Attached files
| file | filename |
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| EX-99 - EXHIBIT 99.1 - PARK CITY GROUP INC | ex99-1.htm |
| 8-K - CURRENT REPORT - PARK CITY GROUP INC | pcyg8k_may152020.htm |
Exhibit 99.2
Park City Group Reports Financial Results for the Fiscal Third
Quarter of 2020
Company Works Aggressively to Help Grocery Customers Address Supply
Chain Challenges and Secure Hard to Source Items in an Uncertain
Market
Launches FoodSourceUSA Sourcing Platform Supplying Critical Data to
Address Chronic Foody Supply Imbalances Caused by
COVID-19
SALT
LAKE CITY, UT – May 11, 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 third fiscal quarter ended March 31,
2020.
Third Quarter Financial and Recent Business
Highlights:
●
Total revenue
decreased 7% year-over-year due to lower one-time revenue,
partially offset by higher recurring revenue.
●
Recurring revenue
increased 5% comparatively, constituting 90% of total
revenue.
●
Operating expense
increased 10% year-over-year due to higher Marketplace
costs.
●
Net income of
$272,000.
●
EPS $0.01 vs. $0.05
in the prior year third quarter.
Randall
K. Fields, Chairman and CEO of Park City Group commented,
“The COVID-19 pandemic has impacted nearly everyone, and
certainly, the grocery supply chain has been profoundly affected.
In the short term, this situation has benefited transaction revenue
from our MarketPlace platform, while impacting ReposiTrak revenues
as our customers shifted their full attention to more pressing
pandemic-related matters. Simultaneously, this situation has made
what we do for our customers even more important, reinforcing our
position as a key contributor to food safety and supply chain
continuity. We take this public trust very seriously. During the
quarter, we launched our FoodSourceUSA program, providing our
proprietary supply chain and out-of-stock data to the Department of
Defense, to proactively address chronic imbalances in the food
supply chain caused by the COVID-19 and other situations. The
pandemic has strengthened the essential role we play in the food
supply chain, ensuring food safety, managing scan-based trading
that underpins much of the grocery supply chain, and connecting
retailers and suppliers.”
“Our
Marketplace platform saw an increase in use, as retailers search
for suppliers of in-demand and hard to source items ranging from
personal protective equipment (PPE) to food storage items like
chest freezers and other products that allow retailers and their
customers to adapt to shelter-in-place and work-from-home
mandates,” continued Mr. Fields. “However, as one would
expect, our growth in Tier 2 hubs and supply chain implementations
was negatively impacted as the attention of retailers and supplier
was redirected to emergencies. This fact, combined with the absence
of one-time revenue, resulted in diminished margins and reduced
profitability. We have taken steps to reduce our expenditures
during these challenging times, and we are positioning ourselves to
weather the storm. As things begin to normalize, I am optimistic
that we have proven our value to our customers. We believe the
disruptions will cause a great deal of re-thinking about the food
supply chain, and the we will be able to assist our customers
building a more resilient system in the future.”
Third Quarter Financial Results (three months ended March 31, 2020 vs. three
months ended March 31, 2019):
Total
revenue declined 7% to $4.6 million as compared to $5.0 million due
to less one-time revenues and implementation delays due to
COVID-19. Total operating expense was $4.4 million, a 10% increase
from $4.0 million. GAAP net income was $272,000, or 5.9% of
revenue, versus $1.1 million, or 21.3% of revenue, and GAAP net
income to common shareholders was $125,000, or $0.01 per diluted
share, compared to $921,000, or $0.05 per diluted
share.
Fiscal 2020 Year to Date Results (nine months ended March 31, 2020 vs. nine
months ended March 31, 2019):
Total
revenue declined 14% to $14.3 million for the nine months ended
March 31, 2020, as compared to $16.5 million during the same period
a year ago due to $2.7 million in one-time revenue that occurred in
2019 that did not repeat in 2020. Total operating expense was $13.3
million, an increase of 4% from $12.8 million a year ago. GAAP net
income was $1.1 million, or 7.8% of revenue, versus $3.7 million,
or 22.5% of revenue, a year ago, and GAAP net income to common
shareholders was $674,000, or $0.03 per diluted share, compared to
$3.3 million, or $0.16 per diluted share, a year ago.
Conference Call:
The
Company will host a conference call at 4:15 p.m. ET today, May 11,
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: 13703488. 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 June 11, 2020. The replay can be
accessed by calling 1-844-512-2921 (toll-free) or 1-412-317-6671
(international). Please enter pin number 13703488 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.
Contacts
Investor Relations Contact:
John
Merrill, CFO
investor-relations@parkcitygroup.com
Or
FNK
IR
Rob
Fink
646.809.4048
rob@fnkir.com
|
PARK
CITY GROUP, INC.
Consolidated
Condensed Balance Sheets (Unaudited)
|
||
|
Assets
|
March 31,
2020
|
June 30,
2019
|
|
Current
assets
|
|
|
|
Cash
|
$17,883,555
|
$18,609,423
|
|
Receivables, net of
allowance for doubtful accounts of $521,895 and $145,825 at March
31, 2020 and June 30, 2019, respectively
|
4,469,812
|
3,878,658
|
|
Contract asset
– unbilled current portion
|
2,408,448
|
3,023,694
|
|
Prepaid expense and
other current assets
|
687,328
|
1,037,099
|
|
|
|
|
|
Total
current assets
|
25,449,143
|
26,548,874
|
|
|
|
|
|
Property
and equipment, net
|
3,147,747
|
2,972,257
|
|
|
|
|
|
Other
assets:
|
|
|
|
Deposits, and other
assets
|
22,414
|
17,146
|
|
Contract asset
– unbilled long-term portion
|
1,119,184
|
1,659,110
|
|
Operating
lease-right-of-use asset
|
801,948
|
-
|
|
Customer
relationships
|
689,850
|
788,400
|
|
Goodwill
|
20,883,886
|
20,883,886
|
|
Capitalized
software costs, net
|
27,809
|
70,864
|
|
|
|
|
|
Total
other assets
|
23,545,091
|
23,419,406
|
|
|
|
|
|
Total
assets
|
$52,141,981
|
$52,940,537
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$343,003
|
$530,294
|
|
Accrued
liabilities
|
1,159,354
|
1,399,368
|
|
Contract liability
- deferred revenue
|
1,704,386
|
1,917,787
|
|
Lines of
credit
|
5,000,000
|
4,660,000
|
|
Operating lease
liability - current
|
84,707
|
-
|
|
Current portion of
notes payable
|
306,403
|
295,168
|
|
|
|
|
|
Total
current liabilities
|
8,597,853
|
8,802,617
|
|
|
|
|
|
Long-term
liabilities
|
|
|
|
Operating lease
liability – less current portion
|
717,240
|
-
|
|
Notes payable, less
current portion
|
689,527
|
920,754
|
|
|
|
|
|
Total
liabilities
|
10,004,620
|
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
March 31, 2020 and June 30, 2019;
|
6,254
|
6,254
|
|
Series B-1
Preferred, 550,000 shares authorized; 212,402 shares issued and
outstanding at March 31, 2020 and June 30, 2019,
respectively
|
2,124
|
2,124
|
|
Common Stock, $0.01
par value, 50,000,000 shares authorized: 19,457,987 and 19,793,372
issued and outstanding at March 31, 2020 and June 30, 2019,
respectively
|
194,582
|
197,936
|
|
Additional paid-in
capital
|
75,158,507
|
76,908,566
|
|
Accumulated
deficit
|
(33,224,106)
|
(33,897,714)
|
|
|
|
|
|
Total
stockholders’ equity
|
42,137,361
|
43,217,166
|
|
|
|
|
|
Total
liabilities and stockholders’ equity
|
$52,141,981
|
$52,940,537
|
|
PARK
CITY GROUP, INC.
Consolidated
Condensed Statements of Operations (Unaudited)
|
||||
|
|
Three
Months Ended
March
31,
|
Nine
Months Ended
March
31,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
||
|
Revenue
|
$4,633,244
|
$5,006,132
|
$14,270,660
|
$16,513,363
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
Cost of services
and product support
|
1,369,421
|
1,342,051
|
4,622,844
|
4,341,236
|
|
Sales and
marketing
|
1,654,189
|
1,485,785
|
4,515,569
|
4,533,664
|
|
General and
administrative
|
1,179,851
|
1,020,652
|
3,516,313
|
3,490,698
|
|
Depreciation and
amortization
|
192,860
|
140,312
|
609,037
|
429,717
|
|
|
|
|
|
|
|
Total operating
expense
|
4,396,321
|
3,988,800
|
13,263,763
|
12,795,315
|
|
|
|
|
|
|
|
Income
from operations
|
236,923
|
1,017,332
|
1,006,897
|
3,718,048
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
income
|
53,075
|
75,670
|
201,788
|
165,567
|
|
Interest
expense
|
(16,953)
|
(4,706)
|
(53,593)
|
(20,802)
|
|
|
|
|
|
|
|
Income before
income taxes
|
273,045
|
1,088,296
|
1,155,092
|
3,862,813
|
|
|
|
|
|
|
|
(Provision) for
income taxes:
|
(1,058)
|
(20,210)
|
(41,651)
|
(142,710)
|
|
Net
income
|
271,987
|
1,068,086
|
1,113,441
|
3,720,103
|
|
|
|
|
|
|
|
Dividends on
preferred stock
|
(146,611)
|
(146,610)
|
(439,833)
|
(439,832)
|
|
|
|
|
|
|
|
Net
income applicable to common shareholders
|
$125,376
|
$921,476
|
$673,608
|
$3,280,271
|
|
|
|
|
|
|
|
Weighted average
shares, basic
|
19,588,000
|
19,861,000
|
19,714,000
|
19,823,000
|
|
Weighted average
shares, diluted
|
19,776,000
|
20,390,000
|
19,942,000
|
20,369,000
|
|
Basic income per
share
|
$0.01
|
$0.05
|
$0.03
|
$0.17
|
|
Diluted income per
share
|
$0.01
|
$0.05
|
$0.03
|
$0.16
|
|
PARK
CITY GROUP, INC.
Consolidated
Condensed Statements of Cash Flows (Unaudited)
|
||
|
|
Nine
Months Ended
March
31,
|
|
|
|
2020
|
2019
|
|
Cash flows
operating activities:
|
|
|
|
Net income
|
$1,113,441
|
$3,720,103
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
609,037
|
429,718
|
|
Amortization of
operating right of use asset
|
60,793
|
-
|
|
Stock compensation
expense
|
291,630
|
473,556
|
|
Bad debt
expense
|
375,000
|
350,000
|
|
(Increase) decrease
in:
|
|
|
|
Accounts
receivables
|
(350,908)
|
17,001
|
|
Long-term
receivables, prepaids and other assets
|
884,429
|
(759,122)
|
|
(Decrease) increase
in:
|
|
|
|
Accounts
payable
|
(187,291)
|
(867,631)
|
|
Accrued
liabilities
|
(247,233)
|
392,089
|
|
Operating lease
liability
|
(60,794)
|
-
|
|
Deferred
revenue
|
(213,677)
|
(271,752)
|
|
Net
cash provided by operating activities
|
2,274,427
|
3,483,962
|
|
|
|
|
|
Cash flows
investing activities:
|
|
|
|
Purchase of
long-term investments
|
-
|
1,000
|
|
Purchase of
property and equipment
|
(642,922)
|
(45,197)
|
|
Net
cash used in investing activities
|
(642,922)
|
(44,197)
|
|
|
|
|
|
Cash flows
financing activities:
|
|
|
|
Net increase in
lines of credit
|
340,000
|
1,430,000
|
|
Proceeds from
exercise of warrants
|
-
|
164,997
|
|
Common stock
buyback/retirement
|
(2,158,471)
|
-
|
|
Proceeds from
employee stock plan
|
120,923
|
-
|
|
Dividends
paid
|
(439,833)
|
(293,222)
|
|
Payments on notes
payable and capital leases
|
(219,992)
|
(1,488,610)
|
|
Net
cash used in financing activities
|
(2,357,373)
|
(186,835)
|
|
|
|
|
|
Net increase in
cash and cash equivalents
|
(725,868)
|
3,252,930
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
18,609,423
|
14,892,439
|
|
Cash
and cash equivalents at end of period
|
$17,883,555
|
$18,145,369
|