Exhibit 99.1

 

  

SITO Reports Fourth Quarter and Full-Year 2018 Results

  

JERSEY CITY, N.J., March 29, 2019 -- SITO Mobile Ltd(NASDAQ: SITO), an insights-driven Consumer Behavior and Location Sciences™ company, announced today its financial results for the three months and full-year ended December 31, 2018.

 

Fourth Quarter Financial Overview

 

Revenue for the three months ended December 31, 2018 was $11.1 million
Net loss in the fourth quarter of 2018 was $1.1 million, compared to $6.8 million in the corresponding period of 2017. The year-over-year improvement reflects, among other things, a $2.2 million reduction in executive compensation, and $1.0 million in employee salary and commissions that were eliminated as part of a targeted restructuring initiative
Adjusted EBITDA* for the fourth quarter of 2018 was $145,000 compared to a loss of $2.0 million in the corresponding period of 2017
Detailed financial results for the fourth quarter and the full year ended December 31, 2018 are described in the financial summary sections below

 

Full-Year 2018 and Recent Operational Achievements

 

Strengthened the Board of Directors

oSITO Mobile Announces the Appointment of Steven Felsher, Jonathan Bond and Bonin Bough to the Board
oSITO Mobile Announces the Appointment of Brett O’Brien to the Board of Directors
oSITO Mobile Appoints Jonathan Bond Chairman of the Board

 

Raised cash from equity and retired debt to improve the balance sheet
oSITO Prices Public Offering of Common Stock
oEquity Offering Prospectus
oSITO Mobile Announces Termination of IP Revenue Sharing Agreement and Settlement of Related Litigation

 

Invested in improving our product
oSITO Mobile Strengthens Leadership Team with New Head of Product Development

 

Revamped the sales strategy to properly focus on and incentivize
oRetention and upselling of existing customer relationships
oSelling to new customers
oExpansion into new areas

 

Strengthened Financial Leadership with Appointment of New CFO
oSilicon Valley Vet Terry Lynn Joins SITO Mobile as Chief Financial Officer

 

Secured a $9.5 million financing facility to address short-term working capital needs and set relationship for scaling the business
oEntry into a Material Definitive Agreement Filing

 

“The strategic actions we took in 2018 and the early part of 2019 to restructure and strengthen our organization were necessary to better position SITO to scale our operations augment our revenue model with transformative, multi-year, consumer insights and data-driven transactions and capitalize on the significant market opportunity in front of us,” commented Tom Pallack, SITO’s Chief Executive Officer.  “Over the past several months, we have revamped and enhanced every aspect of the organization, strengthened our product offering and the ability to leverage our proprietary and unique location-based, data-driven capabilities, while streamlining our corporate structure, lowering our overall head count, bolstering our balance sheet and reducing G&A expenses. “

 

“Our business and revenue mix continue to shift towards enterprise customers that are utilizing SITO consumer insights for data-driven transactions,” Pallack added. “During the fourth quarter of 2018, sales to enterprise customers and recurring engagements leveraging our proprietary data represented 35% of our total sales. We believe we now have the right management team in place and the necessary access to capital through our new factoring agreement to effectively drive our brand direct and channel partner strategy.”

 

 

 

 

Fourth Quarter Financial Summary

 

Total revenue for the three months ended December 31, 2018 decreased by $3.6 million, or 24%, to $11.1 million, compared to $14.7 million in the corresponding period of 2017. The decrease in total revenue was primarily due to a reduction in the average spending per customer, which we are actively working to offset with an increase of enterprise data-driven engagements with larger brands and agencies.

 

Gross profit for the three months ended December 31, 2018 was $5.6 million, or 50% of total revenue, compared to $6.8 million, or 46% of total revenue, for the corresponding period of 2017.  The increase in gross profit as a percentage of total revenue was due primarily to higher gross margins in new client engagements.

 

Loss from operations for the three months ended December 31, 2018 was $1.3 million, compared to a loss from operations of $6.9 million in the corresponding period of 2017. The decrease in loss from operations was primarily due to an overall decrease in office and employee compensation expense as part of management’s strategic restructuring efforts.

 

Net loss for the three months ended December 31, 2018 was $1.1 million, or ($0.04) per basic and diluted share, compared to a net loss of $6.7 million, or ($0.31) per basic and diluted share, for the corresponding period of 2017.

 

Adjusted EBITDA* for the three months ended December 31, 2018 was $145,000, compared to a loss of $2.0 million in the corresponding period of 2017.

 

* To supplement our financial results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), SITO Mobile has presented Adjusted EBITDA, a non-GAAP financial measure, because many of our investors use these non-GAAP financial measures to monitor the Company’s performance. Generally, a non-GAAP financial measure is a quantitative assessment of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

 

Full-Year Financial Summary

 

Total revenue for the year ended December 31, 2018 declined by $3.2 million, or 7%, to $39.7 million, compared to total revenue of $42.9 million for the year ended December 31, 2017. The decrease in total revenue was primarily due to a reduction in the average spending per customer, which we are actively working to offset with an increase of enterprise data-driven engagements with larger brands and agencies.

 

Gross profit for the year ended December 31, 2018 was $18.4 million, or 46% of total revenue, compared to $20.7 million, or 48% of total revenue, for the year ended December 31, 2017. The reduction in gross profit was primarily driven by lower revenues.

 

Loss from operations for the year ended December 31, 2018 was $18.5 million, compared to a loss from operations of $14.4 million for the year ended December 31, 2017, which reflects, among other things, a decrease in revenue of $3.2 million and an increase in sales and marketing expense of $4.7 million.

 

Net loss for the year ended December 31, 2018 was $17.0 million, or ($0.68) per basic and diluted share, compared to a net loss of $15.0 million, or $(0.69) per basic and diluted share, for the year ended December 31, 2017.

 

Adjusted EBITDA* for year ended December 31, 2018 was a loss of $10.1 million, compared to an Adjusted EBITDA loss of $2.6 million for the year ended December 31, 2017.

 

Balance Sheet Summary

 

The Company ended the year with $2.6 million in cash and cash equivalents, compared to cash and cash equivalents $3.6 million at December 31, 2017. Subsequent to December 31, 2018 the company entered into a new factoring and security agreement with Fast Pay Partners LLC that provides up to $9.5 million in accounts receivable financing, with an option to expand the facility by an additional $5.5 million dollars later this year.

 

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Conference Call Information

 

Date: Friday, March 29, 2019

Time: 9:00 a.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.

 

A replay will be available for 2 weeks starting on March 29, 2018 at approximately 11:00 a.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 13689171.

 

About SITO Mobile, Ltd. 

 

SITO delivers consumer location-based data-driven solutions for brands spanning strategic insights and media campaign delivery services. Through Consumer Behavior and Location Sciences™, SITO explores the consumer journey yielding a powerful strategic knowledge asset for executives and strategic decision makers delivering actionable insights to understand and influence consumer.

Our consumer location focused science reveals deep, real-time understandings of consumer movements, interests, actions, associations, and experiences providing increased clarity for brands navigating business decisions, developing advertising campaigns, and advancing business imperatives. The company is home to a proprietary location-data technology stack and has amassed a multi-year consumer behavioral, movement, location, and demographic database arming clients with a powerful resource for identifying real-time insights, longitudinal behavioral research, and delivery of successful media campaigns. SITO’s in-store targeting, proximity targeting, geo-conquesting and attribution data combine to create and optimize measurable hyper-targeted campaigns for brands. For more information regarding SITO’s science, technology and solutions spanning media and research, visit www.sitomobile.com.

 

About Non-GAAP Financial Measures

 

We present EBITDA and Adjusted EBITDA and in this press release to provide a supplemental measure of our operating performance. We define EBITDA as earnings before interest expense, income tax expense, depreciation and amortization expense, and Adjusted EBITDA, as EBITDA before stock based compensation, certain non-recurring professional expenses related to pending or threatened contested solicitations of the Company’s shareholders, investigations of former executives, defense of certain class action lawsuits, and implementation of a section 382 rights plan. We believe EBITDA and Adjusted EBITDA are useful performance measures used by us to facilitate a comparison of our operating performance and earnings on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under generally accepted accounting principles in the United States of America (GAAP) can provide alone. The non-GAAP measures included in this release, however, should be considered in addition to, and not as a substitute for or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. Please refer to the financial tables included below for a reconciliation of GAAP to non-GAAP measures.

 

Cautionary Statement Regarding Certain Forward-Looking Information

 

This announcement contains forward-looking statements. These statements are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include statements concerning the following: SITO’s plans and initiatives; our possible or assumed future results of operations; our ability to attract and retail customers; our ability to sell additional products and services to customers; our competitive position; our industry environment; and our potential growth opportunities. You should not place undue reliance on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors” in our Annual Report on Form 10-K and the reports we file with the SEC. Actual events or results may vary significantly from those implied or projected by the forward-looking statements due to these risk factors. No forward-looking statement is a guarantee of future performance. You should read our Annual Report on Form 10-K and the documents that we reference in our Annual Report on Form 10-K and have filed as exhibits thereto with the Securities and Exchange Commission, or the SEC, with the understanding that our actual future results and circumstances may be materially different from what we expect, as described in this announcement. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as may be required by applicable law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, SITO is not guaranteeing, and cannot guarantee, future financial and operating results, levels of business activity, performance or achievements.

 

IR Contact:

Rob Fink
Hayden IR

646.415.8972

SITO@haydenir.com

 

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SITO Mobile, Ltd.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

   For the Three Months Ended   For the Years Ended 
   December 31,   December 31, 
   2018   2017   2018   2017 
                 
Revenue                
Media placement  $11,116,172   $14,696,065   $39,746,351   $42,859,777 
Licensing and royalties   -    -    -   130,653 
Total revenue   11,116,172    14,696,065    39,746,351    42,990,430 
                     
Cost of Revenue                    
Cost of revenue   5,525,155    7,878,174    21,343,912    22,242,286 
Gross profit   5,591,017    6,817,891    18,402,439    20,748,144 
                     
Operating Expenses                    
Sales and marketing   3,564,946    3,914,245    19,213,687    14,522,230 
General and administrative   3,155,437    6,194,355    17,009,684    16,029,040 
Legal settlement - See notes 16   -    3,500,000    -    3,500,000 
Depreciation and amortization   146,584    141,395    647,680    1,137,985 
Total operating expenses   6,866,967    13,749,995    36,871,051    35,189,255 
                     
Loss from operations   (1,275,950)   (6,932,104)   (18,468,612)   (14,441,111)
                     
Other Income (Expense)                    
Earnings from joint venture   -    -    -    1,464,754 
Gain (loss) on revaluation of warrant liability   207,136    158,646    1,364,704    (477,810)
Other income   1,123    -    118,753    - 
Interest income (expense), net   (6,467)   2,613    1,830    (1,296,436)
                     
Net loss before income taxes   (1,074,158)   (6,770,845)   (16,983,325)   (14,750,603)
                     
Income tax (expense) benefit   (1,886)   80,522    (82,282)   80,522 
                     
Net loss from continuing operations   (1,076,044)   (6,690,323)   (17,065,607)   (14,670,081)
                     
Discontinued Operations                    
Income from operations of discontinued component   -    (56,013)   -    (368,857)
                     
Net income from discontinued operations   -    (56,013)   -    (368,857)
                     
Net loss  $(1,076,044)  $(6,746,336)  $(17,065,607)  $(15,038,938)
                     
Basic and diluted net (loss) per share                    
Continuing operations   (0.04)   (0.30)   (0.68)   (0.69)
Discontinued operations   -    (0.00)   -    (0.02)
Basic and diluted net (loss) per share  $(0.04)  $(0.31)  $(0.68)  $(0.71)
                     
Basic and diluted weighted average shares outstanding   25,453,327    22,009,540    24,926,197    21,249,985 

 

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SITO Mobile, Ltd.

CONSOLIDATED BALANCE SHEETS

 

   December 31, 
   2018   2017 
         
Assets        
Current assets        
Cash and cash equivalents  $2,597,246   $3,611,438 
Accounts receivable, net   10,206,664    13,005,718 
Other prepaid expenses   469,041    374,380 
Assets from discontinued operations   -    10,596 
           
Total current assets   13,272,951    17,002,132 
           
Property and equipment, net   343,572    449,949 
           
Other assets          
Capitalized software development costs, net   861,699    1,485,285 
Intangible assets:          
  Patents, net   630,857    742,574 
  Other intangible assets, net   897,007    1,168,007 
Goodwill   6,444,225    6,444,225 
Other assets   114,101    92,420 
           
Total other assets   8,947,889    9,932,511 
           
Total assets  $22,564,412   $27,384,592 
           
Liabilities and Stockholders’ Equity          
Current liabilities          
Accounts payable  $4,377,805   $6,506,902 
Accrued expenses   4,610,146    9,911,540 
Deferred revenue   264,493    - 
Current obligations under capital lease   3,571    2,756 
Warrant liability   174,684    1,539,388 
Liabilities from discontinued operations   -    210,789 
           
Total current liabilities   9,430,699    18,171,375 
           
Long-term liabilities          
Obligations under capital lease   7,644    - 
           
Total long-term liabilities   7,644    - 
           
Total liabilities   9,438,343    18,171,375 
           
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, 25,529,078 shares issued and outstanding as of December 31, 2018; and 22,039,529 shares issued and outstanding as of December 31, 2017   25,527    22,038 
Additional paid-in capital   185,983,898    165,008,928 
Accumulated deficit   (172,883,356)   (155,817,749)
           
Total stockholders’ equity   13,126,069    9,213,217 
           
Total liabilities and stockholders’ equity  $22,564,412   $27,384,592 

 

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SITO Mobile, Ltd.

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

 

   For the Three Months Ended   For the Years Ended 
   December 31,   December 31, 
   2018   2017   2018   2017 
                 
Net (loss)  $(1,076,044)  $(6,746,336)  $(17,065,607)  $(15,038,938)
Net income (loss) from discontinued operations   -    (56,013)   -    (368,857)
Net (loss) from continuing operations   (1,076,044)   (6,690,323)   (17,065,607)   (14,670,081)
Adjustments to reconcile net (loss) to EBITDA:                    
Depreciation and amortization expense included in cost of revenue and operating expenses:                    
Amortization included in cost of revenue   207,690    225,609    764,375    438,094 
Depreciation and other amortization   146,584    141,395    647,680    1,137,985 
Total depreciation and amortization expense   354,274    367,004    1,412,055    1,576,079 
Interest income (expense), net   (6,467)   2,613    1,830    (1,296,436)
Income tax expense   (1,886)   80,522    (82,282)   80,522 
                     
EBITDA   (713,417)   (6,406,454)   (15,573,100)   (11,878,088)
                     
Adjustments to reconcile EBITDA:                    
Stock based compensation expense included in operating expenses:                    
Sales and marketing   302,590    342,674    1,805,944    817,061 
General and administrative   728,661    560,941    4,377,613    1,348,333 
 Total stock based compensation expense   1,031,251    903,615    6,183,557    2,165,394 
                     
Gain (loss) on warrant revaluation   207,136    158,646    1,364,704    (477,810)
                     
Certain non-recurring expenses                    
Other litigation   (8,254)   3,526,760    509,421    3,526,935 
Investigations of former executives   42,603    66,447    86,674    741,360 
Class action lawsuits   -    893    35,991    235,062 
Section 382 rights plan   -    -    -    135,228 
Contested proxy solicitation pending of threatened against the Company   -    96,780    59,998    2,020,370 
Total non-recurring expenses   34,349    3,690,880    692,084    6,658,955 
                     
Adjusted EBITDA  $145,047   $(1,970,605)  $(10,062,163)  $(2,575,929)

 

 

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