 SANTA MONICA, Calif., July 30, 2020 GLOBE NEWSWIRE -- Leaf Group Ltd. NYSE: LEAF, a diversified consumer internet company, today reported financial results for the second quarter ended June 30, 2020. Unaudited Financial Summary In thousands, except per share amounts Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 Marketplaces revenue Society6 Group revenue 34,665 15,203 50,658 32,201 Saatchi Art Group revenue 3,982 3,986 6,730 7,826 Total Marketplaces revenue 38,647 19,189 57,388 40,027 Media revenue 12,321 16,600 26,445 29,800 Total revenue 50,968 35,789 83,833 69,827 Net income loss 803 6,762 9,873 17,048 EPS - basic 0.03 0.26 0.37 0.66 EPS - diluted 0.03 0.26 0.37 0.66 Adjusted EBITDA1 2,102 1,936 3,275 7,565 Net cash provided by used in operating activities 7,909 5,885 4,029 12,848 Free cash flow1 6,194 7,639 606 16,209 1These non-GAAP financial measures, and reasons for why the Company believes these non-GAAP financial measures are useful, are described below and reconciled to their most directly comparable GAAP measures in the accompanying tables. Q2 2020 Financial Summary:Leaf Group is comprised of two reporting segments: Marketplaces and Media.For the second quarter of 2020: Total revenue increased 42 year-over-year from 35.8 million to 51.0 million due to a 101 increase in Marketplaces revenue, partially offset by a 26 decrease in Media revenue. Marketplaces revenue increased 101 year-over-year from 19.2 million to 38.6 million, reflecting a 128 increase in Society6 Group revenue and flat Saatchi Art Group revenue year-over-year. Media revenue decreased 26 year-over-year from 16.6 million to 12.3 million. This decrease was primarily attributable to a 23 decrease in visits and a 4 decrease in RPV, partially offset by a 37 increase in revenue for OnlyInYourState. On a pro forma basis after giving effect to the Hearst Transaction, visits decreased by 9 and RPV decreased by 18 year-over-year.1 Net income was 0.8 million for the quarter, increasing 7.6 million year-over-year, and Adjusted EBITDA was 2.1 million for the quarter, reflecting an improvement of 4.0 million year-over-year. The increase in net income for the quarter is primarily attributable to improved operating performance and the 3.8 million gain resulting from the Hearst Transaction.1 Cash and cash equivalents was 27.9 million at period end with 11.1 million in debt outstanding including 7.1 million from the Paycheck Protection Program and 4.0 million drawn on our revolving credit facility. On a consolidated basis, Leaf Groups properties reached over 61 million monthly unique visitors in the United States in June 2020 source: June 2020 U.S. comScore.___1On April 24, 2020, Leaf Group entered into an Asset Sale and Services Agreement with Hearst Newspapers Hearst, pursuant to which the Company sold to Hearst a library of content carried on certain websites that had been hosted by the Company on behalf of Hearst for 9.5 million, of which 4.0 million was paid at signing the Hearst Transaction. As of April 25, 2020, the Company is no longer including visits to the sites migrated or to be migrated to Hearst in the Hearst Transaction in its media metrics. Unaudited Operating Metrics: Three months ended Six months ended June 30, June 30, 2020 2019 Change 2020 2019 Change Marketplaces Metrics: Number of Transactions1 574,744 232,124 148 847,941 529,369 60 Gross Transaction Value2 in thousands 50,833 25,048 103 77,469 52,185 48 Media Metrics3: Visits per Google Analytics4 in thousands 584,547 756,938 23 1,237,655 1,458,073 15 Revenue per Visit RPV5 21.08 21.93 4 21.37 20.44 5 Pro forma Visits per Google Analytics46 in thousands 538,566 594,114 9 1,063,382 1,142,311 7 Pro forma Revenue per Visit RPV56 22.88 27.94 18 24.87 26.09 5 1Number of transactions is defined as the total number of Marketplaces transactions successfully completed by a customer during the applicable period, excluding certain transactions generated by Saatchi Arts The Other Art Fair, such as sales of stand space to artists at fairs, sponsorship fees and ticket sales. 2Gross transaction value is defined as the total dollar value of Marketplaces transactions, excluding the revenue from certain transactions generated by Saatchi Arts The Other Art Fair, such as sales of stand space to artists at fairs, sponsorship fees and ticket sales. Gross transaction value is the total amount paid by the customer including the total product price inclusive of artist margin, shipping charges, sales taxes, and is net of any promotional discounts. Gross transaction value does not reflect any subsequent cancellations, refunds or credits and does not represent revenue earned by the Company. 3Media Metrics include visits and revenue generated by OnlyInYourState subsequent to its acquisition in February 2019. From April 25, 2020 onwards, Media Metrics exclude visits generated by certain domains no longer under our control as a result of the Hearst Transaction. 4Visits per Google Analytics is defined as the total number of times users access the Companys content across a one of its owned and operated properties andor b one of its customers properties, to the extent that the visited customer web pages are hosted by the Company. In each case, breaks of access of at least 30 minutes constitute a unique visit. Additionally, a visit is also considered to have ended at midnight or if a user arrives via one campaign, leaves, and then comes back via a different campaign. 5RPV is defined as Media revenue per one thousand visits. 6Pro forma Visits and Pro forma Revenue per Visit exclude visits generated by certain domains no longer under our control as a result of the Hearst Transaction for all periods reported. The number of visits is derived from Google Analytics. Shareholder Letter and Conference Call InformationLeaf Groups detailed Shareholder Letter is available at Group will host a corresponding conference call to answer questions today at 5:00 p.m. Eastern time 2:00 p.m. Pacific time. To access the conference call, dial 833-502-0482 U.S.CAN or 778-560-2575 International and reference conference ID 3182118. To participate on the live call, analysts should dial-in at least 10 minutes prior to the commencement of the call. A live webcast also will be available on the Investor Relations section of Leaf Groups corporate website at and via replay beginning approximately two hours after the completion of the call. Use of Non-GAAP Financial Measures To supplement its consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States of America GAAP, Leaf Group uses certain non-GAAP financial measures, as described below. These non-GAAP financial measures are presented to enhance the users overall understanding of Leaf Groups financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The non-GAAP financial measures presented in this release, together with the GAAP financial results, are the primary measures used by the Companys management and board of directors to understand and evaluate the Companys financial performance and operating trends, including period-to-period comparisons, because they exclude certain expenses and gains that management believes are not indicative of the Companys core operating results. Management also uses these measures to prepare and update the Companys short and long term financial and operational plans, to evaluate investment decisions, and in its discussions with investors, commercial bankers, equity research analysts and other users of the Companys financial statements. Accordingly, the Company believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Companys operating results in the same manner as the Companys management and in comparing operating results across periods and to those of Leaf Groups peer companies.The use of non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense, or cash flows, that affect the Companys financial performance and operations. An additional limitation of non-GAAP financial measures is that they do not have standardized meanings, and therefore other companies, including peer companies, may use the same or similarly named measures but exclude or include different items or use different computations. Management compensates for these limitations by reconciling these non-GAAP financial measures to their most comparable GAAP financial measures in the tables captioned Reconciliations of Non-GAAP Financial Measures included at the end of this release. Investors and others are encouraged to review the Companys financial information in its entirety and not rely on a single financial measure. 