KIRKLAND, WA — (Marketwired) — 10/08/13 — Hipcricket®, Inc. (OTCBB: HIPP) (OTCQB: HIPP), the one-stop mobile advertising and marketing company, announces its operating results for the second quarter ended August 31, 2013.

Second Quarter Highlights

Increased second quarter revenue 23% to $7.6 million from $6.2 million in the same period last year.

Secured significant new customer relationships with Google and Mondel?z International and expanded relationship with MGM International.

Increased average annual revenue per customer 46% to approximately $105,000 from $72,000 on a trailing twelve month basis.

Completed a $9.6 million financing subsequent to the end of the quarter, setting foundation for accelerating future growth.

Ivan Braiker, CEO of Hipcricket, commented, “We achieved accelerated year-over-year growth in the second quarter, compared to the first quarter of this year and the same quarter one year ago. We believe that improving market conditions, better company execution, and changing the corporate name to Hipcricket, Inc. as well as centralizing leadership in our Kirkland headquarters, puts us in an optimal position to continue this growth trend for the rest of the year. We have secured significant new customer relationships, most recently being contracted by Mondel?z International and Google to build mobile websites for multiple global brands. Our expanded sales team is growing our pipeline, getting deeper into sales cycles, and closing business faster. Over the balance of the year, we will work to increase the number of brands we are working with and the number of products being used by our existing customers. We also will seek to add new clients to our existing base, which now includes 26 of the Fortune 100 companies. As we head into the end of the year, we decided now was an opportune point in our development as a company to secure additional funding for investment in our future.”

For the full fiscal year 2014 Hipcricket reiterates previous guidance that it expects revenue to be in the range of $34.0 – $35.4 million.

Second Quarter Financial Results

Revenue for second quarter of fiscal 2014 increased to $7.6 million, from $6.2 million for second quarter of fiscal 2013, an increase of 23%.

Operating expenses for the second quarter of fiscal 2014 were $7.6 million compared to $10.9 million in second quarter of fiscal 2013. Non-GAAP operating expenses, defined as total operating expenses adjusted for non-cash charges for second quarter fiscal 2014 decreased to $5.5 million from $7.8 million for second quarter fiscal 2013.

Net loss for the second quarter of fiscal 2014 was $3.4 million, or $0.03 per share, compared to a net loss of $2.3 million, or $0.02 per share, for the second quarter of fiscal 2013. Excluding non-cash charges and benefits, the non-GAAP loss for second quarter fiscal 2014 was $1.3 million compared with $4.1 million for second quarter fiscal 2013.

As of August 31, 2013, backlog decreased 1% to $18.7 million from $18.9 million compared to August 31, 2012.

Second quarter bookings (the dollar value of contracts signed during the second quarter) were $7.9 million, level with the same period last year.

Cash and cash equivalents as of August 31, 2013 were $360,000 with borrowings on our revolving credit facility of $1.7 million and an additional $1.7 million available under that facility.

Operating results and non-cash charges are shown below, including reconciliation of net loss to non-GAAP financial measurements noted above.

Funding

On October 4, 2013 Hipcricket closed a $9.6 million financing transaction. The investors purchased units of our securities at $0.40 per unit. Each unit consisted of one share of our common stock and a warrant to purchase 30% of one share of common stock. The warrants have a term of 5 years and have an exercise price of $0.60. An aggregate of 23.9 million shares of our common stock and warrants to purchase up to 7.2 million shares of our common stock were purchased in the financing.

Non-GAAP information and reconciliation to comparable GAAP financial measures (unaudited):

This press release includes financial measures defined as non-GAAP financial measures by the SEC. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles accepted in the United States of America (“GAAP”). Generally, a non-GAAP financial measure is a numerical measure that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We supplement our GAAP disclosures with Non-GAAP Operating Expenses and Non-GAAP Earnings (Losses). These amounts exclude non-cash items including share-based compensation expense, depreciation and amortization (including impairment charges), and acquisition related contingent consideration (including fair value adjustments and deferred income tax benefits). The following table reconciles Non-GAAP Operating Expenses and Non-GAAP Earnings (Losses) to the comparable GAAP measures (Unaudited):

Management will host a conference call today at 4:30 p.m. ET.

To join the conference call, please dial 877-941-1427 (domestic call-in) or 480-629-9664 (international call-in).

A live webcast and replay will be available in the investor events section of Hipcricket-s website (). All participants should call or access the website approximately 10 minutes before the conference begins.

A telephone replay of the conference call will be available from 7:30 p.m. ET on October 8, 2013 until 11:59 p.m. ET on October 15, 2013 by calling 877-870-5176 (domestic) or 858-384-5517 (international) and entering confirmation # 4644000. An archived replay of the conference call will also be available in the corporate section of the company-s website.

Hipcricket, Inc. (OTCBB: HIPP) & (OTCQB: HIPP) provides a unified mobile engagement platform that drives awareness, sales and loyalty. The AD LIFE® platform has been used by internationally recognized brands and agencies to power over 250,000 campaigns across SMS, 2D/QR codes, mobile websites, advertising networks, social media and branded apps. Hipcricket, Inc. is headquartered in Kirkland, Wash. For additional Hipcricket news and information, please visit or text “NEWS” to 24474.

Hipcricket®, Augme Technologies, Augme®, AD LIFE®, BOOMBOX®, AD SERVE® and the Hipcricket and Augme logo are trademarks of Hipcricket, Inc. All rights reserved. 2009-13.

This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive position, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “August,” “could,” “should,” “will,” and other similar expressions are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in our Form 10-K for the year ended February 28, 2013, and more recent reports filed with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended August 31, 2013. Our forward-looking statements speak only as of the date of this release. We undertake no obligation to update or revise such forward-looking statements to reflect new information or future events or developments.

Totals may not add due to rounding.

Investor Relations Contact:
James Carbonara
Hayden IR
(646) 755-7412

Public Relations Contact:
Adam Curtis
Abel Communications
(443) 869-2197 ext.142

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