CORRECTION: Spark Networks(R) Reports Second Quarter 2017 Results

Companies Mentioned:

Primary Exchange: AMEX
Under the Symbol: LOV

$6.08

($0.1700)

-2.7200


CORRECTION: Spark Networks(R) Reports Second Quarter 2017 Results

Tuesday, August 8, 2017 6:05 PM

In the news release, "Spark Networks(R) Reports Second Quarter 2017 Results," issued August 7, 2017 by Spark Networks, Inc. (NYSE American: LOV), we are advised by the company that, due to a production error, the previously furnished press release contained incorrect information for ARPU metrics within the tables presenting Segment Results From Operations and Key Quarterly Metrics. This press release corrects ARPU metrics within these tables.

LOS ANGELES, CA / ACCESSWIRE / August 8, 2017 / Spark Networks, Inc. (NYSE American: LOV) today reported results for the second quarter of 2017.

"With our recent relaunch of JDate on our new technology platform we reached a major strategic milestone, and are well on our way toward completing the launch of Christian Mingle later this quarter," said Danny Rosenthal, Chief Executive Officer of Spark Networks. "We expect that the release of the new platform will quickly translate into operational cost savings and increased marketing efficiency and effectiveness."

"In Q2, we saw our second consecutive quarter of revenue stability within the Jewish Networks. These results, when combined with our new platform, position us to make the data-driven marketing investments necessary to drive future growth and value creation."

As previously announced on May 2, 2017, Spark Networks, Inc. entered into a definitive agreement with Affinitas GmbH ("EliteSingles"), which operates premium online dating platforms EliteSingles, eDarling and Attractive World to combine in a stock-for-stock merger. Spark continues to expect the transaction to close in the fourth quarter of 2017, subject to Spark shareholder approval and the satisfaction of certain other customary closing conditions.

In light of the pending merger, Spark will not host a conference call to review its second quarter 2017 results.

Key Quarterly Metrics

Q2 2017
Q1 2017
Q2 2016
Revenue
$6.6 Million
$7.3 Million
$9.1 Million
Contribution1
$6.0 Million
$5.8 Million
$7.6 Million
Net Loss
$(2.5) Million
$(2.1) Million
$329 Thousand
Adjusted EBITDA2
$1.2 Million
$131 Thousand
$1.4 Million
Cash Balance
$9.8 Million
$10.8 Million
$3.1 Million
Period Ending Subs3
111,371
119,540
183,678
Avg. Paying Subs3
114,925
130,441
189,938
ARPU
$19.12

$18.38
$15.70

Second Quarter 2017 Financial Results

Revenue: For the second quarter of 2017, total revenue was $6.6 million, a decrease of 27% compared to the year ago period, and a 9% decrease from the prior quarter. The year over year and sequential decreases were primarily driven by a decrease in average paying subscribers, reflecting reduced direct marketing investment in the Jewish and Christian Networks. These decreases were partially offset by year over year and sequential increases in ARPU of 22% and 4%, respectively.

Contribution: Contribution was $6.0 million in the quarter, a decrease of 22% compared to the year ago period, and a 2% increase from the prior quarter. Our contribution margin increased to 90% from 80% in the prior quarter and increased from 84% in the year ago period. Total direct marketing expenses decreased 53% to $690,000 in the second quarter of 2017 as compared to $1.5 million in the prior year period.

Net Loss: Net Loss was $(2.5) million in the quarter, compared to Net Income of $329,000 in the year ago period and a Net Loss of $(2.1) million in the prior quarter.

Adjusted EBITDA: For the second quarter of 2017, Adjusted EBITDA was $1.2 million, a decrease of $(283,000) versus the year ago period and an increase of $1.0 million from the prior quarter.

Cash: Cash used in operating activities in the second quarter was $440,000. At June 30, 2017, the Company had $9.8 million in cash and cash equivalents, compared to $10.8 million at the end of the prior quarter. At quarter end, the Company had no outstanding debt.

SPARK NETWORKS, INC.
SEGMENT4 RESULTS FROM OPERATIONS
(in thousands except subscriber and ARPU information)

Q2 2017
Q1 2017
Q4 2016
Q3 2016
Q2 2016
Q2 '17 v. Q2 '16
Q2 '17 v. Q1 '17
Revenue
Jewish Networks
$
3,137
$
3,148
$
3,136
$
3,322
$
3,628
-13.5
%
-0.4
%
Christian Networks
3,371
3,813
4,262
4,673
5,044
-33.2
%
-11.6
%
Other Networks
134
286
335
385
413
-67.6
%
-53.2
%
Offline & Other Businesses
(2
)
17
10
11
13
-115.7
%
-111.8
%
Total Revenue
$
6,640
$
7,264
$
7,743
$
8,391
$
9,098
-27.0
%
-8.6
%
Direct Mktg. Exp.
Jewish Networks
$
259
$
570
$
316
$
420
$
372
-30.4
%
-54.6
%
Christian Networks
405
803
316
750
1,001
-59.5
%
-49.6
%
Other Networks
26
60
41
60
105
-75.2
%
-56.7
%
Total Direct Mktg. Exp.
$
690
$
1,433
$
673
$
1,230
$
1,478
-53.3
%
-51.8
%
Contribution
Jewish Networks
$
2,878
$
2,578
$
2,820
$
2,902
$
3,256
-11.6
%
11.6
%
Christian Networks
2,966
3,009
3,946
3,923
4,043
-26.6
%
-1.4
%
Other Networks
108
227
294
325
308
-64.9
%
-52.3
%
Offline & Other Businesses
(2
)
17
10
11
13
-119.7
%
-114.8
%
Total Contribution
$
5,950
$
5,831
$
7,070
$
7,161
$
7,620
-21.9
%
2.0
%
Period Ending Subs.
Jewish Networks
47,487
47,236
51,519
52,952
59,868
-20.7
%
0.5
%
Christian Networks
57,947
65,146
82,163
95,047
112,895
-48.7
%
-11.1
%
Other Networks
5,937
7,158
8,690
10,234
10,915
-45.6
%
-17.1
%
Total Period Ending Subs.
111,371
119,540
142,372
158,233
183,678
-39.4
%
-6.8
%
Average Paying Subs.
Jewish Networks
47,278
48,823
52,493
57,684
61,732
-23.4
%
-3.2
%
Christian Networks
60,972
73,627
88,774
105,108
117,024
-47.9
%
-17.2
%
Other Networks
6,675
7,991
9,408
10,772
11,182
-40.3
%
-16.5
%
Total Avg. Paying Subs.
114,925
130,441
150,675
173,564
189,938
-39.5
%
-11.9
%
ARPU
Jewish Networks
$
21.80
$
21.07
$
19.68
$
18.79
$
19.33
12.8
%
3.5
%
Christian Networks
18.43
17.23
15.74
14.60
14.09
30.8
%
7.0
%
Other Networks
6.54
11.91
11.55
11.69
12.15
-46.2
%
-45.1
%
Total ARPU5
$
19.12
$
18.34
$
16.85
$
15.81
$
15.70
21.8
%
4.3
%

Distribution of New Subscription Purchases6

Q2 2017
Q1 2017
Q4 2016
Q3 2016
Q2 2016
Jewish Networks