Press Release

MICROS REPORTS FISCAL 2010 RESULTS RECORD OPERATING INCOME, NET INCOME AND EPS; REVENUE, OPERATING INCOME, NET INCOME AND EPS EXCEED EXPECTATIONS; NEW STOCK BUYBACK PLAN APPROVED

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 2010 fourth quarter and fiscal year ending June 30, 2010.

FINANCIAL HIGHLIGHTS

  • Revenue for the fiscal 2010 fourth quarter was $248.2 million, an increase of $25.4 million, or 11.4% over the same period last year.
  • Revenue for the fiscal year was $914.3 million, an increase of $6.6 million, or 0.7%, over the same period last year.
  • GAAP net income for the quarter was $33.9 million, an increase of $11.0 million, or 48.2% over the same period last year.
  • GAAP net income for the fiscal year was $114.4 million, an increase of $18.1 million, or 18.8%, over the same period last year.
  • GAAP diluted earnings per share (EPS) for the quarter was $0.42, an increase of $0.14, or 50%, over the same period last year.
  • GAAP diluted earnings per share for the fiscal year was $1.41, an increase of $0.24, or 20.5%, over the same period last year.
During the fourth quarter, we recorded an impairment charge of $4.4 million related to our investments in auction rate securities.

- Non-GAAP financial results, excluding the effect of charges for stock options and the investment impairment, are as follows:
  • Non-GAAP net income for the quarter was $39.8 million, an increase of $11.6 million, or 41.3%, over the sameperiod last year.
  • Non-GAAP net income for the fiscal year was $127.2 million, an increase of $17.3 million, or 15.7%, over the sameperiod last year.
  • Non-GAAP diluted EPS for the quarter was $0.49, an increase of $0.15, or 44.1%, over the same period last year.
  • Non-GAAP diluted EPS for the fiscal year $1.57, an increase of $0.23, or 17.2%, over the same period last year.
The financial results for the fourth fiscal quarter exceeded consensus expectations. The operating income, net income and EPS for the quarter and fiscal year were records for MICROS.

Tom Giannopoulos, MICROS’s Chairman and CEO, stated, “We are very pleased with our excellent fourth quarter results, achieving record operating income, net income and EPS for both the quarter and our fiscal year.  The strong finish to our fiscal year bodes well for the future.”

MICROS’s financial guidance for fiscal 2011 is for revenue between $1,000 million and $1,005 million and net income between $140 million and $142 million.

NEW STOCK BUYBACK APPROVED

On August 24, 2010, our Board of Directors approved the purchase of an additional two million shares of our common stock.   The new plan will take effect once the current two million share buyback plan of August 2009 is completed. Under the new plan, which is the same as the current 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 August 26, 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.

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,
2010 2009 2010 2009
Revenue:
  Hardware  $52,027  $47,959  $188,333  $209,834
Software 34,072 30,119 118,788 132,912
Service 162,118 144,762 607,198 564,979
Total revenue 248,217 222,840 914,319 907,725
Cost of sales:
Hardware 31,074 30,891 119,489 134,352
Software 7,197 5,804 25,731 25,570
Service 73,548 65,792 267,586 264,881
Stock option expense 32 0 32 0
Restructuring related 0 681 0 681
Total cost of sales 111,851 103,168 412,838 425,484
Gross margin 136,366 119,672 501,481 482,241
Selling, general and administrative expenses 66,755 60,936 262,146 265,029
Research and development expenses 10,947 11,137 41,718 41,838
Depreciation and amortization 4,476 4,978 17,311 17,545
Stock option expense 2,529 2,882 12,333 13,900
Restructuring related 0 3,094 0 3,094
Total operating expenses 84,707 83,027 333,508 341,406
Income from operations 51,659 36,645 167,973 140,835
Non-operating income (expense):
Interest income (expense), net         1,094         1,089         3,817         7,786
Credit based impairment charge        (4,396)        (1,266)        (4,783)        (1,266)
Other non-operating (expense) income, net         1,028        (1,020)         1,118           (493)
Total non-operating income, net        (2,274)        (1,197)            152         6,027
Income before taxes 49,385 35,448 168,125 146,862
Income tax provision  15,152 12,149 52,745 49,173
Net income 34,233 23,299 115,380 97,689
Less:Net income attributable to noncontrolling interest (353) (435) (1,027) (1,397)
Net Income attributable to MICROS Systems, Inc. (GAAP)  $33,880  $22,864  $114,353  $96,292
Net Income per Diluted Common Share attributable to
MICROS Systems, Inc.
 $       0.42  $       0.28  $       1.41  $       1.17
Weighted-average number of shares outstanding - diluted 81,871 81,537 81,448 81,461

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.  $33,880  $22,864  $114,353  $96,292
Add back:  
Stock option expense  
        Selling, general and administrative expenses         2,417         2,744       11,822       13,108
        Research and development expenses            112            138            511            792
        Cost of sales             32              -              32              -
          2,561         2,882       12,365       13,900
Restructuring charge included in operating expenses              -         3,094              -         3,094
Restructuring related cost of sales              -            681              -            681
Credit based impairment charge         4,396         1,266         4,783         1,266
Total Add back         6,957         7,923       17,148       18,941
   
Subtract tax effect on:  
Stock option expense         1,061         1,455         4,283         4,100
Restructuring related cost of sales              -         1,186              -         1,186
          1,061         2,641         4,283         5,286
Non-GAAP Net Income attributable to MICROS Systems, Inc.  $39,776  $28,146  $127,218  $109,947
   
Non-GAAP Net Income per Diluted Common Share
attributable to MICROS Systems, Inc.
 $       0.49  $       0.34  $       1.57  $       1.34
           

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,
2010
June 30,
2009
ASSETS
Current assets:
     Cash and cash equivalents and short-term investments  $       545,298  $       438,936
     Accounts receivable, net 153,066 155,212
     Inventory, net 35,103 39,783
     Deferred income taxes 19,624 19,870
     Prepaid expenses and other current assets 27,004 27,238
           Total current assets 780,095 681,039
Long-term investments 59,884 57,823
Property, plant and equipment, net 27,349 30,520
Deferred income taxes, non-current 13,556 11,456
Goodwill 213,825 190,739
Intangible assets, net 19,590 17,709
Purchased and internally developed software costs, net 17,468 25,749
Other assets 6,524 6,344
Total Assets  $     1,138,291  $1,021,379
LIABILITIES AND EQUITY
Current liabilities:
     Bank lines of credit  $           1,442  $           1,090
     Accounts payable 44,783 38,445
     Accrued expenses and other current liabilities 135,469 104,821
     Income taxes payable 5,856 7,944
     Deferred revenue 124,498 112,146
         Total current liabilities           312,048           264,446
Income taxes payable, non-current 22,737 19,611
Deferred income taxes, non-current 2,590 1,752
Other non-current liabilities 11,304 10,539
         Total liabilities 348,679 296,348
Commitments and contingencies
Equity:
MICROS Systems, Inc. shareholders’ equity:
     Common stock 500 502
     Capital in excess of par 118,963 127,146
     Retained earnings 689,750 575,095
     Accumulated other comprehensive income (25,833) 16,254
          Total MICROS Systems, Inc. shareholders’ equity 783,380 718,997
Noncontrolling interest 6,232 6,034
Total Equity 789,612 725,031
Total Liabilities and Equity  $     1,138,291  $1,021,379

Contacts

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

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