February 21, 2013

TheStreet Announces Fourth Quarter & Full Year 2012 Financial Results

NEW YORK, Feb. 21, 2013 /PRNewswire/ -- TheStreet (NASDAQ: TST), a leading digital financial media company, today reported financial results for the fourth quarter and full year 2012.  The Company reported revenue of $50.7 million, a net loss of $12.7 million and Adjusted EBITDA(1) of $1.3 million for the full year. The Company reported revenue of $13.8 million, a net loss of $2.2 million and Adjusted EBITDA(1) of $0.5 million for the quarter. Excluding payments related to restructuring and other charges, the Company generated more than $0.7 million in operating cash flow for the fourth quarter. The fourth quarter and full year results reflect the operations of The Deal, since our acquisition was completed on September 11, 2012.

Revenue for the full year decreased 12.2% compared to the full year of 2011, while revenue in the fourth quarter decreased 3.1% compared to the same period last year. Subscription Services revenue for the full year was $38.2 million, a decrease of 3.2% compared to the full year of 2011, while Subscription Services revenue was $11.1 million for the fourth quarter, an increase of 12.8% compared to the prior year period.  Media revenue for the full year was $12.5 million, a decrease of 31.6% from the full year of 2011, while Media revenue was $2.7 million for the fourth quarter, a decrease of 38.3% compared to the prior year period. 

Operating expenses for the full year were $63.8 million, a decrease of 4.2% compared to 2011.  Excluding $6.4 million and $1.8 million related to restructuring and other charges and gain on disposition of assets in 2012 and 2011, respectively, operating expenses declined 11.3% compared to 2011. Operating expenses in the fourth quarter were $16.1 million, a decrease of 4.2% as compared to the prior year period. Excluding $0.5 million and $1.8 million related to restructuring and other charges and gain on disposition of assets in the fourth quarter of 2012 and 2011, respectively, operating expenses increased 4.0% compared to the prior year period.

Adjusted EBITDA (1) for the full year was $1.3 million compared to $2.0 million for the full year of 2011.  Adjusted EBITDA (1) was $0.5 million in the fourth quarter, as compared to $1.2 million in the prior year period.

"In the fourth quarter, we continued to execute our turnaround strategy by right-sizing our cost structure, including moving most of our operations to the cloud, and integrating The Deal.   Our strong balance sheet, ending the year with $60.5 million in cash and investments, allowed us to complete a large portion of our restructuring in 2012.  We will continue to focus on driving subscription revenue, optimizing our free site and modernizing our technology infrastructure in the new year," said Elisabeth DeMarse, Chairman, President and Chief Executive Officer.

Selected Operating Results of Fourth Quarter and Full Year 2012

  • Average revenue per user for the full year increased 6.3% as compared to the full year of 2011. Average revenue per user in the fourth quarter increased 6.1% as compared to the prior year period (2).
  • Average monthly churn of 2.6% for the fourth quarter improved from 3.8% in the prior year period (2) (3).
  • The average number of paid subscriptions was 73,993 for the quarter (2).     
  • Including The Deal, Subscription Services bookings for the full year decreased 7.9% from the full year of 2011, while Subscription Services bookings in the fourth quarter increased 21.1% as compared to the prior year period.

The Company's net loss for the full year was $12.7 million as compared to $8.2 million for the full year of 2011. Excluding the restructuring and other charges and the gain from disposition of assets of $6.4 million and $1.8 million in 2012 and 2011, respectively, net loss was $6.4 million, flat with the prior year. For the fourth quarter, net loss was $2.2 million as compared to a net loss of $2.4 million in the fourth quarter of 2011. Excluding the restructuring and other charges and the gain from disposition of assets of $0.5 million and $1.8 million in 2012 and 2011, respectively, net loss was $1.7 million, as compared to $0.6 million in the prior year.

The Company reported a net loss per share for the full year of $0.38 as compared to a net loss of $0.26 for the full year of 2011. Net loss per share was $0.07 in the fourth quarter of 2012, as compared to a net loss of $0.08 in the fourth quarter of 2011.   

The Company ended the year with cash and cash equivalents, restricted cash and marketable securities of $60.5 million.

Conference Call Information

TheStreet will discuss its financial results for the fourth quarter today at 4:30 p.m. ET.

To participate in the call, please dial 800-649-5127 (domestic) or 914-495-8549 (international).  The Conference ID number is 94061591.  This call is being webcast and can be accessed in the Investor Relations section of TheStreet website at http://investor-relations.thestreet.com/events.cfm.

A replay of the webcast will be available approximately two hours after the conclusion of the call and remain available in the Investor Relations section of TheStreet website at http://investor-relations.thestreet.com/events.cfm through March 15, 2013.

About TheStreet

TheStreet, Inc. is a leading digital financial media company that distributes its content through online, social media, tablet and mobile channels. The Company's network of brands includes: TheStreet, RealMoney, RealMoney Pro, The Deal, Stockpickr, Action Alerts PLUS, Options Profits, MainStreet and Rate-Watch. For more information on TheStreet's business, visit www.t.st. For financial and business news, actionable trading ideas, stock quotes and more, visit TheStreet.com, follow TheStreet on Facebook and Twitter, visit TheStreet.mobi from your mobile device and access TheStreet through all major tablet platforms. For more information on The Deal, visit www.thedeal.com.

The TheStreet, Inc. logo is available at:
http://photos.prnewswire.com/prnh/20130102/NY35868LOGO-b.

Non-GAAP Financial Information

 (1) To supplement the Company's financial statements presented in accordance with generally accepted accounting principles ("GAAP"), the Company uses non-GAAP measures of certain components of financial performance, including "EBITDA," "Adjusted EBITDA" and "free cash flow."  EBITDA is adjusted from results based on GAAP to exclude interest, income taxes, depreciation and amortization.  This non-GAAP measure is provided to enhance investors' overall understanding of the Company's current financial performance and its prospects for the future.  Specifically, the Company believes that the non-GAAP EBITDA results are an important indicator of the operational strength of the Company's business and provide an indication of the Company's ability to service debt and fund capital expenditures.  EBITDA eliminates the uneven effect of considerable amounts of noncash depreciation of tangible assets and amortization of certain intangible assets that were recognized in business combinations.  Adjusted EBITDA further eliminates the impact of noncash stock compensation, restructuring and other charges affecting comparability.  A limitation of these measures, however, is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company's businesses.  Management evaluates the investments in such tangible and intangible assets through other financial measures, such as capital expenditure budgets and investment spending levels.  "Free cash flow" means net loss plus non-cash expenses net of gains/losses on dispositions of assets, less changes in operating assets and liabilities and capital expenditures.  The Company believes that this non-GAAP financial measure is an important indicator of the Company's financial results because it gives investors a view of the Company's ability to generate cash.

(2) Calculation excludes the impact of The Deal.

(3) Average monthly churn rate is defined as subscriber terminations/expirations in the quarter divided by the sum of the beginning subscribers and gross subscriber additions for the quarter, then divided by three.  Subscriptions that are on a free-trial basis are not regarded as added or terminated unless the subscription is active at the end of the free-trial period.

Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include statements regarding the Company's restructuring initiatives and expectations for 2013.  Such forward-looking statements are subject to risks and uncertainties, including those described in the Company's filings with the Securities and Exchange Commission ("SEC") that could cause actual results to differ materially from those reflected in the forward-looking statements.  Factors that might contribute to such differences include, among others, economic downturns and the general state of the economy, including the financial markets and mergers and acquisitions environment, our ability to drive revenue, and increase or retain current subscription revenue, our ability to optimize our free site and generate new subscription revenue; our ability to successfully integrate The Deal and other acquisitions; our ability to develop new products; competition and other factors set forth in our filings with the SEC, which are available on the SEC's website at www.sec.gov.  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.

Contacts:
Elisabeth DeMarse
Chairman, President and Chief Executive Officer
TheStreet
212-321-5000
ir@thestreet.com

Erica Mannion
Investor Relations
Sapphire Investor Relations, LLC
415-471-2700
ir@thestreet.com 

 

 

THESTREET, INC.

CONSOLIDATED BALANCE SHEETS






ASSETS


December 31, 2012


December 31, 2011

Current Assets:





Cash and cash equivalents


$                23,845,360


$                44,865,191

Marketable securities


18,096,091


20,895,238

Accounts receivable, net of allowance for doubtful 





   accounts of $165,294 at December 31, 2012 and $158,870 at





   December 31, 2011


5,750,753


6,225,424

Other receivables


1,134,142


356,219

Prepaid expenses and other current assets


1,450,742


1,421,955

Restricted cash


-


660,370

      Total current assets


50,277,088


74,424,397






Property and equipment, net of accumulated depreciation





   and amortization of $14,633,037 at December 31, 2012





   and $13,466,365 at December 31, 2011


5,672,000


8,494,648

Marketable securities


17,298,227


7,894,365

Other assets


103,964


172,055

Goodwill


25,726,239


24,057,616

Other intangibles, net of accumulated amortization of $6,570,315





   at December 31, 2012 and $5,529,730 at December 31, 2011


11,156,550


5,370,135

Restricted cash


1,301,000


1,000,000

      Total assets


$              111,535,068


$              121,413,216






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Accounts payable


$                  3,813,955


$                  2,305,589

Accrued expenses


5,921,152


7,970,802

Deferred revenue 


21,080,759


17,625,666

Other current liabilities


632,618


509,214

      Total current liabilities


31,448,484


28,411,271

Deferred tax liability


288,000


288,000

Other liabilities


4,340,749


4,569,497

      Total liabilities


36,077,233


33,268,768






Stockholders' Equity:





Preferred stock; $0.01 par value; 10,000,000 shares





   authorized; 5,500 shares issued and 5,500 shares





   outstanding at December 31, 2012 and December 31, 2011;





   the aggregate liquidation preference totals $55,000,000 as of





   December 31, 2012 and December 31, 2011


55


55

Common stock; $0.01 par value; 100,000,000 shares





   authorized; 39,855,468 shares issued and 33,027,752





   shares outstanding at December 31, 2012, and 38,461,595





   shares issued and 32,131,188 shares outstanding at





   December 31, 2011


398,555


384,616

Additional paid-in capital


270,943,151


270,230,246

Accumulated other comprehensive income


(128,994)


(394,600)

Treasury stock at cost; 6,827,716 shares at December 31, 2012





   and 6,330,407 shares at December 31, 2011


(11,974,261)


(11,010,149)

Accumulated deficit


(183,780,671)


(171,065,720)

      Total stockholders' equity


75,457,835


88,144,448






      Total liabilities and stockholders' equity


$              111,535,068


$              121,413,216






 

THESTREET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS












For the Three Months Ended December 31,


For the Year Ended December 31,



2012


2011


2012


2011

Net revenue:









Subscription services


$            11,091,829


$              9,835,537


$            38,232,682


$            39,514,153

Media


2,734,236


4,433,703


12,488,121


18,245,847

   Total net revenue


13,826,065


14,269,240


50,720,803


57,760,000










Operating expense:









Cost of services


7,051,806


6,462,815


24,886,142


26,499,085

Sales and marketing


3,318,426


3,559,380


13,395,328


16,681,562

General and administrative


3,395,043


3,651,415


13,637,895


15,810,994

Depreciation and amortization


1,771,650


1,264,840


5,512,299


5,757,365

Restructuring and other charges


549,995


1,825,799


6,589,792


1,825,799

Gain on disposition of assets


(27,000)


-


(232,989)


-

     Total operating expense


16,059,920


16,764,249


63,788,467


66,574,805

     Operating loss


(2,233,855)


(2,495,009)


(13,067,664)


(8,814,805)

Net interest income


57,497


137,924


352,713


667,822

Loss on sale of marketable securities


-


(35,340)


-


(35,340)

  Loss from continuing operations before income taxes


(2,176,358)


(2,392,425)


(12,714,951)


(8,182,323)

Provision for income taxes


-


-


-


-

  Loss from continuing operations


(2,176,358)


(2,392,425)


(12,714,951)


(8,182,323)

Discontinued operations:









  Loss from discontinued operations


-


-


-


(1,798)

Net loss


(2,176,358)


(2,392,425)


(12,714,951)


(8,184,121)

Preferred stock cash dividends


-


96,424


192,848


385,696

Net loss attributable to common stockholders


$             (2,176,358)


$             (2,488,849)


$           (12,907,799)


$             (8,569,817)










Basic and diluted net loss per share:









  Loss from continuing operations


$                     (0.07)


$                     (0.08)


$                     (0.38)


$                     (0.26)

  Loss from discontinued operations


-


-


-


(0.00)

  Net loss


(0.07)


(0.08)


(0.38)


(0.26)

  Preferred stock dividends


-


(0.00)


(0.01)


(0.01)

     Net loss attributable to common stockholders


$                     (0.07)


$                     (0.08)


$                     (0.39)


$                     (0.27)










Weighted average basic and diluted shares outstanding


32,893,274


32,014,179


32,710,018


31,953,683










Net loss


$             (2,176,358)


$             (2,392,425)


$           (12,714,951)


$             (8,184,121)

Net interest income


(57,497)


(137,924)


(352,713)


(667,822)

Loss on sale of marketable securities


-


35,340


-


35,340

Depreciation and amortization


1,771,650


1,264,840


5,512,299


5,757,365

EBITDA


(462,205)


(1,230,169)


(7,555,365)


(3,059,238)

Restructuring and other charges


549,995


1,825,799


6,589,792


1,825,799

Stock based compensation


566,308


611,725


2,198,713


2,777,886

Loss (gain) on disposition of assets


(27,000)


-


(232,989)


-

Transaction related costs


(174,342)


40,069


344,305


459,637

Adjusted EBITDA


$                 452,756


$              1,247,424


$              1,344,456


$              2,004,084










THESTREET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS








For the Year Ended December 31,



2012


2011

Cash Flows from Operating Activities:





Net loss


$       (12,714,951)


$         (8,184,121)

Loss from discontinued operations


-


1,798

Loss from continuing operations


(12,714,951)


(8,182,323)

Adjustments to reconcile loss from continuing operations





   to net cash (used in) provided by operating activities:





Stock-based compensation expense


2,198,713


2,777,886

Provision for doubtful accounts


329,870


150,825

Depreciation and amortization


5,512,299


5,757,365

Restructuring and other charges


1,396,695


647,152

Deferred rent


(319,958)


663,020

Noncash barter activity


183,270


(107,210)

Gain on disposition of assets


(232,989)


-

Changes in operating assets and liabilities:





    Accounts receivable 


1,125,158


214,891

    Other receivables


(677,601)


74,870

    Prepaid expenses and other current assets


(294,567)


469,366

    Other assets


39,556


37,904

    Accounts payable


1,116,374


(150,305)

    Accrued expenses


(2,519,154)


(69,262)

    Deferred revenue


(1,100,272)


1,272,137

    Other current liabilities 


(240,830)


6,330

    Other liabilities


24,000


-

          Net cash (used in) provided by continuing operations


(6,174,387)


3,562,646

          Net cash used in discontinued operations


-


(3,669)

          Net cash (used in) provided by operating activities


(6,174,387)


3,558,977






Cash Flows from Investing Activities:





Purchase of marketable securities


(41,151,130)


(24,854,469)

Sale and maturity of marketable securities


34,812,021


52,144,328

Capital expenditures


(1,327,746)


(1,974,406)

Proceeds from the disposition of assets


249,300


-

Purchase of The Deal, LLC


(5,430,063)


-

Sale of Promotions.com


-


265,000

          Net cash (used in) provided by investing activities


(12,847,618)


25,580,453






Cash Flows from Financing Activities:





Cash dividends paid on common stock


(1,636,236)


(3,446,892)

Cash dividends paid on preferred stock


(192,848)


(385,696)

Proceeds from the sale of common stock


135,000


-

Restricted cash


660,370



Purchase of treasury stock


(964,112)


(531,311)

          Net cash used in financing activities


(1,997,826)


(4,363,899)

Net (decrease) increase in cash and cash equivalents


(21,019,831)


24,775,531

Cash and cash equivalents, beginning of period


44,865,191


20,089,660

Cash and cash equivalents, end of period


$        23,845,360


$        44,865,191






Supplemental disclosures of cash flow information:










Cash payments made for interest


$               30,028


$                       -

Cash payments made for income taxes


$                         -


$                       -






Net loss


$      (12,714,951)


$      (8,184,121)

Noncash expenditures


9,067,900


9,889,038

Changes in operating assets and liabilities


(2,527,336)


1,854,060

Capital expenditures


(1,327,746)


(1,974,406)

Free cash flow


$        (7,502,133)


$        1,584,571






SOURCE TheStreet

News Provided by Acquire Media


Close window | Back to top

Copyright 2014 TheStreet, Inc.