Global Entertainment (AMEX:GEE)
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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.”
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 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