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TheStreet Announces Fourth Quarter & Full Year 2012 Financial Results



    TheStreet Announces Fourth Quarter & Full Year 2012 Financial Results

PR Newswire

NEW YORK, Feb. 21, 2013

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

  o 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).
  o Average monthly churn of 2.6% for the fourth quarter improved from 3.8% in
    the prior year period ^(2) (3).
  o The average number of paid subscriptions was 73,993 for the quarter ^ (2).
        
  o 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        1,450,742          1,421,955
assets
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    11,156,550         5,370,135
at December 31, 2011
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,     55                 55
2011
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,   (11,974,261)       (11,010,149)
2011
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    For the Year Ended December
                   December 31,                  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       13,826,065     14,269,240     50,720,803      57,760,000
revenue
Operating
expense:
Cost of services   7,051,806      6,462,815      24,886,142      26,499,085
Sales and          3,318,426      3,559,380      13,395,328      16,681,562
marketing
General and        3,395,043      3,651,415      13,637,895      15,810,994
administrative
Depreciation and   1,771,650      1,264,840      5,512,299       5,757,365
amortization
Restructuring and  549,995        1,825,799      6,589,792       1,825,799
other charges
Gain on
disposition of     (27,000)       -              (232,989)       -
assets
     Total         16,059,920     16,764,249     63,788,467      66,574,805
operating expense
     Operating     (2,233,855)    (2,495,009)    (13,067,664)    (8,814,805)
loss
Net interest       57,497         137,924        352,713         667,822
income
Loss on sale of
marketable         -              (35,340)       -               (35,340)
securities
  Loss from
continuing         (2,176,358)    (2,392,425)    (12,714,951)    (8,182,323)
operations before
income taxes
Provision for      -              -              -               -
income taxes
  Loss from
continuing         (2,176,358)    (2,392,425)    (12,714,951)    (8,182,323)
operations
Discontinued
operations:
  Loss from
discontinued       -              -              -               (1,798)
operations
Net loss           (2,176,358)    (2,392,425)    (12,714,951)    (8,184,121)
Preferred stock    -              96,424         192,848         385,696
cash dividends
Net loss
attributable to    $              $              $               $            
common             (2,176,358)    (2,488,849)    (12,907,799)    (8,569,817)
stockholders
Basic and diluted
net loss per
share:
  Loss from        $              $              $               $            
continuing                                               (0.38)         
operations         (0.07)         (0.08)                         (0.26)
  Loss from
discontinued       -              -              -               (0.00)
operations
  Net loss         (0.07)         (0.08)         (0.38)          (0.26)
  Preferred stock  -              (0.00)         (0.01)          (0.01)
dividends
     Net loss      $              $                              $            
attributable to                                  $                      
common             (0.07)         (0.08)                 (0.39)  (0.27)
stockholders
Weighted average
basic and diluted  32,893,274     32,014,179     32,710,018      31,953,683
shares
outstanding
Net loss           $              $              $               $            
                   (2,176,358)    (2,392,425)    (12,714,951)    (8,184,121)
Net interest       (57,497)       (137,924)      (352,713)       (667,822)
income
Loss on sale of
marketable         -              35,340         -               35,340
securities
Depreciation and   1,771,650      1,264,840      5,512,299       5,757,365
amortization
EBITDA             (462,205)      (1,230,169)    (7,555,365)     (3,059,238)
Restructuring and  549,995        1,825,799      6,589,792       1,825,799
other charges
Stock based        566,308        611,725        2,198,713       2,777,886
compensation
Loss (gain) on
disposition of     (27,000)       -              (232,989)       -
assets
Transaction        (174,342)      40,069         344,305         459,637
related costs
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          -                        1,798
operations
Loss from continuing            (12,714,951)             (8,182,323)
operations
Adjustments to reconcile loss
from continuing operations
   to net cash (used in)
provided by operating
activities:
Stock-based compensation        2,198,713                2,777,886
expense
Provision for doubtful          329,870                  150,825
accounts
Depreciation and amortization   5,512,299                5,757,365
Restructuring and other         1,396,695                647,152
charges
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  (294,567)                469,366
current assets
    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          (6,174,387)              3,562,646
operations
          Net cash used in      -                        (3,669)
discontinued operations
          Net cash (used in)
provided by operating           (6,174,387)              3,558,977
activities
Cash Flows from Investing
Activities:
Purchase of marketable          (41,151,130)             (24,854,469)
securities
Sale and maturity of            34,812,021               52,144,328
marketable securities
Capital expenditures            (1,327,746)              (1,974,406)
Proceeds from the disposition   249,300                  -
of assets
Purchase of The Deal, LLC       (5,430,063)              -
Sale of Promotions.com          -                        265,000
          Net cash (used in)
provided by investing           (12,847,618)             25,580,453
activities
Cash Flows from Financing
Activities:
Cash dividends paid on common   (1,636,236)              (3,446,892)
stock
Cash dividends paid on          (192,848)                (385,696)
preferred stock
Proceeds from the sale of       135,000                  -
common stock
Restricted cash                 660,370
Purchase of treasury stock      (964,112)                (531,311)
          Net cash used in      (1,997,826)              (4,363,899)
financing activities
Net (decrease) increase in      (21,019,831)             24,775,531
cash and cash equivalents
Cash and cash equivalents,      44,865,191               20,089,660
beginning of period
Cash and cash equivalents, end  $        23,845,360      $        44,865,191
of period
Supplemental disclosures of
cash flow information:
Cash payments made for          $               30,028   $                    
interest                                                   -
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     (2,527,336)              1,854,060
and liabilities
Capital expenditures            (1,327,746)              (1,974,406)
Free cash flow                  $        (7,502,133)     $        1,584,571

SOURCE TheStreet

Website: http://www.TheStreet.com
Website: http://www.t.st
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