Exhibit 99.1

 

Accelerize Inc. Reports Financial Results FOR THE SECOND QUARTER OF 2018

 

Company continues to see strong momentum in sales bookings for its Journey platform

 

 

NEWPORT BEACH, Calif. – August 14, 2018 – Accelerize (OTCQB: ACLZ), a leader in marketing technology solutions, today announced financial results for the second quarter ended June 30, 2018.

 

Accelerize owns and operates CAKE, a marketing technology that provides a comprehensive suite of innovative marketing intelligence tools. Our powerful software-as-a-service (SaaS) platform is an enterprise solution that has been an industry standard for advertisers, agencies, networks and publishers to measurably analyze and improve digital marketing spend.

 

Business Highlights for Q2 2018

 

Journey platform gains momentum as sales and bookings increase: The Company’s roll-out of Journey continues to gain momentum with sequential increases in revenue, sales bookings and sales pipeline growth. New customer wins in the quarter included a leading global financial services provider. Journey is the Company’s flagship cloud-based platform solution targeting large advertisers, publishers and brands, that collects and analyzes customer journey data using multi-touch attribution for marketing campaign optimization. Accelerize sees the growing sales pipeline for Journey translating into a significant high margin revenue stream that will progressively grow throughout 2018.

Continued progress in the International marketing launch of JourneyThe Company launched its international marketing efforts for the Journey platform in Q1 2018 leading to growth in both Journey related revenue and sales bookings in Q2. With its international sales pipeline growth continuing to accelerate, the Company sees significant market potential for Journey outside the US.

Completed General Data Protection Regulation (GDPR) compliance readiness strategy: The Company completed its GDPR compliance readiness strategy ahead of the deadline established in the new regulation designed to protect the data of all European Union citizens. The Company also secured its Type 1 SOC 2 certification to help define an information and security policy and procedure. While the GDPR has caused significant uncertainty in the EU marketplace that the Company believes resulted in a 25% reduction in EU revenue related to lower transaction volumes, it sees the demonstration of its ongoing resource commitment to regulatory compliance leading to a reacceleration of growth in the second half of 2018 as companies become more accustomed to operating within the regulatory guidelines.

 

 

 

 

Migration from certain non-core customer relationshipsDuring the first half of 2018, the Company decided to migrate from certain non-core customer relationships through termination or non-renewal. The Company believes this will enable it to more effectively utilize its resources in higher margin areas of its CAKE and Journey platforms. This decision, coupled with the temporary effects of the implementation of GDPR regulation in the EU, led to a 10% decline in quarter over quarter revenues. Margins were also negatively affected by increased hosting costs in the quarter. The Company sees the addition of new Journey sales, an improving European market, and steps that have been taken in the quarter to reduce hosting costs leading to an increase in margins in the second half of 2018.

 

“We are excited about the positive momentum we are building in the rollout of Journey with both our current and new customers,” said Brian Ross, Chairman and CEO of Accelerize. “We believe that our investment in getting out ahead of the GDPR compliance curve will pay future dividends as companies adjust to the new regulatory environment in the EU. While moving away from certain customer relationships negatively impacted revenue in the short term, we believe it has enabled us to utilize those resources in an effort to drive higher margin revenue growth that will become more evident in the second half of 2018. We look forward to the continued expansion of our Journey rollout both here and abroad as we work to unlock the value of our SaaS platforms for the benefit of our shareholders.”

 

Financial Highlights for Q2 2018

 

Revenues: Total revenues for Q2 2018 were $5.4MM compared to $6.0MM in Q2 2017. Software Licensing revenue was $4.5MM with overage revenue of $679K in Q2 2018, compared to $4.9MM with overage revenue of $859K in Q2 2017. The decline in revenue was a result of the Company’s decision to terminate a major customer relationship as well as a decrease in revenue related to the temporary uncertainty surrounding the new GDPR regulation implemented in the EU. Other revenue, consisting primarily of professional service fees and other partner revenue, was $233K in Q2 2018 compared to $243K in Q2 2017. The Company anticipates future revenues to be driven by new customer adoption of its Journey platform, as well as ongoing organic growth, and international expansion.

 

 

 

 

Operating Loss: The Company recorded an operating loss of ($1.0MM) in Q2 2018 compared to operating loss of ($340K) in Q2 2017, primarily a result of a $700K decrease, or 19.3% decrease, in gross profit partially offset by a slight reduction in operating expenses. Gross margin was 54.3%, a 6.3% percentage point decline compared to 60.5% in Q2 2017. The decrease in margin and gross profit was mainly due to a decrease in revenue coupled with a $97K increase in web hosting costs. The Company expects gross profit and gross margin to improve in the second half of 2018 as new higher margin revenue is added from Journey customers and certain hosting costs decrease beginning in Q3.

Net Loss: Net loss for Q2 2018 was ($1.6MM), or ($0.02) per share on 65.9 million weighted average shares outstanding, compared to a net loss of ($617K), or ($0.01) per share on 65.3 million weighted average shares outstanding in Q2 2017.

Adjusted EBITDA: The Company recorded an Adjusted EBITDA loss of ($712K) for Q2 2018 compared to an adjusted EBITDA of $67K recorded in Q2 2017. Adjusted EBITDA is a non-GAAP measure management believes provides important insight into the Company’s operating results (see “Use of Non-GAAP Financial Information” and the reconciliations of non-GAAP financial measures later in the press release).

 

“We made significant progress during the quarter on several fronts including the expansion of sales bookings for Journey, our compliance efforts with the new EU regulations, and the alignment of our resources to support more meaningful high margin growth,” said Andy Mazzarella, CFO of Accelerize. “The steps we have taken to lower hosting costs after the completion of our data migration and hosting capacity expansion have already begun to flow through our system in the third quarter which should have a positive effect on overall costs moving forward. While regulatory uncertainty in Europe and our decision to move away from certain customer relationships had a negative impact on this quarter’s results, we are confident that our EU compliance commitment and strong sales pipeline for Journey will add higher margin revenue leading to improvements in our overall financial performance in the second half of the year.”

 

 

 

 

About Accelerize Inc.

 

Accelerize Inc. (OTCQB: ACLZ) offers marketing technology solutions that revolutionize the way advertisers leverage their digital advertising data. For more information, visit 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. describes the benefits and impact of Journey including contributing higher margin revenue growth, the market opportunity from Journey, expected improvement in revenue growth, the growth of future revenues, expected improvements in gross profit and gross margin, expected improvements in financial performance, and uses 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; or, 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 Inc.’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 Inc. 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.

 

Media Contact

Brittany Christopher

PR@getCAKE.com

(949) 548-2253 x 257

 

Investor Contact

Ascendant Partners, LLC

Richard Galterio

Rich@ascendantpartnersllc.com

(732) 410-9810

 

 

 

 

ACCELERIZE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   

June 30,

2018

   

December 31,

2017

 
    (Unaudited)          

ASSETS

               
                 

Current Assets:

               

Cash

  $ 1,021,833     $ 166,883  

Restricted cash

    50,000       50,000  

Accounts receivable, net of allowance for bad debt of $135,343 and $471,144, respectively

    2,898,828       2,692,636  

Prepaid expenses and other assets

    518,557       548,343  

Total current assets

    4,489,218       3,457,862  
                 

Property and equipment, net of accumulated depreciation of $797,778 and $775,152, respectively

    72,833       69,405  

Intangible assets, net of accumulated amortization of $2,833,350 and $2,512,203, respectively

    4,354,377       3,925,523  

Other assets

    110,735       123,124  

Total assets

  $ 9,027,163     $ 7,575,914  
                 

LIABILITIES AND STOCKHOLDERS' DEFICIT

               
                 

Current Liabilities:

               

Accounts payable and accrued expenses

  $ 2,455,181     $ 2,479,083  

Deferred revenues

    716,330       299,937  

Credit facility, short term

    3,411,787       3,055,812  

Other short-term loan, net of unamortized deferred financing cost of $0 and $0, respectively

    -       1,224,194  

Total current liabilities

    6,583,298       7,059,026  

Credit facility, net of unamortized deferred financing cost of $1,440,601 and $245,584, respectively

    6,119,381       4,402,988  

Other loan, related party net of unamortized deferred financing cost of $197,103 and $0, respectively

    352,897       -  

Other loan net of unamortized deferred financing cost of $519,636 and $82,868, respectively

    930,364       267,938  

Other liabilities

    850,000       1,062,500  

Total liabilities

    14,835,940       12,792,452  
                 

Stockholders' Deficit:

               

Series A Preferred stock; $0.001 par value; 54,000 shares authorized; None issued and outstanding.

    -       -  

Series B Preferred stock; $0.001 par value; 1,946,000 shares authorized; None issued and outstanding.

    -       -  

Common stock; $0.001 par value; 100,000,000 shares authorized; 65,939,709 and 65,939,709 shares issued and outstanding, respectively

    65,938       65,938  

Additional paid-in capital

    28,543,529       26,301,748  

Accumulated deficit

    (34,363,187

)

    (31,542,684

)

Accumulated other comprehensive loss

    (55,057

)

    (41,540

)

                 

Total stockholders’ deficit

    (5,808,777

)

    (5,216,538

)

                 

Total liabilities and stockholders’ deficit

  $ 9,027,163     $ 7,575,914  

 

 

 

 

ACCELERIZE INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

   

Three-month periods ended

   

Six-month periods ended

 
   

June 30,

   

June 30,

 
   

2018

   

2017

   

2018

   

2017

 
                                 

Revenues:

  $ 5,397,678     $ 5,994,154     $ 11,390,426     $ 11,950,878  

Cost of revenue

    2,469,136       2,365,364       4,822,996       3,910,709  

Gross profit

    2,928,542       3,628,790       6,567,430       8,040,169  
                                 

Operating expenses:

                               

Research and development

    987,776       1,133,437       2,110,399       2,176,556  

Sales and marketing

    1,061,708       1,083,303       2,232,192       2,299,793  

General and administrative

    1,906,277       1,751,672       3,906,163       3,677,914  

Total operating expenses

    3,955,761       3,968,412       8,248,754       8,154,263  
                                 

Operating loss

    (1,027,219

)

    (339,622

)

    (1,681,324

)

    (114,094

)

                                 

Other income (expense):

                               

Interest income

    25       1,042       786       742  

Interest expense

    (536,850

)

    (278,129

)

    (1,139,965

)

    (558,581

)

Total other (expenses)

    (536,825

)

    (277,087

)

    (1,139,179

)

    (557,839

)

                                 

Net loss

  $ (1,564,044

)

  $ (616,709

)

  $ (2,820,503

)

  $ (671,933

)

 

 

 

 

ACCELERIZE INC.

UNAUDITED RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

   

Three-month periods ended

   

Six-month periods ended

 
   

June 30,

   

June 30,

 
   

2018

   

2017

   

2018

   

2017

 

GAAP Net loss

  $ (1,564,044

)

  $ (616,709

)

  $ (2,820,503

)

  $ (671,933

)

EBITDA Calculation

                               

Interest

    519,879       254,792       1,096,034       511,189  

Depreciation-US

    7,449       31,437       17,552       64,706  

Depreciation-UK

    4,204       2,638       8,160       4,824  

Amortization

    216,146       181,531       321,146       315,103  

EBITDA:

  $ (816,366

)

  $ (146,311

)

  $ (1,377,611

)

  $ 223,889  

Stock-based compensation expense

    37,618       87,838       75,921       181,671  

Warrant expense

    66,514       125,867       127,564       251,734  

Adjusted EBITDA:

  $ (712,234

)

  $ 67,394     $ (1,174.126

)

  $ 657.294  

 

View differences made from one to another to evaluate Accelerize Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Accelerize Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account