MCRS (MM)

Record First Quarter Revenue, Net Income and EPS; Revenue, Net Income and EPS Exceed Expectations COLUMBIA, Md., Oct. 26 /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 2007 first quarter ended September 30, 2006. FINANCIAL HIGHLIGHTS - MICROS implemented the Statement of Financial Accounting Standards No. 123(R) ("FASB 123R"), "Share-based Payments," which became effective July 1, 2005, during its fiscal year 2006. 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 restatement of previously issued financial statements. MICROS will report its net income and earnings per share during fiscal year 2007 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. - Revenue for the quarter was $173.7 million, an increase of $21.7 million, or 14.3%, over the same period last year. Revenue exceeded consensus expectations and was above MICROS's first quarter guidance. - GAAP net income for the quarter was $15.1 million, an increase of $2.8 million, or 22.3%, over the same period last year. - GAAP EPS, per diluted share, was $0.37 per share, an increase of $0.07, or 23.3%, over the same period last year. - Net income, before the share-based payment charge, a non-GAAP measure, was $17.4 million, an increase of $3.7 million, or 27.2%, over the same period last year. - EPS, per diluted share, before the share-based payment charge, a non- GAAP measure, was $0.43 per share, an increase of $0.09 per share, or 26.5% over the same period last year. - Net income and earnings per diluted share, before and after the share- based payment charge, exceeded consensus expectations and were above first quarter guidance. - MICROS's financial results were Company records for the first fiscal quarter. Tom Giannopoulos, MICROS's Chairman and CEO, stated: "We are pleased with the results for our first quarter and the excellent start of our fiscal year." MICROS's guidance for its fiscal 2007 second quarter ending December 31, 2006 is for revenue between $186.0 million and $189.0 million, and GAAP net income between $16.7 million and $17.7 million, or GAAP earnings per share between $0.41 and $0.43. Guidance for net income, excluding the currently projected share-based payment charge for the second fiscal quarter, is between $19.0 million and $20.0 million, or non-GAAP earnings per share between $0.46 and $0.49. Guidance for the fiscal 2007 year ending June 30, 2007 remains the same at revenue between $778.0 million and $781.0 million; 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; and GAAP net income between $78.3 million and $80.3 million, or earnings per diluted share of $1.90 to $1.94. 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 above where MICROS provides guidance for its fiscal 2007 second quarter ending December 31, 2006, and its fiscal 2007 year ending June 30, 2007. 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 October 26, 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) First Quarter Ended Sept. 30, 2006 2005 Revenue: Hardware $54,142 $44,053 Software 27,757 27,879 Service 91,802 80,072 Total revenue 173,701 152,004 Cost of sales: Hardware 33,966 29,582 Software 7,360 5,801 Service 43,706 38,460 Total cost of sales 85,032 73,843 Gross margin 88,669 78,161 Selling, general and administrative expenses 55,589 49,359 Research and development expenses 6,793 6,340 Depreciation and amortization 2,823 2,497 Stock option expense (*) 2,815 1,913 Total operating expenses 68,020 60,109 Income from operations 20,649 18,052 Non-operating income, net 2,231 357 Income before taxes, minority interests and equity in net earnings of affiliates 22,880 18,409 Income tax provision 7,665 5,983 Income before minority interests and equity in net earnings of affiliates 15,215 12,426 Minority interests and equity in net earnings of affiliates (104) (73) Net income (GAAP) $15,111 $12,353 Net income per common share - diluted (GAAP) $0.37 $0.30 Weighted-average number of shares outstanding -- diluted 40,651 40,575 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) $15,111 $12,353 Add back: (*) Stock option expense: Selling, general and administrative expenses 2,692 1,875 Research and development expenses 123 38 Total stock option expense 2,815 1,913 Subtract: Total tax effect on stock option expense 571 622 Net income (before share-based payment charge) $17,355 $13,644 Net income per common share -- diluted (before share-based payment charge) $0.43 $0.34 MICROS SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited - in thousands) September 30, June 30, 2006 2006 ASSETS Current assets: Cash and cash equivalents $262,169 $237,222 Accounts receivable, net 142,111 141,159 Inventories, net 45,979 46,637 Deferred income taxes 20,427 16,649 Prepaid expenses and other current assets 21,535 15,485 Total current assets 492,221 457,152 Property, plant and equipment, net 23,863 23,794 Deferred income taxes, non-current 16,249 16,192 Goodwill, net 105,774 98,581 Intangible assets, net 11,677 10,427 Purchased and internally developed software costs, net 36,984 38,328 Other assets 3,748 3,383 Total assets $690,516 $647,857 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank lines of credit $ 3,978 $ 2,134 Accounts payable 37,428 36,022 Accrued expenses and other current liabilities 83,597 84,897 Current portion of capital lease obligations 200 89 Income taxes payable 10,163 12,416 Deferred income taxes 0 227 Deferred service revenue 82,448 68,246 Total current liabilities 217,814 204,031 Capital lease obligations, net of current portion 326 424 Deferred income taxes, non-current 15,747 14,998 Other non-current liabilities 8,604 8,146 Commitments and contingencies Minority interests 3,527 3,142 Shareholders' equity: Common stock 492 487 Capital in excess of par 114,048 100,723 Retained earnings 317,959 302,848 Accumulated other comprehensive income 11,999 13,058 Total shareholders' equity 444,498 417,116 Total liabilities and shareholders' equity $690,516 $647,857 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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