-----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, TH/C4KyczbUk0ipCok8fL9C8NfXWNZnoGzZfBfs9BfBjSeW1VlvNKPOr8x1+1WFd s99iT0nvQXVjYvRA98YNJA== 0001157523-07-001654.txt : 20070215 0001157523-07-001654.hdr.sgml : 20070215 20070215163129 ACCESSION NUMBER: 0001157523-07-001654 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070215 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070215 DATE AS OF CHANGE: 20070215 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: 07627885 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 a5335910.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) February 15, 2007 ----------------------------- RADIANT SYSTEMS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Georgia 0-22065 11-2749765 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) 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 February 15, 2007, Radiant Systems, Inc. announced its results of operations for the quarter and twelve months ended December 31, 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 February 15, 2007, 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: February 15, 2007 EX-99.1 2 a5335910ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Radiant Systems, Inc. Reports Fourth Quarter Results Record Company Revenue Results in Adjusted Earnings of $0.20 Per Diluted Share in the Fourth Quarter ATLANTA--(BUSINESS WIRE)--Feb. 15, 2007--Radiant Systems, Inc. (NASDAQ: RADS), a leading provider of innovative technology for the hospitality and retail industries, today announced financial results for the fourth quarter and year ended December 31, 2006. Summary financial results for the fourth quarter of 2006 are as follows: -- Total revenues for the period were $60.8 million, an increase of 26 percent over revenues of $48.3 million for the same period in 2005. -- Net income for the period, including the impact of employee stock option expense, was $3.6 million, or $0.11 per diluted share, an increase of $1.2 million, or $0.03 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, the impact of changes in the valuation allowance against deferred tax assets and compensation expense related to the issuance of employee stock options, was $6.5 million, or $0.20 per diluted share, an increase of $2.6 million, or $0.08 per diluted share, compared to the same period in 2005. -- Net income includes a reduction in the tax provision due to a true up in the annual estimated tax rate. This reduction increased net income by approximately $0.2 million or $0.01 per diluted share in the quarter and adjusted net income by $0.6 million or $0.02 per diluted share. Summary financial results for the year ended December 31, 2006 are as follows: -- Total revenues for the year were $222.3 million, an increase of 29 percent over revenues of $172.0 million in 2005. -- Net income for the year, including the impact of employee stock option expense, was $18.4 million, or $0.56 per diluted share, an increase of $12.8 million, or $0.38 per diluted share, compared to 2005. -- Adjusted net income (non-GAAP) for the year, 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 $19.0 million, or $0.58 per diluted share, an increase of $6.4 million, or $0.18 per diluted share, compared to 2005. John Heyman, the Company's chief executive officer said, "We are very pleased with the strong finish of another exceptional 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." "We are very pleased with the progression of our overall financial model," said Mark Haidet, the Company's chief financial officer. "We continue to improve our operating leverage with an 11% adjusted operating margin for the year, while making significant investments in long-term growth opportunities. In addition, free cash flow for the quarter was $11.5 million resulting in a $9.3 million increase in cash. This improvement was driven by increased inventory turns and a 12 day reduction in days sales outstanding." Haidet continued, "Our 2007 guidance assumes continued operating margin expansion resulting in adjusted operating income growth of approximately 25% and a cash tax rate of 20% for the year." The Company's updated guidance is as follows: Revenue Range Adjusted Earnings (millions) (non-GAAP) / Share Range - ---------------------------------------------------------------------- Quarter ending March 31, 2007 $55-$56 $.11 - $.12 - ---------------------------------------------------------------------- Year ending Dec. 31, 2007 - previous $245 -$260 $.60 - $.65 - ---------------------------------------------------------------------- Year ending Dec. 31, 2007 - updated $245 -$260 $.64 - $.67 - ---------------------------------------------------------------------- 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 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 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 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, the impact of changes in the valuation allowance against deferred tax assets 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) and excludes the impact of changes in the valuation allowance against deferred tax assets. 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. The Company also provides free cash flow in this press release as additional information relating to the Company's operating results. Free cash flow is calculated by taking the Company's cash flow from operations and reducing it by capital expenditures and the software development costs that were capitalized during the period. Radiant will hold its fourth 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 1-888-829-8668 - 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 Dec. 31, Dec. 31, 2006 2005 --------- --------- Current assets Cash and cash equivalents $15,720 $17,641 Accounts receivable, net 35,203 27,559 Inventories, net 26,484 18,093 Deferred tax assets 9,327 - Other current assets 1,310 2,287 --------- --------- Total current assets 88,044 65,580 Property and equipment, net 14,726 9,607 Software development costs, net 5,019 2,249 Deferred tax assets, non-current 5,252 - Goodwill 61,948 44,239 Intangibles, net 23,447 20,537 Other long-term assets 219 293 --------- --------- Total assets $198,655 $142,505 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term debt facility 6,489 - Current portion of long-term debt 7,439 4,329 Accounts payable and accrued liabilities 30,430 23,992 Accrued contractual obligations and payables due to Related Party 3,665 1,947 Client deposits and unearned revenues 10,365 12,490 --------- --------- Total current liabilities 58,388 42,758 Client deposits and unearned revenues, net of current portion 188 376 Long-term debt, net of current portion 20,895 14,133 Other long-term liabilities 3,213 805 --------- --------- Total liabilities 82,684 58,072 --------- --------- Shareholders' equity Common stock, no par value; 100,000,000 shares authorized; 30,923,800 and 30,094,973 shares issued and outstanding, respectively - - Additional paid-in capital 137,151 124,744 Accumulated other comprehensive income (loss) 487 (287) Accumulated deficit (21,667) (40,024) --------- --------- Total shareholders' equity 115,971 84,433 --------- --------- Total liabilities and shareholders' equity $198,655 $142,505 ========= ========= - - RADIANT SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) For the three months ended December 31, 2006 2006 GAAP Adjustments Non-GAAP --------- ------------ --------- Revenues: System sales $37,130 $37,130 Client support, maintenance and other services 23,713 23,713 --------- --------- Total revenues 60,843 60,843 Cost of revenues: System sales 19,049 (132) (a) 18,917 Client support, maintenance and (a) other services 15,040 (57) 14,983 --------- -------- --------- Total cost of revenues 34,089 (189) (e) 33,900 --------- -------- --------- Gross profit 26,754 189 (e) 26,943 Operating Expenses: Product development 5,324 (131) (a) 5,193 Sales and marketing 7,217 (212) (a) 7,005 Depreciation of fixed assets 1,011 1,011 Amortization of intangible assets 2,047 (2,047) (b) - General and administrative 6,575 (284) (a) 6,291 --------- -------- --------- Total operating expenses 22,174 (2,674) (e) 19,500 Income from operations 4,580 2,863 (e) 7,443 Interest and other expense, net 945 945 --------- -------- --------- Income from operations before income (e) taxes 3,635 2,863 6,498 Income tax provision (41) 5 (d) (36) --------- -------- --------- Net income $3,594 2,868 (e) $6,462 Net income per share Basic $0.12 $0.21 ========= ========= Diluted $0.11 $0.20 ========= ========= Weighted average shares outstanding: Basic 30,875 30,875 ========= ========= Diluted 32,434 32,434 ========= ========= For the three months ended December 31, 2005 2005 GAAP Adjustments Non-GAAP --------- ------------ --------- Revenues: System sales $28,907 $28,907 Client support, maintenance and other services 19,435 19,435 --------- --------- Total revenues 48,342 48,342 Cost of revenues: System sales 15,472 15,472 Client support, maintenance and other services 12,934 12,934 --------- -------- --------- Total cost of revenues 28,406 - 28,406 --------- -------- --------- Gross profit 19,936 19,936 Operating Expenses: Product development 4,411 4,411 Sales and marketing 5,483 5,483 Depreciation of fixed assets 847 847 Amortization of intangible assets 1,467 (1,467) (b) - Lease restructuring charges - - - General and administrative 4,569 4,569 --------- -------- --------- Total operating expenses 16,777 (1,467) (e) 15,310 Income from operations 3,159 1,467 (e) 4,626 Interest and other expense, net 275 275 --------- -------- --------- Income from operations before income (e) taxes 2,884 1,467 4,351 Income tax provision (454) (73) (d) (527) --------- -------- --------- Net income $2,430 1,394 (e) $3,824 Net income per share Basic $0.08 $0.13 ========= ========= Diluted $0.08 $0.12 ========= ========= Weighted average shares outstanding: Basic 29,927 29,927 ========= ========= Diluted 32,238 32,238 ========= ========= For the year ended December 31, 2006 2006 GAAP Adjustments Non-GAAP --------- ------------ --------- Revenues: System sales $130,155 $130,155 Client support, maintenance and other services 92,155 92,155 --------- --------- Total revenues 222,310 222,310 Cost of revenues: System sales 68,250 (502) (a) 67,748 Client support, maintenance and (a) other services 56,201 (221) 55,980 --------- -------- --------- Total cost of revenues 124,451 (723) (e) 123,728 --------- -------- --------- Gross profit 97,859 723 (e) 98,582 Operating Expenses: Product development 21,746 (572) (a) 21,174 Sales and marketing 26,383 (769) (a) 25,614 Depreciation of fixed assets 3,532 3,532 Amortization of intangible assets 8,190 (8,190) (b) - Lease restructuring charges 1,663 (1,663) (c) - General and administrative 25,292 (1,196) (a) 24,096 --------- -------- --------- Total operating expenses 86,806 (12,390) (e) 74,416 Income from operations 11,053 13,113 (e) 24,166 Interest and other expense, net 2,999 2,999 --------- -------- --------- Income from operations before income (e) taxes 8,054 13,113 21,167 Income tax benefit (provision) 10,303 (12,441) (d) (2,138) --------- -------- --------- Net income $18,357 672 (e) $19,029 Net income per share Basic $0.59 $0.62 ========= ========= Diluted $0.56 $0.58 ========= ========= Weighted average shares outstanding: Basic 30,861 30,861 ========= ========= Diluted 32,636 32,636 ========= ========= For the year ended December 31, 2005 2005 GAAP Adjustments Non-GAAP --------- ------------ --------- Revenues: System sales $98,530 $98,530 Client support, maintenance and other services 73,512 73,512 --------- --------- Total revenues 172,042 172,042 Cost of revenues: System sales 53,687 53,687 Client support, maintenance and other services 48,605 48,605 --------- -------- --------- Total cost of revenues 102,292 - 102,292 --------- -------- --------- Gross profit 69,750 69,750 Operating Expenses: Product development 14,406 14,406 Sales and marketing 19,137 19,137 Depreciation of fixed assets 3,267 3,267 Amortization of intangible assets 5,317 (5,317) (b) - Impairment of HotelTools software 550 (550) (c) - Lease restructuring charges 1,450 (1,450) (c) - General and administrative 18,022 18,022 --------- -------- --------- Total operating expenses 62,149 (7,317) (e) 54,832 Income from operations 7,601 7,317 (e) 14,918 Interest and other expense, net 1,010 1,010 --------- -------- --------- Income from operations before income (e) taxes 6,591 7,317 13,908 Income tax provision (1,029) (246) (d) (1,275) --------- -------- --------- Net income $5,562 7,071 (e) $12,633 Net income per share Basic $0.19 $0.43 ========= ========= Diluted $0.18 $0.40 ========= ========= Weighted average shares outstanding: Basic 29,503 29,503 ========= ========= Diluted 31,569 31,569 ========= ========= (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 months and year ended December 31, 2006 was approximately $0.8 million and $3.3 million, 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 amount for 2006 includes lease restructuring charges and the amounts for 2005 includes lease restructuring charges and the write- off of purchased software. We have excluded these costs because they do not correlate to the expenses of our core operations and we do not believe these to be common costs that result from normal operating activities. (d) Amount represents the impact of the above adjustments on the income tax provision 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. The Company reports its non-GAAP income tax provision on a cash tax rate basis which was approximately 10% for the year ended December 31, 2006 and 9% for the year ended December 31, 2005. (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., Atlanta Sara Ford, 770-576-6832 -----END PRIVACY-ENHANCED MESSAGE-----