Asure Software, Inc. (Nasdaq: ASUR), a leading
provider of cloud-based Human Capital Management (HCM) software
solutions, reported results for the third quarter ended
September 30, 2022.
Third Quarter 2022 Financial
Highlights
- Revenue of $21.9 million, up 22%
year-over-year
- Net loss of $4.5 million, compared
to net income of $5.3 million in the prior year period, which also
included a $10.5 million tax credit; non-GAAP net loss of $0.1
million versus a non-GAAP net loss of $0.4 million in the prior
year’s quarter
- EBITDA of $1.3 million, compared to
$9.9 million in the prior year period, which included a $10.5
million tax credit; Adjusted EBITDA was $2.1 million, from $1.2
million in the prior year period
- Total bookings were up 91%
year-over-year
Management Commentary
“Our strong third quarter results reflect the
strategic investments that we have made throughout 2022, including
increasing our sales force, enhancing our product suite, and
developing improved technology,” said Asure Chairman and CEO Pat
Goepel. “We believe that clients are increasingly recognizing the
value of our solutions, which have continued to improve in
functionality as our strategy to enhance automation and user
experience takes shape. In addition, our focus on areas of
differentiation, such as HR Compliance, our best-in-class tax
platform, and our newly introduced Integration Marketplace, is
anticipated to account for an increasing share of our revenue
moving forward. These efforts have resulted in reduced churn and
higher revenue from our current customer base over the prior year
period, and are expected to generate high-margin revenue streams
during the remainder of 2022 and into 2023.
“Client demand for our solutions has been
robust, as evidenced by the 91% year-over-year increase in new
sales bookings in the third quarter. Accordingly, we are raising
our fourth quarter revenue guidance, which now calls for
year-over-year growth of 11% to 14%, virtually all of which is
organic. We are also introducing preliminary 2023 financial
guidance for revenues of $98 to $102 million and adjusted EBITDA
margins of 14% to 16%. While we intend to continue to evaluate
potential acquisition targets in 2023, our guidance reflects our
expectation for performance on an organic basis at this time.
Looking ahead, we remain focused on our commitments to helping
small and mid-sized businesses get the most from their human
capital.”
|
Three Months Ended |
|
Nine Months Ended |
in thousands, except per share
data(unaudited) |
September 30, 2022 |
|
September 30, 2021 |
|
Variance |
|
September 30, 2022 |
|
September 30, 2021 |
|
Variance |
REVENUE |
$ |
21,903 |
|
|
$ |
17,981 |
|
|
21.8 |
% |
|
$ |
66,536 |
|
|
$ |
54,951 |
|
|
21.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT |
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
$ |
13,647 |
|
|
$ |
10,868 |
|
|
25.6 |
% |
|
$ |
41,372 |
|
|
$ |
33,305 |
|
|
24.2 |
% |
Gross Margin |
|
62.3 |
% |
|
|
60.4 |
% |
|
n/a |
|
|
62.0 |
% |
|
|
60.6 |
% |
|
n/a |
Non-GAAP Gross Profit |
$ |
14,841 |
|
|
$ |
12,002 |
|
|
23.7 |
% |
|
$ |
44,901 |
|
|
$ |
36,993 |
|
|
21.4 |
% |
Non-GAAP Gross Margin |
|
67.8 |
% |
|
|
66.7 |
% |
|
n/a |
|
|
67.5 |
% |
|
|
67.3 |
% |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(4,533 |
) |
|
$ |
5,328 |
|
|
NM |
|
$ |
(13,410 |
) |
|
$ |
7,494 |
|
|
NM |
Net income (loss) Margin |
|
(20.7 |
)% |
|
|
29.6 |
% |
|
n/a |
|
|
(20.2 |
)% |
|
|
13.6 |
% |
|
n/a |
Net income (loss) per share |
$ |
(0.22 |
) |
|
$ |
0.28 |
|
|
NM |
|
$ |
(0.67 |
) |
|
$ |
0.39 |
|
|
NM |
Non-GAAP Net income (loss) |
$ |
(134 |
) |
|
$ |
(434 |
) |
|
NM |
|
$ |
1,230 |
|
|
$ |
1,334 |
|
|
(7.8 |
)% |
Non-GAAP Net income (loss) Margin |
|
(0.6 |
)% |
|
|
(2.4 |
)% |
|
n/a |
|
|
1.8 |
% |
|
|
2.4 |
% |
|
n/a |
Non-GAAP Net income (loss) per share |
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
NM |
|
$ |
0.06 |
|
|
$ |
0.07 |
|
|
(14.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
$ |
1,346 |
|
|
$ |
9,902 |
|
|
NM |
|
$ |
3,831 |
|
|
$ |
20,824 |
|
|
NM |
EBITDA Margin |
|
6.1 |
% |
|
|
55.1 |
% |
|
n/a |
|
|
5.8 |
% |
|
|
37.9 |
% |
|
n/a |
Adjusted EBITDA |
$ |
2,099 |
|
|
$ |
1,228 |
|
|
70.9 |
% |
|
$ |
7,447 |
|
|
$ |
5,938 |
|
|
25.4 |
% |
Adjusted EBITDA Margin |
|
9.6 |
% |
|
|
6.8 |
% |
|
n/a |
|
|
11.2 |
% |
|
|
10.8 |
% |
|
n/a |
- NM indicates Not Meaningful
Information
- Non-GAAP and adjusted financial
measures are reconciled to GAAP in the tables set forth in this
release
Financial Commentary
“Asure’s third quarter results showed strong
double-digit revenue growth of 22% year-over-year with organic
revenues beginning to accelerate as anticipated,” said CFO, John
Pence. “Net loss was $4.5 million, a margin of (21)%, compared to
net income of $5.3 million in the prior period, or a margin of 30%,
a decline of 185% relative to the prior year, as last year’s
results included a $10.5 million gain related to ERTC credits.
EBITDA declined to $1.3 million relative to the prior year’s $9.9
million for the same reason. Adjusted EBITDA, which excludes the
tax credits, rose 71% relative to the prior year to $2.1 million
and adjusted EBITDA margin rose 280 basis points to 9.6%.
“Our revenue guidance for the remainder of 2022
and 2023 contemplates strong momentum with HR Compliance, tax
processing solutions, contribution from revenue streams stemming
from new uses of our installed user’s data in the Integration
Marketplace, and higher investment revenues due to rising interest
rates and larger investible balances. Adjusted EBITDA is expected
to benefit from the additional scale generated by this incremental
revenue growth and the impact of the many efficiency initiatives we
currently have underway.”
Recent Business Highlights
Asure and Equifax Align to Deliver Integrated
Verifications of Employment and Income
- Asure and Equifax® (NYSE: EFX), a
global data, analytics and technology company, announced a new
integration that makes The Work Number from Equifax available to
Asure direct customers and reseller partners. The integration is
designed to provide Asure clients and their employees the benefits
of quicker, more secure verifications of employment and income from
The Work Number within their existing core HCM technology
stacks.
- “Equifax brings deep expertise in
verification services, and through our integration with The Work
Number, we’re delivering significant benefits to our 80,000 small
business customers and reseller partners and their employees,” said
Pat Goepel, Chairman and CEO of Asure. “Employers will no longer
have to spend time manually responding to verification requests,
and their employees will have access to instant, more seamless
verifications in support of important life events.”
- Joe Muchnick, Senior Vice President
of Employer Services and Talent Solutions at Equifax Workforce
Solutions, added, “Equifax and Asure are both dedicated to
deploying technology that helps fuel the growth of our respective
clients. We’re pleased that this new integration supports enhanced
HCM functionality among any sized employer or payroll provider by
delivering the benefits of faster, more secure verifications
through The Work Number from Equifax.”
Asure Expands Tax Filing Capabilities Allowing CPA Firms
and Tax Professionals to Scale in Response to Surging ERTC
Demand
- Developed and implemented a new
technology that automates back-office processes for CPAs and tax
professionals to calculate and prepare amended tax returns for
small businesses claiming ERTC stimulus. Through collaboration with
Asure’s CPA partners, the company has designed technology that
automates the back-office transactional processes of calculating
compliant tax credits and filing the necessary quarterly amended
tax returns for their clients to get ERTC stimulus credits.
- “At Asure, we’re always seeking new
ways for technology to support small businesses and the
organizations that serve them. Our CPA partners were telling us
they couldn’t keep pace with the volume of administrative work
associated with ERTC demand. Our technology automates the
back-office ERTC work so they can focus on high-value client work,”
said Pat Goepel, Chairman and CEO of Asure. “We’re excited about
this new technology’s ability to help drive organic growth as it
allows us to serve even more payroll and non-payroll clients
alike.”
Asure Expands and Streamlines 401(k) Plan Options for
Small Employers with 80+ Provider Integrations and New
Partnership
- Asure payroll systems now feature
direct integration with more than 80 401(k) providers. The time and
expense required to maintain traditional options for providing
employer-sponsored 401(k) plans have been a longtime barrier to
entry for smaller employers. Asure is actively removing that
barrier by making 401(k) plan delivery easier and more accessible
for organizations with limited resources. Asure’s established
integrations enable employers to sync their Asure payroll system
and their 401(k) data to streamline enrollment, eliminate dual
entry, and remain compliant.
- “In today’s job market, prospective
employees have high expectations, even from smaller organizations.
Making it easy to offer 401(k) options for retirement savings is
just one way that Asure is empowering our customers to be more
competitive, while also removing administrative burdens,” said Pat
Goepel, Chairman and CEO of Asure.
Asure Announces Integration with PrismHR
to Deliver Payroll Tax Filing System and Services to PEO and ASO
Markets
- Announced an agreement to be a
preferred provider of payroll tax filing software and services for
PrismHR, a leading provider of HR solutions for PEOs, ASOs and
their clients. The agreement includes integration between Asure’s
FlexTax payroll tax filing engine and PrismHR’s payroll system,
currently in use by more than 80,000 organizations. It also
provides PrismHR customers access to Asure’s Payroll Tax Management
Services, a flexible suite of options that enable customers to
outsource payroll tax filing according to their needs and budget,
with the ability to scale and adapt to other service plans as their
needs change—without changing platforms.
- “This new partnership provides an
opportunity to significantly expand our payroll tax business into
the PEO and ASO markets, while enabling PrismHR to provide an
alternative, standalone tax filing solution that complements their
existing HR portfolio,” said Pat Goepel, Chairman, and CEO of
Asure. “Our deep expertise in the complex landscape of payroll
taxes uniquely positions Asure to deliver not only a user-friendly
software solution to PrismHR’s customers, but also the experienced
counsel and support of a knowledgeable team of payroll tax
experts.”
Fourth Quarter 2022 and Full Year 2023
Guidance
The Company is providing the following guidance
for the fourth quarter and full year 2022 as well as fiscal year
2023 based on third quarter results and its preliminary business
outlook for 2023. 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.
|
Guidance Range |
|
Q4-2022 |
|
2022 |
|
Revenue |
$ |
23.5M - 24.0M |
$ |
90.0M - 90.5M |
|
Adjusted EBITDA |
$ |
3.0M - 3.5M |
$ |
10.5M - 11.0M |
|
Non-GAAP EPS |
$ |
(0.01) - 0.01 |
$ |
0.05 - 0.07 |
|
Guidance Range |
|
2023 |
|
|
Revenue |
$ |
98.0M - 102.0M |
|
|
Adjusted EBITDA Margin |
|
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.
Conference Call Details
Asure management will host a conference call
Monday, November 7, 2022 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.
About Asure Software, Inc.
Asure (Nasdaq: ASUR) is a leading provider of
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 as well as 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
bookings, non-GAAP gross profit, non-GAAP net income (loss),
non-GAAP net income (loss) per share, EBITDA, EBITDA margin,
adjusted EBITDA, and adjusted EBITDA margin. 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.
Bookings represent estimated new first year
contracted revenue value for recurring and non-recurring services
sold in the period.
Non-GAAP gross profit differs from gross profit
in that it excludes amortization, share-based compensation, and
one-time items.
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.
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
non-recurring expenses. Asure is unable to predict with reasonable
certainty the ultimate outcome of these exclusions without
unreasonable effort.
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, costs related to third-party
placement fees, extraordinary employee recognition, demolition of
office space, data retention and cybersecurity consultants.
Other Income, Net. The
Company’s adjusted financial measures exclude Other 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.
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 (including COVID-19), interruptions to
supply chains and extended shut down of businesses,
political unrest, including the current issues between Russian
and Ukraine, reductions in employment and an increase in business
failures, specifically among our 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, 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; 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;
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 March 14, 2022.
The forward-looking statements, including the
financial guidance and 2022 and 2023 outlook, contained herein
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 thereto or any change in events,
conditions or circumstances on which any such statements are
based.
© 2022 Asure Software, Inc. All rights reserved.
ASURE SOFTWARE,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands)
|
September 30, 2022 |
|
December 31, 2021 |
|
ASSETS |
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
10,885 |
|
|
$ |
13,427 |
|
Accounts receivable, net |
|
6,821 |
|
|
|
5,308 |
|
Inventory |
|
323 |
|
|
|
246 |
|
Prepaid expenses and other current assets |
|
10,658 |
|
|
|
13,475 |
|
Total current assets before funds held for clients |
|
28,687 |
|
|
|
32,456 |
|
Funds held for clients |
|
181,969 |
|
|
|
217,273 |
|
Total current assets |
|
210,656 |
|
|
|
249,729 |
|
Property and equipment,
net |
|
11,364 |
|
|
|
8,945 |
|
Goodwill |
|
86,011 |
|
|
|
86,011 |
|
Intangible assets, net |
|
70,238 |
|
|
|
78,573 |
|
Operating lease assets,
net |
|
7,969 |
|
|
|
5,748 |
|
Other assets, net |
|
4,886 |
|
|
|
4,136 |
|
Total assets |
$ |
391,124 |
|
|
$ |
433,142 |
|
LIABILITIES AND
STOCKHOLDERS’EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of notes payable |
$ |
3,064 |
|
|
$ |
1,907 |
|
Accounts payable |
|
1,322 |
|
|
|
565 |
|
Accrued compensation and benefits |
|
4,179 |
|
|
|
3,568 |
|
Operating lease liabilities, current |
|
1,686 |
|
|
|
1,551 |
|
Other accrued liabilities |
|
4,137 |
|
|
|
2,333 |
|
Contingent purchase consideration |
|
2,299 |
|
|
|
1,905 |
|
Deferred revenue |
|
4,173 |
|
|
|
3,750 |
|
Total current liabilities
before client fund obligations |
|
20,860 |
|
|
|
15,579 |
|
Client fund obligations |
|
184,617 |
|
|
|
217,144 |
|
Total current liabilities |
|
205,477 |
|
|
|
232,723 |
|
Long-term liabilities: |
|
|
|
Deferred revenue |
|
252 |
|
|
|
36 |
|
Deferred tax liability |
|
1,758 |
|
|
|
1,595 |
|
Notes payable, net of current portion |
|
31,367 |
|
|
|
33,120 |
|
Operating lease liabilities, noncurrent |
|
6,908 |
|
|
|
4,746 |
|
Contingent purchase consideration |
|
670 |
|
|
|
2,424 |
|
Other liabilities |
|
130 |
|
|
|
258 |
|
Total long-term
liabilities |
|
41,085 |
|
|
|
42,179 |
|
Total liabilities |
|
246,562 |
|
|
|
274,902 |
|
Commitments |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
205 |
|
|
|
204 |
|
Treasury stock at cost |
|
(5,017 |
) |
|
|
(5,017 |
) |
Additional paid-in capital |
|
432,445 |
|
|
|
429,912 |
|
Accumulated deficit |
|
(280,170 |
) |
|
|
(266,760 |
) |
Accumulated other comprehensive income |
|
(2,901 |
) |
|
|
(99 |
) |
Total stockholders’
equity |
|
144,562 |
|
|
|
158,240 |
|
Total liabilities and
stockholders’ equity |
$ |
391,124 |
|
|
$ |
433,142 |
|
|
ASURE SOFTWARE,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE (LOSS) INCOME(in thousands, except per share
amounts)
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
(unaudited) |
|
(unaudited) |
Revenue: |
|
|
|
|
|
|
|
Recurring |
$ |
19,959 |
|
|
$ |
16,374 |
|
|
$ |
61,977 |
|
|
$ |
51,688 |
|
Professional services, hardware and other |
|
1,944 |
|
|
|
1,607 |
|
|
|
4,559 |
|
|
|
3,263 |
|
Total revenue |
|
21,903 |
|
|
|
17,981 |
|
|
|
66,536 |
|
|
|
54,951 |
|
Cost of Sales |
|
8,256 |
|
|
|
7,113 |
|
|
|
25,164 |
|
|
|
21,646 |
|
Gross profit |
|
13,647 |
|
|
|
10,868 |
|
|
|
41,372 |
|
|
|
33,305 |
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
4,752 |
|
|
|
3,897 |
|
|
|
14,238 |
|
|
|
11,130 |
|
General and administrative |
|
8,023 |
|
|
|
7,005 |
|
|
|
24,204 |
|
|
|
20,324 |
|
Research and development |
|
1,230 |
|
|
|
1,505 |
|
|
|
4,523 |
|
|
|
3,972 |
|
Amortization of intangible assets |
|
3,350 |
|
|
|
2,534 |
|
|
|
10,134 |
|
|
|
7,590 |
|
Total operating expenses |
|
17,355 |
|
|
|
14,941 |
|
|
|
53,099 |
|
|
|
43,016 |
|
Loss from operations |
|
(3,708 |
) |
|
|
(4,073 |
) |
|
|
(11,727 |
) |
|
|
(9,711 |
) |
Interest expense, net |
|
(1,122 |
) |
|
|
(530 |
) |
|
|
(3,006 |
) |
|
|
(977 |
) |
(Loss) gain on extinguishment of debt |
|
— |
|
|
|
(342 |
) |
|
|
180 |
|
|
|
8,312 |
|
Employee retention tax credit |
|
— |
|
|
|
10,533 |
|
|
|
— |
|
|
|
10,533 |
|
Other income, net |
|
399 |
|
|
|
— |
|
|
|
1,349 |
|
|
|
— |
|
(Loss) Income from operations
before income taxes |
|
(4,431 |
) |
|
|
5,588 |
|
|
|
(13,204 |
) |
|
|
8,157 |
|
Income tax expense |
|
102 |
|
|
|
260 |
|
|
|
206 |
|
|
|
663 |
|
Net (loss) income |
|
(4,533 |
) |
|
|
5,328 |
|
|
|
(13,410 |
) |
|
|
7,494 |
|
Other comprehensive loss: |
|
|
|
|
|
|
|
Unrealized loss on marketable securities |
|
(1,243 |
) |
|
|
(79 |
) |
|
|
(2,802 |
) |
|
|
(287 |
) |
Comprehensive (loss)
income |
$ |
(5,776 |
) |
|
$ |
5,249 |
|
|
$ |
(16,212 |
) |
|
$ |
7,207 |
|
|
|
|
|
|
|
|
|
Basic and diluted (loss)
earnings per share |
|
|
|
|
|
|
|
Basic |
$ |
(0.22 |
) |
|
$ |
0.28 |
|
|
$ |
(0.67 |
) |
|
$ |
0.39 |
|
Diluted |
$ |
(0.22 |
) |
|
$ |
0.28 |
|
|
$ |
(0.67 |
) |
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
Weighted average basic and
diluted shares |
|
|
|
|
|
|
|
Basic |
|
20,219 |
|
|
|
19,182 |
|
|
|
20,092 |
|
|
|
19,083 |
|
Diluted |
|
20,219 |
|
|
|
19,330 |
|
|
|
20,092 |
|
|
|
19,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASURE SOFTWARE,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(in thousands)
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
(unaudited) |
Cash flows from operating
activities: |
|
|
|
Net (loss) income |
$ |
(13,410 |
) |
|
$ |
7,494 |
|
Adjustments to reconcile (loss) income to net cash provided by
(used in) operations: |
|
|
|
Depreciation and amortization |
|
14,018 |
|
|
|
11,690 |
|
Amortization of operating lease assets |
|
1,268 |
|
|
|
1,146 |
|
Amortization of debt financing costs and discount |
|
531 |
|
|
|
117 |
|
Net amortization of premiums and accretion of discounts on
available-for-sale securities |
|
279 |
|
|
|
123 |
|
Provision for doubtful accounts |
|
304 |
|
|
|
1 |
|
Provision for deferred income taxes |
|
163 |
|
|
|
559 |
|
Gain on extinguishment of debt |
|
(180 |
) |
|
|
(8,312 |
) |
Net realized gains on sales of available-for-sale securities |
|
(808 |
) |
|
|
(390 |
) |
Share-based compensation |
|
2,341 |
|
|
|
2,124 |
|
Loss (gain) on disposals of fixed assets |
|
1 |
|
|
|
(32 |
) |
Change in fair value of contingent purchase consideration |
|
(1,350 |
) |
|
|
(191 |
) |
Adjustment to intangibles |
|
23 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(1,816 |
) |
|
|
(536 |
) |
Inventory |
|
(85 |
) |
|
|
85 |
|
Prepaid expenses and other assets |
|
2,855 |
|
|
|
(10,916 |
) |
Operating lease right-of-use assets |
|
(3,489 |
) |
|
|
(1,368 |
) |
Accounts payable |
|
738 |
|
|
|
11 |
|
Accrued expenses and other long-term obligations |
|
2,637 |
|
|
|
111 |
|
Operating lease liabilities |
|
2,298 |
|
|
|
116 |
|
Deferred revenue |
|
639 |
|
|
|
(2,976 |
) |
Net cash provided by (used in) operating activities |
|
6,957 |
|
|
|
(1,144 |
) |
Cash flows from investing
activities: |
|
|
|
Acquisition of intangible asset |
|
(2,289 |
) |
|
|
(25,526 |
) |
Purchases of property and equipment |
|
(2,188 |
) |
|
|
(100 |
) |
Software capitalization costs |
|
(3,219 |
) |
|
|
(3,152 |
) |
Purchases of available-for-sale securities |
|
(33,454 |
) |
|
|
(695 |
) |
Proceeds from sales and maturities of available-for-sale
securities |
|
7,159 |
|
|
|
8,431 |
|
Net cash (used in) provided by
investing activities |
|
(33,991 |
) |
|
|
(21,042 |
) |
Cash flows from financing
activities: |
|
|
|
Proceeds from notes payable |
|
— |
|
|
|
29,425 |
|
Payments of notes payable |
|
(1,688 |
) |
|
|
(15,073 |
) |
Payments of contingent purchase consideration |
|
(9 |
) |
|
|
(1,784 |
) |
Debt financing fees |
|
— |
|
|
|
(878 |
) |
Net proceeds from issuance of common stock |
|
192 |
|
|
|
526 |
|
Net change in client fund obligations |
|
(32,527 |
) |
|
|
(146,206 |
) |
Net cash used in financing
activities |
|
(34,032 |
) |
|
|
(133,990 |
) |
Net decrease in cash and cash
equivalents |
|
(61,066 |
) |
|
|
(156,176 |
) |
Cash and cash equivalents at
beginning of period |
|
198,641 |
|
|
|
324,985 |
|
Cash and cash equivalents at
end of period |
$ |
137,575 |
|
|
$ |
168,809 |
|
|
ASURE SOFTWARE,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (continued)(in thousands)
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
(unaudited) |
Reconciliation of
cash, cash equivalents, restricted cash, and restricted cash
equivalents to the Condensed Consolidated Balance Sheets |
Cash and cash equivalents |
$ |
10,885 |
|
$ |
11,506 |
Restricted cash and restricted cash equivalents included in funds
held for clients |
|
126,690 |
|
|
157,303 |
Total cash, cash equivalents,
restricted cash, and restricted cash equivalents |
$ |
137,575 |
|
$ |
168,809 |
|
|
|
|
Supplemental information: |
|
|
|
Cash paid for interest |
$ |
2,247 |
|
$ |
722 |
Cash paid for income taxes |
$ |
246 |
|
$ |
332 |
Net assets added from acquisitions |
$ |
— |
|
$ |
763 |
|
|
|
|
Non-cash investing and
financing activities: |
|
|
|
Contingent purchase consideration issued for acquisition |
$ |
— |
|
$ |
3,038 |
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(in thousands, except per share
amounts)
|
Q3-22 |
Q2-22 |
Q1-22 |
Q4-21 |
Q3-21 |
Q2-21 |
Q1-21 |
|
|
|
|
|
|
|
|
Revenue |
$ |
21,903 |
|
$ |
20,300 |
|
$ |
24,333 |
|
$ |
21,113 |
|
$ |
17,981 |
|
$ |
17,168 |
|
$ |
19,802 |
|
|
|
|
|
|
|
|
|
Gross Profit
to non-GAAP Gross Profit |
|
Gross
Profit |
$ |
13,647 |
|
$ |
12,261 |
|
$ |
15,464 |
|
$ |
13,259 |
|
$ |
10,868 |
|
$ |
9,945 |
|
$ |
12,492 |
|
Gross Margin |
|
62.3 |
% |
|
60.4 |
% |
|
63.6 |
% |
|
62.8 |
% |
|
60.4 |
% |
|
57.9 |
% |
|
63.1 |
% |
|
|
|
|
|
|
|
|
Share-based Compensation |
|
38 |
|
|
35 |
|
|
36 |
|
|
46 |
|
|
45 |
|
|
38 |
|
|
23 |
|
Depreciation |
|
860 |
|
|
815 |
|
|
857 |
|
|
685 |
|
|
710 |
|
|
973 |
|
|
762 |
|
Amortization - intangibles |
|
296 |
|
|
296 |
|
|
296 |
|
|
354 |
|
|
379 |
|
|
379 |
|
|
379 |
|
Non-GAAP Gross
Profit |
$ |
14,841 |
|
$ |
13,407 |
|
$ |
16,653 |
|
$ |
14,344 |
|
$ |
12,002 |
|
$ |
11,335 |
|
$ |
13,656 |
|
Non-GAAP Gross Margin |
|
67.8 |
% |
|
66.0 |
% |
|
68.4 |
% |
|
67.9 |
% |
|
66.7 |
% |
|
66.0 |
% |
|
69.0 |
% |
|
|
|
|
|
|
|
|
Net (loss)
income to non-GAAP net (loss) income |
Net (loss)
income |
$ |
(4,533 |
) |
$ |
(5,860 |
) |
$ |
(3,017 |
) |
$ |
(4,301 |
) |
$ |
5,328 |
|
$ |
3,764 |
|
$ |
(1,598 |
) |
Share Count |
|
20,219 |
|
|
20,105 |
|
|
20,041 |
|
|
19,974 |
|
|
19,182 |
|
|
19,040 |
|
|
19,007 |
|
EPS |
$ |
(0.22 |
) |
$ |
(0.29 |
) |
$ |
(0.15 |
) |
$ |
(0.22 |
) |
$ |
0.28 |
|
$ |
0.20 |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
Share-based Compensation |
|
798 |
|
|
814 |
|
|
729 |
|
|
821 |
|
|
784 |
|
|
760 |
|
|
626 |
|
Amortization - intangibles |
|
3,646 |
|
|
3,649 |
|
|
3,729 |
|
|
3,711 |
|
|
2,912 |
|
|
2,907 |
|
|
2,907 |
|
One-time expenses |
|
|
|
|
|
|
|
Settlements, penalties and interest |
|
56 |
|
|
298 |
|
|
138 |
|
|
93 |
|
|
441 |
|
|
401 |
|
|
188 |
|
Acquisition and transaction costs |
|
— |
|
|
637 |
|
|
85 |
|
|
35 |
|
|
151 |
|
|
7 |
|
|
14 |
|
Other non-recurring expenses |
|
298 |
|
|
793 |
|
|
499 |
|
|
150 |
|
|
141 |
|
|
446 |
|
|
— |
|
Other income, net |
|
(399 |
) |
|
(1,130 |
) |
|
— |
|
|
(150 |
) |
|
(10,191 |
) |
|
(8,654 |
) |
|
— |
|
Non-GAAP net (loss)
income |
$ |
(134 |
) |
$ |
(799 |
) |
$ |
2,163 |
|
$ |
359 |
|
$ |
(434 |
) |
$ |
(369 |
) |
$ |
2,137 |
|
Share Count |
|
20,219 |
|
|
20,105 |
|
|
20,201 |
|
|
20,133 |
|
|
19,182 |
|
|
19,040 |
|
|
19,200 |
|
Non-GAAP
EPS |
$ |
(0.01 |
) |
$ |
(0.04 |
) |
$ |
0.11 |
|
$ |
0.02 |
|
$ |
(0.02 |
) |
$ |
(0.02 |
) |
$ |
0.11 |
|
|
|
|
|
|
|
|
|
Net income
(loss) to Adjusted EBITDA |
Net income
(loss) |
$ |
(4,533 |
) |
$ |
(5,860 |
) |
$ |
(3,017 |
) |
$ |
(4,301 |
) |
$ |
5,328 |
|
$ |
3,764 |
|
$ |
(1,598 |
) |
Interest expense, net |
|
1,122 |
|
|
1,068 |
|
|
816 |
|
|
1,061 |
|
|
530 |
|
|
223 |
|
|
224 |
|
Income taxes |
|
102 |
|
|
74 |
|
|
30 |
|
|
139 |
|
|
260 |
|
|
298 |
|
|
105 |
|
Depreciation |
|
1,009 |
|
|
969 |
|
|
1,027 |
|
|
846 |
|
|
872 |
|
|
1,136 |
|
|
956 |
|
Amortization - intangibles |
|
3,646 |
|
|
3,649 |
|
|
3,729 |
|
|
3,711 |
|
|
2,912 |
|
|
2,907 |
|
|
2,907 |
|
EBITDA |
$ |
1,346 |
|
$ |
(100 |
) |
$ |
2,585 |
|
$ |
1,456 |
|
$ |
9,902 |
|
$ |
8,328 |
|
$ |
2,594 |
|
EBITDA Margin |
|
6.1 |
% |
(0.5)% |
|
10.6 |
% |
|
6.9 |
% |
|
55.1 |
% |
|
48.5 |
% |
|
13.1 |
% |
|
|
|
|
|
|
|
|
Share-based Compensation |
|
798 |
|
|
814 |
|
|
729 |
|
|
821 |
|
|
784 |
|
|
760 |
|
|
626 |
|
One Time Expenses |
|
|
|
|
|
|
|
Settlements, penalties and interest |
|
56 |
|
|
298 |
|
|
138 |
|
|
93 |
|
|
441 |
|
|
401 |
|
|
188 |
|
Acquisition and transaction costs |
|
— |
|
|
637 |
|
|
85 |
|
|
35 |
|
|
151 |
|
|
7 |
|
|
14 |
|
Other non-recurring expenses |
|
298 |
|
|
793 |
|
|
499 |
|
|
150 |
|
|
141 |
|
|
446 |
|
|
— |
|
Other income, net |
|
(399 |
) |
|
(1,130 |
) |
|
— |
|
|
(150 |
) |
|
(10,191 |
) |
|
(8,654 |
) |
|
— |
|
Adjusted
EBITDA |
$ |
2,099 |
|
$ |
1,312 |
|
$ |
4,036 |
|
$ |
2,405 |
|
$ |
1,228 |
|
$ |
1,288 |
|
$ |
3,422 |
|
Adjusted EBITDA Margin |
|
9.6 |
% |
|
6.5 |
% |
|
16.6 |
% |
|
11.4 |
% |
|
6.8 |
% |
|
7.5 |
% |
|
17.3 |
% |
Investor Relations
Contact |
Randal Rudniski |
Vice President, Financial
Planning & Analysis |
512-859-3562 |
randal.rudniski@asuresoftware.com |
Asure Software (NASDAQ:ASUR)
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From Mar 2024 to Apr 2024
Asure Software (NASDAQ:ASUR)
Historical Stock Chart
From Apr 2023 to Apr 2024