8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 13, 2017

PAR Technology Corporation

(Exact name of registrant as specified in its charter)

Delaware	1-09720	16-1434688
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York 13413-4991

(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (315) 738-0600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition.

On March 13, 2017, PAR Technology Corporation (the “Company”) issued a press release to report its financial results for the quarter ended December 31, 2016. A copy of the press release is attached to this current report on Form 8-K as Exhibit 99.1.*

Item 7.01 Regulation FD Disclosure

The Company will hold a conference call at 10:00 a.m. (Eastern) on March 13, 2017, during which the Company’s management will discuss the financial results for the fourth quarter of 2016.  To participate in the call, please call 866-868-9502, 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 PAR’s website at www.partech.com.  Alternatively, listeners may access an archived version of the presentation call after 1:00 p.m. on March 13, 2017 through March 20, 2017 by dialing 855-859-2056 and using conference ID 82600661.*

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

99.1 PAR Technology Corporation Press Release dated March 13, 2017.

* The information in Item 2.02, Item 7.01, and Exhibit 99.1 of this current report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

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:  March 13, 2017	/s/Bryan A. Menar
	Bryan A. Menar
	Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR RELEASE:   CONTACT: New Hartford, NY, March 13, 2017 Christopher R. Byrnes (315) 738-0600ext. 6226 cbyrnes@partech.com,  www.partech.com

PAR TECHNOLOGY CORPORATION ANNOUNCES

2016 FOURTH QUARTER & FULL YEAR 2016 RESULTS

New Hartford, NY- March 13, 2017 -- PAR Technology Corporation (NYSE: PAR) today announced its results of continuing operations for its fourth quarter and full year ended December 31, 2016.

Summary of Fiscal 2016 Fourth Quarter and Year End Financial Results

Fourth Quarter 2016

· Revenues were reported at $60.2 million in the fourth quarter of fiscal 2016, compared to $56.8 million in the same period in 2015, a 6.0% increase.

· GAAP net income in the fourth quarter of fiscal 2016 was $1.9 million, or $0.12 per diluted share, an increase from the GAAP net income of $1.3 million, or $0.08 earnings per diluted share reported in the same period in 2015.

· Non-GAAP net income in the fourth quarter of fiscal 2016 was $2.1 million, or $0.13 per diluted share, compared to non-GAAP net income of $2.0 million, or $0.13 earnings per diluted share, in the same period in 2015.

Full Year 2016

· Revenues were reported at $229.7 million in fiscal 2016, a slight increase from the $229.0 million in revenues reported for fiscal year 2015.

· GAAP net income for fiscal 2016 was $2.5 million or $0.16 earnings per diluted share, compared to GAAP net income of $4.0 million, or $0.26 earnings per diluted share, in the same period in 2015.

· Non-GAAP net income in fiscal 2016 was $5.3 million, or $0.33 per diluted share, compared to non-GAAP net income of $6.1 million or $0.39 earnings per diluted share, in the same period in 2015.

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

“The fourth quarter was a strong close for 2016, with top line growth of 6.0% year-over-year.  Although offset by reduced Government contract revenues, our fourth quarter performance was driven by higher demand for PAR hardware solutions from Tier 1 customers in our Restaurant and Retail segment and expanded deployments of our Brink cloud software solution.  I am pleased to report we ended 2016 by achieving our target of deployed Brink sites,” commented Karen E. Sammon, PAR Technology Corporation President and Chief Executive Officer.  “Our financial results reflect the progress we have made executing to our strategy and focusing on operational efficiency within our businesses.  Our ability to grow revenues highlights the strength of our brand and the capabilities of our product and service offerings.”

Sammon continued, “With our focus on delivering innovation and customer success, and with operational adjustments, we continue to make necessary changes and drive execution that will position us to capitalize on the long-term growth opportunities for our Company.”

Internal Investigation; Update.

As previously disclosed, the Company is conducting an internal investigation into import/export and sales documentation activities at our China and Singapore offices discovered by management during the third quarter of 2016. The investigation, which is not complete, is being conducted under the oversight of our Audit Committee, with the assistance of outside counsel, and is focused on compliance with certain of our policies, including our Code of Business Conduct and Ethics, and the U.S. Foreign Corrupt Practices Act, or FCPA, and other applicable laws.  The Company has voluntarily notified the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) of these matters, and intends to fully cooperate with both agencies. During the three months ended December 31, 2016, the Company recorded $1,323,000 of expenses relating to the investigation, including expenses of outside legal counsel and forensic accountants. While the investigation is substantially complete, the Company expects to incur additional expenses relating to its completion, as well as in connection with remedial measures being taken and to be taken by the Company to correct the material weaknesses identified in the Company’s internal control over financial reporting. We are presently unable to predict what, if any, actions the SEC, the DOJ, or other governmental agencies (including foreign governmental agencies) will take. The SEC, DOJ, and other governmental authorities have a broad range of civil and criminal sanctions including, injunctive relief, disgorgement, fines, penalties, modifications to our business practices, including the termination or modification of existing business relationships, the imposition of compliance programs and the retention of a monitor to oversee our future compliance. We cannot reasonably estimate the potential liability, if any, to the Company arising out of the China and Singapore matters.  However, the imposition of sanctions, fines or remedial measures could have a material adverse effect on the Company’s business, prospects, reputation, financial condition, liquidity, results of operations or cash flows

Conference Call.

There will be a conference call at 10:00 a.m. (Eastern) on March 13, 2017, during which the Company’s management will discuss the financial results for the fourth quarter of 2016.  To participate in the call, please call 866-868-9502, 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 PAR’s website at www.partech.com.  Alternatively, listeners may access an archived version of the presentation call after 1:00 p.m. on March 13, 2017 through March 20, 2017 by dialing 855-859-2056 and using conference ID 82600661.

About PAR Technology Corporation.

PAR Technology Corporation's stock is traded on the New York Stock Exchange under the symbol “PAR”. PAR’s Restaurant and Retail segment has been a leading provider of restaurant and retail technology for more than 35 years. PAR offers technology solutions for the full spectrum of restaurant operations, from large chain and independent table service restaurants to international quick service chains. Products from PAR also can be found in retailers, cinemas, cruise lines, stadiums, and food service companies. PAR’s Government Business is a leader in providing computer-based system design, engineering and technical services to the Department of Defense and various federal agencies. For more information visit http://www.partech.comor connect with us onFacebookandTwitter.

Forward-Looking Statements.

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements appear throughout this press release, including express or implied forward-looking statements relating to our expectations regarding anticipated financial performance, customer and product opportunities, and assumptions as to future events. Forward-looking statements are subject to a variety of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those contemplated in these statements. Factors that could cause actual results to differ materially, include delays in new product development and/or product introduction, changes in customer product and service demands, concentration of revenues from a small group of customers, product and service competition, and the other factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

###

PAR TECHNOLOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	(Unaudited)
Assets	December 31, 2016			December 31, 2015
Current assets:
Cash and cash equivalents	$	9,055		$	8,024
Accounts receivable-net		30,705			29,530
Inventories-net		26,237			21,499
Note receivable		4,447			-
Income taxes receivable		261			-
Deferred income taxes		7,421			6,741
Other current assets		4,027			3,808
Assets of Discontinued operations		462			-
Total current assets		82,615			69,602
Property, plant and equipment - net		7,035			5,716
Note receivable		-			4,259
Deferred income taxes		9,650			11,038
Goodwill		11,051			11,051
Intangible assets - net		10,966			10,898
Other assets		3,785			3,687
Total Assets	$	125,102		$	116,251
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	187		$	2,103
Accounts payable		16,687			11,729
Accrued salaries and benefits		5,470			5,727
Accrued expenses		4,682			7,644
Customer deposits and deferred service revenue		19,814			10,819
Income taxes payable		-			279
Liabilities of discontinued operations		-			441
Total current liabilities		46,840			38,742
Long-term debt		379			566
Other long-term liabilities		7,712			8,883
Total liabilities		54,931			48,191
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; 17,479,454 and 17,352,838 shares issued; 15,771,345 and 15,644,729 outstanding at December 31, 2016 and December 31, 2015, respectively		350			347
Capital in excess of par value		46,203			45,753
Retained earnings		32,948			30,574
Accumulated other comprehensive loss		(3,494	)		(2,778	)
Treasury stock, at cost, 1,708,109 shares		(5,836	)		(5,836	)
Total shareholders’ equity		70,171			68,060
Total Liabilities and Shareholders’ Equity	$	125,102		$	116,251

PAR TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

	For the three months ended December 31,						For the year ended December 31,
	2016			2015			2016			2015
Net revenues:
Product	$	30,986		$	24,316		$	100,271		$	94,397
Service		12,942			12,067			49,070			46,754
Contract		16,270			20,414			80,312			87,852
		60,198			56,797			229,653			229,003
Costs of sales:
Product		23,108			18,053			73,975			68,223
Service		9,528			8,210			35,647			33,875
Contract		14,828			18,790			73,830			81,848
		47,464			45,053			183,453			183,946
Gross margin		12,734			11,744			46,200			45,057
Operating expenses:
Selling, general and administrative		8,168			7,061			31,440			27,374
Research and development		3,347			2,325			11,581			10,067
Acquisition amortization		242			241			966			987
		11,757			9,627			43,987			38,428
Operating income from continuing operations		977			2,117			2,213			6,629
Other income (expense), net		1,634			(742	)		1,316			(800	)
Interest Income (expense)		101			(56	)		121			(308	)
Income from continuing operations before provision for income taxes		2,712			1,319			3,650			5,521
Provision for income taxes		(841	)		(30	)		(1,147	)		(1,500	)
Income from continuing operations		1,871			1,289			2,503			4,021
Discontinued operations
Loss on discontinued operations (net of tax)		(103	)		(407	)		(129	)		(4,912	)
Net Income (Loss)	$	1,768		$	882		$	2,374		$	(891	)
Basic Earnings per Share:
Income from continuing operations		0.12			0.08			0.16			0.26
Loss from discontinued operations		(0.01	)		(0.03	)		(0.01	)		(0.32	)
Net Income (Loss)	$	0.11		$	0.06		$	0.15		$	(0.06	)
Diluted Earnings per Share:
Income from continuing operations		0.12			0.08			0.16			0.26
Loss from discontinued operations		(0.01	)		(0.03	)		(0.01	)		(0.31	)
Net Income (Loss)	$	0.11		$	0.06		$	0.15		$	(0.06	)
Weighted average shares outstanding
Basic		15,777			15,616			15,675			15,562
Diluted		15,818			15,732			15,738			15,666

PAR TECHNOLOGY CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(in thousands, except per share data)

(Unaudited)

	For the three months ended December 31, 2016									For the three months ended December 31, 2015
	Reported basis (GAAP)			Adjustments			Comparable basis (Non-GAAP)			Reported basis (GAAP)			Adjustments			Comparable basis (Non-GAAP)
Net revenues	$	60,198			-			60,198		$	56,797			-			56,797
Costs of sales		47,464			517			46,947			45,053			-			45,053
Gross Margin		12,734			517			13,251			11,744			-			11,744
Operating Expenses
Selling, general and administrative		8,168			1,508			6,660			7,061			-			7,061
Research and development		3,347			-			3,347			2,325			-			2,325
Acquisition amortization		242			242			-			241			241			-
Total operating expenses		11,757			1,750			10,007			9,627			241			9,386
Operating income from continuing operations		977			2,267			3,244			2,117			241			2,358
Other income (expense), net		1,634			(1,871	)		(237	)		(742	)		776			34
Interest Income (expense), net		101			-			101			(56	)		26			(30	)
Income from continuing operations before provision for income taxes		2,712			396			3,108			1,319			1,043			2,362
Provision for income taxes		(841	)		(147	)		(988	)		(30	)		(291	)		(321	)
Income from continuing operations	$	1,871		$	249		$	2,120		$	1,289		$	752		$	2,041
Loss from discontinued operations, (net of tax)	$	(103	)				$	(103	)	$	(407	)				$	(407	)
Net income	$	1,768					$	2,017		$	882					$	1,634
Income per diluted share from continuing operations	$	0.12					$	0.13		$	0.08					$	0.13
Loss per diluted share from discontinuing operations	$	(0.01	)				$	(0.01	)	$	(0.03	)				$	(0.03	)
Income per diluted share	$	0.11					$	0.13		$	0.06					$	0.10

The Company reports its financial results in accordance with GAAP.  However, non-GAAP adjusted financial measures, as defined in the reconciliation table above, are provided because management uses these non-GAAP measures in evaluating the results of the continuing operations of the Company and believes this information provides investors supplemental insight into underlying business trends and operating results. These non-GAAP 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 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 severance charges from restructuring business operations, equity based compensation, acquisition related expenditures, and other non-recurring charges that may not be indicative of the Company’s financial performance. Management believes that adjusting its operating expenses, operating income, net earnings and diluted earnings per share to remove non-recurring charges provides a useful perspective with respect to our operating results and provides supplemental information to both management and investors by removing items that are difficult to predict and are often unanticipated.  PAR believes the adjustments provide a useful comparison on a year-over-year basis.

Included within selling, general and administrative expenses, as referenced above under “Internal Investigation; Update”, during the fourth quarter of 2016, the Company recorded $1,323,000 of expenses related to the Company’s internal investigation. In addition, $123,000 expenses related to the implementation of the new ERP system, and $72,000 of equity based compensation charges were recorded during the fourth quarter of 2016.  Included within costs of sales was $517,000 of accelerated amortization related to the Company’s discontinued development of a software module.  Lastly, the Company recognized amortization of acquired intangible assets of $242,000 related to the Company’s acquisition of Brink.  Offsetting these charges, the Company recorded an insurance recovery of $771,000, relating to the Company’s former chief financial officer’s unauthorized transfers of Company funds, and a $1,100,000 decrease to a contingent consideration liability related to the Brink acquisition.

During the fourth quarter of 2015, the Company recognized amortization of acquired intangible assets of $241,000 and accreted interest of $26,000 related to the acquisition of Brink.  Additionally, the Company recorded a $776,000 write-off related to the unauthorized transfer of Company funds. The unauthorized transfers occurred during the period between September 25, 2015 and November 6, 2015.   As of December 31, 2015, the Company was uncertain of the collectability relating to these funds and as a result, reduced its fair value to zero.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(in thousands, except per share data)

(Unaudited)

	For the year ended December 31, 2016									For the year ended December 31, 2015
	Reported basis (GAAP)			Adjustments			Comparable basis (Non-GAAP)			Reported basis (GAAP)			Adjustments			Comparable basis (Non-GAAP)
Net revenues	$	229,653			-		$	229,653		$	229,003			-		$	229,003
Costs of sales		183,452			517			182,935			182,864			151			182,713
Gross Margin		46,201			517			46,718			46,139			151			46,290
Operating Expenses
Selling, general and administrative		31,440			4,678			26,762			28,276			1,120			27,156
Research and development		11,581			-			11,581			10,247			13			10,234
Acquisition amortization		966			966			-			987			987			-
Total operating expenses		43,987			5,644			38,343			39,510			2,120			37,390
Operating income from continuing operations		2,214			6,161			8,375			6,629			2,271			8,900
Other income (expense), net		1,316			(1,871	)		(555	)		(800	)		776			(24	)
Interest Income (expense), net		121			78			199			(308	)		103			(205	)
Income from continuing operations before provision for income taxes		3,651			4,368			8,019			5,521			3,150			8,671
Provision for income taxes		(1,147	)		(1,616	)		(2,763	)		(1,500	)		(1,071	)		(2,571	)
Income from continuing operations	$	2,504		$	2,752		$	5,256		$	4,021		$	2,079		$	6,100
Loss from discontinued operations, (net of tax)	$	(129	)				$	(129	)	$	(4,912	)				$	(4,912	)
Net income (Loss)	$	2,375					$	5,127		$	(891	)				$	1,188
Income per diluted share from continuing operations	$	0.16					$	0.33		$	0.26					$	0.39
Loss per diluted share from discontinuing operations	$	(0.01	)				$	(0.01	)	$	(0.32	)				$	(0.32	)
Income (loss) per diluted share	$	0.15					$	0.33		$	(0.06	)				$	0.08

During the year ended December 31, 2016, the Company recorded professional services charges of $2,789,000, of which $1,466,000 were for investigation costs related to the Company’s former chief financial officer’s unauthorized transfers of Company funds, and $1,323,000 were related to the Company’s internal investigation of conduct at its China and Singapore offices.  Additionally, the Company recorded charges of $789,000, as a write-off, related to the Company’s previous human capital management system, $631,000 related to the implementation of the new ERP system and $469,000 related to equity based compensation charges, included in selling, general and administrative.  Additionally, during fiscal 2016, the Company recorded $517,000 of accelerated amortization into to cost of service, which is related to the Company’s discontinued development of a software module. Lastly, the Company recognized amortization of acquired intangible assets of $966,000 related to the acquisition of Brink, and accreted interest of $78,000.  Offsetting these charges, the Company recorded an insurance recovery of $771,000 relating to the unauthorized transfers of Company funds by its former chief financial officer, and a $1,100,000 decrease to a contingent consideration liability related to the 2014 acquisition of Brink.

During the year ended December 31, 2015, the Company recorded severance and other related charges of $797,000, of which $151,000 is included in cost of sales, $13,000 is included in research and development, and $633,000 is included in selling, general and administrative.  Also included within selling, general and administrative, is equity based compensation charges of $487,000.  Lastly, the Company recognized amortization of acquired intangible assets of $987,000 related to the acquisition of Brink, and accreted interest of $103,000.  Additionally, the Company recorded a $776,000 write-off related to its former chief financial officer’s unauthorized transfer of Company funds. The unauthorized transfers occurred during the period between September 25, 2015 and November 6, 2015.   As of December 31, 2015, the Company was uncertain of the collectability relating to these funds and as a result, reduced its fair value to zero.