TheStreet Reports Second Quarter 2013 Results

NEW YORK, Aug. 8, 2013 /PRNewswire/ -- TheStreet, Inc. (NASDAQ: TST), a leading digital financial media company, today reported financial results for the second quarter of 2013.  The Company reported revenue of $13.5 million, a net loss of $1.1 million and Adjusted EBITDA(1) of $0.3 million for the quarter.  

The Company generated $1.2 million in operating cash flow for the six months ended June 30, 2013, compared to a use of $3.5 million in operating cash flow for the prior year period.

Revenue for the second quarter increased 8.0% compared to the same period last year and 7.2% sequentially.  Subscription Services revenue was $10.8 million for the second quarter, an increase of 23.4% compared to the prior year period and 4.9% sequentially.  The increase in revenue was a result of our acquisitions of The Deal and DealFlow Media properties, completed in September 2012 and April 2013, respectively.  Media revenue was $2.7 million for the second quarter, a decrease of 27.5% compared to the prior year period and an increase of 17.2% sequentially.

"TheStreet's second quarter revenue growth of 8% is our first year-over-year growth since 2011 and reflects the continued execution of our strategy.  We are driving revenue growth by smart acquisitions, investing in our institutional and retail subscription platforms, focusing on operational excellence and modernizing our infrastructure," said Elisabeth DeMarse, Chairman, President and Chief Executive Officer.

Operating expenses in the second quarter of 2013 were $14.6 million, an increase of 1.1% as compared to the prior year period.

The Company's net loss was $1.1 million in the second quarter of 2013 compared to a net loss of $1.9 million in the prior year period. The Company reported basic and diluted net loss per share attributable to common stockholders of $0.03 in the second quarter of 2013, as compared to a net loss per share of $0.06 in the prior year period.  

Adjusted EBITDA was $0.3 million in the second quarter of 2013 compared to $0.8 million in the prior year period.

The Company ended the second quarter of 2013 with cash and cash equivalents, restricted cash and marketable securities of $59.4 million.

Selected Operating Results of Second Quarter 2013

  • The number of paid subscriptions at period end was 77,711, an increase of 2.5% from the prior year and 2.1% sequentially (2).
  • Average monthly churn improved to 3.1% from 3.9% in the prior year period (2) (3).
  • Average revenue per user decreased 1.2% as compared to the prior year period (2).

Conference Call Information

TheStreet will discuss its financial results for the second 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 19198656. This call is being webcast and can be accessed in the Investor Relations section of TheStreet website at
http://investor-relations.thestreet.com/events.cfm.

A replay of the webcast will be available approximately two hours after the conclusion of the call and remain available for approximately ninety calendar days.

About TheStreet

TheStreet, Inc. (www.t.st) is the leading independent digital financial media company providing business and financial news, investing ideas and analysis to personal and institutional investors worldwide.  The Company's portfolio of business and personal finance brands includes: TheStreet, RealMoney, RealMoney Pro, Stockpickr, Action Alerts PLUS, Options Profits, MainStreet and RateWatch. To learn more, visit www.thestreet.com.  The Deal, the Company's institutional business, provides intraday coverage of mergers and acquisitions and all other changes in corporate control.  To learn more, visit www.thedeal.com.

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 acquisitions and capital expenditures.  EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation of tangible assets and amortization of certain intangible assets that were recognized in business combinations.  Adjusted EBITDA further eliminates the impact of non-cash stock compensation, restructuring, transaction related costs 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) Excludes the impact of the acquisition of The Deal and DealFlow Media assets.

(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 impact of the Company's growth initiatives, internal investments, strategy 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:
John Ferrara
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

THESTREET, INC.

CONSOLIDATED BALANCE SHEETS





ASSETS

June 30, 2013


December 31, 2012


(unaudited)



Current Assets:




Cash and cash equivalents

$    37,563,708


$   23,845,360

Marketable securities

12,574,470


18,096,091

Accounts receivable, net of allowance for doubtful 




   accounts of $195,102 as of June 30, 2013 and $165,291 as of




   December 31, 2012

5,140,565


5,750,753

Other receivables, net

540,974


1,134,142

Prepaid expenses and other current assets

1,503,050


1,450,742

      Total current assets

57,322,767


50,277,088





Property and equipment, net of accumulated depreciation




   and amortization of $15,227,704 as of June 30, 2013




   and $14,633,037 as of December 31, 2012

5,011,872


5,672,000

Marketable securities

8,009,140


17,298,227

Other assets

23,813


69,957

Goodwill

27,997,286


25,726,239

Other intangibles, net of accumulated amortization of $7,489,986




   as of June 30, 2013 and $6,699,283 as of December 31, 2012

11,507,304


11,190,557

Restricted cash

1,301,000


1,301,000

      Total assets

$  111,173,182


$ 111,535,068





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities:




Accounts payable

$      2,333,168


$     3,813,955

Accrued expenses

4,928,986


5,921,152

Deferred revenue 

24,048,915


21,080,759

Other current liabilities

822,159


632,618

      Total current liabilities

32,133,228


31,448,484

Deferred tax liability

288,000


288,000

Other liabilities

4,189,373


4,340,749

      Total liabilities

36,610,601


36,077,233





Stockholders' Equity:




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




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




   outstanding as of June 30, 2013 and December 31, 2012;




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




   June 30, 2013 and December 31, 2012

55


55

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




   authorized; 40,778,281 shares issued and 33,882,952




   shares outstanding as of June 30, 2013, and 39,855,468




   shares issued and 33,027,752 shares outstanding as of




   December 31, 2012

407,783


398,555

Additional paid-in capital

272,906,405


270,943,151

Accumulated other comprehensive income

(52,570)


(128,994)

Treasury stock at cost; 6,895,329 shares as of June 30, 2013




   and 6,827,716 shares as of December 31, 2012

(12,099,328)


(11,974,261)

Accumulated deficit

(186,599,764)


(183,780,671)

      Total stockholders' equity

74,562,581


75,457,835





      Total liabilities and stockholders' equity

$  111,173,182


$ 111,535,068





 

 

THESTREET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)










For the Three Months Ended June 30,


For the Six Months Ended June 30,


2013


2012


2013


2012

Net revenue:








Subscription services

$ 10,757,647


$  8,719,309


$ 21,010,319


$ 17,828,193

Media

2,726,732


3,761,847


5,054,261


7,468,790

   Total net revenue

13,484,379


12,481,156


26,064,580


25,296,983









Operating expense:








Cost of services

6,903,838


5,699,899


13,146,584


12,135,061

Sales and marketing

3,702,606


3,268,859


7,118,753


7,359,108

General and administrative

3,011,825


3,277,171


6,475,600


7,099,692

Depreciation and amortization

935,467


1,158,190


1,878,523


2,445,452

Restructuring and other charges

-


1,280,195


385,610


2,993,693

Loss (gain) on disposition of assets

73,020


(220,000)


16,434


(220,000)

     Total operating expense

14,626,756


14,464,314


29,021,504


31,813,006

     Operating loss

(1,142,377)


(1,983,158)


(2,956,924)


(6,516,023)

Net interest income

65,968


107,858


137,831


203,945

     Loss before income taxes

(1,076,409)


(1,875,300)


(2,819,093)


(6,312,078)

Provision for income taxes

-


-


-


-

     Net loss

(1,076,409)


(1,875,300)


(2,819,093)


(6,312,078)

Preferred stock cash dividends

-


96,424


-


192,848

     Net loss attributable to common stockholders

$ (1,076,409)


$ (1,971,724)


$ (2,819,093)


$ (6,504,926)









Basic and diluted net loss per share:








     Net loss

$          (0.03)


$          (0.06)


$          (0.08)


$          (0.19)

     Preferred stock cash dividends

-


(0.00)


-


(0.01)

Net loss attributable to common stockholders

$          (0.03)


$          (0.06)


$          (0.08)


$          (0.20)









Weighted average basic and diluted shares outstanding

33,784,114


32,752,651


33,532,692


32,547,596









Net loss

$ (1,076,409)


$ (1,875,300)


$ (2,819,093)


$ (6,312,078)

Net interest income

(65,968)


(107,858)


(137,831)


(203,945)

Depreciation and amortization

935,467


1,158,190


1,878,523


2,445,452

EBITDA

(206,910)


(824,968)


(1,078,401)


(4,070,571)

Restructuring and other charges

-


1,280,195


385,610


2,993,693

Stock based compensation

377,902


533,896


798,424


1,066,804

Loss (gain) on disposition of assets

73,020


(220,000)


16,434


(220,000)

Transaction related costs

53,188


73,860


141,118


75,329

Adjusted EBITDA

$      297,200


$     842,983


$      263,185


$    (154,745)

 

 

THESTREET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)






For the Six Months Ended June 30,


2013


2012

Cash Flows from Operating Activities:




Net loss

$ (2,819,093)


$ (6,312,078)

Adjustments to reconcile net loss to net cash




   provided by (used in) operating activities:




Stock-based compensation expense

798,424


1,066,804

(Recovery of) provision for doubtful accounts

(22,331)


76,382

Depreciation and amortization

1,878,523


2,445,452

Restructuring and other charges

393,195


1,396,695

Deferred rent

(161,265)


(159,979)

Noncash barter activity

20,000


109,510

Loss (gain) on disposition of assets

16,434


(220,000)

Changes in operating assets and liabilities:




    Accounts receivable 

908,735


1,416,910

    Other receivables

717,201


(468,061)

    Prepaid expenses and other current assets

(40,007)


(715,217)

    Other assets

(8,688)


32,961

    Accounts payable

(1,483,037)


97,766

    Accrued expenses

(1,104,486)


(2,534,003)

    Deferred revenue

2,088,296


280,976

    Other current liabilities 

(19,326)


27,221

          Net cash provided by (used in) operating activities

1,162,575


(3,458,661)





Cash Flows from Investing Activities:




Purchase of marketable securities

-


(41,151,130)

Sale and maturity of marketable securities

14,887,132


23,214,991

Purchase of assets from DealFlow Media

(1,764,716)


-

Capital expenditures

(504,457)


(714,193)

Proceeds from the disposition of assets

62,881


220,000

          Net cash provided by (used in) investing activities

12,680,840


(18,430,332)





Cash Flows from Financing Activities:




Cash dividends paid on common stock

-


(1,642,421)

Cash dividends paid on preferred stock

-


(192,848)

Proceeds from the sale of common stock

-


135,000

Shares withheld on RSU vesting to pay for withholding taxes

(125,067)


(740,285)

          Net cash used in financing activities

(125,067)


(2,440,554)

Net increase (decrease) in cash and cash equivalents

13,718,348


(24,329,547)

Cash and cash equivalents, beginning of period

23,845,360


44,865,191

Cash and cash equivalents, end of period

$ 37,563,708


$ 20,535,644





Noncash investing and financing activities:








Stock issued for business combination

$      780,863


$                -





Net loss

$ (2,819,093)


$ (6,312,078)

Noncash expenditures

2,922,980


4,714,864

Changes in operating assets and liabilities

1,058,688


(1,861,447)

Capital expenditures

(504,457)


(714,193)

Free cash flow

$      658,118


$ (4,172,854)

SOURCE TheStreet, Inc.

News Provided by Acquire Media

TheStreet, Inc.: (TST)   $0.91

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Press Contacts

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

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

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