In a release issued under the same headline yesterday by SITO
Mobile Ltd. (NASDAQ: SITO), please note that in the fifth paragraph
of the Third Quarter Financial Summary, the Adjusted EBITDA* loss
for the three months ended September 30, 2017 should be
approximately $32,000, not $10.1 million as previously stated.
The corrected release follows:
SITO Mobile Reports Third Quarter 2018
Results
Company moves up earnings conference call
to Friday November 16th at 2 p.m. ET
SITO Mobile Ltd. (NASDAQ: SITO), an
insights-driven Consumer Behavior and Location Sciences™ company,
announced today its financial results for the three and nine months
ended September 30, 2018.
Third Quarter Financial and Recent Business
Highlights
- Revenues for the three months ended September 30, 2018 of $9.1
million
- Gross profit for the third quarter of 2018 was $4.3 million, or
48% of total revenue, compared to $5.6 million, or 51% of total
revenue, for the corresponding period of 2017
- Net loss in the third quarter of 2018 was $5.0 million
- Adjusted EBITDA* loss for the third quarter of 2018 was $3.2
million
- Subsequent to quarter end, the Company appointed Alex Cherones,
the former Director of Security Solutions at AT&T as its new
Head of Product Development
- Subsequent to the end of the third quarter, the Company
announced a strategic data analytics partnership with Pure Flix, an
independent faith and family movie studio to drive verified traffic
into theaters as well as promote transparency and efficiency
leading to optimal decision-making with its theatrical film
releases
“We significantly strengthened our organization beginning in the
third quarter adding accomplished executives to our board, seasoned
enterprise sales professionals to our team, and a new Head of
Product Development to expand our leadership,” commented Tom
Pallack, SITO’s Chief Executive Officer. “We are attracting
industry leading talent with the relevant experience, relationships
and history of success needed to better position our
location-based, proprietary data-driven mobile solutions to larger
and more significant customers.”
“Our business is evolving, and our revenue mix is shifting more
towards consumer insights and data-driven transactions with
enterprise customers,” Pallack added. “As we increase the scale of
multi-year and recurring enterprise engagements, we will become
less reliant on one-time campaign-driven media placement revenues
which will increase our viability and accelerate our growth.”
Third Quarter Financial Summary
Total revenue for the three months ended September 30, 2018
decreased 17%, or $1.8 million, to $9.1 million compared to $10.9
million in the corresponding period of 2017. This decrease in
total revenue was primarily due to a reduction in the average spend
per customer which we are actively working to offset with an
increase of enterprise data-driven engagements with larger brands
and agencies.
Gross profit for the three months ended September 30, 2018 was
$4.3 million, or 48% of total revenue, compared to $5.6 million, or
51% of total revenue, for the corresponding period of 2017.
The decrease in gross profit as a percentage of total revenue was
due primarily to lower gross margins in new client assignments.
Loss from operations for the three months ended September 30,
2018 was $5.2 million compared to a loss from operations of $1.9
million in the corresponding period of 2017. The increase/decrease
in loss from operations was primarily due to a $1.3 million
decrease in gross profit and a $1.9 million increase in operating
expenses as we continue to invest in the growth of our
business.
Net loss for the three months ended September 30, 2018 was $5.0
million, or ($0.20) per basic and diluted share, compared to a net
loss of $3.1 million, or ($0.14) per basic and diluted share, in
the corresponding period of 2017.
Adjusted EBITDA* for the three months ended September 30, 2018
was a loss of $3.2 million compared to Adjusted EBITDA* loss of
approximately $32,000 in the corresponding period of 2017.
* SITO Mobile has presented Adjusted EBITDA, a non-GAAP measure,
because many of our investors use these non-GAAP measures to
monitor the Company’s performance. Generally, a non-GAAP financial
measure is a quantitative assessment of a Company’s performance,
financial position or cash flow that either excludes or includes
amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance
with GAAP. It should not be considered an alternative to GAAP
measures as an indicator of the Company’s operating
performance.
Cash used in operations for the nine months ended September 30,
2018 was $13.6 million compared to $4.3 million for the
corresponding period in 2017. The increase is inclusive of a $3.5
million legal settlement, year-end bonuses for fiscal 2017, and
various professional fees for legal, audit, and other services.
Balance Sheet Summary
As of September 30, 2018, the Company had $4.6 million in cash
and cash equivalents compared to $3.6 million at December 31,
2017.
Conference call information:
Date: Friday, November 16, 2018Time: 2:00 p.m.
Eastern Time (ET)Dial in Number for U.S. & Canadian Callers:
877-407-8293Dial in Number for International Callers (Outside U.S.
& Canada): 201-689-8349
The conference call will also be webcasted live
on the Investor Relations section of SITO’s IR web site at
http://ir.sitomobile.com/ir-calendar.
A replay will be available for two weeks
starting on November 16, 2018 at approximately 8 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 13685224.
About SITO Mobile, Ltd.
SITO turns the consumer journey into a powerful instrument for
marketers, delivering actionable insights that influence behavior
in real-time. Through Consumer Behavior and Location Sciences™,
SITO develops customized, data-driven solutions for brands spanning
strategic insights and media. Our science and products reveal a
deeper, real-time understanding of customer interests, actions and
experiences providing increased clarity for brands when it comes to
navigating business decisions and delivering advertising. The
Company is home to an internally developed, proprietary
location-data technology stack, arming clients with a powerful
resource for granular data, real-time insights and optimization,
and delivery of successful media campaigns. Using in-store
targeting, proximity targeting, geo-conquesting and attribution
data, SITO creates audience profiles to develop measurable
hyper-targeted campaigns for brands. For more information regarding
SITO’s science, technology and customized solutions spanning media
and research, visit www.sitomobile.com.
About Non-GAAP Financial Measures
We present EBITDA and Adjusted EBITDA and in this press release
to provide a supplemental measure of our operating performance. We
define EBITDA as earnings before interest expense, income tax
expense, depreciation and amortization expense, and Adjusted
EBITDA, as EBITDA before stock based compensation, certain
non-recurring professional expenses related to pending or
threatened contested solicitations of the Company’s shareholders,
investigations of former executives, defense of certain class
action lawsuits, and implementation of a section 382 rights plan.
We believe EBITDA and Adjusted EBITDA are useful performance
measures used by us to facilitate a comparison of our operating
performance and earnings on a consistent basis from
period-to-period and to provide for a more complete understanding
of factors and trends affecting our business than measures under
generally accepted accounting principles in the United States of
America (GAAP) can provide alone. The non-GAAP measures included in
this release, however, should be considered in addition to, and not
as a substitute for or superior to, operating income, cash flows,
or other measures of financial performance prepared in accordance
with GAAP. Please refer to the financial tables included below for
a reconciliation of GAAP to non-GAAP measures.
Cautionary Statement Regarding Certain Forward-Looking
Information
This press release contains forward-looking statements. These
statements are based on our management’s beliefs and assumptions
and on information currently available to our management.
Forward-looking statements include statements concerning the
following: SITO’s plans and initiatives; our possible or assumed
future results of operations; our ability to attract and retail
customers; our ability to sell additional products and services to
customers; our competitive position; our industry environment; and
our potential growth opportunities. You should not place undue
reliance on forward-looking statements, because they involve known
and unknown risks, uncertainties and other factors, which are, in
some cases, beyond our control and which could materially affect
results. Factors that may cause actual results to differ materially
from current expectations include, among other things, those listed
under “Risk Factors” in our Annual Report on Form 10-K, for the
year ended December 31, 2017, our Quarterly Reports on Form 10-Q
for the quarter ended March 31, 3018 and June 30, 2018, and the
other reports we file with the SEC. Actual events or results may
vary significantly from those implied or projected by the
forward-looking statements due to these risk factors. No
forward-looking statement is a guarantee of future performance. You
should read our Annual Report on Form 10-K, our Quarterly Report on
Form 10-Q and the documents that we reference in our Annual Report
on Form 10-K, our Quarterly Report on Form 10-Q and have filed as
exhibits thereto with the Securities and Exchange Commission, or
the SEC, with the understanding that our actual future results and
circumstances may be materially different from what we expect.
Forward-looking statements are made based on management’s beliefs,
estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if
these beliefs, estimates and opinions or other circumstances should
change, except as may be required by applicable law. Although we
believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
Contact:
Investor RelationsRob FinkHayden IRPhone: 646.415.8972Email:
SITO@haydenir.com
Source: SITO Mobile, Ltd.
SITO MOBILE, LTD.Condensed Consolidated
Statements of Operations(Unaudited)
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Media placement |
|
$ |
9,056,963 |
|
|
$ |
10,916,126 |
|
|
$ |
28,630,179 |
|
|
$ |
28,163,712 |
|
Licensing
and royalties |
|
|
- |
|
|
|
70,726 |
|
|
|
- |
|
|
|
130,653 |
|
Total revenue |
|
|
9,056,963 |
|
|
|
10,986,852 |
|
|
|
28,630,179 |
|
|
|
28,294,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
|
4,718,727 |
|
|
|
5,342,189 |
|
|
|
15,818,757 |
|
|
|
14,364,112 |
|
Gross profit |
|
|
4,338,236 |
|
|
|
5,644,663 |
|
|
|
12,811,422 |
|
|
|
13,930,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
|
4,875,669 |
|
|
|
3,395,943 |
|
|
|
15,648,741 |
|
|
|
10,607,985 |
|
General
and administrative |
|
|
4,481,234 |
|
|
|
3,416,253 |
|
|
|
13,854,247 |
|
|
|
9,834,685 |
|
Depreciation and amortization |
|
|
144,803 |
|
|
|
713,903 |
|
|
|
501,096 |
|
|
|
996,590 |
|
Total operating expenses |
|
|
9,501,706 |
|
|
|
7,526,099 |
|
|
|
30,004,084 |
|
|
|
21,439,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(5,163,470 |
) |
|
|
(1,881,436 |
) |
|
|
(17,192,662 |
) |
|
|
(7,509,007 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
from joint venture |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,464,754 |
|
Gain
(loss) on revaluation of warrant liability |
|
|
182,048 |
|
|
|
(636,456 |
) |
|
|
1,157,568 |
|
|
|
(636,456 |
) |
Other
income |
|
|
- |
|
|
|
- |
|
|
|
117,630 |
|
|
|
- |
|
Interest
income (expense), net |
|
|
2,404 |
|
|
|
(555,288 |
) |
|
|
8,297 |
|
|
|
(1,299,049 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before income taxes |
|
|
(4,979,018 |
) |
|
|
(3,073,180 |
) |
|
|
(15,909,167 |
) |
|
|
(7,979,758 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense |
|
|
(26,952 |
) |
|
|
- |
|
|
|
(80,369 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operations |
|
|
(5,005,943 |
) |
|
|
(3,073,180 |
) |
|
|
(15,989,536 |
) |
|
|
(7,979,758 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations of discontinued component |
|
|
- |
|
|
|
2,788 |
|
|
|
- |
|
|
|
(312,844 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from discontinued
operations |
|
|
- |
|
|
|
2,788 |
|
|
|
- |
|
|
|
(312,844 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(5,005,943 |
) |
|
$ |
(3,070,392 |
) |
|
$ |
(15,989,536 |
) |
|
$ |
(8,292,602 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
(0.20 |
) |
|
|
(0.14 |
) |
|
|
(0.65 |
) |
|
|
(0.38 |
) |
Discontinued operations |
|
|
- |
|
|
|
(0.00 |
) |
|
|
- |
|
|
|
(0.01 |
) |
Basic and diluted net loss per share |
|
$ |
(0.20 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.65 |
) |
|
$ |
(0.39 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares
outstanding |
|
|
25,374,545 |
|
|
|
21,597,130 |
|
|
|
24,748,556 |
|
|
|
20,994,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SITO MOBILE, LTD.Condensed Consolidated
Balance Sheets
|
|
September 30, |
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
4,628,333 |
|
|
|
$ |
3,611,438 |
|
Accounts receivable, net |
|
|
9,125,447 |
|
|
|
|
13,005,718 |
|
Prepaid expenses |
|
|
605,100 |
|
|
|
|
374,380 |
|
Assets from discontinued operations |
|
|
- |
|
|
|
|
10,596 |
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
14,358,880 |
|
|
|
|
17,002,132 |
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
380,093 |
|
|
|
|
449,949 |
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
|
|
Capitalized software development costs, net |
|
|
971,263 |
|
|
|
|
1,485,285 |
|
Intangible assets: |
|
|
|
|
|
|
|
|
|
Patents, net |
|
|
637,353 |
|
|
|
|
742,574 |
|
Other intangible assets, net |
|
|
964,757 |
|
|
|
|
1,168,007 |
|
Goodwill |
|
|
6,444,225 |
|
|
|
|
6,444,225 |
|
Other assets |
|
|
109,003 |
|
|
|
|
92,420 |
|
|
|
|
|
|
|
|
|
|
|
Total other assets |
|
|
9,126,601 |
|
|
|
|
9,932,511 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
23,865,574 |
|
|
|
$ |
27,384,592 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts
payable |
|
$ |
4,155,128 |
|
|
$ |
6,506,902 |
|
Accrued
expenses |
|
|
5,794,867 |
|
|
|
9,911,540 |
|
Deferred
revenue |
|
|
350,772 |
|
|
|
- |
|
Current
obligations under capital lease |
|
|
3,556 |
|
|
|
2,756 |
|
Warrant
liability |
|
|
381,820 |
|
|
|
1,539,388 |
|
Liabilities from discontinued operations |
|
|
- |
|
|
|
210,789 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
10,686,143 |
|
|
|
18,171,375 |
|
|
|
|
|
|
|
|
|
|
Long-term liabilities |
|
|
|
|
|
|
|
|
Obligations under capital lease |
|
|
8,542 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total long-term liabilities |
|
|
8,542 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
10,694,685 |
|
|
|
18,171,375 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies - See notes 16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Preferred
stock, $.0001 par value, 5,000,000 shares authorized; none
outstanding |
|
|
- |
|
|
|
- |
|
Common
stock, $.001 par value; 100,000,000 shares authorized, 25,437,536
shares issued and outstanding as of September 30, 2018; and
22,039,529 shares issued and outstanding as of December 31,
2017 |
|
|
25,435 |
|
|
|
22,038 |
|
Additional paid-in capital |
|
|
184,952,739 |
|
|
|
165,008,928 |
|
Accumulated deficit |
|
|
(171,807,285 |
) |
|
|
(155,817,749 |
) |
|
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
13,170,889 |
|
|
|
9,213,217 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’
equity |
|
$ |
23,865,574 |
|
|
$ |
27,384,592 |
|
|
|
|
|
|
|
|
|
|
SITO MOBILE, LTD.Reconciliation of GAAP
Net Income to Adjusted EBITDA
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2018 |
|
|
2017 |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) |
$ |
(5,005,943 |
) |
$ |
(3,070,392 |
) |
|
$ |
(15,989,536 |
) |
$ |
(8,292,602 |
) |
Net income
(loss) from discontinued operations |
|
- |
|
|
2,788 |
|
|
|
- |
|
|
(312,844 |
) |
Net (loss) from continuing operations |
|
(5,005,943 |
) |
|
(3,073,180 |
) |
|
|
(15,989,536 |
) |
|
(7,979,758 |
) |
Adjustments to
reconcile net (loss) to EBITDA: |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense included in cost of revenue and operating
expenses: |
|
|
|
|
|
|
|
|
|
Amortization included in cost of revenue |
|
207,690 |
|
|
225,609 |
|
|
|
602,013 |
|
|
438,094 |
|
Depreciation and other amortization |
|
144,803 |
|
|
713,903 |
|
|
|
501,096 |
|
|
996,590 |
|
Total depreciation and
amortization expense |
|
352,493 |
|
|
939,512 |
|
|
|
1,103,109 |
|
|
1,434,684 |
|
Interest income
(expense), net |
|
2,404 |
|
|
(555,288 |
) |
|
|
8,297 |
|
|
(1,299,049 |
) |
Income
tax expense |
|
(26,925 |
) |
|
- |
|
|
|
(80,369 |
) |
|
- |
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
(4,628,929 |
) |
|
(1,578,380 |
) |
|
|
(14,814,355 |
) |
|
(5,246,025 |
) |
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile EBITDA: |
|
|
|
|
|
|
|
|
|
Stock based
compensation expense included in operating expenses: |
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
451,271 |
|
|
235,104 |
|
|
|
1,503,354 |
|
|
474,386 |
|
General and administrative |
|
835,735 |
|
|
431,185 |
|
|
|
3,648,952 |
|
|
787,392 |
|
Total stock based
compensation expense |
|
1,287,006 |
|
|
666,289 |
|
|
|
5,152,306 |
|
|
1,261,778 |
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on warrant
revaluation |
|
182,048 |
|
|
(636,456 |
) |
|
|
1,157,568 |
|
|
(636,456 |
) |
|
|
|
|
|
|
|
|
|
|
Certain
non-recurring expenses |
|
|
|
|
|
|
|
|
|
Other
litigation |
|
256,274 |
|
|
175 |
|
|
|
517,676 |
|
|
175 |
|
Investigations of former executives |
|
22,850 |
|
|
66,905 |
|
|
|
44,071 |
|
|
674,913 |
|
Class
action lawsuits |
|
- |
|
|
- |
|
|
|
35,991 |
|
|
234,169 |
|
Section
382 rights plan |
|
- |
|
|
305 |
|
|
|
- |
|
|
135,228 |
|
Contested
proxy solicitation pending of threatened against the Company |
|
- |
|
|
176,571 |
|
|
|
59,998 |
|
|
1,923,590 |
|
Total non-recurring
expenses |
|
279,124 |
|
|
243,956 |
|
|
|
657,736 |
|
|
2,968,075 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
(3,244,847 |
) |
$ |
(31,679 |
) |
|
$ |
(10,161,881 |
) |
$ |
(379,716 |
) |
SITO Mobile (NASDAQ:SITO)
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