SITO Mobile, Ltd.

Single Touch Interactive, Inc.

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SITO Mobile Reports 28% Increase in Revenue for Second Quarter

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New senior leadership deploys insights-driven strategy focused on larger, multi-year recurring revenue opportunities with Fortune 500 brands and tier-1 agencies

JERSEY CITY, N.J., Aug. 14, 2017 (GLOBE NEWSWIRE) -- SITO Mobile Ltd. (NASDAQ:SITO), an insights driven consumer behavior platform, announced today its financial results for the second quarter and six months ended June 30, 2017. 

Three Months Ended June 30, 2017 and Recent Business Highlights

  • Total revenues for the three months ended June 30, 2017 increased by $2.4 million, or 28%, to $10.8 million, compared to total revenues of $8.4 million in the corresponding period of 2016 
  • Reported results include approximately $1.8 million in non-recurring expenses related to professional fees incurred for the investigation of former executives, the class action lawsuits and the contested solicitation process
  • On June 26, 2017, the Company appointed Thomas J. Pallack as Chief Executive Officer, Mark Del Priore as Chief Financial Officer and William Seagrave as Chief Operating Officer, proven leaders with a broad range of experiences that are uniquely suited for SITO to strategically transition the Company and accelerate the Company’s growth and expansion plans
  • Under our new leadership, and subsequent to the three month period ended June 30, 2017, the Company has consummated multimillion dollar insights-driven transactions with large brands, initiated a preferred agency partnership for data and media solutions, and established a CMO advisory board to consist of globally known industry experts
  • On July 28, 2017, the Company completed a $6.0 million registered direct offering, the proceeds of which were used to, among other things, repay the entire principal amount outstanding, together with accrued and unpaid interest, under the Company’s senior secured indebtedness

Tom Pallack, SITO’s Chief Executive Officer commented, “My clear mission as SITO’s new CEO is to drive long-term growth and unlock sustainable value for all our stakeholders. Since the end of June, the new SITO leadership team has begun implementing new initiatives that leverage the full capabilities of our innovative technology platform with the goal of differentiating us within the industry. The key element of our new strategy is the leveraging of our unique end-to-end technology platform and the proprietary data and analytics it assembles to help brands drive more effective campaigns.”

“SITO’s experienced leadership team has the track record, relationships and know-how to properly market this highly differentiated data-driven offering and we have begun repositioning our teams to focus on large, multi-million dollar transactions that are syndicated over multiple years with recurring revenues,” Pallack added.  “At the end of the second quarter, we began aggressively marketing SITO’s mobile data capabilities to Fortune 500 Brands and leading agencies. In the first 45 days of this effort, we have closed multiple transactions that are substantially larger than any transaction in SITO’s history. Transactions like these, featuring larger campaigns with more significant customers, better leverages our business model. Over time, we believe securing larger wins will help us expand margins and drive profitability.”

“Over the long-term, these larger, multi-year deals will provide us with a more stable foundation to accelerate growth and drive increased visibility into future revenues,” Pallack concluded. “In the near term, as we advance our strategic transition efforts, we will be focused on securing new business. The announcement of new customers and larger deals will be the most effective way to track our progress until our backlog reaches a level that provides us enough insight to offer accurate guidance. Based on our bookings to date, we expect third quarter revenues to increase year-over-year and be sequentially higher than the second quarter, and our operating and net losses should narrow in the absence of $1.8 million in non-recurring costs related to activities that occurred and concluded in the second quarter.”

Second Quarter Financial Summary

Total revenues for the three months ended June 30, 2017 increased by $2.4 million, or 28%, to $10.8 million, compared to total revenues of $8.4 million in the corresponding period of 2016.  This increase was driven primarily by the increase in media placement revenue as the Company continued to expand its direct sales force and increase our customer base.

Loss from operations for the three months ended June 30, 2017 was $2.8 million, which includes $1.8 million in non-recurring expenses in connection with professional fees incurred for the investigation of the Company’s former executives, class action lawsuits and the contested solicitation process.

Net loss for the three months ended June 30, 2017 was $3.5 million, or ($0.17) per basic and diluted share, compared to net income of $0.7 million, or $0.04 per basic and diluted share, for the corresponding period of 2016. The decline in net income was primarily due to non-recurring professional fees and an increase in headcount.

Year to Date Financial Summary

Total revenues for the six months ended June 30, 2017 increased by $4.0 million, or 30%, to $17.4 million, compared to total revenues of $13.4 million in the corresponding period of 2016. This increase was driven by an increase in media placement revenues, as the Company continued to expand its direct sales force and increase its customer base.

Loss from operations for the six months ended June 30, 2017 was $5.5 million, which includes $2.7 million in non-recurring expenses related to professional fees incurred for the investigation of former executives, the class action lawsuits and the contested solicitation process.

Net loss for the six months ended June 30, 2017 was $6.5 million, or ($0.32) per basic and diluted share, compared to $0.4 million, or ($0.03) per basic and diluted share, for the corresponding period of 2016. The decline in net income was primarily due to non-recurring professional fees and an increase in headcount.

Balance Sheet Summary

The Company completed the quarter with $3.2 million in cash and cash equivalents compared to $8.7 million at December 31, 2016. Management believes that our current cash levels and our cash flows from future operations will be adequate to meet anticipated working capital needs, anticipated levels of capital expenditures and contractual obligations for the next twelve months.

On July 28, 2017, and subsequent to the end of the second quarter, the Company completed a $6.0 million registered direct offering. On August 1, 2017, the Company used approximately $4.9 million of the proceeds raised from this offering to prepay in full all outstanding principal, accrued and unpaid interest due through the date of repayment and termination fees payable with respect to the Company’s senior secured indebtedness.

Conference call information:

Date: Monday, August 14, 2017
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

The conference call will also be webcasted live on the Investor Relations section of SITO’s IR web site at http://ir.sitomobile.com/ir-calendar.

Participating on the call will be SITO Mobile's Chief Executive Officer, Thomas Pallack; Chief Financial Officer, Mark Del Priore and Chief Operating Officer, Bill Seagrave.  The Company plans to issue an earnings release prior to the call. To join the live conference call, please dial into the above referenced telephone numbers five minutes prior to the scheduled conference call time.

A replay will be available for two weeks starting at approximately 8 p.m. ET on August 14, 2017. To access the replay, please dial 877-660-6853 in the U.S. and 201-612-7415 for international callers. The conference ID# is 13668198.

About SITO Mobile, Ltd.

SITO Mobile is transforming the manner in which brands connect with consumers in the real world by developing a mobile engagement platform that drives awareness, loyalty, and ultimately sales. In an increasingly mobile-first culture, SITO Mobile delivers proven location-based advertising solutions to Fortune 500 brands and agencies. Through innovation, the company uses proprietary data to build cutting edge, in-house technology, arming clients with the best resources for successful campaigns. Using in-store targeting, proximity targeting, geo-conquesting and attribution data, the platform creates audience profiles to develop measurable hyper-targeted campaigns for brands. SITO’s real-time location-based marketing technology gives us the unique advantage of understanding and shaping the future of retail and consumer behavior.

For more information, visit www.sitomobile.com.

                               
SITO Mobile, Ltd.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
 
      For the Three Months Ended     For the Six Months Ended
      June 30,     June 30,
      2017       2016       2017       2016  
           
Revenue 
                       
  Media placement   $ 10,725,454     $ 8,297,880     $ 17,247,586     $ 13,159,380  
  Licensing and royalties     78,667       125,946       201,496       261,365  
    Total revenue     10,804,121       8,423,826       17,449,082       13,420,745  
                         
Costs and Expenses                        
  Cost of revenue     5,626,862       3,770,916       9,021,923       6,214,053  
  Sales and marketing     3,735,131       2,690,959       7,212,042       4,814,733  
  General and administrative     4,087,978       1,204,559       6,418,432       2,880,004  
  Depreciation and amortization     120,923       149,871       282,687       304,376  
                         
Total costs and expenses     13,570,894       7,816,305       22,935,084       14,213,166  
                         
    (Loss) income from operations     (2,766,773 )     607,521       (5,486,002 )     (792,421 )
                         
Other Income (Expense)                        
  Interest expense     (352,147 )     (445,091 )     (743,761 )     (884,891 )
                         
    Net (loss) before income taxes     (3,118,920 )     162,430       (6,229,763 )     (1,677,312 )
                         
    Provision for income taxes     -       -       -       -  
                         
    Net (loss) income from continuing operations     (3,118,920 )     162,430       (6,229,763 )     (1,677,312 )
                         
Discontinued Operations                        
  (Loss) income from operations of discontinued component     (367,008 )     562,825       (315,632 )     1,231,871  
  Income tax benefit     -       -       -       -  
                         
    Net (loss) income from discontinued operations     (367,008 )     562,825       (315,632 )     1,231,871  
                         
      Net (loss) income   $ (3,485,928 )   $ 725,255     $ (6,545,395 )   $ (445,441 )
                         
  Basic net income (loss) per share                        
    Continuing operations     (0.15 )     0.01       (0.30 )     (0.10 )
    Discontinued operations     (0.02 )     0.03       (0.02 )     0.07  
    Basic net loss per share   $ (0.17 )   $ 0.04     $ (0.32 )   $ (0.03 )
                         
  Basic weighted average shares outstanding     20,693,809       17,355,478       20,687,463       17,288,445  
                         
  Diluted earnings (loss) per share                        
    Continuing operations     -       0.01       -       -  
    Discontinued operations     -       0.03       -       -  
    Diluted net earnings (loss) per share   $ -     $ 0.04     $ -     $ -  
                         
  Diluted weighted average shares outstanding     -       19,831,509       -       -  

SITO Mobile, Ltd.        
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
             
        June 30,   December 31,
        2017     2016  
        (Unaudited)    
             
Assets         
  Current assets        
    Cash and cash equivalents $   3,176,550   $   8,744,545  
    Accounts receivable, net   9,980,386       8,842,256  
    Other prepaid expenses    540,183       229,039  
    Assets held for sale - net   14,390       870,716  
             
      Total current assets   13,711,509       18,686,556  
             
  Property and equipment, net   500,581       410,688  
             
  Other assets        
    Capitalized software development costs, net   1,852,959       1,698,992  
    Intangible assets:      
      Patents     478,517       461,730  
      Patent applications cost   836,785       854,088  
      Other intangible assets, net   1,303,507       1,439,007  
    Goodwill     6,444,225       6,444,225  
    Deferred loan costs, net   20,395       37,676  
    Other assets including security deposits   92,420       112,362  
             
      Total other assets   11,028,808       11,048,080  
             
      Total assets $   25,240,898   $   30,145,324  
             
Liabilities and Stockholders' Equity       
  Current liabilities        
    Accounts payable  $   6,109,088   $   3,184,237  
    Accrued expenses   1,935,235       2,180,944  
    Deferred revenue, current portion   408,225       245,407  
    Other current liabilities, including security deposit   7,500       -   
    Current obligations under capital lease   3,576       3,446  
    Note payable, net - current portion   4,399,981       2,896,893  
    Liabilities held for sale   266,011       607,236  
             
      Total current liabilities   13,129,616       9,118,163  
             
  Long-term liabilities      
    Obligations under capital lease   936       2,756  
    Deferred revenue, noncurrent portion   985,685       -   
    Note payable, net   -        3,952,827  
             
      Total long-term liabilities   986,621       3,955,583  
             
      Total liabilities   14,116,237       13,073,746  
             
  Commitments and contingencies - See notes 16  
             
  Stockholders' Equity       
    Preferred stock, $.0001 par value, 5,000,000 shares authorized;
      none outstanding   -        -   
    Common stock, $.001 par value; 100,000,000 shares authorized,
    20,715,564 shares issued and outstanding as of June 30, 2017
    and $.001 par value; 100,000,000 shares authorized, 
    20,681,047 shares issued and outstanding as of December 31, 2016   20,715       20,680  
    Additional paid-in capital   158,428,152       157,829,709  
    Accumulated deficit   (147,324,206 )     (140,778,811 )
             
      Total stockholders' equity    11,124,661       17,071,578  
             
      Total liabilities and stockholders' equity  $   25,240,898   $   30,145,324  
 
Contacts:

Investor Relations
Rob Fink
Hayden IR
Phone: 646.415.8972
Email: SITO@haydenir.com

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Source: SITO Mobile, Ltd.
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