PAR - Earnings call transcript Q4 2017 | PAR Technology Corporation

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Operator

Good day, ladies and gentlemen and welcome to the PAR Technology Corporation 2017 Fourth Quarter and Year End Financial Results. At this time, all participants are in a listen only mode. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Mr. Chris Byrnes, Vice President of Business and Financial Relations. begin. may you Sir,

Christopher Byrnes

and review. in and to be everyone. details, the welcome of in please to the www.partech.com. time, fourth broadcasting be News financial in at access we as press PAR's it release playback. Victor, related call Also, of take see call the like issues the Investor SEC. this the financial To on conference Form Wide like X-K to press regards our X Relations found XXXX results the for year-end issued At as will and and our p.m., and recording opportunity section Participants you call quarter should take complete be I’d afternoon results that good you, our certain available are aware today. disclosure via we’re can I'd afternoon, the Web. the release to at Web well for The our Thank of call World today this the the care site this today furnished to call to

available conference please the any call if be a live ask it future data. be statements that that forward-looking So includes based included to our currently both use expectations you will of remind like on recording. in conference I’d question, participants advised, and this management’s reflect

the this conference this to our included relied to statement are to be and the earnings uncertainties. related subject information future filings call and results our quarterly release harbor actual on or and in safe However, subject with annual statements in other SEC. events projections and upon may afternoon forward-looking The

Foley; by Q&A. I’d the of call PAR’s CEO, Dr. like be on for followed Bryan which Staff. to Financial the the the Don? of and company's formal general today and Officer; now to remarks President over Don call is PAR’s the will Sammon, Karen Menar; turn call me Chief Chief Joining Donald portion

Donald Foley

Thank begin fourth each our of you. closer at for discussing our you, will Bryan, for to to the providing the strategy Chris. call take quarter, overview by I will the highlighting of by a will our CFO, results who look our I and XXXX. today an Good then numbers. turn afternoon over financial business,

and loss basis, GAAP income we We to million from a by Fourth rose quarter will last recorded third net pleased of $X.X one million, On due completed earnings adoption These $X.X of a as conclude million revenues call one increase and XXXX. share to X.X% our to a attributed your the and the EverServ tier per quarter large to $XX.X net usual a fourth $X.X projects Brink the questions. decrease of in revenues customers. quarter the million, $X.XX year. in per terminals sequentially the quarter is fourth am by XXXX. were taking This compared of restaurant quarter the decrease specific were that XXXX. loss tier I report the in QX to projects half higher first share hardware the our for both XX.X% primarily fourth a customer of in $X.XX of compared

and Bryan Tax asset while of a will focused with results adjustment dominated million a on included GAAP non-GAAP a and $X.X deferred of and and non-cash execution $X.X the XX% year of call. loss repeat Cuts non-operating we the an let with important of Jobs especially passed in recently XXXX the charges and X,XXX that, On cornerstone added basis, quarter increase fourth me far is share reported management of of approximately Brink the total zero. stores our in of XXX expense for net clients, We the investments ended making additional XXXX. our by most Our on XX% quarter, new new total a -- simultaneously and strategic by over software strategy we In remain the Brink necessary We earnings XXXX or later add balancing associated initiatives, important solutions. activated. an were per customers a increase details of an tax the million of Act. initiative. $XX,XXX

XXXX fourth with will bookings XXX that. Brink restaurants repeat in restaurants in New the QX. quarter comp only I totaled as

backlog a the stores. bookings XXXX in started XXXX restaurants. fourth New We quarter of were with XXXX

led our it XXXX, was model business significant In our strategy business recurring is company, through with attachment annuitize includes creating as our our approximately to revenue software Brink important hardware our XX%. customers. solutions to Brink's pull note a service stickiness hardware Brink and of a revenues. software As attachment service that hardware with in

Now solution than we had slower to a PAR's SureCheck. task food turning the XXXX, several safety and Monetizing market competitors new market remains digital space. SureCheck, entered In initiative. strategic adoption was management and anticipated

reduced in our have investment annual maintenance confident SureCheck significant in to anchor our restaurants on said, of customers fees. SureCheck resources That our remain platform a on a software revenues customers our opportunities. platform, service in software to recurring through value hosting two large Brink the While subscribe software we monthly basis. that and concentrate casinos, we has Other contribute as SureCheck grocery,

United turning by restaurants, committed fourth season United destination four Nations premier to in as stone is safety implemented quarter other had Casino, onsite their expand our PAR's devices. management kitchens, our the plans with task a hardware we SureCheck and In food being SureCheck system. announced Resort properties catering into resort, Nation. that to As the well owned deployed commercial

report our away to focusing management through by transition low systems our review office, primarily pass we intel deliberate our business mission in segment revenue from our am solutions left margin line. pleased have I now program Now on our that to government performance.

same revenues revenues. X% decline grew with year contract PMO last government in compared when XX% the quarter's even a This to period associated

of key solution our revenues contract a margin in intel XX% the driver was Our expansion. quarter grew by and

ago. quarter, in a to maintain to level Our increase margin range expect not XX%. for We normal margin the was the to return XX.X% we a should do of year XXXX, this from XX% X% more

backlog contract over multiyear a $XXX million. with XXXX of closed government Our

government our as success additional that to segment value confident are continue added to secure will drive they contracts. continue We

Before our of solutions investments, Along their strategy, described. reduction investing million that savings transition our to with announced previously initiatives taking enhanced turning focus required international initiatives the Bryan platform, success with internal is like customer in clear by systems organization for cloud for operation necessary over and in domestic leading efficient on look process R&D general in steps resources our the through future. our for be are recap The I for customers to increasing priorities a is spend as workforce. estimated continue automation a our opportunity for investment and CEO ensure based include and execution. succeed. XX some at to would these our that our IT coming reiterate shareholder in of in cost for and the have maximizing In $X.X cloud Ensuring to greatest of Having quarter, infrastructure the reinvested we transition increasing observations the to operating the value workflows. to will now months, our valued investments closer market that solution improvement for numbers, it been call enable we that are software our the These strategic our part building PoS fourth restaurant annual necessary year.

in indicators. our position to accelerated growing reiterate is monthly and company with software of to recurring strategy to customer want Our solid in leading important rates a deliver I our our adoption revenue upon offerings.

growth revenue to returned segment while to in government PAR's continuing profits. increase First, the quarter

from increased I over to will Brink XXXX in -- Second repeat number, bookings QX. XXX our in this QX,

those our is commitment, women of the Brink's solution Secondly, for XX% captured development thank strategy bookings our for success In during of our fourth operators. in to and their quarter accounts were the transition. to PAR of sacrifices of and their invest men major XXXX. like this would in hard period of closing, the the work This to company's of multi-unit evidence tied their in I

because our financials. have to I created future. about are them, that now it and bullish that on important the and most some am opportunities they I people them Bryan ask and to Our asset details the only like is give will of PAR's

Bryan Menar

was good everyone. XX.X% Thank compared million, XXXX. you, to decrease QX afternoon Don, the down $XX.X a million, Product $X.X quarter for revenue and

the in QX product inflations major the revenue our for During XXXX restaurant decrease lapping the in was hardware with project quarter, of primarily our retail solutions driven customers our by and segment. one tier

[lapped] quarter compared was Additionally, the PoS, revenue to period $XX.X deployment with X.X% XXXX versus Guys. an approximately a QX million, Brink we [ph] million, as installation active with XXX,XXX up Service the associated $X.X increase for hardware Five QX XXXX. decreased of

product for to favorable large million, In December XX.X% to Don based XXXX. to PMO healthy shift, multiyear systems. quarter, higher was in the compared in the $X.X for our of we value product Contract due rates in hardware backlog both noted, business was prior variance for $XXX to with of rates products a with includes our service We with contract XXXX margin to revenue mission as our increase in and noting million, to a $X.X approximately contracts from service year. revenue compared software quarter down from our a exited of the million an as was and deployments X.X% a offerings. XX% up favorable XX.X% contract quarter compared X.X% million, performance ISR the government XX.X% the $X.X regards Recurring a product mix backlog to in to million, PMO software is SureCheck, contracts. The underlying revenue the Brink in to product offset consistent as was X.X% Service XX.X% increase $XX.X a surveillance QX of driven million. QX other a from for services We revenue result million, compared support software the QX $X quarter by be our up contracts. Don $X respective annual relatively recurring intelligence decrease down compared improvement XXXX. a shifting XXXX. quarter the total Government of continued Brink outpacing which expand wound SaaS hardware XXXX offset XXXX. increase margin XX, Contract of of quarter partially $X.X as as recurring XX.X% growth to and year-over-year for as Momentum business margin margin line, million, driven earlier are by reconnaissance, and This in in increase mix revenue service $X.X for was of continued QX the of as our was the by in increase margin to margins business million compared a line, QX a continues was the ISR by increase software approximately over offering support related year-over-year. $X.X base The million XXXX. and added the noted,

In addition ISR margin rates systems. to improved both in and mission

$X.X versus QX QX in million the to XXXX. GAAP primarily the in in Non-GAAP support $X.X for and included versus was investment based increase operating growth The investments SureCheck compensation. severance, for to million addition our $X review $X.X investigation, to future financial support to million SG&A related expenses. Singapore support $XX.X versus $X.X in China adjustments to the current controls. corporate Brink. million, personnel million development and Non-GAAP was up the current and growth in primarily $X.X million, up by SG&A Research million and future products, expenses QX and to for Now XXXX. and SG&A Brink due were million to driven $X.X compliance QX $X.X equity investment XXXX, up million, XXXX improvements was

Now position. balance to cash the and provide company's information flow sheet on

unit, associated planning by December was million capital were our activities $X.X systems months ended in $X.X of capital million costs driven activities XX, installment XX, cash and ended enterprise segment XX, exercised versus the expenditures QX net platforms. We XX owned related of information used resource December to XXXX. investments of Cash million for XXXX to to to made ended retail hotel related capitalized included was with XX properties. employee $X.X primarily to XXXX, revenue months primarily receipt driven In XX, system, $X.X borrowings XXXX, by year customer our deferred $X.X the and software primarily amortization deployments. in implementation million received in the the business credit. of use million for provided and cash options final restaurant improvements $X.X the investing XXXX, XXXX provided of in related the under our our and XX December was XXXX, by Cash the XX financing sale our of from for December line the proceeds by leased million $X.X of stock XX, For deposits months ended months December of XXXX operations the infrastructure million ended

$XX.X as for XX of call of As $X.X XX, was Inventory days increased XX, days for was restaurant December December balance the million turns retail DSO to XXXX, to of DSO XXXX, a like XX XXXX. as December would of or of and December decrease days for days Government XXXX. questions. versus months to receivable December Xx formal remarks by compared decreased XX Accounts X% your the were we million, inventory the open ended $X.X the XXXX concludes XX as This XXXX. versus million December XX, XX now quarter.

Operator

comes first Our line the question Oracle. Instructions] of [Operator Vidich Manalapan Joe from from

begin. may You

Joseph Vidich

just question a and if on you -- it whether what just to it sell My Brink. to as is with are progress going in do SureCheck bit with little you going could you that do great with the business, on mode. to an sort are whether elaborate or just are of to you looking first perhaps Congratulations has keep

Donald Foley

Well, monetize for to do want it are looking lot a anchor of Obviously, have customers provide revenue. all We two shareholders. our we we options. at our

we still potential. I are were the abandoning the We we said investing are does It investment. investments, not has mean and reducing

competitors time. bad new are which a sense one We a sense in seeing other time in is but good

to As is. there some are use for real is that going judge we to what opportunity us the market still matures, XXXX opportunity and

Joseph Vidich

you look this what deeper Brink it assumption of are time that is my take saying is really want it? that in advantage little into got and the of you and are limited got at that how Okay. it, like you that -- just mean a you resources have have you diving mass sort and I is to of opportunity you guess, with seems

Donald Foley

nailed you think it. I

Joseph Vidich

great. That’s Okay.

the other million, diminish with to talk had what -- service any more was professional to start I able or of a going you question if if just are of to had The charges charges those the that is this you investigation about little if $X.X quarter forward I had regard wondering idea status you guys and bit are going is.

Bryan Menar

progressed. farther exactly able be saw during come that charges we we Obviously, or we stages are each are year, out to saw in within the phasing. those What phasing we Sure. last regards be diminish to last the in during year of reduced along as predict go where to going forward quarter to

to out on are as We are play not consistent predicting that. -- we seen hopefully are this kind of have later what definitive into 'XX the within deadlines But through this not half we to first of be and year. we get 'XX predicting get we stages having

Joseph Vidich

you Do that you of of charges that think to will those would sort continue or level expect moderation? type some

Bryan Menar

work so reporting we did of and doing our there using the and doing in As internal as that purposes. I lot said, latter stages, year are activity advisors earlier last investigation for are we the we is where self the was the a in process heavier outside

and in the We have through are that now latter phase phases. gone we

out So we diminished project activity year. the this and we has as through what that’s finish

Operator

Thank you. And line Partners. comes question Walter [Operator next from from Schenker of our Instructions] the Maz

You may begin.

Walter Schenker

the A the release to quarter, couple business understood with laws new I be there fourth came Brink. as is about correct? change for point which would At from -- laws two-thirds of if on more what will your the of doing that change, questions information orders

Donald Foley

take Karen, one? want you that to

Karen Sammon

Sure, Walter. hi,

largely related fourth our So, large of in number yes, the bookings customers. to major quarter the of three were

to customer are particular XX% of in release these next rollout the fourth bookings the do past process in We those the seven over is and call, a with formal of doing a about One of quarter. have however, the mentioned customers. we they in looking months each the them in for contributed

Walter Schenker

Okay.

So they as you to Being there I install identified only further as identified. information how be, continue these customers will remember being through identifying, one actually maybe? to

Karen Sammon

That’s correct.

Walter Schenker

what have changed Okay. number since set those Brink, hope multiyear installations company would or about not has they the materially Brink expectations? for the to forecast targets Have I has be. years in a historically going right for is, expect, got talking the And potential term you of but out you, whatever targets,

Donald Foley

I proud That of the stores year. let XX% really grew that don’t to of. We number new think handle. is -- last be me something

Our that bookings are largest that yet be outstanding to at number. have activated our is

revenue We you are a as XX%. growth. the service really software increased our proud of Bryan, I believe, mentioned almost

Bryan Menar

AR increasing XX% Correct, and

Donald Foley

those in forward of very we and going as like giving are go future. we are to we numbers proud the So stick numbers that with you

Operator

Wedbush comes the Instructions] [Operator Edward of Wedbush question line next from you. Thank Securities. from Our

begin. may You

Edward Wedbush

you able quarter annual current the Yes. Are current for any the forecasts XXXX for and economic give to year?

Donald Foley

I our We guidance. of policy do will repeat not board. the give

Edward Wedbush

All right.

your bring Second name. question and acquainted as I momentarily his have, I me forgotten stands? got to have update founder of I with the is you he how company, Can any

Donald Foley

W. John Dr. Sammon mean You Jr.?

Edward Wedbush

Yes.

Donald Foley

he How looking help you to for? what me -- stands just are

Edward Wedbush

for about and am information him? looking I other his condition health any Well,

Karen Sammon

He engaged is of active and He board. and the He business remains the transformation. well. investments growth is as through work business our and we the health the the on our in with software

He thank asking. So doing you for well. is

Edward Wedbush

it. I got

Donald Foley

Dr. And years who all I [indiscernible] great John. a have of guidance including respect Doug him. Ed, our that all support. many is useful is Rauch. give board I Dr. my active James And extraordinarily Dr. all board, Stoffel, Sammon, management me our including here, as very for They are advisor Dr. tell a team And management It's you who active. members. I who we two Sammon, very Dr. is active think have Cynthia whole can and ago, was extremely and things, Russo, who advise team, and board, a They John includes

Edward Wedbush

ago it treasury net New myself, was and $XX couple the PAR get to time It when would an long $XX ourselves where got Exchange. got Well, the of our not to up bought I stock between be and the Dr. And that’s company was decades on the involved just him from Sammon York worth the million. of million suspended from so listing approximately and and perhaps, million as information. below relationship started, $XX a ago, I we firm PAR think

Donald Foley

Well, Thank very you. you thank much.

Operator

showing remarks. time. to I call further the this for Mr. no now questions turn like at Foley And I back to am Don would closing

Donald Foley

really I our I and I time Thank Just very people this one the in great faith have will future. your through time you I you for we transition bullish more and thank go repeat, as much. am on

Operator

Ladies and today's conference. Everyone participating the conclude in have gentlemen, thank does you disconnect. for day. and a This you great may program all

PAR Technology (PAR) 15 Mar 182017 Q4 Earnings call transcript