Augme Begins to Ramp the Top-Line
Ken Nagy, CFA
On January 9, 2012,
Augme Technologies, Inc. (
AUGT
)
, the provider of strategic services and mobile marketing
technology to leading consumer and healthcare brands, reported
financial results for its fiscal 2011 third quarter and nine
months, ended November 30, 2011.
A solid third quarter resulted in an over 418 percent year over
year and 244 percent sequential increase in sales, with revenue
expanding $3.571 million to $4.424 million from $853,169 for the
three months ended November 30, 2010.
Augme's strength in its third quarter revenues was primarily driven
by combined revenues of Augme, Hipcricket and JAGTAG, as well as
new business momentum together with the Company's 95% customer
retention rate.
Along the same lines, the Company powered nearly 16,000 campaigns
in the quarter and executed 136 new contracts which included 30 new
customers, 78 up sales to existing customers and 28 license
renewals to existing customers.
Still, Augme reported a net loss of $10.548 million for the third
quarter of fiscal 2011, with net loss increasing $7.931 million
from a net loss of $2.616 million during the third quarter of 2010.
The increase in net loss was primarily a result of increased
selling, general and administrative expense offset by an increase
in gross margin.
The increase in selling, general and administrative expense
includes the added expenses of JAGTAG and Hipcricket as well as
transition and consolidation expenses, which the Company
anticipates will begin to taper off during the fourth quarter.
Gross margin jumped from 57.7 percent in the third quarter of 2010
to 68.3 percent for the three months ended November 30, 2011.
The improvement in gross margin was due to the Company's current
mix of business and cost efficiencies.
It is important to note that during the third quarter, Augme's new
business momentum and customer retention rate resulted in new order
bookings of $5.3 million as well as a quarter end backlog of
approximately $13.2 million.
From this backlog, the Company expects to recognize $2.7 million of
revenues in fourth quarter and $7 million in fiscal 2013.
Similarly, during the third quarter, two patents were issued from
United States Patent and Trademark Office to Augme and a $20.2
million common stock offering was completed by the Company.
The Company intends on using a portion of capital raised to enhance
its capabilities and balance near term and longer term
opportunities to drive revenue growth. Augme expects the resources
will fully fund the Company to execute its growth plans to reach
profitability.
Based on the weighted average number of basic and diluted common
shares of 84.758 million shares, basic and diluted net loss per
share resulted in a net loss of $0.12 per basic and diluted share
during the third quarter of fiscal 2011. This compared to a
basic and diluted net loss per share of $0.04 on a weighted average
number of basic and diluted shares of 60.412 million shares during
the three months ended November 30, 2010.
For the nine months ended November 30, 2011, year over year
revenues improved by roughly 272 percent or $5.059 million to
$6.917 million from $1.858 million for the comparable nine months
of 2010.
Still, net loss for the nine months increased by $10.653 million
year over year to a net loss of $19.919 million for the nine months
ended November 30, 2011. This compares to a net loss of $9.265
million for the comparable nine months of 2010.
The increase in net loss was primarily a result of the amortization
of intangibles related to the acquisitions or Hipcricket and JAGTAG
offset by improved gross margin.
Gross margin for the nine months increased to 68.5 percent compared
to gross margin of 54.5 percent for the nine months ended November
30, 2010.
Here again, the improvement in gross margin was due to the
Company's current mix of business and cost efficiencies.
Based on the weighted average number of basic and diluted common
shares of 70.422 million shares, basic and diluted net loss per
share resulted in a net loss of $0.28 per basic and diluted share
during the nine months ended November 30, 2011. This compared
to a basic and diluted net loss per share of $0.16 on a weighted
average number of basic and diluted shares of 58.549 million shares
during the nine months ended November 30, 2010.
As of November 30, 2011, Augme had $16.947 million in cash and
equivalents and a working capital deficit of $8.031 million.
This compares to $11.182 million in cash and equivalents and a
working capital surplus of $11.409 million as of February 28, 2011.
Still, The Company's strategy is to drive longer term contracts for
all of its products and services and going forward its focus will
be on acquiring new customers and growing revenue per customer.
Additionally, Augme remains confident in its ability to monetize
the Company's intellectual property portfolio through litigation
and licensing activities.
As a result, Augme anticipates revenues to be approximately $13.0
million for its fiscal year 2012, ending February 29, 2012.
Along the same lines, moving forward, the Company expects to
continue its reporting of sequentially increased revenues with
large enterprise customers as a result of its position within the
mobile marketing industry due to the completed integration of
JAGTAG and Hipcricket.
Likewise, it's important to note that Augme anticipates positive
cash flow during its fiscal year 2013.
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