BEVERLY HILLS, CA — (Marketwired) — 04/23/13 — Spark Networks, Inc. (NYSE MKT: LOV)
Spark Networks, Inc. (NYSE MKT: LOV), a leader in creating niche-focused brands that build and strengthen the communities they serve, today reported financial results for the first quarter ended March 31, 2013.
“The momentum we generated in 2012 continued in the first quarter of 2013, which represented yet another record-setting quarter for us,” said Greg Liberman, President and Chief Executive Officer of Spark Networks. “Company-wide revenue increased 19%, to mark our ninth consecutive quarter of year-over-year revenue growth and average paying subscribers hit an all-time high of almost 296,000. Our category-leading Christian Networks segment continued to drive that growth, as revenue increased another 45% on the back of a 51% increase in average paying subscribers. At the same time, our Jewish Networks segment delivered another solid quarter, generating contribution margins of nearly 90%.”
“Going forward, we will continue to execute against our long-term strategic plan by strengthening our brands and leadership positions in the Christian and Jewish markets. 2013 is off to a strong start, and we look forward to continuing to build upon our momentum throughout the remainder of the year.”
Revenue was $17.3 million, an increase of 19% compared to $14.6 million in the first quarter of 2012, and an increase of 6% compared to $16.3 million in the prior quarter. The Christian Networks segment was the primary driver of that growth.
Contribution(3) was $4.6 million, an increase of 26% compared to $3.6 million in the first quarter of 2012, and an increase of 24% compared to $3.7 million in the prior quarter.
Total cost and expenses were $20.1 million, an increase of 16% compared to $17.3 million in the first quarter of 2012, and an increase of 6% compared to $18.9 million in the prior quarter. The higher costs in the first quarter of 2013 reflect an increase in direct marketing investments, higher legal fees associated with certain litigation matters, fees associated with certain SEC filings and accounting fees associated with some specific tax planning projects. The Company has made progress in the litigation matters and does not anticipate incurring similar increases in legal fees for the remainder of the year. Additionally, the Company does not believe it will incur any significant additional costs associated with its SEC filings or tax planning projects. In the first quarter of 2013, the total costs associated with litigation legal fees, SEC filing and special tax planning projects added approximately $552,000 to general and administrative expenses.
Net loss was $2.9 million, or $0.14 per share, compared to a net loss of $1.7 million or $0.08 per share, in the first quarter of 2012 and a net loss of $10.5 million or $0.51 per share in the prior quarter.
Adjusted EBITDA(4) was a loss of $2.2 million, compared to a loss of $2.1 million in the first quarter of 2012.
Average paying subscribers for the Jewish Networks, Christian Networks and Other Networks segments were 295,531, an increase of 23% compared to 240,706 in the first quarter of 2012 and an increase of 6% compared to 279,260 in the prior quarter.
As of March 31, 2013, the Company had cash and cash equivalents of $8.0 million, a decrease of 24% from $10.5 million at December 31, 2012. As of March 31, 2013, the Company had no outstanding debt.
The Company will discuss its financial results during a live teleconference today at 1:30 p.m. Pacific time.
Toll-Free (United States): 1-877-407-0789
International: 1-201-689-8562
In addition, the Company will host a webcast of the call which will be accessible in the Investor Relations section of the Company-s website at or by clicking .
A replay will begin approximately three hours after completion of the call and run until May 7, 2013.
Replay
Toll-Free (United States): 1-877-870-5176
International: 1-858-384-5517
Passcode: 411734
This press release contains forward-looking statements. Any statements in this news release that are not statements of historical fact may be considered to be forward-looking statements. Written words, such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “intends,” “goal,” “objective,” “seek,” “attempt,” or variations of these or similar words, identify forward-looking statements. By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the near future. There are a number of factors that could cause actual results and developments to differ materially, including, but not limited to our ability to: attract members; convert members into paying subscribers and retain our paying subscribers; develop or acquire new product offerings and successfully implement and expand those offerings; keep pace with rapid technological changes; maintain the strength of our existing brands and maintain and enhance those brands and our dependence upon the telecommunications infrastructure and our networking hardware and software infrastructure; estimate on-going general and administrative costs, and obtain financing on acceptable terms. For a discussion of these and further risks and uncertainties, please see our filings with the Securities and Exchange Commission. We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information that we file at the SEC-s public reference room at 100 F Street, N.E., Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our public filings with the SEC also are available from commercial document retrieval services and at the Web site maintained by the SEC at .
The Spark Networks portfolio of consumer Web sites includes, among others, JDate®.com (), ChristianMingle.com (), Spark®.com (), BlackSingles.com(), and SilverSingles®.com ().
(1) “Average paying subscribers” are defined as individuals who have paid a monthly fee for access to communication and Web site features beyond those provided to our members. Average paying subscribers for each month are calculated as the sum of the paying subscribers at the beginning and end of the month, divided by two. Average paying subscribers for periods longer than one month are calculated as the sum of the average paying subscribers for each month, divided by the number of months in such period.
(2) “Contribution Margin” is defined as Contribution divided by revenue, net of credits and credit card chargebacks.
(3) “Contribution” is defined as revenue, net of credits and credit card chargebacks, less direct marketing.
(4) The Company reports Adjusted EBITDA as a supplemental measure to generally accepted accounting principles (“GAAP”). This measure is one of the primary metrics by which we evaluate the performance of our businesses, budget, forecast and compensate management. We believe this measure provides management and investors with a consistent view, period to period, of the core earnings generated from on-going operations and excludes the impact of: (i) non-cash items such as stock-based compensation, asset impairments, non-cash currency translation adjustments related to an inter-company loan and (ii) one- time items that have not occurred in the past two years and are not expected to recur in the next two years, such as the Scheme of Arrangement. Adjusted EBITDA should not be construed as a substitute for net income (loss) (as determined in accordance with GAAP) for the purpose of analyzing our operating performance or financial position, as Adjusted EBITDA is not defined by GAAP.
“Adjusted EBITDA” is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment of long-lived assets, non-cash currency translation adjustments for inter-company loans and the income (loss) recognized from non-cash assets received in connection with a legal judgment.
(5) In accordance with Segment Reporting guidance, the Company-s financial reporting includes detailed data on four separate operating segments. The Jewish Networks segment consists of the Company-s JDate.com, JDate.co.il, JDate.fr, JDate.co.uk and Cupid.co.il Web sites and their respective co-branded Web sites. The Christian Networks segment consists of the Company-s ChristianMingle.com, ChristianMingle.co.uk, ChristianMingle.com.au, Believe.com, ChristianCards.net, ChristianDating.com, DailyBibleVerse.com and Faith.com Web sites. The Other Networks segment consists of Spark.com and related other general market Web sites as well as other properties which are primarily composed of sites targeted towards various religious, ethnic, geographic and special interest groups. The Offline & Other Businesses segment consists of revenue generated from offline activities and HurryDate events and subscriptions.
(6) Total Average Paying Subscribers excludes results from the Company-s HurryDate business due to its relative size.
(7) ARPU is defined as average revenue per user per month. Total ARPU excludes results from the Company-s HurryDate business due to its relative size.
Investors:
Addo Communications
Laura Foster, Kimberly Esterkin
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310-829-5400
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