-----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, R2sPDR2/wyaPEO96VzIxuWFKegsJyAIuB0zcFFqJ4ikdgACIsxrDNEZZN9HO5jOJ KCuAWJd5WPMXxNiRCyj4Mg== 0000891092-04-003909.txt : 20040805 0000891092-04-003909.hdr.sgml : 20040805 20040805094914 ACCESSION NUMBER: 0000891092-04-003909 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040805 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20040805 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: 04953377 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 e18738_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): August 5, 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 August 5, 2004, New Frontier Media, Inc., a Colorado corporation (the "Registrant") issued the attached press release that included financial information for the first quarter of fiscal 2005. 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) August 5, 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 August 5, 2004 4 EX-99.1 2 e18738ex991.txt PRESS RELEASE Exhibit 99.1 New Frontier Media Reports Strong First Fiscal Quarter BOULDER, Colo., Aug. 5 /PRNewswire-FirstCall/ -- New Frontier Media, Inc. (Nasdaq: NOOF), a leader in the electronic distribution of adult entertainment, announced a strong first fiscal quarter, reporting operating income of $3.9 million as compared to operating income of $2.3 million for the quarter ended June 30, 2003, representing an increase of 70%. The Company reported EBITDA (earnings before interest, taxes, depreciation and non-content related amortization) of $4.3 million for the quarter ended June 30, 2004, as compared to $2.8 million for the quarter ended June 30, 2003, representing an increase of 54%. The Company reported net revenue for the current year quarter of $11.5 million compared to $10.1 million for the quarter a year ago, representing an increase of 14%. Net income for the fiscal 2005 first quarter increased 35% to $2.7 million as compared to net income of $2.0 million for the quarter a year ago. Earnings per fully diluted common share were reported as $0.12 for the current year quarter versus earnings per fully diluted common share of $0.10 per share for the quarter a year ago. Net income and earnings per share for the current year quarter were 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 are very pleased with our first quarter results. This represents our sixth consecutive quarter of profitability. We continue to show improved operating income, EBITDA and cash flows from operations. It is important to remember that this is the first quarter in which our net income and earnings per share reflect a provision for income taxes, utilizing an effective tax rate of 30%. We expect our effective book tax rate to be 30% for the full fiscal year, while we expect that our cash taxes will be considerably lower at less than $1 million," stated Michael Weiner, Chief Executive Officer. Pay TV The Company's Pay TV Group reported revenue of $10.8 million for the quarter ended June 30, 2004, as compared to $9.1 million for the quarter ended June 30, 2003, which represents an increase of 19%. Of this, revenue from the Pay TV Group's Cable/DBS/Hotel services increased 35% to $9.7 million for the quarter ended June 30, 2004, from $7.2 million for the quarter ended June 30, 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. The Pay TV Group's VOD service, branded as TEN*On Demand, is now distributed to 13.2 million VOD enabled cable households, an 89% increase over the quarter a year ago, and 900,000 hotel rooms in the U.S. Revenue from the Group's C-Band services declined 42% to $1.1 million for the quarter ended June 30, 2004, from $1.9 million for the quarter a year ago. EBITDA for the Pay TV Group was $5.7 million for the quarter ended June 30, 2004, as compared to EBITDA of $3.9 million for the quarter ended June 30, 2003, representing an increase of 46%. Gross margin for the Pay TV Group increased to 67% for the quarter ended June 30, 2004, from 62% for the quarter a year ago. Operating expenses declined from 24% of net revenue for the quarter ended June 30, 2003 to 18% for the quarter ended June 30, 2004, as overall operating expenses declined 14% to $1.9 million for the current year quarter from $2.2 million for the quarter a year ago. Internet Group The Company's Internet Group reported net revenue of $0.7 million for the quarter ended June 30, 2004, as compared to $1.0 million for the quarter ended June 30, 2003, representing a decrease of 30%. EBITDA for the Internet Group was breakeven for the quarter ended June 30, 2004, as compared to $0.3 million for the quarter a year ago. Operating expenses for the current year quarter included a $0.2 million non-recurring charge for the settlement of a lawsuit. Corporate Administration Expenses Corporate administration expenses were $1.3 million for both quarters ended June 30, 2004 and 2003, respectively. Future Outlook The Company is updating its guidance for its fiscal year ended March 31, 2005 as follows: * Revenue guidance updated from $47 - $50 million to $48 - $50 million * Net income guidance updated from $9.8 million - $12 million to $10.9 million - $12.4 million * EPS range narrowed from $0.41 - $0.50 per fully diluted share to $0.46 - $0.52 per fully diluted share * Net Income and EPS guidance continue to be calculated utilizing a 30% effective tax rate The Company continues to remind its shareholders that it was able to utilize its net operating losses to offset its tax expense for the fiscal 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 August 5, 2004 at (800)-405-2236, access code 11004575. 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 our effective book tax rate will continue at 30% for the current fiscal year while our cash taxes will be considerably lower at less than $1 million, 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 67 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) (Unaudited) Quarter Ended June 30, 2004 2003 Revenue $11,476 $10,081 Cost of Sales (3,945) (3,893) Gross Profit 7,531 6,188 Operating Expenses (3,632) (3,930) Operating Income 3,899 2,258 Other Expense (1) (236) Net Income Before Taxes $3,898 $2,022 Provision for income taxes (1,170) 0 Net Income $2,728 $2,022 Basic Income Per Share $0.12 $0.10 Diluted Income Per Share $0.12 $0.10 Basic shares outstanding 22,101 19,750 Diluted shares outstanding 22,956 20,191 Reconciliation of Net Income to EBITDA as reported Quarter Ended June 30, 2004 2003 Net Income $2,728 $2,022 Adjustments: Dep'n and Amort.(1) 450 516 Interest Expense 34 309 Interest Income (33) (11) Income Taxes 1,170 0 EBITDA as reported $4,349 $2,836 (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 fiilings with the Securities and Exchange Commission. To obtain a copy please contact New Frontier Media, Inc. Consolidated Balance Sheet (in 000s) (Unaudited) June 30, March 31, 2004 2004 CURRENT ASSETS: Cash and cash equivalents $18,999 $15,352 Investments 2,946 1,478 Accounts receivable, net 6,148 6,872 Prepaid expenses 479 497 Other 284 236 TOTAL CURRENT ASSETS 28,856 24,435 FURNITURE AND EQUIPMENT, net 3,742 3,727 OTHER ASSETS: Prepaid distribution rights, net 10,823 11,627 Goodwill 3,743 3,743 Other identifiable intangible assets, net 292 356 Deposits 155 156 Deferred Tax Asset 165 0 Other 619 718 TOTAL OTHER ASSETS 15,797 16,600 TOTAL ASSETS $48,395 $44,762 CURRENT LIABILITIES: Accounts payable $1,242 $1,767 Current portion of capital lease obligations 306 356 Deferred revenue 959 1,304 Current portion of notes payable 273 653 Taxes Payable 115 0 Accrued restructuring expense 1,022 1,026 Accrued Compensation 846 952 Accrued Liabilities 1,176 1,259 TOTAL CURRENT LIABILITIES 5,939 7,317 LONG TERM LIABILITIES: Obligations under capital lease, net of current portion 100 154 Note Payable, net of current portion 205 275 TOTAL LONG-TERM LIABILITIES 305 429 TOTAL LIABILITIES 6,244 7,746 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common stock 2 2 Additional paid-in capital 51,997 49,590 Accumulated deficit (9,848) (12,576) TOTAL SHAREHOLDERS' EQUITY 42,151 37,016 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $48,395 $44,762 SOURCE New Frontier Media, Inc. -0- 08/05/2004 /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.sec.gov / /Web site: http://www.noof.com / (NOOF) CO: New Frontier Media, Inc. ST: Colorado IN: ENT FLM SU: ERN CCA -----END PRIVACY-ENHANCED MESSAGE-----