Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing
technology, powered by artificial intelligence (AI) that serves
brands and agencies, today provided a business update and announced
its financial results for the fourth quarter and full year ended
December 31, 2022.
Richard Howe, CEO of Inuvo, stated, “In 2022, we grew revenue,
added new clients, and increased awareness. Throughout the year, we
successfully implemented our strategy of bringing together Inuvo’s
collective capabilities so we could better serve clients. As a
result, I am pleased to report we achieved revenue growth of 26%
for the fiscal year 2022.”
Mr. Howe continued, “As a technology company on the forefront of
artificial intelligence, we continued to make significant AI
advancements in 2022. There are many companies now asserting the
integration of artificial intelligence into their solutions. There
are few companies whose AI definition revolves around an
intelligence that can discern the needs, emotions, and thinking of
the humans it is designed to interact with, and this is exactly
what differentiates the IntentKey from all other AI technologies
within advertising.”
Financial Results for the Fourth Quarter and Full Year
Ended December 31, 2022:
Net revenue for the fourth quarter of 2022
totaled $17.3 million, compared to $19.7 million for the same
period last year. Although the fourth quarter of 2022 started
strong, by December we experienced a softening in demand for
advertising and lost a client. Net revenue for the full year ended
December 31, 2022 totaled $75.6 million, an increase of
approximately 26.4%, compared to $59.8 million for the same period
last year.
Cost of revenue for the fourth quarter of 2022,
totaled $5.5 million, compared to $8.5 million for the same period
last year. The decrease in the cost of revenue for the three months
ended December 31, 2022, as compared to the same period last year,
was primarily related to the lower revenue in the current quarter.
Cost of revenue for the full year ended December 31, 2022, totaled
$30.2 million, as compared to $15.9 million for the same period
last year. The increase in the cost of revenue for the full year
ended December 31, 2022, as compared to 2021, was related to the
growth associated with Direct revenue as a percentage of overall
revenue.
Gross profit for the fourth quarter of 2022 and
full year ended December 31, 2022 totaled $11.7 million and $45.4
million, respectively, as compared to $11.3 million and $43.9
million, respectively, for the same periods last year. Gross profit
margin for the fourth quarter of 2022 and full year ended December
31, 2022 was approximately 68.0% and 60.0%, respectively, as
compared to 57.1% and 73.4%, respectively, for the same periods
last year.
Operating expenses for the fourth quarter of
2022 totaled $15.7 million, compared to $12.3 million for the same
period last year. The higher operating expense is primarily due to
increased traffic acquisition costs, corporate branding expense and
accounts receivable reserve. Operating expenses for the full year
ended December 31, 2022 totaled $58.0 million, compared to $51.7
million for the same period last year. Operating expenses for the
full year ended December 31, 2022 included a marketing expense of
$1.4 million related to client refunds for the invalid clicks
purchased from a prominent advertising platform, from whom the
Company expects reimbursement. The company has withheld payment of
an equivalent amount of payables due to the advertising
platform.
Other expense/income for the fourth quarter of
2022 and the full year ended December 31, 2022 was an expense of
approximately $34 thousand and $436 thousand, respectively,
compared to an expense of $158 thousand and an income of $257
thousand for the same periods last year. The other expense this
year was due to unrealized and realized losses on trading
securities. Other income, net, for the year ended December 31, 2021
included the reversal of deferred revenue from the contract
cancellation of approximately $415 thousand and reversal of an
accrued sales reserve of $50 thousand, partially offset by the
unrealized losses on trading securities.
Net loss for the fourth quarter of 2022 was $4.0
million, or $0.03 per basic and diluted share, as compared to net
loss of $1.2 million, or $0.01 per basic and diluted share, for the
same period last year. Net loss for the full year ended December
31, 2022 totaled $13.1 million, or $0.11 per basic and diluted
share, as compared to net loss of $7.6 million, or $0.06 per basic
and diluted share, for the same period last year.
Adjusted EBITDA [see reconciliation table below]
was a loss of approximately $1.8 million in the fourth quarter of
2022, compared to an Adjusted EBITDA income of approximately $307
thousand for the same period last year. Adjusted EBITDA was a loss
of approximately $5.0 million for the full year ended December 31,
2022, compared to a loss of approximately $1.9 million for the same
period last year.
Liquidity and Capital Resources:
On December 31, 2022, Inuvo had $4.5 million in
cash, cash equivalents and short-term marketable securities, $2.8
million of working capital, an unused working capital facility of
$5.0 million and no debt.
As of December 31, 2022, Inuvo had 120,137,124
common shares issued and outstanding.
Conference Call Details: Date: Thursday,
March 9, 2023Time: 4:15 p.m. Eastern Time Toll-free Dial-in
Number: 1-877-407-9208International Dial-in Number:
1-201-493-6784Conference ID: 13736863Webcast Link: HERE
A telephone replay will be available through Thursday, March 23,
2023. 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 13736863 followed by the # sign. You will then be
prompted for your name, company, and phone number. Playback will
then automatically begin.
About Inuvo
Inuvo®, Inc. (NYSE American: INUV) is a market
leader in Artificial Intelligence built for advertising. Its
IntentKey AI solution is a first-of-its-kind proprietary and
patented technology capable of identifying and actioning to the
reasons why consumers are interested in products, services, or
brands, not who those consumers are. To learn more, visit
www.inuvo.com.
Safe Harbor / Forward-Looking Statements
This 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,
2022, as filed on March 9, 2023, 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 fourth 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:David Waldman / Natalya
RudmanCrescendo Communications, LLCTel: (212)
671-1020inuv@crescendo-ir.com
(Tables
follow)
|
|
|
|
|
|
|
|
INUVO,
INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve
Months Ended |
|
|
December
31 |
|
December
31 |
|
December
31 |
December
31 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Net
revenue |
|
$ |
17,270,886 |
|
|
$ |
19,736,261 |
$ |
75,603,745 |
|
$ |
59,830,688 |
|
Cost of
revenue |
|
|
5,527,244 |
|
|
|
8,459,820 |
|
|
|
30,244,387 |
|
|
15,925,837 |
|
Gross
profit |
|
|
11,743,642 |
|
|
|
11,276,441 |
|
|
|
45,359,358 |
|
|
43,904,851 |
|
Operating
expenses |
|
|
|
|
|
|
|
Marketing
costs |
|
|
10,143,119 |
|
|
|
7,414,070 |
|
|
|
36,921,139 |
|
|
33,096,000 |
|
Compensation |
|
|
2,852,084 |
|
|
|
2,923,046 |
|
|
|
12,463,095 |
|
|
11,381,279 |
|
General and
administrative |
|
|
2,680,971 |
|
|
|
1,971,476 |
|
|
|
8,624,998 |
|
|
7,198,213 |
|
Total
operating expenses |
|
|
15,676,174 |
|
|
|
12,308,592 |
|
|
|
58,009,232 |
|
|
51,675,492 |
|
Operating
loss |
|
|
(3,932,532 |
) |
|
|
(1,032,151 |
) |
|
|
(12,649,874 |
) |
|
(7,770,641 |
) |
Financing
expense, net |
|
|
(10,033 |
) |
|
|
(50,342 |
) |
|
|
(21,111 |
) |
|
(86,983 |
) |
Other income
(expense) , net |
|
|
(34,218 |
) |
|
|
(158,493 |
) |
|
|
(435,554 |
) |
|
256,975 |
|
Net
loss |
|
|
(3,976,783 |
) |
|
|
(1,240,986 |
) |
|
|
(13,106,539 |
) |
|
(7,600,649 |
) |
Other
comprehensive income |
|
|
|
|
|
|
|
Unrealized
gain (loss) on marketable securities |
|
|
47,634 |
|
|
|
53,737 |
|
|
|
(138,605 |
) |
|
53,737 |
|
Comprehensive loss |
|
|
(3,929,149 |
) |
|
|
(1,187,249 |
) |
|
|
(13,245,144 |
) |
|
(7,546,912 |
) |
|
|
|
|
|
|
|
|
Earnings per
share, basic and diluted |
|
|
|
|
|
|
|
Net
loss |
|
($ |
0.03 |
) |
|
($ |
0.01 |
) |
|
($ |
0.11 |
) |
($ |
0.06 |
) |
Weighted
average shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
120,137,124 |
|
|
|
117,613,845 |
|
|
|
119,826,036 |
|
|
117,613,845 |
|
Diluted |
|
|
119,995,367 |
|
|
|
117,613,845 |
|
|
|
119,826,036 |
|
|
117,613,845 |
|
INUVO,
INC. |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
December
31 |
|
December
31 |
|
|
|
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalent |
|
$ |
2,931,415 |
|
|
$ |
10,475,964 |
|
Marketable
securities-short term |
|
|
1,529,464 |
|
|
|
1,927,979 |
|
Accounts
receivable, net |
|
|
11,119,892 |
|
|
|
9,265,813 |
|
Prepaid
expenses and other current assets |
|
|
798,977 |
|
|
|
1,408,186 |
|
Total
current assets |
|
|
16,379,747 |
|
|
|
23,077,942 |
|
|
|
|
|
|
|
Property and
equipment, net |
|
|
1,668,972 |
|
|
|
1,506,766 |
|
|
|
|
|
|
|
Intangible assets, net of accumulated amortization |
|
9,853,342 |
|
|
|
6,720,585 |
|
Goodwill |
|
|
5,649,291 |
|
|
|
9,853,342 |
|
Other
assets |
|
|
2,005,957 |
|
|
|
2,838,439 |
|
|
|
|
|
|
|
Total
assets |
|
$ |
35,557,310 |
|
|
$ |
43,997,074 |
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts payable |
|
$ |
8,044,802 |
|
|
$ |
4,844,716 |
|
Accrued expenses and other current liabilities |
|
5,550,984 |
|
|
|
5,817,823 |
|
Total
current liabilities |
|
|
13,595,786 |
|
|
|
10,662,539 |
|
|
|
|
|
|
|
Long-term
liabilities |
|
|
212,208 |
|
|
|
526,540 |
|
|
|
|
|
|
|
Total
stockholders' equity |
|
|
21,749,316 |
|
|
|
32,807,995 |
|
Total
liabilities and stockholders' equity |
|
$ |
35,557,310 |
|
|
$ |
43,997,074 |
|
|
|
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve
Months Ended |
|
|
December
31 |
|
December
31 |
|
December
31 |
December
31 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Net
loss |
|
$ |
(3,976,783 |
) |
|
$ |
(1,240,986 |
) |
|
$ |
(13,106,539 |
) |
$ |
(7,600,649 |
) |
Financing
expense, net |
|
|
10,033 |
|
|
|
50,342 |
|
|
|
21,111 |
|
|
86,983 |
|
Depreciation |
|
|
402,989 |
|
|
|
332,918 |
|
|
|
1,527,663 |
|
|
1,277,664 |
|
Amortization |
|
|
276,738 |
|
|
|
551,700 |
|
|
|
1,175,222 |
|
|
2,188,251 |
|
EBITDA |
|
|
(3,287,023 |
) |
|
|
(306,026 |
) |
|
|
(10,382,543 |
) |
|
(4,047,751 |
) |
Non-recurring or non-representaive items: |
|
|
|
|
|
Stock-based
compensation |
|
|
459,323 |
|
|
|
613,238 |
|
|
|
2,350,314 |
|
|
2,179,254 |
|
Expense of
fraudulent media |
|
|
- |
|
|
|
- |
|
|
|
1,367,800 |
|
|
- |
|
Realized and
unrealized loss on investments |
|
|
34,218 |
|
|
|
- |
|
|
|
435,554 |
|
|
- |
|
Doubtful
account reserve |
|
|
975,243 |
|
|
|
- |
|
|
|
1,237,774 |
|
|
- |
|
Adjusted EBITDA |
|
|
(1,818,239 |
) |
|
|
307,212 |
|
|
|
(4,991,101 |
) |
|
(1,868,497 |
) |
|
|
|
|
|
|
|
|
Reconciliation of Operating Loss to EBITDA and Adjusted
EBITDA
We present EBITDA and Adjusted EBITDA as a
supplemental measure of our performance. We defined EBITDA as Net
loss plus (i) interest expense, (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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