-----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, G/5CVvkBVwaA24z1zidGsE8/tOTsdV0t8+BdbTsHtfbgrWbbJktTYUIiBm0H2lsE v7wGM0//NzAU61UcGjTKig== 0001157523-06-010426.txt : 20061026 0001157523-06-010426.hdr.sgml : 20061026 20061026161703 ACCESSION NUMBER: 0001157523-06-010426 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061026 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061026 DATE AS OF CHANGE: 20061026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RADIANT SYSTEMS INC CENTRAL INDEX KEY: 0000845818 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 112749765 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22065 FILM NUMBER: 061166116 BUSINESS ADDRESS: STREET 1: 1000 ALDERMAN DR STREET 2: STE A CITY: ALPHARETTA STATE: GA ZIP: 30202 BUSINESS PHONE: 7707723000 MAIL ADDRESS: STREET 1: 1000 ALDERMAN DRIVE STREET 2: STE A CITY: ALPHARETTA STATE: GA ZIP: 30202 8-K 1 a5259689.txt RADIANT SYSTEMS, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 26, 2006 ----------------------------- RADIANT SYSTEMS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Georgia 0-22065 11-2749765 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 3925 Brookside Parkway, Alpharetta, Georgia 30022 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (770) 576-6000 ---------------------- N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On October 26, 2006, Radiant Systems, Inc. announced its results of operations for the quarter and nine months ended September 30, 2006. A copy of the related press release is being filed as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference in its entirety. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934 and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. 99.1 Press Release, dated October 26, 2006, issued by Radiant Systems, Inc. SIGNATURES 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 hereunto duly authorized. RADIANT SYSTEMS, INC. By: /s/Mark E. Haidet -------------------------------------- Mark E. Haidet Chief Financial Officer Dated: October 26, 2006 EX-99.1 2 a5259689ex99_1.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Radiant Systems, Inc. Reports Third Quarter Results Record Company Revenue Results in Adjusted Earnings of $0.15 Per Diluted Share in the Third Quarter ATLANTA--(BUSINESS WIRE)--Oct. 26, 2006--Radiant Systems, Inc. (NASDAQ: RADS), a leading provider of innovative technology for the hospitality and retail industries, today announced financial results for the third quarter and nine months ended September 30, 2006. Summary financial results for the third quarter of 2006 are as follows: -- Total revenues for the period were $57.6 million, an increase of 23 percent over revenues of $46.8 million for the same period in 2005. -- Net income for the period, including the impact of employee stock option expense, was $2.4 million, or approximately $0.08 per diluted share, an increase of $1.7 million, or $0.06 per diluted share, compared to the same period in 2005. -- Adjusted net income (non-GAAP) for the period, which excludes amortization of acquisition-related intangible assets, non-recurring items, the impact of changes in the valuation allowance against deferred tax assets and compensation expense related to the issuance of employee stock options, was $4.9 million, or $0.15 per diluted share, an increase of $1.5 million, or $0.04 per diluted share, compared to the same period in 2005. Summary year to date financial results for the nine month period ended September 30, 2006 are as follows: -- Total revenues for the period were $161.5 million, an increase of 31 percent over revenues of $123.7 million for the same period in 2005. -- Net income for the period, including the impact of employee stock option expense, was $14.8 million, or approximately $0.45 per diluted share, an increase of $11.6 million, or $0.35 per diluted share, compared to the same period in 2005. -- Adjusted net income (non-GAAP) for the period, which excludes amortization of acquisition-related intangible assets, non-recurring items, the impact of changes in the valuation allowance against deferred tax assets and compensation expense related to the issuance of employee stock options, was $12.6 million, or $0.38 per diluted share, an increase of $3.7 million, or $0.10 per diluted share, compared to the same period in 2005. John Heyman, the Company's chief executive officer said, "We are very pleased with the continued success of our products in the marketplace, as indicated by another record revenue quarter. The value delivered by our products combined with the strong execution of our people and channel partners have been key drivers of our growth." 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 strong returns for our customers. Additionally, we have seen good progress with the integration and the financial contribution of both MenuLink and Synchronics. The execution of our strategy has resulted in a very successful year thus far and demonstrates the momentum we have built toward a successful 2007." "We are very pleased with the progression of our overall financial model," said Mark Haidet, the Company's chief financial officer. "We continue to execute well on increasing our operating leverage while we invest in long-term growth initiatives." Haidet continued, "Based on our results in the quarter, as well as our strong pipeline and visibility into the business, we are updating our guidance for 2006. In addition, we are providing an initial revenue range of $245 million to $260 million for 2007. We expect to grow adjusted operating income by 25% to 30% and adjusted earnings per share by 10% to 20% over 2006. We expect our cash tax rate to increase to approximately 25% for 2007." The Company's updated guidance is as follows: Revenue Range Adjusted Earnings (millions) (non-GAAP) / Share Range - ---------------------------------------------------------------------- Quarter ending December 31, 2006 $57-$59 $.15 - $.17 - ---------------------------------------------------------------------- Year ending Dec. 31, 2006 - previous $213 -$218 $.50 - $.55 - ---------------------------------------------------------------------- Year ending Dec. 31, 2006 - updated $218 -$220 $.53 - $.55 - ---------------------------------------------------------------------- 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, which did not require retroactive restatement of previously issued financial statements. In its press releases, the Company reports its net income and earnings per share during fiscal year 2006 on both Generally Accepted Accounting Principles ("GAAP") (which includes the share-based compensation charge, which represents the non-cash stock option expense) and non-GAAP (which excludes the share-based compensation charge) bases in order to facilitate analysis of the business and meaningful period-to-period comparison. On October 6, 2005 the Company completed its acquisition of MenuLink Computer Solutions, Inc. ("MenuLink"). All MenuLink operations are included in the Company's 2005 financial statements as of the date of the acquisition. 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 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. Net income has been adjusted to exclude amortization of acquisition-related intangible assets, non-recurring items, the impact of changes in the valuation allowance against deferred tax assets and compensation expense related to the issuance of employee stock options. 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 third quarter 2006 conference call today at approximately 5 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 1-888-587-0679 - reference ID# 8018632. 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. 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, and (iv) the Company's new or future product offerings. 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 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 September 30, December 31, 2006 2005 -------------- ------------- Current assets Cash and cash equivalents $6,464 $17,641 Accounts receivable, net 39,960 27,559 Inventories, net 28,287 18,093 Deferred tax assets 3,826 - Other short-term assets 2,184 2,287 -------------- ------------- Total current assets 80,721 65,580 Property and equipment, net 14,654 9,607 Software development costs, net 3,904 2,249 Deferred tax assets, non-current 11,172 - Goodwill 60,934 44,239 Intangibles, net 25,495 20,537 Other long-term assets 200 293 -------------- ------------- Total assets $197,080 $142,505 ============== ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term debt facility 7,489 - Current portion of long-term debt 7,346 4,329 Accounts payable and accrued liabilities 33,102 23,992 Accrued contractual obligations and payables due to Related Party 2,275 1,947 Client deposits and unearned revenues 12,913 12,490 -------------- ------------- Total current liabilities 63,125 42,758 Client deposits and unearned revenues, net of current portion 235 376 Long-term debt, less current portion 22,540 14,133 Other long-term liabilities 706 805 -------------- ------------- Total liabilities 86,606 58,072 -------------- ------------- Shareholders' equity Common stock, no par value; 100,000,000 shares authorized; 30,813,129 and 30,094,973 shares issued and outstanding, respectively - - Additional paid-in capital 135,694 124,744 Accumulated other comprehensive income (loss) 41 (287) Accumulated deficit (25,261) (40,024) -------------- ------------- Total shareholders' equity 110,474 84,433 -------------- ------------- Total liabilities and shareholders' equity $197,080 $142,505 ============== ============= - - RADIANT SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) For the three months ended September 30, 2006 2006 GAAP Adjustments Non-GAAP -------- ------------ -------- Revenues: System sales $34,497 $34,497 Client support, maintenance and other services 23,056 23,056 -------- -------- Total revenues 57,553 57,553 Cost of revenues: System sales 18,548 (142) (a) 18,406 Client support, maintenance and other (a) services 14,361 (61) 14,300 -------- -------- -------- Total cost of revenues 32,909 (203) 32,706 -------- -------- -------- Gross profit 24,644 203 24,847 Operating Expenses: Product development 5,418 (123) (a) 5,295 Sales and marketing 6,335 (206) (a) 6,129 Depreciation of fixed assets 979 979 Amortization of intangible assets 2,047 (2,047) (b) - General and administrative 6,102 (279) (a) 5,823 -------- -------- -------- Total operating expenses 20,881 (2,655) 18,226 Income from operations 3,763 2,858 6,621 Interest and other expense, net 813 813 -------- -------- Income from operations before income taxes 2,950 2,858 5,808 Income tax provision (517) (395) (d) (912) -------- -------- Net income $2,433 2,463 $4,896 Net income per share Basic $0.08 $0.16 ======== ======== Diluted $0.08 $0.15 ======== ======== Weighted average shares outstanding: Basic 30,740 30,740 ======== ======== Diluted 32,327 32,327 ======== ======== For the three months ended September 30, 2005 2005 GAAP Adjustments Non-GAAP -------- ------------ -------- Revenues: System sales $27,470 $27,470 Client support, maintenance and other services 19,366 19,366 -------- -------- Total revenues 46,836 46,836 Cost of revenues: System sales 16,443 16,443 Client support, maintenance and other services 12,686 12,686 -------- -------- -------- Total cost of revenues 29,129 - 29,129 -------- -------- -------- Gross profit 17,707 17,707 Operating Expenses: Product development 3,686 3,686 Sales and marketing 4,940 4,940 Depreciation of fixed assets 794 794 Amortization of intangible assets 1,283 (1,283) (b) - Lease restructuring charges 1,450 (1,450) (c) - General and administrative 4,405 4,405 -------- -------- -------- Total operating expenses 16,558 (2,733) 13,825 Income from operations 1,149 2,733 3,882 Interest and other expense, net 268 268 -------- -------- Income from operations before income taxes 881 2,733 3,614 Income tax provision (150) (65) (d) (215) -------- -------- Net income $731 2,668 $3,399 Net income per share Basic $0.02 $0.11 ======== ======== Diluted $0.02 $0.11 ======== ======== Weighted average shares outstanding: Basic 29,596 29,596 ======== ======== Diluted 31,999 31,999 ======== ======== For the nine months ended September 30, 2006 2006 GAAP Adjustments Non-GAAP -------- ------------ -------- Revenues: System sales $93,024 $93,024 Client support, maintenance and other services 68,443 68,443 -------- -------- Total revenues 161,467 161,467 Cost of revenues: System sales 49,202 (370) (a) 48,832 Client support, maintenance and other (a) services 41,161 (164) 40,997 -------- -------- -------- Total cost of revenues 90,363 (534) 89,829 -------- -------- -------- Gross profit 71,104 534 71,638 Operating Expenses: Product development 16,423 (441) (a) 15,982 Sales and marketing 19,166 (557) (a) 18,609 Depreciation of fixed assets 2,521 2,521 Amortization of intangible assets 6,142 (6,142) (b) - Lease restructuring charges 1,663 (1,663) (c) - General and administrative 18,717 (911) (a) 17,806 -------- -------- -------- Total operating expenses 64,632 (9,714) 54,918 Income from operations 6,472 10,248 16,720 Interest and other expense, net 2,052 2,052 -------- -------- Income from operations before income taxes 4,420 10,248 14,668 Income tax benefit (provision) 10,343 (12,445) (d) (2,102) -------- -------- Net income $14,763 (2,197) $12,566 Net income per share Basic $0.48 $0.41 ======== ======== Diluted $0.45 $0.38 ======== ======== Weighted average shares outstanding: Basic 30,857 30,857 ======== ======== Diluted 32,703 32,703 ======== ======== For the nine months ended September 30, 2005 2005 GAAP Adjustments Non-GAAP -------- ------------ -------- Revenues: System sales $69,623 $69,623 Client support, maintenance and other services 54,077 54,077 -------- -------- Total revenues 123,700 123,700 Cost of revenues: System sales 38,215 38,215 Client support, maintenance and other services 35,671 35,671 -------- -------- -------- Total cost of revenues 73,886 - 73,886 -------- -------- -------- Gross profit 49,814 49,814 Operating Expenses: Product development 9,995 9,995 Sales and marketing 13,654 13,654 Depreciation of fixed assets 2,420 2,420 Amortization of intangible assets 3,850 (3,850) (b) - Impairment of HotelTools software 550 (550) (c) - Lease restructuring charges 1,450 (1,450) (c) - General and administrative 13,453 13,453 -------- -------- -------- Total operating expenses 45,372 (5,850) 39,522 Income from operations 4,442 5,850 10,292 Interest and other expense, net 735 735 -------- -------- Income from operations before income taxes 3,707 5,850 9,557 Income tax provision (575) (157) (d) (732) -------- -------- Net income $3,132 5,693 $8,825 Net income per share Basic $0.11 $0.30 ======== ======== Diluted $0.10 $0.28 ======== ======== Weighted average shares outstanding: Basic 29,360 29,360 ======== ======== Diluted 31,333 31,333 ======== ======== (a) The Company adopted SFAS 123(R) 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. Previously we did not record compensation expense for employee stock options granted at the money. The 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 three and nine month periods ended September 30, 2006 was approximately $0.8 million and $2.4 million, respectively, on a pre-tax basis. (b) Adjustment represents the exclusion of amortization of intangible assets from non-GAAP results. (c) These items are considered non-recurring charges. (d) Tax effect of the non-GAAP adjustments described above and the elimination of the benefit related to the removal of a substantial portion of the allowance against deferred tax assets recognized in the second quarter of 2006, which amounted to $11.3 million. CONTACT: Radiant Systems, Inc., Atlanta Sara Ford, 770-576-6832 -----END PRIVACY-ENHANCED MESSAGE-----