By Ken Nagy, CFA
On March 21, 2013, Mobivity Holdings Corporation (MFON), the San Diego, California based developer of marketing solutions and platforms for mobile devices, filed its 10K Annual Report with the U.S. Securities and Exchange Commission.
The Company reported solid growth for fiscal 2012 with revenues jumping by $1.555 million, or 62 percent year over year to $4.079 million compared to the full year ended December 31, 2011.
The revenue growth was primarily due to the acquisitions of Mobivity and Txtstation in April 2011 and the acquisition of Boomtext in August 2011, each of which had partial year revenue recorded in 2011.
Similarly, Mobivity saw a 12 percent year over year organic growth of Boomtext revenues as well as a 49 percent jump in revenues from CommerceTel operations.
Gross margin jumped to 68.1 percent for the year ended December 31, 2012 compared to 60.9 percent for fiscal 2011.
The improvement was primarily a result of the acquisitions of Mobivity, Txtstation, and Boomtext in 2011, and reduced costs related to message transmission through the consolidation of acquired vendors, negotiated volume discounts, and greater leverage of fixed costs.
Total operating expenses for the year fell to $6.546 million from $17.068 million for fiscal 2011 primarily as a result of goodwill impairment charges of $742,446 in 2012 versus $10.435 million for 2011, related to the Mobivity’s three acquisitions in 2011.
Still, net loss for the full year ended December 31, 2012 was $7.338 million compared to $16.309 million for the comparable twelve months of 2011.
Here again, the improvement was primarily a result of the $9.692 decrease in goodwill impairment charges offset by a $4.015 million year over year increase in net interest expense.
Based on a weighted average number of basic and diluted common shares of 23.069 million shares, basic and diluted net loss per share resulted in a net loss of $0.32 for the fiscal year ended December 31, 2012. This compared to a basic and diluted net loss per share of $0.78 on a weighted average number of basic and diluted shares of 20.910 million shares during the full year ended December 31, 2011.
As of December 31, 2012, Mobivity had current assets of $445,043, including $363 in cash, and current liabilities of $9.740 million, resulting in a working capital deficit of $9.294 million.
On a year over year basis, the Company’s current assets decreased and the negative working capital position increased as a result of continuing losses from operations.
Still, in December 2012, Mobivity announced that it had entered into a non-binding letter of intent to acquire the assets of Sequence LLC, developers of the Stampt mobile loyalty application.
Stampt's Smartphone app offers a convenient paperless way for customers to use value-based loyalty incentives and the combining of Stampt's install base with Mobivity will extend the Company’s reach to more than 6,000 local advertisers nationwide who will now benefit from a unique combination of mobile messaging, social, and Smartphone loyalty capabilities.
Mobile phone users are emerging as the principal interactive channel for brands to reach consumers since it is the only media platform that has access to the consumer virtually anytime and anywhere.
As a result the mobile channel is a highly effective campaign tool and its response levels are high compared to other media. Therefore, the future of digital media is anticipated to be driven by mobile phones where a direct, personal conversation can be had with the world’s largest audience.
Mobivity Holdings is a pioneer in the deployment of the mobile channel as the ultimate direct connection to the consumer with over 4 million consumers being engaged via their mobile device as a result of its technology.
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By Ken Nagy, CFA