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In many cases, the end of the year gives you time to step back and take stock of the last 12 months. This is when many of us take a hard look at what worked and what did not, complete performance reviews, and formulate plans for the coming year. For me, it is all of those things plus a time when I u...
PAR Technology Corporation (NYSE: PAR) today announced results for the
third quarter ended September 30, 2012. PAR reported third quarter
revenues of $61.1 million, a 4% increase from the $58.7 million reported
for the third quarter of 2011. Net income from continuing operations for
the third quarter of 2012 was $1.3 million, representing diluted
earnings per share of $0.09, compared to the third quarter of 2011
figure of $1.6 million, representing diluted earnings per share of $0.11.
Paul B. Domorski, Chairman and Chief Executive Officer, stated, “Current
market conditions, in the hospitality segments we serve, are making
organic growth challenging in the near-term. Despite this uncertainty,
PAR has been able to maintain profitability, while continuing our
investment in expanding our market reach through new products and
services.”
Mr. Domorski continued, “During the third quarter, PAR made several
important announcements. In the hospitality segment, we introduced our
all new PAR EverServ® 7000 Point of Sale terminal. This is a terrific
new product, which delivers demonstrable value to our customers at an
attractive price point. Also in the quarter, PAR Springer-Miller
formally announced the transition of its ATRIO® Guest Experience
Management software with Microsoft Corporation’s Windows Azure™ cloud
platform. With Windows Azure, a global network of Microsoft-managed
datacenters, PAR is now able to provide computing and storage resources
in support of ATRIO, assuring our customers of 99.95% uptime. During the
quarter, we also announced new distribution partners, as we prepare for
the aggressive roll-out of ATRIO worldwide.”
“Finally, our Government contracting segment announced several new
contracts, most notably the award by the U.S. Army of an additional
contract with a ceiling value of $48 million and a five year term. This
is the most recent contract we have received based on our expertise in
advanced Full Motion Video (FMV), Geospatial Information Systems (GIS)
and Intelligence Surveillance and Reconnaissance (ISR) software and
hardware technologies. PAR is providing research, development,
deployment and operational support, and user training necessary to
transition these innovative and important capabilities to the field.”
Mr. Domorski concluded, “The continued slowdown in business with our
largest restaurant technology customer in the quarter has resulted in
lower year-over-year revenue in our hospitality technology segment. Our
other hospitality markets have also shown weakness in the quarter.
However, given our conservative approach to uncertainty, we braced PAR
for such conditions, refrained from any non-essential expenditures and
concentrated on profitability while continuing our focus on innovation
and new product introductions. It is important to note that we continue
to benefit from our strong and growing Government contracting business
through a pipeline of new contract wins. As our hospitality technology
markets rebound from the current market slowdown, we are poised to
return to improved growth patterns with higher profitability.”
Certain Company information in this release or statements made by its
spokespersons from time to time may contain forward-looking statements.
Any statements in this document that do not describe historical facts
are forward-looking statements. Forward-looking statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that all
forward-looking statements involve risks and uncertainties, including
without limitation, delays in new product introduction, risks in
technology development and commercialization, risks in product
development and market acceptance of and demand for the Company’s
products, risks of downturns in economic conditions generally, and in
the quick service sector of the restaurant market specifically, risks of
intellectual property rights associated with competition and competitive
pricing pressures, risks associated with foreign sales and high customer
concentration, and other risks detailed in the Company’s filings with
the Securities and Exchange Commission.
About PAR Technology Corporation
PAR Technology Corporation's stock is traded on the New York Stock
Exchange under the symbol PAR. PAR has two operating segments:
PAR’s Hospitality segment has been a leading provider of restaurant
and retail technology for more than 30 years. ParTech, Inc. offers
technology solutions for the full spectrum of restaurant operations,
from large chain and independent table service restaurants to
international quick service chains. PAR Springer-Miller Systems, Inc.
offers hotel management systems that provide a complete suite of
powerful tools for guest management, recreation management, and
timeshare/condo management. PAR Springer-Miller Systems also provides
the spa industry a leading management application that was
specifically designed to support the unique needs of the resort spa
and day spa markets, a rapidly growing hospitality segment. Products
from PAR also can be found in retailers, cinemas, cruise lines,
stadiums and food service companies.
PAR’s Government segment is comprised of PAR Government Systems
Corporation, which provides system solutions to Federal/State
Government agencies, and Rome Research Corporation, which is a leading
provider of communications and information technology support services
to the United States Department of Defense.
There will be a conference call at 10:00 a.m. eastern time on November
5, 2012, during which the Company’s management will discuss the
financial results for the third quarter of 2012. If you would like to
participate in this conference please call 800-561-2731 approximately
10 minutes before the call is scheduled to begin and use the PAR pass
code 23958721. Individual & Institutional Investors will have the
opportunity to listen to the conference call/event over the Internet.
Individual Investors can listen to the call by visiting PAR’s website at www.partech.com,
and through CCBN’s individual investor center at www.companyboardroom.com
or by visiting any of the investor sites in CCBN’s Individual Investor
Network. Institutional investors can access the call via CCBN’s
password-protected site, StreetEvents (www.streetevents.com).
In case you are unable to participate in the conference call, an
automatic replay will be available on the World Wide Web via www.companyboardroom.com
until November 12, 2012 or dial 888-286-8010 and use the Pass
Code number 39590683 until November 12, 2012 as well.
PAR TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
September 30,
December 31,
2012
2011
Assets
Current assets:
Cash and cash equivalents
$
18,206
$
7,742
Accounts receivable-net
26,323
30,680
Inventories-net
25,469
25,260
Income tax refund
37
-
Deferred income taxes
9,503
10,240
Other current assets
3,958
3,088
Escrow receivable
956
-
Total current assets
84,452
77,010
Property, plant and equipment - net
6,099
5,259
Deferred income taxes
5,402
5,605
Goodwill
6,852
6,852
Intangible assets - net
16,779
15,888
Other assets
2,392
2,147
Assets of discontinued operations
-
3,182
Total Assets
$
121,976
$
115,943
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt
$
157
$
1,494
Accounts payable
17,164
15,773
Accrued salaries and benefits
6,628
7,002
Accrued expenses
3,792
2,609
Customer deposits
763
1,137
Deferred service revenue
12,880
10,412
Income taxes payable
-
138
Total current liabilities
41,384
38,565
Long-term debt
1,114
1,249
Other long-term liabilities
3,184
2,837
Liabilities of discontinued operations
104
925
Total liabilities
45,786
43,576
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;
17,061,171 and 16,863,868 shares issued;
15,353,484 and 15,156,584 outstanding
341
337
Capital in excess of par value
43,547
42,990
Retained earnings
38,371
35,073
Accumulated other comprehensive loss
(235
)
(201
)
Treasury stock, at cost, 1,707,687 and 1,707,284 shares
(5,834
)
(5,832
)
Total shareholders’ equity
76,190
72,367
Total Liabilities and Shareholders’ Equity
$
121,976
$
115,943
See accompanying notes to consolidated financial statements
PAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
For the three months
For the nine months
Ended September 30,
Ended September 30,
2012
2011
2012
2011
Net revenues:
Product
$
22,340
$
24,424
$
62,652
$
68,877
Service
16,720
18,510
48,113
51,594
Contract
21,992
15,756
67,965
48,836
61,052
58,690
178,730
169,307
Costs of sales:
Product
14,681
15,754
39,699
42,888
Service
11,775
13,184
33,813
44,176
Contract
20,584
14,667
64,151
45,812
47,040
43,605
137,663
132,876
Gross margin
14,012
15,085
41,067
36,431
Operating expenses:
Selling, general and administrative
9,410
8,745
28,844
27,730
Research and development
3,309
3,363
9,947
10,428
Impairment of goodwill and intangible assets
-
-
-
20,843
Amortization of identifiable intangible assets
138
257
441
667
12,857
12,365
39,232
59,668
Operating income (loss) from continuing operations
1,155
2,720
1,835
(23,237
)
Other income (expense), net
233
23
440
(106
)
Interest expense
(22
)
(48
)
(64
)
(163
)
Income (loss) from continuing operations before provision for income
taxes
1,366
2,695
2,211
(23,506
)
(Provision) benefit for income taxes
(62
)
(1,099
)
(383
)
8,317
Income (loss) from continuing operations
1,304
1,596
1,828
(15,189
)
Discontinued operations
Income (loss) on discontinued operations (net of tax)
50
(394
)
1,470
(1,053
)
Net income (loss)
$
1,354
$
1,202
$
3,298
$
(16,242
)
Basic Earnings per Share:
Income (loss) from continuing operations
.09
.11
.12
(1.01
)
Income (loss) from discontinued operations
.00
(.03
)
.10
(.07
)
Net income (loss)
$
.09
$
.08
$
.22
$
(1.08
)
Diluted Earnings per Share:
Income (loss) from continuing operations
.09
.11
.12
(1.01
)
Income (loss) from discontinued operations
.00
(.03
)
.10
(.07
)
Net income (loss)
$
.09
$
.08
$
.22
$
(1.08
)
Weighted average shares outstanding
Basic
15,131
15,031
15,105
14,984
Diluted
15,207
15,118
15,179
14,984
See accompanying notes to consolidated financial statements
PAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
For the nine months ended September 30, 2011
For the nine
months ended
September 30,
2012
Reported
basis
(GAAP)
Adjustments
Comparable
basis
(Non-GAAP)
Net revenues
$
178,730
$
169,307
-
$
169,307
Costs of sales
137,663
132,876
7,732
125,144
Gross Margin
41,067
36,431
7,732
44,163
Operating Expenses
Selling, general and administrative
28,844
27,730
595
27,135
Research and development
9,947
10,428
-
10,428
Impairment of goodwill and intangible assets
-
20,843
20,843
-
Amortization of identifiable intangible assets
441
667
-
667
Total operating expenses
39,232
59,668
21,438
38,230
Operating income (loss) from continuing operations
1,835
(23,237
)
29,170
5,933
Other income (expense), net
440
(106
)
253
147
Interest expense
(64
)
(163
)
-
(163
)
Income (loss) from continuing operations before provision for income
taxes
2,211
(23,506
)
29,423
5,917
(Provision)benefit for income taxes
(383
)
8,317
(10,568
)
(2,251
)
Income (loss) from continuing operations
$
1,828
$
(15,189
)
$
18,855
$
3,666
Income (loss) per diluted share from continuing operations
$
0.22
$
(1.01
)
$
0.24
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 herein because management uses
such measures in evaluating the results of the continuing operations of
the Company and believes this information provides investors better
insight into underlying business trends and performance. Non-GAAP
financial measures should be viewed in addition to, and not as an
alternative for, the Company's reported results prepared in accordance
with GAAP.
For the nine months ended September 30, 2011, the Company recorded total
charges of $29.4 million primarily related to an impairment of goodwill
and intangible assets of $20.8 million. Additionally, the Company
recorded a charge of $7.7 million related to a non-recurring write-down
of certain inventory associated with discontinued products, and charges
of $0.9 million related to the consolidation of some of its facilities.
The aforementioned charges have been recorded net of tax benefit of
$10.6 million and have been excluded in the Company’s non-GAAP measures
because they are considered non-recurring in nature and are
quantitatively and qualitatively different from the Company’s core
operations during any particular period.
These charges did not have any impact on the Company’s financial results
for the three months ended September 30, 2011.
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