Global Traffic Network
Global Traffic Network, Inc. Reports Fiscal Second Quarter 2008 Operating Results
| New York, NY, February 12, 2007 – Global Traffic Network, Inc. (Nasdaq: GNET), a leading provider of custom traffic and news reports to radio and television stations outside the U.S., today announced its results for the quarter ended December 31, 2007, its second quarter of fiscal 2008. |
| Revenue for the quarter ended December 31, 2007 increased 61 percent to $13.2 million, from $8.2 million in the same period a year ago. The increase in revenue is attributable to an increase of $4.0 million from the Company’s Australian operations, which came primarily from its network of radio station affiliates, and an increase of $1.0 million from its Canadian operations. |
| Adjusted Operating Income for the three-month period ended December 31, 2007 tripled to $2.1 million from an Adjusted Operating Income of $0.7 million for three-months ended December 31, 2006, an increase of $1.4 million. The Company defines Adjusted Operating Income as operating income plus depreciation and amortization expense. |
| For the three months ended December 31, 2007, the Company recorded net income of $1.1 million compared to $44,000 for the year ago period. The increase is attributable to the Company’s Australian operations, which increased $1.25 million to $2.4 million for the quarter. |
| Revenue for the six month period ended December 31, 2007, was $24.1 million compared to $14.3 million for the six month period ended December 31, 2006, an increase of 69 percent. The increase in revenue for the period is primarily attributable to an $8.4 million increase in the Company’s Australian operations and an increase of $1.4 million in its Canadian operations. |
| Adjusted Operating Income for the six-month period ended December 31, 2007 was $2.7 million, compared to break-even in the first half of fiscal 2007. |
| For the six-month period, the Company reported net income of $1.0 million, compared to a loss of $0.8 million in the year ago period. The increase in income for the period is attributable to the Australian Traffic Network’s operations, which increased $2.7 million to $3.9 million. |
| Commenting on the quarter, William L. Yde III, Chairman, Chief Executive Officer and President of Global Traffic Network, said, “This has been our most successful quarter as a public company to date, and we are extremely pleased with both our top and bottom line results. This quarter saw tremendous growth on a year over year basis, indicative of the continued progress we are making in both Australia and Canada. This speaks to the quality of the radio and television reports that we provide our clients, as well as the ability of our sales staff to forge relationships and find the proper streams through which to divest our advertising inventory.” |
| “Now that we have fully established ourselves in the Australian and Canadian markets, and established the foundation to launch our service in the United Kingdom, we are confident in our ability to continue to grow at a rapid pace”, concluded Mr. Yde. |
| Conference Call |
| Global Traffic Network, Inc. will host a conference call at 8:30 a.m. EST on February 12, 2008, to discuss its fiscal second quarter results, as well as other relevant matters. To listen to the call, dial (877) 675-4757 (domestic), or (719) 325-4917 (international). The participant code is 5457266. The call will also be available live on the Internet at www.globaltrafficnetwork.com and www.kcsa.com. |
| A replay of the call will be available from 11:30 a.m. on February 12, 2008 through 11:59 p.m. on February 19, 2008. To access the replay, please call (888) 203-1112 in the United States or (719) 457-0820 outside of the United States. To access the replay, participants will need to enter the participant code 5457266. |
| About Global Traffic Network |
| Global Traffic Network, Inc. (Nasdaq: GNET) is a leading provider of custom traffic and news reports to radio and television stations outside the U.S. The Company operates the largest traffic and news network in Australia, operates traffic networks in seven Canadian markets and has recently commenced operations in the United Kingdom. In exchange for providing custom traffic and news reports, television and radio stations provide Global Traffic Network with commercial airtime inventory that the Company sells to advertisers. As a result, radio and television stations incur no out-of-pocket costs when contracting to use Global Traffic Network’s services. For more information, visit the Company’s website at www.globaltrafficnetwork.com |
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Three Months Ended Six Months Ended
December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands) (In thousands) (In thousands) (In thousands)
Net operating income (loss) $ 1,709 $ 425 $ 1,961 $ (430)
Add back:
Depreciation and amortization expense $ 365 $ 242 $ 696 $ 427
Adjusted Operating Income (Loss) $ 2,074 $ 667 $ 2,657 $ (3)
Global Traffic Network, Inc.
Income Statement Detail (Unaudited)(In Thousands)
Three months ended December 31, 2007 and 2006
2007 2007 2007 2007 2007
Australia Canada UK Corporate Total
Revenues $ 11,338 $ 1,822 $ - $ - $ 13,160
Operating expenses
Traffic 3,659 1,698 258 - 5,615
News 1,629 - - - 1,629
TV 195 - - - 195
Selling, G&A 1,923 628 69 - 2,620
Corporate overhead 400 - - 463 863
Non-cash compensation - - - 164 164
Depreciation/amortization 193 172 - - 365
Operating income (loss) 3,339 (676) (327) (627) 1,709
Interest expense 25 - - - 25
Other (income) (62) (3) (2) (377) (444)
Net income (loss) before taxes 3,376 (673) (325) (250) 2,128
Income tax expense 1,019 - - - 1,019
Net income (loss) $ 2,357 $ (673) $ (325) $ (250) $ 1,109
2006 2006 2006 2006 2006
Australia Canada UK** Corporate Total
Revenues $ 7,372 $ 850 $ - $ - $ 8,222
Operating expenses
Traffic 2,623 1,182 10 - 3,815
News 1,102 - - - 1,102
TV 153 - - - 153
Selling, G&A 1,310 474 172 - 1,956
Corporate overhead 379 82 - - 461
Non-cash compensation - - - 68 68
Depreciation/amortization 191 51 - - 242
Operating income (loss) 1,614 (939) (182) (68) 425
Interest expense 32 - - - 32
Other (income) (10) - - (121) (131)
Net income (loss) before taxes 1,592 (939) (182) 53 524
Income tax expense 480 - - - 480
Net income (loss) $ 1,112 $ (939) $ (182) $ 53 $ 44
** Global Traffic Network (UK) Limited was formed October 19, 2006.
Global Traffic Network, Inc.
Income Statement Detail (Unaudited) (In thousands)
Six Months ended December 31, 2007 and 2006
2007 2007 2007 2007 2007
Australia Canada UK Corporate Total
Revenues $ 21,250 $ 2,891 $ - $ - $ 24,141
Operating expenses
Traffic 7,139 3,255 461 - 10,855
News 3,223 - - - 3,223
TV 375 - - - 375
Selling, G&A 3,831 1,213 148 - 5,192
Corporate overhead 782 - - 737 1,519
Non-cash compensation - - - 320 320
Depreciation/amortization 380 316 - - 696
Operating income (loss) 5,520 (1,893) (609) (1,057) 1,961
Interest expense 50 - - - 50
Other (income) (120) (15) (3) (674) (812)
Net income (loss) before taxes 5,590 (1,878) (606) (383) 2,723
Income tax expense 1,692 - - 11 1,703
Net income (loss) $ 3,898 $ (1,878) $ (606) $ (394) $ 1,020
2006 2006 2006 2006 2006
Australia Canada UK** Corporate Total
Revenues $ 12,886 $ 1,444 $ - $ - $ 14,330
Operating expenses
Traffic 5,081 2,315 10 - 7,406
News 2,173 - - - 2,173
TV 211 - - - 211
Selling, G&A 2,428 860 172 - 3,460
Corporate overhead 825 131 - - 956
Non-cash compensation - - - 127 127
Depreciation/amortization 341 86 - - 427
Operating income (loss) 1,827 (1,948) (182) (127) (430)
Interest expense 72 38 - - 110
Other (income) expense (16) 1 - (290) (305)
Net income (loss) before taxes 1,771 (1,987) (182) 163 (235)
Income tax expense 536 - - - 536
Net income (loss) $ 1,235 $ (1,987) $ (182) $ 163 $ (771)
** Global Traffic Network (UK) Limited was formed October 19, 2006.
GLOBAL TRAFFIC NETWORK, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, June 30,
2007 2007
(Unaudited) (Unaudited)
ASSETS:
Current Assets:
Cash and cash equivalents $ 38,155 $ 7,278
Accounts receivable net of allowance for doubtful accounts of $259 and $93 at December 31 and June 30, 2007 10,023 8,482
Prepaids and other current assets 449 462
Deferred tax assets 215 173
Total current assets 48,842 16,395
Property and equipment, net 7,334 6,568
Intangibles 337 354
Deferred offering costs — 258
Deferred tax assets 123 139
Other assets 163 126
Total assets $ 56,799 $ 23,840
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Accounts payable and accrued expenses $ 6,888 $ 6,032
Deferred revenue 275 25
Income taxes payable 1,645 1,121
Current portion of long term debt 572 668
Total current liabilities 9,380 7,846
Long term debt, less current portion 621 822
Other liabilities 373 339
Total liabilities 10,374 9,007
Common stock, $.001 par value; 100,000,000 shares authorized; 18,045,000 shares issued and outstanding as of December 31, 2007 and 12,870,000 shares issued and outstanding as of June 30, 2007 18 13
Preferred stock, $.001 par value; 10,000,000 authorized; 0 issued and outstanding as of December 31 and June 30, 2007 — —
Additional paid in capital 48,554 18,527
Accumulated other comprehensive income 1,738 1,198
Accumulated deficit (3,885 ) (4,905 )
Total shareholders’ equity 46,425 14,833
Total liabilities and shareholders’ equity $ 56,799 $ 23,840
GLOBAL TRAFFIC NETWORK, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except share and per share amounts)
Three Months Ended Six Months Ended
December 31 December 31
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $ 13,160 $ 8,222 $ 24,141 $ 14,330
Operating expenses (exclusive of depreciation and amortization shown separately below) 7,439 5,070 14,453 9,790
Selling, general and administrative expenses 3,647 2,485 7,031 4,543
Depreciation and amortization expense 365 242 696 427
Net operating income (loss) 1,709 425 1,961 (430 )
Interest expense 25 32 50 110
Other (income) (including interest income of $441 and $123 for the three months ended December 31, 2007 and 2006 and interest income of $798 and $297 for the six months ended December 31, 2007 and 2006) (444 ) (131 ) (812) (305 )
Net income (loss) before income taxes 2,128 524 2,723 (235 )
Income tax expense 1,019 480 1,703 536
Net income (loss) $ 1,109 $ 44 $ 1,020 $ (771 )
Income (loss) per common share:
Basic $ 0.06 $ 0.00 $ 0.06 $ (0.06 )
Diluted $ 0.06 $ 0.00 $ 0.06 $ (0.06 )
Weighted average common shares outstanding:
Basic 18,045,000 12,870,000 17,201,250 12,870,000
Diluted 18,101,675 12,870,406 17,279,440 12,870,000
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SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION Global Traffic Network, Inc. defines Adjusted Operating Income (Loss) as net operating income (loss) adjusted to exclude depreciation and amortization expense. The Company uses Adjusted Operating Income (Loss), among other things, to evaluate its operating performance. The Company believes the presentation of this measure is relevant and useful for investors because it helps improve their ability to understand the Company’s operating performance and makes it easier to compare the Company’s results with other companies that have different financing and capital structures or tax rates. In addition, the Company believes this measure is among the measures used by investors, analysts and peers in the media industry for purposes of evaluation and comparing its operating performance to other companies. Adjusted Operating Income (Loss) is not a measure of performance calculated in accordance with generally accepted accounting principles (“GAAP”) and it should not be considered in isolation of, or as a substitute for, net operating income (loss) as an indicator of operating performance. Because Adjusted Operating Income (Loss) excludes certain financial information compared with net operating income (loss), the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions which are excluded. In addition, Adjusted Operating Income (Loss) may not be comparable to measures of adjusted operating income, earnings before interest, taxes, depreciation and amortization (EBITDA), operating cash flow or similarly titled measures employed by other companies. In addition, this measure is not necessarily a measure of the Company’s ability to fund its cash needs. |