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NYSE MKT: PCYG
www.parkcitygroup.com
May 2013
Investor Presentation
22
Forward-Looking Statement
Statements in this presentation that relate to Park City Group's future plans, objectives,
expectations, performance, events and the like are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act
of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause
actual results to differ materially from those expressed or implied in these statements. Those
factors could include changes in economic conditions that may change demand for the
Company's products and services and other factors discussed in the "forward-looking
information" section and the "risk factor" section of the management's discussion and analysis
included in the Company's report on Form 10-K and 10-Q or current reports on Form 8-K filed
with the Securities and Exchange Commission. This presentation is comprised of interrelated
information that must be interpreted in the context of all of the information provided and care
should be exercised not to consider portions of this presentation out of context. Park City
Group uses paid services of investor relations organizations to promote the Company to the
investment community. Investments in any company should be considered speculative and
prior to acquisition, should be thoroughly researched. Park City Group does not intend to
update these forward-looking statements prior to announcement of quarterly or annual
results.
Sell More – Stock Less – See Everything
33
Park City Group Investment Highlights
> SaaS Recurring revenue streams with
multi-year visibility – ~90%+ customer
retention rate gives strong earnings
visibility.
> Generating Significant Positive Cash
Flow… Significant operating leverage 75%+
incremental margin No need to raise
Capital
> Accelerating Growth – in both revenue
and EPS due to recent national account
wins.
NYSE MKT: PCYG
Headquarters: Salt Lake City, Utah
Recent Price (5/8/13) $4.85
52-Week Range $2.71 -$5.75
Shares Outstanding 16.1 MM
Fully Diluted Shares 17.6 MM
Market Capitalization $78.1 MM
TTM Revenue $10.9 MM
TTM Adjusted-EBITDA $2.6 MM
Ownership
36.5% Mgmt & Board / 15% Institution
> Strong Competitive Advantage – 16 years of development and ~$125
million of invested capital in propriety platform.
> Influential Board of Directors and Experienced Management Team –
Current and former grocery, retailing, consumer products, dairy, and
magazine industry Senior executives.
Sell More – Stock Less – See Everything
44
Impactful Leadership Team
Name Experience
Randy Fields Chairman & CEO Co-founder Mrs. Fields Cookies, Co-founder Captiva Software
Ed Clissold CFO & General Counsel Previously served as General Counsel for Mrs. Fields’ Cookies and was
also in private practice.
Robert Allen Director Former CEO of Southern Belle Dairy and EVP of Borden, Inc.
Austin Noll Director Consumer packaged goods consultant. Former executive at General
Foods, Borden, and Nabisco
Rich Juliano Director Grocery retailer consultant. Former executive at SUPERVALU, Giant
Eagle, and others.
James Gillis Director Co-CEO of Source Interlink Companies, Inc., a marketing and fulfillment
company of entertainment products
Bob Hermanns Director Director of Food Industry Programs at the University of Southern
California and former CEO of Associated Grocers
Bill Kies Director Principal of Kies Consulting, specializing in the supermarket industry.
Former COO of IGA, Inc.
Ronald Hodge Director Former CEO of Delhaize America and former CEO of Hannaford Bros. Co.
Sell More – Stock Less – See Everything
55
Park City Group Business Overview
• Software-as-a-Service (“SaaS”) provider
• Provide third-party “Wal-Mart like” data
exchange between grocery stores and their
suppliers
• Strong value proposition for retailers &
suppliers
• Increased sales
• Decreased inventory
• Enhanced customer loyalty
• Food and Drug Safety – On path to being the
industry standard for FDA compliance for
food and drug tracking
Hub & Spoke Model
Sell More – Stock Less – See Everything
66
Core Issue #1 – Grocery Industry Challenges
Risk adverse, low growth industry
> 1% revenue growth with ~3% pre-tax margin
> Balance sheets are highly leveraged
> Asset intensive industry highly dependent on inventory turns
Huge challenge…Out of stocks!
> When customers cannot find products they want…
> 31% will purchase at a competitor
> 9% won’t purchase the item at all
Source: Out of Stock study funded by P&G, sponsored by FMA, FMI and NACDS and conducted by Thomas W. Gruen,Ph.D., University
of Colorado at Colorado Springs, USA and Dr. Daniel Corsten, IE Business School Madrid
Sell More – Stock Less – See Everything
77
Core Issue #2 – Supply Chain Issue
No end to end “visibility” in the supply chain
> Supply chains view the world from what has shipped…NOT based on what has sold
> 30% of store sales from DSD Vendors- Stores have no visibility to DSD inventories
creating the overstock/out-of-stock problem
> Inaccurate data perpetuates the supply chain problem
Supply chain is
incredibly
complicated
Sell More – Stock Less – See Everything
88
Core Issue #3 –
WalMart’s Impact on the Grocery Industry
Wal-Mart’s grocery industry market share from
0% to ~25% in 15 years…
AND they recently announced a price decrease!
-Business Insider
Sell More – Stock Less – See Everything
99
Park City Group Solution
> Supply chain visibility STARTS with point of sale data and works
back up the supply chain
> Capture information at the point of sale
> Provide greater visibility into consumer demand
> Turn data into actionable information across the entire supply
chain
> Collaboration between the Retailer and the Supplier
(“collaborative commerce”)
Customer Value Proposition
> Reduce out of Stocks = Increase in sales 4% to 6%
> Lower Inventories/ working capital – 10% to 30%
> Increased margins through…greater logistic efficiency, inventory
accuracy and less promotional spending
Sell More – Stock Less – See Everything
1010
PCG Success and Large Direct Store Delivery
Growth Opportunity
PCG dominant in these segments PCG growth opportunities
OOS = Out-of-stock
Sell More – Stock Less – See Everything
1111
“Hub & Spoke” Financial Model
3 Terms of Art:
> Hub = Retailer
> Spoke = Supplier
> Connection = Retailer & Supplier data exchange
which requires no installation of software AND no
on-site visit
Original Market of smaller Hubs and their Spokes
> Retailers paid an annual subscription and “rolled-out” platform to Supplier base
> Historical Hub/Spoke subscription value of $500,000 to $1,000,000 annually
Now shift in focus to Larger Hubs
> Larger hubs with a national footprint have a potential $3-5,000,000 annual
subscription
> Opportunities to upsell additional supply chain modules increase revenue
per connection by an order of magnitude
Sell More – Stock Less – See Everything
1212
Select Retailer Partners
1313
Select Supplier Customers
1414
Many Additional Upsell Opportunities
 Visibility - Base level service
– Reporting of key metrics, e.g. sales, deliveries, returns, days of supply,
lost sales
 Scan-based Trading (SBT) with Visibility
– Include SBT shrink reporting to the above and get a complete picture
 Computer Assisted Ordering – (CAO)
– Retailer-focused distribution center ordering
 Store Level Replenishment – (SLR)
– Supplier-focused
 Vendor Managed Inventory – (VMI)
– Supplier-focused
 Demand Planning – (DP)
– Supplier-focused
 Fresh Market Manager – (FMM)
– Perishable production planning and ordering tool
 Data Metrics & Analysis
– Business analysis and Category Management services including Plan-
o-grams
Sell More – Stock Less – See Everything
1515
ReposiTrak™-
Global Food and Drug Track & Trace System
 Michael O. Leavitt – former U.S. Secretary of Health and
Human Services, and Administrator of the Environmental
Protection Agency and 3-time governor of Utah
 Dr. David Acheson – former FDA Associate Commissioner
of Foods, former Chief Medical Officer at the FDA's Center
for Food Safety & Applied Nutrition (CFSAN)
Park City Group joins with Leavitt Partners to create ReposiTrak
Park City Groups brings proven technology
Leavitt Partners brings thought leadership in the fields of food and drug safety
 16 years and $125 million of invested Capital
 Processes millions of transactions per day
Sell More – Stock Less – See Everything
1616
ReposiTrak ™-
Global Food and Drug Track & Trace System
Opportunity to Accelerate Growth of PCG’s Existing Hub and Spoke network
• Tracks and traces products and components to products throughout the
food, drug and dietary supplement supply chains
• Receives, stores, shares, and maintains regulatory documentation all in
one convenient location
• Near real-time identification of the supply chain path taken by recalled
products
• Strong Retailer and Supplier Value Proposition
• Inexpensive to use ($100 per month per participant)
• Several million possible participants
• Compliance with food and drug safety law
• Reduces litigation risk
• Provides point of differentiation for early adopters
Sell More – Stock Less – See Everything
1717
ReposiTrak ™-
Global Food and Drug Track & Trace System
Large Addressable Market
U.S. Market alone is $1 billion annually
• 167,000 domestic manufactures, processors, warehouses
• 570,000 facilities in the food service segment
• 2 million farmers
Opportunities Internationally
• 254,000 foreign food manufacturers
• 5 million farmers
o Initial retail, wholesaler and supplier
implementations began in August 2012
o Currently implementing one wholesaler,
several thousand suppliers as part of a trade-
association wide initiative with 14 possible
wholesalers controlling 20% of the
supermarket stores in the US
o In negotiations with the Chinese FDA
Sell More – Stock Less – See Everything
1818
Large Addressable Market
Addressable Market
$550 million addressable U.S. market:
> ~150 - 200 Retailers
> ~100,000 total connections @ ~$5K each
Additional supply chain management
services:
> From basic service to enterprise supply
chain management
> Increase average rev. per connection
Food safety initiatives:
> Includes all supplier facilities from
“Fork to Farm”
Base Level
Service
$550 million
Food Safety
Initiative
Additional
Services
[2x Base
Level]
Sell More – Stock Less – See Everything
1919
Contribution Margin Going Forward
100% 75%
25%
Incremental Revenue Incremental Cost of Sale
 Marketing Allowance
 Sales Commissions
 Travel
 Sales Promotions
 Miscellaneous
Incremental
Contribution Margin
Sell More – Stock Less – See Everything
2020
$1.2
$1.3
$1.4
$1.5
$1.6
$1.7
$1.8
$1.9
$2.0
$2.1
Financial “Snapshot”
• Adjusted EBITDA: EBITDA plus bad debt expense, stock
compensation & expenses, and acquisition related costs.
• Free Cash Flow: Net cash provided by (used in) operating activities
less replacement purchases of property and equipment
($3)
($2)
($1)
$0
$1
$2
$3
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Free Cash Flow *
($millions)
($3)
($2)
($1)
$0
$1
$2
$3
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Adjusted EBITDA *
($millions)
Subscription Revenue Growth Qtrly
($millions)
Net Debt
(10,000,000)
(8,000,000)
(6,000,000)
(4,000,000)
(2,000,000)
-
2,000,000
4,000,000
2121
Park City Group Investment Summary
> SaaS Recurring revenue streams with
multi-year visibility – ~90%+ customer
retention rate gives strong earnings
visibility.
> Generating Significant Positive Cash
Flow… Significant operating leverage 75%+
incremental margin No need to raise
Capital
> Accelerating Growth – in both revenue
and EPS due to recent national account
wins.
NYSE MKT: PCYG
Headquarters: Salt Lake City, Utah
Recent Price (5/8/13) $4.85
52-Week Range $2.71 -$5.75
Shares Outstanding 16.1 MM
Fully Diluted Shares 17.6 MM
Market Capitalization $78.1 MM
TTM Revenue $10.9 MM
TTM Adjusted-EBITDA $2.6 MM
Ownership
36.5% Mgmt & Board / 15% Institution
> Strong Competitive Advantage – 16 years of development and ~$125
million of invested capital in propriety platform.
> Influential Board of Directors and Experienced Management Team –
Current and former grocery, retailing, consumer products, dairy, and
magazine industry Senior executives.
Sell More – Stock Less – See Everything
22
NYSE MKT: PCYG
www.parkcitygroup.com
Thank You

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Pcyg investor presentation_may_2013

  • 1. 1 NYSE MKT: PCYG www.parkcitygroup.com May 2013 Investor Presentation
  • 2. 22 Forward-Looking Statement Statements in this presentation that relate to Park City Group's future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Those factors could include changes in economic conditions that may change demand for the Company's products and services and other factors discussed in the "forward-looking information" section and the "risk factor" section of the management's discussion and analysis included in the Company's report on Form 10-K and 10-Q or current reports on Form 8-K filed with the Securities and Exchange Commission. This presentation is comprised of interrelated information that must be interpreted in the context of all of the information provided and care should be exercised not to consider portions of this presentation out of context. Park City Group uses paid services of investor relations organizations to promote the Company to the investment community. Investments in any company should be considered speculative and prior to acquisition, should be thoroughly researched. Park City Group does not intend to update these forward-looking statements prior to announcement of quarterly or annual results. Sell More – Stock Less – See Everything
  • 3. 33 Park City Group Investment Highlights > SaaS Recurring revenue streams with multi-year visibility – ~90%+ customer retention rate gives strong earnings visibility. > Generating Significant Positive Cash Flow… Significant operating leverage 75%+ incremental margin No need to raise Capital > Accelerating Growth – in both revenue and EPS due to recent national account wins. NYSE MKT: PCYG Headquarters: Salt Lake City, Utah Recent Price (5/8/13) $4.85 52-Week Range $2.71 -$5.75 Shares Outstanding 16.1 MM Fully Diluted Shares 17.6 MM Market Capitalization $78.1 MM TTM Revenue $10.9 MM TTM Adjusted-EBITDA $2.6 MM Ownership 36.5% Mgmt & Board / 15% Institution > Strong Competitive Advantage – 16 years of development and ~$125 million of invested capital in propriety platform. > Influential Board of Directors and Experienced Management Team – Current and former grocery, retailing, consumer products, dairy, and magazine industry Senior executives. Sell More – Stock Less – See Everything
  • 4. 44 Impactful Leadership Team Name Experience Randy Fields Chairman & CEO Co-founder Mrs. Fields Cookies, Co-founder Captiva Software Ed Clissold CFO & General Counsel Previously served as General Counsel for Mrs. Fields’ Cookies and was also in private practice. Robert Allen Director Former CEO of Southern Belle Dairy and EVP of Borden, Inc. Austin Noll Director Consumer packaged goods consultant. Former executive at General Foods, Borden, and Nabisco Rich Juliano Director Grocery retailer consultant. Former executive at SUPERVALU, Giant Eagle, and others. James Gillis Director Co-CEO of Source Interlink Companies, Inc., a marketing and fulfillment company of entertainment products Bob Hermanns Director Director of Food Industry Programs at the University of Southern California and former CEO of Associated Grocers Bill Kies Director Principal of Kies Consulting, specializing in the supermarket industry. Former COO of IGA, Inc. Ronald Hodge Director Former CEO of Delhaize America and former CEO of Hannaford Bros. Co. Sell More – Stock Less – See Everything
  • 5. 55 Park City Group Business Overview • Software-as-a-Service (“SaaS”) provider • Provide third-party “Wal-Mart like” data exchange between grocery stores and their suppliers • Strong value proposition for retailers & suppliers • Increased sales • Decreased inventory • Enhanced customer loyalty • Food and Drug Safety – On path to being the industry standard for FDA compliance for food and drug tracking Hub & Spoke Model Sell More – Stock Less – See Everything
  • 6. 66 Core Issue #1 – Grocery Industry Challenges Risk adverse, low growth industry > 1% revenue growth with ~3% pre-tax margin > Balance sheets are highly leveraged > Asset intensive industry highly dependent on inventory turns Huge challenge…Out of stocks! > When customers cannot find products they want… > 31% will purchase at a competitor > 9% won’t purchase the item at all Source: Out of Stock study funded by P&G, sponsored by FMA, FMI and NACDS and conducted by Thomas W. Gruen,Ph.D., University of Colorado at Colorado Springs, USA and Dr. Daniel Corsten, IE Business School Madrid Sell More – Stock Less – See Everything
  • 7. 77 Core Issue #2 – Supply Chain Issue No end to end “visibility” in the supply chain > Supply chains view the world from what has shipped…NOT based on what has sold > 30% of store sales from DSD Vendors- Stores have no visibility to DSD inventories creating the overstock/out-of-stock problem > Inaccurate data perpetuates the supply chain problem Supply chain is incredibly complicated Sell More – Stock Less – See Everything
  • 8. 88 Core Issue #3 – WalMart’s Impact on the Grocery Industry Wal-Mart’s grocery industry market share from 0% to ~25% in 15 years… AND they recently announced a price decrease! -Business Insider Sell More – Stock Less – See Everything
  • 9. 99 Park City Group Solution > Supply chain visibility STARTS with point of sale data and works back up the supply chain > Capture information at the point of sale > Provide greater visibility into consumer demand > Turn data into actionable information across the entire supply chain > Collaboration between the Retailer and the Supplier (“collaborative commerce”) Customer Value Proposition > Reduce out of Stocks = Increase in sales 4% to 6% > Lower Inventories/ working capital – 10% to 30% > Increased margins through…greater logistic efficiency, inventory accuracy and less promotional spending Sell More – Stock Less – See Everything
  • 10. 1010 PCG Success and Large Direct Store Delivery Growth Opportunity PCG dominant in these segments PCG growth opportunities OOS = Out-of-stock Sell More – Stock Less – See Everything
  • 11. 1111 “Hub & Spoke” Financial Model 3 Terms of Art: > Hub = Retailer > Spoke = Supplier > Connection = Retailer & Supplier data exchange which requires no installation of software AND no on-site visit Original Market of smaller Hubs and their Spokes > Retailers paid an annual subscription and “rolled-out” platform to Supplier base > Historical Hub/Spoke subscription value of $500,000 to $1,000,000 annually Now shift in focus to Larger Hubs > Larger hubs with a national footprint have a potential $3-5,000,000 annual subscription > Opportunities to upsell additional supply chain modules increase revenue per connection by an order of magnitude Sell More – Stock Less – See Everything
  • 14. 1414 Many Additional Upsell Opportunities  Visibility - Base level service – Reporting of key metrics, e.g. sales, deliveries, returns, days of supply, lost sales  Scan-based Trading (SBT) with Visibility – Include SBT shrink reporting to the above and get a complete picture  Computer Assisted Ordering – (CAO) – Retailer-focused distribution center ordering  Store Level Replenishment – (SLR) – Supplier-focused  Vendor Managed Inventory – (VMI) – Supplier-focused  Demand Planning – (DP) – Supplier-focused  Fresh Market Manager – (FMM) – Perishable production planning and ordering tool  Data Metrics & Analysis – Business analysis and Category Management services including Plan- o-grams Sell More – Stock Less – See Everything
  • 15. 1515 ReposiTrak™- Global Food and Drug Track & Trace System  Michael O. Leavitt – former U.S. Secretary of Health and Human Services, and Administrator of the Environmental Protection Agency and 3-time governor of Utah  Dr. David Acheson – former FDA Associate Commissioner of Foods, former Chief Medical Officer at the FDA's Center for Food Safety & Applied Nutrition (CFSAN) Park City Group joins with Leavitt Partners to create ReposiTrak Park City Groups brings proven technology Leavitt Partners brings thought leadership in the fields of food and drug safety  16 years and $125 million of invested Capital  Processes millions of transactions per day Sell More – Stock Less – See Everything
  • 16. 1616 ReposiTrak ™- Global Food and Drug Track & Trace System Opportunity to Accelerate Growth of PCG’s Existing Hub and Spoke network • Tracks and traces products and components to products throughout the food, drug and dietary supplement supply chains • Receives, stores, shares, and maintains regulatory documentation all in one convenient location • Near real-time identification of the supply chain path taken by recalled products • Strong Retailer and Supplier Value Proposition • Inexpensive to use ($100 per month per participant) • Several million possible participants • Compliance with food and drug safety law • Reduces litigation risk • Provides point of differentiation for early adopters Sell More – Stock Less – See Everything
  • 17. 1717 ReposiTrak ™- Global Food and Drug Track & Trace System Large Addressable Market U.S. Market alone is $1 billion annually • 167,000 domestic manufactures, processors, warehouses • 570,000 facilities in the food service segment • 2 million farmers Opportunities Internationally • 254,000 foreign food manufacturers • 5 million farmers o Initial retail, wholesaler and supplier implementations began in August 2012 o Currently implementing one wholesaler, several thousand suppliers as part of a trade- association wide initiative with 14 possible wholesalers controlling 20% of the supermarket stores in the US o In negotiations with the Chinese FDA Sell More – Stock Less – See Everything
  • 18. 1818 Large Addressable Market Addressable Market $550 million addressable U.S. market: > ~150 - 200 Retailers > ~100,000 total connections @ ~$5K each Additional supply chain management services: > From basic service to enterprise supply chain management > Increase average rev. per connection Food safety initiatives: > Includes all supplier facilities from “Fork to Farm” Base Level Service $550 million Food Safety Initiative Additional Services [2x Base Level] Sell More – Stock Less – See Everything
  • 19. 1919 Contribution Margin Going Forward 100% 75% 25% Incremental Revenue Incremental Cost of Sale  Marketing Allowance  Sales Commissions  Travel  Sales Promotions  Miscellaneous Incremental Contribution Margin Sell More – Stock Less – See Everything
  • 20. 2020 $1.2 $1.3 $1.4 $1.5 $1.6 $1.7 $1.8 $1.9 $2.0 $2.1 Financial “Snapshot” • Adjusted EBITDA: EBITDA plus bad debt expense, stock compensation & expenses, and acquisition related costs. • Free Cash Flow: Net cash provided by (used in) operating activities less replacement purchases of property and equipment ($3) ($2) ($1) $0 $1 $2 $3 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Free Cash Flow * ($millions) ($3) ($2) ($1) $0 $1 $2 $3 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Adjusted EBITDA * ($millions) Subscription Revenue Growth Qtrly ($millions) Net Debt (10,000,000) (8,000,000) (6,000,000) (4,000,000) (2,000,000) - 2,000,000 4,000,000
  • 21. 2121 Park City Group Investment Summary > SaaS Recurring revenue streams with multi-year visibility – ~90%+ customer retention rate gives strong earnings visibility. > Generating Significant Positive Cash Flow… Significant operating leverage 75%+ incremental margin No need to raise Capital > Accelerating Growth – in both revenue and EPS due to recent national account wins. NYSE MKT: PCYG Headquarters: Salt Lake City, Utah Recent Price (5/8/13) $4.85 52-Week Range $2.71 -$5.75 Shares Outstanding 16.1 MM Fully Diluted Shares 17.6 MM Market Capitalization $78.1 MM TTM Revenue $10.9 MM TTM Adjusted-EBITDA $2.6 MM Ownership 36.5% Mgmt & Board / 15% Institution > Strong Competitive Advantage – 16 years of development and ~$125 million of invested capital in propriety platform. > Influential Board of Directors and Experienced Management Team – Current and former grocery, retailing, consumer products, dairy, and magazine industry Senior executives. Sell More – Stock Less – See Everything