BETHESDA, MARYLAND--(Marketwired - May 1, 2014) - Snipp Interactive Inc. ("Snipp"), an international provider of mobile marketing solutions listed on the TSX Venture Exchange (TSX VENTURE:SPN), is pleased to announce its financial results for the 2013 fiscal year, ended December 31, 2013. A copy of the complete annual audited financial statements, management's discussion and analysis are available on SEDAR (www.sedar.com).
The total annual sales revenues for 2013 grew 70% from the prior year to $870,420 and the total sales revenues for the 4th quarter of 2013 grew 55% from the prior year to $262,551.
Revenue for fiscal 2013 was $870,720 compared to $511,854 in fiscal 2012. Revenue for the 4th quarter of 2013 was $262,551 compared to $169,839 in the 4th quarter of 2012. The increase in revenue is attributable to a multitude of factors including the creation of new sales channels, additional sales contracts from existing customers, the acquisition of new customers and the launch of innovative new products as part of Snipp's Mobilize Me platform.
Net income for fiscal 2013 was $75,597 compared to a net loss of $2,237,889 in fiscal 2012.
The net loss before other non-operating items was $830,879 for fiscal 2013 compared to a net loss before other non-operating items of $1,603,155 in fiscal 2012. The decrease in net loss (before other non-operating items) was mainly due to increased sales revenue as a result of the continued acquisition of new clients and new mobile solutions within Snipp's portfolio (e.g. SnippAR, SnippCheck and SnippWin), coupled with a focused paring down of operational expenses. The company now has the infrastructure in place to allow its revenues to scale without incurring any significant additional infrastructure costs or investment.
For the year ended December 31, 2013, the Company reduced its operating cash outflows by 52% compared to the year ended December 31, 2012, while at the same time increasing revenue by 70% as noted above. The company is focused on continuing to increase revenue while maintaining a similar operating cost structure.
At the end of fiscal 2013, current assets were $589,430 and current liabilities $323,664.
2013 Highlights include:
- 4 quarters of record revenue growth and cost reductions
- Completion of phase#1 of platform development that is enabling accelerated and scalable revenue growth
- Launch of multiple components to the Mobilize Me platform that allows for turnkey solutions for brand and agency marketers
- Penetration into new overseas markets
- Adoption of the Snipp platform by leading multi-national companies and marketing and advertising agencies
Atul Sabharwal, CEO and Founder of Snipp commented, "We are very pleased to announce our eighth consecutive quarter and our second consecutive year over year of revenue growth. We have built a solid foundation across all aspects of the organization since we first raised capital in 2012 and we are extremely well poised to build on this foundation for continued and sustained success. The team is focused on making 2014 the year we generate positive EPS for our shareholders and we hope to deliver that in the first half of the year itself. Over the next few months we will be launching multiple national campaigns for category defining brands in association with a major sports league, national grocery chains and other big box retailers across the US. For confidentiality reasons and the highly competitive nature of the work we do, we are not at liberty to talk about our clients and their campaigns, but we encourage everyone to check our website frequently to learn about how we continue to succeed in penetrating and building on our relationships with such Fortune 500 brands and leading global marketing agencies."
The information in this section is forward-looking and should be read in conjunction with the section below entitled "CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS".
Management is focused on achieving cash-based profitability in 2014 after sustaining 8 straight quarters of growth since the public offering. In the first four months of 2014, the Company has booked the equivalent of 91% of its 2013 revenues. Given the continued development of the platform and its components, Management believes it is in a strong position to further penetrate the promotions marketing industry and achieve its goal. Management believes that the promotions marketing industry is a large industry (estimated to be worth $80 billion annually in North America) and will represent a key focus area for the Company:
- US companies spent $76.9 billion on incentives and promotions in 2012-2013. $22.7 billion is spent on incentive and loyalty gift cards alone (Incentive Marketing Association: http://www.incentivemarketing.org/)
- US businesses spend $80 billion on promotion marketing annually, with almost $30 billion spent on consumer incentives (Promo Magazine: http://www.incentivecentral.org/consumers/consumers.1844.html, Facts and Figures section)
- The US net revenues of the TOP 100 promotional agencies was over $6 billion in 2012 (Chief Marketer: - http://www.chiefmarketer.com/agencies/chief-marketers-promo-100-ranking-of-top-u-s-promotion-agencies-19062012)
- Mobile couponing itself is expected to be a $46 billion industry by 2016. Last year over 305 billion coupons were distributed in the US - and only 6% of the coupons redeemed were digital or mobile. (Juniper, NCH: http://bgr.com/2011/11/02/mobile-coupon-industry-will-be-worth-46-billion-by-2016-analysts-say/, https://www2.nchmarketing.com/ResourceCenter/assets/0/22/459/535/075ecfb07df44902bb773158e59b9b8a.pdf)
- Marketers spent $6.7 billion across all forms of mobile marketing in 2012 - and are projected to spend $19.8 billion by 2015 (Mobile Marketing Association: http://www.scribd.com/doc/140270280/MMA-Mobile-Marketing-Economic-Impact-Study)
Management believes that the Company is well poised for rapid growth for a variety of reasons:
- Continued product innovation to the platform
- Multiplier effect of its current organic business model
- Effect of recruiting a sales force and attendance in further industry events
- Global deployments with and without regional partners
- Increasing requests for long term licensing and services contract revenue
1. Continued Product Innovation to the Platform
The Company has developed components within its Mobilize Me platform that span the entire purchase life-cycle. In particular, the company is seeing significant traction with SnippCheck, its mobile receipt processing solution that is a relatively unique product offering in its customizability and flexibility in meeting customer needs. Significant promotions activity is tied to purchase, and SnippCheck enables brands to validate consumer purchases for various promotions. SnippCheck also serves as an effective engine around which to continue to add promotions-related features and functionality requested by clients. The Company plans to continually build on these components that allow for a closed-loop, single-platform solution for marketers across the path to purchase. The Company has solutions for each component of this path and will continue to launch pieces to further enhance the platforms capabilities:
A. Build Awareness:
- SnippSites SiteBuilder
- Mobile video
- Mobile microsites
- Print to mobile activations (QR, SMS, Augmented Reality)
- Mobile Alerts
- Polls & Surveys
- Text/scan for info
B. Increase Engagement:
- Contests & sweepstakes
- Sampling programs
- Mobile Alerts
- Geolocation targeting
- Mobile coupons
C. Drive Purchase
- Mobile receipt processing
- Purchase promotions
- Mobile Rebate
- Mobile coupons
D. Enhance Loyalty
- SnippWin & SnippRewards
- Punchcard loyalty programs
- Rewards programs
- Mobile Alerts
Management believes significant opportunities exist in acquiring point solutions that further add or enhance platform capabilities. The Company is constantly evaluating companies that will be complementary to its existing platform and/or allow it to acquire new customer relationships. The promotion market space is highly fragmented and management believes under the right circumstances an opportunity exists to consolidate companies in different parts of the promotion marketing eco-system.
2. Multiplier Effect of the Company's Current Organic Business Model
The company sits at the intersection of three traditional elements in the marketing world that will help it accelerate its business.
- Promotion Windows: Large brands across industry categories build their marketing plans around promotion windows. There are over traditional 80 promotional windows in the year (e.g. New Years Day, Valentines Day, Back to School, Thanksgiving, Christmas). These do not include promotion tactics marketers have to take as a response to competitive action or declines in sales. In a given year a brand runs multiple promotions to take advantage of the various promotion windows that exist, giving the Company multiple opportunities to sell its promotions solutions.
- Multi-Brand Nature of Its Clients: The Company continues to receive an increasing amount of interest from Fortune 500 clients across industries as well as leading global marketing and advertising agencies many of whom belong to the "Big Four" agency holding groups. Snipp is currently executing a number of new and repeat campaigns with such clients who invariably work with Snipp across multiple brands as the relationship expands. Each of these clients has a large portfolio of brands with their own P&L. For confidentiality reasons specific client names, plans and campaigns cannot be revealed due to the competitive nature of the mechanism in which Snipp's platform is deployed by its clients to achieve their business objectives. Snipp does however periodically update its website with recent campaigns after they have been launched and where the client has given the company permission to mention its name and/or if the campaign is covered by industry journals that track the space. You can read more about the types of clients and the work done by the company at http://www.snipp.com/clients. Snipp also works with leading global marketing and advertising agencies that serve multiple large brand clients. A majority of the agencies that Snipp currently works with belong to the "Big Four" agency holding companies. Breaking into these multi-brand companies and agencies leads to additional opportunities with multiple brands within the parent company or in the agency portfolio.
- Channel Specific Promotions: Brands and agencies plan promotions specifically for different retail channels across their promotion windows. There are numerous retail channels (e.g., Walmart, Target, CVS, Walgreens) and each channel typically has a brand-funded "channel budget". Many large brands run the same promotion across multiple channels at the same time or at different points to maintain the illusion of exclusivity. The Company's promotion solutions are unique in their ability to target any specific combination of channels, thereby making them very attractive to brands looking to run channel-specific promotions.
The combination of Promotion Windows, Multi-brand Clients/Agencies, and Channel Specific Promotions create significant opportunities for the Company's continued revenue growth.
3. Effect of Recruiting a Sales Force and Attendance in Further Industry Events
To date, a majority of the Company's revenue has been as a result of clients calling the company based on the reputation of the work done and the relevance of the solutions it has launched over the past two years. The Company's management is frequently quoted in industry journals and called upon to provide opinions on the effectiveness of various tactics. The Company has undertaken very little outbound marketing and until late in 2013 had only participated in one industry conference. Management believes that the opportunity to generate business by building a direct sales force is significant, particularly now that it has a core set of campaigns under its belt. This will be further enhanced over the next few months as the company launches a season-long significant promotion for a leading Consumer Product company in partnership with a major sports league.
4. Global deployments (with and without regional partners)
In 2013, Snipp attracted a partner in Brazil. Previously the company had attracted partners in Mexico and had its own presence in the Middle East. Management believes that this trend will continue. While the path to monetization is longer with overseas partners, Management believes that a significant opportunity exists in these areas and other parts of the world. Operations in the Middle East continue to grow rapidly and we believe opportunities are now arising in Brazil and Mexico that will add to 2014 revenues.
5. Increasing requests for long term licensing and services contract revenue
Management is currently engaged in conversations with multiple agencies and large promotions companies who are interested in licensing components of the Snipp platform in longer-term contracts for their existing and new clients. Significant opportunities exist to consummate such licensing & service deals with these companies over the course of 2014.
About Snipp Interactive Inc.
Snipp Interactive Inc. (www.snipp.com) builds mobile solutions for brands to engage and interact with their customers. Snipp provides print publishers, advertising agencies and corporate/consumer brands, including Fortune 500 companies, with three main solution sets:
- Response: Mobile activations that make offline campaigns more interactive.
- Infrastructure: Tools to create scalable mobile destinations and experiences.
- Validation: Mobile workflows to validate purchases and other customer actions.
Snipp generates revenue by designing, constructing, implementing and managing these mobile solutions for its customers. Snipp is headquartered in Bethesda, MD with international operations in Canada, Mexico and India.
Cautionary Note Regarding Forward-Looking Statements
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.
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