NEW YORK, March 14, 2013 /PRNewswire/ -- SNAP Interactive, Inc. ("SNAP" or the "Company") (OTCBB: STVI), a leading social dating developer, today announced financial results for the quarter ended December 31, 2012.
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- Total revenues decreased 28% to $4.0 million for the fourth quarter of 2012 compared to $5.5 million for the comparable period in 2011;
- Bookings decreased 44% to $3.1 million for the fourth quarter of 2012 compared to $5.6 million for the comparable period in 2011;
- Deferred revenue decreased 20% to $2.5 million at December 31, 2012 compared to $3.1 million at December 31, 2011;
- Net loss was $0.3 million, or $0.01 per basic and diluted common share for the fourth quarter of 2012, compared with a net loss of $1.5 million, or $0.04 per basic and diluted common share, for the comparable period in 2011; and
- SNAP's balance sheet position continues to be strong, with $5.5 million of available sources of liquidity (includes cash and cash equivalents and restricted cash) at December 31, 2012.
"The fourth quarter marked the end of our transitional period, as we focused on improving our feature set and conversion process for users of the redesigned AYI brand. As anticipated due to the re-launch, revenue and bookings were lower in the fourth quarter of 2012 as compared to the comparable period in 2011. Having completed the re-launch, we believe that the AYI brand is poised to grow once again. During January 2013, we began to increase our marketing spend to drive new users to AYI. We are excited about how the product is performing and we look forward to growing the AYI brand during 2013. We closed the year with $5.5 million in available liquidity and believe we are well positioned to achieve our 2013 objectives," said Jon D. Pedersen, Sr., SNAP's Chief Financial Officer.
Financial Highlights
ThreeMonthsEnded | YearEnded | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
GAAP Results | 2012 | 2011 | Change | 2012 | 2011 | Change | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Total revenues | $ | 3,956,945 | $ | 5,500,829 | (28) | % | $ | 19,246,736 | $ | 19,155,543 | 0 | % | ||||||||||||
Deferred revenue (at period end) | $ | 2,524,229 | $ | 3,138,406 | (20) | % | $ | 2,524,229 | $ | 3,138,406 | (20) | % | ||||||||||||
Net loss | $ | (303,088) | $ | (1,542,845) | (80) | % | $ | (4,030,641) | $ | (1,593,173) | 153 | % | ||||||||||||
Net cash used in operating activities | $ | (1,147,773) | $ | (523,881) | 119 | % | $ | (3,401,191) | $ | (1,455,542) | 134 | % | ||||||||||||
Non-GAAP Results | ||||||||||||||||||||||||
Bookings | $ | 3,114,800 | $ | 5,592,450 | (44) | % | $ | 18,295,893 | $ | 19,981,859 | (8) | % | ||||||||||||
Overall liquidity (at period end) | $ | 5,462,596 | $ | 8,879,033 | (38) | % | $ | 5,462,596 | $ | 8,879,033 | (38) | % | ||||||||||||
Business Highlights
SNAP has also had a number of positive developments during the quarter ending March 31, 2013, including the following:
- SNAP acquired and transitioned to the 'AYI.com' domain in January 2013;
- New subscription sales increased in both January and February 2013 from December 2012;
- AYI launched new "social" features for AreYouInterested.com that are designed to integrate a user's interest and social graphs into the online dating experience; and
- SNAP has begun to rebrand AreYouInterested.com as "AYI", a shorter and easier name for our users to remember.
Management Commentary
"2012 was a challenging year for SNAP," said SNAP's President and CEO Clifford Lerner. "We exited 2011 with a growing product in AreYouInterested.com, but one we felt could be improved and redesigned. Early last year we announced that 2012 would be devoted to developing new architecture and redesigning AYI in order to reach our growth potential with a product focused on 'social' features that could leverage our significant scale of the interest and social graph. While the overall process took longer than anticipated, we're pleased to report that the launch of the redesigned AYI is now complete and we have an exciting product roadmap that we are positioned to execute on."
"As a result of the launch of the redesigned AYI, key engagement and monthly revenue metrics have increased in 2013 and we are excited to report that the AYI brand is growing." Lerner continued, "New subscription sales increased in both January and February 2013 from December 2012. We have also benefitted from higher conversion rates, the rates at which users are converted to paying subscribers, since the launch and we have expanded our user acquisition campaigns. Additionally, key to our 2013 objectives is a focus on building a recognizable brand based on a unique and top quality product. AYI's success to date has been accomplished without establishing any meaningful brand identity and we firmly believe that building a unique and quality brand for AYI is key to driving potential upside in 2013. We believe that our recent launch of 'social features' to leverage our scale of the Facebook social and interest graph differentiates AYI in the dating space. With millions of Facebook connected profiles and over 1 billion interest data points, we are now positioned to leverage this data and scale to create compelling experiences for our users. Furthermore, we're excited to announce we have acquired the AYI.com domain in conjunction with our branding initiatives. 'AYI' is a shorter and easier name for our users to remember and we have already transitioned our users to the new AYI.com domain."
About SNAP Interactive, Inc.
SNAP Interactive, Inc. develops, owns and operates a social dating application for social networking websites and mobile platforms. SNAP's flagship brand, AYI is one of the largest social dating applications on the Internet with millions of monthly active users on the Facebook platform, and offers a completely integrated Facebook,iPhone,AndroidandWeb application. SNAP was recently ranked the 36th Fastest Growing Company in North America on Deloitte's 2012 Technology Fast 500'. For more information, please visit http://www.snap-interactive.com/, its blog at http://devblog.snap-interactive.com, on Facebook at facebook.com/SnapInteractiveInc and on Twitter at @SNAPInteractive.
The contents of our websites are not part of this press release, and you should not consider the contents of these websites in making an investment decision with respect to our common stock.
Facebook® is a registered trademark of Facebook Inc. iPhone® is a registered trademark of Apple Inc. Are You Interested?® is a registered trademark of SNAP Interactive, Inc.
PR Contact:
Kayla Inserra
Kayla@specopscomm.com
919-601-2247
IR Contact:
Denise Garcia
IR@snap-interactive.com
Forward-Looking Statements
This press release contains "forward-looking statements" made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as "anticipate," "assume," "believe," "estimate," "expect," "goal," "intend," "plan," "project," "seek," "target," and variations of such words and similar expressions are intended to identify forward-looking statements.Such forward-looking statements are subject to certain risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed by the forward-looking statements, including, but not limited to, the following: general economic, industry and market sector conditions; the Company's future growth and the ability to obtain additional financing to implement the Company's growth strategy; the ability to effectively manage the Company's growth; the ability to anticipate and respond to changing consumer trends and preferences; reliance on a very limited number of third party platforms to run the Company's applications and the ability of third party platforms to take action against these applications; the intense competition in the online dating marketplace; the ability to establish and maintain brand recognition; the ability to develop and support successful applications for mobile platforms; the success of the redesigned AYI brand and product; and circumstances that could disrupt the functioning of the Company's applications and websites.In evaluating these statements, you should carefully consider these risks and uncertainties and those described under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other Securities and Exchange Commission filings.
All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.
SNAP INTERACTIVE, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,357,596 | $ | 2,397,828 | ||||
Restricted cash | 105,000 | - | ||||||
Credit card holdback receivable | 287,293 | 441,840 | ||||||
Accounts receivable, net of allowances and reserves of$36,129 and $184,964, respectively | 320,019 | 480,190 | ||||||
Accrued interest receivable | - | 5,907 | ||||||
Investments | - | 6,481,205 | ||||||
Prepaid expense and other current assets | 204,824 | 96,815 | ||||||
Total current assets | 6,274,732 | 9,903,785 | ||||||
Fixed assets and intangible assets, net | 548,549 | 578,463 | ||||||
Notes receivable | 165,716 | 138,803 | ||||||
Security deposits | - | 19,520 | ||||||
Total assets | $ | 6,988,997 | $ | 10,640,571 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 799,183 | $ | 1,027,841 | ||||
Accrued expenses and other current liabilities | 240,049 | 864,983 | ||||||
Deferred revenue | 2,524,229 | 3,138,406 | ||||||
Total current liabilities | 3,563,461 | 5,031,230 | ||||||
Long term deferred rent | 48,340 | 61,640 | ||||||
Warrant liability | 1,616,325 | 937,000 | ||||||
Commitments | ||||||||
Total liabilities | 5,228,126 | 6,029,870 | ||||||
Stockholders' equity: | ||||||||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized,none issued and outstanding | - | - | ||||||
Common Stock, $0.001 par value, 100,000,000 shares authorized, 44,007,826 and 38,580,261 shares issued, respectively, and 38,832,826 and 38,580,261 shares outstanding, respectively | 38,833 | 38,580 | ||||||
Additional paid-in capital | 9,437,422 | 8,256,864 | ||||||
Accumulated deficit | (7,715,384) | (3,684,743) | ||||||
Total stockholders' equity | 1,760,871 | 4,610,701 | ||||||
Total liabilities and stockholders' equity | $ | 6,988,997 | $ | 10,640,571 | ||||
SNAP INTERACTIVE, INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
For the Years Ended | ||||||||
December 31, | ||||||||
2012 | 2011 | |||||||
Revenues: | ||||||||
Subscription revenue | $ | 18,910,070 | $ | 18,781,368 | ||||
Advertising revenue | 336,666 | 374,175 | ||||||
Total revenues | 19,246,736 | 19,155,543 | ||||||
Costs and expenses: | ||||||||
Programming, hosting and technology | 4,444,550 | 2,587,822 | ||||||
Compensation | 3,625,117 | 1,976,384 | ||||||
Professional fees | 703,125 | 558,136 | ||||||
Advertising and marketing | 9,876,097 | 14,626,963 | ||||||
General and administrative | 3,953,795 | 3,070,178 | ||||||
Total costs and expenses | 22,602,684 | 22,819,483 | ||||||
Loss from operations | (3,355,948) | (3,663,940) | ||||||
Interest income, net | 21,517 | 28,858 | ||||||
Mark-to-market adjustment on warrant liability | (679,325) | 2,038,000 | ||||||
Other income (expense) | (16,885) | 3,909 | ||||||
Net lossbefore income taxes: | (4,030,641) | (1,593,173) | ||||||
Provision for income taxes | - | - | ||||||
Net loss | $ | (4,030,641) | $ | (1,593,173) | ||||
Net loss per common share: | ||||||||
Basic and diluted | $ | (0.10) | $ | (0.04) | ||||
Weighted average number of common shares used in calculating net loss per common share: | ||||||||
Basic and diluted | 38,611,758 | 37,619,208 | ||||||
SNAP INTERACTIVE, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
2012 | 2011 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (4,030,641) | $ | (1,593,173) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 151,007 | 51,180 | ||||||
Amortization of investment premium | 6,205 | 8,734 | ||||||
Stock-based compensation expense | 1,129,960 | 438,395 | ||||||
Mark-to-market adjustment on warrant liability | 679,325 | (2,038,000) | ||||||
Loss on disposal of fixed assets | 16,885 | 453 | ||||||
Changes in operating assets and liabilities: | ||||||||
Restricted cash | (105,000) | - | ||||||
Credit card holdback receivable | 154,547 | (202,388) | ||||||
Accounts receivable | 160,171 | (356,177) | ||||||
Accrued interest paid | 5,907 | (5,907) | ||||||
Prepaid expense and other current assets | (108,009) | (22,554) | ||||||
Security deposit | 19,520 | (1,335) | ||||||
Accounts payable and accrued expenses and other current liabilities | (843,470) | 960,266 | ||||||
Deferred rent | (23,421) | 102,115 | ||||||
Deferred revenue | (614,177) | 1,200,491 | ||||||
Accrued interest payable - related party | - | 2,358 | ||||||
Net cash used in operating activities | (3,401,191) | (1,455,542) | ||||||
Cash flows from investing activities: | ||||||||
Purchase of fixed assets | (137,978) | (540,591) | ||||||
Redemption (purchase) of short-term investments | 6,475,000 | (6,489,937) | ||||||
Repayment of notes receivable issued to employees | 11,320 | - | ||||||
Issuanceof notes receivable issued to employees and accrued interest | (38,233) | (138,803) | ||||||
Net cash provided by (used in) investing activities | 6,310,109 | (7,169,331) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock and warrants | - | 7,915,700 | ||||||
Proceeds from exercise of common stock warrants | - | 88,125 | ||||||
Proceeds from exercise of stock options | 50,850 | - | ||||||
Net cash provided by financing activities | 50,850 | 8,003,825 | ||||||
Netincrease (decrease) in cash and cash equivalents | 2,959,768 | (621,048) | ||||||
Cash and cash equivalents at beginning of year | 2,397,828 | 3,018,876 | ||||||
Cash and cash equivalents at end of period | $ | 5,357,596 | $ | 2,397,828 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for taxes and related interest | $ | 15,640 | $ | 4,500 | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Conversion of notes and accrued interest to common stock | $ | - | $ | 71,959 | ||||
SNAP INTERACTIVE, INC. | ||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
ThreeMonthsEnded | YearEnded | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Reconciliation of Subscription Revenue to Bookings | ||||||||||||||||
Subscription revenue | $ | 3,908,361 | $ | 5,279,888 | $ | 18,910,070 | $ | 18,781,368 | ||||||||
Change in deferred revenue | (793,561) | 312,562 | (614,177) | 1,200,491 | ||||||||||||
Bookings | $ | 3,114,800 | $ | 5,592,450 | $ | 18,295,893 | $ | 19,981,859 | ||||||||
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
Reconciliation of Cash and Cash Equivalents toOverall Liquidity | ||||||||
Cash and cash equivalents | $ | 5,357,596 | $ | 2,397,828 | ||||
Restricted cash | 105,000 | - | ||||||
Investments | - | 6,481,205 | ||||||
Overall liquidity | $ | 5,462,596 | $ | 8,879,033 | ||||
Non-GAAP Financial Measures
We have provided in this release non-GAAP financial information including bookings and overall liquidity to supplement the consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Management uses these non-GAAP financial measures internally in analyzing our financial results to assess operational performance and to determine our future capital requirements. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use such information to help assess the health of our business.
Some limitations of bookings and overall liquidity as financial measures include that:
- Bookings does not reflect that we defer and recognize revenue from subscription fees and micro-transactions over the length of the subscription term;
- Other companies, including companies in our industry, may calculate bookings and overall liquidity differently or choose not to calculate bookings and overall liquidity at all, which reduces their usefulness as comparative measures; and
- Overall liquidity does not reflect the Company's ability to convert restricted cash and investments into cash and cash equivalents.
Because of these limitations, you should consider bookings and overall liquidity along with other financial performance measures, including total revenues, deferred revenue, net income (loss), cash and cash equivalents, restricted cash, investments, net cash used in operating activities and our financial results presented in accordance with GAAP.
SOURCE SNAP Interactive, Inc.
