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 second quarter ended June
30, 2023.
Recent Highlights:
- Signed up 10 new clients and had 2 returning clients
- Launched a new product with a large indirect client that is
scaling
- Added the former CEO of MediaKitchen to the Executive team as
President
- Enhanced the IntentKey’s suite of AI solutions by adding
predictive Media Mix Modeling
- Launched the Audience Discovery Portal at inuvo.com/portal
- Enhanced the Company’s AI generated audience personas using the
ChatGPT API integration
- Interviewed in notable publications, including national
exposure on Yahoo Finance
Richard Howe, CEO of Inuvo, stated, “I am pleased to report that
our revenue increased sequentially by 40% from the first quarter of
2023 with June up roughly 16% year-over-year providing confidence
that we could be back to quarterly year-over-year growth in the
second half of the year. We made a significant hire, adding a
President to the executive team, we strengthen our balance sheet
with a $4 million capital raise and launched several transformative
AI technologies within the quarter. Our goal remains to be at the
forefront of artificial intelligence for advertising.”
Mr. Howe added, “We strongly believe that the industry we serve
is on the verge of a material change. We see increasing pressure
legislatively and technologically with respect to using consumer
identity and data. There are now 11 states with privacy laws and 5
states with active privacy bills. Apple continues to implement
browser features that thwart or limit conventional AdTech from
using 3rd and 1st party cookies, IP addresses, email addresses and
in their most recent IOS release, URL tracking. The writing is on
the wall.”
Financial Results for the Three and Six Month Ended June
30, 2023Net revenue for the second quarter of 2023 totaled
$16.7 million, compared to $22.7 million for the same period last
year. Net revenue for the six months ended June 30, 2023, totaled
$28.5 million compared to $41.3 million for the same period last
year. The lower revenue this year compared to last year was
attributable to the loss of a Direct Customer in the fourth quarter
of last year.
Cost of revenue for the second quarter of 2023 totaled $2.4
million, compared to $9.3 million for the same period last year.
Cost of revenue for the six months ended June 30, 2023, totaled
$5.6 million as compared to $17.9 million for the same period last
year. The decrease in the cost of revenue for the three months and
six months ended June 30, 2023, as compared to the same periods
last year, was related to the decline in Direct Customers.
Gross profit for the three and six months ended June 30, 2023,
totaled $14.3 million and $22.9 million, respectively, as compared
to $13.4 million and $23.3 million, respectively, for the same
periods last year. Gross profit margin for the three and six months
ended June 30, 2023, was 85.8% and 80.5%, respectively, as compared
to 59.1% and 56.5%, respectively, for the same periods last year.
The higher gross margin was due to changes in revenue mix, where a
greater percentage of the revenue this year was from Indirect
Customers, which typically have higher gross margins.
Operating expenses for the three months ended June 30, 2023,
totaled $17.6 million compared to $16.2 million for the same period
last year. Operating expenses for the six months ended June 30,
2023, totaled $29.7 million compared to $28.3 million for the same
period last year. We had $1.6M and $2.7M of non cash-based expenses
for the three and six month periods respectively.
Net loss for the second quarter of 2023 totaled $3.4 million, or
$0.03 per basic and diluted share, as compared to net loss of $3.2
million, or $0.03 per basic and diluted share, for the same period
last year. Net loss for the six months ended June 30, 2023, totaled
$6.8 million, or $0.05 per basic and diluted share, as compared to
net loss of $5.3 million, or $0.04 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 second quarter of 2023, compared
to a loss of approximately $142 thousand for the same period last
year. Adjusted EBITDA was a loss of approximately $4.1 million for
the six months ended June 30, 2023, compared to a loss of
approximately $863 thousand for the same period last year.
Liquidity
and Capital Resources:
As of June 30, 2023, Inuvo had $5.0 million in
cash and cash equivalents, approximately $2.0 million of working
capital, and a working capital facility of $5.0 million with no
outstanding balance.
As of June 30, 2023, Inuvo had 137,817,253
common shares issued and outstanding.
Conference Call Details: Date: Thursday, August
10, 2023 Time: 4:15 p.m. Eastern Time Toll-free Dial-in Number:
1-888-886-7786International Dial-in Number:
+1-416-764-8658Conference ID: 26719286Webcast Link: HEREAn audio
replay of the call will be available through August 24, 2023, and
can be accessed by dialing 844-512-2921 for U.S. callers or +1
412-317-6671 for international callers and by entering the access
code: 26719286.
About InuvoInuvo®, 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, including statements regarding Inuvo’s
quarter-end financial close process and preparation of financial
statements for the quarter that are subject to risks and
uncertainties that could cause results to be materially different
than expectations. 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 10, 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 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 :David Waldman / Natalya
RudmanCrescendo Communications, LLCTel: (212)
671-1020inuv@crescendo-ir.com
(Tables follow)
INUVO,
INC. |
CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June
30 |
|
June
30 |
|
June
30 |
June
30 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Net
revenue |
|
$16,651,405 |
|
|
$22,651,305 |
|
|
$28,498,845 |
|
$41,260,672 |
|
Cost of
revenue |
|
|
2,368,540 |
|
|
|
9,273,589 |
|
|
|
5,559,103 |
|
|
17,935,095 |
|
Gross
profit |
|
|
14,282,865 |
|
|
|
13,377,716 |
|
|
|
22,939,742 |
|
|
23,325,577 |
|
Operating
expenses |
|
|
85.8% |
|
|
|
59.1% |
|
|
|
80.5% |
|
|
56.5% |
|
Marketing
costs |
|
|
12,056,616 |
|
|
|
10,988,409 |
|
|
|
19,144,166 |
|
|
18,157,858 |
|
Compensation |
|
|
3,253,416 |
|
|
|
3,215,890 |
|
|
|
6,676,257 |
|
|
6,373,596 |
|
Selling,
general and administrative |
|
|
2,311,885 |
|
|
|
2,011,237 |
|
|
|
3,893,774 |
|
|
3,737,909 |
|
Total
operating expenses |
|
|
17,621,917 |
|
|
|
16,215,536 |
|
|
|
29,714,197 |
|
|
28,269,363 |
|
Operating
loss |
|
|
(3,339,052) |
|
|
|
(2,837,820) |
|
|
|
(6,774,455) |
|
|
(4,943,786) |
|
Interest
(expense) income, net |
|
|
(38,186) |
|
|
|
3,070 |
|
|
|
(57,306) |
|
|
2,071 |
|
Other income
(loss) , net |
|
|
- |
|
|
|
(395,177) |
|
|
|
14,418 |
|
|
(377,475) |
|
Net
loss |
|
|
(3,377,238) |
|
|
|
(3,229,927) |
|
|
|
(6,817,343) |
|
|
(5,319,190) |
|
Other
comprehensive income |
|
|
|
|
|
|
|
Unrealized
loss on marketable securities |
|
|
- |
|
|
|
(124,253) |
|
|
|
84,868 |
|
|
(222,409) |
|
Comprehensive loss |
|
|
(3,377,238) |
|
|
|
(3,354,180) |
|
|
|
(6,732,475) |
|
|
(5,541,599) |
|
|
|
|
|
|
|
|
|
Earnings per
share, basic and diluted |
|
|
|
|
|
|
|
Net loss
income |
|
($0.03) |
|
|
($0.03) |
|
|
($0.05) |
|
($0.04) |
|
Weighted
average shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
127,249,916 |
|
|
|
119,827,944 |
|
|
|
124,115,098 |
|
|
118,788,819 |
|
Diluted |
|
|
127,249,916 |
|
|
|
119,827,944 |
|
|
|
124,115,098 |
|
|
118,788,819 |
|
|
|
|
|
|
|
|
|
INUVO, INC. |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
December 31 |
|
|
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalent |
|
$5,045,112 |
|
$2,931,415 |
|
Marketable securities-short
term |
|
|
- |
|
|
1,529,464 |
|
Accounts receivable, net |
|
|
10,795,658 |
|
|
11,119,892 |
|
Prepaid expenses and other
current assets |
|
|
828,601 |
|
|
798,977 |
|
Total current assets |
|
|
16,669,371 |
|
|
16,379,748 |
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
1,680,448 |
|
|
1,668,972 |
|
|
|
|
|
|
|
Intangible assets, net of
accumulated amortization |
|
|
9,853,342 |
|
|
9,853,342 |
|
Goodwill |
|
|
5,157,041 |
|
|
5,649,291 |
|
Other assets |
|
|
924,597 |
|
|
2,005,957 |
|
|
|
|
|
|
|
Total assets |
|
$34,284,799 |
|
$35,557,310 |
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
|
$6,192,824 |
|
$8,044,802 |
|
Accrued expenses and other current liabilities |
|
|
8,435,093 |
|
|
5,550,984 |
|
Total current liabilities |
|
|
14,627,917 |
|
|
13,595,786 |
|
|
|
|
|
|
|
Long-term liabilities |
|
|
154,230 |
|
|
212,208 |
|
|
|
|
|
|
|
Total stockholders'
equity |
|
|
19,502,652 |
|
|
21,749,316 |
|
Total liabilities and
stockholders' equity |
|
$34,284,799 |
|
$35,557,310 |
|
RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE
TAXES TO ADJUSTED EBITDA |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
June
30 |
|
June
30 |
|
June
30 |
June
30 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Net
loss |
|
(3,377,238 |
) |
|
$ |
(3,229,927 |
) |
|
$ |
(6,817,343 |
) |
$ |
(5,319,190 |
) |
|
Interest
(Income) Expense |
|
38,186 |
|
|
|
(3,070 |
) |
|
|
57,306 |
|
|
(2,071 |
) |
|
Depreciation |
|
432,053 |
|
|
|
372,939 |
|
|
|
824,954 |
|
|
729,732 |
|
|
Amortization |
|
273,495 |
|
|
|
270,563 |
|
|
|
550,263 |
|
|
627,741 |
|
|
EBITDA |
|
(2,633,504 |
) |
|
|
(2,589,495 |
) |
|
|
(5,384,820 |
) |
|
(3,963,788 |
) |
|
Stock-based
compensation |
|
503,061 |
|
|
|
684,376 |
|
|
|
935,145 |
|
|
1,355,534 |
|
|
Non
recurring items: |
|
|
|
|
|
|
|
|
Expense of
fraudulent media |
|
|
|
|
1,367,800 |
|
|
|
|
1,367,800 |
|
|
Unrealized
loss on marketable securities |
|
|
|
|
395,177 |
|
|
|
|
377,475 |
|
|
Doubtful
account reserve |
|
378,928 |
|
|
|
|
|
361,097 |
|
|
|
Adjusted
EBITDA |
|
(1,751,515 |
) |
|
|
(142,142 |
) |
|
|
(4,088,578 |
) |
|
(862,979 |
) |
|
|
|
|
|
|
|
|
|
|
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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