UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2009. Commission File Number 1-9720
OR
[ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From __________ to __________
Commission File Number __________
PAR TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 16-1434688
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413-4991
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (315) 738-0600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically
and posted on its Corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer" and "accelerated filer" and
"smaller reporting company" in Rule 12b-2 of the Exchange Act. Large Accelerated
Filer [ ] Accelerated Filer [X] Non-Accelerated Filer [ ] (Do not check if a
smaller reporting company) Smaller Reporting Company [ ]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
The number of shares outstanding of registrant's common stock, as of as of
July 31, 2009 - 14,605,440 shares.
PAR TECHNOLOGY CORPORATION
TABLE OF CONTENTS
FORM 10-Q
PART I
FINANCIAL INFORMATION
Item Number
Item 1. Financial Statements (unaudited)
- Consolidated Statements of Operations for
the three and six months ended June 30, 2009 and 2008
- Consolidated Statements of Comprehensive Income (Loss) for
the three and six months ended June 30, 2009 and 2008
- Consolidated Balance Sheets at
June 30, 2009 and December 31, 2008
- Consolidated Statements of Cash Flows
for the six months ended June 30, 2009 and 2008
- Notes to Unaudited Interim Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
PART II
OTHER INFORMATION
Item 1A. Risk Factors
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
Signatures
Exhibit Index
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
For the three months For the six months
ended June 30, ended June 30,
-------------------------------- --------------------------
2009 2008 2009 2008
------------- ------------- ------------ ---------
Net revenues:
Product $ 17,178 $ 20,751 $ 37,415 $ 37,648
Service 19,065 17,729 39,046 34,144
Contract 18,216 18,754 38,466 37,549
----------- ---------- ---------- ---------
54,459 57,234 114,927 109,341
----------- ---------- ---------- ---------
Costs of sales:
Product 11,485 12,612 24,553 22,037
Service 13,385 12,877 27,862 25,360
Contract 17,227 17,713 36,463 35,553
----------- ---------- ---------- ---------
42,097 43,202 88,878 82,950
----------- ---------- ---------- ---------
Gross margin 12,362 14,032 26,049 26,391
----------- ---------- ---------- ---------
Operating expenses:
Selling, general and administrative 8,647 8,742 18,242 17,803
Research and development 3,048 3,890 6,357 8,011
Amortization of identifiable intangible assets 368 389 733 779
----------- ---------- ---------- ---------
12,063 13,021 25,332 26,593
----------- ---------- ---------- ---------
Operating income (loss) 299 1,011 717 (202)
Other income, net 156 229 263 543
Interest expense (82) (121) (222) (470)
----------- ---------- ---------- ---------
Income (loss) before provision for income taxes 373 1,119 758 (129)
(Provision) benefit for income taxes (135) (445) (273) 58
----------- ---------- ---------- ---------
Net income (loss) $ 238 $ 674 $ 485 $ (71)
=========== ========== ========== =========
Earnings (loss) per share
Basic $ .02 $ .05 $ .03 $ (.00)
Diluted $ .02 $ .05 $ .03 $ (.00)
Weighted average shares outstanding
Basic 14,501 14,394 14,487 14,386
=========== ========== ========== =========
Diluted 14,787 14,798 14,757 14,386
=========== ========== ========== =========
See notes to unaudited interim consolidated financial statements
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
For the three months For the six months
ended June 30, ended June 30,
-------------------------------- --------------------------
2009 2008 2009 2008
------------- ------------- ------------ ---------
Net income (loss) $ 238 $ 674 $ 485 $ (71)
Other comprehensive income, net of tax:
Foreign currency translation adjustments 468 140 190 36
----------- ---------- ---------- ---------
Comprehensive income (loss) $ 706 $ 814 $ 675 $ (35)
=========== ========== =========== =========
See notes to unaudited interim consolidated financial statements
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)
June 30, December 31,
2009 2008
---------- -----------
Assets
Current assets:
Cash and cash equivalents ....................... $ 8,103 $ 6,227
Accounts receivable-net ......................... 38,310 53,582
Inventories-net ................................. 41,875 41,132
Income tax refunds .............................. 240 208
Deferred income taxes ........................... 5,273 5,301
Other current assets ............................ 2,659 3,588
--------- ---------
Total current assets ........................ 96,460 110,038
Property, plant and equipment - net .................. 6,737 6,879
Deferred income taxes ................................ 989 1,525
Goodwill ............................................. 26,005 25,684
Intangible assets - net .............................. 7,604 8,251
Other assets ......................................... 1,583 1,611
--------- ---------
Total Assets .............................. $ 139,378 $ 153,988
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt ............... $ 2,830 $ 1,079
Borrowings under lines of credit ................ 5,500 8,800
Accounts payable ................................ 10,759 15,293
Accrued salaries and benefits ................... 7,938 8,360
Accrued expenses ................................ 2,752 3,962
Customer deposits ............................... 2,276 6,157
Deferred service revenue ........................ 14,363 16,318
--------- ---------
Total current liabilities ................... 46,418 59,969
--------- ---------
Long-term debt ....................................... 3,600 5,852
--------- ---------
Other long-term liabilities .......................... 1,867 1,910
--------- ---------
Shareholders' Equity:
Preferred stock, $.02 par value,
1,000,000 shares authorized ................... -- --
Common stock, $.02 par value,
29,000,000 shares authorized;
16,258,195 and 16,189,718 shares issued;
14,605,440 and 14,536,963 outstanding ........ 325 324
Capital in excess of par value .................. 40,733 40,173
Retained earnings ............................... 53,153 52,668
Accumulated other comprehensive loss ............ (1,209) (1,399)
Treasury stock, at cost, 1,652,755 shares ....... (5,509) (5,509)
--------- ---------
Total shareholders' equity .................. 87,493 86,257
--------- ---------
Total Liabilities and Shareholders' Equity $ 139,378 $ 153,988
========= =========
See notes to unaudited interim consolidated financial statements
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the six months ended June 30,
---------------------------------
2009 2008
------------ ---------
Cash flows from operating activities:
Net income (loss) ........................................................ $ 485 $ (71)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization ....................................... 2,073 2,045
Provision for bad debts ............................................. 916 48
Provision for obsolete inventory .................................... 1,037 731
Equity based compensation ........................................... 371 164
Deferred income tax ................................................. 254 692
Changes in operating assets and liabilities:
Accounts receivable ............................................. 14,356 (2,008)
Inventories ..................................................... (1,780) (1,220)
Income tax refunds .............................................. (32) (831)
Other current assets ............................................ 929 (84)
Other assets .................................................... 28 21
Accounts payable ................................................ (4,534) (5,232)
Accrued salaries and benefits ................................... (422) (633)
Accrued expenses ................................................ (1,156) (463)
Customer deposits ............................................... (3,881) 191
Deferred service revenue ........................................ (1,955) (97)
Other long-term liabilities ..................................... (43) 4
-------- --------
Net cash provided by (used in) operating activities ........... 6,646 (6,743)
-------- --------
Cash flows from investing activities:
Capital expenditures ..................................................... (769) (695)
Capitalization of software costs ......................................... (464) (487)
Contingent purchase price paid on prior year acquisitions ................ (54) (156)
Cash received from voluntary conversion of long-lived other assets ....... -- 1,571
-------- --------
Net cash provided by (used in) investing activities .......... (1,287) 233
-------- --------
Cash flows from financing activities:
Net borrowings (repayments) under line-of-credit agreements .............. (3,300) 5,362
Payments of long-term debt ............................................... (501) (357)
Proceeds from the exercise of stock options .............................. 190 195
-------- --------
Net cash provided by (used in) financing activities ........... (3,611) 5,200
-------- --------
Effect of exchange rate changes on cash and cash equivalents ................. 128 236
-------- --------
Net increase/(decrease) in cash and cash equivalents ......................... 1,876 (1,074)
Cash and cash equivalents at beginning of period ............................. 6,227 4,431
-------- --------
Cash and cash equivalents at end of period ................................... $ 8,103 $ 3,357
======== ========
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest $ 316 $ 451
Income taxes, net of refunds 201 (1)
See notes to unaudited interim consolidated financial statements
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited interim consolidated financial statements have
been prepared by PAR Technology Corporation (the "Company" or "PAR") in
accordance with U.S. generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-Q and Regulation
S-X pertaining to interim financial statements. Accordingly, these interim
financial statements do not include all information and footnotes required
by U.S. generally accepted accounting principles for complete financial
statements. In the opinion of the Company, such unaudited statements
include all adjustments (which comprise only normal recurring accruals)
necessary for a fair presentation of the results for such periods. The
results of operations for the three and six months ended June 30, 2009 are
not necessarily indicative of the results of operations to be expected for
any future period. The consolidated financial statements and notes thereto
should be read in conjunction with the audited consolidated financial
statements and notes for the year ended December 31, 2008 included in the
Company's December 31, 2008 Annual Report to the Securities and Exchange
Commission on Form 10-K.
The preparation of consolidated financial statements requires management of
the Company to make a number of estimates and assumptions relating to the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the period.
Significant items subject to such estimates and assumptions include: the
carrying amount of property, plant and equipment, identifiable intangible
assets and goodwill, equity based compensation, and valuation allowances
for receivables, inventories and deferred income taxes. Actual results
could differ from those estimates.
The economic conditions in late 2008 and year-to-date 2009 and the
volatility in the financial markets in late 2008 and 2009, both in the U.S.
and in many other countries where the Company operates, have contributed
and may continue to contribute to higher unemployment levels, decreased
consumer spending, reduced credit availability and/or declining business
and consumer confidence. Such conditions could have an impact on the
markets in which the Company's customers operate, which could result in a
reduction of sales, operating income and cash flows and could have a
material adverse impact on the Company's significant estimates discussed
above, specifically the fair value of the Company's reporting units used in
support of its annual goodwill impairment test.
In accordance with Financial Accounting Standards Board Statement No. 165,
"Subsequent Events," the Company has evaluated subsequent events for
recognition or disclosure in the financial statements through the date of
issuance, August 10, 2009.
Certain amounts for prior periods have been reclassified to conform to the
current period classification.
2. Inventories are primarily used in the manufacture and service of
Hospitality products. The components of inventory, net of related reserves,
consist of the following:
(in thousands)
June 30, December 31,
2009 2008
-------- --------
Finished goods ....... $ 9,527 $ 7,761
Work in process ...... 1,519 1,425
Component parts ...... 11,801 13,661
Service parts ........ 19,028 18,285
------- -------
$41,875 $41,132
======= =======
At June 30, 2009 and December 31, 2008, the Company had recorded reserves
for shrinkage, excess and obsolete inventory of $3,132,000 and $3,267,000,
respectively.
3. The Company applies the fair value recognition provisions of Statement of
Financial Accounting Standards (SFAS) No. 123R Share-Based Payment (SFAS
123R). This standard requires the Company to measure the cost of employee
services received in exchange for equity awards based on the grant date
fair value of the awards. The cost is recognized as compensation expense
over the vesting period of the awards. Total compensation expense included
in operating expenses for the three and six months ended June 30, 2009 was
$103,000 and $371,000, respectively. Total compensation expense included in
operating expenses for the three and six months ended June 30 2008 was
$60,000 and $164,000, respectively. At June 30, 2009, the unrecognized
compensation expense related to non-vested option awards was $765,000 (net
of estimated forfeitures) which is expected to be recognized as
compensation expense in fiscal years 2009 through 2014.
4. Earnings per share is calculated in accordance with Statement of Financial
Accounting Standards No. 128, Earnings per Share, 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.
The following is a reconciliation of the weighted average shares
outstanding for the basic and diluted EPS computations (in thousands,
except per share data):
For the three months ended June 30,
-----------------------------------
2009 2008
------------ ------------
Net income .......................................... $ 238 $ 674
============ ============
Basic:
Shares outstanding at beginning of period ...... 14,474 14,382
Weighted average shares issued during the period 27 12
------------ ------------
Weighted average common shares, basic .......... 14,501 14,394
============ ============
Earnings per common share, basic ............... $ .02 $ .05
============ ============
Diluted:
Weighted average common shares, basic .......... 14,501 14,394
Weighted average shares issued during the period 26 11
Dilutive impact of stock options and
restricted stock awards ...................... 260 393
------------ ------------
Weighted average common shares, diluted ........ 14,787 14,798
============ ============
Earnings per common share, diluted ............. $ .02 $ .05
============ ============
For the six months ended June 30,
---------------------------------
2009 2008
------------ ------------
Net income (loss) ................................... $ 485 $ (71)
============ ============
Basic:
Shares outstanding at beginning of period ...... 14,471 14,372
Weighted average shares issued during the period 16 14
------------ ------------
Weighted average common shares, basic .......... 14,487 14,386
============ ============
Earnings (loss) per common share, basic ........ $ .03 $ (.00)
============ ============
Diluted:
Weighted average common shares, basic .......... 14,487 14,386
Weighted average shares issued during the period 14 --
Dilutive impact of stock options and
restricted stock awards ...................... 256 --
------------ ------------
Weighted average common shares, diluted ........ 14,757 14,386
============ ============
Earnings (loss) per common share, diluted ...... $ .03 $ (.00)
============ ============
5. In September 2006, the Financial Accounting Standards Board (FASB) issued
Financial Accounting Standard FAS No. 157, "Fair Value Measurements". In
February 2008, the FASB issued FASB Staff Position 157-2, "Effective Date
of FASB Statement No. 157," which provides a one year deferral of the
effective date of FAS 157 for non-financial assets and liabilities (such as
goodwill), except those that are recognized or disclosed in the Company's
financial statements at fair value at least annually. Accordingly, the
Company adopted the provisions of FAS 157 only for its financial assets and
liabilities effective January 1, 2008, and adopted the provisions of FAS
157 for its non-financial assets and liabilities as of January 1, 2009. FAS
157 defines fair value as the exchange price that would be received for an
asset or paid for a liability in the principal or most advantageous market
for the asset or liability, in an orderly transaction between market
participants. FAS 157 describes a fair value hierarchy 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 adoption of the provisions of FAS 157 (at both January 1, 2008 and
2009) did not have a significant impact on the Company's consolidated
results of operations or financial condition.
The Company's interest rate swap agreement is valued at the amount the
Company would have expected to pay to terminate the agreement. The fair
value determination was based upon the present value of expected future
cash flows using the LIBOR rate, plus an applicable interest rate spread, a
technique classified within Level 2 of the valuation hierarchy described
above. At June 30, 2009, the fair value of the Company's interest rate swap
included a realized loss of $301,000, and is included as a component of
accrued expenses within the consolidated balance sheet. The associated fair
value adjustments for the three and six months ended June 30, 2009,
respectively, are: $65,800 and $87,600 which are included as decreases to
interest expense. The associated fair value adjustments for the three and
six months ended June 30, 2008 , respectively, are: $148,000, included as a
decrease to interest expense; and $17,000, included as an increase to
interest expense.
6. The Company's reportable segments are strategic business units that have
separate management teams and infrastructures that offer different products
and services.
The Company has two reportable segments, Hospitality and Government. The
Hospitality segment offers integrated solutions to the hospitality
industry. These offerings include industry leading hardware and software
applications utilized in point-of-sale, back of store and corporate office
applications as well as in the hotel/resort/spa marketplace. This segment
also offers customer support including field service, installation,
twenty-four hour telephone support and depot repair. The Government segment
provides technical expertise in the development of advanced technology
prototype systems primarily for the Department of Defense and other
Governmental agencies. It provides services for operating and maintaining
certain U.S. Government-owned communication and test sites, and for
planning, executing and evaluating experiments involving new or advanced
radar systems. Intersegment sales and transfers are not significant.
Information as to the Company's segments is set forth below:
(in thousands)
For the three months For the six months
ended June 30, ended June 30,
------------------------------- --------------------------------
2009 2008 2009 2008
------------------------------- --------------------------------
Net revenues:
Hospitality $ 34,587 $ 38,480 $ 72,389 $ 71,792
Government 18,216 18,754 38,466 37,549
Other 1,656 - 4,072 -
------------- ------------ ----------- ------------
Total $ 54,459 $ 57,234 $ 114,927 $ 109,341
============= ============ =========== ============
Operating income (loss):
Hospitality $ (580) $ 58 $ (976) $ (1,981)
Government 938 943 1,876 1,873
Other (59) 10 (183) (94)
------------- ------------ ------------ ------------
299 1,011 717 (202)
Other income, net 156 229 263 543
Interest expense (82) (121) (222) (470)
------------- ----------- ------------ ------------
Income (loss) before provision
for income taxes $ 373 $ 1,119 $ 758 $ (129)
============= ============ ============ ============
Depreciation and amortization:
Hospitality $ 887 $ 900 $ 1,839 $ 1,807
Government 21 22 41 49
Other 120 94 193 189
------------- ------------ ------------ ------------
Total $ 1,028 $ 1,016 $ 2,073 $ 2,045
============= ============ ============ ============
Capital expenditures:
Hospitality $ 323 $ 441 $ 509 $ 543
Government -- -- 31 35
Other 152 76 229 117
------------- ------------ ------------ ------------
Total $ 475 $ 517 $ 769 $ 695
============= ============ ============ ============
Revenues by geographic area:
United States $ 48,759 $ 50,141 $ 103,612 $ 96,089
Other Countries 5,700 7,093 11,315 13,252
------------- ------------ ------------ ------------
Total $ 54,459 $ 57,234 $ 114,927 $ 109,341
============= ============ ============ ============
The following table represents identifiable assets by business segment:
(in thousands)
June 30, December 31,
2009 2008
--------- --------
Identifiable assets:
Hospitality ......... $118,772 $127,678
Government .......... 10,774 13,532
Other ............... 9,832 12,778
-------- --------
Total ................... $139,378 $153,988
======== ========
The following table presents identifiable assets by geographic area based
on the location of the asset:
(in thousands)
June 30, December 31,
2009 2008
----------- -----------
United States $ 122,917 $ 142,461
Other Countries 16,461 11,527
---------- ----------
Total $ 139,378 $ 153,988
========== ==========
The following table represents Goodwill by business segment:
(in thousands)
June 30, December 31,
2009 2008
----------- -----------
Hospitality $ 25,302 $ 24,981
Government 703 703
---------- ----------
Total $ 26,005 $ 25,684
========== ==========
Customers comprising 10% or more of the Company's total revenues are
summarized as follows:
For the three months For the six months
ended June 30, ended June 30,
------------------ ---------------------
2009 2008 2009 2008
------- -------- ------- -------
Restaurant Segment:
McDonald's Corporation 29% 23% 27% 21%
YUM! Brands, Inc. 12% 16% 11% 14%
Government Segment:
Department of Defense 33% 33% 34% 34%
All Others 26% 28% 28% 31%
------- ------- ------- -------
100% 100% 100% 100%
======= ======= ======= =======
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward-Looking Statement
This document contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934. Any statements in this document that do not
describe historical facts are forward-looking statements. Forward-looking
statements in this document (including forward-looking statements regarding the
continued health of the Hospitality industry, future information technology
outsourcing opportunities, an expected increase in contract funding by the U.S.
Government, the impact of current world events on our results of operations, the
effects of inflation on our margins, and the effects of interest rate and
foreign currency fluctuations on our results of operations) are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. When we use words such as "intend," "anticipate," "believe," "estimate,"
"plan," "will," or "expect", we are making forward-looking statements. We
believe that the assumptions and expectations reflected in such forward-looking
statements are reasonable, based on information available to us on the date
hereof, but we cannot assure you that these assumptions and expectations will
prove to have been correct or that we will take any action that we presently may
be planning. We have disclosed certain important factors that could cause our
actual future results to differ materially from our current expectations,
including a decline in the volume of purchases made by one or a group of our
major customers; risks in technology development and commercialization; risks of
downturns in economic conditions generally, and in the quick-service sector of
the hospitality market specifically; risks associated with government contracts;
risks associated with competition and competitive pricing pressures; and risks
related to foreign operations. Forward-looking statements made in connection
with this report are necessarily qualified by these factors. We are not
undertaking to update or revise publicly any forward-looking statements if we
obtain new information or upon the occurrence of future events or otherwise.
Overview
PAR Technology is a leading provider of hospitality technology solutions
including software, hardware and professional/lifecycle support services to
several industries including: restaurants, hotels/resorts/spas, cruise lines,
movie theaters and specialty retailers. In addition, the Company provides the
Federal Government, and its agencies, applied technology and technical
outsourcing services primarily with the Department of Defense. PAR also provides
best of breed tracking systems that focus upon cold chain technologies for road
rail, and shipping markets by providing advanced integrated solutions for all
types of refrigerated and dry assets.
The Company's hospitality technology products are used in a variety of
applications by thousands of customers. PAR faces competition in all of its
markets (restaurants, hotels, spas, etc.) and competes primarily on the basis of
product design/features/functions, product quality/reliability, price, customer
service, and deployment capability. The most recent trend in the hospitality
industry has been to reduce the number of approved vendors in a specific concept
to companies that have global capabilities and reach in sales, service and
installations, can achieve quality and delivery standards, have multiple product
offerings, R&D capability, and can be competitive with their pricing. The
Company's international scope as a technology provider to hospitality customers
is a strategic competitive advantage as the Company can provide innovative
solutions, with significant global reach, to its multinational customers like
McDonald's, Yum! Brands, Subway, CKE Restaurants and the Mandarin Oriental Hotel
Group. PAR's focus is to provide totally integrated technology products and
services with industry leading customer service in the market segments in which
it competes. The Company continually initiates new research and development
efforts to create innovative technology that meets and exceeds our customers'
requirements and also has high probability for broader market appeal and
success. PAR's business focuses upon operating efficiencies and controlling
costs. This is achieved through investment in modern production technologies,
and by managing purchasing processes and functions.
The Company is currently focusing upon enhancing three distinct areas of
its Hospitality segment. First, PAR has been investing in its development of
next generation software. Second, the Company is building a highly capable and
further reaching distribution channel. Third, as the Company's customers
continue their expansion into international markets, PAR is creating a global
infrastructure, initially focusing on the Asia/Pacific rim due to the new
restaurant growth and concentration of PAR's customers in that region, but also
one that will enhance our deployment and support internationally.
Approximately 34% of the Company's revenues are generated in our Government
segment. PAR provides IT and communications support services to the U.S.
Department of Defense. The Company also offers its services to several
non-military U.S. federal, state and local agencies by providing applied
technology including radar, image and signal processing and geospatial services
and products. PAR's Government performance rating translates into the Company
consistently winning add-on and renewal business, and building long-term
client-vendor relationships. PAR can provide its clients the technical expertise
necessary to operate and maintain complex technology systems utilized by
government agencies.
PAR's logistics management business continues to realize a positive trend
in its results. This past quarter the Company announced a large new customer in
KLLM Transport Services. PAR continues to anticipate more acceleration in this
business as they expand the customer base. As the market realizes the value
proposition associated with the real time use of location and environmental
information in both asset management and cargo quality assurance, PAR is well
positioned in this emerging market.
The Company will continue to leverage its core technical capabilities and
performance into related technical areas and an expanding customer base. PAR
will seek to accelerate this growth through strategic acquisitions of businesses
that broaden the Company's technology and/or business base.
Summary
PAR believes it can continue to be successful in its two core business
segments -Hospitality and Government - due to its global capabilities and
industry expertise. The majority of the Company's business is in the quick-serve
restaurant sector of the hospitality market. In regards to the current economic
downturn, PAR believes that this sector will be less impacted by the current
slowdown in consumer spending trends than other hospitality sectors. This is a
direct correlation to the value and convenience PAR's large quick-service
customers can and do provide.
It has been the Company's experience that their Government business is
resistant to economic cycles including reductions in the Federal defense
budgets. PAR's I/T outsourcing business focuses on cost-effective operations of
technology and telecommunication facilities which must function independent of
economic cycles and changing Federal defense budgets.
Results of Operations -- Three Months Ended June 30, 2009 Compared to Three
Months Ended June 30, 2008
The Company reported revenues of $54.5 million for the quarter ended June
30, 2009, a decrease of 4.8% from the $57.2 million reported for the quarter
ended June 30, 2008. The Company's net income for the quarter ended June 30,
2009 was $238,000, or $.02 diluted earnings per share, compared to net income of
$674,000 and a $.05 diluted earnings per share for the same period in 2008.
Product revenues were $17.2 million for the quarter ended June 30, 2009, a
decrease of 17% from the $20.8 million recorded in 2008. This decrease was due
to a reduction in sales to certain restaurant concepts as new store rollouts
that occurred in 2008 did not recur in 2009. In addition, sales in the Company's
luxury hotel, resort and spa software business experienced a decline during the
current quarter. These decreases were partially offset by an increase in sales
to McDonald's, as well as an increase in sales of the Company's logistics
management products to several commercial customers.
Customer service revenues include installation, software maintenance,
training, twenty-four hour help desk support and various depot and on-site
service options. Customer service revenues were $19.1 million for the quarter
ended June 30, 2009, a 7.5% increase from $17.7 million reported for the same
period in 2008. This increase is primarily due to a major service initiative
with a large restaurant customer. Also contributing to this growth was an
increase in revenue associated with the Company's depot service center as well
as service revenue associated with the Company's logistic management business.
Contract revenues were $18.2 million for the quarter ended June 30, 2009, a
decrease of 2.9% when compared to the $18.8 million for the same period in 2008.
This decrease was primarily due to timing; more specifically the completion of
various contracts prior to the beginning of their replacement contracts.
Product margins for the quarter ended June 30, 2009 were 33.1%, a decline
of 610 basis points from the 39.2% for the same period in 2008. This decrease in
margins was mostly due to a shift in product mix as hardware sales increased
while software revenue decreased in 2009 when compared to 2008. The lower
software revenue was attributable to a drop in table service revenue as the
Company fulfilled the requirements of a major customer in 2008.
Customer service margins were 29.8% for the quarter ended June 30, 2009, an
increase of 240 basis points compared to 27.4% for the same period in 2008.
Service margins increased primarily due to higher installation revenue from a
special initiative with a major restaurant customer as well as higher volume
within the depot service center.
Contract margins were 5.4% for the quarter ended June 30, 2009, a decrease
of 20 basis points compared to 5.6% for the same period in 2008. This decrease
was due to lower margins on certain new fixed price contracts. The most
significant components of contract costs in 2009 and 2008 were labor and fringe
benefits. For 2009, labor and fringe benefits were $12.8 million or 77% of
contract costs compared to $12.8 million or 72% of contract costs for the same
period in 2008.
Selling, general and administrative expenses for the quarter ended June 30,
2009 were $8.6 million, a decrease of 1% from the $8.7 million for the same
period in 2008. This decrease was primarily due to a reduction in sales
personnel, partially offset by favorable bad debt recoveries from 2008 that did
not recur in 2009.
Research and development expenses were $3 million for the quarter ended
June 30, 2009, a decrease of 21.6% from the $3.9 million for the same period in
2008. The decrease was primarily attributable to cost reductions achieved in
outsourcing through the use of strategic restaurant product development
relationships. This was partially offset by the Company's continued investment
in its logistics management business.
Amortization of identifiable intangible assets was $368,000 for the quarter
ended June 30, 2009, compared to $389,000 for the same period in 2008. This
decrease was due to certain intangible assets becoming fully amortized in 2008.
Other income, net, was $156,000 for the quarter ended June 30, 2009
compared to $229,000 for the same period in 2008. Other income primarily
includes rental income and foreign currency gains and losses. The decrease is
primarily due to a decline in currency gains.
Interest expense represents interest charged on the Company's short-term
borrowing requirements from banks and from long-term debt. Interest expense was
$82,000 for the quarter ended June 30, 2009 as compared to $121,000 for the same
period in 2008. The decrease is primarily due to lower interest expense
recognized on the Company's interest rate swap agreement that it entered into in
September 2007. The decline was also due to lower borrowings and a lower average
borrowing rate in 2009 compared to 2008.
For the quarters ended June 30, 2009 and 2008, the Company's expected
effective income tax rate based on projected pre-tax income was 36.2% and 39.8%,
respectively. The variance from the federal statutory rate in 2009 was primarily
due to state income taxes and various nondeductible expenses partially offset by
the research and experimental tax credit. For 2008, the increase in effective
tax rate was primarily attributable to the expiration of the Research and
Experimental Tax Credit at the end of 2007. Also contributing to the increase in
effective tax rate was the taxable portion of the proceeds from the voluntary
conversion of a Company-owned life insurance policy in 2008.
Results of Operations -- Six Months Ended June 30, 2009 Compared to Six Months
Ended June 30, 2008
The Company reported revenues of $114.9 million for the six months ended
June 30, 2009, an increase of 5.1% from the $109.3 million reported for the six
months ended June 30, 2008. The Company's net income for the six months ended
June 30, 2009 was $485,000, or $.03 diluted earnings per share, compared to a
net loss of $71,000 and a ($0.00) diluted net loss per share for the same period
in 2008.
Product revenues were $37.4 million for the six months ended June 30, 2009,
a decrease of 1% from the $37.6 million recorded in 2008. This decrease was due
to a reduction in sales to certain restaurant concepts as new store rollouts
that occurred in 2008 did not recur in 2009. In addition, sales in the Company's
luxury hotel, resort and spa software business experienced a decline during the
current quarter. These decreases were partially offset by an increase in sales
to McDonald's, which have increased 20% globally during the first half of 2009,
as well as an increase in sales of the Company's logistics management products
to several commercial customers.
Customer service revenues include installation, software maintenance,
training, twenty-four hour help desk support and various depot and on-site
service options. Customer service revenues were $39 million for the six months
ended June 30, 2009, a 14% increase from $34.1 million reported for the same
period in 2008. This increase is primarily due to a major service initiative
with a large restaurant customer. Also contributing to this growth was an
increase in revenue associated with the Company's depot service center as well
as service revenue associated with the Company's logistic management business.
Contract revenues were $38.5 million for the six months ended June 30,
2009, an increase of 2.4% when compared to the $37.5 million recorded in the
same period in 2008. This increase was primarily due to the start of new
contracts in the information technology outsourcing area, including the timing
of subcontract work and material purchases.
Product margins for the six months ended June 30, 2009 were 34.4%, a
decline of 710 basis points from the 41.5% for the same period in 2008. This
decrease in margins was due to a shift in product mix as hardware sales
increased while software revenue decreased in 2009 when compared to 2008. The
lower software revenue was attributable to a drop in table service revenue as
the Company fulfilled the requirements of a major customer in 2008.
Customer service margins were 28.6% for the six months ended June 30, 2009,
an increase of 290 basis points compared to 25.7% for the same period in 2008.
Service margins increased primarily due to higher installation revenue from a
special initiative with a major restaurant customer as well as an increase in
margins earned by the depot service repair center due to higher volume.
Contract margins were 5.2% for the six months ended June 30, 2009, a
decrease of 10 basis points compared to 5.3% for the same period in 2008. This
decrease was due to lower margins on certain new fixed price contracts. The most
significant components of contract costs in 2009 and 2008 were labor and fringe
benefits. For 2009, labor and fringe benefits were $26.3 million or 74% of
contract costs compared to $26.4 million or 74% of contract costs for the same
period in 2008.
Selling, general and administrative expenses for the six months ended June
30, 2009 were $18.2 million, an increase of 2.5% from the $17.8 million for the
same period in 2008. This increase was primarily due to expenses associated with
the Company's logistics management business, partially offset by decreases in
selling expenses associated with the Company's restaurant and hotel and spa
businesses.
Research and development expenses were $6.4 million for the six months
ended June 30, 2009, a decrease of 20.6% from the $8 million for the same period
in 2008. The decrease was primarily attributable to cost reductions achieved in
outsourcing through strategic relationships, which was partially offset by the
Company's investment in its logistics management business.
Amortization of identifiable intangible assets was $733,000 for the six
months ended June 30, 2009, compared to $779,000 for the same period in 2008.
This decrease was due to certain intangible assets becoming fully amortized in
2008.
Other income, net, was $263,000 for the six months ended June 30, 2009
compared to $543,000 for the same period in 2008. Other income primarily
includes rental income and foreign currency gains and losses. The decrease is
primarily due to a decline in currency gains.
Interest expense represents interest charged on the Company's short-term
borrowing requirements from banks and from long-term debt. Interest expense was
$222,000 for the six months ended June 30, 2009 as compared to $470,000 for the
same period in 2008. The decrease is primarily due to lower interest expense
recognized on the Company's interest rate swap agreement that it entered into in
September 2007. The decline was also due to lower borrowings and a lower average
borrowing rate in 2009 compared to 2008.
For the six months ended June 30, 2009 and 2008, the Company's expected
effective income tax rate based on projected pre-tax income was 36% and 45%,
respectively. The variance from the federal statutory rate in 2009 was primarily
due to state income taxes and various nondeductible expenses partially offset by
the research and experimental tax credit. For 2008, the increase in effective
tax rate was primarily attributable to the expiration of the Research and
Experimental Tax Credit at the end of 2007. Also contributing to the increase in
effective tax rate was the taxable portion of the proceeds from the voluntary
conversion of a Company-owned life insurance policy in 2008.
Liquidity and Capital Resources
The Company's primary sources of liquidity have been cash flow from
operations and lines of credit with various banks. Cash provided by operations
was $6.6 million for the six months ended June 30, 2009 compared to cash used by
operations of $6.7 million for 2008. In 2009, cash was generated by collection
of accounts receivable partially offset by a decline in accounts payable,
accrued expenses and customer deposits. In 2008, cash was impacted by the timing
of payments to vendors and a growth in accounts receivable.
Cash used in investing activities was $1.3 million for the six months ended
June 30, 2009 versus cash generated by investing activities of $233,000 for the
same period in 2008. In 2009, capital expenditures were $769,000 and were
primarily for manufacturing, office and computer equipment. Capitalized software
costs relating to software development of Hospitality segment products were
$464,000 in 2009. In 2008, the Company received $1.6 million from the voluntary
conversion of a Company-owned life insurance policy. In 2008, capital
expenditures were $695,000 and were principally for computer equipment.
Capitalized software costs relating to software development of Hospitality
segment products were $487,000 in 2008.
Cash used in financing activities was $3.6 million for the six months ended
June 30, 2009 versus cash provided of $5.2 million in 2008. In 2009, the Company
decreased its short-term borrowings by $3.3 million, decreased its long-term
debt by $501,000 and also benefited $190,000 from the exercise of employee stock
options. In 2008, the Company increased its short-term bank borrowings by $5.4
million, decreased its long-term debt by $357,000 and benefited $195,000 from
the exercise of employee stock options.
The Company has a credit agreement with a bank under which the Company has
a borrowing availability up to $20 million in the form of a line of credit. This
agreement allows the Company, at its option, to borrow funds at the LIBOR rate
plus the applicable interest rate spread (1.57% at June 30, 2009) or at the
bank's prime lending rate plus the applicable interest rate spread (3.25% at
June 30, 2009). This agreement expires in June 2011. At June 30, 2009, there was
$5.5 million outstanding under this agreement. The weighted average interest
rate paid by the Company was 2.21% during the second quarter of 2009. This
agreement contains certain loan covenants including leverage and fixed charge
coverage ratios. The Company is in compliance with these covenants at June 30,
2009. This credit facility is secured by certain assets of the Company.
In 2006, the Company borrowed $6 million under an unsecured term loan
agreement, executed as an amendment to one of its then bank line of credit
agreements, in connection with the asset acquisition of SIVA Corporation. The
loan provides for interest only payments in the first year and escalating
principal payments through 2012. The loan bears interest at the LIBOR rate plus
the applicable interest rate spread (3.25% at June 30, 2009) or at the bank's
prime lending rate plus the applicable interest rate spread (1.57% at June 30,
2009). The terms and conditions of the line of credit agreement described in the
preceding paragraph also apply to the term loan.
In September 2007, the Company entered into an interest rate swap agreement
associated with the above $6 million loan, with principal and interest payments
due through August 2012. At June 30, 2009, the notional principal amount totaled
$4.7 million. This instrument was utilized by the Company to minimize
significant unplanned fluctuations in earnings and cash flows caused by interest
rate volatility. The Company did not adopt hedge accounting under the provision
of FASB Statement No 133, Accounting for Derivative Instruments and Hedging
Activities, but rather records the fair market value adjustments through the
consolidated statements of operations each period. The associated fair value
adjustment for the three and six months ended June 30, 2009, respectively, are:
$65,800 and $87,600 and are included as a decrease to interest expense.
The Company has a $1.7 million mortgage collateralized by certain real
estate. The annual mortgage payment including interest totals $226,000. The
mortgage bears interest at a fixed rate of 7% and matures in 2010.
During fiscal year 2009, the Company anticipates that its capital
requirements will be approximately $1 to $2 million. The Company does not enter
into long term contracts with its major Hospitality segment customers. The
Company commits to purchasing inventory from its suppliers based on a
combination of internal forecasts and the actual orders from customers. This
process, along with good relations with suppliers, minimizes the working capital
investment required by the Company. Although the Company lists two major
customers, McDonald's and Yum! Brands, it sells to hundreds of individual
franchisees of these corporations, each of which is individually responsible for
its own debts. These broadly made sales substantially reduce the impact on the
Company's liquidity if one individual franchisee reduces the volume of its
purchases from the Company in a given year. The Company, based on internal
forecasts, believes its existing cash, line of credit facilities and its
anticipated operating cash flow will be sufficient to meet its cash requirements
through at least the next twelve months. However, the Company may be required,
or could elect, to seek additional funding prior to that time. The Company's
future capital requirements will depend on many factors including its rate of
revenue growth, the timing and extent of spending to support product development
efforts, expansion of sales and marketing, the timing of introductions of new
products and enhancements to existing products, and market acceptance of its
products. The Company cannot assure that additional equity or debt financing
will be available on acceptable terms or at all. The Company's sources of
liquidity beyond twelve months, in management's opinion, will be its cash
balances on hand at that time, funds provided by operations, funds available
through its lines of credit and the long-term credit facilities that it can
arrange.
Recently Issued Accounting Pronouncements Not Yet Adopted
In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles: a
replacement of FASB Statement No. 162." This Statement establishes two levels of
U.S. generally accepted accounting principles (GAAP) - authoritative and
nonauthoritative. The FASB Accounting Standards Codification (ASC) will become
the source of authoritative, nongovernmental GAAP, except for rules and
interpretive releases of the Securities and Exchange Commission (SEC). SFAS No.
168 is effective for financial statements issued for interim and annual periods
ending after September 15, 2009, and will be adopted by the Company in the third
quarter of 2009. The adoption of SFAS No. 168 will not have any impact on the
Company's Consolidated Financial Statements.
In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB
Interpretation No. 46(R)." This Statement requires entities to perform a
qualitative analysis to determine whether a variable interest gives the entity a
controlling financial interest in a variable interest entity. This Statement
also requires an ongoing reassessment of variable interests and eliminates the
quantitative approach previously required for determining whether an entity is
the primary beneficiary. SFAS No. 167 is effective as of the beginning of an
entity's first annual reporting period that begins after November 15, 2009 (the
Company's 2010 fiscal year). The Company is currently evaluating the potential
impact, if any, of the adoption of SFAS No. 167 on its Consolidated Financial
Statements.
Recently Adopted Accounting Pronouncements
In May 2009, the FASB issued SFAS No. 165, "Subsequent Events." This
Statement establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued. SFAS No. 165 was effective for interim or annual financial periods
ending after June 15, 2009, and the adoption did not have any impact on the
Company's Consolidated Financial Statements.
In April 2009, the FASB issued FSP FAS 107-1, APB 28-1, "Interim
Disclosures About Fair Value of Financial Instruments" ("FSP FAS 107-1, APB
28-1"). FSP FAS 107-1, APB 28-1 requires fair value disclosures in both interim
as well as annual financial statements in order to provide more timely
information about the effects of current market conditions on financial
instruments. FSP FAS 107, APB 28-1 was effective for interim and annual periods
ending after June 15, 2009 and was adopted by the Company in the second quarter
of 2009. The adoption of this standard did not have any impact on the Company's
Consolidated Financial Statements.
In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business
Combinations" ("SFAS 141R"). SFAS 141R, which is broader in scope than SFAS 141,
applies to all transactions or other events in which an entity obtains control
of one or more businesses, and requires that the acquisition method be used for
such transactions or events. SFAS 141R, with limited exceptions, will require an
acquirer to recognize the assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree at the acquisition date, measured at
their fair values as of that date. This will result in acquisition related costs
and anticipated restructuring costs related to the acquisition being recognized
separately from the business combination. Additionally, the FASB also issued FSP
141(R)-1 in April 2009, which modified the guidance in SFAS No. 141(R) related
to contingent assets and contingent liabilities. SFAS No. 141(R), as modified by
FSP 141(R)-1, is required to be applied prospectively to business combinations
for which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008 (the Company's 2009
fiscal year). The adoption of SFAS No. 141(R), as modified by FSP 141(R)-1, as
of January 1, 2009 did not have any impact on the Company's Consolidated
Financial Statements.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests
in Consolidated Financial Statements" ("SFAS 160"). SFAS 160 amends Accounting
Research Bulletin No. 51, "Consolidated Financial Statements," and will change
the accounting and reporting for noncontrolling interests, which are the portion
of equity in a subsidiary not attributable, directly or indirectly, to a parent.
The Company adopted SFAS No. 160 as of January 1, 2009. The adoption of SFAS No.
160 did not have any impact on the Company's Consolidated Financial Statements.
Critical Accounting Policies
In our Annual Report on Form 10-K for the year ended December 31, 2008, we
disclose accounting policies, referred to as critical accounting policies, that
require management to use significant judgment or that require significant
estimates. Management regularly reviews the selection and application of our
critical accounting policies. There have been no updates to the critical
accounting policies contained in our Annual Report on Form 10-K for the year
ended December 31, 2008.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
INFLATION
Inflation had little effect on revenues and related costs during the first
six months of 2009. Management anticipates that margins will be maintained at
acceptable levels to minimize the affects of inflation, if any.
INTEREST RATES
As of June 30, 2009, the Company has $3.6 million in variable long-term
debt and $6.6 million in variable short-term debt. The Company believes that an
adverse change in interest rates of 100 basis points would not have a material
impact on our business, financial condition, results of operations or cash
flows.
FOREIGN CURRENCY
The Company's primary exposures relate to certain non-dollar denominated
sales and operating expenses in Europe and Asia. These primary currencies are
the Euro, the Australian dollar and the Singapore dollar. Management believes
that foreign currency fluctuations should not have a significant impact on our
business, financial conditions, and results of operations or cash flows due to
the low volume of business affected by foreign currencies.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures.
Based on an evaluation of the Company's disclosure controls and procedures
(as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of
June 30, 2009, the end of the period covered by this Quarterly Report on Form
10-Q (the "Evaluation Date"), conducted under the supervision of and with the
participation of the Company's chief executive officer and chief financial
officer, such officers have concluded that the Company's disclosure controls and
procedures, which are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms and designed to ensure that
information required to be disclosed by the Company in the reports filed or
submitted under the Exchange Act is accumulated and communicated to management
including the chief executive and financial officers, as appropriate, to allow
timely decisions regarding required disclosures, are effective as of the
Evaluation Date.
(b) Changes in Internal Control over Financial Reporting.
There was no change in the Company's internal controls over financial
reporting, as defined in Rule 13a-15(f) of the Exchange Act during the quarter
ended June 30, 2009 that has materially affected, or is reasonably likely to
materially affect, such internal controls over financial reporting.
PART II - OTHER INFORMATION
Item 1A. Risk Factors
The Company is exposed to certain risk factors that may effect operations
and/or financial results. The significant factors known to the Company are
described in the Company's most recently filed Annual Report on Form 10-K. There
have been no material changes from the risk factors as previously disclosed in
the Company's Annual Report on Form 10-K.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
On May 1, 2009, PAR Technology Corporation furnished a report on Form 8-K
pursuant to Item 2.02 (Results of Operations and Financial Condition) of that
Form relating to its financial information for quarter ended March 31, 2009, as
presented in a press release of May 1, 2009 and furnished thereto as an exhibit.
8.01 (Other Events). On May 26, 2009 the Board of Directors approved the
recommendation by the Compensation Committee to modify the compensation for
non-employee members of the Board, beginning with the 2009 fiscal year, to
eliminate the annual grant of Non-Qualified Stock Options representing 2,800
shares of the Company's common stock and provide for the grant of Restricted
Stock Awards representing 2,000 shares of the Company's common stock. The Board
of Directors also approved the recommendation by the Compensation Committee to
provide an additional $1000 annual retainer, beginning with the 2009 fiscal
year, to members of the Audit Committee who do not serve as chairman of the
Committee.
Item 6. Exhibits
List of Exhibits
Exhibit No. Description of Instrument
----------- -------------------------
31.1 Certification of Chairman of the Board
and Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2 Certification of Vice President, Chief
Financial Officer, Treasurer, and
Chief Accounting Officer Pursuant
to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Certification of Chairman of the Board
and Chief Executive Officer and
Vice President, Chief Financial Officer,
Treasurer, and Chief Accounting Officer
Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAR TECHNOLOGY CORPORATION
--------------------------
(Registrant)
Date: August 10, 2009
RONALD J. CASCIANO
----------------------------------------
Ronald J. Casciano
Vice President, Chief Financial Officer,
Treasurer, and Chief Accounting Officer
Exhibit Index
Sequential
Page
Exhibit Number
------- ------
31.1 Certification of Chairman of the Board E-1
and Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2 Certification of Vice President, Chief E-2
Financial Officer, Treasurer, and Chief
Accounting Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chairman of the Board E-3
and Chief Executive Officer and
Vice President, Chief Financial Officer,
Treasurer, and Chief Accounting Officer
Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.