SOURCE: Single Touch Systems

February 14, 2013 18:16 ET

Single Touch Reports First Quarter Fiscal 2013 Revenues Increase 22% to Approximately $2,000,000

On Path to Profitability on a Cash Basis During Fiscal 2013

JERSEY CITY, NJ--(Marketwire - Feb 14, 2013) - Single Touch Systems, Inc. (OTCBB: SITO), a technology based mobile media solutions provider, today reported financial results for its fiscal 2013 first quarter ended December 31, 2012.

Fiscal 2013 Q1 Highlights Include:

  • Revenues increase to nearly $2,000,000, a 22% rise over the prior year period
  • Driven by 18% organic growth in number of mobile messages -- sent 77 million in the quarter as compared to 65 million in the prior year period
  • Gross margins improved to 55%, up from 52% in the same period last year
  • Reached a record cumulative half billion mobile messages sent
  • Formed Single Touch Interactive R&D IP to protect and monetize our patents

"We are pleased with the progress achieved in the first quarter both in our operating business and in our IP monetization efforts. We anticipate continued positive developments in terms of growth and market adoption of our services and technologies, and we therefore reiterate our projection of revenue growth of more than 50% in fiscal 2013 over fiscal 2012, driven by a combination of growth through existing clients, a growing pipeline of prospective new clients and an increase in premium sponsored messaging. Our gross margins improved in the first quarter, and we anticipate that to continue, with a target 60% for the 2013 fiscal year. Based on these growth rates, we anticipate becoming profitable on a cash basis during fiscal 2013."

"Single Touch took its most important step to date regarding monetizing our robust IP portfolio," stated Single Touch Chairman and Chief Technology Officer Anthony Macaluso. "In October we established our new subsidiary, Single Touch Interactive R&D IP. This was a milestone and a very important step in unlocking the value of our IP and creating a powerful business model as a company that creates, protects and monetizes our intellectual property and technology in the mobile space."

Revenues in the first quarter increased by 22%, to $1,947,278, compared to $1,589,673 in the first quarter of fiscal 2012. Royalties and application costs, which represent the direct out-of-pocket costs associated with revenue, totaled $883,793 in the period ended December 31, 2012, compared to $763,321 in the prior year period, an increase of 16%. Because a portion of royalties and application costs is fixed and all such costs are being monitored and reduced wherever possible, they have grown at a lesser rate than revenue. Gross margin was $1,063,485, or 55%, for the first quarter of fiscal 2013, compared to $826,352, or 52%, in the same period of the prior year.

Adjusted general and administrative expenses in the first quarter of fiscal 2013 increased 51%, to $770,703, from $509,254 in the first quarter of fiscal 2012. Adjusted professional fees rose by more than $180,000, from $151,954 in the first quarter of fiscal 2012 to $335,739 in the first quarter of fiscal 2013. This increase was caused by additional legal fees both for the Company's IP monetization efforts and for compliance with SEC filing requirements, mostly one-off costs for our most recent private placement and for the registration of its underlying securities.

On a GAAP basis, loss from operations increased from $590,812 in the first quarter of fiscal 2012 to $1,922,869 in the first quarter of fiscal 2013. Adjusted EBITDA, which we define as operating income before depreciation, amortization of intangible assets, stock-based compensation, and special charges, on the other hand, narrowed to a loss of $361,542 in the first quarter of fiscal 2013 from a loss of $404,235 in the same period of the prior year.

A table reconciling operating income on a GAAP basis to Adjusted EBITDA is presented below. We use EBITDA to measure the results of our underlying business.

The Company's net loss for the fiscal quarter ended December 31, 2012 was $2,232,155, or $0.02 per basic and diluted share. This is higher than the net loss incurred during the fiscal quarter ended December 31, 2011 of $629,196, or $0.00 per basic and diluted share rounded off. 

As of December 31, 2012, the Company had cash on hand of $1,378,363, total assets of $6,486,510 and shareholders' equity of $1,067,689.

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
      December 31,
      2012     2011
             
Revenue            
  Wireless applications   $ 1,947,278   $ 1,589,673
             
Operating Expenses            
  Royalties and application costs     883,793     763,321
  Research and development     8,706     37,200
  Compensation expense (including stock based compensation of $1,109,720 in 2013 and $9,690 in 2012)            
  1,755,338     693,823
  Depreciation and amortization     154,786     155,471
  General and administrative (including stock basedcompensation of $296,821 in 2013 and $21,416 in 2012)            
  1,067,524     530,670
      3,870,147     2,180,485
             
    Loss from operations     (1,922,869)     (590,812)
             
Other Income (Expenses)            
    Interest income     21     25
    Interest expense     (308,507)     (37,609)
                 
      Net (loss) before income taxes     (2,231,355)     (628,396)
                   
      Provision for income taxes     (800)     (800)
                   
        Net income (loss)   $ (2,232,155)   $ (629,196)
             
  Basic and diluted loss per share   $ (0.02)   $ (0.00)
               
  Weighted average shares outstanding     132,472,392     130,182,392
               
               
 
SINGLE TOUCH SYSTEMS, INC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
         
    December 31,   September 30,
    2012   2012
             
Assets            
  Current assets            
    Cash and cash equivalents   $ 1,378,363   $ 2,157,707
    Overpayment due from officer     25,118     -
    Accounts receivable - trade     1,370,782     1,085,840
    Prepaid expenses     900,378     129,290
             
        Total current assets     3,674,641     3,372,837
             
  Property and equipment, net     205,155     228,499
             
  Other assets            
    Capitalized software development costs, net     403,254     383,227
    Intangible assets:            
      Patents     568,501     602,056
      Patent applications cost     719,681     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     2,606,714     1,968,419
             
        Total assets   $ 6,486,510   $ 5,569,755
                     
   
SINGLE TOUCH SYSTEMS, INC       
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS       
             
    December 31,     September 30,  
    2012     2012  
    (Unaudited)        
                 
Liabilities and Stockholders' Equity (Deficit)                
  Current liabilities                
    Accounts payable   $ 1,044,429     $ 768,263  
    Accrued expenses     226,866       200,591  
    Accrued compensation - related party     76,783       72,730  
    Current obligation on patent acquisitions     -       87,500  
    Convertible debentures - unrelated parties     104,435       294,241  
                 
      Total current liabilities     1,452,513       1,423,325  
                 
  Long-term liabilities                
    Deferred revenue     25,000       25,000  
    Convertible debenture - related party     542,087       527,512  
    Convertible debentures - unrelated parties     3,399,221       2,685,280  
      Total long-term liabilities     3,966,308       3,237,792  
                 
      Total liabilities     5,418,821       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, 132,472,392 shares issued and outstanding as of December 31, 2012 and September 30, 2012     132,472       132,472  
    Additional paid-in capital     127,816,823       125,425,617  
    Accumulated deficit     (126,881,606 )     (124,649,451 )
                 
      Total stockholders' equity     1,067,689       908,638  
                 
      Total liabilities and stockholders' equity   $ 6,486,510     $ 5,569,755  
                 
RECONCILIATION OF NON-GAAP MEASURES  
    For the Three Months Ended December 31,  
                                 
    2012     2011  
        Adjust-     Adjusted         Adjust-     Adjusted  
    GAAP   ments     EBITDA     GAAP   ments     EBITDA  
                                             
Revenue                                            
  Wireless Applications   $ 1,947,278           $ 1,947,278     $ 1,589,673           $ 1,589,673  
                                             
Operating Expenses                                            
  Royalties and Application Costs   $ 883,793           $ 883,793     $ 763,321           $ 763,321  
  Research and Development   $ 8,706           $ 8,706     $ 37,200           $ 37,200  
  Compensation expense (including stock-based compensation)   $ 1,755,338   $ (1,109,720 )   $ 645,618   * $ 693,823   $ (9,690 )   $ 684,133 *
  Depreciation and amortization   $ 154,786   $ (154,786 )   $ -     $ 155,471   $ (155,471 )   $ -  
  General and administrative (including stock-based compensation)   $ 1,067,524   $ (296,821 )   $ 770,703   * $ 530,670   $ (21,416 )   $ 509,254 *
    $ 3,870,147   $ (1,561,327 )   $ 2,308,820     $ 2,180,485   $ (186,577 )   $ 1,993,908  
Loss from Operations/Adjusted EBITDA   $ (1,922,869)   $ 1,561,327     $ (361,542)     $ (590,812)   $ 186,577     (404,235)  
                                   
      For the Three Months Ended December 31,  
                                   
      2012     2011  
          Adjust-     Adjusted         Adjust-     Adjusted  
      GAAP   ments     EBITDA     GAAP   ments     EBITDA  
                                               
  Professional Fees   $ 337,633   $ (1,894 )   $ 335,739 *   $ 166,960   $ (15,006 )   $ 151,954 *
  Travel   $ 167,843           $ 167,843     $ 138,841           $ 138,841  
  Consulting expense   $ 437,479   $ (294,927 )   $ 142,552 *   $ 106,925   $ (6,410 )   $ 100,515 *
  Office rent   $ 53,820           $ 53,820     $ 45,291           $ 45,291  
  Insurance expense   $ 28,969           $ 28,969     $ 28,156           $ 28,156  
  Equipment lease   $ -           $ -     $ -           $ -  
  Trade shows   $ 790           $ 790     $ 12,000           $ 12,000  
  Telephone   $ 12,725           $ 12,725     $ 11,610           $ 11,610  
  Office expense   $ 11,719           $ 11,719     $ 8,056           $ 8,056  
  Other   $ 16,546           $ 16,546     $ 12,831           $ 12,831  
Total General and Administrative Expenses   $ 1,067,524   $ (296,821 )   $ 770,703     $ 530,670   $ (21,416 )   $ 509,254  
                                               
* Adjustment represents the elimination of stock-based compensation recorded in accordance with GAAP but not considered in the calculation of Adjusted EBITDA.

Contact Information

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