Thank you, Audrey. Good morning, everyone.

Welcome to the Q3 conference call. As you know, we do go directly to questions.

So Audrey is going to give you some instructions about how to get in line for those. Audrey?

Just maybe first of all, Mark, most topical on people’s minds is likely, your views on an acquisition environment right now, both for small and large deals and any updated metrics, say, you guys track around either LOIs or pipeline or anything like that.

In terms of the high-level metrics, the NDAs that were signed, they are pretty flat. We haven’t seen any significant increases or decreases from last year.

In terms of LOIs, we’re starting to question that particular metric because we find a number of our M&A people are giving indications of interest that aren’t full-blown LOIs and they tend to preempt the process somewhat. So our LOIs are down, but we’re not sure it’s a good metric because we think our practice is changing out there in the operating groups.

In terms of the short-term funnel, not particularly robust, but there’s always those wild cards in there that can make a big difference if a large transaction closes.

When you’re looking at those large deals, I mean we obviously see that some of the public market valuations going up. Is that sort of thinking or targets pointing to those sorts of multiples, is that impacting your ability to get some of these large deals progressed?

We haven’t changed our hurdle rates recently. So I guess it really depends sort of what the vendors are looking for in terms of prices.

Okay. Any update on the - your looking around for sources of additional capital?

Any progress to share with us or any change in your thoughts there?

There appear to be lots of different sources that we could tap, which is great and we continue to talk to all kinds of potential sources of finance should we need it.

Okay, but no real timeline in place, I guess?

That will be driven by acquisitions. We basically don’t need capital to run our existing businesses.

They produce lots of capital and it’s strictly a supply and demand thing.

Just one more and then I’ll pass it, Jamal, and that is the tax rate for this quarter was a little bit on the lower side versus what kind of the range you’ve been saying in the past. Just looking for any sort of update on what we should look for going forward.

Going forward I would say it’s going to trend back towards what we historically have done and then going forward it even maybe a little bit higher. So the dip in Q3 should not be indicative of what’s going to go going forward.

Yes. So 10% to 15% is still, at this point at least, a good range to use?

Yes.

Mark and Jamal, could you maybe comment on the mix in the quarter and how you see that sort of changing over time? It seems like you had more hardware this quarter.

How should we think about that going forward and, specifically, if that means anything for margins?

Well, to the extent that there is more hardware, margins will be smaller because hardware margins compared to software margins are much lower. Don’t really know.

Hardware stuff, it tends to be an adjunct to our business as opposed to a driver of our business. So it’s not something we aggressively seek out, but where we can make a decent margin on it we do it and often we end up doing it as a convenience to our customers.

So I guess if I read into that, it sounds like the $5 million in hardware that you had for QuadraMed this quarter, should we think of that as more of a one-time that happened in Q3 as opposed to going forward?

That’s my sense right now, but we haven’t had that much experience with QuadraMed. So time will tell.

Okay. And just one more quick one for Jamal.

It looks like you paid down some amount of debt in the quarter. Do you have any plans to keep paying that down aggressively or how should we think about use of cash, besides acquisitions obviously, going forward?

Great. If we have excess cash we’ll use it to repay debt.

So it all depends on the acquisition pipeline.

Okay, and just on the acquisition pipeline, just going back to that for a second, how large is the M&A team right now? Because I think you had some hiring last year.

I'm just wondering, if that's kind of trending up. Do you need more bodies, or where that kind of stands right now?

So I was looking through our lead generation last month and there were, I think 15 or 16 people putting leads into the funnel, some of those folks are not full time lead generators and obviously, we have a bunch of our professional managers involved in the M&A process as well on a non-full time basis. And so it’s a good-sized group of folks.

It’s a big investment compared to most businesses of our size.

If I'm doing the math right, it seems like your public sector revenue, without acquisitions, was down a touch in September quarter relative to the June quarter. Was there any discernible impact from the government shutdown or nothing of note, given that you're more focused on state and local?

I haven’t done that math, Thanos. I tend to look at the individual business units as individual business units, and I didn’t get the sense that there was any particular contraction.

We actually have seen pretty good bookings activity in the government sector, so - but no, I don’t get any sense of the shutdown causing issues.

Okay. And, generally speaking, as you look across all your businesses, and obviously it's a lot of moving parts, but directionally anything that would prompt you to be any more or less confident on organic growth in the near term?

In the very near term the managers are quite optimistic, that optimism usually gets tempered by reality. I’d say that we’re feeling reasonably good about the prospects particularly in North America for organic growth.

Okay. And just looking back historically, it seems that sometimes, in the past, margins have dipped in Q4.

Is there any sort of discernible seasonality that we should be aware of? Or has that just been sort of quarterly volatility when we've seen that dip in the past?

You are thinking of gross margins or…

I’m sorry EBITDA margins.

I’m not sure what drives that, it could be the year-end bonus tee-ups is part of it.

It hasn't been every year, just certain years we've kind of seen a dip. And so, it may just be volatility but I was wondering if there was a trend there.

Not that I know of.

Okay. Then final one for me, if M&A were to slow down, presumably we should see a bit of margin lift since M&A tends to be a drag on margins in the near term.

Would that be the right way to think about it?

I would hope so. That rather assumes that the stuff that we bought a year ago and 2 years ago improves in terms of its profitability.

How large is the unnamed business that Gary Jonas is making a takeout offer for?

We are not disclosing that at this stage, Paul.

Should we think of it as a larger deal or a smaller deal?

We probably wouldn’t have said this much if it was a tiny deal.

Okay, fair enough. And then, since the close of the quarter, I didn't see it in the MD&A, but how much capital have you deployed on acquisitions, Q4?

Again, we are not disclosing that yet.

Okay. Moving on to Europe, has the profitability on European businesses improved over the last year in line with your expectations?

Not in line with expectations, no. We had hoped that we could have done a better job.

Some of that’s environmental. One of the large acquisitions was in the marine sector and the marine sector is very depressed right now, although it is showing a few signs of life.

And would that delta between your expectation and actuals be a result of like organic revenue growth or renewals or pricing increases versus cost cutting?

I would say we actually just finished looking at this, we did a study of both long-term M&A results and the results of the acquisitions that we’ve done in 2012. When we looked at the 2012 ones, we presented this to the M&A folks a couple of weeks ago, what we found with a couple of the European ones was that the revenue forecast that we’d had for them in - when we did the acquisitions were higher than where they came in, so we saw some softness.

On the revenue side in the expenses were within the range that we had the forecast, and so I guess the bulk of the shortfall would have been from a revenue perspective.

Okay. Just one more for me.

I think you've disclosed that you've been hiring people for some new initiatives over the last couple of quarters. How long do you think the ramp-up period is, in terms of seeing these new employees between productive and driving revenue?

Well, frankly working on initiatives, initiatives take forever to generate revenue. If they are working on backlog, then they could be producing revenue and margins fairly quickly.

So it will depend sort of where they’re going.

Mark, maybe you could talk a little bit just within the context of the government or the public sector market, sort of the outlook what you're seeing within the Trapeze business and then maybe within the Harris business given their relative size in terms of initiatives or sort of growth potential there?

Yes, I don’t think it’s substantially different from the rest of our business, Paul.

Okay, didn't know if the shutdown, obviously at a federal level was impacting any funding flow into those businesses or is it pretty much locked in that you have next to no concerns and things are just sort of moving forward on that front?

We have seen a bit of a slowdown in our smart meter related software businesses, or business, and that was one of our most rapidly growing businesses, but it was growing at an extraordinary rate. The underlying funding for smart meters in the U.S.

did come from federal government sources and so if you phrase it all the way back maybe that has something to do with the fact that we’re not growing at the rates that we were last year and the year before in that particular division. But that’s a very small portion of the overall.

I would say in general, the federal funding issues aren’t really touching us.

And then, secondly, maybe just an update or how you're thinking about sort of spans of control. Obviously you created a new business unit earlier in the year.

Can you talk to us a little bit about that as you sort of continue to grow out the business, how you're thinking about scaling and structuring it within the operations?

So we have 5 operating groups that report up to head office. We feel very comfortable with the leaders of those operating groups that they're phenomenal business people who are capable of allocating capital and running really good businesses.

Would I love to have a sixth or seventh reporting up to head office, certainly, and so that would be the ultimate objective to get to that level of trust and understanding. Takes time.

And so I don’t anticipate splitting any of the groups because none of them show signs of needing to be split and that would be something that we and the operating group managers would jointly decide in any event. So as before, internally we don’t feel a whole lot of stress from growing the business, above and beyond the normal sort of stresses that come with new acquisitions and getting to know new people and new markets.

Externally the concerns about scalability are always there. Our board brings them up, our investors bring them up and so we do pay attention to those concerns, but I think we’re sensitive and ready to see issues as they arise, but we don’t yet see them.

Okay, to sort of summarize that because I think it makes full sense and just want to be clear. For the near-term, at least likely for the next year, is it fair to say that the structure sort of stands in terms of the rate and pace at which you're growing?

That you're on track for that or would it be a large deal that might force sort of another leg to pop up at some point?

Yes, so we don’t really do deals. We acquire businesses and we make investments, but yes, a large acquisition might create a new operating group.

Mark, could you maybe talk about the environment for pricing on your maintenance renewals over the last little while?

It isn’t something we monitor centrally. I get the news pretty much when you get the news which is when we publish the attrition statistics where we break out for you the price increases.

It’s not a topic that I hear a lot about and then visiting with the operating groups or business units. So I would say it’s not a hot button issue.

Okay. What is a hot-button issue when you go visit the operating groups in general?

Deploying capital is one that they're always worrying about and trying to do to get good rates of return.

And I guess about a year ago one of the things that you brought on one of these calls or at your AGM was stock has been really well. You've got some wealthy managers there.

What's your thinking on that today versus last year?

Yes. I'd rather the stock was prudently priced so that people are not tempted to diversify and sell.

One of the neat things is, I think nearly all of the managers file insider reports and so if you want to see if the managers are selling, you can get that information on SEDI and I encourage you to follow that. So far we haven’t seen any wholesale selling by the key managers or the mid-tier managers that I know of.

Yes. I was probably just referring more to the turnover in the management team.

I'm guessing you haven't seen much of that over the past 12 months.

No, I think it's a relatively good place to work. You get lots of autonomy and if you are doing a good job, you don’t have to talk to me very much and you get to build a business where you have deep vertical knowledge and you know the customers, you know the employees, it’s a fun way to build a career.

Okay, thank you Audrey. Thank you everyone for joining us this morning and we look forward to talking to us early next year when we report the annual results.

Bye, bye now.