TMCnet News
TheStreet.com Reports Record Fourth-Quarter and Full-Year 2007 Financial ResultsNEW YORK --(Business Wire)-- TheStreet.com, Inc. (Nasdaq: TSCM), a leading financial media company, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2007. Total revenue for the fourth quarter was a record $19.9 million, an increase of 38% over revenue of $14.4 million reported for the fourth quarter of 2006. Net income increased by 19% to a record $4.7 million, or $0.16 per fully diluted share in the fourth quarter of 2007, compared to $4.0 million, or $0.14 per fully diluted share in the fourth quarter of 2006. Net income, excluding stock compensation expense, increased by 19% to $5.2 million, or $0.17 per fully diluted share, compared to $4.4 million, or $0.16 per fully diluted share, in the fourth quarter of 2006. Earnings before interest, taxes, depreciation and amortization ("EBITDA") totaled $5.3 million, an increase of 35% over EBITDA of $3.9 million for the fourth quarter of 2006. EBITDA, excluding stock compensation expense ("Adjusted EBITDA"), was $5.8 million, an increase of 33% over Adjusted EBITDA of $4.3 million for the fourth quarter of 2006. Net income attributable to common stockholders for the fourth quarter of 2007 was $2.8 million, or $0.09 per fully diluted share, after deducting preferred stock dividends of $0.1 million and a non-cash, one-time, preferred stock deemed dividend of $1.8 million related to the purchase of preferred stock and warrants by Technology Crossover Ventures (TCV). "This year's record financial results reflect our focus on delivering top- and bottom-line growth," said Thomas J. Clarke, Jr., chairman and chief executive officer of TheStreet.com. "A year ago we made a commitment to innovation, flexibility and a willingness to change the company. Through our three acquisitions, the redesign of the TheStreet.com, Stockpickr.com, and the launch of MainStreet.com in early 2008, we have continued to successfully execute on our strategy to create a network of properties that will be 'all things money'." For the full year ended December 31, 2007, total revenue reached a record $65.4 million, an increase of 29% over revenue of $50.9 million reported for the same period of 2006. Net income was $31.1 million, or $1.06 per fully diluted share, an increase of 141% over the net income of $12.9 million, or $0.47 per fully diluted share, reported for the same period of 2006. Excluding the impact of a non-cash income tax benefit of $16.0 million recorded in the third quarter, net income for the full year was $15.1 million, or $0.51 per fully diluted share, an increase of 17% over the net income of $12.9 million, or $0.47 per fully diluted share, for the same period of 2006. Net income, excluding the impact of deferred taxes and stock compensation expense was $17.2 million, or $0.58 per fully diluted share, compared to $14.6 million, or $0.53 per fully diluted share for the same period of 2006. Earnings before interest, taxes, depreciation and amortization ("EBITDA") totaled $15.6 million for the year ended December 31, 2007, an increase of 26% over EBITDA of $12.3 million for the same period of 2006. EBITDA, excluding stock compensation expense ("Adjusted EBITDA"), was $17.7 million, an increase of 26% over Adjusted EBITDA of $14.1 million for the same period of 2006. Net income attributable to common stockholders for the full year ended December 31, 2007, was $29.2 million, or $0.99 per fully diluted share, after deducting preferred stock dividends of $0.1 million and a non-cash, one-time, preferred stock deemed dividend of $1.8 million related to the investment by TCV. Financial Highlights -- TheStreet.com reported a 125% year-over-year increase in non-financial advertising revenue for the fourth quarter of 2007 and a 134% increase for the full year. Non-financial advertising revenue represents 52% of total advertising revenue in the quarter, up from 33% in the fourth quarter of 2006. For the full year non-financial advertising revenue represents 44% of total advertising revenue, up from 27% in 2006. -- Fourth-quarter marketing services revenue, which comprises advertising and $2.7 million of interactive marketing services revenue from Promotions.com, totaled $9.5 million, a 99% increase over the $4.8 million recorded in the fourth quarter of 2006. For the year, marketing services revenue was $27.0 million, 75% greater than last year's total of $15.4 million. -- Fourth-quarter advertising revenue reached a record $6.8 million, a 43% increase over the $4.8 million recorded in the fourth quarter of 2006. Advertising revenue for the year reached the highest total in the company's history at $22.0 million, 42% greater than last year's total of $15.4 million. -- Paid services revenue in the fourth quarter of 2007, which comprises subscription, syndication, licensing and information services revenue, totaled $10.4 million, an increase of 8% over revenue of $9.6 million for the fourth quarter of 2006. For the year, paid services revenue was $38.4 million, 8% greater than last year's total of $35.4 million. -- Fourth-quarter subscription revenue totaled $8.5 million, a decrease of 4% from subscription revenue of $8.8 million recorded in the fourth quarter of 2006. For the year, subscription revenue was $34.1 million, 2% greater than last year's total of $33.5 million. -- Fourth-quarter syndication, licensing and information services revenue totaled $1.9 million, a 142% increase over revenue of $0.8 million recorded in the fourth quarter of 2006. For the year, syndication, licensing and information services revenue was $4.3 million, 123% greater than last year's total of $1.9 million. -- Marketing services and paid services revenue in the fourth quarter of 2007 accounted for 48% and 52%, respectively, of total revenue, compared to 33% and 67% in the fourth quarter of 2006. For the year, marketing services and paid services revenue accounted for 41% and 59%, respectively, of total revenue, as compared to 30% and 70% in 2006. -- As of December 31, 2007, cash, restricted cash and cash equivalents totaled $79.7 million. The Company has no bank debt. During the quarter, the company generated cash flow from operations of $4.2 million, while free cash flow totaled $2.6 million. For the full year the company generated cash flow from operations of $13.4 million, while free cash flow totaled $8.5 million. -- The board of directors declared the Company's eighth consecutive quarterly cash dividend, payable to all shareholders of record at the close of business December 17, 2007. The cash dividend of $0.025 per share was paid December 31, 2007. Recent Company Highlights -- TheStreet.com launched MainStreet (www.mainstreet.com), a free Web site that presents original entertainment and celebrity news articles that illustrate a relevant personal finance topic. The multimedia editorial content is divided into sections corresponding with distinct life stages. Caroline Waxler, a fifteen-year media veteran, has joined TheStreet.com as managing editor of MainStreet.com. Ms. Waxler has worked as an investigative journalist and columnist for Forbes, a writer for VH1's hit pop-culture roundup, "Best Week Ever," and she is the author of the personal finance guide "Stocking Up On Sin" (Wiley, 2004). -- TheStreet.com re-launched its flagship Web site (www.thestreet.com) after an extensive redesign. Engaging and user-friendly, the redesigned site delivers an optimal experience for visitors accessing the company's award-winning content, authors, guest commentators, enhanced quote data and financial tools, and advertisers seeking more efficient content targeting and custom content sponsorship opportunities. -- Stockpickr (www.stockpickr.com) was redesigned to create an enhanced visitor experience and additional advertising and sponsorship opportunities. The new site facilitates more seamless content integration with TheStreet.com and supports user generated video content. -- Technology Crossover Ventures (TCV), a leading provider of growth capital to late-stage private and public companies, purchased a minority stake in TheStreet.com to accelerate the company's growth strategy. TCV's $55 million investment in TheStreet.com consists of preferred stock and warrants. -- David Morrow, the company's Editor-In-Chief, won the 2007 Media Industry Newsletter Award for Best Editor of a Web Site. -- The company was named a finalist for a 2007 Media Industry Newsletter Award in two categories: Best Mobile Application for TheStreet.com Mobile (www.mobile.thestreet.com) and Best Premium Web site for RealMoney Silver (www.realmoneysilver.com). -- Emmy award winner Gary Krakow, formerly of MSNBC.com, joined TheStreet.com's editorial team as a Sr. Technology Correspondent. Krakow has 34 years experience as a journalist - the last 27 with NBC. He joined MSNBC.com at its infancy and produced and anchored the first live Web cast of a presidential election in November 1996. -- TheStreet.com TV launched several new regularly scheduled shows in the following categories: Commodities (My Name is Simon), Retail (Random Acts of Fashion), Technology (The Krakow Experience), Business Media (They Just Don't Get It!), China (China Watch), and stocks from cable TV's most popular shows (3 Stocks I Saw on TV). Expansion of content in these categories meets advertiser demand while capturing a broader audience and positioning TheStreet.com TV for further syndication opportunities. -- TheStreet.com added two members to its Board of Directors, Jay Hoag and Derek Irwin. Hoag is a co-founder of Technology Crossover Ventures and has been a venture capitalist and technology investor for more than 25 years. Irwin has a distinguished career of senior-level finance positions and is currently the Senior Vice President, Finance for the Business Media division of The Nielsen Company. TheStreet.com will conduct a conference call today February 21, 2008, at 11:00 a.m. EST to discuss these results. To participate in the call, dial: 866 356 4281(domestic) or, 617 597 5395 (international). The passcode for the call is: 84507556 A replay of the call will be available until 11:59 pm on February 28, 2008 at: 888 286 8010 (domestic) or, 617 801 6888 (international). The passcode for the replay of the call is: 19118655 To access the Web cast of the call please visit: http://www.thestreet.com/investor-relations/ index.html?detailInclude=IROL-calendar (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.) About TheStreet.com, Inc. TheStreet.com is a leading financial media company. It engages audiences on video and digital platforms through some of the Web's best known sites: TheStreet.com, RealMoney.com, Stockpickr.com, BankingMyWay.com, MainStreet.com, Rate-Watch.com and Promotions.com. Through this network, the company produces and distributes content in all areas where life and money intersect to inform, engage and activate one of the most affluent, influential audiences on the Web today.
THESTREET.COM, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2007 December 31, 2006
----------------- -----------------
ASSETS
Current Assets:
Cash and cash equivalents $ 79,170,754 $ 46,055,232
Accounts receivable, net of
allowance for doubtful
accounts of $508,807 at December
31, 2007 and
$216,077 at December 31, 2006 11,848,252 6,314,553
Other receivables 512,849 368,496
Deferred taxes 5,800,000 -
Prepaid expenses and other current
assets 1,652,608 1,436,618
----------------- -----------------
Total current assets 98,984,463 54,174,899
Property and equipment, net of
accumulated depreciation
and amortization of $17,493,847
at December 31, 2007
and $14,420,638 at December 31,
2006 7,730,922 3,018,132
Other assets 328,117 178,396
Goodwill 40,245,413 4,509,666
Other intangibles, net 18,368,792 2,188,500
Deferred taxes 10,200,000 -
Restricted cash 576,951 500,000
----------------- -----------------
Total assets $ 176,434,658 $ 64,569,593
================= =================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Accounts payable $ 2,189,259 $ 1,165,705
Accrued expenses 5,006,635 6,179,091
Deferred revenue 16,240,008 12,705,038
Current portion of note payable - 22,146
Other current liabilities 214,654 83,800
Current liabilities of
discontinued operations 232,242 222,425
----------------- -----------------
Total current liabilities 23,882,798 20,378,205
Other liabilities 90,105 -
----------------- -----------------
Total liabilities 23,972,903 20,378,205
----------------- -----------------
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, 2007,
and none issued and
outstanding at December 31, 2006;
the liquidation preference
as of December 31, 2007 totals
$10,018 per share 55 -
Common stock; $0.01 par value;
100,000,000 shares
authorized; 36,006,137 shares
issued and 30,254,137
shares outstanding at December
31, 2007, and 33,606,835
shares issued and 27,854,835
shares outstanding
at December 31, 2006 360,061 336,068
Additional paid-in capital 270,752,308 193,556,899
Treasury stock at cost; 5,752,000
shares at December 31, 2007
and December 31, 2006 (9,033,471) (9,033,471)
Accumulated deficit (109,617,198) (140,668,108)
----------------- -----------------
Total stockholders' equity 152,461,755 44,191,388
----------------- -----------------
Total liabilities and
stockholders' equity $ 176,434,658 $ 64,569,593
================= =================
Note: The Company has pledged cash as a security deposit for operating
leases. Accordingly, this cash is classified as restricted cash, and
our cash is classified in several places on the above balance sheet.
December 31, 2007 December 31, 2006
----------------- -----------------
Cash and cash equivalents $ 79,170,754 $ 46,055,232
Noncurrent restricted cash 576,951 500,000
----------------- -----------------
Total cash and cash equivalents
and noncurrent restricted cash $ 79,747,705 $ 46,555,232
================= =================
THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Year Ended
December 31, December 31,
-------------------------- -------------------------
2007 2006 2007 2006
------------- ------------ ------------ ------------
Revenue:
Paid services $10,390,164 $ 9,638,582 $38,421,393 $35,441,457
Marketing
services 9,490,655 4,757,563 26,984,637 15,447,378
------------- ------------ ------------ ------------
Total revenue 19,880,819 14,396,145 65,406,030 50,888,835
------------- ------------ ------------ ------------
Operating
expense:
Cost of services 7,778,745 4,879,475 25,559,409 18,450,110
Sales and
marketing 3,204,158 2,818,051 12,208,648 9,616,491
General and
administrative 3,677,915 2,894,631 12,215,797 10,673,705
Depreciation and
amortization 1,058,503 370,444 2,528,042 1,088,679
------------- ------------ ------------ ------------
Total
operating
expense 15,719,321 10,962,601 52,511,896 39,828,985
------------- ------------ ------------ ------------
Operating
income 4,161,498 3,433,544 12,894,134 11,059,850
Net interest
income 679,446 594,496 2,476,266 2,037,496
------------- ------------ ------------ ------------
Income from
continuing
operations
before income
taxes 4,840,944 4,028,040 15,370,400 13,097,346
(Provision)
benefit for
Income taxes (96,106) (79,598) 15,693,339 (261,220)
------------- ------------ ------------ ------------
Income from
continuing
operations 4,744,838 3,948,442 31,063,739 12,836,126
------------- ------------ ------------ ------------
Discontinued
operations:
(Loss) income on
disposal of
discontinued
operations (11,137) 20,547 (12,829) 32,321
------------- ------------ ------------ ------------
Net income 4,733,701 3,968,989 31,050,910 12,868,447
------------- ------------ ------------ ------------
Preferred stock
deemed dividends 1,802,733 - 1,802,733 -
Preferred stock
cash dividends 96,424 - 96,424 -
------------- ------------ ------------ ------------
Preferred stock
dividends 1,899,157 - 1,899,157 -
------------- ------------ ------------ ------------
Net income
attributable to
common
stockholders $ 2,834,544 $ 3,968,989 $29,151,753 $12,868,447
============= ============ ============ ============
Basic net income
(loss) per
share:
Income from
continuing
operations $ 0.16 $ 0.14 $ 1.08 $ 0.48
(Loss) income
on disposal of
discontinued
operations (0.00) 0.00 (0.00) 0.00
Preferred stock
dividends (0.07) - (0.07) -
------------- ------------ ------------ ------------
Net income
attributable to
common
stockholders $ 0.09 $ 0.14 $ 1.01 $ 0.48
============= ============ ============ ============
Diluted net
income (loss)
per share:
Income from
continuing
operations $ 0.16 $ 0.14 $ 1.06 $ 0.47
(Loss) income
on disposal of
discontinued
operations (0.00) 0.00 (0.00) 0.00
Preferred stock
dividends (0.07) - (0.07) -
------------- ------------ ------------ ------------
Net income
attributable
to common
stockholders $ 0.09 $ 0.14 $ 0.99 $ 0.47
============= ============ ============ ============
Weighted average
basic shares
outstanding 29,845,367 27,627,753 28,830,366 27,014,047
============= ============ ============ ============
Weighted average
diluted shares
outstanding 30,418,253 28,179,736 29,387,727 27,546,137
============= ============ ============ ============
To supplement the Company's financial statements presented in accordance with generally accepted accounting principles ("GAAP"), TheStreet.com uses non-GAAP measures of certain components of financial performance, including "EBITDA" and "free cash flow". EBITDA is adjusted from results based on GAAP to exclude interest, 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. A limitation of this measure, however, is that it does 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. This measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measure included in this press release has been reconciled to the nearest GAAP measure.
For the Three
Months Ended For the Year Ended
December 31, December 31,
------------------------ -------------------------
2007 2006 2007 2006
------------ ----------- ------------ ------------
EBITDA $ 5,265,196 $3,889,285 $15,591,523 $12,342,350
Add net interest
income 679,446 594,496 2,476,266 2,037,496
Less taxes (152,438) (144,348) 15,511,163 (422,720)
Less depreciation
and amortization (1,058,503) (370,444) (2,528,042) (1,088,679)
------------ ----------- ------------ ------------
Net income $ 4,733,701 $3,968,989 $31,050,910 $12,868,447
============ =========== ============ ============
"Free cash flow" means net income plus non-cash expenses less changes in working capital and capital expenditures. TheStreet.com believes that this non-GAAP financial measure is an important indicator of the Company's financial results because it gives investors a clear view of the Company's ability to generate cash. The presentation of this non-GAAP financial measure should be considered in addition to TheStreet.com's GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
For the Three
Months Ended For the Year Ended
December 31, 2007 December 31, 2007
------------------ ---------------------
Free cash flow $ 2,645,005 $ 8,548,165
Non-cash expenses (1,830,100) 11,062,042
Changes in working capital 2,303,920 6,461,456
Capital expenditures 1,614,876 4,979,247
------------------ ---------------------
Net income $ 4,733,701 $ 31,050,910
================== =====================
Statements contained in this news release not related to historical facts may be deemed forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties (described in the Company's SEC filings) that could cause actual results to differ. |
