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Park City Group Reports Fiscal First Quarter 2018 Results

Revenue Increased 12%, as Efforts Focused on Record ReposiTrak Backlog
Operating Cash Flow Increased to $1.1 Million Leading to Record Cash Balance
Management Reiterates Fiscal 2018 Revenue Growth Within Annual Target of 25% to 35%

SALT LAKE CITY, Nov. 09, 2017 (GLOBE NEWSWIRE) -- Park City Group, Inc. (NASDAQ:PCYG), a software company that uses big data management to help retailers and their suppliers increase sales and lower costs, while simultaneously reducing compliance risks, announced financial results for its fiscal 2018 first quarter ended September 30, 2017.

Strategic and Financial Highlights:

  • Revenue increased 12%, as efforts focused on executing on record ReposiTrak backlog. “With the rapid growth of ReposiTrak, we entered the first quarter with a record backlog of supplier connections. To meet our customers’ requirements for success, efforts during the quarter were focused on bringing this backlog to record levels of compliance. As we have stated, quarterly revenue comparisons can fluctuate significantly and don’t directly correlate to the strength of our business, or our future prospects,” said Randall K. Fields, Park City Group’s Chairman and CEO.

  • Management reiterates fiscal 2018 revenue growth within annual target of 25% to 35%. “The list of prospective ReposiTrak HUBs is growing rapidly, our Supply Chain pipeline is larger than at any time in our history, and Marketplace is experiencing the highest level of interest of any service we have ever introduced. As a result, our outlook for growth has never been brighter, and we remain confident that revenue growth for fiscal 2018 will be within our annual target of 25% to 35%,” said Mr. Fields.

  • Fiscal 1Q18 operating cash flow accelerates to $1.1 million, total cash climbs to $14.9 million. “We continue to grow cash flow despite an increase in investments. As we said, operating cash flow would grow as we continue to transition ReposiTrak from a pre-paid service to our current billing model. As evidence, we generated $1.1 million in operating cash flow in the quarter, up from negative $122,000 a year ago, and $297,000 last quarter,” said Mr. Fields. “We expect record operating cash flow for the year as growth in our supply chain business and ReposiTrak should to be highly accretive.”

  • Investment in Success Team and 10x Project enhancing ability to address growing pipeline. “Continually improving execution is the key to successful long-term customer relationships and our future growth. We have doubled the size of the Success Team, brought on new leadership, and are providing team members with new tools from our 10x Project. We can now bring more suppliers into compliance in a week, than we used to do in a month. As a result, the team was able to get compliance rates to record highs by the end of the quarter and we have resumed a faster pace of growth,” said Mr. Fields.

  • ReposiTrak customers adopting Supply Chain applications via converged platform. “With our full suite of services now available on a converged service delivery platform, ReposiTrak customers have been increasingly interested in supply chain applications and the pace of uptake is accelerating as the size of our network grows,” said Mr. Fields. “We expect to have additional ReposiTrak customers adopting our unified service delivery platform over the remainder of the year, propelling Supply Chain services to record growth levels, and supporting our outlook for 25% to 35% growth for this year and beyond.”

  • MarketPlace expanding use cases to become a unique, broad-based B2B E-commerce platform. “The pilot with our initial HUB drove new use cases beyond compliant vendor replacement because of the customer’s recognition of the platform’s unique B2B E-commerce capabilities. In addition to our current pilot, we anticipate an expansion in activity with our ReposiTrak HUBs, as well as new use cases related to our GMDC relationship,” said Mr. Fields. “As a result, we expect continued growth over the remainder of this year and for MarketPlace to make a very meaningful contribution to revenue in fiscal 2019.”

Financial Results Summary:

Fiscal 1Q18 Results: Total revenue increased 12% to $4.7 million for the three months ended September 30, 2017, as compared to $4.2 million during the same period a year ago. Total operating expenses were $4.3 million, a 22% increase from $3.5 million a year ago, reflecting planned investments. GAAP net income was $331,000, versus $614,000 a year ago, and GAAP net income to common shareholders was $214,000, or $0.01 per diluted share, as compared to $428,000, or $0.02 per diluted share, a year ago.

Conference Call:

The Company will host a conference call at 4:15 P.M. Eastern today, November 9, 2017 to discuss the results. Investors and interested parties may participate in the call by dialing 888-394-8218 and referring to Conference ID: 9157342. 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 their suppliers increase sales and lower costs, while simultaneously reducing compliance risks. 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 annual report on Form 10-Q for the fiscal quarter ended September 30, 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 20, 2017.

Investor Relations Contact:

Jeff Elliott
Three Part Advisors, LLC
972-423-7070

Dave Mossberg
Three Part Advisors, LLC
817-310-0051

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
FY ENDS June 9/30/17 9/30/16 % Chg.
Total Revenues $ 4,712,165 $ 4,216,545 12 %
Operating Expenses
Cost of Services and Product Support 1,418,013 1,203,515 18%
Sales and Marketing 1,585,940 1,193,176 33%
General and Administrative 1,135,770 1,023,150 11%
Depreciation and Amortization 158,803 116,580 36%
Total Operating Expenses 4,298,526 3,536,421 22%
Income from Operations $ 413,639 $ 680,124 (39%)
Interest Expense (22,191) (6,487) 242%
Income Before Taxes 391,448 673,637 (42%)
Provision for Taxes (60,598) (59,184) 2%
Net Income $ 330,850 $ 614,453 (46%)
Dividends on Preferred Stock (117,160) (186,804) (37%)
Net Income to Common Shareholders $ 213,690 $ 427,649 (50%)
GAAP EPS, Basic $ 0.01 $ 0.02 (50%)
GAAP EPS, Diluted $ 0.01 $ 0.02 (51%)
Weighted Average Shares, Basic 19,424,000 19,266,000
Weighted Average Shares, Diluted 20,338,000 20,099,000
Park City Group, Inc.
RECONCILIATION OF NON-GAAP ITEMS
3 Months Ended
FY ENDS June 9/30/17 9/30/16 % Chg.
Net Income $ 330,850 $ 614,453 (46%)
Adjustments:
Depreciation and Amortization 158,803 116,580 36%
Interest Expense 22,191 6,487 242%
Other (Incl. Bad Debt Exp.) 50,000 80,700 (38%)
Stock Compensation Expense 198,314 239,056 (17%)
Adjusted EBITDA $ 760,158 $ 1,057,276 (28%)
Net Income $ 330,850 $ 614,453 (46%)
Adjustments:
Stock Compensation Expense 198,314 239,056 (17%)
Acquisition Related Amortization 32,850 32,850 -
Other - - NM
Adjusted non-GAAP Net Income 562,014 886,359 (37%)
Preferred Dividends (117,160) (186,804) (37%)
Adjusted non-GAAP Net Income
to Common Shareholders $ 444,854 $ 699,555 (36%)
Adjusted Non-GAAP EPS $ 0.02 $ 0.03 (37%)
Weighted Average Shares, Diluted 20,338,000 20,099,000
Park City Group, Inc.
CONSOLIDATED BALANCE SHEET
Period Ended
FY ENDS June 9/30/17 6/30/17
Assets
Current Assets:
Cash & Equivalents $ 14,885,786 $ 14,054,006
Accounts Receivables, Net Allowances 4,670,801 4,009,127
Prepaid Expenses and Other Current Assets 625,131 643,600
Total Current Assets $ 20,181,718 $ 18,706,733
Property and Equipment, Net $ 2,091,301 $ 2,115,277
Other Assets:
Long-Term Receivables, Deposits, and Other 2,098,946 2,540,291
Investments 477,884 477,884
Customer Relationships 1,018,350 1,051,200
Goodwill 20,883,886 20,883,886
Capitalized Software Costs, Net 233,201 137,205
Total Other Assets $ 24,712,267 $ 25,090,466
Total Assets $ 46,985,286 $ 45,912,476
Liabilities
Current Liabilities:
Accounts Payable $ 890,450 $ 565,487
Accrued Liabilities 2,261,814 2,084,980
Deferred Revenue 2,541,300 2,350,846
Lines of Credit 2,850,000 2,850,000
Current Portion of Notes Payable 292,051 318,616
Total Current Liabilities $ 8,835,615 $ 8,169,929
Long-Term Liabilities:
Notes Payable, Less Current Portion 1,997,754 1,996,953
Other Long-Term Liabilities 29,376 36,743
Total Long-Term Liabilities $ 2,027,130 $ 2,033,696
Total Liabilities $ 10,862,745 $ 10,203,625
Shareholder Equity
Series B Preferred $ 6,254 $ 6,254
Series B-1 Preferred 3,059 2,859
Common Stock 194,241 194,241
Additional Paid-In Capital 75,688,989 75,489,189
Accumulated Deficit (39,770,002) (39,983,692)
Total Shareholder Equity $ 36,122,541 $ 35,708,851
Total Liabilities and Shareholder Equity $ 46,985,286 $ 45,912,476
Park City Group, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
3 Months Ended
FY ENDS June 9/30/17 9/30/16
Cash Flows From Operating Activities:
Net Income $ 330,850 $ 614,453
Adjustments to Reconcile Net Income (Loss), in Operating Activities:
Depreciation and Amortization 158,803 116,580
Bad Debt Expense 50,000 80,700
Stock Compensation Expense 198,314 239,056
Decrease (Increase) in Accounts Receivables (711,674) (1,188,259)
Decrease (Increase) in LT Receivables, Prepaid Expenses and Other Assets 459,814 73,207
Increase (Decrease) in Accounts Payable 324,963 (10,250)
Increase (Decrease) in Accrued Liabilities 53,993 30,002
Increase (Decrease) in Deferred Revenue 190,454 (77,198)
Net Cash From (Used In) Operating Activities $ 1,055,517 $ (121,709)
Cash Flows From Investing Activities:
Capitalization of Software Costs (111,241) -
Purchase of Property and Equipment (86,732) (15,800)
Net Cash From (Used In) Investing Activities $ (197,973) $ (15,800)
Cash Flows From Financing Activities:
Proceeds from Employee Stock Plans - 113,987
Proceeds from Issuance of Notes Payable 56,078 -
Proceeds from Exercise of Options and Warrants - 35,000
Dividends Paid - (2,644)
Payments on Notes Payable and Capital Leases (81,842) (66,581)
Net Cash From (Used In) Financing Activities $ (25,764) $ 79,762
Net Increase (Decrease) in Cash $ 831,780 $ (57,747)
Cash at Beginning of Period 14,054,006 11,443,388
Cash at End of Period $ 14,885,786 $ 11,385,641

Source:Park City Group, Inc.