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,
2019.
First Quarter 2019 Financial Highlights:
- Net loss from continuing operations was $1.1 million for the
quarter ended March 31, 2019, a decrease of 37.3% from $1.8 million
for the quarter ended March 31, 2018.
- Total costs and expenses were $2.6 million for the quarter
ended March 31, 2019, a 42.2% decrease compared to $4.4 million for
the quarter ended March 31, 2018.
- From April 1, 2019 to April 2, 2019, the Company sold an
aggregate of 28,552 shares of its common stock at a purchase price
ranging from $3.70 to $3.85 per share, representing 120% of the
closing price the trading day immediately prior to the date of
subscription. As of the date of this quarterly report, the Company
has received an aggregate gross proceeds of $107,036 under this
private placement.
Michael Wang, Chairman and CEO of Professional Diversity
Network, said, "While the Company continued to sustain losses, we
see positive momentum on our efforts in reducing costs and
overheads. The beginning of 2019 marks the fifth consecutive
quarter that we successfully reduce losses.”
Mr. Wang continued, “This year we will continue enhancing our
diversity recruitment and women's networking segments and expanding
our China business to increase shareholder value and move toward
sustainable profitability.”
First Quarter 2019 Financial Results
Revenue
For the quarter ended March 31, 2019, IPDN reported total
revenue of $1.3 million, a 41.8% decrease from $2.3 million for the
quarter ended March 31, 2018. The decrease is mainly the result of
management’s focus on reduction in sales and operations workforce
as a means to improved efficiencies and operational effectiveness
while rebranding the business.
Costs and Expenses
Total costs and expenses were $2.6 million for the quarter ended
March 31, 2019, a 42.2% decrease compared to $4.4 million for the
quarter ended March 31, 2018. The decrease is primarily the result
of $992,000 or 42.2% decrease in general and administrative
expenses, a $459,000 or 67.5% decrease in depreciation and
amortization expenses, and a $312,000, or 28.5% decrease in sales
and marketing expenses.
Net Loss
Net loss for the quarter ended March 31, 2019 was $1.2 million
or $0.23 per share - compared to a net loss of $2.0 million, or
$0.48 per share, for the quarter ended March 31, 2018.
Net Loss from Continuing Operations
Net loss from continuing operations was $1.1 million for the
quarter ended March 31, 2019, a decrease of 37.3% from $1.8 million
for the quarter ended March 31, 2018. The $680,000 decrease in net
loss was primarily driven by $992,000 decrease in general and
administrative expenses, a $459,000 decrease in depreciation and
amortization expenses, and a $312,000 decrease in sales and
marketing expenses, partially offset by a $756,000 decrease in
revenues from membership fees, related services at the NAPW
segment.
Cash and Financial Position
As of March 31, 2019, the Company had cash and cash equivalents
of $0.8 million, compared to $1.4 million as of December 31, 2018.
The Company had a working capital deficiency of $4.3 million as of
March 31, 2019, compared to a working capital deficiency of $3.4
million as of December 31, 2018.
Net cash used in operating activities in continuing operations
was $1.0 million for the quarter ended March 31, 2019, and net cash
used in operating activities in continuing operations was 1.6
million for the quarter ended March 31, 2018.
Professional Diversity
Network, Inc. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
|
|
March 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
(Unaudited) |
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents
(Amounts related to variable interestentity of $341,800 and
$683,043 as of March 31, 2019 andDecember 31, 2018,
respectively) |
|
$ |
793,863 |
|
|
$ |
1,441,607 |
|
Accounts receivable, net |
|
|
446,368 |
|
|
|
816,698 |
|
Incremental direct costs |
|
|
48,154 |
|
|
|
20,797 |
|
Prepaid expenses and other
current assets |
|
|
482,879 |
|
|
|
350,906 |
|
Current assets from
discontinued operations |
|
|
26,539 |
|
|
|
126,270 |
|
Total current assets |
|
|
1,797,803 |
|
|
|
2,756,278 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
67,273 |
|
|
|
83,608 |
|
Capitalized technology,
net |
|
|
169,626 |
|
|
|
194,833 |
|
Goodwill |
|
|
339,451 |
|
|
|
339,451 |
|
Intangible assets, net |
|
|
837,774 |
|
|
|
1,020,942 |
|
Right-of-use assets |
|
|
353,486 |
|
|
|
- |
|
Merchant reserve |
|
|
760,849 |
|
|
|
760,849 |
|
Security deposits |
|
|
90,574 |
|
|
|
82,139 |
|
Total assets |
|
$ |
4,416,836 |
|
|
$ |
5,238,100 |
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,676,620 |
|
|
$ |
1,843,688 |
|
Accrued expenses |
|
|
1,063,914 |
|
|
|
989,626 |
|
Deferred revenue |
|
|
2,254,170 |
|
|
|
2,460,436 |
|
Note Payable – related
party |
|
|
207,118 |
|
|
|
500,000 |
|
Line of Credit – related
party |
|
|
292,882 |
|
|
|
- |
|
Lease liability, current
portion |
|
|
300,456 |
|
|
|
- |
|
Current liabilities from
discontinued operations |
|
|
303,794 |
|
|
|
346,528 |
|
Total current liabilities |
|
|
6,098,954 |
|
|
|
6,140,278 |
|
|
|
|
|
|
|
|
|
|
Deferred tax liability |
|
|
122,824 |
|
|
|
194,786 |
|
Deferred rent |
|
|
- |
|
|
|
13,742 |
|
Other liabilities |
|
|
84 |
|
|
|
82 |
|
Lease liability, non-current
portion |
|
|
60,910 |
|
|
|
- |
|
Long-term liabilities from
discontinued operations |
|
|
- |
|
|
|
- |
|
Total liabilities |
|
|
6,282,772 |
|
|
|
6,348,888 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value;
45,000,000 shares authorized;5,060,176 shares and 4,856,213 shares
issued as of March 31,2019 and December 31, 2018, respectively; and
5,059,128shares and 4,855,165 shares outstanding as of March 31,
2019and December 31, 2018, respectively |
|
|
50,602 |
|
|
|
48,562 |
|
Additional paid in
capital |
|
|
84,108,048 |
|
|
|
83,728,903 |
|
Accumulated other
comprehensive loss |
|
|
(1,305 |
) |
|
|
(24,340 |
) |
Accumulated deficit |
|
|
(85,986,164 |
) |
|
|
(84,826,796 |
) |
Treasury stock, at cost; 1,048
shares at March 31, 2019 andDecember 31, 2018 |
|
|
(37,117 |
) |
|
|
(37,117 |
) |
Total stockholders’
equity |
|
|
(1,865,936 |
) |
|
|
(1,110,788 |
) |
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
|
$ |
4,416,836 |
|
|
$ |
5,238,100 |
|
Professional Diversity
Network, Inc. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited) |
|
|
Three Months EndedMarch 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
829,420 |
|
|
$ |
1,612,221 |
|
Recruitment services |
|
|
474,260 |
|
|
|
621,415 |
|
Product sales and other |
|
|
2,812 |
|
|
|
3,657 |
|
Education and training |
|
|
4,069 |
|
|
|
6,471 |
|
Consumer advertising and marketing solutions |
|
|
35,716 |
|
|
|
69,734 |
|
Total revenues |
|
|
1,346,277 |
|
|
|
2,313,498 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
187,581 |
|
|
|
285,833 |
|
Sales and marketing |
|
|
780,747 |
|
|
|
1,093,124 |
|
General and administrative |
|
|
1,358,556 |
|
|
|
2,351,931 |
|
Depreciation and amortization |
|
|
221,422 |
|
|
|
679,761 |
|
Total costs and expenses |
|
|
2,548,306 |
|
|
|
4,410,649 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(1,202,029 |
) |
|
|
(2,097,151 |
) |
|
|
|
|
|
|
|
|
|
Other (expense) income |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(8,133 |
) |
|
|
- |
|
Interest and other income |
|
|
- |
|
|
|
890 |
|
Other income (expense) |
|
|
- |
|
|
|
22,558 |
|
Other income, net |
|
|
(8,133 |
) |
|
|
23,448 |
|
|
|
|
|
|
|
|
|
|
Loss before income tax expense
(benefit) |
|
|
(1,210,162 |
) |
|
|
(2,073,703 |
) |
Income tax expense
(benefit) |
|
|
(65,633 |
) |
|
|
(249,050 |
) |
Loss from continuing
operations |
|
|
(1,144,529 |
) |
|
|
(1,824,653 |
) |
Loss from discontinued
operations (net of tax benefit of $1,211,and $35,036, in the three
months ended March 31, 2019 and2018, respectively) |
|
|
(14,840 |
) |
|
|
(209,760 |
) |
Net loss |
|
|
(1,159,369 |
) |
|
|
(2,034,413 |
) |
|
|
|
|
|
|
|
|
|
Other comprehensive loss: |
|
|
(1,159,369 |
) |
|
|
(2,034,413 |
) |
Foreign currency translation adjustment |
|
|
23,035 |
|
|
|
76,708 |
|
Comprehensive loss |
|
$ |
(1,136,334 |
) |
|
$ |
(1,957,705 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
(0.23 |
) |
|
|
(0.43 |
) |
Discontinued operations |
|
|
(0.00 |
) |
|
|
(0.05 |
) |
Net loss |
|
$ |
(0.23 |
) |
|
$ |
(0.48 |
) |
|
|
|
|
|
|
|
|
|
Weighted average outstanding
shares used in computing net lossper common share: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
4,969,230 |
|
|
|
4,221,620 |
|
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:
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Loss from Continuing Operations |
|
$ |
(1,145 |
) |
|
$ |
(1,825 |
) |
Stock-based compensation expense |
|
|
8 |
|
|
|
118 |
|
Depreciation and amortization |
|
|
221 |
|
|
|
680 |
|
Interest Expense |
|
|
8 |
|
|
|
- |
|
Interest and other income |
|
|
- |
|
|
|
(1 |
) |
Income tax expense (benefit) |
|
|
(66 |
) |
|
|
(249 |
) |
Adjusted
EBITDA |
|
$ |
(974 |
) |
|
$ |
(1,277 |
) |
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 and China 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, LGBT and disabled persons globally.
Forward-Looking StatementsThis 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."
Contact:Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803Email: ipdn@dgipl.com
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