MICROS Reports Fiscal 2014 Results

RECORD QUARTERLY AND FISCAL YEAR REVENUE, NET INCOME AND EPS

Aug 21, 2014, 16:02 ET from MICROS Systems, Inc.

COLUMBIA, Md., Aug. 21, 2014 /PRNewswire/ -- MICROS Systems, Inc. (Nasdaq: MCRS), a leading supplier of information systems to the food & beverage, hotel and retail industries, today announced the results for its fiscal 2014 fourth quarter and year ending June 30, 2014. 

FINANCIAL HIGHLIGHTS                                                                        

  • Revenue for the quarter was $396.1 million, an increase of $67.5 million, or 20.6%, versus the year ago period.
  • Revenue for the fiscal year was $1.405 billion, an increase of $137.3 million, or 10.8%, versus the year ago period.
  • GAAP net income for the quarter was $56.0 million, an increase of $14.0 million, or 33.4%, versus the year ago period.
  • GAAP net income for the fiscal year was $182.0 million, an increase of $10.6 million, or 6.2%, versus the year ago period.
  • GAAP diluted earnings per share (EPS) for the quarter was $0.74 per share, an increase of $0.21, or 39.6%, versus the year ago period.
  • GAAP diluted EPS for the fiscal year was $2.37, an increase of $0.25, or 11.8%, versus the year ago period.
  • Non-GAAP financial results, excluding the effect of charges for stock options, Oracle transaction related expenses, a litigation charge and accrued interest, amortization of Torex intangibles, restructuring of Torex, and gain on the sale and settlement of auction rate securities, are as follows:
    • Non-GAAP net income for the quarter was $63.5 million, an increase of $14.6 million, or 29.9%, versus the year ago period.
    • Non-GAAP net income for the fiscal year was $205.3 million, an increase of $13.4 million, or 7.0%, versus the year ago period.
    • Non-GAAP diluted EPS for the quarter was $0.84, an increase of $0.22, or 35.5%, versus the year ago period.
    • Non-GAAP diluted EPS for the fiscal year was $2.67, an increase of $0.29, or 12.2%, versus the year ago period.

MICROS's quarterly and fiscal year revenue,  net income (GAAP and Non-GAAP) and EPS (GAAP and Non-GAAP) were Company records.

MICROS will not be hosting a conference call in conjunction with these results.  For more information, or to access the financial results, please visit www.micros.com/InvestorRelations/

MICROS's stock is traded through NASDAQ under the symbol MCRS.  Some of the statements contained herein not based on historic facts are forward-looking statements that involve risks and uncertainties  MICROS is subject to, among others, the following uncertainties and risks: product demand and market acceptance; impact of competitive products and pricing on margins; product development delays and technological difficulties; controlling expenses as MICROS continues to expand; the ability to obtain on acceptable terms the right to incorporate in MICROS's products and services technology patented by others; the risk that there are actual or perceived security vulnerabilities in MICROS's products; adverse results in legal disputes resulting in liabilities that exceed reserves; unanticipated tax liabilities; the effects of terrorist activity and armed conflict; the effects of major environmental disasters; weakening in general economic conditions that adversely affect demand for computer hardware or software; and currency fluctuations.

For further information regarding risks and uncertainties associated with MICROS's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business and Investment Risks" sections of MICROS's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting MICROS's investor relations department at 443-285-8059 or at MICROS's website at http://www.micros.com/InvestorRelations/

Contact: Peter J. Rogers, Jr. Executive Vice President, Investor Relations 443-285-8059 progers@micros.com

 

 

MICROS SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - in thousands, except per share amounts)

Three Months Ended

Fiscal Year Ended

June 30,

June 30,

2014

2013

2014

2013

Revenue:

Hardware

$    103,271

$         74,125

$         319,520

$            269,651

Software

48,155

36,688

166,516

143,034

Service

244,719

217,796

919,361

855,400

Total revenue

396,145

328,609

1,405,397

1,268,085

Cost of sales:

Hardware

64,957

47,382

204,351

175,248

Software

5,233

5,743

24,752

22,178

Service

115,930

102,365

439,816

406,429

Stock option expense

108

94

374

338

Total cost of sales

186,228

155,584

669,293

604,193

Gross margin

209,917

173,025

736,104

663,892

Selling, general and administrative expenses

96,582

86,182

347,411

317,035

Research and development expenses

20,712

19,101

79,997

70,962

Depreciation and amortization

5,026

4,439

18,685

16,770

Stock option expense

5,554

4,742

21,683

20,764

Oracle transaction related expenses

2,050

-

2,050

-

Torex amortization expense

809

1,386

3,401

5,803

Torex restructuring charge

1,251

3,095

1,467

5,548

Litigation charge

0

0

2,800

0

Total operating expenses

131,984

118,945

477,494

436,882

Income from operations

77,933

54,080

258,610

227,010

Non-operating income (expense):

Interest income, net

957

1,034

3,501

4,258

Interest expense - litigation charge

-

-

(900)

0

Gain on settlement/sale - auction rate securities

0

0

338

3,494

Other non-operating income (expense), net

373

(637)

(173)

(957)

Total non-operating income , net

1,330

397

2,766

6,795

Income before taxes

79,263

54,477

261,376

233,805

Income tax provision 

23,116

12,332

79,197

61,958

Net income

56,147

42,145

182,179

171,847

Less:  Net income attributable to noncontrolling interest

(113)

(140)

(165)

(429)

Net Income attributable to MICROS Systems, Inc. (GAAP)

$      56,034

$         42,005

$         182,014

$            171,418

Net Income per diluted common share attributable to MICROS Systems, Inc.

$           0.74

$             0.53

$                2.37

$                   2.12

Weighted-average number of shares outstanding - diluted

75,986

79,192

76,803

80,772

Reconciliation of GAAP Net Income and EPS attributable to MICROS Systems, Inc. to Non-GAAP Net Income and EPS attributable to MICROS Systems, Inc.

Net Income attributable to MICROS Systems, Inc.

$      56,034

$         42,005

$         182,014

$            171,418

Add back:

Stock option expense

    Selling, general and administrative expenses

5,095

4,358

19,652

19,124

    Research and development expenses

459

384

2,031

1,640

    Cost of sales

108

94

374

338

5,662

4,836

22,057

21,102

Oracle transaction related expenses

2,050

-

2,050

-

Litigation charge, including accrued interest expense

-

-

3,700

0

Torex amortization expense

809

1,386

3,401

5,803

Torex restructuring charge

1,251

3,095

1,467

5,548

Gain on settlement/sale - auction rate securities

0

0

(338)

(3,494)

Total add back

9,772

9,317

32,337

28,959

Subtract tax effect on:

Oracle transaction related expenses

266

-

266

-

Stock option expense

1,697

1,495

6,912

6,721

Litigation charge, including accrued interest expense

-

-

1,410

0

Torex amortization expense

23

47

90

224

Torex restructuring charge

297

871

347

1,512

Non-GAAP Net Income attributable to MICROS Systems, Inc.

$      63,523

$         48,909

$         205,326

$            191,920

Non-GAAP Net Income per Diluted Common Share attributable to MICROS Systems, Inc.

$           0.84

$             0.62

$                2.67

$                   2.38

We believe the inclusion of the above non-GAAP measure will be useful to investors because it will enhance the comparability of our

current period results to prior periods' results without comparable charges.  We also believe inclusion of this measure will enhance

comparability of our results to results of our competitors and to the analysts' forecasts because the analysts typically forecast

excluding the effect of share-based payment charge and above one time charges, the non-GAAP measure.  In addition, our

management uses this measure to evaluate our operating performance and compare our results to our competitors.  Management also

uses this measure as a metric to measure performance under our executive compensation program.  

The Company notes that non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. 

Instead, they are based on subjective determinations by management designed to supplement our GAAP financial measures.  They are

subject to a number of important limitations and should be considered only in conjunction with our consolidated financial statements

prepared in accordance with GAAP.  Among the limitations on the use of the non-GAAP measure are the following:

-   The exclusion of non-GAAP items can have a significant impact on reported GAAP net income and diluted net income per share.

-   Other companies may calculate non-GAAP net income and non-GAAP net income per share differently than MICROS does, limiting

    the usefulness of those measures for comparative purposes.

 

 

MICROS SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited - in thousands)

June 30, 2014

June 30, 2013

ASSETS

Current assets:

     Cash and cash equivalents and short-term investments

$         699,808

$         634,069

     Accounts receivable, net

287,616

228,455

     Inventory

57,583

49,273

    Income taxes receivable

1,619

12,771

     Deferred income taxes

13,715

15,022

     Prepaid expenses and other current assets

46,129

44,648

           Total current assets

1,106,470

984,238

Property, plant and equipment, net

57,966

44,127

Deferred income taxes, non-current

44,661

50,186

Goodwill

458,820

432,950

Intangible assets, net

35,140

37,754

Purchased and internally developed software costs, net

40,669

32,543

Other assets

8,918

7,240

Total Assets

$      1,752,644

$     1,589,038

LIABILITIES AND EQUITY

Current liabilities:

     Bank lines of credit

$                     -

$             1,757

     Accounts payable

78,231

73,099

     Accrued expenses and other current liabilities

180,973

155,491

     Income taxes payable

8,198

11,002

     Deferred revenue

193,897

177,236

         Total current liabilities

461,299

418,585

Income taxes payable, non-current

45,429

35,019

Deferred income taxes, non-current

543

1,157

Other non-current liabilities

15,915

16,007

         Total liabilities

523,186

470,768

Commitments and contingencies

Equity:

  MICROS Systems, Inc. stockholders' equity:

     Common stock

1,871

1,918

     Retained earnings

1,203,030

1,136,763

     Accumulated other comprehensive income (loss)

21,298

(23,625)

          Total MICROS Systems, Inc. stockholders' equity

1,226,199

1,115,056

  Noncontrolling interest

3,259

3,214

Total Equity

1,229,458

1,118,270

Total Liabilities and Equity

$      1,752,644

$     1,589,038

 

 

MICROS SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - in thousands)

 Fiscal Year Ended 

 June 30, 

2014

2013

Cash flows from operating activities:

Net income

$        182,179

$        171,847

Adjustments to reconcile net income to net cash provided by operating activities:

    Depreciation and amortization

22,086

22,573

    Share-based compensation

22,057

21,102

    Amortization of capitalized software

6,483

5,208

    Provision for losses on accounts receivable

1,540

3,563

    Litigation reserve, including interest expense

-

-

    Gain on sales of auction rate securities

-

(4,094)

    Other-than-temporary impairment losses on investments, net

-

600

    Provision for (benefit from) deferred income taxes

7,310

(2,702)

    Net (gain) loss on disposal of property, plant and equipment

28

-

    Other

106

-

    Changes in operating assets and liabilities (net of impact of acquisitions):

        (Increase) decrease in accounts receivable

(53,237)

2,430

        Increase in inventory

(6,982)

(5,302)

        Decrease (increase) in prepaid expenses and other assets

1,191

(7,833)

        Increase in accounts payable

3,198

3,163

        Increase (decrease) in accrued expenses and other current liabilities

24,061

(13,682)

        Increase (decrease) in income taxes assets and liabilities

17,951

(2,587)

        Increase in deferred revenue

11,490

9,239

Net cash flows provided by operating activities

239,461

203,525

Cash flows from investing activities:

Proceeds from maturities of investments

187,636

56,620

Proceeds from sales of auction rate securities

-

42,119

Purchases of investments

(110,984)

(186,371)

Purchases of property, plant and equipment

(31,627)

(23,282)

Internally developed and purchased software costs

(12,448)

(4,290)

Other

(1,415)

153

Net cash flows provided by (used in) investing activities

31,162

(115,051)

Cash flows from financing activities:

Repurchases of common stock

(215,721)

(176,603)

Proceeds from stock option exercises

74,026

9,056

Proceeds from advance on line of credit

539

4,014

Realized tax benefits from stock option exercises

3,763

3,323

Principal payments on line of credit

(1,893)

(2,061)

Cash paid for acquisition of non-controlling interest

-

(846)

Other

(189)

9

Net cash flows used in financing activities

(139,475)

(163,108)

Effect of exchange rate changes on cash and cash equivalents

9,200

(2,129)

Net increase (decrease) in cash and cash equivalents

140,348

(76,763)

Cash and cash equivalents at beginning of year

486,023

562,786

Cash and cash equivalents at end of year

$        626,371

$        486,023

SOURCE MICROS Systems, Inc.



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