SearchCore Reports Full Year 2012 Financial Results
Full Year Revenues Increase 38%; EBITDA of $4.5 million
LAKE FOREST, Calif., April 8, 2013 /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 fiscal year ended December 31, 2012.
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Fiscal Year 2012 Highlights
- Total revenues were $16.4 million, an increase of 38% over fiscal year 2011.
- EBITDA was $4.5 million, an increase of 150% over fiscal year 2011.
- Operating income was $4.2 million, an increase of 191% over the previous year.
- Net income of $15.4 million or $0.18 per share included a $7.8 million gain on the sale of WeedMaps Media, Inc. during the fourth quarter and a non-cash gain of $6.0 million on the change in fair value of earn-out liabilities.
Management Commentary
"Fiscal year 2012 was a turning point for SearchCore as we developed and embarked on a diversification strategy to expand into a portfolio of Internet-supported niche verticals," said Jim Pakulis, CEO of SearchCore, Inc. "We monetized our first vertical with the sale of WeedMaps in the fourth quarter of 2012, and as planned we retained key management, sales personnel and the technology that forms the core of our continued operating platform. Over the past couple of months we have successfully executed on our strategy with our entry into the recreational sports, tattoo, manufactured housing, modular housing, and recreational vehicle industries, and our brands include Sportify.com, Tattoo.com, ManufacturedHomes.com, ModularHomes.com, www.TravelTrailer.com and www.ToyHaulers.com. To date we've generated positive improving user metrics and expanding user engagement across our live portals.
"We will report our first revenues based on these new operations in the first quarter of 2013. We anticipate that our recurring, subscription-based revenues will ramp up throughout the year and expect to be on a quarterly break even revenue run rate by the end of the year. Our new focus and path sets us up for exciting developments in 2013 that we expect will create long-term value for shareholders."
Fiscal Year 2012 Financial Results
SearchCore's revenues for the year ended December 31, 2012 totaled $16.4 million, a year-over-year increase of 38% as compared with $11.9 million for the year ended December 31, 2011.
Total operating expenses were $12.2 million, or 74% of revenue, as compared with $10.5 million, or 88% of revenue for the previous year. The decrease in operating expenses as a percentage of revenue was due to increased efficiencies in our operations and management of our finder sites.
EBITDA for 2012 increased 150% to $4.5 million from $1.8 million for 2011. EBITDA as a percentage of total revenue was 27% for the year ended December 31, 2012, as compared to 15% for the previous year.
Operating income for the year ended December 31, 2012 increased to $4.2 million, as compared to $1.5 million for the year ended December 31, 2011.
Income from continuing operations increased to $17.9 million for the year ended December 31, 2012 compared to income from continuing operations of $0.8 million for the prior year. Income from continuing operations for fiscal year 2012 included a one-time gain on the sale of WeedMaps Media, Inc. of $7.8 million and a non-cash gain of $6.0 million on the change in fair value of earn-out liabilities.
Net income was $15.2 million, or $0.18 per diluted share for the year ended December 31, 2012. This compares with a net loss of $3.2 million or $0.04 loss per share for the previous year.
Balance Sheet Overview
At December 31, 2012, SearchCore had cash and cash equivalents of $514,000 and had total debt of $615,000, as compared with cash and cash equivalents of $1.5 million and total debt of $7.1 million as of December 31, 2011. As of December 31, 2012, the Company had 37.9 million shares of common stock issued and outstanding which included 80.5 million of common stock less 42.6 million of treasury stock.
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. The Company's portfolio of industry verticals includes Recreational Sports (Sportify.com), Tattoo (Tattoo.com), Manufactured Housing (ManufacturedHomes.com), Modular Housing (ModularHomes.com), and Recreational Vehicles (www.TravelTrailer.com and www.ToyHaulers.com). 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.
- financial tables to follow –
| SEARCHCORE, INC. Consolidated Balance Sheets (Audited) |
|||||
| December 31, |
December 31, |
||||
| 2012 |
2011 |
||||
| ASSETS |
|||||
| CURRENT ASSETS |
|||||
| Cash and cash equivalents |
$ |
514,382 |
$ |
1,512,590 |
|
| Accounts receivable |
— |
206,091 |
|||
| Inventory |
— |
9,830 |
|||
| Other current assets |
1,542,800 |
379,860 |
|||
| Current assets - discontinued operations |
180,099 |
51,795 |
|||
| TOTAL CURRENT ASSETS |
$ |
2,237,281 |
$ |
2,160,166 |
|
| Property and equipment, net |
5,118 |
430,041 |
|||
| Intangible assets: |
|||||
| Domain names |
805,643 |
114,119 |
|||
| Domain name - Marijuana.com, net |
— |
4,250,000 |
|||
| Trademarks |
1,000 |
— |
|||
| Web software, net |
429,503 |
501,343 |
|||
| Goodwill |
59,060 |
486,403 |
|||
| Other assets |
1,658,072 |
82,332 |
|||
| Other assets - discontinued operations |
— |
51,976 |
|||
| TOTAL ASSETS |
$ |
5,195,677 |
$ |
8,076,380 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|||||
| CURRENT LIABILITIES |
|||||
| Accounts payable |
$ |
120,852 |
$ |
50,632 |
|
| Accrued liabilities |
2,218,746 |
759,312 |
|||
| Notes payable |
453,750 |
708,901 |
|||
| Notes payable - related party |
161,250 |
1,130,000 |
|||
| Current liabilities - discontinued operations |
139,826 |
243,017 |
|||
| TOTAL CURRENT LIABILITIES |
$ |
3,094,424 |
$ |
2,891,862 |
|
| LONG TERM LIABILITIES |
|||||
| Other accrued liabilities |
682,857 |
155,025 |
|||
| Notes payable |
— |
3,416,099 |
|||
| Notes payable - related party |
— |
1,800,000 |
|||
| Earn-out provisions |
— |
18,567,223 |
|||
| TOTAL LONG TERM LIABILITIES |
682,857 |
23,938,347 |
|||
| TOTAL LIABILITIES |
$ |
3,777,281 |
$ |
26,830,209 |
|
| STOCKHOLDERS' EQUITY (DEFICIT) |
|||||
| Preferred stock, $0.001 par value: 20,000,000 shares authorized; zero shares issued and outstanding at December 31, 2012; zero shares issued and outstanding at December 31, 2011; |
|||||
| — |
— |
||||
| Common stock, $0.001 par value: 200,000,000 shares authorized; 80,549,563 shares issued and outstanding at December 31, 2012, 83,140,256 shares issued and outstanding at December 31, 2011; |
|||||
| 37,968 |
83,140 |
||||
| Treasury stock; 42,581,596 shares issued and outstanding at December 31, 2012, zero shares issued and outstanding at December 31, 2011; |
|||||
| — |
— |
||||
| Paid-in capital |
(11,011,418) |
(15,965,044) |
|||
| Retained earnings (accumulated deficit) |
12,391,846 |
(2,871,925) |
|||
| TOTAL STOCKHOLDERS' EQUITY (DEFICIT) |
1,418,396 |
(18,753,829) |
|||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
$ |
5,195,677 |
$ |
8,076,380 |
|
| SEARCHCORE, INC. Consolidated Statements of Operations (Audited) |
||||||
| Years Ended |
||||||
| December 31, |
December 31, |
|||||
| 2012 |
2011 |
|||||
| REVENUE |
||||||
| Sales |
$ |
16,421,688 |
$ |
11,928,932 |
||
| Total revenue |
16,421,688 |
11,928,932 |
||||
| OPERATING EXPENSES |
||||||
| Cost of sales |
1,007,116 |
793,789 |
||||
| Selling, general and administrative expenses |
11,188,799 |
9,684,963 |
||||
| Total operating expenses |
12,195,915 |
10,478,752 |
||||
| Operating Income (loss) |
4,225,773 |
1,450,180 |
||||
| Other Income (Expense) |
||||||
| Gain on sale of WeedMaps Media, Inc. |
7,795,627 |
— |
||||
| Gain on change in fair value of earn-out liabilities |
5,954,030 |
(204,954) |
||||
| Interest income |
1,313 |
213 |
||||
| Interest expense |
(44,947) |
(13,241) |
||||
| Total other income |
13,706,023 |
(217,982) |
||||
| INCOME (LOSS) FROM CONTINUING |
17,931,796 |
1,232,198 |
||||
| Provision for Income Taxes |
2,556,590 |
416,130 |
||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
15,375,206 |
816,068 |
||||
| Loss from discontinued operations, net of $74,300 and $133,500 tax benefit for the years ended December 31, 2012 and 2011, respectively. |
(111,435) |
(4,060,367) |
||||
| NET INCOME (LOSS) |
$ |
15,263,771 |
$ |
(3,244,299) |
||
| Income (loss) per share, Basic and Diluted |
||||||
| Income (loss) from continuing operations |
$ |
0.18 |
$ |
0.01 |
||
| Income (loss) from discontinued operations |
(0.00) |
(0.05) |
||||
| Total income (loss) per share |
$ |
0.18 |
$ |
(0.04) |
||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
84,395,845 |
83,140,256 |
||||
| SEARCHCORE, INC. Consolidated Statements of Cash Flows (Audited) |
|||||
| Years Ended |
|||||
| December 31, |
December 31, |
||||
| 2012 |
2011 |
||||
| Cash flows from operating activities: |
|||||
| Net income (loss) |
$ |
15,263,771 |
$ |
(3,244,299) |
|
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|||||
| Depreciation |
121,175 |
71,295 |
|||
| Amortization |
184,409 |
284,856 |
|||
| Stock-based compensation |
210,000 |
— |
|||
| Gain on sale of WeedMaps |
(7,795,627) |
— |
|||
| Gain on change in fair value of earn-out liabilities |
(5,954,030) |
204,954 |
|||
| Loss on abandonment |
— |
4,142,835 |
|||
| Changes in operating assets and liabilities: |
|||||
| Accounts receivable |
148,591 |
(206,091) |
|||
| Inventories |
9,830 |
(9,830) |
|||
| Prepaid expenses and deposits |
(326,425) |
672,682 |
|||
| Other assets |
126,236 |
54,589 |
|||
| Accounts payable and accrued liabilities |
1,316,474 |
(234,061) |
|||
| Net cash provided by operating activities |
3,304,404 |
1,736,930 |
|||
| Cash flows used in investing activities: |
|||||
| Purchases of property and equipment |
(159,737) |
(454,168) |
|||
| Purchases of intangible assets |
(1,038,632) |
(488,746) |
|||
| Net cash used in investing activities |
(1,198,369) |
(942,914) |
|||
| Cash flows from financing activities: |
|||||
| Payments on note payable |
(758,982) |
— |
|||
| Payments on note payable - related party |
(2,345,261) |
(670,000) |
|||
| Net cash used in financing activities |
(3,104,243) |
(670,000) |
|||
| Net (decrease) increase in cash and cash equivalents |
(998,208) |
124,016 |
|||
| Cash and cash equivalents at beginning of period |
1,512,590 |
1,388,574 |
|||
| Cash and cash equivalents at end of period |
$ |
514,382 |
$ |
1,512,590 |
|
| 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.
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