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 February 4, 2015, announcing its results for the third quarter and period ended December 31, 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 February 4, 2015, announcing its results for the third quarter and period ended December 31, 2014. |
• | Total net revenue was $24.7 million, compared to total net revenue of $25.0 million in the comparable prior-year period. |
• | Recurring revenues (which are comprised of support, maintenance and subscription services) were $13.9 million for the quarter, an increase of 5% over the same period in fiscal 2014. |
• | Gross margin was 57% in the fiscal 2015 third quarter, compared to 61% in the prior-year period. |
• | Adjusted operating loss (non-GAAP) from continuing operations (excluding stock-based compensation, amortization of intangibles and other one-time items) was $(1.2) million, compared to adjusted operating income from continuing operations in the year-ago period of $0.6 million (see reconciliation below). |
• | Adjusted loss (non-GAAP) from continuing operations was $(1.3) million, or $(0.06) per diluted share, compared to adjusted income from continuing operations of $0.7 million, or $0.03 per diluted share, in the same period last year (see reconciliation below). |
• | Net loss in the period was $(2.7) million, or $(0.12) per diluted share, compared to a net loss of $(2.7) million, or $(0.12) per diluted share, in the prior-year period, which included a net loss from discontinued operations of $(1.0) million, or $(0.04) per diluted share. |
• | Total net revenue for the period increased $1.3 million, or 2%, to $74.8 million, compared with $73.5 million in the comparable prior-year period. |
• | Recurring revenues (which are comprised of support, maintenance and subscription services) were $41.5 million for the period, an increase of 6% over the first nine months of fiscal 2014. |
• | Gross margin of 61%, compares to gross margin of 64% in the prior-year period. |
• | Adjusted operating loss (non-GAAP) from continuing operations (excluding stock-based compensation, amortization of intangibles and other one-time items) for the first nine months of fiscal 2015 was $(0.9) million, compared to adjusted operating income from continuing operations of $3.0 million in the comparable year-ago period (see reconciliation below). |
• | Adjusted loss (non-GAAP) from continuing operations was $(0.9) million, or $(0.04) per diluted share, compared with adjusted income of $3.0 million, or $0.14 per diluted share, in the first nine months of fiscal 2014 (see reconciliation below). |
• | Net loss in the first nine months of fiscal 2015 was $(6.1) million, or $(0.27) per diluted share, compared with net income of $19.1 million, or $0.87 per diluted share, in the first nine months of fiscal 2014, which included net income from discontinued operations of $21.3 million, or $0.97 per diluted share. |
(In thousands, except per share data) | Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net revenue: | |||||||||||||||
Products | $ | 7,247 | $ | 8,128 | $ | 20,948 | $ | 24,219 | |||||||
Support, maintenance and subscription services | 13,920 | 13,284 | 41,514 | 39,039 | |||||||||||
Professional services | 3,575 | 3,553 | 12,344 | 10,253 | |||||||||||
Total net revenue | 24,742 | 24,965 | 74,806 | 73,511 | |||||||||||
Cost of goods sold: | |||||||||||||||
Products | 4,413 | 4,331 | 11,414 | 11,239 | |||||||||||
Support, maintenance and subscription services | 3,006 | 3,069 | 9,098 | 7,916 | |||||||||||
Professional services | 3,194 | 2,410 | 8,823 | 6,976 | |||||||||||
Total cost of goods sold | 10,613 | 9,810 | 29,335 | 26,131 | |||||||||||
Gross profit | 14,129 | 15,155 | 45,471 | 47,380 | |||||||||||
Operating expenses: | |||||||||||||||
Product development | 6,670 | 5,772 | 18,726 | 18,718 | |||||||||||
Sales and marketing | 3,696 | 3,108 | 11,407 | 10,143 | |||||||||||
General and administrative | 5,175 | 5,786 | 16,369 | 15,480 | |||||||||||
Depreciation of fixed assets | 556 | 577 | 1,702 | 1,571 | |||||||||||
Amortization of intangibles | 617 | 2,365 | 2,994 | 3,953 | |||||||||||
Asset impairments and related charges | — | 309 | — | 327 | |||||||||||
Restructuring, severance and other charges | 95 | 206 | 913 | 823 | |||||||||||
Legal settlements | — | — | 203 | — | |||||||||||
Operating loss | (2,680 | ) | (2,968 | ) | (6,843 | ) | (3,635 | ) | |||||||
Other expenses (income): | |||||||||||||||
Interest income | (24 | ) | (19 | ) | (98 | ) | (52 | ) | |||||||
Interest expense | 7 | 44 | 35 | 150 | |||||||||||
Other expenses (income), net | 114 | (228 | ) | 68 | (217 | ) | |||||||||
Loss before income taxes | (2,777 | ) | (2,765 | ) | (6,848 | ) | (3,516 | ) | |||||||
Income tax benefit | (62 | ) | (1,054 | ) | (777 | ) | (1,284 | ) | |||||||
Loss from continuing operations | (2,715 | ) | (1,711 | ) | (6,071 | ) | (2,232 | ) | |||||||
Income (loss) from discontinued operations, net of taxes | — | (952 | ) | — | 21,338 | ||||||||||
Net (loss) income | $ | (2,715 | ) | $ | (2,663 | ) | $ | (6,071 | ) | $ | 19,106 | ||||
Weighted average shares outstanding - basic | 22,343 | 22,150 | 22,336 | 22,100 | |||||||||||
Net (loss) income per share – basic: | |||||||||||||||
Loss per share from continuing operations | $ | (0.12 | ) | $ | (0.08 | ) | $ | (0.27 | ) | $ | (0.10 | ) | |||
Income per share from discontinued operations | $ | — | $ | (0.04 | ) | $ | — | $ | 0.97 | ||||||
Net (loss) income per share | $ | (0.12 | ) | $ | (0.12 | ) | $ | (0.27 | ) | $ | 0.87 | ||||
Weighted average shares outstanding - diluted | 22,343 | 22,150 | 22,336 | 22,100 | |||||||||||
Net (loss) income per share – diluted: | |||||||||||||||
Loss per share from continuing operations | $ | (0.12 | ) | $ | (0.08 | ) | $ | (0.27 | ) | $ | (0.10 | ) | |||
Income per share from discontinued operations | $ | — | $ | (0.04 | ) | $ | — | $ | 0.97 | ||||||
Net (loss) income per share | $ | (0.12 | ) | $ | (0.12 | ) | $ | (0.27 | ) | $ | 0.87 |
(In thousands, except share data) | December 31, 2014 | March 31, 2014 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 69,109 | $ | 99,566 | |||
Marketable securities | 5,015 | — | |||||
Accounts receivable, net of allowance of $726 and $1,101, respectively | 21,248 | 23,615 | |||||
Inventories | 643 | 481 | |||||
Prepaid expenses | 2,969 | 3,300 | |||||
Other current assets | 102 | 2,892 | |||||
Total current assets | 99,086 | 129,854 | |||||
Property and equipment, net | 13,743 | 12,251 | |||||
Goodwill | 19,622 | 17,158 | |||||
Intangible assets, net | 9,699 | 10,626 | |||||
Software development costs, net | 28,511 | 17,221 | |||||
Other non-current assets | 3,956 | 3,785 | |||||
Total assets | $ | 174,617 | $ | 190,895 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 10,333 | $ | 11,073 | |||
Deferred revenue | 18,226 | 22,795 | |||||
Accrued liabilities | 8,689 | 14,232 | |||||
Capital lease obligations, current | 141 | 43 | |||||
Total current liabilities | 37,389 | 48,143 | |||||
Deferred income taxes, non-current | 3,306 | 3,422 | |||||
Capital lease obligations, non-current | 161 | 292 | |||||
Other non-current liabilities | 5,052 | 6,165 | |||||
Shareholders’ equity: | |||||||
Common shares, without par value, at $0.30 stated value; authorized 80,000,000 shares; 31,606,831 issued; and 22,822,554 and 22,467,970 shares outstanding at December 31, 2014 and March 31, 2014, respectively | 9,482 | 9,482 | |||||
Treasury shares (8,784,277 and 9,138,861 shares at December 31, 2014 and March 31, 2014, respectively) | (2,636 | ) | (2,741 | ) | |||
Capital in excess of stated value | (11,590 | ) | (13,409 | ) | |||
Retained earnings | 133,603 | 139,675 | |||||
Accumulated other comprehensive loss | (150 | ) | (134 | ) | |||
Total shareholders’ equity | 128,709 | 132,873 | |||||
Total liabilities and shareholders’ equity | $ | 174,617 | $ | 190,895 |
Nine Months Ended | |||||||
(In thousands) | December 31, | ||||||
2014 | 2013 | ||||||
Operating activities: | |||||||
Net (loss) income | $ | (6,071 | ) | $ | 19,106 | ||
Less: Income from discontinued operations | — | (21,338 | ) | ||||
Loss from continuing operations | (6,071 | ) | (2,232 | ) | |||
Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | |||||||
Restructuring, severance and other charges | 913 | 822 | |||||
Payments for restructuring, severance and other charges | (1,189 | ) | (1,530 | ) | |||
Legal settlements | 203 | — | |||||
Payments for legal settlements | (1,714 | ) | (87 | ) | |||
Asset impairments and related charges | — | 327 | |||||
Loss on sale of property & equipment | 1 | 50 | |||||
Depreciation | 1,702 | 1,571 | |||||
Amortization | 3,939 | 4,053 | |||||
Share-based compensation | 1,828 | 1,524 | |||||
Deferred income taxes | (86 | ) | 2 | ||||
Change in cash surrender value of company owned life insurance policies | (25 | ) | 6 | ||||
Excess tax benefit from equity awards | (14 | ) | (209 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 2,342 | (5,955 | ) | ||||
Inventories | (170 | ) | (221 | ) | |||
Prepaid expense | 325 | (574 | ) | ||||
Accounts payable | (55 | ) | 585 | ||||
Deferred revenue | (4,535 | ) | (2,075 | ) | |||
Accrued liabilities | (3,841 | ) | (1,493 | ) | |||
Income taxes payable | (817 | ) | (1,641 | ) | |||
Other changes, net | (205 | ) | (37 | ) | |||
Net cash used in operating activities from continuing operations | (7,469 | ) | (7,114 | ) | |||
Net cash used in operating activities from discontinued operations | — | (1,407 | ) | ||||
Net cash used in operating activities | (7,469 | ) | (8,521 | ) | |||
Investing activities: | |||||||
Proceeds from sale of business units | 809 | 36,024 | |||||
Cash paid for acquisition, net | (3,750 | ) | (1,801 | ) | |||
Investments in marketable securities | (10,240 | ) | — | ||||
Proceeds from sale and maturity of marketable securities | 5,107 | — | |||||
Capital expenditures | (3,856 | ) | (3,208 | ) | |||
Capitalized software development costs | (12,540 | ) | (8,233 | ) | |||
Additional (investments in) proceeds from corporate-owned life insurance policies | 1,925 | (87 | ) | ||||
Net cash (used in) provided by investing activities from continuing operations | (22,545 | ) | 22,695 | ||||
Net cash (used in) provided by in investing activities from discontinued operations | — | (158 | ) | ||||
Net cash (used in) provided by in investing activities | (22,545 | ) | 22,537 | ||||
Financing activities: | |||||||
Repurchases of shares to satisfy employee tax withholding | (373 | ) | (729 | ) | |||
Exercise of employee stock options | 102 | 64 | |||||
Excess tax benefit from equity awards | 14 | 209 | |||||
Principal payment under long-term obligations | (32 | ) | (53 | ) | |||
Net cash used in financing activities from continuing operations | (289 | ) | (509 | ) | |||
Net cash used in financing activities from discontinued operations | — | (80 | ) | ||||
Net cash used in financing activities | (289 | ) | (589 | ) | |||
Effect of exchange rate changes on cash | (154 | ) | (1 | ) | |||
Cash flows (used in) provided by continuing operations | (30,457 | ) | 15,071 | ||||
Cash flows used in discontinued operations: | — | (1,645 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (30,457 | ) | 13,426 | ||||
Cash and cash equivalents at beginning of period | 99,566 | 82,931 | |||||
Cash and cash equivalents at end of period | $ | 69,109 | $ | 96,357 |
(In thousands, except per share data) | Three Months Ended | Nine Months Ended | |||||||||||||
December 31, | December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Operating loss | $ | (2,680 | ) | $ | (2,968 | ) | $ | (6,843 | ) | $ | (3,635 | ) | |||
Share-based compensation expense | 761 | 643 | 1,828 | 1,524 | |||||||||||
Amortization of intangibles | 617 | 2,365 | 2,994 | 3,953 | |||||||||||
Asset impairments and related charges | — | 309 | — | 327 | |||||||||||
Restructuring, severance and other charges | 95 | 206 | 913 | 823 | |||||||||||
Legal settlements | — | — | 203 | — | |||||||||||
Adjusted operating (loss) income from continuing operations (a) | (1,207 | ) | 555 | (905 | ) | 2,992 | |||||||||
Other expenses (income), net | 97 | (203 | ) | 5 | (119 | ) | |||||||||
Cash income tax expense (b) | 18 | 51 | 39 | 110 | |||||||||||
Adjusted (loss) income from continuing operations (a) | $ | (1,322 | ) | $ | 707 | $ | (949 | ) | $ | 3,001 | |||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 22,343 | 22,150 | 22,336 | 22,100 | |||||||||||
Diluted | 22,343 | 22,150 | 22,336 | 22,100 | |||||||||||
Adjusted (loss) income per share from continuing operations (a): | |||||||||||||||
Basic | $ | (0.06 | ) | $ | 0.03 | $ | (0.04 | ) | $ | 0.14 | |||||
Diluted | $ | (0.06 | ) | $ | 0.03 | $ | (0.04 | ) | $ | 0.14 | |||||
(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 nine months ended December 31, 2014 and 2013. | |||||||||||||||
Nine Months Ended | |||||||
(In thousands) | December 31, | ||||||
2014 | 2013 | ||||||
Operating activities: | |||||||
Net cash used in operating activities from continuing operations | $ | (7,469 | ) | $ | (7,114 | ) | |
Non-recurring cash items: | |||||||
Payments for restructuring, severance and other charges | 1,189 | 1,530 | |||||
Payments for legal settlements | 1,714 | 87 | |||||
Adjusted cash used in continuing operations (a) | $ | (4,566 | ) | $ | (5,497 | ) | |
(a) Non-GAAP financial measure |
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