BEIJING, May 18, 2015 /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, as
well as a first-mover in the in-flight and on-train Wi-Fi market,
today announced its unaudited financial results for the first
quarter ended March 31, 2015.
First Quarter 2015 Financial Highlights
- Total revenues decreased by 3.8% year-over-year and 9.7%
quarter-over-quarter to US$61.0
million.
- Net revenues decreased by 4.4% year-over-year and 8.4%
quarter-over-quarter to US$60.3
million, exceeding the upper end of the Company's previous
guidance by US$4.3 million.
- Net loss attributable to AirMedia's shareholders was
US$5.7 million. Basic and diluted net
loss attributable to AirMedia's shareholders per American
Depositary Share ("ADS") were both US$0.10. The year-over-year increase in net loss
attributable to AirMedia's shareholders was partially due to income
tax expenses of US$1.9 million in the
first quarter of 2015, compared to income tax benefits of
US$4,000 in the same period one year
ago.
- 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$317,000, compared to a loss of
US$422,000 in the same period one
year ago.
"As you know, we endeavor to transform into a leading in-flight
and on-train Wi-Fi operator in China. We would like to capitalize on the sale
of our advertising business at a much more attractive valuation to
companies in China so that we can
focus our resources on the exciting Wi-Fi business. We are excited
about the agreement with Shenzhen Liantronics Co., Ltd. to sell 5%
equity interest of our advertising business for a consideration of
RMB150 million in cash. We intend to
sell the remaining equity interest of our advertising business in
the foreseeable future. We are in the process of restructuring our
advertising business according to the aforementioned agreement.
Meanwhile, we are also discussing with other unrelated third
parties who expressed interest in buying our advertising business,"
commented Mr. Herman Guo, chairman
and chief executive officer of AirMedia.
"The first quarter is usually the weakest quarter of a year in
advertising industry. Our divestiture of two unprofitable product
lines helped us reduce the loss of adjusted EBITDA attributable to
AirMedia Group Inc.'s shareholders (non-GAAP) in the first quarter
of 2015 year-over-year and quarter-over-quarter during a soft
economic environment and advertising market," continued Mr. Guo.
"We saw a decrease in revenues from our gas station media network
in the first quarter, which, coupled with larger amounts of
depreciation of LED screens installed in gas stations, resulted in
more losses from this product line. Although we expect revenues
from this product line to increase with the expansion of the
network of LED screens, as we are focusing more on Wi-Fi business,
we intend to take more active action to reduce the loss from this
product line."
"We made solid developments in our on-train Wi-Fi business. We
recently obtained exclusive rights to install and operate Wi-Fi
systems on the ordinary trains operated by Shanghai Railway Bureau
and Jinan Railway Bureau. We expect to continue to obtain more
concession rights and further improve our market position in
on-train Wi-Fi business," continued Mr. Guo.
"We are happy that our top line results exceeded guidance. Our
divestiture of two unprofitable product lines was instrumental for
us to achieve improved adjusted EBITDA. In addition, our
divestiture of TV-attached digital frames only had two month impact
in the first quarter of 2015. We expect it to have full-quarter
positive impacts on our earnings in the following quarters. Our
intended sale of our advertising business is expected to strengthen
our cash position and provide capital support for our new Wi-Fi
businesses," Mr. Richard Wu,
AirMedia's chief financial officer, commented.
First Quarter 2015 Financial Results
Revenues
Total revenues by product line (numbers in US$ 000's except for
percentages):
|
|
Quarter
Ended
March
31, 2015
|
% of Total
Revenues
|
|
Quarter
Ended
December
31, 2014
|
% of Total
Revenues
|
|
Quarter
Ended March
31, 2014
|
% of Total
Revenues
|
|
Y/Y
Growth
rate
|
|
Q/Q
Growth
rate
|
Air Travel Media
Network
|
|
56,197
|
92.1%
|
|
60,972
|
90.3%
|
|
58,072
|
91.6%
|
|
-3.2%
|
|
-7.8%
|
Digital frames in airports
|
|
31,962
|
52.4%
|
|
37,367
|
55.3%
|
|
35,183
|
55.5%
|
|
-9.2%
|
|
-14.5%
|
Digital TV screens in airports
|
|
2,047
|
3.4%
|
|
4,283
|
6.3%
|
|
2,706
|
4.3%
|
|
-24.4%
|
|
-52.2%
|
Digital TV screens on airplanes
|
|
3,608
|
5.9%
|
|
3,864
|
5.7%
|
|
4,274
|
6.7%
|
|
-15.6%
|
|
-6.6%
|
Traditional media in airports
|
|
13,204
|
21.6%
|
|
13,798
|
20.4%
|
|
14,635
|
23.1%
|
|
-9.8%
|
|
-4.3%
|
Other revenues in air travel
|
|
5,376
|
8.8%
|
|
1,660
|
2.6%
|
|
1,274
|
2.0%
|
|
322.0%
|
|
223.9%
|
Gas Station Media
Network
|
|
2,249
|
3.7%
|
|
2,897
|
4.3%
|
|
2,754
|
4.3%
|
|
-18.3%
|
|
-22.4%
|
Other
Media
|
|
2,573
|
4.2%
|
|
3,668
|
5.4%
|
|
2,582
|
4.1%
|
|
-0.3%
|
|
-29.9%
|
Total
revenues
|
|
61,019
|
100.0%
|
|
67,537
|
100.0%
|
|
63,408
|
100.0%
|
|
-3.8%
|
|
-9.7%
|
Net
revenues
|
|
60,258
|
|
|
65,794
|
|
|
63,000
|
|
|
-4.4%
|
|
-8.4%
|
Total revenues for the first quarter of 2015 reached
US$61.0 million, representing a
year-over-year decrease of 3.8% from US$63.4
million in the same period one year ago and a
quarter-over-quarter decrease of 9.7% from US$67.5 million in the previous quarter. The
year-over-year and quarter-over-quarter decreases were primarily
due to decreases in revenues from most product lines other than
other revenues in air travel.
In February 2015, AirMedia
transferred 81% equity interest of Beijing AirMedia Jinsheng
Advertising Co., Ltd. ("Jinsheng Advertising"), the operating
entity of its TV-attached digital frames business, to Beijing
Tianyi Culture Development Co., Ltd., a third party unrelated to
AirMedia. In connection with such equity interest transfer,
AirMedia has transferred all relevant assets, liabilities and
managerial duties related to the TV-attached digital frames to
Jinsheng Advertising with net carrying value of US$1.1 million. AirMedia has transferred part of
its concession rights related to the TV-attached digital frames to
Jinsheng Advertising and will continue to transfer the rest of such
concession rights as AirMedia receives the necessary consents from
the respective airports. Due to recent business developments and
considerations, AirMedia has also transferred some of its
concession rights related to digital TV screens in airports to
Jinsheng Advertising and plans to continue to transfer the rest of
such concession rights as AirMedia receives the necessary consents
from the respective airports. Prior to the full completion of such
transfers, AirMedia authorizes Jinsheng Advertising to operate
TV-attached digital frames and digital TV screens in airport
business under entrustment.
Revenues from digital frames in airports
Revenues from digital frames in airports for the first quarter
of 2015 decreased by 9.2% year-over-year and by 14.5%
quarter-over-quarter to US$32.0
million. The year-over-year decrease was primarily due to a
soft advertising market and the divestiture of TV-attached digital
frames. The quarter-over-quarter decrease was primarily due to a
seasonally weak quarter in the first quarter of 2015 and the
divestiture of TV-attached digital frames.
Revenues from digital TV screens in airports
During the transition period of the divestiture, some
advertising contracts signed by AirMedia's sales team were carried
forward after the share transfer. As a result, AirMedia still
booked revenues from these contracts in the line of revenues from
digital TV screens in airports. Revenues from digital TV screens in
airports for the first quarter of 2015 decreased by 24.4%
year-over-year and by 52.2% quarter-over-quarter to US$2.0 million. The year-over-year and
quarter-over-quarter decreases were primarily due to the
divestiture of digital TV screens in airports.
Revenues from digital TV screens on airplanes
Revenues from digital TV screens on airplanes for the first
quarter of 2015 decreased by 15.6% year-over-year and by 6.6%
quarter-over-quarter to US$3.6
million. The year-over-year decrease of revenues from
digital TV screens on airplanes was primarily due to a soft
advertising market and a decrease in advertisers' demand for
digital TV screens as a result of more choices of in-flight
entertainment. 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 2015.
Revenues from traditional media in airports
Revenues from traditional media in airports for the first
quarter of 2015 decreased by 9.8% year-over-year and by 4.3%
quarter-over-quarter to US$13.2
million. The year-over-year decrease was primarily because
AirMedia had terminated the operations of all billboards and
painted advertisements on gate bridges. The quarter-over-quarter
decrease was primarily due to a seasonally weak quarter in the
first quarter of 2015.
Other revenues in air travel
Other revenues in air travel for the first quarter of 2015
increased by 322.0% year-over-year and by 223.9%
quarter-over-quarter to US$5.4
million. The year-over-year and quarter-over-quarter
increases were primarily due to revenues from Jinsheng Advertising
for operating TV-attached digital frames and digital TV screens in
airport business under entrustment pending the completion of
transfer of relevant concession rights.
Revenues from the gas station media network
Revenues from the gas station media network for the first
quarter of 2015 decreased by 18.3% year-over-year and by 22.4%
quarter-over-quarter to US$2.2
million. The year-over-year decrease was primarily due to a
soft advertising market. The quarter-over-quarter decrease was
primarily due to a seasonally weak quarter in the first quarter of
2015.
As of May 17, 2015, AirMedia
operated LED screens in 745 gas stations in 23 cities.
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 first quarter of 2015 remained relatively unchanged
year-over-year and decreased by 29.9% quarter-over-quarter to
US$2.6 million. The
quarter-over-quarter decrease was primarily because we recorded
large amounts of one-off revenues from film distribution and film
investment in the previous quarter.
Business tax and other sales tax
Business tax and other sales tax for the first quarter of 2015
were US$761,000, compared to
US$408,000 in the same period one
year ago and US$1.7 million in the
previous quarter.
Net revenues
Net revenues for the first quarter of 2015 reached US$60.3 million, representing a year-over-year
decrease of 4.4% from US$63.0 million
in the same period one year ago and a quarter-over-quarter decrease
of 8.4% from US$65.8 million in the
previous quarter.
Cost of Revenues
Cost of revenues for the first quarter of 2015 was US$58.6 million, which reflected a year-over-year
increase of 2.4% from US$57.2 million
and a quarter-over-quarter decrease of 5.2% from US$61.8 million in the previous quarter. The
year-over-year increase was primarily due to higher concession
fees, which were partially offset by lower agency fees for
third-party advertising agencies. The quarter-over-quarter decrease
was primarily due to lower concession fees and lower agency fees
for third-party advertising agencies in the first quarter of 2015.
Cost of revenues as a percentage of net revenues in the first
quarter of 2015 was 97.2%, up from 90.9% in the same period one
year ago and 94.0% 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, to other media resources owners for placing
unipole signs and other outdoors media and to railway bureaus for
operating Wi-Fi services on trains.
Concession fees for the first quarter of 2015 increased by 7.5%
year-over-year and decreased by 1.5% quarter-over-quarter to
US$45.8 million. The year-over-year
increase was primarily due to newly signed or renewed concession
rights contracts during the period. The quarter-over-quarter
decrease was primarily due to the decrease in concession fees of
certain concession rights of digital TV screens in airports and
TV-attached digital frames, which have been transferred to Jinsheng
Advertising. Until all relevant concession rights are transferred,
AirMedia still needs to book the concession fees of concession
rights of digital TV screens in airports and TV-attached digital
frames which have not been transferred to Jinsheng Advertising.
Concession fees as a percentage of net revenues in the first
quarter of 2015 was 76.0%, increasing from 67.6% in the same period
one year ago and 70.6% in the previous quarter. The year-over-year
increase of concession fees as a percentage of net revenues was
primarily due to the fact that net revenues decreased while
concession fees increased. 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
in the first quarter of 2015.
Gross Profit
Gross profit for the first quarter of 2015 was US$1.7 million, compared to gross profit of
US$5.8 million in the year-ago
quarter and US$4.0 million in the
previous quarter.
Gross profit as a percentage of net revenues for the first
quarter of 2015 was 2.8%, compared to 9.1% in the same period one
year ago and 6.0% in the previous quarter. The year-over-year
decrease in gross profit as a percentage of net revenues was
primarily due to the fact that net revenues decreased while the
cost of revenues increased. The quarter-over-quarter decrease in
gross profit as a percentage of net revenues was primarily due to
the fact that net revenues decreased faster than cost of
revenues.
Operating Expenses
Operating expenses (numbers in US$ 000's except for
percentages):
|
Quarter
Ended
March
31, 2015
|
% of Net
Revenues
|
|
Quarter
Ended
December
31, 2014
|
% of Net
Revenues
|
|
Quarter
Ended
March
31, 2014
|
% of Net
Revenues
|
|
Y/Y
Growth
rate
|
Q/Q
Growth
rate
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
5,008
|
8.3%
|
|
6,465
|
9.8%
|
|
5,052
|
8.0%
|
|
-0.9%
|
-22.5%
|
General and
administrative expenses
|
2,504
|
4.2%
|
|
8,192
|
12.5%
|
|
5,854
|
9.3%
|
|
-57.2%
|
-69.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
7,512
|
12.5%
|
|
14,657
|
22.3%
|
|
10,906
|
17.3%
|
|
-31.1%
|
-48.7%
|
Total operating expenses for the first quarter of 2015 were
US$7.5 million, which decreased by
31.1% from US$10.9 million in the
same period one year ago and 48.7% quarter-over-quarter from
US$14.7 million in the previous
quarter.
Share-based compensation expenses included in the total
operating expenses for the first quarter of 2015 were US$91,000, compared to US$242,000 in the same period one year ago and
US$91,000 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.
Selling and marketing expenses for the first quarter of 2015
were US$5.0 million. This remained
relatively unchanged from the same period one year ago and
decreased by 22.5% from US$6.5
million in the previous quarter. The quarter-over-quarter
decrease was primarily due to lower marketing expenses and lower
sales commissions for the Company's direct sales force.
General and administrative expenses for the first quarter of
2015 were US$2.5 million. This
represented a year-over-year decrease of 57.2% from US$5.9 million in the same period one year ago
and a quarter-over-quarter decrease of 69.4% from US$8.2 million in the previous quarter. The
year-over-year and quarter-over-quarter decreases were primarily
due to a reversal of bad-debt provisions in the first quarter of
2015.
Loss from Operations
Loss from operations for the first quarter of 2015 was
US$5.8 million, compared to loss from
operations of US$5.1 million in the
same period one year ago and loss from operations of US$10.7 million in the previous quarter. Loss
from operations as a percentage of net revenues for the first
quarter of 2015 was negative 9.7%, compared to negative 8.2% in the
same period one year ago and negative 16.2% in the previous
quarter.
Income Tax Expenses/Benefits
Income tax expenses for the first quarter of 2015 were
US$1.9 million, compared to income
tax benefits of US$4,000 in the same
period one year ago and income tax expenses of US$3.1 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 2015 was US$5.7 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$11.2 million in the previous
quarter. The basic net loss attributable to AirMedia's shareholders
per ADS for the first quarter of 2015 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$0.18 in the previous quarter. The
diluted net loss attributable to AirMedia's shareholders per ADS
for the first quarter of 2015 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$0.18 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$317,000, compared to adjusted
EBITDA attributable to AirMedia's shareholders (non-GAAP) of a loss
of US$422,000 in the same period one
year ago and adjusted EBITDA attributable to AirMedia's
shareholders (non-GAAP) of a loss of US$4.2
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 and cash equivalents, Restricted Cash and Short-term
Investments
Cash and cash equivalents, restricted cash and short-term
investments totaled US$64.3 million
as of March 31, 2015, compared to
US$99.6 million as of December 31, 2014. The decrease from December 31, 2014 was partially due to the equity
investment of US$8.1 million in the
capital injection of Sinopec Marketing Co., Ltd., and repayment of
short-term loan of US$3.0
million.
Other Recent Developments
In April 2015, AirMedia obtained
exclusive concession rights to install and operate Wi-Fi systems on
147 groups of ordinary trains operated by Shanghai Railway
Bureau.
In April 2015, AirMedia obtained
exclusive concession rights to install and operate Wi-Fi systems on
ordinary trains operated by Jinan Railway Bureau.
On April 7, 2015, Beijing Shengshi
Lianhe Advertising Co., Ltd., a variable interest entity in
China currently controlled by
AirMedia through contractual arrangements, entered into a share
transfer agreement to sell 5% equity interest of AirMedia Group
Co., Ltd. ("AM Advertising") to Shenzhen Liantronics Co., Ltd, a
company listed on the Shenzhen Stock Exchange (Shenzhen Stock
Exchange Code: 300269) for a consideration of RMB150 million in cash, which reflected the total
valuation of AM Advertising of RMB3
billion.
Business Outlook
AirMedia currently expects its net revenues for the second
quarter of 2015 to range from US$57.0
million to US$61.0 million, representing a year-over-year
decrease of 7.3% to 0.8% from the same period in 2014 and a
quarter-over-quarter decrease of 5.4% to a quarter-over-quarter
increase of 1.2% from the previous quarter.
AirMedia currently expects its concession fees to be
approximately US$45.0 million in the
second quarter of 2015, representing a quarter-over-quarter
decrease of 1.7% from the previous 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, 2015
|
|
Quarter
Ended
December
31, 2014
|
|
Quarter
Ended
March
31, 2014
|
|
Y/Y
Growth
Rate
|
|
Q/Q
Growth
Rate
|
Digital frames in
airports
|
|
|
|
|
|
|
|
|
|
Number of airports in operation
|
27
|
|
28
|
|
31
|
|
-12.9%
|
|
-3.6%
|
Number of time slots available for sale (2)
|
42,160
|
|
45,740
|
|
33,602
|
|
25.5%
|
|
-7.8%
|
Number of time slots sold (3)
|
12,610
|
|
13,742
|
|
14,551
|
|
-13.3%
|
|
-8.2%
|
Utilization rate (4)
|
29.9%
|
|
30.0%
|
|
43.3%
|
|
-13.4%
|
|
-0.1%
|
Average advertising revenue per time slot sold (5)
|
US$2,535
|
|
US$2,719
|
|
US$2,418
|
|
4.8%
|
|
-6.8%
|
|
|
|
|
|
|
|
|
|
|
Digital TV screens
in airports
|
|
|
|
|
|
|
|
|
|
Number of airports in operation
|
26
|
|
26
|
|
31
|
|
-16.1%
|
|
0.0%
|
Number of time slots available for sale (1)
|
14,400
|
|
16,823
|
|
16,457
|
|
-12.5%
|
|
-14.4%
|
Number of time slots sold (3)
|
977
|
|
4,497
|
|
4,090
|
|
-76.1%
|
|
-78.3%
|
Utilization rate (4)
|
6.8%
|
|
26.7%
|
|
24.9%
|
|
-18.1%
|
|
-19.9%
|
Average advertising revenue per time slot sold (5)
|
US$2,095
|
|
US$952
|
|
US$662
|
|
216.5%
|
|
120.1%
|
|
|
|
|
|
|
|
|
|
|
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)
|
420
|
|
405
|
|
409
|
|
2.7%
|
|
3.7%
|
Number of time slots sold (3)
|
119
|
|
146
|
|
141
|
|
-15.6%
|
|
-18.5%
|
Utilization rate (4)
|
28.3%
|
|
36.0%
|
|
34.5%
|
|
-6.2%
|
|
-7.7%
|
Average advertising revenue per time slot sold (5)
|
US$30,319
|
|
US$26,466
|
|
US$30,312
|
|
0.0%
|
|
14.6%
|
|
|
|
|
|
|
|
|
|
|
Traditional Media
in airports
|
|
|
|
|
|
|
|
|
|
Numbers of locations available for sale (6)
|
738
|
|
995
|
|
995
|
|
-25.8%
|
|
-25.8%
|
Numbers of locations sold (7)
|
435
|
|
452
|
|
518
|
|
-16.0%
|
|
-3.8%
|
Utilization rate (8)
|
58.9%
|
|
45.4%
|
|
52.1%
|
|
6.8%
|
|
13.5%
|
Average advertising revenue per location sold (9)
|
US$30,354
|
|
US$30,527
|
|
US$28,253
|
|
7.4%
|
|
-0.6%
|
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 the number of light boxes and
billboards in Beijing,
Shenzhen, Wenzhou and certain
other airports (light boxes and billboards).
(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 2015 earnings at 8:00 PM U.S.
Eastern Time on May 18, 2015
(5:00 PM U.S. Pacific Time on
May 18, 2015; 8:00 AM Beijing/Hong
Kong time on May 19, 2015).
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
Hong Kong: +852 800 906 601
International: +65 6723 9381
China: +86 400 620 8038
Pass code: AMCN
A replay of the call will be available for 1 week between
11:00 p.m. on May 18, 2015 and 11:59
p.m. on May 26, 2015, Eastern
Time.
Replay Dial-in Information
U.S.: +1 646 254 3697
International: +61 2 8199 0299
Pass code: 33006791
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/(expense), 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, as
well as a first-mover in the in-flight and on-train Wi-Fi market.
AirMedia operates the largest digital media network in China dedicated to air travel advertising.
AirMedia operates digital frames in 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.
AirMedia, which is in the process of transforming into a leading
in-flight and on-train Wi-Fi operator in China, has obtained concession rights to
install and operate Wi-Fi systems on the airplanes operated by
Hainan Airlines Group and on the trains operated by several main
railway bureaus in China,
including Beijing Railway Bureau, Shanghai Railway Bureau and
Guangzhou Railway (Group) Corporation.
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,
in-flight internet services and in-air multimedia platform or 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,
2015
|
December
31,
2014
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
47,118
|
67,437
|
|
Restricted
cash
|
|
12,304
|
14,395
|
|
Short-term
investments
|
|
4,839
|
17,729
|
|
Accounts receivable,
net
|
|
90,027
|
84,993
|
|
Notes
receivable
|
|
1,157
|
2,673
|
|
Prepaid concession
fees
|
|
28,726
|
31,035
|
|
Amount due from
related parties
|
|
12,409
|
3,322
|
|
Other current
assets
|
|
26,847
|
25,620
|
|
Deferred tax assets -
current
|
|
2,268
|
1,585
|
|
Assets held for
sale
|
|
-
|
1,087
|
|
Total current
assets
|
|
225,695
|
249,876
|
|
Prepaid equipment
costs
|
|
33,925
|
45,176
|
|
Property and
equipment, net
|
|
63,965
|
50,329
|
|
Long-term
deposits
|
|
18,826
|
20,300
|
|
Deferred tax assets -
non-current
|
|
8,574
|
13,932
|
|
Long-term
investments
|
|
17,205
|
9,049
|
|
Acquired intangible
assets, net
|
|
3,089
|
807
|
|
Other non-current
assets
|
|
8,247
|
6,128
|
|
Total
assets
|
|
379,526
|
395,597
|
|
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, 2014 and March 31, 2015,
|
|
|
|
|
respectively)
|
|
-
|
3,000
|
|
Accounts payable
(including accounts payable of the
|
|
|
|
|
consolidated variable
interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$88,430 and $89,653 as of December 31,
|
|
|
|
|
2014 and March 31,
2015, respectively)
|
|
93,442
|
94,933
|
|
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.
$9,629 and $8,771 as of December 31,
|
|
|
|
|
2014 and March 31,
2015, respectively)
|
|
10,452
|
11,498
|
|
Deferred revenue
(including deferred revenue of the
|
|
|
|
|
consolidated variable
interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$13,517 and $12,632 as of December 31
|
|
|
|
|
2014 and March 31,
2015, respectively)
|
|
12,639
|
13,523
|
|
Income tax payable
(including income tax payable of the
|
|
|
|
|
consolidated variable
interest entities without recourse to
|
|
|
|
|
AirMedia Group Inc.
$963 and nil as of December 31,
|
|
|
|
|
2014 and March 31,
2015, respectively)
|
|
-
|
1,522
|
|
Amounts due to related
parties (including amounts due to
|
|
|
|
|
related parties of the
consolidated variable interest entities
|
|
|
|
|
without recourse to
AirMedia Group Inc. $790 and nil as
|
|
|
|
|
of December 31, 2014
and March 31, 2015, respectively)
|
|
-
|
790
|
|
Total current
liabilities
|
|
116,533
|
125,266
|
|
Other non-current
liabilities (including other non-current
|
|
|
|
|
liabilities of the
consolidated variable interest entities without recourse
|
|
|
|
|
to AirMedia Group Inc.
$1,257 and $1,258 as of December 31,
|
|
|
|
|
2014 and March 31,
2015, respectively)
|
|
1,258
|
1,257
|
|
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.$202 and
|
|
|
|
|
$184 as of December
31, 2014 and March 31, 2015, respectively)
|
|
184
|
202
|
|
Total
liabilities
|
|
117,975
|
126,725
|
|
Equity
|
|
|
|
|
Ordinary
shares
|
|
128
|
128
|
|
Additional paid-in
capital
|
|
323,259
|
323,167
|
|
Treasury
stock
|
|
(9,236)
|
(9,236)
|
|
Statutory
reserves
|
|
11,309
|
11,381
|
|
Accumulated
deficits
|
|
(116,130)
|
(110,519)
|
|
Accumulated other
comprehensive income
|
|
33,994
|
33,815
|
|
Total AirMedia
Group Inc.'s shareholders' equity
|
|
243,324
|
248,736
|
|
Noncontrolling
interests
|
|
18,227
|
20,136
|
|
Total
equity
|
|
261,551
|
268,872
|
|
Total liabilities
and equity
|
|
379,526
|
395,597
|
|
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,
2015
|
December
31,
2014
|
March
31,
2014
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
61,019
|
67,537
|
63,408
|
Business tax and
other sales tax
|
|
(761)
|
(1,743)
|
(408)
|
Net
revenues
|
|
60,258
|
65,794
|
63,000
|
Cost of
revenues
|
|
58,587
|
61,818
|
57,239
|
Gross
profit
|
|
1,671
|
3,976
|
5,761
|
Operating
expenses:
|
|
|
|
|
Selling and marketing *
|
|
5,008
|
6,465
|
5,052
|
General and administrative *
|
|
2,504
|
8,192
|
5,854
|
Total operating
expenses
|
|
7,512
|
14,657
|
10,906
|
Loss from
operations
|
|
(5,841)
|
(10,681)
|
(5,145)
|
Interest income,
net
|
|
229
|
20
|
583
|
Other income,
net
|
|
349
|
329
|
444
|
Loss before income
taxes
|
|
(5,263)
|
(10,332)
|
(4,118)
|
Income tax
(expenses)/benefits
|
|
(1,945)
|
(3,114)
|
4
|
Net loss before net
income of equity method investments
|
|
(7,208)
|
(13,446)
|
(4,114)
|
Net (loss)/income of
equity method investments
|
|
(390)
|
10
|
(223)
|
Net
loss
|
|
(7,598)
|
(13,436)
|
(4,337)
|
Less: Net loss
attributable to noncontrolling interests
|
|
(1,915)
|
(2,232)
|
(828)
|
Net loss
attributable to AirMedia Group Inc.'s shareholders
|
|
(5,683)
|
(11,204)
|
(3,509)
|
Net loss attributable
to AirMedia Group Inc.'s shareholders per ordinary share
|
|
|
|
|
Basic
|
|
(0.05)
|
(0.09)
|
(0.03)
|
Diluted
|
|
(0.05)
|
(0.09)
|
(0.03)
|
Net loss attributable
to AirMedia Group Inc.'s shareholders per ADS
|
|
|
|
|
Basic
|
|
(0.10)
|
(0.18)
|
(0.06)
|
Diluted
|
|
(0.10)
|
(0.18)
|
(0.06)
|
Weighted average
ordinary shares outstanding used in computing net loss per ordinary
share - basic
|
|
119,926,971
|
119,593,908
|
119,152,038
|
Weighted average
ordinary shares outstanding used in computing net loss per ordinary
share - diluted
|
|
119,926,971
|
119,593,908
|
119,152,038
|
* Share-based
compensation charges included are as follow:
|
|
|
|
|
Selling and
marketing
|
|
-
|
-
|
-
|
General and
administrative
|
|
91
|
91
|
242
|
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
|
|
March
31,
|
December
31,
|
March
31,
|
|
2015
|
2014
|
2014
|
Net
loss
|
(7,598)
|
(13,436)
|
(4,337)
|
Other comprehensive
income/(loss)
|
185
|
(2,924)
|
(7,584)
|
Comprehensive
loss
|
(7,413)
|
(16,360)
|
(11,921)
|
Less: comprehensive
loss attributable to the noncontrolling interest
|
(1,909)
|
(2,465)
|
(1,351)
|
Comprehensive loss
attributable to AirMedia Group Inc.'s shareholders
|
(5,504)
|
(13,895)
|
(10,570)
|
|
|
|
|
|
|
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
|
|
March
31,
|
December
31,
|
March
31,
|
|
2015
|
2014
|
2014
|
|
|
|
|
|
|
|
|
Net loss
attributable to AirMedia Group Inc.'s shareholders
(GAAP)
|
(5,683)
|
(11,204)
|
(3,509)
|
Interest income,
net
|
(229)
|
(20)
|
(583)
|
Depreciation
|
3,421
|
3,758
|
3,199
|
Income tax
expenses/(benefits)
|
1,945
|
3,114
|
(4)
|
Amortization of
acquired intangible assets
|
138
|
72
|
233
|
EBIDTA
attributable to AirMedia Group Inc.'s shareholders
(non-GAAP)
|
(408)
|
(4,280)
|
(664)
|
Share-based
compensation
|
91
|
91
|
242
|
Adjusted EBIDTA
attributable to AirMedia Group Inc.'s shareholders
(non-GAAP)
|
(317)
|
(4,189)
|
(422)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/airmedia-announces-unaudited-first-quarter-2015-financial-results-300084938.html
SOURCE AirMedia Group Inc.