-----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, M8IzajkPF7GA03ddd/x+1F9HJgD9Snldvx7XYv3e882EW6qReRbi+ih4nL5qmW/h MsM7faf4MHoqA81ctqyH7Q== 0001275287-06-000671.txt : 20060207 0001275287-06-000671.hdr.sgml : 20060207 20060207100041 ACCESSION NUMBER: 0001275287-06-000671 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060207 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060207 DATE AS OF CHANGE: 20060207 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: 06583835 BUSINESS ADDRESS: STREET 1: 7007 WINCHESTER CIRCLE STREET 2: SUITE 200 CITY: BOULDER STATE: CO ZIP: 80301 BUSINESS PHONE: 3037868700 MAIL ADDRESS: STREET 1: 7007 WINCHESTER CIRCLE STREET 2: SUITE 200 CITY: BOULDER STATE: CO ZIP: 80301 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 nf4738.txt FORM 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): February 7, 2006 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 February 7, 2006, New Frontier Media, Inc., a Colorado corporation (the "Registrant") issued the attached press release that included financial information for its third quarter of fiscal 2006. 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 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 - - 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. Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit 99.1 Press release issued by New Frontier Media, Inc. dated February 7, 2006 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: February 7, 2006 By: /s/ Michael Weiner --------------------- Michael Weiner, CEO EXHIBIT INDEX Exhibit No. Exhibits. - ----------- ------------------------------------------------------------------ 99.1 Press Release issued by New Frontier Media, Inc. dated February 7, 2006 EX-99.1 2 nf4738ex991.txt EXHIBIT 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 THIRD QUARTER RESULTS OF $0.12/SHARE BOULDER, COLORADO, February 7, 2006 -- New Frontier Media, Inc. (Nasdaq: NOOF), a leader in the electronic distribution of adult entertainment, announced its third quarter results of $0.12 per fully diluted share, net of a quarterly tax rate of 38%. This compares with $0.13 per fully diluted share, net of a 36% quarterly tax rate, for the same quarter a year ago. The Company reported net revenue for the current year quarter of $11.5 million compared to $12.0 million for the same quarter a year ago, representing a decrease of 4%. Net income for both the current year quarter and the quarter a year ago was $2.9 million. "We are extremely pleased by the fact that we added 6 million new network households during our third quarter, most of which were a result of new launches of our pay-per-view networks. We now provide our services to over 89 million network households," stated Michael Weiner, Chief Executive Officer of New Frontier Media, Inc. PAY TV - ------ The Company's Pay TV Group reported revenue of $10.9 million for the quarter ended December 31, 2005, as compared to $11.3 million for the quarter ended December 31, 2004, which represents a decrease of 4%. Of this, revenue from the Pay TV Group's pay-per-view ("PPV") services declined 2% to $6.2 million for the quarter ended December 31, 2005 from $6.3 million for the quarter ended December 31, 2004. Revenue from the Pay TV Group's video-on-demand ("VOD") service, provided both to the cable and hotel markets, declined 2% to $4.0 million for the quarter ended December 31, 2005, from $4.1 million for the quarter ended December 31, 2004. Revenue from the Pay TV Group's C-Band service decreased 22% to $0.7 million for the quarter ended December 31, 2005, from $0.9 million for the quarter ended December 31, 2004. The Pay TV Group's PPV revenue increased due to new launches of TEN*Clips and TEN*Blox by a top five cable operator. The increase in revenue from these new launches was offset by two affiliated systems of two different cable operators transitioning adult from their digital PPV platform to VOD only. We do not anticipate that any other cable operators will be transitioning their adult content in this manner in the near future. Additionally, one of these affiliated cable systems re-launched our TEN*Blox network during the current year quarter in order to recapture some of these lost purchases. The decrease in the Pay TV Group's VOD revenue is related to increased competition on platforms where the Pay TV Group had previously been the only provider of adult content. Declines in the Pay TV Group's cable VOD revenue as a result of increased competition was slightly offset by an increase in revenue from new VOD launches during the year. EBITDA for the Pay TV Group was $5.9 million for the quarter ended December 31, 2005, as compared to EBITDA of $6.1 million for the quarter ended December 31, 2004, representing a decrease of 3%. Gross margin for the Pay TV Group increased to 71% for the quarter ended December 31, 2005 from 67% for the quarter ended December 31, 2004. Operating expenses increased 11% year-over-year for the quarter primarily due to an increase in commission expense. INTERNET GROUP - -------------- The Company's Internet Group reported net revenue of $0.7 million for both quarters ended December 31, 2005 and 2004. EBITDA for the Internet Group declined to $0.1 million for the quarter ended December 31, 2005 from $0.2 million for the quarter ended December 31, 2004. EBITDA for the quarter ended December 31, 2004 excludes a one-time restructuring gain of $0.1 million. CORPORATE ADMINISTRATION EXPENSES - --------------------------------- Corporate administration expenses were flat at $1.5 million for both quarters ended December 31, 2005 and 2004. FUTURE OUTLOOK - -------------- The Company is updating its Fiscal 2006 guidance to be as follows: Revenue is updated to $47 - 48 million from $44.5 - 46 million Net Income is updated to $10.4 - $11.0 million from $9.1 - $ 10.0 million EPS is updated to $0.44 - $0.47/ share from $0.39 - $0.43/share 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)-250-2351. 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 February 7, 2006 at (800)-405-2236, access code 11052886#. 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 2006 guidance, 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 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, wireless 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 89 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) (UNAUDITED) QUARTER ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenue $ 11,524 $ 11,991 $ 33,912 $ 35,493 Cost of Sales (3,441) (4,000) (10,735) (12,078) ---------- ---------- ---------- ---------- Gross Profit 8,083 7,991 23,177 23,415 Operating Expenses (3,835) (3,553) (11,362) (10,763) ---------- ---------- ---------- ---------- Operating Income 4,248 4,438 11,815 12,652 Other Income/(Expense) 373 118 869 195 ---------- ---------- ---------- ---------- Net Income Before Taxes 4,621 4,556 12,684 12,847 Provision for income taxes (1,743) (1,632) (4,702) (4,133) ---------- ---------- ---------- ---------- Net Income $ 2,878 $ 2,924 $ 7,982 $ 8,714 ========== ========== ========== ========== Basic Income Per Share $ 0.13 $ 0.13 $ 0.35 $ 0.39 ========== ========== ========== ========== Diluted Income Per Share $ 0.12 $ 0.13 $ 0.34 $ 0.38 ========== ========== ========== ========== Basic shares outstanding 22,863 21,995 22,738 22,194 ========== ========== ========== ========== Diluted shares outstanding 23,258 22,864 23,196 23,143 ========== ========== ========== ==========
RECONCILIATION OF NET INCOME TO EBITDA AS REPORTED
(UNAUDITED) (UNAUDITED) QUARTER ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Net Income $ 2,878 $ 2,924 $ 7,982 $ 8,714 Adjustments: Depreciation/Amortization (1) 293 427 939 1,331 Interest Expense 9 23 38 85 Interest Income (369) (120) (893) (235) Income Taxes 1,743 1,632 4,702 4,133 Restructuring Recovery 0 (146) 0 (146) ---------- ---------- ---------- ---------- EBITDA as reported $ 4,554 $ 4,740 $ 12,768 $ 13,882 ========== ========== ========== ==========
(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
(UNAUDITED) (AUDITED) (IN 000S) (IN 000S) DECEMBER 31, MARCH 31, 2005 2005 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 22,910 $ 18,403 Marketable Securities 15,192 9,075 Accounts receivable, net 9,195 8,034 Prepaid expenses 568 529 Deferred Tax Asset 404 382 Income Tax Receivable 0 157 Other 422 564 ------------ ------------ TOTAL CURRENT ASSETS 48,691 37,144 ------------ ------------ FURNITURE AND EQUIPMENT, net 3,874 4,191 ------------ ------------ OTHER ASSETS: Prepaid distribution rights, net 9,088 9,721 Marketable Securities 3,888 4,547 Deferred Tax Asset 83 0 Goodwill 3,743 3,743 Other identifiable intangible assets, net 17 101 Other 938 837 ------------ ------------ TOTAL OTHER ASSETS 17,757 18,949 ------------ ------------ TOTAL ASSETS $ 70,322 $ 60,284 ============ ============ CURRENT LIABILITIES: Accounts payable $ 1,537 $ 1,868 Current portion of capital lease 19 154 obligations Deferred revenue 509 484 Current portion of notes payable 0 275 Taxes Payable 1,597 0 Accrued Liabilities 2,941 2,871 ------------ ------------ TOTAL CURRENT LIABILITIES 6,603 5,652 ------------ ------------ LONG TERM LIABILITIES: Deferred Rent 204 205 Deferred tax liability 0 5 Other 679 756 TOTAL LONG-TERM LIABILITIES 883 966 ------------ ------------ TOTAL LIABILITIES 7,486 6,618 ------------ ------------ COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common stock 2 2 Additional paid-in capital 56,393 55,173 Accumulated deficit 6,528 (1,454) Other comprehensive income/(loss) (87) (55) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 62,836 53,666 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 70,322 $ 60,284 ============ ============
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