SearchCore Reports Full Year 2011 Results
Full Year Revenues Increased 256%; Income from Continuing Operations Increased 172%
NEWPORT BEACH, Calif., March 22, 2012 /PRNewswire/ -- SearchCore, Inc. (OTCBB: SRER), (OTCQX: SRER), a technology-based Internet marketing services company that connects consumers with brands, products and services, today announced its consolidated financial results for the fiscal year ended December 31, 2011.
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Fiscal Year 2011 Highlights
- Total revenues were $11.9 million, an increase of 256% over fiscal year 2010.
- EBITDA was $1.8 million, an increase of 216% over fiscal year 2010.
- Operating income was $1.5 million, an increase of 218% over the prior year.
- Income from continuing operations was $1.0 million, an increase of 172% over the prior year.
- Fully diluted income per share from continuing operations was $0.01 for both fiscal years.
Management Commentary
"We had an exceptionally strong year in 2011," said Jim Pakulis, CEO of SearchCore, Inc. "Revenues, EBITDA, and operating income all improved significantly. We generated strong cash flow from operations and we closed the year with a cash balance in excess of $1.5 million. We also made the decision to discontinue operating an unprofitable business segment. I believe SearchCore is on very solid ground for another strong year in 2012."
"I am proud to report that we exceeded both our revenue and profit expectation for 2011, which is a credit to the exceptional performance of our subsidiary, WeedMaps Media," said Doug Francis, President of SearchCore, Inc. "Throughout 2011, we carefully allocated our talent and capital resources to building out our technology base within WeedMaps. As a result, we have created a robust technology platform that enables us to continuously enhance our client service and capabilities offering. Equally important, our technology is designed to scale. Looking to the future, we anticipate leveraging our technology platform to create similarly successful finder sites in verticals beyond the cannabis industry."
Fiscal Year 2011 Financial Results
SearchCore's revenues for the year ended December 31, 2011 totaled $11.9 million, a year-over-year increase of 256% compared with $3.4 million for the year ended December 31, 2010. The increase in revenues was primarily due to an increase in the number of customers, the number of 'listing packages' offered to customers and the fees charged for the packages.
Total operating expenses were $10.5 million for 2011, or 88% of revenue, as compared with $2.9 million, or 86% of revenue for 2010. The increase in operating expenses was primarily due to higher investments in technology and expenses in support of business expansion efforts. In addition, non-cash amortization and depreciation expense increased by $0.4 million in 2011 due to recent acquisitions and expenses associated with moving into new corporate offices.
EBITDA for 2011 increased 216% to $1.8 million from $0.6 million for 2010. Operating income for 2011 increased 218% to $1.5 million, as compared with $0.5 million for 2010.
Income from continuing operations increased 172% to $1.0 million, or $0.01 per fully diluted share, for the year ending December 31, 2011, based on 83.1 million weighted average shares outstanding. This compares with income from continuing operations of $0.4 million, or $0.01 per fully diluted share, for the year ended December 31, 2010, based on 28.9 million weighted average shares outstanding.
Net loss was $3.0 million for the year ended December 31, 2011. This was primarily due to a $4.1 million loss related to the Company's decision to exit its medical clinic management business, General Health Solutions, Inc.
Balance Sheet Overview
At December 31, 2011, SearchCore had cash and equivalents of $1.5 million and total debt of $7.1 million as compared with $1.4 million in cash and equivalents and $3.6 million in total debt at December 31, 2010.
About SearchCore, Inc.
SearchCore, Inc., formerly General Cannabis, Inc., is a technology-based Internet marketing services company that offers customers an integrated suite of services including media, technology, marketing and information. Founded in 2010, SearchCore is headquartered in Newport Beach, California. The Company's common stock trades on the OTC market's highest tier, OTCQX, under the ticker symbol "SRER." www.SearchCore.com
Safe Harbor Notice
Certain statements contained herein are "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995). SearchCore, Inc. cautions that statements made in this news release constitute forward-looking statements and makes no guarantee of future performance. Forward-looking statements are based on estimates and opinions of management at the time statements are made. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections or implied results. SearchCore, Inc. undertakes no obligation to revise these statements following the date of this news release.
- financial tables to follow -
SEARCHCORE, INC. |
||||||
Consolidated Statements of Operations (Audited) |
||||||
Years Ended |
||||||
December 31, |
December 31, |
|||||
2011 |
2010 |
|||||
REVENUE |
||||||
Sales |
$ |
11,928,932 |
$ |
3,355,878 |
||
Total revenue |
11,928,932 |
3,355,878 |
||||
OPERATING EXPENSES |
||||||
Cost of sales |
793,789 |
365,702 |
||||
Selling, general and administrative expenses |
9,684,963 |
2,533,659 |
||||
Total operating expenses |
10,478,752 |
2,899,361 |
||||
Operating Income |
1,450,180 |
456,517 |
||||
Other Income (Expense) |
||||||
Interest income |
213 |
66 |
||||
Interest expense |
(13,241) |
— |
||||
Total other income (expense) |
(13,028) |
66 |
||||
INCOME FROM CONTINUING |
1,437,152 |
456,583 |
||||
Provision for Income Taxes |
416,130 |
80,914 |
||||
INCOME FROM CONTINUING OPERATIONS |
1,021,022 |
375,669 |
||||
Loss from discontinued operations, net of $133,500 and $18,100 tax benefit for the years ended December 31, 2011 and 2010, respectively |
(4,060,367) |
(25,174) |
||||
NET (LOSS) INCOME |
$ |
(3,039,345) |
$ |
350,495 |
||
Income (loss) per share, Basic and Diluted |
||||||
Income from continuing operations |
$ |
0.012 |
$ |
0.013 |
||
Loss from discontinued operations |
(0.049) |
(0.001) |
||||
Total income (loss) per share |
$ |
(0.037) |
$ |
0.012 |
||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
83,140,256 |
28,868,864 |
||||
SEARCHCORE, INC. |
||||||
Consolidated Balance Sheets (Audited) |
||||||
December 31, |
December 31, |
|||||
2011 |
2010 |
|||||
ASSETS |
||||||
CURRENT ASSETS |
||||||
Cash and cash equivalents |
$ |
1,512,590 |
$ |
1,388,574 |
||
Accounts receivable |
206,091 |
— |
||||
Inventory |
9,830 |
— |
||||
Other current assets |
379,860 |
1,104,337 |
||||
Current assets - discontinued operations |
51,795 |
— |
||||
TOTAL CURRENT ASSETS |
$ |
2,160,166 |
$ |
2,492,911 |
||
Property and equipment, net |
430,041 |
2,202 |
||||
Property and equipment - discontinued operations |
— |
44,966 |
||||
Intangible assets: |
||||||
Domain names |
114,119 |
9,076 |
||||
Domain name - Marijuana.com |
4,250,000 |
— |
||||
Web software |
501,343 |
— |
||||
Goodwill |
486,403 |
— |
||||
Intangible assets - discontinued operations |
— |
4,156,835 |
||||
Other assets |
82,332 |
900,000 |
||||
Other assets - discontinued operations |
51,976 |
33,872 |
||||
TOTAL ASSETS |
$ |
8,076,380 |
$ |
7,639,862 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
||||||
CURRENT LIABILITIES |
||||||
Accounts payable |
$ |
50,632 |
$ |
46,757 |
||
Accrued liabilities |
759,312 |
1,037,670 |
||||
Note payable |
708,901 |
— |
||||
Note payable - related party |
1,130,000 |
— |
||||
Current liabilities - discontinued operations |
243,017 |
202,596 |
||||
TOTAL CURRENT LIABILITIES |
$ |
2,891,862 |
$ |
1,287,023 |
||
LONG TERM LIABILITIES |
||||||
Other accrued liabilities |
155,025 |
900,000 |
||||
Note payable |
3,416,099 |
— |
||||
Note payable - related party |
1,800,000 |
3,600,000 |
||||
Earn-out provisions, WeedMaps |
18,362,269 |
18,362,269 |
||||
TOTAL LONG TERM LIABILITIES |
23,733,393 |
22,862,269 |
||||
TOTAL LIABILITIES |
$ |
26,625,255 |
$ |
24,149,292 |
||
STOCKHOLDERS' EQUITY |
||||||
Preferred stock, $0.001 par value: 20,000,000 shares authorized; |
||||||
zero shares issued and outstanding at December 31, 2011; |
||||||
zero shares issued and outstanding at December 31, 2010; |
— |
— |
||||
Common stock, $0.001 par value: 200,000,000 shares authorized; |
||||||
83,140,256 shares issued and outstanding at December 31, 2011; |
||||||
82,640,256 shares issued and outstanding at December 31, 2010; |
83,140 |
82,640 |
||||
Paid-in capital |
(15,965,044) |
(16,964,444) |
||||
Retained earnings (accumulated deficit) |
(2,666,971) |
372,374 |
||||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) |
(18,548,875) |
(16,509,430) |
||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
8,076,380 |
$ |
7,639,862 |
||
SEARCHCORE, INC. |
||||||
Consolidated Statements of Cash Flows (Audited) |
||||||
Years Ended |
||||||
December 31, |
December 31, |
|||||
2011 |
2010 |
|||||
Cash flows from operating activities: |
||||||
Net income from continuing operations |
$ |
(3,039,345) |
$ |
350,495 |
||
Adjustments to reconcile net income to net cash used in operating activities: |
||||||
Depreciation |
71,295 |
115,319 |
||||
Amortization |
284,856 |
— |
||||
Stock-based compensation |
— |
87,777 |
||||
Loss on abandonment |
4,142,835 |
— |
||||
Changes in operating assets and liabilities: |
||||||
Accounts receivable |
(206,091) |
— |
||||
Inventories |
(9,830) |
— |
||||
Prepaid expenses and deposits |
672,682 |
878,670 |
||||
Other assets |
54,589 |
— |
||||
Accounts payable and accrued liabilities |
(234,062) |
(62,161) |
||||
Net cash provided by operating activities |
1,736,929 |
1,370,100 |
||||
Cash flows from investing activities: |
||||||
Purchases of property and equipment |
(454,168) |
(211,781) |
||||
Purchases of intangible assets |
(488,746) |
(327,834) |
||||
Net cash used in investing activities |
(942,913) |
(539,615) |
||||
Cash flows from financing activities: |
||||||
Proceeds from issuance of common stock |
— |
1,650,000 |
||||
Payments from note payable |
— |
(40,000) |
||||
Payments from convertible notes |
— |
(419,392) |
||||
Convertible note related party |
— |
(211,489) |
||||
Payments on note payable - related party |
(670,000) |
(437,543) |
||||
Net cash used by financing activities |
(670,000) |
541,576 |
||||
Net increase (decrease) in cash and cash equivalents |
124,016 |
1,372,061 |
||||
Cash and cash equivalents at beginning of period |
1,388,574 |
16,513 |
||||
Cash and cash equivalents at end of period |
$ |
1,512,590 |
$ |
1,388,574 |
||
Non-cash investing and financing activity: |
||||||
Issuance of warrants to consultants |
— |
250,000 |
||||
Shares issued pursuant to Revyv acquisition |
$ |
500,000 |
$ |
— |
||
Shares issued pursuant to consulting agreement |
$ |
— |
$ |
50,000 |
||
SOURCE SearchCore, Inc.
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