SOURCE: IZEA, Inc.

IZEA, Inc.

November 16, 2015 16:00 ET

IZEA Reports Record Third Quarter Revenue, Up 182%

All Time Record Bookings, Up 230%

ORLANDO, FL--(Marketwired - November 16, 2015) - IZEA, Inc. (OTCQB: IZEA), operator of the premier online marketplace that connects brands and publishers with influential content creators, today announced record results for its third quarter ended September 30, 2015.

Third Quarter Financial Highlights:

  • Closed on $12.9 Million Warrant Conversion with 81.5% participation.
  • Revenue for the quarter increased 182% to a record $5.4 million compared to Q3 2014, the highest quarterly revenue in company history.
  • Bookings for the quarter grew over 230% year-over-year to a record $6.7 million, up from $2.0 million in Q3 2014.
  • Sponsored Social revenue for the quarter grew 80% year-over-year to $3.2 million, up from $1.8 million; Content revenue was $2.2 in Q3 2015.
  • New opportunity pipeline, a representation of new client proposals generated within the quarter, grew to $36.2 million, up from $16.4 million in Q3 2014, an increase of 120%.
  • Gross profit was 40% in Q3 2015.

Third Quarter Operational Highlights:

  • IZEAx aggregate network reach increased to 3.18 billion fans and followers at the end of the quarter, up 7% compared to Q2 2015 and 240% year-over-year.
  • IZEAx registered users increased 13% to 583,000 in Q3 2015 compared to Q2 2015, and increased 507% from Q3 2014.
  • Settled patent dispute with Blue Calypso.

IZEA ended the quarter with cash and cash equivalents of $13.3 million, receivables of $3.0 million and an untapped $5 million credit facility with Bridge Bank. The company had unearned revenue of $2.4 million, with an additional $3.3 million of booked business not yet billed. Total stockholders' equity was $16.2 million at the end of the quarter.

"In the third quarter, we saw exceptional bookings growth of both Sponsored Social and Content. Not only did we set an all time quarterly bookings record for the quarter, we also received the largest single booking in the history of the company with a top five ecommerce company. In September 2015, we delivered our first month in excess of $3 million in bookings, another milestone for our growing sales team," commented Ted Murphy, IZEA Chairman and Chief Executive Officer.

"In addition to top line bookings and revenue growth, we are becoming more efficient and effective in our sales operations. Our nine-month average bookings per salesperson through the end of Q3 2015 has increased 106% over our Q3 2014 nine month average. As a company, we are executing against a three-year vision to grow our annual bookings to $100 million by the end of 2018. Our leadership team is building the foundation required in order to achieve that goal, while continuing to discover operational efficiencies and software automation opportunities," said Murphy.

Third Quarter 2015 Results:

Revenue for the third quarter of 2015 was $5,442,457 compared to $1,931,671 for the third quarter of 2014, an increase of 182% due to increases in Sponsored Social and Content revenue. Gross profit for the quarter was $2,152,000, up from $1,239,454 during the same period in 2014, an increase of 74%.

Operating expense for the third quarter of 2015 was $3,038,561, compared to $2,802,187 during the same period in 2014. Operating expenses increased primarily as a result of increases in the number and cost of personnel related expenses as the Company continues to invest in additional sales and engineering staff. Additionally, the Company incurred higher legal fees during the quarter in its defense and settlement of its only outstanding patent litigation for $390,506.

Operating EBITDA was $(2,167,433) for the quarter compared to $(1,309,551) during the same period last year. The decrease in EBITDA is primarily due to the legal settlement and continued investments in new hires and technology in 2015. Net loss for the quarter was $(2,645,087) compared to net income of $685,370 during the same period last year, primarily due to a $2,134,440 difference in the gain on the change in the fair value of derivatives between periods and the increase in legal settlements in 2015. Cash used for operating activities was $2,025,290 during the three months ended September 30, 2015.

Basic and diluted loss per common share for the quarter was $(.03), compared to basic and diluted income per common share of $.01 for the third quarter of 2014.

Investor Conference Call

The Company will host a conference call today at 4:30 p.m. ET, during which IZEA management will discuss the financial results and be available to answer any questions from investors.

Conference Date:11/16/15
Conference Start Time:4:30 p.m. Eastern
Dial-In Number:(201) 689-8472

Electronic replay of the conference call will be available through November 23, 2015 by dialing 1-858-384-5517 and entering PIN number 13624690. IZEA will also post a downloadable file onto the Investor Relations area of http://corp.izea.com.

About IZEA

IZEA operates the premier 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, changes in contingent acquisition costs 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, Inc.
Consolidated Balance Sheets
     
  September 30,
 2015
December 31,
 2014
  (Unaudited)  
Assets      
Current:      
 Cash and cash equivalents $ 13,273,048   $ 6,521,930  
 Accounts receivable, net  3,048,299    2,156,378  
 Prepaid expenses  745,426    190,604  
 Other current assets  13,317    61,424  
  Total current assets  17,080,090    8,930,336  
       
Property and equipment, net of accumulated depreciation of $389,174 and $239,521  595,549    588,919  
Goodwill  2,468,289    -  
Intangible assets, net of accumulated amortization of $395,333 and $0  1,974,667    -  
Software development costs, net of accumulated amortization of $171,185 and $85,331  413,365    483,544  
Security deposits  119,671    100,641  
   Total assets $ 22,651,631   $ 10,103,440  
Liabilities and Stockholders' Equity      
Current liabilities:      
 Accounts payable $ 940,993   $ 310,611  
 Accrued expenses  1,151,468    394,617  
 Unearned revenue  2,358,895    1,767,074  
 Current portion of deferred rent  10,772    -  
 Current portion of capital lease obligations  15,602    54,376  
 Current portion of acquisition costs payable  833,227    -  
  Total current liabilities  5,310,957    2,526,678  
       
       
Deferred rent, less current portion  107,303    106,531  
Capital lease obligations, less current portion  -    7,291  
Acquisition costs payable, less current portion  977,669    -  
Warrant liability  10,780    3,203,465  
  Total liabilities  6,406,709    5,843,965  
       
Stockholders' equity:      
Common stock, $.0001 par value; 200,000,000 shares authorized; 104,002,308 and 57,697,666, respectively, issued and outstanding  10,400    5,770  
Additional paid-in capital  48,077,162    27,195,055  
Accumulated deficit  (31,842,640 )  (22,941,350 )
  Total stockholders' equity  16,244,922    4,259,475  
       
   Total liabilities and stockholders' equity $ 22,651,631   $ 10,103,440  
          
 
IZEA, Inc.
Unaudited Consolidated Statements of Operations
      
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2015 2014  2015 2014
              
Revenue $ 5,442,457   $ 1,931,671    $ 14,205,693   $ 5,857,946  
Cost of sales  3,290,457    692,217     8,649,308    1,998,406  
  Gross profit  2,152,000    1,239,454     5,556,385    3,859,540  
              
Operating expenses:             
 General and administrative  1,056,473    1,287,048     5,081,367    3,600,621  
 Sales and marketing  1,982,088    1,515,139     5,310,124    3,726,370  
  Total operating expenses  3,038,561    2,802,187     10,391,491    7,326,991  
              
Loss from operations  (886,561 )  (1,562,733 )   (4,835,106 )  (3,467,451 )
              
Other income (expense):             
Interest expense  (31,191 )  (5,519 )   (86,354 )  (20,587 )
Loss on exchange of warrants  (1,845,810 )  -     (1,845,810 )  -  
Change in fair value of derivatives, net  115,904    2,250,344     (2,139,540 )  5,625,555  
Other income, net  2,571    3,278     5,520    7,677  
  Total other income (expense)  (1,758,526 )  2,248,103     (4,066,184 )  5,612,645  
              
Net income (loss) $ (2,645,087 ) $ 685,370    $ (8,901,290 ) $ 2,145,194  
              
Weighted average common shares outstanding - basic  81,512,092    57,350,743     65,728,626    50,584,635  
Basic income (loss) per common share $ (0.03 ) $ 0.01    $ (0.14 ) $ 0.04  
              
Weighted average common shares outstanding - diluted  81,512,092    69,428,993     65,728,626    63,663,192  
Diluted income (loss) per common share $ (0.03 ) $ 0.01    $ (0.14 ) $ 0.03  
              
 
IZEA, Inc.
Unaudited Consolidated Statements of Cash Flows
 
  Nine Months Ended
September 30,
  2015 2014
Cash flows from operating activities:      
 Net income (loss) $ (8,901,290 ) $ 2,145,194  
 Adjustments to reconcile net income (loss) to net cash used for operating activities:      
  Depreciation  149,873    65,683  
  Amortization of software development costs and other intangible assets  481,187    103,529  
  Loss on disposal of equipment  595    16,192  
  Provision for losses on accounts receivable  36,000    -  
  Stock-based compensation  511,202    389,002  
  Value of stock and warrants issued or to be issued for payment of services  136,592    147,860  
  Gain on change in value of contingent acquisition costs payable  (1,734,300 )  -  
  Loss on exchange of warrants  1,845,810    -  
  Change in fair value of derivatives, net  2,139,540    (5,625,555 )
  Cash provided by (used for):      
   Accounts receivable  (611,400 )  183,968  
   Prepaid expenses and other current assets  (465,191 )  (454,839 )
   Accounts payable  87,043    (174,386 )
   Accrued expenses  726,643    30,326  
   Unearned revenue  557,927    (156,156 )
   Deferred rent  1,644    60,508  
Net cash used for operating activities  (5,038,125 )  (3,268,674 )
       
Cash flows from investing activities:      
 Purchase of equipment  (145,579 )  (159,974 )
 Increase in software development costs  -    (206,529 )
 Acquisition, net of cash acquired  (905,586 )  -  
 Security deposits  (477 )  (11,067 )
Net cash used for investing activities  (1,051,642 )  (377,570 )
       
Cash flows from financing activities:      
 Proceeds from issuance of common stock and warrants, net  -    10,932,912  
 Proceeds from exercise of options & warrants  12,886,950    112,800  
 Payments on notes payable and capital leases  (46,065 )  (49,602 )
Net cash provided by financing activities  12,840,885    10,996,110  
       
Net increase in cash and cash equivalents  6,751,118    7,349,866  
Cash and cash equivalents, beginning of year  6,521,930    530,052  
       
Cash and cash equivalents, end of period $ 13,273,048   $ 7,879,918  
       
Supplemental cash flow information:      
 Cash paid during period for interest $ 5,805   $ 11,870  
       
Non-cash financing and investing activities:      
 Fair value of warrants issued $ 51,950   $ 12,382,216  
 Acquisition costs payable for assets acquired $ 3,942,639   $ -  
 Acquisition costs paid through issuance of common stock $ 250,000   $ -  
 Fair value of warrants reclassified from liability to equity $ 6,530,046   $ 3,166,482  
 Acquisition of assets through capital lease $ -   $ 41,339  
       
 
IZEA, Inc.
Reconciliation of GAAP to Non-GAAP Operating EBITDA
(Unaudited)
 
  Three Months Ended
 September 30,
 Nine Months Ended
September 30,
  2015   2014  2015 2014
                       
Net income (loss) $ (2,645,087 ) $ 685,370    $ (8,901,290 ) $ 2,145,194  
Non-cash stock-based compensation  188,458     142,252     511,202    389,002  
Non-cash stock issued for payment of services  31,251     18,750     136,592    147,860  
Change in the fair value of derivatives  (115,904 )   (2,250,344 )   2,139,540    (5,625,555 )
Loss on exchange of warrants  1,845,810     -     1,845,810    -  
Loss on disposal of equipment  595     16,593     595    16,192  
Gain on change in value of contingent acquisition costs payable  (1,734,300 )   -     (1,734,300 )  -  
Interest expense  31,191     5,519     86,354    20,587  
Depreciation & amortization  230,553     72,309     631,060    160,495  
  Operating EBITDA  (2,167,433 )   (1,309,551 )   (5,284,437 )  (2,746,225 )
                       

Contact Information

  • IZEA Investor Relations
    Budd Zuckerman
    Genesis Select
    (303) 415-0200
    Email contact

    IZEA Media Relations

    Brent Diggins
    Allison+Partners
    (623) 201-5554
    Email contact