THIRD QUARTER
Net Revenues of $134.5 million
EBITDA loss of $14.4 million
NINE MONTHS
Net Revenues of $461.9 million
EBITDA of $30.8 million
HAMILTON, Bermuda, Oct. 27, 2009 (GLOBE NEWSWIRE) -- Central European Media Enterprises Ltd. ("CME" or the "Company") (Nasdaq:CETV) (Prague Stock Exchange:CETV) today announced financial results for the three months and nine months ended September 30, 2009.
Net revenues for the third quarter of 2009 were $134.5 million, a decrease of 33% compared to the third quarter of 2008. Operating income for the quarter decreased $40.6 million to a loss of $33.5 million. Net income from continuing operations decreased $5.7 million to a loss of $24.3 million, and fully diluted loss per share decreased by $0.10 to a loss of $0.35.
Net revenues for the nine months ended September 30, 2009 were $461.9 million, a decrease of 37% compared to the nine months ended September 30, 2008. Operating income for nine months ended September 30, 2009 decreased $257.6 million to a loss of $106.2 million. Net income from continuing operations decreased $111.5 million to a loss of $48.9 million, and fully diluted income per share decreased by $2.18 to a loss of $0.81.
Adrian Sarbu, President and Chief Executive Officer of CME, commented: "This is the fourth quarter of decline in our advertising markets. TV ad spending reset 30% lower than in 2008. We believe the markets have reached the bottom. This is a new starting point. The macroeconomic prospects for 2010 have improved and we expect advertising spending to follow. Our priority for 2010 is to convert our high audience and market share into higher revenues while managing costs rigorously. We believe in our ability to outperform the markets."
Results for the Three Months Ended September 30, 2009
Net revenues for the three months ended September 30, 2009 decreased by 33% to $134.5 million from $200.6 million for the three months ended September 30, 2008. Operating loss for the quarter was $33.5 million compared to an operating income of $7.2 million for the three months ended September 30, 2008. Net loss attributable to the shareholders of CME for the quarter was $21.6 million compared to $19.3 million for the three months ended September 30, 2008. Fully diluted loss per share for the three months ended September 30, 2009 decreased $0.10 to a loss of $0.35.
EBITDA(1) for the three months ended September 30, 2009 decreased to a loss of $14.4 million from positive EBITDA of $31.6 million in the three months ended September 30, 2008. EBITDA margin for the three months ended September 30, 2009 was -11% compared to +16% in the three months ended September 30, 2008.
(1) EBITDA is defined in 'Segment Data' below, and includes corporate
operating costs and stock-based compensation. We define EBITDA margin
as EBITDA expressed as a percentage of net revenues. Consolidated
EBITDA is equal to the EBITDA for each of our segments less corporate
costs (which include non-cash stock-based compensation).
Headline results for the three months ended September 30, 2009 and 2008 were:
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RESULTS (Unaudited)
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For the Three Months Ended September 30, 2009
(US $000's)
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2009 2008 $ change % change
----------------------------------------
Net revenues $134,482 $200,601 $(66,119) (33)%
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EBITDA $(14,354) $ 31,556 $(45,910) (145)%
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Operating (loss) / income $(33,450) $ 7,155 $(40,605) Nm(1)
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Net loss attributable to CME $(21,550) $(19,330) $ (2,220) (11)%
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Fully diluted loss per share $ (0.35) $ (0.45) $ (0.10) (22)%
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(1) Number is not meaningful
Results for the Nine Months Ended September 30, 2009
Net revenues for the nine months ended September 30, 2009 decreased by 37% to $461.9 million from $728.4 million for the nine months ended September 30, 2008. Operating loss for the period was $106.2 million compared to operating income of $151.4 million for the nine months ended September 30, 2008. Net loss attributable to the shareholders of CME for the period was $41.9 million compared to net income of $58.6 million for the nine months ended September 30, 2008. Fully diluted loss per share for the nine months ended September 30, 2009 was $0.81, a decrease of $2.18 compared to the nine months ended September 30, 2008.
EBITDA for the nine months ended September 30, 2009 decreased to $30.8 million from $217.1 million in the nine months ended September 30, 2008. EBITDA margin for the nine months ended September 30, 2009 was 7% compared to 30% in the nine months ended September 30, 2008.
Headline results for the nine months ended September 30, 2009 and 2008 were:
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RESULTS (Unaudited)
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For the Nine Months Ended September 30,
(US $000's)
-----------------------------------------------------------------------
2009 2008 $ change % change
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Net revenues $ 461,888 $ 728,433 $(266,545) (37)%
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EBITDA $ 30,777 $ 217,120 $(186,343) (86)%
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Operating (loss) / income $(106,229) $ 151,372 $(257,601) (170)%
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Net (loss) / income
attributable to CME $ (41,907) $ 58,581 $(100,488) (172)%
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Fully diluted (loss) /
income per share $ (0.81) $ 1.37 $ (2.18) (159)%
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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, Consolidated EBITDA and EBITDA margin for the three months ended September 30, 2009 and 2008 were:
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SEGMENT RESULTS (Unaudited)
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For the Three Months Ended September 30,
(US $000's)
----------------------------------------------------------------------
2009 2008 $ change % change
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Net revenues - broadcast
operations $ 132,148 $ 198,426 $ (66,278) (33)%
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Net revenues - non-broadcast
operations 2,334 2,175 159 7%
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Net revenues $ 134,482 $ 200,601 $ (66,119) (33)%
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EBITDA - broadcast
operations $ (3,342) $ 46,018 $ (49,360) (107)%
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EBITDA - non-broadcast
operations (3,903) (2,790) (1,113) (40)%
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EBITDA - Corporate (7,109) (11,672) 4,563 39%
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Consolidated EBITDA $ (14,354) $ 31,556 $ (45,910) (145)%
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EBITDA Margin (11)% 16%
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Our net revenues, Consolidated EBITDA and EBITDA margin for the nine months ended September 30, 2009 and 2008 were:
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SEGMENT RESULTS (Unaudited)
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For the Nine Months Ended September 30,
(US $000's)
----------------------------------------------------------------------
2009 2008 $ change % change
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Net revenues - broadcast
operations $ 455,347 $ 721,505 $(266,158) (37)%
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Net revenues - non-broadcast
operations 6,541 6,928 (387) (6)%
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Net revenues $ 461,888 $ 728,433 $(266,545) (37)%
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EBITDA - broadcast
operations $ 61,892 $ 258,251 $(196,359) (76)%
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EBITDA - non-broadcast
operations (6,939) (6,160) (779) (13)%
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EBITDA - Corporate (24,176) (34,971) 10,795 31%
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Consolidated EBITDA $ 30,777 $ 217,120 $(186,343) (86)%
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EBITDA Margin 7% 30%
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CME will host a teleconference to discuss its second quarter results on Tuesday, October 27, 2009 at 10:00 a.m. New York time (2:00 p.m. London time and 3:00 p.m. Prague time). The 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 +1 785-424-1052 ten minutes prior to the start time and reference conference ID 7CETVQ3. The conference call will be broadcast live via www.cetv-net.com.
The webcast will be archived on www.cetv-net.com for two weeks. A digital audio replay in mp3 format will also be archived on the Company's website at www.cetv-net.com for two weeks following the call.
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. Future events and actual results, affecting our strategic plan as well as our financial position, results of operations and cash flows, could differ materially from those described in or contemplated by the forward-looking statements. Important factors that contribute to such risks include, but are not limited to, the effect of the credit crisis and economic downturn in our markets as well as in the United States and Western Europe; decreases in television advertising spending and the rate of development of the advertising markets in the countries in which we operate; the timing and sustainability of any stabilization and economic recovery in the markets in which we operate; the timing and impact of any additional investments we make in our Bulgaria and Ukraine operations; our effectiveness in implementing our strategic plan for our Ukraine operations or our Bulgaria operations; our ability to make future investments in television broadcast operations; our ability to develop and implement strategies regarding sales and multi-channel distribution; changes in the political and regulatory environments where we operate and application of relevant laws and regulations; the timely renewal of broadcasting licenses and our ability to obtain additional frequencies and licenses; and our ability to acquire necessary programming and attract audiences. 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 as filed with the Securities and Exchange Commission on October 27, 2009. 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 September 30, 2009, filed with the Securities and Exchange Commission on October 27, 2009, and our Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission on February 25, 2009.
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 broadcasting company operating leading networks in seven Central and Eastern European countries with an aggregate population of approximately 97 million people. The company's television stations are located in Bulgaria (PRO.BG and RING.BG), Croatia (Nova TV), Czech Republic (TV Nova, Nova Cinema and Nova Sport), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro and MTV Romania), Slovakia (TV Markiza and Doma), Slovenia (POP TV, Kanal A and TV Pika) and Ukraine (Studio 1+1, Studio 1+1 International and Kino). CME is traded on the NASDAQ and the Prague Stock Exchange under the ticker symbol "CETV".
For additional information, please visit www.cetv-net.com.
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(US$ 000's, except share and per share data)
(Unaudited)
For the Three Months
Ended
September 30,
------------------
2009 2008
------------------
Net revenues $134,482 $200,601
Operating costs 35,828 38,459
Cost of programming 88,257 96,222
Depreciation of station property, plant
and equipment 13,844 13,980
Amortization of broadcast licenses and
other intangibles 5,117 10,199
-------- --------
Cost of revenues 143,046 158,860
Selling, general and administrative expenses
(including non-cash stock-based compensation of
$1.6 million and $1.7 million in the three
months ended September 30, 2009 and 2008,
respectively) 24,886 34,586
-------- --------
Operating (loss) / income $(33,450) $ 7,155
Interest expense, net (26,609) (20,001)
Foreign currency exchange gain, net 28,980 4,959
Change in fair value of derivatives (3,259) 9,868
Other income 45 288
-------- --------
(Loss) / income from continuing operations
before tax (34,293) 2,269
Credit / (provision) for Income taxes 9,999 (20,838)
-------- --------
Loss from continuing operations (24,294) (18,569)
Discontinued operations, net of tax -- (1,026)
-------- --------
Net loss (24,294) (19,595)
Net loss attributable to noncontrolling interests 2,744 265
-------- --------
Net loss attributable to CME $(21,550) $(19,330)
-------- --------
PER SHARE DATA:
Net loss per share
Continuing operations - Basic and diluted $ (0.35) $ (0.43)
Discontinued operations - Basic and diluted -- (0.02)
Net loss attributable to CME common shareholders
- Basic and diluted $ (0.35) $ (0.45)
Weighted average common shares used in computing
per share amounts (000s):
Basic and diluted 61,337 42,335
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(US$ 000's, except share and per share data)
(Unaudited)
For the Nine Months
Ended
September 30,
--------------------
2009 2008
--------------------
Net revenues $ 461,888 $ 728,433
Operating costs 96,774 108,232
Cost of programming 259,072 307,226
Depreciation of station property, plant
and equipment 38,301 39,036
Amortization of broadcast licenses and other
intangibles 16,051 26,063
--------- ---------
Cost of revenues 410,198 480,557
Selling, general and administrative expenses
(including non-cash stock based compensation of
$4.6 million and $5.5 million in the nine months
ended September 30, 2009 and 2008, respectively) 76,076 96,504
Impairment charge 81,843 --
--------- ---------
Operating (loss) / income $(106,229) $ 151,372
Interest expense, net (68,853) (51,621)
Foreign currency exchange gain / (loss), net 113,655 (5,587)
Change in fair value of derivatives (4,444) (13,671)
Other income 391 1,607
--------- ---------
(Loss) / income from continuing operations
before tax (65,480) 82,100
Credit / (provision) for income taxes 16,614 (19,478)
--------- ---------
(Loss) / income from continuing operations (48,866) 62,622
Discontinued operations, net of tax (262) (2,534)
--------- ---------
Net (loss) / income (49,128) 60,088
Net loss / (income) attributable to
noncontrolling interests 7,221 (1,507)
--------- ---------
Net (loss) / income attributable to CME $ (41,907) $ 58,581
--------- ---------
PER SHARE DATA:
Net income / (loss) per share
Continuing operations - Basic $ (0.80) $ 1.44
Continuing operations - Diluted (0.80) 1.43
Discontinued operations - Basic (0.01) (0.06)
Discontinued operations - Diluted (0.01) (0.06)
Net (loss) / income attributable to CME common
shareholders - Basic (0.81) 1.38
Net (loss) / income attributable to CME common
shareholders - Diluted $ (0.81) $ 1.37
Weighted average common shares used in computing
per share amounts (000s):
Basic 51,802 42,324
Diluted 51,802 42,773
Segment Data
We manage our business on a geographic basis, and review the performance of each segment using data that reflects 100% of operating and license company results. Our segments are comprised of Bulgaria, Croatia, the Czech Republic, Romania, the Slovak Republic, Slovenia and Ukraine. 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 EBITDA, include foreign currency exchange gains and losses; changes in the fair value of derivatives; and certain unusual or infrequent items (e.g., impairments of assets or investments).
Below are tables showing each of our net revenues, EBITDA, depreciation, amortization and impairment and operating income / (loss) by operation for the three months and the nine months ended September 30, 2009 and 2008:
(US $000'S) For the Three Months For the Nine Months
Ended September 30 Ended September 30
-------------------- -------------------
2009 2008 2009 2008
-----------------------------------------
Net revenues (1)
Bulgaria (2) $ 920 $ 462 $ 2,397 $ 462
Croatia 6,871 8,525 31,200 38,153
Czech Republic 53,778 72,602 181,456 270,730
Romania 36,088 59,281 120,622 197,119
Slovak Republic 19,306 24,795 68,106 88,126
Slovenia 11,272 14,231 43,741 58,392
Ukraine 6,247 20,705 14,366 75,451
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Total Operating Segments $ 134,482 $ 200,601 $ 461,888 $728,433
Corporate -- -- -- --
-------------------- -------------------
Total $ 134,482 $ 200,601 $ 461,888 $728,433
-------------------- -------------------
EBITDA
Bulgaria (2) $ (12,346) $ (3,101) $ (29,702) $ (3,101)
Croatia (3,622) (5,401) (1,362) (6,448)
Czech Republic 17,767 31,405 81,201 146,454
Romania 6,638 20,116 29,196 81,785
Slovak Republic (2,669) 5,847 6,714 28,958
Slovenia (1,191) 2,153 9,094 17,359
Ukraine (11,822) (7,791) (40,188) (12,916)
-------------------- -------------------
Total Operating Segments $ (7,245) $ 43,228 $ 54,953 $252,091
Corporate (7,109) (11,672) (24,176) (34,971)
-------------------- -------------------
Total $ (14,354) $ 31,556 $ 30,777 $217,120
-------------------- -------------------
(1) All net revenues are derived from external customers.
There are no inter-segmental revenues.
(2) We acquired our Bulgaria operations on August 1, 2008.
For the Three Months For the Nine Months
Ended Ended
September 30 September 30
------------------------------------------
2009 2008 2009 2008
------------------------------------------
Depreciation, Amortization
and Impairment
Bulgaria (1) $ 728 $ 1,356 $ 85,276 $ 1,356
Croatia 1,481 1,667 3,915 4,773
Czech Republic 7,412 11,172 20,204 31,734
Romania 3,643 4,214 10,485 11,581
Slovak Republic 3,196 2,941 9,001 8,396
Slovenia 1,604 1,437 4,532 4,232
Ukraine 897 1,392 2,782 3,027
-------------------- --------------------
Total Operating Segments $ 18,961 $ 24,179 $ 136,195 $ 65,099
Corporate 135 222 811 649
-------------------- --------------------
Total $ 19,096 $ 24,401 $ 137,006 $ 65,748
-------------------- --------------------
Operating income / (loss)
Bulgaria (1) $ (13,074) (4,457) $(114,978) $ (4,457)
Croatia (5,103) (7,068) (5,277) (11,221)
Czech Republic 10,355 20,233 60,997 114,720
Romania 2,995 15,902 18,711 70,204
Slovak Republic (5,865) 2,906 (2,287) 20,562
Slovenia (2,795) 716 4,562 13,127
Ukraine (12,719) (9,183) (42,970) (15,943)
-------------------- --------------------
Total Operating Segments $ (26,206) 19,049 $ (81,242) $ 186,992
Corporate (7,244) (11,894) (24,987) (35,620)
-------------------- --------------------
Total $ (33,450) 7,155 $(106,229) $ 151,372
-------------------- --------------------
(1) We acquired our Bulgaria operations on August 1, 2008.