Asure Software, Inc. (NASDAQ:
ASUR), a leading provider of Human Capital Management
(HCM) and workplace management software, reported results for the
second quarter ended June 30, 2018.
Second Quarter 2018 Key Financial
Highlights
- Second Quarter Total Revenue of $21.8 Million, up 69%
Year-Over-Year
- Cloud Bookings were up 75% Year-Over-Year
- Second Quarter Cloud Revenue of $16.3 Million, up 85%
Year-Over-Year
- Total Deferred Revenue was $13.27 Million, up 7%
Year-Over-Year; Comprised of Short-Term Deferred Revenue of $12.23
Million and long-term Deferred Revenue of $1.04 Million
- Short-term Unbilled Deferred Revenue (within a 12-month period)
was $16.5 Million
- Long-term or Multi-Year Unbilled Deferred Revenue (beyond a
12-month period) was $14.1 Million
- Short-term Backlog (within a 12-month period) was $28.7
Million
- Total Backlog (short and long-term) Currently Exceeds $40
Million
|
|
|
|
|
|
Second Quarter and First Half 2018 Financial
Summary |
|
|
|
|
|
|
|
For the three months ended |
|
For the six months ended |
|
In
millions, except per share data |
June
30,2017 |
June
30,2018 |
Change (%) |
|
June
30,2017 |
June
30,2018 |
Change (%) |
|
Revenue |
$ |
12.9 |
|
$ |
21.8 |
|
69 |
% |
|
$ |
23.6 |
|
$ |
41.1 |
|
74 |
% |
|
|
|
|
|
|
|
|
|
|
GAAP Gross
Profit |
$ |
10.1 |
|
$ |
14.5 |
|
45 |
% |
|
$ |
18.3 |
|
$ |
28.3 |
|
54 |
% |
|
GAAP Gross
Margin |
|
78.1 |
% |
|
66.8 |
% |
-14 |
% |
|
|
77.7 |
% |
|
68.9 |
% |
-11 |
% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
Profit |
$ |
10.2 |
|
$ |
15.0 |
|
48 |
% |
|
$ |
18.6 |
|
$ |
29.1 |
|
57 |
% |
|
Non-GAAP Gross
Margin |
|
78.9 |
% |
|
69.1 |
% |
-12 |
% |
|
|
78.6 |
% |
|
70.8 |
% |
-10 |
% |
|
|
|
|
|
|
|
|
|
|
GAAP Net
Loss |
$ |
(1.8 |
) |
$ |
(3.8 |
) |
105 |
% |
|
$ |
(2.9 |
) |
$ |
(5.7 |
) |
96 |
% |
|
Non-GAAP Net
Income* |
$ |
0.9 |
|
$ |
1.8 |
|
110 |
% |
|
$ |
1.8 |
|
$ |
3.5 |
|
92 |
% |
|
|
|
|
|
|
|
|
|
|
GAAP Net Loss
per Share |
$ |
(0.18 |
) |
$ |
(0.29 |
) |
61 |
% |
|
$ |
(0.31 |
) |
$ |
(0.45 |
) |
45 |
% |
|
Non-GAAP Net
Earnings per Share** |
$ |
0.08 |
|
$ |
0.14 |
|
70 |
% |
|
$ |
0.19 |
|
$ |
0.26 |
|
37 |
% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
EBITDA* |
$ |
2.2 |
|
$ |
4.9 |
|
125 |
% |
|
$ |
3.9 |
|
$ |
8.7 |
|
123 |
% |
|
Non-GAAP EBITDA
Margin* |
|
16.8 |
% |
|
22.4 |
% |
33 |
% |
|
|
16.4 |
% |
|
21.1 |
% |
28 |
% |
|
* Non-GAAP financial measures are reconciled to GAAP in the
tables set forth in this release.** Historical
non-GAAP Net Earnings Per Share adjusted for 0% effective tax rate
for comparison purposes. |
|
|
Management Commentary
“We closed another strategic reseller acquisition since our last
earnings call, bringing the total we’ve completed this year to
seven. These acquisitions enhance our scale, product, customers,
cross-sell opportunities, and prepare us for future growth and
margin expansion,” stated Pat Goepel, CEO.
CFO Kelyn Brannon noted, “Our cloud strategy continues to
realize strong momentum. Recurring revenue represented 83% of total
revenue, up from 79% in the year-ago quarter. Furthermore, cloud
revenue represented 75% of total, up from 69% in the year-ago
quarter and our balance sheet is very healthy having ended the
quarter with $46.8 million in cash, bolstered by our recent equity
offering in June.”
“We continue to aim for both topline growth and bottom-line
leverage. We’re on the cusp of surpassing $100 million in revenue
while generating non-GAAP EBITDA margin of 22% to 25%. Asure’s
current product suite and depth of offerings has never been more
robust. And our footprint of areas we target has never been as
extensive,” concluded CEO Pat Goepel.
Asure delivered the following results for its second
quarter 2018:
Cloud Bookings: Second quarter cloud bookings
were up 75% year-over-year.
Revenue: Total second quarter revenue was $21.8
million, an increase of 69% from $12.9 million in the second
quarter of 2017. Recurring revenue represented 83% of total
revenue, up from 79% in the year-ago quarter. Cloud revenue
represented 75% of total, up from 69% in the year-ago quarter.
Gross Profit: GAAP gross profit was $14.5
million (66.8% margin), a 45% increase from $10.1 million (78.1%
margin) in the second quarter of 2017. Non-GAAP gross profit* was
$15.0 million (69.1% margin), up 48% from $10.2 million (78.9%
margin) in the year-ago quarter.
Earnings (Loss) per Share: GAAP loss per share
was $(0.29) compared with $(0.18) in the second quarter of 2017.
Non-GAAP earnings per share* were $0.14, an increase of 70% from
$0.08 in the year-ago quarter.
Non-GAAP EBITDA*: Non-GAAP EBITDA was $4.9
million (22.4% margin), an increase of 125% from $2.2M (16.8%
margin) in the second quarter of 2017.
Recent Business Highlights
New Wins: During the second quarter, Asure
added over 200 new clients. Asure secured new wins across a
range of industry verticals including AT&T, Barclays New York,
London Borough of Hounslow, Ellie Brown, Faithful + Gould @
Manchester City Council, Willis Towers Watson, Cigna, and Boston
Consulting Group.
Partnerships Established: Asure expanded
its partner ecosystem with new partners including Density.io,
OneWorkplace and Red River Technology.
Hosted C3, Asure Software’s Annual Customer
Conference: During May 2018 Asure held C3 in Orlando,
Florida. Approximately 200 attendees attended and participated in
dozens of breakout sessions. The event was by showcased by 18
sponsors, and many industry analysts were also in attendance.
Added to Russell Index: Asure Software was
added to Russell 2000® Index and the broad-market Russell 3000®
Index effective at market close on June 22, 2018. Russell US
Indexes are widely used by investment managers and institutional
investors as the basis for index funds and as benchmarks for active
investment strategies. Approximately $9 trillion in assets are
benchmarked against Russell US Indexes.
Closed Public Offering: On June 18, 2018, we
closed our previously announced underwritten public offering. We
sold an aggregate of 2,375,000 shares of our common stock at a
public offering price of $17.50 per share, including 375,000 shares
pursuant to an option granted to the underwriters that was
exercised in full. We realized net proceeds of approximately $38.9
million, after deducting underwriting discounts and estimated
offering expenses. iSystems Holdings LLC, the selling
stockholder, sold 500,000 shares of common stock at the same public
offering price.
Acquisitions in April 2018: Successfully closed
several strategic acquisitions in April 2018: Wells Fargo Business
Payroll Services’ Evolution HCM client portfolio and Austin HR,
located in Austin, Texas, a provider of outsourced human resources
(HR), consulting, and professional services around payroll and
employee benefits on the Evolution platform. Asure also acquired
OccupEye Limited, a provider of sensor-based solutions that allow
organizations across the world to streamline operations, create
efficiencies, enhance productivity and analyze employee engagement,
which generates cost savings and creates a more employee-focused
workplace. OccupEye’s technology combined with Asure’s
existing workplace management software HCM services, allows Asure
to expand its technology solutions while adding its own
complementary and proprietary sensor hardware and analytics.
Acquisition in July 2018: Successfully acquired
USA Payroll, Inc. (“USA Payroll”), headquartered in Rochester, NY.
USA Payroll resells Asure Software’s industry leading HRIS
platform, Evolution, working with companies to reduce payroll
compliance risk and manage time through comprehensive workforce
management solution. The addition of USA Payroll not only expands
our national reach but also enables us to provide clients with
access to greater breadth and depth of solutions.
Fiscal 2018 Financial GuidanceAsure management
maintained its revenue and non-GAAP EBITDA guidance for fiscal 2018
ending December 31, 2018. Note that guidance for revenue was
previously increased on July 3, 2018.
|
Range |
Revenue |
$93.0 million to $96.0
million |
Non-GAAP EBITDA |
$20.0 million to $23.0
million |
|
|
Additional 2018
Guidance: |
|
Interest expense |
$9.0 million to $9.5
million |
Depreciation |
$1.5 million to $2.0
million |
Amortization |
$8.7 million to $9.5
million |
Stock compensation expense |
$1.5 million to $2.0
million |
Acquisition costs and other one-time expenses |
$5.5 million to $6.5
million |
Basic average shares outstanding* |
13.9 million to 14.3
million |
Non-GAAP diluted shares outstanding* |
14.3 million to 14.7
million |
Non-GAAP Effective Tax Rate* |
See footnote |
|
|
- Basic average shares outstanding guidance is 15.0 million to
15.3 million in third-quarter 2018 and 15.1 million to 15.4 million
in fourth-quarter 2018.
- Non-GAAP diluted shares outstanding guidance is 15.4 million to
15.7 million in third-quarter 2018 and 15.6 million to 15.9 million
in fourth-quarter 2018.
- Non-GAAP effective tax rate guidance is 5.0% in third and
fourth-quarter 2018, compared with 0.0% in first- and second
quarter 2018.
Conference Call DetailsAsure management will
host a conference call today (Wednesday, August 8, 2018) at 4:30
p.m. Eastern time (3:30 p.m. Central time) to discuss these
financial results and outlook. Asure CEO Pat Goepel and CFO
Kelyn Brannon will host the presentation, followed by a question
and answer period.
U.S. dial-in: 877-853-5636International dial-in:
631-291-4544Conference ID: 4257218
The conference call will be broadcasted live and available for
replay via the investor section of the company's website.
Non-GAAP Financial Measures: This press release
includes information about non-GAAP diluted earnings per share,
non-GAAP tax rates, non-GAAP net income, non-GAAP gross profit,
non-GAAP EBITDA, and non-GAAP free cash flow (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 EBITDA differs from GAAP net loss in that it excludes
things such as interest, tax, depreciation, amortization, stock
compensation, and one-time expenses. Asure Software is unable to
predict with reasonable certainty the ultimate outcome of these
exclusions without unreasonable effort. Therefore, Asure Software
has not provided guidance for GAAP net loss or a reconciliation of
the foregoing forward-looking Non-GAAP EBITDA guidance to GAAP net
loss.
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 2018 financial statements and for
its non-GAAP estimates for 2018:
Stock-Based Expenses: The company's
compensation strategy includes the use of stock-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,
stock-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 is 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
for third and fourth quarter 2018 is currently projected to be
approximately 5.0 percent, compared with 0.0 percent in first and
second quarter 2018.
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, and
relocation.
About Asure Software Asure
Software, Inc. (NASDAQ: ASUR), headquartered in Austin, Texas,
offers intuitive and innovative solutions designed to help
organizations of all sizes and complexities build companies of the
future. Our cloud platforms enable more than 100,000 clients direct
and indirect, worldwide to better manage their people and space in
a mobile, digital, multi-generational, and global workplace. Asure
Software's offerings include a fully-integrated HCM platform,
flexible benefits and compliance administration, HR consulting, and
time and labor management as well as a full suite of workspace
management solutions for conference room scheduling, desk sharing
programs, and real estate optimization. For more information,
please visit www.asuresoftware.com.
"Safe harbor" statement under the Private Securities
Litigation Reform Act of 1995: 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, stock-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. 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 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; foreign
currency exchange rates; errors, interruptions or delays in the
company's services or the company's Web hosting; breaches of the
company's security measures; domestic and international regulatory
developments, including the adoption of new privacy 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; unique aspects of entering or expanding in
international markets, including the compliance with United States
export control laws, 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; factors affecting the company's outstanding convertible
notes, term loan, and revolving credit facility; fluctuations in
the number of company shares outstanding and the price of such
shares; collection of receivables; interest rates; 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 Securities
and Exchange Commission 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.
© 2018 Asure Software, Inc. All rights reserved.
ASURE SOFTWARE,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in thousands)
|
|
|
|
June 30,
2018(unaudited) |
|
|
December 31, 2017 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
46,845 |
|
|
$ |
27,792 |
|
Accounts
receivable, net of allowance for doubtful accounts of
$583and $425 at June 30, 2018 and December 31, 2017,
respectively |
|
|
18,126 |
|
|
|
13,361 |
|
Inventory |
|
|
1,911 |
|
|
|
509 |
|
Prepaid
expenses and other current assets |
|
|
3,547 |
|
|
|
2,588 |
|
Total current
assets before funds held for clients |
|
|
70,429 |
|
|
|
44,250 |
|
Funds
held for clients |
|
|
48,856 |
|
|
|
42,328 |
|
Total current
assets |
|
|
119,285 |
|
|
|
86,578 |
|
Property and equipment,
net |
|
|
6,812 |
|
|
|
5,217 |
|
Goodwill |
|
|
96,660 |
|
|
|
77,348 |
|
Intangible assets,
net |
|
|
63,172 |
|
|
|
33,554 |
|
Other assets |
|
|
2,272 |
|
|
|
614 |
|
Total
assets |
|
$ |
288,201 |
|
|
$ |
203,311 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Current
portion of notes payable |
|
$ |
5,196 |
|
|
$ |
8,895 |
|
Revolving
line of credit |
|
|
2,161 |
|
|
|
- |
|
Accounts
payable |
|
|
2,913 |
|
|
|
1,912 |
|
Accrued
compensation and benefits |
|
|
2,582 |
|
|
|
2,477 |
|
Other
accrued liabilities |
|
|
2,480 |
|
|
|
862 |
|
Deferred
revenue |
|
|
12,229 |
|
|
|
13,078 |
|
Total current
liabilities before client fund obligations |
|
|
27,561 |
|
|
|
27,224 |
|
Client
fund obligations |
|
|
49,700 |
|
|
|
42,328 |
|
Total current
liabilities |
|
|
77,261 |
|
|
|
69,552 |
|
Long-term
liabilities: |
|
|
|
|
|
|
|
|
Deferred
revenue |
|
|
1,036 |
|
|
|
1,125 |
|
Deferred
tax liability |
|
|
2,369 |
|
|
|
1,070 |
|
Notes
payable, net of current portion and debt issuance cost |
|
|
106,420 |
|
|
|
66,973 |
|
Other
liabilities |
|
|
1,029 |
|
|
|
817 |
|
Total long-term
liabilities |
|
|
110,854 |
|
|
|
69,985 |
|
Total
liabilities |
|
|
188,115 |
|
|
|
139,537 |
|
Commitments |
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
Preferred
stock, $.01 par value; 1,500 shares authorized; none issued
oroutstanding |
|
|
- |
|
|
|
- |
|
Common
stock, $.01 par value; 22,000 and 11,000 shares authorized;15,382
and 12,876 shares issued, 14,998 and 12,492 shares outstandingat
June 30, 2018 and December 31, 2017, respectively |
|
|
154 |
|
|
|
129 |
|
Treasury
stock at cost, 384 shares at June 30, 2018 and December 31,
2017 |
|
|
(5,017 |
) |
|
|
(5,017 |
) |
Additional paid-in capital |
|
|
387,234 |
|
|
|
346,322 |
|
Accumulated deficit |
|
|
(281,788 |
) |
|
|
(277,597 |
) |
Accumulated other comprehensive loss |
|
|
(497 |
) |
|
|
(63 |
) |
Total
stockholders’ equity |
|
|
100,086 |
|
|
|
63,774 |
|
Total
liabilities and stockholders’ equity |
|
$ |
288,201 |
|
|
$ |
203,311 |
|
|
|
ASURE SOFTWARE,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS(Amounts in thousands, except share and
per share data)(Unaudited)
|
|
|
|
FOR THETHREE MONTHS
ENDEDJune 30, |
|
|
FOR THESIX MONTHS
ENDEDJune 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Cloud |
|
$ |
16,322 |
|
|
$ |
8,826 |
|
|
$ |
32,759 |
|
|
$ |
16,662 |
|
Hardware |
|
|
1,436 |
|
|
|
1,560 |
|
|
|
2,155 |
|
|
|
2,648 |
|
Maintenance and support |
|
|
1,548 |
|
|
|
1,446 |
|
|
|
2,721 |
|
|
|
2,548 |
|
Professional services |
|
|
2,461 |
|
|
|
1,048 |
|
|
|
3,436 |
|
|
|
1,749 |
|
Total revenue |
|
|
21,767 |
|
|
|
12,880 |
|
|
|
41,071 |
|
|
|
23,607 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
7,220 |
|
|
|
2,826 |
|
|
|
12,777 |
|
|
|
5,264 |
|
Gross margin |
|
|
14,547 |
|
|
|
10,054 |
|
|
|
28,294 |
|
|
|
18,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative |
|
|
11,633 |
|
|
|
8,784 |
|
|
|
22,342 |
|
|
|
15,827 |
|
Research
and development |
|
|
1,558 |
|
|
|
836 |
|
|
|
2,981 |
|
|
|
1,605 |
|
Amortization of intangible assets |
|
|
1,994 |
|
|
|
1,042 |
|
|
|
3,591 |
|
|
|
1,889 |
|
Total operating expenses |
|
|
15,185 |
|
|
|
10,662 |
|
|
|
28,914 |
|
|
|
19,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss)
from operations |
|
|
(638 |
) |
|
|
(608 |
) |
|
|
(620 |
) |
|
|
(978 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense and other |
|
|
(2,722 |
) |
|
|
(1,088 |
) |
|
|
(4,482 |
) |
|
|
(1,635 |
) |
Total other loss, net |
|
|
(2,722 |
) |
|
|
(1,088 |
) |
|
|
(4,482 |
) |
|
|
(1,635 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
from operations before income taxes |
|
|
(3,360 |
) |
|
|
(1,696 |
) |
|
|
(5,102 |
) |
|
|
(2,613 |
) |
Income
tax provision |
|
|
(408 |
) |
|
|
(141 |
) |
|
|
(591 |
) |
|
|
(283 |
) |
Net income
(loss) |
|
$ |
(3,768 |
) |
|
$ |
(1,837 |
) |
|
$ |
(5,693 |
) |
|
$ |
(2,896 |
) |
Other
comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency gain (loss) |
|
|
(437 |
) |
|
|
(23 |
) |
|
|
(434 |
) |
|
|
(57 |
) |
Other
comprehensive income (loss) |
|
$ |
(4,205 |
) |
|
|
(1,860 |
) |
|
$ |
(6,127 |
) |
|
$ |
(2,953 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted net income (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.29 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.31 |
) |
Diluted |
|
$ |
(0.29 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.31 |
) |
Weighted
average basic and diluted shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
12,939,000 |
|
|
|
9,980,000 |
|
|
|
12,762,000 |
|
|
|
9,307,000 |
|
Diluted |
|
|
12,939,000 |
|
|
|
9,980,000 |
|
|
|
12,762,000 |
|
|
|
9,307,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASURE SOFTWARE,
INC. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(Amounts in thousands)
|
|
|
|
FOR THE SIX MONTHS ENDEDJUNE
30, |
|
|
|
2018 |
|
|
2017 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net
loss |
|
$ |
(5,693 |
) |
|
$ |
(2,896 |
) |
Adjustments to reconcile net loss to net cash provided by (used in)
operations: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
5,279 |
|
|
|
2,553 |
|
Provision for doubtful accounts |
|
|
474 |
|
|
|
150 |
|
Share-based compensation |
|
|
523 |
|
|
|
225 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(2,576 |
) |
|
|
(3,486 |
) |
Inventory |
|
|
(745 |
) |
|
|
(2 |
) |
Prepaid expenses and other assets |
|
|
(52 |
) |
|
|
(891 |
) |
Accounts payable |
|
|
(280 |
|
|
|
(244 |
) |
Accrued expenses and other long-term obligations |
|
|
(632 |
|
|
|
9 |
|
Deferred revenue |
|
|
(1,294 |
) |
|
|
973 |
|
Net cash
used in operating activities |
|
|
(4,996 |
) |
|
|
(3,609 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Acquisitions net of cash acquired |
|
|
(44,167 |
) |
|
|
(43,698 |
) |
Purchases
of property and equipment |
|
|
(738 |
) |
|
|
(782 |
) |
Software
capitalization costs |
|
|
(1,563 |
) |
|
|
- |
|
Net
change in funds held for clients |
|
|
18,497 |
|
|
|
3,657 |
|
Net cash
used in investing activities |
|
|
(27,971 |
) |
|
|
(40,823 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds
from notes payable |
|
|
36,750 |
|
|
|
45,777 |
|
Payments
on notes payable |
|
|
(5,388 |
) |
|
|
(6,391 |
) |
Proceeds
from revolving line of credit |
|
|
4,540 |
|
|
|
- |
|
Payments
on revolving line of credit |
|
|
(2,379 |
) |
|
|
- |
|
Net
proceeds from issuance of common stock |
|
|
39,220 |
|
|
|
27,916 |
|
Debt
financing fees |
|
|
(1,661 |
) |
|
|
(1,433 |
) |
Payments
on capital leases |
|
|
(68 |
) |
|
|
(91 |
) |
Net
change in client fund obligations |
|
|
(18,497 |
) |
|
|
(3,602 |
) |
Net cash
provided by financing activities |
|
|
52,517 |
|
|
|
62,176 |
|
|
|
|
|
|
|
|
|
|
Effect of
foreign exchange rates |
|
|
(497 |
) |
|
|
(92 |
) |
|
|
|
|
|
|
|
|
|
Net increase in
cash and cash equivalents |
|
|
19,053 |
|
|
|
17,652 |
|
Cash and cash
equivalents at beginning of period |
|
|
27,792 |
|
|
|
12,767 |
|
Cash and cash
equivalents at end of period |
|
$ |
46,845 |
|
|
$ |
30,419 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for: |
|
|
|
|
|
|
|
|
Interest |
|
$ |
3,525 |
|
|
$ |
889 |
|
Income
taxes |
|
|
26 |
|
|
|
- |
|
Non-cash Investing and
Financing Activities: |
|
|
|
|
|
|
|
|
Subordinated notes payable –acquisitions |
|
|
5,812 |
|
|
|
8,165 |
|
Equity
issued in connection with acquisitions |
|
$ |
1,200 |
|
|
|
21,825 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP
|
|
|
|
|
|
|
|
(In
$millions except per share data) |
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
2Q18 |
|
Reconciliation from GAAP gross profit to non-GAAP gross
profit: |
|
|
|
|
|
|
GAAP Gross
profit |
$ |
8.3 |
|
$ |
10.1 |
|
$ |
12.1 |
|
$ |
11.4 |
|
$ |
13.7 |
|
$ |
14.5 |
|
|
|
Stock
compensation |
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
|
Amortization |
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
0.3 |
|
|
0.5 |
|
|
Non-GAAP gross profit |
|
8.4 |
|
|
10.2 |
|
|
12.2 |
|
|
11.5 |
|
|
14.0 |
|
|
15.0 |
|
|
Non-GAAP gross margin |
|
78.3 |
% |
|
78.9 |
% |
|
78.8 |
% |
|
75.1 |
% |
|
72.8 |
% |
|
69.1 |
% |
|
|
|
|
|
|
|
|
|
|
(In
$millions except per share data) |
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
2Q18 |
|
Reconciliation from net income to non-GAAP
EBITDA: |
|
|
|
|
|
|
|
GAAP Net
income (loss) |
$ |
(1.1 |
) |
$ |
(1.8 |
) |
$ |
(1.3 |
) |
$ |
(1.5 |
) |
$ |
(1.9 |
) |
$ |
(3.8 |
) |
|
|
Stock
compensation |
|
0.1 |
|
|
0.2 |
|
|
0.1 |
|
|
0.2 |
|
|
0.2 |
|
|
0.3 |
|
|
|
Amortization |
|
1.0 |
|
|
1.1 |
|
|
1.4 |
|
|
1.4 |
|
|
1.9 |
|
|
2.5 |
|
|
|
Acquisition
costs and other one-time expenses |
|
0.9 |
|
|
1.2 |
|
|
1.6 |
|
|
2.1 |
|
|
1.3 |
|
|
2.3 |
|
|
|
Taxes based
on a 0% tax rate |
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
(0.3 |
) |
|
0.2 |
|
|
0.4 |
|
|
|
Interest
Expense One-Time Credit |
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
(0.3 |
) |
|
0.0 |
|
|
0.0 |
|
|
|
Depreciation |
|
0.2 |
|
|
0.2 |
|
|
0.3 |
|
|
0.3 |
|
|
0.4 |
|
|
0.4 |
|
|
|
Other
Income & Expenses |
|
0.5 |
|
|
1.1 |
|
|
1.6 |
|
|
1.3 |
|
|
1.8 |
|
|
2.7 |
|
|
Non-GAAP EBITDA |
|
1.7 |
|
|
2.2 |
|
|
4.0 |
|
|
3.3 |
|
|
3.8 |
|
|
4.9 |
|
|
Non-GAAP EBITDA margin |
|
16.0 |
% |
|
16.8 |
% |
|
25.5 |
% |
|
21.5 |
% |
|
19.6 |
% |
|
22.4 |
% |
|
|
|
|
|
|
|
|
|
|
(In
$millions except per share data) |
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
2Q18 |
|
Reconciliation from GAAP net income (loss) to non-GAAP net
income |
|
|
|
|
|
GAAP Net
income (loss) |
$ |
(1.1 |
) |
$ |
(1.8 |
) |
$ |
(1.3 |
) |
$ |
(1.5 |
) |
$ |
(1.9 |
) |
$ |
(3.8 |
) |
|
|
Stock
compensation |
|
0.1 |
|
|
0.2 |
|
|
0.1 |
|
|
0.2 |
|
|
0.2 |
|
|
0.3 |
|
|
|
Amortization |
|
1.0 |
|
|
1.1 |
|
|
1.4 |
|
|
1.4 |
|
|
1.9 |
|
|
2.5 |
|
|
|
Acquisition
costs and other one-time expenses |
|
0.9 |
|
|
1.2 |
|
|
1.6 |
|
|
2.1 |
|
|
1.3 |
|
|
2.3 |
|
|
|
Taxes based
on a 0% tax rate |
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
(0.3 |
) |
|
0.2 |
|
|
0.4 |
|
|
|
Interest
Expense One-Time Credit |
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
(0.3 |
) |
|
0.0 |
|
|
0.0 |
|
|
Non-GAAP net income |
|
0.9 |
|
|
0.9 |
|
|
2.0 |
|
|
1.6 |
|
|
1.7 |
|
|
1.8 |
|
|
|
|
|
|
|
|
|
|
|
(In
$millions except per share data) |
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
2Q18 |
|
Calculation of non-GAAP net income per share |
|
|
|
|
|
|
|
Non-GAAP net income |
$ |
0.9 |
|
$ |
0.9 |
|
$ |
2.0 |
|
$ |
1.6 |
|
$ |
1.7 |
|
$ |
1.8 |
|
|
Pro forma
diluted weighted-average number ofcommon shares |
|
8.8 |
|
|
10.2 |
|
|
12.6 |
|
|
12.7 |
|
|
12.8 |
|
|
13.3 |
|
|
Non-GAAP EPS |
$ |
0.11 |
|
$ |
0.08 |
|
$ |
0.16 |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact:Carolyn Bass,
PartnerMarket Street
Partners415-445-3232cbass@marketstreetpartners.com
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