Asure Software Inc.
Nov 12, 2014

Asure Software Continues Improvements in Revenue Growth and Profitability With Solid Financial Results for 2014 Third Quarter

 
In thousands, except per share dataQ3 2014Q3 2013% Change YTD Q3 2014YTD Q3 2013% Change
Revenue $7,030 $6,470 Up 9% $20,105 $18,742 Up 7%
Gross margin $5,435 $4,928 Up 10% $15,579 $13,941 Up 12%
Net income (loss) $161 $109 Up 48% ($354) ($1,560) Up 77%
EBITDA, excluding one-times* $1,382 $1,462 Down 6% $3,701 $3,340 Up 11%
Diluted net income (loss) per share, excluding one-times* $0.04 $0.04   $0.05 ($0.16)  

AUSTIN, Texas, Nov. 12, 2014 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the third quarter ended September 30, 2014.

Strategic Highlights

Results

Management Commentary

Pat Goepel, Chief Executive Officer of Asure Software commented, "Consistent with our overall strategy, the company continues to drive toward repetitive revenue growth and operational efficiency. In Q3, Asure brought several best-in-breed technologies to market that directly support our continued focus on bringing SaaS-based best-in-class solutions to a global market place. These expanded capabilities, along with the expansion of our partner channels, allow us to drive sales, growth and long-term profitability; as a result, Q4 sales activity is encouraging."

Brad Wolfe, Asure's Chief Financial Officer added, "Third quarter brought continued improvement in net income and growth in bookings. The combination of SaaS-based repetitive revenue with one-time revenue gained from professional services and integrated hardware sales has had a positive impact on the quarter and year over year Cloud revenue growth remains positive. We anticipate a strong end to the year with continued year over year growth in both revenue and EBITDA. As we approach year end, we are adjusting our guidance for the full year as reflected below."     

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

Company Outlook  
$000sFY 14
Revenue $27,000 - $28,000
EBITDA, excluding one-time items $5,000 - $6,000
Net income per share, excluding one-time items $0.12 - $0.16

Conference Call Details

Asure will follow this announcement with a conference call for the investment community on Wednesday, November 12, 2014 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 Brad Wolfe, 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 23379638.

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, a replay will be available shortly after the call on the investor relations page of our Web site 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.

ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
     
 September 30,December 31,
 20142013
Assets    
Current assets:    
Cash and cash equivalents  $ 1,637  $ 3,938
Restricted cash -- 400
Accounts receivable, net of allowance for doubtful accounts of $120 and $168 at September 30, 2014 and December 31, 2013, respectively 3,722 3,902
Inventory 318 77
Notes receivable -- 9
Prepaid expenses and other current assets 1,339 1,334
Total current assets7,0169,660
Property and equipment, net 1,243 1,233
Goodwill 18,401 15,005
Intangible assets, net 8,160 9,679
Other assets 24 38
Total assets $ 34,844  $ 35,615
Liabilities and stockholders' equity    
Current liabilities:    
Current portion of notes payable  $ 750  $ 4,308
Accounts payable 1,697 1,669
Accrued compensation and benefits 366 473
Other accrued liabilities 1,079 988
Deferred revenue 9,455 10,059
Total current liabilities13,34717,497
Long-term liabilities:    
Deferred revenue 535 759
Notes payable 15,960 12,698
Other liabilities 739 444
Total long-term liabilities17,23413,901
Stockholders' equity:    
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding -- --
Common stock, $.01 par value; 11,000 shares authorized; 6,434 and 6,353 shares issued, 6,050 and 5,969 shares outstanding at September 30, 2014 and December 31, 2013, respectively 64 63
Treasury stock at cost, 384 shares at September 30, 2014 and December 31, 2013 (5,017) (5,017)
Additional paid-in capital 278,562 278,159
Accumulated deficit (269,238) (268,884)
Accumulated other comprehensive loss (108) (104)
Total stockholders' equity $ 4,263  $ 4,217
  $ 34,844  $ 35,615
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands, except share and per share data)
(Unaudited)
         
 FOR THE  
 THREE MONTHSFOR THE
 ENDEDNINE MONTHS ENDED
 September 30,September 30,
 2014201320142013
Revenues $ 7,030  $ 6,470  $ 20,105  $ 18,742
Cost of Sales1,5951,5424,5264,801
Gross margin5,4354,92815,57913,941
         
Operating expenses        
Selling, general and administrative 3,553 3,216 10,410 9,939
Research and development 868 736 2,444 2,100
Amortization of intangible assets 494 497 1,488 1,662
Total operating expenses4,9154,44914,34213,701
         
Income from operations5204791,237240
         
Other income (loss)        
Gain on settlement of note payable and litigation -- -- 1,034 --
Interest income -- 48 -- 48
Gain (loss) on sale/disposal of assets -- 72 -- 72
Loss on debt refinancing -- -- (1,402) --
Foreign currency translation gain (loss) 2 5 (10) (19)
Interest expense and other (288) (328) (1,009) (1,378)
Interest expense- amortization of original issue discount (OID) (10) (128) (64) (403)
Total other income (loss), net(296)(331)(1,451)(1,680)
         
Income (loss) from operations before income taxes224148(214)(1,440)
Income tax provision (63) (39) (140) (120)
Net income (loss) $ 161  $ 109  $ (354) $ (1,560)
Other comprehensive income (loss):        
Foreign currency gain (loss) 14 (34) (4) 8
Other comprehensive income (loss) $ 175  $ 75  $ (358) $ (1,552)
         
Basic and diluted net income (loss) per share        
Basic  $ 0.03  $ 0.02  $ (0.06)  $ (0.28)
Diluted  $ 0.03  $ 0.02  $ (0.06)  $ (0.28)
Weighted average basic and diluted shares        
Basic 6,008,000 5,929,000 5,986,000 5,565,000
Diluted 6,284,000 6,217,000 5,986,000 5,565,000
 
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
     
 FOR THE
 NINE MONTHS ENDED
 SEPTEMBER 30,
 20142013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss  $ (354)  $ (1,560)
Adjustments to reconcile net loss to net cash provided by operations:    
Depreciation and amortization 2,060 2,234
Provision for doubtful accounts 20 27
Share-based compensation 131 113
Amortization of original issue discount (OID) 64 403
Gain on settlement of note payable and litigation (1,034) --
(Gain) loss on sale/disposal of assets -- (72)
Interest income on settlement -- (48)
Discount on early payoff of Legiant Notes -- (135)
Loss on debt refinancing 1,402 --
Changes in operating assets and liabilities:    
Restricted cash 400 (150)
Accounts receivable 182 (672)
Inventory (241) 84
Prepaid expenses and other assets (122) 196
Accounts payable 28 (967)
Accrued expenses and other long-term obligations 150 658
Deferred revenue (1,015) 1,058
Net cash provided by operating activities1,6711,169
     
CASH FLOWS FROM INVESTING ACTIVITIES:  
Acquisitions net of cash acquired (3,111) --
Net purchases of property and equipment (347) (143)
Collection of note receivable 9 10
Net cash used in investing activities(3,449)(133)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Payments on notes payable (17,723) (5,707)
Proceeds from notes payable 18,179 2,500
Payments on amendment of senior notes payable (704) --
Net proceeds from issuance of common stock -- 3,435
Debt financing fees (565) (298)
Insurance proceeds for settlement of notes payable dispute, net of expenses 373 --
Payments on capital leases (104) (64)
Net proceeds from exercise of options 24 13
Net cash used in financing activities(520)(121)
     
Effect of translation exchange rates(3)14
     
Net increase (decrease) in cash and cash equivalents(2,301)929
Cash and equivalents at beginning of period3,9382,177
Cash and equivalents at end of period $ 1,637  $ 3,106
     
SUPPLEMENTAL INFORMATION:    
Cash paid for:    
Interest $ 937 $ 361
     
Non-cash Investing and Financing Activities:    
Conversion of subordinated convertible notes payable to equity 249 --
Accrued contingent consideration upon acquisition 327  --

*Non-GAAP Financial Measures

This press release includes the following financial measures defined as non-GAAP financial measures 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 is 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 by adding 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 Excluding One-time items.

FOR THE THREE MONTHS ENDED
 September 30,September 30,
$000s20142013
Net Income (Loss)161109
Interest and amortization of OID 298 456
Tax 63 39
Depreciation 115 111
Amortization 578 599
Stock Compensation 50 44
EBITDA1,2651,358
One-time items117104
EBITDA excluding one-time items1,3821,462
     
FOR THE NINE MONTHS ENDED
 September 30,September 30,
$000s20142013
Net Income (Loss)(354)(1,560)
Interest and amortization of OID 1,073 1,781
Tax 140 120
Depreciation 337 331
Amortization 1,723 1,903
Stock Compensation 131 113
EBITDA3,0502,688
One-time items651652
EBITDA excluding one-time items3,7013,340
     
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
 FOR THE THREE MONTHS 
$000sENDED September 30
 20142013
Net Income (Loss)161109
Legal & Professional Services 107 224
Severance, Recruitment & Relocation -- --
Gain on sale of assets -- (72)
Interest income from settlement -- (48)
Other one-time items (net) 10 --
Sub-total excluding Taxes117104
Sub-total one-time items117104
Net Gain/(Loss) excluding one-time items278213
     
 FOR THE NINE MONTHS ENDED 
$000sSeptember 30
 20142013
Net Loss(354)(1,560)
Loss on Debt Refinancing 1,402 --
Gain on Settlement of Note Payable and litigation (1,034) --
Legal & Professional Services 187 534
Severance, Recruitment & Relocation 73 160
Gain on sale of assets -- (72)
Interest income from settlement -- (48)
Other one-time items (net) 23 78
Sub-total excluding Taxes and MTM651652
Sub-total one-time items651652
Net Gain/(Loss) excluding one-time items297(908)
     
Reconciliation of GAAP Revenue to Non-GAAP revenue
     
 FOR THE THREE MONTHS ENDED
$000sSeptember 30
 20142013
Revenue7,0306,470
Adjustment -- 40
Non- GAAP revenue7,0306,510
     
 FOR THE NINE MONTHS ENDED
$000sSeptember 30
 20142013
Revenue20,10518,742
Adjustment -- 403
Non- GAAP revenue20,10519,145
     
 
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.
CONTACT: For more information contact:

         Pat Goepel, CEO

         Asure Software, Inc.

         888-323-8835

         pgoepel@asuresoftware.com