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MICROS Reports Fiscal 2014 Results

RECORD QUARTERLY AND FISCAL YEAR REVENUE, NET INCOME AND EPS

COLUMBIA, Md., Aug. 21, 2014 /PRNewswire/ -- MICROS Systems, Inc. (Nasdaq: MCRS), a leading supplier of information systems to the food & beverage, hotel and retail industries, today announced the results for its fiscal 2014 fourth quarter and year ending June 30, 2014. 

FINANCIAL HIGHLIGHTS                                                                        

  • Revenue for the quarter was $396.1 million, an increase of $67.5 million, or 20.6%, versus the year ago period.
  • Revenue for the fiscal year was $1.405 billion, an increase of $137.3 million, or 10.8%, versus the year ago period.
  • GAAP net income for the quarter was $56.0 million, an increase of $14.0 million, or 33.4%, versus the year ago period.
  • GAAP net income for the fiscal year was $182.0 million, an increase of $10.6 million, or 6.2%, versus the year ago period.
  • GAAP diluted earnings per share (EPS) for the quarter was $0.74 per share, an increase of $0.21, or 39.6%, versus the year ago period.
  • GAAP diluted EPS for the fiscal year was $2.37, an increase of $0.25, or 11.8%, versus the year ago period.
  • Non-GAAP financial results, excluding the effect of charges for stock options, Oracle transaction related expenses, 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 $63.5 million, an increase of $14.6 million, or 29.9%, versus the year ago period.
    • Non-GAAP net income for the fiscal year was $205.3 million, an increase of $13.4 million, or 7.0%, versus the year ago period.
    • Non-GAAP diluted EPS for the quarter was $0.84, an increase of $0.22, or 35.5%, versus the year ago period.
    • Non-GAAP diluted EPS for the fiscal year was $2.67, an increase of $0.29, or 12.2%, versus the year ago period.

MICROS's quarterly and fiscal year revenue,  net income (GAAP and Non-GAAP) and EPS (GAAP and Non-GAAP) were Company records.

MICROS will not be hosting a conference call in conjunction with these results.  For more information, or to access the financial results, please visit www.micros.com/InvestorRelations/

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.

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/InvestorRelations/

Contact: Peter J. Rogers, Jr.
Executive Vice President, Investor Relations
443-285-8059
[email protected]

 

 

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,



2014


2013


2014


2013

Revenue:









Hardware

$    103,271


$         74,125


$         319,520


$            269,651


Software

48,155


36,688


166,516


143,034


Service

244,719


217,796


919,361


855,400

Total revenue

396,145


328,609


1,405,397


1,268,085










Cost of sales:









Hardware

64,957


47,382


204,351


175,248


Software

5,233


5,743


24,752


22,178


Service

115,930


102,365


439,816


406,429


Stock option expense

108


94


374


338

Total cost of sales

186,228


155,584


669,293


604,193










Gross margin

209,917


173,025


736,104


663,892











Selling, general and administrative expenses

96,582


86,182


347,411


317,035


Research and development expenses

20,712


19,101


79,997


70,962


Depreciation and amortization

5,026


4,439


18,685


16,770


Stock option expense

5,554


4,742


21,683


20,764


Oracle transaction related expenses

2,050


-


2,050


-


Torex amortization expense

809


1,386


3,401


5,803


Torex restructuring charge

1,251


3,095


1,467


5,548


Litigation charge

0


0


2,800


0

Total operating expenses

131,984


118,945


477,494


436,882










Income from operations

77,933


54,080


258,610


227,010

Non-operating income (expense):









Interest income, net

957


1,034


3,501


4,258


Interest expense - litigation charge

-


-


(900)


0


Gain on settlement/sale - auction rate securities

0


0


338


3,494


Other non-operating income (expense), net

373


(637)


(173)


(957)

Total non-operating income , net

1,330


397


2,766


6,795










Income before taxes

79,263


54,477


261,376


233,805

Income tax provision 

23,116


12,332


79,197


61,958

Net income

56,147


42,145


182,179


171,847

Less:  Net income attributable to noncontrolling interest

(113)


(140)


(165)


(429)










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

$      56,034


$         42,005


$         182,014


$            171,418










Net Income per diluted common share attributable to
MICROS Systems, Inc.

$           0.74


$             0.53


$                2.37


$                   2.12

Weighted-average number of shares outstanding - diluted

75,986


79,192


76,803


80,772










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.

$      56,034


$         42,005


$         182,014


$            171,418

Add back:









Stock option expense









    Selling, general and administrative expenses

5,095


4,358


19,652


19,124


    Research and development expenses

459


384


2,031


1,640


    Cost of sales

108


94


374


338



5,662


4,836


22,057


21,102


Oracle transaction related expenses

2,050


-


2,050


-


Litigation charge, including accrued interest expense

-


-


3,700


0


Torex amortization expense

809


1,386


3,401


5,803


Torex restructuring charge

1,251


3,095


1,467


5,548


Gain on settlement/sale - auction rate securities

0


0


(338)


(3,494)


Total add back

9,772


9,317


32,337


28,959

Subtract tax effect on:









Oracle transaction related expenses

266


-


266


-


Stock option expense

1,697


1,495


6,912


6,721


Litigation charge, including accrued interest expense

-


-


1,410


0


Torex amortization expense

23


47


90


224


Torex restructuring charge

297


871


347


1,512

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

$      63,523


$         48,909


$         205,326


$            191,920










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

$           0.84


$             0.62


$                2.67


$                   2.38




















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,
2014


June 30,
2013

ASSETS





Current assets:





     Cash and cash equivalents and short-term investments


$         699,808


$         634,069

     Accounts receivable, net


287,616


228,455

     Inventory


57,583


49,273

    Income taxes receivable


1,619


12,771

     Deferred income taxes


13,715


15,022

     Prepaid expenses and other current assets


46,129


44,648

           Total current assets


1,106,470


984,238






Property, plant and equipment, net


57,966


44,127

Deferred income taxes, non-current


44,661


50,186

Goodwill


458,820


432,950

Intangible assets, net


35,140


37,754

Purchased and internally developed software costs, net


40,669


32,543

Other assets


8,918


7,240

Total Assets


$      1,752,644


$     1,589,038






LIABILITIES AND EQUITY





Current liabilities:





     Bank lines of credit


$                     -


$             1,757

     Accounts payable


78,231


73,099

     Accrued expenses and other current liabilities


180,973


155,491

     Income taxes payable


8,198


11,002

     Deferred revenue


193,897


177,236

         Total current liabilities


461,299


418,585






Income taxes payable, non-current


45,429


35,019

Deferred income taxes, non-current


543


1,157

Other non-current liabilities


15,915


16,007

         Total liabilities


523,186


470,768






Commitments and contingencies










Equity:





  MICROS Systems, Inc. stockholders' equity:





     Common stock


1,871


1,918

     Retained earnings


1,203,030


1,136,763

     Accumulated other comprehensive income (loss)


21,298


(23,625)

          Total MICROS Systems, Inc. stockholders' equity


1,226,199


1,115,056

  Noncontrolling interest


3,259


3,214

Total Equity


1,229,458


1,118,270






Total Liabilities and Equity


$      1,752,644


$     1,589,038






 

 

MICROS SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - in thousands)














 Fiscal Year Ended 






 June 30, 






2014


2013









Cash flows from operating activities:





Net income

$        182,179


$        171,847


Adjustments to reconcile net income to net cash provided by operating activities:





    Depreciation and amortization

22,086


22,573


    Share-based compensation

22,057


21,102


    Amortization of capitalized software

6,483


5,208


    Provision for losses on accounts receivable

1,540


3,563


    Litigation reserve, including interest expense

-


-


    Gain on sales of auction rate securities

-


(4,094)


    Other-than-temporary impairment losses on investments, net

-


600


    Provision for (benefit from) deferred income taxes

7,310


(2,702)


    Net (gain) loss on disposal of property, plant and equipment

28


-


    Other

106


-


    Changes in operating assets and liabilities (net of impact of acquisitions):





        (Increase) decrease in accounts receivable

(53,237)


2,430


        Increase in inventory

(6,982)


(5,302)


        Decrease (increase) in prepaid expenses and other assets

1,191


(7,833)


        Increase in accounts payable

3,198


3,163


        Increase (decrease) in accrued expenses and other current liabilities

24,061


(13,682)


        Increase (decrease) in income taxes assets and liabilities

17,951


(2,587)


        Increase in deferred revenue

11,490


9,239


Net cash flows provided by operating activities

239,461


203,525









Cash flows from investing activities:





Proceeds from maturities of investments

187,636


56,620


Proceeds from sales of auction rate securities

-


42,119


Purchases of investments

(110,984)


(186,371)


Purchases of property, plant and equipment

(31,627)


(23,282)


Internally developed and purchased software costs

(12,448)


(4,290)


Other


(1,415)


153


Net cash flows provided by (used in) investing activities

31,162


(115,051)









Cash flows from financing activities:





Repurchases of common stock

(215,721)


(176,603)


Proceeds from stock option exercises

74,026


9,056


Proceeds from advance on line of credit

539


4,014


Realized tax benefits from stock option exercises

3,763


3,323


Principal payments on line of credit

(1,893)


(2,061)


Cash paid for acquisition of non-controlling interest

-


(846)


Other


(189)


9


Net cash flows used in financing activities

(139,475)


(163,108)









Effect of exchange rate changes on cash and cash equivalents

9,200


(2,129)









Net increase (decrease) in cash and cash equivalents

140,348


(76,763)









Cash and cash equivalents at beginning of year

486,023


562,786

Cash and cash equivalents at end of year

$        626,371


$        486,023

SOURCE MICROS Systems, Inc.

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