Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 28, 2017 | Jun. 30, 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 Public Float | $ 48,995,090 | ||
Entity Common Stock, Shares Outstanding | 15,771,345 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 9,055 | $ 8,024 |
Accounts receivable-net | 30,705 | 29,530 |
Inventories-net | 26,237 | 21,499 |
Note receivable | 3,510 | 0 |
Income taxes receivable | 261 | 0 |
Deferred income taxes | 7,767 | 6,741 |
Other current assets | 4,027 | 3,431 |
Assets of discontinued operations | 462 | 377 |
Total current assets | 82,024 | 69,602 |
Property, plant and equipment - net | 7,035 | 5,716 |
Note receivable | 0 | 4,259 |
Deferred income taxes | 9,650 | 11,038 |
Goodwill | 11,051 | 11,051 |
Intangible assets - net | 10,966 | 10,898 |
Other assets | 3,785 | 3,687 |
Total Assets | 124,511 | 116,251 |
Current liabilities: | ||
Current portion of long-term debt | 187 | 2,103 |
Accounts payable | 16,687 | 11,729 |
Accrued salaries and benefits | 5,470 | 5,727 |
Accrued expenses | 4,682 | 7,644 |
Customer deposits and deferred service revenue | 19,814 | 10,819 |
Income taxes payable | 0 | 279 |
Liabilities of discontinued operations | 0 | 441 |
Total current liabilities | 46,840 | 38,742 |
Long-term debt | 379 | 566 |
Other long-term liabilities | 7,712 | 8,883 |
Total liabilities | 54,931 | 48,191 |
Commitments and contingencies | ||
Shareholders' Equity: | ||
Preferred stock, $.02 par value, 1,000,000 shares authorized | 0 | 0 |
Common stock, $.02 par value, 29,000,000 shares authorized; 17,479,454 and 17,352,838 shares issued, 15,771,345 and 15,644,729 outstanding at December 31, 2016 and 2015, respectively | 350 | 347 |
Capital in excess of par value | 46,203 | 45,753 |
Retained earnings | 32,357 | 30,574 |
Accumulated other comprehensive loss | (3,494) | (2,778) |
Treasury stock, at cost, 1,708,109 shares | (5,836) | (5,836) |
Total shareholders' equity | 69,580 | 68,060 |
Total Liabilities and Shareholders' Equity | $ 124,511 | $ 116,251 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 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) | 17,479,454 | 17,352,838 |
Common stock, outstanding (in shares) | 15,771,345 | 15,644,729 |
Treasury stock, at cost (in shares) | 1,708,109 | 1,708,109 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Net revenues: | ||
Product | $ 100,271 | $ 94,397 |
Service | 49,070 | 46,754 |
Contract | 80,312 | 87,852 |
Revenue, net | 229,653 | 229,003 |
Costs of sales: | ||
Product | 73,976 | 68,223 |
Service | 35,647 | 33,875 |
Contract | 73,830 | 81,848 |
Cost of goods and services sold | 183,453 | 183,946 |
Gross margin | 46,200 | 45,057 |
Operating expenses: | ||
Selling, general and administrative | 31,440 | 27,374 |
Research and development | 11,581 | 10,067 |
Amortization of identifiable intangible assets | 966 | 987 |
Operating expenses | 43,987 | 38,428 |
Operating income from continuing operations | 2,213 | 6,629 |
Other income (expense), net | 1,316 | (800) |
Interest income (expense) | 121 | (308) |
Income from continuing operations before provision for income taxes | 3,650 | 5,521 |
Provision for income taxes | (1,147) | (1,500) |
Income from continuing operations | 2,503 | 4,021 |
Discontinued operations | ||
Loss on discontinued operations (net of tax) | (720) | (4,912) |
Net income (loss) | $ 1,783 | $ (891) |
Basic Earnings per Share: | ||
Income from continuing operations (in dollars per share) | $ 0.16 | $ 0.26 |
Loss from discontinued operations (in dollars per share) | (0.05) | (0.32) |
Net income (loss) (in dollars per share) | 0.11 | (0.06) |
Diluted Earnings per Share: | ||
Income from continuing operations (in dollars per share) | 0.16 | 0.26 |
Loss from discontinued operations (in dollars per share) | (0.05) | (0.32) |
Net income (loss) (in dollars per share) | $ 0.11 | $ (0.06) |
Weighted average shares outstanding | ||
Basic (in shares) | 15,675 | 15,562 |
Diluted (in shares) | 15,738 | 15,666 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | ||
Net income (Loss) | $ 1,783 | $ (891) |
Other comprehensive loss net of applicable tax: | ||
Foreign currency translation adjustments | (716) | (1,462) |
Comprehensive income (Loss) | $ 1,067 | $ (2,353) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Capital in Excess of Par Value [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2014 | $ 346 | $ 44,854 | $ 31,465 | $ (1,316) | $ (5,836) | $ 69,513 |
Balance (in shares) at Dec. 31, 2014 | 17,275,000 | (1,708,000) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (891) | (891) | ||||
Issuance of common stock upon the exercise of stock options | $ 2 | 472 | 474 | |||
Issuance of common stock upon the exercise of stock options (in shares) | 94,000 | |||||
Net issuance of restricted stock awards | $ (1) | (1) | ||||
Net issuance of restricted stock awards (in shares) | (17,000) | |||||
Equity based compensation | 487 | 487 | ||||
Stock options and awards tax benefits | (60) | (60) | ||||
Translation adjustments, net of tax | (1,462) | (1,462) | ||||
Balance at Dec. 31, 2015 | $ 347 | 45,753 | 30,574 | (2,778) | $ (5,836) | $ 68,060 |
Balance (in shares) at Dec. 31, 2015 | 17,352,000 | (1,708,000) | 15,644,729 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 1,783 | $ 1,783 | ||||
Issuance of common stock upon the exercise of stock options | $ 1 | 26 | $ 27 | |||
Issuance of common stock upon the exercise of stock options (in shares) | 5,000 | 5,000 | ||||
Net issuance of restricted stock awards | $ 2 | $ 2 | ||||
Net issuance of restricted stock awards (in shares) | 122,000 | |||||
Equity based compensation | 469 | 469 | ||||
Stock options and awards tax benefits | (45) | (45) | ||||
Translation adjustments, net of tax | (716) | (716) | ||||
Balance at Dec. 31, 2016 | $ 350 | $ 46,203 | $ 32,357 | $ (3,494) | $ (5,836) | $ 69,580 |
Balance (in shares) at Dec. 31, 2016 | 17,479,000 | (1,708,000) | 15,771,345 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY [Abstract] | ||
Translation adjustments, tax | $ 944 | $ 476 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net income (Loss) | $ 1,783 | $ (891) |
Loss from discontinued operations | 720 | 4,912 |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Insurance recovery (loss) on investment | (771) | 776 |
Depreciation, amortization and accretion | 4,624 | 3,070 |
Provision for bad debts | 401 | 772 |
Provision for obsolete inventory | 1,249 | 1,293 |
Equity based compensation | 469 | 487 |
Change in fair value of contingent consideration | (1,130) | 90 |
Deferred income tax | 708 | (1,910) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (1,576) | (628) |
Inventories | (5,987) | 3,136 |
Income tax receivable/(payable) | (540) | (196) |
Other current assets | (248) | 587 |
Other assets | (194) | (644) |
Accounts payable | 4,958 | (7,529) |
Accrued expenses | (2,023) | 214 |
Customer deposits | 9,032 | (1,062) |
Deferred service revenue | (37) | 251 |
Other long-term liabilities | (41) | (54) |
Deferred tax equity based compensation | (45) | (60) |
Net cash provided by operating activities-continuing operations | 11,352 | 2,614 |
Net cash used in operating activities-discontinued operations | (356) | (2,020) |
Net cash provided by operating activities | 10,996 | 594 |
Cash flows from investing activities: | ||
Capital expenditures | (3,433) | (1,705) |
Capitalization of software costs | (2,685) | (2,148) |
Investment expenditure | 0 | (776) |
Proceeds from sale of business | 0 | 12,100 |
Working capital adjustment paid | (977) | 0 |
Net cash (used in) provided by investing activities-continuing operations | (7,095) | 7,471 |
Net cash used in investing activities-discontinued operations | 0 | (1,046) |
Net cash (used in) provided by investing activities | (7,095) | 6,425 |
Cash flows from financing activities: | ||
Payments of long-term debt | (181) | (173) |
Payments of other borrowings | (214,980) | (222,156) |
Proceeds from other borrowings | 214,980 | 217,156 |
Payments for deferred acquisition obligations | (2,000) | (3,000) |
Proceeds from stock awards | 27 | 473 |
Net cash used in financing activities | (2,154) | (7,700) |
Effect of exchange rate changes on cash and cash equivalents | (716) | (1,462) |
Net increase (decrease) in cash and cash equivalents | 1,031 | (2,143) |
Cash and cash equivalents at beginning of period | 8,024 | 10,167 |
Cash and cash equivalents at end of period | 9,055 | 8,024 |
Less cash and cash equivalents of discontinued operations at end of period | 0 | 0 |
Cash and cash equivalents of continuing operations at end of period | 9,055 | 8,024 |
Cash paid during the period for: | ||
Interest | 94 | 206 |
Income taxes, net of refunds | 714 | 310 |
Supplemental disclosures of non-cash information: | ||
Sale of business through note receivable | $ 0 | $ 4,259 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 — Summary of Significant Accounting Policies Basis of consolidation The consolidated financial statements include the accounts of PAR Technology Corporation and its subsidiaries (ParTech, Inc., ParTech (Shanghai) Company Ltd., PAR Springer-Miller Systems, Inc., Springer-Miller Canada, ULC, PAR Canada ULC, Brink Software, Inc., PAR Government Systems Corporation and Rome Research Corporation), collectively referred to as the “Company.” All significant intercompany transactions have been eliminated in consolidation. During fiscal year 2015, the Company entered into an asset purchase agreement to sell substantially all of the assets of our Hotel/Spa technology business operated under PAR Springer-Miller Systems, Inc. (“PSMS”). The 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. See Note 2 – Divestiture and Discontinued Operations - in the Notes to Consolidated Financial Statements for further discussion. Business combinations The Company accounts for business combinations pursuant ASC 805, Business Combinations, which requires that assets acquired and liabilities assumed be recorded at their respective fair values on the date of acquisition. The fair value of the consideration paid is assigned to the underlying net assets of the acquired business based on their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is allocated to goodwill (the “Acquisition Method”). The purchase price allocation process requires the Company to make significant assumptions and estimates in determining the purchase price and the assets acquired and liabilities assumed at the acquisition date. The Company’s assumptions and estimates are subject to refinement and, as a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon conclusion of the measurement period, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. The Company’s consolidated financial statements and results of operations reflect an acquired business after the completion of the acquisition. Contingent Consideration The Company determines the acquisition date fair value of contingent consideration 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 Topic 820, Fair Value Measurement. 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 Inc. 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. The liabilities for the contingent consideration are established at the time of the acquisition and will be evaluated on a quarterly basis based on additional information as it becomes available. Any change in the fair value adjustment is recorded in the earnings of that period. During 2016, we recorded a $1.1 million adjustment to decrease the fair value of our contingent consideration related to the acquisition of Brink Software Inc., versus a $0.1 million adjustment to increase the fair value during 2015. This is reflected within other expense on the statement of operations. 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. Revenue recognition policy Restaurant/Retail Contracts Our Restaurant/Retail segment’s revenues consist of sales of the Company’s standard POS system to the Restaurant/Retail segment. We derive revenue from the following sources: (1) hardware sales, (2) software license agreements, including perpetual licenses and software as a service, (3) professional services, (4) hosting services and (5) post-contract customer support (“PCS”). We recognize revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, we have delivered the product or performed the service, the fee is fixed or determinable and collection is probable. Determining whether and when some of these criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue we report. Hardware Revenue recognition on hardware sales occurs upon delivery to the customer site (or when shipped for systems that are not installed by the Company) when persuasive evidence of an arrangement exists, the price is fixed or determinable, and collectability is reasonably assured. Software Revenue recognition on software sales generally occurs upon delivery to the customer, when persuasive evidence of an arrangement exists, the price is fixed or determinable, and collectability is reasonably assured. For software sales sold as a perpetual license, typically our Pixel software offering, where the Company is the sole party that has the proprietary knowledge to install the software, revenue is recognized upon installation and when the system is ready to go live. Service Service revenue consists of installation and training services, field and depot repair, subscription software products, associated software maintenance, and software related hosted services. Installation and training service revenue are based upon standard hourly/daily rates as well as contracted prices with the customer, and revenue is recognized as the services are performed. Support maintenance and field and depot repair are provided to customers either on a time and materials basis or under a maintenance contract. Services provided on a time and materials basis are recognized as the services are performed. Service revenues from maintenance contracts are recorded as deferred revenue when billed to and collected from the customer and are recognized ratably over the underlying contract period. Software sold as a service with our Brink and SureCheck software offerings, is recorded as deferred revenue when billed and collected and recognized ratably over the contract term. The Company frequently enters into multiple-element arrangements with our customers including hardware, software, professional consulting services and maintenance support services. For arrangements involving multiple deliverables, when deliverables include software and non-software products and services, we evaluate and separate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (a) the delivered item has value to the customer on a stand-alone basis; and (b) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in the control of PAR. Multiple element arrangements which include hardware, service, and software offerings are separated based upon the stand-alone price for each individual hardware, service, or software sold in the arrangement irrespective of the combination of products and services which are included in a particular arrangement. As such, overall consideration is allocated to each unit of accounting based on the unit’s relative selling prices. In such circumstances, the Company uses a hierarchy to determine the selling price to be used for allocating revenue to each deliverable: (i) vendor-specific objective evidence of selling price (VSOE), (ii) third-party evidence of selling price (TPE), and (iii) best estimate of selling price (BESP). VSOE generally exists only when the Company sells the deliverable separately and is the price actually charged by the Company for that deliverable. The Company uses BESP to allocate revenue when we are unable to establish VSOE or TPE of selling price. BESP is primarily used for elements such as products that are not consistently priced within a narrow range. The Company determines BESP for a deliverable by considering multiple factors including product and customer class, geography, average discount, and management’s historical pricing practices. Amounts allocated to the delivered hardware and software elements are recognized at the time of sale provided the other conditions for revenue recognition have been met. Amounts allocated to the undelivered maintenance and other services elements are recognized as the services are provided or on a straight-line basis over the service period. In certain instances, customer acceptance is required prior to the passage of title and risk of loss of the delivered products. In such cases, revenue is not recognized until the customer acceptance is obtained. Delivery and acceptance generally occur in the same reporting period. Software elements, generally software PCS, and professional services revenue are recognized in accordance with authoritative guidance on software revenue recognition. For the software and software-related elements of such transactions, revenue is allocated based on the relative fair value of each element, and fair value is determined by vender specific objective evidence, where available. If VSOE is not available for all elements, we will use the residual method to separate the elements as long as we have VSOE for the undelivered elements. If we cannot objectively determine the fair value of any undelivered element included in such multiple-element arrangements, we defer the revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements. Government Contracts The Company’s contract revenues generated by the Government segment result primarily from contract services performed for the U.S. Government under a variety of cost-plus fixed fee, time-and-material, and fixed-price contracts. Revenue on cost-plus fixed fee contracts is recognized based on allowable costs for labor hours delivered, as well as other allowable costs plus the applicable fee. Revenue on time and material contracts is recognized by multiplying the number of direct labor hours delivered in the performance of the contract by the contract billing rates and adding other direct costs as incurred. Revenue from fixed-price contracts is recognized as labor hours are delivered which approximates the straight-line basis of the life of the contract. The Company’s obligation under these contracts is to provide labor hours to conduct research or to staff facilities with no other deliverables or performance obligations. Anticipated losses on all contracts are recorded in full when identified. Unbilled accounts receivable is stated in the Company’s consolidated financial statements at their estimated realizable value. Contract costs, including indirect expenses, are subject to audit and adjustment through negotiations between the Company and U.S. Government representatives. Warranty Provisions Warranty provisions for product warranties are recorded in the period in which the Company becomes obligated to honor the related right, which generally is the period in which the related product revenue is recognized. The Company accrues warranty reserves based upon historical factors such as labor rates, average repair time, travel time, number of service calls per machine and cost of replacement parts. When a sale is consummated, a warranty reserve is recorded based upon the estimated cost to provide the service over the warranty period. Cash and cash equivalents The Company considers all highly liquid investments, purchased with a remaining maturity of three months or less, to be cash equivalents. Accounts receivable – Allowance for doubtful accounts Allowances for doubtful accounts are based on estimates of probable losses related to accounts receivable balances. The establishment of allowances requires the use of judgment and assumptions regarding probable losses on receivable balances. The Company continuously monitors collections and payments from our customers and maintain a provision for estimated credit losses based on our historical experience and any specific customer collection issues that we have identified. Thus, if the financial condition of our customers were to deteriorate, our actual losses may exceed our estimates, and additional allowances would be required. Inventories The Company’s inventories are valued at the lower of cost or market, with cost determined using the first-in, first-out (“FIFO”) method. The Company uses certain estimates and judgments and considers several factors including product demand, changes in customer requirements and changes in technology to provide for excess and obsolescence reserves to properly value inventory. Property, plant and equipment Property, plant and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to twenty-five years. Expenditures for maintenance and repairs are expensed as incurred. Other assets Other assets primarily consist of cash surrender value of life insurance related to the Company’s Deferred Compensation Plan eligible to certain employees. The funded balance is reviewed on an annual basis. Income taxes The provision for income taxes is based upon pretax earnings with deferred income taxes provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The Company records a valuation allowance when necessary to reduce deferred tax assets to their net realizable amounts. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Other long-term liabilities Other long-term liabilities represent amounts owed to certain employees who are participants in the Company’s Deferred Compensation Plan and the estimated fair value of the contingent consideration payable related to the Brink Software Inc. acquisition. During 2016, we recorded a $1.1 million adjustment to decrease the fair value of our contingent consideration related to the acquisition of Brink Software Inc., versus a $0.1 million adjustment to increase the fair value during 2015. This is reflected within other expense on the statement of operations. 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. Foreign currency The assets and liabilities for the Company’s international operations are translated into U.S. dollars using year-end exchange rates. Income statement items are translated at average exchange rates prevailing during the year. The resulting translation adjustments are recorded as a separate component of shareholders’ equity under the heading Accumulated Other Comprehensive Income (Loss). Exchange gains and losses on intercompany balances of permanently invested long-term loans are also recorded as a translation adjustment and are included in Accumulated Other Comprehensive Loss. Foreign currency transaction gains and losses are recorded in other income in the accompanying statements of operations. Other income (expense) The components of other (expense) income from continuing operations for the two years ending December 31 are as follows: Year ended December 31 (in thousands) 2016 2015 Foreign currency loss $ (24 ) $ (193 ) Rental (loss) income-net (662 ) 264 Insurance recovery / investment write off 771 (776 ) Fair value adjustment contingent consideration 1,130 (90 ) Other 101 (5 ) Income (expense) $ 1,316 $ (800 ) During 2016, we recorded a $1.1 million adjustment to decrease the fair value of its contingent consideration related to the acquisition of Brink Software Inc. In addition, we recorded an insurance recovery of $0.8 million in 2016 relating to the unauthorized transfers of the Company's funds by its former chief financial officer. Also, during 2016, the Company incurred a net loss on rental contracts of approximately $0.7 million. During 2015, the investment write-off of $0.8 million represents the write-off of unauthorized investments that were made in contravention of the Company’s policies and procedures involving the Company’s funds. The unauthorized investments occurred during the period between September 25, 2015 and November 6, 2015. Identifiable intangible assets 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 Restaurant/Retail 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 can be produced to meet 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 periods ended December 31, 2016 and 2015 were $2.7 million and $2.1 million, 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 $1.1 million and $0.8 million, in 2016 and 2015, respectively. The Company assessed its recoverability of capitalized software assets noting an impairment charge of $0.5 million to accelerate one of its software modules. There was no impairment charge recorded as of December 31, 2015. The components of identifiable intangible assets, excluding discontinued operations, are: December 31, (in thousands) 2016 2015 Estimated Useful Life Acquired and internally developed software costs $ 15,884 $ 13,702 3 - 7 years Customer relationships 160 160 7 years Non-compete agreements 30 30 1 year 16,074 13,892 Less accumulated amortization (5,508 ) (3,394 ) $ 10,566 $ 10,498 Trademarks, trade names (non-amortizable) 400 400 N/A $ 10,966 $ 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): 2017 $ 2,219 2018 2,054 2019 1,616 2020 1,396 2021 1,031 Thereafter 2,250 Total $ 10,566 The Company has elected to test for impairment of indefinite lived intangible assets during the fourth quarter of its fiscal year. To value the indefinite lived intangible assets, the Company utilizes the royalty method to estimate the fair values of the trademarks and trade names. During 2016, the Company recorded an impairment charge of $0.5 million to accelerate one of its software modules. There was no impairment charge recorded as of December 31, 2015. Stock-based compensation The Company recognizes all stock-based compensation to employees, including grants of employee stock options and restricted stock awards, in the financial statements as compensation cost over the vesting period using an accelerated expense recognition method, based on their fair value on the date of grant. Earnings per share Basic earnings per share are computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the dilutive impact of outstanding stock options and restricted stock awards. The following is a reconciliation of the weighted average shares outstanding for the basic and diluted earnings per share computations (in thousands, except share and per share data): December 31, 2016 2015 Income from continuing operations $ 2,503 $ 4,021 Basic: Shares outstanding at beginning of year 15,645 15,592 Weighted average shares issued (cancelled) during the year, net 30 (30 ) Weighted average common shares, basic 15,675 15,562 Income from continuing operations per common share, basic $ 0.16 $ 0.26 Diluted: Weighted average common shares, basic 15,675 15,562 Dilutive impact of stock options and restricted stock awards 63 104 Weighted average common shares, diluted 15,738 15,666 Income from continuing operations per common share, diluted $ 0.16 $ 0.26 At December 31, 2016 and 2015 there were 38,000 and 112,000 incremental shares, respectively, from the assumed exercise of stock options that were excluded from the computation of diluted earnings per share because of the anti-dilutive effect on earnings per share. There were no restricted stock awards excluded from the computation of diluted earnings per share for each of the fiscal years ended December 31, 2016 and 2015. Goodwill The Company tests goodwill for impairment on an annual basis, which is on the first day of the fourth quarter, or more often if events or circumstances indicate there may be impairment. The Company operates in two reportable operating segments - Restaurant/Retail and Government. Goodwill impairment testing is performed at the sub-segment level (referred to as a reporting unit). The two reporting units utilized by the Company are: Restaurant/Retail, and Government. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, 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 outstanding for goodwill within continuing operations was $11.1 million at December 31, 2016 and 2015. There was no Impairment of long-lived assets The Company evaluates the accounting and reporting for the impairment of long-lived assets in accordance with the reporting requirements of ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. The Company will recognize impairment of long-lived assets or asset groups if the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the carrying value of a long-lived asset or asset group is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset or asset group for assets to be held and used, or the amount by which the carrying value exceeds the fair market value less cost to sell for assets to be sold. During 2016, the Company recorded an impairment charge of $0.5 million to accelerate one of its software modules. There was no impairment charge recorded as of December 31, 2015. Reclassifications Amounts in prior years’ consolidated financial statements are reclassified whenever necessary to conform to the current year’s presentation. 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. See Note 3 – Discontinued Operations - in the Notes to Consolidated Financial Statements for further discussion. Use of estimates The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount 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 revenue recognition, stock based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment, identifiable intangible assets and goodwill, valuation allowances for receivables, inventories and deferred income tax assets, and measurement of contingent consideration at fair value. Actual results could differ from those estimates. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09 to simplify several aspects of the accounting for employee share-based payment transactions standard, including the classification of excess tax benefits and deficiencies and the accounting for employee forfeitures. The guidance is effective for the Company beginning in the first quarter of 2017 at which time we will adopt. The updates to the accounting standard will include the following: • Excess tax benefits and deficiencies will no longer be recognized as a change in additional paid-in-capital in the equity section of the balance sheet, instead they are to be recognized in the income statement as a tax expense or benefit. In the statement of cash flows, excess tax benefits and deficiencies will no longer be classified as a financing activity, instead they will be classified as an operating activity. The impact of this change in accounting to future periods cannot be estimated, as it is dependent upon several variables not in control of the Company, such as the future timing and amount of employee option exercises, restricted stock vesting and the Company’s future stock price. • Entities will have the option to continue to reduce share-based compensation expense during the vesting period of outstanding awards for estimated future employee forfeitures or they may elect to recognize the impact of forfeitures as they actually occur. The Company will continue to reduce the share-based compensation expense during the vesting period of outstanding awards for estimated future forfeitures. • The ASU also provides new guidance to other areas of the standard including minimum statutory tax withholding rules and the calculation of diluted common shares outstanding. Adoption approach varies based on the amendment topic and the Company does not expect a significant impact at this time. In February 2016, the FASB issued ASU 2016-02 impacting the accounting for leases intending to increase transparency and comparability of organizations by requiring balance sheet presentation of leased assets and increased financial statement disclosure of leasing arrangements. The revised standard will require entities to recognize a liability for its lease obligations and a corresponding asset representing the right to use the underlying asset over the lease term. Lease obligations are to be measured at the present value of lease payments and accounted for using the effective interest method. The accounting for the leased asset will differ slightly depending on whether the agreement is deemed to be a financing or operating lease. For finance leases, the leased asset is depreciated on a straight-line basis and recorded separately from the interest expense in the income statement resulting in higher expense in the earlier part of the lease term. For operating leases, the depreciation and interest expense components are combined, recognized evenly over the term of the lease, and presented as a reduction to operating income. The ASU requires that assets and liabilities be presented or disclosed separately and classified appropriately as current and noncurrent. The ASU further requires additional disclosure of certain qualitative and quantitative information related to lease agreements. The new standard is effective for the Company beginning in the first quarter 2019 and early adoption is permitted, although unlikely at this time. We are currently evaluating the impact of these amendments on our financial statements. In November 2015, the FASB issued new guidance related to the balance sheet classification of deferred taxes. This standard requires an entity to classify all deferred tax assets, along with any valuation allowance, as noncurrent on the balance sheet. As a result, each jurisdiction will have one net noncurrent deferred tax asset or liability. The new standard is effective for the Company for fiscal years beginning after December 15, 2016. The adoption of this standard in Q1 2017, which will be applied prospectively, is not expected to have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued new guidance related to the measurement of inventory. This standard changes the inventory valuation method from the lower of cost or market to the lower of cost or net realizable value for inventory valued under the first-in, first-out or average cost methods. The new standard is effective for the Company beginning in Q1 of 2017, and requires prospective adoption. We do not anticipate the adoption will have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued new guidance related to disclosures around going concern, including management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures when conditions or events raise substantial doubt about an entity’s ability to continue as a going concern. The new standard is effective for the Company beginning in Q1 2017, with early adoption permitted although the Company did not early adopt. The impact of adopting this guidance on January 1, 2017 is not expected to have a material impact on our consolidated financial statements. In May 2014, the FASB amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In July 2015, the FASB affirmed its proposal of a one-year deferral of the effective date of the new revenue standard. As a result, the new guidance will be effective for the Company beginning in Q1 2018. The amendments may be applied retrospectively to each prior period presented or with the cumulative effect recognized as of the date of initial application. PAR is currently evaluating the impact of these amendments and plans not to early adopt and to adopt in 2018. In the second quarter of 2017, we will commence a project to assess the potential impact of the new standard on our consolidated financial statements and related disclosures. This project will also include the assessment and enhancement of our internal processes and systems to address the new standard. At this time, we have not yet selected a transition method. Recently Adopted Accounting Pronouncements None noted in prior two years. |
Divestiture and Discontinued Op
Divestiture and Discontinued Operations | 12 Months Ended |
Dec. 31, 2016 | |
Divestiture and Discontinued Operations [Abstract] | |
Divestiture and Discontinued Operations | Note 2 — Divestiture and Discontinued Operations On November 4, 2015, ParTech, Inc. (“PTI”), a wholly owned subsidiary of PAR Technology Corporation, 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 “Group”), entered into an asset purchase agreement (the “APA”) with Gary Jonas Computing Ltd., SMS Software Holdings LLC, and Jonas Computing (UK) Ltd. (the “Purchasers”), each of which is an affiliate of the Jonas Software Group of Constellation Software Inc. of Toronto, Ontario, for the sale of substantially all of the assets of PSMS. Total consideration to be received from the sale is $16.6 million in cash (the “Base Purchase Price”), with $12.1 million received at the time of closing, and $4.5 million receivable eighteen months after the closing date, a portion of which amount will be available to pay certain indemnification obligations of the group, and/or adjusted based on the net tangible asset calculation, as defined in the APA 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 $3.5 million and is included within current assets in the Company consolidated balance sheets. During 2016, the Company reduced the receivable by $0.9 million based on the terms of the net tangible asset calculation as the working capital shortfall was greater than previously estimated. In addition to the base purchase price, contingent consideration of up to $1.5 million could be received by the Company 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 December 31, 2016, the Company has not recorded any amount associated with this contingent consideration as we do not believe achievement of the related targets is probable. Summarized financial information for the Company’s discontinued operations is as follows (in thousands): December 31, (in thousands) 2016 2015 Assets Other current assets $ 462 $ 377 Assets of discontinued operation $ 462 $ 377 Liabilities Accrued salaries and benefits $ - $ 441 Liabilities of discontinued operation $ - $ 441 Summarized financial information for the Company’s discontinued operations is as follows (in thousands): December 31, (in thousands) 2016 2015 Total revenues $ - $ 14,545 Loss from discontinued operations before income taxes $ (1,131 ) $ (5,702 ) Loss on disposition - (2,408 ) Benefit from income taxes 411 3,198 Loss from discontinued operations, net of taxes $ (720 ) $ (4,912 ) During 2016, the Company recognized a loss on discontinued operations of $0.7 million (net of tax) mainly due to a reduction of the note receivable of $0.6 million (net of tax) and $0.1 million (net of tax) adjustment due to a loss on foreign currency exposure. The reduction of the note receivable is reflected in the Company’s earnings for 2016 and will reduce the amount the Company aniticipates collecting on May 4, 2017 to $3.5 million. In addition to the adjustments above, the Company paid a $1.0 million working capital adjustment, of which $0.9 million was included in accrued expenses at December 31, 2015, that resulted in a loss (net of tax) of $26,000. The working capital payment was estimated and paid as it was defined in the Springer-Miller APA. |
Accounts Receivable, net
Accounts Receivable, net | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable, net [Abstract] | |
Accounts Receivable, net | Note 3 — Accounts Receivable, net The Company’s net accounts receivable consists of, excluding discontinued operations: December 31, (in thousands) 2015 2015 Government segment: Billed $ 6,779 $ 9,400 Advanced billings (1,599 ) (1,266 ) 5,180 8,134 Hospitality segment: Accounts receivable - net 25,525 21,396 $ 30,705 $ 29,530 At December 31, 2016 and 2015, the Company had recorded allowances for doubtful accounts of $0.9 million and $0.9 million, respectively, against Restaurant/Retail segment accounts receivable. Write-offs of accounts receivable during fiscal years 2016 and 2015 were $0.3 million and $0.4 million, respectively. The provision for doubtful accounts recorded in the consolidated statements of operations was $0.4 million and $0.8 million in 2016 and 2015, respectively. |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2016 | |
Inventories, net [Abstract] | |
Inventories, net | Note 4 — Inventories, net Inventories are used in the manufacture and service of Restaurant/Retail products. The components of inventory, net consist of the following, excluding discontinued operations: December 31, (in thousands) 2016 2015 Finished Goods $ 9,423 $ 8,775 Work in process 443 402 Component parts 10,386 5,068 Service parts 5,985 7,254 $ 26,237 $ 21,499 At December 31, 2016 and December 31, 2015, the Company had recorded inventory reserves of $9.2 million and $8.8 million, respectively, against Restaurant/Retail inventories, which relates primarily to service parts. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 5 — Property, Plant and Equipment The components of property, plant and equipment, excluding discontinued operations, are: December 31, (in thousands) 2016 2015 Land $ 253 $ 253 Building and improvements 5,816 5,645 Rental property 5,345 5,330 Furniture and equipment 13,890 11,804 25,304 23,032 Less accumulated depreciation (18,269 ) (17,316 ) $ 7,035 $ 5,716 The estimated useful lives of buildings and improvements and rental property are twenty to twenty-five years. The estimated useful lives of furniture and equipment range from three to eight years. Depreciation expense from continuing operations was $2.1 million and $1.1 million for 2016 and 2015, respectively. The Company leases a portion of its headquarters facility to various tenants. Net rent received from these leases totaled $0.3 million and $0.3 million for 2016 and 2015, respectively. Future minimum rent payments due to the Company under these lease arrangements are approximately $0.2 million, and $0.1 million 2017 and 2018, respectively. The Company leases office space under various operating leases. Rental expense from continuing operations on operating leases was approximately $1.6 million and $1.4 million for 2016 and 2015, respectively. Future minimum lease payments under all non-cancelable operating leases are (in thousands): 2017 1,360 2018 1,109 2019 895 2020 328 2021 208 Thereafter 503 $ 4,403 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt [Abstract] | |
Debt | Note 6 — Debt On November 29, 2016, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, as the Borrower thereunder, together with certain of the Company’s US subsidiaries, as “Loan Guarantors” (together with the Company, the “Loan Parties”), and JPMorgan Chase Bank, N.A., as the “Lender”. The Credit Agreement provides for revolving loans in an aggregate principal amount of up to $15.0 million to be made available to the Company; availability at any time being equal to the lesser of (i) $15.0 million and (ii) a borrowing base (equal to the sum of 80% eligible accounts, 50% eligible raw materials inventory and 35% eligible finished goods inventory, with no more than 50% of total eligible inventory included in the borrowing base), less the aggregate principal amount outstanding (the “Credit Facility”). Interest accrues on outstanding principal balances at an applicable rate per annum determined, as of the end of each fiscal quarter of the Company, by reference to the CBFR Spread or the Eurodollar Spread based on the Company’s consolidated indebtedness ratio as at the determination date. The Credit Facility replaces the Company’s asset-based credit agreement dated September 9, 2014 with JPMorgan Chase, N.A. (the “2014 ABL Credit Agreement”) and a portion of the proceeds of the Credit Facility were used to pay-off all indebtedness outstanding under the Company’s 2014 ABL Credit Agreement. The Credit Facility matures three (3) years from the date of the Credit Agreement and is guaranteed by the Loan Guarantors. The Credit Facility is secured by substantially all of the assets of the Company and of the other Loan Parties; provided, that the Credit Facility is not secured by any liens on more than 65% of the voting stock of the Company’s foreign subsidiaries. The Credit Agreement contains representations and warranties and affirmative and negative covenants that are usual and customary, including representations, warranties and covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional indebtedness, incur or permit to exist liens on assets, make investments, loans, advances, guarantees and acquisitions, consolidate or merge with or into any other company, engage in asset sales and pay dividends and make distributions. The Credit Agreement requires that the Company’s consolidated indebtedness ratio at the end of each of its fiscal quarters to be greater than 3.0 to 1.0 and maintain a fixed charge coverage ratio of not less than 1.15 to 1.0 for the Company’s fiscal quarter ending December 31, 2016 (to be tested only in the event the Company’s total consolidated indebtedness equaled or exceeded $5.0 million at the end of such fiscal quarter) and 1.25 to 1.0 for the quarter ending March 31, 2017 and each quarter thereafter. Obligations under the Credit Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including among others: nonpayment of principal, interest or fees; breach of the affirmative or negative covenants; breach of the representations or warranties in any material respect; event of default under, or acceleration of, other material indebtedness; bankruptcy or insolvency; material judgments entered against the Company or any of its subsidiaries; invalidity or unenforceability of any collateral documentation associated with the Credit Facility; and a change of control of the Company there was no outstanding balance on the line of credit at December 31, 2016. The Company was in compliance with these covenants as of December 31, 2016. In addition to the Credit Facility, the Company has a mortgage loan, collateralized by certain real estate, with a balance of $0.6 million and $0.7 million as of December 31, 2016 and 2015, respectively. This mortgage matures on November 1, 2019. The Company’s interest rate is fixed at 4.00% through the maturity date of the loan. The annual mortgage payment including interest through November 1, 2019 totals $0.2 million. In connection with the acquisition of Brink Software on September 18, 2014, the Company recorded indebtedness to the former owners of Brink under the stock purchase agreement. As of December 31, 2016 and 2015, the principal balance of the note payable was zero and $2.0 million and it had a carrying value of zero and $4.8 million, respectively. The carrying value was based on the note’s estimated fair value at the time of acquisition. The note did not bear interest and repayment terms are $3.0 million, which was paid on the first anniversary of close, September 18, 2015, and $2.0 million payable on the second anniversary of close, which was paid in September 2016. The Company’s future principal payments under the stock purchase agreement and our mortgage are as follows (in thousands): Total Less Than 1 Year 1-3 Years 3 - 5 Years More than 5 Years Debt obligations $ 566 $ 187 $ 379 $ - $ - Operating lease 4,403 1,360 2,004 536 503 Total $ 4,969 $ 1,547 $ 2,383 $ 536 $ 503 |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | Note 7 — Stock Based Compensation The Company recognizes all stock-based compensation to employees and directors, including grants of employee stock options and restricted stock awards, in the financial statements as compensation cost over the vesting period based on their fair value on the date of grant. Total stock-based compensation expense included in selling, general and administrative expense in 2016 and 2015 was $0.5 million and $0.5 million, respectively. The amount recorded for the twelve months ended December 31, 2016 and 2015 was recorded net of benefits of $0.3 million and $0.2 million, as the result of forfeitures of unvested stock awards prior to the completion of the requisite service period. The amount of total stock based compensation includes $0.1 million and $0.2 million in 2016 and 2015, respectively, relating to restricted stock awards. No compensation expense has been capitalized during 2016 and 2015. The Company has reserved 1.0 million shares under its 2015 Equity Incentive Plan (“EIP”). Stock options under this Plan may be incentive stock options or nonqualified stock options. The Plan also provides for restricted stock awards, including performance based awards. Stock options are nontransferable other than upon death. Option grants generally vest over a one to three year period after the grant and typically expire ten years after the date of the grant. The EIP provides for the grant of several different forms of stock-based compensation, including stock options to purchase shares of PAR common stock. The Compensation Committee of the Board of Directors (Compensation Committee) has discretion to determine the material terms and conditions of option awards under the EIP, provided that (i) the exercise price must be no less than the fair market value of PAR common stock (defined as the closing price) on the date of grant, (ii) the term must be no longer than ten years, and (iii) in no event shall the normal vesting schedule provide for vesting in less than one year. Other terms and conditions of an award of stock options will be determined by the Compensation Committee as set forth in the agreement relating to that award. The Compensation Committee has authority to administer the EIP. Information with respect to stock options included within this plan is as follows: No. of Shares (in thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2015 933 $ 5.14 $ 1,579 Options granted 133 5.48 Options exercised (5 ) 5.32 Forfeited and cancelled (82 ) 4.85 Expired (30 ) 4.63 Outstanding at December 31, 2016 949 $ 5.22 $ 264 Vested and expected to vest at December 31, 2016 1,062 $ 5.26 $ 260 Total shares exercisable as of December 31, 2016 397 $ 5.22 $ 111 Shares remaining available for grant 701 The weighted average grant date fair value of options granted during the years 2016 and 2015 was $1.81 and $1.44, respectively. The total intrinsic value of options exercised during the year ended December 31, 2016 was $5,800. The total intrinsic value of options exercised during the year ended December 31, 2015 was $119,000. New shares of the Company’s common stock are issued as a result of stock option exercises in 2016 and for options exercised in 2015. The fair value of options at the date of the grant was estimated using the Black-Scholes model with the following assumptions for the respective period ending December 31: 2016 2015 Expected option life 5.7 years 5.1 years Weighted average risk-free interest rate 1.3 % 1.6 % Weighted average expected volatility 33 % 30 % Expected dividend yield 0 % 0 % For the years ended December 31, 2016 and 2015, the expected option life was based on the Company’s historical experience with similar type options. Expected volatility is based on historical volatility levels of the Company’s common stock over the preceding period of time consistent with the expected life. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life. Stock options outstanding at December 31, 2016 are summarized as follows: Range of Exercise Prices Number Outstanding (in thousands) Weighted Average Remaining Life Weighted Average Exercise Price $ 4.72 - $7.08 1,082 7.52 years $ 5.26 At December 31, 2016, the aggregate unrecognized compensation cost of unvested equity awards, as determined using a Black-Scholes option valuation model, was $0.5 million (net of estimated forfeitures) which is expected to be recognized as compensation expense in fiscal years 2017 through 2019. The Company has not paid cash dividends on its common stock, and the Company presently intends to continue to retain earnings for reinvestment in growth opportunities. Accordingly, it is anticipated no cash dividends will be paid in the foreseeable future. Current year activity with respect to the Company’s non-vested restricted stock awards is as follows: Non-vested restricted stock awards (in thousands) Shares Weighted Average grant- date fair value Balance at January 1, 2016 85 $ 5.13 Granted 168 5.23 Vested (44 ) 4.94 Forfeited and cancelled (46 ) 5.31 Balance at December 31, 2016 163 $ 5.22 The EIP also provides for the issuance of restricted stock, as well as restricted stock units. These types of awards can have either service based or performance based vesting with performance goals being established by the Compensation Committee. Grants of restricted stock with service based vesting are subject to vesting periods ranging from 1 to 3 years. Grants of restricted stock with performance based vesting are subject to a vesting period of 1 to 3 years and performance conditions as defined by the Compensation Committee. The Company assesses the likelihood of achievement throughout the performance period and recognizes compensation expense associated with its performance awards based on this assessment. Other terms and conditions applicable to any award of restricted stock will be determined by the Compensation Committee and set forth in the agreement relating to that award. During 2016 and 2015, the Company issued 168,000 and 34,000 restricted stock awards, respectively, at a per share price of $0.02. For the periods ended December 31, 2016 and 2015, the Company recognized compensation expense related to the performance awards based on its estimate of the probability of achievement in accordance with ASC Topic 718. The fair value of restricted stock awards is based on the average price of the Company’s common stock on the date of grant. The weighted average grant date fair value of restricted stock awards granted during the years 2016 and 2015 was $5.23 and $4.67, respectively. In accordance with the terms of the restricted stock award agreements, the Company released 85,000 and 110,000 shares during 2016 and 2015, respectively. During 2016, there were approximately 46,000 shares of restricted stock cancelled, of which 45,000 were performance based restricted shares. During 2015, there were 112,000 shares of restricted stock cancelled, of which 102,000 were performance based restricted shares. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | Note 8 — Income Taxes The provision for income taxes from continuing operations consists of: Year ended December 31, (in thousands) 2016 2015 Current income tax: Federal $ 61 $ 221 State 167 141 Foreign 211 267 439 629 Deferred income tax: Federal 768 816 State (60 ) 55 708 871 Provision for income taxes $ 1,147 $ 1,500 The deferred tax benefit related to discontinued operations was $0.4 million in fiscal year 2016 and $3.2 million recorded in fiscal year 2015. Deferred tax liabilities (assets) are comprised of the following at: December 31, (in thousands) 2016 2015 Deferred tax liabilities: Software development costs $ 2,223 $ 1,841 Acquired intangible assets 1,731 2,088 Gross deferred tax liabilities 3,954 3,929 Allowances for bad debts and inventory (4,505 ) (4,804 ) Capitalized inventory costs (104 ) (75 ) Intangible assets (1,388 ) (1,747 ) Employee benefit accruals (2,089 ) (2,050 ) Federal net operating loss carryforward (5,820 ) (6,215 ) State net operating loss carryforward (1,085 ) (1,111 ) Tax credit carryforwards (6,888 ) (8,760 ) Foreign currency (33 ) (33 ) Other (1,333 ) (334 ) Gross deferred tax assets (23,245 ) (25,129 ) Less valuation allowance 1,874 3,421 Net deferred tax assets $ (17,417 ) $ (17,779 ) The Company has Federal tax credit carryforwards of $6.7 million that expire in various tax years from 2017 to 2036. The Company has a Federal operating loss carryforward of $18.8 million that expires in various tax years through 2034. Of the operating loss carryforward, $1.7 million will result in a benefit within additional paid in capital when realized. The Company also has state tax credit carryforwards of $0.2 million and state net operating loss carryforwards of $7.2 million that expire in various tax years through 2034. In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result of this analysis and based on the current year’s taxable income, and utilization of certain carryforwards management determined that we should reduce our valuation allowance in the current year. A valuation allowance is still required to the extent it is more likely than not that the future benefit associated with the foreign tax credit carryforwards and certain state tax loss carryforwards will not be realized. As a result, the Company recorded a tax expense associated with an increase of the deferred tax asset valuation allowance of $0.1 million for 2016. The Company records the benefits relating to uncertain tax positions only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities. Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. At December 31, 2016, the Company’s reserve for uncertain tax positions is not material and we believe we have adequately provided for its tax-related liabilities. The Company is no longer subject to United States federal income tax examinations for years before 2013. The provision for (benefit from) income taxes differed from the provision computed by applying the Federal statutory rate to income (loss) from continuing operations before taxes due to the following: Year ended December 31, 2016 2015 Federal statutory tax rate 34.0 % 34.0 % State taxes 1.4 5.8 Non deductible expenses 2.7 1.0 Tax credits (6.7 ) (4.8 ) Foreign income tax rate differential (2.1 ) (1.3 ) Valuation allowance 0.1 (9.5 ) Tax return and audit adjustments 0.0 3.8 Other 2.0 (1.8 ) 31.4 % 27.2 % |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note 9 — Employee Benefit Plans The Company has a deferred profit-sharing retirement plan that covers substantially all employees. The Company’s annual contribution to the plan is discretionary. The Company’s did not make a contribution in 2016 or 2015. The plan also contains a 401(k) provision that allows employees to contribute a percentage of their salary up to the statutory limitation. These contributions are matched at the rate of 10% by the Company. The Company’s matching contributions under the 401(k) component were $0.3 million and $0.4 million in 2016 and 2015, respectively. The Company also maintains an incentive-compensation plan. Participants in the plan are key employees as determined by the Board of Directors and executive management. Compensation under the plan is based on the achievement of predetermined financial performance goals of the Company and its subsidiaries. Awards under the plan are payable in cash. Awards under the plan totaled $0.5 million and $0.8 million, in 2016 and 2015, respectively. The Company also sponsors a deferred compensation plan for a select group of highly compensated employees. Participants may make elective deferrals of their salary to the plan in excess of tax code limitations that apply to the Company’s qualified plan. The Company invests the participants’ deferred amounts to fund these obligations. The Company also has the sole discretion to make employer contributions to the plan on behalf of the participants, though we did not make any employer contributions in 2016 or 2015. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Contingencies [Abstract] | |
Contingencies | Note 10 — Contingencies We are subject to legal proceedings, which arise in the ordinary course of business. Additionally, U.S. Government contract costs are subject to periodic audit and adjustment. Further, as disclosed in “Item 9A. Controls and Procedures”, we are currently conducting an internal investigation into import/export and sales documentation activities at our China and Singapore offices. The investigation is being conducted under the oversight of our Audit Committee, with the assistance of outside counsel, and is focused on compliance with provisions of the U.S. Foreign Corrupt Practices Act, or FCPA, and other applicable laws, and certain of our policies, including our Code of Business Conduct and Ethics. We have voluntarily notified the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) of these matters, and are fully cooperating with these agencies. During the year ended December 31, 2016, we recorded $1.3 million of expenses relating to the investigation, including expenses of outside legal counsel and forensic accountants. We are currently unable to predict what actions the SEC, the DOJ, or other governmental agencies (including foreign governmental agencies) might take, or what the likely outcome of any such actions might be, or estimate the range of reasonably possible fines or penalties, which may be material. The SEC, DOJ, and other governmental authorities have a broad range of civil and criminal sanctions, and the imposition of sanctions, fines or remedial measures could have a material adverse effect on the Company’s business, prospects, reputation, financial condition, liquidity, results of operations or cash flows. |
Segment and Related Information
Segment and Related Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment and Related Information [Abstract] | |
Segment and Related Information | Note 11 — Segment and Related Information The Company is organized in two reporting units: Restaurant/Retail, and Government. Management views the Restaurant/Retail and Government segments separately in operating its business, as the products and services are different for each segment. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Hotel/Spa reporting was sold as of November 4, 2015, and is classified as discontinued operations (see Note 2 – Divestiture and Discontinued Operations - of the Notes to Consolidated Financial Statements). The Company has two reportable business segments - Restaurant/Retail segment and Government segment. The Restaurant/Retail segment offers integrated solutions to the restaurant and retail 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. Year ended December 31, (in thousands) 2016 2015 Revenues: Restaurant/Retail $ 149,341 $ 141,151 Government 80,312 87,852 Total $ 229,653 $ 229,003 Operating income (loss) : Restaurant/Retail $ 825 $ 1,721 Government 6,160 5,365 Other (4,772 ) (457 ) 2,213 6,629 Other income, net 1,316 (800 ) Interest income (expense) 121 (308 ) Income from continuing operations before provision for income taxes $ 3,650 $ 5,521 Identifiable assets: Restaurant/Retail $ 87,672 $ 72,948 Government 6,504 10,052 Other 29,873 32,874 Total $ 124,049 $ 115,874 Goodwill: Restaurant/Retail $ 10,315 $ 10,315 Government 736 736 Total $ 11,051 $ 11,051 Depreciation, amortization and accretion: Restaurant/Retail $ 3,479 $ 2,673 Government 38 48 Other 1,107 349 Total $ 4,624 $ 3,070 Capital expenditures including software costs: Restaurant/Retail $ 3,285 $ 3,645 Government 41 - Other 2,792 208 Total $ 6,118 $ 3,853 The following table presents revenues by country based on the location of the use of the product or services. Amounts below exclude discontinued operations. December 31, 2016 2015 United States $ 210,821 $ 197,303 Other Countries 18,832 31,700 Total $ 229,653 $ 229,003 The following table presents assets by country based on the location of the asset. Amounts below exclude discontinued operations. December 31, 2016 2015 United States $ 110,369 $ 100,583 Other Countries 13,680 15,291 Total $ 124,049 $ 115,874 Customers comprising 10% or more of the Company’s total revenues, excluding discontinued operations, are summarized as follows: December 31, 2016 2015 Restaurant and Retail segment McDonald’s Corporation 25 % 19 % Yum! Brands, Inc. 11 % 10 % Government segment U.S. Department of Defense 35 % 38 % All Others 29 % 33 % 100 % 100 % No other customer within All Others represented more than 10% of the Company’s total revenue for the years ended December 31, 2016 and 2015. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 12 — 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, debt instruments and deferred compensation assets and liabilities. For cash and cash equivalents, trade receivables and trade payables, the carrying amounts of these financial instruments as of December 31, 2016, and 2015 were considered representative of their fair values. The estimated fair value of the Company’s long-term debt and line of credit at December 31, 2016 and 2015 was based on variable and fixed interest rates at December 31, 2016 and 2015, respectively, for new issues with similar remaining maturities and approximates the respective carrying values at December 31, 2016 and 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 (see Note 9 – Employees Benefit Plans - of the Notes to Consolidated Financial Statements). 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 (see Note 1 – Summary of Significant Accounting Policies - sub-footnote Contingent Consideration - of the Notes to Consolidated Financial Statements). 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 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. The liabilities for the contingent consideration were established at the time of the acquisition and are evaluated on a quarterly basis based on additional information as it becomes available. 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 - Change in fair value of contingent consideration liability (1,130 ) Transfers into or out of Level 3 - Balance at December 31, 2016 $ 4,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13 — Related Party Transactions The Company leases its corporate wellness facility to related parties at a current rate of $9,775 per month. The Company receives a complimentary membership to this facility which is provided to all employees. During 2016 and 2015 the Company received rental income amounting to $117,300 for the lease of the facility in each year. Our director, Paul D. Eurek, is President of Xpanxion LLC. In October 2016, we entered into a software development agreement with Xpanxion. In 2016, we incurred approximated $0.2 million of fees to Xpanxion under the software development agreement, but made no payments. Mr. Eurek's successor has been announced, and he intends to be fully retired from Xpanxion on June 30, 2017. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 — Subsequent Events None noted |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the accounts of PAR Technology Corporation and its subsidiaries (ParTech, Inc., ParTech (Shanghai) Company Ltd., PAR Springer-Miller Systems, Inc., Springer-Miller Canada, ULC, PAR Canada ULC, Brink Software, Inc., PAR Government Systems Corporation and Rome Research Corporation), collectively referred to as the “Company.” All significant intercompany transactions have been eliminated in consolidation. During fiscal year 2015, the Company entered into an asset purchase agreement to sell substantially all of the assets of our Hotel/Spa technology business operated under PAR Springer-Miller Systems, Inc. (“PSMS”). The 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. See Note 2 – Divestiture and Discontinued Operations - in the Notes to Consolidated Financial Statements for further discussion. |
Business combinations | Business combinations The Company accounts for business combinations pursuant ASC 805, Business Combinations, which requires that assets acquired and liabilities assumed be recorded at their respective fair values on the date of acquisition. The fair value of the consideration paid is assigned to the underlying net assets of the acquired business based on their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is allocated to goodwill (the “Acquisition Method”). The purchase price allocation process requires the Company to make significant assumptions and estimates in determining the purchase price and the assets acquired and liabilities assumed at the acquisition date. The Company’s assumptions and estimates are subject to refinement and, as a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon conclusion of the measurement period, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. The Company’s consolidated financial statements and results of operations reflect an acquired business after the completion of the acquisition. |
Contingent Consideration | Contingent Consideration The Company determines the acquisition date fair value of contingent consideration 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 Topic 820, Fair Value Measurement. 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 Inc. 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. The liabilities for the contingent consideration are established at the time of the acquisition and will be evaluated on a quarterly basis based on additional information as it becomes available. Any change in the fair value adjustment is recorded in the earnings of that period. During 2016, we recorded a $1.1 million adjustment to decrease the fair value of our contingent consideration related to the acquisition of Brink Software Inc., versus a $0.1 million adjustment to increase the fair value during 2015. This is reflected within other expense on the statement of operations. 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. |
Revenue recognition policy | Revenue recognition policy Restaurant/Retail Contracts Our Restaurant/Retail segment’s revenues consist of sales of the Company’s standard POS system to the Restaurant/Retail segment. We derive revenue from the following sources: (1) hardware sales, (2) software license agreements, including perpetual licenses and software as a service, (3) professional services, (4) hosting services and (5) post-contract customer support (“PCS”). We recognize revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, we have delivered the product or performed the service, the fee is fixed or determinable and collection is probable. Determining whether and when some of these criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue we report. Hardware Revenue recognition on hardware sales occurs upon delivery to the customer site (or when shipped for systems that are not installed by the Company) when persuasive evidence of an arrangement exists, the price is fixed or determinable, and collectability is reasonably assured. Software Revenue recognition on software sales generally occurs upon delivery to the customer, when persuasive evidence of an arrangement exists, the price is fixed or determinable, and collectability is reasonably assured. For software sales sold as a perpetual license, typically our Pixel software offering, where the Company is the sole party that has the proprietary knowledge to install the software, revenue is recognized upon installation and when the system is ready to go live. Service Service revenue consists of installation and training services, field and depot repair, subscription software products, associated software maintenance, and software related hosted services. Installation and training service revenue are based upon standard hourly/daily rates as well as contracted prices with the customer, and revenue is recognized as the services are performed. Support maintenance and field and depot repair are provided to customers either on a time and materials basis or under a maintenance contract. Services provided on a time and materials basis are recognized as the services are performed. Service revenues from maintenance contracts are recorded as deferred revenue when billed to and collected from the customer and are recognized ratably over the underlying contract period. Software sold as a service with our Brink and SureCheck software offerings, is recorded as deferred revenue when billed and collected and recognized ratably over the contract term. The Company frequently enters into multiple-element arrangements with our customers including hardware, software, professional consulting services and maintenance support services. For arrangements involving multiple deliverables, when deliverables include software and non-software products and services, we evaluate and separate each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (a) the delivered item has value to the customer on a stand-alone basis; and (b) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in the control of PAR. Multiple element arrangements which include hardware, service, and software offerings are separated based upon the stand-alone price for each individual hardware, service, or software sold in the arrangement irrespective of the combination of products and services which are included in a particular arrangement. As such, overall consideration is allocated to each unit of accounting based on the unit’s relative selling prices. In such circumstances, the Company uses a hierarchy to determine the selling price to be used for allocating revenue to each deliverable: (i) vendor-specific objective evidence of selling price (VSOE), (ii) third-party evidence of selling price (TPE), and (iii) best estimate of selling price (BESP). VSOE generally exists only when the Company sells the deliverable separately and is the price actually charged by the Company for that deliverable. The Company uses BESP to allocate revenue when we are unable to establish VSOE or TPE of selling price. BESP is primarily used for elements such as products that are not consistently priced within a narrow range. The Company determines BESP for a deliverable by considering multiple factors including product and customer class, geography, average discount, and management’s historical pricing practices. Amounts allocated to the delivered hardware and software elements are recognized at the time of sale provided the other conditions for revenue recognition have been met. Amounts allocated to the undelivered maintenance and other services elements are recognized as the services are provided or on a straight-line basis over the service period. In certain instances, customer acceptance is required prior to the passage of title and risk of loss of the delivered products. In such cases, revenue is not recognized until the customer acceptance is obtained. Delivery and acceptance generally occur in the same reporting period. Software elements, generally software PCS, and professional services revenue are recognized in accordance with authoritative guidance on software revenue recognition. For the software and software-related elements of such transactions, revenue is allocated based on the relative fair value of each element, and fair value is determined by vender specific objective evidence, where available. If VSOE is not available for all elements, we will use the residual method to separate the elements as long as we have VSOE for the undelivered elements. If we cannot objectively determine the fair value of any undelivered element included in such multiple-element arrangements, we defer the revenue until all elements are delivered and services have been performed, or until fair value can objectively be determined for any remaining undelivered elements. Government Contracts The Company’s contract revenues generated by the Government segment result primarily from contract services performed for the U.S. Government under a variety of cost-plus fixed fee, time-and-material, and fixed-price contracts. Revenue on cost-plus fixed fee contracts is recognized based on allowable costs for labor hours delivered, as well as other allowable costs plus the applicable fee. Revenue on time and material contracts is recognized by multiplying the number of direct labor hours delivered in the performance of the contract by the contract billing rates and adding other direct costs as incurred. Revenue from fixed-price contracts is recognized as labor hours are delivered which approximates the straight-line basis of the life of the contract. The Company’s obligation under these contracts is to provide labor hours to conduct research or to staff facilities with no other deliverables or performance obligations. Anticipated losses on all contracts are recorded in full when identified. Unbilled accounts receivable is stated in the Company’s consolidated financial statements at their estimated realizable value. Contract costs, including indirect expenses, are subject to audit and adjustment through negotiations between the Company and U.S. Government representatives. |
Warranty Provisions | Warranty Provisions Warranty provisions for product warranties are recorded in the period in which the Company becomes obligated to honor the related right, which generally is the period in which the related product revenue is recognized. The Company accrues warranty reserves based upon historical factors such as labor rates, average repair time, travel time, number of service calls per machine and cost of replacement parts. When a sale is consummated, a warranty reserve is recorded based upon the estimated cost to provide the service over the warranty period. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments, purchased with a remaining maturity of three months or less, to be cash equivalents. |
Accounts receivable - Allowance for doubtful accounts | Accounts receivable – Allowance for doubtful accounts Allowances for doubtful accounts are based on estimates of probable losses related to accounts receivable balances. The establishment of allowances requires the use of judgment and assumptions regarding probable losses on receivable balances. The Company continuously monitors collections and payments from our customers and maintain a provision for estimated credit losses based on our historical experience and any specific customer collection issues that we have identified. Thus, if the financial condition of our customers were to deteriorate, our actual losses may exceed our estimates, and additional allowances would be required. |
Inventories | Inventories The Company’s inventories are valued at the lower of cost or market, with cost determined using the first-in, first-out (“FIFO”) method. The Company uses certain estimates and judgments and considers several factors including product demand, changes in customer requirements and changes in technology to provide for excess and obsolescence reserves to properly value inventory. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to twenty-five years. Expenditures for maintenance and repairs are expensed as incurred. |
Other assets | Other assets Other assets primarily consist of cash surrender value of life insurance related to the Company’s Deferred Compensation Plan eligible to certain employees. The funded balance is reviewed on an annual basis. |
Income taxes | Income taxes The provision for income taxes is based upon pretax earnings with deferred income taxes provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The Company records a valuation allowance when necessary to reduce deferred tax assets to their net realizable amounts. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
Other long-term liabilities | Other long-term liabilities Other long-term liabilities represent amounts owed to certain employees who are participants in the Company’s Deferred Compensation Plan and the estimated fair value of the contingent consideration payable related to the Brink Software Inc. acquisition. During 2016, we recorded a $1.1 million adjustment to decrease the fair value of our contingent consideration related to the acquisition of Brink Software Inc., versus a $0.1 million adjustment to increase the fair value during 2015. This is reflected within other expense on the statement of operations. 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. |
Foreign currency | Foreign currency The assets and liabilities for the Company’s international operations are translated into U.S. dollars using year-end exchange rates. Income statement items are translated at average exchange rates prevailing during the year. The resulting translation adjustments are recorded as a separate component of shareholders’ equity under the heading Accumulated Other Comprehensive Income (Loss). Exchange gains and losses on intercompany balances of permanently invested long-term loans are also recorded as a translation adjustment and are included in Accumulated Other Comprehensive Loss. Foreign currency transaction gains and losses are recorded in other income in the accompanying statements of operations. |
Other income (expense) | Year ended December 31 (in thousands) 2016 2015 Foreign currency loss $ (24 ) $ (193 ) Rental (loss) income-net (662 ) 264 Insurance recovery / investment write off 771 (776 ) Fair value adjustment contingent consideration 1,130 (90 ) Other 101 (5 ) Income (expense) $ 1,316 $ (800 ) During 2016, we recorded a $1.1 million adjustment to decrease the fair value of its contingent consideration related to the acquisition of Brink Software Inc. In addition, we recorded an insurance recovery of $0.8 million in 2016 relating to the unauthorized transfers of the Company's funds by its former chief financial officer. Also, during 2016, the Company incurred a net loss on rental contracts of approximately $0.7 million. During 2015, the investment write-off of $0.8 million represents the write-off of unauthorized investments that were made in contravention of the Company’s policies and procedures involving the Company’s funds. The unauthorized investments occurred during the period between September 25, 2015 and November 6, 2015. |
Identifiable intangible assets | Identifiable intangible assets 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 Restaurant/Retail 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 can be produced to meet 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 periods ended December 31, 2016 and 2015 were $2.7 million and $2.1 million, 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 $1.1 million and $0.8 million, in 2016 and 2015, respectively. The Company assessed its recoverability of capitalized software assets noting an impairment charge of $0.5 million to accelerate one of its software modules. There was no impairment charge recorded as of December 31, 2015. The components of identifiable intangible assets, excluding discontinued operations, are: December 31, (in thousands) 2016 2015 Estimated Useful Life Acquired and internally developed software costs $ 15,884 $ 13,702 3 - 7 years Customer relationships 160 160 7 years Non-compete agreements 30 30 1 year 16,074 13,892 Less accumulated amortization (5,508 ) (3,394 ) $ 10,566 $ 10,498 Trademarks, trade names (non-amortizable) 400 400 N/A $ 10,966 $ 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): 2017 $ 2,219 2018 2,054 2019 1,616 2020 1,396 2021 1,031 Thereafter 2,250 Total $ 10,566 The Company has elected to test for impairment of indefinite lived intangible assets during the fourth quarter of its fiscal year. To value the indefinite lived intangible assets, the Company utilizes the royalty method to estimate the fair values of the trademarks and trade names. During 2016, the Company recorded an impairment charge of $0.5 million to accelerate one of its software modules. There was no impairment charge recorded as of December 31, 2015. |
Stock-based compensation | Stock-based compensation The Company recognizes all stock-based compensation to employees, including grants of employee stock options and restricted stock awards, in the financial statements as compensation cost over the vesting period using an accelerated expense recognition method, based on their fair value on the date of grant. |
Earnings per share | Earnings per share Basic earnings per share are computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the dilutive impact of outstanding stock options and restricted stock awards. The following is a reconciliation of the weighted average shares outstanding for the basic and diluted earnings per share computations (in thousands, except share and per share data): December 31, 2016 2015 Income from continuing operations $ 2,503 $ 4,021 Basic: Shares outstanding at beginning of year 15,645 15,592 Weighted average shares issued (cancelled) during the year, net 30 (30 ) Weighted average common shares, basic 15,675 15,562 Income from continuing operations per common share, basic $ 0.16 $ 0.26 Diluted: Weighted average common shares, basic 15,675 15,562 Dilutive impact of stock options and restricted stock awards 63 104 Weighted average common shares, diluted 15,738 15,666 Income from continuing operations per common share, diluted $ 0.16 $ 0.26 At December 31, 2016 and 2015 there were 38,000 and 112,000 incremental shares, respectively, from the assumed exercise of stock options that were excluded from the computation of diluted earnings per share because of the anti-dilutive effect on earnings per share. There were no restricted stock awards excluded from the computation of diluted earnings per share for each of the fiscal years ended December 31, 2016 and 2015. |
Goodwill | Goodwill The Company tests goodwill for impairment on an annual basis, which is on the first day of the fourth quarter, or more often if events or circumstances indicate there may be impairment. The Company operates in two reportable operating segments - Restaurant/Retail and Government. Goodwill impairment testing is performed at the sub-segment level (referred to as a reporting unit). The two reporting units utilized by the Company are: Restaurant/Retail, and Government. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, 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 outstanding for goodwill within continuing operations was $11.1 million at December 31, 2016 and 2015. There was no |
Impairment of long-lived assets | Impairment of long-lived assets The Company evaluates the accounting and reporting for the impairment of long-lived assets in accordance with the reporting requirements of ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. The Company will recognize impairment of long-lived assets or asset groups if the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the carrying value of a long-lived asset or asset group is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset or asset group for assets to be held and used, or the amount by which the carrying value exceeds the fair market value less cost to sell for assets to be sold. During 2016, the Company recorded an impairment charge of $0.5 million to accelerate one of its software modules. There was no impairment charge recorded as of December 31, 2015. |
Reclassifications | Reclassifications Amounts in prior years’ consolidated financial statements are reclassified whenever necessary to conform to the current year’s presentation. 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. See Note 3 – Discontinued Operations - in the Notes to Consolidated Financial Statements for further discussion. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount 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 revenue recognition, stock based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment, identifiable intangible assets and goodwill, valuation allowances for receivables, inventories and deferred income tax assets, and measurement of contingent consideration at fair value. Actual results could differ from those estimates. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In March 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09 to simplify several aspects of the accounting for employee share-based payment transactions standard, including the classification of excess tax benefits and deficiencies and the accounting for employee forfeitures. The guidance is effective for the Company beginning in the first quarter of 2017 at which time we will adopt. The updates to the accounting standard will include the following: • Excess tax benefits and deficiencies will no longer be recognized as a change in additional paid-in-capital in the equity section of the balance sheet, instead they are to be recognized in the income statement as a tax expense or benefit. In the statement of cash flows, excess tax benefits and deficiencies will no longer be classified as a financing activity, instead they will be classified as an operating activity. The impact of this change in accounting to future periods cannot be estimated, as it is dependent upon several variables not in control of the Company, such as the future timing and amount of employee option exercises, restricted stock vesting and the Company’s future stock price. • Entities will have the option to continue to reduce share-based compensation expense during the vesting period of outstanding awards for estimated future employee forfeitures or they may elect to recognize the impact of forfeitures as they actually occur. The Company will continue to reduce the share-based compensation expense during the vesting period of outstanding awards for estimated future forfeitures. • The ASU also provides new guidance to other areas of the standard including minimum statutory tax withholding rules and the calculation of diluted common shares outstanding. Adoption approach varies based on the amendment topic and the Company does not expect a significant impact at this time. In February 2016, the FASB issued ASU 2016-02 impacting the accounting for leases intending to increase transparency and comparability of organizations by requiring balance sheet presentation of leased assets and increased financial statement disclosure of leasing arrangements. The revised standard will require entities to recognize a liability for its lease obligations and a corresponding asset representing the right to use the underlying asset over the lease term. Lease obligations are to be measured at the present value of lease payments and accounted for using the effective interest method. The accounting for the leased asset will differ slightly depending on whether the agreement is deemed to be a financing or operating lease. For finance leases, the leased asset is depreciated on a straight-line basis and recorded separately from the interest expense in the income statement resulting in higher expense in the earlier part of the lease term. For operating leases, the depreciation and interest expense components are combined, recognized evenly over the term of the lease, and presented as a reduction to operating income. The ASU requires that assets and liabilities be presented or disclosed separately and classified appropriately as current and noncurrent. The ASU further requires additional disclosure of certain qualitative and quantitative information related to lease agreements. The new standard is effective for the Company beginning in the first quarter 2019 and early adoption is permitted, although unlikely at this time. We are currently evaluating the impact of these amendments on our financial statements. In November 2015, the FASB issued new guidance related to the balance sheet classification of deferred taxes. This standard requires an entity to classify all deferred tax assets, along with any valuation allowance, as noncurrent on the balance sheet. As a result, each jurisdiction will have one net noncurrent deferred tax asset or liability. The new standard is effective for the Company for fiscal years beginning after December 15, 2016. The adoption of this standard in Q1 2017, which will be applied prospectively, is not expected to have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued new guidance related to the measurement of inventory. This standard changes the inventory valuation method from the lower of cost or market to the lower of cost or net realizable value for inventory valued under the first-in, first-out or average cost methods. The new standard is effective for the Company beginning in Q1 of 2017, and requires prospective adoption. We do not anticipate the adoption will have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued new guidance related to disclosures around going concern, including management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures when conditions or events raise substantial doubt about an entity’s ability to continue as a going concern. The new standard is effective for the Company beginning in Q1 2017, with early adoption permitted although the Company did not early adopt. The impact of adopting this guidance on January 1, 2017 is not expected to have a material impact on our consolidated financial statements. In May 2014, the FASB amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In July 2015, the FASB affirmed its proposal of a one-year deferral of the effective date of the new revenue standard. As a result, the new guidance will be effective for the Company beginning in Q1 2018. The amendments may be applied retrospectively to each prior period presented or with the cumulative effect recognized as of the date of initial application. PAR is currently evaluating the impact of these amendments and plans not to early adopt and to adopt in 2018. In the second quarter of 2017, we will commence a project to assess the potential impact of the new standard on our consolidated financial statements and related disclosures. This project will also include the assessment and enhancement of our internal processes and systems to address the new standard. At this time, we have not yet selected a transition method. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements None noted in prior two years. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Components of other (expense) income | Year ended December 31 (in thousands) 2016 2015 Foreign currency loss $ (24 ) $ (193 ) Rental (loss) income-net (662 ) 264 Insurance recovery / investment write off 771 (776 ) Fair value adjustment contingent consideration 1,130 (90 ) Other 101 (5 ) Income (expense) $ 1,316 $ (800 ) |
Components of identifiable intangible assets | The components of identifiable intangible assets, excluding discontinued operations, are: December 31, (in thousands) 2016 2015 Estimated Useful Life Acquired and internally developed software costs $ 15,884 $ 13,702 3 - 7 years Customer relationships 160 160 7 years Non-compete agreements 30 30 1 year 16,074 13,892 Less accumulated amortization (5,508 ) (3,394 ) $ 10,566 $ 10,498 Trademarks, trade names (non-amortizable) 400 400 N/A $ 10,966 $ 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): 2017 $ 2,219 2018 2,054 2019 1,616 2020 1,396 2021 1,031 Thereafter 2,250 Total $ 10,566 |
Reconciliation of weighted average shares outstanding for the basic and diluted earnings per share | The following is a reconciliation of the weighted average shares outstanding for the basic and diluted earnings per share computations (in thousands, except share and per share data): December 31, 2016 2015 Income from continuing operations $ 2,503 $ 4,021 Basic: Shares outstanding at beginning of year 15,645 15,592 Weighted average shares issued (cancelled) during the year, net 30 (30 ) Weighted average common shares, basic 15,675 15,562 Income from continuing operations per common share, basic $ 0.16 $ 0.26 Diluted: Weighted average common shares, basic 15,675 15,562 Dilutive impact of stock options and restricted stock awards 63 104 Weighted average common shares, diluted 15,738 15,666 Income from continuing operations per common share, diluted $ 0.16 $ 0.26 |
Divestiture and Discontinued 25
Divestiture and Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Divestiture and Discontinued Operations [Abstract] | |
Summarized financial information of discontinued operations | Summarized financial information for the Company’s discontinued operations is as follows (in thousands): December 31, (in thousands) 2016 2015 Assets Other current assets $ 462 $ 377 Assets of discontinued operation $ 462 $ 377 Liabilities Accrued salaries and benefits $ - $ 441 Liabilities of discontinued operation $ - $ 441 Summarized financial information for the Company’s discontinued operations is as follows (in thousands): December 31, (in thousands) 2016 2015 Total revenues $ - $ 14,545 Loss from discontinued operations before income taxes $ (1,131 ) $ (5,702 ) Loss on disposition - (2,408 ) Benefit from income taxes 411 3,198 Loss from discontinued operations, net of taxes $ (720 ) $ (4,912 ) |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable, net [Abstract] | |
Accounts receivable, net | The Company’s net accounts receivable consists of, excluding discontinued operations: December 31, (in thousands) 2015 2015 Government segment: Billed $ 6,779 $ 9,400 Advanced billings (1,599 ) (1,266 ) 5,180 8,134 Hospitality segment: Accounts receivable - net 25,525 21,396 $ 30,705 $ 29,530 |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventories, net [Abstract] | |
Components of inventory | The components of inventory, net consist of the following, excluding discontinued operations: December 31, (in thousands) 2016 2015 Finished Goods $ 9,423 $ 8,775 Work in process 443 402 Component parts 10,386 5,068 Service parts 5,985 7,254 $ 26,237 $ 21,499 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Components of property, plant and equipment | The components of property, plant and equipment, excluding discontinued operations, are: December 31, (in thousands) 2016 2015 Land $ 253 $ 253 Building and improvements 5,816 5,645 Rental property 5,345 5,330 Furniture and equipment 13,890 11,804 25,304 23,032 Less accumulated depreciation (18,269 ) (17,316 ) $ 7,035 $ 5,716 |
Future minimum rent payments due to the Company | Future minimum lease payments under all non-cancelable operating leases are (in thousands): 2017 1,360 2018 1,109 2019 895 2020 328 2021 208 Thereafter 503 $ 4,403 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt [Abstract] | |
Schedule of future principal payments under its stock purchase agreement and its mortgage | The Company’s future principal payments under the stock purchase agreement and our mortgage are as follows (in thousands): Total Less Than 1 Year 1-3 Years 3 - 5 Years More than 5 Years Debt obligations $ 566 $ 187 $ 379 $ - $ - Operating lease 4,403 1,360 2,004 536 503 Total $ 4,969 $ 1,547 $ 2,383 $ 536 $ 503 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock Based Compensation [Abstract] | |
Information with respect to stock options | Information with respect to stock options included within this plan is as follows: No. of Shares (in thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2015 933 $ 5.14 $ 1,579 Options granted 133 5.48 Options exercised (5 ) 5.32 Forfeited and cancelled (82 ) 4.85 Expired (30 ) 4.63 Outstanding at December 31, 2016 949 $ 5.22 $ 264 Vested and expected to vest at December 31, 2016 1,062 $ 5.26 $ 260 Total shares exercisable as of December 31, 2016 397 $ 5.22 $ 111 Shares remaining available for grant 701 |
Assumptions for fair value of options at the date of the grant | The fair value of options at the date of the grant was estimated using the Black-Scholes model with the following assumptions for the respective period ending December 31: 2016 2015 Expected option life 5.7 years 5.1 years Weighted average risk-free interest rate 1.3 % 1.6 % Weighted average expected volatility 33 % 30 % Expected dividend yield 0 % 0 % |
Share-based compensation by exercise price range | Stock options outstanding at December 31, 2016 are summarized as follows: Range of Exercise Prices Number Outstanding (in thousands) Weighted Average Remaining Life Weighted Average Exercise Price $ 4.72 - $7.08 1,082 7.52 years $ 5.26 |
Activity with respect to non-vested stock options | Current year activity with respect to the Company’s non-vested restricted stock awards is as follows: Non-vested restricted stock awards (in thousands) Shares Weighted Average grant- date fair value Balance at January 1, 2016 85 $ 5.13 Granted 168 5.23 Vested (44 ) 4.94 Forfeited and cancelled (46 ) 5.31 Balance at December 31, 2016 163 $ 5.22 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Provision for income taxes from continuing operations | The provision for income taxes from continuing operations consists of: Year ended December 31, (in thousands) 2016 2015 Current income tax: Federal $ 61 $ 221 State 167 141 Foreign 211 267 439 629 Deferred income tax: Federal 768 816 State (60 ) 55 708 871 Provision for income taxes $ 1,147 $ 1,500 |
Deferred tax liabilities (assets) | Deferred tax liabilities (assets) are comprised of the following at: December 31, (in thousands) 2016 2015 Deferred tax liabilities: Software development costs $ 2,223 $ 1,841 Acquired intangible assets 1,731 2,088 Gross deferred tax liabilities 3,954 3,929 Allowances for bad debts and inventory (4,505 ) (4,804 ) Capitalized inventory costs (104 ) (75 ) Intangible assets (1,388 ) (1,747 ) Employee benefit accruals (2,089 ) (2,050 ) Federal net operating loss carryforward (5,820 ) (6,215 ) State net operating loss carryforward (1,085 ) (1,111 ) Tax credit carryforwards (6,888 ) (8,760 ) Foreign currency (33 ) (33 ) Other (1,333 ) (334 ) Gross deferred tax assets (23,245 ) (25,129 ) Less valuation allowance 1,874 3,421 Net deferred tax assets $ (17,417 ) $ (17,779 ) |
Effective income tax rate reconciliation | The provision for (benefit from) income taxes differed from the provision computed by applying the Federal statutory rate to income (loss) from continuing operations before taxes due to the following: Year ended December 31, 2016 2015 Federal statutory tax rate 34.0 % 34.0 % State taxes 1.4 5.8 Non deductible expenses 2.7 1.0 Tax credits (6.7 ) (4.8 ) Foreign income tax rate differential (2.1 ) (1.3 ) Valuation allowance 0.1 (9.5 ) Tax return and audit adjustments 0.0 3.8 Other 2.0 (1.8 ) 31.4 % 27.2 % |
Segment and Related Informati32
Segment and Related Information (Tables) | 12 Months Ended |
Dec. 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. Year ended December 31, (in thousands) 2016 2015 Revenues: Restaurant/Retail $ 149,341 $ 141,151 Government 80,312 87,852 Total $ 229,653 $ 229,003 Operating income (loss) : Restaurant/Retail $ 825 $ 1,721 Government 6,160 5,365 Other (4,772 ) (457 ) 2,213 6,629 Other income, net 1,316 (800 ) Interest income (expense) 121 (308 ) Income from continuing operations before provision for income taxes $ 3,650 $ 5,521 Identifiable assets: Restaurant/Retail $ 87,672 $ 72,948 Government 6,504 10,052 Other 29,873 32,874 Total $ 124,049 $ 115,874 Goodwill: Restaurant/Retail $ 10,315 $ 10,315 Government 736 736 Total $ 11,051 $ 11,051 Depreciation, amortization and accretion: Restaurant/Retail $ 3,479 $ 2,673 Government 38 48 Other 1,107 349 Total $ 4,624 $ 3,070 Capital expenditures including software costs: Restaurant/Retail $ 3,285 $ 3,645 Government 41 - Other 2,792 208 Total $ 6,118 $ 3,853 |
Revenue by geographic area | The following table presents revenues by country based on the location of the use of the product or services. Amounts below exclude discontinued operations. December 31, 2016 2015 United States $ 210,821 $ 197,303 Other Countries 18,832 31,700 Total $ 229,653 $ 229,003 |
Identifiable assets by geographic area | The following table presents assets by country based on the location of the asset. Amounts below exclude discontinued operations. December 31, 2016 2015 United States $ 110,369 $ 100,583 Other Countries 13,680 15,291 Total $ 124,049 $ 115,874 |
Revenue by major customers | Customers comprising 10% or more of the Company’s total revenues, excluding discontinued operations, are summarized as follows: December 31, 2016 2015 Restaurant and Retail segment McDonald’s Corporation 25 % 19 % Yum! Brands, Inc. 11 % 10 % Government segment U.S. Department of Defense 35 % 38 % All Others 29 % 33 % 100 % 100 % |
Fair Value of Financial Instr33
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value of Financial Instruments [Abstract] | |
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 | 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 - Change in fair value of contingent consideration liability (1,130 ) Transfers into or out of Level 3 - Balance at December 31, 2016 $ 4,000 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies, Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 25 years |
Summary of Significant Accoun35
Summary of Significant Accounting Policies, Other (Expense) Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other (expense) income [Abstract] | ||
Foreign currency loss | $ (24) | $ (193) |
Rental (loss) income-net | (662) | 264 |
Insurance recovery / investment write off | 771 | (776) |
Fair value adjustment contingent consideration | 1,130 | (90) |
Other income | 101 | |
Other expense | (5) | |
Income (expense) | $ 1,316 | $ (800) |
Summary of Significant Accoun36
Summary of Significant Accounting Policies, Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized software costs | $ 2,700 | $ 2,100 |
Amortization of capitalized software costs | 1,100 | 800 |
Impairment of intangible assets | 500 | 0 |
Components of identifiable intangible assets, including capitalized internal software development costs [Abstract] | ||
Intangible assets, gross | 16,074 | 13,892 |
Less accumulated amortization | (5,508) | (3,394) |
Finite-lived intangible assets, net | 10,566 | 10,498 |
Trademarks, trade names (non-amortizable) | 400 | 400 |
Total intangible assets, net | 10,966 | 10,898 |
Future amortization of intangible assets [Abstract] | ||
2,017 | 2,219 | |
2,018 | 2,054 | |
2,019 | 1,616 | |
2,020 | 1,396 | |
2,021 | 1,031 | |
Thereafter | 2,250 | |
Finite-lived intangible assets, net | 10,566 | 10,498 |
Acquired and Internally Developed Software Costs [Member] | ||
Components of identifiable intangible assets, including capitalized internal software development costs [Abstract] | ||
Intangible assets, gross | $ 15,884 | 13,702 |
Acquired and Internally Developed Software Costs [Member] | Minimum [Member] | ||
Components of identifiable intangible assets, including capitalized internal software development costs [Abstract] | ||
Estimated Useful Life | 3 years | |
Acquired and Internally Developed Software Costs [Member] | Maximum [Member] | ||
Components of identifiable intangible assets, including capitalized internal software development costs [Abstract] | ||
Estimated Useful Life | 7 years | |
Customer Relationships [Member] | ||
Components of identifiable intangible assets, including capitalized internal software development costs [Abstract] | ||
Intangible assets, gross | $ 160 | 160 |
Estimated Useful Life | 7 years | |
Non-compete Agreement [Member] | ||
Components of identifiable intangible assets, including capitalized internal software development costs [Abstract] | ||
Intangible assets, gross | $ 30 | $ 30 |
Estimated Useful Life | 1 year |
Summary of Significant Accoun37
Summary of Significant Accounting Policies, Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Basic and diluted earnings per share computations [Abstract] | ||
Income from continuing operations | $ 2,503 | $ 4,021 |
Basic [Abstract] | ||
Shares outstanding at beginning of year (in shares) | 15,645,000 | 15,592,000 |
Weighted average shares issued during the year, net (in shares) | 30,000 | |
Weighted average shares cancelled during the year, net (in shares) | (30,000) | |
Weighted average common shares, basic (in shares) | 15,675,000 | 15,562,000 |
Income from continuing operations per common share, basic (in dollars per share) | $ 0.16 | $ 0.26 |
Diluted [Abstract] | ||
Weighted average common shares, basic (in shares) | 15,675,000 | 15,562,000 |
Dilutive impact of stock options and restricted stock awards (in shares) | 63,000 | 104,000 |
Weighted average common shares, diluted (in shares) | 15,738,000 | 15,666,000 |
Income from continuing operations per common share, diluted (in dollars per share) | $ 0.16 | $ 0.26 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Incremental shares excluded from computation of diluted earnings per share (in shares) | 38,000 | 112,000 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Incremental shares excluded from computation of diluted earnings per share (in shares) | 0 | 0 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies, Goodwill and Impairment of Long-lived Assets (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)SegmentUnit | Dec. 31, 2015USD ($) | |
Goodwill [Abstract] | ||
Number of operating segments | Segment | 2 | |
Number of reportable units | Unit | 2 | |
Amount outstanding for goodwill within continuing operations | $ 11,051 | $ 11,051 |
Asset Impairment Charges [Abstract] | ||
Impairment charge | $ 500 | $ 0 |
Divestiture and Discontinued 39
Divestiture and Discontinued Operations (Details) - USD ($) $ in Thousands | Nov. 04, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration received | $ 0 | $ 12,100 | |
Liabilities | |||
Liabilities of discontinued operation | 0 | 441 | |
Summary of Results of Discontinued Operations [Abstract] | |||
Benefit from income taxes | 400 | 3,200 | |
Loss from discontinued operations, net of taxes | (720) | (4,912) | |
Working capital adjustment paid | 977 | 0 | |
PAR Springer Miller Systems Inc [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total consideration | $ 16,600 | ||
Consideration received | 12,100 | ||
Consideration receivable | 4,500 | ||
Estimated fair value of the notes receivable | 3,500 | ||
Decrease in receivables based on net tangible asset | (900) | ||
Consideration could be received upon achievement of targets | $ 1,500 | ||
Assets | |||
Other current assets | 462 | 377 | |
Assets of discontinued operation | 462 | 377 | |
Liabilities | |||
Accrued salaries and benefits | 0 | 441 | |
Liabilities of discontinued operation | 0 | 441 | |
Summary of Results of Discontinued Operations [Abstract] | |||
Total revenues | 0 | 14,545 | |
Loss from discontinued operations before income taxes | (1,131) | (5,702) | |
Loss on disposition | 0 | (2,408) | |
Benefit from income taxes | 411 | 3,198 | |
Loss from discontinued operations, net of taxes | (720) | (4,912) | |
Decrease in note receivables, net of tax | (600) | ||
Loss on foreign currency exposure, net of tax | (100) | ||
Working capital adjustment paid | $ (977) | ||
Working capital adjustment - accrued expenses | 900 | ||
Loss from discontinued operations - working capital adjustment, net of taxes | $ (26) |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable [Abstract] | ||
Accounts receivable-net | $ 30,705 | $ 29,530 |
Write-offs of accounts receivable | 300 | 400 |
Provision for doubtful accounts | 401 | 772 |
Government Segment [Member] | ||
Accounts Receivable [Abstract] | ||
Accounts receivable-net | 5,180 | 8,134 |
Government Segment [Member] | Billed [Member] | ||
Accounts Receivable [Abstract] | ||
Accounts receivable-net | 6,779 | 9,400 |
Government Segment [Member] | Advance Billings [Member] | ||
Accounts Receivable [Abstract] | ||
Accounts receivable-net | (1,599) | (1,266) |
Restaurant and Retail [Member] | ||
Accounts Receivable [Abstract] | ||
Accounts receivable-net | 25,525 | 21,396 |
Allowances for doubtful accounts | $ 900 | $ 900 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Component of inventory use in hospitality product [Abstract] | ||
Finished Goods | $ 9,423 | $ 8,775 |
Work in process | 443 | 402 |
Component parts | 10,386 | 5,068 |
Service parts | 5,985 | 7,254 |
Inventory net | 26,237 | 21,499 |
Inventory reserves | $ 9,200 | $ 8,800 |
Property, Plant and Equipment42
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Components of property, plant and equipment [Abstract] | ||
Property, plant and equipment, Gross | $ 25,304 | $ 23,032 |
Less accumulated depreciation | (18,269) | (17,316) |
Property, plant and equipment, Net | 7,035 | 5,716 |
Depreciation expense recorded | 2,100 | 1,100 |
Rent received from leases | 300 | 300 |
Future minimum rent payments due in 2017 | 200 | |
Future minimum rent payments due in 2018 | 100 | |
Rental expense on operating leases | 1,600 | 1,400 |
Future minimum lease payments under all non-cancelable operating leases [Abstract] | ||
2,017 | 1,360 | |
2,018 | 1,109 | |
2,019 | 895 | |
2,020 | 328 | |
2,021 | 208 | |
Thereafter | 503 | |
Total | $ 4,403 | |
Minimum [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Estimated useful lives | 3 years | |
Maximum [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Estimated useful lives | 25 years | |
Land [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Property, plant and equipment, Gross | $ 253 | 253 |
Building and Improvements [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Property, plant and equipment, Gross | $ 5,816 | 5,645 |
Building and Improvements [Member] | Minimum [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Estimated useful lives | 20 years | |
Building and Improvements [Member] | Maximum [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Estimated useful lives | 25 years | |
Rental Property [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Property, plant and equipment, Gross | $ 5,345 | 5,330 |
Rental Property [Member] | Minimum [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Estimated useful lives | 20 years | |
Rental Property [Member] | Maximum [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Estimated useful lives | 25 years | |
Furniture and Equipment [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Property, plant and equipment, Gross | $ 13,890 | $ 11,804 |
Furniture and Equipment [Member] | Minimum [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Estimated useful lives | 3 years | |
Furniture and Equipment [Member] | Maximum [Member] | ||
Components of property, plant and equipment [Abstract] | ||
Estimated useful lives | 8 years |
Debt (Details)
Debt (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Nov. 29, 2016USD ($) | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||||
Mortgage | $ 600 | $ 600 | $ 700 | |
Maturity date | Nov. 1, 2019 | |||
Fixed interest percentage rate | 4.00% | 4.00% | ||
Period considered for new rate | 5 years | |||
Annual mortgage payment | $ 200 | |||
Future Principal Payments, Debt Obligations [Abstract] | ||||
Debt obligations, Total | $ 566 | 566 | ||
Less Than 1 Year | 187 | 187 | ||
1 - 3 Years | 379 | 379 | ||
3 - 5 Years | 0 | 0 | ||
More than 5 Years | 0 | 0 | ||
Future Principal Payments, Operating Leases [Abstract] | ||||
Total | 4,403 | 4,403 | ||
Less Than 1 Year | 1,360 | 1,360 | ||
1 - 3 Years | 2,004 | 2,004 | ||
3 - 5 Years | 536 | 536 | ||
More than 5 Years | 503 | 503 | ||
Future Minimum Payments, Debt Obligations and Operating Leases [Abstract] | ||||
Total Debt Obligations and Operating Leases | 4,969 | 4,969 | ||
Total Debt Obligations and Operating Leases, Less Than 1 Year | 1,547 | 1,547 | ||
Total Debt Obligations and Operating Leases, 1 - 3 Years | 2,383 | 2,383 | ||
Total Debt Obligations and Operating Leases, 3 - 5 Years | 536 | 536 | ||
Total Debt Obligations and Operating Leases, More than 5 Years | $ 503 | $ 503 | ||
Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing availability | $ 15,000 | |||
Borrowing base percentage, eligible accounts | 80.00% | |||
Borrowing base percentage, eligible raw material inventory | 50.00% | |||
Borrowing base percentage, eligible finished goods inventory | 35.00% | |||
Credit facility maturity period | 3 years | |||
Indebtedness ratio | 1.25 | 1.25 | ||
Line of credit outstanding | $ 0 | $ 0 | ||
Credit Agreement [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Voting percentage of foreign subsidiaries | 65.00% | |||
Fixed charge coverage ratio | 1.15 | |||
Consolidated indebtedness amount | $ 5,000 | $ 5,000 | ||
Credit Agreement [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Borrowing base percentage, eligible inventory | 50.00% | |||
Indebtedness ratio | 3 | 3 | ||
Brinks Indebtedness [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 0 | $ 0 | 2,000 | |
Carrying value of note payable | $ 0 | $ 0 | $ 4,800 | |
Brinks Indebtedness [Member] | Tranche One [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | Sep. 18, 2015 | |||
Debt repayment amounts | $ 3,000 | |||
Brinks Indebtedness [Member] | Tranche Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | Sep. 30, 2016 | |||
Debt repayment amounts | $ 2,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 469 | $ 487 |
Stock-based compensation expense, tax benefit | $ 262 | $ 197 |
No. of Shares [Roll Forward] | ||
Outstanding (in shares) | 933 | |
Options granted (in shares) | 133 | |
Options exercised (in shares) | (5) | |
Forfeited and cancelled (in shares) | (82) | |
Expired (in shares) | (30) | |
Outstanding (in shares) | 949 | 933 |
Vested and expected to vest (in shares) | 1,062 | |
Total shares exercisable (in shares) | 397 | |
Shares remaining available for grant (in shares) | 701 | |
Weighted Average Exercise Price [Roll Forward] | ||
Outstanding (in dollars per share) | $ 5.14 | |
Options granted (in dollars per share) | 5.48 | |
Options Exercised (in dollars per share) | 5.32 | |
Forfeited and cancelled (in dollars per share) | 4.85 | |
Expired (in dollars per share) | 4.63 | |
Outstanding (in dollars per share) | 5.22 | $ 5.14 |
Vested and expected to vest (in dollars per share) | 5.26 | |
Total shares exercisable (in dollars per share) | $ 5.22 | |
Aggregate Intrinsic Value [Abstract] | ||
Outstanding | $ 1,579 | |
Outstanding | 264 | $ 1,579 |
Vested and expected to vest | 260 | |
Total shares exercisable | $ 111 | |
Weighted average grant date fair value of options granted (in dollars per share) | $ 1.81 | $ 1.44 |
Total intrinsic value of options exercised | $ 58 | $ 119 |
Assumptions used for fair value of options at the date of the grant [Abstract] | ||
Expected option life | 5 years 8 months 12 days | 5 years 1 month 6 days |
Weighted average risk-free interest rate | 1.30% | 1.60% |
Weighted average expected volatility | 33.00% | 30.00% |
Expected dividend yield | 0.00% | 0.00% |
Unrecognized compensation expense | $ 500 | |
Period for recognition | 2017 through 2019 | |
Weighted average grant date fair value [Roll Forward] | ||
Restricted stock awards granted (in shares) | 168 | 34 |
Share price (in dollars per share) | $ 0.02 | $ 0.02 |
Weighted average grant date fair value (in dollars per share) | $ 5.23 | $ 4.67 |
Shares released (in shares) | (85) | (110) |
Restricted stock awards cancelled (in shares) | (46) | (112) |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 72 | $ 182 |
Restricted Stock [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Restricted Stock [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Performance Based Restricted Stock [Member] | ||
Weighted average grant date fair value [Roll Forward] | ||
Restricted stock awards cancelled (in shares) | (45) | (102) |
Performance Based Restricted Stock [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Performance Based Restricted Stock [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Non-vested Equity Awards [Member] | ||
Activity of nonvested options outstanding [Roll Forward] | ||
Balance (in shares) | 85 | |
Granted (in shares) | 168 | |
Vested (in shares) | (44) | |
Forfeited and cancelled (in shares) | (46) | |
Balance (in shares) | 163 | 85 |
Weighted average grant date fair value [Roll Forward] | ||
Balance (in dollars per share) | $ 5.13 | |
Granted (in dollars per share) | 5.23 | |
Vested (in dollars per share) | 4.94 | |
Forfeited and cancelled (in dollars per share) | 5.31 | |
Balance (in dollars per share) | $ 5.26 | $ 5.13 |
2015 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized under plan approved by directors (in shares) | 1,000 | |
2015 Equity Incentive Plan [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
2015 Equity Incentive Plan [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Expiration period | 10 years | |
$4.72 to $7.08 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Lower Range of Exercise Price (in dollars per share) | $ 4.72 | |
Upper Range of Exercise Price (in dollars per share) | $ 7.08 | |
Number Outstanding (in shares) | 1,082 | |
Weighted Average Remaining Life | 7 years 6 months 7 days | |
Weighted Average Exercise Price (in dollars per share) | $ 5.22 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Current income tax [Abstract] | ||
Federal | $ 61 | $ 221 |
State | 167 | 141 |
Foreign | 211 | 267 |
Total | 439 | 629 |
Deferred income tax [Abstract] | ||
Federal | 768 | 816 |
State | (60) | 55 |
Total | 708 | 871 |
Provision for income taxes | 1,147 | 1,500 |
Deferred tax benefit related to discontinued operations | 400 | 3,200 |
Deferred tax liabilities (assets) [Abstract] | ||
Software development costs | 2,223 | 1,841 |
Acquired intangible assets | 1,731 | 2,088 |
Gross deferred tax liabilities | 3,954 | 3,929 |
Allowances for bad debts and inventory | (4,505) | (4,804) |
Capitalized inventory costs | (104) | (75) |
Intangible assets | (1,388) | (1,747) |
Employee benefit accruals | (2,089) | (2,050) |
Federal net operating loss carryforward | (5,820) | (6,215) |
State net operating loss carryforward | (1,085) | (1,111) |
Tax credit carryforwards | (6,888) | (8,760) |
Foreign currency | (33) | (33) |
Other | (1,333) | (334) |
Gross deferred tax assets | (23,245) | (25,129) |
Less valuation allowance | 1,874 | 3,421 |
Net deferred tax assets | (17,417) | $ (17,779) |
State [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforwards | 200 | |
Federal [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforwards | $ 6,700 |
Income Taxes, Operating Loss Ca
Income Taxes, Operating Loss Carryforward (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Benefit within additional paid in capital on realization of operating loss carryforward | $ 1.7 |
Tax expense associated with deferred tax asset valuation allowance | $ 0.1 |
Percentage for recognition of uncertain tax positions, minimum | 50.00% |
State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforward | $ 7.2 |
Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforward | $ 18.8 |
Income Taxes, Computation of Ef
Income Taxes, Computation of Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Computation of Effective Income Tax Rate [Abstract] | ||
Federal statutory tax rate | 34.00% | 34.00% |
State taxes | 1.40% | 5.80% |
Non deductible expenses | 2.70% | 1.00% |
Tax credits | (6.70%) | (4.80%) |
Foreign income tax rate differential | (2.10%) | (1.30%) |
Valuation allowance | 0.10% | (9.50%) |
Tax return and audit adjustments | 0.00% | 3.80% |
Other | 2.00% | (1.80%) |
Total | 31.40% | 27.20% |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Benefit Plans [Abstract] | ||
Matching contribution percentage | 10.00% | |
Matching contribution | $ 0.3 | $ 0.4 |
Awards payable under incentive-compensation plan | $ 0.5 | $ 0.8 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Contingencies [Abstract] | |
Expenses relating to investigation | $ 1.3 |
Segment and Related Informati50
Segment and Related Information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)SegmentUnith | Dec. 31, 2015USD ($) | |
Segment and Related Information [Abstract] | ||
Number of reportable units | Unit | 2 | |
Number of reportable segments | Segment | 2 | |
Number of hours of telephone support for hospitality segment (in hours) | h | 24 | |
Information as to the Company's segments [Abstract] | ||
Revenues | $ 229,653 | $ 229,003 |
Operating income (loss) | 2,213 | 6,629 |
Other (expense) income, net | 1,316 | (800) |
Interest income (expense) | 121 | (308) |
Income from continuing operations before provision for income taxes | 3,650 | 5,521 |
Identifiable assets | 124,049 | 115,874 |
Goodwill | 11,051 | 11,051 |
Depreciation, amortization and accretion | 4,624 | 3,070 |
Capital expenditures including software costs | 6,118 | 3,853 |
United States [Member] | Reportable Geographical Components [Member] | ||
Information as to the Company's segments [Abstract] | ||
Revenues | 210,821 | 197,303 |
Identifiable assets | 110,369 | 100,583 |
Other Countries [Member] | Reportable Geographical Components [Member] | ||
Information as to the Company's segments [Abstract] | ||
Revenues | 18,832 | 31,700 |
Identifiable assets | 13,680 | 15,291 |
Restaurant Retail [Member] | Reportable Segments [Member] | ||
Information as to the Company's segments [Abstract] | ||
Revenues | 149,341 | 141,151 |
Operating income (loss) | 825 | 1,721 |
Identifiable assets | 87,672 | 72,948 |
Goodwill | 10,315 | 10,315 |
Depreciation, amortization and accretion | 3,479 | 2,673 |
Capital expenditures including software costs | 3,285 | 3,645 |
Government [Member] | Reportable Segments [Member] | ||
Information as to the Company's segments [Abstract] | ||
Revenues | 80,312 | 87,852 |
Operating income (loss) | 6,160 | 5,365 |
Identifiable assets | 6,504 | 10,052 |
Goodwill | 736 | 736 |
Depreciation, amortization and accretion | 38 | 48 |
Capital expenditures including software costs | 41 | 0 |
Other [Member] | ||
Information as to the Company's segments [Abstract] | ||
Operating income (loss) | (4,772) | (457) |
Identifiable assets | 29,873 | 32,874 |
Depreciation, amortization and accretion | 1,107 | 349 |
Capital expenditures including software costs | $ 2,792 | $ 208 |
Segment and Related Informati51
Segment and Related Information, Reconciliation of Segment Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Identifiable assets by business segment [Abstract] | ||
Identifiable assets | $ 124,049 | $ 115,874 |
United States [Member] | Reportable Geographical Components [Member] | ||
Identifiable assets by business segment [Abstract] | ||
Identifiable assets | 110,369 | 100,583 |
Other Countries [Member] | Reportable Geographical Components [Member] | ||
Identifiable assets by business segment [Abstract] | ||
Identifiable assets | $ 13,680 | $ 15,291 |
Segment and Related Informati52
Segment and Related Information, Revenue By Major Customer (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue, Major Customer [Line Items] | ||
Percentage of revenue generated by customer | 100.00% | 100.00% |
Restaurant and Retail [Member] | McDonald's Corporation [Member] | Reportable Segments [Member] | ||
Revenue, Major Customer [Line Items] | ||
Percentage of revenue generated by customer | 25.00% | 19.00% |
Restaurant and Retail [Member] | Yum! Brands, Inc. [Member] | Reportable Segments [Member] | ||
Revenue, Major Customer [Line Items] | ||
Percentage of revenue generated by customer | 11.00% | 10.00% |
Government Segment [Member] | U.S. Department of Defense [Member] | Reportable Segments [Member] | ||
Revenue, Major Customer [Line Items] | ||
Percentage of revenue generated by customer | 35.00% | 38.00% |
All Others [Member] | ||
Revenue, Major Customer [Line Items] | ||
Percentage of revenue generated by customer | 29.00% | 33.00% |
Fair Value of Financial Instr53
Fair Value of Financial Instruments (Details) - Contingent Consideration Liability [Member] $ in Thousands | 12 Months Ended |
Dec. 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 |
Change in fair value of contingent consideration liability | (1,130) |
Transfers into or out of Level 3 | 0 |
Balance at December 31, 2016 | $ 4,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Monthly rental income from related parties | $ 9,775 | |
Rental income received | 117,300 | $ 117,300 |
Director [Member] | Software and Software Development Costs [Member] | ||
Related Party Transaction [Line Items] | ||
Amount of transaction made to related party | 200,000 | |
Payment made to related party | $ 0 |