NEW YORK, NY / ACCESSWIRE / May 11, 2017 / Snap Interactive, Inc. ("SNAP," the "Company," "we," "our," or "us") (OTCQB: STVI), a leading provider of live video social networking and interactive dating applications, today announced financial and operational results for the quarter ended March 31, 2017.

Presentation for Merger:

On October 7, 2016, we completed our previously announced merger (the "Merger") with A.V.M. Software ("AVM"). The Merger has been accounted for as a "reverse merger" under the acquisition method of accounting for business combinations with AVM being treated as the accounting acquirer of SNAP. Accordingly, the financial results included in this release reflect the operations of AVM for the period of January 1, 2016 through March 31, 2016, and the operations of the post-Merger Company for the period of January 1, 2017 through March 31, 2017.

First Quarter 2017 Financial Highlights:

  • Total revenues of approximately $6.7 million increased 36.1% in the quarter ended March 31, 2017 as compared to the first quarter of 2016;
  • Subscription revenues increased 41.8% compared to the same period last year;
  • Cash flow provided by operating activities was approximately $943 thousand, with balance sheet cash and equivalents increasing sequentially to approximately $5.0 million at March 31, 2017;
  • Net loss from operations was approximately $1.0 million for the quarter ended March 31, 2017; and
  • Adjusted EBITDA was approximately ($214) thousand for the quarter ended March 31, 2017. Adjusted EBITDA included a one-time lease cancellation expense of $225 thousand related to Merger integration.

First Quarter 2017 Business Highlights

  • Founded an Innovation Lab to leverage our technology and commercial platform to support growth initiatives in the live video markets;
  • Beta launched 50more, a new dating application targeted at the fast growing market of users 50 years and older;
  • Integrated dating functionality into Paltalk to introduce FirstMet membership to video chat users, a significant cross-sell opportunity within the SNAP portfolio;
  • Initiated new user monetization strategies focused on micro-transactions;
  • Finalized several merger integration initiatives including an organizational restructuring, as well as consolidation of real estate and vendors, and standardizing our technology platform and reporting systems;
  • Completed a 1-for-35 reverse stock split and formed audit and compensation committees consisting of three and two independent directors, respectively, as steps towards listing on a national stock exchange; and
  • Subsequent to the quarter end, solidified the executive team by entering into employment agreements with Eric Sackowitz as Chief Technology Officer and Arash Vakil as Chief Product Officer.

First Quarter 2017 Financial Overview (in thousands)

Current quarter compared to same quarter prior year:

Three Months Ended
March 31,
GAAP Results (unaudited)
2017
2016
Change
Subscription revenue
$ 6,224 $ 4,389 41.8 %
Advertising revenue
$ 495 $ 548 (9.7 )%
Total revenues
$ 6,719 $ 4,938 36.1 %
Sales and marketing expense
$ 2,230 $ 919 142.8 %
Net (loss) income
$ (1,039 ) $ 41 N/A
Net cash provided by operating activities
$ 943 $ 408 131.3 %
Financial Metrics (unaudited)
Bookings
$ 6,143 $ 4,274 43.7 %
Adjusted EBITDA (a non-GAAP measure)
$ (214 ) $ 297 (172.0 )%

"In the first quarter of 2017, we accomplished two main objectives, completing our Merger integration in most material ways, and organizing the Company around a new mission: to be a leader in social products delivering live video experiences in a mobile world," commented Alex Harrington, SNAP's Chief Executive Officer. In addition, the financial effect of the Merger has driven a second consecutive quarter of significant year-over-year revenue growth.

Mr. Harrington added, "We see live video as a high growth medium that is having a disruptive effect on social networking and other areas of the consumer web. We believe it is one the biggest areas of Internet innovation right now, and fortunately we have invested 15 years developing a technology and commercial platform supporting live video social networking. Snap started an Innovation Lab in 2017 to capitalize on this competitive advantage, so that we can channel resources to growth opportunities and leverage our platform. The Innovation Lab is pursuing live video social networking and live streaming entertainment opportunities on mobile, two areas that show extraordinary promise for user adoption and revenue growth. In parallel to this effort we also launched new monetization strategies to further diversify and enhance our revenue streams across our existing product portfolio. During the first quarter, we began testing new micro-transactions that allow users limited access to premium-level benefits. In addition, we are also enhancing and expanding our offering of virtual gifts, to increase revenue per user."

Jason Katz, SNAP's Chairman, President and Chief Operating Officer, added, "Our integration efforts following the Merger advanced according to plan, and as we near completion, we have cleared the decks for strategic initiatives. During the first quarter we made significant progress: we unified the marketing, customer service and business intelligence functions across the organization as well as finalized preparations for consolidating our corporate headquarters, which occurred in April 2017. These and other initiatives helped reduce our cost of operations, which we continue to manage downward. Additionally, we strengthened the SNAP leadership by formalizing the Company's contractual relationship with Eric Sackowitz and Arash Vakil as our Chief Technology Officer and Chief Product Officer respectively. Eric and Arash are accomplished executives who are central to execution of our growth plans."

Liquidity and Capital Resources

  • SNAP ended the quarter with approximately $5.0 million in cash and cash equivalents and no debt, with cash and cash equivalents increasing from December 31, 2016 by approximately $861 thousand;
  • Cash flow provided by operating activities of approximately $943 thousand; and
  • Management believes the Company has sufficient working capital to fund operations and organic growth initiatives.

Judy Krandel, SNAP's Chief Financial Officer added, "Once again, SNAP delivered revenue growth and positive cash flow from operations as a result of the Merger. We are a more streamlined organization with approximately $5.0 million in cash to support our ongoing efforts."

Quarterly Results Conference Call

SNAP will host a conference call and live webcast to discuss these results today at 4:30pm Eastern Time. To access the call, please dial 1-888-337-8198 (toll-free) or 1-719-457-2630. The conference call will also be webcast live on on the Investor Relations section of the SNAP website at http://www.snap-interactive.com/investor-relations/.

A replay of the webcast will be archived on the Investor Relations section of the SNAP website beginning shortly after the call. A telephone replay of the call will also be available following the call until May 25, 2017, and may be accessed via telephone by dialing 1-844-512-2921 for the U.S. (or 1-412-317-6671 outside the United States) and entering pass code: 3876523.

About Snap Interactive, Inc.

Snap Interactive, Inc. is a leading provider of live video social networking and interactive dating applications. SNAP has a diverse product portfolio consisting of nine products including Paltalk and Camfrog, which together host one of the world's largest collections of video-based communities, and FirstMet, a prominent interactive dating brand serving users 35 and older. The Company has a long history of technology innovation and holds 25 patents related to video conferencing and online gaming.

For more information, please visit http://www.snap-interactive.com.

To be added to our distribution list, please visit http://www.snap-interactive.com/investor-relations/investor-alerts.

The contents of our websites are not part of this press release, and you should not consider the contents of these websites in making an investment decision with respect to our common stock.

IR Contact:

IR@snap-interactive.com

Forward-Looking Statements

This press release contains "forward-looking statements." Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential," or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with general economic, industry and market sector conditions; the ability to effectively integrate the operations of the Company and AVM; user acceptance of our updated applications; the Company's ability to institute corporate governance standards or achieve compliance with national securities exchange listing requirements; the Company's future growth and the ability to obtain additional financing to implement the Company's growth strategy; the ability to increase or recognize revenue, decrease expenses and increase the number of active subscribers, new subscription transactions or monthly active users; the ability to enter into new advertising agreements; the Company's ability to generate positive cash flow from operations; the ability to diversify new user acquisition channels or improve the conversion of users to paid subscribers; the ability to anticipate and respond to changing user and industry trends and preferences; the intense competition in the online dating marketplace; the ability to release new applications or derive revenue from new applications; and circumstances that could disrupt the functioning of the Company's applications. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission ("SEC"), including the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov.

All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.

SNAP INTERACTIVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,
2017
December 31,
2016
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
5,023,964
$
4,162,596
Credit card holdback receivable
173,579
172,169
Accounts receivable, net of allowances and reserves of $53,109 and $57,674, respectively
685,313
958,695
Prepaid expense and other current assets
399,618
1,047,483
Total current assets
6,282,474
6,340,943
Property and equipment, net
725,263
793,305
Goodwill
14,304,667
14,304,667
Intangible assets, net
5,184,005
5,605,193
Long term security deposits
131,547
397,608
Other receivables
84,428
82,435
Total assets
$
26,712,384
$
27,524,151
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
2,235,582
$
1,665,831
Accrued expenses and other current liabilities
161,652
472,406
Deferred subscription revenue
2,748,350
2,828,827
Total current liabilities
5,145,584
4,967,064
Deferred rent, net of current portion
-
261,286
Deferred tax liability
1,452,339
1,452,339
Total liabilities
6,597,923
6,680,689
Commitments and Contingencies
Stockholders' equity:
Common stock, $0.001 par value, 14,285,715 shares authorized, 6,714,915 shares issued and outstanding
6,715
6,715
Additional paid-in capital
16,175,270
15,865,568
Retained earnings
3,932,476
4,971,179
Total stockholders' equity
20,114,461
20,843,462
Total liabilities and stockholders' equity
$
26,712,384
$
27,524,151

SNAP INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended
March 31,
2017
2016
Revenues:
Subscription revenue
$
6,223,685
$
4,389,274
Advertising revenue
495,267
548,424
Total revenues
6,718,952
4,937,698
Costs and expenses:
Cost of revenue
1,282,505
1,399,000
Sales and marketing expense
2,230,492
918,616
Product development expense
2,211,344
2,092,835
General and administrative expense
2,070,127
486,743
Total costs and expenses
7,794,468
4,897,194
(Loss) income from operations
(1,075,516
)
40,504
Interest expense, net
36,813
285
(Loss) income before provision for income taxes
(1,038,703
)
40,789
Provision for income taxes
-
-
Net (loss) income
$
(1,038,703
)
$
40,789
Net (loss) income per share of common stock:
Basic and diluted
$
(0.15
)
$
0.01
Weighted average number of shares of common stock used in calculating net (loss) income per share of common stock:
Basic and diluted
6,714,915
5,228,617

SNAP INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended
March 31,
2017
2016
Cash flows from operating activities:
Net (loss) income
$
(1,038,703
)
$
40,789
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation of property and equipment
130,637
104,824
Amortization of intangible assets
421,188
137,776
Stock-based compensation expense
309,702
14,211
Changes in operating assets and liabilities:
Credit card holdback receivable
(1,410
)
-
Accounts receivable
273,382
336,515
Prepaid expenses and other current assets
647,865
768
Accounts payable, accrued expenses and other current liabilities
276,141
(42,991
)
Deferred rent
4,775
(37,375
)
Deferred subscription revenue
(80,477
)
(146,863
)
Net cash provided by operating activities
943,100
407,654
Cash flows from investing activities:
Purchase of property and equipment
(62,595
)
(107,866
)
Accrued interest from notes receivables issued to employees
(1,993
)
-
Net cash used in investing activities
(64,588
)
(107,866
)
Cash flows from financing activities:
Payments of capital lease obligations
(17,144
)
-
Net cash used in financing activities
(17,144
)
-
Net increase in cash and cash equivalents
861,368
299,788
Balance of cash and cash equivalents at beginning of period
4,162,596
6,676,557
Balance of cash and cash equivalents at end of period
$
5,023,964
$
6,976,345
Supplemental disclosure of cash flow information:
Cash paid in interest
$
158
$
-
Cash paid in taxes
$
18,304
$
716

SNAP INTERACTIVE, INC
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(unaudited)

Three Months Ended
March 31,
2017
2016
Reconciliation of Net (loss) income to Adjusted EBITDA:
Net (loss) income
$
(1,038,703
)
$
40,789
Interest expense, net
(36,813
)
(285
)
Depreciation and amortization expense
551,824
242,600
Stock-based compensation expense
309,702
14,211
Adjusted EBITDA
$
(213,990
)
$
297,315

SOURCE: Snap Interactive, Inc.