PAR Technology Corporation (NYSE:PAR) today announced its
results of continuing operations for its fourth quarter and full
year ended December 31, 2016.
Summary of Fiscal 2016 Fourth Quarter and Year End Financial
Results
Fourth Quarter 2016
- Revenues were reported at $60.2 million
in the fourth quarter of fiscal 2016, compared to $56.8 million in
the same period in 2015, a 6% increase.
- GAAP net income in the fourth quarter
of fiscal 2016 was $1.9 million, or $0.12 per diluted share, an
increase from the GAAP net income of $1.3 million, or $0.08
earnings per diluted share reported in the same period in
2015.
- Non-GAAP net income in the fourth
quarter of fiscal 2016 was $2.1 million, or $0.13 per diluted
share, compared to non-GAAP net income of $2.0 million, or $0.13
earnings per diluted share, in the same period in 2015.
Full Year 2016
- Revenues were reported at $229.7
million in fiscal 2016, a slight increase from the $229.0 million
in revenues reported for fiscal year 2015.
- GAAP net income for fiscal 2016 was
$2.5 million or $0.16 earnings per diluted share, compared to GAAP
net income of $4.0 million, or $0.26 earnings per diluted share, in
the same period in 2015.
- Non-GAAP net income in fiscal 2016 was
$5.3 million, or $0.33 per diluted share, compared to non-GAAP net
income of $6.1 million or $0.39 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 at the end of this press release.
“The fourth quarter was a strong close for 2016, with top line
growth of 6% year-over-year. Although offset by reduced Government
contract revenues, our fourth quarter performance was driven by
higher demand for PAR hardware solutions from Tier 1 customers in
our Restaurant and Retail segment and expanded deployments of our
Brink cloud software solution. I am pleased to report we ended 2016
by achieving our target of deployed Brink sites,” commented Karen
E. Sammon, PAR Technology Corporation President and Chief Executive
Officer. “Our financial results reflect the progress we have made
executing to our strategy and focusing on operational efficiency
within our businesses. Our ability to grow revenues highlights the
strength of our brand and the capabilities of our product and
service offerings.”
Sammon continued, “With our focus on delivering innovation
and customer success, and with operational adjustments, we continue
to make necessary changes and drive execution that will position us
to capitalize on the long-term growth opportunities for our
Company.”
Internal Investigation; Update.
As previously disclosed, the Company is conducting an internal
investigation into import/export and sales documentation activities
at our China and Singapore offices discovered by management during
the third quarter of 2016. The investigation, which is not
complete, is being conducted under the oversight of our Audit
Committee, with the assistance of outside counsel, and is focused
on compliance with certain of our policies, including our Code of
Business Conduct and Ethics, and the U.S. Foreign Corrupt Practices
Act, or FCPA, and other applicable laws. The Company has
voluntarily notified the U.S. Securities and Exchange Commission
(“SEC”) and the U.S. Department of Justice (“DOJ”) of these
matters, and intends to fully cooperate with both agencies. During
the three months ended December 31, 2016, the Company recorded
$1,323,000 of expenses relating to the investigation, including
expenses of outside legal counsel and forensic accountants. While
the investigation is substantially complete, the Company expects to
incur additional expenses relating to its completion, as well as in
connection with remedial measures being taken and to be taken by
the Company to correct the material weaknesses identified in the
Company’s internal control over financial reporting. We are
presently unable to predict what, if any, actions the SEC, the DOJ,
or other governmental agencies (including foreign governmental
agencies) will take. The SEC, DOJ, and other governmental
authorities have a broad range of civil and criminal sanctions
including, injunctive relief, disgorgement, fines, penalties,
modifications to our business practices, including the termination
or modification of existing business relationships, the imposition
of compliance programs and the retention of a monitor to oversee
our future compliance. We cannot reasonably estimate the potential
liability, if any, to the Company arising out of the China and
Singapore matters. However, the imposition of sanctions, fines or
remedial measures could have a material adverse effect on the
Company’s business, prospects, reputation, financial condition,
liquidity, results of operations or cash flows
Conference Call.
There will be a conference call at 10:00 a.m. (Eastern) on March
13, 2017, during which the Company’s management will discuss the
financial results for the fourth 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 1:00 p.m. on March 13, 2017
through March 20, 2017 by dialing 855-859-2056 and using
conference ID 82600661.
About PAR Technology Corporation.
PAR Technology Corporation's stock is traded on the New York
Stock Exchange under the symbol “PAR”. PAR’s Restaurant and Retail
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.
Forward-Looking Statements.
This press release includes “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements appear throughout this press release, including express
or implied forward-looking statements relating to our expectations
regarding anticipated financial performance, customer and product
opportunities, and assumptions as to future events. Forward-looking
statements are subject to a variety of risks and uncertainties,
many of which are beyond the Company’s control, that could cause
actual results to differ materially from those contemplated in
these statements. Factors that could cause actual results to differ
materially, include delays in new product development and/or
product introduction, changes in customer product and service
demands, concentration of revenues from a small group of customers,
product and service competition, and the other factors discussed in
our most recent Annual Report on Form 10-K and other filings with
the Securities and Exchange Commission. The Company undertakes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise, except as may be required under applicable securities
law.
PAR TECHNOLOGY
CORPORATIONCONSOLIDATED BALANCE SHEETS(in thousands,
except share amounts)
(Unaudited) December 31, December 31,
Assets 2016
2015 Current assets: Cash and cash equivalents $ 9,055 $ 8,024
Accounts receivable-net 30,705 29,530 Inventories-net 26,237 21,499
Note receivable 4,447 - Income taxes receivable 261 - Deferred
income taxes 7,421 6,741 Other current assets 4,027 3,808 Assets of
Discontinued operations 462 -
Total current assets
82,615 69,602 Property, plant and equipment - net 7,035 5,716 Note
receivable - 4,259 Deferred income taxes 9,650 11,038 Goodwill
11,051 11,051 Intangible assets - net 10,966 10,898 Other assets
3,785 3,687
Total Assets
$ 125,102 $ 116,251
Liabilities and
Shareholders’ Equity Current liabilities: Current portion of
long-term debt $ 187 $ 2,103 Accounts payable 16,687 11,729 Accrued
salaries and benefits 5,470 5,727 Accrued expenses 4,682 7,644
Customer deposits and deferred service revenue 19,814 10,819 Income
taxes payable - 279 Liabilities of discontinued operations -
441 Total current liabilities 46,840
38,742 Long-term debt 379 566 Other long-term liabilities
7,712 8,883 Total liabilities
54,931 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; 17,479,454 and 17,352,838
shares issued; 15,771,345 and 15,644,729 outstanding at December
31, 2016 and December 31, 2015, respectively 350 347 Capital in
excess of par value 46,203 45,753 Retained earnings 32,948 30,574
Accumulated other comprehensive loss (3,494 ) (2,778 ) Treasury
stock, at cost, 1,708,109 shares (5,836 )
(5,836 ) Total shareholders’ equity 70,171
68,060
Total Liabilities and Shareholders’
Equity $ 125,102 $ 116,251
PAR TECHNOLOGY
CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(in
thousands, except per share amounts)(Unaudited)
For the three months ended December 31, For the year ended
December 31, 2016 2015 2016 2015 Net revenues:
Product $ 30,986 $ 24,316 $ 100,271 $ 94,397 Service 12,942 12,067
49,070 46,754 Contract 16,270 20,414
80,312 87,852
60,198 56,797 229,653
229,003 Costs of sales: Product 23,108 18,053
73,975 68,223 Service 9,528 8,210 35,647 33,875 Contract
14,828 18,790 73,830
81,848 47,464
45,053 183,452 183,946
Gross margin 12,734 11,744
46,201 45,057 Operating
expenses: Selling, general and administrative 8,168 7,061 31,440
27,374 Research and development 3,347 2,325 11,581 10,067
Acquisition amortization 242 241
966 987 11,757
9,627 43,987
38,428 Operating income from continuing operations 977 2,117
2,214 6,629 Other income (expense), net 1,634 (742 ) 1,316 (800 )
Interest Income (expense) 101 (56 )
121 (308 ) Income from continuing
operations before provision for income taxes 2,712 1,319 3,651
5,521 Provision for income taxes (841 ) (30 )
(1,147 ) (1,500 ) Income from continuing
operations 1,871 1,289 2,504 4,021 Discontinued operations Loss on
discontinued operations (net of tax) (103 ) (407 )
(129 ) (4,912 ) Net Income (Loss) $ 1,768
$ 882 $ 2,375 $ (891 ) Basic
Earnings per Share: Income from continuing operations 0.12 0.08
0.16 0.26 Loss from discontinued operations (0.01 )
(0.03 ) (0.01 ) (0.32 ) Net Income
(Loss) $ 0.11 $ 0.06 $ 0.15 $
(0.06 ) Diluted Earnings per Share: Income from continuing
operations 0.12 0.08 0.16 0.26 Loss from discontinued operations
(0.01 ) (0.03 ) (0.01 )
(0.31 ) Net Income (Loss) $ 0.11 $ 0.06 $ 0.15
$ (0.06 ) Weighted average shares outstanding Basic
15,777 15,616 15,675
15,562 Diluted 15,818
15,732 15,738
15,666
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,
2016 For the three months ended December 31, 2015
Reported basis(GAAP)
Adjustments
Comparablebasis (Non-GAAP)
Reported basis(GAAP)
Adjustments
Comparablebasis (Non-GAAP)
Net revenues $ 60,198 - 60,198 $ 56,797 - 56,797 Costs of
sales 47,464 517 46,947
45,053 - 45,053 Gross
Margin 12,734 517 13,251 11,744 - 11,744 Operating Expenses
Selling, general and administrative 8,168 1,508 6,660 7,061 - 7,061
Research and development 3,347 - 3,347 2,325 - 2,325 Acquisition
amortization 242 242 -
241 241 - Total operating
expenses 11,757 1,750 10,007 9,627 241 9,386 Operating income from
continuing operations 977 2,267 3,244 2,117 241 2,358 Other income
(expense), net 1,634 (1,871 ) (237 ) (742 ) 776 34 Interest income
(expense) 101 - 101
(56 ) 26 (30 ) Income from continuing
operations before provision for income taxes 2,712 396 3,108 1,319
1,043 2,362 Provision for income taxes (841 ) (147 )
(988 ) (30 ) (291 ) (321 ) Income from
continuing operations $ 1,871 $ 249 $ 2,120 $
1,289 $ 752 $ 2,041 Loss from discontinued
operations, (net of tax) $ (103 ) $ (103 ) $ (407 ) $ (407 ) Net
income $ 1,768 $ 2,017 $ 882 $ 1,634
Income per diluted share from continuing operations $ 0.12 $
0.13 $ 0.08 $ 0.13 Loss per diluted share from
discontinuing operations $ (0.01 ) $ (0.01 ) $ (0.03 ) $ (0.03 )
Income per diluted share $ 0.11 $ 0.13 $ 0.06
$ 0.10
The Company reports its financial results in accordance with
GAAP. However, non-GAAP adjusted financial measures, as defined in
the reconciliation table above, are provided because management
uses these non-GAAP 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 operating results. These non-GAAP measures are not based
on any comprehensive set of accounting rules or principles and
should not be considered a substitute for, or superior to,
financial measures calculated in accordance with GAAP. In addition,
these non-GAAP measures should be read in conjunction with the
Company’s financial statements prepared in accordance with
GAAP.
The Company's results of operations are impacted by certain
non-recurring charges, including severance charges from
restructuring business operations, equity based compensation,
acquisition related expenditures, and other non-recurring charges
that may not be indicative of the Company’s financial performance.
Management believes that adjusting its operating expenses,
operating income, net earnings and diluted earnings per share to
remove non-recurring charges provides a useful perspective with
respect to our operating results and provides supplemental
information to both management and investors by removing items that
are difficult to predict and are often unanticipated. PAR believes
the adjustments provide a useful comparison on a year-over-year
basis.
Included within selling, general and administrative expenses, as
referenced above under “Internal Investigation; Update”, during the
fourth quarter of 2016, the Company recorded $1,323,000 of expenses
related to the Company’s internal investigation. In addition,
$123,000 expenses related to the implementation of the new ERP
system, and $72,000 of equity based compensation charges were
recorded during the fourth quarter of 2016. Included within costs
of sales was $517,000 of accelerated amortization related to the
Company’s discontinued development of a software module. Lastly,
the Company recognized amortization of acquired intangible assets
of $242,000 related to the Company’s acquisition of Brink.
Offsetting these charges, the Company recorded an insurance
recovery of $771,000, relating to the Company’s former chief
financial officer’s unauthorized transfers of Company funds, and a
$1,100,000 decrease to a contingent consideration liability related
to the Brink acquisition.
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 $776,000 write-off related to
the unauthorized transfer of Company funds. The unauthorized
transfers occurred during the period between September 25, 2015 and
November 6, 2015. As of December 31, 2015, the Company was
uncertain of the collectability relating to these funds and as a
result, reduced its fair value to zero.
PAR TECHNOLOGY CORPORATION RECONCILIATION OF GAAP
TO NON-GAAP FINANCIAL RESULTS (in thousands, except per share
data) (Unaudited)
For the year ended December 31, 2016 For the year ended December
31, 2015
Reported basis(GAAP)
Adjustments
Comparablebasis (Non-GAAP)
Reported basis(GAAP)
Adjustments
Comparablebasis (Non-GAAP)
Net revenues $ 229,653 - $ 229,653 $ 229,003 - $ 229,003
Costs of sales 183,452 517
182,935 182,864 151
182,713 Gross Margin 46,201 517 46,718 46,139 151 46,290
Operating Expenses Selling, general and administrative
31,440 4,678 26,762 28,276 1,120 27,156 Research and development
11,581 - 11,581 10,247 13 10,234 Acquisition amortization
966 966 - 987
987 - Total operating expenses 43,987
5,644 38,343 39,510 2,120 37,390 Operating income from continuing
operations 2,214 6,161 8,375 6,629 2,271 8,900 Other income
(expense), net 1,316 (1,871 ) (555 ) (800 ) 776 (24 ) Interest
income (expense), net 121 78 199
(308 ) 103 (205 ) Income from
continuing operations before provision for income taxes 3,651 4,368
8,019 5,521 3,150 8,671 Provision for income taxes (1,147 )
(1,616 ) (2,763 ) (1,500 ) (1,071 )
(2,571 ) Income from continuing operations $ 2,504 $
2,752 $ 5,256 $ 4,021 $ 2,079 $ 6,100
Loss from discontinued operations, (net of tax) $ (129 ) $
(129 ) $ (4,912 ) $ (4,912 ) Net income (Loss) $ 2,375 $
5,127 $ (891 ) $ 1,188 Income per diluted share from
continuing operations $ 0.16 $ 0.33 $ 0.26 $
0.39 Loss per diluted share from discontinuing operations $
(0.01 ) $ (0.01 ) $ (0.32 ) $ (0.32 ) Income (loss) per diluted
share $ 0.15 $ 0.33 $ (0.06 ) $ 0.08
During the year ended December 31, 2016, the Company recorded
professional services charges of $2,789,000, of which $1,466,000
were for investigation costs related to the Company’s former chief
financial officer’s unauthorized transfers of Company funds, and
$1,323,000 were related to the Company’s internal investigation of
conduct at its China and Singapore offices. Additionally, the
Company recorded charges of $789,000, as a write-off, related to
the Company’s previous human capital management system, $631,000
related to the implementation of the new ERP system and $469,000
related to equity based compensation charges, included in selling,
general and administrative. Additionally, during fiscal 2016, the
Company recorded $517,000 of accelerated amortization into to cost
of service, which is related to the Company’s discontinued
development of a software module. Lastly, the Company recognized
amortization of acquired intangible assets of $966,000 related to
the acquisition of Brink, and accreted interest of $78,000.
Offsetting these charges, the Company recorded an insurance
recovery of $771,000 relating to the unauthorized transfers of
Company funds by its former chief financial officer, and a
$1,100,000 decrease to a contingent consideration liability related
to the 2014 acquisition of Brink.
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, the Company recognized amortization of acquired intangible
assets of $987,000 related to the acquisition of Brink, and
accreted interest of $103,000. Additionally, the Company recorded a
$776,000 write-off related to its former chief financial officer’s
unauthorized transfer of Company funds. The unauthorized transfers
occurred during the period between September 25, 2015 and November
6, 2015. As of December 31, 2015, the Company was uncertain of the
collectability relating to these funds and as a result, reduced its
fair value to zero.
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version on businesswire.com: http://www.businesswire.com/news/home/20170313005387/en/
PAR Technology CorporationChristopher R. Byrnes 315-738-0600
ext. 6226cbyrnes@partech.comwww.partech.com
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