Welcome to the Bridgeline Digital Third Quarter 2015 Earnings Call. [Operator Instructions]. I would now like to introduce your first speaker for today, Michael Prinn, Chief Financial Officer. You may begin.

Thanks Nicole, and good morning everyone. I’m pleased to welcome you to our third quarter conference call. Before we begin I'd like to remind listeners that during this conference call, comments that we make regarding Bridgeline Digital that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The internal projections and beliefs upon which we base our expectations today may change over time, and we undertake no obligation to inform you if they do. Results that we report today should not be considered as an indication of future performance. Changes in economic, business, competitive, technological, regulatory and other factors could cause Bridgeline's actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact our business, please review the reports and documents filed from time-to-time by Bridgeline Digital with the Securities and Exchange Commission. Also please note on the call today, we will discuss some non-GAAP financial measures in talking about the company's financial performance. We report our GAAP results, as well as provide a reconciliation of these non-GAAP measures to GAAP financial measures in our earnings release. You could obtain the copy of our earnings release by visiting our website. At this time I'd like to turn the call over to Bridgeline Digital's President and CEO, Thomas Massie.

Thank you, Mike and good morning everyone. I would first like to begin with congratulating Joni Kahn, with a recent appointment as Chairperson of Bridgeline Digital's Board of Directors. I've known Joni for over 20 years and have worked with her on previous boards. Joni is an outstanding leader, manager and a consummate professional who is highly respected. Her highly accomplished track record speaks for itself and I look forward to working closely with her as we take Bridgeline to new levels. Revenue for the third quarter of fiscal 2015 was 4.9 million, sequentially third quarter revenue grew slightly when compared to our second quarter of 2015, however recurring SaaS revenues grew 13% sequentially. Year-over-year revenues decreased 21% as our legacy business continues to significantly decline and anticipated revenues from a large iAPPS engagement has pushed into future quarters. As we complete our transition this year our revised projections have focused on getting expenses in line with iAPPS related revenues accelerating our large SaaS backlog, improving gross profit margins, driving future positive EBITDA and maximizing cash flows. Since January 2015 we have implemented cost reduction plans which will yield more than $5 million in annual savings, in third quarter we saw just EBITDA improve by over $1 million when you compare it to the second quarter of 2015 and sequentially our gross profit margins improved from 36 points to 45%. We're in a good position to begin driving positive adjusted EBITDA in the fourth quarter and of fiscal 2016. Then we're going to drive positive EBITDA for all of fiscal 2016. Bridgeline as a backlog that’s in excess of $23 million and one of the largest engagements we have in our backlog. As I said has experienced significant delays. These delays our exclusively customer related and not iAPPS related or…

Thanks, Thomas. So let me go through the results of operations for the third quarter ended June 30, 2015. Our third quarter revenue was 4.9 million compared to 6.2 million in Q3 of last year a decrease of 21% but an overall increase of about 100k sequentially so from our second quarter revenue of 4.8 million. Although this revenue number is lower than last year and as we mentioned in our previous calls we’re focused on aligning our cost structure to our revenue forecasts and you'll see we had some significant improvement to our bottom line which I'll talk about in more detail in a bit. So let me give some color on the various pieces that make up the revenue, our subscription and perpetual license revenue for the third quarter of fiscal 2015 remain constant at 1.5 million compared to the third quarter of fiscal 2014. We continue to work on deploying our iAPPS and our iAPPS SaaS and our iAPPS DSaaS [ph] backlog and expect to see this license number continue to grow in the fourth quarter and into fiscal 2016. Our recurring revenue which consists of SaaS licenses in our maintenance on perpetual licenses and hosting was 1.8 million in the third quarter and this is consistent with the third quarter of last year. Sequentially our recurring revenue increased 13%, as we see continued growth in our license revenue we will see the same type of growth in our recurring revenue stream as most of our new opportunities are SaaS subscription based. Our services revenue decreased by approximately 1.3 million or 30% from the third quarter of last year of this 1.3, a little under 400k was legacy revenue, so we’re at a point now where our legacy revenue is only a couple of 100k per quarter…

[Operator Instructions]. And our first question comes from the line of Howard Halpern of Taglich Brothers. Your line is now open.

First question, how many [indiscernible] sites that do you have that are providing monthly revenue?

We’re :

Okay and I guess coming up in the fourth quarter other than you know the steady hopefully accelerating sites being deployed from [indiscernible] you have smaller deployments that are going to occur.

Yes, so we had one deployment that Thomas mentioned Sport Clips that we deployed in June sort of middle of June, so sort of we have stuff here up for June. So you will see that in our fourth quarter and then we've got another smaller engagement I think it's about 150 units that is scheduled to launch mid-October. So if you go into our first quarter of '16 that's probably an incremental 60k a quarter of additional revenue and then we'll continue to ramp up you know [indiscernible] on a monthly basis and do we can do to accelerate that deployment.

Okay and just speaking of you know the overall GS or sales pipeline, how has I guess the recognition helped and where are you in some of in the sales cycle on some of those potential new customers?

Obviously the recognition helps a lot. And we're in a good position to announce new GS [ph] wins here in the very near future.

Okay. And just I guess looking at the fourth quarter just based on what you said, you should be looking for sequential growth in revenue and fairly constant expenses and maybe a little bit more in the gross margin.

Well revenue will be flat but the growth is going to cross that line. So to maximize cash flow profit it's all about you know maximizing the revenue lines to drive the highest gross profit margins. So you continue to see sequential growth in the SaaS recurring revenue line item, but we're going to maintain the services number pretty much where it is for the fourth quarter. So you'll see pretty much overall top line respectably flat.

[Operator Instructions]. And I'm showing no questions at this time. I would like to hand the call back over to Thomas Massie for any closing remarks.

Thank you, look we’re very committed to driving a large iAPPS SaaS business with strong retention and above average profitability. We do want to thank all of our value shareholders for the patients and continued to support. We are extremely confident that we're going to drive significant shareholder value over the next twelve months. Thanks and have a great weekend.

Ladies and gentlemen thank you for participating in today's conference. That does conclude today's program. You may all disconnect. Have a great day everyone.