MICROS Reports Fiscal 2011 First Quarter Results

Revenue, Net Income and EPS Exceed Expectations

Oct 28, 2010, 16:02 ET from MICROS Systems, Inc.

COLUMBIA, Md., Oct. 28 /PRNewswire-FirstCall/ -- MICROS Systems, Inc.  (Nasdaq: MCRS), a leading supplier of information systems to the hospitality and retail industries, today announced the results for its fiscal 2011 first quarter ended September 30, 2010.  

FINANCIAL HIGHLIGHTS

  • Revenue for the quarter was $233.4 million, an increase of $22.0 million, or 10.4%, over the same period last year.
  • GAAP net income for the quarter was $31.6 million, an increase of $7.5 million, or 30.9%, over the same period last year.
  • GAAP diluted earnings per share (EPS) for the quarter was $0.39 per share, an increase of $0.09, or 30% over the same period last year.
  • Non-GAAP financial results for the quarter, excluding the effect of charges for stock options and the redemption of one of our auction rate securities, are as follows:
    • Non-GAAP net income for the quarter was $33.4 million, an increase of $6.7 million, or 25.3%, over the same period last year.
    • Non-GAAP diluted EPS for the quarter was $0.41 per share an increase of $0.08, or 24.2%, over the same period last year.

The financial results for the first fiscal quarter exceeded consensus expectations.

Tom Giannopoulos, MICROS's Chairman and CEO, stated: "We are very pleased with the results for our fiscal quarter, which included record operating income, net income and EPS for a first fiscal quarter."

MICROS's financial guidance for fiscal 2011 remains the same as previously provided in August 2010 with revenue between $1.0 billion and $1.005 billion and net income between $140 million and $142 million.

MICROS's stock is traded through NASDAQ under the symbol MCRS.  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.

All information in this release is as of October 28, 2010.  MICROS undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in MICROS's expectations. 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.

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

Sept. 30,

2010

2009

Revenue:

 Hardware

$         44,266

$43,307

 Software

27,889

24,692

 Service

161,259

143,402

Total revenue

233,414

211,401

Cost of sales:

 Hardware

29,955

28,052

 Software

5,826

5,387

 Service

71,178

62,136

 Stock option expense

35

0

Total cost of sales

106,994

95,575

Gross margin

126,420

115,826

 Selling, general and administrative expenses

62,191

62,217

 Research and development expenses

10,661

10,869

 Depreciation and amortization

4,118

3,842

 Stock option expense

2,610

3,051

Total operating expenses

79,580

79,979

Income from operations

46,840

35,847

Non-operating income (expense):

  Interest income, net

1,056

1,051

 Change in credit based impairment, net of realized loss on redemption

92

(387)

 Other non-operating expense, net

(900)

(7)

Total non-operating income, net

248

657

Income before taxes

47,088

36,504

Income tax provision

15,393

12,133

Net income

31,695

24,371

Less:  Net income attributable to noncontrolling interest

(78)

(224)

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

$         31,617

$24,147

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

$             0.39

$    0.30

Weighted-average number of shares outstanding - diluted

82,023

81,314

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.

$         31,617

$24,147

Add back:

 Stock option expense

       Selling, general and administrative expenses

             2,484

    2,904

       Research and development expenses

                126

       147

       Cost of sales

                  35

          -  

             2,645

    3,051

 Change in credit based impairment, net of realized loss on redemption

                 (92)

       387

Total Add back

             2,553

    3,438

Subtract tax effect on stock option expense

                789

       942

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

$         33,381

$26,643

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

$             0.41

$    0.33

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)

Sept. 30, 2010

June 30, 2010

ASSETS

Current assets:

    Cash and cash equivalents and short-term investments

$        617,879

$   545,298

    Accounts receivable, net

156,704

153,066

    Inventory, net

35,609

35,103

    Deferred income taxes

20,092

19,624

    Prepaid expenses and other current assets

33,641

27,004

          Total current assets

863,925

780,095

Long-term investments

63,014

59,884

Property, plant and equipment, net

28,424

27,349

Deferred income taxes, non-current

13,612

13,556

Goodwill

217,721

213,825

Intangible assets, net

18,899

19,590

Purchased and internally developed software costs, net

17,783

17,468

Other assets

6,960

6,524

Total Assets

$     1,230,338

$1,138,291

LIABILITIES AND EQUITY

Current liabilities:

    Bank lines of credit

$                  -

$       1,442

    Accounts payable

45,306

44,783

    Accrued expenses and other current liabilities

119,425

135,469

    Income taxes payable

3,468

5,856

    Deferred revenue

147,910

124,498

        Total current liabilities

316,109

312,048

Income taxes payable, non-current

23,439

22,737

Deferred income taxes, non-current

2,808

2,590

Other non-current liabilities

10,482

11,304

        Total liabilities

352,838

348,679

Commitments and contingencies

Equity:

 MICROS Systems, Inc. shareholders’ equity:

    Common stock

2,014

2,001

    Capital in excess of par

130,926

117,462

    Retained earnings

721,397

689,750

    Accumulated other comprehensive income

16,498

(25,833)

         Total MICROS Systems, Inc. shareholders’ equity

870,835

783,380

 Noncontrolling interest

6,665

6,232

Total Equity

877,500

789,612

Total Liabilities and Equity

$     1,230,338

$1,138,291

SOURCE MICROS Systems, Inc.



RELATED LINKS

http://www.micros.com