NEW YORK, Nov. 14, 2018 /PRNewswire/ -- TheStreet,
Inc. (Nasdaq: TST) a leading financial news and information
company, today reported financial results for the third quarter
ended September 30, 2018.
- Net loss from continuing operations totaled $1.1 million, or ($0.02) per share, as compared to a net loss from
continuing operations of $0.7
million, or ($0.02) per share
in the third quarter of 2017.
- Total Revenue from continuing operations for the third quarter
of 2018 totaled $13.0 million, down
$0.3 million, or 2%, as compared to
the same quarter in the prior year.
-
- Business-to-Business (B2B) revenue of $6.3 million, up 5% year-over-year.
- Business-to-Consumer (B2C) revenue of $6.7 million, down 9% year-over-year, primarily
due to a strategic shift as it relates to advertising.
-
- B2C subscription revenue up year-over-year in September for the
first time since June 2015
- Deferred subscription revenue totaled $22.6 million, up $2.4
million, or 12%, year-over-year.
-
- B2B deferred subscription revenue increased $1.2 million, or 12%, as compared to the third
quarter of 2017.
- B2C premium deferred subscription revenue grew $1.2 million, or 12%, as compared to the third
quarter 2017
- Adjusted EBITDA of $0.1 million
for the third quarter of 2018 decreased $1.0
million as compared to the same quarter last year.
- Cash, cash equivalents, restricted cash and marketable
securities totaled $43.2 million, an
increase of $29.3 million from
December 31, 2017, including a
$5.1 million increase in cash from
operations.
- Net loss for the third quarter 2018 including discontinued
operations totaled $1.8 million, or
($0.04) per basic and diluted share,
compared to net income of $0.2
million, or $0.01 per basic
and diluted share for the same quarter last year. The third quarter
of 2018 includes additional tax expense of $0.6 million resulting from a change in the
Company's continuing operations forecasted net loss and allocations
of tax expense between continuing operations and the sale of
RateWatch in June 2018.
Third Quarter Results
For the third quarter of 2018, the Company reported revenue of
$13.0 million, net loss from
continuing operations of $1.1
million, or ($0.02) per basic
and diluted share, and an Adjusted EBITDA(1) of
$0.1 million. The third quarter net
loss from continuing operations increased $0.5 million over the same period last year
primarily from lower Business-to-Consumer ("B2C") advertising
revenue of $0.7 million coupled with
higher sales and marketing and general and administrative costs,
partially offset by an income tax benefit related to the sale of
RateWatch in June 2018.
"As promised, our efforts over the last several months to focus
on our premium business have resulted in September being the first
month with a year-over-year subscription revenue increase in more
than three years," said David
Callaway, President and CEO. "The deferred revenue coming
from that premium unit was as strong last quarter as that of our
growing B2B licensing businesses," Callaway continued. "Add in
revenue from new events in Q3 such as our Deal Economy Chicago and
Cramer Teach-In and we've got a good
story to tell on both sides of our product line."
Total revenues for the third quarter ended September 30, 2018 were $13.0 million, down $0.3
million, or 2%, from the third quarter in 2017, primarily
due to a continued sharp decline in advertising revenue in the
consumer business. However, total deferred revenue from
subscriptions was $22.6 million for
the third quarter, up $2.4 million,
or 12% compared to the third quarter ended in 2017, and up
$3.0 million, or 15% from year-end
2017. The continued increase in total deferred subscription revenue
reflects five consecutive quarters with year-over-year growth.
Operating expenses for the third quarter of 2018 were
$14.9 million as compared to
$13.8 million for the third quarter
of 2017, an increase of $1.1 million
between periods. An increase of $0.4
million was attributable to non-cash compensation due to the
issuance of restricted stock units for key employee retention
efforts. The remaining operating expense for the quarter was the
result of an increase in bonus and commissions from stronger
performance over the prior year and annual year-over-year merit
increases awarded. In addition, higher year-over-year costs were
incurred related to increased targeted sales and marketing
efforts. The Company also incurred higher year-over-year
professional advisory fees related to its strategic planning
efforts. These increased costs were partially offset by planned
reduction in traffic acquisition costs, lower freelance costs,
favorable FX exchange rates, service platform and consulting
costs.
Net loss from continuing operations of $1.1 million for the third quarter of 2018
increased from a net loss of $0.7
million from the prior year period. Adjusted EBITDA for the
third quarter of 2018 was $0.1
million compared to $1.1
million from the prior year period. The year-over-year
decline in Adjusted EBITDA was primarily the result of decreased
B2C advertising revenue, higher staffing compensation and staff
retention related costs, professional fees and online marketing
costs, partially offset by strong B2B revenue growth and higher
third quarter year-over-year B2C event revenue.
Business-to-Business Revenue
Business-to-business ("B2B") revenue, which includes BoardEx and
The Deal, totaled $6.3 million for
the third quarter, up $0.3 million or
5% as compared to the third quarter of 2017. B2B deferred
subscription revenue at September 30,
2018 increased $1.2 million,
or 12% from the third quarter ended 2017. Year-over-year revenue
growth resulted primarily from increased subscription revenue in
the B2B businesses. BoardEx subscription revenue increase of
$0.3 million resulted from both a
strong increase in the subscriber base of 9% coupled with an
increase of 2% in the average revenue per subscription. In
addition, The Deal revenue achieved a slight revenue increase
year-over-year primarily from a 6% increase in the price paid per
subscription partially offset by a 5% decrease in the number of
subscribers.
Business-to-Consumer Revenue
Total B2C revenue for the third quarter of 2018 was $6.7 million, a decrease of $0.7 million, or 9%, from $7.4 million in the third quarter of 2017. Lower
year-over-year B2C advertising revenue of $0.7 million resulted from our decision to reduce
marginally profitable programmatic advertising earlier in the year.
B2C premium subscription revenue for the third quarter of 2018 was
$4.9 million, flat with the third
quarter of last year as we continue to benefit from higher renewals
and increased sales and pricing. The results reflect slowing of the
decline in the number of subscribers offset by the increase in the
average revenue recognized per subscription. Average
churn(2) improved to 3.94% for the third quarter of 2018
from 4.22% for the third quarter of 2017. Subscription sales
bookings increased $0.3 million, or
8% for the third quarter of 2018 over the same quarter in 2017.
Strong attendance and a favorable response from events held by
the Company has led to B2C event revenue of $125 thousand for the third quarter of 2018, an
increase of $113 thousand from the
same period last year.
Cash on hand
The Company ended the third quarter 2018 with cash and cash
equivalents, restricted cash and marketable securities of
$43.2 million, up $29.3 million as compared to $13.9 million at December
31, 2017. The change between the periods primarily resulted
from net proceeds from the sale of RateWatch of $28.2 million and cash generated from operating
activities of $5.1 million. This was
partially offset by capital expenditures incurred during the period
of $2.9 million and the deferred
payment for a prior acquisition (BoardEx).
Conference Call Information
TheStreet will discuss its financial results for the third
quarter 2018 on November 14, 2018 at
8:30 a.m. EST.
To participate in the call, please dial 877-260-1479
(domestic) or 334-323-0522 (international). The conference code is
7509868. 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 flagship brand, TheStreet
(www.thestreet.com), has produced unbiased business news and market
analysis for individual investors for more than 20 years. 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,
and BoardEx (www.boardex.com), a relationship mapping service of
corporate directors and officers.
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, loss (income) from discontinued
operations, 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 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 2018. 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@thestreet.com
John Evans
Investor Relations
PIR Communications
415-309-0230
ir@thestreet.com
THESTREET,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
ASSETS
|
|
September 30,
2018
|
|
December 31,
2017
|
|
|
(unaudited)
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
40,833,954
|
|
$
11,684,817
|
Accounts receivable,
net of allowance for doubtful accounts of
|
|
|
|
|
$296,243 at
September 30, 2018 and $278,997 at December 31, 2017
|
|
4,572,216
|
|
4,546,308
|
Other
receivables
|
|
3,616,486
|
|
389,353
|
Prepaid expenses and
other current assets
|
|
1,615,839
|
|
1,615,720
|
Current assets of
discontinued operations
|
|
-
|
|
230,116
|
Total current
assets
|
|
50,638,495
|
|
18,466,314
|
Noncurrent
Assets:
|
|
|
|
|
Property and
equipment, net of accumulated depreciation and
|
|
|
|
|
amortization of $6,026,109 at September 30, 2018 and
$5,475,077
|
|
|
|
|
at
December 31, 2017
|
|
1,602,024
|
|
2,092,669
|
Marketable
securities
|
|
1,833,535
|
|
1,680,000
|
Other
assets
|
|
1,123,862
|
|
306,465
|
Goodwill
|
|
23,515,608
|
|
23,568,472
|
Other intangibles,
net of accumulated amortization of $18,370,335
|
|
|
|
|
at
September 30, 2018 and $15,702,665 at December 31, 2017
|
|
12,608,512
|
|
12,966,569
|
Deferred tax
asset
|
|
1,514,854
|
|
1,865,453
|
Restricted
cash
|
|
500,000
|
|
500,000
|
Noncurrent assets of
discontinued operations
|
|
-
|
|
7,564,606
|
Total
assets
|
|
$
93,336,890
|
|
$
69,010,548
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
1,867,612
|
|
$
1,999,772
|
Accrued
expenses
|
|
3,999,779
|
|
3,690,337
|
Deferred
revenue
|
|
21,863,890
|
|
19,201,693
|
Other current
liabilities
|
|
793,794
|
|
1,835,679
|
Current liabilities
of discontinued operations
|
|
-
|
|
4,246,891
|
Total current
liabilities
|
|
28,525,075
|
|
30,974,372
|
Noncurrent
Liabilities:
|
|
|
|
|
Deferred tax
liability
|
|
1,046,387
|
|
803,917
|
Other
liabilities
|
|
1,744,652
|
|
1,543,602
|
Noncurrent
liabilities of discontinued operations
|
|
-
|
|
741,856
|
Total
liabilities
|
|
31,316,114
|
|
34,063,747
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Common stock; $0.01
par value; 100,000,000 shares authorized;
|
|
|
|
|
57,330,389 shares issued and 49,609,152 shares
outstanding
|
|
|
|
|
at
September 30, 2018, and 56,891,551 shares issued and
|
|
|
|
|
49,181,462 shares outstanding at December 31, 2017
|
|
573,304
|
|
568,916
|
Additional paid-in
capital
|
|
261,281,003
|
|
259,569,737
|
Accumulated other
comprehensive loss
|
|
(5,264,875)
|
|
(4,845,650)
|
Treasury stock at
cost; 7,721,237 shares at September 30, 2018
|
|
|
|
|
and
7,710,089 shares at December 31, 2017
|
|
(13,503,567)
|
|
(13,484,924)
|
Accumulated
deficit
|
|
(181,065,089)
|
|
(206,861,278)
|
Total stockholders'
equity
|
|
62,020,776
|
|
34,946,801
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
93,336,890
|
|
$
69,010,548
|
|
|
|
|
|
|
|
|
|
|
Note: The
consolidated balance sheet as of December 31, 2017 reflects an
immaterial adjustment to increase deferred tax assets and a
corresponding increase to stockholders' equity as a result of the
continued assessment and application of the recently enacted
federal tax reform.
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net
revenue:
|
|
|
|
|
|
|
|
|
Business to
business
|
|
$
6,274,824
|
|
$
5,951,581
|
|
$
18,866,397
|
|
$
17,418,252
|
Business to
consumer
|
|
6,732,404
|
|
7,382,672
|
|
20,305,251
|
|
23,380,528
|
Total
net revenue
|
|
13,007,228
|
|
13,334,253
|
|
39,171,648
|
|
40,798,780
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
5,770,422
|
|
6,185,753
|
|
16,977,154
|
|
19,261,777
|
Sales and
marketing
|
|
3,639,704
|
|
2,782,596
|
|
11,017,781
|
|
9,265,547
|
General and
administrative
|
|
4,368,148
|
|
3,718,094
|
|
12,687,396
|
|
11,268,698
|
Depreciation and
amortization
|
|
1,166,717
|
|
1,115,035
|
|
3,424,630
|
|
3,189,538
|
Restructuring and
other charges
|
|
-
|
|
-
|
|
-
|
|
198,979
|
Total operating
expense
|
|
14,944,991
|
|
13,801,478
|
|
44,106,961
|
|
43,184,539
|
Operating loss
|
|
(1,937,763)
|
|
(467,225)
|
|
(4,935,313)
|
|
(2,385,759)
|
Net interest
income
|
|
32,359
|
|
8,168
|
|
81,167
|
|
26,224
|
Net loss before
discontinued operations and income taxes
|
(1,905,404)
|
|
(459,057)
|
|
(4,854,146)
|
|
(2,359,535)
|
(Loss) income from
discontinued operations
|
|
(129,809)
|
|
842,588
|
|
1,725,646
|
|
2,568,957
|
Gain on sale of
business, net of tax
|
|
(551,752)
|
|
-
|
|
27,067,071
|
|
-
|
(Loss) income
before income taxes
|
|
(2,586,965)
|
|
383,531
|
|
23,938,571
|
|
209,422
|
Benefit (provision)
for income taxes
|
|
775,014
|
|
(193,662)
|
|
1,083,763
|
|
(802,249)
|
Net (loss) income
attributable to common stockholders
|
|
$
(1,811,951)
|
|
$
189,869
|
|
$
25,022,334
|
|
$
(592,827)
|
|
|
|
|
|
|
|
|
|
Basic net (loss)
income per share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.02)
|
|
$
(0.02)
|
|
$
(0.08)
|
|
$
(0.09)
|
Discontinued
operations
|
|
(0.02)
|
|
0.03
|
|
0.59
|
|
0.07
|
Basic net (loss)
income per share
|
|
$
(0.04)
|
|
$
0.01
|
|
$
0.51
|
|
$
(0.02)
|
|
|
|
|
|
|
|
|
|
Diluted net (loss)
income per share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.02)
|
|
$
(0.02)
|
|
$
(0.08)
|
|
$
(0.09)
|
Discontinued
operations
|
|
(0.02)
|
|
0.03
|
|
0.57
|
|
0.07
|
Diluted net (loss)
income per share
|
|
$
(0.04)
|
|
$
0.01
|
|
$
0.49
|
|
$
(0.02)
|
|
|
|
|
|
|
|
|
|
Weighted average
basic shares outstanding
|
|
49,600,837
|
|
35,869,751
|
|
49,362,018
|
|
35,710,049
|
Weighted average
diluted shares outstanding
|
|
49,600,837
|
|
36,142,548
|
|
50,695,450
|
|
35,710,049
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net income (loss) to adjusted EBITDA - see note (1):
|
|
|
|
|
|
|
Net (loss) income
attributable to common stockholders
|
|
$
(1,811,951)
|
|
$
189,869
|
|
$
25,022,334
|
|
$
(592,827)
|
(Benefit) provision
for income taxes
|
|
(775,014)
|
|
193,662
|
|
(1,083,763)
|
|
802,249
|
Net interest
income
|
|
(32,359)
|
|
(8,168)
|
|
(81,167)
|
|
(26,224)
|
Depreciation and
amortization
|
|
1,166,717
|
|
1,115,035
|
|
3,424,630
|
|
3,189,538
|
EBITDA
|
|
(1,452,607)
|
|
1,490,398
|
|
27,282,034
|
|
3,372,736
|
Restructuring and
other charges
|
|
-
|
|
-
|
|
-
|
|
198,979
|
Loss (income) from
discontinued operations
|
|
129,809
|
|
(842,588)
|
|
(1,725,646)
|
|
(2,568,957)
|
Gain on sale of
business, net of tax
|
|
551,752
|
|
-
|
|
(27,067,071)
|
|
-
|
Severance
|
|
38,329
|
|
7,403
|
|
45,253
|
|
105,531
|
Stock based
compensation
|
|
797,219
|
|
400,948
|
|
1,715,731
|
|
1,205,978
|
Adjusted
EBITDA
|
|
$
64,502
|
|
$
1,056,161
|
|
$
250,301
|
|
$
2,314,267
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30,
|
|
|
2018
|
|
2017
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net income
(loss)
|
|
$
25,022,334
|
|
$
(592,827)
|
Adjustments to
reconcile net income (loss) from continuing
|
|
|
|
|
operations to net cash provided by operating activities:
|
|
|
|
|
Gain on sale of
business, net of tax
|
|
(27,067,071)
|
|
-
|
Stock-based
compensation expense
|
|
1,715,731
|
|
1,205,978
|
Provision for
doubtful accounts
|
|
55,109
|
|
69,260
|
Depreciation and
amortization
|
|
3,584,922
|
|
3,834,785
|
Deferred
taxes
|
|
(1,108,994)
|
|
444,816
|
Deferred
rent
|
|
(203,659)
|
|
(394,839)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
(178,173)
|
|
332,707
|
Other receivables
|
|
122,867
|
|
49,336
|
Prepaid expenses and other current assets
|
|
246,411
|
|
(582,693)
|
Other assets
|
|
(356,060)
|
|
(4,417)
|
Accounts payable
|
|
(141,116)
|
|
(344,356)
|
Accrued expenses
|
|
(42,772)
|
|
(1,573,044)
|
Deferred revenue
|
|
3,386,141
|
|
1,719,817
|
Other current liabilities
|
|
(73,126)
|
|
(540)
|
Other liabilities
|
|
137,610
|
|
-
|
Net cash provided by continuing operations
|
|
5,100,154
|
|
4,163,983
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Proceeds from the
sale of business, net
|
|
28,232,100
|
|
-
|
Capital
expenditures
|
|
(2,870,300)
|
|
(1,832,925)
|
Net cash provided by (used in) investing activities
|
|
25,361,800
|
|
(1,832,925)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Earnout payment for
prior acquisition
|
|
(951,867)
|
|
-
|
Cash dividends paid
on common stock
|
|
(68,162)
|
|
(68,245)
|
Share
repurchase
|
|
(1,415)
|
|
-
|
Shares withheld on
RSU vesting to pay for withholding taxes
|
|
(17,228)
|
|
(12,469)
|
Net cash used in financing activities
|
|
(1,038,672)
|
|
(80,714)
|
|
|
|
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents
|
|
|
|
|
and
restricted cash
|
|
(274,145)
|
|
368,713
|
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
29,149,137
|
|
2,619,057
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
11,684,817
|
|
21,871,122
|
Cash, cash
equivalents and restricted cash, end of period
|
|
$
40,833,954
|
|
$
24,490,179
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to free cash flow - see note (1):
|
|
|
|
|
Net loss
|
|
$
(2,044,737)
|
|
$
(592,827)
|
Noncash
expenditures
|
|
4,043,109
|
|
5,160,000
|
Changes in operating
assets and liabilities
|
|
3,101,782
|
|
(403,190)
|
Capital
expenditures
|
|
(2,870,300)
|
|
(1,832,925)
|
Free cash
flow
|
|
$
2,229,854
|
|
$
2,331,058
|
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SOURCE TheStreet, Inc.