TheStreet Reports Third Quarter 2012 Results
NEW YORK, Nov 8, 2012 (Menafn - GlobeNewswire via COMTEX) --TheStreet TST, a leading digital financial media company, today reported financial results for the third quarter of 2012. The Company reported revenue of 11.6 million, a net loss of 4.2 million and Adjusted EBITDA(1) of 1.0 million for the quarter.
In September, TheStreet acquired The Deal, a digital subscription platform that delivers sophisticated coverage of the mergers and acquisitions environment. These earnings results include 19 days of The Deal's operations.
Revenue for the third quarter decreased 19% compared to the same period last year. Subscription Services revenue was 9.1 million for the third quarter, a decrease of 9% compared to the prior year period. Media revenue was 2.5 million for the third quarter, a decrease of 43% compared to the prior year period.
Operating expenses in the third quarter were 15.9 million, a decrease of 0.5% as compared to the prior year period. Excluding 3.1 million related to restructuring and the disposition of assets, which were primarily associated with the acquisition of The Deal, operating expenses declined 20% compared to the prior year period.
Adjusted EBITDA was 1.0 million in the third quarter, as compared to 0.5 million in the prior year period.
"By generating 1.0 million in Adjusted EBITDA, the largest quarterly amount in 2012, we are executing a successful turnaround and setting the stage for growth," said Elisabeth DeMarse, Chairman, President and Chief Executive Officer. "We continue to focus on cost containment and have a strong control over operating expenses. As a result, we reduced ongoing operating expenses by 20% from Q3 2011 and 4% from Q2 2012. We are guided by our vision of building a profitable media company and continue to invest in our lucrative subscription businesses, including The Deal, and expand our reach into the institutional market. Our unique business model allows us to monetize our free site with subscriptions and advertising."
Selected Operating Results of Third Quarter 2012
--Average monthly unique visitors to the Company's network of sites, as
measured internally, increased approximately 30% as compared to the
prior year period(2).
--Average revenue per user increased 7.6% as compared to the prior year
period (2).
--Average monthly churn decreased to 2.6% from 2.7% in the prior year
period and 3.9% in the second quarter of 2012(2) (3).
--Subscription Services bookings decreased 10% as compared to the prior
year period.
--The average number of paid subscriptions was 74,855 for the quarter (2).
The Company's net loss was 4.2 million in the third quarter of 2012 as compared to a net loss of 1.5 million in the third quarter of 2011. Excluding the restructuring charge and the loss from disposition of assets of 3.1 million, net loss from ongoing operations was 1.2 million, an improvement of 22% compared to the prior year period. The Company reported basic and diluted net loss per share attributable to common stockholders of 0.13 in the third quarter of 2012, as compared to 0.05 in the third quarter of 2011.
The Company ended the quarter with cash and cash equivalents, restricted cash and marketable securities of 61.5 million.
Additionally, the Company continued the suspension of its dividend for the fourth quarter 2012.
Conference Call Information
TheStreet will discuss its financial results for the third quarter today at 4:30 p.m. ET.
To participate in the call, please dial 800-649-5127 (domestic) or 914-495-8549 (international). The passcode for the call is 44045610. This call is being webcast and can be accessed in 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 ninety calendar days.
About TheStreet
TheStreet, Inc. is a leading digital financial media company that distributes its content through online, social media, tablet and mobile channels. The Company's network of brands includes: TheStreet, RealMoney, RealMoney Pro, The Deal, Stockpickr, Action Alerts PLUS, Options Profits, Chat on TheStreet, MainStreet and Rate-Watch. For more information on TheStreet's business, visit www.t.st. For financial and business news, actionable trading ideas, stock quotes and more, visit TheStreet.com, follow TheStreet on Facebook and Twitter, visit TheStreet.mobi from your mobile device and access TheStreet through all major tablet platforms. For more information on The Deal, visit www.thedeal.com.
The TheStreet, Inc. logo is available at: http://www.globenewswire.com/newsroom/prs/?pkgid=11420
(1) To supplement the Company's financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses non-GAAP measures of certain components of financial performance, including "EBITDA," "Adjusted EBITDA" and "free cash flow." 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 capital expenditures. EBITDA eliminates the uneven effect of considerable amounts of noncash depreciation of tangible assets and amortization of certain intangible assets that were recognized in business combinations. Adjusted EBITDA further eliminates the impact of noncash stock compensation, restructuring 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 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) Calculation excludes the impact of The Deal.
(3) Average monthly churn rate is defined as subscriber terminations/expirations in the quarter divided by the sum of the beginning subscribers and gross subscriber additions for the quarter, 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.
All statements contained in this press release other than statements of historical facts are deemed forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, including those described in the Company's filings with the Securities and Exchange Commission that could cause actual results to differ materially from those reflected in the forward-looking statements. 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.
THESTREET, INC.
CONSOLIDATED BALANCE SHEETS
September 30,December
ASSETS201231,2011
----------------------------
Current Assets:
Cash and cash equivalents 19,669,082 44,865,191
Marketable securities17,127,10720,895,238
Accounts receivable, net
of allowance for doubtful
accounts of 154,175 at
September 30, 2012 and
158,870 at December 31,
20114,831,4046,225,424
Other receivables1,174,407356,219
Prepaid expenses and other
current assets1,553,9591,421,955
Restricted cash660,370660,370
----------------------------
Total current assets45,016,32974,424,397
Property and equipment,
net of accumulated
depreciation and
amortization of
15,894,017 at September
30, 2012 and 13,466,365
at December 31, 20116,610,3188,494,648
Marketable securities22,715,8117,894,365
Other assets110,780172,055
Goodwill25,726,23924,057,616
Other intangibles, net of
accumulated amortization
of 6,164,272 at
September 30, 2012 and
5,529,730 at December
31, 201111,562,5935,370,135
Restricted cash1,301,0001,000,000
----------------------------
Total assets 113,043,070 121,413,216
============================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable 2,223,595 2,305,589
Accrued expenses6,750,0307,970,802
Deferred revenue20,862,32817,625,666
Other current liabilities986,431509,214
----------------------------
Total current
liabilities30,822,38428,411,271
Deferred tax liability288,000288,000
Other liabilities4,735,7024,569,497
----------------------------
Total liabilities35,846,08633,268,768
----------------------------
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, 2012 and December 31,
2011; the aggregate
liquidation preference
totals 55,000,000 as of
September 30, 2012 and
December 31, 20115555
Common stock; 0.01 par
value; 100,000,000 shares
authorized; 39,625,079
shares issued and
32,877,360 shares
outstanding at September
30, 2012, and 38,461,595
shares issued and
32,131,188 shares
outstanding at December
31, 2011396,251384,616
Additional paid-in capital270,374,962270,230,246
Accumulated other
comprehensive income(129,153)(394,600)
Treasury stock at cost;
6,747,719 shares at
September 30, 2012 and
6,330,407 shares at
December 31, 2011(11,840,818)(11,010,149)
Accumulated deficit(181,604,313)(171,065,720)
----------------------------
Total stockholders'
equity77,196,98488,144,448
----------------------------
Total liabilities and
stockholders' equity 113,043,070 121,413,216
============================
THESTREET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months EndedFor the Nine Months Ended
September 30,September 30,
-------------------------------------------------------------
2012201120122011
---------------------------------------------------------
Net revenue:
Subscription services 9,101,050 9,994,184 27,140,853 29,678,616
Media2,496,7054,346,9079,753,88513,812,144
---------------------------------------------------------
Total net revenue11,597,75514,341,09136,894,73843,490,760
---------------------------------------------------------
Operating expense:
Cost of services5,699,2756,274,74117,834,33620,036,270
Sales and marketing2,717,7944,640,90810,076,90213,122,182
General and administrative3,143,1603,750,47510,242,85212,159,579
Depreciation and amortization1,295,1971,326,4843,740,6494,492,525
Restructuring and other charges3,046,104--6,039,797--
Loss (gain) on disposition of
assets14,011--(205,989)--
---------------------------------------------------------
Total operating expense15,915,54115,992,60847,728,54749,810,556
---------------------------------------------------------
Operating loss(4,317,786)(1,651,517)(10,833,809)(6,319,796)
Net interest income91,271155,123295,216529,898
---------------------------------------------------------
Loss from continuing
operations before income
taxes(4,226,515)(1,496,394)(10,538,593)(5,789,898)
Provision for income taxes--------
---------------------------------------------------------
Loss from continuing
operations(4,226,515)(1,496,394)(10,538,593)(5,789,898)
Discontinued operations:
Loss from discontinued
operations--(46)--(1,798)
---------------------------------------------------------
Net loss(4,226,515)(1,496,440)(10,538,593)(5,791,696)
Preferred stock cash dividends--96,424192,848289,272
---------------------------------------------------------
Net loss attributable to common
stockholders (4,226,515) (1,592,864) (10,731,441) (6,080,968)
=========================================================
Basic and diluted net loss per
share:
Loss from continuing operations (0.13) (0.05) (0.32) (0.18)
Loss from discontinued
operations--(0.00)--(0.00)
---------------------------------------------------------
Net loss(0.13)(0.05)(0.32)(0.18)
Preferred stock dividends--(0.00)(0.01)(0.01)
---------------------------------------------------------
Net loss attributable to
common stockholders (0.13) (0.05) (0.33) (0.19)
=========================================================
Weighted average basic and
diluted shares outstanding32,848,07631,994,22732,648,48731,933,296
=========================================================
Net loss (4,226,515) (1,496,440) (10,538,593) (5,791,696)
Net interest income(91,271)(155,123)(295,216)(529,898)
Depreciation and amortization1,295,1971,326,4843,740,6494,492,525
---------------------------------------------------------
EBITDA(3,022,589)(325,079)(7,093,160)(1,829,069)
Restructuring and other charges3,046,104--6,039,797--
Stock based compensation565,601736,1981,632,4052,166,161
Loss (gain) on disposition of
assets14,011--(205,989)--
Transaction related costs443,31884,173518,647419,568
---------------------------------------------------------
Adjusted EBITDA 1,046,445 495,292 891,700 756,660
=========================================================
THESTREET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30,
-------------------------------
20122011
-----------------------------
Cash Flows from Operating Activities:
Net loss (10,538,593) (5,791,696)
Loss from discontinued operations--1,798
-----------------------------
Loss from continuing operations(10,538,593)(5,789,898)
Adjustments to reconcile loss from
continuing operations to net cash
(used in) provided by operating
activities:
Stock-based compensation expense1,632,4052,166,161
Provision for doubtful accounts100,887133,089
Depreciation and amortization3,740,6494,492,525
Restructuring and other charges1,396,695--
Deferred rent(239,968)742,447
Noncash barter activity126,940--
Gain on disposition of assets(205,989)--
Changes in operating assets and
liabilities:
Accounts receivable2,058,4901,538,860
Other receivables(502,866)(272,110)
Prepaid expenses and other current
assets(334,508)(160,091)
Other assets40,6015,119
Accounts payable(473,986)(420,271)
Accrued expenses(1,531,416)(1,074,228)
Deferred revenue(1,139,243)1,948,915
Other current liabilities113,62610,609
-----------------------------
Net cash (used in) provided by
continuing operations(5,756,276)3,321,127
Net cash used in discontinued
operations--(3,669)
-----------------------------
Net cash (used in) provided by
operating activities(5,756,276)3,317,458
-----------------------------
Cash Flows from Investing Activities:
Purchase of marketable securities(41,151,130)(24,854,469)
Sale and maturity of marketable
securities30,363,26139,603,926
Capital expenditures(915,263)(1,475,768)
Proceeds from the disposition of
assets222,300--
Purchase of The Deal, LLC(5,430,063)--
Sale of Promotions.com--265,000
-----------------------------
Net cash (used in) provided by
investing activities(16,910,895)13,538,689
-----------------------------
Cash Flows from Financing Activities:
Cash dividends paid on common stock(1,640,421)(2,595,645)
Cash dividends paid on preferred stock(192,848)(289,272)
Proceeds from the sale of common stock135,000--
Purchase of treasury stock(830,669)(351,316)
-----------------------------
Net cash used in financing
activities(2,528,938)(3,236,233)
-----------------------------
Net (decrease) increase in cash and
cash equivalents(25,196,109)13,619,914
Cash and cash equivalents, beginning
of period44,865,19120,089,660
-----------------------------
Cash and cash equivalents, end of
period 19,669,082 33,709,574
=============================
Supplemental disclosures of cash flow
information:
Cash payments made for interest -- --
=============================
Cash payments made for income taxes -- --
=============================
Net loss (10,538,593) (5,791,696)
Noncash expenditures6,551,6197,534,222
Changes in operating assets and
liabilities(1,769,302)1,574,932
Capital expenditures(915,263)(1,475,768)
-----------------------------
Free cash flow (6,671,539) 1,841,690
=============================
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SOURCE: TheStreet, Inc.
(Logo:http://media.primezone.com/cache/18235/int/12296.jpg)
CONTACT: Thomas Etergino
Executive Vice President, Chief Financial Officer
TheStreet, Inc.
212-321-5234
ir@thestreet.com
Erica Mannion
Investor Relations
Sapphire Investor Relations, LLC
415-471-2700
ir@thestreet.com
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