TRAK ReposiTrak Inc

Onboarding of Traceability Customers Continues to Accelerate; Company Ends Quarter with $24.5 Million in Cash, No Debt

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 third fiscal quarter (“FQ3 2024”) ended March 31, 2024.

Third Quarter Financial Highlights:

• Third quarter total revenue increased 5% to $5.1 million from $4.8 million.
• Recurring revenue increased 6%, net of the planned elimination of high-touch, low-opportunity revenue, to $5.1 million from $4.8 million, representing approximately 99% of total revenue.
• Quarterly operating expense increased 15% to $3.8 million from $3.3 million. The third fiscal quarter last year included approximately $1 million in an Employee Retention Credit (“ERC”), reducing general and administrative expenses.
• Quarterly operating income decreased 17% to $1.3 million from $1.5 million last year. Excluding the non-recurring ERC credit in the third fiscal quarter last year, operating income would have increased approximately $800,000 year-over-year.
• Quarterly GAAP net income decreased 7% to $1.6 million from $1.7 million last year. Excluding the non-recurring ERC credit in the third fiscal quarter last year, net income would have increased approximately $900,000 year-over-year.
• Quarterly net income to common shareholders was $1.4 million, down 7% from $1.5 million last year. Excluding the non-recurring ERC credit in the third fiscal quarter last year, net income to common shareholders would have increased approximately $900,000 year-over-year.
• Quarterly EPS of $0.08, unchanged from the prior year.
• During the quarter, the Company redeemed 70,093 preferred shares for the stated redemption price of $10.70 per share for a total of $749,995.
• The Company finished the quarter with $24.5 million in cash and no bank debt.

Randall K. Fields, Chairman and CEO of ReposiTrak, commented, “We continue to add new retailers and suppliers to the ReposiTrak Traceability Network. Revenue from traceability now represents approximately 5% of our consolidated revenue, on an annualized basis, and we are more confident than ever that Traceability will double our revenue over the next three years. The production facilities in hand that have been already been implemented, and those in the queue to be implemented in the ReposiTrak Traceability Network (RTN), already exceed our initial estimates for the market size and represents an annual recurring revenue (ARR) that is expected to double our revenue base over the next three years.”

“Meanwhile, we continue to maintain robust profitability, returning capital to shareholders in the form of a cash dividend, redeeming preferred shares, all while growing our cash balances,” added Fields. “This approach will not change. ReposiTrak is the clear leader in the rapidly unfolding traceability industry, as evidenced by our market share, industry endorsements, and the near-term investments are already beginning to lead to higher revenue, earnings, and cash as the FSMA 204 deadline is right around the corner.”

Third Fiscal Quarter Financial Results (three months ended March 31, 2024, vs. three months ended March 31, 2023):

Total revenue was up 5% to $5.08 million as compared to $4.82 million in the prior-year third quarter. Total operating expenses were $3.82 million, up 15% compared to $3.30 million last year. General and administrative expenses increased by 48%. GAAP net income was $1.55 million compared to $1.66 million. Net income to common shareholders was $1.42 million, or $0.08 per diluted share, compared to $1.52 million, or $0.08 per diluted share.

Year-to-Date Financial Results (nine months ended March 31, 2024, vs. nine months ended March 31, 2023):

Total revenue was up 7% to $15.27 million as compared to $14.30 million in the prior-year period. Total operating expense was $11.57 million, up 12% compared to $10.37 million last year. The third fiscal quarter last year included non-recurring Employee Retention Credit benefit of approximately $1 million, reducing the year-ago operating expense. Inclusive of the impact of this credit in the year-ago quarter, GAAP net income was $4.38 million compared to $4.21 million. Net income to common shareholders was $3.95 million, or $0.22 per basic and $0.21 per diluted share, compared to $3.77 million, or $0.20 per basic and $0.20 per diluted share last year.

Return of Capital:

In the third quarter of fiscal 2024, the Company redeemed another 70,093 preferred shares at the stated redemption price of $10.70 per share for a total of $749,995. The remaining amount of the preferred share redemption is $7.46 million. As previously announced, the Company anticipates redeeming all of its preferred shares issued and outstanding over the next three years. In addition, the Company has approximately $8 million remaining on the $21 million total common share buyback authorization.

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 $24.5 million in cash and cash equivalents at March 31, 2024, compared to $24.0 million at June 30, 2023. The Company had nothing drawn on its working line of credit as of March 31, 2024 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, May 15, 2024 Time: 4:15 p.m. ET (1:15 p.m. PT) Toll-Free: 1-877-300-8521 Toll/International 1-412-317-6026 Conference ID: 10188893

Replay Dial-In Numbers: Toll Free: 1-844-512-2921 Toll/International: 1-412-317-6671 Replay Start: Wednesday, May 15, 2024, 7:15 p.m. ET Replay Expiry: Saturday, June 15, 2024, at 11:59 PM ET Replay Pin Number: 10188893

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)

 

 

 

March 31, 2024

 

June 30, 2023

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

24,452,680

 

 

$

23,990,879

 

Receivables, net of allowance for doubtful accounts of $226,198 and $170,103 at March 31, 2024 and June 30, 2023, respectively

 

 

3,776,472

 

 

 

2,523,019

 

Contract asset – unbilled current portion

 

 

147,520

 

 

 

186,959

 

Prepaid expense and other current assets

 

 

451,041

 

 

 

573,763

 

Total Current Assets

 

 

28,827,713

 

 

 

27,274,620

 

 

 

 

 

 

 

 

Property and Equipment, net

 

 

591,724

 

 

 

986,300

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

Deposits and other assets

 

 

22,414

 

 

 

22,414

 

Prepaid expense – less current portion

 

 

6,677

 

 

 

36,282

 

Contract asset – unbilled long-term portion

 

 

108,052

 

 

 

108,052

 

Operating lease – right-of-use asset

 

 

265,726

 

 

 

310,796

 

Customer relationships

 

 

164,250

 

 

 

262,800

 

Goodwill

 

 

20,883,886

 

 

 

20,883,886

 

Capitalized software costs, net

 

 

463,036

 

 

 

698,281

 

Total Other Assets

 

 

21,914,041

 

 

 

22,322,511

 

 

 

 

 

 

 

 

Total Assets

 

$

51,333,478

 

 

$

50,583,431

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

$

510,412

 

 

$

431,387

 

Accrued liabilities

 

 

1,390,232

 

 

 

1,620,000

 

Contract liability – deferred revenue

 

 

2,466,262

 

 

 

1,903,001

 

Operating lease liability – current

 

 

62,725

 

 

 

58,771

 

Notes payable and financing leases – current

 

 

215,274

 

 

 

219,262

 

Total Current Liabilities

 

 

4,644,905

 

 

 

4,232,421

 

 

 

 

 

 

 

 

Long-Term Liabilities

 

 

 

 

 

 

Operating lease liability – less current portion

 

 

215,676

 

 

 

263,047

 

Notes payable and financing leases – less current portion

 

 

-

 

 

 

206,032

 

Total Liabilities

 

 

4,860,581

 

 

 

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 March 31, 2024 and June 30, 2023;

 

 

6,254

 

 

 

6,254

 

Series B-1 Preferred, 550,000 shares authorized; 72,216 and 212,402 shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively

 

 

722

 

 

 

2,124

 

Common Stock, $0.01 par value, 50,000,000 shares authorized; 18,221,527 and 18,309,051 issued and outstanding at March 31, 2024 and June 30, 2023, respectively

 

 

182,218

 

 

 

183,093

 

Additional paid-in capital

 

 

65,277,419

 

 

 

67,732,887

 

Accumulated other comprehensive loss

 

 

(31,006

)

 

 

-

 

Accumulated deficit

 

 

(18,962,710

)

 

 

(22,042,427

)

Total Stockholders’ Equity

 

 

46,472,897

 

 

 

45,881,931

 

Total Liabilities and Stockholders’ Equity

 

$

51,333,478

 

 

$

50,583,431

 

   

REPOSITRAK, INC.

Consolidated Condensed Statements of Operations and Comprehensive Income (Unaudited)

 

 

 

Three Months Ended March 31,

 

Nine Months Ended March 31,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

5,084,866

 

 

$

4,824,101

 

 

$

15,270,729

 

 

$

14,295,091

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expense:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and product support

 

 

831,912

 

 

 

840,272

 

 

 

2,571,533

 

 

 

2,539,618

 

Sales and marketing

 

 

1,349,838

 

 

 

1,239,946

 

 

 

4,119,716

 

 

 

3,667,017

 

General and administrative

 

 

1,352,197

 

 

 

916,237

 

 

 

3,978,798

 

 

 

3,392,056

 

Depreciation and amortization

 

 

288,576

 

 

 

305,864

 

 

 

897,479

 

 

 

771,030

 

Total operating expense

 

 

3,822,523

 

 

 

3,302,319

 

 

 

11,567,526

 

 

 

10,369,721

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

1,262,343

 

 

 

1,521,782

 

 

 

3,703,203

 

 

 

3,925,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

350,691

 

 

 

275,941

 

 

 

925,297

 

 

 

554,299

 

Interest expense

 

 

(8,036

)

 

 

(9,771

)

 

 

(21,956

)

 

 

(52,481

)

Unrealized gain (loss) on short term investments

 

 

5,429

 

 

 

35,068

 

 

 

48,071

 

 

 

(3,753

)

Other gain

 

 

-

 

 

 

-

 

 

 

-

 

 

 

70,047

 

Income before income taxes

 

 

1,610,427

 

 

 

1,823,020

 

 

 

4,654,615

 

 

 

4,493,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Provision) for income taxes:

 

 

(60,000

)

 

 

(160,000

)

 

 

(274,491

)

 

 

(280,006

)

Net income

 

 

1,550,427

 

 

 

1,663,020

 

 

 

4,380,124

 

 

 

4,213,476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends on preferred stock

 

 

(134,345

)

 

 

(146,611

)

 

 

(427,567

)

 

 

(439,833

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income applicable to common shareholders

 

$

1,416,082

 

 

$

1,516,409

 

 

$

3,952,557

 

 

$

3,773,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares, basic

 

 

18,194,000

 

 

 

18,394,000

 

 

 

18,194,000

 

 

 

18,408,000

 

Weighted average shares, diluted

 

 

18,954,000

 

 

 

18,751,000

 

 

 

18,874,000

 

 

 

18,702,000

 

Basic income per share

 

$

0.08

 

 

$

0.08

 

 

$

0.22

 

 

$

0.20

 

Diluted income per share

 

$

0.08

 

 

$

0.08

 

 

$

0.21

 

 

$

0.20

 

   

REPOSITRAK, INC.

Consolidated Condensed Statements of Cash Flows (Unaudited)

 

 

 

Nine months

Ended March 31,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

4,380,124

 

 

$

4,213,476

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

897,479

 

 

 

771,030

 

Amortization of operating right-of-use asset

 

 

45,070

 

 

 

43,019

 

Stock compensation expense

 

 

260,853

 

 

 

315,216

 

Bad debt expense

 

 

225,000

 

 

 

1,200,000

 

(Increase) decrease in:

 

 

 

 

 

 

Accounts receivables

 

 

(1,439,014

)

 

 

86,972

 

Long-term receivables, prepaids and other assets

 

 

751

 

 

 

655,391

 

Increase (decrease) in:

 

 

 

 

 

 

Accounts payable

 

 

79,025

 

 

 

(309,812

)

Operating lease liability

 

 

(43,417

)

 

 

(39,777

)

 

 

 

 

 

 

 

Accrued liabilities

 

 

(58,391

)

 

 

122,744

 

Deferred revenue

 

 

563,261

 

 

 

7,631

 

Net cash provided by operating activities

 

 

4,910,741

 

 

 

7,065,890

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(17,532

)

 

 

(133,944

)

Capitalization of software costs

 

 

-

 

 

 

(769,243

)

Purchase of marketable securities

 

 

(31,006

)

 

 

-

 

Net cash (used in) investing activities

 

 

(48,538

)

 

 

(903,187

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Net (decrease) in lines of credit

 

 

-

 

 

 

(2,590,907

)

Common Stock buyback/retirement

 

 

(1,515,574

)

 

 

(981,194

)

Redemption of series B-1 preferred

 

 

(1,499,990

)

 

 

-

 

Proceeds from employee stock plan

 

 

111,839

 

 

 

92,728

 

Dividends paid

 

 

(1,286,657

)

 

 

(993,037

)

Payments on notes payable and capital leases

 

 

(210,020

)

 

 

(209,748

)

Net cash used in financing activities

 

 

(4,400,402

)

 

 

(4,682,158

)

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

461,801

 

 

 

1,480,545

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

23,990,879

 

 

 

21,460,948

 

Cash and cash equivalents at end of period

 

$

24,452,680

 

 

$

22,941,493

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for income taxes

 

$

317,944

 

 

$

264,486

 

Cash paid for interest

 

$

11,711

 

 

$

52,481

 

Cash paid for operating leases

 

$

54,606

 

 

$

53,015

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Common stock to pay accrued liabilities

 

$

445,980

 

 

$

256,977

 

Dividends accrued on preferred stock

 

$

427,567

 

 

$

439,833

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240515114345/en/

Investor Relations Contact: John Merrill, CFO Investor-relations@repositrak.com

Or

FNK IR Rob Fink 646.809.4048 rob@fnkir.com