Global Eagle Entertainment Reports Strong First Quarter 2015 Results
Q1 2015 revenue of
$100.3 millionand Adjusted EBITDA* of $8.2 million, representing year-over-year growth of 17% and 61%, respectively
Record Connectivity segment service revenue of
$22.2 milliongrew 35% year-over-year and Connectivity segment service margin expanded to a record 38%
- Continued to gain content services market share with key wins at three new airline customers
- GEE's AIRCONNECT satellite connectivity system scheduled for factory install on initial launch of Boeing 737 MAX with Southwest Airlines
Strong balance sheet with
$277.3 millionin cash at the end of Q1 2015
Consolidated revenue for Q1 2015 reached
"Our Q1 results demonstrate continued strong performance across our business units," commented
"It is important to note that we delivered favorable results while at the same time making investments in our new Global Ku Antenna system, line fit offerability of our connectivity system, IT infrastructure and international field support," continued Davis.
"We ended Q1 with strong revenue and Adjusted EBITDA* year-over-year growth," said
The table below presents financial results for the three-months ended
|(In millions, except per share amounts)|
Three Months Ended
|Content||$ 71.7||$ 63.6|
|Total Revenues||$ 100.3||$ 86.0|
|Adjusted EBITDA*||$ 8.2||$ 5.1|
|Net loss||$ (3.4)||$ (26.1)|
|Loss per share - basic||$ (0.04)||$ (0.37)|
|Loss per share - diluted||$ (0.06)||$ (0.37)|
Capital expenditures for Q1 2015 totaled approximately
Content segment revenue grew by
Connectivity segment revenue grew by
Key accomplishments since announcing fourth quarter 2014 results include the following:
- GEE's AIRCONNECT Satellite Connectivity System Scheduled for Factory Install on Initial Launch of Boeing 737 MAX. Southwest Airlines has chosen GEE's Ku-band AIRCONNECT global satellite connectivity system to be factory installed on its initial orders for the Boeing 737 MAX. First delivery of these airplanes is expected in 2017.
- Grew Content Services Market Share with Key Wins at Three New Customers and Expanded Services to Existing Customers. GEE continues to grow its content business, winning three new contracts in competitive bids during the quarter.
GEE and Air China Launch Live Television Test Flight. This represented the first live inflight television broadcast in
China. GEE successfully partnered with Air China using GEE's AIRCONNECT Ku-band connectivity system for Xinhua News Agency'sground-breaking inflight newscast.
Revolutionary Global Ku Broadband Antenna System Unveiled. GEE unveiled its revolutionary patented three-axis steering Global Ku Antenna at the Aircraft Interiors Expo in
Hamburg, Germany. This antenna, under joint development with QEST, is the first in the market to offer truly global Ku-band connectivity, including coverage on both high latitude and equatorial flight routes. The antenna is compatible with GEE's current certifications and future linefit installations.
- WISE Wireless Content Solution Deployed with New Customer. BAE Systems launched its IntelliCabin product with Air Vistara, with the delivery of inflight entertainment content enabled by GEE's WISE software system. GEE's WISE system provides an end-to-end software and content solution for wireless IFE. In addition, the media content on Air Vistara will be supplied by GEE.
Launched Two Important Trials with New Products.
- The new AIRSIDE product was launched in a trial with a new international customer. AIRSIDE allows pre-flight (ground) download of IFE content to passengers' mobile devices. The content is unlocked for viewing while inflight or 'airside', based on a passenger's booking PNR code.
- The AIRPRO operations product began a trial with a North American carrier. AIRPRO is a tablet-based workflow management tool for cabin crews. It provides crews with electronic access to manuals, tools for paperless reporting, airline-to crew messaging, an electronic Passenger Information List, and buy-on-board capabilities.
- Completed Bandwidth Procurement Agreements for Three High Throughput Satellites (HTS). These agreements are part of a strategic partnership with SES to deliver high speed in-flight connectivity and services to airline passengers around the world.
- Launched Branded Portfolio of Products and Services. GEE has standardized the branding of its product portfolio under the AIR Series moniker.
Signed New Exclusive Content Distribution Agreements. GEE has signed new and exclusive content distribution agreements with Elevation Pictures,
Search Engine Filmsand Infobase, among others.
- Launched Rovio's Popular Angry Birds to the Airlines. GEE will provide the world's best-known casual mobile gaming franchise, Angry Birds, to airlines as inflight entertainment content.
Entered into Multiple New Relationships to
Offer Digital Media Services. GEE has launched new digital media programs with Kobo JetBooks and Waterfall and continued to expand on relationships with A Look at Media and Gizmo Media, increasing its digital media offering to airlines.
Steve Haskerfrom Nielsen N.V. to Board of Directors. Hasker currently serves as Global President at Nielsen N.V., an S&P 500 company that provides global performance management services relating to media viewing and consumer behavior.
Full Year 2015 Guidance
The Company reiterates its guidance for the fiscal year ending December 31, 2015 as follows:
- Revenue in the range of $415-435 million
- Adjusted EBITDA* in the range of $45-55 million
- Capital expenditures in the range of $10-13 million
- GEE has an installation backlog for its AIRCONNECT satellite connectivity system of 175-200 units, representing approximately 2 years of installation activity.
Global Eagle will host a webcast to discuss its first quarter 2015 results on Wednesday, May 6, 2015 at 5:00 p.m. EDT (
About Global Eagle
* About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in
Adjusted EBITDA is the primary measure used by our management and board of directors to understand and evaluate our financial performance and operating trends, including period to period comparisons, to prepare and approve our annual budget and to develop short and long term operational plans. Additionally, Adjusted EBITDA is the primary measure used by the compensation committee of our board of directors to establish the funding targets for and fund the annual bonus pool for our employees and executives. We believe our presentation of Adjusted EBITDA is useful to investors both because it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making and our management frequently uses it in discussions with investors, commercial bankers, securities analysts and other users of our financial statements.
We define Adjusted EBITDA as net income (loss) attributable to common stockholders before, when applicable, net income (loss) attributable to non-controlling interests, income tax expense (benefit), other income (expense), depreciation and amortization, as further adjusted to eliminate the impact of, when applicable, stock-based compensation, acquisition and realignment costs, restructuring charges, F/X gain (loss) on intercompany loans and any gains or losses on certain asset sales or dispositions. Other income (expense), acquisition and realignment costs and restructuring charges include such items, when applicable, as (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition and/or the
With respect to projected full year 2015 Adjusted EBITDA, a quantitative reconciliation is not available without unreasonable efforts, and we are unable to address the probable significance of the unavailable information.
Cautionary Note Concerning Forward-Looking Statements
We make forward-looking statements in this release within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts for future events, including, without limitation, our earnings, Adjusted EBITDA, revenues, expenses or other future financial or business performance or strategies, or the impact of legal or regulatory matters on our business, results of operations or financial condition. These statements may be preceded by, followed by or include the words "may," "might," "will," "will likely result," "should," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "continue," "target" or similar expressions. These forward-looking statements are based on information available to us as of the date they were made, and involve a number of risks and uncertainties which
may cause them to turn out to be wrong. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: our ability to expand our domestic and international business, including our ability to grow our business with current and potential future airline partners and successfully partner with satellite service
The table below presents financial results for the three months ended March 31, 2015 and 2014.
|Condensed Consolidated Statements of Operations|
|(In thousands, except per share amounts)|
Three Months Ended
|Revenue||$ 100,305||$ 85,968|
|Cost of sales||69,426||65,117|
|Sales and marketing||3,275||2,835|
|General and administrative||18,119||17,067|
|Amortization of intangible assets||5,983||6,419|
|Total operating expenses||104,335||95,360|
|Loss from operations||(4,030)||(9,392)|
|Other income (expense), net:|
|Interest expense, net||(245)||(161)|
|Change in fair value of financial instruments||954||(15,538)|
|Other (expense) income, net||(796)||199|
|Loss before income taxes||(4,117)||(24,892)|
|Income tax (benefit) expense||(686)||1,257|
|Net income attributable to non-controlling interests||--||194|
|Net loss attributable to common stockholders||$ (3,431)||$ (26,343)|
|Net loss per share|
|Basic||$ (0.04)||$ (0.37)|
|Diluted||$ (0.06)||$ (0.37)|
|Weighted average common shares - basic||76,874||71,978|
|Weighted average common shares - diluted||78,725||71,978|
|Condensed Consolidated Balance Sheets|
|Cash and cash equivalents||$ 277,290||$ 197,648|
|Accounts receivable, net||92,481||85,517|
|Content library, net||8,704||9,570|
|Prepaid and other current assets||21,625||23,549|
|Property, plant and equipment, net||24,404||23,651|
|Other non-current assets||18,855||14,116|
|Total assets||$ 617,873||$ 533,595|
|Liabilities and Stockholders' Equity|
|Accounts payable and accrued liabilities||$ 100,998||$ 99,328|
|Derivative warrant liabilities||51,660||52,671|
|Notes payable and accrued interest||72,324||3,015|
|Deferred tax liabilities||19,126||23,410|
|Common stock, treasury stock and additional paid-in capital||635,081||614,459|
|Accumulated other comprehensive income (loss)||(224)||4|
|Total stockholders' equity||329,586||312,629|
|Total Liabilities and Stockholders' Equity||$ 617,873||$ 533,595|
|Reconciliations of Non-GAAP Measures to Unaudited Consolidated Statements of Operations|
Three Months Ended
|Net loss attributable to common stockholders||
|Net income attributable to non-controlling interests||—||194|
|Income tax (benefit) expense||(686)||1,257|
|Other expense (1)||87||15,876|
|Depreciation and amortization||8,165||9,394|
|Acquisition and realignment costs (2)||1,176||2,083|
|Restructuring charges (3)||302||—|
|Adjusted EBITDA||$ 8,163||$ 5,077|
(1) Other expense principally includes the change in fair value of our derivative financial instruments of approximately, interest expense associated with our debt, and certain non-recurring expenses through the third quarter of 2014 associated with our expansion into
|(2) Acquisition and realignment costs include such items, when applicable, as (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition and/or financing activity, (c) employee severance payments and third party professional fees directly attributable to acquisition or corporate realignment activities and (d) legal settlements or reserves for legal settlements in the period that pertain to historical matters that existed at acquired companies prior to their purchase date. Management does not consider these costs to be indicative of our core operating results.|
(3) Includes restructuring expenses pursuant to our integration plan announced on
|Revenue, Contribution Margin, and Adjusted EBITDA (1)|
|Q1'15||Q1 '14||% Change|
|Licensing and Services (3)||$ 22.2||$ 16.5||35%|
|Total Connectivity Revenue||28.6||22.4||28%|
|Licensing and Services (4), (5)||71.7||63.6||13%|
|Total Content Revenue||71.7||63.6||13%|
|Total Revenue||$ 100.3||$ 86.0||17%|
|Cost of Sales|
|Total Cost of Sales||69.4||65.1||7%|
|Total Contribution Profit||30.9||20.9||48%|
|Contribution Margin (%)|
|Total Contribution Margin||31%||24%|
|Adjusted EBITDA*||$ 8.2||$ 5.1||61%|
|(1) Reflects 100% of AIA's results; GEE owned approximately 94% and 100% of AIA's outstanding shares as of December 31, 2013 and 2014, respectively.|
|(2) Represents sales of satellite based connectivity equipment.|
|(3) Represents Wi-Fi, TV, VOD, music, shopping and travel-related revenue sold through our Connectivity platform.|
|(4) Represents revenue principally generated through the sale or license of media content, video and music programming, applications, and video games to customers.|
|(5) Content services revenue includes various services generally billed on a time and materials basis such as encoding and editing of media content.|
|Segment Revenue and Contribution Profit|
Segment revenue, expenses and contribution profit for the three month periods ended
Three Months Ended
|Licensing and Services||$ 71,650||$ 22,200||$ 93,850||$ 63,590||$ 16,494||$ 80,084|
|Cost of Sales|
|Licensing and Services||50,002||13,698||63,700||46,144||13,722||59,866|
|Total Cost of Sales||50,002||19,424||69,426||46,144||18,973||65,117|
|Other Operating Expenses||34,909||30,243|
|Loss from Operations||
Kevin TrosianVice President, Corporate Development and Investor Relations +1 310-740-8624 email@example.com firstname.lastname@example.org
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