TheStreet.com Reports Second-Quarter Financial Results

Expanding Network Drives 32% Year-Over-Year Revenue Growth
Reminder: Conference Call Today at 11:00 a.m. ET

NEW YORK--(BUSINESS WIRE)--July 31, 2008--TheStreet.com, Inc. (Nasdaq: TSCM), a leading financial media company, reported financial results for its quarter and half-year, ended June 30, 2008.

Second-Quarter and Year-to-Date 2008 Results

For the quarter ended June 30, 2008, TheStreet.com reported revenue of $19.7 million, an increase of 32% over revenue of $14.9 million for the second quarter of 2007.

TheStreet.com reported second-quarter net income of $2.3 million, or $0.07 per basic and diluted share, as compared to $3.6 million, or $0.12 per basic and diluted share, in the second quarter of 2007. Net income attributable to common stockholders for the second quarter of 2008, after deducting preferred stock dividends of $0.1 million, was $2.2 million, or $0.07 per fully diluted share.

Earnings before interest, taxes, depreciation and amortization, excluding stock compensation of $1.0 million ("Adjusted EBITDA"), was $4.6 million, an increase of 16% over Adjusted EBITDA of $3.9 million in the second quarter of 2007, exclusive of $0.5 million of stock compensation.

"Our second-quarter results confirm that our decision to position TheStreet.com network as the leading online destination for 'all things money' continues to resonate with the advertising community," said Thomas J. Clarke, Jr., chairman and chief executive officer of TheStreet.com. "With a record number of unique visitors, the highest monetization rate in our history and our continued strength with non-financial advertisers, we are well positioned to take advantage of the opportunities before us."

For the six months ended June 30, 2008, TheStreet.com reported revenue of $38.6 million, an increase of 31% over revenue of $29.4 million for the same period of 2007.

The Company reported net income of $4.7 million for the six months ended June 30, 2008, as compared to $6.6 million reported in the same period of 2007. Net income attributable to common stockholders for the first half of 2008, after deducting preferred stock dividends of $0.2 million, was $4.6 million, or $0.14 per fully diluted share.

Earnings before interest, taxes, depreciation and amortization, excluding stock compensation of $1.7 million ("Adjusted EBITDA"), was $8.4 million, an increase of 14% over Adjusted EBITDA of $7.4 million for the same period of 2007, exclusive of $1.1 million of stock compensation.

    Second-Quarter Financial Highlights

    --  Marketing services revenue totaled $9.4 million for the second
        quarter of 2008, an increase of 71% over revenue of $5.5
        million for the second quarter of 2007.

        --  Advertising revenue totaled $6.4 million for the current
            quarter, an increase of 16% over revenue of $5.5 million
            in the quarter one year ago.

        --  Interactive marketing services revenue, derived from
            Promotions.com, which was acquired on August 2, 2007,
            totaled $3.0 million for the second quarter.

    --  Paid services revenue totaled $10.3 million for the second
        quarter of 2008, an increase of 9% over revenue of $9.4
        million for the second quarter of 2007.

        --  Subscription revenue, excluding the impact of subscription
            revenue from TheStreet.com Ratings Print Directory
            business, which was outsourced in the second quarter of
            2007, was $7.6 million, a decrease of 5% from the $8.0
            million in the prior year.

        --  Syndication, licensing and information services revenue
            totaled $2.7 million for the current quarter, an increase
            of 217% over revenue of $0.8 million in the quarter one
            year ago, primarily resulting from the acquisition of
            Bankers Financial Products Corp. in November 2007.

    --  Marketing services and paid services revenue in the second
        quarter of 2008 accounted for 48% and 52%, respectively, of
        total revenue. This compares to a revenue mix of 37% for
        marketing services and 63% for paid services in the second
        quarter of 2007.

    --  TheStreet.com reported a 34% year-over-year increase in
        non-financial advertising revenue in the quarter.
        Non-financial advertising revenue represents 45% of total
        advertising revenue in the quarter, up from 39% in the second
        quarter of 2007.

    --  During the quarter, the Company generated cash flow from
        operations of $2.1 million, while free cash flow totaled $1.0
        million.

    --  As of June 30, 2008, cash, cash equivalents and restricted
        cash stood at $81.1 million. The Company has no bank debt.

    --  Interest income in the second quarter decreased 34% year over
        year, as the effective yield on our cash balances declined to
        1.92%, as compared to 5.23% in the prior year.

    --  The board of directors declared the Company's quarterly cash
        dividend, payable to all shareholders of record at the close
        of business on June 24, 2008. The cash dividend of $0.025 per
        share was paid on June 30, 2008.

    Recent Company Highlights

    --  TheStreet.com entered into a content distribution agreement
        with Internet Broadcasting Systems to provide articles and
        videos from its network of properties to the Web sites of
        local television stations included in the IBS Network. Content
        from TheStreet.com, Stockpickr.com and TheStreet.com TV join
        content from MainStreet.com, which was already a featured
        content provider to the Internet Broadcasting Local Network.

    --  TheStreet.com continued to expand its relationship with
        Google's YouTube. TheStreet.com TV became a premium content
        partner with YouTube, entering into a content licensing
        agreement that will create an ad-supported TSC channel within
        YouTube. The ad-supported channel will feature greater TSC
        network branding, including links to www.mainstreet.com and an
        increase in video content delivered daily. The TSC YouTube
        Channel will be monetized through Google advertising programs
        and deliver to YouTube viewers an enhanced Street.com TV
        experience when visiting the Channel.

    --  TheStreet.com launched two new subscription newsletter
        products in the second quarter:

        --  "Nails on the Numbers" was launched in partnership with
            long-time and popular contributor Lenny "Nails" Dykstra.
            As the exclusive home of Dykstra's "deep in the money
            calls," the product's trading strategy focuses on
            undervalued option prices for large, blue-chip companies.

        --  TheStreet.com "InsiderInsights" was also launched.
            Researched and written by Jonathan Moreland, who has been
            tracking insider activity for nearly 15 years,
            "InsiderInsights" focuses on bullish and bearish stock
            recommendations based on insider buying and selling.

    --  Promotions.com, along with its partner The Marketing Store,
        was awarded the Webby People's Voice Award in the "Email
        Marketing" category for the McDonald's Monopoly promotion, the
        largest online promotion in the world.

    --  TheStreet.com and Dividend.com, the number one source for
        dividend stock research, entered into a content sharing
        agreement that will feature Dividend.com content prominently
        on TheStreet.com network of sites. Dividend.com provides daily
        news updates and analysis on dividend stocks. Dividend.com
        will be powered by TheStreet.com, allowing the Company to sell
        advertising on its site.

    --  TheStreet.com won two New York Press Club Awards. The Company
        captured honors in the Best Business and Best Political
        coverage in the Internet category.

TheStreet.com will conduct a conference call today July 31, 2008, at 11:00 a.m. EST to discuss these results. To participate in the call, dial 866.761.0749 (domestic) or 617.614.2707 (international). The passcode for the call is 30947627.

To access the Web cast of the call please visit:

http://www.thestreet.com/investor-relations/index.html?detail

Include=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, Inc.

TheStreet.com is a leading financial media company. It engages audiences on video and digital platforms through some of the Web's best known sites: TheStreet.com, RealMoney.com, Stockpickr.com, BankingMyWay.com, MainStreet.com, Rate-Watch.com and Promotions.com. Through this network, the company produces and distributes content in all areas where life and money intersect to inform, engage and activate one of the most affluent, influential audiences on the Web today. For more information, please visit www.thestreet.com.

                         THESTREET.COM, INC.
                     CONSOLIDATED BALANCE SHEETS

                                         June 30, 2008  December 31,
                                                             2007
                                         -------------- --------------
                 ASSETS
Current Assets:
Cash and cash equivalents                $  80,445,570  $  79,170,754
Accounts receivable, net of allowance
 for doubtful
 accounts of $362,936 at June 30, 2008
  and $242,807
 at December 31, 2007                       12,418,910     11,133,957
Other receivables                            1,227,468      1,227,144
Deferred taxes                               5,800,000      5,800,000
Prepaid expenses and other current
 assets                                      2,573,372      1,652,608
                                         -------------- --------------
      Total current assets                 102,465,320     98,984,463


 Property and equipment, net of
  accumulated depreciation
  and amortization of $18,982,016 at
   June 30, 2008
  and $17,493,847 at December 31, 2007       8,671,531      7,730,922
Long term investment                         1,392,976              -
Other assets                                   222,927        328,117
Goodwill                                    40,001,665     40,245,413
Other intangibles, net                      17,334,670     18,368,792
Deferred taxes                              10,200,000     10,200,000
Restricted cash                                618,660        576,951
                                         -------------- --------------
      Total assets                       $ 180,907,749  $ 176,434,658
                                         ============== ==============

  LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable                         $   2,265,764  $   2,189,259
Accrued expenses                             3,470,673      5,006,635
Deferred revenue                            17,199,950     16,240,008
Other current liabilities                      390,418        214,654
Current liabilities of discontinued
 operations                                    223,925        232,242
                                         -------------- --------------
      Total current liabilities             23,550,730     23,882,798
Other liabilities                               91,813         90,105
                                         -------------- --------------
      Total liabilities                     23,642,543     23,972,903
                                         -------------- --------------






Stockholders' Equity:
Preferred stock; $0.01 par value;
 10,000,000 shares
 authorized; 5,500 shares issued and
  5,500 shares
 outstanding at June 30, 2008 and
  December 31, 2007;
 the aggregate liquidation preference
  totals $55,000,000 as of
 June 30, 2008 and $55,096,424 as of
  December 31, 2007                                 55             55
Common stock; $0.01 par value;
 100,000,000 shares
 authorized; 36,262,546 shares issued
  and 30,482,949
 shares outstanding at June 30, 2008,
  and 36,006,137
 shares issued and 30,254,137 shares
  outstanding
 at December 31, 2007                          362,625        360,061
Additional paid-in capital                 271,131,031    270,752,308
Treasury stock at cost; 5,779,597 shares
 at June 30, 2008
 and 5,752,000 shares at December 31,
  2007                                      (9,359,200)    (9,033,471)
Accumulated deficit                       (104,869,305)  (109,617,198)
                                         -------------- --------------
      Total stockholders' equity           157,265,206    152,461,755
                                         -------------- --------------

      Total liabilities and
       stockholders' equity              $ 180,907,749  $ 176,434,658
                                         ============== ==============

Note: The Company has pledged cash as a security deposit for operating
 leases. Accordingly, this cash is classified as restricted cash, and
 our cash is classified in several places on the above balance sheet.



                                         June 30, 2008  December 31,
                                                             2007
                                         -------------- --------------
Cash and cash equivalents                $  80,445,570  $  79,170,754
Noncurrent restricted cash                     618,660        576,951
                                         -------------- --------------
Total cash and cash equivalents and
 noncurrent restricted cash              $  81,064,230  $  79,747,705
                                         ============== ==============
                         THESTREET.COM, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS

                     For the Three Months
                              Ended          For the Six Months Ended
                            June 30,                 June 30,
                    ------------------------ -------------------------
                        2008        2007         2008         2007
                    ------------ ----------- ------------ ------------
Revenue:
Paid services       $10,289,939  $ 9,404,349 $21,049,408  $18,842,900
Marketing services    9,398,992    5,494,939  17,587,508   10,563,952
                    ------------ ----------- ------------ ------------
     Total revenue   19,688,931   14,899,288  38,636,916   29,406,852
                    ------------ ----------- ------------ ------------

Operating expense:
Cost of services      8,366,156    5,645,418  16,022,283   11,271,507
Sales and marketing   3,630,394    3,055,464   7,393,989    6,385,204
General and
 administrative       4,078,822    2,765,133   8,434,367    5,473,154
Depreciation and
 amortization         1,584,780      435,935   2,848,384      815,142
                    ------------ ----------- ------------ ------------
     Total
      operating
      expense        17,660,152   11,901,950  34,699,023   23,945,007
                    ------------ ----------- ------------ ------------
     Operating
      income          2,028,779    2,997,338   3,937,893    5,461,845
Net interest income     400,243      625,042   1,086,437    1,225,699
                    ------------ ----------- ------------ ------------
  Income from
   continuing
   operations
   before income
   taxes              2,429,022    3,622,380   5,024,330    6,687,544
Provision for
 Income taxes           125,693       72,454     271,621      133,729
                    ------------ ----------- ------------ ------------
  Income from
   continuing
   operations         2,303,329    3,549,926   4,752,709    6,553,815
Discontinued
 operations:
(Loss) income on
 disposal of
 discontinued
 operations              (2,085)         262      (4,816)      (1,123)
                    ------------ ----------- ------------ ------------
Net income            2,301,244    3,550,188   4,747,893    6,552,692
Preferred stock
 cash dividends          96,424            -     192,848            -
                    ------------ ----------- ------------ ------------
Net income
 attributable to
 common
 stockholders       $ 2,204,820  $ 3,550,188 $ 4,555,045  $ 6,552,692
                    ============ =========== ============ ============

Basic net income
 (loss) per share:
  Income from
   continuing
   operations       $      0.07  $      0.12 $      0.16  $      0.23
  (Loss) income on
   disposal of
   discontinued
   operations             (0.00)        0.00       (0.00)       (0.00)
  Preferred stock
   cash dividends         (0.00)           -       (0.01)           -
                    ------------ ----------- ------------ ------------
Net income
 attributable to
 common
 stockholders       $      0.07  $      0.12 $      0.15  $      0.23
                    ============ =========== ============ ============

Diluted net income
 (loss) per share:
  Income from
   continuing
   operations       $      0.07  $      0.12 $      0.14  $      0.23
  (Loss) income on
   disposal of
   discontinued
   operations             (0.00)        0.00       (0.00)       (0.00)
  Preferred stock
   cash dividends             -            -           -            -
                    ------------ ----------- ------------ ------------
Net income
 attributable to
 common
 stockholders       $      0.07  $      0.12 $      0.14  $      0.23
                    ============ =========== ============ ============

Weighted average
 basic shares
 outstanding         30,452,497   28,422,332  30,422,738   28,184,671
                    ============ =========== ============ ============
Weighted average
 diluted shares
 outstanding         34,597,480   28,651,451  34,647,940   28,388,565
                    ============ =========== ============ ============

To supplement the Company's financial statements presented in accordance with generally accepted accounting principles ("GAAP"), TheStreet.com 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 expense. 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.

                  For the Three Months Ended For the Six Months Ended
                           June 30,                  June 30,
                  -------------------------- -------------------------
                       2008         2007         2008         2007
                  -------------- ----------- ------------ ------------
Adjusted EBITDA     $ 4,563,508  $3,945,422  $ 8,434,592  $ 7,427,312
Less stock
 compensation          (952,034)   (477,644)  (1,653,131)  (1,071,581)
                  -------------- ----------- ------------ ------------
EBITDA                3,611,474   3,467,778    6,781,461    6,355,731
Add net interest
 income                 400,243     625,042    1,086,437    1,225,699
Less taxes             (125,693)   (106,697)    (271,621)    (213,596)
Less depreciation
 and
amortization         (1,584,780)   (435,935)  (2,848,384)    (815,142)
                  -------------- ----------- ------------ ------------
Net income          $ 2,301,244  $3,550,188  $ 4,747,893  $ 6,552,692
                  ============== =========== ============ ============

"Free cash flow" means net income plus non-cash expenses less changes in working capital and capital expenditures. TheStreet.com believes that this non-GAAP financial measure is an important indicator of the Company's financial results because it gives investors a clear view of the Company's ability to generate cash. The presentation of this non-GAAP financial measure should be considered in addition to TheStreet.com's GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

                  For the Three Months Ended For the Six Months Ended
                           June 30,                  June 30,
                  -------------------------- -------------------------
                       2008         2007         2008         2007
                  -------------- ----------- ------------ ------------
Free cash flow      $   993,061  $2,311,329  $ 4,469,688  $ 5,097,341
Non-cash expenses    (2,641,428)   (907,300)  (4,687,242)  (1,916,170)
Changes in
 working capital      2,845,591     518,927    2,471,086      813,171
Capital
 expenditures         1,104,020   1,627,232    2,494,361    2,558,350
                  -------------- ----------- ------------ ------------
Net income          $ 2,301,244  $3,550,188  $ 4,747,893  $ 6,552,692
                  ============== =========== ============ ============

Statements contained in this news release not related to historical facts may be 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 (described in the Company's SEC filings) that could cause actual results to differ.

CONTACT: TheStreet.com, Inc.
Rebecca Updegraph, 212-321-5008
Investor Relations
IR@TheStreet.com

SOURCE: TheStreet.com, Inc.

TheStreet, Inc.: (TST)   $0.83

- 0.02(2.479%)
Tuesday, Jul 25, 2017 - 04:00 PM

Follow us

Press Contacts

To book a reporter or expert from TheStreet, Inc., please contact:

Jon Kostakopoulos
212-321-5561
jon.kostakopoulos@thestreet.com
 

Recent Tweets