par-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2021

☐ TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From __________ to __________

Commission File Number: 1-09720

PAR TECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)


Delaware			16-1434688
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York 13413-4991
(Address of principal executive offices, including zip code)

(315) 738-0600
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.02 par value	PAR	New York Stock Exchange

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 þ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☐	Accelerated Filer þ	Non-Accelerated Filer ☐
Smaller Reporting Company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of May 3, 2021, 25,979,138 shares of the registrant’s common stock, $0.02 par value, were outstanding.

PAR TECHNOLOGY CORPORATION

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION


Item Number		Page

	Forward-Looking Statements

Item 1.	Financial Statements (unaudited)	2

	Condensed Consolidated Balance Sheets at March 31. 2021 and December 31, 2020 (unaudited)	2

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and March 31, 2020 (unaudited)	3

	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and March 31, 2020 (unaudited))	4

	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2021 and March 31, 2020 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and March 31, 2020 (unaudited)	6

	Notes to Condensed Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

PART II
OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use Of Proceeds	26

Item 6.	Exhibits	33

Signatures		28

“PAR,” “Brink POS®,” “PixelPoint®,” “PAR EverServ®,” “Restaurant Magic®”, “Data Central®”, and “Punchh®” are trademarks of PAR Technology Corporation. This report may also contain trade names and trademarks of other companies. Our

use of or reference to such other companies' trade names or trademarks is not intended to imply any endorsement or sponsorship by these companies of PAR Technology Corporation or its products or services.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (“Quarterly Report”) contains “forward-looking statements” within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of our future operations, financial condition, financial results, business strategies and prospects. Forward-looking statements are generally identified by words such as “anticipate,” “believe,” “belief,” “continue,” “could,” “expect,” “estimate,” “intend,” “may,” “opportunity,” “plan,” “should,” “will,” “would,” “will likely result,” and similar expressions. Forward-looking statements are based on management's current expectations and assumptions that are subject to risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in or implied by forward-looking statements, including forward-looking statements relating to our expectations regarding the impact of the COVID-19 pandemic on our business, operations, and financial results. While we have taken precautionary measures intended to minimize the impact of COVID-19 to our employees and to our business, there can be no assurances that these actions are sufficient and that additional actions will not be required. Factors that have and may continue to adversely affect, and that could subsequently adversely impact, our business, operations and financial results due to the COVID-19 pandemic include: customer store closures; significant reductions or volatility in demand for our products and services; delayed or canceled store implementations, decreased product adoptions and bookings; reduced or delayed software or hardware deployments and a reprioritization of investments in technology or point-of-sale infrastructure; delayed or payment defaults by customers; our ability to be agile in the execution of our business and strategies and our management of business continuity risks, including increased exposure to potential cybersecurity breaches and attacks, disruptions or delays in product assembly and fulfillment and limitations on our selling and marketing efforts; our ability to successfully attract, hire and retain necessary qualified employees to develop and expand our business; and the possible impairment of goodwill and other intangible assets in the event of a significant decline in our financial performance. The extent to which the COVID-19 pandemic will continue to impact our business, operations, and financial results is uncertain and cannot be predicted, and there can be no assurance that the COVID-19 pandemic will not have a material and adverse effect on our business, operations and financial results during any quarter or year in which we are affected. Other factors, risks, trends and uncertainties that could cause our actual results to differ materially from those expressed in or implied by forward-looking statements are described under Part I, Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations”, Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on March 16, 2021, and in our other filings with the SEC. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

Table of Contents

PART I – FINANCIAL INFORMATION


Item 1.			Financial Statements (unaudited)

PAR TECHNOLOGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)


Assets	March 31, 2021		December 31, 2020
Current assets:
Cash and cash equivalents	$	173,122	$	180,686
Accounts receivable – net	38,706		42,980
Inventories – net	25,296		21,638
Other current assets	7,970		3,625
Total current assets	245,094		248,929
Property, plant and equipment – net	13,627		13,856
Goodwill	41,214		41,214
Intangible assets – net	32,652		33,121
Lease right-of-use assets	2,423		2,569
Other assets	3,665		4,060
Total assets	$	338,675	$	343,749
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	676	$	666
Accounts payable	18,886		12,791
Accrued salaries and benefits	10,620		13,190
Accrued expenses	3,930		2,606
Lease liabilities – current portion	1,133		1,200
Customer deposits and deferred service revenue	9,895		9,506
Total current liabilities	45,140		39,959
Lease liabilities – net of current portion	1,410		1,462
Deferred service revenue – noncurrent	2,838		3,082
Long-term debt	106,851		105,844
Other long-term liabilities	4,584		4,997
Total liabilities	160,823		155,344
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized	—		—
Common stock, $.02 par value, 58,000,000 shares authorized, 23,103,979 and 22,982,955 shares issued, 21,961,788 and 21,917,357 outstanding at March 31, 2021 and December 31, 2020, respectively	462		459
Additional paid in capital	245,566		243,575
Accumulated deficit	(54,977)		(46,706)
Accumulated other comprehensive loss	(4,238)		(3,936)
Treasury stock, at cost, 1,142,191 shares and 1,065,598 shares at March 31, 2021 and December 31, 2020, respectively	(8,961)		(4,987)
Total shareholders’ equity	177,852		188,405
Total Liabilities and Shareholders’ Equity	$	338,675	$	343,749

See accompanying notes to unaudited interim condensed consolidated financial statements

Table of Contents

PAR TECHNOLOGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2021		2020
Net revenues:
Product	$	18,556	$	18,634
Service	18,028		18,775
Contract	17,883		17,323
	54,467		54,732
Costs of sales:
Product	14,885		14,905
Service	12,695		12,646
Contract	16,687		16,134
	44,267		43,685
Gross margin	10,200		11,047
Operating expenses:
Selling, general and administrative	14,537		11,646
Research and development	5,809		4,865
Amortization of identifiable intangible assets	275		210
Gain on insurance proceeds	(4,400)		—

	16,221		16,721
Operating loss	(6,021)		(5,674)
Other expense – net	(51)		(406)
Loss on extinguishment of debt	—		(8,123)
Interest expense – net	(2,160)		(1,972)
Loss before provision for income taxes	(8,232)		(16,175)
(Provision for) benefit from income taxes	(39)		5,265
Net loss	$	(8,271)	$	(10,910)
Net loss per share (basic and diluted)	$	(0.38)	$	(0.61)
Weighted average shares outstanding (basic and outstanding)	21,929		17,941

See accompanying notes to unaudited interim condensed consolidated financial statements

Table of Contents

PAR TECHNOLOGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2021		2020
Net loss	$	(8,271)	$	(10,910)
Other comprehensive income loss, net of applicable tax:
Foreign currency translation adjustments	(302)		201
Comprehensive loss	$	(