Business Wire | Nov 15, 2021 04:06PM EST

Park City Group Increases Net Income 71% for First Quarter of Fiscal 2022

Nov. 15, 2021

SALT LAKE CITY--(BUSINESS WIRE)--Nov. 15, 2021--Park City Group, Inc. (NASDAQ: PCYG), the parent company of ReposiTrak, Inc., which operates a B2B ecommerce, compliance, and supply chain platform that largely partners with grocery 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 first quarter of fiscal 2022, the period ended September 30, 2021.

First Quarter Financial Highlights:

* Total revenue decreased 13% to $4.6 million from $5.2 million due to planned conversion of transactional to recurring MarketPlace revenue. * Recurring SaaS revenue increased 10% to $4.4 million. * Total operating expenses decreased 26% to $3.4 million from $4.6 million due to lower Marketplace costs and lower overall SG&A expenses. * Net Income margin doubled from 11% to 21%. * GAAP net income increased 71% to $947,000 vs. net income of $555,000 in the prior year. * Net income to common shareholders increased 96% to $800,000, vs. $408,000. * EPS doubled to $0.04 vs. $0.02 in the prior year first quarter. * Cash from operations of $1.1 million. * The Company repaid its $6 million revolving line of credit and has no debt.

Randall K. Fields, Chairman and CEO of Park City Group commented, "This quarter proceeded according to plan. Our continuing goal is to grow our recurring revenue by 10-20% per year, convert Marketplace transactional revenue into SaaS and prepare for our traceability initiative."

Mr. Fields continued, "We delivered 10% recurring revenue growth, doubled our net margins, and delivered a 71% increase in net income, simultaneously paying off $6 million of debt. As a result, we have no debt, more than $20 million in cash, and a growing base of recurring revenue that more than covers our fixed cash costs for almost two years. Our compliance business and supply chain businesses are both growing well, and as the industry adjusts to the current environment, we see opportunity in the balance of the current fiscal year. More importantly, we are laser-focused across the business in preparing ourselves and our customers for the change in Food Safety Rules that will likely begin next year."

"Interest in our track and trace capabilities is extremely high and increasing, likely leading to more than 10 partner trials, well ahead of our plan," continued Mr. Fields. "We expect even more interest in this solution as the FDA continues to advance the traceability rule included in the Food Safety Modernization Act (FSMA), and we fully expect to be in position for rapid onboarding as the FDA mandates are announced. This represents a very significant and customer-required opportunity; we will be ready for the emergence of Traceability as a crisis for the industry and ultimately our customers- a crisis we are uniquely equipped to remedy."

First Quarter Financial Results (three months ended September 30, 2021 vs. three months ended September 30, 2020):

Total revenue decreased 13% to $4.6 million as compared to $5.2 million due largely to a nearly $1 million decrease in MarketPlace revenue. This was partially offset by a 10% increase in core recurring SaaS revenue. Total operating expense decreased 26% to $3.4 million due to a decrease in cost of goods related to the lower MarketPlace revenue. GAAP net income was $947,000, versus $555,000. GAAP net income to common shareholders was $800,000, or $0.04 per diluted share, compared to $408,000, or $0.02 per diluted share.

Share Repurchases:

In the first quarter, the Company repurchased 7,600 shares at an average price of $5.43 for a total of $41,276. To date, the Company has repurchased 718,394 shares at an average price of $5.58 for a total of $4.0 million. The Company has $11.9 million remaining on the $12 million buyback authorization.

Balance Sheet:

The Company had $20.4 million in cash and cash equivalents at September 30, 2021, compared to $24.1 million at June 30, 2021. During the quarter, Park City fully paid off its working line of credit in the amount of $6.0 million.

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 November 15, 2021 Time: 4:15 p.m. ET (1:15 p.m. PT) Toll-Free: 1-844-826-3035 Toll/International 1-412-317-5195 Conference ID: 10161813

Replay Dial-In Numbers:Toll Free: 1-844-512-2921 Toll/International: 1-412-317-6671 Replay Start: Monday November 15, 2021, 7:15 p.m. ET Replay Expiry: Wednesday December 15, 2021, 11:59 p.m. ET Replay Pin Number: 10161813

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)

September 30, June 30,Assets 2021 2021

Current Assets

Cash $ 20,431,158 $ 24,070,322

Receivables, net of allowance for doubtfulaccounts of $252,278 and $234,693 at 3,997,676 3,891,699 September 30, 2021 and June 30, 2021,respectively

Contract asset - unbilled current portion 984,155 1,248,936

Prepaid expense and other current assets 684,310 490,817

Total Current Assets 26,097,299 29,701,774



Property and equipment, net 1,017,202 2,589,194



Other Assets:

Deposits and other assets 22,414 22,414

Prepaid expense - less current portion 34,907 47,987

Contract asset - unbilled long-term portion 291,833 408,925

Operating lease - right-of-use asset 673,319 695,371

Customer relationships 492,750 525,600

Goodwill 20,883,886 20,883,886

Capitalized software costs, net 157,420 171,732



Total Other Assets 22,556,529 22,755,915



Total Assets $ 49,671,030 $ 55,046,883



Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $ 371,825 $ 467,194

Accrued liabilities 738,283 988,092

Contract liability - deferred revenue 1,758,710 1,755,341

Lines of credit - 6,000,000

Operating lease liability - current 91,297 90,156



Total current liabilities 2,960,115 9,300,783



Long-term liabilities

Operating lease liability - less current 582,022 605,214 portion



Total liabilities 3,542,137 9,905,997



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 September 30, 2021 and June30, 2021;

Series B-1 Preferred, 550,000 sharesauthorized; 212,402 shares issued and 2,124 2,124 outstanding at September 30, 2021 and June30, 2021, respectively

Common Stock, $0.01 par value, 50,000,000shares authorized; 19,387,552 and19,351,935 issued and outstanding at 193,878 193,522 September 30, 2021 and June 30, 2021,respectively

Additional paid-in capital 74,486,369 74,298,924

Accumulated deficit (28,559,732 ) (29,359,938 )



Total stockholders' equity 46,128,893 45,140,886



Total liabilities and stockholders' equity $ 49,671,030 $ 55,046,883

PARK CITY GROUP, INC.

Consolidated Condensed Statements ofOperations (Unaudited)

Three Months Ended

September 30,

2021

2020

Revenue

$

4,559,677

$

5,225,402

Operating expense:

Cost of revenue and product support

846,487

1,980,957

Sales and marketing

1,188,893

1,283,041

General and administrative

1,096,656

1,081,925

Depreciation and amortization

261,164

248,500

Total operating expense

3,393,200

4,594,423

Income from operations

1,166,477

630,979

Other income (expense):

Interest income

55,156

34,341

Interest expense

(2,898

)

(70,545

)

Other gain (loss)

(83,081

)

-

Unrealized gain (loss) on short term investments

(149,291

)

(16,263

)

Income before income taxes

986,363

578,512

(Provision) for income taxes:

(39,546

)

(23,686

)

Net income

946,817

554,826

Dividends on preferred stock

(146,611

)

(146,611

)

Net income applicable to Common Stockholders

$

800,206

$

408,215

Weighted average shares, basic

19,383,000

19,489,000

Weighted average shares, diluted

19,669,000

19,642,000

Basic income per share

$

0.04

$

0.02

Diluted income per share

$

0.04

$

0.02

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Operations (Unaudited)

Three Months Ended September 30,

2021 2020



Revenue $ 4,559,677 $ 5,225,402



Operating expense:

Cost of revenue and product support 846,487 1,980,957

Sales and marketing 1,188,893 1,283,041

General and administrative 1,096,656 1,081,925

Depreciation and amortization 261,164 248,500



Total operating expense 3,393,200 4,594,423



Income from operations 1,166,477 630,979



Other income (expense):

Interest income 55,156 34,341

Interest expense (2,898 ) (70,545 )

Other gain (loss) (83,081 ) -

Unrealized gain (loss) on short term (149,291 ) (16,263 )investments



Income before income taxes 986,363 578,512



(Provision) for income taxes: (39,546 ) (23,686 )

Net income 946,817 554,826



Dividends on preferred stock (146,611 ) (146,611 )



Net income applicable to Common Stockholders $ 800,206 $ 408,215



Weighted average shares, basic 19,383,000 19,489,000

Weighted average shares, diluted 19,669,000 19,642,000

Basic income per share $ 0.04 $ 0.02

Diluted income per share $ 0.04 $ 0.02

PARKCITY GROUP, INC.

Consolidated Condensed Statements ofCash Flows (Unaudited)

Three Months Ended

September 30,

2021

2020

Cash flows from operating activities:

Net income

$

946,817

$

554,826

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

261,164

248,500

Amortization of operating right-of-use asset

22,051

20,965

Stock compensation expense

88,246

93,432

Bad debt expense

125,000

125,000

Loss on sale of property and equipment

107,820

-

Gain on disposal of assets

(24,737

)

-

(Increase) decrease in:

Accounts receivables

(258,029

)

(1,154,077

)

Long-term receivables, prepaid and other assets

129,335

691,245

(Decrease) increase in:

Accounts payable

(95,369

)

57,515

Accrued liabilities

(165,555

)

501,063

Operating lease liability

(22,051

)

(20,965

)

Deferred revenue

3,369

105,844

Net cashprovided by operating activities

1,118,061

1,223,348

Cash flows from investing activities:

Purchase of property and equipment

-

(12,925

)

Sale of property and equipment

1,374,085

-

Net cash provided by (used in)investing activities

1,374,085

(12,925

)

Cash flows financing activities:

Net decrease in lines of credit

(6,000,000

)

-

Common Stock buy-back

(41,276

)

-

Proceeds from employee stock purchase plan

56,577

50,328

Dividends paid

(146,611

)

(146,611

)

Proceeds from issuance of notes payable

-

620,000

Payments on notes payable and capital leases

-

(920,754

)

Net cash used in financing activities

(6,131,310

)

(397,037

)

Net increase (decrease) in cash and cash equivalents

(3,639,164

)

813,386

Cash and cash equivalents at beginning of period

24,070,322

20,345,330

Cash and cash equivalents at end of period

$

20,431,158

$

21,158,716

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$

172,342

$

25,899

Cash paid for interest

$

2,898

$

70,545

Cash paid for operating leases

$

30,600

$

30,600

Supplemental disclosure of non-cash investing and financing activities:

Common Stock to pay accrued liabilities

$

172,500

$

5,405

Dividends accrued on preferred stock

$

146,611

$

146,611

View source version on businesswire.com: https://www.businesswire.com/news/home/20211115005964/en/

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