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SYS-CON MEDIA Authors: Liz McMillan, Kevin Jackson, Peter Silva, Greg Wind, Glenn Rossman

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SoMedia Networks Files Financial Results for Q2 2014: Reports a 57% Increase in Quarter over Quarter Sales Following a 36% Increase in Q1 2014.

SoMedia Networks (TSX-V:VID), the pioneer of globally scalable cloud-based video production solutions, reported results for the three month period ending June 30, 2014.

The results for the three months ending June 30, 2014 reflect a 57% increase in sales over the previous quarter or 134% sales growth over the same period last year, which follows an increase of 36% in the first quarter of 2014. SoMedia continued to modify and improve its operations and focus on increasing market penetration of its Scalable Video solutions, including the development of a third sales channel, SoMedia Direct. The complete financial results for SoMedia are available at www.sedar.com.

Q2 2014 HIGHLIGHTS

  • Achieved record sales of $251,702, an increase of 57% over the previous quarter, and an increase of 134% from the year-ago quarter. This builds on an increase of 36% in the first quarter
  • Achieved year over year revenue growth of 139%, up 25% over the prior quarter
  • Average order size by repeat resellers increased by 214% over the year ago-quarter and up 28% over the prior quarter as a result of focusing on higher-value existing and corporate clients
  • Sales to existing resellers increased by 198% and by 65% to new resellers over the prior quarter

KEY PERFORMANCE INDICATORS

   

For the
quarter
ended June
30, 2014

 

For the
quarter ended
March 31,
2014

 

For the quarter

ended

December 31,
2013

 

 

For the

quarter ended

September 31,

2013

 

For the

quarter

ended June

30, 2013

 

For the

quarter

ended

March 31,

2013

 

Value of Orders   251,702   160,341   117,366   130,623   107,518   76,665
Average Order Value – Repeat Sale ($)   3,842   2,107   1,223   1,729   1,593   1,821
Average Order Value – Initial Sale ($)   2,848   2,033   764   739   796   1,143

The measures described in this table are not intended to be measures that should be regarded as an alternative to other financial operating performance measures prepared in accordance with IFRS. Those measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. They are provided to assist investors in determining the Company’s ability to generate profitability from its operations and to evaluate its financial performance. For further descriptions of these terms, please refer to either the Company’s Management’s Discussion and Analysis for the period or to the ‘Definition of Key Performance Indicators’ section at the conclusion of this document.

“We continue to expand our focus on providing video production solutions that emphasize our key competitive advantages of scale, volume and reach,” said George Fleming, CEO of SoMedia Networks. “As a result the Company is experiencing significant momentum and our sales and marketing initiatives have resulted in the Company's best quarter to date in terms of sales volume and revenue. The second quarter saw sales growth of 57% quarter over quarter after an increase of 36% in the first quarter. During the quarter revenues increased 25% from Q1 2014 and 139% over the year-ago quarter.”

“We are seeing strong demand across a variety of sectors as video content is embraced as an increasingly effective way to drive engagement by corporations. We believe our targeted sales and marketing initiatives focused on resellers and corporate accounts along with the expansion of SoMedia Direct integrations into new large SaaS marketing and business services platforms will drive accelerated growth going forward."

FINANCIAL REVIEW

The Company delivered higher revenues with lower costs as a direct result of adjusting to demand and reducing operating costs.

 

FINANCIAL PERFORMANCE

In Canadian Dollars ($)  

Six months ended June

30, 2014

(unaudited)

 

Year ended

December 31, 2013

(audited)

 

Year ended December 31,

2012

(audited)

Total Revenues   204,960   215,723   113,374
Employment expenses   1,376,661   3,082,868   2,142,833
Other operating expenses   866,078   2,196,597   861,430
Non-operating expenses   98,162   1,719,658   1,133,218
Comprehensive Loss for the Period   (2,135,941)   (6,783,395)   (4,024,107)
Loss per share (basic and diluted)1   (0.04)   (0.36)   (0.37)
Total Assets   583,390   658,460   563,595
Long term financial liabilities   -   -   2,767,726
Cash dividends per share   -   -   -

Note: (1) Reflects numbers after effecting the 4-for-1 Share Consolidation which was effective as of May 6, 2013.

At the end of the second quarter investor relations consultant Ryan Johnson resigned. The Company wishes to thank Mr. Johnson for his contribution to the Company.

About SoMedia Networks

SoMedia Networks, the creator of Scalable Video, has reengineered how businesses access video content creation, production and deployment. The cloud-based SoMedia Platform allows businesses, brands and media to easily order the production of custom video content at scale and volume, anywhere, on demand, with rapid turnaround, and at a fraction of current costs.

SoMedia provides Scalable Video as an integrated solution to corporate partners, as a resale solution through thousands of web marketing firms and directly to digital agencies and millions of SMBs across North America. To learn more visit: www.somedia.net.

DEFINITION OF KEY PERFORMANCE INDICATORS

Value of Sales: The dollar value of videos sold during the period. A video is considered sold when a client makes an order and provides a deposit. Revenue is not recognized until the video is completed and approved by the client.

Average Order Value-Repeat Sales: A repeat sale is a sale made to a client with one or more prior purchases. The “Average order value – repeat sales” is the total of all orders received from repeat clients in the quarter, divided by the number of unique orders made by these clients.

Average Order Value - New sales: A new sale is a sale made to a client with no prior purchase history. The “Average order value - new sales” is the total orders received from new clients in the quarter, divided by the number of unique orders made by these clients.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release includes forward-looking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered forward looking. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements. This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available

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