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Park City Group Inc. Message Board

  • novalmer novalmer Sep 24, 2013 12:50 PM Flag

    Conference Call PCYG Excellent

    Because it's their fourth fiscal quarter, PCYG focuses much more on the annual results and not so much on JunQ. Although they did report that JunQ revenue rose 19% YoY to $2.9 million while non-GAAP EPS came in at $0.01 which was flat with the year ago period. Total FY13 revenue increased 12% to $11.3 mln while subscription revenue increased 15% to $8.0 mln. Recall that PCYG is focused on transitioning from a license-based model for revenue to a subscription-based model. Since FY08, its revenue mix has transitioned from 6% subscription/94% license to what it is now: 70% subscription/ 30% license. Subscription revenue is more attractive because it's higher margin and more recurring in nature. Non-GAAP EPS for FY13 came in at $0.06 vs. breakeven in FY12. EBITDA increased 49% to $2.4 mln, which computes to a 21.2% margin vs. 15.8% in FY13.

    More important than the numbers, management provided some good color on the call in terms of where the company sees itself in the coming years. While they did not provide specific guidance and they added a lot of caveats, PCYG did say that within 3-5 years it's possible they will be doing "well in excess of $50 million in revenue" and that would still be a small percentage of the addressable market. Considering that they reported revenue of $11.3 mln in FY13, to be well in excess of $50 mln would be a huge amount of growth. That comment was probably the highlight of the call.

    Sentiment: Strong Buy

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    • the quarter actually was a disappointment with subscription revenue growth falling far behind investor expectations. The conference call was all about building castles in the air and zero substance. Never have been on a conference call where management outright ignored the recent numbers. Zero discussion. Partcipants that sounded like paid claqueurs. To be honest if this wasn't #$%$ company I would expect this to be a Chinese fraud.

      I already calculated that it would take 13 years for the company to reach annual revenues of $50 mln at current growth rates so clearly the CEO is just blabbering.

      Shorted this morning and will happily stay short until the stock has given back most of its recent undeserved gains.

    • Food Safety

      Turning to its emerging food safety business, PCYG developed a platform that seeks to improve supply chain visibility for food and drug safety. It's called ReposiTrak and it was developed in response to the passage of the Food Safety and Modernization Act (FSMA) in January 2011 which is requiring retailers to better track their food supply. ReposiTrak is gaining significant momentum and the company thinks it could become the standard in the food safety industry. It is generating some revenue but it's still very small.

      On the call, mgmt noted that FSMA has instructed the FDA to set up new regulations for food safety. Over the next few years, they will be implemented. The food industry is interested in creating a standard and ReposiTrak is potentially among the most interesting possibilities. PCYG noted that thousands of suppliers to its customers are in the pipeline to be on boarded over the next few years. "It's an enormous opportunity." Also, of note, PCYG has amended its ReposiTrak agreement with its joint venture partner Leavitt Partners. Basically, because PCYG provided some funding to the venture, they now have an option to increase their ownership from 49% to 75%.

      Sentiment: Strong Buy

11.27-0.33(-2.84%)Sep 4 4:00 PMEDT