Micros Systems (MCRS) 8-K Micros Reports Fiscal 2014 Results

Exhibit 99

 

Release Date: August 21, 2014	Contact:  Peter J. Rogers, Jr.
	Executive Vice President, Investor Relations
	443-285-8059

MICROS REPORTS FISCAL 2014 RESULTS

RECORD QUARTERLY AND FISCAL YEAR REVENUE, NET INCOME AND EPS

Columbia, MD – August 21, 2014— 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.

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- 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/InvestorsRelations/

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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

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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.

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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

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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

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