Record YTD Total and Subscription Revenue Growth
ReposiTrak® Expansion Ahead of Plan
SALT LAKE CITY, May 7, 2015 (GLOBE NEWSWIRE) -- Park City Group (Nasdaq:PCYG), a cloud-based software company that uses big data management to help retailers and their suppliers "Sell more, Stock less and See everything", today announced financial results for its fiscal third quarter-ended March 31, 2015.
Strategic and financial highlights:
- Supply chain-related subscription revenue for the third quarter increases 7% -. "This quarter's comparison was primarily impacted by a test with a large international retailer in the same quarter last year. Without that test, the year-over-year increase for the quarter would have been in the mid-teens," said Randall K. Fields, Park City Group's Chairman and CEO.
- Current expectation of 18% to 20% growth in supply chain-related subscription revenue during 4Q15 - "We expect fourth quarter performance to be one of the strongest of the year, bringing our full-year growth rate to another record level. While we anticipate continued volatility in quarterly growth rates, the upward trend of our annual growth rate is a better indicator of business performance," said Mr. Fields.
- Record subscription and total revenue growth rates for the first nine months of the year – For the nine month period ended March 31, 2015, the Company posted record year-over-year growth rates in supply chain-related subscription revenue of 18% and total revenue of 15%. "As our subscription revenue now represents a larger portion of overall revenue, the underlying growth of subscription revenue, which has previously been masked due to the shift from a licensing to SaaS model, is now more evident in total revenue growth," said Mr. Fields.
- Significant additional strength to balance sheet – Subsequent to the end of the third quarter, the Company received $6.7 million in cash proceeds from a common stock offering, providing significant liquidity to the balance sheet, broadening institutional ownership, and increasing customers' comfort with the Company's financial strength. The Company currently expects its cash balance to exceed $10 million at the end of the fiscal year.
- Demonstrated success in new merchandise categories – The Company announced successful customer results in several new merchandise categories outside of its historically dominant categories. Suppliers and retailers are now using Park City Group's supply chain management services in new categories to 'Sell more, Stock less and See everything'.
A Subscription Revenue Growth chart is available here: https://media.globenewswire.com/cache/14562/file/33951.pdf
For the fiscal third quarter ended March 31, 2015, the Company reported total revenue of $3.4 million, a 10% increase relative to the same quarter a year ago. Total operating expense during the third quarter was $4.0 million, an increase of 14% from the same quarter a year ago. The increase was primarily related to increases in sales and marketing expense. Notably, the expense comparison was affected by a change in the timing of a non-cash expense during the third quarter, without which the year-over-year expense comparison was 9%. The Company reiterated that it is on plan for expenses to increase by 5% to 7% for the current fiscal year. Non-GAAP loss to common shareholders for the third quarter was approximately breakeven, which was unchanged from the same period last year. GAAP net loss per share to common shareholders for the third quarter increased to ($0.16) per share, as compared to ($0.03) in the prior year, due primarily to one-time non-cash charges.
During the first nine months of fiscal 2015, free cash flow improved by $1.6 million to a positive cash flow of $487,000, as compared to a negative cash flow of $1.2 million during the same period a year ago. Adjusted EBITDA increased to $848,000, versus $112,000 in the prior year. Total cash at the end of March 31, 2015 was $3.4 million, unchanged from June 30, 2014.
ReposiTrak® highlights: ReposiTrak, the Company's venture with Leavitt Partners, provides the global food supply chain with a cost-effective service to help protect brands and reduce regulatory and financial risk.
- Acquisition of ReposiTrak on schedule - The previously announced agreements to acquire 100% ownership of ReposiTrak are on schedule to close by June 30, 2015.
- ReposiTrak achieved targeted goal of 2,000 connections ahead of plan – Shortly after the end of the third quarter, ReposiTrak surpassed its targeted goal of 2,000 connections several months ahead of plan. Adoption of ReposiTrak is being fuelled by wholesalers and suppliers preparing to comply with the Food Safety Modernization Act (FSMA) during 2015.
- Launched vendor portal – ReposiTrak achieved a major milestone with the launch of its vendor portal that will become the gateway by which ReposiTrak customers can more easily become users of Park City Group's supply chain software. In addition, this advance in technology broadens the appeal of ReposiTrak and reduces the time and cost of implementation for suppliers, retailer/wholesalers, and ReposiTrak itself.
- Enters pharmaceutical safety market – During the quarter, ReposiTrak announced its expansion into the pharmaceutical safety market and expects its first proof of concept trial to commence soon. ReposiTrak potentially offers the same value proposition to the pharmaceutical supply chain, the participants of which are looking to reduce their brand and regulatory risks, as well as risks related to counterfeit products.
"We expect ReposiTrak to continue to grow at an accelerated pace with the objective of eventually connecting a large portion of the global food supply chain. ReposiTrak has demonstrated its value proposition as a cost-effective service that can markedly improve compliance, and has garnered the support and endorsement of leading food and grocery industry organizations. ReposiTrak is also making progress towards adding alliance partners from several product lines in the insurance industry, to provide an even more attractive value proposition for customers," said Mr. Fields. "We expect to deliver another record growth rate in supply chain-related revenue this fiscal year and expect the rapid growth of ReposiTrak connections to continue. Clearly our value propositions are customer-proven and I am as excited as ever about our future."
The Company will host a conference call at 4:15 P.M. Eastern today, May 7, 2015, to discuss the results. Investors and interested parties may participate in the call by dialing 877-407-9205 and referring to Conference ID: 13608427. 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 (Nasdaq: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 to be. Park City Group's services enable customers to "Sell More, Stock Less, and See Everything". More information is available at www.parkcitygroup.com
About ReposiTrak
ReposiTrak is a venture between Leavitt Partners and Park City Group. ReposiTrak provides food retailers and suppliers with a robust solution to help protect their brands and remain in compliance with rapidly evolving regulations in the Food Safety Modernization Act. Powered by Park City Group's technology, the ReposiTrak® solution is internet-based and enables all participants in the farm-to-shelf supply chain easily manage both document management and tracking and traceability requirements as products move between trading partners. More information is available at www.repositrak.com.
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 | ||||
| March 31, | June 30, | |||
| 2015 | 2014 | |||
| Assets | (unaudited) | |||
| Current assets: | ||||
| Cash and cash equivalents | $ 3,367,161 | $ 3,352,559 | ||
| Receivables, net of allowance of $70,000 and $70,000 at March 31, 2015 and June 30, 2014, respectively | 2,847,989 | 2,857,983 | ||
| Prepaid expenses and other current assets | 454,763 | 250,855 | ||
| Total current assets | 6,669,913 | 6,461,397 | ||
| Property and equipment, net | 854,779 | 740,753 | ||
| Other assets: | ||||
| Deposits and other assets | 14,866 | 14,866 | ||
| Note receivable | 4,272,103 | 2,996,664 | ||
| Customer relationships | 1,601,282 | 1,918,019 | ||
| Goodwill | 4,805,933 | 4,805,933 | ||
| Total other assets | 10,694,184 | 9,735,482 | ||
| Total assets | $ 18,218,876 | $ 16,937,632 | ||
| Liabilities and Stockholders' Equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ 823,002 | $ 738,289 | ||
| Accrued liabilities | 1,711,450 | 1,801,355 | ||
| Deferred revenue | 1,596,420 | 1,840,811 | ||
| Line of credit | 1,200,000 | 1,200,000 | ||
| Notes payable | 224,904 | 226,900 | ||
| Total current liabilities | 5,555,776 | 5,807,355 | ||
| Long-term liabilities: | ||||
| Notes payable, less current portion | 406,912 | 422,248 | ||
| Other long-term liabilities | 80,338 | 88,948 | ||
| Total liabilities | 6,043,026 | 6,318,551 | ||
| Commitments and contingencies | ||||
| Stockholders' equity: | ||||
| Preferred Stock, $0.01 par value, 30,000,000 shares authorized; | ||||
| Series B Preferred Stock, 625,375 and 411,927 shares issued and outstanding at March 31, 2015 and June 30, 2014. | 6,254 | 4,119 | ||
| Series B-1 Preferred Stock, 59,138 and 0 shares issued and outstanding at March 31, 2015 and June 30, 2014. | 591 | -- | ||
| Common Stock, $0.01 par value, 50,000,000 shares authorized; 17,397,390 and 16,928,025 shares issued and outstanding at March 31, 2015 and June 30, 2014, respectively | 173,974 | 169,280 | ||
| Additional paid-in capital | 52,395,503 | 46,792,736 | ||
| Accumulated deficit | (40,400,472) | (36,347,054) | ||
| Total stockholders' equity | 12,175,850 | 10,619,081 | ||
| Total liabilities and stockholders' equity | $ 18,218,876 | $ 16,937,632 | ||
| See accompanying notes to consolidated condensed financial statements. | ||||
| PARK CITY GROUP, INC. | ||||
| Consolidated Condensed Statements of Operations (unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| March 31, | March 31, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Revenues: | ||||
| Subscription | $ 2,640,749 | $ 2,489,772 | $ 7,999,260 | $ 6,968,606 |
| Other Revenue | 750,184 | 598,725 | 2,205,196 | 1,915,441 |
| Total revenues | 3,390,933 | 3,088,497 | 10,204,456 | 8,884,047 |
| Operating expenses: | ||||
| Cost of services and product support | 1,245,353 | 1,336,818 | 3,949,136 | 3,792,364 |
| Sales and marketing | 1,547,553 | 1,073,200 | 4,419,384 | 3,442,675 |
| General and administrative | 1,026,751 | 905,225 | 2,908,653 | 3,032,842 |
| Depreciation and amortization | 190,041 | 211,661 | 564,800 | 679,963 |
| Total operating expenses | 4,009,698 | 3,526,904 | 11,841,973 | 10,947,844 |
| Loss from operations | (618,765) | (438,407) | (1,637,517) | (2,063,797) |
| Other income (expense): | ||||
| Interest income, net | 68,911 | 31,987 | 170,724 | 59,927 |
| Loss before income taxes | (549,854) | (406,420) | (1,466,793) | (2,003,870) |
| (Provision) benefit for income taxes: | -- | -- | -- | -- |
| Net loss | (549,854) | (406,420) | (1,466,793) | (2,003,870) |
| Dividends on preferred stock | (135,699) | (154,473) | (444,645) | (463,419) |
| Series B restructure | (2,141,980) | -- | (2,141,980) | -- |
| Net loss applicable to common shareholders | $ (2,827,533) | $ (560,893) | $ (4,053,418) | $ (2,467,289) |
| Weighted average shares, basic and diluted | 17,334,000 | 16,867,000 | 17,204,000 | 16,640,000 |
| Basic and diluted loss per share | $ (0.16) | $ (0.03) | $ (0.24) | $ (0.15) |
| See accompanying notes to consolidated condensed financial statements. | ||||
| PARK CITY GROUP, INC. | ||
| Consolidated Condensed Statements of Cash Flows (Unaudited) | ||
| Nine Months Ended | ||
| March 31, | ||
| 2015 | 2014 | |
| Cash Flows From Operating Activities: | ||
| Net loss | $ (1,466,793) | $ (2,003,870) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||
| Depreciation and amortization | 564,800 | 679,963 |
| Charitable non-cash donations | 157,950 | 96,900 |
| Stock compensation expense | 1,796,386 | 1,323,984 |
| Bad debt expense | 124,982 | 171,692 |
| (Increase) decrease in: | ||
| Receivables | (114,988) | (807,176) |
| Prepaids and other assets | (419,887) | 11,233 |
| (Decrease) increase in: | ||
| Accounts payable | 84,713 | 83,843 |
| Accrued liabilities | 26,004 | (33,801) |
| Deferred revenue | (244,391) | (234,794) |
| Net cash provided by (used in) operating activities | 508,776 | (712,026) |
| Cash Flows From Investing Activities: | ||
| Cash from sales of property and equipment | -- | 6,505 |
| Cash advanced on note receivable | (1,059,460) | (800,000) |
| Purchase of property and equipment | (362,089) | (439,339) |
| Net cash used in investing activities | (1,421,549) | (1,232,834) |
| Cash Flows From Financing Activities: | ||
| Proceeds from issuance of stock | 903,469 | 1,493,818 |
| Proceeds from employee stock plans | 203,211 | 153,874 |
| Proceeds from issuance of notes payable | 172,795 | 338,287 |
| Proceeds from exercise of options and warrants | -- | 627,529 |
| Series B preferred redemption | (7,500) | -- |
| Dividends paid | (154,473) | (432,524) |
| Payments on notes payable | (190,127) | (441,528) |
| Net cash provided by financing activities | 927,375 | 1,739,456 |
| Net increase (decrease) in cash and cash equivalents | 14,602 | (205,404) |
| Cash and cash equivalents at beginning of period | 3,352,559 | 3,616,585 |
| Cash and cash equivalents at end of period | $ 3,367,161 | $ 3,411,181 |
| Supplemental Disclosure of Cash Flow Information: | ||
| Cash paid for income taxes |
$ -- |
$ 6,634 |
| Cash paid for interest | $ 55,122 | $ 64,738 |
| Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||
| Preferred stock to pay accrued liabilities | $ 300,000 | $ -- |
| Common stock to pay accrued liabilities | $ 1,619,692 | $ 1,004,127 |
| Dividends accrued on preferred stock | $ 444,645 | $ 463,419 |
| Dividends paid with preferred stock | $ 291,385 | $ -- |
| Series B Restructure | $ 2,141,980 | $ -- |
| See accompanying notes to consolidated condensed financial statements. | ||
| PARK CITY GROUP, INC. AND SUBSIDIARIES | ||||
| Reconciliation of GAAP and Non-GAAP Financial Measures | ||||
| Adjusted EBITDA | ||||
| (In $000's) | ||||
|
Three Months Ended March 31, |
Nine Months Ended March 31, |
|||
| 2015 | 2014 | 2015 | 2014 | |
| Net Loss | ($550) | ($406) | ($1,467) | ($2,004) |
| Adjusted EBITDA Reconciliation Adjustments: | ||||
| Depreciation and amortization | 190 | 212 | 565 | 680 |
| Bad debt expense | 33 | 112 | 125 | 172 |
| Interest, net | (69) | (32) | (171) | (60) |
| Stock based compensation | 547 | 469 | 1,796 | 1,324 |
| Adjusted EBITDA | $151 | $355 | $848 | $112 |
| Non-GAAP Net Income (Loss) to Common Shareholders and EPS | ||||
| (In $000's, except per share) | ||||
|
Three Months Ended March 31, |
Nine Months Ended March 31, |
|||
| 2015 | 2014 | 2015 | 2014 | |
| Net loss applicable to common shareholders | ($2,828) | ($561) | ($4,053) | ($2,467) |
| Non-GAAP Net Loss Reconciliation Adjustments: | ||||
| Stock based compensation | 547 | 469 | 1,796 | 1,324 |
| Acquisition related amortization | 106 | 106 | 317 | 357 |
| Restructure of preferred stock | 2,142 | -- | 2,142 | -- |
| Non-GAAP Net Income to Common Shareholders | ($33) | $14 | $202 | ($786) |
| Weighted average shares, diluted | 17,334,000 | 16,867,000 | 17,204,000 | 16,640,000 |
| Non-GAAP EPS, diluted | $0.00 | $0.00 | $0.01 | ($0.05) |
| Non-GAAP Free Cash Flow | ||||
| (In $000's) | ||||
|
Three Months Ended March 31, |
Nine Months Ended March 31, |
|||
| 2015 | 2014 | 2015 | 2014 | |
| Net Cash Provided by Operating Activities | ($56) | ($54) | $508 | ($712) |
| Non-GAAP Free Cash Flow Reconciliation Adjustments: | ||||
| Purchase of property and equipment | (2) | (202) | (21) | (439) |
| Non-GAAP Free Cash Flow | ($58) | ($256) | $487 | ($1,151) |
Free cash flow includes net cash provided (used) by operating activities less replacement purchases of property and equipment. Capital expenditures related to long-term investments and new technology developments are omitted.
