SECOND QUARTER- Net
revenues increased 3% at constant rates to US$ 175.2 million
-- Operating income increased 18% at constant
rates to US$ 43.9 million -- OIBDA increased 12%
at constant rates to US$ 53.6 million -
Central European Media Enterprises Ltd. (“CME” or the “Company”)
(NASDAQ:CETV) (Prague Stock Exchange:CETV) today announced
financial results for the three and six months ended
June 30, 2016.
Operational and financial highlights:
- TV advertising revenues increased nearly 4% at constant rates
in the first half of 2016, which included significant growth in
Romania and the Slovak Republic, as well as a return to growth in
Bulgaria during the second quarter.
- Carriage fees and subscription revenues increased 6% at
constant rates in the first half of 2016 due to growth in the
number of subscribers, better channel offerings, and new channel
launches.
- Overall costs charged in arriving at OIBDA decreased slightly
at constant rates in the three and six months ended
June 30, 2016 as a 3% increase in content costs was more
than offset by savings in other costs.
- OIBDA margin increased to 31% and 23% in the three and six
months ended June 30, 2016 from 28% and 20% in the same
periods in 2015.
- Operating income for the six months ended
June 30, 2016 more than doubled at constant rates due to
the improvement in OIBDA as well as the impact from the non-cash
charge taken in the first quarter of 2015 related to tax audits
then underway in Romania, which was subsequently reversed in the
third quarter of 2015.
- Unlevered free cash flow for the six months ended
June 30, 2016 increased significantly, reflecting the
improvement in OIBDA and lower capital expenditures, but cash flows
from operations declined because we paid more interest in cash and
elected to repay US$ 20.0 million of guarantee fees previously paid
in kind.
- Interest expense in the second quarter decreased US$ 19.6
million from the first quarter of 2016 following the refinancing
transaction completed in April, which resulted in a non-cash US$
150.2 million debt extinguishment charge related primarily to the
cost of warrants issued in 2014 that otherwise would have been
amortized through 2017.
Michael Del Nin, Co-Chief Executive Officer,
commented: "Our performance in the second quarter, marked by strong
OIBDA growth and margin expansion, exceeded our expectations and
contributed to a very solid first half of the year for us. Looking
ahead to the rest of 2016, we remain very upbeat about our
prospects for further growth and expect continued progress on our
deleveraging plans."
Christoph Mainusch, Co-Chief Executive Officer,
added: "Our audience share leadership in all six countries
continued during the second quarter. And we sustained increased
investment in the local content that is popular with our audiences,
while reducing costs overall in order to maximize
profitability."
In this release we refer to several non-GAAP
financial measures, including OIBDA, OIBDA margin, free cash flow
and unlevered free cash flow. Please see “Non-GAAP Financial
Measures” below for additional information, including definitions
and reconciliations to US GAAP financial measures.
Consolidated Results for the Three Months Ended
June 30, 2016 Net revenues for the three months
ended June 30, 2016 were US$ 175.2 million compared to
US$ 166.8 million for the three months ended
June 30, 2015. Operating income for the three months
ended June 30, 2016 was US$ 43.9 million compared to US$
36.4 million for the three months ended
June 30, 2015. Loss from continuing operations for
the three months ended June 30, 2016 was US$ (141.2)
million compared to US$ (11.7) million in 2015. Fully diluted
loss from continuing operations per share for the three months
ended June 30, 2016 was US$ (0.98) compared to US$ (0.11)
for the three months ended June 30, 2015.
OIBDA for the three months ended
June 30, 2016 was US$ 53.6 million compared to US$ 46.8
million in the same period ended June 30, 2015. OIBDA
margin for the three months ended June 30, 2016 was 30.6%
compared to 28.1% for the three months ended
June 30, 2015.
Headline consolidated results for the three
months ended June 30, 2016 and June 30, 2015
were:
|
|
(US$ 000's,
except per share data) |
For the Three Months Ended June
30, |
(unaudited) |
2016 |
|
2015 |
|
% Actual |
|
% Lfl (1) |
Net revenues |
$ |
175,206 |
|
|
$ |
166,834 |
|
|
5.0 |
% |
|
2.8 |
% |
Operating income |
43,891 |
|
|
36,441 |
|
|
20.4 |
% |
|
17.9 |
% |
Operating margin |
25.1 |
% |
|
21.8 |
% |
|
3.3 p.p. |
|
3.3 p.p. |
OIBDA |
53,632 |
|
|
46,811 |
|
|
14.6 |
% |
|
12.1 |
% |
OIBDA margin |
30.6 |
% |
|
28.1 |
% |
|
2.5 p.p. |
|
2.5 p.p. |
Loss on extinguishment
of debt |
(150,158 |
) |
|
— |
|
|
NM (2) |
|
NM (2) |
Loss from continuing
operations |
(141,249 |
) |
|
(11,669 |
) |
|
NM (2) |
|
NM (2) |
Fully diluted loss from
continuing operations per share |
$ |
(0.98 |
) |
|
$ |
(0.11 |
) |
|
NM (2) |
|
NM (2) |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Results for the Six Months Ended
June 30, 2016 Net revenues for the six months
ended June 30, 2016 were US$ 304.2 million compared to
US$ 293.0 million for the six months ended
June 30, 2015. Operating income for the six months
ended June 30, 2016 was US$ 51.7 million compared to US$
19.2 million for the six months ended
June 30, 2015. Loss from continuing operations for
the six months ended June 30, 2016 was US$ (181.9)
million compared to US$ (81.9) million in 2015. Fully diluted
loss from continuing operations per share for the six months ended
June 30, 2016 was US$ (1.29) compared to US$ (0.61) for
the six months ended June 30, 2015.
OIBDA for the six months ended
June 30, 2016 was US$ 70.7 million compared to US$ 58.3
million in the same period ended June 30, 2015. OIBDA
margin for the six months ended June 30, 2016 was 23.3%
compared to 19.9% for the six months ended
June 30, 2015.
Headline consolidated results for the six months
ended June 30, 2016 and June 30, 2015 were:
|
|
(US$ 000's,
except per share data) |
For the Six Months Ended June
30, |
(unaudited) |
2016 |
|
2015 |
|
% Actual |
|
% Lfl (1) |
Net revenues |
$ |
304,206 |
|
|
$ |
292,967 |
|
|
3.8 |
% |
|
3.4 |
% |
Operating income |
51,654 |
|
|
19,202 |
|
|
169.0 |
% |
|
150.8 |
% |
Operating margin |
17.0 |
% |
|
6.6 |
% |
|
10.4 p.p. |
|
10.0 p.p. |
OIBDA |
70,740 |
|
|
58,259 |
|
|
21.4 |
% |
|
18.4 |
% |
OIBDA margin |
23.3 |
% |
|
19.9 |
% |
|
3.4 p.p. |
|
2.9 p.p. |
Loss on extinguishment
of debt |
(150,158 |
) |
|
— |
|
|
NM (2) |
|
NM (2) |
Loss from continuing
operations |
(181,943 |
) |
|
(81,912 |
) |
|
NM (2) |
|
NM (2) |
Fully diluted loss from
continuing operations per share |
$ |
(1.29 |
) |
|
$ |
(0.61 |
) |
|
NM (2) |
|
NM (2) |
|
(1 |
) |
% Lfl (like-for-like) variance reflects the
impact of applying the current period average exchange rates to the
prior period revenues and costs. |
|
(2 |
) |
Number is not meaningful. |
|
|
Teleconference and Audio Webcast
Details
CME will host a teleconference and audio webcast
to discuss its second quarter results on Tuesday, July 26, 2016 at
9 a.m. New York time (2 p.m. London and 3 p.m. Prague time).
The audio 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 +1-785-424-1051 ten minutes prior to
the start time and reference passcode CETVQ216. The conference call
will be audio webcasted via www.cme.net. It can be heard on iPads,
iPhones and a range of devices supporting Android and Windows
operating systems.
A digital audio replay will be available for two
weeks following the call 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.
Important factors that contribute to such risks
include, but are not limited to, those factors set forth under
"Risk Factors” in our Quarterly Report on Form 10-Q for the period
ended June 30, 2016 as well as the following: levels of
television advertising spending and the rate of development of the
advertising markets in the countries in which we operate; the
effect of global economic uncertainty, including the United
Kingdom's exit from the European Union and Eurozone instability in
our markets and the extent, timing and duration of any recovery;
the extent to which our liquidity constraints and debt service
obligations restrict our business; our success in continuing our
initiatives to diversify and enhance our revenue streams; our
ability to make cost-effective investments in our television
businesses, including investments in programming; our ability to
develop and acquire necessary programming and attract audiences;
our ability to refinance our existing indebtedness; changes in the
political and regulatory environments where we operate and in the
application of relevant laws and regulations; our exposure to
additional tax liabilities; and the timely renewal of broadcasting
licenses and our ability to obtain additional frequencies and
licenses.
The foregoing review of important factors should
not be construed as exhaustive. For a more detailed description of
these uncertainties and other factors, please see the "Risk
Factors" and “Forward-looking Statements” sections in CME's
Quarterly Report on Form 10-Q for the period ended
June 30, 2016. 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 period ended
June 30, 2016, which was filed with the Securities and
Exchange Commission on July 26, 2016.
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. Please note that we may
announce material information using SEC filings, press releases,
public conference calls, webcasts and posts to the Investors
section of our website, www.cme.net. In the future, we will
continue to use these channels to communicate important information
about CME and our operations. Information that we post on our
website could be deemed material. Therefore, we encourage
investors, the media, our customers and others interested in CME to
review the information we post at www.cme.net.
CME is a media and entertainment company
operating leading businesses in six Central and Eastern European
markets with an aggregate population of approximately 50 million
people. CME broadcasts 36 television channels in Bulgaria (bTV, bTV
Cinema, bTV Comedy, bTV Action, bTV Lady and Ring.bg), Croatia
(Nova TV, Doma, Nova World and MiniTV), the Czech Republic (TV
Nova, Nova Cinema, Nova Sport 1, Nova Sport 2, Nova International,
Fanda, Smichov and Telka), Romania (PRO TV, PRO TV International,
Acasa, Acasa Gold, PRO Cinema, Sport.ro, MTV Romania, PRO TV
Chisinau and Acasa in Moldova), the Slovak Republic (TV Markíza,
Markíza International, Doma and Dajto), and Slovenia (POP TV, Kanal
A, Brio, Oto and Kino). CME is traded on the NASDAQ Global Select
Market and the Prague Stock Exchange under the ticker symbol
“CETV”.
|
CENTRAL EUROPEAN MEDIA ENTERPRISES
LTD. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(US$ 000's, except per share
data) |
(unaudited) |
|
|
For the Three Months Ended June
30, |
|
2016 |
|
|
2015 |
|
Net
revenues |
$ |
175,206 |
|
|
$ |
166,834 |
|
Operating
expenses: |
|
|
|
Content costs |
77,282 |
|
|
73,437 |
|
Other operating costs |
17,939 |
|
|
17,422 |
|
Depreciation of property, plant and
equipment |
7,627 |
|
|
6,936 |
|
Amortization of broadcast licenses
and other intangibles |
2,114 |
|
|
3,434 |
|
Cost of
revenues |
104,962 |
|
|
101,229 |
|
Selling, general and administrative
expenses |
26,353 |
|
|
28,712 |
|
Restructuring costs |
— |
|
|
452 |
|
Operating
income |
43,891 |
|
|
36,441 |
|
Interest expense |
(29,545 |
) |
|
(41,746 |
) |
Loss on extinguishment of debt |
(150,158 |
) |
|
— |
|
Non-operating expense, net |
(167 |
) |
|
(2,904 |
) |
Loss before
tax |
(135,979 |
) |
|
(8,209 |
) |
Provision for income taxes |
(5,270 |
) |
|
(3,460 |
) |
Loss from
continuing operations |
(141,249 |
) |
|
(11,669 |
) |
Income from
discontinued operations, net of tax |
— |
|
|
2,684 |
|
Net
loss |
(141,249 |
) |
|
(8,985 |
) |
Net (income) / loss attributable to
noncontrolling interests |
(68 |
) |
|
307 |
|
Net loss
attributable to CME Ltd. |
$ |
(141,317 |
) |
|
$ |
(8,678 |
) |
|
|
|
|
PER SHARE
DATA: |
|
|
|
Net (loss) / income per
share attributable to CME Ltd.: |
|
|
|
Continuing operations - Basic and
diluted |
$ |
(0.98 |
) |
|
$ |
(0.11 |
) |
Discontinued operations - Basic and
diluted |
0.00 |
|
|
0.02 |
|
Net loss per share - Basic and
diluted |
(0.98 |
) |
|
(0.09 |
) |
|
|
|
|
Weighted average common
shares used in computing per share amounts (000's): |
|
|
|
Basic and diluted |
149,083 |
|
|
146,743 |
|
|
CENTRAL EUROPEAN MEDIA ENTERPRISES
LTD. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(US$ 000's, except per share
data) |
(unaudited) |
|
|
For the Six Months Ended June 30, |
|
2016 |
|
|
2015 |
|
Net
revenues |
$ |
304,206 |
|
|
$ |
292,967 |
|
Operating
expenses: |
|
|
|
Content costs |
149,260 |
|
|
144,727 |
|
Other operating costs |
34,393 |
|
|
34,460 |
|
Depreciation of property, plant and
equipment |
14,912 |
|
|
13,937 |
|
Amortization of broadcast licenses
and other intangibles |
4,174 |
|
|
6,933 |
|
Cost of
revenues |
202,739 |
|
|
200,057 |
|
Selling, general and administrative
expenses |
49,813 |
|
|
72,613 |
|
Restructuring costs |
— |
|
|
1,095 |
|
Operating
income |
51,654 |
|
|
19,202 |
|
Interest expense |
(78,699 |
) |
|
(81,864 |
) |
Loss on extinguishment of debt |
(150,158 |
) |
|
— |
|
Non-operating income / (expense),
net |
1,249 |
|
|
(15,645 |
) |
Loss before
tax |
(175,954 |
) |
|
(78,307 |
) |
Provision for income taxes |
(5,989 |
) |
|
(3,605 |
) |
Loss from
continuing operations |
(181,943 |
) |
|
(81,912 |
) |
Loss from discontinued
operations, net of tax |
— |
|
|
(604 |
) |
Net
loss |
(181,943 |
) |
|
(82,516 |
) |
Net loss attributable to
noncontrolling interests |
191 |
|
|
564 |
|
Net loss
attributable to CME Ltd. |
$ |
(181,752 |
) |
|
$ |
(81,952 |
) |
|
|
|
|
PER SHARE
DATA: |
|
|
|
Net loss per share
attributable to CME Ltd.: |
|
|
|
Continuing operations - Basic and
diluted |
$ |
(1.29 |
) |
|
$ |
(0.61 |
) |
Discontinued operations - Basic and
diluted |
0.00 |
|
|
(0.01 |
) |
Net loss per share - Basic and
diluted |
(1.29 |
) |
|
(0.62 |
) |
|
|
|
|
Weighted average common
shares used in computing per share amounts (000's): |
|
|
|
Basic and diluted |
148,080 |
|
|
146,675 |
|
|
CENTRAL EUROPEAN MEDIA ENTERPRISES
LTD. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(US$ 000's) |
(unaudited) |
|
|
June 30, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
46,442 |
|
|
$ |
61,679 |
|
Other current assets |
286,941 |
|
|
296,605 |
|
Total current
assets |
333,383 |
|
|
358,284 |
|
Property, plant and
equipment, net |
105,644 |
|
|
108,522 |
|
Goodwill and other
intangible assets, net |
782,415 |
|
|
773,405 |
|
Other non-current
assets |
200,511 |
|
|
200,206 |
|
Total
assets |
$ |
1,421,953 |
|
|
$ |
1,440,417 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Accounts payable and accrued
liabilities |
$ |
137,378 |
|
|
$ |
134,705 |
|
Current portion of long-term debt
and other financing arrangements |
1,157 |
|
|
1,155 |
|
Other current liabilities |
24,664 |
|
|
10,448 |
|
Total current
liabilities |
163,199 |
|
|
146,308 |
|
Long-term debt and
other financing arrangements |
1,053,443 |
|
|
908,521 |
|
Other non-current
liabilities |
56,857 |
|
|
65,749 |
|
Total
liabilities |
$ |
1,273,499 |
|
|
$ |
1,120,578 |
|
|
|
|
|
Series B Convertible
Redeemable Preferred Stock |
$ |
250,148 |
|
|
$ |
241,198 |
|
|
|
|
|
EQUITY |
|
|
|
Common Stock |
$ |
11,316 |
|
|
$ |
10,864 |
|
Additional paid-in capital |
1,911,425 |
|
|
1,914,050 |
|
Accumulated deficit |
(1,786,997 |
) |
|
(1,605,245 |
) |
Accumulated other comprehensive
loss |
(238,483 |
) |
|
(242,409 |
) |
Total CME Ltd.
shareholders' (deficit) / equity |
(102,739 |
) |
|
77,260 |
|
Noncontrolling interests |
1,045 |
|
|
1,381 |
|
Total (deficit)
/ equity |
(101,694 |
) |
|
78,641 |
|
Total
liabilities and equity |
$ |
1,421,953 |
|
|
$ |
1,440,417 |
|
|
CENTRAL EUROPEAN MEDIA ENTERPRISES
LTD. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(US$ 000's) |
(unaudited) |
|
|
For the Six Months Ended June 30, |
|
2016 |
|
|
2015 |
|
Net cash generated from
continuing operating activities |
$ |
17,549 |
|
|
$ |
41,522 |
|
Net cash used in
continuing investing activities |
(11,255 |
) |
|
(14,388 |
) |
Net cash used in
continuing financing activities |
(23,970 |
) |
|
(27,353 |
) |
Net cash used in
discontinued operations - operating activities |
— |
|
|
(1,630 |
) |
Net cash provided by
discontinued operations - investing activities |
705 |
|
|
6,954 |
|
Net cash used in
discontinued operations - financing activities |
— |
|
|
(56 |
) |
Impact of exchange rate
fluctuations on cash and cash equivalents |
1,734 |
|
|
(1,334 |
) |
Net (decrease)
/ increase in cash and cash equivalents |
$ |
(15,237 |
) |
|
$ |
3,715 |
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid for
interest |
$ |
35,712 |
|
|
$ |
9,264 |
|
Cash paid for guarantee
fees |
20,000 |
|
|
— |
|
Interest paid in
kind |
$ |
22,257 |
|
|
$ |
43,681 |
|
|
|
|
|
Supplemental
disclosure of non-cash financing activities: |
|
|
|
Accretion on Series B
Convertible Redeemable Preferred Stock |
$ |
8,950 |
|
|
$ |
8,405 |
|
|
|
|
|
|
|
|
|
Segment Data
We manage our business on a geographical basis,
with six reporting segments: Bulgaria, Croatia, the Czech Republic,
Romania, the Slovak Republic and Slovenia. These segments reflect
how CME Ltd.’s operating performance is evaluated by our chief
operating decision makers, who we have identified as our co-Chief
Executive Officers; how operations are managed by segment managers;
and the structure of our internal financial reporting.
We evaluate our consolidated results and the
performance of our segments based on net revenues and OIBDA.
Stock-based compensation and certain other items are not allocated
to our segments for purposes of evaluating their performance and
therefore are not included in their respective OIBDA. Intersegment
revenues and profits have been eliminated in consolidation.
Below are tables showing our net revenues and
OIBDA by segment for the three and six months ended
June 30, 2016 and June 30, 2015:
|
(US$
000's) |
For the Three Months Ended June
30, |
(unaudited) |
2016 |
|
2015 |
|
% Actual |
|
% Lfl (1) |
Net
revenues |
|
|
|
|
|
|
|
Bulgaria |
$ |
20,455 |
|
|
$ |
19,420 |
|
|
5.3 |
% |
|
3.4 |
% |
Croatia |
16,559 |
|
|
16,242 |
|
|
2.0 |
% |
|
(1.6 |
)% |
Czech Republic |
50,919 |
|
|
52,131 |
|
|
(2.3 |
)% |
|
(5.4 |
)% |
Romania |
48,929 |
|
|
44,034 |
|
|
11.1 |
% |
|
10.4 |
% |
Slovak Republic |
22,540 |
|
|
20,236 |
|
|
11.4 |
% |
|
9.2 |
% |
Slovenia |
16,116 |
|
|
15,063 |
|
|
7.0 |
% |
|
4.9 |
% |
Intersegment
revenues |
(312 |
) |
|
(292 |
) |
|
NM (2) |
|
NM (2) |
Total net
revenues |
$ |
175,206 |
|
|
$ |
166,834 |
|
|
5.0 |
% |
|
2.8 |
% |
|
|
(US$
000's) |
For the Six Months Ended June
30, |
(unaudited) |
2016 |
|
2015 |
|
% Actual |
|
% Lfl (1) |
Net
revenues |
|
|
|
|
|
|
|
Bulgaria |
$ |
36,314 |
|
|
$ |
36,204 |
|
|
0.3 |
% |
|
0.4 |
% |
Croatia |
28,204 |
|
|
28,235 |
|
|
(0.1 |
)% |
|
(1.6 |
)% |
Czech Republic |
89,527 |
|
|
87,096 |
|
|
2.8 |
% |
|
0.9 |
% |
Romania |
81,299 |
|
|
77,556 |
|
|
4.8 |
% |
|
6.0 |
% |
Slovak Republic |
41,602 |
|
|
37,774 |
|
|
10.1 |
% |
|
10.2 |
% |
Slovenia |
27,769 |
|
|
26,543 |
|
|
4.6 |
% |
|
4.5 |
% |
Intersegment
revenues |
(509 |
) |
|
(441 |
) |
|
NM (2) |
|
NM (2) |
Total net
revenues |
$ |
304,206 |
|
|
$ |
292,967 |
|
|
3.8 |
% |
|
3.4 |
% |
|
(1 |
) |
% Lfl (like-for-like) variance reflects the
impact of applying the current period average exchange rates to the
prior period revenues and costs. |
|
(2 |
) |
Number is not meaningful. |
|
|
|
|
(US$
000's) |
For the Three Months Ended June
30, |
(unaudited) |
2016 |
|
2015 |
|
% Act |
|
% Lfl (1) |
OIBDA |
|
|
|
|
|
|
|
Bulgaria |
$ |
5,954 |
|
|
$ |
4,045 |
|
|
47.2 |
% |
|
44.8 |
% |
Croatia |
4,501 |
|
|
4,972 |
|
|
(9.5 |
)% |
|
(12.7 |
)% |
Czech Republic |
23,099 |
|
|
24,238 |
|
|
(4.7 |
)% |
|
(7.7 |
)% |
Romania |
22,962 |
|
|
15,419 |
|
|
48.9 |
% |
|
48.2 |
% |
Slovak Republic |
3,158 |
|
|
3,627 |
|
|
(12.9 |
)% |
|
(15.1 |
)% |
Slovenia |
1,624 |
|
|
963 |
|
|
68.6 |
% |
|
66.4 |
% |
Elimination |
(62 |
) |
|
15 |
|
|
NM (2) |
|
NM (2) |
Total Operating
Segments |
61,236 |
|
|
53,279 |
|
|
14.9 |
% |
|
12.4 |
% |
Central |
(7,604 |
) |
|
(6,468 |
) |
|
(17.6 |
)% |
|
(15.2 |
)% |
Total
OIBDA |
$ |
53,632 |
|
|
$ |
46,811 |
|
|
14.6 |
% |
|
12.1 |
% |
|
|
(US$
000's) |
For the Six Months Ended June
30, |
(unaudited) |
2016 |
|
2015 |
|
% Act |
|
% Lfl (1) |
OIBDA |
|
|
|
|
|
|
|
Bulgaria |
$ |
7,023 |
|
|
$ |
6,243 |
|
|
12.5 |
% |
|
12.0 |
% |
Croatia |
5,902 |
|
|
6,834 |
|
|
(13.6 |
)% |
|
(16.5 |
)% |
Czech Republic |
33,173 |
|
|
34,329 |
|
|
(3.4 |
)% |
|
(6.0 |
)% |
Romania |
32,424 |
|
|
18,780 |
|
|
72.7 |
% |
|
72.1 |
% |
Slovak Republic |
5,551 |
|
|
3,482 |
|
|
59.4 |
% |
|
48.8 |
% |
Slovenia |
916 |
|
|
1,323 |
|
|
(30.8 |
)% |
|
(32.7 |
)% |
Elimination |
(68 |
) |
|
(35 |
) |
|
NM (2) |
|
NM (2) |
Total Operating
Segments |
84,921 |
|
|
70,956 |
|
|
19.7 |
% |
|
17.1 |
% |
Central |
(14,181 |
) |
|
(12,697 |
) |
|
(11.7 |
)% |
|
(11.3 |
)% |
Total
OIBDA |
$ |
70,740 |
|
|
$ |
58,259 |
|
|
21.4 |
% |
|
18.4 |
% |
|
(1 |
) |
% Lfl (like-for-like) variance reflects the
impact of applying the current period average exchange rates to the
prior period revenues and costs. |
|
(2 |
) |
Number is not meaningful. |
|
|
Non-GAAP Financial Measures
In this release we refer to several non-GAAP
financial measures, including OIBDA, OIBDA margin, free cash flow
and unlevered free cash flow. We believe that each of these metrics
are useful to investors for the reasons outlined below. Non-GAAP
financial measures may not be comparable to similar measures
reported by other companies. Non-GAAP financial measures
should be evaluated in conjunction with, and are not a substitute
for, US GAAP financial measures.
We evaluate our consolidated results and the
performance of our segments based on net revenues and OIBDA (as
defined below). We believe OIBDA is useful to investors because it
provides a 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 and unlevered
free cash flow (as defined below) are also used as a component in
determining management bonuses.
OIBDA includes amortization and impairment of
program rights and is determined as operating income / loss before
depreciation, amortization of intangible assets and impairments of
assets and certain unusual or infrequent items that are not
considered by our co-CEOs when evaluating our performance.
Stock-based compensation and certain other items are not allocated
to our segments for purposes of evaluating their performance and
therefore are not included in their respective OIBDA. Our key
performance measure of the efficiency of our consolidated
operations and our segments is OIBDA margin. We define OIBDA margin
as the ratio of OIBDA to net revenues. Intersegment revenues and
profits have been eliminated on consolidation.
We have previously used free cash flow as a
measure of the ability of our operations to generate cash. We
define free cash flow as cash flows from continuing operating
activities less purchases of property, plant and equipment, net of
disposals of property, plant and equipment and excluding the cash
impact of certain unusual or infrequent items that are not included
in costs charged in arriving at OIBDA because they are not
considered by our co-CEOs when evaluating performance. Following
the refinancing transaction completed in April, the amount of
interest and related guarantee fees on our outstanding indebtedness
that is paid in cash has increased. Since we expect to use cash
generated by the business to pay more interest and related
guarantee fees in cash, and these cash payments are reflected in
free cash flow, we think unlevered free cash flow, defined as free
cash flow before cash payments for interest and guarantee fees,
better illustrates the cash generated by our operations when
comparing periods.
For additional information regarding our
business segments, see Item 1, Note 18, "Segment Data" in
our Form 10-Q.
The analysis in this release contains references
to like-for-like or constant currency percentage movements (“%
Lfl”). These references reflect the impact of applying the current
period average exchange rates to the prior period revenues and
costs. Given the significant movement of the currencies in the
markets in which we operate against the dollar, we believe that it
is useful to provide percentage movements based on like-for-like
percentage movements as well as actual (“% Act”) percentage
movements (which includes the effect of foreign exchange). Unless
otherwise stated, all percentage increases or decreases in the
release refer to year-on-year percentage changes between the three
and six months ended June 30, 2016 and 2015.
|
|
|
|
(US$
000's) |
For the Three Months Ended June
30, |
|
For the Six Months Ended June 30, |
(unaudited) |
2016 |
|
2015 |
|
2016 |
|
2015 |
Total
OIBDA: |
$ |
53,632 |
|
|
$ |
46,811 |
|
|
$ |
70,740 |
|
|
$ |
58,259 |
|
Depreciation of
property, plant and equipment |
(7,627 |
) |
|
(6,936 |
) |
|
(14,912 |
) |
|
(13,937 |
) |
Amortization of
intangible assets |
(2,114 |
) |
|
(3,434 |
) |
|
(4,174 |
) |
|
(6,933 |
) |
Other items (3) |
— |
|
|
— |
|
|
— |
|
|
(18,187 |
) |
Operating
income |
$ |
43,891 |
|
|
$ |
36,441 |
|
|
$ |
51,654 |
|
|
$ |
19,202 |
|
|
(3 |
) |
Other items for the six months ended June 30,
2016 reflects accruals that were subsequently reversed related to
tax audits then underway in Romania. Since the charges recorded in
the first quarter of 2015 were not included in OIBDA, our
subsequent reversal of these charges during 2015 were similarly
excluded from OIBDA. |
|
|
|
|
|
For the Six Months Ended June 30, |
|
2016 |
|
2015 |
Net cash
generated from continuing operating activities |
$ |
17,549 |
|
|
$ |
41,522 |
|
Capital expenditure,
net of proceeds from disposals |
(11,255 |
) |
|
(14,388 |
) |
Free cash
flow |
6,294 |
|
|
27,134 |
|
Cash paid for
interest |
35,712 |
|
|
9,264 |
|
Cash paid for guarantee
fees |
20,000 |
|
|
— |
|
Unlevered free
cash flow |
$ |
62,006 |
|
|
$ |
36,398 |
|
For additional information, please visit www.cme.net or contact:
Mark Kobal
Head of Investor Relations
Central European Media Enterprises
+420 242 465 576
mark.kobal@cme.net
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