Acorn Energy, Inc.

Good day, everyone. Thank you for holding, and welcome to Acorn Energy's third quarter 2019 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 Tracy Clifford, CFO. 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 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 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 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 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 risk factors on ACORN's Form 10-K as filed with the Securities and Exchange Commission. Now with that, I'll hand the call over to Walter Zarnacki, CEO of Omnimetrics. Walter?

Thank you, Tracy, and good morning to those joining our call today. During the third quarter, 2019, Omnimetrics again achieved revenue growth, improved gross margins, and a second consecutive quarter of positive operating profits. Q3 revenue rose 4% to $1,386,000, and cash basis sales were $1,614,000, an increase of 8% over the third quarter of 2018. As many of you know, cash basis sales is a performance tracking measure we use to supplement revenue reported in our financial statements. Pursuant to GAAP, we recognize revenue from our hardware sales over three years and typically one year for our monitoring contracts, even though the cash is generally received upfront. Cash basis sales therefore provides visibility on the current level of business that was completed in a period and growth trends. Our power generation division sales on a cash basis grew by 17% over Q3 of 2018, and we remain confident of continued growth at that level or better. In our smaller cathodic protection division, which focuses on monitoring and control of gas pipelines, sales on a cash basis declined by 37%, which we attribute to the impact of turnover in the division's sales staff. In Q3, we completed several new sales hires, which we believe have the potential to return our cathodic protection sales to historical and projected growth rates in coming quarters. Despite the disruption in our CP sales team, we have built a solid pipeline of customer trials in cathodic protection. The new team members are making excellent progress as they have ramped in recent months, and we expect their growth and impact to continue. For example, we currently have four times the number of customer trials in progress than we had at this time last year. Moving to our power generation division, Historically, our business has been favorably impacted by natural disasters that disrupt consumer power systems. The catastrophic fires in California represent the type of disruption that we believe could drive demand for standby generator purchases along with our monitoring services. Historically, California has not been a strong generator market given its relatively mild weather and temperatures. we have seen a meaningful increase in demand for generators and generator monitoring following extreme weather events in the U.S. and Caribbean. As a result, we expect that this unfortunate situation will spur demand in California and neighboring states, and we work to bolster our sales and marketing efforts to pursue these opportunities. I would add that this week I'm in Santa Clara, California, where we exhibited at the IoT Tech Expo, I spoke with several people this week who asked about generator monitoring for fire departments, municipalities, and other applications. Moving to gross margins, our gross margin increased to 66.5% in Q3 from 62.2% in the prior year period. This margin improvement is primarily the result of actions we have taken over recent years to develop and deliver new, innovative hardware and software products that offer both enhanced functionality as well as more efficient, lower-cost designs. As part of our strategy of delivering higher-value, higher-margin, next-generation products, we continue to ship and install more of our HERO2 rectifier monitors and our AirGuard industrial air compressor monitors. These products are meeting and exceeding customer expectations, and we continue to receive very favorable reviews of these products. Regarding market adoption of IoT technology broadly, We continue to see growing awareness, appreciation, and acceptance by industrial companies of the value and reduced cost that IoT solutions can provide, and a steady growth in companies that view IoT as a key priority. To that end, last week I presented an IoT case study of one of our pipeline monitoring clients at AT&T's annual showcase event, the AT&T Business Summit in Dallas. The case study I presented was of a pipeline monitoring client that had found a range of benefits from IoT-based monitoring and controls. In addition to meaningfully lower ongoing monitoring costs enabled by wireless connectivity, they also benefited from 24-7 monitoring of a broader array of factors as well as enhanced reporting capabilities. I'm happy to discuss any of these topics further in the question and answer section. I also encourage you to visit the blog section of the OmniMetrics website where my colleagues and I write on the IIoT market, market adoption, real-world applications, and more on this subject. Navigate to www.omnimetrics.net and click on the blog section at the top of the screen. Please also engage with us on Twitter, where we work to socialize news and customer case studies. Now I'll turn the call over to our CFO, Tracy Clifford, to review financial highlights. Tracy?