The Arena Group Reports 2024 Second Quarter Financial Results
Company Highlights Success of Recent Restructurings, Majority Shareholder Significantly Increases Financial Commitment for Future Growth
Management Commentary
“Nearly all of our cost reduction initiatives are complete, leading to an expected over
“We achieved positive Adjusted EBITDA in the current quarter with performance increasing significantly within the quarter from April to June 2024,” she added. “Excluding non-recurring severance charges and higher legal fees would have delivered profitability in June. We anticipate being able to report to our shareholders further improvements in the second half of this year due to the continued phase-out of restructuring costs, increased operational efficiencies and modest organic growth.”
Expanded Line of Credit, Increased Liquidity and Termination of Business Combination Agreement
“I want to be clear: I am as committed to
Shortly after the opening of business on
-
Increase the Company’s existing
$25 million line of credit with Simplify to$50 million ; -
Convert
$15 million drawn on the line of credit to common equity based on today’s 60-day volume-weighted average stock price (VWAP); and -
Line of Credit maturity date extended to
December 1, 2026 .
“In the months since our pending business combination with Bridge Media was first agreed to,
Though the expansion and modification of terms on the existing line of credit with Simplify increase liquidity and strengthen
Second Quarter Business Highlights
- Sports Vertical: The new management team overhauled the structure and business model of the Athlon Sports brand, shifting from a fixed to a variable cost model. Following the exiting of the Sports Illustrated brand, the new framework reached strong operational performance in six weeks. Traffic increased nearly four-fold from the first to the second quarter of 2024, reaching more than 150 million pageviews. This represents an increase of over 600% year over year.
- Finance Vertical: This vertical produced the best quarter on record by delivering a year over year increase of over 750% in markets team page view traffic and diversifying and solidifying revenue streams through affiliate commerce, the relaunch of a new and improved TheStreet Pro subscription offering, and the launch of the Come Cruise with Me site and newsletter.
-
Lifestyle Vertical: The Company’s lifestyle vertical achieved the highest April and May traffic on record and delivered record vertical revenue. A continued focus on the health category resulted in major pharmaceutical and healthcare sponsorships. The Company published four newsstand issues of
Parade magazine sold exclusively in Dollar Tree stores and launched a new Best Reads channel. - Commerce Vertical: Revenue growth in the commerce vertical accelerated in the current quarter and the Company delivered year-over-year increases in both content output and revenue as compared to second quarter of 2023.
-
Adventure Vertical: Traffic in the adventure vertical nearly doubled year over year as compared to the second quarter of 2023 while remaining stable as compared to the first quarter of 2024. The Company launched the first integrated campaign across digital, social and video on all sites and published the first digital cover of Men’s Journal since
March 2023 .
Second Quarter 2024 Financial Results
Total revenue was
Total operating expenses were
For the three months ended
As of
KPMG Appointed as Independent Auditor
On
About
Forward Looking Statements
This press release includes statements that constitute forward-looking statements. Forward-looking statements may be identified by the use of words such as “forecast,” “guidance,” “plan,” “estimate,” “will,” “would,” “project,” “maintain,” “intend,” “expect,” “anticipate,” “prospect,” “strategy,” “future,” “likely,” “may,” “should,” “believe,” “continue,” “opportunity,” “potential,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, and include, for example, statements related to the Company’s anticipated future expenses and investments, business strategy and plans, expectations relating to its industry, market conditions and market trends and growth, market position and potential market opportunities, and objectives for future operations. These forward-looking statements are based on information available at the time the statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or suggested by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the ability of the Company to expand its verticals; the Company’s ability to grow its subscribers; the Company’s ability to grow its advertising revenue; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps that the Company could take to reduce operating costs; the remaining effects of the COVID-19 pandemic and impact on the demand for the Company products; the inability of the Company to sustain profitable sales growth; circumstances or developments that may make the Company unable to implement or realize the anticipated benefits, or that may increase the costs, of its current and planned business initiatives; and those factors detailed by the Company in its public filings with the
| THE |
||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| Three Months Ended |
Six Months Ended |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
| Revenue |
$ |
27,183 |
|
$ |
34,072 |
|
$ |
56,124 |
|
$ |
62,490 |
|
||||
| Cost of revenue (includes amortization of developed technology and platform development for three months ended 2024 and 2023 of |
|
16,465 |
|
|
20,855 |
|
|
36,473 |
|
|
38,945 |
|
||||
| Gross profit |
|
10,718 |
|
|
13,217 |
|
|
19,651 |
|
|
23,545 |
|
||||
| Operating expenses | ||||||||||||||||
| Selling and marketing |
|
3,751 |
|
|
6,904 |
|
|
8,315 |
|
|
12,751 |
|
||||
| General and administrative |
|
8,632 |
|
|
11,601 |
|
|
18,767 |
|
|
24,576 |
|
||||
| Depreciation and amortization |
|
913 |
|
|
1,065 |
|
|
1,900 |
|
|
2,161 |
|
||||
| Loss on impairment of assets |
|
- |
|
|
- |
|
|
1,198 |
|
|
119 |
|
||||
| Total operating expenses |
|
13,296 |
|
|
19,570 |
|
|
30,180 |
|
|
39,607 |
|
||||
| Loss from operations |
|
(2,578 |
) |
|
(6,353 |
) |
|
(10,529 |
) |
|
(16,062 |
) |
||||
| Other (expense) income | ||||||||||||||||
| Change in valuation of contingent consideration |
|
- |
|
|
90 |
|
|
(313 |
) |
|
(409 |
) |
||||
| Interest expense, net |
|
(4,249 |
) |
|
(5,001 |
) |
|
(8,588 |
) |
|
(9,183 |
) |
||||
| Liquidated damages |
|
(76 |
) |
|
(177 |
) |
|
(152 |
) |
|
(304 |
) |
||||
| Total other expense |
|
(4,325 |
) |
|
(5,088 |
) |
|
(9,053 |
) |
|
(9,896 |
) |
||||
| Loss before income taxes |
|
(6,903 |
) |
|
(11,441 |
) |
|
(19,582 |
) |
|
(25,958 |
) |
||||
| Income tax provision |
|
(35 |
) |
|
(86 |
) |
|
(76 |
) |
|
(93 |
) |
||||
| Loss from continuing operations |
|
(6,938 |
) |
|
(11,527 |
) |
|
(19,658 |
) |
|
(26,051 |
) |
||||
| Loss from discontinued operations, net of tax |
|
(1,249 |
) |
|
(7,957 |
) |
|
(91,887 |
) |
|
(12,810 |
) |
||||
| Net loss |
$ |
(8,187 |
) |
$ |
(19,484 |
) |
$ |
(111,545 |
) |
$ |
(38,861 |
) |
||||
| Basic and diluted net loss per common share: | ||||||||||||||||
| Continuing operations |
$ |
(0.24 |
) |
$ |
(0.52 |
) |
$ |
(0.70 |
) |
$ |
(1.27 |
) |
||||
| Discontinued operations |
|
(0.04 |
) |
|
(0.36 |
) |
|
(3.27 |
) |
|
(0.62 |
) |
||||
| Basic and diluted net loss per common share |
$ |
(0.28 |
) |
$ |
(0.88 |
) |
$ |
(3.97 |
) |
$ |
(1.89 |
) |
||||
| Weighted average number of common shares outstanding – basic and diluted |
|
29,399,365 |
|
|
22,074,500 |
|
|
28,110,331 |
|
|
20,509,676 |
|
||||
| THE |
||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents |
$ |
6,085 |
|
$ |
9,284 |
|
||
| Accounts receivables, net |
|
22,698 |
|
|
31,676 |
|
||
| Prepayments and other current assets |
|
5,555 |
|
|
5,791 |
|
||
| Current assets from discontinued operations |
|
1,014 |
|
|
43,648 |
|
||
| Total current assets |
|
35,352 |
|
|
90,399 |
|
||
| Property and equipment, net |
|
225 |
|
|
328 |
|
||
| Operating lease right-of-use assets |
|
2,565 |
|
|
176 |
|
||
| Platform development, net |
|
7,380 |
|
|
8,723 |
|
||
| Acquired and other intangible assets, net |
|
24,489 |
|
|
27,457 |
|
||
| Other long term assets |
|
773 |
|
|
1,003 |
|
||
|
|
42,575 |
|
|
42,575 |
|
|||
| Noncurrent assets from discontinued operations |
|
- |
|
|
18,217 |
|
||
| Total assets |
$ |
113,359 |
|
$ |
188,878 |
|
||
| Liabilities, mezzanine equity and stockholders’ deficiency | ||||||||
| Current liabilities: | ||||||||
| Accounts payable |
$ |
4,977 |
|
$ |
7,803 |
|
||
| Accrued expenses and other |
|
27,270 |
|
|
28,903 |
|
||
| Line of credit |
|
- |
|
|
19,609 |
|
||
| Unearned revenue |
|
10,719 |
|
|
16,938 |
|
||
| Subscription refund liability |
|
131 |
|
|
46 |
|
||
| Operating lease liability, current portion |
|
122 |
|
|
358 |
|
||
| Contingent consideration |
|
- |
|
|
1,571 |
|
||
| Liquidating damages payable |
|
3,076 |
|
|
2,924 |
|
||
| Simplify loan |
|
12,748 |
|
|
- |
|
||
| Bridge notes |
|
8,000 |
|
|
7,887 |
|
||
| Debt |
|
102,372 |
|
|
102,309 |
|
||
| Current liabilities from discontinued operations |
|
97,516 |
|
|
47,673 |
|
||
| Total current liabilities |
|
266,931 |
|
|
236,021 |
|
||
| Unearned revenue, net of current portion |
|
530 |
|
|
542 |
|
||
| Operating lease liability, net of current portion |
|
2,101 |
|
|
- |
|
||
| Other long-term liabilities |
|
169 |
|
|
406 |
|
||
| Deferred tax liabilities |
|
661 |
|
|
599 |
|
||
| Noncurrent liabilities from discontinued operations |
|
- |
|
|
10,137 |
|
||
| Total liabilities |
|
270,392 |
|
|
247,705 |
|
||
| Mezzanine equity: | ||||||||
| Series G redeemable and convertible preferred stock, |
|
168 |
|
|
168 |
|
||
| Total mezzanine equity |
|
168 |
|
|
168 |
|
||
| Stockholders' deficiency: | ||||||||
| Common stock, |
|
295 |
|
|
237 |
|
||
| Additional paid-in capital |
|
332,702 |
|
|
319,421 |
|
||
| Accumulated deficit |
|
(490,198 |
) |
|
(378,653 |
) |
||
| Total stockholders’ deficiency |
|
(157,201 |
) |
|
(58,995 |
) |
||
| Total liabilities, mezzanine equity and stockholders’ deficiency |
$ |
113,359 |
|
$ |
188,878 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240818869669/en/
Investor Relations Contact
aren@fnkir.com
646.809.4048
The Arena Group Contact
c-sjanisse@thearenagroup.net
404.574.9206
Source: