With 2,500 kiosks installed in 2,000 hotels (1.25 kiosks per hotel) the projected annual EBITDA is $14.6 million, assuming that each kiosk generates a mere $20 per day and eight advertisers per kiosk at a flat monthly fee of $50.
The company conservatively projects nearly $17.8 million in annual revenues from kiosk usage and $8.4 million from advertising.
In the interest of fostering discussion (not bashing!), let me add the following: Since I keep seeing numbers like this thrown around, I'd like to add a couple of questions/comments.
1)I'm dying to see a PR with actual kiosk revenue numbers. I think it will be good, but show me real numbers. Every projection I see assumes 8 advertisers at $50/month, but has anyone who has visited a kiosk seen these advertisers? I ask this because I have tried to scan SI and RB for on-site kiosk reports, and the last one or two that I have read mentioned that there were zero advertisers present on the kiosks so far. Maybe those particular kiosks were exceptions to the rule. I'd like to hear from someone who has seen something different. Otherwise, we need to come up with a more realistic revenue projection. Speaking of which....
2)Considering the following from the 8-K:
The Company will compensate the entity 20% for all adjusted gross usage and 10% of advertising revenue generated as a result of the
site agreements negotiated during the term of the agreement. The site owner will also be paid not more than 10% of adjusted gross revenue. The entity will be paid 25% of all the adjusted gross usage and 15% of the advertising revenue for any site agreement that is signed for a duration exceeding 4 years.
So, let's remember that the gross projections for all those kiosks don't include the apparent 25-30% and 15-20% that is being taken right off the top of usage and advertising, respectively.
To be perfectly clear: I mention these points to prevent bashing, not in the spirit of it. I figure if we present the most accurate portrayal of info, we prevent the pro/con see-sawing of posts wherin one person presents only the good points, then someone else presents only the bad points, etc. We never see a balanced post. By letting the little skeletons out of the closet now, we (hopefully) prevent any big suprises down the road.
I hope we have an awesome day today!
Jape |
