NASHUA, N.H., May 11, 2015 (GLOBE NEWSWIRE) -- SMTP, Inc. (Nasdaq:SMTP), a global provider of cloud-based email marketing technologies, today reported its financial results for the first quarter ended March 31, 2015.

First Quarter Financial Highlights
  • Revenues for the first quarter 2015 were $3.3 million, a 120% increase, compared to $1.5 million for the first quarter 2014;
  • Gross profit for the first quarter 2015 was $2.5 million, or 76% of revenue, compared to $1.2 million, or 78% of revenue, for the first quarter of 2014;
  • Net loss for the first quarter 2015 was $1.2 million, compared to net income of $0.2 million for the same period last year;
  • The net loss in the first quarter of 2015 included acquisition-related charges of $0.8 million, amortization of intangible assets of $0.4 million and stock compensation of $0.2 million, compared to stock compensation of $0.2 million in the first quarter of 2014;
  • Adjusted EBITDA was a loss of $0.1 million, in part due to one-time costs associated with kicking off international sales of SharpSpring and higher commissions on new SharpSpring sales during the period; and
  • Core net loss was $0.2 million, or core loss per share of $0.03 for the first 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 over $1 million in new annual recurring revenue to the SharpSpring platform during Q1, showing 45% growth from last quarter and 120% growth in bookings compared to Q3;
  • Announced we are on track to achieve or 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;
  • Successfully integrated SMTP's email delivery capabilities into the GraphicMail and SharpSpring sending platforms, allowing customers to benefit from improved deliverability of emails; and
  • Announced SharpSpring had achieved a major milestone in January 2015 by surpassing 1,000 companies using its advanced marketing automation platform.

"We had a strong start to the year and saw our acquisition strategy gain real traction in the market on a domestic and international scale. During the first quarter, we had tremendous success selling our SharpSpring solution to both marketing agencies and end customers, with over $1 million of new annual recurring revenues added this quarter alone," said Jonathan Strimling, CEO of SMTP. "We are now reaching larger, higher-value customers and our international sales channel is just beginning to ramp up. We also expect revenues per customer to grow over time for both new and existing customers. Although Q1 is a seasonally weaker quarter for the GraphicMail product and our relay businesses, and we experienced some currency headwinds in Q1 related to our international operations, we are pleased with the results of the quarter and look forward to capitalizing on the significant growth opportunities in front of us."

Investor Conference Call

SMTP management will host its first quarter 2015 earnings conference call today, May 11, 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://www.investorcalendar.com/IC/CEPage.asp?ID=173995.

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, May 11, 2015, and continuing through 11:59 p.m. ET on Thursday, May 25, 2015. The replay passcode is 13608990.

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 industry-leading 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.
     
SMTP, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
     
  Three Months Ended
  March 31,
  2015 2014
Revenue  $ 3,285,502  $ 1,490,054
     
Cost of services  790,966  327,230
Gross profit  2,494,536  1,162,824
     
Operating expenses:    
Sales and marketing  1,372,361  168,300
Research and development  471,214  118,622
General and administrative  1,084,016  483,815
Change in earn out liability  704,000  -- 
Intangible asset amortization  378,895  -- 
     
Total operating expenses  4,010,486  770,737
     
Operating income (loss)  (1,515,950)  392,087
     
Total other income (expense)  (50,024)  -- 
     
Income (loss) before income taxes  (1,565,974)  392,087
Provision (benefit) for income tax  (395,946)  168,765
     
Net income (loss)  $ (1,170,028)  $ 223,322
     
Net income (loss) per share    
Basic  $ (0.21)  $ 0.05
Diluted  $ (0.21)  $ 0.05
     
Weighted average common shares outstanding    
Basic  5,456,735  4,239,363
Diluted  5,456,735  4,302,443
     
     
SMTP, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
     
  March 31, December 31,
  2015 2014
Assets    
Cash and cash equivalents  $ 2,156,500  $ 2,825,520
Accounts receivable  487,356  393,922
Deferred income taxes  240,650  240,648
Income taxes receivable  774,370  328,807
Other current assets  233,042  197,719
Total current assets  3,891,918  3,986,616
     
Property and equipment, net  332,506  281,555
Goodwill  8,893,611  8,901,106
Intangibles, net  7,445,572  7,895,238
Deferred income taxes  612,941  612,941
Deposits  28,512  30,172
Total assets  $ 21,205,060  $ 21,707,628
     
Liabilities and Shareholders' Equity    
Accounts payable  $ 355,781  $ 397,262
Accrued expenses and other current liabilities  227,593  355,796
Deferred revenue  993,652  1,006,031
Income taxes payable  13,904  14,622
Deferred income taxes  5,749  2,119
Total current liabilities  1,596,679  1,775,830
     
Earn out liabilities  8,384,096  7,679,311
Total liabilities  9,980,775  9,455,141
     
Shareholders' equity:    
Preferred stock, $0.001 par value  --   -- 
Common stock, $0.001 par value  5,462  5,447
Additional paid in capital  13,454,283  13,248,992
Accumulated other comprehensive income (loss)  (241,238)  (177,767)
Accumulated deficit  (1,994,222)  (824,185)
Total shareholders' equity  11,224,285  12,252,487
     
Total liabilities and shareholders' equity  $ 21,205,060  $ 21,707,628
       
SMTP, Inc.
RECONCILIATION TO ADJUSTED EBITDA
(Unaudited, in Thousands)
       
  Three Months Ended March 31,  
  2015 2014  
Net income (loss)  $ (1,170)  $ 223  
Provision (benefit) for income tax  (396)  169  
Other (income) expense  50  --  
Depreciation & amortization  425  30  
Non-cash stock compensation  202  156  
Acquisition related charges  752  --  
Restructuring charges  31  --  
Adjusted EBITDA  $ (106)  $ 578  
       
       
       
       
SMTP, Inc.
RECONCILIATION TO CORE NET INCOME (LOSS)
AND CORE EARNINGS (LOSS) PER SHARE
(Unaudited, in Thousands)
       
  Three Months Ended March 31,  
  2015 2014  
Net income (loss)  $ (1,170)  $ 223  
Amortization of intangible assets  379  --  
Non-cash stock compensation  202  156  
Acquisition related charges  752  --  
Restructuring charges  31  --  
Tax impact of above items  (345)  (67)  
Core net income (loss)  $ (151)  $ 312  
       
Core net income (loss) per share  $ (0.03)  $ 0.07  
Weighted average common shares outstanding  5,457  4,302  
CONTACT: Investor Relations Contact:                  Edward Lawton         Chief Financial Officer         617-500-0122         ir@smtp.com

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