N@N

Park City Group Secures Bank Line of Credit to Complete Acquisition of Prescient Applied Intelligence

^{Published on 2008-12-02 07:11:56 - Market Wire}
 

PARK CITY, Utah--([ BUSINESS WIRE ])--[ Park City Group, Inc ]. (OTCBB:[ PCYG ]), a developer of patented retail supply chain solutions and services, today announced that it has secured a $3.0 million line of credit facility with US Bank as part of the previously announced acquisition of Prescient Applied Intelligence (OTCBB:[ PPID ]). The acquisition is financed with a combination of bank financing, operating capital, loans from Park City Group's CEO and two of its Board members, and an investment made by a group of investors from both Park City Group and Prescient's existing stockholders. As a result, it is anticipated that the completion of the $3.0 million bank credit facility will eliminate the need for the Company to seek outside equity financing to complete the transaction.

Upon customary review by the Securities and Exchange Commission (SEC) and Prescient shareholder approval, the Company will purchase the remaining outstanding common and preferred shares of stock of Prescient. Once completed, Prescient will merge with a newly formed subsidiary of Park City Group, becoming a wholly owned operating subsidiary. Proxy material has recently been filed with the SEC.

Upon completion of the merger, anticipated during the first calendar quarter, this accretive acquisition is expected to provide:

• Significant increase in recurring subscription based revenues
• Increase in Park City Group total revenues from $3.3 million to $12 million
• Substantially increased EBITDA to approx. 15% of revenue
• Synergies of product and service offerings
• Strong future revenue growth opportunities within the combined customer base, and
• Economies of scale in business operations and development costs
  • Identified $4 million in annualized cost reduction measures
    • Of which $3 million have already been taken and will be reflected over the next several quarters

As announced in September, [ Randall K. Fields, CEO ] said, "‘This acquisition represents important opportunities for financial gains, operational efficiencies and revenue growth and represents a game changing milestone in the growth and development of Park City Group. Our penetration of the top 10 grocery retailer customers has leaped from four to seven, and now includes hundreds of the top suppliers in the U.S.'"

Fields continued, "When we entered into this acquisition we expected that it would be necessary to consummate an equity financing in order to complete the acquisition. However, due to accelerating cash flow and this bank line of credit, no equity raise will be necessary or is contemplated.

"Although the present economy is challenging, unlike some other business segments, the segment we target (supermarket and convenience store retailers) is performing well.

"We have already completed roughly 80% of our integration plan with favorable expense trends anticipated to materialize in the second quarter of fiscal 2009," said Fields. "We are introducing the new company and its capabilities to our customers. Through those activities we have developed numerous opportunities for the expansion of our SCPL and Scan Based Trading (SBT) offerings. Additionally, we have restructured our SCPL sales engagement process to include our successful Opportunity Identification program for all Prescient prospects so that we identify for all of our customers what the financial gain will be by engaging our solutions and services," Fields concluded.

Park City Group, a developer and marketer of patented solutions and services which enable retailers and suppliers to work collaboratively as strategic partners to improve profits, efficiencies, and customer service, reported revenues of $3.3 million for the year ended June 30, 2008. Prescient Applied Intelligence, a leading provider of supply chain and advanced commerce solutions for retailers and suppliers, reported revenue of $8.6 million for the trailing 12 months ending June 30, 2008.

Together, Park City Group and Prescient will provide a complementary, comprehensive and integrated range of offerings for inventory management, labor utilization, vendor managed inventory, and scan-based trading solutions to grocery, convenience store and specialty retailers, and consumer product manufacturers worldwide. Current customers of Prescient include Meijer, Kroger, Sunny Delight Beverage Company, Russell Stover Candies, and Crayola. Park City Group counts The Home Depot, SuperValu, Tesco-Lotus, Circle K, WaWa, Kellogg's and Williams Sonoma among its present customers.

About Park City Group

Park City Group, Inc. develops and markets patented computer software and consulting services that help retailers and their suppliers to increase sales while reducing inventory and labor costs -- the two largest, controllable expenses. The technology has its genesis in the operations of Mrs. Fields Cookies, co-founded by Randy Fields, chief executive officer of Park City Group. Industry-leading customers such as The Home Depot, Victoria's Secret, The Limited, Anheuser Busch Entertainment and Tesco Lotus benefit from Park City Group software. To find out more about Park City Group, please visit [ www.parkcitygroup.com ].

About Prescient Applied Intelligence

Prescient, founded in 1985, is a leading provider of supply chain and advanced commerce solutions for retailers and suppliers. Prescient's solutions capture information at the point of sale, provide greater visibility into real-time demand and turn data into actionable information across the entire supply chain. As a result, the company's products and services enable trading partners to compete effectively, increase profitability and excel in today's retail business climate. Industry-leading customers like Coors, Domino's Pizza, Meijer, Rite Aid, Sara Lee, Schwan's, SUPERVALU, and Wyeth rely on Prescient for their advanced commerce solutions for both retailers and suppliers. For more information about Prescient, please visit [ www.prescient.com ]. Updata Advisors, Inc. acted as sole financial advisor to Prescient in connection with the proposed merger with Park City.

Statements in this news release 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 for the year ended June 30, 2008 and in any risk factors or cautionary statements contained in the Company's periodic reports on Form 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 release 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.