Agilysys, Inc. (Nasdaq: AGYS), a global provider of
next-generation hospitality software solutions and services, today
reported operating results for its fiscal 2019 first quarter ended June
30, 2018.
Summary of Fiscal 2019 First Quarter Financial Results
Ramesh Srinivasan, President and CEO of Agilysys, commented, “Our
positive operating momentum continued in the first quarter of fiscal
2019 as we generated our highest ever quarterly revenue. This was also
our third consecutive quarter of sequential revenue growth. Recurring
revenue increased 8% year over year to $17.9 million and continues to be
driven primarily by SaaS revenue growth. Over the last three quarters,
our sales growth has been broad-based with improvement across multiple
product and vertical market segments. As in other recent quarters,
revenue growth in the fiscal 2019 first quarter included net positive
competitive replacements, growth in sales of additional products to
existing customers and expansion of business with certain large
strategic accounts. We expect such growth opportunities to continue
driving us forward in fiscal 2019 and beyond.
“We also continue to make good progress towards positioning Agilysys for
consistent near and long-term profitability improvement. The fiscal 2019
first quarter represented the second consecutive quarter in which we
generated positive Adjusted Earnings from Operations (AOE), the first
two quarters we have achieved this since transforming Agilysys into a
pure-play hospitality software solutions technology provider in fiscal
2014. AOE improved by more than $3.7M year over year in the first
quarter, and we now believe AOE will be approximately break-even for
fiscal 2019.
“Overall, we are pleased with our strong start to fiscal 2019, our
increasing momentum in the marketplace and in our internal culture
transformation. There has never been a better time to work at and do
business with Agilysys and these factors have positioned us well to
consistently grow shareholder value.”
New Revenue Recognition Standard
On April 1, 2018, Agilysys adopted accounting standard update No.
2014-09 (“ASC 606”), the Financial Accounting Standards Board’s new
revenue recognition standard. Financial results for the three month
period ended June 30, 2018 reflect this accounting standard. Financial
results for the three month period ended June 30, 2017 have not been
restated and are reported under the accounting standards in effect
during that period. The impact on revenue, net loss, Adjusted EBITDA,
and Adjusted Earnings from Operations (“AOE”) from the adoption of ASC
606 was immaterial.
Updated Fiscal 2019 Outlook
Agilysys today reiterated its previously provided forecast for fiscal
2019 full year revenue growth of approximately 10% compared to fiscal
2018 revenue of approximately $127 million. In addition, the Company now
expects to record approximately break-even Adjusted Earnings from
Operations (non-GAAP measure) in fiscal 2019, compared to the loss of
approximately $6.0 million for this metric in fiscal 2018. Agilysys also
expects fiscal 2019 year-end cash and cash equivalents to reflect a
decline of approximately $3 million to $5 million, from the fiscal 2018
year-end balance of $39.9 million, a significant improvement from the
over $9 million decline in fiscal 2018.
The Company defines adjusted earnings from operations as adjusted
EBITDA, less capital expenditures and capitalized software development
costs, which management believes is a meaningful measure of earnings and
provides insight to investors on the Company’s overall profitability and
cash generation from core operations. Adjusted earnings from operations
includes costs for capitalized efforts while minimizing the seasonality
of the Company’s cash flows due to the timing of billing.
Tony Pritchett, Chief Financial Officer, commented, “We continue to make
strong progress in our business with fiscal 2019 first quarter revenue
and AOE slightly exceeding our internal forecast. As our recurring
revenue continues to grow and we further benefit from predictable
services revenue, which represents approximately 20% of our overall
revenue mix, we continue to increase the visibility and sustainability
of the sales momentum we are now achieving. Reflecting the strong start
to fiscal 2019, we are on track to achieve our guidance for full year
revenue growth of approximately 10% and significantly improve our
profitability. In addition, reflecting the normal seasonality of our
cash usage throughout the year, we expect to grow our cash balance in
the second half of the year and to end fiscal 2019 with approximately
$35 million or more in cash and cash equivalents. As such, we continue
to have the balance sheet, financial flexibility and growing sales
momentum to achieve our goals for near and long-term improvement in our
market position and financial results.”
2019 First Quarter Conference Call and Webcast
Agilysys is hosting a conference call and webcast today, August 1, 2018,
at 4:30 p.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 6678957. 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 Agilysys
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.
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 guidance relating to revenue, adjusted earnings from
operations and cash and cash equivalent balance, and statements we make
regarding continuing sales momentum, our ability to achieve revenue and
profitability growth, and improvements in financial results and
shareholder value.
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, our ability to achieve operational efficiencies
and meet customer demand for products and services 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.
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.
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 EBITDA and adjusted
earnings from operations. Management believes that such information can
enhance investors’ understanding of the company’s ongoing operations.
See the accompanying table below for a reconciliation of adjusted EBITDA
and adjusted earnings from operations to the most closely related GAAP
measure.
About Agilysys
Agilysys is a leading technology company that provides innovative
software and services for point-of-sale (POS), property management
(PMS), reservation and table management, inventory and procurement,
workforce management, analytics, document management, and mobile and
wireless solutions exclusively to the hospitality industry. Our products
and services allow operators to streamline operations, improve
efficiency and understand customer needs across their properties to
deliver a superior overall guest experience. The result is improved
guest loyalty, growth in wallet share and increased revenue as they
connect and transact with their guests based upon a single integrated
view of individual preferences and interactions. We serve four major
market sectors: Gaming, both corporate and tribal; Hotels, Resorts and
Cruise; Corporate Foodservice Management; and Restaurants, Universities,
Stadia and Healthcare.
Agilysys operates across North America, Europe, Asia-Pacific, and India
with headquarters located in Alpharetta, GA. For more information, visit www.agilysys.com.
– Financial tables follow –
AGILYSYS, INC.
(b) Adjusted EBITDA, a non-GAAP financial measure, is defined
as income before income taxes, interest expense (net of interest
income), depreciation and amortization (including amortization of
developed technology), and excluding charges relating to i) legal
settlements, ii) restructuring, severance, and other charges, iii)
asset write-offs and other fair value adjustments, iv) share-based
compensation, and v) other non-operating (income) expense
(c) Adjusted Earnings from Operations, a non-GAAP financial
measure, is defined as Adjusted EBITDA, less capital expenditures
and capitalized software development costs
View source version on businesswire.com: https://www.businesswire.com/news/home/20180801005853/en/