NEW YORK, Nov. 13, 2017 /PRNewswire/ --
- GAAP net income attributable to common stockholders totaled
$0.2 million, or $0.01 per share, versus a net loss attributable
to common stockholders of $1.2
million, or ($0.03) per share
in the prior year period.
- Adjusted EBITDA of $2.1
million increased $2.0 million
as compared to the third quarter of 2016.
- Cash, cash equivalents, restricted cash and marketable
securities of $26.1 million increased
$2.7 million as compared to
December 31, 2016 and up $0.7 million from June 30,
2017.
- Revenue totaled $15.3 million
in the third quarter of 2017 as compared to $15.2 million for the same period last
year.
- Business-to-Business Revenue of $7.9
million, up $0.7 million, or
9% year-over-year.
- Business-to-Business revenue continues to grow making up 52%
of total revenue in the third quarter of 2017 as compared to 47%
for the same period last year.
- Business-to-Consumer Revenue of $7.4
million, down $0.6 million, or
8% year-over-year.
- Consumer Advertising remains strong up 2%
year-over-year.
- Operating expense for the third quarter of 2017 was
$15.0 million, an improvement of
$1.1 million, or 7%, from
$16.1 million for the third quarter
of last year.
![TheStreet Logo. TheStreet Logo.](https://mma.prnewswire.com/media/602498/TheStreet_logo.jpg)
TheStreet, Inc. (Nasdaq: TST) a leading financial news and
information company, today reported financial results for the third
quarter ended September 30,
2017.
For the third quarter of 2017, the Company reported revenue of
$15.3 million, net income
attributable to common stockholders of $0.2
million, or $0.01 per share,
and an Adjusted EBITDA(1) of $2.1
million. The third quarter net income reflects declines in
cost of services, sales and marketing and general and
administrative expenses, partially offset by higher depreciation
and amortization expense from infrastructure buildout during 2016
and year to date 2017.
"This is the second consecutive quarter that we have had net
income," said David Callaway,
President and CEO. "Our turnaround plan has taken hold. With the
confidence of our newest investor, 180 Capital, and finalized
contract negotiations with Jim
Cramer, we are set for continued growth on the top and
bottom line of the business."
Third Quarter Results
Revenue for the third quarter of 2017 was $15.3 million, as compared to $15.2 million for the third quarter of 2016.
Growth in Business to Business ("B2B") revenue of $0.7 million partially offset by declines in
Business to Consumer ("B2C") revenue of $0.6
million (primarily from premium subscription products).
Business-to-Business Revenue
B2B revenue including The Deal, BoardEx and RateWatch totaled
$7.9 million, up $0.7 million, or 9%, compared to the third
quarter of 2016. Adjusting for foreign translation changes,
B2B revenue was up 8% compared to the third quarter of 2016.
The gain in B2B revenue resulted from higher BoardEx
subscription revenue, which increased by $0.7 million, or 29%, resulting from a 10%
increase in the weighted-average number of subscriptions as well as
a 19% increase in the average revenue recognized per subscription.
In addition, RateWatch subscription revenue increased $0.1 million, or 8%, due to a 12% increase in the
average revenue recognized per subscription partially offset by a
4% decline in the weighted-average number of subscriptions.
These gains were partially offset by lower subscription,
event, information service and licensing revenue for The Deal,
which decreased $0.2 million.
Business-to-Consumer Revenue
B2C revenue for the third quarter of 2017 was $7.4 million, a decrease of $0.6 million, or 8%, from $8.0 million in the third quarter of 2016.
B2C subscription revenue for the third quarter of 2017 was
$4.9 million, a decrease of
$0.6 million, or 12%, as compared to
the third quarter of 2016. This decrease was primarily due to
a 14% 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 4.22%
during the third quarter of 2017 improved 57 basis points ("BP")
from 4.79% during the third quarter of 2016 and 45 BP from the
second quarter of 2017. In addition, licensing and syndication
revenue of $296 thousand declined 8%
in the third quarter of 2017 as compared to the same quarter last
year.
B2C advertising revenue grew 2% for the third quarter of 2017 as
compared to the same period in 2016 due to increased sales to
repeat customers from effective marketing programs and better CPM
margins.
Operating Expense, Net Results and Liquidity
Operating expenses for the third quarter of 2017 were
$15.0 million, $1.1 million, or 7% less than the $16.1 million in operating expenses incurred in
the third quarter last year. Excluding the third quarter 2016
one-time restructuring benefit from a lease termination related to
The Deal's office space of $0.6
million and other one-time severance related costs,
operating expenses for the third quarter 2017 were better by
$1.6 million, or 10%. Savings were
realized in cost of services, sales and marketing and general and
administrative expenses. These savings included lower salary and
other benefits realized from the restructuring of the business in
2016, a controlled reduction of outside services, primarily
non-employee reporters and revenue share contributors, and online
advertising.
Net Income attributable to common stockholders for the third
quarter of 2017 was $0.2 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 third quarter of 2017, compared to
a net loss per share attributable to common stockholders of
($0.03) for the third quarter of
2016. Adjusted EBITDA for the third quarter of 2017 was
$2.1 million, an increase
$2.0 million compared to the prior
year period. The increase in Adjusted EBITDA primarily resulted
from strong BoardEx and RateWatch subscription revenue along with
managed expense reductions in all categories. This was partially
offset by lower premium subscription, licensing & syndication
and timing of event revenues within the businesses.
The Company ended the third quarter with cash and cash
equivalents, restricted cash and marketable securities of
$26.1 million, up $2.7 million, or 11% as compared to $23.4 million at December
31, 2016 primarily from a smaller net loss for the period,
strong upward movement in deferred revenue in the B2B and B2C
segments and slightly reduced capital expenditures. This was
partially offset by reductions in accounts payable, accrued
expenses and an increase in accounts receivable.
Share Repurchase Program
The Company also announced today that its Board of Directors has
approved a new share buyback program authorizing the repurchase of
up to 5 million shares of the Company's common stock, which equates
to approximately 10% of the shares outstanding following the
preferred stock exchange and common stock financing also announced
today. Purchases may be made in the open market or in privately
negotiated transactions as deemed appropriate by management. The
Company may, among other things, utilize existing cash reserves and
cash flows from operations to fund any repurchases. The timing and
amount of any repurchases will be determined by the Company's
management based upon its evaluation of the trading prices of the
securities, market conditions and other factors. The repurchase
program does not obligate the Company to repurchase any dollar
amount or number of shares and may be extended, modified, suspended
or discontinued at any time.
Conference Call Information
TheStreet will discuss its financial results for the third
quarter today (November 13th) at
10:30 a.m. EDT.
To participate in the call, please dial 877-604-9673 (domestic)
or 719-325-4765 (international). The conference code is 6480352.
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. (NASDAQ: TST, www.t.st) is a leading
financial news and information provider to investors and
institutions worldwide. The Company's namesake
brand, TheStreet (www.thestreet.com), is in its third
decade of producing unbiased business news and market analysis
for individual investors. The Company's portfolio of institutional
brands includes The Deal (www.thedeal.com), which provides
actionable, intraday coverage of mergers, acquisitions and all
other changes in corporate control; BoardEx (www.boardex.com), a
relationship mapping service of corporate directors and officers;
and RateWatch (www.rate-watch.com), which supplies rate and fee
data from banks and credit unions across the U.S.
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, potential repurchases of our common stock
and expectations for continued growth. 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.
Contact: 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
|
|
September 30,
2017
|
|
December 31,
2016
|
|
|
(unaudited)
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
23,990,179
|
|
$
21,371,122
|
Accounts receivable,
net of allowance for doubtful accounts of
|
|
|
|
|
$331,793
at September 30, 2017 and $316,204 at December 31, 2016
|
|
4,809,393
|
|
5,119,959
|
Other
receivables
|
|
309,832
|
|
358,266
|
Prepaid expenses and
other current assets
|
|
2,014,597
|
|
1,416,956
|
Total current
assets
|
|
31,124,001
|
|
28,266,303
|
Noncurrent
Assets:
|
|
|
|
|
Property and
equipment, net of accumulated depreciation and
|
|
|
|
|
amortization of $5,420,056 at September 30, 2017 and $5,682,286
at
|
|
|
|
|
December 31,
2016
|
|
2,834,366
|
|
3,550,007
|
Marketable
securities
|
|
1,600,250
|
|
1,550,000
|
Other
assets
|
|
302,091
|
|
285,843
|
Goodwill
|
|
29,408,292
|
|
29,183,141
|
Other intangibles,
net of accumulated amortization of $22,545,755
|
|
|
|
|
at
September 30, 2017 and $20,134,178 at December 31, 2016
|
|
14,399,003
|
|
15,127,818
|
Restricted
cash
|
|
500,000
|
|
500,000
|
Total
assets
|
|
$
80,168,003
|
|
$
78,463,112
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
2,189,424
|
|
$
2,526,034
|
Accrued
expenses
|
|
3,563,019
|
|
5,115,558
|
Deferred
revenue
|
|
24,338,054
|
|
22,476,962
|
Other current
liabilities
|
|
1,906,511
|
|
983,799
|
Total current
liabilities
|
|
31,997,008
|
|
31,102,353
|
Noncurrent
Liabilities:
|
|
|
|
|
Deferred tax
liability
|
|
2,481,303
|
|
2,036,487
|
Other
liabilities
|
|
2,146,454
|
|
3,274,816
|
Total
liabilities
|
|
36,624,765
|
|
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 September 30,
2017
|
|
|
|
|
and
December 31, 2016; the aggregate liquidation preference
totals
|
|
|
|
|
$55,000,000 at September 30, 2017 and December 31, 2016
|
|
55
|
|
55
|
Common stock; $0.01
par value; 100,000,000 shares authorized;
|
|
|
|
|
43,404,372 shares issued and 35,872,589 shares outstanding
at
|
|
|
|
|
September 30, 2017, and 42,936,906 shares issued and
35,421,217
|
|
|
|
|
shares
outstanding at December 31, 2016
|
|
434,044
|
|
429,369
|
Additional paid-in
capital
|
|
272,345,333
|
|
271,143,445
|
Accumulated other
comprehensive loss
|
|
(5,005,790)
|
|
(5,898,305)
|
Treasury stock at
cost; 7,531,783 shares at September 30, 2017
|
|
|
|
|
and
7,515,689 shares at December 31, 2016
|
|
(13,223,610)
|
|
(13,211,141)
|
Accumulated
deficit
|
|
(211,006,794)
|
|
(210,413,967)
|
Total stockholders'
equity
|
|
43,543,238
|
|
42,049,456
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
80,168,003
|
|
$
78,463,112
|
|
|
|
|
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
|
|
Business to
business
|
|
$
7,870,124
|
|
$
7,215,910
|
|
$
23,112,310
|
|
$
21,879,869
|
Business to
consumer
|
|
7,382,672
|
|
7,997,944
|
|
23,380,528
|
|
25,695,944
|
Total
revenue
|
|
15,252,796
|
|
15,213,854
|
|
46,492,838
|
|
47,575,813
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
6,645,804
|
|
7,924,852
|
|
20,631,855
|
|
23,956,285
|
Sales and
marketing
|
|
3,077,783
|
|
3,736,815
|
|
10,198,956
|
|
11,634,402
|
General and
administrative
|
|
3,882,898
|
|
3,937,226
|
|
11,761,402
|
|
12,930,523
|
Depreciation and
amortization
|
|
1,352,760
|
|
1,080,651
|
|
3,834,785
|
|
2,996,121
|
Restructuring and
other charges
|
|
-
|
|
(582,519)
|
|
198,979
|
|
960,491
|
Total operating
expense
|
|
14,959,245
|
|
16,097,025
|
|
46,625,977
|
|
52,477,822
|
Operating income
(loss)
|
|
293,551
|
|
(883,171)
|
|
(133,139)
|
|
(4,902,009)
|
Net interest income
(expense)
|
|
8,168
|
|
(12,179)
|
|
26,224
|
|
(24,273)
|
Net income (loss)
before income taxes
|
|
301,719
|
|
(895,350)
|
|
(106,915)
|
|
(4,926,282)
|
Provision for income
taxes
|
|
111,850
|
|
325,781
|
|
485,912
|
|
949,657
|
Net income (loss)
attributable to common stockholders
|
|
$
189,869
|
|
$
(1,221,131)
|
|
$
(592,827)
|
|
$
(5,875,939)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic net income (loss)
attributable to common stockholders
|
|
$
0.01
|
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.17)
|
Diluted net income (loss)
attributable to common stockholders
|
|
$
0.01
|
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.17)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
Basic shares outstanding
|
|
35,869,751
|
|
35,253,930
|
|
35,710,049
|
|
35,228,863
|
Diluted shares outstanding
|
|
36,142,548
|
|
35,253,930
|
|
35,710,049
|
|
35,228,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net income (loss) to adjusted EBITDA - see note (1):
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
189,869
|
|
$
(1,221,131)
|
|
$
(592,827)
|
|
$
(5,875,939)
|
Provision for income
taxes
|
|
111,850
|
|
325,781
|
|
485,912
|
|
949,657
|
Net interest (income)
expense
|
|
(8,168)
|
|
12,179
|
|
(26,224)
|
|
24,273
|
Depreciation and
amortization
|
|
1,352,760
|
|
1,080,651
|
|
3,834,785
|
|
2,996,121
|
EBITDA
|
|
1,646,311
|
|
197,480
|
|
3,701,646
|
|
(1,905,888)
|
Restructuring and
other charges
|
|
-
|
|
(582,519)
|
|
198,979
|
|
960,491
|
Stock based
compensation
|
|
400,948
|
|
407,413
|
|
1,205,978
|
|
1,152,025
|
Severance
|
|
7,403
|
|
126,384
|
|
105,531
|
|
192,382
|
One-time sales tax
provision
|
|
-
|
|
-
|
|
-
|
|
1,365,198
|
Recovery of
previously impaired investment
|
|
-
|
|
(64,000)
|
|
-
|
|
(166,198)
|
Adjusted
EBITDA
|
|
$
2,054,662
|
|
$
84,758
|
|
$
5,212,134
|
|
$
1,598,010
|
|
|
|
|
|
|
|
|
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited)
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30,
|
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(592,827)
|
|
$
(5,875,939)
|
Adjustments to
reconcile net loss to net cash provided by
|
|
|
|
|
(used
in) operating activities:
|
|
|
|
|
Stock-based
compensation expense
|
|
1,205,978
|
|
1,152,025
|
Provision for
(recovery of) doubtful accounts
|
|
69,260
|
|
(13,892)
|
Depreciation and
amortization
|
|
3,834,785
|
|
2,996,121
|
Deferred
taxes
|
|
444,816
|
|
842,176
|
Restructuring and
other charges
|
|
-
|
|
105,113
|
Deferred
rent
|
|
(394,839)
|
|
(547,350)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
332,707
|
|
1,465,800
|
Other receivables
|
|
49,336
|
|
266,451
|
Prepaid expenses and other current assets
|
|
(582,693)
|
|
(393,861)
|
Other assets
|
|
(4,417)
|
|
3,999
|
Accounts payable
|
|
(344,356)
|
|
40,502
|
Accrued expenses
|
|
(1,573,044)
|
|
(38,541)
|
Deferred revenue
|
|
1,719,817
|
|
(1,404,244)
|
Other current liabilities
|
|
(540)
|
|
(208,328)
|
Other liabilities
|
|
-
|
|
99,475
|
Net cash provided by (used in) operating activities
|
|
4,163,983
|
|
(1,510,493)
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Restricted
cash
|
|
-
|
|
161,250
|
Capital
expenditures
|
|
(1,832,925)
|
|
(2,707,638)
|
Net cash used in investing activities
|
|
(1,832,925)
|
|
(2,546,388)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Cash dividends paid
on common stock
|
|
(68,245)
|
|
(12,492)
|
Shares withheld on
RSU vesting to pay for withholding taxes
|
|
(12,469)
|
|
(5,057)
|
Net cash used in financing activities
|
|
(80,714)
|
|
(17,549)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
368,713
|
|
(425,091)
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
2,619,057
|
|
(4,499,521)
|
Cash and cash
equivalents, beginning of period
|
|
21,371,122
|
|
28,445,416
|
Cash and cash
equivalents, end of period
|
|
$
23,990,179
|
|
$
23,945,895
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to free cash flow - see note (1):
|
|
|
|
Net loss
|
|
$
(592,827)
|
|
$
(5,875,939)
|
Noncash
expenditures
|
|
5,160,000
|
|
4,534,193
|
Changes in operating
assets and liabilities
|
|
(403,190)
|
|
(168,747)
|
Capital
expenditures
|
|
(1,832,925)
|
|
(2,707,638)
|
Free cash
flow
|
|
$
2,331,058
|
|
$
(4,218,131)
|
|
|
|
|
|
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SOURCE TheStreet, Inc.