Greetings, welcome to the Park City Group Fiscal Fourth Quarter and Year End 2019 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Rob Fink with FNK IR. Mr. Fink, you may begin.

Thank you, operator, and good afternoon, everyone. Thank you for joining us today for Park City Group's fiscal fourth quarter and full year 2019 earnings conference call. Hosting the call today are Mr. Randy Fields, Park City Group's CEO and Chairman; and John Merrill, Park City Group's CFO. Before we begin, I would like to remind everyone that this call could contain forward-looking statements about Park City Group within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not subject to historical facts. Such forward-looking statements are based on current beliefs and expectations and are subject to risks and uncertainties, which could cause actual results to differ materially from forward-looking statement. Such risks are fully disclosed in the company's filings with the Securities and Exchange Commission. The information set forth herein should be considered in light of such risk. Park City Group does not assume any obligation to update information contained in this conference call. Shortly after the market close today, the company issued a press release overviewing the financial results that it will discuss on today's call. Investors can visit the Investor Relations section of the company's website parkcitygroup.com to access this news release. With all that said, I now like to turn the call over to John. John, the call is yours.

Thanks Rob. As many of you know, I served as the CFO of Park City Group from 2006 to 2010. I rejoined the company in May of 2018 [ph] as the Senior Vice President of Finance to drive several strategic initiatives and was later appointed as CFO in May of this year. I'm truly excited to be back with PCG and ReposiTrak. I believe the company has come a long way in 10 years. Back then, we struggled to build a network with limited resources. We had opportunity but less financial strength. My days then were spent convincing prospects and customers we will be here. This is not the case today. The company's balance sheet and financial position today is the strongest it has ever been. Park City Group has a simple story, get retailers and their suppliers compliant, give them visibility to actionable information through our supply chain solutions, and allow the customers to source, vet, and transact business through marketplace. Then repeat, grow the network, and generate cash. We service the largest industry sector of the economy. We have a growing blue-chip customer base. We leverage our regulatory environment that is increasingly complex with no end in sight, and we service an industry where high-volume, low margin customers are facing increasing competition and need help to reduce risk, improve efficiencies, and remain competitive, therein lies are sweet spot. Like Randy, I believe the true measure of a successful business is its earnings power and ability to generate cash flow. With that, I would like to now review the financial results for the quarter and the full year of fiscal 2019. Fiscal fourth quarter revenue was $4.7 million, down from $6.3 million in the same quarter in 2018. The quarter-over-quarter comparison includes $1.5 million of nonrecurring sales that occurred…

Thanks John. The transitioning of the finance team under John’s leadership has been smooth and I’m excited to have him with us again, so a little bit about the year-end review. In fiscal 2019 our strategic priorities were to expand our recurring earning power, increase our cash flow from operations and continue to improve our margins. We accomplished all three and ended the year with our strongest balance sheet, doubled our previous highest cash flow year and deliver the best margins in our company's history. We did this by the way, while making significant investments in marketplace and temporarily sacrificing our top line growth by reducing non-recurring revenue by $2 million. With that, we have once again strengthened our platform to better scale the company for the significant growth that we see ahead of us. During the year we made significant operational progress in each of the three revenue streams. We grow over 13% increase in the size of our total network to more than 340,000 total connections position us for even more growth in the future. Our compliance network incidentally increased by more than 40% to nearly 90,000 facility level connections. For reference sake, remember just a few years ago we had 200. It’s important to keep in mind that the real mission of the business is to scale the network until we touch and connect everyone in the supply chain of U.S. food and then replicate that model broad. As you know, the economic value of each connection varies as a function of the service offered. Over the course of the last few years, we've doubled the size of the network in the company's revenue as a result, this may also actually help you understand why the financial results in any given quarter vary, frankly depending on what…

[Operator Instructions] Our first question is from Thomas Forte, D. A. Davidson. Please proceed with your question.

Great, so two questions. First off, who do you see today as your primary competition for your three main offerings? And how does that change, if at all, during the last fiscal year? And then second, when we think about your marketplace efforts and we think about your ability, we're talking about potentially adding a second customer for the use case on purchasing the products that aren't in your existing supply chain, so to speak how should we think about your -- I guess go-to-market strategy for marketplace for additional use cases beyond that customer?

Okay, so Tom thank you. I think the first question was, in general, who do we see as competitors? Does that – did I get that right?

And has that changed over the last fiscal year, Randy?

It actually hasn't. Our primary, we have two primary competitors. The first is what we call roll your own, meaning a retailer largely because the CIO tells the CEO, he will say, oh, I can do this. We don't need anybody. That's our primary competitor what we call a roll your own strategy. And the other is in action, meaning a retailer could reasonably say to us, “you know, I've got a bunch of issues I'm dealing with, I'm fighting some fires. I like what you're doing. I can't do it now.” So, to a certain extent, our problem is one of getting people to pay attention today to a problem that we can resolve. The row your own thing we've dealt with over many years, and it tends to go away meaning because we are a specialist at what we do. And because we handle the support because we handle the programming, et cetera, there are no retailers that want to run a help desk for their vendors, for example. So ultimately, we've had the experience where very large retailers who at one point did what we do in their minds turned it back over to us. So really, in a sense you could say our competitor is our potential customer. Okay, second question on the use case. Again, I want to say that it's speculative to assume that we will get this second user, but the second user is going to use us as a platform, and interestingly will bring its own vendors to the platform and it will be, if you will, a private label use of our technology much it in a similar sense to our largest customer who's doing this, but they would be paying, in fact a recurring annual fee if they proceed with…

If I may one quick, one quick follow-on question. So, when you talk about your next customer will be an existing customer adding another service, is that also in reference to marketplace or is that in reference to your other services?

Both, let me want to. And again, I apologize because sometimes I use a lot of words, and it doesn't make it clearer. We have a huge opportunity with our existing customers with existing products, meaning we're not, we don't occupy 100% of the TAM with each customer for the product that they've bought. Some have 300%, 400%, or 500% growth potentials in revenue, with a full penetration. At the same time, we have opportunities for cross selling the customers to other product areas. I mentioned in the case of AWG, they started out as a compliance customer, and honestly it builds confidence. They knew that we are a company that takes care of its customers that if it says it's going to perform, it does perform. So that gave us a leg up when we went to them with our supply chain activity. So, in other words, we believe the missing ingredient in the universe of technology vendors is technology vendors that you can trust. Five years ago, don't hold me to the exact number this company had around 600 named customers, 600. Today, we have 23,000 named customers. I suggest that if our Tier-2 initiative is successful, and certainly we believe it will be, it will be somewhere mid-30s, 30,000 or 40,000 named customers, wow! Each one of those, if we continue with our maniacal devotion to taking care of them, which we do, not only does our loss rate stay at absurdly low levels, but our ability to upsell and cross sell gets better and better. So we feel very good about the cross selling opportunities, and the expansion opportunities of the same product to our existing customers, both of those.

We have reached the end of the question-and-answer session. And now I will now turn the call back over to Randy Fields for closing remarks.

Okay, thank you. Appreciate you all taking the time to hear about our quarter in the year. And we are as optimistic as we've ever been about our prospects. Again, our focus obviously is going to be on the recurring revenue. And I think all of us will be very pleased with how this year turns out. So thanks for taking the time. Bye-bye.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.