Attached files
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| EX-99.2 - EARNINGS CALL TRANSCRIPT - PARK CITY GROUP INC | ex992.htm |
| 8-K - CURRENT REPORT - PARK CITY GROUP INC | pcyg8k.htm |
Exhibit 99.1
Park
City Group Reports 24% Increase in Revenue, Increased Net Income
for the Fiscal Fourth Quarter of 2020
Full-Year
Recurring Revenue Up 13%; Sales of Hard-To-Source Items Drive 177%
Fourth Quarter Increase in
MarketPlace
Salt Lake City, UT – September 28, 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, today
announced financial results for the fourth fiscal quarter and full
year ended June 30, 2020.
Fourth Quarter Financial and Recent Business
Highlights:
●
Total
revenue increased to $5.8 million from $4.7 million, a 24%
year-over-year increase resulting from both higher MarketPlace
revenue and recurring SaaS revenue.
●
Operating
expense increased 21% year-over-year due to higher Marketplace
costs.
●
GAAP
net income of $480,000 vs. $182,000.
●
Net
income to common shareholders of $333,000 vs. $36,000.
●
EPS
$0.02 vs. $0.00 in the prior year fourth quarter.
Randall K. Fields, Chairman and CEO of Park City
Group commented, “Our stated goal for this year was to reduce
our reliance on non-recurring license revenue and increase our
recurring SaaS revenue, giving us greater visibility and
predictability into our business. We anticipated this transition
would take approximately two years, as certain customers continued
to insist on buying rather than renting. However, we were able to
effectively complete this transition in a single year. As a result,
our recurring revenue has grown on a 11.4% CAGR over the past three
years, and in the current year, it grew 13%. Our recurring revenue
now exceeds our fixed non-MarketPlace costs. With the strongest
balance sheet in our company’s history, and a growing base of
recurring revenue, we are prudently positioned for success as the
economy continues to improve from pandemic-related
challenges.”
“Our strategy has been to utilize our unique MarketPlace
offering to help customers source hard-to-find items, and demand
for this continues as buyers struggle to identify safe, reliable
and trusted suppliers,” continued Mr. Fields. “Our
proven ability to connect fully vetted and compliant suppliers with
eager buyers is resulting in incremental transaction revenue for
us, resulting in record MarketPlace revenue. MarketPlace revenue
growth in the quarter partially offset the pandemic related
challenges in our ReposiTrak sales cycles due to slower
decision-making on the part of our customers. However, the pandemic
reinforces that more effective management of the supply chain is
critical for our customers’ and their ability to sustain
operations long term and we believe this realization will benefit
our business in the long-term.”
“The increased revenue from MarketPlace and growth in
recurring revenue enabled us to deliver another profitable year,
strengthening our balance sheet and increasing our ability to
navigate these unprecedented and uncertain times,” continued
Mr. Fields. “In addition, MarketPlace has already facilitated
future cross-selling opportunities in both compliance and supply
chain. The pandemic may continue to impact our business in the
short-term, though these challenges are largely mitigated by our
base of recurring revenue. We are increasingly optimistic about our
longer-term opportunities.”
Fourth Quarter Financial Results (three months ended June 30,
2020 vs. three months ended June 30, 2019):
Total revenue increased 23.9% to $5.8 million as compared to $4.7
million due to growth in MarketPlace revenue and a 10% increase in
recurring revenue. Total operating expense was $5.3 million, a
20.8% increase from $4.4 million. GAAP net income was $480,000, or
8.3% of revenue, versus $182,000, or 3.9% of revenue, and GAAP net
income to common shareholders was $333,000, or $0.02 per diluted
share, compared to $36,000, or $0.00 per diluted
share.
-1-
Full-Year Fiscal 2020 Results (12 months ended June 30, 2020
vs. 12 months ended June 30, 2019):
Total revenue declined 5.3% to $20.0 million for the year ended
June 30, 2020, as compared to $21.2 million during the same period
a year ago due to $3.7 million in one-time revenue that occurred in
2019 that did not repeat in 2020, partially offset by a $1.6
million increase in recurring revenue. Total operating expense was
$18.6 million, an increase of 8.0% from $17.2 million last year.
GAAP net income was $1.6 million, or 8.0% of revenue, versus $3.3
million, or 15.7% of revenue, a year ago, and GAAP net income to
common shareholders was $1.0 million, or $0.05 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. Eastern today. The
conference call will also be webcast and will be available via the
investor relations section of the Company’s website,
www.parkcitygroup.com.
Participant Dial-In Numbers:
Date:
Monday, September 28th
Time:
4:15 p.m. ET (1:15 p.m. PT)
Toll-Free
1-877-407-9716
Toll/International
1-201-493-6779
Conference
ID: 13710094
Replay Dial-In Numbers:
Toll-Free
1-844-512-2921
Toll/International
1-412-317-6671
From:
9/28/20 @ 7:15 p.m. Eastern Time
To:
10/28/20 @ 11:59 p.m. Eastern Time
Replay
Pin Number: 13710094
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.
Investor Relations Contact:
John Merrill, CFO
investor-relations@parkcitygroup.com
Or
FNK IR
Rob Fink
646.809.4048
rob@fnkir.com
-2-
PARK CITY GROUP, INC.
Consolidated Balance Sheets
|
Assets
|
June
30,
2020
|
June
30,
2019
|
|
Current
Assets
|
|
|
|
Cash
|
$20,345,330
|
$18,609,423
|
|
Receivables, net of
allowance for doubtful accounts of $251,954 and $145,825 at June 30, 2020 and 2019,
respectively
|
4,007,316
|
3,878,658
|
|
Contract asset
– unbilled current portion
|
2,300,754
|
3,023,694
|
|
Prepaid expense and
other current assets
|
495,511
|
1,037,099
|
|
|
|
|
|
Total
Current Assets
|
27,148,911
|
26,548,874
|
|
|
|
|
|
Property
and equipment, net
|
3,003,402
|
2,972,257
|
|
|
|
|
|
Other
Assets:
|
|
|
|
Deposits, and other
assets
|
22,414
|
17,146
|
|
Prepaid expense
– less current portion
|
77,030
|
-
|
|
Contract asset
– unbilled long-term portion
|
838,726
|
1,659,110
|
|
Operating lease
– right-of-use asset
|
781,137
|
-
|
|
Customer
relationships
|
657,000
|
788,400
|
|
Goodwill
|
20,883,886
|
20,883,886
|
|
Capitalized
software costs, net
|
18,539
|
70,864
|
|
|
|
|
|
Total
Other Assets
|
23,278,732
|
23,419,406
|
|
|
|
|
|
Total
Assets
|
$53,431,045
|
$52,940,537
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$407,497
|
$530,294
|
|
Accrued
liabilities
|
1,123,528
|
1,399,368
|
|
Contract liability
- deferred revenue
|
1,845,347
|
1,917,787
|
|
Lines of
credit
|
4,660,000
|
4,660,000
|
|
Operating lease
liability - current
|
85,767
|
-
|
|
Current portion of
notes payable
|
310,242
|
295,168
|
|
Current portion of
paycheck protection program loans
|
479,866
|
-
|
|
|
|
|
|
Total
current liabilities
|
8,912,247
|
8,802,617
|
|
|
|
|
|
Long-term
liabilities
|
|
|
|
Operating lease
liability – less current portion
|
695,369
|
-
|
|
Notes payable, less
current portion
|
610,512
|
920,754
|
|
Paycheck protection
program loans
|
629,484
|
-
|
|
|
|
|
|
Total
liabilities
|
10,847,612
|
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 June 30, 2020 and 2019;
|
6,254
|
6,254
|
|
Series
B-1 Preferred, 550,000 shares authorized; 212,402 shares issued and
outstanding at June 30, 2020 and 2019, respectively
|
2,124
|
2,124
|
|
Common Stock, $0.01
par value, 50,000,000 shares authorized; 19,484,485 and
19,793,372 issued and
outstanding at June 30, 2020 and 2019, respectively
|
194,847
|
197,936
|
|
Additional paid-in
capital
|
75,271,097
|
76,908,566
|
|
Accumulated
deficit
|
(32,890,889)
|
(33,897,714)
|
|
|
|
|
|
Total
stockholders’ equity
|
42,583,433
|
43,217,166
|
|
|
|
|
|
Total
liabilities and stockholders’ equity
|
$53,431,045
|
$52,940,537
|
-3-
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
|
|
For
the Years Ended June 30,
|
|
|
|
2020
|
2019
|
|
|
|
|
|
Revenue
|
$20,038,054
|
$21,169,608
|
|
|
|
|
|
Operating
expense:
|
|
|
|
Cost of revenue and
product support
|
6,997,424
|
5,830,084
|
|
Sales and
marketing
|
5,775,309
|
6,006,597
|
|
General and
administrative
|
4,948,443
|
4,742,205
|
|
Depreciation and
amortization
|
838,866
|
601,433
|
|
Total operating
expense
|
18,560,042
|
17,180,319
|
|
|
|
|
|
Income from
operations
|
1,478,012
|
3,989,289
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
Interest
income
|
224,908
|
247,059
|
|
Interest
expense
|
(67,732)
|
(42,684)
|
|
Gain (loss) on
disposition of investment
|
-
|
(148,548)
|
|
|
|
|
|
Income before
income taxes
|
1,635,188
|
4,045,116
|
|
|
|
|
|
(Provision) for
income taxes
|
(41,919)
|
(142,710)
|
|
|
|
|
|
Net
income
|
1,593,269
|
3,902,406
|
|
|
|
|
|
Dividends on
Preferred Stock
|
(586,444)
|
(586,443)
|
|
|
|
|
|
Net income
applicable to common shareholders
|
$1,006,825
|
$3,315,963
|
|
|
|
|
|
Weighted average
shares, basic
|
19,651,000
|
19,849,000
|
|
Weighted average
shares, diluted
|
19,863,000
|
20,368,000
|
|
Basic earnings per
share
|
$0.05
|
$0.17
|
|
Diluted earnings
per share
|
$0.05
|
$0.16
|
-4-
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
|
|
For
the Years Ended June 30,
|
|
|
|
2020
|
2019
|
|
Cash flows from
operating activities:
|
|
|
|
Net
income
|
$1,593,269
|
$3,902,406
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
803,002
|
601,433
|
|
Amortization of
operating right of use asset
|
81,604
|
-
|
|
Stock compensation
expense
|
399,681
|
551,881
|
|
Bad debt
expense
|
800,000
|
510,000
|
|
Decrease (increase)
in:
|
|
|
|
Trade
receivables
|
(205,718)
|
312,283
|
|
Long-term
receivables, prepaids and other assets
|
1,279,674
|
(383,703)
|
|
Increase (decrease)
in:
|
|
|
|
Accounts
payable
|
(122,797)
|
(960,140)
|
|
Accrued
liabilities
|
(278,255)
|
462,194
|
|
Operating lease
liability
|
(81,605)
|
-
|
|
Deferred
revenue
|
(72,716)
|
(417,499)
|
|
|
|
|
|
Net cash provided
by operating activities
|
4,196,139
|
4,578,855
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase
of property and equipment
|
(650,422)
|
(1,447,880)
|
|
Sale of long-term investments
|
-
|
477,884
|
|
|
|
|
|
Net
cash used in investing activities
|
(650,422)
|
(969,996)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds
from employee stock purchase plans
|
120,923
|
-
|
|
Proceeds
from exercises of options and warrants
|
-
|
164,997
|
|
Proceeds from issuance of note payable
|
1,109,350
|
1,268,959
|
|
Net
increase in lines of credit
|
-
|
1,430,000
|
|
Dividends
paid
|
(586,444)
|
(439,833)
|
|
Common
stock buy-back
|
(2,158,471)
|
(482,406)
|
|
Payments
on notes payable and capital leases
|
(295,168)
|
(1,833,592)
|
|
|
|
|
|
Net
cash provided by (used in) financing activities
|
(1,809,810)
|
108,125
|
|
|
|
|
|
Net increase in
cash and cash equivalents
|
1,735,907
|
3,716,984
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
18,609,423
|
14,892,439
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$20,345,330
|
$18,609,423
|
-5-