Delaware | 16-1434688 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
PAR Technology Park | |
8383 Seneca Turnpike | |
New Hartford, New York | 13413-4991 |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of exchange on which registered |
Common Stock | PAR | New York Stock Exchange |
Large Accelerated Filer ☐ | Accelerated Filer þ |
Non Accelerated Filer ☐ | Smaller Reporting Company þ |
Emerging Growth Company ☐ |
Item Number | Page | |
Item 1. | ||
4 | ||
5 | ||
6 | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | 24 | |
Item 1. | Financial Statements |
(unaudited) | (note 1) | ||||||
Assets | June 30, 2019 | December 31, 2018 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 58,661 | $ | 3,485 | |||
Accounts receivable – net | 25,886 | 26,219 | |||||
Inventories – net | 20,433 | 22,737 | |||||
Asset held for sale | 2,477 | — | |||||
Other current assets | 6,657 | 3,251 | |||||
Total current assets | 114,114 | 55,692 | |||||
Property, plant and equipment – net | 13,641 | 12,575 | |||||
Goodwill | 11,051 | 11,051 | |||||
Intangible assets – net | 8,555 | 10,859 | |||||
Operating lease right-of-use assets | 3,323 | — | |||||
Other assets | 4,388 | 4,504 | |||||
Total Assets | $ | 155,072 | $ | 94,681 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Borrowings on line of credit | $ | — | $ | 7,819 | |||
Accounts payable | 10,434 | 12,644 | |||||
Accrued salaries and benefits | 5,700 | 5,940 | |||||
Accrued expenses | 2,257 | 2,113 | |||||
Operating lease liabilities - current portion | 1,206 | — | |||||
Customer deposits and deferred service revenue | 10,736 | 9,851 | |||||
Other current liabilities | — | 2,550 | |||||
Total current liabilities | 30,333 | 40,917 | |||||
Operating lease liabilities - net of current portion | 2,153 | — | |||||
Deferred service revenue | 4,343 | 4,407 | |||||
Long-term debt | 59,255 | — | |||||
Other long-term liabilities | 3,201 | 3,411 | |||||
Total liabilities | 99,285 | 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; 18,005,285 and 17,879,761 shares issued, 16,297,176 and 16,171,652 outstanding at June 30, 2019 and December 31, 2018, respectively | 360 | 357 | |||||
Capital in excess of par value | 63,806 | 50,251 | |||||
Retained earnings | 1,589 | 5,427 | |||||
Accumulated other comprehensive loss | (4,132 | ) | (4,253 | ) | |||
Treasury stock, at cost, 1,708,109 shares | (5,836 | ) | (5,836 | ) | |||
Total shareholders’ equity | 55,787 | 45,946 | |||||
Total Liabilities and Shareholders’ Equity | $ | 155,072 | $ | 94,681 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
Net revenues: | ||||||||||||||
Product | $ | 14,728 | $ | 20,883 | $ | 30,245 | $ | 47,207 | ||||||
Service | 13,534 | 13,944 | 27,577 | 27,140 | ||||||||||
Contract | 15,985 | 17,744 | 31,107 | 33,885 | ||||||||||
44,247 | 52,571 | 88,929 | 108,232 | |||||||||||
Costs of sales: | ||||||||||||||
Product | 11,412 | 15,339 | 22,653 | 34,779 | ||||||||||
Service | 9,876 | 10,205 | 19,903 | 19,752 | ||||||||||
Contract | 14,386 | 15,667 | 28,036 | 30,494 | ||||||||||
35,674 | 41,211 | 70,592 | 85,025 | |||||||||||
Gross margin | 8,573 | 11,360 | 18,337 | 23,207 | ||||||||||
Operating expenses: | ||||||||||||||
Selling, general and administrative | 9,059 | 9,020 | 17,623 | 17,620 | ||||||||||
Research and development | 2,725 | 3,222 | 5,785 | 6,090 | ||||||||||
Amortization of identifiable intangible assets | 242 | 242 | 483 | 483 | ||||||||||
12,026 | 12,484 | 23,891 | 24,193 | |||||||||||
Operating loss | (3,453 | ) | (1,124 | ) | (5,554 | ) | (986 | ) | ||||||
Other expense, net | (374 | ) | (384 | ) | (804 | ) | (335 | ) | ||||||
Interest expense, net | (1,244 | ) | (78 | ) | (1,390 | ) | (119 | ) | ||||||
Loss before benefit from income taxes | (5,071 | ) | (1,586 | ) | (7,748 | ) | (1,440 | ) | ||||||
Benefit from income taxes | 3,962 | 263 | 3,910 | 185 | ||||||||||
Net loss | $ | (1,109 | ) | $ | (1,323 | ) | $ | (3,838 | ) | $ | (1,255 | ) | ||
Basic Loss per Share: | ||||||||||||||
Net loss | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.24 | ) | $ | (0.08 | ) | ||
Diluted Loss per Share: | ||||||||||||||
Net loss | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.24 | ) | $ | (0.08 | ) | ||
Weighted average shares outstanding | ||||||||||||||
Basic | 16,290 | 16,330 | 16,085 | 15,993 | ||||||||||
Diluted | 16,290 | 16,330 | 16,085 | 15,993 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
Net loss | $ | (1,109 | ) | $ | (1,323 | ) | $ | (3,838 | ) | $ | (1,255 | ) | ||
Other comprehensive income (loss), net of applicable tax: | ||||||||||||||
Foreign currency translation adjustments | 131 | (625 | ) | 121 | (202 | ) | ||||||||
Comprehensive loss | $ | (978 | ) | $ | (1,948 | ) | $ | (3,717 | ) | $ | (1,457 | ) |
(in thousands) | Common Stock | Capital in excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Shareholders’ Equity | ||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||
Balances at December 31, 2017 | 17,677 | $ | 354 | $ | 48,349 | $ | 29,549 | $ | (3,430 | ) | (1,708 | ) | $ | (5,836 | ) | $ | 68,986 | |||||
Net income | — | — | — | 68 | — | — | — | 68 | ||||||||||||||
Equity based compensation | — | — | 181 | — | — | — | — | 181 | ||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 423 | — | — | 423 | ||||||||||||||
Balances at March 31, 2018 | 17,677 | $ | 354 | $ | 48,530 | $ | 29,617 | $ | (3,007 | ) | (1,708 | ) | $ | (5,836 | ) | $ | 69,658 | |||||
Net loss | — | — | — | (1,323 | ) | — | — | — | (1,323 | ) | ||||||||||||
Issuance of common stock upon the exercise of stock options | 208 | 3 | 728 | — | — | — | — | 731 | ||||||||||||||
Equity based compensation | — | — | 250 | — | — | — | — | 250 | ||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (625 | ) | — | — | (625 | ) | ||||||||||||
Balances at June 30, 2018 | 17,885 | $ | 357 | $ | 49,508 | $ | 28,294 | $ | (3,632 | ) | (1,708 | ) | $ | (5,836 | ) | $ | 68,691 | |||||
Balances at December 31, 2018 | 17,878 | $ | 357 | $ | 50,251 | $ | 5,427 | $ | (4,253 | ) | (1,708 | ) | $ | (5,836 | ) | $ | 45,946 | |||||
Net loss | — | — | — | (2,729 | ) | — | — | — | (2,729 | ) | ||||||||||||
Issuance of common stock upon the exercise of stock options | 78 | — | 30 | — | — | — | — | 30 | ||||||||||||||
Equity based compensation | — | — | 248 | — | — | — | — | 248 | ||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (10 | ) | — | — | (10 | ) | ||||||||||||
Balances at March 31, 2019 | 17,956 | $ | 357 | $ | 50,529 | $ | 2,698 | $ | (4,263 | ) | (1,708 | ) | $ | (5,836 | ) | $ | 43,485 | |||||
Net loss | — | — | — | (1,109 | ) | — | — | — | (1,109 | ) | ||||||||||||
Issuance of common stock upon the exercise of stock options | 79 | 3 | 210 | — | — | — | — | 213 | ||||||||||||||
Equity based compensation | — | — | 602 | — | — | — | — | 602 | ||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 131 | — | — | 131 | ||||||||||||||
Convertible notes conversion discount (net of taxes $4.1 million and issuance costs of $1.1 million) | — | — | 12,465 | — | — | — | — | 12,465 | ||||||||||||||
Balances at June 30, 2019 | 18,035 | $ | 360 | $ | 63,806 | $ | 1,589 | $ | (4,132 | ) | (1,708 | ) | $ | (5,836 | ) | $ | 55,787 |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (3,838 | ) | $ | (1,255 | ) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||
Depreciation, amortization and accretion | 3,121 | 2,279 | |||||
Provision for bad debts | 397 | 314 | |||||
Provision for obsolete inventory | (522 | ) | 974 | ||||
Equity based compensation | 850 | 431 | |||||
Deferred income tax | (4,065 | ) | (361 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (284 | ) | (3,655 | ) | |||
Inventories | 1,876 | (5,976 | ) | ||||
Other current assets | (3,406 | ) | 30 | ||||
Other assets | 150 | (283 | ) | ||||
Accounts payable | (2,208 | ) | 6,740 | ||||
Accrued salaries and benefits | (240 | ) | (122 | ) | |||
Accrued expenses | 2,840 | (1,151 | ) | ||||
Customer deposits and deferred service revenue | 1,548 | 3,110 | |||||
Other long-term liabilities | (2,760 | ) | (486 | ) | |||
Net cash (used in) provided by operating activities | (6,541 | ) | 589 | ||||
Cash flows from investing activities: | |||||||
Capital expenditures | (1,693 | ) | (1,737 | ) | |||
Capitalization of software costs | (1,624 | ) | (2,098 | ) | |||
Net cash used in investing activities | (3,317 | ) | (3,835 | ) | |||
Cash flows from financing activities: | |||||||
Payments of long-term debt | — | (96 | ) | ||||
Payment of contingent consideration for Brink Earn Out | (2,550 | ) | (10,059 | ) | |||
Payments of bank borrowings | (17,459 | ) | 14,950 | ||||
Proceeds from bank borrowings | 9,640 | — | |||||
Proceeds from notes payable, net of issuance costs | 75,039 | — | |||||
Proceeds from stock options | 243 | 731 | |||||
Net cash provided by financing activities | 64,913 | 5,526 | |||||
Effect of exchange rate changes on cash and cash equivalents | 121 | (202 | ) | ||||
Net increase in cash and cash equivalents | 55,176 | 2,078 | |||||
Cash and cash equivalents at beginning of period | 3,485 | 6,600 | |||||
Cash and equivalents at end of period | $ | 58,661 | $ | 8,678 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 153 | $ | 78 | |||
Income taxes, net of refunds | 125 | 83 | |||||
Additions to right-of-use assets and deferred rent obtained from operating lease liabilities | 3,359 | — |
Balance at June 30, 2019 | ||||||
Current - under one year | Non-current - over one year | |||||
Restaurant/Retail | $ | 10,657 | $ | 4,343 | ||
Government | 79 | — | ||||
TOTAL | $ | 10,736 | $ | 4,343 |
Balance at December 31, 2018 | ||||||
Current - under one year | Non-current - over one year | |||||
Restaurant/Retail | $ | 9,320 | $ | 4,407 | ||
Government | 325 | — | ||||
TOTAL | $ | 9,645 | $ | 4,407 |
Three months ended June 30, 2019 | |||||||||
Restaurant/Retail - Point in Time | Restaurant/Retail - Over Time | Government - Over Time | |||||||
Restaurant/Retail | $ | 21,503 | $ | 5,829 | $ | — | |||
Grocery | 283 | 647 | — | ||||||
Mission Systems | — | — | 8,192 | ||||||
ISR Solutions | — | — | 7,793 | ||||||
TOTAL | $ | 21,786 | $ | 6,476 | $ | 15,985 |
Three months ended June 30, 2018 | |||||||||
Restaurant/Retail - Point in Time | Restaurant/Retail - Over Time | Government - Over Time | |||||||
Restaurant/Retail | $ | 27,430 | $ | 5,742 | $ | — | |||
Grocery | 873 | 782 | — | ||||||
Mission Systems | — | — | 8,707 | ||||||
ISR Solutions | — | — | 9,037 | ||||||
TOTAL | $ | 28,303 | $ | 6,524 | $ | 17,744 |
Six months ended June 30, 2019 | |||||||||
Restaurant/Retail - Point in Time | Restaurant/Retail - Over Time | Government - Over Time | |||||||
Restaurant/Retail | $ | 43,880 | $ | 11,579 | $ | — | |||
Grocery | 732 | 1,631 | — | ||||||
Mission Systems | — | — | 16,738 | ||||||
ISR Solutions | — | — | 14,369 | ||||||
TOTAL | $ | 44,612 | $ | 13,210 | $ | 31,107 |
Six months ended June 30, 2018 | |||||||||
Restaurant/Retail - Point in Time | Restaurant/Retail - Over Time | Government - Over Time | |||||||
Restaurant/Retail | $ | 59,594 | $ | 11,599 | $ | — | |||
Grocery | 1,626 | 1,528 | — | ||||||
Mission Systems | — | — | 17,041 | ||||||
ISR Solutions | — | — | 16,844 | ||||||
TOTAL | $ | 61,220 | $ | 13,127 | $ | 33,885 |
June 30, 2019 | |||
Accounts receivable - net | $ | 220 | |
Intangible assets | 2,180 | ||
Inventories - net | 950 | ||
Total assets | 3,350 | ||
Deferred revenue | 726 | ||
Other liabilities | 147 | ||
Total liabilities | 873 | ||
Total net assets | $ | 2,477 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Operating lease cost | $ | 302 | $ | 251 | $ | 848 | $ | 708 | ||||
Total lease cost | $ | 302 | $ | 251 | $ | 848 | $ | 708 |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | |||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows from operating leases | $ | 569 | $ | 1,115 |
June 30, 2019 | |||
Operating leases | |||
Operating lease right-of-use assets | $ | 3,323 | |
Operating lease liabilities - current portion | 1,206 | ||
Operating lease liabilities - net of current portion | 2,153 | ||
Total operating lease liabilities | $ | 3,359 | |
Weighted-average remaining lease term | |||
Operating leases | 3.9 years | ||
Weighted-average discount rate | |||
Operating leases | 4 | % |
Operating Leases | |||
2019 | $ | 833 | |
2020 | 1,034 | ||
2021 | 762 | ||
2022 | 582 | ||
2023 | 578 | ||
Thereafter | 75 | ||
Total lease payments | 3,864 | ||
Less: interest | (505 | ) | |
Total | $ | 3,359 |
June 30, 2019 | December 31, 2018 | ||||||
Government reporting segment: | |||||||
Billed | $ | 7,782 | $ | 9,100 | |||
Advanced billings | (214 | ) | (563 | ) | |||
7,568 | 8,537 | ||||||
Restaurant/Retail reporting segment: | 18,318 | 17,682 | |||||
Accounts receivable - net | $ | 25,886 | $ | 26,219 |
June 30, 2019 | December 31, 2018 | ||||||
Finished goods | $ | 7,533 | $ | 12,472 | |||
Work in process | 466 | 67 | |||||
Component parts | 6,903 | 4,716 | |||||
Service parts | 5,531 | 5,482 | |||||
$ | 20,433 | $ | 22,737 |
June 30, 2019 | December 31, 2018 | Estimated Useful Life | |||||||
Acquired and internally developed software costs | $ | 13,902 | $ | 18,972 | 3 - 5 years | ||||
Customer relationships | 160 | 160 | 7 years | ||||||
Non-competition agreements | 30 | 30 | 1 year | ||||||
14,092 | 19,162 | ||||||||
Less accumulated amortization | (9,059 | ) | (11,708 | ) | |||||
$ | 5,033 | $ | 7,454 | ||||||
Internally developed software costs not meeting general release threshold | 3,122 | 3,005 | |||||||
Trademarks, trade names (non-amortizable) | 400 | 400 | N/A | ||||||
$ | 8,555 | $ | 10,859 |
2019, remaining | $ | 1,337 | |
2020 | 2,132 | ||
2021 | 1,286 | ||
2022 | 278 | ||
2023 | — | ||
Thereafter | — | ||
Total | $ | 5,033 |
June 30, 2019 | ||||||||||
Principal amount of 2024 Notes outstanding | $ | 80,000 | ||||||||
Unamortized discount (including unamortized debt issuance cost) | (20,745 | ) | ||||||||
Total long-term portion of notes payable | $ | 59,255 | ||||||||
Equity component of notes | $ | 17,624 | ||||||||
Less: Deferred tax liability | (4,065 | ) | ||||||||
Less: Issuance costs | (1,094 | ) | ||||||||
Capital in excess of Par Value | $ | 12,465 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net loss | $ | (1,109 | ) | $ | (1,323 | ) | $ | (3,838 | ) | $ | (1,255 | ) | |||
Basic: | |||||||||||||||
Shares outstanding at beginning of period | 16,044 | 16,286 | 16,041 | 15,969 | |||||||||||
Weighted average shares issued/(repurchased) during the period, net | 246 | 44 | 44 | 24 | |||||||||||
Weighted average common shares, basic | 16,290 | 16,330 | 16,085 | 15,993 | |||||||||||
Net loss per common share, basic | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.24 | ) | $ | (0.08 | ) | |||
Diluted: | |||||||||||||||
Weighted average common shares, basic | 16,290 | 16,330 | 16,085 | 15,993 | |||||||||||
Dilutive impact of stock options and restricted stock awards | — | — | — | — | |||||||||||
Weighted average common shares, diluted | 16,290 | 16,330 | 16,085 | 15,993 | |||||||||||
Net loss per common share, diluted | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.24 | ) | $ | (0.08 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues: | |||||||||||||||
Restaurant/Retail | $ | 28,262 | $ | 34,827 | $ | 57,822 | $ | 74,347 | |||||||
Government | 15,985 | 17,744 | 31,107 | 33,885 | |||||||||||
Total | $ | 44,247 | $ | 52,571 | $ | 88,929 | $ | 108,232 | |||||||
Operating loss: | |||||||||||||||
Restaurant/Retail | $ | (4,615 | ) | $ | (2,800 | ) | $ | (7,597 | ) | $ | (3,408 | ) | |||
Government | 1,518 | 2,012 | 2,881 | 3,278 | |||||||||||
Other | (356 | ) | (336 | ) | (838 | ) | (856 | ) | |||||||
(3,453 | ) | (1,124 | ) | (5,554 | ) | (986 | ) | ||||||||
Other expense, net | (374 | ) | (384 | ) | (804 | ) | (335 | ) | |||||||
Interest expense, net | (1,244 | ) | (78 | ) | (1,390 | ) | (119 | ) | |||||||
Loss before provision for income taxes | $ | (5,071 | ) | $ | (1,586 | ) | $ | (7,748 | ) | $ | (1,440 | ) | |||
Depreciation, amortization and accretion: | |||||||||||||||
Restaurant/Retail | $ | 1,201 | $ | 1,057 | $ | 2,069 | $ | 1,965 | |||||||
Government | 18 | 6 | 37 | 11 | |||||||||||
Other | 890 | 154 | 1,015 | 303 | |||||||||||
Total | $ | 2,109 | $ | 1,217 | $ | 3,121 | $ | 2,279 | |||||||
Capital expenditures including software costs: | |||||||||||||||
Restaurant/Retail | $ | 778 | $ | 1,126 | $ | 1,841 | $ | 2,265 | |||||||
Government | — | 37 | 176 | 37 | |||||||||||
Other | 616 | 1,002 | 1,300 | 1,533 | |||||||||||
Total | $ | 1,394 | $ | 2,165 | $ | 3,317 | $ | 3,835 | |||||||
Revenues by country: | |||||||||||||||
United States | $ | 41,657 | $ | 48,845 | $ | 83,582 | $ | 101,523 | |||||||
Other Countries | 2,590 | 3,726 | 5,347 | 6,709 | |||||||||||
Total | $ | 44,247 | $ | 52,571 | $ | 88,929 | $ | 108,232 |
June 30, 2019 | December 31, 2018 | ||||||
Restaurant/Retail | $ | 70,275 | $ | 68,004 | |||
Government | 11,214 | 9,867 | |||||
Other | 73,583 | 16,810 | |||||
Total | $ | 155,072 | $ | 94,681 |
June 30, 2019 | December 31, 2018 | ||||||
United States | $ | 145,430 | $ | 84,652 | |||
Other Countries | 9,642 | 10,029 | |||||
Total | $ | 155,072 | $ | 94,681 |
June 30, 2019 | December 31, 2018 | ||||||
Restaurant/Retail | $ | 10,315 | $ | 10,315 | |||
Government | 736 | 736 | |||||
Total | $ | 11,051 | $ | 11,051 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Restaurant/Retail reporting segment: | |||||||||||
McDonald’s Corporation | 10 | % | 22 | % | 10 | % | 25 | % | |||
Yum! Brands, Inc. | 13 | % | 12 | % | 13 | % | 12 | % | |||
Government reporting segment: | |||||||||||
U.S. Department of Defense | 36 | % | 34 | % | 35 | % | 31 | % | |||
All Others | 41 | % | 32 | % | 42 | % | 32 | % | |||
100 | % | 100 | % | 100 | % | 100 | % |
Level 3 Inputs | |||
Liabilities | |||
Balance at December 31, 2018 | $ | 2,550 | |
New level 3 liability | — | ||
Total gains (losses) reported in earnings | — | ||
Settlement of Level 3 liabilities | (2,550 | ) | |
Balance at June 30, 2019 | $ | — |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use Of Proceeds |
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit Number | Incorporated by reference into this Quarterly Report on Form 10-Q | Date Filed or Furnished | ||
Exhibit Description | Form | Exhibit No. | ||
4.1 | 8-K | 4.1 | 4/15/2019 | |
4.2 | 8-K | 4.1 (Exhibit A to the Indenture filed as Exhibit 4.1) | 4/15/2019 | |
10.1 | S-8 (File No. 333-232589) | 99.1 | 7/9/2019 | |
10.2 | Filed herewith | |||
10.3 | Filed herewith | |||
10.4 | Filed herewith | |||
31.1 | Filed herewith | |||
31.2 | Filed herewith | |||
32.1 | Furnished herewith | |||
32.2 | Furnished herewith | |||
101.INS | XBRL Instance Document | Filed herewith | ||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith |
PAR TECHNOLOGY CORPORATION | ||
(Registrant) | ||
Date: | August 7, 2019 | /s/ Bryan A. Menar |
Bryan A. Menar | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
Name of the Participant: | |
Grant Date: | |
Total number of Shares subject to the Option: | |
Exercise Price per Share: | |
Total Exercise Price: | |
Expiration Date: | |
Type of Option: | ☐ Incentive Stock Option ☐ Non-qualified Stock Option |
Vesting Schedule: | Subject to the Participant’s continued employment or service with the Company or any of its subsidiaries or affiliates through the applicable Vesting Date, the Option shall vest and become exercisable in accordance with the following schedule: |
Change of Control (as defined in the Plan): |
Submitted by: | Accepted by: | |
Participant | PAR Technology Corporation | |
Signature | By | |
Print Name | Title | |
Name of the Participant: | |
Grant Date: | |
Number of shares of Restricted Stock: | |
Vesting Schedule: | Time-vesting. [●] shares of Restricted Stock shall vest in accordance with the following schedule, provided, the Participant is employed with or providing services to the Company or any of its subsidiaries or affiliates through the applicable Vesting Date: Performance vesting. [●] shares of Restricted Stock shall vest in accordance with the following schedule, provided, (a) the performance target(s)* set forth in Schedule A for the applicable performance year(s) is achieved and (b) the Participant is employed with or providing services to the Company or any of its subsidiaries or affiliates through the applicable Vesting Date: [*performance targets selected by the Committee for a performance year(s) might include (without limitation) profits or net income before taxes, revenue or revenue growth, earnings before interest, tax, depreciation, and amortization, earnings per share, total shareholder return either alone or relative to one or more stock market or financial indices, budget objectives, working capital, market share, customer and market reputation, increases in customer base or construct, measures of customer satisfaction, cost reductions, mergers, acquisitions or divestitures, productivity measures, or operating efficiencies.] |
Change of Control (as defined in the Plan): | |
Death: | [Except as otherwise set forth in the specific Award] As an exception to the Vesting Schedule, in the event the Participant’s employment or service with the Company or any of its subsidiaries or affiliates is terminated due to the Participant’s death, all unvested time vesting shares of Restricted Stock shall immediately vest. |
1. | The Taxpayer’s name, address and taxpayer identification number are as follows: |
1. | The property with respect to which this election is being made is: _________________ shares of common stock of PAR Technology Corporation, a Delaware corporation (the “Company”), $0.02 par value per share (the “Shares”). |
2. | The date of the transfer of the Shares is _________, 20___. This election is made for the taxable year of the Taxpayer ending December 31, 20____. |
3. | The nature of the restrictions to which the Shares are subject is as follows: The Shares may be forfeited if Taxpayer’s continuous service with the Company terminates. |
4. | The Fair Market Value of such Shares at the time of transfer to the Taxpayer, determined without regard to any lapse restrictions as defined in Reg. § 1.83-3(i), is ____________ per share. |
5. | The amount paid for the Shares is $0 per share. |
6. | A copy of this election has been furnished by personal delivery to the Company. |
Name of the Participant: | Savneet Singh | |
Grant Date: | May 13, 2019 | |
Number of shares of Restricted Stock: | 80,000 | |
Vesting Schedule: | The shares of Restricted Stock shall vest in accordance with the following schedule, provided (a) the Performance Target(s) linked to the shares of Restricted Stock are satisfied on or before March 31, 2020 and (b) the Participant’s continued employment as Chief Executive Officer (“CEO”) of the Company through and including the applicable Vesting Date. [Insert Performance Targets] | |
Distribution Schedule: | Vested shares of Restricted Stock shall be distributed to the Participant, without restriction, in equal installments in accordance with the following schedule, provided (a) (i) the Participant remains employed as CEO or is otherwise providing services to the Company continuously through and including the applicable Distribution Date or (ii) the Participant’s employment ends earlier other than on account of a “for cause”* termination by the Company, and (b) the Participant has complied with the restrictive covenants set forth in the Non-Disclosure; Non-Solicitation Agreement dated December 4, 2018 (“NDA”) and the Award Agreement through and including the applicable Distribution Date(s) (or if earlier, the end of the Participant’s employment). | |
Distribution Date: | Vested Shares of Restricted Stock to be Released | |
March 31, 2020 | Up to 26,666 shares | |
March 31, 2021 | Up to 26,667 shares | |
March 31, 2022 | Up to 26,667 shares | |
(*as such term is defined in the Employment Letter dated March 22, 2019 between the Participant and the Company (“Letter”)) |
Change of Control (as defined in the Plan): | As exceptions to the Vesting and Distribution Schedules, the following provisions shall apply to this Award: In the event of the occurrence of a Change of Control on or prior to March 31, 2020, the Participant’s achievement of the Performance Targets shall be evaluated as of immediately prior to the effective date of the Change of Control, and to the extent that any of the Performance Targets have been achieved, then the portion of the Award linked to the Performance Targets that have been achieved shall vest and be distributed to the Participant on the effective date of the Change of Control and the shares of Restricted Stock linked to Performance Targets that have not yet been satisfied solely due to the timing of the Change of Control shall be converted into a time-vesting award and shall (time) vest in equal installments on the Distribution Dates and be distributed to the Participant on such dates, so long as both (a) (i) the Participant remains employed as CEO or is otherwise providing services to the Company continuously through and including the applicable Distribution Date or (ii) the Participant’s employment ends other than on account of a “for cause” termination by the Company, and (b) the Participant has complied with the restrictive covenants set forth in the NDA and the Award Agreement through and including the applicable the Distribution Date(s) (or if earlier, the end of the Participant’s employment); provided, however, that if the Participant’s employment is terminated by the Company (or its successor) through an Involuntary Termination* or the Participant resigns his employment on account of a good reason*, in either case during the one year period beginning on the effective date of the Change of Control and ending on the first anniversary of the occurrence of the Change of Control, then the remaining undistributed portion of the Award shall become vested and be distributed to the Participant at such time. (*as each term is defined in the Letter) If such Change of Control results in another entity becoming a direct or indirect parent of the Company (or if the Company does not survive, of its successor) (such entity being referred to as a “Subsequent Parent Entity”), then, with respect to the unearned portion of this Award, such Subsequent Parent Entity shall substitute its shares of common stock (the “Substitute Shares”) for the Restricted Stock; and provided further, that if on the applicable vesting date (x) such Subsequent Parent Entity’s common stock is not actively traded on a public securities market or (y) the Substitute Shares are not registered for trading on such public securities market in compliance with governing securities laws, the portion of the Award otherwise payable in Substitute Shares shall be paid in that amount of cash (in U.S. dollars) equal to the value of the vested Substitute Shares. Notwithstanding the foregoing, if the Substitute Shares are able to be sold into such public securities market immediately after their issuance without registration under the applicable governing securities laws (assuming that the Participant is not in possession of material nonpublic information or is otherwise unable to sell the Substitute Shares in compliance with applicable law at that time), then the Substitute Shares shall be issued to the Participant. In the event of a Change of Control after March 31, 2020, then any earned Shares (as defined below in the Award Agreement) not yet distributed to the Participant shall be distributed to the Participant immediately prior to such Change of Control. |
Involuntary Termination or termination for good reason (as each term is defined in the Letter) and not in connection with a Change of Control: | As exceptions to the Vesting and Distribution Schedules, in the event the Participant’s employment is terminated (a) by the Company on or prior to March 31, 2020 through an Involuntary Termination or (b) by the Participant on or prior to March 31, 2020 for a good reason, then, subject to the Participant’s continued compliance with the restrictive covenants set forth in the NDA and the Award Agreement and the Participant’s delivery of an effective general release (as contemplated by the Letter (“Release”)), (y) all shares of Restricted Stock that have vested, but have not been distributed to the Participant in accordance with the Distribution Schedule, as of the effective date of the Participant’s Involuntary Termination or termination for good reason, shall be distributed to the Participant and (z) all shares of Restricted Stock linked to Performance Targets that have not yet been satisfied solely due to the timing of the Participant’s Involuntary Termination or termination for good reason, shall convert into time vesting shares of Restricted Stock and such shares shall (time) vest in equal installments on the Distribution Dates and be distributed to the Participant on such dates as if the Participant had remained employed. In the event that the Participant’s employment is terminated (a) by the Company through an Involuntary Termination after March 31, 2020 or (b) by the Participant after March 31, 2020 for a good reason, then any earned Shares (as defined below in the Award Agreement) not yet distributed to the Participant shall be distributed to the Participant, subject to the Participant’s continued compliance with the restrictive covenants set forth in the NDA and the Award Agreement and the Participant’s delivery of an effective Release. For avoidance of doubt, in the event of the occurrence of a Change of Control, the provisions of this section shall be subject and subordinate to the section entitled “Change of Control” as set forth above to the extent of any conflict between the two sections. | |
Termination of employment due to death | As an exception to the Distribution Schedule, in the event the Participant's employment is terminated on or prior to March 31, 2020 due to the Participant's death, then all vested but undistributed shares of Restricted Stock shall be fully distributed. | |
Termination of employment due to any circumstance other than (1) death, (2) for cause, (3) Involuntary Termination, (4) good reason or (5) in connection with a Change of Control | As an exception to the Distribution Schedule, in the event the Participant's employment is terminated on or prior to March 31, 2020 for any reason other than on account of (1) death, (2) for cause, (3) Involuntary Termination, (4) termination for good reason, or (5) not in connection with a Change of Control, then, subject to the Participant’s continued compliance with the restrictive covenants set forth in the NDA and the Award Agreement, all shares of Restricted Stock that have vested as of the effective date of the Participant’s termination shall be distributed to the Participant ratably on March 31, 2020, March 31, 2021 and March 31, 2022. |
PAR Technology Corporation | /s/ Savneet Singh | |
Savneet Singh Participant & Signature | ||
By | /s/ Bryan A. Menar | |
Title: | CFO |
1. | The Taxpayer’s name, address and taxpayer identification number are as follows: |
1. | The property with respect to which this election is being made is: _________________ shares of common stock of PAR Technology Corporation, a Delaware corporation (the “Company”), $0.02 par value per share (the “Shares”). |
2. | The date of the transfer of the Shares is _________, 20___. This election is made for the taxable year of the Taxpayer ending December 31, 20____. |
3. | The nature of the restrictions to which the Shares are subject is as follows: The Shares may be forfeited if Taxpayer’s continuous service with the Company terminates. |
4. | The Fair Market Value of such Shares at the time of transfer to the Taxpayer, determined without regard to any lapse restrictions as defined in Reg. § 1.83-3(i), is ____________ per share. |
5. | The amount paid for the Shares is $0 per share. |
6. | A copy of this election has been furnished by personal delivery to the Company. |
1. | I have reviewed this report on Form 10-Q of PAR Technology Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 7, 2019 | /s/ Savneet Singh |
Savneet Singh | |
Chief Executive Officer & President | |
(Principal Executive Officer) |
1. | I have reviewed this report on Form 10-Q of PAR Technology Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 7, 2019 | /s/ Bryan A. Menar |
Bryan A. Menar | |
Chief Financial and Accounting Officer | |
(Principal Financial Officer) |
(i) | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 7, 2019 |
/s/ Savneet Singh |
Savneet Singh |
Chief Executive Officer & President |
(Principal Executive Officer) |
(i) | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 7, 2019 |
/s/ Bryan A. Menar |
Bryan A. Menar |
Chief Financial and Accounting Officer |
(Principal Financial Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Aug. 01, 2019 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PAR TECHNOLOGY CORP | |
Entity Central Index Key | 0000708821 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,342,924 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Shareholders’ Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.02 | $ 0.02 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.02 | $ 0.02 |
Common stock, authorized (in shares) | 29,000,000 | 29,000,000 |
Common stock, issued (in shares) | 18,005,285 | 17,879,761 |
Common stock, outstanding (in shares) | 16,297,176 | 16,171,652 |
Treasury stock, at cost (in shares) | 1,708,109 | 1,708,109 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenue | $ 44,247 | $ 52,571 | $ 88,929 | $ 108,232 |
Costs of sales: | ||||
Contract | 35,674 | 41,211 | 70,592 | 85,025 |
Cost of sales | 35,674 | 41,211 | 70,592 | 85,025 |
Gross margin | 8,573 | 11,360 | 18,337 | 23,207 |
Operating expenses: | ||||
Selling, general and administrative | 9,059 | 9,020 | 17,623 | 17,620 |
Research and development | 2,725 | 3,222 | 5,785 | 6,090 |
Amortization of identifiable intangible assets | 242 | 242 | 483 | 483 |
Operating expenses | 12,026 | 12,484 | 23,891 | 24,193 |
Operating loss | (3,453) | (1,124) | (5,554) | (986) |
Other expense, net | (374) | (384) | (804) | (335) |
Interest expense, net | (1,244) | (78) | (1,390) | (119) |
Loss before benefit from income taxes | (5,071) | (1,586) | (7,748) | (1,440) |
Benefit from income taxes | 3,962 | 263 | 3,910 | 185 |
Net loss | $ (1,109) | $ (1,323) | $ (3,838) | $ (1,255) |
Basic Loss per Share: | ||||
Net loss (in dollars per share) | $ (0.07) | $ (0.08) | $ (0.24) | $ (0.08) |
Diluted Loss per Share: | ||||
Net loss (in dollars per share) | $ (0.07) | $ (0.08) | $ (0.24) | $ (0.08) |
Weighted average shares outstanding | ||||
Basic (in shares) | 16,290 | 16,330 | 16,085 | 15,993 |
Diluted (in shares) | 16,290 | 16,330 | 16,085 | 15,993 |
Product | ||||
Revenue | $ 14,728 | $ 20,883 | $ 30,245 | $ 47,207 |
Costs of sales: | ||||
Contract | 11,412 | 15,339 | 22,653 | 34,779 |
Cost of sales | 11,412 | 15,339 | 22,653 | 34,779 |
Service | ||||
Revenue | 13,534 | 13,944 | 27,577 | 27,140 |
Costs of sales: | ||||
Contract | 9,876 | 10,205 | 19,903 | 19,752 |
Cost of sales | 9,876 | 10,205 | 19,903 | 19,752 |
Contract | ||||
Revenue | 15,985 | 17,744 | 31,107 | 33,885 |
Costs of sales: | ||||
Contract | 14,386 | 15,667 | 28,036 | 30,494 |
Cost of sales | $ 14,386 | $ 15,667 | $ 28,036 | $ 30,494 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (1,109) | $ (1,323) | $ (3,838) | $ (1,255) |
Other comprehensive income (loss), net of applicable tax: | ||||
Foreign currency translation adjustments | 131 | (625) | 121 | (202) |
Comprehensive loss | $ (978) | $ (1,948) | $ (3,717) | $ (1,457) |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
Statement of Stockholders' Equity [Abstract] | ||
Convertible notes conversion discount, taxes | $ 0.0 | $ 4.1 |
Issuance cost, equity component | $ 1.1 | $ 1.1 |
Basis of presentation |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited interim consolidated financial statements of PAR Technology Corporation (the “Company” or “PAR”, "we","us") have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Article 8 of Regulation S-X pertaining to interim financial statements. Accordingly, they do not include all information and footnotes required by GAAP for annual financial statements. In the opinion of management, such unaudited interim consolidated financial statements include all normal and recurring adjustments necessary in order to make the unaudited interim consolidated financial statements not misleading and to provide a fair presentation of the results for the interim periods included in this Quarterly Report on Form 10-Q (“Quarterly Report”). Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results of operations that may be expected for any future period. The balance sheet at December 31, 2018 has been derived from the Company’s audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission (“SEC”). The preparation of the unaudited interim consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, stock based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment, identifiable intangible assets and goodwill, valuation allowances for receivables, inventories and deferred income tax assets, and measurement of contingent consideration at fair value. Actual results could differ from those estimates. The unaudited interim consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) on March 18, 2019. |
Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Beginning on January 1, 2018, the Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the company expects to be entitled in exchange for those goods or services. The Company applies the five-step model, as described in ASU 2014-09 Revenue from Contracts with Customers, to contracts when it is probable the Company will collect the consideration it expects in exchange for the goods and services transferred to the customer. The following steps are applied to achieve that principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation The Company's performance obligations are satisfied when services are received by the customer and when the customer takes title to the product and assumes the significant risks and rewards of ownership. Performance Obligations Outstanding Our performance obligations outstanding represent the transaction price of firm, non-cancellable orders, with expected delivery dates to customers subsequent to June 30, 2019 and December 31, 2018, respectively, for work that has not been performed. The aggregate outstanding performance obligations attributable to our two reporting segments, Restaurant/Retail and Government, is as follows (in thousands):
Most performance obligations over one year are related to service and support contracts, approximately 71% of which we expect to fulfill within the one-year period and 100% within 60 months. During the three and six months ended June 30, 2019, we recognized revenue of $3.4 million and $8.1 million, respectively, that was included in contract liabilities at the beginning of the period. Disaggregated Revenue We disaggregate revenue from contracts from customers by major product group for each of the reporting segments as we believe it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Disaggregation of revenue for the three and six months ended June 30, 2019 and June 30, 2018 is as follows (in thousands):
Practical Expedients and Exemptions We generally expense sales commissions when incurred because the amortization period is less than one year or the total amount of commissions is immaterial. We record these expenses in selling, general and administrative. We elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (for example, sales, use, value added, and some excise taxes). |
Assets Held for Sale |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Assets held for sale | Asset Held for Sale During the quarter ended June 30, 2019, the Company's subsidiary ParTech, Inc. entered into an asset purchase agreement to sell substantially all assets relating to the SureCheck product group within the Company's Restaurant/Retail segment; the closing of the sale transaction is subject to conditions precedent, some of which are not within the Company's control. The sale does not qualify for treatment as a discontinued operation, and therefore, the SureCheck product group is included in the Company’s continuing operations for all periods presented. During the three and six months ended June 30, 2019, the Company recorded $1,369,000 of expenses related to the expected sale of the SureCheck product group, this represents $581,000 related to reserve for inventory and $788,000 in costs of service related to impairment of intangible assets for the SureCheck product group. The Company classified the net book value of the SureCheck product group as asset held for sale for the quarter ended June 30, 2019, as presented in the following table (in thousands):
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Adoption Effective January 1, 2019, the Company adopted the new lease accounting standard, ASC 842, Leases, using the modified retrospective method of applying the new standard at the adoption date. In addition, the Company elected to apply the package of practical expedients permitted under the transition guidance within the new standard. This allowed the Company to carry forward historical lease classification. Adoption of this standard resulted in the recording of operating lease right-of-use (ROU) assets and corresponding operating lease liabilities of approximately $4.0 million. The Company's financial position for reporting periods beginning on or after January 1, 2019 are presented under the new guidance, while prior periods amounts are not adjusted and continue to be reported in accordance with previous guidance. A significant portion of our operating and finance lease portfolio includes corporate offices, research and development, information technology (IT) equipment, and automobiles. The majority of our leases have remaining lease terms of 1 year to 5 years. Substantially all lease expense is presented within selling, general and administrative in the consolidated statements of operations.
Supplemental cash flow information related to leases for the second quarter was as follows:
Supplemental balance sheet information related to leases for the second quarter was as follows:
Future minimum lease payments are as follows:
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Accounts Receivable |
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Accounts Receivable | Accounts Receivable The Company’s accounts receivable, net, consists of (in thousands):
At June 30, 2019 and December 31, 2018, the Company recorded allowances for doubtful accounts of $1.7 million and $1.3 million, respectively, against accounts receivable for the Restaurant/Retail reporting segment. |
Inventories |
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Inventories | Inventories Inventories are primarily used in the manufacture, maintenance and service of products within the Restaurant/Retail reporting segment. The components of inventories, net, consist of the following (in thousands):
At June 30, 2019 and December 31, 2018, the Company recorded inventory reserves of $9.9 million and $9.8 million, respectively, against inventories used in the Restaurant/Retail reporting segment, which relate primarily to service parts. |
Identifiable Intangible Assets and Goodwill |
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Identifiable Intangible Assets and Goodwill | Identifiable Intangible Assets and Goodwill Identifiable intangible assets represent intangible assets acquired by the Company in connection with its acquisition of Brink Software Inc. in 2014 ("Brink Acquisition") and software development costs. The Company capitalizes certain software development costs for software used in its Restaurant/Retail reporting segment. Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the software product meets its design specifications, including functionality, features, and technical performance requirements. Software development costs incurred after establishing technological feasibility for software sold as a perpetual license, as defined within ASC 985-20, Software – Costs of Software to be sold, Leased, or Marketed are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. Included in "Acquired and internally developed software costs" in the table below is approximately $3.1 million and $3.0 million of costs related to software products that have not satisfied the general release threshold as of June 30, 2019 and December 31, 2018, respectively. These products are expected to satisfy the general release threshold within the next 12 months. Software development is also capitalized in accordance with ASC 350-40, “Intangibles - Goodwill and Other - Internal - Use Software,” and is amortized over the expected benefit period, which generally ranges from three to five years. Software development costs capitalized during the three and six months ended June 30, 2019 were $0.6 million and $1.6 million, respectively. Software development costs capitalized during the three and six months ended June 30, 2018 were $0.9 million and $1.7 million, respectively. Annual amortization, charged to cost of sales is computed using the straight-line method over the remaining estimated economic life of the product, generally three to five years. Amortization of capitalized software development costs from continuing operations for the three and six months ended June 30, 2019 were $0.7 million and $1.5 million, respectively. Amortization of capitalized software development costs from continuing operations for the three and six months ended June 30, 2018 were $1.1 million and $2.1 million, respectively. Amortization of intangible assets acquired in the Brink Acquisition amounted to $0.2 million and $0.5 million, respectively, for each of the three and six month periods ended June 30, 2019 and 2018. The components of identifiable intangible assets are (in thousands):
The expected future amortization of intangible assets, assuming straight-line amortization of capitalized software development costs and acquisition related intangibles, is as follows (in thousands):
The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. The Company operates in two reporting segments, Restaurant/Retail and Government. Goodwill impairment testing is performed at the reporting unit level. Goodwill is assigned to a specific reporting unit at the date the goodwill is initially recorded. Once goodwill has been assigned to a specific reporting segment, it no longer retains its association with a particular acquisition, and all of the activities within the reporting unit, whether acquired or organically grown, are available to support the value of the goodwill. The amount of goodwill carried by the Restaurant/Retail and Government reporting segments was $10.3 million and $0.8 million, respectively, at June 30, 2019 and December 31, 2018. No impairment charges were recorded for the period ended June 30, 2019 and year ended December 31, 2018. Approximately $2.9 million in net software costs were reclassified on the Balance Sheet to "Asset held for sale" as indicated in Note 3. |
Convertible Senior Notes |
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Convertible Senior Notes | Convertible Senior Notes On April 15, 2019, the Company sold $80.0 million aggregate principal amount of 4.500% Convertible Senior Notes due 2024 (the "Notes"). The Notes were sold pursuant to an indenture, dated April 15, 2019, between the Company and The Bank of New York Mellon Trust Company, N.A. (“Trustee”), referred to herein as the “Indenture.” The Notes are senior, unsecured obligations of the Company. The Notes pay interest at a rate equal to 4.500% per year. Interest on the Notes is payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2019. Interest accrues on the Notes from the last date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 15, 2019. Unless earlier converted, redeemed or repurchased, the Notes mature on April 15, 2024. The implied estimated effective rate of the liability component of the Notes is 10.24%. The Notes are convertible into Company common stock at an initial conversion rate of 35.0217 shares per $1,000 principal amount of Notes, subject to adjustment upon certain events. The Notes are convertible, in whole or in part, at the option of the holder, at any time prior to the close of business on the business day immediately preceding October 15, 2023, but only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on such trading day; (2) during the five consecutive business day period immediately after any five consecutive trading day period (the five consecutive trading day period being referred to as the ‘‘measurement period’’) in which the trading price per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on such trading day; (3) upon the occurrence of certain specified corporate events, including fundamental changes (as described in the Indenture); or (4) if the Company calls the Notes for redemption. In addition, regardless of the foregoing circumstances, holders may convert their Notes at any time on or after October 15, 2023 until the close of business on the second business day immediately preceding the maturity date of the Notes. Upon conversion, the Company may elect to settle by paying or delivering either solely cash, shares of Company common stock or a combination of cash and shares of common stock. In accordance with ASC 470-20, the initial measurement of the Notes at fair value resulted in a liability of $62.4 million, as such, the calculated discount resulted in an implied value of the convertible feature recognized in Capital in excess of Par Value of $17.6 million. This resulted in a $0.6 million increase reflected in interest expense, in the Company's consolidated statements of operations for the three and six months ended June 30, 2019. Issuance costs for the transaction amounted to $4.9 million and were allocated to components on a ratable basis as follows; Capital in excess of Par Value, $1.1 million, and Long-term Debt, $3.8 million. The Indenture contains covenants that, among other things, restricts the Company’s ability to merge, consolidate or sell, or otherwise dispose of, substantially all of its assets. These limitations are subject to a number of important qualifications and exceptions. The Indenture contains customary Events of Default (as defined in the Indenture), including default in the event the Company fails to pay interest on the Notes when due, and such failure continues for 30 days, or the Company fails to pay the principal of the Notes when due, including at maturity, upon redemption or otherwise; failure to comply with covenants and other obligations under the Indenture, including delivery of required notices and obligations in connection with conversion, in certain cases subject to notice and grace periods; payment defaults and accelerations with respect to other indebtedness of the Company and its significant subsidiaries in the aggregate principal amount of $10.0 million or more; failure by the Company or its significant subsidiaries to pay certain final judgments aggregating in excess of $10.0 million within 60 consecutive days of such final judgment; and specified events involving bankruptcy, insolvency or reorganization of the Company or its significant subsidiaries. Upon an Event of Default, the trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding may declare all the Notes to be due and payable immediately. In the case of Events of Default relating to bankruptcy, insolvency or reorganization, all outstanding Notes will become due and payable immediately without further action or notice. In connection with the sale of the Notes, the Company recorded an income tax benefit of $4.1 million as a discrete item for the three and six months ended June 30, 2019 as a result of the creation of a deferred tax liability associated with the portion of the Notes that was classified within stockholders' equity. While GAAP requires the offset of the deferred tax liability to be recorded in additional paid-in capital, consistent with the equity portion of the Notes, the creation of the deferred tax liability produced evidence of recoverability of deferred tax assets which resulted in the release of a valuation allowance, totaling $4.1 million, reflected as an income tax benefit in the current period. The following table summarizes information about the equity and liability components of the Notes (in thousands):
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Stock Based Compensation |
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Jun. 30, 2019 | |
Share-based Compensation [Abstract] | |
Stock Based Compensation | Stock Based Compensation The Company applies the fair value recognition provisions of ASC Topic 718. The Company recorded stock based compensation of $0.6 million and $0.9 million for the three and six month periods ended June 30, 2019, respectively. The Company recorded stock based compensation of $0.2 million and $0.4 million for the three and six month periods ended June 30, 2018, respectively. The amount recorded for the three and six months ended June 30, 2019 was, net of benefits of, $5,000 and $32,000, respectively, as the result of forfeitures of unvested stock awards prior to completion of the requisite service period and/or failure to achieve performance criteria. There were no forfeitures for the three and six months ended June 30, 2018. At June 30, 2019, the aggregate unrecognized compensation expense related to unvested equity awards was $1.9 million (net of estimated forfeitures), which is expected to be recognized as compensation expense in fiscal years 2019 through 2021. |
Net loss per share |
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Net loss per share | Net loss per share Earnings per share are calculated in accordance with ASC Topic 260, which specifies the computation, presentation and disclosure requirements for earnings per share (EPS). It requires the presentation of basic and diluted EPS. Basic EPS excludes all dilution and is based upon the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that would occur if convertible securities or other contracts to issue common stock were exercised. For the six months ended June 30, 2019, there were 469,000 anti-dilutive stock options outstanding compared to zero as of June 30, 2018. The potential effect of the conversion feature with respect to the Notes (See Note 8 - Convertible Senior Notes) was excluded from the diluted net loss per share as of June 30, 2019 as the Company's closing stock price on June 28, 2019 (the last trading day before June 30, 2019) did not exceed the initial conversion price of $28.55 per share. The potential shares from the Notes at the initial conversion rate was approximately 2,801,736 and they were considered anti-dilutive using the if-converted method. The following is a reconciliation of the weighted average of shares of common stock outstanding for the basic and diluted EPS computations (in thousands, except per share data):
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Contingencies |
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Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is subject to legal proceedings, which arise in the ordinary course of business. Additionally, U.S. Government contract costs are subject to periodic audit and adjustment. In the third quarter of 2016, the Company's Audit Committee commenced an internal investigation into conduct at the Company's China and Singapore offices to determine whether certain import/export and sales documentation activities were improper and in violation of the U.S. Foreign Corrupt Practices Act ("FCPA") and other applicable laws and certain Company policies. In the fourth quarter of 2016, the Company voluntarily notified the SEC and the U.S. Department of Justice ("DOJ") of the internal investigation, and on May 1, 2017 the Company received a document subpoena from the SEC for documents relating to the internal investigation. Following the conclusion of the Audit Committee's internal investigation, the Company voluntarily reported the relevant findings of the investigation to the China and Singapore authorities and is fully cooperating with these authorities. During the three and six months ended June 30, 2019, we recorded $0.1 million and $0.3 million of expenses relating to the internal investigation, including expenses of outside legal counsel and forensic accountants, compared to $0.3 million and $0.6 million for the three and six months ended June 30, 2018. In early April 2019, the SEC notified the Company that based on current information, it did not intend to recommend an enforcement action against the Company; shortly, thereafter, the DOJ advised that it did not intend to separately proceed. As stated above, we continue to cooperate with the China and Singapore authorities; we are currently not able to predict what actions these authorities might take, or what the likely outcome of any such actions might be, or estimate the range of reasonably possible fines or penalties, which may be material. The China and Singapore authorities have a broad range of civil and criminal sanctions, and the imposition of fines or penalties could have a material adverse effect on the Company’s business, prospects, reputation, financial condition, results of operations or cash flows. |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Related Information | Segment and Related Information The Company operates in two distinct reporting segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Restaurant/Retail reporting segment offers point-of-sale ("POS") and management technology solutions to restaurants and retail, including in the quick serve/fast casual and table service restaurant categories. This segment also offers customer support including field service, installation, Advanced Exchange, and twenty-four-hour telephone support and depot repair. The Government reporting segment performs complex technical studies, analysis, and experiments, develops innovative solutions, and provides on-site engineering in support of advanced defense, security, and aerospace systems. This segment also provides expert on-site services for operating and maintaining U.S. Government-owned communication assets. Information noted as “Other” primarily relates to the Company’s corporate, home office operations. Information as to the Company’s reporting segments is set forth below (in thousands).
The following table represents identifiable assets by reporting segment (in thousands).
The following table represents assets by country based on the location of the assets (in thousands).
The following table represents goodwill by reporting unit (in thousands).
Customers comprising 10% or more of the Company’s total revenues are summarized as follows:
No other customer within All Others represented 10% of more of the Company’s total revenue for the three and six months ended June 30, 2019 and 2018. |
Fair Value of Financial Instruments |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments have been recorded at fair value using available market information and valuation techniques. The fair value hierarchy is based upon three levels of input, which are: Level 1 — quoted prices in active markets for identical assets or liabilities (observable) Level 2 — inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable market data for essentially the full term of the asset or liability (observable) Level 3 — unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable) The Company’s financial instruments primarily consist of cash and cash equivalents, trade receivables, trade payables, debt instruments and deferred compensation assets and liabilities. The carrying amounts of cash and cash equivalents, trade receivables and trade payables as of June 30, 2019 and December 31, 2018 were considered representative of their fair values. The estimated fair value of the Company’s line of credit on June 30, 2019 and December 31, 2018 was based on variable and fixed interest rates on such respective dates and approximates their respective carrying values at June 30, 2019 and December 31, 2018. The estimated fair value of the Notes was $97.8 million at June 30, 2019 based on secondary market prices at June 28, 2019 (the last day of trading prior to June 30, 2019). The deferred compensation assets and liabilities primarily relate to the Company’s deferred compensation plan, which allows for pre-tax salary deferrals for certain key employees. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, the fair value classification as defined under FASB ASC 820, "Fair Value Measurements", because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company holds insurance investments to partially offset the Company’s liabilities under its deferred compensation plan, which are recorded at fair value each period using the cash surrender value of the insurance investments. The amounts owed to employees participating in the Deferred Compensation Plan at June 30, 2019 was $3.7 million compared to $3.4 million at December 31, 2018 and is included in other long-term liabilities on the balance sheets. Under the stock purchase agreement governing the Brink Acquisition, in the event certain defined revenues were determined to have been achieved in 2015, 2016, 2017 and 2018 ("contingent consideration period"), the Company would be obligated to pay additional purchase price consideration ("Brink Earn Out"). The fair value of the Brink Earn Out was estimated using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included the Company’s probability assessments of expected future cash flows related to the Company’s acquisition of Brink Software Inc. during the contingent consideration period, appropriately discounted considering the uncertainties associated with the obligation. Any change in the fair value adjustment was recorded in the earnings of that contingent consideration period. For the $2.6 million of Brink Earn Out targets achieved during the 2018 period, the Company paid the amount in full in March 2019. No Brink Earn Out targets had been achieved for the 2015, 2016, or 2017 years. . The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis, and are recorded as a component of other long-term liabilities on the consolidated balance sheet (in thousands):
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Related Party Transactions |
6 Months Ended |
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Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company leased its corporate wellness facility to related parties at a rate of $9,775 per month during the period of the three and six months ended June 30, 2018. The Company received complimentary memberships to this facility which were provided to local employees. Expenses incurred by the Company relating to the facility amounted to $0 and $74,000 during the six months ended June 30, 2019 and 2018, respectively. Expenses incurred by the Company relating to the facility amounted to $0 and $19,000 during the three months ended June 30, 2019 and 2018, respectively. The Company did not recognize any rental income from the related party during the three and six months ended June 30, 2019 and recognized $9,775 and $39,100 for the three and six months ended June 30, 2018. Additionally, the Company did not have any rent receivable from the related party for the periods ended June 30, 2019 or year ended December 31, 2018. This arrangement between the Company and the related party terminated on April 30, 2018. |
Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Performance Obligations | The aggregate outstanding performance obligations attributable to our two reporting segments, Restaurant/Retail and Government, is as follows (in thousands):
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Schedule of Disaggregated Revenue | Disaggregation of revenue for the three and six months ended June 30, 2019 and June 30, 2018 is as follows (in thousands):
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Assets Held for Sale (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Carrying amount of net assets classified as held for sale | The Company classified the net book value of the SureCheck product group as asset held for sale for the quarter ended June 30, 2019, as presented in the following table (in thousands):
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Leases (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Cost and Supplemental Cash Flow Information Related to Leases |
Supplemental cash flow information related to leases for the second quarter was as follows:
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Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases for the second quarter was as follows:
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Future Minimum Lease Payments | Future minimum lease payments are as follows:
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Accounts Receivable (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Net | The Company’s accounts receivable, net, consists of (in thousands):
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories are primarily used in the manufacture, maintenance and service of products within the Restaurant/Retail reporting segment. The components of inventories, net, consist of the following (in thousands):
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Identifiable Intangible Assets and Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of identifiable intangible assets, excluding discontinued operations | The components of identifiable intangible assets are (in thousands):
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Schedule of future amortization of intangible assets | The expected future amortization of intangible assets, assuming straight-line amortization of capitalized software development costs and acquisition related intangibles, is as follows (in thousands):
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Convertible Senior Notes (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Equity And Liability Components of the Notes | The following table summarizes information about the equity and liability components of the Notes (in thousands):
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Net loss per share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the weighted average shares outstanding for the basic and diluted EPS computations | The following is a reconciliation of the weighted average of shares of common stock outstanding for the basic and diluted EPS computations (in thousands, except per share data):
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Segment and Related Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of information of the company's segments | Information as to the Company’s reporting segments is set forth below (in thousands).
|
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Schedule of identifiable assets by reporting segment | The following table represents identifiable assets by reporting segment (in thousands).
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Schedule of revenue by geographic area | The following table represents assets by country based on the location of the assets (in thousands).
|
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Schedule of goodwill by reporting segment | The following table represents goodwill by reporting unit (in thousands).
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Schedule of revenue by major customers | Customers comprising 10% or more of the Company’s total revenues are summarized as follows:
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
Summary of changes in fair value of the company's Level 3 assets and liabilities that are measured at fair value on a recurring basis | The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis, and are recorded as a component of other long-term liabilities on the consolidated balance sheet (in thousands):
|
Assets Held for Sale (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Expenses related to expected sale, decrease in inventory reserves | $ (522) | $ 974 |
SureCheck | Held for sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets Held-For-Sale Related Expenses | 1,369 | |
Expenses related to expected sale, decrease in inventory reserves | 581 | |
Expense related to expected sale, impairment of intangible assets | 788 | |
Accounts receivable - net | 220 | |
Intangible assets | 2,180 | |
Inventories - net | 950 | |
Total assets | 3,350 | |
Deferred revenue | 726 | |
Other liabilities | 147 | |
Total liabilities | 873 | |
Total net assets | $ 2,477 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jan. 01, 2019 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 3,323 | |
Total | $ 3,359 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 5 years | |
Accounting Standards Update 2016-02 | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 4,000 | |
Total | $ 4,000 |
Leases - Lease Cost and Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 302 | $ 848 | ||
Operating lease cost | $ 251 | $ 708 | ||
Total lease cost | 302 | 848 | ||
Total lease cost | $ 251 | $ 708 | ||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 569 | $ 1,115 |
Leases - Supplemental Balance Sheet Information Related to Leases (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Operating lease right-of-use assets | $ 3,323 |
Operating lease liabilities - current portion | 1,206 |
Operating lease liabilities - net of current portion | 2,153 |
Total operating lease liabilities | $ 3,359 |
Weighted-average remaining lease term, operating leases | 3 years 11 months |
Weighted-average discount rate, operating leases | 4.00% |
Leases - Future Minimum Lease Payments for Operating Leases (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Operating Leases, After Adoption of 842: | |
2019 | $ 833 |
2020 | 1,034 |
2021 | 762 |
2022 | 582 |
2023 | 578 |
Thereafter | 75 |
Total lease payments | 3,864 |
Less: interest | (505) |
Total | $ 3,359 |
Accounts Receivable (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Accounts Receivable [Abstract] | ||
Accounts receivable - net | $ 25,886 | $ 26,219 |
Government | ||
Accounts Receivable [Abstract] | ||
Accounts receivable - net | 7,568 | 8,537 |
Government | Billed | ||
Accounts Receivable [Abstract] | ||
Accounts receivable - net | 7,782 | 9,100 |
Government | Advanced billings | ||
Accounts Receivable [Abstract] | ||
Accounts receivable - net | (214) | (563) |
Restaurant/Retail | ||
Accounts Receivable [Abstract] | ||
Accounts receivable - net | 18,318 | 17,682 |
Allowance for doubtful accounts | $ 1,700 | $ 1,300 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Finished goods | $ 7,533 | $ 12,472 |
Work in process | 466 | 67 |
Component parts | 6,903 | 4,716 |
Service parts | 5,531 | 5,482 |
Inventories-net | 20,433 | 22,737 |
Inventory reserves | $ 9,900 | $ 9,800 |
Identifiable Intangible Assets and Goodwill - Expected Future Amortization (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Total | $ 5,033 | $ 7,454 |
Acquired and internally developed software costs | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2019, remaining | 1,337 | |
2020 | 2,132 | |
2021 | 1,286 | |
2022 | 278 | |
2023 | 0 | |
Thereafter | 0 | |
Total | $ 5,033 |
Convertible Senior Notes - Summary of Information about the Equity and Liability Components of Notes (Details) - USD ($) |
Jun. 30, 2019 |
Apr. 15, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Long-term debt | $ 59,255,000 | $ 0 | |
Less: Deferred tax liability | (4,065,000) | ||
Less: Issuance costs | 1,100,000 | ||
Convertible Notes | Convertible Senior Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Principal amount of 2024 Notes outstanding | 80,000,000 | $ 80,000,000.0 | |
Unamortized discount (including unamortized debt issuance cost) | (20,745,000) | ||
Long-term debt | 59,255,000 | ||
Equity component of notes | 17,624,000 | $ 17,600,000 | |
Less: Issuance costs | 1,094,000 | ||
Capital in excess of Par Value | $ 12,465,000 |
Stock Based Compensation (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Compensation [Abstract] | ||||
Equity based compensation | $ 600,000 | $ 200,000 | $ 850,000 | $ 431,000 |
Stock-based compensation expense, tax benefit | 5,000 | $ 0 | 32,000 | $ 0 |
Unrecognized compensation expense | $ 1,900,000 | $ 1,900,000 |
Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Expenses relating to investigation | $ 0.1 | $ 0.3 | $ 0.3 | $ 0.6 |
Segment and Related Information - Revenue by Major Customers (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Operating segments | Restaurant/Retail | McDonald’s Corporation | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 10.00% | 22.00% | 10.00% | 25.00% |
Operating segments | Restaurant/Retail | Yum! Brands, Inc. | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 13.00% | 12.00% | 13.00% | 12.00% |
Operating segments | Government | U.S. Department of Defense | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 36.00% | 34.00% | 35.00% | 31.00% |
Other | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 41.00% | 32.00% | 42.00% | 32.00% |
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Fair value of Notes | $ 97,800 | ||
Amounts owed to employees participating in the Deferred Compensation Plan | 3,700 | $ 3,400 | |
Payment for contingent consideration associated with Brink Earn Out | 2,550 | $ 10,059 | 2,600 |
Obligations | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 2,550 | ||
New level 3 liability | 0 | ||
Total gains (losses) reported in earnings | 0 | ||
Settlement of Level 3 liabilities | (2,550) | ||
Balance at end of period | $ 0 | $ 2,550 |
Related Party Transactions (Details) - Corporate Wellness Facility - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Related Party Transaction [Line Items] | |||||
Monthly rental income from related parties | $ 9,775,000 | $ 9,775 | |||
Expenses incurred | $ 0 | 19,000 | $ 0 | 74,000 | |
Rental income | |||||
Related Party Transaction [Line Items] | |||||
Rental income received | 0 | $ 9,775 | 0 | $ 39,100 | |
Rent receivable | $ 0 | $ 0 | $ 0 |
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