-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UGuAyvLcDlKdh+ye5dyVkXnenH3CbVYITAJoTsZgvLedGZQq4dj3/WY4l5sIvO89 XnIaM7zIeYerWw9j2HOJsQ== 0000708821-97-000015.txt : 19970512 0000708821-97-000015.hdr.sgml : 19970512 ACCESSION NUMBER: 0000708821-97-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970509 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAR TECHNOLOGY CORP CENTRAL INDEX KEY: 0000708821 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 161434688 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09720 FILM NUMBER: 97598698 BUSINESS ADDRESS: STREET 1: PAR TECHNOLOGY PARK STREET 2: 8383 SENECA TURNPIKE CITY: NEW HARTFORD STATE: NY ZIP: 13413 BUSINESS PHONE: 3157380600 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 1997. Commission File Number 1-9720 OR [ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From __________ to __________ Commission File Number __________ PAR TECHNOLOGY CORPORATION (Exact name of registrant as specified in its charter) Delaware 16-1434688 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) PAR Technology Park 8383 Seneca Turnpike New Hartford, NY 13413-4991 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (315) 738-0600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the pre-ceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] The number of shares outstanding of registrant's common stock, as of April 30, 1997 - 8,837,865 shares. PAR TECHNOLOGY CORPORATION TABLE OF CONTENTS FORM 10-Q PART 1 FINANCIAL INFORMATION Item Number Item 1. Financial Statements - Consolidated Statement of Income for the Three Months Ended March 31, 1997 and 1996 - Consolidated Balance Sheet at March 31, 1997 and December 31, 1996 - Consolidated Statement of Cash Flows for the Three Months Ended March 31, 1997 and 1996 - Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K Signatures Exhibit Index Item 1. Financial Statements PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (In Thousands Except Per Share Amounts) (Unaudited)
For the three months ended March 31, ----------------------- 1997 1996 -------- ------- Net revenues: Product ...................................... $ 6,566 $ 10,880 Service ...................................... 6,381 7,677 Contract ..................................... 5,116 6,937 -------- -------- 18,063 25,494 -------- -------- Costs of sales: Product ...................................... 5,514 6,778 Service ...................................... 5,609 6,261 Contract ..................................... 4,887 6,513 -------- -------- 16,010 19,552 -------- -------- Gross margin ........................... 2,053 5,942 -------- -------- Operating expenses: Selling, general and administrative .......... 4,871 3,865 Research and development ..................... 1,092 1,351 -------- -------- 5,963 5,216 -------- -------- Income (loss) from operations ..................... (3,910) 726 Other income, net ................................. 141 121 -------- -------- Income (loss) before provision for income taxes .................................... (3,769) 847 Provision (benefit) for income taxes .............. (1,376) 296 -------- -------- Net income (loss) ................................. $ (2,393) $ 551 ======== ======== Earnings (loss) per common share .................. $ (.26) $ .07 ======== ======== Weighted average number of common shares outstanding ........................... 9,130 8,157 ======== ========
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In Thousands Except Share Amounts)
March 31, 1997 December 31, (Unaudited) 1996 ----------- ------------ Assets Current Assets: Cash .......................................... $ 10,273 $ 8,391 Accounts receivable-net ....................... 31,583 42,335 Inventories ................................... 24,917 21,988 Income tax refund claims ...................... 1,282 222 Deferred income taxes ......................... 1,248 1,096 Other current assets .......................... 1,603 1,261 -------- -------- Total current assets ...................... 70,906 75,293 Property, plant and equipment - net ................ 7,177 7,243 Other assets ....................................... 4,778 4,222 -------- -------- $ 82,861 $ 86,758 ======== ======== Liabilities and Shareholders' Equity Current Liabilities: Notes payable ................................. $ 195 $ 185 Accounts payable .............................. 3,859 5,127 Accrued salaries and benefits ................. 3,033 2,750 Accrued expenses .............................. 2,212 2,883 Deferred service revenue ...................... 2,695 2,241 Income taxes payable .......................... -- -- -------- -------- Total current liabilities ................. 11,994 13,186 -------- -------- Deferred income taxes .............................. 1,016 970 -------- -------- Shareholders' Equity: Common stock, $.02 par value, 12,000,000 shares authorized; 9,439,871 and 9,416,721 shares issued 8,837,365 and 8,826,315 outstanding ......... 189 188 Preferred stock, $.02 par value, 250,000 shares authorized ................... -- -- Capital in excess of par value ................ 27,645 27,564 Retained earnings ............................. 45,286 47,679 Cumulative translation adjustment ............. (344) (67) Treasury stock, at cost, 602,506 and 590,406 shares .............................. (2,925) (2,762) -------- -------- Total shareholders' equity ................ 69,851 72,602 -------- -------- Contingent liabilities -------- -------- $ 82,861 $ 86,758 ======== ========
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (In Thousands) (Unaudited)
For the three months ended March 31, ---------------------- 1997 1996 ---------- ---------- Cash flows from operating activities: Net income (loss) ................................ $ (2,393) $ 551 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ................ 546 655 Provision for obsolete inventory ............. 740 62 Translation adjustments ...................... (277) 34 Increase (decrease) from changes in: Accounts receivable-net ........................ 10,752 7,323 Inventories .................................... (3,669) (3,182) Income tax refund claims ...................... (1,060) -- Other current assets ........................... (342) (1,380) Other assets ................................... (359) 245 Accounts payable ............................... (1,268) (874) Accrued salaries and benefits .................. 283 (711) Accrued expenses ............................... (671) (768) Deferred service revenue ....................... 454 392 Income taxes payable ........................... -- (665) Deferred income taxes .......................... (106) 170 -------- -------- Net cash provided by operating activities .... 2,630 1,852 -------- -------- Cash flows from investing activities: Capital expenditures ............................. (333) (102) Capitalization of software costs ................. (344) (96) -------- -------- Net cash used by investing activities ........ (677) (198) -------- -------- Cash flows from financing activities: Net borrowings under line-of-credit agreements ... 10 97 Proceeds from the exercise of stock options ...... 82 239 Acquisition of treasury stock .................... (163) -- -------- -------- Net cash provided (used) by financing activities ....................... (71) 336 -------- -------- Net increase in cash and cash equivalents ......... 1,882 1,990 Cash and cash equivalents at beginning of year .... 8,391 458 -------- -------- Cash and cash equivalents at end of period ........ $ 10,273 $ 2,448 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the year for: Interest ..................................... $ -- $ 20 Income taxes paid, net of refunds ............ (202) 764
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The statements for the three months ended March 31, 1997 and 1996 are unaudited; in the opinion of the Company such unaudited statements include all adjustments (which comprise only normal recurring accruals) necessary for a fair presentation of the results for such periods. The consoli-dated financial statements for the year ending December 31, 1997 are subject to adjustment at the end of the year when they will be audited by independent accountants. The results of operations for the three months ended March 31, 1997 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 1997. The consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes for the years ended in December 31, 1996 and 1995 included in the Company's December 31, 1996 Annual Report to the Securities and Exchange Commission on Form 10-K. Earnings per share are based on the weighted average number of shares outstanding plus common stock equivalents under the Company's stock option plans. 2. Inventories are used in the manufacture of Point-Of-Sale systems and other commercial products. The components of inventory, net of related reserves, consist of the following:
(In Thousands) March 31, December 31, 1997 1996 ---------- ------------ Finished goods $ 6,588 $ 5,111 Work in process 4,134 3,538 Component parts 6,586 6,234 Service parts 7,609 7,105 ---------- ---------- $ 24,917 $ 21,988 ========== ==========
At March 31, 1997 and December 31, 1996, the Company had recorded reserves for obsolete inventory of $1,513,000 and $1,174,000, respectively. Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUARTER ENDED MARCH 31, 1997 COMPARED WITH QUARTER ENDED MARCH 31, 1996 The Company reported a net loss of $2.4 million or a loss per share of $.26 for the first quarter of 1997. Revenues for the quarter were $18.1 million. These results compare to net income of $551,000, earnings per share of $.07 and revenues of $25.5 million for the first quarter of 1996. Product revenues decreased 40% to $6.6 million in 1997 versus $10.9 million in 1996. The decrease was primarily the result of lower sales to Taco Bell. The Company fulfilled the majority of this customer's requirements for 1997 in 1996. Additionally, delays in delivery of our new POS IV products also adversely affected product revenues. Partially offsetting this decline was the Company's manufacturing/ warehousing business which reported revenues of $1.1 million in the first quarter of 1997, an increase of 66% over the same quarter in 1996. The Company believes that the delays in new product introductions in the first quarter will continue into part of the second quarter. Therefore, the Company anticipates that revenues in the second quarter of 1997, while better than the first quarter of 1997, will be lower than the second quarter of 1996. The Company expects to return to solid growth in the second half of 1997. Service revenues decreased 17% to $6.4 million in the first quarter of 1997 compared to $7.7 million for the first quarter of 1996. This decrease was due to a special integration project requested by a customer in 1996 that did not recur in 1997. This decline was partially offset by the ongoing activities with Taco Bell under the exclusive service integration contract awarded in 1995. Under this agreement, the Company is responsible for servicing of all POS systems, back office systems and Help Desk and On-Site Support activities. Contract revenues were $5.1 million in 1997, a decrease of 26% from $6.9 million reported in 1996. The decrease in our government business was primarily the result of cancellation for convenience in 1996 of certain software development contracts of the Company by the Department of Defense. Gross margin on product revenues was 16% in the first quarter of 1997, versus 37.7% for the first quarter of 1996. The 1997 margin was due to the inability to absorb certain manufacturing costs as a result of the lower than normal product sales volume. Gross margin on service revenues was 12.1% for the three months ended March 1997 versus 18.4% for the same three months of 1996. This decline was primarily the result of lower margins attributable to product mix of the different service offerings. Gross margin on contract revenues was 4.5% in 1997 versus 6.1% in 1996. Contract margins are generally in the range of 4% to 6% with minor fluctuation due to contract mix. Selling, general and administrative expenses were $4.9 million in 1997, an increase of 26% from the $3.9 million reported in 1996. The increase was primarily due to an increased investment in the POS sales force and to a lesser degree a one time bad debt write off. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUARTER ENDED MARCH 31, 1997 COMPARED WITH QUARTER ENDED MARCH 31, 1997 Research and development expenses decreased 19% to $1.1 million in 1997 compared to $1.4 million in 1996. Net research and development expenses declined due to the requirement to capitalize certain soft-ware development costs under the Statement of Financial Accounting Standards No. 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed. The Company incurred more soft-ware development costs meeting this requirement in 1997 than in 1996. Capitalized software research and development costs attributable to government contracts are included in costs of contract revenues. Liquidity and Capital Resources The Company's primary source of liquidity has been from operations. Cash provided by operating activities was $2.6 million in the first quarter of 1997, compared to $1.9 million in 1996. The Company historically has experienced significant collections of accounts receivable in its first quarter due to the volume of sales generated in the preceding quarter. This is primarily due to the seasonal demands of the Company's restaurant customers. However, this factor was offset by the build up of product and service inventory in anticipation of future sales orders and service requirements and the timing of estimated income tax payments in 1997 versus 1996. Cash used in investing activities was $677,000 for the first quarter of 1997 compared to $198,000 in 1996. In 1997, capital expenditures were primarily for upgrades to the manufacturing facility. In 1996, capital expenditures were for internal use computers and other miscellaneous items. Cash used by financing activities was $71,000 for the first quarter of 1997 compared to cash provided of $336,000 in 1996. In 1997, the Company paid $163,000 to repurchase some of its stock. In 1996, the Company benefited from the proceeds from the exercise of stock options. The Company has line-of-credit agreements, which aggregate $27.4 million with certain banks, of which $195,000 was in use at March 31, 1997. The Company believes that it has adequate financial resources to meet its future liquidity and capital requirements. Important Factors Regarding Future Results Information provided by the Company, including information contained in this Report, or by its spokespersons from time to time may contain 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, further 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. Item 6. Exhibits and Reports on Form 8-K List of Exhibits Exhibit No. Description of Instrument ---------- ------------------------- 11 Statement re computation of per-share earnings Reports on Form 8-K None during the first quarter of 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PAR TECHNOLOGY CORPORATION -------------------------- (Registrant) Date: May 9, 1997 RONALD J. CASCIANO --------------------------------------- Ronald J. Casciano Vice President, Chief Financial Officer and Treasurer EX-11 2 Exhibit Index Exhibit ------- 11 - Statement re computation of per-share earnings Exhibit 11 COMPUTATION OF WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK (In Thousands)
For the three months ended March 31, -------------------- 1997 1996 ---------- --------- Primary and Fully Diluted Earnings Per Share: Weighted average shares of common stock outstanding: Balance - beginning of period ...................... 8,826 7,682 Weighted average shares issued ..................... 14 18 Assumed exercise of certain stock options .......... 290 457 ----- ----- Weighted shares - end of period .................... 9,130 8,157 ===== =====
EX-27 3
5 1,000 3-MOS DEC-31-1997 MAR-31-1997 10,273 0 31,583 0 24,917 70,906 7,177 0 82,861 11,994 0 0 0 189 69,662 82,961 6,566 18,063 5,514 16,010 5,963 0 0 (3,769) (1,376) (2,393) 0 0 0 (2,393) (.26) (.26)
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