Delaware | 001-37893 | 77-0688094 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
33 Whitehall Street, 15th Floor New York, New York | 10004 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit No. | Description | |
Press release, dated November 7, 2018 |
Fluent, Inc. | |||
November 7, 2018 | By: | /s/ Ryan Schulke | |
Name: | Ryan Schulke | ||
Title: | Chief Executive Officer |
• | Total revenue increased 21% to $66.5 million, from $54.9 million. |
• | Net income from continuing operations was $4.5 million, compared to net loss from continuing operations of $10.8 million. |
• | Results from discontinued operations were $0, compared to net loss from discontinued operations of $3.3 million. |
• | Basic earnings per share from continuing operations was $0.06, compared to a loss of $0.19 per share. |
• | Adjusted EBITDA grew 56% to $12.4 million, based on net income of $4.5 million, compared to adjusted EBITDA of $7.9 million on net loss of $14.1 million. |
• | Adjusted gross profit increased 43% to $27.4 million, from $19.2 million. Adjusted gross margin increased 600 basis points to 41%, from 35%. |
• | Surpassed 200 million unique email addresses in the Fluent Identity Graph. |
• | Expanded revenue and margins as a result of consumer re-engagement through lifecycle marketing initiatives. |
• | Successfully deployed machine learning to enhance audience segmentation and drive incremental monetization. |
• | Increased scale and profitability in our UK beta launch. |
September 30, 2018 | December 31, 2017 | |||||||
ASSETS: | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 17,361 | $ | 16,564 | ||||
Accounts receivable, net of allowance for doubtful accounts of $1,751 and $1,624 at September 30, 2018 and December 31, 2017, respectively | 39,726 | 36,278 | ||||||
Prepaid expenses and other current assets | 1,779 | 1,865 | ||||||
Current assets of discontinued operations | — | 2,274 | ||||||
Total current assets | 58,866 | 56,981 | ||||||
Property and equipment, net | 421 | 687 | ||||||
Intangible assets, net | 66,065 | 74,354 | ||||||
Goodwill | 159,791 | 159,791 | ||||||
Other non-current assets | 564 | 1,097 | ||||||
Non-current assets of discontinued operations | — | 24,089 | ||||||
Total assets | $ | 285,707 | $ | 316,999 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,249 | $ | 7,408 | ||||
Accrued expenses and other current liabilities | 15,395 | 14,967 | ||||||
Deferred revenue | 714 | 265 | ||||||
Current portion of long-term debt | 7,227 | 2,750 | ||||||
Current liabilities of discontinued operations | — | 7,389 | ||||||
Total current liabilities | 30,585 | 32,779 | ||||||
Promissory notes payable to certain shareholders, net | — | 10,837 | ||||||
Long-term debt, net | 52,463 | 49,376 | ||||||
Total liabilities | 83,048 | 92,992 | ||||||
Shareholders' equity: | ||||||||
Preferred stock - $0.0001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2018 and December 31, 2017 | — | — | ||||||
Common stock - $0.0005 par value, 200,000,000 shares authorized; 76,516,415 and 61,631,573 shares issued at September 30, 2018 and December 31, 2017, respectively; and 75,291,330 and 61,279,050 shares outstanding at September 30, 2018 and December 31, 2017, respectively | 38 | 31 | ||||||
Treasury stock, at cost, 1,225,085 and 352,523 shares at September 30, 2018 and December 31, 2017, respectively | (3,253 | ) | (1,274 | ) | ||||
Additional paid-in capital | 392,886 | 392,687 | ||||||
Accumulated deficit | (187,012 | ) | (167,437 | ) | ||||
Total shareholders' equity | 202,659 | 224,007 | ||||||
Total liabilities and shareholders' equity | $ | 285,707 | $ | 316,999 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue | $ | 66,535 | $ | 54,942 | $ | 179,459 | $ | 155,167 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization) | 39,090 | 35,732 | 108,646 | 104,310 | ||||||||||||
Sales and marketing expenses | 4,186 | 5,105 | 11,870 | 13,478 | ||||||||||||
General and administrative expenses | 13,563 | 19,143 | 33,456 | 45,788 | ||||||||||||
Depreciation and amortization | 3,352 | 3,297 | 10,021 | 9,736 | ||||||||||||
Write-off of long-lived assets | — | — | — | 3,626 | ||||||||||||
Spin-off transaction costs | — | — | 7,708 | — | ||||||||||||
Total costs and expenses | 60,191 | 63,277 | 171,701 | 176,938 | ||||||||||||
Income (loss) from operations | 6,344 | (8,335 | ) | 7,758 | (21,771 | ) | ||||||||||
Interest expense, net | (1,882 | ) | (2,426 | ) | (6,209 | ) | (7,098 | ) | ||||||||
Income (loss) before income taxes from continuing operations | 4,462 | (10,761 | ) | 1,549 | (28,869 | ) | ||||||||||
Income taxes | — | — | — | — | ||||||||||||
Net income (loss) from continuing operations | 4,462 | (10,761 | ) | 1,549 | (28,869 | ) | ||||||||||
Discontinued operations: | ||||||||||||||||
Loss from operations of discontinued operations, net of $0 income taxes | — | (3,334 | ) | (2,084 | ) | (18,360 | ) | |||||||||
Loss on disposal of discontinued operations, net of $0 income taxes | — | — | (19,040 | ) | — | |||||||||||
Net loss from discontinued operations | — | (3,334 | ) | (21,124 | ) | (18,360 | ) | |||||||||
Net income (loss) | $ | 4,462 | $ | (14,095 | ) | $ | (19,575 | ) | $ | (47,229 | ) | |||||
Basic and diluted earnings (loss) per share: | ||||||||||||||||
Continuing operations | $ | 0.06 | $ | (0.19 | ) | $ | 0.02 | $ | (0.53 | ) | ||||||
Discontinued operations | $ | — | $ | (0.06 | ) | $ | (0.29 | ) | $ | (0.34 | ) | |||||
Net income (loss) | $ | 0.06 | $ | (0.25 | ) | $ | (0.26 | ) | $ | (0.86 | ) | |||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic and diluted | 78,199,579 | 55,390,247 | 73,941,595 | 54,665,776 |
Nine Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (19,575 | ) | $ | (47,229 | ) | ||
Net loss from discontinued operations | 21,124 | 18,360 | ||||||
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 10,021 | 9,736 | ||||||
Non-cash interest expense and related amortization | 1,491 | 2,268 | ||||||
Share-based compensation expense | 11,855 | 25,456 | ||||||
Write-off of long-lived assets | — | 3,626 | ||||||
Provision for bad debts | 462 | 2,175 | ||||||
Allocation of expenses to red violet | (325 | ) | (2,849 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (3,910 | ) | (7,708 | ) | ||||
Prepaid expenses and other current assets | (112 | ) | (528 | ) | ||||
Other non-current assets | 533 | 71 | ||||||
Accounts payable | (159 | ) | (7,464 | ) | ||||
Accrued expenses and other current liabilities | 628 | 8,900 | ||||||
Deferred revenue | 449 | 154 | ||||||
Net cash provided by operating activities from continuing operations | 22,482 | 4,968 | ||||||
Net cash used in operating activities from discontinued operations | (5,835 | ) | (7,902 | ) | ||||
Net cash provided by (used in) operating activities | 16,647 | (2,934 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | (107 | ) | (668 | ) | ||||
Capitalized costs included in intangible assets | (995 | ) | (694 | ) | ||||
Capital contributed to red violet | (19,728 | ) | — | |||||
Net cash used in investing activities from continuing operations | (20,830 | ) | (1,362 | ) | ||||
Net cash used in investing activities from discontinued operations | (1,386 | ) | (5,294 | ) | ||||
Net cash used in investing activities | (22,216 | ) | (6,656 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from issuance of shares, net of issuance costs | 13,392 | — | ||||||
Proceeds from debt obligations, net of debt costs | 67,182 | 14,039 | ||||||
Repayments of long-term debt | (72,229 | ) | (3,472 | ) | ||||
Taxes paid related to net share settlement of vesting of restricted stock units | (1,979 | ) | (743 | ) | ||||
Net cash provided by financing activities from continuing operations | 6,366 | 9,824 | ||||||
Net increase in cash and cash equivalents | $ | 797 | $ | 234 | ||||
Cash and cash equivalents at beginning of period | 16,564 | 10,089 | ||||||
Cash and cash equivalents at end of period | $ | 17,361 | $ | 10,323 | ||||
SUPPLEMENTAL DISCLOSURE INFORMATION | ||||||||
Cash paid for interest | $ | 4,931 | $ | 4,940 | ||||
Cash paid for income taxes | $ | — | $ | — | ||||
Share-based compensation capitalized in intangible assets | $ | 364 | $ | 373 | ||||
Reduction in value of puttable common stock classified as liability | $ | (200 | ) | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) | $ | 4,462 | $ | (14,095 | ) | $ | (19,575 | ) | $ | (47,229 | ) | |||||
Net loss from discontinued operations | — | 3,334 | 21,124 | 18,360 | ||||||||||||
Interest expense, net | 1,882 | 2,426 | 6,209 | 7,098 | ||||||||||||
Depreciation and amortization | 3,352 | 3,297 | 10,021 | 9,736 | ||||||||||||
Share-based compensation expense | 2,593 | 10,508 | 11,855 | 25,456 | ||||||||||||
Acquisition and restructuring costs | 119 | 2,474 | 3,149 | 4,792 | ||||||||||||
Write-off of long-lived assets | — | — | — | 3,626 | ||||||||||||
Litigation and other costs | — | 3 | 185 | 3 | ||||||||||||
Adjusted EBITDA | $ | 12,408 | $ | 7,947 | $ | 32,968 | $ | 21,842 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(In thousands, except share data) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) from continuing operations | $ | 4,462 | $ | (10,761 | ) | $ | 1,549 | $ | (28,869 | ) | ||||||
Add back: Spin-off transaction costs | — | — | 7,708 | — | ||||||||||||
Adjusted net income (loss) | $ | 4,462 | $ | (10,761 | ) | $ | 9,257 | $ | (28,869 | ) | ||||||
Adjusted earnings (loss) per share: | ||||||||||||||||
Basic and diluted | $ | 0.06 | $ | (0.19 | ) | $ | 0.13 | $ | (0.53 | ) | ||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic and diluted | 78,199,579 | 55,390,247 | 73,941,595 | 54,665,776 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 66,535 | $ | 54,942 | $ | 179,459 | $ | 155,167 | ||||||||
Cost of revenue (exclusive of depreciation and amortization) | 39,090 | 35,732 | 108,646 | 104,310 | ||||||||||||
Adjusted gross profit | $ | 27,445 | $ | 19,210 | $ | 70,813 | $ | 50,857 | ||||||||
Adjusted gross margin | 41 | % | 35 | % | 39 | % | 33 | % |