Published: April 14, 2011
Global Entertainment Corporation Reports Third Quarter 2011 Results
TEMPE, Ariz. - (BUSINESS WIRE) - Global Entertainment Corporation (OTCBB: GNTP) - an integrated
event and entertainment company, today reported financial results for
the third quarter of its fiscal year 2011 ended February 28, 2011.
During this period, the company realized a net loss of $0.2 million or
$0.03 per share compared to a net loss of $0.5 million or $0.08 per
share for the three-month period ended February 28, 2010.
During the three months ended February 28, 2011 Global's total revenues
were $1.6 million. This represented a 52 percent decline from the same
period in 2010 in which the company produced total revenues of $3.2
million. The primary causes of this decrease were drops in the company's
food service revenue and facility management fees. Global terminated its
food service operations in October 2010 and therefore, earned no food
service revenue during the third quarter of 2011 in comparison to $0.9
million during the same period the previous year. Facility management
fees fell to $0.3 million in the most recent quarter contrasted against
$1.1 million in the prior year period. As of October 2010, the company
is no longer managing facilities other than the Tim's Toyota Center in
Prescott Valley, Arizona, which will result in reduced facility
management fees going forward.
Two other segments that affected the company's revenues negatively were
ticket service fees and project management fees. Ticket service fees
declined to $0.05 million in the third quarter of fiscal 2011 compared
to $0.3 million during the third quarter of fiscal 2010. Similarly,
project management fees decreased to $0.1 million from $0.2 million in
the same comparison periods. Project management fees in the third
quarter were related to the construction of the facility in Dodge City,
Kansas, which was completed in February 2011. Currently the company is
not managing construction of any projects.
The Central Hockey League ("CHL" ) continues to be a core strength for
Global Entertainment as license fees - league dues and other rose
slightly during the quarter to $0.64 million from $0.63 million during
the third quarter of fiscal 2010. This was due to an increase in the
number of teams in the CHL year-over-year.
In addition, advertising sales commissions increased $0.2 million
year-over-year to $0.3 million in third quarter fiscal 2011 compared to
$0.07 million during the prior year's period. However, this was due to a
one-time payment related to the termination agreement associated with
Dodge City and the company expects future advertising sales commissions
to decrease.
Total operating costs declined year-over-year, falling to $1.9 million
during the third quarter from $3.6 million in the third quarter of 2010,
a drop of $1.7 million. Cost of revenues fell to $0.9 million for the
quarter, down from $2.0 million in the same quarter the previous year.
Cost of revenues as a percentage of total revenue improved to 55.0
percent during the third quarter from 60.8 percent. General and
administrative costs also declined, moving to $1.0 million this past
quarter from $1.7 million in the same period in 2010. However, general
and administrative costs as a percentage of revenue increased to 64.3
percent from 51.8 percent.
Richard Kozuback, President and Chief Executive Officer, stated, "We
continue to be challenged significantly by the economy. Our ticket
service fees were impacted greatly by the decrease in the number of
events held and attendance at those events in our facilities. In
addition we've moved away from non-core businesses such as food service
and facility management." Kozuback added, "We remain proud of the
Central Hockey League's performance during these difficult times. We are
continuing to strive to operate more efficiently and to improve the
company's future operating results."
Visit our web sites:
Global Entertainment Corporation is an integrated events and
entertainment company focused on mid-size communities that is engaged,
through its seven wholly owned subsidiaries, in sports management,
multi-purpose events and entertainment centers and related real estate
development, facility and venue management and marketing and venue
ticketing. Global Properties I, in correlation with arena
development projects, works to maximize value and develop potential new
properties. International Coliseums Company, Inc. (ICC) serves as
project manager for arena development while Encore Facility Management
and GEC Food Service, LLC coordinate arena operations and
concessions. Global Entertainment Marketing Systems (GEMS)
pursues licensing and marketing opportunities related to the Company's
sports management and arena developments and operations. Global
Entertainment Ticketing (GetTix.Net) is a ticketing company for
sports and entertainment venues. The Western Professional Hockey
League, Inc., through a joint operating agreement with the Central
Hockey League, is the operator and franchisor of professional minor
league hockey teams in nine states.
Certain statements in this release may be "forward-looking statements"
within the meaning of The Private Securities Litigation Reform Act of
1995. These forward-looking statements may include projections of
matters that affect revenue, operating expenses or net earnings;
projections of capital expenditures; projections of growth; hiring
plans; plans for future operations; financing needs or plans; plans
relating to the company's products and services; and assumptions
relating to the foregoing.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified. Future
events and actual results could differ materially from those set forth
in, contemplated by, or underlying the forward-looking information.
Some of the important factors that could cause the company's actual
results to differ materially from those projected in forward-looking
statements made by the company include, but are not limited to, the
following: limited liquidity and the need for additional financing,
intense competition within the sports and entertainment industries, past
and future acquisitions, expanding operations into new markets, risk of
business interruption, changing consumer demands, dependence on key
personnel, sales and income tax uncertainty and increasing marketing,
management, occupancy and other administrative costs.
The "audited" consolidated balance sheet contained in this press release
has been derived from, and should be read in conjunction with, the
Company's May 31, 2010 annual report on Form 10-K. This press release
does not include all disclosures normally required by accounting
principles generally accepted in the United States.
FINANCIAL TABLES FOLLOW:
|
GLOBAL ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of February 28, 2011 (Unaudited) and May 31, 2010 (Audited)
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
February 28,
|
|
May 31,
|
|
|
|
2011
|
|
2010
|
|
ASSETS
|
|
(Unaudited)
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
523
|
|
|
$
|
193
|
|
|
Accounts receivable, net of $0 and $194 allowance at February 28,
2011 and May 31, 2010
|
|
|
1,117
|
|
|
|
1,042
|
|
|
Prepaid expenses and other assets
|
|
|
86
|
|
|
|
257
|
|
|
Total current assets
|
|
|
1,726
|
|
|
|
1,492
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
88
|
|
|
|
107
|
|
|
Accounts receivable
|
|
|
215
|
|
|
|
215
|
|
|
Goodwill
|
|
|
519
|
|
|
|
519
|
|
|
Other assets
|
|
|
100
|
|
|
|
119
|
|
|
Total assets
|
|
$
|
2,648
|
|
|
$
|
2,452
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
316
|
|
|
$
|
739
|
|
|
Accrued liabilities
|
|
|
980
|
|
|
|
871
|
|
|
Deferred revenues
|
|
|
192
|
|
|
|
86
|
|
|
Contractual obligation - current portion
|
|
|
35
|
|
|
|
41
|
|
|
Notes payable - current portion
|
|
|
1,778
|
|
|
|
79
|
|
|
Total current liabilities
|
|
|
3,301
|
|
|
|
1,816
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liability, net
|
|
|
5
|
|
|
|
5
|
|
|
Contractual obligation - long-term portion
|
|
|
9
|
|
|
|
35
|
|
|
Total liabilities
|
|
|
3,315
|
|
|
|
1,856
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (see Note 5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
Global Entertainment Corporation stockholders' equity:
|
|
|
|
|
|
|
|
Preferred stock, $.001 par value; 10,000,000 shares authorized; no
shares issued or outstanding
|
|
|
-
|
|
|
|
-
|
|
|
Common stock, $.001 par value; 50,000,000 shares authorized;
6,656,062 and 6,646,062 shares issued and outstanding as of
February 28, 2011 and as of May 31, 2010
|
|
|
7
|
|
|
|
7
|
|
|
Additional paid-in capital
|
|
|
10,992
|
|
|
|
10,987
|
|
|
Accumulated deficit
|
|
|
(11,648
|
)
|
|
|
(10,410
|
)
|
|
Total Global Entertainment Equity (Deficit)
|
|
|
(649
|
)
|
|
|
584
|
|
|
Noncontrolling interests
|
|
|
(18
|
)
|
|
|
12
|
|
|
Total Stockholders' Equity (Deficit)
|
|
|
(667
|
)
|
|
|
596
|
|
|
Total Liabilities and Stockholders' Equity (Deficit)
|
|
$
|
2,648
|
|
|
$
|
2,452
|
|
|
|
|
|
|
|
|
GLOBAL ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended February 28, 2011 and 2010 (Unaudited)
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
|
February 28,
|
|
February 28,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project development fees
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
152
|
|
|
Project management fees
|
|
|
141
|
|
|
|
203
|
|
|
|
529
|
|
|
|
1,182
|
|
|
Facility management fees
|
|
|
315
|
|
|
|
1,116
|
|
|
|
1,582
|
|
|
|
3,554
|
|
|
Ticket service fees
|
|
|
54
|
|
|
|
268
|
|
|
|
437
|
|
|
|
781
|
|
|
Food service revenue
|
|
|
-
|
|
|
|
909
|
|
|
|
271
|
|
|
|
1,233
|
|
|
Advertising sales commissions
|
|
|
313
|
|
|
|
74
|
|
|
|
435
|
|
|
|
265
|
|
|
License fees - league dues and other
|
|
|
640
|
|
|
|
626
|
|
|
|
1,397
|
|
|
|
1,474
|
|
|
License fees - initial and transfer
|
|
|
-
|
|
|
|
-
|
|
|
|
250
|
|
|
|
100
|
|
|
Other revenue
|
|
|
98
|
|
|
|
29
|
|
|
|
375
|
|
|
|
188
|
|
|
Total revenues
|
|
|
1,561
|
|
|
|
3,225
|
|
|
|
5,276
|
|
|
|
8,929
|
|
|
OPERATING COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
858
|
|
|
|
1,962
|
|
|
|
2,892
|
|
|
|
5,041
|
|
|
General and administrative costs
|
|
|
1,003
|
|
|
|
1,671
|
|
|
|
3,437
|
|
|
|
4,498
|
|
|
Total operating costs and expenses
|
|
|
1,861
|
|
|
|
3,633
|
|
|
|
6,329
|
|
|
|
9,539
|
|
|
Operating Loss
|
|
|
(300
|
)
|
|
|
(408
|
)
|
|
|
(1,053
|
)
|
|
|
(610
|
)
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
5
|
|
|
Interest expense
|
|
|
(44
|
)
|
|
|
(2
|
)
|
|
|
(70
|
)
|
|
|
(7
|
)
|
|
Gain on settlement of debt
|
|
|
179
|
|
|
|
-
|
|
|
|
179
|
|
|
|
-
|
|
|
Loss on investment in PVEC, LLC
|
|
|
(33
|
)
|
|
|
(85
|
)
|
|
|
(312
|
)
|
|
|
(85
|
)
|
|
Total other expense
|
|
|
102
|
|
|
|
(83
|
)
|
|
|
(203
|
)
|
|
|
(87
|
)
|
|
Loss from Operations, before tax
|
|
|
(198
|
)
|
|
|
(491
|
)
|
|
|
(1,256
|
)
|
|
|
(697
|
)
|
|
Income Tax Benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Net Loss
|
|
|
(198
|
)
|
|
|
(491
|
)
|
|
|
(1,256
|
)
|
|
|
(697
|
)
|
|
Net Income (Loss), attributable to noncontrolling interest
|
|
|
1
|
|
|
|
8
|
|
|
|
(18
|
)
|
|
|
25
|
|
|
Net Loss, attributable to Global
|
|
$
|
(199
|
)
|
|
$
|
(499
|
)
|
|
$
|
(1,238
|
)
|
|
$
|
(722
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Per Share - basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss, attributable to Global common shareholders
|
|
$
|
(0.03
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding - basic and
diluted
|
|
|
6,649,618
|
|
|
|
6,646,062
|
|
|
|
6,647,234
|
|
|
|
6,639,394
|
|
Global Entertainment Corporation
Richard Kozuback, 480-994-0772
President
www.globalentertainment2000.com
or
The
Miller Group
Investor Relations for the Company
Rudy R.
Miller, 602-225-0505
Chairman
gntp@themillergroup.net
www.themillergroup.net
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