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

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

Business Wire

NEW HARTFORD, N.Y. -- February 14, 2013

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              (5,834  )      (5,832  )
1,707,284 shares
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          For the year ended
                           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                  11,632         8,044          40,476          35,774
administrative
Research and                 3,750          3,369          13,697          13,797
development
Impairment of
goodwill and                 300            -              300             20,843
intangible
assets
Amortization
of
identifiable                14           173          455           840     
intangible
assets
                            15,696       11,586       54,928        71,254  
                                                                         
Operating
income (loss)
from                         (5,818 )       2,443          (3,983  )       (20,792 )
continuing
operations
Other income,                436            311            876             203
net
Interest                    (5     )      (48    )      (69     )      (211    )
expense
                                                                         
Income (loss)
from
continuing
operations                   (5,387 )       2,706          (3,176  )       (20,800 )
before
provision for
income taxes
(Provision)
benefit for                 1,797        (878   )      1,414         7,440   
income taxes
Income (loss)
from                         (3,590 )       1,828          (1,762  )       (13,360 )
continuing
operations
Discontinued
operations
Income (loss)
on
discontinued                (23    )      (1,119 )      1,447         (2,172  )
operations
(net of tax)
Net income                 $ (3,613 )     $ 709         $ (315    )     $ (15,532 )
(loss)
Basic:
Income (loss)
from                         (0.24  )       0.12           (0.12   )       (0.89   )
continuing
operations
Income (loss)
from                        (.00   )      (0.07  )      0.10          (0.15   )
discontinued
operations
Net income                 $ (0.24  )     $ 0.05        $ (0.02   )     $ (1.04   )
(loss)
Diluted:
Income (loss)
from                         (0.24  )       0.12           (0.12   )       (0.89   )
continuing
operations
Income (loss)
from                        (.00   )      (0.07  )      0.10          (0.15   )
discontinued
operations
Net income                 $ (0.24  )     $ 0.05        $ (0.02   )     $ (1.04   )
(loss)
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
                                                                             For the
                                                                             three
                             Reported                         Comparable     months
                             basis            Adjustments     basis          ended    
                             (GAAP)                           (Non-GAAP)     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               11,632            2,023          9,609          8,044
and administrative
Research and                   3,750             -              3,750          3,369
development
Impairment of
goodwill and                   300               300            -              -
intangible assets
Amortization of
identifiable                  14              -            14           173    
intangible assets
Total operating                15,696            2,323          13,373         11,586
expenses
Operating income
(loss) from                    (5,818 )          7,626          1,808          2,443
continuing
operations
Other income                   436               -              436            311
(expense), net
Interest expense              (5     )         -            (5     )      (48    )
Income (loss) from
continuing
operations before              (5,387 )          7,626          2,239          2,706
provision for
income taxes
(Provision)benefit            1,797           (2,838 )      (1,041 )      (878   )
for income taxes
Income (loss) from
continuing                    (3,590 )         4,788        1,198        1,828  
operations
Income (loss) from
discontinued                  (23    )                        (23    )      (1,119 )
operations (net of
tax)
Net Income (loss)            $ (3,613 )                       $ 1,175       $ 709    
Income (loss) per
diluted share –              $ (0.24  )                       $ 0.08        $ 0.12   
continuing
operations
Income (loss) per
diluted share –              $ (0.00  )                       $ (0.00  )     $ (0.07  )
discontinuing
operations
Income (loss) per
diluted share –              $ (0.24  )                       $ 0.08        $ (0.05  )
(net income)
                                                                                      
                                                                                      

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                        Comparable      Reported                        Comparable
                       basis         Adjustments   basis (Non-     basis         Adjustments   basis (Non-
                       (GAAP)                          GAAP)           (GAAP)                          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              40,476           2,023          38,453          35,774          595             35,179
administrative
Research and             13,697           -              13,697          13,797          -               13,797
development
                                                                                                                 
Impairment of
goodwill and             300              300            -               20,843          20,843          -
intangible
assets
                                                                                                                 
Amortization
of
identifiable            455            -            455           840           -             840     
intangible
assets
Total
operating                54,928           2,323          52,605          71,254          21,438          49,816
expenses
                                                                                                                 
Operating
income (loss)
from                     (3,983  )        7,626          3,643           (20,792 )       29,170          8,378
continuing
operations
Other income             876              -              876             203             253             456
(expense), net
Interest                (69     )       -            (69     )      (211    )      -             (211    )
expense
                                                                                                                 
Income (loss)
from
continuing
operations               (3,176  )        7,626          4,450           (20,800 )       29,423          8,623
before
provision for
income taxes
(Provision)
benefit for             1,414          (2,838 )      (1,424  )      7,440         (10,568 )      (3,128  )
income taxes
                                                                                                                 
Income (loss)
from                    (1,762  )       4,788        3,026         (13,360 )      18,855        5,495   
continuing
operations
Income (loss)
from
discontinued            1,447                         1,447         (2,172  )                      (2,172  )
operations
(net of tax)
                                                                                                                 
Net Income             $ (315    )                     $ 4,473        $ (15,532 )                     $ 3,323   
(loss)
                                                                                                                 
Income (loss)
per diluted
share –                $ (0.12   )                     $ 0.20         $ (0.89   )                     $ 0.36    
continuing
operations
Income (loss)
per diluted
share –                $ 0.10                         $ 0.10         $ (0.15   )                     $ (0.14   )
discontinuing
operations
Income (loss)
per diluted            $ (0.02   )                     $ 0.29         $ (1.04   )                     $ 0.22    
share – (net
income)
                                                                                                                 
                                                                                                                 

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.

Contact:

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