Exhibit 99.1
Radiant Systems, Inc. Reports First Quarter Results
Continued Growth Leads to Record First Quarter Revenue and
Adjusted Earnings of $0.13 Per Diluted Share
ATLANTA--(BUSINESS WIRE)--April 26, 2007--Radiant Systems, Inc.
(NASDAQ: RADS), a leading provider of innovative technology for the
hospitality and retail industries, today announced financial results
for the first quarter of 2007.
Summary financial results for the first quarter of 2007 are as
follows:
-- Total revenues for the period were $57.4 million, an increase
of 17 percent over revenues of $49.0 million for the same
period in 2006.
-- Net income for the period, including the impact of employee
stock option expense, was $2.0 million, or $0.06 per diluted
share, an increase of $1.4 million, or $0.04 per diluted
share, compared to the same period in 2006.
-- Adjusted net income (non-GAAP) for the period, which excludes
amortization of acquisition-related intangible assets,
non-recurring items and compensation expense related to the
issuance of employee stock options, was $4.4 million, or $0.13
per diluted share, an increase of $1.0 million, or $0.03 per
diluted share, compared to the same period in 2006.
John Heyman, the Company's chief executive officer said, "We are
very pleased with the great start of another exciting year. We have
strong momentum in our business and we believe that will translate
into continued growth in 2007."
Heyman added, "We continue to see strong demand across our
segments. Our pipeline is growing, our customer base is diverse and
our products are delivering high returns for our customers. Execution
against our operational and strategic initiatives should drive
continued growth throughout the year."
"We are very pleased with the progression of our overall financial
model," said Mark Haidet, the Company's chief financial officer. "We
continue to have good visibility into our revenue opportunities and
see leverage in our operating model. Our working capital grew by $3.7
million in the quarter and, we expect that cash from annual operations
should be in line with adjusted net income for the year."
Haidet continued, "We are re-affirming our annual revenue guidance
and increasing our EPS guidance based on a favorable change in our
anticipated cash tax rate. Our guidance is modeled on a 15% cash tax
rate which has been reduced from 20% due to our increased visibility
into utilization of research and development tax credits for the year.
This change did not have a material impact on our EPS reported in the
first quarter"
The Company's updated guidance is as follows:
Adjusted
Revenue Earnings
Range (non-GAAP) /
(millions) Share Range
- ---------------------------------------- ------------ ----------------
Quarter ending June 30, 2007 $ 59 - $ 61 $ .14 - $.15
- ---------------------------------------- ------------ ----------------
Year ending Dec. 31, 2007 - previous $245 - $260 $ .64 - $.67
- ---------------------------------------- ------------ ----------------
Year ending Dec. 31, 2007 - updated $245 - $260 $ .67 - $.70
- ---------------------------------------- ------------ ----------------
Commencing in the first quarter of 2006, the Company implemented
the Statement of Financial Accounting Standards No. 123R ("FAS 123R").
FAS 123R requires companies to expense the fair value of grants made
under stock option programs over the vesting period of the options.
This share-based compensation expense is a non-cash expense. The
Company utilized the "Modified Prospective Application" transition
method to adopt FAS 123R. In its press releases, the Company reports
its net income and earnings per share on both Generally Accepted
Accounting Principles ("GAAP") (which includes the non-cash
share-based compensation charge) and non-GAAP (which excludes the
non-cash share-based compensation charge) bases in order to facilitate
analysis of the business and meaningful period-to-period comparison.
On January 3, 2006, the Company completed the acquisition of
substantially all of the assets of Synchronics, Inc. ("Synchronics").
All Synchronics operations are included in the Company's 2006
financial statements as of the date of the acquisition.
The Company provides adjusted operating margin, adjusted net
income and adjusted net income per share in this press release as
additional information relating to the Company's operating results.
The measures are not in accordance with, or an alternative for GAAP
and may be different from adjusted net income and adjusted net income
per share measures used by other companies. Adjusted net income and
adjusted operating margin has been adjusted to exclude amortization of
acquisition-related intangible assets, non-recurring items and
compensation expense related to the issuance of employee stock
options. The income tax provision is calculated on the Company's cash
tax rate for the year (based off of actual cash expected to be paid to
domestic and foreign governments). The Company believes that this
non-GAAP presentation provides useful information to investors
regarding certain additional financial and business trends relating to
the Company's financial condition and results of operations, and
valuable insight into the Company's ongoing operations and earnings
power.
Radiant will hold its first quarter 2007 conference call today at
approximately 4:30 p.m. Eastern Time. This call is being webcast by
CCBN and can be accessed at Radiant's web site at
http://phx.corporate-ir.net/phoenix.zhtml?c=115271&p=irol-irhome. The
call will also be available via telephone at 1-888-577-8990 -
reference ID# 5766832.
Radiant Systems, Inc. (www.radiantsystems.com) is a leader in
providing innovative technology to the hospitality and retail
industries. Offering unmatched reliability and ease of use, Radiant's
hardware and software products have been deployed in over 60,000 sites
across more than 100 countries. Radiant has approximately 1,000
employees worldwide, 325 certified sales and service partners and over
1,800 field service representatives. Founded in 1985, the Company is
headquartered in Atlanta with regional offices throughout the United
States as well as in Europe, Asia and Australia.
This press release may contain "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.
Forward-looking statements include all statements that are not
statements of historical fact regarding intent, belief or current
expectations of the Company, its directors or its officers. 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. 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 large 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 periodic filings with the
Securities and Exchange Commission. The Company undertakes no
obligation to update any forward-looking statements.
RADIANT SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
March 31, December 31,
2007 2006
-------------- -------------
Current assets
Cash and cash equivalents $ 13,340 $ 15,720
Accounts receivable, net 37,954 35,203
Inventories, net 27,173 26,484
Deferred tax assets 8,550 9,327
Other current assets 1,860 1,310
-------------- -------------
Total current assets 88,877 88,044
Property and equipment, net 14,422 14,726
Software development costs, net 5,797 5,019
Deferred tax assets, non-current 5,603 5,252
Goodwill 62,045 61,948
Intangibles, net 22,237 23,447
Other long-term assets 193 219
-------------- -------------
$ 199,174 $ 198,655
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt facility $ 6,489 $ 6,489
Current portion of long-term debt 7,528 7,439
Accounts payable and accrued liabilities 27,137 30,430
Accrued contractual obligations and
payables due to Related Party - 3,665
Client deposits and unearned revenue 14,340 10,365
-------------- -------------
Total current liabilities 55,494 58,388
Client deposits and deferred revenues,
net of current portion 141 188
Long-term debt, net of current portion 19,258 20,895
Other long-term liabilities 4,690 3,213
-------------- -------------
Total liabilities 79,583 82,684
-------------- -------------
Shareholders' equity
Common stock, no par value; 100,000,000
shares authorized; 31,077,668 and
30,923,800 shares issued and
outstanding, respectively - -
Additional paid-in capital 139,480 137,151
Accumulated other comprehensive income 628 487
Accumulated deficit (20,517) (21,667)
-------------- -------------
Total shareholders' equity 119,591 115,971
-------------- -------------
$ 199,174 $ 198,655
============== =============
RADIANT SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
For the three months ended
March 31,
2007 2007
GAAP Adjustments Non-GAAP
-------- ----------- --------
Revenues:
System sales $32,015 $32,015
Client support, maintenance and
other services 25,424 25,424
-------- --------
Total revenues 57,439 57,439
Cost of revenues:
System sales 16,881 (42) (a) 16,839
Client support, maintenance and
other services 15,605 (72) (a) 15,533
-------- ----------- --------
Total cost of revenues 32,486 (114) (e) 32,372
-------- ----------- --------
Gross profit 24,953 114 (e) 25,067
Operating Expenses:
Product development 5,578 (123) (a) 5,455
Sales and marketing 6,796 (220) (a) 6,576
Depreciation of fixed assets 1,021 1,021
Amortization of intangible assets 1,210 (1,210) (b) -
Lease restructuring charges (300) 300 (c) -
General and administrative 6,465 (373) (a) 6,092
-------- ----------- --------
Total operating expenses 20,770 (1,626) (e) 19,144
Income from operations 4,183 1,740 (e) 5,923
Interest and other expense, net 775 775
-------- ----------- --------
Income from operations before
income taxes 3,408 1,740 (e) 5,148
Income tax provision (1,371) (599) (d) (772)
-------- ----------- --------
Net income 2,037 2,339 (e) 4,376
Net income per share
Basic $ 0.07 $ 0.14
======== ========
Diluted $ 0.06 $ 0.13
======== ========
Weighted average shares
outstanding:
Basic 30,980 30,980
======== ========
Diluted 32,612 32,612
======== ========
For the three months ended March
31,
2006 2006
GAAP Adjustments Non-GAAP
-------- ----------- --------
Revenues:
System sales $26,439 $26,439
Client support, maintenance and
other services 22,598 22,598
-------- --------
Total revenues 49,037 49,037
Cost of revenues:
System sales 14,052 (94) (a) 13,958
Client support, maintenance and
other services 12,766 (52) (a) 12,714
-------- ----------- --------
Total cost of revenues 26,818 (146) (e) 26,672
-------- ----------- --------
Gross profit 22,219 146 22,365
Operating Expenses:
Product development 5,627 (166) (a) 5,461
Sales and marketing 6,230 (155) (a) 6,075
Depreciation of fixed assets 741 741
Amortization of intangible assets 2,047 (2,047) (b) -
General and administrative 5,995 (308) (a) 5,687
-------- ----------- --------
Total operating expenses 20,640 (2,676) (e) 17,964
Income from operations 1,579 2,822 (e) 4,401
Interest and other expense, net 617 617
-------- ----------- --------
Income from operations before
income taxes 962 2,822 (e) 3,784
Income tax provision (279) 143 (d) (422)
-------- ----------- --------
Net income 683 2,679 (e) 3,362
Net income per share
Basic $ 0.02 $ 0.11
======== ========
Diluted $ 0.02 $ 0.10
======== ========
Weighted average shares
outstanding:
Basic 30,838 30,838
======== ========
Diluted 32,973 32,973
======== ========
(a) The Company adopted SFAS 123R on January 1, 2006 using the
Modified Prospective Method, which requires us to expense the fair
value of grants made under stock option programs over the vesting
period of the options. The 2007 and 2006 adjustments to costs of
sales and operating expenses represent stock-based compensation
expense recorded during the period. Total stock-based compensation
expense during the first quarter of 2007 and 2006 was $830,000 and
$775,000, respectively, on a pre-tax basis.
(b) Adjustments represent purchase amortization from prior
acquisitions. Such amortization is commonly excluded from GAAP net
income by software companies and we therefore exclude these
amortization costs to provide more relevant and meaningful
comparisons of our operating results to that of our competitors.
(c) The lease restructuring credit to operating expense is a result of
adjusting our estimate related to a lease restructuring charge that
was taken during 2006. As was done in previous periods, items related
to lease restructurings have been excluded because such items are not
part of our core operations and we do not believe these to be common
costs that result from normal operating activities.
(d) The Company reports its non-GAAP income tax provision on a cash
tax rate basis which is estimated to be 15% for 2007 and 11% for
2006. Note that the actual cash tax rate for 2006 was approximately
10% and therefore an adjustment was made during the fourth quarter of
2006 which resulted in a decrease in the tax expense recognized in
the first quarter of 2006.
(e) The Company provides adjusted financial information as additional
information relating to the Company's operations. The measures are
not in accordance with, or an alternative for GAAP and may be
different from other adjusted financial statements of other
companies. The adjusted financial information excludes such items as
amortization of acquisition-related intangible assets, items that are
not considered part of our normal operations and compensation expense
related to the issuance of employee stock options. The income tax
provision is calculated based on the Company's cash tax rate for the
year and excludes the impact of changes in the valuation allowance
against deferred tax assets.
CONTACT: Radiant Systems, Inc.
Sara Ford, 770-576-6832