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ReposiTrak Increases Net Income and Earnings Per Share 17% on 8% Revenue Growth in Fiscal 2024 Second Quarter

Company Accelerates Onboarding Hundreds of Traceability Customers

ReposiTrak (NYSE: TRAK), the world's largest food traceability and regulatory compliance network, built upon its proven inventory management and out-of-stock reduction SaaS platform, today announced financial results for the second fiscal quarter (“FQ2 2024”) ended December 31, 2023.

Second Quarter Financial Highlights:

  • Second quarter total revenue increased 8% to $5.13 million from $4.75 million.
  • Recurring revenue increased 8%, net of the planned elimination of high-touch, low-opportunity revenue, to $5.13 million from $4.74 million, representing approximately 99% of total revenue.
  • Quarterly operating expense increased 9% to $3.88 million from $3.57 million, representing investments in sales, marketing and onboarding costs to further increase awareness about the FDA mandate and accelerating onboarding of customers to the ReposiTrak Traceability Network (“RTN”) solution.
  • Quarterly operating income increased 5% to $1.24 million from $1.18 million last year in spite of higher costs to gear up for traceability.
  • Quarterly GAAP net income increased 15% to $1.45 million from $1.27 million last year.
  • Quarterly net income to common shareholders was $1.30 million, up 17% from $1.12 million last year.
  • Quarterly EPS of $0.07, up 17% from $0.06 last year.
  • During the quarter, the Company repurchased 22,012 common shares at an average price of $8.79 per share for a total of $193,492.
  • During the quarter, the Company repurchased 70,093 preferred shares for the stated redemption price of $10.70 per share for a total of $749,995.
  • During the quarter, the Board of Directors approved an increase in the Company’s quarterly cash dividend, to 6.6 cents per share annually (1.65 cents per share quarterly), commencing with the December 2023 dividend.

Randall K. Fields, Chairman and CEO of ReposiTrak, commented, “ReposiTrak some years ago identified traceability as an important add-on and direction for our business. We positioned ourselves to be the market leader, and that is coming true. We are delivering traceability solutions, and the adoption of the repository traceability network has exceeded our early expectations. Based on recent market developments, we are convinced that the total addressable market is expanding significantly beyond our initial estimates. Traceability is already contributing to our top and bottom lines, and we expect that to increase significantly over the next two to three years.”

Mr. Fields continued, “In our view, even before the FDA mandate deadline of 2026, we expect the RTN will have significantly expanded to include a substantial portion of the food industry, creating another robust moat around our business for years to come. We believe a number of large retailers and wholesalers are in the process of accelerating the FDA deadline and scope. We are well prepared to take advantage of these changes. We are meeting this opportunity from a position of strength, with solid growth, consistent profitability and more than $23 million in cash on our balance sheet.”

Second Fiscal Quarter Financial Results (three months ended December 31, 2023, vs. three months ended December 31, 2022):

Total revenue was up 8% to $5.13 million as compared to $4.75 million in the prior-year second quarter. Total operating expense was $3.88 million, up 9% compared to $3.57 million last year. General and administrative expense increased by 8%. GAAP net income was $1.45 million compared to $1.27 million. Net income to common shareholders was $1.30 million, or $0.07 per diluted share, compared to $1.12 million, or $0.06 per diluted share.

Year-to-Date Financial Results (six months ended December 31, 2023, vs. six months ended December 31, 2022):

Total revenue was up 8% to $10.19 million as compared to $9.47 million in the prior-year period. Total operating expense was $7.75 million, up 10% compared to $7.07 million last year. GAAP net income was $2.83 million compared to $2.55 million. Net income to common shareholders was $2.54 million, or $0.14 per basic share and diluted share, compared to $2.26 million, or $0.12 per basic and diluted share.

Return of Capital:

In the second quarter of fiscal 2024, the Company repurchased 22,012 common shares at an average price of $8.79 per share for a total of $193,492. Since inception, the Company has repurchased approximately 2.12 million shares of common stock at an average price of $6.13 per share, for a total of approximately $13 million. The Company has approximately $8 million remaining on the $21 million total buyback authorization since inception.

In the second quarter of fiscal 2024, the Company repurchased 70,093 preferred shares at the stated redemption price of $10.70 per share for a total of $749,995. The amount remaining under our repurchase program is $8.21 million. As previously announced, the Company anticipates redeeming all of its preferred stock issued and outstanding over the next three years from August 29, 2023.

In September 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.015 per share ($0.06 per year). In November 2023, the Board of Directors approved a 10% increase in the quarterly cash dividend, to 6.6 cents per share annually, or 1.65 cents per share quarterly, commencing with the December 2023 dividend.

Balance Sheet:

The Company had $23.25 million in cash and cash equivalents at December 31, 2023, compared to $23.99 million at June 30, 2023. The reduction in cash reflects the payment of common stock dividends, and buyback of common shares and redemption of preferred stock during the period. The Company had nothing drawn on its working line of credit as of December 31, 2023 or June 30, 2023.

Conference Call:

The Company will host a conference call at 4:15 p.m. Eastern today to discuss the Company’s results. The conference call will also be webcast and will be available via the investor relations section of the Company’s website, www.parkcitygroup.com.

Participant Dial-In Numbers:

Date: Wednesday, February 14, 2024

Time: 4:15 p.m. ET (1:15 p.m. PT)

Toll-Free: 1-877-407-9716

Toll/International 1-201-493-6779

Conference ID: 13744233

Replay Dial-In Numbers:

Toll Free: 1-844-512-2921

Toll/International: 1-412-317-6671

Replay Start: Wednesday, February 14, 2024, 7:15 p.m. ET

Replay Expiry: Thursday, March 14, 2024 at 11:59 p.m. ET

Replay PIN Number: 13744233

About ReposiTrak

ReposiTrak (NYSE:TRAK), formerly Park City Group, provides retailers, suppliers and wholesalers with a robust solution suite to help reduce risk and remain in compliance with regulatory requirements, enhance operational controls and increase sales with unrivaled brand protection. Consisting of three product families – food traceability, compliance and risk management and supply chain solutions – ReposiTrak’s integrated, cloud-based applications are supported by an unparalleled team of experts. For more information, visit https://repositrak.com.

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 d/b/a ReposiTrak, or ReposiTrak (“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 Group 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.

REPOSITRAK, INC.

Consolidated Condensed Balance Sheets (Unaudited)

 

 

 

 

 

 

 

 

 

December 31,

2023

 

 

June 30,

2023

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

$

23,253,071

 

$

23,990,879

 

Receivables, net of allowance for doubtful accounts of $219,163 and $170,103 at December 31, 2023 and June 30, 2023, respectively

 

3,799,551

 

 

2,523,019

 

Contract asset – unbilled current portion

 

150,180

 

 

186,959

 

Prepaid expense and other current assets

 

366,766

 

 

573,763

 

Total Current Assets

 

27,569,568

 

 

27,274,620

 

 

 

 

 

 

 

 

Property and equipment, net

 

716,979

 

 

986,300

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

Deposits and other assets

 

22,414

 

 

22,414

 

Prepaid expense – less current portion

 

8,996

 

 

36,282

 

Contract asset – unbilled long-term portion

 

108,052

 

 

108,052

 

Operating lease – right-of-use asset

 

280,958

 

 

310,796

 

Customer relationships

 

197,100

 

 

262,800

 

Goodwill

 

20,883,886

 

 

20,883,886

 

Capitalized software costs, net

 

541,450

 

 

698,281

 

Total Other Assets

 

22,042,856

 

 

22,322,511

 

 

 

 

 

 

 

 

Total Assets

$

50,329,403

 

$

50,583,431

 

 

 

 

 

 

 

 

Liabilities and Shareholders Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

$

332,306

 

$

431,387

 

Accrued liabilities

 

1,634,620

 

 

1,620,000

 

Contract liability – deferred revenue

 

2,026,565

 

 

1,903,001

 

Operating lease liability – current

 

61,372

 

 

58,771

 

Notes payable and financing leases – current

 

216,542

 

 

219,262

 

Total current liabilities

 

4,271,405

 

 

4,232,421

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

Operating lease liability – less current portion

 

231,830

 

 

263,047

 

Notes payable and financing leases – less current portion

 

83,677

 

 

206,032

 

Total liabilities

 

4,586,912

 

 

4,701,500

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders equity:

 

 

 

 

 

 

Preferred Stock; $0.01 par value, 30,000,000 shares authorized;

 

 

 

 

 

 

Series B Preferred, 700,000 shares authorized; 625,375 shares issued and outstanding at December 31, 2023 and June 30, 2023;

 

6,254

 

 

6,254

 

Series B-1 Preferred, 550,000 shares authorized; 142,309 and 212,402 shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively

 

1,423

 

 

2,124

 

Common Stock, $0.01 par value, 50,000,000 shares authorized; 18,158,730 and 18,309,051 issued and outstanding at December 31, 2023 and June 30, 2023, respectively

 

181,590

 

 

183,093

 

Additional paid-in capital

 

65,637,265

 

 

67,732,887

 

Accumulated other comprehensive loss

 

(5,904

)

 

-

 

Accumulated deficit

 

(20,078,137

)

 

(22,042,427

)

Total stockholders equity

 

45,742,491

 

 

45,881,931

 

Total liabilities and stockholders equity

$

50,329,403

 

$

50,583,431

 

REPOSITRAK, INC.

Consolidated Condensed Statements of Operations and Comprehensive Income (Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Six Months Ended

December 31,

 

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

5,125,751

 

$

4,750,513

 

$

10,185,863

 

$

9,470,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue and product support

 

973,287

 

 

866,642

 

 

1,739,621

 

 

1,699,346

 

Sales and marketing

 

1,264,377

 

 

1,226,812

 

 

2,769,878

 

 

2,427,071

 

General and administrative

 

1,347,278

 

 

1,252,357

 

 

2,626,601

 

 

2,475,819

 

Depreciation and amortization

 

299,958

 

 

229,160

 

 

608,903

 

 

465,166

 

Total operating expense

 

3,884,900

 

 

3,574,971

 

 

7,745,003

 

 

7,067,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

1,240,851

 

 

1,175,542

 

 

2,440,860

 

 

2,403,588

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

316,445

 

 

199,266

 

 

574,606

 

 

278,358

 

Interest expense

 

(7,576

)

 

(18,058

)

 

(13,920

)

 

(42,710

)

Unrealized gain (loss) on short term investments

 

15,456

 

 

(31,406

)

 

42,642

 

 

(38,821

)

Other gain

 

-

 

 

-

 

 

-

 

 

70,047

 

Income before income taxes

 

1,565,176

 

 

1,325,344

 

 

3,044,188

 

 

2,670,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Provision) for income taxes:

 

(114,027

)

 

(60,000

)

 

(214,491

)

 

(120,006

)

Net income

 

1,451,149

 

 

1,265,344

 

 

2,829,697

 

 

2,550,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends on preferred stock

 

(146,611

)

 

(146,611

)

 

(293,222

)

 

(293,222

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income applicable to common shareholders

$

1,304,538

 

$

1,118,733

 

$

2,536,475

 

$

2,257,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares, basic

 

18,162,000

 

 

18,402,000

 

 

18,193,000

 

 

18,419,000

 

Weighted average shares, diluted

 

18,805,000

 

 

18,630,000

 

 

18,822,000

 

 

18,678,000

 

Basic income per share

$

0.07

 

$

0.06

 

$

0.14

 

$

0.12

 

Diluted income per share

$

0.07

 

$

0.06

 

$

0.14

 

$

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

1,451,149

 

$

1,265,344

 

$

2,829,697

 

$

2,550,456

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale securities

 

(5,904

)

 

-

 

 

(5,904

)

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

$

1,445,245

 

$

1,265,344

 

$

2,823,793

 

$

2,550,456

 

REPOSITRAK, INC.

Consolidated Condensed Statements of Cash Flows (Unaudited)

 

 

 

 

 

 

Six Months

Ended December 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

2,829,697

 

 

$

2,550,456

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

608,903

 

 

 

465,166

 

Amortization of operating right-of-use asset

 

 

29,838

 

 

 

28,450

 

Stock compensation expense

 

 

171,373

 

 

 

209,869

 

Bad debt expense

 

 

150,000

 

 

 

300,000

 

(Increase) decrease in:

 

 

 

 

 

 

 

 

Accounts receivables

 

 

(1,389,753

)

 

 

247,507

 

Long-term receivables, prepaids and other assets

 

 

127,755

 

 

 

21,431

 

Increase (decrease) in:

 

 

 

 

 

 

 

 

Accounts payable

 

 

(99,081

)

 

 

(300,930

)

Operating lease liability

 

 

(28,616

)

 

 

(26,172

)

Accrued liabilities

 

 

(71,733

)

 

 

(207,025

)

Deferred revenue

 

 

123,564

 

 

 

11,240

 

Net cash provided by operating activities

 

 

2,451,947

 

 

 

3,299,992

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(10,523

)

 

 

(270,854

)

Purchase of marketable securities

 

 

(5,904

)

 

 

-

 

Net cash used in investing activities

 

 

(16,427

)

 

 

(270,854

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Net decrease in lines of credit

 

 

-

 

 

 

(2,142,165

)

Common Stock buyback/retirement

 

 

(1,515,574

)

 

 

(551,923

)

Redemption of series B-1 preferred

 

 

(749,995

)

 

 

-

 

Proceeds from employee stock plan

 

 

57,743

 

 

 

48,903

 

Dividends paid

 

 

(840,427

)

 

 

(570,511

)

Payments on notes payable and capital leases

 

 

(125,075

)

 

 

125,865

 

Net cash used in financing activities

 

 

(3,173,328

)

 

 

(3,089,831

)

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(737,808

)

 

 

(60,693

)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

23,990,879

 

 

 

21,460,948

 

Cash and cash equivalents at end of period

 

$

23,253,071

 

 

$

21,400,255

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

317,944

 

 

$

264,486

 

Cash paid for interest

 

$

6,434

 

 

$

40,446

 

Cash paid for operating leases

 

$

36,282

 

 

$

35,226

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Common stock to pay accrued liabilities

 

$

110,000

 

 

$

152,195

 

Dividends accrued on preferred stock

 

$

293,222

 

 

$

293,222

 

 

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