TMCnet News
PAR Technology Corporation Announces 2016 Fourth Quarter & Full Year 2016 ResultsPAR Technology Corporation (NYSE:PAR) today announced its results of continuing operations for its fourth quarter and full year ended December 31, 2016. Summary of Fiscal 2016 Fourth Quarter and Year End Financial Results Fourth Quarter 2016
Full Year 2016
A reconciliation and description of non-GAAP financial measures to their comparable GAAP financial measures are included in the tables at the end of this press release. "The fourth quarter was a strong close for 2016, with top line growth of 6% year-over-year. Although offset by reduced Government contract revenues, our fourth quarter performance was driven by higher demand for PAR hardware solutions from Tier 1 customers in our Restaurant and Retail segment and expanded deployments of our Brink cloud software solution. I am pleased to report we ended 2016 by achieving our target of deployed Brink sites," commented Karen E. Sammon, PAR Technology Corporation President and Chief Executive Officer. "Our financial results reflect the progress we have made executing to our strategy and focusing on operational efficiency within our businesses. Our ability to grow revenues highlights the strength of our brand and the capabilities of our product and service offerings." Sammon continued, "With our focus on delivering innovation and customer success, and with operational adjustments, we continue to make necessary changes and drive execution that will position us to capitalize on the long-term growth opportunities for our Company." Internal Investigation; Update. As previously disclosed, the Company is conducting an internal investigation into import/export and sales documentation activities at our China and Singapore offices discovered by management during the third quarter of 2016. The investigation, which is not complete, is being conducted under the oversight of our Audit Committee, with the assistance of outside counsel, and is focused on compliance with certain of our policies, including our Code of Business Conduct and Ethics, and the U.S. Foreign Corrupt Practices Act, or FCPA, and other applicable laws. The Company has voluntarily notified the U.S. Securities and Exchange Commission ("SEC") and the U.S. Department of Justice ("DOJ") of these matters, and intends to fully cooperate with both agencies. During the three months ended December 31, 2016, the Company recorded $1,323,000 of expenses relating to the investigation, including expenses of outside legal counsel and forensic accountants. While the investigation is substantially complete, the Company expects to incur additional expenses relating to its completion, as well as in connection with remedial measures being taken and to be taken by the Company to correct the material weaknesses identified in the Company's internal control over financial reporting. We are presently unable to predict what, if any, actions the SEC, the DOJ, or other governmental agencies (including foreign governmental agencies) will take. The SEC, DOJ, and other governmental authorities have a broad range of civil and criminal sanctions including, injunctive relief, disgorgement, fines, penalties, modifications to our business practices, including the termination or modification of existing business relationships, the imposition of compliance programs and the retention of a monitor to oversee our future compliance. We cannot reasonably estimate the potential liability, if any, to the Company arising out of the China and Singapore matters. However, the imposition of sanctions, fines or remedial measures could have a material adverse effect on the Company's business, prospects, reputation, financial condition, liquidity, results of operations or cash flows Conference Call. There will be a conference call at 10:00 a.m. (Eastern) on March 13, 2017, during which the Company's management will discuss the financial results for the fourth quarter of 2016. 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 after 1:00 p.m. on March 13, 2017 through March 20, 2017 by dialing 855-859-2056 and using conference ID 82600661. About PAR Technology Corporation. PAR Technology Corporation's stock is traded on the New York Stock Exchange under the symbol "PAR". PAR's Restaurant and Retail segment has been a leading provider of restaurant and retail technology for more than 35 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. 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. For more information visit http://www.partech.com or connect with us on Facebook and Twitter. Forward-Looking Statements. This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements appear throughout this press release, including express or implied forward-looking statements relating to our expectations regarding anticipated financial performance, customer and product opportunities, and assumptions as to future events. Forward-looking statements are subject to a variety of risks and uncertainties, many of which are beyond the Company's control, that could cause actual results to differ materially from those contemplated in these statements. Factors that could cause actual results to differ materially, include delays in new product development and/or product introduction, changes in customer product and service demands, concentration of revenues from a small group of customers, product and service competition, and the other factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.
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 because management uses these non-GAAP measures in evaluating the results of the continuing operations of the Company and believes this information provides investors supplemental insight into underlying business trends and operating results. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. In addition, these non-GAAP measures should be read in conjunction with the Company's financial statements prepared in accordance with GAAP. The Company's results of operations are impacted by certain non-recurring charges, including severance charges from restructuring business operations, equity based compensation, acquisition related expenditures, and other non-recurring charges that may not be indicative of the Company's financial performance. Management believes that adjusting its operating expenses, operating income, net earnings and diluted earnings per share to remove non-recurring charges provides a useful perspective with respect to our operating results and provides supplemental information to both management and investors by removing items that are difficult to predict and are often unanticipated. PAR believes the adjustments provide a useful comparison on a year-over-year basis. Included within selling, general and administrative expenses, as referenced above under "Internal Investigation; Update", during the fourth quarter of 2016, the Company recorded $1,323,000 of expenses related to the Company's internal investigation. In addition, $123,000 expenses related to the implementation of the new ERP system, and $72,000 of equity based compensation charges were recorded during the fourth quarter of 2016. Included within costs of sales was $517,000 of accelerated amortization related to the Company's discontinued development of a software module. Lastly, the Company recognized amortization of acquired intangible assets of $242,000 related to the Company's acquisition of Brink. Offsetting these charges, the Company recorded an insurance recovery of $771,000, relating to the Company's former chief financial officer's unauthorized transfers of Company funds, and a $1,100,000 decrease to a contingent consideration liability related to the Brink acquisition. During the fourth quarter of 2015, the Company recognized amortization of acquired intangible assets of $241,000 and accreted interest of $26,000 related to the acquisition of Brink. Additionally, the Company recorded a $776,000 write-off related to the unauthorized transfer of Company funds. The unauthorized transfers occurred during the period between September 25, 2015 and November 6, 2015. As of December 31, 2015, the Company was uncertain of the collectability relating to these funds and as a result, reduced its fair value to zero.
During the year ended December 31, 2016, the Company recorded professional services charges of $2,789,000, of which $1,466,000 were for investigation costs related to the Company's former chief financial officer's unauthorized transfers of Company funds, and $1,323,000 were related to the Company's internal investigation of conduct at its China and Singapore offices. Additionally, the Company recorded charges of $789,000, as a write-off, related to the Company's previous human capital management system, $631,000 related to the implementation of the new ERP system and $469,000 related to equity based compensation charges, included in selling, general and administrative. Additionally, during fiscal 2016, the Company recorded $517,000 of accelerated amortization into to cost of service, which is related to the Company's discontinued development of a software module. Lastly, the Company recognized amortization of acquired intangible assets of $966,000 related to the acquisition of Brink, and accreted interest of $78,000. Offsetting these charges, the Company recorded an insurance recovery of $771,000 relating to the unauthorized transfers of Company funds by its former chief financial officer, and a $1,100,000 decrease to a contingent consideration liability related to the 2014 acquisition of Brink. During the year ended December 31, 2015, the Company recorded severance and other related charges of $797,000, of which $151,000 is included in cost of sales, $13,000 is included in research and development, and $633,000 is included in selling, general and administrative. Also included within selling, general and administrative, is equity based compensation charges of $487,000. Lastly, the Company recognized amortization of acquired intangible assets of $987,000 related to the acquisition of Brink, and accreted interest of $103,000. Additionally, the Company recorded a $776,000 write-off related to its former chief financial officer's unauthorized transfer of Company funds. The unauthorized transfers occurred during the period between September 25, 2015 and November 6, 2015. As of December 31, 2015, the Company was uncertain of the collectability relating to these funds and as a result, reduced its fair value to zero.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170313005387/en/ |