Good morning, ladies and gentlemen, welcome to the Agilysys Fiscal 2015 Fourth Quarter and Full-Year Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded. Some statements made on today’s call will be predictive and are intended to be made as forward-looking within the Safe Harbor protection of the Private Securities Litigation Reform Act of 1995. Although the Company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause results to differ materially. Important factors that could cause actual results to differ materially from these in the forward-looking statements are set forth in the Company’s report on Form 10-K and 10-Q and the news releases filed with the Securities and Exchange Commission. I’d now like to turn the call over to you Mr. Jim Dennedy, President and CEO. Please go ahead sir. Thank you, Candice, and good morning everyone. We appreciate you joining us on the call today to review our fiscal 2015 fourth quarter and full-year results. Joining me today is our Chief Financial Officer, Janine Seebeck. Before we get started, just a quick reminder that on the call today we’ll be discussing some non-GAAP metrics, primarily adjusted operating income from continuing operations, adjusted income from continuing operations, and adjusted EBITDA which eliminates the effect of restructuring and other items that are either non-cash or non-recurring. Reconciliations to GAAP metrics are provided in the financial section of the press release issued earlier today. I'll start with a brief overview of our financial results. Total net revenue for the fourth quarter was $28.7 million compared with total net revenue of 27.8 million in the comparable…

Thanks Jim, and good morning everyone. Our fourth quarter fiscal 2015 revenue was $28.7 million, a 3% increase compared to a total net revenue of $27.8 million in the comparable prior year period. Full year revenue increased $2.2 million or 2% to a $103.5 million compared with fiscal 2014. Top line results reflect the impact of the various organizational changes implemented throughout the year, but negatively impacted our near-term product sales revenue related to on-premise sales. In spite of the near-term impact of our strategy to focus on selling new logo and subscription based revenue, we are confident that this strategic change is beneficial to our long-term growth objectives and it better positions us to accelerate the growth around our higher margin recurring revenue business. As Jim highlighted, it is important to note the encouraging trends in our recurring revenues which are comprised of support, maintenance and subscription services. Our effort to focus on the high margin business led to quarterly record revenues of $14.5 million or 51% of our total net revenue for the fourth quarter. For the year recurring revenues increased 5% to $56 million or 54% of total net revenue. A vital part of recurring revenue are SaaS based revenues, which increased 8% on a quarterly basis and a 11% on a year-over-year basis. Moving down the income statement, overall gross margin fell to 51% for the fourth quarter of fiscal 2015 compared to 60% in the prior year period. On a full year basis, gross margins decreased to 58% compared to 63% in fiscal 2014. The gross margin decline for the fiscal 2015 fourth quarter was due to the impact of certain lower margin hardware sales as well as increased labor costs associated with a large customer commitment. Gross margin for the full year was also…

Thank you. [Operator Instructions] Our first question comes from Stan Berenshteyn of Sidoti and Company. Your line is now open.

Good morning. Thanks for taking my questions.

Good morning Stan.

Janine, can you please repeat, you said that for 2016 year end, how much did you project the cash balance to be?

Approximately $50 million.

Okay, and when can we expect the professional services margins to kind of return back to historic levels, will it be a gradual thing, will it be sudden next year?

So, we think that the impact that we saw in '15 should have basically be done at the end of '15, I expect we'll have slightly lower margins in the first quarters, but we expect will be by second, third quarter kind of back at that high 20s or 30 range.

Okay, and was there anything in particular that contributed to the strong product sales that we saw in the quarter end?

So, consistent with prior years we have seen we did have one large hardware deal that did impact the results. Obviously that had an impact on margin as well, but nothing else that would have been material.

So it wasn’t really a seasonal thing, it was just also a one-off just happened to the thing factored in?

That's factored in.

Okay. Can you also Jim, can you give us an idea of the typical length of an upgrade cycle for your clients?

In terms of the sales cycle or in terms of the new the new subscription engagement that they would sign?

New subscription engagements?

So, the new subscription engagements generally range from a three to a five-year contract with most contracts going out with a five-year request and most of our contracts are signed up for a five-year subscription services arrangement.

Okay and how much of anticipated sales growth from rGuest do you expect to come from existing clients versus new logos?

From existing clients we expect they will adopt the rGuest Pay Analyze, Seat products. Many will also select the rGuest Buy product. So rGuest Buy is starting out sort of a kiosk based re-envisioning of a terminal. Customers who adopt rGuest Buy do not need to change their backend InfoGenesis engine. It will still work with their backend InfoGenesis engine. We see many of our customers in our installed base adopting those components of the new rGuest platform. Most of the new logo business will come from adoption of the rGuest Stay product. The customers who are on let's say Visual One or Lodging Management System we still have some development work to complete yet this year on the rGuest Stay product before it reaches future scale parity with the LMS and Visual One application.

Okay. Can you may be give us some color in terms of a dollar amount, how much of the incremental dollar gains that we see on the subscription service is coming from new logos versus existing clients just upgrading to the rGuest platform?

Sure and looking at year-over-year results '14 to '15 the total number of new logos has more than doubled year-over-year. In terms of how that breaks down between subscription and traditional, the traditional new logo business has been relatively constant year-over-year. Our new logo subscription business has increased by more than five-fold year-over-year. So the majority of the new logo business we're seeing are our subscribers as opposed to traditional maintenance [indiscernible].

Okay. Right, all right thank you.

Yes sir.

Thank you. [Operator Instructions] Our next question comes from Phil Bernard of Eilers Research. Your line is now open.

How are you doing guys? One quick question. With the completion of the rGuest platform how do you guys see CapEx going forward in 2016?

Sir as we indicated in Stan's question we have continued development work around rGuest Stay to reach feature and scale parity with our TMS product, LMS and Visual One. We also see some continued investment around the rGuest Pay product, customers really value what we've offered in the rGuest Pay product and they are asking for it to do more in terms of deeper integration with their transactional systems. The rGuest Buy product the next-gen point-of-sale was re-envisioned that terminal, its initial concept was to be guests facing, guest self ordering with kiosk and mobile apps. The intuity [ph] design customers are asking for increased investment to see a guest service associates UI improvements of their employees with the better UI experience that's similar to that which we are providing on a kiosk there or mobile self ordering. Finally, we see continued requests for deeper investment in the rGuest Seat product. What competitors offer on table management or online table reservation products is a stop at some point of the sharing of that data on the reservations side with the property and its integration to the point-of-sale or transactional systems. And what our customers are asking for and what they wanted a long time for the markets is deeper integration with their transactional systems so they can align guest spend and with exactly who the guest is and right now that information is a little bit blocked by current competitors in the market. So that request for additional insight in the guest buying behavior and guest paying behavior is driving an increased CapEx spend in this year as we continue to evolve those products. Year-over-year it is definitely comparable but slightly less and fiscal '16 it was fiscal '15 levels.

Great, thank you guys.

Thank you. [Operator Instructions] And our next question comes from Stan Berenshteyn of Sidoti & Company. Your line is now open.

I just had a quick follow up. One on client upgrades to the new rGuest platform, what kind of incremental revenue gains do you expect to see on a percentage basis, so for every one dollar that they spend historically after they upgrade what kind of incremental revenue gain can we expect?

Stan that's a great question, and the example we provide with this University example. They went from InfoGenesis [indiscernible] to InfoGenesis hosted or subscription. The lift on just the point-of-sale services was in the 45% to 50% range. The opportunity is as they move to that subscription services and to the broader platform, the additional layered revenue services we can provide in particularly this customer selecting the payment product as well as the analytics product to apply top of their point-of-sale services helped us almost double the recurring revenue contribution from this particular customer. Important to note is that while they went from a license and maintenance paying relationship to a subscription. When they moved to that subscription, they also signed up for five-year deal for all three components.

I see, and now just final question, when you have new logo wins what kind of typical package of rGuest options do they tend to buy as a norm, rGuest Seat, rGuest Pay, or rGuest Stay, what's the combinations?

It's kind of varied by sector. So, as we indicated in the hotel, resort, and cruise, those customers who adopted the rGuest Stay product your North Hill [ph] property, they and others they selected both the rGuest Stay as well as the payment product. In the restaurant or in the F&B environment food and beverage environments you'll see a combination of the point-of-sale services along with typically payment and the table management product Seat as well as the Analyze. So there is a combination of products that are targeted for each sector and we have, let's say a power package offering where it’s a value proposition sector depending on what they are likely buying preferences, food and beverage versus hotel operations.

Can you maybe give an average of how many rGuest solutions per client are sold on average?

Stan it's Janine. I think it's a little bit too early for us to average what we obviously trying to sell between more than three I think as we're early in this stage it is too early to assess how that will fall in average that with regards to the different sectors having different needs.

Okay, great, thank you.

Thank you, and I'm showing no further questions at this time. I'd like to turn the conference back to Mr. Dennedy for closing remarks.

Thank you, Candice. As always, thank you for your interest and for your investment in our Company. We believe Agilysys continues to make progress as we focus our resources on the highest value opportunities and our chosen end markets and manage the business for the longer term to deliver sustainable value to our shareholders and our customers. In closing, I want to take this opportunity to thank the very talented and dedicated team at Agilysys. Their work drives our success. I also want to thank our many customers and partners who entrust us with their business. I look forward to updating you on our progress on our fiscal 2016 first quarter call. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may now disconnect. Have a great day everyone.