The Meet Group, Inc. (NASDAQ: MEET), a public market leader in
the mobile meeting space, today reported financial results for its
third quarter ended September 30, 2017.
Third Quarter 2017 Financial Highlights
- Total revenue of $32.2 million, up 88%
year over year.
- Mobile revenue of $23.7 million, up 47%
year over year.
- GAAP net income of $2.2 million, or
$0.03 per diluted share, compared to net income of $4.4 million, or
$0.07 per diluted share in the prior year quarter.
- Adjusted EBITDA of $8.9 million, up 30%
year over year, or a 28% margin.
- Non-GAAP net income of $8.1 million, or
$0.11 per diluted share, compared to $6.2 million or $0.10 per
diluted share in the prior year quarter.
- Cash and cash equivalents totaled $24.6
million at September 30, 2017.
(See the important discussion about the presentation of non-GAAP
financial measures, and reconciliation to the most direct
comparable GAAP financial measure, below.)
"The third quarter was transformational for The Meet Group, as
we announced the acquisition of Lovoo, a European mobile dating
leader, and launched live video monetization,” said Geoff Cook,
Chief Executive Officer. “We believe the acquisition of Lovoo and
the launch of our live video gifting platform is diversifying our
revenue mix by increasing our non-advertising revenue streams.
Early data on our live video product indicates its potential to be
the most exciting new monetization feature in our history, and we
are continuing to build a tremendous pipeline of live video
products across our portfolio of brands.
“While our short-term results and forecast are currently
impacted by greater than anticipated downward pressure on CPMs
across the programmatic ad industry, we are confident that our
strong product pipeline and expanded portfolio of brands will help
us create more predictable and user-generated revenue streams.
Additionally, our integrations of Skout and Tagged are progressing
as planned, and we have identified and begun implementing
efficiencies and cost savings initiatives that we expect to drive
further leverage in our operating model.”
David Clark, Chief Financial Officer, added, “Our mobile revenue
growth of 47% year over year reflects increases in our mobile
impressions through the acquisitions of Skout and Tagged. Adjusted
EBITDA increased 30% to $8.9 million for the quarter, representing
a 28% adjusted EBITDA margin. We generated $6.0 million in cash
from operations, ending the quarter with $24.6 million cash and
cash equivalents.”
The Meet Group also announced a number of changes to its finance
department. David Clark, current Chief Financial Officer, by mutual
agreement will be leaving the company at the end of this year. He
will assist in the transition of the Company’s finance and
accounting functions until his departure. Jim Bugden, current Sr.
Vice President, Corporate Development, has been appointed Interim
Chief Financial Officer, effective November 13, and a search for a
permanent CFO is underway and will be led by James & Co. The
Meet Group also announced the promotion of Mike Johnson to Chief
Accounting Officer and the hiring of Leslie Arena as Vice
President, Investor Relations, both effective on November 13.
“David has been a key member of the executive team, and we thank
him for his dedication and strong contributions. Under his
leadership, we grew EBITDA from $3.9 million in 2012 to more than
$30 million in the four quarters ending September 30, 2017. I am
grateful for his many contributions,” said Mr. Cook. “I am
confident Jim Bugden will succeed as Interim CFO. Jim earned his
CPA with Deloitte and has over 15 years of CFO and financial and
accounting leadership experience. Jim has been leading our
corporate development efforts for the past two years and will
continue to assist with the integration of our recent acquisitions.
I would also like to congratulate Mike Johnson on his appointment
as CAO. Mike has effectively led our accounting team for nine
years, the last six as a public company. Mike has proven himself
again and again as an effective leader of the finance and
accounting team.
“Finally, I am excited at the opportunity to work with Leslie
Arena, our new VP of Investor Relations. Leslie is an
experienced IR professional, having most recently served as Vice
President of Investor Relations and Corporate Communications at
Angie’s List. Prior to that, she led Investor Relations and
Competitive Analysis at Vonage, a leading SaaS company serving
small and medium businesses. She brings a wealth of relevant
experience in technology and communications companies and will be a
great addition to our team.”
Company Outlook:
The Company has updated its outlook for the fourth quarter
2017:
- Revenue in the range of $36.5 million
to $38 million.
- Adjusted EBITDA in the range of $7.5
million to $9.5 million.
The Company has updated its outlook for the full year 2017:
- Revenue in the range of $120.1 million
to $121.6 million.
- Adjusted EBITDA in the range of $28.6
million to $30.6 million.
Webcast and Conference Call Details
Management will host a webcast and conference call to discuss
third quarter 2017 financial results today, November 8, 2017 at
4:30 p.m. Eastern time. To access the call dial 877-329-7568 (US
and Canada) or +1 719-785-1766 (International) and when prompted
provide the participant passcode 9957559 to the operator. In
addition, a webcast of the conference call will be available live
on the Investor Relations section of the Company’s website at
www.themeetgroup.com and a replay of the webcast will be available
for 90 days.
About The Meet Group
The Meet Group (NASDAQ: MEET) is a fast-growing portfolio of
mobile apps designed to meet the universal need for human
connection. Our apps – currently MeetMe®, LOVOO®, Skout®, Tagged®,
and Hi5® – let users in more than 100 countries chat, share photos,
stream live video, and discuss topics of interest, and are
available on iPhone, iPad, and Android in
multiple languages. Using innovative products and
sophisticated data science, The Meet Group keeps its over 4.5
million mobile daily active users engaged and originates untold
numbers of casual chats, friendships, dates, and
marriages. The Meet Group offers advertisers the opportunity
to reach customers on a global scale and has leading mobile
monetization strategies, including advertising, in-app purchases,
and subscription products. The Meet Group has offices in New Hope,
San Francisco, Dresden, and Berlin. For more information,
visit themeetgroup.com, and follow us
on Facebook, Twitter or LinkedIn.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including whether our total revenue and mobile
revenue will continue to grow, whether our adjusted EBITDA will
continue to grow, whether our live video product will be the most
exciting new monetization feature in our history, whether we will
continue to build a tremendous pipeline of live video products
across our portfolio of brands, whether our strong product pipeline
and expanded portfolio of brands will help us create more
predictable and user-generated revenue streams, whether
implementing efficiencies and cost savings initiatives will drive
further leverage in our operating model, whether Jim Bugden will
succeed as Interim CFO, and whether we will meet our fourth quarter
and year end revenue and adjusted EBITDA guidance. All statements
other than statements of historical facts contained herein are
forward-looking statements. The words “believe,” “may,” “estimate,”
“continue,” “anticipate,” “intend,” “should,” “plan,” “could,”
“target,” “potential,” “project,” “is likely,” “expect” and similar
expressions, as they relate to us, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on our current expectations and projections
about future events and financial trends that we believe may affect
our financial condition, results of operations, business strategy
and financial needs. Important factors that could cause actual
results to differ from those in the forward-looking statements
include the risk that our applications will not function easily or
otherwise as anticipated, the risk that we will not launch
additional features and upgrades as anticipated, the risk that
unanticipated events affect the functionality of our applications
with popular mobile operating systems, any changes in such
operating systems that degrade our mobile applications’
functionality and other unexpected issues which could adversely
affect usage on mobile devices. Further information on our risk
factors is contained in our filings with the Securities and
Exchange Commission (“SEC”), including the Form 10-K for the year
ended December 31, 2016 filed with the SEC on March 9, 2017, our
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2017 and June 30, 2017 filed with the SEC on May 10, 2017 and
August 4, 2017, respectively, and our Current Report on Form 8-K
filed with the SEC on September 20, 2017. Any forward-looking
statement made by us herein speaks only as of the date on which it
is made. Factors or events that could cause our actual results to
differ may emerge from time to time, and it is not possible for us
to predict all of them. We undertake no obligation to publicly
update any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be
required by law.
Regulation G – Non-GAAP Measures
The Company defines mobile traffic and engagement metrics
(including MAU, DAU, chats per day, and new users per day) to
include mobile app traffic for all properties and mobile web
traffic for MeetMe and Skout.
The Company uses Adjusted EBITDA and Non-GAAP Net Income, which
are not calculated and presented in accordance with U.S. generally
accepted accounting principles (“GAAP”), in evaluating its
financial and operational decision making and as a means to
evaluate period-to period comparison. The Company uses these
non-GAAP financial measures for financial and operational
decision-making and as a means to evaluate period-to-period
comparisons. The Company presents these non-GAAP financial measures
because it believes them to be an important supplemental measure of
performance that is commonly used by securities analysts, investors
and other interested parties in the evaluation of companies in our
industry. We refer you to the reconciliations below.
The Company defines Adjusted EBITDA as earnings (or loss) from
operations before interest expense, benefit or provision for income
taxes, depreciation and amortization, stock-based compensation,
warrant obligations, non-recurring acquisition, restructuring or
other expenses, gain or loss on cumulative foreign currency
translation adjustment, gain on sale of asset, bad debt expense
outside the normal range, and goodwill and long-lived asset
impairment charges. The Company excludes stock-based compensation
because it is non-cash in nature. The Company defines Non-GAAP Net
Income as earnings (or loss) before benefit or provision for income
taxes, amortization of intangibles, non-recurring acquisition and
restructuring costs, bad debt expense outside the normal range, and
non-cash stock based compensation.
Non-GAAP financial measures should not be considered as an
alternative to net income, operating income, cash flow from
operating activities, as a measure of liquidity or any other
financial measure. They may not be indicative of the historical
operating results of the Company nor is it intended to be
predictive of potential future results. Investors should not
consider non-GAAP financial measures in isolation or as a
substitute for performance measures calculated in accordance with
GAAP.
THE MEET GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, December 31, 2017
2016 ASSETS CURRENT ASSETS: Cash and cash equivalents
$ 24,642,002 $ 21,852,531 Accounts receivable, net of allowance of
$451,000 and $283,000, at September 30, 2017 and December 31, 2016,
respectively 22,680,468 23,737,254 Prepaid expenses and other
current assets
2,131,095
1,489,267 Total current assets
49,453,565 47,079,052
Restricted Cash 894,305 393,484 Goodwill 150,088,783
114,175,554 Property and equipment, net 3,360,015 2,466,110
Intangible assets, net 34,858,106 17,010,565 Deferred taxes
32,501,672 28,253,827 Other assets
918,248
110,892 Total assets
$ 272,074,694
$ 209,489,484
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Accounts payable $ 4,904,223 $ 5,350,336 Accrued liabilities
13,926,046 8,395,060 Current portion of capital lease obligations
18,901 221,302 Deferred revenue
1,127,610
434,197 Total current liabilities
19,976,780
14,400,895 Total liabilities
19,976,780
14,400,895 STOCKHOLDERS'
EQUITY: Preferred stock, $.001 par value; authorized -
5,000,000 Shares at September 30, 2017 and December 31, 2016; 0
shares issued and outstanding at September 30, 2017 and December
31, 2016 - - Common stock, $.001 par value; authorized -
100,000,000 Shares; 71,804,766 and 58,945,607 issued and
outstanding at September 30, 2017 and December 31, 2016,
respectively 71,808 58,949 Additional paid-in capital 405,345,104
351,873,801 Accumulated deficit
(153,318,998
) (156,844,161 )
TOTAL STOCKHOLDERS' EQUITY
252,097,914
195,088,589 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $
272,074,694 $
209,489,484
THE MEET GROUP, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED) Three Months Ended September
30, Nine Months Ended September 30,
2017
2016 2017
2016 Revenues
$ 32,246,472 $
17,191,261 $
83,634,737 $
46,901,923 Operating costs and expenses:
Sales and marketing 4,600,148 3,228,262 14,305,498 8,776,029
Product development and content 16,021,977 5,808,449 41,006,376
17,730,610 General and administrative 5,021,739 2,215,727
13,044,965 6,431,486 Depreciation and amortization 2,969,570
761,460 7,619,584 2,266,642 Acquisition and restructuring
3,378,838 467,777
8,648,692 1,628,126
Total operating costs and expenses
31,992,272 12,481,675
84,625,115
36,832,893 Income (loss) from operations
254,200 4,709,586
(990,378 )
10,069,030 Other income (expense):
Interest income 1,374 7,135 5,344 18,697 Interest expense (244,361
) (4,123 ) (421,947 ) (16,228 ) Change in warrant liability -
(318,983 ) - (864,596 ) Gain (loss) on foreign currency adjustment
9,357 (1,206
) (2,072 )
33,347 Total other expense
(233,630 ) (317,177
) (418,675 )
(828,780 ) Income (loss) before
income taxes 20,570 4,392,409 (1,409,053 ) 9,240,250 Benefit from
income taxes
2,202,152
- 4,934,216
27,125,446 Net income
$
2,222,722 $ 4,392,409
$ 3,525,163 $
36,365,696 Basic and diluted net income
per common stockholders: Basic net income per common stockholders
$ 0.03 $
0.08 $ 0.05
$ 0.73 Diluted net income per
common stockholders
$ 0.03
$ 0.07 $
0.05 $ 0.65
Weighted average shares outstanding: Basic
71,800,274 53,231,369
67,711,324
49,649,221 Diluted
76,078,563 59,048,821
72,425,863
55,604,866 Comprehensive income
$ 2,222,722 $
4,392,409 $ 3,525,163
$ 36,365,696
THE MEET GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(UNAUDITED) Three Months Ended September
30, Nine Months Ended September 30,
2017
2016 2017
2016 Net income
$ 2,222,722 $
4,392,409 $ 3,525,163
$ 36,365,696 Interest
expense 244,361 4,123 421,947 16,228 Change in warrant liability -
318,983 - 864,596 Benefit from income taxes (2,202,152 ) -
(4,934,216 ) (27,125,446 ) Depreciation and amortization 2,969,570
761,460 7,619,584 2,266,642 Stock-based compensation expense
2,299,696 911,490 5,802,046 2,554,842 Acquisition and restructuring
3,378,838 467,777 8,648,692 1,628,126 (Gain) loss on foreign
currency adjustment
(9,357 )
1,206 2,072
(33,347 ) Adjusted EBITDA
$
8,903,678 $ 6,857,448
$ 21,085,288 $
16,537,337 GAAP basic net income
per common stockholders
$ 0.03
$ 0.08 $ 0.05
$ 0.73 GAAP diluted net
income per common stockholders
$ 0.03
$ 0.07 $
0.05 $ 0.65
Basic adjusted EBITDA per common stockholders
$
0.12 $ 0.13
$ 0.31 $
0.33 Diluted adjusted EBITDA per common
stockholders
$ 0.12 $
0.12 $ 0.29
$ 0.30 Weighted average
shares outstanding Basic
71,800,274
53,231,369 67,711,324
49,649,221 Diluted
76,078,563 59,048,821
72,425,863
55,604,866 THE
MEET GROUP, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP NET INCOME (UNAUDITED)
Three Months Ended September 30, Six
Months Ended June 30, 2017
2016
2017 2016
GAAP Net Income
$ 2,222,722
$ 4,392,409 $
3,525,163 $
36,365,696 Stock-based compensation
expense 2,299,696 911,490 5,802,046 2,554,842 Amortization of
intangibles 2,378,152 381,916 5,982,459 1,142,583 Benefit from
income taxes (2,202,152 ) - (4,934,216 ) (27,125,446 ) Acquisition
and restructuring
3,378,838
467,777 8,648,692
1,628,126 Non-GAAP net Income
$ 8,077,256 $
6,153,592 $
19,024,144 $
14,565,801 GAAP basic net income
per common stockholder
$ 0.03
$ 0.08 $
0.05 $ 0.73
GAAP diluted net income per common stockholder
$
0.03 $ 0.07
$ 0.05 $
0.65 Basic Non-GAAP net income per common
stockholder
$ 0.11 $
0.12 $ 0.28
$ 0.29 Diluted Non-GAAP net income
per common stockholder
$ 0.11
$ 0.10 $
0.26 $ 0.26
Weighted average shares outstanding Basic
71,800,274 53,231,369
67,711,324
49,649,221 Diluted
76,078,563 59,048,821
72,425,863
55,604,866
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version on businesswire.com: http://www.businesswire.com/news/home/20171108006458/en/
Investor Contact:The Blueshirt GroupAllise Furlani or
Brinlea Johnson212-331-8433IR@Themeetgroup.comorMedia
Contact:The Meet Group, Inc.Brandyn Bissinger,
267-446-7010bbissinger@themeetgroup.com
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