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8-K - CURRENT REPORT - SharpSpring, Inc.smtp_8k.htm



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EXHIBIT 99.1


SMTP, INC. REPORTS FOURTH QUARTER AND YEAR-END 2014 FINANCIAL RESULTS


NASHUA, N.H., March 4, 2015 – SMTP, Inc. (NASDAQ: SMTP) (the “Company”), a global provider of cloud-based e-mail services and marketing automation solutions, today reported its financial results for the fourth quarter and year ended December 31, 2014.


Fourth Quarter and Year-End 2014 Financial Highlights


·

Revenues for the fourth quarter 2014 were $2.9 million, a 91% increase, compared to $1.5 million for the fourth quarter 2013. Revenues for the year ended December 31, 2014 increased to a record $7.5 million, up 30% from $5.8 million in 2013;


·

Gross profit for the fourth quarter 2014 was $2.2 million, a 68% increase, compared to $1.3 million for the fourth quarter of 2013. Gross Profit for the year 2014 was $5.8 million, up 23% from $4.7 million in 2013;


·

Net loss for the fourth quarter 2014 was $1.1 million, compared to net income of $0.3 million for the same period last year. The Company posted a net loss of $0.8 million for the year ended December 31, 2014, compared to net income of $1.3 million in 2013;


·

The net loss in the fourth quarter of 2014 included acquisition-related charges of $0.8 million, amortization of intangible assets of $0.3 million and stock compensation of $0.2 million, compared to stock compensation of $0.1 million in the fourth quarter of 2013.


Recent Operational Highlights


·

Added approximately $700,000 in new annual recurring revenue to the SharpSpring platform during Q4, showing strong growth for a product that has been in the market less than a year;


·

Accumulated more than 250 marketing agency partners using and distributing the SharpSpring product by November, within ten months of the product launch in early 2014;


·

Completed the acquisition of GraphicMail on October 17, 2014, adding an international distribution network, a full service email campaign management solution product offering and strong international sales leadership to SMTP;


·

SMTPs email delivery capabilities were successfully integrated into the GraphicMail and SharpSpring technology platforms, allowing it to target customers sending larger volumes of emails.


“During 2014, we successfully executed a number of strategic initiatives that have changed the complexion of SMTP and added long-term value to the Company. Specifically, the addition of GraphicMail and SharpSpring has proven to be highly complementary to our already capable email delivery platform,” said Jonathan Strimling, CEO of SMTP.  “Out of the gate, these acquisitions have had a positive impact on SMTP.  In addition to greatly expanding our product offering, providing us with global distribution and strengthening our team, the unique combination of these companies has accelerated our growth and enabled SMTP to compete successfully head-to-head against Hubspot and Marketo.”








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Liquidity


As of December 31, 2014, the Company had cash of $2.8 million, up 65% from $1.7 million at the end of 2013.


Investor Conference Call


SMTP management will host its fourth quarter and full year 2014 earnings conference call tomorrow, March 5th, at 8:30 a.m. ET.  Investors interested in participating on the live call can dial (877) 407-8133 within the U.S. or (201) 689-8040 from abroad. Investors can also access the call online through a listen-only webcast on SMTP’s website at http://investors.smtp.com/.


The webcast will be archived on the SMTP investor relations website at http://investors.smtp.com/ for 90 days and a telephonic playback of the conference call will be available by calling (877) 660-6853 within the U.S. and (201) 612-7415 from abroad. The telephonic playback will be available beginning at 10:00 a.m. ET on, March 5, 2015, and continuing through 11:59 p.m. ET on Thursday, March 19, 2015. The replay passcode is 13602284.


About SMTP, Inc.


SMTP (NASDAQ: SMTP) is a leading provider of cloud-based email services offering solutions ranging from sophisticated marketing automation systems to cost-effective SMTP relay services. All of our services are built on our robust platform for email delivery, capable of scaling individual senders to hundreds of millions of emails per month. While we have industry-leading technology, we differentiate our offerings with our dedicated service and multi-lingual support. SMTP, Inc. is headquartered in Nashua NH, and can be found on the web at http://www.smtp.com.


To download SMTP’s investor relations app please visit Apple’s App Store for the iPhone and iPad or Google Play for Android mobile devices.


Safe Harbor Statement


The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words “may,” “will,” “should,” “plans,” “explores,” “expects,” “anticipates,” “continues,” “estimates,” “projects,” “intends,” and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us in Item 1.A “Risk Factors” in our most recent Form 10-K, other risks to which our Company is subject, and various other factors beyond the Company’s control.









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Non-GAAP Financial Measures


Adjusted EBITDA is a "non-GAAP financial measure" presented as a supplemental measure of the Company’s performance. It is not presented in accordance with accounting principles generally accepted in the United States, or GAAP. The Company believes this measure provides additional meaningful information in evaluating its performance over time. However, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.  A reconciliation of net income (loss) to Adjusted EBITDA is included for your reference in the financial section of this earnings press release.


Investor Contacts:

Jeffrey Goldberger / Chris Harrison
KCSA Strategic Communications
212-896-1249 / 212-896-1206

smtp@kcsa.com


Note:  Financial Schedules Attached

















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SMTP, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

Revenue

 

$

2,897,429

 

 

$

1,520,382

 

 

$

7,499,497

 

 

$

5,753,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Cost of services

 

 

696,581

 

 

 

210,179

 

 

 

1,715,613

 

 

 

1,049,325

 

Gross profit

 

 

2,200,848

 

 

 

1,310,203

 

 

 

5,783,884

 

 

 

4,704,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

1,056,481

 

 

 

140,605

 

 

 

1,832,966

 

 

 

817,971

 

Research and development

 

 

441,495

 

 

 

48,385

 

 

 

803,427

 

 

 

234,581

 

General and administrative

 

 

1,115,996

 

 

 

607,746

 

 

 

3,136,613

 

 

 

1,710,934

 

Change in earn out liability

 

 

682,000

 

 

 

 

 

 

682,000

 

 

 

 

Intangible asset amortization

 

 

259,404

 

 

 

 

 

 

285,071

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

3,555,376

 

 

 

796,736

 

 

 

6,740,077

 

 

 

2,763,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

(1,354,528

)

 

 

513,467

 

 

 

(956,193

)

 

 

1,941,118

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(6,627

)

 

 

 

 

 

(16,278

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

(1,361,155

)

 

 

513,467

 

 

 

(972,471

)

 

 

1,941,118

 

Provision (benefit) for income tax

 

 

(243,230

)

 

 

171,097

 

 

 

(131,258

)

 

 

668,155

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,117,925

)

 

$

342,370

 

 

$

(841,213

)

 

$

1,272,963

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.21

)

 

$

0.11

 

 

$

(0.17

)

 

$

0.42

 

Diluted

 

$

(0.21

)

 

$

0.11

 

 

$

(0.17

)

 

$

0.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

5,370,813

 

 

 

3,097,017

 

 

 

4,913,903

 

 

 

3,004,541

 

Diluted

 

 

5,370,813

 

 

 

3,168,748

 

 

 

4,913,903

 

 

 

3,069,274

 









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SMTP, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,825,520

 

 

$

1,731,243

 

Accounts receivable

 

 

393,922

 

 

 

25,024

 

Deferred income taxes

 

 

 

 

 

183,435

 

Income taxes receivable

 

 

628,889

 

 

 

 

Other current assets

 

 

197,745

 

 

 

116,522

 

Total current assets

 

 

4,046,076

 

 

 

2,056,224

 

 

 

 

 

 

 

 

 

  

Property and equipment, net

 

 

281,555

 

 

 

327,342

 

Goodwill

 

 

8,901,106

 

 

 

 

Intangibles, net

 

 

7,895,238

 

 

 

 

Deferred income taxes

 

 

612,941

 

 

 

50,099

 

Deposits

 

 

30,172

 

 

 

29,995

 

Total assets

 

$

21,767,088

 

 

$

2,463,660

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

Accounts payable

 

$

397,263

 

 

$

79,574

 

Accrued expenses and other current liabilities

 

 

355,796

 

 

 

30,139

 

Deferred revenue

 

 

1,006,031

 

 

 

334,328

 

Income taxes payable

 

 

14,622

 

 

 

144,280

 

Deferred income taxes

 

 

61,578

 

 

 

 

Total current liabilities

 

 

1,835,290

 

 

 

588,321

 

 

 

 

 

 

 

 

 

 

Earn out liabilities

 

 

7,679,311

 

 

 

 

Total liabilities

 

 

9,514,601

 

 

 

588,321

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value

 

 

 

 

 

 

Common stock, $0.001 par value

 

 

5,447

 

 

 

3,126

 

Additional paid in capital

 

 

13,248,992

 

 

 

2,241,749

 

Accumulated other comprehensive income (loss)

 

 

(177,767

)

 

 

 

Accumulated deficit

 

 

(824,185

)

 

 

(369,536

)

Total shareholders' equity

 

 

12,252,487

 

 

 

1,875,339

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

21,767,088

 

 

$

2,463,660

 










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SMTP, Inc.

RECONCILIATION TO ADJUSTED EBITDA

(Unaudited, in Thousands)

 

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

Net income (loss)

 

$

(1,118

)

 

$

342

 

 

$

(841

)

 

$

1,273

 

Provision (benefit) for income tax

 

 

(243

)

 

 

171

 

 

 

(131

)

 

 

668

 

Other (income) expense

 

 

7

 

 

 

 

 

 

16

 

 

 

 

Depreciation & amortization

 

 

307

 

 

 

46

 

 

 

424

 

 

 

102

 

Non-cash stock compensation

 

 

197

 

 

 

87

 

 

 

650

 

 

 

577

 

Acquisition related charges

 

 

762

 

 

 

 

 

 

1,172

 

 

 

 

Restructuring charges

 

 

36

 

 

 

 

 

 

36

 

 

 

 

Adjusted EBITDA

 

$

(52

)

 

$

646

 

 

$

1,326

 

 

$

2,620