Snap Interactive Reports Results For The Quarter Ended March 31, 2014

May 6, 2014

NEW YORK, May 6, 2014 /PRNewswire/ -- Snap Interactive, Inc. ("SNAP," the "Company," "we," "our" or "us") (OTCQB: STVI), a leading social dating developer, today announced financial and operational results for the quarter ended March 31, 2014.

On a sequential basis, total revenues for the first quarter of 2014 increased 10% to $3.3 million from $3.0 million for the fourth quarter of 2013;
On a sequential basis, bookings for the first quarter of 2014 increased 18% to $3.4 million from $2.9 million for the fourth quarter of 2013;
Total revenues decreased 5% to $3.3 million for the first quarter of 2014 from $3.5 million for the comparable period in 2013;
Quarterly bookings increased 14% to $3.4 million for the first quarter of 2014 from $3.0 million for the comparable period in 2013;
Net loss was $0.9 million, or $0.02 per basic and diluted common share for the first quarter of 2014 as compared with net loss of $0.2 million, or $0.00 per basic and diluted common share, for the comparable period in 2013;
Available sources of liquidity (including cash and cash equivalents and restricted cash) totaled $0.8 million at March 31, 2014, supplemented by additional financing that occurred subsequent to period end; and
Active subscriber count increased 16% in the first quarter of 2014 from approximately 77,700 as of December 31, 2013 to approximately 90,000 as of March 31, 2014, and increased further to approximately 94,000 as of May 5, 2014.

Financial Highlights

Current period compared to prior period:
	Three Months Ended
GAAP Results	March 31, 2014		December 31, 2013		Change
Total revenues	$	3,292,353	$	2,998,566	10	%
Advertising and marketing expense	$	1,472,210	$	960,954	53	%
Deferred subscription revenue (at period end)	$	2,087,909	$	1,826,771	14	%
Net loss	$	(933,094)	$	(669,117)	40	%
Net cash used in operating activities	$	(464,520)	$	(423,983)	10	%

Non-GAAP Results
Bookings	$	3,400,158	$	2,878,500	18	%
Overall liquidity (at period end)	$	818,196	$	1,417,667	(42)	%

Current period compared with same period prior year:
	Three Months Ended
GAAP Results	March 31, 2014		March 31, 2013		Change
Total revenues	$	3,292,353	$	3,469,560	(5)	%
Advertising and marketing expense	$	1,472,210	$	1,131,680	30	%
Deferred subscription revenue (at period end)	$	2,087,909	$	2,067,853	1	%
Net loss	$	(933,094)	$	(155,071)	502	%
Net cash used in operating activities	$	(464,520)	$	(1,171,845)	(60)	%

Non-GAAP Results
Bookings	$	3,400,158	$	2,971,515	14	%
Overall liquidity (at period end)	$	818,196	$	4,469,497	(82)	%

Management Commentary

Growth

AYI.com showed growth in key areas during the first quarter of 2014, including:

Revenues - On a sequential basis, total revenues for the first quarter of 2014 increased 10% from the fourth quarter of 2013, marking the second consecutive quarterly increase in revenues;
Active subscribers - Active subscribers increased 16% during the first quarter of 2014, which was the second consecutive fiscal quarterly increase in active subscribers, and the highest subscriber count since March 2013; and
New subscription transactions - New subscription transactions increased 44% in the first quarter of 2014 as compared to the first quarter of 2013, and 30% on a sequential basis for the first quarter of 2014 as compared to the fourth quarter of 2013.

SNAP's Chief Executive Officer, Clifford Lerner, commented, "In the first quarter of 2014 we accomplished several goals: reducing expenses, improving user engagement, and continuing to grow our active subscriber base. Strong growth in subscription transactions will result in revenue recognition in the second quarter of 2014 and the remainder of 2014, as indicated by the 14% growth in bookings in the first quarter of 2014 as compared to the first quarter of 2013 and 18% on a sequential basis as compared to the fourth quarter of 2013."

Liquidity and Cash Flow

In April 2014, we entered into Amendment No. 1 to our Business Development Agreement with Match.com, LLC, which extended the term an additional 90 days, and separately issued an unsecured promissory note, collectively resulting in an increase of $600,000 cash;
Expense management – Employee headcount decreased 12% from 42 employees at December 31, 2013 to 37 employees at March 31, 2014, and we continue to manage expenses; and
Break-even cash flow – We are targeting break-even cash flow for the third quarter of 2014.

SNAP's Chief Operating Officer, Alex Harrington, added, "With $600,000 of additional cash originating from the financing and Match.com, LLC renewal, events that occurred subsequent to the end of the first quarter of 2014, we believe we presently have sufficient cash on hand to operate the company through the third quarter of 2014, at which time we expect to break-even on cash flow from operations. However, we plan to explore growth capital fundraising opportunistically."

About Snap Interactive, Inc.

Snap Interactive, Inc. develops, owns and operates a social dating application for social networking websites and mobile platforms. SNAP's flagship brand, AYI.com is one of the largest social and mobile dating applications on the Internet and offers a completely integrated Facebook, iPhone, Android and Web dating application. AYI.com's mission is to improve the online dating experience of meeting new people by integrating a user's friends and interests to enable more meaningful connections. For more information on SNAP, please visit http://www.snap-interactive.com/, its online dating blog at http://www.ayi.com/dating-blog, on Facebook at http://www.facebook.com/SnapInteractiveInc and on Twitter at @SNAPInteractive.

The contents of our websites are not part of this press release, and you should not consider the contents of these websites in making an investment decision with respect to our common stock.

Facebook® is a registered trademark of Facebook, Inc. iPhone® is a registered trademark of Apple Inc. Android® is a registered trademark of Google Inc. AYI.com® is a registered trademark of Snap Interactive, Inc.

PR Contact:
Joanna Barber
[email protected]
212-967-5120 ext. 111

IR Contact:
[email protected]

Stephen Hart
Hayden IR
[email protected]
917-658-7878

Forward-Looking Statements

This press release contains "forward-looking statements" made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as "anticipate," "assume," "believe," "estimate," "expect," "goal," "intend," "plan," "project," "seek," "target," and variations of such words and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to certain risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed by the forward-looking statements, including, but not limited to, the following: general economic, industry and market sector conditions; the Company's future growth and the ability to obtain additional financing to implement the Company's growth strategy; the ability to anticipate and respond to changing user and industry trends and preferences; the intense competition in the social dating marketplace; the ability to establish and maintain brand recognition; the ability to support and derive revenue from our application for mobile platforms; the success of new AYI features and branding on user engagement and conversion rates; the effect of the move of the Company's data center on operational flexibility, cost savings, development and production; and circumstances that could disrupt the functioning of the Company's application and websites. In evaluating these statements, you should carefully consider these risks and uncertainties and those described under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other Securities and Exchange Commission filings.

All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.

SNAP INTERACTIVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,		December 31,
	2014		2013
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	432,869	$	927,352
Restricted cash		385,327		490,315
Credit card holdback receivable		310,313		232,264
Accounts receivable, net of allowances and reserves of $41,402 and $37,850, respectively		321,852		385,370
Prepaid expense and other current assets		75,774		114,863
Total current assets		1,526,135		2,150,164
Fixed assets and intangible assets, net		482,929		522,462
Notes receivable		171,799		170,566
Investments		125,000		100,000
Total assets	$	2,305,863	$	2,943,192

Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable		1,219,823		861,730
Accrued expenses and other current liabilities		360,866		671,142
Deferred subscription revenue		2,087,909		1,826,771
Deferred advertising revenue		146,667		300,000
Total current liabilities		3,815,265		3,659,643
Long term deferred rent		-		12,058
Warrant liability		70,275		140,550
Total liabilities		3,885,540		3,812,251
Stockholders' equity (deficit):
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding		-		-
Common Stock, $0.001 par value, 100,000,000 shares authorized, 49,507,826 and 49,987,826 shares issued, respectively, and 39,157,826 and 39,132,826 shares outstanding, respectively		39,158		39,133
Additional paid-in capital		11,035,656		10,813,205
Accumulated deficit		(12,654,491)		(11,721,397)
Total stockholders' equity (deficit)		(1,579,677)		(869,059)
Total liabilities and stockholders' equity (deficit)	$	2,305,863	$	2,943,192

SNAP INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended March 31,
	2014		2013
Revenues:
Subscription revenue	$	3,139,020	$	3,427,891
Advertising revenue		153,333		41,669
Total revenues		3,292,353		3,469,560
Costs and expenses:
Programming, hosting and technology expense		942,411		1,385,391
Compensation expense		769,403		797,070
Professional fees		250,155		267,104
Advertising and marketing expense		1,472,210		1,131,680
General and administrative expense		863,417		1,146,026
Total costs and expenses		4,297,596		4,727,271
Loss from operations		(1,005,243)		(1,257,711)
Interest income, net		1,874		1,665
Gain on change in fair value of warrants		70,275		1,100,975
Loss before provision for income taxes		(933,094)		(155,071)
Provision for income taxes		-		-
Net loss	$	(933,094)	$	(155,071)

Net loss per common share:
Basic and diluted	$	(0.02)	$	(0.00)
Weighted average number of common shares used in calculating net loss per common share:
Basic and diluted		39,142,548		38,908,382

SNAP INTERACTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended March 31,
	2014		2013
Cash flows from operating activities:
Net loss	$	(933,094)	$	(155,071)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		43,263		42,033
Stock-based compensation expense		222,476		74,947
Gain on change in fair value of warrants		(70,275)		(1,100,975)
Changes in operating assets and liabilities:
Decrease (increase) in restricted cash		104,988		(200,211)
Decrease (increase) in credit card holdback receivable		(78,049)		43,367
Decrease in accounts receivable		63,518		12,709
Decrease in prepaid expenses and other current assets		39,089		42,210
Increase in accounts payables, accrued expenses and other current Liabilities		46,002		532,815
Decrease in deferred rent		(10,243)		(7,293)
Increase (decrease) in deferred subscription revenue		261,138		(456,376)
Decrease in deferred advertising revenue		(153,333)		-
Net cash used in operating activities		(464,520)		(1,171,845)
Cash flows from investing activities:
Purchase of fixed assets		(3,730)		(20,296)
Purchase of non-marketable equity securities		(25,000)		-
Issuance of notes receivable issued to employees and accrued interest		(1,233)		(1,169)
Net cash used in investing activities		(29,963)		(21,465)
Cash flows from financing activities:
Net cash provided by financing activities		-		-
Decrease in cash and cash equivalents		(494,483)		(1,193,310)
Balance of cash and cash equivalents at beginning of period		927,352		5,357,596
Balance of cash and cash equivalents at end of period	$	432,869	$	4,164,286

Supplemental disclosure of cash flow information:
AYI.com domain name purchase in exchange for 100,000 shares of common stock	$	-	$	100,000

SNAP INTERACTIVE, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(Unaudited)

	Three Months Ended
	March 31, 2014		March 31, 2013		December 31, 2013
Reconciliation of Subscription Revenue to Bookings
Subscription revenue	$	3,139,020	$	3,427,891	$	2,994,496
Change in deferred subscription revenue		261,138		(456,376)		(115,996)
Bookings	$	3,400,158	$	2,971,515	$	2,878,500


	March 31, 2014		March 31, 2013		December 31, 2013
Reconciliation of Cash and Cash Equivalents to Overall Liquidity (at period end)
Cash and cash equivalents	$	432,869	$	4,164,286	$	927,352
Restricted cash		385,327		305,211		490,315
Overall liquidity	$	818,196	$	4,469,497	$	1,417,667

Non-GAAP Financial Measures

We have provided in this release non-GAAP financial information including bookings and overall liquidity to supplement the consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Management uses these non-GAAP financial measures internally in analyzing our financial results to assess operational performance and to determine our future capital requirements. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use such information to help assess the health of our business.

Some limitations of bookings and overall liquidity as financial measures include that:

Bookings does not reflect that we defer and recognize revenue from subscription fees and micro-transactions over the length of the subscription term;
Overall liquidity does not reflect the Company's ability to convert restricted cash into cash and cash equivalents.
Other companies, including companies in our industry, may calculate bookings and overall liquidity differently or choose not to calculate bookings and overall liquidity at all, which reduces their usefulness as comparative measures; and

Because of these limitations, you should consider bookings and overall liquidity along with other financial performance measures, including total revenues, deferred revenue, net income (loss), cash and cash equivalents, restricted cash, net cash used in operating activities and our financial results presented in accordance with GAAP.

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SOURCE Snap Interactive, Inc.