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PAR Technology Corporation Announces 2012 Fourth Quarter and Year End Results from Continuing Operations
[February 14, 2013]

PAR Technology Corporation Announces 2012 Fourth Quarter and Year End Results from Continuing Operations

NEW HARTFORD, N.Y. --(Business Wire)--

PAR Technology Corporation (NYSE: PAR) today announced results for the fourth quarter and year ended December 31, 2012. The Company reported fourth quarter revenues of $66.4 million and a net loss from continuing operations of $3.6 million or $0.24 loss per share. This compares with prior year fourth quarter revenue of $60.1 million and net income from continuing operations of $1.8 million or $0.12 per diluted share. On a non-GAAP basis, the Company's net income from continuing operations for the fourth quarter was $1.2 million or $0.08 per diluted share. These non-GAAP results exclude special charges totaling $7.6 million during the fourth quarter primarily related to the Company's restructuring of its Hospitality product portfolio, as well as certain legal costs.

For fiscal year 2012, PAR reported total revenues from continuing operations of $245.2 million, a 7% increase from the $229.4 million reported for fiscal year 2011. The Company reported GAAP net loss from continuing operations of $1.8 million or $0.12 loss per share, compared to GAAP net loss from continuing operations of $13.4 million or $0.89 loss per share for fiscal year 2011. On a non-GAAP basis, excluding special charges, net income from continuing operations for the year was $3.0 million or $0.20 per diluted share, compared to net income from continuing operations of $5.5 million or $0.36 per diluted share for fiscal year 2011, also on a non-GAAP basis. A reconciliation and description of non-GAAP financial measures to their comparable GAAP financial measures are included in the tables following this news release.

"Even with a known reduction of $18 million in volume from our largest customer, consolidated revenues grew 7% for the year 2012. This was despite the fact the revenue streams associated with our new ATRIO® software and newly released hardware platforms are in their infancy," commented Paul B. Domorski, Chairman and Chief Executive Officer of PAR Technology Corporation. "Most of the charge in the quarter was non-cash and related to the reduction in the capitalized value of certain software development costs, enabling us to redirect resources to areas that will have the greatest impact on our results."

Domorski concluded, "We continue to enhance our ATRIO, SureCheck™ and PixelPoint® software solutions and have redesigned all of our hardware product offerings. We expect these efforts will provide new opportunities in 2013 and beyond. Our Government segment exceeded expectations in 2012 and we anticipate continued growth. As a Company, we will continue to apply a disciplined approach, investing only in those areas that will differentiate our Company going forward."

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 February 14, 2013, during which the Company's management will discuss the financial results for the fourth quarter of 2012. If you would like to participate in this conference please call 866-730-5764 approximately 10 minutes before the call is scheduled to begin and use the PAR pass code 62502630. 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 February 21, 2013 or dial 888-286-8010 and use the Pass Code number 33391322 until February 21, 2013 as well.



           
 

PAR TECHNOLOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

 (in thousands, except share amounts)

 
December 31,
Assets 2012 2011
Current assets:
Cash and cash equivalents $ 19,475 $ 7,742
Accounts receivable-net 29,890 30,680
Inventories-net 26,172 25,260
Deferred income taxes 11,184 10,240
Other current assets 3,236 3,088
Escrow receivable   828     -  

Total current assets

90,785 77,010
Property, plant and equipment - net 5,857 5,259
Deferred income taxes 6,133 5,605
Goodwill 6,852 6,852
Intangible assets - net 11,747 15,888
Other assets 2,391 2,147
Assets of discontinued operations   -     3,182  
Total Assets $ 123,765   $ 115,943  
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt $ 159 $ 1,494
Accounts payable 21,216 15,773
Accrued salaries and benefits 6,397 7,002
Accrued expenses 4,467 2,609
Customer deposits 1,380 1,137
Deferred service revenue 12,522 10,412
Income taxes payable   547     138  
Total current liabilities 46,688 38,565
Long-term debt 1,084 1,249
Other long-term liabilities 3,030 2,837
Liabilities of discontinued operations 141   925  
Total liabilities 50,943 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;
17,038,405 and 16,863,868 shares issued;
15,330,718 and 15,156,584 outstanding 341 337
Capital in excess of par value 43,661 42,990
Retained earnings 34,758 35,073
Accumulated other comprehensive loss (104 ) (201 )
Treasury stock, at cost, 1,707,687 and 1,707,284 shares   (5,834 )   (5,832 )
Total shareholders' equity   72,822     72,367  
Total Liabilities and Shareholders' Equity $ 123,765   $ 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 ended For the year ended
December 31, December 31,
2012     2011 2012     2011
Net revenues:
Product $ 27,872 $ 22,121 $ 90,524 $ 90,998
Service 18,031 17,890 66,144 69,484
Contract   20,526     20,105     88,491     68,941  
  66,429     60,116     245,159     229,423  
 
Costs of sales:
Product 25,601 14,991 65,300 57,878
Service 12,260 12,561 46,073 56,736
Contract   18,690     18,535     82,841     64,347  
  56,551     46,087     194,214     178,961  
Gross margin   9,878     14,029     50,945     50,462  
Operating expenses:
Selling, general and administrative 11,632 8,044 40,476 35,774
Research and development 3,750 3,369 13,697 13,797
Impairment of goodwill and intangible assets 300 - 300 20,843
Amortization of identifiable intangible assets   14     173     455     840  
  15,696     11,586     54,928     71,254  
 
Operating income (loss) from continuing operations (5,818 ) 2,443 (3,983 ) (20,792 )
Other income, net 436 311 876 203
Interest expense   (5 )   (48 )   (69 )   (211 )
 
Income (loss) from continuing operations before provision for income taxes (5,387 ) 2,706 (3,176 ) (20,800 )
(Provision) benefit for income taxes   1,797     (878 )   1,414     7,440  
Income (loss) from continuing operations (3,590 ) 1,828 (1,762 ) (13,360 )
Discontinued operations
Income (loss) on discontinued operations (net of tax)   (23 )   (1,119 )   1,447     (2,172 )
Net income (loss) $ (3,613 ) $ 709   $ (315 ) $ (15,532 )
Basic:
Income (loss) from continuing operations (0.24 ) 0.12 (0.12 ) (0.89 )
Income (loss) from discontinued operations   (.00 )   (0.07 )   0.10     (0.15 )
Net income (loss) $ (0.24 ) $ 0.05   $ (0.02 ) $ (1.04 )
Diluted:
Income (loss) from continuing operations (0.24 ) 0.12 (0.12 ) (0.89 )
Income (loss) from discontinued operations   (.00 )   (0.07 )   0.10     (0.15 )
Net income (loss) $ (0.24 ) $ 0.05   $ (0.02 ) $ (1.04 )
Weighted average shares outstanding
Basic   15,145     15,047     15,115     15,000  
Diluted   15,145     15,132     15,115     15,000  
 
 
 
 
PAR Technology Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
                       
For the three months ended December 31, 2012
Reported basis (GAAP) Adjustments Comparable basis (Non-GAAP)

For the three
months ended
December 31,
2011

 
 
Net revenues $ 66,429 $ - $ 66,429 $ 60,116
Costs of sales   56,551     5,303     51,248     46,087  
Gross Margin 9,878 5,303 15,181 14,029
 
Operating Expenses
Selling, general and administrative 11,632 2,023 9,609 8,044
Research and development 3,750 - 3,750 3,369
Impairment of goodwill and intangible assets 300 300 - -
Amortization of identifiable intangible assets   14     -     14     173  

Total operating expenses

15,696 2,323 13,373 11,586
Operating income (loss) from continuing operations (5,818 ) 7,626 1,808 2,443
Other income (expense), net 436 - 436 311
Interest expense   (5 )   -     (5 )   (48 )
Income (loss) from continuing operations before provision for income taxes (5,387 ) 7,626 2,239 2,706
(Provision)benefit for income taxes   1,797     (2,838 )   (1,041 )   (878 )
Income (loss) from continuing operations   (3,590 )   4,788     1,198     1,828  
Income (loss) from discontinued operations (net of tax)   (23 )   (23 )   (1,119 )
Net Income (loss) $ (3,613 ) $ 1,175   $ 709  
Income (loss) per diluted share - continuing operations $ (0.24 ) $ 0.08   $ 0.12  
Income (loss) per diluted share - discontinuing operations $ (0.00 ) $ (0.00 ) $ (0.07 )
Income (loss) per diluted share - (net income) $ (0.24 ) $ 0.08   $ (0.05 )
 
 

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 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.

During the fourth quarter, the Company recorded total charges of $7.6 million. The most significant of the charges was $5.6 million (of which $5.3 million was non-cash) to reduce the net book value of an internally developed capitalized software asset in conjunction with the Company's strategic initiative to streamline its Hospitality product portfolio. In addition to this charge, the Company incurred legal costs of $1.5 million associated with an intellectual property matter which has since been settled. The remaining charges totaling $0.5 million are attributable to a fair value adjustment on an indefinite lived intangible asset, as well as severance accruals, and other costs related to the cancellation of certain office leases. 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 are quantitatively and qualitatively different from the Company's core operations during any particular period.

       
 
PAR Technology Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
                   
For the year ended December 31, 2012 For the year ended December 31, 2011

Reported
basis
(GAAP)

    Adjustments    

Comparable
basis (Non-
GAAP)

Reported
basis
(GAAP)

    Adjustments    

Comparable
basis (Non-
GAAP)

 
Net revenues $ 245,159 $ - $ 245,159 $ 229,423 $ - $ 229,423
 
Costs of sales   194,214     5,303     188,911     178,961     7,732     171,229  
Gross Margin 50,945 5,303 56,248 50,462 7,732 58,194
 
Operating Expenses
Selling, general and administrative 40,476 2,023 38,453 35,774 595 35,179
Research and development 13,697 - 13,697 13,797 - 13,797
 
Impairment of goodwill and intangible assets 300 300 - 20,843 20,843 -
 
Amortization of identifiable intangible assets   455     -     455     840     -     840  

Total operating expenses

54,928 2,323 52,605 71,254 21,438 49,816
 
Operating income (loss) from continuing operations (3,983 ) 7,626 3,643 (20,792 ) 29,170 8,378
Other income (expense), net 876 - 876 203 253 456
Interest expense   (69 )   -     (69 )   (211 )   -     (211 )
 
Income (loss) from continuing operations before provision for income taxes (3,176 ) 7,626 4,450 (20,800 ) 29,423 8,623
(Provision) benefit for income taxes   1,414     (2,838 )   (1,424 )   7,440     (10,568 )   (3,128 )
 
Income (loss) from continuing operations   (1,762 )   4,788     3,026     (13,360 )   18,855     5,495  
Income (loss) from discontinued operations (net of tax)   1,447     1,447     (2,172 )   (2,172 )
 
Net Income (loss) $ (315 ) $ 4,473   $ (15,532 ) $ 3,323  
 
Income (loss) per diluted share - continuing operations $ (0.12 ) $ 0.20   $ (0.89 ) $ 0.36  
Income (loss) per diluted share - discontinuing operations $ 0.10   $ 0.10   $ (0.15 ) $ (0.14 )
Income (loss) per diluted share - (net income) $ (0.02 ) $ 0.29   $ (1.04 ) $ 0.22  
 
 

For the year ended December 31, 2012, the Company recorded total charges of $7.6 million, all of which were incurred in the fourth quarter ended December 31, 2012. The most significant of the charges was $5.6 million (of which $5.3 million was non-cash) to reduce the net book value of an internally developed capitalized software asset in conjunction with the Company's strategic initiative to streamline its Hospitality product portfolio. In addition to this charge, the Company incurred legal costs of $1.5 million associated with an intellectual property matter which has since been settled. The remaining charges totaling $0.5 million are attributable to a fair value adjustment on an indefinite lived intangible asset, as well as severance accruals and other costs related to the cancellation of certain office leases. These 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 are quantitatively and qualitatively different from the Company's core operations during any particular period.

For the year ended December 31, 2011, the Company recorded total charges of $29.4 million primarily related to the 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 consolidation of facilities. These 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 are quantitatively and qualitatively different from the Company's core operations during any particular period.


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