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  • henryalanis henryalanis Apr 1, 2013 5:48 PM Flag

    Reading the Q4 2012 10 K.

    And it's very interesting reading indeed.

    Year: $314.4 million Revenue,
    $55.1 million Income from Operations
    $49.4 million Net Loss!

    Isn't that a bit ugly? I sure think it is.

    Paying subscribers:

    2011 920K
    2012 830K OUCH! Losing 90K in a year, almost 10%. Very ugly indeed.

    paid usage - upslightly, 3.1- 2.9 million minutes. Hard to get too excited with a 10% cut in subbers though.

    ARPU is up, but so is the cost to add them. Essentially a wash. But look at the key metric Avg. Lifetime Rev. per member. WAS 81, and now is 70!! a 14% cut, that's terrible. And it gets worse:

    "We are currently in default under our New First Lien Notes, Cash Pay Second Lien Notes and Non-Cash Pay Second Lien Notes. "

    You never want to see this! They have til May 6 to get the rest of their creditors to agree to a new plan. Some 80% seem to have done so.

    Their lenders gave them some time in 2012 to improve, but their patience ran out, and the interest rate is now 15%. Which leads to this nugget:

    "The report of our independent registered public accounting firm includes an explanatory paragraph concerning conditions that raise substantial doubt about our ability to continue as a going concern, and there is no guarantee that we will be able to continue to operate our business. "

    OUCH!! The dreaded "accounting statement. " This is serious, kiddies.

    Apparently all will be clarified in the next month or so.

    "We appealed the NASDAQ staff determination and attended a hearing before the NASDAQ Hearings Panel on March 28, 2013. The appeal will stay the delisting of our common stock pending the NASDAQ panel’s decision; however, there can be no assurance that the panel will grant our request for continued listing."

    I wonder if the appeal board is waiting to see what happens by May 6?

    Income from Operations is at a 4 year low. Not promising. And it gets worse!

    Net Cash from Ops: 2011 36.8 K
    2012: 12.5K That's a 66% cut!

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