CHICAGO, March 31, 2017 (GLOBE NEWSWIRE) -- Professional Diversity Network, Inc. (NASDAQ:IPDN), ("PDN") a developer and operator of online networks that provide access to networking and employment opportunities for diverse professionals in the United States, announced today its fourth quarter and full year financial results for the year ended December 31, 2016.

Highlights include:
  • Net loss for the full year 2016 improved from a loss of $38.26 million for the full year 2015 to a loss of $4.11 million for the full year 2016; Adjusted EBITDA for the full year 2016 improved from a $5.16 million loss for the full year 2015 to a $1.66 million loss for the full year 2016
  • Net loss for Q4 2016 improved to a loss of $0.59 million from a loss of $3.82 million for Q4 2015; Adjusted EBITDA for Q4 2016 improved to a loss of $0.33 million from a loss of $2.02 million in Q4 2015
  • Operational enhancements during 2016 resulted in a 44.7% reduction in cost of revenues, although revenues declined by 31.3%

2016 Year-End Financial Results

For the year ended December 31, 2016, PDN reported total revenue of $26.23 million, a 31.3% decrease from the year ended December 31, 2015, attributable primarily to the decrease in NAPW and Noble Voice sales as a result of planned reductions in sales force. Total revenue for the fourth quarter of 2016 was $5.67 million, compared to $8.17 million in the same period one-year prior.

Total operating expenses for 2016 decreased by 60%, from $74.57 million in 2015 to $29.81 million for 2016. The significant decrease of $44.76 million is primarily a result of an impairment expense of $27.14 million during 2015, a net gain on litigation settlement of $1.24 million recognized during 2016, combined with management focus on operating cost reductions. For the quarter ended December 31, 2016, total operating expenses were $5.14 million, a decrease of 56%, or $6.45 million, from $11.60 million in the fourth quarter of 2015.

PDN reported a net loss for the year ended December 31, 2016 of $4.11 million or $1.98 per share - compared to a net loss of $38.26 million, or $21.99 per share, in the year prior. Net loss for the quarter ended December 31, 2016 was $0.59 million - compared to a net loss in the same period of the prior year of $3.82 million.

Loss from operations during 2016 was $3.59 million compared to a loss of $36.39 million in the prior year, representing a 90% decrease. During the fourth quarter of 2016, profit from operations was $0.53 million, compared to a loss of $3.43 million during the same period one-year prior.

As of December 31, 2016, the Company had $6.07 million in cash and $9.62 million in current assets, which represents an increase of $2.99 million in current assets from the period ended December 31, 2015, due to proceeds received from the sale of stock to Cosmic Forward Limited, our majority stockholder.  Accounts receivable as of December 31, 2016 was $2.17 million, 14% less than the $2.51 million, which PDN reported as of December 31, 2015. Total assets as of December 31, 2016 were $41.14 million, a slight decrease from $41.43 million as of December 31, 2015.

"We made a $21 million dollar investment in Professional Diversity Network with the goal of creating enhanced shareholder value. In late 2016, I assumed the Chief Executive Officer role at the company in order to lead a transformation of the company, from its current situation to the goal of growth and profitability. Our strategy is diverse. First, to refine the operations in the United States to be more efficient, increase revenues in a profitable manner and launch new products and services. Second, we intend to expand PDN's women's networking business to China, taking advantage of the significant and rapid economic development of China that has created millions of potential members for our women's networking platform within the country. Our plan to begin women's networking in China launched with our education and training products and services on March 25, 2017, with an inaugural event that attracted over 2,000 paid participants. This is only the first of the activities we plan for our China expansion," said Michael Wang, CEO of PDN.
   
Professional Diversity Network, Inc.  
Consolidated Statements of Operations  
   
    Year Ended December 31,  
    2016     2015  
          (revised)  
Revenues:            
Membership fees and related services   $ 16,254,932     $ 24,530,170  
Lead generation     6,239,057       9,499,203  
Recruitment services     2,931,642       3,123,537  
Product sales and other     578,466       748,648  
Consumer advertising and marketing solutions     222,969       280,043  
Total revenues     26,227,066       38,181,601  
                 
Costs and expenses:                
Cost of revenues     3,082,467       5,576,184  
Sales and marketing     13,315,008       22,501,594  
General and administrative     11,332,640       15,670,331  
Gain on litigation settlements, net     (1,240,297 )     -  
Goodwill impairment expense     -       27,140,126  
Depreciation and amortization     3,323,711       3,650,747  
Loss on sale of property and equipment     -       34,147  
Total costs and expenses     29,813,529       74,573,129  
                 
Loss from operations     (3,586,463 )     (36,391,528 )
                 
Other income (expense):                
Interest expense     (1,567,317 )     (84,728 )
Interest and other income     8,532       26,532  
Gain on settlement of debt     148,112       20,161  
Other expense, net     (1,410,673 )     (38,035 )
                 
Change in fair value of warrant liability     (401,000 )     93,789  
                 
Loss before income tax expense (benefit)     (5,398,136 )     (36,335,774 )
Income tax expense (benefit)     (1,289,634 )     1,919,497  
Net loss   $ (4,108,502 )   $ (38,255,271 )
                 
Net loss per common share, basic and diluted   $ (1.98 )   $ (21.99 )
                 
Weighted average shares used in computing net loss per common share:                
Basic and diluted     2,076,724       1,739,824  
                 

Professional Diversity Network, Inc.  
Consolidated Balance Sheets  
   
    December 31,  
    2016     2015  
          (revised)  
Current Assets:            
Cash and cash equivalents   $ 6,068,973     $ 2,070,693  
Accounts receivable, net     2,170,529       2,510,530  
Short-term investments     -       500,000  
Incremental direct costs     423,023       1,023,916  
Prepaid license fee     -       112,500  
Prepaid expenses and other current assets     957,140       411,592  
Total current assets     9,619,665       6,629,231  
                 
Property and equipment, net     277,534       444,398  
Capitalized technology, net     173,368       456,523  
Goodwill     20,201,190       20,201,190  
Intangible assets, net     9,183,439       12,051,839  
Merchant reserve     1,426,927       1,260,849  
Security deposits     220,754       383,786  
Other assets     35,000       -  
Total assets   $ 41,137,877     $ 41,427,816  
                 
Current Liabilities:                
Accounts payable   $ 2,172,332     $ 4,465,941  
Accrued expenses     962,172       837,712  
Deferred revenue     5,485,599       9,966,893  
Customer deposits     -       112,500  
Promissory note     -       445,000  
Total current liabilities     8,620,103       15,828,046  
                 
Deferred rent     55,718       45,155  
Deferred tax liability     3,653,274       4,942,908  
Other liabilities     33,159       426,267  
Total liabilities     12,362,254       21,242,376  
                 
Commitments and contingencies                
                 
Stockholders' Equity                
Common stock, $0.01 par value, 45,000,000 shares authorized,3,623,899 shares and 1,815,232 shares issued as of December 31,2016 and 2015, respectively, and 3,619,338 and 1,808,628 sharesoutstanding as of December 31, 2016 and 2015, respectively     36,204       18,097  
Additional paid in capital     76,234,772       63,554,194  
Accumulated deficit     (47,458,236 )     (43,349,734 )
Treasury stock, at cost; 1,048 shares at December 31, 2016 and 2015     (37,117 )     (37,117 )
Total stockholders' equity     28,775,623       20,185,440  
                 
Total liabilities and stockholders' equity   $ 41,137,877     $ 41,427,816  
                 

The following tables provide a reconciliation of Adjusted EBITDA to Net Loss, the most directly comparable GAAP measure reported in our consolidated financial statements:
    Year Ended  
    December 31,  
    2016     2015  
                     
    (Amount in thousands)  
Net loss   $ (4,109 )     $ (38,255 )  
Goodwill impairment expense     -         27,140    
Stock-based compensation expense     264         446    
Gain on litigation settlements, net     (1,240 )       -    
Gain on settlement of debt     (148 )       (20 )  
Gain on lease cancellation     (424 )       -    
Depreciation and amortization     3,324         3,651    
Change in fair value of warrant liability     401         (94 )  
Interest expense     1,567         85    
Interest and other income     (9 )       (27 )  
Income tax expense (benefit)     (1,290 )       1,919    
Adjusted EBITDA   $ (1,664 )     $ (5,155 )  
                     
    Three Months Ended  
    December 31,  
    2016     2015  
                     
  (Amount in thousands)  
Net loss   $ (589 )     $ (3,817 )  
Goodwill impairment expense     -         396    
Stock-based compensation expense     47         95    
Gain on litigation settlements, net     (1,740 )       -    
Gain on settlement of debt     (148 )       (20 )  
Depreciation and amortization     826         920    
Interest expense     1,350         -    
Interest and other income     (8 )       (1 )  
Income tax expense (benefit)     (72 )       410    
Adjusted EBITDA   $ (334 )     $ (2,017 )  
                     

About Professional Diversity Network (PDN) Professional Diversity Network, Inc. (PDN) is an Internet software and services company that develops and operates online professional networking communities dedicated to serving diverse professionals in the United States and employers seeking to hire diverse talent. We operate subsidiaries in the United States and China including Noble Voice, a career placement and career counseling call center and 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. 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 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 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.Gary Xiao - CFO gxiao@prodivnet.com 312-614-0944Chris Wesser - EVP and Secretarycwesser@prodivnet.com516-659-8560Jim Kirsch - Co Executive Chairmanjkirsch@prodivnet.com312-614-9021

Primary Logo