SITO SITO Mobile Ltd

SITO Mobile Ltd. (NASDAQ: SITO), an insights-driven Consumer Behavior and Location Sciences™ company, announced today its financial results for the second quarter ended June 30, 2019. 

Financial Summary

• Total revenue increased 65% to $13.9 million;
• SITO’s existing markets comprised $5.1 million of total revenue;
• $8.8 million of total revenue was generated from new markets; and
• Detailed financial results for the three- months and six-months ended June 30, 2019 is described in the financial summary sections below.

Second Quarter Financial Summary (Second Quarter of 2019 vs. Second Quarter of 2018)

Total revenue increased $5.5 million, or 65%, to $13.9 million, compared to total revenue of $8.4 million. This increase is primarily attributable to entering a new market in 2019, the first campaign of which was substantially carried out during the second quarter.

Gross profit was $4.5 million, or 32% of total revenue, compared to $4.0 million, or 48% of total revenue. The decrease in gross profit margin was due to aggressive initial pricing to penetrate new markets on which the Company is focusing.

Loss from operations was $3.7 million compared to a loss from operations of $6.1 million. This loss included one-time non-recurring impairment losses of $2.1 million comprised of write-downs of internally developed software and customer relationship long-lived assets acquired from the Hipcricket acquisition in 2015. The loss from operations would have been $1.6 million as compared to a loss from June 30, 2018 of $6.1 million, excluding the impairment losses.

Net loss was $3.4 million, or $0.13 per share, compared to a net loss of $5.7 million, or $0.23 per share.

Year-to-Date Financial Summary (First Six Months of 2019 vs. First Six Months of 2018)

Total revenue increased $2.7 million, or 14%, to $22.3 million, compared to total revenue of $19.6 million. Gross profit was $7.3 million, or 33% of total revenue, compared to $8.5 million, or 43% of total revenue. Loss from operations was $8.5 million compared to a loss from operations of $12.0 million. This loss from operations included one-time non-recurring losses of $2.1 million comprised of write-downs of internally developed software and customer relationship long-lived assets acquired from the Hipcricket acquisition in 2015. The loss from operations would have been $6.4 million as compared to a loss of $12.0 million, excluding the impairment losses.

Net loss was $8.5 million, or $0.33 per share, compared to a net loss of $11.0 million, or $0.45 per share.

Following is a reconciliation of the amounts of net loss from operations recognized and presented on the Unaudited Consolidated Statements of Operations and the resulting loss per share, in accordance with US GAAP to the amount of loss from operations and loss per share attributable to and before the effect of the aforementioned recognized non-recurring items:

						For the Three-months ended						For the Six-months ended
						June 30,						June 30,
						2019			2018			2019			2018
As reported on the Statement of Operations,   in accordance with US GAAP:
	Loss from operations				$	3,704,789		$	6,081,577		$	8,435,264		$	12,030,240
Less:
	Loss on impairment - capitalized software development costs					1,911,285			-			1,911,285			-
	Loss on impairment - customer relationships					177,535			-			177,535			-
		Loss on impairment of long-lived assets				2,088,820			-			2,088,820			-
Loss from operations before non-recurring items						1,615,969			6,081,577			6,346,444			12,030,240
Other (income) expense						(305,624	)		(367,774	)		13,904			(1,099,043	)
Income tax expense						3,037			22,059			2,517			53,444
	Net loss before non-recurring items				$	1,313,382		$	5,735,862		$	6,362,865		$	10,984,641
As reported on the Statement of Operations,   in accordance with US GAAP:
	Basic and diluted net (loss) per share				$	(0.13	)	$	(0.23	)	$	(0.33	)	$	(0.45	)
Less:
	Basic and diluted net (loss) per share,   attributable to non-recurring items					0.08			-			0.08			-
Basic and diluted net (loss) per share before non-recurring items					$	(0.05	)	$	(0.23	)	$	(0.25	)	$	(0.45	)
Basic and diluted weighted average shares outstanding						25,641,812			25,128,681			25,593,853			24,430,373

Balance Sheet

As of June 30, 2019, the Company had $0.8 million in cash and cash equivalents compared to $2.6 million at December 31, 2018.

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.

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 retain 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, 2018, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, and the 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 RelationsBrett MaasHayden IRPhone: 480.861.2425Email: SITO@haydenir.com

Source: SITO Mobile, Ltd.

SITO Mobile, Ltd.
CONSOLIDATED BALANCE SHEETS
				June 30, 2019 (Unaudited)			December 31, 2018
Assets
	Current assets
		Cash and cash equivalents	$	789,528		$	2,597,246
		Accounts receivable, net		15,674,306			10,206,664
		Other assets, current		194,935			469,041
		Total current assets		16,658,769			13,272,951
	Property and equipment, net			250,363			331,635
	Other assets
		Capitalized software development costs, net		-			861,699
		Intangible assets:
		Patents		583,681			630,857
		Other intangible assets, net		583,971			897,007
		Goodwill		6,444,225			6,444,225
		Other assets		123,722			125,543
		Operating Lease ROU Assets, net		172,404			311,717
		Total other assets		7,908,003			9,271,048
		Total assets	$	24,817,135		$	22,875,634
Liabilities and Stockholders' Equity
	Current liabilities
		Accounts payable	$	13,102,216		$	4,377,805
		Accrued expenses		2,936,196			4,610,146
		Other current liabilities		658,434			3,571
		Deferred revenue		100,000			264,493
		Operating lease liabilities		184,724			307,536
		Note payable, net of discount		1,154,614			-
		Warrant liability		145,564			174,684
		Total current liabilities		18,281,748			9,738,235
	Long-term liabilities
		Operating lease liabilities		-			27,062
		Other liabilities		5,850			7,644
		Total long-term liabilities		5,850			34,706
		Total liabilities		18,287,598			9,772,941
	Commitments and contingencies
	Stockholders' Equity
		Common stock, $.001 par value; 100,000,000 shares authorized,
		25,641,812 shares issued and outstanding as of June 30, 2019; and
		25,529,078 December 31, 2018, respectively		25,642			25,529
		Additional paid-in capital		187,862,312			185,983,896
		Accumulated deficit		(181,358,417	)		(172,906,732	)
		Total stockholders' equity		6,529,537			13,102,693
		Total liabilities and stockholders' equity	$	24,817,135		$	22,875,634

SITO Mobile, Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
				For the Three-months ended						For the Six-months ended
				June 30,						June 30,
				2019			2018			2019			2018
Revenue
	Media placement		$	13,892,216		$	8,428,564		$	22,322,592		$	19,573,216
	Total revenue			13,892,216			8,428,564			22,322,592			19,573,216
Cost of Revenue
	Cost of revenue			9,414,674			4,402,154			14,987,411			11,100,030
	Gross profit			4,477,542			4,026,410			7,335,181			8,473,186
Operating Expenses
	Sales and marketing			3,355,001			5,512,821			7,393,117			10,781,989
	General and administrative			2,564,711			4,423,630			5,965,883			9,364,096
	Depreciation and amortization			173,799			171,536			322,625			357,341
	Loss on impairment of long-lived assets			2,088,820			-			2,088,820			-
	Total operating expenses			8,182,331			10,107,987			15,770,445			20,503,426
		Loss from operations		(3,704,789	)		(6,081,577	)		(8,435,264	)		(12,030,240	)
Other Income (Expense)
	Gain on revaluation of warrant liability			348,881			334,304			29,120			975,520
	Other income			16,894			31,551			17,282			117,630
	Interest (expense) income, net			(60,151	)		1,919			(60,306	)		5,893
		Loss before income taxes		(3,399,165	)		(5,713,803	)		(8,449,168	)		(10,931,197	)
		Income tax expense		(3,037	)		(22,059	)		(2,517	)		(53,444	)
		Net loss	$	(3,402,202	)		(5,735,862	)		(8,451,685	)	$	(10,984,641	)
	Basic and diluted net (loss) per share		$	(0.13	)		(0.23	)		(0.33	)	$	(0.45	)
	Basic and diluted weighted average shares outstanding			25,641,812			25,128,681			25,593,853			24,430,373