EX-99.1 2 ex991form8k111105.txt PRESS RELEASE DATED NOVEMBER 11, 2005 PARK CITY GROUP ANNOUNCES FISCAL FIRST QUARTER 2005 RESULTS ACHIEVES RECORD REVENUES AND NET INCOME PARK CITY, UT - November 11, 2005 - Park City Group, Inc. (OTCBB:PKCY), a leading provider of software and consulting services for the retail industry, today announced financial results for its fiscal first quarter. The company reported revenues for the quarter were $3,698,865 compared to $989,675 in last year's period, and net income of $2,154,816, or $0.01 per share compared to a loss of $444,621, or ($0.00) in last year's same period. Software license revenues were $2,630,453 and $162,163 for the quarters ended September 30, 2005 and 2004. This increase is primarily a result of our previously announced licensing agreement with Cannon Equipment Co. Maintenance and support revenues were $608,446 and $623,494 for the quarters ended September 30, 2005 and 2004, respectively. This decrease is primarily attributable to two existing Action Manager customers reducing their maintenance fees due to store closures. ASP revenues were $48,900 and $11,600 for the quarters ending September 30, 2005 and 2004, respectively. This increase was the result of improved results in the Perishable Manufacturing Channel, which has achieved four new contracts in the last six months. Consulting and other revenue was $411,066 and $192,420 for the quarters ended September 30, 2005 and 2004, respectively. This increase is spread evenly between increased Action Manager and FMM implementation services and from the Cannon agreement. Gross margin was 88% and 70%, for the quarters ended September 30, 2005 and 2004, respectively. This increase was primarily attributable to the ratio of license sales to the total revenue amount. Operating costs were relatively flat for the quarter compared to last year's same period, and operating profit was $2,451,951, or 66% of net revenues compared to a loss of $170,063 in last year's same period. President and CEO, Randy Fields commented, "Our financial performance in this past quarter was a significant milestone for our company, as we closed important licensing deals, paid down a significant portion of our debt, and reported our largest net profit in the company's history. Though we're obviously pleased with that, we still have plenty of work to do in terms of smoothing out our revenue stream and we would expect a fair amount of "lumpiness" in our quarterly financials as we move forward with our plans to grow the business. We should not expect that this quarter is indicative of the remaining quarters for the year, but we do expect that the year will be one that shows substantial improvements in top- and bottom-line results compared to last year. "The management team we've assembled has identified a definitive need in the retail marketplace, and our strategy goes beyond developing and selling solutions that fit this need. Our longer-term goal is to be a provider of innovative solutions that enable managers at every retail level-including store, department, and region-to more efficiently increase their control and profitability. Our customers consistently report to us that they're enjoying significant increases in profitability and operating efficiencies as a result of deploying our solutions, which include our software implementations and ongoing maintenance and consulting services that our experienced team of retailers provides. "Alliances with retail suppliers, both on the Fresh Market Manager and Action Manager fronts, continue to provide us with opportunities to expand our distribution channel through product trials, in traditional supermarket-grocery and gas/convenience stores and with broader retail market customers. Our previously announced agreement in the quarter with Share & Compare, a supplier of information solutions to the convenience store market, highlights the appeal of our solutions beyond supermarkets. The team is focused on expanding our distribution network, and ultimately our presence with retailers, both large and small, as we pursue additional suppliers and other upstream participants to partner with," concluded Fields."
September 30, 2005 September 30, 2004 ------------------ ------------------ Revenues: Software licenses $ 2,630,453 $ 162,163 Maintenance and support 608,446 623,492 ASP 48,900 11,600 Consulting and other 411,066 192,420 ------------ ------------ Total revenues 3,698,865 989,675 Cost of revenues 404,651 300,154 ------------ ------------ Gross margin 3,294,214 689,521 Operating expenses: Research and development 235,909 256,081 Sales and marketing 283,200 293,394 General and administrative 313,155 310,109 ------------ ------------ Total operating expenses 832,264 859,584 ------------ ------------ Income (loss) from operations 2,461,950 (170,063) ------------ ------------ Interest expense (297,135) (274,558) ------------ ------------ Income (loss) before income taxes 2,164,815 (444,621) ------------ ------------ Income tax (expense) benefit Net Income (loss) $ 2,164,815 $ (444,621) ------------ ------------ Weighted average shares, basic 282,850,000 269,105,000 ============ ============ Weighted average shares, diluted 283,989,000 269,105,000 ============ ============ Basic earnings (loss) per share $ 0.01 $ (0.00) ============ ============ Diluted Earnings (loss) per share $ 0.01 $ (0.00) ============ ============
Consolidated Condensed Balance Sheet (Unaudited) September 30, 2005 June 30, 2005 ------------------ ------------- Assets Current assets: Cash $ 159,442 $ 209,670 Receivables, net of allowance for doubtful accounts of $53,000 553,860 356,336 Prepaid expenses and other current assets 124,196 37,060 ------------- ------------- Total current assets 837,498 603,069 Property and equipment, net of accumulated depreciation and amortization 100,428 109,512 ------------- ------------- Other assets: Deposits and other assets 25,000 25,000 Capitalized software costs, net of accumulated amortization of $797,636 265,879 332,349 ------------- ------------- Total other assets 290,879 357,349 ------------- ------------- Total assets $ 1,228,805 $ 1,069,930 ============= ============= Liabilities and Stockholders' Deficit Current liabilities: Accounts payable $ 173,914 $ 628,398 Accrued liabilities 1,139,796 1,164,964 Deferred revenue 1,509,513 883,425 Deposits for un-issued stock 36,667 Current Portion of Long term capital lease obligations 20,493 Current portion of long-term debt and capital lease obligations, net of discount 338,813 23,159 Current portion of notes payable 336,187 332,625 ------------- ------------- Related party lines of credit 619,743 ------------- ------------- Total current liabilities 3,555,383 5,597,338 ------------- ------------- Long-term liabilities Long-term related party debt, net of discount 3,186,137 3,173,414 Capital lease obligations, less current portion 3,919 2,127 ------------- ------------- Total long-term liabilities 3,190,056 3,175,541 Total liabilities 6,745,439 8,772,879 ------------- ------------- Commitments and contingencies Stockholders' deficit: Preferred stock, $0.01 par value, 30,000,000 shares authorized, none issued - Common stock, $0.01 par value, 300,000,000 shares authorized; 284,978,326 issued and outstanding 2,828,463 2,825,561 Additional paid-in capital 10,056,291 10,037,693 Accumulated deficit (18,401,388) (20,556,203) ------------- ------------- Total Stockholders' deficit (5,516,634) (7,702,949) ------------- ------------- $ 1,228,805 $ 1,069,930 ============= =============
About Park City Group --------------------- Park City Group, Inc. develops and markets patented computer software that helps its retail customers to increase their sales while reducing their inventory and labor costs: the two largest, controllable expenses in the retail industry. The technology has its genesis in the operations of Mrs. Fields Cookies, co-founded by Randy Fields, CEO of Park City Group, Inc. Industry leading customers such as The Home Depot, Victoria's Secret, The Limited, Anheuser Busch Entertainment and Tesco Lotus benefit from our software. Feel free to contact us (Media Contact Randy Fields) at 800-772-4556 or info@parkcitygroup.com. For more about Park City Group (OTCBB:PKCY - News; Berlin: WKN# 925919), visit our website at www.parkcitygroup.com. Forward-Looking Statements: --------------------------- This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's anticipated financial results for its first quarter and fiscal year ending July 2, 2006. These forward-looking statements are based on the Company's expectations and are subject to risks and uncertainties that cannot be predicted or quantified and are beyond the Company's control. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying these forward-looking statements. These risks and uncertainties include economic and market conditions, audit-related costs and findings and legal proceedings and their effects on the Company's expected financial results. Other factors that could cause actual results to differ materially from expectations are described in the Company's reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. Contacts: At Park City Group Randy Fields 800-772-4556 Info@parkcitygroup.com At Cameron Associates Peter Seltzberg, Vice President (212) 245-8800 Ext. 205 peter@cameronassoc.com