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» New Frontier Media, Inc. F1Q11 (Qtr End 06/30/10) Earnings Call Transcript
All information discussed during the conference call is current only as of today or as of the date of the applicable financial results and the company assumes no obligation to update information discussed during this conference call.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 Grant and good morning everyone. New Frontier Media’s performance during the first quarter of fiscal year 2012 was in line with our expectations and despite challenges in the marketplace, our performance continues to outpace our competitors. Within the Transactional TV segment, we are building up on the international expansion momentum we have created thus far. For example, we were very pleased to announce the recent execution of a distribution arrangement with a large digital broadcast satellite provider in Mexico. We expect to generate revenue from this arrangement in the second or third quarter of fiscal 2012 and we believe the revenue will be meaningful to our international revenue results. The execution of this agreement represents just one of the arrangements we have been working tirelessly to secure. Generally, our deal flow for international business is solid and our expansion efforts are going as planned.
We believe our focus on these efforts will continue to provide the company with solid revenue growth from international markets.Within the Film Production segment, we returned to profitability during the first quarter of fiscal 2012. As you may remember, we reduced head count within the segment during the second half of fiscal 2011, resulting in a reduced cost structure. We realized the benefits from these actions in our first quarter and the benefits will continue throughout fiscal 2012. We are also more closely monitoring and analyzing our investments in films and we are optimistic that this will result in improved performance for the segment in future periods. Overall, we believe the first quarter was a good start for the fiscal year. We ended the quarter with approximately $16 million in cash and we continue to maintain a strong balance sheet, which will support our long term growth efforts. We believe the company’s strategic objectives provide us with the necessary path to generate long term returns to the company in the future. Now, I’ll turn over the call to Grant to discuss the financial results and rating information in greater detail. Grant Williams Thank you Michael. We will begin the financial review this morning by discussing the first quarter operation performance by business segment as well as the liquidity position of the company, and then we’ll open up the call for questions. For the Transactional TV segment, revenue in the first quarter decreased to $8.7 million as compared to $9 million in the same prior year quarter. Domestic revenue within the DOD and pay-per-view categories declined by approximately $0.2 million and $0.4 million respectively, and we believe these results reflect weaker consumer discretionary spending for our content as well as competition from other alternatives, such as lower cost and free internet websites.
Our international revenue results partially offset the declines in domestic revenue. International revenue increased by approximately $0.3 million to $1.5 million in the first quarter of fiscal year 2012, a 25% improvement as compared to the same prior year quarter results.Read the rest of this transcript for free on seekingalpha.com