Item 2.02 Results of Operations and Financial Condition.
Under the Fourth Amendment to Limited Waiver to Credit Agreement and Fourth Amendment to Credit Agreement, dated October 31, 2017, by and
among Global Eagle Entertainment Inc. (the Company or we), the guarantors party thereto, the lenders party thereto, and Citibank, N.A., as administrative agent, the Company agreed to furnish the following selected financial
information on a Current Report on
Form 8-K
on or prior to December 5, 2017:
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The Company expects its third-quarter 2017 revenue to be between $151 and $156 million.
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The Company expects its third-quarter 2017 Adjusted EBITDA
(+,*)
to be between $15 and 20 million.
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+ With respect to the Adjusted EBITDA estimate above, a quantitative reconciliation to its most directly comparable GAAP (as defined below) financial
measure is not available without unreasonable efforts due to current uncertainty with respect to the Companys income tax and goodwill impairment analyses (and any related adjustments) in this period, which will in turn affect the
Companys calculation of Adjusted EBITDA. We believe that these items may have a significant impact on our final GAAP financial results for this period. See also About
Non-GAAP
Financial
Measure below.
Our estimated third quarter 2017 revenue and estimated Adjusted EBITDA performance above is preliminary and
unaudited. The estimates are subject to the completion and finalization of
quarter-end
financial and accounting procedures, and reflect managements estimates based solely upon information available to
management as of the date of this Current Report on
Form 8-K.
Further, our estimated Adjusted EBITDA performance above should not be viewed as a substitute for quarterly financial statements prepared in
accordance with generally accepted accounting principles in the United States of America (GAAP).
The information in this
Item 2.02 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, except as expressly set forth by specific reference in such filing.
* About
Non-GAAP
Financial Measure
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we present Adjusted EBITDA,
which is a
non-GAAP
financial measure, as a measure of our performance. The presentation of Adjusted EBITDA is not intended to be considered in isolation from, or as a substitute for, or superior to, net
income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by operating activities or any other measures of our cash flows or liquidity.
Adjusted EBITDA is one of the primary measures used by our management and Board of Directors to understand and evaluate our financial
performance and operating trends, including
period-to-period
comparisons, to prepare and approve our annual budget and to develop short- and long-term operational plans.
Additionally, Adjusted EBITDA is one of the primary measures used by the Compensation Committee of our Board of Directors to establish the funding targets for (and subsequent funding of) our Annual Incentive Plan bonuses for our employees and
executives. We believe our presentation of Adjusted EBITDA is useful to investors both because it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making and because our
management frequently uses it in discussions with investors, commercial bankers, securities analysts and other users of our financial statements.
We define Adjusted EBITDA as net income (loss) before (a) income tax expense (benefit), (b) interest income (expense),
(c) change in fair value of financial instruments, (d) other (income) expense, net, including primarily, when applicable, (gains) losses from investments and foreign-currency transactions (gains) losses, (e) goodwill impairment
expense, (f) depreciation and amortization (including relating to equity-method investments) and loss on disposal and impairment of fixed assets, (g) stock-based compensation,
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(h) acquisition, integration and realignment expenses, including acquisition-related expenses and transaction costs and legal, accounting and other professional fees attributable to
acquisition and corporate realignment activities, (i) extraordinary professional accounting fees relating to our 2016 and 2017 audits, (j) operation realignment
set-up
fees, (k) employee
severance and termination benefits as well as employee retention and relocation costs, (l) settlement fees and expenses (and related third-party professional fees) and loss-contingency reserves for actual or threatened litigation pertaining to
liabilities (that existed prior to their acquisition date) at companies or businesses that we acquired through our M&A activities,
(m) non-cash
GAAP purchase accounting adjustments for certain
deferred revenue and costs and (n) restructuring expenses pursuant to our integration plan announced on September 23, 2014. Management does not consider these items to be indicative of our core operating results.
Cautionary Note Concerning Forward-Looking Statements
We make forward-looking statements within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including with respect to our estimated third quarter 2017 revenue and Adjusted EBITDA performance. These forward-looking statements are based on information available to us as of the date of this Current Report on
Form 8-K
and on our current expectations, forecasts and assumptions, and involve substantial risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views
as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as
may be required under applicable securities laws. A detailed discussion of risks and uncertainties related to our business is included in the section entitled Risk Factors in our most recent Annual Report on
Form 10-K.
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