Inuvo Posts 2012 1st Quarter Financial Results
May 16, 2012 (Close-Up Media via COMTEX) --
Inuvo, an Internet marketing and technology company specializing in marketing browser-based consumer applications, managing networks of website publishers and operating specialty websites, announced results to its first quarter.
The Company's consolidated financial statements as of March 31, include one month of operations and financial results of its Vertro subsidiary and the costs of the merger, which became effective on March 1.
"We are pleased to announce positive adjusted EBITDA for the first quarter of 2012. It is important to note that only one of the three months in this reported quarter represents combined operations on a financial reporting basis. Further, the associated closing costs of the Vertro merger are included in our first quarter results, so we believe the first quarter results of 2012 are not indicative of the Company's ongoing operations" said Peter Corrao, President and CEO of Inuvo.
"We remain focused on the integration of the businesses and believe that our financial performance will continue to improve throughout 2012. During the remainder of the year, we plan to remain focused on generating revenue from our newly combined product lines, growing our Software Search segment and integrating and growing our Partner Programs segment, while realizing cost savings from the merger."
In a release on May 14, the Company reported that revenue was $8.8 million for the quarter ended March 31, compared to $11.8 million for the same quarter last year. By segment, revenue in the current year quarter was $5.6 Million from Publisher Network, $1.8 million for Software Search and $1.4 million in Partner Programs or 64.2 percent, 20.2 percent and 15.6 percent, respectively, of total revenues, for the quarter. The decrease was due to lower revenue in both the Publisher Network and Partner Programs segments. A decrease in the number of transactions driven through third party and company owned websites and a $238,000 chargeback by Yahoo! for advertiser refunds associated with low conversion traffic caused the lower Publisher Network revenue. The exiting of the telemarketing business last June is the primary reason for the lower Partner Program revenue.
Gross Profit decreased $2.0 million in the first quarter to $3.4 million compared to $5.4 million in the same quarter last year, and gross margins also decreased to 39 percent from 46 percent in the same quarter last year. The decrease in gross profit was due primarily to lower revenue within both the Publisher Network and Partner Programs segments.
Search Costs were approximately $650,000 lower in the first quarter of the current year compared to the same quarter last year due to the reduction of traffic the Company directed to websites it manages while it restarted its various campaigns that were put on hold while investigating low converting traffic. The lower spend on traffic was partially offset by advertising expense in the acquired Software Search segment.
Compensation and Telemarketing Expense was approximately $1.4 million lower in the current year quarter compared to the same quarter last year primarily due to the termination of the telemarketing business in June 2011.
Selling, General and Administrative Expense was approximately $550,000 higher in the current year quarter compared to last year, primarily due to the costs of closing the merger with Vertro this past March.
The Net Loss for the quarter ended March 31, was $1.9 million compared to a net loss of $1.4 million for the same period last year. The current year net loss includes one-time charges of approximately $436,000 for indirect closing costs related to the merger with Vertro. The last year quarter net loss included one-time net charges of approximately $118,000 for settlements of litigation.
Adjusted EBITDA, a non-GAAP measure was approximately $212,000 in the first quarter of 2012 compared to approximately $202,000 in the same quarter last year.
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