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:
www.globalentertainment2000.com
www.centralhockeyleague.com
www.coliseums.com
www.GetTix.net
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