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 June 30,
2022.
“While the challenges in current global economic
conditions continue, we believe that there is still opportunity for
all of our business lines to grow. We recently hired additional
sales and customer service personnel for the PDN network, as well
as bringing on Ms. Grace Reyes, former Board member of PDN, to
consult with, and strengthen, the NAPW business line dedicated to
women. Our RemoteMore business line continues to exceed budgeted
revenue expectations,” said Adam He, CEO of Professional Diversity
Network. “Even through this economic downturn, we still maintain
focused on building up core operations, capitalizing on strategic
opportunities, and maximizing shareholder value through our share
buyback plan.”
Second Quarter Financial
Highlights:
- Total consolidated revenues for the three months ended June 30,
2022 increased $0.7 million, or 50 percent, as compared to the same
period in the prior year. PDN Network segment revenues increased
$0.2 million or 16 percent compared to revenues during the same
period in the prior year. Revenues for the three months ended June
30, 2022 from the NAPW segment decreased approximately $0.1 million
as compared to the same period in the prior year. The RemoteMore
segment recorded $0.6 million in revenues in the period for which
there was no comparable activity in the same period of the prior
year.
- Basic and diluted net loss per share remained consistent at
$0.04 during the three months ended June 30, 2022 and 2021.
- On June 30, 2022, cash balances were approximately $2.4 million
as compared to $3.4 million on December 31, 2021. Working capital
surplus from continuing operations on June 30, 2022, was
approximately $0.6 million as compared to $0.4 million on December
31, 2021.
- On June 7, 2022, we settled a lawsuit for a cash payment of
$70,000 to be made to the plaintiff, resulting in the reduction of
our reserve and a one-time, non-cash gain for $908,564 reflected in
our consolidated financial statements.
Financial Results for the Three Months
Ended June 30, 2022
Revenues
Total revenues for the three months ended June
30, 2022 increased approximately $734,000, or 50.2%, to
approximately $2,195,000 from approximately $1,461,000 during the
same period in the prior year. The increase was predominately
attributable to an approximate $648,000 of contracted software
development related to RemoteMore for which there was no comparable
activity in the same period of the prior year. Also contributing to
the increase in the period was an increase in recruitment services
revenues of approximately $189,000, partially offset by an
approximate $99,000 decrease in membership fees and related
services revenues, as compared to the same period in the prior
year.
During the three months ended June 30, 2022, our
PDN Network generated approximately $1,386,000 in revenues compared
to approximately $1,201,000 in revenues during the three months
ended June 30, 2021, an increase of approximately $185,000 or 15.4
percent. The increase in revenues was primarily driven by event
revenues of approximately $111,000, job placement commissions of
approximately $86,000, slightly offset by a decline in other
diversity recruitment initiatives by our clients.
During the three months ended June 30, 2022,
NAPW Network revenues were approximately $161,000, compared to
revenues of approximately $260,000 during the same period in the
prior year, a decrease of approximately $99,000 or 38.1 percent.
The decrease in revenues was primarily due to an approximate
$75,000 decrease in legacy membership retention rates as compared
to the same period in the prior year, and the continued effects of
COVID-19 causing new membership enrollment to decline throughout
2021 and the second quarter of 2022. We believe that the membership
services that we provide to our customers represents a
discretionary spending item and the services that we provide are
being postponed by the consumer as a result of the financial and
economic impact of COVID-19 and the current economy.
During the three months ended June 30, 2022,
RemoteMore revenue was approximately $648,000, for which there was
no comparable revenue in the same period of the prior year.
Costs and Expenses
Cost of revenues during the three months ended
June 30, 2022 was approximately $932,000, an increase of
approximately $672,000 or 259 percent from approximately $260,000
during the same period of the prior year, as a result of increased
revenues. The increase was predominately attributed to
approximately $543,000 of contracted software development costs
related to RemoteMore, for which there was no comparable activity
in the same period of the prior year.
General and administrative expenses decreased by
approximately $753,000, or 68 percent, to approximately $359,000
during the three months ended June 30, 2022, as compared to the
same period in the prior year. The decrease, as compared to the
same period in the prior year, was predominately due to settlement
of litigation resulting in a one-time, non-cash gain of
approximately $909,000, a reduction in other legal expenses and
litigation charges of $174,000 and comparable payroll related costs
of approximately $53,000, offset by an increase of $23,000 related
to discretionary incentive payments made as compared to the same
period in the prior year Offsetting the decrease were increases in
expenses related to RemoteMore of approximately $175,000, for which
there were no comparable charges in the same period in the prior
year, share based compensation of $78,000, purchased services of
$52,000. There was a decrease in the three months ended June 30,
2021 related to mergers and acquisition expenses of $60,000 for
which there was no comparable expense in the current period.
Net Loss from Continuing
Operations
As the result of the factors discussed above,
during the three months ended June 30, 2022, we incurred a net loss
of approximately $52,000 from continuing operations, an increase of
approximately $538,000 or 91 percent, compared to a net loss of
approximately $590,000 during the three months ended June 30,
2021.
Financial Results for the Six Months
Ended June 30, 2022
Revenues
Total revenues for the six months ended June 30,
2022 increased approximately $1,303,000, or 44%, to approximately
$4,248,000 from approximately $2,945,000 during the same period in
the prior year. The increase was predominately attributable to an
approximate $1,125,000 of contracted software development related
to RemoteMore for which there was no comparable activity in the
same period of the prior year.
During the six months ended June 30, 2022, our
PDN Network generated approximately $2,766,000 in revenues compared
to approximately $2,421,000 in revenues during the six months ended
June 30, 2021, an increase of approximately $345,000 or 14 percent.
The increase in revenues was primarily driven by job placement
commissions of approximately $161,000, event revenues of $120,000,
and continued diversity recruitment initiatives by our clients of
$65,000.
During the six months ended June 30, 2022, NAPW
Network revenues were approximately $357,000, compared to revenues
of approximately $524,000 during the same period in the prior year,
a decrease of approximately $167,000 or 32 percent. The decrease in
revenues was primarily due to a continued decrease in legacy
membership retention rates and the continued effects of COVID-19 as
new membership enrollment slowly returns. We believe that the
membership services that we provide to our customers represents a
discretionary spending item and the services that we provide are
being postponed by the consumer as a result of the financial and
economic impact of COVID-19 and the current economy.
During the six months ended June 30, 2022,
RemoteMore revenue was approximately $1,125,000, for which there
was no comparable revenue in the same period of the prior year.
Costs and Expenses
Cost of revenues during the six months ended
June 30, 2022 was approximately $1,794,000, an increase of
approximately $1,273,000, or 244 percent, from approximately
$521,000 during the same period of the prior year. The increase was
predominately attributed to approximately $1,010,000 of contracted
software development costs related to RemoteMore, for which there
was no comparable activity in the same period of the prior year.
Also contributing to the increase was approximately $263,000 of
costs as a direct result of increased revenues.
General and administrative expenses decreased by
approximately $964,000, or 39.7 percent, to approximately
$1,466,000 during the six months ended June 30, 2022, as compared
to the same period in the prior year. The decrease was
predominately due to settlement of litigation resulting in a
one-time, non-cash gain of approximately $909,000, a result of
reductions of comparable payroll related costs of approximately
$250,000, of which approximately $52,000 related to discretionary
incentive payments made in the prior year as compared to the
current period. Also contributing to the decrease were reductions
in other legal expenses and litigation charges of $152,000, and
various other general and administrative expenses of $105,000.
Offsetting the reduction in expenses were increases in charges
related to RemoteMore of approximately $308,000, for which there
were no comparable charges in the same period in the prior year,
other purchased services of approximately $120,000, share-based
compensation of $96,000 and accounting expenses of $72,000.
Net Loss from Continuing
Operations
During the six months ended June 30, 2022, we
incurred a net loss of approximately $943,000 from continuing
operations, a favorable reduction of approximately $402,000 or 30
percent, compared to a net loss of approximately $1,345,000 during
the same period in the prior year.
Summary of the Quarter’s Financial
Information
Amounts in following tables are in thousands
except for per share amounts and outstanding shares.
Summary of Financial Position
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,439 |
|
|
$ |
3,403 |
|
Other current assets |
|
|
1,785 |
|
|
|
2,194 |
|
Total current assets |
|
$ |
4,224 |
|
|
$ |
5,597 |
|
Long-term assets |
|
|
2,661 |
|
|
|
3,388 |
|
Total Assets |
|
$ |
6,885 |
|
|
$ |
8,985 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
3,671 |
|
|
$ |
5,180 |
|
Total long-term
liabilities |
|
|
669 |
|
|
|
697 |
|
Total liabilities |
|
$ |
4,340 |
|
|
$ |
5,877 |
|
|
|
|
|
|
|
|
|
|
Total stockholders’
equity |
|
|
2,587 |
|
|
|
2,791 |
|
Total stockholders’ equity –
noncontrolling interests |
|
|
(42 |
) |
|
|
317 |
|
Total liabilities and
stockholders’ equity |
|
$ |
6,885 |
|
|
$ |
8,985 |
|
Summary of Financial Operations
|
|
Six Months Ended June 30, |
|
|
Change |
|
|
Change |
|
|
|
2022 |
|
|
2021 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
357 |
|
|
$ |
524 |
|
|
$ |
(167 |
) |
|
|
(31.9 |
)% |
Recruitment services |
|
|
2,674 |
|
|
|
2,327 |
|
|
|
347 |
|
|
|
14.9 |
% |
Contracted software development |
|
|
1,125 |
|
|
|
- |
|
|
|
1,125 |
|
|
|
100.0 |
% |
Consumer advertising and marketing solutions |
|
|
92 |
|
|
|
94 |
|
|
|
(2 |
) |
|
|
(2.1 |
)% |
Total revenues |
|
$ |
4,248 |
|
|
$ |
2,945 |
|
|
$ |
1,303 |
|
|
|
44.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
1,794 |
|
|
$ |
521 |
|
|
$ |
1,273 |
|
|
|
244.3 |
% |
Sales and marketing |
|
|
1,419 |
|
|
|
1,300 |
|
|
|
119 |
|
|
|
9.2 |
% |
General and
administrative |
|
|
1,466 |
|
|
|
2,430 |
|
|
|
(964 |
) |
|
|
(39.7 |
)% |
Depreciation and
amortization |
|
|
513 |
|
|
|
59 |
|
|
|
454 |
|
|
|
769.5 |
% |
Total pre-tax cost and
expenses: |
|
$ |
5,192 |
|
|
$ |
4,310 |
|
|
$ |
882 |
|
|
|
20.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations, net of tax |
|
$ |
(943 |
) |
|
$ |
(1,345 |
) |
|
$ |
402 |
|
|
|
29.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.06 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding
shares used in computing net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
16,207,113 |
|
|
|
13,368,449 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Change |
|
|
Change |
|
|
|
2022 |
|
|
2021 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
161 |
|
|
$ |
260 |
|
|
$ |
(99 |
) |
|
|
(38.1 |
)% |
Recruitment services |
|
|
1,341 |
|
|
|
1,152 |
|
|
|
189 |
|
|
|
16.4 |
% |
Products sales and other |
|
|
648 |
|
|
|
- |
|
|
|
648 |
|
|
|
100.0 |
% |
Consumer advertising and marketing solutions |
|
|
45 |
|
|
|
49 |
|
|
|
(4 |
) |
|
|
(8.2 |
)% |
Total revenues |
|
$ |
2,195 |
|
|
$ |
1,461 |
|
|
$ |
734 |
|
|
|
50.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
932 |
|
|
$ |
260 |
|
|
$ |
672 |
|
|
|
258.5 |
% |
Sales and marketing |
|
|
700 |
|
|
|
600 |
|
|
|
100 |
|
|
|
16.7 |
% |
General and
administrative |
|
|
359 |
|
|
|
1,112 |
|
|
|
(753 |
) |
|
|
(67.7 |
)% |
Depreciation and
amortization |
|
|
232 |
|
|
|
29 |
|
|
|
203 |
|
|
|
700.0 |
% |
Total pre-tax cost and
expenses: |
|
$ |
2,223 |
|
|
$ |
2,001 |
|
|
$ |
222 |
|
|
|
11.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations, net of tax |
|
$ |
(52 |
) |
|
$ |
(590 |
) |
|
$ |
538 |
|
|
|
91.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.04 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding
shares used in computing net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
16,405,586 |
|
|
|
13,472,385 |
|
|
|
|
|
|
|
|
|
Summary of Cash Flows from Continuing Operations
|
|
Six Months Ended June 30, |
|
Cash
(used in) provided by continuing operations |
|
2022 |
|
|
2021 |
|
Operating activities |
|
$ |
(570 |
) |
|
$ |
(663 |
) |
Investing activities |
|
|
(7 |
) |
|
|
(80 |
) |
Financing activities |
|
|
(387 |
) |
|
|
1,167 |
|
Net increase in cash and cash
equivalents from continuing operations |
|
$ |
(964 |
) |
|
$ |
424 |
|
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 non-GAAP financial information in
the tables that follow are reconciled to comparable information
presented using GAAP, derived by adjusting amounts determined in
accordance with GAAP for certain items presented in the
accompanying selected operating statement data.
The adjustments for the three and six months
ended June 30, 2021 relate to stock-based compensation, litigation
settlement reserves, depreciation and amortization, interest and
other income and income tax expense (benefit).
The adjustments for the three and six months
ended June 30, 2022 relate to stock-based compensation, litigation
settlement reserves, loss attributable to noncontrolling interest,
depreciation and amortization, interest and other income and income
tax expense (benefit).
|
|
Three Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands) |
|
Loss from Continuing Operations |
|
$ |
(53 |
) |
|
$ |
(590 |
) |
Stock-based compensation |
|
|
281 |
|
|
|
203 |
|
Litigation settlement reserve |
|
|
(925 |
) |
|
|
75 |
|
Loss attributable to noncontrolling interest |
|
|
155 |
|
|
|
- |
|
Depreciation and amortization |
|
|
232 |
|
|
|
29 |
|
Interest and other income |
|
|
(1 |
) |
|
|
(2 |
) |
Income tax expense (benefit) |
|
|
16 |
|
|
|
50 |
|
Adjusted
EBITDA |
|
$ |
(295 |
) |
|
$ |
(235 |
) |
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands) |
|
Loss from Continuing Operations |
|
$ |
(943 |
) |
|
$ |
(1,345 |
) |
Stock-based compensation |
|
|
405 |
|
|
|
309 |
|
Litigation settlement reserve |
|
|
(909 |
) |
|
|
75 |
|
Loss attributable to noncontrolling interest |
|
|
359 |
|
|
|
- |
|
Depreciation and amortization |
|
|
513 |
|
|
|
59 |
|
Interest and other income |
|
|
(4 |
) |
|
|
(3 |
) |
Income tax benefit |
|
|
(10 |
) |
|
|
(17 |
) |
Adjusted
EBITDA |
|
$ |
(589 |
) |
|
$ |
(922 |
) |
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 National Association of
Professional Women (NAPW) and its brand, 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) 614-0950
Source: Professional Diversity Network, Inc.
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