The Meet Group Reports First Quarter 2020 Financial Results
Source: Business Wire
The Meet Group, Inc. (NASDAQ: MEET), a leading provider of interactive livestreaming solutions, today reported financial results for its first quarter ended March 31, 2020.
First Quarter 2020 Highlights
Total revenue of $55.1 million, up 11% from the first quarter of 2019.
GAAP net loss of $2.4 million, or $0.03 per diluted share, compared with GAAP net income of $1.3 million, or $0.02 per diluted share in the first quarter of 2019.
Adjusted EBITDA of $7.9 million, compared with $8.1 million in the first quarter of 2019.
Non-GAAP net income of $6.7 million, or $0.09 per diluted share, compared with $7.0 million, or $0.09 per diluted share, in the first quarter of 2019.
Transaction with ProSiebenSat.1’s and General Atlantic’s joint company NuCom Group expected to close in the second half of 2020.
(See the important discussion about the presentation of non-GAAP financial measures, and reconciliation to the most direct comparable GAAP financial measures, below.)
“The need to connect has never been greater and live video is helping to meet that need,” said Geoff Cook, Chief Executive Officer of The Meet Group. “We are seeing the impacts of COVID-19 across our business as video revenue and minutes increased to new highs, while advertising revenue declined from the year ago period due to the growing effect of the coronavirus on ad spend. Total daily active users were largely unchanged sequentially. Adjusted EBITDA for the quarter reflects the impact of higher flow-through advertising dollars being replaced by video revenue growth.
“We are pleased with our performance in the first quarter and we continue to progress toward closing the transaction with ProSiebenSat.1 and General Atlantic in the second half of 2020.”
First Quarter Financial Results
For the first quarter of 2020, the Company reported revenue of $55.1 million, an increase of $5.6 million, or 11%, from $49.5 million in the first quarter of 2019. GAAP net loss for the first quarter of 2020 was $2.4 million, or $0.03 per diluted share, compared with GAAP net income of $1.3 million or $0.02 per diluted share in the first quarter of 2019. Adjusted EBITDA for the first quarter of 2020 was $7.9 million, compared with $8.1 million in the first quarter of 2019. Non-GAAP net income for the first quarter of 2020 was $6.7 million, or $0.09 per diluted share, compared with $7.0 million, or $0.09 per diluted share, in the first quarter of 2019.
The Company ended the year with $32.1 million in cash and cash equivalents.
Outlook and Conference Call
Due to the pending acquisition by ProSiebenSat.1's and General Atlantic’s joint company NuCom Group, the Company does not plan to host an earnings conference call or provide forward-looking guidance.
THE MEET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)
(Unaudited)
March 31,
2020
December 31,
2019
Assets:
Current assets:
Cash and cash equivalents
$
32,110
$
27,241
Accounts receivable, net
23,966
25,234
Prepaid expenses and other current assets
5,820
6,062
Total current assets
61,896
58,537
Deferred tax assets
16,211
16,233
Property and equipment, net
3,047
3,625
Operating lease right-of-use assets
7,138
7,034
Intangible assets, net
26,945
29,305
Goodwill
155,693
156,687
Other assets
850
1,300
Total assets
$
271,780
$
272,721
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable
$
7,518
$
5,346
Accrued liabilities
18,915
20,090
Current portion of long-term debt
3,500
3,500
Current portion of operating lease liabilities
2,527
2,081
Current portion of finance lease obligations
9
10
Deferred revenue
3,563
3,884
Total current liabilities
36,032
34,911
Long-term debt, net
29,523
30,375
Long-term operating lease liabilities
4,723
5,024
Long-term finance lease obligations
48
53
Long-term derivative liabilities
477
1,451
Deferred tax liabilities
2,888
2,773
Other liabilities
—
894
Total liabilities
73,691
75,481
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; authorized - 5,000,000 shares; no shares issued and outstanding as of March 31, 2020 and December 31, 2019
—
—
Series A junior participating preferred stock, $0.001 par value; authorized - 200,000 shares; no shares issued and outstanding as of March 31, 2020 and December 31, 2019
—
—
Common stock, $0.001 par value; authorized - 100,000,000 shares; 71,185,492 and 70,756,013 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
71
71
Additional paid-in capital
434,622
430,959
Accumulated deficit
(234,073
)
(231,441
)
Accumulated other comprehensive loss
(2,531
)
(2,349
)
Total stockholders’ equity
198,089
197,240
Total liabilities and stockholders’ equity
$
271,780
$
272,721
THE MEET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and per share data)
Three Months Ended March 31,
2019
2018
Revenue
$
55,066
$
49,513
Operating costs and expenses:
Sales and marketing
7,714
7,841
Product development and content
37,671
31,123
General and administrative
5,030
4,928
Depreciation and amortization
2,820
3,198
Acquisition, restructuring and other
3,370
479
Total operating costs and expenses
56,605
47,569
(Loss) income from operations
(1,539
)
1,944
Other income (expense):
Interest income
13
32
Interest expense
(396
)
(403
)
Loss on foreign currency transactions
(7
)
(65
)
Loss on disposal of assets
(108
)
—
Other items of income, net
2
4
Total other expense
(496
)
(432
)
(Loss) income before income tax expense
(2,035
)
1,512
Income tax expense
(373
)
(254
)
Net (loss) income
$
(2,408
)
$
1,258
Basic and diluted net (loss) income per share:
Basic net (loss) income per share
$
(0.03
)
$
0.02
Diluted net (loss) income per share
$
(0.03
)
$
0.02
Weighted-average shares outstanding:
Basic
71,001,906
74,848,080
Diluted
71,001,906
78,799,248
THE MEET GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended March 31,
2020
2019
Cash flows from operating activities:
Net (loss) income
$
(2,408
)
$
1,258
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization
2,820
3,198
Amortization of right-of-use assets
635
695
Stock-based compensation expense
3,185
2,425
Deferred tax expense (benefit)
9
(147
)
Loss on disposal of assets
108
—
Loss on foreign currency transactions
7
65
Provision for expected credit losses
82
325
Non-cash interest expense
120
38
Changes in derivative financial instruments
171
—
Changes in contingent consideration obligations
23
16
Changes in operating assets and liabilities:
Accounts receivable
944
1,187
Prepaid expenses, other current assets and other assets
768
(774
)
Accounts payable and accrued liabilities
(638
)
(5,009
)
Deferred revenue
(275
)
85
Net cash provided by operating activities
5,551
3,362
Cash flows from investing activities:
Purchases of property and equipment
(87
)
(283
)
Acquisition of business, net of cash acquired
—
(11,808
)
Net cash used in investing activities
(87
)
(12,091
)
Cash flows from financing activities:
Proceeds from exercise of stock options
564
681
Repurchases of common stock
(65
)
—
Payments of finance leases
(5
)
(41
)
Proceeds from revolving loan
—
7,000
Payments for restricted stock awards withheld for taxes
(86
)
(89
)
Payments of term loan
(875
)
(7,317
)
Net cash (used in) provided by financing activities
(467
)
234
Change in cash and cash equivalents prior to effect of foreign currency exchange rate
4,997
(8,495
)
Effect of foreign currency exchange rate
(128
)
(60
)
Net increase (decrease) in cash and cash equivalents
4,869
(8,555
)
Cash and cash equivalents as of beginning of period
27,241
28,366
Cash and cash equivalents as of end of period
$
32,110
$
19,811
Supplemental disclosure of cash flow information:
Cash paid for interest
$
123
$
361
Cash paid for income taxes
$
973
$
297
THE MEET GROUP, INC. AND SUBSIDIARIES
DISAGGREGATION OF REVENUE
(UNAUDITED)
(in thousands)
Three Months Ended March 31,
2020
2019
$
%
$
%
User pay revenue:
Video
$
28,633
52.0
%
$
20,229
40.9
%
Subscription and other in-app products
14,395
26.1
%
15,596
31.5
%
Total user pay revenue
43,028
78.1
%
35,825
72.4
%
Advertising revenue
12,038
21.9
%
13,688
27.6
%
Total revenue
$
55,066
100.0
%
$
49,513
100.0
%
THE MEET GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA
(UNAUDITED)
(in thousands)
Three Months Ended March 31,
2020
2019
Net (loss) income
$
(2,408
)
$
1,258
Interest expense
396
403
Income tax expense
373
254
Depreciation and amortization expense
2,820
3,198
Stock-based compensation expense
3,185
2,425
Acquisition, restructuring and other
3,370
479
Loss on disposal of assets
108
—
Loss on foreign currency transactions
7
65
Adjusted EBITDA
$
7,851
$
8,082
THE MEET GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF NET (LOSS) INCOME TO NON-GAAP NET INCOME
(UNAUDITED)
(in thousands, except share and per share data)
Three Months Ended March 31,
2020
2019
Net (loss) income
$
(2,408
)
$
1,258
Stock-based compensation expense
3,185
2,425
Amortization of intangibles
2,177
2,562
Income tax expense
373
254
Acquisition, restructuring and other
3,370
479
Non-GAAP Net Income
$
6,697
$
6,978
GAAP basic net (loss) income per share
$
(0.03
)
$
0.02
GAAP diluted net (loss) income per share
$
(0.03
)
$
0.02
Basic Non-GAAP Net Income per share
$
0.09
$
0.09
Diluted Non-GAAP Net Income per share
$
0.09
$
0.09
