MICROS SYSTEMS, INC. 
By COLUMBIA, Md., Jan. 30, 2014 /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 2014 second quarter ended December 31, 2013.
FINANCIAL HIGHLIGHTS
-- Revenue for the quarter was $345.6 million, an increase of $21.0
million, or 6.5%, versus the same period last year.
-- Revenue for the six-month period was $660.3 million, an increase of
$35.9 million, or 5.8% over the same period last year.
-- GAAP net income for the quarter was $43.4 million, a decrease of $0.7
million, or 1.5.%, versus the same period last year.
-- GAAP net income for the six-month period was $75.7 million, a decrease
of $9.5 million, or 11.1%, versus the same period last year.
-- GAAP diluted earnings per share (EPS) for the quarter was $0.57 per
share, an increase of $0.03, or 5.6%, over the same period last year.
-- GAAP diluted EPS for the six-month period was $0.98, a decrease of
$0.06, or 5.8%, versus the same period last year.
-- Non-GAAP financial results, excluding the effect of charges for stock
options, 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 $48.3 million, an increase
of $1.3 million, or 2.7%, versus the year ago period.
-- Non-GAAP net income for the six-month period was $86.8 million, a
decrease of $6.5 million, or 0.7%, over the year ago period.
-- Non-GAAP diluted EPS for the quarter was $0.63, an increase of
$0.05, or 8.6%, over the year ago period.
-- Non-GAAP diluted EPS for the six-month period was $1.12, a decrease
of $0.02, or 1.8%, versus the year ago period.
MICROS's quarterly revenue was a Company record.
Peter A. Altabef, MICROS's President and CEO, stated, "We are pleased to achieve another quarter of strong revenue growth. We are encouraged by the improving demand environment in our geographic regions and vertical markets."
MICROS's financial guidance for fiscal 2014 is for revenue between $1.320 billion and $1.345 billion and Non-GAAP EPS from $2.46 to $2.51. The guidance reflects an increase in the ranges first provided in August 2013. At that time, revenue guidance for fiscal 2014 was for revenue between $1.295 billion and $1.320 billion, and Non-GAAP EPS between $2.46 and $2.50.
On January 28, 2014, our Board of Directors approved the purchase of an additional $200.0 million of our common stock. This authorization will be added to the April 2013 repurchase authorization. Under the new plan, shares will be purchased from time to time in the open market as business conditions warrant.
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 30, 2014. 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,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
Revenue:
Hardware $71,096 $67,245 $137,628 $131,004
Software 44,758 38,747 79,119 69,525
Service 229,715 218,528 443,537 423,842
------- ------- ------- -------
Total revenue 345,569 324,520 660,284 624,371
------- ------- ------- -------
Cost of sales:
Hardware 45,671 43,295 88,918 86,352
Software 7,179 5,257 12,580 10,621
Service 110,414 103,767 214,054 201,864
Stock option expense 90 82 189 155
Total cost of sales 163,354 152,401 315,741 298,992
------- ------- ------- -------
Gross margin 182,215 172,119 344,543 325,379
Selling, general and administrative expenses 85,502 79,952 163,528 152,600
Research and development expenses 21,439 17,526 40,317 33,891
Depreciation and amortization 4,669 4,207 9,062 8,324
Stock option expense 5,661 7,233 10,552 11,371
Torex amortization expense 941 1,314 1,717 2,722
Torex restructuring charge 0 296 216 1,693
Litigation charge 0 0 2,800 0
Total operating expenses 118,212 110,528 228,192 210,601
------- ------- ------- -------
Income from operations 64,003 61,591 116,351 114,778
Non-operating income (expense):
Interest income, net 778 1,129 1,667 2,305
Interest expense - litigation charge - - (900) 0
Gain on settlement/sale - auction rate securities 0 3,494 338 3,494
Other non-operating income, net (536) (635) (383) (964)
---- ---- ---- ----
Total non-operating income , net 242 3,988 722 4,835
--- ----- --- -----
Income before taxes 64,245 65,579 117,073 119,613
Income tax provision 20,687 21,289 41,184 34,257
------ ------ ------ ------
Net income 43,558 44,290 75,889 85,356
Less: Net income attributable to noncontrolling interest (143) (204) (203) (206)
---- ---- ---- ----
Net Income attributable to MICROS Systems, Inc. (GAAP) $43,415 $44,086 $75,686 $85,150
======= ======= ======= =======
Net Income per diluted common share attributable to $0.57 $0.54 $0.98 $1.04
MICROS Systems, Inc.
Weighted-average number of shares outstanding - diluted 76,785 81,289 77,245 81,643
====== ====== ====== ======
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. $43,415 $44,086 $75,686 $85,150
Add back:
Stock option expense
Selling, general and administrative expenses 5,117 6,905 9,521 10,605
Research and development expenses 544 328 1,031 766
Cost of sales 90 82 189 155
--- --- --- ---
5,751 7,315 10,741 11,526
Litigation charge, including accrued interest expense - - 3,700 0
Torex amortization expense 941 1,314 1,717 2,722
Torex restructuring charge - 296 216 1,693
Gain on settlement/sale - auction rate securities 0 (3,494) (338) (3,494)
Total add back 6,692 5,431 16,036 12,447
----- ----- ------ ------
Subtract tax effect on:
Stock option expense 1,817 2,391 3,374 3,655
Litigation charge, including accrued interest expense - - 1,410 0
Torex amortization expense 23 59 45 118
Torex restructuring charge - 83 49 432
---
Non-GAAP Net Income attributable to MICROS Systems, Inc. $48,267 $46,984 $86,844 $93,392
======= ======= ======= =======
Non-GAAP Net Income per Diluted Common Share $0.63 $0.58 $1.12 $1.14
attributable to MICROS Systems, Inc.
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, June 30,
2013 2013
---- ----
ASSETS
Current
assets:
Cash and
cash
equivalents
and
short-
term
investments $627,266 $634,069
Accounts
receivable,
net 221,799 228,455
Inventory 57,602 49,273
Income
taxes
receivable 4,599 12,771
Deferred
income
taxes 15,307 15,022
Prepaid
expenses
and
other
current
assets 49,222 44,648
------ ------
Total
current
assets 975,795 984,238
Property,
plant
and
equipment,
net 57,257 44,127
Deferred
income
taxes,
non-
current 48,258 50,186
Goodwill 452,780 432,950
Intangible
assets,
net 37,355 37,754
Purchased
and
internally
developed
software
costs,
net 35,539 32,543
Other
assets 8,686 7,240
----- -----
Total
Assets $1,615,670 $1,589,038
========== ==========
LIABILITIES
AND
EQUITY
Current
liabilities:
Bank
lines
of
credit $ - $1,757
Accounts
payable 72,313 73,099
Accrued
expenses
and
other
current
liabilities 151,276 155,491
Income
taxes
payable 7,373 11,002
Deferred
revenue 176,303 177,236
------- -------
Total
current
liabilities 407,265 418,585
Income
taxes
payable,
non-
current 41,692 35,019
Deferred
income
taxes,
non-
current 551 1,157
Other
non-
current
liabilities 15,646 16,007
------ ------
Total
liabilities 465,154 470,768
Commitments
and
contingencies
Equity:
MICROS
Systems,
Inc.
stockholders'
equity:
Common
stock 1,881 1,918
Capital
in
excess
of par 0 0
Retained
earnings 1,132,904 1,136,763
Accumulated
other
comprehensive
income
(loss) 12,419 (23,625)
------ -------
Total
MICROS
Systems,
Inc.
stockholders'
equity 1,147,204 1,115,056
Noncontrolling
interest 3,312 3,214
----- -----
Total
Equity 1,150,516 1,118,270
--------- ---------
Total
Liabilities
and
Equity $1,615,670 $1,589,038
========== ==========
MICROS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
Six Months Ended
December 31,
------------
2013 2012
---- ----
Cash flows from operating activities:
Net income $75,889 $85,356
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and
amortization 10,779 11,046
Share-based
compensation 10,741 11,526
Amortization of
capitalized software 3,111 2,260
Provision for losses
on accounts
receivable 31 1,997
Litigation reserve,
including interest
expense 3,700 -
Gain on sales of
auction rate
securities - (4,094)
Other-than-
temporary impairment
losses on
investments, net - 600
Net (gain) loss on
disposal of
property, plant and
equipment - (40)
Changes in operating assets and liabilities (net
of impact of acquisitions):
Decrease
in
accounts
receivable 12,216 23,899
Increase
in
inventory (7,377) (7,244)
Increase
in
prepaid
expenses
and
other
assets (4,053) (6,303)
Decrease
in
accounts
payable (2,323) (8,149)
Decrease
in
accrued
expenses
and
other
current
liabilities (9,585) (31,809)
Increase
(decrease)
in
income
taxes
assets
and
liabilities 13,491 (4,053)
Decrease
in
deferred
revenue (5,414) (9,257)
Net cash flows
provided by
operating
activities 101,206 65,735
------- ------
Cash flows from investing activities:
Proceeds from
maturities of
investments 139,476 23,824
Proceeds from
sales of auction
rate securities - 36,719
Purchases of
investments (69,705) (83,841)
Purchases of
property, plant
and equipment (20,854) (10,009)
Internally
developed
software costs (3,769) (2,225)
Other 45 (122)
Net cash flows
provided by
(used in)
investing
activities 45,193 (35,654)
------ -------
Cash flows from financing activities:
Repurchases of
common stock (111,312) (53,372)
Proceeds from
stock option
exercises 19,080 4,655
Realized tax
benefits from
stock option
exercises 1,830 1,426
Principal
payments on line
of credit (1,795) -
Cash paid for
acquisition of
noncontrolling
interest - (846)
Other (174) (51)
Net cash flows
used in
financing
activities (92,371) (48,188)
------- -------
Effect of exchange rate changes on cash
and cash equivalents 9,163 7,431
----- -----
Net (decrease) increase in cash and
cash equivalents 63,191 (10,676)
Cash and cash equivalents at beginning
of year 486,023 562,786
Cash and cash equivalents at end of
year $549,214 $552,110
======== ========
Contact: Peter J. Rogers, Jr.
Executive Vice President, Investor Relations
443-285-8059
SOURCE MICROS Systems, Inc.
