BEIJING, May 14, 2014 /PRNewswire/ -- 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 first
quarter ended March 31, 2014.
First Quarter 2014 Financial Highlights
- Total revenues decreased by 1.8% year-over-year to US$63.4 million. The year-over-year decrease was
primarily due to AirMedia's termination of certain unprofitable or
low-margin contracts.
- Net revenues decreased by 1.0% year-over-year to US$63.0 million.
- Gross profit for the first quarter of 2014 increased by 64.9%
year-over-year to US$5.8
million.
- Net loss attributable to AirMedia's shareholders was
US$3.5 million. Basic and diluted net
loss attributable to AirMedia's shareholders per American
Depositary Share ("ADS") were both US$0.06.
- Adjusted EBITDA attributable to AirMedia's shareholders
(non-GAAP), which is EBITDA attributable to AirMedia's shareholders
excluding share-based compensation expenses, was negative
US$422,000.
"While maintaining our leading position in the out-of-home
advertising sector, we are in the process of turning around the
Company and transforming the Company to obtain a leading position
on wireless connectivity and digital cabin entertainment platforms
in air and high-speed train travel in China. We expect our recent strategic movement
into Wi-Fi services and high-speed rail to open a new era for
AirMedia and to bring tremendous growth to the Company in the
future," commented Mr. Herman Guo,
chairman and chief executive officer of AirMedia.
"To better motivate our employees, we are internally conducting
a share structure reform of some of our operating entities where we
encourage the respective entity's management to invest their own
funds to obtain certain percentage of the entity's equity interest.
We believe the share structure reform will align the interest of
the management teams with the Company's interest, motivating them
to improve the profitability of their respective operating entity,
which will eventually increase shareholder value of the listed
company," continued Mr. Guo
"Our year-over-year quarterly net revenue decrease has slowed
down to 1.0% in the first quarter of 2014, compared with 4.6% and
6.6% in the third quarter and fourth quarters of 2013,
respectively, indicating that the growth of our other product
lines, such as mega-size LED screens, has made up the shortfall of
revenues due to our termination of some unprofitable or low margin
contracts in 2013. Our total operating expenses increased 19.8%
year-over-year due to the incremental expenses associated with our
new business initiatives, which we expect to be the growth drivers
for the Company in the long term. Despite the decrease in net
revenues and increase in total operating expenses year-over-year,
we still made improvements on gross profit, and reduced loss from
operations and net loss attributable to AirMedia's shareholders,
which demonstrated the effectiveness of our efforts on turning
around the Company," commented Mr. Henry
Ho, AirMedia's chief financial officer.
Separately, AirMedia also announced today the appointment of
Richard Wu as the Company's chief
financial officer, effective June 1,
2014.
First Quarter 2014 Financial
Results
Revenues
Total revenues by product line (numbers in US$ 000's except for
percentages):
|
|
Quarter
Ended
March
31, 2014
|
% of Total
Revenues
|
|
Quarter Ended
December 31, 2013
|
% of Total
Revenues
|
|
Quarter
Ended
March
31, 2013
|
% of Total
Revenues
|
|
Y/Y Growth
rate
|
|
Q/Q Growth
rate
|
Air Travel Media
Network
|
|
58,072
|
91.6%
|
|
72,085
|
91.8%
|
|
60,532
|
93.8%
|
|
-4.1%
|
|
-19.4%
|
Digital frames
in airports
|
|
35,183
|
55.5%
|
|
45,444
|
57.8%
|
|
33,516
|
51.9%
|
|
5.0%
|
|
-22.6%
|
Digital TV
screens in airports
|
|
2,706
|
4.3%
|
|
5,103
|
6.5%
|
|
2,752
|
4.3%
|
|
-1.7%
|
|
-47.0%
|
Digital TV
screens on airplanes
|
|
4,274
|
6.7%
|
|
4,611
|
5.9%
|
|
3,788
|
5.9%
|
|
12.8%
|
|
-7.3%
|
Traditional
media in airports
|
|
14,635
|
23.1%
|
|
14,197
|
18.1%
|
|
18,932
|
29.3%
|
|
-22.7%
|
|
3.1%
|
Other revenues
in air travel
|
|
1,274
|
2.0%
|
|
2,730
|
3.5%
|
|
1,544
|
2.4%
|
|
-17.5%
|
|
-53.3%
|
Gas Station Media
Network
|
|
2,754
|
4.3%
|
|
4,420
|
5.6%
|
|
2,789
|
4.3%
|
|
-1.3%
|
|
-37.7%
|
Other
Media
|
|
2,582
|
4.1%
|
|
2,076
|
2.6%
|
|
1,226
|
1.9%
|
|
110.6%
|
|
24.4%
|
Total
revenues
|
|
63,408
|
100.0%
|
|
78,581
|
100.0%
|
|
64,547
|
100.0%
|
|
-1.8%
|
|
-19.3%
|
Net
revenues
|
|
63,000
|
|
|
77,214
|
|
|
63,612
|
|
|
-1.0%
|
|
-18.4%
|
Total revenues for the first quarter of 2014 reached
US$63.4 million, representing a
year-over-year decrease of 1.8% from US$64.5
million in the same period one year ago and a
quarter-over-quarter decrease of 19.3% from US$78.6 million in the previous quarter. The
year-over-year decrease was primarily due to decreases in revenues
from traditional media in airports, which were primarily caused by
AirMedia's termination of certain unprofitable or low-margin
contracts. The quarter-over-quarter decrease was primarily due to
decreases in revenues from most product lines other than
traditional media in airports and other media.
Revenues from digital frames in airports
Revenues from digital frames in airports for the first quarter
of 2014 increased by 5.0% year-over-year and decreased by 22.6%
quarter-over-quarter to US$35.2
million. The year-over-year increase was primarily due to
additional revenues from the rapidly growing product line of
mega-size LED screens, which added operations in additional
airports. The quarter-over-quarter decrease was primarily due to a
seasonally weak quarter in the first quarter of 2014.
Revenues from digital TV screens in airports
Revenues from digital TV screens in airports for the first
quarter of 2014 decreased by 1.7% year-over-year and by 47.0%
quarter-over-quarter to US$2.7
million. The quarter-over-quarter decrease was primarily due
to a seasonally weak quarter in the first quarter of 2014.
Revenues from digital TV screens on airplanes
Revenues from digital TV screens on airplanes for the first
quarter of 2014 increased by 12.8% year-over-year and decreased by
7.3% quarter-over-quarter to US$4.3
million. AirMedia did not renew its concession rights
contract with Air China, which expired on December 31, 2012, but regained some advertising
time on Air China's airplanes on August 1,
2013. The year-over-year increase of revenues from digital
TV screens on airplanes was primarily due to the increase in
revenues from digital TV screens on Air China's airplanes. The
quarter-over-quarter decrease of revenues from digital TV screens
on airplanes was primarily due to a seasonally weak quarter in the
first quarter of 2014.
Revenues from traditional media in
airports
Revenues from traditional media in airports for the first
quarter of 2014 decreased by 22.7% year-over-year and increased by
3.1% quarter-over-quarter to US$14.6
million. The year-over-year decrease was primarily due to
AirMedia's termination of certain unprofitable or low-margin
contracts. AirMedia decided not to renew the concession rights
contracts for the billboards and painted advertisements on the gate
bridges of Terminal 3 in Beijing Airport in May and July 2013 after the expiration of the relevant
contracts. The quarter-over-quarter increase was primarily due to
the better operational results of Beijing Weimei Lianhe Advertising
Co., Ltd. ("Weimei Lianhe"), which is the entity operating
AirMedia's traditional media in airports. The management of Weimei
Lianhe adopted new management methods to increase revenues and
profitability of Weimei Lianhe motivated by the ongoing share
structure reform.
Revenues from the gas station media
network
Revenues from the gas station media network for the first
quarter of 2014 decreased by 1.3% year-over-year and by 37.7%
quarter-over-quarter to US$2.8
million. The year-over-year decrease was primarily due to
temporary service suspension caused by the gap between the
retirement of the old scrolling light boxes and the full operation
of the replacing new LED screens in gas stations in many cities.
The quarter-over-quarter decrease was primarily due to a seasonally
weak quarter in the first quarter of 2014.
AirMedia's LED screens in gas stations change pictures every 10
seconds and rotate in 3-minute cycles, which provides 18 time slots
available for sale. As of May 11,
2014, AirMedia operated LED screens in 395 gas stations in
nine cities, compared to LED screens in 300 gas stations in six
cities as of February 28, 2014.
Revenues from other media
Revenues from other media were primarily revenues from unipole
signs and other outdoors media. Revenues from other media for the
first quarter of 2014 increased by 110.6% year-over-year and by
24.4% quarter-over-quarter to US$2.6
million. The year-over-year increase was primarily due to
the Company's sales efforts and the fact that some contracts, which
were renewed in February 2013, did
not have full quarter operations in the first quarter of 2013. The
quarter-over-quarter increase was due to the Company's continued
sales efforts.
Business tax and other sales tax
Business tax and other sales tax for the first quarter of 2014
were US$408,000, compared to
US$935,000 in the same period one
year ago and US$1.4 million in the
previous quarter.
Net revenues
Net revenues for the first quarter of 2014 reached US$63.0 million, representing a year-over-year
decrease of 1.0% from US$63.6 million
in the same period one year ago and a quarter-over-quarter decrease
of 18.4% from US$77.2 million in the
previous quarter.
Cost of Revenues
Cost of revenues for the first quarter of 2014 was US$57.2 million, representing a year-over-year
decrease of 4.8% from US$60.1 million
in the same period one year ago and a quarter-over-quarter decrease
of 11.9% from US$65.0 million in the
previous quarter. The year-over-year decrease was primarily due to
lower concession fees and lower depreciation in the first quarter
of 2014.The quarter-over-quarter decrease was primarily due to
lower agency fees for third-party advertising agencies, lower
concession fees, and lower depreciation in the first quarter of
2014. Cost of revenues as a percentage of net revenues in the first
quarter of 2014 was 90.9%, down from 94.5% in the same period one
year ago and up from 84.1% 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.
Concession fees for the first quarter of 2014 decreased by 7.7%
year-over-year and by 6.7% quarter-over-quarter to US$42.6 million. The year-over-year and
quarter-over-quarter decreases were primarily due to the expiration
of some concession rights contracts which AirMedia chose not to
renew. Concession fees as a percentage of net revenues in the first
quarter of 2014 was 67.6%, decreasing from 72.6% in the same period
one year ago and increasing from 59.1% 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 concession fees
decreased faster than net revenues. The quarter-over-quarter
increase of concession fees as a percentage of net revenues was
primarily due to the fact that net revenues decreased faster than
concession fees.
Gross Profit
Gross profit for the first quarter of 2014 increased by 64.9%
year-over-year and decreased by 53.0% quarter-over-quarter to
US$5.8 million.
Gross profit as a percentage of net revenues for the first
quarter of 2014 was 9.1%, compared to 5.5% in the same period one
year ago and 15.9% in the previous quarter. The year-over-year
increase in gross profit as a percentage of net revenues was
primarily due to the fact that cost of revenues decreased faster
than net revenues. The quarter-over-quarter decrease in gross
profit as a percentage of net revenues was primarily due to the
fact that net revenues decreased faster than cost of revenues.
Operating Expenses
Operating expenses (numbers in US$ 000's except for
percentages):
|
Quarter Ended
March 31, 2014
|
% of Net
Revenues
|
|
Quarter Ended
December 31, 2013
|
% of Net
Revenues
|
|
Quarter Ended
March 31, 2013
|
% of Net
Revenues
|
|
Y/Y Growth
rate
|
Q/Q Growth
rate
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
5,052
|
8.0%
|
|
5,465
|
7.1%
|
|
4,222
|
6.6%
|
|
19.7%
|
-7.6%
|
General and
administrative expenses
|
5,854
|
9.3%
|
|
8,812
|
11.4%
|
|
4,878
|
7.7%
|
|
20.0%
|
-33.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
10,906
|
17.3%
|
|
14,277
|
18.5%
|
|
9,100
|
14.3%
|
|
19.8%
|
-23.6%
|
Total operating expenses for the first quarter of 2014 were
US$10.9 million, representing a
year-over-year increase of 19.8% from US$9.1
million in the same period one year ago and a
quarter-over-quarter decrease of 23.6% from US$14.3 million in the previous quarter.
Share-based compensation expenses included in the total
operating expenses for the first quarter of 2014 were US$242,000, compared to US$280,000 in the same period one year ago and
US$425,000 in the previous
quarter.
Selling and marketing expenses for the first quarter of 2014
were US$5.1 million. This represented
a year-over-year increase of 19.7% from US$4.2 million in the same period one year ago
and a quarter-over-quarter decrease of 7.6% from US$5.5 million in the previous quarter. The
year-over-year increase was primarily due to higher salaries
related to new business initiatives, higher marketing expenses, and
higher expenses of office and equipments. The quarter-over-quarter
decrease was primarily due to lower professional fees, lower sales
commissions for the Company's direct sales force, and lower
expenses of office and equipments.
General and administrative expenses for the first quarter of
2014 were US$5.9 million, including
share-based compensation expenses of US$242,000. This represented a year-over-year
increase of 20.0% from US$4.9 million
in the same period one year ago and a quarter-over-quarter decrease
of 33.6% from US$8.8 million in the
previous quarter. The year-over-year increase was primarily due to
higher bad-debt provisions and higher salary expenses associated
with more headcount for new businesses. The quarter-over-quarter
decrease was primarily due to lower bad-debt provision.
Loss/Income from Operations
Loss from operations for the first quarter of 2014 was
US$5.1 million, compared to loss from
operations of US$5.6 million in the
same period one year ago and loss from operations of US$2.0 million in the previous quarter. Loss from
operations as a percentage of net revenues for the first quarter of
2014 was negative 8.2%, compared to negative 8.8% in the same
period one year ago and negative 2.6% in the previous quarter.
Income Tax Benefits
Income tax benefits for the first quarter of 2014 were
US$4,000, compared to income tax
benefits of US$1.0 million in the
same period one year ago and income tax benefits of US$1.8 million in the previous quarter.
Net Loss/Income Attributable
to AirMedia's Shareholders
Net loss attributable to AirMedia's shareholders for the first
quarter of 2014 was US$3.5 million,
compared to net loss attributable to AirMedia's shareholders of
US3.6 million in the same period one year ago and net income
attributable to AirMedia's shareholders of US$1.5 million in the previous quarter. The basic
net loss attributable to AirMedia's shareholders per ADS for the
first quarter of 2014 was US$0.06,
compared to basic net loss attributable to AirMedia's shareholders
per ADS of US$0.06 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 loss attributable to
AirMedia's shareholders per ADS for the first quarter of 2014 was
US$0.06, compared to diluted net loss
attributable to AirMedia's shareholders per ADS of US$0.06 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 EBITDA Attributable to AirMedia's
Shareholders
Adjusted EBITDA (non-GAAP) attributable to AirMedia's
shareholders (non-GAAP), which is EBITDA attributable to AirMedia's
shareholders excluding share-based compensation expenses, was
negative US$422,000, compared to
adjusted EBITDA (non-GAAP) of US$1.0
million in the same period one year ago and adjusted EBITDA
(non-GAAP) of US$4.7 million.
Please refer to the attached table captioned "Reconciliation of
GAAP Net (Loss) Income to Adjusted EBITDA" for a reconciliation of
net (loss) income under U.S. GAAP to adjusted EBITDA
(non-GAAP).
Cash, Restricted Cash and
Short-term Investments
Cash, restricted cash and short-term investments totaled
US$115.9 million as of March 31, 2014, compared to US$113.0 million as of December 31, 2013.
Other Recent Developments
In May 2014, Guangzhou Meizheng
Advertising Co., Ltd. ("Meizheng"), one of AirMedia's consolidated
entities, in which it has 54% of the equity interest, won a bidding
and entered into an agreement with Guangzhou Railway (Group)
Corporation to explore the opportunity of providing Wi-Fi services
on high-speed rail.
On April 23, 2014, AirMedia
commenced operations of five sets of LCD screens, each set with
three screens, at Haikou Meilan International Airport.
On April 23, 2014, AirMedia
commenced operations of 22 stand-alone digital frames at Taiyuan
Wusu International Airport.
On March 20, 2014, AirMedia
launched its interactive platform in Beijing Capital International
Airport ("Beijing Airport"). By sending a text message or scanning
a QR code, air passengers can attend lucky draws. AirMedia is still
in the process of improving the product's user experience before it
heavily promotes this new product.
On March 17, 2014, AirMedia
commenced operations of two new mega-size LED screens at check-in
hall of Terminal 2 in Beijing Airport, which increased its number
of mega-size LED screens at Terminal 2 in Beijing Airport to
three.
Business Outlook
AirMedia currently expects its net revenues for the second
quarter of 2014 to range from US$61.0
million to US$64.0 million, representing a year-over-year
decrease of 3.7% to a year-over-year increase of 1.0% from the same
period in 2013 and a quarter-over-quarter decrease of 3.2% to a
quarter-over-quarter increase of 1.6% from the previous
quarter.
AirMedia currently expects its concession fees to be
approximately US$45.0 million in the
second quarter of 2014, representing a quarter-over-quarter
increase of 5.7% from the previous quarter, primarily due to new
concession rights contract entered into during the quarter.
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
March
31, 2014
|
|
Quarter
Ended
December
31, 2013
|
|
Quarter
Ended
March
31, 2013
|
|
Y/Y Growth
Rate
|
|
Q/Q Growth
Rate
|
Digital frames in
airports
|
|
|
|
|
|
|
|
|
|
Number of
airports in operation
|
31
|
|
31
|
|
33
|
|
-6.1%
|
|
0.0%
|
Number of time
slots available for sale (2)
|
33,602
|
|
36,146
|
|
31,946
|
|
5.2%
|
|
-7.0%
|
Number of time
slots sold (3)
|
14,551
|
|
16,275
|
|
12,935
|
|
12.5%
|
|
-10.6%
|
Utilization
rate (4)
|
43.3%
|
|
45.0%
|
|
40.5%
|
|
2.8%
|
|
-1.7%
|
Average
advertising revenue per time slot sold (5)
|
US$2,418
|
|
US$2,792
|
|
US$2,591
|
|
-6.7%
|
|
-13.4%
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens
in airports
|
|
|
|
|
|
|
|
|
|
Number of
airports in operation
|
31
|
|
31
|
|
33
|
|
-6.1%
|
|
0.0%
|
Number of time
slots available for sale (1)
|
16,457
|
|
16,823
|
|
16,971
|
|
-3.0%
|
|
-2.2%
|
Number of time
slots sold (3)
|
4,090
|
|
6,946
|
|
4,829
|
|
-15.3%
|
|
-41.1%
|
Utilization
rate (4)
|
24.9%
|
|
41.3%
|
|
28.5%
|
|
-3.6%
|
|
-16.4%
|
Average
advertising revenue per time slot sold (5)
|
US$662
|
|
US$735
|
|
US$570
|
|
16.1%
|
|
-9.9%
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens
on airplanes
|
|
|
|
|
|
|
|
|
|
Number of
airlines in operation
|
7
|
|
7
|
|
8
|
|
-12.5%
|
|
0.0%
|
Number of time
slots available for sale (1)
|
409
|
|
373
|
|
372
|
|
9.9%
|
|
9.7%
|
Number of time
slots sold (3)
|
141
|
|
143
|
|
135
|
|
4.4%
|
|
-1.4%
|
Utilization
rate (4)
|
34.5%
|
|
38.3%
|
|
36.3%
|
|
-1.8%
|
|
-3.8%
|
Average
advertising revenue per time slot sold (5)
|
US$30,312
|
|
US$32,245
|
|
US$28,059
|
|
8.0%
|
|
-6.0%
|
|
|
|
|
|
|
|
|
|
|
Traditional Media
in airports
|
|
|
|
|
|
|
|
|
|
Numbers of locations
available for sale (6)
|
995
|
|
1,004
|
|
908
|
|
9.6%
|
|
-0.9%
|
Numbers of locations
sold (7)
|
518
|
|
632
|
|
546
|
|
-5.1%
|
|
-18.0%
|
Utilization rate
(8)
|
52.1%
|
|
62.9%
|
|
60.1%
|
|
-8.0%
|
|
-10.8%
|
Average advertising
revenue per location sold (9)
|
US$28,253
|
|
US$22,469
|
|
US$34,674
|
|
-18.5%
|
|
25.7%
|
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 or 6-second
equivalent advertising time units 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 or 5-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 or
6-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 first
quarter 2014 earnings at 7:00 PM U.S.
Eastern Time on May 14, 2014
(4:00 PM U.S. Pacific Time on
May 14, 2014; 7:00 AM Beijing/Hong
Kong time on May 15, 2014).
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: +852 800 930 346
International: +65 67239381
Pass code: AMCN
A replay of the call will be available for 1 week between
10:00 p.m. on May 14, 2014 and 11:59
p.m. on May 21, 2014, Eastern
Time.
Replay Dial-in Information
U.S.: +1 855 452 5696
International: +61 2 8199 0299
Pass code: 36693760
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. EBITDA is being used as a Non-GAAP
measurement in evaluating the operating performance. EBITDA
consists of net (loss)/income attributable to AirMedia Group Inc.'s
shareholders before interest income, interest expense(if any),
income tax expense/ (benefit), depreciation, and amortization of
acquired intangible assets.
Adjusted EBITDA represents EBITDA adjusted for Share-based
compensation. Our management believes that the use of Adjusted
EBITDA eliminates items that, management believes, have less
bearing on our operating performance, thereby highlighting trends
in our core business which may not otherwise be apparent.
EBITDA is used by AirMedia's management in their financial and
operating decision-making as a Non-GAAP financial measure, because
management believes it reflects AirMedia's ongoing business and
operating performance in a manner that allows meaningful
period-to-period comparisons. AirMedia's management believes that
EBITDA 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 EBITDA 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.
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 31 major airports and digital
TV screens in 31 major airports, including most of the 30 largest
airports in China. In addition,
AirMedia sells advertisements on the routes operated by seven
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-size LED
screens.
In addition, AirMedia has obtained exclusive contractual
concession rights until the end of 2020 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)
|
|
|
|
|
|
|
|
|
March 31,
2014
|
December 31,
2013
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
|
62,105
|
59,652
|
|
Restricted
cash
|
|
13,312
|
10,366
|
|
Short-term
investments
|
|
40,458
|
42,949
|
|
Accounts receivable,
net
|
|
89,616
|
107,529
|
|
Notes
receivable
|
|
4,064
|
1,901
|
|
Prepaid concession
fees
|
|
35,319
|
29,307
|
|
Amount due from
related party
|
|
157
|
187
|
|
Other current
assets
|
|
20,743
|
20,437
|
|
Deferred tax assets -
current
|
|
2,454
|
2,776
|
|
Total current
assets
|
|
268,228
|
275,104
|
|
Prepaid property and
equipment costs
|
|
47,256
|
49,415
|
|
Property and
equipment, net
|
|
35,374
|
36,084
|
|
Long-term
deposits
|
|
18,432
|
20,497
|
|
Deferred tax assets -
non-current
|
|
13,079
|
11,755
|
|
Long-term
investments
|
|
8,437
|
7,829
|
|
Acquired intangible
assets, net
|
|
1,178
|
1,446
|
|
Other non-current
assets
|
|
917
|
661
|
|
Total
assets
|
|
392,901
|
402,791
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term loan
(including short-term loan of nil and $3,000
|
|
3,000
|
-
|
|
as of December 31,
2013 and March 31, 2014, respectively)
|
|
|
|
|
Accounts payable
(including accounts payable of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group
Inc. $75,182 and $69,768 as of December 31,
|
|
|
|
|
2013 and March
31, 2014, respectively)
|
|
74,972
|
81,157
|
|
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. $8,016 and $17,090 as of December 31,
|
|
|
|
|
2013 and March
31, 2014, respectively)
|
|
18,543
|
10,883
|
|
Deferred revenue
(including deferred revenue of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group
Inc. $17,374 and $14,372 as of December 31
|
|
|
|
|
2013 and March
31, 2014, respectively)
|
|
14,379
|
17,380
|
|
Income tax payable
(including income tax payable of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group
Inc. $455 and $1,325 as of December 31,
|
|
|
|
|
2013 and March
31, 2014, respectively)
|
|
1,933
|
1,667
|
|
Total current
liabilities
|
|
112,827
|
111,087
|
|
Deferred tax
liability - non-current
|
|
294
|
361
|
|
Total
liabilities
|
|
113,121
|
111,448
|
|
Equity
|
|
|
|
|
Ordinary
shares
|
|
128
|
128
|
|
Additional paid-in
capital
|
|
314,154
|
313,912
|
|
Treasury
stock
|
|
(9,743)
|
(9,860)
|
|
Statutory
reserves
|
|
10,968
|
10,968
|
|
Accumulated
deficits
|
|
(87,920)
|
(84,411)
|
|
Accumulated other
comprehensive income
|
|
33,168
|
40,229
|
|
Total AirMedia
Group Inc.'s shareholders' equity
|
|
260,755
|
270,966
|
|
Noncontrolling interests
|
|
19,025
|
20,377
|
|
Total
equity
|
|
279,780
|
291,343
|
|
Total liabilities
and equity
|
|
392,901
|
402,791
|
|
AirMedia Group
Inc.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In U.S. dollars
in thousands, except share and ADS related data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2014
|
December 31,
2013
|
March 31,
2013
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
63,408
|
78,581
|
64,547
|
Business tax and
other sales tax
|
|
(408)
|
(1,367)
|
(935)
|
Net
revenues
|
|
63,000
|
77,214
|
63,612
|
Cost of
revenues
|
|
57,239
|
64,956
|
60,119
|
Gross
profit
|
|
5,761
|
12,258
|
3,493
|
Operating
expenses:
|
|
|
|
|
Selling and
marketing *
|
|
5,052
|
5,465
|
4,222
|
General and
administrative *
|
|
5,854
|
8,812
|
4,878
|
Total operating
expenses
|
|
10,906
|
14,277
|
9,100
|
Loss from
operations
|
|
(5,145)
|
(2,019)
|
(5,607)
|
Interest income,
net
|
|
583
|
365
|
388
|
Other income,
net
|
|
444
|
754
|
730
|
Loss before income
taxes
|
|
(4,118)
|
(900)
|
(4,489)
|
Income tax
benefits
|
|
4
|
1,805
|
1,043
|
Net (loss) income
before net income of equity method investments
|
|
(4,114)
|
905
|
(3,446)
|
Net (loss) of equity
method investments
|
|
(223)
|
(4)
|
(24)
|
Net (loss)
income
|
|
(4,337)
|
901
|
(3,470)
|
Less: Net (loss)
income attributable to noncontrolling interests
|
|
(828)
|
(557)
|
130
|
Net (loss) income
attributable to AirMedia Group Inc.'s shareholders
|
|
(3,509)
|
1,458
|
(3,600)
|
Net (loss) income
attributable to AirMedia Group Inc.'s shareholders per ordinary
share
|
|
|
|
|
Basic
|
|
(0.03)
|
0.01
|
(0.03)
|
Diluted
|
|
(0.03)
|
0.01
|
(0.03)
|
Net (loss) income
attributable to AirMedia Group Inc.'s shareholders per
ADS
|
|
|
|
|
Basic
|
|
(0.06)
|
0.02
|
(0.06)
|
Diluted
|
|
(0.06)
|
0.02
|
(0.06)
|
Weighted average
ordinary shares outstanding used in computing net (loss)
income per ordinary share - basic
|
|
119,152,038
|
119,517,056
|
121,738,551
|
Weighted average
ordinary shares outstanding used in computing net (loss)
income per ordinary share - diluted
|
|
119,152,038
|
119,540,735
|
121,738,551
|
* Share-based
compensation charges included are as follow:
|
|
|
|
|
Selling and
marketing
|
|
-
|
-
|
-
|
General and
administrative
|
|
242
|
425
|
280
|
AirMedia Group
Inc.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)
INCOME
|
(In U.S. dollars
in thousands, except share and ADS related data)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
2014
|
December 31,
2013
|
March 31,
2013
|
Net (loss)
income
|
(4,337)
|
901
|
(3,470)
|
Other comprehensive
(loss) income
|
(7,584)
|
3,075
|
739
|
Comprehensive
(loss) income
|
(11,921)
|
3,976
|
(2,731)
|
Less: comprehensive
(loss) income attributable to the noncontrolling
interest
|
(1,351)
|
(404)
|
123
|
Comprehensive
(loss) income attributable to AirMedia Group Inc.'s
shareholders
|
(10,570)
|
4,380
|
(2,854)
|
AirMedia Group
Inc.
|
RECONCILIATION OF GAAP NET (LOSS) INCOME TO
NON-GAAP ADJUSTED EBITDA
|
(In U.S. dollars
in thousands, except share and ADS related data)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2014
|
December 31,
2013
|
March 31,
2013
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to AirMedia Group Inc.'s shareholders
(GAAP)
|
|
(3,509)
|
1,458
|
(3,600)
|
Interest
(income)/expense, net
|
|
(583)
|
(365)
|
(388)
|
Income tax
(benefit)
|
|
(4)
|
(1,805)
|
(1,043)
|
Depreciation
|
|
3,199
|
4,772
|
5,610
|
Amortization of
acquired intangible assets
|
|
233
|
235
|
195
|
|
|
|
|
|
EBITDA
attributable to AirMedia Group Inc.'s shareholders
(non-GAAP)
|
|
(664)
|
4,295
|
774
|
Share-based
compensation
|
|
242
|
425
|
280
|
Adjusted EBITDA
attributable to AirMedia Group Inc.'s shareholders
(non-GAAP)
|
|
(422)
|
4,720
|
1,054
|
SOURCE AirMedia Group Inc.