- Company Projects Continued Growth for Full Fiscal Year -
The Company reported net sales of
'We continue to execute on our growth strategies for our core businesses
and expect to see both segment and consolidated top-line revenue growth in
this fiscal year,' said
'New initiatives designed to better manage our working capital are having
an impact,' said Mr. Weiner. 'During the quarter, we delivered cash flows from
operations of
'Simultaneously,' said Mr. Weiner, 'we continue to execute on our growth
strategies for our core businesses. In the Transactional TV segment, we have
entered into contracts with customers in
Financial Highlights
-- Adjusted EBITDA improved to
-- Video-on-demand Transactional TV segment revenue increased 15.2% as compared to the same prior year quarter due to strong performance on the largest multiple system operator in the U.S.
-- Pay-per-view Transactional TV segment revenue declined 5.7% as compared
to the same prior year quarter due to lower revenue from the second largest
direct broadcast satellite provider in the U.S. reflecting increased
competition on this platform. Revenue was also impacted by the disaffiliation
of a cable system in
-- Owned content revenue within the Film Production segment increased to
-- Cost of sales and operating expenses were slightly higher as compared to the same prior year quarter resulting from incremental costs incurred for the IPTV set-top box test.
-- Cash flows generated from operating activities were
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures as defined in Item
10 of Regulation S-K, including EBITDA and Adjusted EBITDA on a consolidated
basis for the three month periods ended
Conference Call Information
New Frontier Media, Inc. will be conducting its conference call and web cast
to discuss earnings today at
Cautionary Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements are based on current expectations, estimates and projections made by management. The Company intends for the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements. Words such as 'anticipates', 'expects', 'intends', 'plans', 'believes', 'seeks', 'estimates', or variations of such words are intended to identify such forward-looking statements. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by any forward-looking statements. All forward-looking statements made in this press release are made as of the date hereof, and the Company assumes no obligation to update the forward-looking statements included in this news release whether as a result of new information, future events, or otherwise. Please refer to the Company's most recent Form 10-K and other filings with the Securities and Exchange Commission ('SEC') for additional information regarding risks and uncertainties, including, but not limited to, the risk factors listed from time to time in such SEC reports. Copies of these filings are available through the SEC's electronic data gathering analysis and retrieval (EDGAR) system at http://www.sec.gov.
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is a leading producer and distributor of branded
television networks and on-demand programming. The Company delivers nine
full-time transactional adult-themed pay-per-view networks to cable and
satellite operators across
For more information about New Frontier Media, Inc. contact
Consolidated Operating Results
(in thousands, except per share amounts)
(Unaudited)
Quarter Ended June 30,
2008 2007
Net sales $13,061 $12,940
Cost of sales 3,929 3,797
Gross margin 9,132 9,143
Operating expenses 7,146 7,004
Operating income 1,986 2,139
Other income 22 236
Income before provision for income taxes 2,008 2,375
Provision for income taxes (829) (878)
Net income $1,179 $1,497
Basic income per share $0.05 $0.06
Diluted income per share $0.05 $0.06
Dividends declared per common share $- $0.13
Average outstanding shares of common stock 23,692 24,315
Common stock and common stock equivalents 23,735 24,594
EBITDA and Adjusted EBITDA
(Unaudited)
Quarter Ended June 30,
2008 2007
Net Income $1,179 $1,497
Adjustments:
Other income (22) (236)
Provision for income taxes 829 878
Depreciation and amortization 2,179 1,896
EBITDA 4,165 4,035
Cash paid for content(1) (1,389) (2,344)
Adjusted EBITDA $2,776 $1,691
(1) Amount includes total cash paid for prepaid distribution rights and
capitalized film costs.
Consolidated Balance Sheets
(in thousands)
June 30, 2008 March 31, 2008
Assets (Unaudited)
Current assets:
Cash and cash equivalents $16,395 $18,325
Restricted cash 110 38
Marketable securities 679 930
Accounts receivable, net 11,540 13,873
Deferred tax asset 627 620
Prepaid and other assets 1,512 1,899
Total current assets 30,863 35,685
Equipment and furniture, net 6,007 4,861
Prepaid distribution rights, net 10,538 10,381
Recoupable costs and producer advances 3,039 2,448
Film costs, net 7,350 7,626
Goodwill 18,608 18,608
Other identifiable intangible assets, net 3,057 3,033
Other assets 1,049 1,019
Total assets $80,511 $83,661
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $2,666 $2,937
Dividend payable - 2,982
Taxes payable 1,476 760
Producers payable 1,239 1,012
Deferred revenue 1,742 984
Accrued compensation 1,092 1,817
Deferred producer liabilities 2,018 2,862
Accrued liabilities and other 2,509 2,257
Total current liabilities 12,742 15,611
Deferred tax liability 776 795
Taxes payable 216 216
Other long-term liabilities 806 1,002
Total liabilities 14,540 17,624
Commitments and contingencies
Shareholders' equity:
Common stock 2 2
Additional paid-in capital 60,609 61,854
Retained earnings 5,370 4,191
Accumulated other comprehensive loss (10) (10)
Total shareholders' equity 65,971 66,037
Total liabilities and shareholders' equity $80,511 $83,661
Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Quarter Ended June 30,
2008 2007
Cash flows from operating activities:
Net income $1,179 $1,497
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 2,179 1,896
Tax benefit from option/warrant exercises - 119
Share-based compensation 257 275
Charge for asset disposition and impairment - 273
Changes in operating assets and liabilities
Accounts receivable 2,333 1,407
Accounts payable 46 (468)
Prepaid distribution rights (1,018) (815)
Capitalized film costs (371) (1,529)
Deferred revenue 758 90
Producers payable 227 (312)
Taxes receivable and payable, net 716 877
Deferred tax asset and liability, net (26) (271)
Accrued compensation (725) (2,091)
Other assets and liabilities, net (1,086) 152
Net cash provided by
operating activities 4,469 1,100
Cash flows from investing
activities:
Purchase of investments
available-for-sale (586) (2,681)
Redemption of investments
available-for-sale 837 1,724
Purchase of equipment and
furniture (1,662) (507)
Purchase of intangible assets (489) -
Payment of related party note
arising from business
acquisition (15) (528)
Net cash used in
investing activities (1,915) (1,992)
Cash flows from financing activities:
Proceeds from exercise of stock
options/warrants - 241
Purchase of common stock (1,502) -
Payment of dividend (2,982) (3,049)
Excess tax benefit from
option/warrant exercise - 1
Net cash used in
financing activities (4,484) (2,807)
Net decrease in cash and cash equivalents (1,930) (3,699)
Cash and cash equivalents, beginning of period 18,325 17,345
Cash and cash equivalents, end of period $16,395 $13,646
Segment Summary Data (1)
(In millions) (Unaudited)
Quarter Ended June 30,
2008 2007 % change
Net sales
Transactional TV $10.6 $10.4 2%
Film Production 2.0 2.1 -5%
Direct-to-Consumer 0.5 0.5 0%
Total net sales 13.1 12.9 2%
Cost of sales
Transactional TV 2.6 2.8 -7%
Film Production 0.9 0.8 13%
Direct-to-Consumer 0.4 0.2 #
Total cost of sales 3.9 3.8 3%
Operating expenses
Transactional TV 2.4 2.5 -4%
Film Production 1.3 1.5 -13%
Direct-to-Consumer 0.6 0.3 #
Corporate Administration 2.9 2.8 4%
Total operating expenses 7.1 7.0 1%
Operating income (loss)
Transactional TV 5.5 5.1 8%
Film Production (0.1) (0.2) 50%
Direct-to-Consumer (0.5) - #
Corporate Administration (2.9) (2.8) -4%
Total operating income $2.0 $2.1 -5%
(1) Amounts in this schedule may not sum due to rounding.
# Represents an increase or decrease in excess of 100%.
Supplemental Revenue Data (1)
(In millions) (Unaudited)
Quarter Ended June 30,
2008 2007 % change
Transactional TV
VOD $5.3 $4.6 15%
PPV 5.0 5.3 -6%
C-Band and other 0.2 0.5 -60%
Total $10.6 $10.4 2%
Film Production
Owned content $1.7 $1.4 21%
Repped content 0.3 0.5 -40%
Other 0.1 0.2 -50%
Total $2.0 $2.1 -5%
Direct-to-Consumer
Net membership $0.4 $0.4 0%
Other 0.1 0.1 0%
Total $0.5 $0.5 0%
(1) Amounts in this schedule may not sum due to rounding.
SOURCE New Frontier Media, Inc.
