Spark Networks(R) Reports First Quarter Financial Results
- Total revenue growth of 19%
- Christian Networks revenue growth of 45%
- 10 consecutive quarters of sequential revenue growth
- Average paying subscriber1 growth of 23% to 296,000
Q1 2013 Highlights
|Q1 2012||Q1 2013|
|Revenue||$||14.6 Million||$||17.3 Million|
|Net Loss||$||(1.7) Million||$||(2.9) Million|
|Net Loss Per Share||$||(0.08||)||$||(0.14||)|
"The momentum we generated in 2012 continued in the first quarter of 2013, which represented yet another record-setting quarter for us," said
"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."
Q1 2013 Financial Results
Total cost and expenses were
Net loss was
Adjusted EBITDA4 was a loss of
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.
Balance Sheet, Cash, Debt
|SPARK NETWORKS, INC.|
|SEGMENT5 RESULTS FROM OPERATIONS|
|(in thousands except subscriber and ARPU information)|
|Q1 2012||Q2 2012||Q3 2012||Q4 2012||Q1 2013||Q1 '13
|Offline & Other Businesses||91||94||88||97||88||-3.3||%|
|Total Net Revenue||$||14,555||$||15,046||$||15,871||$||16,271||$||17,263||18.6||%|
|Direct Mktg. Exp.|
|Offline & Other Businesses||30||37||29||69||26||-13.3||%|
|Total Direct Mktg. Exp.||$||10,938||$||10,140||$||11,991||$||12,584||$||12,698||16.1||%|
|Offline & Other Businesses||61||57||59||28||62||1.6||%|
|Average Paying Subs.|
|Total Avg. Paying Subs.6||240,706||250,934||266,075||279,260||295,531||22.8||%|
Investor Conference Call
The Company will discuss its financial results during a live teleconference today at
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 www.spark.net or by clicking http://investor.spark.net.
A replay will begin approximately three hours after completion of the call and run until
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; 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
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.
(Consolidated financial statements to follow)
|SPARK NETWORKS, INC.|
|CONSOLIDATED BALANCE SHEETS|
|(in thousands, except share data)|
|December 31,||March 31,|
|Cash and cash equivalents||$||10,458||$||7,972|
|Deferred tax asset, net - current||8||8|
|Prepaid expenses and other||861||1,282|
|Total current assets||14,069||11,961|
|Property and equipment, net||3,133||3,231|
|Deferred tax asset, net - non-current||5||4|
|Liabilities and Stockholders' Equity|
|Deferred tax liability - current||257||257|
|Total current liabilities||14,817||15,362|
|Deferred tax liability - non-current||1,413||1,520|
|Commitments and contingencies|
|Authorized capital stock consists of 100,000,000 shares of Common Stock, $0.001 par value; issued and outstanding: 20,997,489 shares at March 31, 2013 and 20,945,364 shares at December 31, 2012:||21||21|
|Accumulated other comprehensive income||712||732|
|Total stockholders' equity||11,546||8,980|
|Total liabilities and stockholders' equity||$||28,364||$||27,214|
|SPARK NETWORKS, INC.|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|(unaudited, in thousands, except per share data)|
|Three Months Ended March 31,|
|Cost and expenses:|
|Cost of revenue (exclusive of depreciation shown separately below)||11,848||13,657|
|Sales and marketing||973||1,262|
|General and administrative||2,238||2,934|
|Amortization of intangible assets||13||0|
|Total cost and expenses||17,284||20,132|
|Interest income and other, net||(127||)||(53||)|
|Loss before income taxes||(2,602||)||(2,816||)|
|(Benefit) provision for income taxes||(889||)||124|
|Net loss per share--basic and diluted||$||(0.08||)||$||(0.14||)|
|Weighted average shares outstanding - basic and diluted||20,596||20,960|
|Stock-based compensation: (in thousands)||Three Months Ended March 31,|
|Cost of revenue||$||2||$||-|
|Sales and marketing||20||34|
|General and administrative||141||149|
|Reconciliation of Net Loss to Adjusted EBITDA: (in thousands)||Three Months Ended March 31,|
|Non-cash currency translation adjustments||(125||)||(79||)|
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