Algorithmics Secures Refinancing, Dr. Ron Dembo Named Founding Chairman

TORONTO (March 2, 2004) – Algorithmics Incorporated, an international leader in enterprise risk management, today announced it has obtained long-term refinancing from its existing investors including Morgan Stanley, Commerzbank, American International Group (AIG), CIBC Capital Partners, Royal Bank of Canada, and Vengrowth Investment Fund. The move comes in recognition of the company’s solid performance in fiscal 2004, which included sixteen new clients and the introduction of the most advanced version of its industry leading Algo Suite of enterprise risk management solutions.

"Algorithmics is in an excellent market position," said Don Callahan, Managing Director, Morgan Stanley. "Over the past year, the company has improved its revenues and profitability, built its global client base and solidified its position as the world leader in market, credit and collateral enterprise risk management software for tier-one financial service firms. We are confident that Algorithmics will continue to be a leading innovator in the enterprise risk management industry, and as clients and investors, we look forward to the company realizing its potential."

Algorithmics founder and CEO, Dr. Ron Dembo today also announced that after 15 years at the company’s helm he is stepping away from day-to-day operations to take on a new role as Founding Chairman. "Operationally, Algorithmics is now on a strong footing, with solid earnings last year, a strengthened management team and a new capital structure. It is an opportune time for me to redirect my focus to support the company’s thought leadership position within the field of enterprise risk management," Dr. Dembo said. "It is my intention to concentrate on the company’s long-term vision and continue to play an active role as a member of Algorithmics’ Board of Directors."

In his new role, Dr. Dembo will work to promote the company’s philosophy and approach to risk management globally. He will also identify customer and industry opportunities in the run-up to the Basel II Accord, and identify, explore and promote enterprise risk management solutions in new markets.

Dr. Michael Zerbs has been appointed acting CEO and will drive Algorithmics’ business growth and profitability. "This vote of confidence in our proven products, services and business model gives us a solid platform to further advance our market share and the value we deliver to our clients," said Dr. Zerbs.

"The Board of Directors is very confident in the company’s leadership and significant prospects" said Barry Reiter, Chairman of the Board of Directors of Algorithmics, "and is looking forward to working closely with Algorithmics’ management team to further advance the company’s industry position."

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