Industry News

TMCNet:  Park City Group Reports Financial Results for the Fiscal Second Quarter of 2020

[February 10, 2020]

Park City Group Reports Financial Results for the Fiscal Second Quarter of 2020

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

 

 


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