Home / Top News / Professional Diversity Network, Inc. Reports First Quarter 2019 Financial Results

Professional Diversity Network, Inc. Reports First Quarter 2019 Financial Results

CHICAGO, May 20, 2019 (GLOBE NEWSWIRE) — Professional Diversity Network, Inc. (NASDAQ:IPDN), (“IPDN” or the “Company”), a global developer and operator of online and in-person networks that provides access to networking, training, educational and employment opportunities for diverse individuals, today announced its financial results for the quarter ended March 31, 2019.

First Quarter 2019 Financial Highlights:

  • Net loss from continuing operations was $1.1 million for the quarter ended March 31, 2019, a decrease of 37.3% from $1.8 million for the quarter ended March 31, 2018.
     
  • Total costs and expenses were $2.6 million for the quarter ended March 31, 2019, a 42.2% decrease compared to $4.4 million for the quarter ended March 31, 2018.
     
  • From April 1, 2019 to April 2, 2019, the Company sold an aggregate of 28,552 shares of its common stock at a purchase price ranging from $3.70 to $3.85 per share, representing 120% of the closing price the trading day immediately prior to the date of subscription. As of the date of this quarterly report, the Company has received an aggregate gross proceeds of $107,036 under this private placement.

Michael Wang, Chairman and CEO of Professional Diversity Network, said, “While the Company continued to sustain losses, we see positive momentum on our efforts in reducing costs and overheads. The beginning of 2019 marks the fifth consecutive quarter that we successfully reduce losses.”

Mr. Wang continued, “This year we will continue enhancing our diversity recruitment and women’s networking segments and expanding our China business to increase shareholder value and move toward sustainable profitability.”

First Quarter 2019 Financial Results

Revenue

For the quarter ended March 31, 2019, IPDN reported total revenue of $1.3 million, a 41.8% decrease from $2.3 million for the quarter ended March 31, 2018. The decrease is mainly the result of management’s focus on reduction in sales and operations workforce as a means to improved efficiencies and operational effectiveness while rebranding the business.

Costs and Expenses

Total costs and expenses were $2.6 million for the quarter ended March 31, 2019, a 42.2% decrease compared to $4.4 million for the quarter ended March 31, 2018. The decrease is primarily the result of $992,000 or 42.2% decrease in general and administrative expenses, a $459,000 or 67.5% decrease in depreciation and amortization expenses, and a $312,000, or 28.5% decrease in sales and marketing expenses.

Net Loss

Net loss for the quarter ended March 31, 2019 was $1.2 million or $0.23 per share – compared to a net loss of $2.0 million, or $0.48 per share, for the quarter ended March 31, 2018.

Net Loss from Continuing Operations

Net loss from continuing operations was $1.1 million for the quarter ended March 31, 2019, a decrease of 37.3% from $1.8 million for the quarter ended March 31, 2018. The $680,000 decrease in net loss was primarily driven by $992,000 decrease in general and administrative expenses, a $459,000 decrease in depreciation and amortization expenses, and a $312,000 decrease in sales and marketing expenses, partially offset by a $756,000 decrease in revenues from membership fees, related services at the NAPW segment.

Cash and Financial Position

As of March 31, 2019, the Company had cash and cash equivalents of $0.8 million, compared to $1.4 million as of December 31, 2018. The Company had a working capital deficiency of $4.3 million as of March 31, 2019, compared to a working capital deficiency of $3.4 million as of December 31, 2018.

Net cash used in operating activities in continuing operations was $1.0 million for the quarter ended March 31, 2019, and net cash used in operating activities in continuing operations was 1.6 million for the quarter ended March 31, 2018.

Professional Diversity Network, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS

    March 31,     December 31,  
    2019     2018  
    (Unaudited)        
Current Assets:                
Cash and cash equivalents (Amounts related to variable interest
entity of $341,800 and $683,043 as of March 31, 2019 and
December 31, 2018, respectively)
  $ 793,863     $ 1,441,607  
Accounts receivable, net     446,368       816,698  
Incremental direct costs     48,154       20,797  
Prepaid expenses and other current assets     482,879       350,906  
Current assets from discontinued operations     26,539       126,270  
Total current assets     1,797,803       2,756,278  
                 
Property and equipment, net     67,273       83,608  
Capitalized technology, net     169,626       194,833  
Goodwill     339,451       339,451  
Intangible assets, net     837,774       1,020,942  
Right-of-use assets     353,486        
Merchant reserve     760,849       760,849  
Security deposits     90,574       82,139  
Total assets   $ 4,416,836     $ 5,238,100  
                 
Current Liabilities:                
Accounts payable   $ 1,676,620     $ 1,843,688  
Accrued expenses     1,063,914       989,626  
Deferred revenue     2,254,170       2,460,436  
Note Payable – related party     207,118       500,000  
Line of Credit – related party     292,882        
Lease liability, current portion     300,456        
Current liabilities from discontinued operations     303,794       346,528  
Total current liabilities     6,098,954       6,140,278  
                 
Deferred tax liability     122,824       194,786  
Deferred rent           13,742  
Other liabilities     84       82  
Lease liability, non-current portion     60,910        
Long-term liabilities from discontinued operations            
Total liabilities     6,282,772       6,348,888  
                 
Commitments and contingencies                
                 
Stockholders’ Equity                
Common stock, $0.01 par value; 45,000,000 shares authorized;
5,060,176 shares and 4,856,213 shares issued as of March 31,
2019 and December 31, 2018, respectively; and 5,059,128
shares and 4,855,165 shares outstanding as of March 31, 2019
and December 31, 2018, respectively
    50,602       48,562  
Additional paid in capital     84,108,048       83,728,903  
Accumulated other comprehensive loss     (1,305 )     (24,340 )
Accumulated deficit     (85,986,164 )     (84,826,796 )
Treasury stock, at cost; 1,048 shares at March 31, 2019 and
December 31, 2018
    (37,117 )     (37,117 )
Total stockholders’ equity     (1,865,936 )     (1,110,788 )
                 
Total liabilities and stockholders’ equity   $ 4,416,836     $ 5,238,100  

Professional Diversity Network, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)

    Three Months Ended
March 31,
 
    2019     2018  
             
Revenues:                
Membership fees and related services   $ 829,420     $ 1,612,221  
Recruitment services     474,260       621,415  
Product sales and other     2,812       3,657  
Education and training     4,069       6,471  
Consumer advertising and marketing solutions     35,716       69,734  
Total revenues     1,346,277       2,313,498  
                 
Costs and expenses:                
Cost of revenues     187,581       285,833  
Sales and marketing     780,747       1,093,124  
General and administrative     1,358,556       2,351,931  
Depreciation and amortization     221,422       679,761  
Total costs and expenses     2,548,306       4,410,649  
                 
Loss from operations     (1,202,029 )     (2,097,151 )
                 
Other (expense) income                
Interest expense     (8,133 )      
Interest and other income           890  
Other income (expense)           22,558  
Other income, net     (8,133 )     23,448  
                 
Loss before income tax expense (benefit)     (1,210,162 )     (2,073,703 )
Income tax expense (benefit)     (65,633 )     (249,050 )
Loss from continuing operations     (1,144,529 )     (1,824,653 )
Loss from discontinued operations (net of tax benefit of $1,211,
and $35,036, in the three months ended March 31, 2019 and
2018, respectively)
    (14,840 )     (209,760 )
Net loss     (1,159,369 )     (2,034,413 )
                 
Other comprehensive loss:     (1,159,369 )     (2,034,413 )
Foreign currency translation adjustment     23,035       76,708  
Comprehensive loss   $ (1,136,334 )   $ (1,957,705 )
                 
Basic and diluted loss per share:                
Continuing operations     (0.23 )     (0.43 )
Discontinued operations     (0.00 )     (0.05 )
Net loss   $ (0.23 )   $ (0.48 )
                 
Weighted average outstanding shares used in computing net loss
per common share:
               
Basic and diluted     4,969,230       4,221,620  

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 Net Loss from continuing operations to Adjusted EBITDA, the most directly comparable GAAP measure reported in our consolidated financial statements:

    Three Months Ended  
    March 31,  
    2019     2018  
             
    (in thousands)  
Loss from Continuing Operations   $ (1,145 )   $ (1,825 )
Stock-based compensation expense     8       118  
Depreciation and amortization     221       680  
Interest Expense     8        
Interest and other income           (1 )
Income tax expense (benefit)     (66 )     (249 )
Adjusted EBITDA   $ (974 )   $ (1,277 )

About Professional Diversity Network
Professional Diversity Network, Inc. (NASDAQ: IPDN) 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 International Association of Women (IAW), 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 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:
Dragon Gate Investment Partners LLC

Tel: +1(646)-801-2803
Email: [email protected]

GlobeNewswire

GlobeNewswire,is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.
GlobeNewswire