PAR Technology Corporation Announces 2012 Second Quarter Results

PAR Technology Corporation (NYSE: PAR) today announced results for the second quarter ended June 30, 2012. PAR reported revenues of $62.1 million and net loss from continuing operations of $511,000 or $0.03 loss per diluted share. For the second quarter of 2011, PAR reported revenue of $56.4 million and net loss from continuing operations of $17.5 million or $1.17 loss per diluted share. On an adjusted, non-GAAP basis, excluding the impact of non-recurring charges incurred during the period and reflecting the reclassification of continuing operations, PAR recorded net income of $1.3 million or $0.09 per diluted share for the second quarter of 2011.

Included in the current period net loss was a non-operating loss of $0.02 per share associated with the second quarter of 2012 sale of common stock received as consideration as part of the Company’s divestiture of its Logistics Management business in January.

Commenting on the second quarter, Paul B. Domorski, Chairman and Chief Executive Officer, stated, “I said on last quarter’s earnings conference call that the second quarter would be challenging due to the slowdown of our McDonalds business, and as we begin to ramp new deployments. Despite this, hospitality revenue increased sequentially, as we recognized revenue from several ongoing deployments with other restaurant chains, which we expect to continue for the coming quarters. We remain encouraged about PAR’s prospects. Our two new cloud based products, ATRIO™ and EverServ SureCheck™, continue to draw increasing interest in the marketplace, and we are engaged in numerous discussions with large potential customers. Our momentum in restaurants received a major boost with last week’s introduction of our new PAR EverServ® 7000 point-of-sale platform, for which early interest has been very encouraging. The 7000 Series POS terminal has a sleek design, innovative technology featuring multi-touch capability, and delivers the rugged durability for which PAR is renowned. Our Government business reported record revenues this past quarter driven by the Eagle Intel-X contract along with newly signed and additional add-on contracts with the U.S. Department of Defense.”

“In closing, PAR’s financial strength remains strong, as we have more than $17 million of cash and investments and very little debt. While business in the second quarter was challenging, we believe we are in a good position to expand and improve our results in the second half of 2012.”

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 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 has two operating segments:
  • PAR’s Hospitality segment has been a leading provider of restaurant and retail technology for more than 30 years. ParTech, Inc. offers technology solutions for the full spectrum of restaurant operations, from large chain and independent table service restaurants to international quick service chains. PAR Springer-Miller Systems, Inc. offers hotel management systems that provide a complete suite of powerful tools for guest management, recreation management, and timeshare/condo management. PAR Springer-Miller Systems also provides the spa industry a leading management application that was specifically designed to support the unique needs of the resort spa and day spa markets, a rapidly growing hospitality segment. Products from PAR also can be found in retailers, cinemas, cruise lines, stadiums and food service companies.
  • PAR’s Government segment is comprised of PAR Government Systems Corporation, which provides system solutions to Federal/State Government agencies, and Rome Research Corporation, which is a leading provider of communications and information technology support services to the United States Department of Defense.

Visit www.partech.com for more information.

There will be a conference call at 10:00 a.m. (Eastern) on August 1, 2012, during which the Company’s management will discuss the financial results for the second quarter of 2012. If you would like to participate in this conference call, please dial 1-800-260-8140 approximately 10 minutes before the scheduled beginning and use the PAR passcode 26579296. Individual and institutional investors also will have the opportunity to listen to the conference call live over the Internet. Individual investors can listen by visiting PAR’s website at www.partech.com or by visiting CCBN’s individual investor center at www.companyboardroom.com or any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected site, StreetEvents ( www.streetevents.com). If you are unable to participate in the conference call, an automatic replay will be available until August 8, 2012 via www.companyboardroom.com or via telephone by dialing 1-888-286-8010 and using the passcode 96484302.
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)
 
  June 30,   December 31,
2012 2011
Assets
Current assets:
Cash and cash equivalents $ 16,895 $ 7,742
Investments 250 -
Accounts receivable-net 31,336 30,680
Inventories-net 23,469 25,260
Deferred income taxes 9,907 10,240
Other current assets 3,138 3,088
Escrow receivable   1,147     -  
Total current assets 86,142 77,010
Property, plant and equipment - net 6,119 5,259
Deferred income taxes 5,116 5,605
Goodwill 6,852 6,852
Intangible assets - net 16,444 15,888
Other assets 2,330 2,147
Assets of discontinued operations   -     3,182  
Total Assets $ 123,003   $ 115,943  
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt $ 599 $ 1,494
Accounts payable 19,000 15,773
Accrued salaries and benefits 6,392 7,002
Accrued expenses 2,211 2,609
Customer deposits 714 1,137
Deferred service revenue 14,912 10,412
Income taxes payable   93     138  
Total current liabilities   43,921     38,565  
Long-term debt   1,173     1,249  
Other long-term liabilities   3,101     2,837  
Liabilities of discontinued operations   101     925  
Shareholders’ Equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized - -
Common stock, $.02 par value, 29,000,000 shares authorized;
17,050,102 and 16,863,868 shares issued;
15,342,818 and 15,156,584 outstanding 341 337
Capital in excess of par value 43,413 42,990
Retained earnings 37,017 35,073
Accumulated other comprehensive loss (232 ) (201 )
Treasury stock, at cost, 1,707,284 and 1,707,284 shares   (5,832 )   (5,832 )
Total shareholders’ equity   74,707     72,367  
Total Liabilities and Shareholders’ Equity $ 123,003   $ 115,943  
 
See accompanying notes to consolidated financial statements
 
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
 
  For the three months   For the six months
Ended June 30, Ended June 30,
2012   2011 2012   2011
Net revenues:
Product $ 20,142 $ 22,743 $ 40,312 $ 44,453
Service 16,014 17,440 31,393 33,084
Contract   25,929     16,258     45,973     33,080  
  62,085     56,441     117,678     110,617  
Costs of sales:
Product 14,041 13,963 25,018 27,134
Service 11,473 20,285 22,038 30,992
Contract   24,584     15,336     43,567     31,145  
  50,098     49,584     90,623     89,271  
Gross margin   11,987     6,857     27,055     21,346  
Operating expenses:
Selling, general and administrative 9,291 9,647 19,434 18,985
Research and development 3,089 3,322 6,638 7,065
Impairment of goodwill and intangible assets - 20,843 - 20,843
Amortization of identifiable intangible assets   150     205     303     410  
  12,530     34,017     26,375     47,303  
Operating income (loss) from continuing operations (543 ) (27,160 ) 680 (25,957 )
Other income (expense), net (366 ) (157 ) 207 (129 )
Interest expense   (21 )   (67 )   (42 )   (115 )
Income (loss) from continuing operations before provision for income taxes (930 ) (27,384 ) 845 (26,201 )
(Provision) benefit for income taxes   419     9,858     (321 )   9,416  
Income (loss) from continuing operations (511 ) (17,526 ) 524 (16,785 )
Discontinued operations
Income (loss) on discontinued operations (net of tax)   (10 )   (322 )   1,420     (659 )
Net income (loss) $ (521 ) $ (17,848 ) $ 1,944   $ (17,444 )
Basic Earnings per Share:
Income (loss) from continuing operations (.03 ) (1.17 ) .03 (1.12 )
Income (loss) from discontinued operations   (.00 )   (.02 )   .09     (.04 )
Net income (loss) $ (.03 ) $ (1.19 ) $ .13   $ (1.17 )
Diluted Earnings per Share:
Income (loss) from continuing operations (.03 ) (1.17 ) .03 (1.12 )
Income (loss) from discontinued operations   (.00 )   (.02 )   .09     (.04 )
Net income (loss) $ (.03 ) $ (1.19 ) $ .13   $ (1.17 )
Weighted average shares outstanding
Basic   15,098     14,996     15,091     14,960  
Diluted   15,098     14,996     15,163     14,960  
 
See accompanying notes to consolidated financial statements
 
   
PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
 
For the three months ended June 30, 2011
For the three Reported     Comparable
months ended basis basis (Non-
June 30, 2012 (GAAP) Adjustments GAAP)
 
Net revenues $62,085 $56,441 $56,441
 
Costs of sales 50,098   49,584   7,732   41,852  
Gross Margin 11,987 6,857 7,732 14,589
 
Operating Expenses
Selling, general and administrative 9,291 9,647 595 9,052
Research and development 3,089 3,322 - 3,322
Impairment of goodwill and intangible assets - 20,843 20,843 -
Amortization of identifiable intangible assets 150   205   -   205  
Total operating expenses 12,530 34,017 21,438 12,579
 
Operating income (loss) from continuing operations (543 ) (27,160 ) 29,170 2,010
Other income (expense), net (366 ) (157 ) 253 96
Interest expense (21 ) (67 ) -   (67 )
Income (loss) from continuing operations before provision for income taxes (930 ) (27,384 ) 29,423 2,039
(Provision)benefit for income taxes 419   9,858   (10,568 ) (710 )
Income (loss) from continuing operations $(511 ) $(17,526 ) $18,855   $1,329  
Income (loss) per diluted share from continuing operations $(0.03 ) $(1.17 ) $.09  
 
   
PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
 
For the six months ended June 30, 2011
For the six Reported     Comparable
months ended basis basis (Non-
June 30, 2012 (GAAP) Adjustments GAAP)
 
Net revenues $117,678 $110,617 $110,617
Costs of sales 90,623   89,271   7,732   81,539  
Gross Margin 27,055 21,346 7,732 29,078
 
Operating Expenses
Selling, general and administrative 19,434 18,985 595 18,390
Research and development 6,638 7,065 7,065
Impairment of goodwill and intangible assets - 20,843 20,843 -
Amortization of identifiable intangible assets 303   410     410  
Total operating expenses 26,375 47,303 21,438 25,865
 
Operating income (loss) from continuing operations 680 (25,957 ) 29,170 3,213
Other income (expense), net 207 (129 ) 253 124
Interest expense (42 ) (115 )   (115 )
Income (loss) from continuing operations before provision for income taxes 845 (26,201 ) 29,423 3,222
(Provision)benefit for income taxes (321 ) 9,416   (10,568 ) (1,152 )
Income (loss) from continuing operations $524   $(16,785 ) $18,855   $2,070  
Income (loss) per diluted share from continuing operations $0.03   $(1.12 ) $.14  
 

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 herein because management uses such measures in evaluating the results of the continuing operations of the Company and believes this information provides investors better insight into underlying business trends and performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.

For the three and six months ended June 30, 2011, the Company recorded total charges of $29.4 million primarily related to an impairment of goodwill and intangible assets of $20.8 million. Additionally, the Company recorded a charge of $7.7 million related to a non-recurring write-down of certain inventory associated with discontinued products, and charges of $0.9 million related to the consolidation of some of its facilities. The aforementioned charges have been recorded net of tax benefit of $10.6 million and have been excluded in the Company’s non-GAAP measures because they are considered non-recurring in nature and are quantitatively and qualitatively different from the Company’s core operations during any particular period.

Copyright Business Wire 2010

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