- The Washington Times - Tuesday, November 26, 2002

Contracts with a Reno, Nev., hotel and the U.S. Navy raised shares of Micros Systems Inc., a Columbia, Md., information-technology company for the hospitality industry.
Its stock closed yesterday at $24.76, up $2.82 from Nov. 18, on the Nasdaq.
The company last week announced a $3.5 million deal with Golden Phoenix Hotel & Casino to provide casino-management systems, as well as a deal to install personnel-monitoring systems on two Navy ships for an undisclosed amount.
Peter Rogers, Micros vice president of business development and investor relations, said the new contracts, along with a marketing focus on the restaurant industry, helped increase sales and revenue during a stagnant spending period for the hotel industry, the company's main customer base.
"Hotels are going to be cautious right now and get by with what they have," Mr. Rogers said. "But business is picking up in the restaurant industry and that's where we see the strength of the company for the next four or five years."
The tourism industry has been suffering from the sluggish economy and the effects of the September 11 terrorist attacks.
While the company's software is used primarily by hotel chains, 63 percent of contracts this year were from restaurants, pushing up sales 4 percent for the third quarter ended Sept. 30 to $45 million, from $43.4 million a year earlier.
"People are eating and restaurants have the leeway to update antiquated systems to keep up with the competition," Mr. Rogers said. "We plan on still marketing in the hotel industry, but these other contracts with the restaurants and government are great assurance to investors."
Net income in the third quarter more than tripled to $2.69 million (15 cents per share) from $879,000 (5 cents) a year ago, and revenue climbed 4 percent to $86.5 million from $83.5 million.
Mr. Rogers projected the company would hit revenue of $385 million and earnings of $1.18 per share for the year, compared with revenue of $365 million and profits of 90 cents per share for 2001.
Thomas Underwood, an equity-research analyst at Legg Mason Wood Walker Inc., said he was advising investors to hold Micros stock. He said the company's earnings were depressed by the downturn in the travel industry.
"The stock's performance is largely in line with the overall market performance," he said. "Given that we won't see any major rebounds in the hotel industry until 2004, the stock probably won't produce any significant performance above market level anytime soon."
But Mr. Underwood said the company's lack of debt and expansion into government services has made it one of the few profitable information-technology companies.
"Earnings growth has been up for the last couple of years, and we expect that to continue for the time being," he said.
Matthew Kempler, analyst at New York equity-research firm Sidoti & Co. LLC, said Micros is set to capitalize on the hotel industry when it rebounds.
"A lot of hotel chains are examining the company's software right now, but they can't commit to spending," said Mr. Kempler, who rated the stock as a buy. "Once there is more stability in the travel industry, there will be larger IT spending."
Mr. Kempler said his concern with the company is its emphasis on the restaurant industry. "It's natural for Micros to tweak its product and target other venues to diversify its market. But the product still needs to be relevant so that the company isn't breaking away from its core clientele."


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