Good day ladies and gentlemen and welcome to the Asure Software’s Corporate Conference Call. My name is Shirley 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. I would now like to turn the call over to Cheryl Trbula of Asure Software. Please proceed.

Thank you, Shirley, 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 may be made on this call that are not historical are subject to a number of risks and uncertainties that could affect their outcome. 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’ll 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?

Thank you, Cheryl. And I’d like to welcome investors and trusted parties analysts clients and employees to our second quarter call. The second quarter of 2014 was an eventful quarter for us a solid quarter for us and it gives us optimism for the future. Some key developments in the quarter we’ve been working on our sales strategy and hiring of the sales people for about a year and half. In the second quarter we achieved very, very strong results in bookings we were up 83% over the previous year. Some big deals that we had KPMG, PWC, PSSI reflect the global changing nature of our business we focused on the mobile global and technology companies and employees and we want to serve them well and the SaaS bookings in the second quarter being up 83% was an outstanding number for us. It also led to our first seven figured deal which we are very proud of and now we move forward to implementing those deals. SaaS revenues grew double-digits 10%, overall our revenue growth of 4% reflects the changing nature of our business, we told you for sometime now that we’re really committing to a global SaaS company and the SaaS revenues come on a reoccurring basis, reoccurring revenue was up to 78% of our business and it reflects the changing nature of our business. We were profitable this quarter and this is the first quarter in quite sometime that we are profitable we had a profitable quarter last year that was due to a one time sale, this is profitable with really no one time events happening in the quarter. So we are very pleased on our progress with profitability. Gross margin was high, reoccurring revenue was high and our EBITDA was ahead of the previous quarter. In…

Thanks Pat. Good morning everyone. I’ll take a few minutes to go over the second quarter financial highlights and then we will be happy to answer any questions during the Q&A period at the end of this morning’s call. In the second quarter, revenue was up $6.5 million, a 4% increase from the $6.3 million reported for the same quarter last year. Year-to-date revenue was up $13.1 million, up 7% from $12.3 million reported for the first half of 2013. The year-over-year increase in the second quarter and year-to-date revenue is comprised primarily of increases in cloud revenue professional services revenue as we continue to emphasize our integrated cloud-based solutions. As compared to the second quarter of 2013, cloud revenue increased $325,000 or 10%; professional services revenue increased $200,000 or 31%; hardware revenue, on-premise software license revenue, and maintenance and support revenue decreased by $273,000 or 11%. As compared to the first half of 2013, year-to-date cloud revenue increased $561,000 or 9%; professional services revenue increased $447,000 or 39%; and hardware revenue increased by $96,000 or 11%; on-premise software license revenue, and maintenance and support revenue decreased by $300,000 or 7%. Our AsureSpace revenue was $3.8 million for the second quarter, an increase of $395,000 or 12% from the $3.4 million recorded for the second quarter of 2013. This increase was primarily due to an increase in cloud revenue, hardware revenue and professional services revenue. AsureForce revenue for the second quarter was $2.8 million, a decrease of $143,000 or 5% from the $2.9 million recorded for the second quarter of 2013. This decrease was primarily on legend product revenue and was offset by an increase in AsureForce Time Cloud and Professional Services revenue as we continue to upgrade and transition our legacy AsureForce products over to our latest product offering.…

Kristi thank you. As we look forward we’re excited about the bookings we had this quarter. We’re excited about the progress we’ve made on profit. This was the first quarter that the refinancing of Wells Fargo took hold and you can see it in the net income line, so we’re very pleased with that. We’re also pleased with our two acquisitions. We think Fotopunch will enable us to go global and mobile in the area of time and labor software. We think there is a huge market for that, it fits our strategy very nicely. It also takes our average client per pay to about $100 per employee per year as they have and developed the integrated products, hardware and software strategy, as far as Roomtag we are very, very pleased that we are able to make that acquisition as well. We like the product capabilities at Roomtag, we think it fits our global real estate strategy and asset strategy very nicely, we think it bridges traditionally AsureForce and AsureSpace when we go to the client. Our value preposition now is One Asure and it takes our overall client cross sell opportunity and per employee per year strategy ultimately to couple of hundred dollars per employee. So that allows us for a foundation of growth, from a technology perspective it fits very nicely into our initial architecture, we are innovating with technology and rolling out products to serve our clients, our client councils both in Europe and United States they are helping to drive that innovation and we’ve had some success with sales as a result of that innovation. So as we look forward, we are very excited about the business we’re transforming from a kind of a turnaround to growth story to now a growth story in a profitable company. And we have guidance out for the year, it is a step up on revenue side but we are starting to have bookings to support that. I think as I look into the second half of the year installing the business in getting the clients lined up at the appropriate time probably is our biggest risk. But that’s a nice problem to have because a couple years ago it would have been a bookings issue or would have been a revenue issue. So we are starting to line up the appropriate way still have a lot of work to do but we are very optimistic for the future. I'd like to thank you for your interest in Asure. And at this point in time, I'd like to turn it over to any questions.

Thank you. (Operator Instructions). Our first question comes from the line of Jeff Houston from Barrington Research. Your line is open.

Hi guys, thanks for taking my question.

Hi Jeff.

Hey Pat. Its' great to see the 83% increase in SaaS bookings and the large transactions, few questions about that. How were these deals structured, what was the link of the contracts and depend terms is it the front monthly and then (inaudible) lines when should that booking start to show up in deferred revenue and then also into revenue?

What was the third point there after deferred Jeff I didn't hear it?

Just one the great bookings in the quarter, when that's going to translate in to deferred revenue and also into revenue kind of ties in with the contract terms and the payment terms as well?

Yes. So couple of different questions within that, one of our large contracts, we should see the cash either in the third quarter to fourth quarter and we should see a decent amount of revenue in the third quarter or fourth quarter. I would say fourth quarter at this point in time, but we're still working with delivery and working with some of the project plan. And as far as another one of the bookings that we had. It's a project that we're rolling out at several different organizations or locations I should say and all those locations will recognize revenue as we get to each location. Their headquarters is being implemented next month and that will roll over probably about 18 months or so. So, it's a phased in implementation over 18 months. And from a cash perspective we will recognize cash and revenue as we implement the phases.

Okay. And then following up about the acquisitions, what was the purchase price for Roomtag?

It was $1.7 million and $1 million was upfront, or so there was some cash involved but let’s say a million dollars upfront and then it was about $760,000 in a very small interest bearing note over to course of 27 months or so.

Okay. And for the two details, how much revenue do you expect those two to contribute for 2014?

Jeff, from a run rate basis probably in the area of $400,000 or so and that would be with software and then expected hardware. We do think that there is some, either some upside in the end of '14 and certainly in '15. Some it is just too early to tell. We've completed both acquisitions in the last 40 days. So we're heavily having conversations and rolling out some of the products and services so some of it's to be determined, but that's what’s in the plan so far.

Great. And then how will the capital structure look post the deals, cash, the loan facility and revolver, just trying to get a sense of what post the deal -- how the balance sheet is going to look?

Yes. We did -- on a balance sheet front, there was a small note or excuse me, small conversion of $250,000 that this quarter we couldn’t -- the note holder converted debt to equity, so that no longer will be part of debt. And then the two deals were about $3.25 million in cash and note, $2.5 million off the revolver and then $0.750 million was a note. So, from a debt perspective, call it we’ve added $3 million on debt, now we have about a $200,000 payment in principle to Wells Fargo and that will be at the end of the third quarter. You'll see that show up in the financial statement.

Great. Then last question is kind of two part question is the wins in the quarter, were those legacy clients? And then looking at the sales force productivity; is it still at about 35 sales people and how do you kind of measure their productivity? Thank you.

Yes. And just on wins, they were mixture of current client. They were all, actually one was new client, a couple of current clients; in some areas, it was new geography. And our land and expand and reaching out to global capabilities, our current clients obviously want to participate in that. There was a new client as well in that effort. And then as far as sales force productivity, right now we're at about 30 sales people, there is some turnover we anticipate will be about 32 or so in the second half for the year. Some of it’s our focus in not only the mid market but also the enterprise clients, we are -- our sales are trending up market a bit and that’s just with the functionality that we’re developing. And as far as sales force productivity, we measure off quota men months and what have you. And we’re pleased with the progress that we’re making and the experience [Technical Difficulty] overall the color I would give you is the reps that have been here while we’re very pleased with and happy with their production. The new hire reps, we are not getting on line as fast as we would like, so we’re putting more of an emphasis on training and working through the value proposition with our products and we -- in fact, we had a number of training sessions here in the July timeframe. So, we’ll continue to work in that area.

Thank you.

Thank you. (Operator Instructions). And it looks like we have a question from the line of [Mike Chadwick], a private investor. Your line is open.

Hi, Pat. Thanks for taking my questions.

Sure [Mike].

So, just a couple of quick questions here, in regards to FotoPunch, you had in your public filings the earnout payments based on meeting various revenue goals over the next couple of years. Can you provide us some color on what types of channels the revenues are expected to come from, either direct sales or indirect licensing?

Good question, [Mike]. Obviously we are hoping direct sales will continue to drive number of different revenue. We have spoke to some indirect licensing opportunities. And while I can’t tell you we have anything right now, we certainly think that there are some opportunities with global security, with security going increasingly more face recognition and that leads to some of our clients have some very interesting enquiries around how they standardize global security. We think there is opportunities there. The revenue, we do have a licensing strategy around markets that we are not in directly and hope to have some success in that area and also direct, we landed our first seven figure deal partly as a result of FotoPunch and feel like there is more deals out there.

Great. And in terms of the seven figure deal, I know there was another question asked already and answered but can you give us a little bit of color in terms of licensing model associated to that?

It’s a pro location. The client has a number of locations. And we will bring on an integrated hardware, software solution for them at each location headquarters. And I think the first 10 will be installed quickly in this third quarter. And the roll out will take about 18 months and each time we get a number of different locations turned on and the revenue will start with that.

Right. And your rest of the projections for the remainder of the year that's assuming the low-end of the guidance say 29 million, it looks like your currently forecasting an additional $16 million in incremental revenue in the back half of the year. And so if we divide that in half a quarter of that's roughly in $8 million quarterly revenue run rate, which would be over a 20% increase at the current run rate we've ran for the first half of the year, which would be certainly significant and much higher than the high water revenue mark we got in the fourth quarter 2013. So certainly if that’s the case and then looking forward to seeing those results and it sounds like this large deal maybe a part of that?

Yes, I mean I think Mike just in general the first half of the year, I think we budgeted about 73% recurring revenue because we have integrated hardware software strategy currently we are at 78. So the second quarter revenue at 65, the good news is that recurring revenue will continue to go into the third and fourth quarter, we do have a number of different big deals that we're pleased with the 83% bookings July was a good month, the two acquisitions we think will contribute. So I think there is a number of factors that contribute in the second half for the year going up and I think we have some momentum in the business. I think it's all about how fast we grow and then from a profit perspective, we've continually made progress in last year at this point in time. I think we've been able to grow and still be up year-to-date about 450,000 of EBITDA or so. And we think that we will improve the EBITDA in the second half based on last year and based on the first half as the revenue comes in. So, it is a transformational business. It's now a growing business. We’ve recognized that it's a step up and it's a step up with consistent improvement in results and the fact that we're profitable after refinancing at the 65 revenue number. I think gives us comfort that as the revenue does come in, we'll be profitable.

Yeah. And your comments regarding profitability, I assume that there is going to be some margin improvement as well given the fact that you know own (inaudible). You're not a third-party licenser of the product so we should see some margin improvement there as the sales ramp as well, is that correct?

No. I think margin improvement it’s something we focused on and I think certainly at the numbers in the year now if we can hit those numbers certainly we would be improving our margins quite a bit.

Great, excellent. Thank you.

Thank you. (Operator Instructions). Our next question comes from the line of George [Milaows] from MKS Management. Your line is open.

Thank you. Hi Christy. Thanks for taking my question.

Thanks George. Nice to talk to you again.

Thank you. Just trying to understanding a little bit better sort of the last questions regarding the projection for the rest of the year, there is lot of great things happening, yet it still seems like an ambitious call to try to hit the guidance. How much to those – I think you said that the two acquisitions would have a run rate of 400,000 does that mean that they would contribute roughly 200,000 in the second half?

No. I think the $200,000 would be roughly what they would contribute, less any sales that happen. So, we do believe that there is going to be some sales and cross sales within the product line that we have. And so, we think that there ultimately will be more, but the run rate business that we acquired was above that.

Okay. And right now you had 78% recurring revenue. Do you expect that to happen as well in the second half, because with recurring revenue it's just harder to grow your revenue sort of it's hard to have a big increases in the record, into the revenue?

No, George good observation and good point. I think the first half of the year, I think I mentioned that we saw -- it would be closer to 73% or 72%, I mean I think the second half, I think you'll see us with reoccurring revenue a little bit lower, our focus is clearly on the cloud, but it's also an integrated hardware software strategy, we do think that there will be some one-time hardware associated with the cloud and with some of the rollouts that we have. So, I could see that percentage going down a bit.

Down a bit from the 73% or from the 78%?

From the 78%. So,

Okay.

Say it would be closer to the 73%.

Okay, great. Okay. And so congratulation on this large deal, that's seems like a big milestone for the company. Do you have other such deals in the pipeline or was that a fairly unusual situation?

Well, clearly we're -- first of all the name brands the three that we mentioned, we're very thrilled to be associated that type of company that those three brands would suggest. We are going up market, our technology is becoming recognized and leading up forefront of a new frontier here. And so we’re really excited about the kind of customers we’re partnering with and we think that this is no accident that we’ve had -- had us in bigger deals. I think we anticipate bigger deals in the future, but this is also a first. So, I am very optimistic that we’ll get more deals like that. And we’re thrilled to be in this position but we’re also still learning. Some of the management team come from backgrounds where some of these deals we’ve had on a quarterly basis or so. We hope to get there. I want to say that we’re still early in those days. So, I don’t want to say, we’re going to do $7 million -- or seven figure deals every quarter, yet but certainly that will be the expectation over time, but we’re still early in the movie.

Okay. And those deals were both on the force and the space side?

Yes. We had success in force and space. And clearly we see deals emerging of nice size in both areas. And I think with the acquisition of Roomtag, really what it’s allowed us to do is start to elevate our value proposition where no longer we’re going to be force or space but clearly we can help clients with their technology, strategy around their employee costs, their real estate costs and keeping track of their assets. And we think that story is a much bigger story than we’ve been positioning, it gets us in to the sea sweep and we’re in talking to the sea sweep big deals can happen. And so we’re clearly focused on training our sales people, getting our management team, getting our products aligned to new strategy because we feel like we can make bigger and bolder change in the future. So still early days, but we are really excited about it.

Okay, great. Good luck.

Thank you, George.

Thank you. (Operator Instructions). Alright, and at this time, I’m not showing any further questions. I would now like to turn the call back over to Pat for any closing remarks.

I really like to thanks everybody for participating on today’s call. I'm sure those of you that have been with Asure for the last five years, have seen the transformation and have seen the results. And we have achieved great things, five years ago almost to this quarter or to this date when we inherited this company it was 10 million lose in 10 million. We’re starting to get in an area where this is pretty excited we are partnering with really good clients and have some really good optimism for the future. I’d like to thank our employees who make it happen everyday and work so hard and look forward to showing you the progress. And thanks for your partnership. Have a great day.