After a year in which its stock price rocketed 80 percent, Columbia-based Micros Systems Inc. said yesterday that it would split its stock two-for-one.
Micros, a leading global producer of information-management systems for hotels, restaurants and retailers, said it was making the move to attract more investors. Its shares began last year at $43.36 and ended at $78.06 - an increase of 80 percent. They closed yesterday at $70.20, up 33 cents.
"This stock split represents our commitment to increasing shareholder value," Tom Giannopoulos, chairman and chief executive of Micros, said. "We believe this stock split will benefit investors wishing to participate in Micros' growth and will serve to attract a broader spectrum of institutional and individual investors."
Micros makes reservation systems for hotels and so-called "point-of-sales" systems for restaurants and retailers that enable hospitality or retail clients to track their business in detail, run more efficiently and spot marketing opportunities.
Its business has surged recently. For its fiscal 2004 year, which ended June 30, Micros reported record revenue of $487.4 million, a 20 percent jump from the year before. Net income for the year was $33.3 million, also a record and up 53 percent from fiscal 2003.
The strong performance carried into the first quarter of fiscal 2005, prompting the company to boost its guidance to Wall Street: Micros is projecting revenue for the year to be between $520 million and $530 million, while net income would range from $38 million to $41 million.
Several factors have fueled the increase in sales and profits, including an upturn in travel that has benefited the hospitality industry and prompted many of the major players to modernize their information systems, Micros said.
Additional growth has come from landing major new customers, and from a relatively recent acquisition that moved Micros into the retail part of the point-of-sale business. The company has also worked hard to manage its finances and is benefiting from a lower tax rate as a result, said Peter J. Rogers Jr., Micros' vice president in charge of investor relations.
Companies traditionally announce stock splits after the price of their shares reach the mid- to high double digits, reasoning that such lofty prices discourage individual investors from purchasing a "round lot" of 100 shares. A two-for-one split cuts the price in half.
Currently, 80 percent of the company's outstanding shares are in the hands of institutional investors, while 20 percent is held by individuals, Rogers said.
The split "does help, long-term, to broaden the shareholder base," Rogers said.
Micros said the split will take effect Feb. 1 for shareholders of record Jan. 17. As of the close of business Tuesday, Micros had 18.865 million shares outstanding.