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Last updated on April 16, 2014 at 17:34 EDT

Snap Interactive Reports Results For The Quarter Ended June 30, 2013

August 14, 2013

NEW YORK, Aug. 14, 2013 /PRNewswire/ — Snap Interactive, Inc. (“SNAP,” the “Company,” “we,” “our” or “us”) (OTCBB: STVI), a leading social dating developer, today announced financial and operational results for the quarter ended June 30, 2013.

    --  On a sequential basis, total revenues for the second quarter of 2013
        decreased 9% to $3.2 million for the second quarter of 2013 from $3.5
        million for the first quarter of 2013;
    --  On a sequential basis, bookings for the second quarter of 2013 increased
        5% to $3.1 million for the second quarter of 2013 from $3.0 million for
        the first quarter of 2013, marking the Company's first increase in
        bookings since the first quarter of 2012;
    --  Total revenues decreased 40% to $3.2 million for the second quarter of
        2013 from $5.2 million for the comparable period in 2012;
    --  Quarterly bookings decreased 42% to $3.1 million for the second quarter
        of 2013 from $5.3 million for the comparable period in 2012;
    --  Net loss was $1.5 million, or $0.04 per basic and diluted common share
        for the second quarter of 2013 as compared with a net loss of $1.0
        million, or $0.03 per basic and diluted common share, for the comparable
        period in 2012;
    --  Available sources of liquidity (including cash and cash equivalents and
        restricted cash) totaled $3.0 million at June 30, 2013.

“We are excited to report that quarterly bookings for the second quarter of 2013 were up 5% sequentially, when compared to the first quarter of 2013, and only down 42% when compared to the comparable period in 2012. Even more encouraging is that the sequential increase in bookings occurred despite a 16% reduction in advertising and marketing spend for the second quarter of 2013 as compared to the first quarter of 2013, demonstrating that AYI.com’s new social features are resonating with its users and generating increased user engagement. We have seen an increase around the conversion of new users into paying subscribers since the launch of certain social features in March 2013,” said Jon D. Pedersen, Sr., SNAP’s Chief Financial Officer.

“Once again, our year-over-year results reflect a significant reduction in advertising and marketing expense for the second quarter of 2013 from the comparable period in 2012, which primarily results in decreased new user acquisition. We reduced our user acquisition from the second half of 2012 through January 2013 as we focused on rebuilding, testing and optimizing the redesigned AYI.com application. As we moved past the transitional phase of the re-launch, bookings began to improve during the first quarter of 2013, which continued during the second quarter of 2013.

Mr. Pedersen continued, “In addition to the improved core business metrics noted above, there are other developments that we are excited about around managing our expenses moving forward. We recently announced that we completed a data center move that we expect to save the Company approximately $500,000 a year while improving operational flexibility and site performance. We have also continued to execute our hiring plans of assembling a top-notch product and engineering team, with nearly half of our employees being engineers now. With the majority of the team now in place to execute against our product roadmap, we expect our recruiting costs to decrease during the second half of 2013. Recruiting expenses totaled approximately $300,000 during the first half of 2013 and nearly $600,000 during 2012. We plan to redeploy that cost savings toward user acquisition and marketing to seek to grow our revenue during the second half of 2013 and beyond.”

Financial Highlights


                       Three Months Ended                          Six Months Ended

                            June 30,                                   June 30,

    GAAP Results   2013                   2012 Change        2013                 2012             Change

    Total revenues         $3,151,989            $5,212,637  (40)%                      6,621,549         10,958,088  (40)%

    Advertising
     and marketing
     expense                 $952,248             3,023,656  (69)%                      2,083,929          7,543,897  (72)%

    Deferred
     revenue (at
     period end)           $2,031,702             3,654,943  (44)%                      2,031,702          3,654,943  (44)%

    Net loss              $(1,472,413)          $(1,034,223)   42%                     (1,627,483)        (4,029,860) (60)%

    Net cash used
     in operating
     activities           $(1,480,086)             (138,051)  972%                     (2,651,931)        (1,697,958)   56%

    Non-GAAP
     Results

    Bookings               $3,114,169            $5,335,772  (42)%                      6,085,683         11,213,482  (46)%

    Overall
     liquidity (at
     period end)           $2,992,944             7,200,158  (58)%                      2,992,944          7,200,158  (58)%

Management Commentary

“During 2012, we made a strategic decision to focus on investing in new hires and talent to support the long-term growth of the redesigned AYI.com, which is built around connecting via users’ friends and interests. As we went through the transitional period, we purposely limited advertising and marketing expense,” said SNAP’s President and Chief Executive Officer Clifford Lerner. “Overall advertising and marketing expense for the second quarter of 2013 remained substantially lower compared to the comparable period in 2012, resulting in declines in revenues, bookings and subscribers. Although a correlation exists between revenue and advertising and marketing expense, our revenue for the second quarter of 2013 declined only 40% while our advertising and marketing expense declined 69% versus the comparable period in 2012. We’re excited to see our long-term vision begin to take hold since we’ve launched the new social-based features. This is most evidenced by the 5% sequential growth in bookings for the second quarter of 2013 as compared to the first quarter of 2013, despite a 16% reduction in advertising and marketing expense when comparing such periods.”

“The AYI product’s new feature-set, which leverages a user’s social and interest graph to better connect people, has been a key driver of improving AYI.com’s core metrics and user conversion rates. In additional to the increased conversion of new users to paying subscribers, we’re also seeing increased messaging between users when users have friends and interests in common. Perhaps the most exciting data point since the re-launch, is that women in particular are embracing the social-based features. Women are more than twice as likely to contact a man when there is a friend in common, and 36% more likely to contact a man when she shares a common interest.”

“We have also taken other steps to improve our internal analytics and user engagement and conversion,” Lerner continued, “We completed several new initiatives during the first quarter, including a deeper integration of Splunk to enable more real-time and granular analytics around user engagement and conversion rates. In addition, we made a number of organizational changes that enabled us to focus on improving specific user engagement metrics and prepared us for future growth, For example, we now have a team dedicated to optimizing existing features and testing new ideas. The impact of these changes was only partially realized during the second quarter of 2013, but we expect to experience the full positive impact during the remainder of 2013.

Mr. Lerner concluded, “As we move forward we will continue to focus on increasing conversion, tightly controlling fixed costs and growing the brand around the success of our social-based dating features. With the core feature set around friends and interests fully integrated into the experience, the data is showing that AYI.com is specifically filling a need for single women, as on-site engagement from women is higher when there are friends and interests in common with another user. As a result, we are as excited as ever about our future as we move into the second half of 2013.”

The Company has also released an updated investor presentation, which can be found at http://investors.snap-interactive.com/presentations

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. With 51% of singles reporting ‘bad’ experiences when meeting people online, 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 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. Android® is a registered trademark of Google Inc. AYI.com® is a registered trademark of Snap Interactive, Inc.

PR Contact:

Kayla Inserra

Kayla@specopscomm.com

919-601-2247

IR Contact:

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 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; the effect of the move of the Company’s data center on operational flexibility, cost savings, development and production; the actual cost savings as a result of the move of the Company’s data center; the performance of the Company’s application after the move of the Company’s data center; the amount or effect of future recruiting expenses; 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

                                                           June 30,                  December 31,

                                                                 2013                        2012
                                                                 ----                        ----

    ASSETS                                                (Unaudited)

    Current assets:

    Cash and cash equivalents                                            $2,617,733               $5,357,596

    Restricted cash                                                         375,211                  105,000

    Credit card holdback receivable                                         256,924                  287,293

    Accounts receivable, net of
     allowances and reserves of $41,929
     and $36,129,                                                           333,182                  320,019

    respectively

    Prepaid expense and other current
     assets                                                                 170,136                  204,824
                                                                            -------                  -------

    Total current assets                                                  3,753,186                6,274,732
                                                                          ---------                ---------

    Fixed assets and intangible assets,
     net                                                                    598,536                  548,549

    Notes receivable                                                        168,098                  165,716

    Investment                                                               50,000                        -
                                                                             ------                      ---

    Total assets                                                         $4,569,820               $6,988,997
                                                                         ==========               ==========

    LIABILITIES AND STOCKHOLDERS'
     EQUITY

    Current liabilities:

    Accounts payable                                                       $989,893                 $799,183

    Accrued expenses and other current
     liabilities                                                            394,479                  240,049

    Deferred revenue                                                      2,031,702                2,524,229
                                                                          ---------                ---------

    Total current liabilities                                             3,416,074                3,563,461
                                                                          ---------                ---------

    Deferred rent                                                            30,214                   48,340

    Warrant liability                                                       445,075                1,616,325
                                                                            -------                ---------

    Total liabilities                                                     3,891,363                5,228,126
                                                                          ---------                ---------

    Commitments

    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,
     49,737,826 and                                                          38,933                   38,833

    44,007,826 shares issued,
     respectively, and 38,932,826 and
     38,832,826 shares

    outstanding, respectively

    Additional paid-in capital                                            9,982,391                9,437,422

    Accumulated deficit                                                  (9,342,867)              (7,715,384)
                                                                         ----------               ----------

    Total stockholders' equity                                              678,457                1,760,871
                                                                            -------                ---------

    Total liabilities and stockholders'
     equity                                                              $4,569,820               $6,988,997
                                                                         ==========               ==========


                                                               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                 (Unaudited)

                                            Three Months Ended                                           Six Months Ended

                                                 June 30,                                                    June 30,
                                                 --------                                                    --------

                                        2013                               2012                                 2013             2012
                                        ----                               ----                                 ----             ----

    Revenues:

    Subscription revenue                        $3,150,319                                     $5,110,907                  $6,578,210  $10,696,945

    Advertising revenue                              1,670                                        101,730                      43,339      261,143
                                                     -----                                        -------                      ------      -------

    Total revenues                               3,151,989                                      5,212,637                   6,621,549   10,958,088

    Costs and expenses:

    Programming, hosting and technology          1,339,930                                        995,765                   2,701,321    1,897,885

    Compensation                                 1,078,536                                      1,063,503                   1,899,606    1,969,852

    Professional fees                              206,703                                        183,909                     473,807      332,226

    Advertising and marketing                      952,248                                      3,023,656                   2,083,929    7,543,897

    General and administrative                   1,118,700                                      1,090,334                   2,264,725    2,074,553
                                                 ---------                                      ---------                   ---------

    Total costs and expenses                     4,696,117                                      6,357,167                   9,423,388   13,818,413
                                                 ---------                                      ---------                   ---------   ----------

    Loss from operations                        (1,544,128)                                    (1,144,530)                 (2,801,839)  (2,860,325)

    Interest income, net                             1,440                                         10,067                       3,106       18,600

    Mark-to-market adjustment on
     warrant liability                              70,275                                        117,125                   1,171,250   (1,171,250)

    Other expense                                        -                                         16,885                           -       16,885
                                                       ---                                         ------                         ---       ------

    Net loss before income taxes                (1,472,413)                                    (1,034,223)                 (1,627,483)  (4,029,860)

    Provision for income taxes                           -                                              -                           -            -
                                                       ---                                            ---                         ---          ---

    Net loss                                   $(1,472,413)                                   $(1,034,223)                $(1,627,483) $(4,029,860)
                                               ===========                                    ===========                 ===========  ===========

    Net loss per common share:

    Basic and diluted                               $(0.04)                                        $(0.03)                     $(0.04)      $(0.10)
                                                    ======                                         ======                      ======       ======

    Weighted average number of common
     shares used in calculating net
     income (loss) per common share:

    Basic and diluted                           38,932,826                                     38,580,261                  38,920,671   38,580,261
                                                ==========                                     ==========                  ==========   ==========


                                                       SNAP INTERACTIVE, INC.
                                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                             (Unaudited)

                                  Six Months Ended

                                      June 30,
                                      --------

                                              2013                                         2012
                                              ----                                         ----

    Cash flows from operating
     activities:

    Net loss                                                           $(1,627,483)             $(4,029,860)

    Adjustments to reconcile net
     loss to net cash used in
     operating activities:

    Depreciation and amortization                                           85,563                   72,476

    Amortization of investment
     premium                                                                     -                    5,348

    Stock-based compensation
     expense                                                               445,069                  609,793

    Mark-to-market adjustment
     on warrant liability                                               (1,171,250)               1,171,250

    Loss on disposal of fixed
     assets                                                                      -                   16,885

    Changes in operating assets
     and liabilities:

    Restricted cash                                                       (270,211)                (105,000)

    Credit card holdback
     receivable                                                             30,369                  (31,954)

    Accounts receivable, net                                               (13,163)                 (69,992)

    Prepaid expense and other
     current assets                                                         34,688                  (96,833)

    Security deposit                                                             -                   19,520

    Accounts payable and accrued
     expenses and other current
     liabilities                                                           341,601                  235,007

    Deferred rent                                                          (14,587)                 (11,135)

    Deferred revenue                                                      (492,527)                 516,537
                                                                          --------                  -------

    Net cash used in operating
     activities                                                         (2,651,931)              (1,697,958)
                                                                        ----------               ----------

    Cash flows from investing
     activities:

    Purchase of fixed assets                                               (35,550)                 (88,241)

    Investment in DCL Ventures,
     Inc.                                                                  (50,000)                       -

    Redemption (purchase) of
     short-term investments                                                      -                4,975,000

    Repayment (issuance) of notes
     receivable and accrued
     interest                                                               (2,382)                   7,672
                                                                            ------                    -----

    Net cash (used in) provided
     by investing activities                                               (87,932)               4,894,431
                                                                           -------                ---------

    Cash flows from financing
     activities:

    Net cash provided by
     financing activities                                                        -                        -
                                                                               ---                      ---

    Net (decrease) increase in
     cash and cash equivalents                                          (2,739,863)               3,196,473

    Cash and cash equivalents at
     beginning of year                                                   5,357,596                2,397,828
                                                                         =========                =========

    Cash and cash equivalents at
     end of period                                                      $2,617,733               $5,594,301
                                                                        ==========               ==========

    Supplemental disclosure of
     noncash activity:

    AYI.com domain 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             Six Months Ended

                               June 30,                      June 30,
                               --------                      --------

                                        2013              2012                                            2013       2012
                                        ----              ----                                            ----       ----

    Reconciliation of
     Subscription Revenue
     to Bookings

    Subscription revenue                     $3,150,319                                      $5,110,907        $6,578,210  $10,696,945

    Change in deferred
     revenue                                    (36,150)                                        224,865          (492,527)     516,537
                                                -------                                         -------          --------      -------

    Bookings                                 $3,114,169                                      $5,335,772        $6,085,683  $11,213,482
                                             ==========                                      ==========        ==========  ===========


                               Three Months Ended

                                   March 31,
                                   ---------

                                             2013             2012
                                             ----             ----

    Subscription revenue                          $3,427,891       $5,586,038

    Change in deferred revenue                      (456,376)        (291,672)
                                                    --------         --------

    Bookings                                      $2,971,515       $5,877,710
                                                  ==========       ==========


                    June 30,                     June 30,

                         2013                        2012
                         ----                        ----

     Reconciliation
     of Cash and
     Cash
     Equivalents
     to Overall
     Liquidity
     (at period
     end)

    Cash and cash
     equivalents              $2,617,733                  $5,594,301

    Restricted
     cash                                375,211                     105,000

    Overall
     liquidity                $2,992,944                  $7,200,158
                              ==========                  ==========

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 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, net cash used in operating activities and our financial results presented in accordance with GAAP.

SOURCE Snap Interactive, Inc.


Source: PR Newswire