Asure Software Inc.
Nov 14, 2012

Asure Software Reports Third Quarter Financial Results, Announces Accelerated Transition to SaaS

AUSTIN, Texas, Nov. 14, 2012 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, today announced results for the third quarter, which ended September 30th, 2012.

Q3 Strategic Highlights

Q3 Results

Management Commentary

Pat Goepel, Chief Executive Officer of Asure Software commented, "Our third quarter saw us complete an important transaction with the acquisition of PeopleCube. The addition of PeopleCube's offerings to our product line and our fully-SaaS based AsureForce platform align with our strategic shift to a pure-play SaaS-based recurring revenue model. Goepel also commented, "Third quarter earnings and gross margin were up over the previous quarter 2012 and we saw strong cash at $1.3 million. We also experienced a non-cash deferred revenue charge due to the PeopleCube acquisition in the third quarter."

Jennifer Crow, Asure's Chief Financial Officer added, "Our guidance is being revised (per below) to reflect the fair market valuation accounting treatment of deferred revenue and reduced perpetual revenue, offset by expected SaaS business. As a reminder, perpetual revenue (and correlated profit) is recognized immediately upon booking, whereas SaaS and recurring revenues are recognized ratably over longer time periods. Thus, an accelerated shift to SaaS, including the PeopleCube acquisition, has a negative impact to near-term reported financials but our Board believes it increases the Company's value over the longer term. Asure continues to generate strong cash flow while managing costs and expects to continue to do so, which positions us well for future financial growth and strong forward performance." Please see below for details around Asure's financial results.

Company Outlook

 Q4FY 13
Revenue  5,800-6,200 25,000-27,000
EBITDA, excluding one-time items 1,000-1,300 6,000 - 7,000
Free cash flow   6,000 -7,000

 Conference Call Details

Asure will follow this announcement with a conference call for the investment community on Wednesday, November 14, 2012 at 11:00 a.m. EST, (10:00 a.m. CST) to further discuss the quarter and outlook. Participating in the call will be Pat Goepel, Chief Executive Officer and Jennifer Crow, Chief Financial Officer. To participate, dial (877) 853-5636 ten minutes before the call begins. International callers should dial (631) 291-4544. The conference ID for all callers is 34307490.

Investors, analysts, media and the general public will also have the opportunity to listen to the conference call in listen-only mode via the Internet by visiting the investor relations page of Asure's web site at www.asuresoftware.com. To monitor the live call, please visit the web site at least ten minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, an archived replay will be available shortly after the call at http://investor.asuresoftware.com /

About Asure Software     

Asure Software, Inc. (Nasdaq:ASUR), headquartered in Austin, Texas, offers intuitive and innovative workplace and workforce management solutions that enable companies of all sizes and complexities to operate more efficiently and better control costs. The company ensures a high-performing work environment by delivering its "keep it simple" solutions and expertise to more than 11,000 clients worldwide. Asure Software's suite of solutions ranges from time and attendance workforce management solutions to intelligent on-demand workplace management solutions. For more information, please visit www.asuresoftware.com.

The Asure Software, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11986

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Statements in this press release regarding Asure's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. Such risks and uncertainties could cause actual results to differ from those contained in the forward-looking statements.

*Non-GAAP Financial Measures

This press release includes the following financial measures defined as a non-GAAP financial measure by the Securities and Exchange Commission: EBITDA and GAAP Net Income/(Loss) excluding one-time items. These supplemental financial measures are not required by GAAP, nor are the presentation of this financial information intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management recognizes that non-GAAP financial measures have limitations in that they do not reflect all of the items associated with Asure's earnings results as determined in accordance with GAAP. However, for the reasons described below, management uses these non-GAAP measures to evaluate the performance of Asure's business. Asure's management believes that it is important to provide investors with these same tools, together with reconciliation to GAAP, for evaluating the performance of Asure's business, as it may provide additional insight into Asure's financial results. See the "Reconciliation of GAAP Net Income/(Loss) to Earnings Before Interest, Taxes, Depreciation, Amortization and Stock Compensation Expense (EBITDA)" and the "Reconciliation of GAAP Net Income/(Loss) to Net Earnings Excluding One-Time Items" tables included in this press release for further information regarding these non-GAAP financial measures. In addition, these measures are presented because management believes they are frequently used by securities analysts, investors and others in the evaluation of companies.

EBITDA is calculated by adding income taxes, interest expense, depreciation and amortization and stock compensation expense to net earnings, EBITDA is not defined under GAAP and should not be considered in isolation or as a substitute for net earnings and other consolidated earnings data prepared in accordance with GAAP or as a measure of Asure's profitability.

Net Earnings Excluding One-Time Items is calculated by combining the company's GAAP Net Earnings, or earnings per share, with items that are one time in nature and are not expected to recur on a dollar or per share basis.

Free Cash Flow is computed by subtracting capital expenditures from cash flow from operations, each as determined in accordance with GAAP and as reflected in the statement of cash flows.

Non-GAAP Revenue is computed added back the deferred revenue fair market valuation to GAAP revenue. 

Reconciliation of GAAP Net Earnings to Earnings Before Interest, Taxes, Depreciation, Amortization and Stock
Compensation Expense (EBITDA) and EBITDA Gain Excluding One-time items.  
       
FOR THE THREE MONTHS ENDING    
$000sSeptember 30,
2012
September 30,
2011

Inc/Dec
Net Gain/(Loss)(1228)29(1257)
Interest 578 9 569
Interest - Mark to Market 0 0 0
Tax 30 9 21
Depreciation 56 33 23
Amortization 699 195 504
Stock Compensation 32 27 5
EBITDA Gain167302(135)
One-time items739160 579
EBITDA Gain excluding one-time items906462444
       
Reconciliation of GAAP Net Earnings to Earnings Before Interest, Taxes, Depreciation, Amortization and Stock
Compensation Expense (EBITDA) and EBITDA Gain Excluding One-time items.  
       
FOR THE NINE MONTHS ENDING    
$000sSeptember 30,
2012
September 30,
 2011

Inc/Dec
Net Gain/(Loss)(2,399)(4)(2395)
Interest 942 31 911
Interest - Mark to Market (MTM) 465 0 465
Tax 196 30 166
Depreciation 161 114 47
Amortization 1,413 585 828
Stock Compensation 66 55 11
EBITDA Gain84481133
One-time items1,675276 1,399
EBITDA Gain excluding one-time items2,5191,0871,432
   
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items  
   
$000sFOR THE THREE MONTHS ENDED
September 30
 20122011
Net Gain/(Loss)(1,228)29
Legal & Professional Services 439 84
Severance & Recruitment 273 26
Site Consolidation 5 0
Other one-time items (net) 22 50
Sub-total one-time items739160
Net Gain excluding one-time items(489)189
     
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items  
   
$000sFOR THE NINE MONTHS ENDED
SEPTEMBER 30
 20122011
Net Gain/(Loss)(2,399)(4)
Legal & Professional Services 982 84
Severance & Recruitment 369 105
Site Consolidation 55 0
Interest - Mark to Market 465 0
Loss on Conversion of Debt 199 0
3:2 Stock Split 19 0
Provision for Taxes - Site Shut down 60 0
Other one-time items (net) 50 87
Sub-total one-time items2,199276
Net Gain excluding one-time items(200)272
     
     
Reconciliation of GAAP Revenue to Non-GAAP revenue  
   
$000sFOR PERIOD ENDED SEPTEMBER 30
 Three months
ended 2012
Nine months
ended 2012 
Revenue 5,65914,017
Adjustment 556 661
Non- GAAP revenue6,21514,678
Note — Adjustment relates to the fair market valuation for assumed deferred revenue contracts that were not recognized in the period due to business combination accounting rules. 
     
ASURE SOFTWARE , INC.    
 CONDENSED CONSOLIDATED BALANCE SHEETS    
(Amounts in thousands, except per share data)    
(Unaudited)    
     
 September 30, 2012December 31, 2011
ASSETS    
 Current Assets:    
Cash and equivalents $2,746 $1,067
Accounts receivable, net of allowance for doubtful accounts of $203 and $19 at September 30, 2012 and December 31, 2011, respectively 3,312 1,483
Notes receivable 24 96
Inventory 174 116
Prepaid expenses and other current assets 1,305 338
Total Current Assets 7,561 3,100
     
Property and equipment, net 501 414
Intangible assets, net 12,805 6,307
Goodwill 14,830 6,264
Other 29 --
Total Assets$35,726$16,085
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities:    
Line of credit $-- $500
Current portion of notes payable 101 349
Accounts payable 2,208  1,097
Accrued compensation and benefits 78 141
Other accrued liabilities 725 536
Deferred revenue 9,673 4,792
Total Current Liabilities 12,785 7,415
     
 Long-term liabilities:    
Deferred revenue 14 169
Note payable 14,500 --
Sellers note 2,438 --
Subordinated notes payable 2,916 4,323
Subordinated convertible notes 283 1,247
Derivative liability -- 835
Other long-term obligations 25 32
Total Long-Term Liabilities 20,176 6,606
     
Stockholders' Equity:    
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding
Common stock, $.01 par value; 11,000 shares authorized; 5,642 and 5,014 shares issued; 5,258 and 4,630 shares outstanding at September 30, 2012 and December 31, 2011, respectively 339 334
 Treasury stock at cost, 384 shares at September 30, 2012 and December 31, 2011 (5,017) (5,017)
 Additional paid-in capital 274,136 271,065
 Accumulated deficit (266,590) (264,190)
 Accumulated other comprehensive loss (103) (128)
Total Stockholders' Equity 2,765 2,064
Total Liabilities and Stockholders' Equity$35,726$16,085
 
ASURE SOFTWARE , INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
         
 FOR THE
THREE MONTHS ENDED
SEPTEMBER 30,
FOR THE
NINE MONTHS ENDED
SEPTEMBER 30,
 2012201120122011
Revenues$5,659$2,502$14,017$7,293
Cost of Sales(936)(486)(2,973)(1,363)
Gross Margin4,7232,01611,0445,930
         
Operating Expenses:        
Selling, general and administrative 3,975 1,526 8,443 4,340
Research and development 809 366 1,991 1,150
Amortization of intangible assets 573 150 1,158 449
Total Operating Expenses5,3572,04211,5925,939
         
Income/(Loss) From Operations(634)(26)(548)(9)
         
Other Income (Expenses):        
Interest income -- 2 3 8
Foreign currency translation (loss)/gain 7 67 (22) 47
Gain/ (Loss) on disposal of assets 9 -- (28) --
(Loss) on debt conversion -- -- (198) --
Interest expense- amortization of OID and derivative mark-to market (578) -- (1,409) --
Interest expense and other (2) (5) (1) (20)
Total Other Income (Expense)(564)64(1,655)35
         
(Loss)/Income From Operations Before Income Taxes (1,198) 38 (2,203) 26
Income Tax Expense (30) (9) (196) (30)
Net (Loss)/Income$(1,228)$29$(2,399)$(4)
         
Basic (Loss)/Income Per Share $(0.23) $0.01 $(0.48) $(0.00)
Diluted (Loss)/Income Per Share $(0.23) $0.01 $(0.48) $(0.00)
         
Shares Used In Computing Basic (Loss)/Income Per Share 5,245 3,085 4,976 3,085
Shares Used In Computing Diluted (Loss)/Income Per Share 5,245 3,094 4,976 3,085
 
ASURE SOFTWARE , INC.
  Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(Unaudited)
         
 FOR THE
THREE MONTHS ENDED
SEPTEMBER 30,
FOR THE
NINE MONTHS ENDED
SEPTEMBER 30,
 2012201120122011
Net (Loss)/Income $(1,228) $29 $(2,399) $(4)
Other comprehensive (Loss)/Income:        
 Foreign currency translation (loss)/Gain (2) (74) 24 (65)
Comprehensive Loss(1,230)(45)(2,375)(69)
 
ASURE SOFTWARE, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except per share data)
(Unaudited)
     
 FOR THE NINE MONTHS
  ENDED
  SEPTEMBER 30,
 20122011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $(2,399) $(4)
Adjustments to reconcile net loss to net cash provided by operations:    
Depreciation and amortization 1,574 702
Provision for doubtful accounts (16) (29)
Share-based compensation 67 55
Interest expense — amortization of OID and derivative mark-to-market 643 --
Loss on sale/disposal of assets 36 --
Loss on debt conversion 198 --
Changes in operating assets and liabilities:    
Notes receivable -- 2
Accounts receivable 435 289
Inventory (58) 19
Prepaid expenses and other current assets (187) 28
Accounts payable 229 126
Accrued expenses and other long-term obligations (297) 30
Deferred revenue 1,184 601
Net cash provided by operating activities 1,409 1,819
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
     
Net purchases of property and equipment (167) (60)
Acquisitions of PeopleCube net of Cash acquired (9,316) --
(Issuance) or collection of note receivable 72 --
Net used in investing activities (9,411) (60)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Payments on notes payable and capital leases (3,462) (36)
Payments on notes payable conversion (222) --
Payments on Line of credit (500) 3,350
Proceeds from notes Payable  14,500  
Acquisition fees (680)  
Net proceeds from exercise of options 19 --
Net cash provided by financing activities 9,655 3,314
     
Effect of translation exchange rates 26 (61)
     
Net increase in cash and equivalents1,6795,012
Cash and equivalents at beginning of period1,0671,070
Cash and equivalents at end of period$2,746$6,082
     
SUPPLEMENTAL INFORMATION:    
Interest Paid $437--
Payments of accelerated interest on subordinated convertible notes payable on conversion 211--
Non-Cash Financing Activity — conversion of subordinated convertible notes payable to equity 969--
CONTACT: Jennifer Crow, CFO

         Asure Software, Inc.

         512-437-2732

         jcrow@asuresoftware.com

         

         Jon Cunningham

         RedChip Companies, Inc.

         Tel: +1-800-733-2447, Ext. 107

         info@redchip.com

         http://www.redchip.com