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| 8-K - 8-K - AGILYSYS INC | form8-kinvestorpresentatio.htm |
Investor Presentation
March 2018
TECHNOLOGY | INNOVATION | SOLUTIONS
Forward-looking Statements & Non-GAAP
Financial Information
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 and adjusted earnings
from operations, and statements we make regarding our ability to achieve revenue growth, profitability, and improvements in f inancial 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 diff icult 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.
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WHO WE ARE AND WHAT WE DO
TECHNOLOGY | INNOVATION | SOLUTIONS
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Agilysys Overview
• Agilysys is a Technology Solutions Company Exclusively
Focused on the Hospitality Sector
• Our Solutions Drive Substantial Customer Benefits
Including Increased Revenue, Reduced Cost, Enhanced
Guest Experiences and Improved Employee Morale
• Offices in 10 Locations Globally with Corporate Services
in Alpharetta, Georgia
Note: Revenue data is for the trailing twelve months ended December 31, 2017.
$125.9M
Total
Revenue
53%
Recurring Revenue as a
% of Total Revenue
28%
SaaS Revenue as a %
of Recurring Revenue
30%
Approx. SaaS Revenue
Growth Rate
TECHNOLOGY | INNOVATION | SOLUTIONS
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Agilysys Overview
Total
Resources
833
Research &
Development
391
Professional
Services
126
General &
Administrative
98
Customer
Support
80
Sales &
Marketing
69
Technical
Services
40
Operations
29
Note: Headcount as of February 28, 2018.
Resources by Department
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.
Agilysys Mission
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TECHNOLOGY | INNOVATION | SOLUTIONS
We Provide Leading Hospitality Solutions
Lodging Solutions
~255k rooms at 12/31/17
+5% since 12/31/16
F&B Solutions
~45k end points at 12/31/17
+17% since 12/31/16
62%
of Revenue
26%
of Revenue
9%
of Revenue
INVENTORY &
PROCUREMENT
3%
of Revenue
DOCUMENT
MANAGEMENT
PROPERTY
MANAGEMENT
Note: Revenue contribution figures represent percentage for the trailing twelve months ended December 31, 2017
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POINT-OF-SALE
Product Technology 93%
of Revenue WELL-ESTABLISHED
7%
of Revenue
rGUEST
TECHNOLOGY | INNOVATION | SOLUTIONS
Gaming – 52% of Revenue
Hotels, Resorts and Cruise – 25% of Revenue
Food Service ce – 21% of Revenue
We Serve Leading Hospitality Brands
Restaurants, Universities, Stadia and Healthcare – 2% of Revenue
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Note: Revenue contribution figures represent percentage for the trailing twelve months ended December 31, 2017
TECHNOLOGY | INNOVATION | SOLUTIONS
• Guests Increasingly Demand New Technology-Enabled Access and Ease of Use
• New Guest Experience Solutions: Mobile, Self-Service, Preference-Based, Social-Aware
• Competition for Guest Loyalty From OTAs, Other Brands, Shared Rentals
• Single View of Guest Demands Integration With Other Hospitality Solutions
• Few Vendors Focused Solely on Hospitality
• Large Enough to Meet Enterprise Needs
• Small Enough to be Flexible & Agile
Dining Experience Lodging Experience
HOTEL
Growing Need for Agilysys Products
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TECHNOLOGY | INNOVATION | SOLUTIONS
rGuest Well-Established Partner
Food &
Beverage
Lodging
Cross-
Functional
Agilysys Products
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TECHNOLOGY | INNOVATION | SOLUTIONS
APAC
$1.36B
28%
EMEA
$1.36B
29%
NA
$1.72B
36%
SA
$0.35B
7%
ARR Market Opportunity
$4.79 Billion
POS
$3.18B
66%
PMS
$1.61B
34%
ARR Product Opportunity
Billions
Agilysys Revenue ~ $125.9M*
Hospitality Market
*Trailing twelve months ended December 31, 2017.
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TECHNOLOGY | INNOVATION | SOLUTIONS
130
150
170
190
210
230
250
270
290
FY18 FY19 FY20 FY21 FY22
Revenue Possibilities
20% CAGR 15% CAGR 10% CAGR
Estimated 10% - 20% Four-Year Revenue Growth CAGR
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Adjusted Earnings from Operations at 10%-20% of Revenue is Possible by FY2020
TECHNOLOGY | INNOVATION | SOLUTIONS
Staff From Line Level Roles Within
Industries We Serve
Best Practice Solution
Capabilities
Scalable to Largest
Global Properties
Agility to Meet Custom
Requirements
Single View of Guest
Average Customer Life
– 10 yrs
Exclusively Hospitality
Focused
Continuous
Improvement
Competitive
Strengths
End to End Guest
Lifecycle Solutions
rGuest Platform Links
Guest Preferences
Enterprise Level Architecture
What Makes Agilysys Different?
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World Class Customer
Service
TECHNOLOGY | INNOVATION | SOLUTIONS
OBSESSIVELY CUSTOMER CENTRIC
ENGINEERING DRIVEN COMPANY
IN EVERY MARKET WE SERVE
Go To Market Strategy
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96%
increase in
developer
capacity vs.
FY2017
~25%
improvement
in customer
retention vs.
FY2017
TECHNOLOGY | INNOVATION | SOLUTIONS
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Growth in Engineering Capacity
Jan 1, 2017 Feb 28, 2018 Growth
R&D 229 391 71%
Developers 134 263 96%
Total Headcount 725 833 15%
R&D/HC 32% 47%
Developers/HC 18% 32%
Contractors 102 31
TECHNOLOGY | INNOVATION | SOLUTIONS
Chennai
• 34,000 Square Feet
• 330 Employee Capacity
• ~240 Already Onboard
• Full Capacity by June 2018
• Other Tenants – Amazon, Cisco,
Citi, GE, Fidelity, AstraZeneca
India Development Center
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TECHNOLOGY | INNOVATION | SOLUTIONS
INCREASED PRODUCT DEVELOPMEMENT VELOCITY
GREATER PROCESS EFFICIENCIES
EMPLOYEE & LEADERSHIP DEVELOPMENT
PROFITABLE REVENUE GROWTH
DIFFERENTIATING PRODUCT BREADTH
INTERNATIONAL EXPANSION
OBSESSIVE CUSTOMER CENTRICITY
INNOVATION AND EXECUTION
GOALS
Strategic Initiatives
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TECHNOLOGY | INNOVATION | SOLUTIONS
TONY PRITCHETT
Chief Financial Officer
Tony is a certified public accountant who joined Agilysys in 2012 as controller of the Retail Solutions Group, bringing
with him prior financial experience with software and SaaS companies.
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 significant increases in shareholder value.
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Senior Management Leading New Growth Vision
KYLE C. BADGER
Senior Vice President, General Counsel and Secretary
Kyle leads our global legal and human resources teams, and brings over 22 years of legal experience representing
public and private companies in general corporate matters.
DON DEMARINIS
Senior Vice President Sales, Americas
Don brings extensive industry experience and success at Oracle and Micros selling hospitality technology and
services to global clients across markets where he led sales increases of up to 30% per annum.
TECHNOLOGY | INNOVATION | SOLUTIONS
SRIDHAR LAVETI
Vice President of Established Products and Customer Support
Sridhar leads the product engineering and management teams for established Agilysys products and oversees
customer support. He brings 25+ years of technology and general management leadership across multiple industries.
ROB JACKS
Vice President of Professional Services
Rob is responsible for building and delivering a high-caliber professional services team. As a prior CIO in gaming, Rob
brings a reputation as a transformational executive who can deploy complex solutions with a measurable ROI.
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Senior Management Leading New Growth Vision
LARRY STEINBERG
Senior Vice President and Chief Technology Officer
Larry leads many of the key new product initiatives at Agilysys. Prior to Agilysys, as a Development Manager for
Microsoft, he focused on automation, interoperability, cross-platform, and cloud and datacenter solutions.
PRAKASH BHAT
Vice President and Managing Director (India)
Prakash brings 30+ years of practical experience in technology and management with an impressive track record of
building new companies to create a strong market presence for established organizations in new locations.
FINANCIAL OVERVIEW
TECHNOLOGY | INNOVATION | SOLUTIONS
Financial Metrics and Valuation (*TTM)
Share Price (3/7/18) $11.55
Diluted Shares Outstanding 22.8M
Diluted Market Capitalization $263.3M
Cash (as of 12/31/17) $37.6M
Debt (as of 12/31/17) $0.2M
Enterprise Value $225.9M
Revenue $125.9M
Gross Profit $63.1M
Adjusted EBITDA^ $5.8M
Adjusted Earnings from Operations^ ($10.3M)
Earnings per Share ($0.59)
EV/Revenue 1.8x
EV/Gross Profit 3.6x
Business Metrics (as of 12/31/17)
Direct POS End Points Managed
Y/Y Growth
~45k
17%
Direct Hotel Rooms Managed
Y/Y Growth
~255k
5%
Recurring Revenue*
As % of Total Revenue
53%
Subscription Revenue*
As % of Recurring Revenue
28%
Subscription Revenue Growth Y/Y 26%
rGuest as % of Total Revenue* 7%
New Customer Count* 85
^Non-GAAP measure, see reconciliation on slide 25.
*Trailing twelve months ended December 31, 2017.
Evolving Business, Evolving P&L
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TECHNOLOGY | INNOVATION | SOLUTIONS
Consolidated Balance Sheet (in thousands)
March 31, 2017 December 31, 2017
Cash, Cash Equivalents and Marketable Securities $49,255 $37,615
Other Current Assets 24,265 23,726
Long-Term Assets 93,785 94,577
Total Assets $167,305 $155,918
Current Liabilities $46,337 $41,564
Other Liabilities 7,299 6,140
Total Liabilities $53,636 $47,704
Shareholders’ Equity 113,669 108,214
Total Liabilities and Shareholders’ Equity $167,305 $155,918
Strong Balance Sheet
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TECHNOLOGY | INNOVATION | SOLUTIONS
All numbers in thousands, except per share data
*Trailing twelve months ended December 31, 2017.
^ Non-GAAP measure, see reconciliation on slide 25.
$103,514
$120,366 $127,678 $125,907
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
FY15 FY16 FY17 TTM*
Revenue
($19,288)
($16,661)
($11,568) ($10,319)
($22,000)
($17,000)
($12,000)
($7,000)
($2,000)
FY15 FY16 FY17 TTM*
Adjusted Earnings from Operations^
$1,174
$4,287 $4,478
$5,787
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
FY15 FY16 FY17 TTM*
Adjusted EBITDA^
($11,497)
($3,765)
($11,721)
($13,425) ($16,000)
($11,000)
($6,000)
($1,000)
FY15 FY16 FY17 TTM*
Net Loss
Historical Financial Results
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Three
Consecutive
Quarters
with Adj.
EBITDA
over $1.5M
Record
Revenue
Quarter
(Q1)
APPENDIX
TECHNOLOGY | INNOVATION | SOLUTIONS
*Trailing twelve months ended December 31, 2017.
Non-GAAP Reconciliation
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TTM* 2017 2016 2015
Net loss (13,425)$ (11,721)$ (3,765)$ (11,497)$
Income tax expense (benefit) (1,455) 236 6 (1,054)
Loss before taxes (14,880) (11,485) (3,759) (12,551)
Depreciation of fixed assets 2,510 2,409 2,199 2,225
Amortization of intangibles 1,782 1,392 1,243 3,461
Amortization of developed technology 9,678 8,012 1,022 1,294
Interest income (81) (147) (63) (62)
EBITDA (b) (991) 181 642 (5,633)
Share-based compensation 5,421 2,427 3,405 3,141
Restructuring, severance and other charges 1,318 1,561 283 1,482
Asset write-offs and other fair value adjustments - - 180 1,836
Other non-operating (income) expense (111) 224 (491) 146
Legal settlements 150 85 268 203
Adjusted EBITDA (a) 5,787$ 4,478$ 4,287$ 1,174$
Capital expenditures (6,120) (4,158) (5,900) (4,650)
Capitalized software development costs (9,986) (11,888) (15,048) (15,813)
Adjusted Earnings from Operations (c) (10,319)$ (11,568)$ (16,661)$ (19,288)$
(a) 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
(b) EBITDA is defined as net income before income taxes, interest expense, depreciation and amortization
(c) Adjusted Earnings from Operations, a non-GAAP financial measure, is defined as Adjusted EBITDA,
less capital expe ditures and capitalized software development costs
AGILYSYS, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EARNINGS FROM OPERATIONS
(UNAUDITED)
(In thousands)
Twelve Months Ended
March 31
TECHNOLOGY | INNOVATION | SOLUTIONS
Cash Flow
*Trailing twelve months ended December 31, 2017.
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Principal Location
Country with Installation
Reseller
Santa Barbara, CA
Seattle, WA
Las Vegas, NV
Alpharetta, GA
Windsor, UK
Hong Kong
Manila, Philippines
Singapore
Kuala Lumpur, Malaysia
Chennai, India
Agilysys Corporate Services
• Alpharetta, Georgia
Agilysys US Offices
• Las Vegas, Nevada
• Santa Barbara, California
• Bellevue, Washington
Agilysys EMEA Office
• United Kingdom
Agilysys APAC Offices
• Hong Kong
• Malaysia
• Philippines
• Singapore
Agilysys Demonstration Centers
• Alpharetta, Georgia
• Las Vegas, Nevada
India Development Center
• Chennai, India
Agilysys Global Footprint
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Contact:
Richard Land / Norberto Aja
JCIR
(212) 835-8500
agys@jcir.com
Tony Pritchett
Chief Financial Officer
(770) 810-7941
InvestorRelations@agilysys.com
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