Delaware
|
06-1515824
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification
Number)
|
(Title
of Class)
|
Number
of Shares Outstanding
as
of November 6, 2007)
|
|
Common
Stock, par value $0.01 per share
|
|
29,474,392
|
Part
I - FINANCIAL INFORMATION
|
1
|
||||||
Item
1.
|
Interim
Consolidated Financial Statements
|
1
|
|||||
Consolidated
Balance Sheets
|
1
|
||||||
Consolidated
Statements of Operations
|
2
|
||||||
Consolidated
Statements of Cash Flows
|
3
|
||||||
Notes
to Consolidated Financial Statements
|
4
|
||||||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition
|
||||||
and
Results of Operations
|
17
|
||||||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
35
|
|||||
Item
4.
|
Controls
and Procedures
|
36
|
|||||
PART
II - OTHER INFORMATION
|
37
|
||||||
Item
1.
|
Legal
Proceedings
|
37
|
|||||
Item
1A.
|
Risk
Factors
|
38
|
|||||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
39
|
|||||
Item
3.
|
Defaults
Upon Senior Securities.
|
39
|
|||||
Item
4.
|
Submission
of Matters to a Vote of Security Holders.
|
40
|
|||||
Item
5.
|
Other
Information.
|
40
|
|||||
Item
6.
|
Exhibits
|
41
|
|||||
SIGNATURES
|
|
42
|
CONSOLIDATED
BALANCE SHEETS
|
September
30, 2007
|
December
31, 2006
|
||||||
ASSETS
|
(unaudited)
|
(Note
1)
|
|||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
38,276,451
|
$
|
46,055,232
|
|||
Accounts
receivable, net of allowance for doubtful
|
|||||||
accounts
of $482,077 as of September 30, 2007 and
|
|||||||
$216,077
as of December 31, 2006
|
9,263,383
|
6,314,553
|
|||||
Other
receivables
|
485,899
|
368,496
|
|||||
Deferred
taxes
|
5,800,000
|
-
|
|||||
Prepaid
expenses and other current assets
|
1,792,202
|
1,436,618
|
|||||
Total
current assets
|
55,617,935
|
54,174,899
|
|||||
Property
and equipment, net of accumulated depreciation
|
|||||||
and
amortization of $16,116,976 as of September 30, 2007
|
|||||||
and
$14,420,638 as of December 31, 2006
|
5,803,751
|
3,018,132
|
|||||
Other
assets
|
376,765
|
178,396
|
|||||
Goodwill
|
23,352,429
|
4,509,666
|
|||||
Other
intangibles, net
|
7,148,237
|
2,188,500
|
|||||
Deferred
taxes
|
10,200,000
|
-
|
|||||
Restricted
cash
|
576,951
|
500,000
|
|||||
Total
assets
|
$
|
103,076,068
|
$
|
64,569,593
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable
|
$
|
1,302,578
|
$
|
1,165,705
|
|||
Accrued
expenses
|
4,114,834
|
6,179,091
|
|||||
Deferred
revenue
|
13,556,333
|
12,705,038
|
|||||
Current
portion of note payable
|
-
|
22,146
|
|||||
Other
current liabilities
|
132,281
|
83,800
|
|||||
Current
liabilities of discontinued operations
|
222,994
|
222,425
|
|||||
Total
current liabilities
|
19,329,020
|
20,378,205
|
|||||
Other
liabilities
|
41,138
|
-
|
|||||
Total
liabilities
|
19,370,158
|
20,378,205
|
|||||
Stockholders'
Equity:
|
|||||||
Preferred
stock; $0.01 par value; 10,000,000 shares
|
|||||||
authorized;
none issued and outstanding
|
-
-
|
-
|
|||||
Common
stock; $0.01 par value; 100,000,000 shares
|
|||||||
authorized;
35,190,993 shares issued and 29,438,993
|
|||||||
Shares
outstanding as of September 30, 2007, and 33,606,835
|
|||||||
Shares
issued and 27,854,835 shares outstanding
|
|||||||
as
of December 31, 2006
|
351,910
|
336,068
|
|||||
Additional
paid-in capital
|
206,738,370
|
193,556,899
|
|||||
Treasury
stock at cost; 5,752,000 shares as of September 30, 2007
|
|||||||
and
December 31, 2006
|
(9,033,471
|
)
|
(9,033,471
|
)
|
|||
Accumulated
deficit
|
(114,350,899
|
)
|
(140,668,108
|
)
|
|||
Total
stockholders' equity
|
83,705,910
|
44,191,388
|
|||||
Total
liabilities and stockholders' equity
|
$
|
103,076,068
|
$
|
64,569,593
|
THESTREET.COM,
INC.
|
||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
For
the Three Months Ended
September
30,
|
For
the Nine Months Ended
September
30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(unaudited)
|
(unaudited)
|
||||||||||||
Net
revenue:
|
|||||||||||||
Paid
services
|
$
|
9,188,329
|
$
|
9,209,763
|
$
|
28,031,229
|
$
|
25,802,875
|
|||||
Marketing
services
|
6,930,030
|
3,739,605
|
17,493,982
|
10,689,815
|
|||||||||
Total
net revenue
|
16,118,359
|
12,949,368
|
45,525,211
|
36,492,690
|
|||||||||
Operating
expense:
|
|||||||||||||
Cost
of services
|
6,509,157
|
4,892,006
|
17,780,664
|
13,570,635
|
|||||||||
Sales
and marketing
|
2,619,286
|
2,327,948
|
9,004,490
|
6,798,440
|
|||||||||
General
and administrative
|
3,064,728
|
2,840,680
|
8,537,882
|
7,779,074
|
|||||||||
Depreciation
and amortization
|
654,397
|
314,356
|
1,469,539
|
718,235
|
|||||||||
Total
operating expense
|
12,847,568
|
10,374,990
|
36,792,575
|
28,866,384
|
|||||||||
Operating
income
|
3,270,791
|
2,574,378
|
8,732,636
|
7,626,306
|
|||||||||
Net
interest income
|
571,121
|
584,281
|
1,796,820
|
1,443,000
|
|||||||||
Income
from continuing operations before income taxes
|
3,841,912
|
3,158,659
|
10,529,456
|
9,069,306
|
|||||||||
Benefit
(provision) for income taxes
|
15,923,174
|
(63,162
|
)
|
15,789,445
|
(181,622
|
)
|
|||||||
Income
from continuing operations
|
19,765,086
|
3,095,497
|
26,318,901
|
8,887,684
|
|||||||||
Discontinued
operations:
|
|||||||||||||
(Loss)
income on disposal of discontinued operations
|
(569
|
) |
(549
|
)
|
(1,692
|
)
|
11,774
|
||||||
(Loss)
income from discontinued operations
|
(569
|
) |
(549
|
)
|
(1,692
|
)
|
11,774
|
||||||
Net
income
|
$
|
19,764,517
|
$
|
3,094,948
|
$
|
26,317,209
|
$
|
8,899,458
|
|||||
Basic
net income (loss) per share
|
|||||||||||||
Income
from continuing operations
|
$
|
0.68
|
$
|
0.11
|
$
|
0.92
|
$
|
0.33
|
|||||
(Loss)
income on disposal of discontinued operations
|
(0.00
|
) |
(0.00
|
)
|
(0.00
|
)
|
0.00
|
||||||
Net
income
|
$
|
0.68
|
$
|
0.11
|
$
|
0.92
|
$
|
0.33
|
|||||
Diluted
net income (loss) per share
|
|||||||||||||
Income
from continuing operations
|
$
|
0.67
|
$
|
0.11
|
$
|
0.91
|
$
|
0.33
|
|||||
(Loss)
income on disposal of discontinued operations
|
(0.00
|
) |
(0.00
|
)
|
(0.00
|
)
|
0.00
|
||||||
Net
income
|
$
|
0.67
|
$
|
0.11
|
$
|
0.91
|
$
|
0.33
|
|||||
Weighted
average basic shares outstanding
|
29,085,700
|
27,337,453
|
28,488,315
|
26,807,231
|
|||||||||
Weighted
average diluted shares outstanding
|
29,544,323
|
28,180,641
|
28,936,043
|
27,253,167
|
THESTREET.COM,
INC.
|
||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
For
the Nine Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
(unaudited)
|
|||||||
Cash
Flows from Operating Activities:
|
|||||||
Net
income
|
$
|
26,317,209
|
$
|
8,899,458
|
|||
Loss
(income) from discontinued operations
|
1,692
|
(11,774
|
)
|
||||
Income
from continuing operations
|
26,318,901
|
8,887,684
|
|||||
Adjustments
to reconcile income from continuing operations
|
|||||||
to
net cash provided by operating activities:
|
|||||||
Stock-based
compensation expense
|
1,608,479
|
1,317,964
|
|||||
Provision
for doubtful accounts
|
-
|
47,500
|
|||||
Depreciation
and amortization
|
1,469,539
|
718,235
|
|||||
Deferred
tax benefit
|
(16,000,000
|
)
|
-
|
||||
Deferred
rent
|
29,840
|
64,551
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(458,397
|
)
|
(1,199,558
|
)
|
|||
Other
receivables
|
(229,680
|
)
|
24,653
|
||||
Prepaid
expenses and other current assets
|
(331,463
|
)
|
(154,414
|
)
|
|||
Other
assets
|
(68,333
|
)
|
(15,836
|
)
|
|||
Accounts
payable
|
(452,662
|
)
|
(111,731
|
)
|
|||
Accrued
expenses
|
(2,221,257
|
)
|
1,668,711
|
||||
Deferred
revenue
|
(486,590
|
)
|
1,727,801
|
||||
Other
current liabilities
|
22,513
|
28,314
|
|||||
Other
liabilities
|
(2,583
|
)
|
-
|
||||
Net
cash provided by continuing operations
|
9,198,307
|
13,003,874
|
|||||
Net
cash used in discontinued operations
|
(1,123
|
)
|
(21,435
|
)
|
|||
Net
cash provided by operating activities
|
9,197,184
|
12,982,439
|
|||||
Cash
Flows from Investing Activities:
|
|||||||
Purchase
of Corsis Technology Group II LLC
|
(11,890,071
|
)
|
-
|
||||
Purchase
of Weiss Ratings, Inc.
|
31,342
|
(3,350,093
|
)
|
||||
Purchase
of Stockpickr.com
|
(1,572,106
|
)
|
-
|
||||
Sale
of short-term investments
|
-
|
500,000
|
|||||
Capital
expenditures
|
(3,364,371
|
)
|
(1,331,182
|
)
|
|||
Net
cash used in investing activities
|
(16,795,206
|
)
|
(4,181,275
|
)
|
|||
Cash
Flows from Financing Activities:
|
|||||||
Proceeds
from the exercise of stock options
|
2,010,563
|
4,671,103
|
|||||
Cash
dividends paid
|
(2,169,176
|
)
|
(2,038,418
|
)
|
|||
Repayment
of note payable
|
(22,146
|
)
|
(76,542
|
)
|
|||
Purchase
of treasury stock
|
-
|
(531,161
|
)
|
||||
Net
cash (used in) provided by financing activities
|
(180,759
|
)
|
2,024,982
|
||||
Net
(decrease) increase in cash and cash equivalents
|
(7,778,781
|
)
|
10,826,146
|
||||
Cash
and cash equivalents, beginning of period
|
46,055,232
|
32,414,539
|
|||||
Cash
and cash equivalents, end of period
|
$
|
38,276,451
|
$
|
43,240,685
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
payments made for interest
|
$
|
29,399
|
$
|
21,294
|
|||
Cash
payments made for income taxes
|
$
|
267,210
|
$
|
288,321
|
Assets
acquired:
|
||||
Accounts
receivable
|
$
|
22,780
|
||
Intangible
assets (amortizable over 5 years)
|
500,000
|
|||
Goodwill
|
4,560,907
|
|||
Total
assets acquired
|
5,083,687
|
|||
Liabilities
assumed:
|
||||
Accounts
payable
|
11,581
|
|||
Total
liabilities assumed
|
11,581
|
|||
Total
consideration (including legal fees of approximately
$72,000)
|
$
|
5,072,106
|
Assets
acquired:
|
||||
Cash
|
$
|
3,257
|
||
Accounts
receivable
|
2,432,137
|
|||
Due
from affiliates
|
581,710
|
|||
Other
receivables
|
133,512
|
|||
Prepaid
expenses and other current assets
|
77,000
|
|||
Property
and equipment
|
440,812
|
|||
Other
assets
|
146,579
|
|||
Goodwill
|
14,313,198
|
|||
Other
intangibles
|
5,000,000
|
|||
Restricted
cash
|
76,951
|
|||
Total
assets acquired
|
23,205,156
|
|||
Liabilities
assumed:
|
||||
Accounts
payable
|
545,611
|
|||
Accrued
expenses
|
207,000
|
|||
Deferred
revenue
|
1,337,885
|
|||
Other
current liabilities
|
105,802
|
|||
Due
from affiliates adjustment
|
242,653
|
|||
Other
liabilities
|
43,720
|
|||
Total
liabilities assumed
|
2,482,671
|
|||
Total
consideration (including legal fees of approximately
$136,000)
|
$
|
20,722,485
|
For
the Three Months Ended September 30,
|
For
the Nine Months Ended September 30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
Total
net revenue
|
$
|
16,982,687
|
$
|
15,537,215
|
$
|
52,028,285
|
$
|
48,026,742
|
|||||
Net
income
|
$
|
19,781,390
|
$
|
2,980,306
|
$
|
26,504,809
|
$
|
8,323,120
|
|||||
Basic
net income per share
|
$
|
0.68
|
$
|
0.11
|
$
|
0.93
|
$
|
0.30
|
|||||
Diluted
net income per share
|
$
|
0.67
|
$
|
0.10
|
$
|
0.92
|
$
|
0.30
|
|||||
Weighted
average basic shares outstanding
|
29,085,700
|
28,031,683
|
28,488,315
|
27,501,461
|
|||||||||
Weighted
average diluted shares outstanding
|
29,544,323
|
28,874,871
|
28,936,043
|
27,947,397
|
For
the Nine Months Ended September 30,
|
|||||||
2007
|
2006
|
||||||
Expected
option lives
|
3.5
years
|
3.5
years
|
|||||
Expected
volatility
|
46.67
|
%
|
44.84
|
%
|
|||
Risk-free
interest rate
|
4.64
|
%
|
4.76
|
%
|
|||
Expected
dividends
|
0.94
|
%
|
1.08
|
%
|
Shares
Underlying
Awards
|
Weighted
Average Exercise Price
|
Aggregate
Intrinsic Value ($000)
|
Weighted
Average Remaining Contractual Life (In Years)
|
||||||||||
Awards
outstanding at January 1, 2007
|
2,206,089
|
$
|
5.40
|
||||||||||
Options
granted
|
152,500
|
$
|
11.00
|
||||||||||
Restricted
stock units granted
|
247,210
|
$
|
0.00
|
||||||||||
Options
exercised
|
(184,500
|
)
|
$
|
3.62
|
|||||||||
Shares
issued under restricted stock units
|
(46,996
|
)
|
$
|
0.00
|
|||||||||
Options
cancelled
|
(250
|
)
|
$
|
1.66
|
|||||||||
Awards
outstanding at March 31, 2007
|
2,374,053
|
$
|
5.45
|
||||||||||
Options
granted
|
160,000
|
$
|
10.78
|
||||||||||
Options
exercised
|
(196,833
|
)
|
$
|
3.97
|
|||||||||
Restricted
stock units cancelled
|
(23,834
|
)
|
$
|
0.00
|
|||||||||
Options
cancelled
|
(136,501
|
)
|
$
|
9.57
|
|||||||||
Awards
outstanding at June 30, 2007
|
2,176,885
|
$
|
5.77
|
||||||||||
Options
granted
|
180,000
|
$
|
11.19
|
||||||||||
Options
exercised
|
(132,032
|
)
|
$
|
4.24
|
|||||||||
Restricted
stock units cancelled
|
(23,334
|
)
|
$
|
0.00
|
|||||||||
Options
cancelled
|
(60,834
|
)
|
$
|
8.96
|
|||||||||
Awards
outstanding at September 30, 2007
|
2,140,685
|
$
|
6.30
|
$
|
9,231
|
2.74
|
|||||||
Awards
vested and expected to vest at September 30, 2007
|
1,871,029
|
$
|
5.78
|
$
|
9,996
|
1.74
|
|||||||
Options
exercisable at September 30, 2007
|
902,288
|
$
|
4.95
|
$
|
4,577
|
1.84
|
|||||||
Restricted
stock units eligible to be issued at September 30, 2007
|
0
|
$
|
0.00
|
$
|
0
|
2.01
|
Unvested
Awards
|
Number
of Shares
|
Weighted
Average Grant Date Fair Value
|
|||||
Shares
underlying awards unvested at January 1, 2007
|
1,369,320
|
$
|
3.20
|
||||
Shares
underlying options granted
|
482,500
|
$
|
4.06
|
||||
Shares
underlying restricted stock units granted
|
247,210
|
$
|
8.71
|
||||
Shares
underlying options vested
|
(579,135
|
)
|
$
|
2.46
|
|||
Shares
underlying restricted stock units vested
|
(46,996
|
)
|
$
|
7.90
|
|||
Shares
underlying options cancelled
|
(187,335
|
)
|
$
|
3.44
|
|||
Shares
underlying restricted stock units cancelled
|
(47,168
|
)
|
$
|
8.55
|
|||
Shares
underlying awards unvested at September 30, 2007
|
1,238,396
|
$
|
4.55
|
Year
|
Nine-Months
Ended
|
||||||||||||||||||||||||
Initial
|
Year
2005
|
Balance
|
2006
|
Balance
|
September
30, 2007
|
Balance
|
|||||||||||||||||||
Charge
|
Activity
|
12/31/2005
|
Activity
|
12/31/2006
|
Deductions
|
Adjustments
|
9/30/2007
|
||||||||||||||||||
Net
asset write-off
|
$
|
666,546
|
$
|
(666,546
|
)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Severance
payments
|
1,134,323
|
(905,566
|
)
|
228,757
|
(6,332
|
)
|
222,425
|
-
|
-
|
222,425
|
|||||||||||||||
Extinguishment
of lease and other obligations
|
582,483
|
(531,310
|
)
|
51,173
|
(51,173
|
)
|
-
|
-
|
569
|
569
|
|||||||||||||||
$
|
2,383,352
|
$
|
(2,103,422
|
)
|
$
|
279,930
|
$
|
(57,505
|
)
|
$
|
222,425
|
$
|
-
|
$
|
569
|
$
|
222,994
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
· |
Providing
a broader range of content to our audience, including real estate,
politics, entrepreneurship, small business, and luxury living across
a
growing network of web sites; and
|
1 |
Consumer
Action and Capital One Financial Corporation national Survey “2007 annual
Survey of America's ''Financial IQ'' , released September 2007.
|
· |
Providing
innovative, interactive solutions for our advertisers, across our
full
range of distribution
platforms.
|
· |
Banner,
tile and interactive advertisement and sponsorship placements in
our
advertising-supported Web sites, TheStreet.com
and Stockpickr.com, as well as on our paid subscription
site,
RealMoney;
|
· |
Advertisement
placements in our free email
newsletters;
|
· |
Sponsorship
of stand-alone emails to our registered users;
and
|
· |
Advertisements
in TheStreet.com
TV
and in our audio Podcasts.
|
· |
Stockpickr.com
was named as one of 50 Best Websites 2007 in Time.com
Roundup;
|
· |
2006
Gerald Loeb Award for Distinguished Business and Financial Journalism,
Finalist for News Services and Online Content
category;
|
· |
2006
Media Industry Newsletter “Best of the Web” Awards, Finalist for Editor of
a Website (David Morrow, the Company’s
Editor-in-Chief);
|
· |
2007
Codie Awards finalist for “Best Online News Service” for
www.thestreet.com; and
|
· |
2007
Codie Awards finalist for “Best Financial Blog” for Jim Cramer’s Daily
“Booyahs!”
|
Nine
Months Ended
September
30, 2007
|
||||
Expected
option lives
|
3.5
years
|
|||
Expected
volatility
|
46.67
|
%
|
||
Risk-free
interest rate
|
4.64
|
%
|
||
Expected
dividends
|
0.94
|
%
|
For
the Three Months Ended September 30,
|
||||||||||||||||
Revenue:
|
2007
|
(*)
|
2006
|
(*)
|
Percent
Change |
|||||||||||
Paid
services
|
$
|
9,188,329
|
57
|
%
|
$
|
9,209,763
|
71
|
%
|
0
|
%
|
||||||
Marketing
services
|
6,930,030
|
43
|
%
|
3,739,605
|
29
|
%
|
85
|
%
|
||||||||
Total
revenue
|
$
|
16,118,359
|
100
|
%
|
$
|
12,949,368
|
100
|
%
|
24
|
%
|
For
the Three Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change |
||||||||
Paid
services:
|
||||||||||
Subscription
|
$
|
8,339,087
|
$
|
8,633,473
|
-3
|
%
|
||||
Syndication
and licensing
|
849,242
|
576,290
|
47
|
%
|
||||||
Total
|
$
|
9,188,329
|
$
|
9,209,763
|
0
|
%
|
For
the Three Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change |
||||||||
Marketing
services:
|
||||||||||
Advertising
|
$
|
4,610,579
|
$
|
3,739,605
|
23
|
%
|
||||
Interactive
marketing services
|
2,319,451
|
-
|
N/A
|
|||||||
Total
|
$
|
6,930,030
|
$
|
3,739,605
|
85
|
%
|
For
the Three Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change |
||||||||
Operating
expense:
|
||||||||||
Cost
of services
|
$
|
6,509,157
|
$
|
4,892,006
|
33
|
%
|
||||
Sales
and marketing
|
2,619,286
|
2,327,948
|
13
|
%
|
||||||
General
and administrative
|
3,064,728
|
2,840,680
|
8
|
%
|
||||||
Depreciation
and amortization
|
654,397
|
314,356
|
108
|
%
|
||||||
Total
operating expense
|
$
|
12,847,568
|
$
|
10,374,990
|
24
|
%
|
For
the Three Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change
|
||||||||
Net
interest income
|
$
|
571,121
|
$
|
584,281
|
-2
|
%
|
For
the Three Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change
|
||||||||
Loss
on disposal of discontinued operations
|
$
|
569
|
$
|
549
|
-4
|
%
|
September
30,
2007
|
December
31,
2006
|
||||||
Current
liabilities
|
$
|
222,994
|
$
|
222,425
|
For
the Three Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
Net
income
|
$
|
19,764,517
|
$
|
3,094,948
|
|||
Less
deferred taxes
|
(16,000,000
|
)
|
-
|
||||
Add
noncash stock compensation expense
|
536,898
|
496,648
|
|||||
Non-GAAP
adjusted net income
|
$
|
4,301,415
|
$
|
3,591,596
|
|||
Non-GAAP
adjusted basic net income per share
|
$
|
0.15
|
$
|
0.13
|
|||
Non-GAAP
adjusted diluted net income per share
|
$
|
0.15
|
$
|
0.13
|
|||
Weighted
average basic shares outstanding
|
29,085,700
|
27,337,453
|
|||||
Weighted
average diluted shares outstanding
|
29,544,323
|
28,180,641
|
For
the Three Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
Net
income
|
$
|
19,764,517
|
$
|
3,094,948
|
|||
Less
net interest income
|
(571,121
|
)
|
(584,281
|
)
|
|||
Add
taxes
|
(15,877,198
|
)
|
95,412
|
||||
Add
depreciation and amortization
|
654,397
|
314,356
|
|||||
EBITDA
|
$
|
3,970,595
|
$
|
2,920,435
|
For
the Nine Months Ended September 30,
|
||||||||||||||||
Revenue:
|
2007
|
(*)
|
2006
|
(*)
|
Percent
Change |
|||||||||||
Paid
services
|
$
|
28,031,229
|
62
|
%
|
$
|
25,802,875
|
71
|
%
|
9
|
%
|
||||||
Marketing
services
|
17,493,982
|
38
|
%
|
10,689,815
|
29
|
%
|
64
|
%
|
||||||||
Total
revenue
|
$
|
45,525,211
|
100
|
%
|
$
|
36,492,690
|
100
|
%
|
25
|
%
|
For
the Nine Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change |
||||||||
Paid
services:
|
||||||||||
Subscription
|
$
|
25,649,904
|
$
|
24,668,382
|
4
|
%
|
||||
Syndication
and licensing
|
2,381,325
|
1,134,493
|
110
|
%
|
||||||
Total
|
$
|
28,031,229
|
$
|
25,802,875
|
9
|
%
|
For
the Nine Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change |
||||||||
Marketing
services:
|
||||||||||
Advertising
|
$
|
15,174,531
|
$
|
10,689,815
|
42
|
%
|
||||
Interactive
marketing services
|
2,319,451
|
-
|
N/A
|
|||||||
Total
|
$
|
17,493,982
|
$
|
10,689,815
|
64
|
%
|
For
the Nine Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change |
||||||||
Operating
expense:
|
||||||||||
Cost
of services
|
$
|
17,780,664
|
$
|
13,570,635
|
31
|
%
|
||||
Sales
and marketing
|
9,004,490
|
6,798,440
|
32
|
%
|
||||||
General
and administrative
|
8,537,882
|
7,779,074
|
10
|
%
|
||||||
Depreciation
and amortization
|
1,469,539
|
718,235
|
105
|
%
|
||||||
Total
operating expense
|
$
|
36,792,575
|
$
|
28,866,384
|
27
|
%
|
For
the Nine Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change |
||||||||
Net
interest income
|
$
|
1,796,820
|
$
|
1,443,000
|
25
|
%
|
For
the Nine Months Ended
September
30,
|
||||||||||
2007
|
2006
|
Percent
Change |
||||||||
(Loss) income
on disposal of discontinued operations
|
$
|
(1,692
|
)
|
$
|
11,774
|
N/A
|
September
30,
2007
|
December
31,
2006
|
||||||
Current
liabilities
|
$
|
222,994
|
$
|
222,425
|
For
the Nine Months Ended September 30,
|
|||||||
2007
|
2006
|
||||||
Net
income
|
$
|
26,317,209
|
$
|
8,899,458
|
|||
Less
deferred taxes
|
(16,000,000
|
)
|
-
|
||||
Add
noncash stock compensation expense
|
1,608,479
|
1,317,964
|
|||||
Non-GAAP
adjusted net income
|
$
|
11,925,688
|
$
|
10,217,422
|
|||
Non-GAAP
adjusted basic net income per share
|
$
|
0.42
|
$
|
0.38
|
|||
Non-GAAP
adjusted diluted net income per share
|
$
|
0.41
|
$
|
0.37
|
|||
Weighted
average basic shares outstanding
|
28,488,315
|
26,807,231
|
|||||
Weighted
average diluted shares outstanding
|
28,936,043
|
27,253,167
|
For
the Nine Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
Net
income
|
$
|
26,317,209
|
$
|
8,899,458
|
|||
Less
net interest income
|
(1,796,820
|
)
|
(1,443,000
|
)
|
|||
Add
taxes
|
(15,663,602
|
)
|
278,372
|
||||
Add
depreciation and amortization
|
1,469,539
|
718,235
|
|||||
EBITDA
|
$
|
10,326,326
|
$
|
8,453,065
|
· |
higher
annual incentive compensation payments during the nine months ended
September 30, 2007 related to the 2006 fiscal year, as compared to
payments made during the nine months ended September 30, 2006 related
to
the 2005 fiscal year; and
|
· |
a
slow-down in the overall growth of deferred revenue in the nine months
ended September 30, 2007, as compared to the nine months ended September
30, 2006.
|
Payments
Due by Period
|
||||||||||||||||
Less
Than
|
After
|
|||||||||||||||
Contractual
obligations:
|
Total
|
1
Year
|
1
- 3 Years
|
4
- 5 Years
|
5
Years
|
|||||||||||
Operating
leases
|
$
|
3,887,952
|
$
|
1,665,664
|
$
|
1,938,125
|
$
|
284,163
|
$
|
-
|
||||||
Employment
agreements
|
5,040,358
|
2,724,837
|
2,315,521
|
-
|
-
|
|||||||||||
Outside
contributor agreements
|
498,687
|
384,104
|
114,583
|
-
|
-
|
|||||||||||
Total
contractual cash obligations
|
$
|
9,426,997
|
$
|
4,774,605
|
$
|
4,368,229
|
$
|
284,163
|
$
|
-
|
Period
|
(a)
Total Number of Shares (or Units) Purchased
|
(b)
Average Price Paid per Share (or Unit)
|
(c)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced
Plans or Programs
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares (or Units)
that May
Yet Be Purchased Under the Plans or Programs *
|
|||||||||
July
1 - 31, 2007
|
-
|
$
|
-
|
-
|
$
|
2,678,878
|
|||||||
August
1 - 31, 2007
|
-
|
$
|
-
|
-
|
$
|
2,678,878
|
|||||||
September
1 - 30, 2007
|
-
|
$
|
-
|
-
|
$
|
2,678,878
|
|||||||
Total
|
-
|
$
|
-
|
-
|
$
|
2,678,878
|
Exhibit
Number
|
Description
|
|
*3.1
|
Amended
and Restated Certificate of Incorporation
|
|
**3.2
|
Amended
and Restated Bylaws
|
|
*4.1
|
Amended
and Restated Registration Rights Agreement, dated as of December
21, 1998,
among TheStreet.com and the stockholders named therein
|
|
*4.2
|
TheStreet.com
Rights Agreement
|
|
†4.3
|
Amendment
No. 1, dated as of August 7, 2000, to Rights Agreement
|
|
††4.4
|
Specimen
Certificate for TheStreet.com’s common stock
|
|
○10.1
|
TheStreet.com,
Inc. 2007 Performance Incentive Plan
|
|
10.2
|
Employment
Agreement dated August 23, 2007, between David Morrow and
TheStreet.com
|
|
10.3
|
Employment
Agreement dated September 13, 2007, between Thomas J. Clarke, Jr.
and
TheStreet.com
|
|
∞10.4
|
Membership
Interest Purchase Agreement dated August 2, 2007 By and Among TP
Newco
LLC, David Barnett, Gregg Alwine and Gregg Alwine as
Agent
|
|
‡10.5
|
Stock
Purchase Agreement dated November 1, 2007 By and Among BFPC Newco
LLC,
Larry Starkweather, Kyle Selberg, Rachelle Zorn, Robert Quinn and
Larry
Starkweather as Agent
|
|
31.1
|
Rule
13a-14(a) Certification of CEO
|
|
31.2
|
Rule
13a-14(a) Certification of Chief Financial Officer
|
|
32.1
|
Section
1350 Certification of CEO
|
|
32.2
|
Section
1350 Certification of Chief Financial
Officer
|
*
|
Incorporated
by reference to Exhibits to the Company’s Registration Statement on Form
S-1 filed February 23, 1999 (File No. 333-72799).
|
|
**
|
Incorporated
by reference to Exhibits to the Company’s 1999 Annual Report on Form 10-K
filed March 30, 2000.
|
|
†
|
Incorporated
by reference to Exhibits to the Company’s 2000 Annual Report on Form 10-K
filed April 2, 2001.
|
|
††
|
Incorporated
by reference to Exhibits to Amendment 3 to the Company’s Registration
Statement on Form S-1 filed April 19, 1999.
|
|
○
|
Incorporated
by reference to Appendix A to the Company’s 2007 Proxy Statement filed
April 23, 2007.
|
|
∞
|
Incorporated
by reference to the Company’s report of Entry into a Material Definitive
Agreement on Form 8-K filed on August 8, 2007.
|
|
‡
|
Incorporated
by reference to the Company’s report of Entry into a Material Definitive
Agreement on Form 8-K filed on November 6,
2007.
|
THESTREET.COM,
INC.
|
||
|
|
|
Date: November 9, 2007 | By: | /s/ Thomas J. Clarke, Jr. |
Thomas J. Clarke, Jr. |
||
Chairman of the Board and Chief Executive Officer |
Date: November 9, 2007 | By: | /s/ Eric Ashman |
Eric Ashman |
||
Chief Financial Officer |
Exhibit
Number
|
Description
|
|
*3.1
|
Amended
and Restated Certificate of Incorporation
|
|
**3.2
|
Amended
and Restated Bylaws
|
|
*4.1
|
Amended
and Restated Registration Rights Agreement, dated as of December
21, 1998,
among TheStreet.com and the stockholders named therein
|
|
*4.2
|
TheStreet.com
Rights Agreement
|
|
†4.3
|
Amendment
No. 1, dated as of August 7, 2000, to Rights Agreement
|
|
††4.4
|
Specimen
Certificate for TheStreet.com’s common stock
|
|
○10.1
|
TheStreet.com,
Inc. 2007 Performance Incentive Plan
|
|
10.2
|
Employment
Agreement dated August 23, 2007, between David Morrow and
TheStreet.com
|
|
10.3
|
Employment
Agreement dated September 13, 2007, between Thomas J. Clarke,
Jr. and
TheStreet.com
|
|
∞10.4
|
Membership
Interest Purchase Agreement dated August 2, 2007 By and Among
TP Newco
LLC, David Barnett, Gregg Alwine and Gregg Alwine as
Agent
|
|
‡10.5
|
Stock
Purchase Agreement dated November 1, 2007 By and Among BFPC Newco
LLC,
Larry Starkweather, Kyle Selberg, Rachelle Zorn, Robert Quinn
and Larry
Starkweather as Agent
|
|
31.1
|
Rule
13a-14(a) Certification of CEO
|
|
31.2
|
Rule
13a-14(a) Certification of Chief Financial Officer
|
|
32.1
|
Section
1350 Certification of CEO
|
|
32.2
|
Section
1350 Certification of Chief Financial
Officer
|
*
|
Incorporated
by reference to Exhibits to the Company’s Registration Statement on Form
S-1 filed February 23, 1999 (File No. 333-72799).
|
|
**
|
Incorporated
by reference to Exhibits to the Company’s 1999 Annual Report on Form 10-K
filed March 30, 2000.
|
|
†
|
Incorporated
by reference to Exhibits to the Company’s 2000 Annual Report on Form 10-K
filed April 2, 2001.
|
|
††
|
Incorporated
by reference to Exhibits to Amendment 3 to the Company’s Registration
Statement on Form S-1 filed April 19, 1999.
|
|
○
|
Incorporated
by reference to Appendix A to the Company’s 2007 Proxy Statement filed
April 23, 2007.
|
|
∞
|
Incorporated
by reference to the Company’s report of Entry into a Material Definitive
Agreement on Form 8-K filed on August 8, 2007.
|
|
‡
|
Incorporated
by reference to the Company’s report of Entry into a Material Definitive
Agreement on Form 8-K filed on November 6,
2007.
|