Attached files
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| EX-99.2 - CONFERENCE CALL SCRIPT - Inuvo, Inc. | inuv_ex992.htm |
| 8-K - CURRENT REPORT - Inuvo, Inc. | inuv_8k.htm |
Exhibit 99.1
Inuvo Reports Fourth Quarter 2016 Results
Little
Rock, AR, February 13, 2017 -- Inuvo, Inc. (NYSE MKT: INUV), an
advertising technology and digital publishing company, today
announced financial results for the three months and full year
ended December 31, 2016.
“We
made tremendous progress in the second half of 2016, growing 12%
sequentially in both the third and fourth quarters. We are
particularly pleased with the growth in the Partner Network
segment, which increased 86% between the first and last quarters of
2016,” stated Rich Howe, Chairman and CEO of Inuvo. “On
an Adjusted EBITDA basis, we delivered $612 thousand, or $0.02 per
share in the fourth quarter, up 46% over the third quarter.
“
Mr.
Howe continued, “In 2017, we expect double digit growth in
the Inuvo business and an additional $15 million in revenue from
the NetSeer acquisition. The NetSeer business will be rolled up and
reported within the Ad-Tech segment going
forward.”
2016 Full Year and Fourth
Quarter Financial Results
●
Fourth Quarter 2016
revenue increased 12% sequentially to $19.7 million.
●
Fourth Quarter 2016
Adjusted EBITDA increased 46% sequentially to $612 thousand, or
$0.02 per share.
●
Fourth Quarter 2016
GAAP net loss was $309 thousand or $0.01 net loss per
share.
●
2016 revenue
increased 2% year-over-year to $71.5 million.
●
Adjusted EBITDA for
2016 was $2.6 million.
●
2016 GAAP net loss
was $773 thousand or $0.03 net loss per share.
●
Cash balance at
December 31, 2016 was $3.9 million.
●
There was no bank
debt at December 31, 2016.
●
Balance sheet
current ratio improved 12.5% year-over-year, to 0.99 at December
31, 2016.
●
Inuvo commenced a
stock repurchase program in the fourth quarter 2016.
The
Inuvo business is managed along two segments, the Partner Network
(Ad-Tech) and the Owned and Operated Network (Digital Publishing).
The Partner Network facilitates transactions between advertisers
and our partners' websites and applications. The Owned and Operated
Network designs, builds and markets mobile-ready consumer websites
and applications mainly under the ALOT brand. Both segments utilize
the company’s ad delivery software as a service (SaaS)
technologies. Beginning with the first quarter of 2017, we will
rename our segments to better align with the underlying business
model. The Partner Network will be known as the “Ad
Tech” segment and the Owned & Operated Network will be
known as the “Digital Publishing” segment.
Financial results for the three-month period ended December 31,
2016
Net
revenues for the fourth quarter of 2016, were $19.7 million
compared to $21.0 million for the three months ended December 31,
2015. Revenue in our Partner Network was $9.8 million in the fourth
quarter of 2016 compared to $6.2 million in the three months that
ended December 31, 2015, a 58% increase. Strong demand in our
partner ads operations as well as greater acceptance by publishers
of our SearchLinks technology are the primary reasons for the
increase. Revenue in the Owned and Operated Network was $9.8
million in the fourth quarter of 2016 compared to $14.8 million in
the three months that ended December 31, 2015, a 34% decrease. The
lower revenue in the Owned & Operated Network in the fourth
quarter of 2016 compared to the same quarter of 2015 was due in
part to a reduction in marketing spend activity while new marketing
technology was being developed as a means to increase margins in
the segment.
1
Operating
expenses were approximately $11.9 million in the fourth quarter of
2016 compared to $15.6 million in the same quarter of 2015, a 24%
decrease. The lower operating expense in the current year fourth
quarter compared to the prior year quarter is primarily due to
lower marketing costs.
For the
quarter ended December 31, 2016, GAAP net loss was $309 thousand or
$0.01 net loss per share compared to $617 thousand net income, or
$0.03 net income per diluted share, for the quarter ended December
31, 2015. Adjusted EBITDA in the period was $612 thousand or $0.02
per share.
Financial results for the year ended December 31, 2016
Net
revenues for the year ended December 31, 2016, were $71.5 million
compared to $70.4 million for the year ended December 31, 2015.
Revenue in our Partner Network was $26.0 million in 2016 compared
to $30.3 million in the year ended December 31, 2015, a 14%
decrease. The lower revenue this year compared to the prior year is
due in part to lower advertiser demand we experienced beginning in
the second quarter of 2016, but also as a result of changes to
revenue reporting between segments that occurred in
2015. Revenue in the Owned and Operated Network was $45.5
million in 2016 compared to $40.1 million in the year ended
December 31, 2015, a 13% increase. The higher revenue in the Owned
& Operated Network this year compared to last year occurred in
the first half of the year and is primarily due to additional
advertisements served to a growing user base of our owned and
operated web properties. The increase in advertisements served
and users was due in part to increased marketing of our owned and
operated web properties and expanded verticals and
content.
Operating
expenses increased from $44.6 million in the year ended December
31, 2015 to $51.0 million in 2016, a 14% increase. Though all
categories of operating expenses increased in 2016 over 2015, the
largest increase came from marketing costs during the first half of
2016.
For the
year ended December 31, 2016, GAAP net loss was $773 thousand or
$0.03 net loss per share compared to $2.3 million net income, or
$0.10 net income per diluted share for the year ended December 31,
2015. Adjusted EBITDA for the year 2016 was $2.6 million or $0.11
per share.
Balance Sheet as of December 31, 2016
At
December 31, 2016, cash and cash equivalents totaled $3.9 million
and there was no bank debt. The current ratio improved from .88 at
December 31, 2015 to .99 at December 31, 2016.
Conference
Call Information:
Date:
Monday, February 13, 2017
Time:
4:15 p.m. EST
Domestic Dial-In:
1-888-461-2031
International
Dial-In: 1-719-325-2228
Webcast:
http://public.viavid.com/index.php?id=122804
2
In
addition, the call will be webcast on the Investor Relations
section of the Company's website at http://investor.inuvo.com/events_and_presentations
where it will also be archived for 45 days. A telephone replay will
be available through February 27, 2017. To access the replay,
please dial 1-844-512-2921 (domestic) or 1-412-317-6671
(international). At the system prompt, enter the code 6399563
followed by the # sign. You will then be prompted for your name,
company and phone number. Playback will then automatically
begin.
About Inuvo, Inc.
Inuvo®,
Inc. (NYSE MKT: INUV) is an advertising technology and digital
publishing business that serves hundreds of millions of income
generating ads monthly across a network of websites and apps
serving desktop, tablet and mobile devices. To learn more about
Inuvo, please visit www.inuvo.com or download our app for
Apple iPhone or for Android.
Forward-looking Statements
This
press release contains certain forward-looking statements that are
based upon current expectations and involve certain risks and
uncertainties within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Words or expressions such as
"anticipate," "plan," "will," "intend," "believe" or "expect'" or
variations of such words and similar expressions are intended to
identify such forward-looking statements.
These
forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties, and other factors, some of
which are beyond our control and difficult to predict and could
cause actual results to differ materially from those expressed or
forecasted in the forward-looking statements, including, without
limitation, statements made with respect to expectations with
respect to our lack of profitable operating history, successful
integration of the NetSeer business, changes in our business,
potential need for additional capital, fluctuations in demand;
changes to economic growth in the U.S. economy; and government
policies and regulations, including, but not limited to those
affecting the Internet, all as set forth in our Annual Report on
Form 10-K for the year ended December 31, 2015 and our most recent
Form 10-Q. All forward-looking statements involve significant risks
and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements, many of
which are generally outside the control of Inuvo and are difficult
to predict. Inuvo undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Inuvo,
Inc.
Wally
Ruiz
Chief
Financial Officer
501-205-8397
wallace.ruiz@inuvo.com
or
KCSA
Strategic Communications
Valter
Pinto, Investor Relations
212-896-1254
valter@kcsa.com
3
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INUVO, INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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December 31,
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December 31,
|
|
|
2016
|
2015
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash
|
$3,946,804
|
$4,257,204
|
|
Accounts
receivable, net
|
7,586,129
|
7,001,337
|
|
Unbilled
revenue
|
8,644
|
16,154
|
|
Prepaid
expenses and other current assets
|
284,469
|
345,752
|
|
Total
current assets
|
11,826,046
|
11,620,447
|
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|
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Property
and equipment, net
|
1,615,223
|
1,805,561
|
|
Other
assets
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Goodwill
|
5,760,808
|
5,760,808
|
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Intangible
assets, net
|
8,343,876
|
9,320,951
|
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Other
assets
|
15,186
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224,759
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Total
other assets
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14,119,870
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15,306,518
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Total
assets
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$27,561,139
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$28,732,526
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Liabilities
and Stockholders’ Equity
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Current
liabilities
|
|
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Accounts
payable
|
9,280,779
|
10,080,315
|
|
Accrued
expenses and other current liabilities
|
2,689,640
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3,169,445
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|
Total
current liabilities
|
11,970,419
|
13,249,760
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Long-term
liabilities
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Deferred
tax liability
|
3,738,500
|
3,799,600
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Other
long-term liabilities
|
326,428
|
722,722
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Total
long-term liabilities
|
4,064,928
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4,522,322
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Total
stockholders' equity
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11,525,792
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10,960,444
|
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Total
liabilities and stockholders' equity
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$27,561,139
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$28,732,526
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4
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INUVO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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December 31,
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December 31,
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2016
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2015
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2016
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2015
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Net
revenue
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$19,665,654
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$21,035,307
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$71,530,102
|
$70,438,116
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Cost
of revenue
|
7,972,197
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4,683,604
|
21,364,795
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23,721,996
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Gross
profit
|
11,693,457
|
16,351,703
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50,165,307
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46,716,120
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Operating
expenses
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Marketing
costs
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8,800,181
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12,665,251
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39,195,653
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34,324,646
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Compensation
|
1,857,146
|
1,525,564
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6,830,338
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5,598,804
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Selling,
general and administrative
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1,237,257
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1,431,584
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4,996,482
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4,645,697
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Total
operating expenses
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11,894,584
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15,622,399
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51,022,473
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44,569,147
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Operating
(loss) income
|
(201,127)
|
729,304
|
(857,166)
|
2,146,973
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|
Interest
expense, net
|
(28,181)
|
(29,637)
|
(99,965)
|
(141,311)
|
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(Loss)
income from continuing operations before taxes
|
(229,308)
|
699,667
|
(957,131)
|
2,005,662
|
|
Income
tax (expense) benefit
|
(62,739)
|
(78,942)
|
29,260
|
300,143
|
|
Net
(loss) income from continuing operations
|
(292,047)
|
620,725
|
(927,871)
|
2,305,805
|
|
Net
(loss) income from discontinued operations
|
(16,910)
|
(3,663)
|
155,287
|
33,969
|
|
Net
(loss) income
|
(308,957)
|
617,062
|
(772,584)
|
2,339,774
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Earnings
(loss) per share, basic and diluted
|
|
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|
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From
continuing operations
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$(0.01)
|
$0.03
|
$(0.04)
|
$0.10
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|
From
discontinued operations
|
-
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-
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0.01
|
-
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Net
(loss) income
|
$(0.01)
|
$0.03
|
$(0.03)
|
$0.10
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Weighted
average shares outstanding
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Basic
|
24,928,247
|
24,369,049
|
24,660,995
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24,249,852
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Diluted
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24,928,247
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24,872,663
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24,660,995
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24,539,555
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By Segment:
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Net
revenue
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Partner
Network
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$9,824,369
|
$6,199,673
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$26,011,543
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$30,298,532
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Owned
and Operated Network
|
9,841,285
|
14,835,634
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45,518,559
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40,139,584
|
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Total
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$19,665,654
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$21,035,307
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$71,530,102
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$70,438,116
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Gross
profit
|
|
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Partner
Network
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$1,863,651
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$1,534,540
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$4,734,240
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$6,645,590
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Owned
and Operated Network
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9,829,806
|
14,817,163
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45,431,067
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40,070,530
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Total
|
$11,693,457
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$16,351,703
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$50,165,307
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$46,716,120
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5
Non-GAAP Financial Measures
In
addition to disclosing financial results in accordance with United
States generally accepted accounting principles
(“GAAP”), our earnings release contains the non-GAAP
financial measure “Adjusted EBITDA.”
Adjusted EBITDA is
not a measure of performance defined in accordance with GAAP.
However, management believes that Adjusted EBITDA is useful to
investors in evaluating the Company’s performance because
Adjusted EBITDA is a commonly used financial analysis tool for
measuring and comparing companies in the Company’s industry
in areas of operating performance.
Management
believes that the disclosure of Adjusted EBITDA offers an
additional view of the Company’s operations that, when
coupled with the GAAP results and the reconciliation to GAAP net
(loss) income, provides a more complete understanding of the
Company’s results of operations and the factors and trends
affecting the Company’s business.
|
INUVO, INC.
RECONCILIATION OF (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE
TAXES TO ADJUSTED EBITDA
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Three Months Ended
|
Year Ended
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December 31,
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December 31,
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December 31,
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December 31,
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2016
|
2015
|
2016
|
2015
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(Loss)
Income from continuing operations before taxes
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$(229,308)
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$699,667
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$(957,131)
|
$2,005,662
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Interest
expense, net
|
28,181
|
29,637
|
99,965
|
141,311
|
|
Depreciation
|
320,326
|
266,327
|
1,279,030
|
882,105
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Amortization
|
231,060
|
234,294
|
930,708
|
925,245
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|
Stock-based
compensation
|
262,222
|
321,726
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1,264,266
|
707,544
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Adjusted
EBITDA
|
$612,481
|
$1,551,651
|
$2,616,838
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$4,661,867
|
Reconciliation
of (Loss) Net Income from Continuing Operations before Taxes to
Adjusted EBITDA
We
present Adjusted EBITDA as a supplemental measure of our
performance. We defined Adjusted EBITDA as net income (loss) from
continuing operations before taxes plus (i) interest expense, net,
(ii) depreciation, (iii) amortization, and (iv) stock-based
compensation. These further adjustments are itemized above. You are
encouraged to evaluate these adjustments and the reasons we
consider them appropriate for supplemental analysis. In evaluating
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 Adjusted
EBITDA should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring
items.
6