-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R0HCSVO73BY+k/uPvz9hQX1dGAgmckT2manmWesW0YE7XMPyK/EXt5ejoN8BXe3M 0dt87jXzBAS3PJARBfVdvg== 0000914317-95-000105.txt : 19951026 0000914317-95-000105.hdr.sgml : 19951026 ACCESSION NUMBER: 0000914317-95-000105 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951025 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAR TECHNOLOGY CORP CENTRAL INDEX KEY: 0000708821 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 161434688 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09720 FILM NUMBER: 95584121 BUSINESS ADDRESS: STREET 1: PAR TECHNOLOGY PARK STREET 2: 8383 SENECA TURNPIKE CITY: NEW HARTFORD STATE: NY ZIP: 13413 BUSINESS PHONE: 3157380600 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1995. Commission File Number 1-9720 OR [ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From __________ to __________ Commission File Number __________ PAR TECHNOLOGY CORPORATION (Exact name of registrant as specified in its charter) Delaware 16-1434688 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) PAR Technology Park 8383 Seneca Turnpike New Hartford, NY 13413-4991 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (315) 738-0600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] The number of shares outstanding of registrant's common stock, as of October 20, 1995 is 7,689,125 shares. PAR TECHNOLOGY CORPORATION TABLE OF CONTENTS FORM 10-Q PART 1 FINANCIAL INFORMATION Item Number Item 1. Financial Statements - Consolidated Statement of Income for the Three and Nine Months Ended September 30, 1995 and 1994 - Consolidated Balance Sheet at September 30, 1995 and December 31, 1994 - Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 1995 and 1994 - Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K Signatures Exhibit Index Item 1. Financial Statements PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (In Thousands Except Per Share Amounts) (UNAUDITED)
For the three months For the nine months ended September 30, ended September 30, -------------------- -------------------- 1995 1994 1995 1994 ------- ------- ------- ------- Revenues: Net product sales ................... $11,428 $13,889 $35,654 $37,571 Service revenues .................... 6,440 5,288 17,936 15,299 Contract revenues ................... 6,112 4,726 18,790 14,926 ------- ------- ------- ------- Total revenues ................... 23,980 23,903 72,380 67,796 ------- ------- ------- ------- Costs and expenses: Costs of products sold .............. 6,539 8,611 20,984 23,786 Costs of service .................... 4,857 4,219 14,163 12,606 Costs of contracts .................. 5,552 4,455 17,556 14,117 Selling, general and administrative . 3,885 3,435 12,194 10,565 Research and development ............ 1,187 1,209 3,822 3,557 ------- ------- ------- ------- Total costs and expenses ......... 22,020 21,929 68,719 64,631 ------- ------- ------- ------- Income from operations ................. 1,960 1,974 3,661 3,165 Other income ........................... 217 27 203 38 Interest expense ....................... -- (12) -- (37) ------- ------- ------- ------- Income before provision for income taxes 2,177 1,989 3,864 3,166 Provision for income taxes ............. 644 545 1,305 1,027 ------- ------- ------- ------- Net income ............................. $ 1,533 $ 1,444 $ 2,559 $ 2,139 ======= ======= ======= ======= Earnings per common share .............. $ .19 $ .18 $ .32 $ .27 ======= ======= ======= ======= Weighted average number of common shares outstanding .................. 8,082 7,970 8,097 7,997 ======= ======= ======= =======
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In Thousands Except Share Amounts)
September 30, 1995 December 31, (Unaudited) 1994 -------- -------- Assets Current Assets: Cash .............................................. $ 4,027 $ 2,912 Accounts receivable-net ........................... 27,616 28,103 Inventories ....................................... 19,502 16,467 Deferred income taxes ............................. 826 1,034 Other current assets .............................. 1,072 1,460 -------- -------- Total current assets .......................... 53,043 49,976 Property, plant and equipment - net .................. 7,570 7,716 Other assets ......................................... 2,413 2,950 -------- -------- $ 63,026 $ 60,642 ======== ======== Liabilities and Shareholders' Equity Current Liabilities: Accounts payable .................................. $ 3,481 $ 3,632 Accrued salaries and benefits ..................... 3,339 3,874 Accrued expenses .................................. 1,306 1,237 Deferred maintenance revenue ...................... 2,497 2,010 Income taxes payable .............................. 716 308 -------- -------- Total current liabilities ..................... 11,339 11,061 -------- -------- Deferred income taxes ................................ 739 936 -------- -------- Shareholders' equity: Common stock, $.02 par value, 12,000,000 shares authorized, 9,109,116 and 9,030,787 shares issued and outstanding ................... 182 181 Preferred stock, $.02 par value, 250,000 shares authorized ...................................... -- -- Capital in excess of par value .................... 13,524 13,268 Retained earnings ................................. 39,633 37,074 Cumulative translation adjustment ................. (209) (181) Less 1,420,606 and 1,374,467 shares in treasury, at cost ............................ (2,182) (1,697) -------- -------- Total shareholders' equity .................... 50,948 48,645 -------- -------- $ 63,026 $ 60,642 ======== ========
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (In Thousands) (UNAUDITED)
For the nine months ended September 30, -------------------- 1995 1994 ------- ------- Cash flows from operating activities: Net income .......................................... $ 2,559 $ 2,139 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .................. 1,771 2,052 Translation adjustments ........................ (28) 251 Increase (decrease) from changes in: Accounts receivable-net ........................... 487 5,290 Inventories ....................................... (3,035) (447) Other current assets .............................. 388 (446) Other assets ...................................... 229 10 Accounts payable .................................. (151) (606) Accrued salaries and benefits ..................... (535) (18) Accrued expenses .................................. 69 (962) Deferred maintenance revenue ...................... 487 380 Income taxes payable .............................. 408 643 Deferred income taxes ............................. 11 (471) ------- ------- Net cash provided by operating activities ....... 2,660 7,815 ------- ------- Cash flows from investing activities: Capital expenditures ................................ (906) (1,204) Capitalization of software costs .................... (411) (343) ------- ------- Net cash used in investing activities ........... (1,317) (1,547) ------- ------- Cash flows from financing activities: Net payments under line-of-credit agreements ........ -- (4,087) Proceeds from the exercise of stock options ......... 257 155 Acquisition of treasury stock ....................... (485) (22) ------- ------- Net cash used in financing activities ........... (228) (3,954) ------- ------- Net increase in cash and cash equivalents .............. 1,115 2,314 ------- ------- Cash and cash equivalents at beginning of year ......... 2,912 907 ------- ------- Cash and cash equivalents at end of period ............. $ 4,027 $ 3,221 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the year for: Interest .......................................... $ 11 $ 44 Income tax payments, net .......................... 876 856
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. The statements for the three and nine months ended September 30, 1995 and 1994 are unaudited; in the opinion of the Company such unaudited statements include all adjustments (which comprise only normal recurring accruals) necessary for a fair presentation of the results for such periods. The consolidated financial statements for the year ending December 31, 1995 are subject to adjustment at the end of the year when they will be audited by independent accountants. The results of operations for the three and nine months ended September 30, 1995 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 1995. The consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes for the years ended in December 31, 1994 and 1993 included in the Company's December 31, 1994 Annual Report to the Securities and Exchange Commission on Form 10-K. Earnings per share are based on the weighted average number of shares outstanding plus common stock equivalents under the Company's stock option plans. 2. Inventories are used in the manufacture, maintenance, and service of commercial systems. The components of inventory consist of the following:
(In Thousands) September 30, December 31, 1995 1994 -------- -------- Finished goods ......................... $ 7,091 $ 3,891 Work in process ........................ 1,700 1,697 Component parts ........................ 5,133 5,411 Service parts .......................... 5,578 5,468 -------- -------- $ 19,502 $ 16,467 ======== ========
At September 30, 1995 and December 31, 1994, the Company had recorded reserves for obsolete inventory of $2,438,000 and $2,860,000, respectively. 3. Beginning in the first quarter of 1995, certain revenues and related costs relating to Systems Integration activity which previously were reflected as service revenues and costs have been reclassified to product sales and costs. Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUARTER ENDED SEPTEMBER 30, 1995 COMPARED WITH QUARTER ENDED SEPTEMBER 30, 1994 Results of Operations PAR Technology Corporation reported net income of $1.5 million, and earnings per share of $.19, on revenues of $24 million for the quarter ended September 30, 1995. This compares to net income of $1.4 million, and earnings per share of $.18 on revenues of $23.9 million for the same quarter of 1994. Net product sales of the Commercial segment decreased 17.7% to $11.4 million in 1995 versus $13.9 million in 1994. This decrease was primarily due to lower sales to Taco Bell. The Company continues to fulfill the requirements under its sales contract with Taco Bell. However, these requirements were less in the third quarter of 1995 when compared to 1994. The decrease was also due to a decline in sales to Kentucky Fried Chicken International, because of a greater number of new store openings and replacement orders in the third quarter of 1994. Partially offsetting this decline was increased sales recorded by the Company's Industrial Transaction Processing business. Customer service revenues of the Commercial segment increased 21.8% to $6.4 million in the third quarter of 1995 compared to $5.3 million for the same quarter of 1994. During the third quarter of 1995, the Company successfully negotiated a service integration contract with Taco Bell. This contract is expected to generate an aggregate of more than $24 million during the next three years. Also contributing to this increase was installation revenue associated with an equipment upgrade with another major customer. Contract revenues of the Government segment were $6.1 million in 1995, an increase of 29.3% from $4.7 million reported in 1994. The Company's site maintenance and testing activities and its software development business both contributed to this increase. The Company was awarded new site contracts and expanded the scope of other existing contracts during the third quarter of 1995. The Company's software development business continues to expand its work in environmental systems. Gross margin on net product sales for the Commercial segment was 42.8% in the third quarter of 1995, compared to 38% for same quarter of 1994. This improved margin was due to certain customer discounts that were earned in 1994 that did not recur in 1995. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUARTER ENDED SEPTEMBER 30, 1995 COMPARED WITH QUARTER ENDED SEPTEMBER 30, 1994 Gross margin on service revenues of the Commercial segment was 24.6% for the three months ended September 1995 versus 20.2% for the same three months of 1994. This increase was due to the additional revenue described previously and the improved absorption of certain fixed costs. Gross margin on contract revenues of the Government segment was 9.2% in 1995 versus 5.7% a year ago. The improved margin was the result of favorable product mix on new contracts and higher award fees earned due to favorable performance. Selling, general and administrative expenses were $3.9 million in 1995, an increase of 13.1% from the $3.4 million reported in 1994. This is primarily due to an increased sales force as the Company is expanding its worldwide sales efforts. Also contributing to this increase was expanded marketing efforts for the Company's Corneal Topography System. Research and development expenses were $1.2 million in 1995 virtually unchanged from 1994. The Company has maintained a constant level of investment in its POS, Data Collection and Vision Products. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 1994 PAR Technology Corporation reported a net income of $2.6 million, or earnings per share of $.32, on revenues of $72.4 million for the nine months ended September 30, 1995. This compares to a net income of $2.1 million, or earnings per share of $.27 on revenues of $67.8 million for the same nine months ended September 30, 1994. Net product sales of the Commercial segment decreased 5.1% to $35.7 million in 1995 versus $37.6 million in 1994. This decrease was the result of lower sales to Kentucky Fried Chicken International in 1995 due to a large volume of replacement orders in 1994. The Company's domestic sales to McDonald's were less than anticipated due to the delay in the release of its new POS software. This software was released in September. Partially offsetting these decreases was a greater volume of sales to Taco Bell under the Company's sales contract with this customer. Customer service revenues of the Commercial segment increased 17.2% to $17.9 million the first nine months of 1995 compared to $15.3 million for the same period of 1994. This increase was due to new service contracts as the Company's customer base continues to expand. Certain product enhancement programs with major customers in 1995 also contributed to this increase. Contract revenues of the Government segment were $18.8 million in 1995, an increase of 25.9% from $14.9 million reported in 1994. Both the Company's site maintenance and software development businesses contributed to this increase. Gross margin on net product sales of the Commercial segment was 41.1% in 1995 versus 36.7% in 1994. This improvement was the result of favorable product mix and certain discounts earned by customers in 1994 that did not recur in 1995. Gross margin on service revenues of the Commercial segment was 21% for the nine months ended September 1995 versus 17.6% for the same nine months of 1994. This improvement is due to the product enhancement programs described above and the improved absorption as revenue increases. Gross margin on contract revenues of the Government segment was 6.6% in 1995 versus 5.4% in 1994. This improvement was due to favorable award fees earned and contract mix. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 1994 Selling, general and administrative expenses were $12.2 million in 1995, a 15.4% increase from the $10.6 million reported in 1994. The Company is increasing the size of its sales force in all areas including major accounts and is also establishing a dealer distribution channel. Research and development expenses were $3.8 million in 1995 compared to $3.6 million in 1994, an increase of 7.5%. The Company is continuing to invest in its POS products primarily in software development and field trial support of new products. Liquidity and Capital Resources Cash flows to meet the Company's requirements for operating, investing and financing activities for the nine months ended September 30, 1995 and 1994 are reported in the Consolidated Statement of Cash Flows. Cash provided by operating activities was $2.6 million for the first nine months of 1995 compared to $7.8 million in 1994. During 1994, the Company benefited from improved accounts receivable collections. The Company has maintained its receivable position at a comparable level in 1995. The Company also increased its inventory levels in 1995 in anticipation of fourth quarter shipments. Cash used in investing activities was $1.3 million in 1995 versus $1.5 million in 1994. In 1995, capital improvements were primarily for upgrades to internal use software. In 1994, capital expenditures were primarily for improvements to the Company's headquarters facility. Cash used in financing activities was $228,000 in 1995 compared to $4 million in 1994. In 1995, the Company repurchased stock owned by an executive officer of the Corporation. In 1994, the Company was able to pay down its line-of-credit borrowings with the cash provided from operations. The Company has line-of-credit agreements with certain banks, which aggregate $17.2 million, all of which were unused at September 30, 1995. The Company believes that it has adequate financial resources to meet its future liquidity and capital requirements. Item 6. Exhibits and Reports on Form 8-K List of Exhibits Exhibit No. Description of Instrument ----------- ------------------------- 11 Statement re computation of per share earnings Reports on Form 8-K None during third quarter of 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PAR TECHNOLOGY CORPORATION -------------------------- (Registrant) Date: 10/25/95 RONALD J. CASICANO --------------------------------------- Ronald J. Casciano Vice President, Chief Financial Officer and Treasurer EX-11 2 Exhibit Index Exhibit - ------- 11 - Statements re computation of per share earnings Exhibit 11 COMPUTATION OF WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK (In Thousands)
For the three months ended September 30, -------------------- 1995 1994 ------ ------ Primary and Fully Diluted Earnings per share: Weighted average shares of common stock outstanding: Balance - beginning of period ........................... 7,672 7,643 Weighted average shares issued .......................... 18 7 Acquisition of treasury stock ........................... (3) -- Assumed exercise of certain stock options ............... 395 320 ------ ------ Weighted shares - end of period ........................ 8,082 7,970 ====== ======
Exhibit 11 COMPUTATION OF WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK (In Thousands)
For the nine months ended September 30, 1995 1994 ------ ------ Primary and Fully Diluted Earnings per share: Weighted average shares of common stock outstanding: Balance - beginning of period ............................ 7,656 7,605 Weighted average shares issued ........................... 41 35 Acquisition of treasury stock ............................ (14) (3) Assumed exercise of certain stock options ................ 414 360 ------ ------ Weighted shares - end of period .......................... 8,097 7,997 ====== ======
EX-27 3
5 1,000 6-MOS DEC-31-1995 SEP-30-1995 4,027 0 27,616 0 19,502 53,043 7,570 0 63,026 11,339 0 182 0 0 50,766 63,026 11,428 23,980 6,539 16,948 1,187 0 0 2,177 644 1,533 0 0 0 1,533 .19 .19
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