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Central European Media Enterprises Reports First Quarter 2010 Results
May 05, 2010, HAMILTON, BERMUDA
- Q1 Net Revenues of $143.6 million
- Q1 EBITDA of $0.8 million
HAMILTON, BERMUDA, May 5, 2010 - Central European Media Enterprises Ltd. ("CME" or the "Company") (NASDAQ/Prague Stock Exchange - CETV) today announced financial results for the three months ended March 31, 2010.
Net revenues for the first quarter of 2010 increased $7.3 million to $143.6 million, compared to the first quarter of 2009. EBITDA for the quarter decreased $26.9 million to $0.8 million. Operating loss for the quarter decreased $52.2 million to $(19.1) million. Net loss from continuing operations increased $3.9 million to a loss of $(42.0) million, and fully diluted loss per share decreased by $0.38 to a loss of $(0.67). Our former operations in Ukraine have been treated as discontinued operations for all periods presented. Results for the first quarter of 2010 include the Media Pro Entertainment businesses acquired by CME in December 2009.
Adrian Sarbu, President and Chief Executive Officer of CME, commented: "The recent completion of the Ukraine and Bulgaria transactions has consolidated our leaderships across all our six home markets. We have rebuilt CME as a vertically integrated media and entertainment company to better face the challenges in our industry. Demand for TV advertising continued to decline in the first quarter although at a slower pace. Central and Eastern Europe will gradually emerge from the crisis during the first half of 2010 and in the second half the demand for TV advertising is expected to show single digit growth. As recovery progresses we will convert our leading audience and market shares into strong revenues and operating margins."
Consolidated Results for the Three Months Ended March 31, 2010
Net revenues for the three months ended March 31, 2010 increased by 5% to $143.6 million from $136.3 million for the three months ended March 31, 2009. Operating loss for the quarter was $(19.1) million compared to $(71.3) million for the three months ended March 31, 2009. Net loss attributable to the shareholders of CME for the quarter was a loss of $(42.3) million compared to $(44.4) million for the three months ended March 31, 2009. Fully diluted loss per share for the three months ended March 31, 2010 decreased $0.38 to a loss of $(0.67). Our former operations in Ukraine have been treated as discontinued operations for all periods presented.
EBITDA(1) for the three months ended March 31, 2010 decreased from $27.7 million in the three months ended March 31, 2009 to $0.8 million.
Headline Consolidated Results for the three months ended March 31, 2010 and 2009 were:
| CONSOLIDATED RESULTS (Unaudited) | ||||
| For the Three Months Ended December 31, 2009For the Three Months Ended March 31, (US $000’s) |
||||
| 2010 | 2009 | $ change | % change | |
| Net revenues | $ 143,641 | $ 136,320 | $ 7,321 | 5% |
| EBITDA | $ 841 | $ 27,746 | $ (26,905) | (97)% |
| Operating loss | $ (19,133) | $ (71,284) | $ 52,151 | 73% |
| Net loss attributable to CME | $ (42,294) | $ (44,438) | $ 2,144 | 5% |
| Fully diluted loss per share | $ (0.67) | $ (1.05) | $0.38 | 36% |
Segment Results
We evaluate the performance of our operations based on Net Revenues and EBITDA (earnings before interest, taxes, depreciation and amortization).
Our net revenues and Consolidated EBITDA for the three months ended March 31, 2010 and 2009 were:
| SEGMENT RESULTS (Unaudited) | ||||
| For the Three Months Ended March 31, (US $000’s) |
||||
| 2010 | 2009 | $ change | % change | |
| Net Revenues – Broadcast | $ 135,425 | $ 134,525 | $ 900 | 1% |
| Net Revenues – New Media | 2,021 | 1,757 | 264 | 15% |
| Net Revenues – Media Pro Entertainment | 28,043 | 14,411 | 13,632 | 95% |
| Eliminations | (21,848) | (14,373) | ,(7,475) | (52)% |
| Net Revenues | $ 143,641 | $ 136,320 | $7,321 | 5% |
| EBITDA – Broadcast | $ 17,817 | $ 37,688 | $ (19,871) | (53)% |
| EBITDA – New Media | (3,384) | (1,564) | (1,820) | (116)% |
| EBITDA – Media Pro Entertainment | (2,033) | (1,437) | (596) | (42)% |
| EBITDA – Central | (10,812) | (4,259) | (6,553) | (154)% |
| Eliminations | (747) | (2,682) | 1,935 | 72% |
| Consolidated EBITDA | $ 841 | $ 27,746 | $ (26,905) | (97)% |
(1) EBITDA is defined in 'Segment Data' below. Consolidated EBITDA is equal to the EBITDA for each of our segments less central costs (which include non-cash stock-based compensation).
CME will host a teleconference and video webcast to discuss its first quarter results on Wednesday, May 5, 2010 at 9:00 a.m. New York time (2:00 p.m. London time and 3:00 p.m. Prague time). The video webcast and teleconference will refer to presentation slides which will be available on CME's website at www.cetv-net.com prior to the call.
To access the teleconference, U.S. and international callers may dial +1 785-424-1051 ten minutes prior to the start time and reference passcode: 7CETVQ1. The conference call will be video webcasted live via www.cetv-net.com.
The video webcast will be archived on www.cetv-net.com for two weeks. Additionally, a digital audio replay in MP3 format will be available for two weeks following the call at www.cetv-net.com.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated. Forward-looking statements reflect our current views with respect to future events and because our business is subject to such risks and uncertainties, actual results, our strategic plan, our financial position, results of operations and cash flows could differ materially from those described in or contemplated by the forward-looking statements.
For a more detailed description of these uncertainties and other factors, please see the "Risk Factors" section in our Quarterly Report on Form 10-Q for the three months ended March 31, 2010, which was filed with the Securities and Exchange Commission on May 5, 2010. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise.
This press release should be read in conjunction with our Quarterly Report on Form 10-Q for the three months ended March 31, 2010, filed with the Securities and Exchange Commission on May 5, 2010.
We make available, free of charge, on our website at www.cetv-net.com our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.
CME is a vertically integrated media and entertainment company operating leading broadcasting, internet and TV content businesses in six Central and Eastern European countries with an aggregate population of approximately 50 million people. CME's television stations are located in Bulgaria (bTV, bTV Cinema, bTV Comedy, Pro.bg and Ring.bg), Croatia (Nova TV), Czech Republic (TV Nova, Nova Cinema, Nova Sport and MTV Czech), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro and MTV Romania), Slovakia (TV Markíza and Doma) and Slovenia (POP TV, Kanal A and TV Pika). CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol "CETV".
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(US$ 000's, except share and per share data)
(Unaudited)
| For the Three Months Ended March 31, | |||
| 2010 | 2009 | ||
| Net revenues | $ 143,641 | $ 136,320 | |
| Operating costs | 27,280 | 25,273 | |
| Cost of programming | 87,786 | 64,448 | |
| Depreciation of station property, plant and equipment | 14,114 | 11,112 | |
| Amortization of broadcast licenses and other intangibles | 5,149 | 5,687 | |
| Cost of revenues | 134,329 | 106,520 | |
| Selling, general and administrative expenses | 28,445 | 19,241 | |
| Impairment charge | - | 81,843 | |
| Operating loss | (19,133) | (71,284) | |
| Interest expense, net | (30,875) | (20,692) | |
| Foreign currency exchange gain, net | 9,557 | 37,054 | |
| Change in fair value of derivatives | (3,656) | 6,130 | |
| Other (expense) / income | (270) | 104 | |
| Loss from continuing operations before tax | (44,377) | (48,688) | |
| Income tax credit | 2,391 | 10,583 | |
| Loss from continuing operations | (41,986) | (38,105) | |
| Discontinued operations, net of tax | (3,922) | (8,835) | |
| Net loss | (45,908) | (46,940) | |
| Net loss attributable to noncontrolling interests | 3,614 | 2,502 | |
| Net loss attributable to CME Ltd. | $ (42,294) | $ (44,438) | |
| PER SHARE DATA: | |||
| Net loss per share | |||
| Continuing operations – Basic and Diluted | $ (0.61) | $ (0.84) | |
| Discontinued operations – Basic and Diluted | (0.06) | (0.21) | |
| Net loss attributable to CME Ltd common shareholders – Basic and Diluted | $ (0.67) | $ (1.05) | |
| Weighted average common shares used in computing per share amounts (000s): | |||
| Basic and Diluted | 63,537 | 42,337 | |
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
CONSOLIDATED BALANCE SHEETS
(US$ 000's)
(Unaudited)
| March 31, 2010 | December 31, 2009 | ||
| ASSETS | |||
| Cash and cash equivalents | $ 463,375 | $ 445,954 | |
| Restricted cash | 30,985 | 1,046 | |
| Assets held for sale | 93,458 | 86,349 | |
| Other current assets | 315,355 | 348,112 | |
| Total current assets | 903,173 | 881,461 | |
| Property, plant and equipment, net | 256,066 | 274,710 | |
| Goodwill and other intangible assets | 1,437,305 | 1,489,516 | |
| Other non-current assets | 233,979 | 227,100 | |
| Total assets | $ 2,830,523 | $ 2,872,787 | |
| LIABILITIES AND EQUITY | |||
| Accounts payable and accrued liabilities | $ 177,789 | $ 199,175 | |
| Credit facilities and obligations under capital leases | 56,482 | 117,910 | |
| Liabilities held for sale | 29,488 | 22,193 | |
| Other current liabilities | 50,614 | 12,840 | |
| Total current liabilities | 314,373 | 352,118 | |
| Credit facilities and obligations under capital leases | 131,596 | 6,030 | |
| Senior Debt | 1,203,718 | 1,253,928 | |
| Other non-current liabilities | 83,719 | 88,871 | |
| Total liabilities | 1,733,406 | 1,700,947 | |
| EQUITY | |||
| Common Stock | 5,083 | 5,083 | |
| Additional paid-in capital | 1,412,278 | 1,410,587 | |
| Accumulated deficit | (376,287) | (333,993) | |
| Accumulated other comprehensive income | 64,808 | 95,912 | |
| Total CME Ltd. shareholders’ equity | 1,105,882 | 1,177,589 | |
| Noncontrolling interests | (8,765) | (5,749) | |
| Total equity | 1,097,117 | 1,171,840 | |
| Total liabilities and equity | $ 2,830,523 | $ 2,872,787 | |
Segment Data
From January 1, 2010, we manage our business on a divisional basis with three operating segments - Broadcast, New Media and Media Pro Entertainment. We evaluate the performance of our segments based on net revenues and EBITDA, which is also used as a component in determining management bonuses.
EBITDA is determined as net income / (loss), which includes costs for program rights amortization costs, before interest, taxes, depreciation and amortization of intangible assets. Items that are not allocated to our segments for purposes of evaluating their performance and therefore are not included in divisional EBITDA, include foreign currency exchange gains and losses; changes in the fair value of derivatives; stock-based compensation and certain unusual or infrequent items (e.g., impairments of assets or investments).
Below are tables showing each of our Net Revenues and EBITDA by operation for the three months ended March 31, 2010 and 2009, together with a reconciliation of EBITDA to our Consolidated Statement of Operations:
| (US $000's) | For the Three Months Ended March 31, | ||
| 2010 | 2009 | ||
| Net Revenues | |||
| Broadcast: | |||
| Bulgaria | $ 940 | $ 595 | |
| Croatia | 11,725 | 10,080 | |
| Czech Republic | 54,300 | 55,456 | |
| Romania | 36,547 | 35,521 | |
| Slovak Republic | 18,090 | 20,462 | |
| Slovenia | 13,823 | 12,411 | |
| Total Broadcast | $ 135,425 | $ 134,525 | |
| New Media | $ 2,021 | $ 1,757 | |
| Media Pro Entertainment | $ 28,043 | $ 14,411 | |
| Eliminations | (21,848) | (14,373) | |
| Total | $ 143,641 | $ 136,320 | |
| (US $000's) | For the Three Months Ended March 31, | ||
| 2010 | 2009 | ||
| EBITDA | |||
| Broadcast: | |||
| Bulgaria | $ (9,070) | $ (6,415) | |
| Croatia | 881 | 132 | |
| Czech Republic | 22,184 | 25,287 | |
| Romania | 4,529 | 9,774 | |
| Slovak Republic | (3,305) | 5,899 | |
| Slovenia | 3,084 | 3,011 | |
| Divisional overheads | (486) | - | |
| Total Broadcast | $ 17,817 | $ 37,688 | |
| New Media | $ (3,384) | $ (1,564) | |
| Media Pro Entertainment | $ (2,033) | $(1,437) | |
| Central | (10,812) | (4,259) | |
| Eliminations | (747) | (2,682) | |
| Total | $ 841 | $ 27,746 | |
| Reconciliation to Consolidated Statement of Operations: | |||
| Loss from continuing operations | $ (41,986) | $ (38,105) | |
| Income tax credit | (2,391) | (10,583) | |
| Other expense / (income) | 270 | (104) | |
| Change in fair value of derivatives | 3,656 | (6,130) | |
| Foreign currency exchange gain, net | (9,557) | (37,054) | |
| Interest expense, net | 30,875 | 20,692 | |
| Operating loss | (19,133) | (71,284) | |
| Depreciation of property, plant and equipment | 14,825 | 11,500 | |
| Amortization of intangible assets | 5,149 | 5,687 | |
| Impairment | - | 81,843 | |
| $ 841 | $ 27,746 | ||
For additional information, please contact:
Romana Wyllie
Vice President of Corporate Communications
Central European Media Enterprises
Krizeneckeho nam. 1078/5
152 00 Praha 5
Czech Republic
+420 242 465 525
romana.wyllie@cme.net
