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 June 30,
2021.
“Our PDN Network continued to build off if its
strong first quarter with another successful second quarter as we
believe that the sustained corporate and political awareness in
terms of greater investment in diversity recruitment and inclusion
initiatives continue to benefit the Company, and in turn society as
a whole. We remain committed to strengthening the financial
position of the Company through investing in our operating segments
to drive organic growth, synergetic acquisitions, and timely equity
transactions.” said Adam He, CEO of Professional Diversity
Network.
Second Quarter
Financial Highlights:
|
● |
Total consolidated revenues increased $0.5 million or 54 percent as
compared to the same period in the prior year. PDN Network segment
revenues increased $0.6 million or 101 percent compared to revenues
during the same period in the prior year. The increase in PDN
Network segment revenues was attributable to continued new client
acquisitions and continued growth in our recruitment business as a
result of increased political and corporate diversity and inclusion
efforts. Revenues for the three months ended June 30, 2021 from the
NAPW segment decreased approximately $0.1 million as compared to
the same period in the prior year. The decrease in revenues was
primarily due to a decrease in legacy membership retention rates
and the continued effects of COVID-19. |
|
|
|
|
● |
Basic and diluted net loss per share improved by $0.13, from a net
loss per share of $0.17 during the three months ended June 30,
2020, as compared to a net loss per share of $0.04 during the three
months ended June 30, 2021. |
|
|
|
|
● |
As of June 30, 2021, cash balances were $2.5 million. The Company
raised approximately $1.0 million from the issuance of common stock
during the three months ended June 30, 2020 for which there was no
comparable transaction in the current period. |
|
|
|
|
● |
On July 9, 2021, the Company closed the registered direct offering,
pursuant to which certain institutional accredited investors
purchased 1,470,588 shares of the Company’s common stock, par value
$0.01 per share, at a per share price equal to $1.70 for gross
proceeds of $2,499,999.60. |
Financial Results for the
Three Months Ended June
30, 2021
Revenues
Total revenues for the three months ended June
30, 2021 increased approximately $509,000, or 54 percent to
approximately $1,460,000 from approximately $952,000 during the
same period in the prior year. The increase was predominately
attributable to an approximate $580,000 increase in recruitment
services revenues in the current period, partially offset by an
approximate $95,000 decrease in legacy membership fees and related
services revenues, as compared to the same period in the prior
year.
During the three months ended June 30, 2021, our
PDN Network generated approximately $1,152,000 in revenues compared
to approximately $572,000 in revenues during the three months ended
June 30, 2020, an increase of approximately $580,000 or 101
percent. The increase in revenues was predominately driven by
improvements made to our e-commerce platform and new sales
collaborations, higher new client acquisitions and a continued
investment in diversity recruitment initiatives by our
clients.
During the three months ended June 30, 2021, our
NAPW Network revenues were approximately $258,000, compared to
revenues of approximately $353,000 during the same period in the
prior year, a decrease of approximately $95,000 or 27 percent. The
decrease in revenues was primarily due to a continued decrease in
legacy membership retention rates and the continued effects of
COVID-19 as new membership enrollment is showing signs of
returning. We believe that the membership services that we provide
to our customers turned into a discretionary spending item choice
during 2020 and through the current period of fiscal 2021 and the
services that we provide were postponed as a result of the
financial and economic impact of COVID-19.
Costs and Expenses
Cost of revenues during the three months ended
June 30, 2021 was approximately $260,000, an increase of
approximately $90,000 or 53 percent from approximately $170,000
during the same period of the prior year, as a result of increased
revenues.
General and administrative expenses decreased by
approximately $962,000, or 46.4 percent, to approximately
$1,112,000 during the three months ended June 30, 2021, as
compared to the same period in the prior year. The decrease was
primarily a result of reductions in professional services charges
of approximately $700,000, stock-based compensation costs of
approximately $195,000, and payroll related costs of approximately
$110,000, as compared to the same period in the prior year.
Offsetting the decrease was a non-cash charge to litigation
settlement reserve of $75,000 and a non-recurring charge for
employee related costs of approximately $67,000.
Net Loss from Continuing
Operations
As the result of the factors discussed above,
during the three months ended June 30, 2021, we incurred a net loss
of approximately $590,000 from continuing operations, an
improvement of approximately $1,192,000 or 67 percent,
compared to a net loss of approximately $1,781,000 during the three
months ended June 30, 2020.
Financial Results for the Six Months
Ended June 30, 2021
Revenues
Total revenues for the six months ended June 30,
2021 increased approximately $1,011,000, or 52 percent to
approximately $2,945,000 from approximately $1,934,000 during the
same period in the prior year. The increase was predominately
attributable to an approximate $1,188,000 increase in recruitment
services revenues in the current period, partially offset by an
approximate $216,000 decrease in legacy membership fees and related
services revenues, as compared to the same period in the prior
year.
During the six months ended June 30, 2021, our
PDN Network generated approximately $2,421,000 in revenues compared
to approximately $1,193,000 in revenues during the six months ended
June 30, 2020, an increase of approximately $1,228,000 or 103
percent. The increase in revenues was predominately driven by
improvements made to our e-commerce platform and new sales
collaborations, higher new client acquisitions and a continued
investment in diversity recruitment initiatives by our
clients.
During the six months ended June 30, 2021, our
NAPW Network revenues were approximately $524,000, compared to
revenues of approximately $741,000 during the same period in the
prior year, a decrease of approximately $217,000 or 29 percent. The
decrease in revenues was primarily due to a continued decrease in
legacy membership retention rates and the continued effects of
COVID-19 as new membership enrollment slowly returns. We believe
that the membership services that we provide to our customers
turned into a discretionary spending item during 2020 and the first
three months of 2021 and the services that we provide were
postponed as a result of the financial and economic impact of
COVID-19.
Costs and Expenses
Cost of revenues during the six months ended
June 30, 2021 was approximately $521,000, an increase of
approximately $178,000, or 52 percent, from approximately $343,000
during the same period of the prior year, as a result of increased
revenues.
General and administrative expenses for the six
months ended June 30, 2021 were approximately $2,430,000, a
decrease of approximately $1,305,000, or 35 percent, from
approximately $3,735,000 during the same period in the prior year.
The decrease was primarily a result of a reduction in professional
services charges of approximately $850,000, litigation settlement
reserve of $450,000 recorded in the first quarter of 2020,
partially offset by an increase in litigation settlement reserve of
$75,000 in the second quarter of 2021, and a decrease in
stock-based compensation costs of approximately $88,000, as
compared to the same period in the prior year. Partially offsetting
the decrease was a non-recurring charge for employee related costs
of approximately $67,000.
Net Loss from Continuing
Operations
As the result of the factors discussed above,
during the six months ended June 30, 2021, we incurred a net loss
of approximately $1,345,000 from continuing operations, an increase
of approximately $1,859,000 or 58 percent, compared to a net loss
of approximately $3,203,000 during the same period in the prior
year.
Summary of the Quarter’s Financial
Information
Amounts in following tables are in thousands except for per
share amounts and outstanding shares.
Summary of Financial Position
|
|
June 30, 2021 |
|
|
December 31, 2020 |
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,507 |
|
|
$ |
2,118 |
|
Other current assets |
|
|
1,506 |
|
|
|
1,403 |
|
Total current assets |
|
$ |
4,013 |
|
|
$ |
3,521 |
|
Long-term assets |
|
|
1,891 |
|
|
|
5,152 |
|
Total Assets |
|
$ |
5,904 |
|
|
$ |
8,673 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
4,751 |
|
|
$ |
4,677 |
|
Total long-term
liabilities |
|
|
618 |
|
|
|
650 |
|
Total liabilities |
|
$ |
5,369 |
|
|
$ |
5,327 |
|
|
|
|
|
|
|
|
|
|
Total stockholders’
equity |
|
|
535 |
|
|
|
3,346 |
|
Total liabilities and
stockholders’ equity |
|
$ |
5,904 |
|
|
$ |
8,673 |
|
Summary of Financial Operations
|
|
Six Months Ended
June 30, |
|
|
Change |
|
|
Change |
|
|
|
2021 |
|
|
2020 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
521 |
|
|
$ |
737 |
|
|
$ |
(216 |
) |
|
|
(29.3 |
)% |
Recruitment services |
|
|
2,327 |
|
|
|
1,139 |
|
|
|
1,188 |
|
|
|
104.3 |
% |
Products sales and other |
|
|
3 |
|
|
|
3 |
|
|
|
- |
|
|
|
- |
% |
Consumer advertising and marketing solutions |
|
|
94 |
|
|
|
55 |
|
|
|
39 |
|
|
|
71.7 |
% |
Total revenues |
|
$ |
2,945 |
|
|
$ |
1,934 |
|
|
$ |
1,011 |
|
|
|
52.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
521 |
|
|
$ |
343 |
|
|
$ |
178 |
|
|
|
51.8 |
% |
Sales and marketing |
|
|
1,300 |
|
|
|
984 |
|
|
|
316 |
|
|
|
32.2 |
% |
General and
administrative |
|
|
2,430 |
|
|
|
3,735 |
|
|
|
(1,305 |
) |
|
|
(34.9 |
)% |
Depreciation and
amortization |
|
|
59 |
|
|
|
100 |
|
|
|
(41 |
) |
|
|
(41.2 |
)% |
Total pre-tax cost and
expenses: |
|
$ |
4,310 |
|
|
$ |
5,162 |
|
|
$ |
(852 |
) |
|
|
(16.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations |
|
$ |
(1,345 |
) |
|
$ |
(3,203 |
) |
|
$ |
1,858 |
|
|
|
58.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.10 |
) |
|
$ |
(0.33 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding
shares used in computing net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
13,368,449 |
|
|
|
9,951,759 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Change |
|
|
Change |
|
|
|
2021 |
|
|
2020 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
258 |
|
|
$ |
353 |
|
|
$ |
(95 |
) |
|
|
(26.9 |
)% |
Recruitment services |
|
|
1,152 |
|
|
|
572 |
|
|
|
580 |
|
|
|
101.4 |
% |
Products sales and other |
|
|
2 |
|
|
|
2 |
|
|
|
- |
|
|
|
- |
% |
Consumer advertising and marketing solutions |
|
|
49 |
|
|
|
25 |
|
|
|
24 |
|
|
|
96.0 |
% |
Total revenues |
|
$ |
1,461 |
|
|
$ |
952 |
|
|
$ |
509 |
|
|
|
53.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
260 |
|
|
$ |
170 |
|
|
$ |
90 |
|
|
|
52.9 |
% |
Sales and marketing |
|
|
600 |
|
|
|
459 |
|
|
|
141 |
|
|
|
30.7 |
% |
General and
administrative |
|
|
1,1112 |
|
|
|
2,074 |
|
|
|
(962 |
) |
|
|
(46.4 |
)% |
Depreciation and
amortization |
|
|
29 |
|
|
|
48 |
|
|
|
(19 |
) |
|
|
(39.6 |
)% |
Total pre-tax cost and
expenses: |
|
$ |
2,001 |
|
|
$ |
2,751 |
|
|
$ |
(750 |
) |
|
|
(27.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations |
|
$ |
(588 |
) |
|
$ |
(1,782 |
) |
|
$ |
1,194 |
|
|
|
67.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.04 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding
shares used in computing net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
13,472,385 |
|
|
|
10,933,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Cash Flows from
Continued Operations |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
Cash (used in) provided by
continued operations |
|
|
2021 |
|
|
|
2020 |
|
Operating activities |
|
$ |
(663 |
) |
|
$ |
(1,913 |
) |
Investing activities |
|
|
(80 |
) |
|
|
(7 |
) |
Financing activities |
|
|
1,167 |
|
|
|
2,151 |
|
Net increase in cash and cash
equivalents from continued operations |
|
$ |
424 |
|
|
$ |
231 |
|
Professional Diversity Network, Inc. and
SubsidiariesNon-GAAP (Adjusted) Financial
Measures
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 for the three and six
months ended June 30, 2021 and 2020, the most directly comparable
GAAP measure reported in our consolidated financial statements:
|
|
Three Months Ended June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands) |
|
Loss from Continuing
Operations |
|
$ |
(590 |
) |
|
$ |
(1,781 |
) |
Stock-based compensation |
|
|
203 |
|
|
|
378 |
|
Litigation settlement reserve |
|
|
75 |
|
|
|
258 |
|
Depreciation and amortization |
|
|
29 |
|
|
|
48 |
|
Interest and other income |
|
|
(2 |
) |
|
|
(6 |
) |
Income tax expense (benefit) |
|
|
50 |
|
|
|
(13 |
) |
Adjusted
EBITDA |
|
$ |
(235 |
) |
|
$ |
(1,116 |
) |
|
|
Six Months Ended June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands) |
|
Loss from Continuing
Operations |
|
$ |
(1,345 |
) |
|
$ |
(3,203 |
) |
Stock-based compensation |
|
|
309 |
|
|
|
398 |
|
Litigation settlement reserve |
|
|
75 |
|
|
|
708 |
|
Depreciation and amortization |
|
|
59 |
|
|
|
100 |
|
Interest and other income |
|
|
(3 |
) |
|
|
(6 |
) |
Income tax benefit |
|
|
(17 |
) |
|
|
(18 |
) |
Adjusted
EBITDA |
|
$ |
(922 |
) |
|
$ |
(2,021 |
) |
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 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, LGBTQ 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.prodivnet.com. Please click on “Investor
Relations.”
Investor Inquiries:investors@ipdnusa.com+1 (312)
614-0950Source: Professional Diversity Network, Inc.Released August
16, 2021
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