Record Revenue of $5.7 Million, Driven by Growth Across All Services
Record GAAP Net Income to Common of $1.2 Million, or $0.06 Per-Share
Management Reaffirms Outlook for Annual Growth and Expects Record Profitability
SALT LAKE CITY, Feb. 08, 2018 (GLOBE NEWSWIRE) -- Park City Group, Inc. (NASDAQ:PCYG), the parent company of ReposiTrak Inc., a compliance, supply chain, and MarketPlace B2B e-commerce services platform that partners with retailers to accelerate sales, control risk, and improve supply chain efficiencies, announced financial results for its fiscal 2018 second quarter ended December 31, 2017.
Strategic and Financial Highlights:
- Revenue increased to a record $5.7 million driven by double-digit growth across all services. “As planned, we signed multiple Vendor Portal deals in the second quarter, driving supply chain results and overall revenue to record levels,” said Randall K. Fields, Park City Group’s Chairman and CEO. “These wins were important as they mark our transition to a platform-as-a-service company. The scope of our ReposiTrak customer relationships is expanding from food safety compliance to an end-to-end platform that also includes our supply chain and MarketPlace B2B e-commerce capabilities.”
- One of world’s largest retailers completes MarketPlace pilot and commercially adopts platform. “MarketPlace is a highly effective tool for localizing merchandising decisions, enabling retailers to differentiate the product in one store from another. We are engaged by this customer to enable store level ordering though MarketPlace, replacing a catalog system they had used for decades. This is a use case for MarketPlace that was conceived by the customer and highlights the platform’s unique B2B e-commerce capabilities. This customer is now expanding this successful engagement,” said Mr. Fields.
- Partnership with GMDC to expand ReposiTrak network and accelerate MarketPlace growth. “Our work with GMDC, the largest general merchandise industry trade association, significantly expands our presence beyond retail food items. GMDC chose to exclusively endorse ReposiTrak and MarketPlace because of the platform’s unique compliance, supply chain and B2B e-commerce capabilities,” said Mr. Fields. “With GMDC’s general merchandise focus driving even further scale into our network of connections, we are increasingly confident that MarketPlace will significantly expand the addressable market for our services.”
- Top-five grocer expands ReposiTrak compliance to include managing sustainability. “During the quarter, this retailer, a long-time supply chain customer, expanded the use of ReposiTrak to include managing the compliance of its sustainability initiative,” said Mr. Fields. “This was an important development for us because it demonstrates that ReposiTrak’s capabilities go far beyond food safety and that our unique platform can be used to manage the compliance characteristics of all aspects of our customers’ business, helping them to achieve a number of strategic objectives.”
- Success of converged business plan to drive new ReposiTrak branded platform initiative. “With the accelerating convergence of our services we are launching a new marketing strategy to increase awareness of our capabilities,” said Mr. Fields. “ReposiTrak is the platform, not just our food safety initiative. This platform now encompasses three application suites; compliance, supply chain, and MarketPlace, which together, form a self-reinforcing eco-system wherein there is a logical connection from one suite of applications to another. Each application enhances the value of the others, creating a model for network driven sustainable growth and high profitability.”
- Investing in improving ability to address the growing scale and scope of network. “Continually improving execution is the key to successful long-term customer relationships and our future growth. Last quarter we highlighted our efforts to drive the productivity of the Success Team to tackle our growing pipeline of connections. This quarter we leveraged new tools from our 10x Project to help the Success Team to better address the growing scope of capabilities of ReposiTrak’s network. As a result, the team is increasingly capable of implementing customers across all three of our application suites; compliance, supply chain, and MarketPlace,” said Mr. Fields.
- Management reiterates fiscal 2018 revenue outlook and highlights growing profitability. “The list of ReposiTrak HUBs is growing rapidly. We are seeing an acceleration in supply chain service adoption across this growing network, and customer interest in Marketplace is stronger than any service launch in our history, validating the substantial resources committed to this initiative. With the execution capabilities of our Success Team rising to the occasion, we are increasingly confident in the self-reinforcing nature of our converged business model and our ability to drive sustainable strong top-line growth and even higher levels of earnings growth,” said Mr. Fields.
Financial Results Summary:
Fiscal 2Q18 Quarterly Results: Total revenue increased 20% to $5.7 million for the three months ended December 31, 2017, as compared to $4.8 million during the same period a year ago. Total operating expenses were $4.35 million, a 28% increase from $3.4 million a year ago, primarily reflecting planned investments in our Success Team, our 10x technology platform, and MarketPlace. GAAP net income was $1.35 million, or 24% of revenue, versus $1.38 million a year ago, and GAAP net income to common shareholders was $1.19 million, or $0.06 per diluted share, as compared to $1.18 million, or $0.06 per diluted share, a year ago.
Fiscal 2018 Year-to-Date Results: Total revenue increased 16% to $10.4 million for the six months ended December 31, 2017, as compared to $9 million during the same period a year ago. Total operating expenses were $8.65 million, a 25% increase from $6.9 million a year ago, primarily reflecting planned investments in our Success Team, our 10x technology platform, and MarketPlace. GAAP net income was $1.7 million, or 16% of revenue, versus $2 million in the same period a year ago, and GAAP net income to common shareholders was $1.4 million, or $0.07 per diluted share, as compared to $1.6 million, or $0.08 per diluted share, in the same period a year ago.
Conference Call:
The Company will host a conference call at 4:15 P.M. Eastern today, February 8, 2018 to discuss the results. Investors and interested parties may participate in the call by dialing 800-239-9838 and referring to Conference ID: 9387540. The conference call is also being webcast and is available via the investor relations section of the Company’s website, www.parkcitygroup.com.
About Park City Group:
Park City Group (NASDAQ: PCYG) is a Platform-as-a-Service company that owns and operates, ReposiTrak, an end-to-end Compliance, Supply chain, and MarketPlace B2B Ecommerce service platform, that brings unique visibility to the consumer goods supply chain, delivering actionable information to help retailers, wholesalers, and product suppliers to accelerate sales, control risk, and increase 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, 2017 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-Q and other reports, including the risk factors contained in the Form 10-K for the fiscal year ended June 30, 2017.
Investor Relations Contact:
Jeff Elliott
Three Part Advisors, LLC
972-423-7070
Dave Mossberg
Three Part Advisors, LLC
817-310-0051
| Park City Group, Inc. | |||||||||||||||||||||||||
| INCOME STATEMENT | |||||||||||||||||||||||||
| 3 Months Ended | 6 Months Ended | ||||||||||||||||||||||||
| FY ENDS June | 12/31/17 | 12/31/16 | % Chg. | 12/31/17 | 12/31/16 | % Chg. | |||||||||||||||||||
| Total Revenues | $ | 5,724,706 | $ | 4,785,589 | 20 | % | $ | 10,436,871 | $ | 9,002,134 | 16 | % | |||||||||||||
| Operating Expenses | |||||||||||||||||||||||||
| Cost of Services and Product Support | 1,426,351 | 1,190,404 | 20 | % | 2,844,364 | 2,393,919 | 19 | % | |||||||||||||||||
| Sales and Marketing | 1,621,149 | 1,159,073 | 40 | % | 3,207,089 | 2,352,249 | 36 | % | |||||||||||||||||
| General and Administrative | 1,140,085 | 938,087 | 22 | % | 2,275,855 | 1,961,237 | 16 | % | |||||||||||||||||
| Depreciation and Amortization | 163,825 | 112,861 | 45 | % | 322,628 | 229,441 | 41 | % | |||||||||||||||||
| Total Operating Expenses | 4,351,410 | 3,400,425 | 28 | % | 8,649,936 | 6,936,846 | 25 | % | |||||||||||||||||
| Operating Income | $ | 1,373,296 | $ | 1,385,164 | (1 | %) | $ | 1,786,935 | $ | 2,065,288 | (13 | %) | |||||||||||||
| Interest Expense | (7,696 | ) | (6,836 | ) | 13 | % | (29,887 | ) | (13,323 | ) | 124 | % | |||||||||||||
| Income Before Taxes | 1,365,600 | 1,378,328 | (1 | %) | 1,757,048 | 2,051,965 | (14 | %) | |||||||||||||||||
| Provision for Taxes | (15,116 | ) | - | NM | (75,714 | ) | (59,184 | ) | 28 | % | |||||||||||||||
| Net Income | $ | 1,350,484 | $ | 1,378,328 | (2 | %) | $ | 1,681,334 | $ | 1,992,781 | (16 | %) | |||||||||||||
| Dividends on Preferred Stock | (162,966 | ) | (195,448 | ) | (17 | %) | (280,126 | ) | (382,252 | ) | (27 | %) | |||||||||||||
| Net Income to Common Shareholders | $ | 1,187,518 | $ | 1,182,880 | 0 | % | $ | 1,401,208 | $ | 1,610,529 | (13 | %) | |||||||||||||
| GAAP EPS, Basic | $ | 0.06 | $ | 0.06 | (0 | %) | $ | 0.07 | $ | 0.08 | (14 | %) | |||||||||||||
| GAAP EPS, Diluted | $ | 0.06 | $ | 0.06 | 0 | % | $ | 0.07 | $ | 0.08 | (17 | %) | |||||||||||||
| Weighted Average Shares, Basic | 19,487,000 | 19,338,000 | 19,455,000 | 19,302,000 | |||||||||||||||||||||
| Weighted Average Shares, Diluted | 20,338,000 | 20,313,000 | 20,340,000 | 19,493,000 | |||||||||||||||||||||
| Park City Group, Inc. | |||||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP ITEMS | |||||||||||||||||||||||||
| 3 Months Ended | 6 Months Ended | ||||||||||||||||||||||||
| FY ENDS June | 12/31/17 | 12/31/16 | % Chg. | 12/31/17 | 12/31/16 | % Chg. | |||||||||||||||||||
| Net Income | $ | 1,350,484 | $ | 1,378,328 | (2 | %) | $ | 1,681,334 | $ | 1,992,781 | (16 | %) | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Depreciation and Amortization | 163,825 | 112,861 | 45 | % | 322,628 | 229,441 | 41 | % | |||||||||||||||||
| Interest Expense | 7,696 | 6,836 | 13 | % | 29,887 | 13,323 | 124 | % | |||||||||||||||||
| Other (Incl. Bad Debt Exp.) | 145,050 | 75,000 | 93 | % | 195,050 | 155,700 | 25 | % | |||||||||||||||||
| Stock Compensation Expense | 189,785 | 339,024 | (44 | %) | 388,099 | 578,080 | (33 | %) | |||||||||||||||||
| Adjusted EBITDA | $ | 1,856,840 | $ | 1,912,049 | (3 | %) | $ | 2,616,998 | $ | 2,969,325 | (12 | %) | |||||||||||||
| Net Income | $ | 1,350,484 | $ | 1,378,328 | (2 | %) | $ | 1,681,334 | $ | 1,992,781 | (16 | %) | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Stock Compensation Expense | 189,785 | 339,024 | (44 | %) | 388,099 | 578,080 | (33 | %) | |||||||||||||||||
| Acquisition Related Amortization | 32,850 | 32,850 | - | 65,700 | 65,700 | - | |||||||||||||||||||
| Adjusted non-GAAP Net Income | 1,573,119 | 1,750,202 | (10 | %) | 2,135,133 | 2,636,561 | (19 | %) | |||||||||||||||||
| Preferred Dividends | (162,966 | ) | (195,448 | ) | (17 | %) | (280,126 | ) | (382,252 | ) | (27 | %) | |||||||||||||
| Adjusted non-GAAP Net Income | |||||||||||||||||||||||||
| to Common Shareholders | $ | 1,410,153 | $ | 1,554,754 | (9 | %) | $ | 1,855,007 | $ | 2,254,309 | (18 | %) | |||||||||||||
| Adjusted Non-GAAP EPS | $ | 0.07 | $ | 0.08 | (9 | %) | $ | 0.09 | $ | 0.12 | (21 | %) | |||||||||||||
| Weighted Average Shares, Diluted | 20,338,000 | 20,313,000 | 20,340,000 | 19,493,000 | |||||||||||||||||||||
| Park City Group, Inc. | |||||||||||||||||||||||||
| CONSOLIDATED BALANCE SHEET | |||||||||||||||||||||||||
| Period Ended | |||||||||||||||||||||||||
| FY ENDS June | 12/31/17 | 6/30/17 | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Current Assets: | |||||||||||||||||||||||||
| Cash | $ | 14,818,508 | $ | 14,054,006 | |||||||||||||||||||||
| Accounts Receivables, Net Allowences | 5,860,874 | 4,009,127 | |||||||||||||||||||||||
| Prepaid Expenses and Other Current Assets | 789,057 | 643,600 | |||||||||||||||||||||||
| Total Current Assets | $ | 21,468,439 | $ | 18,706,733 | |||||||||||||||||||||
| Property and Equipment, Net | $ | 2,066,482 | $ | 2,115,277 | |||||||||||||||||||||
| Other Assets: | |||||||||||||||||||||||||
| Long-Term Receivables, Deposits, and Other | 1,773,819 | 2,540,291 | |||||||||||||||||||||||
| Investments | 477,884 | 477,884 | |||||||||||||||||||||||
| Customer Relationships | 985,500 | 1,051,200 | |||||||||||||||||||||||
| Goodwill | 20,883,886 | 20,883,886 | |||||||||||||||||||||||
| Capitalized Software Costs, Net | 217,956 | 137,205 | |||||||||||||||||||||||
| Total Other Assets | $ | 24,339,045 | $ | 25,090,466 | |||||||||||||||||||||
| Total Assets | $ | 47,873,966 | $ | 45,912,476 | |||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||
| Current Liabilities: | |||||||||||||||||||||||||
| Accounts Payable | $ | 639,418 | $ | 565,487 | |||||||||||||||||||||
| Accrued Liabilities | 1,582,041 | 2,084,980 | |||||||||||||||||||||||
| Deferred Revenue | 2,409,816 | 2,350,846 | |||||||||||||||||||||||
| Lines of Credit | 2,850,000 | 2,850,000 | |||||||||||||||||||||||
| Current Portion of Notes Payable | 255,071 | 318,616 | |||||||||||||||||||||||
| Total Current Liabilities | $ | 7,736,346 | $ | 8,169,929 | |||||||||||||||||||||
| Long-Term Liabilities: | |||||||||||||||||||||||||
| Notes Payable, Less Current Portion | 1,951,412 | 1,996,953 | |||||||||||||||||||||||
| Other Long-Term Liabilities | 22,009 | 36,743 | |||||||||||||||||||||||
| Total Long-Term Liabilities | $ | 1,973,421 | $ | 2,033,696 | |||||||||||||||||||||
| Total Liabilities | $ | 9,709,767 | $ | 10,203,625 | |||||||||||||||||||||
| Shareholder Equity | |||||||||||||||||||||||||
| Series B Preferred | $ | 6,254 | $ | 6,254 | |||||||||||||||||||||
| Series B-1 Preferred | 3,059 | 2,859 | |||||||||||||||||||||||
| Common Stock | 195,348 | 194,241 | |||||||||||||||||||||||
| Additional Paid-In Capital | 76,542,022 | 75,489,189 | |||||||||||||||||||||||
| Accumulated Deficit | (38,582,484 | ) | (39,983,692 | ) | |||||||||||||||||||||
| Total Shareholder Equity | $ | 38,164,199 | $ | 35,708,851 | |||||||||||||||||||||
| Total Liabilities and Shareholder Equity | $ | 47,873,966 | $ | 45,912,476 | |||||||||||||||||||||
| Park City Group, Inc. | |||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||||||||||||||||
| 6 Months Ended | |||||||||||||||||||||||||
| FY ENDS June | 12/31/17 | 12/31/16 | |||||||||||||||||||||||
| Cash Flows From Operating Activities: | |||||||||||||||||||||||||
| Net Income | $ | 1,681,334 | $ | 1,992,781 | |||||||||||||||||||||
| Adj. to Reconcile Net Income to Net Cash from Operating Activities: | |||||||||||||||||||||||||
| Depreciation and Amortization | 322,628 | 229,441 | |||||||||||||||||||||||
| Stock Compensation Expense | 388,099 | 578,080 | |||||||||||||||||||||||
| Bad Debt Expense | 195,050 | 155,700 | |||||||||||||||||||||||
| Decrease (Increase) in Accounts Receivables | (2,046,797 | ) | (2,269,610 | ) | |||||||||||||||||||||
| Decrease (Increase) in LT Receivables, Prepaid Expenses and Other Assets | 621,015 | 43,232 | |||||||||||||||||||||||
| Increase (Decrease) in Accounts Payable | 73,931 | (97,020 | ) | ||||||||||||||||||||||
| Increase (Decrease) in Accrued Liabilities | 74,383 | 21,385 | |||||||||||||||||||||||
| Increase (Decrease) in Deferred Revenue | 58,970 | (274,922 | ) | ||||||||||||||||||||||
| Net Cash From (Used In) Operating Activities | $ | 1,368,613 | $ | 379,067 | |||||||||||||||||||||
| Cash Flows From Investing Activities: | |||||||||||||||||||||||||
| Capitalization of Software Costs | (111,241 | ) | - | ||||||||||||||||||||||
| Purchase of Property and Equipment | (177,643 | ) | (19,499 | ) | |||||||||||||||||||||
| Net Cash From (Used In) Investing Activities | $ | (288,884 | ) | $ | (19,499 | ) | |||||||||||||||||||
| Cash Flows From Financing Activities: | |||||||||||||||||||||||||
| Proceeds from Employee Stock Plans | 119,790 | 113,987 | |||||||||||||||||||||||
| Proceeds from Issuance of Notes Payable | 56,078 | - | |||||||||||||||||||||||
| Net Increase in Line of Credit | - | 250,000 | |||||||||||||||||||||||
| Proceeds from Exercise of Options and Warrants | - | 35,000 | |||||||||||||||||||||||
| Payments on Notes Payable and Capital Leases | (165,164 | ) | (133,891 | ) | |||||||||||||||||||||
| Dividends Paid | (325,931 | ) | (5,288 | ) | |||||||||||||||||||||
| Net Cash From (Used In) Financing Activities | $ | (315,227 | ) | $ | 259,808 | ||||||||||||||||||||
| Net Increase (Decrease) in Cash | $ | 764,502 | $ | 619,376 | |||||||||||||||||||||
| Cash at Beginning of Period | 14,054,006 | 11,443,388 | |||||||||||||||||||||||
| Cash at End of Period | $ | 14,818,508 | $ | 12,062,764 | |||||||||||||||||||||
Non-GAAP Financial Measures
While this press release does not include non-GAAP financial measures, the financial presentation above 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.