SearchCore Announces Third Quarter 2012 Financial Results
Revenues Increase 21% Year-over-Year; EBITDA of $1.3 million
NEWPORT BEACH, Calif., Nov. 19, 2012 /PRNewswire/ -- SearchCore, Inc. (OTCQX: SRER), a technology-based Internet marketing services company that connects consumers with brands, products and services, today announced its consolidated financial results for the third quarter ended September 30, 2012.
(Logo: http://photos.prnewswire.com/prnh/20120106/LA31342LOGO)
Third Quarter 2012 Highlights
- Revenues increased 21% year-over-year for the third quarter.
- EBITDA was $1.3 million as compared to $1.0 million in the third quarter of 2011.
- EBITDA margin was 30% as compared to 27% for the third quarter of 2011.
- Operating income increased 38% year-over-year to $1.2 million for the third quarter.
Management Commentary
"We are pleased with our growth in revenues, EBITDA and operating income for the third quarter and believe these results reflect the value of our technology and the benefits of our online marketing services," said Jim Pakulis, CEO of SearchCore, Inc. "We are continuing to make significant progress in identifying new internet-supported verticals in large, attractive and fragmented market niches where we can apply our proven business model to establish a leading network of successful web properties and finder sites. We look forward to sharing more details on the progress of our diversification efforts in the coming months."
Third Quarter 2012 Financial Results
SearchCore's revenues for the third quarter ended September 30, 2012 totaled $4.3 million, a year-over-year increase of 21% as compared with $3.6 million for the third quarter ended September 30, 2011.The increase in revenues was primarily due to increases in fees charged for the "listing packages" offered to customers, the number of customers and the variety of packages offered.
Total operating expenses were $3.1 million for the third quarter of 2012, or 72% of revenue, as compared with $2.7 million, or 76% of revenue for the third quarter of 2011. The increase in operating expenses was due to higher investments in research and development as well as increased salaries, benefits and professional fees in support of business expansion efforts.
EBITDA for the third quarter ended September 30, 2012 increased to $1.3 million, as compared to EBITDA of $1.0 million for the third quarter of 2011. EBITDA as a percentage of total revenue was 30% for the third quarter ended September 30, 2012, as compared to 27% for the third quarter of 2011. Operating income for the third quarter ended September 30, 2012 increased to $1.2 million, as compared to $0.9 million for the third quarter of 2011.
Income from continuing operations increased to $1.0 million for the third quarter ended September 30, 2012, as compared to $0.6 million for the third quarter of 2011. Income from continuing operations for the third quarter of 2012 included a non-cash gain of $0.2 million on the change in fair value of earn-out liabilities.
Including the non-cash gain, net income increased to $1.0 million, or $0.02 per share, for the third quarter ended September 30, 2012, as compared to net income of $0.4 million, or $0.01 per share for the third quarter of 2011. Weighted average shares outstanding for the third quarter of 2012 and 2011 were 53.6 million and 83.1 million, respectively.
Balance Sheet Overview
At September 30, 2012, SearchCore had cash and cash equivalents of $0.8 million, total debt of $8.6 million and non-cash earn-out liability of $36,000, as compared with cash and cash equivalents of $1.5 million, total debt of $7.1 million and non-cash earn-out liability of $18.6 million at December 31, 2011. As of September 30, 2012, the Company had 37,567,967 shares of common stock issued and outstanding.
About SearchCore, Inc.
SearchCore, Inc. is a technology-based Internet marketing services company that offers customers an integrated suite of services including media, technology, marketing and information. Founded in 2010, SearchCore is headquartered in Newport Beach, California. The Company's common stock trades on the OTC Market's highest tier, OTCQX, under the ticker symbol "SRER." www.SearchCore.com
Safe Harbor Notice
Certain statements contained herein are "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995). SearchCore, Inc. cautions that statements made in this news release constitute forward-looking statements and makes no guarantee of future performance. Forward-looking statements are based on estimates and opinions of management at the time statements are made. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections or implied results. SearchCore, Inc. undertakes no obligation to revise these statements following the date of this news release.
| SEARCHCORE, INC. Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||
| Three Months Ended |
Nine Months Ended |
|||||||||||
| September 30, |
September 30, |
September 30, |
September 30, |
|||||||||
| 2012 |
2011 |
2012 |
2011 |
|||||||||
| REVENUE |
||||||||||||
| Sales |
$ |
4,334,682 |
$ |
3,586,729 |
$ |
12,172,350 |
$ |
8,586,519 |
||||
| Total revenue |
4,334,682 |
3,586,729 |
12,172,350 |
8,586,519 |
||||||||
| OPERATING EXPENSES |
||||||||||||
| Cost of sales |
290,049 |
40,239 |
722,462 |
176,020 |
||||||||
| Selling, general and administrative expenses |
2,839,430 |
2,671,008 |
8,589,514 |
5,848,491 |
||||||||
| Total operating expenses |
3,129,479 |
2,711,247 |
9,311,976 |
6,024,511 |
||||||||
| Operating Income (loss) |
1,205,203 |
875,482 |
2,860,374 |
2,562,008 |
||||||||
| Other Income (Expense) |
||||||||||||
| Gain on change in fair value of earn-out liabilities |
200,859 |
— |
5,954,030 |
— |
||||||||
| Interest income |
587 |
35 |
587 |
214 |
||||||||
| Interest expense |
(11,017) |
— |
(36,786) |
— |
||||||||
| Total other income |
190,429 |
35 |
5,917,831 |
214 |
||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
1,395,632 |
875,517 |
8,778,205 |
2,562,222 |
||||||||
| Provision for Income Taxes |
353,000 |
324,000 |
721,000 |
853,000 |
||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
1,042,632 |
551,517 |
8,057,205 |
1,709,222 |
||||||||
| (Loss) income from discontinued operations, net of $73,000 and zero tax benefit for the nine months ended September 30, 2012 and 2011, respectively, and net of $3,000 and zero tax benefit for the three months ended September 30, 2012 and 2011, respectively. |
(3,505) |
(117,282) |
(108,255) |
(425,491) |
||||||||
| NET INCOME (LOSS) |
$ |
1,039,127 |
$ |
434,235 |
$ |
7,948,950 |
$ |
1,283,731 |
||||
| Income (loss) per share, Basic and Diluted |
||||||||||||
| Income (loss) from continuing operations |
$ |
0.02 |
$ |
0.01 |
$ |
0.11 |
$ |
0.02 |
||||
| Income (loss) from discontinued operations |
0.00 |
(0.00) |
(0.00) |
(0.01) |
||||||||
| Total income (loss) per share |
$ |
0.02 |
$ |
0.01 |
$ |
0.11 |
$ |
0.02 |
||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
53,572,158 |
83,140,256 |
72,236,822 |
83,116,446 |
||||||||
| SEARCHCORE, INC. Condensed Consolidated Balance Sheets |
|||||
| September 30, |
December 31, |
||||
| 2012 |
2011 |
||||
| (Unaudited) |
(Audited) |
||||
| ASSETS |
|||||
| CURRENT ASSETS |
|||||
| Cash and cash equivalents |
$ |
812,232 |
$ |
1,512,590 |
|
| Accounts receivable |
127,671 |
206,091 |
|||
| Inventory |
— |
9,830 |
|||
| Other current assets |
966,667 |
379,860 |
|||
| Current assets - discontinued operations |
151,007 |
51,795 |
|||
| TOTAL CURRENT ASSETS |
$ |
2,057,577 |
$ |
2,160,166 |
|
| Property and equipment, net |
414,679 |
430,041 |
|||
| Intangible assets: |
|||||
| Domain names |
1,008,572 |
114,119 |
|||
| Domain name - Marijuana.com, net |
4,243,754 |
4,250,000 |
|||
| Trademarks |
87,832 |
— |
|||
| Web software, net |
715,615 |
501,343 |
|||
| Goodwill |
486,403 |
486,403 |
|||
| Other assets |
82,332 |
82,332 |
|||
| Other assets - discontinued operations |
— |
51,976 |
|||
| TOTAL ASSETS |
$ |
9,096,764 |
$ |
8,076,380 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|||||
| CURRENT LIABILITIES |
|||||
| Accounts payable |
$ |
87,219 |
$ |
50,632 |
|
| Accrued liabilities |
4,186,961 |
759,312 |
|||
| Notes payable |
733,901 |
708,901 |
|||
| Notes payable - related party |
2,659,091 |
1,130,000 |
|||
| Current liabilities - discontinued operations |
125,000 |
243,017 |
|||
| TOTAL CURRENT LIABILITIES |
$ |
7,792,172 |
$ |
2,891,862 |
|
| LONG TERM LIABILITIES |
|||||
| Other accrued liabilities |
2,067,001 |
155,025 |
|||
| Notes payable |
3,334,756 |
3,416,099 |
|||
| Notes payable - related party |
1,945,834 |
1,800,000 |
|||
| Earn-out provisions |
36,426 |
18,567,223 |
|||
| TOTAL LONG TERM LIABILITIES |
7,384,017 |
23,938,347 |
|||
| TOTAL LIABILITIES |
$ |
15,176,189 |
$ |
26,830,209 |
|
| STOCKHOLDERS' EQUITY (DEFICIT) |
|||||
| Preferred stock, $0.001 par value: 20,000,000 shares authorized; |
|||||
| zero shares issued and outstanding at September 30, 2012; |
|||||
| zero shares issued and outstanding at December 31, 2011; |
— |
— |
|||
| Common stock, $0.001 par value: 200,000,000 shares authorized; |
|||||
| 89,340,256 shares issued and outstanding at September 30, 2012, |
|||||
| 83,140,256 shares issued and outstanding at December 31, 2011; |
89,340 |
83,140 |
|||
| Treasury stock; |
|||||
| 51,772,289 shares issued and outstanding at September 30, 2012, |
|||||
| zero shares issued and outstanding at December 31, 2011; |
(51,772) |
- |
|||
| Paid-in capital |
(11,194,018) |
(15,965,044) |
|||
| Retained earnings (accumulated deficit) |
5,077,025 |
(2,871,925) |
|||
| TOTAL STOCKHOLDERS' EQUITY (DEFICIT) |
(6,079,425) |
(18,753,829) |
|||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
$ |
9,096,764 |
$ |
8,076,380 |
|
| SEARCHCORE, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||
| Nine Months Ended |
|||||
| September 30, |
September 30, |
||||
| 2012 |
2011 |
||||
| Cash flows from operating activities: |
|||||
| Net income |
$ |
7,948,950 |
$ |
1,283,731 |
|
| Adjustments to reconcile net income to net cash used in operating activities: |
|||||
| Depreciation |
87,834 |
50,703 |
|||
| Amortization |
138,306 |
110,755 |
|||
| Stock-based compensation |
125,000 |
— |
|||
| Gain on change in fair value of earn-out liabilities |
(5,954,030) |
||||
| Changes in operating assets and liabilities: |
|||||
| Accounts receivable |
78,420 |
(197,140) |
|||
| Inventories |
9,830 |
— |
|||
| Prepaid expenses and deposits |
(811,019) |
569,176 |
|||
| Other assets |
51,976 |
— |
|||
| Accounts payable and accrued liabilities |
414,882 |
96,781 |
|||
| Net cash provided by operating activities |
2,090,149 |
1,914,006 |
|||
| Cash flows from investing activities: |
|||||
| Purchases of property and equipment |
(72,472) |
(471,949) |
|||
| Purchases of intangible assets |
(616,617) |
(148,518) |
|||
| Net cash used in investing activities |
(689,089) |
(620,467) |
|||
| Cash flows from financing activities: |
|||||
| Payments on note payable |
(506,343) |
— |
|||
| Payments on note payable - related party |
(1,595,075) |
(1,295,000) |
|||
| Net cash used in financing activities |
(2,101,418) |
(1,295,000) |
|||
| Net (decrease) increase in cash and cash equivalents |
(700,358) |
(1,461) |
|||
| Cash and cash equivalents at beginning of period |
1,512,590 |
1,388,574 |
|||
| Cash and cash equivalents at end of period |
$ |
812,232 |
$ |
1,387,113 |
|
| Non-cash investing and financing activity: |
|||||
| Shares issued pursuant to Revyv acquisition |
$ |
— |
$ |
1,000,000 |
|
| Shares issued pursuant to MMJMenu acquisition |
$ |
262,000 |
$ |
— |
|
| Shares issued pursuant to WeedMaps Earn-outs |
$ |
9,120,000 |
$ |
— |
|
SOURCE SearchCore, Inc.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article