SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2000. Commission File Number 1-9720
OR
[ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From __________ to __________
Commission File Number __________
PAR TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 16-1434688
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
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
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 [X] No [ ]
The number of shares outstanding of registrant's common stock, as of
October 31, 2000 - 7,723,005 shares.
<PAGE>
PAR TECHNOLOGY CORPORATION
TABLE OF CONTENTS
FORM 10-Q
PART 1
FINANCIAL INFORMATION
Item Number
-----------
Item 1. Financial Statements
- Consolidated Statement of Income for
the Three and Nine Months Ended September 30, 2000 and 1999
- Consolidated Statement of Comprehensive Income for
the Three and Nine Months Ended September 30, 2000 and 1999
- Consolidated Balance Sheet at
September 30, 2000 and December 31, 1999
- Consolidated Statement of Cash Flows
for the Nine Months Ended September 30, 2000 and 1999
- Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit Index
<PAGE>
Item 1.
Financial Statements
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In Thousands Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net revenues:
Product ........................... $ 13,750 $ 19,226 $ 30,681 $ 65,590
Service ........................... 8,808 8,674 23,360 26,762
Contract .......................... 6,400 4,682 18,482 14,927
--------- --------- --------- ---------
28,958 32,582 72,523 107,279
--------- --------- --------- ---------
Costs of sales:
Product ........................... 10,336 12,331 23,892 41,916
Service ........................... 6,564 8,237 20,668 24,522
Contract .......................... 5,949 4,455 17,262 14,007
--------- --------- --------- ---------
22,849 25,023 61,822 80,445
--------- --------- --------- ---------
Gross margin ................ 6,109 7,559 10,701 26,834
--------- --------- --------- ---------
Operating expenses:
Selling, general and administrative 5,224 5,289 17,294 16,785
Research and development .......... 2,630 2,003 7,155 6,551
Nonrecurring charge ............... 300 -- 300 --
--------- --------- --------- ---------
8,154 7,292 24,749 23,336
--------- --------- --------- ---------
Income (loss) from operations .......... (2,045) 267 (14,048) 3,498
Other income, net ...................... 135 238 232 334
Interest expense ....................... (302) (101) (657) (368)
--------- --------- --------- ---------
Income (loss) before provision for
income taxes ...................... (2,212) 404 (14,473) 3,464
Provision (benefit) for income taxes ... (1,033) (349) (5,519) 771
--------- --------- --------- ---------
Net income (loss) ...................... $ (1,179) $ 753 $ (8,954) $ 2,693
========= ========= ========= =========
Earnings (loss) per share
Diluted ........................... $ (.15) $ .09 $ (1.13) $ .31
========= ========= ========= =========
Basic ............................. $ (.15) $ .09 $ (1.13) $ .32
========= ========= ========= =========
Weighted average shares outstanding
Diluted ........................... 7,775 8,595 7,891 8,580
========= ========= ========= =========
Basic ............................. 7,775 8,412 7,891 8,435
========= ========= ========= =========
</TABLE>
<PAGE>
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income (loss) ...................... $ (1,179) $ 753 $ (8,954) $ 2,693
Other comprehensive income (loss),
net of tax:
Foreign currency translation
adjustments ....................... (198) (48) (672) (85)
--------- --------- --------- --------
Comprehensive income (loss) ............ $ (1,377) $ 705 $ (9,626) $ 2,608
========= ========= ========= ========
</TABLE>
<PAGE>
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands Except Share Amounts)
<TABLE>
<CAPTION>
September 30,
2000 December 31,
Assets (Unaudited) 1999
----------- -----------
<S> <C> <C>
Current Assets:
Cash ................................ $ 555 $ 953
Accounts receivable-net ............. 31,042 37,436
Inventories ......................... 28,567 28,164
Income tax refund claims ............ -- 133
Deferred income taxes ............... 8,265 3,442
Other current assets ................ 2,797 2,042
-------- --------
Total current assets ............ 71,226 72,170
Property, plant and equipment - net ...... 10,828 11,470
Other assets ............................. 4,072 4,467
-------- --------
$ 86,126 $ 88,107
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Notes payable ....................... $ 12,792 $ 4,984
Current portion of long-term debt ... 49 --
Accounts payable .................... 6,377 7,800
Accrued salaries and benefits ....... 3,969 4,746
Accrued expenses .................... 2,229 2,497
Income taxes payable ................ 229 --
Deferred service revenue ............ 6,913 5,478
-------- --------
Total current liabilities ....... 32,558 25,505
-------- --------
Deferred income taxes .................... 139 459
-------- --------
Long-term debt ........................... 2,336 --
-------- --------
Shareholders' Equity:
Common stock, $.02 par value,
19,000,000 shares authorized;
9,516,711 shares issued;
7,723,005 and 8,059,805 outstanding 190 190
Preferred stock, $.02 par value,
1,000,000 shares authorized ....... -- --
Capital in excess of par value ...... 28,071 28,071
Retained earnings ................... 33,237 42,191
Accumulated comprehensive loss ...... (1,436) (764)
Treasury stock, at cost,
1,793,706 and 1,456,906 shares ...... (8,969) (7,545)
-------- --------
Total shareholders' equity ...... 51,093 62,143
-------- --------
$ 86,126 $ 88,107
======== ========
</TABLE>
<PAGE>
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
-------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) .................................... $(8,954) $ 2,693
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ...................... 2,605 2,061
Provision for obsolete inventory ................... 2,751 2,981
Translation adjustments ............................ (672) (85)
Increase (decrease) from changes in:
Accounts receivable-net .......................... 6,394 8,606
Inventories ...................................... (3,154) (9,087)
Income tax refund claims ......................... 133 --
Other current assets ............................. (755) (879)
Other assets ..................................... -- (77)
Accounts payable ................................. (1,423) (4,079)
Accrued salaries and benefits .................... (777) (932)
Accrued expenses ................................. (268) (602)
Income taxes payable ............................. 229 2,138
Deferred service revenue ......................... 1,435 973
Deferred income taxes ............................ (5,143) (1,472)
------- -------
Net cash provided (used) by operating activities (7,599) 2,239
------- -------
Cash flows from investing activities:
Capital expenditures ............................... (798) (1,681)
Capitalization of software costs ................... (770) (403)
------- -------
Net cash used in investing activities ........... (1,568) (2,084)
------- -------
Cash flows from financing activities:
Net borrowing (payments) under
line-of-credit agreements ...................... 7,808 436
Proceeds from the issuance of long-term debt ....... 2,385 --
Proceeds from the exercise of stock options ........ -- 21
Acquisition of treasury stock ...................... (1,424) (878)
------- -------
Net cash provided (used) in financing activities 8,769 (421)
------- -------
Net decrease in cash and cash equivalents ........... (398) (266)
Cash and cash equivalents at beginning of year ...... 953 1,298
------- -------
Cash and cash equivalents at end of period .......... $ 555 $ 1,032
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 603 $ 362
Income taxes, net of refunds (643) (115)
</TABLE>
<PAGE>
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The statements for the three and nine months ended September 30, 2000 and
1999 are unaudited; in the opinion of the Company such unaudited statements
include all adjustments (which comprise only normal recurring accruals)
necessary for a fair presentation of the results for such periods. The
consolidated financial statements for the year ending December 31, 2000 are
subject to adjustment at the end of the year when they will be audited by
independent accountants. The results of operations for the three and nine
months ended September 30, 2000 are not necessarily indicative of the
results of operations to be expected for the year ending December 31, 2000.
The consolidated financial statements and notes thereto should be read in
conjunction with the financial statements and notes for the years ended in
December 31, 1999 and 1998 included in the Company's December 31, 1999
Annual Report to the Securities and Exchange Commission on Form 10-K.
2. Inventories are used in the manufacture and service of Transaction
Processing products. The components of inventory, net of related reserves,
consist of the following:
<TABLE>
<CAPTION>
(In Thousands)
September 30, December 31,
2000 1999
----------- ----------
<S> <C> <C>
Finished goods....... $ 7,198 $ 6,886
Work in process...... 2,654 2,763
Component parts...... 5,889 6,001
Service parts........ 12,826 12,514
----------- ----------
$ 28,567 $ 28,164
=========== ==========
</TABLE>
At September 30, 2000 and December 31, 1999, the Company had recorded
reserves for obsolete inventory of $3,057,000 and $2,208,000,
respectively.
<PAGE>
PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
3. The Company's reportable segments are strategic business units that have
separate management teams and infrastructures that offer different products
and services. The Company has four reportable segments. The Restaurant
segment offers integrated solutions to the restaurant industry. These
offerings include industry leading hardware and software applications
utilized at the point-of-sale, back of store and the Corporate office. This
segment also offers customer support including field service, installation,
twenty-four hour telephone support and depot repair. Effective July 1,
2000, the Company formed its Industrial Segment. The Industrial segment
offers integrated solutions to the manufacturing and warehousing
industries. The key element that the Company offers to this market place is
its software application that provides a universal interface to the
customer's ERP systems. The Government segment designs and implements
advanced technology computer software systems primarily for military and
intelligence agency applications. It provides services for operating and
maintaining certain U.S. Government-owned test sites, and for planning,
executing and evaluating experiments involving new or advanced radar
systems. The Vision segment designs, manufactures, sells, installs and
services image processing systems for the food-processing industry. This
segment ceased operations at the end of the third quarter of this year.
Inter-segment sales and transfers are not material.
<PAGE>
Information as to the Company's operations in these four segments is set
forth below (in thousands):
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Restaurant .............. $ 21,660 $ 26,425 $ 51,019 $ 85,990
Industrial .............. 620 1,430 2,431 5,854
Government .............. 6,400 4,682 18,482 14,927
Vision .................. 278 45 591 508
--------- --------- --------- ---------
Total ............. $ 28,958 $ 32,582 $ 72,523 $ 107,279
========= ========= ========= =========
Income (loss) from operations:
Restaurant .............. $ (1,810) $ (69) $ (12,961) $ 2,524
Industrial .............. (644) 244 (1,557) 438
Government .............. 701 292 1,193 940
Vision .................. 8 (200) (423) (404)
Nonrecurring charge ..... (300) -- (300) --
--------- --------- --------- ---------
(2,045) 267 (14,048) 3,498
Other income, net ............ 135 238 232 334
Interest expense ............. (302) (101) (657) (368)
--------- --------- --------- ---------
Income (loss) before provision
for income taxes ........ $ (2,212) $ 404 $ (14,473) $ 3,464
========= ========= ========= =========
Depreciation and amortization:
Restaurant .............. $ 671 $ 563 $ 2,060 $ 1,598
Industrial .............. 9 5 22 8
Government .............. 27 41 87 116
Vision .................. 8 7 25 31
Corporate ............... 124 134 411 308
--------- --------- --------- ---------
Total ............. $ 839 $ 750 $ 2,605 $ 2,061
========= ========= ========= =========
Capital expenditures:
Restaurant .............. $ -- $ 290 $ 105 $ 697
Industrial .............. 7 13 20 46
Government .............. -- 162 61 359
Vision .................. 2 7 12 41
Corporate ............... 396 273 600 538
--------- --------- --------- ---------
Total ............. $ 405 $ 745 $ 798 $ 1,681
========= ========= ========= =========
The following table presents revenues by geographic area based on the
location of the use of the product or services.
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
---------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
United States ................ $ 23,740 $ 24,631 $ 60,093 $ 89,512
Other Countries .............. 5,218 7,951 12,430 17,767
--------- --------- --------- ---------
Total .................. $ 28,958 $ 32,582 $ 72,523 $ 107,279
========= ========= ========= =========
</TABLE>
<PAGE>
Customers comprising 10% or more of the Company's total revenues are
summarized as follows:
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
------------------ -------------------
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Restaurant Segment:
McDonald's Corporation 32% 32% 30% 42%
Tricon Corporation ... 21% 32% 21% 25%
Burger King .......... 11% 5% 7% 5%
Government Segment:
Department of Defense 22% 14% 25% 14%
All Others ................ 14% 17% 17% 14%
--- --- --- ---
100% 100% 100% 100%
=== === === ===
<CAPTION>
September 30, December 31,
2000 1999
------------ -----------
<S> <C> <C>
Identifiable assets:
Restaurant ................. $73,076 $75,323
Industrial ................. 1,614 1,457
Government ................. 6,388 6,036
Vision ..................... 794 1,112
Corporate .................. 4,254 4,179
------- -------
Total ................ $86,126 $88,107
======= =======
</TABLE>
The following table presents property by geographic area based on the
location of the asset.
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------- -----------
<S> <C> <C>
United States ................ $78,658 $77,438
Other Countries............... 7,468 10,669
------- -------
Total .................. $86,126 $88,107
======= =======
</TABLE>
<PAGE>
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 2000
COMPARED WITH
QUARTER ENDED SEPTEMBER 30, 1999
The Company reported revenues of $29 million for the third quarter ended
2000, a decrease of 11% from the $32.6 million reported in 1999. The Company
recorded a net loss of $1.2 million or a diluted loss per share of $.15 for
2000. This compares to net income of $753,000 or diluted earnings per share of
$.09 for 1999. The results for the third quarter of 2000 include a nonrecurring
after tax charge of $200,000 or $.03 loss per share relating to the disposition
of the Company's Vision business.
Product revenues were $13.8 million in 2000, a decrease of 28% from the
$19.2 million recorded in 1999. This decline is reflective of the general slow
down in the buying patterns of the Company's restaurant customers following a
robust purchasing volume in 1999. This decline is also attributed to ongoing
delays in the release of PAR's restaurant management software, as well as the
release and market acceptance of third party software products used in the
Company's POS systems.
Customer service revenues were $8.8 million in 2000, an increase of 2% from
the $8.7 million in 1999. This was due to increased field service activities
partially offset by lower installation revenue, which is directly related to the
decreased product revenue discussed above. The Company's service offerings
include installation, twenty-four hour help desk support and various field and
on-site service options.
Contract revenues were $6.4 million in 2000, an increase of 37% when
compared to the $4.7 million recorded in the same period in 1999. This growth
was primarily due to a four-year, $24 million Navy contract to operate and
maintain communications in support of the Pacific Fleet. The growth was also
attributable to the recently awarded $4.5 million contract with the US Navy to
provide telecommunications support to the Naval Computer and Telecommunications
Detachment located in Brunswick, Maine. These contracts will contribute to
revenue growth throughout the remainder of 2000.
Product margins were 25% for 2000 compared to 36% for the same period in
1999. This decrease resulted from absorption of fixed manufacturing costs on low
product volume and less favorable product mix.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 2000
COMPARED WITH
QUARTER ENDED SEPTEMBER 30, 1999
Customer service margins were 25% in 2000 compared to 5% for the same
period in 1999. This increase was due to efficiency improvements related to the
recently installed service management system, certain price adjustments and a
favorable physical inventory adjustment.
Contract margins were 7% in 2000 compared to 5% for the same period in
1999. The difference in margins is due to a minor change in contract mix.
Margins on the Company's government contract business typically run between 5%
and 6%.
Selling, general and administrative expenses were $5.2 million in 2000
versus $5.3 million for the same period in 1999, a decrease of 1%. The decline
is primarily due to lower selling expense in the Restaurant and Industrial
businesses which is directly related to lower product revenues.
Research and development expenses were $2.6 million in 2000, an increase of
31% from the $2 million recorded for the same period in 1999. This increase is
the result of the Company's investment in its new iN.fusion software suite for
its restaurant customers and its investment in enterprise solutions for its
manufacturing/warehousing customers. Research and development costs attributable
to government contracts are included in cost of contract revenues.
Interest expense represents interest charged on the Company's short-term
borrowing requirements from banks and from long-term debt acquired during the
second quarter of 2000.
The Company's tax provision in 2000 includes a $200,000 benefit, or $.03
earnings per share relating to the finalization of the Company's 1999 federal
tax return. The tax provision for 1999 includes a benefit of $500,000 or $.06
earnings per share relating to the completion of the Company's 1998 tax return.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED WITH
NINE MONTHS ENDED SEPTEMBER 30, 1999
The Company reported revenues of $72.5 million for the nine months ended
2000, a decrease of 32% from the $107.3 million reported in 1999. The Company
recorded a net loss of $9 million or a diluted loss per share of $1.13 for 2000.
This compares to net income of $2.7 million or diluted earnings per share of
$.31 for 1999.
Product revenues were $30.7 million in 2000, a decrease of 53% from the
$65.6 million recorded in 1999. This decrease can be attributed to a general
slow down in the buying patterns of our customers. This decline is also the
result of ongoing delays in the release of PAR's restaurant management software,
as well as the release and market acceptance of third party software products
used in the Company's POS systems. Product revenues in 1999 were especially
strong to McDonald's Corporation due to the requirements of their "Made for You"
initiative. This program was completed in 1999.
Customer service revenues were $23.4 million in 2000, a decrease of 13%
from the $26.8 million in 1999. The primary reason was lower installation
revenue and supply sales, which are directly related to the decreased product
revenue discussed above. This was partially offset by a rise in field service
activity.
Contract revenues were $18.5 million in 2000, an increase of 24% when
compared to the $14.9 million recorded in the same period in 1999. This growth
was primarily due to the Navy contract to operate and maintain communications in
support of the Pacific Fleet and an increase in software development work for
the Department of Defense.
Product margins were 22% for 2000 compared to 36% for the same period in
1999. Product margins have been below normal for 2000 due to absorption of fixed
manufacturing costs on a very low product volume.
Customer service margins were 12% in 2000 compared to 8% for the same
period in 1999. Margins increased primarily due to improved productivity and
certain price adjustments.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED WITH
NINE MONTHS ENDED SEPTEMBER 30, 1999
Contract margins were 7% in 2000 compared to 6% for the same period in
1999. The difference in margins is due to a minor change in contract mix.
Margins on the Company's government contract business typically run between 5%
and 6%.
Selling, general and administrative expenses were $17.3 million in 2000
versus $16.8 million for the same period in 1999, an increase of 3%. The
increase is the result of a one-time early retirement program offered to
eligible employees in the first quarter of 2000. Additionally, administrative
expenses related to the recently installed service management system increased.
This was partially offset by a reduction in sales and marketing expenses
directly related to the decline in product revenue.
Research and development expenses were $7.2 million in 2000, an increase of
9% from the $6.6 million in 1999. The Company is continuing its investment in
enterprise solutions for both its restaurant and manufacturing/warehousing
customers.
Interest expense represents interest charged on the Company's short-term
borrowing requirements from banks and from long-term debt.
Liquidity and Capital Resources
Cash used by operating activities was $7.6 million for the nine months
ended September 30, 2000, compared to cash provided by operating activities of
$2.2 million in 1999. During 2000, cash flow was adversely affected by the
operating loss, a build up in inventory in anticipation of future demands and
the timing of vendor payments. This was partially offset by the $6.4 million
reduction in accounts receivable. During 1999, cash flow benefited from the
collection of accounts receivable, net income for the period and the federal
income tax refund. This was partially offset by the increase in inventory levels
in anticipation of future demand and to meet the growing service parts
requirements as the Company's customer base increases.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED WITH
NINE MONTHS ENDED SEPTEMBER 30, 1999
Cash used in investing activities was $1.6 million for the first nine
months of 2000 compared to $2.1 million in 1999. In 2000, capital expenditures
were primarily for improvements to the Company's corporate facilities. In
addition, the Company capitalized $770,000 of software costs. In 1999, capital
expenditures were for upgrades to the Company's customer service center, for PC
equipment and for research and development equipment.
Cash provided by financing activities was $8.8 million for the nine months
ended September, 2000 compared to cash used of $421,000 in 1999. In 2000, the
Company increased its line-of-credit borrowings by $7.8 million and secured a
mortgage on a portion of its headquarter facilities. This was partially offset
by the repurchase of 336,800 shares of its stock for $1.4 million. In 1999, the
Company increased its lines of credit borrowings by $436,000. The Company also
repurchased 137,300 shares of its stock for $878,000.
The Company has line-of-credit agreements, which aggregate $27.5 million
with certain banks, of which $14.7 million were unused at September 30, 2000.
The Company believes that it has adequate financial resources to meet its future
liquidity and capital requirements.
Other Matters
Inflation had little effect on revenues and related costs during the first
nine months of 2000. Management anticipates that margins will be maintained at
acceptable levels to minimize the effects of inflation, if any.
The Company has total interest bearing short-term debt of approximately
$12.8 million at September 30, 2000. Management believes that increases in
short-term rates could have an adverse effect on the Company's 2000 results.
Management believes that currency fluctuations could have an impact on
gross margins on revenues affected by foreign currencies.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED WITH
NINE MONTHS ENDED SEPTEMBER 30, 1999
Important Factors Regarding Future Results
Information provided by the Company, including information contained in
this report, or by its spokespersons from time to time may contain
forward-looking statements. Forward-looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that all forward-looking statements involve risks and
uncertainties, including without limitation, further delays in new product
introduction, risks in technology development and commercialization, risks in
product development and market acceptance of and demand for the Company's
products, risks of downturns in economic conditions generally, and in the quick
service sector of the restaurant market specifically, risks of intellectual
property rights associated with competition and competitive pricing pressures,
risks associated with foreign sales and high customer concentration, Year 2000
compliance risks and other risks detailed in the Company's filings with the
Securities and Exchange Commission.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
List of Exhibits
Exhibit No. Description of Instrument
----------- -------------------------
11 Statement re computation of per-share earnings
Reports on Form 8-K
None during the third quarter of 2000.
<PAGE>
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
--------------------------
(Registrant)
Date: November 10, 2000
RONALD J. CASCIANO
----------------------------------------
Ronald J. Casciano
Vice President, Chief Financial Officer
and Treasurer
