Attached files
file | filename |
---|---|
EX-99.1 - EARNINGS CALL TRANSCRIPT - PARK CITY GROUP INC | ex99-1.htm |
8-K - CURRENT REPORT - PARK CITY GROUP INC | pcyg8k_sep2018.htm |
Exhibit
99.2
Park City Group Reports First Quarter 2019
Results
Earnings
Accelerated as Revenues Grew 26% and Net Income Increased by
192%
Record Operating Cash Flows of $1.6 Million Drove Total Cash to
Record Levels
Customer Focus Drove Strong Growth
in Connections and Increased Cross
Selling
SALT
LAKE CITY--(BUSINESS WIRE)-- Park City Group, Inc.
(NASDAQ:PCYG), the
parent company of ReposiTrak, Inc., which operates a B2B
e-commerce, 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 first fiscal quarter ended
September 30, 2018.
First
Fiscal Quarter Financial and Recent Business
Highlights:
●
Revenue increased
26%to $5.9 million from $4.7 million in the same period last
year
●
Net income nearly
tripled to $966,000 from $331,000 in the same period last
year
●
Record operating
cash flows of $1.6 million drove total cash to record high of $16.5
million
●
Customer focus
drove strong connection growth, low churn, and increased cross
selling
●
Compliance
connections reached 70,000 for nearly 300,000 connections across
all applications
"We
began fiscal 2019 with strong momentum and continued growth across
all areas of our business," said Randall K. Fields, Chairman and
Chief Executive Officer of Park City Group. "Total revenues
increased 26% in the first quarter, and we delivered a near
tripling of net income, and record operating cash flows. Results
for the quarter were driven by our Compliance business, with growth
of both Tier 1 and Tier 2 connections, continued growth in high
quality Supply Chain subscription revenue, and a large
year-over-year increase in revenues from our MarketPlace
initiative."
Mr.
Fields added. "With the convergence of our Supply Chain offering
into ReposiTrack and the launch of MarketPlace we have created a
single platform to address our customers' needs across every aspect
of the supply chain. This is allowing us to better cross-sell our
solutions within our network which positions us to more effectively
drive growth and accelerate profitability. As a result, we are
winning larger mandates from our retail and wholesale HUBs for both
our Compliance and Supply Chain solutions and driving sales of our
applications deeper into their supplier bases, most notably with
our Tier 2 Supplier HUB growth initiative."
"With
MarketPlace up and running, and revenues accelerating, we rotated
our focus back to Compliance," Mr. Fields added. "As a result, we
generated strong results from Compliance activities during the
first quarter. We saw near record growth in Tier-1 Compliance
connections, while our Success Team's increased focus on signing up
Tier-2 Supplier Hubs accelerated the pace of this activity from
prior quarters. This gives us even greater confidence that this
offering will be a catalyst for growth beginning in the second half
of this year as we leverage our relationship with the thousands of
suppliers in our Compliance network."
"Our
Supply Chain business continues to deliver solid revenue growth,"
said Mr. Fields. "This is increasingly being driven by larger
mandates from retail and wholesale HUBs seeking to drive our
applications deeper into their supply chains as they see the
benefit from our solutions to their competitive capabilities.
However, overall results are also clearly underpinned by low churn
of both Supply Chain and Compliance customers due to our relentless
pursuit of customer satisfaction, with overall churn less than 2%
of total revenues in the past year."
"Last,
but certainly not least, we continue to be encouraged by the
results we are achieving from MarketPlace with one of the largest
retailers in the country," concluded Mr. Fields. "During the first
quarter, we expanded our program with this customer to a second
category, improved our execution capabilities, and are working to
onboard new retail HUB buyers to the platform. As expected, we
experienced some seasonality during the first quarter, which will
likely continue into our second quarter. Nevertheless,
year-over-year growth remains significant and we remain confident
we will add at least two more buyer HUBs to MarketPlace in fiscal
2019."
Financial Results
Summary:
First Fiscal Quarter Results: Total revenue increased 26% to
$5.9 million for the three months ended September 30, 2018, as
compared to $4.7 million during the same period a year ago. Total
operating expenses were $4.9 million, a 15% increase from $4.3
million a year ago, as the Company begins to leverage investments
made in increasing productivity. GAAP net income was $996,000, or
16.3% of revenue, versus $331,000, or 7.0% of revenue, a year ago,
and GAAP net income to common shareholders was $820,000, or $0.04
per diluted share, compared to $214,000, or $0.01 per diluted
share, a year ago.
Conference
Call:
The
Company will host a conference call at 4:30 P.M. ET today, November
8, 2018 to discuss the Company's results. Investors and interested parties may
participate in the call by dialing 877-830-2597 or 785-424-1744
(international) and referring Conference ID: PARKCITY. 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 7:30 ET today
until 11:59 p.m. ET on December 8, 2018. The Replay can be accessed
by calling 844-512-2921 (toll-free) or 412-317-6671
(international). Please enter pin number 132193 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 partners with 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 quarter ended September 30, 2018 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.
-- Financial Tables
Follow --
Park City Group, Inc.
|
|
|
|
|||
INCOME STATEMENT
|
|
|
|
|
3 Months Ended
|
|||
FY ENDS June
|
9/30/18
|
9/30/17
|
% Chg.
|
|
|
|
|
|
|
Total Revenues
|
$5,941,994
|
$4,712,165
|
26%
|
|
|
|
|||
Operating
Expenses
|
|
|
|
|
Cost of Services
and Product Support
|
(1,728,526)
|
(1,418,013)
|
22%
|
|
Sales and
Marketing
|
(1,908,024)
|
(1,585,940)
|
20%
|
|
General and
Administrative
|
(1,143,311)
|
(1,135,770)
|
1%
|
|
Depreciation and
Amortization
|
(145,375)
|
(158,803)
|
(8%)
|
|
Total Operating
Expenses
|
(4,925,236)
|
(4,298,526)
|
15%
|
|
|
|
|||
Operating Income
|
$1,016,758
|
$413,639
|
146%
|
|
|
|
|||
Interest
Income
|
35,124
|
17,798
|
97%
|
|
Interest
(Expense)
|
(10,473)
|
(39,989)
|
(74%)
|
|
Income Before
Taxes
|
1,041,409
|
391,448
|
166%
|
|
|
|
|||
Provision for
Taxes
|
(75,000)
|
(60,598)
|
24%
|
|
|
|
|||
Net Income
|
$966,409
|
$330,850
|
192%
|
|
|
|
|||
Dividends on
Preferred Stock
|
(146,611)
|
(117,160)
|
25%
|
|
|
|
|||
Net Income to
Common Shareholders
|
$819,798
|
$213,690
|
284%
|
|
|
|
|||
GAAP EPS, Basic
|
$0.04
|
$0.01
|
277%
|
|
GAAP EPS, Diluted
|
$0.04
|
$0.01
|
283%
|
|
|
|
|||
Weighted Average
Shares, Basic
|
19,786,000
|
19,424,000
|
|
|
Weighted Average
Shares, Diluted
|
20,363,000
|
20,338,000
|
|
|
Park City Group, Inc.
|
|
|
|
||||
RECONCILIATION OF NON-GAAP ITEMS
|
|
|
|
|
3 Months Ended
|
|||
FY ENDS June
|
9/30/18
|
9/30/17
|
% Chg.
|
|
|
|
|
|
|
Net Income
|
$966,409
|
$330,850
|
192%
|
|
|
|
|||
Adjustments:
|
|
|
|
|
Depreciation and
Amortization
|
145,375
|
158,803
|
(8%)
|
|
Interest Expense
(Income)
|
(24,651)
|
22,191
|
NM
|
|
Provision for
Taxes
|
75,000
|
60,598
|
24%
|
|
Other (Incl. Bad
Debt Exp.)
|
100,000
|
50,000
|
100%
|
|
Stock Compensation
Expense
|
95,688
|
198,314
|
(52%)
|
|
|
|
|||
Adjusted EBITDA
|
$1,357,821
|
$820,756
|
65%
|
|
|
|
|||
|
|
|||
Net
Income
|
$966,409
|
$330,850
|
192%
|
|
|
|
|||
Adjustments:
|
|
|
|
|
Stock Compensation
Expense
|
95,688
|
198,314
|
(52%)
|
|
Acquisition Related
Amortization
|
32,850
|
32,850
|
-
|
|
|
|
|||
Adjusted non-GAAP
Net Income
|
1,094,947
|
562,014
|
95%
|
|
|
|
|||
Preferred
Dividends
|
(146,611)
|
(117,160)
|
25%
|
|
|
|
|||
Adjusted non-GAAP
Net Income to Common
Shareholders
|
$948,336
|
$444,854
|
113%
|
|
|
|
|||
Adjusted Non-GAAP EPS
|
$0.05
|
$0.02
|
113%
|
|
|
|
|||
Weighted Average
Shares, Diluted
|
20,363,000
|
20,338,000
|
|
|
Park City Group, Inc.
|
|
|
|||
CONSOLIDATED BALANCE SHEET
|
|
|
|
Period
Ended
|
|
FY
ENDS June
|
9/30/18
|
6/30/18
|
|
|
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
Cash
|
$16,451,196
|
$14,892,439
|
Receivables, Net
Allowances
|
3,696,908
|
4,222,348
|
Contract Asset
(Current Portion of Unbilled)
|
2,197,201
|
3,502,287
|
Prepaid Expenses
and Other Current Assets
|
829,039
|
1,116,387
|
Total
Current Assets
|
$23,174,344
|
$23,733,461
|
|
||
Property and
Equipment, Net
|
$1,809,830
|
$1,896,348
|
|
||
Other
Assets:
|
|
|
Deposits, and Other
Assets
|
18,691
|
18,691
|
Contract Asset
(Long-Term Portion of Unbilled)
|
2,808,194
|
1,194,574
|
Investments
|
477,884
|
477,884
|
Customer
Relationships
|
886,950
|
919,800
|
Goodwill
|
20,883,886
|
20,883,886
|
Capitalized
Software Costs, Net
|
144,410
|
168,926
|
Total Other
Assets
|
$25,220,015
|
$23,663,761
|
|
||
Total
Assets
|
$50,204,189
|
$49,293,570
|
|
||
|
||
Liabilities
|
|
|
|
||
Current
Liabilities:
|
|
|
Accounts
Payable
|
$939,520
|
$1,490,434
|
Accrued
Liabilities
|
1,526,448
|
745,694
|
Contract Liability
(Deferred Revenue)
|
2,115,539
|
2,335,286
|
Lines of
Credit
|
4,660,000
|
3,230,000
|
Current Portion of
Notes Payable
|
36,400
|
188,478
|
Total
Current Liabilities
|
$9,277,907
|
$7,989,892
|
|
||
Long-Term
Liabilities:
|
|
|
Notes Payable, Less
Current Portion
|
267,612
|
1,592,077
|
Other Long-Term
Liabilities
|
-
|
7,275
|
Total Long-Term
Liabilities
|
$267,612
|
$1,599,352
|
|
||
Total
Liabilities
|
$9,545,519
|
$9,589,244
|
|
||
Shareholder
Equity
|
|
|
|
||
Series B
Preferred
|
$6,254
|
$6,254
|
Series B-1
Preferred
|
2,124
|
2,124
|
Common
Stock
|
197,927
|
197,738
|
Additional Paid-In
Capital
|
76,846,244
|
76,711,887
|
Accumulated
Deficit
|
(36,393,879)
|
(37,213,677)
|
|
||
Total
Shareholder Equity
|
$40,658,670
|
$39,704,326
|
|
||
Total
Liabilities and Shareholder Equity
|
$50,204,189
|
$49,293,570
|
Park City Group, Inc.
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
3
Months Ended
|
|
FY
ENDS June
|
9/30/18
|
9/30/17
|
|
|
|
Cash
Flows From Operating Activities:
|
|
|
Net
Income
|
$966,409
|
$330,850
|
Adj. to Reconcile
Net Income to Net Cash from Operating Activities:
|
|
|
Depreciation and
Amortization
|
145,376
|
158,803
|
Bad Debt
Expense
|
100,000
|
50,000
|
Stock Compensation
Expense
|
95,688
|
198,314
|
Decrease (Increase)
in Accounts Receivables
|
1,730,526
|
(711,674)
|
Decrease (Increase)
in LT Receivables, Prepaid Expenses and Other Assets
|
(1,326,272)
|
459,814
|
Increase (Decrease)
in Accounts Payable
|
(550,914)
|
324,963
|
Increase (Decrease)
in Accrued Liabilities
|
666,002
|
53,993
|
Increase (Decrease)
in Deferred Revenue
|
(220,023)
|
190,454
|
Net
Cash From (Used In) Operating Activities
|
$1,606,792
|
$1,055,517
|
|
||
Cash Flows From
Investing Activities:
|
|
|
Capitalization of
Software Costs
|
-
|
(111,241)
|
Purchase of
Property and Equipment
|
(1,492)
|
(86,732)
|
Net
Cash From (Used In) Investing Activities
|
$(1,492)
|
$(197,973)
|
|
||
Cash Flows From
Financing Activities:
|
|
|
Proceeds from
Issuance of Notes Payable
|
-
|
56,078
|
Net Increase in
Line of Credit
|
1,430,000
|
-
|
Payments on Notes
Payable and Capital Leases
|
(1,476,543)
|
(81,842)
|
Net
Cash From (Used In) Financing Activities
|
$(46,543)
|
$(25,764)
|
|
||
Net
Increase (Decrease) in Cash
|
$1,558,757
|
$831,780
|
|
||
Cash at Beginning
of Period
|
14,892,439
|
14,054,006
|
|
||
Cash
at End of Period
|
$16,451,196
|
$14,885,786
|
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.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181108005779/en/
Investor Relations:
Park
City Group, Inc.
Todd
Mitchell, CFO, 435-645-2216
investor-relations@parkcitygroup.com
or
Hayden
IR
Rob
Fink / Brett Maas
646-415-8972
/ 646-536-7331
PCYG@haydenir.com