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JERSEY CITY, N.J.--([ BUSINESS WIRE ])--Single Touch Systems Inc. (OTC BB: SITO), a technology based mobile media solutions provider that enables retailers, advertisers and brands to easily connect with customers through its patented technologies, reported results for its fiscal second quarter ended March 31, 2012.

"We view our ability to broaden our core messaging platform to include sponsorship and advertising as both a competitive advantage as well as a tremendous opportunity to expand our reach into multiple industry verticals, thereby delivering improved results to shareholders."

Q2 FY 2012 Operational Update

• (February 22, 2012) Filed a patent infringement lawsuit against Zoove Corporation alleging that Zoove has knowingly and willfully infringed upon Single Touch patents that protect its Mobile/Abbreviated Dial Code (MDC/ADC) Platform technology. In its complaint, Single Touch seeks an injunction requiring Zoove to cease using Single Touchas patented technology, as well as compensatory and enhanced damages from Zoove.
• (February 23, 2012) Formalized its corporate governance platform, including the establishment of a Governance and Nominating Committee, Audit Committee and Compensation Committee. Each committee is chaired by an independent member of its Board of Directors.
• (March 7, 2012) Successfully completed a $2.0 million capital raise from private investors. Along with new investors, existing investors also participated in the transaction. Proceeds are being used for general corporate purposes, including sales, marketing and product development.
• (March 22, 2012) Named ScriptRelief as sponsor and joint marketing partner for its mobile healthcare and retail pharmacy channels. Through the agreement, Single Touch will deliver a series of Short Message Service (SMS) campaigns over the coming year whereby ScriptRelief will be able to capitalize on the opportunity to sponsor proprietary acome here, be therea reminder messaging related to health and wellness appointment reminders as well as compliance reminders at leading U.S. pharmacy retailers.
• (April, 10, 2012) Signed a Pre- Contract Authorization with Universal Music Group Distribution Corp. (UMG), to serve as an additional channel sponsor of premium messaging to its client base. Single Touch is in various stages of discussions with its retail partners to determine appropriate sponsorship opportunities for UMG.

For the fiscal second quarter ended March 31, 2012, revenue increased approximately 51% to $1.55 million, compared to revenue of $1.03 million for the same period in 2011. The increase in revenue, all of which was organic, was directly attributable to continuing adoption of Single Touchas mobile platform, new programs to support existing client relationships and additional programs for new client relationships.

For the second fiscal quarter ended March 31, 2012, year-over-year monthly message volume increased favorably; January was +57.3%, February was +60.9% and March was +44.8%. Total quarterly customer message volume for Q2 FY12 increased 53.9% compared to the same period last year. These year-over-year increases demonstrate the continued growth of the Companyas core messaging platform. Excluding the expected holiday spike in November and December 2011, message volume in March 2012 was 13.7% higher than in October 2011, further reflecting continued momentum of anormalizeda message volume growth.

aDuring the quarter, we continued to gain traction through our existing retail channels. With the addition of sponsored messaging through channel partners within our AT&T client base, I am confident we can further penetrate the retail and consumer marketplace with highly-targeted mobile marketing and advertising campaigns,a said James Orsini, Chief Executive Officer of Single Touch. aWe view our ability to broaden our core messaging platform to include sponsorship and advertising as both a competitive advantage as well as a tremendous opportunity to expand our reach into multiple industry verticals, thereby delivering improved results to shareholders.a

Mr. Orsini concluded, aDuring the quarter, we also stepped up our efforts to defend and protect our intellectual property portfolio. We believe that tremendous value exists within our IP portfolio, and we are committed to asserting our rights and monetizing these assets.a

During the quarter, gross margins increased to 58%, up 5% compared to Q1 FY2012, and up 2% compared to the same period last year. This increase is due to a combination of premium services (i.e. set-up fees and sponsored messaging) along with cost containment initiatives.

Loss from operations for the period ended March 31, 2012, excluding stock-based compensation and depreciation and amortization (adjusted EBIDTA) were flat at approximately ($300,000) compared to a loss of ($260,000) for the same quarter last year. The slight increase reflects higher fixed costs incurred during the quarter necessary to support higher annual revenues.

Although Adjusted EBITDA is not a measure in accordance with U.S. generally accepted accounting principles (aGAAPa), the Company uses Adjusted EBITDA to evaluate the performance of its underlying business and believes it is a useful tool for that purpose. Please refer to aReconciliation of Non-GAAP Measuresa below.

The net loss for the quarter ended March 31, 2012 was ($0.7) million compared to a loss of ($0.4) million for the same period last year. The increase in net loss during the quarter was primarily attributable to higher royalties and applications costs commensurate with supporting increased revenue, as well as higher compensation costs reflecting the increased headcount necessary to support the business and operational maturation.

As of March 31, 2012, Single Touch had cash and cash equivalents of $1.1 million compared to $0.5 million at the beginning of the fiscal year. During the period, the Company raised $2.0 million to through the issuance of convertible debt and warrants. Cash used in operations during the six-month period was $1.1 million. Additionally, the Company invested $0.3 million in CapEx.

About Single Touch Systems Inc.

Single Touch Systems Inc. (SITO) is a technology based mobile solutions provider serving businesses, advertisers and brands. Through patented technologies and a modular, adaptable platform, SITOas multi-channel messaging gateway enables marketers to reach consumers on all types of connected devices, with information that engages interest, drives transactions and strengthens relationships and loyalty.

For more information about Single Touch Systems Inc visit: [ www.singletouch.net ]

Safe Harbor Statement

This news release contains forward-looking statements that involve risks and uncertainties and reflect Single Touchas judgment as of the date of this release. These statements include those regarding strategy, growth and future operations. Actual events or results may differ from Single Touchas expectations. The risks and uncertainties include reliance on brand owners and wireless carriers, the possible need for additional capital, as well as other risks identified in Single Touchas most recent Form 10-K filing with the SEC. Single Touch disclaims any intent or obligation to update these forward-looking statements beyond the date of this press release, except as may be required by law.