-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qfj/HtE0OcGQdiGwBuYoeaYjqXqWcT6CcvxkaAR1VFbYblXEh+IVNrKjBULi2e3U mPrUf2A95saEFqS0mE7wAw== 0000950133-95-000664.txt : 19951119 0000950133-95-000664.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950133-95-000664 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICROS SYSTEMS INC CENTRAL INDEX KEY: 0000320345 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 521101488 STATE OF INCORPORATION: MD FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09993 FILM NUMBER: 95592507 BUSINESS ADDRESS: STREET 1: 12000 BALTIMORE AVE CITY: BELTSVILLE STATE: MD ZIP: 20705 BUSINESS PHONE: 3012016000 MAIL ADDRESS: STREET 1: 12000 BALTIMORE AVE CITY: BELTSVILLE STATE: MD ZIP: 20705-1291 10-Q 1 MICROS SYSTEMS, INC. 10-Q 1 Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended September 30, 1995 Commission file number 0-9993 MICROS SYSTEMS, INC. - ------------------------------------------------------------------ (Exact name of Registrant as specified in its charter) MARYLAND 52-1101488 - ------------------------------------------------------------------ (State of incorporation) (I.R.S. Employer Identification Number) 12000 Baltimore Avenue, Beltsville, Maryland 20705-1291 - ------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: 301-210-6000 ------------ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such report(s)), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ----- ----- As of September 30, 1995, there were 7,871,280 shares of Common Stock, $.025 par value, outstanding. 1 2 MICROS SYSTEMS, INC. AND SUBSIDIARIES Form 10-Q For the Quarter Ended September 30, 1995 PART I - Financial Information Item 1. Financial Statements. General The information contained in this report is furnished for the Registrant, MICROS Systems, Inc., and its subsidiaries (referred to collectively herein as "MICROS" or the "Company"). In the opinion of management, the information in this report contains all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the results for the interim periods presented. The financial information has been reviewed by the Company's independent accountants, Price Waterhouse LLP, and a copy of its report is attached. The financial information presented herein should be read in conjunction with the financial statements included in the Registrant's Form 10-K for the fiscal year ended June 30, 1995, as filed with the Securities and Exchange Commission. With respect to the unaudited consolidated financial information for the three month periods ended September 30, 1995 and 1994, Price Waterhouse LLP has reported that it has applied limited procedures in accordance with professional standards for a review of such information. However, its report dated November 10, 1995, appearing herein, states that it did not audit and it does not express an opinion on that unaudited consolidated financial information. Price Waterhouse LLP has not carried out any significant or additional audit tests beyond those which would have been necessary if its report had not been included. Accordingly, the degree of reliance on its reports on such information should be restricted in light of the limited nature of the review procedures applied. Price Waterhouse LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for its report on the unaudited consolidated financial information because such report is not a "report" within the meaning of Sections 7 and 11 of the Securities Act of 1933. 2 3 MICROS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ($ in thousands)
September 30, June 30, 1995 1995 -------- --------- (Unaudited) ASSETS - ------ Current assets: Cash and cash equivalents $22,181 $23,215 Short term investments 2,470 3,170 Accounts receivable, net of allowance for doubtful accounts of $1,455 at September 30, 1995 and $1,229 at June 30, 1995 28,516 25,185 Inventories 14,136 11,344 Deferred income taxes 1,890 1,890 Prepaid expenses and other current assets 4,199 1,820 ------- ------- Total current assets 73,392 66,624 ------- ------- Property, plant and equipment, at cost 19,542 17,512 Accumulated depreciation and amortization (8,161) (7,350) ------- ------- Net property, plant and equipment 11,381 10,162 ------- ------- Note receivable 1,074 649 Investments in affiliates, including related goodwill 8,287 8,509 Other assets: Capitalized computer software development costs, net of accumulated amortization of $1,771 at September 30, 1995 and $1,684 at June 30, 1995. 1,607 1,544 Goodwill and district intangible assets, net of accumulated amortization of $812 at September 30, 1995 and $708 at June 30, 1995 2,632 1,719 Other 432 437 ------- ------- Total assets $98,805 $89,644 ======= =======
The accompanying notes are an integral part of the consolidated financial statements. 3 4 MICROS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ($ in thousands)
September 30, June 30, 1995 1995 -------------- ------------- (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities: Current portion of long-term debt and capital lease obligation $ 382 $ 363 Accounts payable 12,473 8,505 Accrued expenses and other current liabilities 14,542 16,215 Income taxes payable 1,408 361 Deferred service revenue 5,341 4,151 ------- ------- Total current liabilities 34,146 29,595 ------- ------- Long-term debt, net of current portion 2,610 1,669 Capital lease obligation, net of current portion 3,553 3,582 Deferred income taxes payable 933 933 Minority interest 421 415 ------- ------- Total liabilities 41,663 36,194 ------- ------- Shareholders' equity: Common stock, $.025 par value; authorized 10,000,000 shares; issued and outstanding 7,871,280 shares at September 30, 1995 and 7,859,095 shares at June 30, 1995 197 196 Capital in excess of par 15,031 14,883 Retained earnings 40,656 37,402 Accumulated foreign currency translation adjustments 1,258 969 ------- ------- Total shareholders' equity 57,142 53,450 ------- ------- Total liabilities and shareholders' equity $98,805 $89,644 ======= =======
The accompanying notes are an integral part of the consolidated financial statements. 4 5 MICROS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - in thousands, except per share data)
Three Months Ended ------------------------------------- September 30, September 30, 1995 1994 -------- --------- Revenue: Hardware and related software $24,764 $19,283 Service 7,596 5,191 ------- ------- Total revenue 32,360 24,474 Costs and expenses: Cost of sales Hardware and related software 12,743 9,726 Service 3,656 2,355 ------- ------- Total cost of sales 16,399 12,081 Selling, general and administrative expenses 9,560 6,983 Research and development expenses 1,368 962 Depreciation and amortization 519 344 ------ ------ Total costs and expenses 27,846 20,370 ------ ------ Income from operations 4,514 4,104 Non-operating income (expense): Interest income 339 261 Interest expense (88) (84) Other income (expense), net (174) 259 ------ ------- Income before taxes and equity in net earnings of affiliates 4,591 4,540 Income taxes 1,627 1,508 ------- ------- Income before equity in net earnings of affiliates 2,964 3,032 Equity in net earnings of affiliates 290 4 ------- ------- Net income $ 3,254 $ 3,036 ======= ======= Net income per common and common equivalent share $ 0.41 $ 0.38 ======= ======= Weighted-average number of common and common equivalent shares outstanding 7,978 7,942 ======= =======
The accompanying notes are an integral part of the consolidated financial statements. 5 6 MICROS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed and unaudited - $ in thousands)
Three Months Ended ------------------------------------- September 30, September 30, 1995 1994 -------- -------- Net cash flows from operating activities $ 300 $ 1,731 ------- ------- Cash flows from investing activities: Purchases of property, plant and equipment (1,208) (480) Capitalized software development costs (149) - Sale of short term investments 700 - Dividends received from affiliates 581 - Purchase of affiliates, net of cash received (821) - Loan to affiliate (425) - ------ -------- Net cash used in investing activities (1,322) (480) ------ ------- Cash flows from financing activities: Proceeds from issuance of stock 83 184 Principal payments on long-term debt (161) (161) Income tax benefit from stock options exercised 66 272 ------- ------- Net cash (used in) provided by financing activities (12) 295 ------- ------- Net (decrease) increase in cash and cash equivalents (1,034) 1,546 Cash and cash equivalents at beginning of period 23,215 16,339 ------- ------- Cash and cash equivalents at end of period $22,181 $17,885 ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 99 $ 101 ======= ======= Income taxes $ 648 $ 666 ======= =======
Supplemental schedule of noncash financing and investing activities: In August 1995, the Company purchased the remaining 77% of D.A.C. Systemes/MICROS France and AD- Maintenance Informatique ("ADMI") for FF 14.0 million (approximately $2.8 million at exchange rates in effect at the date of purchase), payable FF 8.0 million at closing FF 6.0 million over the next four years, plus potential additional payments based on earnings over the next four years. The accompanying notes are an integral part of the consolidated financial statements. 6 7 MICROS SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS three months ended September 30, 1995 (unaudited) 1. Inventories The components of inventories are as follows (in thousands):
September 30, June 30, 1995 1995 ------------ ------------ Raw materials $ 3,115 $ 2,534 Work-in-process 3,226 2,785 Finished goods 7,795 6,025 ------------ ------------ $ 14,136 $ 11,344 ============ ============
2. Note Receivable Under the terms of a loan agreement with Fidelio Software GmbH which obligated MICROS to loan up to DM 1.5 million, the Company's loan of DM 900,000 as of June 30, 1995 was increased to DM 1,487,000 in the first quarter of fiscal 1996. The note bears interest at a variable rate and must be repaid by December 31, 2000. 3. Subsequent Event On November 10, 1995, the Company announced that it had exercised its right to acquire the remaining 70% interest in Fidelio Software GmbH ("Fidelio"), a German company based in Munich, that MICROS currently does not own. MICROS currently owns 30% of Fidelio. MICROS anticipates that the acquisition will be completed within the next 90 days. Fidelio revenues for calendar 1994 were approximately DM 50,000,000, and revenues for the first nine months of calendar 1995 were approximately DM 60,000,000. The purchase price for the remaining 70% interest in Fidelio is DM 40,000,000. The Company anticipates that it will pay for the Fidelio stock through its cash reserves and available lines of credit. 4. Reclassifications Certain prior year reclassifications have been made to conform to fiscal 1996 classifications. 7 8 MICROS SYSTEMS, INC. AND SUBSIDIARIES Form 10-Q For the Quarter Ended September 30, 1995 PART I - Financial Information Item 2. Management's discussion and analysis of financial condition and results of operations. Liquidity and Capital Resources There have been no borrowings under the Company's $15.0 million line of credit facility during the first quarter of fiscal 1996. The Company has generated sufficient cash flow through its operations during this period and has significant funds available in cash and highly-liquid investments. For the first three months of fiscal 1996, net cash provided by operating activities was $300,000. The sale of stock issued to employees under the Company's incentive stock option plan provided $83,000, while $66,000 was provided by the income tax benefit from the exercise of non-qualified stock options. During this period, the Company used cash of $1,322,000 in investing activities, including $1,208,000 for the purchase of property, plant and equipment, $821,000 for the purchase of an equity interest in an affiliate (net of cash received) and $425,000 loaned to an affiliate. Cash used in investing activites was offset by $700,000 from the sale of short term investments and $581,000 from dividends received from affiliates. The Company also made debt repayments of $161,000 on its building loan and capital lease. As a result, the cash position during the first three months of fiscal 1996 decreased $1,034,000, or 4.5%, to $22,181,000. The cash is being held for the operation and expansion of the business. See Note 3 of Notes to Consolidated Financial Statements. Results of Operations - First Quarter Comparisons Revenue for the quarter ended September 30, 1995 was $32.4 million, an increase of $7.9 million, or 32.2%, compared to the same quarter last year. Sales through the Company's direct sales channel increased $4.7 million over the same period last year, including Property Management System (PMS) sales through the Company's three Fidelio subsidiaries which increased $2.7 million and increased sales of Point of Sale (POS) hardware and software to Whitbread PLC of $1.3 million. Sales through the Company's indirect sales channel to independent dealers and distributors worldwide increased $3.1 million in the first quarter of fiscal 1996 compared to the same period last year. Hardware and software sales increased $5.5 million, or 28.4%, while service revenues increased $2.4 million, or 46.3%. Cost of sales, as a percentage of revenue, increased to 50.7% for the first quarter of fiscal 1996 compared to 49.4% for the same period in fiscal 1995. Cost of sales for hardware and software products, as a percentage of related revenue, was 51.5% in the first quarter of fiscal 1996 compared to 50.4% for the same quarter a year earlier, primarily due to certain strategic selling price decreases on hardware products. Service costs, as a percentage of related revenue, increased in the first quarter of fiscal 1996 to 48.1% compared to 45.4% for the first quarter last year, primarily due to higher labor costs related to the training of new service employees and increased material costs and support fees related to service maintenance contracts. Selling, general and administrative expenses increased $2.6 million, or 36.9% in the first quarter of fiscal 1996 compared to the same quarter in the prior 8 9 MICROS SYSTEMS, INC. AND SUBSIDIARIES Form 10-Q For the Quarter Ended September 30, 1995 PART I - Financial Information Item 2. Management's discussion and analysis of financial condition and results of operations. (continued) year. As a percentage of revenue, selling, general and administrative expenses increased to 29.6% in the first quarter of fiscal 1996 compared to 28.5% in the first quarter of fiscal 1995. The increases are primarily the result of the continued expansion of the Company's infrastructure, especially an increased emphasis on the Company's sales and service organizations, including the addition of three U.S. sales and service offices and increased sales and service staffing worldwide. In addition, certain costs have increased as a result of the Company no longer being a subsidiary of Westinghouse Electric Corporation. Research and development expenses (exclusive of capitalized software development costs), which consist primarily of labor costs, increased $406,000, or 42.2%, in the first quarter of fiscal 1996 compared to the same quarter in fiscal 1995. Actual research and development expenditures, including capitalized software development costs of $149,000 in the first quarter of fiscal 1996, increased $555,000, or 57.7%, compared to the first quarter of fiscal 1995. Interest income for the first quarter of fiscal 1996 increased $78,000 to $339,000, or 29.9%, compared to $261,000 for the same quarter of fiscal 1995. The improvement was a result of an increase in interest rates on investments and an increase in the investment balance. Other income for the first quarter of fiscal 1995 included a dividend of $175,000 from Fidelio, which was then owned 15% and accounted for on the cost basis. Following an ownership increase to 30% in October 1994, Fidelio was accounted for on the equity method, and MICROS' share of Fidelio's net income is included in equity in net earnings of affiliates. The Company has recently experienced rapid revenue growth at a rate that it believes has significantly exceeded that of the global market for point-of-sale computer systems and property management information systems products for the hospitality industry. Although the Company currently anticipates continued revenue growth at a rate in excess of such market, and therefore an increase in its overall market share, it does not expect to maintain growth at recent levels and there can be no assurance that any particular level of growth can be achieved. In addition, due to the competitive nature of the market, the Company recently has experienced greater gross margin pressure on its products than it has in the past, and the Company expects this trend to continue. There can be no assurance that the Company will be able to sufficiently increase sales of its higher margin products, including software and services, to prevent declines in the Company's overall gross margin. 9 10 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of MICROS Systems, Inc. We have reviewed the accompanying consolidated balance sheet of MICROS Systems, Inc. and Subsidiaries as of September 30, 1995, and the related consolidated statements of operations and cash flows for the three-month periods ended September 30, 1995 and September 30, 1994. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. We previously audited in accordance with generally accepted auditing standards, the consolidated balance sheet as of June 30, 1995, and the related consolidated statements of operations, cash flows and shareholders' equity for the year then ended (not presented herein), and in our report dated August 21, 1995 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the accompanying consolidated balance sheet information as of June 30, 1995, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. PRICE WATERHOUSE LLP Baltimore, Maryland November 10, 1995 THE ABOVE REPORT IS NOT A "REPORT" WITHIN THE MEANING OF SECTIONS 7 AND 11 OF THE SECURITIES ACT OF 1933 AND THE INDEPENDENT ACCOUNTANTS LIABILITY PROVISIONS OF SECTION 11 OF THE ACT DO NOT APPLY. 10 11 MICROS SYSTEMS, INC. AND SUBSIDIARIES Form 10-Q For the Quarter Ended September 30, 1995 Part II - Other Information Items 1 through 4. No events occurred during the quarter covered by the report that would require a response to any of these items. Item 5. Other Information For a discussion of certain recent events, see Note 3 of Notes to Consolidated Financial Statements. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 11 - Computation of Earnings Per Share Exhibit 15 - Letter Regarding Unaudited Interim Financial Information Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K - None 11 12 MICROS SYSTEMS, INC. AND SUBSIDIARIES Form 10-Q For the Quarter Ended September 30, 1995 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MICROS SYSTEMS, INC. ------------------------- (Registrant) November 14, 1995 - ------------------ -------------------------- Gary C. Kaufman Vice President, Finance and Administration/Chief Financial Officer 12 13 EXHIBIT INDEX
Sequentially Exhibit Numbered Page - ------- ------------- 11. Computation of Earnings Per Share 14 15. Letter regarding Unaudited Interim 15 Financial Information 27. Financial Data Schedule N/A
13 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 MICROS SYSTEMS, INC. AND SUBSIDIARIES three months ended September 30, 1995 and 1994 Exhibit 11 - Computation of Earnings Per Share (Unaudited - in thousands, except per share data)
Three Months Ended -------------------------------------- September 30, September 30, 1995 1994 ------------- ------------- Weighted-average number of common shares 7,861 7,802 Dilutive effect of outstanding stock options 117 140 ------------- ------------- Weighted-average number of common and common equivalent shares outstanding 7,978 7,942 ============= ============= Net income per statements of income $ 3,254 $ 3,036 ============= ============= Net income per common and common equivalent share $ 0.41 $ 0.38 ============= =============
14 EX-15 3 LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION 1 Exhibit No. 15 November 10, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Dear Sirs: We are aware that MICROS Systems, Inc. has incorporated by reference our report dated November 10, 1995 (issued pursuant to the provisions of Statement on Auditing Standards No. 71) in the Prospectus constituting part of its Registration Statements on Forms S-8, (No. 33-69782, No. 33-44481 and No. 33-33535). We are also aware of our responsibilities under the Securities Act of 1933. Yours very truly, PRICE WATERHOUSE LLP 15 EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AND RELATED STATEMENT OF INCOME AS OF SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS JUN-30-1996 SEP-30-1995 5,141 19,510 29,971 1,455 14,136 73,392 19,542 8,161 98,805 34,146 6,163 197 0 0 56,945 98,805 24,764 32,360 12,743 15,103 0 0 88 4,591 1,627 3,254 0 0 0 3,254 0.41 0.41
-----END PRIVACY-ENHANCED MESSAGE-----