PAR PAR Technology Corp

• Full Year 2015 Revenues of $229.0 million increase 5.1% over 2014
• Fourth Quarter Revenues of $56.8 million declined 4.2% year-over-year
• Fourth Quarter GAAP Earnings Per Share Reported at $0.08, compared to a loss of ($0.07) per share reported in Fourth Quarter 2014

PAR Technology Corporation (NYSE:PAR) a leading provider of restaurant/retail management systems and Government contract services today announced results for the fourth quarter and year ended December 31, 2015.

Summary of Fiscal 2015 Fourth Quarter and Year End Financial Results From Continuing Operations

• Revenue decreased 4.2% to $56.8 million, compared to $59.3 million in the fourth quarter of 2014 due to reductions in task orders surrounding the Eagle Intel-X contract quarter over quarter
• GAAP net income from continuing operations in the fourth quarter of fiscal 2015 was $1.3 million, or $0.08 per diluted share, compared to net loss from continuing operations of ($1.0 million), or ($0.07) loss per share for the same period in 2014
• Adjusted (non-GAAP) net income from continuing operations was $2.0 million, or $0.13 per diluted share, compared to adjusted (non-GAAP) net income from continuing operations of $1.8 million, or $0.11 per share, in the same period last year
• Fiscal year 2015 revenues increased 5.1% to $229.0 million compared to $217.8 million reported in 2014
• GAAP net income from continuing operations of $4.0 million or $0.26 per diluted share for fiscal 2015, compared to net income of $71,000 or $0.00 per diluted share reported for fiscal 2014
• Adjusted (non-GAAP) net income from continuing operations was $6.1 million and $0.39 per diluted share compared to adjusted (non-GAAP) net income from continuing operations of $3.8 million or $0.24 per diluted share for 2014

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

“I am pleased to report improved fourth quarter and year end results. Our restaurant technology business continues to see renewed strength from our Tier 1 customers, evidenced by the 6.6% product revenue growth in the fourth quarter when compared to the same period 2014. We are seeing positive momentum with our cloud solutions, Brink POS® and SureCheck® within restaurants and retail/grocery enterprises and are encouraged by the growth in software and software related revenues in the quarter and for the year,” commented Karen E. Sammon, PAR’s President & CEO. “PAR Government exceeded our internal plan for profit in the quarter while reporting lower revenues due to the higher than normal amount of task orders received in the fourth quarter 2014 that were not duplicated this year. Our Government business ended the year with several new contract awards in the quarter and an improved backlog that provides a solid base for our 2016 plan.”

Sammon continued, “2015 was an important and transformational year for our Company. Over the last twelve months we broadened our efficiencies as a company, continued to innovate with new technical solutions, strengthened our competitive position, divested an underperforming business unit and delivered improved results to our stakeholders. As our Company’s new CEO, I am pleased with the operational, strategic and financial progress made by PAR throughout last year and remain keenly focused on enhancing shareholder value.”

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 35 years and offers technology solutions for the full spectrum of restaurant operations, from large global quick service chains and table service restaurants to fast casual and independent operators. 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 mission services to the Department of Defense and various federal agencies. Visit www.partech.com for more information.

There will be a conference call at 4:45 p.m. eastern time on March 30, 2016, during which the Company’s management will discuss the financial results for the fourth quarter of 2015. If you would like to participate in this conference please call (866) 868-9502 approximately 10 minutes before the call is scheduled to begin, no passcode is necessary to access the call. 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 April 6, 2016 or dial (855) 859-2056 and using conference ID 77961340 until April 6, 2016 as well.

     

PAR TECHNOLOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

(Unaudited)

    December 31, Assets   2015   2014 Current assets: Cash and cash equivalents $ 8,024 $ 9,867 Accounts receivable-net 29,530 29,674 Inventories-net 21,499 25,928 Deferred income taxes 6,741 4,512 Other current assets 3,808 4,018 Assets of discontinued operations   -   22,119 Total current assets 69,602 96,118 Property, plant and equipment - net 5,716 5,148 Note receivable 3,320 - Deferred income taxes 11,038 11,357 Goodwill 11,051 11,051 Intangible assets - net 10,898 10,580 Other assets   3,687   3,043 Total Assets $ 115,312 $ 137,297 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 2,103 $ 3,173 Borrowings under line of credit - 5,000 Accounts payable 11,729 19,258 Accrued salaries and benefits 5,727 5,726 Accrued expenses 6,705 6,492 Customer deposits and deferred revenue 10,819 11,630 Income taxes payable 279 475 Liabilities of discontinued operations   441   4,617 Total current liabilities 37,803 56,371 Long-term debt 566 2,566 Other long-term liabilities   8,883   8,847 Total liabilities   47,252   67,784 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;17,352,198 and 17,274,708 shares issued, 15,644,729 and15,566,599 outstanding at December 31, 2015 and 2014,respectively

347 346 Capital in excess of par value 45,753 44,854 Retained earnings 30,574 31,465 Accumulated other comprehensive loss (2,778) (1,316) Treasury stock, at cost, 1,708,109 shares   (5,836)   (5,836) Total shareholders’ equity   68,060   69,513 Total Liabilities and Shareholders’ Equity $ 115,312 $ 137,297    

PAR TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

 

For the three months endedDecember 31,

   

For the year endedDecember 31,

2015     2014 2015     2014 Net revenues: Product $ 24,316 $ 22,803 $ 94,397 $ 84,484 Service 12,067 12,151 46,754 45,690 Contract   20,414       24,329   87,852       87,689   56,797       59,283   229,003       217,863 Costs of sales: Product 18,057 16,327 68,192 58,889 Service 7,898 9,151 32,824 35,011 Contract   18,790       22,989   81,848       82,347   44,745       48,467   182,864       176,247 Gross margin   12,052       10,816   46,139       41,616 Operating expenses: Selling, general and administrative 7,287 6,478 28,276 28,974 Research and development 2,407 2,598 10,247 8,947 Acquisition amortization   241       248     987       279   9,935       9,324   39,510       38,200 Operating income from continuing operations 2,117 1,492 6,629 3,416 Other (expense) income, net (742) 260 (800) 485 Interest expense   (56)       (73)   (308)       (136)

Income from continuing operations beforeprovision for income taxes

1,319 1,679 5,521 3,765 Provision for income taxes   (30)       (2,720)   (1,500)       (3,694) Income (Loss) from continuing operations 1,289 (1,041) 4,021 71 Discontinued operations Loss on discontinued operations (net of tax)   (407)       (993)   (4,912)       (3,722) Net Income (Loss) $ 882     $ (2,034) $ (891)     $ (3,651) Basic Earnings per Share: Income (Loss) from continuing operations 0.08 (0.07) 0.26 0.00 Loss from discontinued operations   (0.03)       (0.06)   (0.32)       (0.24) Net Income (Loss) $ 0.06     $ (0.13) $ (0.06)     $ (0.24) Diluted Earnings per Share: Income (Loss) from continuing operations 0.08 (0.07) 0.26 0.00 Loss from discontinued operations   (0.03)       (0.06)   (0.32)       (0.24) Net Income (Loss) $ 0.06     $ (0.13) $ (0.06)     $ (0.24) Weighted average shares outstanding Basic   15,616       15,570   15,562       15,501 Diluted   15,732       15,570   15,666       15,582     PAR TECHNOLOGY CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (in thousands, except per share data) (Unaudited)                       For the three months ended December 31, 2015 For the three months ended December 31, 2014

Reportedbasis (GAAP)

Adjustments

Comparablebasis (Non-GAAP)

Reported basis(GAAP)

Adjustments

Comparablebasis (Non-GAAP)

  Net revenues $ 56,797 - 56,797 $ 59,283 - 59,283 Costs of sales   44,745     -     44,745     48,467     -   48,467   Gross Margin 12,052 - 12,052 10,816 - 10,816   Operating Expenses

Selling, general andadministrative

7,287 - 7,287 6,478 593 5,885 Research and development 2,407 2,407 2,598 - 2,598 Acquisition amortization   241     241     -     248     248   -   Total operating expenses 9,935 241 9,694 9,324 841 8,483

Operating income fromcontinuing operations

2,117 241 2,358 1,492 841 2,333 Other (expense) income, net (742 ) 776 34 260 - 260 Interest expense   (56 )   26     (30 )   (73 )   -   (73 )

Income from continuingoperations before provision forincome taxes

1,319 1,043 2,362 1,679 841 2,520 Provision for income taxes   (30 )   (291 )   (321 )   (2,720 )   1,969   (751 )

Income (Loss) from continuingoperations

$ 1,289   $ 752   $ 2,041   $ (1,041 ) $ 2,810 $ 1,769  

Loss from discontinuedoperations, (net of tax)

$ (406 ) $ (406 ) $ (993 ) $ (993 ) Net Income (Loss) $ 883   $ 1,635   $ (2,034 ) $ 776  

Income (Loss) per diluted sharefrom continuing operations

$ 0.08   $ 0.13   $ (0.07 ) $ 0.11  

Loss per share fromdiscontinuing operations

$ (0.03 ) $ (0.03 ) $ (0.06 ) $ (0.06 ) Income (Loss) per diluted share $ 0.06   $ 0.10   $ (0.13 ) $ 0.05    

The Company reports its financial results in accordance with GAAP, which refers 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 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.

During the fourth quarter of 2015, the Company recognized amortization of acquired intangible assets of $241,000 and accreted interest of $26,000 related to the acquisition of Brink. Additionally, the Company recorded a write-off of $776,000 which represents the write-off of unauthorized transfer of Company funds that were made in contravention of the Company’s policies and procedures. The unauthorized transfers occurred during the period between September 25, 2015 and November 6, 2015. As of December 31, 2015, the Company is uncertain of the collectability relating to these funds and as a result, reduced its fair value to zero.

The adjustments for the three months ended December 31, 2014 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. 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 CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (in thousands, except per share data) (Unaudited)                       For the year ended December 31, 2015 For the year ended December 31, 2014

Reportedbasis (GAAP)

Adjustments

Comparablebasis (Non-GAAP)

Reported basis(GAAP)

Adjustments

Comparablebasis (Non-GAAP)

  Net revenues $ 229,003 - $ 229,003 $ 217,863 - $ 217,863 Costs of sales   182,864     151     182,713     176,247     -   176,247   Gross Margin 46,139 151 46,290 41,616 - 41,616   Operating Expenses Selling, general and administrative 28,276 1,120 27,156 28,974 1,945 27,029 Research and development 10,247 13 10,234 8,947 8,947 Acquisition amortization   987     987     -     279     279   -   Total operating expenses 39,510 2,120 37,390 38,200 2,224 35,976

Operating income fromcontinuing operations

6,629 2,271 8,900 3,416 2,224 5,640 Other (expense) income, net (800 ) 776 (24 ) 485 - 485 Interest expense   (308 )   103     (205 )   (136 )   -   (136 )

Income from continuingoperations before provision forincome taxes

5,521 3,150 8,671 3,765 2,224 5,989 Provision for income taxes   (1,500 )   (1,071 )   (2,571 )   (3,694 )   1,510   (2,184 ) Income from continuing operations $ 4,021   $ 2,079   $ 6,100   $ 71   $ 3,734 $ 3,805  

Loss from discontinuedoperations, (net of tax)

$ (4,912 ) $ (4,912 ) $ (3,722 ) $ (3,722 ) Net (Loss) Income $ (891 ) $ 1,188   $ (3,651 ) $ 83  

Income per diluted share fromcontinuing operations

$ 0.26   $ 0.39   $ 0.00   $ 0.24  

Loss per share fromdiscontinuing operations

$ (0.32 ) $ (0.32 ) $ (0.24 ) $ (0.24 ) (Loss) Income per diluted share $ (0.06 ) $ 0.08   $ (0.24 ) $ 0.01    

During the year ended December 31, 2015, the Company recorded severance and other related charges of $797,000, of which $151,000 is included in cost of sales, $13,000 is included in research and development and $633,000 is included in selling, general and administrative. Also included within selling, general and administrative is equity based compensation charges of $487,000. Lastly, related to the acquisition of Brink, the Company recognized amortization of acquired intangible assets of $987,000 and accreted interest of $103,000.

Additionally, the Company recorded a write-off of $776,000 which represents the write-off of unauthorized transfer of Company funds that were made in contravention of the Company’s policies and procedures. The unauthorized transfers occurred during the period between September 25, 2015 and November 6, 2015. As of December 31, 2015, the Company is uncertain of the collectability relating to these funds and as a result, reduced its fair value to zero.

For 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. 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.

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