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Park City Group Increases Net Income 53%, and Earnings Per Share 60%, for the Third Fiscal Quarter of 2023

Park City Group, Inc. (NASDAQ: PCYG), parent company of ReposiTrak, the world's largest food traceability and regulatory compliance network, built upon its proven inventory management and out-of-stock reduction SaaS platform, today announced financial results for the third quarter of fiscal 2023 and year-to-date for the period ended March 31, 2023.

Third Quarter Financial Highlights:

  • Third quarter total revenue increased 6% to $4.8 million from $4.6 million.
  • Recurring revenue increased 6% for the quarter and represented 99.7% of total revenue.
  • Total quarterly operating expense decreased 2% to $3.3 million from $3.4 million.
  • Quarterly operating income increased 29% to $1.5 million from $1.2 million last year.
  • Quarterly GAAP net income increased 53% to $1.7 million from $1.1 million last year.
  • Quarterly net income to common shareholders was $1.5 million, up 61% from $0.9 million last year.
  • Quarterly EPS of $0.08, up 60% from $0.05 last year.
  • During the quarter, the Company repurchased 74,150 shares at an average price of $5.79 for a total of $429,271 during the quarter.

Fiscal Year-to-Date Financial Highlights:

  • Fiscal year-to-date revenue increased 6% to $14.3 million from $13.5 million.
  • Recurring revenue increased 7% year-to-date and represented 99.6% of total revenue.
  • Total year-to-date operating expense increased 2% to $10.4 million from $10.2 million.
  • Year-to-date operating income increased 19% to $3.9 million from $3.3 million last year.
  • Year-to-date GAAP net income increased 45% to $4.2 million from $2.9 million last year
  • Year-to-date net income to common shareholders was $3.8 million, up 53% from $2.5 million last year.
  • Year-to-date EPS of $0.20, up 54% from $0.13 last year.
  • Year-to-date cash from operations of $7.1 million, up 75% from $4.0 million last year.
  • Cash at March 31, 2023 was $22.9 million.

Randall K. Fields, Chairman and CEO of Park City Group commented, “I believe our financial performance speaks for itself. The results from our long standing, customer-centric strategy ensure our customers’ success with our services, while maintaining and deepening our relationship is driving growth. To that end, we have expanded our sales organization with the addition of senior customer relationship managers with deep, relevant and diversified industry experience, and augmented our senior management team, adding depth across virtually every functional area of the business. These additions have enabled us to solve real and important business problems for our customers. Solving those real problems for our customers is expanding our business.”

Mr. Fields continued, “Most of our growth is due to expanding the services to our existing customer network. However, we have added new customers and, importantly, we are already generating modest revenue from our ReposiTrak Traceability Network® (RTN), well ahead of schedule. We now have more than 3,000 grocery stores, about 1,100 suppliers and over 20 distribution centers committed to rolling out on our network, with just a fraction of the total suppliers onboarded. This represents about 8% of the retail grocery industry, just a small piece of the market we believe we will ultimately secure. We are now increasing our attention to other vertical markets affected by the FDA traceability rule, such as restaurants, and convenience stores.”

“Improved sales execution is facilitating an increase in cross-selling, which should accelerate our fiscal 2024 revenue growth,” added Mr. Fields. “Based on signed agreements already in-hand, we expect accelerated top-line growth to bring our growth rates in line with the 10-20% average we target, especially as the headwinds from de-emphasizing non-core revenue is largely behind us. With increasing benefits from the initial RTN revenue, we have growing confidence that fiscal 2024 will be a year of accelerating revenue growth and increased profitability.”

Third Fiscal Quarter Financial Results (three months ended March 31, 2023, vs. three months ended March 31, 2022):

Total revenue was up 6% to $4.82 million as compared to $4.56 million in the prior-year third quarter. Recurring revenue grew 6%. Total operating expense was $3.30 million, down 2% compared to $3.38 million last year, reflecting a 22% decrease in general and administrative expense, partially offset by investments in traceability and other growth initiatives. GAAP net income was $1.66 million compared to $1.09 million. Net income to common shareholders was $1.52 million, or $0.08 per diluted share, compared to $941,000, or $0.05 per diluted share.

Fiscal Year-to-Date Financial Results (nine months ended March 31, 2023, vs. nine months ended March 31, 2022):

Total revenue was $14.30 million, up 6% as compared to $13.47 million in the prior-year period. Total operating expense of $10.37 million was up 2% compared to $10.17 million last year. GAAP net income was $4.21 million compared to $2.91 million. Net income to common shareholders was $3.77 million, or $0.20 per diluted share, compared to $2.47 million, or $0.13 per diluted share.

Return of Capital:

In the third quarter, the Company repurchased 74,150 shares at an average price of $5.79 for a total of $429,271. The Company has approximately $9.8 million remaining on the $21 million total buyback authorization since inception.

In September 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.015 per share ($0.06 per year). Quarterly cash dividends will be paid to shareholders on or about 45 days following each quarterly period with the June 30 dividend expected to be paid in August.

Balance Sheet:

The Company had $22.9 million in cash and cash equivalents at March 31, 2023, compared to $21.5 million at June 30, 2022. The Company had nothing drawn on its working line of credit as of March 31, 2023 compared to $2.6 million at June 30, 2022.

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, May 15, 2023

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: 13738568

Replay Dial-In Numbers:

Toll Free: 1-844-512-2921

Toll/International: 1-412-317-6671

Replay Start: Monday, May 15, 2023, 7:15 p.m. ET

Replay Expiry: Thursday, June 15, 2023, 11:59 p.m. ET

Replay Pin Number: 13738568

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)

 

 

March 31,

2023

 

 

June 30,

2022

 

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 

$

22,941,493

 

 

$

21,460,948

 

Receivables, net of allowance for doubtful accounts of $168,699 and $206,093 at March 31, 2023 and June 30, 2022, respectively

 

 

2,242,187

 

 

 

3,165,200

 

Contract asset – unbilled current portion

 

 

285,474

 

 

 

649,433

 

Prepaid expense and other current assets

 

 

518,458

 

 

 

1,307,128

 

Total Current Assets

 

 

25,987,612

 

 

 

26,582,709

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

1,128,022

 

 

 

764,517

 

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

 

Deposits and other assets

 

 

22,414

 

 

 

22,414

 

Prepaid expense – less current portion

 

 

50,988

 

 

 

82,934

 

Contract asset – unbilled long-term portion

 

 

108,052

 

 

 

108,052

 

Operating lease – right-of-use asset

 

 

325,493

 

 

 

368,512

 

Customer relationships

 

 

295,650

 

 

 

394,200

 

Goodwill

 

 

20,883,886

 

 

 

20,883,886

 

Capitalized software costs, net

 

 

776,695

 

 

 

114,488

 

Total Other Assets

 

 

22,463,178

 

 

 

21,974,486

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

49,578,812

 

 

$

49,321,712

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

380,826

 

 

$

690,638

 

Accrued liabilities

 

 

1,662,400

 

 

 

1,206,284

 

Contract liability – deferred revenue

 

 

1,562,774

 

 

 

1,555,143

 

Lines of credit

 

 

-

 

 

 

2,590,907

 

Operating lease liability – current

 

 

57,502

 

 

 

53,862

 

Notes payable and financing leases – current

 

 

219,262

 

 

 

-

 

Total current liabilities

 

 

3,882,764

 

 

 

6,096,834

 

 

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

 

 

Operating lease liability – less current portion

 

 

278,401

 

 

 

321,818

 

Notes payable and financing leases – less current portion

 

 

200,770

 

 

 

-

 

Total liabilities

 

 

4,361,935

 

 

 

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 March 31, 2023 and June 30, 2022;

 

 

6,254

 

 

 

6,254

 

Series B-1 Preferred, 550,000 shares authorized; 212,402 shares issued and outstanding at March 31, 2023 and June 30, 2022, respectively

 

 

2,124

 

 

 

2,124

 

Common Stock, $0.01 par value, 50,000,000 shares authorized; 18,350,765 and 18,460,538 issued and outstanding at March 31, 2023 and June 30, 2022, respectively

 

 

183,510

 

 

 

184,608

 

Additional paid-in capital

 

 

68,022,970

 

 

 

68,653,361

 

Accumulated deficit

 

 

(22,997,981

)

 

 

(25,943,287

)

Total stockholders equity

 

 

45,216,877

 

 

 

42,903,060

 

Total liabilities and stockholders equity

 

$

49,578,812

 

 

$

49,321,712

 

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Operations (Unaudited)

 

 

Three Months Ended

March 31,

 

 

Nine Months Ended

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

4,824,101

 

 

$

4,555,906

 

 

$

14,295,091

 

 

$

13,469,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and product support

 

 

840,272

 

 

 

773,651

 

 

 

2,539,618

 

 

 

2,437,351

 

Sales and marketing

 

 

1,239,946

 

 

 

1,229,677

 

 

 

3,667,017

 

 

 

3,570,606

 

General and administrative

 

 

916,237

 

 

 

1,178,649

 

 

 

3,392,056

 

 

 

3,484,307

 

Depreciation and amortization

 

 

305,864

 

 

 

197,393

 

 

 

771,030

 

 

 

676,324

 

Total operating expense

 

 

3,302,319

 

 

 

3,379,370

 

 

 

10,369,721

 

 

 

10,168,588

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

1,521,782

 

 

 

1,176,536

 

 

 

3,925,370

 

 

 

3,300,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

275,941

 

 

 

24,975

 

 

 

554,299

 

 

 

167,015

 

Interest expense

 

 

(9,771

)

 

 

(13,919

)

 

 

(52,481

)

 

 

(20,120

)

Unrealized (loss) on short term investments

 

 

35,068

 

 

 

(65,889

)

 

 

(3,753

)

 

 

(328,987

)

Other gain (loss)

 

 

-

 

 

 

(5,649

)

 

 

70,047

 

 

 

(88,730

)

Income before income taxes

 

 

1,823,020

 

 

 

1,116,054

 

 

 

4,493,482

 

 

 

3,029,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Provision) for income taxes:

 

 

(160,000

)

 

 

(28,038

)

 

 

(280,006

)

 

 

(122,859

)

Net income

 

 

1,663,020

 

 

 

1,088,016

 

 

 

4,213,476

 

 

 

2,906,901

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends on preferred stock

 

 

(146,611

)

 

 

(146,611

)

 

 

(439,833

)

 

 

(439,833

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income applicable to common shareholders

 

$

1,516,409

 

 

$

941,405

 

 

$

3,773,643

 

 

$

2,467,068

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares, basic

 

 

18,394,000

 

 

 

19,019,000

 

 

 

18,408,000

 

 

 

19,255,000

 

Weighted average shares, diluted

 

 

18,751,000

 

 

 

19,422,000

 

 

 

18,702,000

 

 

 

19,579,000

 

Basic income per share

 

$

0.08

 

 

$

0.05

 

 

$

0.20

 

 

$

0.13

 

Diluted income per share

 

$

0.08

 

 

$

0.05

 

 

$

0.20

 

 

$

0.13

 

PARK CITY GROUP, INC.

Consolidated Condensed Statements of Cash Flows (Unaudited)

 

 

Nine Months Ended

March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

4,213,476

 

 

$

2,906,901

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

771,030

 

 

 

676,324

 

Amortization of operating right of use asset

 

 

43,019

 

 

 

312,826

 

Stock compensation expense

 

 

315,216

 

 

 

320,199

 

Bad debt expense

 

 

1,200,000

 

 

 

391,667

 

Gain on disposal of assets

 

 

-

 

 

 

(24,737

)

Loss on sale of property and equipment

 

 

-

 

 

 

107,820

 

(Increase) decrease in:

 

 

 

 

 

 

 

 

Accounts receivables

 

 

86,972

 

 

 

198,430

 

Long-term receivables, prepaids and other assets

 

 

655,391

 

 

 

(414,998

)

Increase (decrease) in:

 

 

 

 

 

 

 

 

Accounts payable

 

 

(309,812

)

 

 

26,210

 

Operating lease liability

 

 

(39,777

)

 

 

(306,798

)

Accrued liabilities

 

 

122,744

 

 

 

52,441

 

Deferred revenue

 

 

7,631

 

 

 

(213,321

)

Net cash provided by operating activities

 

 

7,065,890

 

 

 

4,032,964

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Sale of property and equipment

 

 

-

 

 

 

1,374,085

 

Capitalization of software costs

 

 

(769,243

)

 

 

-

 

Purchase of property and equipment

 

 

(133,944

)

 

 

(50,823

)

Net cash provided by (used in) investing activities

 

 

(903,187

)

 

 

1,323,262

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Net (decrease) increase in lines of credit

 

 

(2,590,907

)

 

 

(2,614,133

)

Common Stock buyback/retirement

 

 

(981,194

)

 

 

(5,212,452

)

Proceeds from employee stock plan

 

 

92,728

 

 

 

109,177

 

Dividends paid

 

 

(993,037

)

 

 

(439,833

)

Payments on notes payable and capital leases

 

 

(209,748

)

 

 

-

 

Net cash used in financing activities

 

 

(4,682,158

)

 

 

(8,157,241

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

1,480,545

 

 

 

(2,801,015

)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

21,460,948

 

 

 

24,070,322

 

Cash and cash equivalents at end of period

 

$

22,941,493

 

 

$

21,269,307

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

264,486

 

 

$

172,342

 

Cash paid for interest

 

$

52,481

 

 

$

21,607

 

Cash paid for operating leases

 

$

53,015

 

 

$

66,871

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Common stock to pay accrued liabilities

 

$

256,977

 

 

$

234,447

 

Dividends accrued on preferred stock

 

$

489,833

 

 

$

439,833

 

 

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