8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): June 5, 2007

New Frontier Media, Inc.
(Exact name of registrant as specified in its charter)
Colorado
(State or Other Jurisdiction of Incorporation)
0-23697	84-1084061
(Commission File Number)	(IRS Employer Identification Number)
7007 Winchester Circle, Suite 200, Boulder, Colorado 80301
(Address of Principal Executive Offices)
(303) 444-0900
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

□ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14-12)

□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))

□ Pre-commencement communications pursuant to Rule 13-e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On June 5, 2007, New Frontier Media, Inc., a Colorado corporation (the "Registrant") issued the attached press release that included financial information for its 2007 fiscal full year and fourth quarter. A copy of the press release is furnished as Exhibit 99.1 to this Report on Form 8-K. The information contained in the press release is being furnished to the Commission and shall not be deemed incorporated by reference into any of the Company's registration statements or other filings with the Commission.

The press release presents EBITDA and Adjusted EBITDA - non-GAAP financial measures. 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 measures to the most directly comparable GAAP financial measure.

EBITDA and Adjusted EBITDA measure 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 and Adjusted EBITDA as presented do not represent cash provided or used by operating activities and may not be comparable to similarly titled measures reported by other companies. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

EBITDA and Adjusted EBITDA are 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press release issued by New Frontier Media, Inc. dated June 5, 2007

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)
Dated: June 5, 2007	By:	/s/ Michael Weiner
		Michael Weiner, CEO

EXHIBIT INDEX

Exhibit No.	Exhibits.
99.1	Press Release issued by New Frontier Media, Inc. dated June 5, 2007

EX-99.1

Exhibit 99.1

For Immediate Release

Contact: Karyn L. Miller, Chief Financial Officer

(303) 444-0900 x 102

kmiller@noof.com

New Frontier Media Reports 2007 Fiscal Year and Fourth Quarter Results

BOULDER, COLORADO, June 5, 2007 -- New Frontier Media, Inc. (Nasdaq: NOOF), a worldwide producer and distributor of general and adult-themed motion picture entertainment, today announced its 2007 fiscal year end and 2007 fourth quarter results.

For the full year ended March 31, 2007 the Company reported revenue of $63.3 million, as compared to $46.9 million for the year ended March 31, 2006, representing an increase of 35%. Net income for the 2007 fiscal year was $12.3 million as compared to $11.3 million for the 2006 fiscal year. The Company reported earnings per fully diluted share of $0.51 for the year ended March 31, 2007, as compared to $0.48 per fully diluted share for the year ended March 31, 2006.

“New Frontier Media’s 2007 fiscal year was a success by any measure. Revenue and earnings were up materially versus 2006. We enhanced earnings per share and shareholder value by repurchasing 250,000 shares of our stock and paying a 60 cent per share cash dividend in February. As a result of these initiatives, shareholders realized a 26% total return on their investment over fiscal year 2006,” said Michael Weiner, Chief Executive of New Frontier Media, Inc. “To underscore our commitment to providing superior returns, we’ve begun the new fiscal year with our announcement of a quarterly dividend program of 12.5 cents per share which we will begin paying at the end of this month to shareholders of record yesterday.”

On a quarterly basis, the Company reported a 10% increase in fourth quarter revenue to $14.2 million from $12.9 million for the same quarter a year ago. Net income for the current year quarter was $1.7 million compared to $3.3 million for the same quarter a year ago. The Company reported earnings per fully diluted share of $0.07 for the quarter ended March 31, 2007, as compared with $0.14 per fully diluted share for the same quarter a year ago.

The current year quarter includes a $0.5 million charge for a contingent litigation reserve, a $0.1 million impairment charge related to the Internet Group, and a $0.2 million increase to our tax reserve causing the Company’s quarterly effective tax rate to increase to 46.4%. The Company expects that its effective tax rate in the 2008 fiscal year will be approximately 38.3%. The quarter a year ago reflects a lower tax rate of 25% due to the release of the Company’s valuation allowance for its deferred tax asset related to its net operating losses.

“Our most recently concluded quarter was impacted by a number of one time charges, as well as an anticipated seasonal decline in our Film Production segment’s results,” continued Mr. Weiner. “While our core business is increasingly competitive, we believe that New Frontier Media’s superior performance will work to the Company’s advantage as an expected competitive shakeout occurs over the next two years.”

Pay TV

The Company’s Pay TV Group reported revenue of $11.2 million for the quarter ended March 31, 2007, as compared to $11.1 million for the quarter ended March 31, 2006, representing an increase of 1%. Of this, revenue from the Pay TV Group’s pay-per-view (“PPV”) services declined 4% to $5.5 million for the quarter ended March 31, 2007 from $5.7 million for the quarter ended March 31, 2006. Revenue from the Pay TV Group’s video-on-demand (“VOD”) service provided both to the cable and hotel markets increased 10% to $5.3 million for the quarter ended March 31, 2007, from $4.8 million for the quarter ended March 31, 2006. Revenue from the Pay TV Group’s C-Band service decreased 33% to $0.4 million for the quarter ended March 31, 2007, from $0.6 million for the quarter ended March 31, 2006.

The decrease in the Pay TV Group’s PPV revenue year-over-year for the quarter is due to a decline in revenue from our largest customer as a result of the previously announced finalization of a new licensing arrangement in October 2006, which resulted in an adjustment downward of our historical rates. This revenue decline was partially offset by an increase in revenue from the launch of two of our PPV networks on the largest Direct Broadcasting Satellite (“DBS”) platform in the U.S., which occurred in April 2006.

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 the largest cable Multiple System Operator (“MSO”) in the U.S. This revenue increase was partially offset by the sale of a smaller MSO’s systems to larger multi-channel operators which resulted in a lower license fee on our VOD content from those systems.

Operating income for the Pay TV Group was $5.4 million for the quarter ended March 31, 2007, as compared to operating income of $5.8 million for the quarter ended March 31, 2006, representing a decrease of 7%. Gross margin for the Pay TV Group decreased to 72% for the quarter ended March 31, 2007 from 73% for the quarter ended March 31, 2006, as a result of the $0.5 million contingent litigation reserve accrued for during the fourth quarter. Operating expenses increased 18% to $2.6 million for the quarter ended March 31, 2007 from $2.2 million for the quarter a year ago primarily as a result of an increase in advertising and branding costs.

Internet Group

The Company’s Internet Group reported net revenue of $0.5 million for the quarter ended March 31, 2007 as compared to net revenue of $0.6 million for the quarter ended March 31, 2006, representing a decrease of 17%. Operating income for the Internet Group declined to a loss of $0.2 million for the quarter ended March 31, 2007 from operating income of $0.1 million for the quarter ended March 31, 2006. The current year quarter included a $0.1 million impairment charge.

Film Production Group

The Company completed its acquisition of the Film Production Group on February 10, 2006. The 2006 fiscal fourth quarter results are for the period February 11 through March 31, 2006. The 2007 fiscal fourth quarter results reflect a full three months. Accordingly, we do not believe that a comparative analysis of this segment’s fourth quarter results is meaningful and it is therefore not included in this release.

The Film Production Group reported revenue of $2.5 million, cost of sales of $1.0 million and operating income of $0.3 million for the quarter ended March 31, 2007. The Film Production Group’s gross margin was 60% and operating expenses were $1.2 million for the quarter ended March 31, 2007.

Corporate Administration Expenses

Corporate administration expenses increased 67% to $2.5 million for the quarter ended March 31, 2007 from $1.5 million for the quarter ended March 31, 2006. The increase in year-over-year quarterly corporate administration expenses is primarily related to an increase in stock compensation expense due to the Company’s adoption during the 2007 fiscal year of the new accounting pronouncement requiring the expensing of the fair value of stock options, the addition of chief operating and chief information officers to the executive team, and an increase in legal and accounting expenses.

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)-218-8862. 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 June 5, 2007 at (800)-405-2236, access code 11090935#. 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 belief that our superior performance will work to our advantage as an expected competitive shakeout occurs over the next two years, our expectation that our 2008 fiscal year effective tax rate will be 38.3%, the future outlook related to New Frontier Media andthe 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 most recent 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 timein 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 “The Erotic Networks” ® 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. These services reach over 139 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 United States 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 United States. 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 thousands, except per share amounts)

Unaudited Except FY 2006 Full Year Results

	Quarter Ended March 31,						Year Ended March 31,
	2007			2006			2007			2006
Net Sales	$	14,208		$	12,938		$	63,271		$	46,851
Cost of Sales		(4,363	)		(3,981	)		(19,631	)		(14,421	)
Gross Margin		9,845			8,957			43,640			32,430
Operating Expenses		(6,830	)		(4,772	)		(24,411	)		(16,430	)
Operating Income		3,015			4,185			19,229			16,000
Other Income		200			238			1,076			1,107
Income Before Provision for Income Taxes		3,215			4,423			20,305			17,107
Provision For Income Taxes		(1,493	)		(1,123	)		(7,996	)		(5,824	)
Net Income	$	1,722		$	3,300		$	12,309		$	11,283
Basic Income Per Share	$	0.07		$	0.13		$	0.51		$	0.49
Diluted Income Per Share	$	0.07		$	0.14		$	0.51		$	0.48
Dividends declared by common share	$	-		$	-		$	0.60		$	-
Average outstanding shares of common stock		24,251			23,297			23,920			22,876
Common stock and common stock equivalents		24,571			23,770			24,355			23,338

Reconciliations of EBITDA and Adjusted EBITDA

	Quarter Ended March 31,						Year Ended March 31,
	2007			2006			2007			2006
Net Income	$	1,722		$	3,300		$	12,309		$	11,283
Adjustments:
Depreciation/Amortization (1)		524			489			1,994			1,489
Interest Expense		144			3			229			41
Interest Income		(293	)		(262	)		(1,241	)		(1,155	)
Income Taxes		1,493			1,123			7,996			5,824
EBITDA		3,590			4,653			21,287			17,482
Content Amortization		1,580			1,425			9,560			4,502
Cash Investments in Content		(1,311	)		(1,064	)		(6,778	)		(3,510	)
Capital Expenditures		(912	)		(393	)		(1,786	)		(991	)
Stock Based Compensation		328			-			1,034			-
Adjusted EBITDA	$	3,275		$	4,621		$	23,317		$	17,483

(1) Amortization excludes amortization of content

Consolidated Balance Sheets
(In thousands)	(Unaudited)			(Audited)
	March 31, 2007			March 31, 2006
CURRENT ASSETS:
Cash and Cash Equivalents	$	17,345		$	12,611
Restricted Cash		1,710			2,646
Marketable Securities		8,681			8,730
Accounts Receivable, net		12,249			12,395
Deferred Tax Asset		528			444
Other Current Assets		2,863			871
TOTAL CURRENT ASSETS		43,376			37,697
Equipment and Furniture, net		4,534			4,082
Prepaid Distribution Rights, net		9,084			8,877
Marketable Securities		587			1,936
Recoupable Costs and Producer Advances		1,278			1,203
Film Costs, net		6,991			10,412
Goodwill		18,608			16,744
Other Identifiable Intangible Assets, net		2,771			4,687
Other		987			1,127
TOTAL ASSETS	$	88,216		$	86,765
CURRENT LIABILITIES:
Accounts Payable	$	1,942		$	2,151
Taxes Payable		0			677
Producer Payable		1,049			546
Deferred Revenue		889			754
Due to Related Party		647			250
Accrued Compensation		3,298			1,857
Deferred Producer Liabilities		1,344			810
Accrued and Other Liabilities		3,664			1,440
TOTAL CURRENT LIABILITIES		12,833			8,485
Deferred Tax Liability		976			1,268
Due to Related Party		0			1,000
Taxes Payable		1,726			1,359
Other Long-Term Liabilities		982			3,408
TOTAL LIABILITIES		16,517			15,520
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock		2			2
Additional Paid-in Capital		64,191			61,488
Retained Earnings		7,536			9,829
Accumulated Other Comprehensive Loss		(30	)		(74	)
TOTAL SHAREHOLDERS' EQUITY		71,699			71,245
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	88,216		$	86,765