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Professional Diversity Network, Inc. Reports First Quarter 2018 Financial Results

/EIN News/ -- CHICAGO, May 16, 2018 (GLOBE NEWSWIRE) -- 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 loss
per 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 Relations
Jassad@prodivnet.com
678-570-6791

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