SITO Mobile Reports March 31, 2016 Quarterly Financial Results

JERSEY CITY, N.J., May 16, 2016 (GLOBE NEWSWIRE) — SITO Mobile Ltd. (NASDAQ:SITO), a leading mobile engagement platform, today announced its results for the quarter ended March 31, 2106.

Business Highlights for March 31, 2016 Quarter

  • TOTAL REVENUE:  $6.5 million, an increase of 72% year-over-year.

  • MEDIA PLACEMENT REVENUE: (SITO Mobile’s programmatic advertising revenue) was $4.9 million, an increase of 200% year-over-year.
  • GROSS PROFIT:  $3.4 million (53% gross margin) for the March 31, 2016 quarter, up from $2.1 million (56% gross margin) for the March 31, 2015 quarter. (Please refer to the supplemental schedule below for calculation of Gross Profit and Gross Margin)

“We’ve begun 2016 with strong results and accelerating momentum,” said Jerry Hug, CEO of SITO Mobile. “We’re seeing higher levels of customer engagement in our Media Placement business – resulting in strong growth in bookings.  Our Media Placement revenue is driven largely by our Verified Walk-In measurement and attribution solution, which continues to bring excellent mobile campaign results for our clients.  We’re continually improving our platform and adding new capabilities along with new data and distribution partners, creating even better and broader reaching mobile engagement solutions.  As we move forward in 2016, our product enhancements combined with client success-to-date are bringing more clients, more campaigns and larger campaign size to SITO Mobile.  Altogether, we are driving record bookings and we are looking forward to producing significant Media Placement revenue growth for the current quarter, the balance of the year and beyond.” 

Conference call information: 

Date: Monday, May 16, 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 May 16, 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 13636445.

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 Six Months Ended  
    March 31,     March 31,  
    2016     2015     2016     2015  
                         
Revenue                        
Media placement   $ 4,861,500     $ 1,627,500     $ 10,206,970     $ 2,916,589  
Wireless applications     1,490,650       2,004,316       3,112,975       4,429,082  
Licensing and royalties     135,419       135,004       380,747       268,585  
Total Revenue     6,487,569       3,766,820       13,700,692       7,614,256  
                                 
Costs and Expenses                                
Cost of Revenue (including $252,494 and $149,708 in amortization expense for the three months ended March 31, 2016 and 2015 respectively, and $472,270 and $273,255 for the six months ended March 31, 2016 and March 31, 2015 respectively)     3,056,596       1,644,266       6,505,852       3,492,453  
Sales and marketing (including stock based compensation)     2,100,019       847,996       3,977,358       1,520,067  
General and administrative (including stock based compensation)     1,897,268       1,164,752       3,480,851       2,545,606  
Depreciation and amortization     164,360       68,081       383,585       133,278  
                                 
Total costs and expenses     7,218,243       3,725,095       14,347,646       7,691,404  
                                 
(Loss) Income from operations     (730,674 )     41,725       (646,954 )     (77,148 )
                                 
Other Income (Expenses)                                
Interest income           54,189             54,189  
Interest expense     (440,022 )     (434,425 )     (911,821 )     (851,803 )
                                 
Net loss before income taxes     (1,170,696 )     (338,511 )     (1,558,775 )     (874,762 )
                                 
Provision for income taxes                        
                                 
Net loss   $ (1,170,696 )   $ (338,511 )   $ (1,558,775 )   $ (874,762 )
                                 
Basic and diluted loss per share   $ (0.07 )   $ (0.02 )   $ (0.09 )   $ (0.06 )
                                 
Weighted average shares outstanding     17,221,412       15,366,261       17,188,265       15,346,048  
                                 

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.

       
SITO Mobile, Ltd.      
Non-GAAP Financial Measures   For the Three Months Ended  
    March 31,  
    2016     2015  
             
Net Loss   $ (1,170,696 )     $ (338,511 )  
Adjustments to reconcile net loss to EBITDA:                
Depreciation and amortization expense included in costs and expenses:                
Amortization included in cost of revenue     252,494         149,708    
Depreciation and other amortization     164,360         68,081    
Total depreciation and amortization expense     416,854         217,789    

Interest income

            (54,189 )  
Interest expense     440,022         434,425    
Provision for income taxes                
                 
EBITDA   $ (313,820 )     $ 259,514    
                 
Adjustments to reconcile EBITDA:                
Stock based compensation expense included in costs and expenses:                
Sales and marketing     74,150         23,115    
General and administrative     299,353         126,851    
Total stock based compensation expense     373,503         149,966    
                 
Adjusted EBITDA   $ 59,683       $ 409,480    
                     

SITO Mobile, Ltd.
CONDENSED CONSOLIDATED BALANCE SHEETS
           
    March 31,     September 30,
    2016     2015
    (Unaudited)      
Assets          
Current assets          
Cash and cash equivalents   $ 1,683,450     $ 2,004,139
Accounts receivable, net – current portion     6,344,822       4,265,481
Other prepaid expenses     133,701       312,606
               
Total current assets     8,161,973       6,582,226
               
Property and equipment, net     539,568       610,161
               
Other assets              
Accounts receivable, net           225,000
Capitalized software development costs, net     1,774,856       1,403,397
Intangible assets:              
Patents     407,194       493,952
Patent applications cost     936,303       826,074
Other intangible assets, net     1,642,257       1,837,227
Goodwill     6,444,225       6,444,225
Deferred loan costs, net     65,952       92,842
Other assets including security deposits     84,000       83,576
               
Total other assets     11,354,787       11,406,293
               
Total assets   $ 20,056,328     $ 18,598,680
               

CONDENSED CONSOLIDATED BALANCE SHEETS
             
    March 31,     September 30,  
    2016     2015  
    (Unaudited)        
             
Liabilities and Stockholders’ Equity            
Current liabilities            
Accounts payable   $ 5,517,438     $ 2,339,189  
Accrued expenses     1,560,625       1,062,097  
Deferred revenue     314,921       595,669  
Current obligations under capital lease     7,520       15,858  
Note payable, net – current portion     1,677,953       3,575,024  
                 
Total current liabilities     9,078,457       7,587,837  
                 
Long-term liabilities                
Obligations under capital lease     5,363       7,023  
Note payable     5,972,101       5,690,124  
                 
Total long-term liabilities     5,977,464       5,697,147  
                 
Total liabilities     15,055,921       13,284,984  
                 
Stockholders’ Equity                
Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding            
Common stock, $.001 par value; 100,000,000 shares authorized, 17,355,478 shares issued and outstanding as of March 31, 2016 and $.001 par value; 300,000,000 shares authorized, 17,155,478 shares issued and outstanding as of September 30, 2015     17,356       17,156  
Additional paid-in capital     145,479,550       144,234,264  
Accumulated deficit     (140,496,499 )     (138,937,724 )
                 
Total stockholders’ equity     5,000,407       5,313,696  
                 
Total liabilities and stockholders’ equity   $ 20,056,328     $ 18,598,680  
                 

SITO Mobile, Ltd.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
       
    For the Six Months Ended  
    March 31,  
    2016     2015  
             
Cash Flows from Operating Activities            
Net loss   $ (1,558,775 )   $ (874,762 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                
Depreciation expense     91,448       53,957  
Amortization expense – software development costs     472,270       273,255  
Amortization expense – patents     97,167       82,272  
Amortization expense – discount of debt     339,592       269,276  
Amortization expense – deferred costs     26,890       23,530  
Amortization expense – intangible assets     194,970        
Provision for bad debt     251,872       5,500  
Loss on disposition of assets     4,631        
Stock based compensation     527,431       330,780  
Changes in operating assets and liabilities:                
(Increase) in accounts receivable, net     (2,106,213 )     (749,489 )
(Increase) in other receivable           (525,000 )
Decrease (increase) in prepaid expenses     178,905       (87,390 )
(Increase) decrease in other assets     (424 )     29,967  
Increase in accounts payable     3,178,249       1,342,882  
Increase (decrease) in accrued expenses     498,528       (283,349 )
(Decrease) increase in deferred revenue     (280,748 )     188,957  
Increase (decrease) in accrued interest     221,650       (425,923 )
                 
Net cash provided by (used in) operating activities     2,137,443       (345,537 )
                 
Cash Flows from Investing Activities                
Patents and patent applications costs     (120,638 )     (244,490 )
Purchase of property and equipment     (25,486 )     (129,164 )
Capitalized software development costs     (843,729 )     (623,102 )
                 
Net cash used in investing activities   $ (989,853 )   $ (996,756 )
                 

SITO Mobile, Ltd.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
       
    For the Six Months Ended  
    March 31,  
    2016     2015  
Cash Flows from Financing Activities            
Proceeds from issuance of common stock   $ 150,055     $ 1,050,000  
Proceeds from issuance of note payable           8,205,816  
Restructuring of debt     (100,000 )      
Principal reduction on obligation under capital lease     (9,998 )     (9,801 )
Principal reduction on repayment of debt     (1,508,336 )      
Principal reduction on convertible debt           (3,708,000 )
                 
Net cash (used in) provided by financing activities     (1,468,279 )     5,538,015  
                 
Net increase in cash and cash equivalents     (320,689 )     4,195,722  
                 
Cash and cash equivalents – Beginning of period     (2,004,139 )     620,185  
                 
Cash and cash equivalents – Ending of period     1,683,450     $ 4,815,907  
                 
Supplemental Information:                
                 
Interest expense paid   $ 323,689     $ 984,919  
Income taxes paid   $     $  
                 

SITO Mobile, Ltd.
Supplemental Schedule
Amounts in thousands except percentages
                       
  March 31, 2015   June 30, 2015   September 30, 2015   Fiscal Year 2015   December 31, 2015   March 31, 2016
  Reported   Adjusted   Reported   Adjusted   Reported   Adjusted   Reported   Adjusted   Reported   Reported
Revenue                                      
Wireless Applications   2,004       2,004       1,387       1,387       1,347       1,347       7,163       7,163       1,622       1,491  
Licensing and royalties   135       135       140       140       144       144       553       553       245       135  
Media placement   1,628       1,628       2,154       2,154       3,023       3,023       8,094       8,094       5,345       4,862  
Total Revenue   3,767       3,767       3,681       3,681       4,514       4,514       15,810       15,810       7,212       6,488  
                                       
Cost of Revenue   1,580       1,644       1,445       1,807       1,513       2,164       6,358       7,463       3,449       3,057  
                                       
Gross Profit   2,187       2,123       2,236       1,874       3,001       2,350       9,452       8,347       3,763       3,431  
Gross Margin   58 %     56 %     61 %     51 %     66 %     52 %     59 %     53 %     52 %     53 %
Operating Expenses                                      
General and administrative   1,155       1,164       1,459       1,474       2,241       2,254       6,226       6,273       1,584       1,897  
Sales & marketing   912       848       1,268       906       1,849       1,198       4,729       3,624       1,877       2,100  
Research and development   9             15             13             47                    
Loss on impairment of long-lived asset                           831             831       831              
Depreciation & amortization   68       68       77       77       209       209       419       419       219       164  
Total Operating Expenses   2,144       2,080       2,819       2,457       5,143       4,492       12,252       11,147       3,680       4,162  
                                       
Income (Loss) from Operations   43       43       (583 )     (583 )     (2,142 )     (2,142 )     (2,800 )     (2,800 )     83       (731 )
                                                                               

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.

CONTACT: Contact:
Investor Relations:
Joseph Wilkinson
SVP Investor Relations
Joseph.Wilkinson@sitomobile.com

Media Relations:
Matthew Bretzius
FischTank Marketing and PR
matt@fischtankpr.com
SOURCE SITO Mobile

RELATED LINKS
http://www.sitomobile.com