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,
2022.
“We believe that the services that we provide to
our customers, in all our business lines, continue to represent
discretionary spending items and through the second and third
quarters of fiscal 2022, these services have been scrutinized by
the consumer as a result of the financial and economic impact of
the current economy, as well as lingering effects of COVID-19. The
entire industry has been affected in some way. However, the need
for diversification in the workforce will continue, it’s just a
matter of waiting out these economic situations.” said Adam He, CEO
of Professional Diversity Network. “We look forward to a
historically stronger fourth quarter and we are prepared to meet
the market demand as our clients begin budgeting processes for
their fiscal 2023 needs. We still maintain focused on building up
core operations, capitalizing on strategic opportunities, and
maximizing shareholder value.”
Third Quarter Financial
Highlights:
- Total consolidated revenues for the three months ended
September 30, 2022 increased $0.4 million, or 25 percent, as
compared to the same period in the prior year. The RemoteMore
segment recorded $0.8 million in revenues in the period compared to
$19,000 in the same period of the prior year. PDN Network segment
revenues decreased $0.2 million, or 15 percent compared to revenues
during the same period in the prior year. This was predominantly
due to there being 2 fewer local and 1 fewer national events as
compared to the same period in the prior year. The NAPW segment
decreased approximately $0.1 million as compared to the same period
in the prior year.
- Basic and diluted net loss per share was $0.07 during the three
months ended September 30, 2022, as compared to $0.01 for the same
period in 2021.
- On September 30, 2022, cash balances were approximately $1.5
million as compared to $3.4 million on December 31, 2021. Working
capital (deficit) surplus from continuing operations on September
30, 2022, was approximately $(0.4) million as compared to $0.4
million on December 31, 2021.
- On September 27, 2022, the Company entered into a Stock
Purchase Agreement with Koala Malta Limited (“Seller”). Under this
agreement, the Company purchased 65,700 issued ordinary shares of
Koala Crypto Limited (“KCL”) from Seller, representing 9 percent of
the total issued share capital of KCL, and in exchange, the Company
issued 1,726,784 shares of its common stock, valued at $1,350,000
in the aggregate, to Seller in a private placement.
Financial Results for the Three Months
Ended September 30, 2022
Revenues
Total revenues for the three months ended
September 30, 2022 increased approximately $432,000, or 25.7%, to
approximately $2,115,000 from approximately $1,683,000 during the
same period in the prior year. The increase was predominately
attributable to approximately $738,000 of contracted software
development related to RemoteMore, as compared to the same period
in the prior year.
During the three months ended September 30,
2022, our PDN Network generated approximately $1,206,000 in
revenues compared to approximately $1,424,000 in revenues during
the three months ended September 30, 2021, a decrease of
approximately $218,000 or 15.3 percent. The decrease in revenues
was primarily driven by the aforementioned lesser number of events
held in the quarter, as compared to the same period in the prior
year, resulting in a decrease of event revenues of $117,000.
During the three months ended September 30,
2022, NAPW Network revenues were approximately $152,000, compared
to revenues of approximately $240,000 during the same period in the
prior year, a decrease of approximately $88,000 or 36.7
percent.
During the three months ended September 30,
2022, RemoteMore revenue was approximately $757,000, compared to
revenues of approximately $19,000 during the same period in the
prior year, an increase of approximately $738,000. This is due to
the current period having a full three months of operations versus
the same period in 2021 which only had 10 days of operations from
the acquisition date of September 20, 2021.
Costs and Expenses
Cost of revenues during the three months ended
September 30, 2022 was approximately $1,229,000, an increase of
approximately $882,000, or 254.2 percent, from approximately
$347,000 during the same period of the prior year. The increase was
predominately attributed to approximately $667,000 of contracted
software development costs related to RemoteMore, for which there
was no material comparable activity in the same period of the prior
year.
General and administrative expenses increased by
approximately $130,000, or 15.0 percent, to approximately
$1,003,000 during the three months ended September 30, 2022, as
compared to the same period in the prior year.
Net Loss from Continuing
Operations
As the result of the factors discussed above,
during the three months ended September 30, 2022, we incurred a net
loss of approximately $1,095,000 from continuing operations, an
increase in the net loss of approximately $1,007,000 or 1144.3
percent, compared to a net loss of approximately $88,000 during the
three months ended September 30, 2021.
Financial Results for the Nine Months
Ended September 30, 2022
Revenues
Total revenues for the nine months ended
September 30, 2022 increased approximately $1,735,000, or 37.5%, to
approximately $6,363,000 from approximately $4,628,000 during the
same period in the prior year. The increase was predominately
attributable to an approximate $1,863,000 of contracted software
development related to RemoteMore, as compared to the same period
in the prior year.
During the nine months ended September 30, 2022,
our PDN Network generated approximately $3,971,000 in revenues
compared to approximately $3,845,000 in revenues during the nine
months ended September 30, 2021, an increase of approximately
$126,000 or 3.3 percent..
During the nine months ended September 30, 2022,
NAPW Network revenues were approximately $510,000, compared to
revenues of approximately $764,000 during the same period in the
prior year, a decrease of approximately $254,000 or 33.2
percent.
During the nine months ended September 30, 2022,
RemoteMore revenue was approximately $1,882,000, compared to
revenues of approximately $19,000 during the same period in the
prior year, an increase of approximately $1,863,000. This is due to
the current period having a full nine months of operations versus
the same period in 2021 which only had 10 days of operations from
the acquisition date of September 20, 2021.
Costs and Expenses
Cost of revenues during the nine months ended
September 30, 2022 was approximately $3,023,000, an increase of
approximately $2,155,000, or 248.3 percent, from approximately
$868,000 during the same period of the prior year. The increase was
predominately attributed to approximately $1,675,000 of contracted
software development costs related to RemoteMore, for which there
was no material comparable activity in the same period of the prior
year.
General and administrative expenses decreased by
approximately $834,000, or 25.2 percent, to approximately
$2,469,000 during the nine months ended September 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 $908,000.
Net Loss from Continuing
Operations
During the nine months ended September 30, 2022,
we incurred a net loss of approximately $2,038,000 from continuing
operations, an increase in the net loss of approximately $605,000
or 42.2 percent, compared to a net loss of approximately $1,433,000
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
|
|
September 30,2022 |
|
|
December 31,2021 |
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,463 |
|
|
$ |
3,403 |
|
Other current assets |
|
|
1,979 |
|
|
|
2,194 |
|
Total current assets |
|
$ |
3,442 |
|
|
$ |
5,597 |
|
Long-term assets |
|
|
3,626 |
|
|
|
3,388 |
|
Total Assets |
|
$ |
7,068 |
|
|
$ |
8,985 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
3,794 |
|
|
$ |
5,180 |
|
Total long-term
liabilities |
|
|
593 |
|
|
|
697 |
|
Total liabilities |
|
$ |
4,387 |
|
|
$ |
5,877 |
|
|
|
|
|
|
|
|
|
|
Total stockholders’
equity |
|
|
2,872 |
|
|
|
2,791 |
|
Total stockholders’ equity –
noncontrolling interests |
|
|
(191 |
) |
|
|
317 |
|
Total liabilities and
stockholders’ equity |
|
$ |
7,068 |
|
|
$ |
8,985 |
|
Summary of Financial Operations
|
|
Nine Months EndedSeptember
30, |
|
|
Change |
|
|
Change |
|
|
|
2022 |
|
|
2021 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
510 |
|
|
$ |
764 |
|
|
$ |
(255 |
) |
|
|
(33.3 |
)% |
Recruitment services |
|
|
3,840 |
|
|
|
3,695 |
|
|
|
144 |
|
|
|
3.9 |
% |
Contracted software development |
|
|
1,882 |
|
|
|
19 |
|
|
|
1,863 |
|
|
|
9802.4 |
% |
Consumer advertising and marketing solutions |
|
|
131 |
|
|
|
149 |
|
|
|
(18 |
) |
|
|
(12.3 |
)% |
Total revenues |
|
$ |
6,363 |
|
|
$ |
4,628 |
|
|
$ |
1,735 |
|
|
|
37.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
3,023 |
|
|
$ |
868 |
|
|
$ |
2,155 |
|
|
|
248.3 |
% |
Sales and marketing |
|
|
2,179 |
|
|
|
1,826 |
|
|
|
353 |
|
|
|
19.3 |
% |
General and
administrative |
|
|
2,469 |
|
|
|
3,303 |
|
|
|
(834 |
) |
|
|
(25.3 |
)% |
Depreciation and
amortization |
|
|
746 |
|
|
|
88 |
|
|
|
658 |
|
|
|
744.4 |
% |
Total pre-tax cost and
expenses: |
|
$ |
8,417 |
|
|
$ |
6,086 |
|
|
$ |
2,331 |
|
|
|
38.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations, net of tax |
|
$ |
(2,038 |
) |
|
$ |
(1,433 |
) |
|
$ |
(605 |
) |
|
|
(42.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.13 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding
shares used in computing net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
16,390,563 |
|
|
|
13,830,777 |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember
30, |
|
|
Change |
|
|
Change |
|
|
|
2022 |
|
|
2021 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
153 |
|
|
$ |
241 |
|
|
$ |
(88 |
) |
|
|
(36.6 |
)% |
Recruitment services |
|
|
1,166 |
|
|
|
1,368 |
|
|
|
(203 |
) |
|
|
(14.8 |
)% |
Products sales and other |
|
|
757 |
|
|
|
19 |
|
|
|
739 |
|
|
|
3957.1 |
% |
Consumer advertising and marketing solutions |
|
|
39 |
|
|
|
55 |
|
|
|
(15 |
) |
|
|
(27.9 |
)% |
Total revenues |
|
$ |
2,115 |
|
|
$ |
1,683 |
|
|
$ |
432 |
|
|
|
25.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
1,229 |
|
|
$ |
347 |
|
|
$ |
882 |
|
|
|
254.5 |
% |
Sales and marketing |
|
|
760 |
|
|
|
526 |
|
|
|
234 |
|
|
|
44.5 |
% |
General and
administrative |
|
|
1,004 |
|
|
|
873 |
|
|
|
130 |
|
|
|
15.0 |
% |
Depreciation and
amortization |
|
|
233 |
|
|
|
29 |
|
|
|
204 |
|
|
|
684.5 |
% |
Total pre-tax cost and
expenses: |
|
$ |
3,225 |
|
|
$ |
1,775 |
|
|
$ |
1,450 |
|
|
|
81.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations, net of tax |
|
$ |
(1,095 |
) |
|
$ |
(88 |
) |
|
$ |
(1,007 |
) |
|
|
(1144.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.07 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding
shares used in computing net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
16,922,988 |
|
|
|
15,115,167 |
|
|
|
|
|
|
|
|
|
Summary of Cash Flows from Continuing
Operations
|
|
Nine Months Ended September 30, |
|
Cash
(used in) provided by continuing operations |
|
2022 |
|
|
2021 |
|
Operating activities |
|
$ |
(1,394 |
) |
|
$ |
(1,160 |
) |
Investing activities |
|
|
(31 |
) |
|
|
(1,279 |
) |
Financing activities |
|
|
(515 |
) |
|
|
4,445 |
|
Net increase in cash and cash
equivalents from continuing operations |
|
$ |
(1,940 |
) |
|
$ |
2,006 |
|
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 nine months
ended September 30, 2021 relate to stock-based compensation, loss
attributable to noncontrolling interest, depreciation and
amortization, interest and other income and income tax benefit.
The adjustments for the three and nine months
ended September 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 benefit.
|
|
Three Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands) |
|
Loss from Continuing Operations |
|
$ |
(1,095 |
) |
|
$ |
(88 |
) |
Stock-based compensation |
|
|
34 |
|
|
|
127 |
|
Loss attributable to noncontrolling interest |
|
|
149 |
|
|
|
19 |
|
Depreciation and amortization |
|
|
233 |
|
|
|
30 |
|
Other (expense) income, net |
|
|
(1 |
) |
|
|
(2 |
) |
Income tax expense (benefit) |
|
|
(25 |
) |
|
|
(2 |
) |
Adjusted
EBITDA |
|
$ |
(705 |
) |
|
$ |
84 |
|
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands) |
|
Loss from Continuing Operations |
|
$ |
(2,038 |
) |
|
$ |
(1,434 |
) |
Stock-based compensation |
|
|
440 |
|
|
|
436 |
|
Litigation settlement reserve |
|
|
(909 |
) |
|
|
75 |
|
Loss attributable to noncontrolling interest |
|
|
508 |
|
|
|
19 |
|
Depreciation and amortization |
|
|
746 |
|
|
|
88 |
|
Other (expense) income, net |
|
|
(5 |
) |
|
|
(5 |
) |
Income tax benefit |
|
|
(36 |
) |
|
|
(19 |
) |
Adjusted
EBITDA |
|
$ |
(1,294 |
) |
|
$ |
(840 |
) |
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.
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 and
Quarterly Reports on Form 10-Q, 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 14, 2022
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