AUSTIN, Texas, Nov. 14, 2016 (GLOBE NEWSWIRE) -- Asure Software, Inc. (NASDAQ:ASUR), a leading provider of Human Capital Management (HCM) and workplace management software, reported results for the third quarter ended September 30, 2016. The company also reported pro forma unaudited results, which included results from the acquisition of Mangrove Software as if it was completed on January 1, 2015.
Third Quarter 2016 Financial Summary
Actual Results
Pro Forma Results
(in millions except per share data and percentages)
Q3 2016
Q3 2015
Change (%)
Q3 2016
Q3 2015
Change (%)
Revenue
$
9.4
$
6.7
42
%
$
9.4
$
8.9
6
%
Gross Margin
$
7.4
$
4.9
51
%
$
7.4
$
6.8
8
%
Gross Margin(as a % of revenue)
78.5
%
73.7
%
7
%
78.5
%
76.6
%
3
%
EBITDA (excluding one-time expenses)
$
2.3
$
0.8
199
%
$
2.3
$
1.3
77
%
Net Income (Loss)
$
0.3
$
(0.6
)
155
%
$
0.3
$
(0.7
)
147
%
Net Income (Loss) per Diluted Share, Excluding one-time expenses
$
0.10
$
(0.09
)
211
%
$
0.10
$
(0.10
)
200
%
Year to Date 2016 Financial Summary
Actual Results
Pro Forma Results
(in millions except per share data and percentages)
YTD 2016
YTD 2015
Change (%)
YTD 2016
YTD 2015
Change (%)
Revenue
$
25.8
$
20.1
28
%
$
28.0
$
26.3
6
%
Gross Margin
$
19.9
$
14.9
34
%
$
21.6
$
19.9
8
%
Gross Margin(as a % of revenue)
77.0
%
73.8
%
4
%
77.1
%
75.7
%
2
%
EBITDA (excluding one-time expenses)
$
5.3
$
3.1
70
%
$
5.8
$
4.1
43
%
Net Income (Loss)
$
(1.1
)
$
(1.0
)
-15
%
$
(0.3
)
$
(1.9
)
85
%
Net Income (Loss) per Diluted Share, Excluding one-time expenses
$
0.15
$
(0.09
)
267
%
$
0.17
$
(0.23
)
174
%
Third Quarter 2016 Operational Highlights
Secured a new three-year deal with one of the company’s largest customers, Packers Sanitation Services (PSSI).
Total bookings for the quarter were up 19% year-over-year and up 39% year-to-date.
Backlog totaled $3.9 million, a 49% increase compared to the prior quarter and a 22% increase from the year-ago quarter. The company continues to expect many enterprise clients to move through the implementation process throughout the rest of fiscal 2016 and 2017, which will result in conversion from backlog to reported revenue growth.
Secured several new wins across a range of industry verticals with leading enterprises, including Procter & Gamble, Merck, ExxonMobil, and Apple.
Launched Version 8 of core HCM software, which the company expects to start selling and installing in the fourth quarter.
Cross-sell opportunities grew 452% from the second quarter, reflecting the increasing amount of synergies realized by the company since its acquisition of Mangrove Software in March 2016.
Overall pipeline of deals increased 212% from the second quarter, as the company continues to integrate its sales team to sell its entire suite of time and labor, workforce, and HCM solutions.
Third Quarter 2016 Financial Results
Revenue for the quarter increased 42% to $9.4 million from $6.7 million in the same year-ago quarter. On a pro forma basis, including the results from Mangrove Software as if the acquisition was completed on January 1, 2015, revenue increased 6% to $9.4 million from $8.9 million in the same year-ago quarter.
Recurring revenue for the quarter as a percent of total revenue was 74%, as compared to 75% in the third quarter of 2015.
Cloud revenue increased 65%, on premise software revenue increased 213%, and professional services revenue increased 78% from the third quarter of 2015.
Gross margin for the quarter was $7.4 million (78.5% of total revenue), a 51% increase from $4.9 million (73.7% of total revenue) in the third quarter of 2015.
EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization)* excluding one-time items* for the quarter totaled $2.3 million, an increase of 199% compared to $767,000 in the third quarter of 2015.
Net income per share (excluding one-times*) for the third quarter totaled $0.10, compared to net loss per share (excluding one-times*) of $(0.09) in the third quarter of 2015. On a pro forma basis, including the results from Mangrove Software as if the acquisition was completed on January 1, 2015, net income per share (excluding one-times*) totaled $0.10, an improvement from a net loss per share (excluding one-times*) of $(0.10) in the same year-ago quarter.
Financial Outlook
On a pro forma basis, including the company’s 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 previously raised guidance for fiscal 2016 ending December 31:
2016 Financial Guidance
Fiscal 2016 (vs. Fiscal 2015)
Revenue
$37.75 million to $38.75 million (+40.3% to +44.0% vs. YTD 2015 actual)
EBITDA, excluding one-time items
$7.75 million to $8.25 million (+107.6% to +120.9% vs. YTD 2015 actual)
Net income per share, excluding one-time items
$0.22 to $0.30 (vs. a loss of $0.17 YTD 2015 actual)
Management Commentary
“After an important quarter defined by wide-scale integration, cost reductions, and efficiency realizations, Q3 represented the beginning of a ‘new normal’ for Asure—a period where our unified platform and expanded market focus led us to realize many of the benefits we expected in this new stage of growth,” said company CEO, Pat Goepel. “Not only did we continue to see a year-over-year increase in many of our key metrics, such as pro forma revenue, gross margin, and EBITDA, but we also produced another quarter of profitability, demonstrating the strong demand for both our established and new solutions, as well as the continued near-term realization of some of the synergies from the Mangrove acquisition.
“While our cloud bookings were down for the quarter, due to a large win we experienced in Q3 of last year, total bookings were up 19% year-over-year and 39% year-to-date, and are expected to continue increasing as more customers begin to purchase the newest versions of our products, which we recently released. In addition, we realized significant growth in our cloud revenue, professional services revenue, and on premise revenue—which, when combined with how we’ve streamlined our backlog conversion process over the first half of 2016, speaks to how we’re able to quickly and sustainably scale our revenue base. In fact, we experienced a strong conversion of enterprise clients from backlog to revenue during Q3, despite seeing a healthy increase in our overall backlog, which was primarily due to securing a new three-year deal with PSSI, one of our largest clients to-date.”
Brad Wolfe, CFO of Asure Software, added: “The increase in backlog and the addition of new products and cross-sell opportunities has set up the company for a strong 2017. In addition, the investment in infrastructure and process is increasing both the leverage and scalability of our business, which enables us to achieve higher throughput and lower operational costs. This, in turn, allows us ramp up our investment in our sales and marketing initiatives and product portfolio, which we believe will accelerate our expansion and growth goals.”
Goepel continued: “In summary, Q3 was another strong and encouraging quarter for us. From an operational standpoint, we experienced a considerable amount of progress from where we were just a quarter ago, having built the foundation for a stronger level of growth in the months and quarters ahead. Given this progress and the fact that our sales pipeline is shaping up to be promising in the near future, we believe we can achieve our financial guidance for 2016, which we raised in Q2.”
Conference Call Details
Asure management will host a conference call today at 11:00 a.m. Eastern time (10:00 a.m. Central time) to discuss these financial results and outlook. Asure CEO Pat Goepel and CFO Brad Wolfe will host the presentation, followed by a question and answer period.
Date: Monday, November 14, 2016 Time: 11:00 a.m. Eastern time (10:00 a.m. Central time) U.S. dial-in: 877-853-5636 International dial-in: 631-291-4544 Conference ID: 2876476
Please call the conference telephone number ten minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.
The conference call will be broadcasted live and available for replay via the investor section of the company's website.
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.
ASURE SOFTWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands)
September 30, 2016 (Unaudited)
December 31, 2015
Assets
Current assets:
Cash and cash equivalents
$
289
$
1,158
Accounts and note receivable, net of allowance for doubtful accounts of $136 and $145 at September 30, 2016 and December 31, 2015, respectively
6,599
4,671
Inventory
616
784
Prepaid expenses and other current assets
1,441
1,072
Total current assets before funds held for clients
8,945
7,685
Funds held for clients
12,264
-
Total current assets
21,209
7,685
Property and equipment, net
1,764
2,212
Goodwill
26,263
17,436
Intangible assets, net
12,779
6,026
Other assets
42
458
Total assets
$
62,057
$
33,817
Liabilities and stockholders’ equity
Current liabilities:
Current portion of notes payable, net of debt issuance cost
$
5,099
$
909
Accounts payable
2,542
2,670
Accrued compensation and benefits
1,180
715
Other accrued liabilities
1,960
1,181
Deferred revenue
8,905
10,803
Total current liabilities before client fund obligations
19,686
16,278
Client fund obligations
12,264
-
Total current liabilities
31,950
16,278
Long-term liabilities:
Deferred revenue
844
947
Notes payable, net of debt issuance cost
25,464
12,384
Other liabilities
315
490
Total long-term liabilities
26,623
13,821
Total liabilities
58,573
30,099
Stockholders’ equity:
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding
-
-
Common stock, $.01 par value; 11,000 shares authorized; 6,916 and 6,674 shares issued, 6,532 and 6,290 shares outstanding at September 30, 2016 and December 31, 2015, respectively
69
67
Treasury stock at cost, 384 shares at September 30, 2016 and December 31, 2015
(5,017
)
(5,017
)
Additional paid-in capital
280,374
279,649
Accumulated deficit
(272,006
)
(270,903
)
Accumulated other comprehensive income (loss)
64
(78
)
Total stockholders’ equity
3,484
3,718
Total liabilities and stockholders’ equity
$
62,057
$
33,817
ASURE SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (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,
2016
2015
2016
2015
Revenues:
Cloud revenue
$
5,630
$
3,413
$
14,881
$
10,201
Hardware revenue
676
835
2,644
2,467
Maintenance and support revenue
1,078
1,434
3,509
4,541
On premise software license revenue
754
241
1,352
728
Professional services revenue
1,302
731
3,440
2,208
Total revenues
9,440
6,654
25,826
20,145
Cost of sales
2,026
1,750
5,932
5,281
Gross margin
7,414
4,904
19,894
14,864
Operating expenses
Selling, general and administrative
5,046
3,866
14,853
10,926
Research and development
761
786
2,217
2,267
Amortization of intangible assets
625
505
1,628
1,514
Total operating expenses
6,432
5,157
18,698
14,707
Income (loss) from operations
982
(253
)
1,196
157
Other income (loss)
Interest income
-
-
10
-
Loss on lease termination
-
-
-
(110
)
Foreign currency gain (loss)
(11
)
(5
)
(9
)
(13
)
Loss on debt refinancing
-
(4
)
-
(4
)
Interest expense and other
(609
)
(266
)
(1,461
)
(828
)
Interest expense- amortization of original issue discount (OID)
-
(3
)
-
(19
)
Acquisition costs
-
-
(706
)
-
Total other loss, net
(620
)
(278
)
(2,166
)
(974
)
Income (loss) from operations before income taxes
362
(531
)
(970
)
(817
)
Income tax provision
(47
)
(43
)
(133
)
(145
)
Net income (loss)
$
315
$
(574
)
$
(1,103
)
$
(962
)
Other comprehensive income (loss)
Foreign currency gain (loss)
26
27
142
(8
)
Other comprehensive income (loss)
$
341
(547
)
$
(961
)
$
(970
)
Basic and diluted net income (loss) per share
Basic
$
0.05
$
(0.09
)
$
(0.17
)
$
(0.16
)
Diluted
$
0.05
$
(0.09
)
$
(0.17
)
$
(0.16
)
Weighted average basic and diluted shares
Basic
6,534,000
6,290,000
6,383,000
6,138,000
Diluted
6,548,000
6,290,000
6,383,000
6,138,000
ASURE SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2016
2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(1,103
)
$
(962
)
Adjustments to reconcile net loss to net cash (used in) provided by operations:
Depreciation and amortization
2,686
2,324
Provision for doubtful accounts
50
70
Share-based compensation
166
335
Loss on debt financing
-
4
Other
94
28
Changes in operating assets and liabilities:
Accounts receivable
(1,678
)
977
Inventory
169
(530
)
Prepaid expenses and other assets
124
(927
)
Accounts payable
(189
)
542
Accrued expenses and other long-term obligations
951
354
Deferred revenue
(2,000
)
(222
)
Net cash (used in) provided by operating activities
(730
)
1,993
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions net of cash acquired
(12,000
)
-
Purchases of property and equipment
(128
)
(1,290
)
Disposals of property and equipment
-
18
Collection of note receivable
223
-
Net change in funds held for clients
4,155
-
Net cash used in investing activities
(7,750
)
(1 272
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable
16,823
4,250
Payments on notes payable
(5,173
)
(5,527
)
Payments on amendment of senior notes payable
-
(75
)
Debt financing fees
(438
)
-
Payments on capital leases
(158
)
(147
)
Net proceeds from exercise of stock options
561
585
Net change in client fund obligations
(4,155
)
-
Net cash provided by (used in) financing activities
7,460
(914
)
Effect of foreign exchange rates
151
(5
)
Net decrease in cash and cash equivalents
(869
)
(198
)
Cash and cash equivalents at beginning of period
1,158
320
Cash and cash equivalents at end of period
$
289
$
122
SUPPLEMENTAL INFORMATION:
Cash paid for:
Interest
$
817
$
597
Non-cash Investing and Financing Activities:
Note receivable from customer
-
601
Subordinated notes payable – Mangrove acquisition
6,000
-
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.
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
September 30, 2016
September 30, 2015
Net Income (loss)
$
315
$
(574
)
Interest and amortization of OID
529
269
Tax
47
43
Depreciation
249
160
Amortization
731
611
Stock Compensation
60
237
EBITDA
1,931
746
One-time items
365
21
EBITDA excluding one-time items
$
2,296
$
767
FOR THE NINE MONTHS ENDED
$000s
September 30, 2016
September 30, 2015
Net Loss
$
(1,103
)
$
(962
)
Interest and amortization of OID
1,376
847
Tax
133
145
Depreciation
739
492
Amortization
1,947
1,832
Stock Compensation
166
335
EBITDA
3,258
2,689
One-time items
2,048
436
EBITDA excluding one-time items
$
5,306
$
3,125
Reconciliation of GAAP Net Earnings to Net Earnings Excluding One-time items
FOR THE THREE MONTHS ENDED
$000s
September 30, 2016
September 30, 2015
Net Loss
$
315
$
(574
)
Legal & Professional Services
136
17
Severance, Recruitment & Relocation
88
-
Other one-time items (net)
141
4
Sub-total excluding Taxes
365
21
Sub-total one-time items
365
21
Net Income excluding one-time items
$
680
$
(553
)
FOR THE NINE MONTHS ENDED
$000s
September 30, 2016
September 30, 2015
Net Loss
$
(1,103
)
$
(962
)
Legal & Professional Services
982
35
Severance, Recruitment & Relocation
809
55
Other one-time items (net)
257
346
Sub-total excluding Taxes
2,048
436
Sub-total one-time items
2048
436
Net Income excluding one-time items
$
945
$
(526
)
Company Contact:
Brad Wolfe, CFO
Asure Software, Inc.
888-323-8835
[email protected]
Investor Relations Contact:
Matt Glover and Najim Mostamand
Liolios Group, Inc.
949-574-3860
[email protected]