TheStreet.com Reports Fourth-Quarter and Full-Year 2005 Financial Results; Achieves First Full Year of Profitability

Business Wire, Feb 9, 2006

NEW YORK -- TheStreet.com, Inc. (Nasdaq: TSCM), a leading provider of financial commentary, analysis and news, today announced its financial results for the fourth quarter and fiscal year ended 2005, which included full-year profitability for the first time in its history.

"We are extremely pleased to report profitability for the full year," said Thomas J. Clarke, Jr., chairman and chief executive officer of TheStreet.com. "With the closing of our securities research and brokerage business in June, our electronic publishing segment showed its strength with $5.8 million in earnings for the full year. With our subscription revenue of $6.5 million for the quarter and with our quarterly advertising revenue up 56% over the same period last year, we believe we are well positioned for a strong 2006."

Fourth-Quarter 2005 Results

--Net income for the quarter was $1.8 million, or $0.07 per share, a $1.0 million improvement over the same period last year and a $0.2 million improvement from last quarter.

--Net revenue was $10.0 million in the fourth quarter, a 25% increase over the same period last year and a 22% increase from last quarter.

--Total cash flow for the quarter was $2.5 million, a $1.5 million improvement over fourth quarter 2004 cash flow of $1.1 million and a $0.6 million improvement from last quarter's cash flow of $1.9 million.

--Deferred revenue was $9.9 million, a 36% increase over the same quarter last year and an increase of 6% from last quarter.

"Our focus in 2005 was on enhancing the subscriber experience and providing the most effective solutions for our advertisers," said James Lonergan, the Company's president and chief operating officer. "This was extremely effective both from a subscription and an advertising revenue standpoint as evidenced by our solid metrics. Furthermore, we began the expensing of stock options one quarter before the mandated date and still achieved full-year profitability, which confirms the strength of our business."

Full-Year 2005 Results

--Net revenue for the year was $33.7 million, a 10% increase over 2004.

--Net income for the year was $0.2 million, or $0.01 per share, an improvement of $2.4 million from the previous year.

--Income from continuing operations was $5.8 million, or $0.23 per share, an improvement of $2.1 million, or 59%, from the previous year.

--Cash flow totaled $1.9 million, a $1.7 million decrease over the 2004 cash flow of $3.6 million.

--Cash, restricted cash and investments stood at $34.0 million as of December 31, 2005, an improvement of 6% over the same period last year.

Revenue Streams

--Subscription revenue for the year totaled $23.1 million, a 3% increase over 2004. Subscription revenue for the fourth quarter 2005 was $6.5 million, an increase of 17% over the same quarter last year and a 12% increase from the third quarter. The number of subscribers to the Company's premium services increased by approximately 7,900, or 10%, during the quarter.

--Advertising revenue for the year totaled $9.5 million, a 35% increase over 2004. Fourth-quarter advertising revenue was $3.2 million, an increase of 56% over the same quarter in 2004 and a 51% increase from last quarter. The company's page views increased 20% in 2005 over the previous year, while the total average monthly unique visitors increased 32% to 3.0 million. In the fourth quarter, page views increased 43% over the year-ago period and 12% from the previous quarter. The total average monthly unique visitors in the quarter were 3.4 million, a 30% increase over the year-ago period, and an 8% sequential increase.

Operating Expenses

--Total expenses were $8.5 million in the fourth quarter 2005, an increase of 44% over the same period last year and a 21% increase from the third quarter.

--Total expenses equaled $28.8 million for 2005, an increase of $1.3 million, or 5%, from 2004.

--As of October 1, 2005, the Company adopted SFAS 123(R), prior to the mandatory adoption date of January 1, 2006. This statement requires that the costs resulting from all share-based payment transactions be recognized in the financial statements based upon estimated fair values. The adoption of this statement resulted in an additional $0.3 million non-cash compensation expense in the fourth quarter of 2005.

Company News

--The Company announced today that Lisa A. Mogensen, its chief financial officer, has resigned to pursue other interests. Ms. Mogensen will continue as CFO and assist in the transition of her responsibilities until the Company files its 2005 Annual Report on Form 10-K in mid-March. The Company has initiated a search for a new CFO and presently is evaluating candidates. "We thank Lisa for her contributions to TheStreet.com during her six years of service," said Thomas J. Clarke Jr., chairman and chief executive officer of TheStreet.com. "We wish her success in her future endeavors." Said Ms. Mogensen, "I have enjoyed my six years at TheStreet.com. It is now an appropriate time for me to seek new challenges and experiences. I wish Tom and the team continued success."