Park City Net Income Increases 36%, EPS Up 50% for Fiscal First Quarter of 2023

Park City Group, Inc. (NASDAQ: PCYG), the parent company of ReposiTrak, Inc., which operates a B2B ecommerce, compliance, and supply chain platform that largely partners with grocery 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 first quarter of fiscal 2023, the period ended September 30, 2022.

Quarterly Financial Highlights:

  • Total revenue increased 4% to $4.72 million from $4.56 million.
  • Recurring revenue increased 6% to $ 4.68 million.
  • Total operating expense increased 3% to $3.5 million from $3.4 million.
  • Operating income increased 5% to $1.2 million from $1.2 million last year.
  • GAAP net income increased 36% to $1.3 million vs. net income of $947,000 last year
  • Net income to common shareholders was $1.1 million, up 42% vs. $800,000 last year.
  • Quarterly EPS of $0.06, up 50% from $0.04 last year.
  • Cash from operations of $1.8 million.
  • The Company repurchased 20,859 shares at an average price of $4.97 for a total of $103,657 during the quarter.
  • Declared a quarterly cash dividend of $0.015 per share ($0.06 per year), payable to shareholders of record on October 17, 2022.
  • Cash at September 30, 2022 was $21.6 million.

Randall K. Fields, Chairman and CEO of Park City Group commented, “Growth of 6% in our recurring revenue drove a 36% increase in GAAP net income and a 50% increase in earnings per share, demonstrating the compelling leverage and earnings power of our business model. This systemic profitability enabled us to continue investing in our business to drive efficiency as we scale, repurchase more than 20,000 shares of our common stock and reduced our bank debt by 50%. At the same time, the Traceability opportunity is rapidly accelerating.”

“Just last week, the U.S. Food and Drug Administration provided more information on the track-and-trace initiative, and though proposed timelines are likely to be litigated and delayed, early adopters are already taking steps to prepare for the new mandates,” added Mr. Fields. “Many of our larger customers are aligned with the FDA’s goals, as traceability provides significant visibility into the supply chain, reducing risk and improving efficiency. We are partnered with National Grocers Association, a leading trade organization that covers one-third of all grocery stores and more independent owners than any other trade group, and working with major grocers to deploy parts of our traceability solution in parts of their business before broad-based requirements take hold.”

Mr. Fields concluded, “With $21.6 million, or $1.17 per share, in cash, Park City maintains a fortress balance sheet. In addition, we have more than five consecutive years of GAAP profitability, and during the first quarter, we generated $1.8 million in cash from operations. We are well positioned to succeed in an economic environment that is likely to challenge smaller, less capitalized competitors.”

First Fiscal Quarter Financial Results (three months ended September 30, 2022, vs. three months ended September 30, 2021):

Total revenue was $4.72 million as compared to $4.56 million in the prior-year first quarter, as growth in recurring revenue offset the planned elimination of non-recurring revenue and sunsetting for non-core services. Total operating expense of $3.5 million was up 3% compared to $3.4 million last year, reflecting investments in traceability and other growth initiatives. GAAP net income was $1.3 million compared to $947,000. Net income to common shareholders was $1.1 million, or $0.06 per diluted share, compared to $800,000, or $0.04 per diluted share.

Return of Capital:

In the first quarter, the Company repurchased 20,859 shares at an average price of $4.97 for a total of $103,657. The Company has approximately $10.7 million remaining on the $21 million total buyback authorization since inception.

In September, the Company’s Board of Directors declared a quarterly cash dividend of $0.015 per share ($0.06 per year), payable to shareholders of record on October 17, 2022. Cash dividends will be paid to shareholders of record on or about November 15, 2022. Based on the closing price on September 26, 2022, this represents an annual dividend yield of approximately 1.06%. Subsequent quarterly dividends will be paid within 45 days of the shareholders of record date of December 31, March 31, June 30 and September 30.

Balance Sheet:

The Company had $21.6 million in cash and cash equivalents at September 30, 2022, compared to $21.5 million at June 30, 2022. The Company had $1.3 million drawn on its working line of credit as of September 30, 2022 compared to $2.6 million at June 30, 2022. Funds were utilized to buy back additional shares of stock.

Conference Call:

The Company will host a conference call at 4:15 p.m. Eastern today to discuss the Company’s results. 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: Monday, November 14, 2022

Time: 4:15 p.m. ET (1:15 p.m. PT)

Toll-Free: 1-888-396-8063

Toll/International 1- 416-764-8652

Conference ID: 55468115

Replay Dial-In Numbers:

Toll Free: 1-844-512-2921

Toll/International: 1-412-317-6671

Replay Start: Monday, November 14, 2022, 7:15 p.m. ET

Replay Expiry: Wednesday, December 14, 2022, 11:59 p.m. ET

Replay Pin Number: 55468115

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)

 

 

 

September 30,

2022

 

 

June 30,

2022

 

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 

$

21,627,727

 

 

$

21,460,948

 

Receivables, net of allowance for doubtful accounts of $193,151 and $206,093 at September 30, 2022 and June 30, 2022, respectively

 

 

3,076,535

 

 

 

3,165,200

 

Contract asset – unbilled current portion

 

 

551,546

 

 

 

649,433

 

Prepaid expense and other current assets

 

 

1,116,014

 

 

 

1,307,128

 

Total Current Assets

 

 

26,371,822

 

 

 

26,582,709

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

1,061,649

 

 

 

764,517

 

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

 

Deposits and other assets

 

 

22,414

 

 

 

22,414

 

Prepaid expense – less current portion

 

 

75,167

 

 

 

82,934

 

Contract asset – unbilled long-term portion

 

 

108,052

 

 

 

108,052

 

Operating lease – right-of-use asset

 

 

354,370

 

 

 

368,512

 

Customer relationships

 

 

361,350

 

 

 

394,200

 

Goodwill

 

 

20,883,886

 

 

 

20,883,886

 

Capitalized software costs, net

 

 

68,625

 

 

 

114,488

 

Total Other Assets

 

 

21,873,864

 

 

 

21,974,486

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

49,307,335

 

 

$

49,321,712

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

425,927

 

 

$

690,638

 

Accrued liabilities

 

 

1,459,437

 

 

 

1,206,284

 

Contract liability - deferred revenue

 

 

1,727,041

 

 

 

1,555,143

 

Lines of credit

 

 

1,296,590

 

 

 

2,590,907

 

Operating lease liability - current

 

 

55,076

 

 

 

53,862

 

Notes payable and financing leases – current

 

 

132,007

 

 

 

-

 

Total current liabilities

 

 

5,096,078

 

 

 

6,096,834

 

 

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

 

 

Operating lease liability – less current portion

 

 

307,601

 

 

 

321,818

 

Notes payable and financing leases – less current portion

 

 

117,138

 

 

 

-

 

Total liabilities

 

 

5,520,817

 

 

 

6,418,652

 

 

 

 

 

 

 

 

 

 

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 September 30, 2022 and June 30, 2022;

 

 

6,254

 

 

 

6,254

 

Series B-1 Preferred, 550,000 shares authorized; 212,402 shares issued and outstanding at September 30, 2022 and June 30, 2022, respectively

 

 

2,124

 

 

 

2,124

 

Common Stock, $0.01 par value, 50,000,000 shares authorized; 18,468,346 and 18,460,538 issued and outstanding at September 30, 2022 and June 30, 2022, respectively

 

 

184,686

 

 

 

184,608

 

Additional paid-in capital

 

 

68,675,402

 

 

 

68,653,361

 

Accumulated deficit

 

 

(25,081,948

)

 

 

(25,943,287

)

Total stockholders equity

 

 

43,786,518

 

 

 

42,903,060

 

Total liabilities and stockholders equity

 

$

49,307,335

 

 

$

49,321,712

 

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Operations (Unaudited)

 

 

 

Three Months Ended

September 30,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

4,720,477

 

 

$

4,559,677

 

 

 

 

 

 

 

 

 

 

Operating expense:

 

 

 

 

 

 

 

 

Cost of revenue and product support

 

 

832,704

 

 

 

846,487

 

Sales and marketing

 

 

1,200,259

 

 

 

1,188,893

 

General and administrative

 

 

1,223,462

 

 

 

1,096,656

 

Depreciation and amortization

 

 

236,006

 

 

 

261,164

 

Total operating expense

 

 

3,492,431

 

 

 

3,393,200

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

1,228,046

 

 

 

1,166,477

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

79,092

 

 

 

55,156

 

Interest expense

 

 

(24,652

)

 

 

(2,898

)

Other gain (loss)

 

 

70,047

 

 

 

(83,081

)

Unrealized gain (loss) on short term investments

 

 

(7,415

)

 

 

(149,291

)

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

1,345,118

 

 

 

986,363

 

 

 

 

 

 

 

 

 

 

(Provision) for income taxes:

 

 

(60,006

)

 

 

(39,546

)

Net income

 

 

1,285,112

 

 

 

946,817

 

 

 

 

 

 

 

 

 

 

Dividends on preferred stock

 

 

(146,611

)

 

 

(146,611

)

 

 

 

 

 

 

 

 

 

Net income applicable to Common Stockholders

 

$

1,138,501

 

 

$

800,206

 

 

 

 

 

 

 

 

 

 

Weighted average shares, basic

 

 

18,465,000

 

 

 

19,383,000

 

Weighted average shares, diluted

 

 

18,753,000

 

 

 

19,669,000

 

Basic income per share

 

$

0.06

 

 

$

0.04

 

Diluted income per share

 

$

0.06

 

 

$

0.04

 

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Cash Flows (Unaudited)

 

 

 

Three Months Ended

September 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

1,285,112

 

 

$

946,817

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

236,006

 

 

 

261,164

 

Amortization of operating right-of-use asset

 

 

14,142

 

 

 

22,051

 

Stock compensation expense

 

 

111,046

 

 

 

88,246

 

Bad debt expense

 

 

150,000

 

 

 

125,000

 

Loss on sale of property and equipment

 

 

-

 

 

 

107,820

 

Gain on disposal of assets

 

 

-

 

 

 

(24,737

)

(Increase) decrease in:

 

 

 

 

 

 

 

 

Accounts receivables

 

 

(255,281

)

 

 

(258,029

)

Long-term receivables, prepaid and other assets

 

 

434,448

 

 

 

129,335

 

(Decrease) increase in:

 

 

 

 

 

 

 

 

Accounts payable

 

 

(264,711

)

 

 

(95,369

)

Accrued liabilities

 

 

(58,182

)

 

 

(165,555

)

Operating lease liability

 

 

(13,003

)

 

 

(22,051

)

Deferred revenue

 

 

171,898

 

 

 

3,369

 

Net cash provided by operating activities

 

 

1,811,475

 

 

 

1,118,061

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(19,533

)

 

 

-

 

Sale of property and equipment

 

 

-

 

 

 

1,374,085

 

Net cash provided by (used in) investing activities

 

 

(19,533

)

 

 

1,374,085

 

 

 

 

 

 

 

 

 

 

Cash flows financing activities:

 

 

 

 

 

 

 

 

Net decrease in lines of credit

 

 

(1,294,317

)

 

 

(6,000,000

)

Common Stock buy-back

 

 

(103,657

)

 

 

(41,276

)

Proceeds from employee stock purchase plan

 

 

48,903

 

 

 

56,577

 

Dividends paid

 

 

(146,611

)

 

 

(146,611

)

Payments on notes payable and capital leases

 

 

(129,481

)

 

 

-

 

Net cash used in financing activities

 

 

(1,625,163

)

 

 

(6,131,310

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

166,779

 

 

 

(3,639,164

)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

21,460,948

 

 

 

24,070,322

 

Cash and cash equivalents at end of period

 

$

21,627,727

 

 

$

20,431,158

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

146,723

 

 

$

172,342

 

Cash paid for interest

 

$

24,653

 

 

$

2,898

 

Cash paid for operating leases

 

$

17,613

 

 

$

30,600

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Common Stock to pay accrued liabilities

 

$

76,873

 

 

$

172,500

 

Dividends accrued on preferred stock

 

$

146,611

 

 

$

146,611

 

 

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