IZEA Announces Record Q2 Bookings, up 40% Year Over Year
ORLANDO, FL--(Marketwired - Aug 13, 2014) - IZEA, Inc. (OTCQB: IZEA), the leader in Social Sponsorship, today announced record results for its second quarter ending June 30, 2014.
Second Quarter 2014 Financial Highlights:
- Bookings reached a record $2.57 million in Q2 2014, up from $1.84 million in Q2 2013 -- the highest amount in the history of the company.
- Revenue increased 14.8% to a record $1.97 million during Q2 2014 compared to Q2 2013.
- Gross profit margin for the quarter was 67%, up from 55% during the same period in 2013.
- Gross profit for the quarter grew 39% to $1.31 million, up from $0.94 in Q2 2013.
- New opportunity pipeline, a representation of new client proposals generated within the quarter, grew to $12.8 million, up from $8.9 million in Q2 2013, an increase of 44%.
Second Quarter Operational Highlights:
- 68 full time team members; added 8 net new staff in client services and 2 in engineering in Q2.
- 66,000 registered users in IZEAx -- up from 50,000 in Q1 2014, an increase of 32%.
- IZEAx aggregate network reach grew from 392 million to 530 million during the quarter, an increase of 35%.
- Four new IZEAx partners, including one of the top 10 global media companies and Fullscreen.
"We had record bookings and gross profit in Q2, largely fueled by the tenured members of our sales team generating more repeat business and receiving larger campaign budgets from our managed clients," said Ted Murphy, IZEA's Chairman and Chief Executive Officer. "I am enthusiastic about our prospects for the second half of this year and beyond. We are actively onboarding and training our new IZEAx partners, growing our internal sales and development team and transitioning our business operations to the IZEAx technology platform."
During the quarter, the Company initiated campaigns on behalf of brands such as Bacardi, Unilever, Walmart, ConAgra Foods, Bloomin' Brands, adidas, Clorox, Hollister, Kimberly Clark and Scott's, as well as the world's leading agencies including Starcom MediaVest, Ketchum, MEC, Crispin Porter + Bogusky and Horizon Media. IZEA also gained preferred vendor status with one of the world's top-five consumer package goods companies along with preferred partner status at one of the nation's top media buying agencies.
"IZEA is growing our relationships with the world's leading brands and the agencies that support them," said Murphy. "We are pleased to see Social Sponsorship adoption and awareness increasing, with IZEA at the very center of the industry we created in 2006."
Second Quarter 2014 Results
Revenue for the second quarter of 2014 was $1,969,235 compared to $1,715,273 for the first quarter of 2013, an increase of 14.8%. Gross profit for
the quarter was $1,312,579, up from $944,372 during the same period in 2013, an increase of 39.0%. Operating expenses for the quarter ended June 30, 2014 were $2,519,797, compared to $1,479,659 in
the same period in 2013, due to investments in sales, marketing and engineering.
Net income for the quarter was $2,029,135 compared to a net loss of $(893,470) during the same period last year, primarily due to a $3,239,610 gain on the change in the fair value of derivatives. Operating EBITDA was $(932,344) for the quarter compared to $(321,344) during the same period of last year, primarily due to investments in marketing and new hires.
Basic and diluted income per common share were $.04 and $.03 for the first quarter of 2014, respectively, compared to basic and diluted loss per common share of $(.12) for the second quarter of 2013.
Investor Conference Call
The Company will host a conference call today at 4:30pm ET, during which IZEA management will discuss the financial results and be available to
answer any questions from the investment community.
Toll-Free (Domestic): (888) 364-3109
International (Toll): (719) 457-1512
Webcast Link: http://public.viavid.com/index.php?id=110559
Electronic replay of the conference call will be available through August 20, 2014 by dialing (877) 870-5176 and entering PIN number 9783185. IZEA will also post a downloadable file onto the Investor Relations area of http://corp.izea.com.
About IZEA
Founded in 2006, IZEA is the pioneer of Social Sponsorship. The company builds cloud-based marketplaces that connect brands with creators who blog, tweet, pin, and
post on their behalf. Brands receive influential consumer content and engaging shareable stories that drive awareness. Creators are compensated for their participation and partnership. For more
information about IZEA, visit http://corp.izea.com.
Financial Methodology & Related Disclosures
"Operating 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 Operating 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 Operating EBITDA as presented by IZEA may not be comparable to EBITDA presented by other companies. IZEA defines Operating 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 revenues, gross profit margin and net operating loss for the 2014 fiscal year. These forward-looking statements are
based largely on IZEA's 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, 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 respect will in fact occur. Please read the full statement and disclosures here: http://corp.izea.com/safe-harbor-statement.
IZEA, Inc. | ||||||||||
Consolidated Balance Sheets | ||||||||||
June 30, 2014 |
December 31, 2013 |
|||||||||
(Unaudited) | ||||||||||
Assets | ||||||||||
Current: | ||||||||||
Cash and cash equivalents | $ | 9,753,049 | $ | 530,052 | ||||||
Accounts receivable | 1,342,510 | 1,659,802 | ||||||||
Prepaid expenses | 197,067 | 109,960 | ||||||||
Other current assets | 70,340 | 83,486 | ||||||||
Total current assets | 11,362,966 | 2,383,300 | ||||||||
Property and equipment, net of accumulated depreciation of $245,850 and $205,070 | 243,346 | 156,482 | ||||||||
Software development costs, net of accumulated amortization of $47,406 and $0 | 521,469 | 362,346 | ||||||||
Security deposits | 52,391 | 46,574 | ||||||||
Total assets | $ | 12,180,172 | $ | 2,948,702 | ||||||
Liabilities and Stockholders' Deficit | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 719,128 | $ | 817,057 | |||||||
Accrued expenses | 457,506 | 365,454 | |||||||||
Unearned revenue | 1,102,015 | 1,292,228 | |||||||||
Current portion of capital lease obligations | 57,114 | 43,852 | |||||||||
Total current liabilities | 2,335,763 | 2,518,591 | |||||||||
Capital lease obligations, less current portion | 31,798 | 34,013 | |||||||||
Deferred rent | 71,587 | 14,179 | |||||||||
Warrant liability | 10,839,950 | 1,832,945 | |||||||||
Total liabilities | 13,279,098 | 4,399,728 | |||||||||
Stockholders' deficit: | |||||||||||
Series A convertible preferred stock; $.0001 par value; 240 shares authorized; no shares issued and outstanding | -- | -- | |||||||||
Common stock, $.0001 par value; 200,000,000 shares authorized; 57,046,381 and 22,560,653 issued and outstanding | 5,705 | 2,256 | |||||||||
Additional paid-in capital | 23,560,959 | 24,672,132 | |||||||||
Accumulated deficit | (24,665,590 | ) | (26,125,414 | ) | |||||||
Total stockholders' deficit | (1,098,926 | ) | (1,451,026 | ) | |||||||
Total liabilities and stockholders' deficit | $ | 12,180,172 | $ | 2,948,702 | |||||||
IZEA, Inc. | ||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Revenue | $ | 1,969,235 | $ | 1,715,273 | $ | 3,926,275 | $ | 3,100,548 | ||||||||||
Cost of sales | 656,656 | 770,901 | 1,306,189 | 1,347,003 | ||||||||||||||
Gross profit | 1,312,579 | 944,372 | 2,620,086 | 1,753,545 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
General and administrative | 2,176,514 | 1,364,569 | 4,020,654 | 2,939,161 | ||||||||||||||
Sales and marketing | 343,283 | 115,090 | 504,150 | 209,259 | ||||||||||||||
Total operating expenses | 2,519,797 | 1,479,659 | 4,524,804 | 3,148,420 | ||||||||||||||
Loss from operations | (1,207,218 | ) | (535,287 | ) | (1,904,718 | ) | (1,394,875 | ) | ||||||||||
Other income (expense): | ||||||||||||||||||
Interest expense | (6,051 | ) | (22,530 | ) | (15,068 | ) | (37,996 | ) | ||||||||||
Loss on exchange of warrants and debt | -- | -- | -- | (732 | ) | |||||||||||||
Change in fair value of derivatives and notes payable carried at fair value, net | 3,239,610 | (335,653 | ) | 3,375,211 | (343,777 | ) | ||||||||||||
Other income (expense), net | 2,794 | -- | 4,399 | 80 | ||||||||||||||
Total other income (expense) | 3,236,353 | (358,183 | ) | 3,364,542 | (382,425 | ) | ||||||||||||
Net income (loss) | $ | 2,029,135 | $ | (893,470 | ) | $ | 1,459,824 | $ | (1,777,300 | ) | ||||||||
Weighted average common shares outstanding - basic | 57,045,282 | 7,226,745 | 47,145,510 | 7,020,347 | ||||||||||||||
Basic income (loss) per common share | $ | 0.04 | $ | (0.12 | ) | $ | 0.03 | $ | (0.25 | ) | ||||||||
Weighted average common shares outstanding - diluted | 72,962,524 | 7,226,745 | 62,035,915 | 7,020,347 | ||||||||||||||
Diluted income (loss) per common share | $ | 0.03 | $ | (0.12 | ) | $ | 0.02 | $ | (0.25 | ) | ||||||||
IZEA, Inc. | |||||||||||
Consolidated Statements of Cash Flows | |||||||||||
(Unaudited) | |||||||||||
Six Months Ended June 30, |
|||||||||||
2014 | 2013 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 1,459,824 | $ | (1,777,300 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash used for operating activities: | |||||||||||
Depreciation | 40,780 | 24,928 | |||||||||
Amortization of software development costs and other assets | 54,623 | 21,310 | |||||||||
Stock-based compensation | 246,750 | 168,374 | |||||||||
Stock issued or to be issued for payment of services | 129,110 | 114,965 | |||||||||
Loss on exchange of warrants and debt | -- | 732 | |||||||||
Change in fair value of derivatives and notes payable carried at fair value, net | (3,375,211 | ) | 343,777 | ||||||||
Cash provided by (used for): | |||||||||||
Accounts receivable | 317,292 | (543,485 | ) | ||||||||
Prepaid expenses and other current assets | (84,678 | ) | (147,326 | ) | |||||||
Accounts payable | (97,929 | ) | 137,983 | ||||||||
Accrued expenses | 54,552 | 260,247 | |||||||||
Unearned revenue | (190,213 | ) | 45,114 | ||||||||
Deferred rent | 57,408 | -- | |||||||||
Net cash used for operating activities | (1,387,692 | ) | (1,350,681 | ) | |||||||
Cash flows from investing activities: | |||||||||||
Purchase of equipment | (86,305 | ) | (9,767 | ) | |||||||
Increase in software development costs | (206,529 | ) | (98,847 | ) | |||||||
Security deposits | (5,817 | ) | 3,870 | ||||||||
Net cash used for investing activities | (298,651 | ) | (104,744 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of notes payable, net | -- | 1,089,798 | |||||||||
Proceeds from issuance of common stock and warrants, net | 10,945,632 | -- | |||||||||
Payments on notes payable and capital leases | (36,292 | ) | (202,277 | ) | |||||||
Net cash provided by financing activities | 10,909,340 | 887,521 | |||||||||
Net increase (decrease) in cash and cash equivalents | 9,222,997 | (567,904 | ) | ||||||||
Cash and cash equivalents, beginning of year | 530,052 | 657,946 | |||||||||
Cash and cash equivalents, end of period | $ | 9,753,049 | $ | 90,042 | |||||||
Supplemental cash flow information: | |||||||||||
Cash paid during period for interest | $ | 7,851 | $ | 7,286 | |||||||
Non-cash financing and investing activities: | |||||||||||
Fair value of common stock issued for future services | $ | -- | $ | 47,220 | |||||||
Fair value of warrants issued | $ | 12,382,216 | $ | 95,209 | |||||||
Conversion of notes payable into common stock | $ | -- | $ | 124,611 | |||||||
Acquisition of assets through capital lease | $ | 41,339 | $ | -- | |||||||
IZEA, Inc. | |||||||||||||||||
Reconciliation of GAAP to Non-GAAP Operating EBITDA | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net income (loss) | $ | 2,029,135 | $ | (893,470 | ) | $ | 1,459,824 | $ | (1,777,300 | ) | |||||||
Non-cash stock-based compensation | 131,412 | 128,914 | 246,750 | 168,374 | |||||||||||||
Non-cash stock issued for payment of services | 70,750 | 68,180 | 129,110 | 114,965 | |||||||||||||
Change in the fair value of derivatives | (3,239,610 | ) | 335,653 | (3,375,211 | ) | 343,777 | |||||||||||
Loss on exchange of warrants | -- | -- | -- | 732 | |||||||||||||
Gain on disposal of equipment | (401 | ) | -- | (401 | ) | -- | |||||||||||
Interest expense | 6,051 | 22,530 | 15,068 | 37,996 | |||||||||||||
Depreciation | 22,913 | 12,349 | 40,780 | 24,928 | |||||||||||||
Amortization of software development costs and other assets | 47,406 | 4,500 | 47,406 | 9,000 | |||||||||||||
Operating EBITDA | (932,344 | ) | (321,344 | ) | (1,436,674 | ) | (1,077,528 | ) | |||||||||