Agilysys(AGYS) - 2022 Q4 - Annual Report

Revenue Performance - Total net revenue increased by $25.5 million, or 18.6%, in fiscal 2022 compared to fiscal 2021, reaching$ 162.6 million[143] - Products revenue rose by $9.2 million, or 34.6%, driven by higher sales as customers reopened their locations[147] - Support, maintenance, and subscription services revenue grew by$ 10.4 million, or 11.7%, with subscription-based revenue increasing by 28.0%[147] - Total net revenue decreased by $23.6 million, or 14.7%, in fiscal 2021 compared to fiscal 2020, with product revenue down by$ 17.5 million, or 39.6%[165] - Revenue from international operations accounted for 7% of total revenue in fiscal 2022, down from 8% in 2021 and 9% in 2020[203] Profitability - Operating income improved to $6.3 million in fiscal 2022 from a loss of$ 20.96 million in fiscal 2021, marking a significant turnaround[144] - Gross profit increased by $12.2 million, or 13.6%, but gross profit margin decreased from 65.2% to 62.4%[148] - Gross profit increased by$ 8.4 million, or 10.4%, in fiscal 2021, with gross profit margin rising from 50.4% to 65.2%[166] - Operating loss for fiscal 2021 was $20.96 million, improving by$ 13.1 million or 38.5% compared to fiscal 2020[162] Operating Expenses - Operating expenses decreased by $14.9 million, or 13.9%, as a percentage of total revenue fell by 21.5%[149] - Product development expenses decreased by$ 9.0 million, or 16.3%, due to a reduction in share-based compensation expenses[149] - Sales and marketing expenses increased by $0.5 million, or 3.8%, reflecting investments in sales teams and marketing activities[151] - General and administrative expenses decreased by$ 5.5 million, or 16.6%, primarily due to lower share-based compensation expenses[152] - Operating expenses, excluding legal settlements and impairments, increased by $16.8 million, or 18.5%, in fiscal 2021 compared to fiscal 2020[167] - Product development expenses rose by$ 13.9 million, or 33.5%, in fiscal 2021 due to expansion of R&D teams and share-based compensation charges[167] Legal and Tax Matters - Legal settlements increased by $0.8 million during fiscal 2022 compared to fiscal 2021, attributed to more settlements related to employment and business matters[153] - The effective tax rate for fiscal 2022 was 0.5%, down from 1.0% in the previous year[156] - The effective tax rate for fiscal 2021 was 1.0%, compared to (0.6)% in 2020, primarily due to adjustments to deferred tax assets[175] Cash Flow and Liquidity - For fiscal 2022, cash flows provided by operating activities were$ 28.5 million, primarily due to a net income of $6.5 million adjusted for$ 17.7 million in non-cash expenses[180] - As of March 31, 2022, the company had $97.0 million in cash on hand, with 93% of it located in the United States[179] - Cash flows used in investing activities for fiscal 2022 were$ 25.7 million, mainly due to $24.5 million for business combinations[182] - Cash flows used in financing activities for fiscal 2022 were$ 4.9 million, primarily for share repurchases of $3.0 million and$ 1.8 million in preferred stock dividends[184] - The company believes that cash flow from operating activities and access to capital markets will adequately meet its liquidity requirements[179] Federal Net Operating Loss Carryforwards - At March 31, 2022, the company had $196.3 million of federal net operating loss carryforwards expiring between fiscal years 2031 to 2038[160] - The company recorded$ 199.1 million of federal net operating loss carryforwards that expire between fiscal years 2031 to 2038, and $46.8 million that can be carried forward indefinitely[178] Other Financial Information - The company has not entered into any off-balance sheet arrangements that could affect its financial condition[187] - The cash surrender value of corporate-owned life insurance policies was recorded at$ 1.0 million as of the balance sheet date[186] - Total other expense, net, was $251,000 in fiscal 2021, compared to a loss of$ 195,000 in fiscal 2020, reflecting a change of $446,000[173] - Interest income decreased by$ 273,000, or 71.8%, in fiscal 2021 compared to fiscal 2020[173] - The company recorded no impairments in fiscal 2021, following $23.7 million in impairments in fiscal 2020[171]