PAR Technology Corporation (NYSE:PAR) today announced its
results for its second quarter ended June 30, 2018.
Summary of Fiscal 2018 Second Quarter and Year-to-Date
Financial Results
- Revenues were reported at $52.6 million
for the second quarter of 2018, compared to $62.3 million for the
same period in 2017, a 15.6% decrease.
- GAAP net loss for the second quarter of
2018 was $1.3 million, or $0.08 loss per diluted share, a decrease
from the GAAP net income of $2.0 million, or $0.12 earnings per
diluted share reported for the same period in 2017.
- Non-GAAP net loss for the second
quarter of 2018 was $0.7 million, or $0.04 loss per diluted share,
compared to non-GAAP net income of $2.6 million, or $0.16 earnings
per diluted share, for the same period in 2017.
- Revenues were reported at $108.2
million for the first six months of 2018, compared to $128.1
million for the same period in 2017, a 15.5% decrease.
- GAAP net loss for the first six months
of 2018 was $1.3 million, or $0.08 loss per diluted share, a
decrease from the GAAP net income of $3.4 million, or $0.21
earnings per diluted share reported for the same period in
2017.
- Non-GAAP net income for the first six
months of 2018 was $0.0 million, or $0.00 per diluted share,
compared to non-GAAP net income of $4.9 million, or $0.30 earnings
per diluted share, for the same period in 2017.
A reconciliation and description of non-GAAP financial measures
to corresponding GAAP financial measures are included in the tables
at the end of this press release.
PAR Technology’s CEO & President, Dr. Donald H. Foley
commented, “Over the past several quarters, we have made
substantial investments in our Brink development, as well as our
Brink sales and marketing teams, as we continue the transition to a
software led solutions company. This quarter is no different. As
evidence, our SaaS revenues increased 66% over the same quarter
last year. Our Government segment had another strong quarter as
revenues increased 22% over the same period in 2017 and we reported
contract margins of 11.7% in the quarter.”
Conference Call.
There will be a conference call at 4:30 p.m. (Eastern) on August
8, 2018, during which the Company’s management will discuss the
financial results for the second quarter ended June 30, 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/about-us/investors. Alternatively,
listeners may access an archived version of the presentation call
after 7:30 p.m. on August 8, 2018 through August 15, 2018 by
dialing 855-859-2056 and using conference ID 9787478.
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. PAR products 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/about-us/investors 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 sanctions and
fines that may be imposed by the U.S. Department of Justice,
the Securities and Exchange Commission (“SEC”), and other
governmental authorities; and the other risk 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.
About Non-GAAP Financial Measures
The Company reports its financial results in accordance with
GAAP. However, non-GAAP adjusted financial measures, as set forth
in the reconciliation tables below, are provided because management
uses these non-GAAP financial 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 financial 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 financial 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, expense relating to the internal
investigation into conduct in China and Singapore and the SEC
subpoena, 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. While the Company believes the adjustments
provide a useful comparison, the reconciliations of non-GAAP
financial measures to corresponding GAAP measures should be
carefully evaluated.
PAR TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share
amounts)
(Unaudited)
Assets June 30, 2018 December 31, 2017
Current assets: Cash and cash equivalents $ 8,678 $ 6,600 Accounts
receivable-net 33,418 30,077 Inventories-net 26,748 21,746 Other
current assets 4,179 4,209 Total current assets
73,023 62,632 Property, plant and equipment – net 11,877 10,755
Deferred income taxes 14,170 13,809 Goodwill 11,051 11,051
Intangible assets – net 12,504 12,070 Other assets 4,590
4,307
Total Assets $ 127,215 $ 114,624
Liabilities and Shareholders’ Equity Current liabilities:
Current portion of long-term debt $ 183 $ 195 Borrowings of line of
credit 5,841 950 Accounts payable 21,072 14,332 Accrued salaries
and benefits 6,153 6,275 Accrued expenses 2,775 3,926 Customer
deposits and deferred service revenue 11,236 10,241 Other current
liabilities 3,000 — Total current liabilities 50,260
35,919 Long-term debt 101 185 Deferred revenue 4,783 2,668 Other
long-term liabilities 3,380 6,866 Total liabilities
58,524 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; 17,885,159 and17,677,161 shares issued,
16,177,050 and 15,969,052 outstanding at June 30,2018 and December
31, 2017, respectively
357 354 Capital in excess of par value 49,508 48,349 Retained
earnings 28,294 29,549 Accumulated other comprehensive loss (3,632
) (3,430 ) Treasury stock, at cost, 1,708,109 shares (5,836 )
(5,836 ) Total shareholders’ equity 68,691 68,986
Total Liabilities and Shareholders’ Equity $ 127,215
$ 114,624
PAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
amounts)
(Unaudited)
Three Months EndedJune 30, Six Months
EndedJune 30, 2018 2017 2018 2017 Net
revenues: Product $ 20,883 $ 32,682 $ 47,207 $ 69,888 Service
13,944 15,034 27,140 29,377 Contract 17,744 14,545
33,885 28,861 52,571 62,261
108,232 128,126 Costs of sales: Product 15,339
24,389 34,779 51,961 Service 10,205 10,397 19,752 20,872 Contract
15,667 12,909 30,494 25,656
41,211 47,695 85,025 98,489
Gross margin 11,360 14,566 23,207 29,637 Operating expenses:
Selling, general and administrative 9,020 8,917 17,620 18,527
Research and development 3,222 2,653 6,090 5,632 Amortization of
identifiable intangible assets 242 242 483
483 12,484 11,812 24,193
24,642 Operating (loss) income from continuing operations
(1,124 ) 2,754 (986 ) 4,995 Other (expense) / income, net (384 ) 54
(335 ) (194 ) Interest expense, net (78 ) (13 ) (119 ) (45 )
(Loss) income from continuing operations before provision for
income taxes (1,586 ) 2,795 (1,440 ) 4,756 Benefit from /
(provision for) income taxes 263 (818 ) 185
(1,515 ) (Loss) income from continuing operations (1,323 ) 1,977
(1,255 ) 3,241 Discontinued operations Income from discontinued
operations (net of tax) — — — 183
Net (loss) income $ (1,323 ) $ 1,977 $ (1,255
) $ 3,424 Basic Earnings per Share: (Loss) income from
continuing operations (0.08 ) 0.12 (0.08 ) 0.20 Income from
discontinued operations — — — 0.01
Net (loss) income $ (0.08 ) $ 0.12 $ (0.08 ) $
0.21 Diluted Earnings per Share: (Loss) income from
continuing operations (0.08 ) 0.12 (0.08 ) 0.20 Income from
discontinued operations — — — 0.01
Net (loss) income $ (0.08 ) $ 0.12 $ (0.08 ) $
0.21 Weighted average shares outstanding Basic 16,330
15,919 15,993 15,893 Diluted 16,330
16,179 15,993 16,146
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 June 30, 2018 For the
three months ended June 30, 2017 Reported basis (GAAP)
Adjustments Comparable basis (Non-GAAP)
Reported basis (GAAP) Adjustments Comparable basis
(Non-GAAP) Net revenues $ 52,571 $ — $ 52,571 $ 62,261 $ —
$ 62,261 Costs of sales 41,211 — 41,211
47,695 — 47,695 Gross margin 11,360 — 11,360
14,566 — 14,566 Operating Expenses: Selling, general and
administrative 9,020 641 8,379 8,917 671 8,246 Research and
development 3,222 — 3,222 2,653 — 2,653 Acquisition amortization
242 242 — 242 242 — Total
operating expenses 12,484 883 11,601 11,812 913 10,899 Operating
(loss) income from continuing operations (1,124 ) 883 (241) 2,754
913 3,667 Other (expense) income, net (384 ) — (384) 54 — 54
Interest expense, net (78 ) — (78) (13) —
(13) (Loss) income from continuing operations before
provision for income taxes (1,586 ) 883 (703) 2,795 913 3,708
Benefit from / (provision for) income taxes 263 (212 )
51 (818) (338 ) (1,156) (Loss) income from
continuing operations (1,323 ) 671 (652) 1,977
575 2,552 Income from discontinued operations, (net
of tax) — — — — — — Net (loss) income
(1,323 ) (652) 1,977 2,552 (Loss) income per diluted share
from continuing operations (0.08 ) (0.04) 0.12 0.16 Income
per diluted share from discontinuing operations 0.00 0.00
0.00 0.00 (Loss) income per diluted share $ (0.08 ) $ (0.04)
$ 0.12 $ 0.16
During the second quarter of 2018, the Company recorded $314,000
of expenses related to the Company’s internal investigation into
conduct at its China and Singapore offices and the SEC subpoena.
Additionally, $250,000 of equity based compensation charges were
recorded during the second quarter of 2018. There were $77,000
of severance expenses recorded in the second quarter related to the
closing of the Company's facility in France. The Company recognized
amortization of acquired intangible assets of $242,000 related to
the Company’s 2014 acquisition of Brink Software, Inc.
("Brink"). The benefit from income tax was decreased by 24%,
or $212,000, to reflect the tax impact from non-GAAP
adjustments.
During the second quarter of 2017, the Company recorded charges
within selling, general and administrative of $605,000 related to
the Company’s internal investigation into conduct at its China and
Singapore offices and the SEC subpoena. In addition, $5,000 of
expenses related to the implementation of a new ERP system, and
$61,000 of equity based compensation charges were recorded during
the second quarter of 2017. The Company recognized amortization of
acquired intangible assets of $242,000 related to the Company’s
acquisition of Brink. The provision for income tax was increased by
37%, or $338,000, to reflect the tax impact from non-GAAP
adjustments.
PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(in thousands, except per share and per
share data)
(Unaudited)
For the six months ended June 30, 2018 For the six months
ended June 30, 2017 Reported basis (GAAP) Adjustments
Comparable basis (Non-GAAP) Reported basis (GAAP)
Adjustments Comparable basis (Non-GAAP) Net revenues $
108,232 $ — $ 108,232 $ 128,126 $ — $ 128,126 Costs
of sales 85,025 — 85,025 98,489 —
98,489 Gross margin 23,207 — 23,207 29,637 — 29,637
Operating Expenses: Selling, general and administrative 17,620
1,119 16,501 18,527 1,855 16,672 Research and development 6,090 —
6,090 5,632 — 5,632 Acquisition amortization 483 483
— 483 483 — Total operating expenses 24,193
1,602 22,591 24,642 2,338 22,304 Operating (loss) income from
continuing operations (986) 1,602 616 4,995 2,338 7,333 Other
expense, net (335) — (335) (194) — (194) Interest expense, net
(119) — (119) (45) — (45) (Loss)
income from continuing operations before provision for income taxes
(1,440) 1,602 162 4,756 2,338 7,094 Benefit from / (provision for)
income taxes 185 (384 ) (199) (1,515) (865 )
(2,380) (Loss) income from continuing operations (1,255) 1,218
(37) 3,241 1,473 4,714 Income
from discontinued operations, (net of tax) — — — 183
— 183 Net (loss) income (1,255) (37) 3,424 4,897
(Loss) income per diluted share from continuing operations (0.08)
0.00 0.20 0.29 Income per diluted share from discontinuing
operations 0.00 0.00 0.01 0.01 (Loss) income per diluted
share $ (0.08) $ 0.00 $ 0.21 $ 0.30
During the six months ended June 30, 2018, the Company recorded
$611,000 of expenses related to the Company’s internal
investigation into conduct at its China and Singapore offices and
the SEC subpoena. Additionally, $431,000 of equity based
compensation charges were recorded during the first six months of
2018. There were $77,000 of severance expenses recorded in the
first six months of 2018 related to the closing of the Company's
facility in France. The Company recognized amortization of acquired
intangible assets of $483,000 related to the Company’s 2014
acquisition of Brink. The benefit from income tax was
decreased by 24%, or $384,000, to reflect the tax impact from
non-GAAP adjustments.
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 internal investigation into conduct at its
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 funds. In addition,
$29,000 of expenses related to the implementation of a new ERP
system, and $238,000 of equity based compensation charges were
recorded during the six months ended June 30, 2017. The Company
recognized amortization of acquired intangible assets of $483,000
related to the Company’s acquisition of Brink. The benefit from
income tax was increased by 37%, or $865,000, to reflect the tax
impact from non-GAAP adjustments.
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version on businesswire.com: https://www.businesswire.com/news/home/20180808005752/en/
PAR Technology CorporationChristopher R. Byrnes, 315-738-0600
ext. 6226cbyrnes@partech.comwww.partech.com
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