SITO Mobile, Ltd.

Single Touch Interactive, Inc.

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Single Touch Reports Third Quarter Fiscal 2013 Results

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Conference Call Scheduled for 8:30 am ET on Wednesday, Aug 7

JERSEY CITY, NJ -- (Marketwired) -- 08/06/13 -- Single Touch Systems, Inc. (OTCBB: SITO), a technology based mobile media solutions provider, today reported financial results for the three and nine months ended June 30, 2013.

Financial Highlights:

  • Operating Profits: During the six-month period from January 2013 through June 2013, on a pro-forma basis when separating out intellectual property (IP) related initiatives, Single Touch's core, underlying business generated positive operating profits.

  • Cash Flow: Achieved cash flow breakeven, inclusive of IP-related expenses, in May and June, the last two months of the third quarter of fiscal 2013.

  • Revenue: For the third quarter of fiscal 2013, revenue increased to $1.9 million from $1.6 million for the third quarter of fiscal 2012, representing a year-over-year increase of 21%. For the nine months ended June 30, 2013, revenues increased to $5.7 million from $4.7 million for the same period of the prior year, representing a year-over-year increase of 20%. Growth in the third quarter and the nine-month period was all organic and driven by continued adoption of Single Touch's mobile programs by new and existing client relationships.

  • Gross Margin: For the third quarter of fiscal 2013, gross margin increased to 58%, from 50% in the same period of the prior year. In the nine months ended June 30, 2013 gross margin improved to 57% from 54% in the same period of 2012.

  • Adjusted EBITDA: For the third quarter of fiscal 2013, the loss on an adjusted EBITDA basis, a non-GAAP financial measure, narrowed by 28%, to ($255,000), from $(356,000) for the third quarter of fiscal 2012. For the nine months ended June 30, 2013, adjusted EBITDA was $(1,059,000) essentially flat, when compared to $(1,075,000) for the same period of the prior year.

  • Net Income (Loss): For the third quarter of fiscal 2013, net loss, on a GAAP basis, was $(1.3) million or $(0.01) per basic and diluted share, compared to a net loss of $(1.0) million or $(0.01) per basic and diluted share for the third quarter of fiscal 2012. For the nine months ended June 30, 2013, net loss was $(4.6) million or $(0.03) per basic and diluted share, compared to $(2.3) million or $(0.02) per basic and diluted share for the same period in 2012.

  • Messaging Volume: In the third quarter of fiscal 2013, Single Touch sent 75 million messages to mobile phone users. This is up 21% from 62 million messages sent in the third quarter of fiscal 2012. Messaging volume is a key business metric for the Company.

"We continue to deliver double-digit revenue growth, coupled with gross margin improvements, which exceed historical levels. We have achieved cash flow breakeven in May and June, inclusive of expenses for our IP initiatives. This is a financial goal we had previously set and we are pleased to have achieved it. When excluding IP-related expenses on a pro-forma basis, our core, underlying business generated operating profits at an increasing rate for the six-month period from January through June 2013," stated Single Touch President and CEO James Orsini.

"We are very encouraged by the scalability of our business and its implication for future results and profitability. As our messaging volume and corresponding revenues grow, we do not foresee the need for significant additional capital to fund core operations. This sets us on a course for further margin expansion, driven by volume efficiencies, continued efforts to reduce carrier cost, and the launch of new products and services."

"Our growth in the third quarter was driven by new contracts and increasing volume from previously existing contracts," Orsini added. "In the third quarter of fiscal 2013, we booked revenues from new customers including Touch Rate, an insurance provider with touchscreen quotes in a national retailer, as well as a nationwide call center client. We also saw significant message volume increases from current customers and initiatives, including a key sports retail client and the #TAXI mobile cab ordering service."

Single Touch Chairman Anthony Macaluso noted, "With respect to our efforts to unlock the value of our IP portfolio, specific members of our team are laser focused on executing our IP strategy. Due to the nature of these efforts however, we can only provide updates to our shareholders based on specific legal or contractual events. In July, following the end of our fiscal 2013 third quarter, we received what we believe to be a predominantly favorable Markman Order in our patent infringement action against Zoove. During the third quarter, in April, Single Touch was added to the IP Close Up® 30 stock index comprised of 30 publicly traded companies focused on IP. Our Company is increasingly being recognized by the investment and technology communities for the IP portfolio that we hold."

Conference Call Dial-In Information:

Date: Wednesday, August 7, 2013

Time: 8:30 A.M. Eastern Time (ET)

Dial in Number for U.S. & Canadian Callers: 877-407-8629

Dial in Number for International Callers (Outside of the U.S. & Canada): 201-493-6715

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 live webcast and archive of the call will also be available on Single Touch's website at: http://singletouch.equisolvewebcast.com/q3-2013

If you are unable to participate in the call at this time, a replay will be available for 7 days starting on August 7th 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 414392.

About Single Touch Systems, Inc.

Single Touch Systems, Inc. is a technology based mobile solutions provider serving businesses, advertisers and brands. Through patented technologies and a modular, adaptable platform, Single Touch's multi-channel messaging gateway enables marketers to reach consumers on all types of connected devices, with information that engages interest, drives transactions and strengthens relationships and loyalty. For more information about Single Touch Systems, Inc. visit: www.singletouch.net

Forward-Looking Statements

This news release may contain forward-looking statements that involve risks and uncertainties and reflect Single Touch's judgment as of the date of this release. These statements may include those regarding strategy, growth and future operations. Actual events or results may differ from Single Touch's expectations. The risks and uncertainties include reliance on brand owners and wireless carriers, the possible need for additional capital, as well as other risks identified in Single Touch's filings with the SEC. Single Touch disclaims any intent or obligation to update these forward-looking statements beyond the date of this press release, except as may be required by law.

SINGLE TOUCH SYSTEMS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
June 30, June 30,
2013 2012 2013 2012
Revenue
Wireless applications $ 1,924,472 $ 1,585,195 $ 5,680,586 $ 4,729,691
Operating Expenses
Royalties and application costs 804,937 776,881 2,465,270 2,194,512
Research and development 13,264 17,236 46,020 70,486
Compensation expense (including stock based compensation)* 764,559 959,195 3,155,100 2,332,979
Depreciation and amortization 163,292 179,534 478,227 498,609
General and administrative (including stock based compensation) * 950,488 478,707 3,024,169 1,587,120
2,696,540 2,411,553 9,168,786 6,683,706
Loss from operations (772,068 ) (826,358 ) (3,488,200 ) (1,954,015 )
Other Income (Expenses)
Interest income 20 - 61 -
Interest expense (490,987 ) (144,380 ) (1,078,540 ) (310,457 )
Net (loss) before income taxes (1,263,035 ) (970,738 ) (4,566,679 ) (2,264,472 )
Provision for income taxes - - (800 ) (800 )
Net income (loss) $ (1,263,035 ) $ (970,738 ) $ (4,567,479 ) $ (2,265,272 )
Basic and diluted loss per share $ (0.01 ) $ (0.01 ) $ (0.03 ) $ (0.02 )
Weighted average shares outstanding 134,185,887 131,710,414 133,101,030 130,779,655
*Details of stock based compensation included within:
Compensation Expense $ 144,244 $ 290,528 $ 1,253,964 $ 290,528
General and administrative $ 209,517 $ - $ 696,760 $ 90,022
Total $ 353,761 $ 290,528 $ 1,950,724 $ 380,550
SINGLE TOUCH SYSTEMS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2013 2012
Assets
Current assets
Cash and cash equivalents $ 665,884 $ 2,157,707
Accounts receivable - trade 1,283,459 1,085,840
Employee advances 3,316 -
Prepaid expenses 815,480 129,290
Total current assets 2,768,139 3,372,837
Property and equipment, net 249,789 228,499
Other assets
Capitalized software development costs, net 373,223 383,227
Intangible assets:
Patents 501,391 602,056
Patent applications cost 755,619 667,858
Software license 831,000 76,000
Deposit - related party - 155,000
Other assets including security deposits 84,278 84,278
Total other assets 2,545,511 1,968,419
Total assets $ 5,563,439 $ 5,569,755
SINGLE TOUCH SYSTEMS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2013 2012
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 1,356,107 $ 768,263
Accrued expenses 230,970 200,591
Accrued compensation - related party 73,260 72,730
Current obligation under capital lease 19,568 -
Current obligation on patent acquisitions - 87,500
Convertible debentures - unrelated parties - 294,241
Total current liabilities 1,679,905 1,423,325
Long-term liabilities
Deferred revenue - 25,000
Obligation under capital lease 33,543 -
Convertible debenture - related party 570,979 527,512
Convertible debentures - unrelated parties 3,033,545 2,685,280
Total long-term liabilities 3,638,067 3,237,792
Total liabilities 5,317,972 4,661,117
Stockholders' Equity
Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding - -
Common stock, $.001 par value; 200,000,000 shares authorized, 135,755,980 shares issued and outstanding as of June 30, 2013 and 132,472,392 shares issued and outstanding as of September 30, 2012 135,756 132,472
Additional paid-in capital 129,326,641 125,425,617
Accumulated deficit (129,216,930 ) (124,649,451 )
Total stockholders' equity 245,467 908,638
Total liabilities and stockholders' equity $ 5,563,439 $ 5,569,755
Reconciliation of Non-GAAP Measures
For the Three Months Ended June 30,
2013 2012 GAAP
Change
Adjusted EBITDA
Change
GAAP Adjust-ments Adjusted EBITDA GAAP Adjust-ments Adjusted EBITDA $ % $ %
Revenue
Wireless Applications $ 1,924,472 $ 1,924,472 $ 1,585,195 $ 1,585,195 $ 339,277 21 % $ 339,277 21 %
Operating Expenses
Royalties and Application Costs $ 804,937 $ 804,937 $ 776,881 $ 776,881 $ 28,056 4 % $ 28,056 4 %
Research and Development $ 13,264 $ 13,264 $ 17,236 $ 17,236 $ (3,972 ) -23 % $ (3,972 ) -23 %
Compensation expense (including $ - $ -
stock-based compensation) $ 764,559 $ (144,244 ) $ 620,315 * $ 959,195 $ (290,528 ) $ 668,667 * $ (194,636 ) -20 % $ (48,352 ) -7 %
Depreciation and amortization $ 163,292 $ (163,292 ) $ - $ 179,534 $ (179,534 ) $ - $ (16,242 ) -9 %
General and administrative (including $ - $ -
stock-based compensation) $ 950,488 $ (209,517 ) $ 740,971 $ 478,707 $ - $ 478,707 $ 471,781 99 % $ 262,264 55 %
$ 2,696,540 $ (517,053 ) $ 2,179,487 $ 2,411,553 $ (470,062 ) $ 1,941,491 $ 284,987 12 % $ 237,996 12 %
Loss from Operations/Adjusted EBITDA $ (772,068 ) $ 517,053 $ (255,015 ) $ (826,358 ) $ 470,062 $ (356,296 ) $ 54,290 -7 % $ 101,281 -28 %
For the Three Months Ended June 30,
2013 2012 GAAP
Change
Adjusted EBITDA
Change
GAAP Adjust-ments Adjusted EBITDA GAAP Adjust-ments Adjusted EBITDA $ % $ %
Professional Fees $ 400,835 $ 400,835 * $ 143,217 $ 143,217 * $ 257,618 180 % $ 257,618 180 %
Travel $ 48,286 $ 48,286 $ 82,006 $ 82,006 $ (33,720 ) -41 % $ (33,720 ) -41 %
Consulting expense $ 344,986 $ (209,517 ) $ 135,469 * $ 125,345 $ 125,345 * $ 219,641 175 % $ 10,124 8 %
Office rent $ 53,820 $ 53,820 $ 52,966 $ 52,966 $ 854 2 % $ 854 2 %
Insurance expense $ 51,665 $ 51,665 $ 33,565 $ 33,565 $ 18,100 54 % $ 18,100 54 %
Equipment lease $ - $ - $ - $ - $ -
Trade shows $ 1,250 $ 1,250 $ 2,949 $ 2,949 $ (1,699 ) $ (1,699 )
Telephone $ 14,093 $ 14,093 $ 14,565 $ 14,565 $ (472 ) -3 % $ (472 ) -3 %
Office expense $ 19,289 $ 19,289 $ 8,554 $ 8,554 $ 10,735 125 % $ 10,735 125 %
Other $ 16,264 $ 16,264 $ 15,540 $ 15,540 $ 724 5 % $ 724 5 %
Total General and Administrative Expenses $ 950,488 $ (209,517 ) $ 740,971 $ 478,707 $ - $ 478,707 $ 471,781 99 % $ 262,264 55 %
* Adjustments for each of these items represents the elimination of stock-based compensation included within the GAAP expense amount to arrive at the Adjusted EBITDA amount.
Reconciliation of Non-GAAP Measures
For the Nine Months Ended June 30,
2013 2012 GAAP
Change
Adjusted EBITDA
Change
GAAP Adjust-ments Adjusted EBITDA GAAP Adjust-ments Adjusted EBITDA $ % $ %
Revenue
Wireless Applications $ 5,680,586 $ - $ 5,680,586 $ 4,729,691 $ - $ 4,729,691 $ 950,895 20 % $ 950,895 20 %
Operating Expenses
Royalties and Application Costs $ 2,465,270 $ - $ 2,465,270 $ 2,194,512 $ - $ 2,194,512 $ 270,758 12 % $ 270,758 12 %
Research and Development $ 46,020 $ - $ 46,020 $ 70,486 $ - $ 70,486 $ (24,466 ) -35 % $ (24,466 ) -35 %
Compensation expense (including
stock-based compensation) $ 3,155,100 $ (1,253,964 ) $ 1,901,136 $ 2,332,979 $ (290,528 ) $ 2,042,451 * $ 822,121 35 % $ (141,315 ) -7 %
Depreciation and amortization $ 478,226 $ (478,226 ) $ - $ 498,609 $ (498,609 ) $ - $ (20,383 ) -4 %
General and administrative (including stock-based compensation) $ 3,024,170 $ (696,760 ) $ 2,327,410 $ 1,587,120 $ (90,022 ) $ 1,497,098 * $ 1,437,050 91 % $ 830,312 55 %
$ 9,168,786 $ (2,428,950 ) $ 6,739,836 $ 6,683,706 $ (879,159 ) $ 5,804,547 $ 2,485,080 37 % $ 935,289 16 %
Loss from Operations/Adjusted EBITDA $ (3,488,200 ) $ 2,428,950 $ (1,059,250 ) $ (1,954,015 ) $ 879,159 $ (1,074,856 ) $ (1,534,185 ) 79 % $ 15,606 -1 %
For the Nine Months Ended June 30,
2013 2012 GAAP
Change
Adjusted EBITDA
Change
GAAP Adjust-ments Adjusted EBITDA GAAP Adjust-ments Adjusted EBITDA $ % $ %
Professional Fees $ 1,178,327 $ (1,894 ) $ 1,176,433 * $ 491,995 $ (30,281 ) $ 461,714 * $ 686,332 139 % $ 714,719 155 %
Travel $ 297,173 $ - $ 297,173 $ 301,233 $ - $ 301,233 $ (4,060 ) -1 % $ (4,060 ) -1 %
Consulting expense $ 1,106,330 $ (694,866 ) $ 411,464 * $ 399,165 $ (59,741 ) $ 339,424 * $ 707,165 177 % $ 72,040 21 %
Office rent $ 161,460 $ - $ 161,460 $ 151,402 $ - $ 151,402 $ 10,058 7 % $ 10,058 7 %
Insurance expense $ 126,864 $ - $ 126,864 $ 93,615 $ - $ 93,615 $ 33,249 36 % $ 33,249 36 %
Equipment lease $ - $ - $ - $ - $ - $ - $ - $ -
Trade shows $ 19,577 $ - $ 19,577 $ 18,944 $ - $ 18,944 $ 633 3 % $ 633 3 %
Telephone $ 42,038 $ - $ 42,038 $ 45,594 $ - $ 45,594 $ (3,556 ) -8 % $ (3,556 ) -8 %
Office expense $ 44,126 $ - $ 44,126 $ 26,472 $ - $ 26,472 $ 17,654 67 % $ 17,654 67 %
Other $ 48,275 $ - $ 48,275 $ 58,700 $ - $ 58,700 $ (10,425 ) -18 % $ (10,425 ) -18 %
Total General and Administrative Expenses $ 3,024,170 $ (696,760 ) $ 2,327,410 $ 1,587,120 $ (90,022 ) $ 1,497,098 $ 1,437,050 91 % $ 830,312 55 %
* Adjustment represents the elimination of stock-based compensation recorded in accordance with GAAP but not considered in the calculation of Adjusted EBITDA.

Investor and Media Contact:
Robert Haag
Hampton Growth IR
877-368-3566
Email Contact

Source: Single Touch Systems

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