Slide 1: Agilysys, Inc. (Nasdaq: AGYS) November 2009
Agilysys, Inc. (Nasdaq: AGYS) Agilysys, Inc. (Nasdaq: AGYSAgilysys, AGYS) November 2009 L38066_4 November 2009
Slide 2: Forward looking statements & non-GAAP financial information
Forward looking statements and#038; non-GAAP financial information Forward-Looking Language This presentation 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
Slide 3: Agilysys: overview
Agilysys: overview One of the largest resellers and system integrators in North America (#1 Sun and#038; top five IBM, HP and#038; EMC reseller in North America) Best in class software products for hospitality industry Industry leader Diversified business Streamlined cost structure One of the most d
Slide 4: Agilysys: business overview
Agilysys: business overview Business segments Financial Profile Primary markets Capabilities and solutions Hospitality solutions Independent software vendor/ developer Rev. FY091: $99.6M Adj. EBITDA2,3: $14.3M Hotel casinos Full-service hotels Destination resorts Conference centers Condominiums Rest
Slide 5: Agilysys: evolution
Agilysys: evolution 2003 2004 2005 2006 2007 2008 Today TSG RSG HSG Continues to grow HP and IBM solution provider business Establishes EMC relationship and signs EMC agreement May 2005: Acquires CTS: Enhances offering of comprehensive storage solutions Apr 2007: Acquires Stack Computer Jul 2007: Ac
Slide 6: Agilysys: revenue mix
Agilysys: revenue mix Hardware Software Services East 508.7 77 145 Hardware Software Services East 20.5 19.8 59.7 Hardware Software Services East 58.7 3.9 37.5 Hardware Software Services East 81.9 12.3 5.8 Agilysys FY09 Revenue Mix HSG FY09 Revenue Mix RSG FY09 Revenue Mix TSG FY09 Revenue Mix 6
Slide 7: AGYS: trailing twelve months (TTM)
AGYS: trailing twelve months ("TTM") Mar '08 Mar '09 Sep '09 EBITDA 5.7 19.7 17.4 EBITDA Margin 0.008 0.027 0.026 Mar '08 Mar '09 Sep '09 Organic 760 731 665 Adjusted EBITDA excl. charges2 ($Mil.) Additional notes Excludes results from TSG's Asian operations that are reported in discontinued operati
Slide 8: Q2 review: summary balance sheet performance
Q2 review: summary balance sheet performance Cash at Sept. 30th was $48.2M - a decrease of $2.8M from 6/30/09 A/R consumed $20.2M of cash Inventory consumed $1.6M of cash A/P generated $16.5M of cash Received $0.7M distribution from investment in Reserve Fund's Primary Fund Days sales outstanding im
Slide 9: HSG: solutions
HSG: solutions HSG: solutions HSG Solutions Software Markets served Property management Guest360 Lodging Management System (LMS) Visual One Property Management Solution Gaming Hotels Resorts p y g systems Point-of-sale InfoGenesis Food and Beverage Visual One mPOS Gaming Cruise Lines Hotels Resorts
Slide 10: HSG: trailing twelve months
HSG: trailing twelve months Adjusted EBITDA1 ($ Mil.) Revenue ($ Mil.) Mar '08 Mar '09 Sep '09 EBITDA 9 14.3 13.3 EBITDA Margin 0.106 0.143 0.146 Mar '08 Mar '09 Sep '09 Organic 84.8 99.6 91 (1) Excludes asset impairment charge 10
Slide 11: RSG: solutions
RSG: solutions Services Enterprise hardware - RSG supplies IBM System i, System p and System x servers as well as IBM and EMC storage solutions Point-of-sale - RSG sells IBM POS terminals, which are "retail-hardened" to enhance uptime and longevity Peripherals - RSG is one of the largest resellers o
Slide 12: RSG: trailing twelve months
Revenue ($ Mil.) Mar '08 Mar '09 Sep '09 EBITDA 6.1 8 6.1 EBITDA Margin 0.047 0.066 0.06 Mar '08 Mar '09 Sep '09 Organic 129.7 122.2 102 RSG: trailing twelve months Adjusted EBITDA1 ($ Mil.) (1) Excludes asset impairment charge 12
Slide 13: TSG: solutions
TSG: solutions Enterprise class products targeted toward complex and powerful server and storage solutions Require significant investments in customer facing sales, technical solutions architects, delivery systems engineers, vendor certifications and extensive training TSG provides a broad range of
Slide 14: TSG: trailing twelve months
TSG: trailing twelve months Revenue ($ Mil.) Mar '08 Mar '09 Sep '09 EBITDA 28.8 36.1 29.1 EBITDA Margin 0.053 0.071 0.062 Mar '08 Mar '09 Sep '09 Organic 545.6 508.9 472 Adjusted EBITDA1 ($ Mil.) (1) Excludes asset impairment and restructuring charges 14
Slide 15: FY10 positioning and outlook
FY10 positioning and outlook Well Positioned for FY10 Company eliminated $44M in annualized cost in past 15 months New organization structure provides streamlined decision making and reduced overhead Cost structure is aligned with current demand outlook Debt-free with $48M cash on hand as of 9/30/09
Slide 16: Agilysys, Inc. Financial Data
Agilysys, Inc. (Nasdaq: AGYS) Financial Data
Slide 17: Q2 review: consolidated results
Q2 review: consolidated results Hardware revenue decreased 4%, services decreased 33% and software increased 14% from prior year SGand#038;A, excluding depr. and#038; amort., decreased $9.1M Comp and benefits decreased $5.6M, which included $0.4M in severance in Q2 FY10 Bad debt expense decreased $1
Slide 18: FY09 review: consolidated results
FY09 review: consolidated results Revenue declined 3.9% - pro forma for full year acquisitions, revenue declined 12.2% Gross profit increased over $20M on declining revenue due to higher mix of software and services revenue and rebates SGand#038;A, excl. depr. and#038; amort., increased by $6.2M due
Slide 19: Q2 review: Hospitality (HSG)
Q2 review: Hospitality ("HSG") Revenue was flat year-over-year as hospitality IT spend remains depressed Commercial gaming demand primarily relates to acquisitions of existing properties Food service and cruise markets have been stable Gross margin decreased due to higher proportion of hardware sale
Slide 20: FY09 review: HSG financial performance
FY09 review: HSG financial performance Revenue was essentially flat after adjusting for FY08 acquisitions Gross margin increased significantly due to higher mix of software and services SGand#038;A, excluding depr. and#038; amort., increased by $6.0M due primarily to full-year impact of FY08 acquisi
Slide 21: Q2 review: Retail (RSG)
Q2 review: Retail ("RSG") Revenue was down 20% due to lower hardware sales and implementation services related to large roll-outs Gross margin decreased due to hardware pricing pressure SGand#038;A, excl. depr. and#038; amort., decreased $1.9M Payroll costs decreased $0.8M Outside services decreased
Slide 22: FY09 review: RSG financial performance
FY09 review: RSG financial performance Revenue decreased 5.8% primarily due to absence of large, one-time hardware sale in FY08 Diverse revenue base across grocery, chain drug and discount retail Gross profit grew by over $3.1M on lower revenue due to higher proprietary services mix SGand#038;A, exc
Slide 23: Q2 review: Technology (TSG)
Q2 review: Technology ("TSG") Sales declined 8.1% year-over-year, but increased 21% sequentially Decline slowed as some companies begin to spend to address capacity, refresh, and virtualization needs Uncertainty as to timing of Oracle's pending acquisition of Sun is having some effect on demand and
Slide 24: FY09 review: TSG financial performance
FY09 review: TSG financial performance Revenue was down almost than 18% when pro forma for full-year Innovativ results in FY08 Demand for IT infrastructure solutions was soft throughout year Gross profit was higher on lower sales due to higher rebates and product mix SGand#038;A, excl. depr. and#038
Slide 25: Q2 review: Corporate
Q2 review: Corporate Gross profit decreased $0.6M due to recording miscellaneous pricing adjustments in business segments SGand#038;A, excl. depr. and#038; amort., decreased $4.8M due to FY09 cost-saving actions Payroll related costs were down $2.2M Outside services and professional fees decreased $
Slide 26: Reconciliation of Q2 FY10 net income/(loss) to adjusted EBITDA
Reconciliation of Q2 FY10 net income/(loss) Reconciliation of Q2 FY10 net income/(loss) to adjusted EBITDA 2009 2008 2009 2008 Net loss $ 2,836 $ ( 106,589) $ (9,560) $ ( 166,624) Plus: Six Months Ended (In thousands) September 30, Three Months Ended September 30, Interest expense, net 244 (18) 418
Slide 27: Reconciliation of FY08 & FY09 net income/(loss) to adjusted EBITDA
Reconciliation of FY08 and#038; FY09 net income/(loss) Reconciliation of FY08 and FY09 net income/(loss) to adjusted EBITDA ( In thousands) Three Months Ended Twelve Months Ended March 31, March 31, 2009 2008 2009 2008 (Unaudited) (Unaudited) (Unaudited) Net (loss) income $ (113,788) $ ( 4,328) $ (2
Slide 28: Reconciliation of consolidated TTM net income/(loss) to adjusted EBITDA
Reconciliation of consolidated TTM net income/(loss) to adjusted ( ) justed EBITDA TTM December 31, March 31, June 30, September 30, September 30, 2008 2009 2009 2009 2009 Three Months Ended (In thousands) Net (loss) income $ (3,720) $ (113,788) $ (12,396) $ 2 ,836 $ (127,068) Plus: Interest expense
Slide 29: Reconciliation of segment TTM operating income to adjusted EBITDA
Reconciliation of segment TTM operating income to adjusted EBITDA Reconciliation of segment TTM operating income to adjusted EBITDA HSG Segment RSG Segment TTM December 31, March 31, June 30, September 30, September 30, 2008 2009 2009 2009 2009 (In thousands) Three Months Ended TTM December 31, Marc