MeetMe Reports Third Quarter 2013 Financial Results

MeetMe®, Inc. (NYSE MKT: MEET), the public market leader in social discovery, today reported financial results for the third quarter ended September 30, 2013.

Third Quarter 2013 Financial Highlights
  • Revenue for the quarter was $10.1 million, advancing 6% sequentially from the second quarter of this year.
  • Mobile revenue reached another quarterly record of $2.9 million, up 65% year-over-year and 12% sequentially from the second quarter of 2013. Mobile ad impressions served in the third quarter were 6.4 billion, up by approximately 1.5 billion sequentially from 4.9 billion in the second quarter of 2013, with third quarter growth driven largely by expansion of Native Advertising.
  • Net loss in the quarter improved to $1.5 million or $0.04 per share, compared with a net loss of $2.6 million or $0.07 per share in the third quarter of 2012.
  • Adjusted EBITDA was a positive $696,000, increasing sequentially for the second consecutive quarter, and up from $95,000 in the third quarter of 2012. (See the important discussion about the presentation of non-GAAP financial measures, and reconciliation to the most directly comparable GAAP financial measures, below.)
  • Cash and Cash Equivalents totaled $8.7 million at September 30, 2013, up from $8.3 million at June 30, 2013.

Geoff Cook, CEO of MeetMe, said, “Mobile revenue achieved a new quarterly record amidst continued stabilization in web revenue, leading to strong growth in adjusted EBITDA. Our mobile native advertising product grew sequentially from 3% of our mobile revenue in Q2 to 19% in Q3 as a result of continued roll out of these high-performing ad units on iPhone and Android. These units also enabled us to achieve our highest mobile ARPU to date, up 8% sequentially and up 42% compared to a year ago.”

Mr. Cook continued, “Our team is focused on driving engagement and new audiences to the MeetMe application, with a significant update planned for the first quarter of 2014. Meanwhile, in October we launched our first standalone app, Charm, which uses short, looping videos to enhance the experience of meeting new people. We believe these new features and innovative apps will drive increased mobile traffic, which we will monetize through our diverse and ever-expanding mobile monetization infrastructure.”

Operating and Business Highlights
  • Monthly active users (MAUs) increased nearly 37%, averaging 5.34 million in the third quarter of 2013 compared to 3.94 million average MAUs in the third quarter of 2012. Mobile MAUs increased 36% to 2.66 million in the third quarter of 2013 from 1.95 million in the third quarter of 2012.
  • Daily active users (DAUs) increased 3%, averaging 1.14 million in the third quarter of 2013 compared to 1.11 million in the third quarter of 2012. Average mobile DAUs improved 16% to 790,000 in the third quarter of 2013 from 679,000 in the third quarter of 2012.
  • Revenue attributed to mobile products was $2.9 million in the third quarter of 2013, an approximately 65% increase from $1.8 million in the third quarter of 2012. Mobile average revenue per daily active user (ARPDAU) increased 42% from $0.028 to $0.040 during the same period.

David Clark, Chief Financial Officer of MeetMe, added, “Third quarter results build on the improvement in top and bottom line financial performance achieved in the second quarter. Together with the launch of our new apps, we are encouraged by the start of what is traditionally our seasonally strongest quarter. In addition, we increased our cash position to $8.7 million while reducing our indebtedness by $1 million during the quarter.”

Webcast and Conference Call Details

Management will host a webcast to discuss third quarter 2013 financial results today at 8:30 AM Eastern time. A webcast of the conference call will be available live on the Investor Relations section of the company’s website at www.meetmecorp.com and a replay will be available for 30 days. Interested parties unable to access the conference call via the webcast may dial 1-719-325-2463 and reference ID: 5538837.

About MeetMe, Inc.

MeetMe® is the leading social network for meeting new people in the US and the public market leader for social discovery (NYSE MKT: MEET). MeetMe makes meeting new people fun through social games and apps, monetized by both advertising and virtual currency. With 60 percent of traffic coming from mobile, MeetMe is fast becoming the social gathering place for the mobile generation. The company operates  MeetMe.com and MeetMe apps on  iPhoneiPad, and  Android in multiple languages including English, Spanish, Portuguese, French, Italian, German, Chinese (Traditional and Simplified), Russian, Japanese, Dutch, Turkish and Korean.

Cautionary Note Regarding Forward Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including statements regarding new features and innovative apps and whether such features and apps will drive increased mobile traffic and revenue. All statements other than statements of historical facts contained herein, including statements regarding the continued growth in our core platform, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include: the risk that unanticipated events affect the launch of our new products, the effectiveness of our mobile software on smartphones and tablets, and the willingness of users to try new product offerings. Further information on our risk factors is contained in our filings with the SEC, including the Form 10-K for the year ended December 31, 2012 and the Current Reports on Form 8-K filed with the SEC on May 1, 2013 and October 1, 2013. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Regulation G – Non-GAAP Financial Measures

The Company uses financial measures which are not calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) in evaluating its financial and operational decision making and as a means to evaluate period-to period comparison. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company presents these non-GAAP financial measures because it believes them to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We refer you to the reconciliations above.

On November 10, 2011, MeetMe, Inc. and Insider Guides, Inc., owner of social network myYearbook, merged. The combined revenue results for 2011 give effect to the merger as if it had been completed as of January 1, 2011. The combined revenue data is for informational purposes only and does not purport to present what our results would actually have been had the merger actually occurred on the dates presented or to project our results for any future period. The Company believes that evaluation of its financial performance can be enhanced by a presentation of combined results in order to evaluate its prior, current or future period results on a more meaningful, consistent year-over-year basis.

The Company defines Adjusted EBITDA as earnings (or loss) from continuing operations before interest expense, income taxes, depreciation and amortization, and amortization of non-cash stock-based compensation, non-recurring acquisition and restructuring expenses and the goodwill impairment charges. The Company excludes stock-based compensation because it is non-cash in nature.

Non-GAAP financial measures should not be considered as an alternative to net income, operating income, cash flow from operating activities, as a measure of liquidity or any other financial measure. They may not be indicative of the historical operating results of the Company nor is it intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as a substitute for performance measures calculated in accordance with GAAP.
 
MEETME, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,   December 31,
2013 2012
Assets
Current Assets
Cash and cash equivalents $ 8,682,241 $ 5,022,007
Accounts receivable, net of allowance of $457,000 and $547,000, at September 30, 2013 and December 31, 2012, respectively 7,374,957 15,744,789
Notes receivable - 111,569
Prepaid expenses and other current assets   581,471   870,881
Total current assets 16,638,669 21,749,246
 
Goodwill 70,646,036 70,646,036
Intangible assets, net 5,277,524 6,746,273
Property and equipment, net 3,468,585 4,772,632
Other assets   309,196   520,480
Total assets $ 96,340,010 $ 104,434,667
 
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 2,432,890 $ 3,528,607
Accrued expenses and other liabilities 4,428,269 3,211,681
Current liabilities from discontinued operations - 1,434
Deferred revenue 884,374 392,612
Accrued dividends 69,455 69,455
Current portion of long-term debt   3,429,458   2,551,941
Total current liabilities 11,244,446 9,755,730
 
Long term debt, net of discount   3,983,067   9,156,788
Total liabilities   15,227,513   18,912,518
 
Commitments and Contingencies (see Note 9)
 
Stockholders' Equity:
Preferred stock, $.001 par value, authorized 5,000,000 shares: Convertible preferred stock Series A-1, $.001 par value; authorized – 1,000,000 shares; 1,000,000 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively 1,000 1,000
Common stock, $.001 par value; authorized - 100,000,000 shares; 38,477,359 and 37,046,405 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively 38,481 37,050
Additional paid-in capital 281,791,267 275,261,794
Accumulated deficit (200,125,365) (189,211,750)
Accumulated other comprehensive loss   (592,886)   (565,945)
Total stockholders’ equity   81,112,497   85,522,149
Total liabilities and stockholders’ equity $ 96,340,010 $ 104,434,667
 
MEETME, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
       
Three Months Ended September 30, Nine Months Ended September 30,
2013 2012 2013 2012
 
Revenues $ 10,073,309 $ 11,598,432 $ 27,361,901 $ 35,049,022
Operating Costs and Expenses:
Sales and marketing 1,876,240 2,656,955 5,405,910 6,099,594
Product development and content 6,817,591 7,883,987 19,543,611 22,605,195
General and administrative 1,536,939 2,001,950 5,759,498 6,325,796
Depreciation and amortization 1,108,856 1,025,421 3,280,843 2,888,960
Restructuring costs - 353,555 2,540,896 891,499
Loss on debt restructure   -   -   1,174,269   -
Total Operating Costs and Expenses   11,339,626   13,921,868   37,705,027   38,811,044
Loss from Operations   (1,266,317)   (2,323,436)   (10,343,126)   (3,762,022)
Other Income (Expense),net:
Interest income 2,503 3,866 7,856 13,758
Interest expense (222,777) (280,852) (578,345) (867,136)
Other income net   -   8,581   -   9,611
Total other expense   (220,274)   (268,405)   (570,489)   (843,767)
Loss before income taxes (1,486,591) (2,591,841) (10,913,615) (4,605,789)
Income taxes   -   -   -   -
Net loss from continuing operations $ (1,486,591) $ (2,591,841) $ (10,913,615) $ (4,605,789)
Loss from discontinued operations, net of taxes $ - $ - $ - $ (3,680,627)
Net Loss Allocable To Common Shareholders $ (1,486,591) $ (2,591,841) $ (10,913,615) $ (8,286,416)
 
Basic and diluted net loss per common shareholders:
Continuing operations $ (0.04) $ (0.07) $ (0.29) $ (0.13)
Discontinued operations $ - $ - $ - $ (0.10)
Basic and diluted net loss per common shareholders $ (0.04) $ (0.07) $ (0.29) $ (0.23)
Weighted Average Number of Shares Outstanding, Basic and Diluted:   38,207,141   36,436,353   37,903,904   36,306,242
 
Net Loss $ (1,486,591) $ (2,591,841) $ (10,913,615) $ (8,286,416)
Foreign currency translation, net   1,473   (9,493)   (26,941)   (101,918)
Comprehensive Loss $ (1,485,118) $ (2,601,334) $ (10,940,556) $ (8,388,334)
 
MEETME, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Income (Loss) from Continuing Operations to Adjusted EBITDA
       
Three Months Ended September 30, Nine Months Ended September 30,
  2013     2012     2013     2012  
 
Net loss from continuing operations allocable to common shareholders $ (1,486,591 ) $ (2,591,841 ) $ (10,913,615 ) $ (4,605,789 )
 
Interest expense 222,777 280,852 578,345 867,136
Depreciation and amortization 1,108,856 1,025,421 3,280,843 2,888,960
Amortization of stock based compensation 850,642 1,026,570 2,761,566 2,905,156
Acquisition and restructuring costs - 353,555 2,540,896 891,499
Loss on debt restructure   -     -     1,174,269     -  
Adjusted EBITDA $ 695,684   $ 94,557   $ (577,696 ) $ 2,946,962  
 
GAAP Basic and diluted net loss per common shareholders $ (0.04 ) $ (0.07 ) $ (0.29 ) $ (0.13 )
Basic Adjusted EBITDA per common shareholders $ 0.02   $ 0.00   $ (0.02 ) $ 0.08  
Diluted Adjusted EBITDA per common shareholders $ 0.02   $ 0.00   $ (0.02 ) $ 0.07  
 
 
Weighted average number of shares outstanding, Basic   38,207,141     36,436,353     37,903,904     36,306,242  
Weighted average number of shares outstanding, Dilutive   40,144,904     40,414,856     37,903,904     41,806,967  
 
 
 
 
The following table presents a reconciliation of Mobile bookings, a non-GAAP financial measure to Revenue, a GAAP financial measure
 
 
Three Months Ended September 30, Nine Months Ended September 30,
  2013     2012     2013     2012  
 
Revenue from purchased mobile virtual currency products $ 975,295   $ 605,566   $ 2,734,480   $ 1,288,249  
 
Change in deferred revenue   148,528     66,916     463,041     158,621  
 
Mobile Bookings $ 1,123,823   $ 672,482   $ 3,197,521   $ 1,446,870  

Copyright Business Wire 2010

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