Inuvo, Chairman and CEO Richard Howe Issues 2014 Letter to Shareholders
CONWAY, AK -- (Marketwired) -- 05/12/15 -- Richard Howe, Chairman and Chief Executive Officer of Inuvo, Inc. (NYSE MKT: INUV), issued a Letter to Shareholders in connection with the mailing of the Company's 2014 Annual Report to stockholders on May 5, 2015.
In his letter, Mr. Howe updates investors on the progress associated with the Company's continued evolution as a premier advertising technology and digital publishing company, discusses 2014 operating results, and provides an outlook for 2015.
The complete text of the letter follows:
Dear Stockholders and Friends
Inuvo had a phenomenal year in 2014. Revenue growth throughout the year was strong, going from $10 million in the first quarter to $11 million in second quarter to $13 million in third quarter and then $15.5 million in the final quarter for a total of approximately $50 million for the year. During 2014 Cash Flow and Earnings improved as well, with Adjusted EBITDA of $5.5 million, compared to $3.8 million in 2013, and Net Income of $2.1 million, compared to $477,000 in 2013. It's almost hard to imagine that it was only in 2012 that we made the decision to transition out of the toolbar business, which at the time was contributing $25 million in annual Revenue and a significant contributor to the net loss of $7 million reported that year.
Those days now appear to be behind us. In 2014 we wanted to shift our business towards mobile and we wanted to show year over year success with our Digital Publishing business, ALOT. We also wanted to deliver consistent growth with profitability in the year. We started 2014 out slowly; partially as a result of our business having seasonality trends in the first quarter as marketers reassess their annual budgets. By the end of the second quarter, we had already shown tremendous progress against our initiatives with mobile already at 40% of overall revenue and the Digital Publishing business up 154% year-over-year.
By the time we hit the third quarter we were firing on all cylinders, with the Ad-Tech Partner business also hitting its stride, up 27% sequentially. As we headed into the 2014 holiday season, we had a business that was growing almost 20% sequentially, a Digital Publishing business that had delivered $22 million dollars in revenue in the year after only having been launched less than 24 months earlier. We had signed a new bank agreement with better terms and we had reduced our debt by $2.5 million dollars and by all measures, it was setting up to be a terrific year.
The fourth quarter of 2014 marked a milestone. Having completed the transition out of the toolbar, it was the first time in awhile that we had grown year-over-year in the quarter and we didn't disappoint, we were up 36%. More importantly however is the fact that we had momentum going into 2015, which has already carried through to the first quarter of 2015 where revenue was up 33% year-over-year.
Inuvo makes money by serving both content and advertising across a network of websites and applications, both mobile and desktop. As we look towards the future, we believe stockholder value will continue to be created by 1) expanding our Digital Publishing footprint and 2) successfully launching our new Native Advertising product, SearchLinks.
Since the beginning of 2013 we've successfully implemented a number of transformational changes that have had a material impact on our financial performance and stockholder value. For the foreseeable future, our mission remains to grow the digital publishing business, leveraging the consumer interactions on those properties as the means for developing Native Advertising solutions we can sell to website and app publishers worldwide.
As of May 1, 2015 we had a growing and profitable company with an approximate market value of $54 million dollars. We believe we have plenty of room to grow and valuation multiples in our marketspace remain attractive. We are trading at about 1 times trailing twelve month sales in an industry that typically trades upwards of 2 or more times trailing twelve month sales.
The Board and I would like to thank you for your trust and support as we continue along our chosen course.
Richard K Howe
About Inuvo, Inc.
Inuvo®, Inc. (NYSE MKT: INUV) is an advertising technology and digital publishing company that delivers purchase-ready customers to advertisers through a broad network of desktop and mobile websites and apps. To learn more about Inuvo, please visit www.inuvo.com.
Source: Inuvo, Inc.
Released May 12, 2015