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PAR Technology Corporation Announces 2019 Fourth Quarter and Full Year ResultsPAR Technology Corporation (NYSE: PAR) ("Company" or "PAR") today announced results for its fourth quarter and full year ended December 31, 2019. Summary of Fiscal 2019 Fourth Quarter Financial Results
Summary of Full Year Financial Results
A reconciliation and description of non-GAAP financial measures to corresponding GAAP financial measures are included in the tables at the end of this press release. "Our fourth quarter numbers reflect a growing company amidst a continued transition. We are moving away from a software license and hardware sales model to a subscription model that provides recurring revenues, offers considerable customer benefits and will produce solid profitability for our Company in the long term. We are building an industry leading restaurant management platform by accelerating both our organic and inorganic growth, with a constant focus on long term success," commented Savneet Singh, PAR Technology CEO & President. "We are experiencing strong demand for our SaaS solutions, and are excited about the successful integration and performance of recently acquired businesses along with our recently introduced payment services solution. We are carefully monitoring the market impacts surrounding the recent Coronavirus outbreaks and are taking steps to mitigate near-term supply chain issues and challenges for our customers. We continue to prioritize the health and safety of our employees and have strengthened our oversight given the current concerns."
Highlights of the Fourth Quarter 2019:
Conference Call. There will be a conference call at 4:30 p.m. (Eastern) on March 12, 2020, during which the Company's management will discuss the financial results for its fourth quarter and full year ended December 31, 2019. To participate in the call, please call 844-419-5412, 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 the Company's website at www.partech.com/about/news. Alternatively, listeners may access an archived version of the presentation call after 7:30 p.m. on March 12, 2020 through March 19, 2020 by dialing 855-859-2056 and using conference ID 6782657. About PAR Technology Corporation. PAR is a customer success-driven, global restaurant/retail technology company. PAR has over 40 years of experience and 100,000+ restaurants in more than 110 countries that are utilizing its point of sale hardware and software. PAR's Brink integration ecosystem enables quick service, fast casual, table service, and cloud restaurants to improve their operational efficiency by combining its cloud-based POS software with the world's leading restaurant technology platforms. PAR's Government segment is a leader in providing computer-based system design, engineering and technical services to the Department of Defense and various federal agencies. PAR Technology Corporation's stock is traded on the New York Stock Exchange under the symbol PAR. For more information, visit www.partech.com or connect with PAR on Facebook at www.facebook.com/parpointofsale or Twitter at www.twitter.com/Par_tech. Forward-Looking Statements. This press release contains "forward-looking statements" within the meaning of Section 21E of the Exchange Act, Section 27A of the Securities Act, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of our future operations, financial condition, business strategies and prospects. Forward-looking statements are generally identified by words such as "anticipate," "believe," "belief," "continue," "could," "expect," "estimate," "intend," "may," "opportunity," "plan," "should," "will," "would," "will likely result" and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those expressed in, or implied by, the forward-looking statements, including: risks related to delays in new product development and/or product introduction; changes in customer base, or in product and service demands from our customers, particularly as to those restaurant chain customers and the U.S. Department of Defense that represent a significant portion of our revenue; risks associated with the internal investigation into conduct at our China and Singapore offices, including sanctions and fines that may be imposed by China and Singapore authorities; our ability to successfully integrate our recent acquisitions and realize expected synergies therefrom; and our ability to execute our business plan and grow our Brink business. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our filings with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.
About Non-GAAP Financial Measures The Company reports its financial results in accordance with GAAP. However, non-GAAP adjusted financial measures, as set forth in the reconciliation table above, are provided because management uses these non-GAAP financial measures in evaluating the results of the Company's continuing operations and believes this information provides investors supplemental insight into underlying business trends and operating results. These non-GAAP financial 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 financial 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 equity based compensation, divestiture related expenditures, expense related to the internal investigation into conduct in China and Singapore (the "China/Singapore internal investigation"), and other non-recurring charges that may not be indicative of the Company's financial performance. Management believes that adjusting its operating expenses, operating loss, net loss and diluted loss per share to remove non-recurring charges provides a useful perspective with respect to the Company's operating results and provides supplemental information to both management and investors by removing items that are difficult to predict and are often unanticipated. While the Company believes the adjustments provide a useful comparison, the reconciliations of non-GAAP financial measures to corresponding GAAP measures should be carefully evaluated. During the fourth quarter of 2019, the Company completed the sale of substantially all of the assets relating to the SureCheck product group within the Company's Restaurant/Retail segment. The Company made final adjustments of ($363,000) related to the sale, this represents adjustments of ($289,000) for inventory and ($74,000) for costs of service. The Company recorded approximately $159,000 of expenses related to the Company's continued cooperation with the Singapore authorities in connection with the findings of the completed China/Singapore internal investigation. Additionally, approximately $869,000 of equity based compensation charges were recorded during the fourth quarter of 2019. The Company recognized amortization of acquired intangible assets of approximately $242,000 related to the Company's 2014 acquisition of Brink Software, Inc. (the "Brink Acquisition"), $171,000 related to the Company's 2019 acquisition of assets of 3M Company's Drive-Thru Communications Systems business (the "Drive-Thru Asset Acquisition") and $82,000 related to the Company's acquisition of 100% of the limited liability company interests of AccSys, LLC ("Restaurant Magic Acquisition"). The provision for income tax was based on 24%, or approximately $452,000 to reflect the tax impact of non-GAAP adjustments. Further, the Company recognized approximately $724,000 accretion of interest related to the Company's 4.5% Convertible Senior Notes due 2024 (the "Notes"). During the fourth quarter of 2018, the Company recorded a one-time reserve of $1,020,000 on hardware inventory as well as a one-time impairment charge of $1,586,000 related to SureCheck. The Company also recorded $218,000 of selling, general and administrative expenses related to the China/Singapore internal investigation. Additionally, $285,000 of equity based compensation charges were recorded during the fourth quarter of 2018. The Company recognized amortization of acquired intangible assets of $242,000 and a $50,000 reduction in the contingent consideration payable related to the Brink Acquisition. The benefit from income tax was based on 24%, or $792,000, to reflect the tax impact from non-GAAP adjustments.
During the year ended December 31, 2019, the Company recorded $1,213,000 of expenses related to the sale of the SureCheck product group, this represents $509,000 related to inventory reserve and $704,000 in costs of service related to impairment of intangible assets for the SureCheck product group. The Company recorded $554,000 of expenses related to the China/Singapore internal investigation and severance expenses of $568,000 of which $143,000 were recorded in cost of sales and $317,000 in selling, general and administrative expenses and $108,000 in research and development expenses. Additionally, $2,706,000 of equity based compensation charges were recorded during 2019. The Company recognized amortization of acquired intangible assets of approximately $966,000 related to the Brink Acquisition, $171,000 related to the Drive-Thru Asset Acquisition and $82,000 related to the Restaurant Magic Acquisition. The provision for income tax was based on a 24%, or $1,983,000 to reflect the tax impact of non-GAAP adjustments as well as a $4,065,000 tax benefit relating to the sale of the Notes. Further, the Company recognized $2,003,000 accretion of interest related to the Notes. During the year ended December 31, 2018, the Company recorded a one-time reserve of $1,020,000 on hardware inventory as well as a one-time impairment charge of $1,586,000 related to SureCheck. The Company also recorded $1,134,000 of selling, general and administrative expenses related to the China/Singapore internal investigation. Additionally, $1,039,000 of equity based compensation charges were recorded during the year ended December 31, 2018. There were $234,000 of severance expenses recorded in the year ended December 31, 2018. The Company recognized amortization of acquired intangible assets of $966,000 related to the Brink Acquisition as well as a $450,000 reduction in the amount payable under contingent consideration related to that acquisition. The Company recorded a one-time $14,894,000 valuation allowance to reduce the carrying value of its deferred tax assets pursuant to FASB ASC 740. The valuation allowance was offset by $1.3 million or 24% to reflect the tax impact of non-GAAP adjustments. View source version on businesswire.com: https://www.businesswire.com/news/home/20200312005797/en/ |
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