FriendFinder Sees Slip in Revenue in 1st Quarter
SUNNYVALE, Calif. — FriendFinder Networks Inc. reported revenue slipping to $81.1 million in the first quarter of the year, down $2.4 million from the same time last year.
But the adult social networking company, which also owns the Penthouse empire, said some key sectors of its business are seeing improved numbers, including live chat which saw revenue increasing 14.1 percent from last year's first quarter.
The company also saw new adult website subscriptions rising 2.5 percent over the past year and 12.6 percent increase from the previous quarter.
Current FriendFinder Networks CEO Marc Bell said he's optimistic about the company's long-term prospects with publication of the company's first quarter earnings statement, which showed figures through March 31 (Anthony Previte, current company president and COO, will transition to the CEO role effective July 1).
"Our current efforts are focused on building brand equity, subscriber retention and acquiring new subscribers to FriendFinder Networks," Bell said. "To support these initiatives and to position FriendFinder Networks for growth, we have increased our customer acquisition costs in a meaningful way."
The Sunnyvale, Calif., company reported less gross profit ($48.5 million) in the quarter after it increased affiliate spending.
"Put into action in January, I am pleased to report that these actions resulted in an increase in new adult subscribers for the first time in six quarters. Additionally, conversion rates increased marginally year over year for both our adult and general audience websites, a trend we expect to continue throughout the year."
FriendFinder Networks said the decline in first-quarter revenue was due to a decrease in overall traffic and "challenges" in Europe which offset the impact of new subscriber growth. The company reported a first-quarter net loss of $21.5 million, wider than the net loss of $3.7 million in the same period last year.
The company said it continues to work with debt holders on some lien notes. As of March 31, the company had outstanding principal debt of $497.7 million.
FriendFinder Networks operates AdultFriendFinder.com, Amigos.com, AsiaFriendFinder.com, Cams.com, FriendFinder.com, BigChurch.com and SeniorFriendFinder.com, among others. FriendFinder Networks also produces and distributes original video content and engages in brand licensing. Previte, in a conference call, said that the company plans on relaunching AsianFriendFinder.com in the second quarter.
FriendFinder Networks, which trades publicly on the Nasdaq, was down seven cents to $1 a share. The company had its initial public offering last May at $10 a share.