New Frontier Media Releases 2nd Quarter Results
"New Frontier Media has made meaningful progress towards its fiscal 2011 objectives," said Michael Weiner, chief executive officer of New Frontier Media.
"We have been successful in growing our transactional TV international revenue with little incremental investment in the business thus far, and we recently launched our content in Asia and are optimistic that this region will provide another opportunity to expand our international revenue.”
He added that during the most recent quarter, the company began making additional investments to support and further expand the international services including the licensing of new pay-per-view channels in Latin America and Europe as well as the addition of storage equipment to support international content packages.
“We believe these investments will allow us to further expand our services into international markets and provide us with the necessary infrastructure for success,” he said.
"We were also encouraged by the slight increase in our sequential transactional TV segment revenue as compared to the first quarter of fiscal year 2011 and believe this may be a further indication of the stabilization of the segment's domestic revenue.”
Weiner said that for the film production segment, the company is distributing mainstream-repped content to domestic VOD platforms and expects to complete a producer-for-hire arrangements by the end of the fiscal year.
Although the film markets continue to be challenging as evidenced by the non-cash charges that were incurred during the most recent quarter, we believe the Film Production segment continues to provide the Company with opportunities,” he said.
He added cash balances continue to be solid at $14.8 million despite the company’s $3.6 million investment in the producer-for-hire project, $400,000 use of cash to repurchase shares and other uses of cash to invest in international expansion services.
“We believe these investments will provide shareholder return over the long-term and overall, New Frontier Media will continue to be a leader in its industry for the foreseeable future," Weiner said.
Revenue was approximately $11.2 million as compared to $11.4 million in the same prior year quarter and reflected Transactional TV segment revenue, which was $9.1 million as compared to $9.3 million in the same prior year quarter; Pay-per-view ("PPV") revenue declined to $3.4 million as compared to $4.2 million in the same prior year quarter primarily due to a $500,000 decline in revenue from the loss of a channel on a U.S. digital broadcast satellite ("DBS") platform in November 2009; cost of sales increased to $4.3 million as compared to $4 million in the same prior year quarter due to higher transponder and transport costs incurred primarily to support the Transactional TV segment's international distribution of PPV and VOD content; operating expenses increased to $7.2 million as compared to $5.5 million in the same prior year quarter.