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Asure Software Reports Record Second Quarter 2017 Revenue and Increases Revenue and EBITDA Guidance for Full Year

AUSTIN, Texas, Aug 14, 2017 (GLOBE NEWSWIRE via COMTEX) --

Asure Software, Inc. ASUR, +1.07% a leading provider of Human Capital Management (HCM) and workplace management software, reported results for the second quarter ended June 30, 2017.

Second Quarter 2017 Financial Summary Actual Results
For the three months ended
(in millions except per share data and percentages) June 30, 2017 June 30, 2016 Change (%)
Revenue $ 12.9 $ 9.7 33 %
Gross Margin $ 10.1 $ 7.5 34 %
Gross Margin(as a % of revenue) 78.1 % 77.5 % 1 %
EBITDA $ 0.9 $ 1.8 -48 %
EBITDA, excluding one-time expenses $ 2.2 $ 2.6 -18 %
Net Income (Loss) $ (1.8 ) $ 0.1 -1451 %
Net Income (Loss) per Share $ (0.18 ) $ 0.02 -1000 %
Net Income (Loss) per Share, excluding one-time expenses $ (0.06 ) $ 0.15 -140 %
Non-GAAP Net Income (Loss) per Share $ 0.07 $ 0.27 -74 %
Six Months Ended 2017 Financial Summary Actual Results
For the six months ended
(in millions except per share data and percentages) June 30, 2017 June 30, 2016 Change (%)
Revenue $ 23.6 $ 16.4 44 %
Gross Margin $ 18.3 $ 12.5 47 %
Gross Margin(as a % of revenue) 77.7 % 76.2 % 2 %
EBITDA $ 1.9 $ 1.3 40 %
EBITDA, excluding one-time expenses $ 4.0 $ 3.0 31 %
Net Income (Loss) $ (2.9 ) $ (1.4 ) 104 %
Net Income (Loss) per Share $ (0.31 ) $ (0.23 ) 35 %
Net Income (Loss) per Share, excluding one-time expenses $ (0.09 ) $ 0.04 -325 %
Non-GAAP Net Income (Loss) per Share $ 0.16 $ 0.25 -36 %

Second Quarter 2017 Operational Highlights

  • Cloud bookings increased 174% from the second quarter of 2016.

  • Overall pipeline of deals increased approximately 73% from the prior quarter, reflecting the additions of the company's strategic acquisitions, increased cross-sell opportunities as well as the effectiveness of the expanded sales force.

  • Backlog totaled $18.1 million, a 48% increase compared to the prior quarter and a 34% increase from the year-ago quarter. The company continues to expect many enterprise clients will move through the implementation process in 2017, which will result in conversion of this backlog to reported revenue growth during the year.

  • Secured several new wins across a range of industry verticals, including Procter & Gamble and Fannie Mae. HCM wins included B Green Services, Messerli & Kramer, and Zander's Sporting Goods.

  • Completed a $27.5 million public offering of common stock with high-quality institutional investors.

  • Partnered with Wells Fargo and Goldman Sachs for a new $35 million term loan, thereby increasing the total commitment capacity under its restated credit facility to $75 million.

  • Strengthened leadership team with the appointments of Web Hill as Vice President and General Manager, Evolution, and Robert Dietz as Vice President and General Manager, HR Consulting.

  • Appointed Silver Oak Services Partners Founder and Co-Managing Partner Daniel Gill to Asure's board of directors.

  • Awarded a place on the G-Cloud 9 Framework, enabling Asure to offer cloud services to UK government departments, local authorities and the broader public sector without requiring a full tender process.

  • Acquired Compass HRM, a regional HR and payroll service bureau in the Southeast and an existing reseller of Asure's HCM offering.

  • Acquired iSystems, a leading national provider of HCM solutions to more than 100 payroll and HR service bureaus, providing Asure with significant cross-sell revenue opportunities and cost synergies.

Second Quarter 2017 Financial Results

  • Revenue increased 33% to a record $12.9 million from $9.7 million in the same year-ago quarter.

  • Recurring revenue for the quarter as a percent of total revenue was 79.3%, an improvement from 72.1% in the second quarter of 2016.

  • Cloud revenue increased 64% and hardware revenue increased 22% from the second quarter of 2016.

  • Gross margin for the quarter was $10.1 million (78.1% of total revenue), a 34% increase from $7.5 million (77.5% of total revenue) in the second quarter of 2016.

  • EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) *excluding one-time items* for the quarter was approximately $2.2 million, compared to $2.6 million in the second quarter of 2016.

  • Net loss per share (excluding one-time items*) totaled $(0.06) (based on 10.0 million shares), compared to net income per share (excluding one-time items*) of $0.15 (based on 6.4 million shares) in the second quarter of 2016.

  • Non-GAAP net income per share totaled $0.07, compared to non-GAAP net income per share of $0.27 in the second quarter of 2016.

  • Deferred revenue increased 14% to $12.4 million.

Fiscal 2017 Financial Guidance

Asure management revised its financial guidance for fiscal 2017 ending December 31, 2017:

2017 Financial Guidance Fiscal 2017
Revenue $54.25 million to $56.25 million (increased from $53.0 million to $56.0 million)
EBITDA, excluding one-time items $12.2 million to $13.5 million (increased from $11.9 million to $13.2)
Net Income (Loss) per Share, excluding one-time items $(0.06) to $(0.02) (revised from $(0.02) to $0.02)
Non-GAAP Net Income per Share $0.50 to $0.56 (revised from $0.50 to $0.59)

For fiscal 2017, Asure expects to achieve between $54.25 million and $56.25 million in revenue, with EBITDA, excluding one-time items, of between $12.2 million and $13.5 million, net loss per share, excluding one-time items, of between $(0.06) and $(0.02), and non-GAAP net income per share of between $0.50 and $0.56.

For fiscal 2018, Asure's objectives are to reach double-digit organic revenue growth with multiple "tuck-in" acquisitions each of approximately $2.0 million of revenue and a purchase price of about two times revenue. In addition, Asure seeks to reach between $70.0 million and $80.0 million of revenue in 2018, with EBITDA, excluding one-time items, of between $16.0 million and $20.0 million. The company plans to issue more formal financial guidance for fiscal 2018 when it reports Q3 2017 results.

Management Commentary

"Q2 represented a continuation of the same strong growth and operational momentum Asure has achieved over the last several quarters and years," said company CEO Pat Goepel. "This continued strength was demonstrated in the double-digit topline growth we realized this quarter resulting in a record $12.9 million of revenue, along with the continued expansion of our gross margins to more than 78%. These encouraging results were driven by solid contributions across our business, particularly from cloud revenue, which was up 64% year-over-year, as well as a 174% increase in cloud bookings, both metrics validating our success in scaling our cloud business. And despite higher non-recurring and non-cash expenses related to the two acquisitions we completed in the period, we were still able to generate another quarter of profitability on a non-GAAP basis. Our overall performance reflects the increasing demand for our solutions as well as the continued realization of synergies from the strategic acquisitions we have completed this...


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