BEIJING, May 7 /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 first quarter of 2008 ended
March 31, 2008. Financial Highlights -- Total revenues increased
162.4% year-over-year and 32.6% sequentially to US$21.6 million,
exceeding company high-end guidance by US$0.6 million; -- Revenues
from digital frames in airports for the first quarter of 2008 grew
431.0% sequentially to US$6.7 million. Revenues from digital frames
in airports was nil in the same period one year ago; -- Net income
increased 288.7% year-over-year and 18.8% sequentially to US$7.3
million. Basic and diluted income per ADS was US$0.11 and US$0.10,
respectively; -- Adjusted net income (non-GAAP), which excluded
share-based compensation expenses and amortization of acquired
intangible assets, increased 337.6% year-over-year and 21.5%
sequentially to US$8.5 million. Adjusted basic and diluted net
income per ADS (non-GAAP) was US$0.13 and US$0.12, respectively.
"AirMedia achieved record results despite the fact that the first
quarter normally is the weakest quarter seasonally as advertisers
spend less during the Chinese New Year holiday and early in the
year overall," remarked Herman Man Guo, Chairman and Chief
Executive Officer of AirMedia. "We are particularly excited that
the revenues from digital frames accounted for 31.1% of our total
revenues in the first quarter, only four months after the
commencement of this operation in only one airport, which showed
the high acceptance of advertisers to this innovative media format.
We expect that it will be a solid foundation for our continued
rapid growth in 2008 and the coming years with our digital frames
added to more airports in our network in the second quarter of this
year." Financial Results Revenues Total revenues by product line
for the first quarter of 2008, the fourth quarter of 2007 and the
first quarter of 2007 were as follows (numbers in US$ 000's except
for percentage): Quarter Quarter Ended % of Ended % of March 31,
Total December Total 2008 Revenues 31, 2007 Revenues Digital TV
screens in airports 9,981 46.2% 9,408 57.8% Digital TV screens on
airplanes 3,881 18.0% 4,141 25.4% Digital frames in airports 6,706
31.1% 1,263 7.8% Other displays 1,028 4.7% 1,475 9.0% Total
revenues 21,596 100.0% 16,287 100.0% Net revenues 20,419 15,606
Quarter Ended % of Y/Y Q/Q March 31, Total Growth Growth 2007
Revenues rate rate Digital TV screens in airports 5,625 68.3% 77.4%
6.1% Digital TV screens on airplanes 1,836 22.3% 111.4% -6.3%
Digital frames in airports -- -- N/A 431.0% Other displays 769 9.4%
33.7% -30.3% Total revenues 8,230 100.0% 162.4% 32.6% Net revenues
7,835 160.6% 30.8% Total revenues for the first quarter of 2008
reached US$21.6 million, representing a year-over-year increase of
162.4% from US$8.2 million in the same period one year ago and a
sequential increase of 32.6% from US$16.3 million in the previous
quarter. The year-over-year increase was due to the increase of
revenues from all of the product lines. The sequential increase was
due to the increase of revenues from digital frames and digital TV
screens in airports. Revenues from digital TV screens in airports
for the first quarter of 2008 grew 77.4% year-over-year and 6.1%
sequentially to US$10.0 million. The year- over-year and sequential
increases were due to the increase of the average advertising
revenue per time slot sold (or the "ASP"). Please refer to "Summary
of Selected Operating Data" for detailed definitions. AirMedia
increased its listing prices of digital TV screens in all airports
twice by over 30% respectively in the beginning of April 2007 and
October 2007 and 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,
respectively. In addition to the increase of its listing prices, in
the first quarter of 2008, AirMedia also offered lower discounts
from its listing prices to its clients. As a result, the ASP for
the first quarter of 2008 increased 126.3% year-over-year and 77.4%
sequentially to US$1,815, which showed AirMedia's continued sales
efforts and better acceptance of AirMedia's digital media by
advertisers. AirMedia proactively managed the value of its time
slot and sales volume by increasing its ASP so that it would have
sufficient capacity to generate greater revenues going forward. The
number of time slots sold decreased 21.6% year-over-year and 40.2%
sequentially to 5,501 time slots due to the increase of the ASP and
the typical seasonal slowdown in the first quarter. The number of
time slots available for sale increased 39.0% year-over-year and
9.5% sequentially to 24,700 time slots in the first quarter of
2008. The year-over-year increase of the number of time slots
available for sales was due to the increases of airports in
operation from 30 airports at the end of the quarter ended March
31, 2007 to 39 airports at the end of the quarter ended March 31,
2008. The utilization rate for the first quarter of 2008 decreased
17.2 percentage points year-over-year and 18.5 percentage points
sequentially to 22.3% as a result of the increase of the time slots
available for sale and the decrease of time slots sold. Revenues
from digital TV screens on airplanes for the first quarter of 2008
grew 111.4% year-over-year and decreased 6.3% sequentially to
US$3.9 million. The year-over-year increase was primarily due to
the increase of the ASP. The ASP for the first quarter of 2008
increased 63.3% year-over-year and 6.1% sequentially to US$15,873.
The year-over-year and sequential increases of ASP were due to the
increase of the listing prices. The number of time slots sold
increased 29.6% year-over-year and decreased 11.6% sequentially to
245 time slots. The year-over-year increase was due to continued
sales efforts and better acceptance of AirMedia's digital media by
advertisers. The sequential decrease was due to the impact of a
typical seasonal slowdown in the first quarter. The number of time
slots available for sale increased 5.6% year-over- year and 1.3%
sequentially to 456 time slots in the first quarter of 2008 because
AirMedia added three minutes of advertising time on China Southern
Airlines in September of 2007 and added three minutes of
advertising time on Air China in March 2008. The utilization rate
for the first quarter of 2008 increased 9.9 percentage points
year-over-year and decreased 7.9 percentage points sequentially to
53.7%. The sequential decrease of the utilization rate was due to
the increase of the time slots available for sale and the decrease
of time slots sold. Revenues from digital frames in airports for
the first quarter of 2008 grew 431.0% sequentially to US$6.7
million. AirMedia has been operating digital frames in only one
airport, Beijing Capital International Airport, since we started
generating revenues from digital frames in December 2007. In
Beijing Capital International Airport, AirMedia started operating
46-inch digital frames on December 1, 2007 and 70-inch digital
frames on February 29, 2008. The ASP of digital frames for the
first quarter of 2008 increased 60.2% sequentially to US$15,769 due
to the increase of listing prices of 46-inch digital frames by 30%
in January 2008 and the fact that there was no 70-inch digital
frames in operation in the fourth quarter of 2007, whose listing
price is twice of the listing price of 46-inch digital frames. The
number of time slots sold increased 232.0% sequentially to 425 time
slots due to continued sales efforts and better acceptance of
AirMedia's digital frames by advertisers. The number of time slots
available for sale increased 245.5% sequentially to 1,223 time
slots due to longer operational periods of 46-inch digital frames
and the commencement of operation of 70-inch digital frames in
Beijing Capital International Airport. The utilization rate of
digital frames for the first quarter was 34.8% in the first quarter
of 2008, as compared to 36.2% in the fourth quarter of 2007. Other
than Beijing Capital International Airport, AirMedia started
operating digital frames in additional five airports in April 2008
and seven airports in early May 2008. AirMedia expects that
revenues from digital frames will constitute a significant portion
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 first quarter of 2008 was US$1.2 million,
representing a year-over-year increase of 198.0% from US$395,000 in
the same period one year ago and a sequential increase of 72.8%
from US$681,000 in the previous quarter due to the related increase
in total revenues. Net revenues for the first quarter of 2008
reached US$20.4 million, representing a year-over-year increase of
160.6% from US$7.8 million in the same period one year ago and a
sequential increase of 30.8% from US$15.6 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 first quarter of 2008 was US$9.7 million, representing a
year-over-year increase of 117.7% from US$4.5 million in the same
period one year ago and a sequential increase of 36.7% from US$7.1
million in the previous quarter. The year-over-year increase of
cost of revenues was primarily due to the increase of concession
fees as we have expanded our business. The sequential increase of
cost of revenues was due to the increase of concession fees in
first quarter of 2008 and a US$666,000 one- time disposal of TV
stands which held AirMedia's digital TV screens in airports, due to
our upgrade of light boxes to digital frames. Cost of revenues as a
percentage of net revenues in the first quarter of 2008 was 47.7%,
a decrease from 57.1% in the same period one year ago and a
sequential increase from 45.6% in the previous quarter. AirMedia
incurs concession fees to airports for placing and operating
digital TV screens, digital frames and other displays, and to
airlines for placing programs on their digital TV screens. Most of
the concession fees are fixed with an annual 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 are generally between three and
five years. Concession fees for the first quarter of 2008 were
US$4.7 million, representing a year-over-year increase of 75.2%
from US$2.7 million in the same period one year ago and a
sequential increase of 34.9% from US$3.5 million in the previous
quarter due to additional concession contracts entered into with
seven airports and three airlines. Concession fees as a percentage
of net revenues in the first quarter of 2008 decreased to 23.1%
from 34.3% in the same period one year ago and increased from 22.4%
in the previous quarter. The fluctuations of concession fees as a
percentage of net revenues were because concession fees were fixed
once concession rights contracts were entered into while revenues
generated from newly signed concession rights contracts need time
to ramp up. The year-over- year increase was because concession
fees increased slower than the increase of net revenues. The
sequential increase was because AirMedia obtained additional
concession rights to further grow its revenues. Gross Profit Gross
profit for the first quarter of 2008 was US$10.7 million,
representing a year-over-year increase of 217.7% from US$3.4
million in the same period one year ago and a sequential increase
of 25.9% from US$8.5 million in the previous quarter. Gross profit
as a percentage of net revenues for the first quarter of 2008 was
52.3%, up from 42.9% in the same period one year ago and down from
54.4% in the previous quarter. The year-over-year increase of gross
margin was because cost of revenues did not increase in line with
the increase of net revenues as we gained economies of scale in our
product lines. The sequential decrease of gross margin was because
AirMedia obtained additional concession rights to further grow its
revenues. Operating Expenses Operating expenses for the first
quarter of 2008, the fourth quarter of 2007 and the first quarter
of 2007 were as follows (numbers in US$ 000's except for
percentage): Quarter Quarter Ended Ended March % of Net December %
of Net 31, 2008 Revenues 31, 2007 Revenues Selling and marketing
expenses 2,444 12.0% 1,823 11.7% General and administrative
expenses 2,911 14.3% 2,000 12.8% Total operating expenses 5,355
26.2% 3,823 24.5% Total operating expenses excluding share-based
compensation expenses and amortization of acquired intangible
assets (a non-GAAP measure) 4,168 20.4% 2,983 19.1% Quarter Ended
Y/Y Q/Q March % of Net Growth Growth 31, 2007 Revenues rate rate
Selling and marketing expenses 903 11.5% 170.7% 34.1% General and
administrative expenses 483 6.2% 502.7% 45.6% Total operating
expenses 1,386 17.7% 286.4% 40.1% Total operating expenses
excluding share-based compensation expenses and amortization of
acquired intangible assets (a non-GAAP measure) 1,324 16.9% 214.8%
39.7% Total operating expenses for the first quarter of 2008 were
US$5.4 million, representing a year-over-year increase of 286.4%
from US$1.4 million in the same period one year ago and a
sequential increase of 40.1% from US$3.8 million in the previous
quarter. Total operating expenses for the first quarter of 2008
included share- based compensation expenses of US$1.1 million 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 (non-GAAP) for the first quarter of 2008 were US$4.2
million, representing a year-over-year increase of 214.8% from
US$1.3 million in the same period one year ago and a sequential
increase of 39.7% from US$3.0 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 (non-GAAP) in the first quarter of 2008
increased to 20.4% from 16.9% in the same period one year ago and
19.1% in the previous quarter. Selling and marketing expenses for
the first quarter of 2008 were US$2.4 million including $259,000 in
share-based compensation expenses, representing a year-over-year
increase of 170.7% from US$903,000 in the same period one year ago
and a sequential increase of 34.1% from US$1.8 million in the
previous quarter. The year-over-year increase was primarily due to
the expansion of the direct sales force, additional marketing
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 increase was primarily
due to higher performance incentives, salary adjustment, annual
bonus, and additional marketing expenses primarily due to some
annual marketing events, which cost US$380,000 in the first quarter
of 2008. General and administrative expenses for the first quarter
of 2008 were US$3.0 million including $860,000 in share-based
compensation expenses, representing a year-over-year increase of
502.7% from US$483,000 in the same period one year ago and a
sequential increase of 45.6% from US$2.0 million in the previous
quarter. The year-over-year increase was primarily due to share-
based compensation expenses in connection with the employee stock
option grants made on July 2, 2007, July 20, 2007 and November 29,
2007, higher professional expenses and headcount increase. The
sequential increase was primarily due to higher professional
service fees, share-based compensation expenses in connection with
the employee stock option grants made on November 29, 2007, and
headcount increase. Income from Operations Income from operations
for the first quarter of 2008 was US$5.3 million, representing a
year-over-year increase of 169.5% from US$2.0 million in the same
period one year ago and a sequential increase of 14.3% from US$4.7
million in the previous quarter. Income from operations excluding
share-based compensation expenses and amortization of acquired
intangible assets (non-GAAP) for the first quarter of 2008 was
US$6.5 million, representing a year-over-year increase of 219.5%
from 2.0 million in the same period one year ago and a sequential
increase of 18.4% from US$5.5 million in the previous quarter.
Operating margin excluding the effect of share-based compensation
expenses and amortization of acquired intangible assets (non-GAAP)
for the first quarter of 2008 was 31.9%, as compared to 26.0% in
the same period one year ago and 35.3% in the previous quarter.
Income Tax Expense/Benefit Income tax benefit for the first quarter
of 2008 was US$77,000, as compared to income tax expense of
US$56,000 in the same period one year ago and income tax benefit of
US$181,000 in the previous quarter. The effective income tax rate
for the first quarter of 2008 was (1.1%), as compared to 2.8% in
the same period one year ago and (3.0%) in the previous quarter
primarily due to the most profitable entities of AirMedia currently
enjoying preferential tax holidays. Net Income Net income for the
first quarter of 2008 was US$7.3 million, representing a
year-over-year increase of 288.7% from US$1.9 million in the same
period one year ago and a sequential increase of 18.8% from US$6.1
million in the previous quarter. The basic income per ADS for the
first quarter of 2008 was US$0.11, as compared to basic income per
ADS of US$0.03 in the same period one year ago and basic income per
ADS of US$0.09 in the previous quarter. The diluted income per ADS
for the first quarter of 2008 was US$0.10, as compared to diluted
income per ADS of US$0.03 in the same period one year ago and
diluted income per ADS of US$0.09 in the previous quarter. Adjusted
net income (non-GAAP) for the first quarter of 2008, which excluded
share-based compensation expenses and amortization of acquired
intangible assets, was US$8.5 million, representing a
year-over-year increase of 337.6% from US$1.9 million in the same
period one year ago and a sequential increase of 21.5% from US$7.0
million in the previous quarter. Basic adjusted net income per ADS
(non-GAAP) for the first quarter of 2008 was US$0.13, as compared
to basic adjusted net income per ADS of US$0.06 in the same period
one year ago and basic adjusted income per ADS of US$0.14 in the
previous quarter. Diluted adjusted income per ADS (non-GAAP) for
the first quarter of 2008 was US$0.12, as compared to diluted
adjusted net income per ADS of US$0.06 in the same period one year
ago and diluted adjusted net income per ADS of US$0.12 in the
previous quarter. Please refer to the attached table for a
reconciliation of net income and basic and diluted net income per
ADS under US GAAP to adjusted net income and basic and diluted
adjusted income per ADS. "We are very pleased with AirMedia's
better than expected financial results this quarter. Our top line
growth of 162.4% year-on-year and 32.6% sequentially outperformed
our mean guidance in total revenues by 8.0%," remarked Conor
Chiahung Yang, Chief Financial Officer of AirMedia. "Supported by
our strong capital base, we have a significant market share in the
digital media network within the air travel advertising sector in
China, which will continue to enable us to capture additional
market share from the fragmented operators of traditional
advertisement formats in the sector." Other Recent Developments By
April 12, 2008, AirMedia had installed 1,213 digital frames in 16
airports across China. AirMedia upgraded from light boxes or newly
installed 889 digital frames, ranging from 46 to 50 inches, in 11
airports and installed 324 large-size digital frames, ranging from
63 to 70 inches, in 9 airports. AirMedia has been selling
advertisements of digital frames in Beijing Capital International
Airport since December 2007. AirMedia started selling
advertisements of digital frames in additional five airports
located in Chongqing, Nanjing, Haikou, Zhengzhou and Ningbo, in
April 2008 and seven airports located in Kunming, Hangzhou, Wuhan,
Changsha, Jinan, Tianjin and Hefei in early May 2008. AirMedia has
adjusted its advertising cycle of 46-to- 50-inch digital frames in
airports excluding Beijing Capital International Airport from
20-minute cycles to 10-minute cycles to give more exposure for
clients' advertisements at the beginning stage. 46-inch digital
frames in Beijing Capital International Airport still display
advertisements in 20- minute cycles. 63-to-70-inch digital frames
display advertisements in 10- minute cycles in all airports. In
March 2008, AirMedia entered into a definitive agreement with China
Eastern Media Corporation, Ltd., a subsidiary of China Eastern
Group and China Eastern Airlines Corporation Limited operating the
media resources of China Eastern Group, to establish a joint
venture, Beijing Eastern Media Corporation, Ltd. (the "BEMC"). BEMC
was incorporated on March 18, 2008 with China Eastern Media
Corporation holding 51% equity interest and AirMedia holding the
remaining 49% equity interest. BEMC will obtain concession rights
of certain media resources from its shareholders, including the
digital TV screens on airplanes of China Eastern Airlines, and will
pay concession fees to its shareholders as consideration. The
operation period of BEMC currently is fixed at 50 years with a
total paid-in capital of US$2.1 million, which was contributed by
both parties proportionately. AirMedia will pay concession fees to
BEMC to obtain concession rights to operate these media resources.
There will not be revenue sharing or profit sharing between
AirMedia and BEMC. In March 2008, AirMedia obtained the contractual
concession rights to operate 140 digital TV screens and 130 46-inch
digital frames at the newly constructed Terminal 2 of Wuhan Tianhe
Airport, the 12th largest airport in mainland China, from April
2008 to April 2011. AirMedia started operation in Wuhan Airport in
May 2008. In March 2008, AirMedia and Shanghai Media Group (SMG),
the second largest comprehensive media group in China, established
a strategic partnership to provide TV programs to air travelers.
AirMedia obtained the exclusive right to show its selected news,
theme programs and documentary clips provided by SMG in AirMedia's
network airports and on airplanes from March 2008 to February 2010.
Business Outlook As a result of current business visibility,
AirMedia currently expects the following financial results for the
second quarter of 2008: -- Total revenues will be in an amount
ranging from US$26.0 million to US$28.0 million, representing a
year-over-year increase of 207.0% to 230.6% from the same period of
2007; -- Concession fees in the second quarter of 2008 will be at
least US$11.4 million, mainly due to the full-quarter impact of
concession fees for Terminal 3 of Beijing Capital International
Airport and new concession rights contracts to install large size
digital frames in other airports. The above forecast reflects
AirMedia's current and preliminary view and is therefore 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 March 31,
December March 31, 2008 31, 2007 2007 Digital TV screens in
airports Number of airports in operation 39 39 30 Number of time
slots available for sale (1) 24,700 22,557 17,767 Number of time
slots sold (3) 5,501 9,198 7,013 Utilization rate (4) 22.3% 40.8%
39.5% Average advertising revenue per time slot sold (5) US$1,815
US$1,023 US$802 Digital TV screens on airplanes Number of airlines
in operation 9 9 9 Number of time slots available for sale (1) 456
450 432 Number of time slots sold (3) 245 277 189 Utilization rate
(4) 53.7% 61.6% 43.8% Average advertising revenue per time slot
sold (5) US$15,873 US$14,957 US$9,722 Digital frames in airports
Number of airports in operation 1 1 -- Number of time slots
available for sale (2) 1,223 354 -- Number of time slots sold (3)
425 128 -- Utilization rate (4) 34.8% 36.2% -- Average advertising
revenue per time slot sold (5) 15,769 9,841 -- YOY Growth Rate QOQ
Growth Rate Digital TV screens in airports Number of airports in
operation 30.0% -- Number of time slots available for sale (1)
39.0% 9.5% Number of time slots sold (3) -21.6% -40.2% Utilization
rate (4) -17.2% -18.5% Average advertising revenue per time slot
sold (5) 126.3% 77.4% Digital TV screens on airplanes Number of
airlines in operation -- -- Number of time slots available for sale
(1) 5.6% 1.3% Number of time slots sold (3) 29.6% -11.6%
Utilization rate (4) 9.9% -7.9% Average advertising revenue per
time slot sold (5) 63.3% 6.1% Digital frames in airports Number of
airports in operation -- -- Number of time slots available for sale
(2) -- 245.5% Number of time slots sold (3) -- 232.0% Utilization
rate (4) -- -1.4% Average advertising revenue per time slot sold
(5) -- 60.2% 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) We define a 15-second equivalent advertising time
unit for digital frames in airports, which is shown during each
advertising cycle on a weekly basis in a given airport. Our airport
advertising programs are shown repeatedly on a daily basis during a
given week in 20-minute cycles for 46-inch digital frames in
Beijing Capital International Airport and in 10-minute cycles for
70-inch digital frames in Beijing Capital International Airport,
which allows us to sell a maximum of 80 time slots for 46-inch or a
maximum of 40 time slots for 70-inch digital frames per week. The
number of time slots available for our digital frames 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. (3) Number of time slots sold refers to the
number of 30-second equivalent advertising time units for digital
TV screens in airports and digital TV screens on airplanes or
15-second equivalent advertising time units for digital frames in
airports sold during the period presented. (4) Utilization rate
refers to total time slots sold as a percentage of total time slots
available for sale during the relevant period. (5) Average
advertising revenue per time slot sold for digital TV screens in
airports, digital TV screens on airplanes and digital frames in
airports is calculated by dividing our revenues derived from
digital TV screens in airports, digital TV screens on airplanes and
digital frames in airports by its own number of time slots sold,
respectively. Earnings Conference Call Details AirMedia will hold a
conference call to discuss the first quarter 2008 earnings at 8:00
PM U.S. Eastern Time on May 7, 2008 (5:00 PM U.S. Pacific Time on
May 7, 2008; 8:00 AM Beijing/Hong Kong time on May 8, 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 +1-800-295-4740. 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 +1-617-614-3925. The pass code
for all participants is AMCN. A replay of the call will be
available for 1 week between 9:00 pm Eastern Time on May 7, 2008
and 9:00 pm Eastern Time on May 14, 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 55261823. 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 AirMedia's management uses non-GAAP
financial measures to gain an understanding of AirMedia's
comparative operating performance and future prospects. AirMedia's
non-GAAP financial measures exclude certain special items,
including (1) amortization of non-cash stock-based compensation
expense, and (2) amortization of acquired intangible assets.
Non-GAAP financial measures are used by AirMedia's management in
their financial and operating decision-making because management
believes they reflect AirMedia's ongoing business in a manner that
allows meaningful period-to-period comparisons. AirMedia's
management believes that these non-GAAP financial measures provide
useful information to investors and others in understanding and
evaluating AirMedia's current operating performance and future
prospects in the same manner as management does, if they so choose.
Specifically, AirMedia believes 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 AirMedia's income from 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 AirMedia. Management
compensates for these limitations by also considering AirMedia'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. For more information
on these non-GAAP financial measures, please see the table
captioned "Reconciliation of GAAP Income/(Loss) and EPS and
non-GAAP Adjusted Income/(Loss) and EPS" set forth at the end of
this release. 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 53 airports,
including 29 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 digital frames of 46 to 50 inches 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) Mar. 31, 2008 Dec. 31, 2007 Assets Current assets: Cash
210,002 210,915 Accounts receivable, net 21,154 13,478 Prepaid
concession fees 15,115 13,130 Amount due from related parties 124
-- Other current assets 1,747 2,393 Deferred tax assets - current
133 95 Total current assets 248,275 240,011 Acquired intangible
assets, net 5,096 4,862 Property and equipment, net 21,149 15,985
Long-term deposits 4,902 4,706 Long-term investment 1,731 788
Deferred tax assets - non-current 525 507 TOTAL ASSETS 281,678
266,859 Liabilities Current liabilities: Accounts payable 6,675
4,666 Accrued expenses and other current liabilities 1,895 1,309
Deferred revenue 2,126 1,712 Income tax payable 11 32 Amounts due
to related parties -- 11 Total current liabilities 10,707 7,730
Non-current liabilities: Deferred tax liability - non-current 1,682
1,527 Total liabilities 12,389 9,257 Minority interest (5) (3)
Shareholders' equity Ordinary shares 133 133 Additional paid-in
capital 264,249 263,130 Statutory reserve 1,782 1,782 Accumulated
deficiency (3,040) (10,317) Accumulated other comprehensive income
6,170 2,877 Total shareholders' equity 269,294 257,605 TOTAL
LIABILITIES, MINORITY INTEREST, AND SHAREHOLDERS' EQUITY 281,678
266,859 AirMedia Group Inc. UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In U.S. dollars in thousands, except
share related data) Three Months Ended Mar. 31, Dec. 31, Mar. 31,
2008 2007 2007 Revenues 21,596 16,287 8,230 Business tax and other
sales tax (1,177) (681) (395) Net revenues 20,419 15,606 7,835 Cost
of revenues 9,730 7,117 4,470 Gross profit 10,689 8,489 3,365
Operating expenses: Selling and marketing * 2,444 1,823 903 General
and administrative * 2,911 2,000 483 Total operating expenses 5,355
3,823 1,386 Income from operations 5,334 4,666 1,979 Interest
income 1,822 1,369 23 Other income, net 135 90 -- Income before
income taxes and minority interest 7,291 6,125 2,002 Income tax
expense/ (benefit) (77) (181) 56 Net income before minority
interest 7,368 6,306 1,946 Minority interest 2 (4) 1 Loss of equity
accounting investment (93) (174) (75) Net income 7,277 6,128 1,872
Deemed dividend on series A convertible redeemable preferred
shares- Accretion of redemption premium -- (127) (355) Deemed
dividend on series B convertible redeemable preferred shares-
Accretion of redemption premium -- (523) -- Net income attributable
to holders of ordinary shares 7,277 5,478 1,517 Net Income
allocated for computing EPS Ordinary shares - Basic 7,277 4,689 947
Net Income allocated for computing EPS preferred A shares - Basic
-- 655 925 Net Income allocated for computing EPS preferred B
shares - Basic -- 783 -- Net income used in calculating Income per
ordinary share-diluted -- 4,689 947 Net income per ordinary share -
basic $0.05 $0.04 $0.02 - diluted $0.05 $0.04 $0.02 Net income per
ADS - basic $0.11 $0.09 $0.03 - diluted $0.10 $0.09 $0.03 Net
income per Series A preferred share -- $0.05 $0.02 Net income per
Series B preferred share -- $0.12 -- Weighted average ordinary
shares outstanding used in computing net income per ordinary share
- basic 133,425,925 106,154,347 62,400,000 Weighted average
ordinary shares outstanding used in computing net income per
ordinary share - diluted 139,317,264 108,713,868 62,400,000 share
used in calculating net income per Series A preferred share-basic
-- 13,465,217 37,600,000 share used in calculating net income per
Series B preferred share-basic -- 6,608,696 -- * share-based
compensation charges included are as follow: Selling and marketing
259 174 -- General and administrative 860 600 -- AirMedia Group
Inc. RECONCILIATION OF GAAP NET INCOME AND EPS TO NON-GAAP ADJUSTED
NET INCOME AND EPS (In U.S. dollars in thousands, except share
related data) Three Months Ended Mar. 31, Dec. 31, Mar. 31, 2008
2007 2007 GAAP net income attributable to shareholders 7,277 6,128
1,872 Amortization of acquired intangible assets 68 66 62
Share-based compensation 1,119 774 -- Adjusted net income 8,464
6,968 1,934 Basic adjusted net income per share $0.06 $0.07 $0.03
Diluted adjusted net income per share $0.06 $0.06 $0.03 Basic
adjusted net income per ADS $0.13 $0.14 $0.06 Diluted adjusted net
income per ADS $0.12 $0.12 $0.06 Shares used in computing adjusted
basic net income per share 133,425,925 106,154,347 62,400,000
Shares used in computing adjusted diluted net income per share
139,317,264 108,713,868 62,400,000 Note: The Non-GAAP adjusted net
income per share and per ADS are computed using Non-GAAP net
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 at
+86-10-8460-8678 or ; Julian Wilson of FD Beijing at
+86-10-8591-1951 or , both for AirMedia Group Inc. Web site:
http://www.airmedia.net.cn/
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