THIRD QUARTER- Net
revenues increased 8% at constant rates to US$ 126.7 million
-- Operating income decreased 71% at constant
rates to US$ 8.4 million -- OIBDA more than
doubled to US$ 18.0 million -
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, 2016.
Operational and financial highlights:
- TV advertising revenues increased nearly 5% at constant rates
in the first nine months of 2016, which included growth in the
three largest markets, the Czech Republic, Romania and the Slovak
Republic.
- Carriage fees and subscription revenues increased 8% at
constant rates in the first nine months of 2016 due primarily to
growth in the number of subscribers, better channel offerings, and
new channel launches.
- Overall costs charged in arriving at OIBDA were flat at
constant rates in the three and nine months ended
September 30, 2016 as an increase in content costs was
more than offset by savings in other costs.
- OIBDA margin increased to 14% and 21% in the three and nine
months ended September 30, 2016 from 7% and 16% in the
same periods in 2015.
- Operating income for the nine months ended
September 30, 2016 increased 22% at constant rates.
Excluding the reversal of non-cash charges in 2015 related to tax
audits in Romania, operating results for the three and nine months
ended September 30, 2015 were a loss of US$ 1.3 million
and income of US$ 36.1 million, respectively.
- Unlevered free cash flow for the nine months ended
September 30, 2016 increased 44%, 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$ 27.5 million of guarantee fees previously paid
in kind.
- Cash generated by the business and the year-on-year improvement
in OIBDA reduced the net leverage ratio below seven times, so the
cost of borrowing on approximately half of our debt will now
decrease an additional 100 basis points to 9%.
Michael Del Nin, Co-Chief Executive Officer,
commented: "These results are, on a relative basis, arguably the
best we have seen all year. Due to the combination of robust
revenue growth and effective cost control, we've more than doubled
OIBDA in the quarter compared to the same period in 2015. We
believe these results keep us well on track to deliver another full
year of excellent financial performance."
Christoph Mainusch, Co-Chief Executive Officer,
added: "Our results today reflect not just an improvement in
profitability, but also better engagement with our audiences as the
gap between us and our closest commercial competitor widened in
five out of six markets during the third quarter. We believe we
continue to provide the most efficient medium for advertisers to
reach consumers in all countries in which we operate."
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
September 30, 2016
Headline consolidated results for the three
months ended September 30, 2016 and
September 30, 2015 were:
(US$ 000's,
except per share data) |
For the Three Months Ended September
30, |
(unaudited) |
2016 |
|
2015 |
|
% Actual |
|
% Lfl (1) |
Net revenues |
$ |
126,706 |
|
|
$ |
117,322 |
|
|
|
8.0 |
% |
|
|
8.2 |
% |
Operating income |
8,384 |
|
|
28,853 |
|
|
|
(70.9 |
)% |
|
|
(70.5 |
)% |
Operating margin |
6.6 |
% |
|
24.6 |
% |
|
|
(18.0 |
)p.p. |
|
|
(17.7 |
)p.p. |
OIBDA |
18,014 |
|
|
8,353 |
|
|
|
115.7 |
% |
|
|
120.7 |
% |
OIBDA margin |
14.2 |
% |
|
7.1 |
% |
|
|
7.1 |
p.p. |
|
|
7.2 |
p.p. |
Loss from continuing
operations |
(19,823 |
) |
|
(21,510 |
) |
|
|
7.8 |
% |
|
|
9.3 |
% |
Fully diluted loss from
continuing operations per share |
$ |
(0.14 |
) |
|
$ |
(0.17 |
) |
|
|
17.6 |
% |
|
|
22.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Results for the Nine Months Ended
September 30, 2016
Headline consolidated results for the nine
months ended September 30, 2016 and
September 30, 2015 were:
(US$ 000's,
except per share data) |
For the Nine Months Ended September
30, |
(unaudited) |
2016 |
|
2015 |
|
% Actual |
|
% Lfl (1) |
Net revenues |
$ |
430,912 |
|
|
$ |
410,289 |
|
|
5.0 |
% |
|
4.8 |
% |
Operating income |
60,038 |
|
|
48,055 |
|
|
24.9 |
% |
|
22.4 |
% |
Operating margin |
13.9 |
% |
|
11.7 |
% |
|
2.2 |
p.p. |
|
2.0 |
p.p. |
OIBDA |
88,754 |
|
|
66,612 |
|
|
33.2 |
% |
|
30.7 |
% |
OIBDA margin |
20.6 |
% |
|
16.2 |
% |
|
4.4 |
p.p. |
|
4.1 |
p.p. |
Loss on extinguishment
of debt |
(150,158 |
) |
|
— |
|
|
NM (2) |
|
NM (2) |
Loss from continuing
operations |
(201,766 |
) |
|
(103,422 |
) |
|
NM (2) |
|
NM (2) |
Fully diluted loss from
continuing operations per share |
$ |
(1.42 |
) |
|
$ |
(0.79 |
) |
|
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 third quarter results on Tuesday, October 25, 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 +1-646-254-3369 ten minutes prior to
the start time and reference passcode 7983768. The conference call
will also 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 of the webcast 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 September 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
impact of global economic conditions on our markets; 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
September 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
September 30, 2016, which was filed with the Securities
and Exchange Commission on October 25, 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 September
30, |
|
2016 |
|
2015 |
Net
revenues |
$ |
126,706 |
|
|
$ |
117,322 |
|
Operating
expenses: |
|
|
|
Content
costs |
64,487 |
|
|
58,983 |
|
Other
operating costs |
17,024 |
|
|
17,180 |
|
Depreciation of property, plant and equipment |
7,557 |
|
|
6,974 |
|
Amortization of broadcast licenses and other intangibles |
2,073 |
|
|
2,695 |
|
Cost of
revenues |
91,141 |
|
|
85,832 |
|
Selling,
general and administrative expenses |
27,181 |
|
|
2,403 |
|
Restructuring costs |
— |
|
|
234 |
|
Operating
income |
8,384 |
|
|
28,853 |
|
Interest
expense |
(27,636 |
) |
|
(43,998 |
) |
Non-operating income / (expense), net |
387 |
|
|
(6,477 |
) |
Loss before
tax |
(18,865 |
) |
|
(21,622 |
) |
(Provision) / credit for income taxes |
(958 |
) |
|
112 |
|
Loss from
continuing operations |
(19,823 |
) |
|
(21,510 |
) |
Loss from discontinued
operations, net of tax |
— |
|
|
(265 |
) |
Net
loss |
(19,823 |
) |
|
(21,775 |
) |
Net loss
attributable to noncontrolling interests |
196 |
|
|
253 |
|
Net loss
attributable to CME Ltd. |
$ |
(19,627 |
) |
|
$ |
(21,522 |
) |
|
|
|
|
PER SHARE
DATA: |
|
|
|
Net loss per share
attributable to CME Ltd.: |
|
|
|
Continuing operations - Basic and diluted |
$ |
(0.14 |
) |
|
$ |
(0.17 |
) |
Discontinued operations - Basic and diluted |
0.00 |
|
|
(0.01 |
) |
Net loss
per share - Basic and diluted |
(0.14 |
) |
|
(0.18 |
) |
|
|
|
|
Weighted average common
shares used in computing per share amounts (000's): |
|
|
|
Basic and diluted |
153,494 |
|
|
147,054 |
|
|
|
|
|
|
|
CENTRAL EUROPEAN MEDIA ENTERPRISES
LTD. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(US$ 000's, except per share
data) |
(unaudited) |
|
|
|
For the Nine Months Ended September
30, |
|
2016 |
|
2015 |
Net
revenues |
$ |
430,912 |
|
|
$ |
410,289 |
|
Operating
expenses: |
|
|
|
Content
costs |
213,747 |
|
|
203,710 |
|
Other
operating costs |
51,417 |
|
|
51,640 |
|
Depreciation of property, plant and equipment |
22,469 |
|
|
20,911 |
|
Amortization of broadcast licenses and other intangibles |
6,247 |
|
|
9,628 |
|
Cost of
revenues |
293,880 |
|
|
285,889 |
|
Selling,
general and administrative expenses |
76,994 |
|
|
75,016 |
|
Restructuring costs |
— |
|
|
1,329 |
|
Operating
income |
60,038 |
|
|
48,055 |
|
Interest
expense |
(106,335 |
) |
|
(125,862 |
) |
Loss on
extinguishment of debt |
(150,158 |
) |
|
— |
|
Non-operating income / (expense), net |
1,636 |
|
|
(22,122 |
) |
Loss before
tax |
(194,819 |
) |
|
(99,929 |
) |
Provision
for income taxes |
(6,947 |
) |
|
(3,493 |
) |
Loss from
continuing operations |
(201,766 |
) |
|
(103,422 |
) |
Loss from discontinued
operations, net of tax |
— |
|
|
(869 |
) |
Net
loss |
(201,766 |
) |
|
(104,291 |
) |
Net loss
attributable to noncontrolling interests |
387 |
|
|
817 |
|
Net loss
attributable to CME Ltd. |
$ |
(201,379 |
) |
|
$ |
(103,474 |
) |
|
|
|
|
PER SHARE
DATA: |
|
|
|
Net loss per share
attributable to CME Ltd.: |
|
|
|
Continuing operations - Basic and diluted |
$ |
(1.42 |
) |
|
$ |
(0.79 |
) |
Discontinued operations - Basic and diluted |
0.00 |
|
|
(0.00 |
) |
Net loss
per share - Basic and diluted |
(1.42 |
) |
|
(0.79 |
) |
|
|
|
|
Weighted average common
shares used in computing per share amounts (000's): |
|
|
|
Basic and diluted |
149,898 |
|
|
146,803 |
|
|
|
|
|
|
|
CENTRAL EUROPEAN MEDIA ENTERPRISES
LTD. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(US$ 000's) |
(unaudited) |
|
|
|
|
|
September 30, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
Cash and
cash equivalents |
$ |
64,229 |
|
|
$ |
61,679 |
|
Other
current assets |
268,498 |
|
|
296,605 |
|
Total current
assets |
332,727 |
|
|
358,284 |
|
Property, plant and
equipment, net |
109,424 |
|
|
108,522 |
|
Goodwill and other
intangible assets, net |
788,062 |
|
|
773,405 |
|
Other non-current
assets |
214,023 |
|
|
200,206 |
|
Total
assets |
$ |
1,444,236 |
|
|
$ |
1,440,417 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Accounts
payable and accrued liabilities |
$ |
172,110 |
|
|
$ |
134,705 |
|
Current
portion of long-term debt and other financing arrangements |
1,258 |
|
|
1,155 |
|
Other
current liabilities |
23,210 |
|
|
10,448 |
|
Total current
liabilities |
196,578 |
|
|
146,308 |
|
Long-term debt and
other financing arrangements |
1,059,670 |
|
|
908,521 |
|
Other non-current
liabilities |
51,820 |
|
|
65,749 |
|
Total
liabilities |
$ |
1,308,068 |
|
|
$ |
1,120,578 |
|
|
|
|
|
Series B Convertible
Redeemable Preferred Stock |
$ |
252,512 |
|
|
$ |
241,198 |
|
|
|
|
|
EQUITY |
|
|
|
Common
Stock |
$ |
11,392 |
|
|
$ |
10,864 |
|
Additional paid-in capital |
1,910,620 |
|
|
1,914,050 |
|
Accumulated deficit |
(1,806,624 |
) |
|
(1,605,245 |
) |
Accumulated other comprehensive loss |
(232,545 |
) |
|
(242,409 |
) |
Total CME Ltd.
shareholders' (deficit) / equity |
(117,157 |
) |
|
77,260 |
|
Noncontrolling interests |
813 |
|
|
1,381 |
|
Total (deficit)
/ equity |
(116,344 |
) |
|
78,641 |
|
Total
liabilities and equity |
$ |
1,444,236 |
|
|
$ |
1,440,417 |
|
|
|
|
|
|
|
|
|
CENTRAL EUROPEAN MEDIA ENTERPRISES
LTD. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(US$ 000's) |
(unaudited) |
|
|
|
For the Nine Months Ended September
30, |
|
2016 |
|
2015 |
Net cash generated from
continuing operating activities |
$ |
42,564 |
|
|
$ |
79,085 |
|
Net cash used in
continuing investing activities |
(19,734 |
) |
|
(26,219 |
) |
Net cash used in
continuing financing activities |
(23,395 |
) |
|
(27,664 |
) |
Net cash provided by
discontinued operations |
705 |
|
|
4,011 |
|
Impact of exchange rate
fluctuations on cash and cash equivalents |
2,410 |
|
|
(1,730 |
) |
Net increase in
cash and cash equivalents |
$ |
2,550 |
|
|
$ |
27,483 |
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid for interest
(includes mandatory cash-pay guarantee fees) |
$ |
40,877 |
|
|
$ |
10,712 |
|
Cash paid for guarantee
fees previously paid in kind |
27,502 |
|
|
— |
|
Interest and related
guarantee fees paid in kind |
$ |
22,257 |
|
|
$ |
43,681 |
|
|
|
|
|
Supplemental
disclosure of non-cash financing activities: |
|
|
|
Accretion on Series B
Convertible Redeemable Preferred Stock |
$ |
11,314 |
|
|
$ |
12,796 |
|
|
|
|
|
|
|
|
|
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 nine months ended
September 30, 2016 and September 30, 2015:
(US$
000's) |
For the Three Months Ended September
30, |
(unaudited) |
2016 |
|
2015 |
|
% Actual |
|
% Lfl (1) |
Net
revenues |
|
|
|
|
|
|
|
Bulgaria |
$ |
13,789 |
|
|
$ |
14,673 |
|
|
(6.0 |
)% |
|
(6.0 |
)% |
Croatia |
9,833 |
|
|
9,949 |
|
|
(1.2 |
)% |
|
(2.2 |
)% |
Czech Republic |
39,031 |
|
|
35,575 |
|
|
9.7 |
% |
|
9.7 |
% |
Romania |
36,970 |
|
|
32,005 |
|
|
15.5 |
% |
|
16.6 |
% |
Slovak Republic |
17,864 |
|
|
17,223 |
|
|
3.7 |
% |
|
3.9 |
% |
Slovenia |
9,555 |
|
|
8,606 |
|
|
11.0 |
% |
|
11.2 |
% |
Intersegment
revenues |
(336 |
) |
|
(709 |
) |
|
NM (2) |
|
NM (2) |
Total net
revenues |
$ |
126,706 |
|
|
$ |
117,322 |
|
|
8.0 |
% |
|
8.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$
000's) |
For the Nine Months Ended September
30, |
(unaudited) |
2016 |
|
2015 |
|
% Actual |
|
% Lfl (1) |
Net
revenues |
|
|
|
|
|
|
|
Bulgaria |
$ |
50,103 |
|
|
$ |
50,877 |
|
|
(1.5 |
)% |
|
(1.4 |
)% |
Croatia |
38,037 |
|
|
38,184 |
|
|
(0.4 |
)% |
|
(1.8 |
)% |
Czech Republic |
128,558 |
|
|
122,671 |
|
|
4.8 |
% |
|
3.4 |
% |
Romania |
118,269 |
|
|
109,561 |
|
|
7.9 |
% |
|
9.1 |
% |
Slovak Republic |
59,466 |
|
|
54,997 |
|
|
8.1 |
% |
|
8.2 |
% |
Slovenia |
37,324 |
|
|
35,149 |
|
|
6.2 |
% |
|
6.2 |
% |
Intersegment
revenues |
(845 |
) |
|
(1,150 |
) |
|
NM (2) |
|
NM (2) |
Total net
revenues |
$ |
430,912 |
|
|
$ |
410,289 |
|
|
5.0 |
% |
|
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September
30, |
(unaudited) |
2016 |
|
2015 |
|
% Act |
|
% Lfl (1) |
OIBDA |
|
|
|
|
|
|
|
Bulgaria |
$ |
1,943 |
|
|
$ |
2,223 |
|
|
(12.6 |
)% |
|
(12.4 |
)% |
Croatia |
(516 |
) |
|
(909 |
) |
|
43.2 |
% |
|
43.9 |
% |
Czech Republic |
13,180 |
|
|
9,483 |
|
|
39.0 |
% |
|
39.2 |
% |
Romania |
12,606 |
|
|
6,953 |
|
|
81.3 |
% |
|
83.3 |
% |
Slovak Republic |
(383 |
) |
|
358 |
|
|
NM (2) |
|
NM (2) |
Slovenia |
(746 |
) |
|
(1,556 |
) |
|
52.1 |
% |
|
52.2 |
% |
Elimination |
11 |
|
|
(225 |
) |
|
NM (2) |
|
NM (2) |
Total Operating
Segments |
26,095 |
|
|
16,327 |
|
|
59.8 |
% |
|
61.7 |
% |
Central |
(8,081 |
) |
|
(7,974 |
) |
|
(1.3 |
)% |
|
(1.4 |
)% |
Total
OIBDA |
$ |
18,014 |
|
|
$ |
8,353 |
|
|
115.7 |
% |
|
120.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$
000's) |
For the Nine Months Ended September
30, |
(unaudited) |
2016 |
|
2015 |
|
% Act |
|
% Lfl (1) |
OIBDA |
|
|
|
|
|
|
|
Bulgaria |
$ |
8,966 |
|
|
$ |
8,466 |
|
|
5.9 |
% |
|
5.6 |
% |
Croatia |
5,386 |
|
|
5,925 |
|
|
(9.1 |
)% |
|
(12.4 |
)% |
Czech Republic |
46,353 |
|
|
43,812 |
|
|
5.8 |
% |
|
3.6 |
% |
Romania |
45,030 |
|
|
25,733 |
|
|
75.0 |
% |
|
75.1 |
% |
Slovak Republic |
5,168 |
|
|
3,840 |
|
|
34.6 |
% |
|
27.0 |
% |
Slovenia |
170 |
|
|
(233 |
) |
|
NM (2) |
|
NM (2) |
Elimination |
(57 |
) |
|
(260 |
) |
|
NM (2) |
|
NM (2) |
Total Operating
Segments |
111,016 |
|
|
87,283 |
|
|
27.2 |
% |
|
25.3 |
% |
Central |
(22,262 |
) |
|
(20,671 |
) |
|
(7.7 |
)% |
|
(7.5 |
)% |
Total
OIBDA |
$ |
88,754 |
|
|
$ |
66,612 |
|
|
33.2 |
% |
|
30.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
is 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. 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 are also used as components in determining management
bonuses.
OIBDA includes amortization and impairment of
program rights and is calculated 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 2016, 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 Part 1, 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 nine months ended September 30, 2016 and 2015.
(US$
000's) |
For the Three Months Ended September
30, |
|
For the Nine Months Ended September
30, |
(unaudited) |
2016 |
|
2015 |
|
2016 |
|
2015 |
Operating
income |
$ |
8,384 |
|
|
$ |
28,853 |
|
|
60,038 |
|
|
48,055 |
|
Depreciation of
property, plant and equipment |
7,557 |
|
|
6,974 |
|
|
22,469 |
|
|
20,911 |
|
Amortization of
intangible assets |
2,073 |
|
|
2,695 |
|
|
6,247 |
|
|
9,628 |
|
Other items (3) |
— |
|
|
(30,169 |
) |
|
— |
|
|
(11,982 |
) |
Total
OIBDA |
$ |
18,014 |
|
|
$ |
8,353 |
|
|
$ |
88,754 |
|
|
$ |
66,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Other items for the three and nine months ended September
30, 2016 reflects the reversal of charges related to tax audits in
Romania. Since the charges recorded in the fourth quarter of
2014 and the first quarter of 2015 were not included in OIBDA, our
subsequent reversal of these charges in the third quarter of 2015
were similarly excluded from OIBDA.
|
For the Nine Months Ended September
30, |
|
2016 |
|
2015 |
Net cash
generated from continuing operating activities |
$ |
42,564 |
|
|
$ |
79,085 |
|
Capital expenditures,
net of proceeds from disposals |
(19,734 |
) |
|
(26,219 |
) |
Free cash
flow |
22,830 |
|
|
52,866 |
|
Cash paid for interest
(including mandatory cash-pay guarantee fees) |
40,877 |
|
|
10,712 |
|
Cash paid for guarantee
fees previously paid in kind |
27,502 |
|
|
— |
|
Unlevered free
cash flow |
$ |
91,209 |
|
|
$ |
63,578 |
|
|
|
|
|
|
|
|
|
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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