GA – August 5, 2015 – Agilysys, Inc.
(Nasdaq: AGYS), a global provider of
next-generation hospitality software solutions and services, today
reported operating results for its fiscal 2016 first quarter.
click here for complete financial information)
Summary of Fiscal
2016 First Quarter Financial Results
- Total net revenue was $27.5 million, compared to total net revenue of $23.7 million in the comparable prior-year period.
- Recurring revenues (which are comprised of support, maintenance and subscription services) were $14.9 million, or 54% of total net revenue, compared to $13.8 million, or 58% of total net revenue, for the same period in fiscal 2015. SaaS revenues for the first quarter increased 23% year over year and comprised 15.5% of total recurring revenues, compared to 13.6% of total recurring revenues in the first quarter of fiscal 2015.
- Gross margin was 59.7% in the fiscal 2016 first quarter, compared to 61.8% in the prior-year period.
- Adjusted EBITDA (non-GAAP) was $1.2 million, compared to Adjusted EBITDA of $0.5 million in the same period last year (see reconciliation below).
- Net loss in the fiscal 2016 first quarter was $(0.2) million, or $(0.01) per diluted share, compared to a net loss $(2.2) million, or $(0.10) per diluted share, in the prior-year period.
James Dennedy, President and CEO of Agilysys, commented, “Our
solid start to fiscal 2016, including 16% year over year quarterly revenue
growth, which includes a 23% increase in subscription revenues, and an
improvement in adjusted EBITDA, indicates improved traction with our strategic
“The positive results in the quarter were driven by the compelling
value proposition of both our license and subscription solutions, as well as
the changes we have implemented in our sales and go to market approach. Our licensed and subscription offerings
include and are increasingly sold in multiple product solution sales. Demand for our licensed offerings, in
particular InfoGenesis, continues to grow and sales are now often complemented by
sales of available rGuest platform products, including rGuest Pay, rGuest Seat,
and rGuest Analyze. Demand for our
property management systems also remains strong and sales of these solutions
often similarly have an rGuest platform product in the solution sale. The momentum we are achieving following the
changes in our sales and go to market approach provide us with a high level of confidence
that we can consistently grow our market share in the gaming, hotels, resorts
and managed food services, while maintaining our share in the cruise and RUSH
(restaurants, universities, stadia and healthcare) hospitality verticals.”
Mr. Dennedy concluded, “We secured
agreements with a significant number of new customers across our portfolio of solutions
and hospitality verticals, completing sales to 45 new customers in the first quarter
which marks our third consecutive quarter of year-over-year double digit growth
in first-time customers. We continue to
focus on maintaining strong capital and operational discipline as we transform
our sales focus and organization to execute on high-value growth opportunities,
primarily focused on growing higher margin subscription revenue. In addition, we continue to evolve our
product portfolio to meet the current and future needs of hospitality operators
to help them improve recruitment, increase wallet share and strengthen the
connection with their guests. We believe
the trends for the industry are healthy and we are executing on our plan to consistently
strengthen our competitive advantages in the market place.”
Raises Fiscal 2016
Agilysys today provided an update to its
forecast for fiscal 2016 revenue and Adjusted EBITDA (non-GAAP) originally
provided on May 28, 2015. The outlook
for fiscal 2016 now contemplates full-year revenue of $106 - $108 million which
is a moderately higher expectation for year over year revenue growth compared
to previous expectations of revenue to be slightly above fiscal 2015 revenue of
$103.5 million. The Company expects that
its now higher revenue forecast will similarly translate to its expectation for
higher Adjusted EBITDA compared to fiscal 2015 Adjusted EBITDA of $1.2
million. The Company continues to expect
that gross margin for fiscal 2016 will be consistent with full year fiscal 2015
levels in the high 50% range.
Janine Seebeck, Chief
Financial Officer, commented, “Our first quarter results demonstrate our
success with key initiatives, including growing recurring revenue - in
particular higher margin subscription revenues - as well as new customer business,
which more than doubled compared to the prior year. We are also making consistent progress with
our priority to prudently manage working capital as we focus on optimizing
operating cash flows. Throughout the
balance of the year, we will continue to strategically leverage our healthy
balance sheet, which includes approximately $66 million in cash and cash
equivalents, to invest in the development of new products and expect to end
fiscal 2016 with over $50 million in cash and cash equivalents. As our next-generation product development
investment cycle nears its completion later this year, we expect to generate
positive free cash flow for fiscal 2017 as we also benefit from growth in
subscription services bookings. Overall,
we are pleased with the improvement across our business in the first quarter
and with this solid start to the year, we now expect to deliver moderately
higher year-over-year growth in revenue and Adjusted EBITDA in fiscal 2016 as compared
to our earlier expectations for year-over-year improvements.”
Quarter Conference Call and Webcast
Agilysys is hosting a conference call and
webcast today, August 5, 2015, beginning at 9:00 a.m. ET. Both the call and the webcast are open to the
public. The conference call number is 224-357-2393
(domestic or international); and the conference ID number is 78771089. Please call five minutes prior to the
presentation to ensure that you are connected.
Interested parties may also access the
conference call live on the Internet at
http://www.agilysys.com/company/investor-relations/events-presentations. Approximately two hours after the call has
concluded, an archived version of the webcast will be available for replay at
the same location.
This press release and other publicly
available documents, including the documents incorporated herein and therein by
reference, contain, and our officers and representatives may from time to time
make, "forward-looking statements" within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be
identified by words such as "anticipate," "intend,"
"plan," "goal," "seek," "believe,"
"project," "estimate," "expect," "strategy,"
"future," "likely," "may," "should,"
"will" and similar references to future periods, and include the
statements under the heading “Summary of Fiscal 2016 First Quarter Financial
Results” above in the last sentence of the third paragraph following the bullets,
and the statements under the heading “Raises Fiscal 2016 Outlook.” These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult
to predict. These statements are based on management’s current expectations,
intentions or beliefs and are subject to a number of factors, assumptions and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. Factors that could cause or
contribute to such differences or that might otherwise impact the business
include the risk factors set forth in Item 1A of the company’s Annual Report
for the fiscal year ended March 31, 2015, and
Item 1A of the company’s Quarterly Report for the fiscal quarter ended June 30,
2015. Copies are available from the SEC or the Agilysys website. We undertake
no obligation to update any such factor or to publicly announce the results of
any revisions to any forward-looking statements contained herein whether as a
result of new information, future events or otherwise.
of Non-GAAP Financial Information
To supplement the unaudited condensed
consolidated financial statements presented in accordance with U.S. GAAP in
this press release, certain non-GAAP financial measures as defined by the SEC
rules are used. These non-GAAP financial measures include adjusted cash flow
from operations and adjusted EBITDA. Management believes that such information
can enhance investors' understanding of the company's ongoing operations. See
the accompanying tables below for reconciliations of adjusted cash flow from
operations and adjusted EBITDA to the comparable GAAP measures.
Agilysys is a leading technology company
that provides innovative point-of-sale, property management, inventory and procurement,
workforce management, analytics, document management and mobile and wireless
solutions and services to the hospitality industry. The company's solutions and
services allow property managers to better connect, interact and transact with
their customers by streamlining operations, improving efficiency, increasing
guest recruitment and wallet share, and enhancing the guest
experience. Agilysys serves four major market sectors: Gaming, both
corporate and tribal; Hotels, Resorts and Cruise; Foodservice Management; and
Restaurants, Universities, Stadia and Healthcare. A significant portion of the
company's consolidated revenue is derived from contract support, maintenance
and subscription services. Agilysys operates throughout North America, Europe and
Asia, with corporate services located in Alpharetta, GA, and offices in
Singapore, Hong Kong and Malaysia. For more information, visit www.agilysys.com.
Chief Financial Officer
770-810-7800 or firstname.lastname@example.org
Richard Land, Norberto Aja, Jim Leahy