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Lenco Mobile, Inc. Reports Third Quarter 2012 Results

Revenues up 51% over Q3 2011
By PR Newswire
Article Rating:
November 19, 2012 05:25 PM EST
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 480

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
chris.dukelow@helloarcher.com 
+1.206.419.1975

SOURCE Lenco Mobile, Inc.

Published November 19, 2012 – Reads 480
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