PAR Technology Corporation (NYSE:PAR) today announced its
results of continuing operations for its first quarter ended March
31, 2018.
Summary of Fiscal 2018 First Quarter Financial
Results
- Revenues were reported at $55.7 million
in the first quarter of 2018, compared to $65.9 million in the same
period in 2017, a 15.5% decrease.
- GAAP net income in the first quarter of
2018 was $0.1 million, or $0.00 per diluted share, a decrease from
the GAAP net income of $1.3 million, or $0.08 earnings per diluted
share reported in the same period in 2017.
- Non-GAAP net income in the first
quarter of 2018 was $0.6 million, or $0.04 per diluted share,
compared to non-GAAP net income of $2.2 million, or $0.14 earnings
per diluted share, in the same period in 2017.
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.
“PAR’s year over year quarterly revenue and profit decreases are
attributed to the lapping of a large hardware project for a
specific Tier 1 customer in the first quarter of 2017, which was
completed in the first half of last year,” commented Dr. Donald H.
Foley, PAR Technology Corporation’s President & CEO. “I note
that on a sequential quarterly basis PAR’s income before provision
for income taxes increased $1.8 million from a loss of $1.7 million
to a gain of $0.1 million. More importantly, PAR’s Restaurant &
Retail segment continues to capture significant market share in the
cloud-based Point of Sales marketplace. To that end, Brink bookings
in the quarter numbered 940 new sites and nearly doubled from the
same period last year. PAR continues to make improvements in both
our technology platforms and software products. I am also pleased
to report PAR’s Government segment revenues grew nearly 13% in the
quarter compared to last year and has returned to a positive
revenue trajectory.”
Conference Call.
There will be a conference call at 4:30 p.m. (Eastern) on May 9,
2018, during which the Company’s management will discuss the
financial results for the first quarter ended March 31, 2018. 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 the Company’s website at www.partech.com. Alternatively, listeners may
access an archived version of the presentation call after 7:30 p.m.
on May 9, 2018 through May 16, 2018 by dialing 855-859-2056 and
using conference ID 4590619.
About PAR Technology Corporation.
PAR Technology Corporation's stock is traded on the New York
Stock Exchange under the symbol “PAR”. PAR’s Restaurant / Retail
segment has been a leading provider of restaurant and retail
technology for more than 35 years. PAR offers management 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 segment 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 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 base and product and
service demands, including changes in product or service demands by
the two customers from whom a significant portion of our revenue is
derived; risks associated with the internal investigation into
conduct at our China and Singapore offices, including possible
sanctions and fines that may be imposed by the Department of
Justice or Securities and Exchange Commission (“SEC”); and the
other factors discussed in our most recent Annual Report on
Form 10-K and other filings with the SEC. 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 CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share
amounts)
(Unaudited)
Assets March 31, 2018 December 31, 2017
Current assets: Cash and cash equivalents $ 5,762 $ 6,600 Accounts
receivable-net 35,911 30,077 Inventories-net 22,394 21,746 Other
current assets 5,311 4,209 Total current assets
69,378 62,632 Property, plant and equipment – net 11,015 10,755
Deferred income taxes 13,887 13,809 Goodwill 11,051 11,051
Intangible assets – net 12,418 12,070 Other assets 4,391
4,307
Total Assets $ 122,140 $ 114,624
Liabilities and Shareholders’ Equity Current liabilities:
Current portion of long-term debt $ 199 $ 195 Borrowings of line of
credit 3,950 950 Accounts payable 17,537 14,332 Accrued salaries
and benefits 5,396 6,275 Accrued expenses 3,784 3,926 Customer
deposits and deferred service revenue 11,275 10,241
Total current liabilities 42,141 35,919 Long-term debt 133 185
Deferred revenue 3,649 2,668 Other long-term liabilities 6,559
6,866 Total liabilities 52,482 45,638
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; 17,686,224 and
17,677,161 shares issued, 15,978,115 and 15,969,052 outstanding at
March 31, 2018 and December 31, 2017, respectively 354 354 Capital
in excess of par value 48,530 48,349 Retained earnings 29,617
29,549 Accumulated other comprehensive loss (3,007 ) (3,430 )
Treasury stock, at cost, 1,708,109 shares (5,836 ) (5,836 ) Total
shareholders’ equity 69,658 68,986
Total
Liabilities and Shareholders’ Equity $ 122,140 $ 114,624
PAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share
amounts)
(Unaudited)
Three Months EndedMarch 31,
2018 2017 Net revenues: Product $ 26,324 $ 37,206 Service
13,196 14,343 Contract 16,141 14,316 55,661
65,865 Costs of sales: Product 19,440 27,572 Service 9,547
10,474 Contract 14,827 12,747 43,814 50,793
Gross margin 11,847 15,072 Operating expenses:
Selling, general and administrative 8,600 9,610 Research and
development 2,868 2,980 Amortization of identifiable intangible
assets 241 241 11,709 12,831 Operating
income from continuing operations 138 2,241 Other income /
(expense), net 49 (248 ) Interest expense, net (41 ) (32 ) Income
from continuing operations before provision for income taxes 146
1,961 Provision for income taxes (78 ) (697 ) Income from
continuing operations 68 1,264 Discontinued operations Income from
discontinued operations (net of tax) — 183 Net income
$ 68 $ 1,447 Basic Earnings per Share: Income from
continuing operations — 0.08 Income from discontinued operations —
0.01 Net income $ — $ 0.09 Diluted
Earnings per Share: Income from continuing operations — 0.08 Income
from discontinued operations — 0.01 Net income $ —
$ 0.09 Weighted average shares outstanding Basic
15,948 15,781 Diluted 16,286 15,978
PAR TECHNOLOGY CORPORATION RECONCILIATION
OF GAAP TO NON-GAAP FINANCIAL RESULTS
(in thousands, except per share and per
share data)
(Unaudited)
For the three months ended March
31,2018
For the three months ended March
31,2017
Reportedbasis(GAAP)
Adjustments
Comparablebasis(Non-GAAP)
Reportedbasis(GAAP)
Adjustments
Comparablebasis(Non-GAAP)
Net revenues $ 55,661 $ — $ 55,661 $ 65,865 $
— $ 65,865 Costs of sales 43,814 —
43,814 50,793 — 50,793
Gross margin 11,847 — 11,847 15,072 — 15,072 Operating Expenses:
Selling, general and administrative 8,600 478 8,122 9,610 1,184
8,426 Research and development 2,868 — 2,868 2,980 — 2,980
Acquisition amortization 241 241 —
241 241 — Total operating
expenses 11,709 719 10,990 12,831 1,425 11,406 Operating income
from continuing operations 138 719 857 2,241 1,425 3,666 Other
income (expense), net 49 — 49 (248 ) — (248 ) Interest expense, net
(41 ) — (41 ) (32 ) — (32 )
Income from continuing operations before provision for income taxes
146 719 865 1,961 1,425 3,386 Provision for income taxes (78 ) (173
) (251 ) (697 ) (527 ) (1,224 ) Income from
continuing operations 68 546 614
1,264 898 2,162 Income from
discontinued operations, (net of tax) — — —
183 — 183 Net income 68 614
1,447 2,345 Income per diluted share
from continuing operations — 0.04 0.08
0.14 Income per diluted share from discontinuing operations
— — 0.01 0.01 Income per diluted
share $ — $ 0.04 $ 0.09 $ 0.15
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
Company's continuing operations 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. PAR believes
the adjustments provide a useful comparison.
During the first quarter of 2018, the Company recorded $297,000
of expenses related to the Company’s previously disclosed internal
investigation into conduct at its China and Singapore offices.
Additionally, $181,000 of equity based compensation charges were
recorded during the first quarter of 2018. The Company
recognized amortization of acquired intangible assets of $241,000
related to the Company’s 2014 acquisition of Brink Software,
Inc. The provision for income tax line above is increased by
24%, or $173,000, reflective of the tax impact from the non-GAAP
adjustments.
During the first quarter of 2017, the Company recorded charges
within selling, general and administrative of $962,000 related to
the Company’s internal investigation into conduct at its China and
Singapore offices. In addition, $177,000 of equity based
compensation charges, $21,000 of investigation costs related to the
Company’s former chief financial officer’s unauthorized transfers
of Company funds, and $24,000 of expenses related to the
implementation of the Company’s ERP system, were recorded during
the first quarter of 2017. Lastly, the Company recognized
amortization of acquired intangible assets of $241,000 related to
the Company’s 2014 acquisition of Brink Software, Inc. The
provision for income tax line above is increased by 37%, or
$527,000, reflective of the tax impact from the non-GAAP
adjustments.
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version on businesswire.com: https://www.businesswire.com/news/home/20180509006218/en/
PAR Technology CorporationChristopher R. Byrnes, (315) 738-0600
ext. 6226cbyrnes@partech.comwww.partech.com
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