PAR Technology Corporation (NYSE:PAR) today announced results
from continuing operations for the second quarter ended June 30,
2016.
Summary of Fiscal 2016 Second Quarter and Year-to-Date
Financial Results from Continuing Operations
- Revenues were reported at $52.7 million
in the second quarter of fiscal 2016, compared to $58.9 million in
the same period in 2015, a 10.6% decrease.
- GAAP net income from continuing
operations in the second quarter of fiscal 2016 was $0.1 million,
or $0.01 earnings per diluted share, compared to a GAAP net income
from continuing operations of $1.2 million, or $0.08 earnings per
diluted share in the same period in 2015.
- Non-GAAP net income from continuing
operations in the second quarter of fiscal 2016 was $0.6 million,
or $0.04 per diluted share, compared to a non-GAAP net income from
continuing operations of $1.7 million, or $0.11 earnings per
diluted share, in the same period in 2015.
- Revenue decreased to $108.0 million in
the first six months of fiscal 2016, compared to $114.1 million in
the same period in 2015.
- GAAP net income from continuing
operations in the first six months of fiscal 2016 was $0.1 million
or $0.01 earnings per diluted share, compared to GAAP net income
from continuing operations of $1.4 million, or $0.09 earnings per
diluted share, in the same period in 2015.
- Non-GAAP net income from continued
operations in the first six months of fiscal 2016 was $1.6 million,
or $0.10 earnings per diluted share, compared to non-GAAP net
income from continuing operations of $2.3 million or $0.15 earnings
per diluted share, in the same period in 2015.
A reconciliation and description of non-GAAP financial measures
to their comparable GAAP financial measures are included in the
tables following this news release.
“During the second quarter, we continued to execute against our
strategic priorities to accelerate, scale and diversify our
business,” said Karen E. Sammon, PAR Technology President and Chief
Executive Officer. “Our Company performed as expected in the
quarter, and the underlying fundamentals of our business remain
strong as the execution of PAR’s software solutions strategy is
gaining traction. Our Brink POS solution and associated hardware
had a strong quarter as its revenues grew 227% in the quarter from
the prior year’s second quarter and more than 61% growth from the
sequential quarter in 2016. Another strong metric achieved in the
quarter, is recurring revenues for our business grew 9% over the
prior year’s second quarter and 4% on a sequential quarter basis.
Recurring revenue now comprises more than 25% of our total
Restaurant/Retail business. Additional strength is being showcased
in our Government segment and we continue to secure add-on and new
contract awards and have successfully rebuilt our contract backlog
to over $125 million.”
Sammon continued, “2016 is about establishing the foundation for
long-term financial growth. We continue to make significant
progress regarding our targeted investment strategies in our
subscription revenue solutions. These strategic investments will
increase our profitability, diversify our revenue portfolio,
enhance our geographic footprint, and enable us to scale. We are
confident about our position in the markets we serve and in the
momentum from our investment strategies that will provide the
necessary tools to ensure long-term financial improvement in our
results and deliver enhanced 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 and 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. PAR offers technology solutions for the full
spectrum of restaurant operations, from large chain and independent
table service restaurants to international quick service chains.
Products from PAR also 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. For more information visit
http://www.partech.com or connect with us on Facebook and
Twitter.
There will be a conference call at 10:00 a.m. (Eastern) on July
27, 2016, during which the Company’s management will discuss the
financial results for the second quarter of 2016. To participate in
the call, please call 866-868-9502, approximately 10 minutes
in advance. No passcode is required to participate in the live call
or to listen to the replay version. Individual & Institutional
Investors will have the opportunity to listen to the conference
call/event over the internet by visiting PAR’s website at
www.partech.com. Alternatively, listeners may access an archived
version of the presentation call after 6:00 p.m. ET on July 27,
2016 through August 5, 2016 by dialing 855-859-2056 and using
conference ID 53282383.
PAR TECHNOLOGY CORPORATION CONSOLIDATED
BALANCE SHEETS
(in thousands, except share amounts)
(Unaudited) June 30, December 31,
Assets 2016
2015 Current assets: Cash and cash equivalents $ 5,374 $ 8,024
Accounts receivable-net 29,462 29,530 Inventories-net 25,392 21,499
Note receivable 4,366 - Income taxes receivable 223 - Deferred
income taxes 6,689 6,741 Other current assets 4,559
3,808 Total current assets 76,065 69,602 Property, plant and
equipment - net 6,055 5,716 Note receivable - 4,259 Deferred income
taxes 11,038 11,038 Goodwill 11,051 11,051 Intangible assets - net
11,102 10,898 Other assets 3,792 3,687
Total Assets $ 119,103 $ 116,251
Liabilities and
Shareholders’ Equity Current liabilities: Current portion of
long-term debt $ 2,156 $ 2,103 Accounts payable 16,532 11,729
Accrued salaries and benefits 5,864 5,727 Accrued expenses 5,217
7,644 Customer deposits and deferred service revenue 11,732 10,819
Income taxes payable - 279 Liabilities of discontinued operations
142 441 Total current liabilities 41,643
38,742 Long-term debt 476 566 Other long-term liabilities
8,759 8,883 Total liabilities 50,878
48,191 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;
17,478,622 and 17,352,838 shares issued; 15,770,513 and 15,644,729
outstanding at June 30, 2016 and December 31, 2015, respectively
349 347 Capital in excess of par value 45,977 45,753 Retained
earnings 30,663 30,574 Accumulated other comprehensive loss (2,928)
(2,778) Treasury stock, at cost, 1,708,109 shares (5,836)
(5,836) Total shareholders’ equity 68,225
68,060
Total Liabilities and Shareholders’
Equity $ 119,103 $ 116,251
PAR
TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
amounts)
(Unaudited)
For the three For the three For the six For the six
months ended months ended months ended months ended June 30, June
30, June 30, June 30, 2016 2015 2016 2015 Net revenues: Product $
21,444 $ 25,267 $ 43,528 $ 46,275 Service 11,804 12,100 23,508
22,474 Contract 19,410 21,561 40,927
45,397 52,658 58,928 107,963 114,146
Costs of sales: Product 16,137 18,292 32,579 33,200 Service 8,219
8,754 16,818 16,592 Contract 17,857 20,189
37,512 42,663 42,213 47,235 86,909
92,455 Gross margin 10,445 11,693
21,054 21,691 Operating expenses: Selling, general and
administrative 7,058 6,845 14,600 13,505 Research and development
2,793 2,661 5,555 5,095 Amoritzation of identifiable intangible
assets 242 249 483 498
10,093 9,755 20,638 19,098 Operating income
from continuing operations 352 1,938 416 2,593 Other (expense)
income, net (210) 20 (280) (186) Interest income (expense), net
3 (85) 32 (171) Income from continuing
operations before provision for income taxes 145 1,873 168 2,236
Provision for income taxes (45) (629) (53)
(800) Income from continuing operations 100 1,244 115 1,436
Discontinued operations Loss on discontinued operations (net of
tax) (26) (1,143) (26) (1,720) Net
income (loss) $ 74 $ 101 $ 89 $ (284) Basic Earnings per Share:
Income from continuing operations 0.01 0.08 0.01 0.09 Loss from
discontinued operations (0.00) (0.07) (0.00)
(0.11) Net income (loss) $ 0.00 $ 0.01 $ 0.01 $ (0.02)
Diluted Earnings per Share: Income from continuing operations 0.01
0.08 0.01 0.09 Loss from discontinued operations (0.00)
(0.07) (0.00) (0.11) Net income (loss) $ 0.00
$ 0.01 $ 0.01 $ (0.02) Weighted average shares outstanding Basic
15,615 15,584 15,651 15,541 Diluted
15,670 15,671 15,717 15,658
PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(in thousands, except per share data)
(Unaudited)
For the three months
ended June 30, 2016 For the three months ended June 30, 2015
Comparable
Comparable
Reported basis basis (Non- Reported basis
basis (Non-
(GAAP) Adjustments GAAP) (GAAP) Adjustments
GAAP)
Net revenues $ 52,658 - 52,658 $ 58,928 - 58,928 Costs of
sales 42,213 - 42,213
47,235 85 47,150 Gross
Margin 10,445 - 10,445 11,693 85 11,778 Operating Expenses
Selling, general and administrative 7,058 572 6,486 6,845 346 6,499
Research and development 2,793 - 2,793 2,661 13 2,648 Amortization
of identifiable intangible assets 242 242
- 249 249 -
Total operating expenses 10,093 814 9,279 9,755 608 9,147
Operating income from continuing operations 352 814 1,166 1,938 693
2,631 Other income, net (210 ) - (210 ) 20 - 20 Interest income
(expense), net 3 26 29
(85 ) 25 (60 ) Income from continuing
operations before provision for income taxes 145 840 985 1,873 718
2,591 Provision for income taxes (45 ) (311 )
(356 ) (629 ) (266 ) (895 ) Income from
continuing operations $ 100 $ 529 $ 629 $
1,244 $ 452 $ 1,696 Loss from discontinued
operations, (net of tax) $ (26 ) $ (26 ) $ (1,143 ) $ (1,143 ) Net
income $ 74 $ 603 $ 101 $ 553 Income
per diluted share from continuing operations $ 0.01 $ 0.04
$ 0.08 $ 0.11 Loss per diluted share from
discontinuing operations $ (0.00 ) $ (0.00 ) $ (0.07 ) $ (0.07 )
Income per diluted share $ 0.00 $ 0.04 $ 0.01
$ 0.04
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 supplemental 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.
PAR's results of operations are impacted by certain items which
include severance charges from restructuring business operations,
equity based compensation, acquisition related expenditures, and
other one-time charges that may not be indicative of the Company’s
business trends. Management believes that adjusting its operating
expenses, operating income, net earnings and diluted earnings per
share to remove these certain items provides an useful perspective
with respect to our results and provides meaningful supplemental
information to both management and investors that removes these
items which are difficult to predict and are often unanticipated,
and which, as a result are difficult to include in analyst's
financial models and our investors' expectations with any degree of
specificity. PAR believes the adjusted totals facilitate comparison
on a year-over-year basis.
PAR's results of operations are further impacted by costs from
its multi-year ERP system implementation. Management believes that
further adjusting its operating expenses, operating income, net
earnings and diluted earnings per share to remove the impact of the
ERP expenses provides a useful perspective with respect to
underlying business trends and results and provides meaningful
supplemental information to both management and investors that is
indicative of the performance of the Company's underlying
operations and facilitates comparison on a year-over-year
basis.
The Company uses these non-GAAP measures when evaluating its
financial results as well as for internal planning and forecasting
purposes. These financial measures should not be used as a
substitute in assessing the company's results of operations for the
periods presented. An analysis of any non-GAAP financial measure
should be used in conjunction with results presented in accordance
with GAAP. As a result, in the tables that follow, each period
presented is adjusted to remove the certain items noted above. Each
period has been further adjusted to remove expenses related to the
ERP system implementation.
During the second quarter of 2016, the Company recorded charges
within selling, general and administrative of $304,000 of
investigation costs related to certain unauthorized transfers of
Company funds that were made in contravention of the Company’s
policies and procedures, $127,000 related to the initial phase of
the planned implementation of a new enterprise resource system in
connection with the ERP system implementation and equity based
compensation charges of $141,000. Lastly, related to the
acquisition of Brink, the Company recognized amortization of
acquired intangible assets of $242,000 and accreted interest of
$26,000. During the second quarter of 2015, the Company recorded
severance and other related charges of $416,000, of which $85,000
is included in cost of sales, $13,000 is included in research and
development and $318,000 is included in selling, general and
administrative. Also included within selling, general and
administrative is equity based compensation charges of $28,000.
Lastly, related to the acquisition of Brink, the Company recognized
amortization of acquired intangible assets of $249,000 and accreted
interest of $25,000. 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/or 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 six
months ended June 30, 2016 For the six months ended June 30, 2015
Comparable
Comparable
Reported basis basis (Non- Reported basis
basis (Non-
(GAAP) Adjustments GAAP) (GAAP) Adjustments
GAAP)
Net revenues $ 107,963 - $ 107,963 $ 114,146 - $ 114,146
Costs of sales 86,909 - 86,909
92,455 151 92,304
Gross Margin 21,054 - 21,054 21,691 151 21,842 Operating
Expenses Selling, general and administrative 14,600 1,749 12,851
13,505 706 12,799 Research and development 5,555 - 5,555 5,095 13
5,082 Acquisition amortization 483 483
- 498 498 -
Total operating expenses 20,638 2,232 18,406 19,098 1,217 17,881
Operating income from continuing operations 416 2,232 2,648 2,593
1,368 3,961 Other (expense) income, net (280 ) - (280 ) (186 ) -
(186 ) Interest expense 32 52 84
(171 ) 51 (120 ) Income from
continuing operations before provision for income taxes 168 2,284
2,452 2,236 1,419 3,655 Provision for income taxes (53 )
(845 ) (898 ) (800 ) (525 )
(1,325 ) Income from continuing operations $ 115 $ 1,439
$ 1,554 $ 1,436 $ 894 $ 2,330
Loss from discontinued operations, (net of tax) $ (26 ) $ (26 ) $
(1,720 ) $ (1,720 ) Net income (loss) $ 89 $ 1,528 $
(284 ) $ 610 Income per diluted share from continuing
operations $ 0.01 $ 0.10 $ 0.09 $ 0.15
Loss per diluted share from discontinuing operations $ (0.00 ) $
(0.00 ) $ (0.11 ) $ (0.11 ) Income (loss) per diluted share $ 0.01
$ 0.10 $ (0.02 ) $ 0.04
During the six months ended June 30, 2016, the Company recorded
charges within selling, general and administrative of $1,070,000 of
investigation costs related to certain unauthorized transfers of
Company funds that were made in contravention of the Company’s
policies and procedures, $472,000 related to the initial phase of
the planned implementation of a new enterprise resource system in
connection with the ERP system implementation and equity based
compensation charges of $207,000. Lastly, related to the
acquisition of Brink, the Company recognized amortization of
acquired intangible assets of $483,000 and accreted interest of
$52,000. During the six months ended June 30, 2015, the Company
recorded severance and other related charges of $597,000, of which
$151,000 is included in cost of sales, $13,000 is included in
research and development and $433,000 is included in selling,
general and administrative. Also included within selling, general
and administrative is equity based compensation charges of
$273,000. Lastly, related to the acquisition of Brink, the Company
recognized amortization of acquired intangible assets of $498,000
and accreted interest of $51,000. 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/or are
quantitatively and qualitatively different from the Company’s core
operations during any particular period.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160727005497/en/
PAR Technology CorporationChristopher R. Byrnes, 315-738-0600
ext. 6226cbyrnes@partech.comwww.partech.com
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