Asure Software (ASUR)
Q2 2010 Earnings Call
August 11, 2010 17:00 p.m. ET
Pat Goepel – CEO
Dave Scoglio – CFO
Cheryl Trbula - IR
James Gladney - Liberty Capital Partners
Previous Statements by ASUR
» Asure Software, Inc. Q1 2010 Earnings Call Transcript
» Asure Software Inc. F2Q10 (Qtr End 12/31/09) Earnings Call Transcript
» Asure Software F1Q10 (Qtr End 10/31/09) Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to the second quarter 2010 earnings conference call. [Operator instructions.] I would now like to turn the conference over to Cheryl Trbula of Asure Software. Please proceed.
Thank you operator, and welcome everyone to Asure Software's conference call. Before we start, I’d like to mention that some of the statements made by management during this call might include projections, estimates, and other forward-looking information.
This will include any discussion of the company’s business outlook. These particular forward-looking statements and all of the statements that may be made on this call that are not historical are subject to a number of risks and uncertainties that could affect their outcomes.
You are urged to consider the risk factors relating to the company’s business, contained in our latest periodic reports on file with the Securities and Exchange Commission. These risk factors are important and they could cause actual results to differ materially.
This call is also being recorded on behalf of Asure Software and is copyrighted material. It cannot be recorded or rebroadcast without the company’s express permission and your participation implies consent to the call’s recording. After we have completed our review of the quarter, we’ll open up the call for questions for the financial analyst community.
I would now like to turn the call over to Pat Goepel, CEO of Asure Software. Pat?
Thank you Cheryl, investors, and folks that are interested in Asure. Asure is very excited about the second quarter and communicating the results today. As you know, we had a new management team that took over in late September in '09, and we had four initiatives: Simplify the business of Asure; we wanted to fix the core business and grow the business; we wanted to maintain that we were legislatively compliant,; and we had a 20/20 operational plan by the fourth quarter, where we would grow at 20% and have 20% EBITDA. And we've made great strides on all core elements of those plans.
First of all, on the 20/20 plan, in the second quarter Asure achieved 13% revenue growth and 19% EBITDA, ex some real estate items. In order to do that, we had to sell, and sell we did. In the NetSimplicity line of business, some logos or companies that we ultimately sold this past quarter were GlaxcoSmithKline, UnumProvident, Samsung, and the Andrews Airforce Base. In iEmployee, People's Community Bank and Clearwire were major customers that signed for us.
All in told, in keeping with our goal as being a SaaS company, we had 71% reoccurring revenue. We're very proud of the progress we've made in transforming to a SaaS company, and the progress is continued; 71% was a good number for us in the quarter.
We're also proud of some of the product enhancements we've made in the second quarter. We had a new release in the iEmployee business, and in the iEmployee business that new release affected some of the time entry areas of our product and shift differentials and our largest customer, Devry, enjoyed beta testing that release for us. In NetSimplicity, we were excited about our 8.3 release that went in at the end of June, and our customers were excited because we had very very strong sales.
Operationally, our DSO, we were very pleased with the progress that we made there. Since taking over in September, Dave Scoglio's group has worked very hard to go from 61 days down to 35 days. As far as under the banner of simplifying the business, we've made great progress.
We previously announced, in April, that we parted ways with our longtime partner HPI on our commercial real estate in Austin, and we have settled that in April, and we are moving locations in August, at the end of August, in our corporate headquarters. Similarly, in this quarter, Vancouver, we are going to move locations in the third quarter in Vancouver, and that will continue to simplify the business.
We also, in the quarter, have disposed of some of our last remnants of our intellectual property patents, and they are no longer part of Asure. So now Asure is really, truly a software-as-a-service business, and the commercial real estate and the IP portions of the business now have been sold off of Asure.
Also, in the quarter, our largest customer was Ceridian, and Ceridian was a series of multiple customers. We went through a process where now we have contracted with those clients directly, and there is no client in our portfolio that is more than 1.5% of our revenue. We think this has stabilized our client base. We're also very very excited about the cross-selling elements that we have going forward and to nurture our client base and our customers.
Also, many of the Ceridian customers were on a month-to-month contracting basis, and our clients that are direct now are on an annual renewal, or in some cases a multiple year renewal. So we feel like the program we just completed with Ceridian that we announced a couple of days ago, the metrics were very strong and it puts us in a position to succeed long-term in the business.
Looking ahead, in the third and fourth quarter we feel like we'll make continued progress. I mentioned that we will have a couple of moves in the third quarter, with our Austin headquarters and our Vancouver move. In the third and fourth quarter we're providing guidance and we have some one-time items relative to the moves in the third quarter. We don't anticipate any one-time items in the fourth quarter at this time