Park City Group Reports Second Quarter Fiscal 2012 Financial Results

Food and Drug Safety Partnership Planned with Leavitt Partners
Marks an Important Strategic Milestone

  • Quarterly subscription revenue of $1.7 million, a 5.4% increase year over year
  • 2Q12 total revenue of $2.6 million versus $2.7 million during the same period a year ago
  • 2Q12 free cash flow of $414,000
  • 2Q12 adjusted EBITDA of $429,000
  • 2Q12 GAAP EPS ($0.03), versus breakeven during 2Q11
  • 2Q12 non-GAAP EPS breakeven, versus $0.03 during 2Q11
  • Year over year total debt reduction of $817,000, a 20% decrease

PARK CITY, Utah – February 14, 2012 – 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 second quarter ended December 31, 2011.

“Our three primary initiatives during fiscal 2012 are to increase the adoption of our end-to-end supply chain management solutions, expand into at least one new retail vertical outside of the grocery industry, and validate our track and trace technology for use as a food and drug safety registry. We made significant progress on all three of these initiatives during the first half of the year,” said Randall K. Fields, Park City Group’s Chairman and CEO. “We’re seeing an acceleration of customers deploying more of our solutions deeper into their supply chains. In addition, we’re increasingly confident of a significant win in an additional vertical market given our growing sales pipeline.”

“Finally, our recently announced venture with Leavitt Partners has significant implications for both the adoption of our food and drug safety global registry, as well as for the future overall growth of our Company. Leavitt Partners provides industry-recognized thought leadership that will accelerate the adoption of our track and trace technology as the industry standard. Successful adoption not only provides the opportunity to expand our addressable market, but also offers the potential to significantly increase our revenue and profitability. It’s currently anticipated that the partnership will be a newly created entity primarily capitalized by independent investors. As a result of these three initiatives, growth of our retail/supplier connections and revenue should begin to accelerate during the fourth quarter.”


Total revenue for the second quarter ended December 31, 2011 was $2.6 million, a 6.5% decrease from the prior year. The Company said its shift to a subscription based revenue model makes quarterly comparisons of maintenance, professional services, and license revenue difficult, as these can vary significantly from quarter to quarter. The decrease in non-subscription revenues was largely anticipated, and reflects management’s emphasis on growing subscription revenue in future periods. Subscription revenue is expected to continue to increase as a percentage of revenue and other revenue categories will continue to decrease, or remain volatile. This was evident during the second quarter, as maintenance, professional services, and license revenue decreased 15%, 36%, and 27%, respectively.

Subscription revenue during the second quarter increased 5.4% to $1.7 million, reflecting growth of retail and supplier customers contracted during the last several quarters, which was partially offset by customer churn. “Our churn rate was slightly higher than normal during the second quarter, which offset subscription revenue growth by approximately five percentage points,” said David Colbert, the Company’s Chief Financial Officer.

Commenting on revenue trends, Mr. Fields said, “So far this fiscal year, more than a dozen of our current retail and supplier customers have agreed to deploy additional point solutions that help not only diagnose problems within their supply chains, but also provide solutions to those problems. This is solid evidence that our shift from being a tactical to a strategic service provider is accelerating.”

Net (Loss) Income

Net loss available to common shareholders for the quarter ended December 31, 2011 was ($385,000), or ($0.03) per share, as compared to a net loss of ($22,000), or ($0.00) per share, during the prior year period. Non-GAAP EPS for the second quarter were $0.00 versus $0.03 during the same period last year.


During the quarter ended December 31, 2011, free cash flow was $414,000, compared to $482,000 during the same period last year. On a year over year basis, the Company reduced its debt balance by $817,000, or 20%, to end the second quarter with a balance of $3.2 million. Total cash was $942,000 at December 31, 2011.

The Company will host a conference call at 4:30 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: 48543871. The conference call is also being webcast and is available via the investor relations section. A toll free replay of the conference call will be available until February 21, 2012 by dialing (855) 859-2056 and entering Conference ID: 48543871.

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.

ReposiTrakTM 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. ReposiTrakTM, 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.

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

Consolidated Condensed Statements of Operations (Unaudited)

Consolidated Condensed Balance Sheet

Consolidated Condensed Balance Sheet

Consolidated Condensed Statements of Cash Flows (Unaudited)

Reconciliation of GAAP and Non-GAAP Financial Measures

Non-GAAP Net Income (Loss) to Common Shareholders and EPS
(In $000’s, except per share)
Unaudited results of operations

Non-GAAP Free Cash Flow
(In $000’s)
Unaudited results of operations

Non-GAAP Net Debt
(In $000’s)
Unaudited results of operations

Contact Sales

Have Sales Contact Me!

Your Name

Your Email

Your Phone

Question / Comment

Enter the text in the image