BERLIN, Aug. 16, 2021 /PRNewswire/ -- Spark Networks
SE (NYSE American: LOV), owner and operator of a portfolio of
brands, including but not limited to Zoosk, Christian Mingle, Silver Singles, Elite Singles
and Jdate, with a focus on the 40+ demographic seeking meaningful
relationships, today reported Second Quarter 2021 financial
results.
Second Quarter 2021 Financial Results
- Revenue for the second quarter of 2021 was $55.3 million, a decrease of $1.2 million compared to $56.5 million in the second quarter of 2020. The
decrease in Revenue was attributable to the 3.0% decrease in the
number of average paying subscribers.
- Net Loss was $50.4 million in the
second quarter of 2021. Net loss was impacted by a non-cash
impairment charge based on the re-valuation of company intangibles
and goodwill. Net Loss per share for trailing twelve months was
$(39.20)
- Adjusted EBITDA(1) was $8.3
million in the second quarter of 2021, a decrease of
$1.8 million compared to $10.1 million in the second quarter of 2020.
- The Company ended the quarter with $11.1
million in cash and $87.2
million in debt.
"During the Second Quarter 2021, we entered the social discovery
space with the launch of our livestreaming service, Zoosk Live!,
enhanced dater's experiences through new aesthetics and improved
security to our core brands, and more accessible pricing for Zoosk
users," said Eric Eichmann, CEO of
Spark Networks. "We are currently working on partnerships to
bring new exciting features to our properties this year.
While our expectations for topline growth have been a bit delayed,
we've continued to reduce the Zoosk's decline to its lowest levels
since acquiring it and we remain on a strong path to growth and are
excited about our long-term prospects."
David Clark, newly appointed
Chief Financial Officer of Spark Networks stated, "While the
turnaround of Zoosk has been delayed, we are seeing double-digit
growth in our core brands. We have revised our previous
guidance to reflect these delays. We continued deleveraging
our balance sheet, reducing debt by approximately $12 million since the beginning of the year.
Going forward, we will evaluate capital structure alternatives to
strengthen the balance sheet."
Key Performance Indicators
- Average Paying Subscribers(2) decreased by 26,798,
or 3.0%, to 878,618 in the second quarter of 2021, compared to
905,416 in the same period of 2020.
- Monthly Average Revenue Per User(3), or Monthly
ARPU, increased to $20.96 in the
second quarter of 2021, compared to $20.81 in the same period of 2020.
Financial Outlook
- Spark currently expects full year 2021 revenue to be in the
range of $219 million to $223 million and its full year 2021 Adjusted
EBITDA range to be between $27
million to $30 million, due to
certain delays in product improvement primarily on the Zoosk
platform.
Investor Conference Call
Spark Networks will discuss its financial results during a live
teleconference today at 4:30 p.m. Eastern
time.
Toll-Free (United
States):
1-877-300-8521
Toll-Free (Germany):
0-800-589-5393
International:
1-412-317-6026
In addition, Spark Networks will host a webcast of the call
which will be accessible in the Investor Relations section of the
Company's website
at https://investor.spark.net/investor-relations/home
A replay will begin approximately three hours after completion
of the call and run until August 31,
2021.
Replay
Toll-Free (United
States):
1-844-512-2921
International:
1-412-317-6671
Passcode:
10159321
Safe Harbor Statement:
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, statements involving known and unknown risks,
uncertainties, and other factors that may cause Spark Networks'
performance or achievements to be materially different from those
of any expected future results, performance, or achievements.
These statements include statements regarding Spark Networks being
posed to build on Social Discovery services in the second half of
2021, Spark Networks' work on partnerships to bring new exciting
features to its properties this year, Spark Networks remaining on a
strong path to growth and its excitement about its long-term
prospects, Spark Networks' evaluation of capital structure
alternatives to strengthen the balance sheet going forward, and
Spark Networks' financial outlook for full year 2021 revenue and
full year 2021 Adjusted EBITDA.
Any statements in this press release that are not statements of
historical fact may be considered to be forward-looking statements.
Written words, such as "believes," "hopes," "intends," "estimates,"
"expects," "projects," "plans," "anticipates," and variations
thereof, or the use of future tense, identify forward-looking
statements. By their nature, forward-looking statements and
forecasts involve risks and uncertainties because they relate to
events and depend on circumstances that will occur in the near
future. There are a number of factors that could cause actual
results and developments to differ materially, including, but not
limited to, the risk that the benefits from the acquisition of
Zoosk, Inc. may not be fully realized or may take longer to realize
than expected; risks related to the degree of competition in the
markets in which Spark Networks operates; risks related to the
ability of Spark Networks to retain and hire key personnel,
operating results and business generally; the timing and market
acceptance of new products introduced by Spark Networks'
competitors; Spark Networks' ability to identify potential
acquisitions; Spark Networks' ability to comply with new and
evolving regulations relating to data protection and data privacy;
general competition and price measures in the market place; risks
related to the duration and severity of COVID-19 and its impact on
Spark Networks' business; and general economic conditions.
Additional factors that could cause actual results to differ are
discussed under the heading "Risk Factors" in Spark Networks'
Annual Report on Form 10-K for the year ended December 31, 2020 and in other sections of Spark
Networks' filings with the Securities and Exchange Commission
("SEC"), and in Spark Networks' other current and periodic reports
filed or furnished from time to time with the SEC. All
forward-looking statements in this press release are made as of the
date hereof, based on information available to the Company as of
the date hereof, and the Company assumes no obligation to update
any forward-looking statement except as required by law.
About Spark Networks SE:
Spark Networks SE is a leading global dating company, listed on
the New York Stock Exchange American under the ticker symbol "LOV,"
with headquarters in Berlin,
Germany, and offices in New
York and Utah. The
Company's widening portfolio of premium and freemium dating apps
include Zoosk, EliteSingles, SilverSingles, Christian Mingle, Jdate, and JSwipe, among
others. Spark Networks SE in its current form is the result of the
merger between Affinitas GmbH and Spark Networks, Inc. in 2017 and
the addition of Zoosk, Inc. in 2019. Spark has approximately one
million monthly paying subscribers globally.
For More Information
Investors:
Christopher Camarra
Vice President of Investor Relations
christopher.camarra@spark.net
1 Adjusted EBITDA is one of the primary metrics
by which we evaluate the performance of our business, budget,
forecast and compensate management. We believe this measure
provides management and investors with a consistent view, period to
period, of the core earnings generated from the ongoing operations
and excludes the impact of items that we do not consider
representative of our ongoing performance. This includes:
depreciation and amortization, share-based compensation, asset
impairments, gains or losses on foreign currency transactions and
net interest expense, acquisition related costs and other costs.
Adjusted EBITDA has inherent limitations in evaluating the
performance of the Company, including, but not limited to the
following:
- Adjusted EBITDA does not reflect the cash capital expenditures
during the measurement period;
- Adjusted EBITDA does not reflect any changes in working capital
requirements during the measurement period;
- Adjusted EBITDA does not reflect the cash tax payments during
the measurement period;
- Adjusted EBITDA may be calculated differently by other
companies in our industry, thus limiting its value as a comparative
measure;
Because of these limitations, Adjusted EBITDA should be
considered in addition to other financial performance measures,
including net income and our other U.S. GAAP results. A
reconciliation of the Adjusted EBITDA for the three and six months
ended June 30, 2021 and 2020 can be
found in the table below.
Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation, amortization, share-based compensation, impairment of
intangible assets and goodwill, and acquisition or other costs.
Statements regarding our expectations as to the full year 2021
Adjusted EBITDA do not include certain charges and costs. The
adjustments to EBITDA in future periods are generally expected to
be similar to the kinds of charges and costs excluded from Adjusted
EBITDA in prior periods, including (i) items such as share-based
compensation, asset impairments, gains or losses on foreign
currency transactions and interest expense, and (ii) items related
to acquisitions or other costs that are non-recurring, infrequent,
or unusual in nature including transaction and advisory fees,
merger integration costs, other employee payments, and
severance. The exclusion of these charges and costs in future
periods will have a significant impact on our Adjusted EBITDA. We
are not able to provide a reconciliation of our non-GAAP financial
guidance to the corresponding GAAP measures without unreasonable
effort because of the uncertainty and variability of the nature and
amount of these future charges and costs.
2 Paying subscribers are defined as individuals
who have paid a monthly fee for access to premium services, which
include, among others, unlimited communication with other
registered users, access to user profile pictures and enhanced
search functionality. Average paying subscribers for each month are
calculated as the sum of the paying subscribers at the beginning
and the end of the month, divided by two. Average paying
subscribers for periods longer than one month are calculated as the
sum of the average paying subscribers for each month, divided by
the number of months in such period.
3 Monthly Average Revenue Per User, or Monthly
ARPU, represents the total net subscriber revenue for the period
divided by the number of average paying subscribers for the period,
divided by the number of months in the period.
|
Spark Networks
SE
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(in
thousands)
|
|
|
Preliminary
June 30,
2021
|
|
December 31,
2020
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
11,054
|
|
|
$
|
19,267
|
|
|
Accounts receivable,
net
|
|
9,340
|
|
|
5,507
|
|
|
Goodwill and
Intangible Assets
|
|
180,155
|
|
|
215,581
|
|
|
Other
assets
|
|
24,348
|
|
|
50,088
|
|
|
Total
assets
|
|
$
|
224,897
|
|
|
$
|
290,443
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
12,600
|
|
|
$
|
19,037
|
|
|
Accounts
payable
|
|
12,450
|
|
|
11,127
|
|
|
Deferred
revenue
|
|
39,597
|
|
|
38,304
|
|
|
Accrued expenses and
other current liabilities
|
|
26,600
|
|
|
28,429
|
|
|
Long-term debt, net
of current portion
|
|
74,600
|
|
|
80,109
|
|
|
Other
liabilities
|
|
18,272
|
|
|
18,534
|
|
|
Total
liabilities
|
|
184,119
|
|
|
195,540
|
|
|
Total shareholders'
equity
|
|
40,778
|
|
|
94,903
|
|
|
Total
liabilities and shareholders' equity
|
|
$
|
224,897
|
|
|
$
|
290,443
|
|
|
Spark Networks
SE
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
Preliminary
|
|
|
|
Preliminary
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Revenue
|
|
$
|
55,253
|
|
|
$
|
56,527
|
|
|
$
|
111,632
|
|
|
$
|
114,184
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of revenue,
exclusive of depreciation
and amortization
|
|
32,881
|
|
|
33,223
|
|
|
69,799
|
|
|
69,764
|
|
|
Other operating
expenses
|
|
49,224
|
|
|
17,984
|
|
|
67,665
|
|
|
35,788
|
|
|
Total operating costs
and expenses
|
|
82,105
|
|
|
51,207
|
|
|
137,464
|
|
|
105,552
|
|
|
Operating (loss)
income
|
|
(26,852)
|
|
|
5,320
|
|
|
(25,832)
|
|
|
8,632
|
|
|
Other expense,
net
|
|
(3,220)
|
|
|
(2,440)
|
|
|
(8,404)
|
|
|
(6,819)
|
|
|
(Loss) income before
income taxes
|
|
(30,072)
|
|
|
2,880
|
|
|
(34,236)
|
|
|
1,813
|
|
|
Income tax
expense
|
|
(20,339)
|
|
|
(2,046)
|
|
|
(22,679)
|
|
|
(3,141)
|
|
|
Net (loss)
income
|
|
$
|
(50,411)
|
|
|
$
|
834
|
|
|
$
|
(56,915)
|
|
|
$
|
(1,328)
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net (loss) income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
Preliminary
|
|
|
|
Preliminary
|
|
|
|
(in
thousands)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net (loss)
income
|
|
$
|
(50,411)
|
|
|
$
|
834
|
|
|
$
|
(56,915)
|
|
|
$
|
(1,328)
|
|
|
Net interest
expense
|
|
3,802
|
|
|
3,386
|
|
|
7,242
|
|
|
6,812
|
|
|
(Gain) loss on
foreign currency transactions
|
|
(584)
|
|
|
(746)
|
|
|
1,144
|
|
|
207
|
|
|
Income tax
expense
|
|
20,339
|
|
|
2,046
|
|
|
22,679
|
|
|
3,141
|
|
|
Depreciation and
amortization
|
|
2,298
|
|
|
2,332
|
|
|
4,588
|
|
|
4,653
|
|
|
Stock-based
compensation expense
|
|
580
|
|
|
1,434
|
|
|
1,616
|
|
|
2,344
|
|
|
Acquisition related
costs(1)
|
|
—
|
|
|
673
|
|
|
—
|
|
|
1,464
|
|
|
Other
costs(2)
|
|
292
|
|
|
149
|
|
|
764
|
|
|
277
|
|
|
Adjusted
EBITDA
|
|
$
|
8,318
|
|
|
$
|
10,108
|
|
|
$
|
13,120
|
|
|
$
|
17,570
|
|
|
|
(1)
Acquisition related costs primarily consist of transaction costs,
including legal, consulting, advisory fees, and severance and
retention costs.
|
|
(2) Includes primarily consulting and
advisory fees related to special projects, as well as post-merger
integration activities and long-term debt transaction and advisory
fees.
|
|
Spark Networks
SE
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
(in
thousands)
|
|
|
|
Six Months Ended
June 30,
|
|
|
Preliminary
|
|
|
|
|
2021
|
|
2020
|
|
Net loss
|
|
$
|
(56,915)
|
|
|
$
|
(1,328)
|
|
|
Adjustments to
reconcile net loss to cash provided by operating
activities:
|
|
|
|
|
|
Non-cash
items
|
|
65,567
|
|
|
12,716
|
|
|
Change in operating
assets and liabilities
|
|
(4,003)
|
|
|
(4,181)
|
|
|
Net cash provided
by operating activities
|
|
4,649
|
|
|
7,207
|
|
|
Capital
expenditures
|
|
(661)
|
|
|
(1,438)
|
|
|
Acquisitions of
businesses, net of cash acquired
|
|
—
|
|
|
(513)
|
|
|
Net cash used in
investing activities
|
|
(661)
|
|
|
(1,951)
|
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
(13,610)
|
|
|
(9,319)
|
|
|
Effects of exchange
rate fluctuations on cash
|
|
(295)
|
|
|
(2)
|
|
|
Net decrease in
cash and cash equivalents and restricted cash
|
|
(9,917)
|
|
|
(4,065)
|
|
|
|
|
|
|
|
Cash and cash
equivalents and restricted cash at beginning of period
|
|
21,117
|
|
|
17,457
|
|
|
Cash and cash
equivalents and restricted cash at end of period
|
|
$
|
11,200
|
|
|
$
|
13,392
|
|
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SOURCE Spark Networks SE