Park City Group Reports Record EPS of $0.08 for the Second Fiscal Quarter of 2019

Record Net Income of $1.7 million and Fully Diluted EPS of $0.08

Converged Business Model Drives Enhanced Execution and Operating
Leverage

Company Achieves Goal of Adding Two Additional MarketPlace Buyers
Before Fiscal Year End

SALT LAKE CITY–(BUSINESS WIRE)–Park City Group, Inc. (NASDAQ: PCYG), the parent company of ReposiTrak,
Inc., which operates a B2B ecommerce, compliance, and supply chain
platform that partners with retailers, wholesalers, and their suppliers,
to accelerate sales, control risk, and improve supply chain
efficiencies, announced financial results for the second fiscal quarter
ended December 31, 2018.

Second Fiscal Quarter Financial and Recent Business Highlights:

• Operating margin exceeded 30% driving record net income and upside
  to EPS expectations.
• Compliance connections metric reached 75,000 for over 320,000
  connections across all applications.
• MarketPlace interest points to additional users and additional use
  cases before fiscal year-end.
• Supply Chain trends remain positive as HUBs look to drive
  capabilities deeper into supplier base.
• Customer focus drove strong connection growth, low churn, and
  increased cross selling.

“Our converged business is driving benefits in terms of improved
execution and enhanced profitability, as evidenced by the record net
income in the quarter,” said Randall K. Fields, Chairman and Chief
Executive Officer of Park City Group. “We continue to scale our network
of connections, and we are still at the early stages for increasing the
scope of our activities on this network. Our single technology platform
and investments in automation are allowing us to shed the overhead of
our legacy model. As we focus the Success Team on serving our customers
through a single, cohesive application platform, we expect revenue
growth to accelerate and earnings growth to continue to outpace revenue
growth.”

“Our activities in the quarter were focused on execution to ensure our
customer’s success,” added Mr. Fields. “We now have over 75,000
compliance connections, as the team focused on onboarding suppliers for
two large Tier 1 compliance customers which we won in the first quarter.
One of these HUBs is one of the largest wholesalers in the country, and
the other was a large retailer where our mandate grew since the initial
engagement last quarter. These two engagements, and a robust pipeline of
Tier 1 and Tier 2 prospects, give us confidence fiscal 2019 will be
another strong year for adding compliance connections.”

“Interest in MarketPlace continues to grow,” said Mr. Fields. “As we
projected, we have added two more buyers to MarketPlace, achieving this
goal ahead of our own target of the end of our fiscal year. One of these
will begin using the platform this quarter for the same use case as our
initial buyer. The second launched in December for a completely new use
case and has become a valuable customer reference. MarketPlace is early
stage and subject to quarterly variances, due to seasonality and
customer initiatives, but we are highly encouraged and expect to
demonstrate the progress we have made.”

“Industry dynamics continue to drive higher interest in our supply chain
capabilities as our HUBs are looking to drive our applications deeper
into their supplier bases,” said Mr. Fields. “This is happening
organically through an acceleration in the addition of new suppliers to
existing HUBs and through high-level discussion for HUB-wide mandates
and large supplier-driven mandates like we saw at the end of the prior
fiscal year. We believe there is an eight-figure opportunity just from
engaging every supplier we already enable at each of our HUBs they
already service.”

Financial Results Summary:

Second Fiscal Quarter Results: Total revenue declined 3% to $5.6 million
for the three months ended December 31, 2018, as compared to $5.7
million during the same period a year ago primarily due to lower
revenues from the sale of licenses and a year-over-year decline in
MarketPlace revenue. Total operating expenses were $3.9 million, an 11%
decrease from $4.4 million a year ago, as the Company is leveraging
investments made in increasing productivity. GAAP net income was $1.7
million, or 30% of revenue, versus $1.4, or 24% of revenue, a year ago,
and GAAP net income to common shareholders was $1.5 million, or $0.08
per diluted share, compared to $1.2 million, or $0.06 per diluted share,
a year ago.

Fiscal 2019 To Date Results: Total revenue increased 10% to $11.5
million for the six months ended December 31, 2018, as compared to $10.4
million during the same period a year ago primarily due to an increase
in subscription revenues for the Company’s compliance and supply chain
services. Total operating expenses were $8.8 million, a 2% increase from
$8.6 million a year ago, as the Company is leveraging investments made
in increasing productivity. GAAP net income was $2.7 million, or 23% of
revenue, versus $1.7, or 16% of revenue, a year ago, and GAAP net income
to common shareholders was $2.4 million, or $0.12 per diluted share,
compared to $1.4 million, or $0.07 per diluted share, a year ago.

Conference Call:

The Company will host a conference call at 4:30 P.M. ET today, February
7, 2019 to discuss the Company’s results. Investors and interested
parties may participate in the call by dialing 877-407-9716 or
201-493-6779 (international) and referring Conference ID: 13687250. The
conference call is also being webcast and is available via the investor
relations section of the Company’s website, www.parkcitygroup.com.
A replay of the conference call will be available from 7:30 ET today
until 11:59 p.m. ET on March 7, 201-. The Replay can be accessed by
calling 844-512-2921 (toll-free) or 412-317-6671 (international). Please
enter pin number 13687250 to access the replay.

About Park City Group:

Park City Group, Inc. (NASDAQ: PCYG), the parent company of ReposiTrak,
Inc., a compliance, supply chain, and e-commerce platform that partners
with retailers, wholesalers, and their suppliers, to accelerate sales,
control risk, and improve supply chain efficiencies. More information is
available at www.parkcitygroup.com
and www.repositrak.com.

Specific disclosure relating to Park City Group, including management’s
analysis of results from operations and financial condition, are
contained in the Company’s annual report on Form 10-Q for the fiscal
quarter ended December 31, 2018 and other reports filed with the
Securities and Exchange Commission. Investors are encouraged to read and
consider such disclosure and analysis contained in the Company’s Form
10-K and other reports, including the risk factors contained in the Form
10-K.

Non-GAAP Financial Measures

While this press release does not include non-GAAP financial measures,
the financial presentation below contains certain financial measures
defined as “non-GAAP financial measures” by the Securities and Exchange
Commission, including non-GAAP EBITDA and non-GAAP earnings per share.
These measures may be different from non-GAAP financial measures used by
other companies. The presentation of this financial information, which
is not prepared under any comprehensive set of accounting rules or
principles, is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with generally accepted accounting principles.
Reconciliations of these non-GAAP financial measures to the nearest
comparable GAAP measures will be provided upon the completion of the
Company’s annual audit.

Non-GAAP EBITDA excludes items such as impairment charges, allowance for
doubtful accounts, non-cash stock-based compensation and other one-time
cash and non-cash charges. Non-GAAP EPS excludes items such as non-cash
stock-based compensation, amortization of acquired intangible assets and
other one-time cash and non-cash charges. The Company believes the
non-GAAP measures provide useful information to both management and
investors by excluding certain expenses, gains and losses or net
purchases of property and equipment, as the case may be, which may not
be indicative of its core operation results and business outlook.
Because Park City Group has historically reported certain non-GAAP
results to investors, the Company believes that the inclusion of
non-GAAP measures in the financial presentation below allows investors
to compare the Company’s financial results with the Company’s historical
financial results reported using non-GAAP financial measures, as well as
with the financial results reported by others.

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”) 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’s 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.

Park City Group, Inc.
INCOME STATEMENT
					3 Months Ended														6 Months Ended
FY ENDS June						12/31/18					12/31/17				% Chg.					12/31/18					12/31/17				% Chg.
Total Revenues					$	5,565,237				$	5,724,706				(3	%)			$	11,507,231				$	10,436,871				10	%
Operating Expenses
	Cost of Services and Product Support					(1,270,659	)				(1,426,351	)			(11	%)				(2,999,185	)				(2,844,364	)			5	%
	Sales and Marketing					(1,139,855	)				(1,621,149	)			(30	%)				(3,047,879	)				(3,207,089	)			(5	%)
	General and Administrative					(1,326,735	)				(1,140,085	)			16	%				(2,470,046	)				(2,275,855	)			9	%
	Depreciation and Amortization					(144,030	)				(163,825	)			(12	%)				(289,405	)				(322,628	)			(10	%)
	Total Operating Expenses					(3,881,279	)				(4,351,410	)			(11	%)				(8,806,515	)				(8,649,936	)			2	%
Operating Income					$	1,683,958				$	1,373,296				23	%			$	2,700,716				$	1,786,935				51	%
	Interest Income					54,773					–				–					89,897					–				–
	Interest (Expense)					(5,623	)				(7,696	)			(27	%)				(16,096	)				(29,887	)			(46	%)
	Income Before Taxes					1,733,108					1,365,600				27	%				2,774,517					1,757,048				58	%
	Provision for Taxes					(47,500	)				(15,116	)			NM					(122,500	)				(75,714	)			62	%
Net Income					$	1,685,608				$	1,350,484				25	%			$	2,652,017				$	1,681,334				58	%
	Dividends on Preferred Stock					(146,611	)				(162,966	)			(10	%)				(293,222	)				(280,126	)			5	%
Net Income to Common Shareholders					$	1,538,997				$	1,187,518				30	%			$	2,358,795				$	1,401,208				68	%
GAAP EPS, Basic					$	0.08				$	0.06				27	%			$	0.12				$	0.07				65	%
GAAP EPS, Diluted					$	0.08				$	0.06				29	%			$	0.12				$	0.07				67	%
Weighted Average Shares, Basic						19,822,000					19,487,000									19,804,000					19,455,000
Weighted Average Shares, Diluted						20,375,000					20,338,000									20,474,000					20,340,000

Park City Group, Inc.
RECONCILIATION OF NON-GAAP ITEMS
					3 Months Ended														6 Months Ended
FY ENDS June						12/31/18					12/31/17				% Chg.					12/31/18					12/31/17				% Chg.
Net Income					$	1,685,608				$	1,350,484				25	%			$	2,652,017				$	1,681,334				58	%
Adjustments:
	Depreciation and Amortization					144,030					163,825				(12	%)				289,405					322,628				(10	%)
	Interest Expense (Income)					(49,150	)				7,696				NM					(73,801	)				29,887				NM
	Provision for Taxes					47,500					15,116				214	%				122,500					75,714				62	%
	Other (Incl. Bad Debt Exp.)					100,000					145,050				(31	%)				200,000					195,050				3	%
	Stock Compensation Expense					227,585					189,785				20	%				323,273					388,099				(17	%)
Adjusted EBITDA					$	2,155,573				$	1,871,956				15	%			$	3,513,394				$	2,692,712				30	%
Net Income					$	1,685,608				$	1,350,484				25	%			$	2,652,017				$	1,681,334				58	%
Adjustments:
	Stock Compensation Expense					227,585					189,785				20	%				323,273					388,099				(17	%)
	Acquisition Related Amortization					32,850					32,850				–					65,700					65,700				–
	Adjusted non-GAAP Net Income					1,946,043					1,573,119				24	%				3,040,990					2,135,133				42	%
	Preferred Dividends					(146,611	)				(162,966	)			(10	%)				(293,222	)				(280,126	)			5	%
	Adjusted non-GAAP Net Income
	to Common Shareholders				$	1,799,432				$	1,410,153				28	%			$	2,747,768				$	1,855,007				48	%
Adjusted Non-GAAP EPS					$	0.09				$	0.07				27	%			$	0.13				$	0.09				47	%
Weighted Average Shares, Diluted						20,375,000					20,338,000									20,474,000					20,340,000

Park City Group, Inc.
CONSOLIDATED BALANCE SHEET
										Period Ended
FY ENDS June											12/31/18					6/30/18
Assets
Current Assets:
	Cash									$	16,682,282				$	14,892,439
	Receivables, Net Allowances										4,588,663					4,222,348
	Contract Asset (Current Portion of Unbilled)										2,727,921					3,502,287
	Prepaid Expenses and Other Current Assets										1,028,417					1,116,387
	Total Current Assets									$	25,027,283				$	23,733,461
Property and Equipment, Net										$	1,725,221				$	1,896,348
Other Assets:
	Deposits and Other Assets										18,691					18,691
	Contract Asset (Long-Term Portion of Unbilled)										3,175,125					1,194,574
	Investments										477,884					477,884
	Customer Relationships										854,100					919,800
	Goodwill										20,883,886					20,883,886
	Capitalized Software Costs, Net										119,895					168,926
	Total Other Assets									$	25,529,581				$	23,663,761
Total Assets										$	52,282,085				$	49,293,570
Liabilities
Current Liabilities:
	Accounts Payable									$	838,151				$	1,490,434
	Accrued Liabilities										1,336,526					745,694
	Contract Liability (Deferred Revenue)										2,671,296					2,335,286
	Lines of Credit										4,660,000					3,230,000
	Current Portion of Notes Payable										36,768					188,478
	Total Current Liabilities									$	9,542,741				$	7,989,892
Long-Term Liabilities:
	Notes Payable, Less Current Portion										258,209					1,592,077
	Other Long-Term Liabilities										–					7,275
	Total Long-Term Liabilities									$	258,209				$	1,599,352
Total Liabilities										$	9,800,950				$	9,589,244
Shareholder Equity
	Series B Preferred									$	6,254				$	6,254
	Series B-1 Preferred										2,124					2,124
	Common Stock										198,395					197,738
	Additional Paid-In Capital										77,129,244					76,711,887
	Accumulated Deficit										(34,854,882	)				(37,213,677	)
Total Shareholder Equity										$	42,481,135				$	39,704,326
Total Liabilities and Shareholder Equity										$	52,282,085				$	49,293,570

Park City Group, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
											6 Months Ended
FY ENDS June											12/31/18					12/31/17
Cash Flows From Operating Activities:
	Net Income										$	2,652,017				$	1,681,334
	Adj. to Reconcile Net Income to Net Cash from Operating Activities:
		Depreciation and Amortization										289,405					322,628
		Bad Debt Expense										200,000					195,050
		Stock Compensation Expense										323,273					388,099
		Decrease (Increase) in Accounts Receivables										208,051					(2,046,797	)
		Decrease (Increase) in LT Receivables, Prepaid Expenses and Other Assets										(1,892,581	)				621,015
		Increase (Decrease) in Accounts Payable										(652,283	)				73,931
		Increase (Decrease) in Accrued Liabilities										366,966					74,383
		Increase (Decrease) in Deferred Revenue										335,734					58,970
	Net Cash From (Used In) Operating Activities										$	1,830,582				$	1,368,613
Cash Flows From Investing Activities:
	Capitalization of Software Costs											–					(111,241	)
	Purchase of Property and Equipment											(3,547	)				(177,643	)
	Net Cash From (Used In) Investing Activities										$	(3,547	)			$	(288,884	)
Cash Flows From Financing Activities:
	Net Increase in Line of Credit											1,430,000					–
	Proceeds from Employee Stock Plans											–					119,790
	Proceeds from Exercise of Options and Warrants											164,997					–
	Proceeds from Issuance of Notes Payable											–					56,078
	Dividends Paid											(146,611	)				(325,931	)
	Payments on Notes Payable and Capital Leases											(1,485,578	)				(165,164	)
	Net Cash From (Used In) Financing Activities										$	(37,192	)			$	(315,227	)
Net Increase (Decrease) in Cash											$	1,789,843				$	764,502
	Cash at Beginning of Period											14,892,439					14,054,006
Cash at End of Period											$	16,682,282				$	14,818,508

Contacts

Investor Relations:
Todd Mitchell, CFO
435-645-2216
investor-relations@parkcitygroup.com
Or
Hayden
IR
Rob Fink / Brett Maas
646-415-8972 / 646-536-7331
PCYG@haydenir.com