HourTrax 3.20.2012
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  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC
  • Spencer Barnor Capital LLC

HourTrax 3.20.2012 HourTrax 3.20.2012 Presentation Transcript

  • Track Time From Anywhere IA L NT ID E N F C OConnect the field to the office with smarter labor management March 2012 CONFIDENTIAL – Savvy Sync LLC 1
  • Contents L• Company and Mission IA• Problem• Solution NT• Value Proposition ID E F• Return on Investment for Customers• Market Size ON C• Business Model• Competitors• Differentiation vs. Relevant Competitors• Appendix CONFIDENTIAL – Savvy Sync LLC 2
  • Company and Mission • HourTrax provides enterprises with a GPS and biometric time tracking application to manage employees at remote jobsites using Smartphones and Tablets. The product will also include a robust backend portal with reporting and analytics IA L T tools for administrators. HourTrax prevents construction companies from losing N money when employees give incorrect time and labor data, or enter hours for one another (“buddy punching”). Nucleus Research estimates that 74% of ID organizations experience “buddy punching” and costs 2.2% of gross payroll E N F annually. The cost of buddy punching in the construction industry is estimated at $3.1B annually1. Misreporting of labor data by just 5 minutes per day costs the C O construction industry an estimated $16.0B annually2 • Our mission: - Connect the field to the office with smarter labor management1 Cost of “buddy punching” is calculated using the following Feb. 2012 BLS statistics: construction production and nonsupervisory employees (4.2mm), average weeklyconstruction pay ($934.95), weeks per year (49) and the following Nucleus Research statistics: cost of buddy punching (2.2% of gross payroll), percentage of firm withbuddy punching (74%)2 Cost of labor misreporting is calculated using the following Feb. 2012 BLS statistics: construction production and nonsupervisory employees (4.2mm), average weeklyconstruction pay ($934.95), weeks per year (49), 5 minutes misreporting CONFIDENTIAL – Savvy Sync LLC 3
  • Problem: Construction Firms Lose Money from Inaccurate Labor ReportingConstruction Firms Traditional Time Clocks• Lose thousands of dollars each year from • Are bulky and unfit for rugged construction L misreporting of hours and the occurrence of an sites; require an electrical source IA employee clocking in for another (“buddy • Only resolve “buddy punching” with biometric T punching”) feature; expensive solution N• Experience the pain of managing crews working • Ideal for offices but not scalable for E on multiple projects at remote locations construction firms with multiple job sites ID• Require accurate labor data to effectively bid F on new projects• Waste time by recording and deciphering paper timesheets ON C CONFIDENTIAL – Savvy Sync LLC 4
  • The HourTrax Solution, on the Field Individual Employee ModuleFace verification or PIN clock in and out IA L TWhen employees arrive at the job site they clock in using either a PIN or the Nface verification tool as set by the administrator. The time of clock in and GPS Elocation is recorded. The same occurs when employees clock out ID N F O Bulk Crew Module CSupervisors/Foremen check off employeesWhen employees tend to travel together the bulk crew check in module canbe used. The supervisor/foreman simply checks off the name of eachemployee as they arrive. The time of clock in and GPS location is recorded.The same occurs when employees leave the job site CONFIDENTIAL – Savvy Sync LLC 5
  • The HourTrax Solution, at the OfficeWeb-Based Administrator Portal IA L TData from the job site application is automatically sent to the web-based E Nportal. Administrators have access to the following functions:•Robust viewing of labor hours by employee, crew, location, and projectsoftware) F ID•Export labor hours to timesheets (compatible with 3rd party accounting ON•View red flags (e.g. failed face recognition, missed clock in or out etc.) C•Permission setting•Customizable setting (e.g. job codes, crew categorization, employee accountdetails, face verification of PIN identification etc.) CONFIDENTIAL – Savvy Sync LLC 6
  • The HourTrax Value Proposition Provides mobility• HourTrax runs on iPhone, Android, Blackberry, and Tablets as a native application• Can track anywhere from one employee to thousands of employees at unlimited locations Eliminates time theft and “buddy punching” L• PIN or face verification authentication options provide infallible identification IA• Accurate time tracking through software mitigates misreporting of hours and increases profitabilityFlexible and easy to implement• NT HourTrax does not require every employee to have a mobile device. One Smartphone can service an• entire crew ID E Construction supervisors and foremen tend to be computer illiterate. The HourTrax application is easy• N F to set up and use on mobile devices; does not require a manual like competing enterprise solutions Easy to add employees or recycle accounts due to seasonal turnover (i.e. snow removal industry)Empowers managers with analytics• C O Web-based portal allows administrators to customize settings such as job codes and view employee labor data in real time; connecting the field to the office• Automatically generate timesheets and reports by projects for analysis; lets owners make better labor management decisions A solution with low switching costs• One or two mobile devices can handle the bottleneck of an entire construction site• Used Smartphones can be purchased for less than $100• Low switching cost is further suppressed by the growing number of Smartphones and Tablets on construction sites11 “Tablets Take Off in Construction” - http://enr.construction.com/technology/construction_technology/2011/0912-tabletstakeoff.asp CONFIDENTIAL – Savvy Sync LLC 7
  • Return of Investment for Customers 74% of organizations experience “buddy punching”1 and the cost is estimated at 2.2% of gross payroll per year2. The table below highlights the cost of buddy punching and the cost of misreporting of hours for firms with varying number of employees: Cost of Misreporting of Number of Employees in Firm Cost of “Buddy Punching”2 Combined Cost Effect Hours per Day3 15 $ 15,188 $ 85,898 $ 101,016 L 20 $ 20,157 $ 114,531 $ 134,688 IA 25 $ 25,197 $ 143,164 $ 168,361 T 30 $ 30,236 $ 171,797 $ 202,033 N 35 $ 35,276 $ 200,429 $ 235,705 E 40 $ 40,315 $ 229,062 $ 269,377 ID 45 $ 45,354 $ 257,695 $ 303,049 50 $ 50,394 $ 286,328 $ 336,721 Annual Cost of F The following table demonstrates the ROI achieved by customers using the HourTrax solution: N “Buddy Punching” Misreporting of Hours Mitigation Combined Cost O Number of Employees in Firm HourTrax Solution Mitigation Cost Savings/ROI Cost Savings/ROI Savings / ROI C 15 $ 1,260 $ 13,858 / 1,100% $ 84,638 / 6,717% $ 99,756 / 7,917% 20 $ 1,680 $ 18,477 / 1,110% $ 112,851 / 6,717% $ 133,008 / 7,917% 25 $ 2,100 $ 23,097/ 1,100% $ 141,064 / 6,717% $ 166,261 / 7,917% 30 $ 2,460 $ 27,776/ 1,129% $ 169,337 / 6,883% $ 199,573 / 8,113% 35 $ 2,820 $ 32,456 / 1,151% $ 197,609 / 7,007% $ 232,885 / 8,258% 40 $ 3,180 $ 37,135 / 1,168% $ 225,882 / 7,103% $ 266,197 / 8,371% 45 $ 3,540 $ 41,814 / 1,181% $ 254,155 / 7,180% $ 299,509 / 8,461% 50 $ 3,900 $ 46,494 / 1,192% $ 282,428 / 7,242% $ 332,821 / 8,534% 3 Cost of buddy punching is computed basted on the following metrics: % of gross payroll, average weeks worked per employee in a year (49), average hourly earning ($25.9) – source: Bureau of Labor Statistics1 Nucleus Research – 2006 4 cost of misreporting oh hours is computed based on the following metrics: conservative minutes of labor over-reporting per day2 Nucleus Research – 2005 (5 minutes), average weeks worked per employee in a year (49), average hourly earning ($25.9) – source: Bureau of Labor Statistics CONFIDENTIAL – Savvy Sync LLC 8
  • Market Size Current size of the construction industry in the U.S.1 •The construction sector has 4.2 million employees on payroll as of February 20122 o 440 thousand residential building employees o 515 thousand non-residential building employees o 599 thousands heavy and civil engineering construction employees IA L o 1,102 thousand residential specialty trade contractors NT Target market E o 1,544 thousand non-residential specialty trade contractors (63.0% of total) HourTrax employee tiered pricing plan - monthly F ID •First 25 employees tracked: $7 / employee •Next 75 employees tracked: $6 / employee ON C •Each additional employee tracked: $5 / employee •Average price point is $6 / employee Total Addressable Market Size: $302.3 million annually Target Total Addressable Market Size: $190.5 million annually1 Bureau of Labor Statistics – The Employment Situation February 20122 Data is on employment of production and nonsupervisory employees CONFIDENTIAL – Savvy Sync LLC 9
  • Business Model L• Subscription model: optimizing revenue with recurring cash flows IA - 14 day full free trial followed by monthly subscription T - Pricing tiered based on number of employees to be tracked in the organization E N Number of Employees F ID Cost per Month N First 25 employees $7 / employee C O Next 75 employees Each additional employee $6 / employee $5 / employee• Product Licensing - Partnerships with software vendors with licensing fee charged CONFIDENTIAL – Savvy Sync LLC 10
  • Competitors General time tracking solutions• IA L Tsheets.com: TSheets provides organizations with time tracking software. It is T customizable alternative to paper timesheets and punch cards to streamline HR N roles in businesses. The firm sells its software as a mobile application, which is E available on the Apple and Android App stores ID F Specialized time tracking solutions for construction N• C O Exaktime: Exaktime provides time and attendance systems for industries such as heavy construction, general construction, landscaping, and gas & oil. The firm has a user base of 700,000 employees who clock in and out every day. In 2010 ExakTime introduced time tracking software when it launched PocketClock/GPS for BlackBerry and iPhone and in 2011 it launched PocketClock/GPS for Android CONFIDENTIAL – Savvy Sync LLC 11
  • Differentiation vs. Relevant Competitors HourTrax ExakTime TSheetsOptimal Pricing PlanMonthly subscriptionFace VerificationAutomatic biometric feature IA LSecurityBiometric identification for school/gov’t jobs NTGPS TrackingPinpointing of exact location during clock in & ID E Fout NCompatibilityiPhone, iPad (1 and 2), Android, BlackberryBulk Crew Check inTracking of entire crewsIndustry Customizable Settings C OAdd employees, jobsites, and job codesBidding AnalysisAbility to analyze historical projects for biddingdecisions Strength Weakness CONFIDENTIAL – Savvy Sync LLC 12
  • Appendix IA L NT ID E NFC O CONFIDENTIAL – Savvy Sync LLC 13
  • Financing and Progress• Ultra Lean Startup - Founders bootstrapped company• Progress to date L - Platform developed, Alpha planned April 2012 IA - SEO campaign launched – HourTrax is on page one of Google for target keywords• Current Alpha functionality (minimum viable product) - Users can add administrators and employees NT E - Individual PIN and face verification clock in & out ID - GPS time stamp with check in & out F - Administrators can add job sites - Viewing of labor data through web-based portal N - Bulk crew check in• Planned Beta functionality - C O Additional web-based portal functions (i.e. newsfeed, robust analytics, integration with 3rd party accounting software etc.) - Equipment and materials tracking - Requests for time off and breaks via mobile application (automatic calculation of net labor hours)• Seeking $250K - $500K seed round funding - Expand team - Add functionality - Launch Beta - Promote and get traction CONFIDENTIAL – Savvy Sync LLC 14
  • Financial Projections (High Case)P&L, Projected Year 1 Year 2 Year 3 Year 4 Year 5Users 667 2,667 5,333 10,000 13,333Total Employees 10,000 40,000 80,000 150,000 200,000 LTracked IARevenue TSubscription Fees $720,000 $2,880,000 $5,760,000 $10,800,000 $14,400,000Total Revenue $720,000 $2,880,000 $5,760,000 $10,800,000 $14,400,000Operating ExpensesEmployee Related E N ID $154,292 $370,300 $370,300 $370,300 $370,300Costs FPlatform Costs $399 $699 $1,299 $1,599 $1,599Facilities and Office $9,000 $15,000 $15,000 $15,000 $15,000Equipment and Related $1,000 ON $2,400 $2,400 $2,400 $2,400 CProfessional Services $5,000 $12,000 $12,000 $12,000 $12,000T&E $0 $10,000 $10,000 $10,000 $10,000Marketing and $0 $10,000 $10,000 $10,000 $10,000PromotionTotal Operating $169,691 $420,339 $420,999 $421,299 $421,299ExpensesEBITDA $550,309 $2,469,601 $5,349,011 $10,388,701 $13,988,701EBITDA (%) 76.4% 85.8% 92.9% 96.2% 97.1%EBITDA (Cumulative) $550,309 $3,019,910 $8,368,911 $18,757,612 $32,746,313Tax $192,608 $864,360 $1,872,150 $3,636,045 $4,896,045Net Income $357,701 $1,605,241 $3,476,851 $6,752,656 $9,092,656 CONFIDENTIAL – Savvy Sync LLC 15
  • Financial Projections (Mid Case)P&L, Projected Year 1 Year 2 Year 3 Year 4 Year 5Users 250 1,000 2,000 3,750 5,000Total Employees 3,750 15,000 30,000 56,250 75,000 LTracked IARevenue TSubscription Fees $270,000 $1,080,000 $2,160,000 $4,050,000 $5,400,000Total Revenue $270,000 $1,080,000 $2,160,000 $4,050,000 $5,400,000Operating ExpensesEmployee Related E N ID $154,292 $370,300 $370,300 $370,300 $370,300CostsPlatform Costs $399 $699 $1,299 $1,599 $1,599Facilities and OfficeEquipment and Related $9,000 $1,000 N F $15,000 $2,400 $15,000 $2,400 $15,000 $2,400 $15,000 $2,400 OProfessional Services $5,000 $12,000 $12,000 $12,000 $12,000T&EMarketing andPromotionTotal Operating $0 $0C $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $169,691 $420,339 $420,999 $421,299 $421,299ExpensesEBITDA $100,309 $659,601 1,739,001 $3,628,701 $4,978,701EBITDA (%) 37.2% 61.1% 80.5% 89.6% 92.2%EBITDA (Cumulative) $100,309 $759,910 $2,498,911 $6,127,612 $11,106,313Tax $35,108 $230,860 $608,650 $1,270,045 $1,742,545Net Income $65,201 $428,741 $1,130,351 $2,358,656 $3,236,156 CONFIDENTIAL – Savvy Sync LLC 16
  • Financial Projections (Low Case)P&L, Projected Year 1 Year 2 Year 3 Year 4 Year 5Users 83 333 667 1,250 1,667Total Employees 1,250 5,000 10,000 18,750 25,000 LTracked IARevenueSubscription Fees $90,000 $360,000 $720,000 $1,350,000 $1,800,000Total Revenue $90,000 $360,000 T $720,000 N $1,350,000 $1,800,000 EOperating ExpensesEmployee Related ID $154,292 $370,300 $370,300 $370,300 $370,300CostsPlatform Costs $399 $699 $1,299 $1,599 $1,599Facilities and OfficeEquipment and Related $9,000 $1,000 N F $15,000 $2,400 $15,000 $2,400 $15,000 $2,400 $15,000 $2,400 OProfessional Services $5,000 $12,000 $12,000 $12,000 $12,000T&EMarketing andPromotionTotal Operating C $0 $0 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $169,691 $420,339 $420,999 $421,299 $421,299ExpensesEBITDA $(79,691) $(60,339) $299,001 $928,701 $1,378,701EBITDA (%) 0% 0% 41.5% 68.8% 76.6%EBITDA (Cumulative) $(79,691) $(140,090) $158,911 $1,087,612 $2,466,313Tax $0 $0 $104,650 $325,045 $482,545Net Income $(79,691) $(60,339) $194,351 $603,656 $896,156 CONFIDENTIAL – Savvy Sync LLC 17
  • Marketing Plan• Direct - L Target small to midsize construction firms. Specifically, our focus will be on IA firms in the following industries: residential development, commercial T development, landscaping, snow removal, electrical, and plumbing N E - Organize a private Alpha to garner feedback and testimonials ID - Utilize blogs, online forums, and social network to reach target audience F - Encourage viral promotion through Facebook and Twitter - SEM and SEO ON• Affiliate Marketing - C EPA and local governments: promote HourTrax as an environmentally friendly substitute to paper timesheets - Collaborate with software vendors in a licensing partnership CONFIDENTIAL – Savvy Sync LLC 18
  • TeamJonathan Trope, Co-CEO and CMO Jonathan Trope is an Associate at Spencer Barnor Capital where he L has had transaction experience in industries ranging from clean- IA tech to consumer technology. Before joining SBC, he was a consultant at Argus Information & Advisory Services where he T advised clients in the financial services industry. Jonathan N E graduated magna cum laude from New York University with a BA in ID economics and minors in business studies and mathematics NPavan Malhotra, Co-CEO and CTO F C O Pavan Malhotra is a senior at New York University studying computer science at the Courant Institute. He has experience in developing enterprise software as a Software Engineer for Summit Brokerage Services, where he developed financial software to manage a $75 million account. Prior to that he was a Research Assistant at the Seeman Laboratory where he used DNA molecules to create a molecular time clock CONFIDENTIAL – Savvy Sync LLC 19
  • Thank YouContact:Jonathan Trope LFounder and Co-CEO IAjtrope@hourtrax.com T646.373.1435 E N F ID ON C CONFIDENTIAL – Savvy Sync LLC 20