Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing
technology, today announced its financial results for the first
quarter ending March 31, 2021.
Richard Howe, CEO of Inuvo, stated, “We continued growing both
within the IntentKey platform, which was up 15% year-over-year, and
within the ValidClick platform which has grown 9% compounded
monthly since its pandemic low in May of 2020. The first quarter is
our seasonally soft quarter and as such we anticipate our overall
growth in Q2 to accelerate and exceed 50% year-over-year on the
back of this continued post-pandemic growth within both product
lines.” Mr. Howe added, “While we had a negative Adjusted EBITDA in
the quarter, it was a 36% year-over-year improvement, which
supports our projections that we should be back to producing
positive Adjusted EBITDA within the second half of the year. We
have a strong balance sheet with $17.8 million of cash and we
believe we could not be better positioned to capture market share
when the 3rd party cookie disappears in 2022.”
Operational Highlights During the First Quarter of 2021
to Date:
- Launched the Software-as-a-Service (SaaS) version of the
IntentKey with multiple clients now committed and/or already using
the solution.
- Signed multiple new clients for the IntentKey platform among
which included two of the most respected technology companies in
the world.
- Signed a Casino/Resort company where for the first time the
entire suite of IntentKey capabilities and channels were leveraged
concurrently.
- Renewed our largest ValidClick partner, one of the largest
companies in the world, for an additional 2-year term.
- Delivered results to IntentKey clients that exceeded their
goals by 48% and in at least one case delivered in excess of an
88:1 Return on Advertising Spend.
- Raised $14.25 million in additional capital bringing our cash
balance at the end of March 2021 to $17.8 million.
- Continued to successfully deliver cookieless campaigns that
position Inuvo well for the industry disruption coming in
2022.
- Expanded sales, sales support, and account management to 18
people, two of which were hired in Canada to support the
IntentKey’s expansion North.
Financial Results for the First Quarter Ended March 31,
2021:Net revenue for the first quarter ended March 31,
2021, totaled $10.6 million as compared to $14.9 million during the
same period in the year prior, a decrease of 28.9% year-over-year
predominately due to pandemic-induced lower revenue within the
ValidClick platform. Revenue for the month of March 2021 for
ValidClick was up 143% over its low revenue month in May 2020.
IntentKey revenue, which accounted for 20.1% of overall revenue
during the first quarter of 2021 as compared to 12.4% for the same
period the year prior, grew 15% year-over-year to $2.1 million for
the first quarter of 2021 as compared to $1.9 million for the first
quarter in 2020.
Cost of revenue for the first quarter ended March 31, 2021,
totaled $1.4 million as compared to $3.4 million during the same
period the year prior. The decrease in the cost of revenue for the
quarter ended March 31, 2021, compared to the same quarter in 2020
was due primarily to lower year-over-year revenues within
ValidClick as a result of the pandemic.
Gross profit margin for the first quarter of 2021 improved to
86.4% as compared to 77% for the same period the year prior. Gross
profit totaled $9.2 million for the first quarter ended March 31,
2021, as compared to $11.5 million for the same period the year
prior, a decrease of 20.2%.
Operating expenses decreased 16.1% to $11.8 million for the
first quarter of 2021 as compared to $14 million for the same
period the year prior.
Other income in the quarter included $420,000 dollars in
licensing obligations for the use of ValidClick associated with a
contract signed in March of 2020 that ended in March of 2021.
The net loss for the first quarter of 2021 totaled $2.2 million
or $0.02 per basic and diluted share as compared to the net loss of
$2.8 million or $0.05 per basic and diluted share for the same
period the year prior.
Adjusted EBITDA was a loss of $878 thousand in the first quarter
of 2021, an improvement of 36% year-over-year.
Liquidity and Capital Resources:On March 31,
2021, Inuvo had $17.8 million in cash, $16.8 million of working
capital, an unused working capital facility of $5 million and no
debt.
As of March 31, 2021, Inuvo had 118,518,445 common shares issued
and outstanding.
Conference Call Details:The Company will host a
conference call on Thursday, May 13, 2021 at 4:30 p.m. Eastern Time
(ET) to discuss its financial results for the first quarter ended
March 31, 2021 and provide a business update.
Conference Call Details:Date: Thursday, May 13,
2021Time: 4:30 p.m. Eastern TimeToll-free Dial-in Number:
1-800-289-0438International Dial-in Number:
1-323-794-2423Conference ID: 9502309Participant Link:
http://public.viavid.com/index.php?id=144549
A telephone replay will be available through Thursday, May 27,
2021. To access the replay, please dial 1-844-512-2921 (domestic)
or 1-412-317-6671 (international). At the system prompt, please
enter the code 9502309 followed by the # sign. You will then be
prompted for your name, company, and phone number. Playback will
then automatically begin.
About InuvoInuvo®, 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
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INUVO, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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March 31 |
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December 31, |
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2021 |
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2020 |
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Assets |
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Cash |
|
$17,805,324 |
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$7,890,665 |
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Accounts
receivable, net |
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5,749,261 |
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6,227,610 |
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Prepaid expenses
and other current assets |
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534,471 |
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413,435 |
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Total current
assets |
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24,089,056 |
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14,531,710 |
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Property and
equipment, net |
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1,292,933 |
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1,187,061 |
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Goodwill |
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9,853,342 |
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9,853,342 |
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Intangible assets,
net |
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8,119,713 |
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8,586,089 |
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Other assets |
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1,194,551 |
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1,023,369 |
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Total other
assets |
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19,167,606 |
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19,462,800 |
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Total assets |
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$44,549,595 |
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$35,181,571 |
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Liabilities and
Stockholders’ Equity |
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Accrued expenses
and other current liabilities |
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$4,508,861 |
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$4,680,912 |
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Accounts
payable |
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2,790,432 |
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4,048,260 |
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Total current
liabilities |
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7,299,293 |
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8,729,172 |
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Deferred tax
liability |
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107,000 |
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107,000 |
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Other long-term
liabilities |
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628,761 |
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1,056,285 |
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Total long-term
liabilities |
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735,761 |
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1,163,285 |
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Total
stockholders' equity |
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36,514,541 |
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25,289,114 |
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Total liabilities
and stockholders' equity |
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$44,549,595 |
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$35,181,571 |
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INUVO, INC. |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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Three Months Ended |
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March 31 |
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March 31 |
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2021 |
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2020 |
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Net revenue |
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$10,617,809 |
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$14,932,983 |
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Cost of revenue |
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1,444,059 |
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3,439,501 |
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Gross profit |
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9,173,750 |
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11,493,482 |
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Operating expenses |
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Marketing costs |
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7,305,784 |
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9,622,823 |
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Compensation |
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2,737,867 |
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2,344,235 |
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Selling, general and
administrative |
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1,724,978 |
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2,058,842 |
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Total operating expenses |
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11,768,629 |
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14,025,900 |
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Operating loss |
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(2,594,879 |
) |
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(2,532,418 |
) |
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Interest expense, net |
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(22,389 |
) |
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(152,511 |
) |
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Other income (expense),
net |
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470,000 |
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(140,307 |
) |
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Net loss before taxes |
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(2,147,268 |
) |
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(2,825,236 |
) |
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Net loss |
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(2,147,268 |
) |
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(2,825,236 |
) |
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Earnings per share, basic and
diluted |
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Net loss income |
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($0.02 |
) |
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($0.05 |
) |
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Weighted average shares
outstanding |
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Basic |
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114,430,201 |
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53,642,787 |
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Diluted |
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114,430,201 |
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53,642,787 |
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RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE
TAXES TO ADJUSTED EBITDA |
(unaudited) |
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Three Months Ended |
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March 31 |
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March 31 |
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2021 |
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2020 |
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Operating loss |
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($2,147,268 |
) |
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($2,825,236 |
) |
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Interest Expense |
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$22,389 |
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$152,511 |
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Depreciation |
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305,528 |
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369,372 |
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Amortization |
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546,493 |
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572,054 |
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EBITDA |
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(1,272,858 |
) |
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(1,731,299 |
) |
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Stock-based compensation |
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394,870 |
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208,897 |
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Non-recurring items: |
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Adjustment to derivative
liability accounts |
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- |
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140,307 |
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Adjusted EBITDA |
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($877,988 |
) |
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($1,382,095 |
) |
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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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