MCRS (MM)

Record Quarterly and Fiscal Year Revenue, Net Income and EPS COLUMBIA, Md., Aug. 29 /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 fourth quarter and fiscal year ending June 30, 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 $191.8 million, an increase of $19.8 million, or 11.5%, over the same period last year. Revenue for the fiscal year was $679.0 million, an increase of $81.7 million, or 13.7%, over the previous fiscal year. -- GAAP net income for the quarter was $21.4 million. GAAP net income for the fiscal year was $63.5 million. -- GAAP EPS for the quarter, per diluted share, was $0.53. GAAP EPS for the fiscal year, per diluted share, was $1.56. -- Net income for the quarter, before the share-based payment charge, a non-GAAP measure, was $23.4 million, an increase of $5.4 million, or 29.7% over the year ago period. Net income for the fiscal year, before the share-based payment charge, was $70.6 million, an increase of $17.0 million, or 31.6% over the previous fiscal year. -- EPS for the quarter, per diluted share, before the share-based payment charge, a non-GAAP measure, was $0.58, an increase of $0.13, or 28.9% over year ago period. EPS for the fiscal year, per diluted share, before the share-based payment charge, was $1.74, an increase of $0.39, or 28.9% over the previous fiscal year. -- MICROS's financial results were Company records for both a fiscal quarter and for a fiscal year. Tom Giannopoulos, MICROS's Chairman and CEO, stated: "We are extremely pleased with the record results for the fourth quarter and fiscal year. We are proud of our achievements and are appreciative of the trust that customers put in our products and services. The quality of our products and the outstanding efforts of our employees continue to contribute to our success." MICROS's guidance for its fiscal 2007 first quarter ending September 30, 2006 is for revenue between $170.0 million and $173.0 million, and non-GAAP net income, excluding the currently projected share-based payment charge for the first fiscal quarter, between $15.3 million and $16.5 million, or non-GAAP earnings per share between $0.38 and $0.41. Guidance for GAAP net income is between $13.6 million and $14.7 million, or earnings per diluted share of $0.33 to $0.36. Guidance for the fiscal 2007 year ending June 30, 2007 is for revenue between $778.0 million and $781.0 million and non-GAAP net income, excluding the currently projected share-based payment charge for the fiscal year, between $86.5 million and $88.7 million, or non-GAAP earnings per diluted share between $2.10 and $2.14. Guidance for GAAP net income is between $78.3 million and $80.3 million, or earnings per diluted share of $1.90 to $1.94. 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 2007 first quarter ending September 30, 2006, and its fiscal 2007 year ending June 30, 2007, 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 August 29, 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 443-285-8112 or at MICROS's website at http://www.micros.com/. MICROS SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Fourth quarter Twelve months ended June 30, ended June 30, 2006 2005 2006 2005 Revenue: Hardware $62,976 $59,982 $215,561 $191,785 Software 35,048 31,187 120,093 106,370 Service 93,805 80,852 343,299 299,109 Total revenue 191,829 172,021 678,953 597,264 Cost of sales: Hardware 40,690 39,130 144,061 127,349 Software 5,030 4,857 23,488 22,822 Service 45,742 40,269 165,721 145,309 Total cost of sales 91,462 84,256 333,270 295,480 Gross margin 100,367 87,765 345,683 301,784 Selling, general and administrative expenses 56,484 51,000 207,976 185,398 Research and development expenses 7,709 6,536 26,871 27,399 Depreciation and amortization 2,902 2,485 10,459 10,112 Stock option expense (*) 2,599 0 9,100 0 Total operating expenses 69,694 60,021 254,406 222,909 Income from operations 30,673 27,744 91,277 78,875 Non-operating income, net 1,781 1,138 4,388 2,219 Income before taxes, minority interests, and equity in net earnings of affiliates 32,454 28,882 95,665 81,094 Income tax provision 10,912 10,732 31,455 26,761 Income before minority interests and equity in net earnings of affiliates 21,542 18,150 64,210 54,333 Minority interests and equity in net earnings of affiliates (165) (82) (682) (673) Net income (GAAP) $21,377 $18,068 $63,528 $53,660 Net income per common share - diluted (GAAP) $0.53 $0.45 $1.56 $1.35 Weighted-average number of shares outstanding - diluted 40,570 40,520 40,624 39,803 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) $21,377 $18,068 $63,528 $53,660 Add back: (*) Stock option expense COGS - service 10 0 35 0 Selling, general and administrative expenses 2,492 0 8,851 0 Research and development expenses 107 0 249 0 Stock option expense included in operating expenses 2,599 0 9,100 0 Total stock option expense 2,609 0 9,135 0 Subtract: Total tax effect on stock option expense 555 2,026 Net income (before share-based payment charge) $23,431 $18,068 $70,637 $53,660 Net income per common share-diluted (before share- based payment charge) $0.58 $0.45 $1.74 $1.35 MICROS SYSTEMS, INC. CONSOLIDATED BALANCE SHEET (In thousands) June 30, June 30, 2006 2005 ASSETS Current assets: Cash and cash equivalents $237,222 $153,521 Accounts receivable, net 141,159 131,423 Inventories, net 46,637 42,664 Deferred income taxes 16,649 10,883 Prepaid expenses and other current assets 15,485 28,934 Total current assets 457,152 367,425 Property, plant and equipment, net 23,794 21,308 Deferred income taxes, non-current 16,192 18,195 Goodwill 98,581 86,781 Intangible assets, net 10,427 10,958 Purchased and internally developed software costs, net 38,328 40,160 Other assets 3,383 2,401 Total assets $647,857 $547,228 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank lines of credit $2,134 $2,387 Accounts payable 36,022 38,253 Accrued expenses and other current liabilities 84,897 74,543 Current portion of capital lease obligations 89 162 Income taxes payable 12,416 3,260 Deferred income taxes 227 362 Deferred service revenue 68,246 58,022 Total current liabilities 204,031 176,989 Capital lease obligations, net of current portion 424 251 Deferred income taxes, non-current 14,998 16,105 Other non-current liabilities 8,146 5,905 Commitments and contingencies Minority interests 3,142 2,807 Shareholders' equity: Common stock 487 482 Capital in excess of par 100,723 99,990 Retained earnings 302,848 239,320 Accumulated other comprehensive income 13,058 5,379 Total shareholders' equity 417,116 345,171 Total liabilities and shareholders' equity $647,857 $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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