Good day, ladies and gentlemen. And welcome to Park City Group's Quarter One 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) And as a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Dave Mossberg. You may begin.

Thank you, Michelle. Before we begin, we will be referring to today's earnings release, which can be downloaded from the Investor Relations page of the company's website at www.parkcitygroup.com. This conference 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 historical fact. Such forward-looking statements are based upon the current belief and expectation of Park City Group's management and are subject to risk and uncertainties, which could cause actual result to differ from the forward-looking statements. Such risks are more fully discussed 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 the information contained in this conference call. Throughout today's conference call, we may be referring to both GAAP and non-GAAP financial results, including the terms free cash flow, EBITDA, adjusted EBITDA, net debt, net income loss and earnings per share, which are non-GAAP terms. We believe these non-GAAP terms are useful financial measure for our company primarily because of the significant non-cash charges in our operating statement. There is a reconciliation of non-GAAP results in earnings release and on the Investor Relations section of our website. Our speakers today will be Randy Fields, Park City Group's Chairman and CEO; and Ed Clissold, Park City Group's CFO. Ed?

Thanks, Dave. Good afternoon, everyone, and thank you for joining us on the call today. My remarks will cover our consolidated operating results for our fiscal first quarter year ended September 30, and I will also comment on certain cash flow and balance sheet items, and then I will turn the call over to Randy for his comments. I will begin my comments by discussing top line revenue. For the first quarter ended September 30, subscription revenue increased 24% to $2.6 million, which was another record for the company. Breaking out for ReposiTrak related revenue from the comparison, our supply chain management services business grew 29% year-over-year, which was also a record. Our revenue was $696,000 for the quarter, which is a 9% increase from the same period last year. And we expect contribution from other revenue will remain at approximately 20% to 30% of our total revenue. Overall, total revenue increased 20% to $3.3 million, which is also a quarterly record. Moving onto operating expenses. Total operating expenses were $3.8 million which was essentially flat in comparison with the same period last year. A flat comparison was a result of offsetting expense items. Sales and marketing and cost of services and product support increased 8% and 12% respectively, which was offset by a 22% reduction in general and administration cost. At the end of September, our headcount was 68 which were up from the same period a year ago. Below the operating line interest income increased to $59,000 compared to $1,500 in the prior year which reflects the increase in cash and decrease in debt levels. Touching on profitability, on a non-GAAP basis which excludes non-cash related expenses we posted net income of $120,000, or $0.01 versus a non-GAAP net loss of $699,000 or $0.04 per share during the…

Thank you, Ed. Obviously; we had a great first quarter. It is difficult to comment on the obvious but equally excited about how the rest of the year looks, and frankly we see the next several years stacking up in the very exciting way. I think it's important to note that what we call our core supply chain management business is obviously accelerating. On standalone basis we broke it out just for your interest for this quarter, and it was up 29% year-over-year. So the core business is doing very well. I think a little bit color around that. We have a relatively culture driven way of growing our business and it really hinges on our brand promise which is to enable our customers to Sell More, Stock Less and See everything. And I promise every conference call will reinforce hopefully with you the fact that's deeply driven into our culture. But when we are successful and enabling our customers to achieve that brand promise of selling more, stocking less and see everything, the net result is they naturally want to do more with us. So our growth is a very organic form of growth. And virtually all of the increases in revenue from this quarter were from customers who are with us last year. And we expect that to continue. We would imagine in the strategy that we began executing the couple of years ago of working with larger and larger customers, what you are going to see is that same adoption cycle. Try some, see how it works from services perspective from Park City Group, if it works well and certainly we will most always delivered on that, do more with Park City Group. So that's the mantra that we have internally. It has been driven very well…

(Operator Instructions) Our first question comes from Todd Mitchell of Brean Capital. Your line is open.

Good afternoon. I am going to ask the question. So there has been a lot -- since I pick up the start kind of concern and misconception about the relationship between Park City and ReposiTrak. And I think you have been very clear, sort of analytically how it is structured and how it works. But I think it would be useful if you could sort of elaborate in your own words the kind of the genesis of the arrangement, why it was structured the way it was originally structured the way it is, and what your thoughts are in terms of -- we are not looking for a date, we are kind of looking at what is the benefits and disadvantages to keeping it out longer versus shorter and just sort of how are you thinking about that?

Okay. That's fair and good question. I think the first thing I have to admit is that when -- well I said at that at time, when we originally agreed to establish ReposiTrak with Leavitt, we didn't have nearly as optimistic of you as what it could be. So the result is we were more concerned with protecting the downside in ReposiTrak than we were maximizing the upside. So I think it's important to remember the framework. In fact, I think a pretty direct quote from [yours truly] on a conference call, public conference call was, ReposiTrak is either a nothing or it is a big deal, we just don't know. So we are going to go out and try it. So clearly the bias of the business because you have to remember at that time we were also in the process of adding infrastructure to Park City Group was, either we create a structure that gives us some upside if it works well, but protect us on the downside if things don't go well. And the obvious conclusion was, well, we will set it up so we -- it's a customer of our, because it's got this exclusive right to use our technology worldwide for food safety. And it will pay us as a customer so we participate if there is any success, and if there is any success we will have an option to buy some equity its founder prices. So the truth of the matter was at the time that we did it, that satisfied the needs of Leavitt Partners, and it certainly satisfied our objective at creating the structure that had downside protection for us. Well, as time went on it became clear and clear and at the same time we had gone out and with…

(Operator Instructions) Our next question comes from Amit Dayal of H.C. Wainwright. Your line is open.

Thank you, Hi, Randy. Just following up on your -- the last comments you made. If this agreement should be insurance companies come through, I mean could retake that as one of the catalyst that could prompt you to then exercise your option with ReposiTrak.

Well, it would be -- here is what the Park City Group shareholders actually want or should want, I think is a better way to put it. We want Leavitt Partners to maximize the contribution that they can make to this venture as quickly as they can. And then we want to exercise the option. That gives them the maximum potential value and the Park City Group shareholders long, long profit from that. So if we had a check list of things that they could contribute that is one of them, is getting us into the insurance area. You wouldn't have to Google very far to find out that the Leavitt family owns one of the largest insurance brokers firms in America. I think they are number 12 over 13 in America. So let's just say that we are going to the door with Leavitt family to insurance companies. We are going through the door with somebody that is well respected, well thought of and the larger user of these underwriters. So they are making a very important contribution. So I can -- that piece gets checked off the list for sure. And that's a fair thing to say I mean that's definite. But there are a couple of other things that we want them to be able to do. We have an interest in the supplement industry. They are very well connected there. We think there is a great opportunity in ethical drugs. And they are working in that area as well. And the third area is internationally. I would love to see the ReposiTrak begins an adoption cycle outside the US. We are not the only people who care about food safety. There are other nations that do. And I believe Leavitt can take us internationally into these arenas. So all of our relationships are deepening. We are deepening with the rafter people. We've done a great job for them and they have done a great job for us. FMI has been a great partner and we continue to deepen our relationship with FMI. And then finally with Leavitt, we anticipate that they over the next year or two will maximize the contribution that they can make, maximize their potential gain in ReposiTrak. And then it's up to us to do whatever we are going to do it with that option. So sorry long winded answer again, but it is a big step towards that moment in time when we will do what we are going to do.

I appreciate it Randy. Lot of color, in terms of LoJack pursued a similar model and their business group cross so hopefully same things happens for you.

Oh, yes. And I think, look, we really do believe and we've run the numbers, it is almost revenue neutral this year. So it won't make a big deal-- partially the shareholders worried inside the company as opposed outside as a customer. Our top line certainly wouldn't be significantly different. And by next year it will really not make any difference. So it's scaling very rapidly. I hate to give numbers but the pace is accelerating, the adoption rate is accelerating so getting to that 2000 number in next June, and it's probably the number when I said it, it probably sounded like a stretch. It is no longer a stretch. So we are feeling very good about how it is doing.

Just one housekeeping question I guess. Your adjusted EBITDA numbers are growing pretty nicely now. Whether any one time costs around the adjusted EBITDA for the same period last year that could be kind of causing the numbers look stronger than what they might be or is it just the operational leverage side to kick in now in the market.

Yes. It is really the operational leverage. We're just looking out, we are doing a major transition as Ed mentioned this year in terms of our technology platform. That actually hitting our P&L in terms of some additional outside consulting and things like that. And I think we've said that we anticipate over the next several years that our cost will go up by roughly 5% to 7% a year. And obviously we expect -- since I said each of the next several years would be higher than last year. I am being coy here. So last year was 17%, so it is pretty reasonable to say we are going to -- we anticipate next several years being higher than 17% on the top line and that the cost element of our business isn't going to grow at more than 5% to 7%. So call me crazy but when those two things work that way mathematically, it is all good for us. So there is nothing terribly unusual in what we are seeing today in either the top line or expense line.

I am showing no further questions at this time. I'd like to turn the call back over to Randy for any further remarks.

No. That's it. Think its cost it should be terrific yield, once again we and say in the beginning of the year that it's going to be record on many count. The team has just done a spectacular job. And there is no piece of the business that I can see that isn't performing extremely well. So we've got great top line growth coming, we've got expenses well controlled and we are feeling very good about the future. So thank all of you for your support. And we will talk to you in a few months.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Everyone have a great day.