NEW YORK, Nov. 1, 2016 /PRNewswire/ -- TheStreet,
Inc. (Nasdaq: TST) a leading financial news and information
company, today reported financial results for the third quarter
ended September 30, 2016.
For the third quarter of 2016, the Company reported revenue of
$15.2 million, net loss attributable
to common stockholders of $1.2
million, or ($0.03) per basic
and diluted share, and an Adjusted EBITDA(1) loss of
$42 thousand.
"In my first few months here we've added our first chief
marketing officer, a half dozen senior journalists in our new,
unified newsroom, and changed the structure of the management team
with some departures on the senior team and in the newsroom. We
have also added a key new board member, Betsy Morgan," said David Callaway, President and CEO, who joined in
early July. "Our new focus on leveraging our B-to-B growth in
assets such as BoardEx into our overall media strategy is already
yielding results. Third quarter subscription revenue from our
BoardEx business was up 14% over last year, though the impact was
offset by currency headwinds from Brexit."
Callaway continued, "Mobile visits to TheStreet's websites
surged 10% this quarter topping desktop for the first time.
Delivery of premium content in a mobile world is our best
opportunity for quick growth."
Revenue for the third quarter of 2016 was $15.2 million, a decrease of $1.5 million, or 9%, from $16.7 million in the prior year.
Business-to-business revenue including The Deal, BoardEx and
RateWatch totaled $7.2 million, up
1%, compared to the third quarter of 2015.
Business-to-consumer revenue was $8.0
million, down 16%, compared to the third quarter of
2015.
Operating expenses for the third quarter of 2016 were
$16.1 million, a slight increase of
$0.1 million from the prior year
period. Excluding restructure and other expenses in both periods,
operating expenses were better this year versus last year by
$0.6 million or 3.3%. Net loss
attributable to common stockholders for the third quarter of 2016
was $1.2 million compared to net
income attributable to common stockholders of $0.3 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 third quarter of 2016, compared
to net income per share attributable to common stockholders of
$0.01 for the prior year
period. Adjusted EBITDA loss for the third quarter of 2016
was $42 thousand, a decrease of
$0.9 million from the prior year
period.
Net cash used in operating activities for the nine months ended
September 30, 2016 totaled
$1.5 million, equal to the same
period during the prior year. The change in net cash used in
operating activities over the periods included an increased net
loss and the change in the balance of deferred revenue over the
periods, partially offset by the change in the balances of accrued
expenses, other liabilities and accounts receivable over the
periods. The Company ended the quarter with cash and cash
equivalents, restricted cash and marketable securities of
$25.9 million, as compared to
$30.7 million as of December 31, 2015.
Business-to-Business Revenue
Business-to-business revenue for the third quarter of 2016 was
$7.2 million, an increase of
$41 thousand, or 1% compared to the
third quarter of 2015. The increase was the result of revenue
generated from the UK Corporate Governance & Activist Event
held in Q3 2016. Excluding the foreign exchange impact, BoardEx
subscription revenue grew 14% in Q3 2016 over Q3 2015. During Q3
2016 RateWatch non-subscription sales increased $38 thousand offset by lower RateWatch
subscription products.
Business-to-Business Highlights
- Bookings totaled $6.0 million for
the third quarter of 2016, an increase of $0.3 million, or 5%, from the prior year
period.
- Bookings for the trailing four quarters were $28.2 million, an increase of $1.3 million, or 5%, from the prior period.
Excluding the impact of BoardEx, bookings for the trailing four
quarters totaled $17.4 million, a
decrease of $0.8 million, or 4%, from
the prior period. BoardEx was acquired in Q4, 2014.
Business-to-Consumer Revenue
Business-to-consumer revenue for the third quarter of 2016 was
$8.0 million, a decrease of
$1.5 million, or 16%, from
$9.5 million in the third quarter of
2015. Business-to-consumer subscription revenue for the third
quarter of 2016 was $5.6 million, a
decrease of $1.1 million, or 16%,
from $6.7 million in the third
quarter of 2015. This decrease primarily related to a 15%
decline in the weighted-average number of subscriptions combined
with a 1% decrease in the average revenue recognized per
subscription. Business-to-consumer media revenue for the
third quarter of 2016 was $2.4
million, down $0.4 million, or
15% as compared to the prior year period.
Business-to-Consumer Highlights: (2)
- The number of paid subscriptions at September 30, 2016 was 65,100, a decrease of
12,700, or 16%, when compared to September
30, 2015, and a decrease of 3,900, or 6%, when compared to
June 30, 2016.
- Average revenue per subscription for the third quarter of 2016
decreased 1% when compared to the third quarter of 2015, but
increased 2% when compared to the second quarter of 2016.
- Average monthly churn (3) was 4.8% for the third
quarter of 2016, compared to 4.6% for the third quarter of 2015,
and 5.9% for the second quarter of 2016.
- Third quarter 2016 traffic visits increased 9% when compared to
the third quarter of 2015 but, decreased 6% when compared to the
second quarter of 2016.
- Third quarter 2016 organic visits increased 6% when compared to
the third quarter of 2015, and also increased 2% when compared to
the second quarter of 2016.
- Mobile traffic visits increased 107% while desktop traffic
visits decreased 30% for the third quarter of 2016 as compared to
the third quarter of 2015. As compared to the second quarter of
2016, mobile traffic visits increased 10% while desktop traffic
visits decreased 19%. Mobile traffic visits comprised 54% of total
visits for the third quarter of 2016 as compared to 28% during the
same period of 2015.
With the rebuild and redesign of the Internet site last quarter,
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.
Conference Call Information
TheStreet will discuss its financial results for the third
quarter today at 3:30 p.m. EDT.
To participate in the call, please dial 888-286-2317 (domestic)
or 719-325-2118 (international). The conference code is 3972734.
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 financial news and
information company providing business and financial news, market
data, investing ideas and analysis to personal and institutional
investors worldwide. The Company's collection of digital services
provides users, subscribers and advertisers with a variety of
content and tools through a range of online, social media, tablet
and mobile channels. The Company's portfolio of business and
personal finance brands includes: TheStreet, RealMoney and Action
Alerts PLUS. 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
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
revenue:
|
|
|
|
|
|
|
|
|
Business to
business
|
|
$
|
7,215,910
|
|
$
|
7,174,471
|
|
$
|
21,879,869
|
|
$
|
21,575,657
|
business to
consumer
|
|
7,997,944
|
|
9,487,173
|
|
25,695,944
|
|
29,112,955
|
Total
net revenue
|
|
15,213,854
|
|
16,661,644
|
|
47,575,813
|
|
50,688,612
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
7,924,852
|
|
8,707,353
|
|
23,956,285
|
|
25,617,022
|
Sales and
marketing
|
|
3,736,815
|
|
3,703,463
|
|
11,634,402
|
|
12,328,229
|
General and
administrative
|
|
3,937,226
|
|
3,773,790
|
|
12,930,523
|
|
11,245,280
|
Depreciation and
amortization
|
|
1,080,651
|
|
1,069,161
|
|
2,996,121
|
|
3,184,839
|
Restructuring and
other charges
|
|
(582,519)
|
|
(1,221,224)
|
|
960,491
|
|
(1,221,224)
|
Total operating
expense
|
|
16,097,025
|
|
16,032,543
|
|
52,477,822
|
|
51,154,146
|
Operating (loss)
income
|
|
(883,171)
|
|
629,101
|
|
(4,902,009)
|
|
(465,534)
|
Net interest
expense
|
|
(12,179)
|
|
(30,891)
|
|
(24,273)
|
|
(97,296)
|
Net (loss) income
before income taxes
|
|
(895,350)
|
|
598,210
|
|
(4,926,282)
|
|
(562,830)
|
Provision for income
taxes
|
|
325,781
|
|
243,884
|
|
949,657
|
|
730,916
|
Net (loss)
income
|
|
(1,221,131)
|
|
354,326
|
|
(5,875,939)
|
|
(1,293,746)
|
Preferred stock cash
dividends
|
|
-
|
|
96,424
|
|
-
|
|
289,272
|
Net (loss) income
attributable to common stockholders
|
|
$
|
(1,221,131)
|
|
$
|
257,902
|
|
$
|
(5,875,939)
|
|
$
|
(1,583,018)
|
|
|
|
|
|
|
|
|
|
Basic net (loss)
income per share:
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to common stockholders
|
|
$
|
(0.03)
|
|
$
|
0.01
|
|
$
|
(0.17)
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
Diluted net (loss)
income per share:
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to common stockholders
|
|
$
|
(0.03)
|
|
$
|
0.01
|
|
$
|
(0.17)
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared and paid per common share
|
|
$
|
-
|
|
$
|
0.025
|
|
$
|
-
|
|
$
|
0.075
|
|
|
|
|
|
|
|
|
|
Weighted average
basic shares outstanding
|
|
35,253,930
|
|
34,854,472
|
|
35,228,863
|
|
34,827,678
|
Weighted average effect of
dilutive securities:
|
|
|
|
|
|
|
|
|
Employee stock options and
restricted stock units
|
|
-
|
|
231,281
|
|
-
|
|
-
|
Weighted average
diluted shares outstanding
|
|
35,085,753
|
|
35,085,753
|
|
34,827,678
|
|
34,827,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to adjusted EBITDA - see note (1):
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(1,221,131)
|
|
$
|
354,326
|
|
$
|
(5,875,939)
|
|
$
|
(1,293,746)
|
Provision for income
taxes
|
|
325,781
|
|
243,884
|
|
949,657
|
|
730,916
|
Net interest
expense
|
|
12,179
|
|
30,891
|
|
24,273
|
|
97,296
|
Depreciation and
amortization
|
|
1,080,651
|
|
1,069,161
|
|
2,996,121
|
|
3,184,839
|
EBITDA
|
|
197,480
|
|
1,698,262
|
|
(1,905,888)
|
|
2,719,305
|
Restructuring and
other charges
|
|
(582,519)
|
|
(1,221,224)
|
|
960,491
|
|
(1,221,224)
|
Stock based
compensation
|
|
407,413
|
|
388,112
|
|
1,152,025
|
|
1,129,257
|
One-time sales tax
provision
|
|
-
|
|
-
|
|
1,365,198
|
|
-
|
Recovery of
previously impaired investment
|
|
(64,000)
|
|
(49,593)
|
|
(166,198)
|
|
(146,993)
|
Transaction related
costs
|
|
-
|
|
4,217
|
|
-
|
|
25,847
|
Adjusted
EBITDA
|
|
$
|
(41,626)
|
|
$
|
819,774
|
|
$
|
1,405,628
|
|
$
|
2,506,192
|
THESTREET,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
ASSETS
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
(unaudited)
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
23,945,895
|
|
$
|
28,445,416
|
Accounts receivable,
net of allowance for doubtful
|
|
|
|
|
accounts
of $276,825 at September 30, 2016 and $357,417 at
|
|
|
|
|
December
31, 2015
|
|
3,552,972
|
|
5,102,464
|
Other
receivables
|
|
517,800
|
|
790,148
|
Prepaid expenses and
other current assets
|
|
1,581,979
|
|
1,205,708
|
Restricted
cash
|
|
-
|
|
161,250
|
Total current
assets
|
|
29,598,646
|
|
35,704,986
|
Noncurrent
Assets:
|
|
|
|
|
Property and
equipment, net of accumulated depreciation
|
|
|
|
|
and
amortization of $5,435,212 at September 30, 2016
|
|
|
|
|
and
$4,804,411 at December 31, 2015
|
|
3,545,468
|
|
2,773,737
|
Marketable
securities
|
|
1,490,000
|
|
1,590,000
|
Other
assets
|
|
312,228
|
|
329,885
|
Goodwill
|
|
41,421,352
|
|
43,318,670
|
Other intangibles,
net of accumulated amortization of $17,787,509
|
|
|
|
|
at
September 30, 2016 and $15,674,328 at December 31, 2015
|
|
17,203,219
|
|
18,674,376
|
Restricted
cash
|
|
500,000
|
|
500,000
|
Total
assets
|
|
$
|
94,070,913
|
|
$
|
102,891,654
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
2,526,237
|
|
$
|
2,494,341
|
Accrued
expenses
|
|
5,032,398
|
|
5,161,981
|
Deferred
revenue
|
|
23,069,272
|
|
24,738,780
|
Other current
liabilities
|
|
916,970
|
|
1,235,551
|
Total current
liabilities
|
|
31,544,877
|
|
33,630,653
|
Noncurrent
Liabilities:
|
|
|
|
|
Deferred tax
liability
|
|
2,748,471
|
|
1,906,295
|
Other
liabilities
|
|
5,342,857
|
|
5,360,467
|
Total
liabilities
|
|
39,636,205
|
|
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 September 30, 2016 and December 31, 2015;
|
|
|
|
|
the
aggregate liquidation preference totals $55,000,000 as
of
|
|
|
|
|
September 30, 2016 and December 31, 2015
|
|
55
|
|
55
|
Common stock; $0.01
par value; 100,000,000 shares
|
|
|
|
|
authorized; 42,594,746 shares issued and 35,254,962
|
|
|
|
|
shares
outstanding at September 30, 2016, and 42,458,779
|
|
|
|
|
shares
issued and 35,123,132 shares outstanding at
|
|
|
|
|
December
31, 2015
|
|
425,947
|
|
424,588
|
Additional paid-in
capital
|
|
270,780,194
|
|
269,524,415
|
Accumulated other
comprehensive loss
|
|
(4,934,699)
|
|
(1,999,026)
|
Treasury stock at
cost; 7,339,784 shares at September 30, 2016
|
|
|
|
|
and
7,335,647 shares at December 31, 2015
|
|
(13,061,598)
|
|
(13,056,541)
|
Accumulated
deficit
|
|
(198,775,191)
|
|
(192,899,252)
|
Total stockholders'
equity
|
|
54,434,708
|
|
61,994,239
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
94,070,913
|
|
$
|
102,891,654
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited)
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30,
|
|
|
2016
|
|
2015
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
|
(5,875,939)
|
|
$
|
(1,293,746)
|
Adjustments to
reconcile net loss to net cash provided by
|
|
|
|
|
operating activities:
|
|
|
|
|
Stock-based
compensation expense
|
|
1,152,025
|
|
1,129,257
|
Provision for
doubtful accounts
|
|
(13,892)
|
|
172,066
|
Depreciation and
amortization
|
|
2,996,121
|
|
3,184,839
|
Deferred
taxes
|
|
842,176
|
|
541,323
|
Restructuring and
other charges
|
|
105,113
|
|
-
|
Deferred
rent
|
|
(547,350)
|
|
(245,849)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
1,465,800
|
|
185,448
|
Other receivables
|
|
266,451
|
|
(16,581)
|
Prepaid expenses and other current assets
|
|
(393,861)
|
|
(430,655)
|
Other assets
|
|
3,999
|
|
(57,629)
|
Accounts payable
|
|
40,502
|
|
(235,941)
|
Accrued expenses
|
|
(38,541)
|
|
(1,881,059)
|
Deferred revenue
|
|
(1,404,244)
|
|
(772,343)
|
Other current liabilities
|
|
(208,328)
|
|
(377,494)
|
Other liabilities
|
|
99,475
|
|
(1,401,092)
|
Net cash used in operating activities
|
|
(1,510,493)
|
|
(1,499,456)
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Sale and maturity of
marketable securities
|
|
-
|
|
2,005,484
|
Adjustment to
purchase of Management Diagnostics Limited
|
|
-
|
|
50,494
|
Restricted
cash
|
|
161,250
|
|
139,750
|
Capital
expenditures
|
|
(2,707,638)
|
|
(2,688,194)
|
Net cash used in investing activities
|
|
(2,546,388)
|
|
(492,466)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Cash dividends paid
on common stock
|
|
(12,492)
|
|
(2,663,771)
|
Cash dividends paid
on preferred stock
|
|
-
|
|
(289,272)
|
Proceeds from the
exercise of stock options
|
|
-
|
|
839
|
Shares withheld on
RSU vesting to pay for withholding taxes
|
|
(5,057)
|
|
(11,211)
|
Net cash used in financing activities
|
|
(17,549)
|
|
(2,963,415)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(425,091)
|
|
38,136
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(4,499,521)
|
|
(4,917,201)
|
Cash and cash
equivalents, beginning of period
|
|
28,445,416
|
|
32,459,009
|
Cash and cash
equivalents, end of period
|
|
$
|
23,945,895
|
|
$
|
27,541,808
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to free cash flow - see note (1):
|
|
|
|
Net loss
|
|
$
|
(5,875,939)
|
|
$
|
(1,293,746)
|
Noncash
expenditures
|
|
4,534,193
|
|
4,781,636
|
Changes in operating
assets and liabilities
|
|
(168,747)
|
|
(4,987,346)
|
Capital
expenditures
|
|
(2,707,638)
|
|
(2,688,194)
|
Free cash
flow
|
|
$
|
(4,218,131)
|
|
$
|
(4,187,650)
|
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SOURCE TheStreet, Inc.