Single Touch Reports Fiscal 2012 Results with Revenues Increasing 39% to $6,300,000

JERSEY CITY, N.J.--()--Single Touch Systems, Inc. (OTC BB: SITO), a technology based mobile media solutions provider, today reported financial results for its 2012 fiscal year ended September 30, 2012.

“I am pleased to report that we achieved substantial year-over-year organic revenue growth in fiscal 2012 and expect this trend to continue in 2013”

Fiscal 2012 Highlights Include:

  • Revenues up nearly 40%, or $1.8 million over 2011, to $6.3 million
  • Gross margins improve to 54% from 44% in 2011
  • Adjusted EBITDA improves by nearly 25%
  • Over 500,000,000 mobile messages sent on behalf of retail clients by December 20, 2012
  • Formed Single Touch Interactive R&D IP to consolidate IP assets and related activities

“I am pleased to report that we achieved substantial year-over-year organic revenue growth in fiscal 2012 and expect this trend to continue in 2013,” said Mr. James Orsini, Chief Executive Officer of Single Touch. “Having recently surpassed a record 500 million mobile messages sent, we have fortified our position as a leader in the industry for sending opt-in mobile messaging for retailers. As mobile messaging evolves into a major distribution channel for marketing and advertising content, we are positioned for continued growth.”

“Our move to form Single Touch Interactive R&D IP, a wholly owned subsidiary, in fiscal 2012 marks a key milestone in our strategy to unlock the value of our IP assets for the benefit our Company and our shareholders,” added Mr. Anthony Macaluso, Chairman and Chief Innovation Officer of Single Touch. “A majority of our intellectual property rights will be transferred to Single Touch R&D IP, Inc., which will be responsible and bear the expense for all research, development, patent filings and patent maintenance as well as continuing to identify, notify and, where circumstances warrant, enforce against companies we believe are infringing on the intellectual property protected by our growing patent portfolio.”

Fiscal Year Ended September 30, 2012 Financial Results Highlights

During the fiscal year ended September 30, 2012, revenue increased 39%, or $1,767,057, to $6,346,919 compared to revenue of $4,579,862 for fiscal 2011. The growth, all of which was organic, was attributable to continuing mobile adoption and new programs for existing and new client relationships.

Royalties and application costs which represent the direct out-of-pocket costs associated with our operating revenues totaled $2,907,110 in 2012, compared to $2,543,885 in 2011, an increase of 14%. Because a portion of royalties and application costs are fixed and all such costs are being monitored and reduced wherever possible, net margin continues to increase. The resulting gross margin improved from 44% in fiscal 2011 to 54% in fiscal 2012.

Adjusted compensation expense grew from $1,834,375 to $2,679,008 during fiscal 2012. This increase reflects the addition of headcount necessary to support business expansion, while concurrently relying less on outside consultants.

Adjusted EBITDA improved by 24% to ($1,573,382) in fiscal 2012, as compared to ($2,080,846) in fiscal 2011. The Company’s net loss for the fiscal year ended September 30, 2012 narrowed by 59% to ($3,255,186), from a net loss of ($7,985,163) incurred during the fiscal year ended September 30, 2011.

-Financial Tables to Follow-

When considering the information contained in this press release, refer to the complete financial statements and the accompanying notes contained in our recent Annual Report on Form 10-K filed with the Securities and Exchange Commission at www.sec.gov.

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

Safe Harbor Statement

This news release may contain forward-looking statements that involve risks and uncertainties and reflect Single Touch’s judgment as of the date of this release. These statements may include those regarding strategy, growth and future operations. Actual events or results may differ from Single Touch’s expectations. The risks and uncertainties include reliance on brand owners and wireless carriers, the possible need for additional capital, as well as other risks identified in Single Touch’s filings with the SEC. Single Touch disclaims any intent or obligation to update these forward-looking statements beyond the date of this press release, except as may be required by law.

       

SINGLE TOUCH SYSTEMS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
For the Years Ended
September 30,
2012   2011  
 
Revenue
Wireless applications $ 6,346,919   $ 4,579,862  
 
Operating Expenses
Royalties and application costs 2,907,110 2,543,885
Research and development 84,658 78,860
Compensation expense (including stock based
compensation of $365,422 in 2012 and $3,634,268 in 2011) 3,044,430 5,468,643
Depreciation and amortization 690,293 633,535
General and administrative (including stock based
compensation of $137,169 in 2012 and $958,162 in 2011) 2,386,694   3,161,751  
9,113,185   11,886,674  
 

Loss from operations

(2,766,266 ) (7,306,812 )
 
Other Income (Expenses)
Net (loss) on settlement of indebtedness - (651,315 )
Interest expense (488,120 ) (26,236 )
 
Net (loss) before income taxes (3,254,386 ) (7,984,363 )
 
Provision for income taxes (800 ) (800 )
 
Net income (loss) $ (3,255,186 ) $ (7,985,163 )
 
Basic and diluted loss per share $ (0.02 ) $ (0.06 )
 
Weighted average shares outstanding 131,192,693   127,817,223  
 
       

SINGLE TOUCH SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 
September 30,
2012 2011
 
Assets
Current assets
Cash and cash equivalents $ 2,157,707 $ 523,801
Accounts receivable - trade 1,085,840 907,275
Prepaid expenses 129,290 93,872
 
Total current assets 3,372,837 1,524,948
 
Property and equipment, net 228,499 303,214
 
Other assets
Capitalized software development costs, net 383,227 395,188
Intangible assets:
Patents 602,056 714,623
Patent applications cost 667,858 544,240
Software license 76,000 -
Deposit - related party 155,000 155,000
Other assets including security deposits 84,278 99,481
 
Total other assets 1,968,419 1,908,532
 
Total assets

$

5,569,755

$

3,736,694
 
       

SINGLE TOUCH SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS – continued

 
September 30,
2012 2011
 
 
Liabilities and Stockholders' Equity (Deficit)
Current liabilities
Accounts payable

$

768,263

$

1,178,057
Accrued expenses 200,591 176,232
Accrued compensation - related party 72,730 36,410
Current obligation on patent acquisitions 87,500 163,680
Convertible debentures - unrelated parties, including accrued interest of
$21,342 net of discounts of $27,101 294,241 -
 
Total current liabilities 1,423,325 1,554,379
 
Long-term liabilities
Deferred revenue 25,000 -
Convertible debentures - related party, including accrued interest of
$43,973 net of discounts of $16,461 527,512 -
Convertible debentures - unrelated parties, including accrued interest of
$100,479 net of discounts and loan fees of $927,199 2,685,280 -
 
Total long-term liabilities 3,237,792 -
 
Total liabilities 4,661,117 1,554,379
 
 
Stockholders' Equity
Preferred stock, $.0001 par value, 5,000,000 shares authorized;
none outstanding - -
Common stock, $.001 par value; 200,000,000 shares authorized,
132,472,392 shares issued and outstanding as of September 30, 2012
and 130,182,392 issued and outstanding as of September 30, 2011 132,472 130,182
Additional paid-in capital 125,425,617 123,446,398
Accumulated deficit (124,649,451) (121,394,265)
 
Total stockholders' equity 908,638 2,182,315
 
Total liabilities and stockholders' equity

$

5,569,755

$

3,736,694
 
                   

RECONCILIATION OF NON-GAAP MEASURES

       
 
For the Year Ended September 30,
   
2012 2011 GAAP Adjusted EBITDA
Adjust- Adjusted Adjust- Adjusted Change Change

GAAP

ments

EBITDA

GAAP

ments

EBITDA

$

%

$

%

 
Revenue
Wireless Applications $ 6,346,919 $ - $ 6,346,919 $ 4,579,862 $ - $ 4,579,862 $ 1,767,057 39 % $ 1,767,057 39 %
 
Operating Expenses
Royalties and Application Costs $ 2,907,110 $ - $ 2,907,110 $ 2,543,885 $ - $ 2,543,885 $ 363,225 14 % $ 363,225 14 %
Research and Development $ 84,658 $ - $ 84,658 $ 78,860 $ - $ 78,860 $ 5,798 7 % $ 5,798 7 %
Compensation expense (including
stock-based compensation) $ 3,044,430 $ (365,422 ) $ 2,679,008 $ 5,468,643 $ (3,634,268 ) $ 1,834,375 * $ (2,424,213 ) -44 % $ 844,633 46 %
Depreciation and amortization $ 690,293 $ (690,293 ) $ - $ 633,535 $ (633,535 ) $ - $ 56,758 9 %
General and administrative (including
stock-based compensation) $ 2,386,694     $ (137,169 )   $ 2,249,525   $ 3,161,751     $ (958,163 )   $ 2,203,588   $ (775,057 )   -25 % $ 45,937   2 %
$ 9,113,185 $ (1,192,884 ) $ 7,920,301 $ 11,886,674 $ (5,225,966 ) $ 6,660,708 $ (2,773,489 ) -23 % $ 1,259,593 19 %
 
Loss from Operations/Adjusted EBITDA $ (2,766,266 ) $ 1,192,884 $ (1,573,382 ) $ (7,306,812 ) $ 5,225,966 $ (2,080,846 ) $ 4,540,546 -62 % $ 507,464 -24 %
 
 
 
For the Year Ended September 30,
 
2012 2011 GAAP Adjusted EBITDA
Adjust- Adjusted Adjust- Adjusted Change Change

GAAP

ments

EBITDA

GAAP

ments

EBITDA

$

%

$

%

 
Professional Fees $ 779,541 $ (47,450 ) $ 732,091 * $ 821,022 $ (58,050 ) $ 762,972 * $ (41,481 ) -5 % $ (30,881 ) -4 %
Travel $ 499,576 $ - $ 499,576 $ 322,951 $ - $ 322,951 $ 176,625 55 % $ 176,625 55 %
Consulting expense $ 565,349 $ (89,719 ) $ 475,630 * $ 1,448,613 $ (900,113 ) $ 548,500 * $ (883,264 ) -61 % $ (72,870 ) -13 %
Office rent $ 205,639 $ - $ 205,639 $ 121,681 $ - $ 121,681 $ 83,958 69 % $ 83,958 69 %
Insurance expense $ 120,236 $ - $ 120,236 $ 83,953 $ - $ 83,953 $ 36,283 43 % $ 36,283 43 %
Equipment lease $ - $ - $ - $ 45,000 $ - $ 45,000 $ (45,000 ) -100 % $ (45,000 ) -100 %
Trade shows $ 21,213 $ - $ 21,213 $ 78,324 $ - $ 78,324 $ (57,111 ) -73 % $ (57,111 ) -73 %
Telephone $ 61,729 $ - $ 61,729 $ 38,820 $ - $ 38,820 $ 22,909 59 % $ 22,909 59 %
Office expense $ 31,356 $ - $ 31,356 $ 7,949 $ - $ 7,949 $ 23,407 294 % $ 23,407 294 %
Other $ 102,055     $ -     $ 102,055   $ 193,438     $ -     $ 193,438   $ (91,383 ) -47 % $ (91,383 )   -47 %
Total General and Administrative Expenses $ 2,386,694 $ (137,169 ) $ 2,249,525 $ 3,161,751 $ (958,163 ) $ 2,203,588 $ (775,057 ) -25 % $ 45,937 2 %
 
* Adjustments for each of these items represents the elimination of stock-based compensation included within the GAAP expense amount to arrive at the Adjusted EBITDA amount.

Contacts

Investor and Media:
Hampton Growth
Robert Haag, 877-368-3566
sito@hamptongrowth.com
or
KCSA Strategic Communications
Rob Fink / Jeffrey Goldberger
Phone: 212-896-1206 / 212-896-1249
Email: rfink@kcsa.com / jgoldberger@kcsa.com

Single Touch Systems, Inc.