PAR leaders optimistic despite Q2 loss

NEW HARTFORD — Despite a second-quarter loss, leaders at PAR Technology Corp. (NYSE: PAR) remain encouraged by the company’s future prospects.

PAR lost $511,000 from continuing operations in the second quarter. That’s an improvement from the net loss of $17.5 million in the year-earlier period. 

The New Hartford–based company lost 3 cents a share in the second quarter compared with a loss of $1.17 a share in the same period in 2011. Revenue in the latest quarter jumped 10 percent to $62.1 million from $56.4 million in the 2011 second quarter.

PAR provides technology for restaurants, retailers, hotels, cruise lines, stadiums, and more. The company also performs work for state and federal government agencies and provides communications and information-technology support services to the Department of Defense.

Excluding one-time charges related to changes in the company’s continuing operations, PAR earned $1.3 million, or 9 cents a share, in the second quarter of 2011. Included in the net loss for the second quarter of 2012 was a loss of 2 cents a share related to the sale of PAR’s logistics-management business in January.

The company’s second-quarter results were heavily affected by a slowdown in business with McDonald’s, its largest hospitality customer, PAR Chairman and CEO Paul Domorski said during a conference call Aug. 1 on the firm’s earnings. PAR recently completed a large, national rollout of some new technology with McDonald’s, he said.

“We still have a very good relationship with McDonald’s,” he added. “They continue to buy from us.”

PAR officials expect revenue growth from its relationship with McDonald’s in the future. Domorski noted that its revenue from YUM! Brands rose 69 percent in the latest quarter. YUM runs Taco Bell, Pizza Hut, and KFC restaurants.

He also said revenue with Subway restaurants increased 33 percent during the period.

PAR introduced a new point-of-sale system during the second quarter, Domorski said. The system, the EverServ 7000, has drawn good interest. It was prominently displayed during a recent national Subway restaurant convention, he added.

PAR executives are also bullish on the company’s two new cloud-based products. 

One, the EverServ SureCheck, aids with food-quality monitoring through a PDA-based mobile app, cloud-based enterprise server, and a temperature-measuring device. Food quality is an area of intense concern for retailers and restaurants, Domorski noted.

PAR is rolling out SureCheck with Wal-mart and is in talks on the product with other major retailers, he added.

“The focus on food safety and the role of technology will only increase,” he said.

PAR’s other new cloud-based product, ATRIO, a platform of hospitality management software, is also drawing strong interest, Domorski said.

PAR’s government business posted record revenue in the second quarter, he added. Revenue in that segment increased 60 percent from the same period in 2011.

The timing of new government contract awards is hard to predict at the moment, Domorski said, given the uncertainty surrounding the federal budget.

He also noted that PAR is financially strong with more than $17 million in cash and investments and little debt. Business during the second quarter was challenging, but company leaders believe the firm is in a good position to expand and post better results in the second half of 2012, he added.

PAR reported its earnings before the open of trading Aug. 1. Its stock opened the day down 11 cents at $5.02 before closing down just 2 cents at $5.11. 

PAR shares have had a good 2012, gaining nearly 30 percent year to date, through Aug. 1. Most of the gains came in January and February. In 2011, PAR’s stock price declined 31 percent for the year.