-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Obq9TtHMc2Wuv7sZpOcpILNM0gKvJ2zSQnR/Z6W5/bqc0Fqqj6jnatA/hXsl2hOE HYqA9zLFjr54D9FGSRIIrQ== 0000891092-04-002667.txt : 20040527 0000891092-04-002667.hdr.sgml : 20040527 20040527093226 ACCESSION NUMBER: 0000891092-04-002667 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040527 ITEM INFORMATION: FILED AS OF DATE: 20040527 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW FRONTIER MEDIA INC CENTRAL INDEX KEY: 0000847383 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE DISTRIBUTION [7822] IRS NUMBER: 841084061 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23697 FILM NUMBER: 04833705 BUSINESS ADDRESS: STREET 1: 5435 AIRPORT BLVD STREET 2: SUITE 100 CITY: BOULDER STATE: CO ZIP: 80301 BUSINESS PHONE: 3034440632 FORMER COMPANY: FORMER CONFORMED NAME: NEW FRONTIER MEDIA INC /CO/ DATE OF NAME CHANGE: 19970627 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL SECURITIES HOLDING CORPORATION DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: STRATEGIC ACQUISITIONS INC DATE OF NAME CHANGE: 19600201 8-K 1 e18045_8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Date of Report (Date of earliest event reported): May 27, 2004 NEW FRONTIER MEDIA, INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) Colorado 0-23697 84-1084061 ------------- --------------- ----------------- (State of (Commission File (IRS Employer I.D. Incorporation) Number) Number) 7007 Winchester Circle Suite 200 Boulder, Colorado 80301 (303) 444-0900 ------------------------------- (Address and telephone number of principal executive offices) Item 12. Results of Operations and Financial Condition On May 27, 2004, New Frontier Media, Inc., a Colorado corporation (the "Registrant") issued the attached press release that included financial information for the fourth quarter of fiscal 2004. A copy of the press release is attached as Exhibit 99.1 to this Report on Form 8-K. The information contained in the press release shall not be deemed incorporated by reference into any of the Company's registration statements filed with the Commission. The press release presents EBITDA - - a non-GAAP financial measure. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that exclude amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Registrant has provided a reconciliation within the earnings release of the non-GAAP financial measure to the most directly comparable GAAP financial measure. EBITDA measures the amount of income generated each period by the Registrant that could be used to service debt, pay taxes and fund capital expenditures. It is important to note, however, that EBITDA does not represent cash provided or used by operating activities. EBITDA should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. EBITDA is presented in the press release because the Registrant's management uses this information in evaluating the operating efficiency and overall financial performance of its business. The Registrant's management also believes that this information provides the users of the Registrant's financial statements a valuable insight into its operating results. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. NEW FRONTIER MEDIA, INC. (Registrant) May 27, 2004 By: /S/ MICHAEL WEINER ---------------------- Michael Weiner, Chief Executive Officer 3 EXHIBIT INDEX Exhibit No. Exhibits. - ----------- --------- 99.1 Press Release issued by New Frontier Media, Inc. dated May 27, 2004 4 EX-99.1 2 e18045ex99_1.txt PRESS RELEASE Exhibit 99.1 New Frontier Media Reports Earnings Per Share of 14 Cents for Its 2004 Fourth Quarter BOULDER, Colo., May 27 /PRNewswire-FirstCall/ -- New Frontier Media, Inc. (Nasdaq: NOOF), a leader in the electronic distribution of adult entertainment, announced that it reported earnings per fully diluted common share of $0.14 for its fourth quarter ended March 31, 2004. The Company reported net income for the fiscal 2004 fourth quarter of $3.3 million as compared to net income of $0.7 million, or $0.04 of earnings per fully diluted common share, for the quarter a year ago, representing an increase of 371% in net income year-over-year for the quarter. Net revenue for the current year quarter was $11.1 million compared to $9.3 million for the quarter a year ago, representing an increase of 19%. The Company reported EBITDA (earnings before interest, taxes, depreciation and non-content related amortization) of $3.7 million for the quarter ended March 31, 2004, as compared to $2.0 million for the quarter ended March 31, 2003, which is determined prior to restructuring charges of $0.3 million related to the Internet Group. "Fiscal 2004 was a watershed year for New Frontier Media. We generated excellent results driven by the growth in the VOD market and the growing recognition of the profit opportunity in adult content. We grew revenue, margins, and cash flows this year, while strengthening our balance sheet through the redemption of all of our Class A and B preferred stock," stated Michael Weiner, Chief Executive Officer. "As we begin Fiscal 2005, we look forward to increasing our pay-per-view and VOD distribution through recently completed affiliate agreements. Also this year, we will look for new ways to leverage our broadcast and Internet assets while remaining a leader in the distribution of adult content to current and emerging platforms," continued Mr. Weiner. Pay TV The Company's Pay TV Group reported revenue of $10.4 million for the quarter ended March 31, 2004, as compared to $8.0 million for the quarter ended March 31, 2003, which represents an increase of 30%. Of this, revenue from the Pay TV Group's Cable/DBS/Hotel services increased 59% to $9.7 million for the quarter ended March 31, 2004, from $6.1 million for the quarter ended March 31, 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 to both cable operators and the hospitality industry. The Pay TV Group's VOD service, branded as TEN*On Demand, is now distributed to 10.5 million VOD enabled cable households and 900,000 hotel rooms in the U.S. The Pay TV Group adjusted its deferred revenue calculation by $0.4 million in the fourth quarter, resulting in a decrease in its C-Band revenue. Revenue from the Group's C-Band services, determined without giving effect to the fourth quarter adjustment in revenue, declined 42% to $1.1 million for the quarter ended March 31, 2004, from $1.9 million for the quarter a year ago. This market remains profitable for the Pay TV Group; however, management is monitoring the margins closely as the consumer market continues to migrate away from this platform. EBITDA for the Pay TV Group was $4.8 million for the quarter ended March 31, 2004, as compared to EBITDA of $3.2 million for the quarter ended March 31, 2003, representing an increase of 50%. Gross margin for the Pay TV Group increased to 62% for the quarter ended March 31, 2004, from 57% for the quarter a year ago. Operating expenses declined from 24% of net revenue for the quarter ended March 31, 2003 to 18% for the quarter ended March 21, 2004, as overall operating expenses remained flat at $1.9 million for both quarters ended March 31, 2004 and 2003, respectively. Internet Group The Company's Internet Group reported net revenue of $0.7 million for the quarter ended March 31 2004, as compared to $1.3 million for the quarter ended March 31, 2003, representing a decrease of 46%. Gross margin for the Internet Group increased to 57% for the current year quarter from 52% for the quarter a year ago. EBITDA for the Internet Group was $0.2 million for both quarters ended March 31, 2004 and 2003, respectively. EBITDA was determined before restructuring charges of $0.3 million for the quarter ended March 31, 2003. Corporate Administration Expenses Corporate administration expenses were $1.3 million and $1.4 million for the quarters ended March 31, 2004 and 2003, respectively. Future Outlook The Company is providing the following guidance for its fiscal year ended March 31, 2005: * Revenue of $47 -- $50 million * Net Income of $9.8 million -- $12 million * EPS guidance of $0.41 -- $0.50 per fully diluted share * Net Income and EPS guidance calculated utilizing a 30% effective tax rate The Company reminds its shareholders that it was not a taxpayer for the 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 May 27, 2004 at (800)-405-2236, access code 580644. 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 increasing our pay-per-view and VOD distribution through recently completed affiliate agreements, new ways to leverage our broadcast and Internet assets while remaining the leader in the distribution of adult content to current and emerging platforms, 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 62 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 Twelve Months Ended Ended March 31, March 31, 2004 2003 2004 2003 Revenue $11,099 $9,280 $42,878 $36,747 Cost of Sales (4,288) (4,056) (16,696) (18,197) Gross Profit 6,811 5,224 26,182 18,550 Operating Expenses (3,496) (4,314) (14,466) (23,543) Operating Income (Loss) 3,315 910 11,716 (4,993) Other Expense 19 (193) (796) (1,631) Net Income (Loss) Before Taxes $3,334 $717 $10,920 ($6,624) Provision for income taxes (5) (5) (7) (5,271) Net Income (Loss) $3,329 $712 $10,913 ($11,895) Basic Income (Loss) Per Share $0.15 $0.04 $0.53 ($0.56) Diluted Income (Loss) Per Share $0.14 $0.04 $0.50 ($0.56) Basic shares outstanding 21,872 20,854 20,522 21,319 Diluted shares outstanding 23,529 21,373 21,892 21,319 Reconciliation of Net Income (Loss) to EBITDA as reported Quarter Twelve Months Ended Ended March 31, March 31, 2004 2003 2004 2003 Net Income (Loss) $3,329 $712 $10,913 ($11,895) Adjustments: Dep'n and Amort.(1) 334 744 1,936 3,469 Interest Expense 70 261 1,157 1,633 Interest Income (19) (10) (50) (62) Income Taxes 5 5 7 5,271 Loss on non-cash write off 0 0 0 118 Restructuring/Impair. 0 303 0 4,571 EBITDA as reported $3,719 $2,015 $13,963 $3,105 (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) March 31 March 31, 2004 2003 CURRENT ASSETS: Cash and cash equivalents $15,352 $4,264 Accounts receivable, net 6,872 5,680 Investments 1,478 0 Prepaid expenses 497 610 Other 236 452 TOTAL CURRENT ASSETS 24,435 11,006 FURNITURE AND EQUIPMENT, net 3,727 3,951 OTHER ASSETS: Prepaid distribution rights, net 11,627 11,520 Goodwill 3,743 3,743 Other identifiable intangible assets, net 356 1,124 Deposits 156 567 Investments 100 0 Other 618 3,114 TOTAL OTHER ASSETS 16,600 20,068 TOTAL ASSETS $44,762 $35,025 CURRENT LIABILITIES: Accounts payable $1,767 $2,606 Current portion of capital lease obligations 356 996 Deferred revenue 1,304 2,223 Accrued restructuring expense 1,026 1,304 Note Payable 653 0 Accrued Compensation 952 478 Accrued Liabilities 1,259 747 TOTAL CURRENT LIABILITIES 7,317 8,354 LONG TERM LIABILITIES: Obligations under capital lease, net of current portion 154 465 Note Payable, net of current portion 275 0 Redeemable preferred stock 0 3,750 TOTAL LONG-TERM LIABILITIES 429 4,215 TOTAL LIABILITIES 7,746 12,569 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common stock 2 2 Additional paid-in capital 49,590 45,943 Accumulated deficit (12,576) (23,489) TOTAL SHAREHOLDERS' EQUITY 37,016 22,456 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $44,762 $35,025 SOURCE New Frontier Media, Inc. -0- 05/27/2004 /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: ENT TVN FLM CPR MLM ITE ECM SU: ERN CCA ERP -----END PRIVACY-ENHANCED MESSAGE-----