Park City Group Reports First Quarter Financial Results

Business Integration Involving Pending Acquisition of Prescient Applied Intelligence Yields Significant Expense Reductions

PARK CITY, UT – Nov. 17, 2008Park City Group, Inc. (OTCBB: PCYG), a developer and marketer of patented computer software and consulting services which enable its retail customers to increase sales while reducing inventory and labor costs, today announced financial results for the first quarter ended September 30, 2008.

Highlights for the first quarter include:

  • Supply Chain Profit Link (SCPL) subscription initiated upon completion of $47 million identified opportunity gap for a 200+ store supermarket retailer
  • Completion of an SCPL opportunity evaluation, uncovering $19 million in lost opportunity for 1,300 store supermarket retailer – retailer presently evaluating SCPL subscription
  • Enhanced ActionManager® labor technology system for leading home improvement specialty retailer
  • Entered agreement to acquire Prescient Applied Intelligence (OTCBB: PPID)
    • Combined companies will provide one of the most comprehensive inventory and labor management solutions for suppliers and retailers and dramatically improved EBITDA

For the first quarter of fiscal 2009 the company reported that revenues decreased 38 percent to $530,278 as compared with $854,264 for the same period last year.  Lower revenue results were due in part to a $320,000 reduction in license and maintenance revenues when comparing the quarter ended 2008 with the same period in 2007. As previously announced, in 2007 the Company modified its business strategy to focus on increasing sales of its suite of software products on a subscription basis.  The Company will continue to generate licensing revenues, which by their nature are less predictable, and are best evaluated on an annual, rather than quarterly, basis.

Total operating expenses for the first quarter of fiscal 2009 were down 17 percent, or $300,843, when compared with the same period in 2008.  This is the result of a combination of efficiencies recognized in the pending merger with Prescient which included a reduction in total headcount, a reduction in consultant costs and recruitment fees, and in one-time expenses comprised of patent defense costs and stock compensation expense.

This resulted in a net loss applicable to common shareholders of ($1,209,884), or ($0.13) loss per share, as compared with ($737,216), or ($0.08) loss per share, in the same period last year.  When excluding one-time items, including income associated with patent activities of $200,000 in first quarter of fiscal 2008 which did not occur in the same period in fiscal 2009, and ($197,205) operating loss associated with the Company’s 8 percent investment in Prescient, the adjusted net loss applicable to common shareholders for the period ended September 30, 2008 and 2007 was, ($924,283) and ($854,724), respectively.

Commenting on the results, Park City Group’s Chairman and CEO, Randall K. Fields said, “We continue to make important sales and marketing inroads as we focus on strategic initiatives to increase the use of our SCPL software as a renewable and recurring subscription-based tool. In the first quarter we signed a new SCPL subscription after uncovering a $47 million opportunity gap during an introductory trial.  While the transition to a recurring revenue stream will have its’ challenges, we are focused on our goal to deliver increasingly predictable financial results.  As retailers and manufacturers experience greater challenges in retaining their best customers, interest in our SCPL program strengthens in all sectors.

“Now that the distractions related to the early stages of pending acquisition of Prescient are behind us, we are focused on maximizing strengths of our combined businesses,” Fields said.  “We expect that revenues will begin to reflect an improving trend in the third quarter.  This merger provides an important, game changing benefit for our company — and we expect to realize benefits which will impact virtually all levels of our business.  Approximately 80 percent of the integration plan has already been completed and $3 million in annual cost reduction measures have already been taken and will be reflected over the next several quarters.”

Upon customary SEC review and Prescient shareholder approval, the Company will purchase the remaining outstanding common and preferred shares of Prescient and Prescient will merge with a newly formed subsidiary and become a wholly owned subsidiary of Park City Group.

About Park City Group

Park City Group, Inc. develops and markets patented computer software and consulting services that help retailers and their suppliers to increase sales while reducing inventory and labor costs — the two largest, controllable expenses. The technology has its genesis in the operations of Mrs. Fields Cookies, co-founded by Randy Fields, chief executive officer of Park City Group. Industry-leading customers such as The Home Depot, Victoria’s Secret, The Limited, Anheuser Busch Entertainment and Tesco Lotus benefit from Park City Group software. To find out more about Park City Group, please visit

Statements in this news release that relate to Park City Group’s future plans, objectives, expectations, performance, events and the like are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Those factors could include changes in economic conditions that may change demand for the Company’s products and services and other factors discussed in the “forward-looking information” section and the “risk factor” section of the management’s discussion and analysis included in the Company’s report on Form 10-K for the year ended June 30, 2008 and in any risk factors or cautionary statements contained in the Company’s periodic reports on Form 10-Q or current reports on Form 8-K filed with the Securities and Exchange Commission. This presentation is comprised of interrelated information that must be interpreted in the context of all of the information provided and care should be exercised not to consider portions of this release out of context. Park City Group uses paid services of investor relations organizations to promote the Company to the investment community. Investments in any company should be considered speculative and prior to acquisition, should be thoroughly researched. Park City Group does not intend to update these forward-looking statements prior to announcement of quarterly or annual results.


Consolidated Condensed Statements of Operations (Unaudited)

For the Three Months Ended September 30, 2008 and 2007


Three Months ended September 30,









Subscriptions $           58,104   $           85,917
Maintenance 288,632   378,806
Professional services and other revenue 145,302   126,472
Software licenses 38,240   263,069
  Total revenues 530,278   854,264
Operating expenses:      
Cost of services and product support 580,544   579,854
Sales and marketing 300,472   419,301
General and administrative 415,241   621,539
Depreciation and amortization 135,563   111,969
  Total operating expenses 1,431,820   1,732,663
Loss from operations (901,542)   (878,399)
Other income (expense):      
Income from patent activities   200,000
Loss on equity method investment (197,205)  
Interest (expense) income (22,741)   23,675
Loss before income taxes (1,121,488)   (654,724)
(Provision) benefit for income taxes  
  Net loss (1,121,488)   (654,724)
  Dividends on preferred stock (88,396)   (82,492)
  Net loss applicable to common shareholders $    (1,209,884)   $       (737,216)
Weighted average shares, basic and diluted 9,303,000   9,022,000
Basic and diluted loss per share $             (0.13)   $             (0.08)

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