IDI Announces 2016 Second Quarter Financial and Operating Results

BOCA RATON, Fla.--(BUSINESS WIRE)--

IDI, Inc. (NYSE MKT: IDI), a data and analytics company, today reported revenue of $41.0 million and adjusted EBITDA of $3.1 million for the second quarter ended June 30, 2016.

"We are pleased to report yet another very strong quarter of revenue and adjusted EBITDA, continuing to drive growth and earnings while bringing innovative solutions to our markets," commented Derek Dubner, CEO of IDI. "As anticipated, we are seeing very strong demand across our risk markets and, in consumer marketing, we continue to see robust mobile revenue capture and strong trending in various growth verticals, including mobile apps. We are focused on building our technology and data assets to drive innovative solutions and to seize the enormous opportunities that lie before us."

Financial Highlights

Total revenue was $41.0 million, with our Information Services and Performance Marketing segments contributing $13.4 million and $27.6 million, respectively, for the second quarter 2016, compared to total revenue of $1.0 million, with our Information Services and Performance Marketing segments contributing $1.0 million and $0 million, respectively, for the second quarter 2015. Net cash provided by operating activities was $1.1 million for the six months ended June 30, 2016, compared to net cash used in operating activities of $4.5 million for the six months ended June 30, 2015. The Company reported a net loss of $7.2 million for the second quarter 2016, compared to a net loss of $45.5 million for the second quarter 2015. Adjusted EBITDA was $3.1 million for the second quarter 2016, compared to negative $1.3 million for the second quarter 2015. Cash and cash equivalents was $11.2 million as of June 30, 2016.

Use of Non-GAAP Financial Measures

Management evaluates the financial performance of our business on a variety of key indicators, including adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure equal to net loss, the most directly comparable financial measure based on US GAAP, plus net loss from discontinued operations, interest expense, income tax (benefit) expenses, depreciation and amortization, share-based payments, and other adjustments, as noted in the table below.

Conference Call

IDI, Inc. will host a conference call on Monday, August 8, 2016 at 4:30 PM ET to discuss its second quarter 2016 operating and financial results. To listen to the conference call on your telephone, please dial (844) 287-6625 for domestic callers or (574) 990-1020-2308 for international callers and use passcode: 59915675. To access the live audio webcast, visit the IDI website at www.ididata.com. Please login at least 15 minutes prior to the start of the call to ensure adequate time for any downloads that may be required. Following completion of the earnings call, a recorded replay of the webcast will be available for those unable to participate. To listen to the telephone replay, please dial (855) 859-2056 or (404) 537-3406 with the replay passcode 59915675. The replay will also be available for one week on the IDI website at www.ididata.com.

About IDI, Inc.

At IDI, we believe that time is your most valuable asset. Through powerful analytics, we transform data into intelligence, in a fast and efficient manner, so that our clients can spend their time on what matters most – running their organizations with confidence. Through leading-edge, proprietary technology and a massive data repository, our data and analytical solutions harness the power of data fusion, uncovering the relevance of disparate data points and converting them into comprehensive and insightful views of people, businesses, assets and their interrelationships. We empower clients across markets and industries to better execute all aspects of their business, from managing risk, conducting investigations, identifying fraud and abuse, and collecting debts, to identifying and acquiring new customers. At IDI, we are dedicated to making the world a safer place, to reducing the cost of doing business, and to enhancing the consumer experience.

RELATED LINKS: http://www.ididata.com and http://www.fluentco.com

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "plans," "projects," "will," "may," "anticipate," "believes," "should," "intends," "estimates," and other words of similar meaning. Such forward looking statements include statements about continuing to see very strong demand across our risk markets, continuing to see robust mobile revenue capture and strong trending in various growth verticals, including mobile apps. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed above together with the additional factors under the heading "Forward-Looking Statements" and "Risk Factors" in the Company's Annual Report on Form 10-K, as may be supplemented or amended by the Company's Quarterly Reports on Form 10-Q and other SEC filings. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

IDI, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) (unaudited)
			June 30, 2016				December 31, 2015
ASSETS:
Current assets:
Cash and cash equivalents			$	11,233			$	13,462
Accounts receivable, net of allowance for doubtful accounts of $513 and $318 at June 30, 2016 and December 31, 2015, respectively				24,766				21,224
Prepaid expenses and other current assets				2,125				2,931
Total current assets				38,124				37,617
Property and equipment, net				1,499				1,062
Intangible assets, net				104,361				87,445
Goodwill				166,083				161,753
Other non-current assets				2,021				1,315
Total assets			$	312,088			$	289,192
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Trade accounts payable			$	10,986			$	8,863
Accrued expenses and other current liabilities				9,136				9,160
Deferred revenue				344				783
Current portion of long-term debt				2,250				2,250
Total current liabilities				22,716				21,056
Promissory notes payable to certain shareholders, net				10,137				9,618
Long-term debt, net				38,227				39,050
Contingent consideration payable in stock				10,000				-
Deferred tax liabilities				7,090				13,573
Total liabilities				88,170				83,297
Shareholders' equity:
Convertible Series A preferred stock—$0.0001 par value 10,000,000 shares authorized; 0 and 4,871,802 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively				-				-
Convertible Series B preferred stock—$0.0001 par value 10,000,000 shares authorized; 0 and 450,962 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively				-				-
Common stock—$0.0005 par value 200,000,000 shares authorized; 50,700,356 and 15,709,786 shares issued at June 30, 2016 and December 31, 2015, respectively; and 50,645,144 and 15,709,786 shares outstanding at June 30, 2016 and December 31, 2015, respectively				25				8
Treasury stock, at cost, 55,212 and 0 shares at June 30, 2016 and December 31, 2015, respectively				(272	)			-
Additional paid-in capital				323,266				291,032
Accumulated deficit				(99,101	)			(85,145	)
Total shareholders' equity				223,918				205,895
Total liabilities and shareholders' equity			$	312,088			$	289,192

IDI, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Amounts in thousands, except share data) (unaudited)
			Three Months Ended										Six Months Ended
			June 30,										June 30,
			2016					2015					2016					2015
Revenue			$	41,043				$	994				$	80,467				$	2,252
Cost of revenues (exclusive of depreciation and amortization)				29,557					424					58,051					978
Gross profit				11,486					570					22,416					1,274
Operating expenses:
Sales and marketing expenses				3,179					472					6,305					1,005
General and administrative expenses				13,167					3,773					26,534					5,472
Depreciation and amortization				2,996					41					5,605					76
Loss from operations				(7,856	)				(3,716	)				(16,028	)				(5,279	)
Other income (expense):
Interest expense, net				(1,856	)				-					(3,681	)				-
Other expenses, net				(976	)				-					(1,273	)				-
Total other expense				(2,832	)				-					(4,954	)				-
Loss from continuing operations before income taxes				(10,688	)				(3,716	)				(20,982	)				(5,279	)
Income taxes				(3,504	)				265					(7,026	)				265
Net loss from continuing operations				(7,184	)				(3,981	)				(13,956	)				(5,544	)
Discontinued operations:
Pretax loss from operations of discontinued operations				-					(1,171	)				-					(1,262	)
Pretax loss on disposal of discontinued operations				-					(41,471	)				-					(41,471	)
Income taxes				-					127					-					127
Net loss from discontinued operations				-					(42,769	)				-					(42,860	)
Less: Non-controlling interests				-					(1,280	)				-					(1,297	)
Net loss from discontinued operations attributable to IDI				-					(41,489	)				-					(41,563	)
Net loss attributable to IDI			$	(7,184	)			$	(45,470	)			$	(13,956	)			$	(47,107	)
Loss per share
Basic and diluted
Continuing operations			$	(0.15	)			$	(0.29	)			$	(0.37	)			$	(0.52	)
Discontinued operations				-					(2.99	)				-					(3.88	)
			$	(0.15	)			$	(3.27	)			$	(0.37	)			$	(4.40	)
Weighted average number of shares outstanding -
Basic and diluted				48,084,608					13,896,948					37,776,411					10,710,334
Comprehensive loss:
Net loss attributable to IDI, Inc.			$	(7,184	)			$	(45,470	)			$	(13,956	)			$	(47,107	)
Foreign currency translation adjustment				-					(136	)				-					(130	)
Net comprehensive loss			$	(7,184	)			$	(45,606	)			$	(13,956	)			$	(47,237	)

IDI, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands, except share data) (unaudited)
			Six Months Ended June 30,
			2016					2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to IDI			$	(13,956	)			$	(47,107	)
Less: Loss from discontinued operations, net of tax				-					(41,563	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization				5,605					76
Non-cash interest expenses and related amortization				1,202					-
Share-based payments				14,623					1,971
Non-cash loss on exchange of warrants				1,273					-
Provision (recovery) for bad debts				195					(84	)
Deferred income tax (benefit) expenses				(7,039	)				265
Changes in assets and liabilities of continuing operations, net of the effects of acquisition:
Accounts receivable				869					(172	)
Prepaid expenses and other current assets				968					(554	)
Other non-current assets				(706	)				-
Trade accounts payable				(174	)				-
Accrued expenses and other current liabilities				(1,227	)				(95	)
Amounts due to related parties				-					(18	)
Deferred revenue				(491	)				(17	)
Net cash provided by (used in) operating activities from continuing operations				1,142					(4,172	)
Net cash used in operating activities from discontinued operations				-					(337	)
Net cash provided by (used in) operating activities				1,142					(4,509	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment				(577	)				(536	)
Capitalized costs included in intangible assets				(5,902	)				(1,319	)
Proceeds from reverse acquisition				-					3,569
Acquisition, net of cash acquired				(50	)				-
Net cash (used in) provided by investing activities from continuing operations				(6,529	)				1,714
Net cash used in investing activities from discontinued operations				-					(121	)
Net cash (used in) provided by investing activities				(6,529	)				1,593
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares, net of issuance costs				4,664					-
Debt costs				(381	)				-
Repayments of long-term debt				(1,125	)				-
Net cash provided by financing activities				3,158					-
Net decrease in cash and cash equivalents			$	(2,229	)			$	(2,916	)
Cash and cash equivalents at beginning of period				13,462					5,996
Cash and cash equivalents at end of period			$	11,233				$	3,080
SUPPLEMENTAL DISCLOSURE INFORMATION
Cash paid for interest			$	2,510				$	-
Cash paid for income taxes			$	-				$	-
Share-based compensation expenses capitalized in intangible assets			$	499				$	130
Issuance of common stock to a vendor for services rendered			$	131				$	-
Treasury stock resulting from shares withheld to pay statutory taxes in connection with the vesting of restricted stock units			$	272				$	-
Fair value of acquisition consideration			$	21,206				$	44,112

Use of Non-GAAP Financial Measures

Management evaluates the financial performance of our business on a variety of key indicators, including adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure equal to net loss, the most directly comparable financial measure based on US GAAP, plus net loss from discontinued operations, interest expense, income tax (benefit) expenses, depreciation and amortization, share-based payments, and other adjustments, as noted in the table below.

			Three Months Ended										Six Months Ended
			June 30,										June 30,
(In thousands)			2016					2015					2016					2015
Net loss attributable to IDI			$	(7,184	)			$	(45,470	)			$	(13,956	)			$	(47,107	)
Net loss from discontinued operations attributable to IDI				-					41,489					-					41,563
Interest expense, net				1,856					-					3,681					-
Income tax (benefit) expenses				(3,504	)				265					(7,026	)				265
Depreciation and amortization				2,996					41					5,605					76
Share-based payments				7,245					1,910					14,623					1,971
Non-cash loss on exchange of warrants				976					-					1,273					-
Acquisition-related costs				525					258					577					300
Non-recurring litigation costs				191					160					714					745
Adjusted EBITDA			$	3,101				$	(1,347	)			$	5,491				$	(2,187	)

View source version on businesswire.com: http://www.businesswire.com/news/home/20160808005304/en/