UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 2013
GOGO INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-35975 | 27-1650905 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 1250 North Arlington Rd. Itasca, IL |
60143 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 630-647-1400
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 REGULATION FD DISCLOSURE.
Representatives of Gogo Inc. (the “Company”) will use the attached presentation in various meetings with investors from time to time. A copy of the investor presentation is attached hereto as Exhibit 99.1.
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
| Exhibit No. |
Description | |
| 99.1 | Investor Presentation | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GOGO INC. | ||
| By: | /s/ Norman Smagley | |
| Norman Smagley | ||
| Chief Financial Officer | ||
Date: November 20, 2013
EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K
Dated November 20, 2013
| 99.1 | Investor Slides | |
Exhibit 99.1
Investor Presentation
November 2013
DISCLAIMER
Safe Harbor Statement
This presentation contains “forward-looking statements” that are based on management’s beliefs and assumptions and on information currently available to management. Most forward-looking statements contain words that identify them as forward-looking, such as “anticipates,” “believes,” “continues,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms that relate to future events. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Gogo’s actual results, performance or achievements to be materially different from any projected results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent the beliefs and assumptions of Gogo only as of the date of this presentation and Gogo undertakes no obligation to update or revise publicly any such forward-looking statements, whether as a result of new information, future events or otherwise. As such, Gogo’s future results may vary from any expectations or goals expressed in, or implied by, the forward-looking statements included in this presentation, possibly to a material degree.
Gogo cannot assure you that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any long-term financial or operational goals and targets will be realized. In particular, the availability and performance of certain technology solutions yet to be implemented by the Company set forth in this presentation represent aspirational long-term goals based on current expectations. For a discussion of some of the important factors that could cause Gogo’s results to differ materially from those expressed in, or implied by, the forward-looking statements included in this presentation, investors should refer to the disclosure contained under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in the Company’s prospectus relating to its initial public offering of common stock as filed with the SEC on June 24 2013 and the Company’s Quarterly Report on Form 10-Q as filed with the SEC on November 12, 2013.
Note to Certain Operating and Financial Data
In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), Gogo also discloses in this presentation certain non-GAAP financial information, including Adjusted EBITDA and Cash CapEx. These financial measures are not recognized measures under GAAP and are not intended to be, and should not be considered, in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, this presentation contains various customer metrics and operating data, including numbers of aircraft or units online, that are based on internal company data, as well as information relating to the commercial and business aviation markets, and our position within those markets. While management believes such information and data are reliable, they have not been verified by an independent source and there are inherent challenges and limitations involved in compiling data across various geographies and from various sources.
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 2
BUSINESS OVERVIEW
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 3
WHY INVEST IN GOGO
PIONEER & LEADER
EXPERIENCE & SCALE
LARGE GROWTH OPPORTUNITY TECHNOLOGY LEADERSHIP COMPELLING BUSINESS MODEL
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 4
GOGO TRANSFORMED THE FLYING EXPERIENCE FOREVER
BEFORE GOGO 2006-2008 2009-2013
~45 Million Sessions
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 5
GOGO LEADERSHIP SPANS ALL MARKET SEGMENTS
COMMERCIAL AVIATION COMMERCIAL AVIATION NORTH AMERICA REST OF WORLD
> 2,000 aircraft online Contracts for Delta’s
> 7,000 daily flights international fleet and with two foreign carriers
~80% market share(1)
Global sales organization established
Satellite and terminals contracts secured
(1) Commercial Aviation market share is based on management estimates, trade publications and other public sources as of 9/30/2013 (2) Business Aviation Iridium and ATG market share is based on management estimates as of 9/30/2013.
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
BUSINESS AVIATION GLOBAL
~ 7,000 systems operating
63% market share in Narrowband(2)
93% market share in Broadband(2)
GOGOAIR.COM | 6
STRONG INCUMBENT POSITION
GOGO HAS 9X MORE BROADBAND AIRCRAFT THAN THE CLOSEST COMPETITOR
COMMERCIAL AVIATION NORTH AMERICA
BROADBAND AIRCRAFT ONLINE
BUSINESS AVIATION NORTH AMERICA
BROADBAND AIRCRAFT ONLINE
78 133 431
2,011 1,847
(80%) (93%)
Gogo Global Eagle (Row 44)(1) All Others(1) Gogo All Others(1)
1Based on management estimates, trade publications and other public sources as of 9/30/2013
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 7
INDUSTRY LEADING EXPERIENCE & SCALE DRIVES LONG-TERM SUCCESS
CERTIFICATIONS & TECHNOLOGY AND INSTALLATIONS PRODUCT INNOVATIONS
WORLD-CLASS
BANDWIDTH FINANCIAL STRENGTH MANAGEMENT
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 8
OUR VERSATILE, PROPRIETARY PLATFORM
TRAVELERS,
AIRCRAFT TRAVELERS AIRLINES & MEDIA
OPERATORS PARTNERS
Operations-Oriented Gogo Connectivity Gogo Signature Gogo Vision Communication
& Gogo Biz Services
Services
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 9
WE PRIDE OURSELVES ON ENDURING PARTNERSHIPS
COMMERCIAL AVIATION BUSINESS AVIATION
North America Original Equipment Manufacturers
International Fractional Jet Operators
Subsidiary of
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 10
GOGO TECHNOLOGY LEADERSHIP
$220,000,000 Largest engineering investment since launch(1)
> 35 Largest number of aircraft types installed(1)
36% of total headcount Large highly specialized technology staff
Track record of technology development and
#1 market deployment
(1) Based on management estimates
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 11
BROADEST ARRAY OF TECHNOLOGY SOLUTIONS
Peak
Technology Speed Key Attributes
-Overnight install
Air-to-Ground
3.1 Mbps -All aircraft types
(EvDo Rev A)
- Limited to North America
-Triples the peak speed
Air-to-Ground 4
9.8 Mbps -More reliable than ATG
(EvDo Rev B)
-Overnight install
-Global coverage SwiftBroadband 432 Kbps -Low data speeds -Available today
-Global coverage Ku Band 50 Mbps -Multiple suppliers -Available today -Global coverage Ka Band 50 Mbps -High data speeds -Next Generation
-More spectrally efficient
Ground-to-Orbit
70 Mbps -Lower profile
(Hybrid)
-More robust & reliable
2014 Launch
2015 2015 Launch Launch
(Global) (Global) (Regional)
2014 Launch
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 12
GOGO PRODUCT LEADERSHIP
GROUND TO ORBIT GOGO TEXT & TALK GOGO ONEPHONE
UNIVERSAL CABIN
GOGO VISION FOR BA GOGO CLOUD SYSTEM
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 13
ATTACKING A LARGE AND EXPANDING GLOBAL OPPORTUNITY
North America Rest of World
COMMERCIAL AIRCRAFT (1) BUSINESS AIRCRAFT (2)
2.1x 36,000 1.4x
27,000
19,000 11,000
17,000 30,000
7,000
13,000
16,000
12,000
4,000 6,000
2012 2032F 2012 2022F
Sources:
(1) Derived from Boeing Current Market Outlook 2012 - 2032, excludes: cargo aircraft, RJs < than 50 seats. Wide-body aircraft is included as part of Rest of World market;
(2) JetNet iQ Report Q4 2012, excludes turboprop aircraft.
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 14
GROWING REVENUE DRIVES PROFITABILITY
REVENUE ($MM) ADJUSTED EBITDA ($MM)
$315(1)
85% CAGR $35
$25 $234 $27 $15
$9 $9
($1) $236 Q3
CA-ROW YTD ($45) Segment Loss
$37 $95 $160
($89)
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Q3 YTD
(1)Reflects midpoint of 2013 guidance issued on 11/11/2013
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 15
AIRCRAFT TIMES REVENUE PER AIRCRAFT
TODAY TOMORROW
INCREASE North America Global
AIRCRAFT
In-Flight Connectivity Gogo Vision Gogo Text Messaging In-Flight Connectivity Gogo Signature Services Gogo Operations-Oriented INCREASE Communications Services
REVENUE PER
AIRCRAFT All Passengers Business Passengers Media Partners Aircraft Operators
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 16
COMPELLING BUSINESS MODEL
HIGH GROWTH
SIGNIFICANT OPERATING LEVERAGE
HIGH BARRIERS TO ENTRY
Strong revenue growth and multiple growth drivers
Growing percent of high margin service revenue Transition to lower Cash CAPEX profile
Highly scalable operating infrastructure
Strong contribution margins
Incremental product offerings generate solid returns
Heavy upfront capital requirements
Exclusive license to ATG spectrum
Operational & regulatory expertise
Long-term exclusive contracts
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 17
COMPETITIVE ADVANTAGES DRIVE INTERNATIONAL WINS
TURNKEY, FULL SERVICE PROVIDER
BEST-IN-CLASS TECH PORTFOLIO
COMPELLING USER EXPERIENCE
EXPERIENCE AND SCALE
Highly scalable operating infrastructure
Certification, installation & operational expertise Pricing expertise, marketing support
IFC market leader and innovator
Technology & product leadership
Broad suite of products and pricing options
Industry leading customer service
Nearly 4,000 broadband aircraft online
Unparalleled breadth of capabilities and track record of success
Unique Leadership Position at the Intersection of Three Industries—
Telecom, Internet and Airlines
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 18
FINANCIAL REVIEW
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 19
GROWING REVENUE DRIVES PROFITABILITY
REVENUE ($MM) ADJUSTED EBITDA ($MM)
$315(1) $35
$25 $27 $15
$9 $9
$95 $160 $234
($1) $236 Q3
YTD CA-ROW
($45) Segment Loss
$37
($89)
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Q3
(1)Reflects midpoint of 2013 guidance issued on 11/11/2013 YTD
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 20
MORE AIRCRAFT & MORE REVENUE PER AIRCRAFT IN CA-NA
AIRCRAFT ONLINE ARPA (000s) REVENUE ($MM)
~ 3x 131%
4x Increase (1) $193
$100 CAGR 2,011
Increase
1,811 2,011 $84 $100 $134
$144
692 Q3
$24 YTD
$11
2009 2012 2013 Q3 2009 2012 2013 Q3 YTD 2009 2012 2013 YTD
Annualized Average Revenue per Aircraft
(1)Reflects midpoint of 2013 guidance issued on 11/11/2013
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 21
HIGH-GROWTH, HIGH-MARGIN SERVICE REVENUE STREAM DRIVES BA PROFITABILITY
ATG AIRCRAFT ONLINE SERVICE REVENUE ($MM) SEGMENT PROFIT ($MM)
1,847 $47
~38x increase
$43
$6 $3 49
1,455 76% CAGR $34 135% CAGR $36
2009 2012 2013 Q3 YTD 2009 2012 2013 Q3 LTM 2009 2012 2013 Q3 LTM
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
GOGOAIR.COM | 22
INVESTING FOR A DECADE+ OF GROWTH
ENGINEERING, DESIGN & GENERAL & ADMINISTRATIVE
REVENUE ($MM) SALES & MARKETING ($MM) DEVELOPMENT ($MM) ($MM)
$49 $50
$35 $36
85% CAGR $23 $28 $28
$26 $21 $315(1) $234
2009 2012 2013 Q3 2009 2012 2013 Q3 2009 2012 2013 Q3 YTD YTD YTD
AS % OF REVENUE
62% 77% 75%
$37 15% 15% 21% 21%
11% 9%
2009 2012 2013 Q3 2009 2012 2013 Q3 2009 2012 2013 Q3
2009 2012 2013(1) YTD YTD YTD
(1)Reflects midpoint of 2013 guidance issued on 11/11/2013
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 23
EVOLVING CAPEX MODEL
CAPITAL EXPENDITURES ($MM)
$125(2)
$105(2) $94
$77 $77 $79 $80 $58
2009 2012 2013 Q3 YTD 2013
Gross CapEx Cash CapEx (1)
(1) Cash CAPEX represents gross capital expenditures net of airborne equipment proceeds received from the airlines. (2) Reflects midpoint of guidance issued on 11/11/2013.
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL.
TRANSITION
N E
T GOGO GOGO
W
O BUILDS RENTS
R K
I N
S GOGO AIRLINE
T
A PAYS PAYS
L L
GOGOAIR.COM | 24
WHY INVEST IN GOGO
PIONEER & LEADER
EXPERIENCE & SCALE
LARGE GROWTH OPPORTUNITY TECHNOLOGY LEADERSHIP COMPELLING BUSINESS MODEL
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 25
APPENDIX
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 26
RECONCILIATION OF CASH CAPEX ($MM)
Q1 Q2 Q3 YTD 2009 2010 2011 2012 2013 2013 2013 2013
Purchases of Property and
(69) (33) (33) (67) (29) (29) (24) (83)
Equipment
Acquisition of Intangible
Assets (Capitalized (8) (7) (10) (12) (4) (3) (4) (11)
Software)
Gross CapEx (77) (40) (43) (79) (33) (33) (28) (94)
Change in Deferred —
9 11 18 5 2 1 8
Airborne Lease Incentives Amortization of Deferred
1 1 4 2 2 2 5 —
Airborne Lease Incentives
Cash CapEx (77) (30) (31) (58) (27) (29) (24) (80)
Note: Minor differences exist due to rounding
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 27
RECONCILIATION OF ADJUSTED EBITDA ($MM)
2009 2010 2011 2012 Q1 2013 Q2 2013 Q3 2013 YTD 2013 Net Income (142) (140) (18) (96) (32) (73) (19) (124) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense 30 1 9 4 10 7 22 Income Tax Provision 3 1 1 1 1 1 1 Depreciation & Amortization 22 31 33 37 14 14 14 41
EBITDA (91) (106) 16 (49) (14) (48) 3 (60)
Fair Value Derivative Adjustments 33 (59) (10) 36 36 Class A and Class B Senior Convertible
18 31 52 15 14 29 Preferred Stock Return Accretion of Preferred Stock 9 10 10 3 3 5 Stock based Compensation Expense 1 2 2 4 1 1 1 3 Loss on Extinguishment of Debt 2 Write Off of Deferred Equity Financing
5 Costs Amortization of Deferred Airborne Lease
(1) (2) (4) (2) (2) (2) (5) Incentives
Adjusted EBITDA (89) (45) (1) 9 3 4 2 9
Note: Minor differences exist due to rounding
— — — — — — — — — — — — — — — — — — — — — — — —
2013 GOGO INC. AND AFFILIATES. PROPRIETARY & CONFIDENTIAL. GOGOAIR.COM | 28