Today Becomes Current with SEC Reporting Obligations
Today Satisfies All NASDAQ Continued Listing Conditions
LOS ANGELES, Jan. 31, 2018 (GLOBE NEWSWIRE) -- Global Eagle Entertainment Inc. (NASDAQ:ENT) (“Global Eagle,” the “Company” or “we”), a leading provider of media, content, connectivity and data analytics to markets across air, sea and land, today announces unaudited financial results for the nine months ended September 30, 2017. Today, the Company will file with the Securities and Exchange Commission (“SEC”) its Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2017. For the nine-month period ended September 30, 2017, Global Eagle recorded revenue of $460 million; incurred a net loss of $223 million; and generated Adjusted EBITDA* of $48.3 million.
“Today, we become current with our SEC reporting and will have met all of Nasdaq’s conditions for continued listing,” commented Jeff Leddy, CEO of Global Eagle. “The results for our first three quarters of 2017 are consistent with our goal of building a solid foundation for Global Eagle. We have worked internally to drive operational improvements through integration of our products, personnel and locations, setting the foundation for continuous efficiency gains as we move into 2018.”
Over the past year, Global Eagle has improved service levels to its customers and their end-users through more efficient network management, due in part to the implementation of technology from prior acquisitions. Further, the Company continues to strengthen its go-to-market strategy by developing solutions that enhance the customer’s entertainment experience, such as the Company’s new Ocean Prime TV product for maritime markets. Ocean Prime TV is an extension of the Company’s successful aviation IPTV and cruise-television products, which the Company has customized for broader maritime segments.
“We have made important investments in customer service and operational excellence to improve the delivery of our world class products to airline, cruise and yacht passengers and other end-users,” continued Mr. Leddy. “Our emphasis on operational execution combined with our improved go-to-market strategy has been validated recently with multiple new business wins in both our Media & Content and Connectivity segments.”
Paul Rainey, CFO of Global Eagle, remarked, “Beginning in 2017 and continuing into 2018, we began strengthening our finance functions and shared services, which we expect will lead to lower one-time cash expenses and reduce overall operating expenses as we move into 2018. We plan to drive margin expansion through operating leverage driven by organic revenue growth, the integration of past acquisitions, and the continued implementation of finance and operational control systems and processes. Additionally, we are putting particular emphasis on improving our cash-flow generation in 2018.”
Company Highlights
Covenant Compliance and Listing Update
Webcast
Global Eagle will host a live webcast tomorrow (Thursday, February 1, 2018) at 12:00 p.m. ET (9:00 a.m. PT). The Company will make the webcast available on the Investor Relations section of its website at http://investors.geemedia.com/events.cfm. An archive of the webcast replay will be on its website for 30 days following the event.
About Global Eagle
Global Eagle is a leading provider of media, content, connectivity and data analytics to markets across air, sea and land. Global Eagle offers a fully integrated suite of rich media content and seamless connectivity solutions to airlines, cruise lines, commercial ships, high-end yachts, ferries and land locations worldwide. With approximately 1,500 employees and 50 offices on six continents, the Company delivers exceptional service and rapid support to a diverse customer base. Find out more at: www.GlobalEagle.com.
Contact:
Peter A. Lopez
Vice President, Investor Relations
+1 310-740-8624
[email protected]
[email protected]
* About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States, or GAAP, we present Adjusted EBITDA, which is a non-GAAP financial measure, as a measure of our performance. The presentation of Adjusted EBITDA is not intended to be considered in isolation from, or as a substitute for, or superior to, net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by operating activities or any other measures of our cash flows or liquidity. Further, we note that Adjusted EBITDA as presented herein is defined and calculated differently than the “Consolidated EBITDA” definition in our senior-secured credit agreement, which Consolidated EBITDA definition we use for financial-covenant-compliance purposes thereunder and as a measure of our liquidity. For more information on the non-GAAP financial measure used herein, please see the table entitled “Reconciliation of GAAP to Non-GAAP Measure” at the end of this release.
Adjusted EBITDA is one of the primary measures 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 one of the primary measures used by the Compensation Committee of our Board of Directors to establish the funding targets for (and subsequent funding of) our Annual Incentive Plan bonuses 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 because 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) before (a) interest expense (income), (b) income tax expense (benefit) and (c) depreciation and amortization (including relating to equity-method investments) and loss on disposal and impairment of fixed assets, and we then further adjust that result to exclude (1) change in fair value of financial instruments, (2) other (income) expense, including primarily, when applicable, (gains) losses from investments and foreign-currency-transaction (gains) losses, (3) goodwill impairment expense, (4) stock-based compensation expense, (5) strategic-transaction, integration and realignment expenses (as described below), (6) auditor and related third-party professional fees and expenses related to our internal-control deficiencies (and the remediation thereof) and delays in our 2016 audit process, (7) excess content expenses (as described below), (8) securities class-action expenses (as described below), (9) losses on significant customer bankruptcies (as described below) and (10) restructuring expenses pursuant to our September 2014 integration plan (when applicable in the period). Management does not consider these items to be indicative of our core operating results.
“Excess content expenses” includes the additional purchasing costs that we incurred in 2017 to procure movie content for our customers, notwithstanding that we could have procured equivalent content under our (preferential-pricing) output arrangements with major studios. We incurred these additional costs because we could not timely identify and measure our movie-content expenditures and procurement during the period due to weaknesses in our control environment.
“Losses on significant customer bankruptcies” includes (1) our provision for bad debt associated with the bankruptcies of Air Berlin and Alitalia (two of our Media & Content customers) in 2017, together with (2) the costs (e.g., content acquisition fees) that we incurred to maintain service to those customers during their bankruptcy proceedings in order to preserve the customer relationship.
“Securities class-action expenses” includes third-party professional fees and expenses associated with the securities class-action lawsuits filed against us in 2017.
“Strategic-transaction, integration and realignment expenses” includes (1) transaction-related expenses and costs (including third-party professional fees) attributable to acquisition, financing, investment and other strategic-transaction activities, (2) integration and realignment expenses and allowances, (3) employee-severance, retention and relocation expenses, (4) purchase-accounting adjustments for deferred revenue, costs and credits associated with companies and businesses that we have acquired through our M&A activities, (5) service-level-agreement penalties incurred during our Eagle-1 migration and setup in its new orbital slot in 2017, and (6) claims at companies or businesses that we acquired through our M&A activities for underlying liabilities that pre-dated our acquisition of those companies or businesses. In respect of clause (6) in this definition, we include (i.e., exclude from net income (loss)) any estimated loss contingencies and provisions for legal settlements relating to those liabilities.
Cautionary Note Concerning Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements with respect to our cash-flow generation, revenue growth and margin expansion in future periods, SEC reporting compliance, continued financial-covenant compliance under our credit agreement, the cessation of Nasdaq’s delisting proceedings, M&A integration activities, our systems and process implementation activities, business outlook, industry, business strategy, plans, goals and expectations concerning our market position, international expansion, future technologies, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this press release.
Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following:
The forward-looking statements herein speak only as of the date the statements are made (which is the date of this press release). You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Financial Information
The table below presents financial results for the nine months ended September 30, 2017 and 2016.
Global Eagle Entertainment Inc. | |||||||
Condensed Consolidated Statements of Operations | |||||||
(In thousands, except per share amounts) | |||||||
(Unaudited) | |||||||
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Revenue | $ | 459,871 | $ | 372,991 | |||
Operating expenses: | |||||||
Cost of sales | 341,580 | 255,202 | |||||
Sales and marketing | 30,376 | 19,553 | |||||
Product development | 26,921 | 25,078 | |||||
General and administrative | 109,372 | 82,395 | |||||
Legal Settlement | 785 | 41,688 | |||||
Amortization of intangible assets | 32,849 | 24,055 | |||||
Goodwill impairment | 78,000 | - | |||||
Total operating expenses | 619,883 | 447,971 | |||||
Loss from operations | (160,012 | ) | (74,980 | ) | |||
Other income (expense), net: | |||||||
Interest income (expense), net | (43,935 | ) | (7,829 | ) | |||
Loss on Extinguishment of Debt | (14,389 | ) | - | ||||
Income (loss) from equity method investments | 3,911 | 2,065 | |||||
Change in fair value of financial instruments | 2,672 | 17,982 | |||||
Other income (expense), net | 38 | (4,623 | ) | ||||
Loss before income taxes | (211,715 | ) | (67,385 | ) | |||
Provision (benefit) for income taxes | 10,993 | (46,167 | ) | ||||
Net loss | $ | (222,708 | ) | $ | (21,218 | ) | |
Net income (loss) per share | |||||||
Basic | $ | (2.57 | ) | $ | (0.27 | ) | |
Diluted | $ | (2.57 | ) | $ | (0.27 | ) | |
Weighted average shares – basic and diluted | |||||||
Basic | 86,710 | 79,892 | |||||
Diluted | 86,710 | 79,892 |
Global Eagle Entertainment Inc. | |||||||
Condensed Consolidated Balance Sheet | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
September 30, | December 31, | ||||||
2017 | 2016 | ||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 58,037 | $ | 50,686 | |||
Restricted cash | 1,021 | 17,992 | |||||
Accounts receivable, net | 113,924 | 120,492 | |||||
Inventories | 29,793 | 25,986 | |||||
Prepaid expenses | 20,615 | 17,658 | |||||
Other current assets | 11,987 | 20,786 | |||||
TOTAL CURRENT ASSETS: | 235,377 | 253,600 | |||||
Content library | 9,581 | 21,470 | |||||
Property, plant and equipment, net | 200,894 | 166,049 | |||||
Goodwill | 248,693 | 327,836 | |||||
Intangible assets, net | 133,737 | 166,720 | |||||
Equity method investments | 155,378 | 156,527 | |||||
Other non-current assets | 8,636 | 7,233 | |||||
Total Assets | $ | 992,296 | $ | 1,099,435 | |||
Liabilities and Stockholders' Equity | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued liabilities | 191,611 | 240,344 | |||||
Deferred revenue | 6,610 | 6,970 | |||||
Current portion of long-term debt | 13,424 | 2,069 | |||||
Other current liabilities | 10,849 | 11,754 | |||||
TOTAL CURRENT LIABILITIES: | 222,494 | 261,137 | |||||
Deferred revenue, non-current | 1,067 | 1,536 | |||||
Long-term debt | 601,653 | 468,231 | |||||
Deferred tax liabilities | 31,801 | 33,205 | |||||
Other non-current liabilities | 30,038 | 36,329 | |||||
Total Liabilities | 887,053 | 800,438 | |||||
Stockholders' Equity | |||||||
Common stock | 10 | 9 | |||||
Treasury stock, 3,053,634 shares at September 30, 2017 and December 31, 2016 | (30,659 | ) | (30,659 | ) | |||
Additional paid-in capital | 776,033 | 747,005 | |||||
Subscriptions receivable | (566 | ) | (553 | ) | |||
Accumulated deficit | (639,385 | ) | (416,389 | ) | |||
Accumulated other comprehensive loss | (190 | ) | (416 | ) | |||
Total Stockholder's Equity | 105,243 | 298,997 | |||||
Total Liabilities and Stockholders' Equity | $ | 992,296 | $ | 1,099,435 | |||
Global Eagle Entertainment Inc. | |||||
Reconciliation of GAAP to Non-GAAP Measure | |||||
(In thousands) | |||||
(Unaudited) | |||||
Nine Months Ended September 30, | |||||
Adjusted EBITDA reconciliation: | 2017 | 2016 | |||
Net income (loss) | (222,708 | ) | (21,218 | ) | |
Interest expense (income) | 58,324 | 7,829 | |||
Income tax expense (benefit) | 10,993 | (46,167 | ) | ||
Depreciation and amortization and loss on disposal and impairment of fixed assets | 73,342 | 38,169 | |||
Change in fair value of financial instruments | (2,672 | ) | (17,982 | ) | |
Other (income) expense | (38 | ) | 4,623 | ||
Goodwill impairment expense | 78,000 | - | |||
Stock-based compensation expense | 4,000 | 8,062 | |||
Strategic-transaction, integration and realignment expenses | 20,209 | 64,869 | |||
Internal-control and delayed audit expenses | 23,458 | - | |||
Excess content expenses | 1,987 | - | |||
Securities class-action expenses | 869 | - | |||
Losses on significant customer bankruptcies | 2,537 | - | |||
Adjusted EBITDA | 48,301 | 38,185 | |||
See "About Non-GAAP Financial Measures" in the accompanying press release, including our definition of Adjusted EBITDA described therein. | |||||
We use cookies to tailor your experience, measure site performance and present relevant offers and advertisements. By clicking ‘Accept’ or any content on this site, you agree that cookies can be placed on your browser. You can view our privacy policy to learn more.
If you would like to get more data, alerts and access to Real Vision videos, join us as an Insider Tracking Advantage Ultra member