Inuvo, Now in Conway, Narrows Net Loss to $864,000

by Lance Turner  on Thursday, Mar. 14, 2013 10:45 am  

Inuvo Inc., a company founded by former Acxiom executives that moved its headquarters to Conway in January, reported Thursday an $864,000 fourth-quarter net loss.

The Internet marketing and technology firm's loss, $863,958 or 4 cents per share, was narrower than the $4.4 million or 44 cents per share shortfall it reported during the same quarter last year. The loss came on a 145 percent increase in quarterly net revenue, which reached $16.2 million in the fourth quarter of 2012 from $6.6 million during the fourth quarter of 2011.

The company (NYSE AMEX: INUV) also narrowed its loss for the full year of 2012. Inuvo reported a net loss of $7 million, or 34 cents per share, which was better than the net loss of $8.9 million or 96 cents per share for 2011. The full-year loss came on a 49 percent increase in full-year net revenue, which reached $53.4 million in 2012 from 35.8 million in 2011.

In its earnings news release, the company focused on the quarterly net revenue gain and a quarterly "gross profit" of $8.8 million, up 366 percent from $1.9 million in the fourth quarter of 2011. The company defined gross profit as revenue less the cost of revenue, but did not include in that definition the other operating expenses that dragged net income into the red.

"The company had a strong fourth quarter and fiscal year in 2012,” Richard Howe, Inuvo's chairman and CEO, said in a news release. Howe is a former chief marketing officer for publicly traded data services firm Acxiom Corp. of Little Rock. He left Acxiom in 2008.

"Not only did revenue and adjusted EBITDA increased [sic] sequentially and year over year, but the business itself grew 26 percent organically between Q2 and Q4 following the Vertro acquisition in Q1. We expect these positive trends to continue into 2013, and we anticipate Q1 2013 revenue to range between $16.2 and $16.5 million.”

In March, Inuvo announced a deal to buy Vertro Inc. of New York City, an Internet advertising and search firm. As part of the deal, Inuvo acquired Vertro's Alot browser toolbar, which generates revenue through third-party search and content agreements.

On Thursday, Inuvo said it continues to expand its services into mobile and is taking its local.alot.com website, billed as a complement to the Alot AppBar, into Europe starting in the second quarter. The company added that 2012's full-year revenue and gross profit results were "due primarily" to revenue generated as a result of the Vetro acquisition.

Although the earnings announcement never specifically mentioned Inuvo's quarterly and annual net losses, the company noted that its move to Conway was part of "efforts to become profitable." Inuvo received a $1.75 million dollar grant from the Arkansas Economic Development Commission to move to Conway.

The company said the move is expected "to yield monthly operating expense savings of approximately [$80,000] to [$120,000]" starting in the second quarter, depending on final terms of exiting its New York City office lease.

In annoncing its move to Conway, Howe said "Inuvo is committed to building a successful and profitable Internet business.

"Through this move, we both improve our operating performance and partner with a state committed to creating opportunities for knowledge-based businesses," Howe said. The company also announced plans to create 50 "highly skilled jobs" over the next four years.

Inuvo's headquarters is at 1111 Main Street in downtown Conway, and in the same building as privately held PrivacyStar, a call and text blocking app, another company whose executives have histories at Acxiom. 

Charles Morgan, the former CEO of Acxiom, founded PrivacyStar. Morgan is an Inuvo board member and its largest shareholder, owning nearly 1.7 million shares, or about 5 percent of the company, according to Inuvo's most recent proxy.

 

 

Please read our comments policy before commenting.
Search

Latest Arkansas Business Poll

Did the Fed make the right call on interest rates?