FFN Q2 Report Announces the Closure of Co-Branded Sites

SUNNYVALE, Calif.—Friend Finder Networks (FFN) today released financial results for the second quarter and six months that ended June 30, 2012. CEO Anthony Previte reiterated the company's ongoing commitment to "optimize our business, which includes retaining greater control of our cost structure and maximizing our brand equity," adding that "as part of that effort, we have begun the process of closing nearly 5,000 co-branded websites, which we expect to be fully completed by the end of the year." Regarding second quarter results, FFN announced: Revenue for the second quarter of 2012 was $81.1 million; gross profit was $53.0 million; income from operations was $12.9 million; loss from continuing operations was ($7.4 million), or ($0.24) per share; and adjusted EBITDA for the second quarter of 2012 was $16.9 million. Six month benchmarks were: Revenue for the six months that ended June 30 was $162.1 million; Gross profit was $101.4 million; Income from operations was $21.1 million; loss from continuing operations was ($20.5 million), or ($0.65) per share; and the loss from discontinued operations was ($11.5 million) or ($0.37) per share. Adjusted EBITDA was $30.3 million. In terms of the company's balance sheet, the Tuesday announcement reads, "As of June 30, 2012, the Company had cash and cash equivalents of $12.8 million, compared to $14.6 million at March 31, 2012. As of June 30, 2012, the Company had outstanding principal debt of $510.7 million. On August 4, 2012, the Company paid down $6.3 million of New First Lien Notes and Cash Pay Second Lien Notes. Free Cash Flow per Share was $0.26 for the second quarter ended June 30, 2012." The company also announced the salemin August of local daily deals site JigoCity, which it had purchased in August 2011. Regarding the shift away from its co-branding model, Previte said, “It has become clear that our primary brands, which account for a majority of our revenue, are more manageable, profitable and ultimately offer the greatest opportunity for growth going forward. As a result, we have shifted the focus of our affiliate network strategy to support further development of these primary brands. In parallel to this effort, we have consolidated our internal business units to realign our focus. These changes have resulted in a substantial increase in Adjusted EBITDA relative to the first quarter 2012 and stronger recognizable synergies between our business units.” FFN's Sept. 14 8-K filing can be read here.