Park City Group Reports Second Quarter Fiscal 2014 Results

Park City Group Reports Second Quarter Fiscal 2014 Results

   Fiscal 2Q14 Subscription Revenue Growth Rate Accelerates to a Record 20%

     ReposiTrak Venture's Pipeline Grows to Several Thousand Connections

SALT LAKE CITY, Feb. 13, 2014 (GLOBE NEWSWIRE) -- Park City Group
(Nasdaq: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 for its fiscal second quarter ended December
31, 2013. In addition, the Company announced significant progress with several
key strategic initiatives.

Strategic and financial highlights include:

  *Record subscription revenue – Subscription revenue for the second fiscal
    quarter increased 20 percent year over year to a record $2.3 million,
    primarily related to growth in the Company's supply chain services.
    Combined with other revenue, total revenue increased 14 percent to $3.0
    million. "Our core business has clearly accelerated and is well-positioned
    for continued double-digit growth over the next several years," said
    Randall K. Fields, Park City Group's Chairman and CEO.
  *Acceleration of ReposiTrak™ venture as food and drug safety standard –
    During the quarter, ReposiTrak, the Company's food and drug safety venture
    with Leavitt Partners, announced a joint agreement with the Food Marketing
    Institute (FMI). This leading supermarket industry trade association has
    agreed to exclusively endorse and encourage the use of ReposiTrak among
    its food retail and wholesale members. "With a membership base of more
    than 40,000 food retailers and 25,000 pharmacies, the exclusive
    relationship with FMI, clearly positions ReposiTrak as the standard for
    food and drug safety tracking and tracing," said Mr. Fields. "ReposiTrak's
    base of customer connections is accelerating and its rapidly-growing
    pipeline already exceeds several thousand connections among its initial
    ROFDA wholesale customers."
  *Continued progress with national retailers and suppliers – During the
    second quarter, the Company continued to make progress with the test
    programs of large national retailers and suppliers. "Tests combining
    several of our subscription services are clearly demonstrating significant
    economic value to retailers and their suppliers and are beginning to
    transition into expanded relationships," said Mr. Fields. "In addition,
    these programs are raising our profile in the supermarket and consumer
    packaged goods industry, which also bodes well for the continued growth of
    our core supply chain business."

A Subscription Revenue Growth chart is available here:

Total operating expenses during the quarter ended December 31, 2013 were $3.6
million, an increase of $909,000 from the same quarter a year ago, and a
decrease of $229,000 sequentially from the first quarter of fiscal 2014. The
majority of the increase in operating expenses reflects increased investment
in sales, marketing and account management personnel. "Given the sizable
opportunities that we have in hand, we have increased our staffing levels,"
said Mr. Fields.

Net loss applicable to common shareholders for the second fiscal quarter was
($705,000), or ($0.04) per share, as compared to ($353,000), or ($0.03) per
share during the prior year period. Non-GAAP income to common shareholders for
the second quarter was $0.02 per share, as compared to income per share of
$0.01 during the same period last year.

Total cash at December 31, 2013 was $3.9 million, as compared to $1.1 million
at December 31, 2012, and debt levels decreased by 17 percent to $2.0 million,
versus $2.4 million at the same time last year.

The Company will host a conference call at 4:15 P.M. Eastern today, February
13, 2014, to discuss the results. Investors and interested parties may
participate in the call by dialing (877) 675-3568 and referring to Conference
ID: 44831093. 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 (Nasdaq: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 service increases 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, and
provides retail trading partners with a distinct competitive advantage to
store/SKU level visibility that 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. More information is available at

About ReposiTrak™

ReposiTrak™ is a robust solution created through collaboration between Leavitt
Partners and Park City Group that helps food retailers and suppliers reduce
supply chain risk, protect their brands and remain in compliance with rapidly
evolving regulations in the Food Safety Modernization Act. Powered by Park
City Group's technology, ReposiTrak is an internet-based solution that enables
all participants in the farm-to-table supply chain to easily manage tracking
and traceability requirements as products move between trading partners. More
information is available at

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
                                                  December 31,  June 30,
Assets                                             2013         2013
Current Assets:                                                
Cash and cash equivalents                         $3,859,451  $3,616,585
Receivables, net of allowance of $115,000 and
$190,000 at December 31, 2013 and June 30, 2013,   2,904,634     2,383,366
Prepaid expense and other current assets          290,165       403,909
Total current assets                              7,054,250     6,403,860
Property and equipment, net                       846,543       671,959
Other assets:                                                 
Deposits and other assets                         14,866        14,866
Note receivable                                   2,097,452     1,622,863
Customer relationships                            2,129,177     2,340,335
Goodwill                                          4,805,933     4,805,933
Capitalized software costs, net                   --            73,082
Total other assets                                9,047,428     8,857,079
Total assets                                      $16,948,221 $15,932,898
Liabilities and Stockholders' Equity (Deficit)                
Current liabilities:                                          
Accounts payable                                  $698,625    $653,655
Accrued liabilities                               1,386,508     1,096,982
Deferred revenue                                  1,683,221     1,777,326
Line of credit                                    1,200,000     1,200,000
Note payable                                      332,723       551,421
Total current liabilities                         5,301,077     5,279,384
Long-term liabilities:                                        
Notes payable, less current portion               474,588       310,642
Other long-term liabilities                       99,709        101,500
Total liabilities                                 5,875,374     5,691,526
Commitments and contingencies                                 
Stockholders' equity:                                         
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 December 31, 2013
and June 30, 2013
Common stock, $0.01 par value, 50,000,000 shares
authorized; 16,742,115and 16,128,530 issued and   167,421       161,285
outstanding at December 31, 2013 and June 30,
2013, respectively
Additional paid-in capital                        46,046,721    43,314,986
Accumulated deficit                               (35,145,414)  (33,239,018)
Total stockholders' equity                        11,072,847    10,241,372
Total liabilities and stockholders' equity        $16,948,221 $15,932,898

Consolidated Condensed Statements of Operations (unaudited)
                       Three Months Ended        Six Months Ended
                      December 31,              December 31,
                       2013         2012         2013           2012
Subscription             $2,344,178 $1,955,562 $4,478,834   $3,910,157
Other Revenue            675,436      703,340      1,316,716      1,461,572
Total revenues           3,019,614    2,658,902    5,795,550      5,371,729
Operating expenses:                                            
Cost of services and     1,246,443    1,099,165    2,455,546      2,179,649
product support
Sales and marketing      1,129,832    763,301      2,369,475      1,343,657
General and              979,144      595,407      2,127,617      1,169,501
Depreciation and         240,727      230,455      468,302        460,523
Total operating expenses 3,596,146    2,688,328    7,420,940      5,153,330
Income (loss) from       (576,532)    (29,426)     (1,625,390)    218,399
Other income (expense):                                        
Interest income          26,447       (34,435)     27,940         (77,868)
Income (loss) before     (550,085)    (63,861)     (1,597,450)    140,531
income taxes
(Provision) benefit for  --           --           --             --
income taxes:
Net income (loss)       (550,085)    (63,861)     (1,597,450)    140,531
Dividends on preferred   (154,473)    (289,300)    (308,946)      (499,280)
Net income (loss)
applicable to common     $(704,588) $(353,161) $(1,906,396) $(358,749)
Weighted average shares, 16,693,000   12,303,000   16,529,000     12,259,000
basic and diluted
Basic and diluted loss   $(0.04)    $(0.03)    $(0.12)      $(0.03)
per share

Consolidated Condensed Statements of Cash Flows (Unaudited)
                                                  For the 6 months Ended
                                                 December 31,
                                                 2013           2012
Cash Flows from Operating Activities:                            
Net (loss) income                                  $(1,597,450) $140,531
Adjustments to reconcile net (loss) income to net                
cash provided by operating activities:
Depreciation and amortization                     468,302        460,523
Stock issued for charitable contribution          96,900         --
Stock compensation expense                        855,190        449,719
Bad debt expense                                  60,008         --
Decrease (increase) in:                                         
Receivables                                       (581,276)      (208,976)
Prepaids and other assets                         39,155         (81,607)
Increase (decrease) in:                                         
Accounts payable                                  44,970         218,252
Accrued liabilities                               50,375         34,458
Deferred revenue                                  (94,105)       (214,934)
Net cash provided by operating activities         (657,931)      797,966
Cash Flows From Investing Activities:                           
Cash from sale of property and equipment          6,505          --
Cash advanced on note receivable                  (400,000)      --
Purchase of property and equipment               (365,151)      (297,426)
Net cash used in investing activities             (758,646)      (297,426)
Cash Flows From Financing Activities:                           
Proceeds from issuance of stock                   1,493,818      --
Proceeds from exercise of options and warrants    436,296        --
Proceeds from employee stock plans                62,134         81,469
Proceeds from issuance of notes payable           278,290        95,548
Dividends paid                                    (278,051)      (247,156)
Payments on notes payable                         (333,042)      (425,173)
Net cash provided by (used in) financing          1,659,443      (495,312)
Net increase (decrease) in cash and cash           242,866        5,228
Cash and cash equivalents at beginning of period   3,616,585      1,106,176
Cash and cash equivalents at end of period         $3,859,451   $1,111,404
Supplemental Disclosure of Cash Flow Information                
Cash paid for income taxes                         $6,500       $ --
Cash paid for interest                             $50,771      $79,118
Supplemental Disclosure of Non-Cash Investing and                
Financing Activities
Common Stock to pay accrued liabilities            $633,725     $608,802
Dividends accrued on preferred stock               $308,946     $499,280
Dividends paid with preferred stock                $ --           $171,200

Reconciliation of GAAP and Non-GAAP Financial Measures
Adjusted EBITDA                                                  
(In $000's)                                                      
                                  Three Months Ended    Six Months Ended
                                  December 31,         December 31,
                                  2013       2012       2013       2012
Net Income (loss)                  ($550)     ($64)      ($1,597)   $141
Adjusted EBITDA Reconciliation                                   
Depreciation and amortization      241        230        469        460
Bad debt expense                   60         --         60         --
Interest, net                      (26)       34         (28)       77
Stock based compensation           855        290        1,231      525
Adjusted EBITDA                   $580       $490       $135       $1,203
Non-GAAP Net Income (Loss) to Common Shareholders and              
(In $000's, except per share)                                    
                                  Three Months Ended    Six Months Ended
                                  December 31,          December 31,
                                  2013       2012       2013       2012
Net Income (loss)                  ($550)     ($64)      ($1,597)   $141
Non-GAAP Net Income (Loss)                                       
Reconciliation Adjustments:
Stock based compensation           855        290        1,231      525
Acquisition related amortization   126        126        252        252
Non-GAAP Net Income               $431       $352       ($114)     $918
Preferred dividends                (154)      (289)      (308)      (499)
Non-GAAP Net Income to Common      $277       $63        ($422)     $419
Weighted average shares, diluted   16,693,000 12,303,000 16,529,000 12,259,000
Non-GAAP EPS, diluted             $0.02      $0.01      ($0.03)    $0.03

Non-GAAP Free Cash Flow                                              
(In $000's)                                                          
                                          Three Months Ended Six Months Ended
                                          December 31,      December 31,
                                          2013       2012    2013      2012
Net Cash Provided by Operating Activities  ($48)      $608    ($658)    $879
Non-GAAP Free Cash Flow Reconciliation                               
Purchase of property and equipment         (170)      (17)    (237)     (66)
Non-GAAP Free Cash Flow                    ($218)     $591    ($895)    $813

Free cash flow includes net cash provided (used) by operating activities less
replacement purchases of property and equipment.Capital expenditures related
to long-term investments and new technology developments are omitted.

Non-GAAP Net Debt           
(In $000's)                 
                 As ofDecember 31,
                 2013       2012
Total Debt       $2,008     $2,411
Less Total Cash   3,859      1,111
Non-GAAP Net Debt ($1,851)   $1,300

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

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