AUSTIN, Texas, May 09, 2022 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq: ASUR), a leading provider of cloud-based Human Capital Management (“HCM”) software solutions, reported results for the three months ended March 31, 2022.

“I am very pleased with the way our business performed in the first quarter as we delivered solid execution of our 2022 business plan,” said Chairman and CEO, Pat Goepel. “In the quarter, we continued to build sales and operating momentum, and we showed meaningful progress in key business areas. These achievements enabled us to deliver 23% annual growth in revenues and 18% annual growth in non-GAAP EBITDA in the first quarter.”

“This year is proving very productive for us and we have already delivered numerous meaningful achievements. These include launching of several innovative initiatives, such as our Integration Marketplace, made possible with updates to our technology and execution of an API-first development strategy. This shift opens the gate to new strategic partnerships and high-margin revenue streams. which we expect will benefit our customers, their employees and our stakeholders. Our achievements also include successful integration of the two large acquisitions made in late 2021, investment in direct sales and marketing that is producing enhanced levels of cross selling activity and advancements in our internal processes and workflows that we expect to drive higher operating margins. In a labor environment characterized by accelerating change and complexity, we have a clear vision and plan to lead our customers confidently into the future.”

First Quarter 2022 Key Highlights

• Revenue of $24.3 million, up 23% year-over-year
• Non-GAAP EBITDA of $4.0 million, up 18% year-over-year
• Non-GAAP net income of $2.2 million, consistent with prior year’s quarter
• Total bookings were up 43% year-over-year

• NM indicates Not Meaningful Information
• Non-GAAP financial measures are reconciled to GAAP in the tables set forth in this release
• Note that first quarters are seasonally strong as recurring year-end W2/ACA revenue is recognized in this period

Financial Commentary

“Asure generated strong financial results with revenues growing 23% and non-GAAP EBITDA growing 18% relative to prior year”, said CFO John Pence. “Furthermore, non-GAAP Gross Margin of 69% in the first quarter continued to show strength supported by our increased scale and efficiency gains. Over the past two years we have improved non-GAAP Gross Margin by almost 500 basis points. Non-GAAP EBITDA margin remained strong at 17% even though prior year results featured temporary reductions in our employees’ benefits in response to the impact of Covid-19 on our business.

“We have raised the low end of our revenue guidance as our visibility improves and we successfully execute against our business objectives. Our new range for 2022 revenues is $88 - $90 million and is supported by encouraging trends within several parts of the business. We expect an accelerated level of investment in our product and Integration Marketplace in the second half of 2022 and 2023 as we execute key initiatives that we expect will lead to enhanced levels of revenue growth. We believe our efforts in the quarter represent a solid step forward in executing our strategy and delivering on our business plan.”

Asure Launches New Integration Marketplace: Automates Routine Tasks for Small and Mid-Sized Clients and Expands Reach Into HCM Ecosystem

Asure’s new Integration Marketplace launched today with prebuilt integrations to more than 125 vendors that provide complementary HCM services in Payroll & Tax, Time & Attendance, Retirement, and Worker’s Compensation. More than half of these integrations have been built in the last quarter with plans to continually add strategic partners and public APIs for developers to further extend our HCM ecosystem.

This initiative is made possible with updates to our technology and execution of an ‘API-first’ development strategy. “The infrastructure work we did in 2021 around APIs has set us up to take advantage of new sales channels and really capitalize on some large strategic partnerships that will drive high margin revenue,” said Pat Goepel, Chairman, and CEO. “Most importantly, these integrations save time, eliminate errors, and reduce the cost of ownership for clients who manage multiple HCM vendors in their employment lifecycle.”

One of the marketplace’s featured integrations is with Equifax and their employment verification product, The Work Number. This partnership will free Asure’s clients from the burden of manually verifying loan or benefits applications while employees may receive decisions faster without being asked to manually provide sensitive income & employment materials to third-party verifiers. “The Equifax partnership is a win-win-win for our clients, their employees, and our shareholders” added Goepel.

Asure’s Payroll Fintech Powers New Treasury System to Deliver Added Value to Business Customers

Asure Software, Inc. announced in January 2022 the launch of an advanced Treasury Management System expected to bring world-class automation to its preparation and reconciliation of business customers’ daily cash position.

“Automating the ins and outs of money movement and the reconciliation of payroll funds in our new Treasury System sets us up to take advantage of the fintech megatrends shaping the future of payroll like same-day-pay, alternate currencies, and an Asure Wallet,” said Pat Goepel, Chairman, and CEO of Asure. “We also now have more transparency into our business than ever before which allows us to make more strategic investment decisions with client funds.”

Asure’s Treasury System provides real-time visibility into the Treasury function with an array of stakeholder dashboards. This new enterprise software creates a single interface that captures money movement from multiple platforms and provides instant visibility for File Transmissions, Returns, and Reconciliations that all sync with General Ledger, Balance Sheet, and Dashboards through APIs.

Asure Accelerates Operating Scale with Advanced Robotic Process Automation (RPA) That Improves Customer Satisfaction, Speed, and Efficiency of Payroll Operations

Asure Software, Inc. announced in March 2022 its new integrations with Automation™ Anywhere and Workato® to maximize the speed, efficiency, and customer experience with automated processes.

These leading automation platforms provide Robotic Process Automation (RPA) capabilities that we expect to accelerate Asure’s HCM platform integration, streamline workflows, and further automate the end-to-end processes of Asure’s Payroll, HR, Tax Management, and money-movement services.

We expect the integration with Automation™ Anywhere allows RPA software bots to scale our resources, increase speed and accuracy, improve the customer experience, and ensure compliance and auditability. Asure is first building these bots to improve internal effectiveness and expects to soon offer a “Bot Library” to help its resellers take advantage of all these automation benefits.

The integration with Workato takes RPA to another level by providing advanced API integrations and workflows that enable more backend power to Asure’s automation strategy. These tools speed the onboarding process and make for a better customer experience due to seamless integration with front-end and back-end platforms.

“Automating processes in Payroll, HR, Tax, and money-movement is dramatically improving our productivity and our customer’s experience all at the same time,” said, Pat Goepel, Chairman, and CEO of Asure. “The real beauty of automation isn’t so much the time it saves but rather the possibilities it creates. Automating routine tasks, allows us to re-deploy our workforce on the more proactive, client-facing work that we believe makes a huge impact on our client’s ability to stay compliant and grow their business,” added Goepel.

Guidance

We are providing the following guidance for the remainder of 2022. This outlook is offered with the backdrop of a stabilizing but still challenging environment to predict future economic results given fluctuations in employment trends, COVID-19 and the other political and economic challenges of today and considers the impact of recent acquisitions.

Conference Call Details

Asure management will host a conference call Monday, May 9, 2022 at 4:30pm Eastern / 3:30pm Central. Asure Chairman and CEO Pat Goepel and CFO John Pence will participate in the conference call followed by a question-and-answer session. The conference call will be broadcast live and available for replay via the investor relations section of the Company’s website. Analysts may participate on the conference call by dialing (877) 853-5636 (U.S.) or (631) 291-4544 (outside the U.S.). The conference ID is 4658193.

About Asure Software, Inc.

Asure (Nasdaq: ASUR) is a leading provider of HCM software solutions. We help small and mid-sized companies grow by assisting them in building better teams with skills to stay compliant with ever-changing federal, state, and local tax jurisdictions and labor laws, and better allocate cash so they can spend their financial capital on growing their business rather than back-office overhead expenses. Asure’s Human Capital Management suite, named Asure HCM, includes cloud-based Payroll, Tax Services, and Time & Attendance software as well as HR services ranging from HR projects to completely outsourcing payroll and HR staff. We also offer these products and services through our network of reseller partners. Visit us at asuresoftware.com.

Non-GAAP Financial Measures

This press release includes information about Non-GAAP Net Income (Loss), Non-GAAP Net Income (Loss) per share, Non-GAAP tax rates, Non-GAAP gross profit, EBITDA, EBITDA margin, Non-GAAP EBITDA, and Non-GAAP EBITDA margin (collectively the “Non-GAAP financial measures”). These Non-GAAP financial measures are measurements of financial performance that are not prepared in accordance with U.S. generally accepted accounting principles and computational methods may differ from those used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company’s Consolidated Financial Statements prepared in accordance with GAAP. Non-GAAP financial measures are reconciled to GAAP in the tables set forth in this release.

EBITDA differs from GAAP Net Income (Loss) in that it excludes items such as interest, tax, depreciation, and amortization. Asure is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort.

Non-GAAP EBITDA differs from EBITDA in that it excludes share-based compensation, and one-time expenses. Asure is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort.

Non-GAAP Net Income (Loss) per share differs from GAAP Net Income (Loss) per share in that it assumes a 0% Non-GAAP tax rate, uses diluted share counts, and excludes items such as amortization, share-based compensation, and one-time expenses.

Non-GAAP gross profit differs from GAAP gross profit in that it excludes amortization, share-based compensation, and one-time items.

All Non-GAAP measures presented as “margin” are computed by dividing the applicable Non-GAAP financial measure by total revenue.

Management uses both GAAP and Non-GAAP measures when planning, monitoring, and evaluating the Company’s performance.

The primary purpose of using Non-GAAP measures is to provide supplemental information that may prove useful to investors and to enable investors to evaluate the Company’s results in the same way management does.

Management believes that supplementing GAAP disclosure with Non-GAAP disclosure provides investors with a more complete view of the Company’s operational performance and allows for meaningful period-to-period comparisons and analysis of trends in the Company’s business. Further, to the extent that other companies use similar methods in calculating Non-GAAP measures, the provision of supplemental Non-GAAP information can allow for a comparison of the Company’s relative performance against other companies that also report Non-GAAP operating results.

Specifically, management is excluding the following items from its Non-GAAP earnings per share, as applicable, for the periods presented in the first quarter 2022 financial statements:

Share-Based Compensation Expenses. The Company’s compensation strategy includes the use of share-based compensation to attract and retain employees and executives. It is principally aimed at aligning their interests with those of our stockholders and at long-term employee retention, rather than to motivate or reward operational performance for any particular period. Thus, share-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.

Amortization of Purchased Intangibles. The Company views amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts, trade names, customer lists and customer relationships, and acquired lease intangibles, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense, one that is not typically affected by operations during any particular period.

Income Tax Effects and Adjustments. Beginning in first quarter 2018, the Company started using a fixed projected Non-GAAP tax rate in order to provide better consistency across the interim reporting periods by eliminating the effects of items such as changes in the tax valuation allowance and non-cash tax effects of acquired goodwill and amortization, since each of these can vary in size and frequency. This tax rate could be subject to change for a variety of reasons, such as significant changes in the acquisition activity or fundamental tax law changes in major jurisdictions where the Company operates. The Company re-evaluates this tax rate on an annual basis or when any significant events that may materially affect this rate occur. The Non-GAAP tax rate is currently projected to be approximately zero (0.0) percent.

Amortization of Capitalized Internal-Use Software, Acquisition-Related, and One-Time Expenses. The Company’s Non-GAAP financial measures exclude amortization of internal-use capitalized software costs and acquisition-related expenses as well as one-time expenses, such as material tax credits, material interest-expense credits, severance, recruitment, proforma adjustments of the impact of post-sale HCM restructuring, and relocation.

Use of Forward-Looking Statements

This press release contains forward-looking statements about our financial results, which may include expected GAAP and Non-GAAP financial and other operating and non-operating results, including revenue, net income, diluted earnings per share, operating cash flow growth, operating margin improvement, deferred revenue growth, expected revenue run rate, expected tax rates, share-based compensation expenses, amortization of purchased intangibles, amortization of debt discount and shares outstanding. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions, over many of which the Company has no control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results could differ materially from the results expressed or implied by the forward-looking statements we make.

The risks and uncertainties referred to above include—but are not limited to—risks associated with possible fluctuations in the Company’s financial and operating results; the Company’s rate of growth and anticipated revenue run rate, including impact of the current environment, the spread of major epidemics (including COVID-19) and other related uncertainties such as government-imposed travel restrictions, interruptions to supply chains and extended shut down of businesses, political unrest, including the current issues between Russia and Ukraine, reductions in employment and an increase in business failures, specifically among our clients, the Company’s ability to convert deferred revenue and unbilled deferred revenue into revenue and cash flow, and ability to maintain continued growth of deferred revenue and unbilled deferred revenue; errors, interruptions or delays in the Company’s services or the Company’s Web hosting; breaches of the Company’s security measures; domestic regulatory developments, including changes to or applicability to our business of privacy and data securities laws, money transmitter laws and anti-money laundering laws; the financial and other impact of any previous and future acquisitions; the nature of the Company’s business model, including risks related to government contracts; the Company’s ability to continue to release, gain customer acceptance of and provide support for new and improved versions of the Company’s services; successful customer deployment and utilization of the Company’s existing and future services; changes in the Company’s sales cycle; competition; various financial aspects of the Company’s subscription model; unexpected increases in attrition or decreases in new business; the Company’s ability to realize benefits from strategic partnerships and strategic investments; the emerging markets in which the Company operates; the Company’s ability to hire, retain and motivate employees and manage the Company’s growth; changes in the Company’s customer base; technological developments; litigation and any related claims, negotiations and settlements, including with respect to intellectual property matters or industry-specific regulations; unanticipated changes in the Company’s effective tax rate; regulatory pressures on economic relief enacted as a result of the COVID-19 pandemic that change or cause different interpretations with respect to eligibility for such programs; factors affecting the Company’s term loan; fluctuations in the number of Company shares outstanding and the price of such shares; interest rates; collection of receivables; factors affecting the Company’s deferred tax assets and ability to value and utilize them; the potential negative impact of indirect tax exposure; the risks and expenses associated with the Company’s real estate and office facilities space; and general developments in the economy, financial markets, credit markets and the impact of current and future accounting pronouncements and other financial reporting standards. Further information on these and other factors that could affect the Company’s financial results is included in the reports on Forms 10-K, 10-Q and 8-K, and in other filings we make with the SEC from time to time. These documents are available on the SEC Filings section of the Investor Information section of the Company’s website at investor.asuresoftware.com. Asure Software assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

The forward-looking statements, including the financial guidance and 2022 outlook, contained herein represent the judgment of the Company as of the date of this press release, and the Company expressly disclaims any intent, obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

© 2022 Asure Software, Inc. All rights reserved.

ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except per share amounts)
(unaudited)

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

ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
(unaudited)

ASURE SOFTWARE, INC.
RECONCILIATION OF GAAP TO NON-GAAP
(in thousands, except per share amounts)

Source: Asure Software Inc