LodgeNet Entertainment Corp. (LNET) filed Quarterly Report for the period ended 2012-03-31.

Lodgenet Intera has a market cap of $62.6 million; its shares were traded at around $2.11 with and P/S ratio of 0.2.

Highlight of Business Operations:

The Company experienced a 12.1% decrease in total revenue for the first quarter of 2012, to $94.7 million, a decrease of $13.0 million compared to the first quarter of 2011. The decrease was primarily due to an 11.9% decline in the number of Guest Entertainment rooms served and also by a 1.5% decline in Hospitality and Advertising Services revenue per room. Guest Entertainment revenue per room decreased 11.3% period over period, while revenue generated from non-Guest Entertainment services increased 10.8%. Revenue generated from non-Guest Entertainment services comprised 51.4% of total revenue for the quarter.

Hotel Services revenue was $32.1 million in the current quarter, a decline of 7.6% versus the prior year period, primarily due to a 9.4% decline in the number of rooms receiving cable television programming services. On a per-room basis, Hotel Services revenue increased 5.1% quarter over quarter, driven primarily by an increase in the number of rooms receiving high definition (“HD”) cable television programming service and the expiration of contracts with unfavorable terms. System Sales and Related Services revenue per room improved 45.4%, related to professional services work, television programming system sales and service-related revenue and programming fees. Our advertising services subsidiary generated revenue of $1.3 million, a decrease of 49.2% compared to the first quarter of 2011. This decline was expected, due to the previously announced transition of our current analog Superblock platform to an expanded HD advertising platform, targeted to begin operation in early 2013. Our Healthcare subsidiary generated $2.9 million of revenue during the first quarter of 2012, an increase of $1.0 million or 53.2%, driven by increased system installation revenue and a 31.5% increase in the number of beds receiving our recurring services.

Guest Entertainment revenue, which includes on-demand entertainment such as movies, television on-demand, music and games, decreased $12.8 million or 21.8%, to $46.1 million in the first quarter of 2012 as compared to $58.9 million in the prior year quarter. The decrease in revenue resulted primarily from an 11.9% reduction in the average number of Guest Entertainment rooms served and an 11.3% decline in Guest Entertainment revenue per room, which primarily resulted from a decline in revenue from Hollywood and non-theatrical movies, music, video games and television Internet access. The majority of room reductions were attributable to hotel customers who did not switch to a different interactive television provider, but chose to limit their media offering to only free television content. As a result, monthly Guest Entertainment revenue for the first quarter of 2012 declined to $10.46 compared to $11.79 for the first quarter of 2011. On a per-room basis, average monthly movie revenue per room was $9.87 for the first quarter of 2012, an 11.3% reduction as compared to $11.13 per room in the prior year quarter. Non-movie Guest Entertainment revenue per room decreased 10.6% to $0.59 in the first quarter of 2012, related to decreases in music and video game revenue.

Hotel Services revenue, which includes recurring revenue from hotels for cable television programming and Internet service and support, was $32.1 million in the first quarter of 2012 versus $34.7 million in the first quarter of 2011. On a per-room basis, monthly Hotel Services revenue for the first quarter of 2012 increased 5.1%, to $7.28 compared to $6.93 for the first quarter of 2011. Monthly cable television programming revenue per room increased 5.4%, to $6.67 for the first quarter of 2012 as compared to $6.33 for the first quarter of 2011. This increase was the result of an increase in the number of rooms receiving HD service and the expiration of contracts with unfavorable terms. Recurring Internet revenue per room decreased slightly, to $0.58 in the current quarter compared to $0.60 in the prior year quarter.

Selling, general and administrative (“SG&A”) expenses decreased $0.5 million or 5.2%, to $9.2 million in the current quarter as compared to $9.7 million in the first quarter of 2011. The decrease was a result of lower professional services and facilities costs, in addition to our first quarter expense reduction initiatives, which included the reduction of personnel and other payroll-related expenses with a first quarter benefit of $1.5 million. These changes will result in modest expense reductions going forward. As a percentage of revenue, SG&A expenses were 9.7% in the current quarter versus 9.0% in the prior year quarter. SG&A expenses were $2.09 per average installed room per month for the current quarter as compared to $1.94 in the first quarter of 2011.

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