TheStreet.com Reduces Loss With Lower Costs, Rising Subscription Revenue - TheStreet

TheStreet.com Reduces Loss With Lower Costs, Rising Subscription Revenue

Subscription products help offset weak advertising sales at the online business-news provider.
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The Street.com

(TSCM)

reported its smallest quarterly loss and cash-burn rate since its initial public offering, as the online provider of financial news and analysis slashed costs and boosted subscription revenue in the first quarter.

The company, which publishes this Web site, on Thursday posted a loss of $3.7 million, or 16 cents a share, for the first quarter on revenue of $4.1 million. That compares with a year-earlier loss of $7.2 million, or 26 cents a share.

Meanwhile, the company's cash-burn rate in the first quarter was $2.6 million, down 58% from the fourth quarter and down 81% from the same period last year. Meanwhile, operating expenses declined 33% from last year to $6.4 million.

Subscription revenue rose 47% from the same period last year to $3 million, while subscription bookings rose 123% from the previous quarter to $4.9 million -- the company's highest quarterly subscription bookings ever.

"With the introduction of our most recent products in the institutional marketplace, we are pleased to have increased our subscription revenue and bookings," CEO Thomas Clarke Jr. said in a statement. "These positive trends validate our long-held belief that consumers will pay for high-quality, independent and trustworthy, proprietary content."

On a conference call Thursday, Clarke said TheStreet.com continues to move closer to its goal of profitability, but he declined to say when he expects the company to break even.

TheStreet.com's total subscription base rose to 80,000 from 77,000 from the previous quarter, Clarke said on the call.

The company launched three new subscription products in the quarter --

RealMoney Pro

,

The Daily Swing Trade

and

The Telecom Connection

, all of which immediately added to the company's revenue stream.

RealMoney Pro

, launched Feb. 4, has an annualized run rate of about $2.4 million, the company said.

In a sign that the advertising market remains weak, ad revenue fell 63% from last year to $700,000.

Clarke said visibility remain limited on the advertising front, but the company expects to be well-positioned when ad spending comes back.

During the quarter, the Wall Street-based company received $150,000 in revenue from the World Trade Center Business Recovery Grant Program as compensation for lost revenue resulting from the terrorist attacks in Lower Manhattan on Sept 11.

The firm said it purchased an additional 1.7% of its shares outstanding in the first quarter. Since it began a stock-buyback program in December 2000, the company has repurchased 18.9% of shares outstanding at that time. Cash, restricted cash and investments as of March 31, 2002, totaled about $31.2 million.

On the call, Clarke noted that the TheStreet.com now will report results only on the basis of GAAP, or generally accepted accounting principles, and not pro forma results.