NEW YORK, Nov. 8, 2012 (GLOBE NEWSWIRE) -- TheStreet (Nasdaq: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 | ||
| ASSETS | September 30, 2012 | December 31,2011 |
| Current Assets: | ||
| Cash and cash equivalents | $ 19,669,082 | $ 44,865,191 |
| Marketable securities | 17,127,107 | 20,895,238 |
| Accounts receivable, net of allowance for doubtful accounts of $154,175 at September 30, 2012 and $158,870 at December 31, 2011 | 4,831,404 | 6,225,424 |
| Other receivables | 1,174,407 | 356,219 |
| Prepaid expenses and other current assets | 1,553,959 | 1,421,955 |
| Restricted cash | 660,370 | 660,370 |
| Total current assets | 45,016,329 | 74,424,397 |
| Property and equipment, net of accumulated depreciation and amortization of $15,894,017 at September 30, 2012 and $13,466,365 at December 31, 2011 | 6,610,318 | 8,494,648 |
| Marketable securities | 22,715,811 | 7,894,365 |
| Other assets | 110,780 | 172,055 |
| Goodwill | 25,726,239 | 24,057,616 |
| Other intangibles, net of accumulated amortization of $6,164,272 at September 30, 2012 and $5,529,730 at December 31, 2011 | 11,562,593 | 5,370,135 |
| Restricted cash | 1,301,000 | 1,000,000 |
| Total assets | $ 113,043,070 | $ 121,413,216 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities: | ||
| Accounts payable | $ 2,223,595 | $ 2,305,589 |
| Accrued expenses | 6,750,030 | 7,970,802 |
| Deferred revenue | 20,862,328 | 17,625,666 |
| Other current liabilities | 986,431 | 509,214 |
| Total current liabilities | 30,822,384 | 28,411,271 |
| Deferred tax liability | 288,000 | 288,000 |
| Other liabilities | 4,735,702 | 4,569,497 |
| Total liabilities | 35,846,086 | 33,268,768 |
| 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, 2011 | 55 | 55 |
| 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, 2011 | 396,251 | 384,616 |
| Additional paid-in capital | 270,374,962 | 270,230,246 |
| 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' equity | 77,196,984 | 88,144,448 |
| Total liabilities and stockholders' equity | $ 113,043,070 | $ 121,413,216 |
| THESTREET, INC. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Net revenue: | ||||
| Subscription services | $ 9,101,050 | $ 9,994,184 | $ 27,140,853 | $ 29,678,616 |
| Media | 2,496,705 | 4,346,907 | 9,753,885 | 13,812,144 |
| Total net revenue | 11,597,755 | 14,341,091 | 36,894,738 | 43,490,760 |
| Operating expense: | ||||
| Cost of services | 5,699,275 | 6,274,741 | 17,834,336 | 20,036,270 |
| Sales and marketing | 2,717,794 | 4,640,908 | 10,076,902 | 13,122,182 |
| General and administrative | 3,143,160 | 3,750,475 | 10,242,852 | 12,159,579 |
| Depreciation and amortization | 1,295,197 | 1,326,484 | 3,740,649 | 4,492,525 |
| Restructuring and other charges | 3,046,104 | -- | 6,039,797 | -- |
| Loss (gain) on disposition of assets | 14,011 | -- | (205,989) | -- |
| Total operating expense | 15,915,541 | 15,992,608 | 47,728,547 | 49,810,556 |
| Operating loss | (4,317,786) | (1,651,517) | (10,833,809) | (6,319,796) |
| Net interest income | 91,271 | 155,123 | 295,216 | 529,898 |
| 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 | -- | 96,424 | 192,848 | 289,272 |
| 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 outstanding | 32,848,076 | 31,994,227 | 32,648,487 | 31,933,296 |
| 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 amortization | 1,295,197 | 1,326,484 | 3,740,649 | 4,492,525 |
| EBITDA | (3,022,589) | (325,079) | (7,093,160) | (1,829,069) |
| Restructuring and other charges | 3,046,104 | -- | 6,039,797 | -- |
| Stock based compensation | 565,601 | 736,198 | 1,632,405 | 2,166,161 |
| Loss (gain) on disposition of assets | 14,011 | -- | (205,989) | -- |
| Transaction related costs | 443,318 | 84,173 | 518,647 | 419,568 |
| 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, | ||
| 2012 | 2011 | |
| 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 expense | 1,632,405 | 2,166,161 |
| Provision for doubtful accounts | 100,887 | 133,089 |
| Depreciation and amortization | 3,740,649 | 4,492,525 |
| Restructuring and other charges | 1,396,695 | -- |
| Deferred rent | (239,968) | 742,447 |
| Noncash barter activity | 126,940 | -- |
| Gain on disposition of assets | (205,989) | -- |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | 2,058,490 | 1,538,860 |
| Other receivables | (502,866) | (272,110) |
| Prepaid expenses and other current assets | (334,508) | (160,091) |
| Other assets | 40,601 | 5,119 |
| Accounts payable | (473,986) | (420,271) |
| Accrued expenses | (1,531,416) | (1,074,228) |
| Deferred revenue | (1,139,243) | 1,948,915 |
| Other current liabilities | 113,626 | 10,609 |
| 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 securities | 30,363,261 | 39,603,926 |
| Capital expenditures | (915,263) | (1,475,768) |
| Proceeds from the disposition of assets | 222,300 | -- |
| 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 stock | 135,000 | -- |
| 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 period | 44,865,191 | 20,089,660 |
| 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 expenditures | 6,551,619 | 7,534,222 |
| 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 |