Company Overview
ReposiTrak Inc (TRAK) is a leading provider of compliance, supply chain, and e-commerce solutions that are transforming the way the food industry operates. Founded in 1990, the company has established itself as a pioneer in developing innovative technologies that enable retailers, wholesalers, and their suppliers to accelerate sales, control risk, and improve supply chain efficiencies.
History and Development
The company’s origins can be traced back to 1990, when it was established as a software development and professional services business. Initially, ReposiTrak focused on providing cloud-based applications and services that addressed e-commerce, supply chain, food safety, compliance, and traceability activities. The company’s principal customers were household name multi-store food retail chains and restaurants, including their suppliers, branded food manufacturers, food wholesalers and distributors, and other food service businesses.
In its early years, ReposiTrak concentrated on developing compliance management solutions to help customers vet suppliers and reduce regulatory, legal, and criminal risks from their supply chain partners. These solutions ensured compliance with food safety regulations, such as the Food Safety Modernization Act of 2011 (FSMA). The company’s technology provided a way for customers to track and manage compliance documentation and data effectively.
As the company grew, it expanded its offerings to include supply chain solutions that helped customers more efficiently manage interactions with their suppliers. Additionally, ReposiTrak developed traceability solutions to comply with federal regulatory requirements for traceability under FSMA. By leveraging its established platform and expertise in supply chain management, the company provided customers with a cost-effective way to capture and share key data elements required for traceability as products moved through the supply chain.
Throughout its development, ReposiTrak faced challenges in transitioning its customers from manual, paper-based processes to its cloud-based automation tools. Many of its customers lacked robust IT infrastructure, which posed a significant hurdle. However, the company successfully developed innovative solutions that made it easier for customers, even those without dedicated IT resources, to adopt its traceability and compliance management offerings. This adaptability allowed ReposiTrak to maintain its market leadership position and continue serving the evolving needs of the food industry.
In 2023, the company effected a change of its corporate name from Park City Group, Inc. to ReposiTrak, Inc. This strategic move was a reflection of the company’s growing prominence in the food traceability and supply chain management space, as it sought to better align its brand with its core business initiatives.
Product Offerings
ReposiTrak’s suite of offerings is centered around three key application suites: ReposiTrak Compliance Management, ReposiTrak Traceability Network, and ReposiTrak Supply Chain Solutions. These solutions work in tandem to help its customers manage compliance requirements, ensure traceability throughout the supply chain, and streamline their interactions with suppliers.
The Compliance Management solutions assist customers in vetting suppliers and reducing regulatory, legal, and criminal risks by ensuring their supply chain partners are compliant with food safety regulations, such as the Food Safety Modernization Act (FSMA). This segment provides a way for customers to ensure their suppliers are meeting the necessary regulatory requirements.
The Traceability Network (RTN) helps customers comply with federal traceability requirements and provides an efficient way to capture and share key data elements as products move through the supply chain. It offers an easy-to-use solution to manage the capture and sharing of key data elements (KDEs) as products move from farm to shelf, addressing the increasing regulatory demands for traceability in the food industry.
ReposiTrak’s Supply Chain Solutions further enhance the company’s offerings by enabling customers to more effectively manage their supplier relationships, source new products, and optimize their supply chain operations. This segment provides greater flexibility in sourcing products by enabling customers to choose new suppliers and integrate them into their supply chain faster and more cost-effectively. It also helps customers manage these supplier relationships more efficiently, enhancing revenue while lowering working capital, labor costs, and waste.
This integrated approach has proven to be a powerful differentiator in the market, as the company’s customers can leverage a comprehensive suite of tools to address their diverse business needs.
Financial Performance
ReposiTrak’s financial performance has been solid, demonstrating consistent growth and profitability. For the fiscal year ended June 30, 2024, the company reported revenue of $20.45 million and net income of $5.96 million. The company generated operating cash flow of $6.96 million and free cash flow of $6.89 million during this period.
In the most recent quarter (Q1 2025), ReposiTrak reported revenue of $5.44 million, an 8% increase from the same period in the prior year. This growth was driven primarily by the traceability solutions, as the industry responds to increased regulatory requirements and food safety concerns. Net income for the quarter was $1.67 million, a 21% increase compared to the same period in 2023. This resulted in diluted earnings per share of $0.08, up from $0.07 in the prior year quarter.
The company’s recurring revenue, which accounted for 98% of total revenue in Q1 2025, has been a key driver of success, highlighting the stickiness of customer relationships and the scalability of the business model. The slight decrease from 99% in the prior quarter was due to higher setup fees associated with new customer onboarding.
Cost of services and product support increased 12% to $859,220, as the company invested in automating onboarding and support services to handle the growing demand for its traceability offerings. Sales and marketing expenses rose 2% to $1.53 million, while general and administrative expenses increased 1% to $1.29 million. Despite these increases, the company generated $1.48 million in income from operations, up 23% year-over-year.
Liquidity and Cash Flow
As of September 30, 2024, ReposiTrak had a strong cash position of $25.79 million, positioning the company for continued growth and investment in its technology platform. The company’s financial strength is further evidenced by its low debt-to-equity ratio of 0.005, indicating minimal leverage.
ReposiTrak’s liquidity ratios are also impressive, with both the current ratio and quick ratio standing at 6.73, demonstrating the company’s ability to meet its short-term obligations comfortably. It’s worth noting that in March 2024, the company terminated its $10 million revolving credit facility with U.S. Bank N.A., as it had no outstanding debt and sufficient cash reserves to fund its operations and growth initiatives.
The company’s strong cash position and consistent operating cash flow generation provide a solid foundation for ongoing operations and future growth initiatives. In Q1 2025, ReposiTrak generated operating cash flow of $1.87 million and free cash flow of $1.87 million, both representing a 23% increase year-over-year.
Recent Developments and Future Outlook
ReposiTrak has faced some challenges in recent years, including the impact of the COVID-19 pandemic on its operations and the need to navigate a rapidly evolving regulatory landscape. However, the company has demonstrated its resilience by adapting its strategies and investing in technology to maintain its competitive edge.
One of the most significant developments in ReposiTrak’s recent history has been the growing importance of food traceability in the industry. The implementation of FSMA 204, which mandates the tracking of key data elements for certain high-risk food products, has created a surge of demand for the company’s Traceability Network solutions.
In response to this regulatory change, ReposiTrak has accelerated its onboarding of new suppliers to the RTN, with the network now boasting over 4,000 participating companies. This rapid growth underscores the critical role that ReposiTrak is playing in helping the industry meet the FSMA 204 requirements, as well as the increasing importance of traceability more broadly.
Looking ahead, the company remains focused on driving continued growth in its Traceability Network offerings, while also maintaining momentum in its Compliance Management and Supply Chain Solutions. ReposiTrak expects the contribution from traceability to increase sequentially throughout fiscal 2025 and continue to accelerate as the January 2026 FDA deadline approaches. In the first fiscal quarter of 2025, traceability contributed 6% of recurring revenue, and this contribution is expected to accelerate throughout the fiscal year.
The company has a strong pipeline of customers waiting to be onboarded over the next 18 months, representing more than $10 million in additional annual recurring revenue. ReposiTrak is confident that the combination of traceability growth and its legacy services will enable it to double its annual recurring revenue run rate over the next several years, while maintaining 80% gross margins and driving higher earnings per share and increased operating cash flow.
One area of particular focus for the company is the ongoing automation and optimization of its onboarding processes for new traceability customers. By streamlining these procedures, ReposiTrak is able to onboard suppliers more efficiently, ultimately driving faster revenue growth and improving the customer experience.
The company’s commitment to innovation is further evidenced by its focus on developing advanced analytics and data-driven insights to help its customers make more informed decisions. As the food industry continues to grapple with complex supply chain challenges and increasing regulatory demands, ReposiTrak’s ability to provide data-driven solutions will be a key competitive advantage.
Despite the challenges posed by the COVID-19 pandemic, ReposiTrak has demonstrated its resilience and ability to adapt to changing market conditions. The company’s strong financial performance, with steady revenue growth and profitability, underscores the strength of its business model and the value proposition it offers to its customers.
Looking ahead, ReposiTrak’s future appears promising, as the company continues to capitalize on the growing importance of food traceability and regulatory compliance. With its innovative technology, strong customer relationships, and disciplined approach to growth, ReposiTrak is well-positioned to maintain its leadership position in the industry and drive long-term value for its shareholders.
The company has also reiterated its goal to redeem and retire all preferred shares within the next two years, demonstrating its commitment to simplifying its capital structure and enhancing shareholder value. As ReposiTrak continues to execute on its growth strategy and capitalize on the increasing demand for its traceability solutions, it remains well-positioned to achieve its ambitious growth targets and cement its position as a leader in the food supply chain technology industry.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.