Business Wire | Aug 9, 2021 04:05PM EDT

PAR Technology Corporation Announces 2021 Second Quarter Results

Aug. 09, 2021

NEW HARTFORD, N.Y.--(BUSINESS WIRE)--Aug. 09, 2021--PAR Technology Corporation (NYSE: PAR) ("PAR Technology" or the "Company") today announced its results for the second quarter ended June 30, 2021.

Summary of Fiscal 2021 Second Quarter

* Revenues were reported at $69.0 million for the second quarter of 2021, a 50.9% increase compared to $45.7 million for the same period in 2020. * Net loss for the second quarter of 2021 was $10.0 million, or $0.39 loss per share, compared to a net loss of $9.0 million, or $0.49 loss per share reported for the same period in 2020. * EBITDA for the second quarter of 2021 was a loss of $11.3 million compared to an EBITDA loss of $3.5 million for the same period in 2020.** * Adjusted EBITDA for the second quarter of 2021 was a loss of $4.1 million compared to an Adjusted EBITDA loss of $1.8 million for the same period in 2020.** * Adjusted net loss for the second quarter of 2021 was $9.2 million, or $0.36 loss per share, compared to an adjusted net loss of $4.1 million, or $0.21 loss per share, for the same period in 2020.**

Summary of Year-to-Date Financial Results

* Revenues were reported at $123.4 million for the six months ended June 30, 2021, an increase of 22.9% when compared to $100.4 million for the same period in 2020. * Net loss for the six months ended June 30, 2021 was $18.2 million, or $0.77 loss per share, compared to a net loss of $19.9 million, or $1.10 loss per share reported for the same period in 2020. * EBITDA for the six months ended June 30, 2021 was a loss of $14.5 million compared to an EBITDA loss of $15.5 million for the same period in 2020.** * Adjusted EBITDA for the six months ended June 30, 2021 was a loss of $8.9 million compared to an Adjusted EBITDA loss of $3.9 million for the same period in 2020.** * Adjusted net loss for the six months ended June 30, 2021 was $16.7 million, or $0.70 loss per share, compared to an adjusted net loss of $8.6 million, or $0.47 loss per share, for the same period in 2020.**

___________________

* Annualized Recurring Revenue, or ARR, represents all revenues derived fromsoftware as a service and related recurring support services for the last monthin each quarter multiplied by 12. ARR is a key performance indicator we use tohelp us evaluate our business and measure our performance. ARR also providesour investors with an additional measure to evaluate the performance of oursoftware business. ARR is not, however, a substitute for GAAP revenue and it isnot predictive of our future software subscription revenues.



** A reconciliation and description of non-GAAP financial measures tocorresponding GAAP financial measures are included in the tables at the end ofthis press release.

PAR Technology CEO, Savneet Singh commented, "Our unified commerce cloud platform continues to drive our improved performance and our cloud solutions are garnering interest from both new and current customers as they focus on using technology to improve the customer experience in quick serve and fast casual restaurants. In spite of challenges with the global supply chains, we reported increased bookings and activations from the same period one year ago. Punchh, our newly acquired loyalty and customer engagement solution will be a significant growth driver of our combined software business with a reported ARR at the end of the second quarter of $40.3 million. Brink bookings and activations improved from the second quarter a year ago in spite of challenges within the global supply chain."

Singh continued, "Our focus and efforts are to scale our software business quickly and to enhance our annual recurring revenue. Our combined ARR at the end of Q2 now totals $76.7 million, a 166% increase from the end of Q2 last year with the addition of Punchh, and we are well positioned to continue on this favorable trajectory. If including Punchh Q2' 2020 revenue, the combined ARR growth would be 42.5%. Q3 activations for Brink have gotten off to a strong start and we expect that to continue. Additionally, our acquisition pipeline remains active and strong as we look to continue to build out our unified commerce cloud platform."

Highlights of Brink - Second Quarter 2021:

* Brink ARR at end of Q2 '21 totaled $27.6 million * New store activations in Q2 '21 totaled 1,099 sites * Brink bookings in Q2 '21 totaled 1,012 sites * Brink Open Orders (backlog) totaled 3,119 sites at end of Q2 '21 * Active Brink sites as of June 30, 2021 totaled 13,234 restaurants

Highlights of Punchh - Second Quarter 2021:

* Punchh ARR at end of Q2 '21 totaled $40.3 million / contracted ARR at end of Q2 '21 totaled $60.5 million * New store activations in Q2 '21 totaled 2,774 sites * Active Punchh sites as of June 30, 2021 totaled 48,376 restaurants

Conference Call.

There will be a conference call at 4:30 p.m. (Eastern) on August 9, 2021, during which the Company's management will discuss the financial results for the second quarter ended June 30, 2021. To participate in the call, please call 844-419-5412, approximately 10 minutes in advance. No passcode is required to participate in the live call or to listen to the replay version. Investors will have the opportunity to listen to the conference call/event over the internet by visiting the Company's website at https://www.partech.com/about-us/investor-relations/. Alternatively, listeners may access an archived version of the presentation call after 7:30 p.m. on August 9, 2021 through August 16, 2021 by dialing 855-859-2056 and using conference ID 5306708.

About PAR Technology Corporation.

For more than 40 years, PAR's (NYSE: PAR) cutting-edge products and services have helped bold and passionate restaurant brands build lasting guest relationships. We are the partner enterprise restaurants rely on when they need to serve amazing moments from open to close, during the most hectic rush hours, and when the world forces them to adapt and overcome. More than 100,000 restaurants in more than 110 countries use PAR's restaurant hardware, software, drive-thru, and back-office solutions. With the recent acquisition of Punchh Inc. ("Punchh"), a leading SaaS-based customer loyalty solutions provider, PAR has become a unified commerce cloud platform for enterprise restaurants. To learn more, visit www.partech.com or connect with us on LinkedIn, Twitter, Facebook, and Instagram.

Forward-Looking Statements.

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, Section 27A of the Securities Act of 1933, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of our future operations, financial condition, business strategies and prospects. Forward-looking statements are generally identified by words such as "anticipate," "believe," "belief," "continue," "could," "expect," "estimate," "intend," "may," "opportunity," "plan," "should," "will," "would," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in or implied by forward-looking statements contained in this press release, including forward-looking statements relating to and our expectations regarding the Punchh business and the anticipated benefits of such acquisition, and the impact of the COVID-19 pandemic, including the new Delta variant, on our business, operations, financial condition, and financial results. Factors that could cause our actual results to differ materially from those expressed in or implied by forward-looking statements contained in this press release, include but are not limited to, those described in our filings with the Securities and Exchange Commission.

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share and per share amounts)

Assets June 30, December 2021 31, 2020

Current assets:

Cash and cash equivalents $ 85,218 $ 180,686

Accounts receivable - net 45,248 42,980

Inventories - net 29,947 21,638

Other current assets 16,592 3,625

Total current assets 177,005 248,929

Property, plant and equipment - net 14,006 13,856

Goodwill 458,773 41,214

Intangible assets - net 130,726 33,121

Lease right-of-use assets 4,779 2,569

Other assets 12,386 4,060

Total assets $ 797,675 $ 343,749

Liabilities and Shareholders' Equity

Current liabilities:

Current portion of long-term debt $ 685 $ 666

Accounts payable 21,822 12,791

Accrued salaries and benefits 16,225 13,190

Accrued expenses 5,172 2,606

Lease liabilities - current portion 1,865 1,200

Customer deposits and deferred service revenue 14,584 9,506

Total current liabilities 60,353 39,959

Lease liabilities - net of current portion 3,322 1,462

Deferred service revenue - noncurrent 5,234 3,082

Long-term debt 279,087 105,844

Other long-term liabilities 13,118 4,997

Total liabilities 361,114 155,344

Commitments and contingencies (Note 11)

Shareholders' equity:

Preferred stock, $.02 par value, 1,000,000 shares - - authorized, none outstanding

Common stock, $.02 par value, 58,000,000 sharesauthorized, 26,998,216 and 22,982,955 shares issued, 540 459 25,848,889 and 21,917,357 outstanding at June 30,2021 and December 31, 2020, respectively

Additional paid in capital 514,295 243,575

Accumulated deficit (64,933) (46,706)

Accumulated other comprehensive loss (3,883) (3,936)

Treasury stock, at cost, 1,149,327 shares and1,065,598 shares at June 30, 2021 and December 31, (9,458) (4,987) 2020, respectively

Total shareholders' equity 436,561 188,405

Total Liabilities and Shareholders' Equity $ 797,675 $ 343,749

See notes to unaudited interim condensed consolidated financial statements included in the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2021 (the "Quarterly Report").

PAR TECHNOLOGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)

Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

Net revenues:

Product $ 23,939 $ 12,333 $ 42,495 $ 30,967

Service 27,185 15,300 45,213 34,075

Contract 17,826 18,058 35,709 35,381

68,950 45,691 123,417 100,423

Costs of sales:

Product 18,487 9,982 33,372 24,887

Service 18,940 9,912 31,635 22,558

Contract 16,420 16,718 33,107 32,852

53,847 36,612 98,114 80,297

Gross margin 15,103 9,079 25,303 20,126

Operating expenses:

Selling, general and 22,946 10,049 37,483 21,476 administrative

Research and development 8,643 4,538 14,452 9,403

Amortization of identifiable 489 210 764 420 intangible assets

Gain on insurance proceeds - - (4,400) -

32,078 14,797 48,299 31,299

Operating loss (16,975) (5,718) (22,996) (11,173)

Other expense - net (341) (139) (392) (764)

Loss on extinguishment of - - - (8,123) debt

Interest expense - net (4,937) (2,111) (7,097) (4,083)

Loss before provision for (22,253) (7,968) (30,485) (24,143) income taxes

Benefit from (provision for) 12,297 (1,008) 12,258 4,257 income taxes

Net loss $ (9,956) (8,976) (18,227) (19,886)

Net loss per share (basic $ (0.39) $ (0.49) $ (0.77) $ (1.10) and diluted)

Weighted average sharesoutstanding (basic and 25,484 18,244 23,716 18,092 outstanding)

See notes to unaudited interim condensed consolidated financial statements included in the Quarterly Report.

PAR TECHNOLOGY CORPORATION

SUPPLEMENTAL INFORMATION (Unaudited)

The following table sets forth certain unaudited supplemental financial data for the periods indicated (in thousands):

Segment Revenue by product line trailing six quarters are set forth below:

2021 2020

Q2 Q1 Q4 Q3 Q2 Q1

Restaurant/ Retail

Hardware $ 23,355 $ 17,835 $ 21,595 $ 20,168 $ 12,129 $ 18,137

Software 15,100 7,876 6,665 6,798 5,977 6,944

Services 12,669 10,873 11,863 10,381 9,527 12,328

TotalRestaurant $ 51,124 $ 36,584 $ 40,123 $ 37,347 $ 27,633 $ 37,409 Retail



Government

Intelligence,Surveillance, $ 9,284 $ 9,547 $ 9,990 $ 8,943 $ 9,741 $ 8,772 andReconnaissance

Mission 8,338 8,131 8,328 8,084 8,088 8,448 Systems

Product 204 205 75 473 229 103 Services

Total $ 17,826 $ 17,883 $ 18,393 $ 17,500 $ 18,058 $ 17,323 Government



Total Revenue $ 68,950 $ 54,467 $ 58,516 $ 54,847 $ 45,691 $ 54,732

About Non-GAAP Financial Measures

The Company reports its financial results in accordance with GAAP. However, non-GAAP adjusted financial measures, as set forth in the reconciliation tables below, are provided because management uses these non-GAAP financial measures in evaluating the results of the Company's continuing operations and believes this information provides investors supplemental insight into underlying business trends and operating results. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. While we believe that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. In addition, these non-GAAP financial measures should be read in conjunction with the Company's consolidated interim condensed financial statements prepared in accordance with GAAP.

Within this press release, we make reference to EBITDA, adjusted EBITDA, and adjusted net loss which are non-GAAP financial measures. EBITDA represents net loss before income taxes, interest expense and depreciation and amortization. Adjusted EBITDA and adjusted net less, net of tax, represent EBITDA as adjusted to exclude certain non-cash and non-recurring charges, including stock-based compensation, acquisition and integration expense, certain pending litigation expenses and other non-recurring charges that may not be indicative of the Company's financial performance.

We are presenting adjusted EBITDA and adjusted net loss because we believe that they provide a more meaningful comparison than EBITDA and net loss of the Company's core business operating results and those of other similar companies. Management believes that adjusted EBITDA and adjusted net loss, when viewed with the Company's results of operations in accordance with GAAP and the accompanying reconciliations in the tables below, provide useful information about operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of the Company's core business without regard to potential distortions. Additionally, management believes that adjusted EBITDA permits investors to gain an understanding of the factors and trends affecting its ongoing cash earnings, from which capital investments are made and debt is serviced.

However, EBITDA, adjusted EBITDA and adjusted net loss are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income (loss) from operations or cash flow from operating activities as indicators of operating performance or liquidity. Also, these measures may not be comparable to similarly titled captions of other companies. The tables below provide reconciliations between net loss and EBITDA, adjusted EBITDA and adjusted net loss.

The Company's results of operations are impacted by certain non-cash and non-recurring charges, including stock-based compensation, acquisition and divestiture related expenditures, expense related to the Company's efforts to resolve matters associated with conduct in its China and Singapore offices, which was the focus of an investigation undertaken by our Audit Committee in 2016 (the "China/Singapore matter"), and other non-recurring charges that may not be indicative of the Company's financial performance. Management believes that adjusting its costs of sales, operating expenses, operating loss, net loss and diluted loss per share to remove non-recurring charges, provides a useful perspective with respect to the Company's operating results and provides supplemental information to both management and investors by removing items that are difficult to predict and are often unanticipated.

The following tables set forth certain unaudited supplemental financial and other data for the periods indicated (in thousands, except per share and footnote amounts):

Three Months Ended June 30,

2021 2020

Reconciliation of EBITDA and Adjusted EBITDA

Net loss $ (9,956) $ (8,976)

Benefit from (provision for) income taxes (12,297) 1,008

Interest expense 4,937 2,111

Depreciation and amortization 6,060 2,353

EBITDA $ (11,256) $ (3,504)

Stock-based compensation expense (1) 4,251 1,123

China/Singapore expense (2) (225) 121

Pending litigation expense (3) 125 -

Severance (4) - 359

Acquisition costs (5) 2,702 -

Other expense - net (6) 341 139

Adjusted EBITDA $ (4,062) $ (1,762)

1

Adjustments reflect stock-based compensation expense within selling, general and administrative expenses and cost of contracts for the three months ended June 30, 2021 and 2020 of $4.3 million and $1.1 million, respectively.

2

Adjustment reflects the expenses related to the resolution of China/Singapore matter of ($0.2) million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively.

3

Adjustment reflects the resolution of a pending legal matter of $0.1 million for the three months ended June 30, 2021.

4

Adjustment reflects the severance included in gross margin, selling, general and administrative expense and research and development expense of $0.4 million for the three months ended June 30, 2020.

5

Adjustment reflects the expenses incurred in the acquisition transaction related to Punchh of $2.7 million for the three months ended June 30, 2021.

6

Adjustment reflects foreign currency transaction gains and losses and rental income and losses are recorded in other expense, net in the accompanying statements of operations.

Adjustments reflect stock-based compensation expense within selling,1 general and administrative expenses and cost of contracts for the three months ended June 30, 2021 and 2020 of $4.3 million and $1.1 million, respectively.

Adjustment reflects the expenses related to the resolution of China/2 Singapore matter of ($0.2) million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively.

3 Adjustment reflects the resolution of a pending legal matter of $0.1 million for the three months ended June 30, 2021.

Adjustment reflects the severance included in gross margin, selling,4 general and administrative expense and research and development expense of $0.4 million for the three months ended June 30, 2020.

5 Adjustment reflects the expenses incurred in the acquisition transaction related to Punchh of $2.7 million for the three months ended June 30, 2021.

Adjustment reflects foreign currency transaction gains and losses and6 rental income and losses are recorded in other expense, net in the accompanying statements of operations.

Three Months Ended June 30,

2021

2020

Reconciliation of Adjusted Diluted Loss Per Share:

Net loss / Diluted Loss Per Share

$

(9,956)

$

(0.39)

$

(8,976)

$

(0.49)

Benefit from (provision for) income taxes (1)

(12,360)

(0.49)

978

0.05

Non-cash interest expense (2)

1,737

0.07

1,102

0.07

Acquired intangible assets amortization (3)

4,212

0.17

1,038

0.06

Stock-based compensation expense (4)

4,251

0.17

1,123

0.06

China/Singapore expense (5)

(225)

(0.01)

121

0.01

Pending litigation expense (6)

125

-

-

-

Severance (7)

-

-

359

0.02

Acquisition costs (8)

2,702

0.11

-

-

Other expense - net (9)

341

0.01

139

0.01

Adjusted Net Loss / Adjusted Diluted Loss Per Share

$

(9,173)

$

(0.36)

$

(4,116)

$

(0.21)

Adjusted weighted average common shares outstanding

25,484

18,244

Three Months Ended June 30,

2021 2020

Reconciliation of Adjusted Diluted Loss Per Share:

Net loss / Diluted Loss Per Share $ (9,956) $ (0.39) $ (8,976) $ (0.49)

Benefit from (provision for) (12,360) (0.49) 978 0.05 income taxes (1)

Non-cash interest expense (2) 1,737 0.07 1,102 0.07

Acquired intangible assets 4,212 0.17 1,038 0.06 amortization (3)

Stock-based compensation expense 4,251 0.17 1,123 0.06 (4)

China/Singapore expense (5) (225) (0.01) 121 0.01

Pending litigation expense (6) 125 - - -

Severance (7) - - 359 0.02

Acquisition costs (8) 2,702 0.11 - -

Other expense - net (9) 341 0.01 139 0.01

Adjusted Net Loss / Adjusted $ (9,173) $ (0.36) $ (4,116) $ (0.21) Diluted Loss Per Share



Adjusted weighted average common 25,484 18,244 shares outstanding

1

Adjustment reflects a partial release of the Company's deferred taxed asset valuation allowance of $12.4 million related to the Punchh acquisition for the three months ended June 30, 2021; and, a reduction to the benefit of income taxes of $1.0 million for the three months ended June 30, 2020 related to the issuance of the 2.875% Convertible Senior Notes due 2026 (the "2026 Notes"). The income tax effect of this adjustment was not tax-effected due to the valuation allowance on all of our net deferred tax assets.

2

Adjustment reflects non-cash accretion of interest expense and amortization of issuance costs related to the 4.500% Convertible Senior Notes due 2024 (the "2024 Notes"), 2026 Notes and the senior secured term loan under the credit agreement the Company entered into with Owl Rock First Lien Master Fund, L.P. to fund a portion of the Punchh acquisition (the "Term Loan") of $1.7 million and $1.0 million for the three months ended June 30, 2021 and 2020, respectively.

3

Adjustment amortization expense of acquired developed technology within gross margin of $3.7 million and $0.8 million for the three months ended June 30, 2021 and 2020; and amortization expense of acquired intangible assets of $0.5 million and $0.2 million for the three months ended June 30, 2021 and 2020, respectively.

4

Adjustments reflect stock-based compensation expense within selling, general and administrative expenses and cost of contracts of $3.2 million for the three months ended June 30, 2021 and $1.1 million for the three months ended June 30, 2020.

5

Adjustment reflects the expenses related to the resolution of China/Singapore matter of ($0.2) million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively.

6

Adjustment reflects the resolution of a pending legal matter of $0.1 million for the three months ended June 30, 2021.

7

Adjustment reflects the severance included in gross margin, selling, general and administrative expense and research and development expense of $0.4 million for the three months ended June 30, 2020.

8

Adjustment reflects the expenses incurred in the acquisition transaction related to Punchh of $2.7 million for the three months ended June 30, 2021.

9

Adjustment reflects foreign currency transaction gains and losses and rental income and losses are recorded in other expense, net in the accompanying statements of operations.

Adjustment reflects a partial release of the Company's deferred taxed asset valuation allowance of $12.4 million related to the Punchh acquisition for the three months ended June 30, 2021; and, a reduction to the benefit of1 income taxes of $1.0 million for the three months ended June 30, 2020 related to the issuance of the 2.875% Convertible Senior Notes due 2026 (the "2026 Notes"). The income tax effect of this adjustment was not tax-effected due to the valuation allowance on all of our net deferred tax assets.

Adjustment reflects non-cash accretion of interest expense and amortization of issuance costs related to the 4.500% Convertible Senior Notes due 2024 (the "2024 Notes"), 2026 Notes and the senior secured term loan under the2 credit agreement the Company entered into with Owl Rock First Lien Master Fund, L.P. to fund a portion of the Punchh acquisition (the "Term Loan") of $1.7 million and $1.0 million for the three months ended June 30, 2021 and 2020, respectively.

Adjustment amortization expense of acquired developed technology within gross margin of $3.7 million and $0.8 million for the three months ended3 June 30, 2021 and 2020; and amortization expense of acquired intangible assets of $0.5 million and $0.2 million for the three months ended June 30, 2021 and 2020, respectively.

Adjustments reflect stock-based compensation expense within selling,4 general and administrative expenses and cost of contracts of $3.2 million for the three months ended June 30, 2021 and $1.1 million for the three months ended June 30, 2020.

Adjustment reflects the expenses related to the resolution of China/5 Singapore matter of ($0.2) million and $0.1 million for the three months ended June 30, 2021 and 2020, respectively.

6 Adjustment reflects the resolution of a pending legal matter of $0.1 million for the three months ended June 30, 2021.

Adjustment reflects the severance included in gross margin, selling,7 general and administrative expense and research and development expense of $0.4 million for the three months ended June 30, 2020.

8 Adjustment reflects the expenses incurred in the acquisition transaction related to Punchh of $2.7 million for the three months ended June 30, 2021.

Adjustment reflects foreign currency transaction gains and losses and9 rental income and losses are recorded in other expense, net in the accompanying statements of operations.

Six Months Ended June 30,

2021

2020

Reconciliation of EBITDA and Adjusted EBITDA

Net loss

$

(18,227)

$

(19,886)

Benefit from income taxes

(12,258)

(4,257)

Interest expense

7,097

4,083

Depreciation and amortization

8,870

4,537

EBITDA

$

(14,518)

$

(15,523)

Stock-based compensation expense (1)

5,571

2,212

China/Singapore expense (2)

50

126

Pending litigation expense (3)

600

-

Acquisition costs (4)

3,388

-

Gain on insurance proceeds (5)

(4,400)

-

Severance (6)

-

359

Loss on extinguishment of debt (7)

-

8,123

Other expense - net (8)

392

764

Adjusted EBITDA

$

(8,917)

$

(3,939)

Benefit from income taxes

Six Months Ended June 30,

2021 2020

Reconciliation of EBITDA and Adjusted EBITDA

Net loss $ (18,227) $ (19,886)

Benefit from income taxes (12,258) (4,257)

Interest expense 7,097 4,083

Depreciation and amortization 8,870 4,537

EBITDA $ (14,518) $ (15,523)

Stock-based compensation expense (1) 5,571 2,212

China/Singapore expense (2) 50 126

Pending litigation expense (3) 600 -

Acquisition costs (4) 3,388 -

Gain on insurance proceeds (5) (4,400) -

Severance (6) - 359

Loss on extinguishment of debt (7) - 8,123

Other expense - net (8) 392 764

Adjusted EBITDA $ (8,917) $ (3,939)

Benefit from income taxes

Adjustments reflect stock-based compensation expense within selling,1 general and administrative expenses and cost of contracts for the six months ended June 30, 2021 of $5.6 million and for the six months ended June 30, 2020 of $2.2 million.

Adjustment reflects the expenses related to the resolution of China/2 Singapore matter of $0.1 million for both the six months ended June 30, 2021 and 2020.

3 Adjustment reflects the resolution of a pending legal matter of $0.6 million for the six months ended June 30, 2021.

4 Adjustment reflects the expenses incurred in the acquisition transaction related to Punchh of $3.4 million for the six months ended June 30, 2021.

5 Adjustment represents the gain on insurance stemming from a legacy claim of $4.4 million for the six months ended June 30, 2021.

Adjustment reflects the severance included in gross margin, selling,6 general and administrative expense and research and development expense of $0.4 million for the three months ended June 30, 2020.

Adjustment reflects loss on extinguishment of debt related to the7 repurchase of approximately $66.3 million of the 2024 Notes of $8.1 million for the six months ended June 30, 2020.

Adjustment reflects foreign currency transaction gains and losses and8 rental income and losses are recorded in other expense, net in the accompanying statements of operations.

Six Months Ended June 30,

2021

2020

Reconciliation of Adjusted Diluted Loss Per Share:

Net loss / Diluted Loss Per Share

$

(18,227)

$

(0.77)

$

(19,886)

$

(1.10)

Benefit from income taxes (1)

(12,360)

(0.52)

(4,408)

(0.24)

Non-cash interest expense (2)

2,917

0.12

2,059

0.12

Acquired intangible assets amortization (3)

5,351

0.23

2,075

0.11

Stock-based compensation expense (4)

5,571

0.23

2,212

0.12

China/Singapore expense (5)

50

-

126

0.01

Pending litigation expense (6)

600

0.03

-

-

Acquisition costs (7)

3,388

0.14

-

-

Gain on insurance proceeds (8)

(4,400)

(0.19)

-

-

Severance (9)

-

-

359

0.02

Loss on extinguishment of debt (10)

-

-

8,123

0.45

Other expense - net (11)

392

0.03

764

0.04

Adjusted Net Loss / Adjusted Diluted Loss Per Share

$

(16,718)

$

(0.70)

$

(8,576)

$

(0.47)

Adjusted weighted average common shares outstanding

23,716

18,092

Six Months Ended June 30,

2021 2020

Reconciliation of Adjusted Diluted Loss Per Share:

Net loss / Diluted Loss Per $ (18,227) $ (0.77) $ (19,886) $ (1.10) Share

Benefit from income taxes (1) (12,360) (0.52) (4,408) (0.24)

Non-cash interest expense (2) 2,917 0.12 2,059 0.12

Acquired intangible assets 5,351 0.23 2,075 0.11 amortization (3)

Stock-based compensation 5,571 0.23 2,212 0.12 expense (4)

China/Singapore expense (5) 50 - 126 0.01

Pending litigation expense (6) 600 0.03 - -

Acquisition costs (7) 3,388 0.14 - -

Gain on insurance proceeds (8) (4,400) (0.19) - -

Severance (9) - - 359 0.02

Loss on extinguishment of debt - - 8,123 0.45 (10)

Other expense - net (11) 392 0.03 764 0.04

Adjusted Net Loss / Adjusted $ (16,718) $ (0.70) $ (8,576) $ (0.47) Diluted Loss Per Share



Adjusted weighted average 23,716 18,092 common shares outstanding

1

Adjustment reflects a partial release of the Company's deferred taxed asset valuation allowance of $12.4 million related to the Punchh acquisition for the six months ended June 30, 2021; and, a reduction to the benefit of income taxes of $4.4 million for the six months ended June 30, 2020 related to the issuance of the 2.875% Convertible Senior Notes due 2026 and partial repurchase of the 4.500% Convertible Senior Notes due 2024. The income tax effect of this adjustment was not tax-effected due to the valuation allowance on all of our net deferred tax assets.

2

Adjustment reflects non-cash accretion of interest expense and amortization of issuance costs related to the 2024 Notes, the 2026 Notes and the Term Loan of $2.9 million and $2.1 million for the six months ended June 30, 2021 and 2020, respectively.

3

Adjustment amortization expense of acquired developed technology within gross margin of $4.6 million and $1.7 million for the six months ended June 30, 2021 and 2020, respectively; and amortization expense of acquired intangible assets of $0.8 million and $0.4 million for the six months ended June 30, 2021 and 2020, respectively.

4

Adjustments reflect stock-based compensation expense within selling, general and administrative expenses and cost of contracts for the six months ended June 30, 2021 of $5.6 million and for the six months ended June 30, 2020 of $2.2 million.

5

Adjustment reflects the expenses related to the resolution of China/Singapore matter of $0.1 million for both the six months ended June 30, 2021 and 2020.

6

Adjustment reflects the resolution of a pending legal matter of $0.6 million for the six months ended June 30, 2021.

7

Adjustment reflects the expenses incurred in the acquisition transaction related to Punchh of $3.4 million for the six months ended June 30, 2021.

8

Adjustment represents the gain on insurance stemming from a legacy claim of $4.4 million for the six months ended June 30, 2021.

9

Adjustment reflects the severance included in gross margin, selling, general and administrative expense and research and development expense of $0.4 million for the six months ended June 30, 2020.

10

Adjustment reflects loss on extinguishment of debt related to the repurchase of approximately $66.3 million of the 2024 Notes of $8.1 million for the six months ended June 30, 2020.

11

Adjustment reflects foreign currency transaction gains and losses and rental income and losses are recorded in other expense, net in the accompanying statements of operations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005752/en/

CONTACT: Christopher R. Byrnes (315) 738-0600 ext. 6226 cbyrnes@partech.com, www.partech.com