TEMPE, Ariz. - (Business Wire)
Global Entertainment Corporation (AMEX: GEE) – a company engaged in sports management, multi-purpose events and entertainment center and related real estate development, facility and venue management and marketing, and venue ticketing, today reported a loss of $4.03 million for the fiscal year ended May 31, 2008 comprised of: 1) a loss from continuing operations of $2.82 million primarily attributable to legal fees and settlements costs associated with several litigation issues, and 2) a $1.21 million loss from discontinued operations related to the company
’s divestiture of its Cragar subsidiary. Revenue of $12.44 million was 51.8% lower than the $25.81 million of revenues realized for the fiscal year ended May 31, 2007. This reduction was primarily related to the timing of project management fees realized from major projects that occurred in fiscal 2007. The project management fees in fiscal 2007 of $13.87 million included substantial revenue from the company
’s purchase and subsequent resale of furniture, fixtures and equipment (FFE) for the arenas then under construction. Only minimal FFE revenue was realized in fiscal 2008 as project management fees were only $0.91 million. Also contributing to the decrease in revenue was a reduction of $0.3 million due to the cancellation of facility contracts in Ohio.
Richard Kozuback, president and chief executive officer, stated, “Our loss from continuing operations was impacted by the settlement of several litigation issues and the decrease in facility service fees from the cancellation of facility contracts in Ohio. Our ticketing operations were also affected by the contract cancellation; however, service fees were relatively unchanged as a result of GetTix’s well-diversified revenue stream.”
Continuing, Mr. Kozuback pointed out that, “Because the timing of the long-term development projects we work on have substantial variation, any delays in initiating or completing the projects reverberate company-wide and affect the revenue streams received by all our subsidiary companies. This was evident in fiscal 2008 and will hopefully go in the other direction for fiscal 2009. For example, in fiscal year 2009 we have the opening of the Town Toyota Center in Wenatchee, Washington planned for October 2008 for which Global subsidiary companies will supply exclusive services for up to 15 years.
- Encore Facility Management (Encore) will manage the building operations.
- Global Entertainment Marketing Systems (GEMS) will be the licensing and advertising arm handling all sales and marketing services.
- Global Entertainment Ticketing (GetTix.Net) will provide exclusive ticketing services for all events.
For fiscal 2009, we also have underway the previously announced development projects with the Cities of Allen, Texas (a $50 million multi-purpose events center), and Independence, Missouri (a $52 million multi-purpose events center). We anticipate that both facilities will have CHL teams and utilize our full array of services provided by our multiple subsidiary companies.”
Finally, Mr. Kozuback concluded, “After examining our core strengths in addition to observing the weakening of the automobile industry and the slowing demand in the automotive aftermarket business, we decided to sell the assets of Cragar Industries and take a charge in the fourth fiscal quarter of approximately $1.0 million, which is included in our loss from discontinued operations. This divestiture allows us to fully focus on our primary business of developing first-class multi-purpose events centers that offer mid-sized communities the opportunity to enjoy a wide array of sports and entertainment options.”
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Global Entertainment Corporation is an integrated events and entertainment company focused on mid-size communities that is engaged, through its six 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 development potential of new properties. International Coliseums Company (ICC) serves as project manager for arena development while Encore Facility Management coordinates operations for all arena facility scheduling. 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: intense competition within the sports and entertainment industries, past and future acquisitions, expanding operations into new markets, risk of business interruption, management of rapid growth, need for additional financing, changing consumer demands, dependence on key personnel, sales and income tax uncertainty and increasing marketing, management, occupancy and other administrative costs.
These factors are discussed in greater detail in the company's Annual Report on Form 10-K for the year ended May 31, 2008, as filed with the Securities and Exchange Commission.
| GLOBAL ENTERTAINMENT CORPORATION AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (in thousands) |
| | | | | |
| ASSETS | | | May 31, | | May 31, |
| | | 2008 | | 2007 |
| Current Assets: | | | | |
| Cash and cash equivalents | $ | 443 | | $ | 4,252 | |
| Accounts receivable, net | | 1,111 | | | 3,420 | |
| Investment in Wenatchee project | | 34,473 | | | -- | |
| Other current assets | | 2,406 | | | 1,085 | |
| | | | | |
| Total Current Assets | | 38,433 | | | 8,757 | |
| | | | | |
| Other Assets | | | 931 | | | 3,549 | |
| | | | | |
| Total Assets | $ | 39,364 | | $ | 12,306 | |
| | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| | | | | |
| Current Liabilities: | | | | |
| Accounts payable and accrued liabilities | $ | 8,468 | | $ | 4,728 | |
| Deferred revenues | | 24 | | | 240 | |
| Notes payable – current portion Liabilities related to assets to be disposed | | 27,220 233 | | | -- 318 | |
| | | | | |
| Total Current Liabilities | | 35,945 | | | 5,286 | |
| | | | | |
| Other Liabilities | | 297 | | | 66 | |
| | | | | |
| Total Liabilities | | 36,242 | | | 5,352 | |
| | | | | |
| Stockholders' Equity: | | | | |
| | | | | |
| Common stock | | | 7 | | | 7 | |
| Paid-in capital | | 10,930 | | | 10,731 | |
| Retained deficit | | (7,815 | ) | | (3,784 | ) |
| | | | | |
| Total Stockholders' Equity | | 3,122 | | | 6,954 | |
| | | | | |
| Total Liabilities and Stockholders' Equity | $ | 39,364 | | $ | 12,306 | |
| GLOBAL ENTERTAINMENT CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED SUMMARY OF OPERATIONS |
| (in thousands except share and per share amounts) |
| |
| |
| | For the Years Ended |
| | May 31, 2008 | | May 31, 2007 |
| Revenue | | $ | 12,437 | | | $ | 25,812 | |
| Expenses | | | 15,202 | | | | 28,874 | |
| Loss from operations | | | (2,765 | ) | | | (3,062 | ) |
| Other income (expense) | | | (159 | ) | | | 461 | |
| Loss from continuing operations before income taxes | | | (2,924 | ) | | | (2,601 | ) |
| Income tax benefit | | | 105 | | | - | |
| Loss from continuing operations | | | (2,819 | ) | | | (2,601 | ) |
| Loss from discontinued operations, net of income taxes | | | (1,212 | ) | | | (1,524 | ) |
| Net loss | | $ | (4,031 | ) | | $ | (4,125 | ) |
| | | | | |
| Loss per common share: | | | | | |
| Diluted | | | | | |
| Loss from continuing operations | | $ | (0.43 | ) | | $ | (0.40 | ) |
| Loss from discontinued operations | | | (0.19 | ) | | | (0.23 | ) |
| Net loss | | $ | (0.62 | ) | | $ | (0.63 | ) |
| Weighted average number of common shares outstanding: Diluted | | | 6,545,292 | | | | 6,502,736 | |
Global Entertainment Corporation
Richard Kozuback, President, 480-994-0772
or
The Miller Group
Rudy R. Miller, Chairman, 602-225-0505
Investor Relations for the Company
gee@themillergroup.net
