TheStreet Reports Fourth Quarter & Full Year 2014 Results

FY 2014 Revenue of $61.1M, up 12%, with Adjusted EBITDA(1) of $2.8M, up 32%

NEW YORK, March 4, 2015 /PRNewswire/ -- TheStreet, Inc. (NASDAQ: TST), a leading digital financial media company, today reported financial results for the fourth quarter and full year 2014.  For the fourth quarter, the Company reported revenue of $17.3 million, net loss of ($1.6) million and Adjusted EBITDA of $1.1 million. For the full year, the Company reported revenue of $61.1 million, net loss of ($3.8) million and Adjusted EBITDA of $2.8 million.

"Our 2014 performance demonstrates our strategy of growing subscription business through BoardEx, a significant acquisition that complements our existing products and expands our customer base and service offerings," said Elisabeth DeMarse, Chairman, President and Chief Executive Officer.   

"In 2015, we will continue to focus on growing subscription across The Deal and retail platforms through strengthening our synergies as well as through improving user experience on our free sites. We believe that we are well positioned for future growth as we expect interest to increase and the financial markets to continue the upward movement," concluded DeMarse. 

Fourth Quarter Results

Revenue in the fourth quarter of 2014 was $17.3 million, an increase of 17% from $14.8 million in the prior year period. Subscription Services revenue in the fourth quarter was $13.3 million, an increase of 17% compared to the prior year period primarily due to organic growth in subscription newsletters and The Deal pipeline, as well as revenue from the BoardEx acquisition. Media revenue in the fourth quarter was $4.0 million, an increase of 16% compared to the prior year period primarily due to higher demand from both repeat and non-repeat advertisers.

Operating expenses in the fourth quarter were $18.4 million, an increase of 25% compared to the prior year period primarily due to transaction related costs and BoardEx operating expenses.

Net loss in the fourth quarter was ($1.6) million compared to net income of $0.2 million in the prior year period. The net loss for the quarter was primarily due to transaction related costs and a provision for deferred income taxes. The Company reported basic and diluted net loss per share attributable to common stockholders of ($0.05) in the fourth quarter of 2014 compared to a net income per share of $0.01 in the prior year period. Adjusted EBITDA was $1.1 million in the fourth quarter compared to $1.6 million in the prior year period.

Full Year Results

Revenue for the full year 2014 was $61.1 million, an increase of 12% from $54.5 million in the prior year. Subscription Services revenue for the full year was $48.0 million, an increase of 10% compared to the prior year primarily due to organic growth in subscription newsletters and The Deal pipeline, as well as revenue from the BoardEx acquisition. Media revenue for the full year was $13.0 million, an increase of 19% from the prior year primarily due to higher demand from both repeat and non-repeat advertisers.

Operating expenses for the full year were $64.5 million, an increase of 10% compared to the prior year primarily due to transaction related costs and BoardEx operating expenses.

Net loss for the year was ($3.8) million compared to a net loss of ($3.8) million in the prior year. The Company reported basic and diluted net loss per share attributable to common stockholders of ($0.12) for the full year compared to a net loss per share of ($0.11) for the prior year. Excluding transaction related costs, net loss for the year was ($2.2) million and net loss per share attributable to common stockholders for the year was ($0.08). Adjusted EBITDA for the full year was $2.8 million compared to $2.1 million for the prior year.

The company generated $3.6 million in operating cash flow for year ended December 31, 2014, compared to of $2.5 million for the prior year, an increase of 43%. The Company ended the year with cash and cash equivalents, restricted cash and marketable securities of $37.3 million.

Selected Operating Metrics

  • For total Subscription Services:
    • Bookings were $14.6 million for the fourth quarter, which includes the impact of BoardEx acquisition, an increase of 27% from the prior year period.
    • Bookings for the full year were $49.6 million, compared to $45.0 million in the prior year, an increase of 10%. 
  • For Subscription Newsletters(2):
    • The number of paid subscriptions at the end of the period was 83,700, an increase of 7% from the prior year and 1% sequentially.
    • Average revenue per user for the fourth quarter decreased (2%) compared to the prior period and was unchanged sequentially. 
    • Average monthly churn was 3% for the fourth quarter, compared to 2% in the prior year period and 3% sequentially(3).

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 (888) 395-3227 (domestic) or (719) 325-2215 (international).  The Conference ID number is 3661898. 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 on our website.

About TheStreet

TheStreet, Inc. (www.t.st) is a 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, Action Alerts PLUS and MainStreet. 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 and through its BoardEx product, director and officer profiles. To learn more, visit www.thedeal.com and www.boardex.com. RateWatch, the Company's business unit that provides rate and fee data from banks and credit unions across the U.S. for a wide variety of banking products. To learn more, visit www.rate-watch.com.

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) Subscription newsletters includes investing newsletters and excludes subscriptions from The Deal, DealFlow Media, BoardEx and Rate Watch.

 (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 recent acquisition of BoardEx, growth initiatives and expectations for 2015.  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 improve the user experience and optimize our free sites and generate new subscription revenue; our ability to successfully integrate BoardEx 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.

 

 

THESTREET, INC.

CONSOLIDATED BALANCE SHEETS






ASSETS


December 31, 2014


December 31, 2013

Current Assets:





Cash and cash equivalents


$         32,459,009


$         45,443,759

Marketable securities


2,009,240


9,426,875

Accounts receivable, net of allowance for doubtful 





   accounts of $318,141 at December 31, 2014 and $202,207 at





   December 31, 2013


5,103,899


4,502,344

Other receivables


549,933


299,687

Prepaid expenses and other current assets


987,693


1,167,029

Restricted cash


639,750


139,750

      Total current assets


41,749,524


60,979,444






Property and equipment, net of accumulated depreciation





   and amortization of $4,003,538 at December 31, 2014





   and $9,212,676 at December 31, 2013


2,926,825


3,381,572

Marketable securities


1,560,000


3,670,860

Other assets


77,052


21,800

Goodwill


44,810,467


27,997,286

Other intangibles, net of accumulated amortization of $12,896,782





   at December 31, 2014 and $13,817,447 at December 31, 2013


20,147,209


11,681,815

Restricted cash


661,250


1,161,250

      Total assets


$        111,932,327


$        108,894,027






LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:





Accounts payable


$           2,474,737


$           2,352,521

Accrued expenses


6,279,082


4,338,423

Deferred revenue 


26,427,816


22,122,763

Other current liabilities


1,241,508


957,741

      Total current liabilities


36,423,143


29,771,448

Deferred tax liability


728,899


288,000

Other liabilities


6,910,175


4,671,421

      Total liabilities


44,062,217


34,730,869






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, 2014 and December 31, 2013.;





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





   December 31, 2014 and December 31, 2013


55


55

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





   authorized; 41,967,369 shares issued and 34,727,641





   shares outstanding at December 31, 2014, and 41,058,246





   shares issued and 34,044,339 shares outstanding at





   December 31, 2013


419,674


410,582

Additional paid-in capital


271,943,049


273,861,536

Accumulated other comprehensive income


(227,476)


(178,183)

Treasury stock at cost; 7,239,728 shares at December 31, 2014





   and 7,013,907 shares at December 31, 2013


(12,908,943)


(12,364,460)

Accumulated deficit


(191,356,249)


(187,566,372)

      Total stockholders' equity


67,870,110


74,163,158






      Total liabilities and stockholders' equity


$        111,932,327


$        108,894,027

 

 

THESTREET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS












For the Three Months Ended
December 31,


For the Year Ended
December 31,



2014


2013


2014


2013

Net revenue:









Subscription services


$ 13,313,169


$ 11,369,956


$ 48,035,953


$43,549,359

Media


3,969,642


3,431,147


13,017,265


10,901,052

   Total net revenue


17,282,811


14,801,103


61,053,218


54,450,411










Operating expense:









Cost of services


8,832,742


6,824,032


31,730,740


27,431,566

Sales and marketing


4,397,243


3,809,192


15,600,129


14,453,465

General and administrative


4,124,740


2,988,348


13,946,681


12,218,964

Depreciation and amortization


1,000,469


1,006,253


3,179,377


3,768,536

Restructuring and other charges


-


-


-


385,610

Loss on disposition of assets


-


-


-


187,434

     Total operating expense


18,355,194


14,627,825


64,456,927


58,445,575

     Operating (loss) income


(1,072,383)


173,278


(3,403,709)


(3,995,164)

Net interest (expense) income


(7,792)


39,579


88,993


209,463

Net (loss) income before income taxes


(1,080,175)


212,857


(3,314,716)


(3,785,701)

Provision for income taxes


475,161


-


475,161


-

Net (loss) income


(1,555,336)


212,857


(3,789,877)


(3,785,701)

Preferred stock cash dividends


96,424


-


385,696


-

Net (loss) income attributable to common stockholders


$ (1,651,760)


$     212,857


$ (4,175,573)


$(3,785,701)










Basic net (loss) income per share:









     Net (loss) income attributable to common stockholders


$        (0.05)


$          0.01


$        (0.12)


$        (0.11)










Diluted net (loss) income per share:









     Net (loss) income attributable to common stockholders


$        (0.05)


$          0.01


$        (0.12)


$        (0.11)










Cash dividends declared and paid per common share


$        0.025


$                -


$        0.010


$                -










Weighted average basic shares outstanding


34,469,494


33,936,814


34,370,843


33,725,317










Weighted average diluted shares outstanding


34,469,494


34,704,620


34,370,843


33,725,317




























Reconciliation of net loss to adjusted EBITDA - see note (1):









Net (loss) income


$ (1,555,336)


$     212,857


$ (3,789,877)


$(3,785,701)

Provision for income taxes


475,161


-


475,161


-

Net interest (expense) income


7,792


(39,579)


(88,993)


(209,463)

Depreciation and amortization


1,000,469


1,006,253


3,179,377


3,768,536

EBITDA


(71,914)


1,179,531


(224,332)


(226,628)

Restructuring and other charges


-


-


-


385,610

Stock based compensation


420,039


465,946


1,774,761


1,681,988

Recovery of previously impaired investment


(255,000)


-


(255,000)


-

Loss on disposition of assets


-


-


-


187,434

Transaction related costs


1,007,981


(20,000)


1,548,884


121,118

Adjusted EBITDA


$  1,101,106


$  1,625,477


$  2,844,313


$  2,149,522










 

 

THESTREET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS








For the Year Ended December 31,



2014


2013

Cash Flows from Operating Activities:





Net loss


$    (3,789,877)


$    (3,785,701)

Adjustments to reconcile net loss to net cash provided by (used in)





   operating activities:





Stock-based compensation expense


1,774,761


1,681,988

Provision for doubtful accounts


189,992


81,392

Depreciation and amortization


3,179,377


3,768,536

Deferred taxes


440,899


-

Restructuring and other charges


-


393,195

Deferred rent


(325,147)


(322,533)

Noncash barter activity


-


20,000

Loss (gain) on disposition of assets


-


187,434

Changes in operating assets and liabilities:





    Accounts receivable 


189,008


1,450,605

    Other receivables


573,028


951,116

    Prepaid expenses and other current assets


268,677


296,012

    Other assets


14,138


(6,675)

    Accounts payable


73,567


(1,463,684)

    Accrued expenses


979,331


(1,384,257)

    Deferred revenue


(144,069)


517,882

    Other current liabilities 


212,149


114,950

    Other liabilities


(83,749)


(21,908)

          Net cash provided by (used in) operating activities


3,552,085


2,478,352






Cash Flows from Investing Activities:





Sale and maturity of marketable securities


9,420,434


22,247,394

Capital expenditures


(1,931,173)


(1,118,679)

Purchase of Management Diagnostics Limited


(19,922,072)


-

Proceeds from the disposition of assets


-


71,881

Purchase of assets from DealFlow Media, Inc.


-


(1,764,716)

          Net cash provided by (used in) investing activities


(12,432,811)


19,435,880






Cash Flows from Financing Activities:





Cash dividends paid on common stock


(3,476,893)


-

Cash dividends paid on preferred stock


(385,696)


-

Proceeds from the exercise of stock options


302,977


74,366

Shares withheld on RSU vesting to pay for withholding taxes


(544,483)


(390,199)

          Net cash used in financing activities


(4,104,095)


(315,833)






Effect of exchange rate changes on cash and cash equivalents

71


-






Net increase (decrease) in cash and cash equivalents


(12,984,750)


21,598,399

Cash and cash equivalents, beginning of period


45,443,759


23,845,360

Cash and cash equivalents, end of period


$   32,459,009


$   45,443,759






Noncash investing and financing activities:





Stock issued for business combination


$                    -


$        780,863











Reconciliation of net loss to free cash flow - see note (1):




Net loss


$    (3,789,877)


$    (3,785,701)

Noncash expenditures


5,259,882


5,810,012

Changes in operating assets and liabilities


2,082,080


454,041

Capital expenditures


(1,931,173)


(1,118,679)

Free cash flow


$      1,620,912


$      1,359,673






 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/thestreet-reports-fourth-quarter--full-year-2014-results-300045358.html

SOURCE TheStreet, Inc.

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