Spark Networks Inc (LOV) filed Quarterly Report for the period ended 2009-06-30.
Spark Networks is a leading provider of online personals in the United States and internationally. Our comprehensive user-friendly websites offer convenient and safe places for likeminded singles to connect. Many of these connections lead to long term relationships and quite often marriage. Spark Networks Inc has a market cap of $50.9 million; its shares were traded at around $2.48 with a P/E ratio of 9.9 and P/S ratio of 0.9.
Highlight of Business Operations:
Net revenues decreased 25.0% to $11.2 million in the second quarter of 2009 compared to $15.0 million in the second quarter of 2008. The majority of this decrease can be attributed to the managed decline in the Company’s General Market Networks segment and lower net revenues for the Jewish Networks. Net revenues for the Jewish Networks segment decreased 18.3% to $7.1 million in the second quarter of 2009 compared to $8.6 million in the second quarter of 2008. The decrease in net revenues is primarily driven by a lower average paying subscriber base, reflecting a downturn in the economy. Net revenues for our Other Affinity Networks segment decreased 2.9% to $3.3 million in the second quarter of 2009 compared to $3.4 million in the second quarter of 2008. Net revenues for the General Market Networks segment decreased 67.8% to $701,000 in the second quarter of 2009, compared to $2.2 million in the second quarter of 2008. The decrease in General Market Networks net revenues is due to the decrease in average paying subscribers, reflecting management’s decision to eliminate inefficient online marketing expenses. Net revenues of our Offline & Other Businesses segment decreased 77.6% to $171,000 in the second quarter of 2009 compared to $765,000 in the second quarter of 2008. The decrease in net revenues is primarily attributable to the absence of a travel event for our members in the second quarter of 2009 versus one travel event hosted in the second quarter of 2008.
Direct marketing expenses decreased 25.8% to $3.0 million in the second quarter of 2009 compared to $4.0 million in the second quarter of 2008. The majority of this decline can be attributed to a reduction in inefficient online marketing programs associated with the General Market Networks segment and the absence of a travel event. Direct marketing expenses for the Jewish Networks segment decreased 4.5% to $596,000 in the second quarter of 2009 compared to $624,000 in the second quarter of 2008. Direct marketing expenses for the Other Affinity Networks segment increased 11.4% to $2.2 million for the second quarter of 2009 compared to $2.0 million in the second quarter of 2008, reflecting growth initiatives for certain properties within this segment. Direct marketing expenses for the General Market Networks segment decreased 84.6% to $148,000 in the second quarter of 2009 compared to $962,000 in the second quarter of 2008. The decrease reflects management’s decision to pursue cost effective online subscriber acquisition marketing campaigns. Direct marketing expenses for the Offline & Other Businesses segment decreased 89.8% to $48,000 for the second quarter of 2009 compared to $469,000 for the second quarter of 2008, primarily reflecting the cost of a travel event in 2008 and the absence of one in 2009.
Operating expenses consist primarily of sales and marketing, customer service, technical operations, development and general and administrative expenses. Operating expenses for the second quarter of 2009 were $6.3 million, a decrease of 21.3% compared to $8.0 million for the second quarter of 2008. The decrease over the second quarter of 2009 is primarily attributable to a $292,000 decrease in sales and marketing expense, a $146,000 decrease in customer service, a $173,000 decrease in technical operations expense and a $1.1 million decrease in general and administrative expense.
Net revenues decreased 22.4% to $23.3 million in the first six months of 2009 compared to $30.0 million in the first six months of 2008. The majority of this decrease can be attributed to the managed decline in the Company’s General Market Networks segment and lower net revenues for the Jewish Networks. Net revenues for the Jewish Networks segment decreased 15.4% to $14.6 million in the first six months of 2009 compared to $17.3 million in the first six months of 2008. The decrease in net revenues is primarily driven by a lower average paying subscriber base, reflecting a downturn in the economy. Net revenues for our Other Affinity Networks segment decreased 2.3% to $6.6 million in the first six months of 2009 compared to $6.8 million in the first six months of
Direct marketing expenses decreased 27.9% to $5.8 million for the first six months of 2009 compared to $8.1 million for the first six months of 2008. The majority of this decline can be attributed to a reduction in inefficient online marketing programs associated with the General Market Networks segment and the absence of travel events. Direct marketing expenses for the Jewish Networks segment decreased 12.8% to $1.2 million for the first six months of 2009 compared to $1.3 million for the first six months of 2008. The decrease reflects our shift to more efficient online marketing programs. Direct marketing expenses for the Other Affinity Networks segment increased 9.1% to $4.2 million for the first six months of 2009 compared to $3.8 million for the first six months of 2008, reflecting growth initiatives for certain properties within this segment. Direct marketing expenses for the General Market Networks segment decreased 81.7% to $421,000 for the first six months of 2009 compared to $2.3 million for the first six months of 2008. The decrease reflects management’s decision to pursue cost effective online subscriber acquisition marketing campaigns. Direct marketing expenses for the Offline & Other Businesses segment decreased 85.3 % to $97,000 for the first six months of 2009 compared to $658,000 for the first six months of 2008 primarily reflecting the cost of two travel events in the first six months of 2008 and the absence of travel events in the first six months of 2009.
Operating expenses consist primarily of sales and marketing, customer service, technical operations, development and general and administrative expenses. Operating expenses for the first six months of 2009 were $14.3 million, a decrease of 13.4% compared to $16.5 million for the first six months of 2008. The decrease over the first six months of 2008 is primarily attributable to a $424,000 decrease in sales and marketing expense, a $232,000 decrease in customer service expense, a $366,000 decrease in technical operations expense and a $2.0 million decrease in general and administrative expense, offset by $880,000 of asset impairment charges.
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