Agilysys, Inc. · NASDAQ:AGYS
Agilysys — Investor Presentation (November 2018)
33 slides from Agilysys's investor presentation, Nov 7, 2018
Slide 1: Investor Presentation November 2018
Investor Presentation November 2018
Slide 2: Forward-looking Statements & Non-GAAP Financial Information
Forward-looking Statements & Non-GAAP Financial Information TECHNOLOGY | INNOVATION | SOLUTIONS Forward-Looking Language This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward- loo
Slide 3: Agilysys Mission
Agilysys Mission TECHNOLOGY | INNOVATION | SOLUTIONS HELP OUR CUSTOMERS IMPROVE GUEST EXPERIENCE AND LOYALTY WHATEVER IT TAKES, INCLUDING INTEGRATION WITH 3rd PARTY PARTNERS WITH DEDICATION TO PAST, PRESENT & FUTURE CUSTOMER INVESTMENTS IN OUR PRODUCTS AND SERVICES 3
Slide 4: Agilysys Overview
Agilysys Overview TECHNOLOGY | INNOVATION | SOLUTIONS • Agilysys is a Technology Solutions Company Exclusively SaaS Reservations and Focused on the Hospitality Industry On Prem Analytics Guest • Our Solutions Are Mission Critical to Core Hospitality Operations Optimization Value - These Systems Are
Slide 5: Agilysys Products
Agilysys Products TECHNOLOGY | INNOVATION | SOLUTIONS Well-Established rGuest POINT OF SALE (POS) PROPERTY MANAGEMENT (PMS) OTHER 5
Slide 6: What Sets Agilysys Apart
What Sets Agilysys Apart TECHNOLOGY | INNOVATION | SOLUTIONS Pure Hospitality Hospitality is all We Do Because our Business is 100% Focused on this Industry Comprehensive Solutions Agilysys has the Broadest Software Offerings with the Deepest Functionality in the Market Obsessively Customer Centric
Slide 7: Strategic Initiatives
Strategic Initiatives TECHNOLOGY | INNOVATION | SOLUTIONS INCREASED PRODUCT DEVELOPMENT VELOCITY GREATER PROCESS EFFICIENCIES INNOVATION AND EXECUTION GOALS EMPLOYEE & LEADERSHIP DEVELOPMENT PROFITABLE REVENUE GROWTH INTERNATIONAL EXPANSION 7
Slide 8: We Provide Industry Leading Hospitality Solutions
We Provide Industry Leading Hospitality Solutions TECHNOLOGY | INNOVATION | SOLUTIONS PROPERTY POINT-OF-SALE MANAGEMENT 61% of Revenue 27% of Revenue F&B Solutions Lodging Solutions ~51k end points at 9/30/18 ~270k rooms at 9/30/18 +21% since 9/30/17 +8% since 9/30/17 9% of Revenue DOCUMENT INVENTOR
Slide 9: We Serve Leading Hospitality Brands
We Serve Leading Hospitality Brands TECHNOLOGY | INNOVATION | SOLUTIONS Gaming – 55% of Revenue Hotels, Resorts and Cruise – 26% of Revenue FoodFood Service – 18% of Revenue Restaurants, Universities, Stadia and Healthcare – 1% of Revenue Note: Revenue contribution figures represent percentage for t
Slide 10: Achievements Under New Management Team
Achievements Under New Management Team TECHNOLOGY | INNOVATION | SOLUTIONS January 2017 (Q4 - • Four Consecutive Quarters of Sequential Revenue Growth FY17) we began a focus on cost control • Record Revenue Achieved in Q1 FY19 and Then Q2 FY19 Set Another Record and aligning resources to position •
Slide 11: Creating Value with New Leadership and Strategy
Creating Value with New Leadership and Strategy TECHNOLOGY | INNOVATION | SOLUTIONS 18 Announced First Ever 17 Positive AOE Quarter 16 15 Ramesh Tony Srinivasan Heather Rod 14 Joins Pritchett Foster Appointed Talbot Agilysys Sridhar Joins CFO Joins 13 Laveti Agilysys Agilysys Joins Agilysys 12 IDC E
Slide 12: Hospitality Market Opportunity
Hospitality Market TECHNOLOGY | INNOVATION | SOLUTIONS ARR Market Opportunity ARR Product Opportunity $4.8 Billion $4.8 Billion SA $0.35B 7% APAC $1.36B PMS 28% $1.61B NA 34% $1.72B POS 37% $3.18B 66% EMEA $1.36B 28% Agilysys Revenue ~ $131.6M* *Trailing twelve months ended September 30, 2018. 12
Slide 13: Growing Need for Agilysys Products
Growing Need for Agilysys Products TECHNOLOGY | INNOVATION | SOLUTIONS • Guests Increasingly Demand “New” Tech • New Guest Experience Solutions: Mobile, Self-Service, Preference-Based, Social-Aware • Competition for Our Customers to Get Ahead of the Technology Curve • Few Vendors Focused Solely on H
Slide 14: Go To Market Strategy
Go To Market Strategy TECHNOLOGY | INNOVATION | SOLUTIONS OBSESSIVELY CUSTOMER CENTRIC IN EVERY MARKET WE SERVE ENGINEERING DRIVEN COMPANY ~10% R&D Team FY19 YTD ~24%* Increase Strength** Improvement in in YTD Jan 2017 – 230 Customer International Oct 2018 – 430 Retention Bookings Dec 2019 – 750 vs.
Slide 15: Growth in Engineering Capacity
Growth in Engineering Capacity TECHNOLOGY | INNOVATION | SOLUTIONS Jan 1, 2017 Oct 31, 2018 Growth R&D 229 433 89% Developers 134 288 115% Total Headcount 725 852 18% R&D/HC 32% 51% Developers/HC 18% 34% Contractors 102 20 15
Slide 16: India Development Center
India Development Center TECHNOLOGY | INNOVATION | SOLUTIONS • Currently Doubling Capacity To: • 68,000 Square Feet • 660 Employee Capacity • 290 Out of 317 Current Employees Chennai are Technical Staff 16
Slide 17: Senior Management Leading New Growth Vision
Senior Management Leading New Growth Vision TECHNOLOGY | INNOVATION | SOLUTIONS RAMESH SRINIVASAN - President and Chief Executive Officer Ramesh is an accomplished CEO with leadership and turnaround success across multiple industries resulting in rapid and sustainable long-term growth and significan
Slide 18: Senior Management Leading New Growth Vision
Senior Management Leading New Growth Vision TECHNOLOGY | INNOVATION | SOLUTIONS KYLE C. BADGER - Senior Vice President, General Counsel and Secretary Kyle leads the global legal and human resources teams, and brings over 22 years of legal experience representing public and private companies in gener
Slide 19: Financial Overview
FINANCIAL OVERVIEW Agilysys. .
Slide 20: Evolving Business, Evolving P&L
Evolving Business, Evolving P&L TECHNOLOGY | INNOVATION | SOLUTIONS Financial Metrics and Valuation (*TTM) Business Metrics (as of 9/30/18) Share Price (11/02/18) $16.31 Direct POS End Points Managed ~51k Diluted Shares Outstanding 23.1M Y/Y Growth 21% Diluted Market Capitalization $376.8M Direct Ho
Slide 21: Strong Balance Sheet
Strong Balance Sheet TECHNOLOGY | INNOVATION | SOLUTIONS Consolidated Balance Sheet (in thousands) March 31, 2018 September 30, 2018 Cash, Cash Equivalents and Marketable Securities $39,943 $32,904 Other Current Assets 23,981 30,426 Long-Term Assets 93,283 90,296 Total Assets $157,207 $153,626 Curre
Slide 22: Historical Financial Results - Trailing Twelve Months
Historical Financial Results - Trailing Twelve Months TECHNOLOGY | INNOVATION | SOLUTIONS Revenue - GAAP Net Loss - GAAP $135,000 $131,577 ($1,000) $130,000 $127,678 $127,360 Record ($6,000) ($3,765) $125,000 Revenue Quarter $120,366 ($7,671) (Q2’19) ($11,000) ($8,350) $120,000 ($11,721) $115,000 ($
Slide 23: Profitability Metrics - Quarterly Total Revenue
Profitability Metrics - Quarterly TECHNOLOGY | INNOVATION | SOLUTIONS Total Revenue $35,000 $34,203 $33,865 $34,007 $34,000 $33,448 $33,000 $32,676 $32,056 $32,000 $31,310 $30,953 $31,000 $30,602 $30,129 $30,000 $29,000 $28,000 $27,000 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 All
Slide 24: Profitability Metrics - Quarterly Adjusted Earnings from Operations
Profitability Metrics - Quarterly TECHNOLOGY | INNOVATION | SOLUTIONS Adjusted Earnings from Operations – Non GAAP^ $1,995 $2,000 $1,000 $564 $237 $0 ($1,000) ($1,158) Q3-FY18 ($1,440) included ($2,000) ($1,909) $700K of capex for IDC ($3,000) expansion ($3,100) ($3,247) ($3,475) ($4,000) ($3,779) Q
Slide 25: Profitability Metrics - Quarterly Adjusted EBITDA
Profitability Metrics - Quarterly TECHNOLOGY | INNOVATION | SOLUTIONS Adjusted EBITDA – Non GAAP^ $3,500 $3,113 $2,965 $3,061 $3,000 $2,641 $2,500 $2,310 $2,069 $2,000 $1,640 No $1,500 $1,308 Software Capitalization in $1,000 Q2-FY19 $441 $500 $0 ($500) ($234) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'
Slide 26: Adjusted EBITDA less Capitalized Software Development Costs
Profitability Metrics - Quarterly TECHNOLOGY | INNOVATION | SOLUTIONS Adjusted EBITDA less Capitalized Software Development Costs – Non GAAP^ $3,000 $2,584 $2,000 $1,415 $981 $1,000 $274 $0 ($177) ($385) ($1,000) No ($1,350) Software ($2,000) ($1,646) Capitalization in Q2-FY19 ($2,429) ($3,000) ($2,
Slide 27: Estimated 10% - 20% Four-Year Revenue Growth CAGR
Estimated 10% - 20% Four-Year Revenue Growth CAGR TECHNOLOGY | INNOVATION | SOLUTIONS Revenue Possibilities 290 270 250 230 210 190 170 150 130 FY18 FY19 FY20 FY21 FY22 20% CAGR 15% CAGR 10% CAGR Targeting AOE of between 10%-20% of Revenue by FY2021 (begins April 2020) 27
Slide 28: Appendix
APPENDIX
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation TECHNOLOGY | INNOVATION | SOLUTIONS AGILYSYS, INC. RECONCILIATION OF NET LOSS TO ADJUSTED EARNINGS FROM OPERATIONS (UNAUDITED) Twelve Months Ended March 31 (In thousands) TTM* 2018 2017 2016 Net loss $ (7,671) $ (8,350) $ (11,721) $ (3,765) Income tax expense (benefit) (3,431
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation TECHNOLOGY | INNOVATION | SOLUTIONS AGILYSYS, INC. RECONCILIATION OF NET LOSS TO ADJUSTED EARNINGS FROM OPERATIONS (UNAUDITED) Three Months Ended September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, (In thousands)
Slide 31: Cash Flow
Cash Flow TECHNOLOGY | INNOVATION | SOLUTIONS TTM* FY18 FY17 FY16 Operating activities Loss from continuing operations $ (7,671) $ (8,350) $ (11,721) $ (3,765) Non cash adjustments, restructuring, legal settlements 17,129 16,586 14,110 7,741 Changes in assets & liabilities (3,682) (1,362) 1,044 3,24
Slide 32: Agilysys Corporate Headquarters and Global Footprint
Agilysys Corporate Headquarters Agilysys Global Footprint • Alpharetta, Georgia Agilysys US Offices • Las Vegas, Nevada • Santa Barbara, California • Bellevue, Washington Agilysys EMEA Office Windsor, UK • United Kingdom Seattle, WA Las Vegas, NV Agilysys APAC Offices Santa Barbara, CA Alpharetta, G
Slide 33: Contact
Contact: Tony Pritchett Richard Land / Norberto Aja Chief Financial Officer JCIR (770) 810-7941 (212) 835-8500 InvestorRelations@agilysys.com agys@jcir.com 33