BEIJING, March 7, 2011 /PRNewswire-Asia-FirstCall/ --
AirMedia Group Inc. ("AirMedia" or the "Company") (Nasdaq: AMCN), a
leading operator of out-of-home advertising platforms in
China targeting mid-to-high-end
consumers, today announced its unaudited financial results for the
fourth quarter and fiscal year ended December 31, 2010.
Fourth Quarter 2010 Financial and Business
Highlights
- Total revenues increased by 56.6% year-over-year and by 16.8%
quarter-over-quarter to US$70.8
million, a record high in AirMedia's operating history.
- Gross profit was US$14.3 million,
improving from gross loss of US$2.8
million in the same period one year ago and increasing by
50.3% quarter-over-quarter from gross profit of US$9.5 million in the previous quarter.
- Net income attributable to AirMedia's shareholders was
US$5.1 million, improving from net
loss attributable to AirMedia's shareholders of US$19.4 million in the same period one year ago
and increasing by 321.6% quarter-over-quarter from net income
attributable to AirMedia's shareholders of US$1.2 million in the previous quarter. Basic and
diluted net income attributable to AirMedia's shareholders per
American Depositary Share ("ADS") was US$0.08 and US$0.07, respectively.
- Adjusted net income attributable to AirMedia's shareholders
(non-GAAP), which is net income attributable to AirMedia's
shareholders excluding share-based compensation expenses and
amortization of acquired intangible assets, was US$7.2 million, improving from adjusted net loss
attributable to AirMedia's shareholders (non-GAAP) of US$17.1 million in the same period one year ago
and increasing by 88.2% quarter-over-quarter from adjusted net
income attributable to AirMedia's shareholders (non-GAAP) of
US$3.8 million in the previous
quarter. Adjusted basic and diluted net income attributable to
AirMedia's shareholders per ADS (non-GAAP) was US$0.11 and US$0.10, respectively.
- The Company continued generating positive operating cash flow
in excess of capital expenditures in the fourth quarter of 2010.
Other than restricted cash of US$6.8
million, cash and short-term investments increased to
US$106.5 million as of December 31, 2010, from US$96.5 million as of September 30, 2010.
- CCTV Air Channel was established on the Company's digital TV
screens in airports and digital TV screens on airplanes to
broadcast TV programs to air travelers in China in December
2010.
- In November 2010, AirMedia
renewed its concession rights contract with Beijing Capital Airport
Advertising Co., Ltd. to operate digital frames and digital TV
screens at Terminal 3 of Beijing Capital International Airport for
five years from January 1, 2011 to
December 31, 2015.
Fiscal Year 2010 Financial
Highlights
- Total revenues increased by 55.0% year-over-year to
US$236.5 million.
- Net loss attributable to AirMedia's shareholders was
US$4.9 million, improving from net
loss attributable to AirMedia's shareholders of US$37.2 million in fiscal year 2009. Basic and
diluted net loss attributable to AirMedia's shareholders per ADS
were both US$0.07.
- Adjusted net income attributable to AirMedia's shareholders
(non-GAAP), which is net loss excluding share-based compensation
expenses and amortization of acquired intangible assets, was
US$6.8 million, improving from
adjusted net loss attributable to AirMedia's shareholders
(non-GAAP) of US$28.9 million in
fiscal year 2009. Adjusted basic and diluted income attributable to
AirMedia's shareholders per ADS (non-GAAP) were both US$0.10.
"Year 2010 was a turnaround year for AirMedia. The Company
returned to profitability in the third quarter and further
increased its bottom-line margin in the fourth quarter with strong
revenue growth. We are encouraged by the positive market outlook on
2011. With our strong operating leverage to drive margin growth, we
expect Year 2011 to be a year of harvesting for AirMedia. We will
continue to focus on improving utilization rates of our current
media network and increasing our profitability," commented
Herman Guo, chairman and chief
executive officer of AirMedia.
"We are pleased to report another profitable quarter in the
fourth quarter with sequential top-line growth from most of our
major product lines. Total revenues, revenues from digital frames,
and revenues from digital TV screens on airplanes all reached
record high numbers in the fourth quarter. Digital TV screens in
airports continued to turn around. Traditional media in airports
started to contribute meaningful net income to the Company. Other
than working on our top-line growth, we will also focus on
optimizing our cost structure and operational efficiency to achieve
sustainable profit in the future," Ping
Sun, AirMedia's chief financial officer, commented.
Fourth Quarter 2010 Financial
Results
Revenues
Total revenues by product line (numbers in US$ 000's except for
percentages):
|
|
Quarter
Ended
December 31,2010
|
% of
Total
Revenues
|
|
Quarter
Ended
September 30,2010
|
% of
Total
Revenues
|
|
Quarter
Ended
December
31, 2009
|
% of
Total
Revenues
|
|
Y/Y
Growth
rate
|
|
Q/Q
Growth
rate
|
|
Air Travel Media
Network
|
|
66,634
|
94.2%
|
|
56,829
|
93.7%
|
|
45,097
|
99.8%
|
|
47.8%
|
|
17.3%
|
|
Digital frames in
airports
|
|
32,653
|
46.1%
|
|
31,126
|
51.4%
|
|
20,673
|
45.7%
|
|
57.9%
|
|
4.9%
|
|
Digital TV screens in
airports
|
|
8,586
|
12.1%
|
|
7,297
|
12.0%
|
|
7,498
|
16.6%
|
|
14.5%
|
|
17.7%
|
|
Digital TV screens on
airplanes
|
|
9,597
|
13.6%
|
|
5,239
|
8.6%
|
|
6,271
|
13.9%
|
|
53.0%
|
|
83.2%
|
|
Traditional media in
airports
|
|
14,209
|
20.1%
|
|
12,070
|
19.9%
|
|
10,215
|
22.6%
|
|
39.1%
|
|
17.7%
|
|
Other revenues in air
travel
|
|
1,589
|
2.3%
|
|
1,097
|
1.8%
|
|
440
|
1.0%
|
|
261.1%
|
|
44.8%
|
|
Gas Station Media
Network
|
|
1,559
|
2.2%
|
|
1,128
|
1.9%
|
|
102
|
0.2%
|
|
1,428.4%
|
|
38.2%
|
|
Other Media
|
|
2,569
|
3.6%
|
|
2,641
|
4.4%
|
|
-
|
0.0%
|
|
N/A
|
|
-2.7%
|
|
Total revenues
|
|
70,762
|
100.0%
|
|
60,598
|
100.0%
|
|
45,199
|
100.0%
|
|
56.6%
|
|
16.8%
|
|
Net revenues
|
|
68,687
|
|
|
58,974
|
|
|
44,256
|
|
|
55.2%
|
|
16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues for the fourth quarter of 2010 reached
US$70.8 million, representing a
year-over-year increase of 56.6% from US$45.2 million and a quarter-over-quarter
increase of 16.8% from US$60.6
million. The year-over-year increase was due to increases in
revenues from all the product lines. The quarter-over-quarter
increase was primarily due to increases in revenues from all the
product lines except for other media.
Revenues from digital frames in airports
Revenues from digital frames in airports for the fourth quarter
of 2010 increased by 57.9% year-over-year and by 4.9%
quarter-over-quarter to US$32.7
million. The year-over-year increase was due to increases in
both the number of time slots sold and the average advertising
revenue per time slot sold (the "ASP"). The quarter-over-quarter
increase was due to an increase in the ASP, which was partially
offset by a decrease in the number of time slots sold. Please refer
to "Summary of Selected Operating Data" below for detailed
definitions of the operating data cited in this press release.
The number of time slots sold for the fourth quarter of 2010
increased by 39.2% year-over-year and decreased by 5.4%
quarter-over-quarter to 13,534 time slots. The year-over-year
increase was due to continued sales efforts and growing acceptance
of AirMedia's digital frames. The quarter-over-quarter decrease was
due to the higher ASP during the quarter, which resulted in fewer
time slots sold when advertisers did not increase their advertising
spend at the same speed as the increase in ASP. AirMedia operated
digital frames in 34 airports in the fourth quarter of 2010, up
from 31 airports at the end of the fourth quarter of 2009 and
remaining stable from the previous quarter of 2010. The number of
time slots available for sale for the fourth quarter of 2010
increased by 15.4% year-over-year and by 1.2% quarter-over-quarter
to 34,950 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 full quarter operation of stand-alone digital frames in
Dalian Zhoushuizi International Airport, which began operations
during the third quarter of 2010. The utilization rate of digital
frames for the fourth quarter of 2010 increased by 6.6 percentage
points year-over-year and decreased by 2.7 percentage points
quarter-over-quarter to 38.7%. The year-over-year increase was
primarily due to the increase in the number of time slots sold,
which was partially offset by the increases in the number of time
slots available for sale. The quarter-over-quarter decrease was due
to the decrease in the number of time slots sold and the increase
in the number of time slots available for sale.
The ASP of digital frames for the fourth quarter of 2010
increased by 13.5% year-over-year and 10.8% quarter-over-quarter to
US$2,413. The year-over-year increase
was primarily due to an increase in the listing prices of digital
frames in some airports in late 2009 and early 2010, lower
discounts offered in the fourth quarter of 2010 than in the same
period one year ago and the change in the mix of time slots sold.
The number of time slots sold in the top three airports, which have
significantly higher ASPs than those sold in other airports,
accounted for a higher percentage of total number of time slots
sold in the fourth quarter of 2010 than in the same period one year
ago. The quarter-over-quarter increase was primarily due to lower
discounts offered in the fourth quarter of 2010 than in the
previous quarter and the change in the mix of time slots sold. The
number of time slots sold in the top three airports accounted for a
higher percentage of total number of time slots sold in the fourth
quarter of 2010 than in the previous quarter.
Revenues from digital TV screens in airports
Revenues from digital TV screens in airports for the fourth
quarter of 2010 increased by 14.5% year-over-year and by 17.7%
quarter-over-quarter to US$8.6
million. The year-over-year increase was due to an increase
in the number of time slots sold, which was partially offset by a
decrease in the ASP of digital TV screens in the airports. The
quarter-over-quarter increase was due to increases in both the ASP
and the number of time slots sold.
The number of time slots sold for the fourth quarter of 2010
increased by 74.9% year-over-year and by 13.4% quarter-over-quarter
to 7,103 time slots. The year-over-year and quarter-over-quarter
increases were primarily due to continued sales efforts. The number
of time slots available for sale for the fourth quarter of 2010
decreased by 6.4% year-over-year to 23,986 time slots, which
remained relatively unchanged from the previous quarter. The
year-over-year decrease was primarily due to the termination of
operation of digital TV screens in certain second-tier and
third-tier airports. The utilization rate for the fourth quarter of
2010 increased by 13.8 percentage points year-over-year and by 3.6
percentage points quarter-over-quarter to 29.6%. The year-over-year
increase was due to the increase in the number of time slots sold
and the decrease in the number of time slots available for sale.
The quarter-over-quarter increase was primarily due to the increase
in the number of time slots sold.
The ASP of digital TV screens in airports for the fourth quarter
of 2010 decreased by 34.5 % year-over-year and increased by 3.8%
quarter-over-quarter to US$1,209. The
year-over-year decrease was primarily due to higher discounts
offered in the fourth quarter of 2010 than in the same period one
year ago. The quarter-over-quarter increase was primarily due to
the change in mix of time slots sold. The number of time slots sold
in the top three airports, which have significantly higher ASPs
than those sold in other airports, accounted for a higher
percentage of total number of time slots sold in the fourth quarter
of 2010 than in the previous quarter.
Revenues from digital TV screens on airplanes
Revenues from digital TV screens on airplanes for the fourth
quarter of 2010 increased by 53.0% year-over-year and increased by
83.2% quarter-over-quarter to US$9.6
million. The year-over-year and quarter-over-quarter
increases were due to increases 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 2010
increased by 46.7% year-over-year and by 57.0% quarter-over-quarter
to 402 time slots. The year-over-year and quarter-over-quarter
increases were due to continued sales efforts. The number of time
slots available for sale for the fourth quarter of 2010 decreased
by 5.3% year-over-year and increased by 2.4% quarter-over-quarter
to 426 time slots. The year-over-year decrease was primarily due to
the termination of our operation of digital TV screens on the
airplanes of China United Airlines and less advertising time on Air
China's airplanes. The quarter-over-quarter increase was primarily
due to the full quarter operation of digital TV screens on Hainan
Airlines' airplanes, which began operations on August 1, 2010. The utilization rate for the
fourth quarter of 2010 increased by 33.5 percentage points
year-over-year and by 32.9 percentage points quarter-over-quarter
to 94.4%. The year-over-year and quarter-over-quarter increases
were primarily due to the increases in the number of time slots
sold.
The ASP of digital TV screens on airplanes for the fourth
quarter of 2010 increased by 4.3% year-over-year and by 16.6%
quarter-over-quarter to US$23,872.
The year-over-year increase in the ASP was primarily due to lower
discounts offered in the fourth quarter of 2010 than in the same
period one year ago and the increase in the listing prices of
digital TV screens on Air China's airplanes. The
quarter-over-quarter increase in the ASP was primarily due to lower
discounts offered in the fourth quarter of 2010 than in the
previous quarter.
Revenues from traditional media in
airports
Revenues from traditional media in airports for the fourth
quarter of 2010 increased by 39.1% year-over-year and by 17.7%
quarter-over-quarter to US$14.2
million. The year-over-year increase was primarily due to an
increase in the number of locations sold. The quarter-over-quarter
increase was due to increases in both the number of locations sold
and the ASP of traditional media in airports.
The number of locations sold for the fourth quarter of 2010
increased by 40.8% year-over-year and by 4.8% quarter-over-quarter
to 504 locations primarily due to continued sales efforts and
growing acceptance of AirMedia's traditional media in airports. The
number of locations available for sale for the fourth quarter of
2010 decreased by 13.0% year-over-year to 752 locations, which
remained relatively stable from the previous quarter. The
year-over-year decrease was primarily because AirMedia terminated
the operation of certain unprofitable traditional media in Beijing
Capital International Airport as well as billboards and painted
advertisements on gate bridges in certain airports in the first
quarter of 2010. The utilization rate of traditional media for the
fourth quarter of 2010 increased by 25.6 percentage points
year-over-year and 2.9 percentage points quarter-over-quarter to
67.0%. The year-over-year increase was due to the increase in the
number of locations sold and the decrease in the number of
locations available for sale. The quarter-over-quarter increase was
due to the increase in the number of locations sold.
The ASP of traditional media in airports for the fourth quarter
of 2010 remained relatively stable from the same period one year
ago and increased by 12.4% quarter-over-quarter to US$28,192. The quarter-over-quarter increase was
primarily due to lower discounts offered in the fourth quarter of
2010 than in the previous quarter and more locations with higher
listing prices sold in the fourth quarter of 2010 than in the
previous quarter.
Revenues from the gas station media
network
Revenues from the gas station media network for the fourth
quarter of 2010 increased by 1,428.4% year-over-year and 38.2%
quarter-over-quarter to US$1.6
million.
As of February 28, 2011, AirMedia
had installed its media, including scrolling light boxes and
billboards, in a total of 2,438 Sinopec gas stations. Of these gas
stations, 213 are located in Beijing, 310 are in Shanghai, 104 are in Shenzhen and the remaining 1,811 are in 53
other cities.
Revenues from other media
Revenues from other media were primarily revenues from Beijing
AirMedia City Outdoor Advertising Co., Ltd., a company AirMedia
acquired in January 2010, which
operates unipole signs and other outdoor media across Beijing. Revenues from other media decreased
slightly quarter-over-quarter to US$2.6
million.
Business tax and other sales tax
Business tax and other sales tax for the fourth quarter of 2010
were US$2.1 million, compared to
US$943,000 in the same period one
year ago and US$1.6 million in the
previous quarter. For purposes of calculating the amount of
business and other sales tax, concession fees are permitted to be
deducted from total revenues under applicable PRC tax law.
Net revenues
Net revenues for the fourth quarter of 2010 reached US$68.7 million, representing a year-over-year
increase of 55.2% from US$44.3
million and a quarter-over-quarter increase of 16.5% from
US$59.0 million.
Cost of Revenues
Cost of revenues for the fourth quarter of 2010 was US$54.3 million, representing a year-over-year
increase of 15.5% from US$47.1
million and a quarter-over-quarter increase of 9.9% from
US$49.4 million. The year-over-year
increase was primarily due to an increase in agency fees paid to
third-party advertising agencies and depreciation cost. The
quarter-over-quarter increase was primarily due to an increase in
concession fees and agency fees. Cost of revenues as a percentage
of net revenues in the fourth quarter of 2010 was 79.1%, compared
to 106.4% in the same period one year ago and 83.8% in the previous
quarter.
AirMedia incurs concession fees to airports for placing and
operating digital frames, digital TV screens, traditional media and
other displays in airports, to airlines for playing programs on
their digital TV screens, to Sinopec for placing outdoor media in
its gas stations, and to other media resources owners for placing
unipole signs and other outdoor media across Beijing.
Concession fees for the fourth quarter of 2010 increased by 1.9%
year-over-year and 7.5% quarter-over-quarter to US$35.8 million. The year-over-year increase was
primarily due to newly signed or renewed concession rights
contracts during the period. The quarter-over-quarter increase,
which was above the Company's earlier concession fee guidance, was
primarily due to unexpectedly strong demand for digital TV screens
on airplanes in the fourth quarter, which resulted in additional
concession fees after the pre-determined advertising time was
oversold, and newly signed or renewed concession rights contracts
during the quarter. Concession fees as a percentage of net revenues
in the fourth quarter of 2010 was 52.1%, decreasing from 79.3% in
the same period one year ago and 56.4% in the previous quarter. The
year-over-year and quarter-over-quarter decreases of concession
fees as a percentage of net revenues were primarily due to the fact
that revenues continued to ramp up while incremental concession
fees grew at a slower pace than revenue growth.
Gross Profit/Loss
Gross profit for the fourth quarter of 2010 was US$14.3 million, improving from gross loss of
US$2.8 million in the same period one
year ago and gross profit of US$9.5
million in the previous quarter.
Gross profit as a percentage of net revenues for the fourth
quarter of 2010 was 20.9%, compared to gross loss as a percentage
of net revenues of negative 6.4% in the same period one year ago
and gross profit as a percentage of net revenues of 16.2% in the
previous quarter. The year-over-year and quarter-over-quarter
improvements in gross profit as a percentage of net revenues were
primarily due to the increases in net revenues.
Operating Expenses
Operating expenses (numbers in US$ 000's except for
percentages):
|
Quarter
Ended December 31,2010
|
% of Net
Revenues
|
|
Quarter
Ended September 30,2010
|
% of Net
Revenues
|
|
Quarter
Ended December 31, 2009
|
% of Net
Revenues
|
|
Y/Y Growth
rate
|
Q/Q Growth
rate
|
|
Selling and marketing
expenses
|
4,866
|
7.1%
|
|
4,578
|
7.8%
|
|
4,121
|
9.3%
|
|
18.1%
|
6.3%
|
|
General and administrative
expenses
|
5,182
|
7.5%
|
|
5,155
|
8.7%
|
|
17,613
|
39.8%
|
|
-70.6%
|
0.5%
|
|
Impairment of intangible
asset
|
1,000
|
1.5%
|
|
-
|
0.0%
|
|
-
|
0.0%
|
|
N/A
|
N/A
|
|
Total operating
expenses
|
11,048
|
16.1%
|
|
9,733
|
16.5%
|
|
21,734
|
49.1%
|
|
-49.2%
|
13.5%
|
|
Adjusted operating
expenses
(non-GAAP)
|
8,944
|
13.0%
|
|
7,111
|
12.1%
|
|
19,370
|
43.8%
|
|
-53.8%
|
25.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses for the fourth quarter of 2010 were
US$11.0 million, representing a
year-over-year decrease of 49.2% from US$21.7 million and a quarter-over-quarter
increase of 13.5% from US$9.7
million.
Total operating expenses for the fourth quarter of 2010 included
share-based compensation expenses of US$1.1
million, compared to share-based compensation expenses of
US$1.8 million in the same period one
year ago and share-based compensation expenses of US$1.7 million in the previous quarter. The
year-over-year and quarter-over-quarter decrease in share-based
compensation expenses was primarily due to the fully vesting on
July 2, 2010 and July 20, 2010, respectively, of stock options
granted on July 2, 2007, and
July 20, 2007, respectively, and the
ending of the vesting period of stock options granted on
November 29, 2007.
Adjusted operating expenses (non-GAAP) for the fourth quarter of
2010, which excluded share-based compensation expenses and
amortization of acquired intangible assets, were US$8.9 million, representing a year-over-year
decrease of 53.8% from US$19.4
million and a quarter-over-quarter increase of 25.8% from
US$7.1 million. Adjusted operating
expenses as a percentage of net revenues (non-GAAP) in the fourth
quarter of 2010 was 13.0%, compared to 43.8% in the same period one
year ago and 12.1% in the previous quarter.
Please refer to the attached table captioned "Reconciliation of
GAAP Operating Expenses to Non-GAAP Adjusted Operating Expenses"
for a reconciliation of operating expenses under U.S. GAAP to
adjusted operating expenses (non-GAAP).
Selling and marketing expenses for the fourth quarter of 2010
were US$4.9 million, including
share-based compensation expenses of US$370,000. This represented a year-over-year
increase of 18.1% from US$4.1 million
and a quarter-over-quarter increase of 6.3% from US$4.6 million. The year-over-year and
quarter-over-quarter increases were primarily due to higher
expenses related to the expansion of the gas station media network
and higher sales commissions for direct sales staff.
General and administrative expenses for the fourth quarter of
2010 were US$5.2 million, including
share-based compensation expenses of US$776,000. This represented a year-over-year
decrease of 70.6% from US$17.6
million and remained relatively unchanged from the previous
quarter. The year-over-year decrease was primarily due to lower
bad-debt provisions.
AirMedia incurred an impairment of intangible asset of
US$1.0 million in the fourth quarter
of 2010, which AirMedia partially wrote down the intangible assets
of an acquired entity, which AirMedia holds 75% equity interest,
due to a decrease in the total projected discounted cash flow from
its operations. The net impact of this impairment loss on the net
income attributable to AirMedia's shareholders for the fourth
quarter of 2010, which included the benefit of its deferred tax
liability and excluded the impact of minority interest, was
US$583,000.
Income/Loss from
Operations
Income from operations for the fourth quarter of 2010 was
US$3.3 million, as compared to loss
from operations of US$24.5 million in
the same period one year ago and loss from operations of
US$189,000 in the previous
quarter.
Adjusted income from operations (non-GAAP) for the fourth
quarter of 2010, which excluded share-based compensation expenses
and amortization of acquired intangible assets, was US$5.4 million, compared to adjusted loss from
operations (non-GAAP) of US$22.2
million in the same period one year ago and adjusted income
from operations (non-GAAP) of US$2.4
million in the previous quarter. Adjusted operating margin
(non-GAAP) for the fourth quarter of 2010, which excluded the
effect of share-based compensation expenses and amortization of
acquired intangible assets, was 7.9%, compared to negative 50.1% in
the same period one year ago and 4.1% in the previous quarter, and
reflected how the business turnaround allows revenue growth to flow
to the bottom-line margin.
Please refer to the attached table captioned "Reconciliation of
GAAP Loss from Operations to Non-GAAP Adjusted Loss from
Operations" for a reconciliation of loss from operations under U.S.
GAAP to adjusted loss from operations (non-GAAP).
Income Tax Benefit
Income tax benefit for the fourth quarter of 2010 was
US$418,000, compared to income tax
benefit of US$4.4 million in the same
period one year ago and income tax benefit of US$357,000 in the previous quarter.
Net Income/Loss Attributable
to AirMedia's Shareholders
Net income attributable to AirMedia's shareholders for the
fourth quarter of 2010 was US$5.1
million, compared to net loss attributable to AirMedia's
shareholders of US$19.4 million in
the same period one year ago and net income attributable to
AirMedia's shareholders of US$1.2
million in the previous quarter. The basic net income
attributable to AirMedia's shareholders per ADS for the fourth
quarter of 2010 was US$0.08, compared
to basic net loss attributable to AirMedia's shareholders per ADS
of US$0.30 in the same period one
year ago and basic net income attributable to AirMedia's
shareholders per ADS of US$0.02 in
the previous quarter. The diluted net income attributable to
AirMedia's shareholders per ADS for the fourth quarter of 2010 was
US$0.07, compared to diluted net loss
attributable to AirMedia's shareholders per ADS of US$0.30 in the same period one year ago and
diluted net income attributable to AirMedia's shareholders per ADS
of US$0.02 in the previous
quarter.
Adjusted net income attributable to AirMedia's shareholders
(non-GAAP) for the fourth quarter of 2010, which is net income
attributable to AirMedia's shareholders excluding share-based
compensation expenses and amortization of acquired intangible
assets, was US$7.2 million, compared
to adjusted net loss attributable to AirMedia's shareholders
(non-GAAP) of US$17.1 million in the
same period one year ago and adjusted net income attributable to
AirMedia's shareholders (non-GAAP) of US$3.8
million in the previous quarter. Basic adjusted net income
attributable to AirMedia's shareholders per ADS (non-GAAP) for the
fourth quarter of 2010 was US$0.11,
compared to basic adjusted net loss attributable to AirMedia's
shareholders per ADS (non-GAAP) of US$0.26 in the same period one year ago and basic
adjusted net income attributable to AirMedia's shareholders per ADS
(non-GAAP) of US$0.06 in the previous
quarter. Diluted adjusted net income attributable to AirMedia's
shareholders per ADS (non-GAAP) for the fourth quarter of 2010 was
US$0.10, compared to diluted adjusted
net loss attributable to AirMedia's shareholders per ADS (non-GAAP)
of US$0.26 in the same period one
year ago and diluted adjusted net income attributable to AirMedia's
shareholders per ADS (non-GAAP) of US$0.06 in the previous quarter.
Please refer to the attached table captioned "Reconciliation Of
GAAP Net Income (Loss) and EPS To Non-GAAP Adjusted Net Income
(Loss) and EPS" for a reconciliation of net income (loss)
attributable to AirMedia's shareholders and basic and diluted net
income (loss) attributable to AirMedia's shareholders per ADS under
U.S. GAAP to adjusted net income (loss) attributable to AirMedia's
shareholders (non-GAAP) and basic and diluted adjusted net income
(loss) attributable to AirMedia's shareholders per ADS
(non-GAAP).
Cash, Restricted Cash and Short-term
Investments
Other than restricted cash of US$6.8
million, cash and short-term investments totaled
US$106.5 million as of December 31, 2010, compared to US$124.3 million as of December 31, 2009, and US$96.5 million as of September 30, 2010. The decrease in cash and
short-term investments from December 31,
2009 was primarily due to the payment of prepaid concession
fees under certain material concession rights contracts. The
increase in cash and short-term investments from September 30, 2010 was primarily due to cash flow
from operations.
Fiscal Year 2010 Financial Results
Revenues
Total revenues by product line (numbers in US$ 000's except for
percentages):
|
|
December
31,
2010
|
% of Total
Revenues
|
|
December
31,
2009
|
% of Total
Revenues
|
|
Y/Y Growth
rate
|
|
Air Travel Media
Network
|
|
222,146
|
94.0%
|
|
152,428
|
99.9%
|
|
45.7%
|
|
Digital frames in
airports
|
|
113,196
|
47.9%
|
|
66,255
|
43.4%
|
|
70.8%
|
|
Digital TV screens in
airports
|
|
28,905
|
12.2%
|
|
37,260
|
24.4%
|
|
-22.4%
|
|
Digital TV screens on
airplanes
|
|
27,564
|
11.7%
|
|
17,082
|
11.2%
|
|
61.4%
|
|
Traditional media in
airports
|
|
48,418
|
20.5%
|
|
27,192
|
17.8%
|
|
78.1%
|
|
Other revenues in air
travel
|
|
4,063
|
1.7%
|
|
4,639
|
3.1%
|
|
-12.4%
|
|
GAS Station Media
Network
|
|
3,664
|
1.5%
|
|
102
|
0.1%
|
|
3,492.2%
|
|
Other Media
|
|
10,650
|
4.5%
|
|
-
|
0.0%
|
|
N/A
|
|
Total revenues
|
|
236,460
|
100.0%
|
|
152,530
|
100.0%
|
|
55.0%
|
|
Net revenues
|
|
230,505
|
|
|
149,428
|
|
|
54.3%
|
|
|
|
|
|
|
|
|
|
|
Total revenues for the fiscal year 2010 were US$236.5 million, representing a year-over-year
increase of 55.0% from US$152.5
million in fiscal year 2009. The year-over-year increase was
primarily due to the increases in revenues from digital frames in
airports, traditional media in airports, digital TV screens on
airplanes, other media and gas station media network.
Revenues from digital frames in
airports
Revenues from digital frames in airports for fiscal year 2010
increased by 70.8% year-over-year to US$113.2 million due to an increase in the number
of time slots sold.
The number of time slots sold for fiscal year 2010 increased by
73.8% year-over-year to 46,887 time slots due to continued sales
efforts and growing acceptance of AirMedia's digital frames. The
number of airports where AirMedia operates digital frames was 34 at
the end of 2010, up from 31 at the end of 2009. The number of time
slots available for sale for fiscal year 2010 increased by 20.9%
year-over-year to 132,340 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 AirMedia's digital frame
network. The utilization rate of digital frames for fiscal year
2010 increased by 10.8 percentage points year-over-year to 35.4%
due to the increase in the number of time slots sold, which was
offset by the increase in the number of time slots available for
sale.
The ASP of digital frames in airports for fiscal year 2010
decreased by 1.7% year-over-year to US$2,414 primarily due to the change in the mix
of the time slots sold. The number of time slots sold in the
airports other than the Beijing
airport, which have significantly lower ASPs than those sold in the
Beijing airport, accounted for a
higher percentage of the total number of time slots sold in 2010
than in 2009 due to sales ramp-up in other airports.
Revenues from digital TV screens in airports
Revenues from digital TV screens in airports for fiscal year
2010 decreased by 22.4% year-over-year to US$28.9 million due to a decrease in the ASP of
digital TV screens in airports, which was partially offset by an
increase in the number of time slots sold.
The number of time slots sold for fiscal year 2010 increased by
9.6% year-over-year to 26,216 time slots primarily due to continued
sales efforts. The number of time slots available for sale for
fiscal year 2010 decreased by 8.1% year-over-year to 94,050 time
slots in 2010 due to the termination of operation of digital TV
screens in certain second-tier and third-tier airports. Utilization
rate of digital TV screens in airports for fiscal year 2010
increased by 4.5 percentage points year-over-year to 27.9%
primarily due to the decrease in the number of time slots available
for sale and the increase in the number of time slots sold.
The ASP of digital TV screens in airports for fiscal year 2010
decreased by 29.2% year-over-year to US$1,103 primarily due to higher discounts
offered in 2010.
Revenues from digital TV screens on airplanes
Revenues from digital TV screens on airplanes for fiscal year
2010 increased by 61.4% year-over-year to US$27.6 million primarily due to increases in
both the number of time slots sold and the ASP of digital TV
screens on airplanes.
The number of time slots sold for fiscal year 2010 increased by
43.6% year-over-year to 1,203 time slots due to continued sales
efforts. The number of time slots available for sale for fiscal
year 2010 decreased by 13.7% to 1,646 time slots primarily due to
the termination of our operation of digital TV screens on the
airplanes of China United Airlines and less advertising time on Air
China's airplanes. Utilization rate for fiscal year 2010 increased
by 29.2 percentage points year-over-year to 73.1% due to the
increase in the number of time slots sold and the decrease in the
number of time slots available for sale.
The ASP of digital TV screens on airplanes for fiscal year 2010
increased by 12.4% year-over-year to US$22,913 due to lower discounts offered and the
increase in the listing prices of digital TV screens on Air China's
airplanes.
Revenues from traditional media in
airports
Revenues from traditional media in airports for fiscal year 2010
increased by 78.1% year-over-year to US$48.4
million. The year-over-year increase was primarily due to
increases in both the number of locations sold and the ASP of
traditional media in airports.
The number of locations sold for fiscal year 2010 increased by
44.2% year-over-year to 1,833 locations. The number of locations
available for fiscal year 2010 decreased by 19.0% year-over-year to
2,887 locations because AirMedia terminated the operation of
certain unprofitable traditional media in Beijing Capital
International Airport as well as billboards and painted
advertisements on gate bridges in certain airports in the first
quarter of 2010. The utilization rate of traditional media for
fiscal year 2010 increased by 27.8 percentage points year-over-year
to 63.5% due to the increase in the number of locations sold and
the decrease in the number of locations available for sale.
The ASP of traditional media in airports for fiscal year 2010
increased by 23.5% year-over-year to US$26,415 due to lower discounts offered in
fiscal year 2010 than in fiscal year 2009 and more locations with
higher listing prices sold in fiscal year 2010 than in fiscal year
2009.
Please refer to "Summary of Selected Operating Data" for more
operating data.
Revenues from the gas station media
network
Revenues from the gas station media network for fiscal year 2010
increased by 3,492.2% year-over-year to US$3.7 million.
Revenues from other media
Revenues from other media were primarily revenues from Beijing
AirMedia City Outdoor Advertising Co., Ltd., a company AirMedia
acquired in January 2010, which
operates unipole signs and other outdoor media across Beijing. Revenues from other media for fiscal
year 2010 were US$10.7 million.
Business tax and other sales tax
Business tax and other sales tax for fiscal year 2010 was
US$6.0 million, representing a
year-over-year increase of 92.0% from US$3.1
million in fiscal year 2009 due to the increase in total
revenues.
Net revenues for fiscal year 2010 were US$230.5 million, representing a year-over-year
increase of 54.3% from US$149.4
million in fiscal year 2009.
Cost of Revenues
Cost of revenues for fiscal year 2010 was US$197.9 million, representing a year-over-year
increase of 34.1% from US$147.5
million in fiscal year 2009 due to increases in concession
fees and other components of cost of revenues. Cost of revenues as
a percentage of net revenues in fiscal year 2010 decreased to 85.9%
from 98.7% in fiscal year 2009.
Concession fees for fiscal year 2010 were US$134.3 million, representing a year-over-year
increase of 22.0% from US$110.1
million in fiscal year 2009 due to additional new concession
contracts signed in 2009. Concession fees as a percentage of net
revenues in fiscal year 2010 decreased to 58.3% from 73.7% in
fiscal year 2009 due to the fact that revenues continued to ramp up
while incremental concession fees grew at a slower pace than
revenue growth.
Gross Profit
Gross profit for fiscal year 2010 was US$32.6 million, representing a year-over-year
increase of 1,627.5% from US$1.9
million in fiscal year 2009.
Gross profit as a percentage of net revenues for fiscal year
2010 was 14.1%, up from 1.3% in fiscal year 2009. The increase in
gross profit as a percentage of net revenues was primarily due to
the increases in net revenues.
Operating Expenses
Operating expenses (numbers in US$ 000's except for
percentages):
|
December
31,
2010
|
% of Net
Revenues
|
|
December
31,
2009
|
% of Net
Revenues
|
|
Y/Y Growth
rate
|
|
Selling and marketing
expenses
|
18,112
|
7.9%
|
|
13,439
|
9.0%
|
|
34.8%
|
|
General and administrative
expenses
|
24,646
|
10.7%
|
|
34,936
|
23.4%
|
|
-29.5%
|
|
Impairment of intangible
asset
|
1,000
|
0.4%
|
|
-
|
0.0%
|
|
N/A
|
|
Total operating
expenses
|
43,758
|
19.0%
|
|
48,375
|
32.4%
|
|
-9.5%
|
|
Adjusted operating
expenses (non-GAAP)
|
32,038
|
13.9%
|
|
39,996
|
26.8%
|
|
-19.9%
|
|
|
|
|
|
|
|
|
|
Total operating expenses for fiscal year 2010 were US$43.8 million, representing a year-over-year
decrease of 9.5% from US$48.4 million
in fiscal year 2009.
Total operating expenses for fiscal year 2010 included
share-based compensation expenses of US$8.0
million, compared to US$5.8
million in fiscal year 2009. Adjusted operating expenses
(non-GAAP) for fiscal year 2010, which excluded share-based
compensation expenses and amortization of acquired intangible
assets, were US$32.0 million,
representing a year-over-year decrease of 19.9% from US$40.0 million in fiscal year 2009. Adjusted
operating expenses as a percentage of net revenues (non-GAAP) in
fiscal year 2010 decreased to 13.9% from 26.8% in fiscal year
2009.
Selling and marketing expenses for fiscal year 2010 were
US$18.1 million, including
US$2.4 million of share-based
compensation expenses. This represented a year-over-year increase
of 34.8% from US$13.4 million in
fiscal year 2009, primarily due to higher expenses related to
expansion of the direct sales force, increased share-based
compensation expenses and higher expenses related to the expansion
of the gas station media network.
General and administrative expenses for fiscal year 2010 were
US$24.6 million, including
$5.5 million of share-based
compensation expenses. This represented a year-over-year decrease
of 29.5% from US$34.9 million in
fiscal year 2009 primarily due to lower bad-debt provisions in
fiscal year 2010 than in fiscal year 2009.
Loss from
Operations
Loss from operations for fiscal year 2010 was US$11.2 million, compared to loss from operations
of US$46.5 million in fiscal year
2009.
Adjusted income from operations (non-GAAP) for fiscal year 2010,
which excluded share-based compensation expenses and amortization
of acquired intangible assets, was US$559,000, compared to adjusted loss from
operations (non-GAAP) of US$38.1
million in fiscal year 2009. Adjusted operating margin
(non-GAAP) for fiscal year 2010, which excluded the effect of
share-based compensation expenses and amortization of acquired
intangible assets, was 0.2%, compared to negative 25.5% in fiscal
year 2009.
Please refer to the attached table for a reconciliation of
income/loss from operations under U.S. GAAP to adjusted income/loss
from operations (non-GAAP).
Income Tax Benefit
Income tax benefit for fiscal year 2010 was US$735,000 compared to income tax benefit of
US$6.0 million in fiscal year
2009.
Net Income/Loss Attributable
to AirMedia's Shareholders
Net loss attributable to AirMedia's shareholders for fiscal year
2010 was US$4.9 million, compared to
net loss attributable to AirMedia's shareholders of US$37.2 million in fiscal year 2009. Basic net
loss attributable to AirMedia's shareholders per ADS for fiscal
year 2010 was US$0.07, compared to
basic net loss attributable to AirMedia's shareholders per ADS of
US$0.57 in fiscal year 2009. Diluted
net loss attributable to AirMedia's shareholders per ADS for fiscal
year 2010 was US$0.07, compared to
diluted net loss attributable to AirMedia's shareholders per ADS of
US$0.57 in fiscal year 2009.
Adjusted net income attributable to AirMedia's shareholders
(non-GAAP) for fiscal year 2010, which is net income attributable
to AirMedia's shareholders excluding share-based compensation
expenses and amortization of acquired intangible assets, was
US$6.8 million, compared to adjusted
net loss attributable to AirMedia's shareholders (non-GAAP) of
US$28.9 million in fiscal year 2009.
Basic and diluted adjusted net income attributable to AirMedia's
shareholders per ADS (non-GAAP) for fiscal year 2010 were both
US$0.10, compared to basic and
diluted adjusted net loss attributable to AirMedia's shareholders
per ADS (non-GAAP) of US$0.44 in
fiscal year 2009.
Please refer to the attached table for a reconciliation of net
loss/income attributable to AirMedia's shareholders and basic and
diluted net loss/income attributable to AirMedia's shareholders per
ADS under U.S. GAAP to adjusted net loss/income attributable to
AirMedia's shareholders and basic and diluted adjusted net
loss/income attributable to AirMedia's shareholders per ADS
(non-GAAP).
Other Recent Developments
AirMedia obtained concession rights through two contracts to
operate advertisements inside and outside 59 gate bridges located
at Terminal 3 of Beijing Capital International Airport from
February 1, 2011 to January 31, 2013, and from March 1, 2011 to February
28, 2013, respectively.
On January 28, 2011, AirMedia
announced the appointment of Ms. Ping
Sun as Chief Financial Officer of AirMedia, effective
February 1, 2011. AirMedia also
announced the resignation of Mr. Xiaoya
Zhang as president, acting chief financial officer, and a
board member of AirMedia's Board of Directors, effective
February 1, 2011.
Starting from January 1, 2011,
AirMedia increased its listing prices of various media including
stand-alone digital frames in all airports by 15%, digital TV
screens on the airplanes of Air China and China Southern Airlines
by 20%, and mega-size LEDs in the Guangzhou airport by 30%.
In 2011, AirMedia intends to continue its special pricing policy
during popular advertising periods throughout the year. During each
of the New Year period, the Spring Festival period, the
Labor Day period, and the
National Holiday period, when there is generally more popular
demand for advertising slots, AirMedia plans to raise the listing
prices of some of its premium media resources by up to 30% for one
month during each period.
In December 2010, AirMedia renewed
its concession rights contract with China Eastern Airlines to
operate digital TV screens on its airplanes on an exclusive basis
for ten years until December 31,
2020.
In December 2010, AirMedia and
China Central Television International Mobile Media Ltd., a
subsidiary of China Central Television ("CCTV"), established a
strategic partnership to operate CCTV Air Channel to broadcast TV
programs to air travelers in China. The partnership agreement has a term of
15 years until November 28, 2025.
CCTV Mobile Media will be responsible for program planning,
production, and broadcasting. AirMedia will operate exclusively the
advertising business of CCTV Air TV Channel. Furthermore, according
to the agreement, all advertising revenue generated under this
partnership will be allocated fully to AirMedia.
In November 2010, AirMedia renewed
its concession rights contract with Beijing Capital Airport
Advertising Co., Ltd. to operate digital frames and digital TV
screens at Terminal 3 of Beijing Capital International Airport for
five years from January 1, 2011 to
December 31, 2015. AirMedia revised
the payment terms to pay semi-annual concession fees half a year in
advance, compared with paying whole year concession fees one year
in advance under the previous contract. In the renewed contract,
AirMedia also obtained a right from the airport authority to adjust
the locations of its stand-alone digital frames at Terminal 3 to
optimize its media value.
On October 12, 2010, AirMedia
obtained the contractual concession rights to install and operate
three mega-size LED screens in Nanjing Lukou International Airport,
from December 1, 2010 to May 31, 2014. The mega-size LED screens were
installed above the domestic security check area in full view of
the airport's domestic travelers. AirMedia started to sell these
mega-size LED screens on February 1,
2011.
Business Outlook
AirMedia currently expects that its total revenues for the first
quarter of 2011 will range from US$58.0
million to US$60.0 million, which do not include the
potential revenues from the newly signed billboards and painted
advertisement on gate bridges at Terminal 3 of Beijing Capital
International Airport, representing a year-over-year increase of
18.9% to 23.0% from the same period in 2010.
AirMedia currently expects that concession fees will be
approximately US$38.1 million in the
first quarter of 2011.The quarter-over-quarter increase from the
fourth quarter of 2010 will be primarily due to the newly signed
billboards and painted advertisement on gate bridges at Terminal 3
of Beijing Capital International Airport.
The above forecast reflects AirMedia's current and preliminary
view and is therefore subject to change. Please refer to the Safe
Harbor Statement below for the factors that could cause actual
results to differ materially from those contained in any
forward-looking statement.
Summary of Selected Operating Data
|
Quarter
Ended
December
31,2010
|
|
Quarter
Ended
September
30,2010
|
|
Quarter
Ended
December
31, 2009
|
|
Y/Y Growth
Rate
|
|
Q/Q Growth
Rate
|
|
Year Ended
December 31,2010
|
|
Year Ended
December 31, 2009
|
|
Y/Y Growth
Rate
|
|
Digital frames in
airports
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of airports in
operation
|
34
|
|
34
|
|
31
|
|
9.7%
|
|
0.0%
|
|
34
|
|
31
|
|
9.7%
|
|
Number of time slots
available for sale (2)
|
34,950
|
|
34,538
|
|
30,290
|
|
15.4%
|
|
1.2%
|
|
132,340
|
|
109,455
|
|
20.9%
|
|
Number of time slots sold
(3)
|
13,534
|
|
14,301
|
|
9,724
|
|
39.2%
|
|
-5.4%
|
|
46,887
|
|
26,983
|
|
73.8%
|
|
Utilization rate
(4)
|
38.7%
|
|
41.4%
|
|
32.1%
|
|
6.6%
|
|
-2.7%
|
|
35.4%
|
|
24.7%
|
|
10.8%
|
|
Average advertising
revenue per time slot sold (5)
|
US$2,413
|
|
US$2,177
|
|
US$2,126
|
|
13.5%
|
|
10.8%
|
|
US$2,414
|
|
US$2,455
|
|
-1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens in
airports
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of airports in
operation
|
38
|
|
38
|
|
40
|
|
-5.0%
|
|
0.0%
|
|
38
|
|
40
|
|
-5.0%
|
|
Number of time slots
available for sale (1)
|
23,986
|
|
24,064
|
|
25,629
|
|
-6.4%
|
|
-0.3%
|
|
94,050
|
|
102,322
|
|
-8.1%
|
|
Number of time slots sold
(3)
|
7,103
|
|
6,264
|
|
4,062
|
|
74.9%
|
|
13.4%
|
|
26,216
|
|
23,911
|
|
9.6%
|
|
Utilization rate
(4)
|
29.6%
|
|
26.0%
|
|
15.8%
|
|
13.8%
|
|
3.6%
|
|
27.9%
|
|
23.4%
|
|
4.5%
|
|
Average advertising
revenue per time slot sold (5)
|
US$1,209
|
|
US$1,165
|
|
US$1,847
|
|
-34.5%
|
|
3.8%
|
|
US$1,103
|
|
US$1,558
|
|
-29.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens on
airplanes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of airlines in
operation
|
9
|
|
9
|
|
9
|
|
0.0%
|
|
0.0%
|
|
9
|
|
9
|
|
0.0%
|
|
Number of time slots
available for sale (1)
|
426
|
|
416
|
|
450
|
|
-5.3%
|
|
2.4%
|
|
1,646
|
|
1,908
|
|
-13.7%
|
|
Number of time slots sold
(3)
|
402
|
|
256
|
|
274
|
|
46.7%
|
|
57.0%
|
|
1,203
|
|
838
|
|
43.6%
|
|
Utilization rate
(4)
|
94.4%
|
|
61.5%
|
|
60.9%
|
|
33.5%
|
|
32.9%
|
|
73.1%
|
|
43.9%
|
|
29.2%
|
|
Average advertising
revenue per time slot sold (5)
|
US$23,872
|
|
US$20,467
|
|
US$22,887
|
|
4.3%
|
|
16.6%
|
|
US$22,913
|
|
US$20,384
|
|
12.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Traditional Media in
airports
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numbers of locations available
for sale (6)
|
752
|
|
750
|
|
864
|
|
-13.0%
|
|
0.3%
|
|
2,887
|
|
3,564
|
|
-19.0%
|
|
Numbers of locations sold
(7)
|
504
|
|
481
|
|
358
|
|
40.8%
|
|
4.8%
|
|
1,833
|
|
1,271
|
|
44.2%
|
|
Utilization rate (8)
|
67.0%
|
|
64.1%
|
|
41.4%
|
|
25.6%
|
|
2.9%
|
|
63.5%
|
|
35.7%
|
|
27.8%
|
|
Average advertising revenue per
location sold (9)
|
US$28,192
|
|
US$25,093
|
|
US$28,532
|
|
-1.2%
|
|
12.4%
|
|
US$26,415
|
|
US$21,394
|
|
23.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 sale for our
digital TV screens in airports during the period presented is
calculated by multiplying the time slots available for sale 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 sale 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 sale 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
available for sale for each of our network airlines.
(2) We define a time slot as a 12-second equivalent advertising
time unit for digital frames in airports, which is shown during
each standard advertising cycle on a weekly basis in a given
airport. Our standard 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 length of time slot and advertising program cycle of some
digital frames in several airports are different from the standard
ones. The number of time slots available for sale 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 for digital TV screens in airports, digital
TV screens on airplanes and digital frames in airports 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 respectively by the
respective number of time slots sold.
(6) We define the number of locations available for sale in
traditional media as the sum of (1) the number of light boxes and
billboards in Beijing,
Shenzhen, Wenzhou and certain
other airports (light boxes and billboards), and (2) the number of
gate bridges in certain airports (gate bridges).
(7) The number of locations sold is defined as the sum of (1)
the number of light boxes and billboards sold and (2) the number of
gate bridges sold. To calculate the number of light boxes and
billboards sold in a given airport, we first calculate the
"utilization rates of light boxes and billboards" in such airport
by dividing the "total value of light boxes and billboards sold" in
such airport by the "total value of light boxes and billboards" in
such airport. The "total value of light box and billboard
sold" in a given airport is calculated as the daily listing prices
of each light boxes and billboards sold multiplied by their
respective number of days sold during the period presented. The
"total value of light boxes and billboards" in a given airport is
calculated as the sum of quarterly listing prices of all the light
boxes and billboards during the period presented. The number of
light boxes and billboards sold in a given airport is then
calculated as the number of light boxes and billboards available
for sale in such airport multiplied by the utilization rates of
light boxes and billboards in such airport. The number of gate
bridges sold in a given airport is counted based on the
contracts.
(8) Utilization rate for traditional media in airports
refers to total locations sold as a percentage of total locations
available for sale during the period presented.
(9) Average advertising revenue per location sold is
calculated by dividing the revenues derived from all the locations
sold by the number of locations sold during the period
presented.
Earnings Conference Call Details
AirMedia will hold a conference call to discuss the fourth
quarter 2010 earnings at 7:00 PM U.S.
Eastern Time on March 7, 2011
(4:00 PM U.S. Pacific Time on
March 7, 2011; 8:00 AM Beijing/Hong
Kong time on March 8, 2011).
AirMedia’s management team will be on the call to discuss financial
results and operational highlights and answer questions.
Conference Call Dial-in Information
U.S.:
|
1 866 713
8395
|
|
U.K.:
|
+44 207 365 8426
|
|
Hong Kong:
|
+852 3002 1672
|
|
International:
|
+1 617 597 5309
|
|
Pass code:
|
AMCN
|
|
|
|
A replay of the call will be available for 1 week between
10:00 p.m. on March 7, 2011 and 10:00
p.m. on March 14, 2011, Eastern
Time.
Replay Dial-in Information
U.S.:
|
+1 888
286 8010
|
|
International:
|
+1 617
801 6888
|
|
Pass code:
|
20243969
|
|
|
|
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 the following non-cash items: (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 the Company believes
are not indicative of its 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 Net Income (Loss) and EPS and Non-GAAP Adjusted Net Income
(Loss) and EPS", "Reconciliation of GAAP Operating Expenses to
Non-GAAP Adjusted Operating Expenses" and "Reconciliation of GAAP
Loss from Operations to Non-GAAP Adjusted Income (Loss) from
Operations" set forth at the end of this release.
About AirMedia Group Inc.
AirMedia Group Inc. (Nasdaq: AMCN) is a leading operator of
out-of-home advertising platforms in China targeting mid-to-high-end consumers.
AirMedia operates the largest digital media network in China dedicated to air travel advertising.
AirMedia operates digital frames in 34 major airports, including
the 15 largest airports in China.
AirMedia also operates digital TV screens in 38 major airports,
including 26 out of the 30 largest airports in China. In addition, AirMedia sells
advertisements on the routes operated by nine airlines, including
the four largest airlines in China. In selected major airports, AirMedia
also operates traditional media platforms, such as billboards and
light boxes, and other digital media, such as mega LED screens.
In addition, AirMedia has obtained exclusive contractual
concession rights until the end of 2014 to develop and operate
outdoor advertising platforms at Sinopec's service stations located
throughout China.
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 Business Outlook section and 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 reports to the U.S. Securities and Exchange
Commission, 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
advertising 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 most of our
revenues from the provision of air travel advertising services, and
any slowdown in the air travel advertising industry in China may materially and adversely affect our
revenues and results of operation; our strategy of expanding our
advertising network by building new air travel media platforms and
expanding into traditional media in airports may not succeed, and
our failure to do so could materially reduce the attractiveness of
our network and harm our business, reputation and results of
operations; if we do not succeed in our expansion into gas station
and other outdoor media advertising, our future results of
operations and growth prospects may be materially and adversely
affected; if our customers reduce their advertising spending or are
unable to pay us in full, in part or at all for a period of time
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; we face risks related to health epidemics,
which could materially and adversely affect air travel and result
in reduced demand for our advertising services or disrupt our
operations; if we are unable to retain existing concession rights
contracts or obtain new concession rights contracts on commercially
advantageous terms that allow us to operate our advertising
platforms, we may be unable to maintain or expand our network
coverage and our business and prospects may be harmed; a
significant portion of our revenues has been derived from 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; our 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.
Investor Contact:
|
|
|
|
Raymond Huang
|
|
Senior Director of Investor
Relations
|
|
AirMedia Group Inc.
|
|
Tel: +86-10-8460-8678
|
|
Email: ir@airmedia.net.cn
|
|
|
|
Caroline Straathof
|
|
IR Inside
|
|
Tel: +31-6-54624301
|
|
Email: info@irinside.com
|
|
|
AirMedia
Group Inc.
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In U.S.
dollars in thousands)
|
|
|
|
|
|
December
31,
2010
|
December
31,
2009
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash
|
|
106,505
|
123,754
|
|
Restricted cash
|
|
6,798
|
1,431
|
|
Short-term
investments
|
|
-
|
586
|
|
Accounts receivable,
net
|
|
62,455
|
40,019
|
|
Prepaid concession
fees
|
|
31,787
|
15,425
|
|
Amount due from related
party
|
|
306
|
5,991
|
|
Other current
assets
|
|
2,713
|
4,069
|
|
Deferred tax assets -
current
|
|
5,050
|
3,693
|
|
Total current
assets
|
|
215,614
|
194,968
|
|
Property and equipment,
net
|
|
71,720
|
78,831
|
|
Long-term
investments
|
|
1,714
|
1,984
|
|
Long-term
deposits
|
|
13,874
|
15,914
|
|
Deferred tax assets -
non-current
|
|
6,032
|
4,726
|
|
Acquired intangible
assets, net
|
|
17,496
|
11,141
|
|
Goodwill
|
|
20,736
|
9,087
|
|
Total assets
|
|
347,186
|
316,651
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
(including accounts payable of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$38,286 and $30,067 as of December 31,
|
|
|
|
|
2010 and December
31, 2009, respectively)
|
|
39,020
|
30,680
|
|
Accrued expenses and other
current liabilities
|
|
|
|
|
(including accrued
expenses and other current liabilities of
|
|
|
|
|
the consolidated
variable interest entities without recourse
|
|
|
|
|
to AirMedia Group
Inc. $7,078 and $3,827 as of December 31,
|
|
|
|
|
2010 and December
31, 2009, respectively)
|
|
12,253
|
7,136
|
|
Deferred revenue
(including deferred revenue of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$12,751 and $8,924 as of December 31
|
|
|
|
|
2010 and December
31, 2009, respectively)
|
|
12,751
|
8,941
|
|
Income tax payable
(including income tax payable of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$911 and $76 as of December 31, 2010 and
|
|
|
|
|
December 31, 2009,
respectively)
|
|
1,263
|
52
|
|
Amounts due to related
parties (including amounts due to
|
|
|
|
|
related parties of
the consolidated variable interest entities
|
|
|
|
|
without recourse to
AirMedia Group Inc. $422 and $408 as
|
|
|
|
|
of December 31, 2010
and December 31, 2009,respectively)
|
|
422
|
408
|
|
Total current
liabilities
|
|
65,709
|
47,217
|
|
Deferred tax liability -
non-current
|
|
4,761
|
3,155
|
|
Total liabilities
|
|
70,470
|
50,372
|
|
Equity
|
|
|
|
|
Ordinary shares
|
|
132
|
132
|
|
Additional paid-in
capital
|
|
277,676
|
268,542
|
|
Statutory
reserves
|
|
7,671
|
6,912
|
|
Accumulated
deficits
|
|
(28,164)
|
(22,488)
|
|
Accumulated other
comprehensive income
|
|
18,353
|
9,944
|
|
Total AirMedia Group Inc.'s
shareholders' equity
|
|
275,668
|
263,042
|
|
Noncontrolling
interests
|
|
1,048
|
3,237
|
|
Total equity
|
|
276,716
|
266,279
|
|
Total liabilities and
equity
|
|
347,186
|
316,651
|
|
|
|
|
|
AirMedia
Group Inc.
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In U.S.
dollars in thousands, except share and ADS related
data)
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
2010
|
September
30,
2010
|
December
31,
2009
|
|
December
31,
2010
|
December
31,
2009
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
70,762
|
60,598
|
45,199
|
|
236,460
|
152,530
|
|
Business tax and other
sales tax
|
|
(2,075)
|
(1,624)
|
(943)
|
|
(5,955)
|
(3,102)
|
|
Net
revenues
|
|
68,687
|
58,974
|
44,256
|
|
230,505
|
149,428
|
|
Cost of
revenues
|
|
54,343
|
49,430
|
47,070
|
|
197,908
|
147,541
|
|
Gross
profit/(loss)
|
|
14,344
|
9,544
|
(2,814)
|
|
32,597
|
1,887
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and
marketing *
|
|
4,866
|
4,578
|
4,121
|
|
18,112
|
13,439
|
|
General and
administrative *
|
|
5,182
|
5,155
|
17,613
|
|
24,646
|
34,936
|
|
Impairment of intangible
asset
|
|
1,000
|
-
|
-
|
|
1,000
|
-
|
|
Total
operating expenses
|
|
11,048
|
9,733
|
21,734
|
|
43,758
|
48,375
|
|
Income
(loss) from operations
|
|
3,296
|
(189)
|
(24,548)
|
|
(11,161)
|
(46,488)
|
|
Interest income
|
|
188
|
132
|
521
|
|
694
|
2,025
|
|
Gain on remeasurement of
fair value of previously held investment
(net)
|
|
-
|
-
|
-
|
|
919
|
-
|
|
Other income,
net
|
|
328
|
299
|
283
|
|
940
|
1,239
|
|
Income
(loss) before income taxes
|
|
3,812
|
242
|
(23,744)
|
|
(8,608)
|
(43,224)
|
|
Income tax
benefits
|
|
418
|
357
|
4,380
|
|
735
|
6,032
|
|
Net income (loss) before net
income of equity method investments
|
|
4,230
|
599
|
(19,364)
|
|
(7,873)
|
(37,192)
|
|
Net income of equity
method investments
|
|
31
|
57
|
32
|
|
290
|
164
|
|
Net income
(loss)
|
|
4,261
|
656
|
(19,332)
|
|
(7,583)
|
(37,028)
|
|
Less: Net income (loss)
attributable to noncontrolling interests
|
|
(849)
|
(556)
|
84
|
|
(2,666)
|
211
|
|
Net income
(loss) attributable to AirMedia Group Inc.'s
shareholders
|
|
5,110
|
1,212
|
(19,416)
|
|
(4,917)
|
(37,239)
|
|
Net income (loss) attributable
to AirMedia Group Inc.'s shareholders per ordinary share
|
|
|
|
|
|
|
|
|
Basic
|
|
0.04
|
0.01
|
(0.15)
|
|
(0.04)
|
(0.28)
|
|
Diluted
|
|
0.04
|
0.01
|
(0.15)
|
|
(0.04)
|
(0.28)
|
|
Net income (loss) attributable
to AirMedia Group Inc.'s shareholders per ADS
|
|
|
|
|
|
|
|
|
Basic
|
|
0.08
|
0.02
|
(0.30)
|
|
(0.07)
|
(0.57)
|
|
Diluted
|
|
0.07
|
0.02
|
(0.30)
|
|
(0.07)
|
(0.57)
|
|
Weighted average ordinary shares
outstanding used in computing net income (loss) per ordinary
share - basic
|
|
131,502,583
|
131,178,183
|
131,107,092
|
|
131,252,115
|
131,320,730
|
|
Weighted average
ordinary shares
outstanding used in computing net
income (loss) per ordinary share - diluted
|
|
137,419,791
|
132,105,497
|
131,107,092
|
|
131,252,115
|
131,320,730
|
|
* Share-based compensation
charges included are as follow:
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
370
|
613
|
523
|
|
2,424
|
1,540
|
|
General and
administrative
|
|
776
|
1,067
|
1,271
|
|
5,547
|
4,226
|
|
|
|
|
|
|
|
|
|
AirMedia
Group Inc.
|
|
RECONCILIATION OF GAAP NET
INCOME (LOSS) AND EPS TO NON-GAAP ADJUSTED NET INCOME (LOSS) AND
EPS
|
|
(In U.S.
dollars in thousands, except share and ADS related
data)
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
2010
|
September
30,
2010
|
December
31,
2009
|
|
December
31,
2010
|
December
31,
2009
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to AirMedia Group Inc.'s shareholders (GAAP)
|
|
5,110
|
1,212
|
(19,416)
|
|
(4,917)
|
(37,239)
|
|
Amortization of acquired
intangible assets
|
|
958
|
942
|
570
|
|
3,749
|
2,613
|
|
Share-based
compensation
|
|
1,146
|
1,680
|
1,794
|
|
7,971
|
5,766
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss)
attributable to AirMedia Group Inc.'s shareholders
(non-GAAP)
|
|
7,214
|
3,834
|
(17,052)
|
|
6,803
|
(28,860)
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss)
attributable to AirMedia Group Inc.'s shareholders per share
(non-GAAP)
|
|
|
|
|
|
|
|
|
Basic
|
|
0.05
|
0.03
|
(0.13)
|
|
0.05
|
(0.22)
|
|
Diluted
|
|
0.05
|
0.03
|
(0.13)
|
|
0.05
|
(0.22)
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss)
attributable to AirMedia Group Inc.'s shareholders per ADS
(non-GAAP)
|
|
|
|
|
|
|
|
|
Basic
|
|
0.11
|
0.06
|
(0.26)
|
|
0.10
|
(0.44)
|
|
Diluted
|
|
0.10
|
0.06
|
(0.26)
|
|
0.10
|
(0.44)
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing
adjusted basic net income (loss) attributable to AirMedia Group
Inc.'s shareholders per share (non-GAAP)
|
|
131,502,583
|
131,178,183
|
131,107,092
|
|
131,252,115
|
131,320,730
|
|
Shares used in computing
adjusted diluted net income (loss) attributable to AirMedia Group
Inc.'s shareholders per share (non-GAAP)
|
|
137,419,791
|
132,105,497
|
131,107,092
|
|
132,963,246
|
131,320,730
|
|
|
|
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 ADSs used in
GAAP basic and diluted EPS calculation, where the number of shares
and ADSs is adjusted for dilution due to the share-based
compensation plan.
|
|
|
|
|
|
|
|
|
|
AirMedia
Group Inc.
|
|
RECONCILIATION OF GAAP OPERATING
EXPENSES TO NON-GAAP ADJUSTED OPERATING EXPENSES
|
|
(In U.S.
dollars in thousands, except for percentages)
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
2010
|
September
30,
2010
|
December
31,
2009
|
|
December
31,
2010
|
December
31,
2009
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
(GAAP)
|
|
11,048
|
9,733
|
21,734
|
|
43,758
|
48,375
|
|
Amortization of acquired
intangible assets
|
|
958
|
942
|
570
|
|
3,749
|
2,613
|
|
Share-based
compensation
|
|
1,146
|
1,680
|
1,794
|
|
7,971
|
5,766
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating expenses
(non-GAAP)
|
|
8,944
|
7,111
|
19,370
|
|
32,038
|
39,996
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating expenses as a
percentage of net revenues (non-GAAP)
|
|
13.0%
|
12.1%
|
43.8%
|
|
13.9%
|
26.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AirMedia
Group Inc.
|
|
RECONCILIATION OF GAAP INCOME
(LOSS) FROM OPERATIONS TO NON-GAAP ADJUSTED INCOME (LOSS) FROM
OPERATIONS
|
|
(In U.S.
dollars in thousands, except for percentages)
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
2010
|
September
30,
2010
|
December
31,
2009
|
|
December
31,
2010
|
December
31,
2009
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
3,296
|
(189)
|
(24,548)
|
|
(11,161)
|
(46,488)
|
|
Amortization of acquired
intangible assets
|
|
958
|
942
|
570
|
|
3,749
|
2,613
|
|
Share-based
compensation
|
|
1,146
|
1,680
|
1,794
|
|
7,971
|
5,766
|
|
|
|
|
|
|
|
|
|
|
Adjusted income (loss) from
operations (non-GAAP)
|
|
5,400
|
2,433
|
(22,184)
|
|
559
|
(38,109)
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating margin
(non-GAAP)
|
|
7.9%
|
4.1%
|
-50.1%
|
|
0.2%
|
-25.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE AirMedia Group Inc.