TheStreet, Inc. (NASDAQ:TST) stock price moved up at 6.02% to $1.41 on Monday. Its total market capitalization is $68.06M. Its day lowest price was $1.32 and its hit its day highest price at $1.48. The stock recent volume is 265709 shares in comparison to its average trading volume of 126490 shares. Looking at the stock’s price level on the past 52-week graph, TST recorded a 52-week high of $1.7 and its 52-week low of $0.61.
TheStreet, Inc. (NASDAQ:TST) reported financial results for the fourth quarter and full year ended December 31, 2017.
For the fourth quarter of 2017, the company reported total revenue of $16.0 million, an increase of $0.1 million from the year prior. Net income for the quarter was $3.2 million, which represents the third consecutive quarter in 2017 where the company reported net income. Adjusted EBITDA (1) for the fourth quarter of 2017 was $2.8 million.
For the full year 2017, the company reported revenue of $62.5 million, a decrease of $1.0 million, or 1.6%, from $63.5 million in the prior year. Net income for the year was $2.6 million, which represents the first reported full year net income for the company since 2008. Adjusted EBITDA for full year 2017 was $8.0 million.
“I’m pleased to announce that the turnaround we started in 2016 and throughout the past year led to net income both including and excluding the unusual benefits and one-time charges for both the fourth quarter and the full year,” said David Callaway, President and CEO. “This is the first full year of net income since before the financial crisis. Combined with the retirement of our preferred stock in November and the support of new and existing shareholders, we now have the flexibility to extend the turnaround momentum into 2018.”
On November 10, 2017 the company announced that it had exchanged all shares of its Series B Preferred Stock for 6,000,000 shares of the company’s Common Stock and $20,000,000 cash. As a result of the retirement of the Series B Preferred Stock in the fourth quarter, the Company recorded a $22.4 million capital contribution attributable to preferred stockholders resulting in fully diluted net income to common shareholders of $0.58 per share and $0.66 for the fourth quarter and full year 2017, respectively, as compared to a loss of $0.33 per share and $0.50 per share during the same periods last year. Excluding the capital contribution attributable to preferred stockholders, goodwill impairment in 2016 and other restructuring charges recorded in both years, the Company recorded fully diluted net income attributable to common stockholders of $0.08 per share for the fourth quarter 2017 and $0.08 per share for the full year 2017 as compared to a net income of $0.01 attributable to common stockholders and a net loss of $0.09 attributable to common stockholders for the fourth quarter and full year of 2016, respectively.
Fourth quarter and full year 2017 net income reflects declines in cost of services and sales and marketing and depreciation and amortization expense and lower full year general and administrative expenses. This is partially offset by restructuring expense totaling $0.3 million and $0.5 million, for the fourth quarter and full year 2017, respectively. Drivers of the fourth quarter and full year 2016 net loss are a non-cash goodwill impairment in the amount of $11.6 million, an additional non-cash depreciation charge of $1.5 million, restructuring charges related to severance as well as lower premium subscription revenue, all partially offset by a $1.8 million non-cash contingent consideration reduction from the purchase of Management Diagnostics Limited (“MDL”).
Fourth Quarter Results
Business-to-business (“B2B”) revenue, which includes BoardEx, The Deal and RateWatch, totaled $8.3 million for the fourth quarter, up $0.9 million or 12% as compared to the fourth quarter of 2016. Business-to-consumer (“B2C”) revenue was $7.6 million for the fourth quarter 2017, down $0.8 million, or 10%, compared to the fourth quarter of 2016. B2B revenue continues to grow, comprising 52% of total revenue for the fourth quarter of 2017.
Operating expenses for the fourth quarter of 2017 were $15.1 million as compared to $28.2 million for the fourth quarter of 2016. Operating expense for the fourth quarter of 2017 includes $0.3 million of severance charges. The fourth quarter of 2016 includes an $11.6 million non-cash goodwill impairment, a cumulative adjustment of a non-cash depreciation charge of $1.5 million and a non-cash reduction of a contingent consideration of $1.8 million from the purchase of MDL in 2014 (collectively “Charges”), severance of $1.4 million, partially offset by the reversal of $0.7 million recorded in Q1 2016 as a one-time sales tax provision. In 2016, the Company also recorded a goodwill impairment charge related to a series of acquisitions made in 2012 and 2014 that have since produced results that were lower than expected at the time of the acquisitions. In addition, the company took measures to reduce costs and incurred a $1.4 million severance related charge. Excluding the 2017 severance and 2016 Charges, severance and reversal of the one-time sales tax provision, operating expenses for the fourth quarter 2017 decreased $1.4 million as compared to the fourth quarter of 2016.
Net income of $3.2 million for the fourth quarter of 2017 was an increase of $14.9 million from the prior year period. Excluding the Charges and one-time costs recorded during the periods, net income was $3.5 million for the fourth quarter 2017, an increase of $3.1 million over the same quarter last year. Adjusted EBITDA for the fourth quarter of 2017 was $2.8 million compared to $1.2 million from the prior year period. The increase in Adjusted EBITDA primarily resulted from strong B2B revenue growth, partially offset by the decline in B2C subscription revenue and lower operating expenses from cost controls instituted over the last year.
The Company reversed its UK operations tax valuation allowance of $1.9 million during the fourth quarter of 2017 due to positive earnings as well as a favorable profit outlook of its UK business and recorded a tax credit related to the recently enacted federal tax reform of $0.7 million.
B2B revenue for the fourth quarter of 2017 was $8.3 million, an increase of $0.9 million, or 12%, compared to the fourth quarter of 2016. Year over year revenue growth resulted primarily from increased subscription and information service revenue in the BoardEx and RateWatch businesses. In addition, The Deal also had higher year over year revenue in advertising and events for the fourth quarter 2017. Revenue growth also resulted from FX gains of $0.1 million during the quarter. This was partially offset by lower subscription income of $0.1 million in The Deal.
B2C revenue for the fourth quarter of 2017 was $7.6 million, a decrease of $0.8 million, or 10%, from $8.5 million in the fourth quarter of 2016. B2C subscription revenue for the fourth quarter of 2017 was $4.9 million, a decrease of $0.5 million, or 9%, from $5.3 million in the fourth quarter of 2016. This decrease primarily related to a 12% decline in the weighted-average number of subscriptions offset by a 3% increase in the average revenue recognized per subscription. Average monthly churn (2) improved to 4.04% for the fourth of 2017 from 4.21% for the fourth quarter of 2016. B2C advertising revenue also declined $0.5 million, or 17% primarily from the lower advertising generated by repeat advertisers. This was partially offset by higher event revenue which resulted from a highly successful “Teach-In” event hosted by Jim Cramer during the quarter.
Full Year Results
B2B revenue for the full year 2017 totaled $31.5 million, up $2.1 million or 7% from the prior year. Exchange rate changes related to the Pound sterling, negatively impacted BoardEx revenue by $0.2 million for the full year 2017. Adjusted for the negative impact of FX, total B2B revenue increased 8%. Growth of $2.0 million and $0.5 million in BoardEx and RateWatch, respectively, was partially offset by a decline of $0.4 million in The Deal (primarily in subscription revenue).
B2C revenue was $31.0 million, down 9%, compared to the prior year. The full year revenue decline resulted primarily in premium newsletter which declined $2.9 million year over year primarily from a 14% decline in the number of subscriptions partially offset by a 1% increase in average rate per subscriber. B2C advertising revenue of $9.5 million also declined $0.3 million as compared to full year 2016.
Operating expenses for the full year 2017 were $61.8 million, a decrease of $18.9 million, or 23%, from $80.7 million in the prior year. Operating expense for the full year of 2017 includes $0.6 million of restructuring and severance related charges. Excluding the 2017 restructuring and severance expense and the 2016 Charges mentioned in the Fourth Quarter Results above, along with other 2016 one-time expenses including severance of $1.6 million, restructuring charges of $1.0 million and a one-time sales tax expense of $0.7 million, operating expenses for full year 2017 decreased by $5.2 million, or 8%, as compared to the same period of the prior year. The $5.2 million reduction in operating expense primarily resulted from lower employee compensation and related benefits, outside freelance costs, change in the utilization of advertising and promotion along with savings in other general operating costs. Savings were partially offset by fluctuations of FX rates. Net income for the full year 2017 was $2.6 million compared to a net loss $17.5 million in the prior year.
With the retirement of the Company’s Series B Preferred Stock in November 2017, the company recorded a capital contribution attributable to preferred stockholders of $22.4 million resulting in a diluted net income attributable to common shareholders of $0.66 per share for full year 2017, as compared to a net loss to common shareholders of $0.50 per share for the prior year period. Adjusted EBITDA for the full year 2017 was $8.0 million compared to $2.8 million for the prior year.
Cash on hand
Net cash provided by operating activities for the full year ending December 31, 2017 totaled $6.0 million, up $8.7 million as compared to the same period during the prior year. The increase in net cash provided by operating activities was primarily the result of the change in our net income (loss) between periods, net of the 2016 goodwill impairment and change in the fair value of contingent consideration, change in the balance of deferred revenue and accounts receivable, partially offset by the change in the balance of accrued expenses and accounts payable. Increased cash from operating activities, lower year over year capital expenditures of approximately $1.2 million and proceeds received from the common stock PIPE with 180 Degree Capital Corp. was offset by the $20.9 million payment related to the extinguishment of the Series B preferred stock and related costs. As a result, the Company ended the year with cash and cash equivalents, restricted cash and marketable securities of $13.9 million, as compared to $23.4 million at December 31, 2016.
Shares of TheStreet, Inc. have been recently spotted trading -17.06% off of the 52-week high price. On the other end, company shares have been noted 129.64% away from the low price over the last 52-weeks. 52 week range of the stock remained $ 0.61 – 1.70. Switching over to some distances from popular moving averages, we see that the stock has been recorded 0.52% away from the 50 day moving average and 28.89% away from the 200 day moving average. Moving closer, we can see that shares have been trading 4.84% off of the 20-day moving average.