Acorn Energy, Inc.

Good day. Thank you for holding, and welcome to ACORN's fourth quarter and year-end 2018 conference call. All participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to hand the conference over to Mr. Bill Jones, Investor Relations. Please go ahead.

Thank you, and welcome everyone to today's conference call. First, 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 performance of OmniMetrics and ACORN in 2019 and future years is subject to factors such as risks associated with executing its 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 to support growth. Such forward-looking statements are based on management's beliefs as well as assumptions made, which are based upon information currently available to management pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There is no assurance that ACORN or OmniMetrics will be able to achieve their growth goals in 2019, nor in future years. The company also undertakes no obligation to disclose any revision to any forward-looking statements to reflect events or circumstances after the date made. A complete discussion of the risks and uncertainties that may affect the company is included in risk factors on ACORN's Form 10-K, as filed with the Securities and Exchange Commission. With that, I'll hand the call over to Jan Loeb. Jan?

Thank you, Bill, and thank you all for joining us today. I'll give some brief overall remarks. Tracy Clifford, our CFO, will provide financial highlights, and then Walter Czarnecki, CEO of Omnimetric, will provide color on growth trends and opportunities for Omnimetrics. First, I want to say that our Omnimetrics operating company achieved its first full year of positive EBITDA and positive cash flow. On the growth side, we tend to look at cash basis sales, which is revenue plus or minus change in deferred revenue, to gauge the underlying growth of the business. We had given guidance for cash basis sales of $6 million in 2018 versus $5.1 million in 2017. And through the first three quarters of 2018, we were tracking on this pace. In the fourth quarter of 2018, cash basis sales were relatively flat versus Q4 2017 at $1.5 million. And as a result, we had full year 2018 cash basis sales of $5.6 million, an increase of approximately 10%, but short of our $6 million goal. A number of factors contributed to the shortfall in the fourth quarter, most notably was growing market and economic uncertainty, which seemed to temporarily freeze energy industry expenditures, particularly in December, which is typically our strongest month each year. Despite the fourth quarter weakness, we have seen activity return to more typical levels and remain bullish on the opportunity for Omnimetrics to continue to grow organically at 20% per year on average. Many of you know that Omnimetrics monitors, manages, and protects high-value industrial assets, primarily standby generators and pipelines, currently utilizing its proprietary remote monitoring and control technology and related services. Our solutions deliver substantial productivity gains and cost reductions to customers versus the labor-intensive alternative, which involves sending personnel to conduct regular physical on-site inspections, often in remote areas. The Omnimetrics business consists of hardware monitoring equipment sales for new installations, recurring annual monitoring service fees, as well as custom reporting fees. The monitoring side of the business offers a very attractive combination of high gross profit margins and good revenue visibility from recurring service fees. In accordance with GAAP, we record our contract revenue ratably over the estimated life of a service contract and our hardware revenue over the expected life of the hardware, which is currently three years. Tracy will discuss the financials, but all of Acorn's revenue currently comes from the Omnimetrics business, which remains on a solid growth trajectory with a promising outlook. Two years ago, Omnimetrics generated an operating loss of $1.2 million, which improved to a loss of $783,000 in 2017, and further narrowed to 116,000 in 2018. With continued growth and cost discipline, OmniMetrics was able to generate a slight operating profit in the second half of 2018, and we expect the business to be both profitable and cash flow positive in 2019. Walter can speak more to the growth opportunities we see for OmniMetrics. Generally speaking, there is increasing awareness by industrial customers of potential productivity increases lower operating costs, and risk management benefits that can be realized with IoT solutions such as our remote monitoring and control technology. Early in 2018, we sold our remaining interest in Israel-based DSIT to focus on the Onometrics IoT business. In Q3, we recouped approximately $3,000 in cash from Israel related to withholding taxes on the initial sale of a portion of our DSIT investment in 2016. and we recorded a gain of $222,000 related to this payment. The cash is being held in our account in Israel until final review by the Israeli taxing authorities of tax returns through 2018, which we expect to be concluded by year-end 2019. Finally, I want to update investors regarding our efforts in pursuing M&A opportunities that we have mentioned on prior calls. In recent months, we have evaluated several candidates, but we have yet to conclude an acquisition that is accretive and would help us build shareholder value. We will continue to look for accretive opportunities that offer value to our stockholders, but our intent is to only complete a complementary acquisition that would allow us to scale our business, accelerate our progress towards sustained profitability, and potentially allow the company to benefit from over $60 million in operating loss carry forwards. In the meantime, we plan to make investments in Omnimetrics, that we believe can facilitate accelerated organic growth and expand our product offerings and customer base. Now, I'd like to turn the call over to our CFO, Tracy Clifford, to go over financial highlights. Tracy?