Professional Diversity Network, Inc. (NASDAQ:IPDN), (“PDN” or
the “Company”), a global developer and operator of online and
in-person networks that provide access to networking, training,
educational and employment opportunities for diverse individuals,
today announced its first quarter 2018 financial results for the
quarter ended March 31, 2018.
First Quarter Highlights include:
- Total cost and expenses reduced by $3.4 million, or 36.8%, from
$9.3 million for the quarter ended March 31, 2017 to $5.9 million
for the quarter ended March 31, 2018
- Significantly reduced net loss to $2.0 million for the quarter
ended March 31, 2018 compared to a net loss of $3.1 million for the
period ended March 31, 2017
- Significantly reduced Adjusted EBITDA loss to $1.5 million for
the quarter ended March 31, 2018 compared to $2.3 million for the
quarter ended March 31, 2017
- Continued to enhance the value of our brands and network
offerings to our members and business partners
Michael Wang, Professional Diversity Network Chief Executive
Officer, stated, "While the company continued to sustain losses, we
continue to make significant positive strides in our diversity
recruitment and women's networking segments. The improvements in
these sectors in the U.S. are very important to our global growth.
Our women's networking and employment services operations in the
U.S. are very complimentary to our China expansion. The company was
and remains committed to providing our members with a network to
enhance them professionally and personally.”
Wang continued, “We continue to have more work to do in China
and the U.S. in 2018 to enhance shareholder value. Our recruitment
brand is very strong and I am pleased with the measurable progress
made in 2017 and our first quarter of 2018 to create more value for
our customers by launching new services to help companies hire
executive talent, especially in the digital transformation sector.
For the balance of 2018, we will continue to remain vigilant on our
cost controls and invest in growth where and when we see
opportunities to do so. We continue to believe that China presents
significant opportunity for our future growth toward profitability
and much of my time and the company’s efforts will be in the China
market.”
2018 First quarter Financial Results
For the quarter ended March 31, 2018, PDN reported total revenue
of $3.5 million, a 37.0% decrease from the quarter ended March 31,
2017, attributable primarily to reductions in our sales staff and
workforce in our NAPW segment.
Total operating expenses for the quarter ended March 31, 2018,
decreased by 36.8% to $5.9 million from $9.3 million for the
quarter ended March 31, 2017. This decrease is primarily the result
of a $1,540,000 decrease in sales and marketing expenses mostly
attributable to NAPW segment as a result of lower headcount and
reduced spending on lead generation, a $624,000 decrease in legal
expenses, a $397,000 decrease in stock-based compensation, a
$221,000 decrease in general and administrative personnel expense
for our NAPW and Noble Voice segments, and a $159,000 decrease in
compensation to independent board directors.
The Company reported a net loss for the quarter ended March 31,
2018 of $2.0 million or $0.48 per share - compared to a net loss of
$3.1 million, or $0.80 per share, for the period ended March 31,
2017.
Loss from operations during the quarter ended March 31, 2018 was
$2.3 million compared to a loss of $3.7 million in the quarter
ended March 31, 2017, representing a 36.6% decrease. During the
first quarter of 2018, the Company reported an Adjusted EBITDA loss
of $1.5 million compared to Adjusted EBITDA loss of $2.3 million
during the same period of the prior year, a decrease of $0.8
million.
As of March 31, 2018, the Company had $2.7 million in cash and
$4.8 million in current assets, which represents a decrease of $0.3
million in cash and $0.9 million in current assets from December
31, 2017. Accounts receivable as of March 31, 2018, was $1.4
million, 30.5% less than the $2.0 million as of December 31, 2017.
Total assets as of March 31, 2018 were $17.4 million, a decrease of
$1.6 million from $19.0 million as of December 31, 2017.
|
Professional Diversity Network, Inc. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
March 31, |
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
(Unaudited) |
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash and cash
equivalents (Amount related to variable interest entity of
$1,407,188 and $1,671,378 as of March 31, 2018 and December 31,
2017, respectively) |
|
$ |
2,738,185 |
|
|
$ |
3,013,927 |
|
Accounts receivable,
net |
|
|
1,388,169 |
|
|
|
1,997,983 |
|
Incremental direct
costs |
|
|
67,799 |
|
|
|
145,292 |
|
Prepaid expenses and
other current assets |
|
|
568,566 |
|
|
|
478,379 |
|
Total current
assets |
|
|
4,762,719 |
|
|
|
5,635,581 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
139,960 |
|
|
|
237,037 |
|
Capitalized technology,
net |
|
|
167,126 |
|
|
|
158,142 |
|
Goodwill |
|
|
5,590,150 |
|
|
|
5,590,150 |
|
Intangible assets,
net |
|
|
5,745,606 |
|
|
|
6,381,206 |
|
Merchant reserve |
|
|
760,849 |
|
|
|
760,849 |
|
Security deposits |
|
|
227,451 |
|
|
|
225,957 |
|
Total assets |
|
$ |
17,393,861 |
|
|
$ |
18,988,922 |
|
|
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,492,957 |
|
|
$ |
1,524,066 |
|
Accrued expenses |
|
|
958,835 |
|
|
|
1,247,116 |
|
Deferred revenue |
|
|
3,398,905 |
|
|
|
4,004,015 |
|
Total current
liabilities |
|
|
5,850,697 |
|
|
|
6,775,197 |
|
|
|
|
|
|
|
|
|
|
Deferred tax
liability |
|
|
1,519,433 |
|
|
|
1,803,519 |
|
Deferred rent |
|
|
48,121 |
|
|
|
56,082 |
|
Other liabilities |
|
|
26,160 |
|
|
|
52,321 |
|
Total liabilities |
|
|
7,444,411 |
|
|
|
8,687,119 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
|
|
|
Common stock, $0.01 par
value; 45,000,000 shares authorized; 4,344,159 shares and 3,963,864
shares issued as of March 31, 2018 and December 31, 2017,
respectively; and 4,343,111 shares and 3,962,816 shares
outstanding as of March 31, 2018 and December 31, 2017,
respectively |
|
|
43,442 |
|
|
|
39,639 |
|
Additional paid in
capital |
|
|
81,617,767 |
|
|
|
80,016,218 |
|
Accumulated other
comprehensive loss |
|
|
105,556 |
|
|
|
28,848 |
|
Accumulated
deficit |
|
|
(71,780,198 |
) |
|
|
(69,745,785 |
) |
Treasury stock, at
cost; 1,048 shares at March 31, 2018 and December 31, 2017 |
|
|
(37,117 |
) |
|
|
(37,117 |
) |
Total stockholders'
equity |
|
|
9,949,450 |
|
|
|
10,301,803 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity |
|
$ |
17,393,861 |
|
|
$ |
18,988,922 |
|
|
|
|
|
|
|
|
|
|
|
Professional Diversity Network, Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS (Unaudited) |
|
|
Three Months Ended March 31, |
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
Membership fees and
related services |
|
$ |
1,612,221 |
|
|
$ |
2,815,496 |
|
Lead generation |
|
|
1,234,718 |
|
|
|
1,724,167 |
|
Recruitment
services |
|
|
621,415 |
|
|
|
658,544 |
|
Product sales and
other |
|
|
3,657 |
|
|
|
46,368 |
|
Education and
training |
|
|
6,471 |
|
|
|
324,204 |
|
Consumer advertising
and marketing solutions |
|
|
69,734 |
|
|
|
65,702 |
|
Total revenues |
|
|
3,548,216 |
|
|
|
5,634,481 |
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
Cost of revenues |
|
|
610,043 |
|
|
|
700,646 |
|
Sales and
marketing |
|
|
1,715,312 |
|
|
|
3,254,897 |
|
General and
administrative |
|
|
2,863,458 |
|
|
|
4,534,502 |
|
Depreciation and
amortization |
|
|
701,350 |
|
|
|
835,830 |
|
Total costs and
expenses |
|
|
5,890,163 |
|
|
|
9,325,875 |
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(2,341,947 |
) |
|
|
(3,691,394 |
) |
|
|
|
|
|
|
|
|
Other (expense)
income: |
|
|
|
|
|
|
|
Interest expense |
|
|
- |
|
|
|
(12,399 |
) |
Interest and other
income |
|
|
890 |
|
|
|
2,250 |
|
Other finance
costs |
|
|
22,558 |
|
|
|
(2,324 |
) |
Other income (expense),
net |
|
|
23,448 |
|
|
|
(12,473 |
) |
|
|
|
|
|
|
|
|
Loss before income tax
benefit |
|
|
(2,318,499 |
) |
|
|
(3,703,867 |
) |
Income tax benefit |
|
|
(284,086 |
) |
|
|
(602,286 |
) |
Net loss |
|
|
(2,034,413 |
) |
|
|
(3,101,581 |
) |
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
Foreign
currency translation adjustment |
|
|
76,708 |
|
|
|
(112 |
) |
Comprehensive loss |
|
$ |
(1,957,705 |
) |
|
$ |
(3,101,693 |
) |
|
|
|
|
|
|
|
|
Net loss per common
share, basic and diluted |
|
$ |
(0.48 |
) |
|
$ |
(0.80 |
) |
|
|
|
|
|
|
|
|
Weighted average shares
used in computing net lossper common share: |
|
|
|
|
|
|
|
Basic and
diluted |
|
|
4,221,620 |
|
|
|
3,870,386 |
|
|
|
|
|
|
|
|
|
|
|
Professional Diversity Network, Inc. |
ADJUSTED EBITDA (Unaudited) |
|
We believe Adjusted EBITDA provides a meaningful representation
of our operating performance that provides useful information to
investors regarding our financial condition and results of
operations. Adjusted EBITDA is commonly used by financial analysts
and others to measure operating performance. Furthermore,
management believes that this non-GAAP financial measure may
provide investors with additional meaningful comparisons between
current results and results of prior periods as they are expected
to be reflective of our core ongoing business. However, while we
consider Adjusted EBITDA to be an important measure of operating
performance, Adjusted EBITDA and other non-GAAP financial measures
have limitations, and investors should not consider them in
isolation or as a substitute for analysis of our results as
reported under GAAP. Further, Adjusted EBITDA, as we define it, may
not be comparable to EBITDA, or similarly titled measures, as
defined by other companies.
The following table provides a reconciliation of Adjusted EBITDA
to Net Loss, the most directly comparable GAAP measure reported in
our consolidated financial statements:
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
(in thousands) |
|
Net
loss |
|
$ |
(2,034 |
) |
|
$ |
(3,102 |
) |
Stock-based compensation expense |
|
|
118 |
|
|
|
516 |
|
Depreciation and amortization |
|
|
701 |
|
|
|
836 |
|
Interest
expense |
|
|
- |
|
|
|
12 |
|
Interest
and other income |
|
|
(1 |
) |
|
|
(2 |
) |
Income
tax benefit |
|
|
(284 |
) |
|
|
(602 |
) |
Adjusted EBITDA |
|
$ |
(1,500 |
) |
|
$ |
(2,342 |
) |
|
|
|
|
|
|
|
|
|
About Professional Diversity Network (PDN)
Professional Diversity Network, Inc. (PDN) is a
global developer and operator of online and in-person networks that
provides access to networking, training, educational and employment
opportunities for diverse professionals. We operate subsidiaries in
the United States and China including National Association of
Professional Women (NAPW), which is one of the largest, most
recognized networking organizations of professional women in the
country, spanning more than 200 industries and professions, and
Noble Voice, a career placement and career counseling call center.
Through an online platform and our relationship recruitment
affinity groups, we provide our employer clients a means to
identify and acquire diverse talent and assist them with their
efforts to comply with the Equal Employment Opportunity Office of
Federal Contract Compliance Program. Our mission is to utilize the
collective strength of our affiliate companies, members, partners
and unique proprietary platform to be the standard in
business diversity recruiting, networking and professional
development for women, minorities, veterans, LGBT and disabled
persons globally.
Forward-Looking Statements
This press release contains certain
forward-looking statements based on our current expectations,
forecasts and assumptions that involve risks and uncertainties.
This release does not constitute an offer to sell or a solicitation
of offers to buy any securities of any entity. Forward-looking
statements in this release are based on information available to us
as of the date hereof. Our actual results may differ materially
from those stated or implied in such forward-looking statements,
due to risks and uncertainties associated with our business, which
include the risk factors disclosed in our most recently filed
Annual Report on Form 10-K and in our subsequent filings with the
Securities and Exchange Commission. Forward-looking statements
include statements regarding our expectations, beliefs, intentions
or strategies regarding the future and can be identified by
forward-looking words such as "anticipate," "believe," "could,"
"estimate," "expect," "intend," "may," “plan,” "should," and
"would" or similar words. We assume no obligation to update the
information included in this press release, whether as a result of
new information, future events or otherwise. Our most recently
filed Annual Report on Form 10-K, together with this press release
and the financial information contained herein, are available on
our website, www.prodivnet.com. Please click on "Investor
Relations."
CONTACT: Professional Diversity Network, Inc.
Jason Assad – Investor
RelationsJassad@prodivnet.com678-570-6791
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