Editor's note: TheStreet's parent company is The Arena Group (AREN) — a media company that has a portfolio of over 250 brands. In the interest of our loyal audience here at TheStreet, we wanted to share our parent company's latest financial results so you have transparency into our media business. Read excerpts from today's press release below.
PRESS RELEASE FROM BUSINESS WIRE
The Arena Group Reports 2024 Second Quarter Financial Results
Company Highlights Success of Recent Restructurings, Majority Shareholder Significantly Increases Financial Commitment for Future Growth
NEW YORK – August 19, 2024 – The Arena Group Holdings, Inc. (NYSE American: AREN), today provided an operational update and reported financial results for the three months ended June 30, 2024.
Management Commentary
“Nearly all of our cost reduction initiatives are complete, leading to an expected over $40 million in eliminated costs on an annual basis,” commented Sara Silverstein, The Arena Group’s Chief Executive Officer. “As a result, our net losses significantly narrowed, demonstrating that we are on the right path.”
“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 The Arena Group today as I have ever been, particularly in light of the shift towards profitability and the success of new leadership in such a short period of time,” commented Manoj Bhargava, owner of Simplify Inventions, LLC (“Simplify”).
Shortly after the opening of business on Monday August 19, 2024, the Board of Directors of The Arena Group, and the ownership of Simplify finalized previously disclosed negotiations around alternative structures or options to the business combination agreement. As a result, The Arena Group and Simplify mutually agreed to terminate the business combination agreement in light of changes in the structures of both organizations. To increase the strength of the Company’s balance sheet and to address liquidity concerns, Simplify has agreed to:
- 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, The Arena Group has ended its management of Sports Illustrated and the Bridge Media assets have not performed to expectations,” continued Ms. Silverstein. “As a result, combining the assets of The Arena Group and Bridge Media no longer made sense. We have terminated the business combination and will move forward as a significantly strengthened stand-alone company with the continued support of our majority shareholder, Simplify.”
Though the expansion and modification of terms on the existing line of credit with Simplify increase liquidity and strengthen The Arena Group, these changes do not alleviate all conditions that raised substantial doubt about The Arena Group’s ability to continue as a going concern as previously disclosed.
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.
Read more about Arena Group's Second Quarter 2024 Financial Results.
