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IZEA Announces Record Q2 Bookings, up 40% Year Over Year(Marketwire Via Acquire Media NewsEdge) ORLANDO, FL -- (Marketwired) -- 08/13/14 -- IZEA, Inc. (OTCQB: IZEA), the leader in Social Sponsorship, today announced record results for its second quarter ending June 30, 2014. Second Quarter 2014 Financial Highlights: Bookings reached a record $2.57 million in Q2 2014, up from $1.84 million in Q2 2013 -- the highest amount in the history of the company. Revenue increased 14.8% to a record $1.97 million during Q2 2014 compared to Q2 2013. Gross profit margin for the quarter was 67%, up from 55% during the same period in 2013. Gross profit for the quarter grew 39% to $1.31 million, up from $0.94 in Q2 2013. New opportunity pipeline, a representation of new client proposals generated within the quarter, grew to $12.8 million, up from $8.9 million in Q2 2013, an increase of 44%. Second Quarter Operational Highlights: 68 full time team members; added 8 net new staff in client services and 2 in engineering in Q2. 66,000 registered users in IZEAx -- up from 50,000 in Q1 2014, an increase of 32%. IZEAx aggregate network reach grew from 392 million to 530 million during the quarter, an increase of 35%. Four new IZEAx partners, including one of the top 10 global media companies and Fullscreen. "We had record bookings and gross profit in Q2, largely fueled by the tenured members of our sales team generating more repeat business and receiving larger campaign budgets from our managed clients," said Ted Murphy, IZEA's Chairman and Chief Executive Officer. "I am enthusiastic about our prospects for the second half of this year and beyond. We are actively onboarding and training our new IZEAx partners, growing our internal sales and development team and transitioning our business operations to the IZEAx technology platform." During the quarter, the Company initiated campaigns on behalf of brands such as Bacardi, Unilever, Walmart, ConAgra Foods, Bloomin' Brands, adidas, Clorox, Hollister, Kimberly Clark and Scott's, as well as the world's leading agencies including Starcom MediaVest, Ketchum, MEC, Crispin Porter + Bogusky and Horizon Media. IZEA also gained preferred vendor status with one of the world's top-five consumer package goods companies along with preferred partner status at one of the nation's top media buying agencies. "IZEA is growing our relationships with the world's leading brands and the agencies that support them," said Murphy. "We are pleased to see Social Sponsorship adoption and awareness increasing, with IZEA at the very center of the industry we created in 2006." Second Quarter 2014 ResultsRevenue for the second quarter of 2014 was $1,969,235 compared to $1,715,273 for the first quarter of 2013, an increase of 14.8%. Gross profit for the quarter was $1,312,579, up from $944,372 during the same period in 2013, an increase of 39.0%. Operating expenses for the quarter ended June 30, 2014 were $2,519,797, compared to $1,479,659 in the same period in 2013, due to investments in sales, marketing and engineering. Net income for the quarter was $2,029,135 compared to a net loss of $(893,470) during the same period last year, primarily due to a $3,239,610 gain on the change in the fair value of derivatives. Operating EBITDA was $(932,344) for the quarter compared to $(321,344) during the same period of last year, primarily due to investments in marketing and new hires. Basic and diluted income per common share were $.04 and $.03 for the first quarter of 2014, respectively, compared to basic and diluted loss per common share of $(.12) for the second quarter of 2013. Investor Conference CallThe Company will host a conference call today at 4:30pm ET, during which IZEA management will discuss the financial results and be available to answer any questions from the investment community. Toll-Free (Domestic): (888) 364-3109 International (Toll): (719) 457-1512 Webcast Link: http://public.viavid.com/index.php?id=110559 Electronic replay of the conference call will be available through August 20, 2014 by dialing (877) 870-5176 and entering PIN number 9783185. IZEA will also post a downloadable file onto the Investor Relations area of http://corp.izea.com. About IZEAFounded in 2006, IZEA is the pioneer of Social Sponsorship. The company builds cloud-based marketplaces that connect brands with creators who blog, tweet, pin, and post on their behalf. Brands receive influential consumer content and engaging shareable stories that drive awareness. Creators are compensated for their participation and partnership. For more information about IZEA, visit http://corp.izea.com. Financial Methodology & Related Disclosures"Operating 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 Operating 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 Operating EBITDA as presented by IZEA may not be comparable to EBITDA presented by other companies. IZEA defines Operating EBITDA as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock related compensation, gain or loss on asset disposals 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 StatementThis 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 revenues, gross profit margin and net operating loss for the 2014 fiscal year. These forward-looking statements are based largely on IZEA's 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, 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 respect will in fact occur. Please read the full statement and disclosures here: http://corp.izea.com/safe-harbor-statement. IZEA, Inc. Consolidated Balance Sheets June 30, December 31, 2014 2013 ------------ ------------ (Unaudited) Assets Current: Cash and cash equivalents $ 9,753,049 $ 530,052 Accounts receivable 1,342,510 1,659,802 Prepaid expenses 197,067 109,960 Other current assets 70,340 83,486 ------------ ------------ Total current assets 11,362,966 2,383,300 ------------ ------------ Property and equipment, net of accumulated depreciation of $245,850 and $205,070 243,346 156,482 Software development costs, net of accumulated amortization of $47,406 and $0 521,469 362,346 Security deposits 52,391 46,574 ------------ ------------ Total assets $ 12,180,172 $ 2,948,702 ============ ============ Liabilities and Stockholders' Deficit Current liabilities: Accounts payable $ 719,128 $ 817,057 Accrued expenses 457,506 365,454 Unearned revenue 1,102,015 1,292,228 Current portion of capital lease obligations 57,114 43,852 ------------ ------------ Total current liabilities 2,335,763 2,518,591 ------------ ------------ Capital lease obligations, less current portion 31,798 34,013 Deferred rent 71,587 14,179 Warrant liability 10,839,950 1,832,945 ------------ ------------ Total liabilities 13,279,098 4,399,728 ------------ ------------ Stockholders' deficit: Series A convertible preferred stock; $.0001 par value; 240 shares authorized; no shares issued and outstanding -- -- Common stock, $.0001 par value; 200,000,000 shares authorized; 57,046,381 and 22,560,653 issued and outstanding 5,705 2,256 Additional paid-in capital 23,560,959 24,672,132 Accumulated deficit (24,665,590) (26,125,414) ------------ ------------ Total stockholders' deficit (1,098,926) (1,451,026) ------------ ------------ Total liabilities and stockholders' deficit $ 12,180,172 $ 2,948,702 ============ ============ IZEA, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------------ ------------------------- 2014 2013 2014 2013 ------------ ----------- ------------ ------------ Revenue $ 1,969,235 $1,715,273 $ 3,926,275 $ 3,100,548 Cost of sales 656,656 770,901 1,306,189 1,347,003 ----------- ---------- ----------- ----------- Gross profit 1,312,579 944,372 2,620,086 1,753,545 ----------- ---------- ----------- ----------- Operating expenses: General and administrative 2,176,514 1,364,569 4,020,654 2,939,161 Sales and marketing 343,283 115,090 504,150 209,259 ----------- ---------- ----------- ----------- Total operating expenses 2,519,797 1,479,659 4,524,804 3,148,420 ----------- ---------- ----------- ----------- Loss from operations (1,207,218) (535,287) (1,904,718) (1,394,875) Other income (expense): Interest expense (6,051) (22,530) (15,068) (37,996) Loss on exchange of warrants and debt -- -- -- (732) Change in fair value of derivatives and notes payable carried at fair value, net 3,239,610 (335,653) 3,375,211 (343,777) Other income (expense), net 2,794 -- 4,399 80 ----------- ---------- ----------- ----------- Total other income (expense) 3,236,353 (358,183) 3,364,542 (382,425) ----------- ---------- ----------- ----------- Net income (loss) $ 2,029,135 $ (893,470) $ 1,459,824 $(1,777,300) =========== ========== =========== =========== Weighted average common shares outstanding - basic 57,045,282 7,226,745 47,145,510 7,020,347 =========== ========== =========== =========== Basic income (loss) per common share $ 0.04 $ (0.12) $ 0.03 $ (0.25) =========== ========== =========== =========== Weighted average common shares outstanding - diluted 72,962,524 7,226,745 62,035,915 7,020,347 =========== ========== =========== =========== Diluted income (loss) per common share $ 0.03 $ (0.12) $ 0.02 $ (0.25) =========== ========== =========== =========== IZEA, Inc. Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, ------------------------- 2014 2013 ------------ ------------ Cash flows from operating activities: Net income (loss) $ 1,459,824 $(1,777,300) Adjustments to reconcile net income (loss) to net cash used for operating activities: Depreciation 40,780 24,928 Amortization of software development costs and other assets 54,623 21,310 Stock-based compensation 246,750 168,374 Stock issued or to be issued for payment of services 129,110 114,965 Loss on exchange of warrants and debt -- 732 Change in fair value of derivatives and notes payable carried at fair value, net (3,375,211) 343,777 Cash provided by (used for): Accounts receivable 317,292 (543,485) Prepaid expenses and other current assets (84,678) (147,326) Accounts payable (97,929) 137,983 Accrued expenses 54,552 260,247 Unearned revenue (190,213) 45,114 Deferred rent 57,408 -- ----------- ----------- Net cash used for operating activities (1,387,692) (1,350,681) ----------- ----------- Cash flows from investing activities: Purchase of equipment (86,305) (9,767) Increase in software development costs (206,529) (98,847) Security deposits (5,817) 3,870 ----------- ----------- Net cash used for investing activities (298,651) (104,744) ----------- ----------- Cash flows from financing activities: Proceeds from issuance of notes payable, net -- 1,089,798 Proceeds from issuance of common stock and warrants, net 10,945,632 -- Payments on notes payable and capital leases (36,292) (202,277) ----------- ----------- Net cash provided by financing activities 10,909,340 887,521 ----------- ----------- Net increase (decrease) in cash and cash equivalents 9,222,997 (567,904) Cash and cash equivalents, beginning of year 530,052 657,946 ----------- ----------- Cash and cash equivalents, end of period $ 9,753,049 $ 90,042 =========== =========== Supplemental cash flow information: Cash paid during period for interest $ 7,851 $ 7,286 Non-cash financing and investing activities: Fair value of common stock issued for future services $ -- $ 47,220 Fair value of warrants issued $12,382,216 $ 95,209 Conversion of notes payable into common stock $ -- $ 124,611 Acquisition of assets through capital lease $ 41,339 $ -- IZEA, Inc. Reconciliation of GAAP to Non-GAAP Operating EBITDA (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ----------------------- ------------------------- 2014 2013 2014 2013 ------------ ---------- ------------ ------------ Net income (loss) $ 2,029,135 $(893,470) $ 1,459,824 $(1,777,300) Non-cash stock-based compensation 131,412 128,914 246,750 168,374 Non-cash stock issued for payment of services 70,750 68,180 129,110 114,965 Change in the fair value of derivatives (3,239,610) 335,653 (3,375,211) 343,777 Loss on exchange of warrants -- -- -- 732 Gain on disposal of equipment (401) -- (401) -- Interest expense 6,051 22,530 15,068 37,996 Depreciation 22,913 12,349 40,780 24,928 Amortization of software development costs and other assets 47,406 4,500 47,406 9,000 ----------- --------- ----------- ----------- Operating EBITDA (932,344) (321,344) (1,436,674) (1,077,528) ----------- --------- ----------- ----------- Source: IZEA, Inc. |