AGYS Agilysys Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 13, 2024

AGILYSYS, INC.

(Exact name of Registrant as Specified in Its Charter)

Delaware	000-5734	34-0907152
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
3655 Brookside Parkway, Suite 300 Alpharetta, Georgia		30022
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (770) 810-7800

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, without par value		AGYS		Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 2.02 Results of Operations and Financial Condition.

On May 13, 2024, Agilysys, Inc. issued a press release announcing its results for fiscal 2024 fourth quarter. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

The information contained in this report as well as in Exhibit 99.1 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference in any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

 

Exhibit Number		Description
99.1		Press release issued by Agilysys, Inc. dated May 13, 2024, announcing its results for the fourth quarter and period ended March 31, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		Company Name
Date: May 13, 2024		By:	/s/ William David Wood III
			William David Wood III
			Chief Financial Officer
			(Principal Financial Officer)

 

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Exhibit 99.1

 

AGILYSYS ANNOUNCES FISCAL 2024 FOURTH QUARTER RECORD REVENUE OF $62.2M AND FULL YEAR RECORD REVENUE OF $237.5M

Annual Revenue Includes Recurring Revenue of $138.1M and Subscription Revenue Growth of 29.6%

Annual Record Adjusted EBITDA of $37.1M and Free Cash Flow of $40.1M

Annual Revenue Expected To Grow To $275M to $280M In Fiscal 2025 With Full Year Adjusted EBITDA of 16%

ALPHARETTA, GA – May 13, 2024 - Agilysys, Inc. (NASDAQ: AGYS), a leading global provider of hospitality software solutions that deliver High Return Hospitality, today reported results for its fiscal 2024 fourth quarter and full year ending March 31, 2024.

Summary of Fiscal 2024 Fourth Quarter Financial Results

Summary of Full Fiscal Year 2024 Financial Results

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Ramesh Srinivasan, President and CEO of Agilysys, commented, “We are pleased to report our ninth consecutive record revenue quarter and another record fiscal year with respect to overall revenue and profitability. The final fiscal year results were significantly better than our expectations at the beginning of the year and at the high end of revised increased expectations during the year.

“Fiscal 2024 fourth quarter revenue was a record $62.2 million, 17.6% higher than the comparable prior year quarter and included subscription revenue growth of 31.6% and services revenue growth of 43.9% year-over-year. Full year fiscal 2024 revenue was a record $237.5 million, 19.9% higher than the previous fiscal year, and included subscription revenue growth of 29.6% and services revenue growth of 39.2%.

Srinivasan continued, “Significant growth in subscription and services revenue and improvements in services margins are good indicators of our continuing progress as a world-class cloud-native end-to-end technology provider fulfilling the growing need for such high-grade software solutions in the hospitality industry. With the completion of virtually all the product re-engineering and modernization projects across POS, PMS, and Inventory-Procurement on which we had been focused for the past several years, we now have a heightened competitive advantage that positions us well for continued sales success and revenue growth. We have made several significant sales breakthroughs during the past few months.

“We expect fiscal year 2025 to mark the beginning of a great new era with full year revenue in the $275 million to $280 million range inclusive of at least 27% subscription revenue growth and Adjusted EBITDA at 16% of revenue,” Srinivasan concluded.

Fiscal 2025 Outlook

The Company expects full year fiscal 2025 revenue to be $275 million to $280 million, including higher than 27% year-over-year subscription revenue growth. Adjusted EBITDA is expected to be 16% of revenue for the full fiscal year.

Dave Wood, Chief Financial Officer, commented, “We are pleased with the results for the 2024 fiscal year. Our disciplined approach throughout the year enabled us to execute well on our fiscal 2024 financial plan while positioning us for continued success and growth into fiscal year 2025. Strong subscription revenue growth is an indication of our expanding competitive product strength and results of the increasing investments in sales and marketing efforts. We continue to see growth opportunities in front of us and remain focused on executing disciplined profitable growth.”

2024 Fourth Quarter Conference Call and Webcast

Agilysys is hosting a conference call and webcast today, May 13, 2024, at 4:30 p.m. ET. Both the call and the webcast are open to the public. Interested parties can register for the call at https://register.vevent.com/register/BI5c740825742e4b699d9ea8b050cd4a0b. After registration, an email confirmation with a personalized PIN will be provided along with further access details. Please plan to register fifteen minutes prior to the presentation to receive confirmation and further instruction in a timely manner.

Interested parties can also access the conference call live on the Events and Presentations page of Agilysys.com. Approximately two hours after the call has concluded, an archived version of the webcast will be available for replay at the same location.

Forward-Looking Language

This press release contains “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. Examples of forward-looking statements include, among others, our revenue, subscription revenue and Adjusted EBITDA guidance for the 2025 fiscal year.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the impact macroeconomic factors may have on the overall business environment, our ability to achieve our fiscal 2025 guidance, future revenue growth, the company's ability to convert the backlog into revenue, and the risks described in the Company’s filings with the Securities and Exchange Commission, including the Company’s reports on Form 10-K and Form 10-Q. Additionally, references to "record" financial and business levels in this document refer only to the time period after Agilysys made the transformation to an entirely hospitality focused software solutions company in FY2014.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement that may be made from time to time, whether written or oral, whether as a result of new information, future developments or otherwise.

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Use of Non-GAAP Financial Information

To supplement the unaudited 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 EBITDA, Adjusted EBITDA, adjusted net income, adjusted basic earnings per share, adjusted diluted earnings per share and free cash flow. Management believes that such information can enhance investors’ understanding of the Company’s ongoing operations.

 

The Company has included the following non-GAAP financial measures in this press release: adjusted net income, adjusted basic earnings per share and adjusted diluted earnings per share. The Company believes these non-GAAP financial measures provide valuable insight into the Company’s overall profitability from core operations before certain non-cash and non-recurring charges. The Company defines adjusted net income as net income before amortization expense (including amortization of developed technology), share-based compensation, convertible preferred stock issuance costs, and one-time charges including severance and other charges, impairments and legal settlements, less the related income tax effect of these adjustments, as applicable, and defines adjusted earnings per share as adjusted net income divided by basic and diluted weighted average shares outstanding.

 

See the accompanying tables below for the definitions and reconciliation of these non-GAAP measures to the most closely related GAAP measures.

 

About Agilysys

Agilysys exclusively delivers state-of-the-art software solutions and services that help organizations achieve High Return Hospitality™ by maximizing Return on Experience (ROE) through interactions that make ‘personal’ profitable. Customers around the world use Agilysys Property Management Systems (PMS), Point-of-Sale (POS) solutions and Food & Beverage Inventory and Procurement (I&P) systems to consistently delight guests, retain staff and grow margins. Agilysys’ 100% hospitality customer base includes branded and independent hotels; multi-amenity resorts; casinos; property, hotel and resort management companies; cruise lines; corporate dining providers; higher education campus dining providers; food service management companies; hospitals; lifestyle communities; senior living facilities; stadiums; and theme parks. Agilysys operates across the Americas, Europe, the Middle East, Africa, Asia-Pacific, and India with headquarters located in Alpharetta, GA. For more information visit Agilysys.com.

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Investor Contact:

Jessica Hennessy

Senior Director Corporate Strategy & Investor Relations

Agilysys, Inc.

770-810-6116 or investorrelations@agilysys.com

- Financial tables follow -

 

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AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

		Three months ended March 31,								Year Ended March 31,
(In thousands, except per share data)		2024				2023				2024				2023
Net revenue:
Products		$	10,983			$	11,347			$	49,083			$	43,638
Subscription and maintenance			36,588				31,368				138,069				118,285
Professional services			14,650				10,182				50,312				36,142
Total net revenue			62,221				52,897				237,464				198,065
Cost of goods sold:
Products			6,294				6,312				26,318				22,994
Subscription and maintenance			8,059				7,039				30,870				26,262
Professional services			9,592				7,363				36,020				27,990
Total cost of goods sold			23,945				20,714				93,208				77,246
Gross profit			38,276				32,183				144,256				120,819
Gross profit margin			61.5	%			60.8	%			60.7	%			61.0	%
Operating expenses:
Product development			14,284				13,710				56,739				50,260
Sales and marketing			8,601				6,097				28,439				22,716
General and administrative			9,073				7,819				36,279				30,669
Depreciation of fixed assets			854				398				3,896				1,769
Amortization of internal-use software and intangibles			246				417				1,366				1,743
Other charges, net			1,711				61				1,756				435
Legal settlements			28				248				28				352
Total operating expense			34,797				28,750				128,503				107,944
Operating income			3,479				3,433				15,753				12,875
Other income (expense):
Interest income			1,503				1,006				5,083				2,192
Other (expense) income, net			(136	)			(102	)			(152	)			697
Income before taxes			4,846				4,337				20,684				15,764
Income tax provision (benefit)			1,885				262				(65,511	)			1,182
Net income		$	2,961			$	4,075			$	86,195			$	14,582
Series A convertible preferred stock dividends			—				(459	)			(1,204	)			(1,836	)
Net income attributable to common shareholders		$	2,961			$	3,616			$	84,991			$	12,746
Weighted average shares outstanding - basic			26,913				24,825				25,668				24,694
Net income per share - basic:		$	0.11			$	0.15			$	3.31			$	0.52
Weighted average shares outstanding - diluted			28,019				26,262				26,842				25,929
Net income per share - diluted:		$	0.11			$	0.14			$	3.17			$	0.49

 

 

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AGILYSYS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

		March 31,				March 31,
(In thousands, except share data)		2024 (Unaudited)				2023
ASSETS
Current assets:
Cash and cash equivalents		$	144,891			$	112,842
Accounts receivable, net of allowance for expected credit losses    of $974 and $610, respectively			29,441				22,378
Contract assets			2,287				2,242
Inventories			4,587				9,774
Prepaid expenses and other current assets			7,731				7,422
Total current assets			188,937				154,658
Property and equipment, net			17,930				14,576
Operating lease right-of-use assets			18,384				12,708
Goodwill			32,791				32,638
Intangible assets, net			16,952				18,140
Deferred income taxes, non-current			67,373				2,790
Other non-current assets			8,063				7,526
Total assets		$	350,430			$	243,036
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	9,422			$	9,418
Contract liabilities			56,148				52,124
Accrued liabilities			19,522				13,708
Operating lease liabilities, current			4,279				3,263
Finance lease obligations, current			—				2
Total current liabilities			89,371				78,515
Deferred income taxes, non-current			554				2,257
Operating lease liabilities, non-current			19,613				13,477
Other non-current liabilities			4,415				4,018
Commitments and contingencies
Series A convertible preferred stock, no par value			—				35,459
Shareholders' equity:
Common shares, without par value, at $0.30 stated value; 80,000,000    shares authorized; 33,342,288 shares issued; and 27,376,862    and 25,326,626 shares outstanding at March 31, 2024    and March 31, 2023, respectively			10,003				9,482
Treasury shares, 5,965,426 and 6,280,205 at March 31, 2024    and March 31, 2023, respectively			(1,791	)			(1,884	)
Capital in excess of stated value			94,680				52,978
Retained earnings			137,755				52,764
Accumulated other comprehensive loss			(4,170	)			(4,030	)
Total shareholders' equity			236,477				109,310
Total liabilities and shareholders' equity		$	350,430			$	243,036

 

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AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		Year Ended
		March 31,
(In thousands)		2024				2023
Operating activities
Net income		$	86,195			$	14,582
Adjustments to reconcile net income to net cash provided by operating activities:
(Gain) loss on asset disposals			(1,145	)			66
Depreciation of fixed assets			3,896				1,769
Amortization of internal-use software and intangibles			1,366				1,743
Deferred income taxes			(66,353	)			(181	)
Share-based compensation			14,111				12,958
Changes in operating assets and liabilities:
Accounts receivable			(6,996	)			2,537
Contract assets			(36	)			(590	)
Inventory			5,189				(2,897	)
Prepaids and other current assets			(291	)			(2,084	)
Accounts payable			973				(1,582	)
Contract liabilities			3,965				6,383
Accrued liabilities			5,659				2,711
Income taxes payable, net			(1,177	)			290
Other changes, net			2,830				(1,242	)
Net cash provided by operating activities			48,186				34,463
Investing activities
Capital expenditures			(8,127	)			(7,238	)
Proceeds from sale of assets			552				—
Cash (paid for) business combinations, net of cash acquired			—				395
Additional investments in corporate-owned life insurance policies			(27	)			(27	)
Net cash used in investing activities			(7,602	)			(6,870	)
Financing activities
Payment of preferred stock dividends			(1,663	)			(1,836	)
Repurchase of common shares to satisfy employee tax withholding			(6,893	)			(9,254	)
Principal payments under long-term obligations			(2	)			(4	)
Net cash used in financing activities			(8,558	)			(11,094	)
Effect of exchange rate changes on cash			23				(628	)
Net increase in cash and cash equivalents			32,049				15,871
Cash and cash equivalents at beginning of period			112,842				96,971
Cash and cash equivalents at end of period		$	144,891			$	112,842

 

 

 

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AGILYSYS, INC.

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA

(UNAUDITED)

		Three months ended								Twelve months ended
		March 31,								March 31,
(In thousands)		2024				2023				2024				2023
Net income		$	2,961			$	4,075			$	86,195			$	14,582
Income tax provision (benefit)			1,885				262				(65,511	)			1,182
Income before taxes			4,846				4,337				20,684				15,764
Depreciation of fixed assets			854				398				3,896				1,769
Amortization of internal-use software and intangibles			246				417				1,366				1,743
Amortization of developed technology acquired			40				39				159				159
Interest income, net			(1,503	)			(1,006	)			(5,083	)			(2,192	)
EBITDA (a)			4,483				4,185				21,022				17,243
Share-based compensation			4,622				3,548				14,111				12,958
Other charges, net			1,711				61				1,756				435
Other non-operating expense (income)			136				102				152				(697	)
Legal settlements			28				248				28				352
Adjusted EBITDA (b)		$	10,980			$	8,144			$	37,069			$	30,291

(a) EBITDA, a non-GAAP financial measure, is defined as net income before income taxes, interest income (net of interest expense), depreciation and amortization (including amortization of developed technology)

(b) Adjusted EBITDA, a non-GAAP financial measure, is defined as net income before income taxes, interest income (net of interest expense), depreciation and amortization (including amortization of developed technology), and excluding charges relating to i) share-based compensation, ii) other (gains) and charges, net, iii) other non-operating expense (income), and iv) legal settlements

 

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AGILYSYS, INC.

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME FOR ADJUSTED EARNINGS PER SHARE

(UNAUDITED)

		Three months ended								Twelve months ended
		March 31,								March 31,
(In thousands, except per share data)		2024				2023				2024				2023
Net income attributable to common shareholders		$	2,961			$	3,616			$	84,991			$	12,746
Amortization of developed technology acquired			40				39				159				159
Amortization of internal-use software and intangibles			246				417				1,366				1,743
Share-based compensation			4,622				3,548				14,111				12,958
Other charges, net			1,711				61				1,756				435
Legal settlements			28				248				28				352
Tax events (a)			577				—				(69,067	)			—
Income tax adjustments			(1,194	)			(994	)			(3,805	)			(3,274	)
Adjusted net income (b)		$	8,991			$	6,935			$	29,539			$	25,119
Basic weighted average shares outstanding			26,913				24,825				25,668				24,694
Diluted weighted average shares outstanding			28,019				26,262				26,842				25,929
Adjusted basic earnings per share (c)		$	0.33			$	0.28			$	1.15			$	1.02
Adjusted diluted earnings per share (c)		$	0.32			$	0.26			$	1.10			$	0.97

(a) Tax events include excess tax benefits or expense related to share-based compensation, release of valuation allowances against deferred income taxes, and changes in uncertain tax positions

(b) Adjusted net income, a non-GAAP financial measure, is defined as net income attributable to common shareholders before amortization expense (including amortization of developed technology), share-based compensation, other (gains) and charges, net, and legal settlements, less the related income tax effect of these adjustments, as applicable, at the Company’s current combined federal and state income statutory tax rate and, as defined under (a) above, tax events

(c) Adjusted earnings per share, a non-GAAP financial measure, is defined as adjusted net income divided by basic and diluted weighted average shares outstanding

 

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AGILYSYS, INC.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(UNAUDITED)

		Three months ended								Twelve months ended
		March 31,								March 31,
(In thousands)		2024				2023				2024				2023
Net cash provided by operating activities		$	29,807			$	16,783			$	48,186			$	34,463
Capital expenditures			(469	)			(3,622	)			(8,127	)			(7,238	)
Free cash flow (a)		$	29,338			$	13,161			$	40,059			$	27,225

(a) Free cash flow, a non-GAAP financial measure, is defined as net cash provided by operating activities, less capital expenditures

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v3.24.1.1.u2

Document and Entity Information	May 13, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 13, 2024
Entity Registrant Name	AGILYSYS, INC.
Entity Central Index Key	0000078749
Entity Emerging Growth Company	false
Entity File Number	000-5734
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	34-0907152
Entity Address, Address Line One	3655 Brookside Parkway
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Alpharetta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30022
City Area Code	770
Local Phone Number	810-7800
Entity Information, Former Legal or Registered Name	Not Applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, without par value
Trading Symbol	AGYS
Security Exchange Name	NASDAQ

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