MICROS Reports Fiscal 2006 Second Quarter Results Revenue, Net Income And EPS Exceed Expectations Record Second Quarter Revenue, Net Income And EPS

Columbia, Maryland... MICROS Systems, Inc.  (Nasdaq:MCRS), a leading supplier of information systems to the hospitality and retail industries, today announced the results for its fiscal 2006 second quarter ended December 31, 2005. 

      FINANCIAL HIGHLIGHTS
 
 -Commencing the first quarter of fiscal year 2006, MICROS implemented the Statement of Financial Accounting Standard No. 123(R) (“FASB 123R”), “Share-based Payments,” which became effective July 1, 2005. The statement requires companies to expense the fair value of grants made under stock option programs over the vesting period of the options.  The expense is a non-cash transaction. The Company adopted the “Modified Prospective Application” transition method that does not result in the restatement of previously issued financial statements.  MICROS will report its net income and earnings per share during fiscal year 2006 on both Generally Accepted Accounting Principles (“GAAP”) (which includes the share-based payment charge, which represents the non-cash stock option expense) and non-GAAP (which excludes the share-based payment charge, which represents the non-cash stock option expense) bases in order to facilitate analysis of the business and meaningful period-to-period comparisons.

 -Revenue for the quarter was $164.0 million, an increase of $22.0 million, or 15.5%, over the same period last year.  Revenue exceeded consensus expectations and was above MICROS’s second quarter guidance.

-GAAP net income for the quarter was $14.2 million. GAAP net income for the six-month period was $26.6 million.

-GAAP EPS for the quarter, per diluted share, was $0.35 per share.  GAAP EPS for the six-month period, per diluted share, was $0.65 per share.

-Net income for the quarter, before the share-based payment charge, a non-GAAP measure, was $15.8 million, an increase of $4.0 million, or 34.2% over the year ago period.  Net income for the six-month period, before the share based payment charge, was $29.4 million, an increase of $8.0 million, or 37.3% over the year ago period.

-EPS, per diluted share, before the share-based payment charge, a non-GAAP measure, was $0.39 per share, an increase of $0.09 per share, or 30.0% over year ago period. EPS, per diluted share, before the share-based payment charge, was $0.72 per share, an increase of $0.17, or 30.9% over the year ago period. 

-Net income and earnings per diluted share, before and after the share-based payment charge, exceeded consensus expectations and were above second quarter guidance.

-MICROS’s financial results were Company records for the second fiscal quarter.

Tom Giannopoulos, MICROS’s Chairman and CEO, stated: “We are pleased with the financial results for the quarter and the six-months of the fiscal year and the number of new contracts signed to date, including those long-term contracts with deployments over the next year and beyond.”

MICROS’s guidance for its fiscal 2006 third quarter ending March 31, 2006 is for revenue between $169.0 million and $172.0 million, and non-GAAP net income, excluding the currently projected share-based payment charge for the third fiscal quarter, between $17.0 million and $18.0 million. Guidance for GAAP net income is between $15.5 million and $16.5 million.

Guidance for the fiscal 2006 year ending June 30, 2006 has been increased with revenue expected to be between $665.0 million and $672.0 million and non-GAAP net income, excluding the currently projected share-based payment charge for the fiscal year, between $66.0 million and $68.0 million, or non-GAAP earnings per diluted share between $1.65 and $1.66.  Guidance for GAAP net income is between $59.5 million to $61.5 million, or earnings per diluted share of $1.49 to $1.50.

To supplement the consolidated financial statements presented in accordance with GAAP, the Company presents MICROS’s net income and earnings per diluted share, before the share-based payment charge, which is the non-cash stock option expense. This non-GAAP presentation of net income and earnings per share is provided to enhance the understanding of the Company’s historical financial performance and comparability between periods. The Company believes this presentation provides useful information, particularly during the transition period when many companies have not yet adopted the provisions of FASB 123R.

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.  An example of a forward looking statement includes the statements in the paragraphs where MICROS provides guidance for its fiscal 2006 third quarter ending March 31, 2006, and its fiscal 2006 year ending June 30, 2006, and Mr. Giannopoulos’s quote.  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, such as hurricanes and tsunamis; 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 26, 2006.  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)

                                                                       Second Quarter Ended December 31,             Six-Months Ended December 31,

                                                                                      2005                 2004                             2005                     2004