MICROS Systems Inc. (MCRS)
F4Q2010 Earnings Call Transcript
August 26, 2010 4:45 pm ET
Tom Giannopoulos – Chairman, President & CEO
Peter Rogers – EVP, IR & Business Development
Cindy Russo – EVP & CFO
Terry Tillman – Raymond James
Dan Perlin – RBC Capital Markets
Mayank Tandon – Signal Hill
Gil Luria – Wedbush Securities
Liam Burke – Janney Montgomery Scott
Bhavan Suri – William Blair & Co.
Brian Murphy – Sidoti & Company
Vincent Colicchio – Noble Financial
Brad Reback – Oppenheimer
Previous Statements by MCRS
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Ladies and gentlemen, welcome to MICROS Systems, Inc. fiscal year 2010 fourth quarter conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder this conference is being recorded Thursday, August 26, 2010.
I would now like to turn the conference over to Mr. Tom Giannopoulos, CEO. Please go ahead, sir.
Thanks, Jason, and good afternoon, everyone. Thank you for attending this conference call. As we all know, this is the Q4 and end of our fiscal year 2010 conference call. With me as always are Cynthia Russo, our CFO; Tom Patz; Peter Rogers, and we will commence with Peter and the disclaimer.
Thank you, Tom. Good afternoon, ladies and gentlemen. Some of the comments today are forward-looking statements that involve risks and uncertainties, such as uncertainties of product demand and market acceptance, impact of competitive products and pricing on margins, the ability to obtain under acceptable terms the right to incorporate in MICROS products and services; technology patented by others; environmental and health-related events; unanticipated tax liabilities; and the effects of terrorist activity and armed conflict.
MICROS undertakes no duty to update any forward-looking statements to conform to actual results or changes in MICROS’s expectations. Other risks and uncertainties associated with MICROS businesses are identified in the Management’s Discussion and Analysis of Financial Condition and Results of Operations and Business and Investment Risks sections of MICROS SEC filings. Tom?
Thank you, Peter. As can see from our press release, our financial results for the quarter and the fiscal year were very strong, especially considering their business conditions.
Over the last 12 months, we had a pretty good year by all accounts. We did have a small revenue growth year-to-year from $907 million to $914 million; had record gross margin for the year at 54.85%; record income from operations at $180 million, 19.7% of revenue; record income before taxes at $185 million or 20.3% of revenue; record net income at $127 million, 13.91% of revenue; record EPS at $1.57, a 17.2% growth versus last year’s $1.34; record cash now at $605 million, this is a plus $104 million positive change from last June a year ago; and during the year we spent around $24.3 million for the stock buyback program on the top of those numbers.
Days outstanding were at record low, 55 days and during the calendar year 2010 I should note our stock price hit an all-time high at $37.65, which was on May 3, 2010. The previous high was $37.23, which was back in December 24, 2007 before the slowdown.
For the fourth quarter, the results were as excellent as well. We saw double-digit revenue growth of 11.4% from $222 million last year to $248 million, and $248 million is the second highest quarter ever for our company.
Gross margin at 55%, very impressive, operating expenses down to 33.1% versus 34.6% last year, operating profit was up 25.2% from $43 million to $54 million and 21.8% as a percent of revenue. Net income was up 41% from $28 million to $39 million and EPS was up 44% from $0.34 to $0.49.
And then I will ask Cindy to give you some additional details and the financials.
Thanks, Tom. The highlights of the balance sheet for the quarter and the year are as follows. MICROS had $605.2 million of cash and investments at June 30. The cash and investments balance is an increase of $17.8 million from the March 31 quarter end and an increase of $108.4 million for the year.
During the fiscal year 2010, we generated of $210.1 million from operating activities, while spending a combined $11.5 million on property, plant and equipment and internally capitalized software, $30.7 million on acquisition, $32.6 million for the purchase of investments and $47.6 million for the repurchase of the common stock.
During the fiscal year, we purchased a total 1,646,000 shares of which 350,000 were purchased in the fourth quarter for approximately $11.7 million. Currently, we have Board approval to purchase an additional 3,636,000 shares. During the fiscal year, we also received $23.3 million from the exercise of stock options.
The accounts receivable balance of $153.1 million is a decrease of $8.6 million from the March quarter and a decrease of $2.1 million from June 30, 2009.
As Tom stated, days sales outstanding at year end were a company record at 55.5 days, a decrease of eight days from last quarter and a decrease of 7.2 days from last year end. International DSOs were 66 days, down 14.5 days from our March quarter, and down 8.1 days from June 2009. Domestic DSOs were 45.9 days, down 1.8 days from our last release and down 5.4 days from a year ago.