NEWPORT BEACH, California, May 11, 2016 /PRNewswire/ --
Accelerize Inc. (OTCQB: ACLZ) (OTCBB: ACLZ), a leader in marketing technology solutions, today announced financial results for its fiscal first quarter ended March 31, 2016.
- Company achieves increased Adjusted EBITDA and generates positive cash flow: Q1 2016 adjusted EBITDA increased by 488% sequentially to $337,000 and generated net cash from operating activities of $218,000. The improvements were a direct result of strong revenue growth fostered by global expansion coupled with streamlining initiatives implemented in the second half of 2015. Adjusted EBITDA is a non-GAAP measure management believes provides important insight into the Company's operating results (see reconciliation of non-GAAP measures below).
- International Sales Expansion: The Company achieved further global diversification with 32% of overall revenue being derived outside the U.S. in Q1 2016, up from 26% in Q1 2015. During the first quarter of 2016, the Company continued to add new clients from regions including EMEA, LATAM and NA.
- Company Recognized by Gartner, Inc. as Vender to Watch for Second Consecutive Year: CAKE, the Company's digital marketing software division, recently recognized for the second year in a row by Gartner Inc. as a "Vendor to Watch" in its annual "Magic Quadrant Digital Marketing Hubs" report.
- Extending Ecosystem with Key Partnerships and Integrations: The Company established partnerships with leading companies in the advertising technology landscape, offering integrations with Facebook Lead Generation, DialogTech and Velocify. It also strengthened existing partnerships with IBM, Kochava and Marketo.
- Appointment of CFO - In January of 2016 the Company appointed Anthony (Andy) Mazzarella to the position of Interim CFO and as of April 2016 he accepted the role of Chief Financial Officer and Executive Vice President. Andy brings 30 years of executive management and finance experience to Accelerize Inc. with a particular focus in managing high-growth technology companies.
- New $8 million Credit Facility: In May 2016, the Company closed on a new $8 million credit facility from SaaS Capital. The funds were used to retire the outstanding balance of the Company's previous senior credit facility (approximately $4.5 million as of March 31, 2016) and will also be used to fund further global sales growth of the Company's digital marketing solutions and support continued product innovation. The Company believes this new facility coupled with improving operational performance will provide sufficient resources to fund its operations for the foreseeable future.
"We saw significant improvement in our operations across the board in the first quarter, both year over year and sequentially, as sales accelerated, average revenue per customer increased and operational costs were lowered," said Brian Ross, CEO and Chairman of Accelerize Inc. "More importantly, through the methodical execution of our streamlining initiatives and global expansion plans, we generated positive cash flow from operations and a significant increase in Adjusted EBITDA without sacrificing sales growth. We have also strengthened our management team with the addition of Andy as our CFO. During the quarter we achieved further industry recognition from Gartner, Inc., established key business partnerships to drive sales, invested in product innovation, and positioned Accelerize Inc. for continued top and bottom line growth. As we move through 2016 our newly established credit facility provides us with additional capital to build on the positive momentum we have established in the last two quarters in order to enhance the value of our Company for the benefit of our stockholders."
Financial Highlights for Q1 2016
- Revenues: Total revenues for Q1 2016 reached a record $5.9 million, a 13% increase from $5.2 million recorded in Q1 2015, and an 8% sequential increase from Q4 2015. The revenue increase was driven by a 10% year over year increase in average revenue per customer and a 2% increase in the total number of customers on the CAKE SaaS platform, reflecting the Company's success in adding larger customer opportunities that progressively grow in overall usage. Geographically, the Company continued to successfully implement its international expansion efforts with 32% of revenues in Q1 2016 derived from outside the U.S. compared to 26% in Q1 2015. The Company expects future revenues to be driven by ongoing organic growth, up-selling existing customers, international expansion, product innovation, as well as streamlined sales and marketing efforts.
- Operating Income (Loss): Operating loss in Q1 2016 narrowed significantly to $(380,000), compared to an operating loss of $(1.6 million) in Q1 2015. The improvement in operating results was largely attributable to the 21% reduction in operating expenses resulting from the Company streamlining efforts begun in Q3 2015. This led to a $1.1 million reduction in sales and marketing expenditures year over year while revenue expanded, and a $200,000 reduction in G&A expenses. Research and Development expenses increased by $150,000 year over year as the Company continued to invest in product innovation.
- Cash Flow: Net cash provided by the Company's operations in Q1 2016 totaled $218,000, a $641,000 improvement compared to net cash used in operations of ($423,000) in Q1 2015. Net cash at March 31, 2016 was $1.1 million as compared to $0.9 million at December 31, 2015.
- Adjusted EBITDA: Adjusted EBITDA in Q1 2016 improved significantly, reaching $337,000 compared to $(507,000) in Q1 2015. Adjusted EBITDA is a non-GAAP financial measure that excludes stock option and warrant expense and is defined below.
- Revenue Model: The Company's revenue model is based on a monthly license fee, a usage fee (based on volume of online events), and a training and implementation fee. Customers purchase annual subscriptions with an additional usage fee.
About Accelerize Inc.
Accelerize, Inc. (OTCQB: ACLZ) (OTCBB: ACLZ) offers marketing technology solutions that revolutionize the way advertisers leverage their digital advertising data. For more information, visit http://www.accelerize.com.
Use of Forward-looking Statements
This press release may contain forward-looking statements from Accelerize Inc. within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and federal securities laws. For example, when Accelerize Inc. says that it will use its new credit facility to fund further global sales growth and support product innovation, that the new facility coupled with improving operational performance will provide sufficient resources to fund operations for the foreseeable future, that it will build on positive momentum to enhance value of the company for the benefit of stockholders, and other statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, Accelerize Inc. is using forward-looking statements. These forward-looking statements are based on the current expectations of the management of Accelerize Inc. only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in technology and market requirements; our technology may not be validated as we progress further; we may be unable to retain or attract key employees whose knowledge is essential to the development of our products and services; unforeseen market and technological difficulties may develop with our products and services; inability to timely develop and introduce new technologies, products and applications; loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of Accelerize Inc. to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Accelerize Inc. undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risk and uncertainties affecting Accelerize Inc., reference is made to Accelerize Inc.'s reports filed from time to time with the Securities and Exchange Commission.
Use of Non-GAAP Financial Information
Accelerize Inc. provides financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). To help understand Accelerize's financial performance the company has supplemented its financial results that it provides in accordance with GAAP with certain non-GAAP financial measures. The method Accelerize uses to produce non-GAAP financial results is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Specifically, management is excluding the following items from its non-GAAP Adjusted EBITDA calculation:
Stock-Based Compensation and Warrant Expenses: The Company's compensation strategy includes the use of stock-based compensation and warrants to attract and retain employees and executives. It is principally aimed at aligning their interests with those of our stockholders and at long-term employee retention, rather than to motivate or reward operational performance for any particular period. Thus, stock-based compensation and warrant expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31, 2016 2015 (Unaudited) ASSETS Current Assets: Cash $1,081,221 $ 908,095 Accounts receivable, net of allowance for bad debt of $416,076 and $395,147, respectively 2,093,909 1,833,007 Prepaid expenses and other assets 217,678 239,921 Total current assets 3,392,808 2,981,023 Property and equipment, net of accumulated depreciation of $2,113,350 and $1,854,351, respectively 2,162,642 1,956,864 Other assets 115,547 124,882 Total assets $5,670,997 $5,062,769 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable and accrued expenses $2,414,458 $2,236,750 Deferred revenues 19,637 10,436 Line of credit - short term, net of deferred financing cost of 28,193 and 36,559, respectively 4,544,030 4,598,441 Other short term liabilities 625,000 - Total liabilities 7,603,125 6,845,627 Stockholders' Equity (Deficit) Common stock; $.001 par value; 100,000,000 shares authorized; 65,069,327 shares issued and outstanding 65,068 65,068 Additional paid-in capital 23,881,525 23,440,366 Accumulated deficit (25,849,853) (25,266,612) Accumulated other comprehensive income (28,868) (21,680) Total stockholders' deficit (1,932,128) (1,782,858) Total liabilities and stockholders' deficit $5,670,997 $5,062,769
ACCELERIZE NEW MEDIA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Three-month periods ended March 31, 2016 2015 Revenues: $5,864,018 $5,199,662 Cost of revenue 1,932,123 1,317,766 Gross Profit 3,931,895 3,881,896 Operating expenses: Research and development 1,030,456 875,382 Sales and marketing 992,878 2,133,924 General and administrative 2,288,712 2,454,446 Total operating expenses 4,312,046 5,463,752 Operating loss (380,151) (1,581,856) Other income (expense): Other income 9,459 32,978 Other expense (212,549) (45,344) Total other (expenses) (203,090) (12,366) Net loss $(583,241) $(1,594,222) EBITDA Calculation Interest_US 212,549 45,005 Depreciation_US 65,999 63,334 Depreciation_UK 11,314 11,458 Amortizaton_US 189,360 330,519 EBITDA: $(104,019) $(1,143,906) Stock-based comp exp 157,067 352,574 Warrant Exp 284,093 284,093 Adjusted EBITDA $337,141 $(507,239)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three-month periods ended March 31, 2016 2015 Cash flows from operating activities: Net loss $(583,241) $(1,594,222) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 264,080 403,021 Amortization of debt discount 138,366 7,550 Provision for bad debt 20,929 (196,305) Fair value of options 441,159 636,667 Changes in operating assets and liabilities: Accounts receivable (281,831) (751) Prepaid expenses 22,243 (14,373) Accounts payable and accrued expenses 178,075 461,045 Deferred revenues 9,201 (131,308) Other assets 9,418 6,174 Net cash used in operating activities 218,399 (422,502) Cash flows from investing activities: Capitalized software for internal use (475,000) (177,424) Capital expenditures - (44,947) Proceeds from sale of assets 4,692 - Net cash used in investing activities (470,308) (222,371) Cash flows from financing activities: Proceeds from line of credit - 1,000,000 Repayment of line of credit (62,777) - Proceeds from loan 625,000 - Payment of financing costs (130,000) - Net proceeds from exercise of options and warrants - 9,586 Net cash provided by financing activities 423,223 1,009,586 Effect of exchange rate changes on cash (7,188) (6,543) Net increase in cash $173,126 $358,170
SOURCE Accelerize Inc.