PAR Technology Corporation (NYSE: PAR) today announced results
from operations for the second quarter ended June 30, 2017.
Summary of Fiscal 2017 Second Quarter and Year-to-Date
Financial Results
- Revenues were reported at $62.3 million
in the second quarter of fiscal 2017, compared to $52.7 million in
the same period in 2016, an 18.2% increase.
- GAAP net income in the second quarter
of fiscal 2017 was $2.0 million, or $0.12 per diluted share, an
increase from GAAP net income of $0.1 million or $0.01 earnings per
diluted share in the same period in 2016.
- Non-GAAP net income in the second
quarter of fiscal 2017 was $2.6 million, or $0.16 per diluted
share, compared to a non-GAAP net income of $0.6 million, or $0.04
earnings per diluted share, in the same period in 2016.
- Revenue increased to $128.1 million in
the first six months of fiscal 2017, compared to $108.0 million in
the same period in 2016, an 18.7% increase.
- GAAP net income in the first six months
of fiscal 2017 was $3.2 million or $0.20 earnings per diluted
share, compared to GAAP net income of $0.1 million, or $0.01
earnings per diluted share, in the same period in 2016.
- Non-GAAP net income in the first six
months of fiscal 2017 was $4.7 million, or $0.29 per diluted share,
compared to non-GAAP net income of $1.6 million or $0.10 earnings
per diluted share, in the same period in 2016.
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 with our results in the quarter as they
demonstrate our focus on growing revenues, investing in our future,
and executing upon our growth strategy of being a software-driven
solutions company,” stated Dr. Donald H. Foley, PAR Technology
President and Chief Executive Officer. “In the quarter we
recognized higher revenue from our Tier 1 customers due to
accelerated hardware deployments and one-time system integration
projects. These accelerated hardware deployments and projects wound
down this quarter and while we anticipate our business will achieve
our annual goals, we do not expect this pace in the second half of
the year.”
Foley continued, “Both our restaurant/retail and government
segments contributed to the bottom line increase in the quarter.
Our recurring software revenue more than doubled from last year’s
quarter in our Restaurant/Retail segment. We continue to collect
additional validation that our restaurant/retail solutions meet the
needs of our customers. We added a number of impressive new
software customers to our install base during the second quarter,
and are conducting pilots at a number of additional accounts. In
our Government segment, we continue to see lower contract revenues
at higher margins as we consciously execute our plan to transition
our business to higher value added Intelligence, Surveillance &
Reconnaissance (ISR) contracts.
“In closing, we appreciate and value the support we have
received from our customers, vendors and shareholders. It is
gratifying to see positive results come out of the hard work of our
dedicated employees. Even more exciting are the opportunities we
believe the future will offer us and I look forward to reporting
back to you as the year progresses.”
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
August 15, 2017, during which the Company’s management will discuss
the financial results for the second quarter of 2017. To
participate in the call, please call 844-419-5412,
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 through
August 22, 2017 by dialing 855-859-2056 and using conference ID
65566533.
PAR TECHNOLOGY CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(Unaudited)
Assets
June 30,2017
December 31,2016
Current assets: Cash and cash equivalents $ 3,282 $ 9,055 Accounts
receivable-net 33,807 30,705 Inventories-net 28,845 26,237 Note
receivable - 3,510 Income taxes receivable - 261 Other current
assets 4,246 4,027 Assets of discontinued operations -
462 Total current assets 70,180 74,257 Property, plant and
equipment – net 9,854 7,035 Deferred income taxes 16,403 17,417
Goodwill 11,051 11,051 Intangible assets – net 11,886 10,966 Other
assets 3,833 3,785
Total Assets $ 123,207 $
124,511
Liabilities and Shareholders’ Equity Current
liabilities: Current portion of long-term debt $ 191 $ 187
Borrowings of line of credit 1,000 - Accounts payable 14,163 16,687
Accrued salaries and benefits 6,411 5,470 Accrued expenses 4,752
4,682 Customer deposits and deferred service revenue 14,513
19,814 Total current liabilities 41,030 46,840 Long-term
debt 283 379 Other long-term liabilities 7,764 7,712
Total liabilities 49,077 54,931 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; 17,615,390 and 17,479,454 shares
issued,15,907,281 and 15,771,345 outstanding at June 30, 2017 and
December 31, 2016, respectively
352 350 Capital in excess of par value 47,354 46,203 Retained
earnings 35,598 32,357 Accumulated other comprehensive loss (3,338
) (3,494 ) Treasury stock, at cost, 1,708,109 shares (5,836
) (5,836 ) Total shareholders’ equity 74,130
69,580
Total Liabilities and Shareholders’ Equity $ 123,207
$ 124,511
PAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
amounts)
(Unaudited)
For the threemonths ended
June 30,
For the threemonths ended
June 30,
For the sixmonths ended
June 30,
For the sixmonths ended
June 30,
2017 2016 2017 2016 Net revenues: Product $ 32,682 $ 21,444 $
69,888 $ 43,528 Service 15,034 11,804 29,377 23,508 Contract
14,545 19,410 28,861
40,927 62,261
52,658 128,126 107,963
Costs of sales: Product 24,389 16,137 51,961 32,579 Service 9,766
8,219 19,651 16,818 Contract 12,909
17,857 25,656 37,512
47,064 42,213 97,268
86,909 Gross margin 15,197
10,445 30,858
21,054 Operating expenses: Selling, general and
administrative 8,917 7,058 18,527 14,600 Research and development
3,284 2,793 6,853 5,555 Amortization of identifiable intangible
assets 242 242 483
483 12,443
10,093 25,863 20,638 Operating
income from continuing operations 2,754 352 4,995 416 Other income
(expense), net 54 (210 ) (194 ) (280 ) Interest (expense) income,
net (13 ) 3 (45 )
32 Income from continuing operations before provision for
income taxes 2,795 145 4,756 168 Provision for income taxes
(818 ) (45 ) (1,515 )
(53 ) Income from continuing operations 1,977 100 3,241 115
Discontinued operations (Loss on) income from discontinued
operations (net of tax) - (26 )
183 (26 ) Net income $ 1,977
$ 74 $ 3,424 $ 89 Basic
Earnings per Share: Income from continuing operations 0.12 0.01
0.20 0.01 Loss from discontinued operations (0.00 )
(0.00 ) 0.01 (0.00
) Net income $ 0.12 $ 0.01 $ 0.21
$ 0.01 Diluted Earnings per Share: Income from
continuing operations 0.12 0.01 0.20 0.01 Loss from discontinued
operations (0.00 ) (0.00 ) 0.01
(0.00 ) Net income $ 0.12
$ 0.01 $ 0.21 $ 0.01 Weighted average
shares outstanding Basic 15,919
15,615 15,893 15,651 Diluted
16,178 15,670 16,146
15,717
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, 2017 For the three
months ended June 30, 2016
Reported basis(GAAP)
Adjustments Comparable
basis (Non-
GAAP)
Reported basis(GAAP)
Adjustments Comparable
basis (Non-
GAAP)
Net revenues $ 62,261 - 62,261 $ 52,658 - 52,658 Costs of
sales 47,064 - 47,064 42,213 -
42,213 Gross margin 15,197 - 15,197 10,445 - 10,445
Operating expenses Selling, general and administrative 8,917 671
8,246 7,058 572 6,486 Research and development 3,284 - 3,284 2,793
- 2,793 Amortization of identifiable intangible assets 242
242 - 242 242 - Total operating
expenses 12,443 913 11,530 10,093 814 9,279 Operating income from
continuing operations 2,754 913 3,667 352 814 1,166 Other
income(expense), net 54 - 54 (210 ) - (210 ) Interest (expense)
income, net (13 ) (13 ) 3
26 29 Income from continuing operations before provision for
income taxes 2,795 913 3,708 145 840 985 Provision for income taxes
(818 ) (338 ) (1,156 ) (45 )
(311 ) (356 ) Income from continuing operations $ 1,977 $
575 $ 2,552 $ 100 $ 529 $ 629 Loss from discontinued operations,
(net of tax) $ - $ - $ (26 ) $ (26 ) Net income $ 1,977 $ 2,552 $
74 $ 603 Income per diluted share from continuing operations $ 0.12
$ 0.16 $ 0.01 $ 0.04 Loss per diluted share from discontinuing
operations $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) Income per
diluted share $ 0.12 $ 0.16 $ 0.01 $ 0.04
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 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. The
Company believes the adjustments provide a useful comparison
on a year-over-year basis.
During the second quarter of 2017, the Company recorded charges
within selling, general and administrative of $605,000 related to
the Company’s previously disclosed investigation of import export
and sales documentation activities at the Company’s China and
Singapore offices and the SEC subpoena. In addition, $5,000 of
expenses related to the implementation of the new ERP system, and
$61,000 of equity based compensation charges were recorded during
the second quarter of 2017. Lastly, the Company recognized
amortization of acquired intangible assets of $242,000 related to
the Company’s acquisition of Brink.
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 implementation of the new ERP system 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.
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, 2017 For the six months
ended June 30, 2016
Reported basis(GAAP)
Adjustments Comparable
basis (Non-
GAAP)
Reported basis(GAAP)
Adjustments Comparable
basis (Non-
GAAP)
Net revenues $ 128,126 - $ 128,126 $ 107,963 - $ 107,963
Costs of sales 97,268 - 97,268 86,909
- 86,909 Gross margin 30,858 - 30,858 21,054 - 21,054
Operating expenses Selling, general and administrative
18,527 1,855 16,672 14,600 1,749 12,851 Research and development
6,853 - 6,853 5,555 - 5,555 Acquisition amortization 483
483 - 483 483 - Total operating
expenses 25,863 2,338 23,525 20,638 2,232 18,406 Operating income
from continuing operations 4,995 2,338 7,333 416 2,232 2,648 Other
expense, net (194 ) - (194 ) (280 ) - (280 ) Interest (expense)
income, net (45 ) (45 ) 32
52 84 Income from continuing operations before
provision for income taxes 4,756 2,338 7,094 168 2,284 2,452
Provision for income taxes (1,515 ) (865 )
(2,380 ) (53 ) (845 ) (898 ) Income from
continuing operations $ 3,241 $ 1,473 $ 4,714 $ 115 $ 1,439 $ 1,554
Income (loss from) discontinued operations, (net of tax) $ 183 $
183 $ (26 ) $ (26 ) Net income $ 3,424 $ 4,897 $ 89 $ 1,528 Income
per diluted share from continuing operations $ 0.20 $ 0.29 $ 0.01 $
0.10 Loss per diluted share from discontinuing operations $ 0.01 $
0.01 $ (0.00 ) $ (0.00 ) Income per diluted share $ 0.21 $ 0.30 $
0.01 $ 0.10
During the six months ended June 30, 2017, the Company
recorded charges within selling, general and administrative
of $1,567,000 related to the Company’s previously disclosed
investigation of import export and sales documentation activities
at the Company’s China and Singapore offices and the SEC
subpoena, and $21,000 of legacy charges related to the Company’s
former chief financial officer’s unauthorized transfers of Company
fund. In addition, $29,000 of expenses related to the
implementation of the new ERP system, and $238,000 of equity based
compensation charges were recorded during the six months ended June
30, 2017. Lastly, the Company recognized amortization of acquired
intangible assets of $483,000 related to the Company’s acquisition
of Brink.
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170815005379/en/
PAR Technology CorporationChristopher R. Byrnes, 315-738-0600
ext. 6226cbyrnes@partech.comwww.partech.com
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