First Quarter as a Standalone Public
Company Produces $56.0 Million in Revenue,
Fluent, Inc. (NASDAQ:FLNT) a leading data-driven performance
marketing company, today announced financial results for the
quarter ended March 31, 2018.
“We have built an incredible company and are excited to present
Fluent’s standalone results, which show positive adjusted net
income and adjusted earnings per share, after removing transaction
costs and discontinued operations,” stated Ryan Schulke, Fluent’s
CEO. “We look forward to this team’s continued success,
driving profitability and delivering strong results for our
shareholders.”
First Quarter Financial Results
For the three months ended March 31, 2018, as compared to the
three months ended March 31, 2017:
- Total revenue increased 14% to $56.0 million.
- Net loss from continuing operations was $5.6 million (inclusive
of spin-off transaction costs of $7.7 million) compared to net loss
from continuing operations of $9.8 million.
- Net loss from discontinued operations was $21.1 million
compared to $2.9 million.
- Adjusted net income was $2.2 million compared to a loss of $9.8
million.
- Adjusted EBITDA grew 42% to $9.6 million based on net loss of
$26.7 million.
- Adjusted earnings per share was $0.03 compared to a loss of
$0.18 per share.
Adjusted net income, adjusted earnings per share and adjusted
EBITDA are non-GAAP financial measures. Reconciliation of these
non-GAAP measures are provided in the attached tables.
First Quarter and Recent Business
Highlights
- Successfully completed the spin-off of our risk management
business, Red Violet, Inc.
- Changed corporate name to Fluent, Inc. (NASDAQ:FLNT), to better
align our corporate brand with our industry leading data-driven
performance marketing company.
- Our proprietary self-reported first party data asset, the
Fluent Identity Graph now contains over 182 million unique email
addresses that represent over 150 million individuals.
- Continued to bolster our strategic and operational talent, all
intently focused on delivering increased profitability to our
business, with the appointment of key industry leaders, hailing
from such companies as Epsilon and Merkle.
- Revenue from advertisers in the financial & professional
services category nearly doubled compared to the three months ended
March 31, 2017.
Conference Call
Fluent, Inc. will host a conference call on Tuesday, May 8, 2018
at 4:30 PM ET to discuss its 2018 first quarter financial results.
To listen to the conference call on your telephone, please dial
(888) 339-0797 for domestic callers or (412) 317-5248 for
international callers. To access the live audio webcast, visit the
Fluent website at www.fluentco.com. Please login at least 15
minutes prior to the start of the call to ensure adequate time for
any downloads that may be required. Following completion of
the earnings call, a recorded replay of the webcast will be
available for those unable to participate. To listen to the
telephone replay, please dial (877) 344-7529 or (412) 317-0088 with
the replay passcode 10119708. The replay will also be
available for one week on the Fluent website at www.fluentco.com.
About Fluent, Inc.
Fluent (NASDAQ:FLNT) is the trusted acquisition partner for
growing brands. Leveraging our proprietary first party data asset,
Fluent creates marketing programs that deliver better digital
advertising experiences for consumers and measurable results for
advertisers. Founded in 2010, the company is headquartered in New
York City. For more information, visit www.fluentco.com.
FORWARD-LOOKING STATEMENTS
This press release and the conference call contain
"forward-looking statements," as that term is defined under the
Private Securities Litigation Reform Act of 1995 (PSLRA), which
statements may be identified by words such as "expects," "plans,"
"projects," "will," "may," "anticipate," "believes," "should,"
"intends," "estimates," and other words of similar meaning.
Such forward looking statements are subject to risks and
uncertainties that are often difficult to predict, are beyond our
control and which may cause results to differ materially from
expectations. Readers are cautioned not to place undue
reliance on these forward-looking statements, which are based on
our expectations as of the date of this press release and the
conference call and speak only as of the date of this press release
and the conference call and are advised to consider the factors
under the heading "Forward-Looking Statements" and "Risk Factors"
in the Company's Annual Report on Form 10-K, as may be supplemented
or amended by the Company's Quarterly Reports on Form 10-Q and
other SEC filings. We undertake no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by
law.
|
|
FLUENT, INC. |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(Amounts in thousands, except share
data) |
|
(unaudited) |
|
|
|
March 31, 2018 |
|
|
December 31, 2017 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
5,368 |
|
|
$ |
16,564 |
|
Accounts receivable,
net of allowance for doubtful accounts of $1,180 and $1,624 at
March 31, 2018 and December 31, 2017, respectively |
|
|
34,165 |
|
|
|
36,278 |
|
Prepaid expenses and
other current assets |
|
|
3,276 |
|
|
|
1,865 |
|
Current assets of
discontinued operations |
|
|
- |
|
|
|
2,274 |
|
Total current
assets |
|
|
42,809 |
|
|
|
56,981 |
|
Property and equipment,
net |
|
|
586 |
|
|
|
687 |
|
Intangible assets,
net |
|
|
71,482 |
|
|
|
74,354 |
|
Goodwill |
|
|
159,791 |
|
|
|
159,791 |
|
Other non-current
assets |
|
|
560 |
|
|
|
1,097 |
|
Non-current assets of
discontinued operations |
|
|
- |
|
|
|
24,089 |
|
Total
assets |
|
$ |
275,228 |
|
|
$ |
316,999 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Trade accounts
payable |
|
$ |
11,830 |
|
|
$ |
10,666 |
|
Accrued expenses and
other current liabilities |
|
|
7,613 |
|
|
|
11,709 |
|
Deferred revenue |
|
|
219 |
|
|
|
265 |
|
Current portion of
long-term debt |
|
|
3,500 |
|
|
|
2,750 |
|
Current liabilities of
discontinued operations |
|
|
- |
|
|
|
7,389 |
|
Total current
liabilities |
|
|
23,162 |
|
|
|
32,779 |
|
Promissory notes
payable to certain shareholders, net |
|
|
- |
|
|
|
10,837 |
|
Long-term debt,
net |
|
|
60,546 |
|
|
|
49,376 |
|
Total
liabilities |
|
|
83,708 |
|
|
|
92,992 |
|
Shareholders'
equity: |
|
|
|
|
|
|
|
|
Preferred stock—$0.0001
par value, 10,000,000 shares authorized; 0 share issued and
outstanding at March 31, 2018 and December 31, 2017 |
|
|
- |
|
|
|
- |
|
Common stock—$0.0005
par value, 200,000,000 shares authorized; 76,437,209 and 61,631,573
shares issued at March 31, 2018 and December 31, 2017, |
|
|
|
|
|
|
|
|
respectively;
and 75,941,291 and 61,279,050 shares outstanding at March 31, 2018
and December 31, 2017, respectively |
|
|
38 |
|
|
|
31 |
|
Treasury stock, at
cost, 495,918 and 352,523 shares at March 31, 2018 and December 31,
2017, respectively |
|
|
(1,672 |
) |
|
|
(1,274 |
) |
Additional paid-in
capital |
|
|
387,273 |
|
|
|
392,687 |
|
Accumulated
deficit |
|
|
(194,119 |
) |
|
|
(167,437 |
) |
Total
shareholders’ equity |
|
|
191,520 |
|
|
|
224,007 |
|
Total
liabilities and shareholders’ equity |
|
$ |
275,228 |
|
|
$ |
316,999 |
|
|
|
|
|
|
|
|
|
|
|
|
FLUENT, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(Amounts in thousands, except share
data) |
|
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
|
2018 |
|
|
2017 |
|
Revenue |
|
$ |
55,989 |
|
|
$ |
49,194 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization) |
|
|
35,663 |
|
|
|
33,797 |
|
Sales and marketing
expenses |
|
|
4,006 |
|
|
|
3,695 |
|
General and
administrative expenses |
|
|
8,445 |
|
|
|
12,476 |
|
Depreciation and
amortization |
|
|
3,331 |
|
|
|
3,205 |
|
Write-off of long-lived
assets |
|
|
- |
|
|
|
3,626 |
|
Spin-off transaction
costs |
|
|
7,708 |
|
|
|
- |
|
Total costs and
expenses |
|
|
59,153 |
|
|
|
56,799 |
|
Loss from
operations |
|
|
(3,164 |
) |
|
|
(7,605 |
) |
Interest expense,
net |
|
|
(2,394 |
) |
|
|
(2,227 |
) |
Loss before
income taxes |
|
|
(5,558 |
) |
|
|
(9,832 |
) |
Income taxes |
|
|
- |
|
|
|
- |
|
Net loss from
continuing operations |
|
|
(5,558 |
) |
|
|
(9,832 |
) |
Discontinued
operations: |
|
|
|
|
|
|
|
|
Loss from operations of
discontinued operations, net of $0 income taxes |
|
|
(2,084 |
) |
|
|
(2,893 |
) |
Loss on disposal of
discontinued operations, net of $0 income taxes |
|
|
(19,040 |
) |
|
|
- |
|
Net loss from
discontinued operations |
|
|
(21,124 |
) |
|
|
(2,893 |
) |
Net
loss |
|
$ |
(26,682 |
) |
|
$ |
(12,725 |
) |
Loss per
share: |
|
|
|
|
|
|
|
|
Basic and diluted: |
|
|
|
|
|
|
|
|
Continuing
operations |
|
$ |
(0.08 |
) |
|
$ |
(0.18 |
) |
Discontinued
operations |
|
$ |
(0.31 |
) |
|
$ |
(0.05 |
) |
Net loss |
|
$ |
(0.40 |
) |
|
$ |
(0.24 |
) |
Weighted
average number of shares outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
67,311,784 |
|
|
|
53,811,688 |
|
|
|
|
|
|
|
|
|
|
|
|
FLUENT, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(Amounts in thousands) |
|
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
|
2018 |
|
|
2017 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(26,682 |
) |
|
$ |
(12,725 |
) |
Net loss from
discontinued operations |
|
|
21,124 |
|
|
|
2,893 |
|
Adjustments to
reconcile net loss from continuing operations to net cash provided
by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
3,331 |
|
|
|
3,205 |
|
Non-cash interest
expenses and related amortization |
|
|
724 |
|
|
|
733 |
|
Share-based
compensation expense |
|
|
6,648 |
|
|
|
6,854 |
|
Write-off of long-lived
assets |
|
|
- |
|
|
|
3,626 |
|
Recoveries of bad
debts |
|
|
(14 |
) |
|
|
(45 |
) |
Allocation of expenses
to red violet |
|
|
(325 |
) |
|
|
(840 |
) |
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
2,127 |
|
|
|
3,248 |
|
Prepaid expenses and
other current assets |
|
|
(1,609 |
) |
|
|
(324 |
) |
Other non-current
assets |
|
|
537 |
|
|
|
46 |
|
Trade accounts
payable |
|
|
1,164 |
|
|
|
(3,197 |
) |
Accrued expenses and
other current liabilities |
|
|
(4,096 |
) |
|
|
(500 |
) |
Deferred revenue |
|
|
(46 |
) |
|
|
780 |
|
Net cash provided by
operating activities from continuing operations |
|
|
2,883 |
|
|
|
3,754 |
|
Net cash used in
operating activities from discontinued operations |
|
|
(5,835 |
) |
|
|
(1,562 |
) |
Net cash (used in)
provided by operating activities |
|
|
(2,952 |
) |
|
|
2,192 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of property
and equipment |
|
|
(22 |
) |
|
|
(37 |
) |
Capitalized costs
included in intangible assets |
|
|
(177 |
) |
|
|
(376 |
) |
Capital contributed to
red violet |
|
|
(19,728 |
) |
|
|
- |
|
Net cash used in
investing activities from continuing operations |
|
|
(19,927 |
) |
|
|
(413 |
) |
Net cash used in
investing activities from discontinued operations |
|
|
(1,386 |
) |
|
|
(1,927 |
) |
Net cash used in
investing activities |
|
|
(21,313 |
) |
|
|
(2,340 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from issuance
of shares, net of issuance costs |
|
|
13,392 |
|
|
|
- |
|
Proceeds from debt
obligations, net of debt costs |
|
|
67,182 |
|
|
|
14,039 |
|
Repayments of long-term
debt |
|
|
(67,107 |
) |
|
|
(1,798 |
) |
Taxes paid related to
net share settlement of vesting of restricted stock units |
|
|
(398 |
) |
|
|
(168 |
) |
Net cash provided by
financing activities from continuing operations |
|
|
13,069 |
|
|
|
12,073 |
|
Net increase (decrease)
in cash and cash equivalents |
|
$ |
(11,196 |
) |
|
$ |
11,925 |
|
Cash and cash
equivalents at beginning of period |
|
|
16,564 |
|
|
|
10,089 |
|
Cash and cash
equivalents at end of period |
|
$ |
5,368 |
|
|
$ |
22,014 |
|
SUPPLEMENTAL DISCLOSURE
INFORMATION |
|
|
|
|
|
|
|
|
Cash paid for
interest |
|
$ |
1,678 |
|
|
$ |
1,276 |
|
Cash paid for income
taxes |
|
$ |
- |
|
|
$ |
- |
|
Share-based
compensation capitalized in intangible assets |
|
$ |
159 |
|
|
$ |
55 |
|
|
|
|
|
|
|
|
|
|
Use and Reconciliation of Non-GAAP Financial
Measures
Management evaluates the financial performance of our business
on a variety of key indicators, including adjusted EBITDA, adjusted
net income (loss) and related adjusted earnings (loss) per share.
Adjusted EBITDA is a non-GAAP financial measure equal to net loss,
the most directly comparable financial measure based on US GAAP,
adding back net loss from discontinued operations, interest
expense, depreciation and amortization, share-based compensation
expense, acquisition and restructuring costs, write-off of
long-lived assets, and litigation costs, as noted in the tables
below. Adjusted net income (loss) from continuing operations and
the related basic and diluted per share amounts is a non-GAAP
measure equal to net loss from continuing operations, the most
directly comparable financial measure based on US GAAP, adding back
the effect of spin-off transaction costs.
|
|
|
|
|
|
Three Months Ended March 31, |
|
(In
thousands) |
|
2018 |
|
|
2017 |
|
Net
loss |
|
$ |
(26,682 |
) |
|
$ |
(12,725 |
) |
Net loss from
discontinued operations |
|
|
21,124 |
|
|
|
2,893 |
|
Interest expense,
net |
|
|
2,394 |
|
|
|
2,227 |
|
Depreciation and
amortization |
|
|
3,331 |
|
|
|
3,205 |
|
Share-based
compensation expense |
|
|
6,648 |
|
|
|
6,854 |
|
Acquisition and
restructuring costs |
|
|
2,713 |
|
|
|
668 |
|
Write-off of long-lived
assets |
|
|
- |
|
|
|
3,626 |
|
Litigation costs |
|
|
72 |
|
|
|
- |
|
Adjusted
EBITDA |
|
$ |
9,600 |
|
|
$ |
6,748 |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
(In thousands,
except share data) |
|
2018 |
|
|
2017 |
|
Net loss from
continuing operations |
|
$ |
(5,558 |
) |
|
$ |
(9,832 |
) |
Add back: Spin-off
transaction costs |
|
|
7,708 |
|
|
|
- |
|
Adjusted net
income (loss) from continuing operations |
|
$ |
2,150 |
|
|
$ |
(9,832 |
) |
Adjusted
earnings (loss) per share from continuing operations: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.03 |
|
|
$ |
(0.18 |
) |
Diluted |
|
$ |
0.03 |
|
|
$ |
(0.18 |
) |
Weighted average number
of shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
67,311,784 |
|
|
|
53,811,688 |
|
Diluted (1) |
|
|
70,226,701 |
|
|
|
53,811,688 |
|
(1) The diluted weighted average number of shares
outstanding for the quarter ended March 31, 2018 is computed based
on the basic weighted average number of shares outstanding plus the
dilutive impact of outstanding restricted stock units as of March
31, 2018.
We present adjusted EBITDA, adjusted net income (loss) and
adjusted earnings (loss) per share as supplemental measures of our
operating performance because we believe they provide useful
information to our investors as they eliminate the impact of
certain items that we do not consider indicative of our cash
operations and ongoing operating performance. In addition, we use
them as an integral part of our internal reporting to measure our
performance, evaluate the performance of our senior management and
measure the operating strength of our business.
Adjusted EBITDA, adjusted net income (loss) and adjusted
earnings (loss) per share are measures frequently used by
securities analysts, investors and other interested parties in
their evaluation of the operating performance of companies similar
to ours and is an indicator of the operational strength of our
business. Adjusted EBITDA eliminates the uneven effect of
considerable amounts of non-cash depreciation and amortization,
share-based compensation expense and write-off of long-lived
assets. Adjusted net income (loss) and adjusted earnings (loss) per
share eliminate the effect of the spin-off transaction costs.
Adjusted EBITDA, adjusted net income (loss) and adjusted
earnings (loss) per share are not intended to be performance
measures that should be regarded as an alternative to, or more
meaningful than, either operating income or net income as
indicators of operating performance or to cash flows from operating
activities as a measure of liquidity. The way we measure adjusted
EBITDA, adjusted net income (loss) and adjusted earnings (loss) per
share may not be comparable to similarly titled measures presented
by other companies, and may not be identical to corresponding
measures used in our various agreements.
Contact Information: Investors: Jordyn
Tarazi Fluent, Inc. (646)356-8469 JTarazi@fluentco.com
Media: North 6th Agency, Inc. (212)334-9753
ext. 143 fluent@n6a.com
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