Business Wire | May 17, 2021 04:06PM EDT

Park City Group Reports 30% Increase in Revenue, Net Income Increases 184% for Fiscal Third Quarter 2021

May 17, 2021

SALT LAKE CITY--(BUSINESS WIRE)--May 17, 2021--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, improve supply chain efficiencies, and source hard-to-find items, today announced financial results for the third fiscal quarter ended March 31, 2021.

Third Quarter Financial and Recent Business Highlights:

* Total revenue increased 30.0% to $6.0 million from $4.6 million due to higher MarketPlace revenue and recurring SaaS revenue. * Recurring, SaaS revenue from compliance, supply chain, out-of-stock and other software solutions, increased 13% to $ 4.5 million. * GAAP net income of $773,000 million vs. net income of $272,000 in the prior year. * Net income to common shareholders of $627,000, vs. $125,000. * EPS $0.03 vs. $0.01 in the prior year third quarter.

Randall K. Fields, Chairman and CEO of Park City Group commented, "Our strong performance in the quarter reflects 30% top line and 184% net income growth, demonstrating the inherent leverage of our business model. MarketPlace revenue soared as customers utilized this unique solution to find hard-to-source items amidst the pandemic. But even as our revenue mix resulted in more transactional, lower-margin MarketPlace revenue this quarter, our bottom-line conversion still grew exponentially demonstrating the strong leverage inherent in our business model. As the pandemic begins to abate and MarketPlace revenue moderates, we expect our mix to shift in favor of our traditional SaaS solutions where budgets are beginning to loosen, likely resulting in slower top-line growth but increased profitability."

"Our business is highly scalable," added Mr. Fields. "We can significantly increase our revenue, especially our software revenue, and particularly recurring compliance and supply chain revenue, driving incremental profitability. Meanwhile, the value we have provided our customers with the MarketPlace offering has further bolstered our relationships with customers. Our network creates value far beyond the transaction, as we are perhaps the only partner who can help customers source, vet, and transact business across the entire supply chain."

Fiscal 2021 Year to Date Results (nine months ended March 31, 2021 vs. nine months ended March 31, 2020):

Total revenue increased 15% to $16.4 million for the nine months, as compared to $14.3 million during the same period a year ago. Total operating expense was $14.7 million, an increase of 11% from $13.3 million a year ago. GAAP net income was $3.0 million versus $1.1 million a year ago, and GAAP net income to common shareholders was $2.5 million, or $0.13 per diluted share, compared to $674,000, or $0.03 per diluted share, a year ago.

Third Quarter Financial Results (three months ended March 31, 2021 vs. three months ended March 31, 2020):

Total revenue increased 30% to $6.0 million as compared to $4.6 million due largely to growth in MarketPlace revenue and a 13% increase in recurring revenue. Total operating expense increased 21% to $5.3 million due to increased cost of revenue and product support due to a greater portion of MarketPlace revenue. GAAP net income was $773,000, versus $272,000. GAAP net income to common shareholders was $627,000, or $0.03 per diluted share, compared to $125,000, or $0.01 per diluted share.

Balance Sheet:

The Company had $23.2 million in cash and cash equivalents at March 31, 2021, compared to $17.9 million at March 31, 2020 and $20.3 million at June 30, 2020.

Conference Call:

The Company will host a conference call at 4:15 P.M. Eastern today to discuss the Company's results. 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, May 17th Time: 4:15 p.m. ET (1:15 P.M. PT) TOLL-FREE 1-877-300-8521 TOLL/INTERNATIONAL 1-412-317-6026 Conference ID: 10156464

Replay Dial-In Numbers: TOLL-FREE 1-844-512-2921 TOLL/INTERNATIONAL 1-412-317-6671 From: 5/17/21 @ 7:15 P.M. Eastern Time To: 6/17/21 @ 11:59 P.M. Eastern Time Replay Pin Number: 10156464

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 June 30, 2020 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)

March 31, June 30,Assets 2021 2020

Current Assets

Cash $ 23,176,092 $ 20,345,330

Receivables, net of allowance for doubtfulaccounts of $253,037 and $251,954 at March 4,598,701 4,007,316 31, 2021 and June 30, 2020, respectively

Contract asset - unbilled current portion 2,390,104 2,300,754

Prepaid expense and other current assets 1,108,589 495,511



Total Current Assets 31,273,486 27,148,911



Property and equipment, net 2,673,705 3,003,402



Other Assets:

Deposits, and other assets 22,414 22,414

Prepaid expense - less current portion 59,989 77,030

Contract asset - unbilled long-term portion 43,052 838,726

Operating lease - right-of-use asset 717,241 781,137

Customer relationships 558,450 657,000

Goodwill 20,883,886 20,883,886

Capitalized software costs, net - 18,539



Total Other Assets 22,285,032 23,278,732



Total Assets $ 56,232,223 $ 53,431,045



Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $ 1,498,801 $ 407,497

Accrued liabilities 1,705,269 1,123,528

Contract liability - deferred revenue 1,392,990 1,845,347

Lines of credit 6,000,000 4,660,000

Operating lease liability - current 89,041 85,767

Current portion of notes payable - 310,242

Current portion of paycheck protection - 479,866 program loans



Total current liabilities 10,686,101 8,912,247



Long-term liabilities

Operating lease liability - less current 628,200 695,369 portion

Notes payable - less current portion - 610,512

Paycheck protection program loans - 629,484



Total liabilities 11,314,301 10,847,612



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 March 31, 2021 and June 30,2020, respectively

Series B-1 Preferred, 550,000 sharesauthorized; 212,402 shares issued and 2,124 2,124 outstanding at March 31, 2021 and June 30,2020, respectively

Common Stock, $0.01 par value, 50,000,000shares authorized; 19,478,038 and 194,783 194,847 19,484,485 issued and outstanding at March31, 2021 and June 30, 2020, respectively

Additional paid-in capital 75,094,601 75,271,097

Accumulated deficit (30,379,840 ) (32,890,889 )



Total stockholders' equity 44,917,922 42,583,433



Total liabilities and stockholders' equity $ 56,232,223 $ 53,431,045

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Operations (Unaudited)

Three Months Ended

March 31,

Nine Months Ended

March 31,

2021

2020

2021

2020

Revenue

$

6,022,540

$

4,633,244

$

16,422,146

$

14,270,660

Operating expense:

Cost of services and product support

2,634,224

1.369,421

6,706,769

4,622,844

Sales and marketing

1,155,266

1,654,189

3,643,602

4,515,569

General and administrative

1,255,410

1,179,851

3,568,474

3,516,313

Depreciation and amortization

259,343

192,860

769,440

609,037

Total operating expense

5,304,243

4,396,321

14,688,285

13,263,763

Income from operations

718,297

236,923

1,733,861

1,006,897

Other income (expense):

Interest income

60,234

53,075

176,078

201,788

Interest expense

(4,248

)

(16,953

)

(76,700

)

(53,593

)

Unrealized gain (loss) on short term investments

(1,131

)

-

54,434

-

Gain on debt extinguishment

10,000

-

1,109,350

-

Income before income taxes

783,152

273,045

2,997,023

1,155,092

(Provision) for income taxes:

(9,955

)

(1,058

)

(46,141

)

(41,651

)

Net income

773,197

271,987

2,950,882

1,113,441

Dividends on preferred stock

(146,611

)

(146,611

)

(439,833

)

(439,833

)

Net income applicable to common shareholders

$

626,586

$

125,376

$

2,511,049

$

673,608

Weighted average shares, basic

19,555,000

19,588,000

19,511,000

19,714,000

Weighted average shares, diluted

19,942,000

19,776,000

19,744,000

19,942,000

Basic income per share

$

0.03

$

0.01

$

0.13

$

0.03

Diluted income per share

$

0.03

$

0.01

$

0.13

$

0.03

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Operations (Unaudited)

Three Months Ended Nine Months Ended March 31, March 31,

2021 2020 2021 2020



Revenue $ 6,022,540 $ 4,633,244 $ 16,422,146 $ 14,270,660



Operating expense:

Cost ofservices and 2,634,224 1.369,421 6,706,769 4,622,844 productsupport

Sales and 1,155,266 1,654,189 3,643,602 4,515,569 marketing

General and 1,255,410 1,179,851 3,568,474 3,516,313 administrative

Depreciationand 259,343 192,860 769,440 609,037 amortization



Totaloperating 5,304,243 4,396,321 14,688,285 13,263,763 expense



Income from 718,297 236,923 1,733,861 1,006,897 operations



Other income (expense):

Interest 60,234 53,075 176,078 201,788 income

Interest (4,248 ) (16,953 ) (76,700 ) (53,593 )expense

Unrealizedgain (loss) on (1,131 ) - 54,434 - short terminvestments

Gain on debt 10,000 - 1,109,350 - extinguishment



Income before 783,152 273,045 2,997,023 1,155,092 income taxes



(Provision)for income (9,955 ) (1,058 ) (46,141 ) (41,651 )taxes:

Net income 773,197 271,987 2,950,882 1,113,441



Dividends onpreferred (146,611 ) (146,611 ) (439,833 ) (439,833 )stock



Net incomeapplicable to $ 626,586 $ 125,376 $ 2,511,049 $ 673,608 commonshareholders



Weightedaverage 19,555,000 19,588,000 19,511,000 19,714,000 shares, basic

Weightedaverage 19,942,000 19,776,000 19,744,000 19,942,000 shares,diluted

Basic income $ 0.03 $ 0.01 $ 0.13 $ 0.03 per share

Diluted income $ 0.03 $ 0.01 $ 0.13 $ 0.03 per share

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Cash Flows (Unaudited)

Nine Months

Ended March 31,

2021

2020

Cash flows operating activities:

Net income

$

2,950,882

$

1,113,441

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

769,440

609,037

Amortization of operating right of use asset

63,896

60,793

Bad debt expense

516,694

291,630

Stock compensation expense

249,733

375,000

Gain on debt extinguishment

(1,109,350

)

-

(Increase) decrease in:

Accounts receivables

(1,508,097

)

(350,908

)

Long-term receivables, prepaids and other assets

293,042

884,429

(Decrease) increase in:

Accounts payable

1,091,304

(187,291

)

Accrued liabilities

549,537

(247,233

)

Operating lease liability

(63,895

)

(60,794

)

Deferred revenue

(452,633

)

(213,677

)

Net cash provided by operating activities

3,350,553

2,274,427

Cash flows investing activities:

Purchase of property and equipment

(105,391

)

(642,922

)

Net cash used in investing activities

(105,391

)

(642,922

)

Cash flows financing activities:

Net increase in lines of credit

1,340,000

340,000

Common stock buyback/retirement

(508,243

)

(2,158,471

)

Proceeds from employee stock plan

114,430

120,923

Dividends paid

(439,833

)

(439,833

)

Payments on notes payable

(920,754

)

(219,992

)

Net cash used in financing activities

(414,400

)

(2,357,373

)

Net increase (decrease) in cash and cash equivalents

2,830,762

(725,868

)

Cash and cash equivalents at beginning of period

20,345,330

18,609,423

Cash and cash equivalents at end of period

$

23,176,092

$

17,883,555

View source version on businesswire.com: https://www.businesswire.com/news/home/20210517005866/en/

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