EXHIBIT 99.1
FOR IMMEDIATE RELEASE
For More Information,
Please Contact
John Heyman – Chief Executive Officer (770) 576-6705
Mark Haidet – Chief Financial Officer (770)-576-6404
Melissa Coley - Investor Relations (770) 576-6577
Radiant Systems, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2003
Company strengthens strategic position with disposition of unprofitable operating unit and acquisition of Aloha Technologies, Inc.
ATLANTA—(BUSINESS WIRE)—February 25, 2004—Radiant Systems, Inc. (NASDAQ:RADS -News), a leading provider of systems for managing site operations of retail and hospitality businesses, today announced financial results for the fourth quarter and year ended December 31, 2003.
Summary financial results for the fourth quarter are as follows:
• | Total revenues for the fourth quarter ended December 31, 2003 were $26.7 million, a decrease of 35% over revenues of $41.2 million for the same period in 2002. |
• | Net loss for the fourth quarter ended December 31, 2003, was $5.4 million, or $.19 per diluted share, a decrease of $7.3 million, or $.26 per diluted share, compared to net income of $1.9 million, or $0.07 per diluted share, for the same period in 2002. |
• | Adjusted net loss for the fourth quarter ended December 31, 2003, which excludes asset impairment charges, was $4.5 million, or $.16 per diluted share, a decrease of $6.4 million, or $.23 per diluted share, compared to net income of $1.9 million, or $0.07 per diluted share, for the same period in 2002. |
• | The Store Systems business unit contributed revenue of approximately $22.2 million and an adjusted operating loss of approximately $800,000 compared to revenue of $23.4 million and adjusted operating loss of $300,000 for the period ended September 30, 2003. |
During the quarter, the Company wrote-off approximately $535,000 of capitalized software as an expense to cost of goods sold and $420,000 of lease obligations as an operating expense. In addition, the Company took a charge of $1.2 million to fully reserve it’s deferred tax assets due to the losses incurred over the past twelve months and uncertainty of the Company’s ability to fully utilize tax benefits in the future.
For the year ended December 31, 2003, total revenues were $111.8 million with a net loss of $47.7 million, or $1.71 per diluted share. The Company had an adjusted net loss of $12.2 million or $.44 per diluted share. For the year ended December 31, 2002, the Company reported revenues of $146.2 million with a net income of $6.5 million, or $.23 per diluted share.
The Company provides adjusted net (loss)/income and adjusted net (loss)/income per share in this press release as additional information of the Company’s operating results. The measures are not in accordance with, or an alternative for, generally accepted accounting practices (“GAAP”) and may be different from net income and per share measures used by other companies. Net (loss)/income has been adjusted to exclude the effects of the impairment of certain intangible assets. The Company believes that this presentation of adjusted net (loss)/income and adjusted net (loss)/income per share provides useful information to investors regarding certain additional financial and business trends relating to the Company’s financial condition and results of operations.
John Heyman, the Company’s chief executive officer commented, “We are optimistic that we will deliver significantly improved operating results in 2004. We have divested our Enterprise business unit, which had a material negative impact on our operating profits, cash and strategic focus. Additionally, our acquisition of Aloha Technologies, which we completed in January of 2004, immediately strengthens our stable of products to sell across our industries, creates an exceptionally strong channel to provide the market reach we require and enhances our management team to better serve our customers and shareholders. We anticipate these actions, combined with improving market activity and the operational successes we had throughout 2003, will translate into much better financial results this year.”
Business highlights for the fourth quarter of 2003 include:
• | Expansion into new countries with multi-national operators |
• | Delivered significant credit card marketing and loyalty functionality to a major oil company in Southeast Asia. |
• | Installed 300th Kroger grocery fueling site |
• | Installed 600th Circle K convenience store location |
• | Rolled out gift card functionality to 300 Holiday Station Store locations |
• | Completed the first chain-wide rollout of the Company’s advanced concession solution at a top exhibitor |
• | Piloted the Outdoor Kiosk and Concessions at Kiosk products which will be released in the first quarter |
• | Implemented new pilots of our customer self service product |
• | Released the P1550 point-of-sale hardware terminal |
• | Continued the rollout AFC Restaurants with 200 live sites |
• | Implemented new brand marketing programs for food service operators |
Mark Haidet, the Company’s chief financial officer commented, “The decline in the overall financial results for the quarter is primarily attributable to operational losses in the Enterprise segment as well as the impact of the business transition we have managed through. We continue to stay disciplined with our cost structure and have maintained a strong balance sheet to support our growth. Our working capital has remained strong with $33.8 million in cash at the end of the fourth quarter and we have maintained solid Days Sales Outstanding (“DSO’s”) of 64 days for the quarter.”
For 2004 the Company expects revenue in the range of $120 million to $130 million with earnings per share in the range of $.17 to $.26 excluding amortization of acquisition
related intangibles and discontinued operations. These estimates are on a pro-forma basis, excluding the operations of the Enterprise segment and including the operations of Aloha Technologies.
Mr. Haidet added, “We believe that the 2004 results will show marked improvement over 2003 as our core business strategy continues to evolve. While our corporate development activities have resulted in some short-term market impact, these transactions are now complete and have been well received by our markets. Thus, we anticipate increased business activity as the year progresses. Given this and normal cyclical spending patterns, we expect to have near breakeven profits in the first quarter with positive cash generation from operations and for earnings to pick up consistently throughout the remainder of the year.”
On January 14, 2004, Radiant announced that it completed the acquisition of Aloha Technologies, a leading provider of point-of-sale systems for the hospitality industry, and certain affiliated entities of Aloha. The consideration paid to Aloha consisted of $11 million in cash, a five-year note in the principal amount of $19 million (subject to a post-closing adjustment), a one-year note in the principal amount of $1.7 million, 2,353,846 shares of restricted Radiant common stock and the assumption of Aloha’s accounts payable, contractual obligations and certain other liabilities. On January 31, 2004, Radiant announced the completion of the divestiture of its enterprise software business, now known as BlueCube Software, to Erez Goren, the Company’s former Co-Chairman of the Board and Co-Chief Executive Officer. Pursuant to the terms of the transaction, Radiant contributed specified assets and liabilities of the enterprise software business, together with approximately $4.0 million in cash, to the newly formed subsidiary, and then transferred all of the shares of the new company to Erez Goren in exchange for the redemption of 2.0 million shares of common stock of the Company held by Mr. Goren. The shares redeemed represented approximately 7.0% of the Company’s outstanding shares.
Radiant will hold its fourth quarter 2003 conference call today at approximately 5 p.m. eastern daylight time. This call is being webcast and can be accessed at Radiant Systems’ web site athttp://ir.ccbn.com/ir.zhtml?t=rads&s=2100. The call will also be available via telephone at 1-888-334-7880, reference reservation # T480955R.
Founded in 1985, Radiant Systems, Inc. builds and delivers solutions for managing site operations of retail and hospitality businesses. Providing enterprise-wide visibility, Radiant’s back-office and point-of-sale technology enables businesses to deliver exceptional customer service while improving profitability. Headquartered in Atlanta, Radiant (www.radiantsystems.com) has deployed its solutions in more than 55,000 sites worldwide.
Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company’s financing plans; (ii) trends affecting the Company’s financial condition or results of operations, including the Company’s projected revenues and earnings per share guidance; (iii) the Company’s growth strategy and operating
strategy; (iv) the Company’s new or future product offerings, and (v) the declaration and payment of dividends. The words “may,” “would,” “could,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend,” “plans,” and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control. Actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Among the key risks, assumptions and factors that may affect operating results, performance and financial condition are the Company’s reliance on a small number of clients for a larger portion of its revenues, fluctuations in its quarterly results, its ability to continue and manage its growth, liquidity and other capital resources issues, competition and the other factors discussed in detail in the Company’s filings with the Securities and Exchange Commission.
RADIANT SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
December 31, 2003 | December 31, 2002 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 33,774 | 43,382 | ||||
Accounts receivable, net | 18,614 | 31,167 | |||||
Inventories | 13,098 | 13,542 | |||||
Other short-term assets | 4,688 | 4,122 | |||||
Total current assets | 70,174 | 92,213 | |||||
Property and equipment, net | 11,229 | 11,948 | |||||
Software development costs, net | 2,844 | 16,969 | |||||
Intangibles and other long-term assets | 8,457 | 24,126 | |||||
$ | 92,704 | 145,256 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | $ | 12,864 | 15,012 | ||||
Customer deposits and unearned revenue | 12,257 | 10,509 | |||||
Current portion of long-term debt | 524 | 491 | |||||
Total current liabilities | 25,645 | 26,012 | |||||
Client deposits and deferred revenues, net of current portion | — | 2,994 | |||||
Long-term deferred tax liability | — | 880 | |||||
Long-term debt, less current portion | 136 | 660 | |||||
Total liabilities | 25,781 | 30,546 | |||||
Shareholders’ equity | |||||||
Common stock, no par value; 100,000,000 shares authorized; 28,046,689 and 27,511,793 shares issued and outstanding | — | — | |||||
Additional paid-in capital | 116,481 | 116,752 | |||||
Accumulated other comprehensive income | 217 | 1 | |||||
Accumulated deficit | (49,775 | ) | (2,043 | ) | |||
Total shareholders’ equity | 66,923 | 114,710 | |||||
$ | 92,704 | 145,256 | |||||
RADIANT SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(Unaudited)
For the three months ended | For the year ended | |||||||||||||
December 31, 2003 | December 31, 2002 | December 31, 2003 | December 31, 2002 | |||||||||||
Revenues: | ||||||||||||||
System sales | $ | 10,728 | $ | 25,127 | $ | 47,320 | $ | 81,432 | ||||||
Client support, maintenance and other services | 15,945 | 16,088 | 64,449 | 64,725 | ||||||||||
Total revenues | 26,673 | 41,215 | 111,769 | 146,157 | ||||||||||
Cost of revenues: | ||||||||||||||
System sales | 6,716 | 14,266 | 28,785 | 43,348 | ||||||||||
Impairment of capitalized software costs and acquired software technology | 535 | — | 17,626 | — | ||||||||||
Client support, maintenance and other services | 10,375 | 10,787 | 43,906 | 39,000 | ||||||||||
Total cost of revenues | 17,626 | 25,053 | 90,317 | 82,348 | ||||||||||
Gross profit | 9,047 | 16,162 | 21,452 | 63,809 | ||||||||||
Operating Expenses: | ||||||||||||||
Product development | 4,206 | 3,364 | 15,714 | 14,470 | ||||||||||
Sales and marketing | 4,063 | 5,392 | 16,708 | 21,141 | ||||||||||
Depreciation and amortization | 1,068 | 1,162 | 4,319 | 4,997 | ||||||||||
Non-recurring charges | 418 | — | 17,940 | — | ||||||||||
General and administrative | 3,401 | 3,398 | 13,377 | 12,791 | ||||||||||
Income (loss) from operations | (4,109 | ) | 2,846 | (46,606 | ) | 10,410 | ||||||||
Other income | 107 | — | 232 | — | ||||||||||
Interest income, net | 70 | 209 | 373 | 754 | ||||||||||
Income (loss) before income taxes | (3,932 | ) | 3,055 | (46,001 | ) | 11,164 | ||||||||
Income tax provision | 1,478 | 1,122 | 1,730 | 4,623 | ||||||||||
Net income (loss) | $ | (5,410 | ) | $ | 1,933 | $ | (47,731 | ) | 6,541 | |||||
Basic and diluted income (loss) per share: | ||||||||||||||
Basic income (loss) per share | $ | (0.19 | ) | $ | 0.07 | $ | (1.71 | ) | $ | 0.24 | ||||
Diluted income (loss) per share | $ | (0.19 | ) | $ | 0.07 | $ | (1.71 | ) | $ | 0.23 | ||||
Weighted average shares outstanding: | ||||||||||||||
Basic | 27,760 | 27,989 | 27,835 | 27,753 | ||||||||||
Diluted | 27,760 | 29,143 | 27,835 | 28,995 | ||||||||||
Reconciliation of Adjusted Net (Loss) Income: | ||||||||||||||
Net (loss) income | $ | (5,410 | ) | $ | 1,933 | $ | (47,731 | ) | $ | 6,541 | ||||
Impairment of capitalized software costs | 535 | — | 16,723 | — | ||||||||||
Impairment of acquired software technology | — | — | 903 | — | ||||||||||
Impairment of TriYumf asset | — | — | 10,589 | — | ||||||||||
Impairment of goodwill | — | — | 6,172 | — | ||||||||||
Lease termination and severance costs | 418 | — | 1,179 | — | ||||||||||
Adjusted net (loss) income | $ | (4,457 | ) | $ | 1,933 | $ | (12,165 | ) | $ | 6,541 | ||||
Adjusted net (loss) income per diluted share | $ | (0.16 | ) | $ | 0.07 | $ | (0.44 | ) | $ | 0.23 | ||||
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