PAR Technology (PAR) 10-Q 11 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 01, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	PAR TECHNOLOGY CORP
Entity Central Index Key	708,821
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,604,684
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net revenues:
Product	$ 22,084	$ 20,745
Service	11,704	10,637
Contract	21,517	23,836
Revenue, net	55,305	55,218
Costs of sales:
Product	16,442	14,713
Service	8,599	8,033
Contract	19,655	22,474
Cost of goods and services sold	44,696	45,220
Gross margin	10,609	9,998
Operating expenses:
Selling, general and administrative	7,542	6,660
Research and development	2,762	2,434
Amortization of identifiable intangible assets	241	249
Operating expenses	10,545	9,343
Operating income from continuing operations	64	655
Other expense, net	(70)	(206)
Interest income (expense), net	29	(86)
Income from continuing operations before provision for income taxes	23	363
Provision for income taxes	(8)	(171)
Income from continuing operations	15	192
Discontinued operations
Loss on discontinued operations (net of tax)	0	(577)
Net income (loss)	$ 15	$ (385)
Basic Earnings per Share:
Income from continuing operations (in dollars per share)	$ 0	$ 0.01
Loss from discontinued operations (in dollars per share)	0	(0.04)
Net Income (loss) (in dollars per share)	0	(0.02)
Diluted Earnings per Share:
Income from continuing operations (in dollars per share)	0	0.01
Loss from discontinued operations (in dollars per share)	0	(0.04)
Net income (loss) (in dollars per share)	$ 0	$ (0.02)
Weighted average shares outstanding
Basic (in shares)	15,646	15,596
Diluted (in shares)	15,723	15,710

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) [Abstract]
Net income (loss)	$ 15	$ (385)
Other comprehensive loss, net of applicable tax:
Foreign currency translation adjustments	(122)	(255)
Comprehensive loss	$ (107)	$ (640)

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 5,770	$ 8,024
Accounts receivable - net	33,972	29,530
Inventories-net	22,376	21,499
Income taxes receivable	73	0
Deferred income taxes	6,810	6,741
Other current assets	3,582	3,808
Total current assets	72,583	69,602
Property, plant and equipment - net	5,724	5,716
Note receivable	3,387	3,320
Deferred income taxes	11,038	11,038
Goodwill	11,051	11,051
Intangible assets - net	11,053	10,898
Other assets	3,780	3,687
Total Assets	118,616	115,312
Current liabilities:
Current portion of long-term debt	2,130	2,103
Accounts payable	15,256	11,729
Accrued salaries and benefits	5,285	5,727
Accrued expenses	6,910	6,705
Customer deposits and deferred service revenue	11,478	10,819
Income taxes payable	0	279
Liabilities of discontinued operations	280	441
Total current liabilities	41,339	37,803
Long-term debt	521	566
Other long-term liabilities	8,701	8,883
Total liabilities	$ 50,561	$ 47,252
Commitments and contingencies
Shareholders' Equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized	$ 0	$ 0
Common stock, $.02 par value, 29,000,000 shares authorized; 17,314,960 and 17,352,838 shares issued, 15,606,851 and 15,644,729 outstanding at March 31, 2016 and December 31, 2015, respectively	346	347
Capital in excess of par value	45,856	45,753
Retained earnings	30,589	30,574
Accumulated other comprehensive loss	(2,900)	(2,778)
Treasury stock, at cost, 1,708,109 shares	(5,836)	(5,836)
Total shareholders' equity	68,055	68,060
Total Liabilities and Shareholders' Equity	$ 118,616	$ 115,312

CONSOLIDATED BALANCE SHEETS (U5

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Shareholders Equity:
Preferred stock, par value (in dollars per share)	$ 0.02	$ 0.02
Preferred stock, authorized (in shares)	1,000,000	1,000,000
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02
Common stock, authorized (in shares)	29,000,000	29,000,000
Common stock, issued (in shares)	17,314,960	17,352,838
Common stock, outstanding (in shares)	15,606,851	15,644,729
Treasury stock, at cost (in shares)	1,708,109	1,708,109

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income (loss)	$ 15	$ (385)
Loss from discontinued operations	0	577
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation, amortization and accretion	777	718
Provision for bad debts	185	125
Provision for obsolete inventory	395	421
Equity based compensation	66	245
Deferred income tax	(69)	(1,055)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(4,627)	722
Inventories	(1,272)	(1,537)
Income tax receivable/(payable)	(352)	(154)
Other current assets	226	(393)
Other assets	(93)	(115)
Accounts payable	3,527	(3,894)
Accrued salaries and benefits	(442)	(495)
Accrued expenses	205	(1,027)
Customer deposits and deferred service revenue	659	6,097
Other long-term liabilities	(182)	(108)
Deferred tax equity based compensation	0	(105)
Net cash used in operating activities-continuing operations	(982)	(363)
Net cash (used in) provided by operating activities-discontinued operations	(161)	1,161
Net cash (used in) provided by operating activities	(1,143)	798
Cash flows from investing activities:
Capital expenditures	(322)	(278)
Capitalization of software costs	(659)	(410)
Net cash used in investing activities -continuing operations	(981)	(688)
Net cash used in investing activities -discontinued operations	0	(237)
Net cash used in investing activities	(981)	(925)
Cash flows from financing activities:
Payments of long-term debt	(44)	(43)
Payments of other borrowings	(53,812)	(44,989)
Proceeds from other borrowings	53,812	41,216
Repurchase of common stock	(1)	(1)
Tax benefit of equity based compensation	37	0
Net cash used in financing activities	(8)	(3,817)
Effect of exchange rate changes on cash and cash equivalents	(122)	(255)
Net decrease in cash and cash equivalents	(2,254)	(4,199)
Cash and cash equivalents at beginning of period	8,024	10,167
Cash and equivalents at end of period	5,770	5,968
Less cash and cash equivalents of discontinued operations at end of period	0	(300)
Cash and cash equivalents of continuing operations at end of period	5,770	5,668
Cash paid during the period for:
Interest	8	54
Income taxes, net of refunds	$ 420	$ 154

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 1 — Summary of Significant Accounting Policies The accompanying unaudited interim consolidated financial statements have been prepared by PAR Technology Corporation (the “Company” or “PAR”) in accordance with U.S. generally accepted accounting principles for interim financial statements and with the instructions to Form 10-Q and Regulation S-X pertaining to interim financial statements. Accordingly, these interim financial statements do not include all information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of the Company, such unaudited statements include all adjustments (which comprised of normal recurring accruals) necessary for a fair presentation of the results for such periods. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results of operations to be expected for any future period. The consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2015 included in the Company’s December 31, 2015 Annual Report to the Securities and Exchange Commission on Form 10-K. The preparation of consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include: the carrying amount of property, plant and equipment, identifiable intangible assets and goodwill, equity based compensation, and valuation allowances for receivables, inventories and deferred income taxes. Actual results could differ from those estimates. The current economic conditions and the continued financial volatility in the U.S. and in many other countries in which the Company operates could contribute to decreased consumer confidence and continued economic uncertainty which may adversely impact the Company’s operating performance. The Company continues to see strength in the markets which it serves; however, the continued instability in the global economy could have an impact on purchases of the Company’s products, which could result in a reduction of sales, operating income and cash flows. A decline in these results could have a material adverse impact on the underlying estimates used in deriving the fair value of the Company’s reporting units used in support of its annual goodwill impairment test During the third quarter of fiscal year 2015, the Company performed a strategic analysis of its current product and business unit offerings and as a result, entered into an asset purchase agreement to sell substantially all of the assets of its hotel/spa technology business operated under PAR Springer-Miller Systems, Inc. (“PSMS”) to affiliates of Constellation Software Inc. This transaction closed on November 4, 2015. Accordingly, the results of operations of PSMS have been classified as discontinued operations in accordance with Accounting Standards Codification (“ASC”) 205-20, Presentation of Financial Statements – Discontinued Operations. All prior period amounts have been reclassified to conform to the current period presentation. Refer to Note 2 “Divestiture and Discontinued Operations” in the Notes to the Consolidated Financial Statements for further discussion. Certain amounts for prior periods have been reclassified to conform to the current period classification.

Divestiture and Discontinued Op

Divestiture and Discontinued Operations	3 Months Ended
	Mar. 31, 2016
Divestiture and Discontinued Operations [Abstract]
Divestiture and Discontinued Operations	Note 2 — Divestiture and Discontinued Operations On November 4, 2015, ParTech, Inc., a wholly owned subsidiary of PAR Technology Corporation, (“PTI”), PAR Springer-Miller Systems, Inc. (“PSMS”), Springer-Miller International, LLC (“SMI”), and Springer-Miller Canada, ULC (“SMC”) (PTI, PSMS, SMI and SMC are collectively referred to herein as the “ ” The estimated fair value of the remaining portion of the note receivable, less any estimated working capital adjustments, due on May 4, 2017 is approximately $3.4 million and is included within noncurrent assets in PAR’s consolidated Balance Sheets. In addition to the Base Purchase Price, contingent consideration of up to $1,500,000 is available to PAR based on achievement of certain agreed-upon revenue and earnings targets for calendar years 2016 through 2018, as set forth in the APA. As of March 31, 2016, the Company has not recorded any amount associated with this contingent consideration as it does not believe achievement of the related targets is probable. At March 31, 2016 and December 31, 2015 there were $280,000 and $441,000 of accrued liabilities of discontinued operations recorded on the balance sheet. The following table summarizes the results from discontinued operations (in thousands): March 31, 2016 2015 Operations Total revenues $ - $ 4,406 Loss from discontinued operations before income taxes $ - $ (1,347 ) Benefit from income taxes - 770 Loss from discontinued operations, net of taxes $ - $ (577 )

Accounts Receivable

Accounts Receivable	3 Months Ended
	Mar. 31, 2016
Accounts Receivable [Abstract]
Accounts Receivable	Note 3 — The Company’s net accounts receivable consist of, excluding discontinued operations: (in thousands) March 31, December 31, Government segment: Billed $ 12,200 $ 9,400 Advanced billings (654 ) (1,266 ) 11,546 8,134 Hospitality segment: Accounts receivable - net 22,426 21,396 $ 33,972 $ 29,530 At March 31, 2016 and December 31, 2015, the Company had recorded allowances for doubtful accounts of $812,000 and $875,000, respectively, against hospitality segment accounts receivable.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2016
Inventories [Abstract]
Inventories	Note 4 — Inventories Inventories are primarily used in the manufacture, maintenance and service of hospitality products. The components of inventories, net consist of the following, excluding discontinued operations: (in thousands) March 31, 2016 December 31, Finished goods $ 9,146 $ 8,914 Work in process 601 263 Component parts 5,927 5,068 Service parts 6,702 7,254 $ 22,376 $ 21,499 At March 31, 2016 and December 31, 2015, the Company had recorded inventory reserves of $9.1 million and $8.8 million, respectively, against hospitality inventories, which relates primarily to service parts.

Identifiable intangible assets

Identifiable intangible assets and Goodwill	3 Months Ended
	Mar. 31, 2016
Identifiable intangible assets and Goodwill [Abstract]
Identifiable intangible assets and Goodwill	Note 5 — Identifiable intangible assets and Goodwill The Company’s identifiable intangible assets represent intangible assets acquired from the Brink Software Inc. acquisition as well as internally developed software costs. The Company capitalizes certain costs related to the development of computer software used in its hospitality segment. Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a computer software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications including functions, features, and technical performance requirements. Software development costs incurred after establishing feasibility (as defined within ASC 985-20 for software cost related to sold as a perpetual license and ASC-350-40 for software sold as a service) are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. Software costs capitalized within continuing operations during the three months ended March 31, 2016 and 2015 were $659,000 and $410,000, respectively. Annual amortization, charged to cost of sales when the product is available for general release to customers, is computed using the greater of (a) the straight-line method over the remaining estimated economic life of the product, generally three to seven years or (b) the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product. Amortization of capitalized software costs from continuing operations amounted to $263,000 and $187,000, for the three months ending March 31, 2016 and 2015, respectively. In 2014, the Company acquired identifiable intangible assets in connection with its acquisition of Brink Software Inc. Amortization of intangible assets acquired from the Brink Software Inc. acquisition amounted to $241,000 and $249,000 for the three months ending March 31, 2016 and 2015, respectively. The components of identifiable intangible assets, excluding discontinued operations, are: (in thousands) March 31, December 31, Estimated Useful Life Acquired and internally developed software costs $ 13,384 $ 12,725 3 - 7 years Customer relationships 160 160 7 years Non-competition agreements 30 30 1 year 13,574 12,915 Less accumulated amortization (2,921 ) (2,417 ) $ 10,653 $ 10,498 Trademarks, trade names (non-amortizable) 400 400 N/A $ 11,053 $ 10,898 The expected future amortization of these intangible assets assuming straight-line amortization of capitalized software costs and acquisition related intangibles is as follows (in thousands): 2016 $ 1,514 2017 1,918 2018 1,754 2019 1,357 2020 1,181 Thereafter 2,929 Total $ 10,653 The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. The Company operates in two reportable business segments, Hospitality and Government. Goodwill impairment testing is performed at the sub-segment level (referred to as a reporting unit). The two reporting units within continuing operations utilized by the Company for its impairment testing are: Restaurant and Government. Goodwill is assigned to a specific reporting unit at the date the goodwill is initially recorded. Once goodwill has been assigned to a specific reporting unit, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or organically grown, are available to support the value of the goodwill. The amount of goodwill carried by the Restaurant and Government reporting units is $10.3 million and $0.7 million, respectively, at March 31, 2016 and December 31, 2015.

Stock Based Compensation

Stock Based Compensation	3 Months Ended
	Mar. 31, 2016
Stock Based Compensation [Abstract]
Stock Based Compensation	Note 6 — Stock Based Compensation The Company applies the fair value recognition provisions of ASC Topic 718 Stock-Based Compensation. The Company recorded stock based compensation of $66,000 and $245,000 for the three months ended March 31, 2016 and 2015, respectively. The amount recorded for the three months ended March 31, 2016 and 2015 was recorded net of benefits of $26,000 and $28,000, respectively, as a result of forfeitures of unvested stock awards prior to the completion of the requisite service period. At March 31, 2016, the aggregate unrecognized compensation expense related to non-vested equity awards was $571,000 (net of estimated forfeitures), which is expected to be recognized as compensation expense in fiscal years 2016 through 2018. For the three month period ended March 31, 2016, the Company recognized compensation expense related to performance awards based on its estimate of the probability of achievement in accordance with ASC Topic 718.

Earnings per share

Earnings per share	3 Months Ended
	Mar. 31, 2016
Earnings per share [Abstract]
Earnings per share	Note 7 — Earnings per share Earnings per share are calculated in accordance with ASC Topic 260, which specifies the computation, presentation and disclosure requirements for earnings per share (EPS). It requires the presentation of basic and diluted EPS. Basic EPS excludes all dilution and is based upon the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the three months ended March 31, 2016 and 2015 there were 16,000 and 151,000 anti-dilutive stock options outstanding. The following is a reconciliation of the weighted average shares outstanding for the basic and diluted EPS computations (in thousands, except share and per share data): For the three months 2016 2015 Income from continuing operations $ 15 $ 192 Basic: Shares outstanding at beginning of period 15,645 15,592 Weighted average shares issued during the period, net 1 4 Weighted average common shares, basic 15,646 15,596 Income from continuing operations per common share, basic $ 0.00 $ 0.01 Diluted: Weighted average common shares, basic 15,646 15,596 Dilutive impact of stock options and restricted stock awards 77 114 Weighted average common shares, diluted 15,723 15,710 Income from continuing operations per common share, diluted $ 0.00 $ 0.01

Segment and Related Information

Segment and Related Information	3 Months Ended
	Mar. 31, 2016
Segment and Related Information [Abstract]
Segment and Related Information	Note 8 — Segment and Related Information The Company currently has two reportable business segments, hospitality and government. Prior to the sale of the hotel/spa reporting unit on November 4, 2015 (see note 2), the Company was organized in three reporting units within its two business segments: restaurant/retail, hotel/spa and government. The Company identified government as a separate reportable segment and had aggregated the restaurant/retail and hotel/spa reporting units into one reportable business segment, hospitality, as they shared many similar economical characteristics. The hotel/spa reporting unit is now included within discontinued operations. Management views the government and hospitality segments separately in operating its business, as the products and services are different for each segment. The hospitality segment offers integrated solutions to the food service industry consisting of restaurants , , Information noted as “Other” primarily relates to the Company’s corporate, home office operations. Information as to the Company's segments is set forth below. Amounts below exclude discontinued operations. (in thousands) 2016 2015 Revenues: Hospitality $ 33,788 $ 31,382 Government 21,517 23,836 Total $ 55,305 $ 55,218 Operating income (loss): Hospitality $ (500 ) $ (317 ) Government 1,807 1,245 Other (1,243 ) (273 ) 64 655 Other income, net (70 ) (206 ) Interest expense 29 (86 ) Income before provision for income taxes $ 23 $ 363 Depreciation, amortization and accretion: Hospitality $ 732 $ 637 Government 9 12 Other 36 69 Total $ 777 $ 718 Capital expenditures including software costs: Hospitality $ 948 $ 628 Government 7 - Other 26 60 Total $ 981 $ 688 Revenues by country: United States $ 50,219 $ 49,777 Other Countries 5,086 5,441 Total $ 55,305 $ 55,218 The following table represents identifiable assets by business segment. Amounts below exclude discontinued operations. (in thousands) March 31, December 31, Hospitality $ 75,953 $ 72,948 Government 13,673 10,052 Other 28,990 32,312 Total $ 118,616 $ 115,312 The following table represents assets by country based on the location of the assets. Amounts below exclude discontinued operations. (in thousands) March 31, December 31, United States $ 104,491 $ 100,021 Other Countries 14,125 15,291 Total $ 118,616 $ 115,312 The following table represents Goodwill by business segment. Amounts below exclude discontinued operations. (in thousands) March 31, December 31, Hospitality $ 10,315 $ 10,315 Government 736 736 Total $ 11,051 $ 11,051 Customers comprising 10% or more of the Company's total revenues, excluding discontinued operations, are summarized as follows: For the three months ended March 31, 2016 2015 Hospitality segment McDonald’s Corporation 17 % 18 % Yum! Brands, Inc. 12 % 8 % Government segment U.S. Department of Defense 39 % 43 % All Others 32 % 31 % 100 % 100 % No other customer within All Others represented more than 10% of the Company’s total revenue for the three months ended March 31, 2016 or 2015.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2016
Fair Value of Financial Instruments [Abstract]
Fair Value of Financial Instruments	Note 9 — Fair Value of Financial Instruments The Company’s financial instruments have been recorded at fair value using available market information and valuation techniques. The fair value hierarchy is based upon three levels of input, which are: Level 1 − quoted prices in active markets for identical assets or liabilities (observable) Level 2 − inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable market data for essentially the full term of the asset or liability (observable) Level 3 − unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable) The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables and debt instruments. For cash and cash equivalents, trade receivables and trade payables, the carrying amounts of these financial instruments as of March 31, 2016 and December 31, 2015 were considered representative of their fair values. The estimated fair value of the Company’s long-term debt and line of credit at March 31, 2016 and December 31, 2015 was based on variable and fixed interest rates at March 31, 2016 and December 31, 2015, respectively, for new issues with similar remaining maturities and approximates the respective carrying values at March 31, 2016 and December 31, 2015. The deferred compensation assets and liabilities primarily relate to the Company’s Deferred Compensation Plan, which allows for pre-tax salary deferrals for certain key employees. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, as defined under U.S. GAAP, because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company holds insurance investments to partially offset the Company’s liabilities under the Deferred Compensation Plan, which are recorded at fair value each period using the cash surrender value of the insurance investments. The Company has obligations, to be paid in cash, to the former owners of Brink Software, based on the achievement of certain conditions as defined in the definitive agreement. The fair value of this contingent consideration payable was estimated using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included the Company’s probability assessments of expected future cash flows related to the Company’s acquisition of Brink Software during the contingent consideration period, appropriately discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of the definitive agreement. Any change in the fair value adjustment is recorded in the earnings of that period. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations. Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement. The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis (in thousands): Level 3 Inputs Liabilities Balance at December 31, 2015 $ 5,130 New level 3 liability - Total gains (losses) reported in earnings - Transfers into or out of Level 3 - Balance at March 31, 2016 $ 5,130

Divestiture and Discontinued 16

Divestiture and Discontinued Operations (Tables)	3 Months Ended
	Mar. 31, 2016
Divestiture and Discontinued Operations [Abstract]
Summarized financial information of discontinued operations	The following table summarizes the results from discontinued operations (in thousands): March 31, 2016 2015 Operations Total revenues $ - $ 4,406 Loss from discontinued operations before income taxes $ - $ (1,347 ) Benefit from income taxes - 770 Loss from discontinued operations, net of taxes $ - $ (577 )

Accounts Receivable (Tables)

Accounts Receivable (Tables)	3 Months Ended
	Mar. 31, 2016
Accounts Receivable [Abstract]
Accounts receivable, net	The Company’s net accounts receivable consist of, excluding discontinued operations: (in thousands) March 31, December 31, Government segment: Billed $ 12,200 $ 9,400 Advanced billings (654 ) (1,266 ) 11,546 8,134 Hospitality segment: Accounts receivable - net 22,426 21,396 $ 33,972 $ 29,530

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2016
Inventories [Abstract]
Components of inventory	Inventories are primarily used in the manufacture, maintenance and service of hospitality products. The components of inventories, net consist of the following, excluding discontinued operations: (in thousands) March 31, 2016 December 31, Finished goods $ 9,146 $ 8,914 Work in process 601 263 Component parts 5,927 5,068 Service parts 6,702 7,254 $ 22,376 $ 21,499

Identifiable intangible asset19

Identifiable intangible assets and Goodwill (Tables)	3 Months Ended
	Mar. 31, 2016
Identifiable intangible assets and Goodwill [Abstract]
Components of identifiable intangible assets	The components of identifiable intangible assets, excluding discontinued operations, are: (in thousands) March 31, December 31, Estimated Useful Life Acquired and internally developed software costs $ 13,384 $ 12,725 3 - 7 years Customer relationships 160 160 7 years Non-competition agreements 30 30 1 year 13,574 12,915 Less accumulated amortization (2,921 ) (2,417 ) $ 10,653 $ 10,498 Trademarks, trade names (non-amortizable) 400 400 N/A $ 11,053 $ 10,898
Future amortization of intangible assets	The expected future amortization of these intangible assets assuming straight-line amortization of capitalized software costs and acquisition related intangibles is as follows (in thousands): 2016 $ 1,514 2017 1,918 2018 1,754 2019 1,357 2020 1,181 Thereafter 2,929 Total $ 10,653

Earnings Per share (Tables)

Earnings Per share (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings per share [Abstract]
Reconciliation of the weighted average shares outstanding for the basic and diluted EPS computations	The following is a reconciliation of the weighted average shares outstanding for the basic and diluted EPS computations (in thousands, except share and per share data): For the three months 2016 2015 Income from continuing operations $ 15 $ 192 Basic: Shares outstanding at beginning of period 15,645 15,592 Weighted average shares issued during the period, net 1 4 Weighted average common shares, basic 15,646 15,596 Income from continuing operations per common share, basic $ 0.00 $ 0.01 Diluted: Weighted average common shares, basic 15,646 15,596 Dilutive impact of stock options and restricted stock awards 77 114 Weighted average common shares, diluted 15,723 15,710 Income from continuing operations per common share, diluted $ 0.00 $ 0.01

Segment and Related Informati21

Segment and Related Information (Tables)	3 Months Ended
	Mar. 31, 2016
Segment and Related Information [Abstract]
Information of the Company's segments	Information as to the Company's segments is set forth below. Amounts below exclude discontinued operations. (in thousands) 2016 2015 Revenues: Hospitality $ 33,788 $ 31,382 Government 21,517 23,836 Total $ 55,305 $ 55,218 Operating income (loss): Hospitality $ (500 ) $ (317 ) Government 1,807 1,245 Other (1,243 ) (273 ) 64 655 Other income, net (70 ) (206 ) Interest expense 29 (86 ) Income before provision for income taxes $ 23 $ 363 Depreciation, amortization and accretion: Hospitality $ 732 $ 637 Government 9 12 Other 36 69 Total $ 777 $ 718 Capital expenditures including software costs: Hospitality $ 948 $ 628 Government 7 - Other 26 60 Total $ 981 $ 688 Revenues by country: United States $ 50,219 $ 49,777 Other Countries 5,086 5,441 Total $ 55,305 $ 55,218
Identifiable assets by business segment	The following table represents identifiable assets by business segment. Amounts below exclude discontinued operations. (in thousands) March 31, December 31, Hospitality $ 75,953 $ 72,948 Government 13,673 10,052 Other 28,990 32,312 Total $ 118,616 $ 115,312
Identifiable assets by geographic area	The following table represents assets by country based on the location of the assets. Amounts below exclude discontinued operations. (in thousands) March 31, December 31, United States $ 104,491 $ 100,021 Other Countries 14,125 15,291 Total $ 118,616 $ 115,312
Goodwill by business segment	The following table represents Goodwill by business segment. Amounts below exclude discontinued operations. (in thousands) March 31, December 31, Hospitality $ 10,315 $ 10,315 Government 736 736 Total $ 11,051 $ 11,051
Revenue percentage by customer/segment	Customers comprising 10% or more of the Company's total revenues, excluding discontinued operations, are summarized as follows: For the three months ended March 31, 2016 2015 Hospitality segment McDonald’s Corporation 17 % 18 % Yum! Brands, Inc. 12 % 8 % Government segment U.S. Department of Defense 39 % 43 % All Others 32 % 31 % 100 % 100 %

Fair Value of Financial Instr22

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2016
Fair Value of Financial Instruments [Abstract]
Summary of changes in fair value of the Companys Level 3 assets and liabilities that are measured at fair value on a recurring basis	The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis (in thousands): Level 3 Inputs Liabilities Balance at December 31, 2015 $ 5,130 New level 3 liability - Total gains (losses) reported in earnings - Transfers into or out of Level 3 - Balance at March 31, 2016 $ 5,130

Divestiture and Discontinued 23

Divestiture and Discontinued Operations (Details) - USD ($)	Nov. 04, 2015	Mar. 31, 2016	Mar. 31, 2015
Operations
Loss from discontinued operations, net of taxes		$ 0	$ (577,000)
PAR Springer Miller Systems Inc [Member]
Operations
Total revenues		0	4,406,000
Loss from discontinued operations before income taxes		0	(1,347,000)
Benefit from income taxes		0	770,000
Loss from discontinued operations, net of taxes		0	(577,000)
Total consideration	$ 16,600,000
Consideration received	12,100,000
Consideration receivable	4,500,000
Estimated fair value of the notes receivable	3,400,000
Consideration available upon achievement of targets	$ 1,500,000
Liabilities of discontinued operations		$ 280,000	$ 441,000

Accounts Receivable (Details)

Accounts Receivable (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Accounts Receivable [Abstract]
Accounts receivable - net	$ 33,972,000	$ 29,530,000
Allowances for doubtful accounts	812,000	875,000
Government segment [Member]
Accounts Receivable [Abstract]
Accounts receivable - net	11,546,000	8,134,000
Government segment [Member] | Billed [Member]
Accounts Receivable [Abstract]
Accounts receivable - net	12,200,000	9,400,000
Government segment [Member] | Advance billings [Member]
Accounts Receivable [Abstract]
Accounts receivable - net	(654,000)	(1,266,000)
Hospitality segment [Member]
Accounts Receivable [Abstract]
Accounts receivable - net	$ 22,426,000	$ 21,396,000

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Component of inventory use in hospitality product [Abstract]
Finished goods	$ 9,146	$ 8,914
Work in process	601	263
Component parts	5,927	5,068
Service parts	6,702	7,254
Inventory net	22,376	21,499
Inventory reserves	$ 9,100	$ 8,800

Identifiable intangible asset26

Identifiable intangible assets and Goodwill (Details)	3 Months Ended
	Mar. 31, 2016USD ($)SegmentUnit	Mar. 31, 2015USD ($)	Dec. 31, 2015USD ($)
Finite-Lived Intangible Assets [Line Items]
Software costs capitalized	$ 659,000	$ 410,000
Amortization of capitalized software costs	263,000	187,000
Amortization of identifiable intangible assets	$ 241,000	$ 249,000
Number of operating segments | Segment	2
Number of reporting units | Unit	2
Goodwill	$ 11,051,000		$ 11,051,000
Components of identifiable intangible assets [Abstract]
Intangible assets - gross	13,574,000		12,915,000
Less accumulated amortization	(2,921,000)		(2,417,000)
Total	10,653,000		10,498,000
Intangible assets - net	11,053,000		10,898,000
Future amortization of intangible assets assuming straight-line amortization of capitalized software costs [Abstract]
2,016	1,514,000
2,017	1,918,000
2,018	1,754,000
2,019	1,357,000
2,020	1,181,000
Thereafter	2,929,000
Total	10,653,000		10,498,000
Trademarks, Trade Names [Member]
Components of identifiable intangible assets [Abstract]
Indefinite-lived non-amortizable intangible assets	400,000		400,000
Acquired and Internally Developed Software Costs [Member]
Components of identifiable intangible assets [Abstract]
Intangible assets - gross	$ 13,384,000		12,725,000
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years
Components of identifiable intangible assets [Abstract]
Intangible assets - gross	$ 160,000		160,000
Non-competition Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	1 year
Components of identifiable intangible assets [Abstract]
Intangible assets - gross	$ 30,000		30,000
Restaurants [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	10,300,000		10,300,000
Government [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 700,000		$ 700,000
Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Minimum [Member] | Acquired and Internally Developed Software Costs [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years
Maximum [Member] | Acquired and Internally Developed Software Costs [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years

Stock Based Compensation (Detai

Stock Based Compensation (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock Based Compensation [Abstract]
Total stock-based compensation expense (benefit)	$ 66,000	$ 245,000
Stock-based compensation expense, tax benefit	26,000	$ 28,000
Unrecognized compensation expense	$ 571,000

Earnings per share (Details)

Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings per share [Abstract]
Anti-dilutive stock options outstanding (in shares)	16,000	151,000
Reconciliation of the weighted average shares outstanding for the basic and diluted EPS computations [Abstract]
Income from continuing operations	$ 15	$ 192
Basic [Abstract]
Shares outstanding at beginning of period (in shares)	15,645,000	15,592,000
Weighted average shares issued during the period, net (in shares)	1,000	4,000
Weighted average common shares, basic (in shares)	15,646,000	15,596,000
Income from continuing operations per common share, basic (in dollars per share)	$ 0	$ 0.01
Diluted [Abstract]
Weighted average common shares, basic (in shares)	15,646,000	15,596,000
Dilutive impact of stock options and restricted stock awards (in shares)	77,000	114,000
Weighted average common shares, diluted (in shares)	15,723,000	15,710,000
Income from continuing operations per common share, diluted (in dollars per share)	$ 0	$ 0.01

Segment and Related Informati29

Segment and Related Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)Segmenth	Mar. 31, 2015USD ($)
Information as to the Company's segments [Abstract]
Revenues	$ 55,305	$ 55,218
Operating income (loss)	64	655
Other expense, net	(70)	(206)
Interest income (expense), net	29	(86)
Income from continuing operations before provision for income taxes	23	363
Depreciation, amortization and accretion	777	718
Capital expenditures including software costs	981	688
Other [Member]
Information as to the Company's segments [Abstract]
Operating income (loss)	(1,243)	(273)
Depreciation, amortization and accretion	36	69
Capital expenditures including software costs	$ 26	60
Reportable Units [Member]
Segment and Related Information [Abstract]
Number of reportable segments | Segment	3
Reportable Segments [Member] | Hospitality [Member]
Segment and Related Information [Abstract]
Number of reportable segments | Segment	1
Number of hours of telephone support for hospitality segment | h	24
Information as to the Company's segments [Abstract]
Revenues	$ 33,788	31,382
Operating income (loss)	(500)	(317)
Depreciation, amortization and accretion	732	637
Capital expenditures including software costs	$ 948	628
Reportable Segments [Member] | Government [Member]
Segment and Related Information [Abstract]
Number of reportable segments | Segment	1
Information as to the Company's segments [Abstract]
Revenues	$ 21,517	23,836
Operating income (loss)	1,807	1,245
Depreciation, amortization and accretion	9	12
Capital expenditures including software costs	7	0
Reportable Geographical Components [Member] | United States [Member]
Information as to the Company's segments [Abstract]
Revenues	50,219	49,777
Reportable Geographical Components [Member] | Other Countries [Member]
Information as to the Company's segments [Abstract]
Revenues	$ 5,086	$ 5,441

Segment and Related Informati30

Segment and Related Information, Reconciliation of Segment Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Identifiable assets by geographic area [Abstract]
Identifiable assets	$ 118,616	$ 115,312
Goodwill by business segment [Abstract]
Goodwill	11,051	11,051
Government [Member]
Goodwill by business segment [Abstract]
Goodwill	700	700
Other [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	28,990	32,312
Reportable Segments [Member] | Hospitality [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	75,953	72,948
Goodwill by business segment [Abstract]
Goodwill	10,315	10,315
Reportable Segments [Member] | Government [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	13,673	10,052
Goodwill by business segment [Abstract]
Goodwill	736	736
Reportable Geographical Components [Member] | United States [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	104,491	100,021
Reportable Geographical Components [Member] | Other Countries [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	$ 14,125	$ 15,291

Segment and Related Informati31

Segment and Related Information, Revenue By Major Customer (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	100.00%	100.00%
All Others [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	32.00%	31.00%
Reportable Segments [Member] | Hospitality segment [Member] | McDonald's Corporation [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	17.00%	18.00%
Reportable Segments [Member] | Hospitality segment [Member] | Yum! Brands, Inc. [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	12.00%	8.00%
Reportable Segments [Member] | Government segment [Member] | U.S. Department of Defense [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	39.00%	43.00%

Fair Value of Financial Instr32

Fair Value of Financial Instruments (Details) - Contingent Consideration Liability [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at December 31, 2015	$ 5,130
New level 3 liability	0
Total gains (losses) reported in earnings	0
Transfers into or out of Level 3	0
Balance at March 31, 2016	$ 5,130