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TheStreet.com Reports Record Fourth Quarter and 2007 Results

The company's total revenue was driven by strong advertising.
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Updated from 7:51 a.m. EST

TheStreet.com

(TSCM)

, a diversified financial media company and the publisher of this Web site, reported record revenue Thursday for its latest fourth quarter.

Total revenue was $19.9 million, an increase of 38% over the same period of 2006, driven by strong advertising. Net income increased by 19% to a record $4.7 million, or 16 cents a share, compared with $4 million, or 14 cents a share, a year earlier.

Excluding stock compensation expenses, earnings increased by 19% to $5.2 million, or 17 cents a share, compared with $4.4 million, or 16 cents a share, in the year-ago period.

For the full year ended Dec. 31, total revenue reached a record $65.4 million, an increase of 29% from $50.9 million in 2006. Net income was $31.1 million, or $1.06 a share, more than double the prior year's $12.9 million, or 47 cents a share.

Before the impact of a noncash income tax benefit of $16 million recorded in the third quarter, earnings for the full year were $15.1 million, or 51 cents a share, 17% above 2006's level. Excluding deferred taxes and stock compensation expenses, the company would have earned $17.2 million, or 58 cents a share, in 2007.

"When we look back at 2007, it will be remembered as a year of defining change for the organization," said Thomas J. Clarke Jr., chairman and chief executive officer of TheStreet.com, on a conference call. "This year's record financial results reflect our focus on delivering top- and bottom-line growth."

" With three acquisitions, we have continued to successfully execute on our strategy to create a network of properties that will be 'all things money,'" he said.

Those acquisitions were

Stockpickr.com ,

BankingMyWay.com and

Promotions.com.

"We continued to grow the number of unique visitors to our network of sites, with more than 6.4 million average monthly unique visitors in the fourth quarter

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up 41% vs. the prior year," said Eric Ashman, chief financial officer of TheStreet.com.

Fourth-quarter marketing-services revenue, which comprises advertising and $2.7 million of interactive marketing-services revenue from Promotions.com, totaled $9.5 million, a 99% increase over the $4.8 million recorded in the same quarter of 2006. For the year, marketing-services revenue was $27 million, 75% greater than last year's total of $15.4 million.

Advertising revenue in the final quarter of the year was a record $6.8 million, up 43% from the same period the previous year. Advertising revenue for the year was the highest in the company's history at $22 million, 42% better than the prior year.

Paid-services revenue in the fourth quarter, which includes subscription, syndication, licensing and information-services revenue, was $10.4 million, an increase of 8% year over year. For all of 2007, paid-services revenue was $38.4 million, also up 8%.

Fourth-quarter subscription revenue totaled $8.5 million, a decrease of 4% from subscription revenue of $8.8 million recorded in the fourth quarter of 2006. For the year, subscription revenue was $34.1 million, 2% above 2006.

Syndication, licensing and information services revenue totaled $1.9 million in the quarter, a 142% increase. For the year, revenue from those components was $4.3 million, 123% above the previous year.

Marketing-services and paid-services revenue in the fourth quarter accounted for 48% and 52%, respectively, of total revenue, compared with 33% and 67% in 2006. For the year, marketing-services and paid-services revenue accounted for 41% and 59%, respectively, of total revenue, compared to 30% and 70% in 2006.

Earnings before interest, taxes, depreciation and amortization totaled $5.3 million in the fourth quarter, an increase of 35% year over year. EBITDA, excluding stock compensation expense, was $5.8 million, an increase of 33% from last year. EBITDA totaled $15.6 million for the year, up 26%.

TheStreet.com reported a 125% year-over-year increase in nonfinancial-advertising revenue for the fourth quarter of 2007 and a 134% increase for the full year. Nonfinancial-advertising revenue represented 52% of total advertising revenue in the quarter, up from 33% in the fourth quarter of 2006. For the full year, nonfinancial advertising revenue was 44% of total advertising revenue, up from 27% in 2006.

As of Dec. 31, cash, restricted cash and cash equivalents totaled $79.7 million. The company has no bank debt. During the quarter, the company generated cash flow from operations of $4.2 million, while free cash flow totaled $2.6 million. For the full year, the company generated cash flow from operations of $13.4 million, and free cash flow was $8.5 million.

Additionally, the board of directors declared the company's eighth consecutive quarterly cash dividend, payable to all shareholders of record at the close of business Dec. 17. The cash dividend of 2.5 cents a share was paid Dec. 31.

In 2008, TheStreet.com launched MainStreet (www.mainstreet.com), a free Web site that presents original entertainment and celebrity news articles that illustrate a relevant personal finance topic. The multimedia editorial content is divided into sections corresponding with distinct life stages. Caroline Waxler, a 15-year media veteran, has joined TheStreet.com as managing editor of MainStreet.com.

TheStreet.com also relaunched its flagship Web site after an extensive redesign. Stockpickr was redesigned to facilitate more seamless content integration with TheStreet.com and to support user-generated video content.

Also, Technology Crossover Ventures, a provider of growth capital to late-stage private and public companies, recently purchased a minority stake in TheStreet.com. TCV's $55 million investment in TheStreet.com consists of preferred stock and warrants.

This article was written by a staff member of TheStreet.com.