The Meet Group, Inc. (NASDAQ: MEET), a leading provider of
interactive livestreaming solutions, today reported financial
results for its fourth quarter and full year ended December 31,
2019.
Fourth Quarter 2019 Financial Highlights
- Total revenue of $57.6 million, up 10% from the prior year
quarter.
- GAAP net income of $4.9 million, or $0.07 per diluted share,
compared with $4.3 million, or $0.06 per diluted share in the prior
year quarter.
- Adjusted EBITDA of $13.3 million, compared with $10.6 million
in the prior year quarter.
- Non-GAAP net income of $12.4 million, or $0.17 per diluted
share, compared with $9.4 million, or $0.12 per diluted share, in
the prior year quarter.
Full Year 2019 Financial Highlights
- Total revenue of $211.7 million, up 19% from the prior
year.
- GAAP net income of $11.3 million, or $0.15 per diluted share,
compared with $1.1 million, or $0.02 per diluted share in the prior
year.
- Adjusted EBITDA of $42.2 million, compared with $32.0 million
in the prior year.
- Non-GAAP net income of $38.3 million, or $0.50 per diluted
share, compared with $27.5 million, or $0.36 per diluted share, in
the prior year.
(See the important discussion about the presentation of non-GAAP
financial measures, and reconciliation to the most direct
comparable GAAP financial measures, below.)
“This is an exciting time for The Meet Group,” said Geoff Cook,
Chief Executive Officer of The Meet Group. “I believe the
transaction with ProSiebenSat.1 is a tremendous validation of our
strategy to marry livestreaming video with dating. The combination
of our companies adds our strength in freemium dating to
ProSieben’s existing premium services, resulting in a more dynamic
and well-rounded dating portfolio. Further, the transaction will
allow us to pursue new strategic opportunities and accelerate
growth by leveraging our video platform and ProSieben’s experience
with content and entertainment.
“We are pleased with our results in the fourth quarter, which
capped a solid year in which we more than doubled video revenue,
launched new growth initiatives and further strengthened our safety
leadership through new products and partner collaboration. I am
proud of our team and all that we have accomplished.”
Fourth Quarter and Full Year Financial Results
For the fourth quarter of 2019, the Company reported revenue of
$57.6 million, an increase of $5.1 million, or 10%, from $52.5
million in the fourth quarter of 2018. GAAP net income for the
fourth quarter of 2019 was $4.9 million, or $0.07 per diluted
share, compared with $4.3 million, or $0.06 per diluted share in
the fourth quarter of 2018. Adjusted EBITDA for the fourth quarter
of 2019 was $13.3 million, compared with $10.6 million in the
fourth quarter of 2018. Non-GAAP net income for the fourth quarter
of 2019 was $12.4 million, or $0.17 per diluted share, compared
with $9.4 million, or $0.12 per diluted share, in the fourth
quarter of 2018.
For the year ended December 31, 2019, the Company reported
revenue of $211.7 million, an increase of $33.1 million, or 19%,
from $178.6 million for the year ended December 31, 2018. GAAP net
income for the year ended December 31, 2019 was $11.3 million, or
$0.15 per diluted share, compared with $1.1 million, or $0.02 per
diluted share for the year ended December 31, 2018. Adjusted EBITDA
for the year ended December 31, 2019 was $42.2 million, compared
with $32.0 million for the year ended December 31, 2018. Non-GAAP
net income for the year ended December 31, 2019 was $38.3 million,
or $0.50 per diluted share, compared with $27.5 million, or $0.36
per diluted share, for the year ended December 31, 2018.
The Company ended the year with $27.2 million in cash and cash
equivalents.
The Meet Group Acquisition by ProSiebenSat.1 and General
Atlantic
On March 5, 2020, the Company announced that it had entered into
a definitive agreement to be acquired by ProSiebenSat.1’s and
General Atlantic’s joint company NuCom Group in an all cash
transaction for $6.30 per fully diluted share representing an
enterprise value of approximately $500 million. The transaction is
expected to close in the second half of 2020. Due to the pending
acquisition by ProSiebenSat.1`s and General Atlantic’s joint
company NuCom Group, the Company does not plan to host an earnings
conference call or provide forward-looking guidance.
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In thousands, except par value
and share data)
2019
2018
(Unaudited)
Assets:
Current assets:
Cash and cash equivalents
$
27,241
$
28,366
Accounts receivable, net of allowance for
bad debts of $269 and $384 as of December 31, 2019 and 2018,
respectively
25,234
27,148
Prepaid expenses and other current
assets
6,062
4,911
Total current assets
58,537
60,425
Deferred tax assets
16,233
19,049
Property and equipment, net
3,625
4,634
Operating lease right-of-use assets
7,034
—
Intangible assets, net
29,305
36,558
Goodwill
156,687
148,133
Other assets
1,300
2,454
Total assets
$
272,721
$
271,253
Liabilities and stockholders'
equity:
Current liabilities:
Accounts payable
$
5,346
$
9,071
Accrued liabilities
20,090
19,112
Current portion of long-term debt, net
3,500
18,567
Current portion of operating lease
liabilities
2,081
—
Current portion of finance lease
obligations
10
134
Deferred revenue
3,884
4,621
Total current liabilities
34,911
51,505
Long-term debt, net
30,375
18,088
Long-term operating lease liabilities
5,024
—
Long-term finance lease obligations
53
59
Long-term derivative liabilities
1,451
940
Deferred tax liabilities
2,773
3,400
Other liabilities
894
40
Total liabilities
75,481
74,032
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value;
authorized - 5,000,000 shares; no shares issued and outstanding as
of December 31, 2019 and 2018
—
—
Series A junior participating preferred
stock, $0.001 par value; authorized - 200,000 shares; no shares
issued and outstanding as of December 31, 2019 and 2018
—
—
Common stock, $0.001 par value; authorized
- 100,000,000 shares; 70,756,013 and 74,697,526 shares issued and
outstanding as of December 31, 2019 and 2018, respectively
71
75
Additional paid-in capital
430,959
419,456
Accumulated deficit
(231,441
)
(220,276
)
Accumulated other comprehensive loss
(2,349
)
(2,034
)
Total stockholders’ equity
197,240
197,221
Total liabilities and stockholders’
equity
$
272,721
$
271,253
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share and
per share data)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
(Unaudited)
Revenue
$
57,567
$
52,458
$
211,701
$
178,613
Operating costs and expenses:
Sales and marketing
8,683
8,531
34,332
32,086
Product development and content
32,578
30,110
124,425
102,757
General and administrative
5,791
5,532
21,931
21,094
Depreciation and amortization
3,052
3,217
13,131
13,776
Acquisition, restructuring and other
(334
)
236
414
5,038
Total operating costs and expenses
49,770
47,626
194,233
174,751
Income from operations
7,797
4,832
17,468
3,862
Other income (expense):
Interest income
18
11
107
24
Interest expense
(270
)
(484
)
(1,301
)
(2,322
)
(Loss) gain on disposal of assets
—
(95
)
41
(95
)
Gain (loss) on foreign currency
transactions
43
(3
)
(51
)
97
Other items of (expense) income, net
(6
)
16
(1
)
44
Total other expense
(215
)
(555
)
(1,205
)
(2,252
)
Income before income tax (expense)
benefit
7,582
4,277
16,263
1,610
Income tax (expense) benefit
(2,704
)
17
(4,929
)
(467
)
Net income
$
4,878
$
4,294
$
11,334
$
1,143
Basic and diluted net income per
share:
Basic net income per share
$
0.07
$
0.06
$
0.15
$
0.02
Diluted net income per share
$
0.07
$
0.06
$
0.15
$
0.02
Weighted-average shares outstanding:
Basic
71,332,964
74,217,118
74,118,035
73,085,542
Diluted
74,233,459
76,863,201
76,921,420
75,616,439
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
Year Ended December
31,
2019
2018
(Unaudited)
Cash flows from operating
activities:
Net income
$
11,334
$
1,143
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
13,131
13,776
Amortization of right-of-use assets
2,567
—
Stock-based compensation expense
11,107
9,286
Deferred tax expense (benefit)
2,213
(130
)
(Gain) loss on disposal of assets
(41
)
95
Loss (gain) on foreign currency
transactions
51
(97
)
Bad debt expense
1,884
598
Non-cash interest expense
323
327
Changes in derivative financial
instruments
—
28
Changes in contingent consideration
obligations
1,059
—
Changes in operating assets and
liabilities:
Accounts receivable
489
(1,519
)
Prepaid expenses, other current assets and
other assets
1,378
(2,773
)
Accounts payable and accrued
liabilities
(7,114
)
7,495
Deferred revenue
(765
)
368
Net cash provided by operating
activities
37,616
28,597
Cash flows from investing
activities:
Purchases of property and equipment
(1,515
)
(2,507
)
Acquisition of business, net of cash
acquired
(11,808
)
—
Net cash used in investing
activities
(13,323
)
(2,507
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
770
2,562
Repurchases of common stock
(22,505
)
—
Payments of finance leases
(191
)
(241
)
Proceeds from revolving loan
7,000
—
Proceeds from term loan, net
34,907
—
Payments for restricted stock awards
withheld for taxes
(372
)
(420
)
Payments of loan origination costs
(108
)
—
Payments of revolving loan
(7,000
)
—
Payments of contingent consideration
—
(5,000
)
Payments of term loan
(37,815
)
(19,310
)
Net cash used in financing
activities
(25,314
)
(22,409
)
Change in cash and cash equivalents prior
to effect of foreign currency exchange rate
(1,021
)
3,681
Effect of foreign currency exchange
rate
(104
)
(368
)
Net (decrease) increase in cash and cash
equivalents
(1,125
)
3,313
Cash and cash equivalents at beginning
of period
28,366
25,053
Cash and cash equivalents at end of
period
$
27,241
$
28,366
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
1,027
$
1,971
Cash paid for income taxes
$
2,723
$
—
THE MEET GROUP, INC.
DISAGGREGATION OF
REVENUE
(UNAUDITED)
(In thousands)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
$
%
$
%
$
%
$
%
User pay revenue:
Video
$
22,272
38.7
%
$
15,189
29.0
%
$
84,113
39.7
%
$
39,282
22.0
%
Subscription and other in-app products
14,913
25.9
%
16,106
30.7
%
61,683
29.2
%
68,048
38.1
%
Total user pay revenue
37,185
64.6
%
31,295
59.7
%
145,796
68.9
%
107,330
60.1
%
Advertising
20,382
35.4
%
21,163
40.3
%
65,905
31.1
%
71,283
39.9
%
Total revenue
$
57,567
100.0
%
$
52,458
100.0
%
$
211,701
100.0
%
$
178,613
100.0
%
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET
INCOME TO ADJUSTED EBITDA
(UNAUDITED)
(In thousands)
Three Months Ended
December 31,
Year Ended December
31,
2019
2018
2019
2018
Net income
$
4,878
$
4,294
$
11,334
$
1,143
Interest expense
270
484
1,301
2,322
Income tax expense (benefit)
2,704
(17
)
4,929
467
Depreciation and amortization expense
3,052
3,217
13,131
13,776
Stock-based compensation expense
2,786
2,259
11,107
9,286
Acquisition, restructuring and other
(334
)
236
414
5,038
Loss (gain) on disposal of assets
—
95
(41
)
95
(Gain) loss on foreign currency
transactions
(43
)
3
51
(97
)
Adjusted EBITDA
$
13,313
$
10,571
$
42,226
$
32,030
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP NET INCOME
(UNAUDITED)
(In thousands, except share and
per share data)
Three Months Ended
December 31,
Year Ended December
31,
2019
2018
2019
2018
GAAP net income
$
4,878
$
4,294
$
11,334
$
1,143
Stock-based compensation expense
2,786
2,259
11,107
9,286
Amortization of intangibles
2,402
2,605
10,533
11,520
Income tax expense (benefit)
2,704
(17
)
4,929
467
Acquisition, restructuring and other
(334
)
236
414
5,038
Non-GAAP net income
$
12,436
$
9,377
$
38,317
$
27,454
GAAP basic net income per share
$
0.07
$
0.06
$
0.15
$
0.02
GAAP diluted net income per share
$
0.07
$
0.06
$
0.15
$
0.02
Basic Non-GAAP net income per share
$
0.17
$
0.13
$
0.52
$
0.38
Diluted Non-GAAP net income per share
$
0.17
$
0.12
$
0.50
$
0.36
Weighted-average shares outstanding:
Basic
71,332,964
74,217,118
74,118,035
73,085,542
Diluted
74,233,459
76,863,201
76,921,420
75,616,439
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF NET CASH
FLOW PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(UNAUDITED)
(In thousands)
Three Months Ended
December 31,
Year Ended December
31,
2019
2018
2019
2018
Net cash provided by operating
activities
$
10,963
$
10,398
$
37,616
$
28,597
Less: Purchases of property and
equipment
(357
)
(2,103
)
(1,515
)
(2,507
)
Free cash flow
$
10,606
$
8,295
$
36,101
$
26,090
Webcast and Conference Call Details
Due to the pending acquisition by ProSiebenSat.1’s and General
Atlantic’s joint company NuCom Group, the Company does not plan to
host an earnings conference call.
About The Meet Group
The Meet Group (NASDAQ: MEET) is a leading provider of
interactive livestreaming solutions designed to meet the universal
need for human connection. Our ecosystem of livestreaming apps
enables users around the world to interact through one-to-many
livestreaming broadcasts and text-based conversations. Our top
apps, MeetMe©, LOVOO©, Skout©, Tagged© and Growlr©, deliver live
interactions and meaningful connections to millions of users daily.
Headquartered in New Hope, PA, we have offices in Philadelphia, San
Francisco, Dresden and Berlin. The Meet Group is committed to
safety. You can find a description of current safety practices
here: https://www.themeetgroup.com/safety-practices/. 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 the transaction with
ProSiebenSat.1 is a validation of our business strategy; whether a
combined company will add our strength in freemium dating to
ProSieben’s existing premium services; whether a combined company
will result in a more dynamic and well-rounded dating portfolio;
whether the transaction will allow us to pursue new strategic
opportunities and accelerate growth; whether our current levels of
video revenue growth will continue; and whether and when our
transaction with ProSieben will close. 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,” “outlook,” “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, 2018 filed with the SEC on March 8, 2019 and our
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2019, June 30, 2019 and September 30, 2019 filed with the SEC on
May 9, 2019, July 31, 2019 and November 8, 2019, respectively. 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, Skout and LOVOO. The Company defines a Video
Daily Active User (vDAU) as a registered user of one of our
platforms who has logged in and visited the Live feature, either as
a broadcaster or viewer, on the day of measurement. The Company
defines Average Daily Video Revenue per Daily Active User (vARPDAU)
as the average daily video revenue per vDAU. The Company uses these
user metrics for financial and operational decision-making and as a
means to evaluate period-to-period comparisons. The Company
presents user metrics 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 its industry and because it believes
that these metrics provide useful information to investors
regarding the Company’s financial condition and results of
operations. There is no directly comparable U.S. generally accepted
accounting principles (GAAP) measure to vARPDAU provided in the
Company’s financial statements and therefore no reconciliation is
provided.
The Company uses Adjusted EBITDA, Non-GAAP Net Income and Free
Cash Flow, which are not calculated and presented in accordance
with 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 for these historical non-GAAP financial
measures to their directly comparable GAAP financial measures.
Information reconciling forward-looking Adjusted EBITDA to GAAP
financial measures is unavailable to the Company without
unreasonable effort. The Company is not able to provide
reconciliations of Adjusted EBITDA to GAAP financial measures
because certain items required for such reconciliations are outside
of the Company’s control and/or cannot be reasonably predicted,
such as the provision for income taxes. Preparation of such
reconciliations would require a forward-looking balance sheet,
statement of income and statement of cash flow, prepared in
accordance with GAAP, and such forward-looking financial statements
are unavailable to the Company without unreasonable effort. The
Company provides a range for its Adjusted EBITDA outlook that it
believes will be achieved, however it cannot accurately predict all
the components of the Adjusted EBITDA calculation.
The Company defines Adjusted EBITDA as net income (or loss)
before interest expense, benefit from or provision for income
taxes, depreciation and amortization expense, stock-based
compensation expense, non-recurring acquisition, restructuring or
other expenses, gain or loss on foreign currency transactions, gain
or loss on sale or disposal of assets, bad debt expense outside the
normal range, and goodwill and long-lived asset impairment charges.
The Company excludes stock-based compensation expense because it is
non-cash in nature. The Company defines Non-GAAP Net Income as net
income (or loss) before benefit from or provision for income taxes,
amortization on intangibles, non-recurring acquisition,
restructuring and other expenses, goodwill and long-lived asset
impairment charges and non-cash stock-based compensation expense.
The Company defines Free Cash Flow as net cash provided by or used
in its operating activities, minus purchases of property and
equipment, as shown in the consolidated statements of cash
flows.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200311005191/en/
Investor Contact: Leslie Arena larena@themeetgroup.com 267 714
6418
Media Contact: Brandyn Bissinger bbissinger@themeetgroup.com 267
446 7010
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