BEIJING, Nov. 17, 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 third
quarter ended September 30, 2014.
Third Quarter 2014 Financial Highlights
- Total revenues decreased by 8.9% year-over-year to US$62.9 million.
- Net revenues decreased by 8.6% year-over-year to US$62.2 million.
- Net loss attributable to AirMedia's shareholders was
US$5.5 million. Basic and diluted net
loss attributable to AirMedia's shareholders per American
Depositary Share ("ADS") were both US$0.10.
- Adjusted EBITDA attributable to AirMedia's shareholders
(non-GAAP), which is EBITDA attributable to AirMedia's shareholders
excluding share-based compensation expenses, was a loss of
US$2.4 million.
"Although the third quarter results were less than satisfactory,
we strongly believe it was temporary and the Company will have a
brilliant future. We are in the process of adopting various
measures to bring the Company back to profits, which we expect to
have substantial positive impact on our earnings in early next
year. These measures are expected to include, for instance, a
decrease in our concession fees with certain airports through
negotiation, upgrade of some of our media resources to better media
formats, and spinoff of certain unprofitable product lines. Some of
our product lines, such as mega-size LED screens, stand-alone
digital frames and traditional media in airports, have been
generating good profits. We expect the spinoff of the unprofitable
product lines to improve our overall financial performance,"
commented Mr. Herman Guo, chairman
and chief executive officer of AirMedia.
"We continued to increase our market share of on-train Wi-Fi
business. With the new concession rights contract we recently
obtained for Wi-Fi operation on high speed trains including
D-prefaced bullet trains operated by Shanghai Railway Bureau and on
ordinary speed trains operated by Xinjiang Railway Bureau, we
already have a leading position in the on-train Wi-Fi business,"
continued Mr. Guo. "We believe in-flight Wi-Fi and on-train Wi-Fi
are precious Wi-Fi gateways that Internet and mobile Internet
companies are eager to gain access to. We endeavor to seek
partnership with world class Internet giants to leverage and
monetize our Wi-Fi access. We expect such partnership to bring us
investment, technology and operation experience."
"We continued to expand our nationwide network of mega-size LED
screens in the third quarter with additions in Tianjin, Sanya, Nanning, and Qingdao airports, which increased the number
of airports we have mega-size LED screens in operation to 16
airports," continued Mr. Guo.
"Although our total revenues were flat compared with the
previous quarter, our main business continued to its sequential
growth in the third quarter. There were US$2.8 million revenues from film distribution in
the second quarter 2014, which tend to fluctuate in a wide range
from quarter to quarter and may complicate a correct reading of our
quarter-over-quarter comparison. Our third quarter revenues from
the rest of our business continued to grow steadily
quarter-over-quarter," commented Mr. Richard Wu, AirMedia's chief financial
officer.
Third Quarter 2014 Financial
Results
Revenues
Total revenues by product line (numbers in US$ 000's except for
percentages):
|
Quarter Ended
September 30,
2014
|
% of
Total
Revenues
|
|
Quarter Ended
June 30,
2014
|
% of
Total
Revenues
|
|
Quarter Ended
September 30,
2013
|
% of
Total
Revenues
|
|
Y/Y
Growth
rate
|
|
Q/Q
Growth
rate
|
Air Travel Media
Network
|
57,779
|
91.9%
|
|
54,320
|
87.6%
|
|
63,315
|
91.7%
|
|
-8.7%
|
|
6.4%
|
Digital frames
in airports
|
33,971
|
54.0%
|
|
32,006
|
51.6%
|
|
39,308
|
56.9%
|
|
-13.6%
|
|
6.1%
|
Digital TV
screens in airports
|
3,866
|
6.1%
|
|
2,431
|
3.9%
|
|
3,604
|
5.2%
|
|
7.3%
|
|
59.0%
|
Digital TV
screens on airplanes
|
4,604
|
7.3%
|
|
3,470
|
5.6%
|
|
4,436
|
6.4%
|
|
3.8%
|
|
32.7%
|
Traditional
media in airports
|
13,942
|
22.2%
|
|
14,348
|
23.1%
|
|
13,257
|
19.2%
|
|
5.2%
|
|
-2.8%
|
Other revenues
in air travel
|
1,396
|
2.3%
|
|
2,065
|
3.4%
|
|
2,710
|
4.0%
|
|
-48.5%
|
|
-32.4%
|
Gas Station Media
Network
|
2,636
|
4.2%
|
|
2,877
|
4.6%
|
|
3,281
|
4.8%
|
|
-19.7%
|
|
-8.4%
|
Other
Media
|
2,449
|
3.9%
|
|
4,865
|
7.8%
|
|
2,447
|
3.5%
|
|
0.1%
|
|
-49.7%
|
Total
revenues
|
62,864
|
100.0%
|
|
62,062
|
100.0%
|
|
69,043
|
100.0%
|
|
-8.9%
|
|
1.3%
|
Net
revenues
|
62,207
|
|
|
61,480
|
|
|
68,067
|
|
|
-8.6%
|
|
1.2%
|
Total revenues for the third quarter of 2014 were US$62.9 million, which represented a
year-over-year decrease of 8.9% from US$69.0
million in the same period one year ago and a
quarter-over-quarter increase of 1.3% from US$62.1 million in the previous quarter. The
year-over-year decrease was primarily due to decreases in revenues
from digital frames in airports, other revenues in air travel, gas
station media network and other media.
Revenues from digital frames in airports
Revenues from digital frames in airports for the third quarter
of 2014 decreased by 13.6% year-over-year and increased by 6.1%
quarter-over-quarter to US$34.0
million. The year-over-year decrease was primarily due to a
soft demand in advertising market. The quarter-over-quarter
increase was primarily due to a seasonally strong quarter in the
third quarter and the Company's continued sales efforts.
Revenues from digital TV screens in airports
Revenues from digital TV screens in airports for the third
quarter of 2014 increased by 7.3% year-over-year and by 59.0%
quarter-over-quarter to US$3.9
million. The year-over-year and quarter-over-quarter
increases were primarily due to the Company's continued sales
efforts.
Revenues from digital TV screens on airplanes
Revenues from digital TV screens on airplanes for the third
quarter of 2014 increased by 3.8% year-over-year and by 32.7%
quarter-over-quarter to US$4.6
million. The year-over-year increase in revenues from
digital TV screens on airplanes was primarily due to the increase
in revenues from digital TV screens on Air China's airplanes, which
resumed operations on August 1, 2013
and had a full quarter operation in the third quarter 2014. The
quarter-over-quarter increase in revenues from digital TV screens
on airplanes was primarily due to a seasonally strong quarter in
the third quarter and the Company's continued sales efforts.
Revenues from traditional media in
airports
Revenues from traditional media in airports for the third
quarter of 2014 increased by 5.2% year-over-year and decreased by
2.8% quarter-over-quarter to US$13.9
million. The year-over-year increase was primarily due to
the Company's continued sales efforts.
Revenues from the gas station media
network
Revenues from the gas station media network for the third
quarter of 2014 decreased by 19.7% year-over-year and by 8.4%
quarter-over-quarter to US$2.6
million. The year-over-year and quarter-over-quarter
decreases were primarily due to the ongoing restoration of some LED
screens with mechanical malfunctions to proper function in the
third quarter.
AirMedia's LED screens in gas stations change pictures every 10
seconds and rotate in 3-minute cycles, which provides 18 time slots
per cycle available for sale. As of November
16, 2014, AirMedia operated LED screens in 562 gas stations
in 15 cities, compared to 490 gas stations in 12 cities as of
August 17, 2014.
Revenues from other media
Revenues from other media were primarily revenues from unipole
signs and other outdoors media, as well as revenues from the
Company's new business of film distribution. Revenues from other
media for the third quarter of 2014 remained relatively unchanged
year-over-year and decreased by 49.7% quarter-over-quarter to
US$2.4 million. The
quarter-over-quarter decrease was due to the high revenues from
film distribution of US$2.8 million
in the second quarter of 2014 as a result of distribution of
several films.
Net revenues
Net revenues for the third quarter of 2014 reached US$62.2 million, which represented a
year-over-year decrease of 8.6% from US$68.1
million in the same period one year ago and a
quarter-over-quarter increase of 1.2% from US$61.5 million in the previous quarter.
Cost of Revenues
Cost of revenues for the third quarter of 2014 was US$59.9 million, which largely remained flat from
the same period one year ago and represented a quarter-over-quarter
increase of 5.4% from US$56.8 million
in the previous quarter. The quarter-over-quarter increase was
primarily due to higher concession fees, higher agency fees for
third-party advertising agencies and higher depreciation in the
third quarter of 2014. Cost of revenues as a percentage of net
revenues in the third quarter of 2014 was 96.3%, up from 87.4% in
the same period one year ago and up from 92.5% 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 third quarter of 2014 increased by 3.1%
year-over-year and by 3.6% quarter-over-quarter to US$44.1 million. The year-over-year and
quarter-over-quarter increases were primarily due to newly signed
or renewed concession rights contracts during the quarter.
Concession fees as a percentage of net revenues in the third
quarter of 2014 was 70.9%, increasing from 62.8% in the same period
one year ago and increasing from 69.2% in the previous quarter. The
year-over-year increase of concession fees as a percentage of net
revenues was primarily due to the decrease in net revenues and the
increase in concession fees. The quarter-over-quarter increase of
concession fees as a percentage of net revenues was primarily due
to the increase in concession fees.
Gross Profit
Gross profit for the third quarter of 2014 decreased by 73.4%
year-over-year and by 50.9% quarter-over-quarter to US$2.3 million.
Gross profit as a percentage of net revenues for the third
quarter of 2014 was 3.7%, compared to 12.6% in the same period one
year ago and 7.5% in the previous quarter. The year-over-year
decrease in gross profit as a percentage of net revenues was
primarily due to the decrease in net revenues. The
quarter-over-quarter decrease in gross profit as a percentage of
net revenues was primarily due to the increase in cost of
revenues.
Operating Expenses
Operating expenses (numbers in US$ 000's except for
percentages):
|
Quarter Ended
September 30,
2014
|
% of
Net
Revenues
|
|
Quarter Ended
June 30,
2014
|
% of
Net
Revenues
|
|
Quarter Ended
September 30,
2013
|
% of
Net
Revenues
|
|
Y/Y
Growth
rate
|
Q/Q
Growth
rate
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
6,022
|
9.7%
|
|
7,528
|
12.2%
|
|
5,600
|
8.2%
|
|
7.5%
|
-20.0%
|
General and
administrative expenses
|
5,628
|
9.0%
|
|
6,663
|
10.8%
|
|
6,565
|
9.6%
|
|
-14.3%
|
-15.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
11,650
|
18.7%
|
|
14,191
|
23.0%
|
|
12,165
|
17.8%
|
|
-4.2%
|
-17.9%
|
Total operating expenses for the third quarter of 2014 were
US$11.7 million, representing a
year-over-year decrease of 4.2% from US$12.2
million in the same period one year ago and a
quarter-over-quarter decrease of 17.9% from US$14.2 million in the previous quarter.
Share-based compensation expenses included in the total
operating expenses for the third quarter of 2014 were US$92,000, compared to US$269,000 in the same period one year ago and
US$934,000 in the previous quarter.
The year-over-year decrease was primarily due to the fact most
stock options except for some newly granted ones on June 1, 2014 and August 1,
2014, had fully vested. The quarter-over-quarter decrease
was primarily due to the fact that in the second quarter of 2014
the dates of expiration for certain stock options were extended to
July 11, 2016.
Selling and marketing expenses for the third quarter of 2014
were US$6.0 million. This represented
a year-over-year increase of 7.5% from US$5.6 million in the same period one year ago
and a quarter-over-quarter decrease of 20.0% from US$7.5 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 office and utility expenses. The quarter-over-quarter
decrease was primarily due to lower marketing expenses as compared
with the previous quarter.
General and administrative expenses for the third quarter of
2014 were US$5.6 million, including
share-based compensation expenses of US$92,000. This represented a year-over-year
decrease of 14.3% from US$6.6 million
in the same period one year ago and a quarter-over-quarter decrease
of 15.5% from US$6.7 million in the
previous quarter. The year-over-year and quarter-over-quarter
decreases were primarily due to lower professional fees, lower
share-based compensation expenses and lower bad-debt
provisions.
Loss from Operations
Loss from operations for the third quarter of 2014 was
US$9.4 million, compared to loss from
operations of US$3.6 million in the
same period one year ago and loss from operations of US$9.6 million in the previous quarter. Loss from
operations as a percentage of net revenues for the third quarter of
2014 was negative 15.1%, compared to negative 5.3% in the same
period one year ago and negative 15.5% in the previous quarter.
Income Tax Benefits/Expenses
Income tax benefits for the third quarter of 2014 were
US$597,000, compared to income tax
expenses of US$2.2 million in the
same period one year ago and income tax benefits of US$2.1 million in the previous quarter.
Net Loss Attributable to
AirMedia's Shareholders
Net loss attributable to AirMedia's shareholders for the third
quarter of 2014 was US$5.5 million,
compared to net loss attributable to AirMedia's shareholders of
US$3.5 million in the same period one
year ago and net loss attributable to AirMedia's shareholders of
US$5.4 million in the previous
quarter. The basic net loss attributable to AirMedia's shareholders
per ADS for the third quarter of 2014 was US$0.10, 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 loss attributable to AirMedia's shareholders per ADS of
US$0.10 in the previous quarter. The
diluted net loss attributable to AirMedia's shareholders per ADS
for the third quarter of 2014 was US$0.10, 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 loss attributable to AirMedia's shareholders per ADS of
US$0.10 in the previous quarter.
Adjusted EBITDA Attributable to AirMedia's
Shareholders
Adjusted EBITDA attributable to AirMedia's shareholders
(non-GAAP), which is EBITDA attributable to AirMedia's shareholders
excluding share-based compensation expenses, was a loss of
US$2.4 million, compared to adjusted
EBITDA attributable to AirMedia's shareholders (non-GAAP) of
US$4.0 million in the same period one
year ago and adjusted EBITDA attributable to AirMedia's
shareholders (non-GAAP) of a loss of US$3.7
million in the previous quarter.
Please refer to the attached table captioned "Reconciliation of
GAAP Net Loss to Adjusted EBITDA" for a reconciliation of net loss
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$101.4 million as of September 30, 2014, compared to US$113.0 million as of December 31, 2013.
Other Recent Developments
On November 1, 2014, AirMedia
commenced operations of a mega-size LED screen above security check
areas at Qingdao Jiaodong International Airport.
On October 17, 2014, AirMedia
started to sell advertisement slots on a mega-size LED screen above
security check areas at Nanning Wuxu International Airport.
On September 25, 2014, AirMedia
commenced operations of eight mega-size LED screens above security
check areas at Sanya Phoenix International Airport.
In September 2014, AirMedia
participated in the capital injection of Sinopec Marketing Co.,
Ltd. as a strategic investor.
In the third quarter 2014, AirMedia obtained concession rights
to exclusively install and operate Wi-Fi system on high speed
trains including D-prefaced bullet trains operated by Shanghai
Railway Bureau.
In the third quarter 2014, AirMedia obtained concession rights
to exclusively install and operate Wi-Fi system on ordinary speed
trains operated by Xinjiang Railway Bureau.
On August 29, 2014, AirMedia
commenced operations of a mega-size LED screen above security check
areas, 39 stand-alone digital frames and 43 sets of digital TV
screens at Terminal 2 of Tianjin Binhai International Airport.
Business Outlook
AirMedia currently expects its net revenues for the fourth
quarter of 2014 to range from US$66.0
million to US$68.0 million, representing a year-over-year
decrease of 14.5% to a year-over-year decrease of 11.9% from the
same period in 2013 and a quarter-over-quarter increase of 6.1% to
a quarter-over-quarter increase of 9.3% from the previous
quarter.
AirMedia currently expects its concession fees to be
approximately US$47.0 million in the
fourth quarter of 2014, representing a quarter-over-quarter
increase of 6.6% 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
September 30,
2014
|
|
Quarter Ended
June 30,
2014
|
|
Quarter Ended
September 30,
2013
|
|
Y/Y
Growth
Rate
|
|
Q/Q
Growth
Rate
|
Digital frames in
airports
|
|
|
|
|
|
|
|
|
|
Number of
airports in operation
|
26
|
|
31
|
|
37
|
|
-29.7%
|
|
-16.1%
|
Number of time
slots available for sale (2)
|
43,984
|
|
39,914
|
|
36,581
|
|
20.2%
|
|
10.2%
|
Number of time
slots sold (3)
|
12,991
|
|
10,954
|
|
15,157
|
|
-14.3%
|
|
18.6%
|
Utilization
rate (4)
|
29.5%
|
|
27.4%
|
|
41.4%
|
|
-11.9%
|
|
2.1%
|
Average
advertising revenue per time slot sold (5)
|
US$2,615
|
|
US$2,922
|
|
US$2,593
|
|
0.8%
|
|
-10.5%
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens
in airports
|
|
|
|
|
|
|
|
|
|
Number of
airports in operation
|
26
|
|
30
|
|
33
|
|
-21.2%
|
|
-13.3%
|
Number of time
slots available for sale (1)
|
16,823
|
|
16,640
|
|
16,640
|
|
1.1%
|
|
1.1%
|
Number of time
slots sold (3)
|
7,147
|
|
5,440
|
|
4,268
|
|
67.5%
|
|
31.4%
|
Utilization
rate (4)
|
42.5%
|
|
32.7%
|
|
25.6%
|
|
16.9%
|
|
9.8%
|
Average
advertising revenue per time slot sold (5)
|
US$541
|
|
US$447
|
|
US$844
|
|
-35.9%
|
|
21.0%
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens
on airplanes
|
|
|
|
|
|
|
|
|
|
Number of
airlines in operation
|
7
|
|
7
|
|
7
|
|
0.0%
|
|
0.0%
|
Number of time
slots available for sale (1)
|
409
|
|
405
|
|
371
|
|
10.2%
|
|
1.0%
|
Number of time
slots sold (3)
|
153
|
|
118
|
|
153
|
|
0.0%
|
|
29.7%
|
Utilization
rate (4)
|
37.4%
|
|
29.1%
|
|
41.2%
|
|
-3.8%
|
|
8.3%
|
Average
advertising revenue per time slot sold (5)
|
US$30,092
|
|
US$29,407
|
|
US$28,993
|
|
3.8%
|
|
2.3%
|
|
|
|
|
|
|
|
|
|
|
Traditional Media
in airports
|
|
|
|
|
|
|
|
|
|
Numbers of locations
available for sale (6)
|
981
|
|
981
|
|
951
|
|
3.2%
|
|
0.0%
|
Numbers of locations
sold (7)
|
476
|
|
526
|
|
560
|
|
-15.0%
|
|
-9.5%
|
Utilization rate
(8)
|
48.5%
|
|
53.6%
|
|
58.9%
|
|
-10.4%
|
|
-5.1%
|
Average advertising
revenue per location sold (9)
|
US$29,290
|
|
US$27,278
|
|
US$23,673
|
|
23.7%
|
|
7.4%
|
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 third
quarter 2014 earnings at 8:00 PM U.S.
Eastern Time on November 17, 2014
(5:00 PM U.S. Pacific Time on
November 17, 2014; 9:00 AM Beijing/Hong
Kong time on November 18,
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.: +1 800 742 9301
Hong Kong: +852 800 906 648
International: +61 283 733 610
Pass code: AMCN
A replay of the call will be available for 1 week between
11:00 p.m. on November 17, 2014 and 11:59 p.m. on November 24,
2014, Eastern Time.
Replay Dial-in Information
U.S.: +1 855 452 5696
International: +61 2 8199 0299
Pass code: 31870715
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 26 major airports and digital
TV screens in 26 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)
|
|
|
|
|
|
|
|
|
September 30,
2014
|
December 31,
2013
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
|
73,917
|
59,652
|
|
Restricted
cash
|
|
13,599
|
10,366
|
|
Short-term
investments
|
|
13,930
|
42,949
|
|
Accounts receivable,
net
|
|
95,920
|
107,529
|
|
Notes
receivable
|
|
2,936
|
1,901
|
|
Prepaid concession
fees
|
|
28,342
|
29,307
|
|
Amount due from
related party
|
|
4,398
|
187
|
|
Other current
assets
|
|
24,058
|
20,437
|
|
Deferred tax assets -
current
|
|
3,204
|
2,776
|
|
Total current
assets
|
|
260,304
|
275,104
|
|
Prepaid property and
equipment costs
|
|
47,616
|
49,415
|
|
Property and
equipment, net
|
|
50,170
|
36,084
|
|
Long-term
deposits
|
|
19,335
|
20,497
|
|
Deferred tax assets -
non-current
|
|
14,774
|
11,755
|
|
Long-term
investments
|
|
8,582
|
7,829
|
|
Intangible assets,
net
|
|
888
|
1,446
|
|
Other non-current
assets
|
|
6,590
|
661
|
|
Total
assets
|
|
408,259
|
402,791
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term loan
(including short-term loan of the consolidated
|
|
|
|
|
variable interest
entities without recourse to AirMedia Group Inc.
|
|
|
|
|
nil and nil as of
December 31, 2013 and September 30, 2014,
|
|
|
|
|
respectively)
|
|
3,000
|
-
|
|
Accounts payable
(including accounts payable of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group
Inc. $75,182 and $86,815 as of December 31,
|
|
|
|
|
2013 and
September 30, 2014, respectively)
|
|
93,197
|
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 $9,616 as of December 31,
|
|
|
|
|
2013 and
September 30, 2014, respectively)
|
|
11,283
|
10,883
|
|
Deferred revenue
(including deferred revenue of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group
Inc. $17,374 and $13,689 as of December 31
|
|
|
|
|
2013 and
September 30, 2014, respectively)
|
|
13,696
|
17,380
|
|
Income tax payable
(including income tax payable of the
|
|
|
|
|
consolidated
variable interest entities without recourse to
|
|
|
|
|
AirMedia Group
Inc. $455 and $853 as of December 31,
|
|
|
|
|
2013 and
September 30, 2014, respectively)
|
|
853
|
1,667
|
|
Total current
liabilities
|
|
122,029
|
111,087
|
|
Other non-current
liabilities (including other non-current
|
|
|
|
|
liabilities of
the consolidated variable interest entities without
recourse
|
|
|
|
|
recourse to
AirMedia Group Inc. nil and $1,271 as of December
|
|
|
|
|
31, 2013 and
September 30, 2014, respectively)
|
|
1,271
|
-
|
|
Deferred tax liability
- non-current (including deffered tax liability-
|
|
|
|
|
non-current of the
consolidated variable interest entities variable
|
|
|
|
|
interest entities
without recourse to AirMedia Group Inc.$361 and
|
|
|
|
|
$222 as of December
31, 2013 and September 30, 2014,respectively)
|
|
222
|
361
|
|
Total
liabilities
|
|
123,522
|
111,448
|
|
Equity
|
|
|
|
|
Ordinary
shares
|
|
128
|
128
|
|
Additional paid-in
capital
|
|
323,076
|
313,912
|
|
Treasury
stock
|
|
(9,724)
|
(9,860)
|
|
Statutory
reserves
|
|
10,968
|
10,968
|
|
Accumulated
deficits
|
|
(98,902)
|
(84,411)
|
|
Accumulated other
comprehensive income
|
|
36,506
|
40,229
|
|
Total AirMedia
Group Inc.'s shareholders' equity
|
|
262,052
|
270,966
|
|
Noncontrolling
interests
|
|
22,685
|
20,377
|
|
Total
equity
|
|
284,737
|
291,343
|
|
Total liabilities
and equity
|
|
408,259
|
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
|
|
|
September 30,
2014
|
June 30,
2014
|
September 30,
2013
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
62,864
|
62,062
|
69,043
|
Business tax and
other sales tax
|
|
(657)
|
(582)
|
(976)
|
Net
revenues
|
|
62,207
|
61,480
|
68,067
|
Cost of
revenues
|
|
59,931
|
56,847
|
59,523
|
Gross
profit
|
|
2,276
|
4,633
|
8,544
|
Operating
expenses:
|
|
|
|
|
Selling and
marketing *
|
|
6,022
|
7,528
|
5,600
|
General and
administrative *
|
|
5,628
|
6,663
|
6,565
|
Total operating
expenses
|
|
11,650
|
14,191
|
12,165
|
Loss from
operations
|
|
(9,374)
|
(9,558)
|
(3,621)
|
Interest income,
net
|
|
298
|
439
|
347
|
Other income,
net
|
|
834
|
607
|
1,603
|
Loss before income
taxes
|
|
(8,242)
|
(8,512)
|
(1,671)
|
Income tax
benefits/(expenses)
|
|
597
|
2,083
|
(2,171)
|
Net loss before net
income of equity method investments
|
|
(7,645)
|
(6,429)
|
(3,842)
|
Net (loss)/income of
equity method investments
|
|
(36)
|
57
|
(68)
|
Net
loss
|
|
(7,681)
|
(6,372)
|
(3,910)
|
Less: Net loss
attributable to noncontrolling interests
|
|
(2,143)
|
(928)
|
(375)
|
Net loss
attributable to AirMedia Group Inc.'s shareholders
|
|
(5,538)
|
(5,444)
|
(3,535)
|
Net loss attributable
to AirMedia Group Inc.'s shareholders per ordinary share
|
|
|
|
|
Basic
|
|
(0.05)
|
(0.05)
|
(0.03)
|
Diluted
|
|
(0.05)
|
(0.05)
|
(0.03)
|
Net loss attributable
to AirMedia Group Inc.'s shareholders per ADS
|
|
|
|
|
Basic
|
|
(0.10)
|
(0.10)
|
(0.06)
|
Diluted
|
|
(0.10)
|
(0.10)
|
(0.06)
|
Weighted average
ordinary shares outstanding used in computing net loss per ordinary
share - basic
|
|
119,247,547
|
119,221,372
|
119,683,926
|
Weighted average
ordinary shares outstanding used in computing net loss per ordinary
share - diluted
|
|
119,247,547
|
119,221,372
|
119,683,926
|
* Share-based
compensation charges included are as follow:
|
|
|
|
|
Selling and
marketing
|
|
-
|
144
|
-
|
General and
administrative
|
|
92
|
790
|
269
|
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
|
|
September 30,
2014
|
June 30,
2014
|
September 30,
2013
|
Net loss
|
(7,681)
|
(6,372)
|
(3,910)
|
Other comprehensive
income (loss)
|
3,045
|
589
|
742
|
Comprehensive
loss
|
(4,636)
|
(5,783)
|
(3,168)
|
Less: comprehensive
(loss) income attributable to the noncontrolling
interest
|
(1,898)
|
(877)
|
(374)
|
Comprehensive loss
attributable to AirMedia Group Inc.'s shareholders
|
(2,738)
|
(4,906)
|
(2,794)
|
AirMedia Group
Inc.
|
RECONCILIATION OF
GAAP NET LOSS TO ADJUSTED EBITDA
|
(In U.S. dollars
in thousands, except share and ADS related data)
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2014
|
June 30,
2014
|
September 30,
2013
|
|
|
|
|
|
|
|
|
Net loss
attributable to AirMedia Group Inc.'s shareholders
(GAAP)
|
(5,538)
|
(5,444)
|
(3,535)
|
Interest income,
net
|
(298)
|
(439)
|
(347)
|
Income tax
expense/(benefit)
|
(597)
|
(2,083)
|
2,171
|
Depreciation
|
3,876
|
3,092
|
5,238
|
Amortization of
acquired intangible assets
|
72
|
229
|
210
|
|
|
|
|
EBITDA
attributable to AirMedia Group Inc.'s shareholders
(non-GAAP)
|
(2,485)
|
(4,645)
|
3,737
|
Share-based
compensation
|
92
|
934
|
269
|
Adjusted EBITDA
attributable to AirMedia Group Inc.'s shareholders
(non-GAAP)
|
(2,393)
|
(3,711)
|
4,006
|
SOURCE AirMedia Group Inc.