Good day, ladies and gentlemen. Welcome to the Acorn Energy Third Quarter Conference Call [Operator Instructions]. As a reminder, today's conference is being recorded. I would like now to turn the conference over to Tracy Clifford, CFO of Acorn Energy and COO of OmniMetrix Subsidiary. Please go ahead.

Thank you, and welcome, everyone, to today's conference call. As a reminder, many of the statements made in today's prepared remarks or in response to your questions may be forward-looking. These statements are subject to various risks and uncertainties. For example, the operating and financial performance of the company in 2020 and future years is subject to factors such as risks associated with disruptions to business operations and customer demand, resulting from the impact of the COVID-19 pandemic, executing the company's operating strategy, maintaining high renewal rates, growing its customer base, changes in technology, changes in the competitive environment, financial and economic risks as well as having access to sufficient capital for growth. Forward-looking statements are based on management's beliefs as well as assumptions made using information currently available to management pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are no assurances that Acorn or OmniMetrix will be able to achieve their growth goals in 2020 nor in future years. The company also undertakes no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made. A full discussion of the risks and uncertainties that may affect the company is included in the Risk factors on Acorn's Form 10-K as filed with the Securities and Exchange Commission. I'll now hand the call over to Jan Loeb, CEO of Acorn. Jan?

Thank you, Tracy, and good morning to those joining our call. Just to review the financials from a high level, the company achieved 9% year-over-year revenue growth in the third quarter with high-margin recurring monitoring services revenue increasing 15%. This higher-margin revenue drove a 17% increase in gross profit to $1.077 million in the quarter from $922,000 in Q3 2019, allowing us to substantially reduce our operating loss to $23,000 from $121,000 in Q3 '19. Our cash balance increased by $206,000 to $1.966 million. Given our performance and trends, we believe we have laid the groundwork to generate positive cash flow and reached consolidated net profitability in 2021. This is particularly important milestone for Acorn, considering our over $70 million of net operating loss tax carryforwards, which would largely shield corporate income from federal and state taxes, providing a substantial benefit to future net income and cash flow generation. Once again, I would like to take the opportunity to thank the entire OmniMetrix team for all of their efforts over the past several months as we have worked through the challenges of COVID-19. We continue to adhere to CDC guidelines in our facility and at client sites for the health and safety of our employees and customers. While we have remained fully operational, without any employee furloughs, we did endure significant halt in business development dialogues, particularly within our Corrosion Protection, or CP business, as large gas pipeline operators suspended vendor meetings. Suspension of new business activity in this segment, which tends to have a longer sales cycle than power generation, has, of course, negatively impacted our ability to sell new monitoring product sales and to add new monitoring endpoints. The good news is, in CP, we are beginning to see reengagement in meetings and sales dialogues. Revenue in this…

Thanks, Jan. Today, we released our third quarter and nine months ended September 30, 2020, results in a press release this morning, and we also filed our 10-K with the SEC. I will review some of the highlights from our GAAP basis results as reported and as compared to the prior year period, Q3 '19. OmniMetrix's Q3 revenue increased 9% over Q3 '19 to $1.5 million on strength in our largest power segment, Power Generation, which increased 16% or $172,000. The increase was partially offset by a decline on a GAAP basis of $41,000 or 14% in our smaller CP segment. Gross profit grew 17% to $1.077 million in Q3 '20 versus $922,000 in Q3 '19. The increase in gross profit was principally attributable to the mix of revenue that included more monitoring, which is a significantly higher gross margin than hardware revenue. Consequently, gross margin improved to approximately 71% in Q3 '20 versus 67% in Q3 '19. Operating expenses increased 6% at OmniMetrix to $867,000 in Q3 '20 over the prior year period, primarily due to an increase in personnel costs, spin related to IT infrastructure and R&D investments for the new product development. In Q3, OmniMetrix provided performance-based salary increases to employees, and the sales team resumed travel to customer prospects that were open to receiving outside vendor meetings. We anticipate a higher expense trend to continue in Q4 for similar reasons as to our continuing investments in the company. With gross profit growing faster than operating costs, OmniMetrix reported Q3 '20 operating income of $210,000 or nearly double the prior year period operating profit of $106,000. At the corporate level, G&A expenses increased by a nominal amount of 3% to $233,000 in Q3 versus $227,000 in Q3 '19, as a result of increased professional fees that remained…

[Operator Instructions] Our first question comes from Skylar Christian [ph], a Private Investor.

Just a few quick questions regarding the dealers that sell your products. So I was wondering if you would know how many dealers currently carry your products. And then I guess furthering that, do you have any sort of idea of what proportion of those dealers that you sell to try and include the cost of monitoring into the cost of a new generator?

So Skylar, I'm assuming you're talking only in the PG business, because that's where we deal with the dealers. And if I had to take a rough guess, I would say, we have approximately 120 dealers who use our product. Some of them on the lower end, and some use them all the time. Some dealers are bigger. Some dealers are smaller. We find that the dealers usually wrap our monitoring fee within a maintenance package. So depending on how a person buys their generator. Some people buy their generator, just a generator, and then some people buy the generator on terms, and some people buy the generator with a maintenance package. And we find that most people buy with a generator with the maintenance package because you're spending that kind of money on a system, you generally want to make sure that it's running and serviced by the dealer. And so we find that the monitoring is usually wrapped up within the maintenance contract.

So I guess, does that imply that -- so for example, or I guess, whenever our customer goes to the dealers, typically, does the customer not normally -- I guess, are they given the option typically to choose the monitoring? Or is it just typically built-in automatically when the customer approaches the dealer to want to purchase a generator if you would know that?

Again, really totally depends on the dealer. Since the customer gets the alert as well, certainly, the customer is aware of the monitoring service. The interesting thing about it is that our monitoring service is also of benefit to the dealer, in that the dealer gets important information from the monitor as it relates to what might be problematic with the generator in advance of the problem happening. And so therefore, it's a cost savings for the dealer to have a monitor on in order that he has efficient truck rolls and the right technicians on the right problem. So it really depends on the dealer, but it's a benefit to all parties.

[Operator Instructions] Our next question comes from Richard Sousa [ph], a private investor.

I just had -- just a set of one quick question on the OmniPro Software. You have been talking about it for a few quarters. Just wanted to get a better sense of just any potential competitors? And why you chose to do it? And what kind of traction you're getting?

Richard, literally, we just launched it a week ago, so I can't tell you, we've had any traction. We've obviously had it in some beta sites with some of our bigger customers, and have gotten positive feedback, but positive feedback does not necessarily translate into revenue as fast as we all would like it to be. We felt and we had gotten some feedback from our customers that the OmniView, which is our -- the product that we had prior to OmniPro, was a little hard to use and deal with. And we felt that upgrading OmniView, which has been in use for many, many years, it's time had come. And so that's why we invested significantly into OmniPro. So I think it was customer demand on a new system that really drove us to make that investment. I think it's gotten good feedback. I think there is a competitive system in the marketplace. I think that the competitive system, which is very good, is hard to handle. And I think our use of handling and our web interface is much better than that of the competitors. But in the business, it's competition. And I don't expect huge numbers coming in tomorrow. It will be a sales cycle, just like every one of our other products is.

At this time, I would like to turn the conference back to Jan Loeb for any closing remarks.

Thank you. While the current environment remains challenging, we are well positioned from a balance sheet and capital standpoint to navigate uncertainties and to be well positioned for 2021. We will continue to look for growth opportunities in the markets we serve, and adjacent to our complementary opportunities. We are open to external opportunities such as tuck-in acquisition that may be accretive to our profitability and to shareholder value. We will also continue to make investments and product development to meet market demand where we see it. Again, I thank you for your interest in Acorn. We sincerely appreciate the support of our shareholders, and I'm happy to speak with investors about the company. Please contact our Investor Relations with any questions or to set up a call. Thank you again for your time today. Operator, I believe that will conclude this call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.