Asure Software Reports Strong Third Quarter 2016 Financial Results

AUSTIN, Texas, Nov. 14, 2016 (GLOBE NEWSWIRE) -- Asure Software, Inc. (NASDAQ:ASUR) , a leading provider of Human Capital Management (HCM) and workplace management software, reported results for the third quarter ended September 30, 2016. The company also reported pro forma unaudited results, which included results from the acquisition of Mangrove Software as if it was completed on January 1, 2015.
Third Quarter 2016 Financial Summary Actual Results   Pro Forma Results
(in millions except per share data and percentages) Q3 2016 Q3 2015 Change (%)   Q3 2016 Q3 2015 Change (%)
Revenue $     9.4   $ 6.7     42 %   $     9.4   $ 8.9     6 %
               
Gross Margin $     7.4   $ 4.9     51 %   $     7.4   $ 6.8     8 %
Gross Margin (as a % of revenue)   78.5 %   73.7 %   7 %     78.5 %   76.6 %   3 %
               
EBITDA (excluding one-time expenses) $     2.3   $ 0.8     199 %   $     2.3   $ 1.3     77 %
               
Net Income (Loss) $     0.3   $ (0.6 )   155 %   $     0.3   $ (0.7 )   147 %
Net Income (Loss) per Diluted Share, Excluding one-time expenses $     0.10   $ (0.09 )   211 %   $     0.10   $ (0.10 )   200 %
 
Year to Date 2016 Financial Summary Actual Results   Pro Forma Results
(in millions except per share data and percentages) YTD 2016 YTD 2015 Change (%)   YTD 2016 YTD 2015 Change (%)
Revenue $     25.8   $ 20.1     28 %   $     28.0   $ 26.3     6 %
               
Gross Margin $     19.9   $ 14.9     34 %   $     21.6   $ 19.9     8 %
Gross Margin (as a % of revenue)   77.0 %   73.8 %   4 %     77.1 %   75.7 %   2 %
               
EBITDA (excluding one-time expenses) $     5.3   $ 3.1     70 %   $     5.8   $ 4.1     43 %
               
Net Income (Loss) $     (1.1 ) $ (1.0 )   -15 %   $     (0.3 ) $ (1.9 )   85 %
Net Income (Loss) per Diluted Share, Excluding one-time expenses $     0.15   $ (0.09 )   267 %   $     0.17   $ (0.23 )   174 %

Third Quarter 2016 Operational Highlights
  • Secured a new three-year deal with one of the company's largest customers, Packers Sanitation Services (PSSI).
  • Total bookings for the quarter were up 19% year-over-year and up 39% year-to-date.
  • Backlog totaled $3.9 million, a 49% increase compared to the prior quarter and a 22% increase from the year-ago quarter. The company continues to expect many enterprise clients to move through the implementation process throughout the rest of fiscal 2016 and 2017, which will result in conversion from backlog to reported revenue growth.
  • Secured several new wins across a range of industry verticals with leading enterprises, including Procter & Gamble, Merck, ExxonMobil, and Apple.
  • Launched Version 8 of core HCM software, which the company expects to start selling and installing in the fourth quarter. 
  • Cross-sell opportunities grew 452% from the second quarter, reflecting the increasing amount of synergies realized by the company since its acquisition of Mangrove Software in March 2016. 
  • Overall pipeline of deals increased 212% from the second quarter, as the company continues to integrate its sales team to sell its entire suite of time and labor, workforce, and HCM solutions.

Third Quarter 2016 Financial Results
  • Revenue for the quarter increased 42% to $9.4 million from $6.7 million in the same year-ago quarter. On a pro forma basis, including the results from Mangrove Software as if the acquisition was completed on January 1, 2015, revenue increased 6% to $9.4 million from $8.9 million in the same year-ago quarter.
  • Recurring revenue for the quarter as a percent of total revenue was 74%, as compared to 75% in the third quarter of 2015.
  • Cloud revenue increased 65%, on premise software revenue increased 213%, and professional services revenue increased 78% from the third quarter of 2015.
  • Gross margin for the quarter was $7.4 million (78.5% of total revenue), a 51% increase from $4.9 million (73.7% of total revenue) in the third quarter of 2015.
  • EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization)* excluding one-time items* for the quarter totaled $2.3 million, an increase of 199% compared to $767,000 in the third quarter of 2015.
  • Net income per share (excluding one-times*) for the third quarter totaled $0.10, compared to net loss per share (excluding one-times*) of $(0.09) in the third quarter of 2015. On a pro forma basis, including the results from Mangrove Software as if the acquisition was completed on January 1, 2015, net income per share (excluding one-times*) totaled $0.10, an improvement from a net loss per share (excluding one-times*) of $(0.10) in the same year-ago quarter.

Financial Outlook

On a pro forma basis, including the company's acquisition of Mangrove on March 21, 2016 and under the condition that Mangrove and Asure had been combined as a single company on January 1, 2016, Asure management reaffirmed its previously raised guidance for fiscal 2016 ending December 31:
2016 Financial Guidance Fiscal 2016 (vs. Fiscal 2015)
Revenue $37.75 million to $38.75 million (+40.3% to +44.0% vs. YTD 2015 actual)
EBITDA, excluding one-time items $7.75 million to $8.25 million (+107.6% to +120.9% vs. YTD 2015 actual)
Net income per share, excluding one-time items   $0.22 to $0.30 (vs. a loss of $0.17 YTD 2015 actual)

Management Commentary

"After an important quarter defined by wide-scale integration, cost reductions, and efficiency realizations, Q3 represented the beginning of a 'new normal' for Asure—a period where our unified platform and expanded market focus led us to realize many of the benefits we expected in this new stage of growth," said company CEO, Pat Goepel. "Not only did we continue to see a year-over-year increase in many of our key metrics, such as pro forma revenue, gross margin, and EBITDA, but we also produced another quarter of profitability, demonstrating the strong demand for both our established and new solutions, as well as the continued near-term realization of some of the synergies from the Mangrove acquisition.

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