NEW YORK, Aug. 1, 2017 /PRNewswire/ -- TheStreet,
Inc. (Nasdaq: TST) a leading financial news and information
company, today reported financial results for the second quarter
ended June 30, 2017.
For the second quarter of 2017, the Company reported revenue of
$16.0 million, net income
attributable to common stockholders of $0.3
million, or $0.01 per basic
and diluted share, and an Adjusted EBITDA(1) of
$2.2 million. The second quarter net
income reflects our implemented costs controls which resulted in
declines in almost all operating expense categories partially
offset by a revenue decline of $0.3
million (primarily from Business-to-Consumer ("B2C")
subscription revenue) and higher depreciation and amortization
expense from infrastructure investments during 2016 and 2017.
"Our turnaround is gaining momentum," said David Callaway, President and CEO. "Costs are
down. Cash is up. B2B revenue, and importantly deferred revenue,
continues to rise, and our news coverage is attracting advertisers.
On the subscription side, we're paring losses and seeing
improvement each week."
Second Quarter Results
Revenue for the second quarter of 2017 was $16.0 million, a decrease of $0.3 million, or 2%, from $16.3 million in the prior year reflecting
revenue declines in premium subscriptions and licensing &
syndication. This represents an improvement from the first quarter
of 2017 where revenue declined $0.8
million, or 5% as compared to the same quarter of the prior
year.
Business-to-Business Revenue
Business-to-business ("B2B") revenue including The Deal, BoardEx
and RateWatch totaled $7.9 million,
up $0.3 million, or 4%, compared to
the second quarter of 2016. Adjusting for foreign translation
changes, B2B revenue was up $0.5
million, or 6% compared to the second quarter of 2016.
The gain in B2B revenue was primarily due to the continued
growth of BoardEx subscription revenue, which increased by
$0.3 million in the quarter.
RateWatch revenue also increased $0.1
million, or 8% due to growth in both information services
revenue (custom reports) and subscription revenue. B2B revenue was
negatively impacted by lower subscription, Information service and
licensing revenue for The Deal, which decreased $0.1 million for second quarter of 2017 as
compared to the same quarter last year. Year-over-year growth in
B2B revenue was also partially offset by foreign currency
translation changes due to the devaluation of the Pound sterling,
which negatively impacted BoardEx revenue by $0.1 million.
Business-to-Consumer Revenue
B2C revenue for the second quarter of 2017 was $8.1 million, a decrease of $0.7 million, or 7%, from $8.8 million in the second quarter of 2016.
B2C subscription revenue for the second quarter of 2017 was
$5.0 million, a decrease of
$0.7 million, or 13%, as compared to
the second quarter of 2016. This decrease was primarily due
to a 15% decline in the weighted-average number of subscriptions
offset by an increase of 2% in the average revenue recognized per
subscription. Average monthly churn (2) of 4.67%
during the second quarter of 2017 improved 31 BP from 4.98% during
the second quarter of 2016 and 27 BP from the first quarter of
2017. Licensing and syndication revenue also declined $0.1 million in the second quarter of 2017 as
compared to the same quarter last year.
B2C advertising revenue grew $0.1
million for the second quarter of 2017 as compared to the
same period in 2016 due to an increased number of effective
marketing programs with better CPM margins. In addition, Event
revenue in the second quarter of 2017 totaled $0.1 million as TheStreet.com hosted two events
with Jim Cramer. No like revenue was
earned during the second quarter of 2016.
Operating Expense, Net Results and Liquidity
Operating expenses for the second quarter of 2017 were
$15.4 million, $1.7 million, or 10% less than the $17.2 million in operating expenses incurred in
the second quarter of 2016. Excluding the second quarter 2016
one-time restructuring and sales tax provision charges of
$0.3 million, operating expenses for
the second quarter 2017 were better by $1.5
million, or 9%. Savings were realized primarily in Cost of
services and Sales and marketing expense. These savings included
lower salary, and other benefits realized from the restructuring of
the business along with a controlled reduction of outside services,
primarily non-employee reporters, revenue share contributors,
search engine marketing, public relations and consulting.
Net Income attributable to common stockholders for the second
quarter of 2017 was $0.3 million
compared to a net loss attributable to common stockholders of
$1.2 million in the prior year
period. The Company reported a basic and diluted net income per
share attributable to common stockholders of $0.01 for the second quarter of 2017, compared to
net loss per share attributable to common stockholders of
($0.03) for the second quarter of
2016. Adjusted EBITDA for the second quarter of 2017 was
$2.2 million, an increase
$1.5 million, or 215% compared to the
prior year period. This increase in Adjusted EBITDA primarily
resulted from higher BoardEx, RateWatch and TheStreet events
revenues, along with managed expense reductions in all categories.
This was partially offset by lower premium subscription and
licensing & syndication revenues within the B2C business.
The Company ended the second quarter with cash and cash
equivalents, restricted cash and marketable securities of
$25.4 million, up $2.0 million, or 9% as compared to $23.4 million at December
31, 2016 primarily from a smaller net loss for the period
and significant favorable movement in deferred revenue in both B2B
and B2C segments. This was partially offset by reductions in
accounts payables and accrued expenses along with planned capital
expenditures recorded during the period.
Conference Call Information
TheStreet will discuss its financial results for the second
quarter today (August 1st) at
10:00 a.m. EDT.
To participate in the call, please dial
888-394-8218 (domestic) or 323-701-0225 (international). The
conference code is 7987305. 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
|
|
June 30,
2017
|
|
December 31,
2016
|
|
|
(unaudited)
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
23,384,260
|
|
$
21,371,122
|
Accounts receivable,
net of allowance for doubtful accounts of
|
|
|
|
|
$317,781
at June 30, 2017 and $316,204 at December 31, 2016
|
|
4,431,153
|
|
5,119,959
|
Other
receivables
|
|
388,383
|
|
358,266
|
Prepaid expenses and
other current assets
|
|
2,094,437
|
|
1,416,956
|
Total current
assets
|
|
30,298,233
|
|
28,266,303
|
Noncurrent
Assets:
|
|
|
|
|
Property and
equipment, net of accumulated depreciation and
|
|
|
|
|
amortization of $5,168,588 at June 30, 2017 and $5,682,286
at
|
|
|
|
|
December 31,
2016
|
|
3,079,372
|
|
3,550,007
|
Marketable
securities
|
|
1,544,750
|
|
1,550,000
|
Other
assets
|
|
301,406
|
|
285,843
|
Goodwill
|
|
29,736,463
|
|
29,183,141
|
Other intangibles,
net of accumulated amortization of $22,093,107
|
|
|
|
|
at June
30, 2017 and $20,134,178 at December 31, 2016
|
|
14,778,676
|
|
15,127,818
|
Restricted
cash
|
|
500,000
|
|
500,000
|
Total
assets
|
|
$
80,238,900
|
|
$
78,463,112
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
2,016,502
|
|
$
2,526,034
|
Accrued
expenses
|
|
3,529,819
|
|
5,115,558
|
Deferred
revenue
|
|
25,172,033
|
|
22,476,962
|
Other current
liabilities
|
|
1,906,864
|
|
983,799
|
Total current
liabilities
|
|
32,625,218
|
|
31,102,353
|
Noncurrent
Liabilities:
|
|
|
|
|
Deferred tax
liability
|
|
2,333,031
|
|
2,036,487
|
Other
liabilities
|
|
2,223,436
|
|
3,274,816
|
Total
liabilities
|
|
37,181,685
|
|
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 June 30,
2017
|
|
|
|
|
and
December 31, 2016; the aggregate liquidation preference
totals
|
|
|
|
|
$55,000,000 at June 30, 2017 and December 31, 2016
|
|
55
|
|
55
|
Common stock; $0.01
par value; 100,000,000 shares authorized;
|
|
|
|
|
43,394,376 shares issued and 35,865,207 shares outstanding
at
|
|
|
|
|
June 30,
2017, and 42,936,906 shares issued and 35,421,217
|
|
|
|
|
shares
outstanding at December 31, 2016
|
|
433,944
|
|
429,369
|
Additional paid-in
capital
|
|
271,944,485
|
|
271,143,445
|
Accumulated other
comprehensive loss
|
|
(4,903,214)
|
|
(5,898,305)
|
Treasury stock at
cost; 7,529,169 shares at June 30, 2017
|
|
|
|
|
and
7,515,689 shares at December 31, 2016
|
|
(13,221,392)
|
|
(13,211,141)
|
Accumulated
deficit
|
|
(211,196,663)
|
|
(210,413,967)
|
Total stockholders'
equity
|
|
43,057,215
|
|
42,049,456
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
80,238,900
|
|
$
78,463,112
|
|
|
|
|
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30,
|
|
For the Six Months
Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
|
|
Business to
business
|
|
$
7,854,947
|
|
$
7,531,159
|
|
$
15,242,186
|
|
$
14,663,959
|
Business to
consumer
|
|
8,104,658
|
|
8,761,368
|
|
15,997,856
|
|
17,698,000
|
Total
revenue
|
|
15,959,605
|
|
16,292,527
|
|
31,240,042
|
|
32,361,959
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
6,704,622
|
|
8,144,877
|
|
13,986,051
|
|
16,031,433
|
Sales and
marketing
|
|
3,577,821
|
|
4,013,161
|
|
7,121,173
|
|
7,897,587
|
General and
administrative
|
|
3,852,452
|
|
3,879,391
|
|
7,878,504
|
|
8,993,297
|
Depreciation and
amortization
|
|
1,302,493
|
|
972,314
|
|
2,482,025
|
|
1,915,470
|
Restructuring and
other charges
|
|
-
|
|
162,958
|
|
198,979
|
|
1,543,010
|
Total operating
expense
|
|
15,437,388
|
|
17,172,701
|
|
31,666,732
|
|
36,380,797
|
Operating income
(loss)
|
|
522,217
|
|
(880,174)
|
|
(426,690)
|
|
(4,018,838)
|
Net interest income
(expense)
|
|
10,285
|
|
(11,599)
|
|
18,056
|
|
(12,094)
|
Net income (loss)
before income taxes
|
|
532,502
|
|
(891,773)
|
|
(408,634)
|
|
(4,030,932)
|
Provision for income
taxes
|
|
187,758
|
|
318,748
|
|
374,062
|
|
623,876
|
Net income (loss)
attributable to common stockholders
|
|
$
344,744
|
|
$
(1,210,521)
|
|
$
(782,696)
|
|
$
(4,654,808)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic net income (loss)
attributable to common stockholders
|
|
$
0.01
|
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.13)
|
Diluted net income (loss)
attributable to common stockholders
|
|
$
0.01
|
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.13)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
Basic shares outstanding
|
|
35,698,603
|
|
35,234,429
|
|
35,628,874
|
|
35,216,192
|
Diluted shares outstanding
|
|
35,803,117
|
|
35,234,429
|
|
35,628,874
|
|
35,216,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to adjusted EBITDA - see note (1):
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
344,744
|
|
$
(1,210,521)
|
|
$
(782,696)
|
|
$
(4,654,808)
|
Provision for income
taxes
|
|
187,758
|
|
318,748
|
|
374,062
|
|
623,876
|
Net interest income
(expense)
|
|
(10,285)
|
|
11,599
|
|
(18,056)
|
|
12,094
|
Depreciation and
amortization
|
|
1,302,493
|
|
972,314
|
|
2,482,025
|
|
1,915,470
|
EBITDA
|
|
1,824,710
|
|
92,140
|
|
2,055,335
|
|
(2,103,368)
|
Restructuring and
other charges
|
|
-
|
|
162,958
|
|
198,979
|
|
1,543,010
|
Stock based
compensation
|
|
408,788
|
|
381,502
|
|
805,030
|
|
744,612
|
Severance
|
|
7,255
|
|
5,775
|
|
98,129
|
|
65,998
|
One-time sales tax
provision
|
|
-
|
|
120,198
|
|
-
|
|
1,365,198
|
Recovery of
previously impaired investment
|
|
-
|
|
(51,398)
|
|
-
|
|
(102,198)
|
Adjusted
EBITDA
|
|
$
2,240,753
|
|
$
711,175
|
|
$
3,157,473
|
|
$
1,513,252
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited)
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30,
|
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(782,696)
|
|
$
(4,654,808)
|
Adjustments to
reconcile net loss to net cash provided by
|
|
|
|
|
operating activities:
|
|
|
|
|
Stock-based
compensation expense
|
|
805,030
|
|
744,612
|
Provision for
doubtful accounts
|
|
37,923
|
|
(33,487)
|
Depreciation and
amortization
|
|
2,482,025
|
|
1,915,470
|
Deferred
taxes
|
|
296,544
|
|
561,451
|
Restructuring and
other charges
|
|
-
|
|
105,113
|
Deferred
rent
|
|
(263,067)
|
|
59,960
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
690,768
|
|
565,073
|
Other receivables
|
|
(29,548)
|
|
320,457
|
Prepaid expenses and other current assets
|
|
(669,144)
|
|
(493,501)
|
Other assets
|
|
(3,433)
|
|
2,868
|
Accounts payable
|
|
(512,932)
|
|
76,692
|
Accrued expenses
|
|
(1,553,138)
|
|
485,575
|
Deferred revenue
|
|
2,602,825
|
|
1,241,539
|
Other current liabilities
|
|
(3,912)
|
|
(254,993)
|
Other liabilities
|
|
22,105
|
|
66,317
|
Net cash provided by operating activities
|
|
3,119,350
|
|
708,338
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Capital
expenditures
|
|
(1,293,417)
|
|
(1,612,899)
|
Net cash used in investing activities
|
|
(1,293,417)
|
|
(1,612,899)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Cash dividends paid
on common stock
|
|
(68,245)
|
|
(11,929)
|
Shares withheld on
RSU vesting to pay for withholding taxes
|
|
(10,251)
|
|
(4,784)
|
Net cash used in financing activities
|
|
(78,496)
|
|
(16,713)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
265,701
|
|
(358,920)
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
2,013,138
|
|
(1,280,194)
|
Cash and cash
equivalents, beginning of period
|
|
21,371,122
|
|
28,445,416
|
Cash and cash
equivalents, end of period
|
|
$
23,384,260
|
|
$
27,165,222
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to free cash flow - see note (1):
|
|
|
|
Net loss
|
|
$
(782,696)
|
|
$
(4,654,808)
|
Noncash
expenditures
|
|
3,358,455
|
|
3,353,119
|
Changes in operating
assets and liabilities
|
|
543,591
|
|
2,010,027
|
Capital
expenditures
|
|
(1,293,417)
|
|
(1,612,899)
|
Free cash
flow
|
|
$
1,825,933
|
|
$
(904,561)
|
|
|
|
|
|
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multimedia:http://www.prnewswire.com/news-releases/thestreet-reports-second-quarter-2017-results-300497417.html
SOURCE TheStreet, Inc.