33% Revenue Growth, Record Operating Cash Flows
Successful Commercial Launch of MarketPlace, Accelerated Supplier HUB Sign-ups
ReposiTrak Now Used by Three of the Top Five U.S. Food Retailers
SALT LAKE CITY, May 10, 2017 (GLOBE NEWSWIRE) -- Park City Group, Inc. (NASDAQ:PCYG), a cloud-based software company that uses big data management to help retailers and their suppliers ‘Sell More, Stock Less and See Everything’™, today announced results for its fiscal third quarter ended March 31, 2017.
- 3Q17 revenue increased 33% to $4.7 million
- 3Q17 net income increased 206% to $901,000
- 3Q17 fully diluted EPS was $0.03, versus $0.01 during 3Q16
- Year-to-date revenue increased 35% to $13.8 million
- Year-to-date net income increased to $2.9 million, versus $169,000 a year ago
- Year-to-date fully diluted EPS was $0.11, versus a loss per share of ($0.02) a year ago
- 3Q17 ending cash balance was $13.5 million, versus $11.4 million at fiscal 2016 year-end
Strategic and Financial Highlights:
- Fiscal third quarter revenue increased 33% year-over-year to $4.7 million. “This quarter was focused on growing the scale and scope of our network. We have now signed our third of the five largest U.S. food retailers, commercially launched MarketPlace, and saw a better than expected acceleration in Supplier HUB sign-ups,” said Randall K. Fields, Park City Group’s Chairman and CEO. “Due to growing market acceptance of our offering, we increased total revenue by 33% to $4.7 million and entered the current quarter with significant momentum.”
- Record quarterly operating cash flow of $1.6 million and net income growth of 206%. “Despite a planned increase in growth-related spending, we generated significant operating leverage with net income increasing 206% to $901,000, or 19% of revenue,” said Mr. Fields. “With our largest HUBs scaling rapidly, operating cash flow for the quarter increased to $1.6 million, driving total cash to over $13.5 million, both record highs.”
- Successful launch of MarketPlace opens further growth opportunities. “During the quarter, we launched MarketPlace, our compliant-vendor sourcing system, taking the first steps to expand ReposiTrak’s role beyond that of a food safety compliance system. The initial response from HUBs and suppliers has been overwhelmingly positive,” said Mr. Fields. “While MarketPlace is still in the early stages of commercialization, we were encouraged that the initial reaction was so favorable.”
- Adoption of Vendor Portal by largest HUBs strengthens strategic position. “We also launched Item Level Compliance Management with two of our largest HUBs via Vendor Portal, our unified service delivery platform. This takes ReposiTrak’s offering to specific item-level compliance and opens the opportunity to offer ReposiTrak customers our full suite of supply chain services. With ReposiTrak, our Vendor Portal, and MarketPlace, we now have a converged end-to-end solution for the industry and have become even more important overall in our customers’ business processes,” said Mr. Fields.
- Network effect on Supplier HUB sign-ups affirms strategy of total market penetration. “We saw a substantial uptick in interest and sign-ups of Supplier HUBs. Suppliers that are using ReposiTrak to comply with their retail/wholesale customer’s requirements have found that it also offers a compelling solution to meet the compliance needs of their own supply chain,” said Mr. Fields. “We expect Supplier HUB growth to continue to accelerate as a result of this network effect. Given the sheer volume of participants in the global food supply chain, this represents a very large market opportunity.”
- Strong momentum and expanded applications provide support for multi-year growth. “We continue to expect the second half of the fiscal year to be stronger than the first half,” said Mr. Fields. “With the network effect driving connection growth, new applications driving increased revenue per connection, and the operating leverage inherent in our business model, we are well positioned to grow revenue 25% to 35% per year during the next 3-to-5 years, while expanding profit margins.”
Financial Results Summary:
Fiscal Third Quarter 2017 Results: Total revenue increased 33% to $4.7 million for the three months ended March 31, 2017, as compared to $3.6 million during the same period a year ago. Total operating expenses were $3.8 million, a 17% increase from $3.2 million a year ago, reflecting planned investments. Net income was $901,000, versus $295,000 a year ago, and net income to common shareholders was $699,000, or $0.03 per diluted share, as compared to $118,000, or $0.01 per diluted share, a year ago.
Fiscal 2017 Year-to-Date Results: Total revenue increased 35% to $13.8 million for the first nine months of fiscal 2017, as compared to $10.2 million during the same period a year ago. Total operating expenses were $10.7 million, a 7% increase from $10.0 million a year ago. Net income for the first nine months of fiscal 2017 was $2.9 million, versus $169,000 a year ago, and net income to common shareholders was $2.3 million, or $0.11 per diluted share, versus a loss of ($378,000), or ($0.02) per share, a year ago.
Cash and Liquidity: The Company ended its fiscal third quarter of 2017 with $13.5 million in cash and equivalents, versus $11.4 million at the end of the fiscal 2016. During the quarter the Company generated $1.6 million in operating cash flow. Fiscal year to date, the Company generated $2.0 million in operating cash flow.
Conference Call:
The Company will host a conference call at 4:15 P.M. Eastern today, May 10, 2017 to discuss the results. Investors and interested parties may participate in the call by dialing 888-820-9416 and referring to Conference ID: 7073589. 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 (PCYG) is a Software-as-a-Service (“SaaS”) provider that brings unique visibility to the consumer goods supply chain, delivering actionable information to ensure products are available when and where consumers demand them, helping retailers and suppliers to ‘Sell More, Stock Less, and See Everything’™. Park City Group’s technology also assists all participants in the food and drug supply chains to comply with food and drug safety regulations through the Company’s ReposiTrak subsidiary. 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 quarterly report on Form 10-Q for the quarter ended March 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-Q.
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 | 3/31/17 | 3/31/16 | % Chg. | 3/31/17 | 3/31/16 | % Chg. | |||||||||||||||||||
| Total Revenues | $ | 4,748,652 | $ | 3,580,329 | 33 | % | $ | 13,750,786 | $ | 10,215,752 | 35 | % | |||||||||||||
| Operating Expenses | |||||||||||||||||||||||||
| Cost of Services and Product Support | 1,342,772 | 1,050,074 | 28 | % | 3,736,691 | 3,223,548 | 16 | % | |||||||||||||||||
| Sales and Marketing | 1,350,726 | 1,264,036 | 7 | % | 3,702,975 | 4,107,676 | (10 | %) | |||||||||||||||||
| General and Administrative | 1,006,605 | 807,542 | 25 | % | 2,967,842 | 2,317,316 | 28 | % | |||||||||||||||||
| Depreciation and Amortization | 106,899 | 125,939 | (15 | %) | 336,340 | 382,453 | (12 | %) | |||||||||||||||||
| Total Operating Expenses | 3,807,002 | 3,247,591 | 17 | % | 10,743,848 | 10,030,993 | 7 | % | |||||||||||||||||
| Income (Loss) from Operations | $ | 941,650 | $ | 332,738 | 183 | % | $ | 3,006,938 | $ | 184,759 | NM | ||||||||||||||
| Other Income (Expenses) | |||||||||||||||||||||||||
| Interest Income (Expense) | (4,729 | ) | (10,986 | ) | (57 | %) | (18,052 | ) | 10,328 | NM | |||||||||||||||
| Gain (Loss) on Disposal of Investment | - | (26,684 | ) | NM | - | (26,128 | ) | NM | |||||||||||||||||
| Income (Loss) Before Taxes | 936,921 | 295,068 | 218 | % | 2,988,886 | 168,959 | NM | ||||||||||||||||||
| (Provision) Benefit for Taxes | (35,471 | ) | - | NM | (94,655 | ) | - | NM | |||||||||||||||||
| Net Income (Loss) | $ | 901,450 | $ | 295,068 | 206 | % | $ | 2,894,231 | $ | 168,959 | NM | ||||||||||||||
| Dividends on Preferred Stock | (202,036 | ) | (176,588 | ) | 14 | % | (584,288 | ) | (546,536 | ) | 7 | % | |||||||||||||
| Net Income (Loss) to Common Shareholders | $ | 699,414 | $ | 118,480 | 490 | % | $ | 2,309,943 | $ | (377,577 | ) | NM | |||||||||||||
| GAAP EPS, Basic | $ | 0.04 | $ | 0.01 | 484 | % | $ | 0.12 | $ | (0.02 | ) | NM | |||||||||||||
| GAAP EPS, Diluted | $ | 0.03 | $ | 0.01 | 479 | % | $ | 0.11 | $ | (0.02 | ) | NM | |||||||||||||
| Weighted Average Shares, Basic | 19,390,000 | 19,196,000 | 19,331,000 | 19,128,000 | |||||||||||||||||||||
| Weighted Average Shares, Diluted | 20,353,000 | 19,963,000 | 20,251,000 | 19,128,000 | |||||||||||||||||||||
| Park City Group, Inc. | |||||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP ITEMS | |||||||||||||||||||||||||
| 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||
| FY ENDS June | 3/31/2017 | 3/31/2016 | % Change | 3/31/2017 | 3/31/2016 | % Change | |||||||||||||||||||
| Net Income (Loss) | $ | 901,450 | $ | 295,068 | 206 | % | $ | 2,894,231 | $ | 168,959 | NM | ||||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Depreciation and Amortization | 106,899 | 125,939 | (15 | %) | 336,340 | 382,453 | (12 | %) | |||||||||||||||||
| Interest Income (Expense) | 4,729 | 37,670 | (87 | %) | 18,052 | 15,800 | 14 | % | |||||||||||||||||
| Income Taxes | 35,471 | - | NM | 94,655 | - | NM | |||||||||||||||||||
| Bad Debt Expense | 75,000 | 9,564 | 684 | % | 230,700 | 43,140 | 435 | % | |||||||||||||||||
| Stock Compensation Expense | 383,509 | 290,343 | 32 | % | 961,589 | 775,202 | 24 | % | |||||||||||||||||
| Adjusted EBITDA | $ | 1,507,058 | $ | 758,584 | 99 | % | $ | 4,535,567 | $ | 1,385,554 | 227 | % | |||||||||||||
| Net Income (Loss) | $ | 901,450 | $ | 295,068 | 206 | % | $ | 2,894,231 | $ | 168,959 | NM | ||||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Stock Compensation Expense | 383,509 | 290,343 | 32 | % | 961,589 | 775,202 | 24 | % | |||||||||||||||||
| Acquisition Related Amortization | 32,850 | 32,850 | - | 98,550 | 98,550 | - | |||||||||||||||||||
| Adjusted non-GAAP Net Income (Loss) | 1,317,809 | 618,261 | 113 | % | 3,954,370 | 1,042,711 | 279 | % | |||||||||||||||||
| Dividends on Preferred Stock | (202,036 | ) | (176,588 | ) | 14 | % | (584,288 | ) | (546,536 | ) | 7 | % | |||||||||||||
| Adjusted non-GAAP Net Income (Loss) | |||||||||||||||||||||||||
| to Common Shareholders | $ | 1,115,773 | $ | 441,673 | 153 | % | $ | 3,370,082 | $ | 496,175 | 579 | % | |||||||||||||
| Adjusted Non-GAAP EPS | $ | 0.05 | $ | 0.02 | 148 | % | $ | 0.17 | $ | 0.03 | 560 | % | |||||||||||||
| Weighted Average Shares, Diluted | 20,353,000 | 19,963,000 | 20,251,000 | 19,680,000 | |||||||||||||||||||||
| Park City Group, Inc. | |||||||||||||||||
| CONSOLIDATED BALANCE SHEET | |||||||||||||||||
| Quarter Ended | |||||||||||||||||
| FY ENDS June | 3/31/17 | F2016 | |||||||||||||||
| Assets | |||||||||||||||||
| Current Assets: | |||||||||||||||||
| Cash & Equivalents | $ | 13,542,542 | $ | 11,443,388 | |||||||||||||
| Accounts Receivables | 3,262,096 | 3,048,774 | |||||||||||||||
| Prepaid and Other Current Assets | 525,324 | 393,275 | |||||||||||||||
| Total Current Assets | 17,329,962 | 14,885,437 | |||||||||||||||
| Property and Equipment, Net | 599,862 | 469,383 | |||||||||||||||
| Other Assets: | |||||||||||||||||
| Long-Term Receivables, Deposits, and Other | 2,104,373 | 514,060 | |||||||||||||||
| Investments | 474,734 | 471,584 | |||||||||||||||
| Customer Relationships | 1,084,050 | 1,182,600 | |||||||||||||||
| Goodwill | 20,883,886 | 20,883,886 | |||||||||||||||
| Capitalized Software Costs, Net | 152,451 | 182,942 | |||||||||||||||
| Total Other Assets | 24,699,494 | 23,235,072 | |||||||||||||||
| Total Assets | $ | 42,629,318 | $ | 38,589,892 | |||||||||||||
| Liabilities | |||||||||||||||||
| Current Liabilities: | |||||||||||||||||
| Accounts Payable | $ | 749,813 | $ | 580,309 | |||||||||||||
| Accrued Liabilities | 1,517,666 | 1,502,203 | |||||||||||||||
| Deferred Revenue | 2,158,518 | 2,717,094 | |||||||||||||||
| Lines of Credit | 2,630,432 | 2,500,000 | |||||||||||||||
| Current Portion of Notes Payable | 182,712 | 239,199 | |||||||||||||||
| Total Current Liabilities | 7,239,141 | 7,538,805 | |||||||||||||||
| Long-Term Liabilities: | |||||||||||||||||
| Notes Payable, Less Current Portion | 560,546 | 491,253 | |||||||||||||||
| Other Long-Term Liabilities | 44,110 | 57,275 | |||||||||||||||
| Total Long-Term Liabilities | 604,656 | 548,528 | |||||||||||||||
| Total Liabilities | $ | 7,843,797 | $ | 8,087,333 | |||||||||||||
| Shareholder Equity | |||||||||||||||||
| Series B Preferred | $ | 6,254 | $ | 6,254 | |||||||||||||
| Series B-1 Preferred | 2,659 | 1,802 | |||||||||||||||
| Common Stock | 194,132 | 192,296 | |||||||||||||||
| Additional Paid-In Capital | 75,242,946 | 73,272,620 | |||||||||||||||
| Accumulated Deficit | (40,660,470 | ) | (42,970,413 | ) | |||||||||||||
| Total Shareholder Equity | $ | 34,785,521 | $ | 30,502,559 | |||||||||||||
| Total Liabilities and Shareholder Equity | $ | 42,629,318 | $ | 38,589,892 | |||||||||||||
| Park City Group, Inc. | |||||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||||||||
| 9 Months Ended | |||||||||||||||||
| FY ENDS June | 3/31/17 | 3/31/16 | |||||||||||||||
| Cash Flows From Operating Activities: | |||||||||||||||||
| Net Income (Loss) | $ | 2,894,231 | $ | 168,959 | |||||||||||||
| Adjustments to Reconcile Net Income (Loss), in Operating Activities: | |||||||||||||||||
| Depreciation and Amortization | 336,340 | 382,453 | |||||||||||||||
| Bad Debt Expense | 230,700 | 43,140 | |||||||||||||||
| Stock Compensation Expense | 961,589 | 775,202 | |||||||||||||||
| Loss on Short-Term Marketable Securities | - | 26,128 | |||||||||||||||
| Decrease (Increase) in Trade Receivables | (444,022 | ) | (1,232,910 | ) | |||||||||||||
| Decrease (Increase) in Prepaid Expenses and Other Assets | (1,722,362 | ) | 49,387 | ||||||||||||||
| Increase (Decrease) in Accounts Payable | 169,504 | (170,736 | ) | ||||||||||||||
| Increase (Decrease) in Accrued Liabilities | 92,281 | (59,270 | ) | ||||||||||||||
| Increase (Decrease) in Deferred Revenue | (558,576 | ) | 219,924 | ||||||||||||||
| Net Cash From (Used In) Operating Activities | $ | 1,959,685 | $ | 202,277 | |||||||||||||
| Cash Flows From Investing Activities: | |||||||||||||||||
| Purchase of Marketable Securities | - | (4,639,036 | ) | ||||||||||||||
| Cash from Sale of Marketable Securities | - | 4,612,908 | |||||||||||||||
| Capitalization of Software Costs | - | (109,895 | ) | ||||||||||||||
| Purchase of Property and Equipment | (337,777 | ) | (31,987 | ) | |||||||||||||
| Purchase of Long-Term Investments | (3,150 | ) | (471,584 | ) | |||||||||||||
| Net Cash From (Used In) Investing Activities | $ | (340,927 | ) | $ | (639,594 | ) | |||||||||||
| Cash Flows From Financing Activities: | |||||||||||||||||
| Proceeds from Employee Stock Plans | 223,465 | 199,848 | |||||||||||||||
| Proceeds from Issuance of Notes Payable | 207,345 | 396,000 | |||||||||||||||
| Net Increase in Line of Credit | 130,432 | - | |||||||||||||||
| Proceeds from Exercise of Options and Warrants | 121,625 | 33,002 | |||||||||||||||
| Dividends Paid | (7,932 | ) | (7,932 | ) | |||||||||||||
| Payments on Notes Payable and Capital Leases | (194,539 | ) | (176,153 | ) | |||||||||||||
| Net Cash From (Used In) Financing Activities | $ | 480,396 | $ | 444,765 | |||||||||||||
| Net Increase (Decrease) in Cash | $ | 2,099,154 | $ | 7,448 | |||||||||||||
| Cash at Beginning of Period | 11,443,388 | 11,325,572 | |||||||||||||||
| Cash at End of Period | $ | 13,542,542 | $ | 11,333,020 | |||||||||||||