Arena Group announces its second quarter results

Editor's note: TheStreet's parent company is The Arena Group (SAND) — a media company that boasts a portfolio of over 250 brands. For the benefit of our loyal audience here at TheStreet, we wanted to share our parent company’s latest financial results to give you transparency into our media business. Read excerpts from today’s press release below.

BUSINESS WIRE PRESS RELEASE

Arena Group announces financial results for the second quarter of 2024

The company highlights the success of its recent restructurings and the majority shareholder significantly increases its 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-cutting initiatives have been completed, resulting in an estimated annual cost elimination of more than $40 million,” said Sara Silverstein, CEO of The Arena Group. “As a result, our net losses have been significantly reduced, proving that we are on the right track.”

“We achieved positive Adjusted EBITDA in the current quarter and performance increased significantly in the April-June 2024 quarter,” he added. “Excluding non-recurring severance charges and higher legal fees, we would have turned profitable in June. We expect to be able to report further improvements to our shareholders in the second half of this year due to the continued phasing out of restructuring costs, increased operational efficiency and modest organic growth.”

Extension of credit line, increase in liquidity and termination of business combination agreement

“I want to be clear: I am more committed to The Arena Group today than ever before, particularly in light of the shift to profitability and the success of the new leadership in such a short period of time,” said Manoj Bhargava, owner of Simplify Inventions, LLC (“Simplify”).

Shortly after the opening of trading on Monday, August 19, 2024, The Arena Group’s Board of Directors and Simplify’s ownership finalized previously disclosed negotiations regarding 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 to the structures of both organizations. To increase the Company’s balance sheet strength and address liquidity concerns, Simplify has agreed to:

Increase the Company's existing $25 million credit facility with Simplify to $50 million;
Convert $15 million drawn from the credit facility into common equity based on today's 60-day volume weighted average share price (VWAP); and
Credit line 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 terminated its management of Sports Illustrated and the assets of Bridge Media have not performed as expected,” Ms. Silverstein continued. “As a result, the combination of The Arena Group and Bridge Media assets no longer made sense. We have finalized the business combination and will move forward as a significantly strengthened stand-alone company with the continued support of our majority shareholder, Simplify.”

While the extension and modification of the terms of the existing credit facility with Simplify increase liquidity and strengthen The Arena Group, these changes do not alleviate all of the conditions that raised substantial doubt about The Arena Group's ability to continue as a going concern as previously reported.

Second quarter business highlights

Vertical sportsThe new management team overhauled the Athlon Sports brand structure and business model, moving from a fixed-cost to a variable-cost model. Following the exit of the Sports Illustrated brand, the new framework achieved strong operational performance within six weeks. Traffic increased almost fourfold between Q1 and Q2 2024, reaching over 150 million page views. This represents an increase of over 600% year-on-year.

Vertical Finance:This vertical produced its best quarter on record by delivering a year-over-year increase of over 750% in page view traffic for the marketplaces team and diversifying and consolidating revenue streams through affiliate commerce, the relaunch of a new and improved TheStreet Pro subscription offering, and the launch of Come sail with me site and newsletter.

Vertical lifestyleThe company’s lifestyle vertical achieved its highest traffic on record in April and May and generated record vertical revenue. A continued focus on the health category resulted in significant 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.

Vertical Trade:Revenue growth in the commerce vertical accelerated in the current quarter, with the Company recording year-over-year increases in both content production and revenue compared to Q2 2023.

Vertical adventure:Traffic in the adventure sector nearly doubled year-over-year compared to the second quarter of 2023, although it remained stable compared to the first quarter of 2024. The company launched the first integrated campaign across digital, social media and video across all sites and published the instagram.com/p/C9fb0giJjxO/?hl=en&img_index=1″>first digital cover of Revista Masculina since March 2023.

Or view the BusinessWire press release.