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Lenco Mobile, Inc. Reports Third Quarter 2012 Results

Revenues up 51% over Q3 2011

SEATTLE, Nov. 19, 2012 /PRNewswire/ -- Lenco Mobile, Inc. (OTCQB: LNCM), a global provider of proprietary mobile messaging and mobile web solutions, announced results for the quarter ended September 30, 2012. Lenco reported revenues of $4.2 million, an increase of 51% from the third quarter of 2011.  

"We remain focused on completing the integration of iLoop Mobile and on implementing our global business strategy to provide a broad set of mobile solutions to large multinational entities.  Our third quarter results reflect those efforts," said Mathew Harris, CEO of Lenco.  "We see broad acceptance of our rich media MMS messaging solutions for both marketing and business process initiatives.  Those solutions have become key competitive differentiators for us and we expect that to continue to be important across our target markets," continued Harris.

Third Quarter Review

  • Revenue increased 51% year-over-year to $4.2 million.
  • Gross profit increased 37% year-over-year to $2.4 million.
  • Operating expenses increased 11% year-over-year to $4.6 million.  The increase was primarily due to increased sales, marketing and development expenses offset by a decrease in general and administrative costs.

"We're pleased with our progress and will continue to focus on execution in all aspects of the business as we grow both domestically and internationally," concluded Harris.

Balance Sheet
As of September 30, 2012 the Company had cash and cash-equivalents of approximately $0.2 million and a net working capital deficit of $11.1 million. Cash used in operations during the nine months ended September 30, 2012 totaled $6.6 million.

 

Lenco Mobile Inc.

Condensed Consolidated Balance Sheets

(unaudited)



As of




September 30, 2012



December 31, 2011




(In thousands, except share data)


ASSETS




Current assets:









Cash and cash equivalents


$

153



$

3,098


Accounts receivable, net of allowance of $113 and $99, respectively



3,328




1,680


Other current assets



303




383


Income taxes receivable






356


Total current assets



3,784




5,517











Property and equipment, net



382




464











Other noncurrent assets:









Intangible assets - goodwill



24,184




24,200


Intangible assets - other, net



7,802




9,176


Other noncurrent assets



26




31


Total other noncurrent assets



32,012




33,407











Total assets


$

36,178



$

39,388











LIABILITIES AND SHAREHOLDERS' EQUITY









Current liabilities:









    Accounts payable and accrued expenses


$

6,394



$

6,059


    Income taxes payable



94





    Deferred revenue



202




711


    Retention bonus



3,313




4,121


    Preferred dividend payable



2,200




1,267


Current portion of long-term obligations, (convertible debt portion of $260, and $1,626, respectively)



2,720




4,998


Total current liabilities



14,923




17,156











Long-term obligations, less current portion, net of debt discount cost (of $1,202, and $0.00, respectively)



5,755




1,791


Total liabilities



20,678




18,947




















Shareholders' equity:









Preferred Stock, Series A 1,000,000 shares authorized, $.001 par value, 171,412 and 161,752 shares issued and outstanding at September 30, 2012 and at December 31, 2011, respectively



0




0


Preferred Stock, Series B1 1,000,000 shares authorized, $.001 par value, 87,717 and 87,717 shares issued and outstanding at September 30, 2012 and at December 31, 2011, respectively



0




0


Preferred Stock, Series B2 1,000,000 shares authorized, $.001 par value, 58,131 and 58,131 shares issued and outstanding at September 30, 2012 and at December 31, 2011, respectively



0




0


Common stock, 250,000,000 shares authorized, $.001 par value, 80,478,648 and 81,621,978 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively.



82




82


    Additional paid in capital



90,367




82,959


    Accumulated other comprehensive income



(147)




(2)


     Accumulated deficit



(74,503)




(62,327)


Treasury stock, at cost, 1,400,000 and 266,667 shares, respectively



(299)




(67)


Total Lenco Mobile Inc. shareholders' equity



15,500




20,645


Noncontrolling deficit






(204)


Total equity



15,500




20,441











Total liabilities and shareholders' equity


$

36,178



$

39,388


 

Lenco Mobile Inc.


Condensed Consolidated Statements of Operations


(unaudited)











Three Months Ended September 30,



Nine Months Ended September 30,




2012



2011



2012



2011




(In thousands, except share data)


Revenue


$

4,177



$

2,759



$

12,471



$

7,206


Cost of sales



1,747




981




5,086




2,251


Gross profit



2,430




1,778




7,385




4,955



















Operating expense:

















Sales and marketing



1,120




718




3,598




2,564


General and administrative



1,728




2,021




5,247




5,572


Research and development



1,358




165




4,018




800


Depreciation and amortization



429




356




1,395




1,019


Impairment loss






925







925


Total operating expense



4,635




4,185




14,258




10,880



















Loss from operations



(2,205)




(2,407)




(6,873)




(5,925)



















Other income (expense):

















Interest expense, net



(675)




(7)




(883)




(27)


Other income, net






60




566




66


Total other income (expense)



(675)




53




(317)




39



















Loss from operations before income taxes



(2,880)




(2,354)




(7,190)




(5,886)



















Provision for (benefit from) income taxes



(2)




139




107




167


Loss from continuing operations



(2,878)




(2,493)




(7,297)




(6,053)



















Loss from discontinued operations






(29,909)







(33,496)


Gain on contingent consideration of discontinued operations












12,328


Net loss



(2,878)




(32,402)




(7,297)




(27,221)



















Net loss or income attributable to noncontrolling interest






68




(204)




240


Net loss attributable to Lenco Mobile Inc.



(2,878)




(32,334)




(7,501)




(26,981)



















Preferred stock dividends



(290)




(172)




(846)




(502)


Series A Preferred Stock accretion of beneficial conversion feature



(1,132)




(1,341)




(3,814)




(4,008)



















Net loss attributable to common stockholders


$

(4,300)



$

(33,847)



$

(12,161)



$

(31,491)



















Basic and diluted net loss per share applicable to common stockholders

















Continuing operations


$

(0.05)



$

(0.04)



$

(0.15)



$

(0.09)


Discontinued operations


$



$

(0.42)



$



$

(0.30)


Net loss per share applicable to common stockholders


$

(0.05)



$

(0.48)



$

(0.15)



$

(0.44)



















Weighted average shares used in per share calculation - basic and diluted



80,544,300




71,145,659




80,563,250




71,145,659


 

ABOUT LENCO MOBILE (OTCQB: LNCM)
In December 2011, iLoop Mobile and Lenco Mobile merged to form a global mobile technology and services firm. This powerful union gives the company the expertise and technology to support customers in developing and launching large scale mobile initiatives.  Lenco offers unique high performance MMS capabilities along with SMS, Mobile Web, Mobile Social Integration, International Services, Carrier Products, and a broad range of vertical specific solutions. The combination of expertise and leading-edge mobile technology has the potential to create a global leader with unmatched scale, reach, and capabilities. In June 2012, the combined companies began the process of rebranding under a unified name, Archer. For more information about Lenco Mobile please visit www.helloarcher.com.

Forward-Looking Statements Disclosure 
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ significantly from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to competition, management of growth, new products, services and technologies, potential fluctuations in operating results, international expansion, outcomes of legal proceedings and claims, seasonality, commercial agreements, acquisitions and strategic transactions, foreign exchange rates, system interruption, government regulation and taxation, payments and fraud. More information about factors that potentially could affect Lenco's business and financial results is included under the heading "Risk Factors"  in Lenco's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011 and subsequent filings.  Except as may be required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

Information on Corporate Web Site
We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.  Such disclosures will be included on our website in the 'Investor Relations' sections.  Accordingly, investors should monitor such portions of our website, in addition to following our press releases and SEC filings.

For further information contact:

Christopher Dukelow, Chief Financial Officer
[email protected] 
+1.206.419.1975

SOURCE Lenco Mobile, Inc.

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