8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report: November 4, 2009
(Date of earliest event reported)

AGILYSYS, INC.

(Exact name of registrant as specified in its charter)

Ohio	000-5734	34-0907152
(State or other jurisdiction	(Commission File Number)	(IRS Employer Identification No.)
of incorporation)

28925 Fountain Parkway, Solon, Ohio	44139
(Address of principal executive offices)	(ZIP Code)

Registrant’s telephone number, including area code: (440) 519-8700

N/A
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition; and

Item 7.01 Regulation FD Disclosure

On November 4, 2009, Agilysys, Inc. (the “Company”) issued a press release announcing its results for the fiscal 2010 second quarter and six months ended September 30, 2009. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein. A copy of the slide presentation for the earnings webcast conference call is also attached hereto as Exhibit 99.2 and incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

99.1	Press release issued by the Company dated November 4, 2009, announcing its results for the fiscal 2010 second quarter and six months ended September 30, 2009.
99.2	Second quarter and six months ended September 30, 2009 slide presentation for earnings webcast conference call.

SIGNATURES

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

AGILYSYS, INC.
By:	/s/ Kenneth J. Kossin, Jr.
	Kenneth J. Kossin, Jr.
	Senior Vice President and Chief Financial Officer

Date: November 4, 2009

Exhibit Index

Exhibit Number	Description
99.1	Press release issued by the Company dated November 4, 2009, announcing its results for the fiscal 2010 second quarter and six months ended September 30, 2009.
99.2	Second quarter and six months ended September 30, 2009 slide presentation for earnings webcast conference call.

EX-99.1

Exhibit 99.1

Agilysys Reports Unaudited Fiscal 2010 Second-Quarter
and First-Half Results

• Quarterly Net Income from Continuing Operations Improves Sharply to $2.9 Million, or $0.12 Per Diluted Share, on 9% Lower Revenue

• Revenue Increases 20% Sequentially

• Debt Free With $48.2 Million Cash on Hand at Sept. 30 vs $36.2 Million at Fiscal Year-End

CLEVELAND—Nov. 4, 2009—Agilysys, Inc. (Nasdaq: AGYS), a leading provider of innovative IT solutions, today announced unaudited financial results for the fiscal 2010 second quarter and first half ended September 30, 2009.

Second-Quarter Unaudited Results of Operations

Revenue declined 9.0% to $156.0 million, compared with $171.4 million in the second quarter of fiscal 2009. Hardware sales declined 3.5%, services declined 32.6% and software sales increased 14.0%. Consolidated revenues rebounded 19.8% from the $130.2 million reported in the first quarter, due to double-digit growth in hardware, software and services.

Cost-cutting initiatives and lower acquisition-related intangible amortization drove selling, general and administrative (SG&A) expense down $12.4 million, or 23.9%, to $39.6 million. The Company recently executed an additional $9 million in annual savings of which approximately $4 million will be realized in the second half of fiscal 2010.

The Company’s operating income, excluding restructuring and asset impairment charges (“Charges”), improved $6.2 million to $4.3 million from the operating loss of $1.9 million last year. Lower sales and gross profit year-over-year were more than offset by lower SG&A expense. Adjusted EBITDA (operating income plus depreciation and amortization), excluding Charges, increased 44.9% to $7.4 million for the quarter, compared with $5.1 million a year ago.

Agilysys reported net income from continuing operations of $2.9 million, or $0.12 per diluted share, a significant increase from the loss of $105.3 million, or a loss of $4.66 per share, recorded in the previous year.

“We are pleased to report strong sequential growth in sales and positive net earnings for the quarter. The improvement in profitability reflects the tangible benefits realized from our cost-saving efforts,” said Martin Ellis, President and Chief Executive Officer. “In addition to improved bottom-line performance, our order pipeline has started to show modest recovery from the depressed levels of the past several quarters.”

Fiscal 2010 First-Half Unaudited Results of Operations

First-half 2010 revenue was $286.2 million compared with revenue of $351.2 million in the first six months of 2009. Revenue in the first half of fiscal 2010 decreased 18.5% reflecting lower sales in each of the company’s three business segments. Hardware declined 13.6%, services declined 36.3% and software decreased 8.2%.

SG&A expense declined $23.7 million, or 22.0%, to $84.1 million, largely due to cost reductions. Approximately $44 million in annual costs have been eliminated since the first quarter of fiscal year 2009 when the company began aggressively reducing SG&A expenses to align cost structure with deteriorating

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

market demand. Adjusted EBITDA, excluding Charges, was $1.1 million for the six-month period, versus $3.3 million in the comparable period of fiscal 2009.

For the first six months of fiscal 2010, the company reported a net loss from continuing operations of $9.5 million, or a loss of $0.42 per share, compared with a net loss from continuing operations of $165.4 million, or a loss of $7.33 per share, in the first six months of fiscal 2009.

Business Outlook

The year-over-year declines in revenue have moderated and while some economic indicators have improved, market conditions still reflect uncertainty regarding the overall business environment and demand for IT products. Ellis commented: “The business is stabilizing, our pipeline has improved, and we expect to see a seasonal increase in sales in our third quarter ending December. As we look to the balance of fiscal 2010, we plan to continue to focus on those items under our control that can help produce tangible improvements in results. Near-term, we are optimistic regarding our outlook for the third quarter of the fiscal year and expect financial performance in second half to improve versus the first half.”

Conference Call Information

A conference call will be held at 11:00 a.m. ET on November 4, 2009 to review unaudited second-quarter and first-half fiscal 2010 results. A slide deck will be the basis for the review. Both the slide deck and the conference call can be accessed via the Investor Relations section of www.agilysys.com. In addition, a replay of the call will be archived on the Web site. If you are unable to participate during the live webcast, the call will be archived at the Investor Relations section of www.agilysys.com.

Forward-Looking Language

This release contains certain management expectations, which may constitute forward-looking information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Reform Act of 1995. Forward-looking information speaks only as to the date of this presentation and may be identified by use of words such as “may,” “will,” “believes,” “anticipates,” “plans,” “expects,” “estimates,” “projects,” “targets,” “forecasts,” “continues,” “seeks,” or the negative of those terms or similar expressions. Many important factors could cause actual results to be materially different from those in forward-looking information including, without limitation, competitive factors, disruption of supplies, changes in market conditions, pending or future claims or litigation, or technology advances. No assurances can be provided as to the outcome of cost reductions, business strategies, future financial results, unanticipated downturns to our relationships with customers, unanticipated difficulties integrating acquisitions, new laws and government regulations, interest rate changes, and unanticipated deterioration in economic and financial conditions in the United States and around the world. We do not undertake to update or revise any forward-looking information even if events make it clear that any projected results, actions, or impact, express or implied, will not be realized.

Other potential risks and uncertainties that may cause actual results to be materially different from those in forward-looking information are described in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC), under Item 1A, “Risk Factors.” Copies are available from the SEC or the Agilysys website.

Use of Non-GAAP Financial Information

To supplement the unaudited condensed consolidated financial statements presented in accordance with U.S. GAAP in this release, certain non-GAAP financial measures as defined by the SEC rules are used. Management believes that such information can enhance investors’ understanding of the Company’s ongoing operations and is a measure used in the Company’s debt agreement. The non-GAAP measures included in this release have been reconciled to the comparable GAAP measures within an accompanying table, shown on the last page of this release.

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

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, Agilysys operates extensively throughout North America, with additional sales offices in the United Kingdom and Asia.

News releases and other information on Agilysys are available on the Internet at: www.agilysys.com.

# # #

Investor Contact:

Curtis Stout
Vice President and Treasurer
Agilysys, Inc.
440-519-8635
curtis.stout@agilysys.com

Media Contact:

Maureen Morreale
Senior Communications Manager
Agilysys, Inc.
440-519-8161
maureen.morreale@agilysys.com

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended						Six Months Ended
	Sep 30,						Sep 30,
(In thousands, except share and per-share data)	2009			2008			2009			2008
Net sales:
Products	$	126,925		$	128,313		$	231,818		$	265,892
Services		29,070			43125			54,367			85,297
Total net sales		155,995			171,438			286,185			351,189
Cost of goods sold:
Products		99,623			99,449			185,503			212.890
Services		12,499			21,881			24,958			41,169
Total cost of goods sold		112,122			121,330			210,461			254,059
Gross margin		43,873			50,108			75,724			97,130
Selling, general and administrative expenses		39,618			52,032			84,144			107,834
Asset impairment charges		—			112,020			—			145,643
Restructuring charges		54			510			68			23,573
Operating income (loss)		4,201			(114,454	)		(8,488	)		(179,920	)
Other expense (income):
Other expense (income), net		81			(242	)		(390	)		(480	)
Interest income		(9	)		(215	)		(42	)		(462	)
Interest expense		253			197			460			452
Income (loss) before income taxes		3,876			(114,194	)		(8,516	)		(179,430	)
Income tax expense (benefit)		988			(8,917	)		1,003			(14,080	)
Income (loss) from continuing operations		2,888			(105,277	)		(9,519	)		(165,350	)
Loss from discontinued operations		(52	)		(1,312	)		(41	)		(1,274	)
Net income (loss)	$	2,836		$	(106,589	)	$	(9,560	)	$	(166,624	)
Income (loss) per share — basic
Income (loss) from continuing operations	$	0.13		$	(4.66	)	$	(0.42	)	$	(7.33	)
Loss from discontinued operations		(0.00	)		(0.06	)		(0.00	)		(0.05	)
Net income (loss)	$	0.13		$	(4.72	)	$	(0.42	)	$	(7.38	)
Income (loss) per share — diluted
Income (loss) from continuing operations	$	0.12		$	(4.66	)	$	(0.42	)	$	(7.33	)
Loss from discontinued operations		(0.00	)		(0.06	)		(0.00	)		(0.05	)
Net income (loss)	$	0.12		$	(4.72	)	$	(0.42	)	$	(7.38	)
Weighted average shares outstanding
Basic		22,625,654			22,601,549			22,626,491			22,569,206
Diluted		22,879,030			22,601,549			22,626,491			22,569,206
Cash dividends per share	$	0.03		$	0.03		$	0.06		$	0.06

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

AGILYSYS, INC.
BUSINESS SEGMENT INFORMATION (UNAUDITED)

	Three Months Ended						Six Months Ended
	Sep 30,						Sep 30,
(In thousands)	2009			2008			2009			2008
Hospitality (HSG)
Total revenue	$	23,836		$	23,488		$	40,386		$	48,242
Elimination of intersegment revenue		(514	)		(43	)		(1,057	)		(82	)
Revenue from external customers	$	23,322		$	23,445		$	39,329		$	48,160
Gross margin	$	14,237		$	14,435		$	23,777		$	28,844
		61.0	%		61.6	%		60.5	%		59.9	%
Depreciation and amortization	$	1,104		$	1,855		$	2,227		$	3,186
Operating income (loss)		3,997			(102,906	)		2,095			(108,765	)
Adjusted EBITDA	$	5,101		$	(101,051	)	$	4,322		$	(105,579	)
Goodwill and intangible asset impairment	$	—		$	103,387		$	—		$	110,852
Retail (RSG)
Total revenue	$	23,582		$	29,437		$	47,970		$	67,704
Elimination of intersegment revenue		(19	)		(148	)		(20	)		(316	)
Revenue from external customers	$	23,563		$	29,289		$	47,950		$	67,388
Gross margin	$	4,694		$	6,094		$	10,070		$	14,493
		19.9	%		20.8	%		21.0	%		21.5	%
Depreciation and amortization	$	44		$	53		$	94		$	141
Operating income (loss)		1,133			(5,942	)		2,763			(20,314	)
Adjusted EBITDA	$	1,177		$	(5,889	)	$	2,857		$	(20,173	)
Goodwill impairment	$	—		$	6,549		$	—		$	24,910
Technology (TSG)
Total revenue	$	109,126		$	120,047		$	198,950		$	238,748
Elimination of intersegment revenue		(16	)		(1,343	)		(44	)		(3,107	)
Revenue from external customers	$	109,110		$	118,704		$	198,906		$	235,641
Gross margin	$	24,909		$	29,009		$	42,638		$	51,446
		22.8	%		24.4	%		21.4	%		21.8	%
Depreciation and amortization	$	817		$	4,061		$	4,768		$	8,534
Operating income (loss)		6,320			5,732			3,786			(26,313	)
Adjusted EBITDA	$	7,137		$	9,793		$	8,554		$	(17,779	)
Goodwill impairment	$	—		$	2,084		$	—		$	9,881
Restructuring charge	$	—		$	510		$	—		$	23,573

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

AGILYSYS, INC.
BUSINESS SEGMENT INFORMATION
(Unaudited)

	Three Months Ended						Six Months Ended
	Sep 30,						Sep 30,
(In thousands)	2009			2008			2009			2008
Corporate / Other
Gross margin	$	33		$	570		$	(761	)	$	2,347
Depreciation and amortization (a)	$	1,205		$	1,079		$	2,409		$	2,098
Operating loss		(7,249	)		(11,338	)		(17,132	)		(24,528	)
Adjusted EBITDA	$	(6,044	)	$	(10,259	)	$	(14,723	)	$	(22,430	)
Restructuring charge	$	54		$	—		$	68		$	—
Consolidated
Total revenue	$	156,544		$	172,972		$	287,306		$	354,694
Elimination of intersegment revenue		(549	)		(1,534	)		(1,121	)		(3,505	)
Revenue from external customers	$	155,995		$	171,438		$	286,185		$	351,189
Gross margin	$	43,873		$	50,108		$	75,724		$	97,130
		28.1	%		29.2	%		26.5	%		27.7	%
Depreciation and amortization (a)	$	3,170		$	7,048		$	9,498		$	13,959
Operating income (loss)		4,201			(114,454	)		(8,488	)		(179,920	)
Adjusted EBITDA	$	7,371		$	(107,406	)	$	1,010		$	(165,961	)
Goodwill and intangible asset impairment	$	—		$	112,020		$	—		$	145,643
Restructuring charge	$	54		$	510		$	68		$	23,573

(a) Does not include the amortization of deferred financing fees totaling $132 and $57 for the three months ended Sept. 30, 2009 and 2008, respectively, and $220 and $113 for the six months ended Sept. 30, 2009 and 2008, respectively, all of which related to the Corporate/Other segment.

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	Sep 30,			Mar 31,
	2009			2009
(In thousands)	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	48,197		$	36,244
Accounts receivable, net		125,166			151,944
Inventories, net		22,036			27,216
Deferred income taxes — current, net		6,845			6,836
Prepaid expenses and other current assets		5,337			4,564
Income taxes receivable		3,874			3,871
Assets of discontinued operations — current		285			1,075
Total current assets		211,740			231,750
Goodwill		50,563			50,382
Intangible assets, net		29,877			35,699
Deferred income taxes — non-current, net		511			511
Other non-current assets		18,467			29,008
Assets of discontinued operations — non-current		—			56
Property and equipment, net		29,471			27,030
Total assets	$	340,629		$	374,436
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	92,832		$	28,042
Floor plan financing		—			74,159
Deferred revenue		20,435			18,709
Accrued liabilities		20,665			37,807
Long-term debt — current		195			238
Liabilities of discontinued operations — current		575			1,176
Total current liabilities		134,702			160,131
Other non-current liabilities		21,827			21,588
Shareholders’ equity:
Common shares, without par value, at $0.30 stated value; authorized 80,000,000 shares; 31,606,831 shares issued and 23,031,119 shares outstanding at Sep 30, 2009		9,370			9,366
Treasury stock (8,575,712 and 8,896,778 shares at Sep 30, 2009, and Mar 31, 2009, respectively)		(2,670	)		(2,670	)
Capital in excess of stated value		(9,934	)		(11,036	)
Retained earnings		189,027			199,947
Accumulated other comprehensive loss		(1,693	)		(2,890	)
Total shareholders’ equity		184,100			192,717
Total liabilities and shareholders’ equity	$	340,629		$	374,436

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended
	Sep 30,
(In thousands)	2009			2008
Operating activities:
Net loss	$	(9,560	)	$	(166,624	)
Add: Loss from discontinued operations		41			1,274
Loss from continuing operations		(9,519	)		(165,350	)
Adjustments to reconcile net loss from continuing operations to net cash provided by (used for) operating activities (net of effects from business acquisitions):
Impairment of goodwill and intangible assets		—			166,223
Gain on redemption of cost basis investment		—			(51	)
Gain on partial redemption of investment in The Reserve Fund’s Primary Fund		(70	)		—
Loss on the sale of securities		91			—
Depreciation		1,891			1,927
Amortization		7,827			12,145
Deferred income taxes		(9	)		(18,372	)
Stock-based compensation		1,073			2,152
Changes in working capital:
Accounts receivable		26,778			32,699
Inventories		5,180			2,001
Accounts payable		65,150			(76,327	)
Accrued and other liabilities		(15,309	)		(40,816	)
Income taxes payable		(798	)		946
Other changes, net		(866	)		(3,252	)
Other non-cash adjustments		(2,357	)		(2,487	)
Total adjustments		88,581			76,788
Net cash provided by (used for) operating activities		79,062			(88,562	)
Investing activities:
Proceeds from (claim on) The Reserve Fund’s Primary Fund		2,337			(7,657	)
Proceeds from redemption of cost basis investment		—			7,172
Proceeds from the borrowings against company-owned life insurance policies		12,500			—
Change in cash surrender value of company-owned life insurance policies		(107	)		(103	)
Acquisition of businesses, net of cash acquired		—			(2,381	)
Purchase of property and equipment		(5,923	)		(2,603	)
Net cash provided by (used for) investing activities		8,807			(5,572	)
Financing activities:
Floor plan financing agreement, net		(74,159	)		75,551
Proceeds from borrowings under credit facility		5,000			—
Principal payments under credit facility		(5,000	)		—
Principal payment under long-term obligations		(206	)		(47	)
Issuance of common shares		33			—
Debt financing costs		(1,520	)		—
Dividends paid		(1,360	)		(1,358	)
Net cash used for (provided by) financing activities		(77,212	)		74,146
Effect of exchange rate changes on cash		1,092			(101	)
Cash flows provided by (used for) continuing operations		11,749			(20,089	)
Cash flows of discontinued operations:
Operating cash flows		204			(29	)
Investing cash flows		—			35
Net increase (decrease) in cash		11,953			(20,083	)
Cash at beginning of period		36,244			69,935
Cash at end of period	$	48,197		$	49,852

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

AGILYSYS, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(Unaudited)

	Three Months Ended					Six Months Ended
	Sep 30,					Sep 30,
(In thousands)	2009		2008			2009			2008
Net income (loss)	$	2,836	$	(106,589	)	$	(9,560	)	$	(166,624	)
Plus:
Interest expense, net		244		(18	)		418			(10	)
Other income, net		81		(242	)		(390	)		(480	)
Income tax expense (benefit)		988		(8,917	)		1,003			(14,080	)
Depreciation and amortization expense (a)		3,170		7,048			9,498			13,959
Loss from discontinued operations, net of tax		52		1,312			41			1,274
Adjusted EBITDA		7,371		(107,406	)		1,010			(165,961	)
Asset impairment charges		—		112,020			—			145,643
Restructuring charges		54		510			68			23,573
Adjusted EBITDA excluding asset impairment and restructuring charges	$	7,425	$	5,124		$	1,078		$	3,255

(a) Depreciation and amortization expense excludes amortization of deferred finance costs, totaling $132 and $57 for the three months ended Sept. 30, 2009 and 2008, respectively, and totaling $220 and $113 for the six months ended Sept. 30, 2009 and 2008, respectively, as such costs are already included in interest expense, net.

AGILYSYS, INC. • 28925 FOUNTAIN PARKWAY • SOLON, OH 44139 • WWW.AGILYSYS.COM

EX-99.2

Exhibit 99.2

Agilysys, Inc. (Nasdaq: AGYS) Fiscal 2010 Unaudited Second Quarter Results November 4, 2009

Forward looking statements & non-GAAP financial information Forward-Looking Language This presentation contains certain management expectations, which may constitute forward-looking information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Reform Act of 1995. Forward-looking information speaks only as to the date of this presentation and may be identified by use of words such as "may," "will," "believes," "anticipates," "plans," "expects," "estimates," "projects," "targets," "forecasts," "continues," "seeks," or the negative of those terms or similar expressions. Many important factors could cause actual results to be materially different from those in forward-looking information including, without limitation, competitive factors, disruption of supplies, changes in market conditions, pending or future claims or litigation, or technology advances. No assurances can be provided as to the outcome of cost reductions, business strategies, future financial results, unanticipated downturns to our relationships with customers, unanticipated difficulties integrating acquisitions, new laws and government regulations, interest rate changes, and unanticipated deterioration in economic and financial conditions in the United States and around the world. We do not undertake to update or revise any forward-looking information even if events make it clear that any projected results, actions, or impact, express or implied, will not be realized. Other potential risks and uncertainties that may cause actual results to be materially different from those in forward-looking information are described in the company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC), under Item 1A, "Risk Factors." Copies are available from the SEC or the Agilysys web site. Use of Non-GAAP Financial Information To supplement the unaudited condensed consolidated financial statements presented in accordance with U.S. GAAP in this presentation, certain non-GAAP financial measures as defined by the SEC rules are used. Management believes that such information can enhance investors' understanding of the Company's ongoing operations and is a measure used in the Company's debt agreement. The non-GAAP measures included in this presentation have been reconciled to the comparable GAAP measures within an accompanying table, shown on the last page of this presentation.

Q2 review: highlights IT capital budgets began to loosen in Sept. quarter - revenue grew 20% sequentially - Q2 is typically flat to down from Q1 Q2's sequential revenue growth yielded meaningful improvement in EBITDA, demonstrating effectiveness of previous cost cutting initiatives Additional $9M of annualized cost reduction actions taken in Q2 - earnings impact will begin to be realized in Q3 with approximately $4M to be realized in FY10 Gross margin decreased to 28.1% from 29.2% in prior-year quarter largely due to lower rebate margins SG&A, excluding depreciation and amortization, decreased $9.1M year-over-year largely due to benefit of FY09 cost-saving actions and reduced incentive compensation Adjusted EBITDA, excluding restructuring and asset impairment charges, was $7.4M compared with $5.1M in prior-year quarter Diluted earnings in second quarter were $0.12 per share compared with a loss of $4.72 per share in prior-year quarter

Q2 review: consolidated results Hardware revenue decreased 4%, services decreased 33% and software increased 14% from prior year SG&A, excluding depr. & amort., decreased $9.1M Comp and benefits decreased $5.6M, which included $0.4M in severance in Q2 FY10 Bad debt expense decreased $1.3M Professional fees decreased $1.1M T&E decreased $0.6M Acquisition related intangible amortization decreased by $3.1M due to fully-amortizing certain intangible assets in Q1 Adjusted EBITDA, excluding charges, increased $2.3M - significant cost savings more than offset 12% decline in gross profit Operating income was $4.2M compared with a loss of $114.4M in prior year, which included $112.5M of asset impairment and restructuring charges Q2 Year-over-Year Commentary Statement of Operations ($Mil., except per share)

Q2 review: Hospitality ("HSG") Revenue was flat year-over-year as hospitality IT spend remains depressed Commercial gaming demand primarily relates to acquisitions of existing properties Food service and cruise markets have been stable Gross margin decreased due to higher proportion of hardware sales SG&A, excluding depr. & amort., decreased by $3.5M Payroll and contract labor costs decreased $1.2M due to FY09 cost saving actions Bad debt expense was down $1.2M Capitalization of Guest360 development costs reduced SG&A by $0.9M Travel and entertainment expenses were down $0.2M HSG Segment Profit ($Mil.) Q2 Year-over-Year Commentary

Q2 review: Retail ("RSG") Revenue was down 20% due to lower hardware sales and implementation services related to large roll-outs Gross margin decreased due to hardware pricing pressure SG&A, excl. depr. & amort., decreased $1.9M Payroll costs decreased $0.8M Outside services decreased $0.4M Bad debt expense was down $0.4M RSG Segment Profit ($Mil.) Q2 Year-over-Year Commentary

Q2 review: Technology ("TSG") Sales declined 8.1% year-over-year, but increased 21% sequentially Decline slowed as some companies begin to spend to address capacity, refresh, and virtualization needs Uncertainty as to timing of Oracle's pending acquisition of Sun is having some effect on demand and product availability Gross margin contracted in quarter primarily due to lower rebate margins SG&A, excl. depr. & amort., increased $1.2M Q2 FY10 includes $0.3M of severance related expense Bad debt expense increased $0.3M Acquisition-related intangible amortization decreased by $3.1M due to fully amortizing certain intangible assets in Q1 TSG Segment Profit ($Mil.) Q2 Year-over-Year Commentary

Q2 review: Corporate Gross profit decreased $0.6M due to recording miscellaneous pricing adjustments in business segments SG&A, excl. depr. & amort., decreased $4.8M due to FY09 cost-saving actions Payroll related costs were down $2.2M Outside services and professional fees decreased $0.9M T&E decreased $0.2M Corporate Segment ($Mil.) Q2 Year-over-Year Commentary

FY10 fiscal-to-date ("FTD") review: consolidated results Revenue declined 18.5% HSG decreased 18.5% as commercial gaming market remains challenging RSG decreased 28.9% due to absence of several large transactions in FY10 and lower retail spend on IT TSG decreased 15.6% as spend on infrastructure solutions - particularly hardware and uncertainty regarding timing of Oracle/Sun acquisition - hampers IT investments SG&A, excl. depr. & amort., decreased by $20.1M primarily due to: Lower payroll related costs of $11.7M Professional fees and outside services decreasing $3.2M Decrease in bad debt expense of $1.8M Travel and entertainment decreasing $1.5M FTD Year-over-Year Commentary Statement of Operations ($Mil., except per share)

Q2 review: summary balance sheet performance Cash at Sept. 30th was $48.2M - a decrease of $2.8M from 6/30/09 A/R consumed $20.2M of cash Inventory consumed $1.6M of cash A/P generated $16.5M of cash Received $0.7M distribution from investment in Reserve Fund's Primary Fund Days sales outstanding improved slightly from 73 days at 6/30/09 to 72 days for Q2 Capital expenditures were $2.4M for Q2 - largely relating to implementation of new Oracle enterprise software and Guest360 capitalized costs Q2 Sequential Commentary Working Capital ($Mil.) Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Receivables 134.5 172 151.9 105 125.2 Working capital as % of sales 0.051 0.049 0.091 0.051 0.05 Inventory 23.5 25.5 27.2 20.4 22 Working capital is (A/R + Inventory) less (A/P + IGF flooring + Deferred Revenue) Quarterly revenue annualized at historical quarterly skew

Quarterly revenue Jun '08 Sep '08 Dec '08 Mar '09 Jun '09 Sep '09 EBITDA 117 118.7 161.4 111 89.8 109 Jun '08 Sep '08 Dec '08 Mar '09 Jun '09 Sep '09 Organic 25 23.4 27.9 23.6 16 23 HSG Revenue ($Mil.) TSG Revenue ($Mil.) Jun '08 Sep '08 Dec '08 Mar '09 Jun '09 Sep '09 Organic 38 29.3 34.8 20 24.4 24 RSG Revenue ($Mil.) AGYS Consolidated Revenue ($Mil.) Jun '08 Sep '08 Dec '08 Mar '09 Jun '09 Sep '09 EBITDA 180 171.4 224.1 155.5 130.2 156

Outlook Improved visibility for fiscal Q3 - IT capital spending environment remains uncertain for calendar year 2010 Expect sequential improvement in fiscal Q3 revenue due to seasonal IT capital spend Remain focused on managing costs and working capital to drive cash flow Expect financial performance in second half to improve versus first half of fiscal 2010 Expect to generate cash flow of approximately $10M in FY10

Agilysys, Inc. (Nasdaq: AGYS) Fiscal 2010 Unaudited Second Quarter Results November 4, 2009

Reconciliation of net income/(loss) to adjusted EBITDA