Third Quarter
- Net Revenues of US$ 165.5 Million Up 23%
- OIBDA1 Improved by US$ 13.4 Million to US$ 8.9 Million
Nine Months
- Net Revenues of US$ $587.9 Million Up 23%
- OIBDA of US$ 85.8 Million Up 102%
HAMILTON, Bermuda, Oct. 26, 2011 (GLOBE NEWSWIRE) -- Central European Media Enterprises Ltd. ("CME" or the "Company") (Nasdaq:CETV) (Prague Stock Exchange:CETV) today announced financial results for the three and nine months ended September 30, 2011.
Net revenues for the third quarter of 2011 increased US$ 31.1 million to US$ 165.5 million compared to the third quarter of 2010. OIBDA for the quarter improved by US$ 13.4 million to US$ 8.9 million. Operating loss for the quarter improved by US$ 12.4 million to US$ (12.9) million. Net loss from continuing operations for the quarter was US$ (82.2) million compared to a profit of US$ 3.4 million for the third quarter of 2010.
Net revenues for the nine months ended September 30, 2011 increased US$ 108.2 million to US$ 587.9 million compared to the nine months of 2010. OIBDA for the nine months increased by US$ 43.3 million to US$ 85.8 million. Operating income for the nine months improved by US$ 37.9 million to US$ 18.9 million. Net loss from continuing operations for the nine months was US$ (102.4) million compared to US$ (91.5) million for the nine months of 2010. Free cash flow2 for the nine months ended September 30, 2011 improved to US$ $(4.0) million from US$ (73.8) million for the nine months of 2010.
Adrian Sarbu, CME's President and CEO commented: "In the first nine months of 2011 we doubled our OIBDA from US$ 43 million to US$ 86 million when our TV ad markets showed mixed recovery. We now expect to generate revenues of approximately US$ 850 million and OIBDA of US$ 166 million for the full year. Audience leadership and cash flow generation remain our main priorities."
1 OIBDA is operating income before depreciation and amortization as defined in 'Segment Data' below. Consolidated OIBDA, which is set out here, is equal to the OIBDA for each of our segments less central costs (which include non-cash stock-based compensation).
2 Free cash flow is defined as cash flows from continuing operating activities less expenditure on property, plant and equipment, net of disposals of property, plant and equipment.
Consolidated Results for the Three Months Ended September 30, 2011
Net revenues for the three months ended September 30, 2011 increased by 23.2% to US$ 165.5 million from US$ 134.4 million for the three months ended September 30, 2010. Operating loss for the quarter was US$ (12.9) million compared to US$ (25.3) million for the three months ended September 30, 2010. Net loss from continuing operations for the quarter was US$ (82.2) million compared to a profit from continuing operations of US$ 3.4 million for the three months ended September 30, 2010. Fully diluted loss from continuing operations per share for the three months ended September 30, 2011 was US$ (1.27) compared to a profit of US$ 0.05 in 2010.
OIBDA for the three months ended September 30, 2011 increased to US$ 8.9 million from US$ (4.5) million in the three months ended September 30, 2010. OIBDA margin3 for the three months ended September 30, 2011 was 5.4% compared to (3.3)% in the three months ended September 30, 2010.
Headline consolidated results for the three months ended September 30, 2011 and 2010 were:
| RESULTS | ||||
| For the Three Months Ended September 30, | ||||
| (US $000's) | ||||
| 2011 | 2010 | $ change | % change | |
| Net revenues | $ 165,472 | $ 134,354 | $ 31,118 | 23.2% |
| OIBDA | 8,898 | (4,487) | 13,385 | n.m.1 |
| Operating loss | (12,910) | (25,345) | 12,435 | 49.1% |
| Net (loss) / income from continuing operations | (82,196) | 3,417 | (85,613) | n.m.1 |
| Fully diluted (loss) / income from continuing operations per share | $ (1.27) | $ 0.05 | $ (1.32) | n.m.1 |
| 1 Number is not meaningful. | ||||
Consolidated Results for the Nine Months Ended September 30, 2011
Net revenues for the nine months ended September 30, 2011 increased by 22.6% to US$ 587.9 million from US$ 479.7 million for the nine months ended September 30, 2010. Operating income improved by US$ 37.9 million for the nine months to US$ 18.9 million compared to US$ (19.0) million for the nine months ended September 30, 2010. Net loss from continuing operations for the nine months ended September 30, 2011 was US$ (102.4) million compared to a net loss of US$ (91.5) million for the nine months ended September 30, 2010. Fully diluted loss from continuing operations per share for the nine months ended September 30, 2011 was US$ (1.59) compared to US$ (1.37) for the nine months ended September 30, 2010.
OIBDA for the nine months ended September 30, 2011 increased to US$ 85.8 million from US$ 42.5 million in the nine months ended September 30, 2010. OIBDA margin for the months ended September 30, 2011 was 14.6% compared to 8.9% in the nine months ended September 30, 2010.
3 OIBDA margin is defined as the ratio of OIBDA to Net revenues.
Headline consolidated results for the nine months ended September 30, 2011 and 2010 were:
| RESULTS | ||||
| For the Nine Months Ended September 30, | ||||
| (US $000's) | ||||
| 2011 | 2010 | $ change | % change | |
| Net revenues | $ 587,900 | $ 479,721 | $ 108,179 | 22.6% |
| OIBDA | 85,838 | 42,547 | 43,291 | 101.7 |
| Operating income / (loss) | 18,898 | (19,026) | 37,924 | n.m.1 |
| Net loss from continuing operations | (102,379) | (91,482) | (10,897) | (11.9)% |
| Fully diluted loss from continuing operations per share | $ (1.59) | $ (1.37) | $ (0.22) | (16.8)% |
| 1 Number is not meaningful. | ||||
Segment Results
We evaluate the performance of our operations based on Net revenues and OIBDA.
Our Net revenues and Consolidated OIBDA for the three months ended September 30, 2011 and 2010 were:
| SEGMENT RESULTS | ||||
| For the Three Months Ended September 30, | ||||
| (US $000's) | ||||
| 2011 | 2010 | $ change | % change | |
| Broadcast | $ 143,431 | $ 123,549 | $ 19,882 | 16.1% |
| Media Pro Entertainment | 35,141 | 26,510 | 8,631 | 32.6% |
| New Media | 3,246 | 2,111 | 1,135 | 53.8% |
| Intersegment revenues | (16,346) | (17,816) | 1,470 | 8.3% |
| Net revenues | $ 165,472 | $ 134,354 | $ 31,118 | 23.2% |
| Broadcast | $ 20,135 | $ 8,225 | $ 11,910 | 144.8% |
| Media Pro Entertainment | 218 | (2,185) | 2,403 | n.m.1 |
| New Media | (1,033) | (1,562) | 529 | 33.9% |
| Central | (9,726) | (8,256) | (1,470) | (17.8)% |
| Elimination | (696) | (709) | 13 | 1.8% |
| Consolidated OIBDA | $ 8,898 | $ (4,487) | $ 13,385 | n.m.1 |
| 1 Number is not meaningful. | ||||
Our Net revenues and Consolidated OIBDA for the nine months ended September 30, 2011 and 2010 were:
| SEGMENT RESULTS | ||||
| For the Nine Months Ended September 30, | ||||
| (US $000's) | ||||
| 2011 | 2010 | $ change | % change | |
| Broadcast | $ 529,916 | $ 449,555 | $ 80,361 | 17.9% |
| Media Pro Entertainment | 126,575 | 92,868 | 33,707 | 36.3% |
| New Media | 10,479 | 7,061 | 3,418 | 48.4% |
| Intersegment revenues | (79,070) | (69,763) | (9,307) | (13.3)% |
| Net revenues | $ 587,900 | $ 479,721 | $ 108,179 | 22.6% |
| Broadcast | $ 122,402 | $ 86,913 | $ 35,489 | 40.8% |
| Media Pro Entertainment | 1,703 | (4,063) | 5,766 | n.m.1 |
| New Media | (3,122) | (6,369) | 3,247 | 51% |
| Central | (31,969) | (31,123) | (846) | (2.7)% |
| Elimination | (3,176) | (2,811) | (365) | (13.0)% |
| Consolidated OIBDA | $ 85,838 | $ 42,547 | $ 43,291 | 101.7% |
| 1 Number is not meaningful. | ||||
CME will host a teleconference and video webcast to discuss its third quarter results on Wednesday, October 26, 2011 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.cme.net prior to the call.
To access the teleconference, U.S. and international callers may dial +1 785-424-1059 ten minutes prior to the start time and reference passcode CETVQ3. The conference call will be video webcasted live via www.cme.net.
The video webcast and a digital audio replay in MP3 format will be available for two weeks following the call at www.cme.net.
In the coming weeks, CME will post the results for the quarter ended September 30, 2011 for its wholly-owned subsidiary CET 21 spol. s r.o. at www.cme.net.
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 CME's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, which was filed with the Securities and Exchange Commission on October 26, 2011. 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 quarterly period ended September 30, 2011, which was filed with the Securities and Exchange Commission on October 26, 2011.
We make available free of charge on our website at www.cme.net 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 a leading broadcast, content and new media business in Central and Eastern Europe. CME's television stations are located in Bulgaria (bTV, bTV Cinema, bTV Comedy, bTV Action and Ring.bg), Croatia (Nova TV, Doma and Nova World), the Czech Republic (TV Nova, Nova Cinema, Nova Sport and MTV Czech), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro, MTV Romania and PRO TV Chisinau,), the Slovak Republic (TV Markíza and Doma) and Slovenia (POP TV, Kanal A and the POP NON STOP subscription bouquet). CME's broadcast operations are supported by its content and distribution division, Media Pro Entertainment, as well as its New Media division, which operates Voyo, the pan-regional video-on-demand service.
CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol "CETV".
For additional information, please visit www.cme.net or contact:
| CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (US$ 000's, except share and per share data) | ||
| For the Three Months Ended | ||
| September 30, | ||
| 2011 | 2010 | |
| Net revenues | $ 165,472 | $ 134,354 |
| Operating expenses: | ||
| Operating costs | 34,545 | 29,050 |
| Cost of programming | 94,983 | 81,658 |
| Depreciation of property, plant and equipment | 13,075 | 13,341 |
| Amortization of broadcast licenses and other intangibles | 7,957 | 6,996 |
| Cost of revenues | 150,560 | 131,045 |
| Selling, general and administrative expenses | 27,822 | 28,654 |
| Operating loss | (12,910) | (25,345) |
| Interest expense, net | (34,523) | (31,046) |
| Foreign currency exchange (loss) / gain, net | (45,919) | 62,009 |
| Change in fair value of derivatives | 3,479 | (1,229) |
| Other income | 33 | 1 |
| (Loss) / income from continuing operations before tax | (89,840) | 4,390 |
| Credit / (provision) for income taxes | 7,644 | (973) |
| (Loss) / income from continuing operations | (82,196) | 3,417 |
| Net (loss) / income | (82,196) | 3,417 |
| Net loss / (income) attributable to noncontrolling interests | 122 | (1) |
| Net (loss) / income attributable to CME Ltd. | $ (82,074) | $ 3,416 |
| PER SHARE DATA: | ||
| Net (loss) / income per share | ||
| Continuing operations attributable to CME Ltd. - Basic and diluted | $ (1.27) | $ 0.05 |
| Net (loss) / income attributable to CME Ltd - Basic and diluted | $ (1.27) | $ 0.05 |
| Weighted average common shares used in computing per share amounts (000's): | ||
| Basic | 64,393 | 64,337 |
| Diluted | 64,393 | 64,497 |
| CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (continued) | ||
| (US$ 000's, except share and per share data) | ||
| For the Nine Months Ended | ||
| September 30, | ||
| 2011 | 2010 | |
| Net revenues | $ 587,900 | $ 479,721 |
| Operating expenses: | ||
| Operating costs | 102,736 | 83,826 |
| Cost of programming | 313,744 | 268,610 |
| Depreciation of property, plant and equipment | 40,985 | 40,530 |
| Amortization of broadcast licenses and other intangibles | 23,393 | 18,690 |
| Cost of revenues | 480,858 | 411,656 |
| Selling, general and administrative expenses | 88,144 | 87,091 |
| Operating income / (loss) | 18,898 | (19,026) |
| Interest expense, net | (126,554) | (92,566) |
| Foreign currency exchange gain, net | 1,452 | 23,842 |
| Change in fair value of derivatives | 4,600 | (2,261) |
| Other expense | (769) | (200) |
| Loss from continuing operations before tax | (102,373) | (90,211) |
| Provision / (credit) for income taxes | (6) | (1,271) |
| Loss from continuing operations | (102,379) | (91,482) |
| Discontinued operations, net of tax | — | (3,922) |
| Gain on disposal of discontinued operations | — | 217,619 |
| Income from discontinued operations | — | 213,697 |
| Net (loss) / income | $ (102,379) | $ 122,215 |
| Net loss attributable to noncontrolling interests | 159 | 4,076 |
| Net (loss) / income attributable to CME Ltd. | (102,220) | 126,291 |
| PER SHARE DATA: | ||
| Net (loss) / income per share | ||
| Continuing operations attributable to CME Ltd. - Basic and diluted | $ (1.59) | $ (1.37) |
| Discontinued operations attributable to CME Ltd. - Basic and diluted | 0.00 | 3.34 |
| Net (loss) / income attributable to CME Ltd - Basic and diluted | $ (1.59) | $ 1.97 |
| Weighted average common shares used in computing per share amounts (000's): | ||
| Basic | 64,382 | 63,918 |
| Diluted | 64,382 | 63,918 |
| CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (US$ 000's) | ||
| September 30, | December 31, | |
| 2011 | 2010 | |
| ASSETS | ||
| Cash and cash equivalents | $ 167,417 | $ 244,050 |
| Other current assets | 332,568 | 368,035 |
| Total current assets | 499,985 | 612,085 |
| Property, plant and equipment, net | 231,264 | 250,902 |
| Goodwill and other intangible assets, net | 1,830,336 | 1,816,943 |
| Other non-current assets | 312,913 | 260,620 |
| Total assets | $ 2,874,498 | $ 2,940,550 |
| LIABILITIES AND EQUITY | ||
| Accounts payable and accrued liabilities | $ 219,470 | $ 224,058 |
| Current portion of long-term debt and other financing arrangements | 4,070 | 13,562 |
| Other current liabilities | 39,996 | 5,456 |
| Total current liabilities | 263,536 | 243,076 |
| Long-term portion of long-term debt and other financing arrangements | 1,338,441 | 1,346,222 |
| Other non-current liabilities | 96,705 | 103,500 |
| Total liabilities | $ 1,698,682 | $ 1,692,798 |
| EQUITY | ||
| Common Stock | $ 5,151 | 5,149 |
| Additional paid-in capital | 1,403,307 | 1,377,803 |
| Accumulated deficit | (353,311) | (233,818) |
| Accumulated other comprehensive income | 99,697 | 77,745 |
| Total CME Ltd. shareholders' equity | 1,154,844 | 1,226,879 |
| Noncontrolling interests | 20,972 | 20,873 |
| Total equity | $ 1,175,816 | $ 1,247,752 |
| Total liabilities and equity | $ 2,874,498 | $ 2,940,550 |
| CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (US$ 000's, except share and per share data) | ||
| For the Nine Months Ended | ||
| September 30, | ||
| 2011 | 2010 | |
| Net cash generated from / (used in) continuing operating activities | $ 17,246 | $ (41,439) |
| Net cash used in continuing investing activities | (30,078) | (443,748) |
| Net cash (used in) / generated from financing activities | (64,667) | 43,040 |
| Net cash used in discontinued operations - operating activities | — | (5,921) |
| Net cash generated from discontinued operations - investing activities | — | 307,790 |
| Impact of exchange rate fluctuations on cash and cash equivalents | 866 | (2,771) |
| Net decrease in cash and cash equivalents | $ (76,633) | $ (143,049) |
| Net cash generated from / (used in) continuing operating activities | 17,246 | (41,439) |
| Capital expenditure, net of proceeds from disposals | (21,231) | (32,365) |
| Free cash flow | $ (3,985) | $ (73,804) |
| Supplemental disclosure of cash flow information: | ||
| Cash paid for interest | $ 90,404 | $ 93,675 |
| Cash paid for income taxes (net of refunds) | $ 4,015 | $8,108 |
Segment Data
We manage our business on a divisional basis, with three operating segments which are also our reportable segments: Broadcast, Media Pro Entertainment (our content division) and New Media.
We evaluate the performance of our segments based on Net revenues and OIBDA. OIBDA, which includes program rights amortization costs, is determined as operating income / (loss) before 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 their OIBDA, include stock-based compensation and certain unusual or infrequent items (e.g. impairments of assets or investments). We believe OIBDA is useful to investors because it provides a more meaningful representation of our performance, as it excludes certain items that do not impact either our cash flows or the operating results of our operations. OIBDA is also used as a component in determining management bonuses. Intersegment revenues and profits have been eliminated in consolidation. OIBDA may not be comparable to similar measures reported by other companies.
Below are tables showing our Net revenues and OIBDA by segment for the three and nine months ended September 30, 2011 and 2010, together with a reconciliation of OIBDA to our Condensed Consolidated Statement of Operations:
| For the Three Months | For the Nine Months | |||
| (US $000'S) | Ended September 30, | Ended September 30, | ||
| 2011 | 2010 | 2011 | 2010 | |
| Net revenues | ||||
| Broadcast: | ||||
| Bulgaria | $ 17,360 | $ 13,706 | $ 63,359 | $ 32,440 |
| Croatia | 9,959 | 8,181 | 42,449 | 34,691 |
| Czech Republic | 55,279 | 47,268 | 195,653 | 173,140 |
| Romania | 31,056 | 29,065 | 112,425 | 109,175 |
| Slovak Republic | 18,204 | 16,049 | 67,139 | 58,859 |
| Slovenia | 11,573 | 9,280 | 48,891 | 41,250 |
| Total Broadcast | $ 143,431 | $ 123,549 | $ 529,916 | $ 449,555 |
| Media Pro Entertainment | $ 35,141 | $ 26,510 | $ 126,575 | $ 92,868 |
| New Media | $ 3,246 | $ 2,111 | $ 10,479 | $ 7,061 |
| Intersegment revenues1 | (16,346) | (17,816) | (79,070) | (69,763) |
| Total net revenues | $ 165,472 | $ 134,354 | $ 587,900 | $ 479,721 |
| 1 Reflects revenues earned by the Media Pro Entertainment segment through sales to the Broadcast segment. All other revenues are third party revenues. | ||||
| For the Three Months | For the Nine Months | |||
| (US $000'S) | Ended September 30, | Ended September 30, | ||
| 2011 | 2010 | 2011 | 2010 | |
| OIBDA | ||||
| Broadcast: | ||||
| Bulgaria | $ (715) | $ (3,312) | $ 5,215 | $ (11,120) |
| Croatia | (1,960) | (1,508) | 861 | 1,420 |
| Czech Republic | 21,077 | 13,755 | 87,591 | 74,447 |
| Romania | 4,625 | 4,319 | 17,371 | 19,589 |
| Slovak Republic | (1,547) | (3,842) | 1,684 | (4,955) |
| Slovenia | (372) | (657 | 11,397 | 8,849 |
| Divisional operating costs | (973) | (530) | (1,717) | (1,317) |
| Total Broadcast | $ 20,135 | $ 8,225 | $ 122,402 | $ 86,913 |
| Media Pro Entertainment | $ 218 | $ (2,185) | $ 1,703 | $ (4,063) |
| New Media | $ (1,033) | $ (1,562) | $ (3,122) | $ (6,369) |
| Central | (9,726) | (8,256) | (31,969) | (31,123) |
| Elimination | (696) | (709) | (3,176) | (2,811) |
| Total OIBDA | $ 8,898 | $ (4,487) | $ 85,838 | $ 42,547 |
| (US $000's) | For the Three Months | For the Nine Months | ||
| Reconciliation to Condensed Consolidated Statement of | Ended September 30, | Ended September 30, | ||
| Operations: | 2011 | 2010 | 2011 | 2010 |
| Total OIBDA | $ 8,898 | $ (4,487) | $ 85,838 | $ 42,547 |
| Depreciation of property, plant and equipment | 13,851 | 13,862 | 43,547 | 42,883 |
| Amortization of intangible assets | 7,957 | 6,996 | 23,393 | 18,690 |
| Operating (loss) / income | $ (12,910) | $ (25,345) | $ 18,898 | $ (19,026) |
| Interest expense, net | (34,523) | (31,046) | (126,554) | (92,566) |
| Foreign currency exchange (loss) / gain, net | (45,919) | 62,009 | 1,452 | 23,842 |
| Change in fair value of derivatives | 3,479 | (1,229) | 4,600 | (2,261) |
| Other income / (expense) | 33 | 1 | (769) | (200) |
| Credit / (provision) for income taxes | 7,644 | (973) | (6) | (1,271) |
| (Loss) / income from continuing operations | $ (82,196) | $ 3,417 | $ (102,379) | $ (91,482) |