Single Touch Reports Second Quarter Fiscal 2013 Results

JERSEY CITY, NJ--(Marketwired - May 15, 2013) - Single Touch Systems, Inc. (OTCBB: SITO), a technology based mobile media solutions provider, today reported financial results for the three and six months ended March 31, 2013.

Financial Highlights:

• Revenue: For the second quarter of fiscal 2013, revenue increased to $1.8 million from $1.6 million for the second quarter of fiscal 2012, representing a year-over-year increase of 16%. For the six months ended March 31, 2013, revenues increased to $3.8 million from $3.1 million for the same period of the prior year, representing a year-over-year increase of 19%. Because a majority of the Company's revenues are currently derived from mobile messaging for retailers, Single Touch's business peaks during the holidays and then reflects a return to normalized growth in its third fiscal quarter beginning in April.
  
  
• Gross Margin: For the second quarter of fiscal 2013, gross margin was 57%. In the six months ended March 31, 2013 gross margins improved to 56% from 55% in the same period of 2012.
  
  
• Adjusted EBITDA: For the second quarter of fiscal 2013, adjusted EBITDA, a non-GAAP financial measure, was $(443,000) compared to adjusted EBITDA of $(305,000) for the second quarter of fiscal 2012. For the six months ended March 31, 2013, adjusted EBITDA was $(804,000) as compared to $(709,000) for the same period of the prior year.
  
  
• Net Income (Loss): For the second quarter of fiscal 2013, net loss, on a GAAP basis, was $(1.1) million or $(0.01) per basic and dilute share, compared to a net loss of $(665,000) or $(0.01) per basic and diluted share for the second quarter of fiscal 2012. For the six months ended March 31, 2013, net loss was $(3.3) million or $(0.02) per basic and diluted share, compared to $(1.3) million or $(0.01) per basic and diluted share for the same period in 2012.
  
  
• Messaging Volume: In the second quarter of fiscal 2013, Single Touch sent 66 million marketing message to mobile phone users. This is up 15% from 56 million messages sent in the second quarter of fiscal 2012. Messaging volume is a key business metric for the Company.
  
  

"With continued double digit year-over-year revenue growth and gross margin improvement for the first two quarters of fiscal 2013, we continue to progress towards our goals for revenue growth and profitability in our operating business. We are focused on ramping recurring revenue streams through both existing and new clients," stated Single Touch President and CEO James Orsini.

"For marketers and advertisers there is a realization that consumers don't use desktop and mobile in the same way when they are searching to shop. The numbers are very compelling. Ninety percent of people conducting a mobile search act within 1 day, and 70% act within 1 hour according to data published on sparksheet.com. We believe Single Touch is well positioned to capitalize on the seismic shift towards mobile media consumption and corresponding action. We provide the ROI, the patent protected technologies, and services that deliver results for our customers," Orsini added.

Single Touch Chairman and Chief Technology Officer Anthony Macaluso commented, "During the second quarter of fiscal 2013, we continued our efforts to unlock value in our IP portfolio. In the quarter our Single Touch Interactive subsidiary was also granted a patent from the United States Patent and Trademark Office for a key invention addressing mobile data transfer functions that happen nearly every time a new mobile device is purchased in the U.S. With this latest patent, Single Touch's IP position in the mobile ecosystem is now comprised of 49 patents issued and pending applications."

Conference Call Dial-In Information:

Date: Thursday, May 16, 2013

Time: 8:30 A.M. Eastern Time (ET)

Dial in Number for U.S. & Canadian Callers: 877-407-8629

Dial in Number for International Callers (Outside of the U.S. & Canada): 201-493-6715

To join the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled conference call time. A live webcast and archive of the call will also be available on Single Touch's website at: http://singletouch.equisolvewebcast.com/q2-2013.

If you are unable to participate in the call at this time, a replay will be available for 7 days starting on May 16 at approximately 11:00 A.M. ET. To access the replay, please dial 877-660-6853 in the U.S. and 201-612-7415 for international callers. The conference ID# is 414392.

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

Forward-Looking Statements

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 Three Months Ended								For the Six Months Ended
					March 31,								March 31,
					2013				2012				2013				2012
Revenue
	Wireless applications				$	1,808,836			$	1,554,823			$	3,756,114			$	3,144,496
Operating Expenses
	Royalties and application costs					776,540				654,310				1,660,333				1,417,631
	Research and development					24,050				16,050				32,756				53,250
	Compensation expense (including stock based compensation) *					635,203				679,961				2,390,541				1,373,784
	Depreciation and amortization					160,148				163,604				314,934				319,075
	General and administrative (including stock based compensation) *					1,006,158				577,778				2,073,682				1,108,448
						2,602,099				2,091,703				6,472,246				4,272,188
		Loss from operations				(793,263	)			(536,880	)			(2,716,132	)			(1,127,692	)
Other Income (Expenses)
	Interest income					20				11				41				36
	Interest expense					(279,046	)			(128,468	)			(587,553	)			(166,077	)
		Net (loss) before income taxes				(1,072,289	)			(665,337	)			(3,303,644	)			(1,293,733	)
		Provision for income taxes				-				-				(800	)			(800	)
			Net income (loss)		$	(1,072,289	)		$	(665,337	)		$	(3,304,444	)		$	(1,294,533	)
	Basic and diluted loss per share				$	(0.01	)		$	(0.01	)		$	(0.02	)		$	(0.01	)
	Weighted average shares outstanding					132,646,727				130,182,392				132,558,602				130,316,818
	* Details of stock based compensation included within:
		Compensation Expense			$	-			$				$	1,109,720			$	9,960
		General and administrative			$	190,421			$	68,606			$	487,243			$	89,753
		Total			$	190,421			$	68,606			$	1,596,963			$	99,713

SINGLE TOUCH SYSTEMS, INC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
					March 31,			September 30,
					2013			2012
Assets
	Current assets
		Cash and cash equivalents			$	924,350		$	2,157,707
		Accounts receivable - trade				1,182,697			1,085,840
		Employee advances				3,188			-
		Prepaid expenses				827,604			129,290
			Total current assets			2,937,839			3,372,837
	Property and equipment, net					183,430			228,499
	Other assets
		Capitalized software development costs, net				383,768			383,227
		Intangible assets:
			Patents			534,946			602,056
			Patent applications cost			740,214			667,858
			Software license			831,000			76,000
		Deposit - related party				-			155,000
		Other assets including security deposits				84,278			84,278
			Total other assets			2,574,206			1,968,419
			Total assets		$	5,695,475		$	5,569,755

SINGLE TOUCH SYSTEMS, INC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
					March 31,				September 30,
					2013				2012
Liabilities and Stockholders' Equity
	Current liabilities
		Accounts payable			$	1,078,653			$	768,263
		Accrued expenses				211,020				200,591
		Accrued compensation - related party				75,253				72,730
		Current obligation on patent acquisitions				-				87,500
		Convertible debentures - unrelated parties				-				294,241
			Total current liabilities			1,364,926				1,423,325
	Long-term liabilities
		Deferred revenue				-				25,000
		Convertible debenture - related party				556,439				527,512
		Convertible debentures - unrelated parties				3,544,773				2,685,280
			Total long-term liabilities			4,101,212				3,237,792
			Total liabilities			5,466,138				4,661,117
	Stockholders' Equity
		Preferred stock, $.0001 par value, 5,000,000 shares authorized; none outstanding				-				-
		Common stock, $.001 par value; 200,000,000 shares authorized, 132,945,480 shares issued and outstanding as of March 31, 2013 and 132,472,392 shares issued and outstanding as of September 30, 2012				132,945				132,472
		Additional paid-in capital				128,050,287				125,425,617
		Accumulated deficit				(127,953,895	)			(124,649,451	)
			Total stockholders' equity			229,337				908,638
			Total liabilities and stockholders' equity		$	5,695,475			$	5,569,755

Reconciliation of Non-GAAP Measures

			For the Three Months Ended March 31,
			2013												2012												GAAP							Adjusted EBITDA
							Adjust-				Adjusted								Adjust-				Adjusted				Change							Change
			GAAP				ments				EBITDA				GAAP				ments				EBITDA				$				%			$				%
Revenue
	Wireless Applications		$	1,808,836							$	1,808,836			$	1,554,823							$	1,554,823			$	254,013			16	%		$	254,013			16	%
Operating Expenses
	Royalties and Application Costs		$	776,540							$	776,540			$	654,310							$	654,310			$	122,230			19	%		$	122,230			19	%
	Research and Development		$	24,050							$	24,050			$	16,050							$	16,050			$	8,000			50	%		$	8,000			50	%
	Compensation expense (including stock-based compensation)		$	635,203							$	635,203			$	679,961							$	679,961			$	(44,758	)		-7	%		$	(44,758	)		-7	%
	Depreciation and amortization		$	160,148			$	(160,148	)		$	-			$	163,604			$	(163,604	)		$	-			$	(3,456	)		-2	%
	General and administrative (including stock-based compensation)		$	1,006,158			$	(190,421	)		$	815,737			$	577,778			$	(68,606	)		$	509,172			$	428,380			74	%		$	306,565			60	%
			$	2,602,099			$	(350,569	)		$	2,251,530			$	2,091,703			$	(232,210	)		$	1,859,493			$	510,396			24	%		$	392,037			21	%
Loss from Operations/Adjusted EBITDA			$	(793,263	)		$	350,569			$	(442,694	)		$	(536,880	)		$	232,210			$	(304,670	)		$	(256,383	)		48	%		$	(138,024	)		45	%

			For the Three Months Ended March 31,
			2013												2012												GAAP							Adjusted EBITDA
							Adjust-				Adjusted								Adjust-				Adjusted				Change							Change
			GAAP				ments				EBITDA				GAAP				ments				EBITDA				$				%			$				%
	Professional Fees		$	439,859							$	439,859			$	181,818			$	(15,006	)		$	166,812			$	258,041			142	%		$	273,047			164	%
	Travel		$	81,044							$	81,044			$	80,386							$	80,386			$	658			1	%		$	658			1	%
	Consulting expense		$	323,865			$	(190,421	)		$	133,444			$	166,895			$	(53,600	)		$	113,295			$	156,970			94	%		$	20,149			18	%
	Office rent		$	53,820							$	53,820			$	53,145							$	53,145			$	675			1	%		$	675			1	%
	Insurance expense		$	46,230							$	46,230			$	31,894							$	31,894			$	14,336			45	%		$	14,336			45	%
	Equipment lease		$	-							$	-											$	-			$	-						$	-
	Trade shows		$	17,537							$	17,537			$	3,995							$	3,995			$	13,542			339	%		$	13,542			339	%
	Telephone		$	15,220							$	15,220			$	19,419							$	19,419			$	(4,199	)		-22	%		$	(4,199	)		-22	%
	Office expense		$	13,118							$	13,118			$	9,862							$	9,862			$	3,256			33	%		$	3,256			33	%
	Other		$	15,465							$	15,465			$	30,364							$	30,364			$	(14,899	)		-49	%		$	(14,899	)		-49	%
Total General and Administrative Expenses			$	1,006,158			$	(190,421	)		$	815,737			$	577,778			$	(68,606	)		$	509,172			$	428,380			74	%		$	306,565			60	%

Reconciliation of Non-GAAP Measures

			For the Six Months Ended March 31,
			2013												2012												GAAP							Adjusted EBITDA
							Adjust-				Adjusted								Adjust-				Adjusted				Change							Change
			GAAP				ments				EBITDA				GAAP				ments				EBITDA				$				%			$				%
Revenue
	Wireless Applications		$	3,756,114			$	-			$	3,756,114			$	3,144,496			$	-			$	3,144,496			$	611,618			19	%		$	611,618			19	%
Operating Expenses
	Royalties and Application Costs		$	1,660,333			$	-			$	1,660,333			$	1,417,631			$	-			$	1,417,631			$	242,702			17	%		$	242,702			17	%
	Research and Development		$	32,756			$	-			$	32,756			$	53,250			$	-			$	53,250			$	(20,494	)		-38	%		$	(20,494	)		-38	%
	Compensation expense (including stock-based compensation)		$	2,390,541			$	(1,109,720	)		$	1,280,821			$	1,373,784			$	(9,690	)		$	1,364,094	*		$	1,016,757			74	%		$	(83,273	)		-6	%
	Depreciation and amortization		$	314,934			$	(314,934	)		$	-			$	319,075			$	(319,075	)		$	-			$	(4,141	)		-1	%
	General and administrative (including stock-based compensation)		$	2,073,682			$	(487,243	)		$	1,586,439			$	1,108,448			$	(89,753	)		$	1,018,695	*		$	965,234			87	%		$	567,744			56	%
			$	6,472,246			$	(1,911,897	)		$	4,560,349			$	4,272,188			$	(418,518	)		$	3,853,670			$	2,200,058			51	%		$	706,679			18	%
Loss from Operations/Adjusted EBITDA			$	(2,716,132	)		$	1,911,897			$	(804,235	)		$	(1,127,692	)		$	418,518			$	(709,174	)		$	(1,588,440	)		141	%		$	(95,061	)		13	%

			For the Six Months Ended March 31,
			2013												2012												GAAP							Adjusted EBITDA
							Adjust-				Adjusted								Adjust-				Adjusted				Change							Change
			GAAP				ments				EBITDA				GAAP				ments				EBITDA				$				%			$				%
	Professional Fees		$	777,492			$	(1,894	)		$	775,598	*		$	348,778			$	(30,012	)		$	318,766	*		$	428,714			123	%		$	456,832			143	%
	Travel		$	248,887			$	-			$	248,887			$	219,227			$	-			$	219,227			$	29,660			14	%		$	29,660			14	%
	Consulting expense		$	761,344			$	(485,349	)		$	275,995	*		$	273,820			$	(59,741	)		$	214,079	*		$	487,524			178	%		$	61,916			29	%
	Office rent		$	107,640			$	-			$	107,640			$	98,436			$	-			$	98,436			$	9,204			9	%		$	9,204			9	%
	Insurance expense		$	75,199			$	-			$	75,199			$	60,050			$	-			$	60,050			$	15,149			25	%		$	15,149			25	%
	Equipment lease		$	-			$	-			$	-			$	-			$	-			$	-			$	-						$	-
	Trade shows		$	18,327			$	-			$	18,327			$	15,995			$	-			$	15,995			$	2,332			15	%		$	2,332			15	%
	Telephone		$	27,945			$	-			$	27,945			$	31,029			$	-			$	31,029			$	(3,084	)		-10	%		$	(3,084	)		-10	%
	Office expense		$	24,837			$	-			$	24,837			$	17,918			$	-			$	17,918			$	6,919			39	%		$	6,919			39	%
	Other		$	32,011			$	-			$	32,011			$	43,195			$	-			$	43,195			$	(11,184	)		-26	%		$	(11,184	)		-26	%
Total General and Administrative Expenses			$	2,073,682			$	(487,243	)		$	1,586,439			$	1,108,448			$	(89,753	)		$	1,018,695			$	965,234			87	%		$	567,744			56	%
* Adjustment represents the elimination of stock-based compensation recorded in accordance with GAAP but not considered in the calculation of Adjusted EBITDA.