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.
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.