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8-K - CURRENT REPORT - SharpSpring, Inc.smtp_8k.htm
EX-99.2 - PRESS RELEASE - SharpSpring, Inc.smtp_ex99z2.htm






EXHIBIT 99.1

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SMTP, INC. REPORTS SECOND QUARTER 2015 FINANCIAL RESULTS


NASHUA, N.H., August 3, 2015 – SMTP, Inc. (NASDAQ: SMTP), a global provider of cloud-based email marketing technologies, today reported its financial results for the second quarter ended June 30, 2015.


Second Quarter Financial Highlights


·

Revenues for the second quarter 2015 were $3.6 million, a 143% increase, compared to $1.5 million for the second quarter 2014;

·

Revenues for our SharpSpring product were $1.0 million during the second quarter 2015;

·

Gross profit for the second quarter 2015 was $2.7 million, or 74% of revenue, compared to $1.1 million, or 76% of revenue, for the second quarter of 2014;

·

Net loss for the second quarter 2015 was $1.9 million, compared to net income of $0.2 million for the same period last year;

·

The net loss in the second quarter of 2015 included acquisition-related charges of $1.7 million, amortization of intangible assets of $0.4 million and stock compensation of $0.2 million, compared to stock compensation of $0.1 million in the second quarter of 2014;

·

Adjusted EBITDA was $36,000 during the second quarter of 2015; and

·

Core net loss was $20,000, or $0.00 core loss per share for the second quarter of 2015.  Core results exclude acquisition-related costs, stock compensation expenses and restructuring expenses, adjusted for taxes, as detailed in the reconciliation below.


Recent Operational Highlights


·

Added $1.3 million in new annual recurring revenue to the SharpSpring platform during Q2;

·

Improved the companys fast growing SharpSpring marketing automation platform by adding SharpSpring Social Assistant (a competitive feature with HubSpot Signals), a mobile CRM application, and multi-lingual capabilities, rolling out the product in eight additional languages during Q2 (giving SharpSpring broader local language capabilities than HubSpot, Act-On or Marketo);

·

Executed a $5 million financing with the companys two largest institutional shareholders, key executives, and the former owners of SharpSpring, allowing the company to reduce its cash-based earn out liability by $5 million and strengthen its balance sheet;

·

Increased international sales of the versatile SharpSpring marketing automation platform through the companys network of direct international sales and foreign resellers; and

·

Announced we are on track to exceed the target of having $5 million of revenue under contract for SharpSpring by the end of 2015, which would be five times the level of revenue under contract at the time SharpSpring was acquired in August 2014.


“We are excited about the progress we are making this year.  With the latest language, social and mobile capabilities recently announced for SharpSpring, we feel our marketing automation offering is more compelling than ever,” said Jonathan Strimling, CEO of SMTP.  “With our track record of rapidly launching new product features and our unique agency partnership features, it is no wonder why more and more companies and competitors are taking notice of SharpSpring.”










Investor Conference Call


SMTP management will host its second quarter 2015 earnings conference call today, August 3, 2015, at 9 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 12:00 p.m. ET on, August 3, 2015, and continuing through 11:59 p.m. ET on August 17, 2015. The replay passcode is 13615727.


Non-GAAP Financial Measures

Adjusted EBITDA, Core net loss and core net loss per share are "non-GAAP financial measures" presented as supplemental measures of the Company’s performance. These metrics are not presented in accordance with accounting principles generally accepted in the United States, or GAAP. The Company believes these measures provide additional meaningful information in evaluating its performance over time. However, the measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.  A reconciliation of net income (loss) to these measures is included for your reference in the financial section of this earnings press release.


About SMTP, Inc.

SMTP, Inc. (NASDAQ: SMTP) is a global provider of cloud-based marketing solutions ranging from sophisticated marketing automation (via subsidiary SharpSpring) to comprehensive email and mobile marketing (via subsidiary GraphicMail) and scalable, cost-effective email deliverability services. The company’s product family is hallmarked by its flexible architecture, ease-of-use and cost-effectiveness. SMTP augments its technology with high-quality, multilingual customer service and support. SMTP, Inc. is headquartered in Nashua NH, and can be found on the web at www.smtp.com. SharpSpring, based in Gainesville, FL, can be found on the web at www.SharpSpring.com. GraphicMail, based in Geneva, Switzerland, can be found on the web at www.GraphicMail.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 and other risks to which our Company is subject, and various other factors beyond the Company’s control.


Investor Relations Contact:

Edward Lawton

Chief Financial Officer

617-500-0122

ir@smtp.com


Note:  Financial Schedules Attached










 

SMTP, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Revenue

 

$

3,591,554

 

 

$

1,480,770

 

 

$

6,877,056

 

 

$

2,970,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

924,283

 

 

 

351,153

 

 

 

1,715,249

 

 

 

678,383

 

Gross profit

 

 

2,667,271

 

 

 

1,129,617

 

 

 

5,161,807

 

 

 

2,292,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

1,314,839

 

 

 

228,013

 

 

 

2,687,200

 

 

 

396,313

 

Research and development

 

 

537,151

 

 

 

101,387

 

 

 

1,008,365

 

 

 

220,008

 

General and administrative

 

 

1,072,267

 

 

 

563,786

 

 

 

2,156,292

 

 

 

1,047,601

 

Change in earn out liability

 

 

1,667,332

 

 

 

-

 

 

 

2,371,332

 

 

 

-

 

Intangible asset amortization

 

 

382,679

 

 

 

-

 

 

 

761,574

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

4,974,268

 

 

 

893,186

 

 

 

8,984,763

 

 

 

1,663,922

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

(2,306,997

)

 

 

236,431

 

 

 

(3,822,956

)

 

 

628,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(15,623

)

 

 

144

 

 

 

(65,646

)

 

 

153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

(2,322,620

)

 

 

236,575

 

 

 

(3,888,602

)

 

 

628,672

 

Provision (benefit) for income tax

 

 

(455,969

)

 

 

85,367

 

 

 

(851,914

)

 

 

254,132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,866,651

)

 

$

151,208

 

 

$

(3,036,688

)

 

$

374,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.32

)

 

$

0.03

 

 

$

(0.54

)

 

$

0.08

 

Diluted

 

$

(0.32

)

 

$

0.03

 

 

$

(0.54

)

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

5,871,445

 

 

 

5,016,461

 

 

 

5,664,090

 

 

 

4,630,059

 

Diluted

 

 

5,871,445

 

 

 

5,063,993

 

 

 

5,664,090

 

 

 

4,688,726

 

 

 

 

 










SMTP, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Assets

  

                       

  

  

                       

  

Cash and cash equivalents

 

$

1,817,552

 

 

$

2,825,520

 

Accounts receivable

 

 

520,685

 

 

 

393,922

 

Deferred income taxes

 

 

240,622

 

 

 

240,648

 

Income taxes receivable

 

 

1,234,100

 

 

 

328,807

 

Other current assets

 

 

318,298

 

 

 

197,719

 

Total current assets

 

 

4,131,257

 

 

 

3,986,616

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

508,917

 

 

 

281,555

 

Goodwill

 

 

8,913,786

 

 

 

8,901,106

 

Intangibles, net

 

 

7,232,112

 

 

 

7,895,238

 

Deferred income taxes

 

 

612,941

 

 

 

612,941

 

Deposits

 

 

13,434

 

 

 

30,172

 

Total assets

 

$

21,412,447

 

 

$

21,707,628

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

Accounts payable

 

$

305,527

 

 

$

397,262

 

Accrued expenses and other current liabilities

 

 

272,376

 

 

 

355,796

 

Deferred revenue

 

 

921,522

 

 

 

1,006,031

 

Earn out liabilities

 

 

5,051,036

 

 

 

-

 

Income taxes payable

 

 

13,897

 

 

 

14,622

 

Deferred income taxes

 

 

6,084

 

 

 

2,119

 

Total current liabilities

 

 

6,570,442

 

 

 

1,775,830

 

 

 

 

 

 

 

 

 

 

Earn out liabilities

 

 

-

 

 

 

7,679,311

 

Total liabilities

 

 

6,570,442

 

 

 

9,455,141

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value

 

 

-

 

 

 

-

 

Common stock, $0.001 par value

 

 

6,400

 

 

 

5,447

 

Additional paid in capital

 

 

18,741,506

 

 

 

13,248,992

 

Accumulated other comprehensive income (loss)

 

 

(45,028

)

 

 

(177,767

)

Accumulated deficit

 

 

(3,860,873

)

 

 

(824,185

)

Total shareholders' equity

 

 

14,842,005

 

 

 

12,252,487

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

21,412,447

 

 

$

21,707,628

 

 

 

 

 

 

 









SMTP, Inc.

RECONCILIATION TO ADJUSTED EBITDA

(Unaudited, in Thousands)


 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Net income (loss)

 

$

(1,867

)

 

$

151

 

 

$

(3,037

)

 

$

375

 

Provision (benefit) for income tax

 

 

(456

)

 

 

85

 

 

 

(852

)

 

 

254

 

Other (income) expense

 

 

16

 

 

 

-

 

 

 

66

 

 

 

-

 

Depreciation & amortization

 

 

428

 

 

 

30

 

 

 

854

 

 

 

60

 

Non-cash stock compensation

 

 

233

 

 

 

131

 

 

 

435

 

 

 

287

 

Acquisition related charges

 

 

1,667

 

 

 

43

 

 

 

2,419

 

 

 

43

 

Restructuring charges

 

 

15

 

 

 

-

 

 

 

45

 

 

 

-

 

Adjusted EBITDA

 

$

36

 

 

$

440

 

 

$

(70

)

 

$

1,019

 

 

 

SMTP, Inc.

RECONCILIATION TO CORE NET INCOME (LOSS) AND CORE EARNINGS (LOSS) PER SHARE

(Unaudited, in Thousands)


 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Net income (loss)

 

$

(1,867

)

 

$

151

 

 

$

(3,037

)

 

$

375

 

Amortization of intangible assets

 

 

383

 

 

 

-

 

 

 

762

 

 

 

-

 

Non-cash stock compensation

 

 

233

 

 

 

131

 

 

 

435

 

 

 

287

 

Acquisition related charges

 

 

1,667

 

 

 

43

 

 

 

2,419

 

 

 

43

 

Restructuring charges

 

 

15

 

 

 

-

 

 

 

45

 

 

 

-

 

Tax impact of above items

 

 

(451

)

 

 

(63

)

 

 

(796

)

 

 

(130

)

Core net income (loss)

 

$

(20

)

 

$

262

 

 

$

(172

)

 

$

575

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core net income (loss) per share

 

$

-

 

 

$

0.05

 

 

$

(0.03

)

 

$

0.12

 

Weighted average common shares outstanding

 

 

5,871

 

 

 

5,064

 

 

 

5,664

 

 

 

4,683