FOR IMMEDIATE RELEASE
Access Integrated Technologies, Inc. Announces Fiscal 2008 Second Quarter Results
- Revenue Growth and Adjusted EBITDA Margin Increase Continues, Driven by Virtual Print Fees and Leveraging Customer Relationships -
MORRISTOWN, N.J. – November 9, 2007– Access Integrated Technologies, Inc. (“AccessIT” or the “Company”) (NASDAQ: AIXD) reported a 95% increase in revenues, to a record $19.5 million for the fiscal 2008 second quarter ended September 30, 2007, versus the year-ago period. In the quarter, the Company posted an Adjusted EBITDA1 (defined below) of $6.9 million or $0.27 per basic and diluted share, and a net loss of $9.3 million or $0.37 per basic and diluted share. The net loss includes non-cash expenses for depreciation, amortization of intangible assets, non-cash interest, debt refinancing and stock-based compensation aggregating $10.4 million or $0.41 per basic and diluted share.
Second Fiscal Quarter Highlights
• | Revenues for the second quarter increased by 95%, to $19.5 million from $10 million and for the six months ended September 30th increased 142% to $37.6 million from $15.5 million in the comparable year ago periods respectively. These increases were driven largely by Virtual Print Fee (“VPF”) revenues, delivery fees, software license fees for our Theatre Command CenterTM software and contributions from our Advertising and Creative Services Division (ACS) and The Bigger Picture, our alternative content distribution division. |
• | The increases in Adjusted EBITDA1, year-to-date to $13 million from $534 thousand and in the second quarter to $6.9 million from $752 thousand in the comparable year ago periods respectively, were primarily due to the increased revenues as described above, partially offset by increased operating and SG&A expenses resulting from the acquisitions of ACS and The Bigger Picture. |
• | Loss From Operations in the September 2007 quarter decreased to $1.3 million from a loss of $5.3 million in the year ago period. The decreased loss was due primarily to higher revenues partially offset by increased depreciation and additional amortization of intangible assets resulting from the acquisitions of ACS and The Bigger Picture. Non-cash charges included in loss from operations for the year aggregated $18.9 million. |
• | Gross Margin (revenue less direct operating expenses) continues to be over 60% in this second quarter. |
• | Adjusted EBITDA1 margins improved from 8% in the prior year’s second quarter, and from 34% in our recently completed first quarter, to 35% in this quarter. |
• | As of September 30, 2007, the Company had installed 3,259 digital cinema systems. |
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1 Adjusted EBITDA is defined by the Company to be earnings before interest, taxes, depreciation and amortization, other income (expense), net, stock-based compensation and non-recurring items. Adjusted EBITDA is presented because 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.
(973) 290-0080 | 55 Madison Avenue, Morristown, NJ 07960 |
• | Growth of the Company’s satellite network to 170 sites in 40 states helped to drive 26% growth in second quarter delivery revenues versus the previous quarter despite digital screen count increase on average of 15.6% in the same period. |
Bud Mayo, Chief Executive Officer of AccessIT, stated, “the second quarter and most recent weeks have marked an inflection point for AccessIT. We’ve successfully completed our Phase One digital cinema deployment plan and are gearing up to provide another 10,000 screens to exhibitors in the coming three years. In addition to the expected ramp of revenues from our recently installed screens in our next two quarters, revenue opportunities in three of our four other divisions are also being realized and The Bigger Picture is gearing up to provide a consistent flow of content beginning in the last quarter of our Fiscal year.”
CONFERENCE CALL NOTIFICATION
AccessIT will host a conference call to discuss its financial results at 1:00 p.m. EST on Friday, November 9, 2007. The conference can be accessed by dialing 913.981.4901, 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 4:00 p.m. eastern at 719.457.0820 or 888.203.1112, passcode 5884602. The replay will be accessible through Friday, November 16th.
Access Integrated Technologies, Inc. (AccessIT) is the global leader in providing integrated solutions for digital cinema. The company’s ground-breaking digital cinema networked services along with its Library Management Server™ and Theatre Command Center™ have enabled theatres across the United States to play more than three and a half million digital 2-D and 3-D showings of Hollywood features to date. AccessIT's comprehensive vendor neutral solutions provide pre-show entertainment, feature movies and live and pre-recorded alternative content via satellite to expand box office sales and develop new ways to attract incremental revenues. Through its alternative content distribution division, The Bigger Picture, AccessIT offers channels of programming including Kidtoons, Faith Based, Music, High Octane Sports and Anime. 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:
smoore@accessitx.com
ACCESS INTEGRATED TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)
(Unaudited)
| | Three Months Ended
September 30, | |
| | 2006 | | | | 2007 | |
| | (Restated) | | | | | |
| | | | | | | |
Revenues | | $ | 9,965 | | | | $ | 19,466 | |
Costs and expenses: | | | | | | | | | |
Direct operating (exclusive of depreciation and amortization shown below) | | | 5,194 | | | | | 6,984 | |
Selling, general and administrative | | | 3,922 | | | | | 5,479 | |
Provision for doubtful accounts | | | 110 | | | | | 184 | |
Research and development | | | 156 | | | | | 100 | |
Stock-based compensation | | | 2,779 | | | | | 112 | |
Depreciation of property and equipment | | | 2,923 | | | | | 6,805 | |
Amortization of intangible assets | | | 179 | | | | | 1,069 | |
Total operating expenses | | | 15,263 | | | | | 20,733 | |
| | | | | | | | | |
Loss from operations | | | (5,298 | ) | | | | (1,267 | ) |
| | | | | | | | | |
Interest income | | | 135 | | | | | 405 | |
Interest expense | | | (849 | ) | | | | (5,988 | ) |
Non-cash interest expense | | | (23 | ) | | | | (1,095 | ) |
Debt refinancing expense | | | — | | | | | (1,122 | ) |
Other income (expense), net | | | (61 | ) | | | | (190 | ) |
Net loss | | $ | (6,096 | ) | | | $ | (9,257 | ) |
Net loss per common share - Basic and diluted | | $ | (0.26 | ) | | | $ | (0.37 | ) |
Weighted average number of common shares outstanding:
Basic and diluted | | | 23,613,396 | | | | | 25,338,550 | |
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
September 30, | |
| | 2006 | | | | 2007 | |
Net loss | | $ | (6,096 | ) | | | $ | (9,257 | ) |
Add Back: | | | | | | | | | |
Amortization of software development. | | | 169 | | | | | 166 | |
Depreciation of property and equipment | | | 2,923 | | | | | 6,805 | |
Amortization of intangible assets | | | 179 | | | | | 1,069 | |
Interest income | | | (135 | ) | | | | (405 | ) |
Interest expense | | | 849 | | | | | 5,988 | |
Non-cash interest expense | | | 23 | | | | | 1,095 | |
Debt refinancing expense | | | — | | | | | 1,122 | |
Other (income) expense, net | | | 61 | | | | | 190 | |
Stock-based compensation | | | 2,779 | | | | | 112 | |
Adjusted EBITDA (as defined) | | $ | 752 | | | | $ | 6,885 | |
(973) 290-0080 | 55 Madison Avenue, Morristown, NJ 07960 |
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)
(Unaudited)
| | Six Months Ended
September 30, | |
| | 2006 | | | | 2007 | |
| | (Restated) | | | | | |
| | | | | | | |
Revenues | | $ | 15,541 | | | | $ | 37,612 | |
| | | | | | | | | |
Costs and expenses: | | | | | | | | | |
Direct operating (exclusive of depreciation and amortization shown below) | | | 8,616 | | | | | 13,190 | |
Selling, general and administrative | | | 6,408 | | | | | 11,037 | |
Provision for doubtful accounts | | | 129 | | | | | 370 | |
Research and development | | | 179 | | | | | 323 | |
Stock-based compensation | | | 2,779 | | | | | 199 | |
Depreciation of property and equipment | | | 4,774 | | | | | 12,930 | |
Amortization of intangible assets | | | 371 | | | | | 2,139 | |
Total operating expenses | | | 23,256 | | | | | 40,188 | |
| | | | | | | | | |
Loss from operations | | | (7,715 | ) | | | | (2,576 | ) |
| | | | | | | | | |
Interest income | | | 444 | | | | | 726 | |
Interest expense | | | (1,152 | ) | | | | (10,646 | ) |
Non-cash interest expense | | | (46 | ) | | | | (2,181 | ) |
Debt refinancing expense | | | — | | | | | (1,122 | ) |
Other income (expense), net | | | (229 | ) | | | | (301 | ) |
Net loss | | $ | (8,698 | ) | | | $ | (16,100 | ) |
Net loss per common share - Basic and diluted | | $ | (0.37 | ) | | | $ | (0.64 | ) |
Weighted average number of common shares outstanding:
Basic and diluted | | | 23,288,537 | | | | | 25,050,081 | |
Certain reclassifications of prior period data have been made to conform to the current presentation.
ACCESS INTEGRATED TECHNOLOGIES, INC.
Access Integrated Technologies, Inc.
Adjusted EBITDA (as defined)
Reconciliation to GAAP Net Income
(In thousands)
(Unaudited)
| | Six Months Ended
September 30, | |
| | 2006 | | | | 2007 | |
Net loss | | $ | (8,698 | ) | | | $ | (16,100 | ) |
Add Back: | | | | | | | | | |
Amortization of software development | | | 325 | | | | | 295 | |
Depreciation of property and equipment | | | 4,774 | | | | | 12,930 | |
Amortization of intangible assets | | | 371 | | | | | 2,139 | |
Interest income | | | (444 | ) | | | | (726 | ) |
Interest expense | | | 1,152 | | | | | 10,646 | |
Non-cash interest expense | | | 46 | | | | | 2,181 | |
Debt refinancing expense | | | — | | | | | 1,122 | |
Other (income) expense, net | | | 229 | | | | | 301 | |
Stock-based compensation | | | 2,779 | | | | | 199 | |
Adjusted EBITDA (as defined) | | $ | 534 | | | | $ | 12,987 | |
ACCESS INTEGRATED TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
(Unaudited)
| | March 31,
2007 | | September 30,
2007 | |
ASSETS | | | | | | | |
Current assets | | | | | | | |
Cash and cash equivalents | | $ | 29,376 | | $ | 52,353 | |
Accounts receivable, net | | | 18,504 | | | 20,111 | |
Unbilled revenue, current portion | | | 2,324 | | | 5,718 | |
Prepaid and other current assets | | | 1,988 | | | 6,587 | |
Notes receivable, current portion | | | 101 | | | 167 | |
Total current assets | | | 52,293 | | | 84,936 | |
| | | | | | | |
Deposits on property and equipment | | | 8,513 | | | 1,273 | |
Property and equipment, net | | | 197,452 | | | 248,509 | |
Intangible assets, net | | | 19,432 | | | 17,331 | |
Capitalized software costs, net | | | 2,840 | | | 3,081 | |
Goodwill | | | 13,249 | | | 14,420 | |
Accounts receivable, net of current portion | | | 248 | | | 192 | |
Deferred costs | | | 4,627 | | | 5,647 | |
Notes receivable, net of current portion | | | 1,227 | | | 1,400 | |
Unbilled revenue, net of current portion | | | 1,221 | | | 1,381 | |
Security deposits | | | 445 | | | 430 | |
Restricted cash | | | 180 | | | 180 | |
Total assets | | $ | 301,727 | | $ | 378,780 | |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| | | | | | | |
Current liabilities | | | | | | | |
Accounts payable and accrued expenses | | $ | 28,931 | | $ | 25,801 | |
Current portion of notes payable | | | 2,480 | | | 10,144 | |
Current portion of customer security deposits | | | 129 | | | 342 | |
Current portion of capital leases | | | 75 | | | 82 | |
Current portion of deferred revenue | | | 8,871 | | | 10,543 | |
Total current liabilities | | | 40,486 | | | 46,912 | |
| | | | | | | |
Notes payable, net of current portion | | | 164,196 | | | 242,715 | |
Customer security deposits, net of current portion | | | 54 | | | 51 | |
Deferred revenue, net of current portion | | | 283 | | | 177 | |
Capital leases, net of current portion | | | 5,903 | | | 5,861 | |
Total liabilities | | | 210,922 | | | 295,716 | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
| | | | | | | |
Stockholders’ equity: | | | | | | | |
Class A common stock, $0.001 par value per share; 40,000,000 shares authorized;
23,988,607 and 25,219,096 shares issued and 23,937,167 and 25,167,656 shares outstanding at March 31, 2007 and September 30, 2007, respectively | | | 24 | | | 25 | |
Class B common stock, $0.001 par value per share; 15,000,000 shares authorized;
763,811 shares issued and outstanding at March 31, 2007 and September 30, 2007 | | | 1 | | | 1 | |
Additional paid-in capital | | | 155,957 | | | 164,315 | |
Treasury Stock, at cost; 51,440 Class A shares | | | (172 | ) | | (172 | ) |
Accumulated deficit | | | (65,005 | ) | | (81,105 | ) |
Total stockholders’ equity | | | 90,805 | | | 83,064 | |
| | | | | | | |
Total liabilities and stockholders’ equity | | $ | 301,727 | | $ | 378,780 | |
Certain reclassifications of prior period data have been made to conform to the current presentation.
