GlobeNewswire Inc | Nov 9, 2020 04:01PM EST

November 09, 2020

LITTLE ROCK, Ark., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Inuvo, INC. (NYSE AMERICAN: INUV) (Inuvo or the Company), a leading provider of marketing technology, powered by IntentKey artificial intelligence that serves brands and agencies, today announced its financial results for the third quarter and first nine months ending September 30, 2020.

For the three months ended September 30, 2020, Inuvo delivered $9.2 million in revenue, $6.2 million of which came from the ValidClick Platform and $3 million from the IntentKey Platform. Sequentially, Inuvo grew 21.4%, driven by growth within both the IntentKey and ValidClick of 53.4% and 10.5% respectively.

Richard Howe, CEO of Inuvo, commented, While COVID-19 continues to impact our business, current trends suggest our recovery is underway. The IntentKey has grown year-over-year despite COVID-19, now up 16% through the first nine-months. ValidClick revenues in October are expected to be up 120% off their May lows. We are actively recruiting beta clients for a SaaS version of the IntentKey platform. Mr. Howe added, While COVID-19 continues to make forecasting difficult and unpredictable, based on the revenue run rate coming out of October, we would expect sequential growth in the fourth quarter between 25% and 40%, which in turn should improve Adjusted EBITDA heading into 2021.

Financial Results for the Three and NineMonths Ended September 30, 2020:

Net revenue for the three and nine months ended September 30, 2020 totaled $9.2 million and $31.7 million respectively down 33.2% and 26.7% year-over-year respectively.

Lower revenue overall during both periods year over year was attributable to COVID-19.

IntentKey revenue year-over-year for the third quarter and nine-month periods increased 16% and 16.5% respectively. Sequentially, IntentKey revenue grew 53.4%, second quarter to third quarter.

Gross profit for the three and nine months ended September 30, 2020 totaled $7.6 million and $25.6 million, respectively, yielding gross profit margins during each period of 82.1% and 80.6%, up from 64.1% and 60% in the comparable periods.

IntentKey gross margins were approximately 48.9% in the current quarter as compared to 28.6% in the prior year. Gross profit within the quarter was up 98.5% year-over-year.

Operating expenses decreased year-over-year 10.8% for the third quarter and 1.9% for the first nine months of 2020.

Net loss for the three and nine months ended September 30, 2020 totaled $2.4 million and $6.6 million, respectively. During the three-month period ended September 30, 2019, net income was $787,900, benefiting from certain one-time other income items.

Adjusted EBITDA for the 2020 third quarter was approximately a loss of $1.3 million as compared to a loss of $769 thousand for the same period in 2019.

At September 30, 2020 Inuvo had approximately $9.5 million in cash.

Conference Call Details:Date: Monday, November 9, 2020Time: 4:30 p.m. Eastern timeToll-free Dial-in Number: 1-888-394-8218International Dial-in Number: 1-323-701-0225Conference ID: 1612093Participant Link: http://public.viavid.com/player/index.php?id=142166

A telephone replay will be available through November 23, 2020. To access the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international). At the system prompt, enter the code 1612093 followed by the # sign. You will then be prompted for your name, company and phone number. Playback will then automatically begin.

About the IntentKeyTMInuvos IntentKeyTM is a patented, machine-learning technology designed to mirror the manner in which the human brain instantly associates ideas, emotions, places, people, and objects. It creates an accurate, high-definition picture of consumer intent and sentiment related to a particular topic or item. Inuvo harnesses the power of the IntentKey to discover and reach high volumes of incremental in-market and relevant audiences that are hidden from typical marketing approaches. The IntentKey enables pinpoint media execution reaching consumers throughout the purchasing funnel all the way to conversion.

About InuvoInuvo, Inc. (NYSE American: INUV) is a market leader in artificial intelligence, aligning and delivering consumer-oriented product & brand messaging strategies online based on powerful, anonymous and proprietary consumer intent data for agencies, advertisers and partners. 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 from expectations 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. These forward-looking statements include statements made with respect to expected performance of IntentKey and ValidClick and the future impact of Covid-19. 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, 2019 as filed on May 12, 2020 and our other filings with the Securities and Exchange Commission. 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, Inc. and are difficult to predict. The information which appears on our websites and our social media platforms is not part of this press release.

Inuvo Company Contact:Wally RuizChief Financial OfficerTel (501) 205-8397wallace.ruiz@inuvo.com

Investor ContactKCSA Strategic CommunicationsValter Pinto, Managing DirectorTel (212) 896-1254Valter@KCSA.com

INUVO, INC.CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Nine Months Ended September 30 September 30 September 30 September 30 2020 2019 2020 2019Net revenue $ 9,214,350 $ 13,789,754 $ 31,737,520 $ 43,302,230 Cost of 1,645,392 4,955,508 6,154,921 17,310,496 revenueGross profit 7,568,958 8,834,246 25,582,599 25,991,734 Operating expensesMarketing 5,668,707 6,940,772 19,148,925 20,013,117 costsCompensation 2,462,693 2,186,252 6,925,239 5,730,297 Selling,general and 1,870,258 2,081,547 5,710,221 6,672,115 administrativeTotaloperating 10,001,658 11,208,571 31,784,385 32,415,529 expensesOperating loss (2,432,700 ) (2,374,325 ) (6,201,786 ) (6,423,795 )Interest (26,143 ) (143,642 ) (251,335 ) (511,558 )expense, netOther income 53,763 3,305,867 (136,483 ) 3,305,867 (expense), netNet (loss) (2,405,080 ) 787,900 (6,589,604 ) (3,629,486 )income Earnings pershare, basic and dilutedNet (loss) $ (0.03 ) $ 0.02 $ (0.09 ) $ (0.10 )incomeWeightedaverage shares outstandingBasic 92,110,881 46,218,413 70,652,630 37,079,457 Diluted 92,110,881 51,019,631 70,652,630 37,049,457

INUVO, INC.CONDENSED CONSOLIDATED BALANCE SHEETS September 30 December 31, 2020 2019 Assets Cash $ 9,528,214 $ 372,989 Accounts receivable, net 4,038,737 7,529,785 Prepaid expenses and other current assets 463,507 243,888 Total current assets 14,030,458 8,146,662 Property and equipment, net 1,172,773 1,374,152 Goodwill 9,853,342 9,853,342 Intangible assets, net 9,052,465 10,451,593 Other assets 1,180,751 865,178 Total other assets 20,086,558 21,170,114 Total assets $ 35,289,789 $ 30,690,928 Liabilities and Stockholders? Equity Accounts payable $ 3,228,285 $ 7,520,567 Accrued expenses and other current liabilities 3,754,379 4,057,340 Financed receivables - 3,381,364 Convertible promissory notes (net) - 536,806 Derivative liability - 182,250 Total current liabilities 6,982,664 15,678,327 Deferred tax liability 107,000 107,000 Other long-term liabilities 2,373,629 452,051 Total long-term liabilities 2,480,629 559,051 Total stockholders' equity 25,826,496 14,453,550 Total liabilities and stockholders' equity $ 35,289,789 $ 30,690,928

RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE TAXES TO ADJUSTEDEBITDA(unaudited) Three Months Ended Nine Months Ended September 30 September 30 September 30 September 30 2020 2019 2020 2019Loss fromcontinuing $ (2,405,080 ) $ 787,900 $ (6,589,604 ) $ (3,629,486 )operationsbefore taxesInterest 26,143 143,642 251,335 511,558 expense, netDepreciation 335,769 412,660 1,053,802 1,286,086 Amortization 541,630 381,924 1,690,628 1,012,878 EBITDA (1,501,538 ) 1,726,126 (3,593,839 ) (818,964 )Stock-based 258,430 447,937 660,615 594,630 compensationNon-recurring expense:Costsincurredduring the - 104,014 - 991,158 TerminatedMergerMergerTermination - (2,800,000 ) - (2,800,000 )FeeRetargeterfair valueover - (958,288 ) - (958,288 )contractualvalueAdjustment toderivative - 460,800 168,364 460,800 liabilityaccountsSettlement ofclass actionsuit related - 250,000 - 250,000 to TerminatedMerger Adjusted (1,243,108 ) (769,411 ) (2,764,860 ) (2,280,664 )EBITDA

Reconciliation of Loss from Continuing Operations before Taxes to EBITDA and Adjusted EBITDAWe present EBITDA and Adjusted EBITDA as a supplemental measure of our performance. We defined EBITDA as net loss from continuing operations before taxes plus (i) interest expense, net, (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.