Park City Group, Inc. (NASDAQ: PCYG), the parent company of ReposiTrak,
Inc., which operates a B2B ecommerce, compliance and supply chain
platform that partners with retailers, wholesalers, and their suppliers,
to accelerate sales, control risk and improve supply chain efficiencies,
announced financial results for the third fiscal quarter ended March 31,
2019.
Third Fiscal Quarter Financial and Recent Business Highlights:
-
Net Income tripled to $921,000, Operating Cash Flow of $1.65
million drove cash to $18.1 million. -
MarketPlace Similar Supplier use case launched with more than
20,000 category participants. -
Compliance connections reach 84,000 for 342,000 total connections
across all applications. -
Supply Chain and Compliance trends positive with recurring revenues
up year-over-year.
“We made significant progress with MarketPlace, leveraging on our early
successes to launch our most important use case, Similar Supplier, which
enables the replacement of non-compliant suppliers,” said Randall K.
Fields, Chairman and CEO of Park City Group. “This required our
development team to successfully launch sophisticated capabilities that
allow a retail or wholesale HUB to search our entire Compliant Supplier
base, and the Customer Success Team to reach out to literally thousands
of suppliers to help them to add supplementary information about the
products they sell. As a result of these efforts, we were able to launch
Similar Supplier with over 20,000 category participants, giving us the
largest database linking suppliers’ products and compliance, enhancing
the value of our platform for all industry participants.”
“The launch of MarketPlace Similar Supplier was a herculean effort
involving everyone on the team,” added Fields. “And while we were
executing on this initiative, we also substantially reorganized our
salesforce, moved our corporate headquarters, and more than doubled the
capacity of our data center. The salesforce reorganization better aligns
the team to our converged application platform and will enable cross
selling and increased the adoption of more services per customer, while
the move to a new headquarters and the upgrade or our data center
doubles the space to grow our Customer Success Team and increases the
capacity to handle our scaled MarketPlace application. Revenue from net
new customer additions was held back as a result of these initiatives;
however, the Company is now positioned for growth for years to come.”
“While expanding MarketPlace’s use cases and enhancing our operational
capabilities, we never lost sight of our commitment to our customers’
success,” continued Fields. ”We reached 84,000 Compliance connections.
With growth in Supply Chain, total connections are now 342,000.
Compliance levels for existing customers grew, as did recurring revenue.
Importantly, we also launched an initiative, backed by the Federation of
Wholesale Distributors, to make ReposiTrak the industry standard for
food safety compliance in the U.K.. And with all of this going on, we
tripled net income and delivered record operating cash flow, ending the
quarter with over $18 million in cash. In short, the core is gaining
strength, and the moat around our business gives us the ability to scale
strategically while generating quarterly profitability.”
“This was an important quarter for the Company. It was imperative that
MarketPlace be able to help solve the problems our Compliance service
identifies, and that we are better prepared to cross sell our
applications and scale our business. We remain confident in our
converged platform strategy. We are unique in our capabilities to help
retailers or wholesaler manage their relationships with their suppliers
across the entire workflow of the supply chain from sourcing a supplier,
to vetting that supplier, and then transacting with them efficiently.
This end-to-end capability positions us as the only company capable of
enhancing these customers’ competitive position by allowing them to make
rapid sourcing decisions, diversifying their product line-ups, and
enabling them to compete better in a post-Amazon world.”
Financial Results Summary:
Third Fiscal Quarter 2019 Results: Total revenue declined 5% to $5.0
million for the three months ended March 31, 2019, as compared to $5.3
million during the same period a year ago primarily due to lower
revenues from new implementations and a year-over-year decline in
MarketPlace revenue. Total operating expenses were $4.0 million, an 18%
decrease from $4.8 million a year ago, as the Company is leveraging
investments made in increasing productivity. GAAP net income was $1.1
million, or 21% of revenue, versus $457,000, or 9% of revenue, a year
ago, and GAAP net income to common shareholders was $921,000, or $0.05
per diluted share, compared to $311,000, or $0.02 per diluted share, a
year ago.
Fiscal 2019 To Date Results: Total revenue increased 5% to $16.5 million
for the nine months ended March 31, 2019, as compared to $15.7 million
during the same period a year ago primarily due to an increase in
subscription revenues for the Company’s Compliance and Supply chain
services. Total operating expenses were $12.8 million, a 5% decrease
from $13.5 million a year ago, as the Company is leveraging investments
made in increasing productivity. GAAP net income was $3.7 million, or
23% of revenue, versus $2.1 million, or 14% of revenue, a year ago, and
GAAP net income to common shareholders was $3.3 million, or $0.16 per
diluted share, compared to $1.7 million, or $0.08 per diluted share, a
year ago.
Conference Call:
The Company will host a conference call at 4:30 P.M. ET today, May 9,
2019 to discuss the Company’s results. Investors and interested parties
may participate in the call by dialing 877-830-2596 or 785-424-1744
(international) and referring Conference ID: 134465. The conference call
is also being webcast and is available via the investor relations
section of the Company’s website, www.parkcitygroup.com.
A replay of the conference call will be available from 7:30 ET today
until 11:59 p.m. ET on June 9, 2019. The Replay can be accessed by
calling 844-512-2921 (toll-free) or 412-317-6671 (international). Please
enter pin number 134465 to access the replay.
About Park City Group:
Park City Group, Inc. (NASDAQ: PCYG), the parent company of ReposiTrak,
Inc., a compliance, supply chain, and e-commerce platform that partners
with retailers, wholesalers and their suppliers, to accelerate sales,
control risk, and improve supply chain efficiencies. More information is
available at www.parkcitygroup.com
and www.repositrak.com.
Specific disclosure relating to Park City Group, including management’s
analysis of results from operations and financial condition, are
contained in the Company’s annual report on Form 10-Q for the fiscal
quarter ended December 31, 2018 and other reports filed with the
Securities and Exchange Commission. Investors are encouraged to read and
consider such disclosure and analysis contained in the Company’s Form
10-K and other reports, including the risk factors contained in the Form
10-K.
Non-GAAP Financial Measures
While this press release does not include non-GAAP financial measures,
the financial presentation below contains certain financial measures
defined as “non-GAAP financial measures” by the Securities and Exchange
Commission, including non-GAAP EBITDA and non-GAAP earnings per share.
These measures may be different from non-GAAP financial measures used by
other companies. The presentation of this financial information, which
is not prepared under any comprehensive set of accounting rules or
principles, is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with generally accepted accounting principles.
Reconciliations of these non-GAAP financial measures to the nearest
comparable GAAP measures will be provided upon the completion of the
Company’s annual audit.
Non-GAAP EBITDA excludes items such as impairment charges, allowance for
doubtful accounts, non-cash stock-based compensation and other one-time
cash and non-cash charges. Non-GAAP EPS excludes items such as non-cash
stock-based compensation, amortization of acquired intangible assets and
other one-time cash and non-cash charges. The Company believes the
non-GAAP measures provide useful information to both management and
investors by excluding certain expenses, gains and losses or net
purchases of property and equipment, as the case may be, which may not
be indicative of its core operation results and business outlook.
Because Park City Group has historically reported certain non-GAAP
results to investors, the Company believes that the inclusion of
non-GAAP measures in the financial presentation below allows investors
to compare the Company’s financial results with the Company’s historical
financial results reported using non-GAAP financial measures, as well as
with the financial results reported by others.
Forward-Looking Statement
Any statements contained in this document that are not historical facts
are forward-looking statements as defined in the U.S. Private Securities
Litigation Reform Act of 1995. Words such as “anticipate,” “believe,”
“estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,”
“predict,” “if”, “should” and “will” and similar expressions as they
relate to Park City Group, Inc. (“Park City Group”) are intended to
identify such forward-looking statements. Park City Group may from time
to time update these publicly announced projections, but it is not
obligated to do so. Any projections of future results of operations
should not be construed in any manner as a guarantee that such results
will in fact occur. These projections are subject to change and could
differ materially from final reported results. For a discussion of such
risks and uncertainties, see “Risk Factors” in Park City’s annual report
on Form 10-K, its quarterly report on Form 10-Q, and its other reports
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the dates on which they are made.
| Park City Group, Inc. | ||||||||||||||||||||||
| INCOME STATEMENT | ||||||||||||||||||||||
| 3 Months Ended | 9 Months Ended | |||||||||||||||||||||
| FY ENDS June | 3/31/19 | 3/31/18 | % Chg. | 3/31/19 | 3/31/18 | % Chg. | ||||||||||||||||
| Total Revenues | $ | 5,006,132 | $ | 5,278,783 | (5 | %) | $ | 16,513,363 | $ | 15,715,654 | 5 | % | ||||||||||
| Operating Expenses | ||||||||||||||||||||||
| Cost of Services and Product Support | (1,342,051 | ) | (1,805,256 | ) | (26 | %) | (4,341,236 | ) | (4,649,620 | ) | (7 | %) | ||||||||||
| Sales and Marketing | (1,485,785 | ) | (1,574,663 | ) | (6 | %) | (4,533,664 | ) | (4,781,752 | ) | (5 | %) | ||||||||||
| General and Administrative | (1,020,652 | ) | (1,293,727 | ) | (21 | %) | (3,490,698 | ) | (3,569,584 | ) | (2 | %) | ||||||||||
| Depreciation and Amortization | (140,312 | ) | (165,189 | ) | (15 | %) | (429,717 | ) | (487,815 | ) | (12 | %) | ||||||||||
| Total Operating Expenses | (3,988,800 | ) | (4,838,835 | ) | (18 | %) | (12,795,315 | ) | (13,488,771 | ) | (5 | %) | ||||||||||
| Operating Income | $ | 1,017,332 | $ | 439,948 | 131 | % | $ | 3,718,048 | $ | 2,226,883 | 67 | % | ||||||||||
| Interest Income | 75,670 | 17,730 | 327 | % | 165,567 | – | NM | |||||||||||||||
| Interest (Expense) | (4,706 | ) | – | NM | (20,802 | ) | (12,157 | ) | 71 | % | ||||||||||||
| Income Before Taxes | 1,088,296 | 457,678 | 138 | % | 3,862,813 | 2,214,726 | 74 | % | ||||||||||||||
| Provision for Taxes | (20,210 | ) | (349 | ) | NM | (142,710 | ) | (76,063 | ) | 88 | % | |||||||||||
| Net Income | $ | 1,068,086 | $ | 457,329 | 134 | % | $ | 3,720,103 | $ | 2,138,663 | 74 | % | ||||||||||
| Dividends on Preferred Stock | (146,610 | ) | (146,611 | ) | (0 | %) | (439,832 | ) | (426,737 | ) | 3 | % | ||||||||||
| Net Income to Common Shareholders | $ | 921,476 | $ | 310,718 | 197 | % | $ | 3,280,271 | $ | 1,711,926 | 92 | % | ||||||||||
| GAAP EPS, Basic | $ | 0.05 | $ | 0.02 | 193 | % | $ | 0.17 | $ | 0.09 | 89 | % | ||||||||||
| GAAP EPS, Diluted | $ | 0.05 | $ | 0.02 | 196 | % | $ | 0.16 | $ | 0.08 | 90 | % | ||||||||||
| Weighted Average Shares, Basic | 19,861,000 | 19,648,000 | 19,823,000 | 19,519,000 | ||||||||||||||||||
| Weighted Average Shares, Diluted | 20,390,000 | 20,321,000 | 20,369,000 | 20,250,000 | ||||||||||||||||||
| Park City Group, Inc. | |||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP ITEMS | |||||||||||||||||||||||
| 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||
| FY ENDS June | 3/31/19 | 3/31/18 | % Chg. | 3/31/19 | 3/31/18 | % Chg. | |||||||||||||||||
| Net Income | $ | 1,068,086 | $ | 457,329 | 134 | % | $ | 3,720,103 | $ | 2,138,663 | 74 | % | |||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and Amortization | 140,312 | 165,189 | (15 | %) | 429,717 | 487,815 | (12 | %) | |||||||||||||||
| Interest Expense (Income) | (70,964 | ) | (17,730 | ) | NM | (144,765 | ) | 12,157 | (1291 | %) | |||||||||||||
| Provision for Taxes | 20,210 | 349 | 5691 | % | 142,710 | 76,063 | 88 | % | |||||||||||||||
| Other (Incl. Bad Debt Exp.) | 150,000 | 100,000 | 50 | % | 350,000 | 295,050 | 19 | % | |||||||||||||||
| Stock Compensation Expense | 150,283 | 101,649 | 48 | % | 473,556 | 489,748 | (3 | %) | |||||||||||||||
| Adjusted EBITDA | $ | 1,457,927 | $ | 806,786 | 81 | % | $ | 4,971,321 | $ | 3,499,496 | 42 | % | |||||||||||
| Net Income | $ | 1,068,086 | $ | 457,329 | 134 | % | $ | 3,720,103 | $ | 2,138,663 | 74 | % | |||||||||||
| Adjustments: | |||||||||||||||||||||||
| Stock Compensation Expense | 150,283 | 101,649 | 124 | % | 473,556 | 489,748 | 12 | % | |||||||||||||||
| Acquisition Related Amortization | 32,850 | 32,850 | – | 98,550 | 98,550 | – | |||||||||||||||||
| Adjusted non-GAAP Net Income | 1,251,219 | 591,828 | 111 | % | 4,292,209 | 2,726,961 | 57 | % | |||||||||||||||
| Preferred Dividends | (146,610 | ) | (146,611 | ) | (0 | %) | (439,832 | ) | (426,737 | ) | 3 | % | |||||||||||
| Adjusted non-GAAP Net Income | |||||||||||||||||||||||
| to Common Shareholders | $ | 1,104,609 | $ | 445,217 | 148 | % | $ | 3,852,377 | $ | 2,300,224 | 67 | % | |||||||||||
| Adjusted Non-GAAP EPS | $ | 0.05 | $ | 0.02 | 147 | % | $ | 0.19 | $ | 0.11 | 66 | % | |||||||||||
| Weighted Average Shares, Diluted | 20,390,000 | 20,321,000 | 20,369,000 | 20,250,000 | |||||||||||||||||||
| Park City Group, Inc. | |||||||||||||
| CONSOLIDATED BALANCE SHEET | |||||||||||||
| Period Ended | |||||||||||||
| FY ENDS June | 3/31/19 | 6/30/18 | |||||||||||
| Assets | |||||||||||||
| Current Assets: | |||||||||||||
| Cash | $ | 18,145,369 | $ | 14,892,439 | |||||||||
| Receivables, Net Allowances | 3,977,982 | 4,222,348 | |||||||||||
| Contract Asset (Current Portion of Unbilled) | 3,379,652 | 3,502,287 | |||||||||||
| Prepaid Expenses and Other Current Assets | 1,219,878 | 1,116,387 | |||||||||||
| Total Current Assets | $ | 26,722,881 | $ | 23,733,461 | |||||||||
| Property and Equipment, Net | $ | 1,683,923 | $ | 1,896,348 | |||||||||
| Other Assets: | |||||||||||||
| Deposits, and Other Assets | 3,922 | 18,691 | |||||||||||
| Contract Asset (Long-Term Portion of Unbilled) | 1,864,974 | 1,194,574 | |||||||||||
| Investments | 476,884 | 477,884 | |||||||||||
| Customer Relationships | 821,250 | 919,800 | |||||||||||
| Goodwill | 20,883,886 | 20,883,886 | |||||||||||
| Capitalized Software Costs, Net | 95,380 | 168,926 | |||||||||||
| Total Other Assets | $ | 24,146,296 | $ | 23,663,761 | |||||||||
| Total Assets | $ | 52,553,100 | $ | 49,293,570 | |||||||||
| Liabilities | |||||||||||||
| Current Liabilities: | |||||||||||||
| Accounts Payable | $ | 622,803 | $ | 1,490,434 | |||||||||
| Accrued Liabilities | 1,328,037 | 745,694 | |||||||||||
| Contract Liability (Deferred Revenue) | 2,063,810 | 2,335,286 | |||||||||||
| Lines of Credit | 4,660,000 | 3,230,000 | |||||||||||
| Current Portion of Notes Payable | 36,891 | 188,478 | |||||||||||
| Total Current Liabilities | $ | 8,711,541 | $ | 7,989,892 | |||||||||
| Long-Term Liabilities: | |||||||||||||
| Notes Payable, Less Current Portion | 255,054 | 1,592,077 | |||||||||||
| Other Long-Term Liabilities | – | 7,275 | |||||||||||
| Total Long-Term Liabilities | $ | 255,054 | $ | 1,599,352 | |||||||||
| Total Liabilities | $ | 8,966,595 | $ | 9,589,244 | |||||||||
| Shareholder Equity | |||||||||||||
| Series B Preferred | $ | 6,254 | $ | 6,254 | |||||||||
| Series B-1 Preferred | 2,124 | 2,124 | |||||||||||
| Common Stock | 198,715 | 197,738 | |||||||||||
| Additional Paid-In Capital | 77,312,818 | 76,711,887 | |||||||||||
| Accumulated Deficit | (33,933,406 | ) | (37,213,677 | ) | |||||||||
| Total Shareholder Equity | $ | 43,586,505 | $ | 39,704,326 | |||||||||
| Total Liabilities and Shareholder Equity | $ | 52,553,100 | $ | 49,293,570 | |||||||||
| Park City Group, Inc. | |||||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||||||||
| 3 Months Ended | 9 Months Ended | ||||||||||||||||
| FY ENDS June | 3/31/19 | 3/31/18 | 3/31/19 | 3/31/18 | |||||||||||||
| Cash Flows From Operating Activities: | |||||||||||||||||
| Net Income | $ | 1,068,086 | $ | 457,329 | $ | 3,720,103 | $ | 2,138,663 | |||||||||
| Adj. to Reconcile Net Income to Net Cash from Operating Activities: | |||||||||||||||||
| Depreciation and Amortization | 140,313 | 165,187 | 429,718 | 487,815 | |||||||||||||
| Stock Compensation Expense | 150,283 | 101,649 | 473,556 | 489,748 | |||||||||||||
| Bad Debt Expense | 150,000 | 100,000 | 350,000 | 295,050 | |||||||||||||
| Decrease (Increase) in Accounts Receivables | (191,050 | ) | (952,816 | ) | 17,001 | (2,999,613 | ) | ||||||||||
|
Decrease (Increase) in LT Receivables, Prepaid Expenses & Other Assets |
1,133,459 | 143,498 | (759,122 | ) | 764,513 | ||||||||||||
| Increase (Decrease) in Accounts Payable | (215,348 | ) | 614,142 | (867,631 | ) | 688,073 | |||||||||||
| Increase (Decrease) in Accrued Liabilities | 25,123 | (173,204 | ) | 392,089 | (98,821 | ) | |||||||||||
| Increase (Decrease) in Deferred Revenue | (607,486 | ) | (49,422 | ) | (271,752 | ) | 9,548 | ||||||||||
| Net Cash From (Used In) Operating Activities | $ | 1,653,380 | $ | 406,363 | $ | 3,483,962 | $ | 1,774,976 | |||||||||
| Cash Flows From Investing Activities: | |||||||||||||||||
| Capitalization of Software Costs | – | – | – | (111,241 | ) | ||||||||||||
| Purchase of Long-Term Investments | 1,000 | – | 1,000 | – | |||||||||||||
| Purchase of Property and Equipment | (41,650 | ) | (26,361 | ) | (45,197 | ) | (204,004 | ) | |||||||||
| Net Cash From (Used In) Investing Activities | $ | (40,650 | ) | $ | (26,361 | ) | $ | (44,197 | ) | $ | (315,245 | ) | |||||
| Cash Flows From Financing Activities: | |||||||||||||||||
| Net Increase in Line of Credit | – | 380,000 | 1,430,000 | 380,000 | |||||||||||||
| Proceeds from Issuance of Notes Payable | – | – | – | 56,078 | |||||||||||||
| Preferred Stock Redemption | – | (999,990 | ) | – | (999,990 | ) | |||||||||||
| Proceeds from Employee Stock Plans | – | 124,627 | – | 244,417 | |||||||||||||
| Proceeds from Exercise of Options and Warrants | – | 666,903 | 164,997 | 666,903 | |||||||||||||
| Dividends Paid | (146,611 | ) | (162,966 | ) | (293,222 | ) | (488,897 | ) | |||||||||
| Payments on Notes Payable and Capital Leases | (3,032 | ) | (378,923 | ) | (1,488,610 | ) | (544,088 | ) | |||||||||
| Net Cash From (Used In) Financing Activities | $ | (149,643 | ) | $ | (370,351 | ) | $ | (186,835 | ) | $ | (685,577 | ) | |||||
| Net Increase (Decrease) in Cash | $ | 1,463,087 | $ | 9,651 | $ | 3,252,930 | $ | 774,154 | |||||||||
| Cash at Beginning of Period | 16,682,282 | 14,818,509 | 14,892,439 | 14,054,006 | |||||||||||||
| Cash at End of Period | $ | 18,145,369 | $ | 14,828,160 | $ | 18,145,369 | $ | 14,828,160 | |||||||||
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