Asure Software Inc.
ASURE SOFTWARE INC (Form: 8-K, Received: 03/30/2016 10:32:04)


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): March 30, 2016
 
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 March 30, 2016, Asure Software, Inc. (the “Company”) issued a press release announcing its financial results for its fourth quarter and fiscal year ended December 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: March 30, 2016                                                  By        /s/ Brad Wolfe                                                      
    Brad Wolfe, Chief Financial Officer
 
 
 
 
 

 

 

 
 

 
 
Exhibit 99.1
 

Asure Software Reports 2015 Financial Results and
Reaffirms 2016 Expectations


Fourth Quarter 2015 Financial Summary
 
In thousands, except per share data
    Q4 2015       Q4 2014  
% Change
 
YTD 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 -- 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
 
 
·
Cloud bookings in the quarter increased 135% from the fourth quarter of 2014,   driven by Bain Capital, La Trobe University, Acushnet Rubber Co., Salter Healthcare, TriHealth, LA Care, Farmers State Bank. For fiscal 2015, cloud bookings increased by 82%, excluding the company’s largest customer PSSI, and increased 30%, including PSSI, over fiscal 2014.

 
·
Backlog decreased $314,000 or 10% to $2.8 million from the prior quarter and increased 55% from fiscal 2014. In fiscal 2016, the company expects its enterprise clients to move through implementation, resulting in conversion from backlog to reported revenue growth.
 
 
·
Building our vertical industry presence we secured several new wins in the quarter across a range of strong industry verticals for Asure, including Thompson Reuters, Rogers Communication, Royal Bank of Canada, SAP America, Florida State University, and Morgan Stanley.
 
Financial Results

 
·
Revenue for the quarter decreased 5% to $6.8 million from $7.1 million in the same year-ago quarter. For fiscal 2015, revenue decreased 1% to $26.9 million from $27.2 million in fiscal 2014.
 
 
·
Recurring revenue for the quarter as a percent of total revenue was 76%, an improvement from 73% in the fourth quarter of 2014. This increase was primarily the result of strong Hardware as a Service (HAAS) revenue in the quarter.
 
 
·
Recurring revenue for fiscal 2015 as a percent of total revenue was 75% as compared to 75% in fiscal 2014.
 
 
·
Hardware as a Service (HAAS) revenue increased 364% compared to the fourth quarter of 2014 and increased 140% in fiscal 2015 compared to fiscal 2014.

 
·
Gross margin for the quarter was $4.7 million (70% of total revenue), a 12% decrease from $5.3 million (75% of total revenue) in the fourth quarter of 2014. For fiscal 2015, gross margin was $19.6 million (73% of total revenue) compared to $20.9 million (77% of total revenue) in fiscal 2014. The decrease in gross margin percentage for both periods was primarily due to new product sales, which have lower margins initially. As these products mature and gain economies of scale, the company anticipates gross margins to increase.
 
 
1

 
 
 
·
EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization)* excluding one-time items* for the quarter was approximately $609,000, a decrease of 51% compared to $1.3 million in the fourth quarter of 2014. For fiscal 2015, EBITDA * excluding one-time items* was approximately $3.7 million, a decrease of 25% compared to $5.1 million in fiscal 2014.

 
·
Net loss per share, excluding one-times*, for the fourth quarter was $0.08 compared to net income per share of $0.04 in the fourth quarter of 2014. For fiscal 2015, net loss per share, excluding one-times*, was $0.17 compared to net income per share of $0.08 in fiscal 2014.

 
·
Cash flow provided by operating activities for the quarter increased 32% to $1.4 million from $1.0 million in the fourth quarter of 2014. For fiscal 2015, cash flow provided by operating activities increased 24% to $3.4 million from $2.7 million in fiscal 2014.
 
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;
 
 
·
2015 vs 2014 YOY cloud bookings posted 30% growth with continued demand for global hoteling, hot-desking solutions.
 
 
·
We have a healthily backlog that will continue to convert to revenue throughout 2016 and beyond.  In 2015 among other improvements, we refined our backlog management to ensure a more timely realization of revenue.
 
 
·
Deferred revenue increase provides us with a strong foundation for 2016 revenue growth.
 
 
·
Our operating efficiency initiatives increased our cash flow in 2015 by 24%.
 
“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/ .
 
 
2

 
 
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.

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
 
 
3

 
 
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
 
 
 
4

 
 
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
 
 
 
5

 
 
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
     
-
 
 
 
6

 
 
*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
 
December 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
 
 
$000s
  December 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  
 
 
7

 
 
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  
 
 
8