Ohio | 000-5734 | 34-0907152 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer Identification No.) | ||
of incorporation) |
425 Walnut Street, Suite 1800 Cincinnati, Ohio | 45202 | |
(Address of principal executive offices) | (ZIP Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition; and | |
Item 7.01 | Regulation FD Disclosure |
Item 9.01 | Financial Statements and Exhibits |
Exhibit Number | Description | |
99.1 | Press release issued by Agilysys, Inc. dated November 5, 2014, announcing its results for the second quarter and period ended September 30, 2014. |
AGILYSYS, INC. | |||
By: | /s/ Janine K. Seebeck | ||
Janine K. Seebeck | |||
Senior Vice President, Chief Financial Officer, | |||
and Treasurer |
Exhibit Number | Description | |
99.1 | Press release issued by Agilysys, Inc. dated November 5, 2014, announcing its results for the second quarter and period ended September 30, 2014. |
• | Total net revenue increased $1.5 million, or 6%, to $26.3 million, compared to total net revenue of $24.8 million in the comparable prior-year period. |
• | Recurring revenues (which are comprised of support, maintenance and subscription services) were $13.8 million for the quarter, an increase of 7% over the same period in fiscal 2014. |
• | Gross margin was 63% in the fiscal 2015 second quarter, compared to 67% in the prior-year period. |
• | Adjusted operating income (non-GAAP) from continuing operations (excluding stock-based compensation, amortization of intangibles and other one-time items) was $0.7 million, comparable to adjusted operating income from continuing operations in the year-ago period (see reconciliation below). |
• | Adjusted income (non-GAAP) from continuing operations was $0.7 million, or $0.03 per diluted share, comparable to adjusted income from continuing operations and per diluted share in the same period last year (see reconciliation below). |
• | Net loss in the period was $(1.1) million, or $(0.05) per diluted share, compared to net income of $20.5 million, or $0.92 per diluted share, in the prior-year period, which included net income from discontinued operations of $21.8 million, or $0.98 per diluted share. |
• | Total net revenue for the period increased $1.6 million, or 3%, to $50.1 million, compared with $48.5 million in the comparable prior-year period. |
• | Recurring revenues (which are comprised of support, maintenance and subscription services) were $27.6 million for the period, an increase of 7% over the first six months of fiscal 2014. |
• | Gross margin of 63% compares to gross margin of 66% in the prior-year period. |
• | Adjusted operating income (non-GAAP) from continuing operations (excluding stock-based compensation, amortization of intangibles and other one-time items) for the first six months of fiscal 2015 was $0.3 million compared to adjusted operating income from continuing operations of $2.4 million in the comparable year-ago period (see reconciliation below). |
• | Adjusted income (non-GAAP) from continuing operations was $0.3 million, or $0.02 per diluted share, compared with adjusted income of $2.3 million, or $0.10 per diluted share, in the first six months of fiscal 2014 (see reconciliation below). |
• | Net loss in the first six months of fiscal 2015 was $(3.4) million, or $(0.15) per diluted share, compared with net income of $21.8 million, or $0.99 per diluted share, in the first six months of fiscal 2014, which included net income from discontinued operations of $22.3 million, or $1.01 per diluted share. |
(In thousands, except per share data) | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net revenue: | |||||||||||||||
Products | $ | 7,649 | $ | 8,585 | $ | 13,701 | $ | 16,091 | |||||||
Support, maintenance and subscription services | 13,775 | 12,881 | 27,594 | 25,755 | |||||||||||
Professional services | 4,894 | 3,380 | 8,769 | 6,700 | |||||||||||
Total net revenue | 26,318 | 24,846 | 50,064 | 48,546 | |||||||||||
Cost of goods sold: | |||||||||||||||
Products | 3,502 | 3,285 | 7,001 | 6,908 | |||||||||||
Support, maintenance and subscription services | 2,961 | 2,578 | 6,091 | 4,847 | |||||||||||
Professional services | 3,186 | 2,395 | 5,629 | 4,566 | |||||||||||
Total cost of goods sold | 9,649 | 8,258 | 18,721 | 16,321 | |||||||||||
Gross profit | 16,669 | 16,588 | 31,343 | 32,225 | |||||||||||
Operating expenses: | |||||||||||||||
Product development | 6,191 | 6,714 | 12,056 | 12,946 | |||||||||||
Sales and marketing | 3,825 | 4,068 | 7,710 | 7,035 | |||||||||||
General and administrative | 6,079 | 5,065 | 11,196 | 9,694 | |||||||||||
Depreciation of fixed assets | 532 | 513 | 1,146 | 994 | |||||||||||
Amortization of intangibles | 594 | 794 | 2,377 | 1,588 | |||||||||||
Asset impairments and related charges | — | 18 | — | 18 | |||||||||||
Restructuring, severance and other charges | 448 | 562 | 818 | 617 | |||||||||||
Legal settlements | 54 | — | 203 | — | |||||||||||
Operating loss | (1,054 | ) | (1,146 | ) | (4,163 | ) | (667 | ) | |||||||
Other (income) expenses : | |||||||||||||||
Interest income | (21 | ) | (20 | ) | (74 | ) | (33 | ) | |||||||
Interest expense | 14 | 45 | 27 | 106 | |||||||||||
Other (income) expense, net | (1 | ) | 39 | (46 | ) | 11 | |||||||||
Loss before income taxes | (1,046 | ) | (1,210 | ) | (4,070 | ) | (751 | ) | |||||||
Income tax expense (benefit) | 81 | 100 | (714 | ) | (230 | ) | |||||||||
Loss from continuing operations | (1,127 | ) | (1,310 | ) | (3,356 | ) | (521 | ) | |||||||
Income from discontinued operations, net of taxes | — | 21,762 | — | 22,289 | |||||||||||
Net (loss) income | $ | (1,127 | ) | $ | 20,452 | $ | (3,356 | ) | $ | 21,768 | |||||
Weighted average shares outstanding - basic | 22,340 | 22,125 | 22,332 | 22,075 | |||||||||||
Net (loss) income per share – basic: | |||||||||||||||
Loss per share from continuing operations | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.02 | ) | |||
Income per share from discontinued operations | $ | — | $ | 0.98 | $ | — | $ | 1.01 | |||||||
Net (loss) income per share | $ | (0.05 | ) | $ | 0.92 | $ | (0.15 | ) | $ | 0.99 | |||||
Weighted average shares outstanding - diluted | 22,340 | 22,125 | 22,332 | 22,075 | |||||||||||
Net (loss) income per share – diluted: | |||||||||||||||
Loss per share from continuing operations | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.15 | ) | $ | (0.02 | ) | |||
Income per share from discontinued operations | $ | — | $ | 0.98 | $ | — | $ | 1.01 | |||||||
Net (loss) income per share | $ | (0.05 | ) | $ | 0.92 | $ | (0.15 | ) | $ | 0.99 |
(In thousands, except share data) | September 30, 2014 | March 31, 2014 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 67,168 | $ | 99,566 | |||
Marketable securities | 10,077 | — | |||||
Accounts receivable, net of allowance of $838 and $1,101, respectively | 23,519 | 23,615 | |||||
Inventories | 720 | 481 | |||||
Prepaid expenses | 2,901 | 3,300 | |||||
Other current assets | 585 | 2,892 | |||||
Total current assets | 104,970 | 129,854 | |||||
Property and equipment, net | 13,670 | 12,251 | |||||
Goodwill | 19,622 | 17,158 | |||||
Intangible assets, net | 9,985 | 10,626 | |||||
Software development costs, net | 24,498 | 17,221 | |||||
Other non-current assets | 3,851 | 3,785 | |||||
Total assets | $ | 176,596 | $ | 190,895 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 10,144 | $ | 11,073 | |||
Deferred revenue | 17,295 | 22,795 | |||||
Accrued liabilities | 9,555 | 14,232 | |||||
Capital lease obligations, current | 141 | 43 | |||||
Total current liabilities | 37,135 | 48,143 | |||||
Deferred income taxes, non-current | 3,444 | 3,422 | |||||
Capital lease obligations, non-current | 170 | 292 | |||||
Other non-current liabilities | 5,190 | 6,165 | |||||
Shareholders’ equity: | |||||||
Common shares, without par value, at $0.30 stated value; authorized 80,000,000 shares; 31,606,831 issued; and 22,814,241 and 22,467,970 shares outstanding at September 30, 2014 and March 31, 2014, respectively | 9,482 | 9,482 | |||||
Treasury shares (8,792,590 and 9,138,861 shares at September 30, 2014 and March 31, 2014, respectively) | (2,638 | ) | (2,741 | ) | |||
Capital in excess of stated value | (12,363 | ) | (13,409 | ) | |||
Retained earnings | 136,319 | 139,675 | |||||
Accumulated other comprehensive loss | (143 | ) | (134 | ) | |||
Total shareholders’ equity | 130,657 | 132,873 | |||||
Total liabilities and shareholders’ equity | $ | 176,596 | $ | 190,895 |
Six Months Ended | |||||||
(In thousands) | September 30, | ||||||
2014 | 2013 | ||||||
Operating activities: | |||||||
Net (loss) income | $ | (3,356 | ) | $ | 21,768 | ||
Less: Income from discontinued operations | — | 22,289 | |||||
Loss from continuing operations | (3,356 | ) | (521 | ) | |||
Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | |||||||
Restructuring, severance and other charges | 818 | 617 | |||||
Payments for restructuring, severance and other charges | (823 | ) | (896 | ) | |||
Legal settlements | 203 | — | |||||
Payments for legal settlements | (1,714 | ) | (87 | ) | |||
Asset impairments and related charges | — | 18 | |||||
Depreciation | 1,146 | 994 | |||||
Amortization | 2,987 | 1,576 | |||||
Share-based compensation | 1,067 | 882 | |||||
Excess tax benefit from equity awards | — | (139 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 104 | (1,572 | ) | ||||
Inventories | (237 | ) | 214 | ||||
Prepaids | 400 | (333 | ) | ||||
Accounts payable | (1,432 | ) | (1,032 | ) | |||
Deferred revenue | (5,503 | ) | (5,133 | ) | |||
Accrued liabilities | (2,255 | ) | (2,055 | ) | |||
Income taxes payable | (892 | ) | (539 | ) | |||
Other changes, net | (17 | ) | 339 | ||||
Net cash used in operating activities from continuing operations | (9,504 | ) | (7,667 | ) | |||
Net cash used in operating activities from discontinued operations | — | (1,011 | ) | ||||
Net cash used in operating activities | (9,504 | ) | (8,678 | ) | |||
Investing activities: | |||||||
Capital expenditures | (3,036 | ) | (2,425 | ) | |||
Capitalized software development costs | (7,974 | ) | (4,853 | ) | |||
Proceeds from sale of business units | 282 | 36,054 | |||||
Proceeds from company-owned life insurance policies, net | 1,969 | (4 | ) | ||||
Cash paid for acquisitions, net | (3,750 | ) | (1,750 | ) | |||
Return of investment in marketable securities | 119 | — | |||||
Investments in marketable securities | (10,240 | ) | — | ||||
Net cash (used) provided in investing activities from continuing operations | (22,630 | ) | 27,022 | ||||
Net cash (used) provided in investing activities from discontinued operations | — | (154 | ) | ||||
Net cash (used) provided in investing activities | (22,630 | ) | 26,868 | ||||
Financing activities: | |||||||
Repurchases of shares to satisfy employee tax withholding | (373 | ) | (777 | ) | |||
Exercise of employee stock options | 102 | 64 | |||||
Excess tax benefit from equity awards | — | 139 | |||||
Principal payment under long-term obligations | (23 | ) | (38 | ) | |||
Net cash used in financing activities from continuing operations | (294 | ) | (612 | ) | |||
Net cash used in financing activities from discontinued operations | — | (80 | ) | ||||
Net cash used in financing activities | (294 | ) | (692 | ) | |||
Effect of exchange rate changes on cash | 30 | 3 | |||||
Cash flows used in continuing operations | (32,398 | ) | 18,746 | ||||
Cash flows used in discontinued operations: | — | (1,245 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (32,398 | ) | 17,501 | ||||
Cash and cash equivalents at beginning of period | 99,566 | 82,931 | |||||
Cash and cash equivalents at end of period | $ | 67,168 | $ | 100,432 | |||
Less cash presented in current assets of discontinued operations on balance sheet | — | 678 | |||||
Cash and cash equivalents at end of period - continuing operations | $ | 67,168 | $ | 99,754 |
(In thousands, except per share data) | Three Months Ended | Six Months Ended | |||||||||||||
September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Operating loss | $ | (1,054 | ) | $ | (1,146 | ) | $ | (4,163 | ) | $ | (667 | ) | |||
Share-based compensation expense | 702 | 517 | 1,067 | 882 | |||||||||||
Amortization of intangibles | 594 | 794 | 2,377 | 1,588 | |||||||||||
Asset impairments and related charges | — | 18 | — | 18 | |||||||||||
Restructuring, severance and other charges | 448 | 562 | 818 | 617 | |||||||||||
Legal settlements | 54 | — | 203 | — | |||||||||||
Adjusted operating income from continuing operations (a) | 744 | 745 | 302 | 2,438 | |||||||||||
Other (income) expenses, net | (8 | ) | 64 | (93 | ) | 84 | |||||||||
Cash income tax expense (b) | 29 | — | 47 | 39 | |||||||||||
Adjusted income from continuing operations (a) | $ | 723 | $ | 681 | $ | 348 | $ | 2,315 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 22,340 | 22,125 | 22,332 | 22,075 | |||||||||||
Diluted | 22,340 | 22,125 | 22,332 | 22,075 | |||||||||||
Adjusted income per share from continuing operations (a): | |||||||||||||||
Basic | $ | 0.03 | $ | 0.03 | $ | 0.02 | $ | 0.10 | |||||||
Diluted | $ | 0.03 | $ | 0.03 | $ | 0.02 | $ | 0.10 | |||||||
(a) Non-GAAP financial measure | |||||||||||||||
(b) Taxes calculated based upon our estimated cash tax payments, exclusive of payments related to AMT, for the three and six months ended September 30, 2014 and 2013. | |||||||||||||||
Six Months Ended | |||||||
(In thousands) | September 30, | ||||||
2014 | 2013 | ||||||
Operating activities: | |||||||
Net cash used in operating activities from continuing operations | $ | (9,504 | ) | $ | (7,667 | ) | |
Non-recurring cash items: | |||||||
Payments for restructuring, severance and other charges | 823 | 896 | |||||
Payments for legal settlements | 1,714 | 87 | |||||
Adjusted cash used in continuing operations (a) | $ | (6,967 | ) | $ | (6,684 | ) | |
(a) Non-GAAP financial measure |
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