þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended March 31, 2018
|
or
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For transition period from to
|
Ohio
|
34-0907152
|
State or other jurisdiction of incorporation or organization
|
(I.R.S. Employer Identification No.)
|
|
|
1000 Windward Concourse, Suite 250, Alpharetta, Georgia
|
30005
|
(Address of principal executive offices)
|
(Zip Code)
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Title of each class
|
Name of each exchange on which registered
|
Common Shares, without par value
|
The NASDAQ Stock Market LLC
|
|
|
Page
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PART I
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|
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ITEM 1.
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Business
|
|
ITEM 1A.
|
Risk Factors
|
|
ITEM 1B.
|
Unresolved Staff Comments
|
|
ITEM 2.
|
Properties
|
|
ITEM 3.
|
Legal Proceedings
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|
ITEM 4.
|
Mine Safety Disclosures
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|
|
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PART II
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|
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ITEM 5.
|
Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
|
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ITEM 6.
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Selected Financial Data
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|
ITEM 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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ITEM 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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|
ITEM 8.
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Financial Statements and Supplementary Data
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|
ITEM 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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ITEM 9A.
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Controls and Procedures
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ITEM 9B.
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Other Information
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PART III
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ITEM 10.
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Directors, Executive Officers and Corporate Governance
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ITEM 11.
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Executive Compensation
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ITEM 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
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ITEM 13.
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Certain Relationships and Related Transactions, and Director Independence
|
|
ITEM 14.
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Principal Accountant Fees and Services
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PART IV
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ITEM 15.
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Exhibits and Financial Statement Schedules
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SIGNATURES
|
|
|
|
|
|
|
|
|
•
|
Products (hardware and software)
|
•
|
Support, maintenance and subscription services
|
•
|
Professional services
|
|
Year ended March 31,
|
||||||||
(In thousands)
|
2018
|
2017
|
2016
|
||||||
Products
|
$
|
33,699
|
|
$
|
38,339
|
|
$
|
41,445
|
|
Support, maintenance and subscription services
|
69,068
|
|
63,308
|
|
60,104
|
|
|||
Professional services
|
24,593
|
|
26,031
|
|
18,817
|
|
|||
Total
|
$
|
127,360
|
|
$
|
127,678
|
|
$
|
120,366
|
|
•
|
Identifying and tracking guest profile and behavior so that it may be used to create effective loyalty programs using guest-specific promotions and offers to ensure the best guest experience while ensuring the property extracts the maximum wallet share from each customer;
|
•
|
Enabling historical analysis of data to continuously improve operations and grow revenue opportunities;
|
•
|
Allowing for real-time management through mobile and web interfaces for immediate remediation of business and guest related issues;
|
•
|
Creating a framework of core services for the delivery of business applications faster with the critical benefit of having fewer moving parts to manage;
|
•
|
Ensuring that all new rGuest modules will be written on top of the rGuest platform to leverage common look/feel, functions and usage paradigms that reduce the overhead of managing and learning multiple systems;
|
•
|
Providing for easy integration with other hospitality management systems; and,
|
•
|
Incorporating key infrastructure design elements such as global and multi-language support, regulatory compliance and security, including authentication, authorization, encryption, tokenization, handling of payment & PII information and overall application data and user security.
|
•
|
Identifying the most valuable data and determining how best to use it;
|
•
|
Empowering users to be capable of both working with new technologies and of interpreting the data to find meaningful business insights;
|
•
|
Creating data access and connectivity across the majority of guest touch points;
|
•
|
Providing an IT platform that can efficiently adapt to changes in the landscape;
|
•
|
Working across business functions' organizational challenges and finding ways to enhance cross-team collaboration; and,
|
•
|
Implementing the highest levels of security to ensure data protection.
|
•
|
Extensibility and a partner ecosystem: The technology architecture allows for rich data integrations for all Agilysys products (InfoGenesis, rGuest Pay, rGuest Analyze, etc.), as well as easy integration with a partner development ecosystem, as well as customer developed applications.
|
•
|
“Self-managed” Cloud Solution: Fully managed cloud solution pushes latest releases, patches and features automatically to all rGuest Buy devices at the property. This ensures quicker support turn-around times, zero on-site IT resources for maintenance, robust security and uptimes.
|
•
|
“Always on” Business - No offline interruptions: rGuest Buy offers an “always-on” customer experience with robust network tolerance and offline processing capabilities.
|
•
|
Manage at Scale: rGuest Buy allows customers to map a complex business structure in an intuitive way to support propagation of brands, concepts, and other policies.
|
•
|
Reduce Risk - PCI validated payment platform: rGuest Buy integrates with rGuest Pay, our secure payment platform. Customers protect brand value and avoid liability with our encrypted card data solution, and safeguard against fraud and chargebacks by implementing EMV solutions, while protecting application data via SSL.
|
•
|
A full suite of credit card processing services
|
•
|
Industry-leading payment security through tokenization and P2PE
|
•
|
Flexible hardware supporting EMV and NFC contactless transactions
|
•
|
Integration with 3rd Party POS/PMS applications through a simple-to-use API
|
•
|
Consolidated transaction reporting
|
•
|
Comprehensive payment processor support
|
•
|
Support for Pay-at-Table devices
|
•
|
Streamlined online reservations that increase guest bookings without tying staff up on the phone
|
•
|
Wait-list automation to accurately predict wait times and meet guest expectations
|
•
|
Two-way text communications with waiting guests to optimize the guest experience
|
•
|
A complete view of reservation or wait-list status across restaurants within a peer group
|
•
|
Accessibility of guest data based on their previous dining experiences to provide a much higher level of guest service
|
•
|
A library of configurable reports that can be accessed in real time or received through email at a scheduled delivery time
|
•
|
Integration with InfoGenesis that allows the POS system to be automatically updated with guest data for a more personalized dining experience
|
•
|
Real-time table status to be relayed between rGuest Seat and InfoGenesis (POS) to help maximize table turns and keep restaurant operations and reservations running smoothly
|
•
|
Centralized enterprise reporting across sites, venues and profit centers
|
•
|
Slice-and-dice analysis without the need for IT/DBA resources that provides immediate insight into food & beverage as well as lodging operations
|
•
|
Out-of-the-box customizable reports that provide insight into sales, revenue, server/cashier activity, discounts, tenders, ADR, RevPAR, and Occupancy
|
•
|
Easy to learn, web-based reporting tools with simple drag-and-drop capabilities for fast data exploration and report generation
|
•
|
Executive level dashboards that are as easy to design, publish and disseminate as creating a word document with both web and mobile views
|
•
|
|
•
|
|
•
|
|
•
|
|
•
|
|
•
|
Agilysys Insight™ Mobile Manager is a mobile dashboard application that enables hotel managers to quickly view key property information - including arrivals and departures, VIPs, total guests, housekeeping status, revenue and groups - from a mobile device. It supports Apple iPad®, iPad mini and iPhone® mobile devices and integrates fully with the Agilysys LMS property management solution.
|
•
|
|
•
|
|
•
|
|
•
|
|
•
|
|
•
|
|
•
|
|
•
|
|
•
|
|
•
|
|
AVI Foodsystems, Inc.
|
CSU Fullerton Auxiliary Services Corporation
|
Resorts World Bimini
|
Banner Health
|
Drury Hotels
|
Rosen Hotels & Resorts
|
Benchmarc Restaurants
|
Farmers Restaurant Group
|
Royal Caribbean International
|
Black Rock Resort
|
Golden Nugget Lake Charles
|
Royal Lahaina Resort
|
Boyd Gaming Corporation
|
Grand Sierra Resort and Casino
|
Sands Casino Resort Bethlehem
|
BR Guest Hospitality
|
Harbor Winds Hotel
|
SAVOR
|
The Broadmoor's Ranch at Emerald Valley
|
Hialeah Park
|
Spooky Nook Sports
|
Caesars Entertainment
|
Hilton Worldwide
|
Sugar Factory
|
Cal Dining at UC Berkeley
|
Ho-Chunk Gaming
|
SUNY Cobleskill
|
Camelback Lodge & Waterpark
|
Maryland Live! Casino
|
The Venetian Resort Hotel Casino
|
Casa Ybel Resort
|
Norwegian Cruise Line
|
University of Akron
|
Casino del Sol Resort
|
Oxford Casino
|
Vail Resorts
|
Compass Group North America
|
Palm Garden Hotel
|
Valley View Casino & Hotel
|
Comanche Nation of Oklahoma
|
Pinehurst Resort
|
Vanderbilt University
|
Copper Mountain
|
Pinnacle Entertainment
|
Yale University
|
The Cosmopolitan of Las Vegas
|
Prairie Band Casino & Resort
|
|
•
|
Managing the length of the development cycle for new products and product enhancements, which has frequently been longer than we originally expected;
|
•
|
Adapting to emerging and evolving industry standards and to technological developments by our competitors and customers; and
|
•
|
Extending the operation of our products and services to new and evolving platforms, operating systems and hardware products, such as mobile devices.
|
•
|
economic news or other events generally affecting the trading markets;
|
•
|
our operating results failing to meet the expectation of securities analysts or investors in a particular period or failure of securities analysts to publish reports about us or our business;
|
•
|
announcements by us or our competitors of acquisitions, new offerings or improvements, significant contracts, commercial relationships or capital commitments;
|
•
|
our ability to market new and enhanced solutions on a timely basis;
|
•
|
any major change in our board or management; general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
|
2018
|
High
|
|
Low
|
||||
Fourth quarter
|
$
|
13.00
|
|
|
$
|
10.77
|
|
Third quarter
|
$
|
12.98
|
|
|
$
|
11.30
|
|
Second quarter
|
$
|
12.14
|
|
|
$
|
9.80
|
|
First quarter
|
$
|
10.30
|
|
|
$
|
9.08
|
|
|
|
|
|
||||
2017
|
High
|
|
Low
|
||||
Fourth quarter
|
$
|
11.07
|
|
|
$
|
8.60
|
|
Third quarter
|
$
|
11.29
|
|
|
$
|
8.17
|
|
Second quarter
|
$
|
12.00
|
|
|
$
|
9.82
|
|
First quarter
|
$
|
12.15
|
|
|
$
|
9.13
|
|
INDEXED RETURNS
|
||||||||||||||||||
|
|
Fiscal Years Ended March 31,
|
||||||||||||||||
|
Base Period
|
|
|
|
|
|
||||||||||||
Company Name / Index
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
||||||||||||
Agilysys, Inc.
|
$
|
100.00
|
|
$
|
134.81
|
|
$
|
98.99
|
|
$
|
102.72
|
|
$
|
95.07
|
|
$
|
119.92
|
|
Russell 2000
|
$
|
100.00
|
|
$
|
124.90
|
|
$
|
135.15
|
|
$
|
121.96
|
|
$
|
153.94
|
|
$
|
172.09
|
|
Peer Group
|
$
|
100.00
|
|
$
|
133.75
|
|
$
|
158.50
|
|
$
|
136.61
|
|
$
|
168.19
|
|
$
|
222.30
|
|
|
Year ended March 31,
|
||||||||||||||
(In thousands, except per share data)
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
Operating results
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
127,360
|
|
$
|
127,678
|
|
$
|
120,366
|
|
$
|
103,514
|
|
$
|
101,261
|
|
Gross profit
|
64,417
|
|
63,785
|
|
68,106
|
|
60,081
|
|
64,040
|
|
|||||
Operating loss
|
(12,080
|
)
|
(11,408
|
)
|
(4,313
|
)
|
(12,467
|
)
|
(6,188
|
)
|
|||||
Loss from continuing operations, net of taxes
|
(8,350
|
)
|
(11,721
|
)
|
(3,765
|
)
|
(11,497
|
)
|
(2,895
|
)
|
|||||
Income from discontinued operations, net of taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
19,992
|
|
|||||
Net (loss) income
|
$
|
(8,350
|
)
|
$
|
(11,721
|
)
|
$
|
(3,765
|
)
|
$
|
(11,497
|
)
|
$
|
17,097
|
|
|
|
|
|
|
|
||||||||||
Per share data (1)
|
|
|
|
|
|
||||||||||
Basic and diluted
|
|
|
|
|
|
||||||||||
Loss from continuing operations
|
$
|
(0.37
|
)
|
$
|
(0.52
|
)
|
$
|
(0.17
|
)
|
$
|
(0.51
|
)
|
$
|
(0.13
|
)
|
Income from discontinued operations
|
—
|
|
—
|
|
—
|
|
—
|
|
0.90
|
|
|||||
Net (loss) income
|
$
|
(0.37
|
)
|
$
|
(0.52
|
)
|
$
|
(0.17
|
)
|
$
|
(0.51
|
)
|
$
|
0.77
|
|
|
|
|
|
|
|
||||||||||
Weighted-average shares outstanding - basic and diluted
|
22,801
|
|
22,615
|
|
22,483
|
|
22,338
|
|
22,135
|
|
|||||
|
|
|
|
|
|
||||||||||
Balance sheet data at year end
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
39,943
|
|
$
|
49,255
|
|
$
|
60,608
|
|
$
|
75,067
|
|
$
|
99,566
|
|
Working capital
|
19,343
|
|
27,183
|
|
41,401
|
|
54,407
|
|
81,711
|
|
|||||
Total assets
|
157,207
|
|
167,305
|
|
185,157
|
|
181,525
|
|
190,895
|
|
|||||
Total debt
|
177
|
|
237
|
|
333
|
|
189
|
|
335
|
|
|||||
Total shareholders’ equity
|
108,431
|
|
113,669
|
|
123,473
|
|
124,188
|
|
132,873
|
|
•
|
Accelerating our product development
|
•
|
Growing revenue by improving the breadth and depth of our product set across both our well established products and our newer rGuest platform
|
•
|
Products revenue – Revenue earned from the sales of hardware equipment and proprietary and remarketed software.
|
•
|
Support, maintenance and subscription services revenue – Revenue earned from the sale of proprietary and remarketed ongoing support, maintenance and subscription or hosting services.
|
•
|
Professional services revenue – Revenue earned from the delivery of implementation, integration and installation services for proprietary and remarketed products.
|
|
Year ended March 31,
|
|
Increase (decrease)
|
|||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
33,699
|
|
|
$
|
38,339
|
|
|
$
|
(4,640
|
)
|
|
(12.1
|
)%
|
Support, maintenance and subscription services
|
69,068
|
|
|
63,308
|
|
|
5,760
|
|
|
9.1
|
%
|
|||
Professional services
|
24,593
|
|
|
26,031
|
|
|
(1,438
|
)
|
|
(5.5
|
)%
|
|||
Total net revenue
|
127,360
|
|
|
127,678
|
|
|
(318
|
)
|
|
(0.2
|
)%
|
|||
Cost of goods sold:
|
|
|
|
|
|
|
|
|||||||
Products, inclusive of developed technology amortization
|
26,381
|
|
|
28,244
|
|
|
(1,863
|
)
|
|
(6.6
|
)%
|
|||
Support, maintenance and subscription services
|
16,688
|
|
|
16,965
|
|
|
(277
|
)
|
|
(1.6
|
)%
|
|||
Professional services
|
19,874
|
|
|
18,684
|
|
|
1,190
|
|
|
6.4
|
%
|
|||
Total cost of goods sold
|
62,943
|
|
|
63,893
|
|
|
(950
|
)
|
|
(1.5
|
)%
|
|||
Gross profit
|
64,417
|
|
|
63,785
|
|
|
632
|
|
|
1.0
|
%
|
|||
Gross profit margin
|
50.6
|
%
|
|
50.0
|
%
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Product development
|
27,936
|
|
|
29,048
|
|
|
(1,112
|
)
|
|
(3.8
|
)%
|
|||
Sales and marketing
|
18,075
|
|
|
20,823
|
|
|
(2,748
|
)
|
|
(13.2
|
)%
|
|||
General and administrative
|
24,028
|
|
|
19,875
|
|
|
4,153
|
|
|
20.9
|
%
|
|||
Depreciation of fixed assets
|
2,631
|
|
|
2,409
|
|
|
222
|
|
|
9.2
|
%
|
|||
Amortization of intangibles
|
1,879
|
|
|
1,392
|
|
|
487
|
|
|
35.0
|
%
|
|||
Restructuring, severance and other charges
|
1,798
|
|
|
1,561
|
|
|
237
|
|
|
15.2
|
%
|
|||
Legal settlements
|
150
|
|
|
85
|
|
|
65
|
|
|
76.5
|
%
|
|||
Operating loss
|
$
|
(12,080
|
)
|
|
$
|
(11,408
|
)
|
|
$
|
(672
|
)
|
|
5.9
|
%
|
Operating loss percentage
|
(9.5
|
)%
|
|
(8.9
|
)%
|
|
|
|
|
|
Year ended March 31,
|
|
(Unfavorable) favorable
|
|||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Other (income) expense:
|
|
|
|
|
|
|
|
|||||||
Interest income
|
$
|
(98
|
)
|
|
$
|
(162
|
)
|
|
$
|
(64
|
)
|
|
(39.5
|
)%
|
Interest expense
|
10
|
|
|
15
|
|
|
5
|
|
|
33.3
|
%
|
|||
Other (income) expense, net
|
(391
|
)
|
|
224
|
|
|
615
|
|
|
nm
|
|
|||
Total other (income) expense, net
|
$
|
(479
|
)
|
|
$
|
77
|
|
|
$
|
556
|
|
|
nm
|
|
|
Year ended March 31,
|
|
(Unfavorable)
favorable
|
||||||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
||||||
Income tax (benefit) expense
|
$
|
(3,251
|
)
|
|
$
|
236
|
|
|
$
|
3,487
|
|
|
nm
|
Effective tax rate
|
(28.0
|
)%
|
|
(2.1
|
)%
|
|
|
|
|
|
Year ended March 31,
|
|
Increase (decrease)
|
|||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
38,339
|
|
|
$
|
41,445
|
|
|
$
|
(3,106
|
)
|
|
(7.5
|
)%
|
Support, maintenance and subscription services
|
63,308
|
|
|
60,104
|
|
|
3,204
|
|
|
5.3
|
%
|
|||
Professional services
|
26,031
|
|
|
18,817
|
|
|
7,214
|
|
|
38.3
|
%
|
|||
Total net revenue
|
127,678
|
|
|
120,366
|
|
|
7,312
|
|
|
6.1
|
%
|
|||
Cost of goods sold:
|
|
|
|
|
|
|
|
|||||||
Products, inclusive of developed technology amortization
|
28,244
|
|
|
23,326
|
|
|
4,918
|
|
|
21.1
|
%
|
|||
Support, maintenance and subscription services
|
16,965
|
|
|
15,394
|
|
|
1,571
|
|
|
10.2
|
%
|
|||
Professional services
|
18,684
|
|
|
13,540
|
|
|
5,144
|
|
|
38.0
|
%
|
|||
Total cost of goods sold
|
63,893
|
|
|
52,260
|
|
|
11,633
|
|
|
22.3
|
%
|
|||
Gross profit
|
63,785
|
|
|
68,106
|
|
|
(4,321
|
)
|
|
(6.3
|
)%
|
|||
Gross profit margin
|
50.0
|
%
|
|
56.6
|
%
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Product development
|
29,048
|
|
|
26,688
|
|
|
2,360
|
|
|
8.8
|
%
|
|||
Sales and marketing
|
20,823
|
|
|
19,740
|
|
|
1,083
|
|
|
5.5
|
%
|
|||
General and administrative
|
19,875
|
|
|
21,818
|
|
|
(1,943
|
)
|
|
(8.9
|
)%
|
|||
Depreciation of fixed assets
|
2,409
|
|
|
2,199
|
|
|
210
|
|
|
9.5
|
%
|
|||
Amortization of intangibles
|
1,392
|
|
|
1,243
|
|
|
149
|
|
|
12.0
|
%
|
|||
Restructuring, severance and other charges
|
1,561
|
|
|
283
|
|
|
1,278
|
|
|
451.6
|
%
|
|||
Impairments and other fair value adjustments
|
—
|
|
|
180
|
|
|
(180
|
)
|
|
(100.0
|
)%
|
|||
Legal settlements
|
85
|
|
|
268
|
|
|
(183
|
)
|
|
(68.3
|
)%
|
|||
Operating loss
|
$
|
(11,408
|
)
|
|
$
|
(4,313
|
)
|
|
$
|
(7,095
|
)
|
|
164.5
|
%
|
Operating loss percentage
|
(8.9
|
)%
|
|
(3.6
|
)%
|
|
|
|
|
•
|
CEO separation benefits and related transition costs.
During fiscal 2017, the company incurred costs associated with the replacement of the former CEO, including $0.8 million in separation benefits and $0.3 million in search fees in connection with identifying a successor CEO.
|
•
|
Restructuring related severance and early contract termination costs.
During fiscal 2017, we completed activities associated with the partnership to resell a third party workforce management solution, and recorded $0.2 million in restructuring charges comprised of severance and other employee related benefits and early contract termination costs. We do not anticipate any additional costs associated with this restructuring activity.
|
•
|
Intangible write-off (Developed Technology)
. During fiscal 2016, in connection with the partnership entered into to resell a third party workforce management solution, we determined that the remaining net book value of the acquired developed technology WMx®™ exceeded its net realizable value resulting in an impairment charge of $0.3 million.
|
•
|
Product transition cost fair value adjustment.
During fiscal 2016, we recorded a gain of $0.2 million related to the write-off of product transition costs previously accrued for in connection with an impairment of our Guest 360™ property management solution in fiscal 2012. The customer associated with this residual reserve became insolvent during the second quarter of fiscal 2016.
|
•
|
Contingent consideration fair value adjustment.
During fiscal 2016, we adjusted the fair value of the TimeManagement Corporation (TMC) by $0.1 million to reflect expected settlement and early termination in connection with our strategic transition to enter into a partnership to resell a third party workforce management solution.
|
|
Year ended March 31,
|
|
(Unfavorable) favorable
|
|||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
Other (income) expenses
|
|
|
|
|
|
|
|
|||||||
Interest income
|
$
|
(162
|
)
|
|
$
|
(92
|
)
|
|
$
|
70
|
|
|
76.1
|
%
|
Interest expense
|
15
|
|
|
29
|
|
|
14
|
|
|
48.3
|
%
|
|||
Other (income) expense, net
|
224
|
|
|
(491
|
)
|
|
(715
|
)
|
|
145.6
|
%
|
|||
Total other (income) expense, net
|
$
|
77
|
|
|
$
|
(554
|
)
|
|
$
|
(631
|
)
|
|
113.9
|
%
|
|
Year ended March 31,
|
|
(Unfavorable) favorable
|
||||||||||
(Dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||
Income tax benefit
|
$
|
236
|
|
|
$
|
6
|
|
|
$
|
(230
|
)
|
|
nm
|
Effective tax rate
|
(2.1
|
)%
|
|
0.2
|
%
|
|
|
|
|
|
Year ended March 31,
|
||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash (used in) provided by continuing operations:
|
|
|
|
|
|
||||||
Operating activities
|
$
|
6,874
|
|
|
$
|
3,433
|
|
|
$
|
7,218
|
|
Investing activities
|
(15,085
|
)
|
|
(13,865
|
)
|
|
(21,013
|
)
|
|||
Financing activities
|
(1,295
|
)
|
|
(847
|
)
|
|
(577
|
)
|
|||
Effect of exchange rate changes on cash
|
194
|
|
|
(74
|
)
|
|
(87
|
)
|
|||
Cash flows (used in) provided by continuing operations
|
$
|
(9,312
|
)
|
|
$
|
(11,353
|
)
|
|
$
|
(14,459
|
)
|
|
|
|
|
|
|
||||||||||
(In thousands)
|
Total
|
2019
|
2020-2021
|
2022-2023
|
Thereafter
|
||||||||||
Operating leases (1)
|
$
|
14,869
|
|
$
|
3,751
|
|
$
|
6,843
|
|
$
|
3,558
|
|
$
|
717
|
|
Capital leases
|
193
|
|
129
|
|
64
|
|
—
|
|
—
|
|
|||||
Asset retirement obligation
|
400
|
|
—
|
|
150
|
|
250
|
|
|
|
|||||
Total contractual obligations (2)
|
$
|
15,462
|
|
$
|
3,880
|
|
$
|
7,057
|
|
$
|
3,808
|
|
$
|
717
|
|
(1)
|
Operating lease obligations are presented net of contractually binding sub-lease arrangements. Additional information regarding our operating lease obligations is contained in Note 11,
Commitments and Contingencies.
|
|
|
(2)
|
At March 31, 2018, we had a $1.5 million liability reserve for unrecognized income tax positions which is not reflected in the table above. The timing of potential cash outflows related to the unrecognized tax positions is not reasonably determinable and therefore, is not scheduled. Substantially all of this reserve is included in Other non-current liabilities. Additional information regarding unrecognized tax positions is provided in Note 9 to the Consolidated Financial Statements titled,
Income Taxes.
|
|
Page
|
Reports of Independent Registered Public Accounting Firm - Grant Thornton LLP
|
|
Consolidated Balance Sheets as of March 31, 2018 and 2017
|
|
Consolidated Statements of Operations for the years ended March 31, 2018, 2017, and 2016
|
|
Consolidated Statements of Comprehensive Loss for the years ended March 31, 2018, 2017, and 2016
|
|
Consolidated Statements of Cash Flows for the years ended March 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Shareholders' Equity for the years ended March 31, 2018, 2017, and 2016
|
|
Notes to Consolidated Financial Statements
|
|
Schedule II - Valuation and Qualifying Accounts for the years ended March 31, 2018, 2017, and 2016
|
|
As of March 31,
|
||||||
(In thousands, except share data)
|
2018
|
|
2017
|
||||
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
39,943
|
|
|
$
|
49,255
|
|
Accounts receivable, net of allowance for doubtful accounts of $900 and $509, respectively
|
16,389
|
|
|
15,598
|
|
||
Inventories
|
1,999
|
|
|
2,211
|
|
||
Prepaid expenses and other current assets
|
5,593
|
|
|
6,456
|
|
||
Total current assets
|
63,924
|
|
|
73,520
|
|
||
Property and equipment, net
|
17,512
|
|
|
16,000
|
|
||
Goodwill
|
19,622
|
|
|
19,622
|
|
||
Intangible assets, net
|
8,484
|
|
|
8,530
|
|
||
Software development costs, net
|
45,181
|
|
|
46,999
|
|
||
Other non-current assets
|
2,484
|
|
|
2,634
|
|
||
Total assets
|
$
|
157,207
|
|
|
$
|
167,305
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
8,400
|
|
|
$
|
8,702
|
|
Deferred revenue
|
26,820
|
|
|
29,183
|
|
||
Accrued liabilities
|
9,241
|
|
|
8,331
|
|
||
Capital lease obligations, current
|
120
|
|
|
121
|
|
||
Total current liabilities
|
44,581
|
|
|
46,337
|
|
||
Deferred income taxes, non-current
|
227
|
|
|
3,181
|
|
||
Capital lease obligations, non-current
|
57
|
|
|
116
|
|
||
Other non-current liabilities
|
3,911
|
|
|
4,002
|
|
||
Commitments and contingencies (see Note 11)
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 23,324,679 and 23,210,682 shares outstanding at March 31, 2018 and March 31, 2017, respectively
|
9,482
|
|
|
9,482
|
|
||
Treasury shares, 8,282,152 and 8,396,149 at March 31, 2018 and March 31, 2017, respectively
|
(2,486
|
)
|
|
(2,519
|
)
|
||
Capital in excess of stated value
|
(1,911
|
)
|
|
(5,782
|
)
|
||
Retained earnings
|
103,601
|
|
|
112,692
|
|
||
Accumulated other comprehensive loss
|
(255
|
)
|
|
(204
|
)
|
||
Total shareholders' equity
|
108,431
|
|
|
113,669
|
|
||
Total liabilities and shareholders' equity
|
$
|
157,207
|
|
|
$
|
167,305
|
|
|
Year ended March 31,
|
||||||||||
(In thousands, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenue:
|
|
|
|
|
|
||||||
Products
|
$
|
33,699
|
|
|
$
|
38,339
|
|
|
$
|
41,445
|
|
Support, maintenance and subscription services
|
69,068
|
|
|
63,308
|
|
|
60,104
|
|
|||
Professional services
|
24,593
|
|
|
26,031
|
|
|
18,817
|
|
|||
Total net revenue
|
127,360
|
|
|
127,678
|
|
|
120,366
|
|
|||
Cost of goods sold:
|
|
|
|
|
|
||||||
Products, inclusive of developed technology amortization
|
26,381
|
|
|
28,244
|
|
|
23,326
|
|
|||
Support, maintenance and subscription services
|
16,688
|
|
|
16,965
|
|
|
15,394
|
|
|||
Professional services
|
19,874
|
|
|
18,684
|
|
|
13,540
|
|
|||
Total cost of goods sold
|
62,943
|
|
|
63,893
|
|
|
52,260
|
|
|||
Gross profit
|
64,417
|
|
|
63,785
|
|
|
68,106
|
|
|||
Gross profit margin
|
50.6
|
%
|
|
50.0
|
%
|
|
56.6
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Product development
|
27,936
|
|
|
29,048
|
|
|
26,688
|
|
|||
Sales and marketing
|
18,075
|
|
|
20,823
|
|
|
19,740
|
|
|||
General and administrative
|
24,028
|
|
|
19,875
|
|
|
21,818
|
|
|||
Depreciation of fixed assets
|
2,631
|
|
|
2,409
|
|
|
2,199
|
|
|||
Amortization of intangibles
|
1,879
|
|
|
1,392
|
|
|
1,243
|
|
|||
Restructuring, severance and other charges
|
1,798
|
|
|
1,561
|
|
|
283
|
|
|||
Impairments and other fair value adjustments
|
—
|
|
|
—
|
|
|
180
|
|
|||
Legal settlements
|
150
|
|
|
85
|
|
|
268
|
|
|||
Total operating expense
|
76,497
|
|
|
75,193
|
|
|
72,419
|
|
|||
Operating loss
|
(12,080
|
)
|
|
(11,408
|
)
|
|
(4,313
|
)
|
|||
Other (income) expense:
|
|
|
|
|
|
||||||
Interest income
|
(98
|
)
|
|
(162
|
)
|
|
(92
|
)
|
|||
Interest expense
|
10
|
|
|
15
|
|
|
29
|
|
|||
Other (income) expense, net
|
(391
|
)
|
|
224
|
|
|
(491
|
)
|
|||
Loss before taxes
|
(11,601
|
)
|
|
(11,485
|
)
|
|
(3,759
|
)
|
|||
Income tax (benefit) expense
|
(3,251
|
)
|
|
236
|
|
|
6
|
|
|||
Net loss
|
$
|
(8,350
|
)
|
|
$
|
(11,721
|
)
|
|
$
|
(3,765
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding - basic and diluted
|
22,801
|
|
|
22,615
|
|
|
22,483
|
|
|||
|
|
|
|
|
|
||||||
Net loss per share-basic and diluted
|
$
|
(0.37
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(0.17
|
)
|
|
Year ended March 31,
|
|||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss
|
|
$
|
(8,350
|
)
|
|
$
|
(11,721
|
)
|
|
$
|
(3,765
|
)
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
||||||
Unrealized foreign currency translation adjustments
|
|
(51
|
)
|
|
(27
|
)
|
|
(26
|
)
|
|||
Total comprehensive loss
|
|
$
|
(8,401
|
)
|
|
$
|
(11,748
|
)
|
|
$
|
(3,791
|
)
|
(In thousands)
|
Year ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(8,350
|
)
|
|
$
|
(11,721
|
)
|
|
$
|
(3,765
|
)
|
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Net restructuring, severance and other charges
|
227
|
|
|
(224
|
)
|
|
(333
|
)
|
|||
Net legal settlements
|
—
|
|
|
(100
|
)
|
|
185
|
|
|||
Impairments and other fair value adjustments
|
—
|
|
|
—
|
|
|
87
|
|
|||
Loss on disposal of property & equipment
|
—
|
|
|
70
|
|
|
381
|
|
|||
Depreciation
|
2,631
|
|
|
2,409
|
|
|
2,199
|
|
|||
Amortization
|
1,879
|
|
|
1,392
|
|
|
1,243
|
|
|||
Amortization of developed technology
|
10,016
|
|
|
8,012
|
|
|
1,022
|
|
|||
Share-based compensation
|
4,688
|
|
|
2,427
|
|
|
3,405
|
|
|||
Contingent consideration adjustment
|
—
|
|
|
—
|
|
|
93
|
|
|||
Deferred income taxes
|
(3,085
|
)
|
|
142
|
|
|
23
|
|
|||
Change in cash surrender value of company owned life insurance policies
|
(17
|
)
|
|
(18
|
)
|
|
(564
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(719
|
)
|
|
6,372
|
|
|
3,237
|
|
|||
Inventories
|
229
|
|
|
476
|
|
|
(2,051
|
)
|
|||
Prepaid expense
|
1,485
|
|
|
1,946
|
|
|
(4,532
|
)
|
|||
Accounts payable
|
130
|
|
|
554
|
|
|
(7,896
|
)
|
|||
Deferred revenue
|
(2,448
|
)
|
|
(4,034
|
)
|
|
9,364
|
|
|||
Accrued liabilities
|
653
|
|
|
(4,250
|
)
|
|
5,330
|
|
|||
Income taxes receivable
|
(19
|
)
|
|
45
|
|
|
16
|
|
|||
Other changes, net
|
(426
|
)
|
|
(65
|
)
|
|
(226
|
)
|
|||
Net cash provided by operating activities
|
6,874
|
|
|
3,433
|
|
|
7,218
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(6,140
|
)
|
|
(4,158
|
)
|
|
(5,900
|
)
|
|||
Capitalized software development costs
|
(8,918
|
)
|
|
(11,888
|
)
|
|
(15,048
|
)
|
|||
Additional (investments in) proceeds from corporate-owned life insurance policies
|
(27
|
)
|
|
2,181
|
|
|
(65
|
)
|
|||
Net cash used in investing activities
|
(15,085
|
)
|
|
(13,865
|
)
|
|
(21,013
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Payments to settle contingent consideration arising from business acquisitions
|
—
|
|
|
(197
|
)
|
|
—
|
|
|||
Principal payments under long-term obligations
|
(124
|
)
|
|
(117
|
)
|
|
(142
|
)
|
|||
Repurchase of common shares to satisfy employee tax withholding
|
(1,171
|
)
|
|
(533
|
)
|
|
(435
|
)
|
|||
Net cash used in financing activities from continuing operations
|
(1,295
|
)
|
|
(847
|
)
|
|
(577
|
)
|
|||
Effect of exchange rate changes on cash
|
194
|
|
|
(74
|
)
|
|
(87
|
)
|
|||
Net decrease in cash and cash equivalents
|
(9,312
|
)
|
|
(11,353
|
)
|
|
(14,459
|
)
|
|||
Cash and cash equivalents at beginning of period
|
49,255
|
|
|
60,608
|
|
|
75,067
|
|
|||
Cash and cash equivalents at end of period
|
$
|
39,943
|
|
|
$
|
49,255
|
|
|
$
|
60,608
|
|
|
|
|
|
|
Capital in
|
|
Accumulated
|
|
||||||||||||||
|
Common Shares
|
excess of
|
|
other
|
|
|||||||||||||||||
|
Issued
|
In Treasury
|
stated
|
Retained
|
comprehensive
|
|
||||||||||||||||
(In thousands, except share data)
|
Shares
|
Stated value
|
Shares
|
Stated value
|
value
|
earnings
|
loss
|
Total
|
||||||||||||||
Balance at March 31, 2015
|
31,607
|
|
$
|
9,482
|
|
(8,817
|
)
|
$
|
(2,646
|
)
|
$
|
(10,675
|
)
|
$
|
128,178
|
|
$
|
(151
|
)
|
$
|
124,188
|
|
Non-cash share based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
3,405
|
|
—
|
|
—
|
|
3,405
|
|
||||||
Restricted shares issued
|
—
|
|
—
|
|
181
|
|
54
|
|
(54
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Shares issued upon exercise of stock options and SSARs
|
—
|
|
—
|
|
2
|
|
1
|
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares
|
—
|
|
—
|
|
(30
|
)
|
(9
|
)
|
(320
|
)
|
—
|
|
—
|
|
(329
|
)
|
||||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,765
|
)
|
—
|
|
(3,765
|
)
|
||||||
Unrealized translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(26
|
)
|
(26
|
)
|
||||||
Balance at March 31, 2016
|
31,607
|
|
$
|
9,482
|
|
(8,664
|
)
|
$
|
(2,600
|
)
|
$
|
(7,645
|
)
|
$
|
124,413
|
|
$
|
(177
|
)
|
$
|
123,473
|
|
Non-cash share based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
2,427
|
|
—
|
|
—
|
|
2,427
|
|
||||||
Restricted shares issued, net
|
—
|
|
—
|
|
277
|
|
83
|
|
(83
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Shares issued upon exercise of stock options and SSARs
|
—
|
|
—
|
|
33
|
|
10
|
|
(10
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares
|
—
|
|
—
|
|
(43
|
)
|
(12
|
)
|
(471
|
)
|
—
|
|
—
|
|
(483
|
)
|
||||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(11,721
|
)
|
—
|
|
(11,721
|
)
|
||||||
Unrealized translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(27
|
)
|
(27
|
)
|
||||||
Balance at March 31, 2017
|
31,607
|
|
$
|
9,482
|
|
(8,397
|
)
|
$
|
(2,519
|
)
|
$
|
(5,782
|
)
|
$
|
112,692
|
|
$
|
(204
|
)
|
$
|
113,669
|
|
Cumulative effect of change in accounting policy
|
—
|
|
—
|
|
—
|
|
—
|
|
741
|
|
(741
|
)
|
—
|
|
—
|
|
||||||
Non-cash share based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
4,463
|
|
—
|
|
—
|
|
4,463
|
|
||||||
Restricted shares issued, net
|
—
|
|
—
|
|
213
|
|
64
|
|
(64
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Shares issued upon exercise of stock options and SSARs
|
—
|
|
—
|
|
8
|
|
2
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares
|
—
|
|
—
|
|
(107
|
)
|
(33
|
)
|
(1,267
|
)
|
—
|
|
—
|
|
(1,300
|
)
|
||||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,350
|
)
|
—
|
|
(8,350
|
)
|
||||||
Unrealized translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(51
|
)
|
(51
|
)
|
||||||
Balance at March 31, 2018
|
31,607
|
|
$
|
9,482
|
|
(8,283
|
)
|
$
|
(2,486
|
)
|
$
|
(1,911
|
)
|
$
|
103,601
|
|
$
|
(255
|
)
|
$
|
108,431
|
|
|
Balance at
|
|
|
|
|
|
Balance at
|
||||||||
|
March 31,
|
|
|
|
|
|
March 31,
|
||||||||
(In thousands)
|
2017
|
|
Provision
|
|
Payments
|
|
2018
|
||||||||
Fiscal 2018 Restructuring Plan:
|
|
|
|
|
|
|
|
||||||||
Severance and employment costs
|
$
|
—
|
|
|
$
|
1,639
|
|
|
$
|
(1,441
|
)
|
|
$
|
198
|
|
Total restructuring costs
|
—
|
|
|
1,639
|
|
|
(1,441
|
)
|
|
198
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
Balance at
|
|
|
|
|
|
Balance at
|
||||||||
|
March 31,
|
|
|
|
|
|
March 31,
|
||||||||
(In thousands)
|
2016
|
|
Provision
|
|
Payments
|
|
2017
|
||||||||
Fiscal 2016 Restructuring Plan:
|
|
|
|
|
|
|
|
||||||||
Severance and employment costs
|
$
|
311
|
|
|
$
|
200
|
|
|
$
|
(511
|
)
|
|
$
|
—
|
|
Lease early terminations
|
—
|
|
|
43
|
|
|
(43
|
)
|
|
—
|
|
||||
Total restructuring costs
|
311
|
|
|
243
|
|
|
(554
|
)
|
|
—
|
|
|
Year ended March 31,
|
|||||
(In thousands)
|
2018
|
2017
|
||||
|
|
|
||||
Furniture and equipment
|
$
|
10,671
|
|
$
|
7,955
|
|
Software
|
11,885
|
|
12,013
|
|
||
Leasehold improvements
|
6,819
|
|
6,317
|
|
||
Project expenditures not yet in use
|
4,187
|
|
2,217
|
|
||
|
33,562
|
|
28,502
|
|
||
Accumulated depreciation and amortization
|
(16,050
|
)
|
(12,502
|
)
|
||
Property and equipment, net
|
$
|
17,512
|
|
$
|
16,000
|
|
|
Year ended March 31,
|
|||||
(In thousands)
|
2018
|
2017
|
||||
|
|
|
||||
Capital leases
|
$
|
679
|
|
$
|
702
|
|
Less accumulated depreciation
|
(509
|
)
|
(474
|
)
|
||
Assets under capital lease, net
|
$
|
170
|
|
$
|
228
|
|
|
2018
|
|
2017
|
||||||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||||||
|
carrying
|
Accumulated
|
carrying
|
|
carrying
|
Accumulated
|
carrying
|
||||||||||||
(In thousands)
|
amount
|
amortization
|
amount
|
|
amount
|
amortization
|
amount
|
||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
10,775
|
|
$
|
(10,775
|
)
|
$
|
—
|
|
|
$
|
10,775
|
|
$
|
(10,775
|
)
|
$
|
—
|
|
Non-competition agreements
|
2,700
|
|
(2,700
|
)
|
—
|
|
|
2,700
|
|
(2,700
|
)
|
—
|
|
||||||
Developed technology
|
10,660
|
|
(10,398
|
)
|
262
|
|
|
10,660
|
|
(10,398
|
)
|
262
|
|
||||||
Accumulated impairment
|
(262
|
)
|
N/A
|
|
(262
|
)
|
|
(262
|
)
|
N/A
|
|
(262
|
)
|
||||||
Trade names
|
230
|
|
(146
|
)
|
84
|
|
|
230
|
|
(100
|
)
|
130
|
|
||||||
Patented technology
|
80
|
|
(80
|
)
|
—
|
|
|
80
|
|
(80
|
)
|
—
|
|
||||||
|
24,183
|
|
(24,099
|
)
|
84
|
|
|
24,183
|
|
(24,053
|
)
|
130
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
9,200
|
|
N/A
|
|
9,200
|
|
|
9,200
|
|
N/A
|
|
9,200
|
|
||||||
Accumulated impairment
|
(570
|
)
|
N/A
|
|
(570
|
)
|
|
(570
|
)
|
N/A
|
|
(570
|
)
|
||||||
Finite life reclassification
|
(230
|
)
|
N/A
|
|
(230
|
)
|
|
(230
|
)
|
N/A
|
|
(230
|
)
|
||||||
|
8,400
|
|
N/A
|
|
8,400
|
|
|
8,400
|
|
N/A
|
|
8,400
|
|
||||||
Total intangible assets
|
$
|
32,583
|
|
$
|
(24,099
|
)
|
$
|
8,484
|
|
|
$
|
32,583
|
|
$
|
(24,053
|
)
|
$
|
8,530
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software development costs
|
$
|
54,759
|
|
$
|
(20,372
|
)
|
$
|
34,387
|
|
|
$
|
47,989
|
|
$
|
(10,356
|
)
|
$
|
37,633
|
|
Project expenditures not yet in use
|
12,185
|
|
N/A
|
|
12,185
|
|
|
10,757
|
|
N/A
|
10,757
|
|
|||||||
Accumulated impairment
|
(1,391
|
)
|
N/A
|
|
(1,391
|
)
|
|
(1,391
|
)
|
N/A
|
|
(1,391
|
)
|
||||||
Total software development costs
|
$
|
65,553
|
|
$
|
(20,372
|
)
|
$
|
45,181
|
|
|
$
|
57,355
|
|
$
|
(10,356
|
)
|
$
|
46,999
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
||
|
Amortization
|
||
(In thousands)
|
Expense
|
||
Fiscal year ending March 31,
|
|
||
2019
|
$
|
10,504
|
|
2020
|
9,765
|
|
|
2021
|
9,680
|
|
|
2022
|
2,568
|
|
|
2023
|
563
|
|
|
Total
|
$
|
33,080
|
|
(In thousands)
|
2018
|
2017
|
||||
Capital lease obligations
|
$
|
177
|
|
$
|
237
|
|
Less: current maturities
|
(120
|
)
|
(121
|
)
|
||
Long -term capital lease obligations
|
$
|
57
|
|
$
|
116
|
|
(In thousands)
|
Amount
|
||
Fiscal year ending March 31,
|
|
||
2019
|
$
|
129
|
|
2020
|
27
|
|
|
2021
|
37
|
|
|
Total minimum lease payments
|
$
|
193
|
|
Less: amount representing interest
|
(16
|
)
|
|
Present value of minimum lease payments
|
$
|
177
|
|
|
Year ended March 31,
|
|||||
(In thousands)
|
2018
|
2017
|
2016
|
|||
Cash payments for interest, net
|
(88
|
)
|
(147
|
)
|
(64
|
)
|
Cash payments for income tax, net
|
(227
|
)
|
19
|
|
17
|
|
Acquisition of property and equipment under lease obligations
|
64
|
|
21
|
|
287
|
|
Accrued capital expenditures
|
83
|
|
411
|
|
59
|
|
Accrued capitalized software development costs
|
201
|
|
922
|
|
959
|
|
Leasehold improvements acquired under operating lease arrangement
|
95
|
|
35
|
|
997
|
|
|
Year ended March 31,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Accrued liabilities:
|
|
|
|
||||
Salaries, wages, and related benefits
|
$
|
6,793
|
|
|
$
|
6,473
|
|
Other taxes payable
|
769
|
|
|
750
|
|
||
Restructuring liabilities
|
198
|
|
|
—
|
|
||
Severance liabilities
|
—
|
|
|
11
|
|
||
Professional fees
|
288
|
|
|
221
|
|
||
Deferred rent
|
407
|
|
|
433
|
|
||
Other
|
786
|
|
|
443
|
|
||
Total
|
$
|
9,241
|
|
|
$
|
8,331
|
|
|
|
|
|
||||
Other non-current liabilities:
|
|
|
|
||||
Uncertain tax positions
|
$
|
1,519
|
|
|
$
|
1,479
|
|
Deferred rent
|
2,313
|
|
|
2,444
|
|
||
Other
|
79
|
|
|
79
|
|
||
Total
|
$
|
3,911
|
|
|
$
|
4,002
|
|
(In thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Loss before income taxes
|
|
|
|
|
|
||||||
United States
|
$
|
(11,926
|
)
|
|
$
|
(10,967
|
)
|
|
$
|
(3,874
|
)
|
Foreign
|
325
|
|
|
(518
|
)
|
|
115
|
|
|||
Total loss before income taxes
|
$
|
(11,601
|
)
|
|
$
|
(11,485
|
)
|
|
$
|
(3,759
|
)
|
(In thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Income tax expense (benefit)
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
66
|
|
|
$
|
10
|
|
|
$
|
(2
|
)
|
State and local
|
(446
|
)
|
|
5
|
|
|
(52
|
)
|
|||
Foreign
|
73
|
|
|
107
|
|
|
59
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(2,985
|
)
|
|
96
|
|
|
19
|
|
|||
State and local
|
41
|
|
|
10
|
|
|
10
|
|
|||
Foreign
|
—
|
|
|
8
|
|
|
(28
|
)
|
|||
Total income tax expense (benefit)
|
$
|
(3,251
|
)
|
|
$
|
236
|
|
|
$
|
6
|
|
(In thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Income tax benefit at the US Federal statutory rate
|
$
|
(3,654
|
)
|
|
$
|
(4,019
|
)
|
|
$
|
(1,317
|
)
|
Benefit for state taxes
|
(642
|
)
|
|
(142
|
)
|
|
(54
|
)
|
|||
Impact of foreign operations
|
38
|
|
|
158
|
|
|
(9
|
)
|
|||
Indefinite life assets
|
335
|
|
|
102
|
|
|
26
|
|
|||
Officer life insurance
|
(5
|
)
|
|
(6
|
)
|
|
(197
|
)
|
|||
Change in valuation allowance
|
3,328
|
|
|
4,007
|
|
|
1,555
|
|
|||
Change in liability for unrecognized tax benefits
|
40
|
|
|
9
|
|
|
(29
|
)
|
|||
Impact of Tax Act, net
|
(3,287
|
)
|
|
—
|
|
|
—
|
|
|||
Meals and entertainment
|
81
|
|
|
163
|
|
|
100
|
|
|||
Equity
|
476
|
|
|
—
|
|
|
—
|
|
|||
Other
|
39
|
|
|
(36
|
)
|
|
(69
|
)
|
|||
Total income tax expense (benefit)
|
$
|
(3,251
|
)
|
|
$
|
236
|
|
|
$
|
6
|
|
(In thousands)
|
2018
|
2017
|
||||
Deferred tax assets:
|
|
|
||||
Accrued liabilities
|
$
|
2,720
|
|
$
|
3,892
|
|
Allowance for doubtful accounts
|
143
|
|
126
|
|
||
Inventory valuation reserve
|
20
|
|
38
|
|
||
Federal losses and credit carryforwards
|
42,713
|
|
64,953
|
|
||
Foreign net operating losses
|
623
|
|
392
|
|
||
State losses and credit carryforwards
|
9,592
|
|
9,474
|
|
||
Deferred revenue
|
652
|
|
704
|
|
||
Goodwill and other intangible assets
|
286
|
|
1,332
|
|
||
Other
|
96
|
|
152
|
|
||
|
56,845
|
|
81,063
|
|
||
Less: valuation allowance
|
(54,260
|
)
|
(80,013
|
)
|
||
Total
|
2,585
|
|
1,050
|
|
||
Deferred tax liabilities:
|
|
|
||||
Property and equipment & software amortization
|
(412
|
)
|
(772
|
)
|
||
Indefinite-lived goodwill & intangible assets
|
(2,277
|
)
|
(3,459
|
)
|
||
Total
|
(2,689
|
)
|
(4,231
|
)
|
||
Total deferred tax liabilities
|
$
|
(104
|
)
|
$
|
(3,181
|
)
|
(In thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at April 1
|
$
|
988
|
|
|
$
|
1,617
|
|
|
$
|
1,755
|
|
Reductions:
|
|
|
|
|
|
||||||
Relating to tax settlements
|
—
|
|
|
—
|
|
|
(85
|
)
|
|||
Relating to positions taken during prior year
|
(300
|
)
|
|
(604
|
)
|
|
—
|
|
|||
Relating to lapse in statute
|
(1
|
)
|
|
(25
|
)
|
|
(53
|
)
|
|||
Balance at March 31
|
$
|
687
|
|
|
$
|
988
|
|
|
$
|
1,617
|
|
(In thousands)
|
Amount
|
||
Fiscal year ending March 31,
|
|
||
2019
|
$
|
3,751
|
|
2020
|
3,468
|
|
|
2021
|
3,375
|
|
|
2022
|
2,506
|
|
|
2023
|
1,052
|
|
|
Thereafter
|
717
|
|
|
Total minimum lease payments
|
$
|
14,869
|
|
|
Year ended March 31,
|
||||||||||
(In thousands, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(8,350
|
)
|
|
$
|
(11,721
|
)
|
|
$
|
(3,765
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding - basic and diluted
|
22,801
|
|
|
22,615
|
|
|
22,483
|
|
|||
|
|
|
|
|
|
||||||
Loss per share - basic and diluted:
|
|
|
|
|
|
||||||
Net loss per share-basic and diluted
|
$
|
(0.37
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
|
||||||
Anti-dilutive stock options, SSARs, restricted shares and performance shares
|
756
|
|
|
1,004
|
|
1,682
|
|
Year ended March 31,
|
||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Product development
|
$
|
1,306
|
|
|
$
|
1,545
|
|
|
$
|
1,183
|
|
Sales and marketing
|
371
|
|
|
360
|
|
|
68
|
|
|||
General and administrative
|
3,011
|
|
|
522
|
|
|
2,154
|
|
|||
Total share-based compensation expense
|
$
|
4,688
|
|
|
$
|
2,427
|
|
|
$
|
3,405
|
|
|
2018
|
2017
|
2016
|
Risk-free interest rate
|
1.74%-1.94%
|
0.94%-2.14%
|
1.53%-1.61%
|
Expected life (in years)
|
5
|
5
|
5
|
Expected volatility
|
32.42% - 32.84%
|
35.25%-40.22%
|
46.34%-47.25%
|
Weighted average grant date fair value
|
$3.36
|
$3.69
|
$3.95
|
(In thousands, except share and per share data)
|
Number
of Rights
|
|
Weighted-
Average
Exercise
Price
|
|
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
(per right)
|
|
(in years)
|
|
|
|||||
Outstanding at April 1, 2017
|
1,094,978
|
|
|
$
|
10.44
|
|
|
|
|
|
||
Granted
|
204,213
|
|
|
10.56
|
|
|
|
|
|
|||
Exercised
|
(41,691
|
)
|
|
9.14
|
|
|
|
|
|
|||
Forfeited
|
(99,661
|
)
|
|
10.02
|
|
|
|
|
|
|||
Cancelled/expired
|
(54,679
|
)
|
|
9.56
|
|
|
|
|
|
|||
Outstanding at March 31, 2018
|
1,103,160
|
|
|
$
|
10.60
|
|
|
5.2
|
|
$
|
1,570
|
|
Exercisable at March 31, 2018
|
604,596
|
|
|
$
|
10.46
|
|
|
4.6
|
|
$
|
996
|
|
Vested and expected to vest at March 31, 2018
|
1,103,160
|
|
|
$
|
10.60
|
|
|
5.2
|
|
$
|
1,570
|
|
(In thousands)
|
2018
|
2017
|
2016
|
||||||
Compensation expense
|
$
|
1,869
|
|
$
|
621
|
|
$
|
1,200
|
|
Total intrinsic value of SSARs exercised
|
$
|
88
|
|
$
|
360
|
|
$
|
32
|
|
Total fair value of SSARs vesting
|
$
|
1,325
|
|
$
|
497
|
|
$
|
1,069
|
|
|
Number
of Shares
|
|
Weighted-
Average
Grant-
Date Fair
Value
|
|||
|
|
|
(per share)
|
|||
Outstanding at April 1, 2017
|
490,355
|
|
|
$
|
10.72
|
|
Granted
|
267,442
|
|
|
11.11
|
||
Vested
|
(369,683
|
)
|
|
11.02
|
||
Forfeited
|
(144,760
|
)
|
|
10.58
|
||
Outstanding at March 31, 2018
|
243,354
|
|
|
$
|
10.78
|
|
(In thousands)
|
2018
|
2017
|
2016
|
||||||
Compensation expense
|
$
|
2,594
|
|
$
|
1,770
|
|
$
|
2,167
|
|
Total fair value of restricted share vesting
|
$
|
4,315
|
|
$
|
1,182
|
|
$
|
1,638
|
|
|
Number
of
Shares
|
|
Weighted-
Average
Grant-
Date Fair
Value
|
|||
|
|
|
(per share)
|
|||
Outstanding at April 1, 2017
|
—
|
|
|
$
|
—
|
|
Granted
|
91,463
|
|
|
9.84
|
|
|
Vested
|
—
|
|
|
$
|
—
|
|
Outstanding at March 31, 2018
|
91,463
|
|
|
$
|
9.84
|
|
(In thousands)
|
2018
|
2017
|
2016
|
||||||
Compensation expense
|
$
|
225
|
|
$
|
36
|
|
$
|
39
|
|
Total fair value of performance share vesting
|
$
|
—
|
|
$
|
83
|
|
—
|
|
|
Fair value measurement used
|
||||||||||||
|
Recorded
value
as of
|
|
Active
markets
for
identical
assets or
liabilities
|
|
Quoted
prices in
similar
instruments
and
observable
inputs
|
|
Active
markets for
unobservable
inputs
|
||||||
(In thousands)
|
March 31, 2018
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||
Assets:
|
|
|
|
|
|
|
|
||||||
Corporate-owned life insurance — non-current
|
$
|
853
|
|
|
—
|
|
|
—
|
|
|
$
|
853
|
|
|
Fair value measurement used
|
||||||||||||
|
Recorded
value
as of
|
|
Active
markets
for
identical
assets or
liabilities
|
|
Quoted
prices in
similar
instruments
and
observable
inputs
|
|
Active
markets for
unobservable
inputs
|
||||||
(In thousands)
|
March 31, 2017
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||
Assets:
|
|
|
|
|
|
|
|
||||||
Corporate-owned life insurance — non-current
|
$
|
809
|
|
|
—
|
|
|
—
|
|
|
$
|
809
|
|
|
Level 3 assets and
liabilities
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Corporate-owned life insurance:
|
|
|
|
||||
Balance on April 1
|
$
|
809
|
|
|
$
|
3,122
|
|
Realized gains
|
17
|
|
|
18
|
|
||
Unrealized (loss) gain relating to instruments held at reporting date
|
27
|
|
|
(123
|
)
|
||
Purchases, sales, issuances and settlements, net
|
—
|
|
|
(2,208
|
)
|
||
Balance on March 31
|
$
|
853
|
|
|
$
|
809
|
|
|
Year ended March 31, 2018
|
||||||||||||||
|
First
|
Second
|
Third
|
Fourth
|
Year
|
||||||||||
(In thousands except per share data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||
Net revenue
|
$
|
33,865
|
|
$
|
30,129
|
|
$
|
31,310
|
|
$
|
32,056
|
|
$
|
127,360
|
|
Gross profit
|
16,670
|
|
15,370
|
|
15,628
|
|
16,749
|
|
64,417
|
|
|||||
Restructuring, severance and other charges
|
37
|
|
826
|
|
378
|
|
557
|
|
1,798
|
|
|||||
Legal settlements
|
—
|
|
—
|
|
150
|
|
—
|
|
150
|
|
|||||
Net loss
|
$
|
(2,958
|
)
|
$
|
(3,248
|
)
|
$
|
(1,934
|
)
|
$
|
(210
|
)
|
$
|
(8,350
|
)
|
|
|
|
|
|
|
||||||||||
Per share data-basic and diluted
|
|
|
|
|
|
||||||||||
Net loss
|
$
|
(0.13
|
)
|
$
|
(0.14
|
)
|
$
|
(0.08
|
)
|
$
|
(0.01
|
)
|
$
|
(0.37
|
)
|
|
Year ended March 31, 2017
|
||||||||||||||
|
First
|
Second
|
Third
|
Fourth
|
Year
|
||||||||||
(In thousands except per share data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||
Net revenue
|
$
|
30,953
|
|
$
|
32,676
|
|
$
|
33,448
|
|
$
|
30,602
|
|
$
|
127,678
|
|
Gross profit
|
16,191
|
|
15,879
|
|
16,241
|
|
15,475
|
|
63,785
|
|
|||||
Restructuring, severance and other charges
|
89
|
|
—
|
|
1,395
|
|
77
|
|
1,561
|
|
|||||
Legal settlements
|
—
|
|
85
|
|
—
|
|
—
|
|
85
|
|
|||||
Net loss
|
$
|
(2,297
|
)
|
$
|
(2,400
|
)
|
$
|
(1,737
|
)
|
$
|
(5,287
|
)
|
$
|
(11,721
|
)
|
|
|
|
|
|
|
||||||||||
Net loss Per share data-basic and diluted
|
$
|
(0.10
|
)
|
$
|
(0.11
|
)
|
$
|
(0.08
|
)
|
$
|
(0.23
|
)
|
$
|
(0.52
|
)
|
|
Balance at
|
Charged to
|
|
Balance at
|
||||||||
|
beginning of
|
costs and
|
|
end of
|
||||||||
(In thousands)
|
year
|
expenses
|
Deductions
|
year
|
||||||||
2018
|
|
|
|
|
||||||||
Deferred tax valuation allowance
|
$
|
80,013
|
|
$
|
(25,753
|
)
|
$
|
—
|
|
$
|
54,260
|
|
Allowance for doubtful accounts
|
$
|
509
|
|
$
|
1,063
|
|
$
|
(672
|
)
|
$
|
900
|
|
2017
|
|
|
|
|
||||||||
Deferred tax valuation allowance
|
$
|
77,846
|
|
$
|
2,167
|
|
$
|
—
|
|
$
|
80,013
|
|
Allowance for doubtful accounts
|
$
|
617
|
|
$
|
648
|
|
$
|
(756
|
)
|
$
|
509
|
|
2016
|
|
|
|
|
||||||||
Deferred tax valuation allowance
|
$
|
76,420
|
|
$
|
1,426
|
|
$
|
—
|
|
$
|
77,846
|
|
Allowance for doubtful accounts
|
$
|
888
|
|
$
|
942
|
|
$
|
(1,213
|
)
|
$
|
617
|
|
Signature
|
|
Title
|
|
|
|
/s/ Ramesh Srinivasan
|
|
President, Chief Executive Officer and Director
|
Ramesh Srinivasan
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Anthony S. Pritchett
|
|
Chief Financial Officer,
|
Anthony S. Pritchett
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Chris J. Robertson
|
|
Corporate Controller and Treasurer
|
Chris J. Robertson
|
|
(Principal Accounting Officer)
|
|
|
|
/s/ Michael A. Kaufmann
|
|
Chairman and Director
|
Michael A. Kaufmann
|
|
|
|
|
|
/s/ Keith M. Kolerus
|
|
Vice Chairman and Director
|
Keith M. Kolerus
|
|
|
|
|
|
/s/ Donald A. Colvin
|
|
Director
|
Donald A. Colvin
|
|
|
|
|
|
/s/ Gerald C. Jones
|
|
Director
|
Gerald C. Jones
|
|
|
|
|
|
/s/ John Mutch
|
|
Director
|
John Mutch
|
|
|
|
|
|
________________
|
|
Director
|
Melvin L. Keating
|
|
|
|
|
|
Exhibit No.
|
Description
|
3(a)
|
|
3(b)
|
|
*10(a)
|
|
*10(b)
|
|
*10(c)
|
|
*10(d)
|
|
**10(e)
|
|
*10(f)
|
|
*10(g)
|
|
*10(h)
|
|
*10(i)
|
|
*10(j)
|
|
*10(k)
|
|
*10(l)
|
|
*10(m)
|
|
10(n)
|
|
*10(o)
|
|
*10(p)
|
|
*10(q)
|
|
*10(r)
|
|
**21
|
|
**23.1
|
|
**24.1
|
**31.1
|
|
**31.2
|
|
**31.3
|
|
**32
|
|
101
|
The following materials from our annual report on Form 10-K for the year ended March 31, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2018 and 2017, (ii) Consolidated Statements of Operations for the twelve months ended March 31, 2018, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Income (Loss) for the twelve months ended March 31, 2018, 2017 and 2016, (iv) Consolidated Statements of Cash Flows for the twelve months ended March 31, 2018, 2017 and 2016, and (v) Notes to the Consolidated Financial Statements for the twelve months ended March 31, 2018.
|
*
|
Denotes a management contract or compensatory plan or arrangement.
|
**
|
Filed herewith
|
|
|
|
|
|
|
Subsidiaries of Agilysys, Inc.
|
|
State or
jurisdiction of
organization or
incorporation
|
|
|
|
Agilysys NV, LLC
|
|
Delaware
|
Agilysys China Holdings Ltd.
|
|
Hong Kong
|
Agilysys HK Limited
|
|
Hong Kong
|
Agilysys MC Limited
|
|
Macau
|
Agilysys Hospitality Solutions (Shanghai) Co., Ltd.
|
|
People’s Republic of China
|
Agilysys Singapore Pte. Ltd.
|
|
Singapore
|
Agilysys Philippines, Inc.
|
|
Philippines
|
Agilysys UK Ltd.
|
|
United Kingdom
|
Agilysys Technologies India Private Limited
|
|
India
|
Signature
|
|
Title(s)
|
|
|
|
|
|
|
|
|
|
/s/ Michael A. Kaufman
Michael A. Kaufman
|
|
Chairman and Director
|
|
|
|
|
|
/s/ Keith M. Kolerus
Keith M. Kolerus
|
|
Vice Chairman and Director
|
|
|
|
|
|
/s/ Donald A. Colvin
Donald A. Colvin
|
|
Director
|
|
|
|
|
|
/s/ Gerald C. Jones
Gerald C. Jones
|
|
Director
|
|
|
|
|
|
/s/ John Mutch
John Mutch
|
|
Director
|
|
|
|
|
|
________________
Melvin L. Keating
|
|
Director
|
|
|
|
|
|
By:
|
/s/ Ramesh Srinivasan
|
|
Ramesh Srinivasan
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
By:
|
/s/ Anthony S. Pritchett
|
|
Anthony S. Pritchett
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
By:
|
/s/ Chris J. Robertson
|
|
Chris J. Robertson
|
|
Corporate Controller and Treasurer
|
|
(Principal Accounting Officer)
|
1.
|
The Annual Report on Form 10-K of the Company for the annual period ended
March 31, 2018
(the “Report”) fully complies with the requirements of Section 13(a) or Section15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Ramesh Srinivasan
|
|
Ramesh Srinivasan
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Anthony S. Pritchett
|
|
Anthony S. Pritchett
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Chris J. Robertson
|
|
Chris J. Robertson
|
|
Corporate Controller and Treasurer
|
|
(Principal Accounting Officer)
|
|
|