8-K

UNITED STATES

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): August 15, 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 15, 2017, PAR Technology Corporation (the “Company”) issued a press release announcing its results of operations for the fiscal quarter ended June 30, 2017. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.*

Item 7.01 Regulation FD Disclosure

There will be a conference call at 10:00 a.m. (Eastern) on August 15, 2017, during which the Company’s management will discuss the financial results for the second quarter of 2017.  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 PAR’s website at www.partech.com.  Alternatively, listeners may access an archived version of the presentation call through August 22, 2017 by dialing 855-859-2056 and using conference ID 65566533.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

99.1 PAR Technology Corporation Press Release dated August 15, 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:  August 15, 2017	/s/Bryan A. Menar
	Bryan A. Menar
	Chief Financial Officer
	(Principal Financial Officer)

EX-99.1

Exhibit 99.1

FOR RELEASE:	New Hartford, NY, August 15, 2017 Christopher R. Byrnes (315) 738-0600ext. 6226
CONTACT:	cbyrnes@partech.com,  www.partech.com

PAR TECHNOLOGY CORPORATION ANNOUNCES

2017 SECOND QUARTER RESULTS FROM CONTINUING OPERATIONS

New Hartford, NY- August 15, 2017 -- PAR Technology Corporation (NYSE: PAR) today announced its results of continuing operations for its second quarter ended June 30, 2017.

Summary of Fiscal 2017 Second Quarter and Year-to-Date Financial Results From Continuing Operations

- Revenues were reported at $62.3 million, compared to $52.7 million in the same period in 2016, an 18.2% increase.

- GAAP net income of $2.0 million, or $0.12 per diluted share, an increase from GAAP net income of $0.1 million, or $0.01 earnings per diluted share for the same period in 2016.

- Non-GAAP net income of $2.6 million, or $0.16 per diluted share, compared to non-GAAP net income of $0.6 million or $0.04 earnings per diluted share, for the same period in 2016.

- Revenues increased to $128.1 million in the first six months of fiscal 2017, compared to $108.0 million in the same period in 2016, an 18.7% increase.

- GAAP net income in the six months of fiscal 2017 was $3.2 million or $0.20 earnings per diluted share, compared to GAAP net income of $0.1 million, or $0.01 earnings per diluted share, in the same period in 2016.

- Non-GAAP net income in the first six months of fiscal 2017 was $4.7 million, or $0.29 per diluted share, compared to non-GAAP net income of $1.6 million or $0.10 earnings per diluted share, in the same period in 2016.

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.

“I am pleased with our results in the quarter as they demonstrate our focus on growing revenues, investing in our future, and executing upon our growth strategy of being a software-driven solutions company,” stated Dr. Donald H. Foley, PAR Technology President and Chief Executive Officer. “In the quarter we recognized higher revenue from our Tier 1 customers due to accelerated hardware deployments and one-time system integration projects.  These accelerated hardware deployments and projects wound down this quarter and while we anticipate our business will achieve our annual goals, we do not expect this pace to continue in the second half of the year.”

Foley continued, “Both our restaurant/retail and government segments contributed to the bottom line increase in the quarter.  Our recurring software revenue more than doubled from last year’s quarter in our Restaurant/Retail segment.  We continue to collect additional validation that our restaurant/retail solutions meet the needs of our customers.  We added a number of impressive new software customers to our install base during the second quarter, and are conducting pilots at a number of additional accounts.  In our Government segment, we continue to see lower contract revenues at higher margins as we consciously execute our plan to transition our business to higher value added Intelligence, Surveillance & Reconnaissance (ISR) contracts.”

“In closing, we appreciate and value the support we have received from our customers, vendors and shareholders. It is gratifying to see positive results come out of the hard work of our dedicated employees. Even more exciting are the opportunities we believe the future will offer us and I look forward to reporting back to you as the year progresses.”

There will be a conference call at 10:00 a.m. (Eastern) on August 15, 2017, during which the Company’s management will discuss the financial results for the second quarter of 2017.  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 PAR’s website at www.partech.com.  Alternatively, listeners may access an archived version of the presentation call through August 22, 2017 by dialing 855-859-2056 and using conference ID 65566533.

About PAR Technology Corporation.

PAR Technology Corporation’s stock is traded on the New York Stock Exchange under the symbol “PAR”. PAR’s Restaurant/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.com or connect with us on Facebook and Twitter.

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 base, a significant portion of our revenue is derived from two customers, product and service demands and competition, risks associated with the ongoing investigation into possible violations of the U.S. Foreign Corrupt Practices Act and similar laws, including the cost of such investigation and any sanctions, fines or remedial measures that may be imposed by the U.S. Department of Justice or U.S. Securities and Exchange Commission (“SEC”), additional expenses related to remedial measures, risks associated with the Company’s identified material weaknesses in internal control over financial reporting and any other failure to maintain effective internal controls, and the other risk factors discussed in the Companies's most recent Annual Report on Form 10-K, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 and other filings with the SEC. 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 CORPORATIONAND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

(Unaudited)

Assets	June 30, 2017			December 31, 2016
Current assets:
Cash and cash equivalents	$	3,282		$	9,055
Accounts receivable-net		33,807			30,705
Inventories-net		28,845			26,237
Note receivable		-			3,510
Income taxes receivable		-			261
Other current assets		4,246			4,027
Assets of discontinued operations		-			462
Total current assets		70,180			74,257
Property, plant and equipment - net		9,854			7,035
Deferred income taxes		16,403			17,417
Goodwill		11,051			11,051
Intangible assets - net		11,886			10,966
Other assets		3,833			3,785
Total Assets	$	123,207		$	124,511
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	191		$	187
Borrowings of line of credit		1,000			-
Accounts payable		14,163			16,687
Accrued salaries and benefits		6,411			5,470
Accrued expenses		4,752			4,682
Customer deposits and deferred service revenue		14,513			19,814
Total current liabilities		41,030			46,840
Long-term debt		283			379
Other long-term liabilities		7,764			7,712
Total liabilities		49,077			54,931
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; 17,615,390 and 17,479,454 shares issued, 15,907,281 and 15,771,345 outstanding at June 30, 2017 and December 31, 2016, respectively		352			350
Capital in excess of par value		47,354			46,203
Retained earnings		35,598			32,357
Accumulated other comprehensive loss		(3,338	)		(3,494	)
Treasury stock, at cost, 1,708,109 shares		(5,836	)		(5,836	)
Total shareholders’ equity		74,130			69,580
Total Liabilities and Shareholders’ Equity	$	123,207		$	124,511

PAR TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

	For the three months ended June 30,			For the three months ended June 30,			For the six months ended June 30,			For the six months ended June 30,
	2017			2016			2017			2016
Net revenues:
Product	$	32,682		$	21,444		$	69,888		$	43,528
Service		15,034			11,804			29,377			23,508
Contract		14,545			19,410			28,861			40,927
		62,261			52,658			128,126			107,963
Costs of sales:
Product		24,389			16,137			51,961			32,579
Service		9,766			8,219			19,651			16,818
Contract		12,909			17,857			25,656			37,512
		47,064			42,213			97,268			86,909
Gross margin		15,197			10,445			30,858			21,054
Operating expenses:
Selling, general and administrative		8,917			7,058			18,527			14,600
Research and development		3,284			2,793			6,853			5,555
Amortization of identifiable intangible assets		242			242			483			483
		12,443			10,093			25,863			20,638
Operating income from continuing operations		2,754			352			4,995			416
Other income (expense), net		54			(210	)		(194	)		(280	)
Interest (expense) income, net		(13	)		3			(45	)		32
Income from continuing operations before provision for income taxes		2,795			145			4,756			168
Provision for income taxes		(818	)		(45	)		(1,515	)		(53	)
Income from continuing operations		1,977			100			3,241			115
Discontinued operations
(Loss on) income from discontinued operations (net of tax)		-			(26	)		183			(26	)
Net income	$	1,977		$	74		$	3,424		$	89
Basic Earnings per Share:
Income from continuing operations		0.12			0.01			0.20			0.01
Loss from discontinued operations		(0.00	)		(0.00	)		0.01			(0.00	)
Net income	$	0.12		$	0.01		$	0.21		$	0.01
Diluted Earnings per Share:
Income from continuing operations		0.12			0.01			0.20			0.01
Loss from discontinued operations		(0.00	)		(0.00	)		0.01			(0.00	)
Net income	$	0.12		$	0.01		$	0.21		$	0.01
Weighted average shares outstanding
Basic		15,919			15,615			15,893			15,651
Diluted		16,178			15,670			16,146			15,717

PAR TECHNOLOGY CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(in thousands, except per share data)

(Unaudited)

	For the three months ended June 30, 2017									For the three months ended June 30, 2016
	Reported basis (GAAP)			Adjustments			Comparable basis (Non- GAAP)			Reported basis (GAAP)			Adjustments			Comparable basis (Non- GAAP)
Net revenues	$	62,261			-			62,261		$	52,658			-			52,658
Costs of sales		47,064			-			47,064			42,213			-			42,213
Gross margin		15,197			-			15,197			10,445			-			10,445
Operating expenses
Selling, general and administrative		8,917			671			8,246			7,058			572			6,486
Research and development		3,284			-			3,284			2,793			-			2,793
Amortization of identifiable intangible assets		242			242			-			242			242			-
Total operating expenses		12,443			913			11,530			10,093			814			9,279
Operating income from continuing operations		2,754			913			3,667			352			814			1,166
Other income(expense), net		54			-			54			(210	)		-			(210	)
Interest (expense) income, net		(13	)					(13	)		3			26			29
Income from continuing operations before provision for income taxes		2,795			913			3,708			145			840			985
Provision for income taxes		(818	)		(338	)		(1,156	)		(45	)		(311	)		(356	)
Income from continuing operations	$	1,977		$	575		$	2,552		$	100		$	529		$	629
Loss from discontinued operations, (net of tax)	$	-					$	-		$	(26	)				$	(26	)
Net income	$	1,977					$	2,552		$	74					$	603
Income per diluted share from continuing operations	$	0.12					$	0.16		$	0.01					$	0.04
Loss per diluted share from discontinuing operations	$	(0.00	)				$	(0.00	)	$	(0.00	)				$	(0.00	)
Income per diluted share	$	0.12					$	0.16		$	0.01					$	0.04

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 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.  The Company believes the adjustments provide a useful comparison on a year-over-year basis.

During the second quarter of 2017, the Company recorded charges within selling, general and administrative of $605,000 related to the Company’s previously disclosed investigation of import export and sales documentation activities at the Company’s China and Singapore offices and the SEC subpoena. In addition, $5,000 of expenses related to the implementation of the new ERP system, and $61,000 of equity based compensation charges were recorded during the second quarter of 2017.  Lastly, the Company recognized amortization of acquired intangible assets of $242,000 related to the Company’s acquisition of Brink.

During the second quarter of 2016, the Company recorded charges within selling, general and administrative of $304,000 of investigation costs related to certain unauthorized transfers of Company funds that were made in contravention of the Company’s policies and procedures, $127,000 related to  the  implementation of the new ERP system and equity based compensation charges of $141,000.  Lastly, related to the acquisition of Brink, the Company recognized amortization of acquired intangible assets of $242,000 and accreted interest of $26,000.

PAR TECHNOLOGY CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(in thousands, except per share data)

(Unaudited)

	For the six months ended June 30, 2017									For the six months ended June 30, 2016
	Reported basis (GAAP)			Adjustments			Comparable basis (Non- GAAP)			Reported basis (GAAP)			Adjustments			Comparable basis (Non- GAAP)
Net revenues	$	128,126			-		$	128,126		$	107,963			-		$	107,963
Costs of sales		97,268			-			97,268			86,909			-			86,909
Gross margin		30,858			-			30,858			21,054			-			21,054
Operating expenses
Selling, general and administrative		18,527			1,855			16,672			14,600			1,749			12,851
Research and development		6,853			-			6,853			5,555			-			5,555
Acquisition amortization		483			483			-			483			483			-
Total operating expenses		25,863			2,338			23,525			20,638			2,232			18,406
Operating income from continuing operations		4,995			2,338			7,333			416			2,232			2,648
Other expense, net		(194	)		-			(194	)		(280	)		-			(280	)
Interest (expense) income, net		(45	)					(45	)		32			52			84
Income from continuing operations before provision for income taxes		4,756			2,338			7,094			168			2,284			2,452
Provision for income taxes		(1,515	)		(865	)		(2,380	)		(53	)		(845	)		(898	)
Income from continuing operations	$	3,241		$	1,473		$	4,714		$	115		$	1,439		$	1,554
Income (loss from) discontinued operations, (net of tax)	$	183					$	183		$	(26	)				$	(26	)
Net income	$	3,424					$	4,897		$	89					$	1,528
Income per diluted share from continuing operations	$	0.20					$	0.29		$	0.01					$	0.10
Loss per diluted share from discontinuing operations	$	0.01					$	0.01		$	(0.00	)				$	(0.00	)
Income  per diluted share	$	0.21					$	0.30		$	0.01					$	0.10

During the six months ended June 30, 2017, the Company recorded charges within selling, general and administrative of $1,567,000 related to the Company’s previously disclosed investigation of import export and sales documentation activities at the Company’s China and Singapore offices and the SEC subpoena, and $21,000 of legacy charges related to the Company’s former chief financial officer’s unauthorized transfers of Company fund. In addition, $29,000 of expenses related to the implementation of the new ERP system, and $238,000 of equity based compensation charges were recorded during the six months ended June 30, 2017.  Lastly, the Company recognized amortization of acquired intangible assets of $483,000 related to the Company’s acquisition of Brink.

During the six months ended June 30, 2016, the Company recorded charges within selling, general and administrative of $1,070,000 of investigation costs related to certain unauthorized transfers of Company funds that were made in contravention of the Company’s policies and procedures, $472,000 related to the initial phase of the planned implementation of a new enterprise resource system in connection with the ERP system implementation and equity based compensation charges of $207,000.  Lastly, related to the acquisition of Brink, the Company recognized amortization of acquired intangible assets of $483,000 and accreted interest of $52,000.