SOURCE: Single Touch Systems

Single Touch Systems

August 06, 2013 16:30 ET

Single Touch Reports Third Quarter Fiscal 2013 Results

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

JERSEY CITY, NJ--(Marketwired - Aug 6, 2013) - 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.
   
   

Contact Information

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