Exhibit 99.1
NEW FRONTIER MEDIA REPORTS ITS FISCAL 2005 FOURTH QUARTER RESULTS
BOULDER, Colo., May 25 /PRNewswire-FirstCall/ -- New Frontier Media, Inc.
(Nasdaq: NOOF), a leader in the electronic distribution of adult entertainment,
announced its fiscal 2005 fourth quarter results today. The Company reported
earnings of $0.10 per fully diluted share for its current year quarter, net of a
quarterly tax rate of 27%. This compares with $0.14 per fully diluted share for
the same 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 $10.8
million compared to $11.1 million for the same quarter a year ago, representing
a decrease of 3%. Net income for the current year quarter was $2.4 million, net
of tax, as compared to net income of $3.3 million for the fourth quarter a year
ago, which reflects no tax expense. Net income for the current year quarter
includes a restructuring gain of $0.3 million, net of tax, related to the
reversal of the remaining amount of the Internet Group's rent-restructuring
accrual.
"Fiscal year 2005 was the most profitable year in the history of our
Company. We are very proud of what we have accomplished and are optimistic that
even better years are ahead," said New Frontier Media, Inc. Chief Executive
Officer Michael Weiner.
Pay TV
The Company's Pay TV Group reported revenue of $10.1 million for the quarter
ended March 31, 2005, as compared to $10.4 million for the quarter ended March
31, 2004, which represents a decrease of 3%. Of this, revenue from the Pay TV
Group's pay-per-view ("PPV") services increased 5% to $5.9 million for the
quarter ended March 31, 2005, from $5.6 million for the quarter ended March 31,
2004. Revenue from the Pay TV Group's video-on-demand ("VOD") service, provided
both to the cable and hotel markets, declined 17% to $3.4 million for the
quarter ended March 31, 2005, from $4.1 million for the quarter ended March 31,
2004. Revenue from the Pay TV Group's C-Band service increased 14% to $0.8
million for the quarter ended March 31, 2005, from $0.7 million for the quarter
ended March 31, 2004. This increase is attributable to a one-time adjustment
made during the fourth quarter ended March 31, 2004 that had the effect of
decreasing the Pay TV Group's quarterly C-Band revenue by $0.4 million.
The increase in the Pay TV Group's PPV revenue is related to a 7% increase
in revenue from its largest customer as well as to an increase in its overall
network household distribution. The Pay TV Group's network household
distribution, excluding VOD, increased to 61.8 million as of March 31, 2005 from
52.5 million as of March 31, 2004, representing an increase of 18%.
The decrease in the Pay TV Group's fourth quarter VOD revenue is related to
increased competition on platforms where the Pay TV Group had previously been
the only provider of adult content.
EBITDA for the Pay TV Group was $4.7 million for the quarter ended March 31,
2005, as compared to EBITDA of $4.8 million for the quarter ended March 31,
2004, representing a decrease of 2%. Gross margin for the Pay TV Group increased
to 64% for the quarter ended March 31, 2005, from 62% for the quarter a year
ago. Operating expenses increased 11% year-over-year for the quarter due to an
increase in sales and marketing costs.
Internet Group
The Company's Internet Group reported net revenue of $0.7 million for the
quarters ended March 31, 2005 and 2004, respectively. EBITDA for the Internet
Group was $0.1 million for the quarter ended March 31, 2005 as compared to $0.2
million for the quarter ended March 31, 2004. EBITDA for the current year fourth
quarter was determined prior to a restructuring gain of $0.4 million.
Corporate Administration Expenses
Corporate administration expenses were $1.7 million for the quarter ended
March 31, 2005 as compared to $1.3 million for the quarter a year ago,
representing an increase of 31%. This increase is primarily related to expenses
associated with the Company's compliance with Section 404 of the Sarbanes-Oxley
Act.
Future Outlook
The Company is providing the following guidance for its fiscal year ended
March 31, 2006:
Revenue: $44.5 million -- $46 million
Net income: $8.4 million -- $9.3 million
EPS: $0.37 -- $0.41 per fully diluted share
Effective Tax Rate: 38%
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)-240-4186. 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
2 p.m. Eastern Time on May 25, 2005 at (800)-405-2236, access code 11031298#.
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 belief that better years are ahead and our
2006 fiscal year 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 80 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 Twelve Months Ended
March 31, March 31,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenue $ 10,784 $ 11,099 $ 46,277 $ 42,878
Cost of Sales (3,969) (4,289) (16,047) (16,696)
Gross Profit 6,815 6,810 30,230 26,182
Operating Expenses (3,650) (3,496) (14,413) (14,466)
Operating Income 3,165 3,314 15,817 11,716
Other Income/(Expense) 150 20 346 (796)
Net Income Before Taxes $ 3,315 $ 3,334 $ 16,163 $ 10,920
Provision for income taxes (907) (5) (5,041) (7)
Net Income $ 2,408 $ 3,329 $ 11,122 $ 10,913
Basic Income Per Share $ 0.11 $ 0.15 $ 0.50 $ 0.53
Diluted Income Per Share $ 0.10 $ 0.14 $ 0.48 $ 0.50
Basic shares outstanding 22,485 21,872 22,266 20,522
Diluted shares outstanding 23,192 23,529 23,067 21,892
Reconciliation of Net Income to EBITDA as reported
Quarter Ended Twelve Months Ended
March 31, March 31,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net Income $ 2,408 $ 3,329 $ 11,122 $ 10,913
Adjustments:
Dep'n and Amort.(1) 382 334 1,713 1,936
Restructuring Gain (400) 0 (546) 0
Interest Expense 19 70 103 1,156
Interest Income (168) (19) (403) (48)
Income Taxes 907 5 5,041 7
EBITDA as reported $ 3,148 $ 3,719 $ 17,030 $ 13,964
(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) (in 000s)
March 31, March 31,
2005 2004
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 18,403 $ 15,352
Marketable Securities 9,075 1,478
Accounts receivable, net 8,034 6,872
Prepaid expenses 529 497
Deferred Tax Asset 382 0
Income Tax Receivable 157 0
Other 564 236
TOTAL CURRENT ASSETS 37,144 24,435
FURNITURE AND EQUIPMENT, net 3,435 3,727
OTHER ASSETS:
Prepaid distribution rights,
net 9,721 11,627
Marketable Securities 4,547 100
Goodwill 3,743 3,743
Other identifiable intangible
assets, net 101 356
Other 837 774
TOTAL OTHER ASSETS 18,949 16,600
TOTAL ASSETS $ 59,528 $ 44,762
CURRENT LIABILITIES:
Accounts payable $ 1,868 $ 1,767
Current portion of capital
lease obligations 154 356
Deferred revenue 484 1,304
Current portion of notes
payable 275 653
Accrued restructuring expense 91 1,026
Accrued Compensation 1,263 952
Accrued Transport Fees 647 562
Accrued legal and accounting
fees 662 329
Accrued Liabilities 413 368
TOTAL CURRENT
LIABILITIES 5,857 7,317
LONG TERM LIABILITIES:
Obligations under capital
lease, net of current portion 0 154
Note Payable, net of current
portion 0 275
Deferred tax liability 5 0
TOTAL LONG-TERM
LIABILITIES 5 429
TOTAL LIABILITIES 5,862 7,746
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock 2 2
Additional paid-in capital 55,173 49,590
Accumulated deficit (1,454) (12,576)
Other comprehensive
income/(loss) (55) 0
TOTAL SHAREHOLDERS'
EQUITY 53,666 37,016
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 59,528 $ 44,762
SOURCE New Frontier Media, Inc.
-0- 05/25/2005
/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