PAR Technology Corporation Announces 2015 Second Quarter Results

Revenues Grow 10.3% in the Quarter – 7.9% in the First Six Months of 2015

NEW HARTFORD, N.Y.--(BUSINESS WIRE)-- PAR Technology Corporation (NYSE: PAR) today announced results for the second quarter ended June 30, 2015.

Summary of Fiscal 2015 Second Quarter and Year-to-Date Financial Results

• Revenue increased 10.3% to $63.3 million in the second quarter of fiscal 2015, compared to $57.4 million in the same period in 2014.
• Non-GAAP net income in the second quarter of fiscal 2015 was $0.6 million, or $0.04 per diluted share, compared to a non-GAAP net loss of $0.3 million, or $0.02 loss per share, in the same period in 2014.
• GAAP net income in the second quarter of fiscal 2015 was $0.1 million, or $0.01 per diluted share, compared to a GAAP net loss of $0.5 million, or $0.03 loss per share, in the same period in 2014.
• Revenue increased 7.9% to $122.9 million in the first six months of fiscal 2015, compared to $113.9 million in the same period in 2014.
• Non-GAAP net income in the first six months of fiscal 2015 was $0.6 million, or $0.04 per diluted share, compared to a non-GAAP net loss of $1.0 million or $0.06 loss per share, in the same period in 2014.
• GAAP net loss in the first six months of fiscal 2015 was $0.3 million or $0.02 loss per share, compared to a GAAP net loss of $1.5 million, or $0.10 loss per share, in the same period in 2014.

Commenting on the second quarter results, Ronald J. Casciano, Chief Executive Officer & President, stated, “We are pleased with the quarterly performance and the progress being made in both of our business segments as they delivered revenue and income growth in the quarter. We are seeing strong interest in our new hospitality technology products, specifically our Brink POS™ software, and are encouraged by the recent new customer wins in this segment. Our Government segment also had a strong second quarter and delivered double digit revenue growth and improved profits for the quarter when compared to the same period in 2015. Going forward we fully expect to build upon our recent progress by focusing on alignment, innovation and execution to compete and succeed in the markets we serve.”

The Company previously stated its intention to make strategic and operational improvements involving its hospitality segment, primarily in its international operations to focus on global delivery of its software solutions. This restructuring realigns sales and support functions with US-based operations, increases efficiencies and reduces operating costs. In connection with this restructuring, the Company’s GAAP results include a one-time pre-tax charge in the second quarter of $416,000.

A reconciliation and description of non-GAAP financial measures to their comparable GAAP financial measures are included in the tables following this news release.

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 30 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. PAR’s Hospitality business also provides hotel management systems with a complete suite of powerful tools for guest management, recreation management, and timeshare/condo management. In addition, PAR offers the spa industry a leading management application 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 Business is a leader in providing computer-based system design, engineering and technical services to the Department of Defense and various federal agencies. Visit www.partech.com for more information.

There will be a conference call at 4:45 p.m. (Eastern) on August 6, 2015, during which the Company’s management will discuss the financial results for the second quarter of 2015. To participate in the call, please call 866-868-9502, 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 13, 2015 by dialing 855-859-2056.

PAR TECHNOLOGY CORPORATIONCONSOLIDATED BALANCE SHEETS(in thousands, except share amounts)(Unaudited)
			June 30,				December 31,
Assets			2015				2014
Current assets:
Cash and cash equivalents		$	5,136			$	10,167
Accounts receivable-net			34,467				31,445
Inventories-net			24,936				25,922
Deferred income taxes			5,583				4,512
Other current assets			4,352				4,597
Total current assets			74,474				76,643
Property, plant and equipment - net			6,353				6,135
Deferred income taxes			10,948				11,357
Goodwill			17,167				17,167
Intangible assets - net			22,863				22,952
Other assets			3,676				3,043
Total Assets		$	135,481			$	137,297
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt		$	3,176			$	3,173
Borrowings under line of credit			3,276				5,000
Accounts payable			15,422				19,676
Accrued salaries and benefits			6,376				6,429
Accrued expenses			6,150				6,578
Customer deposits			4,078				2,345
Deferred service revenue			16,175				12,695
Income taxes payable			373				475
Total current liabilities			55,026				56,371
Long-term debt			2,528				2,566
Other long-term liabilities			8,765				8,847
Total liabilities			66,319				67,784
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; 17,250,209 and 17,274,708 sharesissued; 15,542,100 and 15,566,599 outstanding			345				346
Capital in excess of par value			45,066				44,854
Retained earnings			31,181				31,465
Accumulated other comprehensive loss			(1,594	)			(1,316	)
Treasury stock, at cost, 1,708,109 shares			(5,836	)			(5,836	)
Total shareholders’ equity			69,162				69,513
Total Liabilities and Shareholders’ Equity		$	135,481			$	137,297

PAR TECHNOLOGY CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)(Unaudited)
			For the threemonths endedJune 30,			For the threemonths endedJune 30,					For the sixmonths endedJune 30,			For the sixmonths endedJune 30,
			2015			2014					2015			2014
Net revenues:
Product		$	25,802		$	22,953				$	47,488		$	41,545
Service			15,929			14,920					30,031			29,170
Contract			21,561			19,529					45,397			43,228
			63,292			57,402					122,916			113,943
Costs of sales:
Product			18,172			15,815					33,013			28,718
Service			10,404			10,831					19,724			20,384
Contract			20,189			18,495					42,663			40,567
			48,765			45,141					95,400			89,669
Gross margin			14,527			12,261					27,516			24,274
Operating expenses:
Selling, general and administrative			9,253			9,513					18,317			18,776
Research and development			4,420			3,761					8,765			7,625
Acquisition amortization			249			-					498			-
			13,922			13,274					27,580			26,401
Operating income (loss):			605			(1,013	)				(64	)		(2,127	)
Other (expense) income, net			(10	)		406					(239	)		328
Interest expense			(85	)		(25	)				(171	)		(42	)
Income (loss) before (provision for) benefit from income taxes			510			(632	)				(474	)		(1,841	)
(Provision for) benefit from income taxes			(409	)		113					190			333
Net income (loss)		$	101		$	(519	)			$	(284	)	$	(1,508	)
Earnings (loss) per Share:
Basic		$	0.01		$	(0.03	)			$	(0.02	)	$	(0.10	)
Diluted		$	0.01		$	(0.03	)			$	(0.02	)	$	(0.10	)
Weighted average shares outstanding
Basic			15,584			15,612					15,541			15,473
Diluted			15,671			15,612					15,541			15,473

PAR TECHNOLOGY CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS(in thousands, except per share data)(Unaudited)
		For the three months ended June 30, 2015												For the three months ended June 30, 2014
		Reportedbasis (GAAP)				Adjustments				Comparablebasis (Non-GAAP)				Reported basis(GAAP)				Adjustments				Comparablebasis (Non-GAAP)
Net revenues		$	63,292				-				63,292			$	57,402				-				57,402
Costs of sales			48,765				85				48,680				45,141				-				45,141
Gross Margin			14,527				85				14,612				12,261				-				12,261
Operating Expenses
Selling, general and administrative			9,253				346				8,907				9,513				278				9,235
Research and development			4,420				13				4,407				3,761				-				3,761
Acquisition amortization			249				249				-				-								-
Total operating expenses			13,922				608				13,314				13,274				278				12,996
Operating income (loss)			605				693				1,298				(1,013	)			278				(735	)
Other (expense) income, net			(10	)			-				(10	)			406				-				406
Interest expense			(85	)			25				(60	)			(25	)			-				(25	)
Income (loss) before (provision for) benefit from income taxes			510				718				1,228				(632	)			278				(354	)
(Provision for) benefit from income taxes			(409	)			(266	)			(675	)			113				(95	)			18
Net income (loss)		$	101			$	452			$	553			$	(519	)		$	183			$	(336	)
Earnings (loss) per diluted share		$	0.01							$	0.04			$	(0.03	)						$	(0.02	)

The Company reports its financial results in accordance with GAAP, which refers financial information presented in accordance with generally accepted accounting principles in the United States. 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 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.

During the second quarter of 2015, the Company recorded severance and other related charges of $416,000, of which $85,000 is included in cost of sales, $13,000 is included in research and development and $318,000 is included in selling, general and administrative. Also included within selling, general and administrative is equity based compensation charges of $28,000. Lastly, related to the acquisition of Brink, the Company recognized amortization of acquired intangible assets of $249,000 and accreted interest of $25,000. During the second quarter of 2014, the Company recorded a charge of $278,000 for equity based compensation expense. The aforementioned charges, along with an associated adjustment to the Company’s provision for income taxes have been excluded in the Company’s non-GAAP measures because they are considered non-recurring in nature and/or are quantitatively and qualitatively different from the Company’s core operations during any particular period.

PAR TECHNOLOGY CORPORATIONRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS(in thousands, except per share data)(Unaudited)
		For the six months ended June 30, 2015												For the six months ended June 30, 2014
		Reportedbasis (GAAP)				Adjustments				Comparablebasis (Non-GAAP)				Reported basis(GAAP)				Adjustments				Comparablebasis (Non-GAAP)
Net revenues		$	122,916				-			$	122,916			$	113,943				-			$	113,943
Costs of sales			95,400				151				95,249				89,669				-				89,669
Gross Margin			27,516				151				27,667				24,274				-				24,274
Operating Expenses
Selling, general and administrative			18,317				706				17,611				18,776				802				17,974
Research and development			8,765				13				8,752				7,625								7,625
Acquisition amortization			498				498				-				-								-
Total operating expenses			27,580				1,217				26,363				26,401				802				25,599
Operating income (loss)			(64	)			1,368				1,304				(2,127	)			802				(1,325	)
Other (expense) income, net			(239	)			-				(239	)			328				-				328
Interest expense			(171	)			51				(120	)			(42	)			-				(42	)
Income (loss) before (provision for) benefit from income taxes			(474	)			1,419				945				(1,841	)			802				(1,039	)
(Provision for) benefit from income taxes			190				(525	)			(335	)			333				(273	)			60
Net income (loss)		$	(284	)		$	894			$	610			$	(1,508	)		$	529			$	(979	)
Earnings (loss) per diluted share		$	(0.02	)						$	0.04			$	(0.10	)						$	(0.06	)

During the six months ended June 30, 2015, the Company recorded severance and other related charges of $597,000, of which $151,000 is included in cost of sales, $13,000 is included in research and development and $433,000 is included in selling, general and administrative. Also included within selling, general and administrative is equity based compensation charges of $273,000. Lastly, related to the acquisition of Brink, the Company recognized amortization of acquired intangible assets of $498,000 and accreted interest of $51,000. During the six months ended June 30, 2014, the Company recorded a charge of $802,000 for equity based compensation expense. The aforementioned charges, along with an associated adjustment to the Company’s provision for income taxes have been excluded in the Company’s non-GAAP measures because they are considered non-recurring in nature and/or are quantitatively and qualitatively different from the Company’s core operations during any particular period.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150806006314/en/

PAR Technology Corporation
Christopher R. Byrnes, 315-738-0600 ext. 6226
[email protected]
www.partech.com

Source: PAR Technology Corporation

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