PAR Technology Corporation Announces 2012 Third Quarter Results

PAR Technology Corporation Announces 2012 Third Quarter Results

NEW HARTFORD, N.Y.--(BUSINESS WIRE)-- PAR Technology Corporation (NYS: 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."

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 time on November 5, 2012, during which the Company's management will discuss the financial results for the third quarter of 2012. If you would like to participate in this conference please call 800-561-2731 approximately 10 minutes before the call is scheduled to begin and use the PAR pass code 23958721. Individual & Institutional Investors will have the opportunity to listen to the conference call/event over the Internet. Individual Investors can listen to the call by visiting PAR's website at www.partech.com, and through CCBN's individual investor center at www.companyboardroom.com or by visiting 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). In case you are unable to participate in the conference call, an automatic replay will be available on the World Wide Web via www.companyboardroom.com until November 12, 2012 or dial 888-286-8010 and use the Pass Code number 39590683 until November 12, 2012 as well.

PAR TECHNOLOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

September 30,

December 31,

2012

2011

Assets

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

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 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 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