BEVERLY HILLS, CA--(Marketwire - Mar 1, 2012) - Spark Networks, Inc. (
| Q4 2011 | Full Year 2011 | |||||||
| Revenue | $ | 12.9 Million | $ | 48.5 Million | ||||
| Contribution Margin | 41 | % | 47 | % | ||||
| Net Loss | $ | 1.1 Million | $ | 1.6 Million | ||||
| Net Loss Per Share | $ | 0.05 | $ | 0.08 | ||||
"2011 was a year of many 'firsts' for us. Most notably, we objectively demonstrated Spark is more than just Jewish Networks with our Other Affinity Networks subscriber base cresting 100,000 and surpassing that of our Jewish Networks segment," said Greg Liberman, Spark's President and Chief Executive Officer. "The 78% increase in Other Affinity Networks revenue drove company-wide revenue up 19% for the year, the first time since 2006 we have grown annual revenue. And, that revenue growth was driven by an increase in subscribers, with company-wide average paying subscribers1 up 21% for the year behind a 60% increase in Other Affinity Networks average paying subscribers."
"Not only am I pleased to report our full year results, but also another solid quarter, as company-wide revenue and average paying subscribers grew 27% and 32%, respectively, powered by Other Affinity Networks' 114% increase in revenue and 89% increase in average paying subscribers when compared to Q4 2010."
Financial Results
Revenue for the fourth quarter of 2011 was $12.9 million, an increase of 27% compared to $10.1 million for the fourth quarter of 2010, and an increase of 1% compared to $12.7 million in the prior quarter. Full year 2011 revenue was $48.5 million, a 19% increase compared to $40.9 million for full year 2010.
Contribution2 for the fourth quarter of 2011 was $5.2 million, a decrease of 24% compared to $6.9 million for the fourth quarter of 2010, and a 15% decrease compared to $6.2 million in the prior quarter. Full year 2011 contribution was $22.8 million, a 24% decrease compared to $30.1 million for full year 2010.
Total cost and expenses for the fourth quarter of 2011 were $13.5 million, a 51% increase compared to $9.0 million in the fourth quarter of 2010, and a 7% increase compared to $12.7 million in the prior quarter. Full year total cost and expenses were $49.6 million, a 43% increase compared to $34.6 million for full year 2010.
Net loss for the fourth quarter of 2011 was $1.1 million, or $0.05 per share, compared to net income of $626,000 or $0.03 per share, for the fourth quarter of 2010 and a net loss of $238,000 or $0.01 per share for the prior quarter. Full year 2011 net loss was $1.6 million, or $0.08 per share, compared to net income of $3.7 million or $0.18 per share for full year 2010.
Adjusted EBITDA3 for the fourth quarter of 2011 was $1.0 million, a decrease of 47% compared to $2.0 million for the fourth quarter of 2010, and an increase of 61% compared to $639,000 in the prior quarter. A 173% increase in Other Affinity Networks direct marketing expense accounted for a substantial portion of the decrease in year-over-year Adjusted EBITDA results. Full year 2011 Adjusted EBITDA was $2.6 million, a 72% decrease compared to $9.4 million for full year 2010.
Average paying subscribers for the Company, as a whole, in the fourth quarter of 2011 were 212,850, an increase of 32% compared to 160,744 for the fourth quarter of 2010 and a 3% increase compared to 206,099 for the prior quarter. Full year 2011 average paying subscribers were 196,850, a 21% increase compared to 162,311 for full year 2010.
Segment Reporting4
Fourth quarter 2011 revenue for Jewish Networks was $6.7 million, a decrease of 3% compared to $6.9 million in the fourth quarter of 2010 and flat compared to the prior quarter. Full year 2011 Jewish Networks revenue was $27.1 million, a decrease of 1% compared to $27.4 million for full year 2010.
Fourth quarter 2011 revenue for Other Affinity Networks was $5.9 million, an increase of 114% compared to $2.8 million in fourth quarter 2010, and an increase of 4% compared to $5.7 million in the prior quarter. Full year 2011 Other Affinity Networks revenue was $20.1 million, a 78% increase compared to $11.3 million for full year 2010.
Fourth quarter 2011 revenue for General Market Networks was $107,000, a decrease of 55% compared to $236,000 in fourth quarter 2010, and a 16% decrease compared to $127,000 in the prior quarter. Full year 2011 General Market Networks revenue was $578,000, a 51% decrease compared to $1.2 million for full year 2010.
Fourth quarter 2011 revenue for Offline & Other Businesses was $105,000, a decrease of 34% compared to $160,000 in fourth quarter 2010, and a 5% decrease compared to $111,000 in the prior quarter. Full year 2011 Offline & Other Businesses revenue was $772,000, a 20% decrease compared to $964,000 for full year 2010.
Average paying subscribers for Jewish Networks were 87,101 during the fourth quarter of 2011, a decrease of 3% compared to 89,723 in the fourth quarter of 2010, and a decrease of 2% compared to 88,976 in the prior quarter. Full year 2011 Jewish Networks average paying subscribers were 89,429, a decrease of 1% compared to 90,452 for full year 2010.
Average paying subscribers for Other Affinity Networks were 123,139 during the fourth quarter of 2011, an increase of 89% compared to 65,172 in the fourth quarter of 2010 and an increase of 8% compared to 113,972 in the prior quarter. Full year Other Affinity Networks average paying subscribers were 103,768, an increase of 60% compared to 64,851 for full year 2010.
Average paying subscribers for General Market Networks were 2,158 during the fourth quarter of 2011, a decrease of 58% compared to 5,174 in the fourth quarter of 2010, and a decrease of 20% compared to 2,702 in the prior quarter. Full year 2011 General Market Networks average paying subscribers were 3,138, a decrease of 50% compared to 6,328 for full year 2010.
Balance Sheet, Cash, Debt
As of December 31, 2011, the Company had cash and cash equivalents of $15.1 million, an increase of 8.7% compared to $13.9 million at December 31, 2010. As of December 31, 2011, the Company had no outstanding debt.
Investor Conference Call
The Company will discuss its financial results during a live teleconference today at 1:30 p.m. Pacific time.
| Call Title: | Spark Networks Q4 '11 Financial Results |
| Toll-Free (United States): | 1-888-634-7543 |
| International: | 1-719-325-2106 |
| Passcode: | 1049461 |
| Digital Replay through March 15, 2012: | |
| Toll-Free (United States): | 1-888-203-1112 |
| International: | 1-719-457-0820 |
| Passcode: | 1049461 |
In addition, the Company will host a webcast of the call which will be accessible in the Investor Relations section of the Company's Web site under "Conference Calls and Presentations" at: http://www.spark.net/investor.htm.
Safe Harbor Statement:
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; identify and consummate strategic acquisitions and integrate acquired companies or assets; obtain financing on acceptable terms; and successfully implement both cost cutting initiatives and our current long-term growth strategy. 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 http://www.sec.gov.
About Spark Networks, Inc.:
The Spark Networks portfolio of consumer websites includes, among others, JDate®.com (www.jdate.com), Spark®.com (www.spark.com), BlackSingles.com® (www.blacksingles.com), ChristianMingle®.com (www.christianmingle.com) and SilverSingles®.com (www.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" is defined as revenue, net of credits and credit card chargebacks, less direct marketing and "Contribution Margin" is defined as Contribution divided by revenue, net of credits and credit card chargebacks.
3 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 recognized from non-cash assets received in connection with a legal judgment.
4 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 General Market Networks segment consists of the Company's Spark.com Web site (formerly known as AmericanSingles.com, Date.co.uk and Date.ca) and its co-branded and private label Web sites. The Other Affinity Networks segment consists of all of the Company's Provo, Utah-based properties which primarily consist of sites targeted at various religious, ethnic, geographic and special interest groups including BlackSingles.com, ChristianMingle.com and SilverSingles.com. The Offline & Other Businesses segment consists of revenue generated from offline activities and HurryDate events and subscriptions.
(Consolidated financial statements to follow)
| SPARK NETWORKS, INC. | ||||||||||||
| BALANCE SHEET | ||||||||||||
| (in thousands, except share data) | ||||||||||||
| December 31, | December 31, | |||||||||||
| 2011 | 2010 | |||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 15,106 | $ | 13,901 | ||||||||
| Restricted cash | 958 | 996 | ||||||||||
| Accounts receivable | 1,146 | 847 | ||||||||||
| Deferred tax asset - current | 44 | 43 | ||||||||||
| Prepaid expenses and other | 1,164 | 911 | ||||||||||
| Total current assets | 18,418 | 16,698 | ||||||||||
| Property and equipment, net | 2,839 | 2,520 | ||||||||||
| Goodwill | 8,683 | 9,156 | ||||||||||
| Intangible assets, net | 1,900 | 3,017 | ||||||||||
| Deferred tax asset - non-current | 5,641 | 4,882 | ||||||||||
| Deposits and other assets | 455 | 295 | ||||||||||
| Total assets | $ | 37,936 | $ | 36,568 | ||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 952 | $ | 1,371 | ||||||||
| Accrued liabilities | 4,046 | 3,635 | ||||||||||
| Deferred revenue | 5,723 | 4,331 | ||||||||||
| Deferred tax liability - current | 203 | -- | ||||||||||
| Total current liabilities | 10,924 | 9,337 | ||||||||||
| Deferred tax liability | 1,219 | 825 | ||||||||||
| Other liabilities non-current | 1,141 | 1,036 | ||||||||||
| Total liabilities | 13,284 | 11,198 | ||||||||||
| Commitments and contingencies | -- | -- | ||||||||||
| Stockholders' equity: | ||||||||||||
| Authorized capital stock consists of 100,000,000 Common Stock, $0.001 par value; issued and outstanding 20,594,670 at December 31, 2011 and 20,587,336 shares as of December 31, 2010, at stated values of: | 21 | 21 | ||||||||||
| Additional paid-in-capital | 53,014 | 52,020 | ||||||||||
| Accumulated other comprehensive income | 672 | 773 | ||||||||||
| Accumulated deficit | (29,055 | ) | (27,444 | ) | ||||||||
| Total stockholders' equity | 24,652 | 25,370 | ||||||||||
| Total liabilities and stockholders' equity | $ | 37,936 | $ | 36,568 | ||||||||
| SPARK NETWORKS, INC. | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
| (unaudited, in thousands, except per share data) | |||||||||||||||||||||
| Three Months Ended December 31, |
Years Ended December 31, |
||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | 2009 | |||||||||||||||||
| Revenue | $ | 12,861 | $ | 10,109 | $ | 48,493 | $ | 40,851 | $ | 45,388 | |||||||||||
| Cost and expenses: | |||||||||||||||||||||
| Cost of revenue (exclusive of depreciation shown separately below) | 8,420 | 4,002 | 28,955 | 13,749 | 15,207 | ||||||||||||||||
| Sales and marketing | 1,062 | 788 | 3,722 | 3,496 | 3,507 | ||||||||||||||||
| Customer service | 539 | 420 | 1,980 | 1,601 | 1,832 | ||||||||||||||||
| Technical operations | 281 | 302 | 1,367 | 1,232 | 1,504 | ||||||||||||||||
| Development | 643 | 760 | 2,710 | 3,092 | 3,895 | ||||||||||||||||
| General and administrative | 1,071 | 2,141 | 8,068 | 9,782 | 9,932 | ||||||||||||||||
| Depreciation | 343 | 263 | 1,320 | 962 | 873 | ||||||||||||||||
| Amortization of intangible assets | 89 | 97 | 370 | 421 | 663 | ||||||||||||||||
| Impairment of intangible assets and other assets | 1,100 | 187 | 1,145 | 308 | 11,999 | ||||||||||||||||
| Total cost and expenses | 13,548 | 8,960 | 49,637 | 34,643 | 49,412 | ||||||||||||||||
| Operating (loss) income | (687 | ) | 1,149 | (1,144 | ) | 6,208 | (4,024 | ) | |||||||||||||
| Interest expense (income) and other, net | 144 | (72 | ) | 162 | (54 | ) | (1,099 | ) | |||||||||||||
| (Loss) income before income taxes | (831 | ) | 1,221 | (1,306 | ) | 6,262 | (2,925 | ) | |||||||||||||
| Provision for income taxes | 277 | 595 | 305 | 2,558 | 3,479 | ||||||||||||||||
| Net (loss) income | $ | (1,108 | ) | $ | 626 | $ | (1,611 | ) | $ | 3,704 | $ | (6,404 | ) | ||||||||
| Net (loss) income per share - basic and diluted | $ | (0.05 | ) | $ | 0.03 | $ | (0.08 | ) | $ | 0.18 | $ | (0.31 | ) | ||||||||
| Weighted average shares outstanding - basic | 20,595 | 20,587 | 20,591 | 20,586 | 20,570 | ||||||||||||||||
| Weighted average shares outstanding - diluted | 20,595 | 20,588 | 20,591 | 20,590 | 20,570 | ||||||||||||||||
| Three Months | Twelve Months | ||||||||||||||||
| Ended December 31, | Ended December 31, | ||||||||||||||||
| Stock-Based Compensation | 2011 | 2010 | 2011 | 2010 | 2009 | ||||||||||||
| (in thousands) | |||||||||||||||||
| Cost of revenue | $ | 2 | $ | 3 | $ | 8 | $ | 11 | $ | 17 | |||||||
| Sales and marketing | 15 | 35 | 80 | 233 | 184 | ||||||||||||
| Customer service | - | - | - | 1 | (14 | ) | |||||||||||
| Technical operations | 31 | 33 | 119 | 167 | 158 | ||||||||||||
| Development | 10 | 12 | 42 | 54 | 29 | ||||||||||||
| General and administrative | 125 | 187 | 657 | 1,044 | 667 | ||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||||||||
| (in thousands) | December 31, | December 31, | |||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | 2009 | |||||||||||||||||
| Net (loss) income | $ | (1,108 | ) | $ | 626 | $ | (1,611 | ) | $ | 3,704 | $ | (6,404 | ) | ||||||||
| Interest | 13 | 51 | 102 | 207 | 378 | ||||||||||||||||
| Taxes | 277 | 595 | 305 | 2,558 | 3,479 | ||||||||||||||||
| Depreciation | 343 | 263 | 1,320 | 962 | 873 | ||||||||||||||||
| Amortization | 89 | 97 | 370 | 421 | 663 | ||||||||||||||||
| EBITDA | (386 | ) | 1,632 | 486 | 7,852 | (1,011 | ) | ||||||||||||||
| Stock-based compensation | 183 | 270 | 906 | 1,510 | 1,041 | ||||||||||||||||
| Impairment of intangible assets and other assets | 1,100 | 187 | 1,145 | 308 | 11,999 | ||||||||||||||||
| Non-cash currency translation adjustments | 132 | (133 | ) | 337 | (269 | ) | (30 | ) | |||||||||||||
| Non-repetitive property possession | -- | -- | (247 | ) | -- | (1,507 | ) | ||||||||||||||
| Adjusted EBITDA | $ | 1,029 | $ | 1,956 | $ | 2,627 | $ | 9,401 | $ | 10,492 | |||||||||||
| SPARK NETWORKS, INC. | ||||||||||||||||||
| SEGMENT RESULTS FROM OPERATIONS | ||||||||||||||||||
| (in thousands except subscriber information) | ||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | 2009 | ||||||||||||||
| Revenue | ||||||||||||||||||
| Jewish Networks | $ | 6,700 | $ | 6,930 | $ | 27,054 | $ | 27,440 | $ | 28,842 | ||||||||
| Other Affinity Networks | 5,949 | 2,783 | 20,089 | 11,279 | 12,771 | |||||||||||||
| General Market Networks | 107 | 236 | 578 | 1,168 | 2,692 | |||||||||||||
| Offline & Other Businesses | 105 | 160 | 772 | 964 | 1,083 | |||||||||||||
| Total Revenue | $ | 12,861 | $ | 10,109 | $ | 48,493 | $ | 40,851 | $ | 45,388 | ||||||||
| Direct Marketing Expenses | ||||||||||||||||||
| Jewish Networks | $ | 929 | $ | 586 | $ | 3,389 | $ | 2,321 | $ | 2,346 | ||||||||
| Other Affinity Networks | 6,640 | 2,436 | 21,459 | 7,292 | 8,502 | |||||||||||||
| General Market Networks | 17 | 175 | 364 | 582 | 676 | |||||||||||||
| Offline & Other Businesses | 49 | 62 | 512 | 535 | 541 | |||||||||||||
| Total Direct Marketing Expenses | $ | 7,635 | $ | 3,259 | $ | 25,724 | $ | 10,730 | $ | 12,065 | ||||||||
| Contribution | ||||||||||||||||||
| Jewish Networks | $ | 5,771 | $ | 6,344 | $ | 23,665 | $ | 25,119 | $ | 26,496 | ||||||||
| Other Affinity Networks | (691 | ) | 347 | (1,370 | ) | 3,987 | 4,269 | |||||||||||
| General Market Networks | 90 | 61 | 214 | 586 | 2,016 | |||||||||||||
| Offline & Other Businesses | 56 | 98 | 260 | 429 | 542 | |||||||||||||
| Total Contribution | $ | 5,226 | $ | 6,850 | $ | 22,769 | $ | 30,121 | $ | 33,323 | ||||||||
| Average Paying Subscribers | ||||||||||||||||||
| Jewish Networks | 87,101 | 89,723 | 89,429 | 90,452 | 86,030 | |||||||||||||
| Other Affinity Networks | 123,139 | 65,172 | 103,768 | 64,851 | 66,078 | |||||||||||||
| General Market Networks | 2,158 | 5,174 | 3,138 | 6,328 | 13,219 | |||||||||||||
| Offline & Other Businesses | 452 | 675 | 515 | 680 | 940 | |||||||||||||
| Total Average Paying Subscribers | 212,850 | 160,744 | 196,850 | 162,311 | 166,267 | |||||||||||||
Contact Information:
For More Information
Investors:
Brett Zane
+ 1-323-658-3000 ext. 4001