Asure Software Inc.
ASURE SOFTWARE INC (Form: 8-K, Received: 08/15/2013 06:02:46)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 

 
FORM 8-K
 

 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): August 14, 2013
 
ASURE SOFTWARE, INC.
(Exact name of registrant as specified in charter)
 
Delaware
0-20008
74-2415696
(State or other jurisdiction of incorporation or organization)
(Commission File No.)
(IRS Employer Identification No.)
 
110 Wild Basin Road, Suite 100, Austin, Texas 78746
(Address of principal executive offices)
 
512-437-2700
(Registrant’s telephone number, including area code)
 
N/A
(Former Name and Address)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 

 
 
Item 2.02. Results of Operations and Financial Condition.
 
August 14, 2013, Asure Software, Inc. (the “Company”) issued a press release announcing its financial results for its second quarter ended June 30, 2013. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
 
The information contained in this Item 2.02 of this Current Report (including the press release furnished as an exhibit hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01. Financial Statements and Exhibits.

(d)           Exhibits
 
EXHIBIT NUMBER
 
DESCRIPTION
99.1
 
 
 
 

 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                                   ASURE SOFTWARE, INC.
 
Dated: August 14, 2013                                           By            /s/ Jennifer Crow                                                       
    Jennifer Crow, Chief Financial Officer
 
 
 

 
EXHIBIT 99.1

Asure Software Reports 2013 Second Quarter Financial Results Exceeding Expectations
·  
·
·
Second quarter EBITDA*, excluding one-times*, was $1.15 million vs. guidance range of $900,000 to $1.1 million
Second quarter revenue of $6.3 million vs. guidance range of $6.2 to $6.5 million
Second quarter net loss per share, excluding one-times* was $(0.06)
 
AUSTIN, Texas, August 14, 2013 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the second quarter ended June 30, 2013.
 
Q2 Strategic Highlights
·  
Executed on our “Land and Expand” customer cross selling strategy for both AsureSpace and AsureForce solutions; Q2 brought expanded contracts with several key customers such as Staples, Federal Reserve, and Moody’s Corporation. Asure’s “Land & Expand” strategy continues to be successful in increasing customer profitability and retention with innovative, trusted solutions.
·  
Launched the new release of AsureSpace Workspace Manager 4.5, which brings global customers expanded features for complex meeting types.  This new functionality allows our customers to more easily gather booking data and work with complex recurring and guest service requirements.
·  
Fully deployed AsureForce® GeoPunch™ , our time & labor management mobile facial recognition solution. Using GPS technology and facial recognition, this highly differentiated TLM mobile app puts time & attendance and self-service capabilities directly in the hands of employees, literally, via their mobile devices. New customers include Goodwill of South Texas, Permian Regional Hospital and Innvision Shelter Network.

Q2 Results
·  
Revenue for the quarter was $6.3 million compared to $6.0 million in the previous quarter and $4.2 million in the second quarter 2012.

·  
Non-GAAP revenue* for the quarter was $6.4 million compared to $6.2 million in the previous quarter and $4.2 million in the second quarter 2012.

·  
Gross margin for the quarter was $4.8 compared to $4.2 in the previous quarter and $3.2 in the same quarter 2012.
 
·  
EBITDA* excluding one-time items* for the quarter was approximately $1.15 million compared to $727,000 in the previous quarter and $838,000 in the second quarter of 2012. One-time items* in the quarter were approximately $228,000 down from $320,000 in the previous quarter and down from $427,000 in the second quarter of 2012, and were related to legal and professional fees, site consolidation related to the acquisition of Meeting Maker and other one-time expenses*.

·  
Recurring revenue as a percent of total revenue was 78% for the quarter as compared to 79% for the previous quarter and 70% in the second quarter of 2012.
 
·  
Cloud SaaS-based revenue for the quarter increased to $3.1 million up $72,000 and 2.4% over the previous quarter and up $163,000, or 8.0% over the second quarter of 2012, excluding PeopleCube.
 
·  
Cloud SaaS-based bookings for the quarter decreased by 10% from the previous quarter and increased by 20% from the second quarter of 2012, excluding PeopleCube.

Management Commentary
Pat Goepel , Chief Executive Officer of Asure Software commented, “We are pleased with our performance in the second quarter. Asure Software continues to execute on our key business strategies, with an integrated focus across all areas of the business from sales and account management to marketing and product development. SaaS-based recurring revenue increased for the quarter.  While overall bookings increased this quarter over the previous quarter, we did see a decrease in SaaS-based bookings. We see our customer demand still being split between traditional On Premise solutions versus more leading edge On Demand solutions. We believe the market will continue to shift to SaaS-based solutions, but not at the rate we originally planned. As such, we have lowered our annual revenue and annual EBITDA guidance.  We are still confident in our progress.   Our “Land & Expand” sales strategy continues to prove successful with several expanded contracts and strategic opportunities. Additionally, our UK and EMEA-based initiatives saw significant success in the second quarter both in new sales as well as expanded partnership opportunities.  Staying focused on the business strategy and following through with solid execution has been and will continue to be critical to our success.”
 
 
 

 

Jennifer Crow , Asure’s Chief Financial Officer added, “We executed on our plan to bolster stockholders’ equity and raised $3.5 million in cash in the second quarter by selling shares pursuant to our Form S-3. With part of the proceeds, we reduced our short-term liabilities and paid down $2.0 million of our Senior Notes Payable with our primary debt lender.  The equity raise and increased cash flow from operations have strengthened our overall financial position and allow us to enter the second half of the year with cash on hand of $3.5 million.”

Please see below for details around Asure’s financial results.
 
Company Outlook
    Q3 13    
FY 13
Revenue
  $ 6,300 - $6,600     $ 25,000 - $26,000  
EBITDA, excluding one-time items
  $ 1,300 - $1,500     $ 4,800 - $5,500  

Conference Call Details
Asure will follow this announcement with a conference call for the investment community on Wednesday, August 14, 2013 at 11:00 a.m. EDT, (10:00 a.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 23639012.
 
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 5,000 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 Excluding
One-time items.
 
    FOR THE THREE MONTHS ENDED  
$000s
 
June 30, 2013
   
June 30, 2012
   
Inc/Dec
 
Net Loss
    (569 )     (323 )     (246 )
Interest and amortization of OID
    645       174       471  
Tax
    42       120       (78 )
Depreciation
    107       58       49  
Amortization
    652       357       295  
Stock Compensation
    45       25       20  
EBITDA
    922       411       511  
   One-time items
    228       427       (199 )
EBITDA excluding one-time items
    1,150       838       312  

    FOR THE SIX MONTHS ENDED  
$000s   
June 30, 2013
   
June 30, 2012
   
Inc/Dec
 
Net Loss
    (1,669 )     (1,170 )     (499 )
Interest and amortization of OID
    1,325       364       961  
Derivative mark -to-market
    -       465       (465 )
Tax
    81       166       (85 )
Depreciation
    219       105       114  
Amortization
    1,304       714       590  
Stock Compensation
    69       35       34  
EBITDA
    1,329       679       650  
   One-time items
    548       936       (388 )
EBITDA excluding one-time items
    1,877       1,615       262  
 
 
 

 
 
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
   
FOR THE THREE MONTHS ENDED June 30
 
$000s   
2013
   
2012
 
Net Loss
    (569 )     (323 )
Legal & Professional Services
    146       298  
Severance, Recruitment & Relocation
    69       60  
Site Consolidation
    -       50  
3:2 Stock Split
    -       19  
Provision for Taxes – Site Shut Down
    -       60  
Other one-time items (net)
    13       -  
 Sub-total excluding Taxes
    228       427  
Sub-total one-time items
    228       487  
Net Gain/(Loss) excluding one-time items
    (341 )     164  
 
   
FOR THE SIX MONTHS ENDED June 30
 
$000s  
2013
   
2012
 
Net Loss
    (1,669 )     (1,170 )
Legal & Professional Services
    310       543  
Severance, Recruitment & Relocation
    160       97  
Site Consolidation
    -       50  
Derivative mark-to-market
    -       465  
Loss on Debt Conversion
    -       199  
3:2 Stock Split
    -       19  
Provision for Taxes – Site Shut Down
    -       60  
Other one-time items (net)
    78       28  
 Sub-total excluding Taxes and MTM
    548       936  
Sub-total one-time items
    548       1,461  
Net Gain/(Loss) excluding one-time items
    (1,121 )     291  
 
 
 

 
 
Reconciliation of GAAP Revenue to Non-GAAP revenue
   
FOR THE THREE MONTHS ENDED June 30
 
$000s   
2013
   
2012
 
Revenue
    6,296       4,205  
Adjustment
    146       40  
Non- GAAP revenue
    6,442       4,245  
 
 
 
FOR THE SIX MONTHS ENDED June 30
 
$000s   
2013
   
2012
 
Revenue
    12,271       8,357  
Adjustment
    363       105  
Non- GAAP revenue
    12,634       8,462  
 
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.  
 
For more information contact:
Jennifer Crow, CFO
Asure Software, Inc.
512-437-2732
jcrow@asuresoftware.com
 
 
 

 

ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
 
  
 
June 30,
2013
   
December 31,
2012
 
Assets
             
Current assets:
             
Cash and cash equivalents
 
$
3,295
   
$
2,177
 
Restricted cash
   
250
     
250
 
Accounts receivable, net of allowance for doubtful accounts of $192 and $182 at June 30, 2013 and December 31, 2012, respectively
   
2,976
     
3,040
 
Inventory
   
260
     
266
 
Notes receivable
   
9
     
19
 
Prepaid expenses and other current assets
   
1,648
     
 1,497
 
Total current assets
   
8,438
     
7,249
 
Property and equipment, net
   
1,177
     
1,154
 
Goodwill
   
15,527
     
15,525
 
Intangible assets, net
   
10,875
     
12,179
 
Other assets
   
48
     
41
 
Total assets
 
$
       36,065
   
$
36,148
 
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Current portion of notes payable
 
$
1,450
   
$
3,450
 
Accounts payable
   
2,108
     
2,713
 
Accrued compensation and benefits
   
414
     
78
 
Other accrued liabilities
   
1,002
     
1,013
 
Deferred revenue
   
9,612
     
9,246
 
Total current liabilities
   
14,586
     
16,500
 
Long-term liabilities:
               
Deferred revenue
   
720
     
637
 
Notes payable- related party
   
800
     
800
 
Notes payable
   
15,436
     
15,887
 
Other liabilities
   
447
     
164
 
Total long-term liabilities
   
17,403
     
17,488
 
Stockholders’ equity:
               
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding
   
-
     
-
 
Common stock, $.01 par value; 11,000 shares authorized; 6,313 and 5,644 shares issued,
5,929 and 5,260 shares outstanding at June 30, 2013 and December 31, 2012, respectively
   
63
     
56
 
Treasury stock at cost, 384 shares at June 30, 2013 and December 31, 2012
   
(5,017
)
   
(5,017
)
Additional paid-in capital
   
277,981
     
274,445
 
Accumulated deficit
   
(268,891
)
   
(267,222
)
Accumulated other comprehensive loss
   
(60
)
   
(102
)
Total stockholders’ equity
   
4,076
     
2,160
 
   
$
36,065
   
$
36,148
 
 
The notes in the Company’s forthcoming 10-Q are an integral part of these condensed consolidated financial statements.
 
 
 

 
 
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands, except share and per share data)
(Unaudited)

   
FOR THE
THREE MONTHS ENDED
June 30,
   
FOR THE
SIX MONTHS ENDED
June 30,
 
   
2013
   
2012
   
2013
   
2012
 
Revenues
 
$
6,296
   
$
4,205
   
$
12,271
   
$
8,357
 
Cost of Sales
   
(1,481
)
   
(991
)
   
(3,258
)
   
(2,037
)
    Gross Margin
   
4,815
     
3,214
     
9,013
     
6,320
 
                                 
Operating Expenses
                               
Selling, general and administrative
   
3,448
     
2,334
     
6,724
     
4,467
 
Research and development
   
664
     
591
     
1,364
     
1,181
 
Amortization of intangible assets
   
582
     
292
     
1,164
     
            586
 
       Total Operating Expenses
   
4,694
     
3,217
     
9,252
     
6,234
 
                                 
Income/(Loss) From Operations
   
121
     
(3
)
   
(239
)
   
86
 
                                 
Other Income (Loss)
                               
Interest income
   
-
     
1
     
-
     
2
 
Loss on disposal of assets
   
-
     
(26
   
-
     
(36
Loss on debt conversion
   
-
     
-
     
-
     
(198
)
Foreign currency translation loss
   
(3)
     
(1
   
(24
)
   
(29
Interest expense and other
   
(520
)
   
(118
)
   
(1,050
)
   
(238
Interest expense- amortization of OID and derivative mark-to market
   
(125
)
   
(56
)
   
(275
)
   
(591
)
       Total other income (loss)
   
(648
)
   
(200
   
(1,349
)
   
(1,090
                                 
Loss From Operations before Income Taxes
   
(527
)
   
(203
   
(1,588
)
   
(1,004
Provision for income taxes
   
(42
)
   
(120
)
   
(81
)
   
(166
)
Net Loss
 
$
(569
)
 
$
(323
 
$
(1,669
)
 
$
(1,170
)
  Other Comprehensive Loss:
                               
Foreign currency (loss) gain
   
4
     
(2
)
   
42
     
26
 
Other Comprehensive Loss
 
$
(565
)
 
$
        (325
 
$
(1,627
)
 
$
      (1,144
)
                                 
Basic and Diluted Net Loss Per Share
                               
Basic
 
$
(0.10
)
 
$
(0.06
)
 
$
(0.31
)
 
 $
(0.24
Diluted
 
$
(0.10
)
 
$
(0.06
 
$
(0.31
)
 
$
(0.24
)
Weighted Average Basic and Diluted Shares
                               
Basic
   
 5,497,000
     
 4,982,000
     
5,380,000
     
4,841,000
 
Diluted
   
   5,497,000
     
   4,982,000
     
5,380,000
     
  4,841,000
 
 
The notes in the Company’s forthcoming 10-Q are an integral part of these condensed consolidated financial statements.
 
 
 

 
  
ASURE SOFTWARE, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)  
 
   
FOR THE 
 SIX MONTHS ENDED
 JUNE 30,
 
   
2013
   
2012
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
 
$
(1,669
)
 
$
(1,170
)
Adjustments to reconcile net loss to net cash provided by operations:
               
Depreciation and amortization
   
1,523
     
819
 
Provision for doubtful accounts
   
     10
     
37
 
Share-based compensation
   
69
     
35
 
Amortization of original issue discount (OID)
   
275
     
126
 
Loss on sale/disposal of assets
   
-
     
36
 
Derivative mark-to-market
   
-
     
465
 
Loss on debt conversion
   
-
     
198
 
Changes in operating assets and liabilities:
               
Notes receivable
   
10
     
             -
 
Accounts receivable
   
54
     
(157
)
Inventory
   
6
     
(40
)
Prepaid expenses and other assets
   
30
     
62
 
Accounts payable
   
 (605
)
   
400
 
Accrued expenses and other long-term obligations
   
651
     
221
 
Deferred revenue
   
442
     
(94
Net cash provided by operating activities
   
796
     
938
 
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Net purchases of property and equipment
   
(245
)
   
(151
)
Collection of note receivable
   
    -
     
72
 
Net cash used in investing activities
   
(245
)
   
(79
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Payments on notes payable
   
  (2,726
)
   
        (290
)
Payments on amendment of senior notes payable
   
 (188
)
   
 -
 
Net proceeds from issuance of common stock
   
3,461
     
-
 
Payments on conversion of subordinated notes payable
   
-
     
(222
Proceeds from line of credit
   
      -
     
55
 
Payments on capital leases
   
(43
)
   
(18
)
Net proceeds from exercise of options
   
13
     
16
 
Net cash provided by (used in) financing activities
   
517
     
(459
                 
Effect of translation exchange rates
   
50
     
26
 
                 
Net increase (decrease) in cash and cash equivalents
   
1,118
     
426
 
Cash and equivalents at beginning of period
   
2,177
     
1,067
 
Cash and equivalents at end of period
 
$
3,295
   
$
1,493
 
                 
SUPPLEMENTAL INFORMATION:
               
Cash paid for:
               
Interest
 
$
656
   
$
189
 
                 
Non-cash Investing and Financing Activities:
               
Conversion of subordinated convertible notes payable to equity
   
-
     
2,247
 
 
The notes in the Company’s forthcoming 10-Q are an integral part of these condensed consolidated financial statements.