Twistbox & AMV Parent Mandalay Media Reports Quarterly Earnings

• Cash continues to be a scarce resource, the company had $2.3mil in the bank as of Dec 31, 2009
• Mandalay Media (MNDL) claims key contributors to falling revenue are "a very challenging European sales environment", the loss of a "significant on-deck advertising management agreement", "tighter regulatory restrictions" of off-deck adult content in the UK and "lower (games) revenues from U.S. carriers"
• The company reduced the costs attributed to licensing IP by 50% in the last 9mos of 2009, compared with to the same period in 2008
• The company has substantially cut development headcount/costs
• The company continues to renegotiate payments and covenants associated with a ~$20k debt obligation it has with a small cap fund called ValueAct, with the latest twist being that payments are postponed until July 31st and the minimum cash covenant has been temporarily reduced to $1.6mil until March 10, 2010... and $4mil thereafter (until the next renegotiation)
• Adult content continues to dominate revenues (see below), accounting for 88% in the last 9mos of the year and 89% in the last 3mos

Check out all my posts about Mandalay Media by clicking this link.

Mandalay's Gotta Shake It's Money Maker

Mandalay Media (MNDL), the parent of mobile adult content and games companies AMV & Twistbox, reported earnings and guidance yesterday for their fiscal Q2 2010. Revenue increased more than 100% from the year ago period... but that growth is almost entirely attributable to the AMV acquisition. A look at recent consecutive quarters and company guidance to full year revenue "in excess of $40 million"... indicates the company is running super-flat. I've posted a lot about Mandalay and my lingering concerns continue to intensify. They've gotta deal with their content identity crisis. I contend that they should focus on the adult content market, which provides 87.5% of their revenue, and in which they're a major player (remember Twistbox used to be Waat Media). However, I'm not at all convinced that's the direction they're headed following the appointment of Ray Schaaf as President and their recent Hail Mary attempt to buy World Poker Tour. More immediately, they've got to deal with their deepening cash crisis... as of September 30th they've dwindled their reserves down to $2.8mil, which won't last them 6 months at current burn rates.

Mandalay's Bold Bid To Buy World Poker Tour Fails According To Report

According to a post this morning on GamblingOnline, the shareholders of World Poker Tour Entertainment (WPTE) voted to accept a $12.3mil purchase offer from UK online gaming powerhouse PartyGaming Plc (PRTY), through its Peerless Media subsidiary, at meeting in L.A. last Friday night. This presumably brings to an end the ambitions of Mandalay Media (MNDL), parent of mobile entertainment consumer brand Twistbox, to buy the company. Mandalay had mounted a bold (audacious), last minute bid that looked to be substantially superior ($36.5mil) from a purely financial standpoint... but apparently many WPTE shareholders felt that the match was not strategically superior. The deal should be completed at the end of the month according to the post. Given the massive discrepancy in the offers, I'm guessing this isn't the very end of the story... I'll keep you posted. If it is the end of this story, it'll be interesting to see if Mandalay diverts its acquisition ambitions elsewhere.