THESTREET, INC. NEW YORK, March 8, 2016 /PRNewswire/ -- TheStreet, Inc. (Nasdaq: TST) today reported financial results for the fourth quarter and full year ended December 31, 2015.
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For the fourth quarter, the Company reported revenue of $17.0 million, net loss attributable to common stockholders of $0.3 million, or $0.01 per basic and diluted share, and Adjusted EBITDA((1)) of $1.7 million. For the full year, the Company reported revenue of $67.7 million, net loss attributable to common stockholders of $1.9 million, or $0.06 per basic and diluted share, and Adjusted EBITDA of $4.2 million.
"This year we are investing in the business," said Larry Kramer, Chairman and Interim CEO. "We will be launching new versions of our products and unveiling our newly expanded news operation that will be serving all of our businesses. TheStreet, The Deal, BoardEx and our improved premium subscription products will all benefit from significant strategic investments in technology, marketing and content."
Fourth Quarter Results
Revenue for the fourth quarter of 2015 was $17.0 million, a decrease of $0.3 million, or 2%, from $17.3 million in the prior year. Excluding revenue associated with Management Diagnostics Limited ("MDL"), which was acquired on October 31, 2014 and therefore contributed only two months of revenue during 2014, revenue totaled $14.5 million, a decrease of $1.1 million, or 7%, from $15.7 million in the prior year. Subscription services revenue for the fourth quarter of 2015 was $13.4 million, an increase of $0.1 million, or 1%, from $13.3 million in the prior year. Excluding revenue associated with MDL, subscription services revenue totaled $11.0 million, a decrease of $0.7 million, or 6%, from $11.7 million in the prior year. The decrease was primarily related to a 7% decrease in the weighted-average number of subscriptions partially offset by a 1% increase in the average revenue recognized per subscription. Media revenue for the fourth quarter of 2015 was $3.6 million, a decrease of $0.4 million, or 11%, from $4.0 million in the prior year.
Operating expenses for the fourth quarter of 2015 were $16.7 million, a decrease of $1.6 million, or 9%, from $18.4 million in the prior year. Excluding operating expenses associated with MDL, operating expenses totaled $14.7 million, a decrease of $1.4 million, or 9%, from $16.1 million in the prior year. Net loss attributable to common stockholders for the fourth quarter of 2015 was $0.3 million compared to a net loss attributable to common stockholders of $1.7 million in the prior year. The Company reported basic and diluted net loss per share attributable to common stockholders of $0.01 for the fourth quarter of 2015 compared to a net loss per share attributable to common stockholders of $0.05 for the prior year. Adjusted EBITDA for the fourth quarter of 2015 was $1.7 million compared to $1.1 million for the prior year. The increase was the result of a reduction in the Company's net loss partially offset by the absence of costs incurred in 2014 related to the acquisition of MDL.
Full Year Results
Revenue for the full year 2015 was $67.7 million, an increase of $6.6 million, or 11%, from $61.1 million in the prior year. Excluding revenue associated with MDL, revenue totaled $57.9 million, a decrease of $1.5 million, or 3%, from $59.4 million in the prior year. Subscription services revenue for the full year 2015 was $55.2 million, an increase of $7.2 million, or 15%, from $48.0 million in the prior year. Excluding revenue associated with MDL, subscription services revenue totaled $45.5 million, a decrease of $0.9 million, or 2%, from $46.4 million in the prior year. The decrease was primarily related to a 2% decrease in the weighted-average number of subscriptions. Media revenue for the full year 2015 was $12.5 million, a decrease of $0.6 million, or 4%, from $13.0 million in the prior year.
Operating expenses for the full year 2015 were $67.9 million, an increase of $3.4 million, or 5%, from $64.5 million in the prior year. Excluding operating expenses associated with MDL, operating expenses totaled $59.1 million, a decrease of $3.0 million, or 5%, from $62.2 million in the prior year. Net loss attributable to common stockholders for the full year 2015 was $1.9 million compared to a net loss attributable to common stockholders of $4.2 million in the prior year. The Company reported basic and diluted net loss per share attributable to common stockholders of $0.06 for the full year 2015 compared to a net loss per share attributable to common stockholders of $0.12 for the prior year. Adjusted EBITDA for the full year 2015 was $4.2 million compared to $2.8 million for the prior year, an increase of $1.4 million, or 49%. The increase was the result of a reduction in the Company's net loss combined with increased noncash depreciation and amortization expense, partially offset by the absence of costs incurred in 2014 related to the acquisition of MDL.
The company generated $0.9 million of operating cash flow for year ended December 31, 2015, compared to $3.6 million for the prior year. The decline was the result of changes in the Company's assets and liabilities over the periods, partially offset by a reduction in net loss. The Company ended the year with cash and cash equivalents, restricted cash and marketable securities of $30.7 million, as compared to $37.3 million as of December 31, 2014. The decrease was primarily the result of dividend payments combined with capital expenditures.
Fourth Quarter 2015 Business Highlights
For Total Subscription Services:
-- BoardEx substantially increased its database to include Private Equity,
Investment Banker, Attorney and M&A profiles.
-- Continued rollout of BoardEx mobile and expansion of alerts.
-- Subscription bookings totaled $14.1 million for the fourth quarter of
2015, inclusive of the impact of MDL, a decrease of $0.5 million, or 4%,
from the prior year. Excluding MDL, bookings decreased by $2.0 million,
or 16%, from the prior year.
For Subscription Newsletters((2)):
-- The number of paid subscriptions at December 31, 2015 was 76,800, a
decrease of 6,900, or 8%, when compared to December 31, 2014, and a
decrease of 1,000, or 1%, when compared to September 30, 2015.
-- Average revenue per subscription for the fourth quarter of 2015
decreased 3% when compared to the fourth quarter of 2014 and decreased
2% when compared to the third quarter of 2015.
-- Average monthly churn((3)) was 4.7% for the fourth quarter of 2015,
compared to 3.4% for the fourth quarter of 2014, and flat when compared
to the third quarter of 2015.
For Media:
-- Fourth quarter 2015 total page views increased 22% when compared to the
fourth quarter of 2014, and increased 4% when compared to the third
quarter of 2015.
-- Fourth quarter 2015 free search traffic increased 145% when compared to
the fourth quarter of 2014, and increased 15% when compared to the third
quarter of 2015.
Full Year Business Highlights
For Total Subscription Services:
-- Subscription bookings totaled $54.0 million for the full year 2015,
inclusive of the impact of MDL, an increase of $4.4 million, or 9%, from
the prior year. Excluding MDL, bookings decreased by $3.6 million, or
8%, from the prior year.
For Media:
-- Full year total page views increased 24% year-over-year.
-- Full year free search traffic increased 123% year-over-year.
Conference Call Information
TheStreet will discuss its financial results for the fourth quarter and full year today at 4:30 p.m. EST.
To participate in the call, please dial 888-481-2844 (domestic) or 719-325-2495 (international). The conference code is 3524955. This call is being webcast and can be accessed on 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 90 calendar days.
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 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 income/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 RateWatch.
((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 planned investments in our business, improved premium subscription products and expectations for 2016. 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, particularly in light of the investments in our expanded news operations; 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:
Eric Lundberg
Chief Financial Officer
TheStreet, Inc.
ir@thestreet.com
John Evans
Investor Relations
PIR Communications
415-309-0230
ir@thestreet.com
THESTREET, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
------------
ASSETS 2015 2014
---- ----
Current Assets:
Cash and cash equivalents $28,445,416 $32,459,009
Marketable securities - 2,009,240
Accounts receivable, net of
allowance for doubtful
accounts of $357,417 at
December 31, 2015 and
$318,141 at
December 31, 2014 5,102,464 5,103,899
Other receivables 790,148 549,933
Prepaid expenses and other
current assets 1,205,708 987,693
Restricted cash 161,250 639,750
------- -------
Total current assets 35,704,986 41,749,524
Property and equipment, net
of accumulated depreciation
and amortization of
$4,804,411 at December 31,
2015
and $4,003,538 at December
31, 2014 2,773,737 2,926,825
Marketable securities 1,590,000 1,560,000
Other assets 329,885 77,052
Goodwill 43,318,670 44,810,467
Other intangibles, net of
accumulated amortization of
$15,674,328
at December 31, 2015 and
$12,896,782 at December 31,
2014 18,674,376 20,147,209
Restricted cash 500,000 661,250
Total assets $102,891,654 $111,932,327
============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $2,494,341 $2,474,737
Accrued expenses 5,161,981 6,279,082
Deferred revenue 24,738,780 26,427,816
Other current liabilities 1,235,551 1,241,508
--------- ---------
Total current liabilities 33,630,653 36,423,143
Deferred tax liability 1,906,295 728,899
Other liabilities 5,360,467 6,910,175
Total liabilities 40,897,415 44,062,217
---------- ----------
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,
2015 and December 31, 2014;
the aggregate liquidation
preference totals
$55,000,000 as of
December 31, 2015 and
December 31, 2014 55 55
Common stock; $0.01 par
value; 100,000,000 shares
authorized; 42,458,779
shares issued and
35,123,132
shares outstanding at
December 31, 2015, and
41,967,369
shares issued and 34,727,641
shares outstanding at
December 31, 2014 424,588 419,674
Additional paid-in capital 269,524,415 271,943,049
Accumulated other
comprehensive income (1,999,026) (227,476)
Treasury stock at cost;
7,335,647 shares at
December 31, 2015
and 7,239,728 shares at
December 31, 2014 (13,056,541) (12,908,943)
Accumulated deficit (192,899,252) (191,356,249)
Total stockholders' equity 61,994,239 67,870,110
---------- ----------
Total liabilities and
stockholders' equity $102,891,654 $111,932,327
============ ============
THESTREET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
December 31, For the Year Ended
December 31,
------------
2015 2014 2015 2014
---- ---- ---- ----
Net revenue:
Subscription services $13,414,705 $13,313,169 $55,205,507 $48,035,953
Media 3,552,583 3,969,642 12,450,393 13,017,265
Total net revenue 16,967,288 17,282,811 67,655,900 61,053,218
---------- ---------- ---------- ----------
Operating expense:
Cost of services 7,998,845 8,832,742 33,615,867 31,730,740
Sales and marketing 3,862,520 4,397,243 16,190,749 15,600,129
General and administrative 3,755,159 4,124,740 15,000,439 13,946,681
Depreciation and amortization 1,124,255 1,000,469 4,309,094 3,179,377
Restructuring and other charges - - (1,221,224) -
Total operating expense 16,740,779 18,355,194 67,894,925 64,456,927
---------- ---------- ---------- ----------
Operating income (loss) 226,509 (1,072,383) (239,025) (3,403,709)
Net interest (expense) income (25,341) (7,792) (122,637) 88,993
------- ------ -------- ------
Net income (loss) before income taxes 201,168 (1,080,175) (361,662) (3,314,716)
Provision for income taxes 450,425 475,161 1,181,341 475,161
------- ------- --------- -------
Net loss (249,257) (1,555,336) (1,543,003) (3,789,877)
Preferred stock cash dividends 96,424 96,424 385,696 385,696
------ ------ ------- -------
Net loss attributable to common stockholders $(345,681) $(1,651,760) $(1,928,699) $(4,175,573)
========= =========== =========== ===========
Basic and diluted net loss per share:
Net loss attributable to common stockholders $(0.01) $(0.05) $(0.06) $(0.12)
====== ====== ====== ======
Cash dividends declared and paid per common share $0.025 $0.025 $0.010 $0.010
====== ====== ====== ======
Weighted average basic and diluted shares outstanding 34,873,511 34,469,494 34,839,233 34,370,843
========== ========== ========== ==========
Reconciliation of net loss to adjusted EBITDA - see note (1):
Net income (loss) $(249,257) $(1,555,336) $(1,543,003) $(3,789,877)
Provision for income taxes 450,425 475,161 1,181,341 475,161
Net interest expense (income) 25,341 7,792 122,637 (88,993)
Depreciation and amortization 1,124,255 1,000,469 4,309,094 3,179,377
--------- --------- --------- ---------
EBITDA 1,350,764 (71,914) 4,070,069 (224,332)
Restructuring and other charges - - (1,221,224) -
Stock based compensation 440,886 420,039 1,570,142 1,774,761
Recovery of previously impaired investment (50,197) (255,000) (197,190) (255,000)
Transaction related costs - 1,007,981 25,847 1,548,884
Adjusted EBITDA $1,741,453 $1,101,106 $4,247,644 $2,844,313
========== ========== ========== ==========
THESTREET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended December
31,
----------------------------
2015 2014
---- ----
Cash Flows
from
Operating
Activities:
Net loss $(1,543,003) $(3,789,877)
Adjustments
to
reconcile
net loss to
net cash
provided by
(used in)
operating
activities:
Stock-
based
compensation
expense 1,570,142 1,774,761
Provision
for
doubtful
accounts 280,383 189,992
Depreciation
and
amortization 4,309,094 3,179,377
Deferred
taxes 1,177,396 440,899
Deferred
rent (120,400) (325,147)
Changes in
operating
assets and
liabilities:
Accounts
receivable (304,156) 189,008
Other
receivables (242,563) 573,028
Prepaid
expenses
and other
current
assets (223,375) 268,677
Other
assets (66,556) 14,138
Accounts
payable 22,452 73,567
Accrued
expenses (1,146,629) 979,331
Deferred
revenue (1,109,538) (144,069)
Other
current
liabilities (311,049) 212,149
Other
liabilities (1,401,639) (83,749)
---------- -------
Net cash
provided
by
operating
activities 890,559 3,552,085
------- ---------
Cash Flows
from
Investing
Activities:
Sale and
maturity
of
marketable
securities 2,005,484 9,420,434
Capital
expenditures (3,365,509) (1,931,173)
Restricted
cash 639,750 -
Purchase of
Management
Diagnostics
Limited 50,494 (19,922,072)
Net cash
used in
investing
activities (669,781) (12,432,811)
-------- -----------
Cash Flows
from
Financing
Activities:
Cash
dividends
paid on
common
stock (3,539,477) (3,476,893)
Cash
dividends
paid on
preferred
stock (385,696) (385,696)
Proceeds
from the
exercise
of stock
options 839 302,977
Shares
withheld
on RSU
vesting to
pay for
withholding
taxes (147,598) (544,483)
Net cash
used in
financing
activities (4,071,932) (4,104,095)
---------- ----------
Effect of
exchange
rate
changes on
cash and
cash
equivalents (162,439) 71
-------- ---
Net
decrease
in cash
and cash
equivalents (4,013,593) (12,984,750)
Cash and
cash
equivalents,
beginning
of period 32,459,009 45,443,759
Cash and
cash
equivalents,
end of
period $28,445,416 $32,459,009
=========== ===========
Reconciliation
of net
loss to
free cash
flow -see
note (1):
Net loss $(1,543,003) $(3,789,877)
Noncash
expenditures 7,216,615 5,259,882
Changes in
operating
assets and
liabilities (4,783,053) 2,082,080
Capital
expenditures (3,365,509) (1,931,173)
Free cash
flow $(2,474,950) $1,620,912
=========== ==========
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SOURCE TheStreet, Inc.
