Asure Software Inc

Good afternoon and welcome to Assure's fourth quarter and full year 2020 earnings conference call. Joining us for today's call are Assure's Chairman and CEO, Pat Gopal, CFO John Pence, and Vice President of HR, Sheryl Chibula. After the speaker's remarks, there will be a question and answer session. I would like to turn the call over to Sheryl for introductory remarks. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for Assure's fourth quarter and full year 2020 earnings call. After the market closed, we released our financial results. The earnings materials are available on the SEC's website and our investor relations website at investor.assuresoftware.com, where you can also find the investor presentation. This teleconference is also being broadcast over the Internet and will be archived and available on our IR website. During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items. A description and timing of these items, along with a reconciliation of non-GAAP measures to their most comparable GAAP measure can be found in our earnings release. Today's call will also contain forward-looking statements that refer to future events and as such involves some risk. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. Finally, I would like to remind everyone that this call will be recorded and it will be made available for replay via a link available in the investor relations section of our website. With that, I would now like to turn the call over to Pat Goeppel, Chairman and CEO. Pat?

Thank you, Cheryl. Hey, I'd like to welcome everybody to our fourth quarter and our full year 2020 earnings call. I sure appreciate your interest, whether you're an employee, a client, an investor, analyst, or other interested third party. I will start today's call with an update on some key metrics before reviewing business highlights for the fourth quarter. Then Jon Patz, who will review our financial results. and then he'll turn it back over to me. We'll update a little bit on our strategy and then we'll take questions. Our increased focus on small business is really paying off as new customer additions exceeded losses with broader adoption of multiple solutions. We performed well despite a choppy economy. The high-caliber sales representatives that we've added in the second half of 2020 also played a major role in contributing to fourth quarter's positive results. Compared with the third quarter revenue, non-GAAP EBITDA and non-GAAP EPS were all up sequentially. Small business bookings, where most of the reps focused, increased more than 100% year-over-year for the second consecutive quarter, and more than 60% of new sales continue to adopt multiple solutions. We also continue to add reseller partners, and our total bookings year-over-year growth was 13%. We believe that momentum changes. with our business metrics will continue and that economic conditions will improve as national employment levels gradually return to pre-COVID levels. As a result, we hope to generate positive organic growth in 2021. Our strategic goal is 10% organic growth, 10% growth generated through accretive acquisitions, and 20% EBITDA. As for acquisitions, in late December, we purchased a small reseller based in the Northeast marketplace. This is in line with our partners for life strategy, where our partners can provide referrals, white label, and resell our solutions, and then join the Assure family. We don't have any acquisitions pending yet. but we do expect to be opportunistic in rolling up our reseller partners and white label solutions. The COVID-19 pandemic is still ahead with, primarily putting pressure on same-store sales related to the sustained level of lower client employees on our platform and continues to impact our top line, resulting in unfavorable year-over-year comparisons. Drilling down into the COVID impact, On a monthly basis, of the 1,050 of our 10,000 direct customers that paused last March, approximately 900 have returned through December, resulting in about a 1% churn in our customers. or what we call same-store sales, which roughly tracks national unemployment rates, was down 14% year over year in Q2 of 2020. It improved to down 9% in the third quarter. and it remained at about the same level in fourth quarter 2020. This has presented a headwind because in normal times, pays per control typically increase about 2% year over year. However, since we've been adding more clients than we're losing, as same-store sales normalize over time, this will translate into increased revenue. Lastly, new sales bookings on a dollar basis were pressured as many small businesses are still focused on surviving, adjusting their business models accordingly instead of changing payroll providers, even if they're willing to do so. However, we're pleased that the number of new clients booked is increasing and with the broad adoption of multiple solutions to boot. Our investments in sales reps is also bearing fruit. As a reminder, we began 2020 as the transition year with 33 sales reps, and we now have 65. As most of these new hires that are very experienced bring strong referral relationships. Still, as an essential small business, Assure remains committed to helping more than 70,000 indirect and 10,000 direct small business clients grow in a challenging environment. Our COVID-19 resource center webinars, for example, continue to help thousands of small businesses. Our product and operations teams quickly mobilized in December to react to stimulus and its impact on our clients. In addition to changing legislative environment, the fourth quarter is also a very busy time of the year for our operation teams, as they work closely with clients on year-end processing of payroll, W-2s, 1095, and annual tax form filings for federal, state, and local agencies. Throw in COVID and the changes in the tax laws, we've had more activity this year than perhaps the last 10 years. We're extremely proud of our employees' level of commitment to our clients during this very busy time of the year and during these unprecedented times. While small businesses have experienced unprecedented economic headwinds due to COVID, we will continue to provide our clients with the service, technology, and support they need to survive this and thrive when it's over. Before handing off to John to discuss our financial results in more detail, I would like to take a moment to mention that it is with a heavy heart that we learned about the recent passing of former board member and friend, Charlie Lathrop. Our thoughts and our prayers are with Charlie's family. John?