ASURE SOFTWARE INC - FORM 8-K - EX-99.1 - November 16, 2015

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8-K - 8-K - ASURE SOFTWARE INCasuresoftware8k111315.htm
Exhibit 99.1
 
Asure Software Reports Revenue and Financial Results for
2015 Third Quarter
 
In thousands, except per share data
   Q3 2015     Q3 2014  
% Change
  
YTD Q3 2015
    
YTD Q3 2014
  
% Change
Revenue
   $ 6,654     $ 7,030  
down 5%
   $ 20,145     $ 20,105  
up 0.2%
Gross Margin
   $ 4,904     $ 5,435  
down 10%
   $ 14,864     $ 15,579  
down 5%
Net income (loss)
   $ (574 )   $ 161  
down 457%
   $ (962 )   $ (354 )
down 172%
EBIDTA, excluding one-times*
   $ 767     $ 1,382  
down 45%
   $ 3,125     $ 3,701  
down 16%
Diluted net income (loss) per share, excluding one-times*
   $ (0.09 )   $ 0.04       $ (0.09 )   $ 0.05    
 
AUSTIN, Texas, November 16, 2015 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the third quarter ended September 30, 2015.
 
Strategic Highlights
 
 
·
Rounded out Smart product platform by launching SmartWayTM indoor navigation mobile app in partnership with SPREO to enhance the mobile employee experience in the digital workplace.

 
·
Key strategic clients including Stanford University and Exxon Mobil expanded their resource scheduling investment with the addition of the SmartView space utilization solution. New clients include Eileen Fisher and the Museum of Contemporary Art-Chicago.
 
 
·
Migrated 63 clients in the third quarter and 133 clients year to date from on-premise to on-demand products, representing a 186% and 73% increase over the prior year third quarter and nine month number of conversions, respectively. Key clients migrating to on-demand include: Town of Southampton, Startek, The Nemours Foundation, and Mestek.
 
 
·
Strong free cash flow of $1.1 million allowed for the full repayment of $722,000 in seller notes related to our Roomtag acquisition.
 
Results
 
 
·
Cloud bookings in the quarter increased by 160% from the third quarter of 2014. Cloud bookings year to date increased by 66%, excluding PSSI, and 8%, including PSSI, over last year to date.

 
·
Backlog as of September 30, 2015 is $3.2 million, up $968,000, or 44%, from September 30, 2014, and up $929,000, or 41% over last quarter. In 2016, we expect our enterprise clients to move through implementation, resulting in conversion from backlog to reported revenue growth.
 
 
·
Revenue for the quarter was $6.7 million and $20.1 million year to date as compared to $7.0 million in the third quarter of 2014 and $20.1 million last year to date, a decrease of 5% and a slight increase of 0.2%, respectively.
 
 
·
Recurring revenue as a percent of total revenue was 75% for the quarter as compared to 73% in the third quarter of 2014. This increase is primarily the result of strong hardware as a service revenue in the quarter.
 
 
·
Recurring revenue as a percent of total revenue was 74% year to date as compared to 76% last year to date.
 
 
·
Increased Hardware as a Service (HAAS) revenue 194% compared to the third quarter of 2014 and increased 72% year to date as compared to year to date 2014.

 
·
Gross margin for the quarter was $4.9 million or 74%, down by 10%, from $5.4 million, or 77% in the third quarter of 2014. Year to date, gross margin was $14.9 million, or 74%, down from $15.6 million, or 77% last year to date. The decrease in gross margin percentage is primarily due to new product sales which have lower margins initially.  As these products mature and gain economies of scale, we anticipate a positive shift in these margins.
 
 
 
 
 
 
·
EBITDA* excluding one-time items* for the quarter was approximately $767,000 compared to $1.4 million in the third quarter of 2014, a decrease of 45%. Year to date, EBITDA * excluding one-time items* was approximately $3.1 million, compared to $3.7 million last year to date, a decrease of 16%.

 
·
Third quarter net (loss) income per share, excluding one-times*, was $0.09 loss compared to $0.04 income in the third quarter of 2014. Year to date net income per share, excluding one-times*, was $0.04 compared to $0.05 last year to date.

 
·
Cash flow provided by operating activities for the quarter was $1.1 million compared to $924,000 in the third quarter of 2014, representing an increase of 22%. Cash flow provided by operating activities year to date was $2.0 million, compared to $1.7 million year to date in 2014, an increase of 19%.

Pat Goepel, Chief Executive Officer of Asure Software commented, “Our earnings for the quarter were lower than expected.  While we attribute this to an increase in our backlog of implementations, we also generated strong cash flow in the quarter. As these enterprise clients move through implementation, we expect to see a positive impact to earnings.”

Brad Wolfe, Chief Financial Officer of Asure added, “Third quarter reported results reflect an increase in sales to enterprise clients, which drove an increase in backlog of $929,000 versus the prior quarter. We have adjusted our 2015 guidance as stated below and expect $7.1 million in revenue and $1.3 million in EBITDA in the fourth quarter. We also anticipate the fourth quarter to be another strong quarter from a cash generation perspective. We will introduce 2016 guidance on our first quarter conference call.”  

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

Company Outlook
$000s
  
FY 15
  
Revenue
   $ 27,000 – $27,500  
EBITDA, excluding one-time items
   $ 4,200 – $4,750  
Net income per share, excluding one-time items
   $ (0.04) – $0.04  

Conference Call Details
Asure will follow this announcement with a conference call for the investment community on Monday, November 16, 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 61780946.
 
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 on the Asure 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

 
 
 
 
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
 (Unaudited)
 
  
  
September 30,
2015
    
December 31,
2014
  
Assets
              
Current assets:
              
Cash and cash equivalents
  
$
122
    
$
320
  
Accounts receivable, net of allowance for doubtful accounts of $128 and $120 at
September 30, 2015 and December 31, 2014, respectively
    
4,248
      
5,295
  
Inventory
    
700
      
170
  
Prepaid expenses and other current assets
    
1,556
      
1,303
  
Total current assets
    
6,626
      
7,088
  
Property and equipment, net
    
2,326
      
1,539
  
Goodwill
    
17,438
      
17,500
  
Intangible assets, net
    
6,485
      
8,322
  
Other assets
    
766
      
19
  
Total assets
  
$
       33,641
    
$
       34,468
  
Liabilities and stockholders’ equity
                
Current liabilities:
                
Current portion of notes payable
  
$
938
    
$
750
  
Accounts payable
    
2,092
      
1,533
  
Accrued compensation and benefits
    
460
      
350
  
Other accrued liabilities
    
1,318
      
1,128
  
Deferred revenue
    
10,125
      
10,641
  
Total current liabilities
    
14,933
      
14,402
  
Long-term liabilities:
                
Deferred revenue
    
769
      
475
  
Notes payable
    
12,938
      
14,381
  
Other liabilities
    
579
      
739
  
Total long-term liabilities
    
14,286
      
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 September 30, 2015 and December 31, 2014,
respectively
    
67
      
64
  
Treasury stock at cost, 384 shares at September 30, 2015 and December 31, 2014
    
(5,017
)
    
(5,017
)
Additional paid-in capital
    
279,574
      
278,656
  
Accumulated deficit
    
(270,108
)
    
(269,146
)
Accumulated other comprehensive loss
    
(94
)
    
(86
)
Total stockholders’ equity
    
4,422
      
4,471
  
Total liabilities and stockholders’ equity
  
$
33,641
    
$
34,468
  
 
 
 
 
 
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands, except share and per share data)
(Unaudited)
 
   
FOR THE
THREE MONTHS ENDED
September 30,
    
FOR THE
NINE MONTHS ENDED
September 30,
  
   
2015
    
2014
    
2015
    
2014
  
Revenues
  
$
6,654
    
$
7,030
    
$
20,145
    
$
20,105
  
Cost of sales
    
1,750
      
1,595
      
5,281
      
4,526
  
    Gross margin
    
4,904
      
5,435
      
14,864
      
15,579
  
                                 
Operating expenses
                                
Selling, general and administrative
    
3,866
      
3,553
      
10,926
      
10,410
  
Research and development
    
786
      
868
      
2,267
      
2,444
  
Amortization of intangible assets
    
505
      
494
      
1,514
      
1,488
  
       Total operating expenses
    
5,157
      
4,915
      
14,707
      
14,342
  
                                 
Income (loss) from operations
    
(253
)
    
520
      
157
      
1,237
  
                                 
Other income (loss)
                                
Loss on lease termination
    
-
      
-
      
(110
)
    
-
  
Gain on settlement of note payable and litigation
    
-
      
-
      
-
      
1,034
  
Loss on debt refinancing
    
(4
) 
    
-
      
(4
)
    
(1,402
)
Foreign currency translation gain (loss)
    
(5
) 
    
2
      
(13
)
    
(10
)
Interest expense and other
    
(266
)
    
(288
)
    
(828
)
    
(1,009
)
Interest expense- amortization of original issue discount (OID)
    
(3
)
    
(10
)
    
(19
)
    
(64
)
       Total other loss, net
    
(278
)
    
(296
)
    
(974
)
    
(1,451
)
                                 
Income (loss) from operations before income taxes
    
(531
) 
    
224
      
(817
)
    
(214
)
Income tax provision
    
(43
)
    
(63
)
    
(145
)
    
(140
)
Net income (loss)
  
$
(574
) 
  
$
161
    
$
(962
)
  
$
(354
)
Other comprehensive income (loss):
                                
Foreign currency gain (loss)
    
27
      
14
      
(8
)
    
(4
)
Other comprehensive income (loss)
  
$
(547
)
  
$
175
    
$
(970
)
  
$
(358
)
                                 
Basic and diluted net income (loss) per share
                                
Basic
  
$
(0.09
) 
  
$
0.03
    
$
(0.16
)
  
$
(0.06
)
Diluted
  
$
(0.09
) 
  
$
0.03
    
$
(0.16
)
  
$
(0.06
)
Weighted average basic and diluted shares
                                
Basic
    
 6,290,000
      
6,008,000
      
6,138,000
      
5,986,000
  
Diluted
    
   6,290,000
      
   6,284,000
      
6,138,000
      
5,986,000
  
 
 
 
 
 
 ASURE SOFTWARE, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

   
FOR THE
NINE MONTHS ENDED
SEPTEMBER 30,
  
   
2015
    
2014
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net loss
  
$
(962
)
  
$
(354
)
Adjustments to reconcile net loss to net cash provided by operations:
                
Depreciation and amortization
    
2,324
      
2,060
  
Provision for doubtful accounts
    
70
      
20
  
Share-based compensation
    
335
      
131
  
Gain on settlement of note payable and litigation
    
-
      
(1,034
)
Loss on debt refinancing
    
4
      
1,402
  
Other
    
28
      
64
  
Changes in operating assets and liabilities:
                
Restricted cash
    
-
      
400
  
Accounts receivable
    
977
      
182
  
Inventory
    
(530
)
    
(241
)
Prepaid expenses and other assets
    
(927
)
    
(122
)
Accounts payable
    
542
      
28
  
Accrued expenses and other long-term obligations
    
354
      
150
  
Deferred revenue
    
(222
)
    
(1,015
)
         Net cash provided by operating activities
    
1,993
      
1,671
  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Acquisitions net of cash acquired
    
-
      
(3,111
)
Purchases of property and equipment
    
(1,290
)
    
(385
)
Disposals of property and equipment
    
18
      
38
  
Collection/(Issuance) of note receivable
    
-
 
    
9
  
         Net cash used in investing activities
    
(1,272
)
    
(3,449
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Proceeds from notes payable
    
4,250
      
18,179
  
Payments on notes payable
    
(5,527
)
    
(17,723
)
Payments on amendment of senior notes payable
    
(75
)
    
(704
)
Debt financing fees
    
-
      
(565
)
Payments on capital leases
    
(147
)
    
(104
)
Insurance proceeds for settlement of notes payable dispute, net of expenses
    
-
      
373
  
Net proceeds from exercise of stock options
    
585
      
24
  
        Net cash used in financing activities
    
(914
)
    
(520
)
                 
Effect of foreign exchange rates
    
(5)
      
(3
)
                 
Net decrease in cash and cash equivalents
    
(198
)
    
(2,301
)
Cash and cash equivalents at beginning of period
    
320
      
3,938
  
Cash and cash equivalents at end of period
  
$
122
    
$
1,637
  
                 
SUPPLEMENTAL INFORMATION:
                
Cash paid for:
                
Interest
  
$
597
    
$
937
  
                 
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
    
-
      
249
  
Accrued purchases of property and equipment
    
17
      
-
  

 
 
 

*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
  
September 30,
2015
    
September 30,
2014
  
Net income (loss)
     (574 )     161  
Interest and amortization of OID
     269       298  
Tax
     43       63  
Depreciation
     160       115  
Amortization
     611       578  
Stock Compensation
     237       50  
EBITDA
     746       1,265  
   One-time items
     21       117  
EBITDA excluding one-time items
     767       1,382  

FOR THE NINE MONTHS ENDED
 
$000s   September 30,
2015
     September 30,
2014
  
Net Loss
     (962 )     (354 )
Interest and amortization of OID
     847       1,073  
Tax
     145       140  
Depreciation
     492       337  
Amortization
     1,832       1,723  
Stock Compensation
     335       131  
EBITDA
     2,689       3,050  
   One-time items
     436       651  
EBITDA excluding one-time items
     3,125       3,701  
 
 
 
 
 
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
 
FOR THE THREE MONTHS ENDED
 
$000s
  
September 30, 
2015
    
September 30,
2014
  
Net income (loss)
     (574 )     161  
Legal & Professional Services
     17       107  
Severance, Recruitment & Relocation
     -       -  
Other one-time items (net)
     4       10  
Sub-total excluding Taxes
     21       117  
Sub-total one-time items
     21       117  
Net income (loss) excluding one-time items
     (553 )     278  


FOR THE NINE MONTHS ENDED
 
$000s  
September 30,
2015 
    
September 30,
2014
  
Net Loss
     (962 )     (354 )
Loss on Debt Refinancing
     -       1,402  
Gain on Settlement of Note Payable and litigation     -       (1,034 )
Legal & Professional Services
     35       187  
Severance, Recruitment & Relocation
     55       73  
Other one-time items (net)
     346       23  
Sub-total excluding Taxes
     436       651  
Sub-total one-time items
     436       651  
Net income(loss) excluding one-time items
     (526 )     297  
 
 
 
 
 

ASURE SOFTWARE INC Reports