SMTP, Inc. Reports Third Quarter 2014 Financial Results

NASHUA, N.H., Nov. 12, 2014 (GLOBE NEWSWIRE) -- SMTP, Inc. (Nasdaq:SMTP), a global provider of marketing technologies and email delivery services, today reported its financial results for the third quarter ended September 30, 2014.

Recent Highlights

  • Third quarter revenues of $1.63 million, up 11% from $1.47 million in the third quarter of 2013
  • Completed acquisitions of SharpSpring and GraphicMail
  • SharpSpring launched the first marketing automation solution featuring fully integrated call tracking, web tracking and CRM capabilities
  • Appointed Edward Lawton as Chief Financial Officer

"During the third quarter, we made significant progress in our plan to expand beyond our core email delivery capabilities. By acquiring SharpSpring and GraphicMail we've transformed ourselves into an integrated marketing solutions provider for campaign management, automation, delivery and analytics," said Jonathan Strimling, CEO of SMTP, Inc. "The ability to offer a robust suite of products represents a real game-changer for SMTP, allowing us to address a much larger segment of the market and to effectively challenge the largest competitors in the industry.

"Over the coming months we will complete the integration of these acquisitions. During this time we will accelerate our investment in product development, sales and marketing. At the same time, we expect to eliminate certain operational redundancies, such as consolidating the delivery infrastructure of all three companies onto a unified platform. Overall, we are excited about the direction of the business and believe we are well-positioned to accelerate growth," concluded Mr. Strimling.

Quarterly Summary

For the third quarter ended September 30, 2014, revenues were $1.63 million, up 11% from $1.47 million in the third quarter of 2013. Net loss for the third quarter of 2014 was $98,000 or $0.02 per fully diluted share, compared to net income of $320,000, or $0.10 per fully diluted share, for the same period last year. The decline was primarily due to increases in operating expenses related to corporate development and the acquisitions of SharpSpring and GraphicMail. In addition, the Company also strengthened its management team and invested in new resources to support the future growth of the business.

Gross profit in the third quarter of 2014 was $1.29 million, compared to $1.21 million in the same period last year.

Adjusted EBITDA for the third quarter of 2014 was $360,000, compared to $708,000 in the third quarter of 2013.

Cash at the end of the third quarter of 2014 was $5.9 million compared to $11.5 million at the end of the second quarter of 2014. The decrease in cash was due primarily to the acquisition of SharpSpring during the quarter.

Investor Conference Call

SMTP management will host its third quarter 2014 earnings conference call tomorrow, November 13th at 8:30 a.m. ET. Investors interested in participating on the live call can dial (877) 407-8133 within the U.S. or (201) 689-8040 from abroad. Investors can also access the call online through a listen-only webcast on SMTP's website at

The webcast will be archived on the SMTP investor relations website at for 90 days and a telephonic playback of the conference call will be available by calling (877) 660-6853 within the U.S. and (201) 612-7415 from abroad. The telephonic playback will be available beginning at 10:00 a.m. ET on Thursday, November 13, 2014, and continuing through 11:59 p.m. ET on Thursday, November 27, 2014. The replay passcode is 13594609.

About SMTP, Inc.

SMTP (Nasdaq:SMTP) is a leading provider of cloud-based email services offering solutions ranging from sophisticated marketing automation systems to cost-effective SMTP relay services. All of our services are built on our robust platform for email delivery, capable of scaling individual senders to hundreds of millions of emails per month. While we have industry-leading technology, we differentiate our offerings with our dedicated service and multi-lingual support. SMTP, Inc. is headquartered in Nashua NH, and can be found on the web at

To download SMTP's investor relations app please visit Apple's App Store for the iPhone and iPad or Google Play for Android mobile devices.

Safe Harbor Statement

The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continues," "estimates," "projects," "intends," and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us in Item 1.A "Risk Factors" in the Company's most recent Form 10-K; other risks to which the Company is subject; other factors beyond the Company's control.

Non-GAAP Financial Measures

Adjusted EBITDA is a "non-GAAP financial measure" presented as a supplemental measure of the Company's performance. It is not presented in accordance with accounting principles generally accepted in the United States, or GAAP. The Company believes this measure provides additional meaningful information in evaluating its performance over time. However, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company's results as reported under GAAP. A reconciliation of net income (loss) to Adjusted EBITDA is included for your reference in the financial section of this earnings press release.

September 30, December 31,
2014 2013
Cash and cash equivalents $ 5,875,325 $ 1,731,243
Accounts receivable 74,561 25,024
Deferred income taxes 340,681 183,435
Income taxes receivable 453,446 --
Other current assets 174,319 116,522
Total current assets 6,918,332 2,056,224
Property and equipment, net of accumulated depreciation of $220,945 and $145,261 282,455 327,342
Goodwill 8,407,227 --
Other intangible assets, net of accumulated amortization of $25,667 and $9,000 3,544,333 --
Deferred income taxes 60,598 50,099
Deposits 38,645 29,995
Total assets $ 19,251,590 $ 2,463,660
Liabilities and Shareholders' Equity
Current liabilities:
Deferred revenue $ 478,883 $ 334,328
Income taxes payable -- 144,280
Allowance for refunds and chargebacks 2,799 2,965
Accounts payable 262,434 79,574
Accrued expenses and other current liabilities 164,096 27,174
Total current liabilities 908,212 588,321
Earn out liability $ 6,963,000 --
Total liabilities $ 7,871,212 $ 588,321
Shareholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at September 30, 2014 and December 31, 2013 -- --
Common stock, $0.001 par value, 50,000,000 shares authorized, 5,022,599 and 3,127,598 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively 5,022 3,126
Additional paid in capital 11,375,356 2,241,749
Accumulated deficit -- (369,536)
Total shareholders' equity 11,380,378 1,875,339
Total liabilities and shareholders' equity $ 19,251,590 $ 2,463,660
Three Months Ended Nine Months Ended
September 30, September 30,
2014 2013 2014 2013
Net revenue $ 1,631,244 $ 1,468,962 $ 4,602,068 $ 4,233,547
Cost of services 340,649 255,095 1,019,032 782,849
Gross profit 1,290,595 1,213,867 3,583,036 3,450,698
Operating expenses:
Sales and marketing 380,172 295,005 776,485 677,365
Research and development 141,923 81,226 361,932 186,196
General and administrative 973,016 358,788 2,020,617 1,159,254
Amortization expense 25,667 -- 25,667 232
Total operating expenses 1,520,778 735,019 3,184,701 2,023,047
Operating income (loss): (230,183) 478,848 398,335 1,427,651
Other income (expense):
Interest income 367 -- 521 --
Loss on disposal of fixed assets (10,172) -- (10,172) --
Total other income (expense) (9,805) -- (9,651) --
Income (loss) before income taxes (239,988) 478,848 388,684 1,427,651
Provision (benefit) for income tax (142,160) 159,261 111,972 497,058
Net income (loss) $ (97,828) $ 319,587 $ 276,712 $ 930,593
Net income per share:
Basic $ (0.02) $ 0.11 $ 0.06 $ 0.31
Diluted $ (0.02) $ 0.10 $ 0.06 $ 0.30
Weighted average common shares outstanding:
Basic 5,020,005 3,026,032 4,761,469 2,986,273
Diluted 5,020,005 3,139,992 4,814,774 3,130,291
(in thousands)
Three Months Ended
September 30,
2014 2013
Net income (loss) $ (98) $ 320
Provision (benefit) for income tax (142) 159
Other (income) expense 10 --
Depreciation & amortization 57 20
Non-cash stock compensation 166 209
Acquisition related charges 367 --
Adjusted EBITDA $ 360 $ 708

CONTACT: Investor Contacts: Jeffrey Goldberger / Christopher Harrison KCSA Strategic Communications 212-896-1249 / 212-896-1267 smtp@kcsa.comSource:SMTP, Inc.