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Park City Group Reports 7% Increase in Revenue, Net Income More than Doubles, Cash of $23.9 Million for Fiscal Second Quarter 2021

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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, improve supply chain efficiencies, and source hard-to-find items, today announced financial results for the second fiscal quarter ended December 31, 2020.

Second Quarter Financial and Recent Business Highlights:

  • Total revenue increased to $5.2 million from $4.8 million, a 7% year-over-year increase resulting from higher MarketPlace revenue and recurring SaaS revenue. Fiscal 2020 revenue included $410,000 of one-time revenue that did not reoccur in fiscal 2021.

  • GAAP net income of $1.6 million which includes a $72,000 unrealized gain on investment and a $1.1 million gain on forgiveness of debt vs. net income of $660,000 in the prior year.

  • Net income to common shareholders of $1.5 million, inclusive of above-mentioned gains, vs. $516,000.

  • EPS $0.08 vs. $0.03 in the prior year second quarter.

Randall K. Fields, Chairman and CEO of Park City Group commented, "We continue to experience increased interest and higher levels of buying and selling activity across MarketPlace beyond our traditional base of food retailers who utilize our concierge and automated platform to secure hard-to-source supplies. Importantly, we have reached sufficient scale and established pricing models that enable sustainable profitability. With this, we can leverage our profitable business model to generate steady bottom-line growth, even if transactional revenues for hard-to-source items fluctuate from quarter to quarter."

"In parallel, we are beginning to rollout two added offerings to our platform, which are expected to contribute to revenue as the year progresses," continued Mr. Fields. "The first, within our MarketPlace solution, is a grant reconciliation solution, helping states accurately manage their FEMA procurement efforts before, during and after emergencies. Park City has signed up a U.S. state to pilot this offering, and we anticipate incremental revenue from this solution in this year. Our second offering is a Quality Management Solution or QMS, which is an extension of our existing compliance offering. We have experienced a high level of interest from customers and expect more revenue contribution from this in the coming quarters."

Second Quarter Financial Results (three months ended December 31, 2020 vs. three months ended December 31, 2019):

Total revenue increased 7% to $5.2 million as compared to $4.8 million due largely to growth in MarketPlace revenue and a 7% increase in recurring revenue. Total operating expense increased 14% to $4.8 million due to increased cost of revenue and product support due to the revenue mix, reflecting a greater portion of MarketPlace. GAAP net income was $1.6 million, inclusive of unrealized gains on investment activities and the forgiveness of a of $1.1 million PPP loan, versus $663,000. GAAP net income to common shareholders was $1.5 million, inclusive of the aforementioned gains, or $0.08 per diluted share, compared to $516,000, or $0.03 per diluted share.

Fiscal 2020 Year to Date Results (six months ended December 31, 2020 vs. six months ended December 31, 2019):

Total revenue increased 8.3% to $10.4 million for the six months ended December 31, 2020, as compared to $9.6 million during the same period a year ago. Total operating expense was $9.4 million, an increase of 5.6% from $8.9 million a year ago. GAAP net income was $2.2 million versus $842,000 a year ago, and GAAP net income to common shareholders was $1.9 million, or $0.10 per diluted share, compared to $548,000, or $0.03 per diluted share, a year ago.

Balance Sheet:

The Company had $23.9 million in cash and cash equivalents at December 31, 2020, compared to $19.0 million at December 31, 2019 and $20.4 million at June 30, 2020.

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: Tuesday, February 16th
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: 13715993

Replay Dial-In Numbers:
TOLL-FREE 1-844-512-2921
TOLL/INTERNATIONAL 1-412-317-6671
From: 2/16/21 @ 7:15 P.M. Eastern Time
To: 3/16/21 @ 11:59 P.M. Eastern Time
Replay Pin Number: 13715993

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 June 30, 2020 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 Condensed Balance Sheets (Unaudited)

Assets

December 31,
2020

June 30,
2020

Current Assets

Cash

$

23,894,653

$

20,345,330

Receivables, net of allowance for doubtful accounts of $338,684 and $251,954 at December 31, 2020 and June 30, 2020, respectively

3,043,727

4,007,316

Contract asset – unbilled current portion

2,122,958

2,300,754

Prepaid expense and other current assets

539,454

495,511

Total Current Assets

29,600,792

27,148,911

Property and equipment, net

2,817,608

3,003,402

Other Assets:

Deposits, and other assets

22,414

22,414

Prepaid expense – less current portion

49,819

77,030

Contract asset – unbilled long-term portion

310,656

838,726

Operating lease – right-of-use asset

738,941

781,137

Customer relationships

591,300

657,000

Goodwill

20,883,886

20,883,886

Capitalized software costs, net

-

18,539

Total Other Assets

22,597,016

23,278,732

Total Assets

$

55,015,416

$

53,431,045

Liabilities and Shareholders’ Equity

Current liabilities

Accounts payable

$

539,151

$

407,497

Accrued liabilities

1,741,087

1,123,528

Contract liability – deferred revenue

1,608,480

1,845,347

Lines of credit

5,720,175

4,660,000

Operating lease liability – current

87,952

85,767

Current portion of notes payable

-

310,242

Current portion of paycheck protection program loans

-

479,866

Total current liabilities

9,696,845

8,912,247

Long-term liabilities

Operating lease liability – less current portion

650,988

695,369

Notes payable – less current portion

-

610,512

Paycheck protection program loans

10,000

629,484

Total liabilities

10,357,833

10,847,612

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 December 31, 2020 and June 30, 2020, respectively

6,254

6,254

Series B-1 Preferred, 550,000 shares authorized; 212,402 shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively

2,124

2,124

Common Stock, $0.01 par value, 50,000,000 shares authorized; 19,529,422 and 19,484,485 issued and outstanding at December 31, 2020 and June 30, 2020, respectively

195,297

194,847

Additional paid-in capital

75,460,334

75,271,097

Accumulated deficit

(31,006,426

)

(32,890,889

)

Total stockholders’ equity

44,657,583

42,583,433

Total liabilities and stockholders’ equity

$

55,015,416

$

53,431,045

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Operations (Unaudited)

Three Months Ended
December 31,

Six Months Ended
December 31,

2020

2019

2020

2019

Revenue

$

5,174,204

$

4,837,332

$

10,399,606

$

9,637,416

Operating expense:

Cost of services and product support

2,091,588

1,425,309

4,072,545

3,253,423

Sales and marketing

1,205,295

1,446,517

2,488,336

2,861,380

General and administrative

1,231,139

1,114,251

2,313,064

2,336,462

Depreciation and amortization

261,597

222,499

510,097

416,177

Total operating expense

4,789,619

4,208,576

9,384,042

8,867,442

Income from operations

384,585

628,756

1,015,564

769,974

Other income (expense):

Interest income

81,503

65,982

115,844

148,713

Interest expense

(1,907

)

(16,042

)

(72,452

)

(36,640

)

Unrealized gain (loss) on short term investments

71,828

-

55,565

-

Gain on debt extinguishment

1,099,350

-

1,099,350

-

Income before income taxes

1,635,359

678,696

2,213,871

882,047

(Provision) for income taxes:

(12,500

)

(15,593

)

(36,186

)

(40,593

)

Net income

1,622,859

663,103

2,177,685

841,454

Dividends on preferred stock

(146,611

)

(146,611

)

(293,222

)

(293,222

)

Net income applicable to common shareholders

$

1,476,248

$

516,492

$

1,884,463

$

548,232

Weighted average shares, basic

19,526,000

19,741,000

19,508,000

19,775,000

Weighted average shares, diluted

19,716,000

20,052,000

19,653,000

20,033,000

Basic income per share

$

0.08

$

0.03

$

0.10

$

0.03

Diluted income per share

$

0.08

$

0.03

$

0.10

$

0.03

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Cash Flows (Unaudited)

Six Months
Ended December 31,

2020

2019

Cash flows operating activities:

Net income

$

2,177,685

$

841,454

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

510,097

416,177

Amortization of operating right of use asset

42,196

40,239

Stock compensation expense

166,923

244,505

Bad debt expense

310,000

250,000

Gain on debt extinguishment

(1,099,350

)

-

(Increase) decrease in:

Accounts receivables

520,719

(231,438

)

Long-term receivables, prepaids and other assets

685,158

665,474

(Decrease) increase in:

Accounts payable

131,654

225,970

Operating lease liability

(42,196

)

(40,239

)

Accrued liabilities

590,271

(284,418

)

Deferred revenue

(237,143

)

543,861

Net cash provided by operating activities

3,756,014

2,671,585

Cash flows investing activities:

Purchase of property and equipment

(103,218

)

(581,750

)

Net cash used in investing activities

(103,218

)

(581,750

)

Cash flows financing activities:

Net increase in lines of credit

1,060,175

-

Common Stock buyback/retirement

-

(1,355,037

)

Proceeds from employee stock plan

50,328

63,523

Dividends paid

(293,222

)

(293,222

)

Payments on notes payable and capital leases

(920,754

)

(145,747

)

Net cash used in financing activities

(103,473

)

(1,730,483

)

Net increase in cash and cash equivalents

3,549,323

359,352

Cash and cash equivalents at beginning of period

20,345,330

18,609,423

Cash and cash equivalents at end of period

$

23,894,653

$

18,968,775

View source version on businesswire.com: https://www.businesswire.com/news/home/20210216005244/en/

Contacts

Investor Relations Contact:

John Merrill, CFO
investor-relations@parkcitygroup.com

Or

FNK IR
Rob Fink
646.809.4048
rob@fnkir.com