Press Release
Spark Networks Reports Fourth Quarter and Full Year 2021 Financial Results and Guides to a Return to Total Revenue Growth in 2022
"Currently, our family of brands serve roughly four million page views per day of singles searching for serious relationships and millions of paid subscribers per year, making Spark the fourth largest online subscription-based dating company across
Fourth Quarter 2021 Financial Results
- Revenue was
$52.0 million , compared to$58.1 million in the fourth quarter of 2020. - Net Loss was
$9.9 million , compared to$45.1 million in the fourth quarter of 2020. - Adjusted EBITDA(1) was
$14.3 million , compared to$13.1 million in the fourth quarter of 2020. - Total cash and cash equivalents were
$16.1 million as ofDecember 31, 2021 . - Total debt was
$82.1 million , compared to$99.1 million atDecember 31, 2020 , representing a$17.0 million decline in total debt. - Net debt was
$66.0 million as ofDecember 31, 2021 .
Full Year 2021 Financial Results
- Revenue was
$216.9 million , compared to$233.0 million in 2020. - Net Loss was
$68.2 million , compared to$46.6 million in 2020. - Adjusted EBITDA(1) was
$33.0 million , compared to$38.9 million in 2020.
Business Highlights and Financial Outlook
- Spark properties generated over 4 million daily page views and a total free and paid user base of nearly 40 million people in 2021.
- Spark averaged 875,000 paid subscribers during 2021.
- Four of Spark's top five brands, representing close to half of total revenue, collectively grew revenue 5% and subscribers 3% year over year in 2021.
Zoosk turnaround progressing as organic traffic increased 74% year over year in the quarter.- Spark successfully refinanced its debt facility following the close of the year, to better fund its growth initiatives in 2022 and beyond.
- Spark intends to invest
$110 million in customer acquisition in 2022. - For full year 2022, Spark expects to return to total revenue growth year over year, while still delivering solid Adjusted EBITDA margins for the year.
Financial Outlook
"During 2021, we paid down
Investor Conference Call
To access the live call, dial 888-349-0106 (US) or +1 412-902-0131 (International) and ask to join the
A live and archived webcast of the conference call will be accessible on the Investor Relations section of the company's website at https://investor.spark.net/investor-relations/home. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. To access the call replay dial 1-877-344-7529 (US) or +1 412-317-0088 (International) and enter the replay passcode: 4725720.
About
Safe Harbor Statement
This press 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, statements involving known and unknown risks, uncertainties, and other factors that may cause
Any statements in this press release that are not statements of historical fact may be considered to be forward-looking statements. Written words, such as "believes," "hopes," "intends," "estimates," "expects," "projects," "plans," "anticipates," "guides," and variations thereof, or the use of future tense, 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, the risk that the benefits from the acquisition of
For More Information
Investor contact:
MKR Investor Relations, Inc.
[email protected]
1 Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), a non-GAAP financial measure, is one of the primary metrics by which we evaluate the performance of our business, 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 the ongoing operations and allows for greater transparency with respect to key metrics used by senior leadership in its financial and operational decision-making. We define Adjusted EBITDA as net earnings (loss) excluding net interest expense, (gain) loss on foreign currency transactions, income tax (benefit) expense, depreciation and amortization, asset impairments, stock-based compensation expense, acquisition related costs and other costs. Adjusted EBITDA has inherent limitations in evaluating the performance of the Company, including, but not limited to the following:
- Adjusted EBITDA does not reflect the cash capital expenditures during the measurement period;
- Adjusted EBITDA does not reflect any changes in working capital requirements during the measurement period;
- Adjusted EBITDA does not reflect the cash tax payments during the measurement period;
- Adjusted EBITDA may be calculated differently by other companies in our industry, thus limiting its value as a comparative measure;
Because of these limitations, Adjusted EBITDA should be considered in addition to other financial performance measures, including net income (loss) and our other
Statements regarding our expectations as to the full-year 2022 Adjusted EBITDA do not include certain charges and costs. The adjustments to EBITDA in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior periods, including (i) items such as share-based compensation, asset impairments, gains or losses on foreign currency transactions and interest expense, and (ii) items related to acquisitions or other costs that are non-recurring, infrequent, or unusual in nature including transaction and advisory fees, merger integration costs, other employee payments, and severance. The exclusion of these charges and costs in future periods will have a significant impact on our Adjusted EBITDA. We are not able to provide a reconciliation of our non-GAAP financial guidance to the corresponding GAAP measures without unreasonable effort because of the uncertainty and variability of the nature and amount of these future charges and costs.
|
||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||
(in thousands) |
||||
|
|
|||
Assets |
||||
Cash and cash equivalents |
$ 16,141 |
$ 19,267 |
||
Accounts receivable, net |
6,261 |
5,507 |
||
|
164,113 |
215,581 |
||
Other assets |
23,286 |
50,088 |
||
Total assets |
$ 209,801 |
$ 290,443 |
||
Liabilities and Shareholders' Equity |
||||
Current portion of long-term debt |
$ 17,593 |
$ 19,037 |
||
Accounts payable |
11,474 |
11,127 |
||
Deferred revenue |
36,973 |
38,304 |
||
Accrued expenses and other current liabilities |
27,042 |
28,429 |
||
Long-term debt, net of current portion |
64,531 |
80,109 |
||
Other liabilities |
19,495 |
18,534 |
||
Total liabilities |
177,108 |
195,540 |
||
Total shareholders' equity |
32,693 |
94,903 |
||
Total liabilities and shareholders' equity |
$ 209,801 |
$ 290,443 |
|
||||||||
Condensed Consolidated Statements of Operations (Unaudited) |
||||||||
(in thousands) |
||||||||
Three Months Ended |
Year Ended |
|||||||
2021 |
2020 |
2021 |
2020 |
|||||
Revenue |
$ 51,976 |
$ 58,068 |
$ 216,905 |
$ 233,036 |
||||
Total operating costs and expenses |
63,072 |
102,782 |
250,925 |
266,215 |
||||
Operating loss |
(11,096) |
(44,714) |
(34,020) |
(33,179) |
||||
Other expense, net |
(3,252) |
(59) |
(15,737) |
(8,440) |
||||
Loss before income taxes |
(14,348) |
(44,773) |
(49,757) |
(41,619) |
||||
Income tax benefit (expense) |
4,414 |
(363) |
(18,398) |
(4,989) |
||||
Net loss |
$ (9,934) |
$ (45,136) |
$ (68,155) |
$ (46,608) |
Reconciliation of Net loss to Adjusted EBITDA (Unaudited): |
||||||||
Three Months Ended |
Year Ended |
|||||||
(in thousands) |
2021 |
2020 |
2021 |
2020 |
||||
Net loss |
$ (9,934) |
$ (45,136) |
$ (68,155) |
$ (46,608) |
||||
Net interest expense |
3,101 |
3,368 |
13,453 |
13,281 |
||||
Loss (gain) on foreign currency transactions |
796 |
(2,439) |
2,918 |
(3,771) |
||||
Income tax (benefit) expense |
(4,414) |
363 |
18,398 |
4,989 |
||||
Depreciation and amortization |
945 |
2,219 |
6,593 |
9,384 |
||||
Impairment of goodwill, intangible assets, and capitalized software |
20,864 |
51,236 |
52,950 |
51,236 |
||||
Stock-based compensation expense |
627 |
930 |
2,725 |
4,780 |
||||
Acquisition-related costs(1) |
— |
— |
— |
1,545 |
||||
Other costs(2) |
2,333 |
2,549 |
4,155 |
4,106 |
||||
Adjusted EBITDA |
$ 14,318 |
$ 13,090 |
$ 33,037 |
$ 38,942 |
(1) Acquisition related costs primarily consist of transaction costs, including legal, consulting, advisory fees, and severance and retention costs. |
(2) Includes primarily consulting and advisory fees related to special projects, as well as non-cash acquisition related expenses, post-merger integration activities and long-term debt transaction and advisory fees. |
|
||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||
(in thousands) |
||||
Year Ended |
||||
2021 |
2020 |
|||
Net loss |
$ (68,155) |
$ (46,608) |
||
Adjustments to reconcile net loss to cash provided by operating activities: |
||||
Non-cash items |
86,998 |
72,467 |
||
Change in operating assets and liabilities |
(2,180) |
(6,909) |
||
Net cash provided by operating activities |
16,663 |
18,950 |
||
Capital expenditures |
(1,086) |
(2,734) |
||
Acquisitions of businesses, net of cash acquired |
— |
(513) |
||
Net cash used in investing activities |
(1,086) |
(3,247) |
||
Net cash used in financing activities |
(19,920) |
(10,677) |
||
Effects of exchange rate fluctuations on cash and cash equivalents and restricted cash |
(495) |
(1,366) |
||
Net (decrease) increase in cash and cash equivalents and restricted cash |
(4,838) |
3,660 |
||
Cash and cash equivalents and restricted cash at beginning of period |
21,117 |
17,457 |
||
Cash and cash equivalents and restricted cash at end of period |
$ 16,279 |
$ 21,117 |
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