Agilysys Amends Unaudited Fiscal 2010 Third-Quarter and Nine-Month Results
CLEVELAND, Feb. 8 /PRNewswire-FirstCall/ -- Agilysys, Inc. (Nasdaq: AGYS), a leading provider of innovative IT solutions, today announced that it has amended its unaudited financial results for the fiscal 2010 third quarter and nine months ended December 31, 2009, which were previously published in a press release on February 3, 2010.
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Revenues, gross profit, and operating income were revised lower for both the fiscal 2010 third quarter and nine months ended Dec. 31, 2009 periods by $1.4 million due to remarketed services in the Technology Solutions Group business. Revenue was adjusted to $219.0 million from $220.4 million for the third quarter and $504.6 million from $506.0 million for the nine-month fiscal 2010 period. Operating income was adjusted to $8.5 million from $9.9 million for the quarter and break-even from $1.4 million for the nine-months.
Net income from continuing operations was adjusted by $1.3 million to $13.6 million from $14.9 million for the quarter and $4.0 million from $5.3 million for the nine-month period. Diluted earnings per share for the quarter were $0.59, and $0.18 for the nine-months. Complete financial statements are included at the end of this press release and in the Company's form 10-Q filed this morning with the SEC.
Forward-Looking Language
This release contains certain management expectations, which may constitute forward-looking information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Reform Act of 1995. Forward-looking information speaks only as to the date of this presentation and may be identified by use of words such as "may," "will," "believes," "anticipates," "plans," "expects," "estimates," "projects," "targets," "forecasts," "continues," "seeks," or the negative of those terms or similar expressions. Many important factors could cause actual results to be materially different from those in forward-looking information including, without limitation, competitive factors, disruption of supplies, changes in market conditions, pending or future claims or litigation, or technology advances. No assurances can be provided as to the outcome of cost reductions, business strategies, future financial results, unanticipated downturns to our relationships with customers, and macroeconomic demand for IT products and services, unanticipated difficulties integrating acquisitions, new laws and government regulations, interest rate changes, and unanticipated deterioration in economic and financial conditions in the United States and around the world or the consequences if the shareholders either approve or fail to approve the proposed Control Share Acquisition by MAK Capital announced on November 20, 2009. We do not undertake to update or revise any forward-looking information even if events make it clear that any projected results, actions, or impact, express or implied, will not be realized.
Other potential risks and uncertainties that may cause actual results to be materially different from those in forward-looking information are described in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC), under Item 1A, "Risk Factors." Copies are available from the SEC or the Agilysys website.
Use of Non-GAAP Financial Information
To supplement the unaudited condensed consolidated financial statements presented in accordance with U.S. GAAP in this release, certain non-GAAP financial measures as defined by the SEC rules are used. Management believes that such information can enhance investors' understanding of the Company's ongoing operations and is a measure used in the Company's debt agreement. The non-GAAP measures included in this release have been reconciled to the comparable GAAP measures within an accompanying table, shown on the last page of this release.
About Agilysys, Inc.
Agilysys is a leading provider of innovative IT solutions to corporate and public-sector customers, with special expertise in select markets, including retail and hospitality. The company uses technology -- including hardware, software and services -- to help customers resolve their most complicated IT needs. The company possesses expertise in enterprise architecture and high availability, infrastructure optimization, storage and resource management, identity management and business continuity; and provides industry-specific software, services and expertise to the retail and hospitality markets. Headquartered in Cleveland, Agilysys operates extensively throughout North America, with additional sales and support offices in the United Kingdom, Singapore and Hong Kong.
News releases and other information on Agilysys are available on the Internet at: http://www.agilysys.com.
-FINANCIAL RESULTS FOLLOW-
Investor Contact: |
|
Curtis Stout |
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Vice President and Treasurer |
|
Agilysys, Inc. |
|
440-519-8635 |
|
Media Contact: |
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Maureen Morreale |
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Senior Communications Manager |
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Agilysys, Inc. |
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440-519-8161 |
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AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands,
except share and
per share data) Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Net sales:
Products $185,509 $169,260 $416,743 $430,692
Services 33,490 54,816 87,857 144,573
------ ------ ------ -------
Total net sales 218,999 224,076 504,600 575,265
Cost of goods sold:
Products 156,067 146,952 340,986 359,119
Services 12,956 18,102 37,914 59,994
------ ------ ------ ------
Total cost of goods sold 169,023 165,054 378,900 419,113
------- ------- ------- -------
Gross margin 49,976 59,022 125,700 156,152
Selling, general and
administrative expenses 40,542 47,556 124,686 155,391
Asset impairment charges 238 - 238 145,643
Restructuring charges 677 13,357 745 36,930
--- ------ --- ------
Operating income (loss) 8,519 (1,891) 31 (181,812)
Other (income) expense :
Other (income)
expense, net (4,921) 1,175 (5,311) 695
Interest income - (59) (9) (521)
Interest expense 246 638 673 1,090
--- --- --- -----
Income (loss)
before income taxes 13,194 (3,645) 4,678 (183,076)
Income tax
(benefit) expense (410) (1,402) 593 (15,481)
---- ------ --- -------
Income (loss) from
continuing operations 13,604 (2,243) 4,085 (167,595)
Income (loss) from
discontinued operations 3 (1,477) (38) (2,751)
- ------ --- ------
Net income (loss) $13,607 $(3,720) $4,047 $(170,346)
======= ======= ====== =========
Income (loss) per share – basic
Income (loss) from
continuing operations $0.60 $(0.10) $0.18 $(7.42)
Loss from discontinued
operations 0.00 (0.07) (0.00) (0.12)
---- ----- ----- -----
Net income (loss) $0.60 $(0.17) $0.18 $(7.54)
===== ====== ===== ======
Income (loss) per share – diluted
Income (loss) from
continuing operations $0.59 $(0.10) $0.18 $(7.42)
Loss from discontinued
operations 0.00 (0.07) (0.00) (0.12)
---- ----- ----- -----
Net income (loss) $0.59 $(0.17) $0.18 $(7.54)
===== ====== ===== ======
Weighted average shares outstanding
Basic 22,624,622 22,603,641 22,625,866 22,580,726
Diluted 23,170,992 22,603,641 23,010,272 22,580,726
Cash dividends per share $- $0.03 $0.06 $0.09
AGILYSYS, INC.
BUSINESS SEGMENT INFORMATION (Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
(in thousands) 2009 2008 2009 2008
---- ---- ---- ----
Hospitality (HSG)
Total revenue $23,329 $27,911 $63,715 $76,153
Elimination of intersegment
revenue (833) - (1,890) (82)
------- ------- ------- -------
Revenue from external
customers $22,496 $27,911 $61,825 $76,071
======= ======= ======= =======
Gross margin $14,312 $15,074 $38,089 $43,920
======= ======= ======= =======
63.6% 54.0% 61.6% 57.7%
Depreciation and
amortization $1,081 $1,551 $3,308 $4,737
Operating income (loss) 4,108 3,166 6,203 (105,598)
------- ------- ------- -------
Adjusted EBITDA $5,189 $4,717 $9,511 $(100,861)
======= ======= ======= =======
Asset Impairment $90 $- $90 $110,851
Retail (RSG)
Total revenue $37,753 $34,793 $85,696 $102,497
Elimination of intersegment
revenue (43) (3) (63) (319)
------- ------- ------- -------
Revenue from external
customers $37,710 $34,790 $85,633 $102,178
======= ======= ======= =======
Gross margin $7,416 $8,937 $17,486 $23,431
======= ======= ======= =======
19.7% 25.7% 20.4% 22.9%
Depreciation and
amortization $49 $16 $143 $157
Operating income (loss) 2,925 4,229 5,688 (16,085)
------- ------- ------- -------
Adjusted EBITDA $2,974 $4,245 $5,831 $(15,928)
======= ======= ======= =======
Asset Impairment $- $- $- $24,910
Technology (TSG)
Total revenue $161,072 $161,451 $359,465 $400,199
Elimination of intersegment
revenue (2,279) (76) (2,323) (3,183)
------- ------- ------- -------
Revenue from external
customers $158,793 $161,375 $357,142 $397,016
======= ======= ======= =======
Gross margin $28,248 $33,765 $70,887 $85,210
======= ======= ======= =======
17.8% 20.9% 19.8% 21.5%
Depreciation and
amortization $811 $4,067 $5,579 $12,547
Operating income (loss) 8,295 11,817 12,081 (14,496)
------- ------- ------- -------
Adjusted EBITDA $9,106 $15,884 $17,660 $(1,949)
======= ======= ======= =======
Asset Impairment $- $- $- $9,882
Restructuring charge $- $- $- $23,573
Corporate / Other
Gross margin $- $1,246 $(762) $3,591
== ====== ===== ======
Depreciation and
amortization (a) $1,201 $1,048 $3,610 $3,200
Operating loss (6,809) (21,103) (23,941) (45,633)
------ ------- ------- -------
Adjusted EBITDA $(5,608) $(20,055) $(20,331) $(42,433)
======= ======== ======== ========
Asset Impairment $148 $- $148 $-
Restructuring charge $677 $13,357 $745 $13,357
Consolidated
Total revenue $222,154 $224,155 $508,876 $578,849
Elimination of
intersegment revenue (3,155) (79) (4,276) (3,584)
------ --- ------ ------
Revenue from external
customers $218,999 $224,076 $504,600 $575,265
======== ======== ======== ========
Gross margin $49,976 $59,022 $125,700 $156,152
======= ======= ======== ========
22.8% 26.3% 24.9% 27.1%
Depreciation and
amortization (a) $3,142 $6,682 $12,640 $20,641
Operating income (loss) 8,519 (1,891) 31 (181,812)
----- ------ -- --------
Adjusted EBITDA $11,661 $4,791 $12,671 $(161,171)
======= ====== ======= =========
Asset Impairment $238 $- $238 $145,643
Restructuring charge $677 $13,357 $745 $36,930
(a) Does not include the amortization of deferred financing fees
totaling $126 and $471 for the three months ended December
31, 2009 and 2008, respectively, and $346 and $584 for the
nine months ended December 31, 2009 and 2008, respectively, which
related to the Corporate and Other segment.
AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
December 31, March 31,
(In thousands, except share data) 2009 2009
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $24,435 $36,244
Accounts receivable, net 182,566 151,944
Inventories, net 25,138 27,216
Deferred income taxes - current, net 4,930 6,836
Prepaid expenses and other current assets 7,782 4,564
Income taxes receivable 6,171 3,871
Assets of discontinued operations – current 282 1,075
--- -----
Total current assets 251,304 231,750
Goodwill 50,612 50,382
Intangible assets, net 32,717 36,659
Deferred income taxes - non-current, net - 511
Other non-current assets 18,243 29,008
Assets of discontinued operations – non-current - 56
Property and equipment, net 27,067 26,070
------ ------
Total assets $379,943 $374,436
======== ========
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $122,699 $28,042
Floor plan financing - 74,159
Deferred revenue 14,397 18,709
Accrued liabilities 23,902 37,807
Long-term debt - current 199 238
Liabilities of discontinued operations - current 569 1,176
--- -----
Total current liabilities 161,766 160,131
Deferred income taxes - non-current, net 260 -
Other non-current liabilities 19,428 21,588
Shareholders’ equity:
Common shares, without par value, at
$0.30 stated value; authorized
80,000,000 shares; 31,606,831 shares
issued and 23,031,119 shares outstanding
at December 31, 2009 9,370 9,366
Treasury stock (8,510,712 and 8,896,778
shares at December 31, 2009 and March
31, 2009, respectively) (2,670) (2,670)
Capital in excess of stated value (9,298) (11,036)
Retained earnings 202,634 199,947
Accumulated other comprehensive loss (1,547) (2,890)
------ ------
Total shareholders’ equity 198,489 192,717
------- -------
Total liabilities and shareholders’
equity $379,943 $374,436
======== ========
AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended
(In thousands) December 31,
------------
2009 2008
---- ----
Operating activities:
Net income (loss) $4,047 $(170,346)
Add: Loss from discontinued operations 38 2,751
-- -----
Income (loss) from continuing operations 4,085 (167,595)
Adjustments to reconcile net income (loss) from
continuing operations to net cash provided by
(used for) operating activities (net of effects
from business acquisitions):
Impairment of property and equipment 238 -
Impairment of investment in The Reserve
Fund's Primary Fund - 1,087
Impairment of goodwill and intangible assets - 166,223
Gain on redemption of cost basis investment - (56)
Gain on investment in The Reserve Fund's
Primary Fund (2,505) -
Loss on the sale of securities 91 -
Depreciation 2,859 2,863
Amortization 10,127 18,362
Deferred income taxes 2,724 (20,087)
Stock based compensation 1,709 825
Changes in working capital:
Accounts receivable (30,622) (4,849)
Inventories 2,078 (31)
Accounts payable 95,024 (90,739)
Accrued and other liabilities (20,442) (29,404)
Income taxes (receivable) payable (5,322) 1,359
Other changes, net 12 (823)
Other non-cash adjustments (1,128) 701
------ ---
Total adjustments 54,843 45,431
------ ------
Net cash provided by (used for) operating activities 58,928 (122,164)
Investing activities:
Proceeds from (claim on) The Reserve Fund’s
Primary Fund 2,337 (7,657)
Proceeds from the redemption of cost basis
investment - 9,513
Proceeds from borrowings against company-owned
life insurance policies 12,500 -
Change in cash surrender value of company owned
life insurance policies (159) (155)
Acquisition of businesses, net of cash acquired - (2,381)
Purchase of property and equipment (9,672) (4,335)
------ ------
Net cash provided by (used for) investing activities 5,006 (5,015)
Financing activities:
Floor plan financing agreement, net (74,159) 131,323
Proceeds from borrowings under credit facility 5,000 -
Principal payments under credit facility (5,000) -
Principal payment under long term obligations (258) (71)
Issuance of common shares 33 -
Debt financing costs (1,520) -
Dividends paid (1,360) (2,038)
------ ------
Net cash (used for) provided by financing activities (77,264) 129,214
Effect of exchange rate changes on cash 1,317 (69)
----- ---
Cash flows (used for) provided by continuing
operations (12,013) 1,966
Cash flows of discontinued operations:
Operating cash flows 204 510
Investing cash flows - -
- -
Net (decrease) increase in cash (11,809) 2,476
Cash at beginning of period 36,244 69,935
------ ------
Cash at end of period $24,435 $72,411
======= =======
AGILYSYS, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (Unaudited)
(In thousands) Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Net income (loss) $13,607 $(3,720) $4,047 $(170,346)
Plus:
Interest expense, net 246 579 664 569
Other income, net (4,921) 1,175 (5,311) 695
Income tax (benefit)
expense (410) (1,402) 593 (15,481)
Depreciation and
amortization expense (a) 3,142 6,682 12,640 20,641
(Income) loss from
discontinued
operations, net of tax (3) 1,477 38 2,751
-- ----- -- -----
Adjusted EBITDA 11,661 4,791 12,671 (161,171)
Asset impairment
charges 238 - 238 145,643
Restructuring
charges 677 13,357 745 36,930
--- ------ --- ------
Adjusted EBITDA excluding
asset impairment and
restructuring charges $12,576 $18,148 $13,654 $21,402
======= ======= ======= =======
(a) Depreciation and amortization expense excludes amortization of
deferred financing fees totaling $126 and $471 for the three
months ended December 31, 2009 and 2008, respectively, and $346 and
$584 for the nine months ended December 31, 2009 and 2008,
respectively, as such costs are already included in interest expense,
net.
SOURCE Agilysys, Inc.
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