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--(BUSINESS WIRE)--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,
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

 

 

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 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

 

 


Contacts

Investor Relations Contact:

John Merrill, CFO
investor-relations@parkcitygroup.com

Or

FNK IR
Rob Fink
646.809.4048
rob@fnkir.com