Park City Group Reports First Quarter Fiscal 2012 Financial Results
On Track for Accelerated Subscription Revenue Growth
·
Quarterly subscription revenue of $1.7 million, a 12% increase year over year
·
1Q12 total revenue of $2,579,000 versus $2,566,000 during the same period a year ago
·
1Q12 adjusted EBITDA of $373,000, versus $571,000 during the same period a year ago
·
1Q12 GAAP EPS ($0.04), versus ($0.05) during 1Q11
·
1Q12 Non-GAAP EPS ($0.00), versus $0.02 during 1Q11
·
Contracted 17 supplier connections (“Spokes”) during 1Q12
PARK CITY, Utah – November 14, 2011 -- Park City Group (NYSE Amex: PCYG), a Software-as-a-Service (SaaS) provider of unique supply chain solutions for retailers and their suppliers, today announced results for its fiscal first quarter ended September 30, 2011.
“During the first quarter, subscription revenue grew by 12% and we are on pace to add 200 supplier connections during fiscal 2012, consistent with our plan. While the pace of our growth is likely to fluctuate from quarter to quarter, we anticipate a continued acceleration in subscription growth during the balance of our fiscal year. Our pipeline of near-term opportunities continues to grow as customers are discovering our ability to not only diagnose problems within their supply chain, but also provide end-to-end solutions to those problems. As such, we have seen increasing interest in customers deploying additional Park City Group solutions across their entire footprint,” said Randall K. Fields, Park City Group’s Chairman and CEO.
Revenue
Total revenue for the first quarter ended September 30, 2011 was $2.6 million, a 1% increase from the prior year. Subscription revenue during the first quarter increased 12% to $1.7 million, reflecting growth of retail and supplier customers contracted during the last several quarters. The Company said its shift to a subscription based revenue model makes quarterly comparisons of license and professional services revenue difficult, as these can vary significantly from quarter to quarter. However, on an annual basis, the Company anticipates showing year-over-year growth in these revenue categories. This variability was evident during the first quarter of fiscal 2012 as professional services and license revenue decreased 33% and 9%, respectively. Also as a result of the shift to the subscription model, maintenance revenue decreased 19%.
Net (Loss) Income
Net loss available to common shareholders for the quarter ended September 30, 2011 improved to ($488,000), or ($0.04) per share, as compared to a net loss of ($509,000), or ($0.05) per share, during the prior year period. Non-GAAP EPS for the first quarter were ($0.00) versus $0.02 during the same period last year.
Cash
During the quarter ended September 30, 2011, free cash flow was ($76,000), compared to ($63,000) during the same period last year. During the first quarter the Company made a $1.5 million debt payment, reducing total debt to $3.4 million. Total cash was $1.0 million at September 30, 2011.
“We have an incredible value proposition that helps retailers and their suppliers solve both out-of-stock and overstock issues and, in turn, increase sales and improve returns on capital. We have already proven our value in the grocery industry and are looking to expand into at least one new retail vertical this fiscal year,” said Mr. Fields.
“Customer interest in expanded relationships is accelerating, which is a good sign that we are making progress in moving from tactical to strategic relationships. We continue to focus on building a ‘Customer First’ culture that is obsessed with delivering a superb return on investment for our customers. As such, our growth is only limited by our desire to execute flawlessly at the customer level.”
The Company will host a conference call at 4:15 P.M. Eastern to discuss today’s results. Investors and interested parties may participate in the call by dialing (877) 675-3568 and referring to Conference ID: 18447967. The conference call is also being webcast and is available via the investor relations section of the Company’s website, www.parkcitygroup.com. A toll free replay of the conference call will be available until November 21, 2011 by dialing (855) 859-2056 and entering conference ID: 18447967.
About Park City Group
Park City Group (NYSE Amex: PCYG) is a Software-as-a-Service (“SaaS”) provider that brings unique visibility to the consumer goods supply chain. With over $100 million invested in development and 16 years of commercialization surrounding its proprietary scan based data platform, the Company’s services increase customers’ sales and profitability, while ensuring regulatory compliance for both retailers and their suppliers.
Through a process known as Consumer Driven Sales OptimizationTM, Park City Group helps retail and consumer packaged goods customers turn transactional information into actionable strategies to lower inventory, increase sales and improve efficiencies in the supply chain.
The Company’s Food Safety Global RegistryTM provides food retailers and suppliers with a robust solution that will help them protect their brands and remain in compliance with rapidly evolving regulations in the recently-passed Food Safety Modernization Act. The Food Safety Global Registry, an internet-based technology, will enable all participants in the farm-to-table supply chain to easily manage tracking and traceability requirements as products move between trading partners. For more information, go to www.parkcitygroup.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.
Investor Relations Contact:
Dave Mossberg
Three Part Advisors, LLC
817-310-0051
-- tables to follow –
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations (Unaudited)
| | | | |
| Three Months Ended September 30 |
| 2011 |
| 2010 |
Revenues: |
|
|
|
Subscription | $1,742,131 |
| $1,549,547 |
Maintenance | 515,295 |
| 568,219 |
Professional services and other revenue | 194,044 |
| 290,220 |
Software licenses | 127,810 |
| 158,000 |
|
|
|
|
|
| Total revenues | 2,579,280 |
| 2,565,986 |
|
|
|
|
|
Operating revenues: |
|
|
|
Cost of services and product support | 1,140,261 |
| 891,555 |
Sales and marketing | 661,748 |
| 619,598 |
General and administrative | 759,537 |
| 1,064,322 |
Depreciation and amortization | 223,965 |
| 194,113 |
|
|
|
|
|
| Total operating expenses | 2,785,511 |
| 2,769,588 |
|
|
|
|
|
(Loss) Income from operations | (206,231) |
| (203,602) |
|
|
|
|
|
Other income (expense): |
|
|
|
Interest expense | (73,490) |
| (98,491) |
|
|
|
|
|
(Loss) income before income taxes | (279,721) |
| (302,093) |
|
|
|
|
|
(Provision) benefit for income taxes | - |
| - |
|
|
|
|
|
| Net (loss) income | (279,721) |
| (302,093) |
|
|
|
|
|
| Dividends on preferred stock | (208,353) |
| (207,096) |
|
|
|
|
|
| Net (loss) income applicable to common shareholders |
$ (488,074) |
|
$ (509,189) |
|
|
|
|
|
Weighted average shares, basic and diluted | 11,650,000 |
| 10,950,000 |
Basic and diluted loss per share | $ (0.04) |
| $ (0.05) |
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
| | | | | |
|
|
|
|
|
| September 30, 2011 |
| June 30, 2011 |
Assets | (Unaudited) |
|
|
|
|
|
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents | $ 996,344 |
| $ 2,618,228 |
| Receivables, net of allowance of $46,803 and $15,581 |
|
|
|
| at September 30, 2011 and June 30, 2011, respectively | 1,556,894 |
| 2,059,773 |
| Prepaid expenses and other current assets | 230,634 |
| 265,818 |
|
|
|
|
|
| Total current assets | 2,783,872 |
| 4,943,820 |
|
|
|
|
|
| Property and equipment, net | 590,220 |
| 651,992 |
|
|
|
|
|
| Other assets: |
|
|
|
| Deposits and other assets | 24,026 |
| 24,029 |
| Customer relationships | 3,079,388 |
| 3,184,967 |
| Goodwill | 4,805,933 |
| 4,805,933 |
| Capitalized software costs, net | 328,872 |
| 365,413 |
|
|
|
|
|
| Total other assets | 8,238,219 |
| 8,380,339 |
|
|
|
|
|
| Total assets | $ 11,612,311 |
| $ 13,976,151 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
| Accounts payable | $ 487,920 |
| $ 790,914 |
| Accrued liabilities | 1,240,472 |
| 1,162,775 |
| Deferred revenue | 1,342,614 |
| 1,663,232 |
| Capital lease obligations | 88,196 |
| 107,547 |
| Lines of credit | 1,200,000 |
| 1,200,000 |
| Note payable | 912,362 |
| 2,414,853 |
|
|
|
|
|
| Total current liabilities | 5,271,564 |
| 7,339,321 |
|
|
|
|
|
| Long-term liabilities: |
|
|
|
| Notes payable, less current portion | 1,250,350 |
| 1,271,691 |
| Capital lease obligations, less current portion | 25,880 |
| 41,202 |
|
|
|
|
|
| Total liabilities | 6,547,794 |
| 8,652,214 |
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
| | | | |
|
|
|
|
|
| September 30, 2011 |
| June 30, 2011 |
|
| (Unaudited) |
|
|
Stockholders’ equity: |
|
|
|
Series A Convertible Preferred stock, $0.01 par value, 30,000,000 shares |
|
|
|
authorized; 672,670 and 667,955 shares issued and outstanding at September 30, 2011 and June 30, 2011, respectively |
6,727 |
|
6,680 |
Series B Convertible Preferred stock, $0.01 par value, 30,000,000 shares |
|
|
|
authorized; 411,927 shares issued and outstanding at September 30, 2011 and June 30, 2011 |
4,119 |
|
4,119 |
Common stock, $0.01 par value, 50,000,000 shares authorized; 11,657,901 and |
|
|
|
11,612,460 issued and outstanding at September 30, 2011 and June 30, 2011, |
|
|
|
respectively | 116,579 |
| 116,125 |
| Additional paid-in capital | 36,316,737 |
| 36,088,584 |
Accumulated deficit | (31,379,645) |
| (30,891,571) |
|
|
|
|
|
Total stockholders’ equity | 5,064,517 |
| 5,323,937 |
|
|
|
|
|
Total liabilities and stockholders’ equity | $ 11,612,311 |
| $ 13,976,151 |
|
|
|
|
|
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows (Unaudited)
| | | | |
| Three Months Ended September 30, |
| 2011 |
| 2010 |
Cash Flows From Operating Activities: |
|
|
|
| Net income (loss) | $ (279,721) |
| $ (302,093) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
| Depreciation and amortization | 223,964 |
| 194,113 |
| Bad debt expense | 42,597 |
| - |
| Stock compensation expense | 252,767 |
| 143,210 |
| Stock issued for litigation settlement | - |
| 375,000 |
Decrease (increase) in: |
|
|
|
| Trade receivables | 460,282 |
| (60,211) |
| Prepaids and other assets | 35,184 |
| (37,490) |
(Decrease) increase in: |
|
|
|
| Accounts payable | (302,994) |
| 38,438 |
| Accrued liabilities | (167,519) |
| (264,577) |
| Deferred revenue | (320,618) |
| (42,900) |
|
|
|
|
|
| Net cash provided by operating activities | (56,058) |
| 43,490 |
|
|
|
|
|
Cash Flows From Investing Activities: |
|
|
|
| Purchase of property and equipment | (20,072) |
| (16,661) |
| Capitalization of software costs | - |
| (89,428) |
|
|
|
|
|
| Net cash used in investing activities | (20,072) |
| (106,090) |
|
|
|
|
|
Cash Flows From Financing Activities: |
|
|
|
| Proceeds from exercise of warrants | 12,750 |
| - |
| Proceeds from issuance of note payable | 137,028 |
| - |
| Dividends paid | - |
| (123,578) |
| Payments on notes payable and capital leases | (1,695,533) |
| (200,141) |
|
|
|
|
|
| Net cash (used in) provided by financing activities | (1,545,755) |
| (323,719) |
|
|
|
|
|
Net decrease in cash | (1,621,885) |
| (386,319) |
|
|
|
|
|
Cash and cash equivalents at beginning of period | 2,618,229 |
| 1,157,431 |
|
|
|
|
|
Cash and cash equivalents at end of period | $ 996,344 |
| $ 771,112 |
|
|
|
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
Cash paid for income taxes | $ - |
| $ - |
Cash paid for interest | $ 133,350 |
| $ 112,948 |
|
|
|
|
Supplemental Disclosure of Non-cash Investing and Financing Activities |
|
|
|
Common stock to pay accrued liabilities | $ 133,154 |
| $ 212,872 |
Dividends accrued on preferred stock | $ 208,353 |
| $ 207,096 |
Dividends paid with preferred stock | $ 82,750 |
| $ 80,300 |
|
|
|
|
|
PARK CITY GROUP, INC. AND SUBSIDIARIES
Reconciliation of GAAP and Non-GAAP Financial Measures
Adjusted EBITDA
(In $000’s)
Audited results of operations
| | | |
| Three Months Ended September 30 |
| 2011 |
| 2010 |
|
|
|
|
Net Income (loss) | ($280) |
| ($302) |
|
|
|
|
Adjusted EBITDA Reconciliation Adjustments: |
|
|
Depreciation and amortization | 224 |
| 194 |
Bad debt expense | 43 |
| 0 |
Interest, net | 73 |
| 98 |
Stock based compensation | 253 |
| 131 |
One-time expenses (stock and cash) | 60 |
| 450 |
|
|
|
|
Adjusted EBITDA | $373 |
| $571 |
|
|
|
|
Non-GAAP Net Income (Loss) to Common Shareholders and EPS
(In $000’s, except per share)
Audited results of operations
| | | |
| Three Months Ended September 30 |
| 2011 |
| 2010 |
|
|
|
|
Net Income (loss) | ($280) |
| ($302) |
|
|
|
|
Non-GAAP Net Income (Loss) Reconciliation Adjustments: |
|
|
Stock based compensation | 253 |
| 131 |
One-time expenses (stock and cash) | 60 |
| 450 |
Acquisition related amortization (1) | 126 |
| 126 |
|
|
|
|
Non-GAAP Net Income | $159 |
| $405 |
|
|
|
|
Preferred dividends | (208) |
| (207) |
|
|
|
|
Non-GAAP Net Income to Common Shareholders | ($49) |
| $198 |
|
|
|
|
Weighted average shares, diluted | 11,650,000 |
| 10,950,000 |
Non-GAAP EPS, diluted | ($0.00) |
| $0.02 |
Non-GAAP Free Cash Flow
(In $000’s)
Audited results of operations
| | | |
| Three Months Ended September 30 |
| 2011 |
| 2010 |
|
|
|
|
Net Cash Provided by Operating Activities | ($56) |
| $43 |
|
|
|
|
Non-GAAP Free Cash Flow Reconciliation Adjustments: |
|
|
Purchase of property and equipment | (20) |
| (17) |
Capitalized software costs | - |
| (89) |
|
|
|
|
Non-GAAP Free Cash Flow | ($76) |
| ($63) |
|
|
|
|
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. During 1Q12 the Company invested $0 in new technology development.
Non-GAAP Net Debt
(In $000’s)
Audited results of operations
| | | | |
|
| Three Months Ended |
|
| September 30 |
|
| 2011 |
| 2010 |
|
|
|
|
|
Total Debt |
| $3,363 |
| $4,119 |
|
|
|
|
|
Less Total Cash |
| $996 |
| $771 |
|
|
|
|
|
Non-GAAP Net Debt |
| $2,367 |
| $3,348 |
|
|
|
|
|
