Science & Technology
Science and Technology
Science and Technology
Thu, April 2, 2009
Wed, April 1, 2009
Options Media Group: Options Media Group Announces Financial Results for 2008
BOCA RATON, FL--(Marketwire - April 1, 2009) - Options Media Group Holdings, Inc. (
Key Shareholder Achievements during the Fourth Quarter 2008
-- Options Media re-vamped the business model to focus on higher margin revenue streams; specifically email and SMS marketing and ESP business lines. -- Corporate expenses were reduced by over $150,000 per month by reducing management compensation, completing the integration of 1Touch Marketing, consolidating office space and redundant payroll, and leveraging the combined companies' buying power with vendors to gain more favorable pricing. -- The Company has added ten new sales team members resulting in the expansion of advertising agency relationships to increase sales in 2009. The sales force will sell the ESP platform, permission-based Email and SMS products, along with the Video Search Engine Optimization service, which was announced March 26th, 2009.
"Our innovative business model makes us confident about our financial projections for the upcoming year," stated Mr. Scott Frohman, CEO of Options Media. "While many companies offer just ESP service or just the direct and digital marketing services we offer both under one roof. This is a benefit to our clients in that they don't have to source different disconnected vendors, as Options Media can provide the total solution. We work as a cohesive unit to assure that individual programs are embarked upon to support and strengthen the overall ROI of a client's total marketing efforts."
Mr. Frohman continued, "As a company our multi-channel, multi-platform business opens up tremendous cross-selling and up-selling opportunities for every member of our sales staff. It has allowed us to capitalize on this market and this economy because we are poised to deliver advertising options to companies seeking to lessen brick and mortar expenditures and drive traffic to their web-based e-commerce sites. Additionally, we are in a position to help advertisers seeking to transition out of high-cost media such as TV and Print and give them an affordable and more effective means of prospecting for new customers as well as retaining existing customers with email, SMS and Video SEO."
2008 Fourth Quarter Financial Results
For the three months ended December 31, 2008, Options Media recognized net revenues of $2.4 million. For the three months ended December 31, 2008, ESP and email/SMS marketing accounted for 53% of our revenue. The majority of those revenues were derived from our ESP business, which offers customers an email delivery platform to create, send and track email campaigns.
Cost of revenues was $1.1 million for the three months ended December 31, 2008. Because we had limited operations in 2007 and launched our business on June 23, 2008, comparisons to 2007 are not meaningful. Our ESP, Email and SMS/Text messaging businesses carry a blended gross margin over 75%. In contrast, the lead generation business is approximately a 30% gross margin business. Going forward, OPMG is focused on growing the ESP, Email and SMS/Text messaging businesses.
Total operating expenses for the three months ended December 31, 2008 were $4.2 million. The majority of operating expenses were attributable to technology, salary, and commission based expenses and non-cash stock based compensation expenses.
Losses from operations totaled $2.8 million for the three months ended December 31, 2008. Non-cash items accounted for over $500,000.
We recorded a net loss of $2.6 million for the three months ended December 31, 2008. Net loss per share, based on 40.72 million shares, was $(0.06) for the fourth quarter 2008.
The balance sheet at December 31 had over $10.3 million in shareholder equity or $.25 per share, no long-term debt and no convertible or preferred shares outstanding. As of December 31, 2008, the fully diluted share count was 40.72 million.
"Management continues to focus on building a high margin revenue base," commented Mr. Frohman. "It's a fact of life that corporate advertising budgets are shifting. That's why we have an eye on the future of what advertising will become. We are set to help companies prospect for new customers as well as retain their existing customer-base with the most advanced forms of digital and internet marketing. Not many other companies are able to offer this degree of readiness and versatility."
Fiscal Year 2008 Results
For the year ended December 31, 2008, the Company posted revenue of $3.4 million. ESP and Email/SMS marketing accounted for 57% of 2008 revenue. The cost of revenues was $1.3M. Gross margins were 63% resulting in gross profit of $2.1 million.
Loss from operations was $3.6 million for the full fiscal year. Compensation, including non-cash compensation of $1.2 million, and related costs accounted for approximately $2.6 million of the total $5.7 million in operating expenses, or 46% in 2008. The Company believes its recent cost cutting initiatives will significantly decrease this percentage.
Option Media's net loss for the fiscal year 2008 was $3.4 million, or ($0.08) per fully diluted share.
The per-share calculations were based on fully diluted shares of 40,722,939 for the year ended December 31, 2008.
"We are very optimistic about 2009 as we ramp our Email/SMS marketing business and ESP business. 2008 was a launch year for Options Media, and 2009 should show strong progress based on a well thought out business plan and a very hard working staff."
Mr. Frohman concluded, "Options Media's technology has been greatly enhanced by the acquisition of 1Touch Marketing, offering our customers a more effective and complete solution. Our company continues to differentiate itself by carving a niche in the industry. We are unique to other ESP companies, such as Constant Contact, because we service only very large-volume mailers. In direct and digital marketing we are unique in the sense that many companies that should be our competitors are our customers, utilizing our data and services for permission-based email and SMS."
About Options Media Group
Options Media Group Holdings, Inc. is an email services provider for on-demand e-mail marketing to create, send, and track professional and permission-based e-mail marketing campaigns. Additionally, Options media provides precision direct marketing solutions including email marketing, SMS/mobile marketing, SMS/keyword marketing, custom lead generation and creative services Options Media provides clients with access to software, hardware, bandwidth, and exclusive domains and IP addresses, as well as the ability to upload and manage subscribers, and review and upload campaigns and track results for a 360-degree full-service customer marketing solution.
Safe Harbor
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act") including the prospects and potential for 2009 and anticipated 2009 cash flow. Additionally, words such as "seek," "intend," "believe," "plan," "estimate," "expect," "anticipate" and other similar expressions are forward-looking statements within the meaning of the Act. Some or all of the events or results anticipated by these forward-looking statements may not occur. Factors that could cause or contribute to such differences include economic issues relating to the current recession, potential advertising spending and potential consumer spending reductions, our ability to raise necessary working capital and the impact of competitive factors. Further information on Option Media Group's risk factors is contained in its filings with the Securities and Exchange Commission, including the Form 10-K filed on April 1, 2008. Options Media does not undertake any duty nor does it intend to update the results of these forward-looking statements.
Options Media Group Holdings, Inc. and Subsidiaries Consolidated Balance Sheets December 31, December 31, 2008 2007 ------------ ------------ ASSETS Current Assets: Cash $ 122,165 $ 47,245 Accounts receivable, net 472,139 - Prepaid expenses 46,841 - Other current assets 11,525 - ------------ ------------ Total Current Assets 652,670 47,245 Property and equipment, net 211,984 - Software, net 64,857 - Goodwill 11,107,784 - Intangible Assets, net 867,354 - Other assets 35,300 - ------------ ------------ Total assets $ 12,939,949 $ 47,245 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Bank overdraft $ 154 $ - Accounts payable 1,154,632 23,987 Accrued expenses 299,521 541 Notes payable, related parties 730,000 - Deferred revenue 82,609 - Obligations under capital leases 12,014 - Other current liabilities 253,335 - Due to related party 40,216 - ------------ ------------ Total Current Liabilities 2,572,481 24,528 ------------ ------------ Commitments and Contingencies (Note 11) Stockholders' Equity: 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, 58,239,999 and 30,398,148 issued and outstanding, at December 31, 2008 and December 31, 2007, respectively 58,240 30,398 Additional paid-in capital 13,859,659 60,852 Subscription receivable (45,000) - Accumulated deficit (3,505,431) (68,533) ------------ ------------ Total Stockholders' Equity 10,367,468 22,717 ------------ ------------ Total Liabilities and Stockholders' Equity $ 12,939,949 $ 47,245 ============ ============ Option Media Group Holdings, Inc. and Subsidiaries Consolidated Statements of Operations Period From June 27, 2007 For the Year (inception) Ended to December 31, December 31, 2008 2007 ------------ ------------ Net revenues $ 3,370,790 $ - Cost of revenues 1,308,753 - ------------ ------------ Gross profit 2,062,037 - ------------ ------------ Operating expenses: Server hosting and technology services 573,432 - Compensation and related cost 2,611,622 - Commissions 397,756 - Advertising 84,419 - Rent 75,975 - Bad debt 136,451 - Loss on disposal of assets 36,585 - Impairment of mineral property cost - 16,000 Other general and administrative 1,764,113 52,533 ------------ ------------ Total operating expenses 5,680,353 68,533 ------------ ------------ Loss from operations (3,618,316) (68,533) Other income (expense): Interest income 2,363 - Interest expense (34,542) - ------------ ------------ Loss before income tax (3,650,495) (68,533) Income tax benefit 213,597 - ------------ ------------ Net Loss $ (3,436,898) $ (68,533) ============ ============ Net Loss Per Share - Basic and Diluted $ (0.08) $ - ============ ============ Weighted Average Shares Outstanding - Basic and Diluted 40,722,939 27,848,188 ============ ============ Options Media Group Holdings, Inc. and Subsidiaries Consolidated Statements of Cash Flows Period from June 27, 2007 (inception) Year Ended to December 31, December 31, 2008 2007 ------------ ------------ Operating Activities: Net Income (Loss) $ (3,436,898) $ (68,533) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Stock Granted For Services To Non-Employees 765,000 - Stock Granted For Services To Directors 150,000 - Stock Granted For Services To Employees 32,650 - Stock Options Granted For Services 252,689 - Donated Services 7,209 7,500 Depreciation 42,584 - Loss On Disposal Of Assets 36,585 - Amortization Of Intangibles 289,961 - Impairment Of Intangibles 283,462 16,000 Income tax benefit (213,597) - Bad Debt 136,451 - Changes in operating assets and liabilities: Accounts Receivable 110,033 - Prepaids (43,973) - Other Current Assets (236) - Accounts Payable 713,563 23,987 Accrued Expenses (52,662) - Deferred Revenues (50,450) - Due To Related Parties 40,216 541 Other Current Liabilities 2,178 - ------------ ------------ Net Cash Used In Operations (935,235) (20,505) Investing Activities Acquisition Of Mineral Property - (16,000) Purchase Of Property And Equipment (46,166) - Acquisition Of Subsidiaries, Net Of Cash Acquired (4,653,561) - ------------ ------------ Net Cash Used In Investing Activities (4,699,727) (16,000) Financing Activities Bank Overdraft 154 - Proceeds From Sale Of Common Stock, net 5,824,101 50,000 Proceeds From Collection of Subscription receivable - 33,750 Proceeds From Loans 1,455,000 - Repayments Of Loans (1,525,000) - Principal Payments On Capital Lease Obligations (44,373) - ------------ ------------ Net Cash Provided by Financing Activities 5,709,882 83,750 ------------ ------------ Net Increase (Decrease) In Cash 74,920 47,245 Cash Beginning Of Period 47,245 - ------------ ------------ Cash End Of Period $ 122,165 $ 47,245 ============ ============ Supplemental Disclosure of Cash Flow Information: Cash Paid For Interest $ 6,609 $ - ============ ============ Cash Paid For Taxes $ - $ - ============ ============ Supplemental Disclosure Of Non-Cash Investing and Financing Activities: Acquisition of Options Acquisition Sub, Inc. with common stock and note payable $ 4,750,000 $ - ============ ============ Acquisition of 1Touch Marketing, Inc. with common stock $ 3,000,000 $ - ============ ============ Equipment purchase financed $ 52,429 $ - ============ ============
