Good afternoon. Welcome to NetSol Technologies' Fiscal Fourth Quarter and Full Year 2017 Earnings Conference Call. On the call today are Najeeb Ghauri, Founder, Chairman, and Chief Executive Officer; Roger Almond, Chief Financial Officer; and Patti McGlasson, General Counsel. I would now like to turn the call over to Patti McGlasson, who will provide the necessary cautions regarding the forward-looking statements made by management during this call. Please proceed.

Good afternoon, everyone and thank you for joining us. Following a review of the company's business highlights and financial results, we will open up the call for questions. Please note that all of the information discussed on today's call is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. The company's discussion may include forward-looking statements reflecting management's current forecast of certain aspects of the company's future, and our actual results could differ materially from those stated or implied. These forward-looking statements are qualified by the cautionary statements contained in NetSol's press releases and SEC filings, including its annual report on Form 10-K and quarterly reports on Form 10-Q. I would also like to point out that NetSol will be discussing certain non-GAAP measures. The press release issued earlier today contains a reconciliation of these non-GAAP financial results to the most comparable GAAP measures. Finally, I would like to remind everyone that this call will be recorded and made available for replay on our website at www.netsoltech.com and via link available in today's press release. Now I would like to turn the call over to Najeeb. Najeeb?

Thank you, Patti and good afternoon everyone. After the market closed today, we issued a press release announcing our results for the fiscal fourth quarter and full year ended June 30, 2017, a copy of which is available in the Investor Relations sector -- section of our website. Fiscal 2017 was a pivotal year in NetSol's development. We achieved record revenues for the third straight year, which was driven predominantly by a significant increase in licensee revenues from NFS Ascent. At the same time, we initiated a restructuring of the company to optimize our internal processes, reduce costs, and accelerate growth. These proactive measures have strengthened our organization in the near-term and more importantly, have laid the necessary foundation for profitable growth over the long run while -- all while making NetSol a much more efficient organization as well. As many of you know, NFS Ascent is our next-gen finance and leasing enterprise solution. We believe that Ascent can truly disrupt the market because it is a solution that is highly flexible and one based on the latest technology that is unmatched by the incumbents in our space. The fact that we're seeing increasing demand for NFS Ascent by our current Tier 1 auto captive clients is clear validation that we have one of the best solutions out in the market today. But while we are pleased with the overall product suite, we have experienced some implementation delays in our client's migration process from our legacy NFS solution to NFS Ascent. In addition, our current sales process has become much more drawn out because with this more robust solution, our enterprise clients often require more complex customizations, sometimes with multi-country phased rollouts. This prolonged cycle has required additional sales and marketing spend, temporarily affecting our cost of sales. Ultimately, however, we believe these delays will be worth the current difficulties. The end result will be that these increased levels of customization and efforts on sales will lead to greater contracts and for longer terms. The general shift we have seen in our business is that customers are buying for longer periods and are willing to pay up for a premium solution that will last for many years. In that regard, NetSol has positioned itself favorably. In a minute, I'll come back on to discuss our operational highlights and general business outlook in greater detail. But before I get any further, I'll now turn the call over to CFO Roger Almond, who will go over our financial performance for the fiscal fourth quarter and year 2017. Roger?

Thanks Najeeb. I will begin with a review of our fiscal fourth quarter and full year 2017 financial results ended June 30th. Total net revenues for the fourth quarter were $14.5 million compared to $19.1 million in the prior year period. The decrease in total net revenues was primarily due to a decrease in license revenue of $1.1 million and services revenue of $3.4 million. For all of fiscal 2017, total net revenues were a record $65.4 million compared to the previous record of $64.6 million in fiscal 2016. The increase in total net revenues was primarily due to an $8.5 million increase in license fees offset by an $8.5 million decrease in service revenues. Total license fees in Q4 were $3.3 million, a decrease of 26% from $4.4 million in the prior year period. For the year, total license fees were up 85% to $18.5 million from $10 million in fiscal 2016. The increase in total license fees for the full year was primarily due to the license revenue recognized for the 12-country NFS Ascent contract. Total maintenance fees in Q4 were $3.6 million, which were consistent with the prior year period. For the year, total maintenance fees were $14.5 million, an increase of 6% from $13.7 million in the prior fiscal year. The increase in total maintenance fees for the full year was primarily due to the start of new maintenance agreement from customers who went live with our products during the latter stages of fiscal year 2016 and into fiscal year 2017. Total services revenue for the quarter were $7.6 million, a decrease of 31% from $11 million in the prior year period. For the year, total services revenues were $32.4 million compared with $40.9 million for the prior fiscal year. The decrease in total services revenue…

Thank you, Roger. From a sales and marketing standpoint, 2017 was a busy year for NetSol marked with significant activity across all of our region markets. I'd like to take some time now to provide updates related to those markets in particular, beginning first with a few highlights regarding our progress in North America. Last April, our largest NFS legacy implementation went live with a major U.S. company based -- U.S.-based drug manufacturer for their Mexicali location, and we also secured a new license for LeasePak with a Korean-based automotive captive for its U.S. operations valued at $0.5 million. Also, during 2017, we signed a new user-based [Indiscernible] with a leading servicer who uses NetSol solutions to service loans and leases with several originators. We're also in discussions with a few listing companies in the U.S. to deploy new modules for Ascent WFS, our Wholesale Finance System. During fiscal 2017, we completed several successful demonstrations of our NFS Ascent solution for a major U.S. software company. We were in the final stages of a competitive situation in which NetSol was one of the two finalists. However, the software company decided to temporarily postpone its plan to acquire a next-gen solution. From a personnel standpoint, we also replaced a few employees this fiscal year and plan to fill those positions with experts in our new technology platform. These changes will strengthen our team of domain experts, particularly in NFS Ascent, which were increasingly helpful going forward given our new sales cycles. Overall, our North American sales pipeline for Ascent remains robust and we continue to pursue large multimillion-dollar deals. We look forward to updating you on our progress in the quarters ahead. Now shifting gears to our APAC and the European markets where we continue to make encouraging progress. Since the…

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question is from Mike Vermut with Newland Capital. Please proceed with your question.

Hey guys, how are you doing?

Fine. Thank you, Mike.

Quick question for you. When we look at -- when I look at the financials, what happened is you had expenses going up, you had revenues going down. And I know that the costs are going to start hitting now, but realistically, when you look at it, I got to believe that there is more than $5 million of costs just to rationalize the business after -- and we put Ascent out there, now it's just selling and marketing getting out there. When you look at the top end of the range, where could we get on these cost savings? Because if you look at it, just putting $5 million in there should get us over the EBITDA hump to profitability, but realistically, what else is out there that you're looking at on the cost side?

Yes. Mike, let me give you – example in two -- it's a two-phase question. Number one would be we started this restructuring initiative exactly around the beginning of this calendar year, like around 1st of January. And we ended the first phase approximately in the fourth quarter -- somewhere in the middle. And the first phase included a reduction of headcount primarily from the legacy systems and, of course, some weaker employees, but also included consolidation of offices, processes, and many other features in this first initiative. So, we -- in that phase, we calculated the net impact. We came up with minimum $5 million and perhaps more from just that initiative because the -- reduction of legacy system employees will continue, maybe not as aggressive because we let almost 180 people go in that phase throughout the company, which is about 11% of the headcount reduction. The impact of this $5 million-plus will flow in in this fiscal year, gradually each quarter and then, of course, we believe, annualized business is about at least $5 million. Now, the second part of this initiative is, we call it organization transformation. That initiative basically has to do with a lot of processes, again, consolidations, centralizing sort of the admin, HR, accounting function to our centralized location in Lahore where we have a lot less cost. I think we have big advantage of using our services, not relying on expensive accountants or HR outside the Lahore City. So, those kinds of steps, initiatives, are ongoing. It also means that we'll continue to also leverage where possible any way to look at our cost structure in every entity. For example, we closed down [Indiscernible] office and consolidated with our head office in L.A. And most of the programmers, developers, who are supporting the LeasePak customers, which is a kind of cash cow for us, now they're working from their homes and remotely, so seamless transition, the results are even better because we save a significant amount of costs through the rent by giving up that office and now combining it with our U.S. office. There are many other steps, such initiatives, taken in the company. So, to your question, absolutely right, $5 million is just the beginning. We will leave no turn -- corner and turn to find opportunities to become more nimble, leaner, and a much more profit-driven company.

Excellent. And then a couple more quick ones here. When you look at the pipeline, it's great to say we have $100 million-plus. And I'm sure it's actually larger than that that we approach out there. So, when we realistically look at what's near-term and I'm meaning six months of wins, not of recognizing revenue, but of contracts that we feel high probability on, I'm not setting you in because things ought to go wrong. What would you say are the likely size of the wins, type of contracts that we're looking at, and just waiting that are likely? What is likely to hit in this year to really setup a fantastic 2018 with the cost cuts and then the higher margins and the revenues coming on?

Yes, Mike. As I mentioned and Roger mentioned, one thing for sure that our sales cycle is six months, 12 months. We have seen some deals happen within six months for two of the deals signed for Ascent earlier in 2016. And then, of course, some took nine months. The one we announced a year and a half ago took at least nine months. At this stage when I mentioned key projects, which are the highest probability, we just mentioned those projects, those programs under discussion, which are at a much higher, advanced stage of coming to closure. Because when we see a major potential contract in APAC market with a European luxury brand auto manufacturers, we have advanced our discussion in the last six to eight months through workshops, demos, technical feasibility, financial, commercial, you name it. And that some of them are also on their way to visit our facility, nor as the last box to tick. I think that's a very encouraging project. The volume size could be $20 million to $50 million, depending on how many countries. But it's a large deal, and we are really excited about it. We have put in a lot of efforts. So, many people from sales, presales development, business analysts have put in a lot of time and effort to show the product in two different places, in China and in England, they came to both locations. So, part of the cost you see on the travel and presale is incremental from last year compared to 2016 because we did a lot of sales activity. So, I think to be more specific, this is a one major deal we have quite [Indiscernible] focused on; and if it were to happen, they have to make a decision by December 31. That…

Excellent. And another one. So, Roger, I think I may have misheard this, we will return to GAAP profitability in fiscal 2018?

Yes. But I put a caveat in there. If we get some of these deals that we are anticipating. So, based on cutting expenses, we cut $5 million of expenses out on that GAAP profitability right there if we keep our current revenue. We do need to replace revenues, we've recorded license revenue and -- for the 12-country deal. We do need to replace that revenue with current -- with new projects. So, if we get a couple of these Ascent deals that we're very hopeful for, then we anticipate turning to GAAP profitability.

Excellent. And then, so then that I assume cash flow-wise would be significant, right? Just on an EBITDA basis, you'd be like -- if you were positive on a GAAP EPS basis that will be between $5 million and $10 million on an EBITDA basis if we get this theoretically?

It's kind of at that breakeven point, at EBITDA right now; you add $5 million back and then from our losses this year, kept those expenses out then, as you said, right there to the EBITDA value.

Great. So, we could be around $5 million just for the cost saves next year on an EBITDA basis?

Right.

Okay. And then last question, on the buyback. Our balance sheet is extremely strong, trading nicely below -- if you want to look at a tangible book value, we're below that. You are the best judge -- judges of how these revenues come in and where our costs are and how profitable we're going to be. And I assume we get one shot at this buyback the next -- one shot, meaning over the next six months before these new deals come in. I assume we plan on being aggressive on the buyback and possibly upping it if we have the opportunity, the size of the buyback?

Yes, Mike, absolutely. We initiated this about a couple of months ago and we bought at least 112,000 shares. We will continue this activity and we'll base on -- of course, our cash is healthy as of June 30. We will base on our cash and new cash coming in, receivables and how we manage our cash reserve balances because the business is very fluid right now. There is lot of activities. While we have made cost cuts and continue to cut costs on the legacy system, but we are very aggressively focusing on acquiring new customers. So, yes, we'll analyze that once the quiet period ends and see where we are with the cash, and how much we can dedicate. But we're committed to create shareholder value by implementing this all the way as long as we can sustain the cash position. And I think this is a very committed effort and we'll keep going.

Yes. But also hope to see -- I know, Najeeb, I know you always buy stock, it would be nice to see the Board finally buy some stock and the rest of the management team purchase stock as well at these levels.

Well, I can speak for myself, but I can't speak for the Board, but they do that once in a while. They all have their own, I think, limitation. But look we have a very strong belief. You always see from a dividend side is only [Indiscernible] buying, you never see -- hardly seen any sellers from the inside, so that is a vote of confidence.

Okay. Thank you very much.

Thank you, Mike.

[Operator Instructions] At this time, this concludes our question-and-answer session. If your question was not addressed during the Q&A session, please contact NetSol's Investor Relations team by emailing them at ntwk@liolios.com or by calling them at 949-574-3860. I'd now like to turn the call back over to Mr. Ghauri for closing remarks.

Yes. Thank you for joining us today. I especially want to thank our investors for continued support and our dedicated employees for their ongoing contribution worldwide. We look forward to updating you in the Q1 call in about middle of November. Thank you very much and have a good evening.

Thank you for joining us today for NetSol's fiscal fourth year and full year earnings call. You may now disconnect. Thank you.