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Article Excerpt
OPERATOR: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the New Frontier Media's second quarter fiscal 2009 earnings release conference call. (OPERATOR INSTRUCTIONS.)
As a reminder, today's conference is being recorded, today, Wednesday, November 5th of 2008.
At this time, I'd like to turn the presentation over to your host, Chief Financial Officer, Grant Williams. Please go ahead, sir.
GRANT WILLIAMS, CFO, NEW FRONTIER MEDIA, INC.: Thank you. Good morning, and welcome to the New Frontier Media fiscal 2009 second quarter results conference call.
With me this morning are Michael Weiner, Chief Executive Officer of New Frontier Media, Ken Boenish, President of New Frontier Media, and Ira Bahr, Chief Operating Officer of New Frontier Media.
For the call this morning, Michael will begin with some highlights from the quarter, as well as comments on our strategic direction, then I'll run through our financial results and provide some forward-looking information before we open up the call for questions.
A replay of this conference call will be available for seven days at 1-800-405-2236, using the pass code 11121990#. This call will be archived for 12 months on our website at Noof.com under Investor Relations, webcast events. This call is also being webcast.
During the question and answer segment those of you listening via the internet will be able to ask questions. Please submit your questions via e-mail to Hpatton@Noof.com.
During this call, we may make references to certain non-GAAP financial measures. This information, including a reconciliation to the most directly comparable GAAP financial measures is available in today's earnings release. A copy of our earnings release is available at our website at Noof.com under Investor Relations, news releases.
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 meanings of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including statements regarding the Company's expected financial position and operating results, its business strategy, its financing plans, and the outcome of 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 & Exchange Commission, including our most recently filed Forms 10-Q and 10-K.
With that being said, I'd now like to turn the call over to New Frontier Media's Chief Executive Officer, Michael Weiner.
MICHAEL WEINER, CEO AND CHAIRMAN, NEW FRONTIER MEDIA, INC.: Thank you, and good morning, everyone.
During a very difficult time in our economy, New Frontier continues to demonstrate the strength of our businesses. For the second quarter of the fiscal 2009 overall we grew revenue 8% over the same quarter last year. We maintained, strengthened our balance sheet with cash and investments of $15 million, no debt, and access to a $9 million line of credit.
Most importantly, the Company is driving continued profitability, led by our core Transactional TV business, which delivered solid growth this quarter. One, within the domestic operations of the Transactional TV segment, we added 1.3 million video-on-demand homes this quarter, bringing the total to 34 million. Secondly, we added almost 2 million pay-per-view homes, bringing the pay-per-view total to 144 million network homes.
Thirdly, we have also begun providing high definition video-on-demand content to domestic MSOs, and this service now reaches 21 million U.S. homes. Fourth, in addition to adding new network homes, we're also gaining incremental shelf space on our existing VOD customer platforms.
Lastly, our VOD hours on the nation's largest MSO platform increased 25% as compared to the prior year quarter, and we have tripled the number of hours we provide on the largest IPTV platform in the country, growing from 30 to 90 hours of video-on-demand content.
Looking ahead, we expect to continue to drive domestic Transactional TV growth via category growth, improvements in our share of shelf space and by improving our content performance. We are also seeing promising growth for our Transactional TV segment in markets outside of the U.S. where we are building our presence in regions such as Canada, Latin America, and Europe.
Specifically, in Canada we've begun supplying an additional 2 million homes with video-on-demand content. In Latin America we are delivering pay-per-view channels to approximately half a million network homes, and VOD services to approximately 100,000 homes.
And in Europe, we have signed agreements to launch content on IPTV and IPPC platforms in Germany, and have also executed an agreement with the U.K.'s largest MSO to deliver content to 2.3 million VOD subscribers in that country. In France, we have a deal with the largest IPTV platform which serves over 1.5 million VOD homes.
International markets continue to be a strong opportunity for us. In Europe, operators are just beginning to roll-out VOD content. Less than 30% of the multi-channel market has VOD capability. Over the next few years we expect to see material growth in the number of VOD enabled homes. Our sales team this year, led by Ken Boenish, I think has done a phenomenal job...
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