PCYG - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to Park City Group Fiscal Third Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note the conference is being recorded.

It is now my pleasure to introduce your host Rob Fink with FNK IR. Mr. begin. may you Fink,

Rob Fink

Fields, and for everyone. third Park Hosting Park are earnings operator, Chairman; CEO joining John and quarter you us call. Merrill, Randy today call today City Group's the City good you, Group's Thank and CFO. afternoon City for XXXX Park Thank Group's fiscal

Reform forward-looking of would City Group Park I begin, everyone the we about Securities to remind XXXX. that the statements meaning Act this Before like call Private Litigation could of contain within

that subject not statements facts. historical upon statements beliefs forward-looking are Such statements Forward-looking are current, to based are and expectations.

Group subject such are and risks. herein The information those management forward-looking Park of filings discussed and should City from actual Exchange Commission. be risks Such company's are Securities fully uncertainties cause which the forth could light statements. differ set in risks in to considered results the to with

the call. release Investors that this does discuss call. the can market Park access contained the information City on section company's Investor to we any visit release. today of in issued this update Group at obligation financial website Relations Shortly today's results after viewing to the parkcitygroup.com company not press a conference will assume the closed over press

call I'd like said, that call all With is John to over turn now Merrill. the to yours. the John,

John Merrill

good Rob everyone. afternoon Thanks and

last several three on the For messages. conference calls focused we core have

prioritize to in trend revenue. from non-recurring decline over our revenue. largely This changed revenue a shifted the in continued the non-recurring recurring March in was not we and business quarter First, revenues year-over-year is as

expansion increases revenue. due of our a modest we supply recurring chain driven growth base customer on While and portion revenue slowdown we Tier customer offset implementations in COVID-XX, marketplace and experienced X with slower in to existing of this delays

global survivability more before was customers' and than it. focus vital pandemic. important Preservation ever and before. with demand effort our said as our have are as strengthening is PCG face uncertainty sheet, associated economies the the critically Second This balance I disruption our on now

our Third growing the was network. on focus

waver. not will We

laser However, that growing effort took our network. a backseat remain in quarter. focused on We this

many busy As offerings. to were customers expect, focus pandemic you disruptions might not of related target able on our and our with

on There optimistic chain were the it's When as both times. see will what how that the through and sense experienced we and and who expanded some an ever to and the of shift supply environment meantime, I these assist confident am none In future. panic them small in resume us our to I'm challenges demand focus resume believe that other anyone's normalcy guess. from our I grocery will before. normal, partners customer volatile customers these consumers new stabilizing triage new and the of normalcy. uncertain the industry in and the customers will priorities opportunities avoid is large

be they to the anticipate selective more with storm. position much also companies weather I working to will themselves financially

been of profitability food our do has compliance significantly may supply and particularly how a quarter and peace and safety, we to grocery we cash year-over-year the While and impacted generation business. the grocery chain our in be short-term the pandemic sequential on customers situation supply basis, This and consumers in provide visibility. services the mind Nonetheless, do, our more what and nature. never US chain it comes customers when vital, declined

took depth to steps In we early the unfolded, the costs. March XXXX, as pandemic reduce of

absent million a marketplace. than million and made spend reduce XX response, XX As I marketplace. this we defensive to our have less said a before place cash to decision absent belt to tighten In year operating run it takes

whereby cancellation focused travel Some a of related lower due cease we halted. lower of we to cost employees more revenue. a shut of and we result as completed shows business our pandemic Keeping areas given down, aggressive safe, these projects trade naturally commission expenditures were took or that the approach. on Less other

but reduction. maintenance and general contracts included across and limited to the overhead was board software This consultants, fees, professional not

can Department of Defense information the proactively prepare chronic our by platform can situations FoodSourceUSA caused supply the our reduce they in This cash may address Also be program. unique Although per launched no data given utilizes our food in provide future. COVID-XX to with assurances this proprietary monthly expenses so and other crisis for online we $XXX,XXX chain the March, imbalances by month. in

such This food shifting supply. in one a the low to another surplus enables visualize food part DOD may to the of country see where

As in in supplies economy. a preserve our subset safety the adequate more to public in the grocery helping as and the view largest is explain Randy example. position detail, food of trust, prime will industry we a This

is marketplace most XX% of example. in that March. last March in Marketplace offering quarter, was few place took up weeks the Our increase of another the revenue

was Bluetooth as portable our all cameras, chest to other other web and such items result as freezers, such home customers items. This the at of items microphones, sorts to and speakers, home find seeking from work of masks gloves, mandate, hard such and stay facilitate

Our our ability connect with to new helped meet and demand unprecedented suppliers safely. quickly retails customers

generates have reduced mix But this is profitability. other to business. parts than vital a contributed customers. our the our our lower that with said our we marketplace As value service of margins revenue strengthens This

the in X.X we the of prior was of million first year. program generated X.X to generated from to months stock XXXX. for XX, Turning the cash the our million Total XXXX. of down March compares nine months nine halted in foreseeable sequentially XX, cash March the On fiscal for as we first at million from future. December buyback we This that XX million numbers, X.X the XX, XX.X XXXX, operations

Deferred due completed XX% and revenue to or contracts. by period implementations the $XXX,XXX in decreased delays comparable for

X cash customers stocking receivable our X.X supply and XX%, the million accounts their use offered product, sequentially keeping million increased Our suppliers and to shelves, as chain order grocery to moving. from by to

revenue to quarter in of XXXX, the revenue from quarter million third down in X% increased fiscal XXXX. recurring was X% XXXX. X.X total X the million, The a the X to in quarter of from XXXX million grew from third fiscal same total In XX% the XX%. quarter up revenue as of X.XX fiscal million year-over-year for same Recurring revenue of percentage

fiscal XXXX XX.X ending XXXX, from of month XXXX. noted from XX% for XX.X in did be same last onetime which first the the nine fiscal months XX, non-recurring of million It nine the total should year's down decrease included fiscal revenue, million that XXXX. Year-to-date, million months period of not March occur revenue of most X.X nine revenue to

the fiscal first revenue as fiscal XXXX. months in of from of XXXX period to in in to percentage revenue for XXXX a fiscal of Recurring increased from XX.X the months nine grew XX% XXXX of revenue total same XXXX. Recurring million first XXXX for in fiscal X.X% million nine XX% XX.X the fiscal fiscal

operating the X.X higher marketplace, In associated XX% million, home expenses the an telecommuting result in is associated from to $XXX,XXX CapEx at million associated stay costs QX in increase increase or due fiscal quarter of with total costs higher increase the of XXXX third This of largely of $X our and with were mandate. XXXX, with depreciation XXXX. spend

Total operating up fiscal expenses X%. of million for $XX.X the $XX.X first nine versus to XXXX months million, increased

hired to fixed operating XXXX. to Tier net positions QX to approximately operate anticipate absent previously, expenses for As I've $XX offset costs business. reductions discussed our accelerate we million our initiative neutral We our X in year operating fiscal are three and per expenses the marketplace sales maintain

fiscal was disruptions, one common mandate. higher to time or in $XXX,XXX decrease implementation a in share a additional of lower with staff $X.XX revenues of XXXX, In and the and costs, share, largely per home in compared to $X.XX year marketplace costs $XXX,XXX, associated result increase per anticipated than in income year approximately to or $XXX,XXX quarter. shareholders at The diluted was due quarter depreciation stay net common customer diluted decrease the shareholders amortization, of a third to income sales ago fees net

of income and decrease and of XXXX common to year-to-date first basis, higher shareholders to to The higher for or net common due for per XXXX ago depreciation $XXX,XXX, a shareholders lower million, $X.XX revenues amortization the compared in or months of to diluted capital marketplace share net share million was year-to-date fiscal center. was period. $X.XX data largely $X.X costs one time On the year a in expenditures per result $X.X the diluted income nine our

a current million. $XXX,XXX. common To of $X.XX total common stock in repurchased at we of have share buyback a authorization, $X.X we per of stock for of an per average stock share a price average total XXX,XXX shares quarter date, an of Under total of shares the for XXX,XXX the price repurchased $X.XX March XXXX of at

As I in XX additional March and repurchase pandemic the halted any do to the our mentioned earlier, plan stock efforts unfolded, repurchase we on not term. we near as

hence and stock The buyback stock the of from outstanding. no the company issuance amount reduces retired holds stock. As plan previously the stated, purchased common is under total treasury

net purchase and resumes approximately remaining the total the capitalization for total X%. when by retirement common $X.X or shares if under company's Since on repurchase May plan of it million. XXXX, reduced The is plan the existing its buyback amount

call I Randy. to Randy? At this point, pass will the over

Randy Fields

impacted in ourselves largely It disrupting with business. and way were remote position a with challenging Thankfully, collaboration. a employees very and we impacted unique also distraction. organization found the large we quarter small. everyone both our our uncertainty and pandemic It based already Like strong this with do the customers, we

significant we revenues. transition Many grocery a non-food have to halt to virtual the that relatively abrupt are and business, total environment retailers chain. some, disruptions for to their including literally We're actually the faced fortunate was So smooth. supply in a

we've industry different The including things not that stock. muted new the been in top and facing. customers at us who's paper consequences things things grocery chain the to about customers only economically, experience become food. knows keep are all are grocery of Anyone may weeks supplies economic last safe. to challenges of more and of more years Supply certain set a faced industry get discretionary, few Indeed, be now the the everyone's but fully Our toilet of the mind. the employees store challenges required are in challenges store cleaning the out been worst for like steps certainly some talking to

remains only the it short is and cycle essential cooking a dressing supplied. we're way customers the supply And the for even although near ever critical, think of challenged even has at while these And in this disruption extended basics addition deal Compliance, Food or before. we're in that, baking crisis. out the more critical with and equally that. times in items been being it's sales our ingredients We of challenges. term of finding unlike our is middle emergencies. and over due some immediacy are critical chain stock. to Safety home last to the of of Other and will pandemic Indeed

frankly, changers, the But exist our chain long-term supply in and This the favor will and short-term, abilities. and normal follows. change as us volatility ultimately our uncertainty customers new we the adapt to while think

We are are food essential. the we chain, to not supply peripheral

John wasn't rely be As our of waters. data to our X building help sure in these alluded, Tier initiative. customers great a the on To with this out network our terms them navigate our quarter uncharted efforts and

the their to customers Our focused, attention and are pandemic. allocation responding in complete obviously, to resource

sooner Our efforts, begin Xs though, to more system. restart many add to later. Tier will And rather than we'll our

As to of we part critical We the a the anyone do that with trust. chain system this retailers are a In supply our connect John public paperwork represent compliance a doesn't effectively suppliers said, pandemic see suppliers. with streamlined with platform to and is safe grocery create making function overwhelm way, what significant of headaches food, smoothly sure with continues to role the as a reinforced important and we ecosystem. how an whole retailers or

customers this now frankly than more ever. Our know

thought like this down chain, normalcy on Our competitive are we position in I out with advantage suspect and strong reinforced, essential continue been One, and our half the of than we chain done context. returns. platform. supply to the will significant customers have the to To supply grocery may of up never all how US more underscore food improve facts. once our few has I'd our a point And audits you are safety us to

business our We largest safe. world. are of us the eat two the the keeping network in critical of These food to are all that certainly compliance parts

of do opinion, systemic essential supply platform food were important. imbalances. Defense what we Department opinion just the what address The our our thought enables in government's helping know that sellers and In we can much other thinks don't to words, is harder industry, suppliers And is goods things and it's the not we merchant buyers finally, grocery perishable to that be be that and would at get get us and of soda, bread, it mass the other to food to certainly and supermarkets snacks perishable Without will like and paid not source. the in paid. milk, extent it's sold

important important availability chain. the safety in So and in supermarket of to vitally supply the foods a we're sense,

actually us. That Our consumers depend mantle. important and therefore, is customers on an

take don't it we So lightly.

recurring public the experience fact, everyone, due In but protect this new it's We that a environment, base to are, pandemic. of revenue must we helps to maintain back sleep of ties sustainability trust. obviously In certainly definition growing is and and the increasingly And disruptions me of for at important. our business our our This trust business large having revenue to night. a customers. recurring like to predictability businesses the

that The completely last was year. revenue to this incidentally occurred quarter non-recurring revenue related

we've we stabilizes, As recurring year-over-year still have. now are environment we as top growth non-recurring growth much for the line total as that positioned and reduced revenue

they challenges eggs minor of essential changes offering. are reinforced While face items block of to out the oversight well of customers to lack stocks buying now out supplies. our right the it customers, buying this The toilet importance of a as up stock due not pandemic beyond such of were patterns, to or paper an around in was and due line our the

have to normal, more stock out about and will will a interruptions retailers I thinking the to traction. avoid offering how no future return of in doubt as our But more things gain to that begin be

future of strong we us maintain in could would part chain, supply In the our view the not confidence stability, of therefore our customers to our create increasing their cut our this need lose us, business, chain. and trust the entire supply Looking out across require risk, easily that continued that literally profitability as with and a balance in strong, financial and Without ripples sheet. they us but the we've for of food remain to costs just decreasing comfort. hopefully customers comfort

supply We've visibility, our they implementation labor that good cetera Decision problems, ability by everyone and deal chain, lacked In are basis. over less day-to-day mean positive our harder as demonstrated slower we to a upon of brought relationship these the does. us are be blows their term, our we making and safe on customers. and basically that would pandemic, our essential to who the is reinforced really we've without and We intermediate reduced them temporary over again, customers with value, and of et them the with all find.

our to when services, we our over. many believe more As because a result, opportunities have we for customers and dependent

the Operator? with So that, call questions. I'd open like for to

Operator

Capital be you. a conducting session. first this question-and-answer At from Instructions] Ananda Thank we Our will is [Operator time, question Markets. Baruah with Loop

Ananda Baruah

guys you're John. Randy, hear Good sound that well. Hi, you like you're and doing afternoon. Glad to

it so good. it you well. quarter execution looks guys And this – had that's guys have as good And like sounds you actually like

also Randy of magnitude ago growth that. couple you want So all quarter, accurately it quarter, just moment congratulations could, made the think that a a revenue all that comment understanding tease make just this you could of understanding could recurring, your really want on did if accurately. sure I a little I And the from the so a to seems I being marketplace at well I bit you he and the distinct of I'm make to that – with recurring. this about sure and I'm being things like comment it as because it

Randy Fields

Good.

fading and Okay, components. this, at you. Ananda decreasing the is course three I is been licensing the and One year. think an has have over was the component, The business way That we old of services. Ananda, looks last management substantially thank which

current recurring year piece was words, In the X.X piece type business. part most business is we consider quarter. That about the and have yes, then from it important that up business especially be our subscription weeks. other million marketplace The marketplace in we is few to the went other And the the growing. revenue the of million quarter, of definitely in last X substantially in to prior the the

behind having the So close business our to services pretty as fades, pushed piece going forward old that we're licensing and of us.

now third piece, what stuff pieces rapid is two a anybody cetera, years, it business, should piece which to recurring growing the two behind we of which couple and and did also Now where significant of If you growing, those have want the that forward, tail really pretty rate. well. marketplace, that's and at is back help? that moment feels It a growing one time at be the be goes to et the got going the that of the pieces licensing, business, very as we've both do us. that happens Did appears if

Ananda Baruah

It did. great. very Yeah, that's thorough. That's

like is back understanding seems math stand and good year-over-year like And June marketplace Given June mean chance I'm to get are growth this quarter just revenue you a in the then my generating that a does the ask recurring so And – quarter, the have my follow year, the that. I revenue then last if next that flat of hunch is something question. that up well. quarter? incremental you all then – you accurately, almost question you would it really I that that is get want as quarter, some this current

Randy Fields

yeah, let help let see I – me Okay, if me again. can

– quarter see year how finished. quarter current Here's one marketplace We last time in of one we about the than $XXX,XXX, we're had ago, we things, other same that that just in revenue. year,

can you what one you that we simply that look if at did would So is better see the you did. that this revenue, removing from quickly expect our revenue time quarter, than number which we

look in in we're say, the was Ananda the – once is, do – what out, So quarter it sure. we a there in it's I environment growth lifetime as and is other really words, for in it's

we We're are now just uncertainty. of rolling the if way managing the feel degree high conservatively. a numbers as out. have But we the So business

of nearly taken well end have have is that it plan, in of at guessed would single would the reduction year. now one it two behind appeared the achieved time we We've years and ahead us largely revenue a

So continuing recurring remember those that improving. hard if to because you Einstein grow will. and was And don't to and do are figure to we feel if you to emergency marketplace, revenue is out that focus people are things our intended our you that which helping pretty is have find to find. good That's be to fills,

probably experiencing you out is figure here. that marketplace So some can growth

given good can going So the pieces most that that's at about feel forward very say, uncertainty. the both the moment, I

Ananda Baruah

then my I'll Randy. super this prepared now, sounds just in of And That's one back the queue. on remarks. It like the is before helpful. get last see and for based some

regards licensing like you Sounds you and being see of that. then impact – what to And they businesses business at April shut-down accurate things in lot friction that things that if have really It context services. can there. having is, services, is of began actually, weeks I April right to Can in licensing of like to wondering March now. for look first sounded us – a sense well with least really looked love and any March impact of couple as May kind and March Did the and that? like And assessment? like would what give may is I'm sort the of some began

Randy Fields

would for cash, it that to In buying environment is think convert other much customers been so reduce that into or us that much the recurring conserve who answer is words, easier us to onetime non-licensing licenses better like Yeah, historically, our it I is now, revenue. revenue. obviously to makes this, the easier really making for had

to mode. it's world much feel else it. good recurring gotten But there's I SAAS versus the that now sure bodes in not about licensing So for conservation is we And cash And revenue. revenue I'm think well say. easier

Ananda Baruah

helpful. really Thank That's Thanks. great. that's you, Randy. Okay,

Randy Fields

You bet.

Operator

D.A. from with Davidson. is question next Thomas Forte Our

Thomas Forte

Great.

four and I'll stay So have a go doing to questions. Randy you're glad safe. hear well one at time. John, I

we So the from based should first your is for Randy add one efforts existing for and think trading aisles you opportunity John, how about retailers? to scan

Randy Fields

and customers – help air, to the of the about up stock more supply come amount reshape opportunity chain whole in retailers out et about our interest terms as think expansion. We of cetera. very situation, there's of in problems. is in out kinds of an Well, We've feel how good. or suppliers, thinking modest trading part way, we seen initiatives, a now their existing based meaning, this reshape think scan this And interestingly our of of on I a actually these the

we again, will, segment the fix But supermarket is you we problem you're Tom, more months? sheet? to of think going say. uncertainty So stabilizes, do to think last And terrible in of balance got How needless here's interest the fix high see, do about. as explosion the How watch to this out if that in our we something this stock do we problem? the how two

had Historically, cetera. XX on hand industry supermarket of two warehouse months have the would years three et ago, to in inventory

out years, leaned think they of it inventories future our as As capital, and trading feeds themselves into they that reducing of inventory just out that over cost a stock the now certainly work. caught We short the hopefully begin based the a XX in last scan envision position. to perfectly

good really And in us though feel the now. the where for world uncertainty high. respect, is that we right So is about

Thomas Forte

you and It's my and as opportunity paper. hand marketplace Okay, basics, second to with prepared sanitizer out for toilet this the remarks. question touched address of in your stocks upon then is, such

not? can't why situations? Why So is, marketplace address those question my

Randy Fields

interesting that moved some talks our into each to a And domain. asking of you're very Well, management question. other, as team the has certainly

sanitizer So that these to hand kind help people come as some things resisted to as hard and difficult us it, of like have we've of them stuff. source

You're space, try spot we and et want stay question is that cetera. And the on. do to in

happening is I've there. think wanted previous to marketplace this make And do call out in ongoing we role. its about we able I obviously, be to summer, mentioned and a decision And by about a more this we think because I maniacal we're marketplace. you say, And relationships – are change know, permanent it's certainly we if a new and established to is as in know establishing execution. our fair something

that whatever we're feel maintaining like these we to are the do. my want standard. Just best customers at we god, our And guys

has, long moving probably gently, we're as as And So so good the space we'll again, – Tom. it execution remains stay very our we're course. that as into

Thomas Forte

of for Okay, and to the one I go wanted then four, third the big picture.

the love I'd thoughts to hear COVID-XX supply in the role chain. global Randy, China's of So, comes implications it when food on to your

Randy Fields

good Yeah, that's really question. a really,

up you to there's is that ago just because et theory this current in back chains. supply me if cetera manufacturing, their cross began one cross go about Let leaned step XX back time supply lengthened the on. cost is with going though has of a and just The in chain inventory, their current even the of inventory capital They levels, people time out fallen dramatically. years

amazed So And What's to Asia, our food such smart Asia. lengthened maybe And much much goods everyone Southeast not you maybe clear time of come could decisions. is terribly distance example, in ended the that at our can for great in which take was would industry of set how from a industry, the in of a argue place. could that that wasn't idea. therefore they be replenishment you over up and

several It's suspect happen. working likely to And just benefits candidly, things theory. I theory. So is a our us. are This it

guessing I'm in bias. bias there's it, the So I feel don't but a

be might just it think I there.

their sourced single products. People

away. that's think go going I to

think their the that a I can't now people source will in products fulfill. event supplier multi

And the but The interruption but so of you're of ended over not problem their really the Chinese supply about the just the you problem. were with see just they so it know, think COVID when come a peak slow distance customers chain a on in problem. the of delayed. that their a has China, stuff ocean experience, couple negative for of been on as see experiences about to that a not product China distance going reasons, a almost I lots much system. distance, at of think back. dependency number of up being the all and ports, these the has been the We lot freight much the our were I And closed

worth address So the cost moving all was beginning in it? this There were it. But of retrospect, question is, worth we're to it advantages. offshore whether was seeing people certainly

management begin so that the hand, because to other even to want great I that that's happen. here the – term compliance think to self-sufficient, that Interestingly, US. produced a think we that in unfold. I supply opportunities deal is don't outside the at China. in But where On are to know the in to interest. don't here. says had about the positive definitely the and of We're pressure right. don't use no lead, we've I no carefully in there's exploring looking chain, know going though, Mexico the promises be US, frankly, shorten But food I We how promises more Again, stuff might US track

countries to So and dependent hand, chain on are food foreign I US US think the dependent one to hand, more supply over looking foreign time. standards on our systems than the going the other is become

Thomas Forte

think of have Great. last Tier All How bad debt and right, so Tier two health financial your might I risk? X because get my we suppliers, the one, should more. then about I'll one or back in X, the ecosystem, queue

Randy Fields

always it's question. we Yeah, be, there in been be suppose defensive. that's has are. another I is if where to a general, good place to considered Food

remarks, As in I my true. absolutely said it's

you but cut spending, food. may out will discretionary not out your cut You

out there's they're So more product you food do in is respects. expand, food obviously do said the It's related how how that system well. doing – class of on activities, food – retail a problem It's high because purchasing, many companies how the seeing move bit. consequence you who we're Having experiencing keep everyone of balance pressure are seeing to sheet everybody smaller a our some a their doing spend receivables We're their that is sheets. balance have for trouble. discretionary The clearly strengthening their strengthen shelf?

in business. too have that don't statement, to part stores. that's of in are – probably grocery true cut contractions guys seeing work flower some of a some those think business you is their the do flowers I We the to for so example. an soft Here's again, in and realize don't hard

are very receivables our reserves. conservative. think We I do

pretty that be is that that? but bad us, it debt comfortable to We’re for Did approaching we're not conservatively. answer problem going a growing

Thomas Forte

to going I'm you. back. Thank step

Randy Fields

a that's John. no guess I from

Operator

Capital. up is question from Ananda Loop next a with Our follow Baruah

Ananda Baruah

a for 'XX. just quarter. ends Hey, And you then John, OpEx that for net and clarification you it. Appreciate guys. around I accurately said did neutral And that thanks, that's this fiscal hear Hey, OpEx. John June

way unpredictable are thinking about So or that what's about responsible dynamics the at right think least given you to 'XX of now, are somewhat the fiscal guys it? OpEx beginning for how

John Merrill

as were mean, to back. one's right we've line think I on as forward. through increase gone we'll completed be the can that that's lower some reduce travelling I I marketplace projects and spend do margin, natural. P&L because the every a and I for absent no of $XXX,XXX now some the far that item as year. said, be net done flat come belt that our net so believe about tightening Obviously, And month will a Yeah, But neutral the obviously going has

Ananda Baruah

Actually, – of equal 'XX. rate we into run kind that all fiscal going think things that

John Merrill

based going but reduction because quarter, over cutting fourth cost the making September but average think or about lower July you're picking contracts will three our implemented, X.X XX marketplace only August forward. a and I the it'll forward a numbers be you'll prediction, on of see of will that the we've expire, certain in or certain up things months on absent or start months, not October, an about million

Ananda Baruah

seems once talked to sequentially the pretty are And sounds like base is the kind of sort can particularly revenue guys, helpful. you you because you've of it that sticky. you levels guys in. the through to It about – be thing feels the very really cost it – you meaning mean, – situation going you you're recurring that's neutral guys – cash can recurring like in I almost flat get revenues like with like Okay, could kicked we reductions have at this put sustainable, be of the going

if is wondering what this is, get I'm stretching rough. the receivables can is so I – And out, but super you

offsetting moving with just you're neutral worry should reductions aware but belt there cash be If that not relatively speaking be worrying Can about or are or you parts about, guys we cost that tightening. of? and other

Randy Fields

you're really the a tough question. You're asking asking – tough

think sheet. and flow trust a It's of get our issue we significant back exist. product we it get that a of me didn't because really balance for, we a – couldn't –be on we paid around company fact dance is couldn't going company year and that have billions go public invoiced a that prepared. cash be – positive if Let's strong let the profitable important about – to to to billions It this be customers I'm the

talked So the strong about we've always balance the need for sheet.

be our of Now us and become want obvious. in to environment in us be think on we more there should activities opportunity a want lean be customers by and compliance us sure customers existing secure, way the supply our want to new going is more that that be important customers they ever current can and an absorbed to chain is here, our marketplace will to very than be

get significantly. nickel I think reduced We've we disappointed. So than neutral. it. were only our and wanted better that neutral, we you think We're to expenses to if be would watching think that dancing? it's fair be every for management I say How's we

Ananda Baruah

was realized sure to – I the That's that opaque And neutral. word my use pretty being make and not what I just good. in of I'm too want

I'm cash levels, maintain using about, what terms clarify challenged rate, into going flow, despite I flow is current dynamic macro a run talking neutral cash in guess current rate. I'm of run about, what of just is talking Sort meaning current I'm generation cash to free that that.

Randy Fields

goal, recurring us want it in by customers one and spend, that's a really but the growing, our revenue our cash that reducing comfortable by having for the our us to shape subtract have. we're you other, puts if Yeah, that

Ananda Baruah

it. got Yeah,

Randy Fields

being too indirect? I Was

Ananda Baruah

No, that's Understood thanks. great. That's very helpful.

Randy Fields

an had by where a in were our decision we customers place management was not shouldn't That worried, they and to board be worried. important that the be

the the cetera, is now after ongoing revenue. et So cash below recurring reductions, the rate of anticipated the cost company, of clearly cost, the

Ananda Baruah

great. that's appreciate I Yeah, Thanks. all contact. the

Randy Fields

bet, You absolutely.

Operator

question next Our up Forte from is follow with Davidson. a D.A. Thomas

Thomas Forte

Great.

me. So last two for

seems and So a like grocery. Randy, the has first, of for build? Would online what you are implications capacity catalyst been that agree COVID-XX

Randy Fields

been hasn't the agree. it, certainly I most cetera. et because customers think for people delivery We terrific mixed trying meaning think couldn't they a cases, experience But it's many get slot, than in it do more to about

a meaning delivery. a sales are core our supermarket inventory business. delivery store XX% store about the store the get business the products maintaining the inside literally remember, that in of of Now is of direct And to aspect direct counts inventories,

fact goes not somebody inventories is really online that issue be order the correct. the those to Now tend wants to and is whatever. And milk or

properly hopefully take so count, substitution. opportunity of all So by less and there's our become of to able XX% great us a footprint that, advantage online for more without than online orders expand other filled to we'll orders be that the words, are efficient. In

be would manufacturing a broke. were they that business, If

is the enormous issues the So ordering we out. get straightened can that online are help and reality

inventories out of right of of terms and So wheelhouse. in our both the are in stock the counts what's the problem value

sales won't we to accurate of will So online to actually, it'll grow, is probably it on extent people than of go almost as a needed help the shelf. a ever where will more be higher, certainly do percentage ordering gone, back what's was, what shrink it when COVID probably keep certain it counts but is to

positioned. good feel we're So again, about we where

Thomas Forte

Great.

for generation, imagine would So lot a how cash What you characterize current you – front. sheet would your of you M&A last question opportunities M&A me, with strong have flow and would balance on a strategy? I the

Randy Fields

candidly, There of will to probably our the us we execution, of couple pressure still opportunities up, people last that are down in et of at heads of we terms financial some going like are important been feeling. eight creates lots to environment feel projects wrap Well, a weeks, cetera. critically that we've in own technology. ongoing But could the the six current things looking be forward because

eyes are of take be to advantage our to want would were and that. to So along, able open we if something come certainly

Thomas Forte

right, Stay my thank you for questions. taking well. Good. All

Randy Fields

you. Thank

Operator

of Group Ladies you time out time and question-and-answer of end reached And thanks City and call. gentlemen, for for we we're today's have the participation. session. Park your the

this time. You may at lines your disconnect

ReposiTrak (TRAK) 15 May 202020 Q3 Earnings call transcript