PAR PAR Technology Corp

Revenue increased 6.2% to $63.4 million

PAR Technology Corporation (NYSE:PAR) a leading provider of hospitality/retail management systems and Government contract services today announced results for the fourth quarter and year ended December 31, 2014.

Summary of Fiscal 2014 Fourth Quarter and Year End Financial Results

• Revenue increased 6.2% to $63.4 million, compared to $59.7 million in the fourth quarter of 2013.
• Adjusted (non-GAAP) net-income from continuing operations was $776,000, or $0.05 per diluted share, compared to adjusted (non-GAAP) income from continuing operations of $414,000, or $0.03 per diluted share, in the same period last year.
• GAAP net loss in the fourth quarter of fiscal 2014 was $(2.0) million, or $(0.13) per share, compared to net income of $245,000, or $0.02 per diluted share for the same period in 2013.
• Fiscal year 2014 revenue of $233.6M compared to $241.4 million reported in 2013
• Adjusted (non-GAAP) net income from continuing operations was $83,000 and $0.01 per diluted share compared to adjusted (non-GAAP) net income from continuing operations of $1.5 million or $0.10 per diluted share for 2013
• GAAP net loss from continuing operations of ($3.7 million) or ($0.24) per share for fiscal 2014, compared to net income of $569,000 or $0.04 per diluted share reported for fiscal 2013

A reconciliation and description of non-GAAP financial measures to their comparable GAAP financial measures are included in the tables following this news release.

“We are encouraged with the improved performance in the quarter, on a non-GAAP basis, as it demonstrates the progress being made as evidenced by the revenue growth in both our Hospitality and Government segments. Within our Hospitality segment, we have continued to experience success with our strategy of increasing our revenue generated through sales to smaller chains and independent restaurants, a strategy further facilitated by our acquisition of Brink Software in September of last year. Partially offsetting the revenue growth was a reduction in volume from certain large restaurant customers resulting from the completion of technology rollouts in prior periods. To mitigate the revenue volatility created by our tier one customers, we are committed to our revenue diversification strategy and are encouraged by the recent market acceptance and adoption of our cloud technologies,” commented PAR President & CEO Ronald J. Casciano. Furthermore, our Government business continued to perform well resulting from an increase in task orders on our large ISR contracts.

Casciano concluded, “Fiscal 2014 was a year of transition for PAR as new Directors were added to our Board and several changes were made to our management structure. We have recommitted the Company to focus and execute upon our strategic goals to reestablish PAR as a consistent performing technology solutions company.”

Certain Company information in this release or statements made by its spokespersons from time to time may contain forward-looking statements. Any statements in this document that do not describe historical facts are forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including without limitation, delays in new product introduction, risks in technology development and commercialization, risks in product development and market acceptance of and demand for the Company’s products, risks of downturns in economic conditions generally, and in the quick service sector of the restaurant market specifically, risks of intellectual property rights associated with competition and competitive pricing pressures, risks associated with foreign sales and high customer concentration, and other risks detailed in the Company’s filings with the Securities and Exchange Commission.

About PAR Technology Corporation

PAR Technology Corporation's stock is traded on the New York Stock Exchange under the symbol PAR. PAR’s Hospitality segment has been a leading provider of restaurant and retail technology for more than 30 years and offers technology solutions for the full spectrum of restaurant operations, from large chain and independent table service restaurants to international quick service chains. This segment also provides hotel management systems with a complete suite of powerful tools for guest management, recreation management, and timeshare/condo management. In addition, PAR offers the spa industry a leading management application specifically designed to support the unique needs of the resort spa and day spa markets, a rapidly growing hospitality market segment. PAR’s products can be found in retailers, cinemas, cruise lines, stadiums and food service companies. PAR’s Government Business is a leader in providing computer-based system design, engineering and technical services to the Department of Defense and various federal agencies.

Visit www.partech.com for more information.

There will be a conference call at 4:30 p.m. eastern time on March 16, 2015, during which the Company’s management will discuss the financial results for the fourth quarter of 2014. If you would like to participate in this conference please call 877-415-3178 approximately 10 minutes before the call is scheduled to begin and use the PAR pass code 53117502. Individual & Institutional Investors will have the opportunity to listen to the conference call/event over the Internet. Individual Investors can listen to the call by visiting PAR’s website at www.partech.com. In case you are unable to participate in the conference call, an automatic replay will be available on PAR’s website until March 23, 2015 or dial 888-286-8010 and use the Pass Code number 43490297 until March 23, 2015 as well.

        PAR TECHNOLOGY CORPORATION CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

  December 31, Assets 2014 2013 Current assets: Cash and cash equivalents $ 10,167 $ 10,015 Accounts receivable-net 31,445 30,688 Inventories-net 25,922 24,465 Deferred income taxes 4,512 3,747 Other current assets   4,597     3,418   Total current assets 76,643 72,333 Property, plant and equipment - net 6,135 5,494 Deferred income taxes 13,802 15,083 Goodwill 14,722 6,852 Intangible assets - net 22,952 15,071 Other assets   3,043     2,675   Total Assets $ 137,297   $ 117,508   Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 3,173 $ 166 Borrowings under line of credit 5,000 - Accounts payable 19,667 17,200 Accrued salaries and benefits 6,428 6,663 Accrued expenses 6,578 2,701 Customer deposits 2,345 1,071 Deferred service revenue 12,695 12,170 Income taxes payable   475     185   Total current liabilities   56,361     40,156   Long-term debt   2,566     918   Other long-term liabilities   8,847     3,714   Total liabilities   67,774     44,788   Commitments and contingencies - - Shareholders’ Equity: Preferred stock, $.02 par value, 1,000,000 shares authorized - -

Common stock, $.02 par value, 29,000,000 shares authorized;17,274,708 and 17,301,925 shares issued; 15,566,599 and 15,593,816 outstanding

345 344 Capital in excess of par value 44,865 43,635 Retained earnings 31,465 35,116 Accumulated other comprehensive loss (1,316 ) (539 ) Treasury stock, at cost, 1,708,109 shares   (5,836 )   (5,836 ) Total shareholders’ equity   69,523     72,720   Total Liabilities and Shareholders’ Equity $ 137,297   $ 117,508             PAR TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

  For the three months ended For the year ended December 31, December 31, 2014   2013 2014   2013 Net revenues: Product $ 23,683 $ 22,001 $ 87,246 $ 90,847 Service 15,364 15,498 58,675 61,529 Contract   24,329     22,167     87,689     89,018     63,376     59,666     233,610     241,394   Costs of sales: Product 16,642 15,511 59,520 62,317 Service 9,949 10,161 40,421 43,659 Contract   22,989     20,143     82,347     82,583     49,580     45,815     182,288     188,559   Gross margin   13,796     13,851     51,322     52,835   Operating expenses: Selling, general and administrative 9,142 9,610 37,297 37,925 Research and development 4,323 3,991 15,965 15,567 Amortization of identifiable intangible assets   248     -     279     -     13,713     13,601     53,541     53,492   Operating income (loss) from continuing operations 83 250 (2,219 ) (657 ) Other income (expense) net (4 ) 133 304 506 Interest expense   (73 )   (18 )   (136 )   (60 ) Income (loss) from continuing operations before (provision) benefit for income taxes 6 365 (2,051 ) (211 ) (Provision) benefit for income taxes   (2,040 )   (120 )   (1,600 )   780   Income (loss) from continuing operations (2,034 ) 245 (3,651 ) 569 Discontinued operations Loss on discontinued operations (net of tax)   -     -     -     (211 ) Net Income (loss) $ (2,034 ) $ 245   $ (3,651 ) $ 358   Basic Earnings per Share: Income (loss) from continuing operations (0.13 ) 0.02 (0.24 ) 0.04 Loss from discontinued operations   -     -     -     (0.01 ) Net income (loss) $ (0.13 ) $ 0.02   $ (0.24 ) $ 0.02   Diluted Earnings per Share: Income (loss) from continuing operations (0.13 ) 0.02 (0.24 ) 0.04 Loss from discontinued operations   -     -     -     (0.01 ) Net income (loss) $ (0.13 ) $ 0.02   $ (0.24 ) $ 0.02   Weighted average shares outstanding Basic   15,570     15,456     15,501     15,240   Diluted   15,570     15,530     15,501     15,273           PAR Technology Corporation Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data)           For the three months ended December 31, 2014 For the three months ended December 31, 2013

Reportedbasis(GAAP)

  Adjustments  

Comparablebasis (Non-GAAP)

Reportedbasis(GAAP)

  Adjustments  

Comparablebasis (Non-GAAP)

  Net revenues $ 63,376 $ - $ 63,376 $ 59,666 $ - $ 59,666 Costs of sales   49,580     -   49,580     45,815     -     45,815   Gross Margin 13,796 - 13,796 13,851 - 13,851   Operating Expenses Selling, general and administrative 9,142 593 8,549 9,610 272 9,338 Research and development 4,323 - 4,323 3,991 - 3,991 Amortization of identifiable intangible assets   248     248   -     -     -     -   13,713 841 12,872 13,601 272 13,329 Operating income from continuing operations 83 841 924 250 272 522 Other income (expense), net (4 ) - (4 ) 133 - 133 Interest expense   (73 )   -   (73 )   (18 )   -     (18 ) Income from continuing operations before (provision) benefit for income taxes 6 841 847 365 272 637 (Provision) benefit for income taxes   (2,040 )   1,969   (71 )   (120 )   (103 )   (223 ) Income (loss) from continuing operations   (2,034 )   2,810   776     245     169     414   Loss from discontinued operations (net of tax)   -     -     -     -   Net Income (loss) $ (2,034 ) $ 776   $ 245   $ 414   Income (loss) per diluted share – continuing operations $ (0.13 ) $ 0.05   $ 0.02   $ 0.03   Loss per diluted share – discontinued operations $ -   $ -   $ -   $ -   Income (loss) per diluted share $ (0.13 ) $ 0.05   $ 0.02   $ 0.03    

The Company reports its financial results in accordance with GAAP, which refers to financial information presented in accordance with generally accepted accounting principles in the United States. However, non-GAAP adjusted financial measures, as defined in the reconciliation table above, are provided herein because management uses such measures in evaluating the results of the continuing operations of the Company and believes this information provides investors better insight into underlying business trends and performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.

The adjustments for the three months ended December 31, primarily relate to the Company’s stock compensation expense and other severance related charges included within the Company’s operating expenses. During the fourth quarter of 2014, the Company recorded severance and other related charges of $324,000, acquisition related costs of $71,000, amortization of acquired intangible assets of $248,000 and equity based compensation charges of $198,000. In addition, the Company recorded income tax expense of $1,969,000 primarily associated with the repatriation of earnings from a foreign, wholly owned subsidiary.

During the fourth quarter of fiscal year 2013, the Company recorded $272,000 of equity based compensation which has been included in the table above.

  PAR Technology Corporation Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data)               For the year ended December 31, 2014 For the year ended December 31, 2013

Reportedbasis(GAAP)

  Adjustments  

Comparablebasis (Non-GAAP)

Reportedbasis(GAAP)

  Adjustments  

Comparablebasis (Non-GAAP)

  Net revenues $ 233,610 $ - $ 233,610 $ 241,394 $ - $ 241,394   Costs of sales   182,288     -   182,288     188,559     -     188,559   Gross Margin 51,322 - 51,322 52,835 - 52,835   Operating Expenses Selling, general and administrative 37,297 1,945 35,352 37,925 1,338 36,587 Research and development 15,965 - 15,965 15,567 106 15,461 Amortization of identifiable intangible assets   279     279   -     -     -     -   53,541 2,224 51,317 53,492 1,444 52,048 Operating income (loss) from continuing operations (2,219 ) 2,224 5 (657 ) 1,444 787 Other income, net 304 - 304 506 - 506 Interest expense   (136 )   -   (136 )   (60 )   -     (60 ) Income (loss) from continuing operations before (provision) benefit for income taxes (2,051 ) 2,224 173 (211 ) 1,444 1,233 (Provision) benefit for income taxes   (1,600 )   1,510   (90 )   780     (543 )   237   Income (loss) from continuing operations   (3,651 )   3,734   83     569     901     1,470   Loss from discontinued operations (net of tax)   -     -     (211 )   (211 ) Net Income (loss) $ (3,651 ) $ 83   $ 358   $ 1,259   Income (loss) per diluted share – continuing operations $ (0.24 ) $ 0.01   $ 0.04   $ 0.10   Loss per diluted share – discontinued operations $ -   $ -   $ (0.01 ) $ (0.01 ) Income (loss) per diluted share $ (0.24 ) $ 0.01   $ 0.02   $ 0.08    

During the year ended December 31, 2014, the Company recorded total charges of $2,224,000, which included $1,185,000 of equity based compensation expense. The remaining $1,039,000 expense related to severance charges of $597,000, acquisition related expenses of $163,000 and amortization of acquired intangible assets of $279,000. In addition, the Company recorded income tax expense of $1,510,000 primarily associated with the repatriation of earnings from a foreign, wholly owned subsidiary.

For the year ended December 31, 2013, the Company recorded total charges of $1,444,000, which included equity based compensation expense of $187,000 and other charges of $1,257,000. The other charges of $1,257,000 were composed of $986,000 for separation related charges and legal costs of $271,000 associated with an intellectual property matter that was settled during 2013. The aforementioned charges, along with an associated adjustment to the Company’s provision for income taxes have been excluded in the Company’s non-GAAP measures because they are considered non-recurring in nature and are quantitatively and qualitatively different from the Company’s core operations during any particular period.

PAR Technology CorporationChristopher R. Byrnes, (315) 738-0600 ext. 6226cbyrnes@partech.comwww.partech.com