Single Touch Reports Third Quarter Fiscal 2014 Financial Results

Achieves Double Digit Revenue Growth Quarter-Over-Quarter and Year-Over-Year

News provided by

Single Touch Systems, Inc.

Aug 12, 2014, 04:05 ET

JERSEY CITY, N.J., Aug. 12, 2014 /PRNewswire/ -- Single Touch Systems, Inc. (OTC BB: SITO), a technology-based mobile media solutions provider, today announced results for its fiscal third quarter ended June 30, 2014.  

Financial Highlights:

  • Revenue: For the third quarter of fiscal 2014, revenue was $2.1 million, representing an 18% increase from the previous quarter and an 11% increase from the third quarter of 2013. Revenue reflects strong growth in both media placement revenue and licensing and royalties revenue.
  • Gross Margins: For the third quarter of 2014, gross margins improved to 62%, compared to 58% for the same quarter in 2013. The increase is attributable to the media placement business that started in December 2013, having a relatively higher gross margin than the messaging business, and licensing and royalties revenue earned in the quarter for which there are no royalties and application costs. Underlying gross margin from messaging was 58% for the third quarter of 2014, which is unchanged from the third quarter of 2013.
  • Operating Profits: For the third quarter of 2014, on a pro-forma basis when separating out intellectual property (IP) related initiatives and stock based compensation expense, Single Touch's core, underlying business generated positive operating profits, a trend that has been established during fiscal year ended September 30, 2013.
  • Cash Flow: Cash flow from operations was positive for Single Touch's core business for the third quarter of 2014, a trend that has been established during fiscal year ended September 30, 2013.
  • Net Loss: Net loss for the third quarter of 2014 was $752,050, or $0.01 per share, compared to a net loss of $1.3 million, or $0.01 per share in the third quarter of 2013, which represents a 40% decrease that is primarily attributable to an increase in gross margin and a decrease in interest expense.

"We have made tremendous progress meeting our operational and strategic goals this quarter," reported Single Touch's President and CEO, James Orsini. "In line with our plan to diversify revenue, we added six new clients and acquired our technology partner, DoubleVision Networks, which brings the 'Followme' product under Single Touch's ownership and vastly increases our sales force. Additionally, we welcomed a new highly experienced board member and received overwhelming approval for a reverse stock split in order for Single Touch to become eligible to list on a national exchange.  We are confident we have positioned Single Touch to continue to capture opportunities for growth and success as the company evolves into a dominant presence in the mobile media space."

Conference call information:

Date:  Tuesday, August 12, 2014 
Time:  4:30 P.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

Participating on the call will be Single Touch's Chief Executive Officer James Orsini, Chief Financial Officer Kurt Streams, and Executive Vice President Corporate Development Jerry Hug. The Company plans to issue an earnings release prior to the call. 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/q3-2014.

A replay will be available for 2 weeks starting on August 12, 2014 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 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 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, 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.

SINGLE TOUCH SYSTEMS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS








































For the Three Months Ended

For the Nine Months Ended




June 30, 

June 30, 




2014

2013

2014

2013












Revenue









Wireless applications

$

1,940,147

$

1,924,472

$

5,844,468

$

5,680,586

Licensing and royalties

71,918

-

821,918

-

Media placement

131,500

-

201,500

-
















2,143,565

1,924,472

6,867,886

5,680,586












Operating Expenses









Royalties and application costs

817,554

804,937

2,453,343

2,465,270

Research and development

12,601

13,264

48,326

46,020

Compensation expense (including stock based compensation)* 

695,544

764,559

2,887,094

3,155,100

Depreciation and amortization

152,087

163,292

453,935

478,227

General and administrative (including stock based compensation)* 

1,033,065

950,468

3,369,460

3,024,908
















2,710,851

2,696,520

9,212,158

9,169,525














Loss from operations

(567,286)

(772,048)

(2,344,272)

(3,488,939)












Other Income (Expenses)









Interest expense

(185,274)

(490,987)

(569,097)

(1,078,540)














Net (loss) before income taxes

(752,560)

(1,263,035)

(2,913,369)

(4,567,479)














Provision for income taxes

-

-

-

-














   Net income (loss)

$

(752,560)

$

(1,263,035)

$

(2,913,369)

$

(4,567,479)













Basic and diluted loss per share

$

(0.01)

$

(0.01)

$

(0.02)

$

(0.03)













Weighted average shares outstanding

142,728,628

134,185,887

142,101,080

133,101,030


























* Details of stock based compensation included within:


















Compensation Expense

$

70,725

$

144,244

$

388,520

$

1,253,964


General Administrative 

269,647

209,517

1,060,242

696,760


Total

$

340,372

$

353,761

$

1,448,762

$

1,950,724














 

SINGLE TOUCH SYSTEMS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS











June 30,

September 30, 




2014

2013







Assets




Current assets





Cash and cash equivalents

$

1,976,201

$

1,146,995


Accounts receivable, net - current portion

1,603,209

1,347,827


Prepaid consulting

354,158

1,081,553


Other prepaid expenses 

229,581

150,183









    Total current assets

4,163,149

3,726,558








Property and equipment, net

231,426

238,815








Other assets





Accounts receivable, net

450,000

-


Prepaid consulting

-

81,547


Capitalized software development costs, net

350,486

343,575


Intangible assets:





  Patents

367,172

467,837


  Patent applications cost

1,028,096

768,646


  Software license

831,000

831,000


Other assets including security deposits

116,412

65,228









    Total other assets

3,143,166

2,557,833









    Total assets

$

7,537,741

$

6,523,206









 

SINGLE TOUCH SYSTEMS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS











June 30, 

September 30, 




2014

2013














Liabilities and Stockholders' Equity 




Current liabilities





Accounts payable 

$

1,498,296

$

1,352,203


Accrued expenses

726,186

209,323


Accrued compensation - related party

265,719

72,736


Deferred licensing revenue

303,082

-


Current obligation under capital lease

16,578

16,331


Convertible debenture - related party 

629,755

585,708


Convertible debentures - unrelated  parties 

3,480,949

2,692,570









    Total current liabilities

6,920,565

4,928,871








Long-term liabilities





Obligations under capital lease

16,914

29,378


Convertible debentures - unrelated parties 

-

440,593









    Total long-term liabilities

16,914

469,971









    Total liabilities

6,937,479

5,398,842








Commitments and contingencies - See notes 9, 11 and 16











Stockholders' Equity 





Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding

-

-


Common stock, $.001 par value; 300,000,000 shares authorized, 142,728,628 shares issued and outstanding as of June 30, 2014 and $.001 par value; 200,000,000 shares authorized, 137,220,331 shares issued and outstanding as of September 30, 2013

142,729

137,220


Additional paid-in capital

133,269,919

130,886,161


Accumulated deficit

(132,812,386)

(129,899,017)









    Total stockholders' equity 

600,262

1,124,364









    Total liabilities and stockholders' equity 

$

7,537,741

$

6,523,206







Investor Contact:
Mike Bishop
The Blueshirt Group
415-217-4968
[email protected]

SOURCE Single Touch Systems, Inc.

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