BEIJING, Aug. 14, 2012 /PRNewswire-Asia/ -- 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 second
quarter ended June 30, 2012.
Second Quarter 2012 Financial Highlights
- Total revenues increased by 16.4% year-over-year to
US$68.1 million.
- Net loss attributable to AirMedia's shareholders was
US$1.5 million. Basic and diluted net
loss attributable to AirMedia's shareholders per American
Depositary Share ("ADS") were both US$0.02.
- Adjusted net income attributable to AirMedia's shareholders
(non-GAAP), which is net loss attributable to AirMedia's
shareholders excluding share-based compensation expenses,
amortization of acquired intangible assets, impairment of goodwill
and impairment of intangible assets, was US$339,000. Adjusted basic net income
attributable to AirMedia's shareholders per ADS (non-GAAP), which
is adjusted net income attributable to Airmedia's shareholders
(non-GAAP) divided by the number of ADSs outstanding, was
US$0.01. Adjusted diluted net income
attributable to AirMedia's shareholders per ADS (non-GAAP), which
is adjusted net income attributable to Airmedia's shareholders
(non-GAAP) divided by the number of ADSs as adjusted for dilution
after taking into account grants under the share-based compensation
plan, was US$0.01.
"The calculated spending of advertisers in the second quarter
has been consistent with their perceptions of the macro-economic
trend. However, AirMedia's advertising platform has demonstrated
sustained attractiveness to advertisers and we expect the same
seasonality in the second half of 2012 which typically includes a
strong revenue performance. In addition, we expect the nationwide
mega-size LED screens we are building to become one of the growth
drivers for the Company in the coming years," commented
Herman Guo, chairman and chief
executive officer of AirMedia.
"Despite the unfavorable market conditions, we were able to
achieve non-GAAP adjusted net income of US$339,000, which is net loss attributable to
AirMedia's shareholders excluding share-based compensation
expenses, amortization of acquired intangible assets, impairment of
goodwill and impairment of intangible assets. Our efforts to reduce
cost of revenue have begun to pay off," Ping Sun, AirMedia's chief financial officer,
commented.
Separately AirMedia also announced today the appointment of
Henry Ho as the Company's chief
financial officer, effective September 1,
2012.
Second Quarter 2012 Financial
Results
Revenues
Total revenues by product line (numbers in US$ 000's except for percentages):
|
|
Quarter Ended June
30,2012
|
% of Total
Revenues
|
|
Quarter Ended March
31,2012
|
% of Total
Revenues
|
|
Quarter Ended June
30,2011
|
% of Total
Revenues
|
|
Y/Y Growth
rate
|
|
Q/Q Growth
rate
|
Air Travel Media
Network
|
|
63,046
|
92.5%
|
|
62,299
|
92.2%
|
|
54,669
|
93.4%
|
|
15.3%
|
|
1.2%
|
Digital frames in
airports
|
|
29,652
|
43.5%
|
|
31,927
|
47.3%
|
|
27,364
|
46.7%
|
|
8.4%
|
|
-7.1%
|
Digital TV
screens in airports
|
|
3,414
|
5.0%
|
|
2,169
|
3.2%
|
|
3,911
|
6.7%
|
|
-12.7%
|
|
57.4%
|
Digital TV
screens on airplanes
|
|
7,143
|
10.5%
|
|
5,017
|
7.4%
|
|
5,608
|
9.6%
|
|
27.4%
|
|
42.4%
|
Traditional media
in airports
|
|
20,764
|
30.5%
|
|
21,799
|
32.3%
|
|
16,056
|
27.4%
|
|
29.3%
|
|
-4.7%
|
Other revenues in
air travel
|
|
2,073
|
3.0%
|
|
1,387
|
2.0%
|
|
1,730
|
3.0%
|
|
19.8%
|
|
49.5%
|
Gas Station Media
Network
|
|
2,278
|
3.4%
|
|
3,290
|
4.9%
|
|
1,373
|
2.3%
|
|
65.9%
|
|
-30.8%
|
Other
Media
|
|
2,809
|
4.1%
|
|
1,955
|
2.9%
|
|
2,488
|
4.3%
|
|
12.9%
|
|
43.7%
|
Total
revenues
|
|
68,133
|
100.0%
|
|
67,544
|
100.0%
|
|
58,530
|
100.0%
|
|
16.4%
|
|
0.9%
|
Net revenues
|
|
66,583
|
|
|
66,144
|
|
|
57,014
|
|
|
16.8%
|
|
0.7%
|
Total revenues for the second quarter of 2012 reached
US$68.1 million, representing a
year-over-year increase of 16.4% from US$58.5 million and a quarter-over-quarter
increase of 0.9% from US$67.5
million. The year-over-year increase was primarily due to
increases in revenues from most of the Company's product lines
other than digital TV screens in airports. The quarter-over-quarter
increase was primarily due to increases in revenues from digital TV
screens on airplanes, digital TV screens in airports as well as
other media and other revenues in air travel, partially offset by
decreases in revenues from digital frames in airports, traditional
media in airports and the gas station media network.
Revenues from digital frames in airports for the second quarter
of 2012 increased by 8.4% year-over-year and decreased by 7.1%
quarter-over-quarter to US$29.7
million. The year-over-year increase was due to the
Company's continued sales efforts and advertisers' continually
growing acceptance of AirMedia's digital frames. The
quarter-over-quarter decrease was primarily due to advertisers'
continued caution in advertising spending and a shift in
advertisers' budget allocation from our digital frames in airports
to our other product lines.
Revenues from digital TV screens in airports
Revenues from digital TV screens in airports for the second
quarter of 2012 decreased by 12.7% year-over-year and increased by
57.4% quarter-over-quarter to US$3.4
million. The year-over-year decrease was primarily due to a
drop in demand from advertisers. The quarter-over-quarter increase
was primarily due to a sales promotion campaign in which we offered
higher discounts for digital TV screens in airports. AirMedia plans
to continue searching for ways to raise advertisers' interest to
utilize this product line.
Revenues from digital TV screens on airplanes
Revenues from digital TV screens on airplanes for the second
quarter of 2012 increased by 27.4% year-over-year and by 42.4%
quarter-over-quarter to US$7.1
million primarily due to the Company's continued sales
efforts.
Revenues from traditional media in
airports
Revenues from traditional media in airports for the second
quarter of 2012 increased by 29.3% year-over-year and decreased by
4.7% quarter-over-quarter to US$20.8
million. The year-over-year increase was primarily due to
the Company's continued sales efforts and advertisers' continually
growing acceptance of AirMedia's traditional media in airports. The
quarter-over-quarter decrease was primarily due to the reduced
availability of some prime locations as a result of media
format upgrade.
Revenues from the gas station media
network
Revenues from the gas station media network for the second
quarter of 2012 increased by 65.9% year-over-year and decreased by
30.8% quarter-over-quarter to US$2.3
million. The year-over-year increase was primarily due to
the Company's continued sales efforts and advertisers' continually
growing acceptance of AirMedia's gas station media network. The
quarter-over-quarter decrease was primarily due to the fact that
when advertisers have limited advertising budgets, they tend to cut
budgets on non-core advertising media such as gas station
advertising.
Revenues from other media
Revenues from other media were primarily revenues from unipole
signs and other outdoors media. Revenues from other media for the
second quarter of 2012 increased by 12.9% year-over-year and
increased by 43.7% quarter-over-quarter to US$2.8 million. The year-over-year and
quarter-over-quarter increases were primarily due to a rebound in
real estate sales which led to an increase in associated
advertising in the second quarter of 2012.
Business tax and other sales tax
Business tax and other sales tax for the second quarter of 2012
were US$1.6 million, compared to
US$1.5 million in the same period one
year ago and US$1.4 million in the
previous quarter. For purposes of calculating the amount of
business and other sales tax, concession fees are deducted from
total revenues, as permitted under applicable PRC tax law.
Net revenues
Net revenues for the second quarter of 2012 reached US$66.6 million, representing a year-over-year
increase of 16.8% from US$57.0
million and a quarter-over-quarter increase of 0.7% from
US$66.1 million.
Cost of Revenues
Cost of revenues for the second quarter of 2012 was US$59.8 million, representing a year-over-year
decrease of 1.6% from US$60.8 million
and a quarter-over-quarter decrease of 4.8% from US$62.8 million. The year-over-year and
quarter-over-quarter decreases were primarily due to lower agency
fees for third-party advertising agencies, which were partially
offset by higher concession fees. Cost of revenues as a percentage
of net revenues in the second quarter of 2012 was 89.9%, down from
106.6% in the same period one year ago and down from 95.0% 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 outdoors media in
its gas stations and to other media resources owners for placing
unipole signs and other outdoors media.
Concession fees for the second quarter of 2012 increased by
13.8% year-over-year and by 3.4% quarter-over-quarter to
US$44.9 million. The year-over-year
and quarter-over-quarter increases were primarily due to newly
signed or renewed concession rights contracts during the period.
Concession fees as a percentage of net revenues in the second
quarter of 2012 was 67.5%, decreasing from 69.3% in the same period
one year ago and increasing from 65.7% in the previous quarter. The
year-over-year decrease of concession fees as a percentage of net
revenues was primarily due to the fact that net revenues grew at a
faster pace than concession fees. The quarter-over-quarter increase
of concession fees as a percentage of net revenues was primarily
due to the fact concession fees grew at a faster pace than net
revenues.
Gross Profit
Gross profit for the second quarter of 2012 was US$6.8 million, compared to gross loss of
US$3.8 million in the same period one
year ago and gross profit of US$3.3
million in the previous quarter.
Gross profit as a percentage of net revenues for the second
quarter of 2012 was 10.1%, compared to gross loss as a percentage
of net revenues of negative 6.6% in the same period one year ago
and gross profit as a percentage of net revenues of 5.0% in the
previous quarter. The year-over-year and quarter-over-quarter
increases in gross profit as a percentage of net revenues were due
to increased net revenues and reduced cost of revenues.
Operating Expenses
Operating expenses (numbers in US$
000's except for percentages):
|
Quarter Ended June
30,2012
|
% of Net
Revenues
|
|
Quarter Ended March
31,2012
|
% of Net
Revenues
|
|
Quarter Ended June
30,2011
|
% of Net
Revenues
|
|
Y/Y Growth
rate
|
Q/Q Growth
rate
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
4,162
|
6.3%
|
|
4,083
|
6.2%
|
|
4,536
|
8.0%
|
|
-8.2%
|
1.9%
|
General and
administrative expenses
|
5,056
|
7.6%
|
|
6,128
|
9.3%
|
|
4,343
|
7.6%
|
|
16.4%
|
-17.5%
|
Impairment of intangible
assets
|
-
|
0.0%
|
|
-
|
0.0%
|
|
656
|
1.2%
|
|
-100.0%
|
NA
|
Total operating
expenses
|
9,218
|
13.9%
|
|
10,211
|
15.5%
|
|
9,535
|
16.8%
|
|
-3.3%
|
-9.7%
|
Adjusted operating
expenses
(non-GAAP)
|
7,409
|
11.1%
|
|
8,314
|
12.6%
|
|
6,988
|
12.3%
|
|
6.0%
|
-10.9%
|
Total operating expenses for the second quarter of 2012 were
US$9.2 million, representing a
year-over-year decrease of 3.3% from US$9.5
million and a quarter-over-quarter decrease of 9.7% from
US$10.2 million.
Share-based compensation expenses included in the total
operating expenses for the second quarter of 2012 were US$993,000, compared to share-based compensation
expenses of US$938,000 in the same
period one year ago and share-based compensation expenses of
US$992,000 in the previous
quarter.
Adjusted operating expenses (non-GAAP) for the second quarter of
2012, which excluded share-based compensation expenses,
amortization of acquired intangible assets, impairment of goodwill,
and impairment of intangible assets, were US$7.4 million, representing a year-over-year
increase of 6.0% from US$7.0 million
and a quarter-over-quarter decrease of 10.9% from US$8.3 million. Adjusted operating expenses as a
percentage of net revenues (non-GAAP) in the second quarter of
2012, which is calculated by dividing adjusted operating expenses
(non-GAAP) by net revenues, was 11.1%, compared to 12.3% in the
same period one year ago and 12.6% 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 second quarter of 2012
were US$4.2 million, including
share-based compensation expenses of US$297,000. This represented a year-over-year
decrease of 8.2% from US$4.5 million
and a quarter-over-quarter increase of 1.9% from US$4.1 million. The year-over-year decrease was
primarily due to lower expenses related to the expansion of the gas
station media network, which were partially offset by higher
marketing and promotion expenses. The quarter-over-quarter increase
was primarily due to higher marketing expenses.
General and administrative expenses for the second quarter of
2012 were US$5.1 million, including
share-based compensation expenses of US$696,000. This represented a year-over-year
increase of 16.4% from US$4.3 million
and a quarter-over-quarter decrease of 17.5% from US$6.1 million. The year-over-year increase was
primarily due to higher bad-debt provisions and higher office
expenses and utilities expenses. The quarter-over-quarter decrease
was primarily due to lower bad-debt provisions, lower salary
expenses and lower professional fees.
Loss from Operations
Loss from operations for the second quarter of 2012 was
US$2.5 million, compared to loss from
operations of US$13.3 million in the
same period one year ago and loss from operations of US$6.9 million in the previous quarter. Loss from
operations as a percentage of net revenues for the second quarter
of 2012 was negative 3.7%, compared to negative 23.3% in the same
period one year ago and negative 10.4% in the previous quarter.
Adjusted loss from operations (non-GAAP) for the second quarter
of 2012, which excluded share-based compensation expenses,
amortization of acquired intangible assets, and impairment of
intangible assets, was US$657,000,
compared to adjusted loss from operations (non-GAAP) of
US$10.8 million in the same period
one year ago and adjusted loss from operations (non-GAAP) of
US$5.0 million in the previous
quarter. Adjusted operating margin (non-GAAP) for the second
quarter of 2012, which excluded the effect of share-based
compensation expenses, amortization of acquired intangible assets,
impairment of goodwill, and impairment of intangible assets, was
negative 1.0%, compared to negative 18.9% in the same period one
year ago and negative 7.5% in the previous quarter.
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 Benefits/Expenses
Income tax benefits for the second quarter of 2012 were
US$664,000, compared to income tax
benefits of US$2.5 million in the
same period one year ago and income tax expenses of US$1.9 million in the previous quarter.
Net Loss/Income Attributable
to AirMedia's Shareholders
Net loss attributable to AirMedia's shareholders for the second
quarter of 2012 was US$1.5 million,
compared to net loss attributable to AirMedia's shareholders of
US$8.6 million in the same period one
year ago and net loss attributable to AirMedia's shareholders of
US$7.3 million in the previous
quarter. The basic net loss attributable to AirMedia's shareholders
per ADS for the second quarter of 2012 was US$0.02, compared to basic net loss attributable
to AirMedia's shareholders per ADS of US$0.13 in the same period one year ago and basic
net loss attributable to AirMedia's shareholders per ADS of
US$0.12 in the previous quarter. The
diluted net loss attributable to AirMedia's shareholders per ADS
for the second quarter of 2012 was US$0.02, compared to diluted net loss
attributable to AirMedia's shareholders per ADS of US$0.13 in the same period one year ago and
diluted net loss attributable to AirMedia's shareholders per ADS of
US$0.12 in the previous quarter.
Adjusted net income attributable to AirMedia's shareholders
(non-GAAP) for the second quarter of 2012, which is net loss
attributable to AirMedia's shareholders excluding share-based
compensation expenses, amortization of acquired intangible assets,
impairment of goodwill, and impairment of intangible assets, was
US$339,000, compared to adjusted net
loss attributable to AirMedia's shareholders (non-GAAP) of
US$6.1 million in the same period one
year ago and adjusted net loss attributable to AirMedia's
shareholders (non-GAAP) of US$5.4
million in the previous quarter. Adjusted basic net income
attributable to AirMedia's shareholders per ADS (non-GAAP) for the
second quarter of 2012, which is adjusted net income attributable
to Airmedia's shareholders (non-GAAP) divided by the number of ADSs
outstanding, was US$0.01, compared to
adjusted basic net loss attributable to AirMedia's shareholders per
ADS (non-GAAP) of US$0.09 in the same
period one year ago and adjusted basic net loss attributable to
AirMedia's shareholders per ADS (non-GAAP) of US$0.09 in the previous quarter. Adjusted diluted
net income attributable to AirMedia's shareholders per ADS
(non-GAAP) for the second quarter of 2012, which is adjusted net
income attributable to Airmedia's shareholders (non-GAAP) divided
by the number of ADSs as adjusted for dilution after taking into
account grants under the share-based compensation plan, was
US$0.01, compared to adjusted diluted
net loss attributable to AirMedia's shareholders per ADS (non-GAAP)
of US$0.09 in the same period one
year ago and adjusted diluted net loss attributable to AirMedia's
shareholders per ADS (non-GAAP) of US$0.09 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 adjusted basic and diluted net income
(loss) attributable to AirMedia's shareholders per ADS
(non-GAAP).
Cash and Restricted
Cash
Other than restricted cash of US$8.2
million, cash totaled US$114.0
million as of June 30, 2012,
compared to US$112.7 million as of
December 31, 2011. The increase in
cash from December 31, 2011 was
primarily due to positive cash flow from operations.
ADS Repurchases
On March 21, 2011, AirMedia's
board of directors authorized AirMedia to repurchase up to
US$20 million of its own outstanding
ADSs within two years from March 21,
2011. As of August 12, 2012,
AirMedia had repurchased an aggregate of 3,954,189 ADSs
on the open market for a total consideration of US$12.4 million.
Other Recent Developments
On July 31, 2012, AirMedia
commenced operation of a mega-size LED screen in the departure
passage of the newly opened Terminal 3 of Xi'an Xianyang
International Airport in Shaanxi
province ("Xi'an Airport").
On July 31, 2012, AirMedia
commenced operations of 43 sets of newly-built digital TV screens
and TV-attached digital frames at Terminal 1 and 78 sets of
newly-built digital TV screens and TV-attached digital frames at
Terminal 2 of Shanghai Pudong International Airport ("Pudong
Airport"), which significantly increased AirMedia's media presence
in Pudong Airport. Plus the original 95 sets of digital TV screens
at Terminal 1, AirMedia currently has 216 digital TV screens and
121 TV-attached digital frames in Pudong Airport. In addition,
AirMedia also has 62 stand-alone digital frames in Pudong
Airport.
On June 29, 2012, AirMedia
commenced operations of 15 stand-alone digital frames in Sanya
Fenghuang International Airport in Hainan province.
On June 1, 2012, AirMedia
commenced operations of 17 stand-alone digital frames and 18 sets
of multi-screen digital frames which combine three screens as one
set in Xi'an Airport.
On May 31, 2012, AirMedia obtained
concession rights contract to install and operate a mega-size LED
screen and three light boxes above the security check areas in
Jinan Yaoqiang International Airport in Shandong province from August1, 2012 to
July 31, 2017.
Business Outlook
AirMedia currently expects its total revenues for the third
quarter of 2012 to range from US$71.0
million to US$73.0 million, representing a year-over-year
increase of 1.3% to 4.1% from the same period in 2011.
AirMedia currently expects its concession fees to be
approximately US$45.0 million in the
third quarter of 2012. The quarter-over-quarter increase from the
second quarter of 2012 will be primarily due to the concession fee
commitments under concession rights contracts that were newly
signed or renewed or are expected to be signed or renewed.
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 June
30,2012
|
|
Quarter Ended March
31,2012
|
|
Quarter Ended June
30,2011
|
|
Y/Y Growth
Rate
|
|
Q/Q Growth
Rate
|
Digital frames in
airports
|
|
|
|
|
|
|
|
|
|
Number of
airports in operation
|
33
|
|
34
|
|
35
|
|
-5.7%
|
|
-2.9%
|
Number of time
slots available for sale (2)
|
33,012
|
|
32,997
|
|
34,398
|
|
-4.0%
|
|
0.0%
|
Number of time
slots sold (3)
|
9,535
|
|
12,448
|
|
10,422
|
|
-8.5%
|
|
-23.4%
|
Utilization rate
(4)
|
28.9%
|
|
37.7%
|
|
30.3%
|
|
-4.6%
|
|
-23.3%
|
Average
advertising revenue per time slot sold (5)
|
US$3,110
|
|
US$2,565
|
|
US$2,626
|
|
18.4%
|
|
21.2%
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens in
airports
|
|
|
|
|
|
|
|
|
|
Number of
airports in operation
|
35
|
|
37
|
|
37
|
|
-5.4%
|
|
-5.4%
|
Number of time
slots available for sale (1)
|
16,789
|
|
17,683
|
|
18,446
|
|
-9.0%
|
|
-5.1%
|
Number of time
slots sold (3)
|
6,174
|
|
1,663
|
|
2,438
|
|
153.2%
|
|
271.3%
|
Utilization rate
(4)
|
36.8%
|
|
9.4%
|
|
13.2%
|
|
178.8%
|
|
291.5%
|
Average
advertising revenue per time slot sold (5)
|
US$553
|
|
US$1,304
|
|
US$1,604
|
|
-65.5%
|
|
-57.6%
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens on
airplanes
|
|
|
|
|
|
|
|
|
|
Number of
airlines in operation
|
9
|
|
9
|
|
8
|
|
12.5%
|
|
0.0%
|
Number of time
slots available for sale (1)
|
444
|
|
444
|
|
414
|
|
7.2%
|
|
0.0%
|
Number of time
slots sold (3)
|
204
|
|
175
|
|
192
|
|
6.3%
|
|
16.6%
|
Utilization rate
(4)
|
45.9%
|
|
39.4%
|
|
46.4%
|
|
-1.1%
|
|
16.5%
|
Average
advertising revenue per time slot sold (5)
|
US$35,015
|
|
US$28,669
|
|
US$29,208
|
|
19.9%
|
|
22.1%
|
|
|
|
|
|
|
|
|
|
|
Traditional Media in
airports
|
|
|
|
|
|
|
|
|
|
Numbers of locations
available for sale (6)
|
930
|
|
914
|
|
892
|
|
4.3%
|
|
1.8%
|
Numbers of locations
sold (7)
|
587
|
|
680
|
|
635
|
|
-7.6%
|
|
-13.7%
|
Utilization rate
(8)
|
63.1%
|
|
74.4%
|
|
71.2%
|
|
-11.4%
|
|
-15.2%
|
Average advertising
revenue per location sold (9)
|
US$35,373
|
|
US$32,057
|
|
US$25,285
|
|
39.9%
|
|
10.3%
|
Notes:
(1) A time slot is defined 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. AirMedia's airport advertising
programs are shown repeatedly on a daily basis during a given week
in one-hour cycles and each hour of programming includes 20 minutes
of advertising content, which allows the Company to sell a maximum
of 40 time slots per week. The number of time slots available for
sale for the 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 AirMedia had operations in each airport and then
calculating the sum of all the time slots available for sale for
each of the Company's network airports. The length of AirMedia's
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
AirMedia had operations on each airline and then calculating the
sum of all the time slots available for sale for each of its
network airlines.
(2) A time slot is defined as a 12-second equivalent advertising
time for digital frames in airports, which is shown during each
standard advertising cycle on a weekly basis in a given airport.
AirMedia's standard airport advertising programs are shown
repeatedly on a daily basis during a given week in 10-minute
cycles, which allows the Company 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 the
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 the Company
had operations in each airport and then calculating the sum of all
the time slots available for each of its 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 are calculated by dividing each of the Company's
revenues derived from digital TV screens in airports, digital TV
screens on airplanes and digital frames in airports by the
respective number of time slots sold.
(6) The number of locations available for sale in traditional
media is defined 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, the "utilization rates of
light boxes and billboards" in such airport is first calculated 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 in such airport 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 in such airport 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 numbers in the relevant 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 second
quarter 2012 earnings at 8:00 PM U.S.
Eastern Time on August 14, 2012
(5:00 PM U.S. Pacific Time on
August 14, 2012; 8:00 AM Beijing/Hong
Kong time on August 15, 2012).
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.: +1 866 519 4004
U.K.: 08082346646
Hong Kong: +852 2475 0994
International: +1 718 354 1231
Pass code: AMCN
A replay of the call will be available for 1 week between
11:00 p.m. on August 14, 2012 and 11:59
p.m. on August 21, 2012, Eastern
Time.
Replay Dial-in Information
U.S.: +1 866 214 5335
International: +1 718 354 1232
Pass code: 16224070
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, (2) amortization of acquired intangible assets, (3)
impairment of goodwill, and (4) impairment of 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 (Loss) Income and EPS and Non-GAAP Adjusted Net (Loss)
Income and EPS", "Reconciliation of GAAP Operating Expenses to
Non-GAAP Adjusted Operating Expenses" and "Reconciliation of GAAP
(Loss) Income from Operations to Non-GAAP Adjusted (Loss) Income
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 33 major airports and digital
TV screens in 35 major airports, including most 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, AirMedia's air travel
advertising network, AirMedia may be unable to generate sufficient
cash flow from its operating activities and its prospects and
results of operations could be negatively affected; AirMedia
derives most of its 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 its revenues and results of
operations; AirMedia's strategy of expanding its advertising
network by building new air travel media platforms and expanding
into traditional media in airports may not succeed, and its failure
to do so could materially reduce the attractiveness of its network
and harm its business, reputation and results of operations; if
AirMedia does not succeed in its expansion into gas station and
other outdoors media advertising, its future results of operations
and growth prospects may be materially and adversely affected; if
AirMedia's customers reduce their advertising spending or are
unable to pay AirMedia 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, AirMedia's revenues and results of operations may be
materially and adversely affected; AirMedia faces risks related to
health epidemics, which could materially and adversely affect air
travel and result in reduced demand for its advertising services or
disrupt its operations; if AirMedia is unable to retain
existing concession rights contracts or obtain new concession
rights contracts on commercially advantageous terms that allow it
to operate its advertising platforms, AirMedia may be unable to
maintain or expand its network coverage and its business and
prospects may be harmed; a significant portion of AirMedia's
revenues has been derived from the six largest airports and four
largest airlines in China, and if
any of these airports or airlines experiences a material business
disruption, AirMedia's ability to generate revenues and its results
of operations would be materially and adversely affected;
AirMedia's limited operating history makes it difficult to evaluate
its 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
AirMedia Group
Inc.
|
|
|
|
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
(In U.S. dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2012
|
December 31,
2011
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
|
114,027
|
112,734
|
|
Restricted cash
|
|
8,177
|
6,363
|
|
Accounts receivable,
net
|
|
92,297
|
92,823
|
|
Prepaid concession
fees
|
|
16,166
|
22,909
|
|
Amount due from related
party
|
|
27
|
148
|
|
Other current
assets
|
|
9,041
|
6,627
|
|
Deferred tax assets -
current
|
|
5,572
|
6,061
|
|
Total current
assets
|
|
245,307
|
247,665
|
|
Property and equipment,
net
|
|
52,175
|
56,429
|
|
Long-term
investments
|
|
4,344
|
2,047
|
|
Long-term deposits
|
|
18,688
|
15,042
|
|
Deferred tax assets -
non-current
|
|
6,984
|
5,763
|
|
Acquired intangible assets,
net
|
|
11,949
|
13,788
|
|
Goodwill
|
|
20,541
|
20,734
|
|
Total
assets
|
|
359,988
|
361,468
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable (including
accounts payable of the
|
|
|
|
|
consolidated variable
interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$61,697 and $67,371 as of December 31,
|
|
|
|
|
2011 and June 30, 2012,
respectively)
|
|
69,612
|
63,577
|
|
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.
$9,585 and $6,130 as of December 31,
|
|
|
|
|
2011 and June 30, 2012,
respectively)
|
|
7,186
|
11,276
|
|
Deferred revenue (including
deferred revenue of the
|
|
|
|
|
consolidated variable
interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$11,516 and $17,792 as of December 31
|
|
|
|
|
2011 and June 30, 2012,
respectively)
|
|
17,806
|
11,522
|
|
Income tax payable (including
income tax payable of the
|
|
|
|
|
consolidated variable
interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$332 and $816 as of December 31,
|
|
|
|
|
2011 and June 30, 2012,
respectively)
|
|
816
|
792
|
|
Amounts due to related parties
(including amounts due to
|
|
|
|
|
related parties of the
consolidated variable interest entities
|
|
|
|
|
without recourse to
AirMedia Group Inc. $443 and $438 as
|
|
|
|
|
of December 31, 2011
and June 30, 2012, respectively)
|
|
438
|
443
|
|
Total current
liabilities
|
|
95,858
|
87,610
|
|
Deferred tax liability -
non-current
|
|
3,325
|
3,800
|
|
Total
liabilities
|
|
99,183
|
91,410
|
|
Equity
|
|
|
|
|
Ordinary shares
|
|
128
|
128
|
|
Additional paid-in
capital
|
|
277,295
|
275,150
|
|
Treasury stock
|
|
(4,621)
|
(3,775)
|
|
Statutory reserves
|
|
8,049
|
8,049
|
|
Accumulated
deficits
|
|
(46,935)
|
(38,138)
|
|
Accumulated other
comprehensive income
|
|
28,310
|
30,734
|
|
Total AirMedia Group
Inc.'s shareholders' equity
|
|
262,226
|
272,148
|
|
Noncontrolling
interests
|
|
(1,421)
|
(2,090)
|
|
Total
equity
|
|
260,805
|
270,058
|
|
Total liabilities
and equity
|
|
359,988
|
361,468
|
|
|
|
|
|
|
AirMedia Group
Inc.
|
|
|
|
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
(In U.S. dollars in
thousands, except share and ADS related data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2012
|
March 31,
2012
|
June 30,
2011
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
68,133
|
67,544
|
58,530
|
Business tax and other
sales tax
|
|
(1,550)
|
(1,400)
|
(1,516)
|
Net
revenues
|
|
66,583
|
66,144
|
57,014
|
Cost of
revenues
|
|
59,831
|
62,823
|
60,788
|
Gross
profit
|
|
6,752
|
3,321
|
(3,774)
|
Operating
expenses:
|
|
|
|
|
Selling and
marketing *
|
|
4,162
|
4,083
|
4,536
|
General and
administrative *
|
|
5,056
|
6,128
|
4,343
|
Impairment of
intangible assets
|
|
-
|
-
|
656
|
Total operating
expenses
|
|
9,218
|
10,211
|
9,535
|
Loss from
operations
|
|
(2,466)
|
(6,890)
|
(13,309)
|
Interest
income
|
|
225
|
259
|
386
|
Other income,
net
|
|
1,047
|
813
|
395
|
Loss before income
taxes
|
|
(1,194)
|
(5,818)
|
(12,528)
|
Income tax benefits
(expenses)
|
|
664
|
(1,913)
|
2,497
|
Net loss before net
income of equity method investments
|
|
(530)
|
(7,731)
|
(10,031)
|
Net income of equity
method investments
|
|
11
|
103
|
40
|
Net
loss
|
|
(519)
|
(7,628)
|
(9,991)
|
Less: Net income(loss)
attributable to noncontrolling interests
|
|
951
|
(301)
|
(1,351)
|
Net loss attributable
to AirMedia Group Inc.'s shareholders
|
|
(1,470)
|
(7,327)
|
(8,640)
|
Net loss attributable to
AirMedia Group Inc.'s shareholders per ordinary share
|
|
|
|
|
Basic
|
|
(0.01)
|
(0.06)
|
(0.07)
|
Diluted
|
|
(0.01)
|
(0.06)
|
(0.07)
|
Net loss attributable to
AirMedia Group Inc.'s shareholders per ADS
|
|
|
|
|
Basic
|
|
(0.02)
|
(0.12)
|
(0.13)
|
Diluted
|
|
(0.02)
|
(0.12)
|
(0.13)
|
Weighted average
ordinary shares outstanding used in computing net loss per
ordinary share - basic
|
|
125,181,769
|
125,241,217
|
130,815,205
|
Weighted average
ordinary shares outstanding used in computing net loss per
ordinary share - diluted
|
|
125,181,769
|
125,241,217
|
130,815,205
|
* Share-based
compensation charges included are as follow:
|
|
|
|
|
Selling and
marketing
|
|
297
|
297
|
284
|
General and
administrative
|
|
696
|
695
|
654
|
AirMedia Group
Inc.
|
|
|
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
|
|
|
(In U.S. dollars in
thousands, except share and ADS related data)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
June 30,
2012
|
March 31,
2012
|
June 30,
2011
|
Net loss
|
(519)
|
(7,628)
|
(9,991)
|
Other comprehensive
(loss) income
|
(2,255)
|
(151)
|
3,389
|
Comprehensive
loss
|
(2,774)
|
(7,779)
|
(6,602)
|
Less: comprehensive
income(loss) attributable to the noncontrolling interest
|
968
|
(300)
|
(1,358)
|
Comprehensive loss
attributable to AirMedia Group Inc.'s shareholders
|
(3,742)
|
(7,479)
|
(5,244)
|
AirMedia Group
Inc.
|
|
|
|
|
RECONCILIATION OF
GAAP NET 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
|
|
|
June 30,
2012
|
March 31,
2012
|
June 30,
2011
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to AirMedia Group Inc.'s shareholders
|
|
(1,470)
|
(7,327)
|
(8,640)
|
Amortization of acquired
intangible assets
|
|
816
|
905
|
953
|
Share-based
compensation
|
|
993
|
992
|
938
|
Impairment of intangible
assets
|
|
-
|
-
|
656
|
Adjusted net
income(loss) attributable to AirMedia Group Inc.'s shareholders
(non-GAAP)
|
|
339
|
(5,430)
|
(6,093)
|
|
|
|
|
|
Adjusted net
income(loss) attributable to AirMedia Group Inc.'s shareholders per
share (non-GAAP)
|
|
|
|
|
Basic
|
|
0.00
|
(0.04)
|
(0.05)
|
Diluted
|
|
0.00
|
(0.04)
|
(0.05)
|
|
|
|
|
|
Adjusted net
income(loss) attributable to AirMedia Group Inc.'s shareholders per
ADS (non-GAAP)
|
|
|
|
|
Basic
|
|
0.01
|
(0.09)
|
(0.09)
|
Diluted
|
|
0.01
|
(0.09)
|
(0.09)
|
|
|
|
|
|
Shares used in computing
adjusted basic net income(loss) attributable to AirMedia Group
Inc.'s shareholders per share (non-GAAP)
|
|
125,181,769
|
125,241,217
|
130,815,205
|
Shares used in computing
adjusted diluted net income(loss) attributable to AirMedia Group
Inc.'s shareholders per share (non-GAAP)
|
|
125,181,769
|
125,241,217
|
130,815,205
|
Note: 1) The Non-GAAP adjusted net income (loss) per share and
per ADS are computed using Non-GAAP adjusted net income (loss) 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
|
|
|
June 30,
2012
|
March 31,
2012
|
June 30,
2011
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
(GAAP)
|
|
9,218
|
10,211
|
9,535
|
Amortization of acquired
intangible assets
|
|
816
|
905
|
953
|
Share-based
compensation
|
|
993
|
992
|
938
|
Impairment of intangible
assets
|
|
-
|
-
|
656
|
|
|
|
|
|
Adjusted operating
expenses (non-GAAP)
|
|
7,409
|
8,314
|
6,988
|
|
|
|
|
|
Adjusted operating
expenses as a percentage of net revenues (non-GAAP)
|
|
11.1%
|
12.6%
|
12.3%
|
|
|
|
|
|
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
|
|
|
June 30,
2012
|
March 31,
2012
|
June 30,
2011
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(2,466)
|
(6,890)
|
(13,309)
|
Amortization of acquired
intangible assets
|
|
816
|
905
|
953
|
Share-based
compensation
|
|
993
|
992
|
938
|
Impairment of intangible
assets
|
|
-
|
-
|
656
|
|
|
|
|
|
Adjusted loss from
operations (non-GAAP)
|
|
(657)
|
(4,993)
|
(10,762)
|
|
|
|
|
|
Adjusted operating
margin (non-GAAP)
|
|
-1.0%
|
-7.5%
|
-18.9%
|
SOURCE AirMedia Group Inc.