PHOENIX, March 31, 2014 /PRNewswire/ -- Mobivity Holdings Corp. (OTCQB: MFON), an award-winning provider of proprietary and patented mobile marketing technologies and solutions, today announced financial results for the fourth quarter and the year ended December 31, 2013.
-- Company completed acquisition of SmartReceipt in March 2014, which creates one of the largest installed bases of any SaaS-based mobile loyalty program in the industry; -- Subscriber-based revenue increased by $553,000 during 2013, or 108%, compared to 2012; -- Full year 2013 gross margin improved to 72.6% compared to 68.1% in 2012; -- Q4 2013 reseller channel revenue acquired in the Front Door Insights (FDI) asset acquisition increased 39.6% compared to FDI's reseller revenue during Q1, 2013; -- Mobivity's Stampt smartphone loyalty app revenue grew 28% in fiscal 2013 over fiscal 2012; -- At December 31, 2013, cash and equivalents totaled $2.6 million with essentially no long-term debt.
Dennis Becker, chief executive officer of Mobivity, said, "2013 was a pivotal year for Mobivity. With a full management team on-board and working together beginning in the second half of the year, we believe our strategic plan to build a suite of mobile marketing technologies is now in full swing as we have fully integrated our Stampt(TM) loyalty app and Front Door Insights acquisitions and are working to successfully integrate SmartReceipt into our bundle of services. We believe we have a powerful suite of services that can help national brands and local businesses engage their most loyal customers and drive incremental revenue."
Mr. Becker continued, "There were also a few challenges that needed to be addressed during the fourth quarter, including recent amendments to the Telephone Consumer Protection Act (TCPA) that went into effect on October 16, 2013 requiring the re-opting-in of all of our clients' text messaging subscribers. The revised TCPA affected those customers that we bill on a per subscriber basis. We estimate the impact of the TCPA to be approximately $150,000 for the fourth quarter. The roughly 10% impact on the fourth quarter is far less than what has been reported by others in the industry, which, in our opinion, is attributable to the diversification of our business model which provides both per location and per subscriber customers. We expect this impact to be relatively short-lived as customers rebuild their subscriber bases and we are encouraged by the continued acceptance and utilization of our proprietary mobile marketing solutions as we continue to add new customers, through both our corporate accounts as well as our marketing partners. Going forward, we believe our ability to further integrate our product offering with the SmartReceipt technology should only help to accelerate our growth."
Mike Bynum, President of Mobivity added, "We are also seeing continued demand by resellers to add Mobivity's mobile marketing solutions to their product and service portfolios. Reseller relationships acquired from our Front Door Insights acquisition have recently added our Stampt smartphone app to their existing SMS mobile marketing services, while new reseller relationships have recently deployed our solutions in their respective markets. International reseller partnerships are also being negotiated with a particular reseller partner already in beta testing for our services."
Mr. Becker concluded, "We believe the mobile marketing industry and derivatives of it continue to gain attention in the marketplace. Mobivity is focused on providing its merchants with tools that are intended to drive loyalty amongst their own customers, drive repeat business and improve marketing dollar efficiency. We have a monetization strategy for every merchant we acquire, while accumulating consumers directly under the Stampt brand. We hope the double play of acquiring merchants while proliferating the Stampt brand direct to consumers is something that the capital markets will come to appreciate very soon."
Full Year 2013 Financial Results
For the year ended December 31, 2013, revenue increased approximately $14,000 to $4,094,000, compared to 2012. The company continued to shift revenues from non-recurring, project based engagements, to more ongoing subscription-based contracts during the year.
Gross margins improved to 72.6% during the 2013 as compared to 68.1% in the prior year. The improvement in gross margins is attributable to the company's focus on subscription-based licensing of its patented SMS mobile marketing solutions and Stampt loyalty app which inherently carry higher gross margins as opposed to project-based accounts that existed a year ago, as well as reduced messaging fees, sales and referral commissions, and project consulting fees.
Operating expenses (excluding goodwill and intangible asset impairment charges) for 2013 were $7,981,000 compared to $5,659,000 in 2012 due to hiring of additional officers and management, hiring of outside sales positions, higher legal costs stemming from several acquisitions and SEC related activities, share based compensation, and travel expenses. Non-cash stock-based compensation expense was $1,996,000 during the year, as compared to $859,000 in 2012.
Operating loss (excluding a goodwill and intangible asset impairment charges) was $(5,010,000) during 2013 compared to an operating loss (excluding a goodwill and intangible asset impairment charges) of $(2,879,000) in the corresponding period a year ago.
Net loss for the year was $(16,759,000) in 2013, or $(1.58) per fully diluted share, compared to a net loss of $(7,339,000), or $(1.90) per fully diluted share, in 2012. Included in the results are non-cash goodwill and intangible asset impairment charges of $1.7 million and $888,000 during fiscal year 2013 and 2012 respectively.
Non-GAAP Adjusted Net Loss, a non-GAAP metric (see table 1) was $(2,744,000) for full year 2013 compared to $(1,468,000) during in 2012.
Fourth Quarter 2013 Financial Results
Revenue for the fourth quarter of 2013 was $944,000, down 10.2% from $1,051,000 in the fourth quarter of 2012. The decrease in revenues for the quarter is attributable to an approximate $150,000 impact due to the Telephone Consumer Protection Act (TCPA) that went into effect on October 16, 2013. The company expects this impact to be relatively short-lived as customers rebuild their subscriber bases.
Gross margins increased to 72.7% from 72.1% in the fourth quarter of 2012. Cost of goods sold was $258,000 in the fourth quarter of 2013 compared to $293,000 in the fourth quarter of 2012, with a gross margin profit of $687,000 in the fourth quarter of 2013 compared to a gross profit of $758,000 in the same period a year ago.
Operating expenses (excluding goodwill and intangible asset impairment charges) for the fourth quarter of 2013 were $1,400,000 compared to $1,288,000 in the same period of the prior year. The increase in operating expenses is primarily attributable to increases in our management team and sales infrastructure. Included in the fourth quarter was a one-time credit to share based compensation of $680,000 due to an adjustment of projected executive compensation stemming from recent acquisitions.
Operating loss (excluding goodwill and intangible asset impairment charges) was $(1,024,000) in the three months ended December 31, 2013 compared to an operating loss (excluding a goodwill and intangible asset impairment charges) of $(530,000) in the corresponding period a year ago.
Net loss for the quarter was $(2,057,000), or $(0.20) per diluted share, compared to a net loss of $(2,299,000), or $(0.59) per diluted share, in the fourth quarter of 2012. Included in the results are non-cash goodwill and intangible asset impairment charges of $1.7 million and $888,000 during the fourth quarter 2013 and 2012 respectively.
Non-GAAP Adjusted Net Loss, a non-GAAP metric (see table 1) was $(1,066,000) during the fourth quarter of 2013 as compared to $(300,000) during the prior year period.
The Company had $2,573,000 of cash at December 31, 2013 compared to $363 at December 31, 2012. Total notes payable outstanding were $20,000 at December 31, 2013 compared to $3,030,000 at December 31, 2012.
This press release includes a reference to Non-GAAP adjusted net loss, which constitutes a "non-GAAP financial measure" as defined by the SEC. "Non-GAAP adjusted net loss" is our net loss before interest, depreciation, amortization, stock-based compensation, and other non-cash operating income and expenses. Non-GAAP adjusted net loss is presented exclusively as a supplemental disclosure because our management believes that it is widely used to measure the performance, and as a basis for valuation, of companies in our industry. Our management uses Non-GAAP adjusted net loss as a measure of our operating performance and to compare our operating performance with those of our competitors. We also present Non-GAAP adjusted net loss because it is used by some investors as a way to measure a company's ability to incur and service debt, make capital expenditures and meet working capital requirements. A full reconciliation of the non-GAAP measures to GAAP can be found in the tables of today's press release. Non-GAAP adjusted net income is supplemental to results presented under accounting principles generally accepted in the United States of America ("GAAP") and may not be comparable to similarly titled measures presented by other companies. These non-GAAP measures are used by management to facilitate period-to-period comparisons and analysis of Mobivity's operating performance and liquidity. Management believes these non-GAAP measures are useful to investors in trending, analyzing and benchmarking the performance and value of Mobivity's business. These non-GAAP measures should be considered in addition to, but not as a substitute for, other similar measures reported in accordance with GAAP.
Mobivity is an award-winning provider of a suite of patented mobile marketing technologies designed to drive sales, enhance customer engagement, and reward customer loyalty for local businesses and national brands. Its solutions enable businesses across the United States to drive incremental sales and profitability by quickly and effectively communicating to their most loyal customers. Included are SmartReceipt, which transforms traditional retail transaction receipts into engaging "smart" receipts, an industry-leading text messaging product, and an innovative Stampt(TM) mobile loyalty application, Additionally, Mobivity offers a unique, high definition graphical system platform that allows its clients to enhance customer or fan experience by interacting with their mobile phones and video boards or screens in real time. Mobivity's clients include national brands such as CNN, Disney, the NFL, Sony Pictures, AT&T, Chick-fil-A, NBC Universal, and numerous professional sports teams, as well as thousands of small, local businesses across the U.S. For more information, visit www.mobivity.com.
Forward Looking Statement
This press release contains forward-looking statements concerning Mobivity Holdings Corp. within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include statements regarding the impact of recent amendments to the Telephone Consumer Protection Act (TCPA); the Company's ability to successfully integrate its recently acquired SmartReceipt operations; expectations for the growth of the Company's operations, sales force and revenue; the advantages and growth prospects of the mobile marketing industry; and the expected contributions to the Company's success by its recent additions to management. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, the application and enforcement of the TCPA amendments in ways not expected; our ability to successfully integrate the SmartReceipt operations and our recent additions to management; our ability to develop the sales force required to achieve our development and revenue goals; our ability to raise additional working capital as and when needed; changes in the laws and regulations affecting the mobile marketing industry and those other risks set forth in Mobivity Holdings Corp.'s annual report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 31, 2014 and subsequently filed quarterly reports on Form 10-Q. Mobivity Holdings Corp. cautions readers not to place undue reliance on any forward-looking statements. Mobivity Holdings Corp. does not undertake, and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
Contact: Dennis Becker Robert Blum, Joe Dorame, Joe Diaz Mobivity Lytham Partners, LLC Chief Executive Officer 602-889-9700 877-282-7660 MFON@lythampartners.com
MOBIVITY HOLDINGS CORP. ITEMIZED RECONCILIATION BETWEEN NET INCOME (LOSS) AND NON-GAAP ADJUSTED NET INCOME Three Months Ended Fiscal Year Ended December 31, December 31, ------------ ------------ $000s except EPS 2013 2012 2013 2012 ---- ---- ---- ---- Net income (loss) $(2,057) $(2,299) $(16,759) $(7,339) Depreciation and amortization 89 117 271 549 Change in Fair Value of Derivatives (100) 48 3,766 (360) Non-cash Stock Compensation Expense (439) 113 1,996 859 Gain on Debt Extinguishment (103) (103) Loss (Gain) on Contingent Considerations (165) (707) 28 (625) Goodwill/Intangible Asset Impairment 1,710 888 1,710 888 Interest expense, Net (1) 1,540 6,347 4,560 Non-GAAP Adjusted Net Income (Loss) $(1,066) $(300) $(2,744) $(1,468) ======= ===== ======= ======= Weighted Average Diluted Shares Outstanding 16,314,740 3,869,686 10,612,007 3,869,247 ========== ========= ========== ========= Non-GAAP Adjusted EPS $(0.07) $(0.08) $(0.26) $(0.38) ====== ====== ====== ======
Mobivity Holdings Corp. Consolidated Statements of Operations Years ended December 31, ------------------------ 2013 2012 ---- ---- Revenues Revenues $4,093,667 $4,079,745 Cost of revenues 1,122,037 1,300,325 --------- --------- Gross margin 2,971,630 2,779,420 Operating expenses General and administrative 3,416,850 2,984,118 Sales and marketing 3,469,383 1,562,933 Engineering, research, and development 824,653 562,459 Depreciation and amortization 270,579 549,151 Goodwill impairment 1,066,068 742,446 Intangible asset impairment 644,170 145,396 ------- ------- Total operating expenses 9,691,703 6,546,503 Loss from operations (6,720,073) (3,767,083) Other income/(expense) Interest income 747 2,833 Interest expense (6,348,186) (4,559,564) Change in fair value of derivative liabilities (3,766,231) 359,530 Gain on Debt Extinguishment 103,177 - Gain (loss) on adjustment in contingent consideration (28,465) 625,357 Total other income/ (expense) (10,038,958) (3,571,844) Loss before income taxes (16,759,031) (7,338,927) Income tax expense - - Net loss $(16,759,031) $(7,338,927) ============ =========== Net loss per share -basic and diluted $(1.58) $(1.90) ====== ====== Weighted average number of shares during the period -basic and diluted 10,612,007 3,869,247 ========== =========
Mobivity Holdings Corp. Consolidated Statements of Operations Quarters ended December 31, --------------------------- 2013 2012 ---- ---- Revenues Revenues $944,112 $1,050,879 Cost of revenues 257,519 293,037 ------- ------- Gross margin 686,593 757,842 Operating expenses General and administrative 772,172 633,268 Sales and marketing 179,479 426,999 Engineering, research, and development 359,040 110,330 Depreciation and amortization 89,317 117,189 Goodwill impairment 1,066,068 742,446 Intangible asset impairment 644,170 145,396 ------- ------- Total operating expenses 3,110,245 2,175,628 Loss from operations (2,423,652) (1,417,786) Other income/(expense) Interest income 340 12 Interest expense (826) (1,539,939) Change in fair value of derivative liabilities 99,280 (47,549) Gain on Debt Extinguishment 103,177 - Gain (loss) on adjustment in contingent consideration 165,000 706,518 Total other income/ (expense) 366,972 (880,958) Loss before income taxes (2,056,680) (2,298,744) Income tax expense - - Net loss $(2,056,680) $(2,298,744) =========== =========== Net loss per share -basic and diluted $(0.13) $(0.59) ====== ====== Weighted average number of shares during the period -basic and diluted 16,314,740 3,869,686 ========== =========
Mobivity Holdings Corp. Consolidated Balance Sheets December 31, 2013 December 31, 2012 ----------------- ----------------- ASSETS Current assets Cash $2,572,685 $363 Accounts receivable, net of allowance for doubtful accounts of $65,975 and $44,700, respectively 280,667 414,671 Other current assets 140,114 30,009 ------- ------ Total current assets 2,993,466 445,043 Goodwill 3,108,964 2,259,624 Intangible assets, net 935,316 444,112 Other assets 63,944 201,228 ------ TOTAL ASSETS $7,101,690 $3,350,007 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable $543,648 $514,949 Accrued interest 16,943 321,368 Accrued and deferred personnel compensation 191,041 299,534 Deferred revenue - related party - 35,262 Deferred revenue and customer deposits 136,523 181,731 Convertible notes payable, net of discount - 2,857,669 Notes payable 20,000 171,984 Derivative liabilities 106,176 3,074,504 Other current liabilities 36,372 250,144 Earn-out payable 34,755 2,032,881 ------ Total current liabilities 1,085,458 9,740,026 Non-current liabilities Earn-out payable 24,245 - ------ --- Total non-current liabilities 24,245 - ------ --- Total liabilities 1,109,703 9,740,026 Commitments and Contingencies (See Note 9) Stockholders' equity (deficit) Common stock, $0.001 par value; 50,000,000 shares authorized; 16,319,786 and 3,869,688 shares issued and outstanding 16,320 3,870 Equity payable 108,170 - Additional paid-in capital 54,452,697 25,432,280 Accumulated deficit (48,585,200) (31,826,169) ----------- ----------- Total stockholders' equity (deficit) 5,991,987 (6,390,019) TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $7,101,690 $3,350,007 ========== ==========
SOURCE Mobivity Holdings Corp.