Asure Software Inc

Afternoon, and welcome to Assure's second quarter 2021 earnings conference call. Joining us for today's call are Assure's Chairman and CEO, Pat Jebel, John Pence, and Vice President of HR, Cheryl Torbola. After the speaker's remarks, there will be a question and answer session. I would now like to turn the call over to Cheryl for introductory remarks. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us for Assure's second quarter 2021 earnings call. After the market closed, we released our financial results. The earnings release is 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 measures, can be found in our earnings release. Today's call will also contain forward-looking statements that refer to future events and assets involved 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 on the investor relations section of our website. With that, I would now like to turn the call over to Pat Geppel, Chairman and CEO. Pat?

Thank you, Cheryl, and welcome everyone to Assure Software's second quarter earnings call. I will begin today's presentation with an update on our business performance and strategy. Then we'll turn the call over to our CFO, John Pence, for a more detailed review of our financial results and outlook for the third quarter of 2021. We'll then conclude this session with time to answer your questions. In the second quarter, Assured delivered total revenues of $17.2 million and net income of $3.7 million. Our revenues grew 22% versus prior year, with reoccurring revenues rising by 17%. Importantly... Our revenue growth was balanced in nearly equal contributions from organic growth and acquisition-related growth, in line with our strategic aspirations. I'm pleased to reaffirm our long-term strategy to grow roughly 20% each year, made up of 10% organic and 10% inorganic, is unchanged. A significant contributor to our inorganic growth in the quarter was the acquisition last July of Payroll Tax Management. The new tax platform has improved operational efficiency for our payroll operations and accelerates our ability to integrate accretive acquisitions. It also expands our capabilities to new small business clients, resellers and large brands who have already expressed interest in using our tax engine to power their payroll and treasury departments regardless of which payroll platform they use. The integration of a small Northeast-based reseller acquired in December 2020 is now complete. This is important because it provides a positive proof point regarding our acquisition model. The model we developed enables us to acquire similar value-added resellers, integrate them quickly, and then expand their revenues by more effectively delivering on our strengths. This model works and is highly accretive to customers, the business, and our shareholders. We'll continue to be opportunistic in rolling up our reseller partners that white label our human capital management solutions. This is in line with our strategy where our partners are reselling our solutions and then joining the Assure family. Acquisitions of our resellers continues to be a part of the growth strategy, and we will continue to be active in the marketplace. We're also pleased to announce that we've signed a commitment letter with Structural Capital Investments, their third fund LP, and want to express our thanks to Wells Fargo for their partnership over the years. Shifting now to organic revenue growth, same-store sales, which roughly tracks national unemployment rates, was up 7% year-over-year for the second quarter of 2021 and up 5% sequentially compared to the first quarter of 2021. This marks the first uptick since the start of COVID pandemic, both sequentially and year-over-year, pointing towards an improving environment for our clients and for Assure. We previously outlined to you our plan to significantly increase the number of direct sales representatives across the United States. We continue to be active in this area. At the end of the second quarter, we had 65 direct sales reps, up slightly from 64 at the end of the first quarter, and up significantly from the 31 at the start of 2020. At year end 2021, we expect to be about 75 to 80 direct sales professionals. The investments in sales and marketing are paying off. Bookings were up 48% year over year, 51% sequentially. We'll continue to invest in this area and expect even more productivity from existing sales reps as their tenure increases. The successes have been possible with our continuing focus on small business, which is where most of the sales efforts are. This is evident in our small business bookings, which increase more than 133% year over year. As we previously discussed, these new sales are bundled solutions. As we've discussed in the past, the previous 16 months or so have been different from any other time that we've experienced before. We're encouraged by the early signs of the economy reopening as our small business clients are largely back to business, yet uncertainty obviously remains with COVID and its new variants. That said, we're opportunistic about tailwinds in our model. As employment levels rise, clients and partners become more available for face-to-face meetings, and the uncertainty that freezes buying decisions returns to normal. I continue to be very proud of how the Assure team embraced these challenges and took a leadership role through the pandemic. For example, as part of our efforts To support more than 80,000 small business clients navigate the complex COVID regulations, we introduced an employee retention tax credit solution to help them efficiently maximize this critical stimulus program. I couldn't be more prouder of our team as they helped our clients file for nearly $100,000. million in tax credits in the second quarter. These stimulus dollars can help our customers hire staff and grow their business. As an essential small business, Assure remains committed to helping more than 80,000 small business clients navigate unprecedented compliance changes and grow in a very challenging environment. We're committed to ethical business practices, a values-based culture, innovation, social responsibility, and leadership, as well as our support for small businesses throughout the United States. Overall, we are pleased with our second quarter results. The business has returned to organic growth following the negative impacts of COVID and has allowed us to return our employees to their traditional compensation structure. Our acquisition model has delivered tangible, positive results and created new areas of strength for Assure. We continue to be vigilant in managing expenses while improving our scalability so that future revenues can be effective in driving higher levels of EBITDA and cash flow. Now, I'd like to hand off to John to discuss our financial results in more detail. John?