Exhibit 99.1
New Frontier Media Reports EPS of $0.13/Share for Second Fiscal Quarter
BOULDER, Colo., Nov. 9 /PRNewswire-FirstCall/ --
New Frontier Media, Inc. (Nasdaq: NOOF), a leader in the electronic
distribution of adult entertainment, announced earnings per fully diluted
share for its second fiscal quarter of $0.13, net of an effective tax rate of
30%. This compares with $0.14 per fully diluted share for its second quarter
a year ago, which reflects no tax expense as taxes were offset fully by net
operating losses.
The Company reported net revenue for the current year quarter of
$12 million compared to $10.9 million for the quarter a year ago, representing
an increase of 10%. The Company reported EBITDA (earnings before interest,
taxes, depreciation and non-content related amortization) of $4.8 million for
the quarter ended September 30, 2004, as compared to $3.7 million for the
quarter ended September 30, 2003, representing an increase of 30%.
Net income for the second quarter of fiscal 2005 increased 11% to
$3.1 million as compared to net income of $2.8 million for the quarter a year
ago. Net income for the current year quarter was 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 continue to be very pleased with the Company's performance during this
current fiscal year. The video-on-demand business remains very strong for
us. Additionally, during our second fiscal quarter we began to see the first
launches of our pay-per-view and VOD services with our newest customers. We
remain on track to meet our revised guidance for the fiscal year, and expect
to be at the mid-to-upper end of our EPS guidance range," stated Michael
Weiner, Chief Executive Officer.
Pay TV
The Company's Pay TV Group reported revenue of $11.3 million for the
quarter ended September 30, 2004, as compared to $10.1 million for the quarter
ended September 30, 2003, which represents an increase of 12%. Of this,
revenue from the Pay TV Group's Cable/DBS/Hotel services increased 23% to
$10.3 million for the quarter ended September 30, 2004, from $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 14.2 million VOD enabled cable
households, a 78% increase over the quarter a year ago, and 840,000 hotel
rooms in the U.S.
The Pay TV Group also experienced a 19% increase in its pay-per-view
revenue year-over-year for the quarter. This increase is related to an
increase in the Pay TV Group's network household distribution as well as to a
13% increase in revenue from its largest customer. The Pay TV Group's network
household distribution, excluding VOD distribution, has increased to
58.5 million as of September 30, 2004 from 47.2 million as of the quarter a
year ago, representing a 24% increase.
Revenue from the Group's C-Band services declined 41% to $1.0 million for
the quarter ended September 30, 2004, from $1.7 million for the quarter a year
ago.
EBITDA for the Pay TV Group was $5.9 million for the quarter ended
September 30, 2004, as compared to EBITDA of $4.7 million for the quarter
ended September 30, 2003, representing an increase of 26%. Gross margin for
the Pay TV Group increased to 66% for the quarter ended September 30, 2004,
from 60% for the quarter a year ago. Operating expenses were 18% of net
revenue for both quarters ended September 30, 2004 and 2003, respectively.
Overall, operating expenses increased 11% year-over-year for the quarter due
to an increase in marketing costs associated with TEN* branding and
promotional activities.
Internet Group
The Company's Internet Group reported net revenue of $0.7 million for the
quarter ended September 30, 2004, as compared to $0.8 million for the quarter
ended September 30, 2003, representing a decrease of 13%. EBITDA for the
Internet Group was breakeven for the quarter ended September 30, 2004, as
compared to $0.1 million for the quarter a year ago.
Corporate Administration Expenses
Corporate administration expenses were $1.2 million for the quarter ended
September 30, 2004 as compared to $1.1 million for the quarter a year ago,
representing an increase of 9%.
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 November 9, 2004 at (800)-405-2236,
access code 11013988#. 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 we remain on track for our revised earnings guidance, our
expectation that we will be at the mid-to-upper end of our EPS guidance range,
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 72 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 Ended Six Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenue $12,026 $10,919 $23,502 $20,999
Cost of Sales (4,133) (4,295) (8,078) (8,187)
Gross Profit 7,893 6,624 15,424 12,812
Operating Expenses (3,579) (3,487) (7,210) (7,417)
Operating Income 4,314 3,137 8,214 5,395
Other Income/(Expense) 78 (304) 77 (539)
Net Income
Before Taxes $4,392 $2,833 $8,291 $4,856
Provision for
income taxes (1,330) (1) (2,501) (2)
Net Income $3,062 $2,832 $5,790 $4,854
Basic Income
Per Share $0.14 $0.15 $0.26 $0.25
Diluted Income
Per Share $0.13 $0.14 $0.25 $0.23
Basic shares
outstanding 22,002 19,436 22,174 19,584
Diluted shares
outstanding 22,809 20,748 23,005 20,767
Reconciliation of Net Income to EBITDA as reported
Quarter Ended Six Months Ended
September 30, September 30,
2004 2003 2004 2003
Net Income $3,062 $2,832 $5,790 $4,854
Adjustments:
Dep'n and Amort.(1) 454 541 904 1,057
Interest Expense 28 361 62 671
Interest Income (81) (8) (114) (20)
Income Taxes 1,330 1 2,501 2
EBITDA as reported $4,793 $3,727 $9,143 $6,564
(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)
September 30, March 31,
2004 2004
CURRENT ASSETS:
Cash and cash equivalents $16,515 $15,352
Investments 7,736 1,478
Accounts receivable, net 7,854 6,872
Prepaid expenses 422 497
Other 538 236
TOTAL CURRENT ASSETS 33,065 24,435
FURNITURE AND EQUIPMENT, net 3,527 3,727
OTHER ASSETS:
Prepaid distribution rights, net 10,311 11,627
Goodwill 3,743 3,743
Investments 2,127 0
Other identifiable intangible assets, net 229 356
Deposits 43 156
Other 618 718
TOTAL OTHER ASSETS 17,071 16,600
TOTAL ASSETS $53,663 $44,762
CURRENT LIABILITIES:
Accounts payable $1,392 $1,767
Current portion of capital lease
obligations 248 356
Deferred revenue 912 1,304
Current portion of notes payable 279 653
Taxes Payable 356 0
Accrued restructuring expense 1,018 1,026
Accrued Compensation 1,054 952
Accrued Liabilities 1,595 1,259
TOTAL CURRENT LIABILITIES 6,854 7,317
LONG TERM LIABILITIES:
Obligations under capital lease, net of
current portion 60 154
Note Payable, net of current portion 133 275
Deferred tax liability 42 0
TOTAL LONG-TERM LIABILITIES 235 429
TOTAL LIABILITIES 7,089 7,746
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock 2 2
Additional paid-in capital 53,361 49,590
Accumulated deficit (6,786) (12,576)
Other comprehensive income/(loss) (3) 0
TOTAL SHAREHOLDERS' EQUITY 46,574 37,016
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $53,663 $44,762
SOURCE New Frontier Media, Inc.
-0- 11/09/2004
/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: CPR STW ENT FLM TVN ITE MLM
SU: ERN CCA MAV