Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing
technology, powered by artificial intelligence (AI) that serves
brands and agencies, today announced its financial results and
provided a business update for the first quarter ending March 31,
2022.
Richard Howe, CEO of Inuvo, stated, “Our rapid growth has
continued, as illustrated by a 75.3% year-over-year increase in
revenue to $18.6 million. Notably, sales for both IntentKey and
ValidClick increased 280% and 24%, respectively. Moreover, we
achieved these results, despite the fact the first half of the year
tends to be seasonally weaker, due to media budgeting and
advertising cycles, which bodes well for the balance of 2022. At
the same time, we continue to diversify our revenues across our
growing client base.”
“We are on the cusp of a major transformation within the
industry, due to new regulatory requirements and privacy concerns,
resulting in the inability to utilize 3rd party cookies and
consumer data. Historically, this data has been the cornerstone of
virtually every competing service and technology provider within
this industry. However, Firefox and Safari have already eliminated
cookies and Apple is going even further with plans to eliminate IP
address tracking used to identify consumers across devices. Google
has also indicated plans to implement similar changes in 2023. This
means the current tools, broadly accepted by the advertising
community, are increasingly becoming ineffective. In contrast,
IntentKey does not rely on consumer data and identification. With
over $200 billion in annual advertising being spent across the open
web, Inuvo expects to establish a dominant market position as a
result of the unprecedented changes underway within the
industry.”
“Looking ahead, we are off to a strong start to the second
quarter of 2022. While our primary focus has been top-line growth,
we remain on track to achieve positive adjusted EBITDA for the full
year. With over $9.0 million of cash and marketable securities and
no debt, we are well positioned to internally fund our growth and
look forward to driving significant value for shareholders.”
Financial Results for the First Quarter Ended March 31,
2022Net revenue for the first quarter ended March 31, 2022
totaled $18.6 million, an increase of 75.3% as compared to $10.6
million for the same period last year. IntentKey revenue for the
three months ended March 31, 2022 exceeded the same period last
year by 280%. ValidClick revenue for the three months ended March
31, 2022 exceeded the same period last year by 24%. Revenue split
between IntentKey and ValidClick was roughly 44% versus 56% in the
current period, which compares to 20% and 80%, respectively, for
the same period last year.
Cost of revenue for the first quarter ended March 31, 2022,
totaled $8.7 million as compared to $1.4 million for the same
period last year. The increase in the cost of revenue for the three
months ended March 31, 2022 as compared to the same period last
year was related to the acquisition of new customers and growth of
IntentKey as a percentage of revenue.
Gross profit for the first quarter ended March 31, 2022 totaled
$9.9 million as compared to $9.2 million for the same period last
year. Gross profit margin for the first quarter of 2022 was 53.5%
as compared to 86.4% for the same period last year. The IntentKey
platform has a lower gross margin than the ValidClick platform but
has a greater overall net margin than the ValidClick platform. The
gross margin decreased as IntentKey revenue became a greater
percentage of net revenue.
Operating expenses for the three months ended March 31, 2022
totaled $12.1 million, an increase of 2.4% as compared to $11.8
million for the same period last year.
Other income in the current quarter was $17,700 due to an
unrealized gain in marketable securities. The Other income in the
first quarter of the prior year of $470,000 was primarily due to
the early termination of a licensing agreement.
Net loss for the first quarter of 2022 totaled $2.1 million, or
$0.02 per basic and diluted share, as compared to net loss of $2.1
million, or $0.02 per basic and diluted share, for the same period
last year.
Non-cash depreciation, amortization and stock based compensation
expenses totaled approximately $1.4 million for the three months
ended March 31, 2022, compared to roughly $1.2 million for the same
period last year.
Adjusted EBITDA was a loss of $703 thousand in the first quarter
of 2022, compared to a loss of $878 thousand for the same period
last year.
Liquidity and Capital Resources:On March 31,
2022, Inuvo had $9.0 million in cash, cash equivalents and
marketable securities, $11.2 million of working capital, an unused
working capital facility of $5 million and no debt.
As of March 31, 2022, Inuvo had 119,807,202 common shares issued
and outstanding.
Conference Call Details: Date: Thursday,
May 12, 2022 Time: 4:15 p.m. Eastern Time Toll-free
Dial-in Number: 1-800-289-0438International Dial-in Number:
1-323-794-2423Conference ID: 5639826Webcast Link: HERE
A telephone replay will be available through Thursday, May 26,
2022. 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 5639826 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 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 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,
2021 as filed on March 17, 2022, 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:David Waldman / Natalya
RudmanCrescendo Communications, LLCTel: (212)
671-1020inuv@crescendo-ir.com
|
INUVO, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31 |
|
March 31 |
|
|
2022 |
|
2021 |
Net revenue |
|
$18,609,367 |
|
|
$10,617,809 |
|
Cost of revenue |
|
|
8,661,506 |
|
|
|
1,444,059 |
|
Gross profit |
|
|
9,947,861 |
|
|
|
9,173,750 |
|
Operating expenses |
|
|
|
|
Marketing costs |
|
|
7,169,449 |
|
|
|
7,305,784 |
|
Compensation |
|
|
3,157,706 |
|
|
|
2,737,867 |
|
Selling, general and
administrative |
|
|
1,726,672 |
|
|
|
1,724,978 |
|
Total operating expenses |
|
|
12,053,827 |
|
|
|
11,768,629 |
|
Operating loss |
|
|
(2,105,966) |
|
|
|
(2,594,879) |
|
Interest expense |
|
|
(999) |
|
|
|
(22,389) |
|
Other income, net |
|
|
17,702 |
|
|
|
470,000 |
|
Net loss |
|
|
(2,089,263) |
|
|
|
(2,147,268) |
|
Other comprehensive
income |
|
|
|
|
Unrealized loss on marketable
securities |
|
|
(98,156) |
|
|
|
- |
|
Comprehensive loss |
|
|
(2,187,419) |
|
|
|
(2,147,268) |
|
|
|
|
|
|
Earnings per share, basic and
diluted |
|
|
|
|
Net loss income |
|
($0.02) |
|
|
($0.02) |
|
Weighted average shares
outstanding |
|
|
|
|
Basic |
|
|
119,282,114 |
|
|
|
114,430,201 |
|
Diluted |
|
|
119,282,114 |
|
|
|
114,430,201 |
|
INUVO, INC. |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
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|
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March 31 |
|
December 31 |
|
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2022 |
|
2021 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
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Cash and
cash equivalent |
|
$5,743,149 |
|
$10,475,964 |
|
Marketable securities-short term |
|
|
2,478,628 |
|
|
1,927,979 |
|
Accounts
receivable, net |
|
|
10,049,987 |
|
|
9,265,813 |
|
Prepaid expenses
and other current assets |
|
|
2,257,404 |
|
|
1,408,186 |
|
Total current
assets |
|
|
20,529,168 |
|
|
23,077,942 |
|
|
|
|
|
|
|
Property and
equipment, net |
|
|
1,616,607 |
|
|
1,506,766 |
|
Other assets |
|
|
|
|
|
Marketable securities-long term |
|
|
762,311 |
|
|
859,512 |
|
Intangible assets, net of accumulated amortization |
|
|
6,387,666 |
|
|
6,720,585 |
|
Goodwill |
|
|
9,853,342 |
|
|
9,853,342 |
|
Other assets |
|
|
1,807,770 |
|
|
1,978,927 |
|
Total other
assets |
|
|
18,811,089 |
|
|
19,412,366 |
|
Total assets |
|
$40,956,864 |
|
$43,997,074 |
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts payable |
|
$4,516,798 |
|
$4,844,716 |
|
Accrued expenses and other current liabilities |
|
|
4,845,010 |
|
|
5,817,823 |
|
Total current
liabilities |
|
|
9,361,808 |
|
|
10,662,539 |
|
|
|
|
|
|
|
Deferred tax liability |
|
|
107,000 |
|
|
107,000 |
|
Other long-term liabilities |
|
|
312,359 |
|
|
419,540 |
|
Total long-term
liabilities |
|
|
419,359 |
|
|
526,540 |
|
|
|
|
|
|
|
Total
stockholders' equity |
|
|
31,175,697 |
|
|
32,807,995 |
|
Total liabilities
and stockholders' equity |
|
$40,956,864 |
|
$43,997,074 |
|
RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE
TAXES TO ADJUSTED EBITDA |
(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31 |
|
March 31 |
|
|
2022 |
|
2021 |
Net loss |
|
($2,089,263) |
|
|
($2,147,268) |
|
Interest Expense |
|
$999 |
|
|
$22,389 |
|
Depreciation |
|
|
356,793 |
|
|
|
305,528 |
|
Amortization |
|
|
357,178 |
|
|
|
546,493 |
|
EBITDA |
|
|
(1,374,293) |
|
|
|
(1,272,858) |
|
Stock-based compensation |
|
|
671,158 |
|
|
|
394,870 |
|
Adjusted EBITDA |
|
|
(703,135) |
|
|
|
(877,988) |
|
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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