Momentum in the business yields 11% revenue increase in the quarter and
guidance indicating earnings improvement for fiscal 2013
ATLANTA—June 7, 2012—Agilysys, Inc. (Nasdaq: AGYS), a leading developer and marketer of proprietary enterprise software, services and solutions to the hospitality and retail industries, today announced unaudited financial results for the fiscal 2012 fourth quarter and full year ended March 31, 2012.
To align with the company’s strategic restructuring, revenue and cost of goods sold are now being reported in three categories: Products; Support, Maintenance and Subscription Services; and Professional Services. In addition, operating expenses are now differentiated in the following subcategories: product development, sales and marketing, and general and administrative. Finally, operating results from the company’s former Technology Solutions Group (TSG), including the gain on its sale, as well as its assets and liabilities, are reported as components of discontinued operations.
Summary Fiscal 2012 Fourth-Quarter Unaudited Financial Results From Continuing Operations
- Total net revenue grew 11% to $52.0 million, compared with $47.0 million in the same prior-year period.
- Restructuring and related charges were $5.3 million. Asset impairments and related charges reflecting the accelerated amortization of developed technology and related customer liabilities totaled $9.7 million.
- Loss from continuing operations was $18.0 million, or ($0.83) per share, versus the loss of $7.5 million, or ($0.33) per share for the same period in fiscal 2011.
- Net loss narrowed to $17.0 million, or ($0.78) per share, from the loss of $45.0 million, or ($1.98) per share, for the same period in fiscal 2011.
- Adjusted EBITDA (non-GAAP) from continuing operations for the period, which excludes interest, taxes, depreciation, amortization, the impact from revisions to prior-period financial statements and non-recurring charges, was a loss of $2.4 million, compared with a loss of $1.8 million a year ago. (See reconciliation below.)
- Adjusted net loss (non-GAAP) from continuing operations for the period, which excludes amortization of intangibles, stock compensation and non-recurring charges, was $3.7 million, or ($0.17) per share, compared with the adjusted net loss of $2.5 million, or ($0.11) per share, last year. (See reconciliation below.)
Summary Fiscal 2012 Full-Year Unaudited Financial Results From Continuing Operations
- Total net revenue for fiscal 2012 increased 3% to $208.9 million from $202.7 million in fiscal 2011. Reported revenue and gross profit in fiscal 2012 include a negative adjustment of $0.7 million and $1.3 million, respectively, related to periods prior to fiscal 2012.
- Loss from continuing operations was $34.2 million, or ($1.53) per share, compared with the loss of $23.0 million or ($1.01 per share) for fiscal 2011.
- Net loss narrowed to $22.8 million, or ($1.02) per share, from the loss of $55.5 million, or ($2.44) per share, last year.
- Adjusted EBITDA (non-GAAP) from continuing operations for the period, which excludes interest, taxes, depreciation, amortization, the impact from revisions to prior-period financial statements and non-recurring charges, was a loss of $4.6 million, compared with the loss of $10.2 million last year. (See reconciliation below.)
- Adjusted net loss (non-GAAP) from continuing operations for the period, which excludes amortization of intangibles, stock compensation and non-recurring charges, was $7.2 million, or ($0.32) per share, versus the previous year’s adjusted net loss of $14.2 million, or ($0.63) per share. (See reconciliation below.)
“During fiscal 2012, we successfully repositioned the company by divesting the lower-margin TSG business and focusing on our core competencies in the hospitality and retail industries,” stated President and CEO James Dennedy. “We have essentially completed the restructuring and have better aligned cost structure with continuing operations, implemented procedures to increase accountability and enhanced the corporate services team. At the same time, we returned capital to shareholders with the repurchase of 1.6 million shares during the year. Entering the new fiscal year, Agilysys is a leaner company with a flatter organizational structure and two solid growth platforms on which to build.”
Chief Financial Officer Robb Ellis commented, “Cash from continuing operations was very strong for the quarter and full year. Adjusted for non-recurring cash expenses related to restructuring and BEP/SERP payments, cash generated from continuing operations for fiscal 2012 increased to $16.2 million, compared with $4.6 million in cash used for continuing operations in the prior year.
“Despite using significant amounts of cash for share repurchases, restructuring charges and divesture expenses, the company’s financial condition and liquidity remain robust. We are debt free and held $97.6 million in cash and equivalents at year end, providing sufficient financial strength to execute our refined strategy.”
“As a result of the shift away from lower-margin hardware revenue,” Ellis added, “we anticipate less seasonality and overall volatility in future financial results. Moreover, with improved processes and procedures, our visibility into the business has been enhanced, allowing us to provide better and more detailed guidance.”
The company indicated that in fiscal 2013 it expects revenue to be between $208 million and $211 million. Adjusted operating income is expected to be in a range of $3.5 million to $4.5 million, reversing the $7.9 million adjusted operating loss in fiscal 2012. Full-year adjusted earnings per share are anticipated to improve from the $0.32 loss reported for fiscal 2012 to positive earnings per diluted share of between $0.16 and $0.21 in the current year.
Conference Call Information
A conference call will be held today, June 7, 2012, at 4:30 p.m. ET to review unaudited fourth-quarter and full-year fiscal 2012 results. To participate in the live call dial, 877-317-6789 (International: 412-317-6789) 10 minutes before the call begins, or 4:20 p.m. ET. The conference ID is 10014147. A slide deck will be the basis for the review. Both the slide deck and the conference call can be accessed via the Investor Relations section of www.agilysys.com. In addition, a replay of the call will be archived on the website for approximately 30 days.
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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. 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, 2011. 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.
Use 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 operating loss, adjusted EBITDA, adjusted net loss and adjusted cash flow from operations; and revenue, gross profit margin, operating loss and net loss, excluding prior-period adjustments. Management believes that such information can enhance investors' understanding of the company's ongoing operations. See the accompanying tables below for reconciliations of adjusted operating loss and adjusted net loss, adjusted EBITDA and adjusted cash flow from operations to the comparable GAAP measures.
Guidance figures are based on the Company’s current estimates and are subject to change by factors outside the Company’s control. While this guidance is provided to give investors insight into expectations for the period, actual results are likely to vary.
Agilysys is a leading developer and marketer of proprietary enterprise software, services and solutions to the hospitality and retail industries. The company specializes in market-leading point-of-sale, property management, inventory and procurement, and mobile and wireless solutions that are designed to streamline operations, improve efficiency and enhance the consumer’s experience. Agilysys serves casinos, resorts, hotels, foodservice venues, stadiums, cruise lines, grocery stores, convenience stores, general and specialty retail businesses and partners. Agilysys operates extensively throughout North America, with additional sales and support offices in the United Kingdom, Singapore and Hong Kong. For more information, visit www.agilysys.com.
CLICK HERE FOR FINANCIAL TABLES:
AGYS 20120607 4Q FY2012 Final.pdf
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Chief Financial Officer