Asure's CEO Discusses Q1 2011 Results - Earnings Call Transcript

Asure Software, Inc. ( ASUR)

Q1 2011 Earnings Call

May 11, 2011 11:00 AM ET

Executives

Cheryl Trbula – Investor Relations

Pat Goepel – CEO

Dave Scoglio – CFO

Presentation

Operator

Good day, ladies and gentlemen, and welcome to Asure Software’s Corporate Conference Call. My name is [Marina] and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer session toward the end of today's presentation. (Operator Instructions)

As a reminder, this conference call is being recorded. I would now like to turn the call over to Cheryl Trbula of Asure Software. Please proceed.

Cheryl Trbula

Thank you, Marina, 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 outcome. 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 expressed permission and your participation implies consent to the call's recording. After we've completed our review of the quarter, we’ll open up the call for questions from the financial analyst community. I would like to now turn the call over to Pat Goepel, CEO of Asure Software. Pat.

Pat Goepel

Thanks, Cheryl, and I would like to welcome investors, analysts, interested third-party clients and prospective investors in Asure for the first quarter 2011 conference call. For those of you that are new to the Asure story, about 18 months ago or so, a new management team was put in place to Asure. And for the first 18 months, we really worked hard at right-sizing the business and focusing the business and getting it strategically in the right markets to compete effectively.

This year, in 2011, we are really undergoing the transformation to a cloud-based company. And our operational focus has really been on sales of repetitive revenue and cloud-based products, enhancing our robust products into the cloud and servicing our customers for growth. We're very pleased with the first-quarter results. Some of the highlights that were in the first quarter were, first of all, earnings, we were break even excluding some small one-time items.

Our recurring cloud-based booking's growth was 73% positive, quarter-over-quarter, and 83% positive year over year. Our EBITDA of $200,000 in the first quarter, our cash growth was 29% over quarter-over-quarter, our deferred revenue growth, that speaks well to the recurring bookings, was 26% over year-over-year, 4% quarter over quarter. And finally, our GAAP earnings per share was $0.02 negative, which beat guidance by $0.02 to $0.05.

Some evidence of some of the bookings, first of all, in the iEmployee business, we grew at 27% of cloud-based bookings in the quarter. Some accounts that we were proud to bring on, UBM Global Trade, [Lattings], which is a national party and catering manufacturer and Nixon Peabody, which is a law firm.

In NetSimplicity, we grew 108% in our cloud-based bookings. Some names you might recognize, Random House, ABB, University of Tennessee and the Kansas City Police Department.

Our cash position is positive in the quarter and we are building momentum from a cash base. Our products that we deployed in the first quarter and are selling in the second quarter. First of all in the NetSimplicity, we worked hard to plug in our products with Microsoft Outlook, and we are excited about the development and the adoption rate of our clients to the Microsoft Outlook.

It was a new way for us to integrate with Microsoft. And we partnered where Microsoft threw in some money and we threw in some money to come up with this product. And we think we have a winner in this enhancement.

On the iEmployee side, we worked really hard on mobile devices and allowing our customers to punch in and out from a time-based solution on their Blackberry or on their iPhone and we think that this is a growing market for us in the future. We've also come out for guidance for the year and on a net income basis, we are about breakeven for the year in our guidance.

We're positioning to enhance our growth of top-line revenue, especially in the recurring revenue and our cloud-based bookings. And our EBITDA will be between a range of $851,000 and $1,131,000. So for the year, we are in a positive direction. We are happy to build on the momentum. And for the particular results, I'm going to turn the call over to our CFO, Dave Scoglio.

Dave Scoglio

Thanks, Pat. I'm going to take a few minutes to go over the first quarter financial highlights. Some of the things Pat had mentioned I won't duplicate but be happy to answer any and all questions at the Q&A period at the end of this morning's call.

In the first quarter, revenue at $2.36 million declined 4% over the comparable period in 2010. This was primarily driven by lower one-time hardware revenue and the one-time effect of a settlement agreement we had with a major reseller in May of last year, which, hardware revenue was about $100,000 of that, the one-time effect to the settlement agreement was about $80,000. And these reductions were actually offset by an increase in recurring revenue of about $50,000.

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