Spark Networks Reports Fourth Quarter and Full Year 2022 Results
- Company Focused on Improving Profitability through Expense Reduction
- Company Continues Strategic Review Process
Chelsea Grayson to Serve as Permanent CEO
We believe the foregoing can be achieved if we can execute the following initiatives:
- Solidify around a diversified core of key meaningful brands and achieve a trough revenue base in 2023.
- Reallocate capital into more profitable marketing channels and diversify away from affiliate to direct and social channels.
- Reallocate our marketing budget across our highest ROI yields.
- Improve product functionality across the portfolio to improve retention and engagement.
- Use our approximately
$250 million in combined net operating losses (NOLs) to minimize taxable income.
Fourth Quarter 2022 Financial Results
- Revenue was
$41.6 million , compared to$52.0 million in the fourth quarter of 2021. On a constant currency basis,(1) revenue would have been$43.7 million in the fourth quarter of 2022.(2) - Net loss was
$17.2 million , compared to$9.9 million in the fourth quarter of 2021. - Adjusted EBITDA(3) was
$11.0 million , or a 26% adjusted EBITDA margin, compared to$14.3 million , or a 28% adjusted EBITDA margin, in the fourth quarter of 2021.
Full Year 2022 Financial Results
- Revenue was
$187.8 million , compared to$216.9 million in 2021. On a constant currency basis,(1) revenue would have been$197.1 million in 2022.(2) - Net loss was
$44.2 million , compared to$68.2 million in 2021. - Adjusted EBITDA(3) was
$18.5 million , or a 10% Adjusted EBITDA margin, compared to$33.0 million , or a 15% adjusted EBITDA margin, in 2021.
Please see the table captioned "Reconciliation of Net loss to Adjusted EBITDA" included at the end of this release for a reconciliation of Adjusted EBITDA, which is a non-
Strategic Alternatives Review Update:
The company continues its strategic alternatives review.
Investor Conference Call
To access the live call, dial 1-888-349-0106 (US and
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 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: 1409046.
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, risks related to the degree of competition in the markets in which
For More Information
Investor contact:
MKR Investor Relations, Inc.
[email protected]
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: constant currency revenue, Adjusted EBITDA and Adjusted EBITDA margin. These measures are derived on the basis of methodologies other than in accordance with
1 We provide a constant currency revenue amount to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations. We define non-GAAP constant currency revenue as total revenue excluding the effect of foreign exchange rate movements. Non-GAAP constant currency revenue are calculated by translating current quarter revenues using prior period exchange rates.
2 Revenue for the three months and year ended
3 Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), a non-
- Adjusted EBITDA and Adjusted EBITDA margin do not reflect the cash capital expenditures during the measurement period;
- Adjusted EBITDA and Adjusted EBITDA margin do not reflect any changes in working capital requirements during the measurement period;
- Adjusted EBITDA and Adjusted EBITDA margin do not reflect the cash tax payments during the measurement period; and
- Adjusted EBITDA and Adjusted EBITDA margin may be calculated differently by other companies in our industry, thus limiting its value as a comparative measure.
Because of these limitations, Adjusted EBITDA and Adjusted EBITDA margin should be considered in addition to other financial performance measures, including net income (loss) and our other
|
||||
Condensed Consolidated Balance Sheets |
||||
(in thousands) |
||||
|
|
|||
Assets |
||||
Cash and cash equivalents |
$ 11,438 |
$ 16,141 |
||
Accounts receivable, net |
5,154 |
6,261 |
||
|
132,575 |
164,113 |
||
Other assets |
15,210 |
23,286 |
||
Total assets |
$ 164,377 |
$ 209,801 |
||
Liabilities and Shareholders' (Deficit) Equity |
||||
Current portion of long-term debt |
$ 94,817 |
$ 17,593 |
||
Accounts payable |
6,487 |
11,474 |
||
Deferred revenue |
28,085 |
36,973 |
||
Accrued expenses and other current liabilities |
24,247 |
27,042 |
||
Long-term debt, net of current portion |
— |
64,531 |
||
Other liabilities |
17,527 |
19,495 |
||
Total liabilities |
171,163 |
177,108 |
||
Total shareholders' (deficit) equity |
(6,786) |
32,693 |
||
Total liabilities and shareholders' (deficit) equity |
$ 164,377 |
$ 209,801 |
|
||||||||
Condensed Consolidated Statements of Operations |
||||||||
(in thousands) |
||||||||
Three Months Ended |
Year Ended |
|||||||
2022 |
2021 |
2022 |
2021 |
|||||
Revenue |
$ 41,641 |
$ 51,976 |
$ 187,763 |
$ 216,905 |
||||
Operating costs and expenses: |
||||||||
Cost of revenue, exclusive of |
20,074 |
27,371 |
117,907 |
131,974 |
||||
Other operating costs and expenses |
31,913 |
35,701 |
89,192 |
118,951 |
||||
Total operating costs and expenses |
51,987 |
63,072 |
207,099 |
250,925 |
||||
Operating loss |
(10,346) |
(11,096) |
(19,336) |
(34,020) |
||||
Other income (expense), net |
644 |
(3,252) |
(17,862) |
(15,737) |
||||
Loss before income taxes |
(9,702) |
(14,348) |
(37,198) |
(49,757) |
||||
Income tax (expense) benefit |
(7,544) |
4,414 |
(6,992) |
(18,398) |
||||
Net loss |
$ (17,246) |
$ (9,934) |
$ (44,190) |
$ (68,155) |
Reconciliation of Net loss to Adjusted EBITDA (Unaudited): |
||||||||
Three Months Ended |
Year Ended |
|||||||
(in thousands) |
2022 |
2021 |
2022 |
2021 |
||||
Net loss |
$ (17,246) |
$ (9,934) |
$ (44,190) |
$ (68,155) |
||||
Net interest expense |
3,607 |
3,101 |
16,377 |
13,453 |
||||
(Gain) loss on foreign currency |
(3,976) |
796 |
2,031 |
2,918 |
||||
Income tax expense (benefit) |
7,544 |
(4,414) |
6,992 |
18,398 |
||||
Depreciation and amortization |
631 |
945 |
2,387 |
6,593 |
||||
Impairment of goodwill, intangible |
18,479 |
20,864 |
30,269 |
52,950 |
||||
Stock-based compensation expense |
26 |
627 |
1,536 |
2,725 |
||||
Other costs(1) |
1,932 |
2,333 |
3,146 |
4,155 |
||||
Adjusted EBITDA |
$ 10,997 |
$ 14,318 |
$ 18,548 |
$ 33,037 |
||||
Adjusted EBITDA margin(2) |
26.4 % |
27.5 % |
9.9 % |
15.2 % |
(1) 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. |
(2) We define "Adjusted EBITDA margin" as Adjusted EBITDA divided by revenue. |
|
||||
Condensed Consolidated Statements of Cash Flows |
||||
(in thousands) |
||||
Year Ended |
||||
2022 |
2021 |
|||
Net loss |
$ (44,190) |
$ (68,155) |
||
Adjustments to reconcile net loss to net cash (used in) provided by operating |
||||
Non-cash items and other non-operating charges |
51,533 |
86,998 |
||
Change in operating assets and liabilities |
(16,914) |
(2,180) |
||
Net cash (used in) provided by operating activities |
(9,571) |
16,663 |
||
Capital expenditures |
(2,502) |
(1,086) |
||
Net cash used in investing activities |
(2,502) |
(1,086) |
||
Net cash provided by (used in) financing activities |
7,524 |
(19,920) |
||
Effects of exchange rate fluctuations on cash and cash equivalents and restricted cash |
(161) |
(495) |
||
Net decrease in cash and cash equivalents and restricted cash |
(4,710) |
(4,838) |
||
Cash and cash equivalents and restricted cash at beginning of period |
16,279 |
21,117 |
||
Cash and cash equivalents and restricted cash at end of period |
$ 11,569 |
$ 16,279 |
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