Asure Software Inc.
ASURE SOFTWARE INC (Form: 8-K, Received: 05/13/2015 10:01:31)


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): May 13, 2015
 
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 May 13, 2015, Asure Software, Inc. (the “Company”) issued a press release announcing its financial results for its first quarter ended March 31, 2015. 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: May 13, 2015                                                  By        /s/ Brad Wolfe                                                      
    Brad Wolfe, Chief Financial Officer
 
 
 
Exhibit 99.1

Asure Software Reports Financial Results for
2015 First Quarter

In thousands, except per share data
    Q1 2015       Q1 2014  
% Change
Revenue
  $ 6,332     $ 6,527  
down 3%
Gross margin
  $ 4,680     $ 4,969  
down 6%
Net loss
  $ (483 )   $ (530 )
improved 9%
EBITDA, excluding one-times*
  $ 970     $ 1,140  
down 15%
Diluted net loss per share, excluding one-times*
  $ (0.03 )   $ (0.02 )  
 
AUSTIN, Texas, May 13, 2015 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the first quarter ended March 31, 2015.
 
Strategic Highlights

·  
Closed cloud-based and mobile sales with new clients Allstate, Ricoh for Thompson Hine, St David’s Medical Center and BCBS of Massachusetts.

·  
Accelerated client conversions from on premise to on demand solutions and product expansions, including upgrades to McKool Smith, P.C., Horizon Lines, Royal Bank of Canada, KPMG, State Street and the United States Army.

·  
Made operational improvements to optimize costs:

o  
Supply chain process improvements and improved COGS anticipated to drive 25% savings on certain hardware products. Based on projected 2015 sales units, this would save the company approximately $160,000.

o  
Consolidated Framingham, MA and Warwick, RI offices to a centralized location in Dedham, MA, resulting in annual savings of $120,000; also opened new London office as a new European headquarters.
 
·  
Reorganized sales team to introduce a new National Account Sales Executive team consisting of seasoned sales executives focused on larger deals in the enterprise and global markets.
 
·  
The company will start reporting backlog on a quarterly basis beginning Q2 2015.  Asure Software defines backlog as sales bookings that have not yet turned into revenue or deferred revenue, including both repetitive and non-repetitive product lines. For repetitive products, one year’s value is included in backlog.

·   
Introduced new product enhancements and touch panels with a sleeker design and enhanced features that make viewing and scheduling schedule space and resources easier.
 
Results

·   
Cloud and mobile bookings decreased by 22% from the first quarter 2014. Contributing to this decrease is the sales force reorganization described above and longer enterprise and global sales cycles correlated to larger average deal sizes.

·   
Revenue for the quarter was $6.3 million as compared to $6.5 million in the first quarter 2014, a decrease of 3%.

·  
Recurring revenue as a percent of total revenue was 79% for the quarter as compared to 76% in the first quarter of 2014.

·  
Gross margin for the quarter was $4.7 million compared to $5.0 million in the first quarter 2014, a decrease of 6%.

·  
EBITDA* excluding one-time items* for the quarter was approximately $970,000 compared to $1.14 million in the first quarter of 2014, a decrease of 15%.

·  
First quarter net loss per share, excluding one-times*, was $(0.03) compared to $(0.02) in the first quarter of 2014.

·  
Cash flow provided by operating activities for the quarter was $546,000 compared to $71,000 in the first quarter 2014, an increase of 669%.
 
 
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Management Commentary
Pat Goepel , Chief Executive Officer of Asure Software commented, “The Q1 revenue decline was impacted by : 1) an inventory issue which delayed delivery of orders - we anticipate a catchup in Q2, and 2) increased enterprise sales, which typically involve phased implementations and which resulted in an increase to backlog as project work was not completed in the quarter. Although these items contributed to an otherwise seasonally slow Q1, we expect a much improved Q2.  Further, we are seeing increased demand and interest for cloud-based and mobile solutions to manage enterprise and global hoteling, hot-desking, and alternative workforce solutions.  The strategic investments the Company has made gives us confidence for growth as we move forward.”

Brad Wolfe , Asure’s Chief Financial Officer added, “The company is well-positioned to drive bookings growth, revenue and EBITDA moving forward. We expect improved performance and a resumption of continued quarter over quarter growth in Q2 and beyond. Accordingly, we reaffirm our 2015 guidance as stated in our fourth quarter 2014 earnings release.”  

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

Company Outlook
$000s
FY 15
Revenue
$30,000
EBITDA, excluding one-time items
$5,600
Net income per share, excluding one-time items
$0.25

Conference Call Details
Asure will follow this announcement with a conference call for the investment community on Wednesday, May, 13, 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 42065729.
 
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) 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.

For more information contact:

Brad Wolfe, CFO
Asure Software, Inc.
888-323-8835
bwolfe@asuresoftware.com
 
 
2

 
 
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
 (Unaudited)
 
  
 
March 31,
2015
   
December 31,
2014
 
Assets
             
Current assets:
             
Cash and cash equivalents
 
$
274
   
$
320
 
Accounts receivable, net of allowance for doubtful accounts of $117 and $120 at
March 31, 2015 and December 31, 2014, respectively
   
4,879
     
5,295
 
Inventory
   
263
     
170
 
Prepaid expenses and other current assets
   
1,172
     
1,303
 
Total current assets
   
6,588
     
7,088
 
Property and equipment, net
   
1,997
     
1,539
 
Goodwill
   
17,436
     
17,500
 
Intangible assets, net
   
7,707
     
8,322
 
Other assets
   
420
     
19
 
Total assets
 
$
       34,148
   
$
       34,468
 
Liabilities and stockholders’ equity
               
Current liabilities:
               
Current portion of notes payable
 
$
750
   
$
750
 
Accounts payable
   
2,181
     
1,533
 
Accrued compensation and benefits
   
225
     
350
 
Other accrued liabilities
   
1,129
     
1,128
 
Deferred revenue
   
10,265
     
10,641
 
Total current liabilities
   
14,550
     
14,402
 
Long-term liabilities:
               
Deferred revenue
   
339
     
475
 
Notes payable
   
14,502
     
14,381
 
Other liabilities
   
684
     
739
 
Total long-term liabilities
   
15,525
     
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; 6,443 and 6,434 shares issued,
6,059 and 6,050 shares outstanding at March 31, 2015 and December 31, 2014, respectively
   
64
     
64
 
Treasury stock at cost, 384 shares at March 31, 2015 and December 31, 2014
   
(5,017
)
   
(5,017
)
Additional paid-in capital
   
278,735
     
278,656
 
Accumulated deficit
   
(269,629
)
   
(269,146
)
Accumulated other comprehensive loss
   
(80
)
   
(86
)
Total stockholders’ equity
   
4,073
     
4,471
 
Total liabilities and stockholders’ equity
 
$
34,148
   
$
34,468
 
 
 
3

 

 
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands, except share and per share data)
(Unaudited)
 
   
FOR THE
THREE MONTHS ENDED
MARCH 31,
 
   
2015
   
2014
 
Revenues
 
$
6,332
   
$
6,527
 
Cost of sales
   
1,652
     
1,558
 
Gross margin
   
4,680
     
4,969
 
                 
Operating expenses
               
Selling, general and administrative
   
3,449
     
3,362
 
Research and development
   
738
     
721
 
Amortization of intangible assets
   
505
     
497
 
Total operating expenses
   
4,692
     
4,580
 
                 
Income (loss) from operations
   
(12
   
389
 
                 
Other income (loss)
               
Loss on lease termination
   
(110
)
   
-
 
Gain on settlement of note payable and litigation
   
-
     
1,034
 
Loss on debt refinancing
   
-
     
(1,402
)
Foreign currency loss
   
(11
)
   
(2
)
Interest expense and other
   
(282
)
   
(457
)
Interest expense – amortization of original issue discount (OID)
   
(8
)
   
(50
)
Total other loss, net
   
(411
)
   
(877
)
                 
Loss from operations before income taxes
   
(423
)
   
(488
)
Income tax provision
   
(60
)
   
(42
)
Net loss
 
$
(483
)
 
$
(530
)
Other comprehensive income (loss):
               
Foreign currency gain (loss)
   
       6
     
        (8
)
Other comprehensive loss
 
$
            (477
)
 
$
            (538
)
                 
Basic and diluted net loss per share
               
Basic
 
$
(0.08
)
 
$
(0.09
)
Diluted
 
$
(0.08
)
 
$
(0.09
)
                 
Weighted average basic and diluted shares
               
Basic
   
6,055,000
     
5,971,000
 
Diluted
   
6,055,000
     
5,971,000
 
 
 
4

 
 
 ASURE SOFTWARE, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)


   
FOR THE
THREE MONTHS ENDED
MARCH 31,
 
   
2015
   
2014
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
 
$
(483
)
 
$
(530
)
Adjustments to reconcile net loss to net cash provided by operations:
               
Depreciation and amortization
   
785
     
686
 
Provision for doubtful accounts
   
15
     
-
 
Share-based compensation
   
37
     
39
 
Amortization of original issue discount (OID)
   
8
     
50
 
Gain on settlement of note payable and litigation
   
-
     
(1,034
Loss on debt refinancing
   
-
     
1,402
 
Changes in operating assets and liabilities:
               
Accounts receivable
   
401
     
(311
Inventory
   
(93
   
(2
Prepaid expenses and other assets
   
(195
   
(17
Accounts payable
   
648
     
181
 
Accrued expenses and other long-term obligations
   
(65
   
(286
Deferred revenue
   
(512
   
(107
Net cash provided by operating activities
   
546
     
71
 
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchases of property and equipment
   
(658
)
   
(168
)
Disposals of property and equipment
   
26
     
-
 
Collection of note receivable
   
-
     
5
 
Net cash used in investing activities
   
(632
)
   
(163)
 
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from notes payable
   
1,000
     
15,000
 
Payments on notes payable
   
(887
)
   
(16,248
)
Payments on amendment of senior notes payable
   
(75
   
(704
Debt financing fees
   
-
     
(575
Payments on capital leases
   
(51
)
   
(32
Insurance proceeds for settlement of notes payable dispute, net of expenses
   
-
     
373
 
  Net proceeds from exercise of stock options
   
42
     
21
 
         Net cash provided by (used in) financing activities
   
29
     
(2,165
Effect of foreign exchange rates
   
11
     
(9
                 
Net decrease in cash and cash equivalents
   
(46
   
(2,266
Cash and cash equivalents at beginning of period
   
320
     
3,938
 
Cash and cash equivalents at end of period
 
$
274
   
$
1,672
 
                 
SUPPLEMENTAL INFORMATION:
               
Cash paid for:
               
Interest
 
$
197
   
$
484
 
 
 
5

 
 
*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   March 31, 2015     March 31, 2014  
Net Loss
    (483 )     (530 )
Interest and amortization of OID
    288       507  
Tax
    60       42  
Depreciation
    174       113  
Amortization
    611       573  
Stock Compensation
    37       39  
EBITDA
    687       744  
One-time items
    283       396  
EBITDA excluding one-time items
    970       1,140  

 
6

 
 
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
 
$ 000s    
FOR THE THREE MONTHS ENDED
March 31
 
        2015     2014  
Net Income (Loss)
      (483 )     (530 )
Legal & Professional Services
      8       28  
Loss on Debt Refinancing
      -       1,402  
Gain on Settlement of Note Payable and litigation
      -       (1,034 )
Severance, Recruitment & Relocation
      55       -  
Gain on sale of assets
      -       -  
Interest income from settlement
      -       -  
Other one-time items (net)
      220       -  
Sub-total excluding Taxes       283       396  
Sub-total one-time items
      283       396  
Net Income (Loss) excluding one-time items
      (200 )     (134 )
 
 
 
7