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: June 3, 2010
(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 of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

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

The following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On June 3, 2010, Agilysys, Inc. (the “Company”) issued a press release announcing its results for the fiscal 2010 fourth quarter and year ended March 31, 2010. 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

(d) Exhibits

The following item is furnished as an exhibit to this current report on Form 8-K:

99.1	Press release issued by the Company dated June 3, 2010, announcing its results for the fiscal 2010 fourth quarter and year ended March 31, 2010.
99.2	Fourth quarter and year ended March 31, 2010 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: June 3, 2010

Exhibit Index

Exhibit Number	Description
99.1	Press release issued by the Company dated June 3, 2010, announcing its results for the fiscal 2010
	fourth quarter and year ended March 31, 2010.
99.2	Fourth quarter and year ended March 31, 2010 slide presentation for earnings webcast conference call.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Agilysys Announces Unaudited Fiscal 2010 Fourth-Quarter
and Full-Year Financial Results

• Fiscal 2010 Earnings of $0.15 Per Diluted Share Compared With Loss of $12.58 in Fiscal 2009

• SG&A Expenses Decreased $31.7 Million in Fiscal 2010, or 16%, From Fiscal 2009

• Cash Increased $29.3 Million to $65.5 Million in Fiscal 2010

CLEVELAND—June 3, 2010—Agilysys, Inc. (Nasdaq: AGYS), a leading provider of innovative IT solutions, today announced unaudited financial results for the fiscal 2010 fourth quarter and full year ended March 31, 2010.

Fourth-Quarter 2010 Unaudited Results of Operations

Year-over-year revenue declined in the fourth quarter of fiscal 2010. The company reported revenue of $135.8 million, which was 13% lower than the $155.5 million reported in last year’s comparable quarter. The lower revenue reflected weaker-than-anticipated demand in the company’s Technology Solutions Group.

Sales of hardware, software and services declined 13%, 25% and 3%, respectively, compared with the fourth quarter of fiscal 2009. Gross margin expanded to 26.4% of sales, compared with 25.7% of sales in the fiscal 2009 fourth quarter. The improvement in gross margin resulted primarily from a larger proportion of sales being derived from proprietary services and the company’s higher-margin Hospitality and Retail Solutions Groups. A decline in vendor incentives tempered the favorable margin impact from the change in sales mix during the period.

Selling, general and administrative (SG&A) expense was $42.6 million for the quarter, a decrease of $4.8 million from the prior year, primarily due to lower compensation and intangible amortization.

Operating loss for the quarter narrowed to $6.9 million, a notable improvement from the operating loss reported in last year’s fourth quarter of $97.5 million. Quarterly results for the prior year included charges related to restructuring and asset impairment (“Charges”) totaling $90.1 million, compared with $0.1 million in the current year. Adjusted EBITDA (operating income plus depreciation and amortization), excluding Charges, was a loss of $3.6 million for the quarter, compared with a loss of $0.9 million a year ago.

The net loss from continuing operations for the quarter was $0.5 million, or a loss of $0.02 per share, compared with a net loss from continuing operations of $114.6 million, or a loss of $5.07 per share, in the prior-year fourth quarter.

“Despite the very difficult market environment and lower sales levels experienced throughout the fiscal year, we made significant progress in resetting the cost structure and making select, but important, investments in the company,” said Martin Ellis, president and chief executive officer. “Moreover, our focus on working capital management and strong cash generation position us very well to advance our growth strategy of developing higher-value solutions with more proprietary software and services.”

Fiscal 2010 Unaudited Results of Operations

Full-year revenue in fiscal 2010 decreased 12.4% to $640.4 million from $730.7 million in fiscal 2009 due to the weak economic environment and lower levels of corporate IT spending. Hardware sales, which

comprised 69% of total sales, declined 5%, while sales of software and services were down 9% and 33%, respectively, compared with the prior fiscal year.

As a result of the lower sales, full-year gross profit declined $34.6 million, or 17.6%, to $161.5 million, versus $196.1 million in fiscal 2009. Gross margin as a percentage of sales was 25.2% in fiscal 2010, compared with 26.8% last year. Gross margin was negatively impacted by lower vendor rebates and lower selling margins.

SG&A expense decreased $31.7 million, or 16%, to $167.2 million, compared with $198.9 million in the prior fiscal year. The decrease was primarily due to cost-reduction efforts, lower intangible amortization and lower variable compensation.

The operating loss for the year was $6.8 million, compared with the operating loss of $275.4 million in fiscal 2009. Charges related to restructuring and asset impairment totaled $272.7 million in the prior year, versus $1.1 million in the current year. Adjusted EBITDA, excluding Charges, was $10.1 million for fiscal 2010, compared with $24.3 million a year ago. The decrease was due to lower sales and lower gross margin, reflecting a challenging IT demand environment for most of the year.

Full-year net income from continuing operations was $3.6 million, or $0.15 per diluted share, for fiscal 2010. Net income included a $5.2 million income tax benefit recorded for losses that were carried back to offset prior years’ taxable income and reversal of prior-year reserves. This compares with the net loss from continuing operations of $282.2 million, or a loss of $12.49 per share, last year.

Accounts Receivable and Cash

The accounts receivable portfolio improved significantly in fiscal 2010. Days sales outstanding declined from 88 days at fiscal year-end 2009 to 69 days at fiscal year-end 2010, resulting in a $49.5 million reduction in accounts receivable. In addition, the average age of trade receivables improved by 6 days. Strong accounts receivable and working capital management contributed to cash on hand growing $29.3 million in fiscal 2010, reaching $65.5 million at March 31, 2010.

Business Outlook

Ellis continued: “We are a leaner and more focused company. Our investments in infrastructure and product development were sustained throughout the recession and are expected to make important contributions to future success. Subsequent to the end of the fiscal year, we went live on our new integrated Oracle ERP platform, which will further improve financial reporting, internal controls and operating efficiencies, as well as enhance customer service.”

“HSG and RSG continue to gain traction, while demand in TSG remains uncertain in the short-term. Longer—term, we expect to benefit from broader demand for IT products and services. We intend to provide more comprehensive guidance as the demand environment becomes clearer,” Ellis concluded.

The outlook for cash-flow generation remains strong and the company expects to generate $10 million to $15 million in cash flow in fiscal 2011. The company also expects to incur capital expenditures of approximately $10 million and depreciation and amortization of approximately $12.5 million.

The company will file its Form 10-K with the SEC next week.

Conference Call Information

A conference call will be held today at 11:00 a.m. ET. A slide deck, which will be the basis for the review, will accompany the conference call. 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 website.

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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, and macroeconomic demand for IT products and services, unanticipated difficulties integrating acquisitions, new laws and government regulations, interest rate changes, consequences of MAK Capital’s shareholder-approved control share acquisition proposal, and unanticipated deterioration in economic and financial conditions in the United States and around the world or the consequences. 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 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. 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.

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 and support offices in the United Kingdom, Singapore and Hong Kong.

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

# # #

Investor Contact:

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

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Media Contact:

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

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AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Twelve Months Ended
	March 31,						March 31,
	2010			2009			2010			2009
(In thousands, except share and per-share data)	(Unaudited)						(Unaudited)
Net sales:
Products	$	104,004		$	122,620		$	520,747		$	553,312
Services		31,827			32,835			119,684			177,408
Total net sales		135,831			155,455			640,431			730,720
Cost of goods sold:
Products		88,232			103,130			429,218			462,248
Services		11,772			12,386			49,686			72,379
Total cost of goods sold		100,004			115,516			478,904			534,627
Gross margin		35,827			39,939			161,527			196,093
Selling, general and administrative expenses		42,562			47,321			167,248			198,867
Asset impairment charges		55			86,213			293			231,856
Restructuring charges		78			3,871			823			40,801
Operating loss		(6,868	)		(97,466	)		(6,837	)		(275,431	)
Other (income) expense:
Other (income) expense, net		(883	)		2,651			(6,194	)		7,180
Interest income		(4	)		(3	)		(13	)		(524	)
Interest expense		297			93			970			1,196
Loss before income taxes		(6,278	)		(100,207	)		(1,600	)		(283,283	)
Income tax (benefit) expense		(5,769	)		14,385			(5,176	)		(1,096	)
(Loss) income from continuing operations		(509	)		(114,592	)		3,576			(282,187	)
Income (loss) from discontinued operations, net of taxes		9			804			(29	)		(1,947	)
Net (loss) income	$	(500	)	$	(113,788	)	$	3,547		$	(284,134	)
Earnings per share — basic:
(Loss) income from continuing operations	$	(0.02	)	$	(5.07	)	$	0.16		$	(12.49	)
Income (loss) from discontinued operations		—			0.04			(0.00	)		(0.09	)
Net (loss) income	$	(0.02	)	$	(5.03	)	$	0.16		$	(12.58	)
Earnings per share — diluted:
(Loss) income from continuing operations	$	(0.02	)	$	(5.07	)	$	0.15		$	(12.49	)
Income (loss) from discontinued operations		—			0.04			(0.00	)		(0.09	)
Net (loss) income	$	(0.02	)	$	(5.03	)	$	0.15		$	(12.58	)
Weighted average shares outstanding
Basic		22,628,788			22,604,561			22,626,586			22,586,603
Diluted		22,628,788			22,604,561			23,087,742			22,586,603
Cash dividends per share		—		$	0.03		$	0.06		$	0.12

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AGILYSYS, INC.
BUSINESS SEGMENT INFORMATION
(In thousands)

	Three Months Ended Mar. 31, 2010															Twelve Months Ended Mar. 31, 2010
	Reportable Segments															Reportable Segments
										Corp/															Corp/
	HSG			RSG			TSG			Other			Consolidated			HSG			RSG			TSG			Other			Consolidated
Total net revenue	$	21,311		$	25,185		$	89,335		$	—		$	135,831		$	83,136		$	110,818		$	446,477		$	—		$	640,431
Gross margin	$	13,374		$	5,840		$	16,613		$	—		$	35,827		$	51,463		$	23,326		$	87,501		$	(763	)	$	161,527
Gross margin percentage		62.8	%		23.2	%		18.6	%					26.4	%		61.9	%		21.0	%		19.6	%					25.2	%
Operating income (loss)	$	2,487		$	974		$	(1,130	)	$	(9,199	)	$	(6,868	)	$	8,690		$	6,662		$	10,951		$	(33,140	)	$	(6,837	)
Other income expenses, net		—			—			—			(883	)		(883	)		—			—			—			(6,194	)		(6,194	)
Interest expense, net		—			—			—			293			293			—			—			—			957			957
Income (loss) from continuing operations before income taxes	$	2,487		$	974		$	(1,130	)	$	(8,609	)	$	(6,278	)	$	8,690		$	6,662		$	10,951		$	(27,903	)	$	(1,600	)
Non-cash charges:
Depreciation and Amortization(1)	$	1,029		$	55		$	839		$	1,266		$	3,189		$	4,337		$	198		$	6,418		$	4,876		$	15,829
Asset impairment	$	—		$	—		$	55		$	—		$	55		$	90		$	—		$	55		$	148		$	293
Restructuring charges	$	—		$	—		$	—		$	78		$	78		$	—		$	—		$	—		$	823		$	823
Total	$	1,029		$	55		$	894		$	1,344		$	3,322		$	4,427		$	198		$	6,473		$	5,847		$	16,945

	Three Months Ended Mar. 31, 2009															Twelve Months Ended Mar. 31, 2009
	Reportable Segments															Reportable Segments
										Corp/															Corp/
	HSG			RSG			TSG			Other			Consolidated			HSG			RSG			TSG			Other			Consolidated
Total net revenue	$	23,565		$	19,981		$	111,909		$	—		$	155,455		$	99,636		$	122,159		$	508,925		$	—		$	730,720
Gross margin	$	14,084		$	4,317		$	23,279		$	(1,741	)	$	39,939		$	58,004		$	27,748		$	108,489		$	1,852		$	196,093
Gross margin percentage		59.8	%		21.6	%		20.8	%					25.7	%		58.2	%		22.7	%		21.3	%					26.8	%
Operating (loss)	$	(8,455	)	$	(878	)	$	(73,681	)	$	(14,452	)	$	(97,466	)	$	(114,053	)	$	(16,963	)	$	(88,177	)	$	(56,238	)	$	(275,431	)
Other income expenses, net		—			—			—			2,651			2,651			—			—			—			7,180			7,180
Interest expense, net		—			—			—			90			90			—			—			—			672			672
Income (loss) from continuing operations before income taxes	$	(8,455	)	$	(878	)	$	(73,681	)	$	(17,193	)	$	(100,207	)	$	(114,053	)	$	(16,963	)	$	(88,177	)	$	(64,090	)	$	(283,283	)
Non-cash charges:
Depreciation and Amortization(1)	$	1,194		$	(28	)	$	4,126		$	1,166		$	6,458		$	5,931		$	129		$	16,673		$	4,366		$	27,099
Asset impairment	$	11,637		$	2		$	74,574		$	—		$	86,213		$	122,488		$	24,912		$	84,456		$	—		$	231,856
Restructuring charges	$	—		$	—		$	—		$	3,871		$	3,871		$	—		$	—		$	23,573		$	17,228		$	40,801
Total	$	12,831		$	(26	)	$	78,700		$	5,037		$	96,542		$	128,419		$	25,041		$	124,702		$	21,594		$	299,756

⁽¹⁾ Does not include the amortization of deferred financing fees totaling $139 and $0 for the three months ended March 31, 2010 and 2009, respectively, and $485 and $584 for the twelve months ended March 31, 2010 and 2009, respectively.

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AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			March 31,
	2010			2009
(In thousands)	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	65,535		$	36,244
Accounts receivable, net		104,808			151,944
Inventories, net		14,446			27,216
Deferred income taxes, net		144			6,836
Prepaid expenses and other current assets		5,047			4,564
Income taxes receivable		10,394			3,871
Assets of discontinued operations — current		—			1,075
Total current assets		200,374			231,750
Goodwill		50,418			50,382
Intangible assets, net		32,510			36,659
Deferred income taxes—non-current		899			511
Other non-current assets		18,175			29,008
Assets of discontinued operations—non-current		—			56
Property and equipment, net		27,995			26,070
Total assets	$	330,371		$	374,436
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	70,171		$	28,042
Floor plan financing in default		—			74,159
Deferred revenue		23,810			18,709
Accrued and other current liabilities		17,705			37,807
Capital Leases—current		311			238
Liabilities of discontinued operations — current		—			1,176
Total current liabilities		111,997			160,131
Other non-current liabilities		19,450			21,588
Shareholders’ equity:
Common shares, without par value, at $0.30 stated value; authorized 80,000,000 shares; 31,606,831 and 31,523,218 shares issued in 2010 and 2009, respectively		9,482			9,457
Treasury stock (8,674,788 shares in 2010 and 8,896,778 in 2009)		(2,602	)		(2,669	)
Capital in excess of stated value		(8,770	)		(11,128	)
Retained earnings		202,134			199,947
Accumulated other comprehensive loss		(1,320	)		(2,890	)
Total shareholders’ equity		198,924			192,717
Total liabilities and shareholders’ equity	$	330,371		$	374,436

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AGILYSYS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended March 31,
	2010			2009
(In thousands)	(Unaudited)
Operating activities:
Net income (loss)	$	3,547		$	(284,134	)
Add: Loss from discontinued operations		29			1,947
Income (loss) from continuing operations		3,576			(282,187	)
Adjustments to reconcile net (loss) income from continuing operations to net cash used for operating activities (net of effects from business acquisitions):
Asset impairment charges		293			249,983
Impairment of investment in The Reserve Fund’s Primary Fund		—			3,001
Gain on redemption of investment in The Reserve Fund’s Primary Fund		(2,505	)		—
Gain on cost investment		—			(56	)
Loss on sale of securities		91			—
Loss on disposal of property and equipment		—			494
Depreciation		3,914			4,032
Amortization		12,400			23,651
Deferred income taxes		6,596			(7,035	)
Stock-based compensation		2,426			457
Excess tax benefit from exercise of stock options		(9	)		—
Change in cash surrender value of company owned life insurance policies		(802	)		4,610
Changes in operating assets and liabilities:
Accounts receivable		49,481			14,909
Inventories		12,839			(1,763	)
Accounts payable		41,889			(68,809	)
Accrued liabilities		(15,213	)		(23,520	)
Income taxes payable		(9,021	)		14,483
Other changes, net		365			(1,808	)
Other non-cash adjustments		(2,396	)		(10,849	)
Total adjustments		100,348			201,780
Net cash provided by (used for) operating activities		103,924			(80,407	)
Investing activities:
Proceeds from (claim on) The Reserve Fund’s Primary Fund		4,772			(5,268	)
Proceeds from redemption of cost basis investment		—			9,513
Proceeds from borrowings against corporate-owned life insurance policies		12,500			—
Additional investments in corporate-owned life insurance policies		(1,712	)		(5,996	)
Proceeds from sale of marketable securities		61			81
Additional investments in marketable securities		(45	)		(4	)
Acquisition of businesses, net of cash acquired		—			(2,381	)
Purchase of property and equipment		(13,306	)		(7,056	)
Net cash provided by (used for) investing activities		2,270			(11,111	)
Financing activities:
Floor plan financing agreement, net		(74,468	)		59,607
Proceeds from borrowings under credit facility		5,077			—
Principle payments under credit facility		(5,077	)		—
Debt financing costs		(1,578	)		—
Dividends paid		(1,360	)		(2,718	)
Issuance of common shares		89			—
Excess tax benefit from exercise of stock options		9			—
Principal payment under long-term obligations		(216	)		(67	)
Net cash (used for) provided by financing activities		(77,524	)		56,822
Effect of exchange rate changes on cash		695			911
Cash flows provided by (used for) continuing operations		29,365			(33,785	)
Cash flows of discontinued operations—operating		(74	)		94
Net increase (decrease) in cash		29,291			(33,691	)
Cash at beginning of period		36,244			69,935
Cash at end of period	$	65,535		$	36,244

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

	Three Months Ended						Twelve Months Ended
	March 31,						March 31,
	2010			2009			2010			2009
(In thousands)	(Unaudited)			(Unaudited)			(Unaudited)
Net (loss) income	$	(500	)	$	(113,788	)	$	3,547		$	(284,134	)
Plus:
Interest expense, net		293			90			957			672
Income tax (benefit) expense		(5,769	)		14,385			(5,176	)		(1,096	)
Depreciation and amortization expense(a)		3,189			6,458			15,829			27,099
Other (income) expenses, net		(883	)		2,651			(6,194	)		7,180
(Income) loss from discontinued operations		(9	)		(804	)		29			1,947
Adjusted EBITDA from continuing operations	$	(3,679	)	$	(91,008	)	$	8,992		$	(248,332	)

^(a) Depreciation and amortization expense excludes amortization of deferred finance costs totaling $139 and $0 for the three months ended Mar. 31, 2010 and 2009, respectively, and $485 and $584 for the twelve months ended Mar. 31, 2010 and 2009, respectively; as such costs are already included in interest (income) expense, net.

-9-

EX-99.2

Exhibit 99.2

Agilysys, Inc. (Nasdaq: AGYS) Fiscal 2010 Unaudited Fourth Quarter & Full-Year Results June 3, 2010

Forward looking statements & non-GAAP financial information 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, and macroeconomic demand for IT products and services, unanticipated difficulties integrating acquisitions, new laws and government regulations, interest rate changes, consequences of MAK Capital's shareholder-approved control share acquisition proposal, and unanticipated deterioration in economic and financial conditions in the United States and around the world or the consequences. 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 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. 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.

Q4 review: highlights Revenue decreased 12.6% from Q4 FY09 to $135.8M - weak demand impacted TSG in quarter Gross margin increased to 26.4% from 25.7% in prior year quarter on a higher proportion of proprietary services revenue and higher margin HSG and RSG revenue SG&A decreased $4.8M year-over-year largely due to lower compensation, bad debt expense and acquisition related intangibles amortization Restructuring and asset impairment charges decreased $89.9M from Q4 FY09 Provision for income taxes decreased by $20.2M in quarter due to valuation allowance charge in Q4 FY09 and loss carry-back benefit recognized in Q4 FY10 Earnings per share from continuing operations increased from a loss of $5.03 in Q4 FY09 to a loss $0.02 Days sales outstanding improved 19 days and cash increased $29.3 million in fiscal 2010

Q4 review: consolidated results Revenue decreased 13%; hardware by 13%, software by 25% and services by 3% Gross margins increased 0.7% due to higher proprietary services mix and higher proportion revenue from HSG and RSG SG&A, excluding depr. & amort., decreased by $1.5M Other income in FY10 includes gains recognized on Reserve Fund distributions and COLIs compared with losses for both in prior year Taxes include benefit of loss carry-back in FY10 compared with charge for valuation allowance on deferred tax assets in FY09 Loss from continuing operations was $0.5M compared with $114.6M in FY09 largely due to absence of impairment and restructuring charges Q4 Year-over-Year Commentary Statement of Operations ($Mil., except per share)

Q4 review: Hospitality ("HSG") Revenue decreased 9% primarily due to softness in commercial gaming market Gross margin increased due to absence of miscellaneous cost of goods sold adjustments SG&A, excluding depr. & amort., increased by $0.2M Guest360TM capitalized costs were $1.1M in Q4 FY10 compared with $0.8M in prior year quarter Adjusted EBITDA, excluding charges, decreased $0.9M primarily due to lower revenue HSG Segment Profit ($Mil.) Q4 Year-over-Year Commentary 2010 2009 % Net sales $21.3 $23.5 (9.2%) Cost of goods sold $8.0 $9.4 (15.4%) Gross profit $13.4 $14.1 (5.0%) 62.7% 59.9% SG&A (excl. depr. & amort.) $10.2 $10.0 1.3% Depreciation & amortization $0.7 $0.9 (17.0%) Asset impairment charges $0.0 $11.6 (100.0%) Operating income/(loss) $2.5 ($8.5) Depreciation & amortization 2 $1.0 $1.2 Adjusted EBITDA $3.5 ($7.3) Adjusted EBITDA excl. charges 1 $3.5 $4.4 16.5% 18.6% (1) Excludes Asset impairment charge (2) $0.3M and $0.3M of developed technology amortization included in COGS for Q4FY10 and Q4FY09, respectively Three Months Ended March 31

Q4 review: Retail ("RSG") Revenue increased 26% primarily due to higher hardware sales Gross margin expanded as a result of improved hardware pricing and mix SG&A, excl. depr. & amort., decreased $0.4M - - bad debt expense decreased $0.5M RSG Segment Profit ($Mil.) Q4 Year-over-Year Commentary

Q4 review: Technology ("TSG") Revenue declined due to weak demand Gross margin contracted in quarter due to lower rebate margins and change in vendor pricing programs SG&A, excl. depr. & amort., decreased by $1.4M Acquisition-related intangible amortization decreased by $3.2M due to fully amortizing certain intangible assets in Q1 Adjusted EBITDA, excluding charges, decreased $5.2M due to lower revenue and gross margin pressure TSG Segment Profit ($Mil.) Q4 Year-over-Year Commentary

Q4 review: Corporate Cost of goods sold related to miscellaneous product pricing adjustments decreased $1.7M SG&A, excl. depr. & amort., increased $0.2M due primarily to $0.3M stock comp credit in FY09 compared to $0.3M expense in FY10 Adjusted EBITDA, excluding charges, increased $1.5M Corporate Segment ($Mil.) Q4 Year-over-Year Commentary 2010 2009 $ Net sales $0.0 $0.0 $0.0 Cost of goods sold $0.0 $1.7 ($1.7) Gross profit $0.0 ($1.7) $1.7 SG&A (excl. depr. & amort.) $7.9 $7.7 $0.2 Depreciation & amortization $1.3 $1.2 $0.1 Asset impairment charges $0.0 $0.0 $0.0 Restructuring charge $0.1 $3.9 ($3.8) Operating loss ($9.2) ($14.5) $5.3 Depreciation & amortization $1.3 $1.2 $0.1 Adjusted EBITDA ($7.9) ($13.3) $5.4 Adjusted EBITDA excl. charges 1 ($7.9) ($9.4) $1.5 (1) Excludes Asset impairment and Restructuring charges Three Months Ended March 31

FY10 review: consolidated results Revenue declined 12% HSG declined 17% RSG declined 9% TSG declined 12% Gross profit decreased $34.6M on declining revenue and margin pressure SG&A, excl. depr. & amort., decreased $21.7M due primarily to previously executed cost savings and lower variable compensation Other expense/(income) includes: Gain from Reserve Fund distribution of $2.5M compared with $3.0M loss in FY09 Income from CTS litigation of $2.3M $0.8M gain on investments held for non- qualified benefit plan obligations compared with $4.6M loss in FY09 Income tax benefit increased $4.1M due to benefit of loss carry-back FY10 Year-over-Year Commentary Statement of Operations ($Mil., except per share)

FY10 review: summary balance sheet performance Cash at year-end was $65.5M - an increase of $29.3 million from 3/31/09 Days sales outstanding improved from 88 days at 3/31/09 to 69 days at 3/31/10 Capital expenditures were $3.6M for Q4 and $13.3M for FY10- majority of capital expenditures relate to implementation of new Oracle enterprise software and capitalized Guest360 development costs Commentary Working Capital ($Mil.) Working capital is (A/R + Inventory) less (A/P + IGF flooring + Deferred Revenue) Quarterly revenue annualized at historical quarterly skew Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Receivables 151.9 105 125.2 182.6 104.8 Working capital as % of sales 0.091 0.051 0.05 0.098 0.041 Inventory 27.2 20.4 22 25.1 14.4

Quarterly revenue HSG Revenue ($Mil.) TSG Revenue ($Mil.) Jun '08 Sep '08 Dec '08 Mar '09 Jun '09 Sep '09 Dec '09 Mar '10 Organic 38 29.3 34.8 20 24.4 24 37.7 25.3 RSG Revenue ($Mil.) AGYS Consolidated Revenue ($Mil.) Jun '08 Sep '08 Dec '08 Mar '09 Jun '09 Sep '09 Dec '09 Mar '10 Organic 25 23 28 24 16 23 23 21 Jun '08 Sep '08 Dec '08 Mar '09 Jun '09 Sep '09 Dec '09 Mar '10 Organic 117 119 161 112 90 109 159 89 Jun '08 Sep '08 Dec '08 Mar '09 Jun '09 Sep '09 Dec '09 Mar '10 Organic 180 171 224 155 130 156 219 136

FY11 positioning & guidance Well Positioned for FY11 Company eliminated significant costs in FY09 and FY10 Strong financial flexibility with over $65M in cash on hand and debt-free balance sheet Strategic investment in Guest360TM, HSG's new property management software, will start to provide new growth opportunities in late FY11 Implementation of Oracle ERP implementation in fiscal 2010 provides opportunity to further reduce overhead costs and increase efficiencies Outlook Demand environment remains uncertain Expect to generate $10 to $15 million of cash in FY11 Depreciation and amortization is forecast to be $12.5M Capital expenditures are expected to be approximately $10M of which $3M relates to capitalization of Guest360TM development costs and $2.0M relates to Oracle ERP implementation

Agilysys, Inc. (Nasdaq: AGYS) Fiscal 2010 Unaudited Fourth Quarter & Full-Year Results June 3, 2010

Reconciliation of net income/(loss) to adjusted EBITDA