PAR Technology Corporation reports 232% EBITDA decline in 2018 and 13.5% Revenue decline
03/14/2019 • About PAR Technology Corporation (
$PAR) • By InTwits
PAR Technology Corporation reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- PAR Technology Corporation is a company in decline: 2018 revenue growth was -13.5%, 5 years revenue CAGR was -3.6%
- EBITDA Margin is declining: -2.6% in 2018 vs. 1.7% in 2017 vs. 3.3% in 2014
- EBITDA Margin is quite volatile: -2.6% in 2018, 1.7% in 2017, 3.0% in 2016, 4.2% in 2015, 3.3% in 2014
- PAR Technology Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $4m in 2018, $5m in 2017, $3m in 2016, $2m in 2015, $2m in 2014
- The company has unprofitable business model: ROIC is -15.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
PAR Technology Corporation's Revenue dropped on 13.5%. Revenue decline showed acceleration in 18Q4 - it was 16.0% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 4.2 pp from 1.7% to -2.6% in 2018. During the last 5 years EBITDA Margin topped in 2015 at 4.2% and was declining since that time.
Gross Margin decreased on 2.8 pp from 21.9% to 19.1% in 2018. SG&A as a % of Revenue increased slightly on 0.97 pp from 16.4% to 17.4% in 2018. SG&A as a % of Revenue stuck to a growing trend at 1.2 pp per annum in the last 5 years.
Net Income margin dropped on 10.5 pp from -1.5% to -12.0% in 2018. During the last 5 years Net Income margin topped in 2016 at 0.78% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 2.0%. PAR Technology Corporation showed small growth in CAPEX/Revenue of 1.2 pp from 0.74% in 2015 to 2.0% in 2018. It's average level of CAPEX/Revenue for the last three years was 1.9%. CAPEX as a % of Revenue followed a growing trend at 0.34 pp per annum in 2014-2018.
Return on investment
The company operates at negative ROIC (-15.7%) and ROE (-42.0%). ROIC dropped on 15.5 pp from -0.17% to -15.7% in 2018. ROE dropped on 37.1 pp from -4.9% to -42.0% in 2018. During the last 5 years ROIC topped in 2015 at 8.7% and was declining since that time. During the last 5 years ROE topped in 2016 at 2.6% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.3x and Debt / EBITDA is . Net Debt / EBITDA surged on 1.3x from -1.3x to in 2018. Debt surged on 488% while cash dropped on 47.2%.
PAR Technology Corporation has short term refinancing risk: cash is only 44.6% of short term debt.
Management team
PAR Technology Corporation's CFO is Bryan Menar. Bryan Menar has 2 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
PAR Technology Corporation ($PAR) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 217.9 | 229.0 | 229.7 | 232.6 | 201.2 | -13.5% |
| Gross Profit | 41.6 | 46.1 | 46.2 | 51.0 | 38.5 | -24.6% |
| SG&A | 29.0 | 28.3 | 31.4 | 38.2 | 35.0 | -8.4% |
| EBITDA | 7.1 | 9.7 | 6.8 | 3.9 | -5.2 | -232.1% |
| Net Income | -3.7 | -0.9 | 1.8 | -3.4 | -24.1 | |
Balance Sheet
|
|---|
| Cash | 9.9 | 8.0 | 9.1 | 6.6 | 3.5 | -47.2% |
| Short Term Debt | 8.2 | 2.1 | 0.2 | 1.1 | 7.8 | 582.9% |
| Long Term Debt | 2.6 | 0.6 | 0.4 | 0.2 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 2.1 | 1.7 | 3.4 | 5.1 | 3.9 | -22.1% |
Ratios
|
|---|
| Revenue growth | -9.7% | 5.1% | 0.3% | 1.3% | -13.5% | |
| EBITDA growth | 226.1% | 36.9% | -29.5% | -42.8% | -232.1% | |
|
|---|
| Gross Margin | 19.1% | 20.1% | 20.1% | 21.9% | 19.1% | -2.8% |
| EBITDA Margin | 3.3% | 4.2% | 3.0% | 1.7% | -2.6% | -4.2% |
| SG&A, % of revenue | 13.3% | 12.3% | 13.7% | 16.4% | 17.4% | 1.0% |
| Net Income Margin | -1.7% | -0.4% | 0.8% | -1.5% | -12.0% | -10.5% |
| CAPEX, % of revenue | 1.0% | 0.7% | 1.5% | 2.2% | 2.0% | -0.2% |
|
|---|
| ROIC | 4.4% | 8.7% | 3.1% | -0.2% | -15.7% | -15.5% |
| ROE | -5.1% | -1.3% | 2.6% | -4.9% | -42.0% | -37.1% |
| Net Debt/EBITDA | 0.1x | -0.6x | -1.2x | -1.3x | |
PAR Technology Corporation ($PAR) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 56 | 53 | 46 | 47 | | -15.5% | -15.6% | -5.3% | -16.0% |
| EBITDA | 1 | 0 | -1 | -5 | | -61.8% | -97.5% | | |
| Net Income | 0 | -1 | -17 | -6 | | -95.3% | -166.9% | | |
Balance Sheet
|
|---|
| Cash | 6 | 9 | 6 | 3 | | 5.3% | 164.4% | 395.9% | -47.2% |
| Short Term Debt | 4 | 6 | 7 | 8 | | 248.9% | 405.8% | 335.8% | 582.9% |
| Long Term Debt | 0 | 0 | 0 | 0 | | -59.8% | -64.3% | -86.7% | -100.0% |
Ratios
|
|---|
| Gross Margin | 21.3% | 21.6% | 18.4% | 14.4% | | -1.6% | -1.8% | -0.4% | -7.5% |
| EBITDA Margin | 2.2% | 0.2% | -3.1% | -10.7% | | -2.6% | -5.8% | 0.2% | -8.4% |
| Net Income Margin | 0.1% | -2.5% | -36.0% | -13.2% | | -2.1% | -5.7% | -32.9% | -3.7% |
Peers in Electronic Equipment & Instrum
Below you can find PAR Technology Corporation benchmarking vs. other companies in Electronic Equipment & Instrum industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hickok Inc ($HICKA) | | -7.2% | 13.5% | 258.4% | 178.7% |
| Electro Scientific Industries, Inc. ($ESIO) | | -12.2% | 15.9% | -12.7% | 128.5% |
| Microvision, Inc. ($MVIS) | | 163.6% | 60.7% | -34.7% | 82.8% |
| Ipsidy Inc ($IDTY) | | | | | 66.2% |
| Magal Security Systems Ltd. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (61 companies) | -78.5% | 3.5% | 1.2% | 4.6% | 10.4% |
|---|
| PAR Technology Corporation ($PAR) | | 5.1% | 0.3% | 1.3% | -13.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intellicheck, Inc. ($IDN) | 58.2% | 57.1% | 80.0% | 85.5% | 91.3% |
| Image Sensing Systems, Inc. ($ISNS) | 74.7% | 77.1% | 71.0% | 79.9% | 80.9% |
| National Instruments Corporation ($NATI) | 74.4% | 74.1% | 74.5% | 74.5% | 75.4% |
| Cognex Corporation ($CGNX) | 77.9% | 77.2% | 75.2% | 75.6% | 74.4% |
| Applied DNA Sciences Inc ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (60 companies) | 42.7% | 42.3% | 41.2% | 41.8% | 42.0% |
|---|
| PAR Technology Corporation ($PAR) | 19.1% | 20.1% | 20.1% | 21.9% | 19.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cognex Corporation ($CGNX) | 32.9% | 30.1% | 31.9% | 36.0% | 30.1% |
| Coherent, Inc. ($COHR) | 14.2% | 16.7% | 18.9% | 24.9% | 26.6% |
| Hollysys Automation Technologies, Ltd. ($HOLI) | 21.3% | 26.9% | 23.5% | 16.1% | 23.9% |
| Electro Scientific Industries, Inc. ($ESIO) | -10.1% | -19.1% | -2.0% | -17.8% | 23.1% |
| FLIR Systems, Inc. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (60 companies) | 5.5% | 4.9% | 3.4% | 5.1% | 4.2% |
|---|
| PAR Technology Corporation ($PAR) | 3.3% | 4.2% | 3.0% | 1.7% | -2.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Wrap Technologies Inc ($WRTC) | | | | | 61.4% |
| ClearSign Combustion Corporation ($CLIR) | | 80.3% | 22.1% | 17.4% | 17.7% |
| LightPath Technologies, Inc. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (60 companies) | 1.9% | 2.0% | 2.1% | 1.6% | 2.3% |
|---|
| PAR Technology Corporation ($PAR) | 1.0% | 0.7% | 1.5% | 2.2% | 2.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evans & Sutherland Computer Corp ($ESCC) | | | 83.3% | 39.6% | 55.3% |
| Electro Scientific Industries, Inc. ($ESIO) | -11.7% | -19.7% | -7.1% | -22.9% | 31.5% |
| Coherent, Inc. ($COHR) | 9.9% | 13.1% | 15.6% | 24.0% | 21.5% |
| Zebra Technologies Corporation ($ZBRA) | 3.3% | 0.9% | 2.2% | 10.2% | 20.8% |
| Cognex Corporation ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (72 companies) | 3.3% | 1.8% | 1.8% | 3.3% | 1.3% |
|---|
| PAR Technology Corporation ($PAR) | 4.4% | 8.7% | 3.1% | -0.2% | -15.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Itron, Inc. ($ITRI) | 2.1x | 1.9x | 1.0x | 2.0x | 12.3x |
| Track Group Inc ($TRCK) | | | | | 12.2x |
| Mesa Laboratories, Inc. ($MLAB) | 0.7x | 1.1x | 1.7x | 2.0x | 3.5x |
| Trimble Inc. ($TRMB) | 1.3x | 1.7x | 1.1x | 1.3x | 3.4x |
| MTS Systems Corporation ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| |
|---|
| Median (36 companies) | -0.8x | -0.9x | -0.8x | -0.6x | -0.9x |
|---|
