Pegasus Solutions Receives Gold Alexander Hamilton Award
Pegasus Solutions, Inc. (Nasdaq: PEGS)
today announced it has won the “Under $500 Million Gold” Alexander Hamilton
Award for Financial Risk Management from Treasury & Risk Management magazine.
Published by Wicks Business Information, Treasury & Risk Management magazine
is a leading magazine for financial executives.
Dallas-based Pegasus
Solutions is a leading provider of hotel industry transaction processing
solutions and electronic commerce services.
Pegasus Solutions` Vice President and Treasurer Larry Wearden accepted the
top award designated for companies with less than $500 million in revenues in
the Financial Risk Management category on behalf of Pegasus at Treasury & Risk
Management`s annual Best Practices Summit. “It`s an honor to win this
prestigious award and to be recognized for our work in foreign currency
management, Wearden said. “With the global nature of our business, it`s of
utmost importance to maintain a high degree of financial stability despite
currency fluctuations in the world markets.”
After acquiring a much larger global company in early 2000, Pegasus
Solutions became more exposed to foreign currency fluctuations as its new
operations grew to include 23 offices in 16 countries. Compounding the
exposure was the successful international growth of its travel agency
commission processing business, causing Pegasus` foreign currency hotel
commission payments to travel agents to rise 50 percent in 2000 to $48
million.
To manage that exposure, Pegasus` treasury department introduced a bidding
process for its foreign exchange activity banks, which saved the company more
than $55,000 last year and an estimated $120,000 in 2001. The company also
secured trading credit lines, allowing for same-day foreign exchange
settlement.
“We mitigated multiple transaction costs by consolidating euro deals, and
we improved our interest return on idle cash last year,” Wearden said. “In
addition, our currency forward and swap foreign exchange contracts reduced our
exposure to currency fluctuations.”
Pegasus maintains bank accounts in 38 countries, and its customers include
both hotels and travel agents around the world. “Since the exchange rate
between the American dollar and other currencies changes constantly, we have
to protect our assets so that if one currency value drops rapidly, we will not
suffer a significant financial impact,” Wearden said. “We`ve been able to
reduce our risk while maintaining competitive foreign exchange rates for both
our travel agency and hotel customers worldwide. In particular, by hedging our
exposure to currency exchange risk, we`ve been able to substantially eliminate
the risk in currency fluctuations for our travel agency customers, which are
located in 112 countries and receive commission payments from more than 32,000
hotels around the world.”
Pegasus` popular Commission Processing service collects commission
payments in various currencies from hotels all over the world, then
consolidates and exchanges the currencies so that the travel agent receives
one commission check in their desired currency. “As a result, the agent
doesn`t have to face the expensive challenge of taking hundreds or even
thousands of individual commission payment checks in multiple currencies to
their bank, and paying high exchange rates on each conversion. Nor do they
need to worry about their commission payments losing value through negative
currency valuation swings,” Wearden said.
Each year for the past six years, Treasury & Risk Management`s Alexander
Hamilton Awards program has recognized outstanding contributions to
shareholder value by chief financial officers, treasurers and other senior
financial managers in the categories of cash management, corporate finance,
credit risk management, financial risk management, insurance, investor
relations, retirement plan administration and technology. Finance or treasury
departments of organizations with annual revenues in excess of $50 million are
eligible for the awards. Submissions from mid-sized entrants (those entities
with revenues of less than $500 million) are judged separately from those of
larger organizations.
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