Asure Software Inc.
Mar 30, 2016

Asure Software Reports 2015 Financial Results and Reaffirms 2016 Expectations

Fourth Quarter 2015 Financial Summary 

        
In thousands, except per share data  Q4 2015Q4 2014% ChangeYTD Q4 2015  YTD Q4 2014  % Change
Revenue $  6,761 $  7,101 down 5%   $26,906 $27,206 down 1%
Gross Margin $  4,702 $  5,313 down 12%   $19,566 $20,892 down 6%
Net income (loss) $  (795)$  92 down 964%   $(1,757)$(262)down 571%
EBITDA, excluding one-times* $  609 $  1,345 down 51%   $3,734 $5,052 down 25%
Diluted net income (loss) per share, excluding one-times* $  (0.08)$  0.04     $(0.17)$0.08  
                       

AUSTIN, Texas, March 30, 2016 (GLOBE NEWSWIRE) --  Asure Software, Inc. (NASDAQ:ASUR), a leading provider of workplace management software, announced results for the fourth quarter and fiscal year ended December 31, 2015.

Operational Highlights             

Financial Results

Management Commentary

"In 2015 we did not have the desired financial results as we expected," said Pat Goepel, CEO of Asure Software. "However during the year, we made important investments in our sales, product, marketing, and operating model. We expanded our global presence which enabled us to deliver a differentiated workplace management solution to the market.

"Four key indicators will provide a solid foundation in 2016 are as follows;

"In summary, we feel we are prepared to grow organically and scale through acquisition opportunities. While 2015 was an important year for us, in terms of expanding our client base and making investments into areas where we see growth, we believe 2016 will mark an inflection point in our company's operating history. We believe our synergies with Mangrove's client base and operational model provides us with a strong foundation for continued growth today and for years to come."

Fiscal 2016 Financial Guidance

On a proforma basis, including the company's recent acquisition of Mangrove on March 21, 2016 and under the condition that Mangrove and Asure had been combined as a single company on January 1, 2016, Asure management reaffirmed its expectations for 2016:

       
Company Outlook      
$000s     Fiscal 2016 (versus fiscal 2015)
Revenue     $37,500 to $38,500 (+39% to +43%)
EBITDA, excluding one-time items     $7,500 to $8,000 (+101% to +114%)
Net income per share, excluding one-time items     $0.12 to $0.20 (an improvement from a loss of $0.17)
       

Conference Call Details
Asure management will host a conference call for the investment community today (March 30, 2016) at 11:00 a.m. EDT, (10:00 a.m. CDT) to further discuss these financial results 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 36257329.

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) is headquartered in Austin, Texas with regional headquarters in London, England. Asure helps companies better manage their global, mobile workforces with cloud-based and mobile solutions that bring people, time, space and assets together in a meaningful way. The company serves approximately 7,000 clients worldwide with workplace and workforce management solutions that offer innovative ways to help meet the needs of an agile workforce. For more information, please visit www.asuresoftware.com.

"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.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands) 
       
  December 31, 2015  December 31,
2014
 
Assets       
Current assets:       
Cash and cash equivalents $1,158  $320 
Accounts and note receivable, net of allowance for doubtful accounts of $145 and $120 at December 31, 2015 and December 31, 2014, respectively  4,671   5,295 
Inventory  784   170 
Prepaid expenses and other current assets  1,195   1,303 
Total current assets  7,808   7,088 
Property and equipment, net  2,212   1,539 
Goodwill  17,436   17,500 
Intangible assets, net  6,026   8,322 
Other assets  729   19 
Total assets $ 34,211  $ 34,468 
Liabilities and stockholders' equity        
Current liabilities:        
Current portion of notes payable $1,031  $750 
Accounts payable  2,670   1,533 
Accrued compensation and benefits  715   350 
Other accrued liabilities  1,181   1,128 
Deferred revenue  10,803   10,641 
Total current liabilities  16,400   14,402 
Long-term liabilities:        
Deferred revenue  947   475 
Notes payable  12,656   14,381 
Other liabilities  490   739 
Total long-term liabilities  14,093   15,595 
Stockholders' equity:        
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding  -   - 
Common stock, $.01 par value; 11,000 shares authorized; 6,674 and 6,434 shares issued, 6,290 and 6,050 shares outstanding at December 31, 2015 and December 31, 2014, respectively  67   64 
Treasury stock at cost, 384 shares at December 31, 2015 and December 31, 2014  (5,017)  (5,017)
Additional paid-in capital  279,649   278,656 
Accumulated deficit  (270,903)  (269,146)
Accumulated other comprehensive loss  (78)  (86)
Total stockholders' equity  3,718   4,471 
Total liabilities and stockholders' equity $34,211  $34,468 


ASURE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands, except share and per share data)
    
  FOR THE
TWELVE MONTHS ENDED
DECEMBER 31,
 
  2015  2014 
Revenues:        
Cloud revenue $13,628  $13,716 
Hardware revenue  3,300   2,623 
Maintenance and support revenue  6,054   6,489 
On premise software license revenue  856   999 
Professional services revenue  3,068   3,379 
Total revenues  26,906   27,206 
Cost of Sales  7,340   6,314 
Gross margin  19,566   20,892 
         
Operating expenses        
Selling, general and administrative  14,964   13,999 
Research and development  3,053   3,310 
Amortization of intangible assets  1,866   1,999 
Total operating expenses  19,883   19,308 
         
Income (loss) from operations  (317)  1,584 
         
Other income (loss)        
Gain on settlement of note payable and litigation  -   1,034 
Interest income  22   (1)
Loss on lease termination  (110)  - 
Loss on debt refinancing  (4)  (1,402)
Foreign currency gain (loss)  1   (14)
Interest expense and other  (1,109)  (1,274)
Interest expense - amortization of original issue discount (OID)  (21)  (72)
Total other loss  (1,221)  (1,729)
         
Loss from operations before income taxes  (1,538)  (145)
Income tax provision  (219)  (117)
Net loss $(1,757) $(262)
Other comprehensive income (loss):        
Foreign currency translation gain  8   18 
Other comprehensive loss $(1,749) $(244)
         
Basic and diluted net loss per share        
Basic $(0.28) $(0.04)
Diluted $(0.28) $(0.04)
Weighted average basic and diluted shares        
Basic  6,176,000   6,002,000 
Diluted  6,176,000   6,002,000 


ASURE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
    
  FOR THE
TWELVE MONTHS ENDED
DECEMBER 31,
 
  2015  2014 
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $(1,757) $(262)
Adjustments to reconcile net loss to net cash provided by operations:        
Depreciation and amortization  3,012   2,821 
Provision for doubtful accounts  100   48 
Share-based compensation  409   226 
Gain on settlement of note payable and litigation  -   (1,034)
Loss on debt refinancing  4   1,402 
Other  28   72 
Changes in operating assets and liabilities:        
Restricted cash  -   400 
Accounts and note receivable  524   (1,419)
Inventory  (615)  (93)
Prepaid expenses and other assets  (527)  (82)
Accounts payable  1,120   (136)
Accrued expenses and other long-term obligations  422   550 
Deferred revenue  635   213 
 Net cash provided by operating activities  3,355   2,706 
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Acquisitions net of cash acquired  -   (3,440)
Purchases of property and equipment  (1,406)  (807)
Disposals of property and equipment  18   38 
Collection of note receivable  -   9 
 Net cash used in investing activities  (1,388)  (4,200)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from notes payable  5,300   18,181 
Payments on notes payable  (6,765)  (19,311)
Payments on amendment of senior notes payable  (75)  (704)
Debt financing fees  -   (565)
Payments on capital leases  (190)  (144)
Insurance proceeds for settlement of notes payable dispute, net of expenses  -   372 
Net proceeds from exercise of stock options  587   24 
 Net cash used in financing activities  (1,143)  (2,147)
         
Effect of foreign exchange rates  14   23 
         
Net increase (decrease) in cash and cash equivalents  838   (3,618)
Cash and cash equivalents at beginning of period  320   3,938 
Cash and cash equivalents at end of period $1,158  $320 
         
SUPPLEMENTAL INFORMATION:        
Cash paid for:        
Interest $995  $941 
         
Non-cash Investing and Financing Activities:        
Note receivable from customer  601   - 
Accrued contingent consideration upon acquisition  -   327 
Conversion of subordinated convertible notes payable to equity  -   248 
Accrued purchases of property and equipment  17   - 
         

*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
   
$000sDecember 31,
2015
December 31,
2014
Net Income (loss) (795) 92 
Interest and amortization of OID 270  275 
Tax 74  (2)
Depreciation 229  126 
Amortization 459  635 
Stock Compensation 74  95 
EBITDA 311  1,200  
  One-time items   298  145 
EBITDA excluding one-time items 609  1,345 
       


FOR THE TWELVE MONTHS ENDED
   
$000sDecember 31,
2015
December 31,
2014
Net Income (loss) (1,757)     (262)
Interest and amortization of OID 1,117    1,354 
Tax 219    117 
Depreciation 721    462 
Amortization 2,291    2,359 
Stock Compensation 409    226 
EBITDA 3,000      4,256 
  One-time items    734      796 
EBITDA excluding one-time items 3,734      5,052 
  


Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
 
FOR THE THREE MONTHS ENDED
     
$000s December 31,
2015 
 December 31,
2014
Net Income (loss) (795)92
Legal & Professional Services 57 21
Severance, Recruitment & Relocation - 111
Other one-time items (net) 241  13
 Sub-total excluding Taxes 298 145
Sub-total one-time items 298 145
Net Income (loss) excluding one-time items (497)237 


FOR THE TWELVE MONTHS ENDED
       
$000s December 31,
2015
  December 31,
2014
 
Net Income (loss) (1,757) (262 )
Legal & Professional Services 92  208 
Loss on Debt Refinancing -  1,402 
Gain on Settlement of Note Payable and litigation -  (1,034)
Severance, Recruitment & Relocation 55  195 
Gain on sale of assets -  - 
Interest income from settlement -  - 
Other one-time items (net) 587  25 
 Sub-total excluding Taxes 734  796 
Sub-total one-time items 734  796  
Net Income (loss) excluding one-time items (1,023) 534  


Company Contact: 
Brad Wolfe, CFO
Asure Software, Inc.
888-323-8835
bwolfe@asuresoftware.com 

Investor Relations Contact:
Matt Glover and Najim Mostamand
Liolios Group, Inc.
949-574-3860
ASUR@liolios.com