Asure Software Inc.
Apr 1, 2013

Asure Software Reports 2012 Fourth Quarter and Fiscal Year Financial Results

AUSTIN, Texas, April 1, 2013 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the fourth quarter ended December 31, 2012.

Q4 Strategic Highlights

Q4 and Year-End Results

Management Commentary

Pat Goepel, Chief Executive Officer of Asure Software commented, "Fiscal year 2012 was a strong year financially and strategically, resulting in $20.0 million in revenue and improved strategic positioning. We completed the acquisition of PeopleCube, as well as two smaller acquisitions of technology and customers, shifted more of our business to SaaS as recurring revenue and upgraded our products via strong development efforts throughout the year. This quarter we increased the number of sales people in our direct sales channel reflecting our focus on growth going forward. Revenue was up over the previous quarter and we exited the year with $2.4 million in cash. " Mr. Goepel also commented, "We met our revenue guidance and came just short of our EBITDA guidance as we absorbed the cost of more new sales hires and continued our shift to SaaS-based recurring revenue which represented 50% of all revenue in 2012."  

Jennifer Crow, Asure's Chief Financial Officer added, "We recently amended our credit facility with our primary lender, Deerpath Funding, LP. This amendment provides for less stringent covenant requirements, given our investments toward growth, and an expanded conditional credit commitment to $10 million to fund permitted acquisitions. We are excited about our continued relationship with Deerpath and look forward to working with them to execute our continued growth strategy through targeted acquisitions. We are maintaining our 2013 revenue guidance range but due to the aforementioned increased investment in our direct sales channel and our spending for growth, we have revised our 2013 EBITDA guidance, excluding one-times*, to be at the low end of the previously communicated range."

Please see below for details around Asure's financial results.

Company Outlook    
  Q1 13  FY 13
Revenue  $5,700 - $6,000 $25,000 - $27,000
EBITDA, excluding one-time items $400 - $600 $6,000
     

Conference Call Details

Asure will follow this announcement with a conference call for the investment community on Monday, April 1, 2013 at 4:15 p.m. EDT, (3:15 p.m. CDT) 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 15202606.

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 cloud-based time and labor management and workspace management solutions that enable businesses to control their biggest costs -- labor, real estate and technology  -- and prepare for the workforce of the future in a highly mobile, geographically disparate and technically wired work environment. Asure serves approximately 6,000 clients worldwide and currently offers two main product lines: AsureSpace™ workplace management solutions enable organizations to maximize the ROI of their real estate, and AsureForce® time and labor management solutions deliver efficient management of human resource and payroll processes.  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
$000sDecember 31,
2012
December 31,
2011

Inc/Dec
Net Gain/(Loss)(633)(645)12
Interest 575 129 446
Interest — OID and Mark to Market 0 604 (604)
Tax 89 42 47
Depreciation 92 52 40
Amortization 629 277 352
Stock Compensation 21 26 (5)
EBITDA Gain773485 288
 One-time items175 230 (55)
EBITDA Gain excluding one-time items 948715233
 
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 TWELVE MONTHS ENDING
$000sDecember 31,
2012
December 31,
2011

Inc/Dec
Net Gain/(Loss)(3,032)(649)(2,383)
Interest 1,169 148 1,021
Interest — OID and Mark to Market 815 604 211
Tax 285 72 213
Depreciation 253 168 85
Amortization 2,042   882 1,160
Stock Compensation 88 81 7
EBITDA Gain1,620 1,306314
One-time items1,675 506 1,169
EBITDA Gain excluding one-time items3,2951,8121,483
 
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
 
$000sFOR THE THREE MONTHS ENDED
December 31
 20122011
Net Gain/(Loss)(633)(645)
Legal & Professional Services 146 126
Severance, Recruitment & Relocation 26 35
OID and Mark to Market -- 604
Other one-time items (net) 3 69
Sub-total one-time items175834
Net Gain/(Loss) excluding one-time items(458)189
 
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
 
$000sFOR THE TWELVE MONTHS ENDED
DECEMBER 31
 20122011
Net Gain/(Loss)(3,032)(649)
Legal & Professional Services 1,128 210
Severance, Recruitment & Relocation 395 140
Site Consolidation 55 0
OID and Mark to Market 465 604
Loss on Conversion of Debt 198 0
3:2 Stock Split 19 0
Provision for Taxes - Site Shut down 60 0
Other one-time items (net) 54 156
Sub-total one-time items2,3741,110
Net Gain/(Loss) excluding one-time items(658) 461
 
Reconciliation of GAAP Revenue to Non-GAAP revenue
 
$000sFOR PERIOD ENDED DECEMBER 31
 Three months
ended 2012
Twelve months
ended 2012
Revenue 5,94819,965
Adjustment 317 978
Non- GAAP revenue6,265 20,943
 
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.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
 
 December, 31
 20122011
Assets    
Current assets:    
Cash and cash equivalents $ 2,177 $ 1,067
Restricted cash 250 --
Accounts receivable, net of allowance for doubtful accounts of $182 and $19 at December 31, 2012 and 2011, respectively 3,040 1,483
Inventory 266 116
Notes receivable 19 96
Prepaid expenses and other current assets 1,497 338
Total current assets7,2493,100
Property and equipment, net 1,154 414
Goodwill 15,525 6,264
Intangible assets, net 12,179 6,307
Other assets 41 --
Total assets $ 36,148 $ 16,085
Liabilities and Stockholders' Equity    
Current liabilities:    
Line of credit $ -- $ 500
Current portion of notes payable 3,450 349
Accounts payable 2,713 1,097
Accrued compensation and benefits 78 141
Other accrued liabilities 1,013 536
Deferred revenue 9,684 4,792
Total current liabilities16,9387,415
Long-term liabilities:    
Deferred revenue 199 169
Notes payable- related party 800 1,600
Notes payable 15,887 3,970
Derivative liability -- 835
Other liabilities 164 32
Total long-term liabilities17,0506,606
Stockholders' equity:    
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding -- --
Common stock, $.01 par value; 11,000 shares authorized; 5,644 and 5,014 shares issued,
5,260 and 4,630 shares outstanding at December 31, 2012 and 2011, respectively
56 50
Treasury stock at cost, 384 shares at December 31, 2012 and 2011 (5,017) (5,017)
Additional paid-in capital 274,445 271,349
Accumulated deficit (267,222) (264,190)
Accumulated other comprehensive loss (102) (128)
Total stockholders' equity2,1602,064
  $ 36,148 $ 16,085
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
ASURE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands, except share and per share data)
     
  Twelve MonthsTwelve Months
 December 31, 2012December 31, 2011
Revenues  $ 19,965  $ 10,941
Cost of sales 4,573 2,289
Gross Margin15,3928,652
        
Operating Expenses      
 Selling, general and administrative 11,803 6,203
 Research and development 2,376 1,678
 Amortization of intangible assets 1,726 680
Total Operating Expenses15,9058,561
        
Income (Loss) From Operations(513)91
        
Other Income (Loss)      
 Interest income 3 10
 Loss on disposal of assets (28) --
 Loss on debt conversion (198) --
 Foreign currency translation (loss) gain (27) 74
 Interest expense and other (1,169) (148)
 Interest expense — amortization of OID and derivative mark-to-market (815) (604)
Total other income (loss)(2,234)(668)
        
Loss From Operations before Income Taxes(2,747)(577)
 Provision for income taxes (285) (72)
Net Loss$ (3,032)$ (649)
Comprehensive Loss:      
Foreign currency (loss) gain  26 (98)
Comprehensive loss$ (3,006)$ (747)
        
Basic and Diluted Net Loss Per Share      
Basic $ (0.60) $ (0.14)
Diluted $ (0.60) $ (0.14)
Weighted Average Basic and Diluted Shares      
Basic 5,048,000 4,628,000
Diluted 5,048,000 4,628,000
 
ASURE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Amounts in thousands)
               
           Other  
 CommonCommon  Additional  ComprehensiveTotal
  StockStockTreasuryPaid-inAccumulatedIncomeStockholders'
 OutstandingAmountStockCapitalDeficit(Loss)Equity
BALANCE AT DECEMBER 31, 20104,627 $ 50 $ (5,017) $ 271,262 $ (263,541)$ (30) $ 2,724
Share based compensation          81       81
Net loss             (649)    (649)
Stock issued upon option exercise 3        6       6
Other comprehensive income                (98) (98)
BALANCE AT DECEMBER 31, 20114,630 $ 50 $ (5,017) $ 271,349 $ (264,190)$ (128) $ 2,064
Share based compensation          88       88
Stock issued upon option exercise 30       20       20
Issuance of stock upon debt conversion  345 3   2,244       2,247
Issuance of stock upon acquisition  255  3   744       747
Net loss             (3,032)    (3,032)
Other comprehensive income                26 26
BALANCE AT DECEMBER 31, 20125,260 $ 56 $ (5,017) $ 274,445 $ (267,222)(102) $ 2,160
 
ASURE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
     
  Twelve MonthsTwelve Months
 December 31, 2012December 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (3,032) $ (649)
Adjustments to reconcile net loss to net cash used in operations:     
Depreciation and amortization 2,295 1,050
Provision for doubtful accounts 179 10
Share-based compensation 88 81
Amortization of original issue discount (OID) 350 46
Loss on sale of assets 28 --
Derivative mark-to market 465 561
Loss on debt conversion 198   --
Changes in operating assets and liabilities:      
Restricted cash (250) --
Accounts receivable 1,095 192
Inventory (150) (5)
Prepaid expenses and other current assets (229) (70)
Accounts payable 692 377
Accrued expenses and other long-term obligations 140 257
Deferred revenue 940 1,503
Net cash provided by operating activities2,8093,353
        
CASH FLOWS FROM INVESTING ACTIVITIES:      
Net purchases of property and equipment (904) (121)
Purchases of intangible assets (351) --
Collection of note receivable 77 26
Acquisitions net of cash acquired (9,800) (10,401)
Net cash used in investing activities(10,978)(10,496)
        
CASH FLOWS FROM FINANCING ACTIVITIES:      
Payments on subordinated convertible notes payable on amendment and conversion (222) --
Payments on capital leases (33) (58)
Net proceeds from exercise of stock options 20 6
Proceeds from draw on line of credit -- 500
Payments on line of credit (500) 6,783
Proceeds from notes payable 14,500 --
Payments on notes payable (3,833) --
Debt financing fees (680) --
Net cash provided by financing activities9,2527,231
        
Effect of translation exchange rates27(91)
        
Net increase (decrease) in cash and equivalents1,110(3)
Cash and equivalents at beginning of period1,0671,070
Cash and equivalents at end of period $ 2,177  $ 1,067
        
SUPPLEMENTAL INFORMATION:      
Cash paid for:      
Interest  $ 797  $  5 
        
Non-cash Investing and Financing Activities:      
Conversion of subordinated convertible notes payable to equity  $ 2,247 $ --
Issuance of common stock upon acquisition 747  --
CONTACT: Jennifer Crow, CFO

         Asure Software, Inc.

         512-437-2732

         jcrow@asuresoftware.com