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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 22, 2010 TheStreet.com, Inc. (Exact Name of Registrant as Specified in its Charter) DE 0-25779 06-1515824 (State or other Jurisdiction (Commission File Number) (I.R.S. Employer 14 Wall Street 15th Floor 10005 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 321-5000 _____________________ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition On January 25, 2010, TheStreet.com, Inc. (the "Company") issued a press release announcing its financial condition and results of operations as of and for the periods ended June 30, 2009 and September 30, 2009, respectively, as well as revisions to certain line items in its previously-filed consolidated financial statements as of and for the fiscal year ended December 31, 2008 and the fiscal quarters within such fiscal year, respectively (collectively, the "2008 Periods"). A c
opy of the Company's press release is attached as Exhibit 99.1 to this Current Report and is incorporated herein by reference. The information in this Item 2.02 and in Exhibit 99.1 of this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review As previously disclosed, the Company identified an issue relating to its recording of certain revenue of its Promotions.com subsidiary ("Promotions.com" which subsidiary the Company sold in December 2009, as previously announced) and, as a result, the Audit Committee of the Board of Directors of the Company (the "Audit Committee") engaged outside counsel, Skadden, Arps, Slate, Meagher & Flom LL
P, and accounting experts, AlixPartners LLP, and conducted an independent review of accounting matters related to Promotions.com (the "Review"). As a result of the Review, on January 22, 2010, the Audit Committee concluded that, due to certain inaccuracies in the previously-issued consolidated financial statements as of and for each of the 2008 Periods, such consolidated financial statements no longer should be relied upon. The Company will restate its consolidated financial statements for the year ended December 31, 2008 and anticipates filing, on or before February 8, 2010, a Form 10-K/A for the year ended December 31, 2008, which shall contained certain revised results for the quarters within such fiscal year. The restatement will not affect the Company's previously-reported cash, cash equivalents, restricted cash and marketable secu
rities. The restatement will make adjustments to correct errors related to the timing of recognition of revenue within the Promotions.com subsidiary and make adjustments to revenue and expense related to transactions with certain third parties involving the Promotions.com subsidiary, in which the Company contracted both to provide services to, and receive services from, such third parties. The adjustments will result in reduced revenue in certain quarters, and increased revenue in other quarters, as compared to results previously reported; reduced expense in certain quarters, as compared to results previously reported; and reduced net income (or increased net loss) in certain quarters, and reduced net loss in other quarters, as compared to results previously reported. Moreover, as a result of the restatement, certain revenue previously reported within 2008 Periods will be deferred and recognized in 2009. The Audit Committee and authorized officers of the Company have discussed this matter with its current independent accountant, KPMG LLP, as well as with Marcum LLP (f/k/a Marcum & Kliegman, LLP), which was the Company's independent accountant during the Company's 2007 and 2008 fiscal years. Item 9.01 Financial Statements and Exhibits THESTREET.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited For the Three Months Ended September 30, For the Nine Months Ended September 30, 2009 2009 Revenue: Paid services $ 9,373,672 $ 28,310,049 Marketing services 5,861,931 15,418,258 Total revenue 15,235,603 43,728,307 Operating expense: Cost of services 7,156,120 22,666,527 Sales and marketing 3,005,218 8,768,054 General and administrative 5,266,804 13,129,465 Intangible asset impairment - 24,137,069 Depreciation and amortization 1,348,806 4,027,253 Restructuring expense 169,692 2,728,502 Total operating expense 16,946,640 75,456,870 Operating loss (1,711,037) (31,728,563) Net interest income 186,342 775,896 Gain on sales of marketable securities 34,684 295,430 Other income - 153,677 Loss from continuing operations before income taxes (1,490,011) (30,503,560) Benefit (provision) for income taxes 53,222 (16,283,105) Loss from continuing operations (1,436,789) (46,786,665) Discontinued operations: Loss on disposal of discontinued operations 1,846 10,453 Loss from discontinued operations 1,846 10,453 Net loss (1,438,635) (46,797,118) Preferred stock cash dividends 96,424 289,272 Net loss attributable to common stockholders $ (1,535,059) $ (47,086,390) Basic net loss per share: Loss from continuing operations $ (0.05) $ (1.53) Loss on disposal of discontinued operations (0.00) (0.00) Net loss (0.05) (1.53) Preferred stock dividends (0.00) (0.01) Net loss attributable to common stockholders $ (0.05) $ (1.54) Diluted net loss per share: Loss from continuing operations $ (0.05) $ (1.53) Loss on disposal of discontinued operations (0.00) (0.00) Net loss (0.05) (1.53) Preferred stock dividends (0.00) (0.01) Net loss attributable to common stockholders $ (0.05) $ (1.54) Weighted average basic shares outstanding 30,606,216 30,574,361 Weighted average diluted shares outstanding 30,606,216 30,574,361 Adjusted EBITDA Net loss $ (1,438,635) $ (46,797,118) Interest (186,342) (775,896) Gain on sales of marketable securities (34,684) (295,430) (Benefit) provision for income taxes (53,222) 16,283,105 Depreciation & amortization 1,348,806 4,027,253 EBITDA (364,077) (27,558,086) Other income - (153,677) Intangible asset impairment - 24,137,069 Restructuring and other charge 169,692 2,728,502 Costs of review of Promotions.com accounting 1,307,778 1,307,778 Noncash compensation 573,221 2,158,815 Adjusted EBITDA $ 1,686,614 $ 2,620,401 THESTREET.COM, INC. CONSOLIDATED BALANCE SHEET Unaudited ASSETS September 30, 2009 Current Assets: Cash and cash equivalents $ 60,486,534 Restricted cash 500,000 Marketable securities 2,816,411 Accounts receivable, net of allowance for doubtful accounts of $129,918 5,508,175 Other receivables 268,841 Prepaid expenses and other current assets 1,817,184 Current assets held for sale 3,089,853 Total current assets 74,486,998 Property and equipment, net of accumulated depreciation and amortization of $12,557,033 8,011,657 Marketable securities 17,461,005 Long term investment 555,000 Other assets 77,710 Goodwill 20,181,000 Other intangibles, net 8,003,942 Restricted cash 1,660,371 Noncurrent assets held for sale 1,976,751 Total assets $ 132,414,434 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 2,078,814 Accrued expenses 5,791,362 Deferred revenue 16,918,187 Other current liabilities 181,431 Current liabilities of discontinued operations 223,204 Current liabilities held for sale 1,983,055 Total current liabilities 27,176,053 Other liabilities 885,447 Noncurrent liabilities held for sale 14,521 Total liabilities 28,076,021 Stockholders' Equity: Preferred stock; $0.01 par value; 10,000,000 shares authorized; 5,500 shares issued and 5,500 shares outstanding; the aggregate liquidation preference totals $55,000,000 55 Common stock; $0.01 par value; 100,000,000 shares authorized; 36,598,461 shares issued and 30,516,727 shares outstanding 365,985 Additional paid-in capital 270,621,024 Accumulated other comprehensive income 389,777 Treasury stock at cost; 6,081,734 shares (10,411,952) Accumulated deficit (156,626,476) Total stockholders' equity 104,338,413 Total liabilities and stockholders' equity $ 132,414,434 THESTREET.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited For the Three Months Ended June 30, For the Six Months Ended June 30, 2009 2009 Revenue: Paid services $ 9,428,936 $ 18,936,377 Marketing services 5,563,305 9,556,326 Total revenue 14,992,241 28,492,703 Operating expense: Cost of services 7,264,697 15,510,407 Sales and marketing 2,785,929 5,762,836 General and administrative 3,320,983 7,862,661 Intangible asset impairment - 24,137,069 Depreciation and amortization 1,207,710 2,678,447 Restructuring expense 574,281 2,558,810 Total operating expense 15,153,600 58,510,230 Operating loss (161,359) (30,017,527) Net interest income 359,417 589,554 Gain on sales of marketable securities 260,746 260,746 Other income - 153,677 Income (loss) from continuing operations before income taxes 458,804 (29,013,550) Provision for income taxes 109,250 16,336,327 Income (loss) from continuing operations 349,554 (45,349,877) Discontinued operations: Loss on disposal of discontinued operations 9,532 8,607 Loss from discontinued operations 9,532 8,607 Net income (loss) 340,022 (45,358,484) Preferred stock cash dividends 96,424 192,848 Net income (loss) attributable to common stockholders $ 243,598 $ (45,551,332) Basic net income (loss) per share: Income (loss) from continuing operations $ 0.01 $ (1.48) Loss on disposal of discontinued operations (0.00) (0.00) Net income (loss) 0.01 (1.48) Preferred stock dividends (0.00) (0.01) Net income (loss) attributable to common stockholders 0.01 $ (1.49) Diluted net income (loss) per share: Income (loss) from continuing operations $ 0.01 $ (1.48) Loss on disposal of discontinued operations (0.00) (0.00) Net income (loss) 0.01 (1.48) Preferred stock dividends (0.00) (0.01) Net income (loss) attributable to common stockholders $ 0.01 $ (1.49) Weighted average basic shares outstanding 30,620,349 30,558,170 Weighted average diluted shares outstanding 30,620,349 30,558,170 Adjusted EBITDA Net income (loss) $ 340,022 $ (45,358,484) Interest (359,417) (589,554) Gain on sales of marketable securities (260,746) (260,746) Provision for income taxes 109,250 16,336,327 Depreciation & amortization 1,207,710 2,678,447 EBITDA 1,036,819 (27,194,010) Other income - (153,677) Intangible asset impairment - 24,137,069 Restructuring and other charge 574,281 2,558,810 Noncash compensation 341,981 1,585,594 Adjusted EBITDA $ 1,953,081 $ 933,786 THESTREET.COM, INC. CONSOLIDATED BALANCE SHEET Unaudited ASSETS June 30, 2009 Current Assets: Cash and cash equivalents $ 63,411,600 Restricted cash 500,000 Marketable securities 799,031 Accounts receivable, net of allowance for doubtful accounts of $100,436 5,090,863 Other receivables 495,954 Prepaid expenses and other current assets 2,174,219 Current assets held for sale 2,557,445 Total current assets 75,029,112 Property and equipment, net of accumulated depreciation and amortization of $11,671,141 8,547,244 Marketable Securities 15,692,510 Long term investment 555,000 Other assets 81,610 Goodwill 20,181,000 Other intangibles, net 8,359,945 Restricted cash 1,660,371 Noncurrent assets held for sale 2,122,494 Total assets $ 132,229,286 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 1,786,259 Accrued expenses 5,247,683 Deferred revenue 16,285,222 Other current liabilities 132,300 Current liabilities of discontinued operations 231,955 Current liabilities held for sale 2,185,932 Total current liabilities 25,869,351 Other Liabilities 541,532 Noncurrent liabilities held for sale 17,083 Total liabilities 26,427,966 Stockholders' Equity: Preferred stock; $0.01 par value; 10,000,000 shares authorized; 5,500 shares issued and 5,500 shares outstanding; the aggregate liquidation preference totals $55,000,000 55 Common stock; $0.01 par value; 100,000,000 shares authorized; 36,598,461 shares issued and 30,620,942 shares outstanding 365,985 Additional paid-in capital 270,955,796 Accumulated other comprehensive income (202,104) Treasury stock at cost; 5,977,519 shares (10,130,571) Accumulated deficit (155,187,841) Total stockholders' equity 105,801,320 Total liabilities and stockholders' equity $ 132,229,286 THESTREET.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited Unaudited Unaudited Unaudited Unaudited For the Three Months Ended March 31, 2008 For the Three Months Ended June 30, 2008 For the Three Months Ended September 30, 2008 For the Three Months Ended December 31, 2008 For the Year Ended December 31, 2008 As Filed Adjustment As Restated As Filed Adjustment As Restated As Filed Adjustment As Restated As Filed Adjustment As Restated As Filed Adjustment As Restated Net revenue: Paid services $ 10,759,469 $ - $ 10,759,469 $ 10,289,939 $ - $ 10,289,939 $ 10,244,212 $ - $ 10,244,212 $ 9,892,368 $ - $ 9,892,368 $ 41,185,988 $ - $ 41,185,988 Marketing services 8,188,516 (955,959) 7,232,557 9,398,992 (1,285,110) 8,113,882 6,478,367 326,058 6,804,425 6,648,568 862,613 7,511,181 30,714,443 (1,052,398) 29,662,045 Total net revenue 18,947,985 (955,959) 17,992,026 19,688,931 (1,285,110) 18,403,821 16,722,579 326,058 17,048,637 16,540,936 862,613 17,403,549 71,900,431 (1,052,398) 70,848,033 Operating expense: Cost of services 7,656,127 (45,439) 7,610,688 8,366,156 (45,439) 8,320,717 8,405,002 (45,439) 8,359,563 7,777,480 (83,671) 7,693,809 32,204,765 (219,987) 31,984,778 Sales and marketing 3,763,595 - 3,763,595 3,630,394 - 3,630,394 3,550,363 - 3,550,363 3,318,847 - 3,318,847 14,263,199 - 14,263,199 General and administrative 4,355,545 - 4,355,545 4,078,822 - 4,078,822 4,589,851 - 4,589,851 4,538,020 (41,000) 4,497,020 17,562,238 (41,000) 17,521,238 Intangible asset impairment - - - - - - - - - 2,325,481 - 2,325,481 2,325,481 - 2,325,481 Depreciation and amortization 1,263,604 - 1,263,604 1,584,780 - 1,584,780 1,481,670 - 1,481,670 1,564,132 - 1,564,132 5,894,186 - 5,894,186 Total operating expense 17,038,871 (45,439) 16,993,432 17,660,152 (45,439) 17,614,713 18,026,886 (45,439) 17,981,447 19,523,960 (124,671) 19,399,289 72,249,869 (260,987) 71,988,882 Operating income (loss) 1,909,114 (910,520) 998,594 2,028,779 (1,239,671) 789,108 (1,304,307) 371,496 (932,811) (2,983,024) 987,284 (1,995,740) (349,438) (791,410) (1,140,848) Net interest income 686,194 - 686,194 400,243 - 400,243 345,675 - 345,675 141,640 - 141,640 1,573,752 - 1,573,752 Gain on sale of marketable security - - - - - - - - - 120,937 - 120,937 120,937 - 120,937 Income (loss) from continuing operations before income taxes 2,595,308 (910,520) 1,684,788 2,429,022 (1,239,671) 1,189,351 (958,632) 371,496 (587,136) (2,720,447) 987,284 (1,733,163) 1,345,251 (791,410) 553,841 (Provision) benefit for income taxes (145,928) - (145,928) (125,693) (125,693) (106,364) - (106,364) 375,945 - 375,945 (2,040) - (2,040) Income (loss) from continuing operations 2,449,380 (910,520) 1,538,860 2,303,329 (1,239,671) 1,063,658 (1,064,996) 371,496 (693,500) (2,344,502) 987,284 (1,357,218) 1,343,211 (791,410) 551,801 Discontinued operations: Loss on disposal of discontinued operations 2,731 - 2,731 2,085 - 2,085 3,079 - 3,079 117 - 117 8,012 - 8,012 Loss from discontinued operations 2,731 - 2,731 2,085 - 2,085 3,079 - 3,079 117 - 117 8,012 - 8,012 Net income (loss) 2,446,649 (910,520) 1,536,129 2,301,244 (1,239,671) 1,061,573 (1,068,075) 371,496 (696,579) (2,344,619) 987,284 (1,357,335) 1,335,199 (791,410) 543,789 Preferred stock cash dividends 96,424 - 96,424 96,424 - 96,424 96,424 - 96,424 96,424 - 96,424 385,696 - 385,696 Net income (loss) attributable to common stockholders $ 2,350,225 $ (910,520) $ 1,439,705 $ 2,204,820 $ (1,239,671) $ 965,149 $ (1,164,499) $ 371,496 $ (793,003) $ (2,441,043) $ 987,284 $ (1,453,759) $ 949,503 $ (791,410) $ 158,093 Basic net income (loss) per share: Income (loss) from continuing operations $ 0.08 $ 0.05 $ 0.07 $ 0.03 $ (0.04) $ (0.03) $ (0.08) $ (0.05) $ 0.04 $ 0.02 Loss on disposal of discontinued operations (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) Net income (loss) 0.08 0.05 0.07 0.03 (0.04) (0.03) (0.08) (0.05) 0.04 0.02 Preferred stock dividends (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.01) (0.01) Net income (loss) attributable to common stockholders $ 0.08 $ 0.05 $ 0.07 $ 0.03 $ (0.04) $ (0.03) $ (0.08) $ (0.05) $ 0.03 $ 0.01 Diluted net income (loss) per share: Income (loss) from continuing operations $ 0.07 $ 0.04 $ 0.07 $ 0.03 $ (0.04) $ (0.03) $ (0.08) $ (0.05) $ 0.04 $ 0.02 Loss on disposal of discontinued operations (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) Net income (loss) 0.07 0.04 0.07 0.03 (0.04) (0.03) (0.08) (0.05) 0.04 0.02 Preferred stock dividends (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.01) (0.01) Net income (loss) attributable to common stockholders $ 0.07 $ 0.04 $ 0.07 $ 0.03 $ (0.04) $ (0.03) $ (0.08) $ (0.05) $ 0.03 $ 0.01 Weighted average basic shares outstanding 30,392,980 30,392,980 30,452,497 30,452,497 30,482,949 30,482,949 30,381,156 30,381,156 30,427,421 30,427,421 Weighted average diluted shares outstanding 34,615,221 34,615,221 34,597,480 34,597,480 30,482,949 30,482,949 30,381,156 30,381,156 30,835,131 30,835,131 Adjusted EBITDA Net income (loss) $ 2,446,649 $ (910,520) $ 1,536,129 $ 2,301,244 $ (1,239,671) $ 1,061,573 $ (1,068,075) $ 371,496 $ (696,579) $ (2,344,619) $ 987,284 $ (1,357,335) $ 1,335,199 $ (791,410) $ 543,789 Net interest income (686,194) - (686,194) (400,243) - (400,243) (345,675) - (345,675) (141,640) - (141,640) (1,573,752) - (1,573,752) Gain on sale of marketable security - - - - - - - - - (120,937) - (120,937) (120,937) - (120,937) (Provision) benefit for income taxes 145,928 - 145,928 125,693 - 125,693 106,364 - 106,364 (375,945) - (375,945) 2,040 - 2,040 Depreciation & amortization 1,263,604 - 1,263,604 1,584,780 - 1,584,780 1,481,670 - 1,481,670 1,564,132 - 1,564,132 5,894,186 - 5,894,186 EBITDA 3,169,987 (910,520) 2,259,467 3,611,474 (1,239,671) 2,371,803 174,284 371,496 545,780 (1,419,009) 987,284 (431,725) 5,536,736 (791,410) 4,745,326 Intangible asset impairment - - - - - - - - - 2,325,481 - 2,325,481 2,325,481 - 2,325,481 Noncash compensation 701,097 - 701,097 952,035 - 952,035 986,076 - 986,076 897,877 - 897,877 3,537,086 - 3,537,086 Adjusted EBITDA $ 3,871,084 $ (910,520) $ 2,960,564 $ 4,563,509 $ (1,239,671) $ 3,323,838 $ 1,160,360 $ 371,496 $ 1,531,856 $ 1,804,349 $ 987,284 $ 2,791,633 $ 11,399,303 $ (791,410) $ 10,607,893 THESTREET.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited For the Three Months Ended March 31, 2008 For the Three Months Ended June 30, 2008 For the Three Months Ended September 30, 2008 For the Three Months Ended December 31, 2008 For the Three Months Ended March 31, 2009 For the Three Months Ended June 30, 2009 For the Three Months Ended September 30, 2009 As Restated Promotions. com (1) Excluding Promotions. com (1) As Restated Promotions. com (1) Excluding Promotions. com (1) As Restated Promotions. com (1) Excluding Promotions. com (1) As Restated Promotions. com (1) Excluding Promotions. com (1) As Filed Promotions. com (1) Excluding Promotions. com (1) As Reported Promotions. com (1) Excluding Promotions. com (1) As Reported Promotions. com (1) Excluding Promotions. com (1) Revenue: Paid services $10,759,469 $93 $10,759,376 $10,289,939 $ 93 $10,289,846 $10,244,212 $ 62 $10,244,150 $9,892,368 $399 $ 9,891,969 $ 9,507,441 $ 99 $ 9,507,342 $9,428,936 $ - $ 9,428,936 $9,373,672 $ - $ 9,373,672 Marketing services 7,232,557 1,269,812 5,962,745 8,113,882 1,736,031 6,377,851 6,804,425 1,367,792 5,436,633 7,511,181 2,161,878 5,349,303 4,519,423 1,355,598 3,163,825 5,563,305 995,590 4,567,715 5,861,931 1,557,974 4,303,957 Total revenue 17,992,026 1,269,905 16,722,121 18,403,821 1,736,124 16,667,697 17,048,637 1,367,854 15,680,783 17,403,549 2,162,277 15,241,272 14,026,864 1,355,697 12,671,167 14,992,241 995,590 13,996,651 15,235,603 1,557,974 13,677,629 Operating expense: Cost of services 7,610,688 1,363,783 6,246,905 8,320,717 1,704,955 6,615,762 8,359,563 1,708,133 6,651,430 7,693,809 1,296,651 6,397,158 8,251,217 973,999 7,277,218 7,264,697 1,076,817 6,187,880 7,156,120 1,192,077 5,964,043 Sales and marketing 3,763,595 145,006 3,618,589 3,630,394 116,789 3,513,605 3,550,363 142,379 3,407,984 3,318,847 206,425 3,112,422 2,976,907 239,634 2,737,273 2,785,929 248,806 2,537,123 3,005,218 203,769 2,801,449 General and administrative 4,355,545 548,819 3,806,726 4,078,822 514,829 3,563,993 4,589,851 536,548 4,053,303 4,497,020 460,379 4,036,641 4,663,678 799,202 3,864,476 3,320,983 387,475 2,933,508 5,266,804 556,600 4,710,204 Intangible asset impairment - - - - - - - - - 2,325,481 - 2,325,481 24,137,069 - 24,137,069 - - - - - - Depreciation and amortization 1,263,604 - 1,263,604 1,584,780 - 1,584,780 1,481,670 - 1,481,670 1,564,132 - 1,564,132 1,470,737 - 1,470,737 1,207,710 - 1,207,710 1,348,806 - 1,348,806 Restructuring expense - - - - - - - - - - - - 2,360,267 - 2,360,267 574,281 - 574,281 169,692 - 169,692 Total operating expense 16,993,432 2,057,608 14,935,824 17,614,713 2,336,573 15,278,140 17,981,447 2,387,060 15,594,387 19,399,289 1,963,455 17,435,834 43,859,875 2,012,835 41,847,040 15,153,600 1,713,098 13,440,502 16,946,640 1,952,446 14,994,194 Operating income (loss) 998,594 (787,703) 1,786,297 789,108 (600,449) 1,389,557 (932,811) (1,019,206) 86,395 (1,995,740) 198,822 (2,194,562) (29,833,011) (657,138) (29,175,873) (161,359) (717,508) 556,149 (1,711,037) (394,472) (1,316,565) Net interest income 686,194 - 686,194 400,243 - 400,243 345,675 - 345,675 141,640 - 141,640 230,137 - 230,137 359,417 - 359,417 186,342 - 186,342 Gain on sales of marketable securities - - - - - - - - - 120,937 - 120,937 - - - 260,746 - 260,746 34,684 - 34,684 Other income - - - - - - - - - - - - 153,677 - 153,677 - - - - - - Income (loss) from continuing operations before income taxes 1,684,788 (787,703) 2,472,491 1,189,351 (600,449) 1,789,800 (587,136) (1,019,206) 432,070 (1,733,163) 198,822 (1,931,985) (29,449,197) (657,138) (28,792,059) 458,804 (717,508) 1,176,312 (1,490,011) (394,472) (1,095,539) (Provision) benefit for income taxes (145,928) - (145,928) (125,693) - (125,693) (106,364) - (106,364) 375,945 - 375,945 (16,227,077) - (16,227,077) (109,250) - (109,250) 53,222 - 53,222 Income (loss) from continuing operations 1,538,860 (787,703) 2,326,563 1,063,658 (600,449) 1,664,107 (693,500) (1,019,206) 325,706 (1,357,218) 198,822 (1,556,040) (45,676,274) (657,138) (45,019,136) 349,554 (717,508) 1,067,062 (1,436,789) (394,472) (1,042,317) Discontinued operations: Loss (income) on disposal of discontinued operations 2,731 - 2,731 2,085 - 2,085 3,079 - 3,079 117 - 117 (925) - (925) 9,532 - 9,532 1,846 - 1,846 Loss from discontinued operations 2,731 - 2,731 2,085 - 2,085 3,079 - 3,079 117 - 117 (925) - (925) 9,532 - 9,532 1,846 - 1,846 Net income (loss) 1,536,129 (787,703) 2,323,832 1,061,573 (600,449) 1,662,022 (696,579) (1,019,206) 322,627 (1,357,335) 198,822 (1,556,157) (45,675,349) (657,138) (45,018,211) 340,022 (717,508) 1,057,530 (1,438,635) (394,472) (1,044,163) Preferred stock cash dividends 96,424 - 96,424 96,424 - 96,424 96,424 - 96,424 96,424 - 96,424 96,424 - 96,424 96,424 - 96,424 96,424 - 96,424 Net income (loss) attributable to common stockholders $1,439,705 $ (787,703) $ 2,227,408 $ 965,149 $ (600,449) $ 1,565,598 $(793,003) $(1,019,206) $ 226,203 $(1,453,759) $ 198,822 $(1,652,581) $(45,771,773) $ (657,138) $(45,114,635) $ 243,598 $ (717,508) $ 961,106 $(1,535,059) $(394,472) $(1,140,587) Basic net income (loss) per share: Income (loss) from continuing operations $ 0.05 $ 0.07 $ 0.03 $ 0.05 $ (0.03) $ 0.01 $ (0.05) $ (0.05) $ (1.50) $ (1.48) $ 0.01 $ 0.03 $ (0.05) $ (0.04) Loss on disposal of discontinued operations (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) 0.00 0.00 (0.00) (0.00) (0.00) (0.00) Net income (loss) 0.05 0.07 0.03 0.05 (0.03) 0.01 (0.05) (0.05) (1.50) (1.48) 0.01 0.03 (0.05) (0.04) Preferred stock dividends (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) Net income (loss) attributable to common stockholders $ 0.05 $ 0.07 $ 0.03 $ 0.05 $ (0.03) $ 0.01 $ (0.05) $ (0.05) $ (1.50) $ (1.48) $ 0.01 $ 0.03 $ (0.05) $ (0.04) Diluted net income (loss) per share: Income (loss) from continuing operations $ 0.04 $ 0.06 $ 0.03 $ 0.05 $ (0.03) $ 0.01 $ (0.05) $ (0.05) $ (1.50) $ (1.48) $ 0.01 $ 0.03 $ (0.05) $ (0.04) Loss on disposal of discontinued operations (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) 0.00 0.00 (0.00) (0.00) (0.00) (0.00) Net income (loss) 0.04 0.06 0.03 0.05 (0.03) 0.01 (0.05) (0.05) (1.50) (1.48) 0.01 0.03 (0.05) (0.04) Preferred stock dividends (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) Net income (loss) attributable to common stockholders $ 0.04 $ 0.06 $ 0.03 $ 0.05 $ (0.03) $ 0.01 $(0.05) $ (0.05) $ (1.50) $ (1.48) $ 0.01 $ 0.03 $ (0.05) $ (0.04) Weighted average basic shares outstanding 30,392,980 30,392,980 30,452,497 30,452,497 30,482,949 30,482,949 30,381,156 30,381,156 30,495,300 30,495,300 30,620,349 30,620,349 30,606,216 30,606,216 Weighted average diluted shares outstanding 34,615,221 34,615,221 34,597,480 34,597,480 30,482,949 30,482,949 30,381,156 30,381,156 30,495,300 30,495,300 30,620,349 30,620,349 30,606,216 30,606,216 Adjusted EBITDA Net income (loss) $1,536,129 $ 787,703 $ 2,323,832 $1,061,573 $ 600,449 $ 1,662,022 $(696,579) $ 1,019,206 $ 322,627 $(1,357,335) $ (198,822) $(1,556,157) $(45,675,349) $ 657,138 $(45,018,211) $ 340,022 $ 717,508 $ 1,057,530 $(1,438,635) $ 394,472 $(1,044,163) Interest (686,194) - (686,194) (400,243) - (400,243) (345,675) - (345,675) (141,640) - (141,640) (230,137) - (230,137) (359,417) - (359,417) (186,342) - (186,342) Gain on sales of marketable securities - - - - - - - - - (120,937) - (120,937) - - - (260,746) - (260,746) (34,684) - (34,684) Provision (benefit) for income taxes 145,928 - 145,928 125,693 - 125,693 106,364 - 106,364 (375,945) - (375,945) 16,227,077 - 16,227,077 109,250 - 109,250 (53,222) - (53,222) Depreciation & amortization 1,263,604 - 1,263,604 1,584,780 - 1,584,780 1,481,670 - 1,481,670 1,564,132 - 1,564,132 1,470,737 - 1,470,737 1,207,710 - 1,207,710 1,348,806 - 1,348,806 EBITDA 2,259,467 787,703 3,047,170 2,371,803 600,449 2,972,252 545,780 1,019,206 1,564,986 (431,725) (198,822) (630,547) (28,207,672) 657,138 (27,550,534) 1,036,819 717,508 1,754,327 (364,077) 394,472 30,395 Other income - - - - - - - - - - - - (153,677) - (153,677) - - - - - - Intangible asset impairment - - - - - - - - - 2,325,481 - 2,325,481 24,137,069 - 24,137,069 - - - - - - Restructuring expense - - - - - - - - - - - - 2,360,267 - 2,360,267 574,281 - 574,281 169,692 - 169,692 Costs of review of Promotions.com accounting - - - - - - - - - - - - - - - - - - 1,307,778 - 1,307,778 Noncash compensation 701,097 (7,063) 694,034 952,035 (11,563) 940,472 986,076 (13,610) 972,466 897,877 (11,696) 886,181 1,243,613 (4,986) 1,238,627 341,981 (3,546) 338,435 573,221 (3,585) 569,636 Adjusted EBITDA $2,960,564 $ 780,640 $ 3,741,204 $3,323,838 $ 588,886 $ 3,912,724 $1,531,856 $ 1,005,596 $2,537,452 $ 2,791,633 $ (210,518) $ 2,581,115 $ (620,400) $ 652,152 $ 31,752 $1,953,081 $ 713,962 $ 2,667,043 $ 1,686,614 $ 390,887 $ 2,077,501 (1) The above information with respect to Promotions.com is presented as a non-GAAP measure for illustrative purposes regarding the disposition of the Company's Promotions.com subsidiary and is not meant to represent a reflection of the operating activities of the Promotions.com subsidiary as if it was on a fully stand-alone basis. Promotions.com was a legal subsidiary of the Company whose activities were a part of the combined results of the Company. Historically, Promotions.com was not considered an operating segment as management did not measure its results separately nor did management maintain separate discrete financial information including cash flows for its activities. The column "Excluding Promotions.com" gives effect to the disposition of the Promotions.com subsidiary as if such disposition had taken place on the first day of such respective period.
of Incorporation)
Identification No.)
New York, NY
(Former name or former address, if changed from last report)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TheStreet.com, Inc. (Registrant) |
Date: January 26, 2010 | By: | /s/ Gregory Barton |
|
| Executive Vice President, Business and Legal Affairs, General Counsel & Secretary |
TheStreet.com, Inc. Reports Second and Third Quarter 2009 Results,
Estimates Certain Fourth Quarter 2009 Results
and Restates Certain Prior Period Results
Delivers Positive Revenue Trends in Core Businesses; Increases Balance of Cash and Marketable Securities to over $82 million
Anticipates Timely Regaining Compliance with Nasdaq Listing Rules
NEW YORK, January 25, 2010 TheStreet.com, Inc. (Nasdaq: TSCM; http://www.thestreet.com), a leading digital financial media company, today reported financial results for the second and third quarters of 2009 and estimates of certain fourth quarter results. The Company also reported a restatement of certain items of its previously reported results for 2008 as a result of its earlier announced review of accounting matters related to a non-core subsidiary, Promotions.com which the Company divested in December 2009.
We are pleased to have concluded the review of accounting in our former Promotions.com subsidiary and to resume reporting our results, as we have been enjoying favorable trends in the Companys remaining businesses for the past couple of quarters, said Daryl Otte, the Companys Chief Executive Officer. Bookings in our paid services have seen double-digit percentage increases in the second half of 2009 as compared to the prior year period, after having been down in the first half. As bookings are the precursor to higher paid services revenue, this positions us well for 2010. In addition to our strong bookings performance since mid-year, we are pleased that our subscriber counts have risen each quarter after March 2009.
Our marketing services business excluding the divested Promotions.com subsidiary also is experiencing favorable trends. The large year-over-year revenue decline we witnessed in the first quarter, flattened in each of the second and third quarters, and our fourth quarter results exceeded the prior year results, for the first time in five quarters.
During the past year, we have concentrated on strengthening our management team, reducing costs and honing our strategic focus. In December, we enhanced our paid services team through the acquisition of Kikucall, Inc., an online subscription marketing firm, and sold the Promotions.com subsidiary in order to sharpen our focus on our core businesses of providing financial information services to paid subscribers and through ad-supported platforms. We also hired a new Chief Information Officer this month and General Counsel last June.
We note that our bottom line will benefit from the divestiture of the Promotions.com subsidiary, which provided a negative contribution of $2.2 million in the first 9 months of 2009 and a negative contribution of $2.2 million in fiscal 2008.
We are excited to be starting 2010 with all of our businesses showing good momentum, having a strong balance sheet with over $82 million of Cash(1) and marketable securities and no debt at year-end 2009 and generating positive Adjusted EBITDA(2). We intend to continue refining
and improving our product offerings and to enhance our leading position in the online financial media space. We believe that 2010 will be a year of many opportunities for us and look forward to re-engaging with our investors and reporting on our progress, Mr. Otte concluded.
Financial Highlights of Second and Third Quarter 2009
Note as discussed below, the Company will restate certain items of its consolidated financial statements for the year ended December 31, 2008 and the quarters within such fiscal year. The 2008 period results discussed below reflect the impact of the anticipated restatement. Please see unaudited tables attached to this press release for description of previously reported 2008 period results, anticipated adjustments in connection with the restatement and anticipated restated results.
The Company recorded revenue of $15.0 million in the second quarter of 2009, a reduction of 19% as compared to a restated $18.4 million in the second quarter of 2008. Operating expenses in the second quarter of 2009 were $15.2 million, a reduction of 14% as compared to a restated $17.6 million in the prior year period. The Company had net income of $0.3 million in the second quarter of 2009, as compared to a restated net income of $1.1 million in the prior year period. The Company reported basic and diluted net income per share attributable to common stockholders of $0.01 and $0.01, respectively, in the second quarter of 2009, as compared with a restated $0.03 and $0.03, respectively, in the prior year period. Adjusted EBITDA for the second quarter of 2009 was $2.0 million, as compared to a restated $3.3 million for the prior year period.
The Company recorded revenue of $15.2 million in the third quarter of 2009, a reduction of 11% as compared to a restated $17.0 million in the third quarter of 2008. Operating expenses in the third quarter of 2009 were $16.9 million, a reduction of 6% as compared to a restated $18.0 million in the prior year period. The Company had a net loss of $(1.4) million in the third quarter of 2009, as compared to a restated net loss of $(0.7) million in the prior year period. The Company reported basic and diluted net loss per share attributable to common stockholders of $(0.05) and $(0.05), respectively, in the third quarter of 2009, as compared with a restated $(0.03) and $(0.03), respectively, in the prior year period. Adjusted EBITDA for the third quarter of 2009 was $1.7 million, as compared to a restated $1.5 million for the prior year period.
As previously disclosed, the Company sold its Promotions.com subsidiary in December 2009. Attached to this press release are schedules that describe the impact of the Promotions.com subsidiary on the Companys quarterly consolidated results since January 2008.
Certain Estimated Results for Fourth Quarter 2009
The Company also announced certain estimated results for the quarter ended December 31, 2009, as follows:
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The Company expects its paid services revenue will be in the range of $9.5-$9.7 million, as compared to $9.9 million in the prior year period, with the decline primarily reflecting the year-over-year decline in paid services bookings experienced in the first half of the |
year. The Company expects its paid services bookings will increase from the prior year period by approximately 10%-13%. (The restatement of certain 2008 period results will not affect the Companys paid services revenue.)
|
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The Company expects its marketing services revenue, including the Promotions.com subsidiary through its divestiture in December 2009, will be in the range of $6.7-$6.9 million, as compared to a restated $7.5 million in the prior year period. |
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The Company expects its marketing services revenue, excluding the Promotions.com subsidiary, will be in the range of $5.5-$5.6 million, as compared to $5.3 million in the prior year period. (The restatement of certain 2008 period results will not affect the Companys marketing services revenue, excluding the Promotions.com subsidiary.) |
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The Company expects its balance of Cash and marketable securities at December 31, 2009 will be approximately $82.7 million, an increase of $6.3 million from December 31, 2008. The increase primarily reflects the Companys operating cash flow, together with the receipt of $1.0 million in cash from the sale of the Promotions.com subsidiary, offset in part by (i) cash payments totaling $5.5 million in connection with (a) the acquisition of Kikucall, (b) fees to professional advisors in connection with the acquisition of Kikucall and divestiture of the Promotions.com subsidiary and (c) expenses incurred in connection with the Review described below; and (ii) payment of $3.6 million in dividends. The Company had no debt at December 31, 2009. |
The Company notes that the above estimates for the quarter ended December 31, 2009 are preliminary, and may be subject to change.
Summary of Results of Accounting Review
The Company previously announced that it had identified an issue relating to its recording of certain revenue of its Promotions.com subsidiary, which the Company had acquired in August 2007 (and which, as noted above, the Company subsequently has sold) and that, as a result, the Audit Committee of the Companys Board of Directors (the Audit Committee) engaged outside counsel, Skadden, Arps, Slate, Meagher & Flom LLP, and accounting experts, AlixPartners LLP, and conducted an independent review of accounting matters related to the Promotions.com subsidiary (the Review). As a result of the Review, the Audit Committee concluded that, due to certain inaccuracies in the previously issued consolidated financial statements as of and for the year ended December 31, 2008 and the fiscal quarters within such fiscal year, respectively (collectively, the 2008 Periods), such consolidated financial statements no longer should be relied upon. The Company will restate its consolidated financial statements for the year ended December 31, 2008 and anticipates filing, on or before February 8, 2010, a Form 10-K/A for the year ended December 31, 2008, which shall contain certain revised results for the quarters within such fiscal year. The Company also anticipates revising certain amounts in its consolidated financial statements for the quarter ended March 31, 2009 related to this matter, including a reduction of revenue of approximately $0.5 million, a reduction of expense of approximately $0.1 million, and an increase in each of operating loss and net loss of approximately $0.4 million.
A summary of the anticipated restated financials are attached to this press release. The restatement will not affect the Companys previously reported cash, cash equivalents, restricted
cash and marketable securities. The restatement will make adjustments to correct errors related to the timing of recognition of revenue within the Promotions.com subsidiary and make adjustments to revenue and expense related to transactions with certain third parties involving the Promotions.com subsidiary, in which the Company contracted both to provide services to, and receive services from, such third parties. The adjustments will result in reduced revenue in certain quarters, and increased revenue in other quarters, as compared to results previously reported; reduced expense in certain quarters, as compared to results previously reported; and reduced net income (or increased net loss) in certain quarters, and reduced net loss in other quarters, as compared to results previously reported. Moreover, as a result of the restatement, certain revenue previously reported within 2008 Periods will be deferred and recognized in 2009.
Certain inaccuracies identified in the Review affected the Companys previously reported consolidated financial statements for the year ended December 31, 2007 (FY07), and quarters ended September 30, 2007 (Q307) and December 31, 2007 (Q407) (collectively, the 2007 Periods), however the Company concluded that such errors were not material to the Companys consolidated financial statements for the 2007 Periods and therefore such consolidated financial statements will not be restated. The Company provides disclosure below of the impact of the errors identified in the Review on such consolidated financial statements: (i) revenue (all of which was recorded in the Companys interactive marketing services within the Companys marketing services) was overstated by approximately $0.8 million, $0.1 million and $0.8 million, respectively, in Q307, Q407 and FY07, respectively; (ii) operating expense was overstated by approximately $0.03 million, $0.04 million and $0.07 million, respectively, in Q307, Q407 and FY07, respectively; and (iii) each of operating income, net income and EBITDA was overstated by approximately $0.7 million, $0.03 million and $0.8 million, respectively, in Q307, Q407 and FY07, respectively. The errors did not affect the Companys previously reported cash flows from operating activities, cash flows from investing activities or cash flows from financing activities for the 2007 Periods.
As previously reported, the Company had received from Nasdaq an exception allowing the Company to regain compliance by February 8, 2010, with the Nasdaq listing rule that requires the filing of all required periodic financial reports with the Securities and Exchange Commission. The Company anticipates regaining compliance with that Nasdaq listing rule on or before February 8, 2010.
TheStreet.com will conduct a conference call Monday, January 25, 2010, at 4:30 p.m. EST to discuss these preliminary results. To participate in the call, dial (866) 730-5767 (domestic) or (857) 350-1591 (international). The passcode for the call is 88920700.
To access the Web cast of the call please visit:
http://www.thestreet.com/investor-relations/index.html?detailInclude=IROL-IRhome
(Due to its length, this URL may need to be copied/pasted into your Internet browsers address field. Remove the extra space if one exists.)
About TheStreet.com
TheStreet.com is a leading digital financial media company. The Companys network includes the following properties: TheStreet.com, RealMoney.com, Stockpickr.com, BankingMyWay.com, MainStreet.com, and Rate-Watch.com. For more information and to get stock quotes and business news, visit http://www.thestreet.com.
(1) Cash includes cash, cash equivalents and restricted cash.
(2) To supplement the Companys financial statements presented in accordance with generally accepted accounting principles (GAAP), TheStreet.com, Inc. 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, taxes, depreciation and amortization. This non-GAAP measure is provided to enhance investors overall understanding of the Companys 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 Companys business and provide an indication of the Companys 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 and impairment expenses, as well as other non-standard one-time charges. 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 Companys businesses. Management evaluates the investments in such tangible and intangible assets through other financial measures, such as capital expenditure budgets and investment spending levels. These measures 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.
All statements contained in this press release other than statements of historical facts are 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, including those described in the Companys filings with the Securities and Exchange Commission, that could cause actual results to differ materially from those reflected in the forward-looking statements. 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.
Source: TheStreet.com, Inc.
CONTACT: TheStreet.com, Inc.
Gregory Barton
Phone: 212-321-5484
Email: IR@thestreet.com