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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 13, 1997
PAR TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-9720 16-1434688
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification Number)
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
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PAR TECHNOLOGY CORPORATION
TABLE OF CONTENTS
FORM 8-K
Item Number
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Item 5. Other Events of Material Importance
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Item 5.
Preliminary Statement
This statement is being filed voluntarily by PAR Technology Corporation (the
"Company") pursuant to Item 5 of Form 8-K, Current Report.
Item 5. Other Events of Material Importance
During the quarter ended June 30, 1997, the Company recorded a non-recurring
charge of $4.0 million ($2.6 million after tax or $.29 loss per share) relating
to Phoenix Systems and Technologies, Inc. (Phoenix).
In June 1992, the Company was approved under the Department of Defense
Mentor-Protege Program as a mentor for a minority-owned government contractor,
Phoenix. Under the guidelines of this program, the Company provided a loan
guarantee to Phoenix in the amount of $900,000. Additionally, concurrent with
this approval, the Company acquired a 44% interest in Phoenix which is accounted
for under the equity method.
The Company is a subcontractor to Phoenix on certain engineering service
contracts with the United States Government. Additionally, Phoenix rents its
office space from the Company, and is also a vendor to PAR providing
manufacturing and certain contract services. As a result of these activities,
the Company recorded a receivable from Phoenix at December 31, 1996 of $1.7
million, net of a $903,000 allowance.
During 1997, the Company's subcontracting activities expanded due to increased
government requirements. This, coupled with Phoenix's failure to make timely
payments on amounts due, resulted in the Phoenix receivable growing from $1.7
million at the end of last year to $4.2 million at June 30, 1997.
On June 30, 1997, the Company announced that it expected an after tax charge of
$2 million or $.22 per share relating to Phoenix. At that time, the Company was
involved in ongoing discussions with Phoenix relating to payment of amounts
owed. On July 17, 1997, the Company announced its second quarter earnings which
included an after tax charge of $3.1 million or $.34 per share relating to
Phoenix. The amount was greater than previously anticipated because it had
become evident during the ongoing discussions that the Company's exposure had
increased. Subsequently on July 29, 1997, the Company and Phoenix reached an
agreement regarding repayment of amounts owed to PAR. Under this agreement, the
Company received $720,000 in cash payments. The agreement also provides for
certain payments to be made in the second half of 1997 and a note for $1.5
million which bears interest at 8% and is payable at the end of three years.
This amount would be subordinate to the claims of a bank lender. PAR would also
be removed from the $900,000 loan guarantee. PAR has relinquished its equity
interest in Phoenix contingent upon successful execution of a bank financing
agreement. PAR retains security interest in a portion of such stock as security
for the repayment of the subordinated debt.
The execution of this plan is primarily contingent upon Phoenix obtaining
additional bank financing. Accordingly, the Company has recorded reserves in the
second quarter totaling $4 million. This amount includes the remaining exposure
on the receivables, ($4.2 million less $900,000 allowance and the $720,000 cash
payments); the $900,000 loan guarantee and $500,000 for additional
subcontracting efforts that the Company has performed subsequent to June 30,
1997. Any future amounts received under this agreement will be credited to
income as received or, in the case of the loan guarantee, when the Company is
relieved of its obligation.
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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
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(Registrant)
Date: August 13, 1997
/s/Ronald J. Casciano
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Vice President, Chief Financial Officer
and Treasurer
