Press Release
Spark Networks Reports Third Quarter 2021 Financial Results and Reiterates Full Year Guidance
Third Quarter 2021 Financial Results
- Revenue was
$53.3 million , compared to$60.8 million in the third quarter of 2020. - Net Loss was
$2.7 million , compared to$0.1 million in the third quarter of 2020. - Adjusted EBITDA(1) was
$5.0 million , compared to$7.6 million in the third quarter of 2020. - Total cash and cash equivalents were
$12.4 million . - Total debt was
$84.7 million , compared to$99.1 million atDecember 31, 2020 , representing a$14.4 million decline in total debt.
Business Highlights and Financial Outlook
- Four of Spark's top five brands, representing nearly 50% of total revenue, collectively grew revenue and subscribers year over year during the quarter, their fifth consecutive quarter of growth.
Zoosk turnaround progressing as organic traffic increased 50% sequentially in the quarter, and conversion rates improved over 10%.- Zoosk Live! users doubled since its second quarter launch
- Spark expects to launch Zoosk Great Dates in the fourth quarter to drive increased user engagement and subscribers.
- Spark reiterates full year 2021 revenue guidance of
$219 million to$223 million . - Spark reiterates full year 2021 adjusted EBITDA guidance of
$27 million to$30 million . - Spark expects sequential revenue and adjusted EBITDA growth in the fourth quarter.
"We are pleased to report that four of our top five brands continued to grow their revenue and subscribers collectively during the quarter," said
Financial Outlook
Spark continues to expect full-year 2021 revenue to be in the range of
"We are reiterating our revised financial guidance for the full year 2021, as we expect to see a sequential improvement in total revenue in the fourth quarter," said
Investor Conference Call
To access the live call, dial 800-437-2398 (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 it will remain available for one week. To access the call replay dial-in information, please click here.
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," 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
About
For More Information
Investor contact:
MKR Investor Relations, Inc.
[email protected]
1 Adjusted EBITDA 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 excludes the impact of items that we do not consider representative of our ongoing performance. This includes: depreciation and amortization, share-based compensation, asset impairments, gains or losses on foreign currency transactions and net interest expense, acquisition related costs and other costs. Adjusted EBITDA has inherent limitations in evaluating our performance, 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; and
- 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 loss and our other
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, share-based compensation, impairment of intangible assets and goodwill, and acquisition or other costs.
Statements regarding our expectations as to the full year 2021 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 |
$ |
12,440 |
$ |
19,267 |
||||
Accounts receivable, net |
7,135 |
5,507 |
||||||
|
179,593 |
215,581 |
||||||
Other assets |
29,195 |
50,088 |
||||||
Total assets |
$ |
228,363 |
$ |
290,443 |
||||
Liabilities and Shareholders' Equity |
||||||||
Current portion of long-term debt |
$ |
12,600 |
$ |
19,037 |
||||
Accounts payable |
10,828 |
11,127 |
||||||
Deferred revenue |
40,479 |
38,304 |
||||||
Accrued expenses and other current liabilities |
26,738 |
28,429 |
||||||
Long-term debt, net of current portion |
72,067 |
80,109 |
||||||
Other liabilities |
24,502 |
18,534 |
||||||
Total liabilities |
187,214 |
195,540 |
||||||
Total shareholders' equity |
41,149 |
94,903 |
||||||
Total liabilities and shareholders' equity |
$ |
228,363 |
$ |
290,443 |
|
||||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
(in thousands) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenue |
$ |
53,297 |
$ |
60,784 |
$ |
164,929 |
$ |
174,968 |
||||||||
Operating costs and expenses: |
||||||||||||||||
Cost of revenue, exclusive of depreciation and amortization |
34,804 |
39,459 |
104,603 |
109,223 |
||||||||||||
Other operating costs and expenses |
15,501 |
18,422 |
83,250 |
54,210 |
||||||||||||
Total operating costs and expenses |
50,305 |
57,881 |
187,853 |
163,433 |
||||||||||||
Operating income (loss) |
2,992 |
2,903 |
(22,924) |
11,535 |
||||||||||||
Other expense, net |
(4,081) |
(1,562) |
(12,485) |
(8,381) |
||||||||||||
(Loss) income before income taxes |
(1,089) |
1,341 |
(35,409) |
3,154 |
||||||||||||
Income tax expense |
(1,601) |
(1,485) |
(22,812) |
(4,626) |
||||||||||||
Net loss |
$ |
(2,690) |
$ |
(144) |
$ |
(58,221) |
$ |
(1,472) |
||||||||
Reconciliation of Net loss to Adjusted EBITDA: |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
(in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net loss |
$ |
(2,690) |
$ |
(144) |
$ |
(58,221) |
$ |
(1,472) |
||||||||
Net interest expense |
3,110 |
3,101 |
10,352 |
9,913 |
||||||||||||
Loss (gain) on foreign currency transactions |
978 |
(1,539) |
2,122 |
(1,332) |
||||||||||||
Income tax expense |
1,601 |
1,485 |
22,812 |
4,626 |
||||||||||||
Depreciation and amortization |
1,060 |
2,512 |
5,648 |
7,165 |
||||||||||||
Impairment of intangible assets and goodwill |
— |
— |
32,086 |
— |
||||||||||||
Stock-based compensation expense |
482 |
1,506 |
2,098 |
3,850 |
||||||||||||
Acquisition-related costs(1) |
— |
81 |
— |
1,545 |
||||||||||||
Other costs(2) |
412 |
635 |
1,822 |
1,557 |
||||||||||||
Adjusted EBITDA |
$ |
4,953 |
$ |
7,637 |
$ |
18,719 |
$ |
25,852 |
(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) |
||||||||
Nine Months Ended |
||||||||
2021 |
2020 |
|||||||
Net loss |
$ |
(58,221) |
$ |
(1,472) |
||||
Adjustments to reconcile net loss to cash provided by operating activities: |
||||||||
Non-cash items |
69,818 |
18,720 |
||||||
Change in operating assets and liabilities |
(2,008) |
(3,881) |
||||||
Net cash provided by operating activities |
9,589 |
13,367 |
||||||
Capital expenditures |
(905) |
(2,108) |
||||||
Acquisitions of businesses, net of cash acquired |
— |
(513) |
||||||
Net cash used in investing activities |
(905) |
(2,621) |
||||||
Net cash used in financing activities |
(16,766) |
(12,320) |
||||||
Effects of exchange rate fluctuations on cash |
(453) |
(711) |
||||||
Net decrease in cash and cash equivalents and restricted cash |
(8,535) |
(2,285) |
||||||
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 |
$ |
12,582 |
$ |
15,172 |
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