TechWeb

MICROS Reports Fiscal 2011 Second Quarter Results

Jan 27, 2011 (03:01 PM EST)
URL: http://www.techweb.com/show-press-release/X827000/micros-reports-fiscal-2011-second-quarter-results.html

Record Second Quarter Revenue, Net Income and EPS

COLUMBIA, Md., Jan. 27, 2011 /PRNewswire/ -- 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 second quarter ended December 31, 2010.  

    FINANCIAL HIGHLIGHTS

  • Revenue for the quarter was $247.1 million, an increase of $21.5 million, or 9.5%, versus the same period last year.  
  • Revenue for the six-month period was $480.5 million, an increase of $43.5 million, or 9.9% over the same period last year.
  • GAAP net income for the quarter was $32.3 million, an increase of $6.2 million, or 23.7%, over the same period last year.
  • GAAP net income for the six-month period was $63.9 million, an increase of $13.7 million, or 27.2%, over the same period last year.
  • GAAP diluted earnings per share (EPS) for the quarter was $0.39 per share, an increase of $0.07, or 21.9%, over the same period last year.
  • GAAP diluted EPS for the six-month period was $0.78, an increase of $0.16, or 25.8%, over the same period last year.
  • Non-GAAP financial results, excluding the effect of charges for stock options, an impairment charge for auction rate securities and a charge for a lawsuit, are as follows:
    • Non-GAAP net income for the quarter was $36.9 million, an increase of $7.9 million, or 27.2%, over the year ago period.
    • Non-GAAP net income for the six-month period was $70.3 million, an increase of $14.6 million, or 26.3%, over the year ago period.
    • Non-GAAP diluted EPS for the quarter was $0.45, an increase of $0.09, or 25.0%, over the year ago period.
    • Non-GAAP diluted EPS for the six-month period was $0.85, an increase of $0.16, or 23.2%, over the year ago period.
  • MICROS's revenue, net income and EPS results were Company records for a second fiscal quarter.

Tom Giannopoulos, MICROS's Chairman and CEO, stated: "We are very pleased with our record financial results for the quarter and first half of our fiscal year.  The improving economic conditions of the markets we serve bode well for our future."

MICROS's financial guidance for fiscal 2011 is for revenue between $1 billion and $1.005 billion, with net income between $145 million and $147 million.  The revenue guidance remains the same as previously provided; while the net income guidance has been increased from the $140 million to $142 million range.

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.

All information in this release is as of January 27, 2011.  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.

MICROS SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - in thousands, except per share amounts)
























Three Months Ended


Six Months Ended




December 31,


December 31,




2010


2009


2010


2009

Revenue:










Hardware


$       47,841


$       45,793


$       92,107


$       89,099


Software


33,079


30,499


60,968


55,192


Service


166,197


149,355


327,456


292,757

Total revenue


247,117


225,647


480,531


437,048











Cost of sales:










Hardware


31,353


30,364


61,308


58,416


Software


4,921


7,045


10,747


12,432


Service


73,446


63,259


144,624


125,396


Stock option expense


27


0


62


0

Total cost of sales


109,747


100,668


216,741


196,244











Gross margin


137,370


124,979


263,790


240,804












Selling, general and administrative expenses


68,351


67,124


130,542


129,339


Research and development expenses


10,806


9,560


21,467


20,430


Depreciation and amortization


4,243


4,319


8,362


8,161


Litigation reserve


3,000


0


3,000


0


Stock option expense


4,289


4,378


6,899


7,429

Total operating expenses


90,689


85,381


170,270


165,359











Income from operations


46,681


39,598


93,520


75,445

Non-operating income (expense):










Interest income, net


           1,397


              825


           2,453


           1,877



Interest expense - litigation reserve


            (360)


                -  


            (360)


                -  


Change in credit based impairment, net of

realized loss on redemption


              (73)


                -  


                19


            (387)


Other non-operating income (expense), net


              505


            (427)


            (395)


            (435)

Total non-operating income, net


           1,469


              398


           1,717


           1,055










Income before taxes



48,150


39,996


95,237


76,500

Income tax provision


15,649


13,334


31,042


25,471

Net income



32,501


26,662


64,195


51,029

Less:  Net income attributable to noncontrolling interest


(173)


(532)


(251)


(755)










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


$       32,328


$       26,130


$       63,944


$       50,274










Net Income per diluted common share attributable to

MICROS Systems, Inc.



$           0.39


$           0.32


$           0.78


$           0.62

Weighted-average number of shares outstanding - diluted


82,717


81,234


82,390


81,283












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.



$       32,328


$       26,130


$       63,944


$       50,274

Add back:










Stock option expense










   Selling, general and administrative expenses


           4,164


           4,235


           6,648


           7,139


   Research and development expenses


              125


              143


              251


              290


   Cost of sales


                27


                -  


                62


                -  




           4,316


           4,378


           6,961


           7,429


Litigation reserve, including accrued interest expense


           3,360


                -  


           3,360


                -  


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


                73


                -  


              (19)


              387


Total add back


           7,749


           4,378


         10,302


           7,816











Subtract tax effect on:










Stock option expense


           1,866


           1,464


           2,655


           2,406


Litigation reserve, including accrued interest expense


           1,280


                -  


           1,280


                -  

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


$       36,931


$       29,044


$       70,311


$       55,684











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



$           0.45


$           0.36


$           0.85


$           0.69





















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)








December 31,

2010


June 30,

2010

ASSETS





Current assets:





    Cash and cash equivalents and short-term investments


$             662,457


$             545,298

    Accounts receivable, net


145,280


153,066

    Inventory, net


38,342


35,103

    Deferred income taxes


18,863


19,624

    Prepaid expenses and other current assets


32,442


27,004

          Total current assets


897,384


780,095






Long-term investments


57,885


59,884

Property, plant and equipment, net


26,913


27,349

Deferred income taxes, non-current


15,499


13,556

Goodwill


225,558


213,825

Intangible assets, net


18,349


19,590

Purchased and internally developed software costs, net


17,845


17,468

Other assets


7,150


6,524

Total Assets


$          1,266,583


$          1,138,291






LIABILITIES AND EQUITY





Current liabilities:





    Bank lines of credit


$                      -  


$                 1,442

    Accounts payable


51,165


44,783

    Accrued expenses and other current liabilities


133,951


135,469

    Income taxes payable


803


5,856

    Deferred revenue


125,229


124,498

        Total current liabilities


               311,148


               312,048






Income taxes payable, non-current


25,973


22,737

Deferred income taxes, non-current


4,243


2,590

Other non-current liabilities


11,597


11,304

        Total liabilities


352,961


348,679






Commitments and contingencies










Equity:





 MICROS Systems, Inc. shareholders’ equity:





    Common stock


                   2,021


                   2,001

    Capital in excess of par


139,567


117,462

    Retained earnings


753,724


689,750

    Accumulated other comprehensive income


12,287


(25,833)

         Total MICROS Systems, Inc. shareholders’ equity


907,599


783,380

 Noncontrolling interest


6,023


6,232

Total Equity


913,622


789,612






Total Liabilities and Equity


$          1,266,583


$          1,138,291



SOURCE MICROS Systems, Inc.