Record in Quarterly and Year-To-Date Subscription Revenue
Record Free Cash Flow Increases 43% Quarterly and 141% Year-To-Date
Highlights for the fiscal second quarter and fiscal year-to-date results ended December 31, 2013 included:
- Record quarterly subscription revenue of $2.0 million, a 16% increase year over year
- Record year-to-date subscription revenue of $3.9 million, a 14% increase year over year
- Record year-to-date total revenue of $5.4 million, a 4% increase year over year
- Record quarterly free cash flow increased 43% to $591,000
- Record year-to-date free cash flow increased 141% to $813,000
- Quarterly non-GAAP net income increased to $352,000, a 35% increase year over year
- Record year-to-date non-GAAP net income increased to $918,000, a 119% increase year over year
- GAAP quarterly net loss of ($64,000), or ($0.01) per share; versus a net loss of ($176,000), or ($0.02) per share during prior year
- GAAP year-to-date net income of $141,000, or $0.01 per share; versus a net loss of ($456,000), or ($0.04) per share during the prior year
- Net debt decreased 42% to $1.3 million, versus $2.2 million at the same time last year.
PARK CITY, Utah, Feb. 14, 2013 (GLOBE NEWSWIRE) -- Park City Group (NYSE MKT:PCYG), a Software-as-a-Service (SaaS) provider of unique supply chain solutions for retailers and their suppliers, today announced record results for its fiscal second quarter ended December 31, 2012.
"We posted a number of financial records this quarter and made progress in achieving our strategic goals. We had wins selling additional supply chain management services to existing customers, which is a validation for the value of our end-to-end supply chain solutions. Combined with the addition and implementation of a number of the large retailers, both inside the grocery vertical, as well as in new retail verticals, we are confident that our top line will continue to accelerate in the coming quarters. The scale of these retailers, all of which are among the largest in the world, is an order of magnitude greater than most of our existing customers and should provide for accelerated growth as we move through the phases of implementation. Finally, our food and drug safety initiative with ReposiTrak, Inc. continues to gain traction and the process of onboarding customers is accelerating," said Randall K. Fields, Park City Group's Chairman and CEO.
Subscription revenue during the first quarter increased 16% to a record $2.0 million, reflecting growth in sales to new and existing customers. Other revenue decreased approximately $0.2 million, consistent with the Company's previously announced strategic shift to a recurring subscription revenue model from licensing and associated revenue. Total revenue increased 4% to $2.7 million.
Profitability
Total operating expenses during the quarter ended December 31, 2012 were $2.7 million, unchanged from the same quarter a year ago and an increase of $0.2 million sequentially. The sequential increase in expenses was primarily related to an increase in sales and marketing personnel and certain incremental costs related to moving the headquarters' location during the quarter.
Net loss for the second fiscal quarter ended December 31, 2012 was ($64,000), or ($0.01) per share, as compared to a net loss of ($176,000), or ($0.02) per share, during the prior year period. Net loss applicable to common shareholders for the second fiscal quarter was ($353,000), or ($0.03) per share, as compared to ($385,000), or ($0.03) per share during the prior year period. Non-GAAP earnings per common shareholder for the second quarter were $0.01, versus $0.00 during the same period last year.
Cash
During the quarter ended December 30, 2012, free cash flow was $591,000, compared to $414,000 during the same period last year. "Free cash flow increased $177,000 and $475,000 during the second quarter and first half, respectively. This represents cash flow contribution of 64% and 98% of the incremental subscription revenue recorded during the respective periods and speaks of the operating leverage in our business. While we expect the operating expense run rate to increase modestly during the course of the year, primarily due to additional sales and marketing expense, we expect our cash flow and earnings growth to continue to outpace the top line as we benefit from the strength of our business model," said Mr. Fields.
Total cash at the end of December 31, 2012 was $1.1 million, and net debt declined by 42% to $1.3 million, versus $2.2 million at the end of December 31, 2011. "Our balance sheet is strong and with a net debt-to-equity ratio of 23%, we are ahead of schedule in reducing our debt levels, and as appropriate we will begin using our excess liquidity to simplify our capital structure and repurchase shares," said Mr. Fields.
"From where we stand today, we expect to achieve record results for the fiscal year. Due to the "asset light" nature of our business model that supports significant growth with limited incremental fixed costs, our bottom line growth should continue to outpace the top line. Combined with the strong value proposition of our solutions and the recurring nature of subscription revenue, our business should deliver predictable and sustainable growth in revenue and earnings for the next several years," Mr. Fields concluded.
The Company will host a conference call at 4:15 P.M. Eastern today, February 14, 2013, to discuss the results. Investors and interested parties may participate in the call by dialing (877) 675-3568 and referring to Conference ID: 92438902. The conference call is also being webcast and is available via the investor relations section of the Company's website, www.parkcitygroup.com.
About Park City Group
Park City Group (NYSE MKT:PCYG) is a Software-as-a-Service ("SaaS") provider that brings unique visibility to the consumer goods supply chain, delivering actionable information that ensures product is on the shelf when the consumer expects it as well as providing food safety tracking information. The Company's services increase customers' sales and profitability while enabling lower inventory levels and ensuring regulatory compliance for both retailers and their suppliers.
Through a process known as Consumer Driven Sales Optimization™, Park City Group helps its customers turn information into cash and increased sales, using the largest scan based platform in the world. Scan based trading provides retail trading partners with a distinct competitive advantage through scan sales that provides store level visibility and sets the supply chain in motion. And since it is scan based, it can be used in a Direct Store Delivery (DSD) or warehouse setting.
In 2012 Park City Group worked with Leavitt Partners, an internationally-known health care and food safety consulting firm to create ReposiTrak, Inc., which provides food retailers and suppliers with a robust solution that helps them protect their brands and remain in compliance with rapidly evolving regulations in the recently passed Food Safety Modernization Act. Powered by Park City Group, this solution, also called ReposiTrak™, is an internet-based technology, which enables all participants in the farm-to-table supply chain to easily manage tracking and traceability requirements as products move between trading partners.
The Park City Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8655
Non-GAAP Financial Measures
This press release includes the following financial measures defined as "non-GAAP financial measures" by the Securities and Exchange Commission: non-GAAP EBITDA, non-GAAP earnings per share, net debt and free cash flow. 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, charges to consolidate and integrate recently acquired businesses, costs of closing corporate facilities, 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, charges to consolidate and integrate recently acquired businesses, costs for closing corporate facilities, amortization of acquired intangible assets and other one-time cash and non-cash charges. Net debt is the total debt balance less the cash balance. Free cash flow includes net cash provided (used) by operating activities less replacement purchases of property and equipment. 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. In addition, because Park City Group has historically reported certain non-GAAP results to investors, the Company believes that the inclusion of non-GAAP measures provides consistency in the Company's financial reporting.
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 | ||
| December 31, | June 30, | |
| 2012 | 2012 | |
| Assets | (unaudited) | |
| Current assets: | ||
| Cash | $ 1,111,404 | $ 1,106,176 |
| Receivables, net of allowance of $140,624 and $220,000 at December 31, 2012 and June 30, 2012, respectively | 2,499,835 | 2,290,859 |
| Prepaid expenses and other current assets | 238,364 | 171,526 |
| Total current assets | 3,849,603 | 3,568,561 |
| Property and equipment, net | 680,284 | 559,140 |
| Other assets: | ||
| Deposits and other assets | 35,466 | 20,697 |
| Customer relationships | 2,551,493 | 2,762,651 |
| Goodwill | 4,805,933 | 4,805,933 |
| Capitalized software costs, net | 146,165 | 219,248 |
| Total other assets | 7,539,057 | 7,808,529 |
| Total assets | $ 12,068,944 | $ 11,936,230 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 769,098 | $ 550,846 |
| Accrued liabilities | 1,177,546 | 1,242,328 |
| Deferred revenue | 1,866,525 | 2,081,459 |
| Capital lease obligations | 10,404 | 41,201 |
| Lines of credit | 1,200,000 | 1,200,000 |
| Notes payable | 695,697 | 798,704 |
| Total current liabilities | 5,719,270 | 5,914,538 |
| Long-term liabilities: | ||
| Notes payable, less current portion | 515,750 | 711,571 |
| Other long-term liabilities | 102,550 | -- |
| Total liabilities | 6,337,570 | 6,626,109 |
| Commitments and contingencies | -- | -- |
| Stockholders' equity: | ||
| Series A Convertible Preferred Stock, $0.01 par value, 30,000,000 shares authorized; 657,481 and 685,671 shares issued and outstanding at December 31, 2012 and June 30, 2012, respectively | 6,575 | 6,857 |
| Series B Convertible Preferred Stock, $0.01 par value, 30,000,000 shares authorized; 411,927 shares issued and outstanding at December 31, 2012 and June 30, 2012, respectively | 4,119 | 4,119 |
| Common Stock, $0.01 par value, 50,000,000 shares authorized; 12,468,154 and 12,087,431 shares issued and outstanding at December 31, 2012 and June 30, 2012, respectively | 124,681 | 120,874 |
| Additional paid-in capital | 38,539,673 | 37,763,196 |
| Accumulated deficit | (32,943,674) | (32,584,925) |
| Total stockholders' equity | 5,731,374 | 5,310,121 |
| Total liabilities and stockholders' equity | $ 12,068,944 | $ 11,936,230 |
| PARK CITY GROUP, INC. | ||||
| Consolidated Condensed Statements of Operations (unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| December 31, | December 31, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Revenues: | ||||
| Subscription | $ 1,955,562 | $ 1,681,000 | $ 3,910,157 | $ 3,423,131 |
| Other Revenue | 703,340 | 886,122 | 1,461,572 | 1,723,271 |
| Total revenues | 2,658,902 | 2,567,122 | 5,371,729 | 5,146,402 |
| Operating expenses: | ||||
| Cost of services and product support | 1,099,165 | 1,115,113 | 2,179,649 | 2,255,374 |
| Sales and marketing | 763,301 | 568,797 | 1,343,657 | 1,230,545 |
| General and administrative | 595,407 | 790,855 | 1,169,501 | 1,550,392 |
| Depreciation and amortization | 230,455 | 220,835 | 460,523 | 444,800 |
| Total operating expenses | 2,688,328 | 2,695,600 | 5,153,330 | 5,481,111 |
| Income (loss) from operations | (29,426) | (128,478) | 218,399 | (334,709) |
| Other income (expense): | ||||
| Interest expense | (34,435) | (47,394) | (77,868) | (120,884) |
| Income (loss) before income taxes | (63,861) | (175,872) | 140,531 | (455,593) |
| (Provision) benefit for income taxes: | -- | -- | -- | -- |
| Net income (loss) | (63,861) | (175,872) | 140,531 | (455,593) |
| Dividends on preferred stock | (289,300) | (208,867) | (499,280) | (417,220) |
| Net income (loss) applicable to common shareholders | $ (353,161) | $ (384,739) | $ (358,749) | $ (872,813) |
| Weighted average shares, basic and diluted | 12,303,000 | 11,698,000 | 12,259,000 | 11,674,000 |
| Basic and diluted loss per share | $ (0.03) | $ (0.03) | $ (0.03) | $ (0.07) |
| PARK CITY GROUP, INC. | ||
| Consolidated Condensed Statements of Cash Flows (Unaudited) | ||
| For the Six Months Ended December 31, | ||
| 2012 | 2011 | |
| Cash Flows From Operating Activities: | ||
| Net income (loss) | $ 140,531 | $ (455,593) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
| Depreciation and amortization | 460,523 | 444,800 |
| Bad debt expense | -- | 69,194 |
| Stock compensation expense | 525,329 | 563,175 |
| (Increase) decrease in: | ||
| Receivables | (208,976) | 466,520 |
| Prepaids and other assets | (81,607) | 48,593 |
| (Decrease) increase in: | ||
| Accounts payable | 218,252 | (264,310) |
| Accrued liabilities | 40,317 | 54,985 |
| Deferred revenue | (214,934) | (535,504) |
| Net cash provided by operating activities | 879,435 | 391,860 |
| Cash Flows From Investing Activities: | ||
| Purchase of property and equipment | (297,426) | (54,318) |
| Net cash used in investing activities | (297,426) | (54,318) |
| Cash Flows From Financing Activities: | ||
| Proceeds from issuance of notes | 95,548 | 137,028 |
| Proceeds from exercise of options and warrants | -- | 12,749 |
| Dividends paid | (247,156) | (247,156) |
| Payments on notes payable and capital leases | (425,173) | (1,916,065) |
| Net cash used in financing activities | (576,781) | (2,013,444) |
| Net decrease in cash | 5,228 | (1,675,902) |
| Cash at beginning of period | 1,106,176 | 2,618,229 |
| Cash at end of period | $ 1,111,404 | $ 942,327 |
| Supplemental Disclosure of Cash Flow Information: | ||
| Cash paid for income taxes | $ -- | $ -- |
| Cash paid for interest | $ 79,118 | $ 180,943 |
| Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||
| Common stock to pay accrued liabilities | $ 608,802 | $ 418,434 |
| Dividends accrued on preferred stock | $ 499,280 | $ 417,220 |
| Dividends paid with preferred stock | $ 171,200 | $ 167,060 |
| PARK CITY GROUP, INC. AND SUBSIDIARIES | ||||
| Reconciliation of GAAP and Non-GAAP Financial Measures | ||||
| Adjusted EBITDA | ||||
| (In $000's) | ||||
| Unaudited results of operations | ||||
|
Three Months Ended December 31, |
Six Months Ended December 31, |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Net Income (loss) | ($64) | ($176) | $141 | ($456) |
| Adjusted EBITDA Reconciliation Adjustments: | ||||
| Depreciation and amortization | 230 | 221 | 460 | 445 |
| Bad debt expense | -- | 27 | -- | 70 |
| Interest, net | 34 | 47 | 77 | 120 |
| Stock based compensation | 290 | 310 | 525 | 563 |
| One-time expenses (stock and cash) | -- | -- | -- | 60 |
| Adjusted EBITDA | $490 | $429 | $1,203 | $802 |
| Non-GAAP Net Income (Loss) to Common Shareholders and EPS | ||||
| (In $000's, except per share) | ||||
| Unaudited results of operations | ||||
|
Three Months Ended December 31, |
Six Months Ended December 31, |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Net Income (loss) | ($64) | ($176) | $141 | ($456) |
| Non-GAAP Net Income (Loss) Reconciliation Adjustments: | ||||
| Stock based compensation | 290 | 310 | 525 | 563 |
| One-time expenses (stock and cash) | -- | -- | -- | 60 |
| Acquisition related amortization | 126 | 126 | 252 | 252 |
| Non-GAAP Net Income | $352 | $260 | $918 | $419 |
| Preferred dividends | (289) | (209) | (499) | (417) |
| Non-GAAP Net Income to Common Shareholders | $63 | $51 | $419 | $2 |
| Weighted average shares, diluted | 12,303,000 | 11,698,000 | 12,259,000 | 11,674,000 |
| Non-GAAP EPS, diluted | $0.01 | $0.00 | $0.03 | $0.00 |
| Non-GAAP Free Cash Flow | ||||
| (In $000's) | ||||
| Unaudited results of operations | ||||
|
Three Months Ended December 31, |
Six Months Ended December 31, |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Net Cash Provided by Operating Activities | $608 | $448 | $879 | $392 |
| Non-GAAP Free Cash Flow Reconciliation Adjustments: | ||||
| Purchase of property and equipment | (17) | (34) | (66) | (54) |
| Non-GAAP Free Cash Flow | $591 | $414 | $813 | $338 |
| Free cash flow includes net cash provided by operating activities less replacement purchases and equipment. Capital expenditures related to long-term investments and new technology developments are omitted. During 2Q13 the Company invested $232,000 in leasehold improvements for its new corporate headquarters located in Salt Lake City, UT, this amount is excluded from the Free Cash Flow calculation. | ||||
| Non-GAAP Net Debt | ||||
| (In $000's) | ||||
| Unaudited results of operations | ||||
| As of December 31 | ||||
| 2012 | 2011 | |||
| Total Debt | $2,411 | $3,173 | ||
| Less Total Cash | 1,111 | 942 | ||
| Non-GAAP Net Debt | $1,300 | $2,231 | ||