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Edited Transcript of TST earnings conference call or presentation 13-Nov-17 3:30pm GMT

Thomson Reuters StreetEvents

Q3 2017 TheStreet Inc Earnings Call

NEW YORK Jan 12, 2018 (Thomson StreetEvents) -- Edited Transcript of TheStreet Inc earnings conference call or presentation Monday, November 13, 2017 at 3:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* David A. Callaway

TheStreet, Inc. - CEO, President & Director

* Eric F. Lundberg

TheStreet, Inc. - CFO

* James J. Cramer

TheStreet, Inc. - Founder and Director

* Kevin M. Rendino

180 Degree Capital Corp. - Chairman & CEO

* Lawrence S. Kramer

TheStreet, Inc. - Chairman of the Board

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Conference Call Participants

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* Kara Lyn Anderson

B. Riley & Co., LLC, Research Division - Senior Analyst

* Keith Michael Rosenbloom

Cruiser Capital - Managing Member

* Mark Nicholas Argento

Lake Street Capital Markets, LLC, Research Division - Head of Capital Markets & Senior Research Analyst

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Presentation

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Operator [1]

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Good day, everyone, and welcome to TheStreet's Third Quarter 2017 Financial Results Conference Call. The date of this call is November 13, 2017. This call is being webcast live on the Investor Relations section of TheStreet's website at www.t.st. This call is the property of TheStreet, and any recording, reproduction or transmission of this call without the express written consent of TheStreet is strictly prohibited.

As a reminder, today's call is being recorded. You may listen to a webcast replay of this call by going to the Investor Relations section of TheStreet's website.

I would now like to turn the call over to David Callaway, Chief Executive Officer. Please go ahead, sir.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [2]

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Thank you, and good morning, everybody. I want to make a special introduction this quarter because earlier this morning, in addition to our earnings, we released 2 exciting pieces of news.

First, our Founder and Chief Contributor, Jim Cramer, agreed to sign on with us for another 4 years, ensuring his leadership and participation across our company as our turnaround gains steam.

Second, we are delighted to announce we have secured a transformative deal for shareholders, which removes the preferred stock overhang on our equity held for more than a decade by Technology Crossover Ventures and brings in a new investor in Kevin Rendino and his 180 Capital firm, with Kevin joining our Board of Directors. TCV has agreed to remain a shareholder of common stock and has even increased its holdings as part of the deal, a further signal of Wall Street's growing confidence in our prospects.

Finally, the Board of Directors has authorized a share buyback of up to 5 million shares, which is approximately 10% of outstanding shares after these transactions. That is something we were not able to do under the restrictions tied to the TCV preferred, and now we are able to do that.

So good news all around. It's a big day here at TheStreet. I'll give you more on this later. But first, I want to turn over to our Chief Financial Officer, Eric Lundberg, who will walk us through our third quarter earnings.

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Eric F. Lundberg, TheStreet, Inc. - CFO [3]

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Thanks, Dave, and good morning all.

It certainly is exciting times here at TheStreet. As Dave mentioned, we are overjoyed with the announcements made earlier today as we feel it enables us to focus on continuing to grow our businesses.

To that end, I'd like to discuss TheStreet's financial and operating results for the third quarter of this year. However, before I begin, I'd like to remind you that management will be making forward-looking statements during the course of this call, and our actual results could differ materially. Some of these risks and uncertainties that could impact our businesses are included in our 10-K.

In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliations to the most comparable GAAP measures in our earnings press release, which is available on our website.

I would first like to discuss the 2 press releases we put out this morning. In 2 related transactions we, one, retired a Series B convertible preferred and its $55 million liquidation preference held by TCV for a payment of $20 million in cash and 6 million common shares; and two, we closed a $7.85 million common stock PIPE at $1.10 per share with 180 Degree Capital Corp. We are also pleased to announce that Kevin Rendino, CEO of 180, has joined our Board of Directors.

So let's take a look at the operating performance through September 30. For the third quarter of 2017, the company reported net income attributable to common shareholders of $200,000 or $0.01 a share and adjusted EBITDA of $2.1 million, an increase of $2 million over the same period last year. The third quarter net income reflects organic revenue growth mostly resulting from a $700,000 increase in our B2B businesses. Additionally, we had expense declines across the board in cost of services, sales and marketing and general and administrative expenses, partially offset by higher depreciation and amortization expense.

I'm happy to report we recorded modest revenue growth in the quarter, putting an exclamation point on a trend where we've seen positive growth relative to past year's same quarters. Specifically, in Q1 of this year versus Q1 last year, revenues were down $800,000. In Q2 of this year versus Q2 last year, the decline in revenues over that period narrowed to $330,000. Now in Q3 of this year, we've grown our revenues compared to Q3 of last year. So you can see we are well on our way towards achieving our goals of growing revenue and returning to profitability.

Since our revenues are approximately 78% subscription-based, it takes time to see the change in our recognized financials as we recognize subscription revenue daily over the life of the subscription.

We also promised you that operating expenses, excluding depreciation and amortization, would be down a minimum of 5%. They're actually down 9%, and excluding one-time expenses from both years, they're down 15%. But more importantly, the expenses are down, and we're not sacrificing revenues.

Looking at the balance sheet we see another significant upward trend as total current and noncurrent deferred revenue is up $2 million from December 2016. B2B is up $1.9 million, and B2C is up $100,000. As a result of the deferred revenue growth, cash is up $2.6 million at September 30 of this year compared to December 31, 2016, even though we've paid down accounts payable and accrued expenses by a total of $1.9 million.

Now let's get into a little bit more detail on the quarter. Revenues for the third quarter 2017 totaled $15.3 million. While this is an increase of only $39,000 when compared to Q3 last year, as I just mentioned, we've been reporting year-over-year declines in revenue but have gradually begun to turn the tide and narrow the gap, with this quarter being the first quarter we actually had year-over-year revenue growth.

The growth was a result of higher subscription revenue in the BoardEx and RateWatch businesses as well as slightly higher advertising revenue and continued improvement in our premium business. The Business-to-Business revenue, which includes The Deal, BoardEx, and RateWatch and primarily consists of subscriptions, information services, and events revenue, totaled $7.9 million for the third quarter of this year, an increase of $654,000 or 9.1% when compared to the third quarter of last year.

The vast majority of the revenue increase is attributable to BoardEx, where subscription revenue climbed year-over-year by $691,000 or 29% and totaled $3.1 million in Q3 of this year. BoardEx experienced a 10% increase in the weighted average number of subscriptions as well as 19% in average revenue recognized per subscription.

The BoardEx revenue was partially offset in the quarter by a decline of $107,000 or 4% in The Deal, which was primarily due to an 8% decline in the weighted average number of subscriptions. It is worth noting, though, that The Deal did report a 4% increase in the average revenue recognized per subscription.

RateWatch continued to show strong revenue growth as it reported total revenues of $1.9 million for the third quarter, an increase of $132,000 or 7% year-over-year. This increase was primarily the result of subscription revenue, which increased $124,000 or 8% to $1.7 million in the quarter. There was a 12% increase in the average revenue recognized per subscription, which was offset by a 4% decline in the weighted average number of subscriptions.

Additionally, information services revenue from customer reports remained strong during the third quarter of 2017 with revenues of $206,000, which was a slight increase from the $198,000 of revenue RateWatch's information services reported in the third quarter of last year.

Turning our attention to the Business-to-Consumer business. Revenue totaled $7.4 million in Q3, a decrease of $615,000 or 8% when compared to Q3 last year. B2C subscription revenue for the third quarter of this year was $4.9 million, a decrease of $649,000 or 12% from $5.6 million in the third quarter of last year. This decrease was primarily attributable to a 14% decline in the weighted average number of subscriptions, offset by a 2% increase in the average revenue per subscription.

The average monthly churn on our B2C subscriptions was 4.2% during the third quarter of 2017, which improved 57 basis points from the 4.79% churn we experienced during the third quarter of last year and an improvement of 45 basis points from the second quarter of this year. This churn rate, while still higher than we'd like, continues to improve each and every quarter as our conversion and renewal rates continue to improve. Advertising revenue in B2C for the third quarter came in at $2.1 million, an increase of $46,000 or 2% compared to Q3 last year.

In addition to modest revenue growth, year-over-year savings were recognized in operating expense, as mentioned earlier. This was due to the continuation of several initiatives put in place during 2016 and the early part of this year. Operating expenses, which include cost of services, sales and marketing, general and administrative, depreciation and amortization as well as restructuring and other charges, totaled $15 million for the third quarter of this year, which was $1.1 million or 7% less than Q3 last year.

Excluding the third quarter 2016 onetime restructuring benefit from a lease termination related to The Deal's office space of $600,000 and other one-time severance-related costs, operating expenses for the third quarter of this year were better than the third quarter of last year by $1.6 million or 10%.

We reduced our total B2B cost of services from $3.1 million in last year to $2.8 million in the third quarter of this year and reduced our B2C cost of services from $4.8 million last year to $3.9 million this year. Savings in the B2C were primarily in salaries and other related benefit costs, outside contributors and traffic acquisition expenses. Sales and marketing expenses actually increased $100,000 for our B2B businesses, and we reduced these costs in our B2C businesses from $2.1 million in Q3 last year to approximately $1.4 million in Q3 this year.

As a result of these cost savings and the improved revenues I discussed earlier, we were able to achieve, for Q3 2017, net income attributable to common shareholders of $190,000 or $0.01 per share, basic and diluted. This is compared to a net loss attributable to common shareholders of approximately $1.2 million or $0.03 per basic and diluted share for the third quarter of last year.

We also saw a significant increase in adjusted EBITDA year-over-year. In Q3 of this year, adjusted EBITDA was $2.1 million or $2 million better than Q3 last year, which had an adjusted EBITDA of $85,000. And if we were to exclude the $600,000 onetime restructuring benefit from the lease termination related to The Deal's office space and other one-time severance-related costs, adjusted EBITDA for the third quarter of this year was better than the third quarter of last year by $2.4 million.

As I touched upon earlier, another result of the positive momentum is that we continue to have positive cash flow. As of September 30, 2017, our cash, cash equivalents, marketable securities and restricted cash amounted to approximately $26.1 million, representing 33% of our total assets and up $2.7 million or 11% from year-end 2016. Pro forma for the transactions we mentioned earlier, cash at September 30 would have approximated $13.1 million.

So in summary, as of September 30, our revenues are gaining traction and the quarter-over-quarter revenues are growing. Expenses are down substantially as we've achieved effective cost synergies. We're achieving positive cash flow, and cash is up $2.7 million from year-end. We are achieving positive net income for the second quarter in a row.

With that, I'd like to turn the call back over to Dave.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [4]

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Thank you, Eric.

As I said earlier, the TCV-180 deal will be transformative for us. We've welcomed several new investors in the last year, and Kevin Rendino and Daniel Wolfe of 180 become our strongest supporters. 180 is a new company, and its early track record is strong, so we're delighted they expressed interest in becoming part of TheStreet team.

Having Jim sign on for another term representing our long-term shareholders and his profitable subscription business provides us with even more confidence. The reason for the interest is what Eric just discussed: Our numbers continue to improve. This is our second quarter of net income. Our revenue, while up only a bit over last year, continued moving in the right direction. Costs are down. Cash is up. Deferred revenue continues to grow.

This quarter is the first time our B2B revenue topped our B2C revenue, in part of the reflection of the extraordinary contribution from BoardEx of a 29% gain in subscription revenue. RateWatch, with a 7% gain in total revenue, continues to have its best year in the last half a dozen.

The Deal, even with revenue down a little bit, benefited from a gain in average revenue per contract, as Eric said. And our efforts to increase B2B events revenue were helped by a successful corporate activism conference staged by The Deal in London in September.

On B2C, we've now had 3 consecutive quarters of rising advertising, and major financial advertisers who have been dark for years are coming back. Our premium subscription business is turning around a little slower than we hoped, but each week we are seeing new signs of improvement. A series of tech enhancements and some new important vendors starting to come online in the next few months will help us shift to a major focus on premium in the newsroom in coming months, and should help us turn the corner early next year.

Consumer events are also finding their footing. Last month, Jim hosted a Saturday teach-in for some 200 of our valued premium subscribers and other investors at the Harvard Club in New York. This will be reflected in our Q4 numbers, and you can expect more of these, perhaps across the country in 2018.

Folks, when the new management team and new board came on early last year, our goals were to get the company back to profit; begin growing all the businesses again; get Jim excited enough about our prospects to sign on for a new stint; and importantly, take care of the TCV overhang. We've now accomplished all of those. Now we turn our attention to getting premium firing on all cylinders so that all of our businesses can work off each other and benefit the entire company and you, our shareholders, as we always hoped they would.

Now I'd like to turn over briefly to Kevin Rendino from 180 Degree Capital, who joins us here at TheStreet this morning.

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Kevin M. Rendino, 180 Degree Capital Corp. - Chairman & CEO [5]

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Thanks, Dave. I'd offer a couple of comments.

One, we appreciate the opportunity afforded to us by the board and the management team of TheStreet to help resolve a long-standing overhang on the company's common stock.

Two, I guess before today, you wouldn't know it from the share price, this turnaround has already been well underway. I think the board and the management team have done terrific work in stabilizing the revenue, improving the company's cash position and cash flow and reducing its costs. I think this has come through in the quarterly numbers.

Three, I can't emphasize this enough. The retirement of the preferred is a key component to unlocking value for every common shareholder. All the good work that has been done, all the good work that will be done in the future in creating value will now accrue to the benefit of common shareholders. We simply could not have said that before today. If our shareholders haven't taken notice before today, this transaction is further evidence that the team here at TheStreet is dedicated towards enhancing shareholder value for all.

I'm glad to be a part of it, to work with the team, represent the shareholders of 180 Degree Capital as well as all the common shareholders of TheStreet. Thanks, Dave.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [6]

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Thanks, Kevin. Before we turn over to questions from our analysts, I'd also like to give the floor to our Chairman, Larry Kramer, who's also with us.

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Lawrence S. Kramer, TheStreet, Inc. - Chairman of the Board [7]

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I'll be very brief, Dave. Thanks. Congratulations. I think it was a great quarter.

I want to do 2 things. I just want to welcome 180 and Kevin to the board and to the group of shareholders we have. I think it's exciting to have a shareholder so positive and so active in supporting the company.

And the other thing I want to do is thank our other shareholders. I think you've been very patient with us. It's been 2 tough years. We've had to go through a lot to get to where we are today, to accomplish those multiple things Dave outlined. And for the most part, you stayed with us, and you were patient, and you gave us the time to do what we have to do. We realize we're nowhere near where we want to be in the future. We have a lot more hard work ahead of us, but it took a lot of boring reconstruction to get us to where we are. And I want you to know how much the company appreciates the patience to allow us the time to go ahead and do it.

And the last thing I want to do is I really want to thank Jim for the same thing, for his patience with us to help strengthen the underpinning of the company.

So anyway, thanks. Congratulations to the company and to Jim.

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James J. Cramer, TheStreet, Inc. - Founder and Director [8]

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Hi, this is Jim. I just want to thank the team here for making it exciting again. It's been a long time. I want to thank Kevin because, boy, could he ever be more right about the overhang, which has been a distressing thing for a long time, and I'm glad we got that resolved.

I'm very excited, very enthused with what I think is going to be a terrific focus of the company, which is more on premium because that division can mean a great deal. Obviously, that's the division I'm from. Thank Dave; thank Larry; thank Kevin; thank Bowers Espy, who has been a very active board member; Eric, who's our fantastic CFO; our legal team that has made everything happen.

And this is a new day for us. And I've been here for 22 years, and it's the first day that I can say, "You know what, it's a different company." And I want to be very proud of this company, and this is the start of being able to do so. So thank you very much, shareholders, for sticking with us.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [9]

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Thank you, Jim.

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James J. Cramer, TheStreet, Inc. - Founder and Director [10]

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Thank you.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [11]

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Now I'd like to open the floor to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We'll take our first question today from Kara Anderson with B. Riley FBR.

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Kara Lyn Anderson, B. Riley & Co., LLC, Research Division - Senior Analyst [2]

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Happy to see all the announcements this morning. With respect to the top line revenue decline on a sequential basis, is there anything seasonal or otherwise that you would call out for that?

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Eric F. Lundberg, TheStreet, Inc. - CFO [3]

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Yes. Kara, it's Eric. I think that almost every quarter in the third quarter, we have some seasonality in our business. Typically, in the summer months, we see advertising declines, and that's what we experienced this quarter. We also have timing as it relates to our events business. So we ran more events in Q2, and we have more events scheduled in Q4. I would tell you that those are the major drivers. Because otherwise, most of our businesses are subscription, and we saw a nice, healthy growth in BoardEx, RateWatch, and we see continued improvement in the premium business.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [4]

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Yes, Kara, this is Dave. The events are key for us, and Q4 is our signature event, at least on The Deal side with the Deal Economy, which comes up at the end of this month. So we're excited about the prospects for that and look forward to reporting on its success in the next quarter.

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Kara Lyn Anderson, B. Riley & Co., LLC, Research Division - Senior Analyst [5]

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Great. And then on the B2C subscription, can you talk about new customer acquisition efforts?

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Eric F. Lundberg, TheStreet, Inc. - CFO [6]

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Sure. So I think we've mentioned to you in the past, on the premium side of the business, we've done, I think, a fantastic job on the conversion and the renewal side, so the retention side. We have been able to put in technology that's enabled us to effectively get better conversions, better rates, better renewal rates and a higher effective price.

Where we haven't been quite as successful to date is on the new customer acquisition side. Obviously, we expect to do better, but it hasn't been as well -- it hasn't performed as well as we'd like. Partly, that's due to some technology challenges from our standpoint in terms of putting in a new billing system. We put in another system called APEX, which allows us to help monitor usage, where people came from and helps us in terms of renewal pricing. The next piece of technology we wanted to put in was something called Sailthru, which is a marketing aspect, which would allow us to target market customers in a more effective manner. That's been delayed. We are about to put that in now.

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Kara Lyn Anderson, B. Riley & Co., LLC, Research Division - Senior Analyst [7]

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Got it. And then clearly, you're outperforming on the expense reductions year-to-date, but wondering if you can talk about expectations for full year revenue growth. I think you were targeting 1% to 2%. Other than events in Q4, is there anything else that would lift your year-to-date growth rate to meet that target?

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Eric F. Lundberg, TheStreet, Inc. - CFO [8]

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I think earlier in the year, we were very bullish on modest revenue growth. I think at this point, we're probably going to be a little shy of that for 2 reasons. One is advertising is down a little bit mostly because of page views, and our premium business has turned a little bit slower than we had hoped. But as we're talking about our premium business, I want to give you a couple pieces of information.

So bookings in Q1 for our premium business were down $900,000; these are quarter-over-quarter. In Q2, they were down closer to $400,000. In Q3, our bookings were actually up $32,000 quarter-over-quarter, and just the month of October alone, they were up almost $90,000. So you can see that we're turning the business around. It's just turned slower than we had originally anticipated at the beginning of the year.

Our deferred revenue for the B2C side is up $100,000. Deferred revenue for the B2B side is up $1.9 million. So we have really nice deferred revenue growth, which is up substantially from prior year. I mean, in prior year, deferred revenue was flat. Now we're up $2 million. I think that's a harbinger of things to come. That's all on the subscription side. I think the business is really poised to really start seeing the turnaround that we had expected. It's just, in my opinion, coming a couple of quarters later than we had budgeted.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [9]

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Yes. The key here, Kara, is premium. I referenced that earlier. And we've spent the last several weeks and a good part of this past weekend focusing on how to speed up that premium turnaround that Eric just mentioned in the October numbers.

You've got to remember where we came from last year, it's been a remarkable move since then. If we can repeat just that, we're going to be in good, great shape for 2018. But the plans that we're drawing up to invest more quickly in premium in the next few months, to rejigger the newsroom so that it is geared more highly towards premium, I think, will really finally get us to get that business really growing as it should be. And that's just the last leg there. And so let's look for a lot of cool things come in Q4 and Q1 on that.

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Kara Lyn Anderson, B. Riley & Co., LLC, Research Division - Senior Analyst [10]

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That's very helpful. Last one for me. Were there any new cost-reduction initiatives in the quarter? Or were the expense reductions we saw reflective of efforts taken last year and earlier this year?

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Eric F. Lundberg, TheStreet, Inc. - CFO [11]

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There were no new cost initiatives for the quarter. They're simply a continuation of managed expense control, offset by technology enhancements that have allowed us to become more effective.

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Operator [12]

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We'll take our next question from Mark Argento with Lake Street Capital Markets.

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Mark Nicholas Argento, Lake Street Capital Markets, LLC, Research Division - Head of Capital Markets & Senior Research Analyst [13]

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Congratulations. I know it was a long process, but happy to see the outcome.

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Eric F. Lundberg, TheStreet, Inc. - CFO [14]

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Thanks, Mark.

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Mark Nicholas Argento, Lake Street Capital Markets, LLC, Research Division - Head of Capital Markets & Senior Research Analyst [15]

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Yes. Just wanted to -- a couple housekeeping and a couple more strategic questions. So on the housekeeping side, maybe you could just walk us through the capitalization kind of post-transaction. I think you mentioned roughly $13 million in cash. What does the share count look like?

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Eric F. Lundberg, TheStreet, Inc. - CFO [16]

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So we went from roughly 35.9 million shares to about 49 million shares. We issued roughly 13.1 million shares. And we used, roughly speaking, $13 million of cash, $12 million of our cash and roughly $8 million of cash we generated from the PIPE, and we had approximately $1 million of deal costs. So cash, instead of being $26.1 million at September 30, would have approximated $13.1 million.

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Mark Nicholas Argento, Lake Street Capital Markets, LLC, Research Division - Head of Capital Markets & Senior Research Analyst [17]

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So 49 million shares out, net cash of $13 million, no debt, no preferred, straight up, nice and clean?

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Eric F. Lundberg, TheStreet, Inc. - CFO [18]

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Correct, correct. And don't forget we've been generating positive cash flow all year. There's no reason to expect that we wouldn't continue to grow our cash position, particularly as we have $2 million of deferred revenue. And we're seeing all of our businesses starting to either continue to grow or improve performance in the top line.

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Mark Nicholas Argento, Lake Street Capital Markets, LLC, Research Division - Head of Capital Markets & Senior Research Analyst [19]

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No, it's good to see, especially -- and I like the fact you guys put the buyback in place as well.

So maybe we could talk a little more on the strategic side. So now, obviously, you guys have a lot more latitude in terms of what you can do with the business. From a strategic perspective, obviously, the subscription -- premium subscription business is still core and a big opportunity with great economics. On the B2B side, it really looks like your shining star there continues to be BoardEx. What's the thought process in terms of potentially investing more aggressively behind BoardEx? How do you see capital allocation going forward?

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [20]

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I think, Mark, that that's one of the key strategic goals of 2018. It's one that the board and the management team have been focused on, again, over the last few weeks and the last few days, on how we can get BoardEx's growth as strong. It's a costly business to maintain. And our Head of Institutional, Jeff Davis, has done a remarkable job getting the revenue to where it is and where we are now. The renewal rates are in the mid-90s, I think 95%, this year. He's doing a great job, along with our Technology Head, Cameron Ireland, putting the deal data in the BoardEx and leveraging the 2 to help get The Deal back into where it needs to be as well.

And so the 2 of them together, I think, demonstrate -- illustrate a real opportunity for potential partnerships going forward, potential small bolt-ons we could do with new data or something like that. But we really need to get BoardEx to the next level. Its organic growth has been phenomenal. If we want to keep the B2B flip side going, we really now got to become much more strategic in looking for some of the opportunities.

Jeff and Cameron, to an extent, have really done a great job exploring potential partnerships out there. Obviously, there's a lot of folks who want to work with BoardEx. It's the #1 -- it's the industry leader in its category. So rest assured, that is a major strategic focus, along with premium, going forward.

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Mark Nicholas Argento, Lake Street Capital Markets, LLC, Research Division - Head of Capital Markets & Senior Research Analyst [21]

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Great. That's helpful. And then just doubling back to the transaction, just, again, a couple of questions just so it's clear. So effectively, TCV has converted the preferred over, so there's no more preferred stock, and they become now basically a common stock shareholder with their 6 million shares and whatever else they might have owned previously. And then the 180 transaction, that's basically just new common stock, no preferred or anything, so it's effectively completely cleaned up at this point?

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Eric F. Lundberg, TheStreet, Inc. - CFO [22]

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Correct.

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Operator [23]

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(Operator Instructions) We'll go next to Keith Rosenbloom with Cruiser.

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Keith Michael Rosenbloom, Cruiser Capital - Managing Member [24]

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Guys, congratulations. This is an incredible series of announcements for the company.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [25]

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Thank you, Keith.

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Eric F. Lundberg, TheStreet, Inc. - CFO [26]

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Thank you, Keith.

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Keith Michael Rosenbloom, Cruiser Capital - Managing Member [27]

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You're welcome. I think our analysts are going to be very confused now not having to deal with valuing the preferred any longer. But congratulations. Two questions about that. First, TCV, they're now your second largest shareholder. Do you have any sense for their plans to sell or stay with the company?

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [28]

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Well, I think as part of this deal, they requested more shares, so I think they want to ride with us. I don't -- so I'd be surprised if we saw them doing anything extraordinarily short-term.

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Keith Michael Rosenbloom, Cruiser Capital - Managing Member [29]

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There's no lockup, Dave, associated with the shares?

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [30]

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No, there's not.

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Keith Michael Rosenbloom, Cruiser Capital - Managing Member [31]

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Okay. That's great. That's great all around.

You mentioned in your script that you were seeing new customers coming back to the company in a lot of these online media businesses. That's not the narrative we're hearing from a lot of other people. Everything is not aligned for these smaller media online media companies. Can you give -- add some color to the types of advertisers that are coming back?

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [32]

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Well, I mean, obviously, I can't name names, but they are the major Wall Street players that you would imagine. You'd recognize every one of them. Some of them have been dark on TheStreet for 5, 6, 7 years, who have now come in with buys for Q4 and Q1.

I think it's a bit of a reflection of the better content. Even though page views have gone down, the type of content that's being done is getting more reach, is attracting more attention. And certainly, among the advertisers who are looking for that pure investment, active investor play, there's no media company better positioned than us to provide it to them.

We've also done a lot of kind of intriguing, creative things, Keith. We've done some video, what we call webinars, but they're essentially panel discussions, often led by Jim, around certain topics, which we've been able to get sponsored by advertisers. And that's a growing business for us. So I know you and I have batted about the idea of a subway series of money managers talking about stocks back and forth, and given the success that we've had so far this year in putting stuff together like that, we might be able to actually get that off the ground next year.

That business is -- the idea of bringing video tied to active investing into the play has greatly benefited our content offering. So there's good ones. It's one of the reasons we've been able to, even with less traffic, top advertising year-over-year. And yes, I won't kid you. It's still a struggle every day. But when we see people come back after several years of being away, it's really gratifying.

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Eric F. Lundberg, TheStreet, Inc. - CFO [33]

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And Keith, there's one other thing about the TCV shares. They're not registered, so they're not going to be able to sell them. While there's no lockup, they probably won't be able to sell them for 6 months or so.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [34]

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Same with 180.

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Eric F. Lundberg, TheStreet, Inc. - CFO [35]

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Same with 180.

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Keith Michael Rosenbloom, Cruiser Capital - Managing Member [36]

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That's very helpful color. I think you all deserve a big pat on the back. This is terrific accomplishments all around.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [37]

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Thank you, Keith.

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Eric F. Lundberg, TheStreet, Inc. - CFO [38]

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Thanks.

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Operator [39]

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Ladies and gentlemen, there are no other questions in queue at this time. I'll turn it back to Mr. Dave Callaway for closing remarks.

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David A. Callaway, TheStreet, Inc. - CEO, President & Director [40]

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Okay. Thank you so much, folks. I really appreciate you coming on. We're looking at the screen of everyone that's on the call. It's as big as I've ever seen it, and it's really gratifying to see this type of interest.

When we joined -- when I joined here last year, looking at how far things had to come, it was definitely a daunting prospect. But the management team and, in particular, the board, which has gotten a lot more active, have been fabulous in working together to help us push this turnaround day by day, week by week. We promised you results. We thought we could see them even a couple quarters ago when we wouldn't be able to show them to you. And now it's incredibly gratifying to show them to you, and we expect to have some more amazing stuff for you ahead in the coming quarters.

So thank you all for coming on the call. And for those of you who didn't ask questions, I think we've got some follow-ups over the next couple of days. As always, we're here to engage with our shareholders and take your ideas. Bringing Kevin on the board is a real commitment in that regard. And I look forward to working with you to make it even better. Thank you.

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Operator [41]

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Ladies and gentlemen, thank you for your participation. This concludes today's conference. You may now disconnect.