TUCSON, Ariz., May 14, 2019 /PRNewswire/ -- AudioEye, Inc.
(NASDAQ: AEYE), a leading provider of digital accessibility
solutions that provide barrier-free website access for individuals
with disabilities, reported financial results for the first quarter
ended March 31, 2019.
First Quarter and Recent Operational Highlights
- Augmented existing management team through the appointment of
20-year corporate finance executive and proven business leader
Sach Barot as new Chief Financial
Officer.
- Engaged former New York
Governor David Paterson as key
political advocate and business consultant for the AudioEye
solution with the goal of addressing the significant increase in
litigation related to digital accessibility, specifically in
New York state.
- Continued to grow direct sales channel client roster in the
first quarter with prominent new customers from the technology,
fashion, retail, hospitality and healthcare space among
others.
- Partnered with Edlio, a leading provider of community
engagement solutions for K-12 public, private and charter schools,
to provide enhanced accessibility solutions to its portfolio of
10,000 websites.
- Partnered with Mopro, a leading website provider that creates
and hosts sites for businesses in every industry, as its
accessibility provider to its more than 10,000 clients.
- Increased the sales and implementation teams to grow AudioEye
market share faster and to continue implementing its service
solution for customers in a timely manner.
Key Performance Indicators (KPIs)
- Continued to fortify new indirect channel partner
relationships. Currently, 18 established channel partners offer
AudioEye as their exclusive digital accessibility solution to their
clients.
- As of March 31, 2019, total
customer count had grown to nearly 1,100 customers.
- As of March 31, 2019, monthly
recurring revenues (MRR) totaled $686,000, which was an increase of 12% compared
to $614,000 at December 31, 2018.
First Quarter 2019 Financial Results
- Total revenues increased 73% to a record $1.99 million from $1.15
million in the same period a year-ago. The increase in
revenues was primarily due to continued execution in direct channel
as well as steady growth in the indirect channel.
- Cash contract bookings increased 56% to a $3.43 million from $2.20
million in the same year-ago period. The increase in cash
contract bookings was primarily due to execution in contract
closings in the direct channel and securing contracts with a new
indirect channel partner.
- Gross profit increased 93% to $1.08
million (54.5% of total revenues) from $562,000 (48.9% of total revenues) in the same
year-ago period. The increase in gross profit and gross margin was
primarily due to the increase in revenues previously
described.
- Total operating expenses increased 87% to $3.22 million from $1.72
million in the same year-ago period. The increase in total
operating expenses was primarily due to continued investment in our
growth through technology enhancements, consulting, legal and
compliance costs, as well as recruiting, marketing, stock-based
compensation and other key personnel costs.
- Net loss available to common stockholders was $2.15 million, or $(0.28) per share, compared to $1.18 million, or $(0.18) per share, in the same year-ago period.
The greater net loss was primarily due to the increase in total
operating expenses previously mentioned at a greater rate than the
increase in revenues previously mentioned.
- At quarter-end, the Company had $4.09
million in cash, compared to $5.74
million at December 31, 2018,
and no debt.
- Deferred revenues increased to $2.89
million from $1.37
million in March 2018, an
increase of 110%.
- Cash contracts in excess of revenue and deferred revenue
increased to $9.15 million from
$4.13 million in March 2018, an increase of 121%.
Full Year 2019 Financial Outlook
Management still expects to be within the range of its
previously announced financial guidance for full year 2019. The
Company expects revenues to range between $11.0 million and $13.0
million and cash contract bookings for the full year 2019 to
range between $20.0 million and
$22.0 million. With our increased PR
and marketing efforts, additional hires in the sales and
installation teams, and further emphasis on the development of
technological enhancements, the momentum is expected to increase
the pace of both bookings and revenues.
Management Commentary
AudioEye Executive Chairman Carr
Bettis said, "The first quarter was a strong start to the
year that has us in good position to continue ramping our growth
efforts throughout the balance of 2019. Total revenues increased
73% to a record $1.99 million, which
marks the thirteenth consecutive quarter that we've achieved record
topline results. Looking ahead, we're seeing even greater signs of
growth and expansion. The past two months, April and March, have
been the best months in the history of our company in terms of cash
contract bookings. Thanks to our enhanced public relations and
marketing efforts, we've been able to increase our pipeline
substantially and will look to continue to accelerate this program
going forward. We are continuing to strategically funnel financial
resources and add key personnel into areas that will allow us to
build on our market leading position and further establish AudioEye
as the de-facto leader in digital accessibility."
AudioEye CEO Todd Bankofier
added: "Operationally, we put together another solid quarter of
execution, which should function as a strong base from which we can
build throughout 2019. In our direct sales business, we signed a
number of major new customers, some representing the more
significant companies within the Global Fortune 500, and in our
indirect channel, we partnered with additional major CMS providers
in the education and small business markets, which should provide
meaningful long-term growth opportunities. More specifically,
through our new partnership with Edlio, we now have the ability to
offer our Ally Managed Service to its portfolio of roughly
10,000 K-12 school websites.
Additionally, our partnership with Mopro gives us the ability to
offer our fully managed accessibility solution to its more than
10,000 sites that represent a variety of industries. Our
investments in new technology offerings, such as PDF remediations,
will also provide a diversified revenue stream for our business in
the near term as we look to onboard additional new partners
throughout the year."
Conference Call
AudioEye management will hold a conference call today,
May 14, 2019 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these
results.
AudioEye management will host the call, followed by a question
and answer period.
U.S. dial-in number: (877) 407-9208
International number: (201) 493-6784
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at (949)
574-3860.
The conference call will also be webcast live and available for
replay here and via the investor relations section of the
company's website. An audio recording will remain available via the
investor relations section of the company's website for 90
days.
A telephonic replay of the conference call will be available
after 7:30 p.m. Eastern time on the
same day through May 21, 2019.
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13690108
About AudioEye, Inc.
AudioEye is a technology company serving businesses committed to
providing equal access to their digital content. Through patented
technology, subject matter expertise and proprietary processes,
AudioEye is transforming how the world experiences digital content.
Leading with technology, AudioEye identifies and resolves issues of
accessibility and enhances the user experience, making digital
content more accessible and more usable for more people.
AudioEye's common stock trades on the Nasdaq Capital Market
under the symbol "AEYE." The Company maintains offices in
Tucson, Scottsdale, Atlanta,
New York and Washington
D.C. For more information about AudioEye and its online
accessibility solutions, please visit www.audioeye.com.
Forward-Looking Statements
Any statements in this press release about AudioEye's
expectations, beliefs, plans, objectives, prospects, financial
condition, assumptions or future events or performance are not
historical facts and are "forward-looking statements" as that term
is defined under the federal securities laws. Forward-looking
statements are often, but not always, made through the use of words
or phrases such as "believe", "anticipate", "should", "intend",
"plan", "will", "expects", "estimates", "projects", "positioned",
"strategy", "outlook" and similar words. You should read the
statements that contain these types of words carefully. Such
forward-looking statements contained herein include, but are not
limited to, statements regarding continued rapid expansion in 2019
and long-term growth opportunities, revenues and cash contract
bookings for the year ending December 31,
2019, the acceleration of public relations and marketing
efforts to increase the Company's pipeline, and the use of
financial resources and the addition of personnel to build on the
Company's market position. These statements are
subject to a number of risks, uncertainties and other factors that
could cause actual results to differ materially from what is
expressed or implied in such forward-looking statements, including
the variability of AudioEye's revenues and financial performance;
risks associated with product development and technological
changes; the acceptance of AudioEye's products in the marketplace
by existing and potential future customers; competition; and
general economic conditions. These and other risks are described
more fully in AudioEye's filings with the Securities and Exchange
Commission (the "SEC"), including AudioEye's Annual Report on Form
10-K for the year ended December 31,
2018 filed with the SEC on March 27,
2019. There may be events in the future that AudioEye is not
able to predict accurately or over which AudioEye has no control.
Forward-looking statements reflect management's view as of the date
of this press release, and AudioEye urges you not to place undue
reliance on these forward-looking statements. AudioEye does not
undertake any obligation to update such forward-looking statements
to reflect events or uncertainties after the date hereof.
About Key Operating Metrics
To supplement our financial information presented in
accordance with generally accepted accounting principles
in the United States (GAAP), we consider certain
operating measures that are not GAAP measures, including monthly
recurring revenues, cash contract bookings and cash contracts.
AudioEye reviews a number of operating metrics such as these to
evaluate its business, measure performance, identify trends,
formulate business plans, and make strategic decisions. We believe
these metrics and measures are useful to facilitate
period-to-period comparisons of our business and to facilitate
comparisons of our performance to that of other similar companies.
In this press release, we are reporting results and/or affirming
our previously announced guidance on cash contract bookings and
monthly recurring revenues.
AudioEye's cash contract bookings is the contracted amount of
money the customer commits to spend with the Company over an agreed
amount of time, generally ranging from 12 months up to 60
months.
AudioEye's cash contracts in excess of revenue and deferred
revenue is the remaining cash contract bookings that have not yet
been recognized as revenue or billed to the customer. This measure
represents the contractually agreed amount of money that is
remaining to be billed and paid under contracts and that will be
recognized in subsequent periods.
AudioEye's monthly recurring revenues is the Company's
annualized spend of a customer divided by 12.
Corporate Contact:
AudioEye, Inc.
Todd Bankofier, Chief Executive
Officer
tbankofier@audioeye.com
(520) 308-6140
Investor Contact:
Matt
Glover or Tom Colton
AEYE@gatewayir.com
(949) 574-3860
-Financial Tables to Follow-
AUDIOEYE,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited)
|
|
|
|
|
|
Three months ended
March 31,
|
|
2019
|
|
2018
|
Revenues
|
$
1,985,678
|
|
$
1,149,342
|
|
|
|
|
Cost of
revenue
|
902,984
|
|
587,464
|
|
|
|
|
Gross
profit
|
1,082,694
|
|
561,878
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling and
marketing
|
871,875
|
|
610,662
|
Research and
development
|
215,253
|
|
49,667
|
General and
administrative
|
2,136,326
|
|
1,064,625
|
Total operating
expenses
|
3,223,454
|
|
1,724,954
|
|
|
|
|
Operating
loss
|
(2,140,760)
|
|
(1,163,076)
|
|
|
|
|
Other income
(expense):
|
|
|
|
Unrealized (loss)
gain on marketable securities
|
(18)
|
|
228
|
Interest (expense)
income, net
|
(648)
|
|
237
|
Total other (loss)
income
|
(666)
|
|
465
|
|
|
|
|
Net loss
|
(2,141,426)
|
|
(1,162,611)
|
|
|
|
|
Dividends on Series A
Convertible preferred stock
|
(12,945)
|
|
(13,750)
|
|
|
|
|
Net loss available to
common stockholders
|
$
(2,154,371)
|
|
$
(1,176,361)
|
|
|
|
|
Net loss per common
share-basic and diluted
|
$
(0.28)
|
|
$
(0.18)
|
|
|
|
|
Weighted average
common shares outstanding-basic and diluted
|
7,611,296
|
|
6,466,563
|
|
|
|
AUDIOEYE,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
March 31,
|
|
December
31,
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash
|
$
4,089,717
|
|
$
5,741,549
|
Accounts receivable,
net
|
288,342
|
|
172,384
|
Marketable
securities, held in related party
|
492
|
|
510
|
Deferred costs, short
term
|
178,781
|
|
176,006
|
Prepaid expenses and
other current assets
|
129,388
|
|
49,901
|
Total current
assets
|
4,686,720
|
|
6,140,350
|
|
|
|
|
Property and
equipment, net
|
114,387
|
|
108,007
|
Right of use
assets
|
512,966
|
|
-
|
|
|
|
|
Deferred costs, long
term
|
105,085
|
|
93,790
|
Intangible assets,
net
|
1,961,787
|
|
2,061,404
|
Goodwill
|
700,528
|
|
700,528
|
|
|
|
|
Total
assets
|
$
8,081,473
|
|
$
9,104,079
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
340,861
|
|
$
93,544
|
Related party
payables
|
14,467
|
|
14,467
|
Finance lease
liabilities
|
37,404
|
|
30,172
|
Operating lease
liabilities
|
152,352
|
|
-
|
Deferred
rent
|
-
|
|
4,472
|
Deferred
revenue
|
2,574,097
|
|
2,626,712
|
Total current
liabilities
|
3,119,181
|
|
2,769,367
|
|
|
|
|
Long term
liabilities:
|
|
|
|
Finance lease
liabilities
|
55,165
|
|
51,150
|
Operating lease
liabilities
|
371,334
|
|
-
|
Deferred
rent
|
-
|
|
6,585
|
Deferred
revenue
|
310,967
|
|
402,075
|
|
|
|
|
Total
liabilities
|
3,856,647
|
|
3,229,177
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.00001 par value, 10,000,000 shares authorized
|
|
|
|
Series A Convertible
Preferred stock, $0.00001 par value, 200,000 shares designated,
105,000 shares issued and outstanding as of March 31, 2019 and
December 31, 2018
|
1
|
|
1
|
Common stock,
$0.00001 par value, 50,000,000 shares authorized, 7,623,227 and
7,579,995 shares issued and outstanding as of March 31, 2019 and
December 31, 2018, respectively
|
76
|
|
76
|
Additional paid-in
capital
|
48,509,276
|
|
48,017,926
|
Accumulated
deficit
|
(44,284,527)
|
|
(42,143,101)
|
Total stockholders'
equity
|
4,224,826
|
|
5,874,902
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
8,081,473
|
|
$
9,104,079
|
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SOURCE AudioEye, Inc.