Asure Software Reports Revenue and Financial Results for 2015 Third Quarter
| In thousands, except per share data | Q3 2015 | Q3 2014 | % Change | YTD Q3 2015 | YTD Q3 2014 | % Change | ||||||||||
| Revenue | $ | 6,654 | $ | 7,030 | down 5% | $ | 20,145 | $ | 20,105 | up 0.2% | ||||||
| Gross Margin | $ | 4,904 | $ | 5,435 | down 10% | $ | 14,864 | $ | 15,579 | down 5% | ||||||
| Net income (loss) | ($ | 574 | ) | $ | 161 | down 457% | ($ | 962 | ) | ($ | 354 | ) | down 172% | |||
| EBIDTA, excluding one-times* | $ | 767 | $ | 1,382 | down 45% | $ | 3,125 | $ | 3,701 | down 16% | ||||||
| Diluted net income (loss) per share, excluding one-times* | ($ | 0.09 | ) | $ | 0.04 | ($ | 0.09 | ) | $ | 0.05 | ||||||
AUSTIN, Texas, Nov. 16, 2015 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the third quarter ended September 30, 2015.
Strategic Highlights
- Rounded out Smart product platform by launching SmartWayTM indoor navigation mobile app in partnership with SPREO to enhance the mobile employee experience in the digital workplace.
- Key strategic clients including Stanford University and Exxon Mobil expanded their resource scheduling investment with the addition of the SmartViewTM space utilization solution. New clients include Eileen Fisher and the Museum of Contemporary Art-Chicago.
- Migrated 63 clients in the third quarter and 133 clients year to date from on-premise to on-demand products, representing a 186% and 73% increase over the prior year third quarter and nine month number of conversions, respectively. Key clients migrating to on-demand include: Town of Southampton, Startek, The Nemours Foundation, and Mestek.
- Strong free cash flow of $1.1 million allowed for the full repayment of $722,000 in seller notes related to our Roomtag acquisition.
Results
- Cloud bookings in the quarter increased by 160% from the third quarter of 2014. Cloud bookings year to date increased by 66%, excluding PSSI, and 8%, including PSSI, over last year to date.
- Backlog as of September 30, 2015 is $3.2 million, up $968,000, or 44%, from September 30, 2014, and up $929,000, or 41% over last quarter. In 2016, we expect our enterprise clients to move through implementation, resulting in conversion from backlog to reported revenue growth.
- Revenue for the quarter was $6.7 million and $20.1 million year to date as compared to $7.0 million in the third quarter of 2014 and $20.1 million last year to date, a decrease of 5% and a slight increase of 0.2%, respectively.
- Recurring revenue as a percent of total revenue was 75% for the quarter as compared to 73% in the third quarter of 2014. This increase is primarily the result of strong hardware as a service revenue in the quarter.
- Recurring revenue as a percent of total revenue was 74% year to date as compared to 76% last year to date.
- Increased Hardware as a Service (HAAS) revenue was 194% compared to the third quarter of 2014 and increased 72% year to date as compared to year to date 2014.
- Gross margin for the quarter was $4.9 million or 74%, down by 10%, from $5.4 million, or 77% in the third quarter of 2014. Year to date, gross margin was $14.9 million, or 74%, down from $15.6 million, or 77% last year to date. The decrease in gross margin percentage is primarily due to new product sales which have lower margins initially. As these products mature and gain economies of scale, we anticipate a positive shift in these margins.
- EBITDA* excluding one-time items* for the quarter was approximately $767,000 compared to $1.4 million in the third quarter of 2014, a decrease of 45%. Year to date, EBITDA * excluding one-time items* was approximately $3.1 million, compared to $3.7 million last year to date, a decrease of 16%.
- Third quarter net (loss) income per share, excluding one-times*, was $0.09 loss compared to $0.04 income in the third quarter of 2014. Year to date net income per share, excluding one-times*, was $0.04 compared to $0.05 last year to date.
- Cash flow provided by operating activities for the quarter was $1.1 million compared to $924,000 in the third quarter of 2014, representing an increase of 22%. Cash flow provided by operating activities year to date was $2.0 million, compared to $1.7 million year to date in 2014, an increase of 19%.
Pat Goepel, Chief Executive Officer of Asure Software commented, "Our earnings for the quarter were lower than expected. While we attribute this to an increase in our backlog of implementations, we also generated strong cash flow in the quarter. As these enterprise clients move through implementation, we expect to see a positive impact to earnings."
Brad Wolfe, Chief Financial Officer of Asure added, "Third quarter reported results reflect an increase in sales to enterprise clients, which drove an increase in backlog of $929,000 versus the prior quarter. We have adjusted our 2015 guidance as stated below and expect $7.1 million in revenue and $1.3 million in EBITDA in the fourth quarter. We also anticipate the fourth quarter to be another strong quarter from a cash generation perspective. We will introduce 2016 guidance on our first quarter conference call."
Please see below for details around Asure's financial results.
| Company Outlook | |
| $000s | FY 15 |
| Revenue | $27,000 — $27,500 |
| EBITDA, excluding one-time items | $4,200 — $4,750 |
| Net income per share, excluding one-time items | $(0.04) — $0.04 |
Conference Call Details
Asure will follow this announcement with a conference call for the investment community on Monday, November 16, 2015 at 11:00 a.m. ET, (10:00 a.m. CT) 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 61780946.
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 on the Asure 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) 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 6,000 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.
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, 2015 | December 31, 2014 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 122 | $ | 320 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $128 and $120 at September 30, 2015 and December 31, 2014, respectively | 4,248 | 5,295 | ||||||
| Inventory | 700 | 170 | ||||||
| Prepaid expenses and other current assets | 1,556 | 1,303 | ||||||
| Total current assets | 6,626 | 7,088 | ||||||
| Property and equipment, net | 2,326 | 1,539 | ||||||
| Goodwill | 17,438 | 17,500 | ||||||
| Intangible assets, net | 6,485 | 8,322 | ||||||
| Other assets | 766 | 19 | ||||||
| Total assets | $ | 33,641 | $ | 34,468 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of notes payable | $ | 938 | $ | 750 | ||||
| Accounts payable | 2,092 | 1,533 | ||||||
| Accrued compensation and benefits | 460 | 350 | ||||||
| Other accrued liabilities | 1,318 | 1,128 | ||||||
| Deferred revenue | 10,125 | 10,641 | ||||||
| Total current liabilities | 14,933 | 14,402 | ||||||
| Long-term liabilities: | ||||||||
| Deferred revenue | 769 | 475 | ||||||
| Notes payable | 12,938 | 14,381 | ||||||
| Other liabilities | 579 | 739 | ||||||
| Total long-term liabilities | 14,286 | 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 September 30, 2015 and December 31, 2014, respectively | 67 | 64 | ||||||
| Treasury stock at cost, 384 shares at September 30, 2015 and December 31, 2014 | (5,017 | ) | (5,017 | ) | ||||
| Additional paid-in capital | 279,574 | 278,656 | ||||||
| Accumulated deficit | (270,108 | ) | (269,146 | ) | ||||
| Accumulated other comprehensive loss | (94 | ) | (86 | ) | ||||
| Total stockholders' equity | 4,422 | 4,471 | ||||||
| Total liabilities and stockholders' equity | $ | 33,641 | $ | 34,468 | ||||
| ASURE SOFTWARE, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||||||||||
| (Amounts in thousands, except share and per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| FOR THE THREE MONTHS ENDED September 30, | FOR THE NINE MONTHS ENDED September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenues | $ | 6,654 | $ | 7,030 | $ | 20,145 | $ | 20,105 | ||||||||
| Cost of sales | 1,750 | 1,595 | 5,281 | 4,526 | ||||||||||||
| Gross margin | 4,904 | 5,435 | 14,864 | 15,579 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 3,866 | 3,553 | 10,926 | 10,410 | ||||||||||||
| Research and development | 786 | 868 | 2,267 | 2,444 | ||||||||||||
| Amortization of intangible assets | 505 | 494 | 1,514 | 1,488 | ||||||||||||
| Total operating expenses | 5,157 | 4,915 | 14,707 | 14,342 | ||||||||||||
| Income (loss) from operations | (253 | ) | 520 | 157 | 1,237 | |||||||||||
| Other income (loss) | ||||||||||||||||
| Loss on lease termination | - | - | (110 | ) | - | |||||||||||
| Gain on settlement of note payable and litigation | - | - | - | 1,034 | ||||||||||||
| Loss on debt refinancing | (4 | ) | - | (4 | ) | (1,402 | ) | |||||||||
| Foreign currency translation gain (loss) | (5 | ) | 2 | (13 | ) | (10 | ) | |||||||||
| Interest expense and other | (266 | ) | (288 | ) | (828 | ) | (1,009 | ) | ||||||||
| Interest expense- amortization of original issue discount (OID) | (3 | ) | (10 | ) | (19 | ) | (64 | ) | ||||||||
| Total other loss, net | (278 | ) | (296 | ) | (974 | ) | (1,451 | ) | ||||||||
| Income (loss) from operations before income taxes | (531 | ) | 224 | (817 | ) | (214 | ) | |||||||||
| Income tax provision | (43 | ) | (63 | ) | (145 | ) | (140 | ) | ||||||||
| Net income (loss) | $ | (574 | ) | $ | 161 | $ | (962 | ) | $ | (354 | ) | |||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign currency gain (loss) | 27 | 14 | (8 | ) | (4 | ) | ||||||||||
| Other comprehensive income (loss) | $ | (547 | ) | $ | 175 | $ | (970 | ) | $ | (358 | ) | |||||
| Basic and diluted net income (loss) per share | ||||||||||||||||
| Basic | $ | (0.09 | ) | $ | 0.03 | $ | (0.16 | ) | $ | (0.06 | ) | |||||
| Diluted | $ | (0.09 | ) | $ | 0.03 | $ | (0.16 | ) | $ | (0.06 | ) | |||||
| Weighted average basic and diluted shares | ||||||||||||||||
| Basic | 6,290,000 | 6,008,000 | 6,138,000 | 5,986,000 | ||||||||||||
| Diluted | 6,290,000 | 6,284,000 | 6,138,000 | 5,986,000 | ||||||||||||
| ASURE SOFTWARE, INC. | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (Amounts in thousands) | ||||||||||
| (Unaudited) | ||||||||||
| FOR THE NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||
| 2015 | 2014 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
| Net loss | $ | (962 | ) | $ | (354 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by operations: | ||||||||||
| Depreciation and amortization | 2,324 | 2,060 | ||||||||
| Provision for doubtful accounts | 70 | 20 | ||||||||
| Share-based compensation | 335 | 131 | ||||||||
| Gain on settlement of note payable and litigation | - | (1,034 | ) | |||||||
| Loss on debt refinancing | 4 | 1,402 | ||||||||
| Other | 28 | 64 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Restricted cash | - | 400 | ||||||||
| Accounts receivable | 977 | 182 | ||||||||
| Inventory | (530 | ) | (241 | ) | ||||||
| Prepaid expenses and other assets | (927 | ) | (122 | ) | ||||||
| Accounts payable | 542 | 28 | ||||||||
| Accrued expenses and other long-term obligations | 354 | 150 | ||||||||
| Deferred revenue | (222 | ) | (1,015 | ) | ||||||
| Net cash provided by operating activities | 1,993 | 1,671 | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
| Acquisitions net of cash acquired | - | (3,111 | ) | |||||||
| Purchases of property and equipment | (1,290 | ) | (385 | ) | ||||||
| Disposals of property and equipment | 18 | 38 | ||||||||
| Collection/(Issuance) of note receivable | - | 9 | ||||||||
| Net cash used in investing activities | (1,272 | ) | (3,449 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
| Proceeds from notes payable | 4,250 | 18,179 | ||||||||
| Payments on notes payable | (5,527 | ) | (17,723 | ) | ||||||
| Payments on amendment of senior notes payable | (75 | ) | (704 | ) | ||||||
| Debt financing fees | - | (565 | ) | |||||||
| Payments on capital leases | (147 | ) | (104 | ) | ||||||
| Insurance proceeds for settlement of notes payable dispute, net of expenses | - | 373 | ||||||||
| Net proceeds from exercise of stock options | 585 | 24 | ||||||||
| Net cash used in financing activities | (914 | ) | (520 | ) | ||||||
| Effect of foreign exchange rates | (5 | ) | (3 | ) | ||||||
| Net decrease in cash and cash equivalents | (198 | ) | (2,301 | ) | ||||||
| Cash and cash equivalents at beginning of period | 320 | 3,938 | ||||||||
| Cash and cash equivalents at end of period | $ | 122 | $ | 1,637 | ||||||
| SUPPLEMENTAL INFORMATION: | ||||||||||
| Cash paid for: | ||||||||||
| Interest | $ | 597 | $ | 937 | ||||||
| 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 | - | 249 | ||||||||
| 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.
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 | |||||
| $000s | September 30, 2015 | September 30, 2014 | |||
| Net income (loss) | (574 | ) | 161 | ||
| Interest and amortization of OID | 269 | 298 | |||
| Tax | 43 | 63 | |||
| Depreciation | 160 | 115 | |||
| Amortization | 611 | 578 | |||
| Stock Compensation | 237 | 50 | |||
| EBITDA | 746 | 1,265 | |||
| One-time items | 21 | 117 | |||
| EBITDA excluding one-time items | 767 | 1,382 | |||
| FOR THE NINE MONTHS ENDED | ||||||||||
| $000s | September 30, 2015 | September 30, 2014 | ||||||||
| Net Loss | (962 | ) | (354 | ) | ||||||
| Interest and amortization of OID | 847 | 1,073 | ||||||||
| Tax | 145 | 140 | ||||||||
| Depreciation | 492 | 337 | ||||||||
| Amortization | 1,832 | 1,723 | ||||||||
| Stock Compensation | 335 | 131 | ||||||||
| EBITDA | 2,689 | 3,050 | ||||||||
| One-time items | 436 | 651 | ||||||||
| EBITDA excluding one-time items | 3,125 | 3,701 | ||||||||
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
| FOR THE THREE MONTHS ENDED | ||||
| $000s | September 30, 2015 | September 30, 2014 | ||
| Net income (loss) | (574 | ) | 161 | |
| Legal & Professional Services | 17 | 107 | ||
| Severance, Recruitment & Relocation | - | - | ||
| Other one-time items (net) | 4 | 10 | ||
| Sub-total excluding Taxes | 21 | 117 | ||
| Sub-total one-time items | 21 | 117 | ||
| Net income (loss) excluding one-time items | (553 | ) | 278 |
| FOR THE NINE MONTHS ENDED | ||||||||
| $000s | September 30, 2015 | September 30, 2014 | ||||||
| Net Loss | (962 | ) | (354 | ) | ||||
| Loss on Debt Refinancing | - | 1,402 | ||||||
| Gain on Settlement of Note Payable and litigation | - | (1,034 | ) | |||||
| Legal & Professional Services | 35 | 187 | ||||||
| Severance, Recruitment & Relocation | 55 | 73 | ||||||
| Other one-time items (net) | 346 | 23 | ||||||
| Sub-total excluding Taxes | 436 | 651 | ||||||
| Sub-total one-time items | 436 | 651 | ||||||
| Net income(loss) excluding one-time items | (526 | ) | 297 | |||||
For more information contact: Brad Wolfe, CFO Asure Software, Inc. 888-323-8835 bwolfe@asuresoftware.com