Asure Software, Inc. (“we”,
“us”, “our”, “Asure” or the “Company”)
(Nasdaq:
ASUR), a leading provider of cloud-based Human Capital
Management (HCM) software solutions, reported results for the
fourth quarter and full year ended December 31, 2022.
Fourth Quarter 2022 Financial
Highlights
- Revenue of $29.3 million, up 39%
from prior-year’s quarter
- Recurring revenue of $24.1 million,
up 25% from prior-year’s quarter
- Net loss of $1.1 million, a $3.2
million improvement from prior-year’s quarter
- EBITDA of $5.0 million, up $3.5
million from prior-year’s quarter
- Adjusted EBITDA of $6.0 million, up
$3.7 million from prior-year’s quarter
Full Year 2022 Financial
Highlights
- Revenue of $95.8 million, up 26%
year-over-year
- Recurring revenue of $86.2 million,
up 21% year-over-year
- Net loss of $14.5 million, a $17.7
million decline from prior year, compared to full year 2021 net
income of $3.2 million which included $18.8 million in
extraordinary gains, without which prior year net loss would have
been $15.7 million
- EBITDA of $8.8 million, down $13.5
million from prior year, compared to full year 2021 EBITDA of $22.3
million which includes $18.8 million in extraordinary gains,
without which prior year EBITDA would have been $3.4 million
- Adjusted EBITDA of $11.8 million,
up $4.2 million from prior year
Recent Business Highlights
- Announced integration with ZayZoon,
allowing our customers the ability to offer their employees earned
wage access. In today’s labor market, “work today, get paid today”
is becoming increasingly popular and this integration empowers our
customers to offer their candidates the means to build and retain
their workforce.
- Announced integrations with H&R
Block and TurboTax®, allowing employees to electronically access
their W-2s directly from Asure in each respective tax preparation
software. This integration eliminates the need for employees to
manually enter their tax information, saving them time and reducing
the potential for errors. The convenience represents another
value-added employee benefit, which are becoming increasingly
important in today's competitive job market.
Management Commentary
“Our record-breaking fourth quarter and full
year results show that our solutions are resonating strongly with
customers across multiple segments” said Asure Chairman and CEO Pat
Goepel. “This past year has been marked with significant
achievements both financially and operationally. The launch of our
Asure Marketplace has helped us reach new highs in terms of revenue
generation while our consolidation and standardization efforts have
reined in costs, resulting in a fourth quarter gross margin of 72%,
a nearly 10% yearly improvement. Our partnerships in the industry
have also continued to grow, opening the door for longer-term
recurring revenue opportunities.
“From the product side, the enhancements we have
made to our software and services have been well-received by the
market and are producing the results we expected. Moving forward,
our focus remains on growing the Company’s customer base, suite of
services, and continuing our dual concentration on organic growth
and profitability. While we acknowledge the prospect of broader
macroeconomic volatility and recessionary concerns, we do so on the
back of recent strong performances within a similar environment. We
look forward to setting new benchmarks for revenue and adjusted
EBITDA in 2023 and remain well positioned to execute against our
long-term strategic growth initiatives.”
Asure Increases 2023 Guidance Ranges;
Introduces First Quarter 2023 Guidance
The Company is providing the following guidance
for the first quarter and full year 2023 based on fourth quarter
and full year 2022 results. Our guidance is offered with the
knowledge that there is a high level of economic uncertainty in
2023 due to recent inflationary trends and the potential for a
recession of unknown severity.
Updated Guidance for 2023
Guidance Range |
|
FY-2023 |
|
Q1-2023 |
Revenue |
$ |
105.0M - 107.0M |
$ |
29.0M - 30.0M |
Adjusted EBITDA |
|
15% - 17% |
$ |
6.0M - 6.5M |
Previous Guidance for 2023
Guidance Range |
|
FY-2023 |
Revenue |
$ |
98.0M - 102.0M |
Adjusted EBITDA |
|
14% - 16% |
Management uses GAAP, non-GAAP and adjusted
measures when planning, monitoring, and evaluating the Company’s
performance. The primary purpose of using non-GAAP and adjusted
measures are 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 and adjusted disclosures 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
adjusted financial measures, the provision of supplemental non-GAAP
and adjusted information can allow for a comparison of the
Company’s relative performance against other companies that also
report non-GAAP and adjusted operating results.
Management has not provided a reconciliation of
guidance of GAAP to non-GAAP or adjusted disclosures because
management is unable to predict the nature and materiality of
non-recurring expenses without unreasonable effort.
Management’s projections are based on
management’s current beliefs and assumptions about the Company's
business, and the industry and the markets in which it operates;
there are known and unknown risks and uncertainties associated with
these projections. There can be no assurance that our actual
results will not differ from the guidance set forth above. The
Company assumes no obligation to update publicly any
forward-looking statements, including its 2023 earnings guidance,
whether as a result of new information, future events or otherwise.
Please refer to the “Use of Forward-Looking Statements” disclosures
on page 4 of this press release.
Conference Call Details
Asure management will host a conference call
Monday, February 27, 2023 at 3:30 pm Central (at 4:30 pm
Eastern). Asure Chairman and CEO Pat Goepel and CFO John Pence will
participate in the conference call followed by a
question-and-answer session. A live webcast of the call will be
available on the “Investor Relations” page of the Company’s
website. To listen to the earnings call by phone, participants must
pre-register with information available on the Company’s
website.
About Asure Software, Inc.
Asure (Nasdaq: ASUR) is a leading provider of
Human Capital Management (“HCM”) software solutions. We help small
and mid-sized companies grow by assisting them in building better
teams with skills to stay compliant with ever-changing federal,
state, and local tax jurisdictions and labor laws, and better
allocate cash so they can spend their financial capital on growing
their business rather than back-office overhead expenses. Asure’s
Human Capital Management suite, named Asure HCM, includes
cloud-based Payroll, Tax Services, and Time & Attendance
software and Asure Marketplace as well as human resources (“HR”)
services ranging from HR projects to completely outsourcing payroll
and HR staff. We also offer these products and services through our
network of reseller partners. Visit us at asuresoftware.com.
Non-GAAP and Adjusted Financial
Measures
This press release includes information about
non-GAAP gross profit, non-GAAP sales and marketing expense,
non-GAAP general and administrative expense, non-GAAP research and
development expense, EBITDA, EBITDA margin, adjusted EBITDA, and
adjusted EBITDA margin, non-GAAP net income (loss) and non-GAAP net
income (loss) per share. These non-GAAP and adjusted 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 and adjusted 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 and adjusted financial measures are
reconciled to GAAP in the tables set forth in this release and are
subject to reclassifications to conform to current period
presentations.
This press release includes revisions to prior
periods to conform with current period presentations. Discretionary
one-time expenses have been removed from the Adjusted EBITDA
reconciliation, attributing to recent Company forecasting. Certain
one-time expenses, including, but not limited to, third-party
placement fees and extraordinary employee recognitions, have been
omitted from current and prior period presentations due to their
anticipated recurrence.
Non-GAAP gross profit differs from gross profit
in that it excludes amortization, share-based compensation, and
one-time items.
Non-GAAP sales and marketing expense differs
from sales and marketing expense in that it excludes share-based
compensation and one-time items.
Non-GAAP general and administrative expense
differs from general and administrative expense in that it excludes
share-based compensation and one-time items.
Non-GAAP research and development expense
differs from research and development expense in that it excludes
share-based compensation and one-time items.
EBITDA differs from net income (loss) in that it
excludes items such as interest, income taxes, depreciation, and
amortization. Asure is unable to predict with reasonable certainty
the ultimate outcome of these exclusions without unreasonable
effort.
Adjusted EBITDA differs from EBITDA in that it
excludes share-based compensation, other income (expense), net and
one-time expenses. Asure is unable to predict with reasonable
certainty the ultimate outcome of these exclusions without
unreasonable effort.
Non-GAAP net income (loss) per share differs
from net income (loss) per share in that it excludes items such as
amortization, share-based compensation, and one-time expenses, and
may use basic or diluted share counts in its computation, as
applicable.
All adjusted and non-GAAP measures presented as
“margin” are computed by dividing the applicable adjusted financial
measure by total revenue.
Specifically, as applicable to the respective
financial measure, management is adjusting for the following items
when calculating non-GAAP and adjusted financial measures as
applicable for the periods presented. No additional adjustments
have been made for potential income tax effects of the adjustments
based on the Company’s current and anticipated de minimis effective
federal tax rate, resulting from the Company’s continued losses for
federal tax purposes and its tax net operating loss balances.
Share-Based Compensation
Expenses. The Company’s compensation strategy includes the
use of share-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, share-based compensation expense varies
for reasons that are generally unrelated to operational decisions
and performance in any particular period.
Depreciation. The Company
excludes depreciation of fixed assets. Also included in the expense
is the depreciation of capitalized software costs.
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.
Interest Expense, Net. The
Company excludes accrued interest expense, the amortization of debt
discounts and deferred financing costs.
Income Taxes. The Company
excludes income taxes, both at the federal and state levels.
One-Time Expenses. The
Company’s adjusted financial measures exclude the following costs
to normalize comparable reporting periods, as these are generally
non-recurring expenses that do not reflect the ongoing operational
results. These items are typically not budgeted and are infrequent
and unusual in nature.
Settlements, Penalties and
Interest. The Company excludes legal settlements,
including separation agreements, penalties and interest that are
generally one-time in nature and not reflective of the operational
results of the business.
Acquisition and Transaction Related
Costs. The Company excludes these expenses as they are
transaction costs and expenses that are generally one-time in
nature and not reflective of the underlying operational results of
our business. Examples of these types of expenses include legal,
accounting, regulatory, other consulting services, severance and
other employee costs.
Other non-recurring Expenses.
The Company excludes these as they are generally non-recurring
items that are not reflective of the underlying operational results
of the business and are generally not anticipated to recur. Some
examples of these types of expenses, historically, have included
write-offs or impairments of assets, demolition of office space and
cybersecurity consultants.
Other (Expense) Income, Net.
The Company’s adjusted financial measures exclude Other (Expense)
Income, Net because it includes items that are not reflective of
the underlying operational results of the business, such as loan
forgiveness, adjustments to contingent liabilities and credits
earned as part of the CARES Act, passed by Congress in the wake of
the coronavirus pandemic.
Use of Forward-Looking
Statements
This press release contains forward-looking
statements about our financial results, which may include expected
or projected U.S GAAP and non-U.S. GAAP financial and other
operating and non-operating results, including, by way of example,
revenue, net income, diluted earnings per share, operating cash
flow growth, operating margin improvement, deferred revenue growth,
expected revenue run rate, bookings, expected tax rates,
stock-based compensation expenses, amortization of purchased
intangibles, amortization of debt discount and shares outstanding
and the provision of 2023 financial guidance. The achievement or
success of the matters covered by such forward-looking statements
involves risks, uncertainties and assumptions, over many of which
we have no control. 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 impact of the current environment; the spread of major
pandemics or epidemics; interruptions to supply chains and extended
shut down of businesses; political unrest, including the current
issues between Russia and Ukraine; reductions in employment and an
increase in business failures, specifically among its clients; 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;
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
changes to or applicability to our business of privacy and data
securities laws, money transmitter laws and anti-money laundering
laws; the financial and other impact of any previous and future
acquisitions; the nature of the Company’s business model; 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; 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;
regulatory pressures on economic relief enacted as a result of the
COVID-19 pandemic that change or cause different interpretations
with respect to eligibility for such programs, including the
employee retention tax credits; factors affecting the Company’s
term loan; fluctuations in the number of Company shares outstanding
and the price of such shares; interest rates; collection of
receivables; 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. Please
review the Company’s risk factors in its annual report on Form 10-K
filed with the Securities and Exchange Commission on February 27,
2023.
The forward-looking statements, including the
financial guidance and 2023 outlook, contained in this press
release represent the judgment of the Company as of the date of
this press release, and the Company expressly disclaims any intent,
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements to reflect any change
in the Company’s expectations with regard to these forward looking
statements or any change in events, conditions or circumstances on
which any such statements are based.
© 2023 Asure Software, Inc. All rights
reserved.
ASURE SOFTWARE,
INC.CONSOLIDATED BALANCE SHEETS(in
thousands)
|
December 31, 2022 |
|
December 31, 2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
17,010 |
|
|
$ |
13,427 |
|
Accounts receivable, net |
|
12,123 |
|
|
|
5,308 |
|
Inventory |
|
251 |
|
|
|
246 |
|
Prepaid expenses and other current assets |
|
10,304 |
|
|
|
13,475 |
|
Total current assets before funds held for clients |
|
39,688 |
|
|
|
32,456 |
|
Funds held for clients |
|
203,588 |
|
|
|
217,376 |
|
Total current assets |
|
243,276 |
|
|
|
249,832 |
|
Property and equipment, net |
|
11,439 |
|
|
|
8,945 |
|
Goodwill |
|
86,011 |
|
|
|
86,011 |
|
Intangible assets, net |
|
66,594 |
|
|
|
78,573 |
|
Operating lease assets, net |
|
7,065 |
|
|
|
5,748 |
|
Other assets, net |
|
5,523 |
|
|
|
4,136 |
|
Total assets |
$ |
419,908 |
|
|
$ |
433,245 |
|
LIABILITIES AND
STOCKHOLDERS’EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of notes payable |
$ |
4,106 |
|
|
$ |
1,907 |
|
Accounts payable |
|
2,194 |
|
|
|
565 |
|
Accrued compensation and benefits |
|
5,791 |
|
|
|
3,568 |
|
Operating lease liabilities, current |
|
1,860 |
|
|
|
1,551 |
|
Other accrued liabilities |
|
3,728 |
|
|
|
2,436 |
|
Contingent purchase consideration |
|
2,955 |
|
|
|
1,905 |
|
Deferred revenue |
|
8,461 |
|
|
|
3,750 |
|
Total current liabilities before client fund obligations |
|
29,095 |
|
|
|
15,682 |
|
Client fund obligations |
|
206,088 |
|
|
|
217,144 |
|
Total current liabilities |
|
235,183 |
|
|
|
232,826 |
|
Long-term liabilities: |
|
|
|
Deferred revenue |
|
788 |
|
|
|
36 |
|
Deferred tax liability |
|
1,503 |
|
|
|
1,595 |
|
Notes payable, net of current portion |
|
30,795 |
|
|
|
33,120 |
|
Operating lease liabilities, noncurrent |
|
6,459 |
|
|
|
4,746 |
|
Contingent purchase consideration |
|
— |
|
|
|
2,424 |
|
Other liabilities |
|
114 |
|
|
|
258 |
|
Total long-term liabilities |
|
39,659 |
|
|
|
42,179 |
|
Total liabilities |
|
274,842 |
|
|
|
275,005 |
|
Commitments |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
206 |
|
|
|
204 |
|
Treasury stock at cost |
|
(5,017 |
) |
|
|
(5,017 |
) |
Additional paid-in capital |
|
433,586 |
|
|
|
429,912 |
|
Accumulated deficit |
|
(281,226 |
) |
|
|
(266,760 |
) |
Accumulated other comprehensive income |
|
(2,483 |
) |
|
|
(99 |
) |
Total stockholders’ equity |
|
145,066 |
|
|
|
158,240 |
|
Total liabilities and stockholders’ equity |
$ |
419,908 |
|
|
$ |
433,245 |
|
ASURE SOFTWARE,
INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE
(LOSS) INCOME(in thousands, except per share amounts)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
Recurring |
$ |
24,146 |
|
|
$ |
19,390 |
|
|
$ |
86,222 |
|
|
$ |
71,078 |
|
Professional services, hardware and other |
|
5,146 |
|
|
|
1,723 |
|
|
|
9,606 |
|
|
|
4,986 |
|
Total revenue |
|
29,292 |
|
|
|
21,113 |
|
|
|
95,828 |
|
|
|
76,064 |
|
Cost of Sales |
|
8,153 |
|
|
|
7,854 |
|
|
|
33,318 |
|
|
|
29,500 |
|
Gross profit |
|
21,139 |
|
|
|
13,259 |
|
|
|
62,510 |
|
|
|
46,564 |
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
6,022 |
|
|
|
4,318 |
|
|
|
20,260 |
|
|
|
15,448 |
|
General and administrative |
|
9,720 |
|
|
|
7,396 |
|
|
|
33,924 |
|
|
|
27,720 |
|
Research and development |
|
1,627 |
|
|
|
1,438 |
|
|
|
6,147 |
|
|
|
5,410 |
|
Amortization of intangible assets |
|
3,352 |
|
|
|
3,358 |
|
|
|
13,486 |
|
|
|
10,948 |
|
Total operating expenses |
|
20,721 |
|
|
|
16,510 |
|
|
|
73,817 |
|
|
|
59,526 |
|
Income (Loss) from operations |
|
418 |
|
|
|
(3,251 |
) |
|
|
(11,307 |
) |
|
|
(12,962 |
) |
Interest expense, net |
|
(1,429 |
) |
|
|
(1,061 |
) |
|
|
(4,438 |
) |
|
|
(2,038 |
) |
Gain on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,312 |
|
Employee retention tax credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,533 |
|
Other (expense) income, net |
|
(139 |
) |
|
|
150 |
|
|
|
1,391 |
|
|
|
150 |
|
(Loss) Income from operations before income taxes |
|
(1,150 |
) |
|
|
(4,162 |
) |
|
|
(14,354 |
) |
|
|
3,995 |
|
Income tax (benefit) expense |
|
(94 |
) |
|
|
139 |
|
|
|
112 |
|
|
|
802 |
|
Net (loss) income |
|
(1,056 |
) |
|
|
(4,301 |
) |
|
|
(14,466 |
) |
|
|
3,193 |
|
Other comprehensive gain (loss): |
|
|
|
|
|
|
|
Unrealized gain (loss) on marketable securities |
|
418 |
|
|
|
(416 |
) |
|
|
(2,384 |
) |
|
|
(703 |
) |
Comprehensive (loss) income |
$ |
(638 |
) |
|
$ |
(4,717 |
) |
|
$ |
(16,850 |
) |
|
$ |
2,490 |
|
|
|
|
|
|
|
|
|
Basic and diluted (loss) earnings per share |
|
|
|
|
|
|
|
Basic |
$ |
(0.05 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.72 |
) |
|
$ |
0.17 |
|
Diluted |
$ |
(0.05 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.72 |
) |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
Weighted average basic and diluted shares |
|
|
|
|
|
|
|
Basic |
|
20,379 |
|
|
|
19,989 |
|
|
|
20,117 |
|
|
|
19,313 |
|
Diluted |
|
20,379 |
|
|
|
19,989 |
|
|
|
20,117 |
|
|
|
19,509 |
|
ASURE SOFTWARE,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(in thousands)
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
|
|
|
Net (loss) income |
$ |
(14,466 |
) |
|
$ |
3,193 |
|
Adjustments to reconcile (loss) income to net cash provided by
(used in) operations: |
|
|
|
Depreciation and amortization |
|
18,708 |
|
|
|
16,246 |
|
Amortization of operating lease assets |
|
1,702 |
|
|
|
1,574 |
|
Amortization of debt financing costs and discount |
|
718 |
|
|
|
309 |
|
Net amortization of premiums and accretion of discounts on
available-for-sale securities |
|
280 |
|
|
|
194 |
|
Provision for doubtful accounts |
|
803 |
|
|
|
1 |
|
(Recovery of) provision for deferred income taxes |
|
(92 |
) |
|
|
707 |
|
Gain on extinguishment of debt |
|
— |
|
|
|
(8,312 |
) |
Net realized gains on sales of available-for-sale securities |
|
(1,221 |
) |
|
|
(542 |
) |
Share-based compensation |
|
3,179 |
|
|
|
2,990 |
|
Loss (gain) on disposals of fixed assets |
|
25 |
|
|
|
(32 |
) |
Change in fair value of contingent purchase consideration |
|
(1,245 |
) |
|
|
(160 |
) |
Goodwill and intangible asset adjustment |
|
18 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(7,618 |
) |
|
|
(1,293 |
) |
Inventory |
|
(14 |
) |
|
|
142 |
|
Prepaid expenses and other assets |
|
2,993 |
|
|
|
(11,083 |
) |
Operating lease right-of-use assets |
|
(3,020 |
) |
|
|
(1,371 |
) |
Accounts payable |
|
1,611 |
|
|
|
(725 |
) |
Accrued expenses and other long-term obligations |
|
3,828 |
|
|
|
629 |
|
Operating lease liabilities |
|
2,023 |
|
|
|
(348 |
) |
Deferred revenue |
|
5,462 |
|
|
|
(741 |
) |
Net cash provided by operating activities |
|
13,674 |
|
|
|
1,378 |
|
Cash flows from investing activities: |
|
|
|
Acquisition of intangible asset |
|
(2,289 |
) |
|
|
(25,526 |
) |
Purchases of property and equipment |
|
(2,318 |
) |
|
|
(133 |
) |
Software capitalization costs |
|
(4,228 |
) |
|
|
(4,141 |
) |
Purchases of available-for-sale securities |
|
(37,232 |
) |
|
|
(29,051 |
) |
Proceeds from sales and maturities of available-for-sale
securities |
|
10,068 |
|
|
|
21,881 |
|
Net cash used in investing activities |
|
(35,999 |
) |
|
|
(36,970 |
) |
Cash flows from financing activities: |
|
|
|
Proceeds from notes payable |
|
— |
|
|
|
29,425 |
|
Payments of notes payable |
|
(1,688 |
) |
|
|
(14,657 |
) |
Payments of contingent purchase consideration |
|
(130 |
) |
|
|
(1,784 |
) |
Debt financing fees |
|
— |
|
|
|
(878 |
) |
Net proceeds from issuance of common stock |
|
497 |
|
|
|
678 |
|
Net change in client fund obligations |
|
(11,055 |
) |
|
|
(103,434 |
) |
Net cash used in financing activities |
|
(12,376 |
) |
|
|
(90,650 |
) |
Net decrease in cash and cash equivalents |
|
(34,701 |
) |
|
|
(126,242 |
) |
Cash and cash equivalents at beginning of period |
|
198,743 |
|
|
|
324,985 |
|
Cash and cash equivalents at end of period |
$ |
164,042 |
|
|
$ |
198,743 |
|
ASURE SOFTWARE,
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)(in thousands)
|
Year Ended December 31, |
|
|
2022 |
|
|
2021 |
|
Reconciliation of cash, cash equivalents, restricted cash, and
restricted cash equivalents to the Consolidated Balance Sheets |
Cash and cash equivalents |
$ |
17,010 |
|
$ |
13,427 |
Restricted cash and restricted cash equivalents included in funds
held for clients |
|
147,032 |
|
|
185,316 |
Total cash, cash equivalents, restricted cash, and restricted cash
equivalents |
$ |
164,042 |
|
$ |
198,743 |
|
|
|
|
Supplemental information: |
|
|
|
Cash paid for interest |
$ |
3,397 |
|
$ |
1,413 |
Cash paid for income taxes |
$ |
233 |
|
$ |
366 |
Net assets added from acquisitions |
$ |
— |
|
$ |
763 |
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
Contingent purchase consideration issued for acquisition |
$ |
— |
|
$ |
2,574 |
Notes payable issued for acquisitions |
$ |
411 |
|
$ |
4,386 |
Stock issuance for acquisitions |
$ |
— |
|
$ |
6,428 |
ASURE SOFTWARE,
INC.RECONCILIATION OF NON-GAAP AND ADJUSTED
FINANCIAL MEASURES(unaudited)
(in thousands) |
Q4-22 |
Q3-22 |
Q2-22 |
Q1-22 |
Q4-21 |
Q3-21 |
Q2-21 |
Q1-21 |
Revenue |
$ |
29,292 |
|
$ |
21,903 |
|
$ |
20,300 |
|
$ |
24,333 |
|
$ |
21,113 |
|
$ |
17,981 |
|
$ |
17,168 |
|
$ |
19,802 |
|
|
|
|
|
|
|
|
|
|
Gross Profit to non-GAAP Gross Profit |
Gross Profit |
$ |
21,139 |
|
$ |
13,647 |
|
$ |
12,261 |
|
$ |
15,464 |
|
$ |
13,259 |
|
$ |
10,868 |
|
$ |
9,945 |
|
$ |
12,492 |
|
Gross Margin |
|
72.2 |
% |
|
62.3 |
% |
|
60.4 |
% |
|
63.6 |
% |
|
62.8 |
% |
|
60.4 |
% |
|
57.9 |
% |
|
63.1 |
% |
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
34 |
|
|
38 |
|
|
35 |
|
|
36 |
|
|
46 |
|
|
45 |
|
|
38 |
|
|
23 |
|
Depreciation |
|
871 |
|
|
860 |
|
|
815 |
|
|
857 |
|
|
685 |
|
|
710 |
|
|
973 |
|
|
762 |
|
Amortization - intangibles |
|
298 |
|
|
296 |
|
|
296 |
|
|
296 |
|
|
354 |
|
|
379 |
|
|
379 |
|
|
379 |
|
One-time expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
3 |
|
|
38 |
|
|
— |
|
|
1 |
|
|
— |
|
|
2 |
|
|
9 |
|
|
5 |
|
Non-GAAP Gross Profit |
$ |
22,345 |
|
$ |
14,879 |
|
$ |
13,407 |
|
$ |
16,654 |
|
$ |
14,344 |
|
$ |
12,004 |
|
$ |
11,344 |
|
$ |
13,661 |
|
Non-GAAP Gross Margin |
|
76.3 |
% |
|
67.9 |
% |
|
66.0 |
% |
|
68.4 |
% |
|
67.9 |
% |
|
66.8 |
% |
|
66.1 |
% |
|
69.0 |
% |
|
|
|
|
|
|
|
|
|
Sales and Marketing Expense to non-GAAP Sales and Marketing
Expense |
Sales and Marketing Expense |
$ |
6,022 |
|
$ |
4,752 |
|
$ |
4,589 |
|
$ |
4,897 |
|
$ |
4,318 |
|
$ |
3,897 |
|
$ |
3,622 |
|
$ |
3,611 |
|
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
93 |
|
|
90 |
|
|
64 |
|
|
64 |
|
|
268 |
|
|
220 |
|
|
221 |
|
|
140 |
|
One-time expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
— |
|
|
— |
|
|
14 |
|
|
— |
|
|
— |
|
|
— |
|
|
16 |
|
|
24 |
|
Non-GAAP Sales and Marketing Expense |
$ |
5,929 |
|
$ |
4,662 |
|
$ |
4,511 |
|
$ |
4,833 |
|
$ |
4,050 |
|
$ |
3,677 |
|
$ |
3,385 |
|
$ |
3,447 |
|
|
|
|
|
|
|
|
|
|
General and Administrative Expense to non-GAAP General and
Administrative Expense |
General and Administrative Expense |
$ |
9,720 |
|
$ |
8,023 |
|
$ |
8,696 |
|
$ |
7,485 |
|
$ |
7,396 |
|
$ |
7,005 |
|
$ |
6,821 |
|
$ |
6,498 |
|
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
641 |
|
|
590 |
|
|
615 |
|
|
575 |
|
|
468 |
|
|
484 |
|
|
451 |
|
|
430 |
|
Depreciation |
|
168 |
|
|
149 |
|
|
154 |
|
|
170 |
|
|
161 |
|
|
159 |
|
|
159 |
|
|
190 |
|
One-time expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
34 |
|
|
15 |
|
|
283 |
|
|
59 |
|
|
93 |
|
|
369 |
|
|
320 |
|
|
161 |
|
Acquisition and transaction costs |
|
— |
|
|
— |
|
|
638 |
|
|
— |
|
|
34 |
|
|
151 |
|
|
7 |
|
|
14 |
|
Other non-recurring expenses |
|
— |
|
|
— |
|
|
58 |
|
|
49 |
|
|
63 |
|
|
75 |
|
|
— |
|
|
— |
|
Non-GAAP General and Administrative Expense |
$ |
8,877 |
|
$ |
7,269 |
|
$ |
6,948 |
|
$ |
6,632 |
|
$ |
6,577 |
|
$ |
5,767 |
|
$ |
5,884 |
|
$ |
5,703 |
|
|
|
|
|
|
|
|
|
|
Research and Development Expense to non-GAAP Research and
Development Expense |
Research and Development Expense |
$ |
1,627 |
|
$ |
1,230 |
|
$ |
1,472 |
|
$ |
1,821 |
|
$ |
1,438 |
|
$ |
1,505 |
|
$ |
1,343 |
|
$ |
1,124 |
|
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
70 |
|
|
80 |
|
|
100 |
|
|
54 |
|
|
39 |
|
|
35 |
|
|
50 |
|
|
33 |
|
Depreciation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3 |
|
|
4 |
|
|
4 |
|
One-time expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
25 |
|
|
3 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6 |
|
|
— |
|
Non-GAAP Research and Development Expense |
$ |
1,532 |
|
$ |
1,147 |
|
$ |
1,372 |
|
$ |
1,767 |
|
$ |
1,399 |
|
$ |
1,467 |
|
$ |
1,283 |
|
$ |
1,087 |
|
ASURE SOFTWARE,
INC.RECONCILIATION OF NON-GAAP AND ADJUSTED
FINANCIAL MEASURES (cont.)(unaudited)
(in thousands) |
Q4-22 |
Q3-22 |
Q2-22 |
Q1-22 |
Q4-21 |
Q3-21 |
Q2-21 |
Q1-21 |
Revenue |
$ |
29,292 |
|
$ |
21,903 |
|
$ |
20,300 |
|
$ |
24,333 |
|
$ |
21,113 |
|
$ |
17,981 |
|
$ |
17,168 |
|
$ |
19,802 |
|
|
|
|
|
|
|
|
|
|
GAAP Net (Loss) Income to Adjusted EBITDA |
GAAP Net (Loss) Income |
$ |
(1,056 |
) |
$ |
(4,533 |
) |
$ |
(5,860 |
) |
$ |
(3,017 |
) |
$ |
(4,301 |
) |
$ |
5,328 |
|
$ |
3,764 |
|
$ |
(1,598 |
) |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
1,429 |
|
|
1,122 |
|
|
1,068 |
|
|
816 |
|
|
1,061 |
|
|
530 |
|
|
223 |
|
|
224 |
|
Income taxes |
|
(94 |
) |
|
102 |
|
|
74 |
|
|
30 |
|
|
139 |
|
|
260 |
|
|
298 |
|
|
105 |
|
Depreciation |
|
1,039 |
|
|
1,009 |
|
|
969 |
|
|
1,027 |
|
|
846 |
|
|
872 |
|
|
1,136 |
|
|
956 |
|
Amortization - intangibles |
|
3,648 |
|
|
3,646 |
|
|
3,649 |
|
|
3,729 |
|
|
3,711 |
|
|
2,912 |
|
|
2,907 |
|
|
2,907 |
|
EBITDA |
$ |
4,966 |
|
$ |
1,346 |
|
$ |
(100 |
) |
$ |
2,585 |
|
$ |
1,456 |
|
$ |
9,902 |
|
$ |
8,328 |
|
$ |
2,594 |
|
EBITDA Margin |
|
17.0 |
% |
|
6.1 |
% |
(0.5)% |
|
10.6 |
% |
|
6.9 |
% |
|
55.1 |
% |
|
48.5 |
% |
|
13.1 |
% |
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
838 |
|
|
798 |
|
|
814 |
|
|
729 |
|
|
821 |
|
|
784 |
|
|
760 |
|
|
626 |
|
One Time Expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
62 |
|
|
56 |
|
|
297 |
|
|
60 |
|
|
93 |
|
|
371 |
|
|
351 |
|
|
190 |
|
Acquisition and transaction costs |
|
— |
|
|
— |
|
|
638 |
|
|
— |
|
|
34 |
|
|
151 |
|
|
7 |
|
|
14 |
|
Other non-recurring expenses |
|
— |
|
|
— |
|
|
58 |
|
|
49 |
|
|
63 |
|
|
75 |
|
|
— |
|
|
— |
|
Other (income) expense, net |
|
139 |
|
|
(399 |
) |
|
(1,130 |
) |
|
— |
|
|
(150 |
) |
|
(10,191 |
) |
|
(8,654 |
) |
|
— |
|
Adjusted EBITDA |
$ |
6,005 |
|
$ |
1,801 |
|
$ |
577 |
|
$ |
3,423 |
|
$ |
2,317 |
|
$ |
1,092 |
|
$ |
792 |
|
$ |
3,424 |
|
Adjusted EBITDA Margin |
|
20.5 |
% |
|
8.2 |
% |
|
2.8 |
% |
|
14.1 |
% |
|
11.0 |
% |
|
6.1 |
% |
|
4.6 |
% |
|
17.3 |
% |
ASURE SOFTWARE,
INC.RECONCILIATION OF NON-GAAP AND ADJUSTED
FINANCIAL MEASURES (cont.)(unaudited)
(in thousands) |
Q4-22 |
Q3-22 |
Q2-22 |
Q1-22 |
Q4-21 |
Q3-21 |
Q2-21 |
Q1-21 |
GAAP Net (Loss) Income to Non-GAAP Net (Loss)
Income |
GAAP Net (Loss) Income |
$ |
(1,056 |
) |
$ |
(4,533 |
) |
$ |
(5,860 |
) |
$ |
(3,017 |
) |
$ |
(4,301 |
) |
$ |
5,328 |
|
$ |
3,764 |
|
$ |
(1,598 |
) |
Share Count |
|
20,379 |
|
|
20,219 |
|
|
20,105 |
|
|
20,041 |
|
|
19,974 |
|
|
19,182 |
|
|
19,040 |
|
|
19,007 |
|
EPS |
$ |
(0.05 |
) |
$ |
(0.22 |
) |
$ |
(0.29 |
) |
$ |
(0.15 |
) |
$ |
(0.22 |
) |
$ |
0.28 |
|
$ |
0.20 |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
838 |
|
|
798 |
|
|
814 |
|
|
729 |
|
|
821 |
|
|
784 |
|
|
760 |
|
|
626 |
|
Amortization - intangibles |
|
3,648 |
|
|
3,646 |
|
|
3,649 |
|
|
3,729 |
|
|
3,711 |
|
|
2,912 |
|
|
2,907 |
|
|
2,907 |
|
One Time Expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
62 |
|
|
56 |
|
|
297 |
|
|
60 |
|
|
93 |
|
|
371 |
|
|
351 |
|
|
190 |
|
Acquisition and transaction costs |
|
— |
|
|
— |
|
|
638 |
|
|
— |
|
|
34 |
|
|
151 |
|
|
7 |
|
|
14 |
|
Other non-recurring expenses |
|
— |
|
|
— |
|
|
58 |
|
|
49 |
|
|
63 |
|
|
75 |
|
|
— |
|
|
— |
|
Other (income) expense, net |
|
139 |
|
|
(399 |
) |
|
(1,130 |
) |
|
— |
|
|
(150 |
) |
|
(10,191 |
) |
|
(8,654 |
) |
|
— |
|
Non-GAAP Net (Loss) Income |
$ |
3,631 |
|
$ |
(432 |
) |
$ |
(1,534 |
) |
$ |
1,550 |
|
$ |
271 |
|
$ |
(570 |
) |
$ |
(865 |
) |
$ |
2,139 |
|
Share Count |
|
21,134 |
|
|
20,219 |
|
|
20,105 |
|
|
20,201 |
|
|
20,133 |
|
|
19,182 |
|
|
19,040 |
|
|
19,200 |
|
Non-GAAP EPS |
$ |
0.17 |
|
$ |
(0.02 |
) |
$ |
(0.08 |
) |
$ |
0.08 |
|
$ |
0.01 |
|
$ |
(0.03 |
) |
$ |
(0.05 |
) |
$ |
0.11 |
|
Investor Relations Contact |
Randal Rudniski |
Vice President, Financial Planning & Analysis and Investor
Relations |
512-859-3562 |
randal.rudniski@asuresoftware.com |
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