Press Release

MICROS Reports Fiscal 2013 Results Record Fiscal Year Revenue, Net Income And EPS

Columbia, Maryland ... MICROS Systems, Inc. (Nasdaq:MCRS), a leading supplier of information systems to the food and beverage, hotel and retail industries today announced the results for its fiscal year 2013 fourth quarter and fiscal year ending June 30, 2013.

FINANCIAL HIGHLIGHTS

  • Revenue for the fiscal 2013 fourth quarter was $328.6 million, an increase of $26.1 million, or 8.6%, over the same period last year.
  • Revenue for the fiscal 2013 year was $1.268 billion, an increase of $160.6 million, or 14.5%, over the same period last year.
  • GAAP net income for the quarter was $42.0 million, a decrease of $6.2 million, or 12.9%, over the same period last year.
  • GAAP net income for the fiscal year was $171.4 million, an increase of $4.4 million, or 2.7%, over the same period last year.
  • GAAP diluted earnings per share (EPS) for the quarter was $0.53, a decrease of $0.06, or 10.2%, over the same period last year.
  • GAAP diluted EPS for the fiscal year was $2.12, an increase of $0.09, or 4.4%, over the same period last year.
  • Non-GAAP financial results, excluding the effect of charges for stock options, amortization of Torex intangibles, restructuring of Torex, and a one-time gain on the sale of auction rate securities are as follows:
    • Non-GAAP net income for the quarter was $48.9 million, a decrease of $6.8 million, or 12.2%, over the same period last year.
    • Non-GAAP net income for the fiscal year was $191.9 million, an increase of $9.3 million, or 5.1%, over the same period last year.
    • Non-GAAP diluted EPS for the quarter was $0.62, a decrease of $0.06, or 8.8%, over the same period last year.
    • Non-GAAP diluted EPS for the fiscal year $2.38, an increase of $0.16, or 7.2%, over the same period last year.

The fiscal year revenue, net income and EPS, on GAAP and Non-GAAP results are fiscal year records for MICROS.

Peter A. Altabef, MICROS’s CEO, stated, “We are pleased that we achieved a record year of revenue, net income and earnings per share while continuing our strong investment in talent, product and infrastructure.“

MICROS’s financial guidance for fiscal 2014 is for revenue of $1.295 billion to $1.320 billion and Non-GAAP EPS of $2.46 to $2.50.

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 22, 2013. 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.

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The MICROS logo is a registered trademark of MICROS Systems, Inc.

MICROS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share amounts)

Three Months Ended Twelve Months Ended
June 30, June 30,
2013 2012 2013 2012
Revenue:
Hardware $ 74,125 $ 69,039 $ 269,651 $ 237,920
Software 36,688 37,216 143,034 142,617
Service 217,796 196,271 855,400 726,994
Total revenue 328,609 302,526 1,268,085 1,107,531
Cost of sales:
Hardware 47,382 45,254 175,248 152,242
Software             5,743             5,788 22,178          20,779
Service 102,365 86,094 406,429 319,705
Stock option expense                   94                   52                 338                195
Total cost of sales 155,584 137,188 604,193 492,921
Gross margin 173,025 165,338 663,892 614,610
Selling, general and administrative expenses 86,182 71,574 317,035 296,815
Research and development expenses 19,101 14,176 70,962          50,792
Depreciation and amortization             4,439             4,465 16,770          15,848
Stock option expense             4,742             3,900 20,764          16,306
Torex amortization expense 1,386 329 5,803 329
Torex restructuring charge 3,095 0 5,548 0
Total operating expenses 118,945 94,444 436,882 380,090
Income from operations 54,080 70,894 227,010 234,520
Non-operating income (expense):
Interest income, net             1,034             1,603             4,258             6,788
Credit based impairment charge (realized gain on sale of auction rate securities) 0 (4,000) 3,494 (4,000)
Other non-operating expense, net               (637)               (320)               (957)              (117)
Total non-operating income (loss), net                397 (2,717)             6,795             2,671
Income before taxes 54,477 68,177 233,805 237,191
Income tax provision 12,332 20,098 61,958          70,090
Net income 42,145 48,079 171,847 167,101
Less:  Net (income) loss attributable to noncontrolling interest (140)                139               (429)              (118)
Net Income attributable to MICROS Systems, Inc. (GAAP) $ 42,005 $ 48,218 $ 171,418 $ 166,983
Net Income per diluted common share attributable to
MICROS Systems, Inc.
$           0.53 $           0.59 $           2.12 $           2.03
Weighted-average number of shares outstanding - diluted 79,192 82,283 80,772 82,238
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. $ 42,005 $ 48,218   $ 171,418 $ 166,983
Add back:
  Stock option expense
  Selling, general and administrative expenses             4,358             3,539 19,124          15,067
  Research and development expenses                384                361             1,640             1,239
  Cost of sales                   94                   52                 338                195
              4,836             3,952 21,102          16,501
  Credit based impairment charge (realized gain on sale of auction rate securities) 0 4,000            (3,494) 4,000
  Torex amortization expense             1,386 329             5,803 329
  Torex restructuring charge             3,095 0             5,548 0
  Total add back             9,317             8,281 28,959          20,830
 
Subtract tax effect on:
  Stock option expense             1,495                819             6,721             5,163
  Torex amortization expense                   47 0                 224 0
  Torex restructuring charge                871 0             1,512 0
Non-GAAP Net Income attributable to MICROS Systems, Inc. $ 48,909 $ 55,680 $ 191,920 $ 182,650
 
Non-GAAP Net Income per Diluted Common Share attributable to MICROS Systems, Inc. $           0.62 $           0.68 $           2.38 $           2.22
             

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,
2013
June 30,
2012
ASSETS
Current assets:
     Cash and cash equivalents and short-term investments $ 634,069 $ 582,038
     Accounts receivable, net 228,455 235,433
     Inventory 49,273 44,278
Income taxes receivable 12,771 122
     Deferred income taxes 15,022 17,004
     Prepaid expenses and other current assets 44,648 37,221
           Total current assets 984,238 916,096
Long-term investments                         -   34,456
Property, plant and equipment, net 44,127 35,435
Deferred income taxes, non-current 50,186 50,326
Goodwill 432,950 444,117
Intangible assets, net 37,754 45,024
Purchased and internally developed software costs, net 32,543 33,980
Other assets 7,240 6,586
Total Assets $ 1,589,038 $ 1,566,020
LIABILITIES AND EQUITY
Current liabilities:
     Bank lines of credit $ 1,757 $ -
     Accounts payable 73,099 69,978
     Accrued expenses and other current liabilities 155,491 174,214
     Income taxes payable                11,002 1,788
     Deferred revenue 177,236 169,989
Total current liabilities             418,585             415,969
Income taxes payable, non-current 35,019 34,722
Deferred income taxes, non-current 1,157 2,554
Other non-current liabilities 16,007 16,644
Total liabilities 470,768 469,889
Commitments and contingencies
Equity:
  MICROS Systems, Inc. shareholders' equity:
     Common stock                  1,918                  2,008
     Capital in excess of par                         -   107,662
     Retained earnings 1,136,763 1,000,822
     Accumulated other comprehensive loss (23,625) (17,847)
Total MICROS Systems, Inc. shareholders' equity 1,115,056 1,092,645
  Noncontrolling interest 3,214 3,486
Total Equity 1,118,270 1,096,131
Total Liabilities and Equity $ 1,589,038 $     1,566,020

MICROS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)

Fiscal Year Ended June 30,
2013 2012
Cash flows from operating activities:
   Net income $ 171,847 $ 167,101
   Adjustments to reconcile net income to net cash provided by operating activities:
      Depreciation and amortization 22,573 16,177
      Share-based compensation 21,102 16,501
   Amortization of capitalized software                 5,208                 7,148
   Provision for losses on accounts receivable                 3,563                 7,137
   Gain on sales of long-term investments                (4,094)                        -  
   Other-than-temporary impairment losses on investments, net                     600                 4,000
      Provision for (benefit from) deferred income taxes                (2,702)                (3,436)
   Net (gain) loss on disposal of property, plant and equipment                        -                       642
   Other                        -                       336
      Changes in operating assets and liabilities (net of impact of acquisitions):      
         Decrease (increase) in accounts receivable                 2,430             (40,095)
         Increase in inventory                (5,302)                (1,751)
         Increase in prepaid expenses and other assets                (7,833)                (1,790)
         Increase in accounts payable                 3,163                 2,507
         (Decrease) increase in accrued expenses and other current liabilities             (13,682)                 2,551
         Decrease in income taxes assets and liabilities                (2,587)                (1,755)
         Increase in deferred revenue                 9,239                 4,676
   Net cash flows provided by operating activities             203,525             179,949
                 
Cash flows from investing activities:      
   Proceeds from maturities of investments 56,620             158,819
   Proceeds from sales of investments 42,119 19,655
   Purchases of investments (186,371)             (78,816)
   Purchases of property, plant and equipment             (23,282)             (17,468)
   Internally developed software costs                (4,290)                (7,197)
   Net cash paid for acquisitions, net of cash acquired                        (4) (258,940)
   Other                        157                       67
   Net cash flows used in investing activities (115,051) (183,880)
                 
Cash flows from financing activities:      
   Repurchases of common stock (176,603)             (59,199)
   Proceeds from stock option exercises                 9,056 14,933
   Proceeds from advance on line of credit                 4,014                        -  
   Realized tax benefits from stock option exercises                 3,323                 4,717
   Principal payments on line of credit                (2,061)                        -  
   Cash paid for acquisition of non-controlling interest                   (846)                (4,212)
   Other                            9                   (123)
   Net cash flows used in financing activities (163,108)             (43,884)
                 
Effect of exchange rate changes on cash and cash equivalents                (2,129)             (50,658)
                 
Net decrease in cash and cash equivalents             (76,763)             (98,473)
                 
Cash and cash equivalents at beginning of year             562,786             661,259
Cash and cash equivalents at end of year $ 486,023 $ 562,786

Contacts

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

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