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Park City Group Reports First Quarter Fiscal 2015 Financial Results

Record 29% Growth in Core Supply Chain Subscription Revenue



Total Revenue Increases 20% to Record Level

ReposiTrak on Plan to Have 2,000 Connections by Mid-2015

SALT LAKE CITY, Nov. 6, 2014 (GLOBE NEWSWIRE) -- Park City Group (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 financial results for its fiscal first quarter-ended September 30, 2014.

Strategic and Financial highlights:

  • Record subscription and record total revenue – For the quarter ended September 30, 2014, the Company posted year-over-year growth in subscription revenue of 24%. Total revenue grew 20% to a record level of $3.3 million.
  • Record 29% growth in core supply chain subscription revenue – "Subscription revenue, net of ReposiTrak-related revenue, grew at a record pace of 29% during the quarter. By delivering on our brand promise to help customers 'Sell more, Stock less and See everything,' we continue to drive expansion among existing customers," said Randall K. Fields, Park City Group's Chairman and CEO. "As we anticipated, recurring revenue is clearly accelerating, and we continue to expect faster annual growth rates in each of the next several years."
  • Significant improvement in profitability and cash flow – For the quarter ended September 30, 2014, the Company posted $303,000 in adjusted EBITDA, a $747,000 improvement from the same period a year ago. Free cash flow for the fiscal first quarter of 2015 was $479,000, a $1.1 million improvement from the first quarter of the prior year. "We continue to expect that the rate of revenue growth will significantly outpace the growth in costs," said Mr. Fields. "We expect to be a cash flow generator during the balance of fiscal 2015, and feel that our net cash position is adequate to fund our growth plans."

A Subscription Revenue Growth chart is available here: http://media.globenewswire.com/cache/14562/file/30040.pdf

Total operating expenses during the quarter ended September 30, 2014 were $3.8 million, a decrease of $57,000 from the same quarter a year ago. Non-GAAP income per share to common shareholders for the third quarter was $0.01 per share, as compared to a net loss per share of ($0.04) during the same period last year. GAAP net loss per share to common shareholders for the third quarter was ($0.03) per share, as compared to a net loss per share of ($0.07) during the same period last year.

Total cash at the end of September 30, 2014 was $3.3 million as compared to $3.4 million at June 30, 2014, and debt levels decreased to $1.8 million, versus $1.9 million at June 30, 2014.

ReposiTrak® highlights: ReposiTrak, the Company's collaboration with Leavitt Partners, provides food and drug retailers and their suppliers with a cost-effective service to help protect their brands, and reduce regulatory and financial risk associated with the rapidly evolving Food Safety Modernization Act.

  • Upstream suppliers begin adoption of ReposiTrak – ReposiTrak recently announced that the first two upstream food suppliers to its wholesaler customers have begun to deploy its food safety services. These two upstream food suppliers plan to deploy ReposiTrak throughout their own supply chain, which has nearly 600 vendors combined.
  • Sixth member of leading supermarket group adopts ReposiTrak - The sixth member of the Retailer Owned Food Distributors & Associates (ROFDA), a cooperative of 13 wholesale members that represent 20% of the supermarket industry, has chosen ReposiTrak to manage their food safety-related risk.

"ReposiTrak is on plan to add two additional wholesalers and/or retailers, and have 2,000 connections by June of next year," said Mr. Fields.

The Company will host a conference call at 4:15 P.M. Eastern today, November 6, 2014, to discuss the results. Investors and interested parties may participate in the call by dialing (877) 675-3568 and referring to Conference ID: 17913698. 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 Software-as-a-Service ("SaaS") provider that brings unique visibility to the consumer goods supply chain, delivering actionable information that ensures product is on the shelf when the consumer expects it to be. Park City Group's services enable customers to "Sell More, Stock Less, and See Everything." More information is available at www.parkcitygroup.com

About ReposiTrak

ReposiTrak is a collaboration between Leavitt Partners and Park City Group. ReposiTrak provides food retailers and suppliers with a robust solution to help protect their brands and remain in compliance with rapidly evolving regulations in the Food Safety Modernization Act. Powered by Park City Group's technology, the ReposiTrak® solution is internet-based and enables all participants in the farm-to-shelf supply chain easily manage both document management and tracking and traceability requirements as products move between trading partners. More information is available at www.repositrak.com.

Non-GAAP Financial Measures

This press release includes the following financial measures defined as "non-GAAP financial measures" by the Securities and Exchange Commission: non-GAAP EBITDA, non-GAAP earnings per share, net debt and free cash flow. 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, charges to consolidate and integrate recently acquired businesses, costs of closing corporate facilities, 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, charges to consolidate and integrate recently acquired businesses, costs for closing corporate facilities, amortization of acquired intangible assets and other one-time cash and non-cash charges. Net debt is the total debt balance less the cash balance. Free cash flow includes net cash provided (used) by operating activities less replacement purchases of property and equipment. 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. In addition, because Park City Group has historically reported certain non-GAAP results to investors, the Company believes that the inclusion of non-GAAP measures provides consistency in the Company's financial reporting.

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.
Consolidated Condensed Balance Sheets
September 30, June 30,
2014 2014
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 3,277,949 $ 3,352,559
Receivables, net of allowance of $75,000 and $70,000 at September 30, 2014 and June 30, 2014, respectively 2,635,208 2,857,983
Prepaid expenses and other current assets 324,824 250,855
Total current assets 6,237,981 6,461,397
Property and equipment, net 667,934 740,753
Other assets:
Deposits and other assets 14,866 14,866
Note receivable 3,458,111 2,996,664
Customer relationships 1,812,440 1,918,019
Goodwill 4,805,933 4,805,933
Capitalized software costs, net -- --
Total other assets 10,091,350 9,735,482
Total assets $ 16,997,265 $ 16,937,632
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 905,412 $ 738,289
Accrued liabilities 1,566,816 1,801,355
Deferred revenue 1,754,234 1,840,811
Line of credit 1,200,000 1,200,000
Notes payable 169,412 226,900
Total current liabilities 5,595,874 5,807,355
Long-term liabilities:
Notes payable, less current portion 381,751 422,248
Other long-term liabilities 87,433 88,948
Total liabilities 6,065,058 6,318,551
Commitments and contingencies
Stockholders' equity:
Series B Convertible Preferred Stock, $0.01 par value, 30,000,000 shares authorized; 411,927 shares issued and outstanding at September 30, 2014 and June 30, 2014. 4,119 4,119
Common Stock, $0.01 par value, 50,000,000 shares authorized; 17,106,645 and 16,928,025 shares issued and outstanding at September 30, 2014 and June 30, 2014, respectively 171,066 169,280
Additional paid-in capital 47,634,612 46,792,736
Accumulated deficit (36,877,590) (36,347,054)
Total stockholders' equity 10,932,207 10,619,081
Total liabilities and stockholders' equity $ 16,997,265 $ 16,937,632
See accompanying notes to consolidated condensed financial statements.
PARK CITY GROUP, INC.
Consolidated Condensed Statements of Operations (Unaudited)
Three Months Ended
September 30,
2014 2013
Revenues:
Subscription $ 2,637,084 $ 2,134,656
Other Revenue 696,435 641,280
Total revenues 3,333,519 2,775,936
Operating expenses:
Cost of services and product support 1,348,379 1,209,103
Sales and marketing 1,337,435 1,239,643
General and administrative 894,972 1,148,473
Depreciation and amortization 187,395 227,575
Total operating expenses 3,768,181 3,824,794
(Loss) income from operations (434,662) (1,048,858)
Other expense:
Interest income (expense) 58,599 1,493
(Loss) income before income taxes (376,063) (1,047,365)
(Provision) benefit for income taxes: -- --
Net (loss) income (376,063) (1,047,365)
Dividends on preferred stock (154,473) (154,473)
Net (loss) applicable to common shareholders $ (530,536) $ (1,201,838)
Weighted average shares, basic and diluted 17,088,000 16,364,000
Basic and diluted loss per share $ (0.03) $ (0.07)
See accompanying notes to consolidated condensed financial statements.
PARK CITY GROUP, INC.
Consolidated Condensed Statements of Cash Flows (Unaudited)
Three Months Ended
September 30,
2014 2013
Cash Flows From Operating Activities:
Net (loss) income $ (376,063) $ (1,047,365)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 187,395 227,575
Stock issued for charitable contribution -- 96,900
Stock compensation expense 543,972 375,515
Bad debt expense 7,033 --
(Increase) decrease in:
Receivables 215,742 2,882
Prepaids and other assets (135,416) 57,805
(Decrease) increase in:
Accounts payable 167,123 (193,771)
Accrued liabilities (34,778) 352,126
Deferred revenue (86,577) (466,637)
Net cash provided by (used in) operating activities 488,431 (594,970)
Cash Flows From Investing Activities:
Cash from sales of property and equipment -- 6,505
Cash advanced on note receivable (400,000) --
Purchase of property and equipment (8,997) (66,590)
Net cash used in investing activities (408,997) (60,085)
Cash Flows From Financing Activities:
Proceeds from issuance of stock -- 1,493,818
Proceeds from exercise of options and warrants -- 129,043
Proceeds from employee stock plans 98,414 62,134
Proceeds from issuance of note payable 8,213 --
Dividends paid (154,473) (123,578)
Payments on notes payable (106,198) (225,678)
Net cash provided by financing activities (154,044) 1,335,739
Net (decrease) increase in cash and cash equivalents (74,610) 680,684
Cash and cash equivalents at beginning of period 3,352,559 3,616,585
Cash and cash equivalents at end of period $3,277,949 $ 4,297,269
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ -- $ 6,500
Cash paid for interest $ 10,016.00 $ 31,793.00
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Common stock to pay accrued liabilities $ 745,248 $ 257,209
Dividends accrued on preferred stock $ 154,473 $ 154,473
Dividends paid with preferred stock $ -- $ --
See accompanying notes to consolidated condensed financial statements.
PARK CITY GROUP, INC. AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
Adjusted EBITDA
(In $000's)
Three Months Ended
September 30,
2014 2013
Net Loss $ (376) $ (1,047)
Adjusted EBITDA Reconciliation Adjustments:
Depreciation and amortization 187 228
Bad debt expense 7 --
Interest, net (59) (1)
Stock based compensation 544 376
Adjusted EBITDA $ 303 $ (444)
Non-GAAP Net Income (Loss) to Common Shareholders and EPS
(In $000's, except per share)
Three Months Ended
September 30,
2014 2013
Net (loss) income $ (376) $ (1,047)
Non-GAAP Net (Loss) Income Reconciliation Adjustments:
Stock based compensation 544 376
Acquisition related amortization 106 126
Non-GAAP Net Income $ 274 $ (545)
Preferred dividends (154) (154)
Non-GAAP Net Income to Common Shareholders $ 120 $ (699)
Weighted average shares, diluted 17,088,000 16,364,000
Non-GAAP EPS, diluted $ 0.01 $ (0.04)
Non-GAAP Free Cash Flow
(In $000's)
Three Months Ended
September 30,
2014 2013
Net Cash Provided by Operating Activities $ 488 $ (595)
Non-GAAP Free Cash Flow Reconciliation Adjustments:
Purchase of property and equipment (9) (67)
Non-GAAP Free Cash Flow $ 479 $ (662)

Free cash flow includes net cash provided (used) by operating activities less replacement purchases of property and equipment. Capital expenditures related to long-term investments and new technology developments are omitted.

CONTACT: Investor Relations Contact: Dave Mossberg Three Part Advisors, LLC 817-310-0051 Jeff Elliott 972-423-7070

Source:Park City Group, Inc.