Good day, ladies and gentlemen. And welcome to Asure Software’s Corporate Conference Call. My name is Stephanie, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer session towards the end of today’s presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now turn the call over to Cheryl Trbula of Asure Software. Please proceed.

Thank you, Stephanie, and welcome everyone to Asure Software’s conference call. Before we start, I’d like to mention that some of the statements made by management during this call might include projections, estimates, and other forward-looking information. This will include any discussion of the company’s business outlook. These particular forward-looking statements and all of the statements that maybe made on this call that are not historical are subject to a number of risks and uncertainties that could affect their outcomes. You are urged to consider the risk factors relating to the company’s business contained in our latest periodic reports on file with the Securities and Exchange Commission. These risk factors are important and they could cause actual results to differ materially. This call is also being recorded on behalf of Asure Software and is copyrighted material. It cannot be recorded or rebroadcast without the company’s expressed permission and your participation implies consent to the call’s recording. After we have completed our review of the quarter, we will open up the call for questions from the financial analyst community. I would now like to turn the call over to Pat Goepel, CEO of Asure Software. Pat?

Thanks, Cheryl. And my name is Pat Goepel, and I would like to welcome investors, analysts, clients, employees, and interested third-parties to the second quarter call. First part of the call we’ll talk about operational performance and some of the initiatives and Jennifer will talk about the actual results and then we will close the call with a little bit of a look ahead for 2013 and also some non-operational activities that we have going on at a share. In the second quarter, we had a very solid quarter. Operationally, we saw revenue growth, bookings growth, SaaS bookings growth year-over-year, gross margin, operating income, and net income, all were not just minor increases, but healthy increases. The integration of PeopleCube is one of our initiatives and it’s now at the advanced stage where we are really talking about growth opportunities in the future. Our clocks have been taken out as evidenced by our recent hosting consolidation, where we say it’s approximately $1.2 million annually. We did see those cost reductions happen in the second quarter. Our European initiative has gone very well and we were very thrilled with Scottish Water for choosing us as their partner. This multiple year SaaS deal and our partnership with British Telecom, where we saw $50,000 a year in annual revenue and we have more partnerships in Europe on the horizon and more types of clients like Scottish Water in the future. So, that was an example of success. Our land and expand strategy is continuing to bear fruit. Notable expansions were Moody’s, Federal Reserve, Staples were engaging clients in much more of a strategic way and we are selling more products. Our SaaS conversions are happening at a steady pace. We would prefer in the original plan for them to happen more quickly, but the strategic value of these conversions, are leading to SaaS conversions and additional products for which we are very grateful. Our client satisfaction and services teams are working very, very hard and case backlog is now about half of what it is or what it was a year ago. And our client retention is now approaching 90%, both AsureForce which has had very, very strong client retention and AsureSpace have really shown a nice increase in client retention. New products are now getting to our clients and we are very grateful and happy that we’ve sold now GeoPunch and we expect 20 clients to be live by the end of the third quarter. This bodes well for 2014 and in the AsureSpace we have a new client and a re-launching of PeopleCounter. And we think 2014 revenue will be expanded as we rollout that product. So, all-in-all, a very strong quarter operationally and here is Jennifer Crow, our CFO with the specific results.

Thanks Pat. Good morning everyone. I am going to take a few minutes here to go over the second quarter financial highlights and then Pat and I will happy to answer any questions during the Q&A period at the end of this morning’s call. In the second revenue is at $6.3 million, a 5% increase from the $6 million in the first quarter of 2013 and a 50% increase from the $4.2 million reported for the same quarter last year. Year-to-date revenue was at $12.3 million, a 47% from that $8.4 million reported for the first half of last year. The quarter-over-quarter increase in revenue was due to an increase in our cloud SaaS-based revenue of $72,000 as well as additional increases in our on-prem, maintenance and support, and professional services revenue. The year-over-year increase revenues were driven by the acquisition of PeopleCube that we did in July of last year. Our non-GAAP revenue this quarter was $6.1 million and $12.6 million year-to-date. This difference between GAAP and non-GAAP revenue for the quarter is $146,000 and $363,000 year-to-date. This amount represents a charge that was incurred against revenue as a result of the business combination accounting rules that require a fair market valuation of the PeopleCube deferred revenue as it is amortized into revenue in each period. I just wanted to point out that this is almost complete and the remaining amount of haircut to amortize in the second half of the year is $53,000. Recurring revenue for the second quarter increased by $153,000 or 3% over the first quarter to $4.9 million. Recurring revenue as a percentage of overall revenue slightly decreased to 78% as compared to 79% in the last quarter, yet increased from 70% year-over-year. Our new annual cloud bookings decreased by 10% as compared to the…

Thank you, Jennifer. And we hope you agree we’re pleased with good solid performance in the second quarter. As we look ahead, we did refine our guidance in the – our annual guidance to $25 million to $26 million revenue and $4.8 million to $5.5 million in EBITDA with one-times. We feel the predictability of the business is there. We feel we’re improving quarter-over-quarter. We have good line effect quarter-by-quarter. And when I step back and annually look at it, our reoccurring rate is 78% in the second quarter, our original plan was about 73%, that’s roughly five points that we will pay off next year and getting reoccurring revenue for the business is very, very solid. Also our gross margin was starting to get back to where we were pre-PeopleCube acquisition that bodes well for the future and the expansion of the model. Our clients are staying with us at 90% rate in cliff. So, we are thrilled with that because that will bode well for the future of the business in the second half of the year. On a non-operational side, I do want to comment a little bit on the legal front. We have a couple of PeopleCube issues to complete. We do expect settlement in our favor in August of roughly $350,000 to $650,000 in working capital dispute, that dispute is with an arbitrator and we are told that that process will be completed in August. We did have a seller note in the PeopleCube acquisition. We have $3 million of the seller note. We do have some indemnification claims against that $3 million and we expect settlement sometime in 2014. We’re also responding to a PeopleCube claim and we have contacted our insurance partner they have agreed to financially help us to defend lawsuit. We…

Thank you. (Operator Instructions) Our first question comes from Matthew Paul with Sidoti & Company. Your line is open. Matthew Paul - Sidoti & Company: Hi, Pat, how is it going? Thanks for taking my question. Regarding conversions to SaaS contract, is there a kind of the metric you would use to grade the performance so far and just trying to get an idea of how many customers are preferring to stay on the license?

Matthew we have to get a little bit better on the metric in regards to that, what I would say is first of all our CSM, customer service management is over 100% in quota as a group. So, we thrilled about that statistic. When we do engage – the CSM engages a client more and more we’re looking at multiple-year plan. When we look at some of the additional products that we’ve rolled out or additional locations that we’re starting to go after, some clients are saying, hey I would like to go to SaaS, but maybe I would go to SaaS in a couple years. What I would like to do now is buy a panel or buy a clock or can you set us up at a second location. We enjoy that and like that because that locks client in from a retention perspective and it gives us additional revenue. It doesn’t perhaps give us as much revenue as the full SaaS conversion. So, that’s the issue that we have. I think we will have a metric that will define it, but this year really with the amount of adding 12 sales people and going after quota is how kind of define that. But when we look at reoccurring revenue we keep track of SaaS which is approximately 50% of our revenue. We will have to take that down to individual SaaS conversions and we haven’t done it yet. Mathew Paul - Sidoti & Company: Okay. And you touched upon this in your answer, I want to ask are we still on track to hire 12 sales people, how many we have hired so far?

We have hired the 12 sales people and completed that by the first quarter, what we have had is some turnover in the sales department, some is at Asure’s request and some of it is their personal choice. Right now, I think we are about 28 or so headcount and that number we want to consistently be at 32. So, we will continue to drive to be at 32. Right now I think we’re at 28 with the turnover. Mathew Paul - Sidoti & Company: So, is it – how many – how large of the sales force grown this year and a net metric and how large do we see expect to growth by the end of the year?

We started the sales expansion with 20 sales reps, so we’re growing 12. Right now, we are at eight and we will complete the year at 12. Mathew Paul - Sidoti & Company: Okay, so we expected that have a net increase of four people for the rest of the year?

From second half to or from right now to-date till be end of second half, yes. Mathew Paul - Sidoti & Company: Okay, thank you and last question regarding your gross margin you know you’ve reached pre-acquisition levels at 76.5%, which is kind where I want to ask if you think it’s going to stabilize around here, we’ve certainly seen a nice increase from the first quarter?

I think we did make some investments in the fourth quarter last year. In gross margin we also looked at the PeopleCube model and felt that there were some opportunities to drive that up. And I think pre-PeopleCube we were at about 82%. I don’t think it goes linear, where it will be straight up, but we do anticipate improvement over time in our gross margin and then kind of a benchmark that I shoot for is 80%. Mathew Paul - Sidoti & Company: Okay, thank you.

Thank you, Mathew and thanks for coverage. I appreciate it.

(Operator Instructions) Our next question comes from Zack Buckley with Buckley Capital Partners. Your line is open.

Hi, Pat. How are you doing?

I am doing well, Zack.

I was curious Q3 2013 now will show clean year-over-year organic revenue growth is that correct?

That is correct.

So, from the guidance that you are putting out there, you are sort of assuming I think the number is about 11.5% to 17% organic growth in Q3, is that…?

Right. That is that sounds right on Zack.

Okay. I just I wanted to double check that and then also…

And I think Zack I apologize the other thing about that is that I think assuming that revenue growth and taking look at our EBITDA guidance what it also shows is that we are a 20 plus EBITDA company, which we also think is an important milestone. So, you have double-digit revenue growth and over a 20% EBITDA less any one-time company and that’s all organic. So, also you have a management team that is integrated for acquisitions or so in the last year and a half or two years and the good news about that is it really kept us for further growth and further expansion.

Alright. And then on that note, what I am running math it looks like Q4 in order to get your year end guidance would have to be, I am assuming the midpoint of Q3 guidance, Q4 has to be about $1.5 million to $2.2 million of EBITDA. So, I guess my point is it looks like you could sort of end the year at a run rate of $7 million to $8 million for EBITDA is that about right?

I think some of it depends on mix and we’ve been active in some of the initiatives around controlling our costs. So, what I would say is we expect to improve 300 or so or 400 or so every quarter if we get the right mix then the right large clients and what have you. I think from a modeling perspective I don’t know if I see $8 million, but I think closely...

No, I just mean run rate would be $7 million maybe in the $7 million range?

Oh, you mean from EBITDA?

Yeah, yeah, that kind of…

From EBITDA perspective, absolutely I do think you would see a run rate towards the $7 million and $8 million EBITDA as we exit probably closer to $7 million, but absolutely that kind of run rate. And the nice thing about that is we have a very consistent pattern of improvement as we go into next year and we will continue to look for growth initiatives going forward and acquisitions on top of that.

Got it. So, I am assuming you expect to grow the business in 2014, is that a fair assumption?

That is a fair assumption.

So, I guess before exiting the year at $7 million EBITDA run rate I mean it’s fair to say that 2014 should be $7 million plus?

Yeah, we are not guiding.

I am not asking for guidance, I just want to…

2014. Yeah, what I would say is we will have at the appropriate time a call where we’ll look at the investment opportunities for growth versus EBITDA and including EBITDA, and we will be very forthcoming in our – and transparent about our guidance for the year at the appropriate time.

Alright. Thanks a lot. I appreciate it.

Thank you, Zack.

And I am currently showing no further questions. I will now turn the call back over to Pat Goepel for closing remarks.

Second quarter of 2013 was very strong quarter for Asure. We are very fortunate to have great clients, great employees and very good shareholders, so we are very, very pleased to be in the position we are in. We feel really good about the position we are in as we entered the second half of the year. We think we have opportunities in the global marketplace. We are thrilled with some of the opportunities that we have in Europe. And then we are thrilled with the progress we are making in the business. We think some of the opportunities will be operational, we think we also have opportunities that will set us up for future growth over the next few years. And the next conference call, which will be the third conference call probably mid-November, we will keep sharing our progress and we appreciate you and your interest with Asure. Have a great day.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. Thank you and have a great day.