Sales increase, earnings slip at PAR Technology

NEW HARTFORD — Sales were up for the third quarter at PAR Technology Corp. (NYSE: PAR), but income was down as the company said it struggled to grow organically and break its dependence on sales to its largest customer.

PAR reported net income of $1.3 million, or 9 cents per share, on sales of $61.1 million for the quarter, compared with net income of $1.6 million, or 11 cents, on sales of $58.7 million a year ago.

About 20 percent of the quarter’s sales were to McDonald’s Corp., PAR’s largest customer, PAR CEO Paul Domorski said during a Nov. 5 conference call with investors and the media.

“Part of our strategy is to diversify our business so no one company can impact results,” he said. “Over the past three quarters, we’ve made progress in that area.”

Domorski also cautioned investors about comparing 2012 quarterly figures with those from 2010 and 2011, when PAR was in the midst of a large product roll-out to McDonald’s. That type of large roll-out is the reason why PAR is working to diversify its customer base, he said, so that when one roll-out ends, revenue doesn’t fall.

During the quarter, PAR increased its sales to several other customers, Domorski said. Notably, sales to YUM! Brands, which operates Taco Bell and KFC, increased 8 percent and sales to Subway increased 17 percent.

Other highlights during the quarter included the introduction of the new PAR EverServ 7000 point-of-sale terminal and the transition of PAR Springer-Miller’s ATRIO guest-experience-management software with Microsoft’s Windows Azure cloud platform. During the quarter, PAR also landed new distribution partners as it prepares for the “aggressive roll-out of ATRIO worldwide,” Domorski said. 

The process has been held up by delays in signing a large hotel as a launch partner, he said, but the company hopes to have a hotel on board by the end of this year.

During the quarter, PAR’s government-contracting segment, which accounts for 36 percent of PAR’s revenue, landed several new contracts including a $48 million Army contract.

Domorski predicted that PAR’s profitability will improve as the company’s hospitality-technology markets rebound from the current market slowdown.

Headquartered in New Hartford, PAR (www.partech.com) offers hardware and software for the restaurant industry; management systems for businesses such as hotels, spas, stadiums, and food-service companies; and system solutions to federal and state government customers.         

Contact DeLore at tdelore@tmvbj.com