Lisa Flynn – Investor Relations
Patrick Goepel – Chief Executive Officer
Mike [Chadwick] – Individual Investor
Asure Software (ASUR) F1Q10 Earnings Call December 10, 2009 11:00 AM ET
Good day, ladies and gentlemen, and welcome to the first quarter 2010 Asure Software earnings conference call. My name is Grace Ann and I’ll be your operator for today. (Operator Instructions)
I would now like to turn the conference over to Lisa Flynn.
Thank you, Grace Ann, 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 our 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 can not be recorded or rebroadcast without the company’s express 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 community.
I’d now like to turn the call over to Mr. Pat Goepel, CEO of Asure Software. Pat?
Thank you, Lisa, and formally I’d like to thank our shareholders, analysts and interested parties in the first quarter call of Asure.
We’re very proud of our recent accomplishments in the last 90 days. We have now officially put the past of Forgent Networks and previous management team behind us this quarter. We are very proud of our accomplishments this quarter which included in the iEmployee business, we had a 69% increase in new booked business over the prior quarter. Our overall revenue increased slightly in a very tough environment 3% over the prior period. In addition to that, we saw a clock offering that we had not had at the beginning of the year and we had strong clock sales as well.
A key win was Keiser University in Florida in this quarter and the iEmployee business just had a significant software upgrade two days ago and it went very, very well. The NetSimplicity business line for us, as you may know from the last quarter we’re transitioning to a SaaS model or a highly repetitive model and we have had 10% revenue increase in our SaaS model. Key wins were the New York City Park Department and Fordham University. Very proud of that.
In addition to strong customer activity, product development, we have been very, very focused on expenses. Our operating expenses decreased in the quarter from previous quarter over $4 million or 55%, including expense decrease of $3.3 million. And on a go forward basis approximately $500,000 in 2010 run rate savings will be realized.
Our EBITDA excluding some one time items and excess real estate expenditure was breakeven and we’re very proud to meet that milestone. I will remind folks on the call that we have a stub period in November and December, and then we move to a calendar year 2010. And that’s in effect in January.
In 2010, we have what we’ll a 20/20 plan that’s put in place that we’ll look to exit 2010 at a 20% increase in revenue and what we will look as a EBITDA of 20%, including dealing with our real estate expense issue that we’ve highlighted in the Austin headquarters. We also have a NASDAQ appeal meeting today around the minimum bid listing requirements.
And as you know, we have a December 17 meeting where we’re encouraging all shareholders to vote on the reverse stock split. They vote on the name change formally to Asure; Board members that are currently in place and have been in place and are executing the company’s strategy; the rights plan which protects our approximately $165 million of NOLs and also our ENY auditors that are currently in place.
I’d like to remind the folks on the call that we have about 1.2 million in shares available to purchase of the 3 million authorized shares for the stock repurchase plan. And we are going to be active as we look for opportunities. We do believe the stock is under valued at this point in time.
Our cash position is close to $3 million. We are very excited in the transformation that we are undertaking. I recently was at or facilitated meetings at all our sites in Mumbai, India; Vancouver, Canada; Warrick, Rhode Island and Austin, Texas. And we are looking forward to our 2010 plan from an employee perspective where you know we have our employees engaged in the success of the company and in the profitability of Asure. Our customer satisfaction with our development of our products, milestone being this week in the iEmployee user interface, NetSimplicity going into their SaaS model and repetitive model where the customer experience rate is very, very high.
We are committed to you, the shareholder, in our financial results. This was an improvement over last quarter. November and December, we will continue our progress. We have good visibility. And EBITDA excluding some one time items and real estate should be in the same range that we’re talking about today.
And then in 2010, we will be in a mode where we’re growing and we are profitable. And that I think if you look at the past quarters, is good progress at Asure. And we’re excited about the future.
As we get through the affirmative votes and the December 17 meeting, we’ve positioned our company then to use the NOLs, to look for growth opportunities and other opportunities to unlock shareholder value and we’ll be active in doing that. And you know the business is on now a very steady course and a predictable course and now we’ll look for upside opportunities.
With that, I’m going to pause. That’s the first quarter update. I’m very pleased to be in front of you today. And with that, if there’s any questions we’d be happy to answer them.
(Operator Instructions) Your first question comes from Mike [Chadwick] – Individual Investor.
Mike [Chadwick] – Individual Investor
Pat, how are you doing?
I’m doing great. Thanks for asking a question, Mike.
Mike [Chadwick] – Individual Investor
I have one quick question regarding basically the deferred revenue growth and so forth. So it looks like we’re seeing some booking increases, particularly on the iEmployee side. When do you start to see that translate into actually a deferred revenue balance increase?
Well as the iEmployee side, so we have two sides to the business, NetSimplicity is more deferred and will be deferred on an annual basis. iEmployee is more month-to-month. So we take that deferred revenue. It has been marginally up quarter over quarter and will continue in that environment. You don’t see a year-over-year deferred revenue. You see a quarter over quarter. So you know in the iEmployee it’s a little bit different than the NetSimplicity.
Mike [Chadwick] – Individual Investor
Can you give us a little bit of, you know, color on general buying behavior and decision process with the prospective customers? Is the pipeline increasing or is the win rate beginning to pick up a little bit with some of the improvements in the economy?
Yes, I think what we’re seeing is our general interest and leads are up, which I think has been very positive. I think its all technology related products and cost improvement products. There’s interest to use technology and we’ve seen more lead traffic in the past six months and that was evidence of the wins. Our win rates or a success rate, and we have really drilled this rate down to a rep level, has been very positive and we’re excited about that. We use that win rate to start to develop our UI experience in iEmployee and our user interface which we rolled out two days ago. You know we did show customers this past quarter and they were excited about the look and feel.
So you know I think to sum it up, leads are up and the win rate is slightly up as well, and we anticipate with the new product user interface that that will continue.
And you have no further questions. I will now turn the call back over to Pat Goepel for closing remarks.
Yes, just in closing I’ve been here just north of 90 days. We had a tough 2009 with its [share], with replacing the Board and the management. You know all of that now is really put behind us. We’ve had a mental funeral. We’re over that. 2010 is going to be all about driving growth in this business and all about driving profitability. We’ve taken the tough medicine. We’ve communicated to our employees, our clients, our shareholders exactly what we’re going to do.
This quarter was evidence that you know we looked and forecasted in the fourth quarter what we would do in the first quarter. We’ve delivered on that. We’ve let you know the forecast of the stub period in November and December. We expect to deliver on that.
First quarter we’re going to be EBITDA profitable which again is another milestone. You know we’re leading indicators of the business surround product, technology, sales, are beginning to be very positive. We’re excited about the opportunity. We also have an opportunity in the expense control that we’ve taken the hard medicine. Some of those expenses will help us in 2010. And then largely at a company level, we have a NASDAQ hearing today, which we’re going to get through and hopefully have a very positive outcome.
And then December 17 we have a vote that we’re getting the vote out and we’re positioning the company for success, and we need your help in voting for the reverse stock split; ratifying the current Board members; the rights plan which allows us to use our NOLs of approximately $165 million to make acquisitions and protect the bottom line in the future; change the name officially to Asure, and then finally ENY who we’ve had a good auditor relationship with, want to continue to use them in 2010. And then just want to mention that we do have 1.2 million shares available to purchase and we do plan on being active in the marketplace as we see value opportunity.
I’m excited to be at Asure and on behalf of myself and David Sandberg, you know, we’re here to serve the shareholders of Asure and want to do that in a very positive way. We thank you for your interest. We hope you have a great holiday season. Take care.
Thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect.
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: firstname.lastname@example.org. Thank you!