Professional Diversity Network, Inc. (NASDAQ:IPDN), (“IPDN” or the
“Company”), a global developer and operator of online and in-person
networks that provide access to networking, training, educational
and employment opportunities for diverse individuals, today
announced its financial results for the three and nine months ended
September 30, 2020.
Third Quarter Financial Highlights:
- Total Company revenues increased by $354,000 or 37.2%, from
$952,000 during the three months ended June 30, 2020, to $1,306,000
for the three months ended September 30, 2020.
- PDN Network revenues increased by $389,000 or 65.1% compared to
the revenues for the second quarter of 2020. The significant
increase in revenues was attributable to higher customer
acquisitions and continued growth in our recruitment business as a
result of increased political and corporative efforts on diversity
and inclusion.
- Basic and diluted net loss per share decreased by $0.04, from a
net loss per share of $0.11 for the three months ended September
30, 2019, to a net loss per share of $0.07 for the three months
ended September 30, 2020. Net loss per share decreased by $0.08,
from a net loss per share of $0.47 during the nine months ended
September 30, 2019, to a net loss per share of $0.39 during the
nine months ended September 30, 2020.
- Non-GAAP Adjusted EBITDA increased by $601,000, from ($607,000)
during the three months ended September 30, 2019, to ($6,000)
during the three months ended September 30, 2020.
- In the third quarter of 2020, the Company raised $3.0 million
in gross proceeds from common stock offerings, which it expects to
utilize for organic growth of its existing business as well as to
fund future strategic acquisitions.
"The significant investments we have made in our e-commerce,
technology platform and branding initiatives in the current year
have begun to reflect these positive financial results. Typically,
our fourth quarter is the strongest quarter of the year as a result
of client renewals, and due to increased political and corporate
awareness efforts in terms of greater diversity recruitment and in
creating a more inclusive workplace, we expect to benefit from
these initiatives and expect to finish the year in a very strong
position,” said Adam He, CEO of Professional Diversity Network.
Financial Results for the Three and Nine Months Ended in
September 30, 2020
Revenue
Total revenues decreased by $36,000, or 2.7%, from $1,341,000
during the three months ended September 30, 2019, to $1,305,000
during the three months ended September 30, 2020. The decrease in
revenues was primarily attributable to a $198,000 decrease in
revenues in our NAPW Network as a result of a continued decline in
legacy and new membership enrollment due to the negative financial
impact of COVID-19. The decrease in revenues in the current period
was offset by a $161,000 or 19.5% increase in revenues in our PDN
Network due to higher recruitment service fees as we continue to
see a favorable impact from our sales collaborations and new client
acquisitions.
Total revenues decreased by $733,000, or 18.5%, from $3,973,000
during the nine months ended September 30, 2019, to $3,240,000
during the nine months ended September 30, 2020. The decrease was
primarily attributable to $889,000 or 45.6% decline in membership
fees and related services revenues in our NAPW Network, which was
partially offset by $156,000 in higher recruitment service revenues
in our PDN Network.
Costs and Expenses
Total costs and expenses decreased for the three months ended
September 30, 2020 to $2,226,000 compared to $2,250,000 for the
three months ended September 30, 2019. The decrease was primarily
the result of lower intangible amortization expense of $179,000, a
decrease of $102,000 in sales and marketing expenses primarily due
to lower advertising expense, lower personnel costs and $69,000
decrease in costs of revenues associated with a $62,000 reduction
in our partner revenue sharing arrangements. This decrease was
partially offset by $325,000 in higher general and administrative
expenses associated with a $767,000 litigation settlement expense,
and partially offset by lower salaries and benefits and corporate
overhead costs in the current period.
Total costs and expenses increased for the nine months ended
September 30, 2020 to $7,388,000 compared to $6,513,000 for the
nine months ended September 30, 2019. The increase of $875,000 was
primarily the result of higher general and administrative expenses
for litigation settlements of $1,475,000 and a $325,000 increase in
stock-based compensation expense, which was partially offset by a
reduction of $356,000 in general and administrative personnel
costs. The increase in general and administrative expenses was
partially offset by $513,000 in lower intangible amortization
expense, a $283,000 reduction in sales and marketing expense
primarily associated with a $271,000 reduction in personnel costs
and a decrease of $137,000 in cost of revenues primarily due to
lower revenue partner revenue sharing arrangements and event venue
and facility costs.
Net Loss from Continuing Operations
Net loss from continuing operations was $912,000 for the three
months ended September 30, 2020, an increase of 41.6% from $644,000
for the three months ended September 30, 2019. Net loss from
continuing operations was $4,116,000 during the nine months ended
September 30, 2020, an increase of 124.1% from $1,837,000 for the
nine months ended September 30, 2019.
Liquidity and Capital Resources
As of September 30, 2020, the Company had cash and cash
equivalents of $2.7 million compared to cash and cash equivalents
of $0.6 million at December 31, 2019. During the third quarter of
2020, we raised gross proceeds of $3.0 million from the sale of our
common stock, which puts the Company in a strong liquidity position
to fund organic growth in our networks as well as to fund potential
strategic acquisitions.
About Professional Diversity Network
Professional Diversity Network, Inc. (PDN) 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. 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 recruit diverse employees. 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, LGBT and
disabled persons globally.Forward-Looking
Statements This press release contains certain
forward-looking statements based on our current expectations,
forecasts and assumptions, all of which are subject to risks and
uncertainties. This release does not constitute an offer to sell or
a solicitation of offers to buy any securities of any entity. We
base our forward-looking statements on our management’s beliefs and
assumptions based on information available to our management at the
time the statements are made. 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. We describe material risks, uncertainties and
assumptions that could affect our business, including our financial
condition and results of operations, under “Risk Factors”, in our
most recently filed annual report on Form 10-K 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. Except as required by law, we do not have
any intention or obligation to update publicly any forward-looking
statements included in this press release, whether as a result of
new information, future events, changes in assumptions, 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.ipdnusa.com. Please click on "Investor
Relations."
Investor Inquiries:investors@ipdnusa.com
+1 (312) 614-0950
Source: Professional Diversity Network, Inc.
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