agys-10q_20200630.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission file number 0-5734

AGILYSYS, INC.

(Exact name of registrant as specified in its charter)

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)

(770) 810-7800

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, without par value	AGYS	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed be sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

The number of Common Shares of the registrant outstanding as of July 28, 2020 was 23,589,518.

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AGILYSYS, INC.

Index


Part I. Financial Information
	Item 1	Financial Statements (Unaudited)	3

		Condensed Consolidated Balance Sheets – June 30, 2020 (Unaudited) and March 31, 2020	3

		Condensed Consolidated Statements of Operations (Unaudited) - Three Months Ended June 30, 2020 and June 30, 2019	4

		Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - Three Months Ended June 30, 2020 and June 30, 2019	5

		Condensed Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended June 30, 2020 and June 30, 2019	6

		Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - Three Months Ended June 30, 2020 and June 30, 2019	7

		Notes to Condensed Consolidated Financial Statements (Unaudited)	8

	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

	Item 3	Quantitative and Qualitative Disclosures About Market Risk	24

	Item 4	Controls and Procedures	24

Part II. Other Information

	Item 1	Legal Proceedings	25

	Item 1A	Risk Factors	25

	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	25

	Item 3	Defaults Upon Senior Securities	25

	Item 4	Mine Safety Disclosures	25

	Item 5	Other Information	25

	Item 6	Exhibits	26

Signatures			27

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AGILYSYS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2020 Unaudited			March 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	74,604		$	46,653
Accounts receivable, net of allowance for expected credit losses of $1,458 and for doubtful accounts of $1,634, respectively		30,494			35,869
Contract assets		2,677			2,125
Inventories		2,760			3,887
Prepaid expenses and other current assets		6,407			4,874
Total current assets		116,942			93,408
Property and equipment, net		11,113			12,230
Operating lease right-of-use assets		13,050			13,829
Goodwill		19,622			19,622
Intangible assets, net		8,400			8,400
Deferred income taxes, non-current		852			764
Other non-current assets		6,124			6,309
Total assets	$	176,103		$	154,562
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	4,439		$	13,403
Contract liabilities		38,149			42,244
Accrued liabilities		8,801			9,033
Operating lease liabilities, current		4,641			4,719
Finance lease obligations, current		24			24
Total current liabilities		56,054			69,423
Deferred income taxes, non-current		884			880
Operating lease liabilities, non-current		9,810			10,617
Finance lease obligations, non-current		20			25
Other non-current liabilities		2,786			1,860
Commitments and contingencies (see Note 8)
Series A convertible preferred stock, no par value		35,199			—
Shareholders' equity:
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 23,612,924 and 23,609,398 shares outstanding at June 30, 2020 and March 31, 2020, respectively		9,482			9,482
Treasury shares, 7,993,907 and 7,997,433 at June 30, 2020 and March 31, 2020, respectively		(2,399	)		(2,401	)
Capital in excess of stated value		6,760			5,491
Retained earnings		57,331			58,984
Accumulated other comprehensive income		176			201
Total shareholders' equity		71,350			71,757
Total liabilities and shareholders' equity	$	176,103		$	154,562

See accompanying notes to unaudited condensed consolidated financial statements.

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AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended June 30,
	2020			2019
Net revenue:
Products	$	5,239		$	10,869
Support, maintenance and subscription services		20,497			20,082
Professional services		4,071			7,438
Total net revenue		29,807			38,389
Cost of goods sold:
Products (inclusive of developed technology amortization)		3,015			8,623
Support, maintenance and subscription services		4,306			4,181
Professional services		3,936			5,571
Total cost of goods sold		11,257			18,375
Gross profit		18,550			20,014
Gross profit margin		62.2	%		52.1	%
Operating expenses:
Product development		8,266			10,064
Sales and marketing		2,601			4,498
General and administrative		5,719			5,874
Depreciation of fixed assets		723			213
Amortization of intangibles		461			678
Severance and other charges		1,203			231
Total operating expense		18,973			21,558
Operating loss		(423	)		(1,544	)
Other (income) expense:
Interest income		(21	)		(80	)
Interest expense		1			1
Other expense, net		106			85
Loss before taxes		(509	)		(1,550	)
Income tax expense		8			25
Net loss	$	(517	)	$	(1,575	)
Series A convertible preferred stock issuance costs		(937	)		-
Series A convertible preferred stock dividends		(199	)		-
Net loss available to common shareholders	$	(1,653	)	$	(1,575	)

Weighted average shares outstanding - basic and diluted		23,405			23,212

Net loss per share - basic and diluted:	$	(0.07	)	$	(0.07	)

See accompanying notes to unaudited condensed consolidated financial statements.

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AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended June 30,
	2020			2019
Net loss	$	(517	)	$	(1,575	)
Other comprehensive loss, net of tax:
Unrealized foreign currency translation adjustments		(25	)		(95	)
Total comprehensive loss	$	(542	)	$	(1,670	)

See accompanying notes to unaudited condensed consolidated financial statements.

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AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended June 30,
	2020			2019
Operating activities
Net loss	$	(517	)	$	(1,575	)
Adjustments to reconcile loss from operations to net cash used in operating activities
Depreciation		723			213
Amortization of intangibles		461			678
Amortization of developed technology		—			3,175
Deferred income taxes		(84	)		5
Share-based compensation		1,426			482
Changes in operating assets and liabilities		(6,938	)		(4,891	)
Net cash used in operating activities		(4,929	)		(1,913	)
Investing activities
Capital expenditures		(243	)		(571	)
Additional investments in corporate-owned life insurance policies		(2	)		(2	)
Net cash used in investing activities		(245	)		(573	)
Financing activities
Repurchase of common shares to satisfy employee tax withholding		(934	)		(1,026	)
Series A convertible preferred stock issuance proceeds, net of issuance costs		34,063			—
Principal payments under long-term obligations		(6	)		(2	)
Net cash provided by (used in) financing activities		33,123			(1,028	)
Effect of exchange rate changes on cash		2			(24	)
Net increase (decrease) in cash and cash equivalents		27,951			(3,538	)
Cash and cash equivalents at beginning of period		46,653			40,771
Cash and cash equivalents at end of period	$	74,604		$	37,233

See accompanying notes to unaudited condensed consolidated financial statements.

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AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)


	Common Shares										Capital in						Accumulated
	Issued				In Treasury						excess of						other
(In thousands)	Shares		Stated value		Shares			Stated value			stated value			Retained earnings			comprehensive loss			Total

Balance at March 31, 2019		31,607	$	9,482		(8,105	)	$	(2,433	)	$	781		$	93,051		$	(259	)	$	100,622
Share-based compensation		—		—		—			—			1,067			—			—			1,067
Restricted shares issued, net		—		—		168			51			(51	)		—			—			—
Shares issued upon exercise of SSARs		—		—		14			4			(4	)		—			—			—
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares		—		—		(4	)		(1	)		(95	)		—			—			(96	)
Net loss		—		—		—			—			—			(1,575	)		—			(1,575	)
Unrealized translation adjustments		—		—		—			—			—			—			(95	)		(95	)
Balance at June 30, 2019		31,607	$	9,482		(7,927	)	$	(2,379	)	$	1,698		$	91,476		$	(354	)	$	99,923

Balance at March 31, 2020		31,607	$	9,482		(7,997	)	$	(2,401	)	$	5,491		$	58,984		$	201		$	71,757
Share-based compensation		—		—		—			—			1,426			—			—			1,426
Restricted shares issued, net		—		—		(14	)		(4	)		4			—			—			—
Shares issued upon exercise of SSARs		—		—		25			8			(8	)		—			—			—
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares		—		—		(8	)		(2	)		(153	)		—			—			(155	)
Net loss		—		—		—			—			—			(517	)		—			(517	)
Series A convertible preferred stock issuance costs		—		—		—			—			—			(937	)		—			(937	)
Series A convertible preferred stock dividends		—		—		—			—			—			(199	)		—			(199	)
Unrealized translation adjustments		—		—		—			—			—			—			(25	)		(25	)
Balance at June 30, 2020		31,607	$	9,482		(7,994	)	$	(2,399	)	$	6,760		$	57,331		$	176		$	71,350

See accompanying notes to unaudited condensed consolidated financial statements.

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AGILYSYS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Table amounts in thousands, except per share data)

1. Nature of Operations and Financial Statement Presentation

Nature of Operations

Agilysys has been a leader in hospitality software for more than 40 years, delivering innovative guest-centric technology solutions for gaming, hotels, resorts and cruise, corporate foodservice management, restaurants, universities, stadia, airport foodservice and healthcare. Agilysys offers the most comprehensive solutions in the industry, including point of sale (POS), property management systems (PMS), inventory and procurement, payments, and related applications, to manage the entire guest journey.

The Company has just one reportable segment serving the global hospitality industry. Agilysys operates across North America, Europe, Asia-Pacific, and India with headquarters located in Alpharetta, GA.

COVID-19 Pandemic

On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. The outbreak has reached all geographic regions in which we do business, and government authorities around the world have implemented extensive measures attempting to contain the spread and mitigate the effects of the virus, including travel bans and restrictions, border closings, quarantines, shelter-in-place orders, closures of non-essential businesses, and social distancing requirements. The global spread of COVID-19 and the actions taken in response have negatively impacted us, our customers, our suppliers and the many communities in which we do business. The overall extent and duration of economic and business disruption is not currently known. In response to these challenges, we quickly adjusted our business policies and practices for employees to work from home and have taken other measures to continue our operations with safety as our priority.

We continuously monitor and assess the impact of the COVID-19 pandemic, including recommendations and orders from government and public health authorities. We are working to help our customers maintain their operations during this difficult time while managing our teams to be prepared for continuously changing demand for our products and services.

See Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview— Recent Developments” of this report for a more detailed discussion of the impact of COVID-19 on our business.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include our accounts consolidated with our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Our fiscal year ends on March 31st. References to a particular year refer to the fiscal year ending in March of that year. For example, fiscal 2021 refers to the fiscal year ending March 31, 2021.

Our unaudited interim financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information, the instructions to the Quarterly Report on Form 10-Q (Quarterly Report) under the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10-01 of Regulation S-X under the Exchange Act. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements.

The Condensed Consolidated Balance Sheet as of June 30, 2020, as well as the Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Loss, Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Shareholders’ Equity for the three months ended June 30, 2020 and 2019, are unaudited. However, these financial statements have been prepared on the same basis as those in the audited annual financial statements, except for the recently adopted accounting pronouncements described below. In the opinion of management, all adjustments of a recurring nature necessary to fairly state the results of operations, financial position, and cash flows have been made.

These unaudited interim financial statements should be read together with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended March 31, 2020, filed with the Securities and Exchange Commission (SEC) on May 22, 2020.

Use of estimates

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Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods.

Considering the currently unknown extent and duration of the COVID-19 pandemic, we face a greater degree of uncertainty than normal in making the judgments and estimates needed to apply to certain of our significant accounting policies. We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts COVID-19 as of June 30, 2020 and through the date of this report. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

2. Summary of Significant Accounting Policies

A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended March 31, 2020, included in our Annual Report on Form 10-K. We describe our accounting policy for Series A convertible preferred stock further below. There have been no other material changes to our significant accounting policies from those disclosed therein.

Adopted and Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 addresses the treatment of implementation costs incurred in a hosting arrangement that is a service contract. The update does not impact the accounting for the service element of a hosting arrangement that is a service contract. We adopted ASU 2018-15 as of April 1, 2020 with no impact on our condensed consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 addresses the required disclosures around fair value measurement. The disclosure requirements of the reasons for transfers between Level 1 and Level 2, the policy for timing transfers between levels, and the valuation process for Level 3 measurements have been removed. Certain modifications were made to required disclosures and additional requirements were established. We adopted ASU 2018-13 as of April 1, 2020 with no impact on our condensed consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment. ASU No. 2017-04 eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. We adopted ASU 2017-04 as of April 1, 2020 with no impact on our condensed consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments. This new standard requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company’s financial instruments within the scope of this guidance primarily includes accounts receivable and contract assets. We adopted ASU 2016-13 as of April 1, 2020 under the modified retrospective approach. As a result, comparative information has not been restated and continues to be reported under accounting standards applicable for those periods. The adoption of ASU 2016-13 did not have a material impact on our condensed consolidated financial statements, including accounting policies, given our limited historical write-off activity.

3. Revenue Recognition

Our customary business practice is to enter into legally enforceable written contracts with our customers. The majority of our contracts are governed by a master agreement between us and the customer, which sets forth the general terms and conditions of any individual contract between the parties, which is then supplemented by a customer purchase order to specify the different goods and services, the associated prices, and any additional terms for an individual contract. Performance obligations specific to each individual contract are defined within the terms of each purchase order. Each performance obligation is identified based on the goods and services that will be transferred to our customer that are both capable of being distinct and are distinct within the context of the contract. The transaction price is determined based on the consideration to which we will be entitled and expect to receive in exchange for transferring goods or services to the customer. Typically, our contracts do not provide our customer with any right of return or refund; we do not constrain the contract price as it is probable that there will not be a significant revenue reversal due to a return or refund.

Typically, our customer contracts contain one or more of the following goods or services which constitute performance obligations.

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Our software licenses typically provide for a perpetual right to use our software. Generally, our contracts do not provide significant services of integration, and customization and installation services are not required to be purchased directly from us. The software is delivered before related services are provided and is functional without professional services, updates and technical support. We have concluded that the software license is distinct as the customer can benefit from the software on its own. Software revenue is typically recognized when the software is delivered or made available for download to the customer.

Revenue for hardware sales is recognized when the product is shipped to the customer and when obligations that affect the customer's final acceptance of the arrangement have been fulfilled. Hardware is purchased from suppliers and provided to the end-user customers via drop-ship or from inventory. We are responsible for negotiating price both with the supplier and the customer, payment to the supplier, establishing payment terms and product returns with the customer, and we bear the credit risk if the customer does not pay for the goods. As the principal contact with the customer, we recognize revenue and cost of goods sold when we are notified by the supplier that the product has been shipped. In certain limited instances, as shipping terms dictate, revenue is recognized upon receipt at the point of destination or upon installation at the customer site.

Support and maintenance revenue is derived from providing telephone and on-line technical support services, bug fixes, and unspecified software updates and upgrades to customers on a when-and-if-available basis. These services represent a stand-ready obligation that is concurrently delivered and has the same pattern of transfer to the customer; we account for these support and maintenance services as a single performance obligation recognized over the term of the maintenance agreement.

Our subscription service revenue is comprised of fees for contracts that provide customers a right to access our software for a subscribed period. We do not provide the customer the contractual right to license the software at any time outside of the subscription period under these contracts. The customer can only benefit from the software and software maintenance when provided the right to access the software. Accordingly, each of the rights to access the software, the maintenance services, and any hosting services is not considered a distinct performance obligation in the context of the contract and should be combined into a single performance obligation to be recognized over the contract period. The Company recognizes subscription revenue over a one-month period based on the typical monthly invoicing and renewal cycle in accordance with our customer agreement terms.

Professional services revenues primarily consist of fees for consulting, installation, integration and training and are generally recognized over time as the customer simultaneously receives and consumes the benefits of the professional services as the services are being performed. Professional services can be provided by internal or external providers, do not significantly affect the customer's ability to access or use other provided goods or services, and provide a measure of benefit beyond that of other promised goods or services in the contract. As a result, professional services are considered distinct in the context of the contract and represent a separate performance obligation. Professional services that are billed on a time and materials basis are recognized over time as the services are performed. For contracts billed on a fixed price basis, revenue is recognized over time using an input method based on labor hours expended to date relative to the total labor hours expected to be required to satisfy the related performance obligation.

We use the market approach to drive standalone selling price ("SSP") by maximizing observable data points (in the form of recently executed customer contracts) to determine the price customers are willing to pay for the goods and services transferred. If the contract contains a single performance obligation, the entire transaction price is allocated to that performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative SSP basis.

Shipping and handling fees billed to customers are recognized as revenue and the related costs are recognized in cost of goods sold. Revenue is recorded net of any applicable taxes collected and remitted to governmental agencies.

Disaggregation of Revenue

We derive and report our revenue from the sale of products (software licenses, third party hardware and operating systems), support, maintenance and subscription services and professional services. Revenue recognized at a point in time (products) totaled $5.2 million and $10.9 million, and over time (support, maintenance and subscription services and professional services) totaled $24.6 million and $27.5 million for the three months ended June 30, 2020 and 2019, respectively.

Contract Balances

Contract assets are rights to consideration in exchange for goods or services that we have transferred to a customer when that right is conditional on something other than the passage of time. The majority of our contract assets represent unbilled amounts related to professional services. We expect billing and collection of our contract assets to occur within the next twelve months. We receive payments from customers based upon contractual billing schedules and accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities represent consideration received or consideration which is unconditionally due from customers prior to transferring goods or services to the customer under the terms of the contract.

Revenue recognized from amounts included in contract liabilities at the beginning of the period was $17.5 million and $15.6 million for the three months ended June 30, 2020 and 2019, respectively. Because the right to the transaction became unconditional, we transferred

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to accounts receivable from contract assets at the beginning of the period, $1.4 million and $2.0 million for the three months ended June 30, 2020 and 2019, respectively.

Our arrangements are for a period of one year or less. As a result, unsatisfied performance obligations as of June 30, 2020 are expected to be satisfied and the allocated transaction price recognized in revenue within a period of 12 months or less.

Assets Recognized from Costs to Obtain a Contract

Sales commission expenses that would not have occurred absent the customer contracts are considered incremental costs to obtain a contract. We have elected to take the practical expedient available to expense the incremental costs to obtain a contract as incurred when the expected benefit and amortization period is one year or less. For subscription contracts that are renewed monthly based on an agreement term, we capitalize commission expenses and amortize as we satisfy the underlying performance obligations, generally based on the contract terms and anticipated renewals. Other sales commission expenses have a period of benefit of one year or less and are therefore expensed as incurred in line with the practical expedient elected.

We had $3.2 million and $3.3 million of capitalized sales incentive costs as of June 30, 2020 and 2019, respectively. These balances are included in other non-current assets on our condensed consolidated balance sheets. During the three months ended June 30, 2020 and 2019, we expensed $0.6 million and $1.0 million, respectively, of sales commissions, which included amortization of capitalized amounts of $0.4 million and $0.3 million, respectively. These expenses are included in operating expenses – sales and marketing in our condensed consolidated statement of operations. All other costs to obtain a contract are not considered incremental and therefore are expensed as incurred.

4. Intangible Assets and Software Development Costs

The following table summarizes our intangible assets and software development costs:

	June 30 and March 31, 2020
	Gross								Net
	carrying		Accumulated						carrying
(In thousands)	amount		amortization			Impairment			amount
Amortized intangible assets:
Customer relationships	$	10,775	$	(10,775	)	$	—		$	—
Non-competition agreements		2,700		(2,700	)		—			—
Developed technology		10,398		(10,398	)		—			—
Trade names		230		(230	)		—			—
Patented technology		80		(80	)		—			—
		24,183		(24,183	)		—			—
Trade names		8,400	N/A				—			8,400
Total intangible assets	$	32,583	$	(24,183	)	$	—		$	8,400

(In thousands)
Total software development costs	$	67,541	$	(45,535	)	$	(22,006	)	$	—

As of March 31, 2020, management determined the net realizable value of the remaining capitalized software development costs for certain solutions within out rGuest suite of products no longer exceeded their carrying value, and as a result, recorded non-cash impairment charges of $22.0 million for the year ended March 31, 2020. The impact of the COVID-19 pandemic on the hospitality industry resulted in economic conditions that made it difficult to project future sales and revenue accurately for the related rGuest solutions. After evaluating the Company’s strategy for market development and continued costs to support the software, an impairment charge was required. The amount of impairment recognized during the year ended March 31, 2020 reduced the carry value of capitalized software development costs to zero with no remaining amortization expense to be recognized in future periods.

Amortization expense for software development costs related to assets to be sold, leased, or otherwise marketed was $3.2 million for the three months ended June 30, 2019. These charges are included as costs of goods sold - products in our condensed consolidated statements of operations.

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5. Additional Balance Sheet Information

Additional information related to the condensed consolidated balance sheets is as follows:

	June 30, 2020		March 31, 2020
Accrued liabilities:
Salaries, wages, and related benefits	$	6,811	$	6,945
Other taxes payable		1,512		1,649
Severance liabilities		103		32
Professional fees		104		50
Other		271		357
Total	$	8,801	$	9,033
Other non-current liabilities:
Uncertain tax positions	$	1,110	$	1,103
Asset retirement obligations		170		170
Employee benefit obligations		1,429		511
Other		77		76
Total	$	2,786	$	1,860

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6. Supplemental Disclosures of Cash Flow Information

Additional information related to the consolidated statements of cash flows is as follows:

	Three Months Ended June 30,
(In thousands)		2020		2019
Cash (receipts) for interest, net		(20	)	(79	)
Cash payments for income tax, net		134		73
Cash payments for operating leases		1,642		1,014
Cash payments for finance leases		8		8
Accrued capital expenditures		19		51

7. Income Taxes

The following table compares our income tax expense and effective tax rates for the three months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
(Dollars in thousands)	2020			2019
Income tax expense	$	8		$	25
Effective tax rate		(1.6	)%		(1.6	)%

For the three months ended June 30, 2020 and 2019, the effective tax rate was different than the statutory rate due primarily to the recognition of net operating losses as deferred tax assets in the U.S. and certain foreign jurisdictions, which were offset by increases in the valuation allowance, certain foreign and state tax effects and other U.S. permanent book to tax differences.

Because of our losses in prior periods, we have recorded a valuation allowance offsetting substantially all of our deferred tax assets in the U.S. and certain foreign jurisdictions, as management believes that it is more likely than not that we will not realize the benefits of these deductible differences. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible.

8. Commitments and Contingencies

Agilysys is the subject of various threatened or pending legal actions and contingencies in the normal course of conducting its business. We provide for costs related to these matters when a loss is probable, and the amount can be reasonably estimated. The effect of the outcome of these matters on our future results of operations and liquidity cannot be predicted because any such effect depends on future results of operations and the amount or timing of the resolution of such matters. While it is not possible to predict with certainty, management believes that the ultimate resolution of such individual or aggregated matters will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

On April 6, 2012, Ameranth, Inc. filed a complaint against us in the U.S. District Court of Southern District of California alleging that certain of our products infringe patents owned by Ameranth directed to configuring and transmitting hospitality menus (e.g. restaurant menus) for display on electronic devices and synchronizing the menu content between the devices. The case against us was consolidated with similar cases brought by Ameranth against more than 30 other defendants. All but one of the patents at issue in the case were invalidated by the U.S. Court of Appeals for the Federal Circuit in 2016. In September 2018, the District Court found the one surviving Ameranth patent invalid and granted summary judgment in favor of the movant co-defendants. In November 2019, the U.S. Court of Appeals for the Federal Circuit affirmed the lower court’s summary judgement with respect to all claims except for two, which were not asserted against Agilysys. In early 2020, the Court of Appeals also denied Ameranth’s request for rehearing. Finally, Ameranth filed for writ of certiorari to the United States Supreme Court. The Supreme Court has not yet responded to the writ.

We were not a party to the appeal, and it is currently unclear what impact the summary judgement ruling or writ of certiorari may have on our case. Ameranth seeks monetary damages, injunctive relief, costs and attorneys' fees from us. At this time, we are not able to predict the outcome of this lawsuit. However, we dispute the allegations of wrongdoing and are vigorously defending ourselves in this matter.

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9. Loss per Share

The following data shows the amounts used in computing (loss) per share and the effect on earnings and the weighted average number of shares of dilutive potential common shares.

	Three Months Ended June 30,
(In thousands, except per share data)	2020			2019
Numerator:
Net loss	$	(517	)	$	(1,575	)
Series A convertible preferred stock issuance costs		(937	)		—
Series A convertible preferred stock dividends		(199	)		—
Net loss available to common shareholders	$	(1,653	)	$	(1,575	)

Denominator:
Weighted average shares outstanding - basic and diluted		23,405			23,212

Loss per share - basic and diluted:
Loss per share	$	(0.07	)	$	(0.07	)

Anti-dilutive stock options, SSARs, restricted shares, performance shares and preferred shares		3,560			1,273

Basic loss per share is computed as net income available to common shareholders divided by the weighted average basic shares outstanding. The outstanding shares used to calculate the weighted average basic shares excludes 194,587 and 445,829 of restricted shares at June 30, 2020 and 2019, respectively, as these shares were issued but were not vested and therefore, not considered outstanding for purposes of computing basic loss per share at the balance sheet dates.

Diluted loss per share includes the effect of all potentially dilutive securities on earnings per share. We have stock options, stock-settled appreciation rights ("SSARs"), unvested restricted shares and unvested performance shares that are potentially dilutive securities. When a loss is reported, the denominator of diluted earnings per share cannot be adjusted for the dilutive impact of share-based compensation awards because doing so would be anti-dilutive. Therefore, for all periods presented, basic weighted average shares outstanding were used in calculating the diluted net loss per share.

10. Share-based Compensation

We may grant non-qualified stock options, incentive stock options, SSARs, restricted shares, and restricted share units under our shareholder-approved 2016 Stock Incentive Plan ("2016 Plan") for up to 2.0 million common shares, plus 957,575 common shares, the number of shares that were remaining for grant under the 2011 Stock Incentive Plan ("2011 Plan") as of the effective date of the 2016 Plan, plus the number of shares remaining for grant under the 2011 Plan that are forfeited, settled in cash, canceled or expired. The maximum aggregate number of restricted shares or restricted share units that may be granted under the 2016 Plan is 1.25 million.

We may distribute authorized but unissued shares or treasury shares to satisfy share option and appreciation right exercises or restricted share and performance share awards.

We record compensation expense related to stock options, SSARs, restricted shares, and performance shares granted to certain employees and non-employee directors based on the fair value of the awards on the grant date. The fair value of restricted share and performance share awards is based on the closing price of our common shares on the grant date. The fair value of stock option and SSARs awards is estimated on the grant date using the Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of our common shares. During fiscal year 2020, we issued 125,000 SSAR awards which are subject to a market condition. The fair value of these awards is estimated using the Lattice option pricing model which utilizes a binary tree and includes multiple assumptions which include volatility and life of the award to determine an appropriate fair value based on the award grant date.

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The following table summarizes the share-based compensation expense for options, SSARs, restricted and performance awards included in the condensed consolidated statements of operations:


	Three Months Ended June 30,
(In thousands)	2020		2019
Product development	$	172	$	268
Sales and marketing		36		62
General and administrative		1,218		152
Total share-based compensation expense	$	1,426	$	482

Stock-Settled Appreciation Rights

SSARs are rights granted to an employee to receive value equal to the difference in the price of our common shares on the date of the grant and on the date of exercise. This value is settled in common shares of Agilysys, Inc.

The following table summarizes the activity during the three months ended June 30, 2020 for SSARs awarded under the 2011 and 2016 Plans:

	Number of Rights			Weighted-Average Exercise Price		Remaining Contractual Term		Aggregate Intrinsic Value
(In thousands, except share and per share data)				(per right)		(in years)
Outstanding at April 1, 2020		1,644,888		$	21.07
Exercised		(56,226	)		11.16
Forfeited		(11,276	)		18.71
Expired		(88	)		14.22
Outstanding at June 30, 2020		1,577,298		$	21.44		4.7	$	6,028
Exercisable at June 30, 2020		942,608		$	12.87		3.8	$	5,887
Vested and expected to vest at June 30, 2020		1,577,298		$	21.44		4.7	$	6,028

As of June 30, 2020, total unrecognized share-based compensation expense related to non-vested SSARs was $4.3 million, which is expected to be recognized over a weighted-average vesting period of 2.1 years.

Restricted Shares

We granted shares to certain of our Directors, executives and key employees, the vesting of which is service-based. The following table summarizes the activity during the three months ended June 30, 2020 for restricted shares awarded under the 2011 and 2016 Plans:

	Number of Shares			Weighted-Average Grant-Date Fair Value
(In thousands, except share and per share data)				(per share)
Outstanding at April 1, 2020		178,462		$	19.89
Forfeited		(13,995	)		18.84
Outstanding at June 30, 2020		164,467		$	19.98

The weighted-average grant date fair value of the restricted shares is determined based upon the closing price of our common shares on the grant date. As of June 30, 2020, total unrecognized share-based compensation expense related to non-vested restricted stock was $1.6 million, which is expected to be recognized over a weighted-average vesting period of 1.7 years.

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Performance Shares

We awarded certain restricted shares to our Chief Executive Officer, the vesting of which is performance based. The number of shares that vest will be based on relative attainment of a performance metric and any unvested shares will forfeit upon settlement of the bonus.

The following table summarizes the activity during the three months ended June 30, 2020 for the performance shares awarded under the 2016 Plan:

(In thousands, except share and per share data)	Number of Shares
Outstanding at April 1, 2020		30,120
Granted		—
Vested		—
Forfeited		—
Outstanding at June 30, 2020		30,120

Based on the performance goals, the Compensation Committee of the board of directors awarded 6,714 of the original 30,120 shares having a value of $0.1 million based on the closing price of the Company’s common stock on July 16, 2020, the date that the Committee made its determination. The remaining 23,406 shares subject to the original annual incentive grant were forfeited and can never be earned by our Chief Executive Officer.

11. Preferred Stock

Series A Convertible Preferred Stock

On May 22, 2020, we completed the sale of 1,735,457 shares of our preferred stock, without par value, designated as “Series A Convertible Preferred Stock” (the “Convertible Preferred Stock”) to MAK Capital Fund L.P. and MAK Capital Distressed Debt Fund I, LP (the “Holders”) each, in its capacity as a designee of MAK Capital One LLC (the “Purchaser”), pursuant to the terms of the Investment Agreement, dated as of May 11, 2020, between the Company and the Purchaser, for an aggregate purchase price of $35 million. We incurred issuance costs of $0.9 million. We added all issuance costs that were netted against the proceeds upon issuance of the Convertible Preferred Stock to its redemption value. As disclosed in our Annual Report for the fiscal year ended March 31, 2020, Michael Kaufman, the Chairman of the Company’s Board of Directors, is the Chief Executive Officer of MAK Capital One LLC.

Accounting Policy

We classify convertible preferred stock as temporary equity in the condensed consolidated balance sheets due to certain contingent redemption clauses that are at the election of the Holders. We increase the carrying value of the convertible preferred stock to its redemption value (described below) for all undeclared dividends using the interest method.

The Convertible Preferred Stock has the following rights, preferences and restrictions (the Certificate of Amendment included as Exhibit 3.1 to our Current Report on Form 8-K, filed on May 26, 2020, defines all terms not otherwise defined below):

Voting

The Holders will be entitled to one vote for each share of Convertible Preferred Stock upon all matters presented to the common shareholders of the Company, and except as otherwise provided by the Amended Articles of Incorporation of the Company or required by law, the Holders and common shareholders will vote together as one class on all matters. Additionally, certain matters specific to the Convertible Preferred Stock will require the approval of two-thirds of the outstanding Convertible Preferred Stock, voting as a separate class.

Liquidation Preference

Upon a liquidation, dissolution or winding up of the Company, each share of Convertible Preferred Stock will be entitled to receive an amount per share equal to the greater of (i) the purchase price paid by the Purchaser, plus all accrued and unpaid dividends (the “Liquidation Preference”) and (ii) the amount that the Holder would have been entitled to receive at such time if the Convertible Preferred Stock were converted into common stock.

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Redemption

On and after the fifth anniversary of the date the Convertible Preferred Stock is initially issued, the Company will have the right, and the Holders will have the right to require the Company, in each case, at the initiating party’s election, to redeem all, but not less than all, of the then-outstanding Convertible Preferred Stock for an amount equal to the Liquidation Preference.

Conversion

Each Holder will have the right, at its option, to convert its Convertible Preferred Stock, in whole or in part, into fully paid and non-assessable shares of common stock at a conversion price equal to $20.1676 per share (as may be adjusted from time to time, as described in the Certificate of Amendment).

Subject to certain conditions, the Company may, at its option, require conversion of all of the outstanding shares of Convertible Preferred Stock to common stock if, at any time after November 22, 2023, the daily volume-weighted average price of the Company’s common stock is at least 150% of the conversion price for at least 20 trading days during the 30 consecutive trading days immediately preceding the date the Company notifies the Holders of the election to convert.

Dividends

The Holders are entitled to dividends on the Liquidation Preference at the rate of 5.25% per annum, payable semi-annually either (i) 50% in cash and 50% in kind as an increase in the then-current Liquidation Preference or (ii) 100% in cash, at the option of the Company. The Holders are not entitled to participate in dividends declared or paid on the common stock on an as-converted basis; however, certain anti-dilution adjustments to the Convertible Preferred Stock may be made in the event of such dividends.

The Convertible Preferred Stock ranks senior to the Company’s common stock with respect to dividends and distributions on liquidation, winding-up and dissolution. Upon a liquidation, dissolution or winding up of the Company, each share of Convertible Preferred Stock will be entitled to receive an amount per share equal to the greater of (i) the Liquidation Preference and (ii) the amount that the Holder would have been entitled to receive at such time if the Convertible Preferred Stock were converted into common stock.

Change in Control Events

Upon certain change of control events involving the Company, the Company has the right, and each Holder has the right, in each case, at the initiating party’s election, to require the Company to repurchase all or a portion of its then-outstanding shares of Convertible Preferred Stock for cash consideration equal to (i) 150% of the then-current Liquidation Preference for a change of control occurring prior to the third anniversary of the date the Convertible Preferred Stock is initially issued, (ii) 125% of the then-current Liquidation Preference for a change of control occurring on or following the third anniversary and prior to the fifth anniversary of the date the Convertible Preferred Stock is initially issued and (iii) 100% of the then-current Liquidation Preference for a change of control occurring on or following the fifth anniversary of the date the Convertible Preferred Stock is initially issued.

Standstill Restrictions

The Purchaser and its affiliates are subject to certain customary standstill provisions that restrict them from, among other actions, acquiring additional securities of the Company if such acquisition would result in the Purchaser beneficially owning in excess of 25% of the outstanding shares of common stock of the Company until the later of the third anniversary of the date the Convertible Preferred Stock is initially issued and the date on which the Purchaser no longer has record or beneficial ownership of common stock and Convertible Preferred Stock that constitute at least 10% of the outstanding common stock.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

In “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”), management explains the general financial condition and results of operations for Agilysys and subsidiaries including:

— what factors affect our business;

— what our earnings and costs were;

— why those earnings and costs were different from the year before;

— where the earnings came from;

— how our financial condition was affected; and

— where the cash will come from to fund future operations.

The MD&A analyzes changes in specific line items in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows and provides information that management believes is important to assessing and understanding our consolidated financial condition and results of operations. This Quarterly Report on Form 10-Q updates information included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020, filed with the Securities and Exchange Commission (SEC). This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes that appear in Item 1 of this Quarterly Report as well as our Annual Report for the year ended March 31, 2020. Information provided in the MD&A may include forward-looking statements that involve risks and uncertainties. Many factors could cause actual results to be materially different from those contained in the forward-looking statements. See “Forward-Looking Information” on page 29 of this Quarterly Report, Item 1A "Risk Factors" in Part II of this Quarterly Report, and Item 1A “Risk Factors” in Part I of our Annual Report for the fiscal year ended March 31, 2020 for additional information concerning these items. Management believes that this information, discussion, and disclosure is important in making decisions about investing in Agilysys.

Overview

Recent Developments

COVID-19 Pandemic

During the first quarter, revenue was negatively impacted by delays and reduced spending attributed to the impact of the COVID-19 pandemic on our customers’ operational priorities and as a result of various one-time recurring revenue related and other concessions we have given to customers to help them during this time of need. Due to the pandemic, we have seen a reduction or delay in customer contracts and we have been unable to conduct face-to-face meetings with existing or prospective customers, present in-person demonstrations of our solutions, or host or attend in-person trade shows and conferences. Limitations on access to the facilities of our customers have also impacted our ability to deliver some of our products, complete certain implementations, and provide in-person consulting and training services, negatively impacting our ability to recognize revenue. We continued to experience high recurring revenue renewal rates during the first quarter. We have also begun to offer new software modules of our solutions designed to help our customers address challenges created by the pandemic now and into the future. Despite our strong first quarter recurring renewal rates and new solution offerings, we cannot predict how the pandemic will impact our results in future periods, including to the extent that customers delay or miss payments, customers defer, reduce, or refrain from placing orders or renewing subscriptions or maintenance arrangements, or travel restrictions and site access restrictions remain necessary.

We continue to conduct business with substantial modifications to employee travel, employee work locations, virtualization or cancellation of customer and employee events, and remote sales, implementation, and support activities, among other modifications. These modifications may continue to delay or reduce sales and harm productivity and collaboration. In addition, during the first quarter of our fiscal 2021, we reduced discretionary costs, implemented a hiring freeze on non-essential positions and reduced payroll and

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related costs through layoffs, employee furloughs, employee retirement benefit limitations, and salary decreases for executive team members and certain other employees of the Company. These actions may have an adverse impact on us, particularly if they remain in place for an extended period.

We may take further actions that alter our business operations as the situation evolves. As a result, the ultimate impact of the COVID-19 pandemic and the effects of the operational alterations we have made in response on our business, financial condition, liquidity, and financial results cannot be predicted at this time.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. The CARES Act did not have a material impact on our consolidated financial condition or results of operations as of and for the quarter ended June 30, 2020. However, we plan to continue deferring the timing of employer payroll tax payments and accelerating the refund of AMT credits as permitted by the CARES Act.

MAK Capital Investment

In May 2020, we entered into an agreement to sell to MAK Capital One, LLC (“MAK Capital”) $35 million of convertible preferred stock carrying a 5.25% dividend that will be convertible into shares of the Company’s common stock. The transaction resulted in the issuance of 1,735,457 preferred shares which added $35 million in preferred stock to the Company’s balance sheet and increased our cash balance by the $35 million investment less closing costs of $0.9 million. The 5.25% dividends will accumulate and increase the liquidation preference of the preferred stock for any undeclared amounts.

Our Business

Agilysys has been a leader in hospitality software for more than 40 years, delivering innovative guest-centric technology solutions for casinos, hotels, resorts, cruise ships, managed foodservice providers, stadiums and arenas. Agilysys offers the most comprehensive solutions in the industry, including point of sale (POS), property management systems (PMS), inventory and procurement, payment solutions, and related hospitality applications, to manage the entire guest journey. Agilysys is known for its leadership in hospitality, its broad product offerings and its customer-centric service. Some of the largest hospitality companies around the world use Agilysys solutions to help improve guest loyalty, drive revenue growth, increase operational efficiencies and support social distancing. The Company has just one reportable segment serving the global hospitality industry. Agilysys operates across North America, Europe, Asia-Pacific, and India with headquarters located in Alpharetta, Georgia.

We strive to increase shareholder value by improving operating and financial performance and profitably growing the business through superior products and services. To that end, we expect to invest a certain portion of our cash on hand to fund enhancements to existing software products, to develop and market new software products, and to expand our customer breadth, both vertically and geographically.

Our strategic plan specifically focuses on:

•

Putting the customer first with world class support and services

•

Accelerating our product development

•

Improving organizational efficiency and teamwork

•

Developing our employees and leaders

•

Growing revenue by improving the breadth and depth of our product set

•

Growing revenue through international expansion

The primary objective of our ongoing strategic planning process is to create shareholder value by capitalizing on growth opportunities, turning profitable and strengthening our competitive position within the specific technology solutions and end markets we serve. Profitability and industry leading growth will be achieved through tighter management of operating expenses and sharpening the focus of our investments to concentrate on growth opportunities that offer the highest returns.

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Revenue - Defined

As required by the SEC, we separately present revenue earned as products revenue, support, maintenance and subscription services revenue or professional services revenue in our condensed consolidated statements of operations. In addition to the SEC requirements, we may, at times, also refer to revenue as defined below. The terminology, definitions, and applications of terms we use to describe our revenue may be different from those used by other companies and caution should be used when comparing these financial measures to those of other companies. We use the following terms to describe revenue:

•

Revenue - We present revenue net of sales returns and allowances

•

Products revenue – Revenue earned from the sales of software licenses, third party hardware and operating systems.

•

Support, maintenance and subscription services revenue – Revenue earned from the sale of proprietary and remarketed ongoing support, maintenance and subscription services.

•

Professional services revenue – Revenue earned from the delivery of implementation, integration and installation services for proprietary and remarketed products.

Results of Operations

First Fiscal Quarter 2021 Compared to First Fiscal Quarter 2020

Net Revenue and Operating Loss

The following table presents our consolidated revenue and operating results for the three months ended June 30, 2020 and 2019:

	Three months ended
	June 30,						Increase (decrease)
	2020			2019			$			%
Net revenue:
Products	$	5,239		$	10,869		$	(5,630	)		-51.8	%
Support, maintenance and subscription services		20,497			20,082			415			2.1
Professional services		4,071			7,438			(3,367	)		-45.3
Total net revenue		29,807			38,389			(8,582	)		-22.4
Cost of goods sold:
Products (inclusive of developed technology amortization)		3,015			8,623			(5,608	)		-65.0
Support, maintenance and subscription services		4,306			4,181			125			3.0
Professional services		3,936			5,571			(1,635	)		-29.3
Total cost of goods sold		11,257			18,375			(7,118	)		-38.7
Gross profit	$	18,550		$	20,014		$	(1,464	)		-7.3	%
Gross profit margin		62.2	%		52.1	%
Operating expenses:
Product development	$	8,266		$	10,064		$	(1,798	)		-17.9	%
Sales and marketing		2,601			4,498			(1,897	)		(42.2	)
General and administrative		5,719			5,874			(155	)		-2.6
Depreciation of fixed assets		723			213			510			239.4
Amortization of intangibles		461			678			(217	)		(32.0	)
Severance and other charges		1,203			231			972			420.8
Operating loss	$	(423	)	$	(1,544	)	$	1,121			(72.6	)%
Operating loss percentage		(1.4	)%		(4.0	)%

nm - not meaningful

Table of Contents

The following table presents the percentage relationship of our condensed consolidated statement of operations line items to our consolidated net revenues for the periods presented:

	Three months ended
	June 30,
	2020			2019
Net revenue:
Products		17.6	%		28.3	%
Support, maintenance and subscription services		68.8			52.3
Professional services		13.6			19.4
Total net revenue		100.0	%		100.0	%
Cost of goods sold:
Products		10.1	%		22.5	%
Support, maintenance and subscription services		14.4			10.9
Professional services		13.3			14.5
Total cost of goods sold		37.8	%		47.9	%
Gross profit		62.2	%		52.1	%
Operating expenses:
Product development		27.7	%		26.2	%
Sales and marketing		8.7			11.7
General and administrative		19.2			15.3
Depreciation of fixed assets		2.5			0.5
Amortization of intangibles		1.5			1.8
Severance and other charges		4.0			0.6
Operating loss		(1.4	)%		(4.0	)%

Net revenue. Total net revenue decreased $8.6 million, or 22.4%, during the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. Products revenue decreased $5.6 million, or 51.8%, due to lower sales combined with delayed deliveries resulting from customer restrictions including temporary site closures in response to the COVID-19 pandemic. Support, maintenance and subscription services revenue increased $0.4 million, or 2.1%, compared to the first quarter of fiscal 2020 driven by continued growth in subscription-based service revenue, which increased 8.6% during the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. The growth rate in our support, maintenance and subscription services is significantly lower than we have reported in recent quarters due to one-time COVID-19 related financial relief we provided to certain customers during the first quarter of fiscal 2021 to help them as they deal with temporary site closures during the period. Professional services revenue decreased $3.4 million, or 45.3%, due to lower sales combined with delayed installations and integration of our software solutions resulting from travel and customer restrictions including temporary site closures in response to the COVID-19 pandemic.

Gross profit and gross profit margin. Our total gross profit decreased $1.5 million, or 7.3%, for the first quarter of fiscal 2021 and total gross profit margin increased from 52.1% to 62.2%. Products gross profit was flat at $2.2 million for the three months ended June 30, 2021 and 2020, respectively. Products gross profit margin increased from 20.7% to 42.5% due to the absence of software development cost amortization during the first quarter of fiscal 2021 following the impairment of our rGuest suite of products during the fourth quarter of fiscal 2020 (see further discussion of the impairment in Note 4 to the condensed consolidated financial statements). Support, maintenance and subscription services gross profit increased $0.3 million and gross profit margin decreased 19 basis points to 79.0%. The margin decrease is the result of the COVID-19 related financial relief we provided to certain customers during the first fiscal quarter of fiscal 2021. Professional services gross profit decreased $1.7 million and gross profit margin decreased from 25.1% to 3.3% due to the drop in demand for professional services due to travel and customer restrictions including temporary site closures in response to the COVID-19 pandemic.

Operating expenses

Operating expenses, excluding legal settlements, severance and other charges, decreased $3.6 million, or 16.7%, during the first quarter of fiscal 2021 compared with the first quarter of fiscal 2020.

Product development. Product development decreased $1.8 million, or 17.9%, in the first quarter of fiscal 2021 due to employee furloughs and layoffs, temporary salary reductions, lower incentive pay and employee benefits, a temporary hiring freeze effectively eliminating recruiting fees, and significantly reduced travel and outside service expenses due to employees working from home.

Table of Contents

Sales and marketing. Sales and marketing decreased $1.9 million, or 42.2%, in the first quarter of fiscal 2021 compared with the first quarter of fiscal 2020 due to employee furloughs and layoffs, temporary salary reductions, lower incentive pay and employee benefits, significantly reduced travel and the absence of in-person trade shows and conference activity.

General and administrative. General and administrative decreased by $0.2 million, or 2.6%, in the first quarter of fiscal 2021 compared with the first quarter of fiscal 2020 due to employee furloughs and layoffs, temporary salary reductions, lower incentive pay and employee benefits offset by an increase in share-based compensation.

Severance and other charges. Severance, and other charges increased $1.0 million in the first quarter of fiscal 2021 due to severance charges resulting from layoffs.

Other (Income) Expenses

	Three months ended
	June 30,						(Unfavorable) favorable
(Dollars in thousands)	2020			2019			$			%
Other (income) expense:
Interest income	$	(21	)	$	(80	)	$	(59	)		(73.8	)%
Interest expense		1			1			0		nm
Other expense, net		106			85			(21	)	nm
Total other (income) expense, net	$	86		$	6		$	(80	)	nm

nm - not meaningful

Interest income. Interest income consists of interest earned on cash equivalents including short-term investments in certificates of deposit, commercial paper, treasury bills and money market funds.

Interest expense. Interest expense consists of costs associated with finance leases.

Other expense. Other expense consists mainly of the impact of foreign currency due to movement of European and Asian currencies against the US dollar.

Income Taxes

	Three months ended
	June 30,						(Unfavorable) favorable
(Dollars in thousands)	2020			2019			$		%
Income tax expense	$	8		$	25		$	17	nm
Effective tax rate		(1.6	)%		(1.6	)%

nm - not meaningful

For the three months ended June 30, 2020 and 2019, the effective tax rate was different than the statutory rate due primarily to the recognition of net operating losses as deferred tax assets, which were offset by increases in the valuation allowance, certain foreign and state tax effects, and other U.S. permanent book to tax differences.

Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next 12 months an immaterial reduction in unrecognized tax benefits may occur based on the outcome of tax examinations and as a result of the expiration of various statutes of limitations. We are consistently subject to tax audits; due to the nature of examinations in multiple jurisdictions, changes could occur in the amount of gross unrecognized tax benefits during the next 12 months which cannot be estimated at this time.

Liquidity and Capital Resources

Overview

Our operating cash requirements consist primarily of working capital needs, operating expenses, capital expenditures, payments on indebtedness outstanding, which primarily consists of lease obligations and preferred stock dividends.

Table of Contents

At June 30, 2020, 100% of our cash and cash equivalents, of which 96% were located in the United States, were deposited in bank accounts. We believe credit risk is limited with respect to our cash and cash equivalents balances.

The MAK Capital investment increased our cash balance by $34.1 million after closing costs of $0.9 million. As described above under Recent Developments and further in Note 11 to the condensed consolidated financial statements, the transaction resulted in the issuance of 1,735,457 preferred shares with an annual dividend rate of 5.25%.

Our liquidity could be negatively impacted by a decrease in demand for our products and services, including the impact of changes in customer buying behavior due to circumstances over which we have no control, including, but not limited to, the effects of the COVID-19 pandemic. If we require additional funding, for operating needs, a business acquisition or otherwise, we may need access to more capital, which could involve borrowings under a credit facility.

As of June 30, 2020, and March 31, 2019, our total debt was approximately $0.1 million, comprised of finance lease obligations in both periods.

We believe that cash flow from operating activities, cash on hand of $74.6 million as of June 30, 2020 and access to capital markets will provide adequate funds to meet our short- and long-term liquidity requirements.

Cash Flow

	Three Months Ended June 30,
(In thousands)	2020			2019
Net cash provided by (used in):
Operating activities	$	(4,929	)	$	(1,913	)
Investing activities		(245	)		(573	)
Financing activities		33,123			(1,028	)
Effect of exchange rate changes on cash		2			(24	)
Net increase (decrease) in cash and cash equivalents	$	27,951		$	(3,538	)

Cash flow used in operating activities. Cash flow used in operating activities was $4.9 million in the first three months of fiscal 2021. The use of cash was due primarily to the offset of $2.6 million in non-cash expense including depreciation, amortization, and share-based compensation, against our operating loss of $0.5 million and the decrease of $6.9 million in net operating assets and liabilities.

Cash flow used in investing activities. Consists primarily of property and equipment purchases.

Cash flow provided by financing activities. During the first three months of fiscal 2021, the $33.1 million provided by financing activities consisted primarily of $34.1 million in preferred stock issuance proceeds from the MAK Capital investment, net of issuance costs, offset by $0.9 million related to the repurchase of shares to satisfy employee tax withholding on share-based compensation. During the first three months of fiscal 2020, the $1.0 million used in financing activities was primarily related to the repurchase of shares to satisfy employee tax withholding on share-based compensation.

Contractual Obligations

As of June 30, 2020, there were no significant changes to our contractual obligations as presented in our Annual Report for the year ended March 31, 2020.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Critical Accounting Policies

A detailed description of our significant accounting policies is included in our Annual Report for the year ended March 31, 2020. Other than as described in Note 2 to the condensed consolidated financial statements, there have been no material changes in our significant accounting policies and estimates since March 31, 2020.

Table of Contents

Forward-Looking Information

This Quarterly Report and other publicly available documents, including the documents incorporated herein and therein by reference, contain, and our officers and representatives may from time to time make, "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. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. These statements are based on management’s current expectations, intentions, or beliefs and are subject to a number of factors, assumptions, and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impact the business include the risk factors set forth in Item 1A in Part II of this Quarterly Report and Item IA of our Annual Report for the fiscal year ended March 31, 2020. We undertake no obligation to update any such factor or to publicly announce the results of any revisions to any forward-looking statements contained herein whether as a result of new information, future events, or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk affecting us, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in our Annual Report for the fiscal year ended March 31, 2020. There have been no material changes in our market risk exposures since March 31, 2020.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision of and with the participation of our Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Corporate Controller and Treasurer, management evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report. Based on that evaluation, the CEO, CFO and Corporate Controller and Treasurer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, that occurred during the three months ended June 30, 2020, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Due to the COVID-19 pandemic, a significant number of our employees are now working from home. The design of our financial reporting processes, systems, and controls allows for remote execution with accessibility to secure data.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer, Chief Financial Officer and Corporate Controller and Treasurer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be achieved. Further, the design of a control system must reflect the impact of resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the possibility that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors. Additionally, controls can be circumvented by individual acts, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all possible future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Other than as described below, there have been no material changes in the risk factors included in our Annual Report for the fiscal year ended March 31, 2020 that may materially affect our business, results of operations, or financial condition.

The full extent to which the COVID-19 pandemic will adversely affect our business and results of operations cannot be predicted at this time. See Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview— Recent Developments” of this report for a more detailed discussion of the impact of COVID-19 on our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Table of Contents

Item 6. Exhibits




31.1			Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2			Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

31.3			Rule 13a-14(a)/15d-14(a) Certification of Corporate Controller and Treasurer.

32			Certification of Chief Executive Officer, Chief Financial Officer and Corporate Controller and Treasurer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

101.INS			Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH			Inline XBRL Taxonomy Extension Schema Document

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document

104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.

AGILYSYS, INC.




Date:	July 31, 2020	/s/ William David Wood III
		William David Wood III
		Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Officer)

agys-ex311_9.htm

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, Ramesh Srinivasan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Agilysys, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 31, 2020

By:	/s/ Ramesh Srinivasan
	Ramesh Srinivasan
	President and Chief Executive Officer
	(Principal Executive Officer)

agys-ex312_6.htm

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

I, William David Wood III, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Agilysys, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 31, 2020

By:	/s/ William David Wood III
	William David Wood III
	Chief Financial Officer
	(Principal Financial Officer)

agys-ex313_7.htm

Exhibit 31.3

CERTIFICATION OF THE CORPORATE CONTROLLER AND TREASURER

I, Chris J. Robertson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Agilysys, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 31, 2020

By:	/s/ Chris J. Robertson
	Chris J. Robertson
	Corporate Controller and Treasurer
	(Principal Accounting Officer)

agys-ex32_8.htm

Exhibit 32

CERTIFICATION

Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Ramesh Srinivasan, the Chief Executive Officer, William David Wood III, the Chief Financial Officer, and Chris J. Robertson, the Corporate Controller and Treasurer, of Agilysys, Inc. (the “Company”), hereby certify, that, to their knowledge:

1.	The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2020 (the “ Report ”) fully complies (1) with the requirements of Section 13(a) 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.

Date: July 31, 2020




By:	/s/ Ramesh Srinivasan
	Ramesh Srinivasan
	President and Chief Executive Officer
	(Principal Executive Officer)

	/s/ William David Wood III
	William David Wood III
	Chief Financial Officer
	(Principal Financial Officer)

	/s/ Chris J. Robertson
	Chris J. Robertson
	Corporate Controller and Treasurer
	(Principal Accounting Officer)

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Jun. 30, 2020	Jul. 28, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Registrant Name	AGILYSYS INC
Entity Central Index Key	0000078749
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		23,589,518
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Trading Symbol	AGYS
Title of 12(b) Security	Common Shares, without par value
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity File Number	0-5734
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-0907152
Entity Address, Address Line One	1000 Windward Concourse
Entity Address, Address Line Two	Suite 250
Entity Address, City or Town	Alpharetta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30005
City Area Code	770
Local Phone Number	810-7800

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020
Current assets:
Cash and cash equivalents	$ 74,604	$ 46,653
Accounts receivable, net of allowance for expected credit losses of $1,458 and for doubtful accounts of $1,634, respectively	30,494	35,869
Contract assets	2,677	2,125
Inventories	2,760	3,887
Prepaid expenses and other current assets	6,407	4,874
Total current assets	116,942	93,408
Property and equipment, net	11,113	12,230
Operating lease right-of-use assets	13,050	13,829
Goodwill	19,622	19,622
Intangible assets, net	8,400	8,400
Deferred income taxes, non-current	852	764
Other non-current assets	6,124	6,309
Total assets	176,103	154,562
Current liabilities:
Accounts payable	4,439	13,403
Contract liabilities	38,149	42,244
Accrued liabilities	8,801	9,033
Operating lease liabilities, current	4,641	4,719
Finance lease obligations, current	24	24
Total current liabilities	56,054	69,423
Deferred income taxes, non-current	884	880
Operating lease liabilities, non-current	9,810	10,617
Finance lease obligations, non-current	20	25
Other non-current liabilities	2,786	1,860
Commitments and contingencies (see Note 8)
Shareholders' equity:
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 31,606,831 shares issued; and 23,612,924 and 23,609,398 shares outstanding at June 30, 2020 and March 31, 2020, respectively	9,482	9,482
Treasury shares, 7,993,907 and 7,997,433 at June 30, 2020 and March 31, 2020, respectively	(2,399)	(2,401)
Capital in excess of stated value	6,760	5,491
Retained earnings	57,331	58,984
Accumulated other comprehensive income	176	201
Total shareholders' equity	71,350	71,757
Total liabilities and shareholders' equity	176,103	$ 154,562
Series A Convertible Preferred Stock [Member]
Liabilities Noncurrent:
Series A convertible preferred stock, no par value	$ 35,199

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020
Allowance for doubtful accounts receivable	$ 1,458	$ 1,634
Common stock, stated value	$ 0.30	$ 0.30
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	31,606,831	31,606,831
Common stock, shares outstanding	23,612,924	23,609,398
Treasury shares	7,993,907	7,997,433
Series A Convertible Preferred Stock [Member]
Preferred Stock, No Par Value

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Net revenue:
Total net revenue	$ 29,807	$ 38,389
Cost of goods sold:
Total cost of goods sold	11,257	18,375
Gross profit	$ 18,550	$ 20,014
Gross Profit Ratio	62.20%	52.10%
Operating expenses:
Product development	$ 8,266	$ 10,064
Sales and marketing	2,601	4,498
General and administrative	5,719	5,874
Depreciation of fixed assets	723	213
Amortization	461	678
Severance and other charges	1,203	231
Total operating expense	18,973	21,558
Operating loss	(423)	(1,544)
Other (income) expense:
Interest income	(21)	(80)
Interest expense	1	1
Other expense, net	106	85
Loss before taxes	(509)	(1,550)
Income tax expense	8	25
Net loss	(517)	(1,575)
Series A convertible preferred stock issuance costs	(937)
Series A convertible preferred stock dividends	(199)
Net loss available to common shareholders	$ (1,653)	$ (1,575)
Weighted average shares outstanding - basic and diluted	23,405	23,212
Net loss per share - basic and diluted:	$ (0.07)	$ (0.07)
Products
Net revenue:
Total net revenue	$ 5,239	$ 10,869
Cost of goods sold:
Total cost of goods sold	3,015	8,623
Support, maintenance and subscription services
Net revenue:
Total net revenue	20,497	20,082
Cost of goods sold:
Total cost of goods sold	4,306	4,181
Professional services
Net revenue:
Total net revenue	4,071	7,438
Cost of goods sold:
Total cost of goods sold	$ 3,936	$ 5,571

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent	$ (517)	$ (1,575)
Other comprehensive loss, net of tax:
Unrealized foreign currency translation adjustments	(25)	(95)
Total comprehensive loss	$ (542)	$ (1,670)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities
Net loss	$ (517)	$ (1,575)
Adjustments to reconcile loss from operations to net cash used in operating activities
Depreciation	723	213
Amortization of intangibles	461	678
Amortization of developed technology		3,175
Deferred income taxes	(84)	5
Share-based compensation	1,426	482
Changes in operating assets and liabilities	(6,938)	(4,891)
Net cash used in operating activities	(4,929)	(1,913)
Investing activities
Capital expenditures	(243)	(571)
Additional investments in corporate-owned life insurance policies	(2)	(2)
Net cash used in investing activities	(245)	(573)
Financing activities
Repurchase of common shares to satisfy employee tax withholding	(934)	(1,026)
Series A convertible preferred stock issuance proceeds, net of issuance costs	34,063
Principal payments under long-term obligations	(6)	(2)
Net cash provided by (used in) financing activities	33,123	(1,028)
Effect of exchange rate changes on cash	2	(24)
Net increase (decrease) in cash and cash equivalents	27,951	(3,538)
Cash and cash equivalents at beginning of period	46,653	40,771
Cash and cash equivalents at end of period	$ 74,604	$ 37,233

Condensed Consolidated Statements of Shareholders' Equity Statement - USD ($) shares in Thousands, $ in Thousands	Total	Common stock [Member]	Treasury stock [Member]	Capital in excess of stated value [Member]	Retained Earnings [Member]	Accumulated other comprehensive income (loss) [Member]
Beginning balance at Mar. 31, 2019	$ 100,622	$ 9,482	$ (2,433)	$ 781	$ 93,051	$ (259)
Beginning balance (in shares) at Mar. 31, 2019		31,607	(8,105)
Share-based compensation	1,067			1,067
Restricted shares issued, net			$ 51	(51)
Restricted shares issued, net (in shares)			168
Shares issued upon exercise of SSARs			$ 4	(4)
Shares issued upon exercise of SSARs (in shares)			14
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares	(96)		$ (1)	(95)
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares (in shares)			(4)
Net loss	(1,575)				(1,575)
Unrealized translation adjustments	(95)					(95)
Ending balance at Jun. 30, 2019	99,923	$ 9,482	$ (2,379)	1,698	91,476	(354)
Ending balance (in shares) at Jun. 30, 2019		31,607	(7,927)
Beginning balance at Mar. 31, 2020	71,757	$ 9,482	$ (2,401)	5,491	58,984	201
Beginning balance (in shares) at Mar. 31, 2020		31,607	(7,997)
Share-based compensation	1,426			1,426
Restricted shares issued, net			$ (4)	4
Restricted shares issued, net (in shares)			(14)
Shares issued upon exercise of SSARs			$ 8	(8)
Shares issued upon exercise of SSARs (in shares)			25
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares	(155)		$ (2)	(153)
Shares withheld for taxes upon exercise of stock options, SSARs or vesting of restricted shares (in shares)			(8)
Net loss	(517)				(517)
Series A convertible preferred stock issuance costs	(937)				(937)
Series A convertible preferred stock dividends	(199)				(199)
Unrealized translation adjustments	(25)					(25)
Ending balance at Jun. 30, 2020	$ 71,350	$ 9,482	$ (2,399)	$ 6,760	$ 57,331	$ 176
Ending balance (in shares) at Jun. 30, 2020		31,607	(7,994)

Nature of Operations and Financial Statement Presentation

3 Months Ended

Jun. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Nature of Operations and Financial Statement Presentation

1. Nature of Operations and Financial Statement Presentation

Nature of Operations

COVID-19 Pandemic

Basis of Presentation

Use of estimates

Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Adopted and Recently Issued Accounting Pronouncements

Revenue Recognition

3 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

3. Revenue Recognition

Typically, our customer contracts contain one or more of the following goods or services which constitute performance obligations.

Disaggregation of Revenue

Contract Balances

to accounts receivable from contract assets at the beginning of the period, $1.4 million and $2.0 million for the three months ended June 30, 2020 and 2019, respectively.

Assets Recognized from Costs to Obtain a Contract

Intangible Assets and Software Development Costs

3 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets and Software Development Costs

4. Intangible Assets and Software Development Costs

The following table summarizes our intangible assets and software development costs:

	June 30 and March 31, 2020
	Gross								Net
	carrying		Accumulated						carrying
(In thousands)	amount		amortization			Impairment			amount
Amortized intangible assets:
Customer relationships	$	10,775	$	(10,775	)	$	—		$	—
Non-competition agreements		2,700		(2,700	)		—			—
Developed technology		10,398		(10,398	)		—			—
Trade names		230		(230	)		—			—
Patented technology		80		(80	)		—			—
		24,183		(24,183	)		—			—
Trade names		8,400	N/A				—			8,400
Total intangible assets	$	32,583	$	(24,183	)	$	—		$	8,400

(In thousands)
Total software development costs	$	67,541	$	(45,535	)	$	(22,006	)	$	—

Additional Balance Sheet Information

3 Months Ended

Jun. 30, 2020

Balance Sheet Related Disclosures [Abstract]

Additional Balance Sheet Information

5. Additional Balance Sheet Information

Additional information related to the condensed consolidated balance sheets is as follows:

	June 30, 2020		March 31, 2020
Accrued liabilities:
Salaries, wages, and related benefits	$	6,811	$	6,945
Other taxes payable		1,512		1,649
Severance liabilities		103		32
Professional fees		104		50
Other		271		357
Total	$	8,801	$	9,033
Other non-current liabilities:
Uncertain tax positions	$	1,110	$	1,103
Asset retirement obligations		170		170
Employee benefit obligations		1,429		511
Other		77		76
Total	$	2,786	$	1,860

Supplemental Disclosures of Cash Flow Information

3 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosures of Cash Flow Information

6. Supplemental Disclosures of Cash Flow Information

Additional information related to the consolidated statements of cash flows is as follows:

	Three Months Ended June 30,
(In thousands)		2020		2019
Cash (receipts) for interest, net		(20	)	(79	)
Cash payments for income tax, net		134		73
Cash payments for operating leases		1,642		1,014
Cash payments for finance leases		8		8
Accrued capital expenditures		19		51

Income Taxes

3 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

The following table compares our income tax expense and effective tax rates for the three months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
(Dollars in thousands)	2020			2019
Income tax expense	$	8		$	25
Effective tax rate		(1.6	)%		(1.6	)%

Commitments and Contingencies

3 Months Ended

Jun. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Loss Per Share

3 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Loss Per Share

9. Loss per Share

The following data shows the amounts used in computing (loss) per share and the effect on earnings and the weighted average number of shares of dilutive potential common shares.

	Three Months Ended June 30,
(In thousands, except per share data)	2020			2019
Numerator:
Net loss	$	(517	)	$	(1,575	)
Series A convertible preferred stock issuance costs		(937	)		—
Series A convertible preferred stock dividends		(199	)		—
Net loss available to common shareholders	$	(1,653	)	$	(1,575	)

Denominator:
Weighted average shares outstanding - basic and diluted		23,405			23,212

Loss per share - basic and diluted:
Loss per share	$	(0.07	)	$	(0.07	)

Anti-dilutive stock options, SSARs, restricted shares, performance shares and preferred shares		3,560			1,273

Share-based Compensation

3 Months Ended

Jun. 30, 2020

Share Based Compensation [Abstract]

Share-based Compensation

10. Share-based Compensation

We may distribute authorized but unissued shares or treasury shares to satisfy share option and appreciation right exercises or restricted share and performance share awards.

The following table summarizes the share-based compensation expense for options, SSARs, restricted and performance awards included in the condensed consolidated statements of operations:


	Three Months Ended June 30,
(In thousands)	2020		2019
Product development	$	172	$	268
Sales and marketing		36		62
General and administrative		1,218		152
Total share-based compensation expense	$	1,426	$	482

Stock-Settled Appreciation Rights

The following table summarizes the activity during the three months ended June 30, 2020 for SSARs awarded under the 2011 and 2016 Plans:

	Number of Rights			Weighted-Average Exercise Price		Remaining Contractual Term		Aggregate Intrinsic Value
(In thousands, except share and per share data)				(per right)		(in years)
Outstanding at April 1, 2020		1,644,888		$	21.07
Exercised		(56,226	)		11.16
Forfeited		(11,276	)		18.71
Expired		(88	)		14.22
Outstanding at June 30, 2020		1,577,298		$	21.44		4.7	$	6,028
Exercisable at June 30, 2020		942,608		$	12.87		3.8	$	5,887
Vested and expected to vest at June 30, 2020		1,577,298		$	21.44		4.7	$	6,028

Restricted Shares

	Number of Shares			Weighted-Average Grant-Date Fair Value
(In thousands, except share and per share data)				(per share)
Outstanding at April 1, 2020		178,462		$	19.89
Forfeited		(13,995	)		18.84
Outstanding at June 30, 2020		164,467		$	19.98

Performance Shares

The following table summarizes the activity during the three months ended June 30, 2020 for the performance shares awarded under the 2016 Plan:

(In thousands, except share and per share data)	Number of Shares
Outstanding at April 1, 2020		30,120
Granted		—
Vested		—
Forfeited		—
Outstanding at June 30, 2020		30,120

Preferred Stock

3 Months Ended

Jun. 30, 2020

Equity [Abstract]

Preferred Stock

11. Preferred Stock

Series A Convertible Preferred Stock

Accounting Policy

Voting

Liquidation Preference

Redemption

Conversion

Dividends

Change in Control Events

Standstill Restrictions

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Adopted and Recently Issued Accounting Pronouncements

Intangible Assets and Software Development Costs (Tables)

3 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

The following table summarizes our intangible assets and software development costs:

	June 30 and March 31, 2020
	Gross								Net
	carrying		Accumulated						carrying
(In thousands)	amount		amortization			Impairment			amount
Amortized intangible assets:
Customer relationships	$	10,775	$	(10,775	)	$	—		$	—
Non-competition agreements		2,700		(2,700	)		—			—
Developed technology		10,398		(10,398	)		—			—
Trade names		230		(230	)		—			—
Patented technology		80		(80	)		—			—
		24,183		(24,183	)		—			—
Trade names		8,400	N/A				—			8,400
Total intangible assets	$	32,583	$	(24,183	)	$	—		$	8,400

(In thousands)
Total software development costs	$	67,541	$	(45,535	)	$	(22,006	)	$	—

Additional Balance Sheet Information (Tables)

3 Months Ended

Jun. 30, 2020

Balance Sheet Related Disclosures [Abstract]

Schedule of Additional information related to the Condensed Consolidated Balance Sheets

Additional information related to the condensed consolidated balance sheets is as follows:

	June 30, 2020		March 31, 2020
Accrued liabilities:
Salaries, wages, and related benefits	$	6,811	$	6,945
Other taxes payable		1,512		1,649
Severance liabilities		103		32
Professional fees		104		50
Other		271		357
Total	$	8,801	$	9,033
Other non-current liabilities:
Uncertain tax positions	$	1,110	$	1,103
Asset retirement obligations		170		170
Employee benefit obligations		1,429		511
Other		77		76
Total	$	2,786	$	1,860

Supplemental Disclosures of Cash Flow Information (Tables)

3 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Schedule of supplemental cash flow information

Additional information related to the consolidated statements of cash flows is as follows

	Three Months Ended June 30,
(In thousands)		2020		2019
Cash (receipts) for interest, net		(20	)	(79	)
Cash payments for income tax, net		134		73
Cash payments for operating leases		1,642		1,014
Cash payments for finance leases		8		8
Accrued capital expenditures		19		51

Income Taxes (Tables)

3 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Effective tax rates from continuing operations

The following table compares our income tax expense and effective tax rates for the three months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
(Dollars in thousands)	2020			2019
Income tax expense	$	8		$	25
Effective tax rate		(1.6	)%		(1.6	)%

Loss per Share (Tables)

3 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of amounts used in computing loss per share and the effect on earnings and the weighted average number of shares of dilutive potential common shares

The following data shows the amounts used in computing (loss) per share and the effect on earnings and the weighted average number of shares of dilutive potential common shares.

	Three Months Ended June 30,
(In thousands, except per share data)	2020			2019
Numerator:
Net loss	$	(517	)	$	(1,575	)
Series A convertible preferred stock issuance costs		(937	)		—
Series A convertible preferred stock dividends		(199	)		—
Net loss available to common shareholders	$	(1,653	)	$	(1,575	)

Denominator:
Weighted average shares outstanding - basic and diluted		23,405			23,212

Loss per share - basic and diluted:
Loss per share	$	(0.07	)	$	(0.07	)

Anti-dilutive stock options, SSARs, restricted shares, performance shares and preferred shares		3,560			1,273

Share-based Compensation (Tables)

3 Months Ended

Jun. 30, 2020

Share Based Compensation [Abstract]

Summary of share-based compensation expense for options

The following table summarizes the share-based compensation expense for options, SSARs, restricted and performance awards included in the condensed consolidated statements of operations:


	Three Months Ended June 30,
(In thousands)	2020		2019
Product development	$	172	$	268
Sales and marketing		36		62
General and administrative		1,218		152
Total share-based compensation expense	$	1,426	$	482

Activity related SSARs award

The following table summarizes the activity during the three months ended June 30, 2020 for SSARs awarded under the 2011 and 2016 Plans:

	Number of Rights			Weighted-Average Exercise Price		Remaining Contractual Term		Aggregate Intrinsic Value
(In thousands, except share and per share data)				(per right)		(in years)
Outstanding at April 1, 2020		1,644,888		$	21.07
Exercised		(56,226	)		11.16
Forfeited		(11,276	)		18.71
Expired		(88	)		14.22
Outstanding at June 30, 2020		1,577,298		$	21.44		4.7	$	6,028
Exercisable at June 30, 2020		942,608		$	12.87		3.8	$	5,887
Vested and expected to vest at June 30, 2020		1,577,298		$	21.44		4.7	$	6,028

The following table summarizes the activity during the three months ended June 30, 2020 for restricted shares awarded under the 2011 and 2016 Plans:

	Number of Shares			Weighted-Average Grant-Date Fair Value
(In thousands, except share and per share data)				(per share)
Outstanding at April 1, 2020		178,462		$	19.89
Forfeited		(13,995	)		18.84
Outstanding at June 30, 2020		164,467		$	19.98

Performance shares awarded

The following table summarizes the activity during the three months ended June 30, 2020 for the performance shares awarded under the 2016 Plan:

(In thousands, except share and per share data)	Number of Shares
Outstanding at April 1, 2020		30,120
Granted		—
Vested		—
Forfeited		—
Outstanding at June 30, 2020		30,120

Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Total net revenue	$ 29,807	$ 38,389
Revenue recognized	17,500	15,600
Transfers to accounts receivable	1,400	2,000
Capitalized contract cost, net	3,200	3,300
Capitalized Contract Cost, Amortization	400	300
Sales Commissions and Fees	600	1,000
Products
Disaggregation of Revenue [Line Items]
Total net revenue	5,239	10,869
Support, Maintenance, Subscription Services, And Professional Services [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	$ 24,600	$ 27,500

Intangible Assets and Software Development Costs - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020
Schedule Of Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross carrying amount, excluding accumulated impairment	$ 0	$ 0
Accumulated amortization, excluding accumulated impairment	0	0
Accumulated impairment	0	0
Net carrying amount, excluding accumulated impairment	0	0
Gross carrying amount	24,183	24,183
Accumulated amortization	(24,183)	(24,183)
Impairment	0	0
Net carrying amount	0	0
Total intangible assets, gross carrying amount	32,583	32,583
Total intangible assets, accumulated amortization	(24,183)	(24,183)
Total intangible assets, impairment	0	0
Intangible assets, net	8,400	8,400
Finite lived software development costs gross	67,541	67,541
Finite lived software development costs accumulated amortization	(45,535)	(45,535)
Finite lived software development costs accumulated impairment	(22,006)	(22,006)
Finite lived software development costs net	0	0
Trade Names
Schedule Of Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross carrying amount, excluding accumulated impairment	230	230
Accumulated amortization, excluding accumulated impairment	(230)	(230)
Accumulated impairment	0	0
Net carrying amount, excluding accumulated impairment	0	0
Gross carrying amount, excluding accumulated impairment	8,400	8,400
Accumulated amortization, excluding accumulated impairment	0	0
Accumulated impairment excluding goodwill	0	0
Carrying amount, excluding accumulated impairment	8,400	8,400
Customer Relationships
Schedule Of Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross carrying amount, excluding accumulated impairment	10,775	10,775
Accumulated amortization, excluding accumulated impairment	(10,775)	(10,775)
Accumulated impairment	0	0
Net carrying amount, excluding accumulated impairment	0	0
Noncompete Agreements
Schedule Of Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross carrying amount, excluding accumulated impairment	2,700	2,700
Accumulated amortization, excluding accumulated impairment	(2,700)	(2,700)
Accumulated impairment	0	0
Net carrying amount, excluding accumulated impairment	0	0
Developed Technology Rights
Schedule Of Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross carrying amount, excluding accumulated impairment	10,398	10,398
Accumulated amortization, excluding accumulated impairment	(10,398)	(10,398)
Accumulated impairment	0	0
Net carrying amount, excluding accumulated impairment	0	0
Patented Technology
Schedule Of Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross carrying amount, excluding accumulated impairment	80	80
Accumulated amortization, excluding accumulated impairment	(80)	(80)
Accumulated impairment	0	0
Net carrying amount, excluding accumulated impairment	$ 0	$ 0

Intangible Assets and Software Development Costs (Details Textual) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2019	Mar. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Non-cash impairment charge		$ 22,000
Amortization of developed technology	$ 3,175

Additional Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020
Accrued liabilities:
Salaries, wages, and related benefits	$ 6,811	$ 6,945
Other taxes payable	1,512	1,649
Severance liabilities	103	32
Professional fees	104	50
Other	271	357
Total	8,801	9,033
Other non-current liabilities:
Uncertain tax positions	1,110	1,103
Asset retirement obligations	170	170
Employee benefit obligations	1,429	511
Other	77	76
Total	$ 2,786	$ 1,860

Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Supplemental Cash Flow Elements [Abstract]
Cash (receipts) for interest, net	$ (20)	$ (79)
Cash payments for income tax, net	134	73
Cash payments for operating leases	1,642	1,014
Cash payments for finance leases	8	8
Accrued capital expenditures	$ 19	$ 51

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Income tax expense	$ 8	$ 25
Effective tax rate	(1.60%)	(1.60%)

Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Numerator:
Net loss	$ (517)	$ (1,575)
Series A convertible preferred stock issuance costs	(937)
Series A convertible preferred stock dividends	(199)
Net loss available to common shareholders	$ (1,653)	$ (1,575)
Denominator:
Weighted average shares outstanding - basic and diluted	23,405	23,212
Loss per share - basic and diluted:
Loss per share	$ (0.07)	$ (0.07)
Earnings Per Share, Diluted [Abstract]
Anti-dilutive stock options, SSARs, restricted shares, performance shares and preferred shares	3,560	1,273

Loss per Share (Details Textual) - shares	3 Months Ended
Loss per Share (Details Textual) - shares	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Incremental common shares attributable to restricted shares (in shares)	194,587	445,829

Share-based Compensation (Details Textual) - USD ($) $ in Millions		3 Months Ended	12 Months Ended
	Jul. 16, 2020	Jun. 30, 2020	Mar. 31, 2020
Restricted Stock [Member]
Stock Based Compensation (Textual) [Abstract]
Weighted-average vesting period		1 year 8 months 12 days
Unrecognized stock based compensation expense related to non-vested restricted stock		$ 1.6
Number of outstanding shares		164,467	178,462
Number of shares, forfeited		13,995
Stock Settled Stock Appreciation Rights (SSARS) [Member]
Stock Based Compensation (Textual) [Abstract]
Numer of shares issued			125,000
Stock Settled Stock Appreciation Rights (SSARS) [Member]
Stock Based Compensation (Textual) [Abstract]
Unrecognized stock based compensation expense related to non-vested SSARs		$ 4.3
Weighted-average vesting period		2 years 1 month 6 days
Performance Shares [Member]
Stock Based Compensation (Textual) [Abstract]
Number of outstanding shares		30,120	30,120
Performance Shares [Member] \| Subsequent Event [Member]
Stock Based Compensation (Textual) [Abstract]
Number of shares, granted	6,714
Number of outstanding shares	30,120
Number of shares, forfeited	23,406
Aggregate intrinsic value	$ 0.1
Two Thousand and Sixteen Stock Incentive Plan [Member]
Stock Based Compensation (Textual) [Abstract]
Shares authorized under 2016 Stock incentive plan		2,000,000.0
Two Thousand and Sixteen Stock Incentive Plan [Member] \| Restricted Stock [Member]
Stock Based Compensation (Textual) [Abstract]
Shares available for grant		1,250,000
2011 Stock Incentive Plan [Member]
Stock Based Compensation (Textual) [Abstract]
Shares available for grant		957,575

Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
Share-based Compensation (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Jun. 30, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Payment Arrangement, Noncash Expense	$ 1,426	$ 482
Product development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Summary of share-based compensation expense for options	172	268
Selling and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Summary of share-based compensation expense for options	36	62
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Summary of share-based compensation expense for options	$ 1,218	$ 152

Share-based Compensation (Details 2) - Stock Settled Stock Appreciation Rights (SSARS) [Member] $ / shares in Units, $ in Thousands	3 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Rights Outstanding at Beginning of Period \| shares	1,644,888
Number of Rights Exercised \| shares	(56,226)
Number of Rights, Forfeited \| shares	(11,276)
Number of Rights Expired \| shares	(88)
Number of Rights Outstanding at End of Period \| shares	1,577,298
Number of Rights Exercisable at End of Period \| shares	942,608
Number of Rights Vested and expected to vest at June 30, 2020 \| shares	1,577,298
Weighted Average Exercise Price Outstanding at Beginning of Period \| $ / shares	$ 21.07
Weighted Average Exercise Price, Exercised \| $ / shares	11.16
Weighted Average Exercise Price, Forfeited \| $ / shares	18.71
Weighted Average Exercise Price, Expired \| $ / shares	14.22
Weighted Average Exercise Price Outstanding at End of Period \| $ / shares	21.44
Weighted Average Exercise Price, Exercisable at End of Period \| $ / shares	12.87
Weighted Average Exercise Price, Exercisable at End of Period \| $ / shares	$ 21.44
Remaining Contractual Term Outstanding at End of Period	4 years 8 months 12 days
Remaining Contractual Term Exercisable at End of Period	3 years 10 months 24 days
Share Based Compensation Arrangement By Share Based Payment Award Vested And Expected To Vest Outstanding Remaining Contractual Term	4 years 8 months 12 days
Aggregate Intrinsic Value Outstanding at End of Period \| $	$ 6,028
Aggregate Intrinsic Value Exercisable at End of Period \| $	5,887
Aggregate Intrinsic Value Exercisable at End of Period, Vested and expacted \| $	$ 6,028

Share-based Compensation (Details 3)	3 Months Ended
Share-based Compensation (Details 3)	Jun. 30, 2020 $ / shares shares
Restricted Stock [Member]
Activity Related to Restricted Shares Awarded by the Company
Number of Shares Outstanding at Beginning of Period	178,462
Forfeited, Number of Shares	(13,995)
Number of Shares Outstanding at End of Period	164,467
Weighted Average Grant-Date Fair Value, Outstanding at Beginning of Period \| $ / shares	$ 19.89
Forfeited, Weighted Average Grant-Date Fair Value \| $ / shares	18.84
Weighted Average Grant-Date Fair Value, Outstanding at End of Period \| $ / shares	$ 19.98
Performance Shares [Member]
Activity Related to Restricted Shares Awarded by the Company
Number of Shares Outstanding at Beginning of Period	30,120
Number of Shares Outstanding at End of Period	30,120

Preferred Stock - (Details Textual) $ / shares in Units, $ in Millions		3 Months Ended
	May 22, 2020 USD ($) shares	Jun. 30, 2020 Day $ / shares
Class Of Stock [Line Items]
Trading days \| Day		20
Consecutive trading days \| Day		30
Minimum percentage of common stock price to conversion price		150.00%
Debt Instrument, Convertible, Earliest Date		Nov. 22, 2023
Preferred stock, dividend percentage		5.25%
Dividends declaration and payment terms		The Holders are entitled to dividends on the Liquidation Preference at the rate of 5.25% per annum, payable semi-annually either (i) 50% in cash and 50% in kind as an increase in the then-current Liquidation Preference or (ii) 100% in cash, at the option of the Company.
Change of Control Event Description		Upon certain change of control events involving the Company, the Company has the right, and each Holder has the right, in each case, at the initiating party’s election, to require the Company to repurchase all or a portion of its then-outstanding shares of Convertible Preferred Stock for cash consideration equal to (i) 150% of the then-current Liquidation Preference for a change of control occurring prior to the third anniversary of the date the Convertible Preferred Stock is initially issued, (ii) 125% of the then-current Liquidation Preference for a change of control occurring on or following the third anniversary and prior to the fifth anniversary of the date the Convertible Preferred Stock is initially issued and (iii) 100% of the then-current Liquidation Preference for a change of control occurring on or following the fifth anniversary of the date the Convertible Preferred Stock is initially issued
Preferred stock convertible percentage of outstanding common stock		10.00%
Percentage of owning in excess of outstanding share of common stock		25.00%
Common stock [Member]
Class Of Stock [Line Items]
Price per share \| $ / shares		$ 20.1676
Convertible Preferred Stock [Member]
Class Of Stock [Line Items]
Voting right description		The Holders will be entitled to one vote for each share of Convertible Preferred Stock upon all matters presented to the common shareholders of the Company
MAK Capital One, LLC [Member] \| Convertible Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock issued \| shares	1,735,457
Preferred stock issued, value \| $	$ 35.0
Payments of stock issuance costs \| $	$ 0.9