Single Touch Reports Fiscal 2012 Results with Revenues Increasing 39% to $6,300,000

Single Touch Reports Fiscal 2012 Results with Revenues Increasing 39% to $6,300,000

JERSEY CITY, N.J.--(BUSINESS WIRE)-- Single Touch Systems, Inc. (OTC BB: SITO), a technology based mobile media solutions provider, today reported financial results for its 2012 fiscal year ended September 30, 2012.

Fiscal 2012 Highlights Include:

  • Revenues up nearly 40%, or $1.8 million over 2011, to $6.3 million

  • Gross margins improve to 54% from 44% in 2011

  • Adjusted EBITDA improves by nearly 25%

  • Over 500,000,000 mobile messages sent on behalf of retail clients by December 20, 2012

  • Formed Single Touch Interactive R&D IP to consolidate IP assets and related activities


"I am pleased to report that we achieved substantial year-over-year organic revenue growth in fiscal 2012 and expect this trend to continue in 2013," said Mr. James Orsini, Chief Executive Officer of Single Touch. "Having recently surpassed a record 500 million mobile messages sent, we have fortified our position as a leader in the industry for sending opt-in mobile messaging for retailers. As mobile messaging evolves into a major distribution channel for marketing and advertising content, we are positioned for continued growth."

"Our move to form Single Touch Interactive R&D IP, a wholly owned subsidiary, in fiscal 2012 marks a key milestone in our strategy to unlock the value of our IP assets for the benefit our Company and our shareholders," added Mr. Anthony Macaluso, Chairman and Chief Innovation Officer of Single Touch. "A majority of our intellectual property rights will be transferred to Single Touch R&D IP, Inc., which will be responsible and bear the expense for all research, development, patent filings and patent maintenance as well as continuing to identify, notify and, where circumstances warrant, enforce against companies we believe are infringing on the intellectual property protected by our growing patent portfolio."

Fiscal Year Ended September 30, 2012 Financial Results Highlights

During the fiscal year ended September 30, 2012, revenue increased 39%, or $1,767,057, to $6,346,919 compared to revenue of $4,579,862 for fiscal 2011. The growth, all of which was organic, was attributable to continuing mobile adoption and new programs for existing and new client relationships.

Royalties and application costs which represent the direct out-of-pocket costs associated with our operating revenues totaled $2,907,110 in 2012, compared to $2,543,885 in 2011, an increase of 14%. Because a portion of royalties and application costs are fixed and all such costs are being monitored and reduced wherever possible, net margin continues to increase. The resulting gross margin improved from 44% in fiscal 2011 to 54% in fiscal 2012.

Adjusted compensation expense grew from $1,834,375 to $2,679,008 during fiscal 2012. This increase reflects the addition of headcount necessary to support business expansion, while concurrently relying less on outside consultants.

Adjusted EBITDA improved by 24% to ($1,573,382) in fiscal 2012, as compared to ($2,080,846) in fiscal 2011. The Company's net loss for the fiscal year ended September 30, 2012 narrowed by 59% to ($3,255,186), from a net loss of ($7,985,163) incurred during the fiscal year ended September 30, 2011.

-Financial Tables to Follow-

When considering the information contained in this press release, refer to the complete financial statements and the accompanying notes contained in our recent Annual Report on Form 10-K filed with the Securities and Exchange Commission at www.sec.gov.

About Single Touch Systems, Inc.

Single Touch Systems, Inc. is a technology based mobile solutions provider serving businesses, advertisers and brands. Through patented technologies and a modular, adaptable platform, Single Touch's multi-channel messaging gateway enables marketers to reach consumers on all types of connected devices, with information that engages interest, drives transactions and strengthens relationships and loyalty.

For more information about Single Touch Systems, Inc. visit: www.singletouch.net

Safe Harbor Statement

This news release may contain forward-looking statements that involve risks and uncertainties and reflect Single Touch's judgment as of the date of this release. These statements may include those regarding strategy, growth and future operations. Actual events or results may differ from Single Touch's expectations. The risks and uncertainties include reliance on brand owners and wireless carriers, the possible need for additional capital, as well as other risks identified in Single Touch's filings with the SEC. Single Touch disclaims any intent or obligation to update these forward-looking statements beyond the date of this press release, except as may be required by law.

SINGLE TOUCH SYSTEMS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended

September 30,

2012

2011

Revenue

Wireless applications

$

6,346,919

$

4,579,862

Operating Expenses

Royalties and application costs

2,907,110

2,543,885

Research and development

84,658

78,860

Compensation expense (including stock based

compensation of $365,422 in 2012 and $3,634,268 in 2011)

3,044,430

5,468,643

Depreciation and amortization

690,293

633,535

General and administrative (including stock based

compensation of $137,169 in 2012 and $958,162 in 2011)

2,386,694

3,161,751

9,113,185

11,886,674

Loss from operations

(2,766,266

)

(7,306,812

)

Other Income (Expenses)

Net (loss) on settlement of indebtedness

-

(651,315

)

Interest expense

(488,120

)

(26,236

)

Net (loss) before income taxes

(3,254,386

)

(7,984,363

)

Provision for income taxes

(800

)

(800

)

Net income (loss)

$

(3,255,186

)

$

(7,985,163

)

Basic and diluted loss per share

$

(0.02

)

$

(0.06

)

Weighted average shares outstanding

131,192,693

127,817,223

SINGLE TOUCH SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

2012

2011

Assets

Current assets

Cash and cash equivalents

$

2,157,707

$

523,801

Accounts receivable - trade

1,085,840

907,275

Prepaid expenses

129,290

93,872

Total current assets

3,372,837

1,524,948

Property and equipment, net

228,499

303,214

Other assets

Capitalized software development costs, net

383,227

395,188

Intangible assets:

Patents

602,056

714,623

Patent applications cost

667,858

544,240

Software license

76,000

-

Deposit - related party

155,000

155,000

Other assets including security deposits

84,278

99,481

Total other assets

1,968,419

1,908,532

Total assets

$

5,569,755

$

3,736,694

SINGLE TOUCH SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - continued

September 30,

2012

2011

Liabilities and Stockholders' Equity (Deficit)

Current liabilities

Accounts payable

$

768,263

$

1,178,057

Accrued expenses

200,591

176,232

Accrued compensation - related party

72,730

36,410

Current obligation on patent acquisitions

87,500

163,680

Convertible debentures - unrelated parties, including accrued interest of

$21,342 net of discounts of $27,101

294,241

-

Total current liabilities

1,423,325

1,554,379

Long-term liabilities

Deferred revenue

25,000

-

Convertible debentures - related party, including accrued interest of

$43,973 net of discounts of $16,461

527,512

-

Convertible debentures - unrelated parties, including accrued interest of

$100,479 net of discounts and loan fees of $927,199

2,685,280

-

Total long-term liabilities

3,237,792

-

Total liabilities

4,661,117

1,554,379

Stockholders' Equity

Preferred stock, $.0001 par value, 5,000,000 shares authorized;

none outstanding

-

-

Common stock, $.001 par value; 200,000,000 shares authorized,

132,472,392 shares issued and outstanding as of September 30, 2012

and 130,182,392 issued and outstanding as of September 30, 2011

132,472

130,182

Additional paid-in capital

125,425,617

123,446,398

Accumulated deficit

(124,649,451)

(121,394,265)

Total stockholders' equity

908,638

2,182,315

Total liabilities and stockholders' equity

$

5,569,755

$

3,736,694

RECONCILIATION OF NON-GAAP MEASURES

For the Year Ended September 30,

2012

2011

GAAP

Adjusted EBITDA

Adjust-

Adjusted

Adjust-

Adjusted

Change

Change

GAAP

ments

EBITDA

GAAP

ments

EBITDA

$

%

$

%

Revenue

Wireless Applications

$

6,346,919

$

-

$

6,346,919

$

4,579,862

$

-

$

4,579,862

$

1,767,057

39

%

$

1,767,057

39

%

Operating Expenses

Royalties and Application Costs

$

2,907,110

$

-

$

2,907,110

$

2,543,885

$

-

$

2,543,885

$

363,225

14

%

$

363,225

14

%

Research and Development

$

84,658

$

-

$

84,658

$

78,860

$

-

$

78,860

$

5,798

7

%

$

5,798

7

%

Compensation expense (including

stock-based compensation)

$

3,044,430

$

(365,422

)

$

2,679,008

$

5,468,643

$

(3,634,268

)

$

1,834,375

*

$

(2,424,213

)

-44

%

$

844,633

46

%

Depreciation and amortization

$

690,293

$

(690,293

)