Exhibit 99.1

 

 

SITO Mobile Reports 28% Increase in Revenues for Second Quarter

 

New senior leadership to deploy differentiated data-driven strategy focused on large, multi-year recurring revenue opportunities with Fortune 500 brands and tier-1 agencies

 

JERSEY CITY, N.J., August 14, 2017 -- SITO Mobile Ltd. (NASDAQ:SITO), a leading mobile engagement platform provider, announced today its financial results for the second quarter and six months ended June 30, 2017. 

 

Three Months Ended June 30, 2017 and Recent Business Highlights

 

Total revenues for the three months ended June 30, 2017 increased by $2.4 million, or 28%, to $10.8 million, compared to total revenues of $8.4 million in the corresponding period of 2016

 

Reported results include approximately $1.8 million in non-recurring expenses related to professional fees incurred for the investigation of former executives, the class action lawsuits and the contested solicitation process

 

On June 26, 2017, the Company appointed Thomas J. Pallack as Chief Executive Officer, Mark Del Priore as Chief Financial Officer and William Seagrave as Chief Operating Officer, proven leaders with a broad range of experiences that are uniquely suited for SITO to strategically transition the Company and accelerate the Company’s growth and expansion plans

 

Under our new leadership, and subsequent to the three month period ended June 30, 2017, the Company has consummated multimillion dollar insights-driven transactions with large brands, initiated a preferred agency partnership for data and media solutions, and established a CMO advisory board to consist of globally known industry experts

 

On July 28, 2017, the Company completed a $6.0 million registered direct offering, the proceeds of which were used to, among other things, repay the entire principal amount outstanding, together with accrued and unpaid interest, under the Company’s senior secured indebtedness

 

Tom Pallack, SITO’s Chief Executive Officer commented, “My clear mission as SITO’s new CEO is to drive long-term growth and unlock sustainable value for all our stakeholders. Since the end of June, the new SITO leadership team has begun implementing new initiatives that leverage the full capabilities of our innovative technology platform with the goal of differentiating us within the industry. The key element of our new strategy is the leveraging of our unique end-to-end technology platform and the proprietary data and analytics it assembles to help brands drive more effective campaigns.”

 

 

 

“SITO’s experienced leadership team has the track record, relationships and know-how to properly market this highly differentiated data-driven offering and we have begun repositioning our teams to focus on large, multi-million dollar transactions that are syndicated over multiple years with recurring revenues,” Pallack added. “At the end of the second quarter, we began aggressively marketing SITO’s mobile data capabilities to Fortune 500 Brands and leading agencies. In the first 45 days of this effort, we have closed multiple transactions that are substantially larger than any transaction in SITO’s history. Transactions like these, featuring larger campaigns with more significant customers, better leverages our business model. Over time, we believe securing larger wins will help us expand margins and drive profitability.”

 

“Over the long-term, these larger, multi-year deals will provide us with a more stable foundation to accelerate growth and drive increased visibility into future revenues,” Pallack concluded. “In the near term, as we advance our strategic transition efforts, we will be focused on securing new business. The announcement of new customers and larger deals will be the most effective way to track our progress until our backlog reaches a level that provides us enough insight to offer accurate guidance. Based on our bookings to date, we expect third quarter revenues to increase year-over-year and be sequentially higher than the second quarter, and our operating and net losses should narrow in the absence of $1.8 million in non-recurring costs related to activities that occurred and concluded in the second quarter.”

 

Second Quarter Financial Summary

 

Total revenues for the three months ended June 30, 2017 increased by $2.4 million, or 28%, to $10.8 million, compared to total revenues of $8.4 million in the corresponding period of 2016. This increase was driven primarily by the increase in media placement revenue as the Company continued to expand its direct sales force and increase our customer base.

 

Loss from operations for the three months ended June 30, 2017 was $2.8 million, which includes $1.8 million in non-recurring expenses in connection with professional fees incurred for the investigation of the Company’s former executives, class action lawsuits and the contested solicitation process.

 

Net loss for the three months ended June 30, 2017 was $3.5 million, or ($0.17) per basic and diluted share, compared to net income of $0.7 million, or $0.04 per basic and diluted share, for the corresponding period of 2016. The decline in net income was primarily due to non-recurring professional fees and an increase in headcount.

 

Year to Date Financial Summary

 

Total revenues for the six months ended June 30, 2017 increased by $4.0 million, or 30%, to $17.4 million, compared to total revenues of $13.4 million in the corresponding period of 2016. This increase was driven by an increase in media placement revenues, as the Company continued to expand its direct sales force and increase its customer base.

 

Loss from operations for the six months ended June 30, 2017 was $5.5 million, which includes $2.7 million in non-recurring expenses related to professional fees incurred for the investigation of former executives, the class action lawsuits and the contested solicitation process.

 

Net loss for the six months ended June 30, 2017 was $6.5 million, or ($0.32) per basic and diluted share, compared to $0.4 million, or ($0.03) per basic and diluted share, for the corresponding period of 2016. The decline in net income was primarily due to non-recurring professional fees and an increase in headcount.

 

2

 

 

Balance Sheet Summary

 

The Company completed the quarter with $3.2 million in cash and cash equivalents compared to $8.7 million at December 31, 2016. Management believes that our current cash levels and our cash flows from future operations will be adequate to meet anticipated working capital needs, anticipated levels of capital expenditures and contractual obligations for the next twelve months.

 

On July 28, 2017, and subsequent to the end of the second quarter, the Company completed a $6.0 million registered direct offering. On August 1, 2017, the Company used approximately $4.9 million of the proceeds of raised from this offering to prepay in full all outstanding principal, accrued and unpaid interest due through the date of repayment and termination fees payable with respect to the Company’s senior secured indebtedness.

 

Conference call information:

 

Date: Monday, August 14, 2017

Time: 4:30 p.m. Eastern Time (ET)

Dial in Number for U.S. & Canadian Callers: 877-407-8293

Dial in Number for International Callers (Outside U.S. & Canada): 201-689-8349

 

The conference call will also be webcasted live on the Investor Relations section of SITO’s IR web site at http://ir.sitomobile.com/ir-calendar.

 

Participating on the call will be SITO Mobile's Chief Executive Officer, Thomas Pallack; Chief Financial Officer, Mark Del Priore and Chief Operating Officer, Bill Seagrave. The Company plans to issue an earnings release prior to the call. To join the live conference call, please dial into the above referenced telephone numbers five minutes prior to the scheduled conference call time.

 

A replay will be available for two weeks starting at approximately 8 p.m. ET on August 14, 2017. To access the replay, please dial 877-660-6853 in the U.S. and 201-612-7415 for international callers. The conference ID# is 13668198.

 

About SITO Mobile, Ltd.

 

SITO Mobile is transforming the manner in which brands connect with consumers in the real world by developing a mobile engagement platform that drives awareness, loyalty, and ultimately sales. In an increasingly mobile-first culture, SITO Mobile delivers proven location-based advertising solutions to Fortune 500 brands and agencies. Through innovation, the company uses proprietary data to build cutting edge, in-house technology, arming clients with the best resources for successful campaigns. Using in-store targeting, proximity targeting, geo-conquesting and attribution data, the platform creates audience profiles to develop measurable hyper-targeted campaigns for brands. SITO’s real-time location-based marketing technology gives us the unique advantage of understanding and shaping the future of retail and consumer behavior.

 

For more information, visit www.sitomobile.com.

 

Contacts:

 

Investor Relations

Rob Fink

Hayden IR

Phone: 646.415.8972

Email: SITO@haydenir.com

 

Source: SITO Mobile, Ltd.

 

Released August 14, 2017

 

3

 

 

 

SITO Mobile, Ltd.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

 

 

   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2017   2016   2017   2016 
Revenue                
Media placement  $10,725,454   $8,297,880   $17,247,586   $13,159,380 
Licensing and royalties   78,667    125,946    201,496    261,365 
Total revenue   10,804,121    8,423,826    17,449,082    13,420,745 
                     
Costs and Expenses                    
Cost of revenue   5,626,862    3,770,916    9,021,923    6,214,053 
Sales and marketing   3,735,131    2,690,959    7,212,042    4,814,733 
General and administrative   4,087,978    1,204,559    6,418,432    2,880,004 
Depreciation and amortization   120,923    149,871    282,687    304,376 
                     
Total costs and expenses   13,570,894    7,816,305    22,935,084    14,213,166 
                     
(Loss) income from operations   (2,766,773)   607,521    (5,486,002)   (792,421)
                     
Other Income (Expense)                    
Interest expense   (352,147)   (445,091)   (743,761)   (884,891)
                     
Net (loss) before income taxes   (3,118,920)   162,430    (6,229,763)   (1,677,312)
                     
Provision for income taxes   -    -    -    - 
                     
Net (loss) income from continuing operations   (3,118,920)   162,430    (6,229,763)   (1,677,312)
                     
Discontinued Operations                    
(Loss) income from operations of discontinued component   (367,008)   562,825    (315,632)   1,231,871 
Income tax benefit   -    -    -    - 
                     
Net (loss) income from discontinued operations   (367,008)   562,825    (315,632)   1,231,871 
                     
   Net (loss) income  $(3,485,928)  $725,255   $(6,545,395)  $(445,441)
                     
Basic net income (loss) per share                    
Continuing operations   (0.15)   0.01    (0.30)   (0.10)
Discontinued operations   (0.02)   0.03    (0.02)   0.07 
Basic net loss per share  $(0.17)  $0.04   $(0.32)  $(0.03)
                     
Basic weighted average shares outstanding   20,693,809    17,355,478    20,687,463    17,288,445 
                     
Diluted earnings (loss) per share                    
Continuing operations   -    0.01    -    - 
Discontinued operations   -    0.03    -    - 
Diluted net earnings (loss) per share  $-   $0.04   $-   $- 
                     
Diluted weighted average shares outstanding   -    19,831,509    -    - 

  

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SITO Mobile, Ltd.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

   June 30,  December 31,
   2017  2016
   (Unaudited)   
       
Assets          
Current assets          
Cash and cash equivalents  $3,176,550   $8,744,545 
Accounts receivable, net   9,980,386    8,842,256 
Other prepaid expenses   540,183    229,039 
Assets from discontinued operations - net   14,390    870,716 
           
Total current assets   13,711,509    18,686,556 
           
Property and equipment, net   500,581    410,688 
           
Other assets          
Capitalized software development costs, net   1,852,959    1,698,992 
Intangible assets:          
Patents   478,517    461,730 
Patent applications cost   836,785    854,088 
Other intangible assets, net   1,303,507    1,439,007 
Goodwill   6,444,225    6,444,225 
Deferred Loan costs, net   20,395    37,676 
Other assets including security deposits   92,420    112,362 
           
Total other assets   11,028,808    11,048,080 
           
Total assets  $25,240,898   $30,145,324 
         
Liabilities and Stockholders’ Equity        
Current liabilities        
Accounts payable  $6,109,088   $3,184,237 
Accrued expenses   1,935,235    2,180,944 
Deferred revenue, current portion   

408,225

    245,407 
Other current liabilities, including security deposit   7,500    - 
Current obligations under capital lease   3,576    3,446 
Note payable, net - current portion   4,399,981    2,896,893 
Liabilities from discontinued operations - net   266,011    607,236 
           
Total current liabilities   

13,129,616

    9,118,163 
           
Long-term liabilities          
Obligations under capital lease   936    2,756 
Deferred revenue, noncurrent portion   

985,685

    - 
Note payable, net   -    3,952,827 
           
Total long-term liabilities   

986,621

    3,955,583 
           
Total liabilities   14,116,237    13,073,746 
           
Commitments and contingencies - See notes 16          
           
Stockholders’ Equity          
           
Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding   -    - 
Common stock, $.001 par value; 100,000,000 shares authorized, 20,715,564 shares issued and outstanding as of June 30, 2017 and $.001 par value; 100,000,000 shares authorized, 20,681,047 shares issued and outstanding as of December 31, 2016   20,715    20,680 
Additional paid-in capital   158,428,152    157,829,709 
Accumulated deficit   (147,324,206)   (140,778,811)
           
Total stockholders’ equity   11,124,661    17,071,578 
           
Total liabilities and stockholders’ equity  $25,240,898   $30,145,324 

 

 

5

 

 


The following information was filed by Sito Mobile, Ltd. (SITO) on Monday, August 14, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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