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8-K - 8-K - IZEA Worldwide, Inc. | a8-k20150514.htm |
EXHIBIT 99.1
IZEA Reports Record First Quarter Revenue, Up 111%
Highest Quarterly Revenue in Company History of $4.1Million
Orlando, Florida (May 14, 2015) - IZEA, Inc. (OTCQB: IZEA), operator of the premiere online marketplace that connects brands and publishers with influential content creators, today announced record results for its first quarter ended March 31, 2015.
Financial Highlights Include:
• | Revenue for the quarter increased 111% to a record $4.1 million compared to Q1 2014. |
• | Sponsored Social represented $2.7 million in revenue, a 48% year-over-year increase. |
• | Content represented $1.4 million in revenue or 33% of total revenue. |
• | Bookings for the quarter grew 155% year-over-year to a record $4.3 million, up from $1.7 million in 2014. |
• | New opportunity pipeline for the quarter increased 77% year-over-year to $19.4 million. |
First Quarter Operational Highlights:
• | Completed acquisition of Ebyline, Inc. and added Content revenue stream. |
• | IZEAx aggregate network reach increased to 2.7 billion fans and followers at the end of the quarter, up 17% compared with Q4 2014 and 486% year-over-year. |
• | IZEAx registered users increased 83% to 446,000 compared to 243,0000 in Q4 2014, an increase of 792% year-over-year. |
• | Announced 3 new IZEAx partners, including Meredith Studios, Frederator and Bent Pixels |
• | 103 team members compared to 60 one year ago. |
“The first quarter represented multiple milestone events for IZEA. We completed the acquisition of Ebyline, Inc., launched initial integration with Vine, and delivered our first month in excess of $2.0 million in bookings. There is a tremendous amount of momentum and excitement right now as we realize the benefits of the strategic investments in team members and technology we made last year,” commented Ted Murphy, IZEA’s Chairman and Chief Executive Officer.
“We are seeing some early success in cross-selling Sponsored Social with Content from the Ebyline acquisition. IZEA benefitted from this cross-selling in our Q1 revenue and bookings numbers, but the contribution was limited to February and March, as the acquisition did not close until the end of January. Looking forward, we will continue ramping up our client development team, particularly as it relates to business to business specific content sales. We remain focused on top line growth, while prudently managing our expenses and investments in people and technology. I continue to be confident in our ability to grow IZEA bookings to $25 million and revenue to $23 million for the 2015 fiscal year.”
First Quarter 2015 Results:
Revenue for the first quarter of 2015 was $4,135,494 compared to $1,957,040 for the first quarter of 2014, an increase of 111% due to the increase in our Sponsored Social and Content sales. Gross profit for the quarter was $1,694,003, up from $1,307,507 during the same period in 2014 - an increase of 29.6%.
Operating expenses for the first quarter of 2015 were $3,442,001, compared to $2,005,007 during the same period in 2014, due to investments in additional sales and engineering staff along with increased advertising, marketing and public relations efforts and the assumption of Ebyline’s operating expenses.
Operating EBITDA was $(1,394,514) for the quarter compared to $(504,330) during the same period last year, primarily due to investments in new hires and technology along with the assumption of Ebyline overhead. Net loss for the quarter was $(4,270,912) compared to $(569,311) during the same period last
year, primarily due to a ($2,505,951) loss on the change in the fair value of derivatives and the increase in operating expenses. Cash used for operating activities was $1,528,112 during the three months ended March 31, 2015.
Basic and diluted income per common share for the quarter was $(.07), compared to basic and diluted loss per common share of $(.02) for the first quarter of 2014.
Investor Conference Call
The Company will host a conference call today at 5:00p.m. ET, during which IZEA management will discuss the financial results and be available to answer any questions from investors.
Conference Date: 05/14/15
Conference Start Time: 5:00 pm Eastern
Dial-In Number: 1-201-689-8471
Electronic replay of the conference call will be available through May 21, 2015 by dialing 1-858-384-5517 and entering PIN number 13609312. IZEA will also post a downloadable file onto the Investor Relations area of http://corp.izea.com.
About IZEA
IZEA operates the premiere online marketplace that connects brands with influential content creators. IZEA creators range from leading bloggers and social media personalities to A-List celebrities and professional journalists. Creators are compensated for developing and distributing unique content on behalf of brands including long form text, videos, photos and status updates. Brands receive influential consumer content and engaging, shareable stories that drive awareness. For more information about IZEA, visit http://corp.izea.com.
Financial Methodology & Related Disclosures
"EBITDA" is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. EBITDA is commonly defined as "earnings before interest, taxes, depreciation and amortization." We believe that EBITDA provides useful information to investors as it excludes transactions not related to the core cash operating business activities including non-cash transactions.
We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations. All companies do not calculate EBITDA in the same manner, and EBITDA as presented by IZEA may not be comparable to EBITDA presented by other companies. IZEA defines EBITDA as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock related compensation, gain or loss on asset disposals or impairment and all other income and expense items such as loss on exchanges and changes in fair value of derivatives, if applicable.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Statements in this press release that are forward-looking include the company's estimated levels of bookings and revenues for the 2015 fiscal year. These forward-looking statements are based largely on IZEA's current expectations and are subject to a number of risks and uncertainties, certain of which are beyond IZEA's control. Actual results could differ materially from these forward-looking statements as a result of, among other factors, competitive conditions in the social sponsorship segment in which IZEA operates, failure to popularize one or more of the marketplace platforms of IZEA, inability to obtain additional capital on a timely basis, difficulties in integrating Ebyline’s platforms and operations and achieving the expected benefits from the acquisition, and changing economic conditions that are less favorable than expected. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this press release will in fact occur. Please read the full statement and disclosures here: http://corp.izea.com/safe-harbor-statement.
IZEA Investor Relations
Budd Zuckerman
Genesis Select
(303) 415-0200
bzuckerman@genesisselect.com
IZEA Media Relations
Brent Diggins
Allison & Partners
(623) 201-5554
brent@allisonpr.com
IZEA, Inc.
Consolidated Balance Sheets
March 31, 2015 | December 31, 2014 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current: | |||||||
Cash and cash equivalents | $ | 3,960,219 | $ | 6,521,930 | |||
Accounts receivable | 2,525,961 | 2,156,378 | |||||
Prepaid expenses | 305,341 | 190,604 | |||||
Other current assets | 12,056 | 61,424 | |||||
Total current assets | 6,803,577 | 8,930,336 | |||||
Property and equipment, net of accumulated depreciation of $287,287 and $239,521 | 597,332 | 588,919 | |||||
Goodwill | 2,826,540 | — | |||||
Intangible assets, net of accumulated amortization of $98,833 and $0 | 2,271,167 | — | |||||
Software development costs, net of accumulated amortization of $113,775 and $85,331 | 455,100 | 483,544 | |||||
Security deposits | 119,194 | 100,641 | |||||
Total assets | $ | 13,072,910 | $ | 10,103,440 |
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 836,823 | $ | 310,611 | |||
Accrued expenses | 481,355 | 394,617 | |||||
Unearned revenue | 1,619,427 | 1,767,074 | |||||
Deferred rent | 2,994 | — | |||||
Current portion of capital lease obligations | 47,075 | 54,376 | |||||
Current portion of acquisition costs payable | 1,055,489 | — | |||||
Total current liabilities | 4,043,163 | 2,526,678 | |||||
Deferred rent | 113,985 | 106,531 | |||||
Capital lease obligations, less current portion | — | 7,291 | |||||
Acquisition costs payable, less current portion | 3,062,588 | — | |||||
Warrant liability | 5,709,416 | 3,203,465 | |||||
Total liabilities | 12,929,152 | 5,843,965 | |||||
Stockholders’ equity: | |||||||
Common stock, $.0001 par value; 200,000,000 shares authorized; 57,697,666 issued and outstanding | 5,770 | 5,770 | |||||
Additional paid-in capital | 27,350,250 | 27,195,055 | |||||
Accumulated deficit | (27,212,262 | ) | (22,941,350 | ) | |||
Total stockholders’ equity | 143,758 | 4,259,475 | |||||
Total liabilities and stockholders’ equity | $ | 13,072,910 | $ | 10,103,440 |
IZEA, Inc.
Unaudited Consolidated Statements of Operations
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Revenue | $ | 4,135,494 | $ | 1,957,040 | |||
Cost of sales | 2,441,491 | 649,533 | |||||
Gross profit | 1,694,003 | 1,307,507 | |||||
Operating expenses: | |||||||
General and administrative | 1,860,514 | 1,092,221 | |||||
Sales and marketing | 1,581,487 | 912,786 | |||||
Total operating expenses | 3,442,001 | 2,005,007 | |||||
Loss from operations | (1,747,998 | ) | (697,500 | ) | |||
Other income (expense): | |||||||
Interest expense | (18,770 | ) | (9,017 | ) | |||
Change in fair value of derivatives, net | (2,505,951 | ) | 135,601 | ||||
Other income (expense), net | 1,807 | 1,605 | |||||
Total other income (expense) | (2,522,914 | ) | 128,189 | ||||
Net loss | $ | (4,270,912 | ) | $ | (569,311 | ) | |
Weighted average common shares outstanding – basic | 57,697,666 | 37,135,738 | |||||
Basic loss per common share | $ | (0.07 | ) | $ | (0.02 | ) | |
Weighted average common shares outstanding – diluted | 57,697,666 | 37,135,738 | |||||
Diluted loss per common share | $ | (0.07 | ) | $ | (0.02 | ) |
IZEA, Inc.
Unaudited Consolidated Statements of Cash Flows
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (4,270,912 | ) | $ | (569,311 | ) | |
Adjustments to reconcile net loss to net cash used for operating activities: | |||||||
Depreciation | 47,019 | 17,867 | |||||
Amortization of software development costs and other intangible assets | 127,277 | 5,842 | |||||
Stock-based compensation | 142,331 | 115,338 | |||||
Stock issued or to be issued for payment of services | 35,050 | 58,360 | |||||
Change in fair value of derivatives, net | 2,505,951 | (135,601 | ) | ||||
Cash provided by (used for): | |||||||
Accounts receivable | 34,698 | 730,048 | |||||
Prepaid expenses and other current assets | (23,845 | ) | 6,590 | ||||
Accounts payable | 4,949 | (9,549 | ) | ||||
Accrued expenses | 50,363 | (41,870 | ) | ||||
Unearned revenue | (181,541 | ) | (242,361 | ) | |||
Deferred rent | 548 | 42,536 | |||||
Net cash used for operating activities | (1,528,112 | ) | (22,111 | ) | |||
Cash flows from investing activities: | |||||||
Purchase of equipment | (28,985 | ) | (9,563 | ) | |||
Increase in software development costs | — | (206,529 | ) | ||||
Acquisition, net of cash acquired | (995,286 | ) | — | ||||
Security deposits | — | (4,242 | ) | ||||
Net cash used for investing activities | (1,024,271 | ) | (220,334 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock and warrants, net | — | 10,982,169 | |||||
Proceeds from stock purchase plan subscriptions & issuance of warrants | 5,264 | — | |||||
Payments on notes payable and capital leases | (14,592 | ) | (19,845 | ) | |||
Net cash provided by (used for) financing activities | (9,328 | ) | 10,962,324 | ||||
Net increase (decrease) in cash and cash equivalents | (2,561,711 | ) | 10,719,879 | ||||
Cash and cash equivalents, beginning of year | 6,521,930 | 530,052 | |||||
Cash and cash equivalents, end of period | $ | 3,960,219 | $ | 11,249,931 | |||
Supplemental cash flow information: | |||||||
Cash paid during period for interest | $ | 2,362 | $ | 3,175 | |||
Non-cash financing and investing activities: | |||||||
Fair value of warrants issued | $ | — | $ | 12,382,216 | |||
Acquisition costs payable for assets acquired | $ | 5,537,064 | $ | — | |||
Acquisition of assets through capital lease | $ | — | $ | 41,339 |
Reconciliation of Net Loss to Operating EBITDA: | |||||||
Three Months Ended | |||||||
March 31, 2015 | March 31, 2014 | ||||||
Net loss | $ | (4,270,912 | ) | $ | (569,311 | ) | |
Non-cash stock-based compensation | 142,331 | 115,338 | |||||
Non-cash stock issued for payment of services | 35,050 | 58,360 | |||||
Change in the fair value of derivatives | 2,505,951 | (135,601 | ) | ||||
Interest expense | 18,770 | 9,017 | |||||
Depreciation & amortization | 174,296 | 17,867 | |||||
Operating EBITDA | $ | (1,394,514 | ) | $ | (504,330 | ) |