Park City Group Reports Record Third Quarter Fiscal 2013 Results

Park City Group Reports Record Third Quarter Fiscal 2013 Results

         Posts Record Quarterly and Year-To-Date Revenue and Earnings

     Third Quarter Revenue Increased 21%, Adjusted EBITDA Increased 195%

SALT LAKE CITY, Utah, May 9, 2013 (GLOBE NEWSWIRE) -- Park City Group (NYSE
MKT:PCYG), a cloud-based software company that uses big data management to
help retailers and their suppliers sell more, stock less and see everything,
today announced record results across numerous financial metrics for its
fiscal third quarter ended March 31, 2013. In addition, the Company made
significant progress with several key strategic initiatives. 

Strategic and Financial highlights included:

  *Record quarterly and year-to-date revenue – Total revenue growth
    accelerated to 21% for the third quarter, and 10% for the nine month
    period."We continued to deliver record results during the quarter and our
    growth rate is accelerating.Subscription revenue growth is beginning to
    see the effect of some of our larger customers, as they move through the
    phases of implementation.The scale of these retailers, all of which are
    among the largest in the world, is an order of magnitude greater than most
    of our existing customers," said Randall K. Fields, Park City Group's
    Chairman and CEO.
  *Record quarterly and year-to-date profitability – Net income was a record
    for both the third quarter and the nine month periods ended March 31,
    2013.During the third quarter, EBITDA nearly tripled to $799,000 from
    $271,000 during the same period last year."Profitability accelerated at a
    faster pace than revenue growth, as each dollar of incremental sales
    produced substantially greater than our targeted 75%+ incremental profit
    contribution," said Mr. Fields. 
  *Progress with large retailers. – The implementation of Park City Group's
    first drug store chain is progressing and contributed to revenue growth
    during the third quarter.The Company is currently in discussions to
    provide services to several other large retail chains.
  *Expanding opportunity with large retailer - The previously announced
    program to provide services to one of the largest retailers in the world
    is progressing.Park City Group and the retailer are exploring additional
  *Established new industry solutions team – The Company established a
    "Customer First" Industry Solutions team to work collaboratively with
    retailers and their suppliers to drive measureable improvements in sales
    and inventory management objectives.
  *Redeemed Series A Preferred Stock – The Company recently completed the
    redemption of its Series A preferred stock, reducing preferred dividend
    payments by approximately $650,000 annually, or $0.04 per share.
  *Simplified and strengthened capital structure – Total cash at the end of
    March 31, 2013 increased 597% to $4.4 million, as compared to $631,000 at
    March 31, 2012, and debt levels decreased by 20% to $2.3 million, versus
    $2.8 million at the same time last year.As of March 31, the current ratio
    improved by 375% to 1.5 and stockholders' equity increased to $10.3
    million versus $5.3 million at March 31, 2012.
  *ReposiTrak™ gaining significant industry momentum – The Company's food and
    drug safety collaboration with Leavitt Partners is receiving increased
    attention from large food wholesalers, retailers, and manufacturers."Our
    food and drug safety initiative, ReposiTrak, has enormous economic
    consequences for Park City Group. ReposiTrak continues to gain traction
    and is well positioned to become the industry standard platform for
    tracking and tracing food and drugs throughout the supply chain.In
    addition to the direct benefits from subscription revenue and ultimate
    equity ownership, we expect ReposiTrak to provide access to a global base
    of food and drug retailers and suppliers. This greatly expands the size of
    our "hub and spoke" network and provides the opportunity to expose new
    connections to our other services," said Mr. Fields.

During the third fiscal quarter, subscription revenue increased 19% year over
year to a record $2.0 million, reflecting growth in sales to new and existing
customers. Combined with growth in other revenue, total revenue increased 21%
to a record $3.0 million.

Total operating expenses during the quarter ended March 31, 2013 were $2.8
million, a decrease of 67,000 from the same quarter a year ago, and an
increase of $117,000 sequentially from the second fiscal quarter.Net income
for the third fiscal quarter ended March 31, 2013 was $209,000, or $0.02 per
share, as compared to a net loss of ($353,000), or ($0.03) per share, during
the prior year period.Net loss applicable to common shareholders for the
third fiscal quarter was ($79,000), or ($0.01) per share, as compared to
($561,000), or ($0.05) per share during the prior year period.Non-GAAP
earnings per common shareholder for the third quarter was $0.02, versus a loss
per share of ($0.02) during the same period last year.


Total cash at the end of March 31, 2013 was $4.4 million as compared to
$631,000 at March 31, 2012 and debt levels decreased by 20% to $2.3 million,
versus $2.8 million at the same time last year."We took actions to simplify
and strengthen our balance sheet this past quarter, and as a result, we moved
from a net debt position to a net cash position of $2.2 million.By redeeming
our Series A preferred, we also reduced our preferred dividend payments by
$650,000, or $0.04 per share, annually. That dividend has been a primary
determinant of our historical GAAP loss, and will result in substantially
improved GAAP performance," said Mr. Fields.

"We are gaining critical mass in the grocery store vertical by putting
"customers first" and helping them to achieve our brand promise to sell more,
stock less and see everything.This value proposition is clearly resonating
with existing, as well as a rapidly growing list of new, large retailer and
supplier customers.We are also leveraging our success with grocers, to enter
into an additional retail vertical. As a result of this progress, our top and
bottom lines are achieving record levels and our growth rate is
accelerating.With the strong value proposition of our solutions combined with
the recurring nature of subscription revenue, our business should deliver
predictable and sustainable growth in revenue and earnings for the next
several years," Mr. Fields concluded.

The Company will host a conference call at 4:15 P.M. Eastern today, May 9,
2013, to discuss the results. Investors and interested parties may participate
in the call by dialing (877) 675-3568 and referring to Conference ID:
59525804. The conference call is also being webcast and is available via the
investor relations section of the Company's website,

About Park City Group

Park City Group (NYSE MKT:PCYG) is a Software-as-a-Service ("SaaS") provider
that brings unique visibility to the consumer goods supply chain, delivering
actionable information that ensures product is on the shelf when the consumer
expects it as well as providing food safety tracking information. The
Company's services increase customers' sales and profitability while enabling
lower inventory levels and ensuring regulatory compliance for both retailers
and their suppliers.

Through a process known as Consumer Driven Sales Optimization™, Park City
Group helps its customers turn information into cash and increased sales,
using the largest scan based platform in the world. Scan based trading
provides retail trading partners with a distinct competitive advantage through
scan sales that provides store level visibility and sets the supply chain in
motion.And since it is scan based, it can be used in a Direct Store Delivery
(DSD) or warehouse setting.

In 2012 Park City Group worked with Leavitt Partners, an internationally-known
health care and food safety consulting firm to create ReposiTrak, Inc., which
provides food retailers and suppliers with a robust solution that helps them
protect their brands and remain in compliance with rapidly evolving
regulations in the recently passed Food Safety Modernization Act.Powered by
Park City Group, this solution, also called ReposiTrak™, is an internet-based
technology, which enables 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.

Consolidated Condensed Balance Sheets
                                                 March 31,     June 30,
                                                 2013          2012
Assets                                             (unaudited)   
Current assets:                                                 
Cash                                               $4,395,904  $1,106,176
Receivables, net of allowance of $165,000 and
$220,000 at March 31, 2013 andJune 30, 2012,      3,132,677     2,290,859
Prepaid expenses and other current assets          325,953       171,526
Total current assets                               7,854,534     3,568,561
Property and equipment, net                        647,751       559,140
Other assets:                                                  
Deposits and other assets                           32,079      20,697
Customer relationships                             2,445,914     2,762,651
Goodwill                                            4,805,933   4,805,933
Capitalized software costs, net                    109,624       219,248
Total other assets                                 7,393,550     7,808,529
Total assets                                       $15,895,835 $11,936,230
Liabilities and Stockholders' Equity                           
Current liabilities:                                           
Accounts payable                                   $625,913    $550,846
Accrued liabilities                                 1,037,747   1,242,328
Deferred revenue                                   1,570,724     2,081,459
Capital lease obligations                           --          41,201
Lines of credit                                    1,200,000     1,200,000
Notes payable                                      665,162       798,704
Total current liabilities                           5,099,546   5,914,538
Long-term liabilities:                                         
Notes payable, less current portion                420,009       711,571
Other long-term liabilities                        101,840       --
Total liabilities                                  5,621,395     6,626,109
Commitments and contingencies                      --            --
Stockholders' equity:                                          
Series A Convertible Preferred Stock, $0.01 par
value, 30,000,000 shares authorized;zero and      --            6,857
685,671 shares issued and outstanding at March 31,
2013 and June 30, 2012, respectively
Series B Convertible Preferred Stock, $0.01 par
value, 30,000,000 shares authorized; 411,927       4,119         4,119
shares issued and outstanding at March 31, 2013
and June 30, 2012, respectively
Common Stock, $0.01 par value, 50,000,000 shares
authorized; 13,778,085 and 12,087,431 shares       137,781       120,874
issued and outstanding at March 31, 2013 and June
30, 2012, respectively
Additional paid-in capital                         36,949,963    37,763,196
Series A Convertible Preferred redemption payable  6,313,677     --
Subscription receivable                            (108,000)     --
Accumulated deficit                                (33,023,100)  (32,584,925)
Total stockholders' equity                         10,274,440    5,310,121
Total liabilities and stockholders' equity         $15,895,835 $11,936,230

Consolidated Condensed Statements of Operations (unaudited)
                       Three Months Ended        Nine Months Ended
                      March 31,                 March 31,
                       2013         2012         2013         2012
Subscription             $2,007,821 $1,682,751 $5,917,978 $5,105,882
Other Revenue            1,039,167    826,896      2,500,739    2,550,167
Total revenues           3,046,988    2,509,647    8,418,717    7,656,049
Operating expenses:                                         
Cost of services and     1,141,643    1,198,421    3,321,290    3,453,795
product support
Sales and marketing      747,120      712,256      2,090,777    1,942,801
General and              692,548      734,523      1,862,049    2,284,915
Depreciation and         222,602      226,198      683,125      670,998
Total operating expenses 2,803,913    2,871,398    7,957,241    8,352,509
Income (loss) from       243,075      (361,751)    461,476      (696,460)
Other income (expense):                                     
Interest expense         (33,781)     (46,881)     (111,649)    (167,765)
Other gains/(losses)     --           55,995       --           55,995
Income (loss) before     209,294      (352,637)    349,827      (808,230)
income taxes
(Provision) benefit for  --           --           --           --
income taxes
Net income (loss)       209,294      (352,637)    349,827      (808,230)
Dividends on preferred   (288,721)    (208,415)    (788,002)    (625,635)
Net income (loss)
applicable to common     $(79,427)  $(561,052) $(438,175) $(1,433,865)
Weighted average shares, 12,750,000   11,838,000   12,420,000   11,733,000
basic and diluted
Basic and diluted loss   $(0.01)    $(0.05)    $(0.04)    $(0.12)
per share

Consolidated Condensed Statements of Cash Flows (Unaudited)
For the Nine Months Ended March 31,
                                                   2013         2012
Cash Flows From Operating Activities:                            
Net income (loss)                                    $349,827   $(808,230)
Adjustments to reconcile net income (loss) to net    
cash provided byoperating activities:
Depreciation and amortization                        683,125      670,997
Bad debt expense                                     81,260       173,194
Stock compensation expense                           777,200      811,171
Other gains                                          --           (55,995)
(Increase) decreasein:                                         
Receivables                                          (923,078)    460,350
Prepaids and other assets                            (165,809)    53,435
(Decrease) increase in:                                         
Accounts payable                                     75,067       (227,811)
Accrued liabilities                                  50,364       31,559
Deferred revenue                                     (510,735)    (465,163)
Net cash provided by operating activities            417,221      643,507
Cash Flows From Investing Activities:                           
Purchase of property and equipment                   (345,375)    (145,058)
Net cash used ininvesting activities                (345,375)    (145,058)
Cash Flows From Financing Activities:                           
Proceeds from issuance of stock                      4,054,921    --
Proceeds from exercise of options and warrants       --           14,748
Proceeds from issuance of notes                      176,797      255,334
Dividends paid                                       (370,734)    (370,734)
Payments on notes payable and capital leases         (643,102)    (2,384,894)
Net cash used in financing activities               3,217,882    (2,485,546)
Net increase (decrease) in cash                      3,289,728    (1,987,097)
Cash at beginning of period                          1,106,176    2,618,229
Cash at end of period                                $4,395,904 $631,132
Supplemental Disclosure of Cash Flow Information:               
Cash paid for income taxes                           $ --       $ --
Cash paid for interest                               $112,806   $238,264
Supplemental Disclosure of Non-Cash Investing and               
Financing Activities:
Common stock to pay accrued liabilities              $846,513   $645,938
Dividends accrued on preferred stock                 $788,002   $625,635
Dividends paid with preferred stock                  $501,060   $251,960

Reconciliation of GAAP and Non-GAAP Financial Measures
Adjusted EBITDA                                                
(In $000's)                                                    
Unaudited results of                                           
                       Three Months Ended          Nine Months Ended
                        March 31,                   March 31,
                       2013          2012          2013          2012
Net Income (loss)       $209          ($353)       $350          ($808)
Adjusted EBITDA
Depreciation and        223           226           683           671
Bad debt expense        81            103           81            173
Interest, net           34            47            112           168
Stock based             252           248           777           811
One-time expenses       --            --            --            60
(stock and cash)
Adjusted EBITDA        $799          $271          $2,003        $1,075
Non-GAAP Net Income (Loss) to Common Shareholders and EPS
(In $000's, except per                                         
Unaudited results of                                           
                       Three Months Ended          Nine Months Ended
                        March 31,                   March 31,
                       2013          2012          2013          2012
Net Income (loss)       $209          ($353)       $350          ($808)
Non-GAAP Net Income
(Loss) Reconciliation                                          
Stock based             252           248           777           811
One-time expenses       --            --            --            60
(stock and cash)
Acquisition related     126           126           378           378
Non-GAAP Net Income    $587          $21           $1,505        $441
Preferred dividends     (289)         (208)         (788)         (626)
Non-GAAP Net Income to  $298          ($187)       $717          ($185)
Common Shareholders
Weighted average        12,750,000    11,838,000    12,420,000    11,733,000
shares, diluted
Non-GAAP EPS, diluted  $0.02         ($0.02)      $0.06         ($0.02)
Non-GAAP Free Cash                                             
(In $000's)                                                    
Unaudited results of                                           
                       Three Months Ended         Nine Months Ended
                        March 31,                   March 31,
                       2013          2012          2013          2012
Net Cash Provided by    ($462)       $252          $417          $644
Operating Activities
Non-GAAP Free Cash Flow
Purchase of property    (48)          (91)          (113)         (145)
and equipment
Non-GAAP Free Cash Flow ($510)       $161          $304          $499
Free cash flow includes net cash provided by operating activities less
replacement purchases and equipment.Capital expenditures related to long-term
investments and new technology developments are omitted.During 2Q13 the
Company invested $232,000 in leasehold improvements for its new corporate
headquarters located in Salt Lake City, UT, this amount is excluded from the
Free Cash Flow calculation.
Non-GAAP Net Debt/                                             
(In $000's)                                                    
Unaudited results of                                           
                       As ofMarch 31                           
                       2013          2012                       
Total Debt             $2,285        $2,849                     
Less Total Cash         4,396         631                        
Non-GAAP Net Debt/      $(2,111)    $2,218                     

CONTACT: Investor Relations Contact:
         Dave Mossberg
         Three Part Advisors, LLC

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