BEIJING, Feb. 25 /Xinhua-PRNewswire-FirstCall/ -- AirMedia Group
Inc. (NASDAQ:AMCN), the operator of the largest digital media
network in China dedicated to air travel advertising, today
announced its unaudited financial results for the fourth quarter
and fiscal year ended December 31, 2007. Fourth Quarter 2007
Financial Highlights -- Total revenues increased 164.4%
year-over-year and 53.3% sequentially to US$16.3 million; -- Net
revenues increased 168.6% year-over-year and 54.0% sequentially to
US$15.6 million; -- Net income increased 273.1% year-over-year to
US$6.1 million. Basic and diluted income per ADS was both US$0.09;
-- Adjusted income (a non-GAAP measure), which excluded share-based
compensation expenses and amortization of acquired intangible
assets, increased 310.6% year-over-year and 121.8% sequentially to
US$7.0 million. Adjusted basic and diluted income per ADS (a
non-GAAP measure) was US$0.14 and US$0.12, respectively. "AirMedia
achieved solid growth during the fourth quarter, as we experienced
further expansion of our revenue base through increased utilization
of our product offerings by both new and existing clients,"
remarked Herman Man Guo, Chairman and Chief Executive Officer of
AirMedia. "This growth was complemented by the implementation of
several critical business initiatives, specifically the launching
of our new digital frames network, which quickly received strong
customer demand and contributed to our strong results this quarter
and will continue to drive AirMedia's growth." Fiscal Year 2007
Financial Highlights -- Total revenues increased 130.8%
year-over-year to US$43.6 million -- Net revenues increased 132.1%
year-over-year to US$41.6 million; -- Net loss was US$5.1 million,
which included a one-time share-based compensation expense of
US$17.5 million in the third quarter of 2007, as compared to net
income of $4.1 million in 2006. Basic and diluted loss per ADS was
both US$0.23; -- Adjusted income (a non-GAAP measure), which
excluded share-based compensation expenses and amortization of
acquired intangible assets, increased 245.8% year-over-year to
US$14.2 million. Adjusted basic and diluted income per ADS (a
non-GAAP measure) was both US$0.38. "2007 was an important and
successful year for AirMedia. Our Initial Public Offering on the
NASDAQ market was well received and has strengthened our position
as the largest digital media network operator in the air travel
advertising field," continued Herman Man Guo. "We have recently
signed several important agreements with both our suppliers and
clients. The business momentum and interest we have generated
during the past year leaves us in an excellent position for 2008."
Fourth Quarter 2007 Financial Results Net Revenues Total revenues
by product line for the fourth quarter of 2007, the third quarter
of 2007 and the fourth quarter of 2006 were as follows (numbers in
USD 000's except for percentage): Quarter Quarter Ended % of Ended
% of December Total September Total 31, 2007 Revenues 30, 2007
Revenues Digital TV screens in airports 9,408 57.8% 6,953 65.4%
Digital TV screens on airplanes 4,141 25.4% 2,550 24.0% Digital
frames in airports 1,263 7.8% -- -- Other displays 1,475 9.0% 1,122
10.6% Total revenues 16,287 100.0% 10,625 100.0% Net revenues
15,606 10,137 Quarter Ended % of Y/Y Q/Q December Total Growth
Growth 31, 2006 Revenues rate rate Digital TV screens in airports
2,944 47.8% 219.6% 35.3% Digital TV screens on airplanes 1,992
32.3% 107.9% 62.4% Digital frames in airports -- -- -- -- Other
displays 1,225 19.9% 20.4% 31.5% Total revenues 6,161 100.0% 164.4%
53.3% Net revenues 5,810 168.6% 54.0% Total revenues for the fourth
quarter of 2007 reached US$16.3 million, representing a
year-over-year increase of 164.4% from US$6.2 million in the same
period one year ago and a sequential increase of 53.3% from US$10.6
million in the previous quarter. The year-over-year and sequential
increases were due to the increases of revenues from all of our
product lines. Revenues from digital TV screens in airports for the
fourth quarter of 2007 grew 219.6% year-over-year and 35.3%
sequentially to US$9.4 million. The year-over-year increase was due
to the increase of average advertising revenue per time slot sold
(or "ASP") and utilization rate. Please refer to "Summary of
Selected Operating Data" for detailed definitions. The sequential
increase was due to the increase of utilization rate. Utilization
rate increased by 1.8 percentage points year-over-year and 7.4
percentage points sequentially to 40.8% due to continued sales
efforts and better acceptance of AirMedia's digital media by
advertisers. ASP increased 47.9% year-over-year and decreased 6.3%
sequentially to US$1,023. The year-over-year increase of ASP was
because AirMedia increased its listing prices of all digital
screens in airports twice by over 30% respectively in the beginning
of April 2007 and October 2007. The sequential decrease of ASP was
due to the increase of the utilization rate of airports in the
second and third tier cities with lower listing and selling prices,
accounting for a greater percentage of revenues from digital TV
screens in airports. Revenues from digital TV screens on airplanes
for the fourth quarter of 2007 grew 107.9% year-over-year and 62.4%
sequentially to US$4.1 million primarily due to the increase of ASP
and utilization rate. ASP increased 98.2% year-over-year and 7.5%
sequentially to US$14,957. The year-over-year increase of ASP was
because AirMedia increased its listing prices of digital screens on
all airlines twice by over 30% respectively in the beginning of
April 2007 and October 2007. Utilization rate increased 0.5
percentage points year-over-year and 19.8 percentage points
sequentially to 61.6%. Utilization rate increased due to continued
sales efforts and better acceptance of AirMedia's digital media by
advertisers. We started to generate revenues from digital frames in
airports in December 2007 from the placement of clients'
advertisements on the newly- upgraded digital frames at Terminal 2
of Beijing Capital International Airport since the beginning of
December 2007. As of December 31, 2007, AirMedia completed the
installation of digital frame network at Terminals 2 and 3 of
Beijing Capital International Airport. The Company expects that
revenues from digital frames will constitute a significant part of
total revenues in 2008. Please refer to "Summary of Selected
Operating Data" for more operating data. Business tax and other
sales tax for the fourth quarter of 2007 was 681,000, representing
a year-over-year increase of 94.0% from 351,000 in the same period
one year ago and a sequential increase of 39.5% from 488,000 in the
previous quarter due to our business expansion. Net revenues for
the fourth quarter of 2007 reached US$15.6 million, representing a
year-over-year increase of 168.6% from US$5.8 million in the same
period one year ago and a sequential increase of 54.0% from US$10.1
million in the previous quarter. The year-over-year and sequential
increases were due to the increase of total revenues. Cost of
Revenues Cost of revenues for the fourth quarter of 2007 was US$7.1
million, representing a year-over-year increase of 141.4% from
US$2.9 million in the same period one year ago and a sequential
increase of 36.7% from US$5.2 million in the previous quarter. The
year-over-year and sequential increases of cost of revenues were
due to the increases of concession fees and other components of
cost of revenues. Cost of revenues as a percentage of net revenues
in the fourth quarter of 2007 decreased to 45.6% from 50.7% in the
same period one year ago and 51.4% in the previous quarter because
the cost of revenues did not increase in line with the increase of
net revenues. AirMedia incurs concession fees to airports for
placing and operating digital TV screens and other displays, and to
airlines for placing programs on their digital TV screens. Most of
the concession fees are fixed with a yearly escalation. The total
concession fee under each concession right agreement is charged to
the consolidated statements of operations on a straight-line basis
over the agreement periods, which is generally between three and
five years. Concession fees for the fourth quarter of 2007 were
US$3.5 million, representing a year-over-year increase of 79.6%
from US$1.9 million in the same period one year ago and a
sequential increase of 15.4% from US$3.0 million in the previous
quarter due to additional concession contracts. Concession fees as
a percentage of net revenues in the fourth quarter of 2007
decreased to 22.4% from 33.5% in the same period one year ago and
29.9% in the previous quarter because concession fees did not
increase in line with the increase of net revenues. Gross Profit
Gross profit for the fourth quarter of 2007 was US$8.5 million,
representing a year-over-year increase of 196.6% from US$2.9
million in the same period one year ago and a sequential increase
of 72.2% from US$4.9 million in the previous quarter. Gross profit
as a percentage of net revenues for the fourth quarter of 2007 was
54.4%, up from 49.3% in the same period one year ago and 48.6% in
the previous quarter. The increase of gross margin was because cost
of revenues did not increase in line with the increase of net
revenues. Operating Expenses Operating expenses for the fourth
quarter of 2007, the third quarter of 2007 and the fourth quarter
of 2006 were as follows (numbers in USD 000's except for
percentage): Quarter Quarter Ended Ended December % of Net
September % of Net 31, 2007 Revenues 30, 2007 Revenues Selling and
marketing expenses 1,823 11.7% 1,146 11.3% General and
administrative expenses 1,910 12.2% 19,135 188.8% Total operating
expenses 3,733 23.9% 20,281 200.1% Total operating expenses
excluding share-based compensation expenses and amortization of
acquired intangible assets (a non-GAAP measure) 2,893 18.5% 1,886
18.6% Quarter Ended Y/Y Q/Q December % of Net Growth Growth 31,
2006 Revenues rate rate Selling and marketing expenses 836 14.4%
118.1% 59.1% General and administrative expenses 447 7.7% 327.3%
-90.0% Total operating expenses 1,283 22.1% 191.0% -81.6% Total
operating expenses excluding share-based compensation expenses and
amortization of acquired intangible assets (a non-GAAP measure)
1,229 21.2% 135.4% 53.4% Total operating expenses for the fourth
quarter of 2007 were US$3.7 million, representing a year-over-year
increase of 190.9% from US$1.3 million in the same period one year
ago and a sequential decrease of 81.6% from US$20.3 million in the
previous quarter. Total operating expenses for the fourth quarter
of 2007 included share- based compensation expenses of US$774,000
while there were no share-based compensation expenses in the same
period one year ago. Total operating expenses excluding share-based
compensation expenses and amortization of acquired intangible
assets (a non-GAAP measure) for the fourth quarter of 2007 were
US$2.9 million, representing a year-over-year increase of 135.4%
from US$1.2 million in the same period one year ago and a
sequential increase of 53.4% from US$1.9 million in the previous
quarter. Total operating expenses excluding share-based
compensation expenses and amortization of acquired intangible
assets as a percentage of net revenues (a non-GAAP measure) in the
fourth quarter of 2007 decreased to 18.5% from 21.2% in the same
period one year ago and 18.6% in the previous quarter. Selling and
marketing expenses for the fourth quarter of 2007 were US$1.8
million including $174,000 in share-based compensation expenses,
representing a year-over-year increase of 118.1% from US$836,000 in
the same period one year ago and a sequential increase of 59.1%
from US$1.1 million in the previous quarter. The year-over-year
increase was primarily due to expansion of the direct sales force
and share-based compensation expenses in connection with the
employee stock option grants made on July 2, 2007, July 20, 2007
and November 29, 2007. The sequential increase was primarily due to
expansion of the direct sales force. General and administrative
expenses for the fourth quarter of 2007 were US$1.9 million
including $600,000 in share-based compensation expenses,
representing a year-over-year increase of 327.1% from US$447,000 in
the same period one year ago and a sequential decrease of 90.0%
from US$19.1 million in the previous quarter. The year-over-year
increase was primarily due to headcount increases, higher
professional expenses and share-based compensation expenses in
connection with the employee stock option grants made on July 2,
2007, July 20, 2007 and November 29, 2007. The sequential decrease
was primarily because that there was a one-time share-based
compensation expense of US$17.5 million included in the third
quarter of 2007 in connection with the one-time share transfer of
5,000,000 ordinary shares in September 2007 by a principal
shareholder of the company to Mr. Herman Man Guo in recognition of
his service as Chairman and Chief Executive Officer. Income from
Operations Income from operations for the fourth quarter of 2007
was US$4.8 million, representing a year-over-year increase of
201.3% from US$1.6 million in the same period one year ago and a
sequential increase from loss from operations of US$15.4 million in
the previous quarter. Income from operations excluding share-based
compensation expenses and amortization of acquired intangible
assets (a non-GAAP measure) for the fourth quarter of 2007 was 5.6
million, representing a year-over-year increase of 242.7% from 1.6
million in the same period one year ago and a sequential increase
of 83.8% from 3.0 million. Operating margin excluding the effect of
share-based compensation expenses and amortization of acquired
intangible assets (a non-GAAP measure) for the fourth quarter of
2007 was 35.9%, as compared to 28.1% in the same period one year
ago and 30.0% in the previous quarter. Net Income Net income for
the fourth quarter of 2007 was US$6.1 million, representing a
year-over-year increase of 273.1% from US$1.6 million in the same
period one year ago and a sequential increase from net loss of
US$15.3 million in the previous quarter. The US GAAP diluted income
per ADS for the fourth quarter of 2007 was US$0.09, compared to US
GAAP diluted income per ADS of US$0.02 in the same period one year
ago and US GAAP diluted loss per ADS of US$0.54 in the previous
quarter. Adjusted income (a non-GAAP measure) for the further
quarter of 2007, which excluded share-based compensation expenses
and amortization of acquired intangible assets, was US$7.0 million,
representing a year-over-year increase of 310.6% from US$1.7
million in the same period one year ago and a sequential increase
of 121.8% from US$3.1 million in the previous quarter. Diluted
adjusted income per ADS (a non-GAAP measure) for the fourth quarter
of 2007 was US$0.12, as compared to diluted adjusted income per ADS
of US$0.06 in the same period one year ago and diluted adjusted
income per ADS of US$0.10 in the previous quarter. Please refer to
the attached table for a reconciliation of net income/loss and
basic and diluted income/loss per ADS under US GAAP to adjusted
income/loss and basic and diluted adjusted income/loss per ADS.
Fiscal Year 2007 Financial Results Net Revenues Total revenues by
product line for fiscal year 2007 and fiscal year 2006 were as
follows (figures in USD 000's except for percentage): Year Year
Ended % of Ended % of Y/Y December Total December Total Growth 31,
2007 Revenues 31, 2006 Revenues rate Digital TV screens in airports
26,921 61.7% 10,502 55.6% 156.3% Digital TV screens on airplanes
11,093 25.4% 4,868 25.8% 127.9% Digital frames in airports 1,263
2.9% -- -- -- Other displays 4,334 10.0% 3,526 18.6% 22.9% Total
revenues 43,611 100.0% 18,896 100.0% 130.8% Net revenues 41,628
17,935 132.1% Total revenues for the fiscal year 2007 were US$43.6
million, representing a year-over-year increase of 130.8% from
US$18.9 million in fiscal year 2006. The year-over-year increase
was due to the increases of revenues from all of our product lines.
Revenues from digital TV screens in airports for fiscal year 2007
grew 156.3% year-over-year to US$26.9 million primarily due to the
increase of ASP and utilization rate. ASP increased 30.2%
year-over-year to US$949. The Company increased its listing prices
of digital screens in all airports twice by over 30% each time in
the beginning of October 2007 and April 2007. Utilization rate
increased by 2.9 percentage points year-over-year to 36.6% due to
continued sales efforts and higher acceptance of AirMedia's digital
media by advertisers. The absolute growth rate of the utilization
rate was offset by the increase of the number of airports in
operation, which increased to 39 airports at the end of December
31, 2007 from 28 airports at the end of December 31, 2006, and the
increase of the length of the advertising cycle in airports from 20
minutes per hour of the programs to 25 minutes per hour in the
beginning of 2007. Revenues from digital TV screens on airplanes
for fiscal year 2007 grew 127.9% year-over-year to US$11.1 million
primarily due to the increase of ASP and the utilization rate. ASP
increased 53.2% year-over-year to US$13,132. The Company increased
its listing prices of digital screens on all the airlines twice by
over 30% each time in the beginning of April 2007 and October 2007.
Utilization rate increased by 6.3 percentage points year-over-year
to 48.2% due to continued sales efforts and better acceptance of
AirMedia's digital media by advertisers. Please refer to "Summary
of Selected Operating Data" for more operating data. Business tax
and other sales tax for fiscal year 2007 was 2.0 million,
representing a year-over-year increase of 106.3% from 961,000 in
fiscal year 2006 due to our business expansion. Net revenues for
the fiscal year 2007 were US$41.6 million, representing a
year-over-year increase of 132.1% from US$17.9 million in fiscal
year 2006. The year-over-year increase was due to the increases of
total revenues. Cost of Revenues Cost of revenues for fiscal year
2007 was US$21.4 million, representing a year-over-year increase of
112.8% from US$10.0 million in fiscal year 2006. The year-over-year
and sequential increases of cost of revenues were due to the
increases of concession fees and other components of cost of
revenues. Cost of revenues as a percentage of net revenues in
fiscal year 2007 decreased to 51.3% from 56.0% in fiscal year 2006
primarily because cost of revenues did not increase in line with
the increase of net revenues. Concession fees for fiscal year 2007
were US$12.0 million, representing a year-over-year increase of
77.4% from US$6.8 million in fiscal year 2006 due to additional new
concession contracts. Concession fees as a percentage of net
revenues in fiscal year 2007 decreased to 28.8% from 37.7% in
fiscal year 2006 because concession fees did not increase in line
with the increase of net revenues. Gross Profit Gross profit for
fiscal year 2007 was US$20.3 million, representing a year-over-year
increase of 156.7% from US$7.9 million in the same period one year
ago. Gross profit as a percentage of net revenues for fiscal year
2007 was 48.7%, up from 44.0% in fiscal year 2006. The increase of
gross margin was primarily because cost of revenues did not
increase in line with the increase of net revenues. Operating
Expenses Operating expenses for fiscal year 2007 and fiscal year
2006 were as follows (figures in USD 000's except for percentage):
Year Year Ended % of Ended % of Y/Y December Net December Net
Growth 31, 2007 Revenues 31, 2006 Revenues rate Selling and
marketing expenses 4,813 11.6% 2,751 15.3% 75.0% General and
administrative expenses 21,982 52.8% 1,293 7.2% 1600.1% Total
operating expenses 26,795 64.4% 4,044 22.5% 562.6% Total operating
expenses excluding share-based compensation expenses and
amortization of acquired intangible assets (a non-GAAP measure)
7,436 17.9% 3,990 22.2% 86.4% Total operating expenses for fiscal
year 2007 were US$26.8 million, representing a year-over-year
increase of 562.6% from US$4.0 million in fiscal year 2006. Total
operating expenses for fiscal year 2007 included share-based
compensation expenses of US$19.1 million while there were no
share-based compensation expenses in fiscal year 2006. Total
operating expenses excluding share-based compensation expenses and
amortization of acquired intangible assets (a non-GAAP measure) for
fiscal year 2007 were US$7.4 million, a year- over-year increase of
86.4% from US$4.0 million in fiscal year 2006. Total operating
expenses excluding share-based compensation expenses and
amortization of acquired intangible assets as a percentage of net
revenues (a non-GAAP measure) in fiscal year 2007 decreased to
17.9% from 22.2% in fiscal year 2006. Selling and marketing
expenses for fiscal year 2007 were US$4.8 million including
US$274,000 in share-based compensation expenses, representing a
year-over-year increase of 75.0% from US$2.8 million in fiscal year
2006. The year-over-year increase was primarily due to expansion of
the direct sales force and share-based compensation expenses in
connection with the employee stock option grants made on July 2,
2007, July 20, 2007 and November 29, 2007. General and
administrative expenses for fiscal year 2007 were US$22.0 million
including $18.8 million in share-based compensation expenses,
representing a year-over-year increase of 1600.1% from US$1.3
million in fiscal year 2006. The year-over-year increase was
primarily due to the increase of share-based compensation expenses
in connection with the one-time share transfer of 5,000,000
ordinary shares in September 2007 as explained above and the
employee stock option grants made on July 2, 2007, July 20, 2007
and November 29, 2007, headcount increases and higher professional
expenses. Income from Operations Loss from operations for fiscal
year 2007 was US$6.5 million, as compared to income from operations
of US$3.9 million in fiscal year 2006. Income from operations
excluding share-based compensation expenses and amortization of
acquired intangible assets (a non-GAAP measure) for fiscal year
2007 was 12.8 million, representing a year-over-year increase of
228.4% from 3.9 million in fiscal year 2006. Operating margin
excluding the effect of share-based compensation expenses and
amortization of acquired intangible assets (a non-GAAP measure) for
fiscal year 2007 was 30.8%, as compared to 21.8% in fiscal year
2006. Net Income Net loss for fiscal year 2007 was US$5.1 million,
as compared to net income of US$4.1 million in fiscal year 2006.
The US GAAP diluted loss per ADS for fiscal year 2007 was US$0.23,
as compared to US GAAP diluted income per ADS of US$0.06 in fiscal
year 2006. Adjusted income (a non-GAAP measure) for fiscal year
2007, which excluded share-based compensation expenses and
amortization of acquired intangible assets, was US$14.2 million,
representing a year-over-year increase of 245.8% from US$4.1
million in fiscal year 2006. Diluted adjusted income per ADS (a
non-GAAP measure) for fiscal year 2007 was US$0.38, as compared to
diluted adjusted income per ADS of US$0.14 in fiscal year 2006.
Please refer to the attached table for a reconciliation of net
income/loss and basic and diluted income/loss per ADS under US GAAP
to adjusted income/loss and basic and diluted adjusted income/loss
per ADS. "We demonstrated strong financial results during both the
fourth quarter and full year of 2007, and delivered increased
revenues while effectively managing our costs," remarked Conor
Chiahung Yang, Chief Financial Officer of AirMedia. "Due to these
efforts, we expect our results to improve in the coming quarters as
we continue to sign new concession contracts and obtain more
business from our clients." Other Recent Developments In January
2008, AirMedia entered into a new concession contract with China
National Aviation Media & Advertising Company, a subsidiary
company of China National Aviation Holding Company, to operate
additional 3-minute advertising time on the airplanes of Air China
from March 1, 2008 to June 31, 2009, which will increase its
capacity to meet the high demand for Air China's advertisements
from clients. AirMedia increased its listing prices of digital TV
screens in four selected airports starting from January 1, 2008,
including over 50% in Beijing and over 15% in Shanghai, Shenzhen
and Chengdu. AirMedia also increased its listing prices in digital
frames of Beijing Capital International Airport by over 30%
starting from January 1, 2008. By the end of December 2007,
AirMedia completed the installation of digital frames at Terminals
2 and 3 of Beijing Capital International Airport. AirMedia also
installed 328 digital TV screens at Terminal 3 which increased
AirMedia's total number of digital TV screens in Beijing Capital
International Airport to over 420. Ken Zijian Zeng, former General
Manager of Asiaray Media Group, joined AirMedia as Executive
President in January 2008. His joining will further strengthen
AirMedia's relationship with its partners and enlarge its customer
base. Business Outlook As a result of current business visibility,
AirMedia currently expects the following financial results for the
first quarter of 2008: -- Total Revenues for the first quarter of
2008 will be in an amount ranging from US$19.0 million to US$21.0
million, representing a year- over-year increase of 130.9% to
155.2% from the same period of 2007; The above forecast reflects
AirMedia's current and preliminary view, which is subject to
change. Please refer to our Safe Harbor Statement for the factors
which could cause actual results to differ materially from those
contained in any forward-looking statement. Summary of Selected
Operating Data Quarter Quarter Quarter Ended Ended Ended YOY QOQ
December September December Growth Growth 31, 2007 30, 2007 31,
2006 Rate Rate Digital TV screens in airports Number of airports in
operation 39 37 28 39.3% 5.4% Number of time slots available for
sale (1) 22,557 19,050 10,920 106.6% 18.4% Number of time slots
sold (2) 9,198 6,364 4,256 116.1% 44.5% Utilization rate (3) 40.8%
33.4% 39.0% 1.8% 7.4% Average advertising revenue per time slot
sold (4) US$1,023 US$1,092 US$692 47.8% -6.3% Digital TV screens on
airplanes Number of airlines in operation 9 9 9 -- -- Number of
time slots available for sale (1) 450 438 432 4.2% 2.7% Number of
time slots sold (2) 277 183 264 4.9% 51.4% Utilization rate (3)
61.6% 41.8% 61.1% 0.5% 19.8% Average advertising revenue per time
slot sold (5) US$14,957 US$13,916 US$7,548 98.2% 7.5% Year Ended
Year Ended YOY December December Growth 31, 2007 31, 2006 Rate
Digital TV screens in airports Number of airports in operation 39
28 39.3% Number of time slots available for sale (1) 77,574 42,800
81.2% Number of time slots sold (2) 28,359 14,409 96.8% Utilization
rate (3) 36.6% 33.7% 2.9% Average advertising revenue per time slot
sold (4) US$949 US$729 30.2% Digital TV screens on airplanes Number
of airlines in operation 9 9 -- Number of time slots available for
sale (1) 1,752 1,356 29.2% Number of time slots sold (2) 845 568
48.8% Utilization rate (3) 48.2% 41.9% 6.3% Average advertising
revenue per time slot sold (5) US$13,132 US$8,572 53.2% Notes: (1)
We define a time slot as a 30-second equivalent advertising time
unit for digital TV screens in airports and digital TV screens on
airplanes, which is shown during each advertising cycle on a weekly
basis in a given airport or on a monthly basis on the routes of a
given airline, respectively. Our airport advertising programs are
shown repeatedly on a daily basis during a given week in one-hour
cycles and each hour of programming includes 25 minutes of
advertising content, which allows us to sell a maximum of 50 time
slots per week. The number of time slots available for our digital
TV screens in airports during the period presented is calculated by
multiplying the time slots per week per airport by the number of
weeks during the period presented when we had operations in each
airport and then calculating the sum of all the time slots
available for each of our network airports. The length of our
in-flight programs typically ranges from approximately 45 minutes
to an hour per flight, approximately five to 13 minutes of which
consist of advertising content. The number of time slots available
for our digital TV screens on airplanes during the period presented
is calculated by multiplying the time slots per airline per month
by the number of months during the period presented when we had
operations on each airline and then calculating the sum of all the
time slots for each of our network airlines. (2) Number of time
slots sold refers to the number of 30-second equivalent advertising
time units sold during the period presented. (3) Utilization rate
refers to total time slots sold as a percentage of total time slots
available for sale during the relevant period. (4) Average
advertising revenue per time slot sold for digital TV screens in
airports is calculated by dividing our revenues derived from
digital TV screens in airports by the number of time slots sold for
digital TV screens in airports. (5) Average advertising revenue per
time slot sold for digital TV screens on airplanes is calculated by
dividing our revenues derived from digital TV screens on airplanes
by the number of time slots sold for digital TV screens on
airplanes. Earnings Conference Call Details AirMedia will hold a
conference call to discuss the fourth quarter 2007 earnings at 8:00
PM U.S. Eastern Time on February 25, 2008 (5:00 PM U.S. Pacific
Time on February 25, 2008; 9:00 AM Beijing/Hong Kong time on
February 26, 2008). AirMedia's management team will be on the call
to discuss the financial results and highlights and to answer
questions. The toll-free number for U.S. participants is
+1-866-271-5140. The toll number for UK participants is
+44-207-365-8426. The toll number for Hong Kong participants is
+852-3002-1672. The toll number for other international
participants is +1-617-213-8893. The pass code for all participants
is AMCN. A replay of the call will be available for 1 week between
10:00 pm Eastern Time on February 25, 2008 and 10:00 pm Eastern
Time on March 3, 2008. The toll-free number for U.S callers is
+1-888-286-8010 and the dial-in number for international callers is
+1-617-801-6888. The pass code for the replay is 19666414.
Additionally, a live and archived web cast of this call will be
available on the Investor Relations section of the AirMedia
corporate website at http://ir.airmedia.net.cn/ . Use of Non-GAAP
Financial Measures The Company's management uses non-GAAP financial
measures to gain an understanding of the Company's comparative
operating performance and future prospects. The Company's non-GAAP
financial measures exclude certain special items, including (1)
amortization of non-cash stock-based compensation expense, (2)
amortization of acquired intangible assets. Non-GAAP financial
measures are used by the Company's management in their financial
and operating decision-making, because management believes they
reflect the Company's ongoing business in a manner that allows
meaningful period-to-period comparisons. The Company's management
believes that these non-GAAP financial measures provide useful
information to investors and others in understanding and evaluating
the Company's current operating performance and future prospects in
the same manner as management does, if they so choose.
Specifically, we believe the non-GAAP financial measures provide
useful information to both management and investors by excluding
certain charges that we believe are not indicative of our core
operating results. The non-GAAP financial measures have
limitations. They do not include all items of income and expense
that affect the Company's operations. Specifically, these non-GAAP
financial measures are not prepared in accordance with GAAP, may
not be comparable to non-GAAP financial measures used by other
companies and, with respect to the non-GAAP financial measures that
exclude certain items under GAAP, do not reflect any benefit that
such items may confer to the Company. Management compensates for
these limitations by also considering the Company's financial
results as determined in accordance with GAAP. The presentation of
this additional information is not meant to be considered superior
to, in isolation from or as a substitute for results prepared in
accordance with US GAAP. Note to the Financial Information The
financial information disclosed above is unaudited. The audit of
the financial statements and related notes to be included in our
annual report on Form 20-F for the year ended December 31, 2007 is
still in progress. Adjustments to the financial statements may be
identified when the audit work is completed, which could result in
significant differences between our audited financial statements
and this unaudited financial information. About AirMedia Group Inc.
AirMedia Group Inc. (NASDAQ:AMCN) operates the largest digital
media network in China dedicated to air travel advertising.
AirMedia has contractual concession rights to operate digital TV
screens in 52 airports, including 28 out of the 30 largest airports
in China, and has contractual concession rights to place its
programs on the routes operated by 9 airlines, including the three
largest airlines in China. In addition, AirMedia also has
contractual concession rights to operate 46-inch digital frames and
large size digital frames ranging from 63 to 70 inches in several
major airports. AirMedia also offers advertisers other media
platforms in airports, such as 360-degree LED displays, mega
display screens, and shuttle bus displays etc. For more information
about AirMedia, please visit http://www.airmedia.net.cn/ . Safe
Harbor Statement This announcement contains forward-looking
statements. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as "will," "expect," "anticipate," "future,"
"intend," "plan," "believe," "estimate," "confident" and similar
statements. Among other things, the quotations from management in
this announcement, as well as AirMedia Group Inc.'s strategic and
operational plans, contain forward-looking statements. AirMedia may
also make written or oral forward- looking statements in its
periodic reports to the U.S. Securities and Exchange Commission on
Forms 20-F and 6-K, etc., in its annual report to shareholders, in
press releases and other written materials and in oral statements
made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements
about AirMedia's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties. A number of important factors could cause actual
results to differ materially from those contained in any forward-
looking statement. Potential risks and uncertainties include, but
are not limited to, if advertisers or the viewing public do not
accept, or lose interest in, our air travel digital media network,
we may be unable to generate sufficient cash flow from our
operating activities and our prospects and results of operations
could be negatively affected; we derive substantially all of our
revenues from the provision of air travel advertising services, and
if there is a downturn in the air travel advertising industry, we
may not be able to diversify our revenue sources; if we are unable
to retain existing concession rights contracts or obtain new
concession rights contracts on commercially advantageous terms that
allow us to place or operate the digital TV screens in airports or
on airplanes, we may be unable to maintain or expand our network
coverage and our business and prospects may be harmed; a
substantial majority of our revenues are currently concentrated in
the five largest airports and three largest airlines in China, and
if any of these airports or airlines experiences a material
business disruption, our ability to generate revenues and our
results of operations would be materially and adversely affected;
AirMedia's limited operating history makes it difficult to evaluate
our future prospects and results of operations; and other risks
outlined in AirMedia's filings with the U.S. Securities and
Exchange Commission. AirMedia does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law. AirMedia Group Inc. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (In U.S. dollars in thousands) December
31, December 31, 2007 2006 Assets Current assets: Cash 210,915
2,086 Accounts receivable 13,478 5,261 Prepaid concession fees
13,130 1,204 Other current assets 2,393 1,377 Deferred tax assets -
current 95 81 Total current assets 240,011 10,009 Acquired
intangible assets, net 4,862 4,885 Property and equipment, net
15,985 4,519 Long term deposits 4,706 750 Long-term investment 788
-- Deferred tax assets - non-current 507 384 TOTAL ASSETS 266,859
20,547 Liabilities Current liabilities: Accounts payable 4,666
2,863 Accrued expenses and other current liabilities 1,309 1,297
Deferred revenue 1,712 1,162 Income tax payable 32 -- Amounts due
to related parties 11 2,366 Amounts due to shareholders -- 211
Total current liabilities 7,730 7,899 Non-current liabilities:
Deferred tax liability - non-current 1,527 1,612 Total liabilities
9,257 9,511 Minority interest (3) (1) Series A convertible
redeemable preferred shares -- 13,736 Series A subscription
receivable -- (2,920) Shareholders' equity Ordinary shares 133 62
Ordinary shares subscription receivable -- (62) Additional paid-in
capital 263,130 -- Statutory reserve 1,782 102 Accumulated
deficiency (10,317) (174) Accumulated other comprehensive income
2,877 293 Total shareholders' equity 257,605 221 TOTAL LIABILITIES,
MINORITY INTEREST, SERIES A CONVERTIBLE REDEEMABLE PREFERRED
SHARES, AND SHAREHOLDERS' EQUITY 266,859 20,547 AirMedia Group Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In U.S.
dollars in thousands, except share related data) Three Months Ended
Dec. 31, Sep. 30, Dec. 31, 2007 2007 2006 Revenues 16,287 10,625
6,161 Business tax and other sales tax (681) (488) (351) Net
revenues 15,606 10,137 5,810 Cost of revenues 7,117 5,206 2,948
Gross profit (loss) 8,489 4,931 2,862 Operating expenses: Selling
and marketing * 1,823 1,146 836 General and administrative * 1,910
19,135 447 Total operating expenses 3,733 20,281 1,283
Income/(loss) from operations 4,756 (15,350) 1,579 Interest income
1,369 303 6 Income/(loss) before income taxes and minority interest
6,125 (15,047) 1,585 Income tax expense (181) 51 (57) - Current 32
- Deferred (213) 51 (57) Net income/(loss) before minority Interest
6,306 (15,098) 1,642 Minority interest (4) 3 1 Loss from equity
accounted investment (174) (158) -- Net income (loss) 6,128
(15,253) 1,643 Deemed dividend on series A convertible redeemable
preferred shares - Accretion of redemption premium (127) (361)
(363) Deemed dividend on series B convertible redeemable preferred
shares - Accretion of redemption premium (523) (1,302) -- Net
income/(loss) attributable to holders of ordinary shares 5,478
(16,916) 1,280 Net Income allocated for computing EPS Ordinary
shares - - Basic 4,689 (16,916) 799 Net Income allocated for
computing EPS preferred A shares - - Basic 655 361 844 Net Income
allocated for computing EPS preferred B shares - - Basic 783 1,302
-- Net income used in calculating Income per ordinary share - -
Diluted 4,689 (16,916) 799 Net income/(loss) per ordinary share -
basic $0.04 ($0.27) $0.01 - diluted $0.04 ($0.27) $0.01 Net
income/(loss) per ADS - basic $0.09 ($0.54) $0.02 - diluted $0.09
($0.54) $0.02 Net income/(loss) per Series A preferred share $0.05
$0.01 $0.02 Net income/(loss) per Series B preferred share $0.12
$0.08 -- Weighted average ordinary shares outstanding used in
computing net income per ordinary share - basic 106,154,347
62,617,391 62,400,000 Weighted average ordinary shares outstanding
used in computing net income per ordinary share - diluted
108,713,868 62,617,391 62,400,000 share used in calculating net
income/(loss) per Series A preferred share - - basic 13,465,217
37,382,609 37,600,000 share used in calculating net income/(loss)
per Series B preferred share - - basic 6,608,696 16,000,000 -- *
share-based compensation charges included are as follow: Selling
and marketing 174 100 -- General and administrative 600 18,231 --
Year Ended Dec. 31, Dec. 31, 2007 2006 Revenues 43,611 18,896
Business tax and other sales tax (1,983) (961) Net revenues 41,628
17,935 Cost of revenues 21,365 10,040 Gross profit (loss) 20,263
7,895 Operating expenses: Selling and marketing * 4,813 2,751
General and administrative * 21,982 1,293 Total operating expenses
26,795 4,044 Income/(loss) from operations (6,532) 3,851 Interest
income 1,745 17 Income/(loss) before income taxes and minority
interest (4,787) 3,868 Income tax expense (195) (197) - Current 32
- Deferred (227) (197) Net income/(loss) before minority interest
(4,592) 4,065 Minority interest 2 1 Loss from equity accounted
investment (520) -- Net income (loss) (5,110) 4,066 Deemed dividend
on series A convertible redeemable preferred shares - Accretion of
redemption premium (1,201) (1,440) Deemed dividend on series B
convertible redeemable preferred shares - Accretion of redemption
premium (2,152) -- Net income/(loss) attributable to holders of
ordinary shares (8,463) 2,626 Net Income allocated for computing
EPS Ordinary shares - Basic (8,463) 1,639 Net Income allocated for
computing EPS preferred A shares - - Basic 1,201 2,427 Net Income
allocated for computing EPS preferred B shares - - Basic 2,152 --
Net income used in calculating Income per ordinary share - Diluted
(8,463) 1,639 Net income/(loss) per ordinary share - basic ($0.12)
$0.03 - diluted ($0.12) $0.03 Net income/(loss) per ADS - basic
($0.23) $0.06 - diluted ($0.23) $0.06 Net income/(loss) per Series
A preferred share $0.04 $0.06 Net income/(loss) per Series B
preferred share $0.32 -- Weighted average ordinary shares
outstanding used in computing net income per ordinary share - -
basic 73,469,589 62,400,000 Weighted average ordinary shares
outstanding used in computing net income per ordinary share -
diluted 73,469,589 62,400,000 share used in calculating net income/
(loss) per Series A preferred share - basic 31,461,918 37,600,000
share used in calculating net income/ (loss) per Series B preferred
share - basic 6,706,849 -- * share-based compensation charges
included are as follow: Selling and marketing 274 -- General and
administrative 18,831 -- AirMedia Group Inc. RECONCILIATION OF GAAP
INCOME/(LOSS) AND EPS TO NON-GAAP ADJUSTED INCOME/(LOSS) AND EPS
(In U.S. dollars in thousands, except share related data) Three
Months Ended Dec. 31, Sep. 30, Dec. 31, 2007 2007 2006 GAAP net
income attributable to shareholders 6,128 (15,253) 1,643
Amortization of acquired intangible assets 66 64 54 Share-based
compensation 774 18,331 -- Adjusted income 6,968 3,142 1,697.00
Basic adjusted income/(loss) per share $0.07 $0.05 $0.03 Diluted
adjusted income/(loss) per share $0.06 $0.05 $0.03 Basic adjusted
income/(loss) per ADS $0.14 $0.10 $0.06 Diluted adjusted
income/(loss) per ADS $0.12 $0.10 $0.06 Shares used in computing
adjusted basic income/(loss) per share 106,154,347 62,617,391
62,400,000 Shares used in computing adjusted diluted income/(loss)
per share 108,713,868 62,617,391 62,400,000 Year Ended Dec. 31,
Dec. 31, 2007 2006 GAAP net income attributable to shareholders
(5,110) 4,066 Amortization of acquired intangible assets 254 54
Share-based compensation 19,105 -- Adjusted income 14,249 4,120
Basic adjusted income/(loss) per share $0.19 $0.07 Diluted adjusted
income/(loss) per share $0.19 $0.07 Basic adjusted income/(loss)
per ADS $0.38 $0.14 Diluted adjusted income/(loss) per ADS $0.38
$0.14 Shares used in computing adjusted basic income/(loss) per
share 73,469,589 62,400,000 Shares used in computing adjusted
diluted income/(loss) per share 73,469,589 62,400,000 Note: The
Non-GAAP adjusted income per share and per ADS are computed using
Non-GAAP adjusted income and number of shares and ADS used in GAAP
basic and diluted EPS calculation, where the number of shares and
ADS is adjusted for dilution due to share-based compensation plan.
For more information, please contact: Investor Contact: Raymond
Huang Investor Relations Director Tel: +86-10-8460-8678 Email: FD
Beijing Julian Wilson Tel: +86-10-8591-1951 Email: DATASOURCE:
AirMedia Group Inc. CONTACT: Raymond Huang, Investor Relations
Director, +86-10-8460-8678, or ; or Julian Wilson of FD Beijing,
+86-10-8591-1951, or , both for AirMedia Group Inc. Web site:
http://www.airmedia.net.cn/
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