SALT LAKE CITY--(BUSINESS WIRE)--Park City Group, Inc. (NASDAQ:PCYG), the parent company of ReposiTrak, Inc., which operates a B2B ecommerce, compliance, and supply chain platform that partners with retailers, wholesalers, and their suppliers, to accelerate sales, control risk, and improve supply chain efficiencies, announced financial results for the second fiscal quarter ended December 31, 2019.
Second Quarter Financial and Recent Business Highlights:
- Total revenue decreased 13% year-over-year due to lower one-time revenue.
- Recurring revenue increased 3% comparatively, constituting 83% of total revenue.
- Operating expense increased 8% year-over-year due to higher MarketPlace costs.
- Net income of $663,000.
- EPS $0.03 vs. $0.08 in the prior year second quarter.
- Fiscal year-to-date operating cash flow grew 46% to $2.7 million. Cash totaled $19 million.
- Repurchased 174,615 shares at an average price of $4.80 for a total of nearly $838,000.
Randall K. Fields, Chairman and CEO of Park City Group commented, “We have systematically increased recurring revenue, expanded our base of Tier 2 hubs, and increased our cash balance, validating our confidence in long-term success. Our monthly recurring revenue increased more than 8% compared to last December, approximately double the pace of September, demonstrating the acceleration of our progress. In addition, we have signed agreements with several large Tier 2 customers which, absent any additional new sales, will result in double-digit recurring revenue growth by the end of our fiscal year in June. To better address the growing opportunity, we have added four net new salespeople to focus on recurring revenue initiatives underscoring our confidence in this initiative. Combined, these two initiatives will drive sustainable growth for Park City Group.
“Simultaneously, our Out-of-Stock (OOS) initiative continued to gain momentum, as evidenced by FMI - The Food Industry Association’s endorsement of ReposiTrak's OOS Management Solution to address the grocery industry's long-term and growing problem of out-of-stocks,” continued Mr. Fields. “In fact, we announced that 70 percent of vendors using our Out-Of-Stock solution have reduced OOS by an average of 46 percent across more than 12,175 stores. We also added new MarketPlace buyers during the quarter, and our confidence in the long-term viability of this initiative continues to grow.
“This progress drove solid net income and more than $2.7 million in operating cash flow fiscal year-to-date, despite $2.4 million less one-time revenue,” added Mr. Fields. “We also advanced our efforts to expand our geographical footprint by adding new customers in the United Kingdom, opening a new and lucrative market for us. We are seeing meaningful progress in each of our product offerings, creating sustained profitability and maintaining a strong balance sheet.”
Second Quarter Financial Results (three months ended December 31, 2019 vs. three months ended December 31, 2018):
Total revenue declined 13% to $4.8 million as compared to $5.6 million due to lower one-time revenue in the current period. Total operating expense was $4.2 million, an 8% increase from $3.9 million. GAAP net income was $663,000, or 14% of revenue, versus $1.7 million, or 30% of revenue, and GAAP net income to common shareholders was $516,000, or $0.03 per diluted share, compared to $1.5 million, or $0.08 per diluted share.
Fiscal 2020 Year to Date Results (six months ended December 31, 2019 vs. six months ended December 31, 2018):
Total revenue declined 16% to $9.6 million for the six months ended December 31, 2019, as compared to $11.5 million during the same period a year ago due to lower one-time revenue in the current period. Total operating expenses were $8.9 million, a slight increase from $8.8 million a year ago. GAAP net income was $800,000, or 8% revenue, versus $2.7 million, or 24% of revenue, a year ago, and GAAP net income to common shareholders was $548,000, or $0.03 per diluted share, compared to $2.4 million, or $0.12 per diluted share, a year ago.
Conference Call:
The Company will host a conference call at 4:15 p.m. ET today, February 10, 2020 to discuss the Company's results. Investors and interested parties may participate in the call by dialing 1-877-407-9716 (toll-free) or 1-201-493-6799 (international) and referring Conference ID: 13698834. The conference call is also being webcast and is available via the investor relations section of the Company's website, www.parkcitygroup.com. A replay of the conference call will be available from 7:15 ET today until 11:59 p.m. ET on March 10, 2020. The Replay can be accessed by calling 1-844-512-2921 (toll-free) or 1-412-317-6671 (international). Please enter pin number 13698834 to access the replay.
About Park City Group:
Park City Group, Inc. (NASDAQ:PCYG), the parent company of ReposiTrak, Inc., a compliance, supply chain, and e-commerce platform that enables retailers, wholesalers, and their suppliers, to accelerate sales, control risk, and improve 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-K for the fiscal year ended September 30, 2019 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-K and other reports, including the risk factors contained in the Form 10-K.
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 (Unaudited) |
||||||||
Assets |
|
December 31, 2019 |
|
|
June 30, 2019 |
|
||
Current assets |
|
|
|
|
|
|
||
Cash |
|
$ |
18,968,775 |
|
|
$ |
18,609,423 |
|
Receivables, net of allowance for doubtful accounts of $396,895 and $145,825 at December 31, 2019 and June 30, 2019, respectively |
|
|
3,974,207 |
|
|
|
3,878,658 |
|
Contract asset – unbilled current portion |
|
|
2,909,583 |
|
|
|
3,023,694 |
|
Prepaid expense and other current assets |
|
|
584,528 |
|
|
|
1,037,099 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
26,437,093 |
|
|
|
26,548,874 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
3,252,560 |
|
|
|
2,972,257 |
|
|
|
|
|
|
|
|
|
|
Other assets: |
|
|
|
|
|
|
|
|
Deposits, and other assets |
|
|
22,414 |
|
|
|
17,146 |
|
Contract asset – unbilled long-term portion |
|
|
1,440,939 |
|
|
|
1,659,110 |
|
Operating lease-right-of-use asset |
|
|
822,502 |
|
|
|
- |
|
Customer relationships |
|
|
722,700 |
|
|
|
788,400 |
|
Goodwill |
|
|
20,883,886 |
|
|
|
20,883,886 |
|
Capitalized software costs, net |
|
|
21,834 |
|
|
|
70,864 |
|
|
|
|
|
|
|
|
|
|
Total other assets |
|
|
23,914,275 |
|
|
|
23,419,406 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
53,603,928 |
|
|
$ |
52,940,537 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
756,264 |
|
|
$ |
530,294 |
|
Accrued liabilities |
|
|
1,203,854 |
|
|
|
1,399,368 |
|
Contract liability - deferred revenue |
|
|
2,461,924 |
|
|
|
1,917,787 |
|
Lines of credit |
|
|
4,660,000 |
|
|
|
4,660,000 |
|
Operating lease liability - current |
|
|
83,562 |
|
|
|
- |
|
Current portion of notes payable |
|
|
302,611 |
|
|
|
295,168 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
9,468,215 |
|
|
|
8,802,617 |
|
|
|
|
|
|
|
|
|
|
Long-term liabilities |
|
|
|
|
|
|
|
|
Operating lease liability – less current portion |
|
|
738,940 |
|
|
|
- |
|
Notes payable, less current portion |
|
|
767,564 |
|
|
|
920,754 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
10,974,719 |
|
|
|
9,723,371 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred Stock; $0.01 par value, 30,000,000 shares authorized; |
|
|
|
|
|
|
|
|
Series B Preferred, 700,000 shares authorized; 625,375 shares issued and outstanding at December 31, 2019 and June 30, 2019; |
|
|
6,254 |
|
|
|
6,254 |
|
Series B-1 Preferred, 550,000 shares authorized; 212,402 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively |
|
|
2,124 |
|
|
|
2,124 |
|
Common Stock, $0.01 par value, 50,000,000 shares authorized; 19,579,989 and 19,793,372 issued and outstanding at December 31, 2019 and June 30, 2019, respectively |
|
|
195,802 |
|
|
|
197,936 |
|
Additional paid-in capital |
|
|
75,774,511 |
|
|
|
76,908,566 |
|
Accumulated deficit |
|
|
(33,349,482 |
) |
|
|
(33,897,714 |
) |
|
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
42,629,209 |
|
|
|
43,217,166 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
53,603,928 |
|
|
$ |
52,940,537 |
|
PARK CITY GROUP, INC. Consolidated Condensed Statements of Operations (Unaudited) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
|
Six Months Ended December 31, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
|
|
|
|
|
|
||||||||||
Revenue |
|
$ |
4,837,332 |
|
|
$ |
5,565,237 |
|
|
$ |
9,637,416 |
|
|
$ |
11,507,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and product support |
|
|
1,425,309 |
|
|
|
1,270,659 |
|
|
|
3,253,423 |
|
|
|
2,999,185 |
|
Sales and marketing |
|
|
1,446,517 |
|
|
|
1,139,855 |
|
|
|
2,861,380 |
|
|
|
3,047,879 |
|
General and administrative |
|
|
1,114,251 |
|
|
|
1,326,735 |
|
|
|
2,336,462 |
|
|
|
2,470,046 |
|
Depreciation and amortization |
|
|
222,499 |
|
|
|
144,030 |
|
|
|
416,177 |
|
|
|
289,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expense |
|
|
4,208,576 |
|
|
|
3,881,279 |
|
|
|
8,867,442 |
|
|
|
8,806,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
628,756 |
|
|
|
1,683,958 |
|
|
|
769,974 |
|
|
|
2,700,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
65,982 |
|
|
|
54,773 |
|
|
|
148,713 |
|
|
|
89,897 |
|
Interest expense |
|
|
(16,042 |
) |
|
|
(5,623 |
) |
|
|
(36,640 |
) |
|
|
(16,096 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
678,696 |
|
|
|
1,733,108 |
|
|
|
882,047 |
|
|
|
2,774,517 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision) for income taxes: |
|
|
(15,593 |
) |
|
|
(47,500 |
) |
|
|
(40,593 |
) |
|
|
(122,500 |
) |
Net income |
|
|
663,103 |
|
|
|
1,685,608 |
|
|
|
841,454 |
|
|
|
2,652,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on preferred stock |
|
|
(146,611 |
) |
|
|
(146,611 |
) |
|
|
(293,222 |
) |
|
|
(293,222 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income applicable to common shareholders |
|
$ |
516,492 |
|
|
$ |
1,538,997 |
|
|
$ |
548,232 |
|
|
$ |
2,358,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares, basic |
|
|
19,741,000 |
|
|
|
19,822,000 |
|
|
|
19,775,000 |
|
|
|
19,804,000 |
|
Weighted average shares, diluted |
|
|
20,052,000 |
|
|
|
20,375,000 |
|
|
|
20,033,000 |
|
|
|
20,474,000 |
|
Basic income per share |
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
0.03 |
|
|
$ |
0.12 |
|
Diluted income per share |
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
0.03 |
|
|
$ |
0.12 |
|
PARK CITY GROUP, INC. Consolidated Condensed Statements of Cash Flows (Unaudited) |
||||||||
|
|
Six Months Ended December 31, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Cash flows operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
841,454 |
|
|
$ |
2,652,017 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
416,177 |
|
|
|
289,405 |
|
Amortization of operating right of use asset |
|
|
40,239 |
|
|
|
- |
|
Stock compensation expense |
|
|
244,505 |
|
|
|
323,273 |
|
Bad debt expense |
|
|
250,000 |
|
|
|
200,000 |
|
(Increase) decrease in: |
|
|
|
|
|
|
|
|
Accounts receivables |
|
|
(231,438 |
) |
|
|
208,051 |
|
Long-term receivables, prepaids and other assets |
|
|
665,474 |
|
|
|
(1,892,581 |
) |
(Decrease) increase in: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
225,970 |
|
|
|
(652,283 |
) |
Operating lease liability |
|
|
(40,239 |
) |
|
|
- |
|
Accrued liabilities |
|
|
(284,418 |
) |
|
|
366,966 |
|
Deferred revenue |
|
|
543,861 |
|
|
|
335,734 |
|
Net cash provided by operating activities |
|
|
2,671,585 |
|
|
|
1,830,582 |
|
|
|
|
|
|
|
|
|
|
Cash flows investing activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(581,750 |
) |
|
|
(3,547 |
) |
Net cash used in investing activities |
|
|
(581,750 |
) |
|
|
(3,547 |
) |
|
|
|
|
|
|
|
|
|
Cash flows financing activities: |
|
|
|
|
|
|
|
|
Net increase in lines of credit |
|
|
- |
|
|
|
1,430,000 |
|
Proceeds from exercise of warrants |
|
|
- |
|
|
|
164,977 |
|
Common Stock buyback/retirement |
|
|
(1,355,037 |
) |
|
|
- |
|
Proceeds from employee stock plan |
|
|
63,523 |
|
|
|
- |
|
Dividends paid |
|
|
(293,222 |
) |
|
|
(146,611 |
) |
Payments on notes payable and capital leases |
|
|
(145,747 |
) |
|
|
(1,485,578 |
) |
Net cash used in financing activities |
|
|
(1,730,483 |
) |
|
|
(37,192 |
) |
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
359,352 |
|
|
|
1,789,843 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
|
18,609,423 |
|
|
|
14,892,439 |
|
Cash and cash equivalents at end of period |
|
$ |
18,968,775 |
|
|
$ |
16,682,282 |
|
