TheStreet.com Announces Q3 2003 Financial Results; Company Records Lowest Net Loss and Tenth Sequential Quarter of Increased Subscription Revenue

October 16, 2003 : Permanent Link

NEW YORK–(BUSINESS WIRE)–Oct. 16, 2003–TheStreet.com, Inc. (Nasdaq: TSCM), a leading multimedia provider of financial commentary, analysis, research and news, today announced its financial resultsfor the third quarter 2003, which includes the Company’s lowest net loss, tenth sequential quarter of increased subscription revenue and second consecutive cash flow positive quarter.

Net revenue in the third quarter 2003 totaled $6.7 million, a 25% increase over the same period in 2002 and 4% increase from the previous quarter. Net loss was ($865,000), or ($0.04) per share for the quarter, a 53% improvement over the ($1.8) million loss in the same period in 2002, and a 32% improvement from last quarter’s ($1.3) million loss.

Total cash flow in the third quarter 2003 was $325,000, an improvement from the ($659,000) burn in the third quarter 2002, and a 28% improvement from the cash flow in the second quarter 2003 of $253,000. Cash, restricted cash and short-term investments as of September 30, 2003 continues to stand at more than $28 million.

Subscription bookings for the third quarter 2003 totaled $4.9 million, a 22% increase over the third quarter 2002 and an increase of 4% from the second quarter 2003.

Deferred revenue was $6.9 million, a 26% increase over the same period last year and effectively flat from the previous quarter.

“Our strong third quarter results, which include our tenth sequential quarter of increased subscription revenue, are a direct result of the successful implementation of the growth strategy we began executing three years ago,” said Thomas J. Clarke Jr., chairman and chief executive officer of TheStreet.com. “Our revenue mix continues to evolve. With the recent introduction of commission revenue from our broker-dealer subsidiary Independent Research Group LLC, we have added another piece to the revenue portfolio, which will help us meet our long-term objective of consistent and sustainable growth.”

Revenue Streams

Subscription revenue for the third quarter 2003 totaled $4.8 million, an increase of 21% over the same period last year and an increase of 11% from the second quarter 2003. Advertising revenue was $1.2 million in the third quarter, a 16% increase over the same period last year and an expected seasonal decline of 17% from the second quarter 2003.

In May 2003, Independent Research Group was cleared to receive trading commissions from its institutional clients. This quarter commission revenue totaled $313,000, an 87% increase from the second quarter 2003.

Total expenses for the third quarter totaled $7.6 million, a 1% increase over the same period last year and a 2% improvement from the second quarter 2003. This sequential improvement in expenses was achieved despite the continuing investment in the development of Independent Research Group.

“Our record quarterly results affirm the continued improvement we have made in the fundamentals of the business,” said Lisa Mogensen, chief financial officer of TheStreet.com. “In particular, our deliberate cultivation of multiple revenue streams and our steadfast vigilance in the area of cost control has yielded results.”

THIRD QUARTER 2003 BUSINESS HIGHLIGHTS

Some of the Company’s accomplishments in the third quarter 2003 include:

— TheStreet.com and Bloomberg, the global financial news and

information company, reached an agreement to distribute

several of TheStreet.com products to Bloomberg financial

professional users worldwide, via the Bloomberg

Professional(R)Service. Two of TheStreet.com premium products

to be distributed are “Street Insight,” for investment

professionals seeking real-time macro and micro trading

information and “RealMoney,” produced for active market

participants and self-directed investors looking for unbiased,

action-oriented market analysis and investment ideas. The

alliance is in the form of a revenue sharing agreement that

will broaden TheStreet.com’s subscriber base, while providing

Bloomberg with additional depth and breadth to its content

offerings.

— Independent Research Group coverage was listed in the First

Call earnings database and included in the First Call

consensus. This distribution channel exposes Independent

Research Group to more than 55,000 institutional investors

worldwide and third-party distribution sites including

Bloomberg, Factset, Bridge and Compustat. For every stock

Independent Research Group covers, First Call subscribers will

have access to an Independent Research Group analyst’s call,

price target, earnings estimates and growth-rates estimates,

maximizing visibility within the financial community.

— “Jim Cramer’s RealMoney” financial radio program, which

TheStreet.com co-produces and syndicates through the WOR Radio

Network, continues to expand. The program is now heard in six

of the top ten and nine of the top 20 Arbitron Metro rated

markets nationwide.

— Independent Research Group has completed individual U.S. state

blue sky registrations and is now licensed by 49 states and

the District of Columbia as a registered broker-dealer.

— Independent Research Group began distributing an online

version of “TheStreet(TM)View,” a long/short equity research

product created to provide the hedge fund community with

unbiased and independent trading and investment ideas. The

enhanced online version allows subscribers to search for

companies by ticker, contributor and publication date range,

easing the information gathering process.

— TheStreet.com was named to the Deloitte & Touche 2003 “New

York Technology Fast 50″ list, the firm’s annual ranking of

the 50 fastest growing companies in the New York City area.

— TheStreet.com was added to the Russell 2000 and Russell 3000

Indexes following the Frank Russell Company’s annual

reconstitution. Index membership began on July 1 and is

effective for one year.

TheStreet.com will conduct a conference call today, October 16, 2003 at 11:00 a.m. EDT to discuss these results. The Company welcomes all interested parties to listen to the Web cast of its call at http://www.thestreet.com/earnings.

About TheStreet.com, Inc.

TheStreet.com, Inc. (Nasdaq: TSCM) is a leading provider of independent and insightful investment commentary, advice, research and news. The Company is a registered investment advisor. Founded in 1996, TheStreet.com completed its initial public offering in May 1999. On the Internet, its premium, subscription-based website, “RealMoney.com” is accompanied by the professionally oriented subscription sites, “Street Insight,” “RealMoney Pro Advisor,” and the free, flagship site, “TheStreet.com.” The Company also produces a suite of subscription services for use by professionals and self-directed investors, each designed to help a specific segment of the investing public make better-informed investing and trading decisions. TheStreet.com’s wholly-owned subsidiary, Independent Research Group LLC (IRG), develops independent research and services focused exclusively on meeting the performance needs of hedge funds and money managers. IRG’s proprietary equity research provides in-depth, action-oriented investment ideas from its in-house, top-tier industry analysts, without the conflicts created by investment banking, underwriting and proprietary trading.

Statements contained in this news release not related to historical facts may be deemed forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties (described in the Company’s SEC filings), which could cause actual results to differ.

<pre> THESTREET.COM, INC. BALANCE SHEETS ($ in thousands) September December 30, 31, 2003 2002 ——— ——– ASSETS Current Assets: Cash, restricted cash and short-term investments $26,249 $26,749 Accounts receivable – net 1,292 1,677 Other receivables 415 197 Prepaid expenses and other current assets 1,215 1,020 ——- ——- Total current assets 29,171 29,643 Property and equipment – net 2,727 3,643 Other assets 407 698 Goodwill and intangibles – net 2,649 3,144 Restricted cash 2,300 2,300 ——- ——- Total assets $37,254 $39,428 ======= ======= LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable and accrued expenses $ 4,169 $ 4,393 Deferred revenue 6,904 5,513 Note payable 88 84 Other current liabilities 69 18 ——- ——- Total current liabilities 11,230 10,008 Note payable 244 311 Other liabilities 56 - ——- ——- Total liabilities 11,530 10,319 ——- ——- Stockholders’ Equity: Stockholders’ equity 25,724 29,109 ——- ——- Total liabilities and stockholders’ equity $37,254 $39,428 ======= ======= Note: The Company has pledged certain cash amounts as security deposits for operating leases. Accordingly, a portion of this cash is classified as a noncurrent asset, and our cash is classified in two places on the above balance sheet. Cash, restricted cash, and short-term investments $26,249 $26,749 Restricted cash 2,300 2,300 ——- ——- Total cash, current and noncurrent restricted cash and short-term investments $28,549 $29,049 ======= ======= </pre>

<pre> THESTREET.COM, INC. STATEMENTS OF OPERATIONS ($ in thousands, except per share data) For the Three For the Nine Months Ended Months Ended September 30 September 30 —————— —————— 2003 2002 2003 2002 ——- ——- ——- ——- Net revenue: Subscription $ 4,827 $ 3,984 $13,449 $10,637 Advertising 1,222 1,058 3,899 3,004 Commission 313 – 480 - Other 304 292 888 1,253 ——- ——- ——- ——- Total net revenue 6,666 5,334 18,716 14,894 Operating expense: Cost of services 3,483 2,757 10,476 9,125 Sales and marketing 1,856 1,720 5,209 4,651 General and administrative 1,763 1,831 5,379 5,680 Depreciation and amortization 465 955 1,838 3,150 Noncash compensation 33 237 304 716 Restructuring – – – 19 ——- ——- ——- ——- Total expense 7,600 7,500 23,206 23,341 ——- ——- ——- ——- Interest and investment income, net 69 313 296 717 ——- ——- ——- ——- Net loss from continuing operations (865) (1,853) (4,194) (7,730) Gain on disposal of discontinued operations – 3 – 201 ——- ——- ——- ——- Net loss $ (865) $(1,850) $(4,194) $(7,529) ======= ======= ======= ======= Net (loss) income per share - basic and diluted: Continuing operations $ (0.04) $ (0.08) $ (0.18) $ (0.33) Discontinued operations – – – 0.01 ——- ——- ——- ——- Net loss $ (0.04) $ (0.08) $ (0.18) $ (0.32) ======= ======= ======= ======= Weighted average basic and diluted shares outstanding 23,947 23,553 23,818 23,554 ======= ======= ======= ======= </pre>

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