ShareNEW HOPE, Pa.–(BUSINESS WIRE)–
The Meet Group, Inc. (NASDAQ: MEET), a public market leader in the
mobile meeting space, today reported financial results for its third
quarter ended September 30, 2018.
Third Quarter 2018 Financial Highlights
- Total revenue of $45.7 million, up 42% year over year
-
GAAP net income of $1.3 million, or $0.02 per diluted share, compared
to $2.2 million, or $0.03 per diluted share in the prior year quarter -
Adjusted EBITDA of $8.7 million, compared to adjusted EBITDA of $8.9
million in the prior year quarter -
Non-GAAP net income of $7.6 million, or $0.10 per diluted share,
compared to $8.1 million or $0.11 per diluted share in the prior year
quarter
(See the important discussion about the presentation of non-GAAP
financial measures, and reconciliation to the most direct comparable
GAAP financial measures, below.)
“We continue to grow video revenue across all of our apps,” said Geoff
Cook, Chief Executive Officer. “In one year, we have increased the
annualized video revenue run rate from virtually zero to $55 million for
the month of October. Our successful Lovoo acquisition and integration,
together with the dramatic growth of video revenue, have contributed to
transforming our revenue mix. We tripled user pay revenue from a year
ago, with that portion of our business now contributing 61% of our total
revenue, up from 27% in the third quarter of 2017. We believe we are in
the early days of the video opportunity and that livestreaming aligns
perfectly with our mission: to facilitate human connection.
“Traffic in the quarter was also strong. We grew mobile daily active
users 3% sequentially to 4.3 million and mobile monthly active users 7%
sequentially to 14.6 million, reflecting quarter-over-quarter gains from
each of MeetMe, Lovoo, Skout, and Tagged. For the quarter, daily live
video users averaged approximately 870,000, up more than 36%
sequentially. In addition, we recently surpassed our 100 millionth gift
sent since launching Live monetization a year ago.”
“Advertising results were also solid,” continued Cook, “increasing
sequentially for the second consecutive quarter. We continue to see
evidence of a return to seasonal trends in advertising and remain
cautiously optimistic about the opportunity to grow ad revenue in the
fourth quarter.”
Third Quarter Financial Results
For the third quarter of 2018, the Company reported revenue of $45.7
million, an increase of 42% from $32.2 million in the prior year quarter.
GAAP net income was $1.3 million, or $0.02 per diluted share, compared
to $2.2 million, or $0.03 per diluted share, in the prior year quarter.
Adjusted EBITDA in the third quarter of 2018 was $8.7 million compared
to $8.9 million in the prior year quarter, reflecting the ongoing shift
towards user pay revenue.
The Company ended the quarter with $21.8 million in cash and cash
equivalents.
Company Outlook
The Company is providing the following outlook for the fourth quarter of
2018 and is increasing its outlook for the full year 2018.
Fourth quarter 2018:
- Revenue in the range of $47.8 million to $48.8 million
- Adjusted EBITDA in the range of $8.7 million to $9.1 million
Full year 2018:
- Revenue in the range of $174 million to $175 million
- Adjusted EBITDA in the range of $30.2 million to $30.6 million
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (UNAUDITED) | ||||||||
| September 30, 2018 |
December 31, 2017 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 21,822,387 | $ | 24,158,444 | ||||
|
Accounts receivable, net of allowance of $555,402 and $527,958 at September 30, 2018 and December 31, 2017, respectively |
24,575,376 | 26,443,675 | ||||||
| Prepaid expenses and other current assets | 5,081,053 | 3,245,174 | ||||||
| Total current assets | 51,478,816 | 53,847,293 | ||||||
| Restricted cash | 500,000 | 894,551 | ||||||
| Goodwill | 148,863,242 | 150,694,135 | ||||||
| Property and equipment, net | 3,253,213 | 4,524,118 | ||||||
| Intangible assets, net | 39,345,358 | 48,719,428 | ||||||
| Deferred taxes | 16,379,363 | 15,521,214 | ||||||
| Other assets | 1,972,799 | 1,144,032 | ||||||
| Total assets | $ | 261,792,791 | $ | 275,344,771 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 6,054,937 | $ | 6,277,846 | ||||
| Accrued liabilities | 19,146,585 | 19,866,438 | ||||||
| Current portion of long-term debt | 15,000,000 | 15,000,000 | ||||||
| Current portion of capital lease obligations | 152,131 | 254,399 | ||||||
| Deferred revenue | 4,820,137 | 4,433,450 | ||||||
| Total current liabilities | 45,173,790 | 45,832,133 | ||||||
| Long-term capital lease obligations, less current portion, net | 74,408 | 192,137 | ||||||
| Long-term debt, less current portion, net | 25,338,637 | 40,637,106 | ||||||
| Long-term derivative liability | 1,822,202 | 2,995,657 | ||||||
| Other liabilities | 114,627 | 147,178 | ||||||
| Total liabilities | 72,523,664 | 89,804,211 | ||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
|
Preferred stock, $.001 par value; authorized – 5,000,000 shares; 0 shares issued and outstanding at September 30, 2018 and December 31, 2017 |
— | — | ||||||
|
Common stock, $.001 par value; authorized – 100,000,000 shares; 73,534,370 and 71,915,018 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively |
73,534 | 71,918 | ||||||
| Additional paid-in capital | 415,572,623 | 408,029,068 | ||||||
| Accumulated deficit | (224,569,415 | ) | (221,435,888 | ) | ||||
| Accumulated other comprehensive loss | (1,807,615 | ) | (1,124,538 | ) | ||||
| Total stockholders’ equity | 189,269,127 | 185,540,560 | ||||||
| Total liabilities and stockholders’ equity | $ | 261,792,791 | $ | 275,344,771 | ||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenues | $ | 45,716,053 | $ | 32,246,472 | $ | 126,155,591 | $ | 83,634,737 | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Sales and marketing | 8,753,156 | 4,600,148 | 23,554,635 | 14,305,498 | ||||||||||||
| Product development and content | 26,134,682 | 16,021,977 | 72,647,507 | 41,006,376 | ||||||||||||
| General and administrative | 4,938,844 | 5,021,739 | 15,562,125 | 13,044,965 | ||||||||||||
| Depreciation and amortization | 3,423,929 | 2,969,570 | 10,558,712 | 7,619,584 | ||||||||||||
| Acquisition and restructuring | 416,141 | 3,378,838 | 4,802,694 | 8,648,692 | ||||||||||||
| Total operating costs and expenses | 43,666,752 | 31,992,272 | 127,125,673 | 84,625,115 | ||||||||||||
| Income (loss) from operations | 2,049,301 | 254,200 | (970,082 | ) | (990,378 | ) | ||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 3,823 | 1,374 | 13,773 | 5,344 | ||||||||||||
| Interest expense | (559,345 | ) | (244,361 | ) | (1,838,325 | ) | (421,947 | ) | ||||||||
| Gain (loss) on foreign currency transactions | (6,229 | ) | 9,357 | 101,030 | (2,072 | ) | ||||||||||
| Other | 6,527 | — | 28,154 | — | ||||||||||||
| Total other expense | (555,224 | ) | (233,630 | ) | (1,695,368 | ) | (418,675 | ) | ||||||||
| Income (loss) before income tax benefit (expense) | 1,494,077 | 20,570 | (2,665,450 | ) | (1,409,053 | ) | ||||||||||
| Income tax benefit (expense) | (196,146 | ) | 2,202,152 | (484,552 | ) | 4,934,216 | ||||||||||
| Net income (loss) | $ | 1,297,931 | $ | 2,222,722 | $ | (3,150,002 | ) | $ | 3,525,163 | |||||||
| Basic and diluted net income (loss) per common stockholder: | ||||||||||||||||
| Basic net income (loss) per common stockholder | $ | 0.02 | $ | 0.03 | $ | (0.04 | ) | $ | 0.05 | |||||||
| Diluted net income (loss) per common stockholder | $ | 0.02 | $ | 0.03 | $ | (0.04 | ) | $ | 0.05 | |||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 73,362,467 | 71,800,274 | 72,704,205 | 67,711,324 | ||||||||||||
| Diluted | 79,365,576 | 76,078,563 | 72,704,205 | 72,425,863 | ||||||||||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (UNAUDITED) | ||||||||
|
Nine Months Ended |
||||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (3,150,002 | ) | $ | 3,525,163 | |||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Depreciation and amortization | 10,558,712 | 7,619,584 | ||||||
| Stock-based compensation expense | 7,026,991 | 5,802,046 | ||||||
| Deferred taxes | (694,951 | ) | (5,383,583 | ) | ||||
| (Gain) loss on foreign currency transactions | (101,030 | ) | 2,072 | |||||
| Bad debt expense | 408,998 | 168,000 | ||||||
| Amortization of loan origination costs | 261,373 | 142,034 | ||||||
| Change in derivatives | (18,412 | ) | — | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,302,954 | 3,850,379 | ||||||
| Prepaid expenses, other current assets and other assets | (2,326,004 | ) | 4,391,126 | |||||
| Accounts payable and accrued liabilities | 4,414,400 | 2,669,471 | ||||||
| Deferred revenue | 515,743 | (115,831 | ) | |||||
| Net cash provided by (used in) operating activities | 18,198,772 | 22,670,461 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (404,446 | ) | (1,055,020 | ) | ||||
| Acquisition of business, net of cash and restricted cash acquired | — | (65,802,792 | ) | |||||
| Net cash provided by (used in) investing activities | (404,446 | ) | (66,857,812 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | 824,307 | 2,797,893 | ||||||
| Proceeds from issuance of common stock | — | 42,995,371 | ||||||
| Proceeds from exercise of warrants | — | 2,396,250 | ||||||
| Payments of capital leases | (211,290 | ) | (202,401 | ) | ||||
| Proceeds from long-term debt | — | 15,000,000 | ||||||
| Payments for restricted stock awards withheld for taxes | (306,127 | ) | (507,398 | ) | ||||
| Payments of contingent consideration | (5,000,000 | ) | — | |||||
| Payments on long-term debt | (15,559,842 | ) | (15,000,000 | ) | ||||
| Net cash provided by (used in) financing activities | (20,252,952 | ) | 47,479,715 | |||||
|
Change in cash, cash equivalents, and restricted cash prior to effects of foreign currency exchange rate |
(2,458,626 | ) | 3,292,364 | |||||
| Effect of foreign currency exchange rate (translation) | (271,982 | ) | (2,072 | ) | ||||
|
Net (decrease) increase in cash, cash equivalents, and restricted cash |
(2,730,608 | ) | 3,290,292 | |||||
| Cash, cash equivalents, and restricted cash at beginning of period | 25,052,995 | 22,246,015 | ||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 22,322,387 | $ | 25,536,307 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 1,598,781 | $ | 279,913 | ||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
| RECONCILIATION OF TOTAL REVENUE | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2018 |
2017(1) |
2018 |
2017(1) |
|||||||||||||||||||||
|
$ |
% |
$ |
% |
$ |
% |
$ |
% |
|||||||||||||||||
| User pay revenue | $ | 28,058,843 | 61.4 | % | $ | 8,582,700 | 26.6 | % | $ | 76,034,926 | 60.3 | % | $ | 18,342,865 | 21.9 | % | ||||||||
| Advertising | 17,657,210 | 38.6 | % | 23,663,772 | 73.4 | % | 50,120,665 | 39.7 | % | 65,291,872 | 78.1 | % | ||||||||||||
| Total revenue | $ | 45,716,053 | 100.0 | % | $ | 32,246,472 | 100.0 | % | $ | 126,155,591 | 100.0 | % | $ | 83,634,737 | 100.0 | % | ||||||||
|
(1) Prior period amounts have not been adjusted under the modified |
||||||||||||||||||||||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | |||||||||||||||
| RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net income (loss) | $ | 1,297,931 | $ | 2,222,722 | $ | (3,150,002 | ) | $ | 3,525,163 | ||||||
| Interest expense | 559,345 | 244,361 | 1,838,325 | 421,947 | |||||||||||
| Income tax (benefit) expense | 196,146 | (2,202,152 | ) | 484,552 | (4,934,216 | ) | |||||||||
| Depreciation and amortization | 3,423,929 | 2,969,570 | 10,558,712 | 7,619,584 | |||||||||||
| Stock-based compensation expense | 2,767,196 | 2,299,696 | 7,026,991 | 5,802,046 | |||||||||||
| Acquisition and restructuring | 416,141 | 3,378,838 | 4,802,694 | 8,648,692 | |||||||||||
| (Gain) loss on foreign currency transactions | 6,229 | (9,357 | ) | (101,030 | ) | 2,072 | |||||||||
| Adjusted EBITDA | $ | 8,666,917 | $ | 8,903,678 | $ | 21,460,242 | $ | 21,085,288 | |||||||
| GAAP basic net income (loss) per common stockholder | $ | 0.02 | $ | 0.03 | $ | (0.04 | ) | $ | 0.05 | ||||||
| GAAP diluted net income (loss) per common stockholder | $ | 0.02 | $ | 0.03 | $ | (0.04 | ) | $ | 0.05 | ||||||
| Basic adjusted EBITDA per common stockholder | $ | 0.12 | $ | 0.12 | $ | 0.30 | $ | 0.31 | |||||||
| Diluted adjusted EBITDA per common stockholder | $ | 0.11 | $ | 0.12 | $ | 0.28 | $ | 0.29 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 73,362,467 | 71,800,274 | 72,704,205 | 67,711,324 | |||||||||||
| Diluted | 79,365,576 | 76,078,563 | 77,831,545 | 72,425,863 | |||||||||||
| THE MEET GROUP, INC. AND SUBSIDIARIES | |||||||||||||||
| RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| GAAP Net income (loss) | $ | 1,297,931 | $ | 2,222,722 | $ | (3,150,002 | ) | $ | 3,525,163 | ||||||
| Stock-based compensation expense | 2,767,196 | 2,299,696 | 7,026,991 | 5,802,046 | |||||||||||
| Amortization of intangibles | 2,904,120 | 2,378,152 | 8,915,214 | 5,982,459 | |||||||||||
| Income tax (benefit) expense | 196,146 | (2,202,152 | ) | 484,552 | (4,934,216 | ) | |||||||||
| Acquisition and restructuring | 416,141 | 3,378,838 | 4,802,694 | 8,648,692 | |||||||||||
| Non-GAAP net income | $ | 7,581,534 | $ | 8,077,256 | $ | 18,079,449 | $ | 19,024,144 | |||||||
| GAAP basic net income (loss) per common stockholder | $ | 0.02 | $ | 0.03 | $ | (0.04 | ) | $ | 0.05 | ||||||
| GAAP diluted net income (loss) per common stockholder | $ | 0.02 | $ | 0.03 | $ | (0.04 | ) | $ | 0.05 | ||||||
| Basic Non-GAAP net income per common stockholder | $ | 0.10 | $ | 0.11 | $ | 0.25 | $ | 0.28 | |||||||
| Diluted Non-GAAP net income per common stockholder | $ | 0.10 | $ | 0.11 | $ | 0.23 | $ | 0.26 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 73,362,467 | 71,800,274 | 72,704,205 | 67,711,324 | |||||||||||
| Diluted | 79,365,576 | 76,078,563 | 77,831,545 | 72,425,863 | |||||||||||
Webcast and Conference Call Details
Management will host a webcast and conference call to discuss third
quarter 2018 financial results today, November 7, 2018 at 8:30 a.m.
Eastern time. To access the call dial 866-572-9351 (US and Canada) or
703-736-7482 (International) and when prompted provide the participant
passcode 3187279 to the operator. An audio replay will be available at
855-859-2056 domestically or 404-537-3406 internationally, using
passcode 3187279 through November 14, 2018. In addition, a webcast of
the conference call will be available live on the Investor Relations
section of the Company’s website at www.themeetgroup.com
and a replay of the webcast will be available for 90 days.
About The Meet Group
The Meet Group (NASDAQ: MEET) is a portfolio of mobile social
entertainment apps designed to meet the universal need for human
connection. We leverage a powerful live-streaming video platform,
empowering our global community to forge meaningful connections. Our
primary apps, MeetMe©, LOVOO©, Skout©, and Tagged©, keep millions of
mobile daily active users entertained and engaged and originate untold
numbers of casual chats, friendships, dates, and marriages. Our apps,
available on iPhone, iPad, and Android in multiple languages, use
innovative products and sophisticated data science to let our users
stream live video, send gifts, chat, and share photos. The Meet Group
has a diversified revenue mix consisting of in-app purchases,
subscription, and advertising, and we have offices in New Hope,
Philadelphia, San Francisco, Dresden, and Berlin. For more information,
visit themeetgroup.com,
and follow us on Facebook, Twitter
or LinkedIn.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995, including whether fourth quarter 2018 and full year 2018 revenue
and Adjusted EBITDA will be in the projected range, whether momentum
will continue as expected, whether we have set the stage for sustainable
long-term revenue growth as expected, whether our investment in
livestreaming video will continue to yield strong results, whether there
is a return to seasonal trends in advertising, whether there is an
opportunity to grow ad revenue in the fourth quarter and whether the
opportunity to continue to grow video engagement and revenue is
significant. All statements other than statements of historical facts
contained herein are forward-looking statements. The words “believe,”
“may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“could,” “target,” “potential,” “project,” “is likely,” “expect” and
similar expressions, as they relate to us, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on our current expectations and projections about
future events and financial trends that we believe may affect our
financial condition, results of operations, business strategy and
financial needs. Important factors that could cause actual results to
differ from those in the forward-looking statements include the risk
that our applications will not function easily or otherwise as
anticipated, the risk that we will not launch additional features and
upgrades as anticipated, the risk that unanticipated events affect the
functionality of our applications with popular mobile operating systems,
any changes in such operating systems that degrade our mobile
applications’ functionality and other unexpected issues which could
adversely affect usage on mobile devices. Further information on our
risk factors is contained in our filings with the Securities and
Exchange Commission (“SEC”), including the Form 10-K for the year ended
December 31, 2017 filed with the SEC on March 16, 2018 and our Quarterly
Report on Form 10-Q for the quarters ended March 31, 2018 and June 30,
2018 filed with the SEC on May 7, 2018 and August 2, 2018, respectively.
Any forward-looking statement made by us herein speaks only as of the
date on which it is made. Factors or events that could cause our actual
results to differ may emerge from time to time, and it is not possible
for us to predict all of them. We undertake no obligation to publicly
update any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be required
by law.
Regulation G – Non-GAAP Measures
The Company defines mobile traffic and engagement metrics (including
MAU, DAU, chats per day, and new users per day) to include mobile app
traffic for all properties and mobile web traffic for MeetMe, Skout and
Lovoo.
The Company uses Adjusted EBITDA and Non-GAAP Net Income, which are not
calculated and presented in accordance with U.S. generally accepted
accounting principles (“GAAP”), in evaluating its financial and
operational decision making and as a means to evaluate period-to period
comparison. The Company uses these non-GAAP financial measures for
financial and operational decision-making and as a means to evaluate
period-to-period comparisons. The Company presents these non-GAAP
financial measures because it believes them to be an important
supplemental measure of performance that is commonly used by securities
analysts, investors and other interested parties in the evaluation of
companies in our industry. We refer you to the reconciliations below.
The Company defines Adjusted EBITDA as earnings (or loss) from
operations before interest expense, benefit or provision for income
taxes, depreciation and amortization, stock-based compensation, changes
in warrant obligations, nonrecurring acquisition, restructuring or other
expenses, gain or loss on foreign currency adjustment, and goodwill and
long-lived asset impairment charges, if any. The Company excludes
stock-based compensation because it is non-cash in nature. The Company
defines Non-GAAP Net Income as earnings (or loss) before benefit or
provision for income taxes, amortization on intangibles, non-recurring
acquisition and restructuring costs, goodwill and long-lived asset
impairment charges and non-cash stock-based compensation.
Non-GAAP financial measures should not be considered as an alternative
to net income, operating income, cash flow from operating activities, as
a measure of liquidity or any other financial measure. They may not be
indicative of the historical operating results of the Company nor is it
intended to be predictive of potential future results. Investors should
not consider non-GAAP financial measures in isolation or as a substitute
for performance measures calculated in accordance with GAAP.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181107005450/en/
The Meet Group, Inc.
Investor Contact:
Leslie Arena,
267-714-6418
larena@themeetgroup.com
or
Media
Contact:
Brandyn Bissinger, 267-446-7010
bbissinger@themeetgroup.com
Source: The Meet Group, Inc.