SearchCore Reports First Quarter 2013 Operating Results Including Strong Tattoo.com Growth Rates
LAKE FOREST, Calif., May 22, 2013 /PRNewswire/ -- SearchCore, Inc. (OTCQX: SRER), a technology-based Internet marketing services company that connects consumers with brands, products and services, today announced its financial results for the first quarter ended March 31, 2013.
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First Quarter 2013 Highlights
- Tattoo.com achieves 50% month-over-month increase in recurring, fee-based subscribers
- Sportify.com app submitted to Apple store and approval received in second quarter 2013
- Sportify now available at the Apple App Store for the iPhone
- ManufacturedHomes.com begins alpha testing; beta testing scheduled to begin in second quarter 2013
- Announced vehicles industry vertical with acquisitions of www.TravelTrailer.com and www.ToyHaulers.com
- Improving user metrics including unique site visits, expanding user engagement across live finder sites
Management Commentary
"We made an outstanding series of achievements during the first quarter to advance our strategy to acquire, build and operate industry-leading lifestyle-based finder sites," said Jim Pakulis, CEO of SearchCore. "We are particularly pleased with the success of our subscription growth for Tattoo. We began boarding recurring fee based clients at the end of February and we're on track to board 120 new fee-based clients for May, bring our total to 250 new recurring fee-based clients since the end of February. Our development team is also making excellent progress on ManufacturedHomes.com for our Manufactured Housing vertical and Karate.com for our recreational Sports Vertical, and we anticipate that both of these sites will be live by the end of the third quarter of 2013. We are excited about the progress we are making across each of our verticals, and our team continues to research additional industry sectors and domain name acquisitions in order to further our branding expansion with premier finder sites."
Brad Nelms, Chief Strategy Officer of SearchCore, stated, "Through our investment in internet 'real estate' that meets our carefully defined investment criteria, we have already amassed a diverse portfolio of industry verticals including Recreational Sports, Tattoo, Manufactured Housing, Modular Housing and Recreational Vehicles, and all of the corresponding websites are currently live or in development. We continue to expect steady growth in our subscription-based monthly fees and incremental fees for add-on and ancillary services."
A brand new corporate video that explains SearchCore's business strategy and accomplishments to date within its portfolio of industry verticals is available here.
First Quarter 2013 Financial Results
SearchCore's revenues for the first quarter ended March 31, 2013 totaled $27,000, as compared with $3.6 million for the first quarter ended March 31, 2012. First quarter 2013 revenues reflect the first three months of SearchCore operations since the company sold its most successful finder site, www.weedmaps.com, in December 2012. The sale was in line with the company's stated strategy to leverage its proven technology platform and expertise to expand into new internet-supported verticals.
Total operating expenses were $665,000 for the first quarter of 2013, as compared with $2.9 million for the first quarter of 2012. The decrease in operating expenses reflects the company's previously announced move to a smaller headquarters facility and reduction in workforce in order to more closely align its expense structure with its near term revenue model.
EBITDA loss was $595,000 for the first quarter of 2013, as compared to EBITDA of $964,000 for the first quarter of 2012. Operating loss for the first quarter of 2013 was $638,000, as compared to operating income of $749,000 for the first quarter of 2012.
Loss from continuing operations was $632,000 for the first quarter of 2013, as compared to income from continuing operations of $3.5 million for the first quarter of 2012. Income from continuing operations for the first quarter of 2012 included a pre-tax, non-cash gain of $3.0 million on the change in fair value of earn-out liability.
Net loss for the first quarter ended March 31, 2013 was $639,000, or $0.01 per share, as compared to net income of $3.4 million, or $0.04 per share, for the first quarter ended March 31, 2012, which included the above-referenced non-cash gain of $3.0 million.
Balance Sheet Overview
At March 31, 2013, SearchCore had cash and cash equivalents of $299,000 and had total debt of $733,000, as compared with cash and cash equivalents of $514,000 and total debt of $615,000 as of December 31, 2012. At March 31, 2013, the Company had approximately 38.0 million 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 Lake Forest, 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 Balance Sheets |
|||||
| March 31, |
December 31, |
||||
| 2013 |
2012 |
||||
| (Unaudited) |
(Audited) |
||||
| ASSETS |
|||||
| CURRENT ASSETS |
|||||
| Cash and cash equivalents |
$ |
298,716 |
$ |
514,382 |
|
| Other current assets |
1,330,312 |
1,542,800 |
|||
| Current assets - discontinued operations |
179,999 |
180,099 |
|||
| TOTAL CURRENT ASSETS |
$ |
1,809,027 |
$ |
2,237,281 |
|
| Property and equipment, net |
14,495 |
5,118 |
|||
| Intangible assets: |
|||||
| Domain names |
1,030,903 |
805,643 |
|||
| Trademarks |
1,000 |
1,000 |
|||
| Web software, net |
393,711 |
429,503 |
|||
| Goodwill |
59,060 |
59,060 |
|||
| Other assets |
1,364,578 |
1,658,072 |
|||
| TOTAL ASSETS |
$ |
4,672,774 |
$ |
5,195,677 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
| CURRENT LIABILITIES |
|||||
| Accounts payable |
$ |
87,003 |
$ |
120,852 |
|
| Accrued liabilities |
2,219,193 |
2,218,746 |
|||
| Notes payable |
368,269 |
453,750 |
|||
| Notes payable - related party |
85,639 |
161,250 |
|||
| Current liabilities - discontinued operations |
145,103 |
139,826 |
|||
| TOTAL CURRENT LIABILITIES |
$ |
2,905,207 |
$ |
3,094,424 |
|
| LONG TERM LIABILITIES |
|||||
| Other accrued liabilities |
682,857 |
682,857 |
|||
| Notes payable |
202,981 |
— |
|||
| Notes payable - related party |
75,611 |
— |
|||
| TOTAL LONG TERM LIABILITIES |
961,449 |
682,857 |
|||
| TOTAL LIABILITIES |
$ |
3,866,656 |
$ |
3,777,281 |
|
| STOCKHOLDERS' EQUITY |
|||||
| Preferred stock, $0.001 par value: 20,000,000 shares authorized; |
|||||
| zero shares issued and outstanding at March 31, 2012; |
|||||
| zero shares issued and outstanding at December 31, 2012; |
— |
— |
|||
| Common stock, $0.001 par value: 200,000,000 shares authorized; |
|||||
| 38,027,967 shares issued and outstanding at March 31, 2013, |
|||||
| 80,549,563 shares issued and outstanding at December 31, 2012, |
38,028 |
37,968 |
|||
| Treasury stock; |
|||||
| Zero shares issued and outstanding at March 31, 2013, |
|||||
| 42,581,596 shares issued and outstanding at December 31, 2012, |
— |
— |
|||
| Paid-in capital |
(10,984,478) |
(11,011,418) |
|||
| Retained earnings |
11,752,568 |
12,391,846 |
|||
| TOTAL STOCKHOLDERS' EQUITY |
806,118 |
1,418,396 |
|||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
4,672,774 |
$ |
5,195,677 |
|
| SEARCHCORE, INC. |
||||||
| Condensed Consolidated Statements of Operations (Unaudited) |
||||||
| Three Months Ended |
||||||
| March 31, |
March 31, |
|||||
| 2013 |
2012 |
|||||
| REVENUE |
||||||
| Sales |
$ |
26,891 |
$ |
3,613,339 |
||
| Total revenue |
26,891 |
3,613,339 |
||||
| OPERATING EXPENSES |
||||||
| Cost of sales |
228 |
184,955 |
||||
| Selling, general and administrative expenses |
664,518 |
2,679,630 |
||||
| Total operating expenses |
664,746 |
2,864,585 |
||||
| Operating Income (loss) |
(637,855) |
748,754 |
||||
| Other Income (Expense) |
||||||
| Gain on change in fair value of earn-out liabilities |
— |
2,964,115 |
||||
| Interest income |
6,506 |
— |
||||
| Interest expense |
(152) |
(13,245) |
||||
| Total other income |
6,354 |
2,950,870 |
||||
| INCOME (LOSS) FROM CONTINUING |
(631,501) |
3,699,624 |
||||
| Provision for Income Taxes |
— |
217,000 |
||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(631,501) |
3,482,624 |
||||
| Loss from discontinued operations, net of zero and $39,000 tax benefit for the three months ended March 31, 2013 and 2012, respectively. |
(7,777) |
(58,859) |
||||
| NET INCOME (LOSS) |
$ |
(639,278) |
$ |
3,423,765 |
||
| Income (loss) per share, Basic and Diluted |
||||||
| Income (loss) from continuing operations |
$ |
(0.01) |
$ |
0.04 |
||
| Income (loss) from discontinued operations |
0.00 |
(0.00) |
||||
| Total income (loss) per share |
$ |
(0.01) |
$ |
0.04 |
||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
54,529,477 |
83,331,465 |
||||
| SEARCHCORE, INC. |
|||||
| Condensed Consolidated Statements of Cash Flows |
|||||
| Three Months Ended |
|||||
| March 31, |
March 31, |
||||
| 2013 |
2012 |
||||
| Cash flows from operating activities: |
|||||
| Net (loss) income |
$ |
(639,278) |
$ |
3,423,765 |
|
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|||||
| Depreciation |
1,184 |
98,467 |
|||
| Amortization |
35,792 |
44,418 |
|||
| Gain on change in fair value of earn-out liabilities |
— |
(2,878,073) |
|||
| Changes in operating assets and liabilities: |
|||||
| Accounts receivable |
— |
(11,161) |
|||
| Inventories |
— |
9,830 |
|||
| Prepaid expenses and deposits |
212,588 |
(138,131) |
|||
| Other assets |
293,494 |
51,976 |
|||
| Accounts payable and accrued liabilities |
(1,125) |
124,127 |
|||
| Net cash (used in) provided by operating activities |
(97,345) |
725,218 |
|||
| Cash flows used in investing activities: |
|||||
| Purchases of property and equipment |
(10,561) |
(106,131) |
|||
| Purchases of intangible assets |
(85,260) |
(196,943) |
|||
| Net cash used in investing activities |
(95,821) |
(303,074) |
|||
| Cash flows from financing activities: |
|||||
| Payments on note payable |
(22,500) |
(176,893) |
|||
| Payments on note payable - related party |
— |
(325,000) |
|||
| Net cash used in financing activities |
(22,500) |
(501,893) |
|||
| Net decrease in cash and cash equivalents |
(215,666) |
(79,749) |
|||
| Cash and cash equivalents at beginning of period |
514,382 |
1,512,590 |
|||
| Cash and cash equivalents at end of period |
$ |
298,716 |
$ |
1,432,841 |
|
| Non-cash investing and financing activity: |
|||||
| Shares issued pursuant to stock based compensation |
$ |
27,000 |
$ |
— |
|
| Shares issued pursuant to MMJMenu acquisition |
$ |
— |
$ |
262,000 |
|
SOURCE SearchCore, Inc.
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