MCRS (MM)

Record Third Quarter Revenue, Net Income and EPS COLUMBIA, Md., April 27 /PRNewswire-FirstCall/ -- 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 third quarter ended March 31, 2006. 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 $171.1 million, an increase of $17.8 million, or 11.6%, over the same period last year. -- GAAP net income for the quarter was $15.6 million. GAAP net income for the nine-month period was $42.2 million. -- GAAP EPS for the quarter, per diluted share, was $0.38. GAAP EPS for the nine-month period, per diluted share, was $1.04. -- Net income for the quarter, before the share-based payment charge, a non-GAAP measure, was $17.8 million, an increase of $3.6 million, or 25.5% over the year ago period. Net income for the nine-month period, before the share based payment charge, was $47.2 million, an increase of $11.6 million, or 32.6% over the year ago period. -- EPS for the quarter, per diluted share, before the share-based payment charge, a non-GAAP measure, was $0.44, an increase of $0.09, or 25.7% over year ago period. EPS for the nine-month period, per diluted share, before the share-based payment charge, was $1.16, an increase of $0.26, or 28.9% over the year ago period. -- MICROS's financial results were Company records for the third fiscal quarter. Tom Giannopoulos, MICROS's Chairman and CEO, stated: "We are pleased with our execution and the number of new customer contracts signed across all segments in the quarter. We look forward to a strong fourth quarter as we aim for a record year in revenue and earnings." MICROS's guidance for its fiscal 2006 fourth quarter ending June 30, 2006 is for revenue between $180.0 million and $185.0 million, and non-GAAP net income, excluding the currently projected share-based payment charge for the fourth fiscal quarter, between $20.5 million and $21.2 million. Guidance for GAAP net income is between $18.8 million and $19.5 million. Guidance for the fiscal 2006 year ending June 30, 2006 has been increased for revenue to be between $667.0 million and $672.0 million and increased for non-GAAP net income, excluding the currently projected share-based payment charge for the fiscal year, to be between $67.7 million and $68.4 million, or non-GAAP earnings per diluted share between $1.66 and $1.68. Guidance for GAAP net income has been increased to be between $60.6 million and $61.3 million, or earnings per diluted share of $1.50 to $1.51. 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. 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 fourth quarter ending June 30, 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 April 27, 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) Third Quarter Ended Nine-Months Ended March 31, March 31, 2006 2005 2006 2005 Revenue: Hardware $56,087 $49,871 $152,585 $131,804 Software 28,788 28,762 85,045 75,183 Service 86,266 74,719 249,493 218,257 Total revenue 171,141 153,352 487,123 425,244 Cost of sales: Hardware 38,234 32,628 103,371 88,220 Software 6,051 6,704 18,458 17,965 Service (*) 41,773 36,226 119,978 105,040 Total cost of sales 86,058 75,558 241,807 211,225 Gross margin 85,083 77,794 245,316 214,019 Selling, general and administrative expenses 51,834 48,540 151,492 134,397 Research and development expenses 6,475 7,201 19,162 20,864 Depreciation and amortization 2,450 2,681 7,557 7,627 Stock option expense (*) 2,402 -- 6,502 -- Total operating expenses 63,161 58,422 184,713 162,888 Income from operations 21,922 19,372 60,603 51,131 Non-operating income (expense), net 1,430 (254) 2,608 1,081 Income before taxes, minority interests, and equity in net earnings of affiliates 23,352 19,118 63,211 52,212 Income tax provision 7,589 4,777 20,544 16,029 Income before minority interests and equity in net earnings of affiliates 15,763 14,341 42,667 36,183 Minority interests and equity in net earnings of affiliates (169) (163) (517) (591) Net income (GAAP) $15,594 $14,178 $42,150 $35,592 Net income per common share - diluted (GAAP) $0.38 $0.35 $1.04 $0.90 Weighted-average number of shares outstanding - diluted 40,730 40,038 40,648 39,503 Reconciliation of GAAP Net Income and EPS, and Net Income and EPS before share-based payment charge, i.e. stock option expense Net income (GAAP) $15,594 $14,178 $42,150 $35,592 Add back: (*) Stock option expense COGS - service 25 25 Selling, general and administrative expenses 2,329 - 6,359 - Research and development expenses 73 - 143 - Stock option expense included in operating expenses 2,402 - 6,502 - Total stock option expense 2,427 - 6,527 - Subtract: Total tax effect on stock option expense 227 1,472 Net income (before share- based payment charge) $17,794 $14,178 $47,205 $35,592 Net income per common share- diluted (before share-based payment charge) $0.44 $0.35 $1.16 $0.90 MICROS SYSTEMS, INC. CONSOLIDATED BALANCE SHEET (Unaudited - in thousands) March 31, June 30, 2006 2005 ASSETS Current assets: Cash and cash equivalents $182,998 $153,521 Accounts receivable, net 150,077 131,423 Inventories, net 45,153 42,664 Deferred income taxes 13,111 10,883 Prepaid expenses and other current assets 27,074 28,934 Total current assets 418,413 367,425 Property, plant and equipment, net 23,382 21,308 Deferred income taxes, non-current 13,679 18,195 Goodwill 104,680 86,781 Intangible assets, net 10,764 10,958 Purchased and internally developed software costs, net 37,071 40,160 Other assets 2,525 2,401 Total assets $610,514 $547,228 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank lines of credit $1,728 $2,387 Accounts payable 37,433 38,253 Accrued expenses and other current liabilities 81,256 74,543 Current portion of capital lease obligations 142 162 Income taxes payable 7,991 3,260 Deferred income taxes 362 362 Deferred service revenue 74,070 58,022 Total current liabilities 202,982 176,989 Capital lease obligations, net of current portion 361 251 Deferred income taxes, non-current 14,648 16,105 Other non-current liabilities 7,907 5,905 Commitments and contingencies Minority interests 3,010 2,807 Shareholders' equity: Common stock 485 482 Capital in excess of par 94,401 99,990 Retained earnings 281,470 239,320 Accumulated other comprehensive income 5,250 5,379 Total shareholders' equity 381,606 345,171 Total liabilities and shareholders' equity $610,514 $547,228 DATASOURCE: MICROS Systems, Inc. CONTACT: Peter J. Rogers, Jr., Senior Vice President, Investor Relations of MICROS Systems, Inc., +1-443-285-8059, Web site: http://www.micros.com/

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