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,
2023.
“The recruiting industry as a whole is still
feeling the effects of the lingering financial and economic impact
that has affected the current economy since 2022. As such, we have
had to make adjustments in our operational strategies within our
organization, moving personnel from slower producing revenue
streams to other areas of the business that we feel we can increase
revenues in the near future with the additional personnel”, said
Adam He, CEO of Professional Diversity Network, Inc. “Our
RemoteMore segment revenues for the period continue to grow, as
compared to the same period in the prior year and are consistent
with our expectations. As such, we have increased our investment in
RemoteMore to a total of approximately 73 percent. Additionally,
the operations of our recent acquisition, Expo Experts, has met our
initial expectations and we expect solid results throughout the
fiscal year. We are still focused on capitalizing on growth
opportunities, increasing our return on organic operations, and
maximizing shareholder value throughout 2023.”
First Quarter Financial
Highlights:
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● |
In January 2023, the Company purchased the assets and operations of
Expo Experts for a total consideration of $600,000 funded by the
payment of $400,000 in cash and the issuance of restricted shares
of PDN common stock valued at $200,000. |
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● |
In January 2023, the Company exercised its option to purchase an
additional 20 percent interest in RemoteMore at a purchase price of
$116,667. In May 2023, the Company acquired an additional 7 percent
interest in RemoteMore for approximately $235,000. The acquisition
interest and price were based on the original valuation of
RemoteMore in September 2021. This acquisition increases the
Company’s interest in RemoteMore to 72.62 percent. |
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● |
In March 2023, the Company entered into a stock purchase agreement
with Ms. Yiran Gu, in connection with the purchase of 333,181
shares of common stock of the Company at a price of approximately
$2.10 per share for aggregate gross proceeds of $700,000. |
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● |
Total consolidated revenues for the three months ended March 31,
2023, decreased approximately $98,000 or 5 percent as compared to
the same period in the prior year. PDN Network segment revenues
decreased approximately $0.3 million, or 18 percent compared to
revenues during the same period in the prior year. Offsetting the
net decrease were $0.1 million of event revenue related to our
recent acquisition of Expo Experts assets and operations. Revenues
for the three months ended March 31, 2022, from the NAPW segment
decreased less than approximately $0.1 million, or 34 percent as
compared to the same period in the prior year. Revenues for
RemoteMore USA for the three months ended March 31, 2023, increased
approximately $0.2 million or 46 percent as compared to the same
period in the prior year. |
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● |
Basic and diluted net loss per share were $0.11 during the three
months ended March 31, 2023 and March 31, 2022, respectively. |
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● |
On March 31, 2023, cash balances were approximately $0.9 million as
compared to $1.2 million on December 31, 2022. Working capital
deficit from continuing operations on March 31, 2023, was
approximately $1.0 million as compared to $0.2 million on December
31, 2022. |
Financial Results for the Three Months
Ended March 31, 2022
Revenues
Total revenues for the three months ended March
31, 2023, decreased approximately $98,000, or 5 percent, to
approximately $1,955,000 from approximately $2,053,000 during the
same period in the prior year. The decrease was predominately
attributable to recruitment services revenues of approximately
$230,000 and an approximate $67,000 decrease in membership fees and
related services revenues, as compared to the same period in the
prior year. Partially offsetting the decrease were increases of
approximately $221,000 of contracted software development related
to RemoteMore, as compared to the same period in the prior year,
and approximately $83,000 of event revenue from the recently
acquired Expo Experts for which there was no comparable revenue in
the same period of the prior year.
During the three months ended March 31, 2023,
our PDN Network generated approximately $1,128,000 in revenues
compared to approximately $1,380,000 in revenues during the three
months ended March 31, 2022, a decrease of approximately $252,000
or 18 percent.
During the three months ended March 31, 2023,
NAPW Network revenues were approximately $129,000, compared to
revenues of approximately $196,000 during the same period in the
prior year, a decrease of approximately $67,000 or 34 percent.
During the three months ended March 31, 2023,
RemoteMore revenue was approximately $698,000, compared to revenues
of approximately $477,000 during the same period in the prior year,
an increase of approximately $221,000 or 46 percent.
Costs and Expenses
Cost of revenues during the three months ended
March 31, 2023 was approximately $1,074,000, an increase of
approximately $212,000, or 25 percent, from approximately $862,000
during the same period of the prior year. The increase was
predominately attributed to an increase of approximately $184,000
of contracted software development costs related to RemoteMore, as
compared to the same period of the prior year.
General and administrative expenses decreased by
approximately $54,000, or 5 percent, to approximately $1,053,000
during the three months ended March 31, 2023, as compared to the
same period in the prior year. The decrease was predominately due
to decreases in accounting expenses of approximately $113,000,
$91,000 in share based compensation expenses, and legal expense of
$19,000, as compared to the same period in the prior year.
Offsetting the decrease were increases in salary-related costs of
approximately $84,000, other purchased services of approximately
$53,000, and bad debt expenses of $40,000.
Depreciation and amortization expense during the
three months ended March 31, 2023 was approximately $133,000, a
decrease of approximately $148,000, compared to approximately
$281,000 during the same period in the prior year. The decrease was
primarily attributable to approximately $255,000 of amortization
expense related to RemoteMore’s intangible assets in the first
quarter of 2022, for which there were no comparable charges in the
same period of the current year, and assets and intangible assets
reaching the end of their useful lives, partially offset by
amortization expense of approximately $100,000 related to Expo
Experts’ intangible assets for which there were no comparable
charges in the same period of the prior year.
Net Loss from Continuing
Operations
As the result of the factors discussed above,
during the three months ended March 31, 2023, we incurred a net
loss of approximately $1,109,000 from continuing operations, an
increase in the net loss of approximately $220,000 or 25 percent,
compared to a net loss of approximately $890,000 during the three
months ended March 31, 2022.
Summary of the Quarter’s Financial
Information
Amounts in the following tables are in thousands
except for per share amounts and outstanding shares.
Summary of Financial Position
|
|
March 31,2023 |
|
|
December 31,2022 |
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
964 |
|
|
$ |
1,237 |
|
Other current assets |
|
|
1,716 |
|
|
|
2,020 |
|
Total current assets |
|
$ |
2,680 |
|
|
$ |
3,257 |
|
Long-term assets |
|
|
4,146 |
|
|
|
3,579 |
|
Total Assets |
|
$ |
6,826 |
|
|
$ |
6,836 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
4,226 |
|
|
$ |
3,943 |
|
Total long-term
liabilities |
|
|
476 |
|
|
|
584 |
|
Total liabilities |
|
$ |
4,702 |
|
|
$ |
4,527 |
|
|
|
|
|
|
|
|
|
|
Total Professional Diversity
Network, Inc. stockholders’ equity |
|
|
2,413 |
|
|
|
2,546 |
|
Total stockholders’ equity –
noncontrolling interests |
|
|
(289 |
) |
|
|
(237 |
) |
Total liabilities and
stockholders’ equity |
|
$ |
6,826 |
|
|
$ |
6,836 |
|
Summary of Financial Operations
|
|
Three Months EndedMarch 31, |
|
|
Change |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
(Dollars) |
|
|
(Percent) |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Membership fees and related services |
|
$ |
129 |
|
|
$ |
196 |
|
|
$ |
(67 |
) |
|
|
(34.2 |
)% |
Recruitment services |
|
|
1,103 |
|
|
|
1,333 |
|
|
|
(230 |
) |
|
|
(17.2 |
)% |
Contracted Software Development |
|
|
698 |
|
|
|
477 |
|
|
|
221 |
|
|
|
46.3 |
% |
Consumer advertising and marketing solutions |
|
|
25 |
|
|
|
47 |
|
|
|
(22 |
) |
|
|
(46.8 |
)% |
Total revenues |
|
$ |
1,955 |
|
|
$ |
2,053 |
|
|
$ |
(98 |
) |
|
|
(4.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
1,074 |
|
|
$ |
862 |
|
|
$ |
212 |
|
|
|
24.6 |
% |
Sales and marketing |
|
|
822 |
|
|
|
719 |
|
|
|
103 |
|
|
|
14.3 |
% |
General and
administrative |
|
|
1,053 |
|
|
|
1,107 |
|
|
|
(54 |
) |
|
|
(4.9 |
)% |
Depreciation and
amortization |
|
|
133 |
|
|
|
281 |
|
|
|
(148 |
) |
|
|
(46.8 |
)% |
Total cost and expenses: |
|
$ |
3,082 |
|
|
$ |
2,969 |
|
|
$ |
113 |
|
|
|
3.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations, net of tax |
|
$ |
(1,109 |
) |
|
$ |
(890 |
) |
|
$ |
(220 |
) |
|
|
(24.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
10,016,603 |
|
|
|
8,103,557 |
|
|
|
|
|
|
|
|
|
Summary of Cash Flows from Continued
Operations
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Cash (used in) provided by continued operations |
|
|
|
|
|
|
|
|
Operating activities |
|
$ |
(394 |
) |
|
$ |
(287 |
) |
Investing activities |
|
|
(548 |
) |
|
|
(2 |
) |
Financing activities |
|
|
700 |
|
|
|
(140 |
) |
Net increase in cash and cash
equivalents from continued operations |
|
$ |
(242 |
) |
|
$ |
(429 |
) |
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 months ended March
31, 2023 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 months ended March
31, 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 EndedMarch 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
(in thousands) |
|
Loss from Continuing Operations |
|
$ |
(1,109 |
) |
|
$ |
(890 |
) |
Stock-based compensation |
|
|
33 |
|
|
|
124 |
|
Litigation settlement reserve |
|
|
- |
|
|
|
17 |
|
Loss attributable to noncontrolling interest |
|
|
52 |
|
|
|
205 |
|
Depreciation and amortization |
|
|
133 |
|
|
|
281 |
|
Interest and other income |
|
|
(7 |
) |
|
|
(1 |
) |
Income tax expense (benefit) |
|
|
(11 |
) |
|
|
(26 |
) |
Adjusted
EBITDA |
|
$ |
(909 |
) |
|
$ |
(290 |
) |
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, career fairs,
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.
In addition, PDN, Inc. owns 72.62% of RemoteMore
USA, an innovative, global entity that provides remote-hiring
marketplace services for developers and companies. Companies are
connected with reliable, cost-efficient, vetted developers, and
empowers every developer to get a meaningful job regardless of
their location.
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
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