PAR Technology Corporation Announces 2012 Third Quarter Results

  PAR Technology Corporation Announces 2012 Third Quarter Results

Business Wire

NEW HARTFORD, N.Y. -- November 05, 2012

PAR Technology Corporation (NYSE: 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            341             337
                outstanding
     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         (5,834   )     (5,832  )
     1,707,284 shares
                Total shareholders’ equity          76,190        72,367  
                Total Liabilities and             $  121,976     $  115,943 
                Shareholders’ Equity

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        9,410        8,745        28,844        27,730
     and administrative
     Research and            3,309        3,363        9,947         10,428
     development
     Impairment of
     goodwill and            -            -            -             20,843
     intangible assets
     Amortization of
     identifiable           138        257        441         667     
     intangible assets
                            12,857     12,365     39,232      59,668  
     Operating income
     (loss) from             1,155        2,720        1,835         (23,237 )
     continuing
     operations
     Other income            233          23           440           (106    )
     (expense), net
     Interest expense       (22    )    (48    )    (64     )    (163    )
Income (loss) from
continuing operations        1,366        2,695        2,211         (23,506 )
before provision for
income taxes
(Provision) benefit for     (62    )    (1,099 )    (383    )    8,317   
income taxes
     Income (loss) from
     continuing              1,304        1,596        1,828         (15,189 )
     operations
Discontinued operations
     Income (loss) on
     discontinued           50         (394   )    1,470       (1,053  )
     operations (net of
     tax)
Net income (loss)          $ 1,354     $ 1,202     $ 3,298      $ (16,242 )
Basic Earnings per
Share:
     Income (loss) from
     continuing              .09          .11          .12           (1.01   )
     operations
     Income (loss) from
     discontinued           .00        (.03   )    .10         (.07    )
     operations
     Net income (loss)     $ .09       $ .08       $ .22        $ (1.08   )
Diluted Earnings per
Share:
     Income (loss) from
     continuing              .09          .11          .12           (1.01   )
     operations
     Income (loss) from
     discontinued           .00        (.03   )    .10         (.07    )
     operations
     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
                                      Reported                     Comparable
                      months ended
                                      basis         Adjustments  basis
                      September 30,
                                      (GAAP)                       (Non-GAAP)
                      2012
                                                                   
Net revenues          $  178,730      $  169,307       -           $ 169,307
Costs of sales          137,663       132,876     7,732       125,144 
Gross Margin             41,067          36,431        7,732         44,163
                                                                   
Operating Expenses
    Selling, general
    and                  28,844          27,730        595           27,135
    administrative
    Research and         9,947           10,428        -             10,428
    development
    Impairment of
    goodwill and         -               20,843        20,843        -
    intangible assets
    Amortization of
    identifiable        441           667         -           667     
    intangible assets
          Total
          operating      39,232          59,668        21,438        38,230
          expenses
                                                                   
Operating income
(loss) from              1,835           (23,237 )     29,170        5,933
continuing operations
Other income             440             (106    )     253           147
(expense), net
Interest expense        (64      )     (163    )    -           (163    )
Income (loss) from
continuing operations    2,211           (23,506 )     29,423        5,917
before provision for
income taxes
(Provision)benefit      (383     )     8,317       (10,568 )    (2,251  )
for income taxes
Income (loss) from    $  1,828       $  (15,189 )   $ 18,855     $ 3,666   
continuing operations
Income (loss) per
diluted share from    $  0.22        $  (1.01   )                 $ 0.24    
continuing operations
                                                                             

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 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.

For the nine months ended September 30, 2011, the Company recorded total
charges of $29.4 million primarily related to an 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 the consolidation of some of its facilities. The aforementioned
charges have been recorded net of tax benefit of $10.6 million and 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.

These charges did not have any impact on the Company’s financial results for
the three months ended September 30, 2011.

Contact:

PAR Technology Corporation
Christopher R. Byrnes, 315-738-0600  ext. 6226
cbyrnes@partech.com
www.partech.com
 
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