FOR IMMEDIATE RELEASE
Access Integrated Technologies, Inc. Announces Fiscal 2007 Fourth Quarter
and Year-End Results
- Revenue Growth and Adjusted EBITDA Margin Increase Continues, Driven by New and Existing Product and Service Offerings -
MORRISTOWN, N.J. – June 20, 2007– Access Integrated Technologies, Inc. (“AccessIT” or the “Company”) (NASDAQ: AIXD) reported a 181% increase in revenues, to a record $47,110,000 for the fiscal year ended March 31, 2007, which included $3,982,000 for certain components of its Data Centers segment which the Company does not expect to continue. For the full fiscal year, the Company posted an Adjusted EBITDA1 (defined below) of $5,993,000 (which included a negative $1,206,000 from the Data Center business described above), and a net loss of $26,204,000 or $1.10 per basic and diluted share. The Company’s full year net loss includes non-cash expenses for depreciation, amortization of intangible assets and software development, non-cash interest, stock based compensation and loss on disposition of assets aggregating $25,901,000 or $1.09 per basic and diluted share.
For the fourth quarter ended March 31, 2007, the Company reported a 285% increase in revenues to a record of $17,345,000, which included $1,330,000 for certain components of its Data Centers segment which the Company does not expect to continue. For the fiscal fourth quarter, the Company posted an Adjusted EBITDA1 of $3,386,000 (which included a negative $390,000 from the Data Center business described above) and a net loss of $11,267,000 or $0.47 per basic and diluted share. The net loss for the quarter includes non-cash expenses for depreciation, amortization of intangible assets and software development, non-cash interest, stock based compensation and loss on disposition of assets totaling $11,455,000 or $0.47 per basic and diluted share.
Fourth Fiscal Quarter and Fiscal Year Highlights
• | The full year and fourth quarter increase in revenues was driven largely by revenues of UniqueScreen Media (“USM”), virtual print fee revenues of Christie/AIX, license fees earned by the Company’s Digital Media Services division for its Theatre Command Center software and digital distribution fees earned by The Bigger Picture. USM was acquired in fiscal 2007’s second quarter and The Bigger Picture was acquired in fiscal 2007’s fourth quarter. |
• | The increase in Adjusted EBITDA1 was primarily due to the increased revenues as described above, partially offset by increased operating and SG&A expenses resulting from the acquisition of USM and the advancement of the Company’s continued digital cinema deployment. |
• | Loss from operations in the March 2007 quarter increased to $7,134,000, from a loss of $2,741,000 in the year ago period. Loss from operations for the fiscal year ended March 2007 increased to $18,005,000 from a loss of $9,129,000 reported in the year ago period. The increased loss was due primarily to higher depreciation resulting from an increased asset base from the purchase of digital cinema projections systems, additional amortization of intangible assets resulting from the Company’s Fiscal 2007 acquisitions, a $2,561,000 charge associated with the disposition of Data Center assets, and non-cash stock-based compensation. Non-cash charges included in Loss from Operations for the year aggregated $23,998,000. |
• | Gross margin (revenue less direct operating expenses) increased from 54% in the third quarter to 60% in the fourth quarter. |
1 | Adjusted EBITDA is defined by the Company to be earnings before interest, taxes, depreciation and amortization, other income (expense), net, non-cash stock-based compensation and non-recurring items. Adjusted EBITDA is presented because |
(973) 290-0080 | 55 Madison Avenue, Morristown, NJ 07960 |
management believes it provides additional information with respect to the performance of its fundamental business activities. A reconciliation of Adjusted EBITDA to Generally Accepted Accounting Principles (“GAAP”) net income is included in the table attached to this release. Adjusted EBITDA is a measure of cash flow typically used by many investors, but is not a measure of earnings as defined under GAAP, and may be defined differently by others.
• | Adjusted EBITDA1 margins rose from 13% in the third quarter to 20% in the fourth quarter |
• | As of March 31, 2007, the Company had installed 2,275 digital cinema systems and 2,646 as of May 31, 2007 and intends to complete all 4,000 digital cinema systems installations by October 31, 2007. |
Bud Mayo, Chief Executive Officer of AccessIT, stated, “Fiscal 2007 was a year of transition for AccessIT from a development company to a results-driven operating company. We have established both that our business plan is working successfully, and that AccessIT is the leader in providing solutions for Digital Cinema. With the strategic acquisitions of Unique Screen Media and The Bigger Picture behind us, we are poised to continue our internal growth.”
CONFERENCE CALL NOTIFICATION
AccessIT will host a conference call to discuss its financial results at 10:30 a.m. EST on Wednesday, June 20, 2007. The conference can be accessed by dialing 913.981.5533, at least five minutes before the start of the call. No passcode is required. The conference call will also be webcast simultaneously and will be accessible via the web on AccessIT’s Web site, www.accessitx.com. A replay of the call will be available after 1:00 p.m. eastern at 719.457.0820 or 888.203.1112, passcode 1554251. The replay will be accessible through Wednesday, June 27th.
Access Integrated Technologies, Inc. (AccessIT) provides theater operators the first and only studio-backed digital cinema system delivering nearly two million digital screenings of Hollywood feature films to date. The company's fully networked digital cinema system provides feature films and alternative content via satellite to expand box office sales and develop new ways to attract incremental revenues. Through its alternative content division, The Bigger Picture, AccessIT offers five channels of programming including Kidtoon Films, FoxFaith, Fox Rhythm and Anime. The ongoing 4,000-screen deployment is the largest of its kind in the world. Access Integrated Technologies® and AccessITTM are trademarks of Access Integrated Technologies, Inc. For more information on AccessIT, visit www.accessitx.com. [AIXD-E]
Safe Harbor Statement
Investors and readers are cautioned that certain statements contained in this document, as well as some statements in periodic press releases and some oral statements of AccessIT officials during presentations about AccessIT, along with AccessIT 's filings with the Securities and Exchange Commission, including AccessIT 's registration statements, quarterly reports on Form 10-QSB and annual report on Form 10-KSB, are "forward-looking'' statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act''). Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects'', "anticipates'', "intends'', "plans'', “could”, “might”, "believes'', “seeks”, "estimates'' or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by AccessIT’s management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties and assumptions about AccessIT, its technology, economic and market factors and the industries in which AccessIT does business, among other things. These statements are not guarantees of future performance and AccessIT undertakes no specific obligation or intention to update these statements after the date of this release.
# # #
Contact:
Suzanne Moore | Samantha Cornog |
AccessIT | Casey Sayre & Williams |
973.290.0080 | (310) 396-2400 |
smoore@accessitx.com
ACCESS INTEGRATED TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)
(Unaudited)
| | Three Months Ended
March 31, | |
| | | | | | | |
Revenues | | $ | 4,511 | | $ | $17,345 | |
| | | | | | | |
Costs and expenses: | | | | | | | |
Direct operating | | | 2,810 | | | 7,015 | |
Selling, general and administrative | | | 3,016 | | | 6,603 | |
Provision for doubtful accounts | | | 96 | | | 527 | |
Research and development | | | (24) | | | 56 | |
Loss on disposition of assets | | | - | | | 2,561 | |
Non-cash stock-based compensation | | | - | | | 283 | |
Depreciation | | | 1,176 | | | 5,224 | |
Amortization of intangible assets | | | 178 | | | 2,210 | |
Total operating expenses | | | 7,252 | | | 24,479 | |
| | | | | | | |
Loss from operations | | | (2,741) | | | (7,134) | |
| | | | | | | |
Interest income | | | 136 | | | 798 | |
Interest expense | | | (315) | | | (3,772) | |
Non-cash interest expense | | | (82) | | | (935) | |
Debt conversion expense | | | (61) | | | - | |
Other income (expense), net | | | (40) | | | (224) | |
Net loss | | | | | | | |
Net loss per common share - Basic and diluted | | | | | | | |
Weighted average number of common shares outstanding: Basic and diluted | | | 17,628,282 | | | 24,362,925 | |
Certain reclassifications of prior period data have been made to conform to the current presentation.
Access Integrated Technologies, Inc.
Adjusted EBITDA (as defined)
Reconciliation to GAAP Net Income
(In thousands)
(Unaudited)
| | Three Months Ended
March 31, | |
| | | | | | | |
Net loss | | $ | (3,103) | | $ | (11,267) | |
Add Back: | | | | | | | |
Amortization of software development | | | 113 | | | 242 | |
Depreciation | | | 1,176 | | | 5,224 | |
Amortization of intangible assets | | | 178 | | | 2,210 | |
Interest income | | | (136) | | | (798) | |
Interest expense | | | 315 | | | 3,772 | |
Non-cash interest expense | | | 82 | | | 935 | |
Debt conversion expense | | | 61 | | | - | |
Other (income) expense, net | | | 40 | | | 224 | |
Loss on disposition of assets | | | - | | | 2,561 | |
Non-cash stock-based compensation | | | | | | | |
Adjusted EBITDA (as defined) | | | | | | | |
ACCESS INTEGRATED TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)
(Unaudited)
| | Three Months Ended
March 31, | |
| | | | | | | |
Revenues | | $ | 16,795 | | $ | 47,110 | |
| | | | | | | |
Costs and expenses: | | | | | | | |
Direct operating | | | 11,550 | | | 22,214 | |
Selling, general and administrative | | | 8,887 | | | 18,565 | |
Provision for doubtful accounts | | | 186 | | | 848 | |
Research and development | | | 300 | | | 330 | |
Loss on disposition of assets | | | - | | | 2,561 | |
Non-cash stock-based compensation | | | - | | | 3,125 | |
Depreciation | | | 3,693 | | | 14,699 | |
Amortization of intangible assets | | | 1,308 | | | 2,773 | |
Total operating expenses | | | 25,924 | | | 65,115 | |
| | | | | | | |
Loss from operations | | | (9,129) | | | (18,005) | |
| | | | | | | |
Interest income | | | 316 | | | 1,425 | |
Interest expense | | | (2,237) | | | (7,273) | |
Non-cash interest expense | | | (1,407) | | | (1,903) | |
Debt conversion expense | | | (6,269) | | | - | |
Other income (expense), net | | | 1,603 | | | (448) | |
Net loss | | $ | (17,123) | | $ | (26,204) | |
Net loss per common share - Basic and diluted | | $ | (1.22) | | $ | (1.10) | |
Weighted average number of common shares outstanding: Basic and diluted | | $ | 14,086,001 | | $ | 23,729,757 | |
Certain reclassifications of prior period data have been made to conform to the current presentation.
Access Integrated Technologies, Inc.
Adjusted EBITDA (as defined)
Reconciliation to GAAP Net Income
(In thousands)
(Unaudited)
| | Three Months Ended
March 31, | |
| | | | | | | |
Net loss | | $ | (17,123) | | $ | (26,204) | |
Add Back: | | | | | | | |
Amortization of software development | | | 547 | | | 840 | |
Depreciation | | | 3,693 | | | 14,699 | |
Amortization of intangible assets | | | 1,308 | | | 2,773 | |
Interest income | | | (316) | | | (1,425) | |
Interest expense | | | 2,237 | | | 7,273 | |
Non-cash interest expense | | | 1,407 | | | 1,903 | |
Debt conversion expense | | | 6,269 | | | - | |
Other (income) expense, net | | | (1,603) | | | 448 | |
Loss on disposition of assets | | | - | | | 2,561 | |
Non-cash stock-based compensation | | | - | | | 3,125 | |
Adjusted EBITDA (as defined) | | $ | (3,581) | | $ | 5,993 | |
ACCESS INTEGRATED TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
(Unaudited)
| | | | | |
ASSETS | | | | | | | |
Current assets | | | | | | | |
Cash and cash equivalents | | $ | 36,641 | | $ | 29,376 | |
Investment securities, available-for-sale | | | 24,000 | | | - | |
Accounts receivable, net | | | 1,593 | | | 18,504 | |
Unbilled revenue, current portion | | | 1,492 | | | 3,882 | |
Prepaid and other current assets | | | 700 | | | 1,988 | |
Notes receivable, current portion | | | 43 | | | 101 | |
Total current assets | | | 64,469 | | | 53,851 | |
| | | | | | | |
Deposits on property and equipment | | | 8,673 | | | 8,513 | |
Property and equipment, net | | | 35,878 | | | 197,452 | |
Intangible assets, net | | | 2,056 | | | 19,432 | |
Capitalized software costs, net | | | 1,680 | | | 2,840 | |
Goodwill | | | 7,705 | | | 13,249 | |
Accounts receivable, net of current portion | | | - | | | 248 | |
Deferred costs | | | 148 | | | 4,627 | |
Notes receivable, net of current portion | | | 1,122 | | | 1,227 | |
Unbilled revenue, net of current portion | | | 42 | | | 1,221 | |
Security deposits | | | 389 | | | 445 | |
Restricted cash | | | 180 | | | 180 | |
Total assets | | $ | 122,342 | | $ | 303,285 | |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |
| | | | | | | |
Current liabilities | | | | | | | |
Accounts payable and accrued expenses | | $ | 13,282 | | $ | 30,694 | |
Current portion of notes payable | | | 1,203 | | | 2,480 | |
Current portion of customer security deposits | | | 176 | | | 129 | |
Current portion of capital leases | | | 89 | | | 75 | |
Current portion of deferred revenue | | | 768 | | | 8,871 | |
Current portion of deferred rent expense | | | 100 | | | - | |
Total current liabilities | | | 15,618 | | | 42,249 | |
| | | | | | | |
Notes payable, net of current portion | | | 1,948 | | | 164,196 | |
Customer security deposits, net of current portion | | | 40 | | | 54 | |
Deferred revenue, net of current portion | | | 66 | | | 283 | |
Capital leases, net of current portion | | | 5,978 | | | 5,903 | |
Deferred rent expense, net of current portion | | | 918 | | | - | |
Total liabilities | | | 24,568 | | | 212,685 | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
| | | | | | | |
Stockholders' equity: | | | | | | | |
Class A common stock, $0.001 par value per share; 40,000,000 shares
authorized; 22,059,567 and 23,986,231 shares issued and 22,008,127
and 23,934,791 shares outstanding at March 31, 2006 and March 31,
2007, respectively | | | 22 | | | 24 | |
Class B common stock, $0.001 par value per share; 15,000,000 shares
authorized; 925,811 and 763,811 shares issued and outstanding, at
March 31, 2006 and March 31, 2007, respectively | | | 1 | | | 1 | |
Additional paid-in capital | | | 136,929 | | | 155,957 | |
Treasury Stock, at cost; 51,440 Class A shares | | | (172) | | | (172) | |
Accumulated deficit | | | (39,006) | | | (65,210) | |
Total stockholders' equity | | | 97,774 | | | 90,600 | |
| | | | | | | |
Total liabilities and stockholders' equity | | $ | 122,342 | | $ | 303,285 | |
Certain reclassifications of prior period data have been made to conform to the current presentation.
