Exhibit 99.1
New Frontier Media Reports Strong First Fiscal Quarter
BOULDER, Colo., Aug. 5 /PRNewswire-FirstCall/ --
New Frontier Media, Inc. (Nasdaq: NOOF), a leader in the electronic
distribution of adult entertainment, announced a strong first fiscal quarter,
reporting operating income of $3.9 million as compared to operating income of
$2.3 million for the quarter ended June 30, 2003, representing an increase of
70%. The Company reported EBITDA (earnings before interest, taxes,
depreciation and non-content related amortization) of $4.3 million for the
quarter ended June 30, 2004, as compared to $2.8 million for the quarter ended
June 30, 2003, representing an increase of 54%.
The Company reported net revenue for the current year quarter of
$11.5 million compared to $10.1 million for the quarter a year ago,
representing an increase of 14%. Net income for the fiscal 2005 first quarter
increased 35% to $2.7 million as compared to net income of $2.0 million for
the quarter a year ago. Earnings per fully diluted common share were reported
as $0.12 for the current year quarter versus earnings per fully diluted common
share of $0.10 per share for the quarter a year ago. Net income and earnings
per share for the current year quarter were taxed at an effective rate of
30% while earnings for the quarter a year ago reflected no tax expense as
taxes were offset fully by net operating losses.
"We are very pleased with our first quarter results. This represents our
sixth consecutive quarter of profitability. We continue to show improved
operating income, EBITDA and cash flows from operations. It is important to
remember that this is the first quarter in which our net income and earnings
per share reflect a provision for income taxes, utilizing an effective tax
rate of 30%. We expect our effective book tax rate to be 30% for the full
fiscal year, while we expect that our cash taxes will be considerably lower at
less than $1 million," stated Michael Weiner, Chief Executive Officer.
Pay TV
The Company's Pay TV Group reported revenue of $10.8 million for the
quarter ended June 30, 2004, as compared to $9.1 million for the quarter ended
June 30, 2003, which represents an increase of 19%. Of this, revenue from the
Pay TV Group's Cable/DBS/Hotel services increased 35% to $9.7 million for the
quarter ended June 30, 2004, from $7.2 million for the quarter ended June 30,
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. The Pay TV Group's VOD service, branded as TEN*On Demand, is now
distributed to 13.2 million VOD enabled cable households, an 89% increase over
the quarter a year ago, and 900,000 hotel rooms in the U.S.
Revenue from the Group's C-Band services declined 42% to $1.1 million for
the quarter ended June 30, 2004, from $1.9 million for the quarter a year ago.
EBITDA for the Pay TV Group was $5.7 million for the quarter ended
June 30, 2004, as compared to EBITDA of $3.9 million for the quarter ended
June 30, 2003, representing an increase of 46%. Gross margin for the Pay TV
Group increased to 67% for the quarter ended June 30, 2004, from 62% for the
quarter a year ago. Operating expenses declined from 24% of net revenue for
the quarter ended June 30, 2003 to 18% for the quarter ended June 30, 2004, as
overall operating expenses declined 14% to $1.9 million for the current year
quarter from $2.2 million for the quarter a year ago.
Internet Group
The Company's Internet Group reported net revenue of $0.7 million for the
quarter ended June 30, 2004, as compared to $1.0 million for the quarter ended
June 30, 2003, representing a decrease of 30%. EBITDA for the Internet Group
was breakeven for the quarter ended June 30, 2004, as compared to $0.3 million
for the quarter a year ago. Operating expenses for the current year quarter
included a $0.2 million non-recurring charge for the settlement of a lawsuit.
Corporate Administration Expenses
Corporate administration expenses were $1.3 million for both quarters
ended June 30, 2004 and 2003, respectively.
Future Outlook
The Company is updating its guidance for its fiscal year ended March 31,
2005 as follows:
* Revenue guidance updated from $47 - $50 million to $48 - $50 million
* Net income guidance updated from $9.8 million - $12 million to
$10.9 million - $12.4 million
* EPS range narrowed from $0.41 - $0.50 per fully diluted share to
$0.46 - $0.52 per fully diluted share
* Net Income and EPS guidance continue to be calculated utilizing a
30% effective tax rate
The Company continues to remind its shareholders that it was able to
utilize its net operating losses to offset its tax expense for the fiscal 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 August 5, 2004 at (800)-405-2236,
access code 11004575. 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 our
expectation that our effective book tax rate will continue at 30% for the
current fiscal year while our cash taxes will be considerably lower at less
than $1 million, 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 67 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)
(Unaudited)
Quarter Ended
June 30,
2004 2003
Revenue $11,476 $10,081
Cost of Sales (3,945) (3,893)
Gross Profit 7,531 6,188
Operating Expenses (3,632) (3,930)
Operating Income 3,899 2,258
Other Expense (1) (236)
Net Income Before Taxes $3,898 $2,022
Provision for income taxes (1,170) 0
Net Income $2,728 $2,022
Basic Income Per Share $0.12 $0.10
Diluted Income Per Share $0.12 $0.10
Basic shares outstanding 22,101 19,750
Diluted shares outstanding 22,956 20,191
Reconciliation of Net Income to EBITDA as reported
Quarter Ended
June 30,
2004 2003
Net Income $2,728 $2,022
Adjustments:
Dep'n and Amort.(1) 450 516
Interest Expense 34 309
Interest Income (33) (11)
Income Taxes 1,170 0
EBITDA as reported $4,349 $2,836
(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,
2004 2004
CURRENT ASSETS:
Cash and cash equivalents $18,999 $15,352
Investments 2,946 1,478
Accounts receivable, net 6,148 6,872
Prepaid expenses 479 497
Other 284 236
TOTAL CURRENT ASSETS 28,856 24,435
FURNITURE AND EQUIPMENT, net 3,742 3,727
OTHER ASSETS:
Prepaid distribution rights,
net 10,823 11,627
Goodwill 3,743 3,743
Other identifiable intangible
assets, net 292 356
Deposits 155 156
Deferred Tax Asset 165 0
Other 619 718
TOTAL OTHER ASSETS 15,797 16,600
TOTAL ASSETS $48,395 $44,762
CURRENT LIABILITIES:
Accounts payable $1,242 $1,767
Current portion of capital
lease obligations 306 356
Deferred revenue 959 1,304
Current portion of notes
payable 273 653
Taxes Payable 115 0
Accrued restructuring expense 1,022 1,026
Accrued Compensation 846 952
Accrued Liabilities 1,176 1,259
TOTAL CURRENT
LIABILITIES 5,939 7,317
LONG TERM LIABILITIES:
Obligations under capital
lease, net of
current portion 100 154
Note Payable, net of current
portion 205 275
TOTAL LONG-TERM
LIABILITIES 305 429
TOTAL
LIABILITIES 6,244 7,746
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock 2 2
Additional paid-in capital 51,997 49,590
Accumulated deficit (9,848) (12,576)
TOTAL SHAREHOLDERS'
EQUITY 42,151 37,016
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $48,395 $44,762
SOURCE New Frontier Media, Inc.
-0- 08/05/2004
/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.sec.gov /
/Web site: http://www.noof.com /
(NOOF)
CO: New Frontier Media, Inc.
ST: Colorado
IN: ENT FLM
SU: ERN CCA