TheStreet.com, Inc. Reports Second and Third Quarter 2009 Results, Estimates Certain Fourth Quarter 2009 Results and Restates Certain Prior Period Results

Delivers Positive Revenue Trends in Core Businesses; Increases Balance of Cash and Marketable Securities to over $82 millionAnticipates Timely Regaining Compliance with Nasdaq Listing Rules

NEW YORK, Jan 25, 2010 (BUSINESS WIRE) -- TheStreet.com, Inc. (Nasdaq: TSCM; http://www.thestreet.com), a leading digital financial media company, today reported financial results for the second and third quarters of 2009 and estimates of certain fourth quarter results. The Company also reported a restatement of certain items of its previously reported results for 2008 as a result of its earlier announced review of accounting matters related to a non-core subsidiary, Promotions.com - which the Company divested in December 2009.

"We are pleased to have concluded the review of accounting in our former Promotions.com subsidiary and to resume reporting our results, as we have been enjoying favorable trends in the Company's remaining businesses for the past couple of quarters," said Daryl Otte, the Company's Chief Executive Officer. "Bookings in our paid services have seen double-digit percentage increases in the second half of 2009 as compared to the prior year period, after having been down in the first half. As bookings are the precursor to higher paid services revenue, this positions us well for 2010. In addition to our strong bookings performance since mid-year, we are pleased that our subscriber counts have risen each quarter after March 2009.

"Our marketing services business excluding the divested Promotions.com subsidiary also is experiencing favorable trends. The large year-over-year revenue decline we witnessed in the first quarter, flattened in each of the second and third quarters, and our fourth quarter results exceeded the prior year results, for the first time in five quarters.

"During the past year, we have concentrated on strengthening our management team, reducing costs and honing our strategic focus. In December, we enhanced our paid services team through the acquisition of Kikucall, Inc., an online subscription marketing firm, and sold the Promotions.com subsidiary in order to sharpen our focus on our core businesses of providing financial information services to paid subscribers and through ad-supported platforms. We also hired a new Chief Information Officer this month and General Counsel last June.

"We note that our bottom line will benefit from the divestiture of the Promotions.com subsidiary, which provided a negative contribution of $2.2 million in the first 9 months of 2009 and a negative contribution of $2.2 million in fiscal 2008.

"We are excited to be starting 2010 with all of our businesses showing good momentum, having a strong balance sheet - with over $82 million of Cash(1) and marketable securities and no debt at year-end 2009 - and generating positive Adjusted EBITDA(2). We intend to continue refining and improving our product offerings and to enhance our leading position in the online financial media space. We believe that 2010 will be a year of many opportunities for us and look forward to re-engaging with our investors and reporting on our progress," Mr. Otte concluded.

Financial Highlights of Second and Third Quarter 2009

Note - as discussed below, the Company will restate certain items of its consolidated financial statements for the year ended December 31, 2008 and the quarters within such fiscal year.The 2008 period results discussed below reflect the impact of the anticipated restatement.Please see unaudited tables attached to this press release for description of previously reported 2008 period results, anticipated adjustments in connection with the restatement and anticipated restated results.

The Company recorded revenue of $15.0 million in the second quarter of 2009, a reduction of 19% as compared to a restated $18.4 million in the second quarter of 2008. Operating expenses in the second quarter of 2009 were $15.2 million, a reduction of 14% as compared to a restated $17.6 million in the prior year period. The Company had net income of $0.3 million in the second quarter of 2009, as compared to a restated net income of $1.1 million in the prior year period. The Company reported basic and diluted net income per share attributable to common stockholders of $0.01 and $0.01, respectively, in the second quarter of 2009, as compared with a restated $0.03 and $0.03, respectively, in the prior year period. Adjusted EBITDA for the second quarter of 2009 was $2.0 million, as compared to a restated $3.3 million for the prior year period.

The Company recorded revenue of $15.2 million in the third quarter of 2009, a reduction of 11% as compared to a restated $17.0 million in the third quarter of 2008. Operating expenses in the third quarter of 2009 were $16.9 million, a reduction of 6% as compared to a restated $18.0 million in the prior year period. The Company had a net loss of $(1.4) million in the third quarter of 2009, as compared to a restated net loss of $(0.7) million in the prior year period. The Company reported basic and diluted net loss per share attributable to common stockholders of $(0.05) and $(0.05), respectively, in the third quarter of 2009, as compared with a restated $(0.03) and $(0.03), respectively, in the prior year period. Adjusted EBITDA for the third quarter of 2009 was $1.7 million, as compared to a restated $1.5 million for the prior year period.

As previously disclosed, the Company sold its Promotions.com subsidiary in December 2009. Attached to this press release are schedules that describe the impact of the Promotions.com subsidiary on the Company's quarterly consolidated results since January 2008.

Certain Estimated Results for Fourth Quarter 2009

The Company also announced certain estimated results for the quarter ended December 31, 2009, as follows:

 

  • The Company expects its paid services revenue will be in the range of $9.5-$9.7 million, as compared to $9.9 million in the prior year period, with the decline primarily reflecting the year-over-year decline in paid services bookings experienced in the first half of the year. The Company expects its paid services bookings will increase from the prior year period by approximately 10%-13%. (The restatement of certain 2008 period results will not affect the Company's paid services revenue.)
  • The Company expects its marketing services revenue, including the Promotions.com subsidiary through its divestiture in December 2009, will be in the range of $6.7-$6.9 million, as compared to a restated $7.5 million in the prior year period.
  • The Company expects its marketing services revenue, excluding the Promotions.com subsidiary, will be in the range of $5.5-$5.6 million, as compared to $5.3 million in the prior year period. (The restatement of certain 2008 period results will not affect the Company's marketing services revenue, excluding the Promotions.com subsidiary.)
  • The Company expects its balance of Cash and marketable securities at December 31, 2009 will be approximately $82.7 million, an increase of $6.3 million from December 31, 2008. The increase primarily reflects the Company's operating cash flow, together with the receipt of $1.0 million in cash from the sale of the Promotions.com subsidiary, offset in part by (i) cash payments totaling $5.5 million in connection with (a) the acquisition of Kikucall, (b) fees to professional advisors in connection with the acquisition of Kikucall and divestiture of the Promotions.com subsidiary and (c) expenses incurred in connection with the Review described below; and (ii) payment of $3.6 million in dividends. The Company had no debt at December 31, 2009.

 

The Company notes that the above estimates for the quarter ended December 31, 2009 are preliminary, and may be subject to change.

Summary of Results of Accounting Review

The Company previously announced that it had identified an issue relating to its recording of certain revenue of its Promotions.com subsidiary, which the Company had acquired in August 2007 (and which, as noted above, the Company subsequently has sold) and that, as a result, the Audit Committee of the Company's Board of Directors (the "Audit Committee") engaged outside counsel, Skadden, Arps, Slate, Meagher & Flom LLP, and accounting experts, AlixPartners LLP, and conducted an independent review of accounting matters related to the Promotions.com subsidiary (the "Review"). As a result of the Review, the Audit Committee concluded that, due to certain inaccuracies in the previously issued consolidated financial statements as of and for the year ended December 31, 2008 and the fiscal quarters within such fiscal year, respectively (collectively, the "2008 Periods"), such consolidated financial statements no longer should be relied upon. The Company will restate its consolidated financial statements for the year ended December 31, 2008 and anticipates filing, on or before February 8, 2010, a Form 10-K/A for the year ended December 31, 2008, which shall contain certain revised results for the quarters within such fiscal year. The Company also anticipates revising certain amounts in its consolidated financial statements for the quarter ended March 31, 2009 related to this matter, including a reduction of revenue of approximately $0.5 million, a reduction of expense of approximately $0.1 million, and an increase in each of operating loss and net loss of approximately $0.4 million.

A summary of the anticipated restated financials are attached to this press release. The restatement will not affect the Company's previously reported cash, cash equivalents, restricted cash and marketable securities. The restatement will make adjustments to correct errors related to the timing of recognition of revenue within the Promotions.com subsidiary and make adjustments to revenue and expense related to transactions with certain third parties involving the Promotions.com subsidiary, in which the Company contracted both to provide services to, and receive services from, such third parties. The adjustments will result in reduced revenue in certain quarters, and increased revenue in other quarters, as compared to results previously reported; reduced expense in certain quarters, as compared to results previously reported; and reduced net income (or increased net loss) in certain quarters, and reduced net loss in other quarters, as compared to results previously reported. Moreover, as a result of the restatement, certain revenue previously reported within 2008 Periods will be deferred and recognized in 2009.

Certain inaccuracies identified in the Review affected the Company's previously reported consolidated financial statements for the year ended December 31, 2007 ("FY'07"), and quarters ended September 30, 2007 ("Q3'07") and December 31, 2007 ("Q4'07") (collectively, the "2007 Periods"), however the Company concluded that such errors were not material to the Company's consolidated financial statements for the 2007 Periods and therefore such consolidated financial statements will not be restated. The Company provides disclosure below of the impact of the errors identified in the Review on such consolidated financial statements: (i) revenue (all of which was recorded in the Company's interactive marketing services within the Company's marketing services) was overstated by approximately $0.8 million, $0.1 million and $0.8 million, respectively, in Q3'07, Q4'07 and FY'07, respectively; (ii) operating expense was overstated by approximately $0.03 million, $0.04 million and $0.07 million, respectively, in Q3'07, Q4'07 and FY'07, respectively; and (iii) each of operating income, net income and EBITDA was overstated by approximately $0.7 million, $0.03 million and $0.8 million, respectively, in Q3'07, Q4'07 and FY'07, respectively. The errors did not affect the Company's previously reported cash flows from operating activities, cash flows from investing activities or cash flows from financing activities for the 2007 Periods.

As previously reported, the Company had received from Nasdaq an exception allowing the Company to regain compliance by February 8, 2010, with the Nasdaq listing rule that requires the filing of all required periodic financial reports with the Securities and Exchange Commission. The Company anticipates regaining compliance with that Nasdaq listing rule on or before February 8, 2010.

TheStreet.com will conduct a conference call Monday, January 25, 2010, at 4:30 p.m. EST to discuss these preliminary results. To participate in the call, dial (866) 730-5767 (domestic) or (857) 350-1591 (international).The passcode for the call is 88920700.

To access the Web cast of the call please visit:

http://www.thestreet.com/investor-relations/index.html?detailInclude=IROL-IRhome

(Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

About TheStreet.com

TheStreet.com is a leading digital financial media company. The Company's network includes the following properties: TheStreet.com, RealMoney.com, Stockpickr.com, BankingMyWay.com, MainStreet.com, and Rate-Watch.com. For more information and to get stock quotes and business news, visit http://www.thestreet.com.

(1) "Cash" includes cash, cash equivalents and restricted cash.

(2) To supplement the Company's financial statements presented in accordance with generally accepted accounting principles ("GAAP"), TheStreet.com, Inc. 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, 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 and impairment expenses, as well as other non-standard one-time charges. 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. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measure included in this press release has been reconciled to the nearest GAAP measure.

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.

Note regarding financial statements attached to this press release:

You are referred to the Company's prior filings with the Securities and Exchange Commission, including without limitation the Company's annual report on Form 10-K for the year ended December 31, 2008 and quarterly reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008 (collectively, the "2008 Reports"). The financial statements attached to this press release related to the 2008 fiscal year and the quarters contained therein should be read in the context of the Company's prior disclosures in the 2008 Reports, including without limitation the notes to financial statements contained therein, except to the extent that any such information is being restated herein.

THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
         
    Unaudited
   

For the Three
Months Ended
September 30,

 

For the Nine
Months Ended
September 30,

         
    2009   2009
Revenue:        
Paid services   $ 9,373,672     $ 28,310,049  
Marketing services     5,861,931       15,418,258  
Total revenue     15,235,603       43,728,307  
         
Operating expense:        
Cost of services     7,156,120       22,666,527  
Sales and marketing     3,005,218       8,768,054  
General and administrative     5,266,804       13,129,465  
Intangible asset impairment     -       24,137,069  
Depreciation and amortization     1,348,806       4,027,253  
Restructuring expense     169,692       2,728,502  
Total operating expense     16,946,640       75,456,870  
Operating loss     (1,711,037 )     (31,728,563 )
Net interest income     186,342       775,896  
Gain on sales of marketable securities     34,684       295,430  
Other income     -       153,677  
Loss from continuing operations before income taxes     (1,490,011 )     (30,503,560 )
Benefit (provision) for income taxes     53,222       (16,283,105 )
Loss from continuing operations     (1,436,789 )     (46,786,665 )
Discontinued operations:        
Loss on disposal of discontinued operations     1,846       10,453  
Loss from discontinued operations     1,846       10,453  
Net loss     (1,438,635 )     (46,797,118 )
Preferred stock cash dividends     96,424       289,272  
Net loss attributable to common stockholders   $ (1,535,059 )   $ (47,086,390 )
         
Basic net loss per share:        
Loss from continuing operations   $ (0.05 )   $ (1.53 )
Loss on disposal of discontinued operations     (0.00 )     (0.00 )
Net loss     (0.05 )     (1.53 )
Preferred stock dividends     (0.00 )     (0.01 )
Net loss attributable to common stockholders   $ (0.05 )   $ (1.54 )
         
Diluted net loss per share:        
Loss from continuing operations   $ (0.05 )   $ (1.53 )
Loss on disposal of discontinued operations     (0.00 )     (0.00 )
Net loss     (0.05 )     (1.53 )
Preferred stock dividends     (0.00 )     (0.01 )
Net loss attributable to common stockholders   $ (0.05 )   $ (1.54 )
         
Weighted average basic shares outstanding     30,606,216       30,574,361  
Weighted average diluted shares outstanding     30,606,216       30,574,361  
         
Adjusted EBITDA        
Net loss   $ (1,438,635 )   $ (46,797,118 )
Interest     (186,342 )     (775,896 )
Gain on sales of marketable securities     (34,684 )     (295,430 )
(Benefit) provision for income taxes     (53,222 )     16,283,105  
Depreciation & amortization     1,348,806       4,027,253  
EBITDA     (364,077 )     (27,558,086 )
Other income     -       (153,677 )
Intangible asset impairment     -       24,137,069  
Restructuring and other charge     169,692       2,728,502  
Costs of review of Promotions.com accounting     1,307,778       1,307,778  
Noncash compensation     573,221       2,158,815  
Adjusted EBITDA   $ 1,686,614     $ 2,620,401  
THESTREET.COM, INC.
CONSOLIDATED BALANCE SHEET
     
    Unaudited
ASSETS   September 30, 2009
Current Assets:    
Cash and cash equivalents   $ 60,486,534  
Restricted cash     500,000  
Marketable securities     2,816,411  
Accounts receivable, net of allowance for doubtful    
accounts of $129,918     5,508,175  
Other receivables     268,841  
Prepaid expenses and other current assets     1,817,184  
Current assets held for sale     3,089,853  
Total current assets     74,486,998  
     
Property and equipment, net of accumulated depreciation    
and amortization of $12,557,033     8,011,657  
Marketable securities     17,461,005  
Long term investment     555,000  
Other assets     77,710  
Goodwill     20,181,000  
Other intangibles, net     8,003,942  
Restricted cash     1,660,371  
Noncurrent assets held for sale     1,976,751  
Total assets   $ 132,414,434  
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities:    
Accounts payable   $ 2,078,814  
Accrued expenses     5,791,362  
Deferred revenue     16,918,187  
Other current liabilities     181,431  
Current liabilities of discontinued operations     223,204  
Current liabilities held for sale     1,983,055  
Total current liabilities     27,176,053  
Other liabilities     885,447  
Noncurrent liabilities held for sale     14,521  
Total liabilities     28,076,021  
     
Stockholders' Equity:    
Preferred stock; $0.01 par value; 10,000,000 shares    
authorized; 5,500 shares issued and 5,500 shares    
outstanding; the aggregate liquidation preference totals $55,000,000     55  
Common stock; $0.01 par value; 100,000,000 shares    
authorized; 36,598,461 shares issued and 30,516,727    
shares outstanding     365,985  
Additional paid-in capital     270,621,024  
Accumulated other comprehensive income     389,777  
Treasury stock at cost; 6,081,734 shares     (10,411,952 )
Accumulated deficit     (156,626,476 )
Total stockholders' equity     104,338,413  
     
Total liabilities and stockholders' equity   $ 132,414,434  
THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
           
    Unaudited
   

For the Three
Months Ended
June 30,

   

For the Six
Months Ended
June 30,

           
    2009     2009
Revenue:          
Paid services   $ 9,428,936       $ 18,936,377  
Marketing services     5,563,305         9,556,326  
Total revenue     14,992,241         28,492,703  
           
Operating expense:          
Cost of services     7,264,697         15,510,407  
Sales and marketing     2,785,929         5,762,836  
General and administrative     3,320,983         7,862,661  
Intangible asset impairment     -         24,137,069  
Depreciation and amortization     1,207,710         2,678,447  
Restructuring expense     574,281         2,558,810  
Total operating expense     15,153,600         58,510,230  
Operating loss     (161,359 )       (30,017,527 )
Net interest income     359,417         589,554  
Gain on sales of marketable securities     260,746         260,746  
Other income     -         153,677  
Income (loss) from continuing operations before income taxes     458,804         (29,013,550 )
Provision for income taxes     109,250         16,336,327  
Income (loss) from continuing operations     349,554         (45,349,877 )
Discontinued operations:          
Loss on disposal of discontinued operations     9,532         8,607  
Loss from discontinued operations     9,532         8,607  
Net income (loss)     340,022         (45,358,484 )
Preferred stock cash dividends     96,424         192,848  
Net income (loss) attributable to common stockholders   $ 243,598       $ (45,551,332 )
           
Basic net income (loss) per share:          
Income (loss) from continuing operations   $ 0.01       $ (1.48 )
Loss on disposal of discontinued operations     (0.00 )       (0.00 )
Net income (loss)     0.01         (1.48 )
Preferred stock dividends     (0.00 )       (0.01 )
Net income (loss) attributable to common stockholders     0.01       $ (1.49 )
           
Diluted net income (loss) per share:          
Income (loss) from continuing operations   $ 0.01       $ (1.48 )
Loss on disposal of discontinued operations     (0.00 )       (0.00 )
Net income (loss)     0.01         (1.48 )
Preferred stock dividends     (0.00 )       (0.01 )
Net income (loss) attributable to common stockholders   $ 0.01       $ (1.49 )
           
Weighted average basic shares outstanding     30,620,349         30,558,170  
Weighted average diluted shares outstanding     30,620,349         30,558,170  
           
Adjusted EBITDA          
Net income (loss)   $ 340,022       $ (45,358,484 )
Interest     (359,417 )       (589,554 )
Gain on sales of marketable securities     (260,746 )       (260,746 )
Provision for income taxes     109,250         16,336,327  
Depreciation & amortization     1,207,710         2,678,447  
EBITDA     1,036,819         (27,194,010 )
Other income     -         (153,677 )
Intangible asset impairment     -         24,137,069  
Restructuring and other charge     574,281         2,558,810  
Noncash compensation     341,981         1,585,594  
Adjusted EBITDA   $ 1,953,081       $ 933,786  
THESTREET.COM, INC.
CONSOLIDATED BALANCE SHEET
     
    Unaudited
ASSETS   June 30, 2009
Current Assets:    
Cash and cash equivalents   $ 63,411,600  
Restricted cash     500,000  
Marketable securities     799,031  
Accounts receivable, net of allowance for doubtful    
accounts of $100,436     5,090,863  
Other receivables     495,954  
Prepaid expenses and other current assets     2,174,219  
Current assets held for sale     2,557,445  
Total current assets     75,029,112  
     
Property and equipment, net of accumulated depreciation    
and amortization of $11,671,141     8,547,244  
Marketable Securities     15,692,510  
Long term investment     555,000  
Other assets     81,610  
Goodwill     20,181,000  
Other intangibles, net     8,359,945  
Restricted cash     1,660,371  
Noncurrent assets held for sale     2,122,494  
Total assets   $ 132,229,286  
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities:    
Accounts payable   $ 1,786,259  
Accrued expenses     5,247,683  
Deferred revenue     16,285,222  
Other current liabilities     132,300  
Current liabilities of discontinued operations     231,955  
Current liabilities held for sale     2,185,932  
Total current liabilities     25,869,351  
Other Liabilities     541,532  
Noncurrent liabilities held for sale     17,083  
Total liabilities     26,427,966  
     
Stockholders' Equity:    
Preferred stock; $0.01 par value; 10,000,000 shares    
authorized; 5,500 shares issued and 5,500 shares    
outstanding; the aggregate liquidation preference totals $55,000,000     55  
Common stock; $0.01 par value; 100,000,000 shares    
authorized; 36,598,461 shares issued and 30,620,942    
shares outstanding     365,985  
Additional paid-in capital     270,955,796  
Accumulated other comprehensive income     (202,104 )
Treasury stock at cost; 5,977,519 shares     (10,130,571 )
Accumulated deficit     (155,187,841 )
Total stockholders' equity     105,801,320  
     
Total liabilities and stockholders' equity   $ 132,229,286  
THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                             
    Unaudited   Unaudited   Unaudited   Unaudited   Unaudited
   

For the Three Months Ended
March 31, 2008

 

For the Three Months Ended
June 30, 2008

 

For the Three Months
Ended September 30, 2008

 

For the Three Months
Ended December 31, 2008

 

For the Year Ended
December 31, 2008

    As Filed   Adjustment   As Restated   As Filed   Adjustment   As Restated   As Filed   Adjustment   As Restated   As Filed   Adjustment   As Restated   As Filed   Adjustment   As Restated
Net revenue:                                                            
Paid services   $ 10,759,469     $ -     $ 10,759,469     $ 10,289,939     $ -     $ 10,289,939     $ 10,244,212     $ -     $ 10,244,212     $ 9,892,368     $ -     $ 9,892,368     $ 41,185,988     $ -     $ 41,185,988  
Marketing services     8,188,516       (955,959 )     7,232,557       9,398,992       (1,285,110 )     8,113,882       6,478,367       326,058       6,804,425       6,648,568       862,613       7,511,181       30,714,443       (1,052,398 )     29,662,045  
Total net revenue     18,947,985       (955,959 )     17,992,026       19,688,931       (1,285,110 )     18,403,821       16,722,579       326,058       17,048,637       16,540,936       862,613       17,403,549       71,900,431       (1,052,398 )     70,848,033  
                                                             
Operating expense:                                                            
Cost of services     7,656,127       (45,439 )     7,610,688       8,366,156       (45,439 )     8,320,717       8,405,002       (45,439 )     8,359,563       7,777,480       (83,671 )     7,693,809       32,204,765       (219,987 )     31,984,778  
Sales and marketing     3,763,595       -       3,763,595       3,630,394       -       3,630,394       3,550,363       -       3,550,363       3,318,847       -       3,318,847       14,263,199       -       14,263,199  
General and administrative     4,355,545       -       4,355,545       4,078,822       -       4,078,822       4,589,851       -       4,589,851       4,538,020       (41,000 )     4,497,020       17,562,238       (41,000 )     17,521,238  
Intangible asset impairment     -       -       -       -       -       -       -       -       -       2,325,481       -       2,325,481       2,325,481       -       2,325,481  
Depreciation and amortization     1,263,604       -       1,263,604       1,584,780       -       1,584,780       1,481,670       -       1,481,670       1,564,132       -       1,564,132       5,894,186       -       5,894,186  
Total operating expense     17,038,871       (45,439 )     16,993,432       17,660,152       (45,439 )     17,614,713       18,026,886       (45,439 )     17,981,447       19,523,960       (124,671 )     19,399,289       72,249,869       (260,987 )     71,988,882  
Operating income (loss)     1,909,114       (910,520 )     998,594       2,028,779       (1,239,671 )     789,108       (1,304,307 )     371,496       (932,811 )     (2,983,024 )     987,284       (1,995,740 )     (349,438 )     (791,410 )     (1,140,848 )
Net interest income     686,194       -       686,194       400,243       -       400,243       345,675       -       345,675       141,640       -       141,640       1,573,752       -       1,573,752  
Gain on sale of marketable security     -       -       -       -       -       -       -       -       -       120,937       -       120,937       120,937       -       120,937  
Income (loss) from continuing operations before income taxes     2,595,308       (910,520 )     1,684,788       2,429,022       (1,239,671 )     1,189,351       (958,632 )     371,496       (587,136 )     (2,720,447 )     987,284       (1,733,163 )     1,345,251       (791,410 )     553,841  
(Provision) benefit for income taxes     (145,928 )     -       (145,928 )     (125,693 )         (125,693 )     (106,364 )     -       (106,364 )     375,945       -       375,945       (2,040 )     -       (2,040 )
Income (loss) from continuing operations     2,449,380       (910,520 )     1,538,860       2,303,329       (1,239,671 )     1,063,658       (1,064,996 )     371,496       (693,500 )     (2,344,502 )     987,284       (1,357,218 )     1,343,211       (791,410 )     551,801  
Discontinued operations:                                                            
Loss on disposal of discontinued operations     2,731       -       2,731       2,085       -       2,085       3,079       -       3,079       117       -       117       8,012       -       8,012  
Loss from discontinued operations     2,731       -       2,731       2,085       -       2,085       3,079       -       3,079       117       -       117       8,012       -       8,012  
Net income (loss)     2,446,649       (910,520 )     1,536,129       2,301,244       (1,239,671 )     1,061,573       (1,068,075 )     371,496       (696,579 )     (2,344,619 )     987,284       (1,357,335 )     1,335,199       (791,410 )     543,789  
Preferred stock cash dividends     96,424       -       96,424       96,424       -       96,424       96,424       -       96,424       96,424       -       96,424       385,696       -       385,696  
Net income (loss) attributable to common stockholders   $ 2,350,225     $ (910,520 )   $ 1,439,705     $ 2,204,820     $ (1,239,671 )   $ 965,149     $ (1,164,499 )   $ 371,496     $ (793,003 )   $ (2,441,043 )   $ 987,284     $ (1,453,759 )   $ 949,503     $ (791,410 )   $ 158,093  
                                                             
Basic net income (loss) per share:                                                          
Income (loss) from continuing operations   $ 0.08         $ 0.05     $ 0.07         $ 0.03     $ (0.04 )       $ (0.03 )   $ (0.08 )       $ (0.05 )   $ 0.04         $ 0.02  
Loss on disposal of discontinued operations     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )
Net income (loss)     0.08           0.05       0.07           0.03       (0.04 )         (0.03 )     (0.08 )         (0.05 )     0.04           0.02  
Preferred stock dividends     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.01 )         (0.01 )
Net income (loss) attributable to common stockholders   $ 0.08         $ 0.05     $ 0.07         $ 0.03     $ (0.04 )       $ (0.03 )   $ (0.08 )       $ (0.05 )   $ 0.03         $ 0.01  
                                                             
Diluted net income (loss) per share:                                                          
Income (loss) from continuing operations   $ 0.07         $ 0.04     $ 0.07         $ 0.03     $ (0.04 )       $ (0.03 )   $ (0.08 )       $ (0.05 )   $ 0.04         $ 0.02  
Loss on disposal of discontinued operations     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )
Net income (loss)     0.07           0.04       0.07           0.03       (0.04 )         (0.03 )     (0.08 )         (0.05 )     0.04           0.02  
Preferred stock dividends    

(0.00

)

       

(0.00

)

    (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.01 )         (0.01 )
Net income (loss) attributable to common stockholders   $ 0.07         $ 0.04     $ 0.07         $ 0.03     $ (0.04 )       $ (0.03 )   $ (0.08 )       $ (0.05 )   $ 0.03         $ 0.01  
                                                             
Weighted average basic shares outstanding     30,392,980           30,392,980       30,452,497           30,452,497       30,482,949           30,482,949       30,381,156           30,381,156       30,427,421           30,427,421  
Weighted average diluted shares outstanding     34,615,221           34,615,221       34,597,480           34,597,480       30,482,949           30,482,949       30,381,156           30,381,156       30,835,131           30,835,131  
                                                             
Adjusted EBITDA                                                            
Net income (loss)   $ 2,446,649     $ (910,520 )   $ 1,536,129     $ 2,301,244     $ (1,239,671 )   $ 1,061,573     $ (1,068,075 )   $ 371,496     $ (696,579 )   $ (2,344,619 )   $ 987,284     $ (1,357,335 )   $ 1,335,199     $ (791,410 )   $ 543,789  
Net interest income     (686,194 )     -       (686,194 )     (400,243 )     -       (400,243 )     (345,675 )     -       (345,675 )     (141,640 )     -       (141,640 )     (1,573,752 )     -       (1,573,752 )
Gain on sale of marketable security     -       -       -       -       -       -       -       -       -       (120,937 )     -       (120,937 )     (120,937 )     -       (120,937 )
(Provision) benefit for income taxes     145,928       -       145,928       125,693       -       125,693       106,364       -       106,364       (375,945 )     -       (375,945 )     2,040       -       2,040  
Depreciation & amortization     1,263,604       -       1,263,604       1,584,780       -       1,584,780       1,481,670       -       1,481,670       1,564,132       -       1,564,132       5,894,186       -       5,894,186  
EBITDA     3,169,987       (910,520 )     2,259,467       3,611,474       (1,239,671 )     2,371,803       174,284       371,496       545,780       (1,419,009 )     987,284       (431,725 )     5,536,736       (791,410 )     4,745,326  
Intangible asset impairment     -       -       -       -       -       -       -       -       -       2,325,481       -       2,325,481       2,325,481       -       2,325,481  
Noncash compensation     701,097       -       701,097       952,035       -       952,035       986,076       -       986,076       897,877       -       897,877       3,537,086       -       3,537,086  
Adjusted EBITDA   $ 3,871,084     $ (910,520 )   $ 2,960,564     $ 4,563,509     $ (1,239,671 )   $ 3,323,838     $ 1,160,360     $ 371,496     $ 1,531,856     $ 1,804,349     $ 987,284     $ 2,791,633     $ 11,399,303     $ (791,410 )   $ 10,607,893  
THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                       
    Unaudited   Unaudited   Unaudited   Unaudited   Unaudited   Unaudited   Unaudited
   

For the Three Months Ended
March 31, 2008

 

For the Three Months Ended
June 30, 2008

 

For the Three Months Ended
September 30, 2008

 

For the Three Months Ended
December 31, 2008

 

For the Three Months Ended
March 31, 2009

 

For the Three Months Ended
June 30, 2009

 

For the Three Months Ended
September 30, 2009

    As Restated     Promotions. com (1)   Excluding Promotions. com (1)   As Restated   Promotions. com (1)   Excluding Promotions. com (1)   As Restated   Promotions. com (1)   Excluding Promotions. com (1)   As Restated   Promotions. com (1)   Excluding Promotions. com (1)   As Filed   Promotions. com (1)   Excluding Promotions. com (1)   As Reported   Promotions. com (1)   Excluding Promotions. com (1)   As Reported   Promotions. com (1)   Excluding Promotions. com (1)
Revenue:                                                                                      
Paid services   $ 10,759,469       $ 93     $ 10,759,376     $ 10,289,939     $ 93     $ 10,289,846     $ 10,244,212     $ 62     $ 10,244,150     $ 9,892,368     $ 399     $ 9,891,969     $ 9,507,441     $ 99     $ 9,507,342     $ 9,428,936     $ -     $ 9,428,936     $ 9,373,672     $ -     $ 9,373,672  
Marketing services     7,232,557         1,269,812       5,962,745       8,113,882       1,736,031       6,377,851       6,804,425       1,367,792       5,436,633       7,511,181       2,161,878       5,349,303       4,519,423       1,355,598       3,163,825       5,563,305       995,590       4,567,715       5,861,931       1,557,974       4,303,957  
Total revenue     17,992,026         1,269,905       16,722,121       18,403,821       1,736,124       16,667,697       17,048,637       1,367,854       15,680,783       17,403,549       2,162,277       15,241,272       14,026,864       1,355,697       12,671,167       14,992,241       995,590       13,996,651       15,235,603       1,557,974       13,677,629  
                                                                                       
Operating expense:                                                                                      
Cost of services     7,610,688         1,363,783       6,246,905       8,320,717       1,704,955       6,615,762       8,359,563       1,708,133       6,651,430       7,693,809       1,296,651       6,397,158       8,251,217       973,999       7,277,218       7,264,697       1,076,817       6,187,880       7,156,120       1,192,077       5,964,043  
Sales and marketing     3,763,595         145,006       3,618,589       3,630,394       116,789       3,513,605       3,550,363       142,379       3,407,984       3,318,847       206,425       3,112,422       2,976,907       239,634       2,737,273       2,785,929       248,806       2,537,123       3,005,218       203,769       2,801,449  
General and administrative     4,355,545         548,819       3,806,726       4,078,822       514,829       3,563,993       4,589,851       536,548       4,053,303       4,497,020       460,379       4,036,641       4,663,678       799,202       3,864,476       3,320,983       387,475       2,933,508       5,266,804       556,600       4,710,204  
Intangible asset impairment     -         -       -       -       -       -       -       -       -       2,325,481       -       2,325,481       24,137,069       -       24,137,069       -       -       -       -       -       -  
Depreciation and amortization     1,263,604         -       1,263,604       1,584,780       -       1,584,780       1,481,670       -       1,481,670       1,564,132       -       1,564,132       1,470,737       -       1,470,737       1,207,710       -       1,207,710       1,348,806       -       1,348,806  
Restructuring expense     -         -       -       -       -       -       -       -       -       -       -       -       2,360,267       -       2,360,267       574,281       -       574,281       169,692       -       169,692  
Total operating expense     16,993,432         2,057,608       14,935,824       17,614,713       2,336,573       15,278,140       17,981,447       2,387,060       15,594,387       19,399,289       1,963,455       17,435,834       43,859,875       2,012,835       41,847,040       15,153,600       1,713,098       13,440,502       16,946,640       1,952,446       14,994,194  
Operating income (loss)     998,594         (787,703 )     1,786,297       789,108       (600,449 )     1,389,557       (932,811 )     (1,019,206 )     86,395       (1,995,740 )     198,822       (2,194,562 )     (29,833,011 )     (657,138 )     (29,175,873 )     (161,359 )     (717,508 )     556,149       (1,711,037 )     (394,472 )     (1,316,565 )
Net interest income     686,194         -       686,194       400,243       -       400,243       345,675       -       345,675       141,640       -       141,640       230,137       -       230,137       359,417       -       359,417       186,342       -       186,342  
Gain on sales of marketable securities     -         -       -       -       -       -       -       -       -       120,937       -       120,937       -       -       -       260,746       -       260,746       34,684       -       34,684  
Other income     -         -       -       -       -       -       -       -       -       -       -       -       153,677       -       153,677       -       -       -       -       -       -  
Income (loss) from continuing operations before income taxes     1,684,788         (787,703 )     2,472,491       1,189,351       (600,449 )     1,789,800       (587,136 )     (1,019,206 )     432,070       (1,733,163 )     198,822       (1,931,985 )     (29,449,197 )     (657,138 )     (28,792,059 )     458,804       (717,508 )     1,176,312       (1,490,011 )     (394,472 )     (1,095,539 )
(Provision) benefit for income taxes     (145,928 )       -       (145,928 )     (125,693 )     -       (125,693 )     (106,364 )     -       (106,364 )     375,945       -       375,945       (16,227,077 )     -       (16,227,077 )     (109,250 )     -       (109,250 )     53,222       -       53,222  
Income (loss) from continuing operations     1,538,860         (787,703 )     2,326,563       1,063,658       (600,449 )     1,664,107       (693,500 )     (1,019,206 )     325,706       (1,357,218 )     198,822       (1,556,040 )     (45,676,274 )     (657,138 )     (45,019,136 )     349,554       (717,508 )     1,067,062       (1,436,789 )     (394,472 )     (1,042,317 )
Discontinued operations:                                                                                      
Loss (income) on disposal of discontinued operations     2,731         -       2,731       2,085       -       2,085       3,079       -       3,079       117       -       117       (925 )     -       (925 )     9,532       -       9,532       1,846       -       1,846  
Loss from discontinued operations     2,731         -       2,731       2,085       -       2,085       3,079       -       3,079       117       -       117       (925 )     -       (925 )     9,532       -       9,532       1,846       -       1,846  
Net income (loss)     1,536,129         (787,703 )     2,323,832       1,061,573       (600,449 )     1,662,022       (696,579 )     (1,019,206 )     322,627       (1,357,335 )     198,822       (1,556,157 )     (45,675,349 )     (657,138 )     (45,018,211 )     340,022       (717,508 )     1,057,530       (1,438,635 )     (394,472 )     (1,044,163 )
Preferred stock cash dividends     96,424         -       96,424       96,424       -       96,424       96,424       -       96,424       96,424       -       96,424       96,424       -       96,424       96,424       -       96,424       96,424       -       96,424  
Net income (loss) attributable to common stockholders   $ 1,439,705       $ (787,703 )   $ 2,227,408     $ 965,149     $ (600,449 )   $ 1,565,598     $ (793,003 )   $ (1,019,206 )   $ 226,203     $ (1,453,759 )   $ 198,822     $ (1,652,581 )   $ (45,771,773 )   $ (657,138 )   $ (45,114,635 )   $ 243,598     $ (717,508 )   $ 961,106     $ (1,535,059 )   $ (394,472 )   $ (1,140,587 )
                                                                                       
Basic net income (loss) per share:                                                                                
Income (loss) from continuing operations   $ 0.05           $ 0.07     $ 0.03         $ 0.05     $ (0.03 )       $ 0.01     $ (0.05 )       $ (0.05 )   $ (1.50 )       $ (1.48 )   $ 0.01         $ 0.03     $ (0.05 )       $ (0.04 )
Loss on disposal of discontinued operations     (0.00 )           (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     0.00           0.00       (0.00 )         (0.00 )     (0.00 )         (0.00 )
Net income (loss)     0.05             0.07       0.03           0.05       (0.03 )         0.01       (0.05 )         (0.05 )     (1.50 )         (1.48 )     0.01           0.03       (0.05 )         (0.04 )
Preferred stock dividends     (0.00 )           (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )
Net income (loss) attributable to common stockholders   $ 0.05           $ 0.07     $ 0.03         $ 0.05     $ (0.03 )       $ 0.01     $ (0.05 )       $ (0.05 )   $ (1.50 )       $ (1.48 )   $ 0.01         $ 0.03     $ (0.05 )       $ (0.04 )
                                                                                       
Diluted net income (loss) per share:                                                                                
Income (loss) from continuing operations   $ 0.04           $ 0.06     $ 0.03         $ 0.05     $ (0.03 )       $ 0.01     $ (0.05 )       $ (0.05 )   $ (1.50 )       $ (1.48 )   $ 0.01         $ 0.03     $ (0.05 )       $ (0.04 )
Loss on disposal of discontinued operations     (0.00 )           (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     0.00           0.00       (0.00 )         (0.00 ) #   (0.00 )         (0.00 )
Net income (loss)     0.04             0.06       0.03           0.05       (0.03 )         0.01       (0.05 )         (0.05 )     (1.50 )         (1.48 )     0.01           0.03       (0.05 )         (0.04 )
Preferred stock dividends     (0.00 )           (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )     (0.00 )         (0.00 )
Net income (loss) attributable to common stockholders   $ 0.04           $ 0.06     $ 0.03         $ 0.05     $ (0.03 )       $ 0.01     $ (0.05 )       $ (0.05 )   $ (1.50 )       $ (1.48 )   $ 0.01         $ 0.03     $ (0.05 )       $ (0.04 )
                                                                                       
Weighted average basic shares outstanding     30,392,980             30,392,980       30,452,497           30,452,497       30,482,949           30,482,949       30,381,156           30,381,156       30,495,300           30,495,300       30,620,349           30,620,349       30,606,216           30,606,216  
Weighted average diluted shares outstanding     34,615,221             34,615,221       34,597,480           34,597,480       30,482,949           30,482,949       30,381,156           30,381,156       30,495,300           30,495,300       30,620,349           30,620,349       30,606,216           30,606,216  
                                                                                       
Adjusted EBITDA                                                                                      

Net income (loss)

  $ 1,536,129       $ 787,703     $ 2,323,832     $ 1,061,573     $ 600,449     $ 1,662,022     $ (696,579 )   $ 1,019,206     $ 322,627     $ (1,357,335 )   $ (198,822 )   $ (1,556,157 )   $ (45,675,349 )   $ 657,138     $ (45,018,211 )   $ 340,022     $ 717,508     $ 1,057,530     $ (1,438,635 )   $ 394,472     $ (1,044,163 )
Interest     (686,194 )       -       (686,194 )     (400,243 )     -       (400,243 )     (345,675 )     -       (345,675 )     (141,640 )     -       (141,640 )     (230,137 )     -       (230,137 )     (359,417 )     -       (359,417 )     (186,342 )     -       (186,342 )
Gain on sales of marketable securities     -         -       -       -       -       -       -       -       -       (120,937 )     -       (120,937 )     -       -       -       (260,746 )     -       (260,746 )     (34,684 )     -       (34,684 )
Provision (benefit) for income taxes     145,928         -       145,928       125,693       -       125,693       106,364       -       106,364       (375,945 )     -       (375,945 )     16,227,077       -       16,227,077       109,250       -       109,250       (53,222 )     -       (53,222 )
Depreciation & amortization     1,263,604         -       1,263,604       1,584,780       -       1,584,780       1,481,670       -       1,481,670       1,564,132       -       1,564,132       1,470,737       -       1,470,737       1,207,710       -       1,207,710       1,348,806       -       1,348,806  
EBITDA     2,259,467         787,703       3,047,170       2,371,803       600,449       2,972,252       545,780       1,019,206       1,564,986       (431,725 )     (198,822 )     (630,547 )     (28,207,672 )     657,138       (27,550,534 )     1,036,819       717,508       1,754,327       (364,077 )     394,472       30,395  
Other income     -         -       -       -       -       -       -       -       -       -       -       -       (153,677 )     -       (153,677 )     -       -       -       -       -       -  
Intangible asset impairment     -         -       -       -       -       -       -       -       -       2,325,481       -       2,325,481       24,137,069       -       24,137,069       -       -       -       -       -       -  
Restructuring expense     -         -       -       -       -       -       -       -       -       -       -       -       2,360,267       -       2,360,267       574,281       -       574,281       169,692       -       169,692  
Costs of review of Promotions.com accounting     -         -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       1,307,778       -       1,307,778  
Noncash compensation     701,097         (7,063 )     694,034       952,035       (11,563 )     940,472       986,076       (13,610 )     972,466       897,877       (11,696 )     886,181       1,243,613       (4,986 )     1,238,627       341,981       (3,546 )     338,435       573,221       (3,585 )     569,636  
Adjusted EBITDA   $ 2,960,564       $ 780,640     $ 3,741,204     $ 3,323,838     $ 588,886     $ 3,912,724     $ 1,531,856     $ 1,005,596     $ 2,537,452     $ 2,791,633     $ (210,518 )   $ 2,581,115     $ (620,400 )   $ 652,152     $ 31,752     $ 1,953,081     $ 713,962     $ 2,667,043     $ 1,686,614     $ 390,887     $ 2,077,501  
                                                                                       
                                                                                       
(1) The above information with respect to Promotions.com is presented as a non-GAAP measure for illustrative purposes regarding the disposition of the Company's Promotions.com subsidiary and is not meant to represent a reflection of the operating activities of the Promotions.com subsidiary as if it was on a fully stand-alone basis.
Promotions.com was a legal subsidiary of the Company whose activities were a part of the combined results of the Company. Historically, Promotions.com was not considered an operating segment as management did not measure its results separately nor did management maintain separate discrete financial information including cash flows for its activities.
The column "Excluding Promotions.com" gives effect to the disposition of the Promotions.com subsidiary as if such disposition had taken place on the first day of such respective period.

SOURCE: TheStreet.com, Inc.

TheStreet.com, Inc.
Gregory Barton, 212-321-5484
IR@thestreet.com

TheStreet, Inc.: (TST)   $0.76

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Wednesday, Mar 29, 2017 - 03:59 PM

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