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GLOBAL EAGLE REPORTS FINANCIAL RESULTS
FOR THE THIRD QUARTER OF 2019
Record Quarterly Revenue of $170 million
Net Loss of $41.3 million
Record Adjusted EBITDA* of $25.4 million up 37.7% versus prior-year period
LOS ANGELES, CA, November 7, 2019Global Eagle Entertainment Inc. (Nasdaq: ENT) (Global Eagle, the Company or we), a leading provider of media, content, connectivity and data analytics to markets across air, sea and land, today announced financial results for the third quarter ended September 30, 2019. For the third quarter of 2019, Global Eagle recorded record revenue of $170 million; incurred a net loss of $41.3 million and generated record Adjusted EBITDA* of $25.4 million despite the headwind due to the Boeing 737 MAX grounding.
We are excited about generating record revenue and Adjusted EBITDA during the third quarter, commented Josh Marks, CEO of Global Eagle. We are building a culture of continuous improvement that is positively impacting our results. We achieved our goal of $25 million of Adjusted EBITDA a quarter earlier than our guidance. Our third quarter performance highlights our success balancing product innovation with meaningful improvements in our cost structure.
During the third quarter, Global Eagle continued its significant improvement in financial performance. Record revenue of $170 million was up 3.6% over the prior-year period driven by 170.4% growth in Connectivity equipment revenue led by increased aircraft installations. Our revenue growth was partially offset by an intentional decline in distribution revenue within the Media & Content segment as the Company continues to exit unprofitable business activities with unfavorable cash flow profiles. Gross margin improved 1.3 percentage points sequentially driven by the improvement in Media & Content gross margin. Media & Content gross margin improvement was mainly driven by higher revenue due to the timing of content refresh cycles and the initiation of a large new content service provider (CSP) customer. Net loss was $41.3 million for the third quarter. Adjusted EBITDA of $25.4 million increased 37.7% versus the prior-year period. With our Phase II cost savings initiatives successfully implemented, we have identified Phase III cost initiatives that we plan to implement in the first half of 2020. Our Phase III initiatives will target business process reengineering and procurement initiatives. We continue to expect to generate a minimum of $25 million of Adjusted EBITDA in the fourth quarter of 2019. We expect to transition to positive free cash flow on a sustainable basis upon the return of the Boeing 737 MAX. As of September 30, 2019, the Company had approximately $68 million of liquidity which includes cash and unused revolver capacity.
Our improved financial performance, evident in our third quarter results, is mirrored by operational improvements throughout our organization. We plan to build on this foundation in 2020, said Christian Mezger, CFO of Global Eagle. I am particularly enthusiastic about the progress we continue to make toward generating free cash flow on a sustainable basis, and with Phase III actions identified, we are confident we can achieve this milestone in 2020 independent of Boeing 737 MAX service re-entry.
The following information was filed by Global Eagle Entertainment Inc. (ENT) on Thursday, November 7, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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