Professional Diversity Network, Inc. (NASDAQ:IPDN), (“IPDN” or the
“Company”), a global developer and operator of online and in-person
networks that provides access to networking, training, educational
and employment opportunities for diverse individuals, today
announced its financial results for the quarter ended December 31,
2021.
“2021 was a transformative year for Professional
Diversity Network, Inc. We enhanced the quality of our business
lines with the addition of RemoteMore USA,” said Adam He, CEO of
Professional Diversity Network, Inc. “Our PDN Network remains a
leader in diversity recruitment and inclusion initiatives, showing
positive earnings (before interest, taxes, depreciation, and
amortization) in consecutive quarters for the first time in the
last five years. The change in business strategy in our IAW (NAPW)
Network has shown positive traction throughout the year as compared
to previous years. We have also strengthened our internal controls
through changes in technology and personnel, remediating the
material weakness issues from 2020. As we look forward to 2022, we
are focused on capitalizing on growth opportunities and maximizing
our return on organic operations.
In the first quarter of 2022, we implemented a
share repurchase program. This investment reflects our confidence
in the Company’s operating fundamentals and growth prospects. We
believe that this stock repurchase program demonstrates our
continued commitment to deliver long-term shareholder value.”
Fourth Quarter Financial
Highlights:
- Total consolidated revenues for the three months ended December
31, 2021, increased approximately $0.3 million or 21 percent as
compared to the same period in the prior year. PDN Network segment
revenues increased less than $0.1 million, or 4 percent compared to
revenues during the same period in the prior year. Revenues for the
three months ended December 31, 2021, from the NAPW segment
decreased less than approximately $0.1 million, or 24 percent as
compared to the same period in the prior year. Revenues for
RemoteMore USA during for the three months ended December 31, 2021,
were approximately $0.3 million for which there was no comparable
activity in the same period of the prior year.
- In the fourth quarter of fiscal 2020, we recorded approximately
$0.7 million as Other Income relating to the Paycheck Protection
Program (“PPP”) loan forgiveness we received from the Small
Business Administration. There was no comparable transaction in
2021.
- Basic and diluted net loss per share decreased by $0.08, from a
net loss per share of $0.01 during the three months ended December
31, 2020, as compared to a net loss per share of $0.09 during the
three months ended December 31, 2021.
- On December 31, 2021, cash balances were approximately $3.4
million as compared to $2.1 million on December 31, 2020. Working
capital on December 31, 2021, was approximately $0.4 million as
compared to a working capital deficiency of $1.2 million on
December 31, 2020.
Financial Results for the Three Months
Ended December 31, 2021
Revenues
Total revenues for the three months ended
December 31, 2021, increased approximately $253,000, or 21 percent
to approximately $1,471,000 from approximately $1,218,000 during
the same period in the prior year. The increase was predominately
attributable to approximately $284,000 in revenues associated with
RemoteMore for which there was no comparable revenues in the same
period of the prior year. Also contributing to the increase was
approximately $59,000 related to recruitment services revenues from
the PDN network in the current period, partially offset by an
approximate $69,000 decrease in legacy membership fees and related
services revenues related to the NAPW network, as compared to the
same period in the prior year.
During the three months ended December 31, 2021,
our PDN Network generated approximately $952,000 in revenues
compared to approximately $893,000 in revenues during the three
months ended December 31, 2020, an increase of approximately
$59,000 or 7 percent.
During the three months ended December 31, 2021,
revenues associated with our NAPW network were approximately
$220,000, compared to revenues of approximately $291,000 during the
same period in the prior year, a decrease of approximately $71,000
or 24 percent.
During the three months ended December 31, 2021,
revenues associated with RemoteMore were approximately $284,000 and
there were no revenues in the comparable period.
Costs and Expenses
Cost of revenues during the three months ended
December 31, 2021, was approximately $656,000, an increase of
approximately $418,000 or 176 percent from approximately $238,000
during the same period of the prior year. The increase was
predominately due to approximately $287,000 of contractor expenses
related to RemoteMore for which there were no comparable charges in
the same period of the prior year, and approximately $131,000
directly related to increased revenues.
General and administrative expenses increased by
approximately $188,000, or 17 percent, to approximately $1,320,000
during the three months ended December 31, 2021, as compared to the
same period in the prior year. The increase, as compared to the
same period in the prior year, was primarily a result of expenses
related to RemoteMore of approximately $98,000, for which there
were no comparable charges in the prior year, $47,000 related to
litigation settlement reserves, $34,000 related to bad debt
expense, and $62,000 of other purchased services.
Depreciation and amortization expenses increased
by approximately $265,000, or 834 percent, to approximately
$297,000 during the three months ended December 31, 2021, as
compared to the same period in the prior year. The increase was
predominately due to amortization of intangible assets related to
RemoteMore of approximately $270,000 for which there were no
comparable charges in the same period of the prior year.
Net Loss from Continuing
Operations
As the result of the factors discussed above,
during the three months ended December 31, 2021, we incurred a net
loss of approximately $1,427,000 from continuing operations, a
decrease of approximately $1,386,000, compared to a net loss of
approximately $41,000 during the three months ended December 31,
2020.
Financial Results for the Year Ended
December 31, 2021
Fiscal Year Financial
Highlights:
- Total consolidated revenues for the year ended December 31,
2021, increased approximately $1.6 million or 37 percent as
compared to the same period in the prior year. PDN Network segment
revenues increased $1.7 million, or 57 percent compared to revenues
during the same period in the prior year. Revenues for the year
ended December 31, 2021, from the NAPW segment decreased
approximately $0.4 million, or 27 percent as compared to the same
period in the prior year. Revenues for RemoteMore USA for the year
ended December 31, 2021, were approximately $0.3 million for which
there was no comparable activity in the same period of the prior
year.
- In the fourth quarter of fiscal 2020, we recorded approximately
$0.7 million as Other Income relating to the Paycheck Protection
Program (“PPP”) loan forgiveness we received from the Small
Business Administration. There was no comparable transaction in
2021.
- Basic and diluted net loss per share increased by $0.19, from a
net loss per share of $0.39 during the year ended December 31,
2020, as compared to a net loss per share of $0.20 during the year
ended December 31, 2021.
- During fiscal 2021, we entered into a private placement with
Ms. Yiran Gu, in which the Company sold 500,000 shares of its
common stock at a price per share of $2.00 for gross proceeds of
$1,000,000 and we closed a registered direct offering, pursuant to
which certain institutional accredited investors purchased
1,470,588 shares of the Company’s common stock at a per share price
equal to $1.70 for gross proceeds of $2,499,999.60.
- In fiscal 2021 The largest shareholder of the Company, CFL,
entered into two stock transfer agreements with the Company and an
existing shareholder to purchase 1,700,504 shares of its common
stock. CFL beneficially holds shares of the Company’s outstanding
Common Stock equal to approximately 32% upon closing of both
transactions.
Revenues
Total revenues increased approximately
$1,642,000, or 37%, from $4,457,000 for the year ended December 31,
2020 to approximately $6,099,000 for the year ended December 31,
2021. The increase in revenues was primarily attributable to an
approximately $ 1,685,000, or 57%, increase in recruitment service
revenues from the PDN Network and to a lesser extent, approximately
$302,000 related to contract revenue from RemoteMore for which
there was no comparable activity in the prior year, partially
offset by approximately $366,000, or 27%, decline in membership
fees and related services related to the NAPW Network.
During the year ended December 31, 2021, our PDN
Network generated approximately $4,810,000 in revenues compared to
$3,106,000 in revenues during the year ended December 31, 2020, an
increase of approximately $1,704,000 or 55%. The increase in
revenues was primarily due to new sales collaborations, higher new
client acquisitions and a significant increase in diversity
recruitment initiatives by our clients resulting in approximately a
$1,406,000 increase in corporate sales over the same period in the
prior year. Also contributing to the increase was continued
improvements in our e-commerce platform resulting in an approximate
$239,000 increase over the same period in the prior year. Event and
partner sales revenue combined for an increase of approximately
$56,000 over the same period in the prior year.
During the year ended December 31, 2021, NAPW
Network revenues were approximately $986,000, compared to revenues
of $1,351,000 during the year ended December 31, 2020, a decrease
of approximately $365,000 or 27%. The decrease in revenues was
primarily due to an approximate $372,000 decrease in legacy
membership and the continued effects of COVID-19 causing new
membership enrollment to decline throughout 2021, as compared to
the same period in the prior year. Retention rates for new members
that have enrolled in 2021 has increased as compared to the same
period in prior year. We believe that the membership services that
we provide to our customers turned into a discretionary spending
item during 2021 and the services that we provide were postponed by
the consumer as a result of the financial and economic impact of
COVID-19.
During the year ended December 31, 2021,
RemoteMore revenue was approximately $302,000, for which there was
no comparable revenue in the prior year.
Costs and Expenses
Cost of revenues during the year ended December
31, 2021, was approximately $1,524,000, an increase of
approximately $737,000, or 93.6 percent, from approximately
$787,000 during the same period in the prior year. The increase is
predominately a result of approximately $272,000 of costs directly
related to driving increased revenues, contractor costs of
approximately, $287,000 related to RemoteMore, for which there were
no comparable costs in the prior year, and approximately $177,000
related to payroll related costs.
General and administrative expenses decreased by
approximately $1,806,000, or 28 percent, to approximately
$4,623,000 during the year ended December 31, 2021, as compared to
the same period in the prior year. The decrease is predominately
associated with decreased litigation settlement costs of
approximately $1,821,000. Also contributing to the decrease were
reductions of insurance costs of approximately $152,000, bad debt
expense of approximately $44,000, and property rent costs of
approximately $109,000. Partially offsetting the general and
administrative expense decrease were increases of approximately
$104,000 in miscellaneous state taxes, approximately $73,000 in
payroll related costs, and approximately $114,000 in other related
costs.
Depreciation and amortization expenses increased
by approximately $215,000, to approximately $385,000 during the
year ended December 31, 2021, as compared to the prior year. This
is predominately due to $270,000 of amortization related to
RemoteMore, for which there is no comparable activity in 2020.
Partially offsetting the increase was a reduction in amortization
related to capitalized technology of approximately $41,000.
Net Loss from Continuing
Operations
As the result of the factors discussed above,
during the year ended December 31, 2021, we incurred a net loss of
approximately $2,861,000 from continuing operations, a decrease in
the net loss of approximately $1,296,000 or 31% from a net loss of
$4,158,000 for the year ended December 31, 2020.
Summary of the Quarter’s Financial
Information
Amounts in following tables are in thousands
except for per share amounts and outstanding shares.
Summary of Financial Position
|
|
December 31, 2021 |
|
|
December 31, 2020 |
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,403 |
|
|
$ |
2,118 |
|
Other current assets |
|
|
2,194 |
|
|
|
1,403 |
|
Total current assets |
|
$ |
5,597 |
|
|
$ |
3,521 |
|
Long-term assets |
|
|
3,388 |
|
|
|
5,152 |
|
Total Assets |
|
$ |
8,985 |
|
|
$ |
8,673 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
5,180 |
|
|
$ |
4,677 |
|
Total long-term
liabilities |
|
|
697 |
|
|
|
650 |
|
Total liabilities |
|
$ |
5,877 |
|
|
$ |
5,327 |
|
|
|
|
|
|
|
|
|
|
Total Professional Diversity
Network, Inc. stockholders’ equity |
|
|
2,791 |
|
|
|
3,346 |
|
Total stockholders’ equity –
noncontrolling interests |
|
|
317 |
|
|
|
- |
|
Total liabilities and
stockholders’ equity |
|
$ |
8,985 |
|
|
$ |
8,673 |
|
Summary of Financial Operations
|
|
Year EndedDecember 31, |
|
|
Change |
|
|
Change |
|
|
|
2021 |
|
|
2020 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
985 |
|
|
$ |
1,351 |
|
|
$ |
(366 |
) |
|
|
(27.1 |
)% |
Recruitment services |
|
|
4,647 |
|
|
|
2,962 |
|
|
|
1,685 |
|
|
|
56.9 |
% |
Software Development |
|
|
303 |
|
|
|
- |
|
|
|
303 |
|
|
|
100.0 |
% |
Consumer advertising and marketing solutions |
|
|
164 |
|
|
|
144 |
|
|
|
20 |
|
|
|
13.9 |
% |
Total revenues |
|
$ |
6,099 |
|
|
$ |
4,457 |
|
|
$ |
1,642 |
|
|
|
36.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
1,524 |
|
|
$ |
787 |
|
|
$ |
737 |
|
|
|
93.6 |
% |
Sales and marketing |
|
|
2,457 |
|
|
|
1,915 |
|
|
|
542 |
|
|
|
28.3 |
% |
General and
administrative |
|
|
4,623 |
|
|
|
6,429 |
|
|
|
(1,806 |
) |
|
|
(28.1 |
)% |
Depreciation and
amortization |
|
|
385 |
|
|
|
170 |
|
|
|
215 |
|
|
|
126.5 |
% |
Total pre-tax cost and
expenses: |
|
$ |
8,989 |
|
|
$ |
9,301 |
|
|
$ |
(312 |
) |
|
|
(3.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations, net of tax |
|
$ |
(2,861 |
) |
|
$ |
(4,158 |
) |
|
$ |
1,297 |
|
|
|
31.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.20 |
) |
|
$ |
(0.39 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
14,443,478 |
|
|
|
11,276,228 |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedDecember
31, |
|
|
Change |
|
|
Change |
|
|
|
2021 |
|
|
2020 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
220 |
|
|
$ |
291 |
|
|
$ |
(71 |
) |
|
|
(24.4 |
)% |
Recruitment services |
|
|
952 |
|
|
|
893 |
|
|
|
59 |
|
|
|
6.6 |
% |
Software Development |
|
|
303 |
|
|
|
- |
|
|
|
303 |
|
|
|
100.0 |
% |
Consumer advertising and marketing solutions |
|
|
15 |
|
|
|
34 |
|
|
|
(19 |
) |
|
|
(55.9 |
)% |
Total revenues |
|
$ |
1,471 |
|
|
$ |
1,218 |
|
|
$ |
253 |
|
|
|
20.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
656 |
|
|
$ |
238 |
|
|
$ |
418 |
|
|
|
175.6 |
% |
Sales and marketing |
|
|
631 |
|
|
|
511 |
|
|
|
120 |
|
|
|
23.5 |
% |
General and
administrative |
|
|
1,320 |
|
|
|
1,132 |
|
|
|
188 |
|
|
|
16.6 |
% |
Depreciation and
amortization |
|
|
297 |
|
|
|
32 |
|
|
|
265 |
|
|
|
828.1 |
% |
Total pre-tax cost and
expenses: |
|
$ |
2,904 |
|
|
$ |
1,913 |
|
|
$ |
991 |
|
|
|
51.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations, net of tax |
|
$ |
(1,427 |
) |
|
$ |
(41 |
) |
|
$ |
(1,386 |
) |
|
|
(3,380.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.09 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
16,236,985 |
|
|
|
12,819,843 |
|
|
|
|
|
|
|
|
|
Summary of Cash Flows from
Continued Operations |
|
|
|
|
|
|
|
|
Year EndedDecember 31, |
|
|
|
2021 |
|
|
2020 |
|
Cash (used in) provided by continued operations |
|
|
|
|
|
|
|
|
Operating activities |
|
$ |
(1,841 |
) |
|
$ |
(3,338 |
) |
Investing activities |
|
|
(1,288 |
) |
|
|
(65 |
) |
Financing activities |
|
|
4,445 |
|
|
|
4,928 |
|
Net increase in cash and cash
equivalents from continued operations |
|
$ |
1,316 |
|
|
$ |
1,525 |
|
Professional Diversity Network, Inc. and
SubsidiariesNon-GAAP (Adjusted) Financial
Measures
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
net loss from continuing operations to Adjusted EBITDA for the
three and nine months ended September 30, 2021 and 2020, the most
directly comparable GAAP measure reported in our consolidated
financial statements:
|
|
Three Months EndedDecember
31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands) |
|
Loss from Continuing Operations |
|
$ |
(1,516 |
) |
|
$ |
(954 |
) |
Stock-based compensation |
|
|
325 |
|
|
|
223 |
|
Litigation settlement reserve |
|
|
- |
|
|
|
766 |
|
Loss attributable to noncontrolling interest |
|
|
193 |
|
|
|
- |
|
Depreciation and amortization |
|
|
326 |
|
|
|
70 |
|
Interest and other income |
|
|
(6 |
) |
|
|
(646 |
) |
Income tax expense (benefit) |
|
|
(4 |
) |
|
|
(17 |
) |
Adjusted
EBITDA |
|
$ |
(581 |
) |
|
$ |
(558 |
) |
|
|
Year EndedDecember 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands) |
|
Loss from Continuing Operations |
|
$ |
(2,861 |
) |
|
$ |
(4,158 |
) |
Stock-based compensation |
|
|
634 |
|
|
|
620 |
|
Litigation settlement reserve |
|
|
175 |
|
|
|
1,475 |
|
Loss attributable to noncontrolling interest |
|
|
193 |
|
|
|
- |
|
Depreciation and amortization |
|
|
385 |
|
|
|
170 |
|
Interest and other income |
|
|
(8 |
) |
|
|
(652 |
) |
Income tax benefit |
|
|
(22 |
) |
|
|
(35 |
) |
Adjusted
EBITDA |
|
$ |
(1,504 |
) |
|
$ |
(2,580 |
) |
About Professional Diversity
Network
Professional Diversity Network, Inc. (NASDAQ:
IPDN) 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 including International
Association of Women (IAW), which is one of the largest, most
recognized networking organizations of professional women in the
country, spanning more than 200 industries and professions. 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, LGBTQ+ 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.”
Investor Inquiries:investors@ipdnusa.com+1 (312)
614-0950
Source: Professional Diversity Network, Inc.
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