Good afternoon ladies and gentlemen, welcome to the Agilysys Fiscal 2017 Second Quarter Conference Call. 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 protections of the Private Securities Litigation Reform Act of 1995. Also the Company believes that its forward-looking statements are based on reasonable assumptions. Such statements are subject to risks and uncertainties that would cause results to differ materially. Important factors that could cause actual results to differ materially from these forward-looking statements are set forth in the Company's report on Form 10-K and 10-Q and news releases filed with the Securities and Exchange Commission. In addition, management will be discussing some non-GAAP metrics on the call today. Primarily adjusted cash from 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'd now like to turn the call over to Mr. Michael Kaufman, Chairman of the Board of the Agilysys.

Thank you, operator. Good afternoon and thank you to everyone for joining us to review our fiscal 2017 second quarter results. Joining me on the call today are Jim Dennedy; Janine Seebeck; and Larry Steinberg our Chief Technology Officer. Before I turn the call over to Jim, Larry and Janine for the commentary I want to spend few minutes reviewing some of the Board's thoughts. Revenues we issued two weeks ago. As we noted, the Board has commenced a search for a new CEO and is confident they will be able to do so in a reasonable amount of time. Until the successor is named, Jim Dennedy will continue to serve a CEO. The Board is conducting a thorough search casting a broad net to recruit executive leaders of high growth, top performing companies you would all recognize. We have received tremendous interest from highly talented executives who are keenly aware and excited by the opportunity at Agilysys. Our products and vision that we've developed are respected and admired by people outside and across the industry. As a result, we are in an excellent position to recruit a world-class executive to bring our vision to fruition. In the meantime, we continue to move forward aggressively executing on our strategy. While we are still working through some of the fine details with management, the Board is committed to accelerating planned future investments in our products, sales and marketing efforts; and our overall infrastructure into the current fiscal year to bring our capabilities in line with the opportunities we have to aggressively expand our business with large-scale hotel operators and in international markets. We want the products finish today, we want to win these major new customers today, and we want to be the fastest growing company in hospitality today. We also…

Thank you, Michael, and good afternoon everyone. While Larry will review the status of our product initiatives and Janine will provide a detail review of the second fiscal quarter of 2017, I’ll provide important business highlights and an overview of our go-to-market strategy. One of our most initiatives is to drive success and winning a new opportunities and increasing our rate of competitive takeout. No matter the competitor Agilysys has deep solutions knowhow and overall capabilities to compete and win. Evidence of our success is our consistent level of competitive takeout. We have seven this quarter and expect the trend of four to six competitive takeouts per quarter that we have experienced for the past six quarters to continue for the balance of fiscal 2017. Going forward, this is an area that I am confident will continue to be a key growth opportunity for Agilysys. We also continue to make headwind with new customer wins. In the second quarter, we secured 32 contracts with new customers compared to 30 new consumer wins in the prior year period. The total contract value for subscription-based booking for these new customers increased 25% compared to the new deals in the second quarter of last year and represented over 50% of new customers for the quarter. And on a six months basis, the total contract value for subscription-based bookings for both the new rGuest platform and our iconic solution increased by 135%, compared to the first six months of fiscal 2016. Subscription revenue in the fiscal 2017 second quarter comprised 12% of total revenue, which is the highest percentage on a quarterly basis we have ever achieved and compares favorably to the 9% of subscription revenue and the overall revenue mix in last year second quarter. This ongoing increase in the percentage of subscription…

Thank you, Jim. We thought it would be helpful this afternoon to provide an overview on where we stand with our technology solution as it pertains to the market opportunities we're addressing now or seeking to address going forward. A little earlier, Michael Kaufman noted that the Board is solidly behind the vision to execute on the opportunities we have today that can help to double our business and that to achieve the goal, we’re going to accelerate near-term spend and product development infrastructure. I’ll provide some perspectives on what that means in terms of the key product development initiatives, we’re focused on. Let me start with a look at value proposition, our hospitality software platform provides to current and potential customers. What Agilysys has developed is a hospitality software program that is very unique in the industry. We’re enabling our customers the centralized guest information across multiple application, which provides them with the better real-time understanding of their guest needs and the opportunity to have to service them, and ultimately create added opportunities for revenue increased level of customer satisfaction. Our platform provides the opportunity for operators to service their guest better in the more ways than never before. It also provides us with the ability to deliver new applications to better address the dynamic nature of the guest experience. In addition, the platform provides a reach and seamless integration between our iconic solutions and rGuest applications as well as between our partners and our customers' application. By offering this type of open platform, we’re making more data available on hospitality guest to our customers, our partners and to ourselves than ever before and this has a tremendous amount of value in the marketplace. Looking at some specific products now, we continue to see consistent success for the rGuest…

Thank you, Larry, and good afternoon everyone. Our second quarter fiscal 2017 total revenue was $32.7 million, representing a 10% increase from total net revenues of $29.6 million in the comparable prior year period. Product net revenues which is comprised of remarketed product including hardware and software, and on-premise proprietary software license sales increased 8% to $10 million, and represents 33% of total revenue during the quarter compared to $9.9 million and 34% of total revenue during the prior year period. The increase reflects at every marketed product sales for iconic products as well as increased new customer hardware sales associated with our proprietary software sold as a service. Remarketed product revenue growth was partially offset by a decline in proprietary software license revenue in line with the strategic shift in mix to subscription-based services revenue. As we have highlighted before, it is important to note that while subscription-based license sales initially carry a lower margin remarketed product revenue component, they will drive the growth in higher margin subscription revenues in future periods. Importantly, approximately 23% of product revenues in the second quarter fiscal 2017 was related to subscription agreement, compare to approximately 13% in the prior year quarter. Support maintenance and subscription revenue or recurring revenues also grew by 8% to $15.9 million compare to the second quarter of fiscal 2016, driven by a 46% increase in our subscription-based revenue, which accounted for 24% of support maintenance and subscription revenue, compare to 18% in the fiscal 2016 second quarter. Going forward, we expect support maintenance and subscription revenue for the second half of the year will show similar growth trends to Q2 and that we will end the year in a 4% to 6% year-over-year growth rate. Professional services revenue grew 21% to $6 million compared to $5 million…

[Operator Instructions] And we have a question from the line of Phil Bernard with Eilers Krejcik Gaming. Your line is now open.

Just a couple quick questions, I was wondering, if you could provide a little more detail on the mixed stream license and subscription terminals or mix between those two respective your POS terminals and your PMS terms managed?

So, I'll take that question. So, I think we're still looking pretty consistent to what we disclosed before. I think we are still looking pretty heavily with the on-premise being the larger piece of those. We've talked about a little bit, but you know we're starting to see the new logos coming in and they're greater than 50%. But obviously as you know we are looking at 90 percent-ish that are kind of on-premise today's, it's going to take while for that to catch up and mix. So it's kind of pretty heavily weighted on premise to that while we're obviously continuing to see those subscripting bookings increased in the new logo, which is very positive.

Okay, great. And then last one, you've guided for margin in a low 50% range. Obviously the current quarter was little below that, primarily due to I am assuming the modernization of developed technology coming through product sales. Do you anticipate that to rebound with a lot of that amortize within the quarter? Was there large a one-time amortization charge in the quarter? Or do you anticipate product sales margin to remain a little more subdued as it was in this quarter?

So, I think it will be right around that 50% in that range. The [debt track] is coming in. We say there is about 1.9 incremental that’s kind of going to continue from a run rate perspective slightly higher than that, but they were a couple of other items impacting in the quarter. We had an additional investment from a professional services staff perspective as we’re ramping up as there is little bit more overhead costs there. And then there was obviously additionally a little bit more heavy weight towards the hardware and low margin hardware upfront as opposed to the on-premise license right with that, just to that we saw a little bit more of that in the quarter. I think that while we came in at that kind of 48.6, I think for the year we’re right about 50.4%. And so, I think we’re going to come back and it will probably be right in that range just because it normalized for the subscription group, as well as for the professional services teams being ramped up and utilized.

Okay, great. And then lastly, I know early in the call Larry mentioned an increased focused on -- I’m trying to update and maybe make some changes, you need to some of your customers on the property management side. How do you anticipate R&D for the remainder of the year and current levels of the first half or accelerate even further?

Yes. So, I think the reason that we are not giving adjusted EBITDA guidance as we’re obviously going through in assessing what is required to meet the market needs of certain things that are going on. And so, I think while I can't give you exact guidance, I definitely believe the cost from a product perspective both OpEx and CapEx from a sales and marketing perspective, and the way that Jim talk about the sales force investments. And from the overall infrastructure with some of the large deals we’re working on, I think it will have an impact on all product lines. I just can’t quantify based upon the timing, how much that would be. We just know that as a business, we see the opportunity the business wants to get the business and grow the top line revenue and so there will be some flux in that.

Okay, great. And is that happening as a result of conversations with these potential clients that they're staying, you guys are great, the service is great, but we’re missing these needs or you trying to anticipate future needs in the market?

So, I'd just tell you that a lot of it is conversation, we talk about at the Analyst Day that we’ve got those 10 to 12 large change that we’re talking with. I think as we've talked to move kind of into that phase in the market and something that we haven’t really been before, there is just general needs in that market that we may not have in product today. And so with herein consistency to help us expand, as Larry just talking about to be able to capitalize in those markets, and so it’s not customization on a per customer base, it is just more market driven to be able to go after those types of markets in the large chain base.

Thank you. And I’m not showing any further questions at this time. I would now like to hand the call back to Ms. Janine Seebeck for any closing remarks.

Thanks Kelcie [ph]. That concludes this afternoon’s conference call. Thank you again to everyone for joining us this afternoon.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a great day.