Snap Interactive Reports Results For The Quarter Ended March 31, 2014

NEW YORK, May 6, 2014 /PRNewswire/ -- Snap Interactive, Inc. ("SNAP," the "Company," "we," "our" or "us") (OTCQB: STVI), a leading social dating developer, today announced financial and operational results for the quarter ended March 31, 2014.

  • On a sequential basis, total revenues for the first quarter of 2014 increased 10% to $3.3 million from $3.0 million for the fourth quarter of 2013;
  • On a sequential basis, bookings for the first quarter of 2014 increased 18% to $3.4 million from $2.9 million for the fourth quarter of 2013;
  • Total revenues decreased 5% to $3.3 million for the first quarter of 2014 from $3.5 million for the comparable period in 2013;
  • Quarterly bookings increased 14% to $3.4 million for the first quarter of 2014 from $3.0 million for the comparable period in 2013;
  • Net loss was $0.9 million, or $0.02 per basic and diluted common share for the first quarter of 2014 as compared with net loss of $0.2 million, or $0.00 per basic and diluted common share, for the comparable period in 2013;
  • Available sources of liquidity (including cash and cash equivalents and restricted cash) totaled $0.8 million at March 31, 2014, supplemented by additional financing that occurred subsequent to period end; and
  • Active subscriber count increased 16% in the first quarter of 2014 from approximately 77,700 as of December 31, 2013 to approximately 90,000 as of March 31, 2014, and increased further to approximately 94,000 as of May 5, 2014.

Financial Highlights

Current period compared to prior period:


Three Months Ended



GAAP Results  

March 31,

2014


December 31,

2013


Change

Total revenues

$

3,292,353


$

2,998,566


10

%

Advertising and marketing expense

$

1,472,210


$

960,954


53

%

Deferred subscription revenue (at period end)

$

2,087,909


$

1,826,771


14

%

Net loss

$

(933,094)


$

(669,117)


40

%

Net cash used in operating activities

$

(464,520)


$

(423,983)


10

%










Non-GAAP Results 









Bookings

$

3,400,158


$

2,878,500


18

%

Overall liquidity (at period end)

$

818,196


$

1,417,667


(42)

%

 

Current period compared with same period prior year:


Three Months Ended



GAAP Results  

March 31,

2014


March 31,

2013


Change

Total revenues

$

3,292,353


$

3,469,560


(5)

%

Advertising and marketing expense

$

1,472,210


$

1,131,680


30

%

Deferred subscription revenue (at period end)

$

2,087,909


$

2,067,853


1

%

Net loss

$

(933,094)


$

(155,071)


502

%

Net cash used in operating activities

$

(464,520)


$

(1,171,845)


(60)

%










Non-GAAP Results 









Bookings

$

3,400,158


$

2,971,515


14

%

Overall liquidity (at period end)

$

818,196


$

4,469,497


(82)

%

Management Commentary    

Growth

AYI.com showed growth in key areas during the first quarter of 2014, including:

  • Revenues - On a sequential basis, total revenues for the first quarter of 2014 increased 10% from the fourth quarter of 2013, marking the second consecutive quarterly increase in revenues;
  • Active subscribers - Active subscribers increased 16% during the first quarter of 2014, which was the second consecutive fiscal quarterly increase in active subscribers, and the highest subscriber count since March 2013; and
  • New subscription transactions - New subscription transactions increased 44% in the first quarter of 2014 as compared to the first quarter of 2013, and 30% on a sequential basis for the first quarter of 2014 as compared to the fourth quarter of 2013.

SNAP's Chief Executive Officer, Clifford Lerner, commented, "In the first quarter of 2014 we accomplished several goals: reducing expenses, improving user engagement, and continuing to grow our active subscriber base.  Strong growth in subscription transactions will result in revenue recognition in the second quarter of 2014 and the remainder of 2014, as indicated by the 14% growth in bookings in the first quarter of 2014 as compared to the first quarter of 2013 and 18% on a sequential basis as compared to the fourth quarter of 2013." 

Liquidity and Cash Flow

  • In April 2014, we entered into Amendment No. 1 to our Business Development Agreement with Match.com, LLC, which extended the term an additional 90 days, and separately issued an unsecured promissory note, collectively resulting in an increase of $600,000 cash;
  • Expense management – Employee headcount decreased 12% from 42 employees at December 31, 2013 to 37 employees at March 31, 2014, and we continue to manage expenses; and
  • Break-even cash flow – We are targeting break-even cash flow for the third quarter of 2014.

SNAP's Chief Operating Officer, Alex Harrington, added, "With $600,000 of additional cash originating from the financing and Match.com, LLC renewal, events that occurred subsequent to the end of the first quarter of 2014, we believe we presently have sufficient cash on hand to operate the company through the third quarter of 2014, at which time we expect to break-even on cash flow from operations.  However, we plan to explore growth capital fundraising opportunistically."

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. 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 online dating blog at http://www.ayi.com/dating-blog, on Facebook at http://www.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:
Joanna Barber
jbarber@snap-interactive.com
212-967-5120 ext. 111

IR Contact:
IR@snap-interactive.com

Stephen Hart
Hayden IR
hart@haydenir.com
917-658-7878

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 rates;  the effect of the move of the Company's data center on operational flexibility, cost savings, development and production; 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,

2014

2013



(Unaudited)



Assets





Current assets:





      Cash and cash equivalents


$

432,869


$

927,352

      Restricted cash



385,327



490,315

      Credit card holdback receivable



310,313



232,264

      Accounts receivable, net of allowances and reserves

        of $41,402 and $37,850, respectively



321,852



385,370

      Prepaid expense and other current assets



75,774



114,863

Total current assets



1,526,135



2,150,164

Fixed assets and intangible assets, net



482,929



522,462

Notes receivable



171,799



170,566

Investments



125,000



100,000

Total assets


$

2,305,863


$

2,943,192








Liabilities and stockholders' equity (deficit)







Current liabilities:







      Accounts payable



1,219,823



861,730

      Accrued expenses and other current liabilities



360,866



671,142

      Deferred subscription revenue



2,087,909



1,826,771

      Deferred advertising revenue



146,667



300,000

Total current liabilities



3,815,265



3,659,643

Long term deferred rent



-



12,058

Warrant liability



70,275



140,550

Total liabilities



3,885,540



3,812,251

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,

   49,507,826 and 49,987,826 shares issued, respectively, and

   39,157,826 and 39,132,826 shares outstanding, respectively



39,158



39,133

Additional paid-in capital



11,035,656



10,813,205

Accumulated deficit



(12,654,491)



(11,721,397)

Total stockholders' equity (deficit)



(1,579,677)



(869,059)

Total liabilities and stockholders' equity (deficit)


$

2,305,863


$

2,943,192

 

SNAP INTERACTIVE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Three Months Ended

March 31,




2014


2013


Revenues:






Subscription revenue


$

3,139,020


$

3,427,891


Advertising revenue



153,333



41,669


Total revenues



3,292,353



3,469,560


Costs and expenses:








Programming, hosting and technology expense



942,411



1,385,391


Compensation expense



769,403



797,070


Professional fees



250,155



267,104


Advertising and marketing expense



1,472,210



1,131,680


General and administrative expense



863,417



1,146,026


Total costs and expenses



4,297,596



4,727,271


Loss from operations



(1,005,243)



(1,257,711)


Interest income, net



1,874



1,665


Gain on change in fair value of warrants



70,275



1,100,975


Loss before provision for income taxes



(933,094)



(155,071)


Provision for income taxes



-



-


Net loss


$

(933,094)


$

(155,071)










Net loss per common share:








Basic and diluted


$

(0.02)


$

(0.00)


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








Basic and diluted



39,142,548



38,908,382











 

SNAP INTERACTIVE, INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


 (Unaudited)









Three Months Ended

March 31,




2014


2013


Cash flows from operating activities:






Net loss


$

(933,094)


$

(155,071)


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








Depreciation and amortization



43,263



42,033


Stock-based compensation expense



222,476



74,947


Gain on change in fair value of warrants



(70,275)



(1,100,975)


Changes in operating assets and liabilities:








Decrease (increase) in restricted cash



104,988



(200,211)


Decrease (increase) in credit card holdback receivable



(78,049)



43,367


Decrease in accounts receivable



63,518



12,709


Decrease in prepaid expenses and other current assets



39,089



42,210


Increase in accounts payables, accrued expenses and other current

   Liabilities



46,002



532,815


Decrease in deferred rent



(10,243)



(7,293)


Increase (decrease) in deferred subscription revenue



261,138



(456,376)


Decrease in deferred advertising revenue



(153,333)



-


Net cash used in operating activities



(464,520)



(1,171,845)


Cash flows from investing activities:








Purchase of fixed assets



(3,730)



(20,296)


Purchase of non-marketable equity securities



(25,000)



-


Issuance of notes receivable issued to employees and accrued interest



(1,233)



(1,169)


Net cash used in investing activities



(29,963)



(21,465)


Cash flows from financing activities:








Net cash provided by financing activities



-



-


Decrease in cash and cash equivalents



(494,483)



(1,193,310)


Balance of cash and cash equivalents at beginning of period



927,352



5,357,596


Balance of cash and cash equivalents at end of period


$

432,869


$

4,164,286










Supplemental disclosure of cash flow information:








AYI.com domain name 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



March 31,

2014


March 31,

2013


December 31,

2013

Reconciliation of Subscription Revenue to Bookings







Subscription revenue


$

3,139,020


$

3,427,891


$

2,994,496

Change in deferred subscription revenue



261,138



(456,376)



(115,996)

Bookings


$

3,400,158


$

2,971,515


$

2,878,500



















March 31, 2014


March 31, 2013


December 31, 2013


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









Cash and cash equivalents


$

432,869


$

4,164,286


$

927,352


Restricted cash



385,327



305,211



490,315


Overall liquidity


$

818,196


$

4,469,497


$

1,417,667













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;
  • Overall liquidity does not reflect the Company's ability to convert restricted cash into cash and cash equivalents.
  • 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

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.

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SOURCE Snap Interactive, Inc.



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