Accelerize New Media, Inc. Reports SECOND Quarter 2014 Financial Results

Second Quarter Revenues Increase 72.8% Year Over Year to Reach a Record $3.9MM as Company Expands Operations to Support Rapid Business Growth

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Accelerize New Media Inc.

Aug 14, 2014, 09:00 ET

NEWPORT BEACH, Calif., Aug. 14, 2014 /PRNewswire/ -- Accelerize New Media, Inc. (OTCQB: ACLZ), owner and operator of CAKE (www.getcake.com), a marketing technology SaaS company, today announced financial results for its fiscal second quarter ended June 30, 2014.

Company Highlights for Q2 2014

Broad-based SaaS revenue growth achieved across both U.S. and European business segments.
- 52% increase in the number of customers when compared to the same period in 2013.
- Average revenue per customer increased by 10% when compared to the same period in 2013.
The company added 157 new customers in the first six months of this year and now has over 450 customers driving more than 5 billion consumer actions monthly through the CAKE platform.
The company continues expansion efforts through the hiring of employees dedicated to marketing and customer support of growing CAKE customer base.
During the quarter, the company completed internal beta testing and development of a revolutionary new suite of enterprise software-as-a-service solutions designed specifically to satisfy the digital marketing needs of advertisers potentially opening a vast untapped market for the CAKE platform. Currently, advertisers struggle to properly track and optimize online advertising campaigns across multiple marketing channels (including, display, search, email, ecommerce, affiliate and more).

"We continue to see strong demand for the CAKE SaaS enterprise platform as evidenced in this quarter by our record revenue, growth in our customer base and increased revenue per customer. We have maintained minimal revenue churn enabling us to build a solid recurring revenue base for the future. As our platform gains further traction in the affiliate marketing space we anticipate achieving progressive revenue growth for the remainder of 2014 and into the future. We are expanding our sales and corporate staff while making significant investments in R&D to further accelerate our sales growth and extend our leadership position in performance-based marketing innovation," said Accelerize New Media, Inc. Chairman and CEO Brian Ross. "We are excited about moving upstream with our enterprise product portfolio to include real-time tracking, attribution and optimization specifically for advertisers to manage their digital advertising spend. Entering this space is a potential game changer for us as eMarketer estimates digital spending by advertisers will increase to $140 billion this year."

Financial Highlights for Q2 2014

Revenues: Total revenues for the second quarter reached a record $3.9MM, a 72.8% increase from $2.3MM recorded in Q2 2013, driven by a 52% increase in the number of clients on the CAKE platform and a 10% increase in the average usage fees earned per client when compared to Q2 2013. We expect future revenues from CAKE to continue to be driven by ongoing organic growth, new product innovation and international expansion.
Operating Income (Loss): Operating loss for the second quarter was $(720K), compared to operating income of $34K recorded in Q2 2013. This was mainly attributable to the company making significant investments in product development for the next generation of CAKE and an expansion of its sales, marketing, technology and corporate staff.
Cash Flow: Net cash used in continuing operations was $(844K), compared to net cash provided by continuing operations of $330.5K during the prior year period. The company invested $311K in ongoing research and development and total operating expenses increased 107.6% to $4.62MM to support our growth.
Our revenue model is based on a monthly license fee, a usage fee (based on volume of online events), and a training and implementation fee. Clients purchase annual subscriptions with an additional usage fee.
A majority of our revenue is derived from U.S. customers, but we have seen a 67% and 200% growth from our European and other segments, respectively, during Q2 2014 when compared to Q2 2013.
The company believes it has sufficient cash to fund operations for at least the next 12-months.

About Accelerize New Media Inc. (OTCQB: ACLZ)

Accelerize New Media, Inc. owns and operates CAKE, a marketing technology company that provides a SaaS-based solution to track, attribute and optimize the performance of digital marketing spend, in real-time. Bringing clarity to multi-channel marketing campaigns, CAKE empowers advertisers, publishers and networks with the insight to make intelligent marketing decisions. For more information visit http://www.accelerizenewmedia.com.

Use of Forward-looking Statements

This press release may contain forward-looking statements from Accelerize New Media, 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 we describe our growth prospects, our expansion efforts, our new enterprise software under development and its potential, our expectations for future revenues, and the potential market size in our industry, we are using forward-looking statements. These forward-looking statements are based on the current expectations of the management of Accelerize New Media 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 New Media to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Accelerize New Media 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 New Media, reference is made to Accelerize New Media's reports filed from time to time with the Securities and Exchange Commission.

ACCELERIZE NEW MEDIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,		December 31,
ASSETS	2014		2013
	(Unaudited)
Current Assets:
Cash	$	1,421,163	$	1,157,315
Accounts receivable, net of allowance for bad debt of $38,444 and $59,072		1,587,710		1,041,671
Prepaid expenses and other assets		39,712		85,026
Total current assets		3,048,585		2,284,012

Property and equipment, net of accumulated depreciation of $416,801 and $171,856		1,009,855		756,696
Customer relationships, net of accumulated amortization of $370,371 and $37,037		629,629		962,963
Deferred financing costs, net of accumulated amortization of $3,750		43,317		-
Other assets		38,006		-
Total assets	$	4,769,392	$	4,003,671

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued expenses	$	1,687,167	$	1,703,007
Deferred revenues		45,304		83,311
Line of credit		1,000,000		-
Total current liabilities		2,732,471		1,786,318

Stockholders' Equity:
Common stock; $0.001 par value; 100,000,000 shares authorized; 60,620,256 and 58,394,975 shares issued and outstanding		60,618		58,394
Additional paid-in capital		18,797,324		17,908,278
Accumulated deficit		(16,823,420)		(15,749,319)
Accumulated other comprehensive gain		2,399		-

Total stockholders' equity		2,036,921		2,217,353

Total liabilities and stockholders' equity	$	4,769,392	$	4,003,671

ACCELERIZE NEW MEDIA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three-month periods ended				Six-month periods ended
	June 30,				June 30,
	2014		2013		2014		2013


Revenues:	$	3,906,409	$	2,259,395	$	7,333,606	$	4,422,802

Operating expenses:
Cost of revenue		1,108,112		491,212		1,897,211		961,695
Research and development		757,868		434,365		1,334,654		814,982
Sales and marketing		1,910,650		764,730		3,533,099		1,380,577
General and administrative		841,198		535,494		1,644,366		1,051,777
Total operating expenses		4,617,828		2,225,801		8,409,330		4,209,031

Operating (loss) income		(711,419)		33,594		(1,075,724)		213,771

Other income (expense):
Interest income		7,044		1,078		7,044		14,745
Interest expense		(2,112)		(14,495)		(5,421)		(33,121)
		4,932		(13,417)		1,623		(18,376)

(Loss) income from continuing operations		(706,487)		20,177		(1,074,101)		195,395

Discontinued operations
Gain from the disposal of discontinued operations		-		38,611		-		100,361
Income from discontinued operations, net		-		38,611		-		100,361

Net (loss) income	$	(706,487)	$	58,788	$	(1,074,101)	$	295,756

Earnings per share:
Basic
Continuing operations	$	(0.01)	$	-	$	(0.02)	$	-
Discontinued operations	$	-	$	-	$	-	$	-
Net (loss) income per share	$	(0.01)	$	-	$	(0.02)	$	0.01

Diluted
Continuing operations	$	(0.01)	$	-	$	(0.02)	$	-
Discontinued operations	$	-	$	-	$	-	$	-
Net (loss) income per share	$	(0.01)	$	-	$	(0.02)	$	-


Basic weighted average common shares outstanding		60,026,430		56,644,643		59,401,930		56,337,069
Diluted weighted average common shares outstanding		60,026,430		75,346,900		59,401,930		72,369,773

ACCELERIZE NEW MEDIA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

	Three-month periods ended				Six-month periods ended
	June 30,				June 30,
	2014		2013		2014		2013

Net (loss) income	$	(706,487)	$	58,788	$	(1,074,101)	$	295,756

Foreign currency translation gain (loss)		1,069		86		2,399		(1,195)
Total other comprehensive gain (loss)		1,069		86		2,399		(1,195)

Comprehensive (loss) income		(705,418)		58,874		(1,071,702)		294,561

ACCELERIZE NEW MEDIA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six-month periods ended
	June 30
	2014		2013
Cash flows from operating activities:
Net (loss) income from continuing operations	$	(1,074,101)	$	195,395
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:
Depreciation and amortization		578,278		27,837
Amortization of debt discount		3,750		17,858
Provision for bad debt		(20,628)		7,186
Fair value of services in lieu of proceeds from note receivable		-		120,250
Fair value of options		287,985		251,235
Amortization of original issuance discount		-		(11,889)
Changes in operating assets and liabilities:
Accounts receivable		(525,412)		(202,508)
Other assets		(38,006)		(9,439)
Prepaid expenses		45,314		(49,674)
Accounts payable and accrued expenses		9,160		(42,361)
Deferred revenues		(38,007)		26,638
Net cash (used in) provided by continuing operations		(771,667)		330,528
Net cash provided by discontinued operations		-		-
Net cash (used in) provided by operating activities		(771,667)		330,528

Cash flows provided by (used in) investing activities:
Proceeds from sale of lead generation business		-		80,000
Capitalized software for internal use		(311,106)		-
Capital expenditures		(186,997)		(66,416)
Net cash (used in) provided by investing activities		(498,103)		13,584

Cash flows provided by (used in) financing activities:
Principal repayments on notes payable		-		(90,000)
Proceeds from line of credit, net		1,000,000		-
Payment of financing costs		(40,000)		-
Net proceeds from exercise of warrants		571,219		421,996
Net cash provided by financing activities		1,531,219		331,996

Effect of exchange rate changes on cash		2,399		(1,394)

Net increase in cash		263,848		674,714

Cash, beginning of period		1,157,315		231,926
Cash, end of period	$	1,421,163	$	906,640

Supplemental disclosures of cash flow information:
Cash paid for interest	$	-	$	22,205
Cash paid for income taxes	$	-	$	-

Non-cash investing and financing activities:
Fair value of warrants issued in connection with line of credit	$	32,067	$	19,889