JERSEY CITY, N.J., Nov. 14, 2016 (GLOBE NEWSWIRE) -- SITO Mobile Ltd. (NASDAQ:SITO), a leading mobile engagement platform, today announced its results for the third quarter ended September 30, 2016.
Third Quarter 2016 Business Highlights
- TOTAL REVENUE: was $10.3 million, an increase of 129% year-over-year.
- MEDIA PLACEMENT REVENUE: (SITO Mobile’s programmatic advertising revenue) was $8.4 million, an increase of 179% year-over-year.
- GROSS PROFIT: was $5.7 million (55% gross margin), up from $2.4 million (52% gross margin) in Q3 2015. (Please refer to the supplemental schedule below for calculation of Gross Profit and Gross Margin).
- ADJUSTED EBITDA: was $1.8 million, up from a loss of $(0.7) million in Q3 of 2015. (See attached schedule for reconciliation of Adjusted EBITDA to GAAP)
- NET INCOME: was $501 thousand which equates to $0.03 (diluted) earnings per share on total (diluted) shares outstanding of 19.5 million.
“Q3 was another successful and productive quarter for SITO Mobile,” said Jerry Hug, SITO Mobile’s CEO. “Our media placement business once again delivered stellar year-over-year growth and we made good progress on our key priorities. We added new customers and increased total campaigns while also adding more partners to our data ecosystem. Our RFP pipeline is growing and our pool of opportunities is increasing as current and prospective clients begin to recognize, appreciate and embrace the value of SITO Mobile’s location-based marketing platform.”
Hug continued, “In September we raised $10.3 million in net proceeds through an equity offering. This successful offering was enabled by the strength of our strategic positioning in the mobile adtech marketplace coupled with our strong revenue growth and profitability. As a result of this offering, we added several new institutional shareholders and increased market awareness and liquidity. The proceeds from this offering strengthen our balance sheet, and provide financial flexibility as we execute our plan.”
Conference call information:
Date: Monday, November 14, 2016
Time: 4:30 P.M. Eastern Time (ET)
Dial in Number for U.S. & Canadian Callers: 877-407-8293
Dial in Number for International Callers (Outside U.S. & Canada): 201-689-8349
Participating on the call will be SITO Mobile's Chief Executive Officer Jerry Hug and Chief Financial Officer Kurt Streams. To join the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled conference call time.
A replay will be available for 2 weeks starting on November 14, 2016 at approximately 8:00 P.M. ET. To access the replay, please dial 877-660-6853 in the U.S. and 201-612-7415 for international callers. The conference ID# is 13649156.
About SITO Mobile Ltd.
SITO Mobile provides a mobile engagement platform that enables brands to increase awareness, loyalty, and ultimately sales. For more information, visit www.sitomobile.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, sales growth, our reliance on brand owners and wireless carriers, the possible need for additional capital as well as other risks identified in our filings with the SEC. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
[FINANCIAL TABLES TO FOLLOW]
| SITO Mobile, Ltd. | ||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue | ||||||||||||||||
| Media placement | $ | 8,424,099 | $ | 3,023,222 | $ | 21,583,479 | $ | 6,804,752 | ||||||||
| Wireless applications | 1,790,135 | 1,346,642 | 4,735,213 | 4,738,271 | ||||||||||||
| Licensing and royalties | 127,196 | 144,469 | 388,561 | 419,008 | ||||||||||||
| Total revenue | 10,341,430 | 4,514,333 | 26,707,253 | 11,962,031 | ||||||||||||
| Costs and Expenses | ||||||||||||||||
| Cost of revenue | 4,648,156 | 2,163,333 | 12,135,274 | 5,614,836 | ||||||||||||
| Sales and marketing | 2,798,283 | 1,198,469 | 7,561,188 | 2,951,750 | ||||||||||||
| General and administrative | 1,792,440 | 2,253,446 | 5,143,764 | 4,892,354 | ||||||||||||
| Loss on impairment of long-lived asset | - | 831,000 | - | 831,000 | ||||||||||||
| Depreciation and amortization | 164,269 | 208,891 | 489,073 | 354,333 | ||||||||||||
| Total costs and expenses | 9,403,148 | 6,655,139 | 25,329,299 | 14,644,273 | ||||||||||||
| Income (loss) from operations | 938,282 | (2,140,806 | ) | 1,377,954 | (2,682,242 | ) | ||||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest expense | (436,782 | ) | (475,265 | ) | (1,321,895 | ) | (1,309,700 | ) | ||||||||
| Net income (loss) before income taxes | 501,500 | (2,616,071 | ) | 56,059 | (3,991,942 | ) | ||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net income (loss) | $ | 501,500 | $ | (2,616,071 | ) | $ | 56,059 | $ | (3,991,942 | ) | ||||||
| Basic earnings (loss) per share | $ | 0.03 | $ | (0.16 | ) | $ | 0.00 | $ | (0.25 | ) | ||||||
| Basic weighted average shares outstanding | 17,433,011 | 16,422,988 | 17,714,960 | 15,735,226 | ||||||||||||
| Diluted earnings (loss) per share | $ | 0.03 | $ | (0.16 | ) | $ | 0.00 | $ | (0.25 | ) | ||||||
| Diluted weighted average shares outstanding | 19,573,308 | 16,422,988 | 19,762,037 | 15,735,226 | ||||||||||||
Non-GAAP Financial Measures
This press release uses Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA should not be considered a replacement for, and should be read together with, the most comparable GAAP financial measure, which is Operating Profit (Loss). A reconciliation of Adjusted EBITDA to Operating Profit (Loss) is included herein.
To supplement our financial results and guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures in this press release, including EBITDA. The Company believes that non-GAAP financial measures are helpful in understanding its past financial performance and potential future results, particularly in light of the effect of various acquisition transactions effected by the Company. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for or superior to comparable GAAP measures and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP.
Management excludes stock based compensation expense because they believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. In particular, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC 718, we believe that providing non-GAAP financial measures that exclude this expense allows investors to make more meaningful comparisons between our operating results and those of other companies. Accordingly, management believes that excluding this expense provides investors and management with greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitate comparison with the results of other companies in our industry. Management uses Adjusted EBITDA in managing and analyzing its business and financial condition. Management believes that the presentation of non-GAAP financial measures provides investors greater transparency into ongoing results of operations allowing investors to better compare the Company's results from period to period.
| For the Three Months Ended September 30 | For the Nine Months Ended September 30 | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net income (loss) | 501,500 | (2,616,071 | ) | 56,059 | (3,991,942 | ) | ||||||||||
| Adjustments to reconcile net income (loss) to EBITDA: | ||||||||||||||||
| Depreciation and amortization expense included in costs and expenses: | ||||||||||||||||
| Amortization included in cost of revenue | 292,955 | 226,593 | 820,744 | 553,005 | ||||||||||||
| Depreciation and other amortization | 164,269 | 208,891 | 489,073 | 354,333 | ||||||||||||
| Total depreciation and amortization expense | 457,224 | 435,484 | 1,309,817 | 907,338 | ||||||||||||
| Interest expense | 436,782 | 475,265 | 1,321,895 | 1,309,700 | ||||||||||||
| Loss on impairment of long-lived asset | - | 831,000 | - | 831,000 | ||||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| EBITDA | 1,395,506 | (874,322 | ) | 2,687,771 | (943,904 | ) | ||||||||||
| Adjustments to reconcile EBITDA: | ||||||||||||||||
| Stock based compensation expense included in costs and expenses: | ||||||||||||||||
| Sales and marketing | 70,728 | 30,366 | 220,090 | 66,521 | ||||||||||||
| General and administrative | 304,961 | 174,790 | 715,033 | 319,540 | ||||||||||||
| Total stock based compensation expense | 375,689 | 205,156 | 935,123 | 386,061 | ||||||||||||
| Adjusted EBITDA | 1,771,195 | (669,166 | ) | 3,622,894 | (557,843 | ) | ||||||||||
| SITO Mobile, Ltd. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| September 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 9,836,888 | $ | 2,615,184 | ||||
| Accounts receivable, net | 9,813,623 | 6,167,816 | ||||||
| Other prepaid expenses | 287,707 | 123,692 | ||||||
| Total current assets | 19,938,218 | 8,906,692 | ||||||
| Property and equipment, net | 458,348 | 585,356 | ||||||
| Other assets | ||||||||
| Capitalized software development costs, net | 1,858,921 | 1,600,813 | ||||||
| Intangible assets: | ||||||||
| Patents | 514,327 | 445,473 | ||||||
| Patent applications cost | 811,248 | 897,087 | ||||||
| Other intangible assets, net | 1,506,757 | 1,714,477 | ||||||
| Goodwill | 6,444,225 | 6,444,225 | ||||||
| Deferred loan costs, net | 47,023 | 78,116 | ||||||
| Other assets including security deposits | 108,938 | 84,829 | ||||||
| Total other assets | 11,291,439 | 11,265,020 | ||||||
| Total assets | $ | 31,688,005 | $ | 20,757,068 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 4,412,043 | $ | 4,828,600 | ||||
| Accrued expenses | 1,953,505 | 1,277,896 | ||||||
| Deferred revenue | 431,780 | 532,909 | ||||||
| Current obligations under capital lease | 3,402 | 11,699 | ||||||
| Note payable, net - current portion | 2,475,304 | 3,984,219 | ||||||
| Total current liabilities | 9,276,034 | 10,635,323 | ||||||
| Long-term liabilities | ||||||||
| Obligations under capital lease | 3,622 | 6,201 | ||||||
| Note payable, net | 4,644,983 | 4,934,966 | ||||||
| Total long-term liabilities | 4,648,605 | 4,941,167 | ||||||
| Total liabilities | 13,924,639 | 15,576,490 | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding | - | - | ||||||
| Common stock, $.001 par value; 100,000,000 shares authorized, 20,587,770 shares issued and outstanding as of September 30, 2016 and $.001 par value; 300,000,000 shares authorized, 17,157,520 shares issued and outstanding as of December 31, 2015 | 20,587 | 17,156 | ||||||
| Additional paid-in capital | 157,061,545 | 144,538,247 | ||||||
| Accumulated deficit | (139,318,766 | ) | (139,374,825 | ) | ||||
| Total stockholders' equity | 17,763,366 | 5,180,578 | ||||||
| Total liabilities and stockholders' equity | $ | 31,688,005 | $ | 20,757,068 | ||||
| SITO Mobile, Ltd. | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| For the Three Months Ended | ||||||||
| September 30, | ||||||||
| 2016 | 2015 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net income (loss) | $ | 501,500 | $ | (2,616,071 | ) | |||
| Adjustments to reconcile net income (loss) to net cash (used in) operating activities: | ||||||||
| Depreciation expense | 43,774 | 47,117 | ||||||
| Amortization expense - software development costs | 292,956 | 230,689 | ||||||
| Amortization expense - patents | 52,744 | 49,001 | ||||||
| Amortization expense - discount of debt | 200,281 | 165,681 | ||||||
| Amortization expense - deferred costs | 9,497 | 14,478 | ||||||
| Amortization expense - intangible assets | 67,750 | 112,773 | ||||||
| Provision for bad debt | (10,673 | ) | 240,000 | |||||
| Loss on disposition of assets | 237 | - | ||||||
| Loss on impairment of long-lived asset | - | 831,000 | ||||||
| Stock based compensation | 375,689 | 336,835 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) in accounts receivable, net | (983,224 | ) | (298,682 | ) | ||||
| (Increase) in prepaid expenses | (196,655 | ) | (98,008 | ) | ||||
| Decrease (increase) in other assets | - | 50,000 | ||||||
| (Decrease) increase in accounts payable | (2,425,512 | ) | 545,993 | |||||
| Increase in accrued expenses | 158,268 | 72,511 | ||||||
| (Decrease) in deferred revenue | (132,195 | ) | (280,214 | ) | ||||
| Increase in accrued interest | 60,567 | 87,116 | ||||||
| Net cash provided by (used in) operating activities | (1,984,996 | ) | (509,781 | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Patents and patent applications costs | (42,803 | ) | (119,869 | ) | ||||
| Purchase of property and equipment | (11,050 | ) | (140,922 | ) | ||||
| Proceeds from sale of property and equipment | 700 | - | ||||||
| Capitalized software development costs | (305,546 | ) | (541,592 | ) | ||||
| Purchase of intangible assets | - | (1,300,000 | ) | |||||
| Net cash (used in) investing activities | $ | (359,399 | ) | $ | (2,102,383 | ) | ||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from issuance of common stock | $ | 12,203,605 | $ | 1,909,000 | ||||
| Stock issuance costs | (1,180,000 | ) | (75,000 | ) | ||||
| Restructuring of debt | - | - | ||||||
| Principal reduction on obligation under capital lease | (807 | ) | (4,946 | ) | ||||
| Principal reduction on repayment of debt | (525,000 | ) | - | |||||
| Net cash provided by financing activities | 10,497,798 | 1,829,054 | ||||||
| Net decrease in cash and cash equivalents | 8,154,103 | (783,110 | ) | |||||
| Cash and cash equivalents - beginning of period | 1,682,785 | 2,787,250 | ||||||
| Cash and cash equivalents - ending of period | $ | 9,836,888 | $ | 2,004,140 | ||||
| Supplemental Information: | ||||||||
| Interest expense paid | $ | 232,238 | $ | 208,161 | ||||
| Income taxes paid | $ | 16,900 | $ | 4,600 | ||||
| SITO Mobile, Ltd. | ||||||||||||||||||||||||||||||||
| Supplemental Schedule | ||||||||||||||||||||||||||||||||
| Amounts in thousands except percentages | ||||||||||||||||||||||||||||||||
| September 30, 2015 | December 31, 2015 | Fiscal Year 2015 | March 31, 2016 | June 30, 2016 | September 30, 2016 | |||||||||||||||||||||||||||
| Reported | Adjusted | Reported | Reported | Adjusted | Reported | Reported | Reported | |||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||
| Media placement | 3,023 | 3,023 | 5,345 | 12,150 | 12,150 | 4,862 | 8,298 | 8,424 | ||||||||||||||||||||||||
| Wireless Applications | 1,347 | 1,347 | 1,622 | 6,360 | 6,360 | 1,491 | 1,454 | 1,790 | ||||||||||||||||||||||||
| Licensing and royalties | 144 | 144 | 245 | 664 | 664 | 135 | 126 | 127 | ||||||||||||||||||||||||
| Total Revenue | 4,514 | 4,514 | 7,212 | 19,174 | 19,174 | 6,488 | 9,878 | 10,341 | ||||||||||||||||||||||||
| Cost of Revenue | 1,513 | 2,164 | 3,449 | 7,987 | 9,064 | 3,057 | 4,431 | 4,648 | ||||||||||||||||||||||||
| Gross Profit | 3,001 | 2,350 | 3,763 | 11,187 | 10,110 | 3,431 | 5,448 | 5,693 | ||||||||||||||||||||||||
| Gross Margin | 66 | % | 52 | % | 52 | % | 58 | % | 53 | % | 53 | % | 55 | % | 55 | % | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||
| General and administrative | 2,241 | 2,254 | 1,584 | 6,439 | 6,476 | 1,897 | 1,454 | 1,792 | ||||||||||||||||||||||||
| Sales & marketing | 1,849 | 1,198 | 1,877 | 5,906 | 4,829 | 2,100 | 2,663 | 2,798 | ||||||||||||||||||||||||
| Research and development | 13 | 0 | 0 | 37 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Loss on impairment of long-lived asset | 831 | 831 | 0 | 831 | 831 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Depreciation & amortization | 209 | 209 | 219 | 573 | 573 | 164 | 160 | 164 | ||||||||||||||||||||||||
| Total Operating Expenses | 5,143 | 4,492 | 3,680 | 13,786 | 12,709 | 4,161 | 4,276 | 4,755 | ||||||||||||||||||||||||
| Income (Loss) from Operations | (2,142 | ) | (2,142 | ) | 83 | (2,599 | ) | (2,599 | ) | (730 | ) | 1,171 | 938 | |||||||||||||||||||
Note: Certain reclassifications have been made to conform the fiscal 2015 quarterly amounts to the fiscal 2016 classifications for comparative purposes. The Company is reporting a vendor cost in cost or revenue that had been previously reported in sales and marketing expense and is reporting research and development cost in general and administrative expense. The changes are only expense reclassifications and do not affect revenue, total costs and revenues, income (loss) from operations, net income or any balance sheet accounts. Amounts affected by the reclassification are shown in bold in the table above.