Agilysys (AGYS) 8-K Agilysys Reports Unaudited Fiscal 2007 Fourth-Quarter and Full-Year Results Reflecting Divestiture of Distribution Business

Exhibit 99.1

FOR IMMEDIATE RELEASE

Agilysys Reports Unaudited Fiscal 2007 Fourth-Quarter and Full-Year Results
Reflecting Divestiture of Distribution Business

• Announces Acquisition of Innovativ, Largest U.S. Commercial Reseller of Sun Products

• Company to be an $800 Million Solution Provider on a Pro Forma Basis

• Fourth-Quarter Sales of $118 Million from Continuing Operations with Gross Margin of 27%

BOCA RATON, Fla. – May 25, 2007 – Agilysys, Inc. (Nasdaq: AGYS), a leading provider of IT solutions, today announced fiscal 2007 unaudited fourth-quarter and full-year results for the periods ended March 31, 2007.

Strategic Transformation

As previously announced, on March 31, 2007 Agilysys closed the sale of its KeyLink Systems Distribution Business assets to Arrow Electronics, Inc. for $485 million in cash, subject to a working capital adjustment, to focus exclusively on growing its IT solutions business. For purposes of financial reporting, this business is now treated as discontinued operations in the accompanying unaudited condensed financial statements.

Over the last six months, in addition to the divestiture of KeyLink Systems, Agilysys has announced three acquisitions. These include Visual One Systems, a leading developer and marketer of Microsoft® Windows®-based software for the hospitality industry; Stack Computer, a premier technology integrator with a strong focus in high availability storage infrastructure solutions; and, as announced in a separate news release today, an agreement to acquire Innovativ Systems Design, Inc., the largest U.S. commercial reseller of Sun Microsystems servers and storage products.

Arthur Rhein, chairman, president and chief executive officer of Agilysys, said, “I am extremely pleased with our progress. We have completed our transformation to a business focused solely on selling IT solutions direct to end customers. In addition, we continue to execute our strategic plan, including accelerating growth through acquisitions as a solution provider.”

Acquisition of Innovativ

Agilysys announced today that it has entered a definitive agreement to acquire Innovativ Systems Design. Innovativ is an integrator and value-added reseller of servers, enterprise storage management products and professional services, and has a strong financial services and telecommunications industry presence. This acquisition will further diversify Agilysys’ supplier mix, establish new markets and broaden Agilysys’ customer base. Through the addition of Sun, the acquisition will also expand Agilysys’ offerings to now include four of the most pervasive computer technology suppliers: EMC, HP, IBM and Sun. Over the trailing 12 months ended March 31, 2007, Innovativ generated revenues of approximately $256 million and earnings before interest, taxes, depreciation and amortization (“EBITDA”) in excess of $20 million.

Acquisition of Stack Computer

On April 2, 2007, Agilysys announced the acquisition of Stack Computer, a privately held technology integrator with a strong focus in EMC-based high availability storage infrastructure solutions. Stack’s customers include leading corporations in the financial services, healthcare and manufacturing industries. Strategically, the acquisition provides Agilysys with product solutions and services offerings that significantly enhance its storage and professional services businesses. Stack has annual revenues of

approximately $55 million. Stack’s product category sales mix consists of approximately 62% hardware, 27% software and 11% services.

Rhein added, “I believe our financial performance, over the last six months in particular, given the level of activity around the divestiture and multiple acquisitions, is quite impressive. This bodes well for the future as we narrow our focus on growing the business and continue to provide increased shareholder value.”

Continuing Operations

The descriptions for fourth-quarter and full-year results reflect financial information for Agilysys continuing operations.

Fiscal 2007 Fourth Quarter: Results from Continuing Operations

Sales for the fourth quarter increased 3% to $118.1 million, compared with $115.1 million in the fourth quarter of fiscal 2006.

Fiscal 2007 fourth-quarter sales of hardware products were $87.7 million. Software sales were $7.8 million. Services sales were $22.6 million.

Gross margin from continuing operations for the fourth quarter increased to 27.0% of sales from 22.3% for the fourth quarter of fiscal 2006.

Selling, general and administrative (SG&A) expenses from continuing operations for the fourth quarter of fiscal 2007 were $37.4 million, or 31.7% of sales, compared with $34.4 million, or 29.9% of sales in the same quarter a year ago. Fiscal 2007 fourth-quarter SG&A expenses include approximately $900,000 related to the company’s acquisition of Visual One Systems as well as legacy overhead costs associated with discontinued operations. Agilysys will realize cost savings in fiscal 2008 based on restructuring of the business.

Loss from continuing operations for the fourth quarter improved $1.0 million to $6.6 million, or 21 cents per share, compared with $7.6 million, or 25 cents per share in the same quarter a year ago.

Fiscal 2007 Full Year: Results from Continuing Operations

For the fiscal year ended March 31, 2007, sales were $474.6 million, an increase of 1.2% over the $469.0 million in sales reported for the prior year.

Full-year sales of hardware products were $348.5 million. Software sales were $33.3 million. Services sales were $92.8 million.

Gross margin was 25.4% of sales, up 2.6 percentage points, from 22.8% in fiscal 2006. SG&A expenses increased to 28.1% of sales, from 26.2% in the prior year. SG&A expenses include legacy overhead costs associated with discontinued operations.

Loss from continuing operations for the fiscal year improved $9.1 million to $11.6 million, or $0.38 per share, compared with a net loss from continuing operations in the previous year of $20.7 million, or $0.69 per share.

Restructuring Credit

Agilysys reported a net $2.5 million restructuring credit for fiscal 2007 fourth-quarter and full-year results. This included a $4.9 million credit resulting from the reversal of previous charge related to 2003 facility exit costs. The credit was partially offset by a restructuring charge of $2.4 million for severance and facility exit costs.

Business Outlook

In January 2007, upon announcing its intention to focus exclusively on selling IT solutions to corporate and public-sector customers, Agilysys established several long-term financial goals, including:

• Grow sales from approximately $500 million to $1 billion within two years and to $1.5 billion in three years;

• Target gross margins in excess of 20% and EBITDA margins of 6% within three years;

• While in the near term return on invested capital will be diluted due to acquisitions and legacy costs, the company continues to target long-term return on capital of 15%.

Rhein said, “Following the close of Innovativ and including the recent acquisition of Stack Computer, Agilysys will have pro forma revenues in excess of $800 million, well ahead of our initial expectations.”

For fiscal 2008, the company currently estimates sales to be in the range of $770 million to $790 million. Full-year gross margin is expected to be approximately 23% of sales, with EBITDA margins of approximately 2% to 3% of sales.

Selling, general and administrative expenses are anticipated to be in the range of $170 million to $173 million, including stock option expense of $4.8 million and approximately $6 million in new investments in software development and additional customer-facing employees. Interest income is expected to be approximately $17 million and the company anticipates an effective tax rate of approximately 41.5% for the fiscal year. Based on an estimated 32 million shares outstanding, EPS is expected to be in the range of 40 to 50 cents per share.

Agilysys also expects fiscal 2008 capital expenditures of approximately $5 million and depreciation and amortization of approximately $12 million, subject to finalizing FAS 142 intangible asset analysis on Visual One, Stack and Innovativ.

Conference Call Information

A conference call to discuss the quarterly and full-year results is scheduled for 11 a.m. ET on Friday, May 25, 2007. The conference call will be broadcast live over the Internet and a replay will be accessible on the investor relations page of the company’s Web site:www.agilysys.com. A taped replay of the conference call will be available at 2 p.m. ET on Friday, May 25, 2007, through midnight ET on Friday, June 8, 2007, accessible by dialing (877) 344-7529 or (412) 317-0088 (passcode #405938).

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, sales volume, margin improvements, cost savings, capital expenditures, depreciation and amortization, and new product introductions.

Other associated risks include geographic factors, political and economic risks, the actions of Agilysys competitors, changes in economic or industry conditions or in the markets served by Agilysys, and the ability to appropriately integrate and derive performance from acquisitions, strategic alliances, and joint ventures.

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 Securities and Exchange Commission, including, but not limited to, its

Annual Report on Form 10-K for the fiscal year ended March 31, 2006. Interested persons can obtain it free at the Securities and Exchange Commission’s Web site, www.sec.gov.

About Agilysys

Agilysys is a leading provider of innovative IT solutions to corporate and public-sector customers, with special expertise in select vertical 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, and business continuity; and provides industry-specific software, services and expertise to the retail and hospitality markets. Headquartered in Boca Raton, Fla., Agilysys operates extensively throughout North America, with additional sales offices in the United Kingdom and China.

# # #

Analysts/Investor Contact:	Martin Ellis Executive Vice President, Treasurer and Chief Financial Officer Agilysys, Inc. 561-999-8780 martin.ellis@agilysys.com
Media Contact:	Julie Young
	Director, Corporate Communications
	Agilysys, Inc.
	440-519-8160
	julie.young@agilysys.com

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

	Three Months Ended March 31
(In thousands, except share and per share data)	2007			2006
Net sales	$	118,093		$	115,092
Cost of goods sold		86,162			89,410
Gross margin		31,931			25,682
Operating expenses
Selling, general and administrative expenses		37,431			34,413
Restructuring (credits) charges		(2,576	)		216
Operating loss		(2,924	)		(8,947	)
Other (income) expense
Other expense (income), net		4,803			(753	)
Interest (income) expense, net		(659	)		386
Loss on redemption of Mandatorily Redeemable Convertible Trust Preferred Securities		—			—
Loss before income taxes		(7,068	)		(8,580	)
Provision for income taxes		(517	)		(981	)
Distributions on Mandatorily Redeemable Convertible Trust Preferred Securities, net of taxes		—			—
Loss from continuing operations		(6,551	)		(7,599	)
Discontinued operations
Income from operations of discontinued components, net of taxes		11,311			13,579
Gain on disposal of discontinued component, net of taxes		195,952			—
Income from discontinued operations		207,263			13,579
Net income	$	200,712		$	5,980
Earnings per share- basic and diluted
Loss from continuing operations	$	(0.21	)	$	(0.25	)
Income from discontinued operations		6.67			0.45
Net income	$	6.46		$	0.20
Weighted average shares outstanding- basic and diluted		31,052,584			30,357,151

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

	Year Ended March 31
(In thousands, except share and per share data)	2007			2006
Net sales	$	474,570		$	468,984
Cost of goods sold		353,863			362,015
Gross margin		120,707			106,969
Operating expenses
Selling, general and administrative expenses		133,185			123,058
Restructuring (credits) charges		(2,531	)		5,337
Operating loss		(9,947	)		(21,426	)
Other (income) expense
Other expense (income), net		6,025			(1,094	)
Interest (income) expense, net		(2,402	)		1,618
Loss on redemption of Mandatorily Redeemable Convertible Trust Preferred Securities		—			4,811
Loss before income taxes		(13,570	)		(26,761	)
Provision for income taxes		(1,935	)		(6,966	)
Distributions on Mandatorily Redeemable Convertible Trust Preferred Securities, net of taxes		—			949
Loss from continuing operations		(11,635	)		(20,744	)
Discontinued operations
Income from operations of discontinued components, net of taxes		48,761			48,858
Gain on disposal of discontinued component, net of taxes		195,729			—
Income from discontinued operations		244,490			48,858
Net income	$	232,855		$	28,114
Earnings per share- basic and diluted
Loss from continuing operations	$	(0.38	)	$	(0.69	)
Income from discontinued operations		7.97			1.63
Net income	$	7.59		$	0.94
Weighted average shares outstanding- basic and diluted		30,683,766			29,935,200

AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)

	March 31
(In thousands)	2007		2006
ASSETS
Current assets
Cash and cash equivalents	$	604,667	$	147,850
Accounts receivable, net		116,735		111,903
Inventory, net		9,922		10,045
Deferred income taxes		3,092		6,019
Prepaid expenses and other current assets		3,494		2,178
Assets of discontinued operations — current		206		205,077
Total current assets		738,116		483,072
Goodwill		93,197		82,580
Intangible assets, net		8,716		11,854
Investments in affiliated companies		11,231		18,821
Other non-current assets		30,701		25,736
Property and equipment, net		17,279		16,351
Assets of discontinued operations — noncurrent		—		123,925
Total assets	$	899,240	$	762,339
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	84,286	$	54,152
Income taxes payable		134,607		3,690
Accrued liabilities		32,189		36,466
Current portion of long-term debt		116		59,587
Liabilities of discontinued operations — current		162		186,297
Total current liabilities		251,360		340,192
Other long-term liabilities		20,813		20,755
Liabilities of discontinued operations — noncurrent		223		16,216
Shareholders’ equity		626,844		385,176
Total liabilities and shareholders’ equity	$	899,240	$	762,339

AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)

	Year Ended March 31
(In thousands)	2007			2006
Operating activities:
Net income	$	232,855		$	28,114
Less: Income from discontinued operations		(244,490	)		(48,858	)
Loss from continuing operations		(11,635	)		(20,744	)
Adjustments to reconcile loss from continuing operations to net cash provided by (used for) operating activities (net of effects from business acquisitions):
Investment impairment		5,892			—
Gain on redemption of investment by affiliated company		—			(622	)
Loss on redemption of Preferred Securities		—			4,811
Loss on disposal of plant and equipment		1,501			302
Depreciation		1,565			1,822
Amortization		6,928			7,572
Deferred income taxes		661			(3,469	)
Stock based compensation		3,619			—
Excess tax benefit from exercise of stock options		(1,854	)		—
Changes in working capital:
Accounts receivable		(3,939	)		(15,344	)
Inventory		122			1,165
Accounts payable		30,136			(8,873	)
Accrued liabilities		124,705			3,479
Other working capital		(1,316	)		4,752
Other		(2,908	)		(435	)
Total adjustments		165,112			(4,840	)
Net cash provided by (used for) operating activities		153,477			(25,584	)
Investing activities:
Proceeds from sale of investment in affiliated company		—			788
Purchase of marketable securities		—			(6,822	)
Proceeds fom sale of business		485,000			—
Acquisition of business, net of cash acquired		(10,613	)		(27,964	)
Purchases of property and equipment		(6,250	)		(3,252	)
Proceeds from escrow settlement		423			—
Net cash provided by (used for) investing activities		468,560			(37,250	)
Financing activities:
Redemption of Preferred Securities		—			(107,536	)
Principal payment under long-term obligations		(59,567	)		(286	)
Issuance of common shares		10,107			5,442
Excess tax benefit from exercise of stock options		1,854			—
Dividends paid		(3,675	)		(3,608	)
Net cash used for financing		(51,281	)		(105,988	)
Effect of exchange rate changes on cash		(97	)		367
Cash flows provided by (used for) continuing operations		570,659			(168,455	)
Cash flows (used for) provided by discontinued operations		(113,842	)		74,425
Net increase (decrease) in cash		456,817			(94,030	)
Cash at beginning of year		147,850			241,880
Cash at end of year	$	604,667		$	147,850