SPARK NETWORKS INC SPARK NETWORKS® REPORTS FOURTH QUARTER AND FULL YEAR 2016 RESULTS
LOS ANGELES, Calif., March 21, 2017 -- Spark Networks, Inc. (NYSE MKT: LOV) reported fourth quarter and full year 2016 financial results today.
"We made clear progress in the fourth quarter to improve profitability and implement a unified technology platform across our networks as we work to reposition the business for the future," said Danny Rosenthal, Chief Executive Officer of Spark Networks. "The significant improvement in adjusted EBITDA in Q4 reflects our actions to reduce costs as we focus on driving operational efficiency and profitable growth in the future.
"We expect 2017 will be a transformational year for Spark. Our priorities are clear: operating profitably, relaunching our technology platform and driving future growth through effective marketing investments. Importantly, we are on track to deliver our new technology platform and re-launch JDate in Q2 and Christian Mingle in Q3. We have more work to do, but with our new platform in place and our focus on operating efficiently, we will be well-positioned to invest behind data-driven marketing programs that enable us to connect customers and drive future growth and value creation."
Key Quarterly Metrics
Q4 2016 Q3 2016 Q4 2015
Revenue $7.7 Million $8.4 Million $10.7 Million
Contribution1 $7.1 Million $7.2 Million $6.8 Million
Net Loss $(3.7) Million $(94) Thousand $(1.2) Million Adjusted EBITDA2 $1.8 Million $1.5 Million $116 Thousand Cash Balance $11.4 Million $11.3 Million $6.6 Million Period Ending Subs3 142,372 158,233 200,023
Avg. Paying Subs3 150,675 173,564 199,781
ARPU $16.89 $15.81 $17.26
Fourth Quarter 2016 Financial Results
Revenue: For the fourth quarter of 2016, total revenue was $7.7 million, a decrease of 28% compared to the year ago period, and an 8% decrease from the prior quarter. The year over year decrease was primarily driven by decreases in both average paying subscribers and average revenue per user ("ARPU"). The sequential decrease was driven by decreases in average paying subscribers, reflecting reduced direct marketing investment in the Jewish and Christian Networks. These decreases were partially offset by a 7% sequential increase in ARPU from the prior quarter.
Contribution: Contribution was $7.1 million in the quarter, an increase of 4% compared to the year ago period, and a 1% decrease from the prior quarter. Our contribution margin increased to 91% from 85% in the prior quarter and 64% in the year ago period. Total direct marketing expenses
decreased 83% to $673,000 in the fourth quarter of 2016 as compared to $3.9 million in the prior year period.
Net Loss: Net Loss was $(3.7) million in the quarter, a $(2.5) million decline versus the year ago period and a $(3.6) million decrease from the prior quarter. In the fourth quarter, the Company recognized $4.5 million of non-cash intangible and long-lived asset impairment expense. $4.2 million of the impairment expense was related to goodwill and intangible assets within our Jewish Networks reporting unit.
Adjusted EBITDA: For the fourth quarter of 2016, Adjusted EBITDA was $1.8 million, an increase of $1.7 million versus the year ago period and a $252,000 increase from the prior quarter. Current period Adjusted EBITDA does not include $4.5 million of non-cash intangible and long-lived asset impairment expense.
Cash: Cash provided by operating activities in the fourth quarter was $568,000. At December 31, 2016, the Company had $11.4 million in cash and cash equivalents, compared to $11.3 million at the end of the prior quarter. At quarter end, the Company had no outstanding debt.
Key Annual Metrics
2016 2015
Revenue $35.1 Million $48.1 Million
Contribution1 $26.7 Million $28.4 Million
Net Loss $(6.9) Million $(1.4) Million
Adjusted EBITDA2 $2.5 Million $2.8 Million
Cash Balance $11.4 Million $6.6 Million
Period Ending Subs3 142,372 200,023
Avg. Paying Subs3 178,407 203,557
ARPU $16.13 $18.92
Full Year 2016 Financial Results
Revenue: For the full year 2016, total revenue was $35.1 million, a decrease of 27.1% compared to the year ago period. The year over year decrease was primarily driven by 10.3% and 13.4% decreases in average paying subscribers for the Jewish and Christian Networks segments, respectively, coupled with decreases in ARPU of 17.2% and 14.0%, within these segments, respectively.
Contribution: For the full year 2016, contribution was $26.7 million, a decrease of 6% compared to the year ago period. Our contribution margin increased to 76% from 59% in the year ago period. The margin expansion was primarily driven by our Christian Networks, which increased contribution margin to 67% from 39% in the year ago period.
Net Loss: For the full year 2016, Net Loss was $(6.9) million, a $(5.5) million decline versus the year ago period. In 2016, the Company recognized $4.6 million of non-cash intangible and long- lived asset impairment expense. $4.2 million of the impairment expense was related to goodwill and intangible assets within our Jewish Networks reporting unit.
Adjusted EBITDA: For the full year 2016, Adjusted EBITDA was $2.5 million, a decrease from
$2.8 million in the year ago period. Current period Adjusted EBITDA does not include $1.2 million
of severance payments and $4.6 million of non-cash intangible and long-lived asset impairment expense.
Cash: Cash used in operating activities in 2016 was $1.4 million. At December 31, 2016, the Company had $11.4 million in cash and cash equivalents, compared to $6.6 million at the end of 2015. At year end, the Company had no outstanding debt.
SPARK NETWORKS, INC. SEGMENT4 RESULTS FROM OPERATIONS
(in thousands except subscriber and ARPU information)
Q4 '16 v.
Q4 '16 v.
Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q4 '15
Q3 '16
Revenue Jewish Networks | $ 3,136 | $ 3,322 | $ 3,628 | $ 3,995 | $ 4,299 | -27.1% | -5.6% |
Christian Networks | 4,262 | 4,673 | 5,044 | 5,405 | 5,940 | -28.2% | -8.8% |
Other Networks | 335 | 385 | 413 | 438 | 446 | -24.8% | -13.0% |
Offline & Other Businesses | 10 | 11 | 13 | 21 | 20 | -49.9% | -9.1% |
Total Revenue | $ 7,743 | $ 8,391 | $ 9,098 | $ 9,859 | $ 10,705 | -27.7% | -7.7% |
Direct Mktg. Exp. Jewish Networks | $ 316 | $ 420 | $ 372 | $ 497 | $ 648 | -51.2% | -24.7% |
Christian Networks | 316 | 750 | 1,001 | 4,420 | 3,111 | -89.8% | -57.9% |
Other Networks | 41 | 60 | 105 | 120 | 129 | -68.4% | -31.7% |
Total Direct Mktg. Exp. | $ 673 | $ 1,230 | $ 1,478 | $ 5,038 | $ 3,888 | -82.7% | -45.3% |
Contribution Jewish Networks | $ 2,820 | $ 2,902 | $ 3,256 | $ 3,497 | $ 3,652 | -22.8% | -2.8% |
Christian Networks | 3,946 | 3,923 | 4,043 | 985 | 2,829 | 39.5% | 0.6% |
Other Networks | 294 | 325 | 308 | 318 | 316 | -7.0% | -9.4% |
Offline & Other Businesses | 10 | 11 | 13 | 20 | 20 | -49.9% | -8.0% |
Total Contribution | $ 7,070 | $ 7,161 | $ 7,620 | $ 4,821 | $ 6,817 | 3.7% | -1.3% |
Period Ending Subs Jewish Networks | 51,519 | 52,952 | 59,868 | 63,982 | 65,004 | -20.7% | -2.7% |
Christian Networks | 82,163 | 95,047 | 112,895 | 122,935 | 123,800 | -33.6% | -13.6% |
Other Networks | 8,690 | 10,234 | 10,915 | 11,321 | 11,219 | -22.5% | -15.1% |
Subs. | 142,372 | 158,233 | 183,678 | 198,238 | 200,023 | -28.8% | -10.0% |
Total Period Ending
Average Paying Subs. | |||||||
Jewish Networks | 52,493 | 57,684 | 61,732 | 63,930 | 64,627 | -18.8% | -9.0% |
Christian Networks | 88,774 | 105,108 | 117,024 | 124,180 | 123,888 | -28.3% | -15.5% |
Other Networks | 9,408 | 10,772 | 11,182 | 11,341 | 11,266 | -16.5% | -12.7% |
Total Avg. Paying Subs. | 150,675 | 173,564 | 189,938 | 199,451 | 199,781 | -24.6% | -13.2% |
ARPU | |||||||
Jewish Networks | $ 18.58 | $ 18.79 | $ 19.33 | $ 20.46 | $ 21.82 | -14.8% | -1.1% |
Christian Networks | 15.75 | 14.60 | 14.09 | 14.17 | 15.25 | 3.3% | 7.9% |
Other Networks | 11.55 | 11.69 | 12.15 | 12.52 | 12.72 | -9.2% | -1.2% |
Total ARPU5 $ 16.89 $ 15.81 $ 15.70 $ 16.12 $ 17.26 -2.2% 6.8%
Spark Networks Inc. published this content on 21 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 21 March 2017 20:21:17 UTC.
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