EX-99.2 4 w88372exv99w2.htm EXHIBIT 99.2 exv99w2
 

      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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