NEW HARTFORD, N.Y.--(BUSINESS WIRE)--
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.
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PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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(in thousands, except share amounts) |
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(Unaudited) |
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| Assets |
June 30, |
December 31, |
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| 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 | - | - | |||||||||
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Common stock, $.02 par value, 29,000,000 shares authorized;
17,615,390 and 17,479,454 shares issued, |
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 | |||||||
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PAR TECHNOLOGY CORPORATION |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(in thousands, except per share amounts) |
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(Unaudited) |
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For the three June 30, |
For the three June 30, |
For the six June 30, |
For the six June 30, |
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| 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 | |||||||||||||||||
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PAR TECHNOLOGY CORPORATION |
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS |
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(in thousands, except per share data) |
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(Unaudited) |
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| For the three months ended June 30, 2017 | For the three months ended June 30, 2016 | ||||||||||||||||||||||||||||||
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Reported basis |
Adjustments |
Comparable
basis (Non- GAAP) |
Reported basis |
Adjustments |
Comparable
basis (Non- GAAP) |
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| 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.
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PAR TECHNOLOGY CORPORATION |
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS |
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(in thousands, except per share data) |
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(Unaudited) |
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| For the six months ended June 30, 2017 | For the six months ended June 30, 2016 | ||||||||||||||||||||||||||||||
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Reported basis |
Adjustments |
Comparable
basis (Non- GAAP) |
Reported basis |
Adjustments |
Comparable
basis (Non- GAAP) |
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| 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.
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