Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing
technology, today announced its financial results for the fourth
quarter and full year ending December 31, 2020.
Richard Howe, CEO of Inuvo, stated, “The IntentKey platform grew
year-over-year 34% in the fourth quarter and 22% overall driven by
the expansion of existing client relationships and an increase in
the total number of campaigns on the platform. While year-over-year
revenue was down due to the pandemic, the recovery within
ValidClick, where revenue was lost year-over-year, has been strong
with December revenue up over 100% from the low in May 2020. We
would expect ValidClick to be back too normal in 2021 and the
IntentKey to continue its growth trajectory, which combined is
expected to result in positive Adjusted EBITDA for 2021.”
Inuvo launched the Software-as-a-Service (SaaS) version of the
IntentKey in January of 2021 by packaging the proprietary
Artificial Intelligence, Analytic Modeling, and Data Technologies
in a manner that allows clients to leverage the core IntentKey
engine while complimenting that with their own services. Client
beta testing in the fourth quarter of 2020 proved successful in
delivering comparable performance to the managed service version of
the platform. The launch significantly enhances the market
potential for the IntentKey product.
Mr. Howe continued, “Our balance sheet has never been stronger.
The additional working capital will allow us to continue focusing
on our organic growth while also evaluating acquisition
opportunities that can accelerate that growth, with a focus on
companies whose client relationships are suited to the software and
services of the IntentKey.”
Financial Results for the Fourth Quarter and Full Year
Ended December 31, 2020:Net revenue for the full year
ended December 31, 2020 totaled $44.6 million as compared to $61.5
million during the same period the year prior, a decrease of 27.4%
year-over-year associated with the ValidClick platform where
COVID-19 had a material impact on the business. IntentKey revenue
grew 22% year-over-year to $10.4 million in 2020 as compared to
$8.5 million in 2019.
Overall revenue in the fourth quarter was $12.9 million, up 40%
sequentially. ValidClick revenue was up 48.5% sequentially to $9.3M
in the fourth quarter, continuing its recovery following its
COVID-19 related low point in the second quarter. IntentKey revenue
for the fourth quarter of 2020 totaled $3.6 million, an increase of
34% year-over-year. IntentKey revenue for the fourth quarter of
2020 accounted for 28% of the total revenue.
Cost of revenue for the full year ended December 31, 2020
totaled $8.3 million as compared to $22.7 million during the same
period the year prior, a decrease of 63.5%, primarily due to the
COVID-19 related decline in ValidClick revenue.
Gross profit totaled $36.3 million for the full year ended
December 31, 2020 as compared to $38.8 million for the same period
the year prior, a decrease of 6.4%. IntentKey gross profit in 2020
increased 90% year-over-year as a result of growth and margin
expansion. ValidClick gross profit in 2020 was down 35%
year-over-year as a result of the COVID-19 impact on revenue. Gross
profit margins improved to 81.4% for the full year ended December
31, 2020 as compared to 63.1% for the same period the year prior.
IntentKey gross profit margins for the fourth quarter of 2020 were
45% compared to 41% in the prior year
Operating expenses decreased 4.7% year-over-year to $44.4
million as compared to $46.6 million for the year ended December
31, 2019.
Net loss for the year ended December 31, 2020 totaled $7.3
million. Net Loss included $4.5 million of non-cash items.
Adjusted EBITDA was a positive $347 thousand in the fourth
quarter and a loss of $2.4 million for the full year.
Liquidity and Capital Resources:At December 31,
2020, Inuvo had $7.9 million in cash, $150,000 in debt and no
outstanding balance on its working capital line of $5 million.
Subsequent to December 31, 2020, the Company raised an additional
$14.25 million from the sale of common stock to institutional
investors.
Conference Call Details:The Company is in the
process of finalizing its financial statements and will host a
conference call on Thursday, February 11, 2021 at 4:30 p.m. Eastern
time to discuss its financial results for the fourth quarter and
year ended December 31, 2020 and provide a business update.Date:
Thursday, February 11, 2021Time: 4:30 p.m. Eastern timeToll-free
Dial-in Number: 1-800-289-0438International Dial-in Number:
1-323-794-2423Conference ID: 1881018Participant
Link: http://public.viavid.com/index.php?id=143468
A telephone replay will be available through February 25, 2021.
To access the replay, please dial 1-844-512-2921 (domestic) or
1-412-317-6671 (international). At the system prompt, enter the
code 1881018 followed by the # sign. You will then be prompted for
your name, company and phone number. Playback will then
automatically begin.
About the IntentKey™ Inuvo®’s
IntentKey™ is a patented, machine-learning technology designed to
mirror the manner in which the human brain instantly associates
ideas, emotions, places, people, and objects. It creates an
accurate, high-definition picture of consumer intent and sentiment
related to a particular topic or item. Inuvo harnesses the power of
the IntentKey to discover and reach high volumes of incremental
in-market and relevant audiences that are hidden from typical
marketing approaches. The IntentKey enables pinpoint media
execution reaching consumers throughout the purchasing funnel all
the way to conversion.
About Inuvo Inuvo®, Inc. (NYSE American: INUV)
is a market leader in artificial intelligence, aligning and
delivering consumer-oriented product & brand messaging
strategies online based on powerful, anonymous and proprietary
consumer intent data for agencies, advertisers and partners. To
learn more, visit www.inuvo.com.
Safe Harbor / Forward-Looking StatementsThis
press release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially,
including, without limitation risks detailed from time to time in
our filings with the Securities and Exchange Commission (the
“SEC”), and represent our views only as of the date they are made
and should not be relied upon as representing our views as of any
subsequent date. You are urged to carefully review and consider any
cautionary statements and other disclosures, including the
statements made under the heading "Risk Factors" in Inuvo, Inc.'s
Annual Report on Form 10-K for the fiscal year ended December 31,
2020 as filed on February 11, 2021, our Quarterly Reports on Form
10-Q, and our other filings with the SEC. Additionally,
forward looking statements are subject to certain risks, trends,
and uncertainties including the continued impact of Covid-19 on
Inuvo’s business and operations. Inuvo cannot provide assurances
that the assumptions upon which these forward-looking statements
are based will prove to have been correct. Should one of these
risks materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those expressed
or implied in any forward-looking statements, and investors are
cautioned not to place undue reliance on these forward-looking
statements, which are current only as of this date. Inuvo does not
intend to update or revise any forward-looking statements made
herein or any other forward-looking statements as a result of new
information, future events or otherwise. Inuvo further expressly
disclaims any written or oral statements made by a third party
regarding the subject matter of this press release. The
information, which appears on our websites and our social media
platforms is not part of this press release.
Inuvo Company Contact: Wally Ruiz Chief
Financial Officer Tel (501) 205-8397 wallace.ruiz@inuvo.com
Investor Relations: KCSA Strategic
CommunicationsValter Pinto, Managing DirectorTel (212)
896-1254Valter@KCSA.com
|
INUVO,
INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
December
31 |
|
December
31, |
|
|
|
|
|
2020 |
|
2019 |
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash |
$7,890,665 |
|
|
$372,989 |
|
Accounts receivable, net |
6,227,610 |
|
|
7,529,785 |
|
Prepaid expenses and other current assets |
413,435 |
|
|
243,888 |
|
Total current assets |
14,531,710 |
|
|
8,146,662 |
|
|
|
|
|
|
|
Property and equipment, net |
1,187,061 |
|
|
1,374,152 |
|
|
|
|
|
|
|
Goodwill |
9,853,342 |
|
|
9,853,342 |
|
Intangible assets, net |
8,586,089 |
|
|
10,451,593 |
|
Other assets |
1,023,369 |
|
|
865,178 |
|
Total other assets |
19,462,800 |
|
|
21,170,114 |
|
Total assets |
$35,181,571 |
|
|
$30,690,928 |
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other current liabilities |
$4,680,912 |
|
|
$4,057,340 |
|
Accounts payable |
4,048,260 |
|
|
7,520,567 |
|
Financed receivables |
- |
|
|
3,381,364 |
|
Convertible promissory notes (net) |
- |
|
|
536,806 |
|
Derivative liability |
- |
|
|
182,250 |
|
Total current liabilities |
8,729,172 |
|
|
15,678,327 |
|
Deferred tax liability |
107,000 |
|
|
107,000 |
|
Other long-term liabilities |
1,052,285 |
|
|
452,051 |
|
Total long-term liabilities |
1,163,285 |
|
|
559,051 |
|
|
|
|
|
|
|
Total stockholders' equity |
25,289,114 |
|
|
14,453,550 |
|
Total liabilities and stockholders' equity |
$35,181,571 |
|
|
$30,690,928 |
|
|
|
|
|
|
|
INUVO, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December31 |
|
December31 |
|
December31 |
|
December31 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net revenue |
$12,902,487 |
|
|
$18,222,984 |
|
|
$44,640,007 |
|
|
$61,525,214 |
|
Cost of revenue |
2,141,562 |
|
|
5,390,377 |
|
|
8,296,483 |
|
|
22,700,873 |
|
Gross profit |
10,760,925 |
|
|
12,832,607 |
|
|
36,343,524 |
|
|
38,824,341 |
|
Operating expenses |
|
|
|
|
|
|
|
Marketing costs |
8,261,359 |
|
|
10,122,874 |
|
|
27,410,284 |
|
|
30,135,991 |
|
Compensation |
2,425,592 |
|
|
2,023,231 |
|
|
9,350,831 |
|
|
7,753,528 |
|
Selling, general and
administrative |
1,920,769 |
|
|
2,000,900 |
|
|
7,630,990 |
|
|
8,673,015 |
|
Total operating expenses |
12,607,720 |
|
|
14,147,005 |
|
|
44,392,105 |
|
|
46,562,534 |
|
Operating loss |
(1,846,795) |
|
|
(1,314,398) |
|
|
(8,048,581) |
|
|
(7,738,193) |
|
Interest expense (income),
net |
(2,170) |
|
|
29,348 |
|
|
(253,505) |
|
|
(482,210) |
|
Other income , net |
1,134,000 |
|
|
92,035 |
|
|
997,517 |
|
|
3,397,902 |
|
Net loss before taxes |
(714,965) |
|
|
(1,193,015) |
|
|
(7,304,569) |
|
|
(4,822,501) |
|
|
|
|
|
|
|
|
|
Income tax benefit |
- |
|
|
334,394 |
|
|
- |
|
|
334,394 |
|
|
|
|
|
|
|
|
|
Net loss |
(714,965) |
|
|
(858,621) |
|
|
(7,304,569) |
|
|
(4,488,107) |
|
Earnings per share, basic and
diluted |
|
|
|
|
|
|
|
Net loss income |
($0.01) |
|
|
($0.02) |
|
|
($0.09) |
|
|
($0.11) |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
Basic |
97,629,735 |
|
|
50,450,199 |
|
|
77,473,479 |
|
|
40,454,779 |
|
Diluted |
97,629,735 |
|
|
50,450,199 |
|
|
77,473,479 |
|
|
40,454,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE
TAXES TO ADJUSTED EBITDA |
(unaudited) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December31 |
|
December 31 |
|
December31 |
|
December 31 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Operating loss |
($1,846,795) |
|
|
($1,314,398) |
|
|
($8,048,581) |
|
|
($7,738,193) |
|
Depreciation |
318,623 |
|
|
394,019 |
|
|
1,372,426 |
|
|
1,680,105 |
|
Amortization |
542,827 |
|
|
598,299 |
|
|
2,233,485 |
|
|
1,742,280 |
|
EBITDA |
(985,345) |
|
|
(322,080) |
|
|
(4,442,670) |
|
|
(4,315,808) |
|
Stock-based compensation |
198,068 |
|
|
195,284 |
|
|
858,683 |
|
|
789,914 |
|
Non-recurring items: |
|
|
|
|
|
|
|
PPP Loan Forgiven |
1,109,000 |
|
|
- |
|
|
1,109,000 |
|
|
- |
|
Third party rights
agreement |
24,999 |
|
|
- |
|
|
78,762 |
|
|
- |
|
Merger costs incurred during
the Terminated Merger |
|
|
|
|
- |
|
|
991,158 |
|
Net adjustment to derivative
liability accounts |
- |
|
|
(447,678) |
|
|
|
|
(286,473) |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$346,722 |
|
|
($574,474) |
|
|
($2,396,225) |
|
|
($2,821,209) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Loss from Continuing Operations before
Taxes to EBITDA and Adjusted EBITDAWe present EBITDA and
Adjusted EBITDA as a supplemental measure of our performance. We
defined EBITDA as net loss from continuing operations before taxes
plus (i) interest expense, net, (ii) depreciation, and (iii)
amortization. We further define Adjusted EBITDA as EBITDA plus (iv)
stock-based compensation and (v) certain identified expenses that
are not expected to recur or be representative of future ongoing
operation of the business. These adjustments are itemized above.
You are encouraged to evaluate these adjustments and the reasons we
consider them appropriate for supplemental analysis. In evaluating
EBITDA and Adjusted EBITDA, you should be aware that in the future
we may incur expenses that are the same or similar to some of the
adjustments in the presentation. Our presentation of EBITDA and
Adjusted EBITDA should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items
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