Park City Group (PCYG) Misses Q2 EPS by 1c, Revenues Miss

Park City Group (NASDAQ: PCYG) reported Q2 EPS of $0.03, $0.01 worse than the analyst estimate of $0.04. Revenue for the quarter came in at $4.84 million versus the consensus estimate of $5.07 million.

Second Quarter Financial and Recent Business Highlights:

• Total revenue decreased 13% year-over-year due to lower one-time revenue.
• Recurring revenue increased 3% comparatively, constituting 83% of total revenue.
• Operating expense increased 8% year-over-year due to higher MarketPlace costs.
• Net income of $663,000.
• EPS $0.03 vs. $0.08 in the prior year second quarter.
• Fiscal year-to-date operating cash flow grew 46% to $2.7 million. Cash totaled $19 million.
• Repurchased 174,615 shares at an average price of $4.80 for a total of nearly $838,000.

Randall K. Fields, Chairman and CEO of Park City Group commented, “We have systematically increased recurring revenue, expanded our base of Tier 2 hubs, and increased our cash balance, validating our confidence in long-term success. Our monthly recurring revenue increased more than 8% compared to last December, approximately double the pace of September, demonstrating the acceleration of our progress. In addition, we have signed agreements with several large Tier 2 customers which, absent any additional new sales, will result in double-digit recurring revenue growth by the end of our fiscal year in June. To better address the growing opportunity, we have added four net new salespeople to focus on recurring revenue initiatives underscoring our confidence in this initiative. Combined, these two initiatives will drive sustainable growth for Park City Group.

“Simultaneously, our Out-of-Stock (OOS) initiative continued to gain momentum, as evidenced by FMI - The Food Industry Association’s endorsement of ReposiTrak\'s OOS Management Solution to address the grocery industry\'s long-term and growing problem of out-of-stocks,” continued Mr. Fields. “In fact, we announced that 70 percent of vendors using our Out-Of-Stock solution have reduced OOS by an average of 46 percent across more than 12,175 stores. We also added new MarketPlace buyers during the quarter, and our confidence in the long-term viability of this initiative continues to grow.

“This progress drove solid net income and more than $2.7 million in operating cash flow fiscal year-to-date, despite $2.4 million less one-time revenue,” added Mr. Fields. “We also advanced our efforts to expand our geographical footprint by adding new customers in the United Kingdom, opening a new and lucrative market for us. We are seeing meaningful progress in each of our product offerings, creating sustained profitability and maintaining a strong balance sheet.”

For earnings history and earnings-related data on Park City Group (PCYG) click here.

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