Professional Diversity Network, Inc. (NASDAQ:IPDN), (“IPDN” or the
“Company”), a global developer and operator of online and in-person
networks that provides access to networking, training, educational
and employment opportunities for diverse individuals, today
announced its financial results for the quarter ended March 31,
2021.
First Quarter Financial
Highlights:
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Total consolidated revenues increased $0.5 million or 51 percent as
compared to the same period in the prior year. PDN Network segment
revenues increased $0.6 million or 107 percent compared to revenues
during the same period in the prior year. The increase in PDN
Network segment revenues was attributable to continued new client
acquisitions and continued growth in our recruitment business as a
result of increased political and corporate diversity and inclusion
efforts. Revenues for the three months ended March 31, 2021
from the NAPW segment decreased approximately $0.1 million as
compared to the same period in the prior year. The decrease in
revenues was primarily due to a continued decrease in legacy
membership retention rates and the continued effects of
COVID-19. |
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Basic and diluted net loss per share improved by $0.11, from a net
loss per share of $0.17 during the three months ended March 31,
2020, as compared to a net loss per share of $0.06 during the three
months ended March 31, 2021. |
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As of March 31, 2021, cash balances were $2.3 million and the
Company raised approximately $1.2 million from the issuance of
common stock which it intends to utilize for organic growth in its
PDN Network as well as to fund future strategic acquisitions. The
Company raised approximately $1.5 million from the issuance of
common stock in the same period of the prior year. |
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On April 22, 2021, the Company learned that RMB 18,841,064.15 had
been seized from the PDN China Account by Longxu District Court of
Wuzhou City in Guangxi Province to satisfy a judgment in favor of
the plaintiffs in the Gatewang case. The cash value at time of
seizure is approximately $2.9 million. The Company has
reflected the seizure of these cash funds in its Consolidated
Balance Sheets as of March 31, 2021 as a reduction in Long-term
assets from discontinued operations, which had a corresponding
effect on Stockholders’ equity. As a result, the Company’s
stockholders’ equity fell below the $2.5 million required by The
Nasdaq Stock Market LLC (“Nasdaq”) under its Listing Rule
5550(b)(1) for continued listing of the Company’s common shares on
the Nasdaq Capital Market. The Company plans to explore
alternatives for increasing its stockholders’ equity in order to
meet NASDAQ’s listing requirements, including the possibility of
issuing additional equity. |
“Our PDN Network had a very strong first quarter
and we anticipate that the continued corporate and political
awareness in terms of greater diversity recruitment and inclusion
initiatives will continue to benefit the Company, and in turn
society as a whole. We continue to invest in our operating segments
to drive organic growth, and look to better position the financial
strength of the Company for the future,” said Adam He, CEO of
Professional Diversity Network.
Financial Results for the Quarter Ended
March 31, 2021
Revenues
Total revenues for the three months ended March
31, 2021 increased approximately $502,000, or 51 percent to
approximately $1,484,000 from approximately $982,000 during the
same period in the prior year. The increase was predominately
attributable to an approximate $608,000 increase in recruitment
services revenues in the current period, partially offset by an
approximate $121,000 decrease in legacy membership fees and related
services revenues, as compared to the same period in the prior
year.
During the three months ended March 31, 2021,
our PDN Network generated approximately $1,175,000 in revenues
compared to approximately $567,000 in revenues during the three
months ended March 31, 2020, an increase of approximately $608,000
or 107 percent. The increase in revenues was predominately driven
by improvements in our e-commerce platform and new sales
collaborations, higher new client acquisitions and a significant
increase in diversity recruitment initiatives by our clients.
During the three months ended March 31, 2021,
our NAPW Network revenues were approximately $264,000, compared to
revenues of approximately $385,000 during the same period in the
prior year, a decrease of approximately $121,000 or 31 percent. The
decrease in revenues was primarily due to a continued decrease in
legacy membership retention rates and the continued effects of
COVID-19 as new membership enrollment slowly returns. We believe
that the membership services that we provide to our customers
turned into a discretionary spending item during 2020 and the first
three months of 2021 and the services that we provide were
postponed as a result of the financial and economic impact of
COVID-19.
Costs and Expenses
Cost of revenues during the three months ended
March 31, 2021 was approximately $261,000, an increase of
approximately $88,000 or 51 percent from approximately $173,000
during the same period of the prior year, as a result of increased
revenues.
Net Loss from Continuing
Operations
As the result of the factors discussed above,
during the three months ended March 31, 2021, we incurred a net
loss of approximately $756,000 from continuing operations, an
improvement of approximately $667,000 or 47 percent, compared to a
net loss of approximately $1,422,000 during the three months ended
March 31, 2020.
Summary of the Quarter’s Financial
Information
Amounts in following tables are in thousands except for per
share amounts and outstanding shares.
Summary of Financial Position
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March 31, 2021 |
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December 31, 2020 |
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Current Assets: |
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Cash and cash equivalents |
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$ |
2,342 |
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$ |
2,118 |
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Other current assets |
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1,469 |
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|
1,403 |
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Total current assets |
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$ |
3,811 |
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$ |
3,521 |
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Long-term assets |
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|
2,227 |
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|
5,152 |
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Total Assets |
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$ |
6,038 |
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$ |
8,673 |
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Total current liabilities |
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$ |
4,496 |
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$ |
4,677 |
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Total long-term
liabilities |
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578 |
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650 |
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Total liabilities |
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$ |
5,074 |
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$ |
5,327 |
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Total stockholders’
equity |
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964 |
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3,346 |
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Total liabilities and
stockholders’ equity |
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$ |
6,038 |
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$ |
8,673 |
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Summary of Financial Operations
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Three Months EndedMarch 31, |
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Change |
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Change |
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2021 |
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2020 |
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(Dollars) |
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(Percent) |
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Revenues: |
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Membership fees and related services |
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$ |
263 |
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$ |
384 |
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$ |
(121 |
) |
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(31.5 |
)% |
Recruitment services |
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1,175 |
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567 |
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608 |
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107.2 |
% |
Products sales and other |
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1 |
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1 |
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- |
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- |
% |
Consumer advertising and marketing solutions |
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45 |
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30 |
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15 |
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50.0 |
% |
Total revenues |
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$ |
1,484 |
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$ |
982 |
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$ |
502 |
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51.1 |
% |
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Cost and expenses: |
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Cost of revenues |
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$ |
261 |
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$ |
173 |
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$ |
88 |
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50.9 |
% |
Sales and marketing |
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700 |
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525 |
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175 |
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33.3 |
% |
General and
administrative |
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1,318 |
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1,661 |
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(343 |
) |
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(20.7 |
)% |
Depreciation and
amortization |
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29 |
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52 |
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(23 |
) |
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(42.3 |
)% |
Total pre-tax cost and
expenses: |
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$ |
2,308 |
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$ |
2,411 |
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$ |
(103 |
) |
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(4.2 |
)% |
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Loss from continuing
operations |
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$ |
(824 |
) |
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$ |
(1,429 |
) |
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$ |
605 |
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42.3 |
% |
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Basic and diluted loss per
share: |
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Continuing operations |
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$ |
(0.06 |
) |
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$ |
(0.16 |
) |
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Weighted average outstanding
shares used in computing net loss per common share: |
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Basic and diluted |
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13,263,402 |
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8,969,475 |
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Summary of Cash Flows from
Continued Operations |
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Cash (used in) provided by
continued operations |
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Operating activities |
|
$ |
(769 |
) |
|
$ |
(574 |
) |
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Investing activities |
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|
(6 |
) |
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|
(5 |
) |
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|
|
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Financing activities |
|
|
1,000 |
|
|
|
1,500 |
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|
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Net increase in cash and cash
equivalents from continued operations |
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$ |
225 |
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$ |
922 |
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Professional Diversity Network, Inc. and
SubsidiariesNon-GAAP (Adjusted) Financial
Measures
We believe Adjusted EBITDA provides a meaningful
representation of our operating performance that provides useful
information to investors regarding our financial condition and
results of operations. Adjusted EBITDA is commonly used by
financial analysts and others to measure operating performance.
Furthermore, management believes that this non-GAAP financial
measure may provide investors with additional meaningful
comparisons between current results and results of prior periods as
they are expected to be reflective of our core ongoing business.
However, while we consider Adjusted EBITDA to be an important
measure of operating performance, Adjusted EBITDA and other
non-GAAP financial measures have limitations, and investors should
not consider them in isolation or as a substitute for analysis of
our results as reported under GAAP. Further, Adjusted EBITDA, as we
define it, may not be comparable to EBITDA, or similarly titled
measures, as defined by other companies.
The following table provides a reconciliation of
net loss from continuing operations to Adjusted EBITDA, the most
directly comparable GAAP measure reported in our consolidated
financial statements:
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Three Months Ended March 31, |
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2021 |
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2020 |
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(in thousands) |
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Loss from Continuing Operations |
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$ |
(756 |
) |
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$ |
(1,422 |
) |
Stock-based compensation |
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|
106 |
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|
19 |
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Litigation settlement reserve |
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- |
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|
450 |
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Depreciation and amortization |
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|
30 |
|
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52 |
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Interest and other income |
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|
1 |
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1 |
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Income tax benefit |
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(67 |
) |
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(6 |
) |
Adjusted
EBITDA |
|
$ |
(686 |
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$ |
(906 |
) |
About Professional Diversity
Network
Professional Diversity Network, Inc. (NASDAQ:
IPDN) is a global developer and operator of online and in-person
networks that provides access to networking, training, educational
and employment opportunities for diverse professionals. We operate
subsidiaries in the United States including International
Association of Women (IAW), which is one of the largest, most
recognized networking organizations of professional women in the
country, spanning more than 200 industries and professions. Through
an online platform and our relationship recruitment affinity
groups, we provide our employer clients a means to identify and
acquire diverse talent and assist them with their efforts to comply
with the Equal Employment Opportunity Office of Federal Contract
Compliance Program. Our mission is to utilize the collective
strength of our affiliate companies, members, partners and unique
proprietary platform to be the standard in business diversity
recruiting, networking and professional development for women,
minorities, veterans, LGBTQ and disabled persons globally.
Forward-Looking Statements
This press release contains certain
forward-looking statements based on our current expectations,
forecasts and assumptions that involve risks and uncertainties.
This release does not constitute an offer to sell or a solicitation
of offers to buy any securities of any entity. Forward-looking
statements in this release are based on information available to us
as of the date hereof. Our actual results may differ materially
from those stated or implied in such forward-looking statements,
due to risks and uncertainties associated with our business, which
include the risk factors disclosed in our most recently filed
Annual Report on Form 10-K and in our subsequent filings with the
Securities and Exchange Commission. Forward-looking statements
include statements regarding our expectations, beliefs, intentions
or strategies regarding the future and can be identified by
forward-looking words such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “should,” and
“would” or similar words. We assume no obligation to update the
information included in this press release, whether as a result of
new information, future events or otherwise. Our most recently
filed Annual Report on Form 10-K, together with this press release
and the financial information contained herein, are available on
our website, www.prodivnet.com. Please click on “Investor
Relations.”
Investor Inquiries:investors@ipdnusa.com+1 (312)
614-0950Source: Professional Diversity Network, Inc.
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