MICROS reported better-than-expected fourth-quarter results. Both
revenues and earnings increased on a year-over-year basis. Revenues
were aided by growth across all its business segments. Expansion of
the company's software-as-a-service capabilities and increase in
licensed software sales remain the growth catalysts, going forward.
MICROS' diverse offerings and expanding client base have prompted
Oracle to bid for the company. Impending investigations on the
deal, however, remain an overhang. Nonetheless, MICROS faces
competition from the likes of Square, Revel, Groupon and NCR, which
provide mobile and tablet-based offerings to the hospitality sector
that cannibalize MICROS' legacy POS workstations. Thus, we
reiterate our Neutral recommendation on MICROS.
Founded in 1977, MICROS Systems Inc. (MCRS) is headquartered in
Columbia. Formerly known as Picos Manufacturing Inc., the company
changed its name to MICROS Systems Inc. in 1978. The company
designs, manufactures, markets, and services enterprise information
solutions for the hospitality and specialty retail industries.
The hospitality industry comprises lodging, table service
restaurants, quick service restaurants, entertainment venues,
business foodservice operations, casinos, transportation
foodservice, government operations and cruise ships.
The specialty retail industry consists of retail operations,
selling directly to consumers, including retailers of clothing,
shoes, food, hardware, jewelry and other specialty items.
The enterprise information solutions comprise hotel information
systems, restaurant information systems and specialty retail
The hotel information systems include property-based management
systems (PMS), sales and catering systems, central reservation
systems (CRS), customer information systems, revenue management
systems and an Internet/Global Distribution System based hotel
The restaurant information systems consist of hardware and
software for point-of-sale (POS) and operational applications, a
suite of back-office applications, including inventory, labor
financial management and certain centrally hosted enterprise
The specialty retail information systems comprise software for
POS, loss prevention, web commerce applications, business
analytics, customer gift cards, electronic payments and enterprise
Apart from these, MICROS Systems offers an extensive array of
other support services. These services include installation,
operator and manager training, on-site hardware maintenance,
customized software development, application software support,
credit card software support, help desk, systems configuration,
network support, consulting and software hosting.
MICROS operates in the United States/Canada, EAME (Europe,
Africa and Middle East), the Pacific Rim and Latin America. The
company reports under two segments the United States/Canada and
International. By product mix, Service represented 67.5% of total
revenue in fiscal 2013. Hardware accounted for 21.2% of total
revenue and Software contributed the remaining 11.3%.
MICROS operates in a highly competitive environment. In the food
and beverage marketplace the company faces competition from NCR,
Panasonic, and Par Technology. In the hotel segment it faces
competition from the likes of Agilysys and Multi-Systems. Some of
the competitors in the retail segment comprise of companies such as
Escalate Retail, Red Prairie, Oracle, and SAP.
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