PAR Technology (PAR) 8-K 2016 Second Quarter Results from Continuing Operations

Exhibit 99.1

	FOR RELEASE	New Hartford, NY, July 27, 2016
	CONTACT:	Christopher R. Byrnes (315) 738-0600ext. 6226 cbyrnes@partech.com, www.partech.com

PAR TECHNOLOGY CORPORATION ANNOUNCES

2016 SECOND QUARTER RESULTS FROM CONTINUING OPERATIONS

New Hartford, NY- July 27, 2016 -- PAR Technology Corporation (NYSE: PAR) today announced results from continuing operations for the second quarter ended June 30, 2016.

Summary of Fiscal 2016 Second Quarter and Year-to-Date Financial Results from Continuing Operations

· Revenues were reported at $52.7 million in the second quarter of fiscal 2016, compared to $58.9 million in the same period in 2015, a 10.6% decrease.

· GAAP net income from continuing operations in the second quarter of fiscal 2016 was $0.1 million, or $0.01 earnings per diluted share, compared to a GAAP net income from continuing operations of $1.2 million, or $0.08 earnings per diluted share in the same period in 2015.

· Non-GAAP net income from continuing operations in the second quarter of fiscal 2016 was $0.6 million, or $0.04 per diluted share, compared to a non-GAAP net income from continuing operations of $1.7 million, or $0.11 earnings per diluted share, in the same period in 2015.

· Revenue decreased to $108.0 million in the first six months of fiscal 2016, compared to $114.1 million in the same period in 2015.

· GAAP net income from continuing operations in the first six months of fiscal 2016 was $0.1 million or $0.01 earnings per diluted share, compared to GAAP net income from continuing operations of $1.4 million, or $0.09 earnings per diluted share, in the same period in 2015.

· Non-GAAP net income from continued operations in the first six months of fiscal 2016 was $1.6 million, or $0.10 earnings per diluted share, compared to non-GAAP net income from continuing operations of $2.3 million or $0.15 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 following this news release.

“During the second quarter, we continued to execute against our strategic priorities to accelerate, scale and diversify our business,” said Karen E. Sammon, PAR Technology President and Chief Executive Officer. “Our Company performed as expected in the quarter, and the underlying fundamentals of our business remain strong as the execution of PAR’s software solutions strategy is gaining traction.  Our Brink POS solution and associated hardware had a strong quarter as its revenues grew 227% in the quarter from the prior year’s second quarter and more than 61% growth from the sequential quarter in 2016. Another strong metric surpassed in the quarter is recurring revenues for our business grew 9% over prior year’s second quarter and 4% on a sequential quarter basis.  Recurring revenue now comprises more than 25% of our total Restaurant/Retail business.  Additional strength is being showcased in our Government segment and we continue to secure add-on and new contract awards and have successfully rebuilt our contract backlog to over $100 million.”

Sammon continued, “2016 is about establishing the foundation for long-term financial growth.  We continue to make significant progress regarding our targeted investment strategies in our subscription revenue solutions.  These strategic investments will increase our profitability, diversify our revenue portfolio, enhance our geographic footprint, and enable us to scale. We are confident about our position in the markets we serve and in the momentum from our investment strategies that will provide the necessary tools to ensure long-term financial improvement in our results and deliver enhanced shareholder value.”

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 and 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’s Hospitality 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.

There will be a conference call at 10:00 a.m. (Eastern) on July 27, 2016, during which the Company’s management will discuss the financial results for the second 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 6:00 p.m. ET on July 27, 2016 through August 5, 2016 by dialing 855-859-2056 and using conference ID 53282383.

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PAR TECHNOLOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

Assets	(Unaudited) June 30, 2016			December 31, 2015
Current assets:
Cash and cash equivalents	$	5,374		$	8,024
Accounts receivable-net		29,462			29,530
Inventories-net		25,392			21,499
Note receivable		4,366			-
Income taxes receivable		223			-
Deferred income taxes		6,689			6,741
Other current assets		4,559			3,808
Total current assets		76,065			69,602
Property, plant and equipment - net		6,055			5,716
Note receivable		-			4,259
Deferred income taxes		11,038			11,038
Goodwill		11,051			11,051
Intangible assets - net		11,102			10,898
Other assets		3,792			3,687
Total Assets	$	119,103		$	116,251
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	2,156		$	2,103
Accounts payable		16,532			11,729
Accrued salaries and benefits		5,864			5,727
Accrued expenses		5,217			7,644
Customer deposits and deferred service revenue		11,732			10,819
Income taxes payable		-			279
Liabilities of discontinued operations		142			441
Total current liabilities		41,643			38,742
Long-term debt		476			566
Other long-term liabilities		8,759			8,883
Total liabilities		50,878			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; 17,478,622 and 17,352,838 shares issued; 15,770,513 and 15,644,729 outstanding at June 30, 2016 and December 31, 2015, respectively		349			347
Capital in excess of par value		45,977			45,753
Retained earnings		30,663			30,574
Accumulated other comprehensive loss		(2,928	)		(2,778	)
Treasury stock, at cost, 1,708,109 shares		(5,836	)		(5,836	)
Total shareholders’ equity		68,225			68,060
Total Liabilities and Shareholders’ Equity	$	119,103		$	116,251

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,
	2016			2015			2016			2015
Net revenues:
Product	$	21,444		$	25,267		$	43,528		$	46,275
Service		11,804			12,100			23,508			22,474
Contract		19,410			21,561			40,927			45,397
		52,658			58,928			107,963			114,146
Costs of sales:
Product		16,137			18,292			32,579			33,200
Service		8,219			8,754			16,818			16,592
Contract		17,857			20,189			37,512			42,663
		42,213			47,235			86,909			92,455
Gross margin		10,445			11,693			21,054			21,691
Operating expenses:
Selling, general and administrative		7,058			6,845			14,600			13,505
Research and development		2,793			2,661			5,555			5,095
Amoritzation of identifiable intangible assets		242			249			483			498
		10,093			9,755			20,638			19,098
Operating income from continuing operations		352			1,938			416			2,593
Other (expense) income, net		(210	)		20			(280	)		(186	)
Interest income (expense), net		3			(85	)		32			(171	)
Income from continuing operations before provision for income taxes		145			1,873			168			2,236
Provision for income taxes		(45	)		(629	)		(53	)		(800	)
Income from continuing operations		100			1,244			115			1,436
Discontinued operations
Loss on discontinued operations (net of tax)		(26	)		(1,143	)		(26	)		(1,720	)
Net income (loss)	$	74		$	101		$	89		$	(284	)
Basic Earnings per Share:
Income from continuing operations		0.01			0.08			0.01			0.09
Loss from discontinued operations		(0.00	)		(0.07	)		(0.00	)		(0.11	)
Net income (loss)	$	0.00		$	0.01		$	0.01		$	(0.02	)
Diluted Earnings per Share:
Income from continuing operations		0.01			0.08			0.01			0.09
Loss from discontinued operations		(0.00	)		(0.07	)		(0.00	)		(0.11	)
Net income (loss)	$	0.00		$	0.01		$	0.01		$	(0.02	)
Weighted average shares outstanding
Basic		15,615			15,584			15,651			15,541
Diluted		15,670			15,671			15,717			15,658

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, 2016									For the three months ended June 30, 2015
	Reported basis (GAAP)			Adjustments			Comparable basis (Non- GAAP)			Reported basis (GAAP)			Adjustments			Comparable basis (Non- GAAP)
Net revenues	$	52,658			-			52,658		$	58,928			-			58,928
Costs of sales		42,213			-			42,213			47,235			85			47,150
Gross Margin		10,445			-			10,445			11,693			85			11,778
Operating Expenses
Selling, general and administrative		7,058			572			6,486			6,845			346			6,499
Research and development		2,793			-			2,793			2,661			13			2,648
Amortization of identifiable intangible assets		242			242			-			249			249			-
Total operating expenses		10,093			814			9,279			9,755			608			9,147
Operating income from continuing operations		352			814			1,166			1,938			693			2,631
Other income, net		(210	)		-			(210	)		20			-			20
Interest income (expense), net		3			26			29			(85	)		25			(60	)
Income from continuing operations before provision for income taxes		145			840			985			1,873			718			2,591
Provision for income taxes		(45	)		(311	)		(356	)		(629	)		(266	)		(895	)
Income from continuing operations	$	100		$	529		$	629		$	1,244		$	452		$	1,696
Loss from discontinued operations, (net of tax)	$	(26	)				$	(26	)	$	(1,143	)				$	(1,143	)
Net income	$	74					$	603		$	101					$	553
Income per diluted share from continuing operations	$	0.01					$	0.04		$	0.08					$	0.11
Loss per diluted share from discontinuing operations	$	(0.00	)				$	(0.00	)	$	(0.07	)				$	(0.07	)
Income per diluted share	$	0.00					$	0.04		$	0.01					$	0.04

The Company reports its financial results in accordance with GAAP, which refers to financial information presented in accordance with generally accepted accounting principles in the United States.  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 supplemental 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.

PAR's results of operations are impacted by certain items which include severance charges from restructuring business operations, equity based compensation, acquisition related expenditures, and other one-time charges that may not be indicative of the Company’s business trends. Management believes that adjusting its operating expenses, operating income, net earnings and diluted earnings per share to remove these certain items provides an useful perspective with respect to our results and provides meaningful supplemental information to both management and investors that removes these items which are difficult to predict and are often unanticipated, and which, as a result are difficult to include in analyst's financial models and our investors' expectations with any degree of specificity. PAR believes the adjusted totals facilitate comparison on a year-over-year basis.

PAR's results of operations are further impacted by costs from its multi-year ERP system implementation. Management believes that further adjusting its operating expenses, operating income, net earnings and diluted earnings per share to remove the impact of the ERP expenses provides an useful perspective with respect to underlying business trends and results and provides meaningful supplemental information to both management and investors that is indicative of the performance of the Company's underlying operations and facilitates comparison on a year-over-year basis.

The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes. These financial measures should not be used as a substitute in assessing the company's results of operations for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. As a result, in the tables that follow, each period presented is adjusted to remove the certain items noted above. Each period has been further adjusted to remove expenses related to the ERP system implementation.

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 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 $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.  During the second quarter of 2015, the Company recorded severance and other related charges of $416,000, of which $85,000 is included in cost of sales, $13,000 is included in research and development and $318,000 is included in selling, general and administrative.  Also included within selling, general and administrative is equity based compensation charges of $28,000.  Lastly, related to the acquisition of Brink, the Company recognized amortization of acquired intangible assets of $249,000 and accreted interest of $25,000.  The aforementioned charges, along with an associated adjustment to the Company’s provision for income taxes have been excluded in the Company’s non-GAAP measures because they are considered non-recurring in nature and/or are quantitatively and qualitatively different from the Company’s core operations during any particular period.

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, 2016									For the six months ended June 30, 2015
	Reported  basis (GAAP)			Adjustments			Comparable  basis (Non- GAAP)			Reported basis (GAAP)			Adjustments			Comparable  basis (Non- GAAP)
Net revenues	$	107,963			-		$	107,963		$	114,146			-		$	114,146
Costs of sales		86,909			-			86,909			92,455			151			92,304
Gross Margin		21,054			-			21,054			21,691			151			21,842
Operating Expenses
Selling, general and administrative		14,600			1,749			12,851			13,505			706			12,799
Research and development		5,555			-			5,555			5,095			13			5,082
Acquisition amortization		483			483			-			498			498			-
Total operating expenses		20,638			2,232			18,406			19,098			1,217			17,881
Operating income from continuing operations		416			2,232			2,648			2,593			1,368			3,961
Other (expense) income, net		(280	)		-			(280	)		(186	)		-			(186	)
Interest expense		32			52			84			(171	)		51			(120	)
Income from continuing operations before provision for income taxes		168			2,284			2,452			2,236			1,419			3,655
Provision for income taxes		(53	)		(845	)		(898	)		(800	)		(525	)		(1,325	)
Income from continuing operations	$	115		$	1,439		$	1,554		$	1,436		$	894		$	2,330
Loss from discontinued operations, (net of tax)	$	(26	)				$	(26	)	$	(1,720	)				$	(1,720	)
Net income (loss)	$	89					$	1,528		$	(284	)				$	610
Income per diluted share from continuing operations	$	0.01					$	0.10		$	0.09					$	0.15
Loss per diluted share from discontinuing operations	$	(0.00	)				$	(0.00	)	$	(0.11	)				$	(0.11	)
Income (loss) per diluted share	$	0.01					$	0.10		$	(0.02	)				$	0.04

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.  During the six months ended June 30, 2015, the Company recorded severance and other related charges of $597,000, of which $151,000 is included in cost of sales, $13,000 is included in research and development and $433,000 is included in selling, general and administrative.  Also included within selling, general and administrative is equity based compensation charges of $273,000.  Lastly, related to the acquisition of Brink, the Company recognized amortization of acquired intangible assets of $498,000 and accreted interest of $51,000.  The aforementioned charges, along with an associated adjustment to the Company’s provision for income taxes have been excluded in the Company’s non-GAAP measures because they are considered non-recurring in nature and/or are quantitatively and qualitatively different from the Company’s core operations during any particular period.