PAR Technology Corporation (NYSE: PAR) today announced its results of
operations for its first quarter ended March 31, 2019.
Summary of Fiscal 2019 First Quarter Financial Results
-
Revenues were reported at $44.7 million in the first quarter of 2019,
compared to $55.7 million in the same period in 2018, a 19.7% decrease. -
GAAP net loss in the first quarter of 2019 was $2.7 million, or $0.17
loss per diluted share, a decrease from the GAAP net income of $0.1
million, or $0.00 earnings per diluted share reported in the same
period in 2018. -
Non-GAAP net loss in the first quarter of 2019 was $1.8 million, or
$0.11 loss per diluted share, compared to non-GAAP net income of $0.6
million, or $0.04 earnings per diluted share, in the same period in
2018.
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.
“In the first quarter we continued the ongoing transition of our
business. I am pleased with our progress in the quarter. I am also
particularly proud of our employees’ continued efforts to focus on
growing our business by serving our customers, delivering excellent
products and adding new Brink bookings and recurring revenue streams on
a consistent basis,” said Savneet Singh, CEO & President PAR Technology
Corporation. “We continue to invest in product development and focus our
business development efforts on identifying new opportunities for our
cloud solutions. Our strategy remains to rapidly accelerate our
recurring revenue growth through providing a comprehensive portfolio of
products and services to our restaurant customer base. We are also
seeking out opportunities to increase monthly fees and subscription
prices through strategic partnerships.”
Highlights of the First Quarter 2019:
— Brink ARR* at end of Q1 ’19 now totals $15.8 million – an increase of
$5.5 million from end of Q1 ’18
— Active Brink sites at end of Q1 ’19 – now total 8,000 restaurants
— Brink bookings in Q1 ’19 719 restaurants
— Brink bookings in Q1 ’19 ASP** = $200 per month
*ARR – Run rate of annual recurring revenues – SaaS and support revenues
**ASP
– Average selling price SaaS and support revenues
Mr. Singh added, “During the past three months, PAR has undergone a
significant transition. Our Company has new leadership, we’ve released
new versions of our products, reduced costs and improved our cash
position. We are now poised to actually take advantage of the large and
fast growing market in front of us. We have made the tough choices in
the Company; those are now behind us, so we can focus our energies on
building a great business. Our passionate focus on return on capital has
led us to discovering new revenue streams and sharpened our awareness on
customer satisfaction.”
Conference Call.
There will be a conference call at 4:30 p.m. (Eastern) on May 6, 2019,
during which the Company’s management will discuss the financial results
for the first quarter ended March 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.
Alternatively, listeners may access an archived version of the
presentation call after 7:30 p.m. on May 6, 2019 through May 13, 2019 by
dialing 855-859-2056 and using conference ID 1338389.
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.
Products from PAR also 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
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. Factors that could cause actual
results to differ materially, include: 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 the two
restaurant chain customers and the U.S. Department of Defense, each of
which 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
governmental authorities; and the other factors discussed in our most
recent Annual Report on Form 10-K and other filings with the Securities
and Exchange Commission (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.
|
PAR TECHNOLOGY CORPORATION |
||||||||||
| Assets | March 31, 2019 | December 31, 2018 | ||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 4,142 | $ | 3,485 | ||||||
| Accounts receivable-net | 29,311 | 26,219 | ||||||||
| Inventories-net | 22,639 | 22,737 | ||||||||
| Other current assets | 5,099 | 3,251 | ||||||||
| Total current assets | 61,191 | 55,692 | ||||||||
| Property, plant and equipment – net | 13,169 | 12,575 | ||||||||
| Goodwill | 11,051 | 11,051 | ||||||||
| Intangible assets – net | 11,176 | 10,859 | ||||||||
| Operating leases right-of-use assets | 3,697 | — | ||||||||
| Other assets | 4,764 | 4,504 | ||||||||
| Total Assets | $ | 105,048 | $ | 94,681 | ||||||
| Liabilities and Shareholders’ Equity | ||||||||||
| Current liabilities: | ||||||||||
| Borrowings of line of credit | $ | 16,139 | $ | 7,819 | ||||||
| Accounts payable | 14,794 | 12,644 | ||||||||
| Accrued salaries and benefits | 5,145 | 5,940 | ||||||||
| Accrued expenses | 2,223 | 2,113 | ||||||||
| Customer deposits and deferred service revenue | 11,540 | 9,851 | ||||||||
| Operating lease liabilities – current portion | 1,540 | — | ||||||||
| Other current liabilities | — | 2,550 | ||||||||
| Total current liabilities | 51,381 | 40,917 | ||||||||
| Deferred revenue | 4,807 | 4,407 | ||||||||
| Operating lease liabilities – net of current portion | 2,177 | — | ||||||||
| Other long-term liabilities | 3,198 | 3,411 | ||||||||
| Total liabilities | 61,563 | 48,735 | ||||||||
| 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; |
357 | 357 | ||||||||
| Capital in excess of par value | 50,529 | 50,251 | ||||||||
| Retained earnings | 2,698 | 5,427 | ||||||||
| Accumulated other comprehensive loss | (4,263 | ) | (4,253 | ) | ||||||
| Treasury stock, at cost, 1,708,109 shares | (5,836 | ) | (5,836 | ) | ||||||
| Total shareholders’ equity | 43,485 | 45,946 | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | 105,048 | $ | 94,681 | ||||||
|
PAR TECHNOLOGY CORPORATION |
||||||||||
|
Three Months Ended |
||||||||||
| 2019 | 2018 | |||||||||
| Net revenues: | ||||||||||
| Product | $ | 15,517 | $ | 26,324 | ||||||
| Service | 14,043 | 13,196 | ||||||||
| Contract | 15,122 | 16,141 | ||||||||
| 44,682 | 55,661 | |||||||||
| Costs of sales: | ||||||||||
| Product | 11,241 | 19,440 | ||||||||
| Service | 10,027 | 9,547 | ||||||||
| Contract | 13,650 | 14,827 | ||||||||
| 34,918 | 43,814 | |||||||||
| Gross margin | 9,764 | 11,847 | ||||||||
| Operating expenses: | ||||||||||
| Selling, general and administrative | 8,564 | 8,600 | ||||||||
| Research and development | 3,060 | 2,868 | ||||||||
| Amortization of identifiable intangible assets | 241 | 241 | ||||||||
| 11,865 | 11,709 | |||||||||
| Operating (loss) income | (2,101 | ) | 138 | |||||||
| Other (expense) income, net | (430 | ) | 49 | |||||||
| Interest expense, net | (146 | ) | (41 | ) | ||||||
| (Loss) income before provision for income taxes | (2,677 | ) | 146 | |||||||
| Provision for income taxes | (52 | ) | (78 | ) | ||||||
| Net (loss) income | $ | (2,729 | ) | $ | 68 | |||||
| Basic Earnings per Share: | ||||||||||
| Net (loss) income | $ | (0.17 | ) | $ | — | |||||
| Diluted Earnings per Share: | ||||||||||
| Net (loss) income | $ | (0.17 | ) | $ | — | |||||
| Weighted average shares outstanding | ||||||||||
| Basic | 16,044 | 15,948 | ||||||||
| Diluted | 16,044 | 16,286 | ||||||||
|
PAR TECHNOLOGY CORPORATION |
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|
For the three months ended March 31, |
For the three months ended March 31, |
|||||||||||||||||||||||||||
|
Reported
|
Adjustments
|
Comparable
|
Reported
|
Adjustments
|
Comparable
|
|||||||||||||||||||||||
| Net revenues | $ | 44,682 | $ | — | $ | 44,682 | $ |
55,661 |
$ | — | $ | 55,661 | ||||||||||||||||
| Costs of sales | 34,918 | 143 | 34,775 | 43,814 | — | 43,814 | ||||||||||||||||||||||
| Gross margin | 9,764 | 143 | 9,907 | 11,847 | — | 11,847 | ||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||
|
Selling, general and administrative |
8,564 | 755 | 7,809 | 8,600 | 478 | 8,122 | ||||||||||||||||||||||
| Research and development | 3,060 | 108 | 2,952 | 2,868 | — | 2,868 | ||||||||||||||||||||||
| Acquisition amortization | 241 | 241 | — | 241 | 241 | — | ||||||||||||||||||||||
| Total operating expenses | 11,865 | 1,104 | 10,761 | 11,709 | 719 | 10,990 | ||||||||||||||||||||||
| Operating (loss) income | (2,101 | ) | 1,247 | (854 | ) | 138 | 719 | 857 | ||||||||||||||||||||
| Other (expense) income, net | (430 | ) | — | (430 | ) | 49 | — | 49 | ||||||||||||||||||||
| Interest expense, net | (146 | ) | — | (146 | ) | (41 | ) | — | (41 | ) | ||||||||||||||||||
|
(Loss) income before provision |
(2,677 | ) | 1,247 | (1,430 | ) | 146 | 719 | 865 | ||||||||||||||||||||
| Provision for income taxes | (52 | ) | (299 | ) | (351 | ) | (78 | ) | (173 | ) | (251 | ) | ||||||||||||||||
| Net (loss) income | (2,729 | ) | (1,781 | ) | 68 | 614 | ||||||||||||||||||||||
| (Loss) income per diluted share | (0.17 | ) | (0.11 | ) | 0.00 | 0.04 | ||||||||||||||||||||||
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, acquisition
related expenditures, expense relating to the internal investigation
into conduct in China and Singapore and the SEC document 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 loss, net loss and diluted 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 first quarter of 2019, the Company recorded $568,000 of
severance expenses, of which $143,000 are included in costs of sales,
$317,000 are included in selling, general and administrative expenses
and $108,000 are included in research and development expenses. The
Company recorded $190,000 of expenses related to the Company’s internal
investigation into conduct at its China and Singapore offices and the
SEC document subpoena. Additionally, $248,000 of equity based
compensation charges were recorded during the first quarter of 2019. The
Company recognized amortization of acquired intangible assets of
$241,000 related to the Company’s 2014 acquisition of Brink Software,
Inc. (the “Brink Acquisition”). The provision for income tax line above
is netted down by a 24%, or $299,000 tax impact from non-GAAP
adjustments.
During the first quarter of 2018, the Company recorded $297,000 of
expenses related to the Company’s internal investigation and the SEC
document subpoena. Additionally, $181,000 of equity based compensation
charges were recorded during the first quarter of 2018. The Company
recognized amortization of acquired intangible assets of $241,000
related to the Company’s 2014 Brink Acquisition. The provision for
income tax line above is netted down by a 24% or $173,000 tax impact
from non-GAAP adjustments.
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