Business Wire | Sep 28, 2020 08:00AM EDT

Park City Group Reports 24% Increase in Revenue, Increased Net Income for the Fiscal Fourth Quarter of 2020

Sep. 28, 2020

SALT LAKE CITY--(BUSINESS WIRE)--Sep. 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.

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.

PARK CITY GROUP, INC.Consolidated Balance Sheets

Assets June 30, June 30, 2020 2019

Current Assets

Cash $ 20,345,330 $ 18,609,423

Receivables, net of allowance for doubtfulaccounts of $251,954 and $145,825 at June 4,007,316 3,878,658 30, 2020 and 2019, respectively

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 479,866 - program loans



Total current liabilities 8,912,247 8,802,617



Long-term liabilities

Operating lease liability - less current 695,369 - portion

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 sharesauthorized; 625,375 shares issued and 6,254 6,254 outstanding at June 30, 2020 and 2019;

Series B-1 Preferred, 550,000 sharesauthorized; 212,402 shares issued and 2,124 2,124 outstanding at June 30, 2020 and 2019,respectively

Common Stock, $0.01 par value, 50,000,000shares authorized; 19,484,485 and 194,847 197,936 19,793,372 issued and outstanding at June30, 2020 and 2019, respectively

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

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

PARK CITY GROUP, INC. AND SUBSIDIARIESConsolidated 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

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20200928005192/en/

CONTACT: Investor Relations Contact: John Merrill, CFO investor-relations@parkcitygroup.com Or FNK IR Rob Fink 646.809.4048 rob@fnkir.com