- Previously announced reduction of corporate overhead brings total annual cost savings to approximately $25 million
- Continues actions focused on maximizing shareholder value
CLEVELAND, Ohio – November 3, 2008 – Agilysys, Inc. (Nasdaq: AGYS) announced today that actions taken during the past two weeks to realign its overhead infrastructure have led to an additional $8 million in annualized cost savings. These savings are over and above the $17 million of cost reductions previously announced in June 2008. The $8 million in savings includes the elimination of corporate-level executive positions, consolidation of headquarters and the initial phase of realigning a number of former corporate SG&A functions into the company’s three business units. The company will continue to evaluate and act upon additional cost-saving opportunities and operational efficiencies.
As announced on October 22, 2008, the Board concluded that the best course of action to maximize shareholder value is to remain as an independent company, realign its cost and overhead structure, and drive shareholder value creation. At the same time, the Board appointed Keith M. Kolerus, a 40-year veteran of the IT industry and director of Agilysys for 10 years, as non-executive chairman, and Martin F. Ellis, former executive vice president and chief financial officer, as president and chief executive officer of the company. Former chairman, president and chief executive officer Arthur Rhein has retired from the company and stepped down as chairman and as a company director. Ellis also was elected to the Board to replace Rhein.
“Our management team, Board, special committee of five independent directors – including a representative of MAK Capital, our largest shareholder – and JPMorgan, our financial advisors, conducted a comprehensive review of all strategic alternatives, including, but not limited to, the sale of all or part of the company,” Kolerus said. “The special committee and the Board determined that the best course of action to maximize shareholder value is to remain as an independent company and to realign cost and overhead structure with revenue.”
Ellis, the new president and chief executive officer, said, “Since our leadership transition, we have met with key stakeholders and they remain supportive of our strategy and recognize the strong long-term growth potential of our business. With the actions we have taken or initiated, we will further strengthen our financial position and improve our prospects for profitable growth, as we continue to build on our already-distinctive customer service reputation.”
More detail will be provided when the company reports its fiscal 2009 second-quarter earnings on November 20, 2008.
Forward-Looking Language
Portions of this release, particularly the statements made by management and those that are not historical facts, are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current assumptions and expectations, and are subject to risks and uncertainties, many of which are beyond the control of Agilysys. Many factors could cause Agilysys actual results to differ materially from those anticipated by the forward-looking statements. These factors include those referenced in the Annual Report on Form 10-K or as may be described from time to time in Agilysys subsequent SEC filings.
Potential factors that could cause actual results to differ materially from those expressed or implied by such statements include, but are not limited to, those relating to Agilysys long-term financial goals, anticipated revenue gains, revenue volume, margin improvements, cost savings, capital expenditures, depreciation and amortization, new product introductions and economic conditions.
In addition, this release contains time-sensitive information and reflects management's best analysis only as of the date of this release. Agilysys does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Information on the potential factors that could affect Agilysys actual results of operations is included in its filings with the SEC, including, but not limited to, its Annual Report on Form 10-K for the fiscal year ended March 31, 2007. Interested persons can obtain it free at the SEC's Web site, www.sec.gov.
About Agilysys, Inc.
Agilysys is a leading provider of innovative IT solutions to corporate and public-sector customers, with special expertise in select markets, including retail and hospitality. The company uses technology – including hardware, software and services – to help customers resolve their most complicated IT needs. The company possesses expertise in enterprise architecture and high availability, infrastructure optimization, storage and resource management, identity management and business continuity; and provides industry-specific software, services and expertise to the retail and hospitality markets. Headquartered in Cleveland with fiscal 2008 revenues of $781 million, Agilysys operates extensively throughout North America, with additional sales offices in the United Kingdom and China. For more information, visit www.agilysys.com.
Investor contact:
Curtis Stout
Vice President and Treasurer
Agilysys, Inc.
440-519-8635
curtis.stout@agilysys.com
Media contact:
Shawn Turner
Communications Manager
Agilysys, Inc.
440-519-8627
shawn.turner@agilysys.com