Exhibit 99.2 — UNAUDITED PRO FORMA FINANCIAL INFORMATION | |||
On May 1, 2003, MICROS Systems, Inc. acquired Datavantage Corporation, a privately held software application developer and system integrator specializing in the specialty and apparel retail market, for total purchase price of approximately $52,300,000. The consideration consisted of $33,800,000 in cash ($28,600,000 paid at closing and $5,200,000 to be paid 18 months after closing subject to certain holdback rights), approximately $300,000 in estimated transaction costs and 719,360 shares of MICROS common stock, valued at $18,200,000. | |||
The total purchase price will be allocated as follows (in thousands). This allocation is subject to change pending the completion of the final allocation of the fair value of the assets acquired and liabilities assumed. The impact of these changes could be material. |
Current assets | $ | 10,592 | ||
Fixed assets | 1,558 | |||
Deferred income taxes | 3,495 | |||
Goodwill and intangible assets | 45,093 | |||
Purchased and internally developed software costs | 6,140 | |||
Other assets | 122 | |||
Liabilities assumed | (14,700 | ) | ||
$ | 52,300 | |||
The following unaudited pro forma financial information gives effect to MICROS Systems, Inc.’s (“MICROS”) acquisition of Datavantage Corporation and DV Technology Holdings Corporation (collectively, “Datavantage”) as if the transaction had occurred on March 31, 2003 for purposes of the unaudited pro forma balance sheet, and as of July 1, 2001 and July 1, 2002 for purposes of the unaudited pro forma statements of income. The following unaudited pro forma statements are based on the historical statements of MICROS and Datavantage during the periods presented, adjusted to give effect to the acquisition. | |||
The accompanying unaudited pro forma financial information should be read in conjunction with the historical financial statements of MICROS (included in the Company’s Form 10-K) and Datavantage (included herein) and the related notes thereto. The unaudited pro forma financial information is not necessarily indicative of the operating results or financial position that would have occurred if the transaction had been consummated at the times indicated, nor is it necessarily indicative of the future financial position and the results of operations of MICROS. | |||
The pro forma adjustments are described in the accompanying notes and are based upon available information and various assumptions that management believes are reasonable. These adjustments give effect to events directly attributable to the transaction and do not reflect any integration costs or other synergies that management expects to realize as a result of the transaction. |
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MICROS SYSTEMS, INC. PROFORMA CONDENSED COMBINED BALANCE SHEET – MARCH 31, 2003 (UNAUDITED – IN THOUSANDS) |
HISTORICAL | HISTORICAL | PROFORMA | PROFORMA | |||||||||||||||||||
MICROS SYSTEMS | DATAVANTAGE | ADJUSTMENTS | COMBINED | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 56,531 | $ | 627 | $ | (16,600 | ) | (a | ) | $ | 40,558 | |||||||||||
Accounts receivable, net | 91,439 | 8,624 | — | 100,063 | ||||||||||||||||||
Inventories, net | 33,832 | 220 | — | 34,052 | ||||||||||||||||||
Deferred income taxes | 7,103 | 778 | 7,881 | |||||||||||||||||||
Prepaid expenses and other current assets | 15,403 | 343 | — | 15,746 | ||||||||||||||||||
Total current assets | 204,308 | 10,592 | (16,600 | ) | 198,300 | |||||||||||||||||
Property, plant & equipment, net | 19,562 | 1,558 | — | 21,120 | ||||||||||||||||||
Deferred income taxes, non-current | 20,307 | 6,724 | (3,229 | ) | (b | ) | 23,802 | |||||||||||||||
Goodwill and intangible assets, net | 30,237 | — | 45,093 | (b | ) | 75,330 | ||||||||||||||||
Purchased and internally developed software costs, net | 32,092 | 4,466 | 1,674 | (b | ) | 38,232 | ||||||||||||||||
Other assets | 3,207 | 122 | — | 3,329 | ||||||||||||||||||
TOTAL ASSETS | $ | 309,713 | $ | 23,462 | $ | 26,938 | $ | 360,113 | ||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||
Bank lines of credit | $ | 4,131 | $ | 1,200 | $ | 12,000 | (a | ) | $ | 17,331 | ||||||||||||
Current portion of capital lease obligations | 131 | — | — | 131 | ||||||||||||||||||
Accounts payable | 20,338 | 563 | 300 | (a | ) | 21,201 | ||||||||||||||||
Accrued expenses and other liabilities | 37,685 | 1,648 | — | 39,333 | ||||||||||||||||||
Deferred service revenue | 41,935 | 4,789 | — | 46,724 | ||||||||||||||||||
Total current liabilities | 104,220 | 8,200 | 12,300 | 124,720 | ||||||||||||||||||
Capital lease obligations, net of current portion | 284 | — | — | 284 | ||||||||||||||||||
Deferred income taxes, non-current | 9,716 | — | 9,716 | |||||||||||||||||||
Note payable, non-current | — | 6,500 | — | 6,500 | ||||||||||||||||||
Other noncurrent liabilities | 1,441 | — | 5,200 | (a | ) | 6,641 | ||||||||||||||||
Minority interest | 2,326 | — | — | 2,326 | ||||||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||||
Common stock | 433 | 11 | 7 | (a | ),(c) | 451 | ||||||||||||||||
Treasury stock | — | (12,025 | ) | 12,025 | (c | ) | — | |||||||||||||||
Capital in excess of par | 52,140 | 10,181 | 8,001 | (a | ),(c) | 70,322 | ||||||||||||||||
Retained earnings | 143,594 | 10,595 | (10,595 | ) | (c | ) | 143,594 | |||||||||||||||
Accumulated other comprehensive loss | (4,441 | ) | — | — | (4,441 | ) | ||||||||||||||||
Total stockholders’ equity | 191,726 | 8,762 | 9,438 | 209,926 | ||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 309,713 | $ | 23,462 | $ | 26,938 | $ | 360,113 | ||||||||||||||
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MICROS SYSTEMS, INC. BALANCE SHEET – PROFORMA ADJUSTMENT NOTES | |||
The total estimated purchase consideration of the Datavantage acquisition has been allocated on a preliminary basis to assets and liabilities based on management’s estimate of their fair values. The excess of the purchase cost over the fair value of the tangible and identifiable intangible assets acquired less liabilities assumed has been allocated to goodwill. This allocation is subject to change pending the completion of the final allocation of the fair value of the assets acquired and liabilities assumed. The impact of these changes could be material. | |||
The adjustments to the unaudited pro forma condensed combined balance sheet as of March 31, 2003 have been calculated as if the acquisition occurred on March 31, 2003 and are as follows: |
(a) | To reflect the acquisition of Datavantage for a total estimated purchase price of approximately $52,300,000. The purchase consideration consists of the following: |
- | Payment of cash in the amount of $28,600,000, which included available cash of $16,600,000 and proceeds obtained from two loans from MICROS’ line of credit. The loans were $7,000,000 and $5,000,000 with variable interest rates of 3.0175% and 3.05625%, respectively, at May 1, 2003. | ||
- | Issuance of 719,360 shares of MICROS unregistered common stock, with an estimated fair value of $18,200,000. The fair value per share of MICROS’ common stock is based on the formula used to derive the number of shares specified in the acquisition agreement, which complies with the provisions of EITF Issue No. 99-12,Determination of the Measurement Date for the Market Price of Acquirer Securities Issued in a Purchase Business Combination. | ||
- | $5,200,000 of consideration that is to be paid 18 months after the closing date of the acquisition, subject to certain holdback rights. | ||
- | $300,000 of estimated acquisition related expenses. |
(b) | Recognition of the excess purchase cost of $52,300,000 over the fair value of the net assets acquired, have been recorded as goodwill as follows (in thousands): |
Book value of net assets | $ | 8,762 | |||
Fair value changes: | |||||
Intangibles | 8,074 | ||||
Deferred income taxes | (3,229 | ) | |||
Adjusted net assets | 13,607 | ||||
Purchase price | (52,300 | ) | |||
Goodwill | $ | 38,693 | |||
(c) | To reflect the elimination of the historical shareholders’ equity accounts of Datavantage. |
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MICROS SYSTEMS, INC. PRO FORMA CONDENSED STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 2002 (UNAUDITED – IN THOUSANDS, EXCEPT PER SHARE DATA) |
HISTORICAL | HISTORICAL (*) | PROFORMA | PROFORMA | ||||||||||||||||||||||
MICROS SYSTEMS | DATAVANTAGE | ADJUSTMENTS | COMBINED | ||||||||||||||||||||||
Revenue | $ | 367,163 | $ | 43,842 | $ | — | $ | 411,005 | |||||||||||||||||
Cost of sales | 190,026 | 18,377 | — | 208,403 | |||||||||||||||||||||
Gross margin | 177,137 | 25,465 | — | 202,602 | |||||||||||||||||||||
Selling, general and administrative expenses | 123,011 | 13,680 | — | 136,691 | |||||||||||||||||||||
Research and development expenses | 19,320 | 3,220 | — | 22,540 | |||||||||||||||||||||
Depreciation and amortization | 16,042 | 690 | 974 | (A | ) | 17,706 | |||||||||||||||||||
Income from operations | 18,764 | 7,875 | (974 | ) | 25,665 | ||||||||||||||||||||
Non-operating income (expense) | 581 | (735 | ) | (475 | ) | (B | ),(C) | (629 | ) | ||||||||||||||||
Income (loss) before taxes, minority interests and equity in net earnings of affiliates | 19,345 | 7,140 | (1,449 | ) | 25,036 | ||||||||||||||||||||
Income tax expense (benefit) | 6,577 | 2,711 | (580 | ) | (D | ) | 8,708 | ||||||||||||||||||
Income before minority interests and equity in net earnings of affiliates | 12,768 | 4,429 | (869 | ) | 16,328 | ||||||||||||||||||||
Minority interests and equity in net earnings of affiliates | (529 | ) | — | — | (529 | ) | |||||||||||||||||||
Net income | $ | 12,239 | $ | 4,429 | $ | (869 | ) | $ | 15,799 | ||||||||||||||||
Net income per common share | |||||||||||||||||||||||||
Basic | $ | 0.70 | $ | 0.87 | |||||||||||||||||||||
Diluted | $ | 0.69 | $ | 0.85 | |||||||||||||||||||||
Weighted-average number of shares outstanding | |||||||||||||||||||||||||
Basic | 17,510 | 18,229 | (E | ) | |||||||||||||||||||||
Diluted | 17,850 | 18,569 | (E | ) | |||||||||||||||||||||
* Had the acquisition occurred on July 1, 2001, approximately $945 of advisory and financing fees would not have been incurred and the pro forma combined net income would have been $16,365. |
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MICROS SYSTEMS, INC. PRO FORMA CONDENSED STATEMENT OF OPERATIONS NINE MONTHS ENDED MARCH 31, 2003 (UNAUDITED – IN THOUSANDS, EXCEPT PER SHARE DATA) |
HISTORICAL | HISTORICAL (*) | PROFORMA | PROFORMA | ||||||||||||||||||||||
MICROS SYSTEMS | DATAVANTAGE | ADJUSTMENTS | COMBINED | ||||||||||||||||||||||
Revenue | $ | 279,649 | $ | 38,100 | $ | — | $ | 317,749 | |||||||||||||||||
Cost of sales | 143,283 | 16,182 | — | 159,465 | |||||||||||||||||||||
Gross margin | 136,366 | 21,918 | — | 158,284 | |||||||||||||||||||||
Selling, general and administrative expenses | 93,752 | 13,715 | — | 107,467 | |||||||||||||||||||||
Research and development expenses | 13,380 | 3,361 | — | 16,741 | |||||||||||||||||||||
Depreciation and amortization | 6,170 | 748 | 731 | (A | ) | 7,647 | |||||||||||||||||||
Income (loss) from operations | 23,064 | 4,094 | (731 | ) | 26,427 | ||||||||||||||||||||
Non-operating (expense) | (873 | ) | (792 | ) | (360 | ) | (B | ),(C) | (2,025 | ) | |||||||||||||||
Income (loss) before taxes, minority interests and equity in net earnings of affiliates | 22,191 | 3,302 | (1,091 | ) | 24,402 | ||||||||||||||||||||
Income tax expense (benefit) | 8,877 | 1,354 | (436 | ) | (D | ) | 9,795 | ||||||||||||||||||
Income (loss) before equity in net earnings of affiliates | 13,314 | 1,948 | (655 | ) | 14,607 | ||||||||||||||||||||
Minority interests and equity in net earnings of affiliates | (319 | ) | — | — | (319 | ) | |||||||||||||||||||
Net income (loss) | $ | 12,995 | $ | 1,948 | $ | (655 | ) | $ | 14,288 | ||||||||||||||||
Net income per common share | |||||||||||||||||||||||||
Basic | $ | 0.75 | $ | 0.79 | |||||||||||||||||||||
Diluted | $ | 0.74 | $ | 0.78 | |||||||||||||||||||||
Weighted-average number of shares outstanding | |||||||||||||||||||||||||
Basic | 17,408 | 18,127 | (E | ) | |||||||||||||||||||||
Diluted | 17,663 | 18,382 | (E | ) | |||||||||||||||||||||
* Had the acquisition occurred on July 1, 2002, approximately $971 of advisory and financing fees would not have been incurred and the pro forma combined net income would have been $14,871. |
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MICROS SYSTEMS, INC. STATEMENT OF OPERATIONS – PRO FORMA ADJUSTMENT NOTES | |||
The adjustments to the unaudited pro forma condensed combined consolidated statements of operations for the year ended June 30, 2002 and the nine months ended March 31, 2003 have been calculated assuming that the acquisition occurred as of July 1, 2001 and July 1, 2002, respectively, and are as follows: |
(A) | To reflect the amortization of intangible assets resulting in the acquisition of Datavantage. The intangible assets will be amortized ratably over an estimated useful life by type as follows: |
License agreements | 5 to 9 years | |||
Customer lists | 10 years |
The provisions of SFAS 142,Goodwill and Other Intangible Assets, eliminates the amortization of goodwill for all acquisitions consummated on or after July 1, 2001. As such, goodwill that resulted as if the acquisition occurred on July 1, 2001 and July 1, 2002 would not require amortization under SFAS 142. | |||
(B) | To reflect interest expense that would result from the issuance of $12 million from the line of credit. MICROS intends to repay $5 million of these borrowings within two months of the acquisition date. Interest expense is estimated by assuming that the $7 million line of credit remained unpaid for the entire pro forma periods and the $5 million line of credit was repaid 2 months after closing. The assumed interest rates were those prevailing at the time the acquisition was closed. | ||
(C) | Adjustment to record a decrease in interest income to reflect cash used for the acquisition of Datavantage and the repayment of the line of credit of $5 million that occurred two months subsequent to the acquisition. The reduction in interest income is recorded assuming a rate of 1.15% per annum, which is based upon an estimate of the prevailing interest rates at the closing date of the acquisition. | ||
(D) | To reflect the tax effect of pro forma adjustments for interest expense, interest income, and amortization of intangibles, based upon an assumed tax rate of 40%. | ||
(E) | Basic and diluted net income per share reflects the issuance of 719,360 shares of MICROS common stock, as if the shares had been outstanding for the entire period. |
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