PAR Technology Corporation (NYSE:PAR) ("Company" or "PAR") today
announced the Company’s results for its fourth quarter and full
year ended December 31, 2018.
Summary of Fiscal 2018 Fourth Quarter and Full Year Financial
Results
- Revenues were reported at $46.7 million
for the fourth quarter of 2018, compared to $55.5 million for the
same period in 2017, a 16.0% decrease.
- GAAP net loss for the fourth quarter of
2018 was $6.2 million, or $0.38 loss per diluted share, compared to
the GAAP net loss of $5.3 million, or $0.33 loss per diluted share
reported for the same period in 2017.
- Non-GAAP net loss for the fourth
quarter of 2018 was $3.7 million, or $0.23 loss per diluted share,
compared to non-GAAP net loss of $18,000, or $0.00 per diluted
share, for the same period in 2017.
- Revenues were reported at $201.2
million for full year 2018, compared to $232.6 million for the same
period in 2017, a 13.5% decrease.
- GAAP net loss for the full year 2018
was $24.1 million, or $1.50 loss per diluted share, compared to a
loss of $3.4 million, or $0.22 per diluted share reported for the
same period in 2017. GAAP net loss for 2018 was impacted by a
one-time $14.9 million valuation allowance recorded to reduce the
carrying value of deferred tax assets recorded to income tax
expense.1
- Non-GAAP net loss for the full year
2018 was $5.0 million, or $0.31 loss per diluted share, compared to
non-GAAP net income of $4.4 million, or $0.27 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.
“Our fourth quarter results reflect both the strategic and
operational challenges faced by the Company during this past year
as we continue our transition from a cyclical business to our goal
of being the industry leader in enterprise cloud solutions for the
restaurant industry. We are taking the necessary steps to right
size the Company during this transition and we initiated business,
organizational and cost restructurings earlier this year”,
commented Savneet Singh, PAR Technology Interim CEO &
President. “In my brief tenure at PAR, I’ve spent considerable time
with our customers who continue to highlight the value they find in
our Brink SaaS solution. The heightened focus of our customers
on Brink demonstrates the potential of this business for
shareholder value creation. As a result, we plan to drive our
capital allocation decisions through the lens of the Brink
solution. In addition, we are working hard to deliver transparency
to our shareholders, customers and employees and I look forward to
updating you on our progress.”
1 See the within GAAP to Non-GAAP Reconciliations included
in this press release for further detail on the valuation
allowance.
Conference Call.
There will be a conference call at 4:30 p.m. (Eastern) on March
14, 2019, during which the Company’s management will discuss the
financial results for the fourth quarter and year ended December
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/about-us/investors. Alternatively,
listeners may access an archived version of the presentation call
after 7:30 p.m. on March 14, 2019 through March 21, 2019 by dialing
855-859-2056 and using conference ID 5893815.
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. Risks and uncertainties that could cause the
Company's 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 restaurant chain customers
and the U.S. Department of Defense from each of 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; our ability
to continue to fund current operations under the terms of our
credit agreement, which provides for revolving loans in an amount
equal to the lesser of $25 million and the borrowing base amount
and not being able to obtain additional waivers or modifications to
our credit agreement, if necessary; our need to secure alternative
or additional sources of capital, which may be unavailable on
acceptable terms, or at all; our ability to execute our business
plan and grow our Brink business; significant changes in U.S. and
international trade policies that restrict imports or increase
tariffs on goods imported to the United States from China; and the
other risk factors discussed in our Annual Report on Form 10-K
for the year ended December 31, 2018 and our 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
document 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 loss, net
loss and diluted loss 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
December 31,2018
December 31,2017
Current assets:
Cash and cash equivalents $ 3,485 $ 6,600 Accounts receivable-net
26,219 30,077 Inventories-net 22,737 21,746 Other current assets
3,251 4,209 Total current assets 55,692 62,632
Property, plant and equipment – net 12,575 10,755 Deferred income
taxes — 13,809 Goodwill 11,051 11,051 Intangible assets – net
10,859 12,070 Other assets 4,504 4,307
Total
Assets $ 94,681 $ 114,624
Liabilities and
Shareholders’ Equity Current liabilities: Current portion of
long-term debt $ — $ 195 Borrowings of line of credit 7,819 950
Accounts payable 12,644 14,332 Accrued salaries and benefits 5,940
6,275 Accrued expenses 2,113 3,926 Customer deposits and deferred
service revenue 9,851 10,241 Other current liabilities 2,550
— Total current liabilities 40,917 35,919 Long-term
debt — 185 Deferred revenue 4,407 2,668 Other long-term liabilities
3,411 6,866 Total liabilities 48,735 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;17,879,761 and 17,677,161 shares issued,
16,171,652 and15,969,052 outstanding at December 31, 2018
andDecember 31, 2017, respectively
357 354 Capital in excess of par value 50,251 48,349 Retained
earnings 5,427 29,549 Accumulated other comprehensive loss (4,253 )
(3,430 ) Treasury stock, at cost, 1,708,109 shares (5,836 ) (5,836
) Total shareholders’ equity 45,946 68,986
Total
Liabilities and Shareholders’ Equity $ 94,681 $ 114,624
PAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
amounts)
(Unaudited)
Three Months EndedDecember 31,
Year EndedDecember 31,
2018 2017
2018 2017 Net revenues: Product $
16,129 $ 24,532 $ 78,787 $ 115,126 Service 14,667 13,773 55,282
56,467 Contract 15,856 17,236 67,177 61,012
46,652 55,541 201,246 232,605 Costs of sales: Product 13,850
18,028 60,694 85,850 Service 12,107 10,333 42,107 41,445 Contract
13,977 15,035 59,982 54,299 39,934
43,396 162,783 181,594 Gross margin
6,718 12,145 38,463 51,011 Operating expenses: Selling, general and
administrative 9,396 10,590 34,983 38,171 Research and development
3,330 3,833 12,412 11,995 Amortization of identifiable intangible
assets 242 242 966 966 12,968
14,665 48,361 51,132 Operating loss from
continuing operations (6,250 ) (2,520 ) (9,898 ) (121 ) Other
income, net 186 893 306 629 Interest expense, net (126 ) (37 ) (387
) (121 )
(Loss) income from continuing operations
before benefit from(provision for) income taxes
(6,190 ) (1,664 ) (9,979 ) 387 Benefit from / (provision for)
income taxes 27 (3,670 ) (14,143 ) (3,997 ) Loss from
continuing operations (6,163 ) (5,334 ) (24,122 ) (3,610 )
Discontinued operations Income from discontinued operations (net of
tax) — 41 — 224 Net loss $ (6,163 ) $
(5,293 ) $ (24,122 ) $ (3,386 ) Basic (Loss) Earnings per Share:
Loss from continuing operations (0.38 ) (0.33 ) (1.50 ) (0.23 )
Income from discontinued operations — — — 0.01
Net loss $ (0.38 ) $ (0.33 ) $ (1.50 ) $ (0.22 ) Diluted
Loss per Share: Loss from continuing operations (0.38 ) (0.33 )
(1.50 ) (0.23 ) Income from discontinued operations — —
— 0.01 Net loss per share $ (0.38 ) $ (0.33 )
$ (1.50 ) $ (0.22 ) Weighted average shares outstanding Basic
16,079 16,056 16,041 15,949 Diluted
16,079 16,056 16,041 15,949
PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(in thousands, except per share data)
(Unaudited)
For the three months endedDecember 31,
2018
For the three months endedDecember 31,
2017
Reportedbasis(GAAP)
Adjustments
Comparablebasis(Non-GAAP)
Reportedbasis(GAAP)
Adjustments
Comparablebasis(Non-GAAP)
Net revenues $ 46,652 $ — $ 46,652 $ 55,541 $ — $
55,541 Costs of sales 39,934 2,606 37,328
43,396 165 43,231 Gross margin 6,718 2,606
9,324 12,145 165 12,310 Operating Expenses: Selling, general and
administrative 9,396 503 8,893 10,590 1,513 9,077 Research and
development 3,330 — 3,330 3,833 113 3,720 Acquisition amortization
242 242 — 242 242
— Total operating expenses 12,968 745 12,223 14,665 1,868
12,797 Operating (loss) income from continuing operations (6,250 )
3,351 (2,899 ) (2,520 ) 2,033 (487 ) Other income (expense), net
186 (50 ) 136 893 (1,000 ) (107 ) Interest expense, net (126 ) —
(126 ) (37 ) — (37 )
(Loss) income from continuing operations
before benefitfrom / (provision for) income taxes
(6,190 ) 3,301 (2,889 ) (1,664 ) 1,033 (631 ) Benefit from /
(provision for) income taxes 27 (792 ) (765 )
(3,670 ) 4,242 572 Loss from continuing
operations (6,163 ) 2,509 (3,654 ) (5,334 ) 5,275 (59 ) Income from
discontinued operations, (net of tax) — — 41 41 Net loss (6,163 )
(3,654 ) (5,293 ) (18 ) Loss per diluted share from
continuing operations $ (0.38 ) $ (0.23 ) $ (0.33 ) $ —
Income per diluted share from discontinuing operations $ —
$ — $ — $ — Loss per diluted
share $ (0.38 ) $ (0.23 ) $ (0.33 ) $ —
During the fourth quarter of 2018, the Company recorded a
one-time reserve of $1,020,000 on hardware inventory as well as a
one-time impairment charge of $1,586,000 related to its food safety
solution. The Company also recorded $218,000 of selling, general
and administrative expenses related to the Company’s internal
investigation into conduct at its China and Singapore offices and
the SEC document subpoena. Additionally, $285,000 of equity based
compensation charges were recorded during the fourth quarter of
2018. The Company recognized amortization of acquired
intangible assets of $242,000 related to the Company’s 2014
acquisition of Brink Software, Inc. (the "Brink Acquisition") and
recorded a reduction to the contingent consideration payable
related to the acquisition of $50,000. The benefit from income tax
was decreased by 24%, or $0.8 million, to reflect the tax impact
from non-GAAP adjustments.
During the fourth quarter of 2017, the Company recorded $652,000
of expenses related to the Company’s internal investigation and the
SEC document subpoena. Additionally, $349,000 of equity based
compensation charges were recorded during the fourth quarter of
2017. One-time severance costs of $512,000, $165,000, and $113,000
are included in selling, general and administrative, costs of sales
and research & development expense, respectively. The Company
recognized amortization of acquired intangible assets of $242,000
related to the Company’s 2014 Brink Acquisition. Offsetting these
charges, the Company recorded a $1,000,000 decrease to a contingent
consideration liability related to the Brink Software acquisition.
Lastly, the Company incurred a one-time decrease to the carrying
value of its deferred tax assets of $4,490,000 as a result of the
future tax rate changes from the Tax Cuts and Jobs Act. This
decrease is reflected in the provision for/benefit from income tax
line above netted down by a 24% or $248,000 tax impact from the
non-GAAP adjustments.
PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(in thousands, except per share data)
(Unaudited)
For the year ended December 31, 2018
For the year ended December 31, 2017
Reportedbasis(GAAP)
Adjustments
Comparablebasis(Non-GAAP)
Reportedbasis(GAAP)
Adjustments
Comparablebasis(Non-GAAP)
Net revenues $ 201,246 $ — $ 201,246 $ 232,605 $ —
$ 232,605 Costs of sales 162,783 2,606
160,177 181,594 165 181,429
Gross margin 38,463 2,606 41,069 51,011 165 51,176 Operating
Expenses: Selling, general and administrative 34,983 2,407 32,576
38,171 4,107 34,064 Research and development 12,412 — 12,412 11,995
113 11,882 Acquisition amortization 966 966
— 966 966 —
Total operating expenses 48,361 3,373 44,988 51,132 5,186 45,946
Operating (loss) income from continuing operations (9,898 ) 5,979
(3,919 ) (121 ) 5,351 5,230 Other income (expense), net 306 (450 )
(144 ) 629 (1,000 ) (371 ) Interest expense, net (387 ) —
(387 ) (121 ) —
(121 )
(Loss) income from continuing operations
before(provision for) / benefit from income taxes
(9,979 ) 5,529 (4,450 ) 387 4,351 4,738 (Provision for) / benefit
from income taxes (14,143 ) 13,567 (576 )
(3,997 ) 3,446 (551 ) (Loss)
income from continuing operations (24,122 ) 19,096
(5,026 ) (3,610 ) 7,797
4,187 Income from discontinued operations, (net of tax) —
— — 224 — 224
Net (loss) income (24,122 ) (5,026 ) (3,386 )
4,411 (Loss) income per diluted share from continuing
operations $ (1.50 ) $ (0.31 ) $ (0.23 ) $ 0.26
Income per diluted share from discontinued operations $ —
$ — $ 0.01 $ 0.01 (Loss)
income per diluted share $ (1.50 ) $ (0.31 ) $ (0.22
) $ 0.27
During the year ended December 31, 2018, the Company recorded a
one-time reserve of $1,020,000 on hardware inventory as well as a
one-time impairment charge of $1,586,000 related to its food safety
solution. The Company also recorded $1,134,000 of selling, general
and administrative expenses related to the Company’s internal
investigation and the SEC document subpoena. Additionally,
$1,039,000 of equity based compensation charges were recorded
during the year ended December 31, 2018. There were $234,000
of severance expenses recorded in the year ended December 31, 2018.
The Company recognized amortization of acquired intangible assets
of $966,000 related to the Company’s Brink Acquisition as well as a
$450,000 reduction in the amount payable under contingent
consideration related to that acquisition. The Company recorded a
one-time $14,894,000 valuation allowance to reduce the carrying
value of its deferred tax assets pursuant to FASB ASC 740-10-30-21.
The valuation allowance was offset by $1.3 million or 24%
representing the tax impact of non-GAAP adjustments.
During the year ended December 31, 2017, the Company recorded
professional services charges of $2,924,000 related to the
Company’s internal investigation and the SEC document subpoena.
Additionally, the Company recorded charges of $650,000 related to
equity based compensation charges included in selling, general and
administrative. One-time severance costs of $512,000, $165,000, and
$113,000 are included in selling, general and administrative, costs
of sales and research & development expense, respectively. The
Company recognized amortization of acquired intangible assets of
$966,000 related to the Brink Acquisition. Offsetting these
charges, the Company recorded a $1,000,000 decrease to a contingent
consideration liability related to that acquisition. Lastly, the
Company incurred a one-time decrease to the carrying value of its
deferred tax assets of $4,490,000 as a result of the future tax
rate changes resulting from the Tax Cuts and Jobs Act of 2017. This
decrease is reflected in the provision for/benefit from income tax
line above netted down by a 24% or $1,044,000 tax impact from the
non-GAAP adjustments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190314005860/en/
New Hartford, NY, March 14, 2019Christopher R. Byrnes (315)
738-0600 ext. 6226cbyrnes@partech.com,
www.partech.com
PAR Technology (NYSE:PAR)
Historical Stock Chart
From Mar 2024 to Apr 2024
PAR Technology (NYSE:PAR)
Historical Stock Chart
From Apr 2023 to Apr 2024