2 Md. firms on `hot' list

Business Week puts RWD, Micros Systems in its top 100

May 27, 1999|By William Patalon III | William Patalon III,SUN STAFF

Two Maryland technology companies -- Columbia-based RWD Technologies Inc. and Beltsville's Micros Systems Inc. -- have landed on Business Week's list of "Hot Growth Companies," the magazine's annual ranking of the nation's 100 fastest-growing public companies.

RWD Technologies was ranked 39th and Micros 94th. Both were new to the list, which appears in Business Week's May 31 issue.

For RWD founder and Chairman Robert W. Deutsch, his company's addition to the list affirms that the technology training and consulting company has implemented the right strategies for continued strong growth.

"We're really delighted that they're looking at this company," said Deutsch.

Companies make the list based on their three-year growth in sales, earnings and return on capital, the latter a measure of how effectively a company uses its money, factories and other assets. Very small companies -- called "microcaps" -- are excluded from the survey because they are not necessarily established enterprises.

Micros Systems makes "point-of-sale," or transaction, equipment for the restaurant and hotel industries and is a "leading force," if not dominant, in that business, said Kurt C. Funderburg, an analyst with Ferris Baker Watts in Baltimore.

"The growth prospects for these industries for the next decade are excellent," said Funderburg, who has an "outperform" rating on Micros shares. "The company will be a force there. It has top-notch technology and focuses on having [unparalleled] service to clients."

Micros Chief Executive Officer A. L. "Tom" Giannopoulos said the company, which had about $50 million in annual sales in the mid-1990s, has been growing at a 35 percent annual rate for the past several years and should have sales of $335 million to $340 million this year.

"Our goal is to have $1 billion in annual sales within the next three to four years," Giannopoulos said. "We have a leading position in our industry."

Micros Systems shares closed yesterday at $32, unchanged. The 52-week range is $21.50 to $39.50. Funderburg, who sees profits growing at an annual rate of 20 percent to 25 percent for the next several years -- an exceptional pace for an established company -- has a 12-month target of $40 for Micros shares.

The shares of RWD Technologies have suffered, as have some other technology-development consulting companies, over concerns that big corporations are di- verting money from modernization and efficiency programs into solving the "millennium bug," or Y2K, software problem.

That's unfortunate because "the outlook is very positive for this company," said analyst William R. Loomis, who follows RWD Technologies for Legg Mason Wood Walker Inc. in Baltimore. "It has a good management team and good diversity in its [business] sectors. I think they are in the right growth areas."

RWD Technologies shares closed yesterday at $14.25, up 18.75 cents. In the past year, the stock has ranged from $11.50 to $27.25. Loomis has a 12-month target of $30 for the stock.

Technology companies such as RWD and Micros are key to the future of the Maryland economy, economists have said. The lack of a solid high-technology base slowed the state's recovery from the recession of the early 1990s, the economists say.

Now, however, the proliferation of telecommunications, biotechnology and other technology companies should continue to create jobs and buttress the state's economy if overall national growth slows, they say.

Pub Date: 5/27/99

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