EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

Radiant Systems, Inc. Reports First Quarter Results; Continued Growth Results in Adjusted Earnings of $0.10 Per Diluted Share in the First Quarter

ATLANTA—(BUSINESS WIRE)—April 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 first quarter ended March 31, 2006.

Summary financial results for the first quarter of 2006 are as follows:

 

    Total revenues for the period were $49.0 million, an increase of 31.3 percent over revenues of $37.3 million for the same period in 2005.

 

    Net income for the period, including the impact of employee stock option expense, was $683,000, or approximately $0.02 per diluted share, a decrease of $489,000, or $0.02 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 charges and compensation expense related to the issuance of employee stock options, was $3.4 million, or $0.10 per diluted share, an increase of $0.9 million, or $0.02 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 reception our offerings are seeing in the marketplace, as indicated by another record revenue quarter. New product introductions, increased sales activity and complementary acquisitions have been key drivers of our growth.”

Heyman added, “We continue to see strong demand across our segments. Our pipeline is strong, our customer base is diverse and our products are delivering strong returns for our customers. Additionally, we have enhanced our capabilities through the addition of the MenuLink and Synchronics organizations. These factors should result in increased revenues and earnings throughout the year.”

“In addition to our continued revenue growth, we are pleased to see improvement in our gross profit margin,” said Mark Haidet, the Company’s chief financial officer. “This improvement was primarily in our service margin through improved utilization of resources and increased revenues.”

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.”

The Company’s updated guidance is as follows:

 

     Revenue
Range
(millions)
   Adjusted
Earnings
(non-GAAP)
/ Share
Range

Quarter ending June 30, 2006

   $ 51 - $ 53    $.10 - $.12

Year ending Dec. 31, 2006 - previous

   $205 - $218    $.47 - $.55

Year ending Dec. 31, 2006 - updated

   $210 - $218    $.48 - $.55


Commencing in the first quarter of 2006, the Company implemented the Statement of Financial Accounting Standard No. 123R (“FASB 123R”). The statement requires companies to expense the fair value of grants made under stock option programs over the vesting period of the options. The expense is a non-cash transaction. The Company adopted the “Modified Prospective Application” transition method that does not result in the restatement of previously issued financial statements. In its press releases, the Company will report its net income and earnings per share during fiscal year 2006 on both Generally Accepted Accounting Principles (“GAAP”) (which includes the share-based payment charge, which represents the non-cash stock option expense) and non-GAAP (which excludes the share-based payment 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, generally accepted accounting principles (“GAAP”) and may be different from adjusted net income measures used by other companies. Net income has been adjusted to exclude amortization of acquisition related intangible assets, non-recurring charges and compensation expense related to the issuance of employee stock options and includes the ongoing cash benefit of the utilization of net operating losses. 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 first 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.

Founded in 1985, Radiant Systems, Inc. provides innovative store technology for the hospitality and retail industries. Radiant’s point-of-sale, self-service kiosk and back-office technology enables operators to drive top-line growth and improve bottom-line performance. Headquartered in Atlanta, Radiant (www.radiantsystems.com) has deployed its solutions in more than 50,000 sites worldwide.

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; (iv) the Company’s new or future product offerings, and (v) the declaration and payment of dividends. 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 filings with the Securities and Exchange Commission.

RADIANT SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

 

     March 31,     December 31,  
     2006     2005  
ASSETS     

Current assets

    

Cash and cash equivalents

   $ 13,862     $ 17,641  

Accounts receivable, net

     32,600       27,559  

Inventories

     20,115       18,093  

Other short-term assets

     2,571       2,287  
                

Total current assets

     69,148       65,580  

Property and equipment, net

     11,171       9,607  

Software development costs, net

     2,543       2,249  

Goodwill

     61,302       44,239  

Intangibles, net

     29,590       20,537  

Other long-term assets

     298       293  
                
   $ 174,052     $ 142,505  
                
LIABILITIES AND SHAREHOLDERS’ EQUITY     

Current liabilities

    

Accounts payable and accrued liabilities

   $ 24,972     $ 23,992  

Accrued contractual obligations and payables due to Related Party

     2,348       1,947  

Customer deposits and unearned revenue

     17,354       12,490  

Current portion of long-term debt

     7,246       4,329  
                

Total current liabilities

     51,920       42,758  

Client deposits and deferred revenues, net of current portion

     329       376  

Long-term debt, less current portion

     25,909       14,133  

Other long-term liabilities

     756       805  
                

Total liabilities

     78,914       58,072  
                

Shareholders’ equity

    

Common stock, no par value; 100,000,000 shares authorized; 31,071,470 and 30,094,973 shares issued and outstanding, respectively

     —         —    

Additional paid-in capital

     134,909       124,744  

Accumulated other comprehensive loss

     (430 )     (287 )

Accumulated deficit

     (39,341 )     (40,024 )
                

Total shareholders’ equity

     95,138       84,433  
                
   $ 174,052     $ 142,505  
                


RADIANT SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

 

     For the three months
     ended March 31,
     2006
GAAP
   Adjustments     2006
Non-GAAP

Revenues:

       

System sales

   $ 26,439      $ 26,439

Client support, maintenance and other services

     22,598        22,598
               

Total revenues

     49,037        49,037

Cost of revenues:

       

System sales

     14,052    (94 )(a)     13,958

Client support, maintenance and other services

     12,766    (52 )(a)     12,714
                   

Total cost of revenues

     26,818    (146 )     26,672
                   

Gross profit

     22,219        22,365

Operating Expenses:

       

Product development

     5,627    (166 )(a)     5,461

Sales and marketing

     6,230    (155 )(a)     6,075

Depreciation of fixed assets

     741        741

Amortization of intangible assets

     2,047    (2,047 )(b)     —  

General and administrative

     5,995    (308 )(a)     5,687
                   

Total operating expenses

     20,640    (2,676 )     17,964

Income from operations

     1,579    2,822       4,401

Interest and other expense, net

     617        617
               

Income from operations before income taxes

     962        3,784

Income tax provision

     279    143 (c)     422
               

Net income

     683        3,362

Net income per share

       

Basic

   $ 0.02      $ 0.11
               

Diluted

   $ 0.02      $ 0.10
               

Weighted average shares outstanding:

       

Basic

     30,838        30,838
               

Diluted

     32,973        32,973
               

 

      For the three months
ended March 31,
     2005
GAAP
   Adjustments     2005
Non-GAAP

Revenues:

       

System sales

   $ 20,402      $ 20,402

Client support, maintenance and other services

     16,937        16,937
               

Total revenues

     37,339        37,339

Cost of revenues:

       

System sales

     10,629        10,629

Client support, maintenance and other services

     11,260        11,260
               

Total cost of revenues

     21,889    —         21,889
                   

Gross profit

     15,450        15,450

Operating Expenses:

       

Product development

     2,973        2,973

Sales and marketing

     4,211        4,211

Depreciation of fixed assets

     811        811

Amortization of intangible assets

     1,283    (1,283 )(b)     —  

General and administrative

     4,560        4,560
                   

Total operating expenses

     13,838    (1,283 )     12,555

Income from operations

     1,612    1,283       2,895

Interest and other expense, net

     257        257
               

Income from operations before income taxes

     1,355        2,638

Income tax provision

     183        183
               

Net income

     1,172        2,455

Net income per share

       

Basic

   $ 0.04      $ 0.08
               

Diluted

   $ 0.04      $ 0.08
               

Weighted average shares outstanding:

       

Basic

     29,247        29,247
               

Diluted

     30,302        30,302
               

(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. 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 quarter was $775,000 on a pre-tax and post-tax basis.
(b) Adjustment represents the exclusion of amortization of intangible assets from non- GAAP results.
(c) Tax effect of the non-GAAP adjustments described.

 

CONTACT:    Radiant Systems, Inc.
   Sara Ford, 770-576-6832
SOURCE:    Radiant Systems, Inc.