NASHUA, N.H., May 11, 2015 (GLOBE NEWSWIRE) -- SMTP, Inc. (Nasdaq:SMTP), a global provider of cloud-based email marketing technologies, today reported its financial results for the first quarter ended March 31, 2015.
First Quarter Financial Highlights
- Revenues for the first quarter 2015 were $3.3 million, a 120% increase, compared to $1.5 million for the first quarter 2014;
- Gross profit for the first quarter 2015 was $2.5 million, or 76% of revenue, compared to $1.2 million, or 78% of revenue, for the first quarter of 2014;
- Net loss for the first quarter 2015 was $1.2 million, compared to net income of $0.2 million for the same period last year;
- The net loss in the first quarter of 2015 included acquisition-related charges of $0.8 million, amortization of intangible assets of $0.4 million and stock compensation of $0.2 million, compared to stock compensation of $0.2 million in the first quarter of 2014;
- Adjusted EBITDA was a loss of $0.1 million, in part due to one-time costs associated with kicking off international sales of SharpSpring and higher commissions on new SharpSpring sales during the period; and
- Core net loss was $0.2 million, or core loss per share of $0.03 for the first quarter of 2015. Core results exclude acquisition-related costs, stock compensation expenses and restructuring expenses, adjusted for taxes, as detailed in the reconciliation below.
Recent Operational Highlights
- Added over $1 million in new annual recurring revenue to the SharpSpring platform during Q1, showing 45% growth from last quarter and 120% growth in bookings compared to Q3;
- Announced we are on track to achieve or exceed the target of having $5 million of revenue under contract for SharpSpring by the end of 2015, which would be five times the level of revenue under contract at the time SharpSpring was acquired in August 2014;
- Successfully integrated SMTP's email delivery capabilities into the GraphicMail and SharpSpring sending platforms, allowing customers to benefit from improved deliverability of emails; and
- Announced SharpSpring had achieved a major milestone in January 2015 by surpassing 1,000 companies using its advanced marketing automation platform.
"We had a strong start to the year and saw our acquisition strategy gain real traction in the market on a domestic and international scale. During the first quarter, we had tremendous success selling our SharpSpring solution to both marketing agencies and end customers, with over $1 million of new annual recurring revenues added this quarter alone," said Jonathan Strimling, CEO of SMTP. "We are now reaching larger, higher-value customers and our international sales channel is just beginning to ramp up. We also expect revenues per customer to grow over time for both new and existing customers. Although Q1 is a seasonally weaker quarter for the GraphicMail product and our relay businesses, and we experienced some currency headwinds in Q1 related to our international operations, we are pleased with the results of the quarter and look forward to capitalizing on the significant growth opportunities in front of us."
Investor Conference Call
SMTP management will host its first quarter 2015 earnings conference call today, May 11, 2015, at 9 a.m. ET. Investors interested in participating on the live call can dial (877) 407-8133 within the U.S. or (201) 689-8040 from abroad. Investors can also access the call online through a listen-only webcast on SMTP's website at http://www.investorcalendar.com/IC/CEPage.asp?ID=173995.
The webcast will be archived on the SMTP investor relations website at http://investors.smtp.com/ for 90 days and a telephonic playback of the conference call will be available by calling (877) 660-6853 within the U.S. and (201) 612-7415 from abroad. The telephonic playback will be available beginning at 12:00 p.m. ET on, May 11, 2015, and continuing through 11:59 p.m. ET on Thursday, May 25, 2015. The replay passcode is 13608990.
Non-GAAP Financial Measures
Adjusted EBITDA, Core net loss and core net loss per share are "non-GAAP financial measures" presented as supplemental measures of the Company's performance. These metrics are not presented in accordance with accounting principles generally accepted in the United States, or GAAP. The Company believes these measures provide additional meaningful information in evaluating its performance over time. However, the measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP. A reconciliation of net income (loss) to these measures is included for your reference in the financial section of this earnings press release.
About SMTP, Inc.
SMTP, Inc. (Nasdaq:SMTP) is a global provider of cloud-based marketing solutions ranging from sophisticated marketing automation (via subsidiary SharpSpring) to comprehensive email and mobile marketing (via subsidiary GraphicMail) and scalable, cost-effective email deliverability services. The company's product family is hallmarked by its flexible architecture, ease-of-use and cost-effectiveness. SMTP augments its industry-leading technology with high-quality, multilingual customer service and support. SMTP, Inc. is headquartered in Nashua NH, and can be found on the web at www.smtp.com. SharpSpring, based in Gainesville, FL, can be found on the web at www.SharpSpring.com. GraphicMail, based in Geneva, Switzerland, can be found on the web at www.GraphicMail.com.
To download SMTP's investor relations app please visit Apple's App Store for the iPhone and iPad or Google Play for Android mobile devices.
Safe Harbor Statement
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continues," "estimates," "projects," "intends," and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us in Item 1.A "Risk Factors" in our most recent Form 10-K and other risks to which our Company is subject, and various other factors beyond the Company's control.
| SMTP, Inc. | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (Unaudited) | ||
| Three Months Ended | ||
| March 31, | ||
| 2015 | 2014 | |
| Revenue | $ 3,285,502 | $ 1,490,054 |
| Cost of services | 790,966 | 327,230 |
| Gross profit | 2,494,536 | 1,162,824 |
| Operating expenses: | ||
| Sales and marketing | 1,372,361 | 168,300 |
| Research and development | 471,214 | 118,622 |
| General and administrative | 1,084,016 | 483,815 |
| Change in earn out liability | 704,000 | -- |
| Intangible asset amortization | 378,895 | -- |
| Total operating expenses | 4,010,486 | 770,737 |
| Operating income (loss) | (1,515,950) | 392,087 |
| Total other income (expense) | (50,024) | -- |
| Income (loss) before income taxes | (1,565,974) | 392,087 |
| Provision (benefit) for income tax | (395,946) | 168,765 |
| Net income (loss) | $ (1,170,028) | $ 223,322 |
| Net income (loss) per share | ||
| Basic | $ (0.21) | $ 0.05 |
| Diluted | $ (0.21) | $ 0.05 |
| Weighted average common shares outstanding | ||
| Basic | 5,456,735 | 4,239,363 |
| Diluted | 5,456,735 | 4,302,443 |
| SMTP, Inc. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (Unaudited) | ||
| March 31, | December 31, | |
| 2015 | 2014 | |
| Assets | ||
| Cash and cash equivalents | $ 2,156,500 | $ 2,825,520 |
| Accounts receivable | 487,356 | 393,922 |
| Deferred income taxes | 240,650 | 240,648 |
| Income taxes receivable | 774,370 | 328,807 |
| Other current assets | 233,042 | 197,719 |
| Total current assets | 3,891,918 | 3,986,616 |
| Property and equipment, net | 332,506 | 281,555 |
| Goodwill | 8,893,611 | 8,901,106 |
| Intangibles, net | 7,445,572 | 7,895,238 |
| Deferred income taxes | 612,941 | 612,941 |
| Deposits | 28,512 | 30,172 |
| Total assets | $ 21,205,060 | $ 21,707,628 |
| Liabilities and Shareholders' Equity | ||
| Accounts payable | $ 355,781 | $ 397,262 |
| Accrued expenses and other current liabilities | 227,593 | 355,796 |
| Deferred revenue | 993,652 | 1,006,031 |
| Income taxes payable | 13,904 | 14,622 |
| Deferred income taxes | 5,749 | 2,119 |
| Total current liabilities | 1,596,679 | 1,775,830 |
| Earn out liabilities | 8,384,096 | 7,679,311 |
| Total liabilities | 9,980,775 | 9,455,141 |
| Shareholders' equity: | ||
| Preferred stock, $0.001 par value | -- | -- |
| Common stock, $0.001 par value | 5,462 | 5,447 |
| Additional paid in capital | 13,454,283 | 13,248,992 |
| Accumulated other comprehensive income (loss) | (241,238) | (177,767) |
| Accumulated deficit | (1,994,222) | (824,185) |
| Total shareholders' equity | 11,224,285 | 12,252,487 |
| Total liabilities and shareholders' equity | $ 21,205,060 | $ 21,707,628 |
| SMTP, Inc. | |||
| RECONCILIATION TO ADJUSTED EBITDA | |||
| (Unaudited, in Thousands) | |||
|
Three Months Ended March 31, |
|||
| 2015 | 2014 | ||
| Net income (loss) | $ (1,170) | $ 223 | |
| Provision (benefit) for income tax | (396) | 169 | |
| Other (income) expense | 50 | -- | |
| Depreciation & amortization | 425 | 30 | |
| Non-cash stock compensation | 202 | 156 | |
| Acquisition related charges | 752 | -- | |
| Restructuring charges | 31 | -- | |
| Adjusted EBITDA | $ (106) | $ 578 | |
| SMTP, Inc. | |||
| RECONCILIATION TO CORE NET INCOME (LOSS) | |||
| AND CORE EARNINGS (LOSS) PER SHARE | |||
| (Unaudited, in Thousands) | |||
|
Three Months Ended March 31, |
|||
| 2015 | 2014 | ||
| Net income (loss) | $ (1,170) | $ 223 | |
| Amortization of intangible assets | 379 | -- | |
| Non-cash stock compensation | 202 | 156 | |
| Acquisition related charges | 752 | -- | |
| Restructuring charges | 31 | -- | |
| Tax impact of above items | (345) | (67) | |
| Core net income (loss) | $ (151) | $ 312 | |
| Core net income (loss) per share | $ (0.03) | $ 0.07 | |
| Weighted average common shares outstanding | 5,457 | 4,302 | |