BEIJING, Nov. 10 /PRNewswire-Asia-FirstCall/ -- AirMedia Group Inc.
("AirMedia" or the "Company") (NASDAQ:AMCN), a leading operator of
out-of-home advertising platforms in China targeting
mid-to-high-end consumers, today announced its unaudited financial
results for the third quarter ended September 30, 2009. Third
Quarter 2009 Financial and Business Highlights -- Total revenues
increased by 11.9% year-over-year to US$37.7 million. -- Net loss
attributable to AirMedia's shareholders was US$9.6 million. Basic
and diluted loss attributable to AirMedia's shareholders per
American Depositary Share ("ADS") were both US$0.15. -- Adjusted
net loss attributable to AirMedia's shareholders (non-GAAP), which
is net loss attributable to AirMedia's shareholders excluding
share-based compensation expenses and amortization of acquired
intangible assets, was US$7.0 million. Adjusted basic and diluted
net loss attributable to AirMedia's shareholders per ADS (non-GAAP)
were both US$0.11. "We achieved continued revenue growth during the
third quarter with higher quarter-over-quarter utilization rates
for most of our product lines, which reflected improving demands
from advertisers," said Herman Guo, chairman and chief executive
officer of AirMedia. "We also made several achievements on media
expansion during the quarter. With the commencement of operations
of several new product lines in Beijing, Shanghai and Guangzhou
airports, we significantly enhanced our media presence in the top
four airports in China, which we believe has prepared us well to
meet the increasing demands from advertisers resulting from
continuously improving economic conditions and the upcoming World
EXPO 2010 in Shanghai, China." Conor Yang, AirMedia's chief
financial officer, added, "During the third quarter, the newly
acquired traditional media spaces in Beijing and Shenzhen airports
ramped up in revenues. We were also able to lower concession fees
in four airports. Following upon our recent strategic expansions,
we will continue to focus on revenue growth and concession fee
management in the next few quarters." Financial Results Revenues
Total revenues by product line (numbers in US$ 000's except for
percentages): Quarter Quarter Ended % of Ended % of September Total
June 30, Total 30, 2009 Revenues 2009 Revenues Digital frames in
airports 17,059 45.2% 16,474 44.7% Digital TV screens in airports
8,412 22.3% 9,117 24.8% Digital TV screens on airplanes 4,053 10.7%
3,932 10.7% Traditional media in airports 7,304 19.4% 5,680 15.4%
Other displays 898 2.4% 1,616 4.4% Total revenues 37,726 100.0%
36,819 100.0% Net revenues 37,174 36,295 Quarter Ended % of Y/Y Q/Q
September Total Growth Growth 30, 2008 Revenues rate rate Digital
frames in airports 10,114 30.0% 68.7% 3.6% Digital TV screens in
airports 13,079 38.8% -35.7% -7.7% Digital TV screens on airplanes
6,586 19.5% -38.5% 3.1% Traditional media in airports 1,975 5.9%
269.8% 28.6% Other displays 1,954 5.8% -54.0% -44.4% Total revenues
33,708 100.0% 11.9% 2.5% Net revenues 32,335 15.0% 2.4% Total
revenues for the third quarter of 2009 reached US$37.7 million,
representing a year-over-year increase of 11.9% from US$33.7
million and a quarter-over-quarter increase of 2.5% from US$36.8
million. The year-over-year increase was due to increases in
revenues from digital frames in airports and traditional media in
airports. The quarter-over-quarter increase was due to increases in
revenues from digital frames in airports, traditional media in
airports and digital TV screens on airplanes. Revenues from digital
frames in airports Revenues from digital frames in airports for the
third quarter of 2009 increased by 68.7% year-over-year and by 3.6%
quarter-over-quarter to US$17.1 million. The year-over-year and
quarter-over-quarter increases were due to an increase in the
number of time slots sold, partially offset by a decrease in the
average advertising revenue per time slot sold (or the "ASP").
Please refer to "Summary of Selected Operating Data" below for
detailed definitions of the operating data cited in this press
release. The number of time slots sold for the third quarter of
2009 increased by 146.8% year-over-year and by 44.1%
quarter-over-quarter to 8,187 time slots. The year-over-year and
quarter-over-quarter increases were due to continued sales efforts
and growing acceptance of AirMedia's digital frames. AirMedia's
digital frames were operated in 31 airports in the third quarter of
2009, up from 19 airports at the end of the third quarter of 2008,
and up from 28 airports at the end of the second quarter of 2009.
The number of time slots available for sale for the third quarter
of 2009 increased by 69.2% year-over-year and by 10.1%
quarter-over-quarter to 28,918 time slots. The year-over-year
increase was primarily due to an increase in the number of airports
in AirMedia's digital frame network. The quarter-over-quarter
increase was primarily due to the commencement of operations of
digital frames in three additional airports during the third
quarter of 2009, the full-quarter operations of the digital frames
in three airports, which AirMedia commenced to operate in the
middle of the previous quarter, the commencement of operations of
mega-size LED screens and 108-inch stand-alone digital frames, two
new product lines, in Guangzhou airport, and the commencement of
operations of stand-alone digital frames in Hangzhou airport. The
utilization rate of digital frames for the third quarter of 2009
increased by 8.9 percentage points year-over-year and 6.7
percentage points quarter-over-quarter to 28.3%, primarily due to
the increase in the number of time slots sold. The ASP of digital
frames for the third quarter of 2009 decreased by 31.6%
year-over-year and by 28.1% quarter-over-quarter to US$2,084. The
year-over-year and quarter-over-quarter decreases were primarily
due to higher discounts offered in the third quarter of 2009 than
in the same period one year ago and in the previous quarter.
Revenues from digital TV screens in airports Revenues from digital
TV screens in airports for the third quarter of 2009 decreased by
35.7% year-over-year and by 7.7% quarter-over-quarter to US$8.4
million, primarily due to decreases in both the number of time
slots sold and the ASP of digital TV screens in airports. The
number of time slots sold for the third quarter of 2009 decreased
by 29.4% year-over-year and by 3.4% quarter-over-quarter to 5,659
time slots. The year-over-year decrease was primarily due to the
still weak, albeit improving, economic conditions. The
quarter-over-quarter decrease was because advertisers shifted their
budget allocations from our digital TV screens in airports to our
digital frames in airports as a result of higher discounts offered
by us for digital frames. The number of time slots available for
sale for the third quarter of 2009 increased by 1.4% year-over-year
and by 1.1% quarter-over-quarter to 25,629 time slots. The
utilization rate for the third quarter of 2009 decreased by 9.6
percentage points year-over-year and by 1.0 percentage point
quarter-over-quarter to 22.1%, primarily due to the decrease in the
number of time slots sold. The ASP of digital TV screens in
airports for the third quarter of 2009 decreased by 8.8%
year-over-year and by 4.5% quarter-over-quarter to US$1,487,
primarily due to higher discounts offered in the third quarter of
2009 than in the same period one year ago and in the previous
quarter. Revenues from digital TV screens on airplanes Revenues
from digital TV screens on airplanes for the third quarter of 2009
decreased by 38.5% year-over-year and increased by 3.1%
quarter-over-quarter to US$4.1 million. The year-over-year decrease
was due to decreases in both the number of time slots sold and the
ASP of digital TV screens on airplanes. The quarter-over-quarter
increase was primarily due to an increase in the number of time
slots sold. The number of time slots sold for the third quarter of
2009 decreased by 25.8% year-over-year and increased by 13.9%
quarter-over-quarter to 213 time slots. The year-over-year decrease
was primarily because the number of time slots sold on airplanes in
the third quarter of 2008 was higher than normal due to Olympic
Games. The number of time slots available for sale for the third
quarter of 2009 decreased by 3.8% year-over-year and by 3.8%
quarter-over-quarter to 450 time slots. The utilization rate for
the third quarter of 2009 decreased by 14.0 percentage points
year-over-year and increased by 7.4 percentage points
quarter-over-quarter to 47.3%. The year-over-year decrease was
primarily due to the decrease in the number of time slots sold. The
quarter-over-quarter increase was primarily due to the increase in
the number of time slots sold. The ASP of digital TV screens on
airplanes for the third quarter of 2009 decreased by 17.0%
year-over-year and by 9.5% quarter-over-quarter to US$19,028. The
year-over-year and quarter-over-quarter decreases in the ASP were
due to higher discounts offered in the third quarter of 2009 than
in the same period one year ago and in the previous quarter, as
well as the change in the mix of the time slots sold. The number of
time slots sold on the three largest airlines, which have
significantly higher ASPs than those sold on the other airlines,
accounted for a lower percentage in the third quarter of 2009 than
in the same period one year ago and in the previous quarter.
Revenues from traditional media in airports Please note that part
of the prior comparative figure of "Other Displays" has been
reclassified to "Traditional Media in Airports" to conform to the
current presentation. Revenues from traditional media in airports
for the third quarter of 2009 primarily included revenues from
traditional media in Beijing Capital International Airport,
Shenzhen International Airport and Wenzhou Yongqiang Airport, as
well as revenues from billboards and painted advertisements on gate
bridges in airports. Revenues from traditional media in airports
for the third quarter of 2009 increased by 269.8% year-over-year
and by 28.6% quarter-over-quarter to US$7.3 million. The
year-over-year increase was primarily due to the commencement of
operations of traditional media in Beijing and Shenzhen airports in
April 2009 and the commencement of operations in Wenzhou Yongqiang
Airport in November 2008. The quarter-over-quarter increase was
primarily due to improved sales of traditional media in Beijing and
Shenzhen airports. The number of locations sold for the third
quarter of 2009 increased by 14.7% quarter-over-quarter to 359
locations due to increased sales of traditional media in Beijing
and Shenzhen airports. The number of locations available for sale
for the third quarter of 2009 decreased by 8.5%
quarter-over-quarter to 1,006 locations due to the upgrade of
TV-attached light boxes, which are classified as traditional media,
to TV-attached digital frames, which are classified as digital
frames, in certain airports. The utilization rate of traditional
media for the third quarter of 2009 increased by 7.2 percentage
points quarter-over-quarter to 35.7% primarily due to the increase
in the number of locations sold and the decrease in the number of
locations available for sale. The ASP of traditional media in
airports for the third quarter of 2009 increased by 12.0%
quarter-over-quarter to US$20,344 due to the change in the mix of
the number of locations sold. The number of traditional media sold
in Beijing and Shenzhen airports, which have higher ASPs, accounted
for a higher percentage in the third quarter of 2009 than in the
previous quarter. Please refer to "Summary of Selected Operating
Data" for more operating data. Business tax and other sales tax for
the third quarter of 2009 was US$552,000, representing a
year-over-year decrease of 59.8% from US$1.4 million and a
quarter-over-quarter increase of 5.3% from US$524,000. Net revenues
for the third quarter of 2009 reached US$37.2 million, representing
a year-over-year increase of 15.0% from US$32.3 million and a
quarter-over-quarter increase of 2.4% from US$36.3 million. Cost of
Revenues Cost of revenues for the third quarter of 2009 was US$37.8
million, representing a year-over-year increase of 84.4% from
US$20.5 million and a quarter-over-quarter increase of 2.8% from
US$36.8 million. The year-over-year increase was primarily due to
an increase in concession fees in connection with the expansion of
AirMedia's business. The quarter-over-quarter increase was
primarily due to a one-time cost resulting from disposal of fixed
assets. Cost of revenues as a percentage of net revenues in the
third quarter of 2009 was 101.7%, compared to 63.4% in the same
period one year ago and 101.3% in the previous quarter. AirMedia
incurs concession fees to airports for placing and operating
digital TV screens, digital frames, traditional media in airports
and other displays, and to airlines for placing programs on their
digital TV screens. Most of the concession fees are fixed with an
annual escalation. The total concession fee under each concession
rights contract is charged to the consolidated statements of
operations on a straight-line basis over the agreement periods,
which are generally between three and five years. Concession fees
for the third quarter of 2009 were US$27.9 million, representing a
year-over-year increase of 95.5% from US$14.3 million, primarily
due to newly entered or renewed concession rights contracts during
the period, and a quarter-over-quarter decrease of 0.5% from
US$28.1 million, primarily due to a reduction of concession fees in
four airports effective in July and August 2009, respectively,
partially offset by concession fees associated with new concession
rights contracts in the third quarter of 2009. Concession fees as a
percentage of net revenues in the third quarter of 2009 was 75.1%,
compared to 44.2% in the same period one year ago and 77.3% in the
previous quarter. The year-over-year increase of concession fees as
a percentage of net revenues was primarily because incremental
concession fees associated with new concession rights contracts
were fixed once concession rights contracts were entered into while
revenues generated from newly signed concession rights contracts
would take time to ramp up. Gross Profit/Loss Gross loss for the
third quarter of 2009 was US$628,000, compared to gross profit of
US$11.8 million in the same period one year ago and gross loss of
US$488,000 in the previous quarter. Gross loss as a percentage of
net revenues for the third quarter of 2009 was negative 1.7%,
compared to gross income as a percentage of net revenues of 36.6%
in the same period one year ago and negative 1.3% in the previous
quarter. The year-over-year decrease in gross profit as a
percentage of net revenues was primarily due to the increase in
concession fees. Operating Expenses Operating expenses (numbers in
US$ 000's except for percentages): Quarter Quarter Ended Ended
September % of Net June 30, % of Net 30, 2009 Revenues 2009
Revenues Selling and marketing expenses 3,607 9.7% 2,741 7.6%
General and administrative expenses 7,034 18.9% 5,178 14.3% Total
operating expenses 10,641 28.6% 7,919 21.9% Adjusted operating
expenses (non- GAAP) 8,071 21.7% 6,303 17.4% Quarter Ended % of Y/Y
Q/Q September Net Growth Growth 30, 2008 Revenues rate rate Selling
and marketing expenses 2,276 7.0% 58.5% 31.6% General and
administrative expenses 3,420 10.6% 105.7% 35.8% Total operating
expenses 5,696 17.6% 86.8% 34.4% Adjusted operating expenses (non-
GAAP) 4,264 13.2% 89.3% 28.1% Total operating expenses for the
third quarter of 2009 were US$10.6 million, representing a
year-over-year increase of 86.8% from US$5.7 million and a
quarter-over-quarter increase of 34.4% from US$7.9 million. Total
operating expenses for the third quarter of 2009 included
share-based compensation expenses of US$1.7 million, compared to
share-based compensation expenses of US$1.0 million in the same
period one year ago and US$1.0 million in the previous quarter. The
year-over-year and quarter-over-quarter increases in share-based
compensation expense were due to a new grant of options to purchase
5,434,500 ordinary shares on July 10, 2009, which increased
share-based compensation expenses by US$533,000 in the third
quarter of 2009. Adjusted operating expenses (non-GAAP) for the
third quarter of 2009, which excluded share-based compensation
expenses and amortization of acquired intangible assets, were
US$8.1 million, representing a year-over-year increase of 89.3%
from US$4.3 million and a quarter-over-quarter increase of 28.1%
from US$6.3 million. Adjusted operating expenses as a percentage of
net revenues (non-GAAP) in the third quarter of 2009 was 21.7%,
compared to 13.2% in the same period one year ago and 17.4% in the
previous quarter. Please refer to the attached table for a
reconciliation of operating expenses under U.S. GAAP to adjusted
operating expenses (non-GAAP). Selling and marketing expenses for
the third quarter of 2009 were US$3.6 million, including
share-based compensation expenses of US$499,000, representing a
year-over-year increase of 58.5% from US$2.3 million and a
quarter-over-quarter increase of 31.6% from US$2.7 million. The
year-over-year increase was primarily due to higher expenses
related to expansion of the direct sales force, increased
share-based compensation expenses and higher marketing and
promotion expenses. The quarter-over-quarter increase was primarily
due to higher expenses related to the expansion of the direct sales
force for the new advertising network in Sinopec's gas stations and
increased share-based compensation expenses. General and
administrative expenses for the third quarter of 2009 were US$7.0
million, including share-based compensation expenses of US$1.2
million, representing a year-over-year increase of 105.7% from
US$3.4 million and a quarter-over-quarter increase of 35.8% from
US$5.2 million. The year-over-year increase was primarily due to
higher bad-debt provisions, increased share-based compensation
expenses, higher amortization of acquired intangible assets,
increased professional expenses, headcount increase and increased
expenses of office and utilities. The quarter-over-quarter increase
was primarily due to higher bad-debt provisions, increased
share-based compensation expenses, higher amortization of acquired
intangible assets, headcount increase and increase in other various
expenses for the expansion of the new advertising network in
Sinopec's gas stations. Income/Loss from Operations Loss from
operations for the third quarter of 2009 was US$11.3 million, as
compared to income from operations of US$6.1 million in the same
period one year ago and loss from operations of US$8.4 million in
the previous quarter. Adjusted loss from operations (non-GAAP) for
the third quarter of 2009, which excluded share-based compensation
expenses and amortization of acquired intangible assets, was US$8.7
million, compared to adjusted income from operations (non-GAAP) of
US$7.6 million in the same period one year ago and adjusted loss
from operations (non-GAAP) of US$6.8 million in the previous
quarter. Adjusted operating margin (non-GAAP) for the third quarter
of 2009, which excluded the effect of share-based compensation
expenses and amortization of acquired intangible assets, was
negative 23.4%, compared to 23.4% in the same period one year ago
and negative 18.7% in the previous quarter. Please refer to the
attached table for a reconciliation of income/loss from operations
under U.S. GAAP to adjusted income/loss from operations (non-GAAP).
Income Tax Benefit/Expense Income tax benefit for the third quarter
of 2009 was US$875,000 compared to income tax expense of US$6,000
in the same period one year ago and income tax benefit of
US$653,000 in the previous quarter. The effective income tax rate
for the third quarter of 2009 was 8.5%, compared to 0.1% in the
same period one year ago and 8.5% in the previous quarter. The
year-over-year increase in the effective income tax rate was
primarily due to the cessation of tax exemption period for one of
our most profitable subsidiaries, which ended in fiscal year 2008.
Net Income/Loss Attributable to AirMedia's Shareholders Net loss
attributable to AirMedia's shareholders for the third quarter of
2009 was US$9.6 million, compared to net income attributable to
AirMedia's shareholders of US$7.5 million in the same period one
year ago and net loss attributable to AirMedia's shareholders of
US$7.0 million in the previous quarter. The basic net loss
attributable to AirMedia's shareholders per ADS for the third
quarter of 2009 was US$0.15, compared to basic net income
attributable to AirMedia's shareholders per ADS of US$0.11 in the
same period one year ago and basic net loss attributable to
AirMedia's shareholders per ADS of US$0.11 in the previous quarter.
The diluted net loss attributable to AirMedia's shareholders per
ADS for the third quarter of 2009 was US$0.15 compared to diluted
net income attributable to AirMedia's shareholders per ADS of
US$0.11 in the same period one year ago and diluted net loss
attributable to AirMedia's shareholders per ADS of US$0.11 in the
previous quarter. Adjusted net loss attributable to AirMedia's
shareholders (non-GAAP) for the third quarter of 2009, which is net
loss attributable to AirMedia's shareholders excluding share-based
compensation expenses and amortization of acquired intangible
assets, was US$7.0 million, compared to adjusted net income
attributable to AirMedia's shareholders (non-GAAP) of US$8.9
million in the same period one year ago and adjusted net loss
attributable to AirMedia's shareholders (non-GAAP) of US$5.4
million in the previous quarter. Basic adjusted net loss
attributable to AirMedia's shareholders per ADS (non-GAAP) for the
third quarter of 2009 was US$0.11, compared to basic adjusted net
income attributable to AirMedia's shareholders per ADS (non-GAAP)
of US$0.13 in the same period one year ago and basic adjusted net
loss attributable to AirMedia's shareholders per ADS (non-GAAP) of
US$0.08 in the previous quarter. Diluted adjusted net loss
attributable to AirMedia's shareholders per ADS (non-GAAP) for the
third quarter of 2009 was US$0.11, compared to diluted adjusted net
income attributable to AirMedia's shareholders per ADS (non-GAAP)
of US$0.13 in the same period one year ago and diluted adjusted net
loss attributable to AirMedia's shareholders per ADS (non-GAAP) of
US$0.08 in the previous quarter. Please refer to the attached table
for a reconciliation of net loss/income attributable to AirMedia's
shareholders and basic and diluted net loss/income attributable to
AirMedia's shareholders per ADS under U.S. GAAP to adjusted net
loss/income attributable to AirMedia's shareholders and basic and
diluted adjusted net loss/income attributable to AirMedia's
shareholders per ADS (non-GAAP). Cash, Restricted Cash and
Short-term Investments AirMedia continued to maintain a strong
balance sheet. Excluding restricted cash of US$2.6 million, Cash
and short-term investments totaled US$117.3 million as of September
30, 2009, compared to US$118.9 million as of June 30, 2009, and
US$161.5 million as of December 31, 2008. ADS Repurchases On
December 29, 2008, AirMedia's board of directors authorized
AirMedia to repurchase up to US$50 million worth of its own
outstanding ADSs throughout 2009. AirMedia did not make any
repurchases in the third quarter of 2009. As of November 10, 2009,
the aggregate number of ADSs AirMedia has repurchased on the open
market is still 1,646,502 ADSs, the same as the number disclosed in
the first quarter 2009 earnings release. Other Recent Developments
As of November 9, 2009, AirMedia had installed its media, including
scrolling light boxes and billboards, in 191 Sinopec's gas stations
in Beijing, in 112 Sinopec's gas stations in Shanghai, and in 76
Sinopec's gas stations in Shenzhen. AirMedia will start to put
clients' advertisements on a trial basis in late November 2009.
AirMedia installed 177 TV-attached digital frames, 21 stand-alone
digital frames, 31 digital frames at the check-in counters and 20
digital frames at the baggage claim areas in Chengdu Shuangliu
Airport, which was rated the 6th largest airport in mainland China
in terms of the number of air passengers. On September 30, 2009,
AirMedia commenced operations of most of these newly installed
digital frames, which expanded AirMedia's digital frame network to
31 airports including all of the 15 largest airports in China. On
September 21, 2009, AirMedia commenced operations of 12 newly
installed 108-inch stand-alone digital frames in Guangzhou Baiyun
International Airport. Prior to this, AirMedia had already been
operating TV-attached digital frames, multiple-screen digital
frames and mega-size LED screens in the Guangzhou airport. On
September 9, 2009, AirMedia commenced operations of 66 newly
installed 108-inch or 70-inch digital frames at the baggage claim
areas of all of the three terminals at Beijing Capital
International Airport. Previously, AirMedia had only operated
digital frames at the departure areas of Terminals 2 and 3. These
new digital frames significantly enhanced AirMedia's digital frame
presence at the arrival areas to meet advertisers' strong demand
for advertisements in Beijing Capital International Airport. In
August 2009, AirMedia entered into a concession rights contract
with JCDecaux Momentum Shanghai Airport Advertising Co., Ltd. to
exclusively operate digital TV screens and digital frames in
Shanghai Pudong International Airport and Shanghai Hongqiao
International Airport from September 1, 2009 to February 15, 2012.
The expiration date of AirMedia's original concession rights to
operate digital TV screens at Terminal 1 of the Pudong airport and
Terminal 1 of the Hongqiao airport was also extended from September
19, 2010 to February 15, 2012. On August 1, 2009, AirMedia
commenced operations of three mega-size LED screens, each measuring
76 square meters (or 818.38 square feet), above all of the domestic
security check areas in Guangzhou Baiyun International Airport. On
July 17, 2009, AirMedia commenced operations of stand-alone digital
frames in Hangzhou Xiaoshan Airport. Previously, AirMedia only
operated TV-attached digital frames in the Hangzhou airport.
Business Outlook AirMedia currently expects that its total revenues
for the fourth quarter of 2009 will be in an amount ranging from
US$44.0 million to US$46.0 million, representing a year-over-year
increase of 8.7% to 13.7% from the same period in 2008, and a
quarter-over-quarter increase of 16.6% to 21.9% from the previous
quarter. AirMedia currently expects that concession fees will be at
least US$33.3 million in the fourth quarter of 2009. The
anticipated quarter-over-quarter increase in concession fees is
primarily due to the full quarter operation of digital media in the
two airports in Shanghai, digital frames in the Beijing airport,
concession fees of outdoor advertising platform in Sinopec's gas
stations, and other concession rights contracts expected to be
entered into soon. The above forecast reflects AirMedia's current
and preliminary view and is therefore subject to change. Please
refer to our Safe Harbor Statement for the factors which could
cause actual results to differ materially from those contained in
any forward-looking statement. Summary of Selected Operating Data
Quarter Quarter Ended Quarter Ended Y/Y Q/Q September Ended June
September Growth Growth 30, 2009 30, 2009 30, 2008 Rate Rate
Digital frames in airports Number of airports in operation 31 28 19
63.2% 10.7% Number of time slots available for sale (2) 28,918
26,277 17,086 69.2% 10.1% Number of time slots sold (3) 8,187 5,683
3,317 146.8% 44.1% Utilization rate (4) 28.3% 21.6% 19.4% 8.9% 6.7%
Average advertising revenue per time slot sold (5) US$2,084
US$2,899 US$3,049 -31.6% -28.1% Digital TV screens in airports
Number of airports in operation 40 40 41 -2.4% 0.0% Number of time
slots available for sale (1) 25,629 25,350 25,275 1.4% 1.1% Number
of time slots sold (3) 5,659 5,856 8,019 -29.4% -3.4% Utilization
rate (4) 22.1% 23.1% 31.7% -9.6% -1.0% Average advertising revenue
per time slot sold (5) US$1,487 US$1,557 US$1,631 -8.8% -4.5%
Digital TV screens on airplanes Number of airlines in operation 9 9
9 0.0% 0.0% Number of time slots available for sale (1) 450 468 468
-3.8% -3.8% Number of time slots sold (3) 213 187 287 -25.8% 13.9%
Utilization rate (4) 47.3% 40.0% 61.3% -14.0% 7.4% Average
advertising revenue per time slot sold (5) US$19,028 US$21,026
US$22,930 -17.0% -9.5% Traditional Media in airports Numbers of
locations available for sale (6) 1,006 1,100 N/A N/A -8.5% Numbers
of locations sold (7) 359 313 N/A N/A 14.7% Utilization rate (8)
35.7% 28.5% N/A N/A 7.2% Average advertising revenue per location
(9) US$20,344 US$18,162 N/A N/A 12.0% Notes: (1) We define a time
slot as a 30-second equivalent advertising time unit for digital TV
screens in airports and digital TV screens on airplanes, which is
shown during each advertising cycle on a weekly basis in a given
airport or on a monthly basis on the routes of a given airline,
respectively. Our airport advertising programs are shown repeatedly
on a daily basis during a given week in one-hour cycles and each
hour of programming includes 25 minutes of advertising content,
which allows us to sell a maximum of 50 time slots per week. The
number of time slots available for our digital TV screens in
airports during the period presented is calculated by multiplying
the time slots per week per airport by the number of weeks during
the period presented when we had operations in each airport and
then calculating the sum of all the time slots available for each
of our network airports. The length of our in-flight programs
typically ranges from approximately 45 minutes to an hour per
flight, approximately five to 13 minutes of which consist of
advertising content. The number of time slots available for our
digital TV screens on airplanes during the period presented is
calculated by multiplying the time slots per airline per month by
the number of months during the period presented when we had
operations on each airline and then calculating the sum of all the
time slots for each of our network airlines. (2) We define a time
slot as a 12-second equivalent advertising time unit for digital
frames in airports, which is shown during each standard advertising
cycle on a weekly basis in a given airport. Our standard airport
advertising programs are shown repeatedly on a daily basis during a
given week in 10-minute cycles, which allows us to sell a maximum
of 50 time slots per week. The length of time slot and advertising
program cycle of some digital frames in several airports are
different from standard ones. The number of time slots available
for our digital frames in airports during the period presented is
calculated by multiplying the time slots per week per airport by
the number of weeks during the period presented when we had
operations in each airport and then calculating the sum of all the
time slots available for each of our network airports. (3) Number
of time slots sold refers to the number of 30-second equivalent
advertising time units for digital TV screens in airports and
digital TV screens on airplanes or 12-second equivalent advertising
time units for digital frames in airports sold during the period
presented. (4) Utilization rate refers to total time slots sold as
a percentage of total time slots available for sale during the
relevant period. (5) Average advertising revenue per time slot sold
for digital TV screens in airports, digital TV screens on airplanes
and digital frames in airports is calculated by dividing our
revenues derived from digital TV screens in airports, digital TV
screens on airplanes and digital frames in airports by its own
number of time slots sold, respectively. (6) We define the number
of locations available for sale in traditional media as the sum of
(1) the number of light boxes and billboards in Beijing, Shenzhen,
Wenzhou and certain other airports (light boxes and billboards),
and (2) the number of gate bridges in 10 airports (gate bridges).
(7) The number of locations sold is defined as the sum of (1) the
number of light boxes and billboards sold and (2) the number of
gate bridges sold. To calculate the number of light boxes and
billboards sold in a given airport, we first calculate the
"utilization rates of light boxes and billboards" in such airport
by dividing the "total value of light boxes and billboards sold" in
such airport by the "total value of light boxes and billboards" in
such airport. The "total value of light boxes and billboards sold"
in a given airport is calculated as the daily listing prices of
each light boxes and billboards sold multiplied by their respective
number of days sold during the period presented. The "total value
of light boxes and billboards" in a given airport is calculated as
the sum of quarterly listing prices of all the light boxes and
billboards during the period presented. The number of light boxes
and billboards sold in a given airport is then calculated as the
number of light boxes and billboards available for sale in such
airport multiplied by the utilization rates of light boxes and
billboards in such airport. The number of gate bridges sold in a
given airport is counted based on the contracts. (8) Utilization
rate 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 2009 earnings at 8:00 PM U.S. Eastern
Time on November 10, 2009 (5:00 PM U.S. Pacific Time on November
10, 2009; 9:00 AM Beijing/Hong Kong time on November 11, 2009).
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.: +1-800-299-0148 U.K.:
+44-207-365-8426 Hong Kong: +852-3002-1672 International:
+1-617-801-9711 Pass code: AMCN A replay of the call will be
available for 1 week between 10:00 p.m. on November 10, 2009 and
10:00 p.m. on November 17, 2009, Eastern Time. Replay Dial-in
Information U.S.: +1-888-286-8010 International: +1-617-801-6888
Pass code: 16750814 Additionally, a live and archived webcast of
this call will be available on the Investor Relations section of
AirMedia's corporate website at http://ir.airmedia.net.cn/ . Use of
Non-GAAP Financial Measures AirMedia's management uses non-GAAP
financial measures to gain an understanding of AirMedia's
comparative operating performance and future prospects. AirMedia's
non-GAAP financial measures exclude certain special items,
including (1) share-based compensation expenses, and (2)
amortization of acquired intangible assets. Non-GAAP financial
measures are used by AirMedia's management in their financial and
operating decision-making, because management believes they reflect
AirMedia's ongoing business and operating performance in a manner
that allows meaningful period-to-period comparisons. AirMedia's
management believes that these non-GAAP financial measures provide
useful information to investors and others in understanding and
evaluating AirMedia's operating performance in the same manner as
management does, if they so choose. Specifically, AirMedia believes
the non-GAAP financial measures provide useful information to both
management and investors by excluding certain charges that we
believe are not indicative of our core operating results. The
non-GAAP financial measures have limitations. They do not include
all items of income and expense that affect AirMedia's income from
operations. Specifically, these non-GAAP financial measures are not
prepared in accordance with GAAP, may not be comparable to non-GAAP
financial measures used by other companies and, with respect to the
non-GAAP financial measures that exclude certain items under GAAP,
do not reflect any benefit that such items may confer to AirMedia.
Management compensates for these limitations by also considering
AirMedia's financial results as determined in accordance with GAAP.
The presentation of this additional information is not meant to be
considered superior to, in isolation from or as a substitute for
results prepared in accordance with US GAAP. For more information
on these non-GAAP financial measures, please see the table
captioned "Reconciliation of GAAP Income/(Loss) and EPS and
non-GAAP Adjusted Income/(Loss) and EPS" set forth at the end of
this release. About AirMedia Group Inc. AirMedia Group Inc.
(NASDAQ:AMCN) is a leading operator of out-of-home advertising
platforms in China targeting mid-to-high-end consumers. AirMedia
operates the largest digital media network in China dedicated to
air travel advertising. AirMedia operates digital TV screens in 40
major airports, including 29 out of the 30 largest airports in
China. AirMedia also operates digital frames in 31 major airports
including all of the 15 largest airports in China. In addition,
AirMedia sell advertisements on the routes operated by nine
airlines, including the three largest airlines in China. In select
major airports, AirMedia also operates traditional media platforms,
such as billboards, light boxes, and other digital media, such as
mega LED screens. In addition, AirMedia has obtained exclusive
contractual concession rights until the end of 2014 to develop and
operate outdoor advertising platforms at Sinopec's service stations
located throughout China. AirMedia plans to install its advertising
platforms in at least 3,500 service stations in major cities
throughout China by the end of 2011, and in at least 8,000 service
stations by the end of 2014. 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 periodic reports to the U.S. Securities and
Exchange Commission on Forms 20-F and 6-K, etc., in its annual
report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about AirMedia's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
important factors could cause actual results to differ materially
from those contained in any forward-looking statement. Potential
risks and uncertainties include, but are not limited to: if
advertisers or the viewing public do not accept, or lose interest
in, our air travel advertising network, we may be unable to
generate sufficient cash flow from our operating activities and our
prospects and results of operations could be negatively affected;
we derive substantially all of our revenues from the provision of
air travel advertising services, and recent slowdown in the air
travel advertising industry in China may materially and adversely
affect our revenues and results of operation; our strategy of
expanding our advertising network by expanding into traditional
media and building new media platforms may not succeed, and our
failure to do so could materially reduce the attractiveness of our
network and harm our business, reputation and results of
operations; if our customers reduce their advertising spending due
to an economic downturn in China and/or elsewhere or for any other
reason, our revenues and results of operations may be materially
and adversely affected; we face risks related to health epidemics
such as the H1N1 flu, which could materially and adversely affect
air travel and result in reduced demand for our advertising
services or disrupt our operations; if we are unable to retain
existing concession rights contracts or obtain new concession
rights contracts on commercially advantageous terms that allow us
to operate our advertising platforms, we may be unable to maintain
or expand our network coverage and our business and prospects may
be harmed; a significant portion of our revenues has been derived
from the five largest airports and three largest airlines in China,
and if any of these airports or airlines experiences a material
business disruption, our ability to generate revenues and our
results of operations would be materially and adversely affected;
our limited operating history makes it difficult to evaluate our
future prospects and results of operations; and other risks
outlined in AirMedia's filings with the U.S. Securities and
Exchange Commission. AirMedia does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law. For further information, please contact: AirMedia
Group, Inc. Raymond Huang Investor Relations Director Tel:
+86-10-8460-8678 Email: Brunswick Group Cynthia He Tel:
+86-10-6566-2256 Email: AirMedia Group Inc. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (In U.S. dollars in thousands)
September 30, December 31, 2009 2008 as adjusted(1) ASSETS: Current
Assets: Cash 99,362 161,534 Restricted cash 2,605 -- Short-term
investments 17,931 -- Accounts receivable, net 45,346 38,386
Prepaid concession fees 18,307 32,706 Amount due from related party
7,040 -- Other current assets 9,654 7,830 Deferred tax assets -
current 852 380 Total current assets 201,097 240,836 Acquired
intangible assets, net 11,711 9,027 Property and equipment, net
81,922 62,443 Long-term deposits 19,490 14,724 Long-term
investments 1,231 1,099 Deferred tax assets - non-current 3,036
1,762 Goodwill 4,385 -- Total Assets 322,872 329,891 LIABILITIES
AND SHAREHOLDERS EQUITY Current Liabilities: Accounts payable
15,898 15,696 Notes payable 2,097 -- Accrued expenses and other
current liabilities 6,613 5,664 Deferred revenue 10,519 2,929
Income tax payable 356 852 Amounts due to related parties 408 408
Total current liabilities 35,891 25,549 Deferred tax liability -
non-current 3,303 2,659 Total liabilities 39,194 28,208
Shareholders' equity Ordinary shares 131 134 Additional paid-in
capital 266,624 268,881 Statutory reserve 5,593 5,593 Accumulated
(deficit)/earnings (1,752) 16,070 Accumulated other comprehensive
income 9,933 10,054 Total AirMedia Group Inc.'s shareholders'
equity 280,529 300,732 Noncontrolling interest 3,149 951 Total
shareholders' equity 283,678 301,683 Total Liabilities and
Shareholders' Equity 322,872 329,891 (1) Amount in relation to
noncontrolling interest, formerly named minority interest, as of
December 31, 2008 is reclassified in accordance with FASB Statement
No. 160, Noncontrolling Interest, which was adopted by the Company
on January 1, 2009. AirMedia Group Inc. UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In U.S. dollars in
thousands, except share related data) Three Months Ended September
June September 30, 2009 30, 2009 30, 2008 as adjusted (1) Revenues
37,726 36,819 33,708 Business tax and other sales tax (552) (524)
(1,373) Net revenues 37,174 36,295 32,335 Cost of revenues 37,802
36,783 20,499 Gross profit/(loss (628) (488) 11,836 Operating
expenses: Selling and marketing * 3,607 2,741 2,276 General and
administrative * 7,034 5,178 3,420 Total operating expenses 10,641
7,919 5,696 Income/(loss) from operations (11,269) (8,407) 6,140
Interest income 351 461 1,122 Other income, net 582 222 428
Income/(loss) before income taxes (10,336) (7,724) 7,690 Income tax
expense/(benefit) (875) (653) 6 Net income/(loss) before net
income/(loss) of equity accounting investment (9,461) (7,071) 7,684
Net income/(loss) of equity accounting investment 52 37 (119) Net
income/(loss) (9,409) (7,034) 7,565 Less: Net income/(loss)
attributable to noncontrolling interest 168 (39) 102 Net
income/(loss) attributable to AirMedia Group Inc.'s shareholders
(9,577) (6,995) 7,463 Net income/(loss) attributable to AirMedia
Group Inc.'s shareholders per ordinary share Basic (0.07) (0.05)
0.06 Diluted (0.07) (0.05) 0.05 Net income/(loss) attributable to
AirMedia Group Inc.'s shareholders per ADS Basic (0.15) (0.11) 0.11
Diluted (0.15) (0.11) 0.11 Weighted average ordinary shares
outstanding used in computing net income/(loss) per ordinary share
- basic 130,833,410 130,564,714 133,680,775 Weighted average
ordinary shares outstanding used in computing net income/(loss) per
ordinary share - diluted 130,833,410 130,564,714 138,054,496 *
Share-based compensation charges included are as follow: Selling
and marketing 499 233 233 General and administrative 1,237 777 771
(1)Amount in relation to noncontrolling interest, formerly named
minority interest, for the three-month period ended September 30,
2008 is reclassified in accordance with FASB Statement No. 160,
Noncontrolling Interest, which was adopted by the Company on
January 1, 2009. AirMedia Group Inc. RECONCILIATION OF GAAP NET
INCOME (LOSS) AND EPS TO NON-GAAP ADJUSTED NET INCOME (LOSS) AND
EPS (In U.S. dollars in thousands, except share related data) Three
Months Ended September June September 30, 2009 30, 2009 30, 2008
GAAP net income/(loss) attributable to AirMedia. Group Inc.'s
shareholders (9,577) (6,995) 7,463 Amortization of acquired
intangible assets 834 606 428 Share-based compensation 1,736 1,010
1,004 Adjusted net income/(loss) attributable to AirMedia. Group
Inc.'s shareholders (non-GAAP) (7,007) (5,379) 8,895 Adjusted net
income/(loss) attributable to AirMedia. Group Inc.'s shareholders
per share (non-GAAP) Basic (0.05) (0.04) 0.07 Diluted (0.05) (0.04)
0.06 Adjusted net income/(loss) attributable to AirMedia. Group
Inc.'s shareholders per ADS (non- GAAP) Basic (0.11) (0.08) 0.13
Diluted (0.11) (0.08) 0.13 Shares used in computing adjusted basic
net income/(loss) attributable to AirMedia. Group Inc.'s
shareholders per share (non-GAAP) 130,833,410 130,564,714
133,680,775 Shares used in computing adjusted diluted net
income/(loss) attributable to AirMedia. Group Inc.'s shareholders
per share (non-GAAP) 130,833,410 130,564,714 138,054,496 Note: The
Non-GAAP adjusted net income per share and per ADS are computed
using Non-GAAP net adjusted income and number of shares and ADS
used in GAAP basic and diluted EPS calculation, where the number of
shares and ADS is adjusted for dilution due to share-based
compensation plan. AirMedia Group Inc. RECONCILIATION OF GAAP
OPERATING EXPENSES TO NON-GAAP ADJUSTED OPERATING EXPENSES (In U.S.
dollars in thousands, except for percentage) Three Months Ended
September June September 30, 2009 30, 2009 30, 2008 GAAP operating
expenses 10,641 7,919 5,696 Amortization of acquired intangible
assets 834 606 428 Share-based compensation 1,736 1,010 1,004
Adjusted operating expenses (non- GAAP) 8,071 6,303 4,264 Adjusted
operating expenses as a percentage of net revenues (non- GAAP)
21.7% 17.4% 13.2% AirMedia Group Inc. RECONCILIATION OF GAAP INCOME
(LOSS) FROM OPERATIONS TO NON-GAAP ADJUSTED INCOME (LOSS) FROM
OPERATIONS (In U.S. dollars in thousands, except for percentage)
Three Months Ended September June September 30, 2009 30, 2009 30,
2008 Income/(loss) from operations (11,269) (8,407) 6,140
Amortization of acquired intangible assets 834 606 428 Share-based
compensation 1,736 1,010 1,004 Adjusted Income/(loss) from
operations (non-GAAP) (8,699) (6,791) 7,572 Adjusted Operating
margin (non-GAAP) -23.4% -18.7% 23.4% DATASOURCE: AirMedia Group,
Inc. CONTACT: Investor Contact: Raymond Huang, Investor Relations
Director, AirMedia Group, Inc., +86-10-8460-8678, ; Cynthia He,
Brunswick Group, +86-10-6566-2256, Web site:
http://www.airmedia.net.cn/ http://ir.airmedia.net.cn/
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