NEW YORK, NY -- (Marketwired) -- 05/15/15 -- Snap Interactive, Inc. ("SNAP," the "Company," "we," "our" or "us") (OTCQB: STVI), a leading online dating provider, today announced financial and operational results for the quarter ended March 31, 2015.
Highlights:
- Raised aggregate gross proceeds of $3.0 million in a private placement of debt and equity securities;
- Total revenues decreased 3.2% and subscription revenue decreased 0.3% for the first quarter of 2015 relative to the comparable period in 2014;
- Net loss was approximately $1.2 million, or $0.03 per share of basic and diluted common stock, for the first quarter of 2015 as compared with net loss of approximately $0.9 million, or $0.02 per share of basic and diluted common stock, for the comparable period in 2014;
- Cash and cash equivalents totaled approximately $2.3 million as of March 31, 2015, representing an increase of approximately $1.2 million from December 31, 2014;
- Increased active subscriber count as of March 31, 2015 to approximately 102,700 from approximately 100,700 as of December 31, 2014, representing an increase of 2%; and
- Increased user activity on The Grade, our new mobile dating application, reaching a usage threshold of more than 8 million swipes.
Financial Highlights
Three Months Ended
March 31,
----------------------------
Statement of Operations and Cash Flow Results 2015 2014
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Total revenue $ 3,186,083 $ 3,292,353
Subscription revenue $ 3,129,310 $ 3,139,020
Advertising and marketing expense $ 1,726,097 $ 1,472,210
Net loss $ (1,219,179) $ (933,094)
Net cash used in operating activities $ (1,052,770) $ (464,520)
Non-GAAP Results
Active subscribers (at period end) 102,700 90,000
Bookings $ 3,157,566 $ 3,400,158
Adjusted EBITDA $ (612,465) $ (739,504)
March 31, December 31,
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Balance Sheet Results 2015 2014
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Cash and cash equivalents $ 2,327,806 $ 1,138,385
Deferred subscription revenue $ 1,980,331 $ 1,952,075
Non-GAAP Results
Active subscribers (at period end) 102,700 100,700
Management Commentary
Growth and New Initiatives
Despite some challenges in the first quarter of 2015, we achieved important milestones in growth and new initiatives, including:
- Active Subscribers - Active subscribers at March 31, 2015 increased 14% as compared to the first quarter of 2014 and 2% as compared to December 31, 2014. We achieved a sixth consecutive fiscal quarter increase in active subscribers and the highest month-end active subscriber count since October 31, 2012;
- Completion of Financing - On February 13, 2015, we closed a private placement of a convertible note and equity securities for aggregate gross proceeds of $3.0 million for general corporate purposes, which may include, among other things, capital expenditures and working capital for growth and new initiatives;
- New Spanish Language Version of AYI - In March, we introduced a Spanish-language version of the AYI Android application as part of our initiative to introduce localized versions of our AYI application in large foreign markets; and
- The Grade User Activity - As of March 31, 2015, usage of The Grade mobile application exceeded 8 million swipes.
SNAP's Chief Executive Officer, Clifford Lerner, commented, "The first quarter of 2015 was a landmark quarter for us in that we closed a financing, built an active community on our new mobile application, The Grade, and commenced the next stage of execution of our portfolio strategy by launching the first translated version of our AYI Android application. We were also pleased that we experienced a new 24-month high in the number of active subscribers during the first quarter of 2015."
SNAP faced headwinds in revenue growth in the quarter ended March 31, 2015. The Company's contribution of revenue from international territories in the first quarter of 2015 was negatively impacted by unfavorable foreign exchange rates as compared to the first quarter of 2014. We also experienced elevated levels of consumer refunds and chargebacks in the first quarter of 2015, which contributed to a decrease in subscription revenue compared to the first quarter of 2014. Excluding the effect of refunds and chargebacks in both periods, subscription revenue would have been 3% higher in the quarter ended March 31, 2015, as compared to the same period in 2014. Variability in advertising revenue also contributed to the shortfall in the year-over-year comparison of our revenue growth, as we terminated a large, exclusive advertising contract in 2014 in favor of more flexible, non-exclusive advertising relationships in 2015, which, comparatively, initially generate revenue at lower levels.
Liquidity and Cash Flow
- Cash Balance - We ended the first quarter of 2015 with approximately $2.3 million of cash and cash equivalents on our balance sheet, representing the highest balance of cash and cash equivalents reported at quarter-end since June 30, 2013;
- Completion of Financing - On February 13, 2015, we received net proceeds of $2.7 million from a private placement of a convertible note and equity securities;
- Note Repayment - We repaid an aggregate of $400 thousand of promissory notes in February and March 2015;
- One-Time Payments - During the first quarter of 2015, we incurred a significant amount of one-time, non-recurring payments that had a negative effect on cash flow from operating activities. These included a repayment of an advance under an advertising agreement, an increase in security deposit and moving costs in connection with the relocation of our corporate headquarters and a legal settlement and related legal fees; and
- Advertising and Marketing - We invested incrementally in new marketing opportunities in the first quarter of 2015 that yielded lower short term returns than expected and we subsequently scaled down our investments in these marketing opportunities.
SNAP's Chief Operating Officer, Alex Harrington, commented, "We are excited to have new capital in our business available to fund growth opportunities. Although we had to meet several one-time cash commitments in the first quarter of 2015, we expect to continue to operate a lean and cash efficient business."
Mr. Harrington continued, "Also, as we embark on our portfolio strategy, we foresee our industry consolidating, and we will consider certain acquisition opportunities, including dating and social networking companies with strong brands, cash flow and management."
About Snap Interactive, Inc.
Snap Interactive, Inc. develops, owns and operates dating applications for social networking websites and mobile platforms. SNAP's flagship brand, AYI.com is a multi-platform online dating site with over one million monthly active users. The Grade is a mobile dating application catering to high quality singles. For more information, please visit http://www.snap-interactive.com.
For more information on SNAP, please visit http://www.snap-interactive.com.
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 trademark of Google Inc. AYI.com is a registered trademark of Snap Interactive, Inc.
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 achieve break-even cash flow or positive Adjusted EBITDA; the ability to increase or recognize revenue, decrease expenses and increase the number of active subscribers or new subscription transactions; the ability to enter into new advertising agreements; the ability to diversify new user acquisition channels or improve the conversion of users to paid subscribers; the ability to anticipate and respond to changing user and industry trends and preferences; the intense competition in the online dating marketplace; the ability to release new applications or derive revenue from new applications; potential acquisitions of dating and social networking companies; the ability to use indebtedness to grow our business or increase the number of active subscribers and revenue; 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,
2015 2014
------------ -------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 2,327,806 $ 1,138,385
Credit card holdback receivable 215,913 648,759
Accounts receivable, net of allowances and
reserves of $54,256 and $42,533,
respectively 249,518 221,128
Short term security deposits 24,956 115,104
Prepaid expense and other current assets 109,103 93,542
------------ -------------
Total current assets 2,927,296 2,216,918
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Fixed assets and intangible assets, net 442,868 563,123
Notes receivable 79,154 78,520
Long term security deposits 335,659 135,000
Investments 200,000 200,000
------------ -------------
Total assets $ 3,984,977 $ 3,193,561
============ =============
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable $ 1,109,319 $ 1,074,345
Accrued expenses and other current
liabilities 350,767 1,062,836
Notes payable - 400,000
Deferred subscription revenue 1,980,331 1,952,075
Deferred advertising revenue 20,786 13,427
------------ -------------
Total current liabilities 3,461,203 4,502,683
------------ -------------
Convertible note payable, net of discount 719,572 -
Derivative liabilities 2,113,425 23,425
Capital lease obligations 131,695 149,055
------------ -------------
Total liabilities 6,425,895 4,675,163
------------ -------------
Commitments and Contingencies
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, 50,007,826 and 49,507,826
shares issued, respectively, and 39,682,826
and 39,182,826 shares outstanding,
respectively 39,683 39,183
Additional paid-in capital 12,117,852 11,858,489
Accumulated deficit (14,598,453) (13,379,274)
------------ -------------
Total stockholders' equity (deficit) (2,440,918) (1,481,602)
------------ -------------
Total liabilities and stockholders' equity
(deficit) $ 3,984,977 $ 3,193,561
============ =============
SNAP INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
------------------------
2015 2014
----------- -----------
Revenues:
Subscription revenue $ 3,129,310 $ 3,139,020
Advertising revenue 56,773 153,333
----------- -----------
Total revenues 3,186,083 3,292,353
Costs and expenses:
Programming, hosting and technology expense 526,947 942,411
Compensation expense 736,580 769,403
Professional fees 234,633 250,155
Advertising and marketing expense 1,726,097 1,472,210
General and administrative expense 944,601 863,417
----------- -----------
Total costs and expenses 4,168,858 4,297,596
----------- -----------
Loss from operations (982,775) (1,005,243)
Interest (expense) income, net (236,404) 1,874
Change in fair value of derivative liabilities - 70,275
----------- -----------
Loss before provision for income taxes (1,219,179) (933,094)
----------- -----------
Provision for income taxes - -
Net loss $(1,219,179) $ (933,094)
=========== ===========
Net loss per share of common stock:
Basic and diluted $ (0.03) $ (0.02)
=========== ===========
Weighted average number of shares of common stock
used in calculating net loss per share of common
stock:
Basic and diluted 39,413,824 39,142,548
=========== ===========
SNAP INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
--------------------------
2015 2014
------------ ------------
Cash flows from operating activities:
Net loss $ (1,219,179) $ (933,094)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 60,819 43,263
Lease obligation interest expense 7,778 --
Stock-based compensation expense 229,863 222,476
Loss on disposal of fixed assets 79,628 --
Amortization of debt issuance costs 21,023 --
Amortization of debt discount 133,589 --
Change in fair value of derivative liabilities -- (70,275)
Changes in operating assets and liabilities:
Restricted cash -- 104,988
Credit card holdback receivable 432,846 (78,049)
Accounts receivable (28,390) 63,518
Security deposits (110,511) --
Prepaid expenses and other current assets (16,352) 39,089
Accounts payable, accrued expenses and other
current liabilities (683,598) 46,002
Deferred rent 4,099 (10,243)
Deferred subscription revenue 28,256 261,138
Deferred advertising revenue 7,359 (153,333)
------------ ------------
Net cash used in operating activities (1,052,770) (464,520)
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (26,192) (3,730)
Proceeds from sale of fixed assets 6,000 --
Purchase of non-marketable equity securities -- (25,000)
Notes receivable (634) (1,233)
------------ ------------
Net cash used in investing activities (20,826) (29,963)
------------ ------------
Cash flows from financing activities:
Payments of capital lease obligations (22,734) --
Repayment of promissory notes (400,000) --
Payment of financing costs (314,249) --
Proceeds received under Securities Purchase
Agreement 3,000,000 --
------------ ------------
Net cash provided by financing activities 2,263,017 --
------------ ------------
Net increase (decrease) in cash and cash
equivalents 1,189,421 (494,483)
Balance of cash and cash equivalents at
beginning of period 1,138,385 927,352
------------ ------------
Balance of cash and cash equivalents at end of
period $ 2,327,806 $ 432,869
============ ============
Non-cash investing and financing activities:
Compound embedded derivative under the Note and
Securities Purchase Agreement recorded as
derivative liabilities (See Note 5) $ 1,748,000 $ --
Warrants issued under the Advisory Services
Agreement as additional consideration for the
Note and recorded as derivative liabilities (See
Note 5) $ 342,000 $ --
Common stock issued under the Advisory Services
Agreement as additional consideration for the
Note $ 30,000 $ --
SNAP INTERACTIVE, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(Unaudited)
Three Months Ended
March 31,
-------------------------
2015 2014
------------ ------------
Reconciliation of Subscription Revenue to Bookings
Subscription revenue $ 3,129,310 $ 3,139,020
Change in deferred subscription revenue 28,256 261,138
------------ ------------
Bookings $ 3,157,566 $ 3,400,158
============ ============
Three Months Ended
March 31,
----------------------------
2015 2014
------------- -------------
Reconciliation of Net loss to Adjusted EBITDA:
Net loss $ (1,219,179) $ (933,094)
Interest expense (income), net 236,404 (1,874)
Loss on disposal of fixed assets 79,628 --
Depreciation and amortization expense 60,819 43,263
Change in fair value of derivative )
liabilities -- (70,275
Stock-based compensation expense 229,863 222,476
------------- -------------
Adjusted EBITDA $ (612,465) $ (739,504)
============= =============
Non-GAAP Financial Measures
The Company defines Adjusted EBITDA as earnings before interest, taxes depreciation and amortization, plus non-cash stock-based compensation and the change in fair value of derivative liabilities. The Company has provided in this release certain non-GAAP financial information including bookings and Adjusted EBITDA to supplement the condensed 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 the Company's financial results to assess operational performance and to determine the Company's 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. The Company believes 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. The Company believes these non-GAAP financial measures are useful to investors and others to understand and evaluate the Company's operating results and it allows for a more meaningful comparison between the Company's performance and that of competitors.
Some limitations of bookings and Adjusted EBITDA as financial measures include that:
- Bookings does not reflect that we recognize subscription revenue from subscription fees over the length of the subscription term and subscription revenue from micro-transactions over a two-month period;
- Adjusted EBITDA does not (i) reflect cash capital expenditure requirements for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; (ii) the Company's working capital requirements; (iii) consider the potentially dilutive impact of stock-based compensation; (iv) reflect interest expense or interest payments on our outstanding indebtedness; and (v) reflect the change in fair value of warrants; and
- Other companies, including companies in our industry, may calculate bookings or Adjusted EBITDA differently or choose not to calculate bookings or Adjusted EBITDA at all, which reduces their usefulness as comparative measures.
Because of these limitations, you should consider this non-GAAP financial information along with other financial performance measures, including total revenues, subscription revenue, 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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IR Contact:
IR@snap-interactive.com
PR Contact:
Adam Handelsman
adam@specopscomm.com
212-518-7721
