NEW YORK--(BUSINESS WIRE)--Salon Media Group, Inc. (OTCQB: SLNM) today announced results for its fiscal 2015 third quarter ended December 31, 2014.
Highlights:
- Third quarter net revenue was $1.5 million
- Unique visitors to Salon.com grew 82% in 2014, the second highest growth in its online media peer group, according to comScore data
- Salon.com reached an all-time high in traffic of 18.9 million unique users for the month of October 2014 according to Google Analytics
- Mobile users grew 104% compared to same period last year
- Facebook traffic grew 127% compared to the same period last year
Third quarter net revenue of $1.5 million was down 22% from the $1.9 million reported for the same period last year. For the nine months ended December 31, 2014, net revenue was $3.7 million, a decline of 19% from the $4.6 million reported for the nine months ended December 31, 2013. The drop in revenue was a result of the competitive advertising landscape for smaller Internet media companies, and low CPMs (cost per million impressions) for advertising placement on mobile devices, which is the platform increasingly used by Salon users.
Operating expenses for the third quarter rose 5% to $2.3 million compared to $2.2 million for the same period last year. For the nine months ended December 31, 2014, operating expenses were $6.6 million, compared to $6.1 million for the same period last year. The increase in operating expenses resulted primarily from higher stock-based compensation, increased rent due to a new and larger office space in New York, and an increase in professional fees. The Company’s loss from operations for the third quarter was $0.8 million, compared to a loss of $0.3 million for the same period last year. The Company’s loss from operations for the nine months ended December 31, 2014 was $2.9 million, compared to a loss of $1.4 million for the same period last year.
Salon’s agenda-setting and conversation driven stories about Islam, the state of the Democratic Party, Charlie Hebdo, Bill Cosby, fast food strikes, and Stephen Colbert were widely followed by readers and recognized by the New York Times, CNN, MSNBC, The New Yorker, The Washington Post, Los Angeles Times, Politico and many others. Interviews with Bill Maher, Elizabeth Warren and others were also followed and cited by major publications.
Unique visitors to Salon.com averaged 18.0 million per month during the third quarter according to Google Analytics. These numbers mark the best quarter in Salon’s history and show an increase of 56% compared to the same period last year, and an increase of 9% compared to this year’s previous quarter.
During calendar year 2014, Salon’s traffic grew 82% to 12.23 million unique visitors at December 31, 2014, as measured by ComScore (U.S. only, includes mobile), placing Salon second among its online news peers in traffic growth. Salon is among only five companies with more than 50% growth, with the average growth for this competitive set at 37%. Our desktop traffic growth was also the highest among our online news peers, growing 52% compared to an average of 4% for our peers.
Mobile and social media continues to be a major driver of Salon’s traffic growth. Our mobile readers accounted for 57% of unique visitors in December 2014, which was a significant increase compared to 48% in December 2013. During the third quarter, overall traffic from the mobile platforms increased 104% compared to the December 2013 quarter, mostly due to the top articles going viral over the Facebook mobile platform.
Social media traffic grew 127% in the quarter ended December 31, 2014 compared to the same period in 2013. Facebook continues to be the largest social media driver, with referrals increasing 216% in the December 2014 quarter versus the same period in 2013. Twitter also grew strongly in the December 2014 quarter, increasing 29% compared to the quarter ended December 2013.
Salon has been developing a strategy to produce editorial video content. In 2015, the company plans to roll out original video editorial programming focused on news, politics and entertainment, in order to add high quality diversified content to Salon.com, and to attract premium video advertising that commands higher CPMs compared to display advertising.
Salon provides brands with a dynamic platform for sharing an array of video assets through its traditional display advertising as well as its native advertising products. Video products are in high demand with advertisers, and in the past nine months approximately 50% of all Salon’s direct advertising included video assets. Video advertisers on Salon have included companies such as Siemens, AT&T, Amazon, Adobe, Cadillac, Infiniti, Lexus, Cole Haan, Warner Brothers, MSNBC, HBO, Showtime, FX, IFC, AMC, and National Geographic.
As part of its growing events program, Salon partnered with Happy Ending to host a live, ticketed event featuring readings by authors Lena Dunham and Andrew Solomon and a musical performance by Lucius in December 2014. Salon will continue to host live events focused on its editorial team and will collaborate with outside partners like Happy Ending to provide more live events for Salon readers.
Salon was awarded the Folio Award for best General Consumer Website "design and uncompromising journalism," and recognized as a Finalist in Editor & Publisher’s EPPY awards for the category “Best News Site with one million unique monthly visitors and over.”
“Salon continues to drive the national conversation," said Cynthia Jeffers, the CEO of Salon Media Group. "Our provocative and fearless coverage of the most timely current debates -- whether the Charlie Hebdo attack, the future of the Democratic Party, or our agenda-setting stories about the Bill Cosby scandal -- resulted in significant user growth. We look to expand further our user base as we explore the potential of video and other emerging storytelling platforms. Although 2014 was a challenging year in terms of monetizing our content, we are optimistic that more users and new platforms will help to improve our revenues in 2015."
About Salon Media Group
Salon Media Group (OTCQB: SLNM) operates the pioneering, award-winning news site, Salon.com. Salon.com covers breaking news, politics, culture, technology and entertainment through investigative reporting, fearless commentary and criticism, and provocative personal essays. Salon.com has been a leader in online media since the dawn of the digital age and has bureaus in San Francisco, New York City and Washington D.C.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are made as of the date of this press release based upon our current expectations. All statements, other than statements of historical fact, including, but not limited to, statements regarding our traffic, strategy, plans, objectives, expectations, intentions, financial performance, financing, economic conditions, editorial video content, on-line advertising, market performance, and revenue sources constitute “forward-looking statements.” The words “may,” “will,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “potential” or “continue” and similar types of expressions identify such statements, although not all forward-looking statements contain these identifying words. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause such differences include, but are not limited to:
- Our cash flows may not meet expectations
- Our reliance on related parties for significant operating and investment capital
- Our decline in revenues ad increased expenses
- Our principal stockholders exercise a controlling influence over our business affairs and may make business decisions with which non-principal stockholders disagree and may affect the value of their investment
- Our dependence on advertising sales for significant revenues
- The effect of online security breaches
- Our ability to promote the Salon brand to attract and retain users, advertisers and strategic partners
- Our ability to hire, integrate and retain qualified employees
- The impact of the potential loss of key personnel, including editorial staff
- The success of our efforts to protect our intellectual property or defend claims of infringement by third parties
- Our technology development efforts may not be successful in improving the functionality of our network
- Our reliance on third parties to provide necessary technologies
This press release should be read in conjunction with our Quarterly Report on Form 10-Q for the quarter ended December 31, 2014, filed with the SEC on February 13, 2015, and our Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed with the SEC on June 26, 2014, including the “Risk Factors” set forth in such reports, and our other reports currently on file with the Securities and Exchange Commission, which contain more detailed discussion of risks and uncertainties that may affect future results. We do not undertake to update any forward-looking statements except as otherwise required by law.
| SALON MEDIA GROUP, INC. | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (in thousands, except share and par value amounts) | ||||||
| December 31, | March 31, | |||||
| 2014 | 2014 (1) | |||||
| Assets | (Unaudited) | |||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 102 | $ | 119 | ||
| Accounts receivable, net of allowance of $60 | 1,181 | 1,475 | ||||
| Prepaid expenses and other current assets | 112 | 289 | ||||
| Total current assets | 1,395 | 1,883 | ||||
| Property and equipment, net | 62 | 54 | ||||
| Other assets, principally deposits | 302 | 96 | ||||
| Total assets | $ | 1,759 | $ | 2,033 | ||
| Liabilities and Stockholders' Deficit | ||||||
| Current liabilities: | ||||||
| Short-term borrowings | $ | 1,000 | $ | 1,000 | ||
| Related party advances | 5,126 | 2,791 | ||||
| Accounts payable and accrued liabilities | 1,239 | 1,210 | ||||
| Total current liabilities | 7,365 | 5,001 | ||||
| Deferred rent | 73 | 2 | ||||
| Total liabilities | 7,438 | 5,003 | ||||
| Commitments and contingencies | ||||||
| Stockholders’ deficit: | ||||||
|
Preferred Stock, $0.001 par value, 5,000,000 shares authorized, 1,075 shares issued and outstanding as of December 31, 2014 and March 31, 2014 (liquidation value of $2,478 as of December 31, 2014 and $2,426 as of March 31, 2014) |
- | - | ||||
|
Common stock, $0.001 par value, 150,000,000 shares authorized, 76,245,442 shares issued and outstanding as of December 31, 2014 and March 31, 2014 |
76 | 76 | ||||
| Additional paid-in capital | 115,781 | 115,605 | ||||
| Accumulated deficit | (121,536) | (118,651) | ||||
| Total stockholders' deficit | (5,679) | (2,970) | ||||
| Total liabilities and stockholders' deficit | $ | 1,759 | $ | 2,033 | ||
| (1) Derived from the Company’s audited consolidated financial statements. | ||||||
| SALON MEDIA GROUP, INC. | |||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| (unaudited) | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||
| Revenue, net | $ | 1,473 | $ | 1,877 | $ | 3,740 | $ | 4,637 | |||||
| Operating expenses: | |||||||||||||
| Production and content | 1,022 | 887 | 2,937 | 2,553 | |||||||||
| Sales and marketing | 477 | 473 | 1,342 | 1,377 | |||||||||
| Technology | 298 | 377 | 963 | 1,135 | |||||||||
| General and administrative | 469 | 430 | 1,354 | 1,012 | |||||||||
| Total operating expenses | 2,266 | 2,167 | 6,596 | 6,077 | |||||||||
| Loss from operations | (793) | (290) | (2,856) | (1,440) | |||||||||
| Interest expense | (10) | (9) | (29) | (28) | |||||||||
| Net loss | $ | (803) | $ | (299) | $ | (2,885) | $ | (1,468) | |||||
| Basic and diluted net loss per share | $ | (0.01) | $ | (0.00) | $ | (0.04) | $ | (0.02) | |||||
|
Weighted average shares used in computing basic and diluted net loss per share |
76,245 | 76,245 | 76,245 | 73,163 | |||||||||