EX-99.1 2 investordeckq1fy2019.htm EXHIBIT 99.1
Investor Presentation August 2019

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- 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, EBITDA or Adjusted EBITDA and cash and cash equivalent balance, and statements we make regarding targeted, possible and expected growth in revenue, EBITDA or Adjusted EBITDA, free cash flow and headcount. 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 presentation 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 presentation, 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. 2

Agilysys Overview TECHNOLOGY | INNOVATION | SOLUTIONS • Agilysys is a Technology Software Solutions Company Subscription Reservations and Exclusively Focused on the Hospitality Industry On Prem Analytics Guest • Our Solutions Are Mission Critical to Core Hospitality Operations Optimization Value - These Systems Are Required to Run the Hospitality Business • Our Software Solutions Drive Substantial Customer Benefits, Staff Payment Including Increased Revenue, Reduced Cost, Enhanced Guest Mobility Experiences and Improved Employee Morale Guest Facing Guest • Offices in 11 Locations Globally with Corporate Headquarters in Terminals Connections Guest Alpharetta, Georgia Self-service $145.2M 53% 34% 25% Total Recurring Revenue as a % Subscription Revenue as a Subscription Revenue Revenue of Total Revenue % of Recurring Revenue Growth Rate *Note: All data is as of the trailing twelve months ended June 30, 2019. 3

We Serve Leading Hospitality Brands TECHNOLOGY | INNOVATION | SOLUTIONS Gaming – 56% of Revenue Hotels, Resorts and Cruise – 26% of Revenue FoodFood Service – 17% of Revenue Restaurants, Universities, Stadia and Healthcare – 1% of Revenue Note: Revenue contribution figures represent percentage for the trailing twelve months ended June 30, 2019. 4

Enabling the Guest Journey TECHNOLOGY | INNOVATION | SOLUTIONS Online Survey Golf Omni Channel Kiosk Employee Spa Activities Discover Arrive/Plan Order Experience Procure Reserve/Book Suggest Pay Analyze Market Gaming Hotels & Resorts Cruises Food Service Stadiums & Arenas Delivering a Comprehensive Suite of Solutions

We Provide Industry Leading Hospitality Solutions TECHNOLOGY | INNOVATION | SOLUTIONS PROPERTY POINT-OF-SALE MANAGEMENT 65% of Revenue 24% Food and Beverage Solutions of Revenue Lodging Solutions ~55k end points at 06/30/19 ~273k rooms at 06/30/19 +14% since 06/30/18 9% +4% since 06/30/18 of Revenue DOCUMENT INVENTORY & 2% MANAGEMENT PROCUREMENT of Revenue 90% 10% Product Technology of Revenue of Revenue WELL-ESTABLISHED rGUEST Note: Revenue contribution figures represent percentage for the trailing twelve months ended June 30, 2019 and include an allocation of revenue amounts to our 4 core product groupings. 6

Go To Market Strategy TECHNOLOGY | INNOVATION | SOLUTIONS OBSESSIVELY CUSTOMER CENTRIC IN EVERY MARKET WE SERVE ENGINEERING DRIVEN COMPANY R&D Team >95% ~40%* Increase Strength** Customer in TTM Jan 2017 – 230 Retention International Jun 2019 – 540 Annually Bookings Dec 2019 – 650 *Note: All data is as of the trailing twelve months ended June 30, 2019. **R&D strength numbers represent approximate headcount. The Dec 19 figure is an estimated projection. 7

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 We are Obsessive About Putting our Customers at the Center of Everything We Do 8

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 ~ $145.2M* *Trailing twelve months ended June 30, 2019. 9

Achievements Under New Management Team TECHNOLOGY | INNOVATION | SOLUTIONS January 2017 (Q4 - • Seven Consecutive Quarters of Sequential Revenue Growth FY17) we began a focus on cost control • Five Consecutive Quarters of Record Revenue and aligning resources to position • Expect Approximately 11% Year-Over-Year Revenue Growth in Fiscal 2020 Compared to Fiscal 2019 Agilysys for consistent profitable • Average Subscription Revenue Year Over Year Growth Rate of 33% for Past 16 Quarters growth • Subscription Revenue Accounts for 34% of Recurring Revenue for the Twelve Trailing Months • More Than Doubled the Number of Software Development Team Members While Significantly Improving Profitability • Q1 FY20 Represented Record Adjusted EBITDA at $3.2M • Positive Free Cash Flow in Fiscal 2019 of $1.7M While Fiscal 2020 Should See a Significant Improvement Over That • Total Cash Balance Increased from $39.9M at March 31, 2018 to $40.8M at March 31, 2019 10

Creating Value with New Leadership and Strategy TECHNOLOGY | INNOVATION | SOLUTIONS 25 24 23 22 21 20 Tony Pritchett 19 Promoted Ramesh to CFO 18 Don Srinivasan DeMarinis Joins as 17 Sridhar Joins as CEO Laveti SVP of Sales 16 Joins as 15 R&D VP 14 13 IDC Established, Managed Locally Jeba Kingsley 12 by Prakash Bhat Joins as VP of Professional 11 Services Prabuddha 10 Biswas Rob Jacks 9 Joins as Promoted to CIO CTO 8 11

India Development Center TECHNOLOGY | INNOVATION | SOLUTIONS • Currently Doubling Capacity To: • 68,000 Square Feet • 660 Employee Capacity • Approximately 90% of Current Chennai Employees are Technical Staff 12

Long Term Financial Targets TECHNOLOGY | INNOVATION | SOLUTIONS 12/31/17 Current EV/Rev EV/Rev 1.9 3.8 Targeting Four-Year Revenue Growth CAGR of between 10% - 20% and Adjusted EBITDA of between 10%-20% of Revenue by FY2021 (begins April 2020) 13

FINANCIAL OVERVIEW 14

Evolving Business, Evolving P&L TECHNOLOGY | INNOVATION | SOLUTIONS Financial Metrics and Valuation* Business Metrics (as of 06/30/19) Share Price (7/31/19) $24.53 Direct POS End Points Managed ~55k Diluted Shares Outstanding 23.2M Y/Y Growth 14% Diluted Market Capitalization $569.4M Direct Hotel Rooms Managed ~273k Y/Y Growth 4% Cash (as of 06/30/19) $37.2M Recurring Revenue* 53% Debt (as of 06/30/19) $11.6M As % of Total Revenue Enterprise Value $543.8M Subscription Revenue* 34% As % of Recurring Revenue Revenue $145.2M Services Revenue* 18% Gross Profit $76.0M As % of Total Revenue Adjusted EBITDA^ $10.4M Subscription Revenue Growth Y/Y* 25% Adjusted Earnings from Operations^ $7.2M rGuest as % of Total Revenue* 10% Earnings per Share ($0.56) New Customer Count* 80 EV/Revenue 3.8x EV/Gross Profit 7.2x ^Non-GAAP measure, see reconciliation on slide 26. *Trailing twelve months ended June 30, 2019. 15

Strong Balance Sheet TECHNOLOGY | INNOVATION | SOLUTIONS Consolidated Balance Sheet (in thousands) March 31, 2019 June 30, 2019 Cash, Cash Equivalents and Marketable Securities $40,771 $37,233 Other Current Assets 38,237 36,216 Long-Term Assets 84,583 93,999 Total Assets $163,591 $167,448 Current Liabilities $58,301 $53,756 Other Liabilities 4,668 13,769 Total Liabilities 62,969 67,525 Shareholders’ Equity 100,622 99,923 Total Liabilities and Shareholders’ Equity $163,591 $167,448 16

Historical Financial Results TECHNOLOGY | INNOVATION | SOLUTIONS Revenue - GAAP Net Loss - GAAP $150,000 $145,224 ($1,000) $145,000 $140,842 $140,000 ($6,000) $135,000 $130,000 $127,678 $127,360 ($11,000) ($8,350) $125,000 ($11,721) $120,000 ($13,164) ($13,003) ($16,000) $115,000 FY17 FY18 FY19 TTM* FY17 FY18 FY19 TTM* ^ Adjusted EBITDA – Non-GAAP Adjusted Earnings from Operations–Non GAAP^ $12,000 $10,277 $10,403 $15,000 $9,082 $7,201 $4,770 $8,000 $5,000 $4,478 $4,000 ($5,000) ($5,976) $0 ($15,000) ($11,568) FY17 FY18 FY19 TTM* FY17 FY18 FY19 TTM* All numbers in thousands. ^ Non-GAAP measure, see reconciliation on slide 26. *Trailing twelve months ended June 30, 2019. 17

Revenue - Quarterly TECHNOLOGY | INNOVATION | SOLUTIONS Total Revenue $39,000 $38,389 $38,000 $37,000 $36,618 $36,014 $36,000 $35,000 $34,203 $33,865 $34,007 $34,000 $33,000 $32,056 $32,000 $31,310 $31,000 $30,602 $30,129 $30,000 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 All numbers in thousands. 18

Profitability Metrics - Quarterly TECHNOLOGY | INNOVATION | SOLUTIONS Adjusted Earnings from Operations – Non GAAP^ $3,000 $2,664 $1,995 $1,858 $2,000 $1,000 $564 $684 $237 $0 ($1,000) ($1,158) ($2,000) ($1,909) ($3,000) ($3,475) ($4,000) ($3,779) ($5,000) Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 All numbers in thousands. ^ Non-GAAP measure, see reconciliation on slide 27. 19

Profitability Metrics - Quarterly TECHNOLOGY | INNOVATION | SOLUTIONS Adjusted EBITDA – Non GAAP^ $3,500 $3,235 $3,061 $3,113 $3,000 $2,641 $2,500 $2,310 $2,392 $2,069 $2,135 $2,000 $1,640 $1,500 No Software Capitalization $1,000 from Q2 FY19 onwards $500 $0 ($500) ($234) Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Average of $2.5M in capitalized software development costs per quarter from Q1’17 to Q1’19. All numbers in thousands. ^ Non-GAAP measure, see reconciliation on slide 27. 20

Profitability Metrics - Quarterly TECHNOLOGY | INNOVATION | SOLUTIONS Adjusted EBITDA less Capitalized Software Development Costs – Non GAAP^ $4,000 $3,235 $3,000 $2,584 $2,392 $2,135 $2,000 $1,415 $981 $1,000 $274 $0 ($177) No ($1,000) Software Capitalization ($1,350) from ($2,000) Q2 FY19 onwards ($3,000) ($2,948) ($4,000) Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 All numbers in thousands. ^ Non-GAAP measure, see reconciliation on slide 27. 21

APPENDIX

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 significant increases in shareholder value. 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. PRABUDDHA BISWAS - Chief Technology Officer Prabuddha brings over 30 years of successful software development and innovative technology leadership to Agilysys, where his responsibilities include leadership and oversight of the Company’s technology vision. 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. 23

Senior Management Leading New Growth Vision TECHNOLOGY | INNOVATION | SOLUTIONS KYLE 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 general corporate matters. 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 management leadership across multiple industries. PRAKASH BHAT - Vice President and Managing Director (India) Prakash brings 30+ years of 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. ANDREW COX - Managing Director (Asia Pacific) Andrew has 20+ years of experience, including significant experience with hospitality software companies, working in the Asia Pacific region bringing an extensive background in developing and executing go-to- market strategies which deliver profitable and sustainable growth. 24

Senior Management Leading New Growth Vision TECHNOLOGY | INNOVATION | SOLUTIONS ROB JACKS – Chief Information Officer Rob was promoted to CIO in December 2018 and is responsible for advancing Agilysys’ internal systems and information technology processes. Rob has a reputation as a transformational executive who can deploy complex solutions with a measurable ROI. JAMES SLATTER - Managing Director (EMEA) Based in the UK for 16 years, James has extensive experience working in the hospitality industry, satisfying the software needs of enterprise clients, and helping US based companies expand their international footprint. JEBA KINGSLEY - Vice President of Professional Services Jeba was hired as Vice President of Professional Services in December 2018. Jeba has more than 20 years of experience leading revenue-generating global client services organizations. 25

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* 2019 2018 2017 Net loss $ (13,003) $ (13,164) $ (8,350) $ (11,721) Income tax expense (benefit) 295 221 (3,251) 236 Loss before taxes (12,708) (12,943) (11,601) (11,485) Depreciation of fixed assets 2,111 2,504 2,631 2,409 Amortization of intangibles 2,702 2,567 1,879 1,392 Amortization of developed technology 13,114 12,602 10,016 8,012 Interest income (356) (329) (88) (147) EBITDA (a) 4,863 4,401 2,837 181 Share-based compensation 4,449 4,376 4,688 2,427 Restructuring, severance and other charges 959 1,168 1,798 1,561 Asset write-offs and other fair value adjustments - - - - Other non-operating (income) expense 78 191 (391) 224 Legal settlements 50 141 150 85 Adjusted EBITDA (b) 10,399 10,277 9,082 4,478 Capitalized software development costs (57) (2,189) (8,918) (11,888) Adjusted EBITDA less capitalized software development costs (c) 10,342 8,088 164 (7,410) Capital expenditures (3,145) (3,318) (6,140) (4,158) Adjusted Earnings from Operations (d) $ 7,197 $ 4,770 $ (5,976) $ (11,568) Product development (operating expenses) $ 40,792 $ 37,817 $ 27,936 $ 29,048 Capitalized software development costs 57 2,189 8,918 11,888 Product development plus capitalized software development costs (e) $ 40,849 $ 40,006 $ 36,854 $ 40,936 (a) EBITDA is defined as net income before income taxes, interest expense, depreciation and amortization (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 EBITDA less capitalized software development costs, a non-GAAP financial measure, is defined as Adjusted EBITDA, less capitalized software development costs (d) Adjusted Earnings from Operations, a non-GAAP financial measure, is defined as Adjusted EBITDA less capitalized software development costs, less capital expenditures (e) Product development plus capitalized software development costs, a non-GAAP financial measure, is defined as total product development expense plus capitalized software development costs *Trailing twelve months ended June 30, 2019. 26

Non-GAAP Reconciliation TECHNOLOGY | INNOVATION | SOLUTIONS RECONCILIATION OF NET LOSS TO ADJUSTED EARNINGS FROM OPERATIONS (UNAUDITED) Three Months Ended June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, (In thousands) 2019 2019 2018 2018 2018 2018 2017 2017 2017 2017 Net loss $ (1,575) $ (3,589) $ (4,048) $ (3,791) $ (1,736) $ (210) $ (1,934) $ (3,248) $ (2,958) $ (5,287) Income tax expense (benefit) 25 35 182 53 (49) (1,812) (1,623) 105 78 (16) Loss before taxes (1,550) (3,554) (3,866) (3,738) (1,785) (2,022) (3,557) (3,143) (2,880) (5,303) Depreciation of fixed assets 213 571 651 676 606 739 581 700 611 618 Amortization of intangibles 678 675 675 674 543 457 471 465 485 361 Amortization of developed technology 3,175 3,245 3,347 3,347 2,663 2,645 2,644 2,420 2,307 2,307 Interest income (79) (102) (80) (94) (52) (30) (10) (21) (26) (24) EBITDA (a) 2,437 835 727 865 1,975 1,789 129 421 497 (2,041) Share-based compensation 482 1,420 1,282 1,265 409 912 1,458 1,099 1,219 1,645 Restructuring, severance and other charges 231 222 58 448 440 557 378 826 37 77 Asset write-offs and other fair value adjustments - - - - - - - - - - Other non-operating (income) expense 85 (100) 68 28 198 (197) (46) (37) (113) 85 Legal settlements - 15 - 35 91 - 150 - - - Adjusted EBITDA (b) 3,235 2,392 2,135 2,641 3,113 3,061 2,069 2,310 1,640 (234) Capitalized software development costs - - - (57) (2,132) (1,646) (1,795) (2,487) (2,990) (2,714) Adjusted EBITDA less capitalized software development costs (c) 3,235 2,392 2,135 2,584 981 1,415 274 (177) (1,350) (2,948) Capital expenditures (571) (1,708) (277) (589) (744) (851) (2,183) (981) (2,125) (831) Adjusted Earnings from Operations (d) $ 2,664 $ 684 $ 1,858 $ 1,995 $ 237 $ 564 $ (1,909) $ (1,158) $ (3,475) $ (3,779) Product development (operating expenses) $ 10,064 $ 10,525 $ 10,059 $ 10,151 $ 7,089 $ 7,233 $ 7,269 $ 6,812 $ 6,626 $ 8,401 Capitalized software development costs - - - 57 2,132 1,646 1,795 2,487 2,990 2,714 Product development plus capitalized software development costs (e) $ 10,064 $ 10,525 $ 10,059 $ 10,208 $ 9,221 $ 8,879 $ 9,064 $ 9,299 $ 9,616 $ 11,115 (a) EBITDA is defined as net income before income taxes, interest expense, depreciation and amortization (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 EBITDA less capitalized software development costs, a non-GAAP financial measure, is defined as Adjusted EBITDA, less capitalized software development costs (d) Adjusted Earnings from Operations, a non-GAAP financial measure, is defined as Adjusted EBITDA less capitalized software development costs, less capital expenditures (e) Product development plus capitalized software development costs, a non-GAAP financial measure, is defined as total product development expense plus capitalized software development costs 27

Cash Flow TECHNOLOGY | INNOVATION | SOLUTIONS TTM* FY19 FY18 FY17 Operating activities Loss from continuing operations $ (13,003) $ (13,164) $ (8,350) $ (11,721) Non cash adjustments, restructuring, legal settlements 22,406 22,219 16,586 14,110 Changes in assets & liabilities (2,712) (1,814) (1,362) 1,044 Net cash provided by operating activities 6,691 7,241 6,874 3,433 Investing activities Capital expenditures (3,145) (3,318) (6,140) (4,158) Capitalized developed software (57) (2,189) (8,918) (11,888) Investments (27) (27) (27) 2,181 Net cash used in investing activities (3,229) (5,534) (15,085) (13,865) Net cash used in financing activities (1,270) (767) (1,295) (847) Effect of exchange rate (35) (112) 194 (74) Decrease in cash & cash equivalents 2,157 828 (9,312) (11,353) Cash & cash equivalents - beginning of period 35,076 39,943 49,255 60,608 Cash & cash equivalents - end of period $ 37,233 $ 40,771 $ 39,943 $ 49,255 *Trailing twelve months ended June 30, 2019. 28

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, GA • Hong Kong Shenzhen, China Hong Kong • Malaysia Chennai, India • Philippines Manila, Philippines Kuala Lumpur, Malaysia • Singapore Singapore • China Agilysys Demonstration Centers • Las Vegas, Nevada Principal Location India Development Center Country with Installation Reseller • Chennai, India 29

Contact: Dave Wood Richard Land / Norberto Aja VP, Corporate Strategy and Investor Relations JCIR (770) 810-7920 (212) 835-8500 InvestorRelations@agilysys.com agys@jcir.com 30