Good day, ladies and gentlemen and welcome to Asure Software’s Corporate Conference Call. My name is Amanda 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, Amanda and welcome everyone to Asure Software’s conference call. Before we start, I would 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 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?

Thank you, Cheryl. And I would like to welcome everyone to our fourth quarter call. And our fourth quarter call is unique and then it’s also our annual call for all of 2014 and then we will give preliminary guidance for 2015. So, we have a lot on our agenda today. We would like to welcome investors, shareholders, analysts, clients and employees and other interested third-parties to our call. And I will begin by covering the fourth quarter and 2014, Brad Wolfe will deliver the actual results for the quarter and the year, and then I will close the call before we have any questions with some comments on 2015 and guidance. For the fourth quarter and 2014, the fourth quarter was a solid quarter. We achieved revenue growth. It was our second highest revenue quarter since I have been here and I was pleased with the continuing improvement. I do think we were a little bit light in revenue and would like to see those numbers a little bit higher, but a good, solid quarter for us on revenue. As far as other key indicators, most of them were up and we were pleased with the continuing progress of the business in the fourth quarter. We are also in the fourth quarter looking to set up for 2015 and expenses little bit higher in that we are going to grow. So, we are on the lower end of the range with the exception of EPS, which we were slightly below. As far as key sales in the quarter, we had Deutsche Bank, King Saud University. We had developed a global strategy in 2014. We are very pleased to hit and succeed with King Saud University, which is an expansion geographically for us. Dynamex and the AsureForce side was the…

Thanks Pat. Good morning, everyone. I will take a few minutes to go over the 2014 fourth quarter financial highlights and then we will be happy to answer any questions during the Q&A period at the end of the morning’s call. In the fourth quarter, revenue was at $7.1 million, a 6% increase from the $6.7 million reported for the same quarter last year. Year-to-date revenue was at $27.2 million, up 7% from $25.5 million reported for the same period of last year. The year-over-year increase in both fourth quarter and year-to-date revenue is comprised primarily of increases in cloud, hardware and professional services revenue as we continue to emphasize our integrated cloud-based solutions. As compared to the fourth quarter of 2013, hardware revenue was increased $194,000 or 28%. On-premise’s software license revenue increased $92,000 or 47%. Cloud revenue increased $72,000 or 2%. And maintenance and support revenue increased $30,000 or 2%. Professional service revenues decreased $19,000 or 2%. As compared to 2013, year-to-date cloud revenue increased $841,000 or 7%. Professional services revenue increased $686,000 or 26%, hardware revenue increased by $487,000 or 23%. On premises software license revenue and maintenance and support revenue decreased by $282,000 or 4%. AsureSpace revenue was $4 million for the fourth quarter, an increase of $187,000 or 5% from the $3.9 million recorded for the fourth quarter of 2013. This increase was primarily due to an increase in cloud revenue and on premises software license revenue, offset by a decrease in professional services revenue. AsureForce revenue for the fourth quarter was $3.1 million, an increase of $183,000 or 6% from the $2.9 million recorded for the fourth quarter of 2013. This increase was primarily in hardware and professional services revenue offset by a decrease in cloud revenue. The current revenue as a percentage of…

Thanks Brad. And I want to thank Brad for his efforts. Brad joined just in first week of October and has done a great job digging into Asure and digging into year end process. He has done a great job and look forward to a fantastic 2015. For 2015, we have four big initiatives operationally or internally. One is growing globally. We are going to our clients actively. We are no longer defensive in those conversations. We are actively growing with our business partners and our company partners globally and we think that we can achieve tremendous results, looking at this sales process and our client engagement processes from a global perspective. We are now in 80 countries and global is not a novelty, it’s a way of doing business and we feel that we have a great story for them, especially now that we have mobile products, we have hardware, kiosks or panels, we have a bring-your-own-device strategy, number of different ways for clients to engage with us that our software and hardware related to go globally and it’s been very well received. So, that’s one of our big initiatives to grow. Two, we have an on-premise to on-demand initiative. And what that means is we are taking some of our legacy products and we are going to sunset or retire them over time and then we are going to go to our clients, now that we build out our SaaS or cloud software to a level of satisfaction for all our clients and encourage the migration and the next generation of our services. We think the client value proposition is great. We think the market acceptance is great. And it’s been a fantastic experience for them. So, we are actively having an initiative internally to grow with our…

Thank you ladies and gentlemen. [Operator Instructions] Our first question comes from Jeff Houston with Barrington Research. Your line is open.

Hi, Pat, Brad, and Cheryl. Thanks for taking my questions.

Thanks, Jeff.

Yes, to start off with, you mentioned that the pipeline is strong, but closing needs to be improved a bit due to a newer sales force and moving upstream to bigger deals. Could you provide some more color on the pipeline? What is the mix between Force and Space with seven-figure deals? And we are pretty far along here in the first quarter, has there been any progress on closing anymore deals in either of those two product lines?

Yes, I think – Jeff, I think couple of things. One, we are consciously with our acquisitions and with the building out of our products. We have gone up market. And I think we hired people usually in the January timeframe. We trained them I think pretty well and Mike Kinney personally takes the responsibility. He has done a nice job of getting in trained classes, but I think what we found is we have pretty good – pretty good sales funnel. What I think the move from the mid-market to slightly up market or more comprehensive solutions whether that’s mobile, the integrated hardware with panel as well as the cloud, what we are finding is that sales cycle an extra 30 days or so. And then I think what we are also finding is purchasing departments have gotten more involved and there is more sign-off to the process. So, what I would say is first quarter seasonally is usually not a very strong quarter for us. Historically, we go up by quarter. I think you will see that we will have a really strong first half of the year. What I would say is first quarter we are in that last week where we have several deals whether they fall into the first quarter or second quarter, don’t know yet, but what I would say is first half of the year looks strong. I think AsureSpace and space with the concept of this hoteling, hoteling is gaining really a lot of traction quickly. We are bidding on that and we have several big deals in the pipeline as well as several very, very strong interested partners in hoteling. So, we are excited about that opportunity, but AsureForce, I think our cloud activity has been very brisk and we are very pleased with the pipeline in that area, but we do have to close. And I would say that first half of the year we are going to really focus on that. And then the second half of the year, we think we will see continued improvement and so that’s kind of where we are on sales.

Great. That kind of leads into my next question about how we should think about growth and profitability trending throughout the year, it sounds like possibly it’s going to be a bit more back-end loaded?

I think over the last couple of years, I think you can see our results that typically the first quarter is the lightest on the revenue in the fourth quarter. Third and fourth quarters are the strongest. I think you will see very similar patterns in years past. I do think that’s just kind of the flow of our business, but that being said, I think we will have continual improvement throughout the year. I think we have visibility to a better year already than we had last year. So, we feel really good about that. And then if we have a chance for an outstanding year as some of these clients that are in the pipeline mature into sales and revenue opportunities. And just kind of we had $2 million sales in the history of our company. They both happened last year. The pipeline for that is tenfold, especially compared to where it was last year. That being said, it does take time to close those and we are relatively early in the cycle. So, I don’t want to pound the table that everything is great and everything is going to happen in the first quarter, but what I would say is we feel very strong about our opportunity to grow and our opportunity to improve on the business in 2015.

Great. And last question for me is looking – you mentioned mergers and acquisitions a couple of times in the dialogue, what type of acquisitions are you looking at, what spaces, is it mostly customer acquisitions and how big would you consider?

We feel very strongly Jeff about our platform strategy of what we built out the last couple of years. And our Petri dish if you will has been the business that we currently have. And we are migrating clients to the cloud and selling cloud and they have done a good job of overall of continuing to grow our cloud business internally. So, we feel that we are ready to add more clients to that platform. Brad’s initiative with straight-through processing will help us as well. Year ago, we went out and consolidated our back-end cloud environment and did a great job in doing that. Now, we are going to consolidate our back-end finance area with salesforce.com, where we have a straight-through order entry process. So, we are ready to take on more business in the current businesses that we are at. I don’t think you will see a third leg to the stool. I think AsureForce and AsureSpace is kind of where we are at. So, we are looking for those type of customers and to add to our platform, not necessarily looking for a technology acquisition at this point. We think we did that and we are a better company for that with FotoPunch and Roomtag. So, we are looking for clients. As far as size, I think a little bit bigger than historical. So, historically, we have taken a couple small acquisitions and added them. I think we would like to get a little bigger, but really we are going to look at the fit, but a $5 million to $10 million or maybe even a $15 million acquisition if we found the right one that would be accretive and in the same business that we are in. We think that would be a homerun for us financially as well as strategically.

Great, thank you.

[Operator Instructions] Our next question comes from Mohan [indiscernible]. Your line is open.

Hi, Pat. Hi, Brad. I have a couple of questions.

Hi, Mohan.

Hi, how are you?

Sure.

So, do you have the churn for 2014 versus 2013?

The retention rate?

Yes, the retention rate.

Yes, we – collectively we are about 91% on our retention rate.

Okay. And is it an improving trend from 2013 was it around the same last year level?

Yes, about the same rates of retention, maybe slightly up on the cloud business and perhaps slightly down maybe 1 percentage point on the on-premise business.

Okay. The next question was price increases for 2014, is that something that you can disclose across the Board what kind of price increases did you bring on the recurring side of the revenue or the stock?

Yes, our average price increase is at 4%, slightly lower on the cloud business and slightly higher on the legacy business.

Okay. And how do you compare versus the industry on the growth say the industry for that Force and Space is in, the rate at which they are growing and compare that to how Asure has done during the last couple of years versus how it’s done in 2014?

Yes, I think – so, a couple of things. Organic growth, we are continuing improving slightly. We are not growing at the pace I want to grow, Mohan. And I think the key for us is to deliver that in ‘15. And my initiatives are grow, grow, grow, because I think operationally I have got the platform now where I want it, but I got to grow as a company and that’s our focus. As far as the industry I think if I look at the industry whether it’s IDC or Gartner etcetera, I think we are growing at about the industry average, but I think with our lead in technology, I don’t want to grow at an average, I want to grow at a faster clip than the average. And I think there is great opportunity for us. And our challenge is to capture that opportunity.

Okay. And you referred to the sales force being ready and to take on the growth initiatives you have in place, do you have the number of sales force employees who are under 18 months versus who have been around for much longer?

Yes, I would say roughly, Mohan and you are asking me a question, I am just kind of giving you off the cup, but I would say about half is – well, probably about 60% is under 18 months in their tenure.

Okay, that’s most of the questions I had. I had one more question on the depreciation and amortization on the cash flow statement was $2,821,000 and in the P&L it was $1,999,000. So, I was trying to reconcile how the difference came about. So Brad, if you could help me out there?

I suspect you are going to depreciation – the other one is depreciation and amortization combined.

Yes, yes okay. So, I didn’t get the – okay, so the P&L doesn’t have depreciation and amortization together, it has only amortization?

The P&L you are looking at should have them combined together, I would have to look at…

Okay.

Do you mind calling offline?

Yes, we can look at it. That was the housekeeping question. Yes, that’s all the questions I had.

Yes, thank you Mohan.

We can catch up on the other question later. Thanks guys.

Yes, look forward to have future conversations.

Thank you. I am showing no further questions at this time. I would like to hand the call back to Pat Goepel for any closing remarks.

Yes, I would like to thank everybody for joining the call today. I hope you are pleased with the results and we thank you for coming along in our ride. Also what we did announce was I would take up to a 10% position plan on doing that. I am in the quiet period right now. So, it’s hard for me to do that, but second quarter I think you will see that. I invest alongside of you and I assure you I take our improvement and our company very seriously. So, I thank you for your investment and we will continue to deliver good results and we are looking for the breakthrough that we think we have if we can maximize our opportunity. So, that is our focus this year is to grow and we think if we grow, your investment will grow quite nicely as well. So, that’s our focus and we thank for your investment and thank you for your time today. Goodbye.