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| 8-K - FORM 8-K - Innovaro, Inc. | d8k.htm |
Exhibit 99.1
Innovaro, Inc. Reports Financial Results for Three Months Ended June 30, 2011
Tampa, FL — (Business Wire) – August 10, 2011 – Innovaro, Inc. (NYSE Amex: INV) today announced that total revenue was $5.2 million for the quarter ended June 30, 2011 as compared to $2.8 million for the quarter ended June 30, 2010 and net loss for the quarter ended June 30, 2011 was ($1.0 million) as compared to ($1.2 million) for the quarter ended June 30, 2010.
Second Quarter 2011 and 2010 Financial Results Summary
| • | Total revenue increased to $5.2 million for the three months ended June 30, 2011 from $2.8 million for the three months ended June 30, 2010. |
| • | Strategic Services revenue for the second quarter of 2011 increased by 138% over the second quarter of 2010. |
| • | Technology Services revenue for the second quarter of 2011 decreased by 24% over the second quarter of 2010. |
| • | Total expenses increased to $6.7 million for the three months ended June 30, 2011 from $4.1 million for the three months ended June 30, 2010. |
| • | Innovation management software platform R&D costs were $330,000 for the second quarter of 2011 as compared to $351,000 for the second quarter of 2010. |
| • | Net loss for the three months ended June 30, 2011 was ($1.0 million) and included the following non-cash (income) and expense items: ($370,000) gain on derivative liabilities; $339,000 in non-cash depreciation and amortization; and $186,000 in non-cash stock-based compensation expense related to vesting options. Net loss for the three months ended June 30, 2010 was ($1.2 million), which included the following non-cash expense items: $12,000 loss on derivative liabilities; $396,000 in non-cash depreciation and amortization; and $151,000 in non-cash stock-based compensation expense related to vesting options. |
Financial Condition
Our total assets were $25.0 million as of June 30, 2011 and $24.7 million as of December 31, 2010. As of June 30, 2011 we had $633,000 in cash and cash equivalents, $2.9 million in accounts receivable and contracts in progress, $3.4 million in accounts payable, accrued bonus and accrued expenses and $5.5 million in debt. As of December 31, 2010, we had $263,000 in cash and cash equivalents, $2.0 million in accounts receivable and contracts in progress, $1.5 million in accounts payable and accrued expenses and $5.8 million in debt.
Innovaro, Inc.
Consolidated Balance Sheets
| June 30, 2011 (Unaudited) |
December 31, 2010 |
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| ASSETS | ||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 632,987 | $ | 262,619 | ||||
| Accounts receivable, net |
2,668,868 | 1,796,454 | ||||||
| Contracts in process |
187,613 | 214,734 | ||||||
| Available-for-sale securities |
122,598 | 171,139 | ||||||
| Prepaid expenses and other assets |
538,933 | 791,432 | ||||||
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| Total current assets |
4,150,999 | 3,236,378 | ||||||
| Cost method investments |
95,589 | 95,589 | ||||||
| Equity method investments |
303,454 | 303,454 | ||||||
| Note receivable and accrued interest |
1,752,000 | 1,700,000 | ||||||
| Fixed assets, net |
6,625,869 | 6,736,567 | ||||||
| Goodwill |
6,449,722 | 6,407,640 | ||||||
| Intangible assets, net |
5,629,524 | 6,174,792 | ||||||
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| Total assets |
$ | 25,007,157 | $ | 24,654,420 | ||||
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| LIABILITIES | ||||||||
| Current liabilities: |
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| Accounts payable |
$ | 1,231,670 | $ | 1,078,088 | ||||
| Accrued expenses |
611,248 | 420,707 | ||||||
| Accrued bonus |
1,520,848 | — | ||||||
| Deferred revenue |
1,014,712 | 987,624 | ||||||
| Current maturities of long-term debt |
174,138 | 433,964 | ||||||
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| Total current liabilities |
4,552,616 | 2,920,383 | ||||||
| Long-term debt, less current maturities |
5,311,320 | 5,358,173 | ||||||
| Derivative liabilities |
1,273,471 | 1,140,005 | ||||||
| Deferred tax liability |
1,201,948 | 1,220,687 | ||||||
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| Total liabilities |
12,339,355 | 10,639,248 | ||||||
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| EQUITY | ||||||||
| Innovaro stockholders’ equity: |
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| Preferred stock, $.01 par value, 1,000,000 shares authorized; none issued and outstanding |
— | — | ||||||
| Common stock, $.01 par value, 29,000,000 shares authorized; 15,187,963 and 14,631,950 shares issued; 15,021,274 and 14,585,261 shares outstanding at June 30, 2011 and December 31, 2010, respectively |
150,213 | 145,853 | ||||||
| Additional paid-in capital |
86,579,309 | 85,024,704 | ||||||
| Accumulated deficit |
(74,740,629 | ) | (71,829,344 | ) | ||||
| Accumulated other comprehensive income |
150,689 | 147,922 | ||||||
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| Total Innovaro stockholders’ equity |
12,139,582 | 13,489,135 | ||||||
| Noncontrolling interest |
528,220 | 526,037 | ||||||
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| Total equity |
12,667,802 | 14,015,172 | ||||||
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| Total liabilities and equity |
$ | 25,007,157 | $ | 24,654,420 | ||||
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Innovaro, Inc.
Consolidated Statements of Operations
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue: |
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| Strategic services |
$ | 4,555,245 | $ | 1,916,588 | $ | 7,583,106 | $ | 3,346,630 | ||||||||
| Technology services |
670,237 | 884,187 | 1,245,105 | 1,724,576 | ||||||||||||
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| 5,225,482 | 2,800,775 | 8,828,211 | 5,071,206 | |||||||||||||
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| Expenses: |
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| Direct costs of revenue – Strategic services |
4,475,680 | 1,171,222 | 6,157,242 | 2,175,646 | ||||||||||||
| Direct costs of revenue – Technology services |
365,213 | 429,809 | 698,455 | 873,757 | ||||||||||||
| Salaries and wages |
485,427 | 789,629 | 809,935 | 1,469,155 | ||||||||||||
| Professional fees |
96,870 | 165,808 | 185,149 | 367,097 | ||||||||||||
| Research and development |
330,087 | 351,495 | 633,664 | 550,654 | ||||||||||||
| Sales and marketing |
52,883 | 191,581 | 114,118 | 437,877 | ||||||||||||
| General and administrative |
523,624 | 582,422 | 1,028,310 | 1,177,672 | ||||||||||||
| Depreciation and amortization |
339,097 | 395,913 | 680,185 | 796,408 | ||||||||||||
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| 6,668,881 | 4,077,879 | 10,307,058 | 7,848,266 | |||||||||||||
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| Other (income) and expense: |
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| Other (income) expense |
(498,887 | ) | (154,315 | ) | 1,229,758 | (156,389 | ) | |||||||||
| Interest expense, net |
81,623 | 142,084 | 223,210 | 277,238 | ||||||||||||
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| (417,264 | ) | (12,231 | ) | 1,452,968 | 120,849 | |||||||||||
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| Loss before income taxes |
(1,026,135 | ) | (1,264,873 | ) | (2,931,815 | ) | (2,897,909 | ) | ||||||||
| Provision for income tax benefit |
(8,129 | ) | (34,098 | ) | (16,127 | ) | (89,809 | ) | ||||||||
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| Net loss |
(1,018,006 | ) | (1,230,775 | ) | (2,915,688 | ) | (2,808,100 | ) | ||||||||
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| Net loss attributable to the noncontrolling interest |
(1,976 | ) | (1,434 | ) | (4,403 | ) | (2,361 | ) | ||||||||
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| Net loss attributable to Innovaro stockholders |
$ | (1,016,030 | ) | $ | (1,229,341 | ) | $ | (2,911,285 | ) | $ | (2,805,739 | ) | ||||
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| Net loss attributable to Innovaro stockholders per share: Basic and diluted |
$ | (0.07 | ) | $ | (0.10 | ) | $ | (0.19 | ) | $ | (0.24 | ) | ||||
| Weighted average shares outstanding: Basic and diluted |
14,963,859 | 11,872,196 | 14,993,148 | 11,834,875 | ||||||||||||
Innovaro, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2011 | 2010 | |||||||
| Operating Activities: |
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| Net loss attributable to Innovaro stockholders |
$ | (2,911,285 | ) | $ | (2,805,739 | ) | ||
| Adjustments to reconcile net loss attributable to Innovaro stockholders to net cash flows from operating activities: |
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| Net loss attributable to noncontrolling interest |
(4,403 | ) | (2,361 | ) | ||||
| Depreciation and amortization |
680,185 | 796,408 | ||||||
| Amortization of debt discount from investor warrants |
65,526 | 91,735 | ||||||
| Loss on sale and impairment of available-for-sale securities |
201 | 34,801 | ||||||
| Loss (gain) on derivative liabilities |
1,424,296 | (41,950 | ) | |||||
| Stock-based compensation |
268,135 | 299,373 | ||||||
| Deferred income taxes |
(16,127 | ) | (89,809 | ) | ||||
| Loss (gain) on disposal of fixed assets |
11,015 | 1,406 | ||||||
| Bad debt expense |
1,067 | (33,501 | ) | |||||
| Changes in operating assets and liabilities: |
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| Accounts receivable and contracts in process |
(846,360 | ) | (239,783 | ) | ||||
| Prepaid expenses and other assets |
211,644 | (91,127 | ) | |||||
| Deferred revenue |
27,088 | (164,209 | ) | |||||
| Accounts payable and accrued expenses |
1,871,556 | 465,980 | ||||||
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| Net cash flows from operating activities |
782,538 | (1,778,776 | ) | |||||
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| Investing Activities: |
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| Capital expenditures |
(22,758 | ) | (29,729 | ) | ||||
| Proceeds from sale of available-for-sale securities |
— | 249,145 | ||||||
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| Net cash flows from investing activities |
(22,758 | ) | 219,416 | |||||
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| Financing Activities: |
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| Proceeds from borrowings on bank line of credit |
— | 200,000 | ||||||
| Payments on long-term debt |
(383,350 | ) | (193,775 | ) | ||||
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| Net cash flows from financing activities |
(383,350 | ) | 6,225 | |||||
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| Effect of foreign exchange rates |
(6,062 | ) | (6,487 | ) | ||||
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| Increase (decrease) in cash and cash equivalents |
370,368 | (1,559,622 | ) | |||||
| Cash and cash equivalents at beginning of period |
262,619 | 2,118,970 | ||||||
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| Cash and cash equivalents at end of period |
$ | 632,987 | $ | 559,348 | ||||
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Conference Call Information
We will host a live conference call at 4:30 p.m. ET today to discuss the results. Investors and analysts are invited to attend the conference call.
Investors and analysts can participate in the call by dialing:
US & Canada: 866-240-5139
UK: 0-800-368-0590
Other International Callers: 713-481-0091
About Innovaro, Inc.
Innovaro, Inc. is a comprehensive end-to-end innovation solution provider. With fully scalable solutions, whether for a global 1000 company or small R&D lab or university scientist, we help our clients create breakthrough innovation, realize latent value in their IP and accelerate their innovations to market. Leading companies trust us to create profitable growth, new revenue streams, enduring capabilities and lasting value through innovation. For more information about Innovaro, please visit our website at www.innovaro.com.
Forward-Looking Statements
Certain matters discussed in this press release are “forward-looking statements.” These forward-looking statements can generally be identified as such because the context of the statement will include words such as “expects,” “should,” “believes,” “anticipates” or words of similar import. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements and these factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This press release is available at www.innovaro.com.
Contacts:
Innovaro
Tania Bernier
media@innovaro.com
813-754-4330 x223