Exhibit 99.1
[Logo]
NEW FRONTIER MEDIA
For Immediate Release
Contact: Karyn L. Miller, Chief Financial Officer
(303) 444-0900 x 102
kmiller@noof.com
NEW FRONTIER MEDIA REPORTS RECORD SECOND QUARTER RESULTS
BOULDER, COLORADO, November 6, 2003 -- New Frontier Media, Inc. (Nasdaq: NOOF),
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.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 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.
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) (UNAUDITED)
Quarter Ended Six Months Ended
September September
2003 2002 2003 2002
Revenue $10,919 $9,280 $ 20,999 $18,877
Cost of Sales (4,295) (4,487) (8,187) (9,727)
------------ ------------ ------------- ------------
Gross Profit 6,624 4,793 12,812 9,150
Operating Expenses (3,487) (5,489) (7,417) (14,792)
------------ ------------ ------------- ------------
Operating Income (Loss) 3,137 (696) 5,395 (5,642)
Other Expense (304) (323) (539) (1,017)
------------ ------------ ------------- ------------
Net Income (Loss) Before Taxes $2,833 ($1,019) $4,856 ($6,659)
Provision for income taxes (1) 0 (2) 0
------------ ------------ ------------- ------------
Net Income (Loss) $2,832 ($1,019) $4,854 ($6,659)
============ ============ ============= ============
Basic Income (Loss) Per Share $0.15 ($0.05) $0.25 ($0.31)
============ ============ ============= ============
Diluted Income (Loss) Per Share $0.14 ($0.05) $0.23 ($0.31)
============ ============ ============= ============
Basic shares outstanding 19,436 21,323 19,584 21,291
============ ============ ============= ============
Diluted shares outstanding 20,748 21,323 20,767 21,291
============ ============ ============= ============
Reconciliation of Net Income (Loss) to EBITDA as reported
(UNAUDITED) (UNAUDITED)
Quarter Ended Six Months Ended
September 30, September 30,
2003 2002 2003 2002
Net Income (Loss) $2,832 ($1,019) $4,854 ($6,659)
Adjustments:
Dep'n and Amort.(1) 541 764 1,057 1,976
Interest Expense 361 343 671 938
Interest Income (8) (20) (20) (39)
Income Taxes 1 0 2 0
Loss on non-cash write off 0 0 0 118
Restructuring/Impair. 72 142 72 3,718
------------ ------------ ------------- ------------
EBITDA as reported $3,799 $210 $6,636 $52
============ ============ ============= ============
(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)
September 30, March 31,
2003 2003
CURRENT ASSETS:
Cash and cash equivalents $7,862 $4,264
Accounts receivable, net 6,768 5,680
Prepaid expenses 449 610
Other 287 452
------------ -------------
TOTAL CURRENT ASSETS 15,366 11,006
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FURNITURE AND EQUIPMENT, net 3,422 3,951
------------ -------------
OTHER ASSETS:
Prepaid distribution rights, net 12,156 11,520
Goodwill 3,743 3,743
Other identifiable intangible assets, net 485 1,124
Deposits 233 567
Other 766 3,114
------------ -------------
TOTAL OTHER ASSETS 17,383 20,068
------------ -------------
TOTAL ASSETS $36,171 $35,025
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CURRENT LIABILITIES:
Accounts payable $1,719 $2,606
Current portion of capital lease obligations 581 996
Deferred revenue 1,721 2,223
Accrued restructuring expense 1,009 1,304
Note Payable 655 0
Other accrued liabilities 2,037 1,225
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TOTAL CURRENT LIABILITIES 7,722 8,354
------------ -------------
LONG TERM LIABILITIES:
Obligations under capital lease, net of
current portion 323 465
Note Payable, net of current portion 435 0
Redeemable preferred stock 1,698 3,750
------------ -------------
TOTAL LONG-TERM LIABILITIES 2,456 4,215
------------ -------------
------------ -------------
TOTAL LIABILITIES 10,178 12,569
------------ -------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock 2 2
Additional paid-in capital 44,626 45,943
Accumulated deficit (18,635) (23,489)
------------ -------------
TOTAL SHAREHOLDERS' EQUITY 25,993 22,456
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $36,171 $35,025
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