They had a strong earnings report Lars.
New Frontier Media Reports Record Second Quarter Results
BOULDER, Colo., Nov. 6 /PRNewswire-FirstCall/ -- New Frontier Media, Inc. (Nasdaq: NOOF - News), a leader in the electronic distribution of adult entertainment, announced record fiscal 2004 second quarter results for the quarter ended September 30, 2003. The Company reported net income for the quarter of $2.8 million, or $0.14 per share, as compared to a net loss of $1.0 million, or $0.05 per common share for the quarter a year ago. Net revenue for the current year quarter was $10.9 million compared to $9.3 million for the quarter a year ago, representing an increase of 17%.
The Company reported EBITDA (earnings before interest, taxes, depreciation and non-content related amortization) of $3.8 million for the quarter ended September 30, 2003, as compared to $0.2 million for the quarter ended September 30, 2002, determined prior to restructuring charges of $72,000 and $142,000, for the quarters ended September 30, 2003 and 2002, respectively, primarily related to the Internet Group.
Pay TV
The Company's Subscription/PPV TV Group ("Pay TV Group") reported revenue of $10.1 million for the quarter ended September 30, 2003, as compared to $7.1 million for the quarter ended September 30, 2002, which represents an increase of 42%. Of this, revenue from the Pay TV Group's Cable/DBS/Hotel services increased 62% from $5.2 million for the quarter ended September 30, 2002 to $8.4 million for the quarter ended September 30, 2003. This increase in Cable/DBS/Hotel revenue is related to an increase in the distribution of the Pay TV Group's video-on-demand ("VOD") service. The Pay TV Group's VOD service, branded as TEN*On Demand, is now distributed to 8.0 million VOD enabled cable households and 900,000 hotel rooms in the U.S. and Canada.
EBITDA for the Pay TV Group was $4.7 million for the quarter ended September 30, 2003, as compared to EBITDA of $1.9 million for the quarter ended September 30, 2002. Operating expenses declined from 30% of net revenue for the quarter ended September 30, 2002 to 19% for the quarter ended September 30, 2003, and overall operating expenses declined 18% from $2.2 million for the quarter ended September 30, 2002 to $1.8 million for the quarter ended September 30, 2003.
"We are very pleased to have achieved these second quarter results for our shareholders. VOD has become a strong growth driver for the Company and we continue to lead the adult content market for this service," stated Michael Weiner, President of New Frontier Media, Inc.
Internet Group
The Company's Internet Group reported net revenue of $0.8 million for the quarter ended September 30, 2003, as compared to $2.2 million for the quarter ended September 30, 2002, representing a decrease of 64%. Gross margin for the Internet Group increased to 62% for the current year quarter from 55% for the quarter a year ago. EBITDA for the Internet Group was $0.2 million for the quarter ended September 30, 2003 as compared to EBITDA of $0.4 million for the quarter ended September 30, 2002, representing a decrease of 50%. EBITDA was determined before restructuring charges of $72,000 and $142,000 for the quarters ended September 30, 2003 and 2002, respectively.
Corporate Administration Expenses
Corporate administration expenses declined to $1.1 million for the quarter ended September 30, 2003 from $2.1 million for the quarter ended September 30, 2002, representing a decrease of 48%. This decline is primarily related to a 93% decrease in legal fees. Legal fees for the quarter a year ago were unusually high as a result of the proxy fight and related litigation.
Future Outlook
As the Company continues to gain visibility, it is updating its guidance
for the fiscal year ending March 31, 2004 as follows:
-- The Company is updating its revenue guidance from $35 - 40 million to
$40 - 43 million
-- The Company is updating its net income guidance from $5 - 7 million or
$0.23 - $0.35 per share to $9.0 - $11.0 million or $0.39 - $0.49 cents
per share
Conference Call Information
New Frontier Media, Inc. will be conducting its conference call and web cast to discuss earnings today at 4:15 p.m. Eastern Time. The participant phone number for the conference call is (800)-218-0204. To participate in the web cast please log on to
www.noof.comand click on Investor Relations and then Webcasts & Events. A replay of the conference call will be available for seven days after 5:15 p.m. Eastern Time on November 6th at (800)-405-2236, access code 558509. The replay will also be archived for twelve months on the Corporate web site at
www.noof.com. This press release can be found on the Company's corporate web site,
www.noof.com, under Investor Relations/News Releases.
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. All statements related to the outcome of any contingencies are 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. 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. Please refer to the Company's Form 10-K and other filings with the 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 system (EDGAR) at
www.sec.gov .
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is a leading distributor of adult entertainment via electronic platforms. The Company delivers the most extensive lineup of quality programming over the broadest range of electronic means including cable, satellite, Broadband and video-on-demand.
The Erotic Networks(TM), the umbrella brand for the Company's subscription and pay television subsidiary, provides pay-per-view, video-on-demand, and subscription TV networks and services to over 54 million cable, DBS (direct broadcast satellite) and C-band households throughout North America. The Erotic Networks(TM) include Pleasure(TM), TEN(TM), TEN*Clips(TM), TEN*Xtsy(TM), TEN*Blue(TM), TEN*BluePlus(TM), TEN*Blox(TM), TEN*Max(TM) and TEN*On Demand(TM). These networks and services represent the widest variety of editing standards available and are programmed without duplication to offer the most extensive selection of adult network programming under a single corporate umbrella.