MeetMe Reports Third Quarter 2015 Financial Results

11/03/2015

Mobile Revenue Increased 73% Year Over Year

Adjusted EBITDA Increased 141% Year Over Year

Adjusted EBITDA Margin Increased to 37%

NEW HOPE, Pa.–(BUSINESS WIRE)–
MeetMe, Inc. (NASDAQ: MEET), the public market leader for social
discovery, today reported financial results for its third quarter ended
September 30, 2015.

Third Quarter 2015 Financial Highlights

  • Mobile revenue was $11.6 million, up 73% from the third quarter of
    2014.
  • Mobile revenue represented 81% of total revenue, the highest in
    MeetMe’s history.
  • Total revenue was $14.3 million, up 23% from the third quarter of 2014.
  • Adjusted EBITDA was $5.2 million, an increase of 141% year over year.
    (See the important discussion about the presentation of non-GAAP
    financial measures, and reconciliation to the most direct comparable
    GAAP financial measure, below.) Third quarter 2015 adjusted EBITDA
    excludes a one-time, $5.7 million write-off of Beanstock Media’s
    accounts receivable balance, which falls outside of the Company’s
    normal range of bad debt expense.
  • Adjusted EBITDA margin increased to 37%, up from 19% in the third
    quarter of 2014.
  • Net loss was $2.0 million, compared to net income of $52,000 for the
    third quarter of 2014. Third quarter 2015 net income was impacted by
    the one-time, $5.7 million write-off of Beanstock Media’s accounts
    receivable balance.
  • Cash and Cash Equivalents totaled $15.5 million at September 30, 2015.

Geoff Cook, Chief Executive Officer of MeetMe, stated, “In the third
quarter, we set a new revenue record, reflecting growth in both
engagement and ad pricing (or CPMs). Our mobile daily active users
increased 19% year over year and our total mobile monthly active users
increased 31% year over year. Additionally, our mobile CPMs increased
88% year over year. We believe it is significant to have achieved this
level of revenue performance in the third quarter, as the fourth quarter
is historically our strongest revenue quarter of the year, due to
seasonal trends in CPMs. We are pleased to see the positive CPM momentum
experienced in the third quarter continue to date into the fourth
quarter.”

“On the product side, by year end, we expect to launch a major revamp of
the MeetMe Plus subscription service, as well as additional native
advertising partners. Our team is also hard at work at initiatives
designed to deliver future user growth, including a significant revamp
to our Recommendation Engine and a major new feature designed to
facilitate interest-based communities.”

David Clark, Chief Financial Officer of MeetMe, added, “With continued
effective management of our mobile advertising inventory, our mobile
revenue during the quarter increased 73% year over year. Mobile revenue
represented 81% of our total quarterly revenue, the highest percentage
in our history and up from 58% in the year ago quarter. Much of that
revenue improvement flowed through to adjusted EBITDA, which increased
to $5.2 million on a year over year basis, resulting in a 37% adjusted
EBITDA margin.”

Webcast and Conference Call Details

Management will host a webcast and conference call to discuss third
quarter 2015 financial results today, November 3, 2015 at 10:30 a.m.
Eastern time. To access the call dial 888-438-5448 (+1 719-457-2664
outside the United States) and when prompted provide the participant
passcode 2164051 to the operator. In addition, a webcast of the
conference call will be available live on the Investor Relations section
of the Company’s website at www.meetmecorp.com
and a replay of the webcast will be available for 90 days.

About MeetMe, Inc.

MeetMe® is the leading social network for meeting new people in the US
and the public market leader for social discovery (NASDAQ: MEET). MeetMe
makes it easy to discover new people to chat with on mobile devices.
With approximately 80 percent of traffic coming from mobile and more
than one million total daily active users, MeetMe is fast becoming the
social gathering place for the mobile generation. MeetMe is a leader in
mobile monetization with a diverse revenue model comprising advertising,
native advertising, virtual currency, and subscription. MeetMe apps are
available on iPhone, iPad, and Android in multiple languages, including
English, Spanish, Portuguese, French, Italian, German, Chinese
(Traditional and Simplified), Russian, Japanese, Dutch, Turkish and
Korean. For more information, please visit meetmecorp.com.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995, including the significance of third quarter revenue performance in
terms of historical seasonal trends in our CPMs; whether positive CPM
momentum experienced in the third quarter continue so far into the
fourth quarter; whether we will launch a major revamp of the MeetMe Plus
subscription service and the timing of such launch; whether we will
launch additional native advertising partners and the timing of such
launch; the success of future initiatives in delivering user growth;
whether we will launch a significant revamp to our Recommendation Engine
and the timing of such launch; whether we will launch a major new
feature designed to facilitate interest-based communities and the timing
of such launch; and whether our management of our mobile advertising
inventory will continue to be effective in increasing mobile revenue..
All statements other than statements of historical facts contained
herein are forward-looking statements. The words “believe,” “may,”
“estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“could,” “target,” “potential,” “project,” “is likely,” “expect” and
similar expressions, as they relate to us, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on our current expectations and projections about
future events and financial trends that we believe may affect our
financial condition, results of operations, business strategy and
financial needs. Important factors that could cause actual results to
differ from those in the forward-looking statements include the risk
that our applications will not function easily or otherwise as
anticipated, the risk that we will not launch additional features and
upgrades as anticipated, the risk that unanticipated events affect the
functionality of our applications with popular mobile operating systems,
any changes in such operating systems that degrade our mobile
applications’ functionality and other unexpected issues which could
adversely affect usage on mobile devices. Further information on our
risk factors is contained in our filings with the Securities and
Exchange Commission (“SEC”), including the Form 10-K for the year ended
December 31, 2014 and the Current Report on Form 8-K filed with the SEC
on June 3, 2015. Any forward-looking statement made by us herein speaks
only as of the date on which it is made. Factors or events that could
cause our actual results to differ may emerge from time to time, and it
is not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement, whether as
a result of new information, future developments or otherwise, except as
may be required by law.

Regulation G – Non-GAAP Financial Measures

The Company uses financial measures which are not calculated and
presented in accordance with U.S. generally accepted accounting
principles (“GAAP”) in evaluating its financial and operational decision
making and as a means to evaluate period-to period comparison. The
Company uses these non-GAAP financial measures for financial and
operational decision-making and as a means to evaluate period-to-period
comparisons. The Company presents these non-GAAP financial measures
because it believes them to be an important supplemental measure of
performance that is commonly used by securities analysts, investors and
other interested parties in the evaluation of companies in our industry.
We refer you to the reconciliations below.

The Company defines Adjusted EBITDA as earnings (or loss) from
continuing operations before interest expense, change in warrant
liability, income taxes, depreciation and amortization, and non-cash
stock-based compensation, non-recurring acquisition and restructuring
expenses, loss on cumulative foreign currency translation adjustment,
gain on sale of asset, bad debt expense outside the normal range, and
the goodwill impairment charges. The Company excludes stock-based
compensation because it is non-cash in nature.

Non-GAAP financial measures should not be considered as an alternative
to net income, operating income, cash flow from operating activities, as
a measure of liquidity or any other financial measure. They may not be
indicative of the historical operating results of the Company nor is it
intended to be predictive of potential future results. Investors should
not consider non-GAAP financial measures in isolation or as a substitute
for performance measures calculated in accordance with GAAP.

 
MEETME, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
       
(Unaudited)

September 30,
2015

December 31,
2014

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 15,528,283 $ 17,041,050
Accounts receivable, net of allowance of $338,000 and $586,000, at
September 30, 2015 and December 31, 2014, respectively
10,956,933 9,045,269
Prepaid expenses and other current assets   911,601     790,031  
Total current assets   27,396,817     26,876,350  
 
Goodwill 70,646,036 70,646,036
Property and equipment, net 2,519,033 2,458,897
Intangible assets, net 1,657,248 2,894,330
Other assets   191,193     338,146  
TOTAL ASSETS $ 102,410,327   $ 103,213,759  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,745,902 $ 2,985,259
Accrued liabilities 3,178,405 3,249,404
Current portion of capital lease obligations 437,158 872,761
Current portion of long-term debt 1,246,809 2,068,326
Deferred revenue   207,753     218,484  
Total current liabilities   6,816,027     9,394,234  
 
Long-term capital lease obligation, less current portion, net 290,290 587,416
Long-term debt, less current portion, net 556,612
Other liabilities   412,318     418,530  
TOTAL LIABILITIES $ 7,518,635   $ 10,956,792  
 
STOCKHOLDERS’ EQUITY:
Preferred stock, $.001 par value, authorized – 5,000,000 Shares;
Convertible Preferred Stock Series A-1, $.001 par value; authorized
– 1,000,000 shares; 1,000,000 shares issued and outstanding at
September 30, 2015 and December 31, 2014
$ 1,000 $ 1,000
Common stock, $.001 par value; authorized – 100,000,000 Shares;
45,480,470 and 44,910,034 issued and outstanding at September 30,
2015 and December 31, 2014
45,486 44,914
Additional paid-in capital 299,021,085 297,001,168
Accumulated deficit (204,175,879 ) (204,072,240 )
Accumulated other comprehensive loss       (717,875 )
TOTAL STOCKHOLDERS’ EQUITY   94,891,692     92,256,967  
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 102,410,327   $ 103,213,759  
 
   
MEETME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) (UNAUDITED)
           

For the Three Months Ended
September
30,

For the Nine Months Ended
September
30,

2015 2014 2015 2014
 
Revenues $ 14,308,080   $ 11,604,724   $ 37,023,933   $ 31,795,558  
 
Operating Costs and Expenses:
Sales and marketing 1,483,252 1,516,547 3,792,639 5,611,313
Product development and content 6,175,566 7,021,353 18,578,826 20,734,532
General and administrative 7,802,367 1,932,161 11,197,263 6,055,944
Depreciation and amortization 762,830 1,135,263 2,380,004 3,300,654
Restructuring costs               120,202  
Total Operating Costs and Expenses   16,224,015     11,605,324     35,948,732     35,822,645  
 
Income (Loss) from Operations   (1,915,935 )   (600 )   1,075,201     (4,027,087 )
 
Other Income (Expense):
Interest income 5,303 2,679 15,733 4,394
Interest expense (93,383 ) (206,980 ) (375,239 ) (868,866 )
Change in warrant liability 45,532 256,932 6,212 82,471
Loss on cumulative foreign currency translation adjustment (78,987 ) (862,078 )
Gain on sale of asset           163,333      
Total Other Income (Expense)   (121,535 )   52,631     (1,052,039 )   (782,001 )
 
Income (loss) before Income Taxes (2,037,470 ) 52,031 23,162 (4,809,088 )
Income taxes   1,849         (126,801 )    
Net Income (Loss) $ (2,035,621 ) $ 52,031   $ (103,639 ) $ (4,809,088 )
Preferred stock dividends                
Net income (loss) allocable to Common Stockholders $ (2,035,621 ) $ 52,031   $ (103,639 ) $ (4,809,088 )
 
Basic and diluted income (loss) per common stockholders:
Basic income (loss) per common stockholders $ (0.04 ) $ 0.00   $ 0.00   $ (0.12 )
Diluted income (loss) per common stockholders $ (0.04 ) $ 0.00   $ 0.00   $ (0.12 )
 
Weighted average shares outstanding:
Basic   45,470,686     43,092,803     45,192,785     40,131,955  
Diluted   45,470,686     43,092,803     45,192,785     40,131,955  
 
Net Income (Loss) $ (2,035,621 ) $ 52,031 $ (103,639 ) $ (4,809,088 )
Foreign currency translation adjustment       (74,389 )       (34,115 )
Comprehensive Loss $ (2,035,621 ) $ (22,358 ) $ (103,639 ) $ (4,843,203 )
 
 
MEETME, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME (LOSS) ALLOCABLE TO COMMON
STOCKHOLDERS TO ADJUSTED EBITDA
(UNAUDITED)
               

For the Three Months Ended
September
30,

For the Nine Months Ended
September
30,

2015 2014 2015 2014
 
Net income (loss) allocable to Common Stockholders $ (2,035,621 ) $ 52,031   $ (103,639 ) $ (4,809,088 )
 
Interest expense 93,383 206,980 375,239 868,866
Depreciation and amortization 762,830 1,135,263 2,380,004 3,300,654
Stock-based compensation expense 661,426 1,043,083 2,009,742 3,022,471
Change in warrant liability (45,532 ) (256,932 ) (6,212 ) (82,471 )
Income taxes (1,849 ) 126,801
Acquisition and restructuring costs 120,202
Bad debt expense outside normal range 5,735,204 5,735,204
Loss on cumulative effect of foreign currency translation adjustment 78,987 862,078
Gain on sale of asset           (163,333 )    
Adjusted EBITDA $ 5,248,828   $ 2,180,425   $ 11,215,884   $ 2,420,634  
 
 
GAAP basic and diluted net income (loss) per common stockholders $ (0.04 ) $ 0.00   $ 0.00   $ (0.12 )
Basic adjusted EBITDA per common stockholders $ 0.12   $ 0.05   $ 0.25   $ 0.06  
Diluted adjusted EBITDA per common stockholders $ 0.11   $ 0.05   $ 0.23   $ 0.05  
 
Weighted average number of shares outstanding, Basic   45,470,686     43,092,803     45,192,785     40,131,955  
Weighted average number of shares outstanding, Diluted   49,128,421     46,064,928     48,794,667     45,567,523  
 

Investors:
MKR Group Inc.
Todd Kehrli or Jim Byers,
323-468-2300
meet@mkr-group.com

Source: MeetMe, Inc.