Ladies and gentlemen, thank you for standing by. Good day, and welcome to the Park City Group First Quarter 2018 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Dave Mossberg, Investor Relations. Please go ahead, sir.

Thank you, Paula, and thank you, everyone, for joining us on today’s call and your interest in Park City Group. Before we begin, we will be referring to today’s earnings release which can be downloaded from the Investor Relations section of the company’s website at parkcitygroup.com. I also want 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 of Park City Group’s management and are subject to risks and uncertainties which could cause actual results to differ from 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 risks. Park City Group does not assume any obligation to update the information contained in this conference call. Our speakers today will be Mr. Randy Fields, Park City Group’s CEO and Chairman; and Todd Mitchell, Park City Group’s CFO. And with that, I’ll turn it over to Todd.

Thank you, Dave, and good afternoon, everyone. I will be reviewing our fiscal first quarter 2018 financial results. We generated 12% revenue growth in the quarter. As we’ve said, we’re not a quarterly company. There will be variability in quarterly growth. However, we remain confident in our outlook for 25% to 35% revenue growth for the year. With regards to growth in the quarter, we made a conscious decision to focus in on our HUB’s compliance levels. Randy will talk more about this, but essentially we entered the first quarter with the largest ever backlog of recently connected suppliers. And as we’ve said before, the success of our customers is paramount and, in the case of ReposiTrak, success is defined by supplier compliance. Therefore, it was critical that we focus on execution and bringing this backlog into compliance. We just expanded the Success Team and given them new tools to execute and, by the end of the quarter, our compliance levels were the highest in our history. And this occurred despite the fact that weather disrupted many of our customers, many warehouse facilities in the south and southeast, but more importantly, with two hurricanes in one month, FEMA basically took all the independent truckers offline, putting the whole distribution system into disarray. As a result, our HUBs naturally lessened their focus on our compliance activities as they scrambled to maintain their day-to-day operations. However, these factors do not make a trend and not only did we have a great quarter in terms of executing on our backlog, we were also successful at lining up new business. As I said, we were successful in bringing ReposiTrak’s overall compliance to the highest levels ever and, as a result, we expect to return to add new HUBs to this network this quarter. We’re…

Thank you, Todd. As Todd mentioned, the first quarter really was about focusing on execution. Specifically, it was to get a record backlog of ReposiTrak connected suppliers to record levels of compliance. As a result, the remainder of the year looks very, very strong. With our backlog addressed, we are now ready to take on new ReposiTrak HUBs. Secondly, our Supply Chain business is accelerating substantially. And then, finally, the MarketPlace pilot is successfully in expanding. As a result, we remain confident in our outlook for 25% to 35% annual growth. And certainly, as I’ve said repeatedly, we’re not a quarterly company. We take a longer view of our business and our view is that the company’s prospect have never been better. Let me start with ReposiTrak. It was definitely a watershed quarter for ReposiTrak in terms of execution. We ended the quarter with the largest ever backlog of ReposiTrak connected suppliers and, as you know, the most important thing to us is the success of our customers. It’s not enough to collect simply a group of suppliers connected to our network. They must also become compliant and that’s where the hard work is. Technology is not the obstacle. Getting people to respond and produce the required documentation is always a difficult task, but that task falls to us. It’s important to get the HUB suppliers compliant in a way that makes them feel that we’re also invested in their success because the truth of the matter is we also want those suppliers that we’re leaning on to become compliant, ultimately, to buy more from us in the future for their own account. We have more to do, but I couldn’t be more pleased with our progress. As I said, we drove a record number of ReposiTrak suppliers to record…

Thank you. [Operator Instructions] We’ll take our first question from Ananda Baruah with Loop Capital.

Hey, guys. Can you hear me okay?

We can.

Okay. Great, thank you. If I break up just let me. I guess, just starting with the revenue challenge, like weather had an impact that was a bit unexpected. Did you guys expect to spend as much energy this quarter on sort of driving compliance inside of the ReposiTrak installation as you recognize? And then, I have a follow-up off of that. Thanks.

Well, I think from a business reality, we ended last year, the beginning of this last quarter therefore, with an enormous backlog from the success of signing up HUBs. At the end of the day, you sometimes have to make decisions about is it more important to grow that backlog or to achieve the customers’ success, and that clearly is get the suppliers more compliant. And frankly, that’s an issue that will always constrain the business and we chose to go down that path. The interesting aspect of weather was, as Todd pointed out, when you are in a business that is focused on literally getting product out the door and we call with a problem that we need some assist with in compliance, we may be bottom of the list in terms of what you’re trying to do. You need to get trucks in and out. There weren’t any trucks. You’ve got stores that were flooded. It created a problem for us on the compliance front. They were focused on, in their view and rightfully, more important activities than those that they had assigned to us.

And both of those dynamics make entire sense as you can see straightforward. Do you – as you continue your Success Team buildout, do you envision getting to a place where you could tend to both sort of bringing the backlog, driving the revenue and also driving compliance in the installs so you don’t have to make a sacrifice?

Yes. And, I mean, the answer to that is of course. In fact, think of it this way. I was being quite serious when I said we now do as much more work around compliance in a week as we used to do in a month. So the productivity of the team is going up. The sophistication of the team is going up. The tools are going up and the number of people – I think, keeping it honest here, Todd, haven’t we doubled the size of the team over the last year roughly?

Yes, just a little bit more than double.

So we’re definitely adding to the resource. We don’t feel constrained there, but we provide a great deal of training. There’s a seasoning that has to take place. There’s tools that they have to use. So it’s not throwing 100 people at it that would make a difference. It’s having the right people. That’s giving them, as we call it, time over target, no pun intended, and indeed helping them to be even more successful with our customers. From where we were to the compliance levels we got with the end of the quarter, it was pretty astounding. So we’re very pleased, but you’re absolutely right. Over time, you can simply take on more and more.

Got it. Got it. And then, just with regards to the sort of rearranging of the fiscal year guide, so does that suggest the sort of 25% to 35% – you started out the year at 12%. Does that suggest that you could actually end, exit the year – and you talked that re-acceleration through the quarter is across the businesses. Does that suggest you could exit the year at north of 40%? And I don’t want to get too surgical here with it, but to do the 35% or even 30%, it might be suggestive of something like that. So I just wanted to ask for the context.

I think if you look at – we’re not a quarterly company. Obviously, if we’re reiterating our guidance for 25% to 35% for the year, there’s probably going to be a quarter or a quarter or two that’s above that range, but I wouldn’t look at the results purely linear. I think we’ve said with Supply Chain being well over at the business and there being a component of that in pro service and licensing, that there is some lumpiness to our business. I think that if you look at the comparisons, they get harder obviously. So yes, we’ll see some variability and we will probably have a quarter or two that is better than the top range of our guide, but I wouldn’t consider a straight line trend.

Let me add a little bit of color to what Todd just said. If you think of we have three different, we call them legs to the stool of the business, we have ReposiTrak. We have what we’ve historically called Vendor Portal our Supply Chain. And now, we have MarketPlace. We think of the first two, meaning ReposiTrak and our Vendor Portal, as being relatively relationship-intensive. It’s important – the bedrock of our company is if our customers are successful and if they feel in relationship with us, then they will buy more. The interesting aspect, if you were to think of an open-ended growth opportunity for us, is MarketPlace. As MarketPlace ultimately comes on, if it works the way it potentially could, it’s not as constrained by the relationship quotient as the first two aspects of our business. So over time, the first two aspects of our business are certainly capable of driving our 25% to 35% top line, 50% to 60% contribution margin kind of business going forward, but the reality is that MarketPlace has the potential because it is less constrained by the need for relationship. It’s people buying and selling. They need less handholding and so on and so forth. It certainly has some potential for changing what that upper end dynamic could be. That ain’t a forecast. It’s just what could happen.

Okay. I appreciate it.

[Operator Instructions] And gentlemen, it appears there are no further questions at this time. I’d like to turn the conference back to Mr. David Mossberg for any additional or closing comments.

Thank you, everyone, for joining us on the call today. Our phone number’s in the press release. Please feel free to give us a call if you have any follow-up questions.

And that will conclude today’s conference. We’d like to thank everyone for their participation. You may now disconnect.