Single Touch Reports Third Quarter Fiscal 2014 Financial Results

Achieves Double Digit Revenue Growth Quarter-Over-Quarter and Year-Over-Year

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Aug 12, 2014, 04:05 ET

JERSEY CITY, N.J., Aug. 12, 2014 /PRNewswire/ -- Single Touch Systems, Inc. (OTC BB: SITO), a technology-based mobile media solutions provider, today announced results for its fiscal third quarter ended June 30, 2014.

Financial Highlights:

Revenue: For the third quarter of fiscal 2014, revenue was $2.1 million, representing an 18% increase from the previous quarter and an 11% increase from the third quarter of 2013. Revenue reflects strong growth in both media placement revenue and licensing and royalties revenue.
Gross Margins: For the third quarter of 2014, gross margins improved to 62%, compared to 58% for the same quarter in 2013. The increase is attributable to the media placement business that started in December 2013, having a relatively higher gross margin than the messaging business, and licensing and royalties revenue earned in the quarter for which there are no royalties and application costs. Underlying gross margin from messaging was 58% for the third quarter of 2014, which is unchanged from the third quarter of 2013.
Operating Profits: For the third quarter of 2014, on a pro-forma basis when separating out intellectual property (IP) related initiatives and stock based compensation expense, Single Touch's core, underlying business generated positive operating profits, a trend that has been established during fiscal year ended September 30, 2013.
Cash Flow: Cash flow from operations was positive for Single Touch's core business for the third quarter of 2014, a trend that has been established during fiscal year ended September 30, 2013.
Net Loss: Net loss for the third quarter of 2014 was $752,050, or $0.01 per share, compared to a net loss of $1.3 million, or $0.01 per share in the third quarter of 2013, which represents a 40% decrease that is primarily attributable to an increase in gross margin and a decrease in interest expense.

"We have made tremendous progress meeting our operational and strategic goals this quarter," reported Single Touch's President and CEO, James Orsini. "In line with our plan to diversify revenue, we added six new clients and acquired our technology partner, DoubleVision Networks, which brings the 'Followme' product under Single Touch's ownership and vastly increases our sales force. Additionally, we welcomed a new highly experienced board member and received overwhelming approval for a reverse stock split in order for Single Touch to become eligible to list on a national exchange. We are confident we have positioned Single Touch to continue to capture opportunities for growth and success as the company evolves into a dominant presence in the mobile media space."

Conference call information:

Date: Tuesday, August 12, 2014
Time: 4:30 P.M. Eastern Time (ET)
Dial in Number for U.S. & Canadian Callers: 877-407-8629
Dial in Number for International Callers (Outside of the U.S. & Canada): 201-493-6715

Participating on the call will be Single Touch's Chief Executive Officer James Orsini, Chief Financial Officer Kurt Streams, and Executive Vice President Corporate Development Jerry Hug. The Company plans to issue an earnings release prior to the call. To join the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled conference call time. A live webcast and archive of the call will also be available on Single Touch's website at: http://singletouch.equisolvewebcast.com/q3-2014.

A replay will be available for 2 weeks starting on August 12, 2014 at approximately 8:00 P.M. ET. To access the replay, please dial 877-660-6853 in the U.S. and 201-612-7415 for international callers. The conference ID# is 414392.

About Single Touch Systems, Inc.

Single Touch Systems, Inc. is a technology based mobile solutions provider serving businesses, advertisers and brands. Through patented technologies and a modular, adaptable platform, Single Touch's multi-channel messaging gateway enables marketers to reach consumers on all types of connected devices, with information that engages interest, drives transactions and strengthens relationships and loyalty. For more information about Single Touch Systems, Inc. visit: www.singletouch.net

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, our reliance on brand owners and wireless carriers, the possible need for additional capital as well other risks identified in our filings with the SEC. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

SINGLE TOUCH SYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



				For the Three Months Ended				For the Nine Months Ended
				June 30,				June 30,
				2014		2013		2014		2013

Revenue
	Wireless applications		$	1,940,147	$	1,924,472	$	5,844,468	$	5,680,586
	Licensing and royalties			71,918		-		821,918		-
	Media placement			131,500		-		201,500		-

				2,143,565		1,924,472		6,867,886		5,680,586

Operating Expenses
	Royalties and application costs			817,554		804,937		2,453,343		2,465,270
	Research and development			12,601		13,264		48,326		46,020
	Compensation expense (including stock based compensation)*			695,544		764,559		2,887,094		3,155,100
	Depreciation and amortization			152,087		163,292		453,935		478,227
	General and administrative (including stock based compensation)*			1,033,065		950,468		3,369,460		3,024,908

				2,710,851		2,696,520		9,212,158		9,169,525

		Loss from operations		(567,286)		(772,048)		(2,344,272)		(3,488,939)

Other Income (Expenses)
	Interest expense			(185,274)		(490,987)		(569,097)		(1,078,540)

		Net (loss) before income taxes		(752,560)		(1,263,035)		(2,913,369)		(4,567,479)

		Provision for income taxes		-		-		-		-

		Net income (loss)	$	(752,560)	$	(1,263,035)	$	(2,913,369)	$	(4,567,479)

	Basic and diluted loss per share		$	(0.01)	$	(0.01)	$	(0.02)	$	(0.03)

	Weighted average shares outstanding			142,728,628		134,185,887		142,101,080		133,101,030


		* Details of stock based compensation included within:

		Compensation Expense	$	70,725	$	144,244	$	388,520	$	1,253,964
		General Administrative		269,647		209,517		1,060,242		696,760
		Total	$	340,372	$	353,761	$	1,448,762	$	1,950,724

SINGLE TOUCH SYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

				June 30,		September 30,
				2014		2013

Assets
	Current assets
		Cash and cash equivalents	$	1,976,201	$	1,146,995
		Accounts receivable, net - current portion		1,603,209		1,347,827
		Prepaid consulting		354,158		1,081,553
		Other prepaid expenses		229,581		150,183

		Total current assets		4,163,149		3,726,558

	Property and equipment, net			231,426		238,815

	Other assets
		Accounts receivable, net		450,000		-
		Prepaid consulting		-		81,547
		Capitalized software development costs, net		350,486		343,575
		Intangible assets:
		Patents		367,172		467,837
		Patent applications cost		1,028,096		768,646
		Software license		831,000		831,000
		Other assets including security deposits		116,412		65,228

		Total other assets		3,143,166		2,557,833

		Total assets	$	7,537,741	$	6,523,206

SINGLE TOUCH SYSTEMS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

				June 30,		September 30,
				2014		2013


Liabilities and Stockholders' Equity
	Current liabilities
		Accounts payable	$	1,498,296	$	1,352,203
		Accrued expenses		726,186		209,323
		Accrued compensation - related party		265,719		72,736
		Deferred licensing revenue		303,082		-
		Current obligation under capital lease		16,578		16,331
		Convertible debenture - related party		629,755		585,708
		Convertible debentures - unrelated parties		3,480,949		2,692,570

		Total current liabilities		6,920,565		4,928,871

	Long-term liabilities
		Obligations under capital lease		16,914		29,378
		Convertible debentures - unrelated parties		-		440,593

		Total long-term liabilities		16,914		469,971

		Total liabilities		6,937,479		5,398,842

	Commitments and contingencies - See notes 9, 11 and 16

	Stockholders' Equity
		Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding		-		-
		Common stock, $.001 par value; 300,000,000 shares authorized, 142,728,628 shares issued and outstanding as of June 30, 2014 and $.001 par value; 200,000,000 shares authorized, 137,220,331 shares issued and outstanding as of September 30, 2013		142,729		137,220
		Additional paid-in capital		133,269,919		130,886,161
		Accumulated deficit		(132,812,386)		(129,899,017)

		Total stockholders' equity		600,262		1,124,364

		Total liabilities and stockholders' equity	$	7,537,741	$	6,523,206