TheStreet Announces Fourth Quarter & Full Year 2012 Financial Results

21 Feb, 2013, 16:05 ET from TheStreet

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



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http://www.t.st