Asure Software Inc.
ASURE SOFTWARE INC (Form: 8-K, Received: 08/13/2014 10:34:21)


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 13, 2014
 
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.
 
On August 13, 2014, Asure Software, Inc. (the “Company”) issued a press release announcing its financial results for its second quarter ended June 30, 2014. 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 13, 2014                                                By        /s/ Kristi Richburg                                                      
Kristi Richburg, Controller and Interim Chief Financial Officer


Exhibit 99.1

Asure Software Reports Financial Results for
2014 Second Quarter

In thousands, except per share data
  Q2 2014     Q2 2013  
% Change
Revenue
  $ 6,548     $ 6,296  
up 4%
Gross margin
  $ 5,175     $ 4,815  
up 7%
Net income (loss)
  $ 15     $ (569 )
up 103%
EBITDA, excluding one-times*
  $ 1,179     $ 1,150  
up 3%
Diluted Net income (loss) per share
  $ 0.00     $ (0.10 )  
Diluted Net income (loss) per share, excluding one-times*
  $ 0.02     $ (0.06 )  

AUSTIN, Texas, August 13, 2014 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the second quarter ended June 30, 2014.
 
Strategic Highlights
·  
Grew repetitive, cloud-based revenue by 10% over the second quarter of 2013.
·  
Closed several large, multi-year global sales, including the sale of AsureForce workforce management solutions to PSSI in the U.S. and the sale of AsureSpace workspace management solutions to KPMG and PriceWaterhouseCoopers in the UK.
·  
Coincident with the acquisition of Fotopunch as announced July 8, 2014, introduced the new AirClock, an industry first tablet-based time collection device. This product was a critical piece of the Company’s first seven figure bookings deal, which was closed in the second quarter.
·  
Cloud SaaS-based bookings increased 83% from the second quarter 2013.
·  
Net income was $0.00 per share as compared to a net loss of $.10 per share in the second quarter of 2013. This was the first full quarter with our new re-financing in place. We anticipate being profitable the remainder of the year.
 
Results

·  
Cloud SaaS-based revenue for the quarter was $3.5 million, up $325,000 or 10% over the second quarter of 2013.

·  
Revenue for the quarter increased 4% over the $6.3 million in the second quarter 2013.

·  
Recurring revenue as a percent of total revenue was 78% for the quarter as compared to 78% in the second quarter of 2013.

·  
Gross margin for the quarter was $5.2 million compared to $4.8 million in the second quarter 2013, an increase of 7%.

·  
EBITDA* excluding one-time items* for the quarter was approximately $1.2 million compared to $1.2 million in the second quarter of 2013.

·  
Second quarter net income (loss) per share, excluding one-times*, was $0.02 compared to $(0.06) in the second quarter of 2013.

·  
Cash flow provided by operating activities for the quarter was $676,000 compared to $710,000 in the second quarter 2013, representing a decrease of 5%.

 
1

 
 
Management Commentary
Pat Goepel , Chief Executive Officer of Asure Software commented, “We are extremely pleased with continued consumer demand for SaaS-based solutions among our workforce management and workspace management product lines. Key sales and bookings for this quarter include PSSI in the U.S. and PriceWaterhouseCoopers and KPMG in the UK. These relationships are driven by prospect and customer needs for innovative technology solutions and a long-term strategic partnership that helps them meet their people, time and space needs around managing global, mobile workforces. Our continued focus on bringing highly differentiated SaaS solutions to the market has been well accepted by the market and we expect this trend to continue.”

Kristi Richburg, Asure’s Controller & Interim Chief Financial Officer added, “Improvements in net income in the second quarter reflect our lower cost of debt under our new financial arrangement with Wells Fargo. We are also pleased with our year over year performance with increased Cloud revenue. We expect to be at the lower end of our revenue and EBITDA guidance for the full year.  However, driven by an uptick in bookings, we anticipate a stronger second half of the year and expect year over year growth in both revenue and EBITDA along with continued positive free cash generation in the second half of the year and expect continued growth in 2015.”

Please see below for details around Asure’s financial results.
 
Company Outlook
$ 000s    
FY 14
 
Revenue
    $ 29,000 - $30,000  
EBITDA, excluding one-time items
    $ 5,500 - $6,500  
Net income per share, excluding one-time items
    $ 0.08 - $0.24  
 
Conference Call Details
Asure will follow this announcement with a conference call for the investment community on Wednesday, August 13, 2014 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 Kristi Richburg , Controller & Interim 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 70194288.
 
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.
 
 
2

 
 
*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
 
$ 000s    
June 30,
2014
   
June 30,
2013
 
Net Income (Loss)
      15       (569 )
Interest and amortization of OID
      268       645  
Tax
      35       42  
Depreciation
      109       107  
Amortization
      572       652  
Stock Compensation
      42       45  
EBITDA
      1,041       922  
One-time items
      138       228  
EBITDA excluding one-time items
      1,179       1,150  
 
FOR THE SIX MONTHS ENDED
 
$ 000s    
June 30,
2014
   
June 30,
2013
 
Net Income (Loss)
      (515 )     (1,669 )
Interest and amortization of OID
      775       1,325  
Tax
      77       81  
Depreciation
      222       219  
Amortization
      1,145       1,304  
Stock Compensation
      81       69  
EBITDA
      1,785       1,329  
One-time items
      534       548  
EBITDA excluding one-time items
      2,319       1,877  
 
 
3

 
 
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
 
$ 000s    
FOR THE THREE MONTHS ENDED
 June 30
 
      2014     2013  
Net Income (Loss)
      15       (569 )
Legal & Professional Services
      52       146  
Severance, Recruitment & Relocation
      73       69  
Other one-time items (net)
      13       13  
Sub-total excluding Taxes
      138       228  
Sub-total one-time items
      138       228  
Net Gain/(Loss) excluding one-time items
      153       (341 )
 
$ 000s    
FOR THE SIX MONTHS ENDED
 June 30
 
      2014     2013  
Net Income (Loss)
      (515 )     (1,669 )
Loss on Debt Refinancing
      1,402       -  
Gain on Settlement of Note Payable and litigation
      (1,034 )     -  
Legal & Professional Services
      80       310  
Severance, Recruitment & Relocation
      73       160  
Other one-time items (net)
      13       78  
Sub-total excluding Taxes
      534       548  
Sub-total one-time items
      534       548  
Net Gain/(Loss) excluding one-time items
      19       (1,121 )
 
Reconciliation of GAAP Revenue to Non-GAAP revenue
 
$ 000s    
FOR THE THREE MONTHS ENDED
 June 30
 
      2014     2013  
Revenue
      6,548       6,296  
Adjustment
      -       146  
Non- GAAP revenue
      6,548       6,442  
 
$ 000s    
FOR THE SIX MONTHS ENDED
 June 30
 
      2014     2013  
Revenue
      13,075       12,271  
Adjustment
      -       363  
Non- GAAP revenue
      13,075       12,634  
 
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:
Pat Goepel, CEO
Asure Software, Inc.
888-323-8835
pgoepel@asuresoftware.com
 
 
4

 
 
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
 (Unaudited)
 
  
 
June 30,
2014
   
December 31,
2013
 
Assets
             
Current assets:
             
Cash and cash equivalents
 
$
2,005
   
$
3,938
 
Restricted cash
   
150
     
400
 
Accounts receivable, net of allowance for doubtful accounts of $152 and $168 at June 30,  2014 and December 31, 2013, respectively
   
3,428
     
3,902
 
Inventory
   
260
     
77
 
Notes receivable
   
-
     
9
 
Prepaid expenses and other current assets
   
1,226
     
1,334
 
Total current assets
   
7,069
     
9,660
 
Property and equipment, net
   
1,301
     
1,233
 
Goodwill
   
15,008
     
15,005
 
Intangible assets, net
   
8,533
     
9,679
 
Other assets
   
29
     
38
 
Total assets
 
$
       31,940
   
$
       35,615
 
Liabilities and stockholders’ equity
               
Current liabilities:
               
Current portion of notes payable
 
$
996
   
$
4,308
 
Accounts payable
   
1,405
     
1,669
 
Accrued compensation and benefits
   
341
     
473
 
Other accrued liabilities
   
945
     
988
 
Deferred revenue
   
9,365
     
10,059
 
Total current liabilities
   
13,052
     
17,497
 
Long-term liabilities:
               
Deferred revenue
   
593
     
759
 
Notes payable
   
14,063
     
12,698
 
Other liabilities
   
446
     
444
 
Total long-term liabilities
   
15,102
     
13,901
 
Stockholders’ equity:
               
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding
   
-
     
-
 
Common stock, $.01 par value; 11,000 shares authorized; 6,363 and 6,353 shares issued,
     5,979 and 5,969 shares outstanding at June 30, 2014 and December 31, 2013, respectively
   
63
     
63
 
Treasury stock at cost, 384 shares at June 30, 2014 and December 31, 2013
   
(5,017
)
   
(5,017
)
Additional paid-in capital
   
278,261
     
278,159
 
Accumulated deficit
   
(269,399
)
   
(268,884
)
Accumulated other comprehensive loss
   
(122
)
   
(104
)
Total stockholders’ equity
   
3,786
     
4,217
 
   
$
31,940
   
$
35,615
 

 
5

 
 
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (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,
 
   
2014
   
2013
   
2014
   
2013
 
Revenues
 
$
6,548
   
$
6,296
   
$
13,075
   
$
12,271
 
Cost of Sales
   
1,373
     
1,481
     
2,931
     
3,258
 
    Gross margin
   
5,175
     
4,815
     
10,144
     
9,013
 
                                 
Operating expenses
                               
Selling, general and administrative
   
3,495
     
3,448
     
6,857
     
6,724
 
Research and development
   
855
     
664
     
1,576
     
1,364
 
Amortization of intangible assets
   
497
     
582
     
994
     
1,164
 
       Total operating expenses
   
4,847
     
4,694
     
9,427
     
9,252
 
                                 
Income (loss) from operations
   
328
     
121
     
717
     
(239
)
                                 
Other income (loss)
                               
Gain on settlement of note payable and litigation
   
-
     
-
     
1,034
     
-
 
Loss on debt refinancing
   
-
     
-
     
(1,402
   
-
 
Foreign currency translation gain (loss)
   
(10)
     
(3
   
(12
)
   
(24
)
Interest expense and other
   
(264
)
   
(520
)
   
(721
)
   
(1,050
)
Interest expense- amortization of original issue discount (OID)
   
(4
)
   
(125
)
   
(54
)
   
(275
)
       Total other income (loss), net
   
(278
)
   
(648
   
(1,155
)
   
(1,349
)
                                 
Income (loss) from operations before income taxes
   
50
     
(527
   
(438
)
   
(1,588
)
Income tax provision
   
(35
)
   
(42
)
   
(77
)
   
(81
)
Net income (loss)
 
$
15
   
$
(569
 
$
(515
)
 
$
(1,669
)
Other comprehensive income (loss):
                               
Foreign currency gain (loss)
   
(10
   
4
     
(18
   
42
 
Other comprehensive income (loss)
 
$
5
   
$
(565
 
$
(533
)
 
$
(1,627
)
                                 
Basic and diluted net income (loss) per share
                               
Basic
 
$
0.00
   
$
(0.10
)
 
$
(0.09
)
 
$
(0.31
)
Diluted
 
$
0.00
   
$
(0.10
 
$
(0.09
)
 
$
(0.31
)
Weighted average basic and diluted shares
                               
Basic
   
 5,979,000
     
5,497,000
     
5,975,000
     
5,380,000
 
Diluted
   
   6,364,000
     
   5,497,000
     
5,975,000
     
5,380,000
 
 
 
6

 
 
    ASURE SOFTWARE, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 
   
FOR THE
SIX MONTHS ENDED
JUNE 30,
 
   
2014
   
2013
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
 
$
(515
)
 
$
(1,669
)
Adjustments to reconcile net loss to net cash provided by operations:
               
Depreciation and amortization
   
1,367
     
1,523
 
Provision for doubtful accounts
   
     -
     
     10
 
Share-based compensation
   
81
     
69
 
Amortization of original issue discount (OID)
   
54
     
275
 
Gain on settlement of note payable and litigation
   
(1,034
)
   
-
 
Loss on debt refinancing
   
1,402
     
-
 
Changes in operating assets and liabilities:
               
Restricted cash
   
250
     
-
 
Accounts receivable
   
474
     
54
 
Inventory
   
  (183
)
   
  6
 
Prepaid expenses and other assets
   
(15
)
   
30
 
Accounts payable
   
 (264
)
   
 (605
)
Accrued expenses and other long-term obligations
   
(10
)
   
651
 
Deferred revenue
   
(860
)
   
442
 
Net cash provided by operating activities
   
   747
     
   786
 
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Net purchases of property and equipment
   
(290
)
   
(245
)
Collection of note receivable
   
    9
     
    10
 
Net cash used in investing activities
   
(281
)
   
(235
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Payments on notes payable
   
  (16,436
)
   
  (2,726
)
Proceeds from notes payable
   
15,000
     
-
 
Payments on amendment of senior notes payable
   
(704
)
   
     (188
)
Net proceeds from issuance of common stock
     
-
   
3,461
 
Debt financing fees
   
(565
)
   
-
 
Insurance proceeds for settlement of notes payable dispute, net of expenses
   
          373
     
        -
 
Payments on capital leases
   
(67
)
   
(43
)
Net proceeds from exercise of options
   
21
     
13
 
Net cash used in financing activities
   
(2,378
)
   
517
 
                 
Effect of translation exchange rates
   
(21
)
   
50
 
                 
Net increase (decrease) in cash and cash equivalents
   
(1,933
)
   
1,118
 
Cash and equivalents at beginning of period
   
3,938
     
2,177
 
Cash and equivalents at end of period
 
$
2,005
   
$
3,295
 
                 
SUPPLEMENTAL INFORMATION:
               
Cash paid for:
               
Interest
 
$
697
   
$
656
 

 
7