NEW YORK, Aug. 1, 2016 /PRNewswire/ -- TheStreet,
Inc. (Nasdaq: TST) today reported financial results for the
quarter ended June 30, 2016.
For the second quarter of 2016, the Company reported revenue of
$16.3 million, net loss attributable
to common stockholders of $1.2
million, or ($0.03) per basic
and diluted share, and Adjusted EBITDA(1) of
$0.7 million.
"My first few weeks at TheStreet have helped me discover several
pools of untapped talent across our businesses," said David Callaway, President and CEO, who joined in
early July. "I'm encouraged by the progress in our
institutional efforts as well as the corporate governance changes
we've enacted to improve transparency for our important
shareholders."
Revenue for the second quarter of 2016 was $16.3 million, a decrease of $0.8 million, or 5%, from $17.1 million in the prior year. This represents
the second full quarterly comparison that includes revenue
associated with Management Diagnostics Limited ("MDL", or
"BoardEx"), which was acquired on October
31, 2014.
Business-to-business revenue including The Deal, BoardEx and
RateWatch totaled $7.5 million, up
4%, compared to the second quarter of 2015.
Business-to-consumer revenue was $8.8
million, down 11%, compared to the second quarter of
2015.
Operating expenses for the second quarter of 2016 were
$17.2 million, a decrease of
$0.3 million, or 2%, from the prior
year period. Net loss attributable to common stockholders for the
second quarter of 2016 was $1.2
million compared to a net loss attributable to common
stockholders of $0.8 million in the
prior year period. The Company reported a basic and diluted net
loss per share attributable to common stockholders of ($0.03) for the second quarter of 2016, compared
to a net loss per share attributable to common stockholders of
($0.02) for the prior year period.
Adjusted EBITDA for the second quarter of 2016 was
$0.7 million, decrease of
$0.4 million, from the prior year
period.
The company generated $0.7 million
in operating cash flow for the first six months of 2016, compared
to $0.8 million for the prior year
period. The decrease in net cash provided by operating
activities was primarily the result of the increased net loss for
the period partially offset by the change in the balance of accrued
expenses over the periods. The Company ended the quarter with cash
and cash equivalents, restricted cash and marketable securities of
$29.3 million, as compared to
$30.7 million as of December 31, 2015.
"In order to provide additional insight into our business
we continue to breakout revenue by business-to-business and
business-to-consumer categories in our quarterly reports," said
TheStreet Chief Financial Officer Eric F.
Lundberg. "As we continue to grow and improve our product
offerings, we believe this additional transparency will provide our
investors with a better understanding of our performance and
the drivers of growth for each of our businesses."
Business-to-Business Revenue
Business-to-business revenue for the second quarter of 2016 was
$7.5 million, an increase of
$0.3 million, or 4%. The
increase was the result of The Deal which was up $0.3 million, all attributed to The Deal
Corporate Governance event held in June, while subscriptions for
The Deal remained flat. BoardEx revenue increased by $0.1 million, or 3%, during the second quarter of
2016 despite a negative $0.2 million
foreign exchange rate impact from the strengthening of the US
dollar relative to the British Pound. This was partially offset by
a decrease of $0.1 million, or 5%,
from our RateWatch product.
Business-to-Business Highlights
- Our London office now manages
TheStreet's website during the overnight hours, providing more
fresh content in the early hours of the morning in the US.
- Bookings totaled $7.3 million for
the second quarter of 2016, an increase of $0.1 million, or 2%, from the prior year
period.
- Bookings for the trailing four quarters were $27.9 million, an increase of $3.3 million, or 13%, from the prior period.
Excluding the impact of BoardEx, bookings for the trailing four
quarters were $17.4 million, a
decrease of $0.4 million, or 2%, from
the prior period.
Business-to-Consumer Revenue
Business-to-consumer revenue for the second quarter of 2016 was
$8.8 million, a decrease of
$1.1 million, or 11%, from
$9.9 million in the second quarter of
2015. Business-to-consumer subscription revenue for the
second quarter of 2016 was $5.9
million, a decrease of $1.1
million, or 17%, from $7.0
million in the second quarter of 2015. This decrease
primarily related to a 14% decline in the weighted-average number
of subscriptions combined with a 3% decrease in the average revenue
recognized per subscription. Business-to-consumer media
revenue for the second quarter of 2016 was $2.9 million, up $0.1
million, or 2% as compared to the prior year period.
Business-to-Consumer Highlights: (2)
- The number of paid subscriptions at June
30, 2016 was 69,000, a decrease of 11,600, or 14%, when
compared to June 30, 2015, and a
decrease of 2,900, or 4%, when compared to March 31, 2016.
- Average revenue per subscription for the second quarter of 2016
decreased 3% when compared to the second quarter of 2015, and
decreased 1% when compared to the first quarter of 2016.
- Average monthly churn(3) was 5.9% for the second
quarter of 2016, compared to 4.7% for the second quarter of 2015,
and 5.6% for the first quarter of 2016.
- Second quarter 2016 traffic visits increased 22% when compared
to the second quarter of 2015, and decreased 3% when compared to
the first quarter of 2016.
- Second quarter 2016 organic visits increased 26% when compared
to the second quarter of 2015, and decreased 11% when compared to
the first quarter of 2016.
- Mobile traffic visits increased 134% while desktop traffic
visits decreased 7% for the second quarter of 2016 as compared to
the second quarter of 2015. As compared to the first quarter of
2016, mobile traffic visits increased 36% while desktop traffic
visits decreased 22%.
With the rebuild and redesign of the internet site in the second
quarter of 2016, user visits are the primary indicator of traffic
especially with the continued shift to mobile. The Company believes
user visits are a more meaningful year-over-year comparative metric
than page views. This is especially true in the mobile world where
full article views and seamless continuous scroll renders the page
view as a less crucial measure of user engagement. With the
redesign, search engines temporarily lowered the Company's ranking
during the second quarter while they re-indexed the Company's
content causing a decrease in visits during the second quarter of
2016 compared to the first quarter.
Conference Call Information
TheStreet will discuss its financial results for the second
quarter today at 4:30 p.m. EDT.
To participate in the call, please dial 877-604-9668 (domestic)
or 719-325-4821 (international). The conference code is 2852436.
This call is being webcast and can be accessed on the Investor
Relations section of TheStreet website at.
http://investor-relations.thestreet.com/events.cfm.
A replay of the webcast will be available approximately two
hours after the conclusion of the call and remain available for
approximately 90 calendar days.
About TheStreet
TheStreet, Inc. (www.t.st) is a leading independent digital
financial information services company providing business and
financial news, investing ideas and analysis to personal and
institutional investors worldwide. The Company's portfolio of
business and personal finance brands includes: TheStreet,
RealMoney, Action Alerts PLUS and MainStreet. To learn more, visit
www.thestreet.com. The Deal, the Company's institutional
business, provides intraday coverage of mergers and acquisitions
and all other changes in corporate control, and through its BoardEx
product, director and officer profiles. To learn more, visit
www.thedeal.com and www.boardex.com. RateWatch provides rate and
fee data from banks and credit unions across the U.S. for a wide
variety of banking products. To learn more, visit
www.rate-watch.com.
Non-GAAP Financial Information
(1) To supplement the Company's financial statements
presented in accordance with generally accepted accounting
principles ("GAAP"), the Company also uses "EBITDA", "Adjusted
EBITDA" and "free cash flow", non-GAAP measures of certain
components of financial performance. EBITDA is adjusted from
results based on GAAP to exclude interest, income taxes,
depreciation and amortization. This non-GAAP measure is
provided to enhance investors' overall understanding of the
Company's current financial performance and its prospects for the
future. Specifically, the Company believes that the non-GAAP
EBITDA results are an important indicator of the operational
strength of the Company's business and provide an indication of the
Company's ability to service debt and fund acquisitions and capital
expenditures. EBITDA eliminates the uneven effect of
considerable amounts of non-cash depreciation of tangible assets
and amortization of certain intangible assets that were recognized
in business combinations. Adjusted EBITDA further eliminates
the impact of non-cash stock compensation, restructuring,
transaction related costs and other charges affecting
comparability. A limitation of these measures, however, is
that they do not reflect the periodic costs of certain capitalized
tangible and intangible assets used in generating revenues in the
Company's businesses. Management evaluates the investments in
such tangible and intangible assets through other financial
measures, such as capital expenditure budgets and investment
spending levels. "Free cash flow" means net income/loss plus
non-cash expenses net of gains/losses on dispositions of assets,
less changes in operating assets and liabilities and capital
expenditures. The Company believes that this non-GAAP
financial measure is an important indicator of the Company's
financial results because it gives investors a view of the
Company's ability to generate cash.
(2) Consumer subscriptions include investing
newsletters and exclude subscriptions from The Deal, DealFlow
Media, BoardEx and RateWatch.
(3) Average monthly churn rate is defined as
subscriber terminations/expirations in the quarter divided by the
sum of the beginning subscribers and gross subscriber additions for
the quarter, and then divided by three. Subscriptions that
are on a free-trial basis are not regarded as added or terminated
unless the subscription is active at the end of the free-trial
period.
Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995. These forward-looking statements include statements
regarding planned investments in our business, improved premium
subscription products and expectations for 2016. Such
forward-looking statements are subject to risks and uncertainties,
including those described in the Company's filings with the
Securities and Exchange Commission ("SEC") that could cause actual
results to differ materially from those reflected in the
forward-looking statements. Factors that might contribute to
such differences include, among others, economic downturns and the
general state of the economy, including the financial markets and
mergers and acquisitions environment; our ability to drive revenue,
and increase or retain current subscription revenue, particularly
in light of the investments in our expanded news operations; our
ability to develop new products; competition and other factors set
forth in our filings with the SEC, which are available on the SEC's
website at www.sec.gov. All forward-looking statements
contained herein are made as of the date of this press
release. Although the Company believes that the expectations
reflected in the forward-looking statements are reasonable, the
Company cannot guarantee future results or occurrences. The
Company disclaims any obligation to update these forward-looking
statements, whether as a result of new information, future
developments or otherwise.
Contacts: Eric Lundberg,
Chief Financial Officer, TheStreet, Inc., ir at thestreet.com,
John Evans, Investor Relations, PIR
Communications, 415-309-0230, ir at thestreet.com
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30,
|
|
For the Six Months
Ended June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
revenue:
|
|
|
|
|
|
|
|
|
Business to
business
|
|
$
7,531,159
|
|
$
7,267,562
|
|
$
14,663,959
|
|
$
14,401,187
|
business to
consumer
|
|
8,761,368
|
|
9,869,357
|
|
17,698,000
|
|
19,625,781
|
Total
net revenue
|
|
16,292,527
|
|
17,136,919
|
|
32,361,959
|
|
34,026,968
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
8,144,877
|
|
8,585,978
|
|
16,031,433
|
|
16,909,669
|
Sales and
marketing
|
|
4,013,161
|
|
4,113,677
|
|
7,897,587
|
|
8,624,766
|
General and
administrative
|
|
3,879,391
|
|
3,683,619
|
|
8,993,297
|
|
7,471,490
|
Depreciation and
amortization
|
|
972,314
|
|
1,137,442
|
|
1,915,470
|
|
2,115,678
|
Restructuring and
other charges
|
|
162,958
|
|
-
|
|
1,543,010
|
|
-
|
Total operating
expense
|
|
17,172,701
|
|
17,520,716
|
|
36,380,797
|
|
35,121,603
|
Operating loss
|
|
(880,174)
|
|
(383,797)
|
|
(4,018,838)
|
|
(1,094,635)
|
Net interest
expense
|
|
(11,599)
|
|
(32,872)
|
|
(12,094)
|
|
(66,405)
|
Net loss before
income taxes
|
|
(891,773)
|
|
(416,669)
|
|
(4,030,932)
|
|
(1,161,040)
|
Provision for income
taxes
|
|
318,748
|
|
254,591
|
|
623,876
|
|
487,032
|
Net loss
|
|
(1,210,521)
|
|
(671,260)
|
|
(4,654,808)
|
|
(1,648,072)
|
Preferred stock cash
dividends
|
|
-
|
|
96,424
|
|
-
|
|
192,848
|
Net loss attributable
to common stockholders
|
|
$(1,210,521)
|
|
$
(767,684)
|
|
$
(4,654,808)
|
|
$
(1,840,920)
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share:
|
|
|
|
|
|
|
|
|
Net loss attributable to
common stockholders
|
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.13)
|
|
$
(0.05)
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared and paid per common share
|
|
$
-
|
|
$
0.025
|
|
$
-
|
|
$
0.050
|
|
|
|
|
|
|
|
|
|
Weighted average
basic and diluted shares outstanding
|
|
35,234,429
|
|
34,848,571
|
|
35,216,192
|
|
34,814,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to adjusted EBITDA - see note (1):
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(1,210,521)
|
|
$
(671,260)
|
|
$
(4,654,808)
|
|
$
(1,648,072)
|
Provision for income
taxes
|
|
318,748
|
|
254,591
|
|
623,876
|
|
487,032
|
Net interest
expense
|
|
11,599
|
|
32,872
|
|
12,094
|
|
66,405
|
Depreciation and
amortization
|
|
972,314
|
|
1,137,442
|
|
1,915,470
|
|
2,115,678
|
EBITDA
|
|
92,140
|
|
753,645
|
|
(2,103,368)
|
|
1,021,043
|
Restructuring and
other charges
|
|
162,958
|
|
-
|
|
1,543,010
|
|
-
|
Stock based
compensation
|
|
381,502
|
|
367,755
|
|
744,612
|
|
741,145
|
One-time sales tax
provision
|
|
120,198
|
|
-
|
|
1,365,198
|
|
-
|
Recovery of
previously impaired investment
|
|
(51,398)
|
|
(48,996)
|
|
(102,198)
|
|
(97,401)
|
Transaction related
costs
|
|
-
|
|
21,629
|
|
-
|
|
21,629
|
Adjusted
EBITDA
|
|
$
705,400
|
|
$
1,094,033
|
|
$
1,447,254
|
|
$
1,686,416
|
THESTREET,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
ASSETS
|
|
June 30,
2016
|
|
December 31,
2015
|
|
|
(unaudited)
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
27,165,222
|
|
$
28,445,416
|
Accounts receivable,
net of allowance for doubtful
|
|
|
|
|
accounts
of $275,153 at June 30, 2016 and $357,417 at
|
|
|
|
|
December
31, 2015
|
|
4,499,233
|
|
5,102,464
|
Other
receivables
|
|
465,149
|
|
790,148
|
Prepaid expenses and
other current assets
|
|
1,684,216
|
|
1,205,708
|
Restricted
cash
|
|
161,250
|
|
161,250
|
Total current
assets
|
|
33,975,070
|
|
35,704,986
|
|
|
|
|
|
Property and
equipment, net of accumulated depreciation
|
|
|
|
|
and
amortization of $5,212,087 at June 30, 2016
|
|
|
|
|
and
$4,804,411 at December 31, 2015
|
|
3,287,981
|
|
2,773,737
|
Marketable
securities
|
|
1,470,000
|
|
1,590,000
|
Other
assets
|
|
313,134
|
|
329,885
|
Goodwill
|
|
41,857,125
|
|
43,318,670
|
Other intangibles,
net of accumulated amortization of $16,976,742
|
|
|
|
|
at June
30, 2016 and $15,674,328 at December 31, 2015
|
|
17,673,230
|
|
18,674,376
|
Restricted
cash
|
|
500,000
|
|
500,000
|
Total
assets
|
|
$
99,076,540
|
|
$
102,891,654
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
2,562,152
|
|
$
2,494,341
|
Accrued
expenses
|
|
5,578,247
|
|
5,161,981
|
Deferred
revenue
|
|
25,643,442
|
|
24,738,780
|
Other current
liabilities
|
|
1,349,348
|
|
1,235,551
|
Total current
liabilities
|
|
35,133,189
|
|
33,630,653
|
Deferred tax
liability
|
|
2,467,746
|
|
1,906,295
|
Other
liabilities
|
|
5,616,339
|
|
5,360,467
|
Total
liabilities
|
|
43,217,274
|
|
40,897,415
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Preferred stock;
$0.01 par value; 10,000,000 shares
|
|
|
|
|
authorized; 5,500 shares issued and 5,500 shares
|
|
|
|
|
outstanding at June 30, 2016 and December 31, 2015;
|
|
|
|
|
the
aggregate liquidation preference totals $55,000,000 as
of
|
|
|
|
|
June 30,
2016 and December 31, 2015
|
|
55
|
|
55
|
Common stock; $0.01
par value; 100,000,000 shares
|
|
|
|
|
authorized; 42,591,932 shares issued and 35,252,383
|
|
|
|
|
shares
outstanding at June 30, 2016, and 42,458,779
|
|
|
|
|
shares
issued and 35,123,132 shares outstanding at
|
|
|
|
|
December
31, 2015
|
|
425,919
|
|
424,588
|
Additional paid-in
capital
|
|
270,372,809
|
|
269,524,415
|
Accumulated other
comprehensive loss
|
|
(4,324,132)
|
|
(1,999,026)
|
Treasury stock at
cost; 7,339,549 shares at June 30, 2016
|
|
|
|
|
and
7,335,647 shares at December 31, 2015
|
|
(13,061,325)
|
|
(13,056,541)
|
Accumulated
deficit
|
|
(197,554,060)
|
|
(192,899,252)
|
Total stockholders'
equity
|
|
55,859,266
|
|
61,994,239
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
99,076,540
|
|
$
102,891,654
|
|
|
|
|
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited)
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30,
|
|
|
2016
|
|
2015
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(4,654,808)
|
|
$
(1,648,072)
|
Adjustments to
reconcile net loss to net cash provided by
|
|
|
|
|
operating activities:
|
|
|
|
|
Stock-based
compensation expense
|
|
744,612
|
|
741,145
|
Provision for
doubtful accounts
|
|
(33,487)
|
|
95,546
|
Depreciation and
amortization
|
|
1,915,470
|
|
2,115,678
|
Deferred
taxes
|
|
561,451
|
|
360,882
|
Restructuring and
other charges
|
|
105,113
|
|
-
|
Deferred
rent
|
|
59,960
|
|
(163,899)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
565,073
|
|
695,408
|
Other receivables
|
|
320,457
|
|
53,501
|
Prepaid expenses and other current assets
|
|
(493,501)
|
|
(217,295)
|
Other assets
|
|
2,868
|
|
(81,259)
|
Accounts payable
|
|
76,692
|
|
45,008
|
Accrued expenses
|
|
485,575
|
|
(2,103,315)
|
Deferred revenue
|
|
1,241,539
|
|
1,299,920
|
Other current liabilities
|
|
(254,993)
|
|
(396,373)
|
Other liabilities
|
|
66,317
|
|
(39,585)
|
Net cash provided by operating activities
|
|
708,338
|
|
757,290
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Sale and maturity of
marketable securities
|
|
-
|
|
2,005,484
|
Adjustment to
purchase of Management Diagnostics Limited
|
|
-
|
|
50,494
|
Capital
expenditures
|
|
(1,612,899)
|
|
(2,091,654)
|
Net cash (used in) provided by investing activities
|
|
(1,612,899)
|
|
(35,676)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Cash dividends paid
on common stock
|
|
(11,929)
|
|
(1,780,956)
|
Cash dividends paid
on preferred stock
|
|
-
|
|
(192,848)
|
Proceeds from the
exercise of stock options
|
|
-
|
|
839
|
Restricted
cash
|
|
-
|
|
139,750
|
Shares withheld on
RSU vesting to pay for withholding taxes
|
|
(4,784)
|
|
(10,977)
|
Net cash used in financing activities
|
|
(16,713)
|
|
(1,844,192)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(358,920)
|
|
4,992
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(1,280,194)
|
|
(1,117,586)
|
Cash and cash
equivalents, beginning of period
|
|
28,445,416
|
|
32,459,009
|
Cash and cash
equivalents, end of period
|
|
$
27,165,222
|
|
$
31,341,423
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to free cash flow - see note (1):
|
|
|
|
Net loss
|
|
$
(4,654,808)
|
|
$
(1,648,072)
|
Noncash
expenditures
|
|
3,353,119
|
|
3,149,352
|
Changes in operating
assets and liabilities
|
|
2,010,027
|
|
(743,990)
|
Capital
expenditures
|
|
(1,612,899)
|
|
(2,091,654)
|
Free cash
flow
|
|
$
(904,561)
|
|
$
(1,334,364)
|
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SOURCE TheStreet, Inc.