AP NEWS

PAR Technology Corporation Announces 2018 Third Quarter Results

November 7, 2018

NEW HARTFORD, N.Y.--(BUSINESS WIRE)--Nov 7, 2018--PAR Technology Corporation (NYSE:PAR) today announced its results for its third quarter ended September 30, 2018.

Summary of Fiscal 2018 Third Quarter and Year-to-Date Financial Results

Revenues were reported at $46.4 million for the third quarter of 2018, compared to $48.9 million for the same period in 2017, a 5.3% decrease. GAAP net loss for the third quarter of 2018 was $16.7 million, or $1.04 loss per diluted share, compared to the GAAP net loss of $1.5 million, or $0.10 loss per diluted share reported for the same period in 2017. GAAP net loss was impacted by a one-time $14.9 million valuation allowance recorded to reduce the carrying value of deferred tax assets recorded to income tax expense for the quarter. 1 Non-GAAP net loss for the third quarter of 2018 was $1.0 million, or $0.06 loss per diluted share, compared to non-GAAP net loss of $0.9 million, or $0.06 loss per diluted share, for the same period in 2017. Revenues were reported at $154.6 million for the first nine months of 2018, compared to $177.1 million for the same period in 2017, a 12.7% decrease. GAAP net loss for the first nine months of 2018 was $18.0 million, or $1.12 loss per diluted share, compared to the GAAP net income of $1.9 million, or $0.12 earnings per diluted share reported for the same period in 2017. GAAP net loss was impacted by a one-time $14.9 million valuation allowance recorded to reduce the carrying value of deferred tax assets recorded to income tax expense for the first nine months. 1 Non-GAAP net loss for the first nine months of 2018 was $1.1 million, or $0.07 loss per diluted share, compared to non-GAAP net income of $4.0 million, or $0.25 earnings per diluted share, for the same period in 2017.

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 results for the quarter reflect the continued transition of the Company, with declining revenues from our legacy products offset by growth from our new offerings, including a 60% increase in year-over-year subscription revenues. In addition, Brink, our industry leading cloud POS solution, continues to gain traction in the restaurant marketplace, evidenced by the 886 new restaurant bookings in the quarter, an increase of more than 150% from last year’s third quarter,” commented PAR President & CEO, Dr. Donald H. Foley. “In the recently ended quarter we also reported a 17% increase in year-over-year contract revenues in our Government segment. We continue to focus on making important investments in the Company that will support and enhance our future growth.”

1 See the following GAAP to Non-GAAP Reconciliations for further detail on the valuation allowance.

Conference Call.

There will be a conference call at 4:30 p.m. (Eastern) on November 7, 2018, during which the Company’s management will discuss the financial results for the third quarter ended September 30, 2018. 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-us/investors. Alternatively, listeners may access an archived version of the presentation call after 7:30 p.m. on November 7, 2018 through November 14, 2018 by dialing 855-859-2056 and using conference ID 3593778.

About PAR Technology Corporation.

PAR Technology Corporation’s stock is traded on the New York Stock Exchange under the symbol “PAR”. PAR’s Restaurant/Retail segment has been a leading provider of restaurant and retail technology for more than 35 years. PAR offers management technology solutions for the full spectrum of restaurant operations, from large chain and independent table service restaurants to international quick service chains. PAR products can be found in retailers, cinemas, cruise lines, stadiums, and food service companies. 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. For more information visit http://www.partech.com/about-us/investors 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 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. Risks and uncertainties that could cause the Company’s actual results to differ materially include: delays in new product development and/or product introduction; changes in customer base and product, and service demands, including changes in product or service demands by the two customers from whom a significant portion of our revenue is derived; risks associated with the internal investigation into conduct at our China and Singapore offices, including sanctions and fines that may be imposed by the U.S. Department of Justice, the Securities and Exchange Commission (“SEC”), and other governmental authorities; our ability to execute our business plan and continue to fund current operations will require us to obtain waivers or modifications to our credit agreement and/or secure alternative or additional sources of capital, which may be unavailable on acceptable terms, or at all; significant changes in U.S. and international trade policies that restrict imports or increase tariffs on goods imported to the United States from China; and the other risk factors discussed in our most recent Annual Report on Form 10-K and other filings with the SEC. 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.

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 tables below, 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, acquisition related expenditures, expense relating to the internal investigation into conduct in China and Singapore and the SEC subpoena, 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 (loss), net earnings (loss) and diluted earnings (loss) 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. 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 third quarter of 2018, the Company recorded $305,000 of selling, general and administrative expenses related to the Company’s internal investigation into conduct at its China and Singapore offices and the SEC subpoena. Additionally, $323,000 of equity based compensation charges were recorded during the third quarter of 2018. There were $157,000 of severance expenses recorded in the third quarter. The Company recognized amortization of acquired intangible assets of $241,000 related to the Company’s 2014 acquisition of Brink Software, Inc. (“Brink”) and recorded a one-time $14,894,000 valuation allowance to reduce the carrying value of its deferred tax assets. FASB ASC 740-10-30-21 indicates that the main negative factor in determining whether to establish a valuation allowance is the incurrence of cumulative losses in the most recent three years. Such objective evidence (or factor) limits the ability to consider other subjective factors, such as projections for future growth. The Company has incurred losses for two of the past three years and is in a loss position for the nine months ended September 30, 2018. A significant factor of the losses has been the Company’s strategic investment in operating expenses to fund the growth of the Brink business line. The increase in investments has outpaced operating performance of the Company’s other lines of business. The Company plans to continue to fund the Brink business line growth in the foreseeable future. Based on its evaluation of its deferred tax assets at September 30, 2018, the Company established a full valuation allowance for the carrying value of its deferred tax assets. The valuation allowance can be reversed if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence, such as our projections of future growth. The valuation allowance was offset by $0.3 million or 24% representing the tax impact of non-GAAP adjustments.

During the third quarter of 2017, the Company recorded charges within selling, general and administrative of $705,000 related to the Company’s internal investigation into conduct at its China and Singapore offices and the SEC subpoena. In addition, $63,000 of equity based compensation charges were recorded during the third quarter of 2017. The Company recognized amortization of acquired intangible assets of $241,000 related to the Company’s acquisition of Brink. The benefit from income tax was decreased by 37%, or $373,000, to reflect the tax impact from non-GAAP adjustments.

During the nine months ended September 30, 2018, the Company recorded $916,000 of selling, general and administrative expenses related to the Company’s internal investigation into conduct at its China and Singapore offices and the SEC subpoena. Additionally, $754,000 of equity based compensation charges were recorded during the first nine months of 2018. There were $234,000 of severance expenses recorded in the first nine months of 2018. The Company recognized amortization of acquired intangible assets of $724,000 related to the Company’s 2014 acquisition of Brink and recorded a one-time $14,894,000 valuation allowance to reduce the carrying value of its deferred tax assets pursuant to FASB ASC 740-10-30-21. The valuation allowance was offset by $0.6 million or 24% representing the tax impact of non-GAAP adjustments.

During the nine months ended September 30, 2017, the Company recorded charges within selling, general and administrative of $2,272,000 related to the Company’s internal investigation into conduct at its China and Singapore offices and the SEC subpoena, and $21,000 of legacy charges related to the Company’s former chief financial officer’s unauthorized transfers of Company funds. In addition, $301,000 of equity based compensation charges were recorded during the nine months ended September 30, 2017. The Company recognized amortization of acquired intangible assets of $724,000 related to the Company’s acquisition of Brink. The benefit from income tax was increased by 37%, or $1,228,000, to reflect the tax impact from non-GAAP adjustments.

View source version on businesswire.com:https://www.businesswire.com/news/home/20181107005879/en/

CONTACT: For PAR Technology Corporation

Christopher R. Byrnes, 315-738-0600 ext. 6226

cbyrnes@partech.com

www.partech.com

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: TECHNOLOGY DATA MANAGEMENT SOFTWARE

SOURCE: PAR Technology Corporation

Copyright Business Wire 2018.

PUB: 11/07/2018 04:00 PM/DISC: 11/07/2018 04:00 PM

http://www.businesswire.com/news/home/20181107005879/en

AP RADIO
Update hourly