New Frontier Media, Inc. (NOOF) F2Q2012 Earnings Call November 14, 2011 11:00 a.m. ET Executives Grant Williams - Chief Financial Officer Michael Weiner - Chairman and Chief Executive Officer Presentation Operator
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 you, Grant, and good morning everyone. New Frontier Media made good progress towards strategic initiatives during the second quarter of fiscal year 2012. Within the Transactional TV segment, we focused our efforts on expanding our distribution of new and unique content packages including short-form, lower priced content. We are gaining traction with these efforts. As we have mentioned on previous calls, the new content packages have been tested in certain customers markets and the results of these tests have been positive. We are optimistic that the expansion of these initiatives throughout the U.S. markets will improve the Transactional TV segment’s domestic performance. However, we expect the impact from the rollout of these initiatives will be gradual and occur over time, due to the long lead-time in marketing and executing these plans with our customers. Internationally, the Transactional TV segment once again showed growth as compared to the same prior year quarter. The sequential results were slightly lower as a result of increased competition on a platform in Latin America. But we do not believe this impact is indicative of a future trend. We expect continued growth within the Transactional TV segment’s international revenue, and this will be key focus of the company.
Within the Film Production segment, we generated another quarter of profitable result despite incurring film cost impairment charges. We are optimistic about this segment. Our efforts to maintain lower overhead costs while also focusing on higher quality sales, are having a positive impact. We plan to continue our efforts to distribute higher quality content to our customers. We will also continue to execute targeted production arrangements when the economics are attractive. Such as the episodic series we announced in the earnings release this quarter.On a consolidated basis we continued to generate positive operating cash flow for the company, and we expect to continue to generate positive cash flow from our operations in the future. We have substantially completed our stock repurchase program during the quarter by repurchasing approximately 700,000 shares at an average price of $1.26 per share. We also recently authorized a new repurchase program that allows for the repurchase of the lesser of an additional 800,000 shares or $1 million worth of common stock. To date we have repurchased approximately 6.1 million of common stock. Overall, we continue to believe New Frontier Media’s prospects are good and that our strategy will generate solid shareholder returns over the long term. Now I will turn the call over to Grant to discuss the financial results and related information in greater detail. Grant Williams Thank you, Michael. I will start the financial review this morning by discussing the second quarter operating performance by business segment and then briefly discuss the liquidity position of the company before opening up the call for questions. For the Transactional TV segment, revenue in the second quarter decreased to $8.7 million, as compared to $9.1 million in the same prior year quarter. Domestic revenue declined by approximately $0.1 million and $0.3 million within the VOD and pay-per-view categories, respectively. And we believe these results reflect weaker consumer discretionary spending for our products, as well as competition from other alternatives such as lower cost and free internet websites. Read the rest of this transcript for free on seekingalpha.com