EX-99.2 3 ex99-2.htm PRESS RELEASE Blueprint
 Exhibit 99.2
 
 
 
Investor Relations Contacts:
 
Todd Mitchell, CFO
Park City Group
435-645-2216
investor-relations@parkcitygroup.com
 
Rob Fink
Hayden IR
646-415-8972
PCYG@haydenir.com
 
 
Park City Group Reports 200% Increase in Net Income for Fiscal Third Quarter of 2019
 
Strong Profitability Drove Record Operating Cash Flow for Highest Cash Balance Ever
 Company Achieves Goal of Implementing MarketPlace Across Entire Supplier Base
Board of Directors Approves $4 Million Common Share Repurchase Program
 
Salt Lake City, UT – May 9, 2019 – 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, 2019.
 
Third Fiscal Quarter Financial and Recent Business Highlights:
 
●
Net Income tripled to $921,000, Operating Cash Flow of $1.65 million drove cash to $18.1 million.
●
MarketPlace Similar Supplier use case launched with more than 20,000 category participants.
●
Compliance connections reach 84,000 for 342,000 total connections across all applications.
●
Supply Chain and Compliance trends positive with recurring revenues up year-over-year.
 
 “We made significant progress with MarketPlace, leveraging on our early successes to launch our most important use case, Similar Supplier, which enables the replacement of non-compliant suppliers” said Randall K. Fields, Chairman and CEO of Park City Group. “This required our development team to successfully launch sophisticated capabilities that allow a retail or wholesale HUB to search our entire Compliant Supplier base, and the Customer Success Team to reach out to literally thousands of suppliers to help them to add supplementary information about the products they sell. As a result of these efforts, we were able to launch Similar Supplier with over 20,000 category participants, giving us the largest database linking suppliers’ products and compliance, enhancing the value of our platform for all industry participants.”
 
“The launch of MarketPlace Similar Supplier was a herculean effort involving everyone on the team,” added Fields. “And while we were executing on this initiative, we also substantially reorganized our salesforce, moved our corporate headquarters, and more than doubled the capacity of our data center. The salesforce reorganization better aligns the team to our converged application platform and will enable cross selling and increased the adoption of more services per customer, while the move to a new headquarters and the upgrade or our data center doubles the space to grow our Customer Success Team and increases the capacity to handle our scaled MarketPlace application. Revenue from net new customer additions was held back as a result of these initiatives; however, the Company is now positioned for growth for years to come.”
 
 
 
 
 
“While expanding MarketPlace’s use cases and enhancing our operational capabilities, we never lost sight of our commitment to our customers’ success,” continued Fields. ”We reached 84,000 Compliance connections. With growth in Supply Chain, total connections are now 342,000. Compliance levels for existing customers grew, as did recurring revenue. Importantly, we also launched an initiative, backed by the Federation of Wholesale Distributors, to make ReposiTrak the industry standard for food safety compliance in the U.K.. And with all of this going on, we tripled net income and delivered record operating cash flow, ending the quarter with over $18 million in cash. In short, the core is gaining strength, and the moat around our business gives us the ability to scale strategically while generating quarterly profitability.”
 
“This was an important quarter for the Company. It was imperative that MarketPlace be able to help solve the problems our Compliance service identifies, and that we are better prepared to cross sell our applications and scale our business. We remain confident in our converged platform strategy. We are unique in our capabilities to help retailers or wholesaler manage their relationships with their suppliers across the entire workflow of the supply chain from sourcing a supplier, to vetting that supplier, and then transacting with them efficiently. This end-to-end capability positions us as the only company capable of enhancing these customers’ competitive position by allowing them to make rapid sourcing decisions, diversifying their product line-ups, and enabling them to compete better in a post-Amazon world.”
 
Financial Results Summary:
 
Third Fiscal Quarter 2019 Results: Total revenue declined 5% to $5.0 million for the three months ended March 31, 2019, as compared to $5.3 million during the same period a year ago primarily due to lower revenues from new implementations and a year-over-year decline in MarketPlace revenue. Total operating expenses were $4.0 million, an 18% decrease from $4.8 million a year ago, as the Company is leveraging investments made in increasing productivity. GAAP net income was $1.1 million, or 21% of revenue, versus $457,000, or 9% of revenue, a year ago, and GAAP net income to common shareholders was $921,000, or $0.05 per diluted share, compared to $311,000, or $0.02 per diluted share, a year ago.
 
Fiscal 2019 To Date Results: Total revenue increased 5% to $16.5 million for the nine months ended March 31, 2019, as compared to $15.7 million during the same period a year ago primarily due to an increase in subscription revenues for the Company’s Compliance and Supply chain services. Total operating expenses were $12.8 million, a 5% decrease from $13.5 million a year ago, as the Company is leveraging investments made in increasing productivity. GAAP net income was $3.7 million, or 23% of revenue, versus $2.1 million, or 14% of revenue, a year ago, and GAAP net income to common shareholders was $3.3 million, or $0.16 per diluted share, compared to $1.7 million, or $0.08 per diluted share, a year ago.
 
Conference Call:
 
The Company will host a conference call at 4:30 P.M. ET today, May 9, 2019 to discuss the Company's results. Investors and interested parties may participate in the call by dialing 877-830-2596 or 785-424-1744 (international) and referring Conference ID: 134465. 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 7:30 ET today until 11:59 p.m. ET on June 9, 2019. The Replay can be accessed by calling 844-512-2921 (toll-free) or 412-317-6671 (international). Please enter pin number 134465to 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 partners with 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-Q for the fiscal quarter ended December 31, 2018 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.
 
 
 
 
 
Non-GAAP Financial Measures
 
While this press release does not include non-GAAP financial measures, the financial presentation below contains certain financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission, including non-GAAP EBITDA and non-GAAP earnings per share. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. Reconciliations of these non-GAAP financial measures to the nearest comparable GAAP measures will be provided upon the completion of the Company’s annual audit.
 
Non-GAAP EBITDA excludes items such as impairment charges, allowance for doubtful accounts, non-cash stock-based compensation and other one-time cash and non-cash charges. Non-GAAP EPS excludes items such as non-cash stock-based compensation, amortization of acquired intangible assets and other one-time cash and non-cash charges. The Company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses or net purchases of property and equipment, as the case may be, which may not be indicative of its core operation results and business outlook. Because Park City Group has historically reported certain non-GAAP results to investors, the Company believes that the inclusion of non-GAAP measures in the financial presentation below allows investors to compare the Company’s financial results with the Company’s historical financial results reported using non-GAAP financial measures, as well as with the financial results reported by others.
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 3 Months Ended 
 
 
 9 Months Ended
 
FY ENDS June
 
3/31/19
 
 
3/31/18
 
 
% Chg.
 
 
3/31/19
 
 
3/31/18
 
 
% Chg.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenues
 $5,006,132 
 $5,278,783 
  (5%)
 $16,513,363 
 $15,715,654 
  5%
 
    
    
    
    
    
    
Operating Expenses
    
    
    
    
    
    
Cost of Services and Product Support
  (1,342,051)
  (1,805,256)
  (26%)
  (4,341,236)
  (4,649,620)
  (7%)
Sales and Marketing
  (1,485,785)
  (1,574,663)
  (6%)
  (4,533,664)
  (4,781,752)
  (5%)
General and Administrative
  (1,020,652)
  (1,293,727)
  (21%)
  (3,490,698)
  (3,569,584)
  (2%)
Depreciation and Amortization
  (140,312)
  (165,189)
  (15%)
  (429,717)
  (487,815)
  (12%)
Total Operating Expenses
  (3,988,800)
  (4,838,835)
  (18%)
  (12,795,315)
  (13,488,771)
  (5%)
 
    
    
    
    
    
    
Operating Income
 $1,017,332 
 $439,948 
  131%
 $3,718,048 
 $2,226,883 
  67%
 
    
    
    
    
    
    
Interest Income
  75,670 
  17,730 
  327%
  165,567 
  - 
 NM
Interest (Expense)
  (4,706)
  - 
 NM
  (20,802)
  (12,157)
  71%
Income Before Taxes
  1,088,296 
  457,678 
  138%
  3,862,813 
  2,214,726 
  74%
 
    
    
    
    
    
    
Provision for Taxes
  (20,210)
  (349)
 NM
  (142,710)
  (76,063)
  88%
 
    
    
    
    
    
    
Net Income
 $1,068,086 
 $457,329 
  134%
 $3,720,103 
 $2,138,663 
  74%
 
    
    
    
    
    
    
Dividends on Preferred Stock
  (146,610)
  (146,611)
  (0%)
  (439,832)
  (426,737)
  3%
Net Income to Common Shareholders
 $921,476 
 $310,718 
  197%
 $3,280,271 
 $1,711,926 
  92%
 
    
    
    
    
    
    
GAAP EPS, Basic
 $0.05 
 $0.02 
  193%
 $0.17 
 $0.09 
  89%
GAAP EPS, Diluted
 $0.05 
 $0.02 
  196%
 $0.16 
 $0.08 
  90%
 
    
    
    
    
    
    
Weighted Average Shares, Basic
  19,861,000 
  19,648,000 
    
  19,823,000 
  19,519,000 
    
Weighted Average Shares, Diluted
  20,390,000 
  20,321,000 
    
  20,369,000 
  20,250,000 
    
 
 
 
 
 
 
 
Park City Group, Inc.
RECONCILIATION OF NON-GAAP ITEMS
 
 
 
 3 Months Ended
 
 
9 Months Ended
 
FY ENDS June
 
3/31/19
 
 
3/31/18
 
 
% Chg.
 
 
3/31/19
 
 
3/31/18
 
 
% Chg.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
 $1,068,086 
 $457,329 
  134%
 $3,720,103 
 $2,138,663 
  74%
 
    
    
    
    
    
    
Adjustments:
    
    
    
    
    
    
Depreciation and Amortization
  140,312 
  165,189 
  (15%)
  429,717 
  487,815 
  (12%)
Interest Expense (Income)
  (70,964)
  (17,730)
 NM
  (144,765)
  12,157 
  (1291%)
Provision for Taxes
  20,210 
  349 
  5691%
  142,710 
  76,063 
  88%
Other (Incl. Bad Debt Exp.)
  150,000 
  100,000 
  50%
  350,000 
  295,050 
  19%
Stock Compensation Expense
  150,283 
  101,649 
  48%
  473,556 
  489,748 
  (3%)
Adjusted EBITDA
 $1,457,927 
 $806,786 
  81%
 $4,971,321 
 $3,499,496 
  42%
 
    
    
    
    
    
    
 
    
    
    
    
    
    
Net Income
 $1,068,086 
 $457,329 
  134%
 $3,720,103 
 $2,138,663 
  74%
 
    
    
    
    
    
    
Adjustments:
    
    
    
    
    
    
Stock Compensation Expense
  150,283 
  101,649 
  124%
  473,556 
  489,748 
  12%
Acquisition Related Amortization
  32,850 
  32,850 
  - 
  98,550 
  98,550 
  - 
Adjusted non-GAAP Net Income
  1,251,219 
  591,828 
  111%
  4,292,209 
  2,726,961 
  57%
 
    
    
    
    
    
    
Preferred Dividends
  (146,610)
  (146,611)
  (0%)
  (439,832)
  (426,737)
  3%
 
    
    
    
    
    
    
Adjusted non-GAAP Net Income
    
    
    
    
    
    
to Common Shareholders
 $1,104,609 
 $445,217 
  148%
 $3,852,377 
 $2,300,224 
  67%
 
    
    
    
    
    
    
Adjusted Non-GAAP EPS
 $0.05 
 $0.02 
  147%
 $0.19 
 $0.11 
  66%
 
    
    
    
    
    
    
Weighted Average Shares, Diluted
  20,390,000 
  20,321,000 
    
  20,369,000 
  20,250,000 
    
 
 
 
 
 
Park City Group, Inc.
 
 
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
 
 
Period Ended
 
FY ENDS June
 
3/31/19
 
 
6/30/18
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash
 $18,145,369 
 $14,892,439 
Receivables, Net Allowances
  3,977,982 
  4,222,348 
Contract Asset (Current Portion of Unbilled)
  3,379,652 
  3,502,287 
Prepaid Expenses and Other Current Assets
  1,219,878 
  1,116,387 
Total Current Assets
 $26,722,881 
 $23,733,461 
 
    
    
Property and Equipment, Net
 $1,683,923 
 $1,896,348 
 
    
    
Other Assets:
    
    
Deposits, and Other Assets
  3,922 
  18,691 
Contract Asset (Long-Term Portion of Unbilled)
  1,864,974 
  1,194,574 
Investments
  476,884 
  477,884 
Customer Relationships
  821,250 
  919,800 
Goodwill
  20,883,886 
  20,883,886 
Capitalized Software Costs, Net
  95,380 
  168,926 
Total Other Assets
 $24,146,296 
 $23,663,761 
 
    
    
Total Assets
 $52,553,100 
 $49,293,570 
 
    
    
 
    
    
Liabilities
    
    
 
    
    
Current Liabilities:
    
    
Accounts Payable
 $622,803 
 $1,490,434 
Accrued Liabilities
  1,328,037 
  745,694 
Contract Liability (Deferred Revenue)
  2,063,810 
  2,335,286 
Lines of Credit
  4,660,000 
  3,230,000 
Current Portion of Notes Payable
  36,891 
  188,478 
Total Current Liabilities
 $8,711,541 
 $7,989,892 
 
    
    
Long-Term Liabilities:
    
    
Notes Payable, Less Current Portion
  255,054 
  1,592,077 
Other Long-Term Liabilities
  - 
  7,275 
Total Long-Term Liabilities
 $255,054 
 $1,599,352 
 
    
    
Total Liabilities
 $8,966,595 
 $9,589,244 
 
    
    
Shareholder Equity
    
    
 
    
    
Series B Preferred
 $6,254 
 $6,254 
Series B-1 Preferred
  2,124 
  2,124 
Common Stock
  198,715 
  197,738 
Additional Paid-In Capital
  77,312,818 
  76,711,887 
Accumulated Deficit
  (33,933,406)
  (37,213,677)
 
    
    
Total Shareholder Equity
 $43,586,505 
 $39,704,326 
 
    
    
Total Liabilities and Shareholder Equity
 $52,553,100 
 $49,293,570 
 
 
 
 
Park City Group, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 Months Ended
 
 
9 Months Ended
 
FY ENDS June
 
3/31/19
 
 
3/31/18
 
 
3/31/19
 
 
3/31/18
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Flows From Operating Activities:
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
 $1,068,086 
 $457,329 
 $3,720,103 
 $2,138,663 
 
    
    
    
    
 
Adj. to Reconcile Net Income to Net Cash from Operating Activities:
 
    
    
Depreciation and Amortization
  140,313 
  165,187 
  429,718 
  487,815 
Stock Compensation Expense
  150,283 
  101,649 
  473,556 
  489,748 
Bad Debt Expense
  150,000 
  100,000 
  350,000 
  295,050 
Decrease (Increase) in Accounts Receivables
  (191,050)
  (952,816)
  17,001 
  (2,999,613)
Decrease (Increase) in LT Receivables, Prepaid Expenses & Other Assets
  1,133,459 
  143,498 
  (759,122)
  764,513 
Increase (Decrease) in Accounts Payable
  (215,348)
  614,142 
  (867,631)
  688,073 
Increase (Decrease) in Accrued Liabilities
  25,123 
  (173,204)
  392,089 
  (98,821)
Increase (Decrease) in Deferred Revenue
  (607,486)
  (49,422)
  (271,752)
  9,548 
Net Cash From (Used In) Operating Activities
 $1,653,380 
 $406,363 
 $3,483,962 
 $1,774,976 
 
    
    
    
    
Cash Flows From Investing Activities:
    
    
    
    
Capitalization of Software Costs
  - 
  - 
  - 
  (111,241)
Purchase of Long-Term Investments
  1,000 
  - 
  1,000 
  - 
Purchase of Property and Equipment
  (41,650)
  (26,361)
  (45,197)
  (204,004)
Net Cash From (Used In) Investing Activities
 $(40,650)
 $(26,361)
 $(44,197)
 $(315,245)
 
    
    
    
    
Cash Flows From Financing Activities:
    
    
    
    
Net Increase in Line of Credit
  - 
  380,000 
  1,430,000 
  380,000 
Proceeds from Issuance of Notes Payable
  - 
  - 
  - 
  56,078 
Preferred Stock Redemption
  - 
  (999,990)
  - 
  (999,990)
Proceeds from Employee Stock Plans
  - 
  124,627 
  - 
  244,417 
Proceeds from Exercise of Options and Warrants
  - 
  666,903 
  164,997 
  666,903 
Dividends Paid
  (146,611)
  (162,966)
  (293,222)
  (488,897)
Payments on Notes Payable and Capital Leases
  (3,032)
  (378,923)
  (1,488,610)
  (544,088)
Net Cash From (Used In) Financing Activities
 $(149,643)
 $(370,351)
 $(186,835)
 $(685,577)
 
    
    
    
    
Net Increase (Decrease) in Cash
 $1,463,087 
 $9,651 
 $3,252,930 
 $774,154 
 
    
    
    
    
Cash at Beginning of Period
  16,682,282 
  14,818,509 
  14,892,439 
  14,054,006 
 
    
    
    
    
Cash at End of Period
 $18,145,369 
 $14,828,160 
 $18,145,369 
 $14,828,160