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PAR TECHNOLOGY CORPORATION ANNOUNCES

2012 THIRD QUARTER RESULTS

 

New Hartford, NY- November 5, 2012 -- PAR Technology Corporation (NYSE: PAR) today announced results for the third quarter ended September 30, 2012.  PAR reported third quarter revenues of $61.1 million, a 4% increase from the $58.7 million reported for the third quarter of 2011.  Net income from continuing operations for the third quarter of 2012 was $1.3 million, representing diluted earnings per share of $0.09, compared to the third quarter of 2011 figure of $1.6 million, representing diluted earnings per share of $0.11. 

Paul B. Domorski, Chairman and Chief Executive Officer, stated, "Current market conditions, in the hospitality segments we serve, are making organic growth challenging in the near-term.  Despite this uncertainty, PAR has been able to maintain profitability, while continuing our investment in expanding our market reach through new products and services."

Mr. Domorski continued, "During the third quarter, PAR made several important announcements.  In the hospitality segment, we introduced our all new PAR EverServ® 7000 Point of Sale terminal. This is a terrific new product, which delivers demonstrable value to our customers at an attractive price point.  Also in the quarter, PAR Springer-Miller formally announced the transition of its ATRIO® Guest Experience Management software with Microsoft Corporation's Windows® Azure™ cloud platform.  With Windows Azure, a global network of Microsoft-managed datacenters, PAR is now able to provide computing and storage resources in support of ATRIO, assuring our customers of 99.95% uptime.  During the quarter, we also announced new distribution partners, as we prepare for the aggressive roll-out of ATRIO worldwide."

"Finally, our Government contracting segment announced several new contracts, most notably the award by the U.S. Army of an additional contract with a ceiling value of $48 million and a five year term.  This is the most recent contract we have received based on our expertise in advanced Full Motion Video (FMV), Geospatial Information Systems (GIS) and Intelligence Surveillance and Reconnaissance (ISR) software and hardware technologies. PAR is providing research, development, deployment and operational support, and user training necessary to transition these innovative and important capabilities to the field."

Mr. Domorski concluded, "The continued slowdown in business with our largest restaurant technology customer in the quarter has resulted in lower year-over-year revenue in our hospitality technology segment.  Our other hospitality markets have also shown weakness in the quarter.  However, given our conservative approach to uncertainty, we braced PAR for such conditions, refrained from any non-essential expenditures and concentrated on profitability while continuing our focus on innovation and new product introductions.  It is important to note that we continue to benefit from our strong and growing Government contracting business through a pipeline of new contract wins. As our hospitality technology markets rebound from the current market slowdown, we are poised to return to improved growth patterns with higher profitability."

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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:

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PAR TECHNOLOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

 (in thousands, except share amounts)

		September 30,				December 31,
Assets		2012				2011
Current assets:
Cash and cash equivalents		$	18,206			$	7,742
Accounts receivable-net			26,323				30,680
Inventories-net			25,469				25,260
Income tax refund			37				-
Deferred income taxes			9,503				10,240
Other current assets			3,958				3,088
Escrow receivable			956				-
Total current assets			84,452				77,010
Property, plant and equipment - net			6,099				5,259
Deferred income taxes			5,402				5,605
Goodwill			6,852				6,852
Intangible assets - net			16,779				15,888
Other assets			2,392				2,147
Assets of discontinued operations			-				3,182
Total Assets		$	121,976			$	115,943
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt		$	157			$	1,494
Accounts payable			17,164				15,773
Accrued salaries and benefits			6,628				7,002
Accrued expenses			3,792				2,609
Customer deposits			763				1,137
Deferred service revenue			12,880				10,412
Income taxes payable			-				138
Total current liabilities			41,384				38,565
Long-term debt			1,114				1,249
Other long-term liabilities			3,184				2,837
Liabilities of discontinued operations			104				925
Total liabilities			45,786				43,576
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;
17,061,171 and 16,863,868 shares issued;
15,353,484 and 15,156,584 outstanding			341				337
Capital in excess of par value			43,547				42,990
Retained earnings			38,371				35,073
Accumulated other comprehensive loss			(235	)			(201	)
Treasury stock, at cost, 1,707,687 and 1,707,284 shares			(5,834	)			(5,832	)
Total shareholders' equity			76,190				72,367
Total Liabilities and Shareholders' Equity		$	121,976			$	115,943
See accompanying notes to consolidated financial statements

 

 

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PAR TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 (in thousands, except per share amounts)

 

 

		For the three months								For the nine months
		Ended September 30,								Ended September 30,
		2012				2011				2012				2011
Net revenues:
Product		$	22,340			$	24,424			$	62,652			$	68,877
Service			16,720				18,510				48,113				51,594
Contract			21,992				15,756				67,965				48,836
			61,052				58,690				178,730				169,307
Costs of sales:
Product			14,681				15,754				39,699				42,888
Service			11,775				13,184				33,813				44,176
Contract			20,584				14,667				64,151				45,812
			47,040				43,605				137,663				132,876
Gross margin			14,012				15,085				41,067				36,431
Operating expenses:
Selling, general and administrative			9,410				8,745				28,844				27,730
Research and development			3,309				3,363				9,947				10,428
Impairment of goodwill and intangible assets			-				-				-				20,843
Amortization of identifiable intangible assets			138				257				441				667
			12,857				12,365				39,232				59,668
Operating income (loss) from continuing operations			1,155				2,720				1,835				(23,237	)
Other income (expense), net			233				23				440				(106	)
Interest expense			(22	)			(48	)			(64	)			(163	)
Income (loss) from continuing operations before provision for income taxes			1,366				2,695				2,211				(23,506	)
(Provision) benefit for income taxes			(62	)			(1,099	)			(383	)			8,317
Income (loss) from continuing operations			1,304				1,596				1,828				(15,189	)
Discontinued operations
Income (loss) on discontinued operations (net of tax)			50				(394	)			1,470				(1,053	)
Net income (loss)		$	1,354			$	1,202			$	3,298			$	(16,242	)
Basic Earnings per Share:
Income (loss) from continuing operations			.09				.11				.12				(1.01	)
Income (loss) from discontinued operations			.00				(.03	)			.10				(.07	)
Net income (loss)		$	.09			$	.08			$	.22			$	(1.08	)
Diluted Earnings per Share:
Income (loss) from continuing operations			.09				.11				.12				(1.01	)
Income (loss) from discontinued operations			.00				(.03	)			.10				(.07	)
Net income (loss)		$	.09			$	.08			$	.22			$	(1.08	)
Weighted average shares outstanding
Basic			15,131				15,031				15,105				14,984
Diluted			15,207				15,118				15,179				14,984

 

 

 

 

 

 

See

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PAR TECHNOLOGY CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

 

						For the nine months ended September 30, 2011
		For the nine months ended September 30, 2012				Reported basis (GAAP)				Adjustments				Comparable basis (Non-GAAP)
Net revenues		$	178,730			$	169,307				-			$	169,307
Costs of sales			137,663				132,876				7,732				125,144
Gross Margin			41,067				36,431				7,732				44,163
Operating Expenses
Selling, general and administrative			28,844				27,730				595				27,135
Research and development			9,947				10,428				-				10,428
Impairment of goodwill and  intangible assets			-				20,843				20,843				-
Amortization of identifiable intangible assets			441				667				-				667
Total operating expenses			39,232				59,668				21,438				38,230
Operating income (loss) from continuing operations			1,835				(23,237	)			29,170				5,933
Other income (expense), net			440				(106	)			253				147
Interest expense			(64	)			(163	)			-				(163	)
Income (loss) from continuing operations before provision for income taxes			2,211				(23,506	)			29,423				5,917
(Provision)benefit for income taxes			(383	)			8,317				(10,568	)			(2,251	)
Income (loss) from continuing operations		$	1,828			$	(15,189	)		$	18,855			$	3,666
Income (loss) per diluted share from continuing operations		$	0.22			$	(1.01	)						$	0.24

 

 

 

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 nine months ended September 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.

These charges did not have any impact on the Company's financial results for the three months ended September 30, 2011.