NASHUA, N.H., Aug. 3, 2015 (GLOBE NEWSWIRE) -- 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 company's 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 company's 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 company's 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.

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
CONTACT: Investor Relations Contact:                  Edward Lawton         Chief Financial Officer         617-500-0122         ir@smtp.com

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