FOR IMMEDIATE RELEASE
May 31, 2016
3TL TECHNOLOGIES CORP ANNOUNCES 2016 FIRST QUARTER FINANCIAL RESULTS AND PROVIDES BUSINESS UPDATE
VANCOUVER, B.C. (May 31, 2016) – 3TL Technologies Corp. (TSXV: TTM)(OTCQB: TTMZF) (the “Company” or “3TL”) announced its financial results for the first quarter ended March 31, 2016. The financial statements and management discussion and analysis for the quarter ended March 31, 2016 are available on SEDAR.
Overview and Update
The Company’s overall performance for the three months ended March 31, 2016:
- Validated Platform3 as Software-as-a-Service (SaaS) shopper marketing solution for leading consumer packaged goods (“CPG”) brands, after introducing new modules and improved scalability and security in 2015;
- Year-to-date, 3TL has license agreements to provide Platform3 for 20 shopper marketing promotions with leading U.S. based CPG brands;
- Revenues increased by 208% to $148,838 compared to the quarter ended December 31, 2015;
- Gross margin as a percentage of revenue increased to 79.6% compared to 37% in the quarter ended December 31, 2015, mainly due to the strong margins from SaaS revenues and economies of scale as revenues increase; and,
- Positioned 3TL for growth of SaaS revenues in 2016 with repeat business expected from leading CPG brands and longer term and larger contracts driven by validation of the Company’s value proposition.
“In the first quarter we validated our SaaS solution with leading CPG brands by launching numerous successful shopper marketing promotions across the U.S. We expect strong growth in 2016, driven by brands coming back for repeat business and committing to longer term license agreements,” said Rob Craig, CEO of 3TL Technologies Corp. “We look forward to continuing to provide a compelling marketing solution for our customers and high-margin revenues to our shareholders.”
In 2014, the Company shifted its business model to Software-as-a-Service from custom development of digital advertising solutions with the launch of Platform3. During 2015, 3TL improved Platform3 by adding functional modules and by enhancing security and scalability.
In the second quarter of 2015, 3TL implemented a sales and marketing program designed to engage and sell shopper marketing solutions to consumer packaged goods companies targeting major brands based in the U.S. As part of this initiative, the Company implemented a program to partner with advertising and promotional agencies that service CPG companies. The goal of the sales program is to generate immediate sales to major CPG brands that have large annual budgets for shopper marketing promotions.
In the second half of 2015, 3TL signed licence agreements, directly and through advertising agencies, for a number of leading brands, validating its value proposition. With these reference accounts, the Company’s sales team was able to establish a sales pipeline of leading U.S. based CPG companies, both directly and through advertising agencies.
The Company generated $319,000 in revenues in 2015 after launching an improved version of Platform3. Year to date, 3TL has signed license agreements for 20 leading brands that will generate close to $300,000 in revenues in 2016. With a growing pipeline of sales opportunities, including repeat business from leading brands, the Company expects signed license agreements and revenues to grow significantly in 2016.
Platform3 was built as a SaaS platform to enable brands and advertising agencies to build, test, and launch, powerful digital marketing campaigns easily and quickly with improved ROI. It was designed to provide 3TL’s customers with the strategic capabilities needed for a total shopper marketing solution, including modules for:
– optical character recognition (receipt scanning);
– consumer-to-consumer content sharing;
– rewards and loyalty;
– data mining; and,
– customer relationship management.
The foregoing functional modules are all accessed from the Cloud using a common user interface with a shared consumer database.
Platform3 was developed by 3TL’s team from the ground up to seamlessly integrate with the existing technology infrastructure of major consumer brands and ad agencies. The investment we made in building Platform3 as a scalable solution for large organizations is paying off as leading brands and advertising agencies who use our solution come back for repeat business and consider longer term license agreements.
RESULTS OF OPERATIONS
Revenue for the three months ended March 31, 2016 increased by 75.7% to $148,838, compared the same period in 2015, mostly due to sales and marketing activities in the fourth quarter of 2015. Year to date, 3TL has signed licence agreements that will generate close to $300,000 in revenues for 2016, compared to $319,163 in revenues for the year ended December 31, 2015. With a strong pipeline of sales opportunities in progress, the Company expects significant revenue growth in 2016.
Revenues for SaaS licence agreements are recognized over the term of the agreements. All the license agreements signed to date in 2016 are for services to be delivered in 2016. Based on feedback from CPG companies and advertising agencies, 3TL expects to sign repeat business and longer term agreements with a number of customers and prospects in 2016, some which may extend into 2017.
Gross profit as a percentage of sales increased to 79.6% for the three months ended March 31, 2016 compared to 52.5% for the same period in 2015. Gross profit for the three months ended March 31, 2016 was $118,406 compared to $44,507 for the three months ended March 31, 2015. The current web hosting and customer service costs can support a significantly larger customer base and revenues. The Company expects gross profit and gross profit as a percentage of sales to improve over time due to growth of high margin SaaS revenues from Platform³ and by attaining efficiencies through economies of scale.
Total operating expenses decreased to $508,863 for the three months ended March 31, 2016 compared to $966,691 for the same period in 2015. In the first quarter of 2015, the Company focused its limited resources on activities that will increase revenues in 2016, such that general and administrative and research and development expenses were reduced by 52.8% and 68.3%, respectively, compared to the same period in 2015, while sales and marketing expense was reduced by 7% compared to same period in 2015..
Net and comprehensive loss decreased to $387,142 for the three months ended March 31, compared to $908,349 for the same period in 2015, mainly due to increased gross profit and reduction of operating expenses.
For further information, please contact:
3 TL Technologies Corp.
Chief Executive Officer
About 3TL Technologies Corp.
Platform³ is a Software as a Service (SaaS) consumer marketing platform. It enables Consumer Packaged Goods (CPG) companies and consumer brands to engage shoppers through their mobile device and influence their purchasing decisions. Platform³ encompasses proprietary consumer engagement strategies and technology modules including optical character recognition (purchase receipt scanning), digital promotions, purchase data mining, loyalty and rewards. CPG companies and major retail brands use Platform³ to influence and incentivize shoppers to interact with their brand and make purchases in-store and online.
For more information, visit 3tltechcorp.com.
For additional information about the company please visit www.sedar.com. The TSX Venture Exchange Inc. has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors – including the availability of funds and the results of financing efforts, – that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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