Snipp Interactive Reports Financial Results for Q4 2018 and Fiscal 2018

TORONTO, April 30, 2019 (GLOBE NEWSWIRE) — Snipp Interactive Inc. (“Snipp” or the “Company”) (TSX-V: SPN; OTCPK: SNIPF), a global provider of digital marketing promotions, rebates and loyalty solutions, is pleased to announce its financial results for Q4 2018 and the year ended December 31, 2018 (“Fiscal 2018”). All results are reported under International Financial Reporting Standards (“IFRS”) and in US dollars. A copy of the complete audited financial statements and management’s discussion and analysis are available on SEDAR (www.sedar.com).

Q4 2018 and Fiscal 2018 Highlights

(Refer to Non-GAAP Measures, Gross Margin, EBITDA and Bookings Backlog discussion below)

• EBITDA in Q4 2018 improved by 143% compared to Q4 2017, an EBITDA improvement of $312,245. Q4 2018 EBITDA was positive $0.09MM vs Q4 2017 EBITDA loss of $0.22MM.
• EBITDA in Fiscal 2018 improved by 58% compared to Fiscal 2017, an EBITDA improvement of $1,123,421. Fiscal 2018 EBITDA loss was $0.80M vs Fiscal 2017 EBITDA loss of $1.92MM.
• The Company was EBITDA positive for the second half of Fiscal 2018 in both Q3 2018 and Q4 2018, recognizing EBITDA of $345,329 over the last six months of fiscal 2018.
• The Company achieved its largest quarter of sales bookings in company history with sales bookings of $4.4MM in Q4 2018, an improvement of 11% compared to Q4 2017 sales bookings of $4.07MM.
• The Company exceeded $15MM in annual sales bookings for the first time ever and set a new record for number of programs sold at over 320. In addition, 2018 also marked the Company’s foray into several new market segments including equine feeds, hospitality, firearms and malls. Sales bookings for the year ended December 31, 2018 of $15.5MM, improved by 25% compared to the year ended December 31, 2017 of $12.4MM.
• The Company generated positive cash flows from Operating Activities during Q4 2018 of $575,030 compared to negative cash flows from Operating Activities during Q4 2017 of -$358,538. An improvement of 162% or $933,568.
• The Company generated positive cash flows from Operating Activities during the year ended December 31, 2018 of $314,619 compared to negative cash flows from Operating Activities during the year ended December 3, 2017 of -$3,075,203. An improvement of 1077% or $3,389,822. Fiscal 2018 was the first fiscal year in the Company’s history that it generated positive cash flows from Operating Activities.
• Revenue for Q4 2018 decreased by 14% compared to Q4 2017. Revenue for Q4 2018 was $3.32MM compared to revenue for Q4 2017 of $3.84MM. However, this decrease was due to an increase in higher margin revenue, which is recognized over a longer time period. As a result, while total revenue realized in the quarter decreased, this was offset by higher margins and lower operating expenses, resulting in a 143% increase in EBITDA in Q4 2018 compared to Q4 2017. Gross margin in Q4 2018 was 69% compared to 66% in Q4 2017.
• Revenue for the year ended December 31, 2018 decreased by 6% compared to the year ended December 31, 2017. Revenue for the year ended December 31, 2018 was $12.15MM compared to revenue for the year ended December 31, 2017 of $12.88MM. However, while total revenue realized in the year decreased, this was offset by lower operating expenses, resulting in a 58% increase in EBITDA in Fiscal 2018 compared to Fiscal 2017.
• Bookings Backlog (programs that have been sold, but whose revenues have not yet been recognized) stood at $8.0MM at December 31, 2018, a 27% increase compared to December 31, 2017 of $6.3MM.
• The Company continued to focus on cost improvements from its integration efforts, resulting in the following Q4 2018 cost savings compared to Q4 2017:
  • Salaries and compensation expenses decreased by approximately US $615k or 27%;
  • General and administrative expenses decreased by approximately US $55k or 19%;
  • Professional fees decreased by approximately US $26k or 33%;
• The following are cost savings recognized in the year ended December 31, 2018 compared to the year ended December 31, 2017:
  • Salaries and compensation expenses decreased by approximately US $2,088k or 23%;
  • General and administrative expenses decreased by approximately US $185k or 16%;
  • Professional fees decreased by approximately US $56k or 21%;
• The Company completed the acquisition of Ziploop Inc., a leading machine learning and artificial intelligence based promotions, loyalty and influencer marketing platform. The integration will result in further cost savings visible from Q1 2019 onwards.
• The Company was ranked for the third consecutive year on Deloitte’s Technology Fast 500™, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and energy tech companies – both public and private – in North America. The Company ranked 312th on Deloitte’s Technology Fast 500. Technology Fast 500 award winners are selected based on percentage fiscal year revenue growth from 2014 to 2017. The Company’s revenue grew 262% percent during this period.
• The Company welcomed Tom J. Burgess to its board of directors. Mr. Burgess is a frequent speaker at global marketing conferences and has been quoted or featured in Forbes, NY Times, Wall Street Journal, Boston Globe, CNBC and many industry publications. He founded Linkable Networks, a payments loyalty company in 2010 and orchestrated a significant asset sale to the global loyalty company Collinson in September 2017. In 2001 Mr. Burgess founded Third Screen Media, a wireless advertising company that was purchased by AOL/TW in 2007.
• The Company entered into its first five-year hospitality loyalty services agreement, based on a variable pricing model with a guaranteed floor.

“We are very pleased with our evolution in 2018. Achieving EBITDA positive results for the entire back half of 2018 was something we had promised our investors at the beginning of the year and I would like to congratulate our team in meeting this important milestone. Our strategy on reducing our costs while we integrated the assets from our various acquisitions as well as improving the quality of our revenue to include longer term contracts is bearing fruit as is evident in our results. Crossing the $15MM in sales booking marker is a major milestone for our company and the excellent backlog of $8MM, at the start of 2019, a 27% improvement from our start in 2018, also reflects the potential for the company to continue to grow profitably at a respectable rate,” said Atul Sabharwal, Founder & CEO of Snipp. “We look forward to 2019 to continue trending in the right direction on all fronts and creating new value for our shareholders as our company strives for higher goals.”

CONFERENCE CALL DETAILS:

Snipp management will host a conference call and live webcast for analysts and investors on Thursday, May 2, 2019 at 10:00AM Eastern Time (US) to discuss the Company’s financial results.

To listen to the live conference call, parties in the United States and Canada should dial 800-667-5617, access code 8500487. International parties should call +1 334-323-0505 using the same access code 8500487. Please dial in approximately 15 minutes prior to the start of the call.

A live and archived webcast of the conference call will be accessible on the “Investors” section of the Company’s website under “Presentations” at www.snipp.com. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software.

Visit the Snipp website at http://www.snipp.com/ for Snipp’s full suite of solutions and examples of Snipp programs.

Non-GAAP Measures
Snipp uses certain performance measures throughout this document that are not recognizable under Canadian generally accepted accounting principles or IFRS (“GAAP”). These performance measures include Gross Margin and EBITDA. Management believes that these measures provide supplemental financial information that is useful in the evaluation of the Company’s operations.

Investors should be cautioned, however, that these measures should not be construed as alternatives to measures determined in accordance with GAAP and IFRS as an indicator of Snipp’s performance. The Company’s method of calculating these measures may differ from that of other organizations, and accordingly, these may not be comparable.

EBITDA
Snipp defines earnings before interest, taxes, depreciation and amortization (“EBITDA”) as revenue minus operating expenses excluding non-cash operating expenses of stock-based compensation, depreciation and amortization (interest and taxes are not included in the Company’s operating expenses).

Gross Margin
Snipp defines Gross Margin as revenue less campaign infrastructure. The Company’s calculation of Gross Margin is not a financial measure that is recognized under GAAP. Investors should be cautioned that the Company’s defined Gross Margin should not be construed as an alternative measure to other measures determined in accordance with GAAP.

Bookings Backlog
Snipp defines Bookings Backlog as future revenue from existing customer contracts to be recognized in future quarters. Bookings get translated into revenues based on IFRS principles and the Bookings Backlog reflects how revenues in future quarters are steadily being booked today.

The Following are calculations of EBITDA:

The Following are calculations of Gross Margin: