In a release issued under the same headline earlier today by Asure
Software, Inc (Nasdaq: ASUR) please note that in the Guidance
for 2024, the revenue should be 125.0M - 129.0M,
not 125.0M - 127.0M as previously stated. The corrected
release follows:
Asure Software, Inc. (“we”, “us”, “our”, “Asure”
or the “Company”) (Nasdaq: ASUR), a leading
provider of cloud-based Human Capital Management (“HCM”) software
solutions, today reported results for the Company’s third quarter
ended September 30, 2023.
Third Quarter 2023 Financial
Highlights
- Revenue of $29.3 million, up 34%
from prior-year third quarter
- Recurring revenue of $23.8 million,
up 19% from prior-year third quarter
- Net loss of $2.2 million, a $2.3
million improvement from prior-year third quarter
- EBITDA(1) of $3.0 million, up $1.7
million from prior-year third quarter
- Adjusted EBITDA(1) of $6.2 million,
up $4.4 million from prior-year third quarter
- Gross profit of $21.3 million, up
56% from prior-year third quarter
- Non-GAAP gross profit(1) of $22.3
million (Non-GAAP gross margin(1) of 76%) versus $14.8 million and
68% in prior-year third quarter
Recent Business Highlights
- Completed an equity offering of
3,333,333 shares of our common stock, along with the exercise of
the underwriters’ over-allotment option for an additional 500,000
shares which resulted in net proceeds, after underwriting discounts
and offering expenses, for Asure of an aggregate of approximately
$43 million.
- Announced debt payoff with
Structural Capital Investments III, LP, for an aggregate amount of
approximately $30.9 million. This payoff is expected to
substantially enhance Asure’s cash flow, be accretive to earnings
and create financial flexibility to further enable us to execute
our strategy to deliver double-digit revenue growth.
- Announced a new 401k product
bundled with Secure Act 2.0 tax credits. Asure will white-label
Vestwell’s 401k platform and process the associated tax credits on
behalf of its clients. The combined offering is expected to help
small businesses compete for talent with larger firms, comply with
an increasing number of state mandates requiring employers to
provide retirement benefits, and maximize tax credits leading to
increased use of Asure’s payroll, retirement, and HR Compliance
services.
- Announced the launch of Lendio in
the Asure Marketplace™. One of Asure’s main strategic pillars is to
help clients gain access to growth-sustaining capital. This
collaboration gives Asure's clients access to Lendio's
comprehensive suite of business financing solutions, all delivered
through a single, online application. With this integration,
businesses can now effortlessly explore a wide range of funding
options, ensuring they have the financial resources to survive,
grow and thrive.
- Announced the launch of its
Treasury Compliance Services powered by J.P. Morgan , specifically
designed to assist regional and niche payroll providers with
stringent compliance demands related to money movement. This
service strategically addresses the requirements of the Money
Transmission Modernization Act (MTMA), the Bank Secrecy Act (BSA),
and the National Automated Clearing House Association (NACHA),
which have notably increased regulatory requirements for companies
moving money associated with payroll transactions.
Management Commentary
“We are excited to have delivered another strong
performance for our Company in the third quarter with 34% organic
growth in revenues and robust gains in gross margins versus the
same period a year ago, which are the primary result of increased
revenues and more efficient operations driven by the consolidation
and standardization efforts across the Company,” said Asure
Chairman and CEO Pat Goepel. “We are building on our strong
momentum by advancing our technology through leading partnerships
as well as launching strategic sales initiatives. As an example, we
recently launched an offering which bundles our 401k product with
payroll services to help drive new client additions and we have
seen good reception in the brief time since this effort was
launched. Our focus on areas of differentiation, such as HR
Compliance , our best-in-class tax platform, and our Asure
Marketplace™, is anticipated to account for an increasing share of
our revenue moving forward and is expected to generate high-margin
revenue streams during the remainder of 2023 and into 2024.
“We expect that the growth of our business will
continue and today we are issuing guidance for the fourth quarter
2023 as well as introducing preliminary guidance for 2024 revenues.
Regarding fourth quarter 2023, we expect revenues in the range of
$25M-$27M, which at the midpoint would equal approximately 19%
growth year over year. We expect our 2024 revenues to be in the
range of $125M-$129M with adjusted EBITDA margins between 20% to
21%. While we intend to continue to evaluate potential acquisition
targets in 2024, our guidance reflects our expectation for
performance on a combination of organic and inorganic basis
currently and the possible effects of the Internal Revenue
Service’s recent measures against fraudulent employee retention tax
credit claims.
“Asure continues to invest in product
development which we believe enables our small business customers
to better leverage our expertise. Additionally, our enterprise
clients can access new tools to move money and manage the
increasingly complex tax laws more effectively. We will continue to
provide innovative HCM solutions that help small businesses thrive,
HCM providers grow their base, and large enterprises streamline tax
compliance. Looking ahead, we remain focused on our commitments to
helping small- and mid-sized businesses get the most from their
human capital.”
Fourth Quarter 2023 and Full Year 2024
Revenue Guidance Ranges
The Company is providing the following guidance
for the fourth quarter 2023 and full year 2024 based on the
Company’s year-to-date results and recent business trends. This
guidance is offered with the knowledge that there is a high level
of economic uncertainty in 2023 which may continue into 2024 due to
recent inflationary trends and the potential for a recession of
unknown severity and the Internal Revenue Service’s recent measures
against fraudulent employee retention tax credit claims. This
guidance assumes that no further actions will be taken by the
Internal Revenue Service or other governmental authorities with
respect to ERC claims in 2024 other than the moratorium on
processing of ERC claims, which is currently expected to expire on
December 31, 2023.
Guidance for 2023
Guidance Range |
|
Q4-2023 |
|
FY-2023 |
|
Revenue |
$ |
25.0M - 27.0M |
$ |
118.0M - 120.0M |
|
Adjusted EBITDA(1) |
$ |
2.0M - 3.0M |
$ |
19% - 20% |
|
Guidance for 2024
Guidance Range |
|
FY-2024 |
|
Revenue |
$ |
125.0M - 129.0M |
|
Adjusted EBITDA(1) |
|
20% - 21% |
|
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
disclosures 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 5 of this press release.
Conference Call Details
Asure management will host a conference call
Monday, November 13, 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. The conference call will be broadcast
live and available for replay via the investor relations section of
the Company’s website. Analysts may participate on the conference
call by dialing 877-407-9219 or 201-689-8852.
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 AsureHCM™, 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. 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 Condensed 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.
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.
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 certain statements
made by management that may constitute “forward-looking” statements
within the meaning of the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements about our financial results may include
expected or projected U.S GAAP and non-U.S. GAAP financial and
other operating and non-operating results. The words “believe,”
“may,” “will,” “estimate,” “projects,” “anticipate,” “intend,”
“expect,” “should,” “plan,” and similar expressions are intended to
identify forward-looking statements. Examples of “forward-looking
statements” include statements we make regarding our operating
performance, future results of operations and financial position,
revenue growth, earnings or other projections. We have based these
forward-looking statements largely on our current expectations and
projections about future events and trends that we believe may
affect our financial condition, results of operations, business
strategy, short-term and long-term business operations and
objectives, and financial needs. 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— the expiration of major revenue
streams such as Employee Retention Tax Credits and the impact of
the IRS recent measures regarding Employee Retention Tax Credits
claims; risks associated with breaches of the Company’s security
measures; risks associated with the Company’s rate of growth and
anticipated revenue run rate, including impact of the current
environment; 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 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; possible fluctuations in the Company’s
financial and operating results; 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; privacy concerns and laws and
other regulations may limit the effectiveness of our applications;
factors affecting the Company’s term loan; 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 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; technological developments; the nature of the
Company’s business model; interest rates; competition; various
financial aspects of the Company’s subscription model; impairment
of intangible assets; interruptions or delays in the Company’s
services or the Company’s Web hosting; access to additional
capital; the Company’s ability to hire, retain and motivate
employees and manage the Company’s growth; litigation and any
related claims, negotiations and settlements, including with
respect to intellectual property matters or industry-specific
regulations; volatility and weakness in bank and capital markets;
factors affecting the Company’s deferred tax assets and ability to
value and utilize them; volatility and low trading volume of our
common stock; collection of receivables; 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, together
with its risk factors in its quarterly reports for the three and
six months ended June 30, 2023, filed with the SEC on August 7,
2023, and the three months and six months ended September 30, 2023,
filed with the SEC on November 13, 2023.
The forward-looking statements, including the
financial guidance, 2023 and 2024 outlooks, 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. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands) |
|
|
September 30, 2023 |
|
December 31, 2022 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
32,787 |
|
|
$ |
17,010 |
|
Accounts receivable, net |
|
15,133 |
|
|
|
12,123 |
|
Inventory |
|
93 |
|
|
|
251 |
|
Prepaid expenses and other current assets |
|
3,907 |
|
|
|
10,304 |
|
Total current assets before funds held for clients |
|
51,920 |
|
|
|
39,688 |
|
Funds held for clients |
|
172,503 |
|
|
|
203,588 |
|
Total current assets |
|
224,423 |
|
|
|
243,276 |
|
Property and equipment, net |
|
13,436 |
|
|
|
11,439 |
|
Goodwill |
|
86,011 |
|
|
|
86,011 |
|
Intangible assets, net |
|
57,326 |
|
|
|
66,594 |
|
Operating lease assets, net |
|
5,265 |
|
|
|
7,065 |
|
Other assets, net |
|
8,036 |
|
|
|
5,523 |
|
Total assets |
$ |
394,497 |
|
|
$ |
419,908 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of notes payable |
$ |
195 |
|
|
$ |
4,106 |
|
Accounts payable |
|
1,696 |
|
|
|
2,194 |
|
Accrued compensation and benefits |
|
5,770 |
|
|
|
5,791 |
|
Operating lease liabilities, current |
|
1,510 |
|
|
|
1,860 |
|
Other accrued liabilities |
|
5,170 |
|
|
|
3,728 |
|
Contingent purchase consideration |
|
— |
|
|
|
2,955 |
|
Deferred revenue |
|
3,392 |
|
|
|
8,461 |
|
Total current liabilities before client fund obligations |
|
17,733 |
|
|
|
29,095 |
|
Client fund obligations |
|
175,056 |
|
|
|
206,088 |
|
Total current liabilities |
|
192,789 |
|
|
|
235,183 |
|
Long-term liabilities: |
|
|
|
Deferred revenue |
|
666 |
|
|
|
788 |
|
Deferred tax liability |
|
1,614 |
|
|
|
1,503 |
|
Notes payable, net of current portion |
|
2,633 |
|
|
|
30,795 |
|
Operating lease liabilities, noncurrent |
|
4,956 |
|
|
|
6,459 |
|
Other liabilities |
|
177 |
|
|
|
114 |
|
Total long-term liabilities |
|
10,046 |
|
|
|
39,659 |
|
Total liabilities |
|
202,835 |
|
|
|
274,842 |
|
Commitments |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
252 |
|
|
|
206 |
|
Treasury stock at cost |
|
(5,017 |
) |
|
|
(5,017 |
) |
Additional paid-in capital |
|
485,981 |
|
|
|
433,586 |
|
Accumulated deficit |
|
(286,858 |
) |
|
|
(281,226 |
) |
Accumulated other comprehensive income |
|
(2,696 |
) |
|
|
(2,483 |
) |
Total stockholders’ equity |
|
191,662 |
|
|
|
145,066 |
|
Total liabilities and
stockholders’ equity |
$ |
394,497 |
|
|
$ |
419,908 |
|
|
|
|
|
ASURE SOFTWARE, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS |
(in thousands, except per share amounts) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Revenue: |
|
|
|
|
|
|
|
Recurring |
$ |
23,833 |
|
|
$ |
19,959 |
|
|
$ |
74,749 |
|
|
$ |
61,977 |
|
Professional services, hardware and other |
|
5,501 |
|
|
|
1,944 |
|
|
|
18,069 |
|
|
|
4,559 |
|
Total revenue |
|
29,334 |
|
|
|
21,903 |
|
|
|
92,818 |
|
|
|
66,536 |
|
Cost of Sales |
|
8,054 |
|
|
|
8,256 |
|
|
|
25,120 |
|
|
|
25,164 |
|
Gross profit |
|
21,280 |
|
|
|
13,647 |
|
|
|
67,698 |
|
|
|
41,372 |
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
6,597 |
|
|
|
4,752 |
|
|
|
22,312 |
|
|
|
14,238 |
|
General and administrative |
|
9,294 |
|
|
|
8,023 |
|
|
|
29,586 |
|
|
|
24,204 |
|
Research and development |
|
1,803 |
|
|
|
1,230 |
|
|
|
5,107 |
|
|
|
4,523 |
|
Amortization of intangible assets |
|
3,333 |
|
|
|
3,350 |
|
|
|
9,929 |
|
|
|
10,134 |
|
Total operating expenses |
|
21,027 |
|
|
|
17,355 |
|
|
|
66,934 |
|
|
|
53,099 |
|
(Loss) Income from
operations |
|
253 |
|
|
|
(3,708 |
) |
|
|
764 |
|
|
|
(11,727 |
) |
Interest expense, net |
|
(782 |
) |
|
|
(1,122 |
) |
|
|
(4,321 |
) |
|
|
(3,006 |
) |
(Loss) Gain on extinguishment of debt |
|
(1,517 |
) |
|
|
— |
|
|
|
(1,517 |
) |
|
|
180 |
|
Other (expense) income, net |
|
(283 |
) |
|
|
399 |
|
|
|
(291 |
) |
|
|
1,349 |
|
Loss from operations before
income taxes |
|
(2,329 |
) |
|
|
(4,431 |
) |
|
|
(5,365 |
) |
|
|
(13,204 |
) |
Income tax (benefit) expense |
|
(123 |
) |
|
|
102 |
|
|
|
267 |
|
|
|
206 |
|
Net loss |
|
(2,206 |
) |
|
|
(4,533 |
) |
|
|
(5,632 |
) |
|
|
(13,410 |
) |
Other comprehensive loss: |
|
|
|
|
|
|
|
Unrealized loss on marketable securities |
|
(201 |
) |
|
|
(1,243 |
) |
|
|
(213 |
) |
|
|
(2,802 |
) |
Comprehensive loss |
$ |
(2,407 |
) |
|
$ |
(5,776 |
) |
|
$ |
(5,845 |
) |
|
$ |
(16,212 |
) |
|
|
|
|
|
|
|
|
Basic and diluted earnings
(loss) per share |
|
|
|
|
|
|
|
Basic |
$ |
(0.10 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.67 |
) |
Diluted |
$ |
(0.10 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.67 |
) |
|
|
|
|
|
|
|
|
Weighted average basic and
diluted shares |
|
|
|
|
|
|
|
Basic |
|
22,591 |
|
|
|
20,219 |
|
|
|
21,204 |
|
|
|
20,092 |
|
Diluted |
|
22,591 |
|
|
|
20,219 |
|
|
|
21,204 |
|
|
|
20,092 |
|
ASURE SOFTWARE, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in thousands) |
|
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(5,632 |
) |
|
$ |
(13,410 |
) |
Adjustments to reconcile income (loss) to net cash provided by
(used in) operations: |
|
|
|
Depreciation and amortization |
|
14,243 |
|
|
|
14,018 |
|
Amortization of operating lease assets |
|
1,129 |
|
|
|
1,268 |
|
Amortization of debt financing costs and discount |
|
548 |
|
|
|
531 |
|
Non-cash interest expense |
|
1,471 |
|
|
|
— |
|
Net amortization of premiums and accretion of discounts on
available-for-sale securities |
|
(63 |
) |
|
|
279 |
|
Provision for doubtful accounts |
|
2,004 |
|
|
|
304 |
|
Provision for deferred income taxes |
|
111 |
|
|
|
163 |
|
Gain (loss) on extinguishment of debt |
|
1,208 |
|
|
|
(180 |
) |
Net realized gains on sales of available-for-sale securities |
|
(1,645 |
) |
|
|
(808 |
) |
Share-based compensation |
|
4,170 |
|
|
|
2,341 |
|
Loss on disposals of fixed assets |
|
132 |
|
|
|
1 |
|
Change in fair value of contingent purchase consideration |
|
175 |
|
|
|
(1,350 |
) |
Adjustment to intangibles |
|
— |
|
|
|
23 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(5,014 |
) |
|
|
(1,816 |
) |
Inventory |
|
159 |
|
|
|
(85 |
) |
Prepaid expenses and other assets |
|
4,031 |
|
|
|
2,855 |
|
Operating lease right-of-use assets |
|
473 |
|
|
|
(3,489 |
) |
Accounts payable |
|
(498 |
) |
|
|
738 |
|
Accrued expenses and other long-term obligations |
|
918 |
|
|
|
2,637 |
|
Operating lease liabilities |
|
(895 |
) |
|
|
2,298 |
|
Deferred revenue |
|
(5,190 |
) |
|
|
639 |
|
Net cash provided by operating
activities |
|
11,835 |
|
|
|
6,957 |
|
Cash flows from investing
activities: |
|
|
|
Acquisition of intangible asset |
|
(697 |
) |
|
|
(2,289 |
) |
Purchases of property and equipment |
|
(1,365 |
) |
|
|
(2,188 |
) |
Software capitalization costs |
|
(5,029 |
) |
|
|
(3,219 |
) |
Purchases of available-for-sale securities |
|
(21,513 |
) |
|
|
(33,454 |
) |
Proceeds from sales and maturities of available-for-sale
securities |
|
10,428 |
|
|
|
7,159 |
|
Net cash used in investing
activities |
|
(18,176 |
) |
|
|
(33,991 |
) |
Cash flows from financing
activities: |
|
|
|
Payments of notes payable |
|
(35,627 |
) |
|
|
(1,688 |
) |
Payment of contingent purchase consideration |
|
— |
|
|
|
(9 |
) |
Debt extinguishment costs |
|
(468 |
) |
|
|
— |
|
Net proceeds from issuance of common stock |
|
45,986 |
|
|
|
192 |
|
Capital raise fees |
|
(258 |
) |
|
|
— |
|
Net change in client fund obligations |
|
(31,033 |
) |
|
|
(32,527 |
) |
Net cash used by in financing
activities |
|
(21,400 |
) |
|
|
(34,032 |
) |
Net decrease in cash and cash
equivalents |
|
(27,741 |
) |
|
|
(61,066 |
) |
Cash and cash equivalents at
beginning of period |
|
164,042 |
|
|
|
198,641 |
|
Cash and cash equivalents at
end of period |
$ |
136,301 |
|
|
$ |
137,575 |
|
ASURE SOFTWARE, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued) |
(in thousands) |
|
|
Nine Months Ended September 30, |
|
2023 |
|
2022 |
|
(unaudited) |
|
(unaudited) |
Reconciliation of
cash, cash equivalents, restricted cash, and restricted cash
equivalents to the Condensed Consolidated Balance Sheets |
Cash and cash equivalents |
$ |
32,787 |
|
|
$ |
10,885 |
|
Restricted cash and restricted cash equivalents included in funds
held for clients |
|
103,514 |
|
|
|
126,690 |
|
Total cash, cash equivalents,
restricted cash, and restricted cash equivalents |
$ |
136,301 |
|
|
$ |
137,575 |
|
|
|
|
|
Supplemental information: |
|
|
|
Cash paid for interest |
$ |
3,140 |
|
|
$ |
2,247 |
|
Cash paid for income taxes |
$ |
532 |
|
|
$ |
246 |
|
|
|
|
|
Non-cash investing and
financing activities: |
|
|
|
Acquisition of intangible assets |
$ |
332 |
|
|
$ |
— |
|
Notes payable issued for acquisitions |
$ |
— |
|
|
$ |
411 |
|
Shares issued to settle contingent consideration |
$ |
2,543 |
|
|
$ |
— |
|
ASURE SOFTWARE, INC. |
RECONCILIATION OF NON-GAAP AND ADJUSTED FINANCIAL
MEASURES |
(unaudited) |
|
(in thousands) |
Q3-23 |
Q2-23 |
Q1-23 |
Q4-22 |
Q3-22 |
Q2-22 |
Q1-22 |
Q4-21 |
Revenue(1) |
$ |
29,334 |
|
$ |
30,420 |
|
$ |
33,064 |
|
$ |
29,292 |
|
$ |
21,903 |
|
$ |
20,300 |
|
$ |
24,333 |
|
$ |
21,113 |
|
|
|
|
|
|
|
|
|
|
Gross Profit to
non-GAAP Gross Profit |
|
|
|
|
|
|
|
|
Gross
Profit |
$ |
21,280 |
|
$ |
22,018 |
|
$ |
24,400 |
|
$ |
21,139 |
|
$ |
13,647 |
|
$ |
12,261 |
|
$ |
15,464 |
|
$ |
13,259 |
|
Gross Margin |
|
72.5 |
% |
|
72.4 |
% |
|
73.8 |
% |
|
72.2 |
% |
|
62.3 |
% |
|
60.4 |
% |
|
63.6 |
% |
|
62.8 |
% |
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
28 |
|
|
46 |
|
|
31 |
|
|
34 |
|
|
38 |
|
|
35 |
|
|
36 |
|
|
46 |
|
Depreciation |
|
984 |
|
|
1,309 |
|
|
1,009 |
|
|
871 |
|
|
860 |
|
|
815 |
|
|
857 |
|
|
685 |
|
Amortization - intangibles |
|
50 |
|
|
50 |
|
|
268 |
|
|
298 |
|
|
296 |
|
|
296 |
|
|
296 |
|
|
354 |
|
One-time expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
8 |
|
|
— |
|
|
4 |
|
|
3 |
|
|
38 |
|
|
— |
|
|
1 |
|
|
— |
|
Non-GAAP Gross
Profit |
$ |
22,350 |
|
$ |
23,423 |
|
$ |
25,712 |
|
$ |
22,345 |
|
$ |
14,879 |
|
$ |
13,407 |
|
$ |
16,654 |
|
$ |
14,344 |
|
Non-GAAP Gross Margin |
|
76.2 |
% |
|
77.0 |
% |
|
77.8 |
% |
|
76.3 |
% |
|
67.9 |
% |
|
66.0 |
% |
|
68.4 |
% |
|
67.9 |
% |
|
|
|
|
|
|
|
|
|
Sales and
Marketing Expense to non-GAAP Sales and Marketing
Expense |
Sales and Marketing
Expense |
$ |
6,597 |
|
$ |
8,515 |
|
$ |
7,200 |
|
$ |
6,022 |
|
$ |
4,752 |
|
$ |
4,589 |
|
$ |
4,897 |
|
$ |
4,318 |
|
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
210 |
|
|
149 |
|
|
124 |
|
|
93 |
|
|
90 |
|
|
64 |
|
|
64 |
|
|
268 |
|
One-time expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
30 |
|
|
4 |
|
|
11 |
|
|
— |
|
|
— |
|
|
14 |
|
|
— |
|
|
— |
|
Other non-recurring expenses |
|
— |
|
|
180 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Non-GAAP Sales and
Marketing Expense |
$ |
6,357 |
|
$ |
8,182 |
|
$ |
7,065 |
|
$ |
5,929 |
|
$ |
4,662 |
|
$ |
4,511 |
|
$ |
4,833 |
|
$ |
4,050 |
|
|
|
|
|
|
|
|
|
|
General
and Administrative Expense to non-GAAP General and Administrative
Expense |
General and
Administrative Expense |
$ |
9,294 |
|
$ |
10,336 |
|
$ |
9,956 |
|
$ |
9,720 |
|
$ |
8,023 |
|
$ |
8,696 |
|
$ |
7,485 |
|
$ |
7,396 |
|
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
936 |
|
|
1,298 |
|
|
1,142 |
|
|
641 |
|
|
590 |
|
|
615 |
|
|
575 |
|
|
468 |
|
Depreciation |
|
200 |
|
|
234 |
|
|
210 |
|
|
168 |
|
|
149 |
|
|
154 |
|
|
170 |
|
|
161 |
|
One-time expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
101 |
|
|
432 |
|
|
102 |
|
|
34 |
|
|
15 |
|
|
283 |
|
|
59 |
|
|
93 |
|
Acquisition and transaction costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
638 |
|
|
— |
|
|
34 |
|
Other non-recurring expenses |
|
— |
|
|
453 |
|
|
— |
|
|
— |
|
|
— |
|
|
58 |
|
|
49 |
|
|
63 |
|
Non-GAAP General and
Administrative Expense |
$ |
8,057 |
|
$ |
7,919 |
|
$ |
8,502 |
|
$ |
8,877 |
|
$ |
7,269 |
|
$ |
6,948 |
|
$ |
6,632 |
|
$ |
6,577 |
|
|
|
|
|
|
|
|
|
|
Research
and Development Expense to non-GAAP Research and Development
Expense |
Research and
Development Expense |
$ |
1,803 |
|
$ |
1,325 |
|
$ |
1,979 |
|
$ |
1,627 |
|
$ |
1,230 |
|
$ |
1,472 |
|
$ |
1,821 |
|
$ |
1,438 |
|
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
76 |
|
|
89 |
|
|
40 |
|
|
70 |
|
|
80 |
|
|
100 |
|
|
54 |
|
|
39 |
|
Depreciation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
One-time expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
— |
|
|
— |
|
|
— |
|
|
25 |
|
|
3 |
|
|
— |
|
|
— |
|
|
— |
|
Non-GAAP Research and
Development Expense |
$ |
1,727 |
|
$ |
1,236 |
|
$ |
1,939 |
|
$ |
1,532 |
|
$ |
1,147 |
|
$ |
1,372 |
|
$ |
1,767 |
|
$ |
1,399 |
|
(1)Note that first quarters are seasonally strong as recurring
year-end W2/ACA revenue is recognized in this period.
ASURE SOFTWARE, INC. |
RECONCILIATION OF NON-GAAP AND ADJUSTED FINANCIAL MEASURES
(cont.) |
(unaudited) |
|
(in thousands) |
Q3-23 |
Q2-23 |
Q1-23 |
Q4-22 |
Q3-22 |
Q2-22 |
Q1-22 |
Q4-21 |
Revenue(1) |
$ |
29,334 |
|
$ |
30,420 |
|
$ |
33,064 |
|
$ |
29,292 |
|
$ |
21,903 |
|
$ |
20,300 |
|
$ |
24,333 |
|
$ |
21,113 |
|
|
|
|
|
|
|
|
|
|
GAAP Net
(Loss) Income to Adjusted EBITDA |
GAAP Net (Loss)
Income |
$ |
(2,206 |
) |
$ |
(3,765 |
) |
$ |
339 |
|
$ |
(1,056 |
) |
$ |
(4,533 |
) |
$ |
(5,860 |
) |
$ |
(3,017 |
) |
$ |
(4,301 |
) |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
782 |
|
|
1,593 |
|
|
1,944 |
|
|
1,429 |
|
|
1,122 |
|
|
1,068 |
|
|
816 |
|
|
1,061 |
|
Income taxes |
|
(123 |
) |
|
627 |
|
|
(237 |
) |
|
(94 |
) |
|
102 |
|
|
74 |
|
|
30 |
|
|
139 |
|
Depreciation |
|
1,185 |
|
|
1,542 |
|
|
1,219 |
|
|
1,039 |
|
|
1,009 |
|
|
969 |
|
|
1,027 |
|
|
846 |
|
Amortization - intangibles |
|
3,384 |
|
|
3,343 |
|
|
3,570 |
|
|
3,648 |
|
|
3,646 |
|
|
3,649 |
|
|
3,729 |
|
|
3,711 |
|
EBITDA |
$ |
3,022 |
|
$ |
3,340 |
|
$ |
6,835 |
|
$ |
4,966 |
|
$ |
1,346 |
|
$ |
(100 |
) |
$ |
2,585 |
|
$ |
1,456 |
|
EBITDA Margin |
|
10.3 |
% |
|
11.0 |
% |
|
20.7 |
% |
|
17.0 |
% |
|
6.1 |
% |
|
(0.5 |
)% |
|
10.6 |
% |
|
6.9 |
% |
|
|
|
|
|
|
|
|
|
Share-based Compensation |
|
1,251 |
|
|
1,582 |
|
|
1,337 |
|
|
838 |
|
|
798 |
|
|
814 |
|
|
729 |
|
|
821 |
|
One Time Expenses |
|
|
|
|
|
|
|
|
Settlements, penalties & interest |
|
140 |
|
|
436 |
|
|
117 |
|
|
62 |
|
|
56 |
|
|
297 |
|
|
60 |
|
|
93 |
|
Acquisition and transaction costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
638 |
|
|
— |
|
|
34 |
|
Other non-recurring expenses |
|
— |
|
|
633 |
|
|
— |
|
|
— |
|
|
— |
|
|
58 |
|
|
49 |
|
|
63 |
|
Other (income) expense, net |
|
1,800 |
|
|
93 |
|
|
(83 |
) |
|
139 |
|
|
(399 |
) |
|
(1,130 |
) |
|
— |
|
|
(150 |
) |
Adjusted
EBITDA |
$ |
6,213 |
|
$ |
6,084 |
|
$ |
8,206 |
|
$ |
6,005 |
|
$ |
1,801 |
|
$ |
577 |
|
$ |
3,423 |
|
$ |
2,317 |
|
Adjusted EBITDA Margin |
|
21.2 |
% |
|
20.0 |
% |
|
24.8 |
% |
|
20.5 |
% |
|
8.2 |
% |
|
2.8 |
% |
|
14.1 |
% |
|
11.0 |
% |
(1)Note that first quarters are seasonally strong as recurring
year-end W2/ACA revenue is recognized in this period.
Investor Relations
Contact |
Patrick McKillop |
Vice President, Investor
Relations |
617-335-5058 |
patrick.mckillop@asuresoftware.com |
Grafico Azioni Asure Software (NASDAQ:ASUR)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Asure Software (NASDAQ:ASUR)
Storico
Da Giu 2023 a Giu 2024