ASURE SOFTWARE INC - FORM 8-K - EX-99.1 - March 29, 2012

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8-K - ASURE SOFTWARE INCasuresoftware8k032911.htm
Exhibit 99.1
 
 
For more information contact:
David Scoglio, CFO
Asure Software, Inc.
512-437-2732
dscoglio@asuresoftware.com
 

 
 
Asure Software Reports Fourth Quarter Results, Announces 3-for-2 Stock Split
 
 
·  
Q4 Revenue of $3.65 million vs. guidance range of $3.53 to $3.63 million
 
·  
Q4 EBITDA of $715,000, excluding one-time items and non-cash mark to market & original issue discount (OID); vs. guidance range of $540,000 to $630,000
 
·  
Q4 Earnings of $0.06 per share, excluding one-time and non-cash mark to market & OID charges
 
·  
Q4 Organic Deferred Revenue increased 22% sequentially driven by organic Cloud Bookings growth of 63% sequentially and monthly to annual contract conversions
 
·  
Free Cash Flow of $1.47 million, or $0.48 per share, aided by accelerated conversion from monthly SaaS customers to upfront annual payments
 
·  
Board approves 3-for-2 stock split effective April 30, 2012

 
AUSTIN, Texas, March 29, 2012 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the fourth quarter and full year results ended December 31, 2011.
 
Fourth quarter results, excluding one-time items, mark to market & OID, included earnings of $0.06 per share and EBITDA of $715,000. Adjusted to exclude only mark to market & OID adjustments, Asure was unprofitable at ($0.01) per share in both the fourth quarter and full year of 2011.
 
One-time items contributed ($0.07) per share, and consisted of acquisition-related legal and professional services, travel and other one-time expenses related to Asure’s acquisitions of ADI Time and Legiant. Non-cash mark to market and OID charges related to its convertible debt contributed and fair value of notes payable ($0.20) per share.
 
The Board of Directors also authorized the splitting of the company's common stock on a 3-for-2 basis, in the form of a 50% stock dividend, for shareholders of record on April 23rd. Shares resulting from the split are expected to be distributed on April 30, 2012. Cash will be distributed in lieu of fractional shares.
 
KEY FACTS FOR Q4:
 
Fourth quarter revenue was $3.65M, a 46% increase over the prior quarter, and 52% increase over the fourth quarter of 2010.  The $1.2M increase was largely driven by the acquisitions of ADI Time and Legiant in the fourth quarter of 2011. Excluding acquisition revenue, Asure’s recurring revenue as a percentage of overall revenue increased to 84%, a sequential increase of 4%. Including revenue from acquisitions, this metric was 75% for the fourth quarter of 2011, due to a larger percentage of hardware revenue coming via acquisitions, including our proprietary time clock solutions. Gross margins dropped to 75% with the inclusion of acquisitions due to a larger percent of hardware revenue as well.  Hardware revenue increased by 294% compared to last quarter as a result of the company’s proprietary time clock solutions.
 
 “We are pleased with our financial results of last quarter and 2011. We completed two successful acquisitions and have already realized significant synergies within the organization,” commented Pat Goepel, Chief Executive Officer of Asure Software. “Our new, unique product portfolio further enables the execution of our cloud-based strategy, which is evidenced in our strong bookings growth of 101% from the fourth quarter last year.  We believe our products and strategy put us in a unique position in the market as shown through the acceptance of our cloud-based software offerings, and new hardware technology in 2011.  We are focused on making our solutions widely available to clients, and similarly we have announced a 3 for 2 stock split that should make our stock broadly accessible to investors.”
 
 
 
 
 
David Scoglio, Asure’s Chief Financial Officer added, “Asure posted a strong fourth quarter financially as EBITDA and revenue exceeded guidance.  Organic deferred revenue grew 22% sequentially, and 57% year over year, due to increased Cloud bookings, and successful efforts to convert monthly contracts into annual paid up front contracts, which contributed to free cash flow for the fourth quarter of 2011.  Organic Cloud bookings posted strong comparables of 101%   year over year and 63% quarter over quarter.”
 
Mr. Scoglio also commented, “As a result of the transaction described in our Form 8-K on March 12, 2012, the Company’s convertible debt instruments, which were vitally important in the acquisition of ADI Time in October, 2011, had provisions that required separate mark to market accounting.  Approximately $1,150,000 of this debt has already converted into equity and the provisions causing the separate accounting have been amended and removed as of March 10, 2012.  This separate accounting requirement caused a $0.6 million mark to market non-cash charge in fourth quarter of 2011, and the modification and resulting conversion will cause an expected additional approximately $0.5 million non-cash charge in the upcoming 1st quarter of 2012.  Lastly, we have listed below our guidance for the coming quarter and have reconfirmed our plan for the year.  EPS guidance will be given after the effect of the stock split; at our Q2 earnings call in May.”
 
2012 Q1 Guidance*
 
$000s
   
Guidance
  
   
Q1 '12
    
FY '12
  
 Revenue ($000s)
   $ 4,100 - $4,200       18,000  
 EBITDA Gain ($000s), excl. One Time
   $ 700 - $800       4,000  
 Free Cash Flow
   $ 500 - $650       3,000  
 
* Q1 2012 Guidance excludes the impacts of convertible debt conversions as outlined in our March 12, 2012 Form-8K
 
 
Conference Call Details
Asure will follow this announcement with a conference call for the investment community on Thursday, March 29th, 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 David Scoglio, Chief Financial Officer.  To participate, dial (877) 853-5636 ten minutes before the call begins. International callers should dial (631) 291-4544.  The pass code for all callers is 59604584.
 
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 10 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. (NasdaqCM:  ASUR ), headquartered in Austin, Texas. Asure Software's intuitive and innovative technologies enable companies of all sizes and complexities to operate more efficiently.  Simply put, we turbocharge your workplace by stimulating your workforce and maximizing your company’s resources while eliminating waste out of employee's workflow.
 
Asure Software’s number one priority is to delight our clients and support their change initiatives. We ensure a high-performing work environment by integrating our "keep it simple" solutions and expertise to over 3,500 plus clients world-wide; Asure Software’s suite of solutions range from time and attendance workforce management solutions to asset optimization and meeting room management.  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.
 

Reconciliation of GAAP Net Earnings to Net Earnings Excluding 1-Time Items and GAAP Net Earnings  excluding Mark to Market & OID (2011 only)
 
$000s
FOR THE THREE MONTHS ENDED DECEMBER 31
  
FOR THE TWELVE MONTHS ENDED DECEMBER 31
 
2011
2010
  
2011
2010
Net Gain/(Loss)
(645)
66
  
(649)
(1,137)
Legal & Professional Services
126
0
  
210
0
Travel
42
0
  
83
0
Severance, Recruitment & Relocation
35
0
  
140
0
Sales & Marketing Infrastructure
0
0
  
35
0
Mark to Market & OID
604
0
  
604
0
Loss on Lease Amendment
0
0
  
0
1,203
Other 1-Time Items (net)
27
37
  
38
95
sub-total ex Mark to Market & OID
230
      
506
    
Total 1-Time Costs
834
37
  
1,110
1,298
Net Gain Excl. 1-Time Items
189
103
  
461
161
                   
Net Gain Excl. Mark to Market & OID
(41)
    
(45)
  
 
 
 
 
 
 
 

Reconciliation of GAAP Net Earnings to Earnings Before Interest, Taxes, Depreciation, Amortization and Stock
 Compensation Expense (EBITDA) and EBITDA Gain Excluding 1 Time Costs.
               
FOR THE THREE MONTHS ENDING
$000s
December 31, 2011
December 31, 2010
Inc/Dec
Net Gain/(Loss)
(645)
66
(711)
Interest
129
12
117
Interest - Mark to Market & OID
  
604
0
604
Tax
42
(4)
46
Depreciation
52
45
7
Amortization
277
195
82
Stock Compensation
26
10
16
EBITDA Gain
485
324
161
sub-total ex MMT & OID & 1 Time Taxes
  
230
37
193
EBITDA Gain Exc. 1 Time Items
715
361
354
               
               
FOR THE TWELVE MONTHS ENDING
$000s
December 31, 2011
December 31, 2010
Inc/Dec
Net Gain/(Loss)
(649)
(1,137)
488
Interest
159
64
95
Interest - Mark to Market & OID
  
604
0
604
Tax
72
17
55
Depreciation
166
237
(71)
Amortization
862
779
83
Stock Compensation
81
52
29
EBITDA Gain
1,295
12
1,283
sub-total ex MMT & OID & 1 Time Taxes
  
506
1,298
(792)
EBITDA Gain Exc. 1 Time Items
1,801
1,310
491
 

 
 
 
 

ASURE SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
 
   
December, 31
  
   
2011
    
2010
  
Assets
            
Current assets:
            
    Cash and cash equivalents
  
$
1,067
    
$
1,070
  
    Accounts receivable, net of allowance for doubtful accounts of $19 and $46 at December 31,   2011 and 2010, respectively
    
1,483
      
1,239
  
    Inventory
    
116
      
25
  
    Notes receivable
    
96
      
62
  
    Prepaid expenses
    
338
      
255
  
       Total current assets
    
3,100
      
2,651
  
                 
Notes receivable
    
-
      
60
  
Property and equipment, net
    
414
      
281
  
Goodwill
    
6,264
      
-
  
Intangible assets, net
    
6,307
      
2,844
  
       Total assets
  
$
16,085
    
$
5,836
  
                 
Liabilities and Stockholders' Equity
                
Current liabilities:
                
    Line of Credit
  
$
500
      
-
  
    Current portion of notes payable
    
349
      
-
  
    Accounts payable
    
1,097
    
$
560
  
    Accrued compensation and benefits
    
141
      
95
  
    Other accrued liabilities
    
536
      
361
  
    Deferred revenue
    
4,792
      
1,955
  
       Total current liabilities
    
7,415
      
2,971
  
                 
Long-term liabilities:
                
    Deferred revenue
    
169
      
116
  
    Subordinated notes payable
    
4,323
      
-
  
    Subordinated convertible notes payable
    
1,247
      
-
  
    Derivative liability
    
835
      
-
  
    Other long-term obligations
    
32
      
25
  
       Total long-term liabilities
    
6,606
      
141
  
                 
Stockholders' equity:
                
  Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding
    
--
      
--
  
  Common stock, $.01 par value; 6,500 shares authorized; 3,343  and 3,341 shares issued, 3,087 and 3,085 shares outstanding at December 31, 2011 and 2010, respectively
    
334
      
334
  
  Treasury stock at cost, 256 and 256 shares at December 31, 2011  and 2010, respectively
    
(5,017
)
    
(5,017
)
  Additional paid-in capital
    
271,065
      
270,978
  
  Accumulated deficit
    
(264,190
)
    
(263,541
)
  Accumulated other comprehensive loss
    
(128
)
    
(30
)
       Total stockholders' equity
    
2,064
      
2,724
  
   
$
16,085
    
$
5,836
  
 
The notes in the Company’s forthcoming Form 10-K are an integral part of these consolidated financial statements.
 
 
 
 
 
ASURE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)

 
   
Twelve Months
December 31, 2011
    
Twelve Months
December 31, 2010
  
Revenues
  
$
10,941
    
$
10,033
  
Cost of sales
    
2,289
      
2,259
  
       Gross Margin
    
8,652
      
7,774
  
                 
Operating Expenses
                
  Selling, general and administrative
    
6,203
      
5,693
  
  Research and development
    
1,678
      
1,445
  
  Loss on lease agreement
    
-
      
1,203
  
  Amortization of intangible assets
    
680
      
598
  
       Total operating expenses
    
8,561
      
8,939
  
                 
Income (Loss) From Operations
    
91
      
(1,165
)
                 
Other Income (Expenses)
                
  Interest income
    
10
      
5
  
  Gain on sale of assets
    
-
      
5
  
  Gain on Investments
    
-
      
130
  
  Foreign currency translation (loss) gain
    
74
      
(54
)
  Interest expense and other
    
(148
)
    
(66
)
  Interest expense – amortization of OID and derivative mark-to-market
    
(604
)
        
       Total other income (loss)
    
(668
)
    
20
  
                 
Loss From Operations before Income Taxes
    
(577
)
    
(1,145
)
Benefit (provision) for income taxes
    
(72
)
    
8
  
Net Loss
  
$
(649
)
  
$
(1,137
)
                 
Basic and Diluted Loss Per Share
                
  Basic
  
$
(0.21)
    
$
(0.37
)
  Diluted
  
$
(0.21)
    
$
(0.37
)
Weighted Average Basic and Diluted Shares
                
  Basic
    
3,085
      
3,087
  
  Diluted
    
3,085
      
3,087
  
 
The notes in the Company’s forthcoming Form 10-K are an integral part of these consolidated financial statements.
 

 
 
 

ASURE SOFTWARE INC Reports