TORONTO, ON, CANADA – Snipp Interactive Inc. (“Snipp” or the “Company”) (OTCQB: SNIPF; TSX-V: SPN), a global provider of digital marketing promotions, rebates and loyalty solutions, is pleased to announce its financial results for Q3-2017 and the nine months ended September 30, 2017. All results are reported under International Financial Reporting Standards (“IFRS”) and in US dollars. A copy of the complete unaudited interim financial statements and management’s discussion and analysis are available on SEDAR (www.sedar.com).
(Refer to Non-GAAP Measures, Gross Margin, EBITDA and Bookings Backlog discussion below)
“Q3 2017 provides definitive proof that our growth strategy is gaining momentum. We achieved an EBITDA positive quarter by continuing to focus on both our top and bottom lines. We improved our key metrics across the board, with significant gains in our EBITDA performance compared to the same period last year,” said Atul Sabharwal, Snipp’s co-founder and CEO. “It is important to note that these are sustainable improvements that will continue into the future. In the coming quarters, we will be focusing on further reducing our cost structure while increasing revenue – a two-pronged strategy that will remain in place through the first half of 2018. ”
Snipp uses certain performance measures throughout this document that are not recognizable under Canadian generally accepted accounting principles or IFRS (“GAAP”). These performance measures include Gross Margin and EBITDA. Management believes that these measures provide supplemental financial information that is useful in the evaluation of the Company’s operations.
Investors should be cautioned, however, that these measures should not be construed as alternatives to measures determined in accordance with GAAP and IFRS as an indicator of Snipp’s performance. The Company’s method of calculating these measures may differ from that of other organizations, and accordingly, these may not be comparable.
Snipp defines earnings before interest, taxes, depreciation and amortization (“EBITDA”) as revenue minus operating expenses excluding non-cash operating expenses of stock-based compensation, depreciation and amortization (interest and taxes are not included in the Company’s operating expenses).
Snipp defines Gross Margin as revenue less campaign infrastructure. The Company’s calculation of Gross Margin is not a financial measure that is recognized under GAAP. Investors should be cautioned that the Company’s defined Gross Margin should not be construed as an alternative measure to other measures determined in accordance with GAAP.
Snipp defines Bookings Backlog as future revenue from existing customer contracts to be recognized in future quarters in the current fiscal year and the next fiscal year. Bookings get translated into revenues based on IFRS principles and the Bookings Backlog reflects how revenues in future quarters in the current fiscal year and next fiscal year are steadily being booked today.
For More Information
In conjunction with this announcement, Snipp management will host a conference call and live webcast for analysts and investors on Monday, October 30, 2017 at 12:00 p.m. (noon) Eastern Time to discuss the Company’s financial results.
To listen to the live conference call, parties in the United States and Canada should dial 800-239-9838, access code 7827869. International parties should call 323-794-2551 using the same access code 7827869. Please dial in approximately 15 minutes prior to the start of the call.
A live and archived webcast of the conference call will be accessible on the “Investors” section of the Company’s website under “Presentations” at www.snipp.com. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software
The Following are calculations of EBITDA:
| Three Months Ended September 30, 2017 |
Three Months Ended September 30, 2016 |
|
| USD |
USD |
|
| Net loss before interest income, foreign exchange, change in fair value of derivative liability, change in fair value of acquisition consideration payable in equity |
(589,284) |
(1,861,561) |
| Amortization of intangibles |
441,462 |
368,347 |
| Depreciation of equipment |
11,367 |
12,606 |
| Stock-based compensation |
150,858 |
303,303 |
| EBITDA |
14,403 |
(1,177,305) |
The Following are calculations of Gross Margin:
| Three Months Ended September 30, 2017 |
Three Months Ended September 30, 2016 |
Nine Months Ended September 30, 2017 |
Nine Months Ended September 30, 2016 |
|
| USD |
USD |
USD |
USD |
|
|
Revenue |
3,701,586 |
3,306,230 |
9,035,693 |
8,237,953 |
| Less: |
||||
| Campaign infrastructure |
1,146,200 |
1,297,406 |
2,515,682 |
2,637,492 |
|
Gross Margin |
2,555,386 |
2,008,824 |
6,520,011 |
5,600,461 |
| CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||
| Unaudited – Expressed in U.S. Dollars |
||
| As at |
||
| September 30, 2017 |
December 31, 2016 |
|
| ASSETS |
||
| Current |
||
|
Cash |
813,185 |
2,375,619 |
| Accounts receivable, net of allowance for doubtful accounts of |
3,733,211 |
4,242,388 |
| $218,653 (2016 – $70,811) |
||
| Deposits, prepaid expenses and other assets |
676,575 |
286,592 |
| 5,222,971 |
6,904,599 |
|
| Equipment |
74,218 |
105,839 |
| Intangible assets |
5,273,114 |
5,484,587 |
| Goodwill |
3,343,129 |
3,343,129 |
| 13,913,432 |
15,838,154 |
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
| Current |
||
| Accounts payable and accrued liabilities |
2,596,502 |
2,676,646 |
| Deferred revenue |
1,064,479 |
1,961,622 |
| Due to related parties |
48,357 |
76,610 |
| Working Capital Line of Credit |
827,837 |
2,000,000 |
| 4,537,175 |
6,714,878 |
|
| Shareholders’ equity |
||
| Common shares |
26,170,796 |
22,815,647 |
| Warrants |
421,796 |
421,796 |
| Contributed surplus |
4,670,835 |
4,237,448 |
| Deficit |
(20,511,580) |
(16,952,007) |
| Accumulated other comprehensive loss |
(1,375,590) |
(1,399,608) |
| 9,376,257 |
9,123,276 |
|
| 13,913,432 |
15,838,154 |
|
| CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
||
| Unaudited – Expressed in U.S. Dollars |
||
| Three Months Ended September 30, 2017 |
Three Months Ended September 30, 2016 |
|
| REVENUE |
3,701,586 |
3,306,230 |
| EXPENSES |
||
| Salaries and compensation |
2,241,702 |
2,666,587 |
| General and administrative |
261,645 |
351,625 |
| Campaign infrastructure |
1,146,200 |
1,297,406 |
| Professional fees |
6,208 |
47,133 |
| Marketing and investor relations |
15,025 |
47,808 |
| Travel |
16,403 |
72,976 |
| Amortization of intangibles |
441,462 |
368,347 |
| Depreciation of equipment |
11,367 |
12,606 |
| Stock-based compensation (Note 8) |
150,858 |
303,303 |
|
|
4,290,870 |
5,167,791 |
| Net loss before interest income, foreign exchange, change in fair value of derivative liability, change in fair value of acquisition consideration payable in equity |
(589,284) |
(1,861,561) |
|
|
||
| Interest income, foreign exchange, change in fair value of derivative liability, change in fair value of acquisition consideration payable in equity |
||
|
Interest income (expense) |
(15,704) |
1,457 |
| Foreign exchange (loss) gain |
(32,239) |
14,602 |
| Change in fair value of acquisition consideration payable in equity |
– |
30,997 |
|
Net loss for the period |
(637,227) |
(1,814,505) |
|
OTHER COMPREHENSIVE LOSS |
||
| Items that may be reclassified subsequently to loss |
||
| Cumulative translation adjustment |
(47,867) |
(26,092) |
| Comprehensive loss for the period |
(685,094) |
(1,840,597) |
| Basic and diluted loss per common share |
(0.00) |
(0.01) |
| Weighted average number of common shares outstanding – basic and diluted |
177,536,675 |
122,130,654 |
| CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
||
| Unaudited – Expressed in U.S. Dollars |
||
| Nine Months Ended September 30, 2017 |
Nine Months Ended September 30, 2016 |
|
| REVENUE |
9,035,693 |
8,237,953 |
| EXPENSES |
||
| Salaries and compensation |
6,893,986 |
8,969,935 |
| General and administrative |
859,491 |
1,054,691 |
| Campaign infrastructure |
2,515,682 |
2,637,492 |
| Professional fees |
186,692 |
268,255 |
| Marketing and investor relations |
79,676 |
197,924 |
| Travel |
55,140 |
283,204 |
| Bad debt expense |
147,842 |
– |
| Amortization of intangibles |
1,259,911 |
1,538,167 |
| Depreciation of equipment |
35,956 |
36,051 |
| Stock-based compensation (Note 8) |
433,387 |
1,349,312 |
|
|
12,467,763 |
16,335,031 |
| Net loss before interest income, foreign exchange, change in fair value of derivative liability, change in fair value of acquisition consideration payable in equity |
(3,432,070) |
(8,097,078) |
|
|
||
| Interest income, foreign exchange, change in fair value of derivative liability, change in fair value of acquisition consideration payable in equity |
||
|
Interest income (expense) |
(72,354) |
5,926 |
| Foreign exchange (loss) gain |
(55,149) |
(28,952) |
| Change in fair value of derivative liability |
– |
31,834 |
| Change in fair value of acquisition consideration payable in equity |
– |
537,380 |
|
Net loss for the period |
(3,559,573) |
(7,550,890) |
|
OTHER COMPREHENSIVE LOSS |
||
| Items that may be reclassified subsequently to loss |
||
| Cumulative translation adjustment |
24,018 |
(335,882) |
| Comprehensive loss for the period |
(3,535,555) |
(7,886,772) |
| Basic and diluted loss per common share |
(0.02) |
(0.06) |
| Weighted average number of common shares outstanding – basic and diluted |
150,784,635 |
119,673,264 |
| CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS |
||
| Unaudited – Expressed in U.S. Dollars |
||
| Nine Months Ended September 30, 2017 |
Nine Months Ended September 30, 2016 |
|
| CASH FLOWS FROM OPERATING ACTIVITIES |
||
| Net loss for the period |
(3,559,573) |
(7,550,890) |
| Items not involving cash: |
||
| Amortization of intangibles |
1,259,911 |
1,538,167 |
| Depreciation of equipment |
35,956 |
36,051 |
| Stock-based compensation |
433,387 |
1,349,312 |
| Change in fair value of derivative liability |
– |
(31,834) |
| Change in fair value of acquisition consideration payable in equity |
– |
(537,380) |
| Changes in non-cash working capital items: |
||
| Accounts receivable |
509,177 |
(2,019,390) |
| Deposits, prepaid expenses and other assets |
(389,983) |
(86,938) |
| Accounts payable and accrued liabilities |
(80,144) |
410,411 |
| Deferred revenue |
(897,143) |
2,117,971 |
| Due to related parties |
(28,253) |
(484,667) |
| Net cash flows used in operating activities |
(2,716,665) |
(5,259,187) |
|
|
||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||
| Additions to equipment |
(4,335) |
(32,456) |
| Additions to intangible assets |
(1,048,438) |
(1,306,536) |
| Due to Swiss Post |
– |
(861,956) |
| Net cash flows used in investing activities |
(1,052,773) |
(2,200,948) |
| CASH FLOWS FROM FINANCING ACTIVITIES |
||
| Proceeds from common shares issued |
3,375,076 |
5,275,554 |
| Share issuance costs |
(19,927) |
(72,860) |
| Proceeds from warrants exercised |
– |
18,231 |
| Proceeds from options exercised |
– |
14,600 |
| Proceeds from working capital line of credit |
(1,172,163) |
– |
| Net cash flows provided by financing activities |
2,182,986 |
5,235,525 |
| Effect of exchange rate changes on cash |
24,018 |
(215,804) |
| Change in cash for the period |
(1,562,434) |
(2,440,414) |
| Cash and cash equivalents, beginning of period |
2,375,619 |
4,696,617 |
| Cash and cash equivalents, end of period |
813,185 |
2,256,203 |
About Snipp:
Snipp is a global loyalty and promotions company with a singular focus: to develop disruptive engagement platforms that generate insights and drive sales. Our solutions include shopper marketing promotions, loyalty, rewards, rebates and data analytics, all of which are seamlessly integrated to provide a one-stop marketing technology platform. We also provide the services and expertise to design, execute and promote client programs. SnippCheck, our receipt processing engine, is the market leader for receipt-based purchase validation; SnippLoyalty is the only unified loyalty solution in the market for CPG brands. Snipp has powered hundreds of programs for Fortune 1000 brands and world-class agencies and partners.
Snipp is headquartered in Toronto, Canada with offices across the United States, Canada, Ireland, Europe, and India. The company is publicly listed on the OTCQB, of the OTC market in the United States of America, and on the Toronto Stock Venture Exchange (TSX) in Canada. Snipp was selected to the TSX Venture 50®, an annual ranking of the strongest performing companies on the TSX Venture Exchange, in 2015 and 2016. SNIPP IS RANKED #49 AMONGST THE FASTEST GROWING COMPANIES IN NORTH AMERICA ON DELOITTE’S 2016 TECHNOLOGY FAST 500™ LIST.
FOR FUTHER INFORMATION PLEASE CONTACT:
MKR Group, Inc.
Todd Kehrli / Mark Forney
snipp@mkr-group.com
Snipp Interactive Inc.
Jaisun Garcha
Chief Financial Officer
investors@snipp.com
This press release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions are intended to identify forward- looking statements. Such statements reflect our current views with respect to future events and are subject to such risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made, including those factors discussed in filings made by us with the Canadian securities regulatory authorities. Should one or more of these risks and uncertainties, such as changes in demand for and prices for the products of the company or the materials required to produce those products, labour relations problems, currency and interest rate fluctuations, increased competition and general economic and market factors, occur or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements, except as required by law. The reader is cautioned not to put undue reliance on such forward- looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Copyright Snipp Interactive Inc. All rights reserved. All other trademarks and trade names are the property of their respective owners.