EX-99.1 2 a8k991.htm EXHIBIT 99.1 Exhibit


par_logoa01.jpg
 
FOR RELEASE:
CONTACT:
  New Hartford, NY, March 12, 2020
Christopher R. Byrnes (315) 738-0600  ext. 6226
cbyrnes@partech.com,  www.partech.com

PAR TECHNOLOGY CORPORATION ANNOUNCES 2019 FOURTH QUARTER AND FULL YEAR RESULTS

New Hartford, NY- 3/12/2020 -- PAR Technology Corporation (NYSE: PAR) ("Company" or "PAR") today announced its results for its fourth quarter and for the year ended December 31, 2019.

Summary of Fiscal 2019 Fourth Quarter Financial Results
Revenues were reported at $52.9 million for the fourth quarter of 2019, compared to $46.7 million for the same period in 2018, a 13.4% increase.
GAAP net loss for the fourth quarter of 2019 was $5.8 million, or $0.35 loss per share, compared to the GAAP net loss of $6.2 million, or $0.38 loss per share reported for the same period in 2018.
Non-GAAP net loss for the fourth quarter of 2019 was $4.4 million, or $0.27 loss per share, compared to non-GAAP net loss of $3.7 million, or $0.23 loss per share, for the same period in 2018.

Summary of Full Year Financial Results
Revenues were reported at $187.2 million for the year ended December 31, 2019, compared to $201.2 million for the same period in 2018, a 7.0% decrease.
GAAP net loss for the year ended December 31, 2019 was $15.6 million, or $0.96 loss per share, a decrease from the GAAP net loss of $24.1 million, or $1.50 loss per share reported for the same period in 2018.
Non-GAAP net loss for the year ended December 31, 2019 was $9.3 million, or $0.57 loss per share, compared to non-GAAP net loss of $5.0 million or $0.31 loss per share, for the same period in 2018.

A reconciliation and description of non-GAAP financial measures to corresponding GAAP financial measures are included in the tables at the end of this press release.

“Our fourth quarter numbers reflect a growing company amidst a continued transition. We are moving away from a software license and hardware sales model to a subscription model that provides recurring revenues, offers considerable customer benefits and will produce solid profitability for our Company in the long term. We are building an industry leading restaurant management platform by accelerating both our organic and inorganic growth, with a constant focus on long term success,” commented Savneet Singh, PAR Technology CEO & President. “We are experiencing strong demand for our SaaS solutions, and are excited about the successful integration and performance of recently acquired businesses along with our recently introduced payment services solution. We are carefully monitoring the market impacts surrounding the recent Coronavirus outbreaks and are taking steps to mitigate near-term supply chain issues





and challenges for our customers. We continue to prioritize the health and safety of our employees and have strengthened our oversight given the current concerns.”

Highlights of the Fourth Quarter 2019:
-- Brink ARR* at end of Q4 '19 now totals $19.2 million - an increase of 32% and $4.7 million from end of Q4 '18
-- New store activations in Q4 totaled 622 sites
-- Brink bookings in Q4 '19 - 913 restaurants
-- Active Brink sites at end of December now total 9,800 restaurants (net of churn)
-- Brink Open Orders (backlog) totaled 1,390 stores at end of Q4
-- Brink bookings in Q4' 19 ASP** = over $200 per month
*ARR - Run rate of annual recurring revenues - SaaS and support revenues
**ASP - Average selling price SaaS and support revenues

Conference Call.

There will be a conference call at 4:30 p.m. (Eastern) on March 12, 2020, during which the Company’s management will discuss the financial results for its fourth quarter and full year ended December 31, 2019.  To participate in the call, please call 844-419-5412, approximately 10 minutes in advance.  No passcode is required to participate in the live call or to listen to the replay version.  Individual & Institutional Investors will have the opportunity to listen to the conference call/event over the internet by visiting the Company’s website at www.partech.com/about/news.  Alternatively, listeners may access an archived version of the presentation call after 7:30 p.m. on March 12, 2020 through March 19, 2020 by dialing 855-859-2056 and using conference ID 6782657.

About PAR Technology Corporation.

PAR is a customer success-driven, global restaurant/retail technology company.  PAR has over 40 years of experience and 100,000+ restaurants in more than 110 countries that are utilizing its point of sale hardware and software. PAR’s Brink integration ecosystem enables quick service, fast casual, table service, and cloud restaurants to improve their operational efficiency by combining its cloud-based POS software with the world’s leading restaurant technology platforms.  PAR’s Government segment is a leader in providing computer-based system design, engineering and technical services to the Department of Defense and various federal agencies. PAR Technology Corporation's stock is traded on the New York Stock Exchange under the symbol PAR. For more information, visit www.partech.com or connect with PAR on Facebook at www.facebook.com/parpointofsale or Twitter at www.twitter.com/Par_tech.


Forward-Looking Statements.

This press release contains “forward-looking statements” within the meaning of Section 21E of the Exchange Act, Section 27A of the Securities Act, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of our future operations, financial condition, business strategies





and prospects. Forward-looking statements are generally identified by words such as “anticipate,” “believe,” “belief,” “continue,” “could,” “expect,” “estimate,” “intend,” “may,” “opportunity,” “plan,” “should,” “will,” “would,” “will likely result” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those expressed in, or implied by, the forward-looking statements, including: risks related to delays in new product development and/or product introduction; changes in customer base, or in product and service demands from our customers, particularly as to those restaurant chain customers and the U.S. Department of Defense that represent a significant portion of our revenue; risks associated with the internal investigation into conduct at our China and Singapore offices, including sanctions and fines that may be imposed by China and Singapore authorities; our ability to successfully integrate our recent acquisitions and realize expected synergies therefrom; and our ability to execute our business plan and grow our Brink business. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our filings with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.






###





PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
December 31,
Assets
2019
 
2018
Current assets:
 
 
 
Cash and cash equivalents
$
28,036

 
$
3,485

Accounts receivable-net
41,774

 
26,219

Inventories-net
19,326

 
22,737

Other current assets
4,427

 
3,251

Total current assets
93,563

 
55,692

Property, plant and equipment - net
14,351

 
12,575

Goodwill
41,386

 
11,051

Intangible assets - net
32,948

 
10,859

Lease right-of-use assets
3,017

 

Other assets
4,347

 
4,504

Total Assets
$
189,612

 
$
94,681

Liabilities and Shareholders’ Equity
 

 
 

Current liabilities:
 

 
 

Current portion of long-term debt
$
630

 
$

Borrowings on line of credit

 
7,819

Accounts payable
16,385

 
12,644

Accrued salaries and benefits
7,769

 
5,940

Accrued expenses
3,176

 
2,113

Lease liability current portion
2,060

 

Customer deposits and deferred service revenue
12,084

 
9,851

Other current liabilities

 
2,550

Total current liabilities
42,104

 
40,917

Lease liabilities - net of current portion
1,021

 

Long-term debt
62,414

 

Deferred revenue – noncurrent
3,916

 
4,407

Other long-term liabilities
7,310

 
3,411

Total liabilities
116,765

 
48,735

Shareholders’ Equity:
 
 
 

Preferred stock, $.02 par value, 1,000,000 shares authorized, none outstanding

 

Common stock, $.02 par value, 29,000,000 shares authorized; 18,360,205 and 17,879,761 shares issued, 16,629,177 and 16,171,652 outstanding at December 31, 2019 and December 31, 2018, respectively
367

 
357

Capital in excess of par value
94,372

 
50,251

Retained earnings
(10,144
)
 
5,427

Accumulated other comprehensive loss
(5,368
)
 
(4,253
)
Treasury stock, at cost, 1,731,028 and 1,708,109 shares at December 31, 2019 and December 31, 2018, respectively
(6,380
)
 
(5,836
)
Total shareholders’ equity
72,847

 
45,946

Total Liabilities and Shareholders’ Equity
$
189,612

 
$
94,681







PAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 
Three months ended December 31,
 
Year ended December 31,
 
2019
 
2018
 
2019
 
2018
Net revenues:
 
 
 
 
 
 
 
Product
$
20,180

 
$
16,129

 
$
66,329

 
$
78,787

Service
15,464

 
14,667

 
56,978

 
55,282

Contract
17,279

 
15,856

 
63,925

 
67,177

Total net revenues
52,923

 
46,652

 
187,232

 
201,246

Costs of sales:
 
 
 
 
 
 
 
Product
16,235

 
13,850

 
51,147

 
60,694

Service
10,224

 
12,107

 
39,368

 
42,107

Contract
15,564

 
13,977

 
58,243

 
59,982

Total costs of sales
42,023

 
39,934

 
148,758

 
162,783

Gross margin
10,900

 
6,718

 
38,474

 
38,463

Operating expenses:
 
 
 
 
 
 
 
Selling, general and administrative
9,852

 
9,396

 
37,014

 
34,983

Research and development
4,139

 
3,330

 
13,372

 
12,412

Amortization of identifiable intangible assets
495

 
242

 
1,219

 
966

Total operating expenses
14,486

 
12,968

 
51,605

 
48,361

Operating (loss)
(3,586
)
 
(6,250
)
 
(13,131
)
 
(9,898
)
Other (expense) income, net
(298
)
 
186

 
(1,503
)
 
306

Interest expense, net
(1,593
)
 
(126
)
 
(4,571
)
 
(387
)
Loss before provision for (benefit from) income taxes
(5,477
)
 
(6,190
)
 
(19,205
)
 
(9,979
)
(Provision for) income taxes
(354
)
 
27

 
3,634

 
(14,143
)
Net loss
$
(5,831
)
 
$
(6,163
)
 
$
(15,571
)
 
$
(24,122
)
Basic Loss per Share:
 
 
 
 
 
 
 
Net loss
$
(0.35
)
 
$
(0.38
)
 
$
(0.96
)
 
$
(1.50
)
Diluted Loss per Share:
 
 
 
 
 
 
 
Net loss
$
(0.35
)
 
$
(0.38
)
 
$
(0.96
)
 
$
(1.50
)
Weighted average shares outstanding
 
 
 
 
 
 
 
Basic
16,570

 
16,079

 
16,223

 
16,041

Diluted
16,570

 
16,079

 
16,223

 
16,041







PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
(in thousands, except per share and per share data)
(Unaudited)
 
 
Three Months Ended
December 31, 2019
 
Three Months Ended
December 31, 2018
 
 
Reported basis (GAAP)
 
Adjustments
 
Comparable basis (Non-GAAP)
 
Reported basis (GAAP)
 
Adjustments
 
Comparable basis (Non-GAAP)
Net revenues
 
52,923

 
$

 
$
52,923

 
$
46.652

 
 
 
$
46,652

Costs of sales
 
42,023

 
(363
)
 
42,386

 
39,934

 
2,606

 
37,328

Gross margin
 
10,900

 
(363
)
 
10,537

 
6,718

 
2,606

 
9,324

Operating Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative
 
9,852

 
1,028

 
8,824

 
9,396

 
503

 
8,893

Research and development
 
4,139

 

 
4,139

 
3,330

 

 
3,330

Acquisition amortization
 
495

 
495

 

 
242

 
242

 

Total operating expenses
 
14,486

 
1,523

 
12,963

 
12,968

 
745

 
12,223

Operating (loss) income
 
(3,586
)
 
1,160

 
(2,426
)
 
(6,250
)
 
3,351

 
(2,899
)
Other (expense) income, net
 
(298
)
 
 
 
(298
)
 
186

 
(50
)
 
136

Interest (expense) income, net
 
(1,593
)
 
724

 
(869
)
 
(126
)
 

 
(126
)
(Loss) income before benefit from (provision for) income taxes
 
(5,477
)
 
1,884

 
(3,593
)
 
(6,190
)
 
3,301

 
(2,889
)
(Provision for) benefit from income taxes
 
(354
)
 
(452
)
 
(806
)
 
27

 
(792
)
 
(765
)
Net loss
 
$
(5,831
)
 
 
 
$
(4,399
)
 
$
(6,163
)
 


 
$
(3,654
)
Loss per diluted share
 
$
(0.35
)
 
 
 
$
(0.27
)
 
$
(0.38
)
 
 
 
$
(0.23
)

About Non-GAAP Financial Measures

The Company reports its financial results in accordance with GAAP.  However, non-GAAP adjusted financial measures, as set forth in the reconciliation table above, are provided because management uses these non-GAAP financial measures in evaluating the results of the Company's continuing operations and believes this information provides investors supplemental insight into underlying business trends and operating results. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. In addition, these non-GAAP financial measures should be read in conjunction with the Company’s financial statements prepared in accordance with GAAP.

The Company's results of operations are impacted by certain non-recurring charges, including equity based compensation, divestiture related expenditures, expense related to the internal investigation into conduct in China and Singapore (the "China/Singapore internal investigation"), and other non-recurring charges that may not be indicative of the Company’s financial performance. Management believes that adjusting its operating expenses, operating loss, net loss and diluted loss per share to remove non-recurring charges provides a useful perspective with respect to the Company's operating results and provides supplemental information to both management and investors by removing items that are difficult to predict and are often unanticipated.  While the Company believes the adjustments provide a useful comparison, the reconciliations of non-GAAP financial measures to corresponding GAAP measures should be carefully evaluated.






During the fourth quarter of 2019, the Company completed the sale of substantially all of the assets relating to the SureCheck product group within the Company's Restaurant/Retail segment. The Company made final adjustments of ($363,000) related to the sale, this represents adjustments of ($289,000) for inventory and ($74,000) for costs of service. The Company recorded approximately $159,000 of expenses related to the Company's continued cooperation with the Singapore authorities in connection with the findings of the completed China/Singapore internal investigation. Additionally, approximately $869,000 of equity based compensation charges were recorded during the fourth quarter of 2019. The Company recognized amortization of acquired intangible assets of approximately $242,000 related to the Company’s 2014 acquisition of Brink Software, Inc. (the "Brink Acquisition"), $171,000 related to the Company's 2019 acquisition of assets of 3M Company’s Drive-Thru Communications Systems business (the “Drive-Thru Asset Acquisition”) and $82,000 related to the Company’s acquisition of 100% of the limited liability company interests of AccSys, LLC (“Restaurant Magic Acquisition”). The provision for income tax was based on 24%, or approximately $452,000 to reflect the tax impact of non-GAAP adjustments. Further, the Company recognized approximately $724,000 accretion of interest related to the Company's 4.5% Convertible Senior Notes due 2024 (the "Notes").

During the fourth quarter of 2018, the Company recorded a one-time reserve of $1,020,000 on hardware inventory as well as a one-time impairment charge of $1,586,000 related to SureCheck. The Company also recorded $218,000 of selling, general and administrative expenses related to the China/Singapore internal investigation. Additionally, $285,000 of equity based compensation charges were recorded during the fourth quarter of 2018. The Company recognized amortization of acquired intangible assets of $242,000 and a $50,000 reduction in the contingent consideration payable related to the Brink Acquisition. The benefit from income tax was based on 24%, or $792,000, to reflect the tax impact from non-GAAP adjustments.






PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
(in thousands, except per share and per share data)
(Unaudited)
 
 
Twelve Months Ended
December 31, 2019
 
Twelve Months Ended
December 31, 2018
 
 
Reported basis (GAAP)
 
Adjustments
 
Comparable basis (Non-GAAP)
 
Reported basis (GAAP)
 
Adjustments
 
Comparable basis (Non-GAAP)
Net revenues
 
$
187,232

 
$

 
$
187,232

 
$
201,246

 
$

 
$
201,246

Costs of sales
 
148,758

 
1,356

 
147,402

 
162,783

 
2,606

 
160,177

Gross margin
 
38,474

 
1,356

 
39,830

 
38,463

 
2,606

 
41,069

Operating Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative
 
37,014

 
3,577

 
33,437

 
34,983

 
2,407

 
32,576

Research and development
 
13,372

 
108

 
13,264

 
12,412

 

 
12,412

Acquisition amortization
 
1,219

 
1,219

 

 
966

 
966

 

Total operating expenses
 
51,605

 
4,904

 
46,701

 
48,361

 
3,373

 
44,988

Operating (loss) income
 
(13,131
)
 
6,260

 
(6,871
)
 
(9,898
)
 
5,979

 
(3,919
)
Other (expense) income, net
 
(1,503
)
 

 
(1,503
)
 
306

 
450

 
(144
)
Interest (expense) income, net
 
(4,571
)
 
2,003

 
(2,568
)
 
(387
)
 

 
(387
)
(Loss) income before benefit from (provision for) income taxes
 
(19,205
)
 
8,263

 
(10,942
)
 
(9,979
)
 
5,529

 
(4,450
)
 Benefit from (provision for) income taxes
 
3,634

 
2,082

 
1.552

 
(14,143
)
 
(13,567
)
 
(576
)
Net loss
 
$
(15,571
)
 
 
 
$
(9,390
)
 
$
(24,122
)
 

 
$
(5,026
)
Loss per diluted share
 
$
(0.96
)
 
 
 
$
(0.57
)
 
$
(1.50
)
 
 
 
$
(0.31
)

During the year ended December 31, 2019, the Company recorded $1,213,000 of expenses related to the sale of the SureCheck product group, this represents $509,000 related to inventory reserve and $704,000 in costs of service related to impairment of intangible assets for the SureCheck product group. The Company recorded $554,000 of expenses related to the China/Singapore internal investigation and severance expenses of $568,000 of which $143,000 were recorded in cost of sales and $317,000 in selling, general and administrative expenses and $108,000 in research and development expenses. Additionally, $2,706,000 of equity based compensation charges were recorded during 2019. The Company recognized amortization of acquired intangible assets of approximately $966,000 related to the Brink Acquisition, $171,000 related to the Drive-Thru Asset Acquisition and $82,000 related to the Restaurant Magic Acquisition. The provision for income tax was was based on a 24%, or $1,983,000 to reflect the tax impact of non-GAAP adjustments as well as a $4,065,000 tax benefit relating to the sale of the Notes. Further, the Company recognized $2,003,000 accretion of interest related to the Notes.

During the year ended December 31, 2018, the Company recorded a one-time reserve of $1,020,000 on hardware inventory as well as a one-time impairment charge of $1,586,000 related to SureCheck. The Company also recorded $1,134,000 of selling, general and administrative expenses related to the China/Singapore internal investigation. Additionally, $1,039,000 of equity based compensation charges were recorded during the year ended December 31, 2018. There were $234,000 of severance expenses recorded in the year ended December 31, 2018. The Company recognized amortization of acquired intangible assets of $966,000 related to the Brink Acquisition as well as a $450,000 reduction in the amount payable under contingent consideration related to that acquisition. The Company recorded a one-time $14,894,000 valuation allowance to reduce the carrying value of its deferred





tax assets pursuant to FASB ASC 740. The valuation allowance was offset by $1.3 million or 24% to reflect the tax impact of non-GAAP adjustments.