Par Technology Corp. has a market cap of $94.73 million; its shares were traded at around $6.39 with a P/E ratio of 127.8 and P/S ratio of 0.42. PTC is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:The Company reported revenues of $58.1 million for the quarter ended March 31, 2010, a decrease of 4% from the $60.5 million reported for the quarter ended March 31, 2009. The Company s net income for the quarter ended March 31, 2010 was $582,000, or $0.04 earnings per diluted share, compared to net income of $247,000 and $0.02 earnings per diluted share for the same period in 2009.
Contract margins were 5.9% for the quarter ended March 31, 2010, compared to 5% for the same period in 2009. This increase was due to a reduction in low margin pass through revenue that occurred in 2009 associated with a specific contract that did not recur in 2010. The most significant components of contract costs in 2010 and 2009 were labor and fringe benefits. For 2010, labor and fringe benefits were $13.1 million or 79% of contract costs compared to $13.6 million or 71% of contract costs for the same period in 2009.
Amortization of identifiable intangible assets was $234,000 for the quarter ended March 31, 2010, compared to $365,000 for the same period in 2009. This decrease was due to certain intangible assets becoming fully amortized in 2009.
Cash used in investing activities was $2.3 million for the three months ended March 31, 2010 versus $554,000 for the same period in 2009. In 2010, capital expenditures were $2.1 million and were primarily related to the Company s acquisition of certain technology components to compliment its next generation enterprise solution for its Restaurant business. Capitalized software costs relating to software development of Hospitality segment products were $128,000. In 2009, capital expenditures were $294,000 and were primarily for manufacturing, office and computer equipment. Capitalized software costs relating to software development of Hospitality segment products were $206,000 in 2009.
Cash used in financing activities was $2.1 million for the three months ended March 31, 2010 versus $1.4 million in 2009. In 2010, the Company decreased its short-term borrowings by $2 million, decreased its long-term debt by $332,000 and also benefited $238,000 from the exercise of employee stock options. In 2009, the Company decreased its short-term borrowings by $1.1 million and decreased its long-term debt by $267,000.
The Company entered into an interest rate swap agreement associated with the above $6 million loan, with principal and interest payments due through August 2012. At March 31, 2010, the notional principal amount totaled $3.9 million. This instrument was utilized by the Company to minimize significant unplanned fluctuations in earnings and cash flows caused by interest rate volatility. The Company did not adopt hedge accounting, but rather records the fair market value adjustments through the consolidated statements of operations each period. The associated fair value adjustment for the three months ended March 31, 2010 was $21,000 and is included as a decrease to interest expense.
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