FriendFinder Networks Loses Another $12 Million

FriendFinder Networks Inc. (Nasdaq: FFN), announced financial results for the second quarter and six months ended June 30, 2011.

Net Loss for the second quarter of 2011 was ($11.9 million), or ($0.55) per share, compared to ($4.9 million), or ($0.36) per share, for the second quarter of 2010.

Net Loss for the six months ended June 30, 2011 was ($15.5 million), or ($0.88) per share, compared to ($13.2 million), or ($0.96) per share for the same period in 2010, representing a $2.3 million increase.

Second Quarter Ended June 30, 2011 Highlights:

• Income from operations increased 15.2% year-over-year to $18.0 million;
• Adjusted EBITDA increased 14.5% year-over-year to $27.0 million;
• Average Lifetime Net Revenue per Subscriber increased 10.6% to $82.55;
• Raised $50 million in gross proceeds from Initial Public Offering;
• Repaid $58.2 million in outstanding debt since March 31, 2011, including $8.9 million in August 2011.

Six Months Ended June 30, 2011 Highlights:

• Income from operations increased 31.8% year-over-year to $37.7 million;
• Adjusted EBITDA increased 22.7% year over year to $54.0 million;
• Repaid $72.9 million in outstanding debt since December 31, 2010, including $8.9 million in August 2011.

Gross Profit for the second quarter of 2011 was $58.3 million, an increase of 3.4% compared to $56.4 million in the second quarter of 2010.

The increase in gross profit was primarily the result of a reduction in affiliate expenses of $4.1 million in the three months ended June 30, 2011, compared to the same period in 2010.

Income from operations for the second quarter of 2011 was $18.0 million, an increase of 15.2% compared to $15.6 million for the second quarter of 2010.

The increase was attributable to a $3.5 million reduction in selling and marketing costs related to a decrease in the Company’s ad buy expenses for its internet segment and a $2.4 million reduction in amortization expense, offset by a $4.3 million increase in general and administrative expense.

Internet net revenue was $78.0 million for the second quarter of 2011, a decrease of $1.5 million, or 1.9%, compared to $79.6 million for the second quarter of 2010.

Entertainment net revenue was $5.3 million for the second quarter of 2011, an increase of $264,000, or 5.2%, compared to $5.1 million for the second quarter of 2010.

Internet cost of revenue was $21.2 million for the second quarter of 2011, a decrease of $4.1 million, or 16.2%, compared to $25.3 million for the second quarter of 2010.

Entertainment cost of revenue was $3.9 million for the second quarter of 2011, an increase of $911,000, or 30.8%, compared to $3.0 million for the second quarter of 2010.

Internet gross profit was $56.9 million for the second quarter of 2011, an increase of $2.6 million, or 4.7%, compared to $54.3 million for the second quarter of 2010.

Entertainment gross profit was $1.4 million for the second quarter of 2011, a decrease of $732,000, or 34.6%, compared to $2.1 million for the second quarter of 2010.

Internet income from operations was $21.7 million for the second quarter of 2011, an increase of $5.0 million, or 29.6%, compared to $16.8 million for the second quarter of 2010.

Entertainment loss from operations was ($110,000) for the second quarter of 2011, a decrease of $254,000 compared to income from operations of $144,000 for the second quarter of 2010.

Average Lifetime Net Revenue per Subscriber for the second quarter of 2011 was $82.55, an increase of $7.91, or 10.6%, compared to $74.64 for the second quarter of 2010.

Average Revenue per Subscriber (ARPU) for the second quarter of 2011 was $20.48, an increase of $1.02, or 5.2%, compared to $19.46 for the second quarter of 2010.

Cost per Gross Addition (CPGA) for the second quarter of 2011 was $43.04, a decrease of $7.56, or 14.9%, compared to $50.60 for the second quarter of 2010.

Churn for the second quarter of 2011 was 16.3%, a 0.8% increase as compared to the second quarter of 2010.

Average subscribers for the second quarter of 2011 were 911,560, a decrease of 113,897, or 11.1%, compared to 1,025,457 for the second quarter of 2010.

As of June 30, 2011, the Company had cash and cash equivalents of $40.2 million, compared to $42.0 million at December 31, 2010.