New Frontier Media, Inc. (NOOF) F1Q11 (Qtr End 06/30/10) Earnings Call Transcript August 6, 2010 11:00 am ET Executives Grant Williams – CFO Michael Weiner – Chairman, Secretary and CEO Ken Boenish – President Analysts John Rolfe – Argand Capital Jerry Falkner – R.J. Falkner & Company Presentation Operator
During this conference call, management may make forward-looking statements within the meaning of the Safe Harbor provided by the SEC for such statements, including statements regarding the company's expected financial position and operating results, its business strategy, its financing plans and the outcome of certain contingencies.These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by any forward-looking statements and should be considered in conjunction with the cautionary statements included in our press release and our most recent reports containing Risk Factors filed with the Securities and Exchange Commission, including our most recently filed Forms 10-Q and 10-K. I'll now turn the call over to New Frontier Media's Chief Executive Officer, Michael Weiner. Michael Weiner Thank you, Grant and good morning everyone. New Frontier Media began fiscal year 2011 with a solid profitable first quarter. The results benefited from incremental revenue generated by the Transactional TV segment's international distribution, which doubled to $1.2 million as compared to the same prior year quarter. We continue to believe international distribution will play a key role in the company's growth in the future. As you know, we have successfully launched our content on several VOD platforms throughout Europe over the past 20 months. To date, our content is performing exceedingly well and is outperforming most, if not all, competitors. Based on this success, we were pleased to announce earlier this week that the company has entered into a five-year licensing agreement whereby we will rebrand and distribute up to three linear pay-per-view channels. The channels can reach all of Europe as well as parts of the Middle East and North Africa with our primary distribution target being Europe. Domestically, while revenue has stabilized and even increased with some customers, our overall Transactional TV segment revenue is still being impacted by last November's loss of a channel on the DBS platform and the continuation of lower consumer spending.
In order to address this challenge, we continue to work with customers on key initiatives that could strengthen the domestic revenue. These initiatives include a multi-tier pricing strategy that is designed to improve consumer value and offer some content at more approachable price points. We have completed extensive nationwide consumer research, whereby we measured consumers' attitudes and propensity to purchase when presented with certain value propositions.Based on these results, we have tested several tactics with some of our distribution partners and the results were very positive. Based on these tests, we are entering into more significant testing with much larger cable systems, which we believe, will ultimately lead to a complete overhaul of the adult category. Our goal is to make our product on TV platforms more competitive with other consumer options and attract a greater percentage of discretionary entertainment dollars. In our Film Production segment, we completed a producer-for-hire project in the first quarter that originally began production in fiscal 2010. And we also completed a partial delivery of films from our fourth installment of an episodic series. Additionally, we are pleased to announce that we executed a new producer-for-hire agreement and have already begun production on the related film. We expect the production of the film will be completed during the second half of fiscal 2011. Generally, we are optimistic that the film production segment will build on this current momentum and continue to identify opportunities to expand its existing and new product offerings. Investors have asked me about the long-term prospects of the company, particularly in light of the changes in the economic climate and the new emerging technologies. Over the long-term, New Frontier Media plans to grow its operations to become a leader in the global distribution of both mainstream and adult content across all popular delivery platforms. Read the rest of this transcript for free on seekingalpha.com