PARK CITY GROUP ANNOUNCES FISCAL FIRST QUARTER 2005 RESULTS
ACHIEVES RECORD REVENUES AND NET INCOME
PARK CITY, UT - November 11, 2005 - Park City Group, Inc. (OTCBB:PKCY), a
leading provider of software and consulting services for the retail industry,
today announced financial results for its fiscal first quarter. The company
reported revenues for the quarter were $3,698,865 compared to $989,675 in last
year's period, and net income of $2,154,816, or $0.01 per share compared to a
loss of $444,621, or ($0.00) in last year's same period.
Software license revenues were $2,630,453 and $162,163 for the quarters ended
September 30, 2005 and 2004. This increase is primarily a result of our
previously announced licensing agreement with Cannon Equipment Co. Maintenance
and support revenues were $608,446 and $623,494 for the quarters ended September
30, 2005 and 2004, respectively. This decrease is primarily attributable to two
existing Action Manager customers reducing their maintenance fees due to store
closures. ASP revenues were $48,900 and $11,600 for the quarters ending
September 30, 2005 and 2004, respectively. This increase was the result of
improved results in the Perishable Manufacturing Channel, which has achieved
four new contracts in the last six months. Consulting and other revenue was
$411,066 and $192,420 for the quarters ended September 30, 2005 and 2004,
respectively. This increase is spread evenly between increased Action Manager
and FMM implementation services and from the Cannon agreement.
Gross margin was 88% and 70%, for the quarters ended September 30, 2005 and
2004, respectively. This increase was primarily attributable to the ratio of
license sales to the total revenue amount. Operating costs were relatively flat
for the quarter compared to last year's same period, and operating profit was
$2,451,951, or 66% of net revenues compared to a loss of $170,063 in last year's
same period.
President and CEO, Randy Fields commented, "Our financial performance in this
past quarter was a significant milestone for our company, as we closed important
licensing deals, paid down a significant portion of our debt, and reported our
largest net profit in the company's history. Though we're obviously pleased with
that, we still have plenty of work to do in terms of smoothing out our revenue
stream and we would expect a fair amount of "lumpiness" in our quarterly
financials as we move forward with our plans to grow the business. We should not
expect that this quarter is indicative of the remaining quarters for the year,
but we do expect that the year will be one that shows substantial improvements
in top- and bottom-line results compared to last year.
"The management team we've assembled has identified a definitive need in the
retail marketplace, and our strategy goes beyond developing and selling
solutions that fit this need. Our longer-term goal is to be a provider of
innovative solutions that enable managers at every retail level-including store,
department, and region-to more efficiently increase their control and
profitability. Our customers consistently report to us that they're enjoying
significant increases in profitability and operating efficiencies as a result of
deploying our solutions, which include our software implementations and ongoing
maintenance and consulting services that our experienced team of retailers
provides.
"Alliances with retail suppliers, both on the Fresh Market Manager and Action
Manager fronts, continue to provide us with opportunities to expand our
distribution channel through product trials, in traditional supermarket-grocery
and gas/convenience stores and with broader retail market customers. Our
previously announced agreement in the quarter with Share & Compare, a supplier
of information solutions to the convenience store market, highlights the appeal
of our solutions beyond supermarkets. The team is focused on expanding our
distribution network, and ultimately our presence with retailers, both large and
small, as we pursue additional suppliers and other upstream participants to
partner with," concluded Fields."
September 30, 2005 September 30, 2004
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Revenues:
Software licenses $ 2,630,453 $ 162,163
Maintenance and support 608,446 623,492
ASP 48,900 11,600
Consulting and other 411,066 192,420
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Total revenues 3,698,865 989,675
Cost of revenues 404,651 300,154
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Gross margin 3,294,214 689,521
Operating expenses:
Research and development 235,909 256,081
Sales and marketing 283,200 293,394
General and administrative 313,155 310,109
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Total operating expenses 832,264 859,584
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Income (loss) from operations 2,461,950 (170,063)
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Interest expense (297,135) (274,558)
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Income (loss) before income taxes 2,164,815 (444,621)
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Income tax (expense) benefit
Net Income (loss) $ 2,164,815 $ (444,621)
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Weighted average shares, basic 282,850,000 269,105,000
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Weighted average shares, diluted 283,989,000 269,105,000
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Basic earnings (loss) per share $ 0.01 $ (0.00)
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Diluted Earnings (loss) per share $ 0.01 $ (0.00)
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Consolidated Condensed Balance Sheet (Unaudited)
September 30, 2005 June 30, 2005
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Assets
Current assets:
Cash $ 159,442 $ 209,670
Receivables, net of allowance for doubtful accounts of $53,000 553,860 356,336
Prepaid expenses and other current assets 124,196 37,060
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Total current assets 837,498 603,069
Property and equipment, net of accumulated depreciation and amortization 100,428 109,512
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Other assets:
Deposits and other assets 25,000 25,000
Capitalized software costs, net of accumulated amortization of $797,636 265,879 332,349
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Total other assets 290,879 357,349
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Total assets $ 1,228,805 $ 1,069,930
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Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 173,914 $ 628,398
Accrued liabilities 1,139,796 1,164,964
Deferred revenue 1,509,513 883,425
Deposits for un-issued stock 36,667
Current Portion of Long term capital lease obligations 20,493
Current portion of long-term debt and capital lease obligations,
net of discount 338,813 23,159
Current portion of notes payable 336,187 332,625
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Related party lines of credit 619,743
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Total current liabilities 3,555,383 5,597,338
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Long-term liabilities
Long-term related party debt, net of discount 3,186,137 3,173,414
Capital lease obligations, less current portion 3,919 2,127
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Total long-term liabilities 3,190,056 3,175,541
Total liabilities 6,745,439 8,772,879
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Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.01 par value, 30,000,000 shares authorized, none
issued - Common stock, $0.01 par value, 300,000,000 shares authorized;
284,978,326 issued and outstanding 2,828,463 2,825,561
Additional paid-in capital 10,056,291 10,037,693
Accumulated deficit (18,401,388) (20,556,203)
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Total Stockholders' deficit (5,516,634) (7,702,949)
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$ 1,228,805 $ 1,069,930
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About Park City Group
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Park City Group, Inc. develops and markets patented computer software that helps
its retail customers to increase their sales while reducing their inventory and
labor costs: the two largest, controllable expenses in the retail industry. The
technology has its genesis in the operations of Mrs. Fields Cookies, co-founded
by Randy Fields, CEO of Park City Group, Inc. Industry leading customers such as
The Home Depot, Victoria's Secret, The Limited, Anheuser Busch Entertainment and
Tesco Lotus benefit from our software. Feel free to contact us (Media Contact
Randy Fields) at 800-772-4556 or info@parkcitygroup.com. For more about Park
City Group (OTCBB:PKCY - News; Berlin: WKN# 925919), visit our website at
www.parkcitygroup.com.
Forward-Looking Statements:
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This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements regarding
the Company's anticipated financial results for its first quarter and fiscal
year ending July 2, 2006. These forward-looking statements are based on the
Company's expectations and are subject to risks and uncertainties that cannot be
predicted or quantified and are beyond the Company's control. Future events and
actual results could differ materially from those set forth in, contemplated by,
or underlying these forward-looking statements. These risks and uncertainties
include economic and market conditions, audit-related costs and findings and
legal proceedings and their effects on the Company's expected financial results.
Other factors that could cause actual results to differ materially from
expectations are described in the Company's reports filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.
Contacts:
At Park City Group
Randy Fields
800-772-4556
Info@parkcitygroup.com
At Cameron Associates
Peter Seltzberg, Vice President
(212) 245-8800 Ext. 205
peter@cameronassoc.com