NEW YORK, May 6, 2014 /PRNewswire/ -- Snap Interactive, Inc. ("SNAP," the "Company," "we," "our" or "us") (OTCQB: STVI), a leading social dating developer, today announced financial and operational results for the quarter ended March 31, 2014.
- On a sequential basis, total revenues for the first quarter of 2014 increased 10% to $3.3 million from $3.0 million for the fourth quarter of 2013;
- On a sequential basis, bookings for the first quarter of 2014 increased 18% to $3.4 million from $2.9 million for the fourth quarter of 2013;
- Total revenues decreased 5% to $3.3 million for the first quarter of 2014 from $3.5 million for the comparable period in 2013;
- Quarterly bookings increased 14% to $3.4 million for the first quarter of 2014 from $3.0 million for the comparable period in 2013;
- Net loss was $0.9 million, or $0.02 per basic and diluted common share for the first quarter of 2014 as compared with net loss of $0.2 million, or $0.00 per basic and diluted common share, for the comparable period in 2013;
- Available sources of liquidity (including cash and cash equivalents and restricted cash) totaled $0.8 million at March 31, 2014, supplemented by additional financing that occurred subsequent to period end; and
- Active subscriber count increased 16% in the first quarter of 2014 from approximately 77,700 as of December 31, 2013 to approximately 90,000 as of March 31, 2014, and increased further to approximately 94,000 as of May 5, 2014.
Financial Highlights
Current period compared to prior period: | ||||||||
Three Months Ended | ||||||||
GAAP Results | March 31, 2014 | December 31, 2013 | Change | |||||
Total revenues | $ | 3,292,353 | $ | 2,998,566 | 10 | % | ||
Advertising and marketing expense | $ | 1,472,210 | $ | 960,954 | 53 | % | ||
Deferred subscription revenue (at period end) | $ | 2,087,909 | $ | 1,826,771 | 14 | % | ||
Net loss | $ | (933,094) | $ | (669,117) | 40 | % | ||
Net cash used in operating activities | $ | (464,520) | $ | (423,983) | 10 | % | ||
Non-GAAP Results | ||||||||
Bookings | $ | 3,400,158 | $ | 2,878,500 | 18 | % | ||
Overall liquidity (at period end) | $ | 818,196 | $ | 1,417,667 | (42) | % | ||
Current period compared with same period prior year: | ||||||||
Three Months Ended | ||||||||
GAAP Results | March 31, 2014 | March 31, 2013 | Change | |||||
Total revenues | $ | 3,292,353 | $ | 3,469,560 | (5) | % | ||
Advertising and marketing expense | $ | 1,472,210 | $ | 1,131,680 | 30 | % | ||
Deferred subscription revenue (at period end) | $ | 2,087,909 | $ | 2,067,853 | 1 | % | ||
Net loss | $ | (933,094) | $ | (155,071) | 502 | % | ||
Net cash used in operating activities | $ | (464,520) | $ | (1,171,845) | (60) | % | ||
Non-GAAP Results | ||||||||
Bookings | $ | 3,400,158 | $ | 2,971,515 | 14 | % | ||
Overall liquidity (at period end) | $ | 818,196 | $ | 4,469,497 | (82) | % | ||
Management Commentary
Growth
AYI.com showed growth in key areas during the first quarter of 2014, including:
- Revenues - On a sequential basis, total revenues for the first quarter of 2014 increased 10% from the fourth quarter of 2013, marking the second consecutive quarterly increase in revenues;
- Active subscribers - Active subscribers increased 16% during the first quarter of 2014, which was the second consecutive fiscal quarterly increase in active subscribers, and the highest subscriber count since March 2013; and
- New subscription transactions - New subscription transactions increased 44% in the first quarter of 2014 as compared to the first quarter of 2013, and 30% on a sequential basis for the first quarter of 2014 as compared to the fourth quarter of 2013.
SNAP's Chief Executive Officer, Clifford Lerner, commented, "In the first quarter of 2014 we accomplished several goals: reducing expenses, improving user engagement, and continuing to grow our active subscriber base. Strong growth in subscription transactions will result in revenue recognition in the second quarter of 2014 and the remainder of 2014, as indicated by the 14% growth in bookings in the first quarter of 2014 as compared to the first quarter of 2013 and 18% on a sequential basis as compared to the fourth quarter of 2013."
Liquidity and Cash Flow
- In April 2014, we entered into Amendment No. 1 to our Business Development Agreement with Match.com, LLC, which extended the term an additional 90 days, and separately issued an unsecured promissory note, collectively resulting in an increase of $600,000 cash;
- Expense management – Employee headcount decreased 12% from 42 employees at December 31, 2013 to 37 employees at March 31, 2014, and we continue to manage expenses; and
- Break-even cash flow – We are targeting break-even cash flow for the third quarter of 2014.
SNAP's Chief Operating Officer, Alex Harrington, added, "With $600,000 of additional cash originating from the financing and Match.com, LLC renewal, events that occurred subsequent to the end of the first quarter of 2014, we believe we presently have sufficient cash on hand to operate the company through the third quarter of 2014, at which time we expect to break-even on cash flow from operations. However, we plan to explore growth capital fundraising opportunistically."
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.com is one of the largest social and mobile dating applications on the Internet and offers a completely integrated Facebook, iPhone, Android and Web dating application. AYI.com's mission is to improve the online dating experience of meeting new people by integrating a user's friends and interests to enable more meaningful connections. For more information on SNAP, please visit http://www.snap-interactive.com/, its online dating blog at http://www.ayi.com/dating-blog, on Facebook at http://www.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. Android® is a registered trademark of Google Inc. AYI.com® is a registered trademark of Snap Interactive, Inc.
PR Contact:
Joanna Barber
jbarber@snap-interactive.com
212-967-5120 ext. 111
IR Contact:
IR@snap-interactive.com
Stephen Hart
Hayden IR
hart@haydenir.com
917-658-7878
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 anticipate and respond to changing user and industry trends and preferences; the intense competition in the social dating marketplace; the ability to establish and maintain brand recognition; the ability to support and derive revenue from our application for mobile platforms; the success of new AYI features and branding on user engagement and conversion rates; the effect of the move of the Company's data center on operational flexibility, cost savings, development and production; and circumstances that could disrupt the functioning of the Company's application 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. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
March 31, | December 31, | |||||
2014 | 2013 | |||||
(Unaudited) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 432,869 | $ | 927,352 | ||
Restricted cash | 385,327 | 490,315 | ||||
Credit card holdback receivable | 310,313 | 232,264 | ||||
Accounts receivable, net of allowances and reserves of $41,402 and $37,850, respectively | 321,852 | 385,370 | ||||
Prepaid expense and other current assets | 75,774 | 114,863 | ||||
Total current assets | 1,526,135 | 2,150,164 | ||||
Fixed assets and intangible assets, net | 482,929 | 522,462 | ||||
Notes receivable | 171,799 | 170,566 | ||||
Investments | 125,000 | 100,000 | ||||
Total assets | $ | 2,305,863 | $ | 2,943,192 | ||
Liabilities and stockholders' equity (deficit) | ||||||
Current liabilities: | ||||||
Accounts payable | 1,219,823 | 861,730 | ||||
Accrued expenses and other current liabilities | 360,866 | 671,142 | ||||
Deferred subscription revenue | 2,087,909 | 1,826,771 | ||||
Deferred advertising revenue | 146,667 | 300,000 | ||||
Total current liabilities | 3,815,265 | 3,659,643 | ||||
Long term deferred rent | - | 12,058 | ||||
Warrant liability | 70,275 | 140,550 | ||||
Total liabilities | 3,885,540 | 3,812,251 | ||||
Stockholders' equity (deficit): | ||||||
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, 49,507,826 and 49,987,826 shares issued, respectively, and 39,157,826 and 39,132,826 shares outstanding, respectively | 39,158 | 39,133 | ||||
Additional paid-in capital | 11,035,656 | 10,813,205 | ||||
Accumulated deficit | (12,654,491) | (11,721,397) | ||||
Total stockholders' equity (deficit) | (1,579,677) | (869,059) | ||||
Total liabilities and stockholders' equity (deficit) | $ | 2,305,863 | $ | 2,943,192 | ||
SNAP INTERACTIVE, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Revenues: | ||||||||
Subscription revenue | $ | 3,139,020 | $ | 3,427,891 | ||||
Advertising revenue | 153,333 | 41,669 | ||||||
Total revenues | 3,292,353 | 3,469,560 | ||||||
Costs and expenses: | ||||||||
Programming, hosting and technology expense | 942,411 | 1,385,391 | ||||||
Compensation expense | 769,403 | 797,070 | ||||||
Professional fees | 250,155 | 267,104 | ||||||
Advertising and marketing expense | 1,472,210 | 1,131,680 | ||||||
General and administrative expense | 863,417 | 1,146,026 | ||||||
Total costs and expenses | 4,297,596 | 4,727,271 | ||||||
Loss from operations | (1,005,243) | (1,257,711) | ||||||
Interest income, net | 1,874 | 1,665 | ||||||
Gain on change in fair value of warrants | 70,275 | 1,100,975 | ||||||
Loss before provision for income taxes | (933,094) | (155,071) | ||||||
Provision for income taxes | - | - | ||||||
Net loss | $ | (933,094) | $ | (155,071) | ||||
Net loss per common share: | ||||||||
Basic and diluted | $ | (0.02) | $ | (0.00) | ||||
Weighted average number of common shares used in calculating net loss per common share: | ||||||||
Basic and diluted | 39,142,548 | 38,908,382 | ||||||
SNAP INTERACTIVE, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (933,094) | $ | (155,071) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 43,263 | 42,033 | ||||||
Stock-based compensation expense | 222,476 | 74,947 | ||||||
Gain on change in fair value of warrants | (70,275) | (1,100,975) | ||||||
Changes in operating assets and liabilities: | ||||||||
Decrease (increase) in restricted cash | 104,988 | (200,211) | ||||||
Decrease (increase) in credit card holdback receivable | (78,049) | 43,367 | ||||||
Decrease in accounts receivable | 63,518 | 12,709 | ||||||
Decrease in prepaid expenses and other current assets | 39,089 | 42,210 | ||||||
Increase in accounts payables, accrued expenses and other current Liabilities | 46,002 | 532,815 | ||||||
Decrease in deferred rent | (10,243) | (7,293) | ||||||
Increase (decrease) in deferred subscription revenue | 261,138 | (456,376) | ||||||
Decrease in deferred advertising revenue | (153,333) | - | ||||||
Net cash used in operating activities | (464,520) | (1,171,845) | ||||||
Cash flows from investing activities: | ||||||||
Purchase of fixed assets | (3,730) | (20,296) | ||||||
Purchase of non-marketable equity securities | (25,000) | - | ||||||
Issuance of notes receivable issued to employees and accrued interest | (1,233) | (1,169) | ||||||
Net cash used in investing activities | (29,963) | (21,465) | ||||||
Cash flows from financing activities: | ||||||||
Net cash provided by financing activities | - | - | ||||||
Decrease in cash and cash equivalents | (494,483) | (1,193,310) | ||||||
Balance of cash and cash equivalents at beginning of period | 927,352 | 5,357,596 | ||||||
Balance of cash and cash equivalents at end of period | $ | 432,869 | $ | 4,164,286 | ||||
Supplemental disclosure of cash flow information: | ||||||||
AYI.com domain name purchase in exchange for 100,000 shares of common stock | $ | - | $ | 100,000 | ||||
SNAP INTERACTIVE, INC. | ||||||||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | ||||||||||
March 31, 2014 | March 31, 2013 | December 31, 2013 | ||||||||
Reconciliation of Subscription Revenue to Bookings | ||||||||||
Subscription revenue | $ | 3,139,020 | $ | 3,427,891 | $ | 2,994,496 | ||||
Change in deferred subscription revenue | 261,138 | (456,376) | (115,996) | |||||||
Bookings | $ | 3,400,158 | $ | 2,971,515 | $ | 2,878,500 | ||||
March 31, 2014 | March 31, 2013 | December 31, 2013 | ||||||||
Reconciliation of Cash and Cash Equivalents to Overall Liquidity (at period end) | ||||||||||
Cash and cash equivalents | $ | 432,869 | $ | 4,164,286 | $ | 927,352 | ||||
Restricted cash | 385,327 | 305,211 | 490,315 | |||||||
Overall liquidity | $ | 818,196 | $ | 4,469,497 | $ | 1,417,667 | ||||
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;
- Overall liquidity does not reflect the Company's ability to convert restricted cash into cash and cash equivalents.
- 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
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, net cash used in operating activities and our financial results presented in accordance with GAAP.
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SOURCE Snap Interactive, Inc.
