Business Segments

12 Months Ended

Mar. 31, 2013

Segment Reporting, Measurement Disclosures [Abstract]

Business Segments

Business Segments

Description of Business Segments

Agilysys has two reportable business segments: HSG and RSG. The reportable segments are each managed separately and are supported by various practices as well as company-wide functional departments. These functional support departments include general accounting and finance, accounts payable, tax, information technology, legal, payroll, and benefits and a portion of these costs are reported in Corporate/Other. Corporate/Other is not a reportable business segment as defined by GAAP. As a result of the sale of the TSG business during fiscal 2012, and the TSA with OnX, Corporate/Other costs have been adjusted for the period presented to remove the portion of the functional support department costs that were transferred to OnX.

We allocate certain general and administrative costs related to the accounts payable, legal, payroll, and benefits functional departments to the reportable business segments in order to provide a better reflection of the costs needed to operate the business segments.

HSG develops, markets and sells property and lodging management, point-of-sale, and inventory and procurement applications to customers in the hospitality industry, including operators of hotels, casinos, destination resorts, cruise lines and foodservice management establishments. We offer solutions that provide comprehensive control of the customer's property operations - from reservations, check in, point-of-sale and other guest-engagement activities to inventory, procurement and document management.

RSG is one of North America's largest systems integrators retail point-of-sale, self-service and wireless solutions and provides proprietary business consulting, implementation and hardware maintenance and support services. Additionally, our extensive experience in the integration of wireless infrastructure with legacy systems enables our customers to capture the promise of today's mobile technology. Our mobile solutions extend the customer's operations to portable devices, increasing customer satisfaction and productivity with integrated software that reduces security exposure. We also sell POS and mobile POS (MPOS) solutions to facilitate the check-out process as well as other self-service capabilities.

RSG's expertise also encompasses a suite of support and professional services including consultation, analysis, design, installation and implementation, as well as onsite maintenance and ongoing help-desk support. Our comprehensive portfolio of support services provides total lifecycle management for our customers' in-store solutions to help increase their return on investment and lower their total cost of ownership.

Measurement of Segment Operating Results and Segment Assets

We evaluate performance and allocate resources to our reportable segments based on operating income. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies elsewhere in the footnotes to the consolidated financial statements. Intersegment sales are recorded at pre-determined amounts to allow for intercompany profit to be included in the operating results of the individual reportable segments. Such intercompany profit is eliminated for consolidated financial reporting purposes.

For the fiscal year ended March 31, 2013, revenue from one RSG customer represented 12.7% of consolidated net revenue.

Our Chief Executive Officer, who is the Chief Operating Decision Maker, does not evaluate a measurement of segment assets when evaluating the performance of our reportable segments. As such, information relating to segment assets is not provided in the financial information below.

The following tables present segment profit and related information for each of our reportable segments for the fiscal years ended March 31, 2013, 2012 and 2011.

	Reportable Segments						Corporate/
(In thousands)	HSG			RSG			Other			Consolidated
Fiscal Year Ended March 31, 2013
Total revenue:
Products	$	33,517		$	90,281		$	—		$	123,798
Support, maintenance and subscription services	50,235			28,003			—			78,238
Professional services	14,610			20,622			—			35,232
Elimination of intersegment revenue	(54		)	(1,074		)	—			(1,128		)
Revenue from external customers	$	98,308		$	137,832		—			$	236,140
Gross profit	$	63,260		$	26,910		$	—		$	90,170
Gross profit margin	64.3		%	19.5		%				38.2		%
Operating income (loss)	$	14,428		$	10,840		$	(26,379	)	$	(1,111	)
Interest expense, net	—			—			332			332
Other expenses, net	—			—			139			139
Income (loss) before income taxes	$	14,428		$	10,840		$	(26,850	)	$	(1,582	)
Other charges:
Depreciation of fixed assets and amortization of intangibles	$	2,663		$	616		$	2,777		$	6,056
Asset impairments and related charges	$	120		—			—			$	120
Legal settlements	$	—		$	—		$	1,664		$	1,664
Restructuring, severance and other charges	$	871		$	—		$	625		$	1,496
Fiscal Year Ended March 31, 2012
Total revenue:
Products	$	25,608		$	79,993		$	—		$	105,601
Support, maintenance and subscription services	47,611			25,938			—			73,549
Professional services	13,156			17,422			—			30,578
Elimination of intersegment revenue	—			(839		)	—			(839		)
Revenue from external customers	$	86,375		$	122,514		—			$	208,889
Gross profit	$	55,354		$	24,482		$	—		$	79,836
Gross profit margin	64.1		%	20.0		%				38.2		%
Operating (loss) income	$	(6,552	)	$	5,481		$	(40,119	)	$	(41,190	)
Interest expense, net	—			—			875			875
Other expenses, net	—			—			181			181
(Loss) income before income taxes	$	(6,552	)	$	5,481		$	(41,175	)	$	(42,246	)
Other charges:
Depreciation of fixed assets and amortization of intangibles	$	2,766		$	728		$	4,794		$	8,288
Asset impairments and related charges	$	9,681		$	—		$	—		$	9,681
Restructuring, severance and other charges	$	2,289		$	606		$	12,958		$	15,853

	Reportable Segments						Corporate/
(In thousands)	HSG			RSG			Other			Consolidated
Fiscal Year Ended March 31, 2011
Total revenue:
Products	$	35,306		$	69,463		$	—		$	104,769
Support, maintenance and subscription services	45,053			26,146			—			71,199
Professional services	13,742			13,539			—			27,281
Elimination of intersegment revenue	(92		)	(476		)	—			(568		)
Revenue from external customers	$	94,009		$	108,672		$	—		$	202,681
Gross profit	$	54,669		$	20,970		$	—		$	75,639
Gross profit margin	58.2		%	19.3		%				37.3		%
Operating income (loss)	$	5,836		$	3,164		$	(30,625	)	$	(21,625	)
Interest expense, net	—			—			1,224			1,224
Other expenses (income), net	—			—			(2,294		)	(2,294		)
Income (loss) before income taxes	$	5,836		$	3,164		$	(29,555	)	$	(20,555	)
Other charges:
Depreciation of fixed assets and amortization of intangibles	$	2,605		$	445		$	5,986		$	9,036
Asset impairments and related charges	$	959		—			—			$	959
Restructuring, severance and other charges	$	—		—			$	405		$	405

Enterprise-Wide Disclosures

Our assets are primarily located in the United States of America. Further, revenue attributable to our international operations accounted for approximately 4%, 5%, and 6% of total revenue for fiscal 2013, 2012, and 2011, respectively.