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Park City Group Reports Fiscal Fourth Quarter and Full-Year 2017 Results
[September 13, 2017]

Park City Group Reports Fiscal Fourth Quarter and Full-Year 2017 Results


Fourth Quarter Revenue Growth Accelerates to Record 37%, Full-Year Growth to Record 35%
FY 2017 Net Income Increases to Record $3.8 million, or 20% of Revenue, from $667,000 in FY 2016
Management Expects FY 2018 Revenue Growth Within 3-5 Year Annual Target of 25% to 35%

SALT LAKE CITY, Sept. 13, 2017 (GLOBE NEWSWIRE) -- Park City Group, Inc. (NASDAQ:PCYG), a software company that uses big data management to help retailers and their suppliers increase sales and lower costs, while simultaneously reducing compliance risks, announced financial results for the fourth quarter and fiscal-year ended June 30, 2017.   

Strategic and Financial Highlights:

  • Fiscal 4Q17 revenue growth accelerates to a record 37%, driving full-year revenue growth to 35%. “Our top-line growth and financial success is directly correlated to providing successful outcomes for our customers. Great execution builds trust, leads to deeper customer engagement and referrals, and expands both the scale and scope of our business,” said Randall K. Fields, Park City Group’s Chairman and CEO. “As a result, revenue increased a record 37% in fiscal 4Q17 to $5.2 million. Revenue for the full-year increased 35% to $18.9 million, at the high end of our 25% to 35% annual growth target.”

  • Fiscal 2017 net margin expands to 20%, driving record profit and cash flow performance. “Our focus on customer success drives a network effect that enables growth without the need for heavy investment in sales and marketing. As a result, we generated significant operating leverage with fiscal 4Q17 GAAP net income increasing 78% to $883,000, or 17.0% of revenue, and fiscal 2017 GAAP net income increasing 467% to $3.8 million, or 20.0% of revenue. Operating cash flow for the full-year increased to $2.3 million from $503,000 last year, lifting total cash to $14.1 million,” said Mr. Fields.

  • ReposiTrak supplier connections nearly double as momentum continues to accelerate. “During fiscal 2017, we increased the scale of our network by adding nearly as many ReposiTrak hubs and supplier connections as we did in the prior four years cumulatively,” said Mr. Fields. “Growth in total connections is being driven by the addition of large retail and wholesale hubs. However, we are also seeing a substantial acceleration in growth from smaller supplier hubs, which we expect to become an increasingly meaningful part of our business going forward, given the far greater number of prospects.”

  • Continuous expansion of ReposiTrak’s service offering reinforces industry leadership. “We have been busy increasing the scope of our network by introducing new applications that expand ReposiTrak’s capabilities. These include the ability of a hub to require deeper levels of compliance, down to individual items; new applications that help ensure product quality and safety; and tighter integration with the industry-standard food safety audit platforms. These new services enhance the value proposition to ReposiTrak’s hubs and their suppliers, reinforcing our industry leadership,” said Mr. Fields.

  • Successful introduction of converged business strategy solidifies multi-year growth outlook. “During the year, we successfully introduced Vendor Portal, our unified service delivery platform, and MarketPlace, our compliant-vendor sourcing solution, expanding ReposiTrak’s scope beyond that of a food safety and compliance platform, while helping to reinforce the scale of our network,” said Mr. Fields. “We are very encouraged by the favorable reaction from our customers and expect a more meaningful revenue contribution from both in fiscal 2018.”

  • Management continues to expect top-line growth of 25% to 35% and margin expansion. “We are benefiting from the positive network effect of our customers’ success. We look to add more ReposiTrak hubs and supplier connections in fiscal 2018 than in fiscal 2017. We are also exploring alliances both domestically and internationally to further increase the scale of our network. As a result, we are confident fiscal 2018 will be within our multi-year annual growth target of 25% to 35%, while operating leverage should drive higher margins and an even faster growing cash balance,” said Mr. Fields.

Financial Results Summary:

Fiscal 4Q17 Results: Total revenue increased 37% to $5.2 million for the three months ended June 30, 2017, as compared to $3.8 million during the same period a year ago. Total operating expenses were $4.3 million, a 30% increase from $3.3 million a year ago, reflecting planned investments. GAAP net income was $883,000, versus $498,000 a year ago, and GAAP net income to common shareholders was $677,000, or $0.03 per diluted share, as compared to $315,000, or $0.02 per diluted share, a year ago.

Fiscal 2017 Results: Total revenue increased 35% to $18.9 million for the twelve months of fiscal 2017, as compared to $14.0 million in fiscal 2016. Total operating expenses were $15.0 million, a 13% increase from $13.3 million in fiscal 2016. GAAP net income for fiscal 2017 was $3.8 million, versus $667,000 in fiscal 2016, and GAAP net income to common shareholders was $3.0 million, or $0.15 per diluted share, versus a loss of $63,000, or ($0.00) per share, in fiscal 2016.

Cash and Liquidity: The Company ended fiscal 2017 with $14.1 million in cash and cash equivalents, versus $11.4 million at the end of the fiscal 2016. During fiscal 2017, the Company generated $2.3 million in operating cash flow as compared to $503,000 in operating cash flow in fiscal 2016.

Conference Call:

The Company will host a conference call at 4:15 P.M. Eastern today, September 13, 2017 to discuss the results. Investors and interested parties may participate in the call by dialing 888-778-8913 and referring to Conference ID: 8591568. 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 (PCYG) is a Software-as-a-Service (“SaaS”) provider that brings unique visibility to the consumer goods supply chain, delivering actionable information to ensure products are available when and where consumers demand them, helping retailers and suppliers to ‘Sell More, Stock Less, and See Everything’™. Park City Group’s technology also assists all participants in the food and drug supply chains to comply with food and drug safety regulations through the Company’s ReposiTrak subsidiary.  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, 2017 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.

Investor Relations Contact:

Jeff Elliott
Three Part Advisors, LLC
972-423-7070

Dave Mossberg
Three Part Advisors, LLC
817-310-0051

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   12 Months Ended
FY ENDS June  6/30/17
   6/30/16
   % Chg.
   6/30/17
   6/30/16
   % Chg.
                    
Total Revenues  $   5,188,477    $   3,794,941    37 %   $   18,939,263    $   14,010,693    35 %
                    
Operating Expenses                   
Cost of Services and Product Support   1,581,351    1,056,176   50%    5,318,042    4,279,724   24%
Sales and Marketing   1,394,097    1,263,329   10%    5,097,072    5,371,005   (5%)
General and Administrative   1,169,154    847,761   38%    4,136,996    3,165,077   31%
Depreciation and Amortization   149,684    124,993   20%    486,024    507,446   (4%)
Total Operating Expenses   4,294,286    3,292,259   30%    15,038,134    13,323,252   13%
                    
Income (Loss) from Operations  $   894,191    $   502,682    78 %   $   3,901,129    $   687,441    467 %
                    
Other Income (Expenses)                   
Interest Income (Expense)   (8,356)   (5,138)  63%    (26,408)   5,190   NM 
Gain (Loss) on Disposal of Investment   10,380    -   NM     10,380    (26,128)  NM 
                     
Income (Loss) Before Taxes   896,215    497,544   80%    3,885,101    666,503   NM 
                     
(Provision) Benefit for Taxes   (12,914)   -   NM     (107,569)   -   NM 
                    
Net Income (Loss)  $   883,301    $   497,544    78 %   $   3,777,532    $   666,503    467 %
                    
Dividends on Preferred Stock   (206,523)   (182,752)  13%    (790,811)   (729,288)  8%
                    
                    
Net Income (Loss) to Common Shareholders$676,778   $314,792   115%   $2,986,721   $(62,785)  NM 
                     
GAAP EPS, Basic  $   0.03    $   0.02    113 %   $   0.15    $   (0.00)  NM 
GAAP EPS, Diluted  $   0.03    $   0.02    112 %   $   0.15    $   (0.00)  NM 
                     
Weighted Average Shares, Basic   19,419,000    19,219,000        19,353,000    19,151,000    
Weighted Average Shares, Diluted   20,324,000    19,994,000        20,264,000    19,151,000    
                    
                    
                    
                    
Park City Group, Inc.                   
RECONCILIATION OF NON-GAAP ITEMS                
          
                    
   3 Months Ended   12 Months Ended
FY ENDS June   6/30/17    6/30/16   % Change
    6/30/17    6/30/16   % Change 
                    
Net Income (Loss)  $883,301   $497,544   78%   $3,777,532   $666,503   NM 
                     
Adjustments:                    
Depreciation and Amortization   149,684    124,993   20%    486,024    507,446   (4%)
Interest Income (Expense)   8,356    5,138   63%    26,408    (5,190)  NM 
Other (Incl. Bad Debt Exp.)   104,620    51,128   105%    335,320    94,268   256%
Stock Compensation Expense   305,216    235,110   30%    1,266,805    1,010,312   25%
                    
Adjusted EBITDA  $   1,451,177    $   913,913    59 %   $   5,892,089    $   2,273,339    159 %
                    
                    
Net Income (Loss)  $883,301   $497,544   78%   $3,777,532   $666,503   467%
                    
Adjustments:                   
Stock Compensation Expense   305,216    235,110   30%    1,266,805    1,010,312   25%
Acquisition Related Amortization   32,850    32,850   -     131,400    131,400   - 
Other   (10,380)   -   NM     (10,380)   26,128   NM 
                    
Adjusted non-GAAP Net Income (Loss)   1,210,987    765,504   58%    5,165,357    1,834,343   182%
                    
Dividends on Preferred Stock   (206,523)   (182,752)  13%    (790,811)   (729,288)  8%
                    
Adjusted non-GAAP Net Income (Loss)                   
to Common Shareholders  $1,004,464   $582,752   72%   $4,374,546   $1,105,055   296%
                    
Adjusted Non-GAAP EPS  $   0.05    $   0.03    70 %   $   0.22    $   0.06    278 %
                    
Weighted Average Shares, Diluted   20,324,000    19,994,000        20,264,000    19,332,000    
                    
                    
                    
                    
Park City Group, Inc.                   
CONSOLIDATED BALANCE SHEET                
                    
             Fiscal Year Ended   
FY ENDS June             6/30/17    6/30/16    
                    
Assets                   
                    
Current Assets:                   
Cash & Equivalents            $14,054,006   $11,443,388    
Accounts Receivables, Net Allowances             4,009,127    3,048,774    
Prepaid Expenses and Other Current Assets          643,600    393,275    
Total Current Assets            $   18,706,733    $   14,885,437     
                    
Property and Equipment, Net            $2,115,277   $469,383    
                    
Other Assets:                   
Long-Term Receivables, Deposits, and Other          2,540,291    514,060    
Investments             477,884    471,584    
Customer Relationships             1,051,200    1,182,600    
Goodwill             20,883,886    20,883,886    
Capitalized Software Costs, Net             137,205    182,942    
Total Other Assets            $25,090,466   $23,235,072    
                    
Total Assets            $   45,912,476    $   38,589,892     
                    
                    
Liabilities                   
                    
Current Liabilities:                   
Accounts Payable            $565,487   $580,309    
Accrued Liabilities             2,084,980    1,502,203    
Deferred Revenue             2,350,846    2,717,094    
Lines of Credit             2,850,000    2,500,000    
Current Portion of Notes Payable             318,616    239,199    
Total Current Liabilities            $   8,169,929    $   7,538,805     
                    
Long-Term Liabilities:                   
Notes Payable, Less Current Portion             1,996,953    491,253    
Other Long-Term Liabilities             36,743    57,275    
Total Long-Term Liabilities            $2,033,696   $548,528    
                    
Total Liabilities            $   10,203,625    $   8,087,333     
                    
Shareholder Equity                   
                    
Series B Preferred            $6,254   $6,254    
Series B-1 Preferred             2,859    1,802    
Common Stock             194,241    192,296    
Additional Paid-In Capital             75,489,189    73,272,620    
Accumulated Deficit             (39,983,692)   (42,970,413)   
                    
Total Shareholder Equity            $   35,708,851    $   30,502,559     
                    
Total Liabilities and Shareholder Equity            $   45,912,476    $   38,589,892     
                    
                    
                    
                    
Park City Group, Inc.                   
CONSOLIDATED STATEMENT OF CASH FLOWS                
                 
                 
             Fiscal Year Ended   
FY ENDS June             6/30/17    6/30/16    
                    
Cash Flows From Operating Activities:                   
Net Income (Loss)            $3,777,532   $666,503    
                    
Adjustments to Reconcile Net Income (Loss), in Operating Activities:                
Depreciation and Amortization             486,024    507,446    
Bad Debt Expense             345,700    68,140    
Stock Compensation Expense             1,266,805    1,010,312    
Loss on Short-Term Marketable Securities          (10,380)   26,128    
Decrease (Increase) in Trade Receivables          (2,325,075)   (1,975,517)   
Decrease (Increase) in Prepaid Expenses and Other Assets          (1,257,534)   70,152    
Increase (Decrease) in Accounts Payable           (14,822)   (236,810)   
Increase (Decrease) in Accrued Liabilities           355,136    (18,305)   
Increase (Decrease) in Deferred Revenue           (366,248)   385,174    
                    
Net Cash From (Used In) Operating Activities         $   2,257,138    $   503,223     
                    
Cash Flows From Investing Activities:                   
Purchase of Marketable Securities             -    (4,639,036)   
Cash from Sale of Marketable Securities             -    4,612,908    
Cash from Sale of Property and Equipment           13,000    -    
Capitalization of Software Costs             -    (182,942)   
Purchase of Property and Equipment             (1,957,402)   (80,987)   
Purchase of Long-Term Investments             (6,300)   (75,584)   
                    
Net Cash From (Used In) Investing Activities         $   (1,950,702)  $   (365,641)   
                    
Cash Flows From Financing Activities:                   
Proceeds from Employee Stock Plans             223,465    199,848    
Proceeds from Exercise of Options and Warrants          156,176    33,002    
Proceeds from Issuance of Notes Payable           1,824,617    -    
Net Increase in Line of Credit             350,000    -    
Dividends Paid             (10,576)   (10,575)   
Payments on Notes Payable and Capital Leases          (239,500)   (242,041)   
                    
Net Cash From (Used In) Financing Activities         $   2,304,182    $   (19,766)   
                    
Net Increase (Decrease) in Cash            $   2,610,618    $   117,816     
                    
Cash at Beginning of Period             11,443,388    11,325,572    
                    
Cash at End of Period            $   14,054,006    $   11,443,388     
                    

 

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