Final Transcript

Apr. 26. 2007 / 4:45PM ET, MCRS - Q3 2007 MICROS System Earnings Conference Call

Tom Giannopoulos, MICROS’s Chairman and CEO, stated, “We are extremely pleased with our financial results and note that our quarterly revenue exceeded $200 million for the first time in our Company’s history. Our ongoing investments in product development, distribution channels and acquisitions provide us an expanding platform for continued growth.”

Guidance for the fiscal 2007 year ending June 30, 2007 remains the same: revenue between $778.0 million and $781.0 million; net income between $78.3 million and $80.3 million, or diluted EPS of $1.90 to $1.94; and non-GAAP net income, excluding the currently projected share-based payment charge for the fiscal year, between $86.5 million and $88.7 million, or non-GAAP diluted EPS between $2.10 and $2.14.

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. An example of a forward looking statement includes the statements in the paragraphs where MICROS provides guidance for its fiscal 2007 year ending June 30, 2007, and Mr. Giannopoulos’s quote. 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.

All information in this release is as of April 26, 2007. MICROS undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in MICROS’s expectations.

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.

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Final Transcript

Apr. 26. 2007 / 4:45PM ET, MCRS - Q3 2007 MICROS System Earnings Conference Call

news
Release Date: April 26, 2007	Contact:	Peter J. Rogers, Jr.
		SVP, Investor Relations
		443-285-8059

MICROS SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - in thousands, except per share amounts)

	Third Quarter Ended March 31,						Nine Months Ended March 31,
	2007			2006			2007			2006
Revenue:
Hardware	$	58,541		$	56,087		$	168,144		$	152,585
Software		34,032			28,788			94,540			85,045
Service		107,983			86,266			301,448			249,493
Total revenue		200,556			171,141			564,132			487,123
Cost of sales:
Hardware		37,745			38,234			107,981			103,371
Software		7,597			6,051			21,593			18,458
Service		50,199			41,773			142,020			119,978
Total cost of sales		95,541			86,058			271,594			241,807
Gross margin		105,015			85,083			292,538			245,316
Selling, general and administrative expenses		62,316			51,834			177,773			151,492
Research and development expenses		8,761			6,475			23,412			19,162
Depreciation and amortization		2,961			2,450			9,122			7,557
Stock option expense (*)		3,763			2,402			9,273			6,502
Total operating expenses		77,801			63,161			219,580			184,713
Income from operations		27,214			21,922			72,958			60,603
Non-operating income, net		2,731			1,430			7,357			2,608
Income before taxes, minority interests and equity in net earnings of affiliates		29,945			23,352			80,315			63,211
Income tax provision		10,156			7,589			26,893			20,544
Income before minority interests and equity in net earnings of affiliates		19,789			15,763			53,422			42,667
Minority interests and equity in net earnings of affiliates		(339	)		(169	)		(844	)		(517	)
Net income	$	19,450		$	15,594		$	52,578		$	42,150
Net income per common share - diluted	$	0.47		$	0.38		$	1.28		$	1.04
Weighted-average number of shares outstanding - diluted		41,673			40,730			41,196			40,648

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Apr. 26. 2007 / 4:45PM ET, MCRS - Q3 2007 MICROS System Earnings Conference Call

Reconciliation of GAAP Net Income and EPS to Net Income and EPS before share-based payment charge, i.e. stock option expense:

Net income	$	19,450	$	15,594	$	52,578	$	42,150
Add back:
(*) Stock option expense:
Cost of Sales		0		25		0		25
Stock option expense included in operating expenses:
Selling, general and administrative expenses (“SG&A”)		2,862		2,329		8,132		6,359
SG&A - non-recurring		719		0		719		0
Research and development expenses		182		73		422		143
		3,763		2,402		9,273		6,502
Total stock option expense		3,763		2,427		9,273		6,527
Subtract:
Total tax effect on stock option expense		867		227		1,981		1,472
Net income (before share-based payment charge) / Non-GAAP	$	22,346	$	17,794	$	59,870	$	47,205
Net income per common share-diluted (before share-based payment charge) / Non-GAAP	$	0.54	$	0.44	$	1.45	$	1.16

We believe the inclusion of the above non-GAAP measure, excluding the effect of share-based payment charge, will be useful to investors because it will enhance the comparability of our results in recent periods to results in periods prior to our adoption of FAS 123(R). We also believe inclusion of this measure will enhance comparability of our results to results of our competitors, particularly those who did not adopt FAS 123(R) during one or more periods included in their public filings, and to the analysts’ forecast because the analysts continue to forecast excluding the effect of share-based payment charge, the non-GAAP measure. In addition, our management uses this measure to evaluate our operating performance and compare our performance to those of 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-cash share-based payment charges can have a significant impact on reported GAAP net income and reported GAAP diluted net income per share.

·	Other companies may utilize non-cash share-based payments to a significantly greater or lesser degree in relation to overall compensation than MICROS.

·	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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Final Transcript

Apr. 26. 2007 / 4:45PM ET, MCRS - Q3 2007 MICROS System Earnings Conference Call

MICROS SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited - in thousands)

	March 31,		June 30,
	2007		2006
ASSETS
Current assets:
Cash and cash equivalents	$	301,101	$	237,222
Accounts receivable, net		180,174		141,159
Inventories, net		44,229		46,637
Deferred income taxes		18,700		16,649
Prepaid expenses and other current assets		28,689		15,485
Total Current Assets		572,893		457,152
Property, plant and equipment, net		26,977		23,794
Deferred income taxes, non-current		11,569		16,192
Goodwill		140,425		98,581
Intangible assets, net		16,044		10,427
Purchased and internally developed software costs, net		37,759		38,328
Other assets		4,357		3,383
Total assets	$	810,024	$	647,857

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Bank lines of credit	$	2,879	$	2,134
Accounts payable		34,097		36,022
Accrued expenses and other current liabilities		109,025		84,897
Current portion of capital lease obligations		427		89
Income taxes payable		7,480		12,416
Deferred income taxes		199		227
Deferred service revenue		92,406		68,246
Total current liabilities		246,513		204,031

Capital lease obligations, net of current portion		401		424
Deferred income taxes, non-current		15,527		14,998
Other non-current liabilities		9,663		8,146
Minority interests		4,014		3,142
Commitments and contingencies

Shareholders’ equity:
Common stock		508		487
Capital in excess of par		155,083		100,723
Retained earnings		355,426		302,848
Accumulated other comprehensive income		22,889		13,058
Total shareholders’ equity		533,906		417,116
Total liabilities and shareholders’ equity	$	810,024	$	647,857

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