Attached files
| file | filename |
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| EX-99.1 - EX-99.1 - AGILYSYS INC | dex991.htm |
| 8-K - 8-K - AGILYSYS INC | d8k.htm |
 Agilysys, Inc. (Nasdaq: AGYS)
Agilysys, Inc. (Nasdaq: AGYS)
Agilysys, Inc. (Nasdaq: AGYS)
Fiscal 2012 Unaudited First-Quarter Results
August 9, 2011
1
Exhibit 99.2 |
 Forward-looking statements & non-GAAP financial
information
Forward-looking statements & non-GAAP financial
information
Forward-Looking Language
This Quarterly Report 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
Quarterly
Report
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,
unanticipated deterioration in economic and financial conditions in the United States and around the world or the consequences
associated with the sale of the Company’s TSG business, and uncertainties
regarding restructuring actions and the relocation of the Company’s
corporate headquarters. 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 “Risk Factors,”
which is included in Part I, Item 1A of the Company’s Annual Report for the
fiscal year ended March 31, 2011. 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. 2 |
 Strategic update
Strategic update
•
Closed divestiture of Technology Solutions Group (TSG) business for a purchase
price of
$64.0M
in
cash
to
OnX
Enterprise
Solutions
on
August 1
•
Net proceeds after contractual obligations and estimated transaction expenses are
expected to be
$55.7M
•
Net proceeds remain subject to downward working capital adjustment based on
closing balance sheet
•
Strategic emphasis focuses on improving business performance, making select
investments and returning capital to shareholders
•
Announced
Board
of
Directors
authorization
to
repurchase
up
to
1.6
million,
or
approximately
7%,
of
outstanding
shares
•
Key tenets of operating plan are streamlining operations and reducing corporate
expenses, including facilities’
footprint
•
Relocating corporate headquarters to Alpharetta, Georgia to reduce corporate costs
and reposition support closer to key revenue-producing locations in
Georgia and South Carolina •
Executing
plan
to
reduce
annual
“run-rate”
SG&A
by
$14M
to
$16M,
which
is
expected to
be
realized
beginning
in
FY13
—
primarily
corporate
cost
savings
•
Estimated
restructuring
costs
are
$16M
to
$18M—
expect
to
be
primarily
recognized in
FY12
3
st
Shareholder value to be driven by improved operating performance while focusing
on the market opportunities in the hospitality and retail industries |
 Strategic update
Strategic update
•
Hoteliers and retailers demand lower operating costs, while enhancing guest
experience, driven by their investments in business systems
•
No clear end-to-end hospitality solution exists
•
Hotels
and
restaurants
are
looking
to
deliver
value
through
“personalization”
of
guest experience
•
Hotels and resorts desire to be hub of guest travel experience
•
Retailers seeking mobility solutions
•
Key strategic initiatives
•
Product integration
•
Capability development
•
Investment prioritization
•
Partner expansion
4 |
 Q1
review: consolidated results Q1 review: consolidated results
•
Consolidated revenue increased 15%;
hardware up 22%, software down 14% and
services up 18%
•
Gross margins decreased 40 basis points
due to lower services margins in TSG
•
SG&A, excluding depr. & amort., increased
$2.5M, primarily due to TSG transaction
expenses and accelerated vesting of stock
compensation
•
Depreciation and amortization decreased
$1.1M, primarily due to lower acquisition-
related intangibles amortization
•
Taxes in Q1 FY11 included a $4.4M charge
for valuation allowance related to deferred tax
assets
•
Operating loss was $5.4M, compared with
loss of $6.6M in Q1 FY11
Q1
Year-over-Year
Commentary
Statement
of
Operations
($Mil.,
except
per
share)
5
2011
2010
%
Net sales
$151.6
$131.9
15.0%
Cost of goods sold
$113.2
$98.0
15.5%
Gross profit
$38.4
$33.9
13.5%
25.3%
25.7%
SG&A (excl. depr. & amort.)
$39.4
$36.9
6.7%
Depreciation
&
amortization
1
$2.1
$3.2
(35.2%)
Restructuring charges
$2.4
$0.4
509.4%
Operating loss
($5.4)
($6.6)
Other expense/(income), net
$0.1
($1.1)
Interest expense, net
$0.3
$0.3
Loss before income taxes
($5.8)
($5.8)
Income tax (benefit)/expense
($1.0)
$4.5
Net loss
($4.8)
($10.3)
Basic and diluted loss per share:
Net loss
($0.21)
($0.45)
Adjusted EBITDA excl. charges
2
($0.5)
($2.7)
(0.3%)
(2.1%)
(1) $0.5M and $0.3M of developed technology amortization included in COGS
for Q1FY12 and Q1FY11, respectively
(2) Excludes Restructuring charge
June 30
Three Months Ended |
 Q1
review: Hospitality (“HSG”) Q1 review: Hospitality
(“HSG”) •
Revenue decreased 9%, largely due to lower
hardware sales
•
Gross margin increased due to higher
services margin and proportion of services
•
SG&A, excluding depr. & amort., increased
$1.8M
•
Guest360
TM
capitalized
costs
were
$0.3M
compared with $1.0M in prior-year quarter
•
Adjusted EBITDA, excluding restructuring
charges, decreased $1.5M due to higher
SG&A
HSG Segment Profit ($Mil.)
Q1 Year-over-Year Commentary
6
2011
2010
%
Net sales
$21.0
$23.1
(9.1%)
Cost of goods sold
$7.7
$9.8
(21.2%)
Gross profit
$13.3
$13.3
(0.2%)
63.3%
57.7%
SG&A (excl. depr. & amort.)
$12.0
$10.2
16.9%
Depreciation & amortization
$0.6
$0.8
(27.2%)
Restructuring charges
$0.2
$0.0
nm
Operating income
$0.5
$2.2
Depreciation
&
amortization
$1.1
$1.1
Adjusted EBITDA
$1.6
$3.3
Adjusted EBITDA excl. charges
$1.8
$3.3
8.4%
14.4%
(1) $0.5M and $0.3M of developed technology amortization included in COGS
for Q1FY12 and Q1FY11, respectively
(2) Excludes Restructuring charge
Three Months Ended
June 30
2
1 |
 Q1
review: Retail (“RSG”) Q1 review: Retail (“RSG”)
•
Revenue increased 39%, primarily due to
higher hardware and services sales
•
Gross margin decreased as a result of lower
hardware margins and higher proportion of
hardware
•
SG&A, excl. depr. & amort., was essentially
unchanged
•
Adjusted EBITDA, excluding restructuring
charges, increased $0.5M on higher revenue
RSG Segment Profit ($Mil.)
Q1 Year-over-Year Commentary
7
2011
2010
%
Net sales
$32.9
$23.7
38.7%
Cost of goods sold
$26.7
$18.1
47.6%
Gross profit
$6.3
$5.7
10.4%
19.0%
23.9%
SG&A (excl. depr. & amort.)
$3.9
$3.8
1.6%
Depreciation & amortization
$0.2
$0.1
nm
Restructuring charges
$0.1
$0.0
Operating income
$2.1
$1.8
Depreciation & amortization
$0.2
$0.1
Adjusted EBITDA
$2.3
$1.9
Adjusted EBITDA excl. charges
1
$2.4
$1.9
7.2%
7.8%
(1) Excludes Restructuring charge
Three Months Ended
June 30 |
 Q1
review: Technology (“TSG”) Q1 review: Technology
(“TSG”) •
Revenue increased 15%
•
Gross margin increased on higher hardware
margins
•
SG&A, excl. depr. & amort., increased by
$0.3M
•
Acquisition-related intangible amortization
decreased $0.6M due to impairment of
intangible assets in Q4 FY11
•
Adjusted EBITDA increased $3.7M due to
higher revenue and gross margin expansion
TSG Segment Profit ($Mil.)
Q1 Year-over-Year Commentary
8
2011
2010
%
Net sales
$97.8
$85.1
14.9%
Cost of goods sold
$78.9
$70.2
12.4%
Gross profit
$18.9
$14.9
26.8%
19.3%
17.5%
SG&A (excl. depr. & amort.)
$16.2
$15.9
2.0%
Depreciation & amortization
$0.1
$0.8
(85.0%)
Restructuring charges
$0.0
$0.0
nm
Operating income/(loss)
$2.6
($1.8)
Depreciation & amortization
$0.1
$0.8
Adjusted EBITDA
$2.7
($1.0)
Adjusted
EBITDA
excl.
charges
$2.7
($1.0)
2.8%
(1.1%)
(1) Excludes Restructuring charges
Three Months Ended
June 30
1 |
 Q1
review: Corporate/other Q1 review: Corporate/other
•
SG&A, excl. depr. & amort., increased $0.4M
due to accelerated vesting of stock
compensation and transaction expenses both
related to TSG divestiture
•
Restructuring charge related to CEO
transition and other cost-reduction initiatives
•
Adjusted EBITDA loss, excluding charges,
increased $0.4M
Corporate ($Mil.)
Q1 Year-over-Year Commentary
9
2011
2010
$
SG&A (excl. depr. & amort.)
$7.3
$7.0
$0.4
Depreciation & amortization
$1.2
$1.5
($0.3)
Restructuring charge
$2.0
$0.4
$1.6
Operating loss
($10.6)
($8.9)
($1.7)
Depreciation & amortization
$1.2
$1.5
($0.3)
Adjusted EBITDA
($9.4)
($7.4)
($2.0)
Adjusted EBITDA excl. charges¹
($7.3)
($7.0)
($0.4)
(1) Excludes Restructuring charges
Three Months Ended
June 30 |
 FY12 Q1 review: summary balance sheet
performance
FY12 Q1 review: summary balance sheet
performance
•
Cash
at
quarter-end
was
$51.7M
—
a
decrease of $22.7M from 3/31/11
•
Cash at close of TSG divestiture was
approximately $102M
•
Days sales outstanding was unchanged in Q1
FY12 from 3/31/11 at 77 days
•
Working capital as a percent of revenue
increased sequentially to 5.9%
•
Capital expenditures were $0.8M in Q1 FY12,
compared with $1.5M in Q1 FY11 —
decrease due to lower capitalized Guest360
expense
•
Working capital is (A/R + Inventory) less (A/P + IGF flooring + Deferred
Revenue)
•
Quarterly revenue annualized at historical quarterly skew
$121.9
$157.6
$210.3
$123.7
$130.5
$25.9
$22.6
$22.5
$20.6
$25.7
6.1%
6.9%
7.8%
3.4%
5.9%
$0
$50
$100
$150
$200
$250
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
0%
3%
6%
9%
12%
15%
Receivables
Inventory
Working capital as % of sales
10
Working Capital ($Mil.)
Commentary |
 Agilysys, Inc. (Nasdaq: AGYS)
Agilysys, Inc. (Nasdaq: AGYS)
Agilysys, Inc. (Nasdaq: AGYS)
Fiscal 2012 Unaudited First-Quarter Results
August 9, 2011
11 |
 Reconciliation of net loss to adjusted EBITDA
Reconciliation of net loss to adjusted EBITDA
2011
2010
Net loss
(4,789)
$
(10,252)
$
Plus:
Interest expense, net
305
263
Income tax (benefit) expense
(1,041)
4,480
Depreciation and amortization expense (a)
2,530
3,455
Other expenses (income), net
138
(1,083)
Adjusted EBITDA
(2,857)
$
(3,137)
$
Restructuring charges
2,395
393
Adjusted EBITDA excluding restructuring charges
(462)
$
(2,744)
$
(a) Depreciation and amortization expense excludes amortization of deferred financing fees totaling
$131 for each of the three months ended June 30, 2011 and 2010,
respectively, as such costs are already included in interest expense, net. (In thousands)
Three Months Ended
June 30,
12 |