Another way is to use an Assign Token Values activity and reformat the time. Take the military time token, check the box for "Apply Formatting" and give it the format you want, in your example, "h:mm:tt". 

You can read more about about Date/Time formatting here:

http://www.laserfiche.com/support/webhelp/workflow/9.1/en-us/LFWorkflow.htm#Resources/Tokens%20and%20Regex/Token Formatting--Date and Time.htm