Wednesday, New Frontier Media, Inc. (NOOF), a producer of branded television networks, reported a decline in second-quarter net income, despite growth in revenue, hurt primarily by costs associated with the set-top box initiative.
Boulder, Colorado-headquartered New Frontier posted net income of $1.3 million or $0.06 per share, compared to net income of $2.1 million or $0.09 per share in the second quarter of last year. On average, two analysts polled by First Call/Thomson Financial expected the company to earn $0.06 per share.
Quarterly net sales increased to $13.4 million from $12.4 million in the preceding year.
Segment-wise, revenues in the Transactional TV segment grew by approximately $0.8 million to $10.8 million, driven by improved video-on-demand performance, offset by the termination of the C-Band services in the most-recent quarter.
Film production segment revenue increased to $2.2 million from $2.0 million last year, driven by increase in owned content revenue of approximately $0.3 million, primarily from the delivery of seven titles from a thirteen episode series to a premium cable channel.
Revenue in the Direct-to-consumer segment remained flat at $0.4 million in the second quarter of both the years.
For the quarter, cost of sales increased to $4.4 million from $3.5 million in the previous year, primarily due to additional expenses associated with the set-top box initiative and higher film cost amortization.
Operating expenses increased to $6.8 million from $5.7 million in the year-ago period, reflecting higher advertising and promotion costs in the Transactional TV segment, higher consultant advisory fees within the Corporate Administration segment, and from the set-top box initiative.
For the first six months, the company reported net income of $2.5 million or $0.11 per share, compared to net income of $3.6 million or $0.15 per share in the comparable period of last year. Net sales grew to $26.4 million from $25.4 million in the year-ago period.
Shares of NOOF closed Tuesday's regular trade at $2.24.
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