BEIJING, Feb. 26 /PRNewswire-Asia-FirstCall/ -- AirMedia Group Inc.
(NASDAQ:AMCN), operator of the largest digital media network
dedicated to air travel advertising in China, today announced its
unaudited financial results for the fourth quarter and fiscal year
ended December 31, 2008. Fourth Quarter 2008 Financial Highlights
-- Total revenues increased by 148.4% year-over-year to US$40.5
million; -- Revenues from digital frames in airports grew by
1,264.3% year-over-year to US$17.2 million; -- Net income increased
by 32.6% year-over-year to US$8.1 million. Both basic and diluted
income per ADS were US$0.12; -- Adjusted net income (non-GAAP),
which is net income excluding share-based compensation expenses and
amortization of acquired intangible assets, increased by 50.0%
year-over-year to US$10.5 million. Both adjusted basic and diluted
net income per ADS (non-GAAP) were S$0.16. Fiscal Year 2008
Financial Highlights -- Total revenues increased by 187.9%
year-over-year to US$125.5 million; -- Revenues from digital frames
in airports for fiscal year 2008 grew by 3,463.8% year-over-year to
US$45.0 million; -- Net income was US$30.2 million, compared to net
loss of $5.1 million in 2007. Basic and diluted income per ADS was
US$0.45 and US$0.44, respectively; -- Adjusted net income
(non-GAAP), which is net income excluding share-based compensation
expenses and amortization of acquired intangible assets, increased
by 155.0% year-over-year to US$36.3 million. Adjusted basic and
diluted income per ADS (non-GAAP) was US$0.54 and US$0.53,
respectively. "Despite the challenging economic environment, we are
pleased to report strong fourth quarter 2008 financial results and
AirMedia's fourteenth consecutive quarter of record total revenues
since the commencement of our operations in August 2005. In 2008,
we strengthened our market leadership and achieved tremendous
growth in revenues and income as we added new product lines,
enhanced our network coverage, strengthened our sales team, and
improved our average selling prices," commented Herman Guo,
chairman and chief executive officer of AirMedia. "We are
especially excited by the performance of our digital frames
business which grew over 70% sequentially to become AirMedia's
biggest revenue-generating product line in the fourth quarter.
Combining flexible scheduling, airport-wide coverage, low
production costs and a wide variety of presentation options, this
new nationwide media platform already enjoys leading market share
in its first year of operations and complements our robust
nationwide network of digital TV screens in airports and on
airplanes. "In 2009, we expect our scale will allow us to
significantly increase market share in traditional media in the air
travel advertising sector," Mr. Guo continued, "With the new
concession rights contracts to be entered in the following weeks,
we will become an operator of both digital and traditional media.
This marks AirMedia's transition to a one-stop and leading provider
for air travel advertising. We believe we are now better positioned
to broaden and integrate our customer base, influence pricing and
fees, further strengthen our relationships with airports and
airlines and eventually offer higher value to shareholders." Conor
Yang, AirMedia's chief financial officer added, "In 2008, we
achieved many significant milestones as we continued to execute our
growth strategies. In 2009, we will continue to expand our network,
strengthen our relationships with airports and airlines and manage
expenses to best position AirMedia for long-term top and bottom
line growth. We expect that AirMedia's growth momentum and strong
financials will position us to take advantage of the various
opportunities arising from the global economic downturn and the
recent changes in China's out-of-home advertising sector. Our
expansion strategy may impose some short-term pressure on our
margins but is critical and beneficial for the company's
development in the long run." Financial Results Revenues Total
revenues by product line (numbers in US$ 000's except for
percentage): Quarter Quarter Ended % of Ended % of December Total
September Total 31, 2008 Revenues 30, 2008 Revenues Digital frames
in airports 17,231 42.7% 10,114 30.0% Digital TV screens in
airports 11,388 28.1% 13,079 38.8% Digital TV screens on airplanes
4,123 10.2% 6,586 19.5% Billboards on gate bridges in airports
4,142 10.2% 1,910 5.7% Other displays 3,578 8.8% 2,019 6.0% Total
revenues 40,462 100.0% 33,708 100.0% Net revenues 38,190 32,335
Quarter Ended % of Y/Y Q/Q December Total Growth Growth 31, 2007
Revenues rate rate Digital frames in airports 1,263 7.8% 1264.3%
70.4% Digital TV screens in airports 9,408 57.8% 21.0% -12.9%
Digital TV screens on airplanes 4,141 25.4% -0.4% -37.4% Billboards
on gate bridges in airports -- -- N/A 116.9% Other displays 1,475
9.0% 142.6% 77.2% Total revenues 16,287 100.0% 148.4% 20.0% Net
revenues 15,606 144.7% 18.1% Total revenues for the fourth quarter
of 2008 reached US$40.5 million, representing a year-over-year
increase of 148.4% from US$16.3 million and a quarter-over-quarter
increase of 20.0% from US$33.7 million. The year-over-year increase
was due to the increases of revenues from all of the product lines.
The quarter-over-quarter increase was due to the increases of
revenues from digital frames in airports, billboards on gate
bridges in airports and other displays, which was partially offset
by the decreases in revenues from digital TV screens in airports
and on airplanes. Revenues from digital frames in airports Revenues
from digital frames in airports for the fourth quarter of 2008
increased by 1,264.3% year-over-year and by 70.4%
quarter-over-quarter to US$17.2 million due to the increases in the
number of time slots sold and the average advertising revenue per
time slot sold (or the "ASP"). Please refer to "Summary of Selected
Operating Data" for detailed definitions. Digital frames were
operated in only one airport, Beijing Capital International
Airport, for one month in December 2007. The number of time slots
sold for the fourth quarter of 2008 increased by 3,507.0%
year-over-year and by 39.2% quarter-over-quarter to 4,617 time
slots due to continued sales efforts and growing acceptance of
AirMedia's digital frames. AirMedia's digital frames were operated
in 22 airports in the fourth quarter of 2008, up from one airport
at the end of the fourth quarter of 2007, and from 19 airports at
the end of the third quarter of 2008. The number of time slots
available for sale for the fourth quarter of 2008 increased by
5,487.3% year-over-year and by 15.8% quarter-over-quarter to 19,779
time slots. The year-over-year increase was primarily due to the
increase in the number of airports in AirMedia's digital frame
network. The quarter-over-quarter increase was primarily due to the
commencement of operations of digital frames in additional three
airports during the fourth quarter, the full-quarter operation of
the digital frames in three airports, which started operation in
the middle of the previous quarter, and the addition of different
forms of digital frames in two existing airports. The utilization
rate of digital frames for the fourth quarter of 2008 increased by
3.9 percentage points to 23.3% quarter-over-quarter primarily due
to the increase in time slots sold. The ASP of digital frames for
the fourth quarter of 2008 decreased by 62.1% year-over-year and
increased by 22.4% quarter-over-quarter to US$3,732. The
year-over-year decrease was because the listing prices of digital
frames in the newly operated airports in 2008 were significantly
lower than the listing price of digital frames in Beijing Capital
International Airport, which was the only airport where we had
operation of digital frames in the fourth quarter of 2007. The
quarter-over-quarter increase was because the time slots sold in
Beijing Capital International Airport, which has a
higher-than-average ASP, accounted for a higher percentage of total
time slots sold in the fourth quarter of 2008. Revenues from
digital TV screens in airports Revenues from digital TV screens in
airports for the fourth quarter of 2008 grew by 21.0%
year-over-year and decreased by 12.9% quarter-over-quarter to
US$11.4 million. The year-over-year increase was primarily due to
the increase in the ASP. The quarter-over-quarter decrease was
primarily due to the decrease in the number of time slots sold,
which was partially offset by the increase in the ASP. The ASP of
digital TV screens in airports for the fourth quarter of 2008
increased by 94.9% year-over-year and by 22.2% quarter-over-quarter
to US$1,994. The year-over-year increase was due to the increases
in the listing prices of digital TV screens in four selected
airports in the first quarter of 2008 and fewer discounts off the
listing prices offered to our customers from the first quarter of
2008 onwards. The quarter-over-quarter increase was because
AirMedia began reducing its discounts off the listing prices in
second-tier and third-tier airports and the ASP of digital TV
screens in Beijing Capital International Airport, which accounted
for a higher percentage of sales in the fourth quarter of 2008,
returned to the normal level after the negative Olympic impact in
the third quarter of 2008. The number of time slots sold for the
fourth quarter of 2008 decreased by 37.9% year-over-year and by
28.8% quarter-over-quarter to 5,711 time slots due to advertisers'
budget reduction resulting from the economic downtown. The number
of time slots available for sale for the fourth quarter of 2008
increased by 13.8% year-over-year and by 1.6% quarter-over-quarter
to 25,668 time slots in the fourth quarter of 2008. The
year-over-year increase in the number of time slots available for
sale was due to the increase in the number of airports in operation
which increased from 39 airports at the end of the fourth quarter
of 2007 to 41 airports at the end of the fourth quarter of 2008.
The quarter-over-quarter increase in the number of time slots
available for sale was due to the commencement of operation of
digital TV screens in Wenzhou Yongqiang Airport in the fourth
quarter of 2008. With an extensive network of airports already in
place, the increase in the number of time slots available for sale
going forward will be minimal, allowing management to focus on
maximizing the value of time slots sold. The utilization rate for
the fourth quarter of 2008 decreased by 18.5 percentage points
year-over-year and by 9.5 percentage points quarter-over-quarter to
22.2% due to the decrease in the number of time slots sold and the
increase in the number of time slots available for sale. Revenues
from digital TV screens on airplanes Revenues from digital TV
screens on airplanes for the fourth quarter of 2008 remained
approximately unchanged year-over-year and decreased by 37.4%
quarter-over-quarter to US$4.1 million. The quarter-over-quarter
decrease was due to the decreases in both the number of time slots
sold and the ASP of digital TV screens on airplanes. The number of
time slots sold for the fourth quarter of 2008 decreased by 29.2%
year-over-year and by 31.8% quarter-over-quarter to 196 time slots.
The quarter-over-quarter decrease was because the number of time
slots sold in the third quarter of 2008 was higher than normal. In
the third quarter of 2008, advertisers reallocated additional
budgets to airlines, especially to Air China, which was the
official carrier of the Olympic Games and had no sales limitation
for non-Olympic- Sponsor advertisers. The number of time slots
available for sale for the fourth quarter of 2008 increased by 8.0%
year-over-year by and 3.8% quarter-over-quarter to 486 time slots.
The year-over-year increase in time slots available for sale was
because AirMedia added an additional three-minute advertising time
on Air China in March 2008 and an additional three-minute
advertising time on Xiamen Airlines in October 2008. The
quarter-over-quarter increase in time slots available for sale was
because AirMedia added a three-minute advertising time on Xiamen
Airlines in the fourth quarter of 2008. The utilization rate for
the fourth quarter of 2008 decreased by 21.3 percentage points
year-over-year and by 21.1 percentage points quarter-over-quarter
to 40.3% primarily due to the decrease in the number of time slots
sold. The ASP of digital TV screens on airplanes for the fourth
quarter of 2008 increased by 40.8% year-over-year and decreased by
8.2% quarter-over-quarter to US$21,056. The year-over-year increase
in the ASP was due to the increases in the listing prices and fewer
discounts offered. The quarter-over-quarter decrease in the ASP was
because the time slots sold on the non-three-largest airlines
accounted for a higher percentage in the fourth quarter of 2008.
The listing prices in the non-three-largest airlines were
significantly lower than those in the three largest airlines and
AirMedia's discount policy in these airlines was more flexible
which resulted in generally lower ASPs than those of the three
largest airlines. Revenues from billboards on gate bridges in
airports Revenues from billboards on gate bridges in airports for
the fourth quarter of 2008 increased by 116.9% quarter-over-quarter
to US$4.1 million because its revenues for the third quarter of
2008 were not at the normal level since billboards on gate bridges
in Beijing Capital International Airport, which accounted for a
significant percentage of revenues from gate bridges, were limited
to be sold to Olympic Sponsors only during the Olympic Period.
Please refer to "Summary of Selected Operating Data" for more
operating data. Business tax and other sales tax for the fourth
quarter of 2008 was US$2.3 million, representing a year-over-year
increase of 233.6% from US$681,000 and a quarter-over-quarter
increase of 65.5% from US$1.4 million, in line with the increase in
total revenues. Net revenues for the fourth quarter of 2008 reached
US$38.2 million, representing a year-over-year increase of 144.7%
from US$15.6 million and a quarter-over-quarter increase of 18.1%
from US$32.3 million. The year-over-year and quarter-over-quarter
increases were due to the increase in total revenues. Cost of
Revenues Cost of revenues for the fourth quarter of 2008 was
US$23.3 million, representing a year-over-year increase of 227.1%
from US$7.1 million and a quarter-over-quarter increase of 13.6%
from US$20.5 million. The year-over-year increase was primarily due
to the increase in concession fees in connection with the expansion
of AirMedia's business. The quarter-over-quarter increase was
primarily due to the increase in concession fees and higher
depreciation cost. Cost of revenues as a percentage of net revenues
in the fourth quarter of 2008 was 61.0%, a year-over-year increase
from 45.6% in the same period one year ago and a
quarter-over-quarter decrease from 63.4% in the previous quarter.
AirMedia incurs concession fees to airports for placing and
operating digital TV screens, digital frames, billboards on gate
bridges 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 fourth quarter of 2008 were US$15.3
million, representing a year-over-year increase of 338.9% from
US$3.5 million due to additional concession rights contracts
entered into during the year and a quarter-over-quarter increase of
7.3% from US$14.3 million primarily due to new concession rights
contracts and the full-quarter impact of the consolidated
concession fees of acquired billboard advertising business on gate
bridges. Concession fees as a percentage of net revenues in the
fourth quarter of 2008 was 40.1%, compared to 22.4% in the same
period one year ago and 44.2% in the previous quarter. The
year-over-year increase was 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 quarter-over-quarter decrease was primarily because
net revenues grew faster than concession fees as we gained
economies of scale in our product lines. Gross Profit Gross profit
for the fourth quarter of 2008 was US$14.9 million, representing a
year-over-year increase of 75.6% from US$8.5 million and a
quarter-over-quarter increase of 26.0% from US$11.8 million. Gross
profit as a percentage of net revenues for the fourth quarter of
2008 was 39.0%, compared to 54.4% in the same period one year ago
and 36.6% in the previous quarter. The year-over-year decrease of
gross profit as a percentage of net revenues was because AirMedia
obtained additional concession rights to further grow its business
and revenues while it takes some time to ramp up revenues from
these new concession rights contracts and higher depreciation cost.
The quarter-over-quarter increase in gross profit as a percentage
of net revenues was because net revenues grew faster than cost of
revenues as we gained economies of scale in our product lines.
Operating Expenses Operating expenses (numbers in US$ 000's except
for percentage): Quarter Quarter Ended Ended December % of Net
September % of Net 31, 2008 Revenues 30, 2008 Revenues Selling and
marketing expenses 3,341 8.7% 2,276 7.0% General and administrative
expenses 5,195 13.7% 3,420 10.6% Total operating expenses 8,536
22.4% 5,696 17.6% Total operating expenses excluding share-based
compensation expenses and amortization of acquired intangible
assets (a non-GAAP measure) 6,212 16.3% 4,264 13.2% Quarter Ended
Y/Y Q/Q December % of Net Growth Growth 31, 2007 Revenues rate rate
Selling and marketing expenses 1,823 11.7% 83.3% 46.8% General and
administrative expenses 1,910 12.2% 172.0% 51.9% Total operating
expenses 3,733 23.9% 128.7% 49.9% Total operating expenses
excluding share-based compensation expenses and amortization of
acquired intangible assets (a non-GAAP measure) 2,893 18.5% 114.7%
45.7% Total operating expenses for the fourth quarter of 2008 were
US$8.5 million, representing a year-over-year increase of 128.7%
from US$3.7 million and a quarter-over-quarter increase of 49.9%
from US$5.7 million. Total operating expenses for the fourth
quarter of 2008 included share-based compensation expenses of
US$1.7 million, compared to share-based compensation expenses of
US$774,000 in the same period one year ago and US$1.0 million in
the previous quarter. Share-based compensation expenses for the
fourth quarter of 2008 included a one-time share-based compensation
expense of US$576,000 incurred due to the adjustment to the
exercise price of the stock options which were granted on November
29, 2007. Adjusted operating expenses (non-GAAP) for the fourth
quarter of 2008, which excluded share-based compensation expenses
and amortization of acquired intangible assets, were US$6.2
million, representing a year-over-year increase of 114.7% from
US$2.9 million and a quarter-over-quarter increase of 45.7% from
US$4.3 million. Adjusted operating expenses as a percentage of net
revenues (non-GAAP) in the fourth quarter of 2008 was 16.3%,
compared to 18.5% in the same period one year ago and 13.2% in the
previous quarter. Selling and marketing expenses for the fourth
quarter of 2008 were US$3.3 million including $407,000 of
share-based compensation expenses, representing a year-over-year
increase of 83.3% from US$1.8 million and a quarter-over-quarter
increase of 46.8% from US$2.3 million. The year-over-year increase
was primarily due to the expansion of the direct sales force,
higher marketing and promotion expenses and increased share-based
compensation expenses. The quarter-over-quarter increase was
primarily due to higher marketing expenses, increased share-based
compensation expenses, and the expansion of the direct sales force.
General and administrative expenses for the fourth quarter of 2008
were US$5.2 million including $1.3 million of share-based
compensation expenses, representing a year-over-year increase of
172.0% from US$1.9 million and a quarter-over-quarter increase of
51.9% from US$3.4 million. The year-over-year increase was
primarily due to increased share-based compensation expenses,
higher amortization of acquired intangible assets, increased
professional expenses, and headcount increase. The
quarter-over-quarter increase was primarily due to higher
share-based compensation expenses, increased professional expenses,
increased bad debt provision and higher amortization of acquired
intangible assets. Income from Operations Income from operations
for the fourth quarter of 2008 was US$6.4 million, representing a
year-over-year increase of 34.0% from US$4.8 million and
quarter-over-quarter increase of 3.8% from US$6.1 million. Adjusted
income from operations (non-GAAP) for the fourth quarter of 2008,
which excluded share-based compensation expenses and amortization
of acquired intangible assets, was US$8.7 million, representing a
year-over-year increase of 55.4% from US$5.6 million and a
quarter-over-quarter increase of 14.9% from US$7.6 million.
Adjusted operating margin (non-GAAP) for the fourth quarter of
2008, which excluded the effect of share-based compensation
expenses and amortization of acquired intangible assets, was 22.8%,
compared to 35.9% in the same period one year ago and 23.4% in the
previous quarter. Income Tax Expense/Benefit Income tax benefit for
the fourth quarter of 2008 was US$352,000 compared to income tax
benefit of US$181,000 in the same period one year ago and income
tax expense of US$6,000 in the previous quarter. The effective
income tax rate for the fourth quarter of 2008 was a negative 4.4%,
compared to a negative 3.0% in the same period one year ago and
0.1% in the previous quarter because the most profitable
subsidiaries and affiliates of AirMedia are currently enjoying
preferential tax holidays in China. Net Income Net income for the
fourth quarter of 2008 was US$8.1 million, representing a
year-over-year increase of 32.6% from US$6.1 million and a
quarter-over-quarter increase of 8.9% from US$7.5 million. The
basic net income per ADS for the fourth quarter of 2008 was
US$0.12, compared to basic net income per ADS of US$0.09 in the
same period one year ago and basic net income per ADS of US$0.11 in
the previous quarter. The diluted net income per ADS for the fourth
quarter of 2008 was US$0.12, compared to diluted net income per ADS
of US$0.09 in the same period one year ago and diluted net income
per ADS of US$0.11 in the previous quarter. Adjusted net income
(non-GAAP) for the fourth quarter of 2008, which is net income
excluding share-based compensation expenses and amortization of
acquired intangible assets, was US$10.5 million, representing a
year-over-year increase of 50.0% from US$7.0 million and a
quarter-over-quarter increase of 17.5% from US$8.9 million. Basic
adjusted net income per ADS (non-GAAP) for the fourth quarter of
2008 was US$0.16, compared to basic adjusted net income per ADS of
US$0.14 in the same period one year ago and basic adjusted net
income per ADS of US$0.13 in the previous quarter. Diluted adjusted
net income per ADS (non-GAAP) for the fourth quarter of 2008 was
US$0.16, compared to diluted adjusted net income per ADS of US$0.12
in the same period one year ago and diluted adjusted net income per
ADS of US$0.13 in the previous quarter. Please refer to the
attached table for a reconciliation of net income and basic and
diluted net income per ADS under US GAAP to adjusted net income and
basic and diluted adjusted net income per ADS (non-GAAP). Fiscal
Year 2008 Financial Results Revenues Total revenues by product line
(numbers in US$ 000's except for percentage): Year Year Ended % of
Ended % of Y/Y December Total December Total Growth 31, 2008
Revenues 31, 2007 Revenues rate Digital frames in airports 45,011
35.9% 1,263 2.9% 3463.8% Digital TV screens in airports 47,591
37.9% 26,921 61.7% 76.8% Digital TV screens on airplanes 19,227
15.3% 11,093 25.4% 73.3% Billboards on gate bridges in airports
6,051 4.8% -- -- N/A Other displays 7,660 6.1% 4,334 10.0% 76.7%
Total revenues 125,540 100.0% 43,611 100.0% 187.9% Net revenues
119,433 41,628 186.9% Total revenues for the fiscal year 2008 were
US$125.5 million, representing a year-over-year increase of 187.9%
from US$43.6 million in fiscal year 2007. The year-over-year
increase was due to the increases of revenues from all of our
product lines. Revenues from digital frames in airports Revenues
from digital frames in airports for fiscal year 2008 increased by
3,463.8% year-over-year to US$45.0 million due to the increase in
the number of time slots sold. Digital frames were operated only in
one airport, Beijing Capital International Airport, for one month
in December 2007.The number of time slots sold increased by
7,368.0% year-over-year to 9,559 time slots due to continued sales
efforts and growing acceptance of AirMedia's digital frames. The
number of AirMedia's network airports operating digital frames was
22 airports at the end of 2008, up from one airport at the end of
2007. The number of time slots available for sale for fiscal year
2008 increased substantially by 13,620.3% year-over-year to 48,570
time slots. The year-over-year increase in the number of time slots
available for sale was primarily due to the increase in the number
of airports in operation. The utilization rate of digital frames
for fiscal year 2008 decreased to 19.7% from 36.2% in fiscal year
2007 due to the increase in the number of time slots available for
sale as digital frames started being operated in 21 new airports in
2008. The ASP of digital frames for fiscal year 2008 decreased by
52.1% year-over-year to US$4,709 because the listing prices of
digital frames in the newly operated airports in 2008 were
significantly lower than the listing prices of digital frames in
Beijing Capital International Airport, which was the only airport
where we had operation of digital frames in fiscal year 2007.
Revenues from digital TV screens in airports Revenues from digital
TV screens in airports for fiscal year 2008 grew by 76.8%
year-over-year to US$47.6 million primarily due to the increase in
the ASP. The ASP increased by 84.2% year-over-year to US$1,748 due
to the increase in the listing prices of digital TV screens in four
selected airports in the first quarter of 2008 and fewer discounts
off the listing prices offered to our customers from the first
quarter of 2008 onwards. The number of time slots sold decreased by
4.0% year-over-year to 27,223 time slots because advertisers
increased smaller percentage of advertising budgets than the
percentage of increase in the ASP. The number of time slots
available for sale increased by 29.7% year-over-year to 100,624
time slots in 2008. The year-over-year increase in the number of
time slots available for sale was due to the increase in the number
of airports in operation which increased from 39 airports at the
end of 2007 to 41 airports at the end of 2008 and the full-year
operation time of the nine additional airports which started
operation in the middle of 2007. Utilization rate decreased by 9.5
percentage points year-over-year to 27.1% primarily due to the
increase in time slots available for sale. Revenues from digital TV
screens on airplanes Revenues from digital TV screens on airplanes
for fiscal year 2008 grew by 73.3% year-over-year to US$19.2
million primarily due to the increases in the ASP and the number of
time slots sold. The ASP increased by 52.2% year-over-year to
US$19,992 due to fewer discounts off the listing prices offered to
our customers from the first quarter of 2008 onwards. The number of
time slots sold for fiscal year 2008 increased by 13.8%
year-over-year to 962 time slots due to continued sales efforts and
growing acceptance of AirMedia's digital media by advertisers. The
number of time slots available for sale for fiscal year 2008
increased by 7.2% to 1,878 time slots due to additional advertising
time on airplanes. Utilization rate for fiscal year 2008 increased
by 3.0 percentage points year-over-year to 51.2% due to more time
slots sold. Please refer to "Summary of Selected Operating Data"
for more operating data. Business tax and other sales tax for
fiscal year 2008 was US$6.1 million, representing a year-over-year
increase of 208.0% from US$2.0 million in fiscal year 2007 due to
our business expansion. Net revenues for the fiscal year 2008 were
US$119.4 million, representing a year-over-year increase of 186.9%
from US$41.6 million in fiscal year 2007 due to the increases of
total revenues. Cost of Revenues Cost of revenues for fiscal year
2008 was US$71.0 million, representing a year-over-year increase of
232.3% from US$21.4 million in fiscal year 2007 due to the
increases in concession fees and other components of cost of
revenues. Cost of revenues as a percentage of net revenues in
fiscal year 2008 increased to 59.4% from 51.3% in fiscal year 2007.
Concession fees for fiscal year 2008 were US$45.7 million,
representing a year-over-year increase of 281.1% from US$12.0
million in fiscal year 2007 due to additional new concession
contracts. Concession fees as a percentage of net revenues in
fiscal year 2008 increased to 38.3% from 28.8% in fiscal year 2007
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. Gross Profit
Gross profit for fiscal year 2008 was US$48.4 million, representing
a year-over-year increase of 139.0% from US$20.3 million in fiscal
year 2007. Gross profit as a percentage of net revenues for fiscal
year 2008 was 40.6%, down from 48.7% in fiscal year 2007. The
decrease in gross margin was primarily because concession fees were
fixed once concession rights contracts were entered into while
revenues generated from newly signed concession rights contracts
need time to ramp up. Operating Expenses Operating expenses
(numbers in US$ 000's except for percentage): Year Ended December %
of Net 31, 2008 Revenues Selling and marketing expenses 10,171 8.5%
General and administrative expenses 14,374 12.1% Total operating
expenses 24,545 20.6% Total operating expenses excluding
share-based compensation expenses and amortization of acquired
intangible assets (a non-GAAP measure) 18,412 15.4% Year Ended % of
Y/Y December 31, Net Growth 2007 Revenues rate Selling and
marketing expenses 4,813 11.6% 111.3% General and administrative
expenses 21,982 52.8% -34.6% Total operating expenses 26,795 64.4%
-8.4% Total operating expenses excluding share-based compensation
expenses and amortization of acquired intangible assets (a non-GAAP
measure) 7,436 17.9% 147.6% Total operating expenses for fiscal
year 2008 were US$24.5 million, representing a year-over-year
decrease of 8.4% from US$26.8 million in fiscal year 2007. Total
operating expenses for fiscal year 2008 included share-based
compensation expenses of US$5.0 million, compared to US$19.1
million in fiscal year 2007. Adjusted operating expenses (non-GAAP)
for fiscal year 2008, which excluded share-based compensation
expenses and amortization of acquired intangible assets, were
US$18.4 million, representing a year-over-year increase of 147.6%
from US$7.4 million in fiscal year 2007. Adjusted operating
expenses as a percentage of net revenues (non-GAAP) in fiscal year
2008 was 15.4%, compared to 17.9% in fiscal year 2007. Selling and
marketing expenses for fiscal year 2008 were US$10.2 million
including US$1.2 million of share-based compensation expenses,
representing a year-over-year increase of 111.3% from US$4.8
million in fiscal year 2007, primarily due to the expansion of the
direct sales force, higher marketing expenses and increased
share-based compensation expenses. General and administrative
expenses for fiscal year 2008 were US$14.4 million including $3.8
million of share-based compensation expenses, representing a
year-over-year decrease of 34.6% from US$22.0 million in fiscal
year 2007 primarily because that there was a one-time share-based
compensation expense of US$17.5 million incurred in the third
quarter of 2007. Income from Operations Income from operations for
fiscal year 2008 was US$23.9 million, compared to loss from
operations of US$6.5 million in fiscal year 2007. Adjusted income
from operations (non-GAAP) for fiscal year 2008, which excluded
share-based compensation expenses and amortization of acquired
intangible assets, was US$30.0 million, representing a
year-over-year increase of 134.1% from US$12.8 million in fiscal
year 2007. Adjusted operating margin (non-GAAP) for fiscal year
2008, which excluded the effect of share-based compensation
expenses and amortization of acquired intangible assets, was 25.1%,
compared to 30.8% in fiscal year 2007. Income Tax Expense/Benefit
Income tax benefit for fiscal year 2008 was US$498,000 compared to
income tax benefit of US$195,000 in fiscal year 2007. The effective
income tax rate for fiscal year 2008 was a negative 1.6%, compared
to 4.1% in fiscal year 2007 primarily because the most profitable
subsidiaries and affiliates of AirMedia are currently enjoying
preferential tax holidays in China. Net Income Net income for
fiscal year 2008 was US$30.2 million, compared to net loss of
US$5.1 million in fiscal year 2007. Basic net income per ADS for
fiscal year 2008 was US$0.45, compared to basic net loss per ADS of
US$0.23 in fiscal year 2007. Diluted net income per ADS for fiscal
year 2008 was US$0.44, compared to diluted net loss per ADS of
US$0.23 in fiscal year 2007. Adjusted net income (non-GAAP) for
fiscal year 2008, which excluded share-based compensation expenses
and amortization of acquired intangible assets, was US$36.3
million, representing a year-over-year increase of 155.0% from
US$14.2 million in fiscal year 2007. Basic adjusted net income per
ADS (non-GAAP) for fiscal year 2008 was US$0.54, compared to basic
adjusted net income per ADS of US$0.38 in fiscal year 2007. Diluted
adjusted net income per ADS (non-GAAP) for fiscal year 2008 was
US$0.53, compared to diluted adjusted net income per ADS of US$0.38
in fiscal year 2007. 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 net income/loss and basic and
diluted adjusted income/loss per ADS (non-GAAP). Other Recent
Developments AirMedia is in the process of renewing its concession
rights contract with Air China to continue placing its programs on
the routes operated by Air China. AirMedia expects the final
contract to be signed in the weeks to come. AirMedia is in the
process of entering into a concession rights contract with Beijing
Capital International Airport to operate various traditional and
digital advertising formats at Terminals 1, 2, and 3 of Beijing
Capital International Airport. AirMedia expects the final contract
to be signed in the weeks to come. AirMedia is in the process of
entering into a concession rights contract with Shenzhen
International Airport to operate traditional advertising formats at
Terminals A and B of Shenzhen International Airport. AirMedia
expects the final contract to be signed in the weeks to come.
AirMedia is in the process of renewing its concession rights
contract with Shenzhen International Airport to continue operating
digital TV screens in Shenzhen International Airport. AirMedia
expects the final contract to be signed in the weeks to come. In
January 2009, AirMedia appointed Diana Congrong Chen as chief
strategy consultant. Diana is a well-known professional executive
and sales leader in the advertising industry with over ten years of
experience in advertising sales and sales management. Diana has a
strong track record in the industry and she brings extensive
management and sales experience to AirMedia's team. She will
significantly contribute to AirMedia by further strengthening
regional sales, attracting clients in complementary industries, and
broadening AirMedia's customer base. Prior to joining AirMedia
Group Inc., Diana Congrong Chen served as the chief operating
officer of Focus Media Holding Limited from November 2006 to May
2008, and as its chief marketing officer from May 2005 to November
2006. Before joining Focus Media, Ms. Chen worked for Phoenix
Satellite TV from 1998 to 2004, serving as the general manager,
director of international advertising and president of eastern
China. While at Phoenix Satellite TV, Ms. Chen successfully
developed business in Zhejiang and eastern China and the team she
led was awarded Best Sales Team of the company in several years. In
2004, Ms. Chen was honored with a Most Outstanding Employee Award
by Phoenix Satellite TV. Ms. Chen holds a B.A. degree in journalism
from Zhejiang University and completed graduate courses in finance
at Zhejiang University. In addition to the 115 TV-attached digital
frames in Guangzhou Airport already in operation, in December 2008,
AirMedia obtained concession rights contract to install and operate
276 LCD screens in the same airport from February 1, 2009 to
January 31, 2014, which are located across all the international
and domestic check-in islands and all the security checks and are
put in sets of two or three screens together as a group. An
advertisement can be displayed in one picture on multiple screens
to better attract air travelers' attention. On December 29, 2008,
AirMedia's board of directors authorized, but not obligated,
AirMedia to repurchase up to US$50 million worth of its own
outstanding American Depositary Shares ("ADSs") throughout 2009.
The repurchases will be made from time to time on the open market
at prevailing market prices, in negotiated transactions off the
market, in block trades or otherwise. AirMedia may execute its
repurchase program pursuant to a plan in conformity with Rule
10b5-1 under the Securities Exchange Act of 1934, as amended, which
allows AirMedia to repurchase its ADSs pursuant to the
pre-determined terms under the plan at any time, including during
periods in which it may be in possession of material non-public
information. The timing and extent of any purchases will depend
upon market conditions, the trading price of ADSs and other
factors, and be subject to the restrictions relating to volume,
price and timing in accordance with applicable laws. AirMedia
expects to implement this share repurchase program in a manner
consistent with market condition and the interest of its
shareholders. AirMedia's board of directors will review the share
repurchase program periodically, and may authorize adjustment of
its terms and size accordingly. AirMedia plans to fund repurchases
made under this program from its available cash balance. On
December 10, 2008, to provide better incentive to its employees,
AirMedia board of directors approved an adjustment to the exercise
price of the stock options which were granted on November 29, 2007.
The exercise price of each option was originally $8.50 per share of
common stock. The revised exercise price for each option is $2.98
per share of common stock. Since October 2008, AirMedia has been
operating an additional 3-minute advertising time on the routes
operated by Xiamen Airlines according to a supplemental agreement,
which increased its capacity of Xiamen Airlines's advertisements.
In the fourth quarter of 2008, AirMedia started operating digital
frames in additional three airports, including TV-attached digital
frames in two airports located in Xi'an and Xiamen, and stand-alone
digital frames in three airports located in Xi'an, Xiamen and
Qingdao. This expanded AirMedia's digital frame network to 19
airports. In addition, AirMedia also started operating TV-attached
digital frames in Chongqing Jiangbei Airport, which already had
stand-alone digital frames in operation, and started operating
stand-alone digital frames in airports located in Nanjing and
Jinan, which already had TV-attached digital frames in operation.
In September 2008, AirMedia obtained a contractual concession right
to place its programs on the routes operated by China United
Airlines from October 1, 2008 to December 31, 2009, which increased
the number of AirMedia's partner airlines to 12. AirMedia's
programs have been placed on the routes operated by China United
Airlines since the beginning of 2009. Business Outlook AirMedia
currently expects that its total revenues for the first quarter of
2009 will be in an amount ranging from US$32.0 million to US$34.0
million, representing a year-over-year increase of 48.2% to 57.4%
from the same period in 2008. AirMedia currently expects that
concession fees will be at least US$18.5 million in the first
quarter of 2009 primarily due to the concession fees of additional
concession rights contracts that were recently entered into or will
be entered into soon. 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 December
September December 31, 2008 30, 2008 31, 2007 Digital TV screens in
airports Number of airports in operation 41 41 39 Number of time
slots available for sale (1) 25,668 25,275 22,557 Number of time
slots sold (3) 5,711 8,019 9,198 Utilization rate (4) 22.2% 31.7%
40.8% Average advertising revenue per time slot sold (5) US$1,994
US$1,631 US$1,023 Digital TV screens on airplanes Number of
airlines in operation 9 9 9 Number of time slots available for sale
(1) 486 468 450 Number of time slots sold (3) 196 287 277
Utilization rate (4) 40.3% 61.4% 61.6% Average advertising revenue
per time slot sold (5) US$21,056 US$22,930 US$14,957 Digital frames
in airports Number of airports in operation 22 19 1 Number of time
slots available for sale (2) 19,779 17,086 354 Number of time slots
sold (3) 4,617 3,317 128 Utilization rate (4) 23.3% 19.4% 36.2%
Average advertising revenue per time slot sold (5) US$3,732
US$3,049 US$9,841 YOY Growth Rate QOQ Growth Rate Digital TV
screens in airports Number of airports in operation 5.1% 0.0%
Number of time slots available for sale (1) 13.8% 1.6% Number of
time slots sold (3) -37.9% -28.8% Utilization rate (4) -18.5% -9.5%
Average advertising revenue per time slot sold (5) 94.9% 22.2%
Digital TV screens on airplanes Number of airlines in operation
0.0% 0.0% Number of time slots available for sale (1) 8.0% 3.8%
Number of time slots sold (3) -29.2% -31.8% Utilization rate (4)
-21.3% -21.1% Average advertising revenue per time slot sold (5)
40.8% -8.2% Digital frames in airports Number of airports in
operation 2100.0% 15.8% Number of time slots available for sale (2)
5487.3% 15.8% Number of time slots sold (3) 3507.0% 39.2%
Utilization rate (4) -12.9% 3.9% Average advertising revenue per
time slot sold (5) -62.1% 22.4% Year Ended Year Ended December
December YOY Growth 31, 2008 31, 2007 Rate Digital TV screens in
airports Number of airports in operation 41 39 5.1% Number of time
slots available for sale (1) 100,624 77,574 29.7% Number of time
slots sold (3) 27,223 28,359 -4.0% Utilization rate (4) 27.1% 36.6%
-9.5% Average advertising revenue per time slot sold (5) US$1,748
US$949 84.2% Digital TV screens on airplanes Number of airlines in
operation 9 9 0.0% Number of time slots available for sale (1)
1,878 1,752 7.2% Number of time slots sold (3) 962 845 13.8%
Utilization rate (4) 51.2% 48.2% 3.0% Average advertising revenue
per time slot sold (5) US$19,992 US$13,132 52.2% Digital frames in
airports Number of airports in operation 22 1 2100.0% Number of
time slots available for sale (2) 48,570 354 13620.3% Number of
time slots sold (3) 9,559 128 7368.0% Utilization rate (4) 19.7%
36.2% -16.5% Average advertising revenue per time slot sold (5)
US$4,709 US$9,841 -52.1% 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) After our
adjustment of time-slot length in mid May, we define a time slot as
a 12-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 10-minute
cycles, which allows us to sell a maximum of 50 time slots 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 12-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 fourth quarter 2008 earnings at 7:00
PM U.S. Eastern Time on February 26, 2009 (4:00 PM U.S. Pacific
Time on February 26, 2009; 8:00 AM Beijing/Hong Kong time on
February 27, 2009). AirMedia's management team will be on the call
to discuss the financial results and highlights and to answer
questions. Conference Call Dial-in Information: U.S.:
+1-800-510-9691 U.K.: +44-207-365-8426 Hong Kong: +852-3002-1672
International: +1-617-614-3453 Pass code: AMCN A replay of the call
will be available for 1 week between 8:00 p.m. on February 26, 2009
and 8:00 p.m. on March 4, 2009, Eastern Time. Replay Information:
U.S.: +1-888-286-8010 International: +1-617-801-6888 Pass code:
74797282 Additionally, a live and archived webcast of this call
will be available on the Investor Relations section of AirMedia's
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)
share-based compensation expenses, 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 and operating performance 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 operating performance 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 all of the 30 largest airports in China. AirMedia also
has contractual concession rights to operate TV-attached digital
frames ranging from 46 to 52 inches and stand-alone digital frames
ranging from 63 to 82 inches in 22 major airports. In addition,
AirMedia has contractual concession rights to place its programs on
the routes operated by 10 airlines, including the three largest
airlines in China, and the exclusive rights in mainland China to
sell advertisements on Cathay Pacific Airline and Dragonair's
routes. In select major airports, AirMedia also operates
traditional media platforms, such as billboards, light boxes, mega
display screens, and shuttle bus displays. 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
our customers reduce their advertising spending due to an economic
downturn in China and/or elsewhere or for any other reason, our
revenues and results of operations may be materially and adversely
affected; 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) Dec. 31, Dec. 31, 2008 2007 Assets Current assets: Cash
161,534 210,915 Accounts receivable, net 38,386 13,478 Prepaid
concession fees 32,706 13,130 Other current assets 7,830 2,393
Deferred tax assets - current 380 95 Total current assets 240,836
240,011 Acquired intangible assets, net 9,027 4,862 Property and
equipment, net 62,443 15,985 Long-term deposits 14,724 4,706
Long-term investment 1,099 788 Deferred tax assets - non-current
1,564 507 TOTAL ASSETS 329,693 266,859 Liabilities Current
liabilities: Accounts payable 15,696 4,666 Accrued expenses and
other current liabilities 5,664 1,309 Deferred revenue 2,929 1,712
Income tax payable 654 32 Amounts due to related parties 408 11
Total current liabilities 25,351 7,730 Non-current liabilities:
Deferred tax liability - non-current 2,659 1,527 Total liabilities
28,010 9,257 Minority interest 951 (3) Shareholders' equity
Ordinary shares 134 133 Additional paid-in capital 268,881 263,130
Statutory reserve 5,593 1,782 Accumulated earning/(deficiency)
16,070 (10,317) Accumulated other comprehensive income 10,054 2,877
Total shareholders' equity 300,732 257,605 TOTAL LIABILITIES,
MINORITY INTEREST, AND SHAREHOLDERS' EQUITY 329,693 266,859
AirMedia Group Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In U.S. dollars in thousands, except share related
data) Three Months Ended Dec. 31, Sept. 31, Dec. 31, 2008 2008 2007
Revenues 40,462 33,708 16,287 Business tax and other sales tax
(2,272) (1,373) (681) Net revenues 38,190 32,335 15,606 Cost of
revenues 23,280 20,499 7,117 Gross profit 14,910 11,836 8,489
Operating expenses: Selling and marketing * 3,341 2,276 1,823
General and administrative * 5,195 3,420 1,910 Total operating
expenses 8,536 5,696 3,733 Income/(loss) from operations 6,374
6,140 4,756 Interest income 1,216 1,122 1,369 Other income, net 438
428 -- Income/(loss) before income taxes and minority interest
8,028 7,690 6,125 Income tax expense/ (benefit) (352) 6 (181)
-4.40% 0.10% -3.00% Net income/(loss) before minority interest
8,380 7,684 6,306 Minority interest (275) (102) (4) Income/(Loss)
of equity accounting investment 23 (119) (174) Net income / (loss)
8,128 7,463 6,128 Deemed dividend on series A convertible
redeemable preferred shares- Accretion of redemption premium -- --
(127) Deemed dividend on series B convertible redeemable preferred
shares- Accretion of redemption premium -- -- (523) Net
income/(loss) attributable to holders of ordinary shares 8,128
7,463 5,478 Net Income allocated for computing EPS Ordinary shares
- Basic 8,128 7,463 4,689 Net Income allocated for computing EPS
preferred A shares - Basic -- -- 655 Net Income allocated for
computing EPS preferred B shares - Basic -- -- 783 Net income used
in calculating Income per ordinary share��diluted 8,128 7,463 4,689
Net income/(loss) per ordinary share - basic $0.06 $0.06 $0.04 -
diluted $0.06 $0.05 $0.04 Net income/(loss) per ADS - basic $0.12
$0.11 $0.09 - diluted $0.12 $0.11 $0.09 Net income per Series A
preferred share -- -- $0.05 Net income per Series B preferred share
-- -- $0.12 Weighted average ordinary shares outstanding used in
computing net income per ordinary share - basic 133,820,539
133,680,775 106,154,347 Weighted average ordinary shares
outstanding used in computing net income per ordinary share -
diluted 134,608,724 138,054,496 108,713,868 Share used in
calculating net income/(loss) per Series A preferred share��basic
-- -- 13,465,217 Share used in calculating net income/(loss) per
Series B preferred share��basic -- -- 6,608,696 * Share-based
compensation charges included are as follow: Selling and marketing
407 233 174 General and administrative 1,312 771 600 Year Ended
Dec. 31, Dec. 31, 2008 2007 Revenues 125,540 43,611 Business tax
and other sales tax (6,107) (1,983) Net revenues 119,433 41,628
Cost of revenues 70,995 21,365 Gross profit 48,438 20,263 Operating
expenses: Selling and marketing * 10,171 4,813 General and
administrative * 14,374 21,982 Total operating expenses 24,545
26,795 Income/(loss) from operations 23,893 (6,532) Interest income
5,379 1,745 Other income, net 1,135 -- Income/(loss) before income
taxes and minority interest 30,407 (4,787) Income tax expense/
(benefit) (498) (195) Net income/(loss) before minority interest
30,905 (4,592) Minority interest (382) 2 Income/(Loss) of equity
accounting investment (325) (520) Net income / (loss) 30,198
(5,110) Deemed dividend on series A convertible redeemable
preferred shares- Accretion of redemption premium -- (1,201) Deemed
dividend on series B convertible redeemable preferred shares-
Accretion of redemption premium -- (2,152) Net income/(loss)
attributable to holders of ordinary shares 30,198 (8,463) Net
Income allocated for computing EPS Ordinary shares - Basic 30,198
(8,463) Net Income allocated for computing EPS preferred A shares -
Basic -- 1,201 Net Income allocated for computing EPS preferred B
shares - Basic -- 2,152 Net income used in calculating Income per
ordinary share��diluted 30,198 (8,463) Net income/(loss) per
ordinary share - basic 0.23 ($0.12) - diluted 0.22 ($0.12) Net
income/(loss) per ADS - basic 0.45 ($0.23) - diluted 0.44 ($0.23)
Net income per Series A preferred share -- $0.04 Net income per
Series B preferred share -- $0.32 Weighted average ordinary shares
outstanding used in computing net income per ordinary share - basic
133,603,419 73,469,589 Weighted average ordinary shares outstanding
used in computing net income per ordinary share - diluted
137,782,135 73,469,589 Share used in calculating net income/(loss)
per Series A preferred share��basic -- 31,461,918 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 1,158 274 General and administrative
3,805 18,831 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 Dec. 31,
Sept. 30, Dec. 31, 2008 2008 2007 GAAP net income attributable to
shareholders 8,128 7,463 6,128 Amortization of acquired intangible
assets 605 428 66 Share-based compensation 1,719 1,004 774 Adjusted
net income 10,452 8,895 6,968 Basic adjusted net income per share
$0.08 $0.07 $0.07 Diluted adjusted net income per share $0.08 $0.06
$0.06 Basic adjusted net income per ADS $0.16 $0.13 $0.14 Diluted
adjusted net income per ADS $0.16 $0.13 $0.12 Shares used in
computing adjusted basic net income per share 133,820,539
133,680,775 106,154,347 Shares used in computing adjusted diluted
net income per share 134,608,724 138,054,496 108,713,868 Year Ended
Dec. 31, Dec. 31, 2008 2007 GAAP net income attributable to
shareholders 30,198 (5,110) Amortization of acquired intangible
assets 1,170 254 Share-based compensation 4,963 19,105 Adjusted net
income 36,331 14,249 Basic adjusted net income per share $0.27
$0.19 Diluted adjusted net income per share $0.26 $0.19 Basic
adjusted net income per ADS $0.54 $0.38 Diluted adjusted net income
per ADS $0.53 $0.38 Shares used in computing adjusted basic net
income per share 133,603,419 73,469,589 Shares used in computing
adjusted diluted net income per share 137,782,135 73,469,589 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. AirMedia Group Inc. RECONCILIATION OF GAAP
OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (In U.S. dollars
in thousands, except for percentage) Three Months Ended Dec. 31,
Sept. 30, Dec. 31, 2008 2008 2007 GAAP operating expenses 8,536
5,696 3,733 Amortization of acquired intangible assets 605 428 66
Share-based compensation 1,719 1,004 774 Adjusted operating
expenses 6,212 4,264 2,893 Adjusted operating expenses as a
percentage of net revenues 16.3% 13.2% 18.5% Year Ended Dec. 31,
Dec. 31, 2008 2007 GAAP operating expenses 24,545 26,795
Amortization of acquired intangible assets 1,170 254 Share-based
compensation 4,963 19,105 Adjusted operating expenses 18,412 7,436
Adjusted operating expenses as a percentage of net revenues 15.4%
17.9% AirMedia Group Inc. RECONCILIATION OF GAAP INCOME FROM
OPERATIONS TO NON-GAAP INCOME FROM OPERATIONS (In U.S. dollars in
thousands, except for percentage) Three Months Ended Dec. 31, Sept.
30, Dec. 31, 2008 2008 2007 Income/(loss) from operations 6,374
6,140 4,756 Amortization of acquired intangible assets 605 428 66
Share-based compensation 1,719 1,004 774 Adjusted Income/(loss)
from operations 8,698 7,572 5,596 Adjusted Operating margin 22.8%
23.4% 35.9% Year Ended Dec. 31, Dec. 31, 2008 2007 Income/(loss)
from operations 23,893 (6,532) Amortization of acquired intangible
assets 1,170 254 Share-based compensation 4,963 19,105 Adjusted
Income/(loss) from operations 30,026 12,827 Adjusted Operating
margin 25.1% 30.8% For further information, please contact:
AirMedia Group, Inc. Raymond Huang, Investor Relations Director
Tel: +86-10-8460-8678 Email: Brunswick Group Cynthia He Tel:
+86-10-6566-2256 Email: DATASOURCE: AirMedia Group Inc. CONTACT:
AirMedia Group, Inc., Raymond Huang, Investor Relations Director,
+86-10-8460-8678, or Brunswick Group, Cynthia He, +86-10-6566-
2256, for AirMedia Group, Inc. Web site:
http://www.airmedia.net.cn/ http://ir.airmedia.net.cn/
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Airmedia Grp. ADS, Each Representing Two Ordinary Shares (MM) (NASDAQ:AMCN)
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