NEW YORK, May 9, 2017 /PRNewswire/ -- TheStreet, Inc. (Nasdaq: TST) a leading financial news and information company, today reported financial results for the first quarter ended March 31, 2017. 

TheStreet Logo.

For the first quarter of 2017, the Company reported revenue of $15.3 million, net loss attributable to common stockholders of $1.1 million, or ($0.03) per basic and diluted share, and an Adjusted EBITDA(1) of $0.8 million. The first quarter net loss included planned restructuring and other charges related to severance, as well as lower premium subscription revenue, partially offset by revenue growth generated by our institutional business and savings from restructuring and cost cutting measures implemented during 2016.

"The turnaround we've been talking about for months began to show results in the first quarter," said David Callaway, President and CEO. "Rising institutional revenue, tapering declines in consumer subscriptions, and renewed interest in our improved news coverage from advertisers, particularly in video, are reflecting our new management team's hard work during 2016." David Callaway continued, "This is just the beginning, and we look forward to showing continued improvement in the next three quarters."

First Quarter Results

Revenue for the first quarter of 2017 was $15.3 million, a decrease of $0.8 million, or 5%, from $16.1 million in the prior year, all related to Business-to-consumer ("B2C") revenue declines.

Business-to-Business Revenue

Business-to-business ("B2B") revenue including The Deal, BoardEx and RateWatch totaled $7.4 million, up $0.3 million as compared to the first quarter of 2016.  Adjusting for the exchange rate losses, B2B revenue was up 7% compared to the first quarter of 2016.

Strong B2B revenue growth resulted from subscription revenue growth in BoardEx and RateWatch of $0.2 million and higher event revenue of $0.1 million generated at The Deal. In addition, information services grew modestly from The Deal custom report revenue. This was partially offset by lower subscription income in The Deal during the quarter.  Year-over-year growth in revenue was partially offset by exchange rate losses at BoardEx due to the devaluation of the Pound sterling, which negatively impacted BoardEx revenue by $0.2 million. Adjusted for the negative exchange rate impact, total B2B revenue increased $0.5 million, or 7%.

Business-to-Consumer Revenue

B2C revenue for the first quarter of 2017 was $7.9 million, a decrease of $1.0 million, or 12%, from $8.9 million in the first quarter of 2016

B2C subscription revenue for the first quarter of 2017 was $5.1 million, a decrease of $1.0 million, or 17%, from $6.1 million in the first quarter of 2016.  This decrease primarily related to a 16% decline in the weighted-average number of subscriptions and a decrease of 1% in average revenue recognized per subscription.  Average monthly churn (2) of 4.94% during the first quarter of 2017 improved 64 BP from 5.58% during the first quarter of 2016. B2C Advertising revenue grew $0.1 million for the first quarter of 2017 as compared to the same period last year, offset by lower License and Syndication revenue of the same amount between these periods.

Operating expenses for the first quarter of 2017 were $16.2 million, a decrease of $3.0 million, or 16%, from $19.2 million for the first quarter of last year.  Included in expenses this year were planed severance expense of $0.2 million as compared to severance expense recorded during the first quarter of 2016 of $0.1 million, a $1.4 million charge related to the departure of former CEO and President, Elisabeth DeMarse, as well as $1.2 million in accrued sales tax expenses. Excluding these one-time charges, operating expenses were $16.0 million, or 3% better than the prior year period.  Net loss attributable to common stockholders for the first quarter of 2017 was $1.1 million compared to net loss attributable to common stockholders of $3.4 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 first quarter of 2017, compared to net loss per share attributable to common stockholders of ($0.10) for the first quarter of 2016.  Adjusted EBITDA for the first quarter of 2017 was $0.8 million, an increase $24 thousand, or 3% compared to the prior year period. The Increase in Adjusted EBITDA primarily resulted from the higher BoardEx and RateWatch revenues and lower expenses in all categories partially offset by lower premium subscription and licensing and syndication revenues within the B2C business.

The Company ended the quarter with cash and cash equivalents, restricted cash and marketable securities of $24.6 million, up $1.2 million as compared to $23.4 million at December 31, 2016 primarily from a reduced net loss for the period and seasonably strong first quarter renewals of subscription product sales, partially offset by the timing of accrued expense payments and capital expenditures recorded during the period.

Conference Call Information

TheStreet will discuss its financial results for the first quarter today at 10:30 a.m. EDT.

To participate in the call, please dial 888-503-8163 (domestic) or 719-457-2603 (international). The conference code is 9300554. 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" and "Adjusted EBITDA", 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, impairment charges, restructuring, transaction related costs, severance 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) Average monthly churn 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 2017.  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 BALANCE SHEETS






ASSETS


March 31, 2017


December 31, 2016



(unaudited)



Current Assets:





Cash and cash equivalents


$    22,661,634


$          21,371,122

Accounts receivable, net of allowance for doubtful accounts of





   $316,250 at March 31, 2017 and $316,204 at December 31, 2016


5,052,019


5,119,959

Other receivables


376,761


358,266

Prepaid expenses and other current assets


1,459,160


1,416,956

      Total current assets


29,549,574


28,266,303

Noncurrent Assets:





Property and equipment, net of accumulated depreciation and





   amortization of $5,951,293 at March 31, 2017 and $5,682,286 at





  December 31, 2016


3,234,397


3,550,007

Marketable securities


1,443,000


1,550,000

Other assets


306,972


285,843

Goodwill


29,308,594


29,183,141

Other intangibles, net of accumulated amortization of $20,953,514





   at March 31, 2017 and $20,134,178 at December 31, 2016


14,922,730


15,127,818

Restricted cash


500,000


500,000

      Total assets


$    79,265,267


$          78,463,112






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Accounts payable


$      2,594,444


$           2,526,034

Accrued expenses


3,500,680


5,115,558

Deferred revenue 


25,306,705


22,476,962

Other current liabilities


986,992


983,799

      Total current liabilities


32,388,821


31,102,353

Noncurrent Liabilities:





Deferred tax liability


2,184,759


2,036,487

Other liabilities


3,195,367


3,274,816

      Total liabilities


37,768,947


36,413,656






Stockholders' Equity:





Preferred stock; $0.01 par value; 10,000,000 shares authorized;





   5,500 shares issued and 5,500 shares outstanding at March 31, 2017





   and December 31, 2016; the aggregate liquidation preference totals





   $55,000,000 as of March 31, 2017 and December 31, 2016


55


55

Common stock; $0.01 par value; 100,000,000 shares authorized;





   43,144,093 shares issued and 35,628,317 shares outstanding at





   March 31, 2017, and 42,936,906 shares issued and 35,421,217





   shares outstanding at December 31, 2016


431,441


429,369

Additional paid-in capital


271,538,200


271,143,445

Accumulated other comprehensive loss


(5,720,753)


(5,898,305)

Treasury stock at cost; 7,515,776 shares at March 31, 2017





   and 7,515,689 shares at December 31, 2016


(13,211,216)


(13,211,141)

Accumulated deficit


(211,541,407)


(210,413,967)

      Total stockholders' equity


41,496,320


42,049,456






      Total liabilities and stockholders' equity


$    79,265,267


$          78,463,112

 

 

THESTREET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS









For the Three Months Ended



March 31,



2017


2016

Revenue:


unaudited

Business to business


$     7,387,239


$     7,132,800

Business to consumer


7,893,198


8,936,632

   Total revenue


15,280,437


16,069,432






Operating expense:





Cost of services (exclusive of depreciation and amortization shown
separately below)


7,281,429


7,886,556

Sales and marketing


3,543,352


3,884,426

General and administrative


4,026,052


5,113,906

Depreciation and amortization


1,179,532


943,156

Restructuring and other charges


198,979


1,380,052

     Total operating expense


16,229,344


19,208,096

     Operating loss


(948,907)


(3,138,664)

Net interest income (expense)


7,771


(495)

Net loss before income taxes


(941,136)


(3,139,159)

Provision for income taxes


186,304


305,128

Net loss attributable to common stockholders


$   (1,127,440)


$   (3,444,287)






Basic and diluted net loss per share:





     Net loss attributable to common stockholders


$           (0.03)


$           (0.10)






Cash dividends declared and paid per common share


$               -


$               -






Weighted average basic and diluted shares outstanding


35,558,371


35,197,955
















Reconciliation of net loss to adjusted EBITDA - see note (1):





Net loss


$   (1,127,440)


$   (3,444,287)

Provision for income taxes


186,304


305,128

Net interest expense


(7,771)


495

Depreciation and amortization


1,179,532


943,156

EBITDA


230,625


(2,195,508)

Restructuring and other charges


198,979


1,380,052

Stock based compensation


396,242


363,128

One-time sales tax provision


-


1,245,000

Recovery of previously impaired investment


-


(50,800)

Severance


-


60,223

Adjusted EBITDA


$       825,846


$       802,095

 

 

THESTREET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS








For the Three Months Ended March 31,



2017


2016

Cash Flows from Operating Activities:





Net loss


$          (1,127,440)


$          (3,444,287)

Adjustments to reconcile net loss to net cash provided by





   operating activities:





Stock-based compensation expense


396,242


363,128

Provision for (recovery of) doubtful accounts


25,861


(56,454)

Depreciation and amortization


1,179,532


943,156

Deferred taxes


148,272


280,726

Restructuring and other charges


-


105,113

Deferred rent


(131,306)


31,830

Changes in operating assets and liabilities:





    Accounts receivable 


50,934


1,661,128

    Other receivables


(18,360)


210,202

    Prepaid expenses and other current assets


(38,485)


40,331

    Other assets


(10,521)


4,602

    Accounts payable


67,479


403,023

    Accrued expenses


(1,575,459)


386,873

    Deferred revenue


2,818,539


1,385,980

    Other current liabilities 


18,080


(148,288)

    Other liabilities


11,052


33,159

          Net cash provided by operating activities


1,814,420


2,200,222






Cash Flows from Investing Activities:





Capital expenditures


(553,109)


(718,818)

          Net cash used in investing activities


(553,109)


(718,818)






Cash Flows from Financing Activities:





Cash dividends paid on common stock


(68,245)


(10,221)

Shares withheld on RSU vesting to pay for withholding taxes


(74)


(1,188)

          Net cash used in financing activities


(68,319)


(11,409)






Effect of exchange rate changes on cash and cash equivalents

97,520


(83,653)






Net increase in cash and cash equivalents


1,290,512


1,386,342

Cash and cash equivalents, beginning of period


21,371,122


28,445,416

Cash and cash equivalents, end of period


$          22,661,634


$          29,831,758











Reconciliation of net loss to free cash flow - see note (1):




Net loss


$          (1,127,440)


$          (3,444,287)

Noncash expenditures


1,618,601


1,667,499

Changes in operating assets and liabilities


1,323,259


3,977,010

Capital expenditures


(553,109)


(718,818)

Free cash flow


$            1,261,311


$            1,481,404

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/thestreet-reports-first-quarter-2017-results-300453822.html

SOURCE TheStreet, Inc.

Copyright 2017 PR Newswire

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