EXHIBIT 99.1
[LOGO]
NEW FRONTIER MEDIA
For Immediate Release
Contact: Karyn Miller, CFO
(303) 444-0900 x 102
kmiller@noof.com
New Frontier Media Announces Quarterly Net
Income of $2.0 million or 10 cents per share
BOULDER, COLORADO, August 11, 2003 -- New Frontier Media, Inc. (Nasdaq: NOOF), a
leader in the electronic distribution of adult entertainment, today announced
results for its fiscal first quarter ended June 30, 2003. The Company reported
net income for the quarter of $2.0 million, or $0.10 per share, as compared to a
net loss of $5.6 million, or $0.27 per common share for the quarter a year ago.
Net revenue for the current year quarter was $10.1 million, a 5% increase
compared to $9.6 million for the quarter ended June 30, 2002.
The Company reported EBITDA (earnings before interest, taxes, depreciation and
non-content related amortization) of $2.8 million for the quarter ended June 30,
2003, as compared to an EBITDA loss of $0.2 million for the quarter ended June
30, 2002, determined prior to restructuring and other non-cash charges of $3.6
million, primarily related to the Internet Group.
PAY TV GROUP
The Company's Subscription/PPV TV Group ("Pay TV Group") reported revenue of
$9.1 million for the quarter, an increase of 23% from revenue of $7.0 million
for the quarter ended June 30, 2002. Revenue from the Pay TV Group's Cable/DBS
services increased 44% from $5.0 million for the quarter ended June 30, 2002 to
$7.2 million for the quarter ended June 30, 2003. This increase in revenue is
related to an increase in the distribution of the Pay TV Group's video-on-demand
("VOD") service and an increase in the distribution of its partially edited
pay-per-view services. Total network households at the end of the quarter were
49.0 million, representing an increase of 54% from a year ago. The Pay TV
Group's TEN*On Demand service is now distributed to 7.0 million VOD enabled
households, representing 95% of all available VOD households where adult content
is deployed.
The Pay TV Group's gross margin increased to 62% for the quarter ended June 30,
2003, up from 51% for the quarter ended June 30, 2002. Additionally, operating
expenses as a percentage of revenue declined to 23% of revenue for the current
year quarter, down from 29% for the quarter a year ago. Overall operating
expenses increased 5% year over year for the quarter, from $2.0 million to $2.1
million.
"We are very pleased with the Company's performance over the last two quarters.
We are now experiencing the true scalability of this business as we see over 70%
of our incremental Pay TV revenue dropping to the bottom line," said Michael
Weiner, President of New Frontier Media, Inc.
INTERNET GROUP
The Company's Internet Group reported net revenue of $1.0 million for the
quarter ended June 30, 2003, as compared to $2.6 million for the quarter ended
June 30, 2002, representing a decrease of 62%. Gross margin for the Internet
Group increased to 60% for the current year quarter from 31% for the quarter a
year ago as a result of moving its data center operations from Los Angeles to
Boulder. EBITDA for the Internet Group was $0.3 million for both quarters ended
June 30, 2003 and 2002. EBITDA for the quarter ended June 30, 2002 was
determined before restructuring and impairment charges of $3.6 million.
CORPORATE ADMINISTRATION EXPENSES
Corporate administration expenses declined to $1.3 million for the quarter ended
June 30, 2003 from $2.5 million for the quarter ended June 30, 2002,
representing a decrease of 48%. This decline is primarily related to an 88%
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
The Company is updating its guidance for the fiscal year ending March 31, 2004
as follows:
- The Company reaffirms its revenue guidance of $35.0 - 40.0 million
- The Company is updating its net income guidance to $5.0 - 7.0 million
or $0.23 - $0.35 cents per share
- This net income guidance is provided on the assumption that the
Company will be able to utilize its net operating loss carryfowards to
offset any federal or state income tax which would otherwise be owed
for fiscal 2004, the first fiscal year in which it projects it will
have generated net taxable income. It is possible, however, that the
use of such net operating loss carryforwards could be limited by
applicable Internal Revenue Code provisions, including Section 382.
The Company is currently analyzing the full impact of these provisions
and will revise its guidance, if necessary, with its second quarter
earnings release.
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)-218-0713. To participate in the web cast please
log on to www.noof.com and 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 August 11th at (800)-405-2236, access code 547862. 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 and Section 21E of Securities & Exchange Act.
The Company intends forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements. All statements related to the
Company's revenue and net income/eps guidance, the scalability of the business,
and 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. 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 47 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.
For more information contact Karyn Miller, Chief Financial Officer, at (303)
444-0900, extension 102, and please visit our web site at www.noof.com.
Consolidated Operating Results
(in '000's except per share amounts)
(UNAUDITED)
Quarter Ended
June 30,
2003 2002
Revenue $10,081 $9,597
Cost of Sales (3,893) (5,241)
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Gross Profit 6,188 4,356
Operating Expenses (3,930) (9,303)
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Operating Income (Loss) 2,258 (4,947)
Other Expense (236) (693)
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Net Income (Loss) $2,022 ($5,640)
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Basic Income (Loss) Per Share $0.10 ($0.27)
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Diluted Income (Loss) Per Share $0.10 ($0.27)
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Basic shares outstanding 19,750 21,259
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Diluted shares outstanding 20,246 21,259
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Reconciliation of Net Income (Loss) to EBITDA as reported
(UNAUDITED)
Quarter Ended
June 30,
2003 2002
Net Income (Loss) $2,022 ($5,640)
Adjustments:
Dep'n and Amort.(1) 516 1,212
Interest Expense 309 595
Interest Income (11) (18)
Loss on non-cash write off 0 117
Restructuring/Impair. 0 3,576
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EBITDA as reported $2,836 ($158)
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(1) Amortization excludes amortization of content licenses
The Condensed Statement of Operations should be read in conjunction with the
Company's Form 10Q, 10-K and other fiilings with the Securities and Exchange
Commission. To obtain a copy please contact New Frontier Media, Inc.
Consolidated Balance Sheet
(in 000s)
(Unaudited)
June 30, March 31,
2003 2003
CURRENT ASSETS:
Cash and cash equivalents $6,143 $4,264
Accounts receivable, net 6,484 5,680
Prepaid expenses 521 610
Other 442 452
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TOTAL CURRENT ASSETS 13,590 11,006
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FURNITURE AND EQUIPMENT, net 3,762 3,951
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OTHER ASSETS:
Prepaid distribution rights, net 11,968 11,520
Goodwill 3,743 3,743
Other identifiable intangible assets, net 537 1,124
Deposits 353 567
Other 823 3,114
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TOTAL OTHER ASSETS 17,424 20,068
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TOTAL ASSETS $34,776 $35,025
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CURRENT LIABILITIES:
Accounts payable $2,137 $2,606
Current portion of capital lease obligations 892 996
Deferred revenue 2,079 2,223
Accrued restructuring expense 1,098 1,304
Redeemable preferred stock 2,500 0
Note Payable 400 0
Other accrued liabilities 1,697 1,225
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TOTAL CURRENT LIABILITIES 10,803 8,354
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LONG TERM LIABILITIES:
Obligations under capital lease, net of
current portion 380 465
Redeemable preferred stock 1,626 3,750
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TOTAL LONG-TERM LIABILITIES 2,006 4,215
------------ -------------
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TOTAL LIABILITIES 12,809 12,569
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock 2 2
Additional paid-in capital 43,432 45,943
Accumulated deficit (21,467) (23,489)
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TOTAL SHAREHOLDERS' EQUITY 21,967 22,456
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $34,776 $35,025
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