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 September 30,
2021.
“Our PDN Network continues to show stability
with its third consecutive strong quarter of fiscal 2021. We
believe that there is still room for additional corporate and
political awareness in terms of greater investment in diversity
recruitment and inclusion initiatives, and in turn society as a
whole, which continue to benefit the Company. We remain committed
to strengthening the financial position of the Company through
investing in our operating segments to drive organic growth,
synergetic acquisitions, as evident by acquisition of RemoteMore
USA, and timely equity transactions, as evident by the multiple
common stock transactions the Company entered into in the quarter.”
said Adam He, CEO of Professional Diversity Network, Inc.
Third Quarter Financial Highlights:
- Total consolidated revenues for the
3 months ended September 30, 2021, increased approximately $0.4
million or 29 percent as compared to the same period in the prior
year. PDN Network segment revenues increased $0.4 million or 45
percent compared to revenues during the same period in the prior
year. The increase in PDN Network segment revenues was attributable
to continued new client acquisitions and continued growth in our
recruitment business as political and corporate diversity and
inclusion efforts remain a focus in today’s society. Revenues for
the three months ended September 30, 2021 from Other revenues,
which include the NAPW segment and to a lesser extent RemoteMore
USA, decreased less than approximately $0.1 million as compared to
the same period in the prior year. The decrease in revenues was
primarily due to a decrease in legacy membership retention rates
and the continued effects of COVID-19 as new members are increasing
as the economy allows for increased discretionary spending.
Revenues for RemoteMore USA during the period were immaterial and
there were no revenues in the comparable period.
- Basic and
diluted net loss per share improved by $0.06, from a net loss per
share of $0.07 during the three months ended September 30, 2020, as
compared to a net loss per share of $0.01 during the three months
ended September 30, 2021.
- As of September 30, 2021, cash
balances were $4.1 million. The Company raised gross proceeds of
approximately $3.5 million from the issuance of common stock during
the three months ended September 30, 2021. The Company raised gross
proceeds of approximately $1.8 million from the issuance of common
stock during the three months ended September 30, 2020.
- The largest
shareholder of the Company, CFL, entered into two stock transfer
agreements with the Company and an existing shareholder to purchase
1,700,504 shares of its common stock. On September 22, 2021 and
October 30, 2021. CFL beneficially holds shares of the Company’s
outstanding Common Stock equal to approximately 32% upon closing of
both transactions.
Financial Results for the Three Months Ended September
30, 2021
Revenues
Total revenues for the three months ended
September 30, 2021 increased approximately $378,000, or 29 percent
to approximately $1,683,000 from approximately $1,305,000 during
the same period in the prior year. The increase was predominately
attributable to an approximate $438,000 increase in recruitment
services revenues in the current period, partially offset by an
approximate $79,000 decrease in legacy membership fees and related
services revenues, as compared to the same period in the prior
year.
During the three months ended September 30,
2021, our PDN Network generated approximately $1,368,000 in
revenues compared to approximately $930,000 in revenues during the
three months ended September 30, 2020, an increase of approximately
$438,000 or 47 percent. The increase in PDN Network segment
revenues was attributable to continued new client acquisitions and
continued growth in our recruitment business as political and
corporate diversity and inclusion efforts remain a focus in today’s
society.
During the three months ended September 30,
2021, Other revenues were approximately $258,000, compared to
revenues of approximately $319,000 during the same period in the
prior year, a decrease of approximately $61,000 or 19 percent. The
decrease in revenues was primarily due to a decrease in legacy
membership retention rates and the continued effects of COVID-19 as
new members are increasing as the economy allows for increased
discretionary spending. Revenues for RemoteMore USA during the
period were immaterial and there were no revenues in the comparable
period.
Costs and Expenses
Cost of revenues during the three months ended September 30,
2021 was approximately $347,000, an increase of approximately
$141,000 or 68 percent from approximately$206,000 during the same
period of the prior year, as a result of increased revenues.
General and administrative expenses decreased by
approximately $689,000, or 44 percent, to approximately $873,000
during the three months ended September 30, 2021, as compared to
the same period in the prior year. The decrease, as compared to the
same period in the prior year, was primarily a result of reductions
in professional services charges of approximately $645,000 payroll
related costs of approximately $62,000, and bad debt charges of
approximately $34,000, partially offset by expenses related to
RemoteMore of approximately $53,000, for which there was no charges
in the comparable period.
Net Loss from Continuing
Operations
As the result of the factors discussed above, during the three
months ended September 30, 2021, we incurred a net loss of
approximately $88,000 from continuing operations, an improvement of
approximately $824,000 or 90 percent, compared to a net loss of
approximately $912,000 during the three months ended September 30,
2020.
Financial Results for the Nine Months Ended September
30, 2021
Revenues
Total revenues for the nine months ended
September 30, 2021 increased approximately $1,389,000, or 43
percent to approximately $4,628,000 from approximately $3,239,000
during the same period in the prior year. The increase was
predominately attributable to an approximate $1,626,000 increase in
recruitment services revenues in the current period, partially
offset by an approximate $295,000 decrease in membership fees and
related services revenues, as compared to the same period in the
prior year.
During the nine months ended September, 2021,
our PDN Network generated approximately $3,845,000 in revenues
compared to approximately $2,180,000 in revenues during the nine
months ended September 30, 2020, an increase of approximately
$1,665,000 or 76.4 percent. The increase in revenues was
predominately driven by continued improvements in our e-commerce
platform and new sales collaborations, higher new client
acquisitions and a significant increase in diversity recruitment
initiatives by our clients
During the nine months ended September 30, 2021,
Other revenues were approximately $783,000, compared to revenues of
approximately $1,059,000 during the same period in the prior year,
a decrease of approximately $276,000 or 26.1 percent. The decrease
in revenues was primarily due a continued decrease in legacy
membership retention rates and the continued effects of COVID- for
the NAPW network of approximately $295,000. Revenues for RemoteMore
USA during the period were immaterial and there were no revenues in
the comparable period. We believe that the membership services that
we provide to our customers turned into a discretionary spending
decision for our patrons during 2020 and continued throughout the
first nine months of 2021. Many of the services that we provide,
including all in-person events, were postponed as a result of the
COVID-19 pandemic. Revenues for RemoteMore USA during the period
were immaterial.
Costs and Expenses
Cost of revenues during the nine months ended September 30, 2021
was approximately $868,000, an increase of approximately $319,000,
or 58 percent, from approximately$549,000 during the same period in
the prior year, as a direct result of increased revenues of
approximately $1,389,000, or 43 percent.
General and administrative expenses decreased by
approximately $1,994,000, or 38 percent, to approximately
$3,303,000 during the nine months ended September 30, 2021, as
compared to the same period in the prior year. The decrease was
primarily a result of a reduction in professional services charges
of approximately $1,459,000, litigation settlement reserve of
$450,000 recorded in the first quarter of 2020, partially offset by
an increase in litigation settlement reserve of $75,000 in the
second quarter of 2021, bad debt charges of approximately $82,000,
stock-based compensation costs of approximately $73,000, bad debt
charges of approximately $82,000, and payroll related costs of
approximately $79,000, as compared to the same period in the prior
year. Offsetting the decrease were expenses related to RemoteMore
of approximately $53,000, for which there was no charges in the
comparable period.
Net Loss from Continuing
Operations
As the result of the factors discussed above, during the nine
months ended September 30, 2021, we incurred a net loss of
approximately $1,434,000 from continuing operations, an increase of
approximately $2,682,000 or 65 percent, compared to a net loss of
approximately $4,116,000 during the same period in the prior
year.
Summary of the Quarter’s Financial
InformationAmounts in following tables are in thousands
except for per share amounts and outstanding shares.Summary of
Financial Position
|
September 30, 2021 |
|
December 31, 2020 |
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
4,093 |
|
$ |
2,118 |
Other current assets |
|
1,667 |
|
|
1,403 |
Total current assets |
$ |
5,760 |
|
$ |
3,521 |
Long-term assets |
|
4,040 |
|
|
5,152 |
Total Assets |
$ |
9,800 |
|
$ |
8,673 |
|
|
|
|
Total current liabilities |
$ |
4,740 |
|
$ |
4,677 |
Total long-term
liabilities |
|
709 |
|
|
650 |
Total liabilities |
$ |
5,449 |
|
$ |
5,327 |
|
|
|
|
Total Professional Diversity
Network, Inc. stockholders’ equity |
|
3,859 |
|
|
3,346 |
Total stockholders’ equity –
noncontrolling interests |
|
492 |
|
|
- |
Total liabilities and
stockholders’ equity |
$ |
9,800 |
|
$ |
8,673 |
Summary of Financial Operations
|
Nine Months Ended September
30, |
|
Change |
|
Change |
|
|
2021 |
|
2020 |
|
(Dollars) |
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
$ |
761 |
|
$ |
1,056 |
|
$ |
(295 |
) |
(27.9 |
)% |
Recruitment services |
|
3,695 |
|
|
2,069 |
|
|
1,626 |
|
78.6 |
% |
Products sales and other |
|
23 |
|
|
4 |
|
|
19 |
|
475.0 |
% |
Consumer advertising and marketing solutions |
|
149 |
|
|
110 |
|
|
39 |
|
35.5 |
% |
Total revenues |
$ |
4,628 |
|
$ |
3,239 |
|
$ |
1,389 |
|
42.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
$ |
868 |
|
$ |
549 |
|
$ |
319 |
|
58.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
1,826 |
|
|
1,404 |
|
|
422 |
|
30.1 |
% |
General and administrative |
|
3,303 |
|
|
5,297 |
|
|
(1,994 |
) |
(37.6 |
)% |
Depreciation and
amortization |
|
88 |
|
|
138 |
|
|
(50 |
) |
(36.2 |
)% |
Total pre-tax cost and
expenses: |
$ |
6,085 |
|
$ |
7,388 |
|
$ |
(1,303 |
) |
(17.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations,
net of tax |
$ |
(1,434 |
) |
$ |
(4,116 |
) |
$ |
2,682 |
|
65.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.11 |
) |
$ |
(0.38 |
) |
|
|
|
|
|
Weighted average shares
outstanding: |
|
13,830,777 |
|
|
10,756,911 |
|
|
|
|
|
|
Basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
Change |
|
Change |
|
|
2021 |
|
2020 |
|
(Dollars) |
|
(Percent) |
|
Revenues: |
$ |
240 |
|
$ |
319 |
|
$ |
(79 |
) |
(24.8 |
)% |
Membership fees and related services |
|
|
|
|
|
|
|
|
|
|
|
Recruitment services |
|
1,368 |
|
|
930 |
|
|
438 |
|
47.1 |
% |
Products sales and other |
|
20 |
|
|
- |
|
|
20 |
|
100.0 |
% |
Consumer advertising and marketing solutions |
|
55 |
|
|
56 |
|
|
(1 |
) |
(1.8 |
)% |
Total revenues |
$ |
1,683 |
|
$ |
1,305 |
|
$ |
378 |
|
29.0 |
% |
|
|
|
|
|
Cost and expenses: |
|
|
|
|
Cost of revenues |
$ |
347 |
|
$ |
206 |
|
$ |
141 |
|
68.4 |
% |
Sales and marketing |
|
526 |
|
|
420 |
|
|
106 |
|
25.2 |
% |
General and administrative |
|
873 |
|
|
1,562 |
|
|
(689 |
) |
(44.1 |
)% |
Depreciation and amortization |
|
29 |
|
|
38 |
|
|
(9 |
) |
(23.7 |
)% |
Total pre-tax cost and expenses: |
$ |
1,775 |
|
$ |
2,226 |
|
$ |
(451 |
) |
(20.3 |
)% |
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations, net of tax |
$ |
(88 |
) |
$ |
(912 |
) |
$ |
824 |
|
(90.3 |
)% |
|
|
|
|
|
Basic and diluted loss per share: |
|
|
|
|
Continuing operations |
$ |
(0.01 |
) |
$ |
(0.07 |
) |
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic and diluted |
|
15,115,167 |
|
|
12,488,268 |
|
|
|
Summary of Cash Flows from Continued Operations
|
Nine Months Ended
September 30, |
|
2021 |
|
2020 |
|
Cash (used in)
provided by continued operations |
|
|
|
|
|
|
Operating activities |
$ |
(1,160 |
) |
$ |
(2,768 |
) |
Investing activities |
|
(1,279 |
) |
|
(78 |
) |
Financing activities |
|
4,445 |
|
|
4,928 |
|
Net increase in cash and cash equivalents from continued
operations |
$ |
2,006 |
|
$ |
2,082 |
|
Professional Diversity Network, Inc. and Subsidiaries
Non-GAAP (Adjusted) Financial Measures
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 for the three and nine
months ended September 30, 2021 and 2020, the most directly
comparable GAAP measure reported in our consolidated financial
statements:
|
Three Months Ended September 30,
|
|
|
2021 |
|
|
2020 |
|
|
(in thousands) |
Loss from Continuing Operations |
$ |
(88 |
) |
|
$ |
(912 |
) |
Stock-based compensation |
|
127 |
|
|
|
111 |
|
Litigation settlement reserve |
|
- |
|
|
|
766 |
|
Loss attributable to noncontrolling interest |
|
19 |
|
|
|
- |
|
Depreciation and amortization |
|
30 |
|
|
|
38 |
|
Interest and other income |
|
(2 |
) |
|
|
5 |
|
Income tax expense (benefit) |
|
(2 |
) |
|
|
(14 |
) |
Adjusted
EBITDA |
$ |
82 |
|
|
$ |
(6 |
) |
|
Nine Months Ended September 30, |
|
|
2021 |
|
|
2020 |
|
|
(in thousa |
nds) |
Loss from Continuing Operations |
$ |
(1,434 |
) |
|
$ |
(4,116 |
) |
Stock-based compensation |
|
436 |
|
|
|
509 |
|
Litigation settlement reserve |
|
75 |
|
|
|
1,475 |
|
Loss attributable to noncontrolling interest |
|
19 |
|
|
|
- |
|
Depreciation and amortization |
|
88 |
|
|
|
138 |
|
Interest and other income |
|
(5 |
) |
|
|
(1 |
) |
Income tax benefit |
|
(19 |
) |
|
|
(32 |
) |
Adjusted
EBITDA |
$ |
(840 |
) |
|
$ |
(2,027 |
) |
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 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, LGBTQ 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.”
Investor Inquiries: investors@ipdnusa.com+1 (312)
614-0950Source: Professional Diversity Network, Inc. Released
November 15, 2021
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