TheStreet.com Reports First-Quarter 2005 Financial Results; Net Revenu

TheStreet.com Reports First-Quarter 2005 Financial Results; Net Revenue Increases 13 Percent over Prior Year; Core Electronic Publishing Segment Reports Fourth Consecutive Quarterly Profit

    Business Editors

    NEW YORK--(BUSINESS WIRE)--April 28, 2005--TheStreet.com, Inc. (TSCM:Nasdaq), a leading provider of financial commentary, analysis, research and news, announced its financial results for the first quarter 2005, which included gains of 48% and 46%, respectively, in advertising and commission revenue over the prior year.

    Net revenue in the first quarter increased 13% over the same period last year to $8.9 million.

    "We are very pleased to report that our strategy of developing multiple revenue streams has enabled the company to increase its net revenue in the quarter over the prior year," said Thomas J. Clarke, Jr., chairman and chief executive officer of TheStreet.com. "Our net revenue gains came primarily from two sources, advertising and commission. Our advertising revenue of $2.1 million was the highest quarterly total for the Company since the third quarter of 2000. Just two years ago, the Company had no commission revenue, but in the first quarter, commission revenue totaled $1.1 million."

    First-Quarter 2005 Results

--	Net income for the quarter in the Company's core Electronic Publishing segment was $981,000, an improvement of $1.2 million over the same period last year and a 55% decrease from last quarter.
--	Deferred revenue was $7.9 million, a 3% decrease over the same period last year and an increase of 8% from last quarter.
--	Net loss for the quarter was ($854,000), or ($0.03) per share, a 46% improvement over the same period last year and a reduction of $1.6 million from the previous quarter's net income.
--	Total cash burn for the quarter was ($3.6) million, attributed to normal fluctuations in working capital balances.
--	Cash, restricted cash and investments stood at $28.5 million as of March 31, 2005, a 5% decrease over the same period a year ago and an 11% decrease from last quarter. The company has no bank debt.

    "Our core Electronic Publishing segment continues to perform well," said Lisa A. Mogensen, chief financial officer of TheStreet.com. "This marks the fourth consecutive quarter of profitability for our core business. This strength will allow us to continue to explore and build upon our solid revenue base with opportunities such as the addition of video programming capabilities, which are attractive to national advertisers."

    Revenue Streams

    Electronic Publishing Segment

    -- Advertising revenue for the quarter totaled $2.1 million, a
    48% increase over the same period a year ago and a 3% increase
    from last quarter, traditionally the strongest advertising
    quarter of the year.

    -- Subscription revenue for the quarter totaled $5.4 million,
    essentially flat with the same period a year ago and a 3%
    decrease from the previous quarter.

    -- Subscription bookings for the quarter totaled $6.0 million, a
    decrease of 10% over the same period last year and a 21%
    increase from last quarter.

    Securities Research and Brokerage Segment (IRG Research)

    -- Commission revenue totaled $1.1 million, an increase of 46%
    over the same period last year and a 25% decrease from last
    quarter, traditionally the strongest quarter of the year
    industry-wide for commission revenue.

    "We continue to believe that we will see strong advertising and commission revenue opportunities for the remainder of the year," said Clarke. "We will continue to balance this demand with our subscription offerings to find the right mix of free versus paid content to maximize revenue."

    Operating Expenses

    -- Total expenses for the quarter were $10.0 million, a 4%
    increase over the same period last year and a 12% increase
    from the previous quarter.

    Recent Company Highlights

    Electronic Publishing Segment

    -- We entered into advertising agreements with 10 new advertisers
    to TheStreet.com Network in the first quarter, which included
    companies both endemic and non-endemic to the financial
    category. This base of advertisers provides us an extremely
    healthy platform to best leverage increased traffic and
    advertising inventory over future quarters.

    -- TheStreet.com won the 2005 Society of American Business
    Editors and Writers (SABEW) Award for Enterprise Journalism,
    the second consecutive award for the Company in this category.
    The award marks the Company's fourth citation for journalistic
    excellence so far this year, and its 12th citation in the past
    four years. Each year SABEW sponsors a competition open to all
    newspapers and electronic media in the U.S. to recognize
    excellence in business journalism.

    -- The Company launched The Technology Report, the first service
    that combines three comprehensive elements: daily alerts, a
    weekly portfolio summary and a monthly newsletter, in a
    continuing effort to expand the offerings of its Electronic
    Publishing segment.

    -- Our ability to offer cross venue advertising opportunities
    through TheStreet.com Network, which includes our site
    inventory online, e-mail database, video programming and Jim
    Cramer's RealMoney radio broadcasts, has allowed us to offer
    advertisers more options and enabled the Company to increase
    revenue per advertising agreement. We have expanded our
    relationship with key advertisers during the quarter to
    include either radio broadcasting or video programming
    advertising.

    -- "Jim Cramer's RealMoney," the nationally syndicated financial
    radio program, continues to expand its listening audience and
    is now heard in all of the top ten Arbitron Metro rated
    markets. It is now heard on over 110 stations nationally.

    Securities Research and Brokerage Segment (IRG Research)

    -- IRG Research initiated coverage on 17 stocks during the
    quarter, bringing the total number of companies under coverage
    to 92. IRG Research continued to build out its research staff
    with the addition of three senior analysts covering the
    Biotech, Leisure, and Aerospace and Defense sectors. The total
    number of research analysts at IRG Research has increased to
    12.

    -- IRG Research opened 32 new institutional accounts in the first
    quarter, which enabled the segment to increase its revenue 46%
    over the year ago period.

    "While we are mindful of the challenging operating environment, our strong revenue performance at IRG Research reaffirms our commitment to investment in this business segment while maintaining strong operating discipline," said Clarke.

    TheStreet.com will conduct a conference call today, April 28, 2005, at 11:00 a.m. EST to discuss these results. The Company welcomes all interested parties to listen to the Web cast of its call at http://www.thestreet.com/earnings.

    About TheStreet.com, Inc.

    TheStreet.com, Inc. (Nasdaq: TSCM) is a leading provider of investment commentary, analysis and news. Founded in 1996, the Company completed its initial public offering in May 1999. On the Internet, its premium, subscription-based Web site, "RealMoney.com" is accompanied by the professionally oriented subscription sites, "Street Insight," "RealMoney Pro Advisor," and the free, flagship site, "TheStreet.com." The Company also produces a suite of subscription services for use by professionals and self-directed investors, each designed to help a specific segment of the investing public make better-informed investing and trading decisions. TheStreet.com's wholly owned subsidiary, Independent Research Group LLC (IRG Research), develops independent research and services focused exclusively on meeting the performance needs of hedge funds and money managers. IRG Research's proprietary equity research provides in-depth, action-oriented investment ideas from its in-house, top-tier industry analysts, without the conflicts created by investment banking, underwriting and proprietary trading.

    "Cash flow" or "cash burn," as used in this news release, means the increase or decrease, as applicable, in the Company's cash, investments and restricted cash from the prior period. TheStreet.com believes that this non-GAAP financial measure is an important indicator of the Company's financial results because it focuses on the creation, or lack thereof, of cash driven by operating manager's performance. This measure is used by our chief operating decision maker to make decisions about resource allocations within the Company and to assess overall performance, and is among the primary measures used by management for planning and forecasting of future periods. Since TheStreet.com has historically reported this non-GAAP result to the investment community, the Company believes the inclusion of this non-GAAP financial measure provides consistency in our financial reporting. The Company further believes that the use of the terms "cash flow" and "cash burn" allow investors to view financial performance in a manner similar to the method used by the Company's management, which helps improve their ability to understand the Company's operating performance.

For the Quarter Ended $ in Millions March 31, Dec. 31, March 31, 2005 2004 2004 -------------------------------- Total cash flow ($3.6) $1.1 $1.5 Decrease in restricted cash - 0.3 - Decrease in short term investments - 2.0 2.0 -------------------------------- Change in cash and cash equivalents ($3.6) $3.4 $3.5 ================================

    Statements contained in this news release not related to historical facts may be deemed forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties (described in the Company's SEC filings), which could cause actual results to differ.

THESTREET.COM, INC. BALANCE SHEETS ($ in thousands)

March December 31, 2005 31, 2004 ----------- ----------- ASSETS Current Assets: Cash and restricted cash $ 26,998 $ 30,570 Accounts receivable - net 2,207 1,632 Other receivables 89 100 Prepaid expenses and other current assets 1,087 1,186 ---------- ---------- Total current assets 30,381 33,488

Property and equipment - net 2,430 2,529 Other assets 70 71 Goodwill and intangibles - net 3,442 2,484 Restricted cash 1,505 1,505 ---------- ---------- Total assets $ 37,828 $ 40,077 ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses $ 4,065 $ 6,913 Deferred revenue 7,906 7,311 Note payable 98 96 Other current liabilities 883 116 ---------- ---------- Total current liabilities 12,952 14,436 Note payable 100 125 Other liabilities 190 133 ---------- ---------- Total liabilities 13,242 14,694 ---------- ----------

Stockholders' Equity: Stockholders' equity 24,586 25,383 ---------- ----------

Total liabilities and stockholders' equity $ 37,828 $ 40,077 ========== ==========

Note: The Company has pledged certain cash amounts as security deposits for operating leases. Accordingly, a portion of this cash is now classified as a noncurrent asset, and our cash is classified in two places on the above balance sheet.

Cash and restricted cash $ 26,998 $ 30,570 Restricted cash 1,505 1,505 ---------- ---------- Total cash, current and noncurrent restricted cash $ 28,503 $ 32,075 ========== ==========

THESTREET.COM, INC. STATEMENTS OF OPERATIONS ($ in thousands, except per share data)

For the Three Months Ended March 31, --------------------------- 2005 2004 ------------- -------------

Net revenue: Subscription $ 5,427 $ 5,409 Advertising 2,106 1,428 Commission 1,137 777 Other 272 306 ------------ ------------ Total net revenue 8,942 7,920 ------------ ------------

Operating expense: Cost of services 4,018 4,077 Sales and marketing 3,254 3,081 General and administrative 2,454 2,189 Depreciation and amortization 233 212 ------------ ------------ Total operating expense 9,959 9,559 ------------ ------------

Interest income, net 163 71 ------------ ------------

Net loss $ (854) $ (1,568) ============ ============

Net loss per share - basic and diluted: $ (0.03) $ (0.06) ============ ============

Weighted average basic and diluted shares outstanding 24,714 24,240 ============ ============

--30--JM/ny*

CONTACT: TheStreet.com Tina Lewis, 212-321-5256 tina.lewis@thestreet.com

KEYWORD: NEW YORK INDUSTRY KEYWORD: PUBLISHING BANKING EARNINGS CONFERENCE CALLS SOURCE: TheStreet.com, Inc.

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