PAR - PAR Technology Corporation

[cameronfen]

This provides a decent list of POS competitors. Seems like there are a lot of decent ones (not all listed seem to be perfect comps). Why does Brink continue to grow at a fast rate amongst all the competition?

 

https://www.g2.com/categories/restaurant-pos

 

Been trying to wrap my head around that question too. From everything I read online, it actually seems like their product is worse vs. Toast / Revel. However, the bull argument is that the other competitors can't really scale on an enterprise level, whereas Brink is pretty much solely focused on that. If I recall, Toast's largest customer is JambaJuice, so there could be some merit to this argument.

 

The online articles are also probably catered to a mom-and-pop operator, so it could be true that Toast and Revel are better for them.

 

Wherecyou getting your information that Brink is growing fastest?  Everyone else is basically private so its hard to compare afaik.  This might be a year or so ouy of date, but I wouldn't be surprised if Toast is growing faster than Brink.  I think its the land grab nature of the industry and the high growth rates of Brink just a symptom of industry-wide factors that are lifting all boats. 

[stahleyp]

Anyone know Voss capital's performance?

 

Their 2017 pitch deck for PAR says their long portfolio has done 29% CAGR on since 2011.

 

One of their guys used to post on here as Southpaw (check out the QHR and QIS threads).

 

Interesting. Thanks!

[spartansaver]

This provides a decent list of POS competitors. Seems like there are a lot of decent ones (not all listed seem to be perfect comps). Why does Brink continue to grow at a fast rate amongst all the competition?

 

https://www.g2.com/categories/restaurant-pos

 

Been trying to wrap my head around that question too. From everything I read online, it actually seems like their product is worse vs. Toast / Revel. However, the bull argument is that the other competitors can't really scale on an enterprise level, whereas Brink is pretty much solely focused on that. If I recall, Toast's largest customer is JambaJuice, so there could be some merit to this argument.

 

The online articles are also probably catered to a mom-and-pop operator, so it could be true that Toast and Revel are better for them.

 

Wherecyou getting your information that Brink is growing fastest?  Everyone else is basically private so its hard to compare afaik.  This might be a year or so ouy of date, but I wouldn't be surprised if Toast is growing faster than Brink.  I think its the land grab nature of the industry and the high growth rates of Brink just a symptom of industry-wide factors that are lifting all boats.

 

I never said that it was growing fastest, simply it is growing fast with a lot of competition. To assume high rates of growth, you have to assume Brink continues winning over large POS contracts. POS systems are nothing new, and there is plenty of competition; so why are these guys going to be the ones take share?

[cameronfen]

This provides a decent list of POS competitors. Seems like there are a lot of decent ones (not all listed seem to be perfect comps). Why does Brink continue to grow at a fast rate amongst all the competition?

 

https://www.g2.com/categories/restaurant-pos

 

Been trying to wrap my head around that question too. From everything I read online, it actually seems like their product is worse vs. Toast / Revel. However, the bull argument is that the other competitors can't really scale on an enterprise level, whereas Brink is pretty much solely focused on that. If I recall, Toast's largest customer is JambaJuice, so there could be some merit to this argument.

 

The online articles are also probably catered to a mom-and-pop operator, so it could be true that Toast and Revel are better for them.

 

Wherecyou getting your information that Brink is growing fastest?  Everyone else is basically private so its hard to compare afaik.  This might be a year or so ouy of date, but I wouldn't be surprised if Toast is growing faster than Brink.  I think its the land grab nature of the industry and the high growth rates of Brink just a symptom of industry-wide factors that are lifting all boats.

 

I never said that it was growing fastest, simply it is growing fast with a lot of competition. To assume high rates of growth, you have to assume Brink continues winning over large POS contracts. POS systems are nothing new, and there is plenty of competition; so why are these guys going to be the ones take share?

 

The arent taking share with respect to players like Toast, Aloha etc.  Im not entirely sure of the dynamics because im not long so take that into account, but there is a secular migration from premise based systems like I assume companies that NCR probably offers, (and maybe non restaurant POS systems like Square) and cloud based solutions like Brink.  With cloud systems upgrading and adding new features only involves changing software and not actually going to each store and upgrading systems so they can push features quicker and less expensively. 

 

If you want to look at more mature examples of this same dynamic look at square disruption of general retail POS, or Stoneco and Pagseguro disruption of the Brazilian payments market.  I dont know for sure, but based on those market dynamics and some personal information with respect to toast, I think any cloud restaurant POS system with a heart beat is growing at least by low double digits as they take share from legacy players.  Brink is maybe more well known than many of the players, but the growth is by no means extraordinary for the business. 

 

As a sidenote, you can look at other markets to understand other dynamics of the business like for example all the money (at least in adjacent markets) seems to be in payments and capital (AR loans etc).  Everything else seems like a loss leader to make the use of a company's playment platform more attractive. 

[Spekulatius]

So I listed to Singh’s podcast  and he talks faster than an annuity salesman. Apparently has has done dozens of things already at his young age, so it’s save to assume he won’t stock around.

 

Current investor presentation appears to have plenty of grammar and spelling errors or maybe it’s just me:

https://www.partech.com/about-us/investors/ (losing site or losing sight? Etc).

 

Raised money using convertible debt and company is cash flow negative. Wants to build the Berkshire of software - another yellow flag.

 

Just a grumpy man’s assessment. I will put this on my watchlist, it will be interesting to see how it does.

[stahleyp]

anyone concerned that Singh only has about $500,000 worth of stock?

 

He makes almost that per year.

[whistlerbumps]

anyone concerned that Singh only has about $500,000 worth of stock?

 

He makes almost that per year.

 

He also has 80k restricted stock that will vest based on performance (worth ~$1.8mln at current levels) and is eligible to receive 90k of restricted in both 2020 and 2021 (worth a total of $4mln at current levels).  If he pulls off the plan, I think those shares will have value worth multiples of his current salary.

 

 

[stahleyp]

anyone concerned that Singh only has about $500,000 worth of stock?

 

He makes almost that per year.

 

He also has 80k restricted stock that will vest based on performance (worth ~$1.8mln at current levels) and is eligible to receive 90k of restricted in both 2020 and 2021 (worth a total of $4mln at current levels).  If he pulls off the plan, I think those shares will have value worth multiples of his current salary.

 

Thanks.

 

Hmmm...not sure how I feel about this. Though I know it's common for most companies. If he does well, he makes out like a bandit. If he fails, he won't be hurt much.

[BG2008]

So I listed to Singh’s podcast  and he talks faster than an annuity salesman. Apparently has has done dozens of things already at his young age, so it’s save to assume he won’t stock around.

 

Current investor presentation appears to have plenty of grammar and spelling errors or maybe it’s just me:

https://www.partech.com/about-us/investors/ (losing site or losing sight? Etc).

 

Raised money using convertible debt and company is cash flow negative. Wants to build the Berkshire of software - another yellow flag.

 

Just a grumpy man’s assessment. I will put this on my watchlist, it will be interesting to see how it does.

 

Met him at the Sidoti conference.  He has ADHD and couldn't stop looking at his phone.  He literally would stop our conversation to make a call.  He's either a visionary or a wacko.  He does not live in middle ground. 

[Foreign Tuffett]

So I listed to Singh’s podcast  and he talks faster than an annuity salesman. Apparently has has done dozens of things already at his young age, so it’s save to assume he won’t stock around.

 

Current investor presentation appears to have plenty of grammar and spelling errors or maybe it’s just me:

https://www.partech.com/about-us/investors/ (losing site or losing sight? Etc).

 

Raised money using convertible debt and company is cash flow negative. Wants to build the Berkshire of software - another yellow flag.

 

Just a grumpy man’s assessment. I will put this on my watchlist, it will be interesting to see how it does.

 

Yeah, the presentation is oddly typo-ridden. This sentence from page 15 is a good example:

 

Our ability to acquire or partner which of these categories accelerates daily, as restaurant continue to update their tech stack

 

Definitely subPAR for a company with a market cap measured in the hundreds of millions.

[Casey]

I have not met him. Searched for videos of Savneet based on a few of these comments about personality... Top couple:

 

*

(2 minutes)

 

*

(10 minutes)

 

Longer gold one is interesting. He does speak very quickly. Appreciate folks sharing what they think might be the negative aspects.

[Spekulatius]

So I listed to Singh’s podcast  and he talks faster than an annuity salesman. Apparently has has done dozens of things already at his young age, so it’s save to assume he won’t stock around.

 

Current investor presentation appears to have plenty of grammar and spelling errors or maybe it’s just me:

https://www.partech.com/about-us/investors/ (losing site or losing sight? Etc).

 

Raised money using convertible debt and company is cash flow negative. Wants to build the Berkshire of software - another yellow flag.

 

Just a grumpy man’s assessment. I will put this on my watchlist, it will be interesting to see how it does.

 

Met him at the Sidoti conference.  He has ADHD and couldn't stop looking at his phone.  He literally would stop our conversation to make a call.  He's either a visionary or a wacko.  He does not live in middle ground.

 

Thanks for the color on Singh. After listening to the podcast, I thought he might have ADHD, but didn’t want to overextend. This doesn’t mean that he isn’t successful, but if you combine this with the sloppy IR presentation, I think it elevates the risk that things may go wrong.

[BG2008]

So I listed to Singh’s podcast  and he talks faster than an annuity salesman. Apparently has has done dozens of things already at his young age, so it’s save to assume he won’t stock around.

 

Current investor presentation appears to have plenty of grammar and spelling errors or maybe it’s just me:

https://www.partech.com/about-us/investors/ (losing site or losing sight? Etc).

 

Raised money using convertible debt and company is cash flow negative. Wants to build the Berkshire of software - another yellow flag.

 

Just a grumpy man’s assessment. I will put this on my watchlist, it will be interesting to see how it does.

 

Met him at the Sidoti conference.  He has ADHD and couldn't stop looking at his phone.  He literally would stop our conversation to make a call.  He's either a visionary or a wacko.  He does not live in middle ground.

 

Thanks for the color on Singh. After listening to the podcast, I thought he might have ADHD, but didn’t want to overextend. This doesn’t mean that he isn’t successful, but if you combine this with the sloppy IR presentation, I think it elevates the risk that things may go wrong.

 

Another way of thinking about his action is that he actually runs a company now that is undergoing a lot of change.  This is a fast moving business unlike a rock quarry where you collect a royalty check.  Par is trying to grow and add on services and deliver the functionalities that they promised their customers.  He might've literally been putting out fire with the phone calls.  But there is certainly a disdain for people who are not familiar with the story and a lack of understanding for shareholders who haven't done their homework which I admittedly isn't the most versed in their story and theme. 

[CookingByTheNumbers]

For those of you questioning Savneet Singh's ability to grow PAR - this should be a good primer on his managing prowess.

 

http://investorfieldguide.com/savneet/

 

Yeah, he's probably got ADHD, but he is also highly successful at a relatively young age.

 

[Guest roark33]

calling yourself the berkshire of anything seems to be a red flag. 

[Spekulatius]

calling yourself the berkshire of anything seems to be a red flag.

 

+1

[Casey]

Up about 14% today.

 

They also announced the acquisition of Restaurant Magic. Basically a laundry list of back-office functionality that they wanted:

 

-Inventory Management

-Food Management

-Labor & Scheduling

-Enterprise Reporting

-Enterprise Analytics

 

https://www.restaurantmagic.com/

 

[wisowis]

They've also entered into an agreement to sell SureCheck: https://www.businesswire.com/news/home/20191030006166/en/Procurant-acquires-SureCheck

[ArminvanBuyout]

Also said they signed their first legacy Tier 1 client as well as a re-acceleration of Brink installs. Overall strong quarter from a growth perspective and adds some foundation to the story.

[Casey]

I was wondering what their approach to "cloud kitchens" would be. Hopefully this gets some traction.

 

https://finance.yahoo.com/news/par-technology-announces-release-brink-123000275.html

[ArminvanBuyout]

Brink adds fraud support. Another notch in the goal of expanding the back-office support.

 

https://www.businesswire.com/news/home/20191213005048/en/March-Networks-Spendgo-Integrate-PAR-Technology’s-Cloud-Based

 

[Casey]

Just bought back some shares that I'd sold recently. Stock is down ~5% because of a convertible note offering. Which I know is boring with TSLA up or down 20% a day, but hey.

 

https://www.businesswire.com/news/home/20200204005987/en/PAR-Technology-Corporation-Announces-Proposed-Offering-90

 

Now positioning Brink as an "Integration Ecosystem", which I thought was interesting:

 

"PAR’s Brink integration ecosystem enables quick service, fast casual, table service, and cloud restaurants to improve their operational efficiency by combining its cloud-based POS software with the world’s leading restaurant technology platforms."

[Tompety03]

I am moving quickly here to research names, so excuse the lack of analytical rigor, but would love any feedback on this.  I am also borrowing some metrics from ADW/Greenhaven.

 

They primarily focus on fast casual and QSR, which will fair better than overall restaurants in a recession as people trade down or even in a drawn out situation with the coronavirus.  Their software and POS systems are also the backbone of a restaurant, so even if traffic is down substantially, restaurants will keep paying. 

 

There is also the "jockey bet" that Savneet, who seems smart/energetic can help navigate this situation - make acquisitions, pivot/focus on new wins in restaurant sub-sectors and geographies that are less impacted by the virus.

 

I have seen approximate values for the non Brink business to be worth ~$200mm, so you are getting the Brink business for a very low revenue multiple.  Growth in the short-term will be impacted, but the long-term opportunity is intact (unless you assume people really stop going out to QSRs).

 

Any thoughts are welcome.

 

Thanks,

Chris

 

[KJP]

I am moving quickly here to research names, so excuse the lack of analytical rigor, but would love any feedback on this.  I am also borrowing some metrics from ADW/Greenhaven.

 

They primarily focus on fast casual and QSR, which will fair better than overall restaurants in a recession as people trade down or even in a drawn out situation with the coronavirus.  Their software and POS systems are also the backbone of a restaurant, so even if traffic is down substantially, restaurants will keep paying. 

 

There is also the "jockey bet" that Savneet, who seems smart/energetic can help navigate this situation - make acquisitions, pivot/focus on new wins in restaurant sub-sectors and geographies that are less impacted by the virus.

 

I have seen approximate values for the non Brink business to be worth ~$200mm, so you are getting the Brink business for a very low revenue multiple.  Growth in the short-term will be impacted, but the long-term opportunity is intact (unless you assume people really stop going out to QSRs).

 

Any thoughts are welcome.

 

Thanks,

Chris

 

My knowledge of this company is dated.  What is the non-Brink business at this point?  I believe I recall reading that SureCheck was either sold or shut down.  So, is the remaining non-Brink the entirely unrelated defense/government contracting business and the point-of-sale hardware business?

[whistlerbumps]

I think 200mln might be high.  Surecheck has already been sold

 

The most saleable asset is government which is probably worth 70-80mln and is probably sold in the next year or so which is a little over 1x TTM sales.  Some people believe 100mln is possible but that seems a bit high to me.

 

Outside of that, you have legacy PAR which is hardware and pixelpoint software.  Assuming a 0.5x multiple on 90mln of TTM + 3M DTC revs would be another 45mln.  I think its a lot less likely that this actually gets sold given that there are real synergies of selling hardware along with Brink software.

 

So together you probably have ~120mln of value which leaves ~140mln for Brink and Restaurant magic or 3.6x 2020 ARR of ~48mln (26mln Brink +12mln RM).

 

That's at least my rough estimates.  Hope that helps.