TheStreet Reports Fourth Quarter and Full Year 2011 Results

NEW YORK, March 7, 2012 (GLOBE NEWSWIRE) -- TheStreet (Nasdaq:TST), a leading digital financial media company, today reported financial results for the fourth quarter and full year of 2011. The Company reported revenue of $57.8 million, a net loss of $(8.2) million and Adjusted EBITDA(1) of $2.0 million for the year and revenue of $14.3 million, a net loss of $(2.4) million and Adjusted EBITDA of $1.2 million for the quarter.

"During the fourth quarter, our business continued to make solid progress in a number of our key strategic initiatives," said Daryl Otte, the Company's Chief Executive Officer. "The size of our audience continued to grow, fueled in large part by the expanding distribution associated with our new TheStreet Business Desk™ service, which is seeing excellent adoption rates. Download and usage patterns of our new mobile services accelerated and we saw steady growth from our new institutional premium service.   We faced certain challenges in monetizing our growing audiences during the quarter, which we believe was due in part to a softness in the digital financial media vertical during the quarter, as retail investors were less active, and due in part to some execution issues.  To address the latter, we initiated changes late in 2011 to flatten parts of the organization, lower costs and improve our capabilities.  Even with this quarter's challenges, we benefited from the diversity of our revenue streams and careful cost management.  For the full year, we delivered on our promise of maintaining good progress on our key investment initiatives while showing revenue growth, positive Adjusted EBITDA and positive operating cash flow," Mr. Otte concluded.

Financial Highlights of Full Year and Fourth Quarter 2011

The Company's revenue from ongoing businesses(2) of $57.8 million during fiscal year 2011 was an increase of 2% as compared to the prior year.  For the fourth quarter of 2011, the Company's revenue was $14.3 million, a decrease of 3% as compared to the prior year period.

  • Premium Services revenue from ongoing businesses increased 4% in fiscal year 2011 and 4% in the fourth quarter of 2011, as compared to the respective prior year periods.
  • Premium Services bookings increased 6% in fiscal year 2011 and decreased 7% in the fourth quarter of 2011, as compared to the respective prior year periods. Bookings grew sequentially by 7% in the fourth quarter of 2011 over the third quarter of 2011.
  • The average number of paid subscriptions was 88,422 in the fourth quarter of 2011, compared to an average of 90,640 in the fourth quarter of 2010, a decrease of 2%.
  • Average monthly churn(3) increased to 3.8% in fourth quarter of 2011, compared to 2.7% in the third quarter of 2011 and 3.6% in the fourth quarter of 2010.  As a reminder, there will be moderate quarterly fluctuations in churn due to the quarterly fluctuations in the size of the subscription renewal pools and other factors.
  • Marketing Services revenue decreased 2% in fiscal year 2011 and decreased 16% in the fourth quarter of 2011, as compared to the respective prior year periods.
  • Average monthly unique visitors to the Company's network of sites for the fourth quarter of 2011, as measured internally, were up 25% as compared to the prior year period.

Operating expenses from ongoing businesses for the full year 2011 were $66.6 million, an increase of 6% as compared to the prior year. The increase in operating expenses from ongoing businesses for the year is primarily due to restructuring and other costs of $1.8 million and investments in cost of sales and sales and marketing offset in part by a 12% decrease in general and administrative expenses.  In addition, 2010 operating expenses from ongoing businesses were positively impacted by a $1.3 million gain on the disposition of assets, offset in part by a $0.6 million asset impairment charge.  Operating expenses for the fourth quarter of 2011 were $16.8 million, an increase of 1% as compared to the prior year period, as decreases in cost of sales, sales and marketing, general and administrative and depreciation and amortization expenses were more than offset by the $1.8 million restructuring charge. 

The Company had a net loss from ongoing businesses of $(8.2) million and $(2.4) million in fiscal year 2011 and the fourth quarter of 2011, respectively, as compared to a net loss from ongoing businesses of $(5.4) million and $(1.7) million during the respective prior year periods. The Company reported basic and diluted net loss per share attributable to common stockholders of $(0.27) for the full year of 2011, as compared to $(0.18) for the full year of 2010. The Company reported basic and diluted net loss per share attributable to common stockholders of $(0.08) and $(0.08), respectively, in the fourth quarter of 2011, as compared to $(0.06) and $(0.06), respectively, in the prior year period. 

Adjusted EBITDA from ongoing businesses improved $0.8 million to $2.0 million in the fiscal year 2011, as compared to $1.2 million in the prior year. For the fourth quarter of 2011, Adjusted EBITDA from ongoing businesses improved $1.2 million to $1.2 million, as compared to $0.0 million in the prior year period. 

The Company ended the quarter with cash and cash equivalents, restricted cash and marketable securities of $75.3 million, a decrease of $1.5 million as compared to September 30, 2011. The Company achieved free cash flow (1) for the full year 2011 of $1.6 million.

The Company paid a dividend of 2.5 cents per share during the quarter and 10 cents per share during the year.

Today, the Company also announced that it has hired Elisabeth DeMarse as Chief Executive Officer and President and a director of the Company, effective later today. In December, the Company announced that Daryl Otte, the Company's Chief Executive Officer and a director, would be resigning his positions by March 31, 2012 and assisting the Company with the transition to a successor and he will do so. "We are very excited to announce the hiring of Elisabeth, who previously served as Chief Executive Officer of Bankrate and CreditCards.com, and we again wish to express our appreciation to Daryl for the putting in place during the past three years many of the foundations for the Company's future growth," said Woody Marshall, the Company's Chairman.

Conference Call Information

TheStreet will discuss its financial results for the fourth quarter and full year 2011 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 48050825. This call is being webcast and can be accessed on the Investor Relations section of TheStreet website at www.t.st

An audio replay of the conference call also will be available approximately two hours after the conclusion of the call. The audio replay will remain available until Wednesday, March 14, 2012 at 11:59 p.m. ET and can be accessed by dialing 855-859-2056 (domestic) or 404-537-3406 (international) and entering the replay passcode 48050825. 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 include: TheStreet, RealMoney, RealMoney Pro, Stockpickr, Action Alerts PLUS, Options Profits, ETF 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 via your web browser, follow TheStreet on Facebook and Twitter, visit TheStreet.mobi from your mobile device and access TheStreet through all major tablet platforms.

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 and impairment expenses, and 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.  "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) The Company's ongoing businesses exclude (i) the banking and insurance ratings business of TheStreet Ratings, which the Company divested in May 2010 and (ii) revenue derived from the global research legal settlement that expired in July 2009.

 (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 December 31,
  2011 2010
Current Assets:    
Cash and cash equivalents  $ 44,865,191  $ 20,089,660
Accounts receivable, net of allowance for doubtful accounts of $158,870 at December 31, 2011 and $238,228 at December 31, 2010  6,225,424  6,623,261
Marketable securities  20,895,238  26,502,945
Other receivables  356,219  663,968
Prepaid expenses and other current assets  1,421,955  1,785,007
Restricted cash  660,370  -- 
 Total current assets  74,424,397  55,664,841
     
Property and equipment, net of accumulated depreciation and amortization of $13,466,365 at December 31, 2011 and $12,845,359 at December 31, 2010   8,494,648  10,887,732
Marketable securities  7,894,365  30,302,428
Other assets  172,055  243,611
Goodwill  24,057,616  24,057,616
Other intangibles, net of accumulated amortization of $5,529,730 at December 31, 2011 and $4,174,403 at December 31, 2010  5,370,135  6,725,462
Restricted cash  1,000,000  1,660,370
 Total assets  $ 121,413,216  $ 129,542,060
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities:    
Accounts payable  $ 2,305,589  $ 2,455,894
Accrued expenses  7,970,802  8,239,064
Deferred revenue   17,625,666  17,431,381
Other current liabilities  509,214  184,328
Liabilities of discontinued operations  --   1,871
 Total current liabilities  28,411,271  28,312,538
Deferred tax liability  288,000  288,000
Other liabilities  4,569,497  2,948,181
 Total liabilities  33,268,768  31,548,719
     
Stockholders' Equity:    
Preferred stock; $0.01 par value; 10,000,000 shares authorized; 5,500 shares issued and 5,500 shares outstanding at December 31, 2011 and December 31, 2010; the aggregate liquidation preference totals $55,000,000 as of December 31, 2011 and December 31, 2010  55  55
Common stock; $0.01 par value; 100,000,000 shares authorized; 38,461,595 shares issued and 32,131,188 shares outstanding at December 31, 2011, and 37,775,381 shares issued and 31,667,600 shares outstanding at December 31, 2010  384,616  377,754
Additional paid-in capital  270,230,246  270,644,658
Accumulated other comprehensive income  (394,600)  331,311
Treasury stock at cost; 6,330,407 shares at December 31, 2011 and 6,107,781 shares at December 31, 2010  (11,010,149)  (10,478,838)
Accumulated deficit  (171,065,720)  (162,881,599)
 Total stockholders' equity  88,144,448  97,993,341
     
 Total liabilities and stockholders' equity  $ 121,413,216  $ 129,542,060
 
THESTREET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
         
  For the Three Months Ended December 31, For the Year Ended December 31,
  2011 2010 2011 2010
Net revenue:        
Premium services  $ 9,835,537  $ 9,432,205  $ 39,514,153  $ 38,597,877
Marketing services  4,433,703  5,253,194  18,245,847  18,588,502
 Total net revenue  14,269,240  14,685,399  57,760,000  57,186,379
         
Operating expense:        
Cost of services  6,462,815  6,584,437  26,499,085  25,557,162
Sales and marketing  3,559,380  4,551,870  16,681,562  15,841,470
General and administrative  3,651,415  4,049,472  15,810,994  18,052,633
Depreciation and amortization  1,264,840  1,466,552  5,757,365  4,692,520
Restructuring and other charges  1,825,799  --   1,825,799  -- 
Asset impairments  --   --   --   555,000
Gain on disposition of assets  --   --   --   (1,318,607)
 Total operating expense  16,764,249  16,652,331  66,574,805  63,380,178
 Operating loss  (2,495,009)  (1,966,932)  (8,814,805)  (6,193,799)
Net interest income  137,924  203,674  667,822  846,157
Loss on sale of marketable securities  (35,340)  --   (35,340)  -- 
Other income  --   --   --   20,374
 Loss from continuing operations before income taxes  (2,392,425)  (1,763,258)  (8,182,323)  (5,327,268)
Benefit (provision) for income taxes  --   --   --   -- 
 Loss from continuing operations  (2,392,425)  (1,763,258)  (8,182,323)  (5,327,268)
Discontinued operations:        
 Gain (loss) from discontinued operations  --   16,091  (1,798)  (7,339)
Net loss  (2,392,425)  (1,747,167)  (8,184,121)  (5,334,607)
Preferred stock cash dividends  96,424  96,424  385,696  385,696
Net loss attributable to common stockholders  $ (2,488,849)  $ (1,843,591)  $ (8,569,817)  $ (5,720,303)
         
Basic and diluted net loss per share:        
 Loss from continuing operations  $ (0.08)  $ (0.06)  $ (0.26)  $ (0.17)
 Loss from discontinued operations  --   0.00  (0.00)  (0.00)
 Net loss  (0.08)  (0.06)  (0.26)  (0.17)
 Preferred stock dividends  (0.00)  (0.00)  (0.01)  (0.01)
 Net loss attributable to common stockholders  $ (0.08)  $ (0.06)  $ (0.27)  $ (0.18)
         
Weighted average basic and diluted shares outstanding  32,014,179  31,660,752  31,953,683  31,593,341
 
THESTREET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
     
  For the Years Ended December 31,
  2011 2010
Cash Flows from Operating Activities:    
Net loss  $ (8,184,121)  $ (5,334,607)
Loss from discontinued operations  1,798 7,339
Loss from continuing operations  (8,182,323)  (5,327,268)
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities:    
Stock-based compensation expense  2,777,886  2,336,443
Restructuring and other charges  647,152  -- 
Provision for doubtful accounts  150,825  62,559
Depreciation and amortization  5,757,365  4,692,520
Deferred rent  663,020  1,703,614
Noncash barter activity  (107,210)  (76,060)
Impairment charges  --   555,000
Gain on disposition of assets  --   (1,318,607)
Gain on disposal of equipment  --   (20,600)
Changes in operating assets and liabilities:    
 Accounts receivable   214,891 (672,611)
 Other receivables  74,870 314,054
 Prepaid expenses and other current assets  469,366 (53,061)
 Other assets  37,904  (97,115)
 Accounts payable  (150,305) 292,477
 Accrued expenses  (69,262) 659,907
 Deferred revenue  1,272,137 488,571
 Other current liabilities   6,330 50,455
 Other liabilities   --   15,167
 Net cash provided by continuing operations  3,562,646  3,605,445
 Net cash used in discontinued operations  (3,669)  (228,633)
 Net cash provided by operating activities  3,558,977  3,376,812
     
Cash Flows from Investing Activities:    
Purchase of marketable securities  (24,854,469)  (130,963,472)
Sale of marketable securities  52,144,328  94,473,125
Sale of Promotions.com  265,000 1,746,876
Sale of certain assets of TheStreet Ratings  --  1,348,902
Capital expenditures  (1,974,406) (6,717,749)
Proceeds from the sale of fixed assets  --   43,300
 Net cash provided by (used in) investing activities  25,580,453  (40,069,018)
     
Cash Flows from Financing Activities:    
Cash dividends paid on common stock  (3,446,892)  (3,349,755)
Cash dividends paid on preferred stock  (385,696)  (385,696)
Restricted stock  --  41,709
Purchase of treasury stock  (531,311)  (66,886)
 Net cash used in financing activities  (4,363,899)  (3,760,628)
Net increase (decrease) in cash and cash equivalents  24,775,531  (40,452,834)
Cash and cash equivalents, beginning of period  20,089,660  60,542,494
Cash and cash equivalents, end of period  $ 44,865,191  $ 20,089,660
     
Supplemental disclosures of cash flow information:    
     
Cash payments made for interest  $ --   $ 1,720
Cash payments made for income taxes  $ --   $ -- 
     
Net loss  $ (8,184,121)  $ (5,334,607)
Noncash expenditures  9,889,038  7,934,869
Changes in operating assets and liabilities  1,854,060  776,550
Capital expenditures  (1,974,406)  (6,717,749)
Free cash flow  $ 1,584,571  $ (3,340,937)
 
THESTREET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
             
  For the Three Months Ended December 31, 2011 For the Three Months Ended December 31, 2010
  As Reported Pro Forma
Adjustments
Pro Forma
Results
As Reported Pro Forma
Adjustments
Pro Forma
Results
Net revenue:            
Premium services  $ 9,835,537  $ --   $ 9,835,537  $ 9,432,205  $ 2,000  $ 9,430,205
Marketing services  4,433,703  --   4,433,703  5,253,194  --   5,253,194
 Total net revenue  14,269,240  --   14,269,240  14,685,399  2,000  14,683,399
             
Operating expense:            
Cost of services  6,462,815  --   6,462,815  6,584,437  --   6,584,437
Sales and marketing  3,559,380  --   3,559,380  4,551,870  --   4,551,870
General and administrative  3,651,415  --   3,651,415  4,049,472  --   4,049,472
Depreciation and amortization  1,264,840  --   1,264,840  1,466,552  --   1,466,552
Restructuring and other charges  1,825,799  --   1,825,799  --   --   -- 
 Total operating expense  16,764,249  --   16,764,249  16,652,331  --   16,652,331
 Operating loss  $ (2,495,009)  $ --   $ (2,495,009)  $ (1,966,932)  $ 2,000  $ (1,968,932)
             
Net loss  $ (2,392,425)  $ --   $ (2,392,425)  $ (1,747,167)  $ 2,000  $ (1,749,167)
             
             
Net loss  $ (2,392,425)  $ --   $ (2,392,425)  $ (1,747,167)  $ 2,000  $ (1,749,167)
Net interest income  (137,924)  --   (137,924)  (203,674)  --   (203,674)
Loss on sale of marketable securities  35,340  --   35,340  --   --   -- 
Depreciation and amortization  1,264,840  --   1,264,840  1,466,552  --   1,466,552
EBITDA  (1,230,169)  --   (1,230,169)  (484,289)  2,000  (486,289)
Noncash compensation  611,725  --   611,725  529,360  --   529,360
Restructuring and other charges  1,825,799  --   1,825,799  --   --   -- 
Transaction related costs  40,069  --   40,069  (28,374)  --   (28,374)
Adjusted EBITDA  $ 1,247,424  $ --   $ 1,247,424  $ 16,697  $ 2,000  $ 14,697
             
Note: Pro forma adjustments for 2010 exclude TheStreet Ratings revenue from global research settlement. 
 
THESTREET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
             
  For the Year Ended December 31, 2011 For the Year Ended December 31, 2010
  As Reported Pro Forma
Adjustments
Pro Forma
Results
As Reported Pro Forma
Adjustments
Pro Forma
Results
Net revenue:            
Premium services  $ 39,514,153  $ --   $ 39,514,153  $ 38,597,877  $ 465,008  $ 38,132,869
Marketing services  18,245,847  --   18,245,847  18,588,502  --   18,588,502
 Total net revenue  57,760,000  --   57,760,000  57,186,379  465,008  56,721,371
             
Operating expense:            
Cost of services  26,499,085  --   26,499,085  25,557,162  345,205  25,211,957
Sales and marketing  16,681,562  --   16,681,562  15,841,470  41,510  15,799,960
General and administrative  15,810,994  --   15,810,994  18,052,633  18,774  18,033,859
Depreciation and amortization  5,757,365  --   5,757,365  4,692,520  --   4,692,520
Restructuring and other charges  1,825,799  --   1,825,799  --   --   -- 
Asset impairments  --   --   --   555,000  --   555,000
Gain on disposition of assets  --   --   --   (1,318,607)  --   (1,318,607)
 Total operating expense  66,574,805  --   66,574,805  63,380,178  405,489  62,974,689
 Operating loss  $ (8,814,805)  $ --   $ (8,814,805)  $ (6,193,799)  $ 59,519  $ (6,253,318)
             
Net loss  $ (8,184,121)  $ --   $ (8,184,121)  $ (5,334,607)  $ 59,519  $ (5,394,126)
             
             
Net loss  $ (8,184,121)  $ --   $ (8,184,121)  $ (5,334,607)  $ 59,519  $ (5,394,126)
Net interest income  (667,822)  --   (667,822)  (846,157)  --   (846,157)
Loss on sale of marketable securities  35,340  --   35,340  --   --   -- 
Depreciation and amortization  5,757,365  --   5,757,365  4,692,520  --   4,692,520
EBITDA  (3,059,238)  --   (3,059,238)  (1,488,244)  59,519  (1,547,763)
Noncash compensation  2,777,886  --   2,777,886  2,336,443  --   2,336,443
Restructuring and other charges  1,825,799  --   1,825,799  --   --   -- 
Asset impairments  --   --   --   555,000  --   555,000
Gain on disposition of assets  --   --   --   (1,318,607)  --   (1,318,607)
Other income  --   --   --   (20,374)  --   (20,374)
Transaction related costs  459,637  --   459,637  1,177,868  --   1,177,868
Adjusted EBITDA  $ 2,004,084  $ --   $ 2,004,084  $ 1,242,086  $ 59,519  $ 1,182,567
             
Note: Pro forma adjustments for 2010 exclude the Company's May 2010 divestiture of our Banking and Insurance Ratings product line as well as TheStreet Ratings revenue from global research settlement. 
CONTACT: Thomas Etergino

         Executive Vice President, Chief Financial Officer

         TheStreet, Inc.

         212-321-5234

         ir@thestreet.com



         Erica Mannion

         Investor Relations

         Sapphire Investor Relations, LLC

         415-471-2700

         ir@thestreet.com

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Monday, Nov 20, 2017 - 04:00 PM

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