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Park City Group Reports Fiscal Second Quarter 2017 Results

35% Year-Over-Year Revenue Growth, Profitability Continues to Scale
Adoption Accelerated with Annual Connection Goal Achieved in Six Months
ReposiTrak Increasingly Recognized as the Industry’s Food Safety and Compliance Solution

SALT LAKE CITY, Feb. 06, 2017 (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 results for its fiscal second quarter ended December 31, 2016.

Strategic and Financial Highlights:

  • Fiscal second quarter revenue increased 35% year-over-year, reaching a record $4.8 million. “We continue to see strong revenue growth driven by demand for our new applications including ReposiTrak and our Vendor Portal,” said Randall K. Fields, Park City Group’s Chairman and CEO. “Total revenue was $4.8 million, our largest quarter ever, and an increase of 35% year over year, while revenue in the first half was $9 million, an increase of 36% from $6.6 million last year.”

  • Net income was a record $1.4 million with incremental contribution margin exceeding 75%. “With net income margin of 29%, we continued to generate improving operating leverage in the second quarter. We are capitalizing on past investments in processes and technology, and the convergence of our businesses,” said Mr. Fields. “Given the benefits we are seeing to execution and profitability; we are planning another round of infrastructure enhancements to handle our expected growth.”

  • Burgeoning customer network and accelerating connections reflect growing mandate. “During the quarter, we added new large retail customers to our network and launched applications that enhance our value proposition,” said Mr. Fields. “Our growing network puts us in touch with more and more industry participants. At the same time, improvements in our processes are allowing us to onboard suppliers at an accelerating rate, enabling our HUBs to achieve higher levels of compliance even faster."

  • ReposiTrak positioned as industry’s leading compliance management platform. “Food safety enjoys broad, bi-partisan support and existing regulations under the new Food Safety Modernization Act have not been impacted by the new administration’s regulatory position,” said Mr. Fields. “In addition to being the standard food safety solution, ReposiTrak is increasingly being viewed as a broader platform for overall compliance and risk management. Integration with SQF has made us the leading platform for food safety audits, and we are becoming deeply imbedded in our customers’ business processes.”

  • Expanded applications and business convergence provide support for multi-year growth. “The convergence of our business has created greater opportunities and increasing demand for our supply-chain services,” said Mr. Fields. “In addition to strong demand for our Vendor Portal, which is a unified service delivery platform, we are making a series of significant new product introductions that enhance our offering and which will make us increasingly important to our customers.”

  • Outlook for continued positive financial momentum in fiscal 2017. “Looking forward, we expect revenue and profitability in the second half of the fiscal year to be stronger than the first half,” said Mr. Fields. “We have already exceeded our fiscal 2017 goal of doubling supplier connections, and we are seeing this momentum translate into accelerated revenue growth and operating leverage. As a result, we are confident that fiscal 2017 will be a record year, by a substantial margin.”

Financial Results Summary:

Fiscal Second Quarter 2017 Results: Total revenue increased 35% to $4.8 million for the three months ended December 31, 2016, as compared to $3.5 million during the same period a year ago. Total operating expenses were $3.4 million, a 4% increase from $3.3 million a year ago. Net income for the quarter was $1.4 million, versus $281,000 a year ago, and net income to common shareholders for the quarter was $1.2 million, or $0.06 per common share, as compared to $111,000, or $0.01 per share, a year ago.

Fiscal 2017 Year-to-Date Results: Total revenue increased 36% to $9.0 million for the first six months of fiscal 2017, as compared to $6.6 million during the same period a year ago. Total operating expenses were $6.9 million, a 2% increase from $6.8 million a year ago. Net income for the first six months of fiscal 2017 was $2 million, versus a loss of ($126,000) a year ago, and net income to common shareholders was $1.6 million, or $0.08 per share, versus a loss of ($496,000), or ($0.03) per share, a year ago.

Cash and Liquidity: The Company ended the fiscal second quarter of 2017 with $12.1 million in cash and cash equivalents, versus $11.4 million at the end of the fiscal 2016.

Conference Call:

The Company will host a conference call at 4:15 P.M. Eastern today, February 6, 2017 to discuss the results. Investors and interested parties may participate in the call by dialing 1-877-879-6217 and referring to Conference ID: 4426539. 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 December 31, 2016 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 6 Months Ended
FY ENDS June 12/31/2016 12/31/2015 % Change 12/31/2016 12/31/2015 % Change
Total Revenues $ 4,785,589 $ 3,536,792 35 % $ 9,002,134 $ 6,635,423 36 %
Operating Expenses
Cost of Services and Product Support 1,190,404 998,928 19% 2,393,919 2,173,474 10%
Sales and Marketing 1,159,073 1,401,068 (17%) 2,352,249 2,843,640 (17%)
General and Administrative 938,087 732,444 28% 1,961,237 1,509,774 30%
Depreciation and Amortization 112,861 127,416 (11%) 229,441 256,514 (11%)
Total Operating Expenses 3,400,425 3,259,856 4% 6,936,846 6,783,402 2%
Income (Loss) from Operations $ 1,385,164 $ 276,936 400 % $ 2,065,288 $ (147,979) NM
Other Income (Expenses)
Interest Income (Expenses) (6,836) 3,691 NM (13,323) 21,314 NM
Gain on Disposal of Investment - 556 NM - 556 NM
Income (Loss) Before Taxes 1,378,328 281,183 390% 2,051,965 (126,109) NM
(Provision) Benefit for Taxes - - NM (59,184) - NM
Net Income (Loss) $ 1,378,328 $ 281,183 390 % $ 1,992,781 $ (126,109) NM
Dividends on Preferred Stock (195,448) (170,560) 15% (382,252) (369,948) 3%
Net Income (Loss) to Common Shareholders $1,182,880 $110,623 969% $1,610,529 $(496,057) NM
GAAP EPS $ 0.06 $ 0.01 959 % $ 0.08 $ (0.03) NM
Weighted Average Shares, Basic 19,338,000 19,147,000 19,302,000 19,094,000
Weighted Average Shares, Diluted 20,313,000 20,034,000 19,493,000 19,094,000
Park City Group, Inc.
RECONCILIATION OF NON-GAAP ITEMS
3 Months Ended 6 Months Ended
FY ENDS June 12/31/2016 12/31/2015 % Change 12/31/2016 12/31/2015 % Change
Net Income (Loss) $1,378,328 $281,183 390% $1,992,781 $(126,109) NM
Adjustments:
Depreciation and Amortization 112,861 127,416 (11%) 229,441 256,514 (11%)
Bad Debt Expense 75,000 - NM 155,700 33,576 364%
Interest Income (Expenses) 6,836 (3,691) NM 13,323 (21,314) NM
Stock Compensation Expense 339,024 223,026 52% 578,080 484,859 19%
Adjusted EBITDA $ 1,912,049 $ 627,934 204 % $ 2,969,325 $ 627,526 373 %
Net Income (Loss) $1,378,328 $281,183 390% $1,992,781 $(126,109) NM
Adjustments:
Stock Compensation Expense 339,024 223,026 52% 578,080 484,859 19%
Acquisition Related Amortization 32,850 32,850 - 65,700 65,700 -
Adjusted non-GAAP Net Income (Loss) 1,750,202 537,059 226% 2,636,561 424,450 521%
Dividends on Preferred Stock (195,448) (170,560) 15% (382,252) (369,948) 3%
Adjusted non-GAAP Net Income (Loss)
to Common Shareholders $1,554,754 $366,499 324% $2,254,309 $54,502 NM
Adjusted Non-GAAP EPS $ 0.08 $ 0.02 320% $ 0.12 $ 0.00 NM
Weighted Average Shares, Basic 19,338,000 19,147,000 19,302,000 19,094,000
Weighted Average Shares, Diluted 20,313,000 20,034,000 19,493,000 19,094,000


Park City Group, Inc.
CONSOLIDATED BALANCE SHEET
Quarter Ended
FY ENDS June 12/31/2016 6/30/2016
Assets
Current Assets:
Cash & Equivalents $ 12,062,764 $ 11,443,388
Accounts Receivables 4,143,662 3,048,774
Prepaid and Other Current Assets 350,043 393,275
Total Current Assets 16,556,469 14,885,437
Property and Equipment, Net 340,387 469,383
Other Assets
Long-Term Receivables, Deposits, and Other 1,533,082 514,060
Investments 471,584 471,584
Customer Relationships 1,116,900 1,182,600
Goodwill 20,883,886 20,883,886
Capitalized Software Costs, Net 167,696 182,942
Total Other Assets 24,173,148 23,235,072
Total Assets $ 41,070,004 $ 38,589,892
Liabilities
Current Liabilities
Accounts Payable $ 483,289 $ 580,309
Accrued Liabilities 1,367,353 1,502,203
Deferred Revenue 2,442,172 2,717,094
Lines of Credit 2,750,000 2,500,000
Current Portion of Notes Payable 196,827 239,199
Total Current Liabilities 7,239,641 7,538,805
Long-Term Liabilities
Notes Payable, Less Current Portion 399,734 491,253
Other Long-Term Liabilities 49,176 57,275
Total Long-Term Liabilities 448,910 548,528
Total Liabilities $ 7,688,551 $ 8,087,333
Shareholder Equity
Series B Preferred $ 6,254 $ 6,254
Series B-1 Preferred 2,266 1,802
Common Stock 193,582 192,296
Additional Paid-In Capital 74,539,235 73,272,620
Accumulated Deficit (41,359,884) (42,970,413)
Total Shareholder Equity $ 33,381,453 $ 30,502,559
Total Liabilities and Shareholder Equity $ 41,070,004 $ 38,589,892


Park City Group, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
6 Months Ended
FY ENDS June 12/31/2016 12/31/2015
Cash Flows From Operating Activities:
Net Income (Loss) $ 1,992,781 $ (126,109)
Adjustments to Reconcile Net Income (Loss), in Operating Activities:
Depreciation and Amortization 229,441 256,514
Stock Compensation Expense 578,080 484,859
Bad Debt Expense 155,700 33,576
Loss on Short-Term Marketable Securities - (556)
Decrease (Increase) in Trade Receivables (2,269,610) (955,116)
Decrease (Increase) in Prepaid Expenses and Other Assets 43,232 14,928
Increase (Decrease) in Accounts Payable (97,020) 9,756
Increase (Decrease) in Accrued Liabilities 21,385 (12,498)
Increase (Decrease) in Deferred Revenue (274,922) 375,447
��Net Cash From (Used In) Operating Activities $ 379,067 $ 80,801
Cash Flows From Investing Activities:
Capitalization of Software Costs - (77,382)
Cash from Sale of Marketable Securities - 668,634
Purchase of Property and Equipment (19,499) (24,065)
Purchase of Marketable Securities - (4,672,474)
Net Cash From (Used In) Investing Activities $ (19,499) $ (4,105,287)
Cash Flows From Financing Activities:
Proceeds from Employee Stock Plans 113,987 93,194
Proceeds from Exercise of Options and Warrants 35,000 33,002
Net Increase in Line of Credit 250,000 -
Dividends Paid (5,288) (5,288)
Payments on Notes Payable and Capital Leases (133,891) (112,427)
Net Cash From (Used In) Financing Activities $ 259,808 $ 8,481
Net Increase (Decrease) in Cash $ 619,376 $ (4,016,005)
Cash at Beginning of Period 11,443,388 11,325,572
Cash at End of Period $ 12,062,764 $ 7,309,567


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

Source:Park City Group, Inc.