13,306 | |
| | | | | | | | | | |
Non-cash charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization (1) | | $ | 1,029 | | | $ | 55 | | | $ | 839 | | | $ | 1,266 | | | $ | 3,189 | | | $ | 4,337 | | | $ | 198 | | | $ | 6,418 | | | $ | 4,876 | | | $ | 15,829 | |
Asset impairment charges | | | — | | | | — | | | | 55 | | | | — | | | | 55 | | | | 90 | | | | — | | | | 55 | | | | 148 | | | | 293 | |
| | | | | | | | | | |
Restructuring charges | | | — | | | | — | | | | — | | | | 78 | | | | 78 | | | | — | | | | — | | | | — | | | | 823 | | | | 823 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,029 | | | $ | 55 | | | $ | 894 | | | $ | 1,344 | | | $ | 3,322 | | | $ | 4,427 | | | $ | 198 | | | $ | 6,473 | | | $ | 5,847 | | | $ | 16,945 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Does not include the amortization of deferred financing fees totaling $131 and $139 for the three months ended March 31, 2011 and 2010, respectively, and $524 and $485 for the year ended March 31, 2011 and 2010, respectively. |
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AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| | | | | | | | |
| | | March 31, | | | March 31, | |
| (In thousands, except share and per share data) | | 2011 | | | 2010 | |
| | | (Unaudited) | | | | |
ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 74,354 | | | $ | 65,535 | |
Accounts receivable, net | | | 123,666 | | | | 104,808 | |
Inventories, net | | | 20,632 | | | | 14,446 | |
Deferred income taxes – current, net | | | — | | | | 144 | |
Prepaid expenses | | | 3,063 | | | | 4,399 | |
Other current assets | | | 6,494 | | | | 726 | |
Income taxes receivable | | | 1,583 | | | | 10,394 | |
| | | | | | | | |
Total current assets | | | 229,792 | | | | 200,452 | |
Goodwill | | | 20,569 | | | | 50,418 | |
Intangible assets, net | | | 22,535 | | | | 32,510 | |
Deferred income taxes – non-current, net | | | — | | | | 899 | |
Other non-current assets | | | 12,959 | | | | 18,175 | |
Property and equipment, net | | | 26,543 | | | | 27,995 | |
| | | | | | | | |
Total assets | | $ | 312,398 | | | $ | 330,449 | |
| | | | | | | | |
| | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 93,486 | | | $ | 70,171 | |
Deferred revenue | | | 27,914 | | | | 23,810 | |
Accrued liabilities | | | 23,887 | | | | 17,183 | |
Income taxes payable | | | 156 | | | | — | |
Deferred income taxes – current, net | | | 77 | | | | — | |
Capital lease obligations – current | | | 1,267 | | | | 311 | |
| | | | | | | | |
Total current liabilities | | | 146,787 | | | | 111,475 | |
Deferred income taxes – non-current, net | | | 3,894 | | | | 412 | |
Capital lease obligations – non-current | | | 1,461 | | | | 384 | |
Other non-current liabilities | | | 12,152 | | | | 19,254 | |
Shareholders’ equity: | | | | | | | | |
| | |
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 23,022,398 and 22,932,043 shares outstanding at March 31, 2011 and 2010, respectively | | | 9,482 | | | | 9,482 | |
| | |
Treasury shares (8,584,433 and 8,674,788 shares at March 31, 2011 and 2010, respectively) | | | (2,575 | ) | | | (2,602 | ) |
Capital in excess of stated value | | | (5,421 | ) | | | (8,770 | ) |
Retained earnings | | | 146,659 | | | | 202,134 | |
Accumulated other comprehensive loss | | | (41 | ) | | | (1,320 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 148,104 | | | | 198,924 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 312,398 | | | $ | 330,449 | |
| | | | | | | | |
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AGILYSYS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | |
| (In thousands) | | Year Ended March 31, | |
| | | 2011 | | | 2010 | |
| | | (Unaudited) | | | | |
Operating activities: | | | | | | | | |
Net (loss) income | | $ | (55,475 | ) | | $ | 3,547 | |
Add: Loss from discontinued operations | | | — | | | | 29 | |
| | | | | | | | |
(Loss) income from continuing operations | | | (55,475 | ) | | | 3,576 | |
Adjustments to reconcile net (loss) income from continuing operations to net cash provided by operating activities: | | | | | | | | |
Gain on redemption of Company-owned life insurance policies | | | (2,065 | ) | | | — | |
Gain on redemption of investment in The Reserve Fund’s Primary Fund | | | (147 | ) | | | (2,505 | ) |
Asset impairment charges | | | 37,721 | | | | 293 | |
Loss on the sale of securities | | | — | | | | 91 | |
Depreciation | | | 4,698 | | | | 3,914 | |
Amortization | | | 9,440 | | | | 12,400 | |
Deferred income taxes | | | 4,133 | | | | 6,596 | |
Stock based compensation | | | 3,614 | | | | 2,426 | |
Excess tax benefit from exercise of stock options | | | — | | | | (9 | ) |
Change in cash surrender value of company owned life insurance policies | | | 179 | | | | (802 | ) |
Changes in operating assets and liabilities: | | | | | | | | |
Accounts receivable | | | (17,908 | ) | | | 49,481 | |
Inventories | | | (6,186 | ) | | | 12,839 | |
Accounts payable | | | 22,773 | | | | 41,889 | |
Accrued and other liabilities | | | 4,004 | | | | (18,076 | ) |
Income taxes receivable | | | 8,267 | | | | (9,021 | ) |
Other changes, net | | | 2,213 | | | | (1,451 | ) |
Other non-cash adjustments | | | (478 | ) | | | 2,283 | |
| | | | | | | | |
Total adjustments | | | 70,258 | | | | 100,348 | |
| | | | | | | | |
Net cash provided by operating activities | | | 14,783 | | | | 103,924 | |
Investing activities: | | | | | | | | |
Proceeds from The Reserve Fund’s Primary Fund | | | 147 | | | | 4,772 | |
Proceeds from redemption of/borrowings against Company-owned life insurance policies | | | 15,980 | | | | 12,500 | |
Additional investments in Company-owned life insurance policies | | | (1,129 | ) | | | (1,712 | ) |
Proceeds from the sale of marketable securities | | | 14 | | | | 61 | |
Additional investments in marketable securities | | | (13,731 | ) | | | (45 | ) |
Purchase of property and equipment | | | (6,991 | ) | | | (13,306 | ) |
| | | | | | | | |
Net cash (used for) provided by investing activities | | | (5,710 | ) | | | 2,270 | |
Financing activities: | | | | | | | | |
Floor plan financing agreement, net | | | — | | | | (74,468 | ) |
Proceeds from borrowings under credit facility | | | 15,325 | | | | 5,077 | |
Principal payments under credit facility | | | (15,325 | ) | | | (5,077 | ) |
Debt financing costs | | | — | | | | (1,578 | ) |
Issuance of common shares | | | — | | | | 89 | |
Repurchase of common shares to satisfy employee tax withholding | | | (238 | ) | | | — | |
Excess tax benefit from exercise of stock options | | | — | | | | 9 | |
Dividends paid | | | — | | | | (1,360 | ) |
Principal payments under long term obligations | | | (419 | ) | | | (216 | ) |
| | | | | | | | |
Net cash used for financing activities | | | (657 | ) | | | (77,524 | ) |
Effect of exchange rate changes on cash | | | 403 | | | | 695 | |
| | | | | | | | |
Cash flows provided by continuing operations | | | 8,819 | | | | 29,365 | |
Cash flows of discontinued operations - operating | | | — | | | | (74 | ) |
| | | | | | | | |
Net increase in cash | | | 8,819 | | | | 29,291 | |
Cash at beginning of period | | | 65,535 | | | | 36,244 | |
| | | | | | | | |
Cash at end of period | | $ | 74,354 | | | $ | 65,535 | |
| | | | | | | | |
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AGILYSYS, INC.
RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA FROM CONTINUING OPERATIONS
| | | | | | | | | | | | | | | | |
| (In thousands) | | Three Months Ended
March 31, | | | Year Ended March 31, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | | |
| | | | |
Net (loss) income | | $ | (45,007 | ) | | $ | (500 | ) | | $ | (55,475 | ) | | $ | 3,547 | |
Plus: | | | | | | | | | | | | | | | | |
Interest expense, net | | | 352 | | | | 278 | | | | 1,171 | | | | 939 | |
Income tax (benefit) expense | | | (2,251 | ) | | | (5,769 | ) | | | 2,188 | | | | (5,176 | ) |
Depreciation and amortization expense (a) | | | 3,394 | | | | 3,189 | | | | 13,614 | | | | 15,829 | |
Other income, net | | | (43 | ) | | | (213 | ) | | | (2,320 | ) | | | (6,176 | ) |
(Income) loss from discontinued operations, net of tax | | | — | | | | (9 | ) | | | — | | | | 29 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA from continuing operations | | $ | (43,555 | ) | | $ | (3,024 | ) | | $ | (40,822 | ) | | $ | 8,992 | |
Asset impairment charges | | | 37,662 | | | | 55 | | | | 37,721 | | | | 293 | |
Restructuring charges | | | 789 | | | | 78 | | | | 1,195 | | | | 823 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA from continuing operations excluding asset impairment and restructuring charges | | $ | (5,104 | ) | | $ | (2,891 | ) | | $ | (1,906 | ) | | $ | 10,108 | |
| | | | | | | | | | | | | | | | |
| (a) | Depreciation and amortization expense excludes amortization of deferred financing fees totaling $131 and $139 for the three months ended March 31, 2011 and 2010, respectively, and $524 and $485 for the twelve months ended March 31, 2011 and 2010, respectively, as such costs are already included in interest expense, net. |
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