Welcome to Asure Software's Second Quarter 2016 Earnings Conference Call. Joining us for today’s call is Asure’s CEO Pat Goepel, CFO, Brad Wolfe and Director of Human Resources, Cheryl Trbula. My name is Karen and I’ll be your coordinator for today. [Operator Instructions]. I would now like to turn the call over to Cheryl Trbula to provide the necessary cautions regarding the forward-looking statements made by management during today’s call. Cheryl?

Thank you, Karen. Good morning everyone. 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 or guidance. 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. It will be made available for replay via links available in the investor relation sections of the company’s website at www.asuresoftware.com. After we’ve 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'd like to personally welcome everyone. Thank you for joining us for a second quarter 2016 earnings call. In short second quarter for Asure was a spectacular quarter. It's almost a new normal for Asure Software and why we're so excited is we believe that with the acquisition of Mangrove in the first quarter our results are not only really, really good but they represent sustainability going forward. High level summary of the quarter and main highlights, first of all the Mangrove acquisition which we acquired in March in the first quarter this was our first full quarter since we made the acquisition. It's already starting to bear fruit with Mangrove now fully integrated. We're able to realize the cost savings and we had some onetime charges in the second quarter that will go away here in the third. We talked about that in our last call. We're seeing cross selling opportunities materializing. We're excited about how that's coming together and what that translated into is time and attendance and work space wins into our payroll base, what's it's also translated into is HCM sales into our time and labor customers as well as their workspace customers. We did have immediate cross selling benefits of this acquisition. It is important to note that some of these benefits aren't live yet and they'll be expected to hit revenue in the fourth quarter of 2016 or the first quarter of 2017. As far as the financial highlights. First of all pick a metric pro-forma revenue gross margin, EBITDA they were all up in the core business of Asure performed very, very nicely that with the addition of the Mangrove acquisition and the cost synergies realized was announced in the quarter for. In fact their gross margin I was…

Thank you, Pat and good morning everyone. I will take a few minutes ago to go over the second quarter financial highlights and then we will be happy to address any questions during the Q&A period. As Pat mentioned the Q2 marked the first quarter with Mangrove as part of our operations. For those newer to the Asure story we acquired Mangrove in late March for $18 million in aggregate consideration which included $11 million in cash, the portion of which was used to pay certain obligations of Mangrove and a $6 million secured subordinary promissory note just subject to adjustment as provided in our stock purchase agreement. We funded the cash payment with proceeds from our credit agreement with Wells Fargo, we also acquired the assets of Mangrove COBRAsource, a benefits administration service business which at the time was a wholly owned subsidiary of Mangrove. The aggregate consideration for these assets was roughly $1 million with Mangrove COBRAsource supply of certain with Mangrove COBRAsource applying payments to certain loan balances. That's earnings to our financial results for the quarter ended June 30, 2016. As Pat mentioned flat bookings for the quarter decreased due to a large customer win in Q2 of 2015, although our total bookings were up 17% year over year. Revenue for the second quarter was up 35% to $9.7 million from $7.2 million in the same quarter last year. The improvement in revenue was driven by increases in cloud, hardware on-premises software and professional services revenue. Our recurring revenue as a percentage of total revenue was 72.1% compared to 77.1% in the prior quarter and 69.9% in the second quarter of 2015. On a pro forma basis including the results of Mangrove as since the acquisition was completed on January 1, 2015 our total revenue increased…

Thanks, Brad. The Mangrove acquisition is a reminder, the reason the acquisition was so important to us is it's really transformational for us because it launches into the massive growth opportunity of human capital management space. Yet big companies like work day, ultimate software, [indiscernible] paychecks and I get asked what allows you to think that you can compete in that area and for us -- because we're already in the workforce -- in the work space as it is what the market is looking for is integrated solutions around the lifecycle of an employee from hire to retire or some will say from womb to tomb and now we're able to provide those services on behalf of our clients and what we're able to do is bring technologies like facial recognition and sensors to the table that brings this massive market, some say about $20 billion opportunity and that's just really North America specifically it expands worldwide. But we bring in new technology and service offering to this marketplace. We're excited about the opportunity we also have about 7000 clients that we can cross sell to and we take an average of $120 per employee on one of our products and now it gives a potential of $500 per employee per year to provide a good offering to our clients in the market. It's clear that the market is increasingly mobile and digital and those technologies are looking for companies to actively use the mobile market to recruit, manage, pay analyze their workforces in work space more effectively. Despite it's size the market is pretty fragmented and there is no current provider being a clear cut leader in the space. Lots of room to capture market share and because it's a back office function in many ways in some…

[Operator Instructions]. Our first question comes from the line of Jeff Houston from [indiscernible].

It's great to see the increase in guidance and the strong 35% growth in bookings. Could you talk a bit about what the mix was between ForceBase and Mangrove in the increased guidance, it sounds like maybe a lot of it came from the synergies with Mangrove but a little bit of color there would be great.

Jeff, I think just on the revenue side I think last year we had really strong sales but our backlog probably we didn't implement our global deals as fast as we thought we would. So on the revenue side, our core business was strong and we think it's going to continue to be strong from a growth perspective. The human capital management side the integration and the cost synergies we're able to take our look quicker than we would have thought and so we're pleased on that side to have an integrated time and labor management with the human capital management business and so it's a combination of those two things, the growth of the backlog turning into revenue and the core business and the integration opportunity with the acquisition of Mangrove. Those two things that really led us to continue our guidance. As far as some of the details behind that will be in the Q which were release today but suffice to say really all areas of our business hit very well.

And then it sounds like cross selling was also a very strong with the Mangrove base, can you talk a bit about what the company sizes were? Where they small, mid-size or large enterprises that -- you’re having the traction with from cross selling your products in the Mangrove space and then cross selling their products into your base?

Yes, I think you know the average employee size so far across our journey it's been early but we're probably in the area of the 500 employees or so that’s where we've seen the most traction but it's interesting we've seen traction in England here with our time and attendance product. In work space we've seen clearly in some verticals we see opportunity whether they're in the financial services banking, pharmaceuticals, we've seen some areas there but I would say that the quickest traction so far has been in the mid-market and that is to be expected.

And then last question for me is it sounds like the Mangrove really enables you to increase your price per employee per year from 120 to 500 are you actually seeing some customers close to the $500 per employee for year now with some of this crossover ones?

I think it's still a little bit early to say that I think that metric is more -- a little bit aspirational right now. However we are seeing significant growth in our per employee. I think for us to have a firm metric around that would be early '17 I think we'd be able to report that.

And our next question comes from the line of Vincent Colicchio from Barrington.

First question is what portion of your 7000 existing clients would be good candidates for a comprehensive HCM solution, have you mapped that out yet?

First of all we think all of it would be selfishly right, but we think immediately there is a number of targets that we're going to go after and I would say we have about 1500 a hot list that we feel that the current capabilities of our products and services and the current technology and the industries that they're in match up very, very nicely that we're going to go forward and then as we go up market there's some features functionality that we're building in the system specifically designed to increase that and on the lower end we're looking at different type of offerings and how we can package our offering to expand that, so our initial hit list I guess if you will is about the 1500 and we'll continue to grow that over time.

And then the cross-selling revenue beat your expectations in the quarter?

I wouldn't say that but I think it's set us up for Q3 and Q4. So I think our core business did really well, our interest in bookings did really well but as far the HCM we had a lot of cross selling some of which will fully realize in revenue in late '16 and '17. So it was the cost cuts with the acquisition, it's the interest level on the cross selling and it's the implementation backlog that will continue to grow in '16 and '17 that once we hit that then the revenue will be realized.

So we're about halfway through the Q3 period, how are the cloud bookings progressing so far in this period versus the year ago?

I don't report in the middle of the quarter like that, I haven't seen that metric yet but I would say you know July I would say was a strong month, August to be determined but we think in looking at all the data it prudent to raise the guidance and feels really strong about that decision.

And how far long view progress in terms of the training of the sales force for the complete portfolio and when will that be complete if it's not?

I think it will be in phases, Phase 1 is obviously complete. Phase two is continuing around the targeting and really exploring which ones are good candidates etcetera. I think early '17 we will have even a stronger kind of training portfolio and program to continue to go after more and more clients. So I think we've had the quick wins section of the training along with what we feel we can absolutely delight the customers with those offerings from a product roadmap perspective we're layering in things we can do in '16 and '17 to delight a bigger set of customers. So I think you'll see it as an ongoing process through '17.

Thank you. And that concludes our question-and-answer session for today. I would like to turn the conference back over to Pat Goepel for closing comments.

Well thank you and I appreciate everybody on the call today and I just feel like we're really starting to hit our stride and really appreciate your interest in Asure and look forward to talking to you to talk about our progress in the third quarter and the next fall. Thanks again.

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