- Published: 02 March 2012
- Written by Editor
Quepasa Corporation Reports Record Fourth Quarter and Full Year 2011 Results
Quepasa Corporation (AMEX: QPSA - News), the public market leader for social discovery and owner of North-American platform myYearbook and Latin-American platform Quepasa, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2011.
Record 2011 revenue of $11.9 million, up 96% year-over-year
Combined 2011 revenue of $36.8 million, a non-GAAP financial measure
Record 4Q revenue of $6.3 million, up 240% year-over-year
Combined 4Q revenue of $9.8 million, a non-GAAP financial measure
Completion of myYearbook merger creates the public-market leader in social discovery
Record visits, page views, and mobile traffic
"We are pleased to share the Quepasa - myYearbook consolidated financial results for the first time," commented CEO John Abbott. "The myYearbook merger was an important milestone for us as we became the largest publicly traded social discovery pure play. Quepasa is well positioned to capitalize on this leadership position to build the leading social network for meeting new people. In addition to the financial benefits of the merger, as reflected by our significant growth in revenue, we are looking forward to enhancing our growth trajectory in the upcoming quarters by offering the myYearbook web and mobile products to our Latin American user base."
On November 10, 2011, Quepasa Corporation and Insider Guides, Inc., owner of social network myYearbook, merged. The fourth quarter and fiscal year GAAP financial results for Quepasa Corporation reflect contributions from myYearbook from the date of the merger. See Use of Non-GAAP Financial Information below with respect to the presentation and use of non-GAAP information.
Fourth Quarter 2011 Financial Highlights
Revenue: Quepasa revenue for the fourth quarter, which included the benefit of just over seven weeks of contributions from myYearbook, was $6.3 million, up 240% from the $1.9 million recorded in the same period in 2010.
Net Loss: Quepasa net loss allocable to common shareholders for the fourth quarter was $5.5 million or $0.20 per share, an increase from a net loss allocable to common shareholders of $1.8 million or $0.13 per share in the same period in 2010. Quepasa's adjusted EBITDA loss for the fourth quarter of 2011 was $1.0 million or $0.04 per share, a $0.6 million increase from the $0.4 million loss, or $0.03 per share, for the same period in 2010. (See the important discussion about the presentation of EBITDA and adjusted EBITDA loss, non-GAAP financial measures, and a reconciliation to the most directly comparable GAAP financial measure, below.)
Full Year 2011 Financial Highlights
Revenue: Quepasa 2011 revenues totaled $11.9 million, up 96% from the $6.1 million reported for 2010. (See Important Disclosures below regarding revenue sources.)
Net Loss: Quepasa reported a net loss allocable to common shareholders of $12.8 million or $0.67 per share for fiscal 2011, up from $6.8 million or $0.52 per share reported in fiscal 2010. Quepasa's adjusted EBITDA loss totaled $3.3 million or $0.18 per share, a decline from the $0.0 million or $0.00 per share adjusted EBITDA profit reported in fiscal year 2010. (See the important discussion about the presentation of EBITDA and adjusted EBITDA loss, non-GAAP financial measures, and a reconciliation to the most directly comparable GAAP financial measure, below.)
Balance Sheet: Quepasa cash and cash equivalents totaled $8.3 million at December 31, 2011, down from $13.5 million at December 31, 2010. The year-over-year decline is predominantly the result of proceeds used for the cash component of the myYearbook merger and cash investments in Quepasa Games, which were partially offset by the sale of preferred and common stock in connection with the closing of the merger.
Operating and Business Highlights
"The company has made good progress towards integration of myYearbook and Quepasa," noted COO Geoff Cook. "The Los Angeles office was closed and the Mexico office was reduced by two dozen people. Key people from both offices are in the process of moving to the company's new headquarters in New Hope, Pennsylvania to help us execute our plan of combining all of our users onto a single platform. We've also experienced dramatic 300% growth in mobile users in 2011, and we are excited to have announced last week the launch of a mobile virtual currency into our mobile products."
As of December 31, 2011 registered users increased to 78.1 million, up from the 27.3 million reported at the end of the fourth quarter of 2010.
Monthly Active Users (MAU) on our web properties totaled 4.1 million on average per month in the fourth quarter of 2011, up from the 2.8 million MAU in the same period in 2010. Web MAU were up sequentially from 1.6 million in the third quarter of 2011. Quepasa Games, which launched in May 2011, added an additional 2.1 million MAU (6.2 million total for all properties) to the fourth quarter total.
Page views totaled 5.43 billion in the fourth quarter of 2011, up from the 521 million page views in the same period of 2010. Sequentially, page views were up in the fourth quarter of 2011 from the 0.58 billion in the third quarter of 2011.
Visits totaled 192.5 million in the fourth quarter of 2011, up from the 63.6 million visits in the same period of 2010. Visits were up sequentially as well, from the 30.2 million in the third quarter of 2011.
Quepasa completed its merger with myYearbook, creating the public market leader for social discovery.
During the fourth quarter, Quepasa enhanced its management team with the additions of Fred Beckley as General Counsel and Executive Vice President of Business Affairs, and Robin Shallow as Executive Vice President of Communications and Public Relations.
myYearbook surpassed 50% of its traffic accessing on mobile devices, and launched the tablet application myYearbook for iPad, which is now available in the iTunes App Store.
myYearbook launched credits on the web in December, and on mobile devices in February 2012.
Summary Financial Information and Operational Metrics (1)
2010 2011 Change
----------- --------------- ----------
4Q Financial Highlights (millions)
Revenue - Advertising $ 1.8 $ 5.1 175.2%
Revenue - Virtual Currency $ 0.0 $ 1.2 20584%
Revenue - Total $ 1.9 $ 6.3 240%
Net Loss Allocable To Common
Shareholders $ (1.8) $ (5.5) 205%
EBITDA (Loss) $ (0.4) $ (3.2) 621.2%
Adjusted EBITDA (Loss) $ (0.4) $ (1.0) 124.9%
Full Year Financial Highlights
(millions)
Revenue - Advertising $ 6.0 $ 9.9 62.9%
Revenue - Virtual Currency $ 0.0 $ 2.0 34026%
Revenue - Total $ 6.1 $ 11.9 96%
Net Loss Allocable To Common
Shareholders $ (6.8) $ (12.8) 92%
EBITDA $ 0.0 $ (6.7) n/a
Adjusted EBITDA (Loss) $ 0.0 $ (3.3) n/a
Q4 Web and Mobile Metrics
(millions) 4Q 2010 4Q 2011 Change
----------- --------------- ----------
Registered Users - New in Q4 6.5 2.7 -58%
Registered Users - Cumulative 27.3 78.1 187%
Monthly Active Users (MAU) -
Average 2.8 4.1 49%
Total Visits (2) 63.6 192.5 202%
Total Page Views (2) 520.9 5,431.6 943%
Quepasa Games Metrics (millions)
Wonderful City Installs - New n/a 1.3 n/a
Wonderful City Installs -
Cumulative n/a 6.5 n/a
Wonderful City - MAU Average n/a 2.1 n/a
Reconciliation of Combined Revenue
(mm)(3) 4Q 2011 Full Year 2011
----------- ---------------
Quepasa Corporation - As
Reported $ 6.3 $ 11.9
myYearbook - pre-merger $ 3.5 $ 24.9
----------- ---------------
Combined Revenue $ 9.8 $ 36.8
(1) Reflects contributions from myYearbook from the date of the merger and
figures may not total due to rounding
(2) Excludes iOS application and device metrics
(3) See Use of Non-GAAP Financial Information below for important disclosure
on combined revenue
Conference Call Details
The Company plans to host a conference call to discuss its fourth quarter and 2011 financial results on Thursday, March 1, 2012, at 4:30 p.m. ET. The conference call can be accessed by dialing toll-free 1-877-941-8416 (U.S.) or 1-480-629-9808 (International). A replay of the call will be available after 7:30 p.m. ET on the same day and until 11:59 p.m. ET April 1, 2012. Toll-free replay number: 1-877-870-5176, International replay number: 1-858-384-5517, Replay pin number: 4515549. A replay of the call will also be available at the Investors section of quepasacorp.com for one year.
QUEPASA CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, December 31,
2011 2010
--------------- ---------------
Assets
Current Assets
Cash and cash equivalents $ 8,271,787 $ 13,546,572
Accounts receivable, net of allowance of
$270,210 and $16,000, at December 31,
2011 and 2010, respectively 10,436,067 1,361,024
Notes receivable - current portion,
including $559 and $3,633 of accrued
interest, at December 31, 2011 and
2010, respectively 169,955 314,221
Prepaid expenses and other current
assets 1,089,665 113,841
Restricted cash 275,000 275,000
--------------- ---------------
Total current assets 20,242,474 15,610,658
Goodwill, net 73,048,084 -
Intangible assets, net 8,568,170 -
Property and equipment, net 4,408,694 645,728
Notes receivable - long-term portion - 156,079
Other assets 537,274 40,324
--------------- ---------------
Total assets $ 106,804,696 $ 16,452,789
=============== ===============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 2,054,851 $ 286,990
Accrued expenses and other liabilities 2,018,730 414,249
Deferred revenue 246,347
Accrued dividends 169,455 278,750
Unearned grant income 9,040 12,364
Current portion of long-term debt 2,405,191 -
--------------- ---------------
Total current liabilities 6,903,614 992,353
Notes and loans payable, net of discount 9,255,508 6,272,545
--------------- ---------------
Total liabilities 16,159,122 7,264,898
--------------- ---------------
Commitments and Contingencies
Stockholders' Equity (Deficit):
Preferred stock, $.001 par value,
authorized 5,000,000 shares:
Convertible preferred stock Series A,
$.001 par value; authorized - 1,000,000
shares; 25,000 shares issued and
outstanding at December 31, 2010,
Liquidation preference of $2,500,000 - 25
Convertible preferred stock Series A-1,
$.001 par value; authorized - 5,000,000
shares; 1,000,000 shares issued and
outstanding at December 31, 2011.
Liquidation preference 1,479,949 common
shares 1,000 -
Common stock, $.001 par value;
authorized - 100,000,000 shares;
36,145,084 and 15,287,280 shares issued
and outstanding at December 31, 2011
and 2010, respectively 36,146 15,287
Additional paid-in capital 269,974,789 175,276,319
Accumulated deficit (178,903,412) (166,096,889)
Accumulated other comprehensive loss (462,949) (6,851)
--------------- ---------------
Total stockholders' equity 90,645,574 9,187,891
--------------- ---------------
Total liabilities and stockholders'
equity $ 106,804,696 $ 16,452,789
=============== ===============
QUEPASA CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
For the Three Months Ended For the Years Ended
-------------------------- --------------------------
December 31, December 31,
-------------------------- --------------------------
2011 2010 2011 2010
------------ ------------ ------------ ------------
Revenues $ 6,296,541 $ 1,854,295 $ 11,850,852 $ 6,054,141
------------ ------------ ------------ ------------
Operating Costs and
Expenses:
Sales and marketing 1,008,500 289,775 1,885,998 891,980
Product development
and content 4,126,512 1,966,284 9,525,068 4,774,694
Games expenses 584,253 - 1,553,450 -
General and
administrative 3,047,048 1,177,034 6,599,020 6,123,083
Depreciation and
amortization 603,030 64,626 1,097,867 319,779
Acquisition and
restructuring
costs 779,441 - 1,948,432 -
Loss on impairment
of goodwill 1,409,127 - 1,409,127 -
------------ ------------ ------------ ------------
Total Operating
Costs and Expenses 11,557,911 3,497,719 24,018,962 12,109,536
------------ ------------ ------------ ------------
Loss from Operations (5,261,370) (1,643,424) (12,168,110) (6,055,395)
------------ ------------ ------------ ------------
Other Income
(Expense):
Interest income 7,805 4,887 57,265 6,229
Interest expense (204,199) (151,505) (657,184) (603,609)
Other income
(expense), net 493 543 2,211 2,125
------------ ------------ ------------ ------------
Total Other Income
(Expense) (195,901) (146,075) (597,708) (595,255)
------------ ------------ ------------ ------------
Loss Before Income
Taxes (5,457,271) (1,789,499) (12,765,818) (6,650,650)
Income taxes - - - -
------------ ------------ ------------ ------------
Net Loss $ (5,457,271) $ (1,789,499) $(12,765,818) $ (6,650,650)
============ ============ ============ ============
Preferred stock
dividends - (27,875) (40,705) (111,500)
------------ ------------ ------------ ------------
Net Loss Allocable
To Common
Shareholders $ (5,457,271) $ (1,817,374) $(12,806,523) $ (6,762,150)
============ ============ ============ ============
Net Loss Per Common
Share Allocable To
Common
Shareholders, Basic
and Diluted $ (0.20) $ (0.13) $ (0.67) $ (0.52)
============ ============ ============ ============
Weighted Average
Number of Shares
Oustanding, Basic
and Diluted: 27,770,127 13,609,609 19,092,121 13,117,845
============ ============ ============ ============
Net Loss $ (5,457,271) $ (1,789,499) $(12,765,818) $ (6,650,650)
Foreign currency
translation
adjustment (487,572) (1,207) (456,098) (796)
------------ ------------ ------------ ------------
Comprehensive Loss $ (5,944,843) $ (1,790,706) $(13,221,916) $ (6,651,446)
============ ============ ============ ============
QUEPASA CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP Net (Loss) to EBITDA (Loss) and Adjusted
EBITDA Income (Loss)
For the Three Months Ended
--------------------------------
December 31, Per Basic and
2011 Diluted Share
--------------- ---------------
--------------- ---------------
Net Loss Allocable to Common
Shareholders $ (5,457,271) $ (0.20)
--------------- ---------------
Interest expense 204,199 0.01
Depreciation and amortization of
property and equipment and
intangible assets 603,030 0.02
Amortization of stock based
compensation 1,469,637 0.05
--------------- ---------------
EBITDA (loss) $ (3,180,405) $ (0.11)
--------------- ---------------
Loss on impairment of goodwill 1,409,127 $ 0.05
Acquisition and restructuring
Costs 779,441 0.03
--------------- ---------------
Adjusted EBITDA (loss) $ (991,837) $ (0.04)
=============== ===============
Weighted Average Number of Shares
Outstanding, Basic and Dilutive 27,770,127
===============
For the Year Ended
--------------------------------
December 31, Per Basic and
2011 Diluted Share
--------------- ---------------
--------------- ---------------
Net Loss Allocable to Common
Shareholders $ (12,806,523) $ (0.67)
--------------- ---------------
Interest expense 657,184 0.03
Depreciation and amortization of
property and equipment and
intangible assets 1,097,867 0.06
Amortization of stock based
compensation 4,348,139 0.23
--------------- ---------------
EBITDA (loss) $ (6,703,333) $ (0.35)
--------------- ---------------
Loss on impairment of goodwill 1,409,127 $ 0.07
Acquisition and restructuring
Costs 1,948,432 0.10
--------------- ---------------
Adjusted EBITDA (loss) $ (3,345,774) $ (0.18)
=============== ===============
Weighted Average Number of Shares
Outstanding, Basic 19,092,121
===============
Weighted Average Number of Shares
Outstanding, Diluted
For the Three Months Ended
----------------------------
Per Basic
December 31, and Diluted
2010 Share
--------------- -----------
--------------- -----------
Net Loss Allocable to Common
Shareholders $ (1,817,374) $ (0.13)
--------------- -----------
Interest expense 151,505 0.01
Depreciation and amortization of
property and equipment and
intangible assets 64,626 0.00
Amortization of stock based
compensation 1,160,278 0.09
--------------- -----------
EBITDA (loss) $ (440,965) $ (0.03)
--------------- -----------
Loss on impairment of goodwill - -
Acquisition and restructuring
Costs - -
--------------- -----------
Adjusted EBITDA (loss) $ (440,965) $ (0.03)
=============== ===========
Weighted Average Number of Shares
Outstanding, Basic and Dilutive 13,609,609
===============
For the Year Ended
-----------------------------------------
Per Basic
and Per
December 31, Diluted Diluted
2010 Share Share
--------------- ----------- -----------
--------------- ----------- -----------
Net Loss Allocable to Common
Shareholders $ (6,762,150) $ (0.52) $ (0.33)
--------------- ----------- -----------
Interest expense 603,609 0.05 $ 0.03
Depreciation and amortization of
property and equipment and
intangible assets 319,779 0.02 $ 0.00
Amortization of stock based
compensation 5,864,969 0.45 $ 0.30
--------------- ----------- -----------
EBITDA (loss) $ 26,207 $ 0.00 $ 0.00
--------------- ----------- -----------
Loss on impairment of goodwill - - -
Acquisition and restructuring
Costs - - -
--------------- ----------- -----------
Adjusted EBITDA (loss) $ 26,207 $ 0.00 $ 0.00
=============== =========== ===========
Weighted Average Number of Shares
Outstanding, Basic 13,117,845
===============
Weighted Average Number of Shares
Outstanding, Diluted 19,559,264
===============
About Quepasa Corporation
Quepasa Corporation (AMEX: QPSA - News) is the public market leader for social discovery and owner of Latin-American platform Quepasa and North-American platform myYearbook. The company makes meeting new people fun through social games and apps, monetized through both advertising and virtual currency. In addition to Quepasa and myYearbook, the Company operates Quepasa Games, a cross-platform social game development studio. Quepasa has strong reach throughout the world, with a concentration across North and South America. Quepasa is headquartered in New Hope, Pennsylvania. For more information about the Company, go to www.quepasacorp.com, or join for free at www.Quepasa.com, myYearbook.com, or via the myYearbook app on iPhone, iPad, and Android.
Cautionary Note Concerning Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including statements regarding being well positioned to capitalize on our leadership position, enhancing our growth trajectory in the upcoming quarters by offering web and mobile products to our Latin American users, and moving our users to a single platform. All statements other than statements of historical facts contained in this press release, including statements regarding our future financial position, liquidity, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include the risk that Latin American users not willing to visit our site on a mobile platform, myYearbook and Quepasa users will be willing to purchase virtual currency for the various offerings, the effectiveness of the mobile software on smartphones and tablets, the risk that we are unable to monetize our mobile users, the risk that we will lose a substantial number of users after moving our users to a single rebranded platform and the risk that the Quepasa and myYearbook businesses will not be integrated successfully. Further information on our risk factors is contained in our filings with the SEC, including the Form S-4/A filed on October 4, 2011. Any forward-looking statement made by us in this press release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Important Disclosures
Approximately 36% and 0% of Quepasa's revenues for the year ended and the three months ended December 31, 2011, respectively, came from one company of which a director of Quepasa is an officer or director.
Use of Non-GAAP Financial Information
On November 10, 2011, Quepasa Corporation and Insider Guides, Inc., owner of social network myYearbook, merged. The fourth quarter and fiscal year results for Quepasa Corporation are provided, as well as certain combined operating results for Quepasa and myYearbook. The combined revenue results give effect to the merger as if it had been completed on January 1, 2010. The combined revenue data is for informational purposes only and does not purport to present what our results would actually have been had the merger actually occurred on the dates presented or to project our results for any future period. The Company believes that evaluation of its financial performance can be enhanced by a presentation of combined results in order to evaluate its prior, current or future period results on a more meaningful, consistent year-over-year basis.
The Company uses financial measures which are not calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP") in evaluating its financial and operational decision making and as a means to evaluate period-to period comparison. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company presents these non-GAAP financial measures because it believes them to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
The Company defines EBITDA as earnings (or loss) before interest expense, income taxes, depreciation and amortization, and amortization of non-cash stock-based compensation. Quepasa excludes stock-based compensation because it is non-cash in nature. The Company defines adjusted EBITDA as EBITDA excluding non-recurring acquisition and restructuring expenses and the goodwill impairment charge. Other companies (including the Company's competitors) may define EBITDA and adjusted EBITDA differently.
EBITDA and adjusted EBITDA are non-GAAP financial measures and should not be considered as alternatives to net income, operating income, cash flow from operating activities, as a measure of Quepasa's liquidity or any other financial measures. It may not be indicative of the historical operating results of Quepasa nor is it intended to be predictive of potential future results. Investors should not consider EBITDA and/or adjusted EBITDA in isolation or as substitutes for performance measures calculated in accordance with GAAP. See Reconciliation of GAAP Net (Loss) to EBITDA (Loss) and Adjusted EBITDA Income (Loss) for further information on these non-GAAP measures and reconciliation of GAAP Income (Loss) to EBITDA (Loss) and Adjusted EBITDA Income (Loss) for the periods indicated.
Contact:
Robin Shallow
EVP Communications & Public Relations
Quepasa Corporation
(215) 862-1162 x230
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Media Inquiries:
Tammy Chan
Atomic PR
(212) 699-3646
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Investor
E. Brian Harvey
Vice President of Capital Markets and Investor Relations
Quepasa Corporation
(310) 801-1719
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