PAR Technology (PAR) 10-Q 15 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 11, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	PAR TECHNOLOGY CORP
Entity Central Index Key	708,821
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,797,861
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net revenues:
Product	$ 37,206	$ 22,084
Service	14,343	11,704
Contract	14,316	21,517
Revenue, net	65,865	55,305
Costs of sales:
Product	27,572	16,442
Service	9,885	8,599
Contract	12,747	19,655
Cost of goods and services sold	50,204	44,696
Gross margin	15,661	10,609
Operating expenses:
Selling, general and administrative	9,610	7,542
Research and development	3,569	2,762
Amortization of identifiable intangible assets	241	241
Operating expenses	13,420	10,545
Operating income from continuing operations	2,241	64
Other expense, net	(248)	(70)
Interest (expense) income, net	(32)	29
Income from continuing operations before provision for income taxes	1,961	23
Provision for income taxes	(697)	(8)
Income from continuing operations	1,264	15
Discontinued operation
Income from discontinued operations (net of tax)	183	0
Net income	$ 1,447	$ 15
Basic Earnings per Share:
Income from continuing operations (in dollars per share)	$ 0.08	$ 0
Income from discontinued operations (in dollars per share)	0.01	0
Net income (in dollars per share)	0.09	0
Diluted Earnings per Share:
Income from continuing operations (in dollars per share)	0.08	0
Income from discontinued operations (in dollars per share)	0.01	0
Net income (in dollars per share)	$ 0.09	$ 0
Weighted average shares outstanding
Basic (in shares)	15,781	15,646
Diluted (in shares)	15,978	15,723

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) [Abstract]
Net income	$ 1,447	$ 15
Other comprehensive loss, net of applicable tax:
Foreign currency translation adjustments	41	(122)
Comprehensive income (loss)	$ 1,488	$ (107)

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 5,470	$ 9,055
Accounts receivable - net	34,241	30,705
Inventories-net	24,800	26,237
Note receivable	3,794	3,510
Income taxes receivable	0	261
Other current assets	4,350	4,027
Assets of discontinued operations	462	462
Total current assets	73,117	74,257
Property, plant and equipment - net	9,042	7,035
Deferred income taxes	17,056	17,417
Goodwill	11,051	11,051
Intangible assets - net	11,411	10,966
Other assets	3,861	3,785
Total Assets	125,538	124,511
Current liabilities:
Current portion of long-term debt	189	187
Borrowings of line of credit	1,000	0
Accounts payable	17,460	16,687
Accrued salaries and benefits	5,297	5,470
Accrued expenses	4,492	4,682
Customer deposits and deferred service revenue	17,807	19,814
Total current liabilities	46,245	46,840
Long-term debt	331	379
Other long-term liabilities	7,705	7,712
Total liabilities	54,281	54,931
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; 17,493,293 and 17,479,454 shares issued, 15,785,184 and 15,771,345 outstanding at March 31, 2017 and December 31, 2016, respectively	350	350
Capital in excess of par value	46,392	46,203
Retained earnings	33,804	32,357
Accumulated other comprehensive loss	(3,453)	(3,494)
Treasury stock, at cost, 1,708,109 shares	(5,836)	(5,836)
Total shareholders' equity	71,257	69,580
Total Liabilities and Shareholders' Equity	$ 125,538	$ 124,511

CONSOLIDATED BALANCE SHEETS (U5

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
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)	17,493,293	17,479,454
Common stock, outstanding (in shares)	15,758,184	15,771,345
Treasury stock, at cost (in shares)	1,708,109	1,708,109

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income	$ 1,264	$ 15
Income from discontinued operations	183	0
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation, amortization and accretion	898	777
Provision for bad debts	112	185
Provision for obsolete inventory	958	395
Equity based compensation	177	66
Deferred income tax	361	(69)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(3,932)	(4,627)
Inventories	479	(1,272)
Income tax receivable/(payable)	261	(352)
Other current assets	(323)	226
Other assets	(76)	(93)
Accounts payable	773	3,527
Accrued salaries and benefits	(173)	(442)
Accrued expenses	(190)	205
Customer deposits and deferred service revenue	(2,007)	659
Other long-term liabilities	(7)	(182)
Deferred tax equity based compensation	12	37
Net cash used in operating activities-continuing operations	(1,230)	(945)
Net cash (used in) by operating activities-discontinued operations	0	(161)
Net cash (used in) by operating activities	(1,230)	(1,106)
Cash flows from investing activities:
Capital expenditures	(2,344)	(322)
Capitalization of software costs	(1,006)	(659)
Net cash used in investing activities	(3,350)	(981)
Cash flows from financing activities:
Payments of long-term debt	(46)	(44)
Payments of other borrowings	(5,000)	(53,812)
Proceeds from other borrowings	6,000	53,812
Proceeds from issuance of common stock	0
Repurchase of common stock		(1)
Net cash provided by (used in) financing activities	954	(45)
Effect of exchange rate changes on cash and cash equivalents	41	(122)
Net decrease in cash and cash equivalents	(3,585)	(2,254)
Cash and cash equivalents at beginning of period	9,055	8,024
Cash and equivalents at end of period	5,470	5,770
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	5,470	5,770
Cash paid during the period for:
Interest	6	8
Income taxes, net of refunds	$ 39	$ 420

Basis of presentation

Basis of presentation	3 Months Ended
	Mar. 31, 2017
Basis of presentation [Abstract]
Basis of presentation	Note 1 — Basis of presentation The accompanying unaudited interim consolidated financial statements of PAR Technology Corporation (the “Company” or “PAR”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Regulation S-X pertaining to interim financial statements. Accordingly, they do not include all information and footnotes required by GAAP for annual financial statements. In the opinion of the management, such unaudited interim consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the results for the interim periods included in this Quarterly Report on Form 10-Q (“Quarterly Report”). Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results of operations that may be expected for any future period. Certain amounts for prior periods have been reclassified to conform to the current period classification. The preparation of consolidated financial statements requires management of the Company to make a number of estimates, judgements and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the period. Significant items subject to such estimates, judgements and assumptions include: the carrying amount of property, plant and equipment, identifiable intangible assets and goodwill, equity based compensation, and valuation allowances for receivables, inventories and deferred income taxes. Actual results could differ from those estimates. The unaudited interim consolidated financial statements and related notes should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, which has been filed with the Securities and Exchange Commission (“SEC”).

Divestiture and Discontinued Op

Divestiture and Discontinued Operations	3 Months Ended
	Mar. 31, 2017
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”), for the sale of substantially all of the assets of PSMS. Accordingly, the results of operations of PSMS have been classified as discontinued operations in the Consolidated Statements of Operations (unaudited) and Consolidated Statements of Cash Flows (unaudited) in accordance with Accounting Standards Codification (“ASC”) ASC 205-20 (Presentation of Financial Statements – Discontinued Operations). Additionally, the assets and associated liabilities have been classified as discontinued operations in the Consolidated Balance Sheets (unaudited). 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 such amount to be available for the payment of 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 5, 2017 was approximately $3.8 million and is included in current assets in the Company’s Consolidated Balance Sheets (unaudited). During 2017, the Company increased the receivable by $284,000 based on the terms of the net tangible asset calculation as the working capital shortfall was less 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 the achievement of certain agreed-upon revenue and earnings targets for calendar years 2016 through 2018, as set forth in the APA. As of March 31, 2017, the Company had 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): March 31, December, 31 (in thousands) 2017 2016 Assets Other current assets $ 462 $ 462 Assets of discontinued operation $ 462 $ 462 Liabilities Accrued salaries and benefits $ - $ - Liabilities of discontinued operation $ - $ - Summarized financial information for the Company’s discontinued operations is as follows (in thousands): March 31, (in thousands) 2017 2016 Total revenues $ - $ - Income from discontinued operations before income taxes $ 284 $ - Income taxes (101 ) - Income from discontinued operations, net of taxes $ 183 $ - During the three months ended March 31, 2017, the Company recognized income on discontinued operations of $0.2 million (net of tax) mainly due to an increase of the note receivable. The increase of the note receivable is reflected in the Company’s earnings for 2017 and will be increased by the amount the Company received on May 5, 2017.

Accounts Receivable

Accounts Receivable	3 Months Ended
	Mar. 31, 2017
Accounts Receivable [Abstract]
Accounts Receivable	Note 3 — Accounts Receivable The Company’s net accounts receivable consist of: (in thousands) March 31, 2017 December 31, 2016 Government segment: Billed $ 7,821 $ 6,779 Advanced billings (2,239 ) (1,599 ) 5,582 5,180 Restaurant/Retail segment: Accounts receivable - net 28,659 25,525 $ 34,241 $ 30,705 At March 31, 2017 and December 31, 2016, the Company had recorded allowances for doubtful accounts of $0.9 million and $0.9 million, respectively, against Restaurant/Retail segment accounts receivables.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2017
Inventories [Abstract]
Inventories	Note 4 — Inventories Inventories are primarily used in the manufacture, maintenance and service of Restaurant/Retail products. The components of inventories (net) consist of the following: (in thousands) March 31, 2017 December 31, 2016 Finished goods $ 9,159 $ 9,423 Work in process 1,027 443 Component parts 8,355 10,386 Service parts 6,259 5,985 $ 24,800 $ 26,237 At March 31, 2017 and December 31, 2016, the Company had recorded inventory reserves of $7.0 million and $9.2 million, respectively, against Restaurant/Retail inventories, which relates primarily to service parts.

Identifiable intangible assets

Identifiable intangible assets and Goodwill	3 Months Ended
	Mar. 31, 2017
Identifiable intangible assets and Goodwill [Abstract]
Identifiable intangible assets and Goodwill	Note 5 — Identifiable intangible assets and Goodwill The Company’s identifiable intangible assets represent intangible assets in connection with the Brink Software Inc. acquisition in 2014 and 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 meets its design specifications including functions, features, and technical performance requirements. Software development costs incurred after establishing feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be sold, Leased, or Marketed) and for software sold as a service (“SAAS”), as defined within ASC-350-40 (Intangibles – Goodwill and Other – Internal – Use Software) are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. Software costs capitalized within continuing operations during the three months ended March 31, 2017 and 2016 were $1.0 million and $0.7 million, respectively. Annual amortization, charged to cost of sales when a 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 the product bear to the total of current and anticipated future gross revenues for the product. Amortization of capitalized software costs from continuing operations amounted to $0.3 million for the three months ended March 31, 2017 and 2016. In 2014, the Company acquired identifiable intangible assets in connection with its acquisition of Brink Software Inc. Amortization of intangible assets acquired from the Brink Software Inc. acquisition amounted to $0.2 million for the three months ended March 31, 2017 and 2016. The components of identifiable intangible assets, excluding discontinued operations, are: (in thousands) March 31, 2017 December 31, 2016 Estimated Useful Life Acquired and internally developed software costs $ 15,621 $ 15,884 3 - 7 years Customer relationships 160 160 7 years Non-competition agreements 30 30 1 year 15,811 16,074 Less accumulated amortization (4,800 ) (5,508 ) $ 11,011 $ 10,566 Trademarks, trade names (non-amortizable) 400 400 N/A $ 11,411 $ 10,966 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 $ 1,657 2018 2,054 2019 1,616 2020 1,396 2021 1,031 Thereafter 3,257 Total $ 11,011 The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. The Company operates in two reportable business segments, Restaurant/Retail and Government. Goodwill impairment testing is performed at the segment level. Goodwill is assigned to a specific segment at the date the goodwill is initially recorded. Once goodwill has been assigned to a specific segment, it no longer retains its association with a particular acquisition, and all of the activities within a segment, whether acquired or organically grown, are available to support the value of the goodwill. The amount of goodwill carried by the Restaurant/Retail and Government reporting segments is $10.3 million and $0.7 million, respectively, at March 31, 2017 and December 31, 2016.

Stock Based Compensation

Stock Based Compensation	3 Months Ended
	Mar. 31, 2017
Stock Based Compensation [Abstract]
Stock Based Compensation	Note 6 — Stock Based Compensation The Company applies the fair value recognition provisions of ASC Topic 718 Stock-Based Compensation. The Company recorded stock based compensation of $0.2 million and $0.1 million for the three months ended March 31, 2017 and 2016, respectively. The amount recorded for the three months ended March 31, 2017 and 2016 was recorded net of (expense) benefits of $13,000 and $26,000, respectively, as a result of forfeitures of unvested stock awards prior to the completion of the requisite service period. At March 31, 2017, the aggregate unrecognized compensation expense related to unvested equity awards was $0.4 million (net of estimated forfeitures), which is expected to be recognized as compensation expense in fiscal years 2017 through 2019. For the three month period ended March 31, 2017, the Company recognized compensation expense related to performance awards based on its estimate of the probability of achievement in accordance with ASC Topic 718.

Net Income (loss) per share

Net Income (loss) per share	3 Months Ended
	Mar. 31, 2017
Net Income (loss) per share [Abstract]
Net Income (loss) per share	Note 7 — Net Income (loss) per share Earnings per share are calculated in accordance with ASC Topic 260, which specifies the computation, presentation and disclosure requirements for earnings per share (EPS). It requires the presentation of basic and diluted EPS. Basic EPS excludes all dilution and is based upon the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the three months ended March 31, 2017 there were no anti-dilutive stock options outstanding, and there were 16,000 anti-dilutive stock options outstanding for the three months ended March 31, 2016. The following is a reconciliation of the weighted average of shares outstanding for the basic and diluted EPS computations (in thousands, except share and per share data): For the three months ended March 31, 2017 2016 Income from continuing operations $ 1,264 $ 15 Basic: Shares outstanding at beginning of period 15,771 15,645 Weighted average shares issued during the period, net 10 1 Weighted average common shares, basic 15,781 15,646 Income from continuing operations per common share, basic $ 0.08 $ 0.00 Diluted: Weighted average common shares, basic 15,781 15,646 Dilutive impact of stock options and restricted stock awards 197 77 Weighted average common shares, diluted 15,978 15,723 Income from continuing operations per common share, diluted $ 0.08 $ 0.00

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2017
Contingencies [Abstract]
Contingencies	Note 8 — Contingencies The Company is 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. The Company is investigating whether certain import/export and/or documentation of sales activities at the Company’s China and Singapore offices were improper and in possible violation of the U.S. Foreign Corrupt Practices Act (“FCPA”) and other applicable laws and certain Company policies. The Company voluntarily notified, and is fully cooperating with, the SEC and the U.S. Department of Justice (“DOJ”) of these activities. On May 1, 2017, the Company received a subpoena for documents from the SEC relating to the Company’s investigation. The SEC’s investigation is a non-public, fact-finding inquiry and it is not clear what action, if any, the SEC intends to take with respect to the information it gathers. If the SEC, DOJ, or other governmental agencies (including foreign governmental agencies) determine that violations of certain laws or regulations occurred, the Company could be exposed to a broad range of civil and criminal sanctions. The potential liability arising out of the China and Singapore matters or the SEC investigation cannot currently be reasonably estimated; however, 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	3 Months Ended
	Mar. 31, 2017
Segment and Related Information [Abstract]
Segment and Related Information	Note 9 — Segment and Related Information The Company is organized in two reportable business segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. Management views the Restaurant/Retail and Government segments separately in operating its business, as the products and services are different for each 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. (in thousands) For the three months ended March 31, 2017 2016 Revenues: Restaurant/Retail $ 51,549 $ 33,788 Government 14,316 21,517 Total $ 65,865 $ 55,305 Operating income (loss): Restaurant/Retail $ 2,362 $ (500 ) Government 1,511 1,807 Other (1,632 ) (1,243 ) 2,241 64 Other income, net (248 ) (70 ) Interest (expense) income (32 ) 29 Income before provision for income taxes $ 1,961 $ 23 Depreciation, amortization and accretion: Restaurant/Retail $ 774 $ 732 Government 7 9 Other 117 36 Total $ 898 $ 777 Capital expenditures including software costs: Restaurant/Retail $ 1,075 $ 948 Government - 7 Other 2,274 26 Total $ 3,349 $ 981 Revenues by country: United States $ 61,567 $ 50,219 Other Countries 4,298 5,086 Total $ 65,865 $ 55,305 The following table represents identifiable assets by business segment. Amounts below exclude discontinued operations. (in thousands) March 31, 2017 December 31, 2016 Restaurant/Retail $ 90,024 $ 87,672 Government 7,333 6,504 Other 27,719 29,873 Total $ 125,076 $ 124,049 The following table represents assets by country based on the location of the assets. Amounts below exclude discontinued operations. (in thousands) March 31, 2017 December 31, 2016 United States $ 110,447 $ 110,369 Other Countries 14,629 13,680 Total $ 125,076 $ 124,049 The following table represents Goodwill by business segment. Amounts below exclude discontinued operations. (in thousands) March 31, 2017 December 31, 2016 Restaurant/Retail $ 10,315 $ 10,315 Government 736 736 Total $ 11,051 $ 11,051 Customers comprising 10% or more of the Company's total revenues, excluding discontinued operations, are summarized as follows: For the three months ended March 31, 2017 2016 Restaurant/Retail segment McDonald’s Corporation 44 % 17 % Yum! Brands, Inc. 12 % 12 % Government segment U.S. Department of Defense 22 % 39 % All Others 22 % 32 % 100 % 100 % No other customer within All Others represented more than 10% of the Company’s total revenue for the three months ended March 31, 2017 or 2016.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2017
Fair Value of Financial Instruments [Abstract]
Fair Value of Financial Instruments	Note 10 — 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 March 31, 2017 and December 31, 2016 were considered representative of their fair values. The estimated fair value of the Company’s long-term debt and line of credit at March 31, 2017 and December 31, 2016 was based on variable and fixed interest rates at March 31, 2017 and December 31, 2016, respectively, for new issues with similar remaining maturities and approximates the respective carrying values at March 31, 2017 and December 31, 2016. The deferred compensation assets and liabilities primarily relate to the Company’s deferred compensation plan, which allows for pre-tax salary deferrals for certain key employees. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, as defined under U.S. GAAP, because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company holds insurance investments to partially offset the Company’s liabilities under the Deferred Compensation Plan, which are recorded at fair value each period using the cash surrender value of the insurance investments. The Company has obligations, to be paid in cash, to the former owners of Brink Software Inc., based on the achievement of certain conditions defined in the September 18, 2014 stock purchase agreement governing the Brink Software, Inc. acquisition. The fair value of this contingent consideration payable was estimated using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included the Company’s probability assessments of expected future cash flows related to the Company’s acquisition of Brink Software 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. 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, 2016 $ 4,000 New level 3 liability - Total gains (losses) reported in earnings - Transfers into or out of Level 3 - Balance at March 31, 2017 $ 4,000

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2017
Related Party Transactions [Abstract]
Related Party Transactions	Note 11 — 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 the quarters ended March 31, 2017 and March 31, 2016 the Company received rental income amounting to $29,325 for the lease of the facility in each year. Our director, Paul D. Eurek, is President of Xpanxion LLC. In October 2016, Par Tech, Inc. entered into a statement of work ("SOW") with Xpanxion LLC for software development services. In the quarter ended March 31, 2017 we paid approximately $0.3 million to Xpanxion under the SOW. Mr. Eurek's successor has been announced, and he will be fully retired from Xpanxion on June 30, 2017.

Divestiture and Discontinued 18

Divestiture and Discontinued Operations (Tables)	3 Months Ended
	Mar. 31, 2017
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): March 31, December, 31 (in thousands) 2017 2016 Assets Other current assets $ 462 $ 462 Assets of discontinued operation $ 462 $ 462 Liabilities Accrued salaries and benefits $ - $ - Liabilities of discontinued operation $ - $ - Summarized financial information for the Company’s discontinued operations is as follows (in thousands): March 31, (in thousands) 2017 2016 Total revenues $ - $ - Income from discontinued operations before income taxes $ 284 $ - Income taxes (101 ) - Income from discontinued operations, net of taxes $ 183 $ -

Accounts Receivable (Tables)

Accounts Receivable (Tables)	3 Months Ended
	Mar. 31, 2017
Accounts Receivable [Abstract]
Accounts Receivable, net	The Company’s net accounts receivable consist of: (in thousands) March 31, 2017 December 31, 2016 Government segment: Billed $ 7,821 $ 6,779 Advanced billings (2,239 ) (1,599 ) 5,582 5,180 Restaurant/Retail segment: Accounts receivable - net 28,659 25,525 $ 34,241 $ 30,705

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2017
Inventories [Abstract]
Components of inventory	The components of inventories (net) consist of the following: (in thousands) March 31, 2017 December 31, 2016 Finished goods $ 9,159 $ 9,423 Work in process 1,027 443 Component parts 8,355 10,386 Service parts 6,259 5,985 $ 24,800 $ 26,237

Identifiable intangible asset21

Identifiable intangible assets and Goodwill (Tables)	3 Months Ended
	Mar. 31, 2017
Identifiable intangible assets and Goodwill [Abstract]
Components of identifiable intangible assets	The components of identifiable intangible assets, excluding discontinued operations, are: (in thousands) March 31, 2017 December 31, 2016 Estimated Useful Life Acquired and internally developed software costs $ 15,621 $ 15,884 3 - 7 years Customer relationships 160 160 7 years Non-competition agreements 30 30 1 year 15,811 16,074 Less accumulated amortization (4,800 ) (5,508 ) $ 11,011 $ 10,566 Trademarks, trade names (non-amortizable) 400 400 N/A $ 11,411 $ 10,966
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 $ 1,657 2018 2,054 2019 1,616 2020 1,396 2021 1,031 Thereafter 3,257 Total $ 11,011

Net Income (loss) per share (Ta

Net Income (loss) per share (Tables)	3 Months Ended
	Mar. 31, 2017
Net Income (loss) per share [Abstract]
Reconciliation of the weighted average shares outstanding for the basic and diluted EPS computations	The following is a reconciliation of the weighted average of shares outstanding for the basic and diluted EPS computations (in thousands, except share and per share data): For the three months ended March 31, 2017 2016 Income from continuing operations $ 1,264 $ 15 Basic: Shares outstanding at beginning of period 15,771 15,645 Weighted average shares issued during the period, net 10 1 Weighted average common shares, basic 15,781 15,646 Income from continuing operations per common share, basic $ 0.08 $ 0.00 Diluted: Weighted average common shares, basic 15,781 15,646 Dilutive impact of stock options and restricted stock awards 197 77 Weighted average common shares, diluted 15,978 15,723 Income from continuing operations per common share, diluted $ 0.08 $ 0.00

Segment and Related Informati23

Segment and Related Information (Tables)	3 Months Ended
	Mar. 31, 2017
Segment and Related Information [Abstract]
Information of the Company's segments	Information as to the Company's segments is set forth below. Amounts below exclude discontinued operations. (in thousands) For the three months ended March 31, 2017 2016 Revenues: Restaurant/Retail $ 51,549 $ 33,788 Government 14,316 21,517 Total $ 65,865 $ 55,305 Operating income (loss): Restaurant/Retail $ 2,362 $ (500 ) Government 1,511 1,807 Other (1,632 ) (1,243 ) 2,241 64 Other income, net (248 ) (70 ) Interest (expense) income (32 ) 29 Income before provision for income taxes $ 1,961 $ 23 Depreciation, amortization and accretion: Restaurant/Retail $ 774 $ 732 Government 7 9 Other 117 36 Total $ 898 $ 777 Capital expenditures including software costs: Restaurant/Retail $ 1,075 $ 948 Government - 7 Other 2,274 26 Total $ 3,349 $ 981 Revenues by country: United States $ 61,567 $ 50,219 Other Countries 4,298 5,086 Total $ 65,865 $ 55,305
Identifiable assets by business segment	The following table represents identifiable assets by business segment. Amounts below exclude discontinued operations. (in thousands) March 31, 2017 December 31, 2016 Restaurant/Retail $ 90,024 $ 87,672 Government 7,333 6,504 Other 27,719 29,873 Total $ 125,076 $ 124,049
Identifiable assets by geographic area	The following table represents assets by country based on the location of the assets. Amounts below exclude discontinued operations. (in thousands) March 31, 2017 December 31, 2016 United States $ 110,447 $ 110,369 Other Countries 14,629 13,680 Total $ 125,076 $ 124,049
Goodwill by business segment	The following table represents Goodwill by business segment. Amounts below exclude discontinued operations. (in thousands) March 31, 2017 December 31, 2016 Restaurant/Retail $ 10,315 $ 10,315 Government 736 736 Total $ 11,051 $ 11,051
Revenue percentage by customer/segment	Customers comprising 10% or more of the Company's total revenues, excluding discontinued operations, are summarized as follows: For the three months ended March 31, 2017 2016 Restaurant/Retail segment McDonald’s Corporation 44 % 17 % Yum! Brands, Inc. 12 % 12 % Government segment U.S. Department of Defense 22 % 39 % All Others 22 % 32 % 100 % 100 %

Fair Value of Financial Instr24

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2017
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, 2016 $ 4,000 New level 3 liability - Total gains (losses) reported in earnings - Transfers into or out of Level 3 - Balance at March 31, 2017 $ 4,000

Divestiture and Discontinued 25

Divestiture and Discontinued Operations (Details) - USD ($) $ in Thousands	Nov. 04, 2015	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Summary of Results of Discontinued Operations [Abstract]
Income from discontinued operations, net of taxes		$ 183	$ 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
Consideration receivable period from closing date	18 months
Estimated fair value of the notes receivable		3,800
Increase in receivables based on net tangible asset		284,000
Consideration payable upon achievement of targets	$ 1,500
Assets [Abstract]
Other current assets		462		$ 462
Assets of discontinued operation		462		462
Liabilities [Abstract]
Accrued salaries and benefits		0		0
Liabilities of discontinued operation		0		$ 0
Summary of Results of Discontinued Operations [Abstract]
Total revenues		0	0
Income from discontinued operations before income taxes		284	0
Income taxes		(101)	0
Income from discontinued operations, net of taxes		$ 183	$ 0

Accounts Receivable (Details)

Accounts Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts Receivable [Abstract]
Accounts receivable - net	$ 34,241	$ 30,705
Government Segment [Member]
Accounts Receivable [Abstract]
Accounts receivable - net	5,582	5,180
Government Segment [Member] | Billed [Member]
Accounts Receivable [Abstract]
Accounts receivable - net	7,821	6,779
Government Segment [Member] | Advance Billings [Member]
Accounts Receivable [Abstract]
Accounts receivable - net	(2,239)	(1,599)
Restaurant/Retail Segment [Member]
Accounts Receivable [Abstract]
Accounts receivable - net	28,659	25,525
Allowances for doubtful accounts	$ 900	$ 900

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Component of inventory use in Restaurant/Retail products [Abstract]
Finished goods	$ 9,159	$ 9,423
Work in process	1,027	443
Component parts	8,355	10,386
Service parts	6,259	5,985
Inventory net	24,800	26,237
Inventory reserves	$ 7,000	$ 9,200

Identifiable intangible asset28

Identifiable intangible assets and Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)SegmentUnit	Mar. 31, 2016USD ($)	Dec. 31, 2016USD ($)
Finite-Lived Intangible Assets [Line Items]
Software costs capitalized	$ 1,000	$ 700
Amortization of capitalized software costs	300	300
Amortization of identifiable intangible assets	$ 241	$ 241
Number of operating segments | Segment	2
Number of reporting units | Unit	2
Goodwill	$ 11,051		$ 11,051
Components of identifiable intangible assets [Abstract]
Intangible assets - gross	15,811		16,074
Less accumulated amortization	(4,800)		(5,508)
Total	11,011		10,566
Total intangible assets, net	11,411		10,966
Future amortization of intangible assets assuming straight-line amortization of capitalized software costs [Abstract]
2,017	1,657
2,018	2,054
2,019	1,616
2,020	1,396
2,021	1,031
Thereafter	3,257
Total	$ 11,011		10,566
Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years
Acquired and Internally Developed Software Costs [Member]
Components of identifiable intangible assets [Abstract]
Intangible assets - gross	$ 15,621		15,884
Acquired and Internally Developed Software Costs [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Acquired and Internally Developed Software Costs [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years
Components of identifiable intangible assets [Abstract]
Intangible assets - gross	$ 160		160
Non-competition Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	1 year
Components of identifiable intangible assets [Abstract]
Intangible assets - gross	$ 30		30
Restaurant/Retail [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	10,300		10,300
Government [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	700		700
Trademarks, Trade Names [Member]
Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived non-amortizable intangible assets	$ 400		$ 400

Stock Based Compensation (Detai

Stock Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Stock Based Compensation [Abstract]
Total stock-based compensation expense	$ 177	$ 66
Stock-based compensation (expense), tax benefit	13	$ 26
Unrecognized compensation expense	$ 400

Net Income (loss) per share (De

Net Income (loss) per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Reconciliation of the weighted average shares outstanding for the basic and diluted EPS computations [Abstract]
Income from continuing operations	$ 1,264	$ 15
Basic [Abstract]
Shares outstanding at beginning of period (in shares)	15,771,000	15,645,000
Weighted average shares issued during the period, net (in shares)	10,000	1,000
Weighted average common shares, basic (in shares)	15,781,000	15,646,000
Income from continuing operations per common share, basic (in dollars per share)	$ 0.08	$ 0
Diluted [Abstract]
Weighted average common shares, basic (in shares)	15,781,000	15,646,000
Dilutive impact of stock options and restricted stock awards (in shares)	197,000	77,000
Weighted average common shares, diluted (in shares)	15,978,000	15,723,000
Income from continuing operations per common share, diluted (in dollars per share)	$ 0.08	$ 0
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive stock options outstanding (in shares)	0	16,000

Segment and Related Informati31

Segment and Related Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)SegmentUnith	Mar. 31, 2016USD ($)
Segment and Related Information [Abstract]
Number of reporting units | Unit	2
Number of reportable segments | Segment	2
Number of hours of telephone support for restaurant and retail segment | h	24
Information as to the Company's segments [Abstract]
Revenues	$ 65,865	$ 55,305
Operating income (loss)	2,241	64
Other income, net	(248)	(70)
Interest (expense) income	(32)	29
Income from continuing operations before provision for income taxes	1,961	23
Depreciation, amortization and accretion	898	777
Capital expenditures including software costs	3,349	981
Other [Member]
Information as to the Company's segments [Abstract]
Operating income (loss)	(1,632)	(1,243)
Depreciation, amortization and accretion	117	36
Capital expenditures including software costs	2,274	26
Reportable Segments [Member] | Restaurant/Retail [Member]
Information as to the Company's segments [Abstract]
Revenues	51,549	33,788
Operating income (loss)	2,362	(500)
Depreciation, amortization and accretion	774	732
Capital expenditures including software costs	1,075	948
Reportable Segments [Member] | Government [Member]
Information as to the Company's segments [Abstract]
Revenues	14,316	21,517
Operating income (loss)	1,511	1,807
Depreciation, amortization and accretion	7	9
Capital expenditures including software costs	0	7
Reportable Geographical Components [Member] | United States [Member]
Information as to the Company's segments [Abstract]
Revenues	61,567	50,219
Reportable Geographical Components [Member] | Other Countries [Member]
Information as to the Company's segments [Abstract]
Revenues	$ 4,298	$ 5,086

Segment and Related Informati32

Segment and Related Information, Reconciliation of Segment Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Identifiable assets by geographic area [Abstract]
Identifiable assets	$ 125,076	$ 124,049
Goodwill by business segment [Abstract]
Goodwill	11,051	11,051
Restaurant/Retail [Member]
Goodwill by business segment [Abstract]
Goodwill	10,300	10,300
Government [Member]
Goodwill by business segment [Abstract]
Goodwill	700	700
Other [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	27,719	29,873
Reportable Segments [Member] | Restaurant/Retail [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	90,024	87,672
Goodwill by business segment [Abstract]
Goodwill	10,315	10,315
Reportable Segments [Member] | Government [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	7,333	6,504
Goodwill by business segment [Abstract]
Goodwill	736	736
Reportable Geographical Components [Member] | United States [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	110,447	110,369
Reportable Geographical Components [Member] | Other Countries [Member]
Identifiable assets by geographic area [Abstract]
Identifiable assets	$ 14,629	$ 13,680

Segment and Related Informati33

Segment and Related Information, Revenue By Major Customer (Details)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	100.00%	100.00%
All Others [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	22.00%	32.00%
Reportable Segments [Member] | Restaurant/Retail Segment [Member] | McDonald's Corporation [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	44.00%	17.00%
Reportable Segments [Member] | Restaurant/Retail Segment [Member] | Yum! Brands, Inc. [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	12.00%	12.00%
Reportable Segments [Member] | Government Segment [Member] | U.S. Department of Defense [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue generated by customer	22.00%	39.00%

Fair Value of Financial Instr34

Fair Value of Financial Instruments (Details) - Contingent Consideration Liability [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of period	$ 4,000
New level 3 liability	0
Total gains (losses) reported in earnings	0
Transfers into or out of Level 3	0
Balance at end of period	$ 4,000

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Xpansion LLC [Member]
Related Party Transaction [Line Items]
Software development costs	$ 300,000
Wellness Facility Related Party [Member]
Related Party Transaction [Line Items]
Monthly rental income from related parties	9,775
Rental income received	$ 29,325	$ 29,325