Professional Diversity Network, Inc. (NASDAQ:IPDN) (“PDN” 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 professionals, today
announced financial results for its fiscal third quarter ended
September 30, 2017.R
During the third quarter ended September 30, 2017, we continued
to experience losses as we furthered our efforts to integrate new
management and China operations, reduce costs and streamline our
business. Total revenues in the third quarter decreased $1,939,000,
or 30.5% for the three months ended September 30, 2017, compared to
the same prior year period.
Total costs and expenses were $7,133,000 for the third quarter,
compared to $7,640,000 for same period in the prior year, a
decrease of $507,000 or 6.6%. The decrease is mainly attributable
to a $788,000 or 25.7% decrease in sales and marketing expense
mostly due to reduction in sales force, a decrease of $87,000 or
11.7% in cost of revenue, and a slight decrease of $13,000 or 1.6%
in depreciation and amortization. The decrease in expenses was
partially offset by an increase of $226,000 or 7.5% in general and
administrative expense, and $155,000 litigation settlement expenses
in the third quarter of 2017, of which $146,000 was accrued for the
potential back pay related to what is expected to be non-recurring
legal expenses.
For the three months ended September 30, 2017, we realized a net
loss of approximately $2,489,000, a $1,216,000 increase from the
comparable prior year period. This increase in net loss was
primarily driven by a decrease of $1,578,000 in NAPW segment
revenues from membership fees, related services and product sales
period-over-period (attributable to the restricting of NAPW and
positioning for its global brand emergence as IAW in 2018),
partially offset by a decrease of $788,000 in overall sales and
marketing expenses.
During the nine months ended September 30, 2017, we incurred a
net loss of $17,666,000, compared to net loss of $3,519,000 for the
nine months ended September 30, 2016, an increase of $14,147,000.
The increase in net loss was primarily attributable to a decrease
of $6,036,000 in NAPW segment revenues from membership fees,
related services and product sales period-over-period, along with
NAPW segment goodwill impairment charge of $9,920,000, and an
increase of $2,395,000 in overall general and administrative
expenses, partially offset by a decrease of $2,199,000 in overall
sales and marketing expenses.
As of September 30, 2017, we had $2.8 million in cash.
Michael Wang, PDN Chief Executive Officer, stated, "In the third
quarter of 2017, we began to sell memberships in China, launched a
new Entrepreneurs Club, planned for our premiere event of 2017 in
China and took meaningful actions to address the profitability of
our US operations.I believe that our third quarter of 2017 was a
productive period. Our expansion to China has now taken a firm
footing and our initiatives have now been launched in the market.
Because of this progress we are closer to achieving our goals of
profitability and growth. We believe that the work that we
have done since we took control of the company in November 2016
will be demonstrated in the fourth quarter of 2017 and in 2018,
beginning with our event on December 2nd, in Beijing.
In China, year to date, the Company successfully launched its
Education and Training segment, and held eleven paid events
to-date. Those events have provided live marketing research, and
the results have helped us to plan and seek to enhance future
events. The Company also launched in China its Women’s Networking
segment, holding its first marketing event near the end of the
second quarter. The Company continues to build the framework for
its third new China business, Secondary Education Services. The
model involves working on partnerships with educational
institutions, the first of which we announced during the second
quarter.
Specific restructuring and new business development for
the quarter included:
- Commenced selling IAW memberships in China, ranging from RMB
20,000 to RMB 200,000 (Approximately $3,000 to $30,000 annual
memberships). IAW China held first IAW VIP China event at the
Women’s Forum Global Meeting, in Paris France
- Commenced offering Global Elite Entrepreneurs Club memberships
in China at annual memberships costs starting at RMB 19,800 to RMB
398,000 (Approximately $2900 to $58,000)
- Finalized plans and secured commitments to hold largest
education and training event of the year on December 2nd, 2017 in
Beijing China, “The International Capital Leadership Summit.”
Mr. Bruce Aust, Vice Chairman of the Nasdaq Exchange will be
featured at the event where the company hopes to have as many as
5,000 participants
During 2018, the company anticipates soon investing in
increasing women’s networking membership sales and expanding from
NAPW (National Association of Professional Women), a national
organization to IAW (International Association of Women), an
international women’s networking organization. The company believes
that in a global market place, the IAW organization can offer all
the value of today’s NAPW and add an international platform to
enhance membership value.”
Professional Diversity Network, Inc. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
September 30, |
|
|
December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
|
(Unaudited) |
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
2,821,729 |
|
|
$ |
6,068,973 |
|
Accounts receivable,
net |
|
|
1,799,013 |
|
|
|
2,170,529 |
|
Incremental direct
costs |
|
|
241,235 |
|
|
|
423,023 |
|
Prepaid expenses and
other current assets |
|
|
490,581 |
|
|
|
957,140 |
|
Total current
assets |
|
|
5,352,558 |
|
|
|
9,619,665 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
291,774 |
|
|
|
277,534 |
|
Capitalized technology,
net |
|
|
141,573 |
|
|
|
173,368 |
|
Goodwill |
|
|
10,280,885 |
|
|
|
20,201,190 |
|
Intangible assets,
net |
|
|
7,035,139 |
|
|
|
9,183,439 |
|
Merchant reserve |
|
|
780,849 |
|
|
|
1,426,927 |
|
Security deposits |
|
|
239,059 |
|
|
|
220,754 |
|
Other assets |
|
|
- |
|
|
|
35,000 |
|
Total assets |
|
$ |
24,121,837 |
|
|
$ |
41,137,877 |
|
|
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,232,510 |
|
|
$ |
2,172,332 |
|
Accrued expenses |
|
|
1,172,435 |
|
|
|
962,172 |
|
Deferred revenue |
|
|
4,422,715 |
|
|
|
5,485,599 |
|
Total current
liabilities |
|
|
6,827,660 |
|
|
|
8,620,103 |
|
|
|
|
|
|
|
|
|
|
Deferred tax
liability |
|
|
2,492,837 |
|
|
|
3,653,274 |
|
Deferred rent |
|
|
60,959 |
|
|
|
55,718 |
|
Other liabilities |
|
|
78,481 |
|
|
|
33,159 |
|
Total liabilities |
|
|
9,459,937 |
|
|
|
12,362,254 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
|
|
|
Common stock, $0.01 par
value; 45,000,000 shares authorized; 3,936,399 shares and 3,623,899
shares issued as of September 30, 2017 and December 31, 2016,
respectively; and 3,931,838 shares and 3,619,338 shares outstanding
as of September 30, 2017 and December 31, 2016, respectively |
|
|
39,329 |
|
|
|
36,204 |
|
Additional paid in
capital |
|
|
79,783,969 |
|
|
|
76,234,772 |
|
Accumulated other
comprehensive loss |
|
|
(1,435 |
) |
|
|
- |
|
Accumulated
deficit |
|
|
(65,122,846 |
) |
|
|
(47,458,236 |
) |
Treasury stock, at
cost; 1,048 shares at September 30, 2017 and December 31, 2016 |
|
|
(37,117 |
) |
|
|
(37,117 |
) |
Total stockholders'
equity |
|
|
14,661,900 |
|
|
|
28,775,623 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity |
|
$ |
24,121,837 |
|
|
$ |
41,137,877 |
|
Professional Diversity Network, Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS (Unaudited) |
|
|
Three Months EndedSeptember 30, |
|
|
Nine Months Ended September
30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
2,204,909 |
|
|
$ |
3,748,334 |
|
|
$ |
7,465,202 |
|
|
$ |
13,047,652 |
|
Lead
generation |
|
|
1,370,465 |
|
|
|
1,554,370 |
|
|
|
4,699,399 |
|
|
|
4,489,919 |
|
Recruitment services |
|
|
694,454 |
|
|
|
954,887 |
|
|
|
1,977,101 |
|
|
|
2,295,556 |
|
Product
sales and other |
|
|
18,285 |
|
|
|
52,857 |
|
|
|
91,226 |
|
|
|
544,440 |
|
Education
and training |
|
|
68,890 |
|
|
|
- |
|
|
|
898,584 |
|
|
|
- |
|
Consumer
advertising and marketing solutions |
|
|
65,188 |
|
|
|
49,719 |
|
|
|
189,217 |
|
|
|
176,771 |
|
Total revenues |
|
|
4,422,191 |
|
|
|
6,360,167 |
|
|
|
15,320,729 |
|
|
|
20,554,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues |
|
|
658,297 |
|
|
|
745,159 |
|
|
|
2,193,224 |
|
|
|
2,433,550 |
|
Sales and
marketing |
|
|
2,275,585 |
|
|
|
3,064,454 |
|
|
|
8,114,908 |
|
|
|
10,314,145 |
|
General
and administrative |
|
|
3,236,848 |
|
|
|
3,010,862 |
|
|
|
11,322,513 |
|
|
|
8,928,493 |
|
Litigation settlement |
|
|
155,216 |
|
|
|
- |
|
|
|
155,216 |
|
|
|
500,000 |
|
Goodwill
impairment charge |
|
|
- |
|
|
|
- |
|
|
|
9,920,305 |
|
|
|
- |
|
Depreciation and amortization |
|
|
806,898 |
|
|
|
819,894 |
|
|
|
2,443,511 |
|
|
|
2,498,136 |
|
Total costs and
expenses |
|
|
7,132,844 |
|
|
|
7,640,369 |
|
|
|
34,149,677 |
|
|
|
24,674,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(2,710,653 |
) |
|
|
(1,280,202 |
) |
|
|
(18,828,948 |
) |
|
|
(4,119,986 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
- |
|
|
|
(215,781 |
) |
|
|
(12,399 |
) |
|
|
(216,948 |
) |
Interest
and other income |
|
|
4,117 |
|
|
|
150 |
|
|
|
9,218 |
|
|
|
801 |
|
Other
finance income |
|
|
5,318 |
|
|
|
- |
|
|
|
7,082 |
|
|
|
- |
|
Other (expense) income,
net |
|
|
9,435 |
|
|
|
(215,631 |
) |
|
|
3,901 |
|
|
|
(216,147 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of
warrant liability |
|
|
- |
|
|
|
(401,000) |
|
|
|
- |
|
|
|
(401,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax
benefit |
|
|
(2,701,218 |
) |
|
|
(1,896,833 |
) |
|
|
(18,825,047 |
) |
|
|
(4,737,133 |
) |
Income tax benefit |
|
|
(213,133 |
) |
|
|
(623,699 |
) |
|
|
(1,160,437 |
) |
|
|
(1,218,092 |
) |
Net loss |
|
|
(2,488,085 |
) |
|
|
(1,273,134 |
) |
|
|
(17,664,610 |
) |
|
|
(3,519,041 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment |
|
|
(3,056 |
) |
|
|
- |
|
|
|
(1,435 |
) |
|
|
- |
|
Comprehensive loss |
|
$ |
(2,491,141 |
) |
|
$ |
(1,273,134 |
) |
|
$ |
(17,666,045 |
) |
|
$ |
(3,519,041 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share, basic and diluted |
|
$ |
(0.63 |
) |
|
$ |
(0.70 |
) |
|
$ |
(4.52 |
) |
|
$ |
(1.94 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used in computing net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
3,932,886 |
|
|
|
1,809,676 |
|
|
|
3,912,282 |
|
|
|
1,809,676 |
|
The following table provides a reconciliation of Adjusted EBITDA
to Net Loss, the most directly comparable GAAP measure reported in
our consolidated financial statements:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(2,488 |
) |
|
$ |
(1,273 |
) |
|
$ |
(17,665 |
) |
|
$ |
(3,519 |
) |
Stock-based compensation expense |
|
|
146 |
|
|
|
118 |
|
|
|
731 |
|
|
|
218 |
|
Goodwill
impairment charge |
|
|
- |
|
|
|
- |
|
|
|
9,920 |
|
|
|
- |
|
Litigation Settlement |
|
|
155 |
|
|
|
- |
|
|
|
155 |
|
|
|
500 |
|
Gain on
lease cancellation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(424 |
) |
Depreciation and amortization |
|
|
807 |
|
|
|
820 |
|
|
|
2,444 |
|
|
|
2,498 |
|
Change in
fair value of Warrant Liability |
|
|
- |
|
|
|
401 |
|
|
|
- |
|
|
|
401 |
|
Interest
Expense |
|
|
- |
|
|
|
216 |
|
|
|
12 |
|
|
|
217 |
|
Interest
and other income |
|
|
(4) |
|
|
|
- |
|
|
|
(9 |
) |
|
|
(1 |
) |
Income
tax benefit |
|
|
(213 |
) |
|
|
(624) |
|
|
|
(1,160) |
|
|
|
(1,218) |
|
Adjusted
EBITDA |
|
$ |
(1,597 |
) |
|
$ |
(342 |
) |
|
$ |
(5,572 |
) |
|
$ |
(1,328 |
) |
About Professional Diversity Network (PDN)
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. We operate subsidiaries in
the United States and China including Noble Voice, a career
placement and career counseling call center and National
Association of Professional Women (NAPW), 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, LGBT
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.ipdnusa.com. Please click on "Investor
Relations."
CONTACT: Professional Diversity Network, Inc.
Jason Assad – Investor
Relationsjwassad@prodivnet.com678-570-6791
Jim Kirsch – Co Executive
Chairmanjkirsch@prodivnet.com312-614-9021
Professional Diversity N... (NASDAQ:IPDN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Professional Diversity N... (NASDAQ:IPDN)
Historical Stock Chart
From Apr 2023 to Apr 2024