Spark Networks(R) Reports First Quarter 2007 Financial Results
BEVERLY HILLS, Calif., May 3 /PRNewswire-FirstCall/ -- Spark Networks plc
(Amex: LOV), a leading provider of online personals services, today reported
first quarter 2007 financial results.
Highlights
* First Quarter Revenue of $16.8 Million
* Other Businesses Revenue Up 54%
* Cash and Marketable Securities of $19.7 Million
* HurryDate(R) Acquisition Extends Offline Events Offerings
Financial Results
Reported revenue for the first quarter of 2007 was $16.8 million, which was
flat compared to the same period in 2006.
The Company reported a net loss of $(2.0) million, or $(0.06) per share, for
the first quarter of 2007, compared to net income of $710,000, or $0.02 per
share, for the same period in 2006. Contributing to the loss in the first
quarter were an impairment expense of approximately $1.9 million, related to the
impairment of the book carrying value of goodwill under FAS 142 related to
AmericanSingles(R) and $1.1 million in share-based compensation expense related
to the acceleration of vesting and extension of the exercise period of options
for our former CEO and current Chairman of the Board, in connection with his
resignation as CEO of the Company.
Adjusted EBITDA(1) for the first quarter of 2007 was $2.6 million, a
decrease of 19% compared to adjusted EBITDA of $3.2 million during the same
period in 2006. Contributing to the decline in net income and adjusted EBITDA
were costs of approximately $500,000 related to the Company's Scheme of
Arrangement, which, pending shareholder approval, is intended to establish the
Company as a Delaware corporation, as well as expenses related to compliance
under the Sarbanes-Oxley Act. See the attached Consolidated Statement of
Operations for a reconciliation of EBITDA and adjusted EBITDA to net income.
Average paying subscribers(2) for the Company, as a whole, in the first
quarter of 2007 were approximately 231,313, compared to 230,641 from the same
period in 2006.
Segment Reporting(3)
The Company reported first quarter 2007 revenue for its JDate segment of
$7.2 million, an increase of 3% compared to $7.0 million in the same period in
2006.
The Company reported first quarter 2007 revenue for its AmericanSingles
segment of $4.3 million, a decrease of 32% compared to $6.3 million in the same
period in 2006. The decrease in revenues for AmericanSingles is largely
attributable to a 27% decrease in the AmericanSingles marketing spend in the
last half of 2006 compared to the last half of 2005.
The Company reported first quarter 2007 revenue for its Other Businesses
segment of $5.3 million, an increase of 54% compared to $3.5 million in the same
period in 2006.
Average paying subscribers for the Company's JDate segment were 75,211
during the first quarter of 2007, compared to 75,316 from the same period in
2006.
Average paying subscribers for the Company's AmericanSingles segment were
61,620 during the first quarter of 2007, a decrease of 32% compared to 90,323
from the same period in 2006.
Average paying subscribers for the Company's Other Businesses segment were
94,482 during the first quarter of 2007, an increase of 45% compared to 65,002
from the same period in 2006.
Balance Sheet, Cash, Debt
As of March 31, 2007, the Company had a cash and marketable securities
position of $19.7 million, compared to $20.6 million at December 31, 2006. Cash
and marketable securities, net of debt, was $18.2 million at March 31, 2007,
compared to $19.3 million at December 31, 2006. In the first quarter of 2007,
the Company paid $2.0 million with respect to the acquisition of HurryDate (net
of cash acquired and including transaction costs) and repurchased approximately
$1.8 million worth of shares under its share repurchase program.
During the quarter the Company repurchased 304,106 shares at a weighted
average price of $5.92. All shares repurchased are earmarked for cancellation
and are therefore not included as shares outstanding in the Company's share
count and weighted average shares outstanding at quarter end.
Investor Conference Call:
The Company will discuss its financial results during a live teleconference
today at 1:30 p.m. Pacific time and 10:30 p.m. Frankfurt time.
Call Title: Spark Networks Q1 '07 Financial Results
Toll-Free (United States): +1 888-371-9318
International: +1 973-935-2986
Confirmation #: 8685977
One-Week Replay
Toll-Free (United States): +1-877-519-4471
International: +1-973-341-3080
In addition, the Company will host a webcast of the call which will be
accessible in the Investor Relations section of the Company's website under
"Conference Calls and Presentations" at: http://www.spark.net/investor.htm.
Safe Harbor Statement:
This press release contains forward-looking statements. Any statements in
this news release that are not statements of historical fact may be considered
to be forward-looking statements. Written words, such as "may," "will,"
"expect," "believe," "anticipate," "estimate," "intends," "goal," "objective,"
"seek," "attempt," or variations of these or similar words, identify
forward-looking statements. By their nature, forward-looking statements and
forecasts involve risks and uncertainties because they relate to events and
depend on circumstances that will occur in the near future. There are a number
of factors that could cause actual results and developments to differ
materially, including, but not limited to our ability to: attract members;
convert members into paying subscribers and retain our paying subscribers;
develop or acquire new product offerings and successfully implement and expand
those offerings; keep pace with rapid technological changes; maintain the
strength of our existing brands; and maintain and enhance those brands and our
dependence upon the telecommunications infrastructure and our networking
hardware and software infrastructure. For a discussion of these and further
risks and uncertainties, please see our filings with the Securities and Exchange
Commission. We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information that we file at the SEC's public reference room at 100 F
Street, N.E., Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Our public filings with the
SEC also are available from commercial document retrieval services and at the
web site maintained by the SEC at http://www.sec.gov.
About Spark Networks plc:
Spark Networks' American Depository Shares trade on the American Stock
Exchange under the symbol "LOV," and its Global Depositary Shares trade on the
Frankfurt Stock Exchange under the symbol "MHJG." The Spark Networks portfolio
of consumer websites includes, among others, JDate.com (www.jdate.com),
AmericanSingles.com (www.americansingles.com), BlackSingles.com(R)
(www.blacksingles.com), CatholicMingle(TM).com (www.catholicmingle.com) and
Relationships.com(TM) (www.relationships.com).
(1) "Adjusted EBITDA" is defined as earnings before interest, taxes,
depreciation, amortization, share-based compensation and long-lived
impairment of assets. Adjusted EBITDA should not be construed as a
substitute for net income (loss) or net cash provided by (used in)
operating activities (all as determined in accordance with GAAP) for
the purpose of analyzing our operating performance, financial position
and cash flows, as adjusted EBITDA is not defined by GAAP. However, the
Company regards adjusted EBITDA as a complement to net income and other
GAAP financial performance measures, including an indirect measure of
operating cash flow. As such, management believes that the investment
community finds it to be a useful tool to perform meaningful
comparisons of past, present and future operating results and as a
means to evaluate the results of core on-going operations.
(2) Paying subscribers are defined as individuals who have paid a monthly
fee for access to communication and website features beyond those
provided to our members. Average paying subscribers for each month are
calculated as the sum of the paying subscribers at the beginning and
end of the month, divided by two. Average paying subscribers for
periods longer than one month are calculated as the sum of the average
paying subscribers for each month, divided by the number of months in
such period.
(3) In accordance with Financial Accounting Standard No. 131, the Company's
financial reporting includes detailed data on three separate operating
segments. The JDate segment consists of the Company's JDate.com website
and its co-branded websites. The AmericanSingles segment consists of
the Company's AmericanSingles.com website and its co-branded and
private label websites. The Other Businesses segment consists of all of
the Company's other websites and businesses.
SPARK NETWORKS PLC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
March 31, December 31,
2007 2006
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 19,492 $ 20,412
Marketable securities 197 196
Restricted cash 2,013 2,070
Accounts receivable, net of allowance of $50
and $0 for March 31, 2007 and December 31, 2006 1,029 1,200
Deferred tax asset - current portion 632 219
Prepaid expenses and other 1,444 1,509
Total current assets 24,807 25,606
Property and equipment, net 1,816 2,306
Goodwill, net 17,917 19,236
Intangible assets, net 5,826 4,406
Deposits and other assets 56 72
Total assets $ 50,422 $ 51,626
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,692 $ 1,487
Accrued liabilities 4,621 4,985
Deferred revenue 4,320 4,051
Notes payable - current portion 1,491 1,314
Current portion of obligations under
capital leases -- 43
Total current liabilities 12,124 11,880
Deferred tax liabilities 1,826 1,782
Obligations under capital leases -- 59
Total liabilities 13,950 13,721
Shares subject to rescission 8,309 8,079
Commitments and contingencies -- --
Shareholders' equity:
Authorized capital 800,000 pounds
sterling divided into 80,000,000
ordinary shares of 1p each; issued and
outstanding 30,761,855 shares as
of March 31, 2007 and 30,941,465 shares
as of December 31, 2006, at a stated value of: 442 517
Additional paid-in-capital 67,824 67,571
Accumulated other comprehensive income 375 248
Notes receivable from employees -- --
Accumulated deficit (40,478) (38,510)
Total shareholders' equity 28,163 29,826
Total liabilities and shareholders'
equity $ 50,422 $ 51,626
SPARK NETWORKS PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited in thousands, except per share data)
Three Months Ended March 31,
2007 2006
Net revenues $ 16,820 $ 16,805
Direct marketing expenses 6,757 5,657
Contribution margin 10,063 11,148
Operating expenses:
Indirect marketing (including share-based
compensation of $10 and $13) 327 366
Customer service (including share-based
compensation of $19 and $23) 929 908
Technical operations (including share-based
compensation of $179 and $174) 1,424 2,230
Product development (including share-based
compensation of $88 and $118) 806 845
General and administrative (including share-based
compensation of $1,763 and $1,028) 6,585 5,632
Amortization of intangible assets other than
goodwill 344 239
Impairment of goodwill 1,894 --
Total operating expenses 12,309 10,220
Operating (loss) income (2,246) 928
Interest (income), loss and other expenses, net (205) 39
(Loss) income before income taxes (2,041) 889
Provision (benefit) for income taxes (73) 179
Net (loss) income $ (1,968) $ 710
Net (loss) income per share - basic $ (0.06) $ 0.02
Net (loss) income per share - diluted $ (0.06) $ 0.02
Weighted average shares outstanding - basic 30,868 30,266
Weighted average shares outstanding - diluted 30,868 31,258
EBITDA
Net (loss) income $ (1,968) $ 710
Interest (226) (71)
Taxes (73) 179
Depreciation 547 779
Amortization 344 239
EBITDA (1,376) 1,836
Share-based compensation 2,059 1,356
Impairment of long-lived assets 1,894 --
Adjusted EBITDA $ 2,577 $ 3,192
SPARK NETWORKS PLC
SEGMENT RESULTS FROM OPERATIONS
(in thousands except subscriber information)
Three Months Ended
March 31,
2007 2006
Net Revenues
JDate $ 7,210 $ 6,996
AmericanSingles 4,288 6,343
Other Businesses 5,322 3,466
Total net revenues $ 16,820 $ 16,805
Direct Marketing Expenses
JDate $ 714 $ 796
AmericanSingles 3,071 3,360
Other Businesses 2,972 1,501
Total direct marketing expenses $ 6,757 $ 5,657
Contribution Margin
JDate $ 6,496 $ 6,200
AmericanSingles 1,217 2,983
Other Businesses 2,350 1,965
Total contribution margin $ 10,063 $ 11,148
Average Paying
Subscribers
JDate 75,211 75,316
AmericanSingles 61,620 90,323
Other Businesses 94,482 65,002
Total 231,313 230,641
SOURCE Spark Networks plc
-0- 05/03/2007
/CONTACT: Investors, Mark Thompson, +1-323-836-3000, mthompson@spark.net,
or Media, Gail Laguna, +1-323-836-3000, glaguna@spark.net, both of Spark
Networks plc/
/Web site: http://www.spark.net/investor.htm /
(LOV)