NEW YORK, May 8, 2018 /PRNewswire/ --
- Total Revenue of $14.7
million:
-
- Business-to-Business (B2B) Revenue of $8.0 million, up 9% year-over-year;
- Business-to-Consumer (B2C) Revenue of $6.7 million, down 15% year-over-year, primarily
due to a strategic shift in advertising;
- Total revenue down $0.6 million
year-over-year.
- Deferred subscription revenue totaled $26.7 million, up $1.6
million, or 7%, year-over-year, the third consecutive
quarter with year-over-year deferred subscription revenue growth,
and up $2.9MM, or 12%, from the prior
quarter:
-
- B2B deferred subscription revenue increased $1.4 million, or 10% from the fourth quarter of
2017 and $1.2 million as compared to
the first quarter of 2017;
- B2C premium deferred subscription revenue improved $1.5MM, or 16% from the fourth quarter 2017 and
$0.5 million, or 4% as compared to
the first quarter 2017.
- Operating expense for the first quarter of 2018 was
$15.3 million, a decrease of
$1.0 million, or 6%, from
$16.2 million for the first quarter
of last year.
- GAAP net loss attributable to common stockholders of
$0.7 million, or ($0.01) per share, versus a net loss attributable
to common stockholders of $1.1
million, or ($0.03) per share
in the prior year period.
- EBITDA of $0.6 million increased
$0.4 million or 182% as compared to
the same quarter last year.
- Adjusted EBITDA of $1.0 million
for the first quarter of 2018 increased 20% as compared to the same
quarter last year.
- Cash, cash equivalents, restricted cash and marketable
securities of $15.5 million increased
$1.6 million as compared to
December 31, 2017.
TheStreet, Inc. (Nasdaq: TST) a leading financial news and
information company, today reported financial results for the first
quarter ended March 31,
2018.
For the first quarter of 2018, the Company reported revenue of
$14.7 million, net loss attributable
to common stockholders of $0.7
million, or ($0.01) per basic
and diluted share, and an Adjusted EBITDA(1) of
$1.0 million. The first quarter net
loss improved $0.4 million over the
same period last year primarily from revenue growth generated by
our institutional business and savings from restructuring and cost
cutting measures implemented during prior periods, partially offset
by lower Business-to-Consumer ("B2C") advertising and premium
subscription revenue.
"Strengthening institutional revenue along with cost controls
and our move to cut marginally profitable programmatic advertising
business yielded year over year positive results," said
David Callaway, President and CEO.
"Stronger sales momentum in our premium subscription business,
highlighted by increased premium subscription bookings, which
resulted in deferred revenue growth of $0.5
million in the first quarter over the same period last year,
show our pivot to a paid business model is working."
First Quarter Results
Business-to-business ("B2B") revenue, which includes BoardEx,
The Deal and RateWatch, totaled $8.0
million for the first quarter, up $0.7 million or 9% as compared to the first
quarter of 2017. B2C revenue was $6.7
million for the first quarter 2018, down $1.2 million, or 15%, compared to the first
quarter of 2017, primarily the result of a strategic decision to
cut down programmatic advertising and focus on building its
subscription business.
Total deferred subscription revenue for the Company was
$26.7 million for the first quarter
of 2018, up $1.6 million, or 7%
compared to the first quarter of 2017, and up $2.9MM, or 12% from the fourth quarter. This is
the third consecutive quarter with year-over-year deferred
subscription revenue growth. B2B deferred subscription revenue
increased $1.4 million, or 9.5% from
the fourth quarter of 2017 and $1.2
million as compared to the first quarter of 2017. B2C
premium deferred subscription revenue improved $1.5MM, or 16.2% from the fourth quarter 2017 and
$0.5 million, or 4.5% as compared to
the first quarter 2017. B2C premium deferred subscription revenue
grew year over year for the first time in more than 3 years this
quarter.
Operating expenses for the first quarter of 2018 were
$15.3 million as compared to
$16.2 million for the first quarter
of 2017, a decrease of nearly $1.0
million between periods. Operating expense for the first
quarter of 2017 includes $0.2 million
of restructuring and other charges. Excluding the 2017
restructuring and other charges, operating expenses for the first
quarter 2018 decreased $0.8 million,
or 5% as compared to the first quarter of 2017. Lower operating
expenses resulted primarily from salary and benefit costs (related
to prior periods cost reduction initiatives), planned reduction in
traffic acquisition costs, and lower professional fees (related to
ongoing litigation, lower audit and accounting related costs,
partially offset by higher contract negotiation fees). This was
partially offset by higher bonus and commissions related to the
increased year over year performance, data related costs and higher
facilities related costs incurred during the period.
Net loss of $0.7 million for the
first quarter of 2018 improved from a net loss of $1.1 million from the prior year period.
Excluding the $0.2 million
restructuring and one-time costs recorded in 2017, net loss
improved $0.2 million this year over
the same quarter last year. Adjusted EBITDA for the first
quarter of 2018 was $1.0 million
compared to $0.8 million from the
prior year period. The year-over-year increase in Adjusted EBITDA
primarily resulted from strong B2B revenue growth, and lower cost
of services expense (primarily from employee related costs, outside
contributors and lower traffic acquisition costs) partially offset
by the decline in revenue in our B2C businesses.
Business-to-Business Revenue
B2B revenue for the first quarter of 2018 was $8.0 million, an increase of $0.7 million, or 9%, compared to the first
quarter of 2017. Year over year revenue growth resulted
primarily from increased subscription revenue in the BoardEx and
RateWatch businesses along with increased non-subscription report
sales in Ratewatch. Increased BoardEx subscription revenue resulted
from both a strong increase in the subscriber base of 13% coupled
with an increase of 13% in the average revenue per subscription.
RateWatch subscription revenue growth reflected a 12% increase in
average revenue per subscriber along with a 1% increase in the
weighted number of subscriptions. Lower revenue recorded in
The Deal resulted primarily due to timing of events held in The
Deal business as well as a 3% reduction in subscription revenue.
Revenue growth also resulted in our BoardEx business from FX
gains of $0.2 million during the
quarter.
Business-to-Consumer Revenue
B2C revenue for the first quarter of 2018 was $6.7 million, a decrease of $1.2 million, or 15%, from $7.9 million in the first quarter of 2017.
B2C subscription revenue for the first quarter of 2018 was
$4.7 million, a decrease of
$0.4 million, or 9%, from
$5.1 million in the first quarter of
2017. This decrease primarily related to a 10% decline in the
weighted-average number of subscriptions offset by a 1% increase in
the average revenue recognized per subscription. Average
monthly churn(2) improved to 4.79% for the first
quarter of 2018 from 4.94% for the first quarter of 2017. Sales
efforts are getting stronger with a $0.4
million, or 6% increase in year over year bookings recorded
during the first quarter of 2018. B2C advertising revenue declined
year over year $0.8 million primarily
from the lower advertising generated by our decision to reduce
marginally profitable programmatic advertising.
Cash on hand
Net cash provided by operating activities for the first quarter
of 2018 totaled $2.4 million, up
$0.5 million as compared to the same
period during the prior year. The increase in net cash provided by
operating activities was primarily the result of the improved net
loss of $0.4 million and increased
deferred revenue of $0.3 million,
partially offset by small changes in the balance of accounts
receivable and prepaid expenses. Capital expenditures totaled
$0.8 million as the Company continues
to invest in the business. As a result, the Company ended the
quarter with cash and cash equivalents, restricted cash and
marketable securities of $15.5
million, as compared to $13.9
million at December 31, 2017,
an increase of $1.6 million.
Conference Call Information
TheStreet will discuss its financial results for the first
quarter 2018 on May 8, 2018 at
10:30 a.m. EDT.
To participate in the call, please dial 800-289-0438
(domestic) or 323-794-2423 (international). The conference code is
5200377. 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;
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 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
|
|
March 31,
2018
|
|
December 31,
2017
|
|
|
(unaudited)
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
13,223,536
|
|
$
11,684,817
|
Accounts receivable,
net of allowance for doubtful accounts of
|
|
|
|
|
$284,057
at March 31, 2018 and $278,997 at December 31, 2017
|
|
5,095,663
|
|
4,684,570
|
Other
receivables
|
|
255,561
|
|
389,353
|
Prepaid expenses and
other current assets
|
|
2,111,526
|
|
1,707,574
|
Total current
assets
|
|
20,686,286
|
|
18,466,314
|
Noncurrent
Assets:
|
|
|
|
|
Property and
equipment, net of accumulated depreciation and
|
|
|
|
|
amortization of $5,935,030 at March 31, 2018 and $5,690,265
at
|
|
|
|
|
December 31,
2017
|
|
2,565,064
|
|
2,751,812
|
Marketable
securities
|
|
1,748,805
|
|
1,680,000
|
Other
assets
|
|
312,251
|
|
306,465
|
Goodwill
|
|
29,478,161
|
|
29,419,522
|
Other intangibles,
net of accumulated amortization of $24,633,410
|
|
|
|
|
at March
31, 2018 and $23,563,514 at December 31, 2017
|
|
14,085,490
|
|
14,020,982
|
Deferred tax
asset
|
|
2,874,847
|
|
2,791,305
|
Restricted
cash
|
|
500,000
|
|
500,000
|
Total
assets
|
|
$
72,250,904
|
|
$
69,936,400
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
2,003,762
|
|
$
2,013,797
|
Accrued
expenses
|
|
2,582,354
|
|
3,765,795
|
Deferred
revenue
|
|
26,066,008
|
|
23,308,678
|
Other current
liabilities
|
|
1,940,129
|
|
1,904,614
|
Total current
liabilities
|
|
32,592,253
|
|
30,992,884
|
Noncurrent
Liabilities:
|
|
|
|
|
Deferred tax
liability
|
|
2,041,575
|
|
1,932,606
|
Other
liabilities
|
|
2,599,936
|
|
2,064,109
|
Total
liabilities
|
|
37,233,764
|
|
34,989,599
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
Common stock; $0.01
par value; 100,000,000 shares authorized;
|
|
|
|
|
56,900,725 shares issued and 49,186,690 shares outstanding
at
|
|
|
|
|
March
31, 2018, and 56,891,551 shares issued and 49,181,462
|
|
|
|
|
shares
outstanding at December 31, 2017
|
|
569,007
|
|
568,916
|
Additional paid-in
capital
|
|
259,910,012
|
|
259,569,737
|
Accumulated other
comprehensive loss
|
|
(4,428,678)
|
|
(4,845,650)
|
Treasury stock at
cost; 7,714,035 shares at March 31, 2018
|
|
|
|
|
and
7,710,089 shares at December 31, 2017
|
|
(13,490,213)
|
|
(13,484,924)
|
Accumulated
deficit
|
|
(207,542,988)
|
|
(206,861,278)
|
Total stockholders'
equity
|
|
35,017,140
|
|
34,946,801
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
72,250,904
|
|
$
69,936,400
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
March
31,
|
|
|
2018
|
|
2017
|
|
|
unaudited
|
Revenue:
|
|
|
|
|
Business to
business
|
|
$
8,037,624
|
|
$
7,387,239
|
Business to
consumer
|
|
6,671,203
|
|
7,893,198
|
Total
revenue
|
|
14,708,827
|
|
15,280,437
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
Cost of
services
|
|
5,916,804
|
|
7,281,429
|
Sales and
marketing
|
|
3,812,549
|
|
3,543,352
|
General and
administrative
|
|
4,330,146
|
|
4,026,052
|
Depreciation and
amortization
|
|
1,194,679
|
|
1,179,532
|
Restructuring and
other charges
|
|
-
|
|
198,979
|
Total operating
expense
|
|
15,254,178
|
|
16,229,344
|
Operating loss
|
|
(545,351)
|
|
(948,907)
|
Net interest
income
|
|
18,777
|
|
7,771
|
Net loss before
income taxes
|
|
(526,574)
|
|
(941,136)
|
Provision for income
taxes
|
|
(155,136)
|
|
(186,304)
|
Net loss
|
|
(681,710)
|
|
(1,127,440)
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
Basic and diluted net loss
attributable to common stockholders
|
|
$
(0.01)
|
|
$
(0.03)
|
|
|
|
|
|
Weighted average
basic and diluted shares outstanding
|
|
49,184,692
|
|
35,558,371
|
|
|
|
|
|
Reconciliation of
net loss to adjusted EBITDA - see note (1):
|
|
|
|
|
Net loss
|
|
$
(681,710)
|
|
$
(1,127,440)
|
Provision for income
taxes
|
|
155,136
|
|
186,304
|
Net interest
income
|
|
(18,777)
|
|
(7,771)
|
Depreciation and
amortization
|
|
1,194,679
|
|
1,179,532
|
EBITDA
|
|
649,328
|
|
230,625
|
Restructuring and
other charges
|
|
-
|
|
198,979
|
Stock based
compensation
|
|
340,366
|
|
396,242
|
Adjusted
EBITDA
|
|
$
989,694
|
|
$
825,846
|
THESTREET,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited)
|
|
|
|
|
|
|
|
For the Three
Months Ended March 31,
|
|
|
2018
|
|
2017
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(681,710)
|
|
$
(1,127,440)
|
Adjustments to
reconcile net loss to net cash provided by
|
|
|
|
|
operating activities:
|
|
|
|
|
Stock-based
compensation expense
|
|
340,366
|
|
396,242
|
Provision for
doubtful accounts
|
|
18,776
|
|
25,861
|
Depreciation and
amortization
|
|
1,194,679
|
|
1,179,532
|
Deferred
taxes
|
|
108,969
|
|
148,272
|
Deferred
rent
|
|
16,555
|
|
(131,306)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
(398,853)
|
|
50,934
|
Other receivables
|
|
133,792
|
|
(18,360)
|
Prepaid expenses and other current assets
|
|
(402,278)
|
|
(38,485)
|
Other assets
|
|
(8,612)
|
|
(10,521)
|
Accounts payable
|
|
(16,327)
|
|
67,479
|
Accrued expenses
|
|
(1,129,949)
|
|
(1,575,459)
|
Deferred revenue
|
|
3,128,414
|
|
2,818,539
|
Other current liabilities
|
|
54,103
|
|
18,080
|
Other liabilities
|
|
-
|
|
11,052
|
Net cash provided by operating activities
|
|
2,357,925
|
|
1,814,420
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Capital
expenditures
|
|
(831,849)
|
|
(553,109)
|
Net cash used in investing activities
|
|
(831,849)
|
|
(553,109)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Cash dividends paid
on common stock
|
|
(68,162)
|
|
(68,245)
|
Share
repurchase
|
|
(1,415)
|
|
-
|
Shares withheld on
RSU vesting to pay for withholding taxes
|
|
(3,874)
|
|
(74)
|
Net cash used in financing activities
|
|
(73,451)
|
|
(68,319)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
86,094
|
|
97,520
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
1,538,719
|
|
1,290,512
|
Cash and cash
equivalents, beginning of period
|
|
11,684,817
|
|
21,371,122
|
Cash and cash
equivalents, end of period
|
|
$
13,223,536
|
|
$
22,661,634
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net loss to free cash flow - see note (1):
|
|
|
|
Net loss
|
|
$
(681,710)
|
|
$
(1,127,440)
|
Noncash
expenditures
|
|
1,679,345
|
|
1,618,601
|
Changes in operating
assets and liabilities
|
|
1,360,290
|
|
1,323,259
|
Capital
expenditures
|
|
(831,849)
|
|
(553,109)
|
Free cash
flow
|
|
$
1,526,076
|
|
$
1,261,311
|
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SOURCE TheStreet, Inc.