Pete Gaffney, CEO, Integral Systems

VIA SATELLITE: Is Integral Systems still up for sale or are you looking at other alternatives now that you have altered the makeup of the board?

GAFFNEY: We spent a good part of last year exploring those, primarily the sale of the company. We went through a process with our investment bankers, and we ran an auction to sell the company. We had a lot of interested buyers, but during that time the stock price went up about 50 percent on the speculation of a sale. That run up reduced the number of potential buyers. We ended up with three strong candidates, and then just for various reasons they all dropped out by the end of October. So we regrouped with our banker and decided to look at other strategic alternatives besides the sale of the company — alternatives such as a merger of equals, reverse mergers. Our largest shareholder suggested a very large stock buyback programs, so we are considering all those things, including the sale of the company.

During that entire period our revenue and earnings kept climbing, even though it was a bit of distraction. We set every financial record last year — revenues, operating income, earnings per share. We knocked all the records out of the park. I think that’s a real testament to the loyalty of the employees and the job they are doing. It’s unsettling to be going through that process of selling yourself, but for everybody to stay focus and really work is a good testament to the employees.

VIA SATELLITE: Are all of these issues in the past?

GAFFNEY: I believe they are. I believe we have addressed just about all of the shareholder concerns.

VIA SATELLITE: Why are you still looking at strategic alternatives ?

GAFFNEY: Our shareholders continue to believe that the stock is undervalued and we started on that process, so I think we ought to continue to find what is the best course of action for the company and our shareholders.

VIA SATELLITE: Which is the best alternative for Integral Systems?

GAFFNEY: I think the best way to go would be a scenario where the company continues to do business the way it has been doing business, whether that is part of a larger company or as a standalone or where we make acquisitions, which is a possible scenario. I think that would be the best thing for the company and the shareholders because we have a real viable business plan and a way of doing business that is unique in our space in the industry, and it’s very valuable and has been proven to be successful. I think it would be good for the industry for our way of doing business not to be diluted by an acquirer. I think that is where the most value would come from for our shareholders

VIA SATELLITE: Is Integral Systems still up for sale or are you looking at other alternatives now that you have altered the makeup of the board?

VIA SATELLITE: Are all of these issues in the past?

VIA SATELLITE: Why are you still looking at strategic alternatives ?

VIA SATELLITE: Which is the best alternative for Integral Systems?

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