Exhibit 99.1
NEW FRONTIER MEDIA REPORTS STRONG FISCAL 2007 FIRST QUARTER RESULTS
BOULDER, Colo., Aug. 8 /PRNewswire-FirstCall/ --
New Frontier Media, Inc. (Nasdaq: NOOF), a worldwide producer and distributor of
general and adult-themed motion picture entertainment, today announced strong
fiscal 2007 first quarter results. The Company reported a 48% increase in
quarterly revenue to $16.3 million from $11.0 million for the same quarter a
year ago. Net income for the current year quarter was $3.5 million compared to
$2.5 million for the same quarter a year ago, representing an increase of 40%.
Earnings per fully diluted share were reported as $0.15 for the quarter ended
June 30, 2006, representing a 36% increase over earnings per fully diluted share
of $0.11 for the quarter ended June 30, 2005.
"This quarter, we experienced strong growth on two different fronts," said
Michael Weiner, Chief Executive of New Frontier Media. "Our core business was
driven by the April launch of two of our pay-per-view services on DirecTV, while
the consolidation of our newly acquired film production company, MRG
Entertainment, added materially to our revenue. We are very pleased with our
first quarter, and have increased annual guidance accordingly."
Pay TV
The Company's Pay TV Group reported revenue of $12.6 million for the quarter
ended June 30, 2006, as compared to $10.4 million for the quarter ended June 30,
2005, which represents an increase of 21%. Of this, revenue from the Pay TV
Group's pay-per-view ("PPV") services increased 23% to $7.5 million for the
quarter ended June 30, 2006 from $6.1 million for the quarter ended June 30,
2005. Revenue from the Pay TV Group's video-on-demand ("VOD") service provided
both to the cable and hotel markets, increased 31% to $4.6 million for the
quarter ended June 30, 2006, from $3.5 million for the quarter ended June 30,
2005. Revenue from the Pay TV Group's C-Band service decreased 38% to $0.5
million for the quarter ended June 30, 2006, from $0.8 million for the quarter
ended June 30, 2005.
The Pay TV Group's PPV revenue increased primarily due to the launch of two
of its PPV services on the largest DBS platform in the U.S.
The increase in the Pay TV Group's VOD revenue year-over-year for the
quarter is related to an increase in VOD revenue from platforms where the MSO
has changed the editing standard to be more explicit or from platforms where the
Pay TV Group has launched for the first time. In addition, the Pay TV Group has
successfully recovered some of its lost market share on the VOD platform where
its primary competitor was added over a year ago.
EBITDA for the Pay TV Group was $7.6 million for the quarter ended June 30,
2006, as compared to EBITDA of $5.2 million for the quarter ended June 30, 2005,
representing an increase of 46%. Gross margin for the Pay TV Group increased to
77% for the quarter ended June 30, 2006 from 68% for the quarter ended June 30,
2005. Operating expenses were flat at $2.3 million for both quarters ended June
30, 2006 and 2005, respectively.
Internet Group
The Company's Internet Group reported net revenue of $0.6 million for the
quarter ended June 30, 2006 as compared to revenue of $0.7 million for the
quarter ended June 30, 2005, representing a decrease of 14%. EBITDA for the
Internet Group declined to $0.0 million for the quarter ended June 30, 2006 from
$0.1 million for the quarter ended June 30, 2005.
Film Production Group
New Frontier Media, Inc. completed the acquisition of the Film Production
Group on February 10, 2006.
The Film Production Group reported revenue of $3.1 million, cost of sales of
$2.1 million and EBITDA of $0.1 million for the period ended June 30, 2006.
Results for this segment continue to be impacted by the following factors: a)
higher than normal film amortization costs due to the valuation of the acquired
film library; b) amortization of identifiable purchased intangibles valued at
$3.4 million; and c) accrual of contingent earnout payments related to the
acquisition.
Corporate Administration Expenses
Corporate administration expenses increased 31% to $1.7 million for the
quarter ended June 30, 2006 from $1.3 million for the quarter ended June 30,
2005. The increase in year-over-year quarterly corporate administration expenses
is primarily related to an increase in outside audit fees, stock compensation
expense due to the Company's adoption during the current quarter of the new
accounting pronouncement requiring the expensing of the fair value of stock
options over the vesting period, and the addition of a VP of Marketing and
Corporate Strategy to the executive team in January.
Future Outlook
The Company is updating its guidance for the fiscal year ended March 31,
2007 as follows:
Revenue guidance is updated to $60 million - $62 million from $56.5 million
- - $58.5 million
Net income guidance is updated to $10.0 million - $11.4 million from $7.7
million - $8.9 million
EPS guidance is updated to $0.42 - $0.47 per share from $0.32 - $0.37 per
share
Pre-tax free cash flow is updated to $22 million - $24 million from $18
million - $20 million
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 (866)-250-3615. 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 8, 2006 at (800)-405-2236, access code 11067152#.
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 regarding our fiscal 2007 guidance and the future
outlook related to New Frontier Media 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 worldwide producer and distributor of
adult-themed and general motion picture entertainment. Under the TEN trademark,
the Company delivers seven, full-time adult-themed pay-per-view networks to
cable and satellite operators across the United States. Additionally, the
Company is a leading provider of adult-themed Video-on-Demand content to cable
and satellite platforms, as well as to the hospitality industry. These services
reach over 125 million network homes.
New Frontier Media's MRG Entertainment unit produces original, adult-themed
content and series that are distributed on premium movie channels in the U.S.
and around the world. MRG Entertainment also develops and produces original,
adult-themed event programming that is widely distributed on satellite and cable
platforms in the U.S. Additionally, MRG Entertainment manages a sales operation,
which matches independent, mainstream film producers with film distributors
around the world.
New Frontier Media owns and operates a digital broadcast infrastructure in
Colorado, which serves content to broadcast, IP and wireless networks around the
world.
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,
---------------------------
2006 2005
------------ ------------
Net Sales $ 16,328 $ 11,040
Cost of Sales (5,329) (3,504)
Gross Margin 10,999 7,536
Operating Expenses (5,508) (3,859)
Operating Income 5,491 3,677
Other Income 202 202
Income Before Provision for Income Taxes 5,693 3,879
Provision For Income Taxes (2,144) (1,415)
Net Income $ 3,549 $ 2,464
Basic Income Per Share $ 0.15 $ 0.11
Diluted Income Per Share $ 0.15 $ 0.11
Average outstanding shares of common stock 23,833 22,604
Common stock and common stock equivalents 24,297 23,109
Reconciliation of Net Income to EBITDA as reported
(Unaudited)
Quarter Ended
June 30,
---------------------------
2006 2005
------------ ------------
Net Income $ 3,549 $ 2,464
Adjustments:
Depreciation/Amortization (1) 463 349
Interest Expense 29 17
Interest Income (238) (219)
Income Taxes 2,144 1,415
EBITDA as reported 5,947 4,026
Content Amortization 2,876 1,039
Cash Investments in Content (1,396) (874)
Stock Based Compensation 203 0
Adjusted EBITDA $ 7,630 $ 4,191
(1) Amortization excludes amortization of content
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 Sheets
(Unaudited) (Audited)
(in 000s) (in 000s)
June 30, 2006 March 31, 2006
-------------- --------------
CURRENT ASSETS:
Cash and Cash Equivalents $ 10,521 $ 12,611
Restricted Cash 2,687 2,646
Marketable Securities 15,342 8,730
Accounts Receivable, net 13,301 12,395
Deferred Tax Asset 434 444
Other 1,213 871
TOTAL CURRENT ASSETS 43,498 37,697
EQUIPMENT AND FURNITURE, net 4,080 4,082
OTHER ASSETS:
Prepaid Distribution Rights, net 8,498 8,877
Marketable Securities 1,460 1,936
Recoupable Costs and Producer Advances 1,261 1,203
Film Costs, net 9,312 10,412
Goodwill 18,377 16,744
Other Identifiable Intangible Assets, net 3,333 4,687
Other 1,155 1,127
TOTAL OTHER ASSETS 43,396 44,986
TOTAL ASSETS $ 90,974 $ 86,765
CURRENT LIABILITIES:
Accounts Payable $ 1,946 $ 2,151
Taxes Payable 1,487 677
Producer Payable 580 546
Deferred Revenue 1,136 754
Due to Related Party 0 250
Accrued Compensation 1,243 1,857
Accrued Transport 582 645
Accrued Legal and Accounting fees 110 240
Accrued Liabilities and Other 2,104 1,365
TOTAL CURRENT LIABILITIES 9,188 8,485
LONG TERM LIABILITIES:
Deferred Tax Liability 1,206 1,268
Due to Related Party 903 1,000
Taxes Payable 1,359 1,359
Other 2,378 3,408
TOTAL LONG-TERM LIABILITIES 5,846 7,035
TOTAL LIABILITIES 15,034 15,520
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock 2 2
Additional Paid-in Capital 62,620 61,488
Retained Earnings 13,378 9,829
Accumulated Other Comprehensive Loss (60) (74)
TOTAL SHAREHOLDERS' EQUITY 75,940 71,245
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 90,974 $ 86,765
SOURCE New Frontier Media, Inc.
-0- 08/08/2006
/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 /