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SITO Mobile Reports First Quarter 2016 Financial Results
Globe Newswire
Quarterly Revenue of $7.2 Million Grows 87% Year-Over-Year and 60% Sequentially

JERSEY CITY, N.J., Feb. 09, 2016 (GLOBE NEWSWIRE) -- SITO Mobile Ltd. (NASDAQ:SITO), a leading mobile engagement platform, today announced results for its fiscal first quarter ended December 31, 2015.

First Quarter 2016 Business Highlights

  • TOTAL REVENUE: Total revenue was $7.2 million, an increase of 87% year-over-year and 60% sequentially.
  • MEDIA PLACEMENT REVENUE: Media Placement revenue (SITO Mobile’s programmatic advertising revenue) was $5.3 million, more than triple year-over-year and an increase of 77% sequentially over Q4 2015.
  • WIRELESS APPLICATIONS REVENUE: Wireless Applications Revenue (SITO Mobile’s SMS Revenue) was $1.6 million, an increase of 20% sequentially.
  • ADJUSTED EBITDA: SITO produced approximately $677,000 in Adjusted EBITDA compared with approximately ($764,000) Adjusted EBITDA loss in Q4 2015.
  • GROSS PROFIT: Gross Profit was $3.8 million (52% gross margin) in Q1 2016, up from $2.4 million (52% gross margin) in Q4 2015 and up from $2 million (52% Gross Margin) in Q1 2015. (Please refer to the supplemental schedule below for calculation of Gross Profit and Gross Margin)
  • CASH AND CASH EQUIVALENTS:  Cash on hand was approximately $2.6 million at the end of Q1 – an increase of approximately $600,000 from Q4.
  • INTERNATIONAL EXPANSION: Providing greater revenue visibility, SITO formalized its partnership in the Canadian market, with a commitment from Cieslok Media to deliver a minimum of $2.1 million in Media Placement revenue in calendar year 2016.

“We’re off to a great start in 2016,” said Jerry Hug, CEO of SITO Mobile. “Our performance was driven by increasing momentum in our Media Placement business and during the holiday season we saw increased demand for our proprietary mobile location-based Verified Walk-In product which continues to deliver excellent ROI to advertisers. As we look ahead, we are encouraged by SITO’s continued revenue momentum and operating leverage and we expect to produce increasing positive EBITDA in the full year of 2016 as we continue to execute on our plan.”

Conference Call Information

Date: Tuesday, February 9, 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 of the 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 February 9, 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 13629834.

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 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 
  December 31, 
  2015  2014 
       
Revenue      
Wireless applications $1,622,325  $2,424,766 
Licensing and royalties  245,328   133,581 
Media placement  5,345,470   1,289,089 
Total Revenue  7,213,123   3,847,436 
         
Costs and Expenses        
Cost of revenue (including $219,776 and $123,547 in amortization expense for the three months ended December 31, 2015 and 2014, respectively)  3,449,256   1,848,187 
Sales and marketing  1,877,339   672,071 
General and administrative  1,583,583   1,380,854 
Depreciation and amortization  219,225   65,197 
         
Total costs and expenses  7,129,403   3,966,309 
         
Income (Loss) from operations  83,720   (118,873)
         
Other Expense        
Interest expense  (471,799)  (417,378)
         
Net loss before income taxes  (388,079)  (536,251)
         
Provision for income taxes  -   - 
         
Net loss $(388,079) $(536,251)
         
Basic and diluted loss per share $(0.02) $(0.03)
         
Weighted average shares outstanding  17,155,478   15,326,275 


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 
  December 31, 
  2015  2014 
       
Net Loss $(388,079) $(536,251)
Adjustments to reconcile net loss to EBITDA:        
Depreciation and amortization expense included in costs and expenses:        
Amortization included in cost of revenue  219,776   123,547 
Depreciation and other amortization  219,225   65,197 
Total depreciation and amortization expense  439,001   188,744 
         
Interest expense  471,799   417,378 
Provision for income taxes  -   - 
         
EBITDA $522,721  $69,871 
         
Adjustments to reconcile EBITDA:        
Stock based compensation expense included in costs and expenses:        
 Sales and marketing  67,519   8,085 
 General and administrative  86,409   172,729 
 Total stock based compensation expense  153,928   180,814 
         
Adjusted EBITDA $676,649  $250,685 


SITO Mobile, Ltd. 
CONDENSED CONSOLIDATED BALANCE SHEETS 
  
  December 31,  September 30, 
  2015  2015 
  (Unaudited)    
Assets      
Current assets      
Cash and cash equivalents $2,615,184  $2,004,139 
Accounts receivable, net - current portion  6,273,838   4,265,481 
Other prepaid expenses  123,692   312,606 
         
Total current assets  9,012,714   6,582,226 
         
Property and equipment, net  585,356   610,161 
         
Other assets        
Accounts receivable, net  -   225,000 
Capitalized software development costs, net  1,600,813   1,403,397 
Intangible assets:        
Patents  445,473   493,952 
Patent applications cost  897,087   826,074 
Other intangible assets, net  1,714,477   1,837,227 
Goodwill  6,444,225   6,444,225 
Deferred loan costs, net  78,116   92,842 
Other assets including security deposits  84,829   83,576 
         
Total other assets  11,265,020   11,406,293 
         
Total assets $20,863,090  $18,598,680 

 

SITO Mobile, Ltd. 
CONDENSED CONSOLIDATED BALANCE SHEETS 
  
  December 31,  September 30, 
  2015  2015 
  (Unaudited)    
Liabilities and Stockholders' Equity      
Current liabilities      
Accounts payable $4,885,600  $2,339,189 
Accrued expenses  1,181,373   809,081 
Accrued compensation - related party  96,523   253,016 
Deferred revenue  532,909   595,669 
Current obligation under capital lease  11,699   15,858 
Note payable, net - current portion  3,984,219   3,575,024 
         
Total current liabilities  10,692,323   7,587,837 
         
Long-term liabilities        
Obligations under capital lease  6,201   7,023 
Note payable  4,934,966   5,690,124 
         
Total long-term liabilities  4,941,167   5,697,147 
         
Total liabilities  15,633,490   13,284,984 
         
Stockholders' Equity        
Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding  -   - 
Common stock, $.001 par value; 300,000,000 shares authorized, 17,155,478 shares issued and outstanding as of December 31, 2015 and as of September 30, 2015, respectively  17,156   17,156 
Additional paid-in capital  144,538,247   144,234,264 
Accumulated deficit  (139,325,803)  (138,937,724)
         
Total stockholders' equity  5,229,600   5,313,696 
         
Total liabilities and stockholders' equity $20,863,090  $18,598,680 


SITO Mobile, Ltd.  
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
  
  For the Three Months Ended 
  December 31, 
  2015  2014 
       
Cash Flows from Operating Activities      
Net loss $(388,079) $(536,251)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Depreciation expense  47,996   24,174 
Amortization expense - software development costs  219,776   123,547 
Amortization expense - patents  48,479   41,023 
Amortization expense - discount of debt  168,516   128,897 
Amortization expense - deferred costs  14,726   11,264 
Amortization expense - intangible assets  122,750   - 
Loss on disposition of assets  -   2,950 
Stock based compensation  153,928   180,814 
Changes in operating assets and liabilities:        
(Increase) in accounts receivable, net  (1,783,357)  (715,649)
Decrease in prepaid expenses  188,914   67,078 
(Increase) in other assets  (1,253)  (50,655)
Increase in accounts payable  2,546,411   737,907 
Increase (decrease) in accrued expenses  215,799   (119,839)
(Decrease) Increase in deferred revenue  (62,760)  374,067 
Increase (decrease) in accrued interest  152,189   (506,031)
         
Net cash provided by (used in) operating activities  1,644,035   (236,704)
         
Cash Flows from Investing Activities        
Patents and patent applications costs  (71,013)  (119,067)
Purchase of property and equipment  (23,191)  (21,843)
Capitalized software development costs  (417,192)  (246,791)
         
Net cash used in investing activities $(511,396) $(387,701)


SITO Mobile, Ltd. 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
  
  For the Three Months Ended 
  December 31, 
  2015  2014 
Cash Flows from Financing Activities      
Proceeds from issuance of common stock $150,055  $1,000,000 
Proceeds from issuance of note payable  -   8,205,816 
Principal reduction on obligation under capital lease  (4,981)  (4,924)
Principal reduction on issuance of debt  (666,668)  - 
Principal reduction on convertible debt  -   (3,708,000)
         
Net cash (used in) provided by financing activities  (521,594)  5,492,892 
         
Net increase in cash and cash equivalents  611,045   4,868,487 
         
Cash and cash equivalents – Beginning of period  2,004,139   620,185 
         
Cash and cash equivalents – Ending of period $2,615,184  $5,488,672 
         
Supplemental Information:        
         
Interest expense paid $136,369  $781,143 
Income taxes paid $-  $- 


SITO Mobile, Ltd. 
Supplemental Schedule 
Amounts in thousands except percentages 
                 December 31, 
  December 31, 2014  March 31, 2015  June 30, 2015  September 30, 2015  Fiscal Year 2015  2015 
  Reported  Adjusted  Reported  Adjusted  Reported  Adjusted  Reported  Adjusted  Reported  Adjusted  Reported 
Revenue                                 
Wireless applications  2,425   2,425   2,004   2,004   1,387   1,387   1,347   1,347   7,163   7,163   1,622 
Licensing and royalties  134   134   135   135   140   140   144   144   553   553   245 
Media placement  1,289   1,289   1,628   1,628   2,154   2,154   3,023   3,023   8,094   8,094   5,345 
Total Revenue  3,848   3,848   3,767   3,767   3,681   3,681   4,514   4,514   15,810   15,810   7,212 
                                             
Cost of Revenue  1,820   1,848   1,580   1,644   1,445   1,807   1,513   2,164   6,358   7,463   3,449 
                                             
Gross Profit  2,028   2,000   2,187   2,123   2,236   1,874   3,001   2,350   9,452   8,347   3,763 
Gross Margin  53%  52%  58%  56%  61%  51%  66%  52%  59%  53%  52%
Operating Expenses                                            
General and administrative  1,371   1,381   1,155   1,164   1,459   1,474   2,241   2,254   6,226   6,273   1,584 
Sales and marketing  700   672   912   848   1,268   906   1,849   1,198   4,729   3,624   1,877 
Research and development  10   -   9   -   15   -   13   -   47   -   - 
Loss on impairment of long-lived asset  -   -   -   -   -   -   831   831   831   831   - 
Depreciation and amortization  65   65   68   68   77   77   209   209   419   419   219 
Total Operating Expenses  2,146   2,118   2,144   2,080   2,819   2,457   5,143   4,492   12,252   11,147   3,680 
                                             
Income (Loss) from Operations  (118)  (118)  43   43   (583)  (583)  (2,142)  (2,142)  (2,800)  (2,800)  83 

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:
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
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