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Park City Group, d/b/a ReposiTrak, Revenue Increases 7%, Net Income Increases 7%, and Earnings Per Share Increases 17%, for Fiscal 2024 First Quarter

Board Increases Quarterly Cash Dividend by 10% to 6.6 Cents Per Share Annually

Park City Group, Inc., d/b/a ReposiTrak (NYSE: TRAK), 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 first fiscal quarter (“FQ1 2024”) ended September 30, 2023.

First Quarter Financial Highlights:

  • First quarter total revenue increased 7% to $5.1 million from $4.7 million.
  • Recurring revenue increased 8%, net of the planned elimination of high-touch, low-opportunity revenue, to $5.0 million from $4.7 million, representing approximately 99.7% of total revenue.
  • Quarterly operating expense increased 11% to $3.9 million from $3.5 million, representing primarily one-time investment in sales and marketing to raise awareness about the FDA mandate and the ReposiTrak Traceability Network solution.
  • Quarterly operating income decreased 2% to $1.2 million from $1.2 million last year.
  • Quarterly GAAP net income increased 7% to $1.4 million from $1.3 million last year.
  • Quarterly net income to common shareholders was $1.2 million, up 8% from $1.1 million last year.
  • Quarterly EPS of $0.07, up 17% from $0.06 last year.
  • During the quarter, the Company repurchased 155,025 shares at an average price of $8.53 for a total of $1.3 million.
  • The Board of Directors approved an increase in the Company’s quarterly cash dividend, to 6.6 cents per share annually (1.65 cents per share quarterly), effective with the December dividend.

Randall K. Fields, Chairman and CEO of Park City Group commented, “As we expected, we continued to grow our recurring revenue, income and cash flow, while intensely focusing on our Traceability initiative. Our financial results this quarter reflected the success of that strategy. Our consistent cash generation has enabled the Board of Directors to authorize a 10% increase in our quarterly cash dividend starting with shareholders of record on December 29, 2023.”

“During the quarter, we invested more heavily than usual in sales and marketing expense to build the infrastructure for Traceability and continue to increase awareness,” continued Mr. Fields. “As a result, we have seen an acceleration in the adoption of Traceability – faster than we originally anticipated. We now have nearly 500 suppliers in the enrollment cycle, and about 1,000 in the queue that we anticipate will be added over the next nine to 12 months. Our Traceability revenues are modest at this point, but our pipeline is deep and we expect more hubs (and as a result, their many suppliers) accelerating implementations as the 2026 deadline looms.”

Mr. Fields continued, “Our current backlog will keep us very busy through the end of our current fiscal year, as we accelerate our implementation process. The revenue ramp from Traceability will grow accordingly throughout the year. We have created a durable moat around our business as we become the largest and preferred provider for the industry. As I have said before, while many are talking about traceability, we are the ones actually doing it, with live customers, operating at scale.”

First Fiscal Quarter Financial Results (three months ended September 30, 2023, vs. three months ended September 30, 2022):

Total revenue was up 7% to $5.06 million as compared to $4.72 million in the prior-year first quarter. Total operating expense was $3.86 million, up 11% compared to $3.49 million last year, reflecting a 25% increase in sales and marketing expense related to building awareness for Traceability and other growth initiatives. General and administrative expense increased by 5%. GAAP net income was $1.38 million compared to $1.29 million. Net income to common shareholders was $1.23 million, or $0.07 per diluted share, compared to $1.14 million, or $0.06 per diluted share.

Return of Capital:

In the first fiscal quarter of fiscal 2024, the Company repurchased 155,025 shares of common stock at an average price of $8.53 for a total of $1.3 million. Since inception, the Company has repurchased 2.05 million shares of common stock for $12.5 million at an average price per share of $6.22. The Company has approximately $8.5 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). In November 2023, the Board of Directors approved a 10% increase in the quarterly cash dividend, to 6.6 cents per share annually, or 1.65 cents per share quarterly, effective with the December 2023 dividend.

In September 2023, the Company announced it plans to redeem its Preferred Stock over the next three fiscal years. No Preferred Stock was redeemed during the quarter.

Balance Sheet:

The Company had $23.7 million in cash and cash equivalents at September 30, 2023, compared to $24.0 million at June 30, 2023. The Company had nothing drawn on its working line of credit as of September 30, 2023 or June 30, 2023.

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: Tuesday, November 14, 2023

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

Toll-Free: 1-877-300-8521

Toll/International 1-412-317-6026

Conference ID: 7050708

Replay Dial-In Numbers:

Toll Free: 1-844-512-2921

Toll/International: 1-412-317-6671

Replay Start: Tuesday, November 14, 2023, 7:15 p.m. ET

Replay Expiry: Thursday, December 14, 2023 at 11:59 PM ET

Replay Pin Number: 10184210

About Park City Group (d/b/a ReposiTrak)

Park City Group, Inc. d/b/a ReposiTrak (NYSE: TRAK), a compliance, supply chain, and e-commerce platform that partners with retailers, wholesalers, and their suppliers, to accelerate sales, control risk, and improve supply chain efficiencies. More information is available at 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, 2023, 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 d/b/a ReposiTrak, or ReposiTrak (“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 Group 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,

2023

 

 

June 30,

2023

 

Assets

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 

$

23,697,228

 

 

$

23,990,879

 

Receivables, net of allowance for doubtful accounts of $194,656 and $170,103 at September 30, 2023 and June 30, 2023, respectively

 

 

3,022,038

 

 

 

2,523,019

 

Contract asset – unbilled current portion

 

 

160,749

 

 

 

186,959

 

Prepaid expense and other current assets

 

 

316,473

 

 

 

573,763

 

Total Current Assets

 

 

27,196,488

 

 

 

27,274,620

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

844,705

 

 

 

986,300

 

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

 

Deposits and other assets

 

 

22,414

 

 

 

22,414

 

Prepaid expense – less current portion

 

 

21,147

 

 

 

36,282

 

Contract asset – unbilled long-term portion

 

 

108,052

 

 

 

108,052

 

Operating lease – right-of-use asset

 

 

295,967

 

 

 

310,796

 

Customer relationships

 

 

229,950

 

 

 

262,800

 

Goodwill

 

 

20,883,886

 

 

 

20,883,886

 

Capitalized software costs, net

 

 

619,866

 

 

 

698,281

 

Total Other Assets

 

 

22,181,282

 

 

 

22,322,511

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

50,222,475

 

 

$

50,583,431

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

314,888

 

 

$

431,387

 

Accrued liabilities

 

 

1,608,640

 

 

 

1,620,000

 

Contract liability – deferred revenue

 

 

2,080,424

 

 

 

1,903,001

 

Operating lease liability – current

 

 

60,063

 

 

 

58,771

 

Notes payable and financing leases – current

 

 

214,926

 

 

 

219,262

 

Total current liabilities

 

 

4,278,941

 

 

 

4,232,421

 

 

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

 

 

Operating lease liability – less current portion

 

 

247,537

 

 

 

263,047

 

Notes payable and financing leases – less current portion

 

 

81,534

 

 

 

206,032

 

Total liabilities

 

 

4,608,012

 

 

 

4,701,500

 

 

 

 

 

 

 

 

 

 

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, 2023 and June 30, 2023;

 

 

6,254

 

 

 

6,254

 

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

 

 

2,124

 

 

 

2,124

 

Common Stock, $0.01 par value, 50,000,000 shares authorized; 18,171,068 and 18,309,051 issued and outstanding at September 30, 2023 and June 30, 2023, respectively

 

 

181,713

 

 

 

183,093

 

Additional paid-in capital

 

 

66,507,428

 

 

 

67,732,887

 

Accumulated deficit

 

 

(21,083,056

)

 

 

(22,042,427

)

Total stockholders equity

 

 

45,614,463

 

 

 

45,881,931

 

Total liabilities and stockholders equity

 

$

50,222,475

 

 

$

50,583,431

 

PARK CITY GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

 

 

 

Three Months Ended

September 30,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

5,060,112

 

 

$

4,720,477

 

 

 

 

 

 

 

 

 

 

Operating expense:

 

 

 

 

 

 

 

 

Cost of revenue and product support

 

 

766,334

 

 

 

832,704

 

Sales and marketing

 

 

1,505,501

 

 

 

1,200,259

 

General and administrative

 

 

1,279,323

 

 

 

1,223,462

 

Depreciation and amortization

 

 

308,945

 

 

 

236,006

 

Total operating expense

 

 

3,860,103

 

 

 

3,492,431

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

1,200,009

 

 

 

1,228,046

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

258,161

 

 

 

79,092

 

Interest expense

 

 

(6,344

)

 

 

(24,652

)

Unrealized gain (loss) on short term investments

 

 

27,186

 

 

 

(7,415

)

Other gain (loss)

 

 

-

 

 

 

70,047

 

Income before income taxes

 

 

1,479,012

 

 

 

1,345,118

 

 

 

 

 

 

 

 

 

 

(Provision) for income taxes:

 

 

(100,464

)

 

 

(60,006

)

Net income

 

 

1,378,548

 

 

 

1,285,112

 

 

 

 

 

 

 

 

 

 

Dividends on preferred stock

 

 

(146,611

)

 

 

(146,611

)

 

 

 

 

 

 

 

 

 

Net income applicable to common shareholders

 

$

1,231,937

 

 

$

1,138,501

 

 

 

 

 

 

 

 

 

 

Weighted average shares, basic

 

 

18,225,000

 

 

 

18,465,000

 

Weighted average shares, diluted

 

 

18,839,000

 

 

 

18,753,000

 

Basic income per share

 

$

0.07

 

 

$

0.06

 

Diluted income per share

 

$

0.07

 

 

$

0.06

 

PARK CITY GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

 

 

 

Three Months Ended

September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

1,378,548

 

 

$

1,285,112

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

308,945

 

 

 

236,006

 

Amortization of operating right of use asset

 

 

14,829

 

 

 

14,142

 

Stock compensation expense

 

 

85,375

 

 

 

111,046

 

Bad debt expense

 

 

75,000

 

 

 

150,000

 

(Increase) decrease in:

 

 

 

 

 

 

 

 

Accounts receivables

 

 

(547,809

)

 

 

(255,281

)

Long-term receivables, prepaids and other assets

 

 

216,340

 

 

 

434,448

 

Increase (decrease) in:

 

 

 

 

 

 

 

 

Accounts payable

 

 

(116,499

)

 

 

(264,711

)

Operating lease liability

 

 

(57,164

)

 

 

(13,003

)

Accrued liabilities

 

 

(14,218

)

 

 

(58,182

)

Deferred revenue

 

 

177,423

 

 

 

171,898

 

Net cash provided by operating activities

 

 

1,520,770

 

 

 

1,811,475

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

-

 

 

 

(19,533

)

Net cash provided by (used in) investing activities

 

 

-

 

 

 

(19,533

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Net (decrease) increase in lines of credit

 

 

-

 

 

 

(1,294,317

)

Common Stock buyback/retirement

 

 

(1,322,082

)

 

 

(103,657

)

Proceeds from employee stock plan

 

 

57,743

 

 

 

48,903

 

Dividends paid

 

 

(421,248

)

 

 

(146,611

)

Payments on notes payable and capital leases

 

 

(128,834

)

 

 

(129,481

)

Net cash used in financing activities

 

 

(1,814,421

)

 

 

(1,625,163

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(293,651

)

 

 

166,779

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

23,990,879

 

 

 

21,460,948

 

Cash and cash equivalents at end of period

 

$

23,697,228

 

 

$

21,627,727

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

221,661

 

 

$

146,723

 

Cash paid for interest

 

$

2,329

 

 

$

24,653

 

Cash paid for operating leases

 

$

18,141

 

 

$

17,613

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Common stock to pay accrued liabilities

 

$

37,500

 

 

$

76,873

 

Dividends accrued on preferred stock

 

$

146,611

 

 

$

146,611

 

 

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