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 opportunities.
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(TM) 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.
Cash
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, www.parkcitygroup.com.
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(TM), 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(TM), 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.
