Exhibit 99.1
New Frontier Media Reports Earnings Per Share of 14 Cents
for Its 2004 Fourth Quarter
BOULDER, Colo., May 27 /PRNewswire-FirstCall/ -- New Frontier Media, Inc.
(Nasdaq: NOOF), a leader in the electronic distribution of adult
entertainment, announced that it reported earnings per fully diluted common
share of $0.14 for its fourth quarter ended March 31, 2004. The Company
reported net income for the fiscal 2004 fourth quarter of $3.3 million as
compared to net income of $0.7 million, or $0.04 of earnings per fully diluted
common share, for the quarter a year ago, representing an increase of 371% in
net income year-over-year for the quarter. Net revenue for the current year
quarter was $11.1 million compared to $9.3 million for the quarter a year ago,
representing an increase of 19%.
The Company reported EBITDA (earnings before interest, taxes, depreciation
and non-content related amortization) of $3.7 million for the quarter ended
March 31, 2004, as compared to $2.0 million for the quarter ended March 31,
2003, which is determined prior to restructuring charges of $0.3 million
related to the Internet Group.
"Fiscal 2004 was a watershed year for New Frontier Media. We generated
excellent results driven by the growth in the VOD market and the growing
recognition of the profit opportunity in adult content. We grew revenue,
margins, and cash flows this year, while strengthening our balance sheet
through the redemption of all of our Class A and B preferred stock," stated
Michael Weiner, Chief Executive Officer.
"As we begin Fiscal 2005, we look forward to increasing our pay-per-view
and VOD distribution through recently completed affiliate agreements. Also
this year, we will look for new ways to leverage our broadcast and Internet
assets while remaining a leader in the distribution of adult content to
current and emerging platforms," continued Mr. Weiner.
Pay TV
The Company's Pay TV Group reported revenue of $10.4 million for the
quarter ended March 31, 2004, as compared to $8.0 million for the quarter
ended March 31, 2003, which represents an increase of 30%. Of this, revenue
from the Pay TV Group's Cable/DBS/Hotel services increased 59% to $9.7 million
for the quarter ended March 31, 2004, from $6.1 million for the quarter ended
March 31, 2003. This increase in Cable/DBS/Hotel revenue is primarily related
to an increase in the distribution of the Pay TV Group's video-on-demand
("VOD") service to both cable operators and the hospitality industry. The Pay
TV Group's VOD service, branded as TEN*On Demand, is now distributed to
10.5 million VOD enabled cable households and 900,000 hotel rooms in the U.S.
The Pay TV Group adjusted its deferred revenue calculation by $0.4 million
in the fourth quarter, resulting in a decrease in its C-Band revenue. Revenue
from the Group's C-Band services, determined without giving effect to the
fourth quarter adjustment in revenue, declined 42% to $1.1 million for the
quarter ended March 31, 2004, from $1.9 million for the quarter a year ago.
This market remains profitable for the Pay TV Group; however, management is
monitoring the margins closely as the consumer market continues to migrate
away from this platform.
EBITDA for the Pay TV Group was $4.8 million for the quarter ended
March 31, 2004, as compared to EBITDA of $3.2 million for the quarter ended
March 31, 2003, representing an increase of 50%. Gross margin for the Pay TV
Group increased to 62% for the quarter ended March 31, 2004, from 57% for the
quarter a year ago. Operating expenses declined from 24% of net revenue for
the quarter ended March 31, 2003 to 18% for the quarter ended March 21, 2004,
as overall operating expenses remained flat at $1.9 million for both quarters
ended March 31, 2004 and 2003, respectively.
Internet Group
The Company's Internet Group reported net revenue of $0.7 million for the
quarter ended March 31 2004, as compared to $1.3 million for the quarter ended
March 31, 2003, representing a decrease of 46%. Gross margin for the Internet
Group increased to 57% for the current year quarter from 52% for the quarter a
year ago. EBITDA for the Internet Group was $0.2 million for both quarters
ended March 31, 2004 and 2003, respectively. EBITDA was determined before
restructuring charges of $0.3 million for the quarter ended March 31, 2003.
Corporate Administration Expenses
Corporate administration expenses were $1.3 million and $1.4 million for
the quarters ended March 31, 2004 and 2003, respectively.
Future Outlook
The Company is providing the following guidance for its fiscal year ended
March 31, 2005:
* Revenue of $47 -- $50 million
* Net Income of $9.8 million -- $12 million
* EPS guidance of $0.41 -- $0.50 per fully diluted share
* Net Income and EPS guidance calculated utilizing a 30% effective tax
rate
The Company reminds its shareholders that it was not a taxpayer for the
year ended March 31, 2004, and that its net income and EPS guidance for the
2005 fiscal year is given utilizing a 30% effective tax rate for the year.
Conference Call Information
New Frontier Media, Inc. will be conducting its conference call and web
cast to discuss earnings today at 11 a.m. Eastern Time. The participant phone
number for the conference call is (800)-366-7417. 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 1 p.m. Eastern Time on May 27, 2004 at (800)-405-2236, access
code 580644. 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 in this release about the future
outlook related to New Frontier Media and statements related to increasing our
pay-per-view and VOD distribution through recently completed affiliate
agreements, new ways to leverage our broadcast and Internet assets while
remaining the leader in the distribution of adult content to current and
emerging platforms, our earnings guidance and the outcome of any contingencies
are 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 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 62 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*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 about New Frontier Media, Inc. 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)
Quarter Twelve Months
Ended Ended
March 31, March 31,
2004 2003 2004 2003
Revenue $11,099 $9,280 $42,878 $36,747
Cost of Sales (4,288) (4,056) (16,696) (18,197)
Gross Profit 6,811 5,224 26,182 18,550
Operating Expenses (3,496) (4,314) (14,466) (23,543)
Operating Income (Loss) 3,315 910 11,716 (4,993)
Other Expense 19 (193) (796) (1,631)
Net Income (Loss) Before Taxes $3,334 $717 $10,920 ($6,624)
Provision for income taxes (5) (5) (7) (5,271)
Net Income (Loss) $3,329 $712 $10,913 ($11,895)
Basic Income (Loss) Per Share $0.15 $0.04 $0.53 ($0.56)
Diluted Income (Loss) Per Share $0.14 $0.04 $0.50 ($0.56)
Basic shares outstanding 21,872 20,854 20,522 21,319
Diluted shares outstanding 23,529 21,373 21,892 21,319
Reconciliation of Net Income (Loss) to
EBITDA as reported
Quarter Twelve Months
Ended Ended
March 31, March 31,
2004 2003 2004 2003
Net Income (Loss) $3,329 $712 $10,913 ($11,895)
Adjustments:
Dep'n and Amort.(1) 334 744 1,936 3,469
Interest Expense 70 261 1,157 1,633
Interest Income (19) (10) (50) (62)
Income Taxes 5 5 7 5,271
Loss on non-cash write off 0 0 0 118
Restructuring/Impair. 0 303 0 4,571
EBITDA as reported $3,719 $2,015 $13,963 $3,105
(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 filings with the
Securities and Exchange Commission.
To obtain a copy please contact New Frontier Media, Inc.
Consolidated Balance Sheet
(in 000s)
March 31 March 31,
2004 2003
CURRENT ASSETS:
Cash and cash equivalents $15,352 $4,264
Accounts receivable, net 6,872 5,680
Investments 1,478 0
Prepaid expenses 497 610
Other 236 452
TOTAL CURRENT ASSETS 24,435 11,006
FURNITURE AND EQUIPMENT, net 3,727 3,951
OTHER ASSETS:
Prepaid distribution rights,
net 11,627 11,520
Goodwill 3,743 3,743
Other identifiable intangible
assets, net 356 1,124
Deposits 156 567
Investments 100 0
Other 618 3,114
TOTAL OTHER ASSETS 16,600 20,068
TOTAL ASSETS $44,762 $35,025
CURRENT LIABILITIES:
Accounts payable $1,767 $2,606
Current portion of capital
lease obligations 356 996
Deferred revenue 1,304 2,223
Accrued restructuring expense 1,026 1,304
Note Payable 653 0
Accrued Compensation 952 478
Accrued Liabilities 1,259 747
TOTAL CURRENT LIABILITIES 7,317 8,354
LONG TERM LIABILITIES:
Obligations under capital
lease, net of current portion 154 465
Note Payable, net of current
portion 275 0
Redeemable preferred stock 0 3,750
TOTAL LONG-TERM LIABILITIES 429 4,215
TOTAL LIABILITIES 7,746 12,569
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock 2 2
Additional paid-in capital 49,590 45,943
Accumulated deficit (12,576) (23,489)
TOTAL SHAREHOLDERS' EQUITY 37,016 22,456
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $44,762 $35,025
SOURCE New Frontier Media, Inc.
-0- 05/27/2004
/CONTACT: Karyn L. Miller, Chief Financial Officer of New Frontier Media,
Inc., +1-303-444-0900 ext. 102, kmiller@noof.com/
/Web site: http://www.noof.com /
(NOOF)
CO: New Frontier Media, Inc.
ST: Colorado
IN: ENT TVN FLM CPR MLM ITE ECM
SU: ERN CCA ERP