The Meet Group, Inc. (NASDAQ: MEET), a leading provider of
interactive dating solutions, today reported financial results for
its second quarter ended June 30, 2020.
Second Quarter 2020 Highlights
- Total revenue of $90.3 million, up 74% from the second quarter
of 2019.
- GAAP net income of $10.4 million, or $0.14 per diluted share,
compared with GAAP net income of $2.2 million, or $0.03 per diluted
share in the second quarter of 2019.
- Adjusted EBITDA of $20.8 million, compared with $9.8 million in
the second quarter of 2019.
- Non-GAAP net income of $19.7 million, or $0.26 per diluted
share, compared with $8.8 million, or $0.11 per diluted share, in
the second quarter of 2019.
- Transaction with ProSiebenSat.1’s and General Atlantic’s joint
company NuCom Group expected to close in the second half of
2020.
(See the important discussion about the presentation of non-GAAP
financial measures, and reconciliation to the most direct
comparable GAAP financial measures, below.)
“We continue to expect to close our acquisition by
ProSiebenSat.1 and General Atlantic by the end of this year,” said
Geoff Cook, Chief Executive Officer of The Meet Group. “We have
received antitrust clearance in the United States, Germany and
Austria, and our stockholders have approved the transaction.”
Second Quarter Financial Results
For the second quarter of 2020, the Company reported revenue of
$90.3 million, an increase of $38.3 million, or 74%, from $52.0
million in the second quarter of 2019. GAAP net income for the
second quarter of 2020 was $10.4 million, or $0.14 per diluted
share, compared with GAAP net income of $2.2 million, or $0.03 per
diluted share, in the second quarter of 2019. Adjusted EBITDA for
the second quarter of 2020 was $20.8 million, compared with $9.8
million in the second quarter of 2019. Non-GAAP net income for the
second quarter of 2020 was $19.7 million, or $0.26 per diluted
share, compared with $8.8 million, or $0.11 per diluted share, in
the second quarter of 2019.
The Company ended the quarter with $47.6 million in cash and
cash equivalents.
Outlook and Conference Call
Due to the pending acquisition by ProSiebenSat.1’s and General
Atlantic’s joint company NuCom Group, the Company does not plan to
host an earnings conference call or provide forward-looking
guidance.
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands, except par value
and share data)
(Unaudited)
June 30, 2020
December 31, 2019
Assets:
Current assets:
Cash and cash equivalents
$
47,644
$
27,241
Accounts receivable, net
33,230
25,234
Prepaid expenses and other current
assets
6,464
6,062
Total current assets
87,338
58,537
Deferred tax assets
13,616
16,233
Property and equipment, net
2,701
3,625
Operating lease right-of-use assets
6,550
7,034
Intangible assets, net
24,947
29,305
Goodwill
156,749
156,687
Other assets
700
1,300
Total assets
$
292,601
$
272,721
Liabilities and stockholders'
equity:
Current liabilities:
Accounts payable
$
8,610
$
5,346
Accrued liabilities
24,806
20,090
Current portion of long-term debt
3,500
3,500
Current portion of operating lease
liabilities
2,464
2,081
Current portion of finance lease
obligations
9
10
Deferred revenue
3,720
3,884
Total current liabilities
43,109
34,911
Long-term debt, net
28,672
30,375
Long-term operating lease liabilities
4,204
5,024
Long-term finance lease obligations
46
53
Long-term derivative liabilities
913
1,451
Deferred tax liabilities
2,616
2,773
Other liabilities
—
894
Total liabilities
79,560
75,481
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value;
authorized - 5,000,000 shares; no shares issued and outstanding as
of June 30, 2020 and December 31, 2019
—
—
Series A junior participating preferred
stock, $0.001 par value; authorized - 200,000 shares; no shares
issued and outstanding as of June 30, 2020 and December 31,
2019
—
—
Common stock, $0.001 par value; authorized
- 100,000,000 shares; 72,792,571 and 70,756,013 shares issued and
outstanding as of June 30, 2020 and December 31, 2019,
respectively
73
71
Additional paid-in capital
438,345
430,959
Accumulated deficit
(223,694
)
(231,441
)
Accumulated other comprehensive loss
(1,683
)
(2,349
)
Total stockholders’ equity
213,041
197,240
Total liabilities and stockholders’
equity
$
292,601
$
272,721
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
(in thousands, except share and
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Revenue
$
90,332
$
52,000
$
145,398
$
101,513
Operating costs and expenses:
Sales and marketing
8,089
9,060
15,803
16,900
Product development and content
57,627
30,151
95,298
61,273
General and administrative
6,663
5,892
11,693
10,820
Depreciation and amortization
2,689
3,430
5,509
6,628
Acquisition, restructuring and other
1,335
25
4,705
504
Total operating costs and expenses
76,403
48,558
133,008
96,125
Income from operations
13,929
3,442
12,390
5,388
Other income (expense):
Interest income
7
28
20
60
Interest expense
(554
)
(328
)
(950
)
(731
)
Gain (loss) on foreign currency
transactions
3
(2
)
(4
)
(68
)
Loss on disposal of assets
—
—
(108
)
—
Other items of (expense) income, net
—
(1
)
2
3
Total other expense
(544
)
(303
)
(1,040
)
(736
)
Income before income tax expense
13,385
3,139
11,350
4,652
Income tax expense
(3,006
)
(935
)
(3,379
)
(1,190
)
Net income
$
10,379
$
2,204
$
7,971
$
3,462
Basic and diluted net income per
share:
Basic net income per share
$
0.14
$
0.03
$
0.11
$
0.05
Diluted net income per share
$
0.14
$
0.03
$
0.10
$
0.04
Weighted-average shares outstanding:
Basic
72,030,143
75,648,621
71,516,532
75,250,562
Diluted
76,225,180
78,508,559
76,073,893
78,656,115
THE MEET GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
(in thousands)
Six Months Ended June
30,
2020
2019
Cash flows from operating
activities:
Net income
$
7,971
$
3,462
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
5,509
6,628
Amortization of right-of-use assets
1,284
1,294
Stock-based compensation expense
6,035
5,290
Deferred tax expense
2,317
268
Loss on disposal of assets
108
—
Loss on foreign currency transactions
4
68
Provision for expected credit losses
989
909
Non-cash interest expense
452
94
Changes in derivatives
246
—
Changes in contingent consideration
obligations
45
64
Changes in operating assets and
liabilities:
Accounts receivable
(9,137
)
2,414
Prepaid expenses, other current assets and
other assets
47
(484
)
Accounts payable and accrued
liabilities
5,399
(6,021
)
Deferred revenue
(164
)
(19
)
Net cash provided by operating
activities
21,105
13,967
Cash flows from investing
activities:
Purchases of property and equipment
(233
)
(688
)
Acquisition of business, net of cash
acquired
—
(11,808
)
Net cash used in investing
activities
(233
)
(12,496
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
1,987
703
Repurchases of common stock
(65
)
—
Payments of finance leases
(7
)
(78
)
Proceeds from revolving loan
—
7,000
Payments for restricted stock awards
withheld for taxes
(636
)
(371
)
Payments of term loan
(1,750
)
(11,067
)
Net cash used in financing
activities
(471
)
(3,813
)
Change in cash and cash equivalents prior
to effect of foreign currency exchange rate
20,401
(2,342
)
Effect of foreign currency exchange
rate
2
29
Net increase (decrease) in cash and cash
equivalents
20,403
(2,313
)
Cash and cash equivalents as of
beginning of period
27,241
28,366
Cash and cash equivalents as of end of
period
$
47,644
$
26,053
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
245
$
630
Cash paid for income taxes
$
1,375
$
1,320
THE MEET GROUP, INC. AND
SUBSIDIARIES
DISAGGREGATION OF
REVENUE
(UNAUDITED)
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
$
%
$
%
$
%
$
%
User pay revenue:
Video
$
61,350
67.9
%
$
21,279
40.9
%
$
89,983
61.9
%
$
41,508
40.9
%
Subscription and other in-app products
20,031
22.2
%
15,642
30.1
%
34,426
23.7
%
31,238
30.8
%
Total user pay revenue
81,381
90.1
%
36,921
71.0
%
124,409
85.6
%
72,746
71.7
%
Advertising revenue
8,951
9.9
%
15,079
29.0
%
20,989
14.4
%
28,767
28.3
%
Total revenue
$
90,332
100.0
%
$
52,000
100.0
%
$
145,398
100.0
%
$
101,513
100.0
%
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF NET INCOME
TO ADJUSTED EBITDA
(UNAUDITED)
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Net income
$
10,379
$
2,204
$
7,971
$
3,462
Interest expense
554
328
950
731
Income tax expense
3,006
935
3,379
1,190
Depreciation and amortization expense
2,689
3,430
5,509
6,628
Stock-based compensation expense
2,850
2,865
6,035
5,290
Acquisition, restructuring and other
1,335
25
4,705
504
Loss on disposal of assets
—
—
108
—
(Gain) loss on foreign currency
transactions
(3
)
2
4
68
Adjusted EBITDA
$
20,810
$
9,789
$
28,661
$
17,873
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF NET INCOME
TO NON-GAAP NET INCOME
(UNAUDITED)
(in thousands, except share and
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Net income
$
10,379
$
2,204
$
7,971
$
3,462
Stock-based compensation expense
2,850
2,865
6,035
5,290
Amortization of intangibles
2,176
2,778
4,353
5,340
Income tax expense
3,006
935
3,379
1,190
Acquisition, restructuring and other
1,335
25
4,705
504
Non-GAAP Net Income
$
19,746
$
8,807
$
26,443
$
15,786
GAAP basic net income per share
$
0.14
$
0.03
$
0.11
$
0.05
GAAP diluted net income per share
$
0.14
$
0.03
$
0.10
$
0.04
Basic Non-GAAP Net Income per share
$
0.27
$
0.12
$
0.37
$
0.21
Diluted Non-GAAP Net Income per share
$
0.26
$
0.11
$
0.35
$
0.20
Weighted-average shares outstanding:
Basic
72,030,143
75,648,621
71,516,532
75,250,562
Diluted
76,225,180
78,508,559
76,073,893
78,656,115
THE MEET GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF NET CASH
PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(UNAUDITED)
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Net cash provided by operating
activities
$
15,554
$
10,605
$
21,105
$
13,967
Purchases of property and equipment
(146
)
(405
)
(233
)
(688
)
Free Cash Flow
$
15,408
$
10,200
$
20,872
$
13,279
About The Meet Group
The Meet Group (NASDAQ: MEET) is a leading provider of
interactive dating solutions designed to meet the universal need
for human connection. Our ecosystem of dating apps enables users
around the world to interact through one-to-many livestreaming
broadcasts and text-based conversations. Our top apps, MeetMe©,
LOVOO©, Skout©, Tagged© and Growlr©, deliver live interactions and
meaningful connections to millions of users daily. Headquartered in
New Hope, PA, we have offices in Philadelphia, San Francisco,
Dresden and Berlin. The Meet Group is committed to safety. You can
find a description of current safety practices here:
https://www.themeetgroup.com/safety-practices/. For more
information, visit themeetgroup.com, and follow us on Facebook,
Twitter or LinkedIn.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including whether we will close our transaction
with ProSiebenSat.1 and General Atlantic as anticipated. All
statements other than statements of historical facts contained
herein are forward-looking statements. The words “believe,” “may,”
“estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“could,” “target,” “potential,” “project,” “outlook,” “is likely,”
“expect” and similar expressions, as they relate to us, are
intended to identify forward-looking statements. We have based
these forward-looking statements largely on our current
expectations and projections about future events and financial
trends that we believe may affect our financial condition, results
of operations, business strategy and financial needs. Important
factors that could cause actual results to differ from those in the
forward-looking statements include the risk that our applications
will not function easily or otherwise as anticipated, the risk that
we will not launch additional features and upgrades as anticipated,
the risk that unanticipated events affect the functionality of our
applications with popular mobile operating systems, any changes in
such operating systems that degrade our mobile applications’
functionality and other unexpected issues which could adversely
affect usage on mobile devices. Further information on our risk
factors is contained in our filings with the Securities and
Exchange Commission (SEC), including the Form 10-K for the year
ended December 31, 2019 filed with the SEC on March 12, 2020 and
the Form 10-Q for the quarter ended March 31, 2020 filed with the
SEC on May 6, 2020. Any forward-looking statement made by us herein
speaks only as of the date on which it is made. Factors or events
that could cause our actual results to differ may emerge from time
to time, and it is not possible for us to predict all of them. We
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as may be required by law.
Regulation G – Non-GAAP Measures
The Company defines mobile traffic and engagement metrics
(including MAU, DAU, chats per day, and new users per day) to
include mobile app traffic for all properties and mobile web
traffic for MeetMe, Skout and LOVOO. The Company defines a Video
Daily Active User (vDAU) as a registered user of one of our
platforms who has logged in and visited the Live feature, either as
a broadcaster or viewer, on the day of measurement. The Company
defines Average Daily Video Revenue per Video Daily Active User
(vARPDAU) as the average daily video revenue per vDAU. The Company
uses these user metrics for financial and operational
decision-making and as a means to evaluate period-to-period
comparisons. The Company presents user metrics because it believes
them to be an important supplemental measure of performance that is
commonly used by securities analysts, investors and other
interested parties in the evaluation of companies in its industry
and because it believes that these metrics provide useful
information to investors regarding the Company’s financial
condition and results of operations. There is no directly
comparable U.S. generally accepted accounting principles (GAAP)
measure to vARPDAU provided in the Company’s financial statements
and therefore no reconciliation is provided.
The Company uses Adjusted EBITDA, Non-GAAP Net Income and Free
Cash Flow, which are not calculated and presented in accordance
with GAAP, in evaluating its financial and operational decision
making and as a means to evaluate period-to period comparison. The
Company uses these non-GAAP financial measures for financial and
operational decision-making and as a means to evaluate
period-to-period comparisons. The Company presents these non-GAAP
financial measures because it believes them to be an important
supplemental measure of performance that is commonly used by
securities analysts, investors and other interested parties in the
evaluation of companies in our industry. We refer you to the
reconciliations above for these historical non-GAAP financial
measures to their directly comparable GAAP financial measures.
The Company defines Adjusted EBITDA as net income or loss before
interest expense, benefit from or provision for income taxes,
depreciation and amortization expense, stock-based compensation
expense, non-recurring acquisition, restructuring and other
expenses, gain or loss on foreign currency transactions, gain or
loss on sale or disposal of assets, provision for expected credit
losses outside the normal range and goodwill and long-lived asset
impairment charges. The Company excludes stock-based compensation
expense because it is non-cash in nature. The Company defines
Non-GAAP Net Income as net income or loss before benefit from or
provision for income taxes, amortization on intangibles,
non-recurring acquisition, restructuring and other expenses,
goodwill and long-lived asset impairment charges and non-cash
stock-based compensation expense. The Company defines Free Cash
Flow as net cash provided by or used in its operating activities,
minus purchases of property and equipment, as shown in the
consolidated statements of cash flows.
Non-GAAP financial measures should not be considered as an
alternative to net income, operating income, cash flow from
operating activities, as a measure of liquidity or any other
financial measure. They may not be indicative of the historical
operating results of the Company nor is it intended to be
predictive of potential future results. Investors should not
consider non-GAAP financial measures in isolation or as a
substitute for performance measures calculated in accordance with
GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005189/en/
Investor Contact: Leslie Arena larena@themeetgroup.com 267 714
6418 Media Contact: Brandyn Bissinger bbissinger@themeetgroup.com
267 446 7010
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