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Asure Software Continues Improvements in Revenue Growth and Profitability With Solid Financial Results for 2014 Third Quarter

In thousands, except per share data Q3 2014 Q3 2013 % Change YTD Q3 2014 YTD Q3 2013 % Change
Revenue $7,030 $6,470 Up 9% $20,105 $18,742 Up 7%
Gross margin $5,435 $4,928 Up 10% $15,579 $13,941 Up 12%
Net income (loss) $161 $109 Up 48% ($354) ($1,560) Up 77%
EBITDA, excluding one-times* $1,382 $1,462 Down 6% $3,701 $3,340 Up 11%
Diluted net income (loss) per share, excluding one-times* $0.04 $0.04 $0.05 ($0.16)

AUSTIN, Texas, Nov. 12, 2014 (GLOBE NEWSWIRE) -- Asure Software, Inc. (Nasdaq:ASUR), a leading provider of workplace management software, announced results for the third quarter ended September 30, 2014.

Strategic Highlights

  • Cloud revenue growth was driven with the key sales and upgrades of AsureForce workforce management solutions to ECI Electronic Commerce, Inc., Startek, Inc. and Forum Credit Union in the US and key sales and upgrades of AsureSpace workspace management solutions to KPMG, Deutsche Bank, and Alexander Mann in the UK and Pfizer, Fitch, and the Educational Testing Service in the US.
  • Expanded the Company's product portfolio with the introduction of some key first-to-market SaaS-based technologies, including the introduction of NowSpace™, a space scheduling mobile app, the AsureForce® AirClock™, a tablet-based time collection device with facial recognition, and SmartTag™, a highly visual SaaS-based asset management solution; also launched new advanced scheduling and enterprise scheduling capabilities within the AsureForce product line.
  • Expanded the Company's global presence with new partnerships in South Africa and Dubai and transitioned two of the Company's largest U.S. partners from on premise to SaaS solutions.
  • There was a pullback in the third quarter of 22% from our very strong second quarter bookings of $3.9 million. Year to date the trend line for bookings remains strong with an overall increase of 36% and an increase of 28% in cloud bookings.
  • Net income was $0.03 per share as compared to net income of $.02 per share in the third quarter of 2013. This was the second full quarter with our new re-financing in place. We anticipate being profitable the remainder of the year.

Results

  • Cloud SaaS-based revenue for the quarter was $3.4 million, up $208,000 or 6% over the third quarter of 2013.
  • Revenue for the quarter of $7.0 million increased 9% over the $6.5 million in the third quarter 2013.
  • Recurring revenue as a percent of total revenue was 73% for the quarter as compared to 76% in the third quarter of 2013.
  • Gross margin for the quarter was $5.4 million compared to $4.9 million in the third quarter 2013, an increase of 10%.
  • EBITDA* excluding one-time items* for the quarter was approximately $1.4 million compared to $1.5 million in the third quarter of 2013.
  • Third quarter net income per share, excluding one-times*, was $0.04 compared to $0.04 in the third quarter of 2013.
  • Cash flow provided by operating activities for the quarter was $924,000 compared to $383,000 in the third quarter 2013, representing an increase of 141%.

Management Commentary

Pat Goepel, Chief Executive Officer of Asure Software commented, "Consistent with our overall strategy, the company continues to drive toward repetitive revenue growth and operational efficiency. In Q3, Asure brought several best-in-breed technologies to market that directly support our continued focus on bringing SaaS-based best-in-class solutions to a global market place. These expanded capabilities, along with the expansion of our partner channels, allow us to drive sales, growth and long-term profitability; as a result, Q4 sales activity is encouraging."

Brad Wolfe, Asure's Chief Financial Officer added, "Third quarter brought continued improvement in net income and growth in bookings. The combination of SaaS-based repetitive revenue with one-time revenue gained from professional services and integrated hardware sales has had a positive impact on the quarter and year over year Cloud revenue growth remains positive. We anticipate a strong end to the year with continued year over year growth in both revenue and EBITDA. As we approach year end, we are adjusting our guidance for the full year as reflected below."

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

Company Outlook
$000s FY 14
Revenue $27,000 - $28,000
EBITDA, excluding one-time items $5,000 - $6,000
Net income per share, excluding one-time items $0.12 - $0.16

Conference Call Details

Asure will follow this announcement with a conference call for the investment community on Wednesday, November 12, 2014 at 11:00 a.m. EST, (10:00 a.m. CST) 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 23379638.

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/

About Asure Software

Asure Software, Inc., (Nasdaq:ASUR) headquartered in Austin, Texas, offers cloud-based time and labor management and workspace management solutions that enable businesses to control their biggest costs -- labor, real estate and technology -- and prepare for the workforce of the future in a highly mobile, geographically disparate and technically wired work environment. Asure serves approximately 6,000 clients worldwide and currently offers two main product lines: AsureSpace™ workplace management solutions enable organizations to maximize the ROI of their real estate, and AsureForce® time and labor management solutions deliver efficient management of human resource and payroll processes. 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.

ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
September 30, December 31,
2014 2013
Assets
Current assets:
Cash and cash equivalents $ 1,637 $ 3,938
Restricted cash -- 400
Accounts receivable, net of allowance for doubtful accounts of $120 and $168 at September 30, 2014 and December 31, 2013, respectively 3,722 3,902
Inventory 318 77
Notes receivable -- 9
Prepaid expenses and other current assets 1,339 1,334
Total current assets 7,016 9,660
Property and equipment, net 1,243 1,233
Goodwill 18,401 15,005
Intangible assets, net 8,160 9,679
Other assets 24 38
Total assets $ 34,844 $ 35,615
Liabilities and stockholders' equity
Current liabilities:
Current portion of notes payable $ 750 $ 4,308
Accounts payable 1,697 1,669
Accrued compensation and benefits 366 473
Other accrued liabilities 1,079 988
Deferred revenue 9,455 10,059
Total current liabilities 13,347 17,497
Long-term liabilities:
Deferred revenue 535 759
Notes payable 15,960 12,698
Other liabilities 739 444
Total long-term liabilities 17,234 13,901
Stockholders' equity:
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding -- --
Common stock, $.01 par value; 11,000 shares authorized; 6,434 and 6,353 shares issued, 6,050 and 5,969 shares outstanding at September 30, 2014 and December 31, 2013, respectively 64 63
Treasury stock at cost, 384 shares at September 30, 2014 and December 31, 2013 (5,017) (5,017)
Additional paid-in capital 278,562 278,159
Accumulated deficit (269,238) (268,884)
Accumulated other comprehensive loss (108) (104)
Total stockholders' equity $ 4,263 $ 4,217
$ 34,844 $ 35,615
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands, except share and per share data)
(Unaudited)
FOR THE
THREE MONTHS FOR THE
ENDED NINE MONTHS ENDED
September 30, September 30,
2014 2013 2014 2013
Revenues $ 7,030 $ 6,470 $ 20,105 $ 18,742
Cost of Sales 1,595 1,542 4,526 4,801
Gross margin 5,435 4,928 15,579 13,941
Operating expenses
Selling, general and administrative 3,553 3,216 10,410 9,939
Research and development 868 736 2,444 2,100
Amortization of intangible assets 494 497 1,488 1,662
Total operating expenses 4,915 4,449 14,342 13,701
Income from operations 520 479 1,237 240
Other income (loss)
Gain on settlement of note payable and litigation -- -- 1,034 --
Interest income -- 48 -- 48
Gain (loss) on sale/disposal of assets -- 72 -- 72
Loss on debt refinancing -- -- (1,402) --
Foreign currency translation gain (loss) 2 5 (10) (19)
Interest expense and other (288) (328) (1,009) (1,378)
Interest expense- amortization of original issue discount (OID) (10) (128) (64) (403)
Total other income (loss), net (296) (331) (1,451) (1,680)
Income (loss) from operations before income taxes 224 148 (214) (1,440)
Income tax provision (63) (39) (140) (120)
Net income (loss) $ 161 $ 109 $ (354) $ (1,560)
Other comprehensive income (loss):
Foreign currency gain (loss) 14 (34) (4) 8
Other comprehensive income (loss) $ 175 $ 75 $ (358) $ (1,552)
Basic and diluted net income (loss) per share
Basic $ 0.03 $ 0.02 $ (0.06) $ (0.28)
Diluted $ 0.03 $ 0.02 $ (0.06) $ (0.28)
Weighted average basic and diluted shares
Basic 6,008,000 5,929,000 5,986,000 5,565,000
Diluted 6,284,000 6,217,000 5,986,000 5,565,000
ASURE SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
FOR THE
NINE MONTHS ENDED
SEPTEMBER 30,
2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (354) $ (1,560)
Adjustments to reconcile net loss to net cash provided by operations:
Depreciation and amortization 2,060 2,234
Provision for doubtful accounts 20 27
Share-based compensation 131 113
Amortization of original issue discount (OID) 64 403
Gain on settlement of note payable and litigation (1,034) --
(Gain) loss on sale/disposal of assets -- (72)
Interest income on settlement -- (48)
Discount on early payoff of Legiant Notes -- (135)
Loss on debt refinancing 1,402 --
Changes in operating assets and liabilities:
Restricted cash 400 (150)
Accounts receivable 182 (672)
Inventory (241) 84
Prepaid expenses and other assets (122) 196
Accounts payable 28 (967)
Accrued expenses and other long-term obligations 150 658
Deferred revenue (1,015) 1,058
Net cash provided by operating activities 1,671 1,169
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions net of cash acquired (3,111) --
Net purchases of property and equipment (347) (143)
Collection of note receivable 9 10
Net cash used in investing activities (3,449) (133)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (17,723) (5,707)
Proceeds from notes payable 18,179 2,500
Payments on amendment of senior notes payable (704) --
Net proceeds from issuance of common stock -- 3,435
Debt financing fees (565) (298)
Insurance proceeds for settlement of notes payable dispute, net of expenses 373 --
Payments on capital leases (104) (64)
Net proceeds from exercise of options 24 13
Net cash used in financing activities (520) (121)
Effect of translation exchange rates (3) 14
Net increase (decrease) in cash and cash equivalents (2,301) 929
Cash and equivalents at beginning of period 3,938 2,177
Cash and equivalents at end of period $ 1,637 $ 3,106
SUPPLEMENTAL INFORMATION:
Cash paid for:
Interest $ 937 $ 361
Non-cash Investing and Financing Activities:
Conversion of subordinated convertible notes payable to equity 249 --
Accrued contingent consideration upon acquisition 327 --

*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
September 30, September 30,
$000s 2014 2013
Net Income (Loss) 161 109
Interest and amortization of OID 298 456
Tax 63 39
Depreciation 115 111
Amortization 578 599
Stock Compensation 50 44
EBITDA 1,265 1,358
One-time items 117 104
EBITDA excluding one-time items 1,382 1,462
FOR THE NINE MONTHS ENDED
September 30, September 30,
$000s 2014 2013
Net Income (Loss) (354) (1,560)
Interest and amortization of OID 1,073 1,781
Tax 140 120
Depreciation 337 331
Amortization 1,723 1,903
Stock Compensation 131 113
EBITDA 3,050 2,688
One-time items 651 652
EBITDA excluding one-time items 3,701 3,340
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
FOR THE THREE MONTHS
$000s ENDED September 30
2014 2013
Net Income (Loss) 161 109
Legal & Professional Services 107 224
Severance, Recruitment & Relocation -- --
Gain on sale of assets -- (72)
Interest income from settlement -- (48)
Other one-time items (net) 10 --
Sub-total excluding Taxes 117 104
Sub-total one-time items 117 104
Net Gain/(Loss) excluding one-time items 278 213
FOR THE NINE MONTHS ENDED
$000s September 30
2014 2013
Net Loss (354) (1,560)
Loss on Debt Refinancing 1,402 --
Gain on Settlement of Note Payable and litigation (1,034) --
Legal & Professional Services 187 534
Severance, Recruitment & Relocation 73 160
Gain on sale of assets -- (72)
Interest income from settlement -- (48)
Other one-time items (net) 23 78
Sub-total excluding Taxes and MTM 651 652
Sub-total one-time items 651 652
Net Gain/(Loss) excluding one-time items 297 (908)
Reconciliation of GAAP Revenue to Non-GAAP revenue
FOR THE THREE MONTHS ENDED
$000s September 30
2014 2013
Revenue 7,030 6,470
Adjustment -- 40
Non- GAAP revenue 7,030 6,510
FOR THE NINE MONTHS ENDED
$000s September 30
2014 2013
Revenue 20,105 18,742
Adjustment -- 403
Non- GAAP revenue 20,105 19,145
Note – Adjustment relates to the fair market valuation for assumed deferred revenue contracts that were not recognized in the period due to business combination accounting rules.

CONTACT: For more information contact: Pat Goepel, CEO Asure Software, Inc. 888-323-8835 pgoepel@asuresoftware.com

Source:Asure Software, Inc.